[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
WASTE & DELAYS: EXAMINING VA'S
IMPROPER PAYMENTS IN ITS
COMPENSATION AND PENSION PROGRAMS
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HEARING
BEFORE THE
SUBCOMMITTEE ON DISABILITY
ASSISTANCE AND MEMORIAL AFFAIRS
OF THE
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
WEDNESDAY, MAY 14, 2025
__________
Serial No. 119-20
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via http://govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-153 WASHINGTON : 2025
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COMMITTEE ON VETERANS' AFFAIRS
MIKE BOST, Illinois, Chairman
AUMUA AMATA COLEMAN RADEWAGEN, MARK TAKANO, California, Ranking
American Samoa, Vice-Chairwoman Member
JACK BERGMAN, Michigan JULIA BROWNLEY, California
NANCY MACE, South Carolina CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa SHEILA CHERFILUS-MCCORMICK,
GREGORY F. MURPHY, North Carolina Florida
DERRICK VAN ORDEN, Wisconsin MORGAN MCGARVEY, Kentucky
MORGAN LUTTRELL, Texas DELIA RAMIREZ, Illinois
JUAN CISCOMANI, Arizona NIKKI BUDZINSKI, Illinois
KEITH SELF, Texas TIMOTHY M. KENNEDY, New York
JEN KIGGANS, Virginia MAXINE DEXTER, Oregon
ABE HAMADEH, Arizona HERB CONAWAY, New Jersey
KIMBERLYN KING-HINDS, Northern KELLY MORRISON, Minnesota
Mariana Islands
TOM BARRETT, Michigan
Jon Clark, Staff Director
Matt Reel, Democratic Staff Director
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
MORGAN LUTTRELL, Texas, Chairman
AUMUA AMATA COLEMAN RADEWAGEN, MORGAN MCGARVEY, Kentucky, Ranking
American Samoa Member
JACK BERGMAN, Michigan CHRIS PAPPAS, New Hampshire
NANCY MACE, South Carolina MAXINE DEXTER, Oregon
KEITH SELF, Texas KELLY MORRISON, Minnesota
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
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WEDNESDAY, MAY 14, 2025
Page
OPENING STATEMENTS
The Honorable Morgan Luttrell, Chairman.......................... 1
The Honorable Morgan McGarvey, Ranking Member.................... 2
WITNESSES
Panel I
Ms. Nina Tann, Executive Director, Compensation Service, Veterans
Benefits Administration, U.S. Department of Veterans Affairs... 4
Accompanied by:
Mr. Kevin Friel, Executive Director, Pension and Fiduciary
Service, Compensation Service, Veterans Benefits
Administration, U.S. Department of Veterans Affairs
Ms. Jeanine Gilson, Acting Chief Financial Officer, Veterans
Benefits Administration, U.S. Department of Veterans
Affairs
Mr. Brent E. Arronte, Deputy Assistant Inspector General for
Audits and Evaluations, Office of the Inspector General, U.S.
Department of Veterans Affairs................................. 6
APPENDIX
Prepared Statements Of Witnesses
Ms. Nina Tann Prepared Statement................................. 23
Mr. Brent E. Arronte Prepared Statement.......................... 27
Statements For The Record
Paralyzed Veterans of America Prepared Statement................. 39
Veterans of Foreign Wars of the United States Prepared Statement. 41
WASTE & DELAYS: EXAMINING VA'S
IMPROPER PAYMENTS IN ITS
COMPENSATION AND PENSION PROGRAMS
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WEDNESDAY, MAY 14, 2025
Subcommittee on Disability Assistance &
Memorial Affairs,
Committee on Veterans' Affairs,
U.S. House of Representatives,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m., in
room 360, Cannon House Office Building, Hon. Morgan Luttrell
(chairman of the subcommittee) presiding.
Present: Representatives Luttrell, Radewagen, Bergman,
Mace, Self, McGarvey, Pappas, Dexter, and Morrison.
OPENING STATEMENT OF MORGAN LUTTRELL, CHAIRMAN
Mr. Luttrell. The subcommittee will come to order. Thank
you to all the witnesses for being here today. We are going to
take a closer look at the U. S. Department of Veterans Affairs'
(VA) efforts to decrease improper payments for compensation and
pension benefits.
Congress has appropriated over $150 billion to the VA each
year for the past few years. We must ensure the VA is a
responsible steward of the taxpayer's investments. This means
paying every veteran the correct amount of benefits they have
earned the first time. When the VA makes overpayments and they
are not returned, taxpayer dollars are obviously wasted.
Overpayments can result in VA establishing debts that veterans
owe back to the VA, which can obviously create a paperwork
nightmare for them and their families. Current law allows VA to
either cancel these overpayment debts or waive collection of
those debts.
From Fiscal Year 2021 to 2024, VA has issued at least $5.1
billion in compensation and pension overpayments. VA collected
only a portion of those overpayment debts. This means that
during the last administration, VA spent $677 million in
taxpayer dollars roughly.
For example, Veterans Service Organizations (VSOs) and some
of my colleagues in Congress have told me that VA overpaid
their constituents for dependents. Those veterans correctly and
immediately updated VA that they no longer had a dependent
child or spouse. VA did not update the benefit payment
obviously until months later. As a result, many of those
veterans owe VA debt and are dealing with the stress of
repaying that underneath the waiver of collection for that
debt. If the VA did not make these overpayments in the first
place, obviously there would be fewer wasted taxpayer dollars
resulting in fewer uncollected overpayments.
I look forward to hearing from the VA witnesses today on
what the new administration plans to do to fix these
bureaucratic headaches and prevent delays in processing
dependent status updates. We have to streamline these things in
order to take the pressure off of our veterans.
There are other causes for VA improper payments of
compensation and pensions. For example, the VA Office of
Inspector General (OIG) issued several reports on how
inaccurate effective dates resulted in improper payments during
the last administration. The effective date for a grant of a
claim determines the amount a veteran will receive in
disability compensation back pay. OIG has issued reports,
including one in April, that VA incorrectly assigned effective
dates when it granted certain types of claims, such as the
Sergeant First Class Heath Robinson Honoring our Promise to
Address Comprehensive Toxics (PACT) Act claims and claims for
total ratings due to unemployability. OIG estimated those
incorrect effective dates resulted in at least $100 million in
improper compensation payments.
OIG found that the cause was ineffective policy guidance,
job aids, and training when it comes to assigning effective
dates of awards. I understand that this can be very difficult
to determine. I understand this can be very difficult to
determine the effective date of the award. I look forward to
hearing from OIG today and how the VA should provide claims
processors with effective training and guidance on how to
assign correct effective dates for all types of compensation
and pension claims.
Ultimately, when veterans owe VA a debt at no fault of
their own, why should taxpayers have to foot the bill? We must
ensure that VA makes every effort to prevent overpayments from
happening in the first place. I look forward to hearing from
our witnesses today on how we can cut down on wasteful spending
from improper payments and compensation and pension.
With that, I yield to the ranking member for his opening
statement.
OPENING STATEMENT OF MORGAN MCGARVEY, RANKING MEMBER
Mr. McGarvey. Thank you, Mr. Chairman. Appreciate your
comments and thank you all for being here today.
We have a responsibility to make sure that the VA uses
taxpayer money in an efficient and correct way. We also need to
guarantee that the VA pays each and every beneficiary what they
are due. Today I want to have a genuine conversation on what
works and what does not. I am not here to chastise the VA over
their supposed fiscal wrongdoing and then leave without ideas
for making the VA work better for the veteran.
I am also not here to just defend the status quo because,
at the end of the day, everything we do on this committee must
be centered around the veteran. It must make things better for
the veteran.
We are looking at massive programs here, complicated,
imperfect programs. I know we need to work to make them better.
To do that we are going to have to push for real efficiencies
and improvements. We absolutely need to make sure strong
payment controls are in place. Now that the VA is pushing out
more money than ever thanks to the PACT Act, we need to make
sure that the VA remains a good steward of taxpayer dollars,
but we must be precise. If we take an overly punitive and
difficult approach to compensation and pension payments, we run
the risk of leaving veterans out in the rain without the
benefits they have earned. I stress that they have earned.
These are the men and women who have put on the uniform for us.
They have earned these benefits. That does not mean it is an
anything goes policy with no guardrails. I believe this issue
deserves a bit more nuanced consideration than some of the
issues we deal with here.
I would love to say this is an easy fix, that the over
130,000 PACT Act claims will go through without incorrect
effective dates, that every veteran who gets divorced will
immediately notify the VA before they incur debts, or their
grieving widow will catch an overpayment during a difficult and
confusing time. That is not the case. It is not reality. As I
said, these are large, complex systems, and not only are they
run by humans, they are used by humans. That means there will
be errors, and even with the best possible software, there is
going to be some mistakes. Our goal, and I believe it is the
VA's goal as well, is to work hard to fully minimize any of
those errors or mistakes, get the veterans what they need, and
be strong stewards of taxpayer money.
I think we are all rowing the boat in that direction. I do
not suspect misconduct and incompetence around every corner. I
hope that today we can have a discussion with that nuance. I
also want to ensure that as we work to help the VA reduce the
errors in their payment systems, we are equally concerned about
what these errors mean to the beneficiaries on the other end.
That is our veterans.
Committee staff visited the Debt Management Center in
February and heard a couple of firsthand accounts of veterans
being confused, angry, and even suicidal because they incurred
a debt they did not know about. That is what I want to avoid. I
want to make sure that the VA has processes in place to protect
veterans and other beneficiaries, as well as the call center
employees taking their calls.
Mr. Chairman, I know it is both of our goals, that while we
look for ways to make the VA better, we do not forget the
veterans and the survivors and those serving them in the
process. I look forward to a productive discussion, and I yield
back.
Mr. Luttrell. Thank you, Mr. McGarvey. Welcome, everyone,
and thank you for coming today. I am going to introduce our
witnesses.
Our lead witness from the VA is Ms. Nina Tann, executive
director of compensation services at Veterans Benefits
Administration (VBA). Ms. Tann is joined by Mr. Kevin Friel,
executive director of pension and fiduciary services at VBA.
Ms. Tann is also joined by Ms. Jeanine Gilson, acting chief
financial officer for the VBA. Today's witness panel is also--
it also includes Mr. Brent Arronte, deputy assistant inspector
general for audits and evaluations at the VA Office of the
Inspector General.
Mr. Arronte, do I understand it correctly, this will not be
the last time I am seeing you or are they putting you out to
graze?
Mr. Arronte. By choice. I think 90 percent this will be my
last hearing.
Mr. Luttrell. Well, if that is the case. It has been an
absolute pleasure working with you over these past few years.
Mr. Arronte. Thank you, sir.
Mr. Luttrell. Fair winds and following seas, my friend.
That is a Navy term. Hope you understand it.
I ask the witnesses on the panel to please stand and raise
your right hand.
[Witnesses sworn.]
Mr. Luttrell. Thank you. Let the record reflect that the
witnesses have answered in the affirmative.
Ms. Tann, you are now recognized for 5 minutes to deliver
your opening statement on behalf of the VA. Ms. Tann, is your
mic on?
STATEMENT OF NINA TANN
Ms. Tann. I am sorry. Good morning. Chairman Luttrell,
Ranking Member McGarvey, and members of the subcommittee. Thank
you for the opportunity to appear before you today to discuss
the Department of Veteran Affairs' oversight of improper
payments within compensation and pension programs. With me
today from the Veterans Benefits Administration is Kevin Friel,
Executive Director, Pension and Fiduciary Service, and Jeanine
Gilson, active Chief Financial Officer.
At VA, we take our mission to serve veterans, their
families, and survivors very seriously. We are committed to
being good stewards of taxpayer dollars and we recognize that
improper payments are problematic for all of our stakeholders.
An improper payment occurs when a payment is made in the wrong
amount, either too much or too little, paid to the wrong person
or paid without the required documentation. We want to assure
Congress, veterans, and the American taxpayers that VA is
working diligently to safeguard not only veterans' and
beneficiaries' financial entitlements, but also the funds
appropriated to VA to carry out our sacred and honorable
mission. VA is using a range of strategies to proactively
address and mitigate potential improper payment issues, which I
will discuss today.
In Fiscal Year 2024, VA reduced improper payments by about
a billion dollars. Achieving this result was made possible by
leveraging data sharing agreements with multiple Federal
agencies. These provide critical information that inform the
propriety of payments, such as benefits related to military
duty status, benefit changes due to death, and income-related
information. Additionally, these partners provide information
that helps identify discrepancies or confirm information. These
agreements are used to establish or verify eligibility for
Federal benefits, verify compliance with Federal benefit
programs, recoup payments or delinquent funds, as well as
investigate potential fraud, waste, or abuse.
For example, VA made several improvements to data matching
agreements for VA's income-based pension benefits. VA now uses
Federal tax information to verify an applicant's income upfront
and income matching with the Social Security Administration to
verify continued eligibility for income-based benefits. In
addition to these strategies, VA continuously examines our
systems and processes to improve timeliness and accuracy,
thereby reducing improper payments.
In December 2024, VA modified its procedural guidance to
liberally interpret reevaluation provisions for dependency and
indemnity compensation (DIC) claims. These changes streamline
the decision-making process to mitigate the likelihood of
underpayments and ensure VA renders the correct decision the
first time. Additionally, these changes reduce requests for
unnecessary information and simplify the claim review process.
An area of crucial importance in making accurate payments
is the correct application of effective dates by claims
processors. Training and oversight through quality assurance
(QA) and having proper internal controls in place are at the
core of this issue. VA has taken steps to enhance training and
oversight of effective dates through use of quality standdowns,
refresher training to include a release of PACT Act training
that focus heavily on effective dates, and publication of job
aids based on findings from Special Focus Review, which allow
tracking and trending of errors. We also welcome the review and
analysis of our Office of Inspector General partners to examine
our procedures and identify areas for improvement.
For example, on April 15, OIG published a report on PACT
Act effective dates. In response to the OIG's six
recommendations, VBA is ensuring claims processors have the
guidance, training, and tools they need to assign the most
advantageous effective dates allowed by law for veterans
claims. VBA is also enhancing our collaboration with the Board
of Veterans Appeals and the Office of General Counsel (OFG) to
improve the quality, comprehensiveness, and legal accuracy of
its training programs in an effort to reduce delays, avoidable
errors, and rework.
VBA internal controls play a key role in reduction of
improper payments and include a robust quality program to
monitor claim accuracy. VA cannot reduce improper payments
alone. We need help from our veterans and beneficiaries to
reduce avoidable improper payments through the timely reporting
of updated information. Any changes to information such as
marital status, income, or dependency status must be shared
with VA as quickly as possible to avoid overpayments and
underpayments.
For example, if a veteran and their spouse divorce and VA
is not notified, this will result in an overpayment and
potentially a debt that the veteran will have to pay. It is
very important that veterans report any such changes to VA as
quickly as possible. To better support this, VA is working to
improve how it communicates the importance of reporting such
changes to veterans and beneficiaries and to make reporting
these changes as easily as possible. We are exploring
communication avenues to ensure veterans are aware of what
information we have and when they need to report a change.
VA continues to make improvements on reducing improper
payments and acknowledges there is more to be done. We are
committed to working with Congress and our stakeholders to
further improve, correct, and avoid improper payments where
possible. We thank the committee for their continued support of
programs that serve our Nation's veterans and look forward to
working with you.
Mr. Chairman, this concludes my statement. My colleagues
and I are prepared to respond to any questions from you and
members of the subcommittee.
[The Prepared Statement Of Nina Tann Appears In The
Appendix]
Mr. Luttrell. Thank you. The written statement of Ms. Tann
will be entered into the hearing record.
Mr. Arronte, you are now recognized for 5 minutes to
deliver your opening statement on behalf of OIG.
STATEMENT OF BRENT ARRONTE
Mr. Arronte. Chairman Luttrell, Ranking Member McGarvey,
and members of the subcommittee, thank you for the opportunity
to testify on the OIG's independent oversight of VBA's
Compensation and Benefits programs. We know that these programs
provide critical financial support to many veterans and other
beneficiaries who rely on their monthly benefit payments.
Our oversight work has identified deficiencies in VBA's
processes, IT systems, training, and internal controls. As a
result of that oversight, we focus on recommendations that will
help VA find ways to deliver timely, accurate payments so
beneficiaries are not impacted by miscalculations and incorrect
payments. Taking corrective action on OIG recommendations could
also help VBA be good stewards of taxpayer dollars.
In addition to our audit work, the OIG has a robust
criminal investigations program to combat bad actors who
fraudulently receive benefits. Improper payments are defined by
Office of Management and Budget (OMB) as ``Federal payments
that are for an incorrect amount, paid to an ineligible
recipient, or issued without adequate supporting
documentation.'' For the purposes of this hearing, we are
talking about underpayments and overpayments. My written
statement discusses several reports that identified improper
payments, but I want to focus on the importance of correctly
establishing the effective date of a claim.
The effective date of a claim is paramount to ensuring that
a veteran's compensation claim is paid on the correct date most
advantageous for the veteran. The PACT Act significantly
complicated effective date determinations by adding locations,
dates, and new presumptive conditions that claims processors
must consider.
VBA rolled out the majority of training for PACT Act claims
processors in December 2022 with a completion deadline of
January 2023. This was an accelerated training schedule to
facilitate implementation. VBA began processing PACT Act claims
for terminally ill veterans in December 2022 and processing all
other PACT Act claims in January 2023. In a report we released
last month, we found that in 24 percent of the cases we
reviewed, staff assigned incorrect effective dates that
resulted in $6.8 million in improper payments, including both
under and overpayments. Based on these projections, by August
2025 that amount will reach approximately $20 million.
We determined that this was the result of VBA not
effectively preparing claims processors to incorporate PACT Act
significant changes. The training guidance lacked the
specificity needed for complex decisions and the two IT tools
that were to assist in determining correct effective dates were
unreliable.
In our soon to be published report on VA's compliance with
the Payment Integrity Information Act, also known as PIIA, we
found VBA reported improper payments or VA reported improper
payments of approximately $2.2 billion in both over and
underpayment, which is down from $3.2 billion that was reported
in 2023. However, of that 2.2 billion, 1.1 billion is
considered a monetary loss and likely will not be recovered by
VA.
While VA satisfied 5 of 6 PIIA requirements this year, it
continued to report an improper payment rate of more than 10
percent for two programs. Those programs are VBA's pension
program and Veterans Health Administration's (VHA) purchased
long-term care services. While VBA's compensation program is
not included in this report, it will be next year since VA
identified the compensation program as a high priority program
because it is susceptible to significant improper payments.
The OIG is committed to continuing its independent
oversight work of claims processing activities and VBA
operations in order to create a better experience for veterans
and their beneficiaries.
Chairman Luttrell, Ranking Member McGarvey, and members of
the subcommittee, this concludes my statement. I would be happy
to address any questions you may have.
[The Prepared Statement Of Brent Arronte Appears In The
Appendix]
Mr. Luttrell. The written statement of Mr. Arronte will be
entered into the hearing record. We will now move to
questioning.
I recognize myself for 5 minutes.
Okay. That was quite the suitcase you just unpacked, sir.
Ms. Tann, this is how I am going to start this. How do we fix
this problem? Ms. Tann, you said we are exploring our avenues
of communicating with our veterans because this is a pretty
long cast here. It starts inside the VA with our digital
infrastructure, our training, manning. equipping with software
and hardware. As it moves downstream and touches the veterans,
they have to be able to communicate back into the organization
to say, hey, look, my dependents are no longer here or--and I
have got a divorce, or my spouse has passed away.
How do we--you mentioned Social Security earlier. How does
the VA--because in my district, people, they do not have
computers, they do not have phones. Our veterans like to dig in
and they are just kind of hidden. How do we track or help our
veterans track--how do we track our veterans if they lose a
spouse, so we are not providing--so the VA is not providing
overpayment? How do we fix that problem?
At the end of the day, I am going to say this now and I am
going to say it in my closing remarks, if we are spending $3
billion in overpayment and underpayment, and from the last 10
years, if we are doing our homework correctly, those numbers
have increased. We are losing ground, which is money that can
be spent in other areas of the VA.
I agree with my ranking member's opening statement. You
have--we have the ability to fix this and this is a problem.
Yes. When you are dealing with dollar bills, it is a big
problem considering the numbers. We have to be aggressive, we,
us, and the VA have to be aggressive on how to fix this. I
think it is absolutely possible in 2025.
Ms. Tann, you can--I will start with you.
Ms. Tann. Thank you for your question, Chairman. We are
looking at a number of avenues, but we also have a couple, a
lot of things currently in place. We are making sure to notify
veterans in our correspondence about when they need to report
changes to us, what we have of record, and how we are using
that information. We also have--they have the ability to report
to any of our public contact offices. They can make changes
through VA.gov as well as call our call center. We want to make
it as easy as possible for veterans to access and provide
updated information as much as is necessary.
We also have capabilities in which we use matching
agreements. You mentioned Social Security. Some of that is for
income-based benefits and entitlements. We also do death
matches so that we are made aware. We have like a survivor's
assistance office now that can help veterans kind of navigate
some of these situations. Really for information that only they
have, like if there is a divorce, if there is the death of a
spouse or the need to remove or add a dependent, that is only
information that veterans know that they have to come to us. We
are trying to open all the doors and make sure that they know
that they have to inform us and what information we are using
at any given time.
Mr. Luttrell. Do we have the exact, I am going to try to
say this right, do we have the exact number of how many
beneficiaries there are, how many we correspond with, and how
many respond back to the VA's requests? If we are pumping out
letters, Mr. Friel, to 100 veterans that we give--that are
beneficiaries and only 30 of them are responding back, but we
are still paying the other 70, do you have that number by
chance? Ms. Tann, I may be switching to Mr. Friel. I apologize.
Mr. Friel. No, sir, I do not have that number readily
available, but we can take that back.
Mr. Luttrell. Is that a question that is being asked in the
Department?
Mr. Friel. It is. We are looking at, and specifically in
our area, in Pension and Fiduciary, we are looking at the rate
of return when we do development actions or we do request for
information, the rate of return that we get for a reply.
Mr. Luttrell. Do you have like a projection or a window
that you can provide the committee today?
Mr. Friel. No, sir, I would just be making up an arbitrary
number, and I do not want to do that. We will----
Mr. Luttrell. I ask that you get that to us because, again,
just curiosity if we are in the billions in overpayments.
Mr. Friel. Sir, if you do not mind, one thing I would like
to expand on Ms. Tann's answer is----
Mr. Luttrell. Okay.
Mr. Friel [continuing]. with the Social Security death
match, originally, that was just for beneficiaries. We have
expanded that out to dependents on an award. To your question
about how we would find out if a spouse passed away, we will do
that through the Social Security death match. We are--Social
Security has the same limitation we do that they are dependent
upon a third party to notify them of a death. Once we get it,
we can start action with the veteran to remove that dependent
from their award.
Mr. Luttrell. Okay. I just am eager to know how many
beneficiaries there are, how many we send information to, and
how many are responding to that request, because the delta in
there, I would be curious to see what the number sign is and
how that is correlated.
Mr. Friel. Yes, sir. From that perspective, so just for
clarity, we do correspond with almost all veterans every year
when we do the cost-of-living adjustments, to what Ms. Tann
spoke about in the letters, we identify. As far as the other
actions where we do development and like a due process, is that
more the area that you are looking at?
Mr. Luttrell. Well, that might be where one of the misses
are----
Mr. Friel. Okay.
Mr. Luttrell [continuing]. that is causing the problem. I
mean, it is a lot. There is a lot of them, but that one I
make--I am sorry.
Ranking Member, you are recognized for 5 minutes, sir.
Mr. McGarvey. Thank you, Mr. Chairman. Thank you all for
being here again.
Ms. Tann, I will start with you this morning. For Fiscal
Year 2024, what were the reported level of improper payments
for both the compensation and pension services as real dollar
numbers and as a percentage?
Ms. Tann. Thank you for the question, sir. I am going to
ask our acting Chief Financial Officer if she will take that
question, please.
Ms. Gilson. Good morning and thank you for that question.
For Fiscal Year 2024, for compensation overpayment debts we
established $1.14 billion in overpayment debts and that is out
of an outlay of $161.196 billion, which comes out to a fraction
of 1 percent of improper payments. It is .72 percent of outlays
were improper. The breakout for the pension service for 2024,
their overpayment debts were $227.4 million out of an outlay of
$3.743 billion, which is a percent of outlays of 6.1 percent.
In total, when you add both of those numbers together, the
total compensation and pension overpayment debts established
was $1.366 billion out of a total compensation and pension
outlay of $161.196 billion for, again, a below 1 percent-
percentage of compensation and pension outlays. It is .85
percent were improper.
Mr. McGarvey. Got it. Of those improper payments, what
percentage were overpayments versus underpayments?
Ms. Gilson. I can do the rough math here from the agency
financial report for 2024. Again, these are projections that
are given to us after a statistically valid sample of 300 cases
is evaluated. From the statistically valid sample, pensions,
improper payments were $404 million and the overpayments were
$381.78 million, so in the magnitude of 80-ish percent.
Mr. McGarvey. Okay, run through that one more time for me.
The pensions were?
Ms. Gilson. Certainly. Improper payments as a whole--well,
improper payments, not including unknown payments where we do
not know whether the payment is improper or not because the
individual--the payment may be going through due process, so
for improper payments that actually have been identified in a
projection as being improper, the total was $404 million and
the overpayments of that 404 were $381.78 million.
Mr. McGarvey. Okay. Thank you. Do you think, do these
numbers show an increase or a decrease in improper payments for
these offices over prior years?
Ms. Gilson. For pension service, this is an increase. The
projection is an increase from 2023 to 2024.
Mr. McGarvey. Taking my own notes. Thank you for that.
This for Ms. Tann, but, you know, whoever has the answers
for it. As I understand it, compensation service will be
subject to more in-depth supervision under the Payments
Integrity Information Act. Can you tell us why and what changed
at Comp Service to make that necessary?
Ms. Tann. Sure. Thank you for the question. What it is is
that in Fiscal Year 2024 Compensation Service underwent a risk
assessment. Because of the pure scale of our program, as was
mentioned earlier, just the amount of outlays that we have, we
are susceptible to more improper payments. It is not
necessarily that anything wrong was done. We are in testing and
evaluation right now. That heightened awareness and risk
assessment as an internal control will lead us to reporting,
again, in 2025, after having being removed previously because
we met the PIIA requirements, and OIG concurred with that back
in April 2021, I believe.
Mr. McGarvey. Okay. We have got just a little bit of time
left. Would you say this is a function of scale and not an
issue of lack of proper controls or how would you characterize
it?
Ms. Tann. I think because of, as has been mentioned, just
the amount of beneficiaries and veterans that we are paying and
the vast dollar amounts that we are paying, we just are at
heightened risk. It is a combination of factors, again, that
you mentioned. I believe we have strong internal controls in
place and we are constantly working to improve those. I think
it is just based off the risk assessment, we have a higher risk
because of the amount of outlays that we have.
Mr. McGarvey. We are out of time, so I yield back to you,
Mr. Chairman.
Mr. Luttrell. Thank you, Mr. McGarvey.
Mr. Self, sir, you are recognized for 5 minutes.
Mr. Self. Thank you, Mr. Chairman. These are a lot of
numbers. Your last comment though, Ms. Tann, you are at a
higher risk because you have larger payments. Why is that
logical?
Ms. Tann. Because of the scale of our program and the
amount of beneficiaries and payments that we do make, we just
have a heightened level of risk around the potential for
improper payments, which could be under or overpayments.
Mr. Self. Yes, I would disagree with that assertion. Mr.
Friel, yes or no, did you fix the Social Security
Administration matching problem?
Mr. Friel. Yes, we did.
Mr. Self. How did you do that?
Mr. Friel. We did a testing with Social Security. We
validated that we were getting good responses. We have now
continued to run that match every quarter to ensure that we are
capturing the debt as soon as possible.
Mr. Self. Okay. This is one of my continuing comments about
VA. We hear a lot about your inputs, what you have done. I am
more interested in outputs. We just heard that improper
payments increased from Fiscal Year 2023 to Fiscal Year 2024.
When are we going to start seeing results to this fix to the
problem?
Mr. Friel. Sir, our projection right now is that the Fiscal
Year 2027 testing will get us below the 10 percent that is
required by PIIA. We are currently still doing the match--
cleaning up the matches from the historical point and we
believe that we will have a good force and--excuse me, we will
be a good position in 2027. We are also investigating the
opportunities for automation so that we can use automation to
address these quicker than having to work them through the
typical claims back--claims inventory.
Mr. Self. Okay. Well, I suggest we do it quickly because in
the 4 years under the Biden administration, we had almost $4
billion in overpayment debts.
Let us move to the veteran's child Chapter 35 education
benefits. Ms. Tann, we are talking about over $200 million for
this one small sector of what we are talking about. When did
you first learn about these overpayments for the $200 million-
plus?
Ms. Tann. Thank you, sir. We were actually notified, I
believe, in Compensation Service around--after the October 22
date. That is when we started to work together to look for
whatever solutions we can put in place. That information or
that notification actually went through our Office of Financial
Management (OFM) and then they passed the information to
Compensation Service. I may not have those exact dates right,
but the information flowed from our OFM office from our office
of business.
Mr. Self. Again, those are inputs. When do we see outputs?
Ms. Tann. Actually, we have made changes so that we have a
matching program through information between Compensation
Service and Education Service. So we actually do a monthly
match. We took--we started that in January 2025 to send notice.
In March 2025, we made adjustments to those awards creating no
overpayments for our beneficiaries. In April, we have started
that, we are doing that monthly match, and that allows us to
give veterans or beneficiaries due process of that prohibition
from them receiving both of those benefits at the same time.
Mr. Self. Okay. Mr. Arronte, you mentioned the PACT Act
complexity. Can you delve into that a little bit more? The PACT
Act has led to the largest increase in our payments to our
veterans forever. Can you go into that a little bit more to
include the incorrect dates? I would like to hear that. There
are also six factors I think you mentioned in your written
testimony. Can you go into the complexity of the PACT Act? My
bottom line question, and I have 1 minute, is does Congress
need to do something to fix the complexity?
Mr. Arronte. Great question, sir. Regarding effective
dates, the laws have not changed regarding effective dates.
What complicated the issue with PACT Act is that PACT Act added
a lot of locations where veterans could serve for presumptive
disabilities. They have added presumptive disabilities. All of
those issues are considered liberalizing legislation. Any time
that there is a liberalizing law, that is something that a
claims processor must consider.
An example of one of the most complicated issues is if a
veteran has an intent to file, meaning he is going to notify VA
or she is going to notify VA that they are going to file a
claim within the next year, the date of that intent to file is
one effective date. Then depending on what is being claimed,
there could be two or three or four other effective dates. It
could be the--the date when those disabilities, those
presumptive disabilities became law. It could be when there is
evidence that shows a veteran served in a specific location
that was added due to liberalizing legislation. They have to
consider all of those.
Mr. Self. Okay.
Mr. Arronte. At the speed they work, I think they missed
that.
Mr. Self. Is there any way we can cleanup those? Is there
any way we can cleanup those different dates?
Mr. Arronte. From a legislative standpoint, we have done
the work in that. I mean, our experience is this is something
that the Department has to fix. We have done some
brainstorming. Okay. If you will bear with me and regarding
effective dates----
Mr. Self. I think we are going to have a second round. We
may come back to this, Mr. Arronte.
Mr. Chairman, I yield back.
Mr. Luttrell. Mr. Arronte, continue on. That was going to
be my line of questioning, so please continue.
Mr. Arronte. Okay. Based on this recent work of effective
dates, this is something that we have seen over years.
Mr. Luttrell. When did you tell VBA that the improper
effective dates were the number one issue?
Mr. Arronte. In August 2022, I was invited to their rollout
implementation conference in Houston and we were asked to
provide the IG's concerns. Our very first talking point was
effective dates. We were told that, yes, we are going to train
effective dates. We know it is important and----
Mr. Luttrell. This is one of the major causes of this blow
up, I am going to assume.
Mr. Arronte. Yes, yes.
Mr. Luttrell. How do we fix this?
Mr. Arronte. Three things that me and my directors have
brainstormed. I am not advocating one or the other. It is a
choice of the Department.
The first is they could simplify the process of scenarios
that govern effective dates. Instead of having all of these
different levels of rules to govern effective dates, you could
say the date you filed a claim and when a law changed. Right?
You could simplify that. I think the pros to that, is you would
see a better processing by VBA. The cons, I think you would get
pushback from VSOs and veterans saying that just because it is
complicated, does it mean we do not do it?
The second is automation. I just created a division in the
last year that looks solely at VBA's automation. I can tell you
they are not there yet. One thing that we see with automation
is the more complicated the business process is, the more
difficult they are having to automate.
The third is what we have recommended is more effective
training and oversight. I know that sounds like a broken
record, but as we have seen, training was not effective. It
makes sense to have sound training. That when issues like the
PACT Act come or new Agent Orange presumptives come or whenever
somebody decides to change what benefit we are going to give
veterans, that training has to be updated, it has to be
adequate, and it has to be assessed.
Mr. Luttrell. Training, yes, absolutely.
Ms. Tann, how is the VA receiving that? I know, I
understand there is a challenge with the digital signature
inside the VA. We did not even have to walk down that road
right now. The VA has received the Inspector General's (IG)
report. Is there any adoption plan ahead of these effective
dates?
Ms. Tann. Absolutely. We have actually already implemented
several of their recommendations, at least three of them. We
worked to update our effective date builder tool in Veterans
Benefits Management System (VBMS) so that----
Mr. Luttrell. Did it solve that problem?
Ms. Tann. Does it solve the problem?
Mr. Luttrell. The PACT Act problem that we are running
into.
Ms. Tann. It does assist because it addresses things like
the intent to file, the liberalizing law, and the terror
activity. That was one of OIG's recommendations, which we did
implement earlier this month. We are in the process of
completing the job aid that they recommended. We also
referenced the outdated evaluation tool builder that was on our
internet page where all of our PACT Act resources are housed,
so that it notes that that is historical, so people will not be
using that. We are looking at the evaluation of our training as
OIG----
Mr. Luttrell. Inevitably the VA is going to make the
decision on what the effective date is and the VSOs and
everyone else is going to have to go with it, kicking and
screaming.
Ms. Tann. Yes, we are----
Mr. Luttrell. There is going to have to be a decision made
by the VA.
Ms. Tann. Yes, sir. We consistently look at how do we
improve and/or simplify our processes, as Mr. Arronte
mentioned, based off feedback and things of that nature?
Effective dates are complex. It is hard work and that is why we
have humans in that process. If we could automate things end to
end, we would. We cannot. We know we need subject matter
experts and human intervention in this process. There is a lot
to unpack for our claims processors. As Mr. Arronte said, PACT
Act did not change how we apply effective dates. It is just new
information and people applying them consistently to the most
advantageous available to the veteran under the law.
Mr. Luttrell. Okay. Ms. Gilson, did we do by--and this may
be a Mr. Arronte question, but did we do like a forensic audit
on the amount of money spent over the past 5, 10 years to make
sure that we are not--again, we are trending in the wrong
direction. Are we looking back on our numbers saying, hey,
look, we are not making those exact same overpayment or
underpayments and not replicating our mistakes? I understand
the expansiveness of the VA, but as we know, we are missing
something if we are still spending over a billion dollars in
overpayments. What is the comparative analysis that we are
doing in order to fix it? In next--and then how are we looking
for 2025? Are we already projected to spend more than we did in
2024? I just threw a lot at you, I apologize.
Ms. Gilson. No, that is fine. Thank you. A couple answers
to your question here.
Regarding the individualized tracking and trending of
errors and how do we correct those and make them better, the
Office of Financial Management does not do each's reviews on
the payments that go out. We take a review holistically at the
summary level.
Mr. Luttrell. I think we should.
Ms. Gilson. Well, maybe that is the case. However, what we
do within the Office of Financial Management is when we receive
the payment information from our business lines, we are
trusting, we are relying on the controls in place within that
business line to make sure that payment is accurate. From the
Office of Financial Management's perspective, we review the pay
file to make sure that the accounting is correct, that the
money is actually in the proper account to make those payments,
that the time of the payment is right, that the program is
correct. We are accountants and we do not have adjudicators on
the staff. If we did, we would need to reopen every single
claim that came through to validate that. And----
Mr. Luttrell. Well----
Ms. Gilson [continuing]. we do not----
Mr. Luttrell [continuing]. we are a billion dollars in the
hole. When are we going to start taking a look at that? I am
not beating you up.
Ms. Gilson. I understand.
Mr. Luttrell. This is me talking about it, Okay?
Ms. Gilson. Yes.
Mr. Luttrell. I mean, I do not know how far down the track
it has to go before somebody says, yes, that is probably a good
idea, which I think it is past time.
I am well over, Mr. McGarvey, I apologize. You alright with
that? Okay. I am sorry.
Ms. Gilson. Yes. No, no, thank you. I appreciate that.
Again, from the accounting perspective, we review to make sure
that everything is appropriate and interfaces to Treasury for
payment.
My office also does a review of fraud, waste, and abuse
types of situations. We have a tremendous partnership with our
colleagues within the Office of Inspector General. When we
identify fraud around payments, to make sure that we rectify
that-that veteran immediately, we make them whole. In many
cases, we can reissue payments same day when we get a call
saying, ``hey, I did not get my payment.'' When we identify
that there is fraud within, you know, scammers who are changing
bank accounts without veterans' knowledge, we do engage the
Office of Inspector General to investigate those areas and
identify, you know, further action taken.
Mr. Luttrell. Well, that is when you see it. I mean, the
event has already happened. We need to make--we are trying to
stop it beforehand.
Ms. Gilson. Correct. We do have some tools and techniques
that we have available where we are getting more proactively
involved in preventing fraud. We are using machine learning and
artificial intelligence and detailed analytics to get to----
Mr. Luttrell. This is where the Department needs to come to
Congress and say we have to have the money to implement this
type of software, this artificial intelligence, machine
learning. You have to tell us that because right now we are
just seeing the numbers and they are not, obviously, they are
not good, but we are all in to help you. Again, this problem
has been going on for, I mean, I am going to make the
assumption, for decades and let us fix it right here. We are
ready. Okay?
I am well over, Mr. McGarvey. Okay. Go ahead, finish.
Ms. Gilson. I think I am pretty much done.
Mr. Luttrell. Okay. All right. Mr. McGarvey, I am sorry,
sir. We recognize you.
Ms. Gilson. Thank you.
Mr. McGarvey. No, thank you, Mr. Chairman, and appreciate
this conversation because we want to get this right. Right? We
want to make sure that we are getting the money to our veterans
that they need, that they deserve, and that we are being good
stewards of taxpayer money.
In my round of questioning, I will refresh everyone's
memory because it was a second ago, I was talking with Ms. Tann
about whether this was a function of scale, not an issue of
lack of proper controls. She sort of said more, it is a
function of scale. I just wanted a second opinion on that. Mr.
Arronte, do you agree with that assessment?
Mr. Arronte. To some degree, sir, I do. It is a matter of
scale. If you look at the PIIA thresholds, those PIIA
thresholds are across the government. Every agency has those
same thresholds. If you are conducting a risk assessment of the
National Science Foundation and their budget is like this, they
mess one thing up and it is high risk. U.S. Department of
Defense (DOD), U.S. Health and Human Services (HHS), VA, their
budget is like this. They get this much more leeway to make
mistakes or have acceptable mistakes.
That is why I am a firm believer that as it relates to
compensation, compensation has been on and off the PIIA program
throughout the years. As the Chairman indicated in his opening
statements, we have a body of work that shows constantly that
there are improper payments. In the last nine reports I have
issued, seven show incorrect effective dates that lead to
improper payments. I think that is enough.
Where compensation should be, I think they should make an
exception. I think compensation should be on their high
priority list until the numbers come down. The reason I say
that, because if you look at some of the programs that are
tested in the PIIA-communications, utilities and rent, those
improper payments have dropped to .5 percent. Medical care
contracts have dropped over 2 percent. VA community care has
dropped from 5 percent to 1 percent. That tells me the process
works. You got to keep those programs on whether they meet the
threshold or not just because it is a form of function. There
is just so much disparity in the budget that allows more
mistakes with bigger organizations.
Mr. McGarvey. Mr. Arronte, there is nothing that is
stopping the VA, from complying with PIIA?
Mr. Arronte. No.
Mr. McGarvey. Okay. Voluntarily complying, I should say.
Mr. Arronte. No. That is the--that is what our work is. I
have mixed emotions about the effectiveness of PIIA. The good
thing about PIIA is it is our oversight of the Department and
its compliance. We test to make sure that the Department is
following the rules. It is a strictly compliance audit. It does
not get very deep, but they are following the rules.
Mr. McGarvey. The Chairman said something that I echo and
find interesting when talking with Ms. Gilson about tell us
what you need, right? Tell us what you need so we can help fix
this problem. We heard some suggestions from her, potentially.
Just from a different point of view, Mr. Arronte, do you have
any suggestions for what Congress can do to help make the
situation better?
Mr. Arronte. In regards to PIIA, other than the
recommendations that we make, I have no other guidance or
suggestions. Like I said, our review is strictly compliance. It
does not dig in deep, does not look for what we would typically
do in a normal audit. We do not look for-for the root cause. We
just look at compliance as mandated by OMB.
Mr. McGarvey. Ms. Tann, in a June 2024 report, the OIG
found that VBA had not identified Vietnam veterans who were
eligible for benefits and that resulted in an underpayment of
$836.8 million. Another 2024 review looking at survivors showed
33.1 million in underpayments. Both of those reports have open
actions, including a full review of claims, better outreach
letters, and monetary compensation. Do you know where those
reviews stand at this time?
Ms. Tann. Sir, for the one that you mentioned regarding
survivor's payments, I will ask Mr. Friel to respond to that
one. Can you repeat the first one that you mentioned? I am
sorry, I did not----
Mr. McGarvey. Sure. We were talking about the 2024 OIG
report that Vietnam veterans who are eligible for benefits had
not received them in payments of 836.8 million and another
looking at survivors in 2024 showed 33.1 million underpayments.
Both of those reports have open actions, including a full
review of claims, better outreach letters, and monetary
compensation. We are just seeing where those reviews stand
right now and getting the veterans what they have earned.
Ms. Tann. Certainly I will take back, if I can, that
question about the Vietnam veterans report to see where those
action items are. I will ask Mr. Friel if he has an update on
the survivors.
Mr. Friel. Sir, thank you for that question. As it relates
to the survivors piece, we have adjusted our processes. One of
the things that the IG called out was in the PACT Act required
that survivors specifically asked for us to look back, right,
to see if there was an earlier effective date. That was our
initial training with--in concurrence with or coordination with
the IG and OGC. We have amended our processes now to say that a
reopened DIC is, in fact, a claim for us to look back. That
will help close that gap.
We are continuing to work. We have--I think we have under
20 claims left to make the proper adjudication and adjust the
rates to ensure the survivors get the right amount.
Mr. McGarvey. Thank you, Mr. Friel. Mr. Chairman, I yield
back.
Mr. Luttrell. Thank you. Mr. Self, you are recognized for 5
minutes.
Mr. Self. Thank you, Mr. Chairman. We have heard a lot of
Washington speak here today. Does anybody know what those
ribbons up on the flags are?
Mr. Arronte. Campaign ribbons.
Mr. Self. They are battle streamers. Veterans that we are
talking about, those represent the campaigns that our veterans
fought in, were wounded in, died in. That is the veterans we
are talking about here. I have heard a lot of Washington talk.
Ms. Tann, in your testimony, written testimony, it talks
about how critical it is that veterans and beneficiaries self-
report changes. Now, I agree with that. What I have heard here
is we have not fixed the problems so that our veterans have the
education and the training to know when they are supposed to do
things. You heard the chairman say that in his district some
people do not have computers. We have heard this time and time
and time again from my time on this committee. We have-our
veterans do not know and we have made it so complex, Mr.
Arronte's testimony, we have made it so complex for our
veterans. Those battle streamers up there represent the
veterans that we are talking about here in Washington speak.
Ms. Tann, how many OIG, and two separate answers here, how
many OIG recommendations do you have outstanding? How many
Government Accountability Office (GAO) recommendations does the
Department have outstanding? OIG and GAO. These are
recommendations of people that are telling the Department
things to improve your processes. How many do you have open?
Ms. Tann. Sir, I do not have the total number of all of
those pending.
Mr. Self. I would like to know because we have got to do
better. I mean, inputs are not outputs. I want to start hearing
outputs about how we fix the problems.
With that, Mr. Chairman, I yield back.
Mr. Luttrell. Mrs. Radewagen is recognized for 5 minutes.
Ms. Radewagen. Thank you, Mr. Chairman. Ms. Tann, during
the last administration, VA informed us of plans to rely on the
authority in Cleland-Dole to cancel overpayments of VA benefits
resulting from administrative delay. When will VA begin using
this authority?
Ms. Tann. Thank you for the question, ma'am. We are still
in the process of implementing Cleland-Dole Section 252. We
have implemented one of the sections, but we are still working
on implementing the one that will require us to create
permanent timeliness standards around which to prohibit the
overpayment or debt applied to individuals because of delays in
VA processing.
Ms. Radewagen. Ms. Tann, yes or no, was the April 2025 PACT
Act effective date refresher training, was it mandatory?
Ms. Tann. Yes, it was.
Ms. Radewagen. Yes or no, have all compensation service
employees completed that April 2025 effective date training?
Ms. Tann. I would have to get back to you on that.
Ms. Radewagen. Please do. Thank you.
Mr. Friel, yes or no, has every employee who decides
survivors DIC claims also completed that April 2025 training?
Mr. Friel. Yes, they have.
Ms. Radewagen. Ms. Tann, what exact processes for assigning
correct effective dates is VA planning to automate and when
will that automation technology be implemented?
Ms. Tann. I am not aware of plans to automate effective
dates just because of the complexity around it. I will speak to
the work that we have done to update and enhance our system so
that the tools that are available to claims processors address
some of those problem areas and pain points that Mr. Arronte
mentioned, such as intent to file, liberalizing law, and toxic
exposure activities.
Ms. Radewagen. Mr. Friel, does VA have the authorities,
including all the computer matching agreements, that VA
requires to ensure accurate payment of veterans pension and
survivors pension?
Mr. Friel. Yes, we do.
Ms. Radewagen. Now, Mr. Arronte, what mistakes did the
Biden administration VA make when initially rolling out
training and guidance for PACT Act claims' effective dates?
Mr. Arronte. Ma' am, based on our work and as I indicated
in my opening remarks, the training was pushed out very
quickly. They had 4 months to identify the type of training
that needed to be done. They trained in December. It was very
quick. What our recent report shows is they missed an
opportunity. They did not evaluate the effectiveness of that
training. I can tell you my reports are showing that the
training could not have been that effective because we are
seeing high error rates with effective dates.
Ms. Radewagen. Sir, has VA done enough to fix those
mistakes so that compensation overpayments will be
significantly reduced in the future?
Mr. Arronte. Ma'am, if you are looking for a yes or no, I
am going to say no, just because of my body of work. However,
as the VBA panel members have indicated, I think they are
heading in the right direction. They are correcting these
effective date tool builders. They are consolidating their
policies, procedures, and the guidance so staff do not have to
look through, 8 pages or 10 pages of FAQs on this site and 20
pages of FAQs on this site. I think they are working toward the
right direction.
Ms. Radewagen. Mr. Arronte, do you believe that VA's
quality assurance controls are adequate to ensure that VA
claims processors assign correct effective dates for award of
benefits?
Mr. Arronte. No, ma'am. The reason I say that, again, I am
basing it on our work. We see high error rates all the time. We
looked at their QA program in 2021, we looked at five aspects
of it, and issued reports on them. Since then, I think one
thing that we would like to see with their QA is when they draw
samples to determine accuracy and error rates, they sample
across the board, the entire spectrum of claims. It could be a
musculo-skeletal claim, it could be a claim to--a presumptive
claim, it could be a whatever. Right? They know what their high
priority areas are. They know effective dates is one. There is
several others.
I would like to see them, aside from a special focused
review, because that is a one-time look, I would like to see
them conduct a specific sample of those high-risk areas. Now,
that might not bode well for their accuracy rate, but it will
help them hone in on what the high-risk problems are.
Ms. Radewagen. Thank you, Mr. Chairman. Yield back.
Mr. Luttrell. Ms. Radewagen, do you have any more
questions? We moved through the second panel. Do you have
another question or are you good?
Ms. Radewagen. Not at this point, Mr. Chairman.
Mr. Luttrell. Thank you. I yield to the Ranking Member for
closing remarks.
Mr. McGarvey. Thank you, Mr. Chairman. Appreciate the
testimony here today. Obviously, we appreciate you all being
here. I know that each and every one of us wants to improve
these programs. We want to make sure that we get it right for
the veterans and we get it right for the taxpayers. We have got
to do it in a holistic way. We have got to make sure that there
are the fewest possible errors and that the personnel are well
trained. We also want to see this done with care and
compassion.
I want us to find solutions. I want us to create efficient
processes and to listen to the workers and union workers when
they tell us how we can help them in their work. I want the
call center workers at the Debt Management Center to have the
ability to step back and breathe when a veteran calls in crisis
because they do not see a way out of debt they did not even
know they had. I want the veteran in crisis to have access to
immediate mental healthcare at that moment. I want to see a VA
that provides kindness and clarity in a payment program to help
a veteran get out of the red.
I do not want to hack away at the base. I do not want to
needlessly attack people who are serving these folks while we
make it harder to conduct research or provide life-saving care,
and keep families together in burial plots.
We want to make sure that the VA is working, that it is
working for the people for whom it is intended to serve, the
veterans. That they do so in a responsible way that has the
fewest possible errors. I truly mean that. All errors, whether
it is identifying the proper payments, the proper training,
whether it is an improper use of funds. At the end of the day,
if we do not get this right, who are we hurting? We are hurting
our veterans. We are hurting the people who work at the VA,
many of whom have served our country prior to their serving our
country at the VA. We hurt the families, the caregivers, and
the survivors of the brave men and women who put on a uniform
to serve us.
Mr. Chairman, I look forward to working with you together
on this issue, to finding genuine solutions to these problems.
I yield back.
Mr. Luttrell. Thank you, sir. Thank you all for coming to
the hearing today.
The Ranking Member and I are in agreeance. It would be
ideal if we could walk this problem all the way down to zero,
dollar sign-wise. The system itself is so large, there is going
to be a margin of error in there somewhere. Our heartache is
the fact that it is trending in the wrong direction.
To his point, we are serving the veterans. The veterans are
always on the receiving end of everything that we do in this
committee and everything that you wake up every morning, look
yourself in the mirror, walk into the office, and say, why am I
here? It is for our veterans.
Taking what Mr. Arronte said, implementing those effects
inside the VA will move us in the proper direction. Ms. Tann,
you said you are implementing certain things the OIG has pushed
out. Amazing. Ms. Gilson, when you reported the numbers, it
is--I just do not like the fact that we are not--again, we are
going in the wrong direction and there has to be a fix. I would
like to meet with you in the antechamber. I have a couple
questions I would like to ask you after the hearing.
Making overpayments at this number, I think one of the
worst things you can do--I mean, I am being dead 100 percent
serious. The worst thing you can do is overpay a veteran and
tell them you got to give it back. I mean, that is something
that the U.S. Government is exceptional at. I know I get hit by
the Internal Revenue Service (IRS) all the time. Hey, man, you
owe us 25 cents.
Our veterans live paycheck to paycheck. A lot of them are
in a deep, deep, dark, black hole, and if you asked--if you are
trying to take something from them that the U.S. Government
gave to them, that is our fault. Okay? We have to fix that
problem. Whether or not it is hardware, software, man tripping
a coin--man, train, and equip, we have to be on it.
I know again, every time you guys sit in front of us, you
are telling us that, hey, that is happening inside the VA. I
got it. Again, once again, we are a large organization and at
scale, one of the largest. Okay. I will always say, remember,
it is about our veterans 100 percent. We have to take care of
those that took care of us. Okay?
Thank you. Thank you for coming and testifying before us
today on the important goal of reducing waste resulting from
improper payments and compensations and pensions. I look
forward to working with the administration and my colleagues
that causes improper payments to ease the burden on our
veterans and their families.
I ask unanimous consent that all members have 5 legislative
days to revise and extend their remarks and include extraneous
material. Without objection, so ordered.
This hearing is adjourned.
[Whereupon, at 11:17 a.m., the subcommittee was adjourned.]
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A P P E N D I X
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Prepared Statements of Witnesses
----------
Prepared Statement of Nina Tann
Good morning, Chairman Luttrell, Ranking Member McGarvey, and
Members of the Subcommittee. Thank you for the opportunity to appear
before you today to discuss VA's improper payment oversight. Joining me
today from VBA are Kevin Friel, Executive Director, Pension and
Fiduciary Service, and Jeannie Gilson, Acting Chief Financial Officer.
VA recognizes the importance of providing Congress, Veterans, and
beneficiaries with transparency related to improper payments. Improper
payments include incorrect payment amounts (too much or too little),
payments to the wrong person, or disbursed payments without required
documentation. VA pays the amount of benefit based on the evidence of
record at the time of the disbursement, until VA receives notice of a
change. For example, if a Veteran loses a dependent and does not report
this change to VA, he or she may be paid too much, or in some cases,
too little. To combat improper payments, VA supplements beneficiaries'
self-reported changes with additional controls. VA has taken many steps
to prevent, detect, and correct improper payments and mitigate fraud,
waste, and abuse.
VA safeguards beneficiaries' financial well-being and effectively
oversees the use of appropriated funds by using a range of strategies
to proactively address and mitigate potential improper payment issues.
In Fiscal Year (FY) 2024, VA reported a reduction of about $1 billion
in improper and unknown payments. The breakdown of the improper and
unknown payments are as follows: $149.57 million for beneficiary
travel; $13.27 million for Rent Communications, and Utilities; $28.25
million for Medical Care contracts and agreements; $280.67 million for
supplies and materials; $518.58 million for pension; $760.1 million for
long-term services and support; and $416.63 million for VA Community
Care, which reflects a reduction of 31.55 percent from Fiscal Year 2023
results, despite increases in outlays of $4.43 billion, or 12.30
percent. Since Fiscal Year 2018, VA has reduced improper and unknown
payments by $12.57 billion, or 85.29 percent, and removed seven
programs from reporting requirements by prioritizing corrective actions
on the largest proportion of errors and noncompliance with laws and
regulations.
VA continues to strengthen its risk assessments, test plans, and
collection of error data to ensure accurate projections and inform
effective remediation strategies. While any amount of improper payment
is unacceptable, VA continues to make progress in identifying and
preventing these from occurring. VA acknowledges that improper payments
are problematic and remains committed to process improvements that will
ensure VA is providing accurate and timely benefits to Veterans and
their dependents with effective oversight.
As an example of recent VA efforts to reduce improper payments, on
December 2, 2024, VA modified its procedural guidance to liberally
interpret re-evaluation provisions for Dependency and Indemnity
Compensation (DIC) claims. The changes streamlined the decision-making
process to mitigate the likelihood of underpayments and ensure VA
renders the correct decision the first time. Additionally, these
changes reduced requests for unnecessary information and simplified the
claim review process.
In some cases, VA cannot adjust a Veteran's benefits in time to
prevent an overpayment. Administrative or operational constraints
within VA may cause processing delays. Congress and VA recognized the
burden this placed on Veterans and beneficiaries, based on
circumstances outside of their control. As a result, on December 29,
2022, Congress enacted the Joseph Maxwell Cleland and Robert Joseph
Dole Memorial Veterans Benefits and Healthcare Improvement Act of 2022,
also known as the ``VA Beneficiary Debt Collection Improvement Act of
2022'' or simply the ``Cleland-Dole Act'' (P.L. 117-328; 136 Stat.
4459).
Section 252 of this law amended 38 U.S.C. Ch. 53 by adding a new
section 5302B, which establishes prohibitions on the creation of debts
due to delays in VA processing. Unless a delay is directly attributable
to a beneficiary's actions outside of his or her basic due process
rights, the law requires that VA must issue an overpayment decision and
associated notice within 1 year of receiving information that results
in potential debt. Delays caused by a beneficiary's actions will extend
the timeliness period for VA to issue a decision by the number of days
equivalent to the length of the delay. When VA fails to issue a timely
decision, the beneficiary is not responsible for repaying VA for the
overpayment. Each issue that generates a potential overpayment is
considered separately for purposes of applying these timeliness
standards. It is important to note, however, that this guidance does
not apply where there is evidence of fraud, misrepresentation, or bad
faith on the part of a beneficiary, or to instances in which a
beneficiary did not provide current and accurate information affecting
his or her benefits in a timely manner.
In another example of VA's efforts to reduce improper payments, in
Fiscal Year 2024, VA identified an administrative error which resulted
in duplicate dependency payments for Chapter 35 Dependency Education
Assistance benefits. As of February 18, 2025, VA estimated the monthly
average of overpayments in Fiscal Year 2025 for the Chapter 35 error at
approximately $5.8 million. The total of overpayments from Fiscal Year
2017 through 2025 is estimated at $211.3 million. VA's former Under
Secretary for Benefits, under the previous administration, determined
that the duplicate payments were an administrative error; therefore,
impacted Veterans would not have debts established. VA worked to
correct the point in the process leading to the administrative error
and implemented a fix in January 2025. On January 10, 2025, VA issued
due process letters to approximately 15,000 Veterans who receive
disability compensation or pension benefits for a child while the child
is concurrently being paid benefits pursuant to Chapter 35. The due
process letters did not propose the creation of an overpayment. On
March 17, 2025, following the due process period, VA notified Veterans
that the child was being removed from their disability payment. No
overpayments were created. VBA's Compensation Service and Education
Service continue to partner to develop a solution to eliminate future
overpayments for Chapter 35 dual entitlement.
Inter-Agency Data Sharing
To assist with preventing improper payments, VA regularly receives
information from various Federal agencies through data matching
agreements. VA partners with other Federal agencies to compare
information between VA and each partner agency's records to identify
discrepancies or confirm information through the computer matching
agreement process governed by the Privacy Act (5 U.S.C. Sec. 552a).
These agreements are used to establish or verify eligibility for
Federal benefits, verify compliance with Federal benefit programs, and
recoup payments or delinquent funds as well as investigate potential
fraud, waste, or abuse. These data matching agreements include those
that concern benefits related to military duty status, benefit changes
due to death, and issues related to income. Additionally, VA has made
several improvements related to data matching agreements for VA's
income-based pension benefits, including using Federal tax information
to verify an applicant's income upfront and income matching with the
Social Security Administration (SSA) to verify continued eligibility
for income-based benefits.
Certain statutory requirements prohibit duplication of benefits
during the same period, such as receiving both a disability
compensation payment and regular active duty pay. VA conducts routine,
monthly data matches with the Department of Defense (DoD) to identify
Veterans who return to active duty. When the match occurs after a
Veteran returns to active duty, this results in a duplicate payment
from DoD and VA.
Additionally, VA conducts an annual data match with DoD to identify
Reservists and members of the National Guard receiving active duty for
training pay, often referred to as drill pay. Both scenarios may
identify an improper overpayment.
Effective Dates: Importance and Improvements
VA acknowledges the crucial importance of claims processors
understanding and assigning the proper effective dates as required by
law in issuing accurate payments. Training is at the core of the issue,
and VA has taken steps to enhance training on effective dates. Once
hired, claims processors receive training on effective dates as part of
their foundational core curriculum. Following their initial training,
claims processors undergo annual assessments to evaluate their
application of the rules and guidance on effective dates, as part of
the Competency Based Training Systems assessment. If any knowledge gaps
or inefficiencies are identified, claims processors receive targeted
refresher training to address those specific areas.
VBA is also enhancing its collaboration with the Board of Veterans'
Appeals and the Office of General Counsel to improve the quality,
comprehensiveness, and legal accuracy of its training programs, with a
focus on improving claims development and decision-making through
thorough data analysis, root cause identification, and targeted
training for VA personnel. This approach aims to drive impactful
change, ultimately benefiting Veterans by ensuring the accuracy of the
benefits and payments they receive.
The Sergeant First Class Heath Robinson Honoring our Promise to
Address Comprehensive Toxics (PACT) Act, signed into law on August 10,
2022, marked the largest and most significant expansion of Veterans'
care and benefits in decades. While the original legislation was
written with a phased-in approach for the effective dates of various
exposure-related conditions, VA proactively determined that all
conditions would instead be effective upon date of enactment, to not
only benefit the Veteran, but to make implementation of the law less
complex for claims processors. Additionally, VA took immediate action
to ensure claims processors received guidance on processing PACT Act
claims and, in December 2022, VBA provided the training needed to begin
processing these claims as quickly as possible. This ensured all front-
line claims processors who handle claims for disability compensation
benefits based on toxic exposure were ready to process claims on
January 1, 2023, and could accurately apply the provisions of the law.
On April 1, 2025, VA also released PACT Act refresher training to
claims processors, which specifically addressed effective dates. The
content was created using data collected from the PACT Act Special
Focused Review for Quarter 1 of Fiscal Year 2025. The leading error
category was failure to apply or misapplication of effective dates
under 38 C.F.R. Sec. 3.114, which governs effective dates of awards
based on a liberalizing law or liberalizing VA issue. In these training
updates, VA addressed effective date provisions that involve the
general effective date rules, liberalizing laws, and presumptive
conditions. VA also addressed the impact of intent to file and the date
of receipt rule with such claims.
VA also relies on our Office of Inspector General (OIG) and
Government Accountability Office (GAO) partners to independently review
our processes and procedures to identify issues. VA works
collaboratively with OIG and GAO to address any issues discovered. For
example, on April 15, 2025, OIG published its report titled ``The PACT
Act Has Complicated Determining When Veterans' Benefits Payments Should
Take Effect'' (Report Number: 24-01153-52). In their report, OIG
estimated that about 31,400 of the 131,000 PACT Act-related claims (24
percent) VA completed between August 10, 2022, and August 9, 2023, had
errors in the assigned effective date. OIG determined an estimated
26,100 of those claims resulted in at least $6.8 million in improper
payments. Subsequently, OIG recommended that VA implement system
enhancements to add functionality that applies liberalizing laws on
claims when VA receives an intent to file or when service connection is
based on a toxic exposure risk activity. These system enhancements are
currently scheduled for implementation by the end of the 3d quarter of
Fiscal Year 2025. Additionally, OIG recommended that VA create a job
aid for claims processors on how to determine the correct effective
date for PACT Act-related claims. The job aid is scheduled for
implementation in July 2025.
In addition to specific audit reviews, OIG annually reviews VA's
improper payments as required by the Payment Integrity Information Act
(PIIA) of 2019 (P.L. 116-117; 134 Stat. 113). PIIA specifically
requires agencies to review programs that may be susceptible to
significant improper payments exceeding either 1.5 percent of program
outlays and $10 million, or $100 million in total. Since 2004, VA has
made proactive efforts to identify and report improper payments by
continuously examining the following programs: compensation, DIC,
pension, and monetary burial benefits. VBA's pension program saw an
increase in improper payments above the compliance threshold for Fiscal
Year 2023 and Fiscal Year 2024 (10.86 percent [$419.27 million] and
13.85 percent [$518.58 million], respectively). This increase primarily
resulted from the pause in the SSA income data match, which was
reinstated in Fiscal Year 2022. When the program resumed in June 2022,
VA implemented a quarterly data match for additional oversight versus
the prior annual match to mitigate errors under its corrective action.
This frequency change will help to reduce improper payments resulting
from unreported SSA income.
OIG has recognized the corrective actions VBA put in place to help
reduce improper pension payments, including increased oversight via
site visits, special focused reviews, and targeted training based on
analysis of quality assurance data. As an additional prevention
measure, VBA's Pension and Fiduciary Service is investigating the
potential implementation of an automation solution to utilize the data
provided via the SSA income match to render timely award adjustments.
This would minimize debt associated with unreported SSA income and
prevent future improper payments.
The Role of the Veteran
It is critical that Veterans and beneficiaries self-report changes
in their eligibility or status, including changes in income, net worth,
medical expenses, marital status, dependency status, or death of a VA
beneficiary. Timely reporting of these changes in beneficiary status
significantly impacts VA's ability to deliver appropriate benefits and
prevent improper payments. Generally, in the absence of data sharing
agreements, VA relies on the information Veterans or beneficiaries
report and pays the most accurate amount possible based on the
information available at the time a claim is processed. Reporting
changes to VA is crucial for maintaining accurate records and ensuring
Veterans receive the most accurate benefits. Once VA receives a
notification of change, payments VA already issued are considered
improper even though VA had no knowledge of the information at the time
of payment. This may result in an overpayment that the beneficiary will
be responsible for repaying.
When VA makes a decision on a benefits claim, VA sends a
notification letter to the claimant. This letter includes detailed
information about the decision and the factors affecting the
compensation rate. It also explains how claimants can report any
changes to VA to avoid disruptions to their benefits or the risk of
overpayments. VA understands the negative impact overpayments can have
on Veterans and beneficiaries and makes every effort to inform them up
front and prevent overpayments. VA continues to expand access and
streamline communications with Veterans and beneficiaries to make the
exchange of information faster and less burdensome on our stakeholders.
VA is committed to working with Veterans and beneficiaries to
identify ways to assist them in keeping information updated and
reporting any changes to dependency, income, or other benefits-related
issues to avoid delays in payments, ensure eligibility for benefits,
and receive timely communications from VA. VA offers easily accessible
methods for Veterans to promptly report a change of status, such as
online at va.gov, calling our VA benefits hotline, or in person at a VA
benefits facility, in an effort to ensure Veterans and beneficiaries
receive the correct benefits they are entitled to, avoid improper or
discrepant payments, and maintain up-to-date information with VA.
Conclusion
VA strives to safeguard the financial well-being of Veterans and
beneficiaries and is committed to working with Congress to proactively
improve and mitigate potential improper payments. Chairman Luttrell,
Ranking Member McGarvey, this concludes my testimony. We thank the
Committee for your continued support of programs that serve the
Nation's Veterans and look forward to working together to further
enhance delivery of benefits and services. My colleagues and I are
prepared to respond to any questions you or other Members of the
Subcommittee may have.
Prepared Statement of Brent Arronte
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statements for the Record
----------
Prepared Statement of Paralyzed Veterans of America
Chairman Luttrell, Ranking Member McGarvey, and members of the
subcommittee, Paralyzed Veterans of America (PVA) would like to thank
you for the opportunity to submit our views on how the Department of
Veterans Affairs (VA) can improve the compensation benefits process to
limit the amount of debt veterans' may incur from the improper payment
of disability compensation or other benefits and reduce the additional
workload on the VA to address such payments.
Veterans with service-related medical conditions are entitled to
compensation benefits under law. The Veterans Benefits Administration
(VBA) administers these tax-free compensation benefits through their
Compensation Service which determines the appropriate percentage
rating, whether the veteran is entitled to dependency pay, and the date
the veteran was entitled to start receiving this compensation.
Generally, these benefits are designed to offset a veterans' loss of
earning capacity that is caused or exacerbated by these conditions.
Many veterans, especially those with catastrophic disabilities, like
spinal cord injuries and disorders, rely on these payments for a
substantial portion of their income.
However, VBA too often has difficulty assigning correct effective
dates for claims, both rating and non-rating.\1\ An improper effective
date could result in lost compensation or, more detrimentally, create a
debt that the veteran must repay. For many veterans, losing a portion
of their benefits toward repayment of a debt can lead them to dire
financial straits. PVA believes that the most common causes for
incorrect effective dates and unnecessary overpayments are easily
remedied.
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\1\ VA OIG, Accuracy of Claims Involving Service-Connected
Amyotrophic Lateral Sclerosis, Report No. 18-00031-05, November 20,
2018; VA OIG, Accuracy of Effective Dates for Reduced Evaluations Needs
Improvement, Report No. 17-05244-226, August 29, 2018; VA OIG,
Processing Inaccuracies Involving Veterans' Intent to File Submissions
for Benefits, Report No. 17-04919-210, August 21, 2018.
---------------------------------------------------------------------------
Removing Dependents
According to PVA's National Service Officers (NSO), removal of
dependents from a veteran's claim triggers the most problems with
effective dates and improper payments. When veterans experience
qualifying life events like divorce, marriage of a child, or death of a
dependent and seek to halt payments for that dependent, they must fill
out VA Form 21-686c, a rather lengthy and complicated form, and submit
it to the VA or go online via VA.gov to submit the form and the needed
documentation. Even when veterans submit their request in a timely
manner, many wait several months or even longer to have VA remove the
additional monetary amount for their dependent from the veteran's
monthly compensation. Because of VA's inaction, the veteran accrues a
debt totaling hundreds and sometimes thousands of dollars that the
department will eventually be forced to try and recoup. The veteran has
the option of asking for the debt to be waived, which is a process that
PVA's NSOs assist with regularly. To seek a waiver, a different form
must be completed and taxpayer dollars spent for VA employees to
consider the veteran's request.
Returning to Active Duty
When a veteran returns to active duty, either due to being recalled
as a reservist or a voluntary reenlistment, their benefits are
generally not affected. However, ``[p]ension, compensation, or
retirement pay on account of any person's own service shall not be paid
to such person for any period for which such person receives active
service pay.'' \2\ The veteran is obligated to inform the VA either via
phone or by filing a VA Form 21-4138, ``Statement In Support of
Claim,'' to inform the department of the veteran's intention to enter
active duty and the need to pause any benefit payments. The issue then
becomes how quickly the VA acts on the request. As with the removal of
dependents off a veteran's award, it often takes the VA months to stop
a veteran's compensation payments creating a debt totaling thousands of
dollars that the veteran must repay. This debt can create a crippling
financial situation for the veteran, especially if it occurs while the
service member is deployed and there is little or no help on how to
fight the decision. Any veteran who has chosen to return to duty to
serve our country deserves better.
---------------------------------------------------------------------------
\2\ 38 U.S.C.Sec. 5304(c).
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Automation
PVA believes that increased investment in automation could
significantly decrease the occurrence of needless overpayments, such as
those described above. Our NSOs have access to VBA systems that have
significantly reduced the waiting time for processes like filing claims
and adding dependents. Unfortunately, the process does not work the
same for what should be a relatively simple task like removing
dependents off a veteran's claim. Currently, it's so burdensome that
our service officers must warn clients of the almost certain impending
debt that will be created. The same is true with veterans who seek to
halt their disability compensation to return to active duty.
VA should be required to develop an easier way for veterans to
remove dependents or halt benefits through a system like VA.gov.
Investing in such a system would save the department considerable
funding in the long run by greatly reducing the number of waiver
requests needed due to overpayments. It should be noted, however, that
any new website or function must be accessible to all veterans,
including those whose conditions require disability accommodations.
Also, creating a specific form to halt VA payments for those who are
returning to active duty would help the department manage these
requests more quickly, and decrease the overall number of debts that
are incurred.
PVA would once again like to thank the subcommittee for the
opportunity to submit our views on VA's improper payments and the
impact they have on our Nation's veterans.
Information Required by Rule XI 2(g) of the House of Representatives
Pursuant to Rule XI 2(g) of the House of Representatives, the following
information is provided regarding Federal grants and contracts.
Fiscal Year 2025
Department of Veterans Affairs, Office of National Veterans Sports
Programs & Special Events----Grant to support rehabilitation sports
activities--$502,000.
Fiscal Year 2023
Department of Veterans Affairs, Office of National Veterans Sports
Programs & Special Events----Grant to support rehabilitation sports
activities--$479,000.
Fiscal Year 2022
Department of Veterans Affairs, Office of National Veterans Sports
Programs & Special Events----Grant to support rehabilitation sports
activities--$ 437,745.
Disclosure of Foreign Payments
Paralyzed Veterans of America is largely supported by donations from
the general public. However, in some very rare cases we receive direct
donations from foreign nationals. In addition, we receive funding from
corporations and foundations which in some cases are U.S. subsidiaries
of non-U.S. companies.
Prepared Statement of Veterans of Foreign Wars of the United States
Chairman Luttrell, Ranking Member McGarvey, and members of the
subcommittee, on behalf of the men and women of the Veterans of Foreign
Wars of the United States (VFW) and its Auxiliary, thank you for the
opportunity to provide testimony on this topic.
The Department of Veterans Affairs (VA) may improperly pay
beneficiaries for a variety of reasons. However, despite the cause,
improper payments adversely affect beneficiaries either by overpayment
and subsequent demands to immediately return the excess, or by
underpayment that creates financial hardship. We limit our statement to
four common causes of improper payments: incorrect effective dates,
delayed notification of a life event, untimely VA action, and
incarceration.
Incorrect Effective Dates
Assigning erroneous effective dates when a veteran's disability
compensation begins has been a major Veterans Benefits Administration
(VBA) deficiency in Office of the Inspector General (OIG) reports for
the past several years. Additionally, it was one of the top three
rating error categories since 2011, as noted in the April 15, 2025, VA
OIG report 24-01153-52, The PACT Act Has Complicated Determining When
Veterans' Benefits Should Take Effect.
Claims processors must assign the most advantageous effective date
for each grant, as an incorrect effective date can significantly
financially penalize the claimant. Title 38, Code of Federal
Regulations, Section 3.400 allows an effective date that is the date on
which VA received the claim or the date on which the entitlement arose,
whichever is later. Complicating this determination is the veteran's
right to submit an ``intent to file'' establishing the effective date
when VA receives the notice but allowing the veteran as long as 1 year
from that date to actually file the claim.
Of the more than 31,000 errors that comprise this OIG report's data
sample, the two most prevalent were the assignment of incorrect
effective dates and the potential applicability of more advantageous
effective dates. According to the report, claims processors likely
contributed to the latter error by failing to collect additional
evidence that could have led to a more advantageous effective date.
Enactment of the Honoring our PACT Act of 2022 (hereafter the
``PACT Act'') exacerbated the situation and magnified the problem.
Before passage of the PACT Act, incorrect effective dates comprised 18
percent of the errors the OIG catalogued. However, a combination of
complex rules, a sudden influx of claims attributed to PACT Act
enactment, and ineffective training for claims processors contributed
to the error rate rising to 25 percent post-PACT Act.
Additionally, the PACT Act is a liberalizing law since it
substantially changed benefits derived from certain toxic exposures
under specific conditions. A claimant may qualify for an effective date
of service connection as early as the enactment of the law, which in
this case is August 10, 2022. The OIG discovered that claims processors
did not pursue all avenues for the most advantageous effective date,
and the PACT Act's liberalizing law status could have contributed to
these errors.
Delayed Notification of a Life Event
Beneficiaries must notify VA of major life events that could affect
the amount of their disability compensation. For example, notification
must be given to VA of remarriage or the loss of a spouse through death
or divorce. Both situations would affect the amount of the veteran's
disability compensation, and could result in either an underpayment or
overpayment depending on the specific circumstances.
A survivor's remarriage, under certain conditions, could cause a
substantial overpayment that the beneficiary would have to return.
Remarriage before age 55 prompts a discontinuance of Dependency and
Indemnity Compensation (DIC). VA sends survivors a marital
recertification letter every 8 years. If the survivor is nonresponsive,
VA will send two more letters and then a ``due process'' letter to
which the survivor must respond within 60 days. If the survivor still
does not respond, VA will discontinue DIC and require the beneficiary
to repay any unauthorized benefits back to the last valid
recertification, sometimes as far back as 8 years prior, which could
cause a substantial overpayment that the beneficiary would have to
return. Consequently, the indebtedness of some survivors could reach
hundreds of thousands of dollars. Also, reporting a life change that
would result in removal of a dependent so close to the next scheduled
benefits payment that VA is unable to react in time could cause an
overpayment that the beneficiary would have to repay. Last, a VA error
such as issuing a double payment would also cause an overpayment.
Untimely VA Action
Untimely VA action can also result in an overpayment. Even if the
veteran conscientiously reports a change in status, if VA does not
process the request quickly enough the beneficiary will receive an
overpayment or underpayment appropriate to the situation. Our VFW
Service Officers have provided the following examples as illustrations.
In one case, the veteran petitioned VA to remove his dependent child
from an educational program when she withdrew from school. VA took 217
days from the time it received the request to remove her from the
program, resulting in a $1653.00 debt to the veteran. In a second case,
a veteran submitted a verification of dependents at the end of August
2024 to remove a spouse due to a divorce earlier that same month. VA
processed the action 4 months later in April 2025, causing a $1031
debt. In each of these cases, overpayment would have been prevented if
VA had processed the change request in a timely manner.
Incarceration
VA will reduce disability compensation for felonious beneficiaries
incarcerated for more than 60 days and will discontinue pensions for
veterans convicted of either a felony or misdemeanor. Upon release, the
veteran's compensation and pension payments may resume. However, VA
does not reduce payments for beneficiaries participating in work
release programs, residing in halfway houses, or under community
control. Similar to failing to inform VA of life events, failing to
notify VA of incarceration could result in an improper payment.
According to the June 28, 2016, VA OIG report 13-02255-276, Veterans
Benefits Administration Audit of Compensation and Pension Benefit
Payments to Incarcerated Veterans, VBA did not consistently adjust
benefits for several years for veterans incarcerated in Federal
institutions. Causative factors included insecure electronic data
sharing methods, including a lapsed computer matching agreement with
the Federal Bureau of Prisons intended to identify potential
incarceration adjustments, and a lower prioritization of these
adjustments compared with eliminating the disability claims backlog. As
a result, between May 2008 and June 2015, VA did not adjust
incarcerated veterans' compensation and pension benefits in an
estimated 53 percent of cases, resulting in improper payments totaling
approximately $59.9 million. OIG recommendations to remedy the
situation included issuing bills of collection to recover improper
payments, increasing the priority placed on making timely compensation
and pension benefits adjustments, and monitoring data sharing
agreements with the Federal Bureau of Prisons and extending them when
needed. VA will have to continually monitor the incarcerated veteran
population to prevent a recurrence.
Chairman Luttrell and Ranking Member McGarvey, this concludes my
statement. Again, thank you for the opportunity to offer comments on
this issue.
Information Required by Rule XI2(g)(4) of the House of Representatives
Pursuant to Rule XI2(g)(4) of the House of Representatives, the VFW has
not received any Federal grants in Fiscal Year 2025, nor has it
received any Federal grants in the two previous Fiscal Years.
The VFW has not received payments or contracts from any foreign
governments in the current year or preceding two calendar years.
[all]