Despite backlogs, VA disability claims processors get bonuses


Sean Meade was an Army National Guard soldier who was deployed to Iraq during 2006 and 2007. He filed a disability claim in 2008 for back problems and post-traumatic stress disorder. After his PTSD claim was denied, he appealed in 2009 and is still waiting for a response. (Mary Shinn/News21)
August 25, 2013

While veterans waited longer than ever in recent years for their wartime disability compensation, the Department of Veterans Affairs gave its workers millions of dollars in bonuses for “excellent” performances that effectively encouraged them to avoid claims that needed extra work to document veterans’ injuries, a News21 investigation has found.

In 2011, a year in which the claims backlog ballooned by 155 percent, more than two-thirds of claims processors shared $5.5 million in bonuses, according to salary data from the Office of Personnel Management.

The more complex claims were often set aside by workers so they could keep their jobs, meet performance standards or, in some cases, collect extra pay, said VA claims processors and union representatives. Those claims now make up much of the VA’s widely scrutinized disability claims backlog, defined by the agency as claims pending more than 125 days.

“At the beginning of the month . . . I’d try to work my really easy stuff so I could get my numbers up,” said Renee Cotter, a union steward for the Reno, Nev., local of the American Federation of Government Employees (AFGE).

Now, claims workers said, they fear the VA’s aggressive new push to finish all one-year-old claims by Oct. 1 — and eliminate the entire backlog by 2015 — could continue the emphasis on quantity over quality in claims processing that has often led to mistakes. VA workers have processed 1 million claims a year for three years in a row.

Bob Fearing waited 33 months for the Department of Veterans Affairs to decide what disability benefits he should receive. The backlog is blamed on incompatible computer systems, so can a congressman’s novel solution do what five years and $1 billion couldn’t? (The Fold/The Washington Post)

Beth McCoy, the assistant deputy undersecretary for field operations for the Veterans Benefits Administration (VBA), said bonuses for claims processors were justified because, even though the number of backlogged claims was rising, workers were processing more claims than ever.

“There are many, many employees who are exceeding their minimum standards, and they deserve to be recognized for that,” she said.

She also said the VBA is improving quality even as it processes more claims.

But documents show that a board of appeals found in 2012 that almost three out of four appealed claims were wrong or based on incomplete information.

Approximately 14,000 veterans had appeals pending for more than two years as of November.

The VA has promised to reduce wait times and improve accuracy by scanning the piles of paper claims into an electronic system for processing with new software, but the expensive transition has been beset with problems.

The workload for VA claims workers also has doubled in the past five years. This included new claims from a quarter-million Vietnam veterans in 2010, when the VA added B-cell leukemias, Parkinson’s disease and ischemic heart disease to the growing list of health conditions for which veterans can claim because of exposure to the toxic chemical Agent Orange in Vietnam. In addition, more than 830,000 Iraq and Afghanistan war veterans returning home had filed claims as of March, according to VBA data.

According to 2012 data, the VA employed more than 11,000 claims processors or assistants. Most handle disability claims, while some deal with claims such as those for education and other benefits.

Productivity targets

In an attempt to encourage more productivity, the VA changed claims processors’ performance criteria between 2010 and 2012. The changes discouraged them from spending time gathering additional documents that could support complicated claims, according to written performance requirements for claims processors.

McCoy, the VBA official, said she heard from employees in the field that they felt the performance standards were not fair. “Things are changing very quickly, and we’re struggling a little bit to keep up with the pace of change as we update our performance standards,” she said.

A processor must gather medical and military records for each disability and assign disability ratings based on the severity of injury, which then determines the monthly check from the government.

The VA paid $44.3 billion in disability benefits and $5.5 billion to survivors of veterans with a service-connected disability, according to its annual benefits report for fiscal 2012. A veteran who is rated 10 percent disabled receives a standard $129 per month.

Claims for multiple injuries require significant time to gather documentation. Other claims, including for post-traumatic stress disorder, military sexual trauma or traumatic brain injury, can require just as much effort because they can be more difficult to prove than physical injuries.

In April 2010, the VA stopped giving its employees performance credit for “supplemental development,” which included tasks such as calling and sending follow-up letters to veterans and follow-up requests for military documents and medical records.

The change was meant to encourage processors to finish claims. But a complex disability claim could take all day, while a claim for one or two injuries could be completed much faster, said David G. Bump, a national representative of the AFGE and former claims processor at the Milwaukee regional office.

“I think after a couple of years of seeing things piling up, they realized that that didn’t work,” said Bump, a member of the bargaining committee that has met three times with the VBA in 10 months to discuss changing the standards.

Claims workers can be fired or demoted for not meeting standards in Automated Standardized Performance Elements Nationwide, or ASPEN, the VA’s system of awarding a specific number of points daily for each task an employee performs.

Performance evaluations for all claims workers include the elements of “productivity,” “quality” and “customer service.” While “quality” is measured by a random sampling of an employee’s claims and “customer service” is measured by the number of complaints against the employee, “productivity” is judged by ASPEN points, the average work credits the employee must earn per day.

ASPEN points could translate into financial awards at the end of each year if a worker earns an “excellent” or “outstanding” performance.

But News21 found that regional office management gave bonuses to some employees even as their claims backlogs grew. During 2012, Office of Personnel Management records show some of the most troubled offices gave their employees the most extra pay.

The Baltimore office, which has the longest wait times in the country, gave bonuses averaging $1,100 each to 40 percent of its workforce. The Oakland, Calif., office, which shut its doors to retrain underperforming employees, awarded nine out of every 10 workers a total of about $33,000 — almost enough to pay the standard year’s benefit to a veteran who is 100 percent disabled.

In Sioux Falls, S.D., claims workers processed claims four times as fast as those in Oakland and Baltimore but less than one in 10 there received extra pay last year.

In 2008, Congress ordered the VA to review its work-credit system. A 75-page report produced by the Center for Naval Analysis in 2009 recommended the VA address perceptions that quantity receives more emphasis than quality, by changing the tasks that receive points to better reflect the actual work.

“This is one of the reasons why, as some managers noted, the inventory of old claims consists disproportionately of ‘difficult’ cases,” the report said.

A claims processor in Reno told News21 that this “breeds cheating” and that he has seen employees who aren’t making enough points go into “survival mode” and process only easy claims. Shifting performance points to reward backlog-related work would be more effective, said the worker, who, like others, requested anonymity for fear of reprisals.

“Your backlog is over here. But your points are in this direction. How stupid is that?” asked the worker.

Promise to veterans

Damon Wood’s disability claim for PTSD, ringing in the ear and a bad back and knee has been cycling for 21 months through a fortified federal office building in a corporate park on the outskirts of Reno.

He quit checking its status online because it hadn’t changed for more than 11 months. When he tried calling the Reno regional office for more help, he was diverted to one of VA’s eight national call centers.

“Your hands are tied by the people who actually have the claim in their hands,” Wood said. “So you can’t do anything more or anything less. It’s up to them.”

Fran Lynch, a former Seattle claims processor and exam consultant, said the VA built a “wall of separation” between the workers and the veteran.

“People form opinions about veterans based on paperwork, and they make decisions based on those opinions without ever really knowing the guys’ circumstance,” he said.

Allison Hickey, VA undersecretary of benefits, promised veterans in April that the more than 65,000 claims two years old or older would get a temporary or permanent decision by June 19, while those waiting more than a year would be considered by October.

For the third consecutive year, the VA mandated 20 hours per month of overtime for employees for part of this year to meet the deadlines, costing the agency approximately $44 million. In June, the VBA processed a record 110,000 claims, officials said.

Darin Selnick, a VA political appointee in the George W. Bush administration, called the quickly finished claims an old “sleight-of-hand trick.” Selnick said regional office directors and central office staffers misled VA leadership during the past decade with similar numbers games that disguised the problem and kicked the can down the road.

“They knew it was coming, and they knew it was going to get worse,” Selnick said. “I think the current leadership, Allison Hickey, they do the same thing to her.”

‘Nothing’s been fixed’

In addition to a mounting pile of claims filed by the veterans of Iraq and Afghanistan, claims processors struggle with understaffing, an incomplete software system and paper claims that must be shipped around the country in boxes and sorted in mailrooms and that are sometimes forgotten in file cabinets.

The VA has for years tried to alleviate the load on overwhelmed offices by shipping backlogged claims around the country to other offices. Hickey ordered this “brokering” of old claims as a way for some offices to meet her deadlines.

According to internal documents, the VA has shuffled more than 50,000 claims among regional offices since January, including 16,000 in June. But workers say the practice is unfair to local veterans filing claims when their local office has to shoulder the load for poorly managed offices.

Workers in Milwaukee received more than 5,000 old claims from Houston and Los Angeles beginning June 11. Sioux Falls received 2,600 claims from St. Louis, Houston and Portland, Ore. Meanwhile, Reno completed just more than 1,000 old claims after shipping off 4,500 claims in its inventory to offices in Louisville, Sioux Falls and elsewhere.

“We’re looking like we’re making progress . . . but in ways that aren’t sustainable,” said one claims processor, who declined to be named for fear of reprisals. “We’re not actually doing anything to fix problems that are actually causing the backlog. . . . At some point, that overtime’s got to end and you can’t continue to broker out work, and what happens at that point? Nothing’s been fixed, and the same problem persists.”

All of these problems come at a critical time for veterans seeking disability compensation.

Stephen Leon served two tours in Afghanistan and won the Army Commendation Medal for valor after a firefight with three suicide bombers outside a gate in Kabul in 2011. The blast from one of their bombs left him with wrist, neck, knee, back and ankle injuries, as well as traumatic brain injury and PTSD.

When he returned home July 2011, he couldn’t get his mind off Afghanistan, the battles and the friends he lost. “You’re used to a life of being at peace, with yourself and your family and . . . when you go over there, all that breaks up,” he said.

Facing financial difficulties and struggling with PTSD, he was forced to move in with his mother. “I couldn’t get a dime for claims, I couldn’t get in touch with anyone, and the ones I could get in touch with, they didn’t want to help me anyway,” he said.

He enlisted the help of an independent advocate, who fought for his claim and connected him with housing and better PTSD treatment. He was rated 70 percent disabled a year ago and now lives in his own apartment in Revere, Mass.

Without the help of an advocate and without the money, Leon said, he is convinced he would be homeless or dead.

Shinn was a Women & Philanthropy fellow for News21 this summer. Hannah Winston and Jessica Wilde contributed to this report.

Steven Rich is the database editor for investigations at The Washington Post. While at The Post, he’s worked on investigations involving tax liens, civil forfeiture, cartels and government oversight. He was also a member of the reporting team awarded the Pulitzer for NSA revelations. PGP Fingerprint: 69FA 5730 ADDD 5488 24FE 6EB2 B727 D930
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