Contract Medical Exam Program Limitations Put Veterans at Risk for Inaccurate Claims Decisions

Given the importance of medical exams to disability claims and the high cost of VA’s contracts with exam vendors, the VA Office of Inspector General (OIG) set out to determine whether the Veterans Benefits Administration (VBA) oversaw contract medical disability exams to ensure they met quality standards and contractual requirements, established procedures for correcting errors, and gave feedback to vendors to improve exam quality. VBA’s governance of and accountability for the exam program needs to improve. The identified deficiencies appear to have persisted, at least in part, because of limitations with VBA’s management and oversight of the program at the time of the review. The OIG found VBA’s program was deficient because it hindered the ability to hold vendors accountable for correcting errors and improving exam accuracy. VBA should improve the program to help ensure vendors produce accurate exams to support correct decisions for veterans’ claims. Contract exams are a significant investment, and VA has spent nearly $6.8 billion since fiscal year 2017. Some of the exams produced by vendors have not met contractual accuracy requirements. As a result, claims processors may have used inaccurate or insufficient medical evidence to decide veterans’ claims. Therefore, it is vital for VBA to improve the governance and accountability of the program. The OIG made four recommendations to the acting under secretary for benefits, including ensuring vendors can be held contractually accountable for unsatisfactory performance and establishing procedures for vendors to correct errors. The OIG also recommended requiring the Medical Disability Examination Office to communicate vendor exam errors to the Office of Field Operations and the regional offices and demonstrate progress in correcting them, and analyze all available data to identify systemic errors and provide systemic exam issues and error trends to vendors.