Inadequate Oversight of Contracted Disability Exam Cancellations

Acting on a hotline complaint, the VA Office of Inspector General (OIG) reviewed whether a VA-contracted disability medical exam provider—Medical Support Los Angeles—had the capacity to complete scheduled exams, and whether Veterans Benefits Administration (VBA) staff were canceling and rescheduling them through other contractors. The OIG expanded the review to determine the adequacy of nationwide oversight of contracted disability exam cancellations. VA is authorized to contract disability exams from non-VA medical sources to increase its capacity and improve timeliness. The OIG examined the number of contracted disability exams requested and the number of exam cancellations from November 1, 2017, through April 30, 2018. During that period, claims processors requested more than 1.3 million disability benefits exams from contractors. In addition, more than 137,000 exams were canceled, an increase of about 74 percent over the previous six-months. These exams affected about 59,000 veterans. The OIG found that Medical Support Los Angeles failed to establish an adequate network of exam providers and, in December 2017, VBA began canceling exams scheduled with the contractor. More than 8,700 exams were rescheduled through other contractors by March 2018. Medical Support Los Angeles was also required to have nearly $4.8 million withheld from outstanding invoices to recoup costs associated with VBA obtaining alternate contractors to schedule and complete the exams. The OIG determined in its examination of contractors nationwide that additional oversight was needed to address information systems limitations, staffing shortages, and some VBA contracting officer’s representatives’ lack of required qualifications. The OIG recommended the Under Secretary of Benefits improve exam management systems to make cancellation information more accessible, provide sufficient Medical Disability Examination Program staff for oversight, and take steps to ensure contracting officer’s representatives with oversight responsibilities achieve the VA-required certification level.