Deferrals in the Veterans Benefits Management System

The VA Office of Inspector General (OIG) conducted this review to determine whether Veterans Benefits Administration (VBA) staff properly created deferrals for disability compensation claims in its web based electronic program and if they resolved these deferrals in a timely manner. VBA claims processors generated nearly 676,000 deferrals in Fiscal Year 2017 and nearly 832,000 in Fiscal Year 2018. VBA employees use the Veterans Benefits Management System (VBMS) to process veterans’ disability compensation claims. A deferral permits VBA employees to return a claim to an earlier phase in the claims process for correction or additional action. Within the three-month review period, an estimated 23,200 unwarranted deferrals occurred. Unwarranted deferrals can result in needless examination costs, delayed processing, unnecessary rework, and improper guidance to claims processors. The unwarranted deferrals occurred because the national oversight process did not specifically assess the accuracy of deferrals, local oversight did not assess all aspects of deferral accuracy, some VBA claims processing employees lacked feedback and accountability, deferral processing guidance was unclear, and the VBMS system had limitations. The team determined that VBA claims processors generally resolved sample VBMS deferrals in a timely manner. The OIG recommended the Under Secretary for Benefits improve local and national oversight, create internal documentation controls, update deferral guidance, and plan to update VBMS with more space for documentation. Although the Under Secretary agreed with the recommendations, the Under Secretary did not concur with OIG’s projection of estimated unwarranted deferrals associated with unnecessary medical examinations and their cost provided. The OIG will monitor VBA’s progress and follow up on implementation until all proposed actions are completed.