A sampling of disability claims filed under the 2022 PACT Act found that roughly one-quarter listed incorrect start dates, resulting in improper payouts of about $6.8 million to some veterans and shortchanging an estimated 2,300 others, the Department of Veterans Affairs' internal watchdog found.
In a report released Tuesday, the Veterans Affairs Officer of Inspector General concluded that the legislation's complexity, along with inadequate guidance from the Veterans Benefits Administration, led claims adjudicators to assign the wrong "effective date" to an estimated 26,000 claims, resulting in overpayment by the government in the first year of the legislation.
An estimated 2,300 additional claims had erroneous dates -- including some that should have been made retroactive to a date before the law was signed, increasing compensation for veterans -- but the watchdog agency said it "could not determine their monetary impact" on any affected veterans.
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The landmark PACT Act, signed into law Aug. 10, 2022, expanded health care and benefits to millions of veterans exposed to environmental pollutants while serving overseas in specified combat zones across decades, including the Middle East and Afghanistan.
According to the VA, it has received 2.44 million PACT Act-related claims since the law went into effect. It has adjudicated 2.14 million claims and approved 1.59 million and, as of May 2024, had awarded $5.7 billion in related benefits to veterans or survivors. The VA OIG estimated that the VA will have made an estimated $20.4 million in improper payments in the first three years of the law, representing about 0.36% of payouts.
Veterans who develop an illness related to the hazardous exposures or their survivors are able to file a claim at any time. However, in the first year following passage, beneficiaries could submit a claim or intent to file to receive any approved benefits backdated to Aug. 10, 2022.
Some veterans who had diagnosed conditions covered by the PACT Act prior to its passage were eligible for retroactive benefits back to their date of diagnosis. After Aug. 10, 2023, any approvals under the act would have the date of application as a start date for benefits or, in the case of intentions filed before that date, to Aug. 10, 2022.
The complexity of determining the correct start date led the VA OIG to review claims for accuracy.
To figure out whether the VA was assigning effective dates correctly, the watchdog examined a statistical sampling of 100 claims filed in the law's first year. Based on that analysis, the OIG estimated that the VBA assigned an incorrect effective date to roughly 26,100 of 131,000 claims, and it found it likely that an additional 2,300 should have been assigned a date that may have awarded veterans and their families more money.
"Errors that had the potential to affect veterans' compensation benefits payments occurred when claims processors decided claims before taking all the necessary steps, such as gathering additional evidence, to determine whether a more advantageous effective date applied," wrote Larry Reinkemeyer, the VA's assistant inspector general for audits and evaluations, in the report. "As a result, some veterans did not receive their correct benefit payments."
The OIG found that mistakes were made because claims processors were not adequately prepared to determine correct effective dates. The team added that the automated tools created to provide assistance in determining a date "were unreliable."
The team also noted that claims processors had made the VBA aware of the complexities, and the administration had taken steps to include updated training and conduct reviews to ensure accuracy.
Nonetheless, Reinkemeyer and the investigators made several recommendations for the VBA to implement, including for the VA to: create an effective tool to help processors determine the right date and remove ineffective date builders from the system; continue updating the system to ensure it follows claims-related laws; evaluate PACT Act training; and correct all processing errors found by the OIG team.
Michael Frueh, the VA's acting under secretary for benefits, concurred with the recommendations in a written statement and said fixes had already been made that weren't covered by the report.
Frueh said that the VA would implement all recommendations by May 31 at the latest, and for the 24 claims of the statistical sampling that were erroneous, would complete the review and corrections by April 30.
Since the start of the second Trump administration, lawmakers have expressed concerns about the scope of the PACT Act and the impact a proposed reduction in force at the VA would have on VA health benefits and claims processing.
Some Republican lawmakers say that increased scrutiny by a GOP-led White House and Congress could help hone the legislation, which they have described as being rushed through the legislative process.
"A lot of things have gone wrong because we didn't have the ability to finish that bill," said Sen. Tommy Tuberville, R-Ala., one of 11 senators who voted against the PACT Act. "Hopefully, we'll look into that ... and see how we can help because the PACT Act could be good if done the right way."
Sen. Maggie Hassan, D-N.H., noted in a Senate Veterans Affairs Committee hearing March 11 that veterans will feel the impact on services if roughly 80,000 VA employees lose their jobs.
"Not only does this contradict the clear intent of Congress, it really does a disservice to our veterans. When you fire VA employees, veterans suffer," Hassan said.
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