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“Counting the Money: Preventing Fraud and Abuse in VA’s Bonus Payment Practices for VA Employees”

House Veterans Affairs Committee, Oversight and Investigations Subcommittee Hearing

July 22, 2025 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• Ms. Tracey Therit: Chief Human Capital Officer, Office of Human Resources and Administration, Operations, Security, and Preparedness; Veterans Health Administration

• Mr. David Perry: Chief Officer, Workforce Management and Consulting; Veterans Health Administration; U.S. Department of Veterans Affairs

• Mr. Shawn Steele: Director of the Human Capital and Operations Division, Office of Audits and Evaluations; Office of Inspector General; U.S. Department of Veterans Affairs

• Dr. Sheila Elliott: President, Local 2328; American Federation of Government Employees

Keywords mentioned:

• Incentive payments, workforce reductions, recruitment and retention, staffing shortages, telework restrictions, relocation bonuses, VA oversight, mental health care, documentation failures, veteran-facing roles

IN THEIR WORDS

OPENING STATEMENTS FROM THE SUBCOMMITTEE

• Chairwoman Jen Kiggans welcomed all in attendance to discuss the chronic issue of improper recruitment, retention, and relocation incentive payments, known as the "3Rs." She stated that while these incentives are critical tools provided by Congress to help the VA compete for healthcare talent, recent oversight reports revealed persistent misuse and weak internal controls. Chairwoman Kiggans detailed findings from the 2017 and 2025 OIG reports, which showed continued improper payments, inadequate documentation, and oversight failures despite prior recommendations. She expressed frustration that the VA has not corrected these issues, especially given the growing amounts of taxpayer dollars involved, and called on the Trump administration to implement real reforms to safeguard these funds and improve veteran care.

• Ranking Member Delia Ramirez stressed the critical importance of properly overseeing the VA’s 3R incentives while ensuring they remain effective in retaining a competent workforce. She criticized Secretary Doug Collins and the Trump administration for workforce reductions that have led to negative impacts on veteran care, citing the VA’s own data showing thousands of net losses in veteran-facing roles. The Ranking Member argued that the VA faces a leadership crisis, with employees citing a lack of trust and confidence in senior leaders as a key reason for leaving. She warned that without effective use of incentives and proper leadership, the VA’s capacity to deliver care will continue to erode, which she attributed to deliberate workforce decimation aimed at privatizing the VA.

SUMMARY OF KEY POINTS

• Ms. Tracey Therit testified that the VA is committed to improving governance and oversight of the 3R incentive payments, which are critical due to uncompetitive pay caps for healthcare professionals. She outlined steps that the VA has taken since 2017, including new documentation requirements, standard forms, and better authorization processes to strengthen oversight. Ms. Therit acknowledged that improvements are still needed, especially in proper documentation, justification for incentives, and eliminating multi-year incentives. She assured the Subcommittee that VHA is developing comprehensive strategies, oversight mechanisms, and training programs to ensure compliance and better serve veterans.

• Mr. Shawn Steele summarized the OIG’s findings, highlighting that VHA continues to struggle with staffing shortages in critical occupations despite having incentive programs. He reported that while nearly 90% of incentives in recent years targeted staffing shortages, the VA failed to consistently document justifications and approvals, undermining oversight efforts. The OIG estimated that 30% of incentive payments, totaling about $341 million, lacked sufficient support, with some employees receiving payments years after eligibility expired. Mr. Steele said that the OIG will continue monitoring VHA’s staffing and incentive use to ensure accountability and proper stewardship of taxpayer dollars.

• Dr. Sheila Elliott agreed with the OIG’s critique of the VA’s incentive program and blamed VA Human Resources (HR) for mismanagement that exacerbated turnover. She reported that AFGE’s inquiries at the Hampton VA revealed only a handful of bonuses awarded between 2021 and 2025, indicating underutilization of the program. Beyond the bonuses, Dr. Elliott criticized the Trump administration’s executive order eliminating collective bargaining rights for many VA employees, which she argued harmed recruitment and retention. She also raised concerns about telework restrictions, which have negatively impacted morale and retention, especially among clinicians practicing telemedicine.

• Chairwoman Kiggans offered clarification regarding mental health services at the Hampton VA and the phased rollout of the North Battlefield VA Clinic in Chesapeake. She reported that the clinic opened in April 2025 with core services like primary care, mental health, and pharmacy, and was always intended to expand in waves. The Chairwoman reaffirmed her commitment to ensuring that the facility reaches full operational capacity by January 2026 and defended the phased approach as standard and prudent. She voiced confidence that Secretary Collins will prioritize maintaining a robust healthcare workforce at the VA and praised the VA’s recent accomplishments under the Trump administration, including reductions in the disability claims backlog and improvements in benefits access for survivors.

• The Chairwoman then turned to questions, asking why the VA’s review process for incentive payments was reactive instead of proactive. Mr. David Perry answered, stating that the VA recognized this gap and was shifting responsibility to VISN compensation teams to implement reviews on the front end.

• Chairwoman Kiggans also asked for a step-by-step explanation of how 3R incentives are approved. Ms. Therit provided an overview of the process, including the use of standardized forms and multiple layers of approval up to the network director level, depending on the size of the incentive. She noted that breach of agreement procedures exist to recover funds when obligations are unmet, and that the current oversight chain has been in place since 2020.

• Ranking Member Ramirez asked whether the broader use of 3R incentives at the Hampton VA would improve recruitment and retention. Dr. Elliott responded that she had not seen active use of these processes in recent years and claimed that relocation bonuses were typically reserved for management rather than line staff.

• The Ranking Member then asked how many employees the VA had lost through natural attrition since January. Ms. Therit replied that approximately 20,000 separations had taken place but did not have a specific breakdown of veteran-facing roles, promising to follow up.

• Ranking Member Ramirez further questioned the decline in the use of 3R incentives since 2024. Ms. Therit explained that justifications are required, and in some cases, the VA has been able to hire without needing incentives, though she committed to providing more data.

• Rep. Herb Conaway commented on the negative impacts of announced workforce reductions on morale and recruitment at the VA. He questioned Dr. Elliott on the effects of reduced telework and retention policy changes. Dr. Elliott responded that the Hampton VA was 43% understaffed, was about to lose a psychologist due to lack of relocation support, and that recruitment often only begins after a position is vacated, causing cascading delays for patients.

• Rep. Tim Kennedy asked Ms. Therit to explain why collective bargaining rights were preserved for some VA employees in Milwaukee but not for similar roles in Buffalo. Ms. Therit stated that the matter was under litigation and she could not comment further.

• Rep. Kennedy also asked whether the erosion of collective bargaining rights affected recruitment and retention. Dr. Elliott confirmed that it had a negative impact, warning that indiscriminate workforce reductions risk eliminating critical positions like doctors and nurses.

• Chairwoman Kiggans inquired whether the VA would develop quality control guidance as recommended by the OIG. Ms. Therit and Mr. Perry confirmed that this was underway and expected to be completed by the end of the fiscal year, with VISN leadership taking responsibility for compliance.

• The Chairwoman also asked if exceptions to incentive payment limitations were more often approved for clinical or administrative positions. Ms. Therit confirmed that clinical positions were more frequently approved. Mr. Steele added that both systems and human error contributed to failures in recertification documentation.

• Ranking Member Ramirez requested detailed data on employees who left the VA since January, including by location, occupation, and whether positions were refilled. Ms. Therit committed to providing that information and noted limitations in tracking job offer declinations. The Ranking Member then asked for data on appointments canceled due to staffing shortages, which neither Ms. Therit nor Mr. Perry had readily available, but agreed to follow up.

• Rep. Conaway expressed concern about student loan caps affecting future physician recruitment and asked for data on physician job postings, hires, and retention efforts. Ms. Therit and Mr. Perry acknowledged the concern and committed to providing answers for the record.

• Rep. Kennedy criticized the discrepancy between Secretary Collins’ assurances and the actual data showing cuts in mission-critical roles, such as registered nurses and physicians. He emphasized that staffing shortages were directly harming veterans and called the administration's actions un-American.

• Chairwoman Kiggans advocated for effective oversight of the VA’s bonus payment practices to prevent fraud, waste, and abuse. She reiterated her commitment to ensuring that the VA prioritizes patient care and that incentive payments are used appropriately to retain clinical staff who provide high-quality care to veterans. Chairwoman Kiggans expressed support for the VA’s decision to avoid large-scale layoffs in favor of reducing positions through attrition and encouraged transparency in the VA’s reorganization efforts. She concluded by affirming that veterans deserve efficient, compassionate care and that Congress must continue its oversight role to protect that standard.

• Ranking Member Ramirez warned that the VA cannot achieve world-class care when it is losing large numbers of critical staff, including nurses, physicians, and medical support assistants. She criticized the leadership of Secretary Collins, citing data from the VA’s own workforce dashboard that shows substantial losses in veteran-facing roles. The Ranking Member urged the public to review the workforce data themselves and accused the administration of deleting or hiding unfavorable information. She then entered 26 issues of the VA workforce dashboard into the hearing record to ensure transparency and public accountability.

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