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"Examining VA’s Challenges with Ensuring Quality Contracted Disability Compensation Examinations"

House Veterans Affairs Committee, Disability Assistance and Memorial Affairs Subcommittee Hearing

September 18, 2024 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• Mr. Ryan M. Gallucci: Director, Veterans of Foreign Wars of the United States, on behalf of National Veterans Service

• Mr. Jeffrey London: Executive Director, U.S. Department of Veterans Affairs, on behalf of Veterans Benefits Administration

• Ms. Tara Flores: Director, U.S. Department of Veterans Affairs, on behalf of Office of Acquisition, Logistics and Construction

• Ms. Elizabeth Curda: Director, Government Accountability Office, on behalf of Education, Workforce, and Income Security

Keywords mentioned:

• Disability exams, Disability Benefits Questionnaires (DBQs), vendors, rework, timeliness, artificial intelligence (AI), specialists, flexibility, oversight

IN THEIR WORDS

OPENING STATEMENTS FROM THE SUBCOMMITTEE

• Chairman Morgan Luttrell noted that the Department of Veterans Affairs (VA) relies heavily on contracted companies to perform over 90% of disability compensation exams. He stated that the VA must ensure that contractors are properly scheduling exams and that veterans are not subjected to repeated exams unnecessarily. The Chairman acknowledged improvements in the VA’s processes but stressed ongoing concerns about scheduling, reworks, and customer service issues, which delay veterans from receiving their benefits. He called for continued VA oversight to ensure veterans get the high-quality service they deserve.

• Ranking Member Chris Pappas echoed concerns about the timeliness and convenience of the VA’s compensation and pension (C&P) exam process. He shared examples from his constituents about long wait times, inadequate communication, and veterans being forced to travel significant distances for exams. He mentioned that while contractors help address geographical challenges, the VA remains ultimately responsible for ensuring the care and benefits veterans receive. Ranking Member Pappas advocated for more hands-on oversight by the VA and improvements in customer service, urging the witnesses and contractors to prioritize veterans’ experiences over profits.

SUMMARY OF KEY POINTS

• Mr. Ryan Gallucci shared his personal and professional frustrations with the VA’s contract disability exam process. He detailed the inefficiencies he experienced, including auto-scheduling issues and repetitive exam requests that created confusion and delays. Despite his resources as an accredited representative, he faced challenges in coordinating exams, illustrating a systemic problem that affects many veterans. He urged Congress to pursue reforms that give veterans more control over the claims process and criticized the outdated 125-day timeliness standard, asking for better metrics to reflect the full veteran experience.

• Mr. Jeffrey London provided an update on how the VA is managing the surge in disability claims following the PACT Act, noting that over 3 million exam requests have been completed this fiscal year. He discussed efforts to expand capacity, including recruiting more professionals, increasing exam locations, and using telehealth and mobile units to reach veterans in remote areas. Mr. London emphasized that veterans remain central to the process, with the VA improving scheduling flexibility and implementing customer satisfaction surveys to monitor trust in the system. He also highlighted the extensive oversight of contractors, noting regular audits and performance reviews to ensure contract compliance.

• Ms. Elizabeth Curda spoke on the oversight of the VA’s contracted disability exams, pointing out that while contractors perform 90% of exams, significant backlogs and errors remain. She noted that while VBA has implemented many improvements, errors in exams lead to rework, delays, and increased costs. She reiterated that clearer procedures are needed for overseeing contractors’ quality action plans, including better verification and follow-up. Ms. Curda mentioned that VBA has not yet fully implemented several key GAO recommendations, which would enhance exam quality and reduce delays for veterans.

• Chairman Luttrell asked Ms. Curda whether Under Secretary Joshua Jacobs was aware of the GAO’s recommendations and if any follow-up had been initiated. Ms. Curda confirmed that Mr. Jacobs was aware and that his office had discussed plans to implement the recommendations. The Chairman indicated he would follow up with Mr. Jacobs in an upcoming meeting to ensure progress.

• The Chairman then asked Mr. London why only four contractors were being used for VA exams and whether more could be added to handle the workload. Mr. London explained that the four vendors were selected through an open competition and noted that the VA actually has 18 contracts across different regions. He acknowledged concerns about specialist availability in rural areas, agreeing that adding more vendors had not necessarily increased specialist access. Mr. Gallucci confirmed that while more vendors were introduced, they did not necessarily bring more specialists, citing a doctor in New Hampshire who was already working with multiple vendors.

• Chairman Luttrell inquired whether facilities were leaving the system more frequently than new ones were being added. Mr. London responded that new providers had been added, but the availability of specialists remained a challenge, particularly in rural areas. He suggested that expanding Congress’s licensing portability authority could help bring specialists into underserved regions.

• The Chairman followed up with Mr. Gallucci about why he had to travel to a distant facility for an exam, despite the VA’s 50-mile radius rule. Mr. Gallucci explained that the VA offered him a facility 62 miles from his home because it was the only option available within the necessary timeframe. He restated that veterans should have more control over the scheduling process to avoid unnecessary travel.

• Ranking Member Pappas asked how the GAO ensures that its recommendations remain relevant as circumstances, such as the PACT Act implementation, evolve. Ms. Curda explained that GAO recommendations are based on sound planning practices that include setting outcomes, stakeholder input, and flexibility to adapt to changing conditions. She advised that plans should be treated as living documents that reflect ongoing developments.

• The Ranking Member asked Ms. Curda if there was a direct comparison between VA exams conducted by contractors and those conducted by VA medical centers. Ms. Curda noted that it was not an apples-to-apples comparison, as the methodologies and quality assessments differ between the two systems. Mr. London confirmed that while there is a difference in scope between VHA and VBA exams, with VBA contractors handling far more exams, the quality ratings for both were similar, with a 97-98% completion accuracy.

• Following up, Ranking Member Pappas asked Mr. London to clarify how the quality of VBA contract exams compared to VHA exams. Mr. London stated that both quality review programs focus on ensuring that Disability Benefits Questionnaires (DBQs) are completed fully and accurately. He confirmed that the quality results for both contractors and VHA providers are similar, with a 97-98% accuracy rate.

• Rep. Scott Franklin asked how the VA ensures that veterans receive consistent care across different vendors and if the use of artificial intelligence (AI) to expedite the process compromises quality. Mr. London explained that the VA requires a 96% quality standard across all vendors and that AI is used to enhance search capabilities within the veteran’s file, not replace the need for a thorough review. He expressed confidence that each vendor would provide consistent data for claims processing.

• Rep. Franklin raised concerns about whether the VA had adequate oversight of the proprietary technology vendors use. Mr. London reassured him that the VA conducts site visits and has access to vendor portals, allowing them to monitor how the technology is used in processing claims and to ensure that the right information reaches the providers.

• Rep. Keith Self expressed frustration about the rising costs of exams and asked why the cost of disability exams had increased. Mr. London explained that the complexity of claims, especially after the PACT Act, contributed to higher costs, with the average exam costing around $600, depending on the number of conditions involved. He noted that rework contributes to the increase, with around 7% of exams needing rework, of which 2% are due to inadequate reports.

• Rep. Self asked how much rework is caused by improperly worded requests or lack of flexibility. Mr. Gallucci highlighted that rework is often inevitable due to outdated regulations, citing his personal experience. Mr. London acknowledged that timing issues related to regulation changes can lead to rework, and he supported more flexibility to reduce such occurrences.

• When Chairman Luttrell asked what could streamline the process for veterans, Mr. Gallucci suggested giving veterans more control over scheduling exams, allowing for flexibility in cases where attending an exam on a specific date is difficult. He called for a system similar to the decision-ready claims program or the process used during COVID-19, where veterans could pause exams if needed without penalty. Mr. London agreed that while flexibility is important, there must be governance to prevent unnecessary delays. He noted that the VA could improve flexibility without disrupting the claims process, and discussions are ongoing to address this issue.

• Ranking Member Pappas raised concerns about veterans having to attend multiple exams in different locations and asked how the VA could coordinate this better. Mr. London acknowledged the issue and said the VA is addressing it by consolidating exams with a single vendor whenever possible. He mentioned that upcoming contract recompetitions would provide an opportunity to implement these improvements.

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