▶ 0:23:03I'm fine. Good to see you.
▶ 0:23:57Subcommittee will come to order. Thank you to all the witnesses for being here today. We're going to take a closer look at the Department of Veterans Affairs efforts to decrease improper payments for compensation and pension benefits. Congress has appropriated over $150 billion to the VA each year for the past few years. We must ensure the VA is a responsible steward of the taxpayers investments. This means paying every veteran the correct amount of benefits they have earned the first time.
▶ 0:24:25When the VA makes overpayments and they are not returned, taxpayer dollars are obviously wasted. Overpayments can result in VA establishing debts that veterans owe back to the VA, which can obviously create a paperwork nightmare for them and their families. Current law allows VA to either cancel these overpayment debts or waive collection of those debts. From fiscal year '21 to '24, VA has issued at least billion dollars in compensation and pension and pension overpayments.
▶ 0:24:56VA collected only a portion of those overpayment debts. This means that during the last administrations, VA spent $677 million in taxpayer dollars. Roughly, over example For example, VSOs and some of my colleagues in Congress have told me that VA overpayment overpaid their constituents for Those veterans correctly and immediately updated VA that they no longer had a dependent child or spouse. VA did not update the benefit payment obviously until months later.
▶ 0:25:26As a result, many of those veterans owe VA debt and are dealing with the stress of repaying that underneath a waiver of collection for that debt. If the VA did not make these payments overpayments in the first place, obviously, there would be fewer wasted taxpayer dollars resulting in fewer uncollected overpayments. I look forward to hearing from the VA witnesses today on what the new administration plans to do to fix these bureaucratic headaches and prevent delays in processing dependent status updates.
▶ 0:25:55We have to streamline these things in order to take the pressure off of our veterans. There are other causes for VA improper payments of compensation and pensions. For example, the VA Office of Inspector General issued several reports on how inaccurate and effective dates resulted in improper payments during the last The effective date for a grant of a claim determines the amount of veteran a veteran will receive in disability compensation back pay.
▶ 0:26:22OIG has issued reports including one in April that VA incorrectly assigned effective dates when it granted certain types of claims such as pact act claims and claims for total ratings due to unemployability. OIG estimated those incorrect effective dates resulted in a in at least $100 million in improper compensation OIG found that the cause was ineffective policy guidance, job aids, and training when it comes to
▶ 0:26:52assigning effective dates of awards. I understand that this can be very difficult to determine the correct I can I understand this can be very difficult to determine the the effective date of the award. I look forward to hearing from OIG today and how the VA should provide claims processors with effective training and guidance on how to assign correct effective dates for all types of compensation and pension claims.
▶ 0:27:18Ultimately, when veterans owe VA a debt at no fault of their own, why should that taxpayers have to foot the bill? But we must ensure the VA makes every effort to to prevent overpayments from happening in the first place and I look forward to hearing from our witnesses today on how we can cut down on wasteful spending from improper payments in compensation and pension. And with that, I yield to the ranking member his opening statement. Thank you, Mr. Chairman. Appreciate your comments and thank you all for being here today.
▶ 0:27:49Uh we have a responsibility to make sure that the VA uses taxpayer money in an efficient and correct way. We also need to guarantee that the VA pays each and every beneficiary what they are due. So, today I want to have a genuine conversation on what works and what I'm not here to chastise the VA over their supposed fiscal wrongdoing and then leave without ideas for making the VA work better for the veteran.
▶ 0:28:15I'm also not here to just defend the status quo because at the end of the day, everything we do on this committee must be centered around the veteran. It must make things better for the veteran. So, we're looking at massive programs here, complicated, imperfect programs. I know we need to work to make them better and to do that, we're going to have to push for real efficiencies and We absolutely need to make sure strong payment controls are in place.
▶ 0:28:44Now that the VA is pushing out more money than ever thanks to the Pact Act, we need to make sure that the VA remains a good steward of taxpayer dollars. But we must be precise. If we take an overly punitive and difficult approach to compensation and pension payments, we run the risk of leaving veterans out in the rain without the benefits they have earned. I stress that they've earned. These are the men and women who have put on the uniform for us.
▶ 0:29:09They have earned these So, that doesn't mean it's an anything goes policy with no guardrails. But I believe this issue deserves a bit more nuanced consideration than some of the issues we deal with here. I would love to say this is an easy fix.
▶ 0:29:26That the over 130,000 Pact Act claims will go through without incorrect effective dates, that every veteran who gets divorced will immediately notify the VA before they incur debts, or that a grieving widow will catch an overpayment during a difficult and confusing time. But that's not the case. It's not reality. As I said, these are large complex systems. And not only are they run by they're used by humans.
▶ 0:29:56That means there will be errors. And even with the best possible there's going to be some mistakes. Our goal, and I believe it's the VA's goal as well, is to work hard to fully minimize any of those errors or mistakes, get the veterans what they need, and be strong stewards of taxpayer I think we're all rowing the boat in that direction. I don't suspect misconduct and incompetence around every corner. So, I hope that today we can have a discussion with that nuance.
▶ 0:30:25I also want to ensure that as we work to help the VA reduce the errors in their payment systems, we are equally concerned about what these errors mean to the beneficiaries on the other end. That's our veterans. Committee staff visited the Debt Management Center in February and heard a couple of first-hand accounts of veterans being confused, angry, and even suicidal because they incurred a debt they didn't know about. That's what I want to avoid.
▶ 0:30:52I want to make sure that the VA has processes in place to protect veterans and other beneficiaries, as well as the call center employees taking their So, Mr. Chairman, I know it's both of our goals that while we look for ways to make the VA better, we don't forget the veterans and the survivors and those serving them in the process. I look forward to a productive discussion and I yield back. Thank you, Mr. McGarvey. Welcome everyone and thank you for coming today. I'm going to introduce our witnesses. Our lead witness from the VA is Ms.
▶ 0:31:18Nina Tan, Executive Director of Compensation Services at Veterans Benefits Ms. Tan is joined by Mr. Kevin Friel, Executive Director of Pension and Fiduciary Services at VBA. Ms. Tan is also joined by Ms. Janine Gilson, Acting Chief Financial Officer for the VBA. Uh today's witness panel is also in it also includes Mr. Brent Arronte, Deputy Assistant Inspector General for Audits and Evaluations at the VA Office of the Inspector General. Mr.
▶ 0:31:46Arronte, do do I understand it correctly this won't be the last time I'm seeing you or are you are you are they putting you out to graze? Well, if if that is the case, it's been an absolute pleasure working with you over these past few years. Fair winds and following seas, my friend. That's a Navy term. Hope you understand it. I ask the witnesses to on the panel to please stand and raise your right hand.
▶ 0:32:15Do you solemnly swear that the testimony you're about to provide is the truth, the whole truth and nothing but the truth, so help you God? Thank you and let the record reflect that the witnesses have answered in the affirmative. Ms. Tan, you are now recognized for 5 minutes to deliver your opening statement on behalf of the VA. Ms. Tan, is your on? I'm sorry. Good morning, Chairman Luttrell, Ranking Member McGarvey, and members of the subcommittee.
▶ 0:32:45Thank you for the opportunity to appear before you today to discuss the Department of Veterans Affairs oversight of improper payments compensation and pension programs. With me today from the Veterans Benefits Administration is Kevin Friel, Executive Director, Pension and Fiduciary Service, and Janine Gilson, Acting Chief Financial Officer. At VA, we take our mission to serve veterans, their families, and survivors very seriously. We are committed to being good stewards of taxpayer dollars, and we recognize that improper payments are problematic for all of our stakeholders.
▶ 0:33:16An improper payment occurs when a payment is made in the wrong amount, either too much or too little, paid to the wrong person, or paid without the required documentation. We want to assure Congress, veterans, and the American taxpayers that VA is working diligently to safeguard not only veterans and beneficiaries' financial entitlements, but also the funds appropriated to VA to carry out our sacred and honorable mission.
▶ 0:33:39VA is using a range of strategies to proactively address and mitigate potential improper payment issues, which I will discuss today. In fiscal year 2024, VA reduced improper payments by about a billion dollars. Achieving this result was made possible by leveraging data sharing agreements with multiple federal agencies. These provide critical information that informed the propriety of payments, such as benefits related to military duty status, benefit changes due to death, and income-related information.
▶ 0:34:09Additionally, these partners provide information that helps identify discrepancies or confirm information. These agreements are used to establish or verify eligibility for federal benefits, verify compliance with federal benefit programs, recoup payments or delinquent funds, as well as investigate potential fraud, waste, or abuse. For example, VA made several improvements to data matching agreements for VA's income-based pension benefits.
▶ 0:34:35VA now uses federal tax information to verify an applicant's income upfront and income matching with the Social Security Administration to verify continued eligibility for income-based benefits. In addition to these strategies, VA continuously examines our systems and processes to improve timeliness and accuracy, thereby reducing improper payments. In December 24, VA modified its procedural guidance to liberally interpret reevaluation provisions for dependency and indemnity compensation claims.
▶ 0:35:04These changes streamline the decision-making process to mitigate the likelihood of underpayments and ensure VA renders the correct decision the first time. Additionally, these changes reduce requests for unnecessary information and simplify the claim review process. An area of crucial importance in making accurate payments is the correct application of effective dates by claims processors. Training and oversight through quality assurance and having proper internal controls in place are at the core of this issue.
▶ 0:35:32VA has taken steps to enhance training and oversight of effective dates through use of quality stand-downs, refresher training, to include a release of PACT Act training that focus heavily on effective dates. And publication of job aids based on findings from special focus review, which allow tracking and trending of errors. We also welcome the review and analysis of our Office of Inspector General partners to examine our procedures and identify areas for improvement.
▶ 0:35:58For example, on April 15th, OIG published a report on PACT Act effective dates. In response to the OIG's six recommendations, VBA is ensuring claims processors have the guidance, training, and tools they need to assign the most advantageous effective dates allowed by law for veterans claims.
▶ 0:36:16VBA is also enhancing our collaboration with the Board of Veterans Appeals and the Office of General Counsel to improve the quality, comprehensiveness, and legal accuracy of its training programs in an effort to reduce delays, avoidable errors, and rework. VBA internal controls play a key role in reduction of improper payments and include a robust quality program to monitor claim accuracy. But, VA cannot reduce improper payments alone.
▶ 0:36:41We need help from our veterans and beneficiaries to reduce avoidable improper payments through the timely reporting of updated information. Any changes to information, such as marital status, income, or dependency status must be shared with VA as quickly as possible to avoid overpayments and underpayments. For example, if a veteran and their spouse divorce and VA is not notified, this will result in an overpayment and potentially a debt that the veteran will have to pay. It is very important that veterans report any such changes to VA as quickly as possible.
▶ 0:37:11To better support this, VA is working to improve how it communicates the importance of reporting such changes to veterans and beneficiaries and to make reporting these changes as easy as possible. We are exploring communication avenues to ensure veterans are aware of what information we have and when they need to report a change. VA continues to make improvements on reducing improper payments and acknowledges there's more to be done. We are committed to working with Congress and our stakeholders to further improve, correct, and avoid improper payments where possible.
▶ 0:37:39We thank the committee for their continued support of programs that serve our nation's veterans and look forward to working with you. Mr. Chairman, this concludes my statement. My colleagues and I are prepared to respond to any questions from you and members of the Thank you. The written statement of Ms. Tan will be entered into the hearing record. Mr. Bronte, you're now recognized for 5 minutes to deliver your opening statement on behalf of OIG.
▶ 0:37:59Chairman Luttrell, ranking member McGarvey, and members of the subcommittee, thank you for the opportunity to testify on the OIG's independent oversight of VBA's compensation and benefits programs. We know that these programs provide critical financial support to many veterans and other beneficiaries who rely on their monthly benefit payments.
▶ 0:38:20Our oversight work has identified deficiencies in VBA's processes, IT systems, training, and internal As a result of that oversight, we focus on recommendations that will help VA find ways to deliver timely, accurate payments so beneficiaries are not impacted by miscalculations and incorrect payments. Taking corrective action on OIG recommendations could also help VBA be good stewards of taxpayer dollars.
▶ 0:38:50In addition to our audit work, the OIG has a robust criminal investigations program to combat bad actors who fraudulently receive benefits. Improper payments are defined by OMB as federal payments that are for an incorrect amount, paid to an ineligible recipient, or issued without adequate supporting documentation.
▶ 0:39:11For the purposes of this hearing, we are talking about underpayments and My written statement discusses several reports that identified improper payments, but I want to focus on the importance of correctly establishing the effective date of a claim.
▶ 0:39:26The effective date of a claim is paramount to ensuring that veteran's compensation claim is paid on the correct date most advantageous for the The PACT Act significantly complicated effective date determinations by adding locations, dates, and new presumptive that claims processors must consider.
▶ 0:39:48VBA rolled out the majority of training for PACT Act claims processors in December of 2022 with a completion deadline of January This was an accelerated training schedule to facilitate implementation. VBA began processing PACT Act claims for terminally ill veterans in December of 2022 and processing all other PACT Act claims in January of 2023.
▶ 0:40:15In a report we released last month, we found that 24% of the cases we resume we reviewed staff assigned incorrect effective dates that resulted in $6.8 million in improper payments, including both under and over payments. Based on these projections, by August of 2025, that amount will reach approximately $20 million.
▶ 0:40:38We determined We determined that this was the result of VBA not effectively preparing claims processors to incorporate PACT Act significant changes. The training guidance lacked the specificity needed for complex decisions, and the two IT tools that were to assist in determining effective day correct effective dates were In our soon-to-be published report on VA's compliance with the Payment Integrity Information Act, or also known as PIA, we found VBA
▶ 0:41:08reported improper payments, or VA reported improper payments of approximately $2.2 billion in both over and underpayment, which is down from 3.2 billion that was reported in 2023.
▶ 0:41:22However, of that 2.2 billion, 1.1 billion is considered a monetary loss and likely will not be recovered by While VA satisfied five of six PIA requirements this year, it continued to report an improper payment rate of more than 10% for two programs.
▶ 0:41:41Those programs are VBA's pension program and VA's purchased long-term care While VBA's compensation program is not included in this report, it will be next year since VA identified the compensation program as a high-priority program because it is susceptible to significant improper payments.
▶ 0:42:03The OIG is committed to continuing its independent oversight work of claims processing activities and VBA operations in order to to a better experience for veterans and their beneficiaries. Chairman Luttrell, ranking member McGarvey, and members of the subcommittee, this concludes my statement. I would be happy to address any questions you may have. The written statement of Mr. Ronte will be entered into the hearing record. We'll now move to questioning.
▶ 0:42:26I recognize my I recognize myself for 5 Okay, that was quite the suitcase you just unpacked, sir. So, Miss Miss Tan and Miss the This is how I'm going to start this. How do we fix this problem? Miss Tan, you said we're exploring our avenues of communicating with our veterans because this is a this is a pretty long cast here.
▶ 0:42:51So, it starts inside the VA with our digital infrastructure, our training, manning, equipping with software and hardware. But, as it moves downstream and touches the veterans, they have to be able to communicate back into the organization to say, "Hey, look, my dependents are no here or and I I've gotten a divorce or my spouse has passed away." How do we track you mentioned social security earlier.
▶ 0:43:16How do we How does the VA Cuz in my district, people have they don't have computers, they don't have phones. Our veterans like to dig in and they're just kind of hidden. How do we track or help our veterans track How do we track our veterans if they lose a spouse so we're not provided so the VA is not providing overpayment? How How do we fix that problem?
▶ 0:43:39Cuz at the end of the day, I'm going to say this now, I'm going to say it in my closing remarks, if we're spending $3 billion in overpayment and underpayment, and from the last 10 years, if we're doing our homework correctly, those numbers have increased. We're We're losing ground. Which is money that can be spent in other areas of the VA. And I agree with my ranking member's opening statement. You have We have the ability to fix this. And This is a a problem, yes.
▶ 0:44:08It's in when you're dealing with dollar bills, that's a it's a big problem considering the numbers, we have to be aggressive. We, us and the VA, have to be aggressive on how to fix this. I think it's absolutely possible in 2025. Um so, Miss I'll Miss Stan, you can you can start start with you. Thank you for your question, Chairman. So, we are looking at a number of avenues, but we also have a couple a lot of things currently in place.
▶ 0:44:32We are um making sure to notify veterans in our correspondence and uh about when they need to report changes to us, what we have of record and how we're using that information. We also uh have the they have the ability to report to any of our public contact offices. They can make uh changes through va.gov, as well as call our call center. So, we want to make it as easy as possible for veterans to access um and provide updated information as much as is necessary.
▶ 0:45:01Um we also have capabilities in which we use matching agreements. You mentioned Social Security. Some of that is for income-based benefits and entitlements. Um we also do death matches so that we are made aware and we have like a survivors assistance office now that can help veterans kind of navigate some of these situations, but really for information that only they have, um like their if there is a divorce, if there is the death of a spouse, or the need to remove or add a dependent, that's only information that veterans know
▶ 0:45:31that they have to come to us. And so, we're trying to open all the doors and make sure that they know that they have to inform us and what information we're using at any Do we Do we have the exact I'm going to try to say this right. Do we have the exact number of how many beneficiaries there are? How many we correspond with, and how respond back to the VA's requests? So, if we're pumping out letters, Mr.
▶ 0:45:58Frill, to 100 veterans that we give that are beneficiaries, and only 30 of them are responding back. But, we're still paying the other 70. Is Do you have that number, by chance? Ms. Tan, maybe you're switching to Mr. Pearl. I apologize. No, sir. I don't have that number readily available, but we can take that that Does Is that a question that's being asked in the department? It is.
▶ 0:46:20We are looking at um in in in specifically in our area in pension fiduciary, we are looking at the rate of return when we do development actions or we do requests for information. The rate of return that we get um Do you have like a projection or a window of that you can provide the committee today? No, sir. I I would just be making up an arbitrary number, and I I don't want to do that, but we will I'll get that I ask that you get that to us. Because again, I'm just curious if we're in the billions in overpayments.
▶ 0:46:49And sir, if you don't mind, one thing I'd like to expand on Ms. Tan's answer is with the Social Security Death Match, originally that was just for beneficiaries. We have expanded that out to dependents on an award. So, to your question about how we would find out if a spouse passed away, we will do that through the Social Security Death Match. We are Social Security has the same limitation we do that they're they're dependent upon a third party to notify them of a death. But, once we get it, we can start action for it with the with the veteran to remove that dependent from their award.
▶ 0:47:19Okay. I I'm just eager to to know how many beneficiaries there are, how many we send information to, and how many are responding to that request. Cuz the delta in there, I'd be curious to see what the number sign is. And how that's correlated. Yes, sir. And and from that perspective, sir, just for clarity, we do correspond with almost all veterans every year when we do the cost of living adjustments to what Ms.
▶ 0:47:46Tan spoke about in the letters we identify change, but um as far as the other actions where we do development and like a due process, is is that more of area that you're That at? Well, that might be where one of the misses are. Okay. It's It's It's causing the problem. I'm not I mean, it's a lot There's a lot of them, but I think that would I'll make the same I'm sorry. I'm sorry, man. Recognize every Recognize 5 minutes, Hey, Mr. Chairman. Thank you all for being here. Again, Ms. Tran, I'll start with you this morning.
▶ 0:48:13For fiscal year 2024, what were the reported level of improper payments for both the compensation and pension services as real dollar numbers and as a percentage? Thank you for the question, sir. I'm going to ask our acting chief financial officer if she'll take that question, Good morning, and thank you for that question.
▶ 0:48:33Um for fiscal year 2024, for compensation overpayment debts, we established 1.14 billion dollars in uh overpayment debts. And that is out of an outlay of 161.196 billion dollars, which comes out to a fraction of 1% of improper payments. It's 0.72% of outlays were improper.
▶ 0:49:02The breakout for the pension service for their overpayment debts were 227.4 million dollars out of an outlay of 3.743 billion dollars, which is a percent of outlays of 6.1%.
▶ 0:49:21In total, when you add both of those numbers together, the total compensation and pension overpayment debts established was 1.366 billion dollars out of a total compensation and pension outlay of 161.196 billion dollars for again a below 1% um percentage of compensation and pension outlays. It's 0.85% were improper.
▶ 0:49:53Got it. And of of the those improper payments, what percentage were overpayments versus underpayments? So, um I can do uh the rough math here from the agency financial report for And again, these are projections um that are are given to us after a statistically valid sample of 300 cases is evaluated.
▶ 0:50:19But from the statistically valid sample, pensions improper payments were $404 million. And the the overpayments And the overpayments were $381.78 million. So, in the magnitude of 80-ish percent. So, okay. Run run through that one more time for me. The pensions were Certainly.
▶ 0:50:44So, improper payments um as a whole Well, improper payments not including unknown payments, where we don't know um whether the payment is improper or not because the the individual the payment may be going through due process. Um so, for improper payments that actually have been identified in a projection as being improper, the total was $404 million.
▶ 0:51:10And the the overpayments of that 404 were $381.78 Thank you. Uh do you think do these numbers show an increase or a decrease in improper payments for these offices over prior years? So, for pension service, this is an increase. Uh the projection is an increase from 2023 to 2024.
▶ 0:51:45Taking my own notes. Thank you for that. And and I this for Ms. Tan, but you know, whoever has the answers for as I understand it, uh compensation service will be subject to more in-depth supervision under the Payments Integrity Information Act. Can you tell us why and what changed at comp service to make that necessary? Sure. Thank you for the question, sir.
▶ 0:52:08So, what it is is that in FY24, compensation service underwent a risk assessment, and because of the pure scale of our program as was mentioned earlier, just the amount of outlays that we have, we are susceptible to more um improper payments, and so it's not necessarily that anything wrong was done.
▶ 0:52:26We are in testing and evaluation right now, but that um heightened awareness and risk assessment as an internal control will lead us to reporting again in 2025 after having been removed previously because uh we met the the peer requirements, and OIG concurred with that back in April of 2021, I believe. Okay, we've got just a little bit of time left. Would you say this is a function of scale and not an issue of lack of proper controls, or how would you characterize it?
▶ 0:52:52I think because of as has been mentioned, the just the amount of beneficiaries and veterans that we're paying and the vast dollar amounts that we're paying, we just are at heightened risk. Um it's a combination of factors again that you mentioned. I I believe we have strong internal controls in place, and we're constantly working to improve those. Um but I think it's uh just based off the risk assessment, we have a higher risk because of the amount of outlays that we have. We're out of time, so I yield back to you, Mr. Chairman. Thank you, Mr. McGarvey. Mr.
▶ 0:53:22Self, sir, you're recognized for 5 minutes. Uh thank you, Mr. Chairman. These are a lot of numbers. Your last comment though, Ms. Tan, you're at a higher risk because you have Why is that logical? Because of the scale of our program and the amount of beneficiaries and payments that we do make, we just have a heightened level of risk around the potential for improper payments. Which could be under or overpayments.
▶ 0:53:51Yeah, I would I would disagree with that assertion, but uh Mr. Friel, yes or no, did you fix the Social Security Administration matching Yes, we did. How did you do that? We did a testing with Social Security. We have validated that we were getting good responses. We have now continued to run that match every quarter uh to ensure that we are capturing the data as soon as possible. Okay, so this is one of my continuing comments about VA.
▶ 0:54:19We hear a lot about your inputs, what you have done. Um I'm more interested in outputs and we just heard that improper payments increased from FY23 to FY24. So, when are we going to start seeing results to this fix to the problem? Sir, our our projection right now is that the FY27 testing will get us below the 10% that's required by PIA.
▶ 0:54:41Uh we are currently still doing the match cleaning up the matches from the historical point and we believe that we will have a good good portion Excuse me, we'll be a good position in uh 2027. We're also investigating the opportunities for automation uh so that we can use automation to address these quicker uh than having to work them through the the typical claims back claims inventory.
▶ 0:55:07Okay, well, I I suggest we do it quickly because in the four years under the Biden administration, we had almost $4 in overpayment uh debts. Uh so, let's move to the Veterans child Chapter 35 education benefits. Ms. Tan, we're talking about over $200 million for this one small sector of what we're talking about. So, when did you first learn about these overpayments for the $200 million plus dollars?
▶ 0:55:37Thank you, sir. Um we were actually notified, I believe, in compensation service um around after the October 20 uh 22 date. Um and that's when we started to work together to uh look for whatever solutions we can put in place. That information or that notification actually went through our office of financial management, and then they passed the information to compensation service.
▶ 0:56:02So, um I may not have those exact dates right, but the information flowed from um our OPM office from our office of business So, again, those are inputs. When do we see outputs? So, actually, we have um made changes um so that we have a matching program um uh information between compensation service and education service. So, we actually do a monthly match.
▶ 0:56:25Um we took we started that in January of 2025 to send notice, and in March of 2025, we made adjustments to those awards, creating no overpayments for our beneficiaries. In April, we have started that. We are doing that monthly match, and that allows us to give um veterans or beneficiaries due process of that prohibition from them receiving both of those benefits at the same time. Okay, Mr. Aronte, uh you mentioned the PACT Act complexity.
▶ 0:56:54Can you delve into that a little bit more because the PACT Act has led to the largest increase in in in our payments to our veterans for for ever. And can you go into that a little bit more into to include the incorrect dates? I'd like to hear that, but there are also six factors, I think you mentioned in your written testimony. So, can you go into the complexity of the PACT Act?
▶ 0:57:21And my question My bottom-line question, I have 1 minute, is uh does Congress need to do something to fix the complexity? Great question, sir. Um regarding effective dates, the laws have not changed regarding effective dates. What What complicated the issue with PACT Act is PACT Act added a lot of locations where veterans can serve for presumptive disabilities. They've added presumptive disabilities.
▶ 0:57:49And all of those issues are considered liberalizing So, anytime that there is a liberalizing that is something that a claims processor must consider. So, an an example of one of the most complicated issues is if a veteran files has an intent to file, meaning I'm going to file he's going to notify VA or she's going to notify VA that I'm going to file a claim within the next year. The date of that intent to file is one effective date.
▶ 0:58:18Then depending on what is being claimed, there could be two or three or four other effective dates. It could be when the the date when those disabilities or presumptive disabilities became law. It could be um, when uh, there's evidence that shows a veteran served in a specific location that was added due to liberalizing legislation. So, they have to consider all of those. And at the speed they work, um, I think they missed that. Is there any way we can clean up those?
▶ 0:58:46Because Is there any way we can clean up Different dates. From a legislative standpoint, um, we've done the work in that. I mean, our experience is this is something that the department has to to to fix. we've done some brainstorming, okay? If if if you'll bear with me, and regarding effective dates, I think we're going to have a second round. We may come back to this, Mr. Rantt. Mr. Chairman, I yield back. Mr. Rantt, continue on.
▶ 0:59:15That was going to be my line of questioning, so please Okay. So, so we've based on this recent work of effective dates, this is something that we've seen over years. When did you tell VBA that the improper effective dates were the number one In August of '22, I was invited to their rollout implementation conference in Houston, and we were asked to provide the IG's concerns, and our very first talking point was effective dates.
▶ 0:59:43And we were told that yes, we're going to train effective dates. We know it's important. This is one of the major causes of this blow-up, I'm I'm going to assume. So Yes. Yes. How do we fix this? three three things that me and my directors have brainstormed. I'm not I'm not advocating one or the other. It's It's a It's a choice to the of the department.
▶ 1:00:06The first is you could s- They could simplify the process of scenarios that govern effective Instead of having all of these different of of rules to govern effective dates, you could say the date you filed the claim, and when a law changed, right? You You could simplify that. I I think the the pros to that, I think you'd see a a better processing by VBA.
▶ 1:00:32The cons, I think you would get pushback from VSOs and Saying that, you know, just because it's complicated doesn't mean we don't do it. Um the second is automation. We I just created a division in the last year that looks solely at VBA's I can tell you they're not there yet. And And one thing that we see with automation is the more complicated the business process is, the more difficult they are they are having to automate.
▶ 1:01:02And And the third is what we have have recommended is more effective training and oversight. I I know that sounds like a broken record, but as we have seen training had didn't was not effective, it makes sense to have sound training, so when these issues like the PACT Act come or new Agent Orange presumptives come or or when whenever somebody decides to change what what benefit we're going to give veterans, that training has to be updated, it
▶ 1:01:32has to be adequate, and it has to be assessed. Training, yes, absolutely. Miss Miss Tan, how is the VA receiving that? And I know I I understand there's a challenge with when it when the digital signature inside the VA would we don't even have to walk down that road right now, but I'm the VA has received the the Inspector General's report. Is there any adoption plan ahead of these effective dates? Absolutely.
▶ 1:01:58We've actually already implemented um several of their recommendations, uh at least three of them. Um so, we worked to update our effective date builder tool in VBMS so Does it solve that problem? Does it solve the PACT Act the PACT Act problem that we're running into? It does assist because it addresses things like the intent to file, the liberalizing law, and the terror activity. So, that was one of OIG's recommendations, which we did implement earlier this month.
▶ 1:02:24We are in the process of completing the job aid that they recommended, and we also um referenced the uh outdated uh evaluation tool builder that was on our internet page where all of our PACT Act resources are housed, um so that it notes that that's historical, so people will not be using that, um and we are looking at the evaluation of our training um as OIG Inevitably, the VA is going to make the decision on what what the effective date is, and and the VSOs and everyone else is going to have to go with it. Yeah, we Kicking and screaming.
▶ 1:02:54There's going to have to be a decision made by the VA. Yes, sir. And we consistently look at how do we improve or and or simplify our processes as Mr. Arronte uh mentioned based off feedback and and things of that nature. So, effective dates are complex. It's hard work, and that's why we have humans in that process. If we could automate things end to end, we would. We can't. We know we need uh subject matter experts and human intervention in this process. There is a lot to unpack for our claims processors, but as Mr.
▶ 1:03:23Ronte said, uh PACT Act didn't change how we apply effective dates. It's just new information and people um applying them consistently to the most advantageous um available to the veteran under the law. Okay, Ms. Gilson, did we do I This may be a Mr. Ronte question, but did we do like a forensic audit on the amount of money spent over the past 5 10 years to make sure that we are not Again, we're trending in the wrong direction.
▶ 1:03:50Are we looking back on our numbers saying, "Hey, look, we're not making those exact same overpayment or underpayments and not replicating our I understand the expansiveness of the but we're as we know, we're missing something if we're spending over a billion dollars in how What is the comparative analysis that we're doing in order to fix it?
▶ 1:04:15And in next And then, how are we looking for Do Are we already projected to spend more than we did in '24? I threw I just threw a lot at you. I No, that's fine. Thank you. Um so, a couple couple answers to your question here. Um regarding the individualized tracking and trending of errors and how do we how do we correct those and and make them better? Uh the Office of Financial Management does not do each's reviews on the payments that go out.
▶ 1:04:46So, we take a review holistically at the summary maybe that's the case. However, um what we do within the Office of Financial Management is when we receive the payment information from our business lines, we are we are trusting, we are relying on the controls in place within that business line to make sure that payment is accurate.
▶ 1:05:12From the office of financial management's perspective, we review the pay file to make sure that the accounting is correct. That the money is actually in the proper um account to make those payments. That the um that the time of the payment is right. That the the the program is correct. We are accountants and we do not have adjudicators on the staff.
▶ 1:05:37Um if we did, uh we would need to reopen every single claim that came through to validate that. And We don't We we We're a billion dollars in the hole. We When are we going to start taking a look at that? And I'm not beating you up. I This is me talking out, okay? I mean, I don't know how far down the track it has to go before somebody says, "Yeah, that's probably a good idea." Which I think it's past time. Um I'm well over. Mr.
▶ 1:06:06McGarvey, I You're all right? Okay. I'm sorry. Yeah, no. No, thank you. I appreciate that. Um so uh So again, from the accounting perspective, we review to make sure that everything is appropriate and interfaces to Treasury for payment. My office also does a review of um fraud, waste, and abuse um types of situations. Uh we have a tremendous partnership with our colleagues within the Office of Inspector General.
▶ 1:06:32When we identify fraud around payments to make sure that we rectify that that veteran immediately. We make them whole. In many cases, we can reissue payments same day when we get a call saying, "Hey, I didn't get my payment." Uh when we identify that there's fraud um within uh you know, scammers who are changing bank accounts without veterans informa- or without veterans' knowledge, um we do engage the the Office of Inspector General to investigate
▶ 1:07:03those areas and identify, you know, further action That's when you see it. I mean, the the then the event has already happened. We need to make We're trying to stop it Correct. And so, we do have some tools and techniques that we have available where we are getting more proactively involved in preventing fraud.
▶ 1:07:24We're using machine learning and artificial intelligence and detailed analytics to to get This is where the department needs to come to Congress and say, "We have to have the money to implement this type of software, this artificial intelligence, machine learning." You have to tell us that. Cuz right now we're just seeing the numbers. And they're not Obviously, they're not good, but we're we're all in to help And again, this problem's been going on for I mean, I'm I'm going to make the assumption for for decades. let's let's fix it. Right here.
▶ 1:07:54We're We're ready, okay? Um I'm well over, Mr. McGarvey. Okay. Go ahead. Finish. Uh I think I'm pretty much Okay. All right. So, Mr. McGarvey, I'm sorry, sir. I recognize you. Thank you. Uh thank thank you, Mr. Chairman. And appreciate this conversation because we want to get this right, right? We want to make sure that we are getting the money to our veterans that they need, that they deserve, and that we are being good stewards of taxpayer money.
▶ 1:08:20Uh in my in my round of questioning, I'm I will refresh everyone's memory cuz it was a second ago. Um I was talking with Miss with Miss Tan about whether this was a function of scale, not an issue of lack of proper controls. And she sort of said more it's a function of scale, and I just wanted a second opinion on that. Mr. Aronte, do you agree with that To some degree, sir, I do. It is a matter of scale.
▶ 1:08:48So, if if you look at the the PIA thresholds, those PIA thresholds are across the government. Every agency has those same thresholds. So, if you're if you're conducting a risk assessment of the National Science Foundation, and their budget is like this. They mess up they mix they mess one thing up and it's high risk. DOD, HHS, VA, their budget is like this.
▶ 1:09:14So, they get this much more leeway to make mistakes or have acceptable mistakes. I That's why I I am a firm believer that as it relates to compensation compensation has been on and off the PIA program throughout the years.
▶ 1:09:32as the chairman indicated in his opening statements, we have a body of work that constantly that there are improper payments and then in that in the last nine reports I've issued seven show incorrect effective dates that lead to improper payments. I think that's enough where compensation should be I think they should make an exception.
▶ 1:09:53I think compensation should be on their high priority list until the numbers come down and the reason I say that cuz if you look at some of the programs uh that are tested in in in the PIA, communications, utilities, and rent. Those improper payments have dropped Um medical care contracts have dropped over 2%. VA community care has dropped from 5% to 1%. That tells me the process works.
▶ 1:10:22But you got to keep those programs on whether they meet the threshold or not just because it is a form of of function. There's a They're just so much disparity in the budget that allows more mistakes with bigger organizations. And Mr. O'Rourke, is there anything that is stopping the VA from complying with Okay, voluntarily complying I should And and that's the That's what our work is. I I have mixed emotions about the effectiveness of PIA.
▶ 1:10:53Uh the good thing about PIA is it's our oversight of the department. And it's compliance and it's we test to make sure that the department is following the rules. It's a strictly compliance audit. It doesn't get very deep, but they are following the rules. the chairman said something that that I I echo and and find interesting when talking with Ms. Gilson about tell us what you need, right? Tell us tell us what you need so we can help fix this problem.
▶ 1:11:21And uh we heard some suggestions from her potentially just from a different point of view. Mr. Aronte, do you have any suggestions for what Congress can do to help make the situation better? In in regards to PIA, I other than the recommendations that we make, I have I have no no other guidance um or suggestions. Like I said, our review is strictly compliance. It doesn't dig in deep, doesn't look for for what we would typically do in a normal audit.
▶ 1:11:50We don't look for the for the root cause. We just look at compliance as as mandated by OMB. Uh Ms. Tannen, in a June 2024 report, the OIG found that VBA had not identified Vietnam veterans who were eligible for benefits and that resulted in underpayment of 80 836.8 million dollars. Another 2024 review looking at survivors showed 33.1 million in underpayments.
▶ 1:12:17Both of those reports have open actions including a full review of claims, better outreach letters, and monetary compensation. Do you know where those reviews stand at this time? Sir, um for the one that you mentioned regarding survivors payments, I'll ask Mr. Friel to um respond to that one. Can you repeat the first one that you mentioned? I'm sorry, I didn't Sure.
▶ 1:12:39Um you're talking about the 2024 OIG report that Vietnam veterans who were eligible for benefits had not received them in in payments of 836.8 million and another looking at survivors in 2024 showed 33.1 million underpayments. The both of those reports have open actions including a full review of of claims, better outreach letter, monetary compensation. We're just seeing where those reviews stand right now and getting the veterans what they've they've earned.
▶ 1:13:06Certainly, I will take back um if I can that question about the Vietnam veterans um report to see where those uh those action items are and I'll ask Mr. Friel if he has an update on the survivors. Yes, sir. Sure, thank you for that question. So, as it relates to the survivors piece, um we have a we have adjusted our processes. One of the things that the IG called out was in the the PACT Act required that a survivor specifically asked for us to look back, all right, to see if there was an earlier effective date.
▶ 1:13:36Um and so that was our initial training with with in concurrence with or coordination with the IG and OGC, we have amended our processes now to say that a reopened DIC is in fact a claim for us to look back. So, that will help close that gap. Um we are continuing to work. We have I think we have um under 20 claims left the two uh make the proper adjudication and adjust the rates to ensure the survivors get the right Thank you, Mr. Friel. Mr. Chairman, I yield back. Thank you, Christian.
▶ 1:14:08Uh thank you, Mr. Chairman. Um we've heard a lot of Washington speak here today. Does anybody know what those uh ribbons up on the flags are? Campaign ribbons. They're battle streamers. Veterans that we are talking about, those represent the campaigns that our veterans fought in, were wounded in, died in. That's the veterans we're talking about here. I've heard a lot of Washington talk, Ms.
▶ 1:14:35Tan, in your in your testimony written testimony, it talks about how critical it is that veterans and beneficiaries self-report I agree with that, but what I've heard here is we haven't fixed the problems so that our veterans have the education and the training to know when they are supposed to do things and you heard the chairman say that in his district some people don't have computers. So we've heard this time and time and time again from my time on this committee.
▶ 1:15:02We have our veterans don't know and we've made it so complex Mr. Aronte's testimony. We've made it so complex for our veterans. Those battle streamers up there represent the veterans that we're talking about here in Washington speak. Ms. Todd How many OIG and two separate answers here.
▶ 1:15:23How many OIG recommendations do you have outstanding and how many GAO recommendations does the department have outstanding OIG and GAO? And these are recommendations of people that are telling the department things to improve your processes. How many do you have open? Sir, I don't have the total number of all of those pending. I would like to know uh because uh we have got to do better. I mean inputs are not outputs.
▶ 1:15:52I want to start hearing outputs about how we fix the problems. Uh with that Mr. Chairman, I yield back. Thank you Mr. Chairman. Uh Ms. Chan during the last administration VA informed us of plans to rely on the the authority in Cleveland Dole to cancel overpayments of VA benefits resulting from administrative delay. When will VA begin using this authority?
▶ 1:16:23Thank you for the question ma'am. We are still in the process of implementing uh Cleveland Dole section 252. We have um implemented one of the sections uh but we're still working on uh implementing the one that will uh require us to create um permanent timeliness standards around which to prohibit the uh overpayment or debt um applied to individuals because of delays in VA Uh Ms. Tran, yes or no.
▶ 1:16:51Was the April 2025 PACT Act effective date refresher training, was it mandatory? Yes, it was. Uh and yes or no, have all compensation service employees completed that April 2025 effective date training? Um I would have to get back to you on Please do. Thank you. Mr.
▶ 1:17:15Friel, yes or Has every employee who decides survivors DIC claims also completed that April 2025 training? Yes, they have. And Ms. Tran, what exact processes for assigning correct effective dates is VA planning to automate? And when will that automation technology be implemented? I am not aware of of plans to automate effective dates just because of the complexity around it.
▶ 1:17:45I will speak to the work that we've done to update and enhance our system so that the tools that are available to claims processors address some of those problem areas and pain points that Mr. Aronte mentioned, such as intent to file, liberalizing law, and toxic exposure activities. And Mr.
▶ 1:18:04Friel, does VA have the authorities, including all the computer matching agreements, that VA requires to ensure accurate payment of veterans pension and survivors pension? Yes, we do. Now, Mr. Aronte. What mistakes did the Biden administration VA make when initially rolling out training and guidance for PACT Act claims effective dates?
▶ 1:18:31Ma'am, based on our work, and and as I indicated in my opening remarks, is the training which was pushed out very quickly. They had four months to to identify the type of training that needed to be done. They trained in in December. It was very quick. And what our recent report shows they missed an opportunity.
▶ 1:18:55They did not evaluate the effectiveness of that training, but I can tell you my reports are showing that the training could not have been that effective because we're seeing high error rates with effective And sir, has VA done enough to fix those mistakes so that compensation overpayments will be significantly reduced in the future? Uh ma'am, uh if you're looking for a yes or no, I'm going to say no. Just because of my body of work.
▶ 1:19:21However, as as as the VBA panel members have indicated, I think they're heading in the right direction. They are correcting these effective date tool builders. They are consolidating um their their policies and procedures and the guidance so staff don't have to look through, you know, eight pages of 10 pages of FAQs on this site and 20 pages of FAQs on this site. I think they're working towards the right direction. So, Mr.
▶ 1:19:51Oronte, do you believe that VA's quality assurance controls are adequate to ensure that VA claims processors assign correct effective dates for award of benefits? No, ma'am. and the reason and the reason I say that, again, I'm I'm basing it on on our work. We see We see high error rates all the time. I think one of the things that we would like to see, and we looked at their QA programs in 2021. We looked at five aspects of it, issued reports on them.
▶ 1:20:21And since then, I I think one thing that we would like to see uh with their with their QA is when they draw samples to determine accuracy and error rates, they sample across the board, the entire spectrum of claims. It could be a musculoskeletal claim, it could be a claim to a presumptive claim, it could be a whatever, right? But if they But they know what their high high priority areas are. They know effective dates is one. There There's several others.
▶ 1:20:51I I I would like to see them, aside from a special focused review, cuz that's a one one one-time look, I would like to see them conduct a a specific sample of those high-risk areas. Now, that might not bode well for their accuracy rate, but it will help them hone in on what the high-risk problems are. Thank you, Mr. Chairman. Yield back. Ms.
▶ 1:21:20Strickland, do you have any more questions? We We We moved to the second panel. Do you have another question, or you good? Not at this point, Mr. Not at this point, Mr. Chairman. Thank you. Um I yield to the ranking member for closing remarks. Thank you, Mr. Chairman. I appreciate the testimony here today. Obviously, we appreciate you all being here, and I know that each and every one of us wants to improve these programs.
▶ 1:21:51We want to make sure that we get it right for the veterans, and we get it right for the We've got to do it in a holistic way. We've got to make sure that there are the fewest possible errors, and and that the personnel are well trained. We also want to see this done with care and compassion. I want us to find solutions. I want us to create efficient processes, and to listen to the workers and union workers when they tell us how we can help them in their work.
▶ 1:22:17I want the call center workers at the debt management center to have the ability to step back and breathe when a veteran calls in crisis because they don't see a way out of debt they didn't even know they had. I want the veteran in crisis to have access to immediate mental health care at that moment. I want to see a VA that provides kindness and clarity in a payment program to help a veteran get out of the red. But I don't want to hack away at the base. I don't want to needlessly attack people who are serving these folks um while we make it harder to conduct research or provide life-saving care and keep families together in burial plots.
▶ 1:22:47we want to make sure that the VA is That it's working for the people for whom it is intended to serve. The veterans. Uh that they do so in a responsible way that has the fewest possible errors. And I truly mean that. All errors. Whether it's identifying the proper payments, the proper training, whether it's an improper use of funds. Uh because at the end of the day if we don't get this right who are we hurting? We're hurting our veterans.
▶ 1:23:18We're hurting the people who work at the Many of whom have served our country prior to their serving our country at the VA. We hurt the families. The caregivers. And the survivors of the brave men and women who put on a uniform to serve us. Mr. Chairman, I look forward to working with you together on this issue. To finding genuine solutions to these problems. And I yield back. Thank you, sir. And thank you all for coming to the hearing today.
▶ 1:23:47We The ranking member and I are in agreement. We want to It would be ideal if we could walk this problem all the way down to zero dollar sign wise. The system itself is so large. There's going to be a There's going to be a margin of error in there somewhere. Our our our heartache is the fact that it's trending in in the wrong direction. And to his point, we are serving the veterans. The veterans are always on the receiving end of everything that we do in this committee and everything that you wake up every morning look yourself in the mirror walk into the office and say I hope why am I here?
▶ 1:24:17It's for our Taking what Mr. Aronte said, implementing those effects inside the VA will move us in the proper direction." Ms. Tan, you said you are implementing certain things that the the OIG has has pushed out. Amazing. Um Ms. Gilson, when you you reported the numbers, it's I just don't like the fact that we're not again, we're going again the wrong direction. And there has to be a fix.
▶ 1:24:39I'd like to meet with you in the antechamber after I have a couple of questions I'd like to ask you after the Um making overpayments at this number, and I think one of the worst things you can do I mean, I'm being dead 100% worst thing you can do is overpay a veteran and tell them you got to give it back. I mean, that's something that the United States government is exceptional at. I know I get hit by the IRS all the time. Hey, man, you owe us 25 cents. We Our veterans live paycheck to paycheck.
▶ 1:25:05And if you And a lot of them are in a deep deep dark black hole, and if you asked if you're trying to take something from them that the United States government gave to them, that's our Okay? And we have to fix that problem. So, whether or not it's hardware, software, man tripping and quaint man training equip, we have to be on And I know again, every time you guys sit in front of us, you you you're telling us that hey, that's that's happening inside the VA. I got it. And I'm again, once again, we are a large organization.
▶ 1:25:35And at scale, one of the largest. Okay? I'll always say, remember it is about our veterans. 100% we have to take care of those that took care of us. Okay? So, thank you thank you for coming and testifying before us today on the important goal of reducing waste results waste resulting from improper payments and compensations and pensions. I look forward to working with administration and my colleagues to cause that to that causes improper payments to ease the burden on our veterans and their families.
▶ 1:26:04I ask unanimous consent that all members have five legislative days to revise and extend their remarks and include extraneous material without objection. So, we're hearing's adjourned. Thank you, sir.