While veterans waited longer than ever in recent years for their wartime disability compensation, the Department of Veterans Affairs gave its workers millions of dollars in bonuses for “excellent” performances that effectively encouraged them to avoid claims that needed extra work to document veterans’ injuries, a News21 investigation has found.

In 2011, a year in which the claims backlog ballooned by 155 percent, more than two-thirds of claims processors shared $5.5 million in bonuses, according to salary data from the Office of Personnel Management.

The more complex claims were often set aside by workers so they could keep their jobs, meet performance standards or, in some cases, collect extra pay, said VA claims processors and union representatives. Those claims now make up much of the VA’s widely scrutinized disability claims backlog, defined by the agency as claims pending more than 125 days.

“At the beginning of the month . . . I’d try to work my really easy stuff so I could get my numbers up,” said Renee Cotter, a union steward for the Reno, Nev., local of the American Federation of Government Employees.

Now, claims workers said, they fear the VA’s aggressive new push to finish all one-year-old claims by Oct. 1 — and eliminate the entire backlog by 2015 — could continue the emphasis on quantity over quality in claims processing that has often led to mistakes. VA workers have processed 1 million claims a year for three years in a row.

Beth McCoy, the assistant deputy undersecretary for field operations for the Veterans Benefits Administration, said bonuses for claims processors were justified because, even though the number of backlogged claims was rising, workers were processing more claims than ever.


“There are many, many employees who are exceeding their minimum standards, and they deserve to be recognized for that,” she said.

She also said the VBA is improving quality even as it processes more claims.

But documents show that a board of appeals found in 2012 that almost three out of four appealed claims were wrong or based on incomplete information.

About 14,000 veterans had appeals pending for more than two years as of November.


In an attempt to encourage more productivity, the VA changed claims processors’ performance criteria between 2010 and 2012. The changes discouraged them from spending time gathering additional documents that could support complicated claims, according to written performance requirements for claims processors.


McCoy, the VBA official, said she heard from employees in the field that they felt the performance standards were not fair. “Things are changing very quickly, and we’re struggling a little bit to keep up with the pace of change as we update our performance standards,” she said.

A processor must gather medical and military records for each disability and assign disability ratings based on the severity of injury, which then determines the monthly check from the government.

The VA paid $44.3 billion in disability benefits and $5.5 billion to survivors of veterans with a service-connected disability, according to its annual benefits report for fiscal 2012. A veteran who is rated 10 percent disabled receives a standard $129 per month.

Claims for multiple injuries require significant time to gather documentation. Other claims, including for post-traumatic stress disorder, military sexual trauma or traumatic brain injury, can require just as much effort because they can be more difficult to prove than physical injuries.

In April 2010, the VA stopped giving its employees performance credit for “supplemental development,” which included tasks such as calling and sending follow-up letters to veterans and follow-up requests for military documents and medical records.

The change was meant to encourage processors to finish claims. But a complex disability claim could take all day, while a claim for one or two injuries could be completed much faster, said David G. Bump, a national representative of the AFGE and former claims processor at the Milwaukee regional office.


“I think after a couple of years of seeing things piling up, they realized that that didn’t work,” said Bump, a member of the bargaining committee that has met three times with the VBA in 10 months to discuss changing the standards.

The Baltimore office, which has the longest wait times in the country, gave bonuses averaging $1,100 each to 40 percent of its workforce. The Oakland, Calif., office, which shut its doors to retrain underperforming employees, awarded nine out of every 10 workers a total of about $33,000 — almost enough to pay the standard year’s benefit to a veteran who is 100 percent disabled.

In Sioux Falls, S.D., claims workers processed claims four times as fast as those in Oakland and Baltimore but less than one in 10 there received extra pay last year.

A claims processor in Reno said that this “breeds cheating” and that he has seen employees who aren’t making enough points go into “survival mode” and process only easy claims. Shifting performance points to reward backlog-related work would be more effective, said the worker, who requested anonymity for fear of reprisals.

“Your backlog is over here. But your points are in this direction. How stupid is that?” the worker asked.



Damon Wood’s disability claim for PTSD, ringing in the ear and a bad back and knee has been cycling for 21 months through a fortified federal office building in a corporate park on the outskirts of Reno.

He quit checking its status online because it hadn’t changed for more than 11 months. When he tried calling the Reno regional office for more help, he was diverted to one of VA’s eight national call centers.

“Your hands are tied by the people who actually have the claim in their hands,” Wood said. “So you can’t do anything more or anything less. It’s up to them.”

Fran Lynch, a former Seattle claims processor and exam consultant, said the VA built a “wall of separation” between the workers and the veteran.

“People form opinions about veterans based on paperwork, and they make decisions based on those opinions without ever really knowing the guys’ circumstance,” he said.

Allison Hickey, VA undersecretary of benefits, promised veterans in April that the more than 65,000 claims two years old or older would get a temporary or permanent decision by June 19, while those waiting more than a year would be considered by October.


For the third consecutive year, the VA mandated 20 hours per month of overtime for employees for part of this year to meet the deadlines, costing the agency about $44 million. In June, the VBA processed a record 110,000 claims, officials said.

Darin Selnick, a VA political appointee in the George W. Bush administration, called the quickly finished claims an old “sleight-of-hand trick.”

“They knew it was coming, and they knew it was going to get worse,” Selnick said. “I think the current leadership, Allison Hickey, they do the same thing to her.”


Stephen Leon served two tours in Afghanistan and won the Army Commendation Medal for valor after a firefight with three suicide bombers outside a gate in Kabul in 2011. The blast from one of their bombs left him with wrist, neck, knee, back and ankle injuries, as well as traumatic brain injury and PTSD.

When he returned home July 2011, he couldn’t get his mind off Afghanistan, the battles and the friends he lost. “You’re used to a life of being at peace, with yourself and your family and . . . when you go over there, all that breaks up,” he said.


Facing financial difficulties and struggling with PTSD, he was forced to move in with his mother.

“I couldn’t get a dime for claims, I couldn’t get in touch with anyone, and the ones I could get in touch with, they didn’t want to help me anyway,” he said.

He enlisted the help of an independent advocate, who fought for his claim and connected him with housing and better PTSD treatment. He was rated 70 percent disabled a year ago and now lives in his own apartment in Revere, Mass.

Without the help of an advocate and without the money, Leon said, he is convinced he would be homeless or dead.


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