Veterans Have Medical Claims Denied To Reduce Backlog, According to House Subcommittee Report

At least 28,283 veterans have had their medical claims denied by the Defense Finance and Accounting Service because of efforts to reduce a large backlog of claims, according to a report released on Tuesday by the House Oversight and Government Reform Domestic Policy Subcommittee, AP/Long Island Newsday reports.

According to the AP/Newsday, the federal government identified 133,000 veterans as being eligible for money through the government's "VA Retro" program. Another 84,000 veterans were added to the backlog because of changes in the law that made veterans eligible to simultaneously receive their disability and military retirement pay. DFAS in mid-2006 hired Lockheed Martin to help the office respond to the claims and reduce the backlog. According to the report, DFAS and Lockheed eliminated the backlog this summer, several months after the initial deadline.

However, the report found that the backlog was cleared only after DFAS and Lockheed eliminated quality assurance checks of their work, which resulted in the denied claims. According to AP/Newsday, DFAS officials were initially concerned about the number of errors in Lockheed's work, but the agency eventually suspended its own quality control procedures to avoid further backlogs. The report states, "While the subcommittee majority staff does not know how many erred payments were sent, we do not believe that DFAS knows either."

Response
DFAS spokesperson Tom LaRock said the office has processed more than 229,000 claims and paid out more than $149 million in entitlements, adding that DFAS has established "a reliable and repeatable process enabling us to adjudicate incoming claims within 30 days of receipt."

Lockheed spokesperson Keith Mordoff in an e-mail said that the company has remained "committed to the timely and accurate payment to veterans, and we have performed quality assurance in accordance with the terms of our contract," adding, "At no time have we sacrificed quality for speed." DFAS and Lockheed officials said they will address the concerns raised in the report at a hearing on Wednesday (Flaherty, AP/Long Island Newsday, 7/15).

The report is available online.