Veterans Affairs officials: Mishandling of benefit claims in Philadelphia not a wider problem

The Veterans Affairs official overseeing benefits is rejecting notions that mismanagement at its Philadelphia office points to a broader, department-wide problem in handling veterans' claims and says an internal review will help determine fault.

A blistering report by the VA inspector general last week found a litany of problems in Philadelphia, part of a rush to reduce claims backlogs. Described as "very bad," the IG says similar complaints had been reviewed in more than 1 out of 5 Department of Veterans Affairs regional offices to date, although not on the scale of Philadelphia's.

"I don't look at this as a systemic problem at all," said Allison Hickey, the VA's undersecretary for benefits. "While we may have some records management problems, some misinterpretation of guidance and may even have an individual or two do things they shouldn't have done, it's not a reflection of the tremendous work of the VA."

Hickey's employees were testifying before the House Veterans Affairs committee Wednesday on their handling of veterans' disability and pensions claims.

Prompted by whistleblower complaints, the IG's 10-month investigation found the Philadelphia office had mishandled or neglected mail, manipulated dates to make old claims look new, altered quality reviews and made $2.2 million in duplicate benefit payments. More than 31,000 veterans' inquiries encountered delays — an average of 312 days, compared with a five-day VA standard for response.

"This practice seems to contradict VA core values of integrity," stated the audit, referring to the manipulation of data.

At least two lawmakers on the House panel have called on the VA to fire the employees responsible.

Hickey says a top manager and the employee who altered quality reviews had been temporarily reassigned, pending the VA's internal review. That review is slated for completion by late June.

The IG's office said the problems in Philadelphia had been investigated at 12 out of the VA's 56 regional offices. Besides Philadelphia, the IG substantiated at least some of the complaints at seven others — Baltimore; Boston; Houston; Honolulu; Little Rock, Arkansas; Los Angeles; and Oakland, California. Audits in four offices — Denver, New York, St. Paul, Minnesota, and San Diego — are still pending.

"We are concerned these actions are potential indicators of a systemic trend, motivated by a need to enhance reported performance metrics," said Linda Halliday, the VA's assistant inspector general, in prepared testimony for the hearing.

Lawmakers also were expected to ask why the VA paid more than $300,000 in relocation costs on behalf of the Philadelphia office's new director, Diana Rubens, for her move from VA headquarters in Washington, D.C., last summer. The IG is reviewing the payment. The VA says the payment was "appropriate;" two-thirds of the amount was a fee paid to a third-party contractor under a government program to sell a federal employee's house at a later date when it can't immediately be sold.

Rep. Jeff Miller, R-Fla., who chairs the House panel, said Congress will explore ways to end those type of relocation payments if the VA doesn't, describing it as a forced taxpayer subsidy for "already generously compensated VA executives."

The delays in veterans' compensation claims add to recent scrutiny of the VA, which found last year that long patient waits and falsified records at the Phoenix VA medical center were "systemic," leading to the resignation of VA-secretary Eric Shinseki.

The Philadelphia regional office oversees the administration of benefits to 825,000 veterans in eastern Pennsylvania, southern New Jersey and Delaware. The site also houses a Pension Management Center, one of three in the nation.


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