Cost of VA’s Electronic Claims System Worries Congress

By Debbie Gregory.

The good news is that the VA’s claims backlog, a major source of embarrassment for a number of years, has fallen impressively. The bad news is the price tag that goes along with the accomplishment.

The cost of VA’s paperless electronic claims network, called the Veterans Benefits Management System (VBMS), has already cost $1 billion. The cost will soon reach $1.3 billion, more than double the VA’s original estimate of $580 million.

The VBMS gets a software upgrade every three months, which, of course, is not free. And apart from quarterly upgrades, the VA is planning major innovations to the system, starting in 2018.

The size of the backlog peaked in March, 2013 at 611,000. Today the backlog is somewhere between 75,000 and 80,000, said Beth McCoy, VA’s deputy undersecretary for field operations. A VA claim is said to be in backlog status if awaiting a decision beyond 125 days of being filed. McCoy credited the decline in large part to the increasing effectiveness of the VBMS.

Rep. Jeff Miller, R-FL, complained that the backlog wasn’t eliminated by 2015, as promised by VA. Miller questioned how much credit VBMS deserves for the backlog’s sharp decline, noting that the Veterans Benefits Administration had hired 7,300 more full-time employees from 2007 to 2014.

In VA’s defense, McCoy said, “Scope and cost increases were planned, essential and approved to move beyond just an initial electronic repository functionality.”

She added that to better serve veterans as well as veteran service organizations and VA claim processors, VA steadily is increasing “automation functionality,” something they will probably never finish.

Miller has tried to make the case that paperless claims resulted in decisions of lesser quality, which accounted for a ballooning of claims on appeal.

McCoy disputed that, arguing that overall, claim accuracy scores had climbed from 83 percent in 2011 to 91 percent last year.

“Veterans are much better off because of the electronic system,” McCoy said. “We were outdated [and] should have done this years ago.”

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