Fast Facts

The Department of Veterans Affairs often uses medical exams to determine if disability benefits are warranted. This work has increasingly shifted from VA medical centers to contractors, who performed about 1.1 million of the 1.4 million exams completed in FY 2020.

We testified that VA has not applied sound planning practices in transferring this work to contractors. For example, VA has not developed timelines or assessed potential risks. In addition, VA does not conduct targeted reviews to check contractor work on more complex exams, such as those for Gulf War Illness. Our recommendations address these issues.

Military IDs and a stethoscope resting on an American flag

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What GAO Found

In recent years, the Department of Veterans Affairs (VA) has significantly expanded the Veterans Benefits Administration's (VBA) use of contractors to perform disability medical exams instead of relying on Veterans Health Administration (VHA) medical centers (see figure). According to VBA officials, VA's policy is to continue using contractors for most exams. GAO previously identified sound practices agencies can use to plan for significant programmatic changes. However, VBA has not applied several of these practices to its plans for allocating workloads among its contractors and VHA medical centers. For example, VBA has not assessed potential risks to capacity and exam quality in allocating the bulk of exams to contractors. Employing such practices could help VBA identify potential risks stemming from this long-term program change and better plan for addressing future workload needs.

Percent of Disability Exams Performed by VBA Contractors and by VHA Medical Centers, Fiscal Years 2017-2021

Over time, VA has also permitted contractors to complete exams for more complex disability claims—such as Gulf War Illness—according to VBA officials, but VBA does not conduct targeted reviews specifically to assess the quality of the exam reports completed for these exams. VBA data show that exam reports for selected complex claims were returned to examiners for correction or clarification at about twice the rate that exam reports were returned overall. Disability medical examiners told GAO that these types of exams can be challenging. Without specifically assessing how well contractors perform on exams for complex claims, VBA is missing an opportunity to identify actions that could help ensure veterans receive high quality exams and that exam reports are completed correctly.

Why GAO Did This Study

VBA reported that the number of disability medical exams completed by contractors rose from about 180,000 to nearly 1.1 million from fiscal years 2012 through 2020. According to VBA officials, VA awarded new contracts in 2018 worth up to $6.8 billion over 10 years' duration to private sector disability medical exam providers.

GAO was asked to review VBA's planning and oversight related to contracted disability exams. This testimony examines (1) VBA's plans for allocating exam workloads in the future, and (2) how VBA assesses the quality of contractors' exams for selected complex claims. GAO reviewed VBA exams data and documents and interviewed officials from VBA, VHA, and exam contractors, as well as staff in three VHA medical centers and VBA regional offices, selected for a range of exam workloads and experience with complex exams. GAO assessed VBA efforts against sound planning practices and internal control standards.

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GAO is recommending that VBA (1) develop plans for its allocation of disability medical exam workloads that incorporate sound planning practices, and (2) assess the quality of exam reports completed by contractors for selected complex claims.

Recommendations for Executive Action

Agency Affected Recommendation Status
Veterans Benefits Administration 1. The Under Secretary for Benefits, in consultation with the Under Secretary for Health, should develop and document plans for the allocation of disability medical exam workloads among VHA medical centers and VBA contractors. Such plans should incorporate sound planning practices such as (1) identifying goals and establishing a strategy, (2) developing activities and timelines, (3) coordinating and communicating with stakeholders, and (4) conducting a risk assessment. (Recommendation 1)
VA provided technical comments on our testimony, which we incorporated, as appropriate. We will monitor the agency's progress in implementing this recommendation.
Veterans Benefits Administration 2. The Under Secretary for Benefits should develop a process to assess the quality of exam reports for complex claims completed by contractors. For example, VBA could periodically conduct special focus reviews of exam reports completed by contractors for complex claims such as traumatic brain injury, military sexual trauma, and Gulf War Illness. (Recommendation 2)
VA provided technical comments on our testimony, which we incorporated, as appropriate. We will monitor the agency's progress in implementing this recommendation.

Full Report

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