The Veterans Benefits Administration (VBA) within the Department of Veterans Affairs (VA) has an automation system designed to streamline claims processing for death benefits, but a new watchdog report reveals that the system has led to some benefits being incorrectly processed.
The new report, from the VA Office of Inspector General (OIG), explains that VBA launched a system called pension automation in 2020. The system extracts data from documents such as a death certificate to generate decisions and notification letters for claims.
In its review of the system, the VA OIG analyzed a sample of 150 claims for veterans’ death benefits completed by automation from Jan. 5, 2023, to March 31, 2024.
“The OIG estimated that 10,300 of 12,500 claims (83 percent) contained an error, of which about 2,000 claims (16 percent) resulted in about $1.9 million in underpayments to survivors,” the report says.
“Although the automation system correctly processed most burial allowances (90 percent) and plot allowances (95 percent), the system did not consistently process transportation reimbursements accurately,” it adds. “The team estimated that 9,800 transportation claims (79 percent) were improperly processed during the review period.”
Transportation reimbursements cover the cost of transporting the veteran’s remains to their final resting place.
The OIG team identified three types of errors: the automation system prematurely denied transportation claims that should have been transferred to a claims processor to review the benefit; some transportation claims were never reimbursed; and the notification letter did not provide a decision on transportation for some claims.
In one example, the OIG said that a veteran died and their surviving spouse submitted a claim for burial and plot allowances. Although the survivor marked “no” for transportation, they submitted an itemized funeral receipt showing they incurred $735 in transportation costs.
The automation system correctly paid the survivor for the burial and plot allowances, but it did not off-ramp the claim to a claims processor or notify the survivor that they checked the wrong box. Therefore, the survivor could be entitled to $735 for transportation expenses.
These errors occurred because the automation system did not have rules to ensure the proper processing of transportation benefits, the OIG team determined.
Additionally, the OIG said that the errors occurred in part due to a discrepancy in VBA policy, which “potentially led to underpayments to claimants.”
The OIG made two recommendations to the VBA. “The first was to update the relevant sections on transportation expenses in the VBA’s Adjudication Procedures Manual to align with each other, and the second was to ensure automation is consistent with the policy for processing this benefit,” the report says.
The VBA concurred with both recommendations and provided action plans. Additionally, VBA submitted three enhancement requests to the Office of Information and Technology “to ensure automation of transportation reimbursements is consistent with procedures.”