Government Watchdog Accuses VA of Failing to Refund Millions to Veterans

The federal watchdog agency known as the Office of Special Counsel (OSC) has accused the Department of Veterans Affairs of failing to refund over $100 million in “voided medical co-payments” to veterans. The OSC also accuses the VA of being aware of the coppay issue for several years.
According to some published sources, the OSC says the VA “lacks adequate procedures” to address paying back the millions in copays still due back to veterans in the VA healthcare system.
VA officials acknowledge the problem, noting a commitment to “work the backlog as time allows,” but acknowledgment alone is not enough for some.
That said, Air Force Times reports that since 2019, “VA staff have reviewed 32 million charges and refunded vouchers to more than 3 million veterans.”
What Is Going Wrong at the Department of Veterans Affairs?
The controversy stems from medical co-payment charges VA beneficiaries had either waived or canceled for any number of qualifying reasons, including financial hardship, changes in a veteran’s service-connected condition, or accounting errors.
The VA is meant to refund such payments but between 2012 and 2020, VA internal audits produced evidence of more than 970,000 veterans being owed a combined $110 million that was never paid.
Some at the OSC feel the VA’s apparent lack of a concrete plan to address this backlog is unacceptable. The VA claims steps are being taken to resolve the issue, which has persisted across multiple presidential administrations, highlighting what some believe is a systemic problem within the VA’s refund process.
Understanding the Co-payment System and Refund Process
The VA’s medical co-payment system is designed to share healthcare service costs with veterans with non-service-connected conditions and meet certain income thresholds. Co-payments are applied to various services, including doctor visits, prescriptions, and hospital stays.
However, there are times when co-payments are waived or canceled. Veterans facing financial hardship can apply for co-payment exemptions. Changes in a veteran’s service-connected disability status can also lead to co-payment adjustments. Additionally, clerical errors or billing discrepancies can necessitate refunds.
When a co-payment is voided, the VA legally must refund the amount to the veteran. This process involves verifying the cancellation, calculating the refund, and issuing the payment. The backlog indicates a breakdown in this process, leaving many veterans without the refunds they are entitled to.
The Impact on Veterans
The failure to refund these co-payments has a direct financial impact on veterans, many of whom live on fixed incomes or struggle with medical expenses. These unrefunded amounts can create a significant economic burden, particularly for those who rely on VA healthcare services for chronic conditions.
Addressing the backlog of refunds presents several challenges for the VA. The sheer volume of cases requires significant resources and manpower to process. Identifying and verifying eligible veterans, calculating accurate refund amounts, and issuing payments efficiently are complex tasks that demand a coordinated effort.
What will the Department of Veterans Affairs do to correct the multi-million dollar refund discrepancy? According to the Air Force Times report, the reprimand from the Office of Special Counsel “comes after a whistleblower report that department administrators had ‘no agency policies, procedures, or plans’ to get the backlog of repayments addressed despite being aware of the problem.”
How much longer does the VA expect veterans to wait?
About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.