Compensation

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Veterans Affairs

View on Federal Program Inventory

PROGRAM METRICS

$157,453 M

in FY 2025 outlays, with a

98.5%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2023 - 09/2024


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-0.93

Causes

Overpayments were within the agency’s control and occurred when the program failed to access the data/information needed to validate correct beneficiary award amounts. In these instances, the Veteran received a higher payment than owed for their disability benefit or dependency(spouse/children) status. Underpayments occurred when the program failed to access the data/information needed to validate correct beneficiary award amounts. In these instances, the Veteran received a lower payment than owed for their disability benefit or dependency (spouse/children) status. Payments were considered unknown when VA had missing or insufficient documentation required to validate whether a payment was proper or improper. Unknown payments occurred for a multitude of reasons, but generally, VA was unable to determine if the Veteran was entitled to a higher or lower payment. In all cases with unknown payments, VA needed additional supporting documentation to make the determination.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $480.74 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $480.74 M

Underpayment root cause Underpayment amount
Amount of underpayments $385.85 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $385.85 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $1,480.98 M

Prevention

The Compensation program is reporting improper and unknown payments for the first time since FY 2020. During FY 2025, the program took actions to review and identify errors in claims processing that would result in improper and unknown payments and provided training to reduce future errors. Compensation also implemented cross-enterprise sharing actions by sharing best practices and root cause error information available across relevant VBA offices. The program also developed a corrective action plan to correct the causes of improper and unknown payments and prevent future improper and unknown payments for implementation in FY 2026. Actions planned regarding cross-enterprise sharing include sharing best practices and root cause error information across relevant VBA offices, and using focus groups to identify error trends and corrective strategies to reduce improper and unknown payments. These actions are designed to reduce overpayments and underpayments attributed to failure to access data/information and unknown payments by determining if a payment is proper or improper. The estimated completion date is September 30, 2026. Actions planned regarding audits include strengthening oversight and mitigating payment risk through randomized reviews of in-progress and completed claims to ensure alignment with established policies and procedures. These actions are designed to reduce overpayments and underpayments attributed to failure to access data/information and unknown payments by determining if a payment is proper or improper. The estimated completion date is September 30, 2026. Actions planned regarding training include staff evaluation of training programs to ensure content is aligned with policy and procedures to improve accuracy in claims processing and lower improper payments. The program will also include a competency-based training system to align training and assessments with the technical competencies essential for a designated claims processor role. These actions are designed to reduce overpayments and underpayments attributed to failure to access data/information and unknown payments by determining if a payment is proper or improper. The estimated completion date is September 30, 2026.
The Compensation program is reporting improper and unknown payments for the first time since FY 2020. All of the program's improper and unknown payments were caused by human error in processing claims due to failure to access data/information. This resulted in errors regarding Veterans entitled to a higher or lower benefit payment than received, unprocessed claims, incorrect approval or denial of benefits based on the service connection, and dependent status (spouse/children). Based on these errors, the projected improper and unknown payments for FY 2025 was $2.35 billion. The actions planned and taken will mitigate the human error to prevent the issue before it arises and/or resolving the issue before.

Since the Compensation program is reporting improper and unknown payments for the first time since FY 2020, VA is unable to compare FY 2024 to FY 2025 for effectiveness of corrective actions previously taken. However, the program developed a corrective action plan to correct the causes of improper and unknown payments identified in FY 2025, placing emphasis on monetary loss the largest proportion of improper payments. The actions taken and planned will prevent the issues causing improper and unknown payments before they are made.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit, Cross Enterprise Sharing, Training Audit, Cross Enterprise Sharing, Training
Underpayments Audit, Training Audit, Cross Enterprise Sharing, Training
Unknown payments Audit,Training Audit,Cross Enterprise Sharing,Training

Eligibility element/information needed Description of the eligbility element/information
Death Date of death of the recipient/beneficiary
Dependency Describes who the recipient/beneficiary relies on as a primary source of support
Financial The financial position or status of a beneficiary, recipient, or their family

Additional information

Since the Compensation program is reporting improper and unknown payments for the first time since FY 2020, the program did not have a PIIA Payment Integrity Information Act of 2019 corrective action plan developed in FY 2024 for implementation in FY 2025. However, the Compensation program has and continues to implement corrective actions and mitigation strategies that reduce improper and unknown payments. The Compensation program was under the 10% compliance threshold established by the Payment Integrity Information Act of 2019. The program expects continued positive impact of these actions on its improper and unknown payment rate.

Reduction target

1.4 %

While any amount of improper payment is unacceptable, VA continues to make progress in identifying and preventing these from occurring. Improper
payments are problematic and VA remains committed to process improvements that will ensure VA is providing accurate and timely benefits to Veterans
and their dependents through effective implementation of corrective actions and oversight.

At this time, VA is not aware of additional program needs. VA has not requested additional resources in the most recent budget submission to establish
and maintain internal controls to reduce improper payments and unknown payments and maintain payment integrity.

This program was determined to be at significant risk of improper and unknown payments in its FY 2024 risk assessment and is reporting improper and
unknown payments for the first time since FY 2020. In FY 2026, VA's Senior Accountable Official and program personnel will be focused on prevention
and recovery of overpayments as appropriate. VA’s executive managers to include the Senior Accountable Official for the Compensation Program and
program personnel will be held accountable through annual performance criteria contained within their performance plans. Performance criteria will be
unique to and inclusive of all their duties. Depending on each employee’s responsibilities, duties can include preventing improper and unknown
payments through effective internal controls, recovering overpayments if appropriate, and implementing remediation efforts for known causes of improper
and unknown payments. State and local governments are not involved in the execution of this program.

$385.85 M