Watchdog rebukes VA over failure to refund $110M in medical fees

A federal watchdog on Wednesday criticized Veterans Affairs leaders for failing to refund millions of dollars in canceled medical co-pay charges to veterans, despite knowing about the problem for years.

The reprimand from the Office of Special Counsel, or OSC, 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.

In messages to OSC, VA officials acknowledged conducting a recent review into the problem and blamed it on staffing issues. They pledged to “stay current with refund requests and work the backlog as time allows.”

But OSC officials said department leaders were aware of the overdue refunds as far back as 2020 and have yet to adequately address the problem.

“Saying you should develop a plan is not a plan,” Special Counsel Hampton Dellinger said in a statement. “I am very concerned with the lack of specificity in the VA’s findings and the absence of any real actions to timely reimburse veterans for money they’re owed.”

At issue are medical co-payment charges that are waived or canceled department processors. That can take place for numerous reasons, including financial hardship considerations, a change in a veteran’s service-connected condition or simple accounting errors.

Federal law requires that VA refund the amount of any co-payment incorrectly charged. But according to OSC, an internal department audit showed that between 2012 and 2020, more than 970,000 veterans were owed a combined $110 million in potential refunds, but were never paid.

Dellinger said he will continue pursuing the issue to force VA action, while staying in contact with officials to see if they develop a reasonable repayment plan.

VA officials did not respond to requests for comment. Multiple senior officials are expected to step down early next week as part of the transition to the new White House administration. But OSC officials said this problem has spanned at least three different presidential administrations.