A recent report from the U.S. Government Accountability Office (GAO) has identified significant shortcomings in the Department of Veterans Affairs’ (VA) oversight of contracted medical examinations for veterans filing disability claims. The GAO found that while the VA relies heavily on these contracted exams, which totaled over 3 million at a cost exceeding $5 billion in fiscal year 2024, its systems for ensuring the quality of these examinations are incomplete. The report highlights issues with financial incentive calculations, a backlog in crucial quality reviews, and a lack of direct feedback mechanisms from the individuals conducting the exams.
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The GAO’s investigation revealed that the VA’s Medical Disability Examination Office (MDEO), responsible for overseeing these contracted exams, miscalculated financial incentives paid to contractors. These incentives are intended to reward high-quality work, but due to manual data entry errors and a lack of procedures to verify calculations, the VA overpaid contractors by more than $2 million in the first quarter of fiscal year 2024. The report emphasizes that without validated procedures for accuracy, the VA risks continued financial mismanagement of these performance-based payments. This directly impacts the effective allocation of funds intended to improve services for veterans.
Furthermore, the GAO found that the MDEO has not adhered to its own schedule for conducting “Special Focused Reviews” of exams related to complex claims. These reviews, which are meant to occur biennially, are critical for monitoring changes in exam quality and assessing the impact of previous corrective actions. As of July 2025, reviews for claims involving traumatic brain injury, military sexual trauma, and Gulf War Illness were either overdue by nine months or had not yet been scheduled. This delay hinders the VA’s ability to proactively identify and address quality issues in these higher-risk claim categories, potentially affecting the accuracy of disability determinations for veterans with complex conditions.
A significant gap identified by the GAO is the MDEO’s failure to collect feedback directly from the contracted examiners themselves. While the VA gathers input from veterans and contractor officials, it relies on contractors to relay feedback from their examiners. However, contractors indicated they rarely forward this information to the MDEO. Examiners reported that they often have issues they would prefer to raise directly with the MDEO due to conflicting or unhelpful responses from their contractors. The absence of a direct feedback channel from examiners means the MDEO misses a crucial perspective that could help identify potential quality challenges and inform decision-making processes. This could lead to a less informed approach to ensuring the quality of contracted disability exams.
In response to these findings, the GAO has made four recommendations. These include developing and implementing written procedures to validate financial incentive calculations, completing the Special Focused Reviews for complex claims on a biennial basis, and establishing a mechanism to collect and address direct feedback from examiners regarding exam quality. The VA has concurred with three of these recommendations and expressed agreement in principle with the recommendation concerning the completion of reviews for complex claims, stating that it believes the recommendation is warranted. These recommendations aim to strengthen the VA’s oversight processes, improve the accuracy of financial disbursements, and ultimately enhance the quality of disability examinations provided to veterans.
Article by Mel Anara, based upon information from the U.S. Government Accountability Office
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