Pappas and Bergman Call on the VA to Reform VA’s Debt Collection Process Hurting Veterans

Following a troubling hearing held last month by the Oversight and Investigations Subcommittee on the House Veterans' Affairs Committee, Chairman Chris Pappas (NH-01) and Ranking Member Jack Bergman (MI-01) led a bipartisan letter calling on the VA to take immediate action to change the VA overpayment system, which generated and then collected $1.6 billion of debt for our veterans in the last fiscal year. Overpayments as a result of mistakes in disability payouts, changes in eligibility, or simple accounting errors have resulted in financial hardships of hundreds of thousands of veterans, especially for those living on fixed incomes.

As the letter reads, "Last month's Oversight and Investigations Subcommittee hearing, ‘Preventing Harm to Veterans: Examining VA's Overpayments and Debt Collection Practices,' included valuable testimony and candid assessments of the challenges VA faces in reducing overpayments."

It goes on to say, "We acknowledge that VA cannot solve this problem overnight. However, as you are aware, each day that reforms are not realized is another day that a veteran may receive an overpayment and potentially face financial problems as a result."

The letter specifically requests that the VA to provide information on these additional items:

• Why there is such a limited time veterans to prevent garnishment of benefits or pay debts.
• Why the VA is not working with Veterans Service Organizations to improve the complex debt collection process.
• To provide a timetable for a new electronic system which would help reduce overpayment miscommunications.
• Their plan to resolve long standing issues previously identified such as monthly audits to avoid the creation of debt for our veterans.

The letter was signed by five other members of the Committee, and a full copy of the letter can be read below. The VA was asked to respond by October 23, 2019.

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Full text of the letter:

Dear Mr. Rychalski:

We write to discuss important steps the Department of Veterans Affairs (VA) should take to help prevent frustration, confusion, and financial harm resulting from overpayments and debt collection practices.

Last month's Oversight and Investigations Subcommittee hearing, "Preventing Harm to Veterans: Examining VA's Overpayments and Debt Collection Practices," included valuable testimony and candid assessments of the challenges VA faces in reducing overpayments.Testimony by you and others also described important opportunities to improve notification and collections of outstanding debts owed by veterans. We appreciate your commitment to ensuring the Department does everything in its power to avoid creating veteran debt and establishing an improved collections process designed to protect a veteran's financial well-being.

We would like the Department to provide additional information on the following items:

• Limited Time for Preventing Garnishment of Benefits or Paying Debts. Witnesses testified that the first 30 days in the debt collection process are crucial for beneficiaries to receive protection from garnishment. However, according to some, 30 days is often insufficient for a beneficiary to complete the actions required by VA for protection. We would like to understand why the Department will stop garnishment of active benefits only if a waiver request is received within 30 days, even though the veteran has 180 days to apply for a waiver.
  
  Further, many Veterans Benefits Administration (VBA) overpayments accumulate over months or years and can total thousands of dollars. However, the Department provides a beneficiary only 30 days to repay the overpayment, request a waiver, contest the debt, or agree to a payment plan before considering the debt delinquent if the beneficiary does not have an active benefit. By contrast, the Veterans Health Administration (VHA) allows roughly 90 days for beneficiaries to make payments before a debt is determined to be delinquent. We, therefore, would like to understand why VBA allows a shorter time period for payment.
  
• Working with Veterans Service Organizations. We were concerned to hear from the witnesses from multiple veteran service organizations (VSO) that VA has not engaged them in efforts to improve the clarity and effectiveness of its debt letters. This appears to be in conflict with the Department's testimony. Working with VSOs can be particularly helpful in refining the Department's debt letters, as these organizations provide valuable help on a daily basis to veterans navigating VA's complex debt collection process. We would like the Department to provide more detailed information on its efforts over the past two years to clarify its debt letters, including the changes made to the letters and the specific VSOs that were consulted on such changes. As part of this, please provide information on VA's plan for working with the VSOs.
  
• Timetable for New Electronic Systems. It was encouraging to hear that the Department is pursuing improvements to help communication with veterans regarding overpayments and debt collections, such as offering electronic copies of debt notices. Please provide specific information, including timeframes and milestones, for establishing new systems to allow: (1) access to VHA Patient Statements electronically; (2) access to VBA debt notifications for all relevant VBA business lines electronically; and (3) consolidation of all debt information in one electronically accessible location.
  
• Avoiding the Creation of Veteran Debt. We appreciate your candor in recognizing the Department's deficiencies in how it creates debt for the beneficiary. As you stated during the hearing, ultimately, you are responsible for reducing the overpayments. These longstanding issues have been the subject of prior hearings in at least two other subcommittees – Disability Assistance and Memorial Affairs (DAMA), and Economic Opportunity. Please provide information supporting: (1) the Department's efforts to switch to a monthly audit to identify veterans in receipt of both drill pay and disability compensation, (2) the Department's efforts to allow beneficiaries to instantly make all dependency changes electronically through the eBenefits system, and (3) the Department's efforts to recoup educational benefit overpayments from institutions rather than the veterans who never receive, nor have access to, the overpayment monies in the first place.

We acknowledge that VA cannot solve this problem overnight. However, as you are aware, each day that reforms are not realized is another day that a veteran may receive an overpayment and potentially face financial problems as a result.

Thank you for your attention to our request for information. We ask that you provide a response by October 23, 2019. Please contact Peter Tyler, Majority Staff Director, House Veterans' Affairs Committee, Subcommittee on Oversight and Investigations, at 202-225-9756, with any questions.