Blood Money

Did the VA Pay Out Bonuses for Screwing Veterans?

The VA health care system has so many perverse incentives that it may have actually given rewards to those who treated veterans the worst.

Matt Eich/Getty

As the scandal in the Department of Veterans Affairs widens, new attention is being paid to the bonuses doled out to the leaders of VA hospitals where dozens of vets died—and whether the promise of performance pay led administrators to cover up how long their patients were waiting for care. There’s no proof yet that the VA employees who placed veterans on secret waiting lists—where some of them died in line—were motivated by bonuses. But multiple officials at the institutions under investigation have received tens of thousands in bonuses in the recent past.

Though the bonuses are designed to reward exceptional performance, they can potentially create perverse incentives. Pay rewards tied to reporting metrics that are susceptible to manipulation could be encouraging VA executives and employees to focus on massaging statistics—at the expense of providing real services for veterans.

“People respond to the incentives put in front of them whether they are monetary, career, or otherwise,” said Phil Carter, a former top Pentagon official who’s now a senior fellow at the Center for a New American Security, studying veterans’ issues.

“What you measure is going to drive performance. If you measure the wrong things, like wait times versus patient outcomes, you also drive the organization to do the wrong thing,” Carter said. “It’s still too early to tell whether that’s the case… the incentives and bonuses give a good roadmap for where to direct the investigation.”

Carter said that he wasn’t opposed to bonuses per se, but concerned that not enough attention had been paid to the possibility that some “incentives produce behaviors that don’t align with good outcomes for veterans.”

According to one VA employee who works as an administrator at an Indianapolis center, “Everybody in the chain down to the scheduler is eligible for performance bonuses.” The pressure to earn those bonuses may have motivated both the individual VA schedulers and their bosses, who were evaluated in part based on their subordinates’ performance.

A scheduler at the New Hampshire VA testified to that effect in 2012 before a Senate subcommittee, saying that employees there submitted false reports of wait times for veterans to help reach performance goals that triggered bonuses for executives.

Dysfunction in the VA scheduling system has been the target of watchdog reports for years—without prompting an overhaul. But the department had been slow to address the problem until recent claims that the wait times may have contributed to veterans’ early deaths. So far the VA has acknowledged that 23 have died due to delayed medical care in recent years.

The latest case of a VA facility placing veterans on a secret waiting list centers on a facility in Cheyenne, Wyoming. This time there appears to be a smoking gun.

An email allegedly written by David Newman, an employee of the Cheyenne VA, reads like a how-to manual for cooking the books.

In the email, obtained by The Daily Beast, Newman explains that the important thing is to make it seem like no veteran is waiting longer than 14 days before seeing a medical professional, regardless of when their actual appointment is scheduled.

Newman writes, “Yes, it is gaming the system a bit. But you have to know the rules of the game you are playing, and when we exceed the 14-day measure, the front office gets very upset, which doesn’t help us.” Coaching his co-workers, Newman explains that manipulating records to conceal long wait times for veterans seeking medical treatment is essential for staying in the bosses good graces and keeping off the “bad boys list.”

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The leaked email suggests that, at the Cheyenne VA at least, cheating the records wasn’t a matter of laziness or misunderstanding, it was a deliberate effort to please the higher-ups by submitting false reports. Whether or not the local VA bosses knew that phony reports were being submitted, or encouraged them, it’s clear such steps were taken with them in mind. And keeping the wait times down may have been a lucrative source of supplemental income for VA employees involved.

Newman was placed on leave last Friday when the email was published and the VA promised an investigation, but for some it’s too little too late.

“Faux outrage at its finest,” is how Rep Jeff Miller, chairman of the House Committee on Veterans’ Affairs, described VA Secretary Eric Shinseki’s reaction to the allegations about the Cheyenne VA. Though Shinseki has promised “swift and immediate” action for any VA officials involved in falsifying wait times, Miller says the VA has known about these problems since last year when the Fort Collins clinic, which is part of the same Wyoming complex as Cheyenne, was called out for doctoring records in an official report.

Even before the Fort Collins investigation, a 2012 report by the Government Accountability Office described an oversight failure and a pattern of noncompliance with scheduling practices across the VA system.

In the past, the VA attributed wait time problems to lack of training and employee misunderstandings. But with three separate facilities seemingly engaged in similar methods of cheating the issue appears to be far larger than individual mistakes.

The director of the Cheyenne VA Medical Center, which has now had two separate reports of falsifying records to hide delays, explained the first report of secret waiting lists at her facilities by saying, “It all goes back to we misunderstood the scheduling.” That was what Cynthia McCormack, the Cheyenne VA director, told The Coloradoan last week, before Newman’s email leaked.

McCormack has not been publicly disciplined in any way, despite two separate sources of evidence showing corruption at her facilities. She made over $11,000 in bonus pay in 2012, records show.

Sharon Helman, former director of the Phoenix VA, the first facility accused of keeping a secret waiting list that may have led to the preventable deaths of veterans, received more than $9,000 in bonus pay in 2013. The new incoming director for Phoenix, Steven Young, appears to have made even more in his best years—over $10,000 in bonus pay 2012 and more than $15,000 in 2010.

It’s not clear exactly what these executives did to earn their bonuses, or whether the rewards were directly tied to wait times, as whistleblowers alleged was true at other VA facilities. The executive bonuses were delivered to VA officials despite repeated calls to ban them from Rep. Jeff Miller and others.

Miller said in February, “Until we have complete confidence that VA is holding executives accountable, rather than rewarding them for mistakes, no one should get a performance bonus, period.”