VETERANS AFFAIRS

Sustained Management 

Attention Needed to 

Address Numerous IT 

Challenges 

Statement of Valerie C. Melvin, Director 

Information Technology

Testimony 

Before the Committee on Veterans' 

Affairs, U.S. Senate

For Release on Delivery 

Expected at 2:30 p.m. ET

Wednesday, June 22, 2016

GAO-16-762T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-762T, a testimony 

before the Committee on Veterans’ Affairs, 

U.S. Senate

June 22, 2016

VETERANS AFFAIRS

Sustained Management Attention Needed to 

Address Numerous IT Challenges

What GAO Found

In February 2015, GAO designated Veterans Affairs (VA) health care as a highrisk area based on its concerns about the department’s ability to ensure the 

quality and safety of veterans’ health care in five broad areas, one of which was 

information technology (IT) challenges. Of particular concern at that time was 

the failed modernization of an outpatient appointment scheduling system, 

suspended development of a system that was to electronically store and retrieve 

information about surgical implants, and the extent of system interoperability—

the ability to exchange information—with the Department of Defense (DOD), 

which present risks to the timeliness, quality, and safety of VA health care. 

Subsequent to the designation of VA health care as high risk, GAO completed 

evaluations that identified additional IT management challenges at VA.

• In August 2015, GAO reported on VA’s efforts to achieve electronic health 

record interoperability with DOD and noted that (1) the two departments had

engaged in several near-term efforts to expand interoperability and (2) VA 

and DOD had moved forward with plans to separately modernize their

electronic health record systems. However, of significant concern was that 

VA (and DOD) had not identified outcome-oriented goals and metrics that 

would clearly define what it aims to achieve from its efforts. GAO 

recommended that VA develop goals and metrics, among other things. VA 

concurred with the recommendations and stated that it has initiated actions in 

response.

• VA had made progress in developing and implementing its Veterans Benefits 

Management System (VBMS), with deployment of the initial version of the 

system. However, in September 2015, GAO reported that the development 

and implementation of the system was ongoing and noted three areas that 

could benefit from increased management attention: cost estimating, system 

availability, and system defects. The report also noted that VA had neither

conducted a customer satisfaction survey nor developed goals for improving 

the system. GAO recommended that VA develop a plan with a time frame 

and a reliable cost estimate for completing VBMS, establish goals for system 

response time, minimize the incidences of high and medium severity system 

defects for future VBMS releases, assess user satisfaction, and establish 

satisfaction goals to promote improvement. VA agreed with the 

recommendations and noted steps it was taking to address them.

• Due to recent increases in utilization of VA care in the community, the 

department has had difficulty processing claims in a timely manner. In May 

2016, GAO reported that VA officials and claims processing staff indicated 

that IT limitations, manual processes, and staffing challenges had delayed 

claims processing. The department had implemented interim measures to 

address some of the system’s challenges, but did not expect to deploy 

solutions to address all challenges, including those related to IT, until fiscal 

year 2018 or later. Further, VA did not have a sound plan for modernizing its 

claims processing system, which GAO recommended it develop. The 

department concurred with this recommendation and stated that it intended

to address the recommendation through the planned consolidation of its care 

in the community programs. View GAO-16-762T. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov.

Why GAO Did This Study

VA relies on IT to meet its mission and 

effectively serve the nation’s veterans. 

Over the past several years, the 

department has expended billions of 

dollars to manage and modernize its 

information systems. However, VA has 

experienced challenges in managing its 

IT, raising questions about the 

effectiveness of its IT operations. GAO 

has previously reported on a number of 

the department’s IT initiatives.

This statement summarizes results 

from key GAO reports issued between 

2010 and 2014 highlighting IT 

challenges that have contributed to

GAO’s designation of VA health care as 

a high risk area. It also describes 

additional challenges that GAO more 

recently identified in 2015 and 2016

that are related to increasing the 

electronic exchange of VA’s health 

records with those of DOD,

development and use of VBMS, and 

the department’s modernization of its 

health care claims processing system.

What GAO Recommends

GAO has made numerous 

recommendations to VA to improve the

modernization of its IT systems. Among 

other things, GAO has recommended

that VA address challenges associated 

with its efforts to modernize its 

electronic health record system to 

increase interoperability with DOD,

develop goals and metrics as a basis 

for determining the extent to which VA’s

and DOD’s modernized electronic 

health records systems are achieving 

interoperability, address shortcomings 

with VBMS planning and 

implementation, and develop a sound 

written plan for deploying its 

modernized claims processing system.

VA has concurred with these 

recommendations and has some 

actions ongoing. 
Letter

Page 1 GAO-16-762T 

Chairman Isakson, Ranking Member Blumenthal, and Members of the 

Committee:

I am pleased to be here today to testify on the Department of Veterans 

Affairs’ (VA) efforts to modernize its information technology (IT). As you 

know, the use of IT is crucial to helping VA effectively serve the nation’s 

veterans and, each year, the department expends billions of dollars on its 

information systems and assets.

However, over many years, VA has experienced challenges in managing 

its IT resources, raising questions about the effectiveness of its IT 

operations and its ability to deliver intended outcomes needed to help 

advance the department’s mission. We have previously reported on a 

number of the department’s IT initiatives.

As you requested, my testimony today summarizes results from a number 

of our key reports issued between 2010 and 2014 highlighting IT 

challenges that have contributed to our designation of VA health care as 

a high-risk area.1 It also describes additional challenges that we more 

recently identified in 2015 and 2016 that are related to increasing the 

electronic exchange of VA’s health records with those of the Department 

of Defense (DOD), development and use of the Veterans Benefits 

Management System (VBMS), and the department’s modernization of its 

health care claims processing system.2

For this testimony, we relied on our body of work that led to our 

designation of VA health care as a high risk area in 2015. In addition, we 

relied on our more recent reports issued since the high risk designation.

We also obtained and reviewed information on the department’s actions 

in response to our previous recommendations and the current status of IT 

management activities. The reports cited throughout this statement 

 1

GAO, High Risk Series: An Update, GAO-15-290 (Washington, D.C.: Feb. 11, 2015).

2

GAO, Electronic Health Records: Outcome-Oriented Metrics and Goals Needed to 

Gauge DOD’s and VA’s Progress in Achieving Interoperability, GAO-15-530 (Washington, 

D.C.: Aug. 13, 2015); Veterans Benefits Management System: Ongoing Development and 

Implementation Can be Improved; Goals Are Needed to Promote Increased User 

Satisfaction, GAO-15-582 (Washington, D.C.: Sept. 1, 2015); and Veterans’ Health Care: 

Proper Plan Needed to Modernize System for Paying Community Providers, GAO-16-353 

(Washington, D.C.: May 11, 2016).

Letter
Page 2 GAO-16-762T 

include detailed information on the scope and methodology for our 

reviews. The work upon which this statement is based was conducted in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

VA’s mission is to promote the health, welfare, and dignity of all veterans 

in recognition of their service to the nation by ensuring that they receive 

medical care, benefits, social support, and lasting memorials. It is the 

second largest federal department and, in addition to its central office 

located in Washington, D.C., has field offices throughout the United 

States, as well as the U.S. territories and the Philippines.

The department’s three major components—the Veterans Benefits 

Administration (VBA), the Veterans Health Administration (VHA), and the 

National Cemetery Administration (NCA)—are primarily responsible for 

carrying out its mission. More specifically, VBA provides a variety of 

benefits to veterans and their families including disability compensation, 

educational opportunities, assistance with home ownership, and life 

insurance. VHA provides health care services, including primary care and 

specialized care, and it performs research and development to improve 

veterans’ needs. Lastly, NCA provides burial and memorial benefits to 

veterans and their families.

Collectively, the three components rely on approximately 340,000 

employees to provide services and benefits. These employees work in 

167 VA medical centers, approximately 800 community-based outpatient 

clinics, 300 veterans centers, 56 regional offices, and 131 national and 90 

state or tribal cemeteries situated throughout the nation.

The use of IT is critically important to VA’s efforts to provide benefits and 

services to veterans. As such, the department operates and maintains an 

IT infrastructure that is intended to provide the backbone necessary to 

meet the day-to-day operational needs of its medical centers, veteranfacing systems, benefits delivery systems, memorial services, and all 

other IT systems supporting the department’s mission. The infrastructure 

is to provide for data storage, transmission, and communications 

requirements necessary to ensure the delivery of reliable, available, and 

Background

VA Relies Extensively on 

IT
Page 3 GAO-16-762T 

responsive support to all VA staff offices and administration customers, 

as well as veterans.

Toward this end, the department operates approximately 240 information 

systems, manages 314,000 desktop computers and 30,000 laptops, and 

administers nearly 460,000 network user accounts for employees and 

contractors to facilitate providing benefits and health care to veterans. 

These systems are used for the determination of benefits, benefits claims 

processing, patient admission to hospitals and clinics, and access to 

health records, among other services.

For example, VBA relies on VBMS to collect and store information such 

as military service records, medical examinations, and treatment records 

from VA, DOD, and private medical service providers. IT also is widely 

used and critically important to supporting the department in delivering 

health care to veterans. VHA’s systems provide capabilities to establish 

and maintain electronic health records that health care providers and 

other clinical staff use to view patient information in inpatient, outpatient, 

and long-term care settings. Specifically, the Veterans Health Information 

Systems and Technology Architecture, known as VistA, consists of many 

computer applications and modules that collect, among other things, 

information about a veteran’s demographics, allergies, procedures, 

immunizations, and medical diagnoses.

However, a number of VA’s systems are old. For example, our recent 

report on legacy systems used by federal agencies identified 2 of the 

department’s systems as being over 50 years old and among the 10 

oldest investments and/or systems that were reported by 12 selected 

agencies.3

• Personnel and Accounting Integrated Data (PAID)—This 53-year old 

system automates time and attendance for employees, timekeepers, 

payroll, and supervisors. It is written in Common Business Oriented 

Language (COBOL), a programming language developed in the late 

1950s and early 1960s, and runs on IBM mainframes. VA plans to 

replace PAID with a project called Human Resources Information 

System Shared Service Center in 2017.

 3

GAO, Information Technology: Federal Agencies Need to Address Aging Legacy 

Systems, GAO-16-468 (Washington, D.C.: May 25, 2016).
Page 4 GAO-16-762T 

• Benefits Delivery Network (BDN)—This 51-year old system tracks 

claims filed by veterans for benefits, eligibility, and dates of death. It is 

a suite of COBOL mainframe applications. VA has general plans to 

roll the capabilities of BDN into another system, but there is no firm 

date associated with this transition.

To address these obsolete systems that are in need of modernization or 

replacement, we recommended that the Secretary of Veterans Affairs 

direct the department’s Chief Information Officer (CIO) to identify and plan 

to modernize or replace legacy systems, as needed, and consistent with 

draft OMB guidance, including time frames, activities to be performed, 

and functions to be replaced or enhanced. VA concurred with our 

recommendation and stated that it is planning to retire PAID and BDN in 

2017 and 2018, respectively.

In 2014, VA issued its 6-year strategic plan, which emphasizes the 

department’s goal of increasing veterans’ access to benefits and services, 

eliminating the disability claims backlog, and ending veteran 

homelessness. According to the plan, the department intends to improve 

access to benefits and services through the use of improved technology 

to provide veterans with access to more effective care management. The 

plan also calls for VA to eliminate the disability claims backlog by fully 

implementing an electronic claims process that is intended to reduce 

processing time and increase accuracy. Further, the department has an 

initiative under way that provides services, such as health care, housing 

assistance, and job training, to end veteran homelessness. Toward this 

end, VA is working with other agencies, such as the Department of Health 

and Human Services, to implement more coordinated data entry systems 

to streamline and facilitate access to appropriate housing and services.

VA reported spending about $3.9 billion to improve and maintain its IT 

resources in fiscal year 2015. Specifically, the department reported 

spending approximately $548 million on new systems development 

efforts, approximately $2.3 billion on maintaining existing systems, and 

approximately $1 billion on payroll and administration. For fiscal year 

2016, the department received appropriations of about $4.1 billion for IT.

Further, for fiscal year 2017, the department’s budget request included 

nearly $4.3 billion for IT. The department requested approximately $471 

million for new systems development efforts, approximately $2.5 billion for 

maintaining existing systems, and approximately $1.3 billion for payroll 

and administration. In addition, in its 2017 budget submission, the 
Page 5 GAO-16-762T 

department requested appropriations to make improvements in a number 

of areas, including:

• veterans’ access to health care, to include enhancing health carerelated systems, standardizing immunization data, and expanding 

telehealth services ($186.7 million);

• veterans’ access to benefits by modernizing systems supporting 

benefits delivery, such as VBMS and the Veterans Services Network

($236.3 million);

• veterans’ experiences with VA by focusing on integrated service 

delivery and streamlined identification processes ($171.3 million);

• VA employees’ experiences by enhancing internal IT systems ($13 

million); and

• information security, including implementing strong authentication, 

ensuring repeatable processes and procedures, adopting modern 

technology, and enhancing the detection of cyber vulnerabilities and 

protection from cyber threats ($370.1 million).

VA’s CIO has recently initiated an effort to transform the focus and 

functions of the Office of Information and Technology (OI&T),4 in 

response to the Secretary’s goal of achieving a more veteran-focused 

organization. The CIO’s transformation strategy, initiated in January 2016, 

calls for OI&T to focus on stabilizing and streamlining processes, 

mitigating weaknesses highlighted in GAO assessments, and improving 

outcomes by institutionalizing a new set of IT management capabilities.

As part of this transformation, the CIO began transitioning the oversight 

and accountability of IT projects to a new project management process 

called the Veteran-focused Integration Process in January 2016, in an 

effort to streamline systems development and the delivery of new IT 

capabilities. The CIO also intends to establish five new functions within 

OI&T:

• The enterprise program management office is to serve as OI&T’s 

portfolio management and project tracking organization.

 4

OI&T provides IT services across VA and manages the department’s IT assets and 

resources. The office is headed by VA’s CIO. 

VA’s CIO Has Initiated a 

Transformation of the IT 

Organization
Page 6 GAO-16-762T 

• The account management function is to be responsible for managing 

the IT needs of VA’s major components.

• The quality and compliance function is to be responsible for 

establishing policy governance and standards and ensuring 

adherence to them.

• The data management organization is expected to improve both 

service delivery and the veteran experience by engaging with data 

stewards to ensure the accuracy and security of the information 

collected by VA.

• The strategic sourcing function is to be responsible for establishing an 

approach to fulfilling the agency’s requirements with vendors that 

provide solutions to those requirements, managing vendor selection, 

tracking vendor performance and contract deliverables, and sharing 

insights on new technologies and capabilities to improve the 

workforce knowledge base.

According to the CIO, the transformation strategy is expected to be 

completed by the first quarter of fiscal year 2017, although the vast 

majority of the plan, including establishing the five new functions, is to be 

executed by the end of fiscal year 2016.

In February 2015, we designated VA health care as a high-risk area. 

Among the five broad areas contributing to our determination was the 

department’s IT challenges.5 Of particular concern was the failed 

modernization of a system, suspended development of another system, 

and the extent of system interoperability—the ability to exchange 

information—with DOD, which present risks to the timeliness, quality, and 

safety of VA health care.

We have reported on the department’s failed attempts to modernize its 

outpatient appointment scheduling system, which is about 30 years old. 

Among the problems cited by VA staff responsible for scheduling 

appointments are that the system requires them to use commands 

requiring many keystrokes and that it does not allow them to view multiple 

 5

The remaining four areas are ambiguous policies and inconsistent processes, inadequate 

oversight and accountability, inadequate training for VA staff, and unclear resource needs 

and allocation priorities. 

IT Challenges 

Contributed to 

Designation of VA 

Health Care as High 

Risk
Page 7 GAO-16-762T 

screens at once. Schedulers must open and close multiple screens to 

check a provider’s or a clinic’s full availability when scheduling a medical 

appointment, which is time-consuming and can lead to errors.

In addition, we reported in May 2010 that after spending an estimated 

$127 million over 9 years on its outpatient scheduling system project, VA 

had not implemented any of the planned system’s capabilities and was 

essentially starting over by beginning a new initiative to build or purchase 

another scheduling system.6 We also noted that VA had not developed a 

project plan or schedule for the new initiative, stating that it intended to do 

so after determining whether to build or purchase the new application. We 

recommended that the department take six actions to improve key 

systems development and acquisition processes essential to the second 

outpatient scheduling system effort. The department generally concurred 

with our recommendations, but as of May 2016, had not addressed four 

of the six recommendations.

Further, in January 2014, we reported that the inability to electronically 

share data across facilities had led VA to suspend the development of a 

system that would have allowed it to electronically store and retrieve 

information about surgical implants (including tissue products) and the 

veterans who receive them nationwide.7 Having this capability would be 

particularly important in the event that a manufacturer or the Food and 

Drug Administration ordered a recall on a medical device or tissue 

product because of safety concerns. In the absence of a centralized 

system, at the time of our report, VA clinicians tracked information about 

implanted items using stand-alone systems or spreadsheets that were not 

shared across VA facilities, which made it difficult for the department to 

quickly determine which patients may have received an implant that was 

subject to a safety recall.

Additionally, we reported in February 2014 that VA and DOD lacked 

electronic health record systems that permit the efficient electronic 

 6

GAO, Information Technology: Management Improvements Are Essential to VA’s Second 

Effort to Replace Its Outpatient Scheduling System, GAO-10-579 (Washington, D.C.: May 

27, 2010).

7

GAO, VA Surgical Implants: Purchase Requirements Were Not Always Followed at 

Selected Medical Centers and Oversight Needs Improvement, GAO-14-146 (Washington, 

D.C.: Jan. 13, 2014).
Page 8 GAO-16-762T 

exchange of patient health information as military service members 

transition from DOD to VA health care systems.8 Since 1998, VA and 

DOD have undertaken a patchwork of initiatives intended to allow their 

health information systems to exchange information and increase 

interoperability. Among others, these have included initiatives to share 

viewable data in existing (legacy) systems, link and share computable 

data between the departments’ updated heath data repositories, and 

jointly develop a single integrated system.

In March 2011, the secretaries of the two departments announced that 

they would develop a new, joint integrated electronic health record 

system (referred to as iEHR). This was intended to replace the 

departments’ separate systems with a single common system, thus 

sidestepping many of the challenges they had previously encountered in 

trying to achieve interoperability. However, in February 2013, about 2 

years after initiating iEHR, the secretaries announced that the 

departments were abandoning plans to develop a joint system, due to 

concerns about the program’s cost, schedule, and ability to meet 

deadlines. The Interagency Program Office (IPO) reported spending 

about $564 million on iEHR between October 2011 and June 2013.

In place of the iEHR initiative, VA stated that it would modernize VistA, 

while DOD planned to buy a commercially available system. The 

departments stated that they would ensure interoperability between these 

updated systems, as well as with other public and private health care 

providers. Our February 2014 report noted that the departments did not 

substantiate their claims that it would be less expensive and faster than 

developing a single, joint system.9 We have also noted that the 

departments’ plans to modernize their two separate systems were 

duplicative and stressed that their decisions should be justified by 

comparing the costs and schedules of alternate approaches.10 We 

 8

GAO, Electronic Health Records: VA and DOD Need to Support Cost and Schedule 

Claims, Develop Interoperability Plans, and Improve Collaboration, GAO-14-302 

(Washington, D.C.: Feb. 27, 2014).

9

GAO-14-302.

10See GAO’s Action Tracker, a publicly available website that includes progress updates 

and assessments of the actions from GAO’s annual reports on reducing fragmentation, 

overlap, and duplication.
Page 9 GAO-16-762T 

therefore recommended that the departments should develop cost and 

schedule estimates that would include all elements of their approach (i.e., 

modernizing both departments’ health information systems and 

establishing interoperability between them) and compare them with 

estimates of the cost and schedule for the single-system approach. If the 

planned approach were projected to cost more or take longer, we 

recommended that they provide a rationale for pursuing such an 

approach.

VA and DOD agreed with our prior recommendations and stated that 

initial comparison indicated that the current approach would be more cost 

effective. However, as of June 2016, the departments have not provided 

us with a comparison of the estimated costs of their current and previous 

approaches. Moreover, with respect to their assertions that separate 

systems could be achieved faster, both departments have developed 

schedules that indicate their separate modernizations are not expected to 

be completed until after the 2017 planned completion date for the 

previous single-system approach.

To further highlight the department’s IT challenges, our most recent report 

in August 2015 on VA’s efforts to achieve electronic health record 

interoperability with DOD noted that the departments have engaged in 

several near-term efforts focused on expanding interoperability between 

their existing electronic health record systems.11 For example, the 

departments analyzed data related to 25 “domains” identified by the 

Interagency Clinical Informatics Board and mapped health data in their 

existing systems to standards identified by the IPO. The departments also 

expanded the functionality of their Joint Legacy Viewer—a tool that allows 

clinicians to view certain health care data from both departments in a 

single interface.12

 11GAO-15-530. 

12The Joint Legacy Viewer provides a real-time, integrated, categorized, and chronological 

view of electronic health record information contained in existing VA and DOD systems. 

For example, it allows both departments to share certain healthcare data (e.g., patient 

demographics, allergies, medications) in a viewable interface that is available to clinicians.

Recent Evaluations 

Have Identified 

Additional IT 

Challenges
Page 10 GAO-16-762T 

In addition, VA and DOD have moved forward with plans to modernize 

their respective electronic health record systems. For its part, VA has 

developed a number of plans for its VistA modernization effort (known as 

VistA Evolution), including an interoperability plan and a road map 

describing functional capabilities to be deployed through fiscal year 2018. 

According to the road map, the first set of capabilities was to be delivered 

in September 2014, and was to include access to the Joint Legacy 

Viewer, among other things. VA’s CIO has asserted that the department 

has continued to improve VistA. However, the CIO also recently indicated 

that the department is taking a step back in reconsidering how best to 

meet VA’s future electronic health record system needs and has not 

determined whether to modernize VistA or to replace it with an off-theshelf system.

Nevertheless, a significant concern that we identified is that VA (and 

DOD) had not identified outcome-oriented goals and metrics that would 

more clearly define what they aim to achieve from their interoperability 

efforts and the value and benefits these efforts are intended to yield. As 

we have stressed in our prior work, assessing the performance of a 

program should include measuring its outcomes in terms of the results of 

products or services. In this case, such outcomes could include 

improvements in the quality of health care or clinician satisfaction. 

Establishing outcome-oriented goals and metrics is essential to 

determining whether a program is delivering value.

In our August 2015 report, we stressed that using an effective outcomebased approach could provide VA with a more accurate picture of its 

progress toward achieving interoperability with DOD and the value and 

benefits generated. Accordingly, we recommended that the departments, 

working with the IPO, establish a time frame for identifying outcomeoriented metrics, define related goals as a basis for determining the 

extent to which the departments’ modernized electronic health record 

systems are achieving interoperability, and update IPO guidance 

accordingly. VA concurred with our recommendations and has told us that 

it has initiated actions in response to them.
Page 11 GAO-16-762T 

In September 2015, we reported that VBA had made progress in 

developing and implementing VBMS, its system that is to be used for 

processing disability benefit claims.13 Specifically, it had deployed the 

initial version of the system to all of its regional offices as of June 2013. 

Further, after initial deployment, VBA continued developing and 

implementing additional system functionality and enhancements to 

support the electronic processing of disability compensation claims. As a 

result, 95 percent of records related to veterans’ disability claims are 

electronic and reside in the system.

Nevertheless, we found that VBMS was not able to fully support disability 

and pension claims, as well as appeals processing. Specifically, while the 

Under Secretary for Benefits stated in March 2013 that the development 

of the system was expected to be completed in 2015, implementation of 

functionality to fully support electronic claims processing was delayed 

beyond 2015. In addition, VBA had not produced a plan that identified 

when the system will be completed. Accordingly, holding VA management 

accountable for meeting a time frame and for demonstrating progress 

was difficult.

As VA continues its efforts to complete the development and 

implementation of VBMS, we reported in September 2015 that three 

areas could benefit from increased management attention.

• Cost estimating: The program office did not have a reliable estimate of 

the cost for completing the system. Without such an estimate, VA 

management and the department’s stakeholders had a limited view of 

the system’s future resource needs, and the program risked not 

having sufficient funding to complete development and 

implementation of the system.

• System availability: Although VBA had improved its performance 

regarding system availability to users, it had not established system 

response time goals. Without such goals, users did not have an 

expectation of the system response times they could anticipate and 

management did not have an indication of how well the system 

performs relative to performance goals.

 13GAO-15-582.

Efforts to Develop and 

Use the Veterans Benefits 

Management System Can 

Be Improved
Page 12 GAO-16-762T 

• System defects: While the program had actively managed system 

defects, a recent system release included unresolved defects that 

impacted system performance and users’ experiences. Continuing to 

deploy releases with large numbers of defects that reduce system 

functionality could adversely affect users’ ability to process disability 

claims in an efficient manner.

We also found in our September 2015 report that VA had not conducted a 

customer satisfaction survey that would allow the department to compile 

data on how users view the system’s performance, and ultimately, to 

develop goals for improving the system. GAO’s 2014 survey of VBMS 

users found that a majority of them were satisfied with the system, but 

decision review officers were considerably less satisfied. Although the 

results of our survey provided VBA with data about users’ satisfaction 

with VBMS, the absence of user satisfaction goals limited the utility of 

survey results. Specifically, without having established goals to define 

user satisfaction, VBA did not have a basis for gauging the success of its 

efforts to promote satisfaction with the system, or for identifying areas 

where its efforts to complete development and implementation of the 

system might need attention.

In our September 2015 report, we recommended that VA develop a plan 

with a time frame and a reliable cost estimate for completing VBMS, 

establish goals for system response time, minimize the incidence of high 

and medium severity system defects for future VBMS releases, assess 

user satisfaction, and establish satisfaction goals to promote 

improvement. As we stressed in our report, attention to these issues can 

improve VA’s efforts to effectively complete the development and 

implementation of VBMS. Fully addressing our recommendations, as VA 

agreed to do, should help the department give appropriate attention to 

these issues.
Page 13 GAO-16-762T 

As we reported in May 2016, VA’s expenditures for its care in the 

community programs, the number of veterans for whom VA has 

purchased care, and the number of claims processed by VHA have all 

grown considerably in recent years.14 The substantial increase in 

utilization of VA care in the community programs poses staffing and 

workload challenges for VHA, which has had ongoing difficulty processing 

claims from community providers in a timely manner.

VHA officials and staff at three of the four claims processing locations we 

visited told us that limitations of the existing IT systems, including the Fee 

Basis Claims System (FBCS) that VHA uses for claims processing, have 

delayed processing and payment of claims for VA care in the community 

services. Officials at the sites we visited described the following 

limitations.

• VHA cannot accept medical documentation electronically.

• Authorizations for VA care in the community services are not always 

readily available in FBCS.

• FBCS cannot automatically adjudicate claims.

• System weaknesses have delayed claims payments.

The officials we interviewed said that if the agency is to dramatically 

improve its claims processing timeliness, comprehensive and 

technologically advanced solutions must be developed and implemented, 

such as modernizing and upgrading VHA’s existing claims processing 

system or contracting out the claims processing function. In October 

2015, VHA submitted a plan to address these issues as part of a broader 

effort to consolidate VA care in the community programs.15 The agency 

estimated that it would take at least 2 years to implement solutions that 

would fully address all of the challenges now faced by its claims 

processing staff and by providers of VA care in the community services.

 14GAO-16-353.

15Department of Veterans Affairs, Plan to Consolidate Programs of Department of 

Veterans Affairs to Improve Access to Care, (Washington, D.C.: Oct. 30, 2015). The VA 

Budget and Choice Improvement Act required VA to develop a plan for consolidating its 

existing VA care in the community programs. The plan was due to Congress no later than 

November 1, 2015. Pub. L. No. 114-41, § 4002, 129 Stat. 443, 461 (2015). 

Modernization of Health 

Care Claims Processing 

System Requires 

Additional Planning to 

Ensure Weaknesses Are 

Addressed
Page 14 GAO-16-762T 

However, VHA has not yet provided to Congress or other external 

stakeholders a plan for modernizing its claims processing system. In 

particular, VHA has not provided (1) a detailed schedule for developing 

and implementing each aspect of its new claims processing system; (2) 

the estimated costs for developing and implementing each aspect of the 

system; and (3) performance goals, measures, and interim milestones 

that VHA will use to evaluate progress, hold staff accountable for 

achieving desired results, and report to stakeholders the agency’s 

progress in modernizing its claims processing system.

That VHA has not yet provided a detailed plan but has stated that it 

expects to deploy a modernized claims processing system as early as 

fiscal year 2018 is cause for concern. Thus, to help provide reasonable 

assurance that VHA achieves its long-term goal of modernizing its claims 

processing system, we recommended in May 2016 that the Secretary of 

Veterans Affairs direct the Under Secretary for Health to ensure that the 

agency develops a sound written plan that includes:

• a detailed schedule for when VHA intends to complete development 

and implementation of each major aspect of its new claims processing 

system;

• the estimated costs for implementing each major aspect of the 

system; and

• the performance goals, measures, and interim milestones that VHA 

will use to evaluate progress, hold staff accountable for achieving 

desired results, and report to stakeholders the agency’s progress in 

modernizing its claims processing system.

The department concurred with our recommendation and said that VHA 

plans to address the recommendation when the agency develops an 

implementation strategy for the future consolidation of its VA care in the 

community programs.

In conclusion, effective IT management is critical to the performance of 

VA’s mission. The department faces challenges in key areas, including 

the development of new systems, modernization of existing systems, and 

increasing interoperability with DOD. While we recognize that the 

transformation of VA’s IT organization is intended, among other things, to 

mitigate the IT weaknesses we have identified, sustained management 

attention and organizational commitment will be essential to ensuring that 

the transformation is successful and that the weaknesses are fully 

addressed.
Page 15 GAO-16-762T 

Chairman Isakson, Ranking Member Blumenthal, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have.

If you or your staff have any questions about this testimony, please 

contact Valerie C. Melvin at (202) 512-6304 or melvinv@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this testimony statement. GAO staff who 

made key contributions to this statement are Mark T. Bird (Assistant 

Director), Jennifer Stavros-Turner (Analyst in Charge), Kara Epperson, 

Rebecca Eyler, and Jacqueline Mai.

GAO Contact and 

Staff 

Acknowledgments

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