Embroiled in Scandals Over Veterans' Health, VA Still Paid $142M in Bonuses in 2014

The Department of Veterans Affairs (VA) paid over $142 million in performance bonuses to executives and employees in 2014 even as scandals plagued the agency over issues including unconscionably long wait-lists for veterans’ healthcare, huge cost overruns, and overprescribing of opiates to veterans. The bonuses were paid even after revelations were made public that VA employees falsified wait-list times in order to meet targets so that they could secure these very bonuses.

Although bonuses to top-level officials at the VA were suspended in 2014 after the revelations of falsified wait-lists, and the total amount of bonuses has actually decreased over the last several years, the agency continued to pay performance-based bonuses to nearly half of its employees nationwide, according to USA Today, which received data from the House VA Committee. In all, 156,000 executives, managers, and employees received bonuses for 2014 performance.

Among the bonuses paid out were the following:

• Psychiatrist David Houlihan, MD, the VA chief of staff in Tomah, Wisconsin, got a $4000 bonus 9 months after an Inspector General’s report concluded he was prescribing alarmingly high amounts of opiates and 4 months after a 35-year-old Marine Corps veteran died from mixed drug toxicity while an inpatient in the facility. He had been prescribed a fatal mixture of medications, including opiates. In October 2015, Dr. Houlihan was fired and had his clinical privileges revoked.
• A $3900 bonus was paid to Susan Markstrom, MD, chief of staff in St. Cloud, Minnesota, who is being investigated for the mismanagement at that VA facility that led to mass resignations of healthcare providers.
• Kimberly Graves, VA benefits office director in St. Paul, Minnesota, received a bonus of $8697 for 2014 performance. An Inspector General’s report concluded that Graves improperly used her authority to engineer a transfer into her current post in October 2014, for which she also received an additional $129,000 in moving expenses. Last week, Graves invoked her Fifth Amendment rights and declined to answer questions at a House VA Committee hearing.
• Sandra Flint, former director of the Phoenix, Arizona, regional VA benefits office, received an $8348 bonus for performance in an office where there was a backlog of 8200 pending benefit claims (with 3667 pending for longer than 125 days).
• Bonuses of $4000 to $8000 were paid to officials who managed the construction of a Denver VA facility that is already years overdue and more than a $1 billion over budget.

Representative Jeff Miller of Florida, chairman of the House VA Committee, which has been investigating VA bonuses for several years, said these latest bonuses reflect a disturbing trend of rewarding employees who preside over corruption and incompetence.

“Whether it’s continued delays in veterans’ medical care, the blatant waste of billions of taxpayer dollars or a rampant lack of accountability throughout every corner of the organization, there is simply no denying that the problems at the Department of Veterans Affairs are indeed widespread,” Miller said in a statement. “Anyone who would claim the opposite simply isn’t paying attention.”

The Congressional VA Committee’s data show that in total, the VA awarded $276 million in incentives in 2014. This included retention and relocation payments, and rewards for saving money on travel and coming up with inventive ideas. Lump-sum cash bonuses of $142.5 million were tied to performance reviews. The payments ranged from $8 to $12,705, with most being more than $500 (the average payment was $909).

Speaking at the Veterans Day Commemoration Ceremony at the Arlington National Cemetery, President Barack Obama made note of the problems at the VA: "The unacceptable problems that we've seen—like long wait times, and some veterans not getting the timely care that they need—is a challenge for all of us if we are to match our words with deeds.”