The Contracting Gold Mine That Hurts Veterans
I have been working through the VA over the last six months due to having issues with my blood. Several time the platelets dropped as low as 1000 for days at a time. The solution is what medication will work. Steroids, IVIGs do not work. It is not till I get to cancer drug Rituxan, my platelet count starts to go up and the condition called ITP goes into remission.
For 25 months I was based at Camp LeJeune drinking and showering in the water. The only time I was not there was when I was in Cuba for 9 months. There is a direct link to drinking the tainted water and ITP (now chronic ITP) which I have been diagnosed with by Hematologist.
I have not found the VA to be denying my claim yet. Then too, I left Camp Lejeune in 1971 and many of us have died since then. They do not move too fast to agree with you. And denials are common. I do have ~300 pages of documentation from weeks in hospitals.
One really has to have a lot of patience and stubbornness to get something don there and the process is slow.
The Contracting Gold Mine That Hurts Veterans
– Jasper Craven
Exams to determine whether veterans qualify for certain benefits have been almost entirely privatized, and the companies conducting the exams have long been cited for poor quality.
Toxic exposure is a routine part of military service. This was certainly the case for Army veteran Brian Shumway, who was repeatedly exposed to dangerous chemicals throughout his career. In his domestic role in a combat arms branch, Shumway worked with tanks and other heavy vehicles, often handling fuel and flame-retardant fluids. Then, in 2010, he was deployed to Iraq, where he helped operate and decommission bases.
A signature of these bases were burn pits: massive ash heaps that served as ad hoc sanitation systems. The materials in these smoldering pits included sensitive military records, medical and human waste, paint, and other forms of trash. Shumway’s withdrawal work brought him to two of the most notorious pits: Ali Air Base in southern Iraq, and Balad Air Base just north of Baghdad.
Three years later, in July 2013, Shumway, a National Guardsman, was getting a high-and-tight haircut stateside when his barber noticed what looked like small, scabby cuts above his ears. This psoriasis began to spread all over his body, making his skin raw and bloody and causing severe joint swelling, stiffness, and degeneration. “I was basically bedridden for months—totally exhausted,” he told the Prospect. “It was awful.”
A bit of online sleuthing led Shumway to learn about the prevalence of autoimmune diseases among those exposed to toxic chemicals, including 9/11 first responders and veterans who served near burn pits. For years, Shumway treated his condition with allergy shots and over-the-counter antihistamines, but his symptoms got worse. In February 2022, he filed a disability claim with the Department of Veterans Affairs for psoriatic arthritis, contending that his condition was directly tied to his service.
It was a complicated claim, as autoimmune illnesses are elaborate and somewhat mysterious. “There’s a whole lot of factors that go into causing autoimmune disease,” he explained. “Essentially your genetics load the gun, and your environment pulls the trigger.” Still, Shumway built a strong case. He also included photos he’d snapped in Iraq while enveloped in a burn pit’s thick, noxious smog.
Nonetheless, the VA swiftly denied his claim.
In June 2022, Shumway launched an appeal with the help of Wesley McCauley, a registered claims agent. McCauley aimed to strengthen Shumway’s case with additional medical evidence, which is most often gleaned through what’s known as a compensation and pension (C&P) exam, where medical staff pore over military health records and conduct tests to understand whether certain injuries are connected to time in the ranks. Roughly 1.4 million C&P exams occur every year, each one potentially vital to the future of a veteran’s claim. A good examiner will provide a patient with adequate medical documentation to win a case. A bad one can lead a veteran to be improperly denied access to the department’s generous care and benefits.
Historically, these exams were undertaken exclusively by VA clinicians steeped in the unique health challenges of former service members, while being strictly overseen by government regulators. But beginning in the late 1990s, lawmakers started opening this work to contractors, a trend that has greatly accelerated in recent years. In the waning days of his first term, President Donald Trump announced plans to privatize virtually all C&P exams, bursting open the floodgates to what was already a multibillion-dollar contracting gold mine.
Shumway ultimately undertook roughly a half-dozen exams run by two of the biggest contractors in the space: QTC and Veterans Evaluation Services. He brought exhaustive documentation to his appointments, including military and civilian medical records and prescriptions corroborating his diagnoses of psoriasis and psoriatic arthritis. “No one was interested,” he said. “It felt like a puppy mill—these companies are trying to do as many exams as they can to make as much money as they can. They simply don’t do a thorough job, and they face no consequences.”
Shumway left one of these appointments after a nurse failed to apply a tourniquet to draw blood, sticking Shumway, a trained medic, five or six times without success. “They didn’t know what the fuck they were doing,” he said. “Plus, blood test information was already included in my file.”
In March 2023, McCauley submitted a claims accuracy request to the VA on behalf of Shumway, detailing nearly two dozen agency errors, many made by private examiners, who repeatedly failed to accept his diagnoses despite robust evidence. “It seems like they had a predetermined conclusion that they wanted to reach,” Shumway said. “Whatever evidence I had, like prescriptions and paperwork from my rheumatologist, they ignored.”
It ultimately took 485 days before the VA declared Shumway 100 percent permanently disabled, acknowledging in their decision that his claim had been marked by “clear and unmistakable errors.”
Shumway’s long, error-ridden experience is far from an aberration. For years, lawmakers and government watchdogs have raised urgent concerns over the quality and oversight of private C&P exams. Their warnings have become more salient since the 2022 passage of the PACT Act, which opened the VA to millions more veterans sickened by exposures to Agent Orange, burn pits, and other chemicals while in service.
Amid a corresponding surge in claims, the VA is moving relatively quickly, avoiding a major backlog thanks largely to its private army of examiners. But while efficiency is up, quality is down. “Crap at the speed of light is still crap,” mused Rick Rousseau, an Army JAG turned veterans’ disability lawyer.
“It’s pitiful,” added McCauley. “The quality of exams is so poor these days, and the taxpayer is paying for all of them.”
THE FIRM THAT BEST EMBODIES the highly lucrative rise of privatized, slipshod C&P exams is QTC. The firm’s former president and board chairman Anthony Principi, a U.S. Naval Academy graduate who ran a Mekong River patrol unit during Vietnam, was the pre-eminent VA whisperer to the Bush family. He served as the agency’s deputy secretary and acting VA secretary for Bush 41 before serving as Bush 43’s first VA secretary. In the intervening years, Principi worked as a Republican Senate staffer, then helmed QTC, which was founded as a small non-veteran-focused medical evaluation clinic in 1981. The firm’s three-letter name is an acronym for its corporate pledge: quality, timeliness, and customer focus.
Principi helped usher QTC and other firms into the work of veteran examinations. In 1996, he chaired a congressional task force on veterans’ issues that recommended, among other things, standardizing physical exams for retiring troops. That same year, Congress created a geographically targeted pilot that, for the first time, authorized non-VA officials to conduct medical examinations, part of a purported attempt to “improve … quality and timeliness.” QTC’s name explicitly promised such standards, and in 1998, the firm was first tapped by the VA for C&P exams.
As VA secretary, Principi zeroed in on the post-9/11 claims backlog, creating a task force that explicitly lauded the services of QTC, the company he once led. Principi’s support helped lay the groundwork for language in the VA’s 2003 budget that expanded the C&P pilot. In December 2004, Principi resigned from the VA and returned to QTC as board chair.
In 2006, the Los Angeles Times revealed that, during Principi’s time in government, QTC had secured as much as $1 billion in VA contracts for which they were the only bidder. The reporting noted that “officials of other firms said they were not aware the contract was up for bid, though they had previously expressed interest to the VA.” The paper also highlighted data estimating that QTC exams cost as much as 400 percent more than the VA’s in-house services. “This is a conflict of interest in the most extreme form,” John Gage, then the president of the American Federation of Government Employees, told the paper, insisting that the exams should remain under the VA’s domain.
The report spurred a congressional inquiry that cleared Principi of wrongdoing, though one of the sources interviewed by Hill staff claimed afterward that investigators’ questions were geared toward “looking to excuse possible wrongdoing and to dismiss my concerns.” In an interview with the Prospect, Principi insisted that his major rationale for private exams was to shrink the backlog, and ease access for veterans living far away from a VA medical center.
In 2008, QTC was formally flagged by the VA’s Office of Inspector General for overbilling. (A more recent inquiry found no irregularities.) In September 2011, QTC was acquired by Lockheed Martin, ensuring that the massive military contractor could not only profit from war, but also from wounds incurred on the battlefield. (QTC is now owned by Leidos, a defense and biomedical research company.)
During the interview, Principi said his financial relationship with QTC ended alongside his initial stint in the 1990s, though his second role, as QTC’s “executive chairman,” is one that is usually compensated. In a follow-up e-email, Principi clarified that he was indeed compensated in this post, which he left around 2012.
CONGRESS HAS SUBSEQUENTLY CONTINUED over the past dozen years to expand the role of private exams rather than boost in-house capacity, leading to billions in contracts and over eight million private exams. One of the most monumental expansions in C&P outsourcing came in 2016, via Rep. Jeff Miller (R-FL) and Sen. Richard Blumenthal’s (D-CT) Veterans Health Care and Benefits Improvement Act. It did away with the regionalized pilot program that had existed since 1996 and authorized the VA to contract out exams in any state or American territory.
Months later, Rep. Miller retired from Congress and became a lobbyist. While he had once launched a congressional investigation into allegations that QTC failed to properly evaluate disabilities relating to Agent Orange exposure, as a lobbyist he worked for another notorious private exam provider: Veterans Evaluation Services, also known as VES.
In 2015, the Tampa Bay Times reported that VES sent dozens of veterans to a Tampa doctor who was under federal investigation. That same year, the company settled a suit with an employee who alleged wage theft. In 2019, Margaret Rajnic, a nurse who briefly worked for VES in 2018, told me that the organization was poorly run and that many of its reviewers were unfamiliar with basic medical terms or procedures. Rajnic said she was fired after raising questions about the company’s business practices. In another 2022 suit, a veteran alleged that VES made multiple mistakes in his claims process.
Miller, who was seriously considered as a candidate for Trump’s first VA secretary, was a powerful voice for VES. Under Trump, the firm secured a $205 million contract. (QTC, for its part, netted billions in VA contracts during the Trump years.)
In 2022, the VA’s Office of Inspector General found that VES, QTC, and other vendors “failed to consistently provide [the VA] with the accurate exams required by the contracts.” The OIG also reported that senior agency officials discouraged the relay of private exam issues to the regional office level and faulted VA leaders for not using accountability tools at their disposal.
“They’re not docking contractors’ money or assessing a penalty for mistakes,” said Rousseau, the lawyer. “There’s not even a decent feedback loop, no after-action reports and thus no lessons learned on what they’re doing wrong.” Andy Gross, another longtime disability claims lawyer, echoed Rousseau’s perspective, saying that “exam quality has cratered over the last few years and that’s because there is effectively no oversight over the process.” At this point, Gross estimated, 80 percent of the claims appeal cases he takes concern bad exams.
Nonetheless, contracts continued to flow under Trump, thanks to well-connected figures like Kristy Park, a QTC lobbyist who previously worked for the House Veterans’ Affairs Committee, and Joseph Lai, a lobbyist and former Trump adviser hired by VetFed, another C&P company that earned tens of millions in contracts under Trump—far more than what it was awarded under Obama. A former senior VA official told the Prospect that Principi was in close and frequent communication with Trump’s first VA secretary, David Shulkin, who didn’t respond to requests for comment.
Principi said he’s communicated with various VA secretaries, including Biden’s pick, Denis McDonough. He said he hasn’t communicated with his former employer in years, and never lobbied for them: “Why would I?”
BY 2019, KERI JACKSON WAS SO FRUSTRATED by the outsourcing of C&P exams that she quit the VA. A former military doctor and Gulf War veteran, Jackson began conducting internal C&P exams in 2004. In the years since, she’d watched the agency farm out exams to private contractors, leading to frequent complaints from patients and colleagues. Exams that took her hours were now being done by the private sector in minutes. “My personal opinion is it’s fraudulent,” she told the Prospect.
It took Jackson years to perfect the art of the C&P exam. Her skills were sharpened thanks to quality control metrics within the VA, including routine evaluations and feedback on her work from VA benefits officials and medical staff. “The VA was motivated to do quality improvements,” she said. “They have systems, they do training.”
When Jackson quit in 2019, just 25 percent of C&P exams were being conducted by the VA. Many of her former colleagues had by then been hired by contractors, and few were happy. She recalled that one former VA examiner was prevented by QTC from reviewing veterans’ claims files—a critical piece of the evaluation process—because it was “time consuming.” When Jackson herself briefly inquired about potential work with VES, the company provided her training materials that were out of date and alignment with the VA’s current rules and regulations.
In October 2020, the Trump administration announced that virtually all exams were to be conducted by private firms. Trump’s undersecretary for benefits, Paul Lawrence, contended that the move was simply the “evolution of the process,” blasé remarks that caused consternation from lawmakers who’d long heard horror stories from their constituents. Sen. Jon Tester, then the ranking member of the Senate Veterans’ Affairs Committee, said the move created the “potential for serious long-term negative impacts on the services and benefits provided to our nation’s veterans.”
As the VA increased outsourcing, it diluted its already weak oversight. For years, the VA’s Medical Disability Examination Office was required to conduct random and complaint-based site visits at contractors’ facilities to ensure compliance with ADA and OSHA standards. But in September 2021, contract language was quietly softened to stipulate that the office “may” conduct these visits, but was not required to. The VA also tasked private examiners with rating their own performance rather than eliciting feedback directly from veterans.
In May, the Office of Inspector General released its own damming performance assessment, identifying deficiencies at 114 of the 135 private exam facilities it visited. The watchdog also reviewed numerous veteran complaints, including allegations of moldy, bug-infested offices, and facilities that lacked proper exit doors. Some firms had faulty equipment or a lack of ramps for wheelchair-bound veterans. In one case, a veteran with a hip condition was directed onto a massage table that collapsed, causing the veteran to land flat on their back and, as a result, experience even more pain. In another example, a veteran in a wheelchair was being assisted into an audio booth without a ramp to test their hearing. During this move, they fell to the ground, their eyes rolled back, and they began vomiting. (Ultimately, they were taken by ambulance to a local VA hospital.)
In September, Gross and Rousseau gave a presentation on private examiners at the National Organization of Veterans’ Advocates conference, which included more bad examples, like the case of one examiner who continued to practice despite being disciplined by the Texas Medical Board for creating a deceptive medical record during a veteran’s exam. Another contractor failed to undertake the VA’s required trainings.
“These aren’t folks on their break from Sloan Kettering or Johns Hopkins,” Gross said. “Most are not at the top of their game but are instead hoping to make a little extra money moonlighting as a veterans’ claim examiner.”
Gross, Rousseau, and other disability agents have also raised concerns that VES has subcontracted with a company called Maximus, which is hiring so-called “bookmakers” to further streamline the exam process by reviewing a veteran’s massive medical file and paring it down to just a few pages. A job listing makes clear that no medical background or college experience is necessary. “Someone with a GED is making complex medical determinations to see if burn pit exposure is related to a veteran’s cancer,” said McCauley.
Sen. Elizabeth Warren (D-MA) recently wrote a searing letter to VA Secretary Denis McDonough outlining more “disturbing reports” from private C&P exams and demanding reform. Her letter includes the astounding accusation that contractors “shredded medical questionnaires instead of adding them to medical files,” and that some veterans were also examined in nonmedical settings, including co-working spaces, hotel rooms, and broom closets. A Warren spokesperson told the Prospect that, months later, McDonough never provided a response.
Terrence Hayes, a VA spokesperson, told the Prospect that there has been a record increase in approved disability benefits under the Biden administration, and pointed to higher exam accuracy rates and veteran satisfaction scores. He said the VA would respond to Warren “as soon as possible,” and noted that the agency is working to address the OIG’s recommendations as part of a broader campaign to “improve contract examination vendor oversight.” This, he said, has included 400 site visits in fiscal year 2024, plus “reducing the volume of work sent to contractors when performance concerns arise” and issuing “letters of concern.” He did not provide requested details on the scope of such penalties.
Another Trump administration will likely abandon these improvement efforts and dismiss calls for reform, especially as there’s additional money to be made from no-bid contracts. But as quality suffers, the dissatisfaction from veterans seeking benefits to which they’re entitled will only grow.
Principi, for his part, said he hadn’t been aware of the near-total outsourcing of C&P exams and expressed worry over the development. “These exams should be done at the VA unless they can’t be,” he said. “And if somebody is doing a shoddy exam or veterans are not being treated well, then somebody at the VA needs to look into that.”