Painful Scars, Sloppy Ratings: 38% Wrong

The OIG sampled disability decisions for service-connected painful scars: 38% contained errors, $5.6M in overpayments on at least 920 of them — and a 2026 follow-up sample still showed a 43% error rate.

Painful scars sound like a small corner of the disability system. The OIG chose it as a test of rating accuracy — and the system failed the test. Sampling decisions completed between June 2024 and May 2025, it estimated 38 percent contained at least one error.

Processors relied on subjective pain reports without the objective examination evidence the regulations require, and VA systems failed to flag "pyramiding" — rating the same disability twice under different codes. Errors ran both ways: at least 920 produced roughly $5.6 million in overpayments that keep accruing, while some veterans whose service-connected scars later became painful never received the separate evaluation they were owed.

A follow-up sample of 30 decisions from January 2026 showed a 43 percent error rate. The problem, measured again, had gotten worse. VBA concurred with all three recommendations.

"38 percent of these decisions—about 17,900 cases—contained at least one error"
— VA OIG

Source: VA OIG — Review of Accuracy of Claims Processors’ Disability Evaluation Decisions for Painful Scars. Part of the VA Fraud library — see also the case files for the prosecutions these systems produced.