GAO warns VA still faces major hurdles as agency looks to use AI in disability claims process

The Department of Veterans Affairs has made progress modernizing its disability benefits system, but "longstanding" management and technology problems could complicate the agency’s push to use artificial intelligence to help process veterans’ claims, according to a new report released by the Government Accountability Office.

Dr. Sterling Thomas, GAO’s chief scientist, told Congress that the VA is attempting to modernize technology used by the Veterans Benefits Administration to improve both the speed and accuracy of disability decisions. He warned that years of unresolved operational problems remain.

"VA is working to modernize its IT systems to deliver an improved veteran experience and increase efficiency and accuracy in claims processing," Thomas said in his testimony before the House Veterans’ Affairs Subcommittee on Technology Modernization.

"However, VA has faced longstanding challenges in managing programs and IT projects," he added.

The VA administered more than $195 billion in disability compensation to more than 6.9 million veterans and their families during fiscal year 2025, making it one of the federal government’s largest benefit programs.

The GAO said the agency continues to grapple with growing workloads fueled, in part, by the Honoring our PACT Act, which expanded benefits for veterans exposed to toxic substances during military service. 

The watchdog also noted that future eligibility changes could result in additional surges in claims.

Beyond the volume of claims, GAO said the complexity of disability decisions presents another challenge.

“Making decisions about disability compensation is difficult given the complexity of VA’s statutory and policy requirements,” Thomas said, adding that claims processors must navigate evolving laws, regulations and eligibility standards.

The report points to several management issues identified in previous GAO reviews, including weaknesses in oversight of contractor medical examinations and gaps in claims processor training.

Since 2021, GAO has issued 43 recommendations focused on strengthening the disability compensation program. According to the GAO, VA has fully implemented 28 of those recommendations since 2021, while work remains on the outstanding 15. 

Thomas said implementing GAO’s outstanding recommendations would better position VA to modernize its technology while ensuring veterans receive “more accurate and timely benefits decisions.”

The watchdog also highlighted concerns with the department’s history of technology modernization. 

GAO highlighted the VA’s Veterans Benefits Management System, the electronic claims platform first launched in 2009, as the main example.

The report also concludes the system “was not driven by robust planning and did not include goals for system response times and user satisfaction,” which made it harder to measure whether the system was meeting users’ needs.

GAO acknowledged that artificial intelligence could offer significant benefits if implemented in a responsible way.

“AI holds substantial promise for improving the operations of government agencies,” Thomas said.

VA is currently exploring AI tools that could automate tasks such as document intake and the review of disability claims as well as detect potentially fraudulent direct deposit changes involving veterans’ benefits.

However, GAO warned that generative AI introduces new dangers because many systems operate as so-called “black boxes.”

“Even the designers may not fully understand how they generate outputs,” the report warned.

GAO said this drawback could make it harder to identify errors, determine accountability or detect misuse when AI plays a role in disability claims decisions.

The report also cited AI challenges involving cybersecurity requirements, privacy rules, computing resources and accessing high-quality data. 

The watchdog emphasized that keeping a “human in the loop" is essential despite the potential benefits of AI.

GAO explained that adopting AI will require expanding the federal workforce’s technical expertise going forward. 

The watchdog noted that the VA and other federal agencies are currently struggling to compete with the private sector for workers with advanced AI skills.