VA Modernization Effort Dramatically Cuts Benefits Claims Backlog

The Department of Veterans Affairs has significantly modernized its Veterans Benefits Management System (VBMS), using AI and other technologies to speed claims processing and improve accuracy, agency officials told Congress Monday.

Officials said the modernization has helped reduce claims backlogs while improving the experience for veterans.

“VA’s technology modernization has been critical to the department’s ability to deliver faster and more accurate outcomes to veterans, through implementation of automation support tools for claims processing, enhancements to claims processing platforms, improving intake and submission accessibility and modern workload distribution,” Robert Orifici, acting deputy CIO for Product Delivery Service within the Office of Information and Technology told the House Veterans Affairs Committee.

The PACT Act

The PACT Act, signed into law in 2022, aims to ensure veterans exposed to toxic substances receive the benefits and health care in which they are entitled.

The law required VA to develop a Benefits Systems Modernization Plan to support implementation, which is now in its fourth year.

Since its passage, Orifici said the law produced a “historic increase” in veterans seeking benefits, with more than 3.5 million PACT-related claims so far. Since May 6, 2025, the claims backlog has remained below 75,000 — a 75% decrease from Jan. 20, 2025 — a direct result of improved systems and workflows, he said.

VBMS Modernization

A cornerstone of the modernization effort is VBMS, the electronic case management system that claims examiners use to process and rate disability compensation claims. Modernization efforts have focused on improving how claims processors access information through decision-support tools while reducing manual work.

One of the most significant improvements has been the digitization of more than 1.2 billion claims evidence documents. VBMS now includes Smart Search, which allows staff to quickly scan evidence folders and locate relevant information.

“This vast computable data foundation saves claims processors hours of manual review and supports more consistent, accurate decisions,” Orifici said.

Leveraging AI

The VA is also using AI to help staff make faster and better decisions when processing claims. Orifici emphasized that all claims are decided by human VA personnel, not AI or automated systems.

AI tools now accelerate PACT Act eligibility determinations and Toxic Exposure Risk Activity memos, which were previously manually completed. The tools now partially populate VBMS using verified data with links to source documents, he explained.

“The use of AI in VBMS has reduced the time to complete a memo by up to 40%, allowing VA to confirm eligibility for PACT Act claims much faster,” Orifici told lawmakers.

Improving Infrastructure

As part of its modernization plan, the VA has improved its IT infrastructure. VA also migrated the VBA Corporate Database — the central repository for veteran records — to the cloud. This improves data security, system resiliency and the ability to scale capacity in real time, Orifici said.

Automated cloud resource management has helped VA avoid roughly $16 million in annual cloud costs, with additional initiatives expected to save another $7 million.

The VA is also committed to adopting multivendor strategies “to drive completion to build the best possible benefit delivery products for veterans,” he said.

GAO Findings

The Government Accountability Office offered a more cautious assessment during the hearing.

A recent GAO report found that as the VA deploys new technologies such as AI under the PACT Act, it must proactively manage the complexities and risks associated with them, said Sterling Thomas, GAO chief scientist for Science, Technology Assessment and Analytics.

Thomas said VA has “an inconsistent record in managing technological enhancements, including those intended to improve the processing of veterans’ claims for disability compensation.” He added that VA faced longstanding challenges with IT modernization efforts.

Previous GAO reviews found VA’s modernization efforts lacked robust planning and measurable goals for system response times and user satisfaction. The GAO made five recommendations to address these shortfalls. As of July 2026, VA took action to implement three GAO recommendations, including developing a plan for completing VBMS, Thomas said.

AI Black Box Issues

VA’s record of managing its disability compensation program and technology innovation is particularly important as it begins using AI to improve disability compensation claims processing.

Thomas said the VA is examining multiple ways to use AI in veterans’ disability compensation. This includes using generative AI to automate tasks in processing disability compensation claims, such as document intake, classification and preliminary adjudication. Additionally, the VA is examining AI’s potential to help identify fraudulent direct deposit changes to veterans’ benefits.

The GAO previously reported that generative AI can increase risk for federal agencies. Specifically, Thomas noted that AI systems are still largely “black boxes” in that even their designers may not fully understand how they generated their data outputs.

“Given the fast pace at which AI is evolving, the government must be proactive in understanding its complexities, risks, and societal consequences,” Thomas said.