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Complaints that company wrongly denied VA medical benefits put contract on hold

| Thursday, June 9, 2016, 11:35 p.m.

A company founded by a former Veterans Affairs secretary has won a major share of more than $6 billion in agency contracts, even as the firm is being investigated on charges that it wrongly denied medical benefits to some veterans.

Winning the major share of a contract for medical exams was QTC Medical, a subsidiary of Lockheed Martin that was founded by former VA Secretary Anthony J. Principi. Since selling his company in 2011, Principi's lobbying firm has taken on Lockheed as a client, specifically to deal with the VA and its need for medical exams.

The contract awarded to QTC of Diamond Bar, Calif., in late March is under challenge from multiple protests filed with the Government Accountability Office.

VA spokesman Henry Huntley said the new contract would be put on a 100-day hold while authorities examine the complaints. That hold, however, means that QTC will continue providing medical exams under its old contract.

Congressional lobbying records show Principi's firm, The Principi Group, registered as the lobbyist for Lockheed Martin in 2014.

In an email response to questions about his lobbying and the recent bids, Principi wrote, “I have not lobbied for QTC on its rebid nor do I have any knowledge or information on any of your other questions.”

Even as the bid was being awarded and protests filed, a House committee has launched its own probe into allegations that QTC routinely denied benefits to veterans suffering from the after-effects of exposure to Agent Orange.

A spokesman for Rep. Jeff Miller, a Florida Republican, said an investigation is under way into allegations that QTC failed to properly evaluate veterans claiming disabilities from exposure to Agent Orange under an existing VA contract.

Citing a whistleblower lawsuit filed by former QTC employee David Vatan, Miller said, “This lawsuit raises a number of serious questions. That's why our committee has launched an investigation into this matter.”

The suit charged that QTC required its employees to process so many claims for Agent Orange injuries in such a short time, it was impossible for them to complete a thorough examination.

Lawyers for QTC denied the allegations.

The suit was dismissed on a technicality when Vatan was unable to prove he knew the exact language of the QTC contact and, thus, could not cite specific provisions.

Under the new contract, which also is under challenge, physical exams of thousands of applicants for VA disability benefits will be performed by QTC personnel.

It was late March when the VA announced that it had awarded a dozen contracts for disability exams to QTC and two other firms, VetFed Resources and Veterans Evaluation Services. According to the announcement, the contracts include four one-year renewal options pushing their total potential value to $6.8 billion.

In seeking bids for the contracts, the VA disclosed that it intended to have the contractors compete against each other, with the firm with superior performance getting a greater share of the examinations. However, VetFed Resources states on its website that it is a partner of QTC's and has relied on the firm to fulfill its requirements under an existing contract.

QTC also has come under scrutiny for lengthy delays in completing disability exams and evaluations. Under its existing contract, QTC has been completing exams within 38 days. Under the new contract, a 20-day turnaround is required. QTC's performance has been the subject of critical testimony before congressional panels.

Walter F. Roche Jr. is a contributing writer for the Tribune-Review. Reach him at wfrochejr999@gmail.com.

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