Rural Arizona VA Hospital shells out a cool $1 Million in staff bonuses, as poor health care for Veterans persists


For decades Veterans Affairs medical center employees have been receiving bonus checks. No one can seem to explain where the bonus fund originated or how it was originally set up. It appears to be one of those federal budget mystery line items that have always been there, in spite of poor VA employee performance.

In 2015 the VA announced it needed to pay bonuses to attract and retain top talent. That was, ironically, one year after it suspended bonuses to senior executives following revelations that employees falsified wait lists at the Phoenix VA hospital to meet targets. The director who was fired from the Phoenix VA over the cover up even got a $5,000 bonus.

In the remote “outpost of a hospital” in Prescott, AZ, 700 of its 1,100 employees split more than a million dollars in bonuses despite bad care and embarrassing inspection results.

In 2014, when I began investigating VA hospitals across the country, following a scathing Government Accountability Office (GAO) report about VA employees,  Pete Hegseth, an officer in the National Guard who  was awarded the Bronze Star, the Combat Infantryman Badge, and two Army Commendation Medals gave me this quote for my article, “We agree with the GAO report. The VA performance system and bonus program is broken and needs to be fixed,” said Hegseth, CEO of Concerned Veterans for America (CV4A).  “Once again this shows a failure of VA leadership and is indicative of a broken VA culture which must be reformed. There is no accountability at VA, and that needs to change,” said Hegseth.  Hegseth now works for Fox News but the new National Grassroots Liaison for CV4A, Army Veteran, Josh Stanwitz, freshened up the group’s stance on the problem with VA employees by telling me, “Over the last 20 years the VA budget has increased over $200 billion dollars. It is the second largest agency in the U.S. government. Yet seven years after the Phoenix scandal and with nearly 20 million canceled or delayed appointments because of COVID, we are on the precipice of a new waitlist scandal. The VA MISSION Act is law and gives the VA the tools to address these issues and put the veteran at the center of their own health care decisions. At what point do we realize throwing money at the issue isn’t going to fix this problem; accountability and a culture shift within the VA is.”

The Prescott Outpost Scores Big

The “incentive bonus” category paid out $467,000 to employees at the Prescott VA. One nurse received $3,700, a “medical officer” received $5,800, an optometrist got $400, one engineer got $1,200 while another got half that; a food service worker received $660, one librarian got $1,600, pharmacists received between $400 and $660, an administrator got $2,700 while another got $660; one dietitian got $1,200, while another got half of that. Some policemen received $1,700 while most nurses averaged less than that; several nurses got $400. Supply clerks received up to $660, dental assistants $1,160; a painter and physician’s assistant each received $1,700, a Chaplain got $400; so did a podiatrist; a tractor driver received $400, but a car driver got $600 – which was the average for radiology department staffers. Dental techs and dentists got up to a $1,000 but only Veterans who saw combat get free dental care. One human resources officer received $2,600, a social worker got $4,500 while other social workers got thousands less. A finance department employee received $1,200; an industrial hygienist received $1,680. “Shrinks” received modest amounts.

Forty-eight doctors, under a category of “MD Performance” (which is designed to improve healthcare quality through financial incentives) received between $6,600 and $15,000 each. Career senior executives at the Prescott VA split $7,100. Other categories of bonuses for Prescott staff are described later.

But we still don’t know how VA employees at the Prescott VA qualified for bonuses because no one will confirm if it is because of outstanding performance, or a supervisor wrote a reference letter, or if there are standards that have to be met. After looking into bonuses paid at three other VA medical centers (Phoenix, Kansas City and Houston) this reporter concluded that all employees get bonuses, from the janitor or receptionist, all the way up to hospital directors and surgeons – apparently just for clocking-in during the previous 12 months.

There have been numerous Office of Inspector General of the VA (OIG) investigations and reports issued but none have helped fix the quality of care problems. The OIG visited the Prescott VA, twice, recently. Its 2009 review was exhaustive; and they even gave the leadership of the Prescott VA a heads up that they were coming ahead of time. The purpose of the review was to evaluate allegations related to quality of care in several services and a variety of peer review issues at the Bob Stump VA Medical Center (Prescott). It’s almost fitting to have Stump’s name above the entrance because Stump was a U.S. congressman who represented Prescott’s area of Arizona. He switched from Democrat to Republican and helped impeach President Clinton but there is no record he went to bat for Veterans – he only went to bat for an increase in defense spending.

The OIG inspection of the Prescott VA revealed that Prescott lacked a mechanism for tracking their large number of fee basis consults. A physician with fee basis management experience was later hired to manage the process. Additionally, during the review, OIG found a Prescott provider failed to inform leadership about an unacknowledged abnormal chest x-ray received from the Southern Arizona VA Health Care System (Tucson).

OIG recommended that the Prescott hospital director ensure compliance with rules about  Disclosure of Adverse Events to Patients, and that the Tucson Director review and take appropriate action for the failure to respond to an abnormal chest x-ray. Management agreed with the findings and recommendations and provided acceptable improvement plans.

Problems solved? Not hardly. In 2019 the OIG came calling again, but that time it was a “surprise inspection” at Prescott VA, and their findings were abysmal. The inspection team identified inappropriate storage of highly concentrated opioid oral liquid (narcotics) medications in patient care areas.

The OIG identified noncompliance with controlled substances area inspections and pharmacy inspections. OIG identified a deficiency with the ongoing professional practice evaluation process and identified noncompliance with medication storage at the Prescott facility.

The OIG had concerns with the facility’s establishing and monitoring Military Sexual Trauma (MST) related staff training and informational outreach, communicating MST-related issues with leadership, and tracking MST-related data, and with providers completing MST mandatory training. The OIG identified inadequate patient and/or caregiver education related to newly prescribed medications for geriatric patients and medication reconciliation to minimize duplicative medications and adverse drug interactions. The OIG noted concerns with Women Veterans Health Committee meetings, reporting to leadership, tracking data related to cervical cancer screenings, and communicating abnormal results to patients within the required time frame, and noted a lack of backup call schedules for emergency department providers and social workers.

The OIG issued 20 recommendations for improvement directed to the facility director.

In addition, the OIG identified noncompliance with documentation of physician utilization management (UM) advisors’ decisions in the National UM Integration database, participation of all required representatives in the interdisciplinary review of UM data, implementation of root cause analyses action items, and the complete Cardiopulmonary Resuscitation (CPR) committee analysis of resuscitation episodes.

After a painful Freedom of Information Act (FOIA) request this reporter engaged in with the Prescott VA FOIA officer Elisabeth DeSpiegelaere, it was learned that some $180,000 in bonuses were paid as an incentive to lure people to move to Prescott for work; $320,000 was paid in retention allowances (to keep employees in Prescott) and $71,000 were paid out as recruitment bonuses. Those figures could make one assume no one wants to work at the Prescott VA, or the VA in general, because of a bad organization reputation and bad media coverage. More on DeSpiegelaere later.

I emailed a set of routine questions to VA Prescott Public Information Officer Mary Dillinger, who apparently freaked out and sent emails across the country to her colleagues begging for help, including Jessica Jacobsen, Director of the Dallas Regional Office of the VA Public Affairs, along with out of town VA staffers Bobbi Gruner and Jennifer Roy. None of the questions were answered except for the number of employees working at VA Prescott. Jacobsen tried to turn the table on me and emailed me a series of questions but that’s not how journalism works here in America, only in the VA system which wants to hide things. Here are the unanswered questions: How do employees qualify for the following bonus checks… “incentive, relocation, retention, recruitment”? All I wanted to know was if there were standards, or if a supervisor had to write a recommendation letter – the normal stuff private industry uses. But the VA insiders do not want you to know those answers.

The VA pays less than the private sector and its reputation sometimes prevents job slots from being filled. Later in this report you will learn about whistleblowers in the VA Hospitals who have organized and are taking action as “The VA Truth Tellers.”

This reporter is a perfect 7-for-7 in his FOIA requests dating back to 1985. But in the years since then, no FOIA officer had dragged feet in such an unprofessional manner. It was if someone told DeSpeigelaere to not reveal the details, or “they are too embarrassing,” and this reporter had to go over her head and speak with her supervisor – the lead FOIA officer at VA headquarters in Washington who gave her a ‘come to Jesus moment’ that resulted in me getting the information.

The most it ever took this reporter to receive his other FOIA requests throughout his career was ten days, but DeSpeigelaere took three months. In one email from her, she sent the bonus award documentation but it could not be opened because it was encrypted. When I pointed that out to her, she said she could have her computer technician provide the un-encryption program she uses so I could use it on my computer, but I turned down the offer because that might be a violation of federal cyber security regulations.

Was it VA hospital director Jean Gurga who wanted DeSpeigelaere to delay the embarrassment? Perhaps. This reporter sent five letters to Gurga that remain unanswered to this day. The Prescott VA’s director’s office is a revolving door that featured multiple different directors in ten years.

The Phoenix VA director’s door revolves, too. The Carl T. Hayden (7 term senator) VA Medical Center serves about 80,000 veterans, and faces ongoing challenges after years of reform efforts. The hospital has become a revolving door for leadership, with seven directors since 2014, and at one time had the lowest rating for achievement in the VA’s five-star hospital measurement system.

Part Two of this investigation will dig deeper into problems and history at the Prescott VA medical center., and serious complaints made by Veterans about the entire VA system.


This investigation has also been published in the Western News Service.


1 thought on “Rural Arizona VA Hospital shells out a cool $1 Million in staff bonuses, as poor health care for Veterans persists”

  1. I worked at the VAMC for 35 years as an RN. Aside from witnessing and giving outstanding care to our Veterans, I knew a few rotten apples in the barrel. There are excesses and problems with any large entity but this seems like a “hit job” on the VA. The majority of Vets still boast of outstanding care and great outcomes. How many Congressmen, public “servants” lobbyists and other graft takers rake in millions of undeserved dollars? The VA isn’t perfect but is the intention of this article to privatize health care and Public Education? We see what happens to both when that occurs. I staunchly support our VAMC and the job it does to improve the care and support of Veterans. Look elsewhere for the truth.

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