DOGE Firings Spark Medical Coding Crisis at Reno VA, Inspector General Warns

DOGE cuts created medical record coding backlog at Reno VA, inspector general report finds

by Matthew Mondschein, Nevada Current
March 20, 2026

Concerns about workforce reductions, a hiring freeze and significant organization changes that resulted from presidential actions, such as executive orders and memorandums, were “system shocks” that disrupted healthcare operations at the VA Sierra Nevada Health Care system in Reno, according to a Veterans Affairs independent oversight agency.

The U.S. Department of Veterans Affairs’ Office of the Inspector General (OIG) physically inspected the Sierra Nevada VA in June 2025. The findings, published on Feb. 12., are based on a facility-wide questionnaire, veteran survey scores, and interviews with facility leaders and employees.

Respondents to the OIG questionnaire echoed similar concerns to those reported at the Southern Nevada VA about workforce reductions and hiring freezes as over 30,000 VA employees were let go last year as a result of the Trump administration’s agenda to gut VA staff.

Executive leaders at Sierra Nevada VA told inspectors it was difficult to address employees’ concerns because Veterans Health Administration (VHA), the component in the VA that runs its health care system, “did not provide immediate guidance on implementing the actions.”  The executive leaders maintained facility cohesion through increased weekly town halls and visits to work areas to address the concerns, according to the report.

Elon Musk’s now defunct Department of Government Efficiency, known as DOGE, also fired over 2,400 VA workers in February 2025. According to the report, Musk’s initiative specifically hurt operations at VA Sierra Nevada.

VA Sierra Nevada administrators told the OIG that VHA terminated the medical coding contract used by the facility when implementing Trump and Musk’s DOGE initiative. Medical coding ensures medical records are accurate and supports proper billing for treatment. Employee coders “assumed the contract coders’ workload” but the volume became overwhelming and “resulted in a growing backlog of uncoded medical records.” 

The facility’s administrators went on to add there was “considerable potential financial loss to the facility for missed inpatient medical coding for FY2025” due to the contract termination. Six VA medical centers from surrounding areas and the consolidated coding unit from two other VA service networks had to assist with the backlog, according to the report. 

VA Sierra Nevada provides health care services at 10 locations and serves an area that includes 20 counties in northern Nevada and northeastern California. The Ioannis A. Lougaris VA Medical Center in Reno serves as the central hub, with eight community-based outpatient clinics located in Minden, Fallon and Reno as well as a rural outreach clinic in Winnemucca.

Despite tumultuous federal policy affecting the facility, “patient advocate responses to the OIG questionnaire described appreciation for leaders’ support and a team-based approach to resolving veterans’ concerns.”

Health care facility inspections were established by the OIG, the report said, to evaluate VHA medical facilities and ensure “veterans receive optimal care.” Facility inspection reports “provide insight into the experience of working and receiving care at VHA facilities” in order to inform the public and Congress about concerns among staff and the quality of care being provided. 

Nevada Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nevada Current maintains editorial independence. Contact Editor Hugh Jackson for questions: info@nevadacurrent.com.

The VA Office of Inspector General’s February findings show that canceling the facility’s medical coding contract left staff overwhelmed, creating a growing backlog of uncoded records and threatening significant financial losses for FY2025. Six nearby VA centers had to step in to help.

Over 30,000 VA employees lost jobs last year under Trump administration cuts and hiring freezes, which executives called “system shocks” disrupting operations. At Sierra Nevada VA, leaders struggled without immediate guidance from Veterans Health Administration headquarters.