Department leaders last month uncovered more than $100 million in duplicate government payments for medical services.
VA hospitals are having trouble filling jobs for doctors, nurses and psychologists, the watchdog reported.
About 80% of VA's roughly 450,000 employees are union members, but the department will no longer honor its contracts with the bargaining units.
Officials will extend authorizations for care handled outside the VA system for 30 different medical specialties, a move they say will ease red tape.
