Veterans Backlog Reduction Act - Directs the Secretary of Veterans Affairs (VA), in the case of any claim for veterans' disability compensation that is not adjudicated within 125 days after submission, to pay such claimant provisional benefits, from the period beginning on the date of such deadline and ending on the date on which a final claim decision is made. Provides a conditional provisional benefit amount.
Requires the Secretary to reduce any final claim amount covering the same period by the amount of provisional benefits received. Prohibits the Secretary, upon the eventual denial of a claim, from recovering any provisional payments unless the Secretary determines an indication of fraud, misrepresentation, or bad faith in connection with the original claim.