Note: This story was updated on June 3, 2014, to include a citation that had been inappropriately left out regarding a Fox News report about veterans' suicides in the Spokane, Washington, area. As veterans groups absorb claims that some veterans died for lack of care in the face of delayed treatment in Phoenix, some are demanding that the Obama administration step in and revamp the troubled Department of Veterans Affairs. Congress, meanwhile, is planning hearings on the issue, a federal investigation is underway in Phoenix, and an attorney for a veterans group said the case may lead to a class-action lawsuit involving civil or criminal charges.

At least 40 U.S. veterans died while waiting for appointments with the Veterans Administration in Phoenix, CNN reported. Many of them had been placed on a secret waiting list as part of a scheme by VA managers in Phoenix to hide the fact that 1,400 to 1,600 ailing veterans had been forced to wait many months to see a doctor, recently retired VA doctor Sam Foote told the network.

The revelation outraged some of the country’s most prominent veterans and veterans groups. American Legion National Commander Daniel Dellinger said on Thursday that if the allegations are true, the secret list in Phoenix “is one of the most abhorrent acts ever committed in VA history.”

“President Obama needs to fix the VA from top to bottom,” said Gene Jones, an Air Force veteran who serves on the board of directors of Veterans for Common Sense, a national veterans-advocacy organization. “The shortcomings are an extension of George W. Bush's failure about Walter Reed in 2007. With the Iraq and Afghanistan wars winding down, the VA must ramp up."

William A. Thien, a Vietnam vet who leads the Veterans of Foreign Wars, said in a statement, “When you deal with lives, there should be no leniency granted to anyone with any knowledge of this alleged cover-up, to include everyone in Phoenix who knew but didn’t tell, and those in oversight positions at the VA network and VA headquarters in Washington who knew but didn’t care.”

Foote told CNN that the Phoenix VA works off two lists for patient appointments -- an "official" list that is shared with officials in Washington and indicates that the agency has been providing timely appointments, which Foote called a sham list – and the “real” list that's hidden from outsiders, where wait times can last more than a year.

The VA's patient backlog has long been controversial, but if true, the Phoenix VA story indicates that the agency has used the backlog to its advantage, and that it may have killed people.

Thomas Bandzul, in-house attorney for Veterans and Military Families for Progress, told International Business Times, "This case probably will be the tipping point. I would hope so. When is President Obama and Attorney General Holder going to say, 'Enough, we've had it with you, VA, we can't stand this any more. We've given you money and authority and the opportunities to make changes. We have supported Secretary Eric Shinseki. Haven't enough veterans died needlessly?" Bandzul said that if civil or criminal litigation results from the reported evidence, the case could have profound legal ramifications. "This could be the largest case for veterans against VA that we've seen from a legal standpoint," he said. "A lot of people have been affected. This could be enormous, both criminal and civil." Bandzul said that if the reported secret list can be proven, it could be attributed to criminal negligence. "Whoever created that list and whoever knowingly and intentionally used it against VA policy can be held criminally liable," Bandzul said. "If they took an action based on that list and they knew they were not supposed to do that, that is illegal." Veterans who spoke with IBTimes expressed cynicism over the Obama administration’s commitment to reforming VA -- even those who have supported the president’s policies and First Lady Michelle Obama’s work for veterans. The CNN story broke just hours after Michelle Obama and Jill Biden held a press conference touting a new veteran jobs project as part of their Joining Forces program, which is designed to connect veterans and their spouses to employers.

“It’s ironic that this Phoenix story breaks at the very same time that Michelle Obama is trying to do her best to help veterans get jobs,” Jones said. “While she is well-intentioned, her program is not addressing all the very serious problems veterans face, and neither is the administration. There's a real disconnect between the rhetoric and the reality. But that rhetoric from the Obamas has got to stop and the action has to start. Veterans are dying unnecessarily, and that’s unacceptable.”

Michael Zacchea, a retired Marine major who was wounded in a Fallujah firefight in 2004, said that getting veterans into the workforce “makes for a great sound byte, and I understand that Michelle Obama and Jill Biden are using this as a platform to cause awareness of veterans’ issues. But it’s not enough. Getting a job in a vacuum without any relationship to housing and access to health care is like spitting into the wind." He noted that neither the president nor the first lady comments much on controversies at the VA including backlogs, increasing suicides among veterans and an unfolding prescription drug crisis.

Since the CNN report broke, the Washington Free Beacon reported that Sharon Helman, director of the Phoenix VA hospital, received more than $9,000 in bonus pay in 2013, according to public records, and that leadership at the hospital was paid more than $700,000 in taxpayer money, according to publicly available salary data.

Helman previously served as director of the VA facility in Spokane, Wash., where the VA’s Office of Medical Investigations found the number of veteran suicides was being miscounted. Fox News reported that from July 2007 through the first week of July 2008, at least 22 veterans in the Spokane area committed suicide. But during that time, Spokane VA reported nine suicides out of 34 attempted suicides, Fox, military.com and other news services reported.

In a statement sent to CNN, Helman said, “It is disheartening to hear allegations about veterans’ care being compromised, and we are open to any collaborative discussion that assists in our goal to continually improve patient care." The VA sent an additional comment to CNN, stating, "We have conducted robust internal reviews since these allegations surfaced and welcome the results from the Office of Inspector General's review. We take these allegations seriously."

Members of both the House and Senate have called for emergency sessions to address this situation. Sen. John McCain and Sen. Jeff Flake, both Arizona Republicans, have called for a Senate investigation, and Sen. Bernie Sanders (I-Vt.), chair of the Senate Veterans Affairs Committee (SVAC), said the committee will hold a hearing after the VA inspector general completes its independent investigation.

In a letter to McCain and Flake, Sanders said he had urged the inspector general to expedite its investigation. Michael Briggs, a spokesperson for Sanders, told IBTimes, "The VA's Office of Inspector General already has investigators on the ground in Phoenix, and the VA told the Senate and House that they also have their own investigators there.”

The alleged problems at the Phoenix VA, which were initially reported by the Arizona Republic in mid-April, then on CNN, were based on information released during a House Veterans Affairs Committee hearing in Washington, when committee chair U.S. Rep. Jeff Miller (R-Fla.) testified about the list.

Numerous veterans as well as congressional sources say the unfolding scandal may be a catalyst for real change at the VA. Two congressional sources who asked not to be named told IBTimes that Miller received evidence from retired VA physician Foote and other sources that as many as 40 veterans may have died while awaiting VA care, as CNN reported. The sources said Miller turned over this evidence to VA's Office of the Inspector General, which operates independently from the agency. To protect the integrity of the investigation, the sources said the inspector general will not share the information with the VA or any outside parties.

Bandzul, the attorney for Veterans and Military Families for Progress, predicted that the Department of Justice and FBI will likely get involved. "OIG [the Office of the Inspector General] has no teeth," he said. "We can go back 21 years to the very first OIG report stating that the VA needs to improve claims-processing, and they never did improve it. This time it has to move past that."