[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT HEARING ON THE ADMINIS-
TRATION OF THE VETERANS BENEFITS
ADMINISTRATION'S PENSION PROGRAM
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
HOUSE OF REPRESENTATIVES
SUBCOMMITTEE ON DISABILITY ASSISTANCE
AND MEMORIAL AFFAIRS
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
_____________
SEPTEMBER 27, 2006
_____________
Printed for the use of the Committee on Veterans' Affairs
Serial No. 109-66
_____________
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COMMITTEE ON VETERANS' AFFAIRS
STEVE BUYER, Indiana, Chairman
MICHAEL BILIRAKIS, Florida LANE EVANS, Illinois, Ranking
TERRY EVERETT, Alabama BOB FILNER, California
CLIFF STEARNS, Florida LUIS V. GUTIERREZ, Illinois
DAN BURTON, Indiana CORRINE BROWN, Florida
JERRY MORAN, KANSAS VIC SNYDER, Arkansas
RICHARD H. BAKER, Louisiana MICHAEL H. MICHAUD, Maine
HENRY E. BROWN, Jr., South Carolina STEPHANIE HERSETH, South
JEFF MILLER, Florida Dakota
JOHN BOOZMAN, Arkansas TED STRICKLAND, Ohio
JEB BRADLEY, New Hampshire DARLENE HOOLEY, Oregon
GINNY BROWN-WAITE, Florida SILVESTRE REYES, Texas
MICHAEL R. TURNER, Ohio SHELLEY BERKLEY, Nevada
JOHN CAMPBELL, California TOM UDALL, New Mexico
BRIAN P. BILBRY, California JOHN T. SALAZAR, Colorado
JAMES M. LARIVIERE, Staff Director
SUBCOMMITTEE ON DISABILITY ASSISTANCE
AND MEMORIAL AFFAIRS
JEFF MILLER, Florida, Chairman SHELLEY BERKLEY, Nevada,
JERRY MORAN, Kansas Ranking
JEB BRADLEY, New Hampshire, Vice Chairman TOM UDALL, New Mexico
GINNY BROWN-WAITE, Florida LANE EVANS, Illlinois
PAIGE MCMANUS, Subcommittee Staff Director
C O N T E N T S
September 27, 2006
Page
Oversight Hearing on the Administration of the Veterans Ben-
efits Administration's Pension Program .................... 1
OPENING STATEMENTS
Chairman Miller ............................................ 1
Prepared statement of Chairman Miller ...................... 10
STATEMENTS FOR THE RECORD
Hon. Shelley Berkley, Ranking Democratic Member ............ 11
WITNESSES
McCoy, Jack, Associate Deputy Under Secretary for Policy
and Program Management, Veterans Benefits Administra-
tion, U.S. Department of Veterans Affairs ................. 2
Prepared statement of Mr. McCoy ............................ 12
POST-HEARING QUESTIONS FOR THE RECORD
Hon. Tom Udall ............................................. 21
OVERSIGHT HEARING ON THE
ADMINISTRATION OF THE VETERANS BENEFITS
ADMINISTRATION'S PENSION PROGRAM
________________
Wednesday, September 27, 2006
U.S. House of Representatives,
Subcommittee on Disability Assistance and
Memorial Affairs,
Committee on Veterans' Affairs,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:30 a.m., in Room 334,
Cannon House Office Building, Hon. Jeff Miller presiding.
Present: Representatives Miller and Udall.
Staff Present: Paige McManus, Majority Counsel and Mary Ellen
McCarthy, Minority Counsel.
Mr. Miller. Good morning, everybody. This Subcommittee meeting will
come to order. Ms. Berkley is on her way over, but I wanted to go
ahead and convene this final Subcommittee hearing for the 109th
Congress, I think Ms. Berkley and the other members of our Subcommittee
would agree that we have had an informative and what I feel a very
productive two years. The majority of our oversight hearings in this
Congress have intended to lay basically a groundwork or foundation for
the Subcommittee members on each of the VBA programs that we have
jurisdiction over, and today we are going to wrap up by looking at VA's
pension program. In the next Congress the full Committee and our
Subcommittee, Disability Assistance and Memorial Affairs, will delve
deeper into the issues facing VBA and the Board of Veterans' Appeals.
VA's nonservice-connected disability pension program provides financial
assistance to low income veterans who are totally or permanently
disabled as a result of a disability not related to military service,
or are age 65 or older. VBA also provides pension benefits to certain
low income surviving spouses and unmarried children of deceased
veterans with wartime service. There are approximately 530,000
pensioners, veterans and survivors who receive nearly $3.5 billion in
benefits annually.
[The statement of Hon. Jeff Miller appears on p. ]
**********INSERT**********
Mr. Miller. Today we have one panel. Testifying for the Veterans
Benefits Administration is Mr. Jack McCoy. He is Associate Deputy
Under Secretary for Policy and Program Management. He is accompanied
today by Mr. Steve Simmons, Deputy Director of the Compensation and
Pension Service. At Ms. Berkley's request we also have with us the
managers of the three Pension Maintenance Centers. That would be Ms.
Filipov from the Philadelphia Regional Office and Insurance Center, Mr.
John Limpose from the Milwaukee Regional Office, and Mr. Woody
Middleton from the St. Paul Regional Office. Mr. McCoy is the only
witness who will be testifying before us today. The others are here to
answer any questions that the Subcommittee members may have. We talked
about whether or not we wanted to put the timer on you today, Mr.
McCoy. We will not do that since you are the only person. That does
not mean that we would want you to go for the next two hours, but we
will give great latitude in your testimony.
We thank you all for being here. Until Ms. Berkley comes, I will let
Mr. Udall do a statement if he wants to. Do you want to make a
statement or wait for Ms. Berkley?
Mr. Udall. I would just put her statement in the record, because she
may or may not be here, and go ahead and go forward with our panel.
Mr. Miller. All right, very good. Without objection her opening
statement will be entered into the record. And with that, Mr. McCoy,
you may begin.
[The statement of Hon. Shelley Berkley appears on p. ]
**********INSERT**********
STATEMENT OF JACK MCCOY, ASSOCIATE DEPUTY UNDER SECRETARY FOR POLICY
AND PROGRAM MANAGEMENT, VETERANS BENEFITS ADMINISTRATION; ACCOMPANIED
BY STEVE SIMMONS, DEPUTY DIRECTOR, COMPENSATION AND PENSION SERVICE;
LUCY FILIPOV, MANAGER, PENSION MAINTENANCE CENTER, PHILADELPHIA,
PENNSYLVANIA REGIONAL OFFICE AND INSURANCE CENTER; JOHN LIMPOSE,
MANAGER, PENSION MAINTENANCE CENTER, MILWAUKEE, WISCONSIN REGIONAL
OFFICE; AND WOODY MIDDLETON, MANAGER, PENSION MAINTENANCE CENTER,
ST. PAUL, MINNESOTA REGIONAL OFFICE.
STATEMENT OF JACK MCCOY.
Mr. McCoy. Thank you. Mr. Chairman, and members of the Subcommittee,
I appreciate the opportunity to appear before you today to discuss the
VA pension program. The VA pension program provides financial
assistance to wartime veterans and surviving spouses and children of
wartime veterans based on financial need. Pension recipients currently
number over 530,000, including 330,000 veterans and 200,000 survivors.
Annual benefit payments total approximately $3.5 billion. The
disability pension program assists wartime veterans with low incomes
who are permanently and totally disabled due to causes not related to
military service. Low income veterans aged 65 and older may be
eligible for a service pension. The requirements and conditions for
which are the same as the disability program, except there is no
requirement that the veteran be permanently and totally disabled.
Both the disability pension program and the age 65 and older service
pension require 90 days or more of active military service during a
period of war or 90 days or more of continuous active military service
beginning or ending during a period of war. The veteran's discharge
must have been under conditions other than dishonorable.
In addition to needy veterans, VA also provides pensions to low income
surviving spouses and unmarried children of deceased veterans with
wartime service. To be eligible, spouses must not have remarried and
children must be under age 18 or age 23 if attending school. Children
who become incapable of self-support because of a disability before age
18 may be eligible for death pension as long as the condition exists
unless the child marries or the child's income exceeds the applicable
limit.
Under the VA pension programs, payments are made to bring beneficiaries
total income, including all earnings as well as retirement as social
security income, to a level set by Congress. The maximum annual
pension currently payable to a veteran with no dependents and no other
income is $10,579. The maximum annual death pension payable to a
surviving spouse with no dependents is currently $7,094. Payments are
reduced dollar for dollar by the amount of countable income of the
veteran, spouse or dependent children.
The VA pension rolls have declined steadily from a high of almost two
million beneficiaries in 1978 to current levels of just over 530,000.
There are obvious contributing factors causing the reduction in the
number of pension recipients. Foremost would be the increasing death
rate among veterans of World War II and the earlier wartime periods,
since most veterans who meet the income requirements for pension are
eligible based on age and the low income limits of the programs. The
sharp decline in the number of pension recipients has also raised
concern in VA that our most needy veterans and survivors, among them
the homeless and the destitute elderly, may not be aware of the pension
programs or that they may qualify for monthly benefits. As a result of
this concern, VBA has been expanding our outreach to elderly, low
income veterans and surviving spouses.
In November of 2005 we issued a news article entitled, VA Reaches Out
to Veterans and Their Families from Every Generation that has been
printed in 176 newspapers in 23 states with a readership of 10.5
million. VBA is also working closely with the Veterans Health
Administration and the National Cemetery Administration to reach
potentially eligible veterans and surviving spouses. Information about
pension benefits is now included in the enrollment welcome letters sent
by VHA to veterans eligible for healthcare under category five. Copies
of VBA Pamphlet 21-00-1, A Summary of VA Benefits and Services, are
distributed to VHA facilities for placements and locations where
veterans often visit. Better communications have been established with
the VHA Social Work Service to ensure social workers are aware of the
pension programs, and can identify and assist veterans who may have
entitlement. VA Pamphlet 21-03-1, VA Benefits for Survivors, is now
distributed to all national cemeteries and training on our benefit
programs is provided to cemetery directors.
There are also other venues through which VBA is seeking to expand
outreach to the elderly veteran population. VBA distributes copies of
VA Pamphlet 21-00-1 to over 1,000 Social Security Administration
offices. VBA has also strengthened its working relationship with the
Department of Health and Human Services Administration on the Aging,
and we have become more actively involved with area agencies on the
aging. To help spread the word about our pension program, we set up
information booths at such events as AARP conferences and funeral
director conventions.
In January of 2002, VBA activated three Pension Maintenance Centers, or
PMCs, at the Philadelphia, Milwaukee and St. Paul Regional Offices to
process all pension award adjustments and account maintenance
activities. There were two particularly important considerations in
the decision to consolidate. First, by moving pension maintenance
activities out of other Regional Offices, the Regional Offices are able
to focus their attention and resources on processing of new and
reopened disability compensation claims and appeals. The second
consideration was that by consolidating to three PMCs we could increase
the efficiency and improve the quality and consistency of our pension
processing activities.
National accuracy reviews of pension processing are conducted in
accordance with VBA's Systematic Technical Accuracy Review system,
STAR. STAR reviews show that the accuracy of claims processed by the
PMCs has significantly increased in the past year, from 80 percent in
fiscal year 2005 to 91 percent in fiscal year 2006.
VBA has implemented a number of changes to improve the quality and
consistency of pension maintenance activities. In March of 2006 each
Pension Maintenance Center designated a quality review coordinator
responsible for quality improvement oversight. The individuals
monitor all quality issues, such as training, mentoring, monthly
quality reviews, and local and national STAR findings. Each quality
review coordinator also works closely with the other two PMCs quality
review coordinators and keeps division management apprised of all
efforts through regular conference calls and meetings.
We will continue our efforts to improve our training programs and tools
and ensure the quality and consistency of pension benefit delivery.
Mr. Chairman, that concludes my testimony. We will be happy to respond
to any questions that you or other members of the Committee might have.
[The statement of Mr. McCoy appears on p. ]
**********INSERT**********
Mr. Miller. Thank you very much, Mr. McCoy. You talked about your
outreach programs and that they were successful. How do you quantify
the success of your outreach or how do you measure it?
Mr. McCoy. I believe the biggest measurement is how much we actually
do. How many people we can actually talk to and get out and meet, and
each one of the Pension Maintenance Centers works closely with the
Regional Offices that are under their jurisdiction. And, of course,
people from those regional offices meet with County Veterans Service
Officers, State Directors of Veterans Affairs, and groups like that.
Mr. Miller. Can you tell any measurable difference, though, in those
who make application since you started the outreach? Or expanded the
outreach?
Mr. McCoy. Steve?
Mr. Simmons. I do not have that answer.
Mr. Miller. It would be interesting to know. Obviously you are doing a
lot of work. You are touching a lot of veterans and beneficiaries.
But it would be interesting to know if all of the effort is actually
increasing the amount of applications for pensioners.
Now, I think the current backlog of claims is just under 17,000 and
what I would like to know is, does this reflect the new pension claims
only? Or does it include routine follow-up issues such eligibility
verification reports? And also, would consolidating all original
pension claims to the Pension Maintenance Centers improve processing
times and consistency of decisions?
Mr. Simmons. The backlog at the PMCs?
Mr. Miller. Yes.
Mr. Simmons. It does not include the original claims at this time.
Mr. McCoy. As Steve said, we have not consolidated the original
pension claims to the PMCs at this time.
Mr. Miller. Would it improve the processing times and consistency?
You know, that is the question.
Mr. McCoy. Yes sir, I believe it will. I mean, from when we first
started the consolidation of PMCs, I think in the last year, they have
made tremendous strides. And I believe it would. Admiral Cooper and I
have discussed that, and when Admiral Cooper is comfortable that the
PMCs are at that position then our plan would definitely be to finish
the consolidation.
Mr. Miller. We have talked a lot about cyber security in this
Committee. Obviously there was a lot of angst when the laptop computer
was missing. There are some proposed changes in VA cyber security and
the polices that affect VBA's ability to match the pensioner's income
data with Social Security. Do you see any problems with being able to
make those matches given some of the changes that are being made?
Mr. McCoy. No sir. One thing that we will make sure of is that, if
there is any security issue, we will have it covered. And we have MOUs
with everyone that we do any type of match with.
Mr. Miller. But what I am more concerned with is being able to get the
data to talk back and forth to each other. You do not foresee a
firewall problem?
Mr. McCoy. No sir.
Mr. Miller. Mr. Udall?
Mr. Udall. Thank you, Mr. Chairman. Mr. McCoy, according to the most
recent evaluation of VA's pension program, Congressional intent of the
program is not being met due to the low level of benefits.
Congresswoman Berkley has introduced H.R. 5119 to begin to increase
benefits for veterans. Does the Administration support increasing
pension benefits so that our wartime veterans and their survivors can
afford food, shelter and medical care?
Mr. McCoy. Sir, I cannot speak for the Agency in that regard, if the
Agency actually supports it. We have had a number of conversations
about it. I could not answer that at this time.
Mr. Udall. Many Native American communities have high levels of
poverty and large percentages of wartime veterans. Has the VA done any
special outreach to Native American communities concerning the pension
program?
Mr. Middleton. Congressman Udall, I am Woody Middleton from the St.
Paul Pension Center. We have a number of Native American states and,
to answer your question, yes. We routinely visit the Dakotas in
outreach to their Native American communities. I do not have
information as to the number of Native Americans on the rolls.
Mr. Udall. We have over ten percent of our population as Native
American in New Mexico. Are you aware of any figures or numbers there?
And many of them live in very rural areas. The best means of
communication is usually by radio, and then asking them to come into a
Chapter House or something along that line. On the Navajo Reservation
for sure, and the Pueblos sometimes you use different techniques. Are
you aware of anything you have done in the southwest or in New Mexico?
Mr. Middleton. Mr. Udall, I am not aware of any means that we are
pursuing to reach these folks. We do acknowledge that there is an
importance to reach all our veterans who need pension benefits. I am
sure with the Compensation and Pension Service we will pursue avenues
to reach the Native American veterans.
Mr. Udall. Thank you. Many elderly veterans and survivors are
spending their life savings on medical care. How can the VA improve its
outreach to veterans paying for nursing home care or those receiving
care at home instead of nursing home care?
Mr. Simmons. Congressman, all of our regional offices conduct outreach
to homeless and to the elderly. We work with the AARP and a number of
other organizations to reach the elderly and other low income groups.
So our Albuquerque Regional Office would be conducting outreach in many
different formats throughout the state of New Mexico.
Mr. Udall. Thank you. Mr. Chairman, yield back.
Mr. Miller. Let me ask another question about the consolidation of
pension activities to the three offices. How much time do you think was
freed up at the Regional Offices to focus on other types of claims?
And how has the quality of eligibility verification reviews been
impacted?
Mr. Simmons. The quality of the work has increased dramatically over
the past year, and I think that the consolidation is directly related
to that. The consolidation has also freed up our regional offices.
Rather than trying to train our Veterans Claims Representatives to
handle both the income related issues and the disability compensation,
and both areas are complicated, we have been able to specialize in the
regional offices on the compensation. In the PMCs, focusing on the
complex activities associated with the pension adjustments.
Mr. Miller. Mr. McCoy, you spent a couple days at the St. Paul PMC.
Mr. McCoy. Yes sir.
Mr. Miller. Talk to us a little bit about what you found there.
Mr. McCoy. I found an awful lot of employees very dedicated to being
part of the PMCs. One of the questions that I had was, you know, in
St. Paul they are still working compensation claims in the Veterans
Service Center. So one of the questions was how often do we pull people
from the Pension Maintenance Center to help in compensation. And I was
assured that that does not happen, which made me feel really good
because that was one of the things that we wanted to make sure did not
happen. We wanted to know that the Pension Maintenance Center only did
Pension Maintenance work. That is what they are trained to do and that
is what I saw.
Mr. Miller. How many people are employed there?
Mr. McCoy. In St. Paul in the Pension Maintenance Center?
Mr. Miller. Yes.
Mr. Middleton. Mr. Chairman, we have 137 employees.
Mr. Miller. Mr. Udall, do you have another question?
Mr. Udall. Yes, I would like to direct a couple of questions to the
Pension Service Center managers, Mr. Chairman. What functions are
currently performed at VA Regional Offices and what functions are
performed at the Pension Management Centers? And is there a liaison at
the Regional Office for cases involving both offices?
Ms. Filipov. I can answer that. Right now the home Regional Offices
handle service connected disability claims and also determination on
the original pension claims. In other words, the first award on
whether to put someone on the pension rolls. The Pension Maintenance
Centers handle maintenance actions once someone is receiving pension.
And I believe the second part of your question was, I am sorry, can you
repeat the second?
Mr. Udall. Is there a liaison at Regional Offices for cases involving
both offices?
Ms. Filipov. There are liaisons, people that we work with when we need
information from each other and we normally communicate by email and
telephone contact.
Mr. Udall. What do you believe is the biggest improvement in
processing of pension claims by having Pension Management Centers?
Ms. Filipov. I believe the increase in our quality coming from 80
percent in fiscal year 2005 and being closer to 91 percent now.
Mr. Udall. What is the most difficult aspect of your job?
Ms. Filipov. The cyclical nature of the workload in the Pension
Maintenance Center. We probably receive 65 percent of our workload in
a very short time frame, from January through March, and we spend a lot
of time working that inventory off.
Mr. Udall. Do any of the other pension managers have any comments on
the questions I just asked?
Mr. Middleton. I would like to echo Ms. Filipov's remarks about the
cyclical nature of the pension workload. We all experience tremendous
backlogs at the beginning of the calendar year, January, February,
March time frame. And it is an enormous workload, but collaborative
efforts with C & P Service, training, and consistency in the
procedures, we have managed that work.
Mr. Udall. Is there some way that you can address the cyclical nature
of the demands that are occurring there?
Mr. Limpose. Yes sir. In late December of every calendar year,
anybody that is on the VA rolls for pension will receive an Income
Verification report and will also be sent an unreimbursed Medical
Expenses form to file for retro payments. Each PMC will have
approximately 80,000 to 100,000 of those types of requests go out, and
then they come back to us, usually, as Lucy said, within the first
three months of every calendar year.
Mr. Udall. Thank you very much. Yield back, Mr. Chairman.
Mr. Miller. Thank you very much. We appreciate it. It has been an
informative hearing, although it may appear short to some. We know
that the pension program, as illustrated by the testimony, provides low
income veterans and survivors valuable financial resources on behalf of
a very grateful nation. And I want to thank VBA for their testimony,
and for working with us throughout the 109th Congress. You have all
helped educate the Subcommittee on the many programs that VBA
administers, and I look forward to working with you next Congress to
address concerns and make improvements in these programs. Mr. Udall,
it has certainly been a pleasure to work with you and Ms. Berkley and I
look forward to our next Congress together.
Without objection, members will have five legislative days to submit
materials for the record as well as post hearing questions to the
witnesses. And with nothing further, this hearing is adjourned.
[Whereupon, at 10:55 a.m., the Subcommittee was adjourned.]