[Senate Hearing 109-425]
[From the U.S. Government Publishing Office]
S. Hrg. 109-425
THE RISING NUMBER OF DISABLED VETERANS DEEMED UNEMPLOYABLE: IS THE
SYSTEM FAILING? A CLOSER LOOK AT VA'S INDIVIDUAL UNEMPLOYABILITY
BENEFIT
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
OCTOBER 27, 2005
__________
Printed for the use of the Committee on Veterans' Affairs
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
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COMMITTEE ON VETERANS' AFFAIRS
.........................................................
Larry E. Craig, Idaho, Chairman
Arlen Specter, Pennsylvania Daniel K. Akaka, Hawaii, Ranking
Kay Bailey Hutchison, Texas Member
Lindsey O. Graham, South Carolina John D. Rockefeller IV, West
Richard Burr, North Carolina Virginia
John Ensign, Nevada James M. Jeffords, (I), Vermont
John Thune, South Dakota Patty Murray, Washington
Johnny Isakson, Georgia Barack Obama, Illinois
Ken Salazar, Colorado
Lupe Wissel, Majority Staff Director
D. Noelani Kalipi, Minority Staff Director
C O N T E N T S
----------
October 27, 2005
SENATORS
Page
Craig, Hon. Larry E., U.S. Senator from Idaho.................... 1
Akaka, Hon. Daniel K., U.S. Senator from Hawaii.................. 3
Murray, Hon. Patty, U.S. Senator from Washington................. 3
Salazar, Hon. Ken, U.S. Senator from Colorado, prepared statement 6
Thune, Hon. John, U.S. Senator from South Dakota................. 20
Jeffords, Hon. James M., U.S. Senator from Vermont............... 20
WITNESS
Statement of Hon. Daniel Cooper, Under Secretary for Benefits,
Department of Veterans Affairs; accompanied by Renee Szybala,
Director, Compensation and Pension Service; Judith Caden,
Director, Vocational Rehabilitation and Employment Service; and
Patrick Joyce, M.D., Chief of Occupational Health, Washington
VA Medical Center.............................................. 7
Prepared statement........................................... 9
Response to written questions submitted by:
Hon. Larry E. Craig...................................... 12
Hon. Daniel K. Akaka..................................... 17
Hon. Patty Murray........................................ 18
Hon. James M. Jeffords................................... 19
Statement of Cynthia Bascetta, Director, Education, Workforce and
Income Security Issues, U.S. Government Accountabilty Office... 31
Prepared statement........................................... 33
Response to written questions submitted by Hon. Larry E.
Craig...................................................... 41
Statement of Rick Surratt, Deputy National Legislative Director,
Disabled American Veterans..................................... 42
Prepared statement........................................... 43
Response to written questions submitted by:
Hon. Larry E. Craig...................................... 49
Hon. Daniel K. Akaka..................................... 51
APPENDIX
Article, ``VA's Bad Review,'' October, 26, 2005.................. 63
THE RISING NUMBER OF DISABLED VETERANS DEEMED UNEMPLOYABLE: IS THE
SYSTEM FAILING? A CLOSER LOOK AT VA'S INDIVIDUAL UNEMPLOYABILITY
BENEFIT
----------
THURSDAY, OCTOBER 27, 2005
U.S. Senate,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:04 p.m., in
room 418, Russell Senate Office Building, Hon. Larry Craig
(Chairman of the Committee) presiding.
Present: Senators Craig, Thune, Isakson, Akaka, Jeffords,
Murray, Obama, and Salazar.
OPENING STATEMENT OF HON. LARRY E. CRAIG,
U.S. SENATOR FROM IDAHO
Chairman Craig. Good afternoon, ladies and gentlemen, and
welcome to the Veterans' Affairs Committee.
We have entitled this hearing ``The Rising Number of
Disabled Veterans Deemed Unemployable: Is the System Failing?''
Today the Committee will take a closer look at what I would
consider a ``benefit of last resort.'' I am, of course,
speaking about VA's individual unemployability, or ``IU,''
benefit.
With today's modern technology, individuals with
disabilities have more opportunities than ever before to become
productive members of society. I want to hear what VA is doing
to make sure these opportunities are made available to the
brave men and women who have served our country in uniform.
This is not only good for the mental health and long-term
financial benefit of our veterans, but for America's own
socioeconomic vitality. We know that employment has salutary
effects on our physical and mental health and that it improves
our self-esteem. In a brochure published by the National Mental
Health Association, individuals with mental illness are
encouraged to pursue employment opportunities on their path to
recovery. The brochure reads, and I quote, ``People who have
recovered say that meaningful work, including volunteer jobs,
is one of the biggest aids to their getting and staying well.''
Even spiritual leaders recognize the virtues of employment.
John Paul II wrote that, ``Work is a good thing for man . . .
something worthy . . . something that corresponds to man's
dignity, that expresses this dignity and increases it.''
With that understanding of what employment means to our
health and sense of self-worth, the chart behind me represents
what I call a worrisome trend. As you can see, there has been
an alarming increase in the number of veterans deemed
unemployable by VA, a 107 percent increase between 1999 and the
year 2004. Those veterans are in receipt of a benefit that is
based, in essence, on an undesirable life circumstance, a life
circumstance that has no positive effect on health of mind,
body or soul. As I said at the outset, any benefit based on
such a life circumstance should rightly be described as a
benefit of last resort. While the benefit may certainly be
appropriate for some, the presumption must be that every
individual with disabilities can overcome barriers to
employment. A positive, employment-oriented attitude toward
veterans with disabilities must be VA's focus, and the
eligibility assessment of IU should reflect that attitude.
The increase in IU beneficiaries presents the Committee
with various questions: Does VA use its vast health and
vocational rehabilitation resources to help veterans with
disabilities obtain jobs and to avoid an unemployability label?
If IU is granted, are veterans abandoned in that status, or
does VA conduct appropriate follow-up? Does this benefit do a
disservice to veterans by incentivizing unemployment?
Fundamental to our inquiry is to establish an understanding
of what the purpose of IU is and the standard VA uses in
determining eligibility for it. One of the stunning things I
learned in preparation for this hearing is the age demographic
of IU beneficiaries. As you can see from the charts behind me,
a fair number of IU recipients are well beyond traditional
retirement ages. These charts beg a question that I think is
clearly obvious: Why is a benefit based on unemployability
being paid to individuals who, on account of age, would likely
not be looking for work anyway? In other words, they are at the
retirement age by even today's modern terms. These charts are
reflective of what I believe is a concern.
Fortunately, we are joined this afternoon by witnesses who
can help us find some answers to all of these questions. On our
first panel we are joined by the Hon. Daniel Cooper--Dan, thank
you for being here--VA Under Secretary for Benefits. He is
accompanied by Renee Szybala, Director of the Compensation and
Pension Service; Judith Caden, Director of Vocational
Rehabilitation and Employment Services; and Dr. Patrick Joyce,
Chief of Occupational Health at the Washington VA Medical
Center.
On our second panel we are joined by Richard Surratt,
Deputy, National Legislative Director of the Disabled American
Veterans; and Cynthia Bascetta, Director of Education,
Workforce and Income Security at the Government Accountability
Office.
So I want to welcome all of you this afternoon, and thank
you for the time it has taken for you to prepare for this
hearing.
Before we go to our first panel, we have been joined by
several of our colleagues. Let me turn first to the Ranking
Member, Senator Danny Akaka.
Senator Akaka.
STATEMENT OF HON. DANIEL AKAKA, U.S. SENATOR
FROM HAWAII
Senator Akaka. Thank you very much, Mr. Chairman. I join
you today in this very important hearing. As you mentioned, we
certainly would like to know more about IU.
I first want to add my welcome to our panelists here, as we
will examine a very important benefit granted by the Department
of Veteran Affairs, individual unemployability, commonly
referred to as IU.
Individual unemployability has existed since the beginning
of the last century. Congress understood that the VA rating
schedule cannot always capture the degree that an injury or
disease impairs an individual. At the outset, let me say that I
agree with this sentiment, because each person is unique.
Individual unemployability is necessary to overcome the
inadequacies of the rating schedule. We can all agree that VA
should do everything in its power to help rehabilitate injured
veterans.
Currently various programs within VA such as compensation
and pension, vocational rehabilitation and employment and
health care, do not work together when determining ratings for
certain claims including IU. Bringing everyone to the table
when making IU determinations for individual veterans would
require a major increase in funding. I want to hear more about
this today.
We all know about the funding shortfall VA health care had
earlier this year. VA finally admitted it had a funding
shortfall after months of pressure from myself and my
colleagues as well. We do not want this repeated in the
benefits arena. I sincerely hope that VA is provided with
adequate funding if Congress decides to revamp IU.
I am also concerned about VA's capability to simultaneously
conduct its PTSD review and possibly restructure IU. Congress
has not been provided with the funding and staffing needed for
a PTSD review, which will be a major burden on VA resources. It
seems ill-advised for Congress to initiate another project for
the VA such as restructuring IU without hard facts on the PTSD
review.
Lastly, and perhaps most importantly, I am concerned about
the message that changing IU would send to our veterans. The
PTSD review has sent shockwaves through the veteran community.
A change in IU or other veterans benefits may have a similar
effect. I view this as the perfect storm. I question whether it
is equitable for veterans and in the best interest of the VA to
follow this path during a time of conflict abroad. I urge the
VA, when discussing IU, PTSD, or any other benefit issue, to
maintain an open dialog with veterans and Congress.
Mr. Chairman, again, I thank you and the panelists, and
look forward to their testimony.
Chairman Craig. Senator, Thank you very much.
Now let me turn to our colleague, Senator Patty Murray.
Patty, thank you and thank you for being here.
STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR
FROM WASHINGTON
Senator Murray. Thank you very much, Mr. Chairman, and
thank you and the Ranking Member for hosting today's hearing,
and of course I want to thank both of our panels who will be
here with us today.
Mr. Chairman, I am very concerned about the need to provide
employment services to our veterans, but there are some
veterans who, because of their injuries, are simply unable to
work. We need to ensure that we are taking care of them in the
most effective way possible.
I do not think the system is broken. We are providing the
individual unemployability benefit we promised our severely
disabled veterans. But I do think it is essential that we
ensure that veterans who are receiving, or are in the process
of receiving IU have access to medical and employment services.
I am very concerned, Mr. Chairman, that an effort to
increase the scrutiny placed on severely disabled veterans
would really increase the stigma on veterans who are trying to
access the resources that they have been promised. I am very
concerned that this will hurt our veterans.
I also really worry that a review will demand increasing
the VA's discretionary budget by substantial amounts with
little known or quantifiable benefit. I know we are here today
to talk about veterans who have been granted IU benefits
because their disabilities were categorized, after much
scrutiny, by the way, at 70 percent or more. This means that
beyond physical injuries that prevent them from participating
in many activities, they could have trouble with mental health
issues such as suicidal thoughts, problems with speech, near
continuous panic or depression, impaired impulse control, and
difficulty in adapting to stressful environments.
It seems to me to mandate new screenings and work endlessly
to get veterans with a 70 percent disability rating to work
seems unnecessarily burdensome for many of our disabled
veterans. As much as I wish that I could sit here and say they
will easily work again, I think reality has shown us it is a
constant and severe struggle.
I believe in providing employment services to disabled
veterans, but the States cannot provide services for these
individuals, and the applicable jobs are really very few and
far between. I question any effort to force more disabled
veterans off IU and into the workplace when we have not worked
to fund the services they need or to help create the jobs that
they are fit for.
In my home State of Washington, disabled individuals have a
70 percent unemployment rate, and I suspect that is probably
close to the national average. That means 14,000 people are
waiting for vocational rehab. So when we talk about trying to
force disabled veterans to seek employment instead of IU, we
are talking about forcing them to compete with thousands of
other disabled Americans.
I want to be clear. I oppose any effort to increase the
scrutiny of our veterans' claims solely to save money,
especially when chances are that veterans more than 70 percent
disabled will likely find it extremely difficult to get and
keep employment. In fact, the proposed review of 72,000 PTSD
cases has already increased the stigma surrounding PTSD, and on
top of the 800,000 cases the VBA needs to review this year,
these cases will drain limited resources and delay benefits to
thousands of our veterans. Any review sets a dangerous
precedent and increases the stigma against our veterans and it
will drain limited VBA resources.
Mr. Chairman, one veteran in New Mexico has tragically
committed suicide due to this review. I want to enter into the
record an article about Greg Morris. He's a Vietnam veteran who
killed himself last week. The article states, and I want to
quote. It says:
On October 8th, Greg Morris, 57, was found by his wife,
Ginger, in their home in Chama, New Mexico. For years Morris
had been receiving monthly VA benefits in compensation for post
traumatic stress disorder. Next to his gun and purple heart was
a folder of information on how the VA planned to review
veterans who received PTSD checks to make sure those veterans
really deserved the money.
I think the scrutiny needs to stop. This Committee needs to
have a clear understanding of what the VA will get out of any
effort to look harder at benefits before moving forward with
another effort.
Last week I hosted a hearing of the Employment and
Workplace Safety Subcommittee on Enhancing Cooperation Between
Employers and Guardsmen Reservists. That hearing clearly
highlighted the vital need to increase resources for our Guard
and Reserve to help them access employment after their service
in Iraq and Afghanistan. I think instead of looking for ways to
strip severely disabled veterans' benefits, this Committee
ought to be examining how we can have a full hearing on USERA
and TAP and Labor VETS and other programs that help our
veterans get employment. I think we should analyze why the
system is failing our Guard, Reserve and other veterans, and
although I think efforts need to be made to provide veterans
with employment assistance, I stbelieve we should direct our
focus to those who are more likely to find employment.
We have talked, Mr. Chairman, you and I, about the budget
with the VA many times. I have to say I am very concerned about
any proposals that are put forth here today if they would
demand increased funding to get veterans with 70 percent
disability fully employed. I wish that could happen, but after
13 years working on many of these issues I think it is fair to
say, as much as we hate to say it, that some square pegs just
do not fit in a round hole no matter how hard you push.
In the meantime we need to remember that we have thousands
of Iraq veterans who are trying to get help with employment. We
should be asking, what we are trying to do to improve services
for them? I do not understand why we are focusing on stripping
benefits from disabled veterans when we have thousands of Iraqi
veterans today who need our help getting jobs.
If we are concerned about the increased number of veterans
who are getting IU, why are we not working harder to get those
thousands of OIF and OEF veterans, who are coming back every
day, jobs? Those are the questions that I will have for this
Committee today, and I think our Nation's veterans deserve an
answer.
Thank you, Mr. Chairman.
Chairman Craig. Thank you, Patty.
Senator Salazar, Ken, do you have any opening comment
before we turn to our panel?
Senator Salazar. Thank you, Mr. Chairman, and Senator Akaka
for holding this hearing. I have a statement, but I will just
submit it for the record.
Chairman Craig. Thank you.
[The prepared statement of Senator Salazar follows:]
Prepared Statement of Hon. Ken Salazar, U.S. Senator from Colorado
Thank you, Chairman Craig and Senator Akaka, for bringing attention
to this important issue.
I think most of us, inside and out of VA, would agree that
Individual Unemployability is a vital tool in VA's benefit adjudication
process. It allows VA to look at veterans individually and provide fair
treatment on a case-by-case basis, where the disability ratings
schedule does not.
Many of us would also agree that the way VA administers IU has also
led to some significant problems. These include inconsistent
application of IU across the country, disincentives for mental health
treatment and for work, and in some limited cases the possibility of
fraud and abuse.
However, I think there is significant disagreement about what to do
about these problems.
The problems with IU are symptoms of the same disease that causes
veterans to wait years for disability claim decisions and currently
keeps 340,000 veterans in bureaucratic limbo as they wait for claims
decisions. VBA's claims adjudication process is broken.
One symptom of this is that tens of thousands--perhaps hundreds of
thousands--of veterans are not getting the benefits they deserve. The
other is that VA is unable to stop some instances of fraud and abuse.
These two problems come from the same source.
We cannot minimize the importance of fraud. Every dollar that goes
to a fraudulent claim or is lost because of administrative
inefficiencies could, in theory, be devoted to better care for
veterans. If the VBA were able to crack down on legitimate IU fraud, it
could save taxpayers hundreds of millions of dollars.
However, any cure that fails to address the long waiting lists,
deferred benefits, and underlying problems at VBA is unfair to our
Nation's veterans.
The VA's proposed plan to review 72,000 PTSD cases, including IU
cases, is a perfect example of a one-sided, unfair approach. This
review will only look at mistakes made in giving veterans full
benefits, not at cases where veterans might be eligible for additional
assistance. I am proud that the U.S. Senate passed legislation to put a
check on this review. And I am proud to work with my colleagues
Senators Obama, Akaka, Murray, Rockefeller, and Durbin to fight for
this legislation.
We need comprehensive and fair approaches to dealing with IU's
problems.
I support efforts to strengthen VA's ability to verify IU
eligibility, so long as there are not undue burdens on applying
veterans. I support efforts to improve the mental and physical health
of our veterans so that they can re-enter the workforce and lead more
fulfilling lives. However, private-sector back-to-work initiatives that
include penalties and reduced benefits would be inhumane if applied to
our disabled veterans. I support efforts to standardize IU ratings for
PTSD, so long as the complexities of individual mental health cases are
not ignored.
The IU system can be reformed, but we have to recognize that
Veterans benefits are not the same as private sector disability or
unemployment insurance. Veterans have earned a special status because
of their service to the Nation.
Another step we need to take immediately is fixing the concurrent
receipt problem for our IU veterans. They should not have to wait years
for the benefits they have earned. I hope this Committee can address
that issue soon.
Over the long term, we need to make sure that VBA and BVA have the
manpower, and resources to do their jobs. We also need to continue
improving the fairness and efficiency of the system. We need to
continue adjusting the system, from gradual small administrative
changes, such as improving quality-control measures, to more
significant legislative reforms, such as simplifying the appeals
process in a way that preserves veterans' rights.
I thank the Chair for my time and look forward to the hearing.
Chairman Craig. Patty, I would only say, before we turn to
the panel, this is not about round pegs in square holes. This
is about round pegs in round holes and square pegs in square
holes, and it is the job of this Committee for thorough and
responsible oversight. This is not about reforming a program
until we understand the program. And we do not understand the
program until we open the door, shed in the light, and look at
it. I will never step back from oversight, as critical as it
may be perceived in the beginning, or even the results in the
end. It is our fiduciary and responsibility to all veterans to
make sure that the services we are paying for them get to them.
I would hope you would view this hearing in that context,
and not as a ``gotcha,'' but as a ``helps ya.'' That is the
intent of this hearing.
Senator Murray. I appreciate that, Mr. Chairman. I would
just say, that I agree it is extremely important that we spend
our money wisely, but we have to do it in a way that does not
target veterans who are receiving these resources for very
serious reasons and make them feel guilty----
Chairman Craig. Then let us find out if that is the case.
Thank you.
Let us turn to our first panel. Dan, thank you very much
for being here with your staff and those who are providing
these services at VA. We look forward to your testimony. Please
proceed.
STATEMENT OF HON. DANIEL L. COOPER, UNDER SECRETARY FOR
BENEFITS, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY RENEE
SZYBALA, DIRECTOR, COMPENSATION AND PENSION SERVICE; JUDITH
CADEN, DIRECTOR, VOCATIONAL REHABILITATION AND EMPLOYMENT
SERVICE; AND PATRICK JOYCE, M.D., CHIEF OF OCCUPATIONAL HEALTH,
WASHINGTON VA MEDICAL CENTER
Mr. Cooper. Thank you, sir. Mr. Chairman, Members of the
Committee, thank you for the opportunity to review with you
this important issue of individual unemployability. I am
pleased to be accompanied, as you stated, by Ms. Renee Szybala,
who is Director of the Compensation and Pension Service; Ms.
Judith Caden, who is Director of the VA's Vocational
Rehabilitation and Employment Service; and Dr. Patrick Joyce,
who is Chief Physician of Compensation and Pension Program at
the Washington, DC VA Medical Center.
Individual unemployability, or IU, is the basis upon which
VA pays service-connected disability compensation at the 100-
percent rate to qualified veterans with combined ratings that
are less than 100 percent. The VA rating schedule provides for
an award of IU benefits when the veteran is unable to secure
substantially gainful employment or occupation as a result of
his or her service-connected disabilities. To be eligible for
IU benefits, the rating schedule requires that a veteran have
either a single 60-percent disability evaluation or a combined
evaluation of 2 or more disabilities at 70 percent, with one of
those 2 or more being a 40-percent disability.
The 1945 rating schedule established that age was not to be
considered a factor in evaluating service-connected disability,
and an entitlement to IU could not be based on advancing age or
additional non-service-connected disability.
The number of veterans rated totally disabled based on IU
has more than doubled in the last 6 years. There are several
factors that possibly have had an impact on this increase. I
cannot evaluate the degree to which each has impacted it.
Since 1999, the number of veterans receiving disability
compensation on our rolls in total has increased 17 percent
from 2.2 million in 1999 to 2.6 million today. There has also
been an increase in the average combined evaluation over the
same period. Advancing age, diabetes, various presumptive
cancers, as well as a significant increase in a number of
veterans awarded service connection for PTSD, account for a
substantial portion of this increase. However, court decisions
in 1999 and since, have also had a direct impact on our
ratings. They specifically held that VA must infer a claim for
IU if the veteran's claim for increased disability meets the
combined evaluation criteria which I mentioned, and that there
is evidence of inability to engage in substantially gainful
employment due to service-connected disability.
VA has not and does not currently require an employment
assessment by vocation or rehabilitation staff as part of the
IU determination. A veteran's participation in a program of
rehabilitation, education and training does not preclude a
total disability rating based on IU. However, every veteran who
receives an original claim or an increase in disability will
receive the information on our VR&E program and be strongly
encouraged to participate in that Vocational Rehabilitation and
Employment program.
Veterans with IU ratings may receive vocation and
rehabilitation benefits under the VR&E program. Our regulations
allow a veteran who is receiving IU benefits to work 12
consecutive months in substantially gainful employment before
any change can be made in the IU determination.
If the rating official finds that a medical examination is
necessary to determine entitlement to IU, an examination or
opinion request is then submitted. The medical examiner's
report should describe the specific disability effect on the
veteran's daily activities and his or her ability to work. Once
a veteran is awarded IU benefits and until age 70, submission
of an annual employment certification is required. This
procedure was resumed this September after having been
suspended for approximately 6 years.
Veterans receiving IU benefits are subject to VA's annual
income verification match. The income verification match uses
Internal Revenue Service and Social Security Administration
income records to identify IU beneficiaries with earned income
above the earnings threshold.
The Inspector General's recent review of compensation
payment found that a disability payment variance among the
various States was affected by several factors, including
demographics, as well as the incidence of PTSD and the
subsequent award of IU benefits based on that condition. The
well-publicized findings of the IG, as well as a significant
increase in the number of identified IU cases with apparent
income above the poverty threshold, led us to examine our
existing IU procedures and regulations to determine if changes
were needed.
We have reinstated the annual employment certification. We
have also reinforced existing procedural guidelines for IU
determinations. We will continue to work to provide additional
training for employees and to identify ways to strengthen and
clarify our procedural requirements to ensure the integrity and
the consistency of this very important benefit.
The IU benefit has a long history, going back to 1934. It
does fill a critical gap when the ratings schedule fails to
adequately address the impact of disability in a specific
veteran's circumstance. We believe that IU continues to be an
essential tool in serving America's veterans, and fulfilling
the country's commitment to them. We will continue to work to
ensure that those who have served the Nation are properly
compensated for their injuries and fully assisted in returning
to participation in society to the maximum extent possible
permitted by their injuries.
Thank you for this opportunity to discuss this with you,
sir, and I am ready to answer any questions.
[The prepared statement of Mr. Cooper follows:]
Prepared Statement of Hon. Daniel L. Cooper, Under Secretary for
Benefits, Department of Veterans Affairs
Mr. Chairman and Members of the Committee: Thank you for the
opportunity to review with you the issue of Individual Unemployability
(IU). I will discuss what IU is, its history, the criteria used to
determine eligibility, the number of veterans receiving IU benefits,
the May 2005 study by the Inspector General (IG) of State variances in
average annual compensation, and other issues. I am pleased to be
accompanied by Ms. Renee Szybala, Director of VA's Compensation and
Pension Service, and Ms. Judith Caden, Director of VA's Vocational
Rehabilitation and Employment Service.
WHAT IS IU
Individual Unemployability or IU is the basis on which the
Department of Veterans Affairs pays service-connected disability
compensation at the rate payable for a 100-percent evaluation to
qualified veterans with combined evaluations that are less than 100
percent. Regional office decisionmakers assign IU ratings when veterans
meet minimum combined evaluation criteria and, in the judgment of the
rating official(s), are unemployable due solely to their service-
connected conditions. In exceptional circumstances, regional offices
may refer cases that fail to meet the minimum combined evaluation
criteria to the Director of the Compensation and Pension Service for
consideration of an IU rating.
AUTHORITY
Section 1155 of title 38, United States Code, charges the Secretary
with responsibility for developing and applying a disability rating
schedule that is based, ``as far as practicable,'' upon the average
impairments of earning capacity resulting from service-connected
disabilities. Recognizing that the intent of the rating schedule is to
fairly compensate veterans for their disabilities to the extent to
which they impair earning capacity of the average veteran, the schedule
none-the-less cannot always adequately compensate an individual veteran
in his or her particular circumstance. To address the inevitable
situations where the schedule does not adequately address a particular
fact pattern, the schedule adopted by the Secretary provides both IU
and extra-schedular provisions.
BRIEF HISTORY OF IU
In 1925, the Schedule for Rating Disabilities provided the first
definition of total disability. Total disability was defined as an
impairment of mind or body that is sufficient to render it impossible
for the average person to follow a substantially gainful occupation.
In 1934, total disability was expanded to provide that total
disability ratings may be assigned without regard to the specific
provisions of the rating schedule when the veteran is, in the judgment
of the rating agency, unable to follow a substantially gainful
occupation as a result of the veteran's disabilities. To be eligible
for consideration for IU benefits, the schedule required that a veteran
have a single 70-percent evaluation or, if the veteran had multiple
service-connected conditions, that the minimum combined evaluation be
80 percent with at least one disability considered 60-percent
disabling.
In 1941, the minimum requirements for consideration for IU
entitlement were revised to today's standard of 60 percent for a single
disability or a combined 70-percent evaluation with at least one 40-
percent disability.
Throughout the rating schedule, a 60 percent evaluation or higher
reflects significant disability. A 40-percent evaluation assigned to a
condition generally reflects a serious handicap. Therefore, when
multiple service-connected conditions are involved, the higher 70-
percent minimum combined evaluation is reasonable to allow for the
interplay of multiple disabilities.
The 1945 rating schedule established that age was not to be
considered a factor in evaluating service-connected disability, and
that entitlement to IU could not be based on advancing age or
additional non-service-connected disability.
Under VA regulations, if a veteran's earned income does not exceed
the amount established by the U.S. Department of Commerce, Bureau of
the Census, as the poverty threshold for one person, currently $9,570,
the veteran is only marginally employed, and marginal employment does
not qualify as substantially gainful employment. Also, the U.S. Court
of Appeals for Veterans Claims held in Faust v. West that employment
that provides annual income exceeding the poverty threshold for one
person, irrespective of the number of hours or days actually worked and
without regard to the veteran's annual earned income prior to the award
of the IU rating, constitutes ``actual employability.''
NUMBER OF IU BENEFICIARIES
The number of veterans rated totally disabled based on IU has more
than doubled in the past 6 years from 97,275 veterans in 1999 to over
221,000 veterans today.
There is no single clear explanation for the increase in IU ratings
over the last 6 years. However, the rise has occurred concurrent with
other significant changes. Since September 30, 1999, the number of
veterans receiving compensation has increased from 2,252,980 to
2,636,979 at the end of fiscal year 2005. This increase of 383,999
veterans represents a 17-percent rise in the number of veterans
receiving compensation. There has also been an increase in the average
combined disability evaluation over the same period. At the end of
1999, 57 percent of all veterans receiving compensation had combined
evaluations of 30 percent or less. Today it is 46 percent. The percent
of veterans with combined evaluations of 60-percent disability or more
has increased from 17 percent at the end of 1999 to the current 29
percent. An interplay of advancing age, diabetes, and various
presumptions of service connection for cancers associated with
herbicide and radiation, as well as a significant increase in the
number of veterans awarded service-connection for PTSD, account for a
substantial portion of the increase.
Recent court decisions have also had an impact on IU ratings. For
example, in 1999, the U.S. Court of Appeals for Veterans Claims in
Norris v. West held that VA must infer a claim for IU if the veteran
files a claim for increased disability, meets the schedular minimum
combined evaluation criteria, and there is evidence of inability to
engage in substantially gainful employment due to service-connected
disability.
INTERPLAY WITH VOCATIONAL REHABILITATION AND EMPLOYMENT (VR&E)
In its September 1987 report, ``Improving the Integrity of VA's
Unemployability Compensation Program,'' the then General Accounting
Office (GAO) recommended that VA revise its regulations to require that
all veterans applying for a total disability rating based on IU be
referred for a vocational rehabilitation evaluation.
VA does not currently require an employment assessment by VR&E
program staff as part of the IU entitlement determination. If the
Secretary decided to require an employment assessment in connection
with determining a veteran's entitlement to IU, VA would first
promulgate regulations defining the scope, purpose, and criteria for
conducting such an assessment, and the manner in which VA would
implement such assessments.
A veteran's participation in a program of rehabilitation,
education, or training does not preclude a total disability rating
based on IU. Veterans with compensable service-connected disabilities,
including those with IU ratings, may be entitled to receive vocational
rehabilitation benefits under the VR&E program (chapter 31, title 38,
United States Code). VA also may not deny a veteran's IU claim on the
basis that he or she is participating in a Veterans Health
Administration (VHA) program of therapeutic and rehabilitative
services, or consider therapeutic and rehabilitative activities as
evidence of a veteran's ability to secure or follow a substantially
gainful occupation. Our regulations allow a veteran receiving IU
benefits to work 12 consecutive months in substantially gainful
employment before any change is made in the IU determination.
ADDITIONAL BENEFITS
A total disability rating based on IU can result in eligibility for
additional benefits for a veteran's dependents and survivors.
Educational benefits for the veteran's spouse and eligible children are
available under the Survivors' and Dependents' Educational Assistance
Program (title 38, United States Code, chapter 35). The Civilian Health
and Medical Program of the Department of Veterans Affairs (CHAMPVA)
provides reimbursement to eligible dependents for most medical
expenses, provided that they are not also eligible for health care
benefits provided by the Department of Defense. To be eligible for both
of these benefits, the veteran's IU determination must be considered
permanent. Permanency for eligibility to chapter 35 and CHAMPVA
requires that there not be a future examination scheduled.
APPLICATION PROCESS
In most cases, to be considered for IU benefits, a veteran must
apply. However, in the Norris case mentioned earlier, the court held
that a veteran need not apply for IU for a claim for IU to be inferred.
Thus, VA is required to consider the issue in certain circumstances,
even if the veteran did not explicitly apply for an IU rating. Recent
guidance to the field directed that, once an IU claim is inferred, an
application must be sent to the veteran for completion in order to
obtain the essential information requested on the application form. The
form asks the veteran to furnish an employment history for the 5-year
period preceding the date on which the veteran became unemployable, as
well as from that date to the date of application.
As part of the development of IU claims, field stations are also
required to solicit information from each employer during the 12-month
period preceding the date the veteran last worked. The employer is
asked to provide information concerning the veteran's employment
history including the date of employment, the type of work performed,
and if the veteran is not currently working, the reasons for
termination of employment.
ROLE OF THE MEDICAL EXAMINER
If the rating official determines that a medical examination is
necessary to determine whether a veteran is entitled to a total
disability rating based on IU, an appropriate examination or opinion
request is submitted to a VHA medical facility or our contract
examination provider.
Medical examiners follow the appropriate worksheets to perform a
complete and adequate examination for rating purposes, answering all
questions and providing opinions as requested. A diagnosis is to be
provided for every condition listed on the examination request. The
medical examiner should describe the disability's effect on the
veteran's daily activities and ability to work. For IU claims, the
examiner should also obtain the veteran's occupational history (i.e.,
type of occupation, employment dates, wages for last 12 months, and
detail any time that was lost from work in past 12-month period).
CONTINUED IU ELIGIBILITY
Once a veteran is awarded IU benefits and until he or she attains
age 70, the veteran is required to submit an annual employment
certification. This procedure was resumed in September after having
been suspended for approximately 6 years. The veteran must list all
employment for the preceding 12-month period. VA uses the certification
to verify continued entitlement to IU benefits. Failure to return the
form will cause VA to send the veteran a contemporaneous notice of
reduction of the monthly benefit payment to the rate justified by the
underlying rating.
VA may schedule a reexamination for any veteran when VA determines
there is a need to verify the continued existence or current severity
of a disability. Generally, VA requires re-examination if it is likely
that a disability has improved or if evidence indicates that a
disability has materially changed or that the current rating may be
incorrect. Periodic future examinations are not requested if the
disability is unlikely to improve, if symptoms have persisted without
material improvement for a period of 5 or more years, where the
disability is permanent in character, or in cases where the veteran is
age 55 or older. After a veteran has received compensation at any level
of disability for 20 years, to include total disability benefits based
on IU, that compensation rate is protected.
Veterans receiving IU benefits are subject to VA's annual income
verification match (IVM). The IVM uses Internal Revenue Service (IRS)
and Social Security Administration (SSA) income records to verify that
IU beneficiaries remain below the earnings threshold for entitlement to
IU benefits.
REVIEWS OF VA CLAIMS PROCESSING RELATED TO IU
Former Secretary Anthony J. Principi, in response to media articles
about State-to-State variance in average compensation payments to
veterans, requested that the VA Inspector General (IG) study the
payment variance issue. The IG found that payment variance was affected
by several factors including demographic factors and representation by
veterans service organizations, as well as the incidence of PTSD and
the subsequent award of IU benefits for that condition.
The Government Accountability Office (GAO) also issued a report in
2004 pointing to a need for increased analysis of the consistency of
decisionmaking across regional offices. GAO is currently conducting a
study of IU benefit decisionmaking.
Based on the preliminary findings from these reviews, as well as a
significant increase in the number of IU case referrals received in the
latest IVM with IRS and SSA, we have been analyzing our existing IU
procedures and regulations to determine if changes are needed. As
discussed earlier, we have reinstated the annual employment
certification for veterans receiving IU benefits. We have also
reinforced existing procedural and evidentiary guidelines for IU
determinations through conference calls with our field stations and at
our recent Veterans Service Center Managers Conference. We will
continue to work to provide additional training for our employees, and
to identify ways to strengthen and clarify our long-standing procedural
requirements and ensure the integrity of this important benefit.
The IU benefit has a long history. It fills a critical gap when the
rating schedule fails to fully address the impact of disability in a
specific veteran's circumstance. We believe that during this period of
conflict and danger for our country, IU continues to be an essential
tool in serving America's veterans and fulfilling the country's
commitment to them. We at VBA are fully cognizant of this as we work to
ensure those who have served this nation are fully compensated for
their injuries and assisted in returning to participation in society to
the maximum extent possible permitted by their injuries.
Thank you for this opportunity to discuss this important benefit. I
would be pleased to address any questions you may have.
______
Response to Written Questions Submitted by Hon. Larry E. Craig
to Hon. Daniel L. Cooper
Question 1a. Your testimony pointed out that the Government
Accountability Office (GAO) recommended back in 1987 that VA revise its
regulations to require all veterans applying for Individual
Unemployability (IU) be referred for a vocational rehabilitation
evaluation, yet nothing was done.
Doesn't it make sense to have trained vocational counselors perform
IU assessments?
Answer. We believe that requiring vocational assessments may
improve the adjudication of total disability ratings based on
Individual Unemployability (IU) and serve as an integral part of any
decision to award IU benefits. Trained vocational counselors may
provide a more comprehensive picture of the veteran's current ability
to engage in substantially gainful employment and the impact of
training and other rehabilitation benefits on the veteran's future
employment prospects. However, conducting vocational assessments will
require additional Vocational Rehabilitation and Employment (VR&E)
staff members and/or contract dollars to support this effort.
Question 1b. Who performs the assessments now and what are their
professional qualifications for making employability determinations?
Answer. Medical examiners perform a complete and adequate
examination for rating purposes according to the appropriate
examination worksheet. In IU claims, the medical examiner must describe
the disability's effect on the veteran's daily activities and his or
her ability to work. The medical examiner must obtain the veteran's
occupational history such as the type of occupation, employment dates,
and wages from the previous 12 months, and details the time that was
lost from work in the previous 12-month period. Examining physicians,
psychologists, and other licensed health-care providers are experienced
in assessing employability for various disability-determining agencies,
including the Department of Veterans Affairs (VA) and the Social
Security Administration.
Question 1c. Do they take into account the impact medical treatment
and vocational rehabilitation services would have on a veteran's
employment potential when making these determinations?
Answer. A VA rating decisions regarding entitlement to IU must be
based on all the evidence of record, including medical and other
relevant evidence, regarding whether a veteran's service-connected
conditions preclude him or her from obtaining and maintaining
substantially gainful employment.
Once a veteran has received an IU rating, VA may require a
reexamination of the veteran if: (1) It is likely that a disability has
improved; (2) evidence indicates there has been a material change in a
disability; or (3) evidence indicates the current rating may be
incorrect. For example, if a veteran has just started a medical regimen
or medications are being adjusted for better results, a future exam may
also be warranted. VA also monitors a veteran's vocational
rehabilitation by requiring the yearly submission of VA Form 21-4140,
an employment questionnaire verifying whether or not the veteran is
employed. VA also performs the Income Verification Match (IVM) yearly
with the Internal Revenue Service (IRS) that reports wages earned for
veterans drawing IU.
Reduction of an IU rating requires clear and convincing evidence
that establishes a veteran's actual employability. VA regulations
provide that, if a veteran is undergoing vocational rehabilitation,
education, or training, an IU rating may not be reduced for that reason
``unless there is received evidence of marked improvement or recovery
in physical or mental conditions or of employment progress, income
earned, and prospects of economic rehabilitation, which demonstrates
affirmatively the veteran's capacity to pursue the vocation or
occupation for which the training is intended to qualify him or her, or
unless the physical or mental demands of the course are obviously
incompatible with total disability.'' Evidence regarding the impact of
a veteran's medical treatment and vocational rehabilitation on the
veteran's employment potential would be relevant in determining whether
an IU rating should be reduced.
Question 2a. Thirty-one percent of IU beneficiaries are over the
age of 71. I don't understand why a benefit that is based on
unemployability is granted to individuals who, because of their ages,
would likely not be looking for work.
Why is age not a factor in an IU determination?
Answer. For more than 60 years, the Schedule for Rating
Disabilities has stated that age may not be considered as a factor in
evaluating service-connected disability, and that service-connected
unemployability cannot be based on advancing age. Age may affect an
individual's ability to perform activities necessary for employment and
should potentially be a factor in determining whether a veteran is
unable to engage in substantially gainful employment solely due to
service-connected disability.
Question 2b. If Federal unemployment statistics only include in the
definition of ``unemployed'' those who are looking for, but can't find
work, why shouldn't VA apply that same standard for the IU benefit?
Response: The Bureau of Labor Statistics classifies persons as
unemployed if they do not have a job, have actively looked for work in
the prior 4 weeks, and are currently available for work. Persons
counted as ``unemployed'' are unable to find work for a variety of
reasons. Veterans are entitled to a total disability rating based on IU
because they are ``unemployable,'' i.e., unable to engage in
substantially gainful employment because of a service-connected
disability.
Question 2c. VR&E: Is age a factor when evaluating whether a
veteran is eligible for VA's Vocational Rehabilitation and Employment
(VR&E) program?
Answer. There are no age prohibitions associated with the
eligibility and entitlement requirements for the VR&E program. However,
the age of a veteran with a disability who files a claim for VR&E
services may be considered if it is identified as a potential
impairment to employability.
Question 3a. Forty-six percent of veterans who have disability
ratings of 60 to 90 percent go on to receive IU.
What are the characteristics of those rated 60 to 90 percent who do
not go on to receive IU? Please include in your assessment a breakdown
of the age, underlying disability rating, and service-connected body
system.
Answer. In September, 2005, of the 483,024 veterans rated 60 to 90
percent disabled, 261,932 veterans were not rated as totally disabled
based on IU. The following data comparing IU beneficiaries with non-IU
beneficiaries who are also rated 60 to 90 percent disabled suggests a
correlation between age and the level of disability with the likelihood
that a veteran will receive IU benefits. Younger veterans and veterans
with lower disability ratings are less likely to receive IU benefits
compared to older veterans and veterans with higher disability ratings.
The following chart contrasts the number of IU beneficiaries with
non-IU beneficiaries according to their age category.
------------------------------------------------------------------------
Age No IU With IU Total
------------------------------------------------------------------------
Below 30......................... 7,735 1,215 8,950
30-39............................ 20,499 7,634 28,133
40-49............................ 48,839 20,496 69,335
50-59............................ 86,514 81,254 167,768
60-69............................ 38,975 40,466 79,441
70-79............................ 29,794 33,375 63,169
80 and up........................ 29,576 36,652 66,228
--------------------------------------
Total........................ 261,932 221,092 483,024
------------------------------------------------------------------------
The following chart compares the number of IU beneficiaries with
the number of non-IU beneficiaries based on their disability level.
------------------------------------------------------------------------
Level of disability Non-IU IU
------------------------------------------------------------------------
60 percent.................................... 135,548 37,146
70 percent.................................... 72,328 80,862
80 percent.................................... 39,220 63,759
90 percent.................................... 14,836 39,325
------------------------------------------------------------------------
The following chart contrasts the number of IU beneficiaries with
the number of non-IU beneficiaries based on their primary service-
connected disability.
------------------------------------------------------------------------
Body system Non-IU IU
------------------------------------------------------------------------
Endocrine..................................... 10,888 5,933
Neurological.................................. 20,052 14,223
Cardiovascular................................ 21,143 22,138
Mental--Non-PTSD.............................. 20,086 23,982
Mental--PTSD.................................. 34,492 61,996
Musculoskeletal............................... 82,188 62,675
Respiratory................................... 20,985 6,910
Other......................................... 52,098 23,235
-------------------------
Total..................................... 261,932 221,092
------------------------------------------------------------------------
Question 3b. What explains the differences between how these two,
similarly rated groups of disabled veterans are treated for purposes of
IU?
Answer. The data above indicates that younger veterans and veterans
with lower disability ratings are less likely to receive IU benefits
compared to older veterans and veterans with higher disability ratings.
Question 4. Is it true that after an individual is granted IU a
letter is sent to encourage participation in the VR&E program? If so,
how frequently do IU participants respond to that letter by
participating in the program? Of those IU recipients who do
participate, what is their rehabilitation rate?
Answer. Information about the VR&E Program is provided to veterans
whenever they receive a rating, get a rating increase, or receive an IU
rating. The information provided includes VA Form 28-8890 (Important
Information about Vocational Rehabilitation Benefits) and VA Form 28-
1900 (Disabled Veterans Application for Vocational Rehabilitation).
For the 5-year period beginning in fiscal year 2001 and ending
fiscal year 2005, 2,933 IU recipients completed a comprehensive
Vocational Rehabilitation and Employment evaluation. In the same time
period, 1,622 IU recipients were declared rehabilitated. It is
important to note that many veterans receiving IU are rehabilitated as
having achieved independent living goals rather than employment goals.
For example, in fiscal year 2005, it is estimated that at least 23
percent of the total number of IU recipients rehabilitated were
rehabilitated after completing independent living programs rather than
employment programs.
Question 5. Is the VR&E program successful in helping veterans with
service-connected ratings of 60 to 90 percent? Are the disabilities
afflicting those who participate in the VR&E program of a fundamentally
different nature than those afflicting IU beneficiaries who do not
participate? If the VR&E program has a demonstrated effectiveness of
assisting veterans rated 60 to 90 percent, and the disabilities
afflicting non-participating IU beneficiaries and VR&E participants are
similar, is there any reason that the VR&E program could not help move
more veterans off the IU roles and into jobs?
Answer. The table below provides the detailed data to answer the
questions asked. As shown below, during the 5-year period beginning in
fiscal year 2001 through fiscal year 2005, 10,568 veterans rated 60
percent to 90 percent disabled were declared rehabilitated. The data
would seem to indicate that VR&E services can assist veterans rated 60
percent to 90 percent disabled.
[GRAPHIC] [TIFF OMITTED] T5791.001
Question 6. Your testimony pointed out that periodic future
examinations are not requested if an IU recipient is over age 55. Why
is age not a factor when making an IU determination, but is a factor
when determining whether to reevaluate an IU recipient's disability to
determine if employment is possible? Isn't there an inconsistency here?
Answer. Current 38 CFR Sec. 3.327 provides that VA will not
schedule a periodic re-examination for veterans who are over 55 years
old except under unusual circumstances. VA will reconsider this policy
to determine whether VA should schedule periodic re-examinations for IU
beneficiaries who are over 55 years old.
Question 7. Is there any interface with VHA, or any other Federal
agencies, so that appropriate follow-up care can be pursued with
veterans receiving IU, especially if sustained treatment could help a
veteran to be gainfully employed?
Answer. VBA works with the Veterans Health Administration (VHA) and
the Department of Labor (DOL) to provide appropriate follow-up care to
veterans receiving IU.
VHA's Compensated Work Therapy (CWT) provides a structured
environment where veteran patients participate in vocational
rehabilitation activities. VHA clinicians refer eligible veterans for
treatment in CWT program. Patients must have a primary psychiatric or
medical diagnosis and have difficulty in obtaining or maintaining
employment as a result. Pursuant to 38 U.S.C. Sec. 1718, this VHA-run
program has the authority to provide work skills training and
developmental services, employment support services, and job
development and placement services to eligible veterans.
DOL's Veterans Employment and Training Service (VETS), offers
employment and training services to eligible veterans. VETS provides
intensive services to meet the employment needs of disabled veterans
and other eligible veterans, with the maximum emphasis directed toward
serving those who are economically or educationally disadvantaged,
including veterans with barriers to employment. VETS employees are
located in VA Vocational Rehabilitation and Employment offices. Local
VETS representatives conduct outreach to employers and engage in
advocacy efforts to increase employment opportunities for veterans,
encourage the hiring of disabled veterans, and generally assist
veterans to gain and retain employment.
Question 8. Please give me a profile of the individuals who were
first granted IU within the past year and within the past 5 years. I am
most interested in the following information:
(a) The age at which those veterans were first granted IU.
Answer:
----------------------------------------------------------------------------------------------------------------
Age 2001 2002 2003 2004 2005 Total
----------------------------------------------------------------------------------------------------------------
Below 30............................................ 222 318 373 383, 453 1,749
30-39............................................... 1,111 1,493 1,756 1,582 1,554 7,496
40-49............................................... 2,503 3,134 3,914 3,418 3,224 16,193
50-59............................................... 7,236 11,267 15,929 14,840, 13,265 62,537
60-69............................................... 2,401 3,772 5,565 5,489 6,257 23,484
70-79............................................... 3,618 5,519 6,487 5,141 4,107 24,872
80 and up........................................... 1,889 3,421 4,618 4,424 4,297 18,649
-----------------------------------------------------------
Total............................................... 19,336 28,924 38,642 35,277 33,157 155,336
----------------------------------------------------------------------------------------------------------------
(b) The amount of time that elapsed between IU being granted and
when the underlying service-connected disability was rated 60 to 90
percent.
Answer. VA is unable to determine this information.
(c) The amount of time that elapsed between the end of military
service and the date the underlying service-connected disability was
rated 60 to 90 percent.
Answer. VA is unable to determine this information.
(d) The underlying service-connected body system afflicting the IU
recipients.
Answer. The chart below details the number of veterans rated
totally disabled based on IU from 2001 until 2005. The data reflects an
increasing number of veterans with PTSD and other mental conditions who
are rated totally disabled based on IU. In 2001, VA added diabetes
mellitus to the list of diseases subject to presumptive service-
connection based on exposure to herbicides. Veterans are also entitled
to additional compensation for complications of diabetes mellitus such
as arteriosclerosis and nephropathy. The increase in the number of IU
awards based on the primary service-connected conditions involving the
endocrine, neurological, and cardiovascular systems may reflect this
change to VA's regulations.
----------------------------------------------------------------------------------------------------------------
Body system 2001 2002 2003 2004 2005 Total
----------------------------------------------------------------------------------------------------------------
Endocrine........................................... 223 1,091 1,596 1,370 1,355 5,635
Neurological........................................ 942 1,415 1,963 1,861 1,785 7,966
Cardiovascular...................................... 1,780 2,860 4,370 3,822 3,737 16,569
Mental--Non-PTSD.................................... 2,148 2,870 3,818 3,573 3,594 16,003
Mental--PTSD........................................ 6,274 8,929 12,064 11,766 10,905 49,938
Musculoskeletal..................................... 5,373 7,907 9,364 7,465 6,652 36,761
Other............................................... 2,596 3,852 5,467 5,420 5,129 22,464
-----------------------------------------------------------
Total............................................... 18,980 28,924 38,642 35,277 33,157 154,980
----------------------------------------------------------------------------------------------------------------
(e) The total number of veterans rated 60 to 90 percent, whether IU
was granted or not.
Answer:
----------------------------------------------------------------------------------------------------------------
Totals
Combined degree of disability (percent) ------------------------------------------------------
2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
60....................................................... 126,788 138,378 151,443 161,050 172,694
70....................................................... 193,913 107,097 123,951 138,548 153,190
80....................................................... 156,945 67,583 80,545 91,526 102,979
90....................................................... 26,908 32,897 40,339 46,818 54,161
------------------------------------------------------
Total.................................................... 304,554 345,955 396,278 437,942 483,024
----------------------------------------------------------------------------------------------------------------
(f) The number of IU recipients who participated in the VR&E
program.
Answer:
----------------------------------------------------------------------------------------------------------------
Snapshot of IU participants as of:
Case status -----------------------------------------------------------------
9/30/00 9/30/01 9/30/02 9/30/03 9/30/04 9/30/05
----------------------------------------------------------------------------------------------------------------
Applicant..................................... 85 107 160 170 128 68
Evaluation and planning....................... 111 182 276 413 374 376
Extended evaluation........................... 16 25 52 42 50 72
Independent living............................ 187 361 407 447 395 426
Rehab. to employability....................... 173 230 228 229 216 222
Employment services........................... 20 16 19 23 24 24
Interrupted................................... 123 126 189 156 176 196
-----------------------------------------------------------------
Total..................................... 715 1,047 1,331 1,480 1,363 1,384
----------------------------------------------------------------------------------------------------------------
Question 9. What are the total costs associated with the IU
benefit? Has VA done any projection of the future financial liability
associated with the IU benefit? If so, please provide the Committee
with that information?
Answer. For 2005, we estimate that $6.16 billion was paid to
213,002 IU recipients at an average of $28,907 per year. Of this
amount, we estimate that an average of $15,901 per year was paid
exclusively for the lU rating (excluding the schedular rating) for a
total of $3.39 billion in 2005. Our budget model does not forecast
compensation payments specifically for IU; rather it incorporates IU
payments into the average payment made for each degree of disability
(along with other factors affecting average payments such as
dependency, special monthly compensation, etc.). We are unable to
provide a budget forecast specifically for these other categories,
including IU payments.
Response to Written Questions Submitted by Hon. Daniel K. Akaka
to Hon. Daniel L. Cooper
Question 1. How many additional staff will VA need to undertake the
PTSD review, and for Vocational Rehabilitation and Employment staff to
help to determine Individual Unemployability (IU)?
Answer. On November 10, 2005 the Department of Veterans Affairs
(VA) announced that it would not conduct a review of 72,000 post-
traumatic stress disorder cases. VA will complete its review of the
2,100 cases that were reviewed by the Office of Inspector General for
its May 2005 report, but this will not require additional staff.
Question 2. Can Vocational Rehabilitation and Employment absorb
evaluating veterans who have applied for Individual Unemployability
without cutting services to those who are currently using those
services?
Answer. VA does not currently require an employment assessment by
VR&E program staff as part of the IU entitlement determination. If the
Secretary decided to require an employment assessment in connection
with determining a veteran's entitlement to IU, VA would first
promulgate regulations defining the scope, purpose, and criteria for
conducting such an assessment, and the manner in which VA would
implement such assessments. Once such assessment guidelines were
established, VR&E would be in a position to determine whether
additional resources, new efficiencies, increases in workload, or a
combination of the three would be required.
Question 3. What can VA do in order to force compliance from the
Regional Offices in sending out the employment certification form?
Answer. The regional offices are not responsible for sending out
the employment questionnaire. VA's Benefits Delivery Center at Hines
automatically generates the employment questionnaire, which is sent to
the veteran annually on the anniversary of the IU grant. Once released
by VA's centralized computer system, appropriate controls are
automatically set by the system to assure the form is returned.
Question 4. Recently the Disability Benefits Commission, a panel
tasked with evaluating the appropriateness and level of veterans
compensation, by a near unanimous margin, voted to remove age as a
factor in evaluating the benefits' package. Do you agree with this
decision?
Answer. It is our understanding that the Veterans' Disability
Benefits Commission has decided to exclude age as a factor in its
review of benefits provided under current Federal laws to compensate
veterans and their survivors for disability or death attributable to
military service. The Veterans Benefit Administration does not have a
position on decisions of the Commission.
Response to Written Questions Submitted by Hon. Patty Murray
to Hon. Daniel L. Cooper
Question 1. How long does the average vocational rehabilitation
case take to close?
Answer. The average number of days from the point of entering the
evaluation/planning phase to the determination that the veteran has
achieved rehabilitation is 933 days.
Question 2. What kinds of jobs are these veterans being placed in
and what are the average salary levels?
Answer. The top five categories of positions veterans are
rehabilitated into are:
Professional, Technical, Managerial
Clerical
Services
Structural (Building Trades)
Machine Trades
The average salary of a suitably employed rehabilitated veteran in
fiscal year (FY) 2005 was $39,600.
Question 3. How many full-time Vocational Rehabilitation counselors
does the agency currently have?
Answer. The Vocational Rehabilitation and Employment (VR&E) Program
as of September 30, 2005, have a total of 625 vocational rehabilitation
counselors and counseling psychologists.
Question 4. On average, how many cases does a Vocational
Rehabilitation counselor manage?
Answer. The average workload per counselor is 150 cases.
Question 5. How many new cases were brought to VA in fiscal year
2005?
Answer. In fiscal year 2005, 34,038 favorable entitlement
determinations were made. Of that number, 25,400 entered a plan of
rehabilitation. The remainder either decided not to pursue the program
at this time or were unable to do so because the extent of their
injuries or disabilities make it currently infeasible for them to
achieve a vocational objective.
Question 6. Did the agency seek a budget increase for fiscal year
1906 to help reduce the backlog of cases in the Vocational
Rehabilitation system? And if not, why not?
Answer. The fiscal year 2006 budget submission for VR&E requested
an additional 15 positions in fiscal year 2006 above the cumulative
full time employees (FTE) for fiscal year 2005.
Question 7. Does VA plan to seek additional congressional
appropriations to help reduce their case backlog in its fiscal year
1907 budget request?
Answer. As of today's date, final decisions about the fiscal year
2007 budget have not been made.
Question 8. Does VA partner with Federal, State and local
Vocational Rehabilitation and Workforce Investment Act programs to
leverage and maximize training and re-employment resources? If so, how?
If not, why not?
Answer. VA does partner with the Department of Labor's Veterans
Employment and Training Service (VETS), the Rehabilitation Services
Administration's network of State rehabilitation agencies, and Career
One-Stop Workforce agencies (operated by State and private contractors)
to leverage resources that increase employment opportunities for
veterans with disabilities.
The Department of Labor currently has 71 Disabled Veterans Outreach
Program Representatives (DVOPs) and Local Veterans Employment
Representatives (LVERs) co-located in 35 VA Regional Offices and 26
out-based locations. Additionally, there are four VR&E employees co-
located in two Department of Labor offices in Louisville, Kentucky and
St. Petersburg, Florida. DVOPs and LVERs stationed or co-located with
VR&E field stations have the opportunity to access the same resources
available to VR&E staff. This access can help DVOPs and LVERs become
more efficiently integrated into the initial vocational evaluation and
the delivery of employment services. DVOPs and LVERs, working in
partnership with VR&E staff, help disabled veterans reach their
employment goals by:
Using the Job Resource Labs for accessing and obtaining
labor market information, job seeking/interviewing skills preparation,
resume preparation, and job openings,
Advising veterans on their Uniformed Services Employment
and Reemployment Rights if they plan to return to their former
employers,
Acting as liaison and central point of contact with
statewide DVOPs and local State workforce agencies, and Reviewing
successful rehabilitation outcomes periodically with VR&E staff to
assess best practices for State or national emulation.
VR&E and VETS signed an updated Memorandum of Agreement on October
3, 2005, that establishes three joint work groups with the goal of
improving the quality of employment services and suitable job
placements for veterans with disabilities. Each work group will have an
established list of roles and responsibilities that will direct their
efforts. The work groups are:
Performance Measures for Assessment of Partnership Program
Results
National Veterans' Training Institute: Curriculum Design
Joint Data Collection, Analysis, and Reports
The VR&E Service is conducting training for VR&E field staff who
coordinate the provision of employment services. VETS staff and six
regional Department of Labor administrators have been invited to both
attend and make presentations at this training conference, scheduled
for December 15 to December 18, 2005 at the National Veterans'.
Training Institute in Denver, Colorado.
Response to Written Questions Submitted by Hon. James M. Jeffords to
Hon. Daniel L. Cooper
Question 1. Admiral Cooper, I understand that the Disability
Benefits Commission is examining compensation ratings and considering
whether adjustments should be made to these ratings. This Commission is
scheduled to report its finding in September of 2007. Will the
Commission be taking individual unemployability into consideration in
its review? Aren't these two issues closely related?
Answer. VA regulations provide for total-disability ratings for
compensation purposes based upon individual unemployability (1U).
However, VA does not know if the Commission will study or report on IU
as part of its review of compensation ratings.
Question 2. Admiral Cooper, can you tell me what percentage of
veterans receive both IU and Social Security disability benefits? I'm
curious, what are the differences between these two sets of criteria:
IU and SSDI?
Answer. VA does not have the data to determine the number of
veterans who are receiving both IU and Social Security disability
benefits.
There are significant differences between VA's IU rating and a
finding of disability for purposes of Social Security Disability
Insurance (SSDI):
Entitlement to SSDI is based on whether a claimant is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment. Entitlement to IU
is based on whether a veteran is unable to secure and follow a
substantially gainful occupation by reason of service-connected
disabilities only.
SSDI entitlement requires that the impairment can be
expected to result in death or . . . has lasted or can be expected to
last for a continuous period of not less than 12 months.'' There is no
such requirement for entitlement to IU.
SSDI entitlement may depend upon whether a claimant can
adjust to work other than his or her past work, given the claimant's
age, education, past work experience, and any transferable skills. VA
regulations require that advancing age be disregarded when determining
whether a veteran is unemployable for compensation purposes.
SSDI has separate rules for entitlement based on blindness, the
rules differ depending on whether the claimant is under 55 years of
age, and the amounts of earnings that indicate a blind person's ability
to engage in substantial gainful activity differ from those amounts for
non-blind claimants. Entitlement to IU does not depend on the nature of
a disability, only on whether it is service connected and its severity.
The monthly SSDI benefit amount is based on the Social
Security earnings record of the insured worker. The amount payable for
IU is the same as the amount payable for a scheduler total rating,
which is set by statute.
Disability for purposes of SSDI terminates in the month in which
the beneficiary demonstrates the ability to engage in substantial
gainful activity (following completion of a trial work period, where
applicable). If a veteran with an IU rating begins to engage in a
substantially gainful occupation, the IU rating may not be reduced
solely on the basis of having secured and followed such occupation
unless the veteran maintains the occupation for a period of 12
consecutive months. Furthermore, for VA to reduce an IU rating, actual
employability must be established by clear and convincing evidence.
SSDI can be terminated if a claimant or beneficiary unreasonably
refuses to follow prescribed treatment that would be expected to
restore the ability to engage in substantial gainful activity. IU
entitlement does not depend on whether a veteran follows prescribed
treatment; it cannot be terminated based on a veteran's following of a
prescribed treatment or rehabilitation program.
Generally, continued entitlement to SSDI must be reviewed
periodically. There is no requirement that entitlement to IU be
reviewed periodically.
Chairman Craig. Admiral, thank you very much. We have been
joined by two other of our colleagues on the Committee. I will
ask them if they have any opening comments before we turn to
questions of you and those who accompany you.
Senator Thune, do you have any opening comment?
STATEMENT OF HON. JOHN THUNE, U.S. SENATOR
FROM SOUTH DAKOTA
Senator Thune. Mr. Chairman, thank you for holding this
hearing. I appreciate the opportunity to better understand the
individual unemployability benefit for our veterans, and I want
to thank the panelists for being here today, and I look forward
to, as we discuss this issue, learning more about things that
we might be able to do to advance policies that will help to
improve the quality of lives of our disabled veterans and also
the employment opportunities with more and more veterans coming
home from Iraq and Afghanistan, and particularly those who are
disabled. We really want to make every effort possible to do
that.
So I applaud you for holding this hearing, and I want to
thank our panelists, and I look forward to participating in the
questions and answers. Thank you.
Chairman Craig. John, thank you.
Senator Jeffords, Jim?
STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM VERMONT
Senator Jeffords. Thank you, Mr. Chairman. Examining
compensation for veterans who have been injured in the course
of their service is a very important issue, and it is
critically important that we provide compensation for those
veterans who cannot work on account of their disabilities. I am
pleased the Chairman is concerned about these issues. I know he
is. And I welcome the opportunity to learn more from today's
witnesses.
However, I must emphasize that by examining this system,
veterans should not feel that we are bringing the validity of
their claims into question. That is not it. This Committee must
stand by the right of every veteran to receive the compensation
to which he or she is entitled. I trust the VA is ever mindful
of its obligation to the veterans in this regard.
Thank you, Mr. Chairman.
Chairman Craig. Jim, thank you very much.
We will do 5-minute rounds and stay with you all, as long
as we have questions. So, again, thank you for being here.
As I stated in my opening remarks, with today's modern
technologies, individuals have more opportunities than ever
before to become productive members of society. The Government
Accountability Office, the GAO, will later provide testimony
that I think you may have seen that makes the following
observation: VA's IU assessment is focused on the veterans'
inabilities and providing cash benefits to those labeled as
unemployable, rather than providing opportunities to help them
return to work. Contrast GAO's observation with VA's
Department-wide strategic goal, which is to restore the
capability of veterans with disabilities to the greatest extent
possible.
With that, are we failing disabled veterans by simply
granting IU and then forgetting them and not returning to them
on a regular basis or causing them to seek the kind of training
that they may be capable of receiving to enter the workforce?
Mr. Cooper. I would answer that by saying that we take very
seriously our mission, which is to help deserving disabled
veterans. We were very concerned 2 or 3 years ago with our
vocational rehabilitation program. We felt it was not
emphasizing employment, and so as a result we have, as you may
be aware, had a very strong study done, and they came up with
several recommendations.
We have since strengthened our vocational rehabilitation to
a great extent. We also make sure that every veteran, as I
indicated in my statement, whenever they are rated for a
particular claim or if they ever have an increase in their
disability, they are given the information necessary and
strongly encouraged to go to the vocational rehabilitation
program, get an evaluation and let us try to help them.
Vocational rehab has also worked very closely with the
Department of Labor. It has signed some agreements with various
companies around the country, and VA in general is working on
employment of veterans.
So, I would say to you, we are doing a lot in that
direction. Are there things we can do better? Maybe, but we are
certainly looking very hard at what can be done with precisely
the type of thing that you are talking about.
Chairman Craig. Returning to the charts behind me, does not
the evidence over the past 6 years though support GAO's
observation that more focus has been given to granting cash
benefits than helping veterans return to a full and productive
life?
Mr. Cooper. I am not sure that I can agree completely, Mr.
Chairman, because as you pointed out, the graphs back there
pointed--the very large majority are 55-56 years-old and above.
And many of those people are in fact at the retirement age. We
do give them access. We do allow them and encourage them to
come in. We are interested in doing everything we can for
employable young veterans, and as you know, Secretary Nicholson
has very strongly emphasized that we want to do everything we
can to help these young veterans not get in the position of not
feeling good about themselves and having meaningful
participation in society.
We feel exactly the same way, and slightly different way of
going about it, but I do say that that graph gives a very
peculiar picture because the large majority of people we have
seen coming in the last several years have in fact been older
veterans, and I believe--and I cannot give you a figure right
now--many of them from Vietnam.
Chairman Craig. Well, I would go into another line of
questions. I will return.
Danny, we will turn to you. Pursue this, please.
Senator Akaka. Thank you very much, Mr. Chairman.
Admiral, I am concerned with the message that veterans with
PTSD may be getting, as a result of the PTSD review, coupled
with this inquiry into the state of VA's individual
unemployability determinations. The question is: What is VA
doing to send a unified message to veterans about the rationale
behind the PTSD review?
Mr. Cooper. As you know, the reason that we are doing any
review at all is as a result of what was found to be the
variance between States as far as what the average income per
veteran in that State was. I frankly do not think that was a
very valid reason to have the outcome it did, but that is not
germane. As they looked, they found that we had a variance in
States and primarily in the PTSD arena, at least that is what
they focused on in the short time they looked at it. As a
result, the IG stated that we should do these reviews.
What we have done is to look at and very precisely go after
the same reviews that they did, which happens to be 2,100
cases. We are doing those. We are doing those in a very
meticulous fashion to find out if we in fact agree with what
the IG said, and some of the things we have found we do not
agree. Our intention is to look at that very carefully, and
then make sure we know exactly what we are doing before we
start into the next review. We are trying to do it as carefully
as we can. I have specifically and personally directed my
regional office directors to work carefully with VSOs to work
with individual veterans. And by the way, out of the 2,100,
only 700 of the claims need to be looked at.
We are trying to avoid going to the veteran themselves
until we know we need some information from them, and then I
have said we have got to work in a very understanding fashion
with not only the veteran, but with the VSO, the person who has
the POA, the power of attorney, and ensure we do it in
absolutely the best way we possibly can.
Senator Akaka. As I have mentioned several times this year,
VA has great difficulty absorbing new court decisions and
legislative changes. What happens if, in addition to the PTSD
review, one more event occurs that requires VA to absorb an
increased workload?
Mr. Cooper. What happens is that we will continue doing
everything we can, trying to go across the board. Our job has
several facets. One of it is public contact. One of it is the
main claims. Part of it are the appeals because X percent of
all the people who do not get their claims will come back with
appeals. So we have a broad range of things that we have to do.
My job is to ensure we do not focus too much on a single
thing, but we do it across the board, and quite frankly, what
that means is if we get tasked with more tasks, if we get more
things that we have to do, then obviously the time to do each
one of those will increase. But I have to ensure we do things
across the board and try to do them as professionally as
possible.
Senator Akaka. Time is not the only concern, but also
staffing. How many additional staff will VA need to undertake
the PTSD review and for vocational rehabilitation and
employment staff to help determine individual unemployability?
Mr. Cooper. There are many factors or many assumptions I
have to make on that. I cannot give you an answer. I will take
that question for the record if I may, sir.
Senator Akaka. Fine.
Well, Mr. Chairman, I have questions and my time is up.
Chairman Craig. We will come back to another round. Thank
you very much.
Now let me turn to Senator Murray.
Patty.
Senator Murray. How many vets currently participate in the
VA's vocational rehab program, do you know?
Mr. Cooper. I would like to turn to Ms. Caden, if I may, to
answer that. She is my Director for Voc Rehab.
Ms. Caden. Thank you. Right now we have about 95,000
participating in the program in different stages.
Senator Murray. And what are their placement rates?
Ms. Caden. This past year we rehabilitated a little over
12,000, and that means they either obtained suitable employment
and maintained it for a period of time, or they achieved their
independent living goals.
Senator Murray. So 12,000 out of 95,000.
Mr. Cooper. But the 95,000, let me add, that can be over a
4-year period.
Ms. Caden. That is right. They are in different stages of
the program.
Senator Murray. Can you describe for us what kind of
physical injuries or mental health conditions some of these
veterans have that you are working with?
Ms. Caden. In the Voc Rehab program? The vast majority of
the veterans in the Voc Rehab program are in the orthopedic
difficulty area. We do have about 21 percent that have mental
health issues. Some of that would be PTSD and other things.
Senator Murray. So many of them face tremendous challenges
in their own personal lives, I would take it?
Ms. Caden. Yes.
Senator Murray. How difficult is it for these veterans as
they go out and try and find a job? I imagine they may have 20,
30, 40, 50 interviews?
Ms. Caden. I cannot really tell you that. I mean it is very
individualized. It would depend on what their goals are, what
their field is and what they are looking for their training in.
Senator Murray. Is there a backlog of veterans trying to
get into the Voc Rehab program?
Ms. Caden. No.
Senator Murray. There is none.
Mr. Cooper. Could I elaborate on one thing?
Senator Murray. Yes.
Mr. Cooper. Each individual veteran is put on a very
specific individualized program with a person overseeing what
he or she is doing. Many of those people end up going to
college as part of their program. I think about 55 or so
percent end up going to college. But each of them--and as a
result of this study that I mentioned earlier, we have set up
five tracks to get the individual to employment, so it
specifically depends on what that individual wants to do, what
his or her qualifications are, and what we can do to help them
best.
Senator Murray. And you mentioned many of them are older,
suffering from serious effects of diabetes or orthopedic
injuries or other causes, which would make it very difficult
for employment, I would take it?
Mr. Cooper. I am sorry. I cannot quite answer the question
because they have a variation of problems. We try to take into
account the specific problems they have or the degree to which
they have problems so that we can acclaim it to that. And as
Ms. Caden stated, many of them we get to independent living. It
is not a matter of employment, but it is a matter what can we
do to help them live better in independent----
Senator Murray. In which case they would still qualify for
the IU benefit.
Mr. Cooper. Ma'am?
Senator Murray. And they would still qualify for the IU
benefit.
Mr. Cooper. Absolutely. One of the things--I am sorry, let
me add one more thing. If they have qualified for IU and they
are now in the system, and let us say they go to college or
whatever and then get employment, they will continue to draw IU
until they have been in employment for at least 1 year.
Senator Murray. Right. And as I said, the unemployment rate
for disabled in my home State is 70 percent. Is that a pretty
similar figure for veterans?
Mr. Cooper. I am sorry, I cannot answer that.
Senator Murray. I would assume it is somewhere around that.
Mr. Cooper. I would assume. I just do not know.
Senator Murray. Well, Mr. Chairman, I know you questioned
the tone of my opening statement. I would just say to you that
I take this really personally. This is an issue that touches
very close to my home.
My father was a disabled veteran. He served in World War
II, came home with a Purple Heart, and he was a disabled
veteran. I know how difficult it was when he was in a
wheelchair, and if his Government came back and said, ``You do
not deserve getting these benefits any more and we want you out
there looking for a job,'' he would face the humility of going
to job interview after job interview and not being hired. I
think he served his country. I think he deserved these
benefits, and I do not want any veteran out there thinking that
we question their ability to get this insurance at this time.
That is where I'm coming from.
Chairman Craig. Patty, once again, I should not respond,
but I will. I am not questioning the veteran. I am questioning
the system. Is the system serving the veteran? In your father's
case, absolutely, but is there a veteran out there who is
getting the benefit today that if the system were performing as
we think it should, would have the dignity of work?
Senator Murray. And I would say every veteran probably
wants the dignity of work.
Chairman Craig. And we want to make sure they get it.
Senator Murray. I have no doubt that they do.
But I think that we have to be very careful when we pursue
things, just like going after veterans who get PTSD. If they
believe this is a stigma--these are our Americans, they went
and fought for us. They feel strongly about this country. I
know them. They care deeply about their own personal dignity,
and I think we have to be careful in anything we pursue that
makes them feel that they are taking advantage of their country
or anything else. I think we have to be very careful how we
pursue these kind of issues.
Chairman Craig. I hope we can be. Thank you very much.
Senator Murray. Thank you.
Chairman Craig. Let me turn to Senator Thune. Any
questions, John?
Senator Thune. Thank you, Mr. Chairman. I share the
concerns both of you have voiced about, one, making sure that
the message that we are sending to the veterans of this
country, those who have sacrificed and served, is the correct
one, and also at the same time performing the job that we have
when it comes to oversight of the system that serves them, to
make sure that it is doing its job in the most efficient way
possible, and that we are getting the desired policy objective
to support and provide benefits to our veterans, and at the
same time to help them find ways to transition into the
workplace.
So, again, I appreciate the very strong feelings that are
being shared both by my colleagues, and I hope that we can do a
better job of improving the quality of life for our veterans,
and also helping find good employment opportunities for them. I
think that is what we hope that the VA can assist with as well.
Question for the panel and Mr. Cooper. Do you know what in
terms of the new generation of veterans that are returning home
from Iraq and Afghanistan, how many of those or what percentage
of those are using the IU benefit?
Mr. Cooper. I will get that for the record. I just do not
know what percentage. But we certainly, as we talk particularly
to the seriously wounded as they come back, as we talk to the
Reserves and National Guard, and we try to talk to every one of
them as groups, we put forth this benefit as being there. I
cannot tell you right now what the participation is. I will
take that for the record.
Senator Thune. OK. I would be interested in knowing that.
The reason I ask it is because this war, more so than any other
previous conflict, we are seeing folks who are losing limbs,
and part of it is the protective----
Mr. Cooper. Could I come back? Let me just say that the
emphasis we have tried to have with all of them coming back is
to try to find work. And I mentioned a couple agreements that
we have had with specific companies, that the VA in general
under the H.R. group is pushing very hard to find employment.
So as an outfit we are doing a lot to help them find
employment. I just cannot tell you the specific number that
might be in the program.
Senator Thune. I appreciate that. In looking at the charts,
and I assume most of those are 30 and under, but my guess is
that may not be reflective of what we are going to experience
as we have more and more folks coming into the system.
Mr. Cooper. What you will find, if I may say, on the charts
there you see the very large bar, I believe, if I am correct,
is at about age 50, is that correct?
Chairman Craig. Fifty-one to sixty, yes.
Mr. Cooper. At 51, the very large bar, so the ones to the
left are the ones that are the younger.
Senator Thune. And I understand that, and my point simply
is that both with respect to health care, which I think is
going to be a continued ongoing need for our soldiers as they
come back from Iraq and Afghanistan, because of the types of
injuries that they are experiencing there, in the same way I
would expect to see these numbers grow on the left side of the
chart as a result, because you are getting more and more. I
think people are coming home who are disabled.
In light of that, I guess my question would be, do you have
policy changes or suggestions or tweaks or anything that you
could recommend to ensure that the IU benefit is assisting our
veterans in continuing to have productive civilian careers? I
know that is a fairly wide open question, but are there things
that we could be, as a matter of policy, doing differently?
Mr. Cooper. I think as far as the IU benefit goes, if in
fact they become eligible for IU, it is sort of automatic. But
what I would stress is we are also doing everything we can to
help them become employed if they want to or can, and if they
cannot, then get them into this vocational rehabilitation
program to get them into independent living.
Along with that we work with our loan guarantee housing
program to get specially adapted housing and use the money that
Congress has allocated to us to help the individuals in the
ILS, independent living, to also get special adapted housing.
So we are trying to do a lot of things as needed by the
individual, trying to treat as much as possible the individual
through the various programs we have.
Senator Thune. Again, I think it is really important that
the message be sent that we appreciate and are grateful for the
service that our veterans have performed for their country, and
that is why the tone of things that we say and the things that
we do here is really important too in reflecting that spirit.
But I also, again, as a matter of--I think the chairman is
trying to get at the fundamental issue of what can we do, if
anything, to improve the job that the VA does in reaching out
to these veterans and providing them opportunities at
productive employment and civilian careers and that sort of
thing. So we would certainly welcome your suggestions and input
in that regard.
I hope that as we see more of our soldiers coming back from
the current theaters of operation, that they will come home to
a welcome sign and to a country that is grateful, and to a
system that is working and functioning effectively and doing
the things that we want to see it do to support them.
So I thank you, Mr. Chairman.
Chairman Craig. Thank you.
Senator Jeffords.
Senator Jeffords. Admiral Cooper, I am under the impression
that the list of recognized disabilities has increased
significantly in recent years, and am I correct in assuming
that this is partly responsible for the increase in the number
of veterans who receive compensation?
Mr. Cooper. I am not sure, Senator, that I understood the
first part of your question. I apologize.
Senator Jeffords. My question is: I understand a list of
recognized disabilities has increased significantly in recent
years. Am I correct then in assuming that this is partly
responsible for the increase in the number of veterans who are
receiving compensation?
Mr. Cooper. I do not think necessarily. I think the number
or the specific disabilities that have been prevalent over the
years, I think the main ones are still the prevalent ones where
there is musculoskeletal or whether it is joints, whether it is
hearing, PTSD. We have a list of let us say 13 or so--we have
many more--but 13 that sort of represent the majority, and I
think from year to year it goes up or goes down. I do think,
and I do not have any facts for this, but what you read in the
paper, we are seeing a lot more loss of limbs due to the other
types of protection, the body protection we have. But as far as
the general types of disabilities, I do not think they vary a
lot from time to time. I could be wrong, but that is off the
top of my head.
Senator Jeffords. Thank you. I am under the impression that
improvements in the veterans benefit claim system and the
application of the quote, ``duty to assist'' requirement have
resulted in fewer veterans falling through the cracks, and more
of them receiving the benefits to which they were entitled?
Mr. Cooper. Senator, I hope that is the right answer, but
every day new things crop up. We are certainly working on it.
We have increased dramatically I think the number of claims we
adjudicate each year, and are continuing to do that. But
everybody is an individual and so everybody is different and it
is a fascinating job. I am glad I have it, but there are days
it is more fascinating than others.
[Laughter.]
Senator Jeffords. Thank you. Is age not an important factor
here too, and could not the overall aging of our veterans
population, particularly Vietnam veterans, count in part for
the increase as well?
Mr. Cooper. Yes, I think that is the case, and again, going
to this bar chart up there, I think a lot of those men and
women are those who were in the Vietnam conflict, and for
whatever reason, the PTSD or whatever disabilities they have,
have increased, and as a result then as they get the 70
percent, as I indicated earlier, the Norris decision in 1999
said anybody who comes in with any kind of a claim and gets to
70 percent total, then you automatically infer that they have
also submitted a claim for IU. And so no matter what the claim
is that comes in, we have to infer, and therefore, adjudicate a
claim for IU, and so all of that has worked together to
increase the number that we see there.
Senator Jeffords. Mr. Cooper, I also am under the
impression that the improvements in the veterans benefit claims
system and the application of the duty to assist requirement
have resulted in fewer veterans falling through the cracks and
more of them receiving the benefits to which they are entitled.
Does this also account for part of the rise in the numbers of
veterans receiving disability ratings?
Mr. Cooper. Oh, absolutely.
Senator Jeffords. And also is age not an important factor
here too, and could not the overall aging of our veterans
population, particularly Vietnam veterans, account in part for
this increase?
Mr. Cooper. I am sure it does, yes, sir.
Senator Jeffords. But that is an appropriate use of the
system, is it not?
Mr. Cooper. Oh, yes, absolutely. It is not a matter that
they are not justified in getting those. They are perfectly
justified and we have to accommodate to that.
Another thing I will mention is, of all the claims we get
in a given year, approximately 58.5 percent are in fact
veterans coming back in because their disability has increased,
so almost two-thirds of the claims that we get each year are in
fact claims from veterans who have already gotten some kind of
disability and because it has gotten worse or an ancillary
disability has developed, which can be service connected, it
will come back to us.
Senator Jeffords. Thank you, Mr. Chairman.
Chairman Craig. Jim, thank you very much.
We have been joined by Senator Obama.
Questions, Senator?
Senator Obama. Thank you very much, Mr. Chairman.
Thank you to the panel for taking the time to be here. I
apologize. I was speaking on the floor and so I came in a
little bit late. Some of the questions that I have may have
already been asked. I am happy for you to let me know if that
is the case, and I can always get some additional written
information.
I hope that we all agree that individual unemployability or
IU determinations provide veterans with an important benefit
that they have earned and that they deserve. I am happy to have
this panel and the commission that has been formed to figure
out how we can make sure the system is more equitable and
efficient, and I think that is a goal that we should strive for
in all our veterans claims.
I share Senator Murray's concern that in our rush to make a
system more efficient, we risk making the system more efficient
simply by lopping off veterans who deserve benefits or
restricting them in some way. I am not suggesting that that is
what the VA is doing. I am just saying that we need to be
cautious. Also, we must remember the fact that, for example, a
program is being utilized more, as Senator Jeffords just
indicated, does not necessarily mean that it is being abused.
It may simply mean that we are now having more people who need
access to these very important services.
I would just note, as I understand it at least, in
information that was provided to me--and correct me Admiral
Cooper, if I am wrong about this--that VA regulations list the
impairments the veterans should have in order to receive a
rating for PTSD, which I think has been the source of some
controversy, and people think that maybe abuses in that area
are also contributing to higher costs in the IU area, but I
just think it is important to make sure that we understand what
this means.
For a veteran to receive a 70 percent rating, which I
understand you need a fairly high rating to receive IU, the
veteran must have occupational and social impairments which
include excessive rituals, near continuous panic or depression
affecting the ability to function independently, speech that
may be obscured or illogical, impaired impulse control, neglect
of hygiene, difficulty in adapting to stressful situations, and
so on.
For a veteran to receive a total disability rating of 100
percent the veteran must have gross impairment in thought
processes or communication, persistent delusions, grossly
inappropriate behavior, persistent danger of harm to others, et
cetera.
I read that into the record just because I think it is
important to recognize that we are not talking about people who
are just feeling kind of blue as a consequence of coming back
home. We are talking about veterans who must demonstrate that
they suffer severe impairments that presumably would prevent
gainful employment.
So I know, Under Secretary Cooper, you have been focused on
this. I have been focused on it because there was some
indication that the discrepancies in disability payments in my
State, Illinois, were in part due to differences in IU rating
practices.
So let me now turn to a question then. In the report on
State variances in VA disability compensation payments, the IG
recommended that the VA conduct a review of the IU rating
practices. Your testimony, as I understand it, indicates that
the VA has been analyzing its procedures and regulations with
respect to IU. The IG recommended that, quote, ``at minimum
such reviews should consist of data analysis, claims filed
review and onsite evaluation of rating and management
practices.''
So I am curious, what exactly has the VA been reviewing in
its analysis of IU processes, and what has been the cost of
this analysis? Again, I apologize I came late. This may have
already been answered.
Mr. Cooper. I cannot exactly talk to the cost, but what we
have done so far is looked at the 2,100 cases that the IG had
looked at in order to come up with their opinions. And we are
looking at these. And we have looked at these one time
centrally so that we have very qualified people take all of
those in, look to find out to see if we agree or disagree, and
on those cases where we did not agree, we have sent them back
to the regional offices, and we are carefully monitoring this
and trying to learn what it is we should be doing, what it is
we can do better, wherein we should be doing better training,
and if in fact all of the mistakes that the IG felt had been
made, if in fact they had been made as described.
Senator Obama. So far, just preliminarily, have you seen
consistency in terms of IU determinations across the States?
Mr. Cooper. Pretty essentially, yes, consistently.
Senator Obama. For the most part you have?
Mr. Cooper. Correct.
Senator Obama. I understand that the VA has reinstated the
policy requirement that a veteran receiving IU benefits must
submit an annual employment certification until he or she
attains the age of 70. I am wondering, No. 1, how is the policy
working? Are the veterans adhering to the new requirements? And
part of the original change and eliminating this requirement,
if I am not mistaken, had to do with the concern that perhaps a
large number of veterans were unaware of or were not accessing
these benefits because of the paperwork and the complexities
involved. I am just wondering whether veterans are able to
abide by this new requirement. You know, obviously, a lot of
the people who potentially might be qualified for this, may be
in the category of homeless veterans?
Mr. Cooper. Absolutely.
Senator Obama. People who may have difficulty filling out
forms.
Mr. Cooper. I do not think you will find that that is a
problem at all. We have only been doing this for 2 months.
Eight years ago, 6 years ago, sometime long before I got here,
somebody decided that this form was not necessary. And what it
does is makes sure that the individual who is getting IU is not
also working and getting money. For instance, the cutoff when
we started getting our first reports back--excuse me. When we
did this Voc Rehab study we were doing, I got an indication
from the chairman of that study that they had a list of people
who were making $50,000 a year and still getting IU.
And that is absolutely the wrong way to do it. And so I
said, ``We have got to do it so we are consistent in what we
are doing and we are doing it properly.'' And so therefore, I
pretty much personally am the one that required that we go back
to this form.
What the form does, it goes to the veteran and it says,
``Tell us what wages you have gotten from employment.'' It does
not talk about anything else. If they are retired, does not
talk about retired income. It merely talks about wages they
get. Out of the 390 that we have looked at very carefully, we
found about 40 that in fact were getting the money. And so we
go to them and we say, ``OK, we are now going to stop the
payment.'' If they want to appeal, then we go through that
process. We try to do it as very carefully and professionally
as we can.
Senator Obama. I substantially went over time, Mr.
Chairman. I apologize for that, and I would just reiterate the
point that I want standardization. I want consistency across
the system, and our resources are finite, and so we must make
sure that benefits are going to the people who need them most.
I applaud you for anything that can be done in that regard.
I also want to make certain though that, as we are striving
for these efficiencies, that there is extraordinary caution,
and I think at least--and this is true with respect to PTSD
evaluations and the IU system--that our starting position or
our default position should be giving our veterans the benefit
of the doubt as opposed to assuming fraud, abuse and so forth.
I would rather see us err somewhat on a few people gaming the
system, then I would a system in which people who really need
it are being left behind.
Mr. Cooper. May I say that I vehemently agree.
Chairman Craig. Senator, thank you very much. We have just
been notified that we--it has not yet started. I think we have
two votes at 3, stacked. There are many more questions I would
like to ask, and I will submit for this panel, submit mine in
writing, and I would hope our colleagues would do the same.
We, I believe, can get through the testimony of the second
panel before we go vote, and then we can come back and do some
questions of that panel.
So let me thank all of you for your time and your due
diligence in this area. I will follow up with a set of
questions that are a bit more probative as it relates to what
you are doing and the breakout that I think our colleagues are
concerned about, as am I. Thank you all very much. Admiral,
thank you.
Mr. Cooper. A pleasure.
Chairman Craig. Let me welcome our second panel. Cynthia
Bascetta, Director, Education, Workforce and Income Security,
the Government Accountability Office; and Rick Surratt, Deputy
National Legislative Director, Disabled American Veterans.
Again, let me thank you for the time that it takes to prepare
and for being here today.
Cynthia, we will start with you.
STATEMENT OF CYNTHIA BASCETTA, DIRECTOR, EDUCATION, WORKFORCE
AND INCOME SECURITY ISSUES, UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. Bascetta. Thank you, Mr. Chairman, and Members of the
Committee. We appreciate being here today to discuss our work
as it relates to VA's IU benefit. Our work spans more than 15
years and covers both the design and administration of
disability programs in the public and private sectors, as well
as other countries.
As you requested, my remarks today will focus on our
comparison of the IU and private insurer decisionmaking
processes. Our findings have implications for modernizing VA's
concept of unemployability and for strengthening program
integrity by shoring up the basis for unemployability
decisions.
As you know, GAO designated Federal disability programs as
high risk in 2003. Our work showed that VA and the Social
Security Administration programs are mired in concepts from the
past, most notably that ``impairment'' equates with inability
to work. Consequently, we believe these programs are poorly
positioned to provide meaningful support to Americans with
disabilities including our Nation's veterans. Our ongoing work
on IU benefits illustrated some of our concerns.
To date our work shows that VA does not have procedures in
place to fully assess veterans' work potential. Without these
procedures, VA cannot assure that its unemployability
determinations are adequately supported, which is especially
troubling in light of the steep increase in IU awards.
Because VA does not systematically utilize its vocational
specialists to help evaluate work potential, it misses an
opportunity to collaborate with veterans on return-to-work
plans where they are appropriate. These plans could identify
and provide needed accommodations or services, including
medical treatment. Instead, the design of IU benefits is
focused on providing cash benefits to veterans labeled as
unemployable and provides no incentives to encourage maximizing
work potential.
How can this be improved? We believe VA could look to
private insurer practices to make sounder determinations of
work potential and modernize its approach. First, and perhaps
most important, insurers intervene early after the onset of
disability and immediately set up the expectation that
claimants with work potential will be supported in their
efforts to do so. They stay involved with these claimants to
arrange for medical care, vocational services, assistive
devices, and other supports customized to the claimant's needs.
Second, insurers aim incentives at both claimants and
employers to improve work outcomes. They work with employers to
show the effectiveness of workplace accommodations for
claimants. They mandate claimant participation in vocational
rehabilitation programs. They encourage rehabilitation and
return to work by allowing claimants to supplement disability
benefits with earned income. Ultimately they can reduce or
terminate benefits if they determine that a claimant is able
but unwilling to work.
Third, insurers assess disability and manage claims by
bringing expertise to bear. They have multi-disciplinary teams
of claims managers, medical and vocational experts. For cost-
effective results, they triage claims so that managers can
concentrate their time and resources on claimants who have work
potential. They spend a minimum level of resources to monitor
the medical conditions of claimants who are unlikely or much
less likely to be able to return to work.
In summary, insurer approaches, such as incentives and
early intervention with return-to-work assistance, offer useful
insights for improving IU's program design. At the same time,
these approaches raise key policy issues in the domain of the
Congress, the Department, veterans service organizations, and
other stakeholders. For example, to what extent should or could
VA require a veteran seeking IU benefits to accept vocational
assistance or appropriate medical treatment? Nonetheless, we
believe that including vocational expertise in the IU
decisionmaking process could help VA make needed improvements
in the integrity of its unemployability determinations, as well
as modernize its IU benefit.
More importantly, this would enable veterans to realize
their full productive potential without jeopardizing the
availability of benefits for those who cannot work.
This concludes my remarks, and I would be happy to try to
answer any questions you have.
[The prepared statement of Ms. Bascetta follows:]
Prepared Statement of Cynthia Bascetta, Director, Education, Workforce
and Income Security Issues, U.S. Government Accountability Office
Mr. Chairman and Members of the Committee:
Thank you for inviting me to testify on how the Department of
Veterans Affairs (VA) Individual Unemployability (IU) disability
assessment practices compare with those used by private sector insurers
in helping people with severe disabilities realize their full potential
to work. It is especially fitting, with the continuing deployment of
our military forces to armed conflict, that we reaffirm our commitment
to those who serve our Nation in its times of need. Therefore, ensuring
the most effective and efficient management of benefits and services to
those who incur disabilities because of military service is of
paramount importance. At the same time, many people with disabilities
have indicated that they want to work and be independent and would do
so if they receive the supports they need. Fortunately, numerous
technological and medical advances, combined with changes in society
and the nature of work, have increased the potential for people with
disabilities to work. Nevertheless, VA has seen substantial growth of
unemployability benefit awards to veterans with service-connected
disabilities. From fiscal years 1999 to 2004, the number of veterans
receiving unemployability benefits has more than doubled, from 95,000
to 197,000.
To help people with disabilities achieve their full potential, the
disability programs financed by social insurance systems in other
countries focus on returning beneficiaries with disabilities to work.
Also, in recent years, a growing number of private insurance companies
in the United States have been focusing on developing and implementing
strategies to enable people with disabilities to return to work. Today
I would like to discuss how U.S. private sector disability programs
facilitate return to work in three key areas: (1) The eligibility
assessment process, (2) work incentives, and (3) staffing practices. I
will describe these three elements for U.S. private sector disability
insurers and compare these practices with those of VA's IU eligibility
assessment process.
My testimony is based primarily upon our prior work, including our
2001 report assessing the disability practices of selected private
insurance companies and other countries.\1\ This work involved in-depth
interviews and document review for three private sector disability
insurers: UNUMProvident, Hartford Life, and CIGNA. In addition, we used
our 1987 review of Individual Unemployability benefits\2\ as well as
preliminary observations from our ongoing review of these benefits.
In summary, the disability systems of the private insurers we
reviewed integrated return-to-work considerations early after
disability onset and throughout the eligibility assessment process.
This involved both determining--as well as enhancing--the ability of
each claimant to return to work. For example, private insurers used
vocational specialists to help ensure they fully assess the work
capacity of claimants, identify needed accommodations, and develop
individualized plans to help those who can return to work. In addition,
these insurers provided incentives for claimants to take part in
vocational rehabilitation programs and to obtain appropriate medical
treatment. They also provided incentives for employers to provide work
opportunities for claimants. Managers of these other programs also
explained to us that they have developed techniques--such as separating
(or triaging) claims--to use staff with the appropriate expertise to
provide return-to-work assistance to claimants in a cost-effective
manner.
VA's individual unemployability decisionmaking practices lag behind
those used in the private sector. As we have reported in the past, a
key weakness in VA's decisionmaking process is that the agency did not
routinely include a vocational specialist in the evaluation to fully
evaluate an applicant's ability to work. Preliminary findings from our
ongoing work indicate that VA still does not have procedures in place
to fully assess veterans' work potential. In addition, the IU
decisionmaking process lacks sufficient incentives to encourage return
to work. In considering whether to grant IU benefits, VA does not have
procedures to include vocational specialists from its Vocational
Rehabilitation and Education (VR&E) services to help evaluate a
veteran's work potential. By not using these specialists, VA also
misses an opportunity to have the specialist develop a return-to-work
plan, in collaboration with the veteran, and identify and provide
needed accommodations or services for those who can work. Instead, VA's
IU assessment is focused on the veterans' inabilities and providing
cash benefits to those labeled as ``unemployable,'' rather than
providing opportunities to help them return to work. Incorporating
return-to-work practices could help VA modernize its disability program
to enable veterans to realize their full productive potential without
jeopardizing the availability of benefits for people who cannot work.
BACKGROUND
VA pays basic compensation benefits to veterans incurring
disabilities from injuries or diseases that were incurred or aggravated
while on active military duty. VA rates the severity of all service-
connected disabilities by using its Schedule for Rating Disabilities.
The schedule lists types of disabilities and assigns each disability a
percentage rating, which is intended to represent an average earning
impairment the veteran would experience in civilian occupations because
of the disability. All veterans awarded service-connected disabilities
are assigned single or combined (in case of multiple disabilities)
ratings ranging from 0 to 100 percent, in increments of 10 percent,
based on the rating schedule; such a rating is known as a schedular
rating. Diseases and injuries incurred or aggravated while on active
duty are called service-connected disabilities.
VA'S INDIVIDUAL UNEMPLOYABILITY BENEFITS
Disability compensation can be increased if VA determines that the
veteran is unemployable (not able to engage in substantially gainful
employment) because of the service-connected disability. Under VA's
unemployability regulations, the agency can assign a total disability
rating of 100 percent to veterans who cannot perform substantial
gainful employment because of service-connected disabilities, even
though their schedular rating is less than 100 percent. To qualify for
unemployability benefits, a veteran must have a single service-
connected disability of 60 percent or more or multiple disabilities
with a combined rating of 70 percent or more, with at least one of the
disabilities rated 40 percent or more. VA can waive the minimum ratings
requirement and grant unemployability benefits to a veteran with a
lower rating; this is known as an extra-schedular rating.
Staff at VA's regional offices make virtually all eligibility
decisions for disability compensation benefits, including IU benefits.
The 57 VA regional offices use nonmedical rating specialists to
evaluate veterans' eligibility for these benefits. Upon receipt of an
application for compensation benefits, the rating specialist would
typically refer the veteran to a VA medical center or clinic for an
exam. Based on the medical examination and other information available
to the rater, the rater must first determine which of the veteran's
conditions are or are not service-connected. For service-connected
conditions, the rater compares the diagnosis with the rating schedule
to assign a disability rating.
Along with medical records, raters may also obtain other records to
evaluate an IU claim. VA may require veterans to furnish an employment
history for the 5-year period preceding the date on which the veteran
claims to have become too disabled to work and for the entire time
after that date. VA guidance also requires that raters request basic
employment information from each employer during the 12-month period
prior to the date the veteran last worked. In addition, if the veteran
has received services from VA's VR&E program or Social Security
disability benefits, the rater may also request and review related
information from these organizations.
Once VA grants unemployability benefits, a veteran may continue to
receive the benefits while working if VA determines that the work is
only marginal employment rather than substantially gainful employment.
Marginal employment exists when a veteran's annual earned income does
not exceed the annual poverty threshold for one person as determined by
the U.S. Census Bureau--$ 9,827 for 2004. Furthermore, if veterans are
unable to maintain employment for 12 continuous months due to their
service-connected disabilities, they may retain their IU benefits,
regardless of the amount earned.
MODERNIZING FEDERAL DISABILITY PROGRAMS
After more than a decade of research, GAO has determined that
Federal disability programs were in urgent need of attention and
transformation and placed modernizing Federal disability programs on
its high-risk list in January 2003. Specifically, our research showed
that the disability programs administered by VA and the Social Security
Administration (SSA) lagged behind the scientific advances and economic
and social changes that have redefined the relationship between
impairments and work. For example, advances in medicine and technology
have reduced the severity of some medical conditions and have allowed
individuals to live with greater independence and function in work
settings. Moreover, the nature of work has changed in recent decades as
the national economy has moved away from manufacturing-based jobs to
service- and knowledge-based employment. Yet VA's and SSA's disability
programs remain mired in concepts from the past--particularly the
concept that impairment equates to an inability to work--and as such,
we found that these programs are poorly positioned to provide
meaningful and timely support for Americans with disabilities.
In contrast, we found that a growing number of U.S. private
insurance companies had modernized their programs to enable people with
disabilities to return to work. In general, private insurer disability
plans can provide short- or long-term disability insurance coverage, or
both, to replace income lost by employees because of injuries and
illnesses. Employers may choose to sponsor private disability insurance
plans for employees either by self-insuring or by purchasing a plan
through a private disability insurer. The three private disability
insurers we reviewed recognized the potential for reducing disability
costs through an increased focus on returning people with disabilities
to productive activity. To accomplish this comprehensive shift in
orientation, these insurers have begun developing and implementing
strategies for helping people with disabilities return to work as soon
as possible, when appropriate.
PRIVATE INSURERS INCORPORATE RETURN-TO-WORK CONSIDERATIONS FROM THE
BEGINNING OF THE ASSESSMENT PROCESS
The three private insurers we studied incorporate return-to-work
considerations early in the assessment process to assist claimants in
their recovery and in returning to work as soon as possible.\3\ With
the initial reporting of a disability claim, these insurers immediately
set up the expectation that claimants with the potential to do so will
return to work. Identifying and providing services intended to enhance
the claimants' capacity to work are central to their process of
deciding eligibility for benefits. Further, the insurers continue to
periodically monitor work potential and provide return-to-work
assistance to claimants as needed throughout the duration of the claim.
Their ongoing assessment process is closely linked to a definition of
disability that shifts over time from less to more restrictive--that
is, from an inability to perform one's own occupation to an inability
to perform any occupation.
After a claim is received, the private insurers' assessment process
begins with determining whether the claimant meets the initial
definition of disability. In general, for the three private sector
insurers we studied, claimants are considered disabled when, because of
injury or sickness, they are limited in performing the essential duties
of their own occupation and they earn less than 60 to 80 percent of
their predisability earnings, depending upon the particular insurer.\4\
As part of determining whether the claimant meets this definition, the
insurers compare the claimant's capabilities and limitations with the
demands of his or her own occupation and identify and pursue possible
opportunities for accommodation--including alternative jobs or job
modifications--that would allow a quick and safe return to work. A
claimant may receive benefits under this definition of disability for
up to 2 years.
As part of the process of assessing eligibility according to the
``own occupation'' definition, insurers directly contact the claimant,
the treating physician, and the employer to collect medical and
vocational information and initiate return-to-work efforts, as needed.
Insurers' contacts with the claimant's treating physician are aimed at
ensuring that the claimant has an appropriate treatment plan focused,
in many cases, on timely recovery and return to work. Similarly,
insurers use early contact with employers to encourage them to provide
workplace accommodations for claimants with the capacity to work.
If the insurers find the claimant initially unable to return to his
or her own occupation, they provide cash benefits and continue to
assess the claimant to determine if he or she has any work potential.
For those with work potential, the insurers focus on return to work
before the end of the 2-year period, when, for all the private insurers
we studied, the definition of disability becomes more restrictive.
After 2 years, the definition shifts from an inability to perform one's
own occupation to an inability to perform any occupation for which the
claimant is qualified by education, training, or experience. Claimants
initially found eligible for benefits may be found ineligible under the
more restrictive definition.
The private insurers' shift from a less to a more restrictive
disability definition after 2 years reflects the changing nature of
disability and allows a transitional period for insurers to provide
financial and other assistance, as needed, to help claimants with work
potential return to the workforce. During this 2-year period, the
insurer attempts to determine the best strategy for managing the claim.
Such strategies can include, for example, helping plan medical care or
providing vocational services to help claimants acquire new skills,
adapt to assistive devices to increase functioning, or find new
positions. For those requiring vocational intervention to return to
work, the insurers develop an individualized return-to-work plan, as
needed. Basing the continuing receipt of benefits upon a more
restrictive definition after 2 years provides the insurer with leverage
to encourage the claimant to participate in a rehabilitation and
return-to-work program. Indeed, the insurers told us they find that
claimants tend to increase their efforts to return to work as they near
the end of the 2-year period.
If the insurer initially determines that the claimant has no work
potential, it regularly monitors the claimant's condition for changes
that could increase the potential to work and reassesses after 2 years
the claimant's eligibility under the more restrictive definition of
disability. The insurer continues to look for opportunities to assist
claimants who qualify under this definition of disability in returning
to work. Such opportunities may occur, for example, when changes in
medical technology--such as new treatments for cancer or AIDS--may
enable claimants to work, or when claimants are motivated to work.
The private insurers that we reviewed told us that throughout the
duration of the claim, they tailor the assessment of work potential and
development of a return-to-work plan to the specific situation of each
individual claimant. To do this, disability insurers use a wide variety
of tools and methods when needed. Some of these tools, as shown in
tables 1 and 2, are used to help ensure that medical and vocational
information is complete and as objective as possible. For example,
insurers consult medical staff and other resources to evaluate whether
the treating physician's diagnosis and the expected duration of the
disability are in line with the claimant's reported symptoms and test
results. Insurers may also use an independent medical examination or a
test of basic skills, interests, and aptitudes to clarify the medical
or vocational limitations and capabilities of a claimant. In addition,
insurers identify transferable skills to compare the claimant's
capabilities and limitations with the demands of the claimant's own
occupation. This method is also used to help identify other suitable
occupations and the specific skills needed for these new occupations
when the claimant's limitations prevent him or her from returning to a
prior occupation. Included in these tools and methods are services to
help the claimant return to work, such as job placement, job
modification, and retraining.
Table 1.--Medical Assessment: Tasks, Tools, and Methods
------------------------------------------------------------------------
Task Tools and methods
------------------------------------------------------------------------
Assess the diagnosis, treatment, and Consultation of medical
duration of the impairment and begin staff and other resources,
developing a treatment plan focused on including current medical
returning the claimant to work promptly guidelines describing
and safely. symptoms, expected results
from diagnostic tests,
expected duration of
disability, and treatment.
Assess the claimant's cognitive skills.... Standardized mental tests.
Validate the treating physician's Review of the claimant's
assessment of the impairment's effect on file, generally by a nurse
the claimant's ability to work and the or a physician who is not
most appropriate treatment and the claimant's treating
accommodation. physician.
Verify the diagnosis, level of Independent medical
functioning, and appropriateness of examination of the claimant
treatment. by a contracted physician.
Evaluate the claimant's ability to Home visits by a field nurse
function, determine needed assistance, or investigator or
and help the claimant develop an accompanied doctor visits.
appropriate treatment plan with the
physician.
Assess the claim's validity............... Home visits and interviews
with neighbors or others
who have knowledge of the
claimant's activities.
------------------------------------------------------------------------
Source: GAO analysis of private insurers' practices.
Table 2.--Vocational Assessment and Assistance: Tasks, Tools, and
Methods
------------------------------------------------------------------------
Task Tools and methods
------------------------------------------------------------------------
Identify transferable skills, validate Test basic skills,
restrictions on and capabilities for such as reading or math.
performing an occupation, and identify Determine interests
other suitable occupations and retraining and aptitudes.
programs. Evaluate functional
capacities associated with
an occupation, such as
lifting, walking, and
following directions.
Compare functional
capacities, work history,
education, and skills with
the demands of an
occupation.
Enhance work capabilities and help develop Provide resume
job-seeking skills. preparation, help develop
job-seeking skills, and
help with job placement.
Assist in obtaining
physical, occupational, or
speech therapy and access
to employee assistance,
support groups, or state
agency vocational
rehabilitation or other
community services.
Identify and fund
on-the-job training or
other educational courses.
Assess ability to perform own or any Observe and analyze
occupation, assess potential for the essential duties of the
accommodation, and determine whether claimant's own occupation,
sufficient salary is offered locally or another occupation for the
nationally for a suitable occupation. same employer, or an
occupation of a prospective
employer.
Determine the
general availability and
salary range of specified
occupations.
Identify for a
specified occupation the
potential employers and
related job descriptions,
salary range, and openings.
Reaccustom claimant to a full work Provide work
schedule and enable claimant to overcome opportunities for the
impairment and return to work. claimant to gradually
resume his or her job
duties.
Procure devices to
assist with work or
otherwise help to modify
the job.
------------------------------------------------------------------------
Source: GAO analysis of private insurers' practices.
PRIVATE INSURERS PROVIDE INCENTIVES FOR CLAIMANTS AND EMPLOYERS TO
ENCOURAGE AND FACILITATE RETURN TO WORK
To facilitate return to work, the private insurers we studied
employment incentives both for claimants to participate in vocational
activities and receive appropriate medical treatment, and for employers
to accommodate claimants. The insurers require claimants who could
benefit from vocational rehabilitation to participate in an
individualized return-to-work program. They also provide financial
incentives to promote claimants' efforts to become rehabilitated and
return to work. To better ensure that medical needs are met, the
insurers we studied require that claimants receive appropriate medical
treatment and assist them in obtaining this treatment. In addition,
they provide financial incentives to employers to encourage them to
provide work opportunities for claimants.
The three private insurers we reviewed require claimants who could
benefit from vocational rehabilitation to participate in a customized
rehabilitation program or risk loss of benefits. As part of this
program, a return-to-work plan for each claimant can include, for
example, adaptive equipment, modifications to the work site, or other
accommodations. These private insurers mandate the participation of
claimants whom they believe could benefit from rehabilitation because
they believe that voluntary compliance has not encouraged sufficient
claimant participation in these plans.\5\
The insurers told us that they encourage rehabilitation and return
to work by allowing claimants who work to supplement their disability
benefit payments with earned income.\6\ During the first 12 or 24
months of receiving benefits, depending upon the particular insurer,
claimants who are able to work can do so to supplement their benefit
payments and thereby receive total income of up to 100 percent of
predisability earnings.\7\ After this period, if the claimant is still
working, the insurers decrease the benefit amount so that the total
income a claimant is allowed to retain is less than 100 percent of
predisability income.
When a private insurer, however, determines that a claimant is
able, but unwilling, to work, the insurer may reduce or terminate the
claimant's benefits. To encourage claimants to work to the extent they
can, even if only part-time, two of the insurers told us they may
reduce a claimant's benefit by the amount the claimant would have
earned if he or she had worked to maximum capacity. The other insurer
may reduce a claimant's monthly benefit by the amount that the claimant
could have earned if he or she had not refused a reasonable job offer--
that is, a job that was consistent with the claimant's background,
education, and training. Claimants' benefits may also be terminated if
claimants refuse to accept a reasonable accommodation that would enable
them to work.
Since medical improvement or recovery can also enhance claimants'
ability to work, the private insurers we studied not only require, but
also help, claimants to obtain appropriate medical treatment. To
maximize medical improvement, these private insurers require that the
claimant's physician be qualified to treat the particular impairment.
Additionally, two insurers require that treatment be provided in
conformance with medical standards for treatment type and frequency.
Moreover, the insurers' medical staff work with the treating physician
as needed to ensure that the claimant has an appropriate treatment
plan. The insurers told us they may also provide funding for those who
cannot otherwise afford treatment.
The three private sector insurers we studied may also provide
financial incentives to employers to encourage them to provide work
opportunities for claimants. By offering lower insurance premiums to
employers and paying for accommodations, these private insurers
encourage employers to become partners in returning disabled workers to
productive employment. For example, to encourage employers to adopt a
disability policy with return-to-work incentives, the three insurers
offer employers a discounted insurance premium. If their disability
caseload declines to the level expected for those companies that assist
claimants in returning to work, the employers may continue to pay the
discounted premium amount. These insurers also fund accommodations, as
needed, for disabled workers at the employer's work site.\8\
PRIVATE INSURERS STRIVE TO USE APPROPRIATE STAFF TO ACHIEVE ACCURATE
DISABILITY DECISIONS AND SUCCESSFUL RETURN-TO-WORK OUTCOMES
The private disability insurers we studied have developed
techniques for using the right staff to assess eligibility for benefits
and return those who can to work. Officials of the three private
insurers told us that they have access to individuals with a range of
skills and expertise, including medical experts and vocational
rehabilitation experts. They also told us that they apply this
expertise as appropriate to cost effectively assess and enhance
claimants' capacity to work.
The three private disability insurers that we studied have access
to multidisciplinary staff with a wide variety of skills and experience
who can assess claimants' eligibility for benefits and provide needed
return-to-work services to enhance the work capacity of claimants with
severe impairments. The private insurers' core staff generally includes
claims managers, medical experts, vocational rehabilitation experts,
and team supervisors. The insurers explained that they set hiring
standards to ensure that the multidisciplinary staff is highly
qualified. Such qualifications are particularly important because
assessments of benefit eligibility and work capacity can involve a
significant amount of professional judgment when, for example, a
disability cannot be objectively verified on the basis of medical tests
or procedures or clinical examinations alone.\9\ Table 3 describes the
responsibilities of this core staff of experts employed by private
disability insurers, as well as its general qualifications and
training.
Table 3.--Responsibilities and Qualifications of Staff Employed by
Private Disability Insurers To Assess and Enhance a Claimant's Work
Potential
------------------------------------------------------------------------
Qualifications
Type of staff Responsibilities and training
------------------------------------------------------------------------
Claims managers............. Determine One insurer
disability benefit gives
eligibility. preference to
Develop, those with a
implement, and monitor college degree
an individualized claim and requires
management strategy. insurance
Serve as primary claims
contact for the claimant experience and
and the claimant's specialized
employer. training and
Focus on education.
facilitating the Another
claimant's timely, safe requires a
return to work. college
Coordinate the degree, a
use of expert resources. passing grade
on an insurer-
sponsored
test, and
specialized
training and
coaching.
Medical and related Collect and Medical staff
experts\1\. evaluate medical and include
functional information registered
about the claimant to nurses with
assist in the case
eligibility assessment management or
and help to ensure that disability-
claimants receive the related
appropriate medical care experience and
to enable them to return experts in
to work. behavioral and
At one insurer, mental issues,
physicians also help such as
train company staff. psychologists,
experienced
psychiatric
nurses, and
licensed
social
workers. Two
insurers also
employ board-
certified
physicians in
various
specialties.\2
\
Vocational rehabilitation Help assess the Rehabilitation
experts. claimant's ability to experts are
work. master's-
Help overcome degree-level
work limitations by vocational
identifying needed rehabilitation
assistance, such as counselors. In
assistive devices and addition, one
additional training, and insurer
ensuring that it is requires board
provided. certification
and 5 years of
experience.
Supervisors................. Provide One insurer
oversight, mentoring, gives
and training. preference to
those with a
college degree
and requires 3
years'
disability
experience,
some
management
experience,
and
specialized
training.
Another
insurer
requires a
college
degree, more
than 12 years'
disability
claims
experience,
and completion
of courses
leading to a
professional
designation.
------------------------------------------------------------------------
\1\ At one company, the medical experts are employees of a company
subsidiary but are often colocated with the insurer's employees.
\2\ One company, for example, employs 85 part- and full-time physicians,
including psychiatrists, doctors of internal medicine, orthopedists,
family practice physicians, cardiologists, doctors of occupational
medicine, and neurologists.
Source: GAO analysis of private insurers' practices.
The three disability insurers we reviewed use various strategies
for organizing their staff to focus on return to work, with teams
organized to manage claims associated either with a specific impairment
type or with a specific employer (that is, the group disability
insurance policyholder). One insurer organizes its staff by the
claimant's impairment type--for example, cardiac/respiratory,
orthopedic, or general medical--to develop in-depth staff expertise in
the medical treatments and accommodations targeted at overcoming the
work limitations associated with a particular impairment. The other two
insurers organize their staff by the claimant's employer because they
believe that this enables them to better assess a claimant's job-
specific work limitations and pursue workplace accommodations,
including alternative job arrangements, to eliminate these
limitations.\10\ Regardless of the overall type of staff organization,
each of the three insurers facilitates the interaction of its core
staff--claims managers, medical experts, and vocational rehabilitation
experts--by pulling these experts together into small,
multidisciplinary teams responsible for managing claims. Additionally,
one insurer engenders team interaction by physically colocating core
team members in a single working area.
To provide a wide array of needed experts, the three disability
insurers expand their core staff through agreements or contracts with
subsidiaries or other companies. These experts--deployed both at the
insurer's work site and in the field--provide specialized services to
support the eligibility assessment process and to help return claimants
to work. For instance, these insurers contract with medical experts
beyond their core employee staff--such as physicians, psychologists,
psychiatrists, nurses, and physical therapists--to help test and
evaluate the claimant's medical condition and level of functioning. In
addition, the insurers contract with vocational rehabilitation
counselors and service providers for various vocational services, such
as training, employment services, and vocational testing.
The private insurers we examined told us that they strive to apply
the appropriate type and intensity of staff resources to cost-
effectively return to work claimants with work capacity. The insurers
described various techniques that they use to route claims to the
appropriate claims management staff, which include separating (or
triaging) different types of claims and directing them to staff with
the appropriate expertise. According to one insurer, the critical
factor in increasing return-to-work rates and, at the same time,
reducing overall disability costs is proper triaging of claims. In
general, the private insurers separate claims by those who are likely
to return to work and those who are not expected to return to work. The
insurers told us that they assign the type and level of staff necessary
to manage claims of people who are likely to return to work on the
basis of the particular needs and complexity of the specific case (see
table 4).
Table 4.--Staff Assignment for Claims Management by Triage Category
------------------------------------------------------------------------
Types of return-to-
Triage category Staff assigned work services
provided
------------------------------------------------------------------------
Likely to return to work:
Condition requires medical Medical specialist Recommend
assistance and more than 1 improvements in
year to stabilize medically. treatment plan to
treating
physician.
Refer
claimant for more
specialized or
appropriate
medical services.
Ensure
frequency of
treatment meets
standards for
condition.
Condition requires less than a Claims manager Monitor
year to stabilize. medical
condition.
Maintain
contact with
employer and
physician to
ensure return to
work.
Obtain
input from
medical and
vocational
specialists as
needed.
Condition is stabilized, and Multidisciplinary Evaluate
claimant needs rehabilitation team including-- claimant's
or job accommodation to return Vocational functional
to work. expert abilities for
Medical work.
expert Customize
Claims return-to-work
specialist plan.
Other Arrange
specialists as for needed return-
needed to-work services.
Monitor
progress against
expected return-
to-work date.
Unlikely to return to work:
Claimant is determined unable Claims manager Review
to return to work. medical condition
and level of
functioning
regularly.
------------------------------------------------------------------------
Source: GAO analysis of private insurers' practices.
As shown in table 4, claimants expected to need medical assistance,
such as those requiring more than a year for medical stabilization, are
likely to receive an intensive medical claims management strategy. A
medical strategy involves, for example, ensuring that the claimant
receives appropriate medical treatment. Claimants who need less than a
year to stabilize medically are managed much less intensively. For
these claims, a claims manager primarily monitors the claimant's
medical condition to assess whether it is stable enough to begin
vocational rehabilitation, if appropriate. Alternatively, a claimant
with a more stable, albeit serious, medical condition who is expected
to need vocational rehabilitation, job accommodations, or both to
return to work might warrant an intensive vocational strategy. The
private disability insurers generally apply their most resource-
intensive, and therefore most expensive, multidisciplinary team
approach to these claimants. Working closely with the employer and the
attending physician, the team actively pursues return-to-work
opportunities for claimants with work potential.
Finally, claimants who are likely not to return to work (or
``stable and mature'' claims) are generally managed using a minimum
level of resources, with a single claims manager responsible for
regularly reviewing a claimant's medical condition and level of
functioning.\11\ The managers of these claims carry much larger
caseloads than managers of claims that receive an intensive vocational
strategy. For example, one insurer's average claims manager's caseload
for these stable and mature claims is about 2,200 claims, compared with
an average caseload of 80 claims in the same company for claims managed
more actively.
VA'S INDIVIDUAL UNEMPLOYABILITY RETURN-TO-WORK EFFORTS LAG BEHIND OTHER
PROGRAMS
Unlike disability compensation programs in the private sector, VA
has not drawn on vocational experts for IU assessments to examine the
claimant's work potential and identify the services and accommodations
needed to help those who could work to realize their full potential. In
our 1987 report, we found that VA had not routinely obtained all
vocational information needed to determine a veteran's ability to
engage in substantially gainful employment before it granted IU
benefits. Without understanding how key vocational factors, such as the
veteran's education, training, earnings, and prior work history, affect
the veteran's work capacity, VA cannot adequately assess the veteran's
ability to work. To perform this analysis, VA officials told us that
the agency has vocational specialists who are specially trained to
perform this difficult analysis. Skilled vocational staff can determine
veterans' vocational history, their ability to perform past or other
work, and their need for retraining. By not collecting sufficient
information and including the expertise of vocational specialists in
the assessment, VA did not have an adequate basis for awarding or
denying a veteran's claim for unemployability benefits.
Preliminary findings from our ongoing work indicate that VA still
does not have procedures in place to fully assess veterans' work
potential. In addition, the IU decision-making process lacks sufficient
incentives to encourage return to work. In considering whether to grant
IU benefits, VA does not have procedures to include vocational
specialists from its VR&E services to help evaluate a veteran's work
potential. By not using these specialists, VA also misses an
opportunity to have the specialist develop a return-to-work plan, in
collaboration with the veteran, and identify and provide needed
accommodations or services for those who can work. Instead, VA's IU
assessment is focused on the veterans' inabilities and providing cash
benefits to those labeled as ``unemployable,'' rather than providing
opportunities to help them return to work.
CONCLUDING OBSERVATIONS
Return-to-work practices used in the U.S. private sector reflect
the understanding that people with disabilities can and do return to
work. The continuing deployment of our military forces to armed
conflict has focused national attention on ensuring that those who
incur disabilities while serving in the military are provided the
services needed to help them reach their full work potential.
Approaches from the private sector demonstrate the importance of using
the appropriate medical and vocational expertise to assess the
claimant's condition and provide appropriate medical treatment,
vocational services, and work incentives. Applying these approaches to
VA's IU assessment process would raise a number of important policy
issues. For example, to what extent should the VA require veterans
seeking IU benefits to accept vocational assistance or appropriate
medical treatment? Such policy questions will be answered through the
national policymaking process involving the Congress, VA, veterans'
organizations, and other key stakeholders. Nevertheless, we believe
that including vocational expertise in the IU decision-making process
could provide VA with a more adequate basis to make decisions and
thereby better ensure program integrity. Moreover, incorporating
return-to-work practices could help VA modernize its disability program
to enable veterans to realize their full productive potential without
jeopardizing the availability of benefits for people who cannot work.
Mr. Chairman, this concludes my prepared statement. I would be
pleased to respond to any questions you or Members of the Committee may
have.
______
Response to Written Questions Submitted by Hon. Larry E. Craig
to Cynthia A. Bascettta
Question 1. As we discussed at the hearing, the Department of
Veterans Affairs does Not consider age in making an individual
unemployability determination. Should age be a factor in these
determinations?
Answer. Concerns about the extensive growth of Individual
Unemployability (IU) benefits have raised questions about the use of
age as a factor in decisionmaking. The purpose of IU benefits is to
replace veterans' average loss in earnings because service-connected
impairments leave them unable to work. To determine compensation to a
veteran, Department of Veterans Affairs' (VA) rating specialists use a
rating schedule to assign a degree of severity to the disability (known
as a schedular rating) that determines the veteran's basic
compensation. However, if a veteran does not receive a 100 percent
schedular rating, but is found to have service-connected disabilities
that make the veteran unemployable (not able to engage in substantially
gainful employment), the veteran can be awarded IU benefits that
increase his or her compensation benefits to the 100 percent level. To
help ensure that IU benefits are provided only to veterans who cannot
work because of service-connected disabilities, VA's rating specialists
are expected to identify and isolate the effects of various factors not
connected to military service, such as age, nonservice injuries, and
voluntary withdrawal from the labor market. VA, however, does not
consider age in its decisionmaking and can grant benefits to veterans
of any age, if the agency finds that their service-connected
impairments make them unemployable. For example, an 80-year-old veteran
who has a 60 percent or higher schedular rating and no earnings could
be determined unemployable and receive IU benefits.
Although we are not taking a position on whether age should be a
factor in IU decisionmaking, we believe that in evaluating its possible
inclusion, Congress has several key issues to consider. These issues
would require careful analysis and input from VA, veterans'
organizations, and other key stakeholders. For example, Congress may
want to examine the purpose of IU benefits to evaluate whether
incorporating age into IU determinations would enhance or detract from
their purpose. In addition, it may want to evaluate the options for
including age as a criterion and the benefits and costs of those
options. For example, the Social Security Administration's (SSA)
disability programs consider age when evaluating an individual with a
severe impairment that does not meet or equal the agency's Listing of
Impairments and who cannot perform a prior job. To evaluate whether the
individual can perform another job in the national economy, SSA takes
into consideration the individual's age, along with prior work
experience, functional limitations, and education. For example,
individuals who are age 50 or older and have very limited work
experience with no transferable skills, functional capacities limited
to performing only sedentary or light work, and less than a high school
education are generally found eligible for disability benefits.
Conversely, if these individuals had transferable skills or a high
school education or better that allowed them to perform skilled work,
they would generally be found ineligible. SSA incorporates age into its
decision-making process because it believes that advancing age, along
with other severe functional and educational limitations, restricts an
individual's ability to adapt to and perform a new job.
Congress may also want to consider whether there should be an age
cutoff for applying for IU benefits. Unlike VA's disability
compensation program, SSA's Old-Age, Survivors and Disability Insurance
program does not grant disability benefits to individuals after SSA's
normal retirement age, but it may provide them with retirement
benefits. According to VA, in the past 20 years the number of veterans
at or beyond retirement age granted IU benefits has grown
substantially. In evaluating an age cutoff for awarding IU
compensation, Congress may also want to consider how disability
compensation fits within the broader spectrum of disability and
retirement benefits to ensure that veterans with disabilities receive
adequate compensation.
GAO will be issuing a report in late spring, 2006 that will address
in more detail the age of IU beneficiaries, the value of their
benefits, and VA's management of initial and ongoing IU eligibility
determinations.
Chairman Craig. Cynthia, thank you very much.
Rick.
STATEMENT OF RICK SURRATT, DEPUTY NATIONAL LEGISLATIVE
DIRECTOR, DISABLED AMERICAN VETERANS
Mr. Surratt. Mr. Chairman, thank you for the opportunity to
address the issue of whether the rising number of disabled
veterans deemed unemployable is an indication that the benefit
system is failing.
As you know, veterans with service-connected disabilities
that prevent them from working are totally disabled for
compensation purposes. Provisions for total disability ratings
on the basis of individual unemployability are entirely
consistent with the purpose and essential to the fulfillment of
the disability compensation program, which is to provide
benefits proportionate to the level of disability.
An increased number of veterans rated totally disabled on
the basis of unemployability does not itself necessarily
suggest systemic fault or failure because there very well may
be other reasons. These reasons may indeed suggest a proper
working of the system. The increase may be a proper response to
and reflection of changing conditions. The increase in the
number of unemployable veterans coincides with a comparable
increase in the number of veterans with more severe
disabilities and higher schedule ratings, from 60 to 90
percent. The increase in the number of unemployable veterans is
consistent with the national trend of an increase in the number
of disabled persons, particularly an increase in disabled
persons on the Social Security rolls, which is attributed to an
aging general population. As with the general population, we
have an aging veteran population, and we know that many
disabilities progress and their effects become worse with age.
Judicial review of VA decisions on unemployability has
forced closer adherence to the law and better reasoned
decisions, and that almost assuredly accounts for some of the
increase in unemployability ratings.
Perhaps one of the most responsible factors is the
increasing prevalence of mental disorders, particularly post
traumatic stress disorder among veterans, along with a rating
formula for mental disorders under which many unemployable
veterans cannot possibly qualify for a 100 percent scheduler
evaluation, and must therefore be rated individually
unemployable.
Mr. Chairman, today here in Washington, in Government, we
see, for example, paralyzed veterans, blind veterans and
veterans with loss of both lower extremities working. So we
might ask, if all those veterans who would be 100 percent under
the rating schedule are working, why do we see an increase in
veterans with seemingly less disability on the individual
unemployability rolls?
First of all, we probably would not see the same thing in
the towns and rural areas that make up much of America with
their predominantly manufacturing and agricultural jobs. We can
safely conclude that technology, accessibility and
accommodation have made it possible for the paralyzed and blind
to work in structured settings. For veterans with mental
disorders, chronic pain or generalized weakness, the
competitive workplace may not be as hospitable, and the
inherent nature of these kinds of disabilities may be more of a
hindrance in work and even rehabilitation because they
interfere with the ability to reason, concentrate, interact
with others, cope with the pressures of the workplace, and meet
production demands, et cetera.
Nonetheless, if we reviewed a sample of VA's allowances of
individual unemployability ratings for the purpose of finding
fault with some of them, we probably could. At the same time,
we might also find an equal or greater number of erroneous
denials.
We have pointed to some reasons for the increase in
individual unemployability ratings, but we certainly do not
claim to know precisely all the causes. Information on the
predominant kinds of disabilities affecting those with
unemployability ratings would provide greater understanding. We
should also have information on whether veterans with certain
types of disabilities like PTSD are typically less successful
in attempts at vocational rehabilitation.
Without a better understanding of factors such as these,
the DAV believes we can draw no firm conclusions on the
questions raised in today's hearing. At this point, we see no
factual basis for concluding that faulty claims adjudication is
responsible for the increase in veterans rated unemployable.
That includes my statement, Mr. Chairman. I would be happy
to answer any questions the Committee may have.
[The prepared statement of Mr. Surratt follows:]
Prepared Statement of Rick Surratt, Deputy National Legislative
Director, Disabled American Veterans
Mr. Chairman and Members of the Committee:
In response to your invitation to testify, I am pleased to appear
before the Committee to present the views of the Disabled American
Veterans (DAV) on the question of how well the system of veterans
benefits of the Department of Veterans Affairs (VA) is serving veterans
deemed to be unemployable. In this regard, the Committee observes that
VA's Departmental Strategic Goal 1 is to ``[r]estore the capability of
veterans with disabilities to the greatest extent possible, and improve
the quality of their lives and that of their families.'' In view of the
trend of increasing numbers of veterans deemed totally disabled by
reason of unemployability, the Committee indicates it will examine this
component of the compensation program as well as address the question
of whether the VA's Vocational Rehabilitation and Employment Program is
being used to its optimum.
For those veterans who are in fact unable to work because of
service-connected disabilities but whose disabilities do not meet the
requirements for a total rating under VA's regular rating schedule
criteria, VA has special provisions for awarding total disability
ratings. Such ratings are said to be ``extra-schedular.''
Congress delegated to the Secretary of Veterans Affairs the
authority to adopt and apply a schedule for rating disabilities.\12\
For purposes of compensation payments, the schedule provides for
gradation of disability in increments of 10 percent, ranging from 10
percent to 90 percent for partial disability, with 100 percent for
total disability.\13\ The ratings are to be based, ``as far as
practicable, upon the average impairments of earning capacity'' in
civil occupations resulting from disability.\14\ ``Total disability
will be considered to exist when there is present any impairment of
mind or body which is sufficient to render it impossible for the
average person to follow a substantially gainful occupation.'' \15\
However, it is the ``established policy of [VA] that all veterans who
are unable to secure and follow a substantially gainful occupation by
reason of service-connected disabilities shall be rated totally
disabled.'' \16\ Therefore, ``[t]otal disability ratings for
compensation may be assigned, where the schedular rating is less than
total, when the disabled person is, in the judgment of the rating
agency, unable to secure or follow a substantially gainful occupation
as a result of service-connected disabilities.'' \17\ Accordingly,
total ratings are authorized ``for any disability or combination of
disabilities for which the Schedule for Rating Disabilities prescribes
a 100 percent evaluation or, with less disability'' that renders the
veteran, in his or her individual circumstances, unable to follow a
substantially gainful occupation.\18\ In short, VA may find a veteran's
disability to be total either on a schedular basis or due to individual
unemployability (IU or sometimes TDIU).
The distinction between total disability on a schedular basis and
total disability based on IU is that total disability on a schedular
basis is founded on an ``average person'' standard, as are all regular
schedular ratings, while unemployability ratings are based on the
impact of the disability in the individual's own circumstances.
Average earning capacity, or average person, is a standard or a
single value used to represent a broad universe of persons. Like an
average, or arithmetic mean, it is approximately the middle position in
a data set or intermediate between the two ends or extremes on a scale.
Thus, roughly half of workers have lower earning capacity and roughly
half have higher earning capacity than the average, and earning
capacity is tied primarily to educational and vocational backgrounds.
Consequently, while the concept of average impairment in earning
capacity is the basis underlying the various percentage evaluations
provided for given levels of disability in the rating schedule,
unemployability determinations are not based on average impairment and
must, therefore, take into account the disability as it affects the
individual's ability to follow a substantially gainful occupation\19\
in light of his or her attained work skills and educational background.
Unemployability ratings recognize that individuals may be totally
disabled for work with less disability than that which would be
necessary to totally disable the average person. Sometimes, the extent
of disability depends more largely upon the affected individual than
upon the character of the disability. For example, the loss of both
legs might totally disable a common laborer with little education while
it would have relatively less effect upon the earning capacity of an
accountant.
Though IU is an exception to the average person standard in that
the average person would be deemed totally disabled when the 100
percent schedular criteria are met, IU is not available for unusual
circumstances only. An IU rating is based upon a regular variation in
the effect of disability given the veteran's educational and vocational
background. Given that roughly half of all disabled veterans will be
more impaired by a disability than the average veteran, it is
understandable that many will be totally disabled by diseases or
injuries rated less than 100 percent under schedular criteria. In
addition, many disabilities that can be totally disabling for some have
maximum schedular ratings of less than 100 percent.\20\
The number of veterans rated totally disabled for IU has increased
over the past several years, but that is somewhat consistent with a
pattern of higher numbers of more seriously disabled veterans in the
veteran population. As a prerequisite for an IU rating, a veteran
generally must have disability rated 60 percent or higher under the
terms of the rating schedule.\21\ During fiscal years (FYs) 2000 to
2004, the number of veterans with 60 percent ratings increased by 31
percent. The number of veterans rated 70 percent increased by 60
percent; veterans rated 80 percent increased by 75 percent; and
veterans rated 90 percent increased by 91 percent. During the same
period, veterans rated total due to IU increased 78 percent. In fiscal
year 2004, approximately 438,000 veterans were seriously disabled
enough to meet the schedular prerequisite for an IU rating, compared
with approximately 286,000 in fiscal year 2000.\22\
In addition to higher numbers of veterans potentially eligible for
IU, an aging veteran population also may account in part for increased
numbers of veterans who are unemployable. Progressive or degenerative
conditions worsen with age. Disabled Vietnam veterans, who make up our
largest single group of disabled veterans by period of service and
whose disabilities are on average rated higher than their counterparts
from other periods of service,\23\ had an estimated median age of 57.4
years at the end of fiscal year 2004.\24\
According to a review of studies conducted under VA contract by
Economic Systems, Inc., the increase in the number of veterans on the
compensation rolls is consistent with a national trend of an increase
in the number of disabled persons.
Most sources indicate that the number of disabled in the U.S.
general population has been increasing as the U.S. population is aging.
For example, the number of disabled workers and their dependents
receiving [benefits from the] Social Security Administration's (SSA)
Social Security Disability Insurance (SSDI) program increased
significantly from 2.7 million in 1970 to 7.6 million in 2003. This is
important as SSDI has a restrictive definition of disability (i.e.,
only those workers who are unable to perform any substantial gainful
activity are eligible). Meanwhile, SSDI disability rates among the
adult population (16 to 64 years old) have almost doubled from 2.2
percent in 1970 to 4.0 percent in 2003.
The total number of veterans receiving disability compensation
payments from VA has increased only slightly from 2.07 million in 1955
to 2.09 million in 1970 to 2.49 million in 2003. However, the
percentage of veterans receiving VA disability compensation has risen
from 7.6 percent in 1970 to 10.0 percent in 2003. Compared to the
percent of U.S. population 16 to 64 years of age on SSDI rolls (4
percent in 2003), [the] VA disability rate, in absolute terms, is
higher, but in terms of the rate of increase in disability rate from
1970 to 2003, it is the same as SSDI.
According to the 1990 Census, there were 12.8 million individuals
(aged 16-64) with work related disability (i.e., limitation in a
person's ability to work due to a chronic health condition or
impairment). Slightly over one-half (51.5 percent) of them reported
themselves severely disabled (LaPlante, 1993). There was a significant
increase in both figures in the 2000 census. Of the 21.3 million who
reported to have a work related disability 65.8 percent claimed a
severe disability (Census 2000).\25\
Of course, the comparison above is between totally disabled workers
and all disabled veterans.
An increasing prevalence of service-connected post-traumatic stress
disorder (PTSD) and other mental disorders among veterans may also
account for the increase in IU ratings. Under its ``General Rating
Formula for Mental Disorders,'' the VA rating schedule provides for 6
different evaluations: 0 percent, 10 percent, 30 percent, 50 percent,
70 percent, and 100 percent.\26\ To be rated 100 percent on a schedular
basis under this formula, a veteran must meet the pertinent criteria
from among the following:
Total occupational and social impairment, due to such symptoms as:
gross impairment in thought processes or communication; persistent
delusions or hallucinations; grossly inappropriate behavior; persistent
danger of hurting self or others; intermittent inability to perform
activities of daily living (including maintenance of minimal personal
hygiene); disorientation to time or place; memory loss for names of
close relatives, own occupation, or own name.
Needless to say, a person who has a mental condition meeting these
criteria would have impairment well beyond a level that would remove
any possibility working. Such person would be profoundly disabled and
nearly helpless. Few veterans will meet these criteria.
Now consider the criteria a disabled a veteran must meet to be
rated 70 percent, the only rating that meets the schedular prerequisite
for IU:
Occupational and social impairment, with deficiencies in most
areas, such as work, school, family relations, judgment, thinking, or
mood, due to such symptoms as: suicidal ideation; obsessional rituals
which interfere with routine activities; speech intermittently
illogical, obscure, or irrelevant; near continuous panic or depression
affecting the ability to function independently, appropriately and
effectively; impaired impulse control (such as unprovoked irritability
with periods of violence); spatial disorientation; neglect of personal
appearance and hygiene; difficulty in adapting to stressful
circumstances (including work or a work like setting); inability to
establish and maintain effective relationships.
Few veterans will be able to work with such marked symptoms. If
they are to be adequately compensated, IU is their only resort. Under
the general rating formula in effect prior to the total restructuring
in 1996, any veteran unable to work because of a service-connected
mental disorder was deemed totally disabled under the schedular
criteria. Section 4.16(c) of title 38, Code of Federal Regulations,
provided that the IU provisions of Sec. 4.16(a) did not apply to mental
disorders:
The provisions of paragraph (a) of this section are not for
application in cases in which the only compensable service-connected
disability is a mental disorder assigned a 70 percent evaluation, and
such mental disorder precludes a veteran from securing or following a
substantially gainful occupation. In such cases, the mental disorder
shall be assigned a 100 percent schedular evaluation under the
appropriate diagnostic code.
Paragraph (c) was removed with the promulgation of the new general
rating formula for mental disorders.\27\ Because that is no longer the
rule under the current rating formula, all the ratings that would have
been 100 percent on a schedular basis under this special rule now are
on the basis of IU, which naturally caused an increase in the number of
veterans rated IU. That effect is magnified by the increasing
prevalence of mental disorders among veterans.\28\ PTSD accounts for
44.6 percent of all service-connected mental disorders.\29\
Among all veterans, PTSD is the seventh most prevalent service-
connected disability.\30\ Among the group most affected, Vietnam
veterans, it is the second most prevalent disability.\31\
The availability of judicial review of VA decisions has also
probably been a factor in the number of allowances of claims for IU.
The Court of Appeals for Veterans Claims, formerly the Court of
Veterans Appeals, has been particularly critical of adjudication
practices that led to arbitrary denials of IU. The Court has also held
that VA cannot ignore the issue of entitlement to IU when it is
presented in the record. The Court has rejected as arbitrary VA's
practice of denying IU on the catchall unsupported conclusion that,
despite severe disabilities, the veteran ``can perform some kind of
work.'' \32\ The Court has rejected denials based on inadequately
developed records.\33\ The courts have also held that, where the record
in a claim for increased compensation includes evidence of
unemployability due to the service-connected disability, the law
requires VA to consider entitlement to IU though the veteran may not
have expressly claimed a total rating on that basis.\34\
The availability of IU ratings for the many veterans who do not fit
into the ``average'' mold is essential to a fair and complete
compensation system. The rules must be designed and the decisions must
be made in a manner to result in a fair disposition of this question.
As the Court stated, ``[i]t is clear that the claimant need not be a
total `basket case' before the courts find that there is an inability
to engage in substantial gainful activity. The question must be looked
at in a practical manner, and mere theoretical ability to engage in
substantial gainful employment is not a sufficient basis to deny
benefits. The test is whether a particular job is realistically within
the physical and mental capabilities of the claimant.'' \35\
Inherently, IU determinations must necessarily rely heavily on
subjective data, particularly those involving mental disorders.
However, that is unavoidable in the assessment of disability as it
affects the individual because, as stated, the same medical condition
will affect different individuals quite differently, not only from the
standpoint of physical or mental functioning, but also in light of
innumerable variables relating to vocational and educational
attainments.
A 60 percent or greater disability under the terms of the schedule
necessarily means that, for veterans with more demanding occupations,
the affected veteran is approaching that minimum level of efficiency or
tolerance for the demands or stresses or strains of work which is
acceptable to an employer who must confront the realities of a profit-
driven, competitive economy. A veteran may struggle and be able to
barely satisfy an employer's needs for years and then suddenly be
unable to continue meeting those minimum needs due to a gradual
progression of his or her disability. A subtle change in the veteran's
physical or mental capacity may reduce work attendance or performance
to a level that is unacceptable to an employer. It is to be expected
that many of these veterans will become unemployable as their
disabilities worsen with age. Age itself is not a factor in the
determination, however.\36\
The average impairment standard treats all veterans equally, and
although IU is based on the effect of disability on the individual, it
too does not discriminate on basis of age. If the total rating is based
on IU, ``it must be determined that the service-connected disabilities
are sufficient to produce unemployability without regard to advancing
age.'' \37\ The adjudicator is required to determine, without regard to
age, whether it is service-connected disability that renders the
veteran unemployable.\38\ Age must be ignored because compensation is
paid for the effects of service-connected disability, not the effects
of age.
Unlike VA pension benefits and Social Security disability insurance
benefits where age is appropriately considered in determining
entitlement, consideration of age as a factor of entitlement in a
veteran's compensation claim would be inappropriate. The purpose of
veterans' pensions is ``relieving distress from disability or
destitution among the aging veteran population.'' \39\ Pension is by
definition a benefit paid to a veteran ``because of service, age, or
non-service-connected disability.'' \40\
Insurance against disability from any cause is to be distinguished
from compensation for disability from military service. Age is a factor
in determining entitlement to disability insurance benefits under
Social Security laws on the principle that, where a person is unable to
perform his or her customary work, the effects of advancing age reduces
a person's ability to adjust to other work for which the person has the
necessary skills, education, and physical or mental abilities. The rule
states: ``we will consider your chronological age in combination with
your residual functional capacity, education, and work experience. We
will not consider your ability to adjust to other work on the basis of
your age alone. In determining the extent to which age affects a
person's ability to adjust to other work, we consider advancing age to
be an increasingly limiting factor in the person's ability to make such
an adjustment. . . .'' \41\
Because the purpose of compensation is to make up for the effects
of service-connected disability, it should not be tied to factors
extraneous to the character of the disability. It would be
inappropriate to pay different levels of compensation based on age. It
would be inappropriate to deny IU to a younger veteran on the basis of
age and award it to an older veteran with the same level of disability,
or vice versa.
Total compensation for IU is not a retirement benefit, however.
Just as it should not be denied because of age, it should not be
awarded because of age. Properly applied, the rules require a factual
showing that the disability is such as to be incompatible with
substantially gainful employment, irrespective of age. Today, many
people work well beyond what was once considered normal retirement age.
Typically, VA awards the benefit when disability forces the veteran to
terminate employment.\42\ To award IU to a veteran age 64 and deny it
to a veteran age 66, for example, would be unfair discrimination,
disparate treatment of veterans similarly situated, and wholly
unjustified from an equitable standpoint. Nonetheless, if Congress or
VA chose to make a fundamental change in this compensation principle to
allow for the consideration of age in IU claims, as with Social
Security disability benefits, such change should make it easier for
most veterans to qualify for IU because veterans of service in Vietnam
and all earlier periods would be of advanced age. The Social Security
Administration's rule provides with respect to a ``person of advanced
age,'' ``We consider that at advanced age (age 55 or older), age
significantly affects a person's ability to adjust to other work. We
have special rules for persons of advanced age and for persons in this
category who are closely approaching retirement age (age 60-64).'' \43\
Under current rules, which do not complicate the decision by
applying different rules to different age groups, if a veteran's
functional limitations become such that they are incompatible with
continuing performance of the veteran's job activities, a factual
finding to that effect can be made with an adequately developed record.
For decisions on IU, VA should look at the medical evidence, employment
evidence, and any available relevant records from the Social Security
Administration and VA's Vocational Rehabilitation and Employment
Service. Experience has shown that, in many instances, there can be a
valid purely medical conclusion that a veteran's disabilities are so
severe in their effect upon ``ordinary activity'' as to obviously be
incompatible with all work activities as generally understood and
within common knowledge.\44\
Though they are imperfect and have been criticized by the Court of
Appeals for Veterans Claims and though VA is in the process of revising
its rules on IU, we believe the current rules, for the most part,
prescribe consideration of the appropriate factors. These decisions do
require careful examination of the facts and the exercise of well-
informed and well-reasoned judgments. We suspect that most veterans
prefer to work if they are able, and experience has shown that VA
adjudicators are not particularly liberal in awarding total ratings on
the basis of IU. This is reflected in the many discussions of arbitrary
VA denials by the courts.
For these several reasons, the increase in numbers of IU veterans
does not signal a failure or fault in the compensation program.
While compensation is an age-neutral benefit, common sense suggests
that age should be a factor in determining whether vocational
rehabilitation is feasible, for reason that the effects of age diminish
human faculties. In addition to making successful rehabilitation for a
new vocation more improbable for elderly veterans, the infirmities of
age, along with the effects of disabilities 60 percent or greater in
degree, may very well cause the veteran to be a hazard to himself or
herself and others in some training environments. In addition, unlike
the evaluation of disability for compensation purposes where the
effects of nonservice-connected disabilities must be disregarded,
assessment of a veteran's potential for rehabilitation must take into
account the effects of all impairments.
To expect an elderly disabled veteran to embark upon a new career
in his or her final years of life is unrealistic. The demands of
training may only make the disability worse. To refuse IU to a veteran
who uses the good judgment not to undertake such an unwise course would
contradict the purpose of veterans benefits. We therefore believe that
mandating or pressuring veterans of advanced age to attempt vocational
rehabilitation would be ill-advised and would quite probably result in
a waste of resources. The option should be left open, to a reasonable
age, for those whose individual circumstances make vocational training
and regained employability feasible, however.
Rehabilitation potential for younger veterans is a different
matter. We suspect that most younger veterans resent the loss of
independence and being forced into the role of being disabled. Current
law encourages IU veterans to pursue vocational rehabilitation. The law
requires VA to notify a veteran awarded total disability for IU of the
availability of vocational rehabilitation; the law requires VA to offer
the veteran counseling services and the opportunity for evaluation as
to whether the achievement of a vocational goal is feasible.\45\
Although a veteran might have the potential to perform substantially
gainful employment in the future upon successful completion of
vocational rehabilitation training, current law recognizes that the
veteran and his or her family cannot survive on the level of
compensation paid for the existing percentage rating assigned for
partial disability while the veteran is training to become employable.
Therefore, entry into a program of vocational rehabilitation, by
itself, does not cause a termination of TDIU benefits.\46\ A veteran
who undertakes a program of vocational rehabilitation is not considered
``rehabilitated to the point of employability'' unless he or she has
been ``rendered employable in an occupation for which a vocational
rehabilitation program has been provided under [chapter 31, of title
38, United States Code].'' \47\
In conjunction with its enactment of provisions requiring VA to
notify an IU veteran of the availability of vocational rehabilitation,
Congress included provisions for a period of ``trial work,'' in which a
TDIU rating would not be reduced where a veteran secures and follows a
substantially gainful occupation unless the veteran maintains such an
occupation for a period of 12 consecutive months.\48\ Congress
indicated that it considered ``it desirable to provide every reasonable
opportunity and encouragement for disabled veterans--including those
with very serious handicaps and those determined to be unemployable--to
return to work.'' \49\
Under VA's Departmental Strategic Goal 1, the first ``objective''
of VA's Vocational Rehabilitation and Employment program is to
``[p]rovide all service-disabled veterans with the opportunity to
become employable and obtain and maintain suitable employment, while
providing special support to veterans with serious employment
handicaps.'' \50\ VA's objective to provide ``all'' service-connected
disabled veterans with the opportunity to become employable is
laudable, but it must be viewed in light of the realities of the
challenges associated with retraining veterans of advanced age to a
status of ``rehabilitated to the point of employability.'' According to
VA, achieving that status is challenging even for veterans younger than
those with advanced age: ``Achieving suitable employment at age 40 and
above is, in itself, a considerable challenge for anyone. Moreover,
veterans with disabilities must typically compete for employment
against young college graduates, age 22 to 25, who often have not
served in the military, who have no dependents, and who have no
disabilities.'' \51\ ``The average age of a program participant is 41
years for male veterans and 37 years for female veterans, while the
average age of disabled male and female veterans who complete a VA
vocational rehabilitation program by achieving suitable employment is
45 and 39 years respectively.'' \52\
VA should be able to provide the Committee more information about
the numbers of older veterans who complete a course of vocational
rehabilitation and achieve suitable employment. We suspect it is
relatively few.
It is unfortunate that the number of unemployable veterans is
rising, and perhaps more could be done to keep a portion of these
veterans working as they would probably prefer, but the rising number
itself does not appear to be a symptom or sign of failure. Rather, it
is a reflection of the makeup of the veteran population, the nature and
effect of the more prevalent service-connected disabilities, and,
perhaps, the improved responsiveness of the claims adjudication system.
We appreciate the Committee's interest in ensuring the
effectiveness of programs for disabled veterans, and we appreciate the
opportunity to present DAV's views.
______
Response to Written Questions Submitted by Hon. Larry E. Craig
to Rick Surratt
Question 1a. You noted in your testimony that the individual
unemployability (IU) benefit is not a retirement benefit. Yet,
statistically, more than 30 percent of IU recipients are well-past any
normally accepted retirement age.
Is IU really an ``unemployability'' benefit when it does not take
into account whether the recipient would seek work in the absence of
the underlying service-connected disability?
Answer. We acknowledge the difference between a person who is not
working because he or she cannot work and a person who is not working
because he or she chooses not to work. However, if a veteran is in fact
shown to be unable to work because of service-connected disabilities,
he or she is undeniably unemployable regardless of whether he or she
would choose to work absent the disabilities. It is irrelevant whether
the veteran would work if able. Whether the veteran would work if able
is a moot point because the fact remains that the veteran is unable.
Like all questions of legal entitlement to a benefit, the decision on
individual unemployability rests on affirmative evidence of existing
and known facts rather than speculation about what would occur in the
absence of those facts or in some other alternative hypothetical
scenario. It would depart from principles of valid reasoning if we were
to have a sequential adjudication in which, upon finding a veteran
unemployable, the adjudicator then would have to also attempt to look
into the veteran's mind to determine if the veteran would work were he
or she not disabled. Such a process would not meet any test of
reasonableness. Yes, IU is really an unemployability benefit.
Question 1b. If this benefit is instead serving as a pension for
those beyond working age, would it be preferable to call it service
pension and set criteria that make sense for that type of benefit?
Answer. Under section 101(13) of title 38, United States Code,
disability ``compensation'' means a monthly payment made to a veteran
``because of service-connected disability.'' Individual unemployability
is the basis of a benefit paid to a veteran because of service-
connected disability. Age and other ``criteria'' are irrelevant as a
matter of law. Under section 101(15), ``pension,'' as it pertains to
veterans, means a monthly or other periodic payment made to a veteran
because of service, age, or nonservice-connected disability. Individual
unemployability is not paid as a ``service pension'' or based solely on
attainment of a specified age or because of non-service-connected
disability. Individual unemployability compensates a veteran for
service-connected disability total in degree. It would be the ultimate
insult to the men and women who have sustained such serious
disabilities in service to their country to designate their
compensation as a ``pension.'' Because the compensation laws enacted by
Congress rightfully exclude age and other irrelevant factors from
entitlement criteria, the fact that more than 30 percent of IU
recipients are well past any normally accepted retirement age has no
bearing on, or reflection on the propriety of the benefit. Many
veterans with amputations, blindness, paralysis, and mental disorders
rated 100 percent under the rating schedule are beyond normal
retirement age also, but it would be unconscionable to terminate or
reduce their compensation, or convert it to pension. Just as many of
these veterans with 100 percent scheduler ratings became totally
disabled before they reached ``any normally accepted retirement age,''
many of the veterans receiving an individual unemployability rating
quite probably became unemployable before normal retirement age,
whatever normal retirement age is. We do not suggest that a veteran
should automatically be awarded individual unemployability upon
``normal'' retirement, but a veteran of any age should be awarded
individual unemployability if forced to terminate substantially gainful
employment because of service-connected disability. As a society, we
should have no rule that discourages working upon attainment of a
specified age. There should be no disincentive against working to
whatever age an individual chooses and is able.
Question 2. As you pointed out, the IU benefit is designed to take
into account an individual's particular circumstances, as opposed to
VA's rating schedule which is based on ``average'' impairment. But, at
present, IU ratings are assigned without consideration of some
individual circumstances, such as age, retirement status, and non-wage
income. If the TV benefit is meant to account for the specific
circumstances of an individual veteran, shouldn't it take into account
all of the individual's circumstances?
Answer. Compensation should pay a veteran for service-connected
disability. It should neither be paid nor denied because of age. The
benefit should compensate solely for the effects of service-connected
disability, and veterans should not be treated differently because of
differences in their socioeconomic status. To means test compensation
would reduce it to a welfare benefit, again the ultimate insult to
those veterans who suffer from some of the most debilitating service-
connected disabilities. A member of today's military should not fear
that our government will conveniently renege on its obligation to
compensate him or her for service-connected disabilities if, as a
veteran, he or she inherits money or independently has holdings or
assets gained through family or individual enterprise. To reduce a
veterans disability compensation because of assets or non-wage income
from other sources would, in effect, have the veteran individually bear
the costs of war after he or she has already paid a very high price by
virtue of service to the Nation. Penalizing a veteran because of income
or assets that result from good fortune unrelated to the Government
would be wholly unfair. It would be unfair that a veteran would lose
his or her compensation, independence, and perhaps dignity, because he
or she has a successful spouse whose earnings would require forfeiture
of the compensation. Means testing would destroy the compensatory
nature and purpose of compensation by transforming it into a mere
gratuity based on need. Means testing compensation would simply offend
fundamental principles of fairness.
Question 3. You note in your testimony that, ``VA adjudicators are
not particularly liberal in awarding total ratings on the basis of IU.
Yet, the number of IU recipients compared to the number of veterans
rated 60 to 90 percent suggests that nearly 1 out of every 2 veterans
rated 60 to 90 percent receives IU. Can you explain how your assessment
of VA's adjudication standards squares with those statistics?
Answer. We understand that 3,339 appeals to the Board of Veterans'
Appeals during fiscal years 2004-05 involved the issue of individual
unemployability. Of that total, the Board allowed 270 appeals and
remanded for additional action another 2,379. Inasmuch as the Board
allowed or remanded 79 percent of the appeals seeking individual
unemployability, we believe that reflects somewhat on the propriety of
regional office decisionmaking on this issue. If regional offices had
properly denied most of these cases, the percentage of allowed and
remanded cases would not be so high. In our testimony, we simply noted
that our experience has shown VA is not ``particularly liberal'' in
awarding individual unemployability ratings, observing that this is
also reflected in the criticism of VA decisions on this issue by the
Court of Appeals for Veterans Claims. According to our calculations,
the number of veterans with individual unemployability ratings in the
year 2000 was 39 percent of the veterans with ratings from 60-90
percent. In 2001, that percentage was 41 percent, and it grew every
year, to 46 percent in 2004. (Pursuant to section 4.16(b) of title 38,
Code of Federal Regulations, some small number of veterans rated
unemployable might have schedular ratings lower than 60 percent).
Certainly, the numbers, standing alone, show that a substantial portion
of veterans with the more severe disabilities are rated individually
unemployable. The increased percentage of veterans rated unemployable
also suggests that, with age, the disabilities of our largest group of
veterans, i.e., Vietnam veterans, are becoming worse, as we suggested
in our testimony. The median age of Vietnam veterans is 58.3; the
median age of all veterans is 59.3. Though the numbers your question
cites are at least suggestive, they alone provide no factual basis from
which to draw inferences as to whether VA adjudicators are or are not
liberal in granting individual unemployability ratings. To answer that
question, we would have to know what portion are in fact unemployable,
or least have a reason for assuming what portion would be expected to
be unemployable. As we noted in our testimony, an increased prevalence
of mental disorders, primarily posttraumatic stress disorder, among
veterans, principally among the largest group, Vietnam veterans, is
known to account for much of the increase in veterans rated
unemployable. Consider again the requirements for a 70 percent rating
for a mental disorder:
Occupational and social impairment, with deficiencies in most
areas, such as work, school, family relations, judgment, thinking, or
mood, due to such symptoms as: suicidal ideation; obsessional rituals
which interfere with routine activities; speech intermittently
illogical, obscure, or irrelevant; new continuous panic or depression
affecting the ability to function independently, appropriately and
effectively; impaired impulse control (such as unprovoked irritability
with periods of violence); spatial disorientation; neglect of personal
appearance and hygiene; difficulty in adapting to stressful
circumstances (including work or a work like setting); inability to
establish and maintain effective relationships.
Because symptoms of this magnitude are likely to make virtually any
veteran unemployable, 100 percent of the veterans with mental disorders
rated 70 percent arguably should be in receipt of individual
unemployability benefits. According to VA data, 35 percent of the
veterans rated individually unemployable have mental disorders, of
which 25 percent have PTSD. Thus, while the raw numbers of veterans
rated individually unemployable as a percentage of all veterans with
ratings from 60 to 90 percent do not provide any basis from which to
draw conclusions about the liberality with which adjudicators grant
total ratings based on individual unemployability, numbers such as
those pertaining to veterans with PTSD do provide a basis from which to
infer that large percentages of veterans with certain disabilities
should rightfully be rated unemployable. VA certainly attributes much
of the increase in individual unemployability ratings to PTSD. It also
may well be that adjudicators find it more difficult to justify denials
of individual unemployability for mental disorders--given the extent of
disability required to meet the 70 percent rating criteria--than they
do in the cases of veterans with disabilities other than mental
disorders. It is just as likely that the percentage of 60 to 90 percent
veterans currently in receipt of individual unemployability ratings
suggests that adjudicators allow too few of these claims as it is that
they suggest liberality in granting the benefit.
Question 4. It is my understanding that your organization was
founded partially in response to prejudices against disabled World War
I veterans that prevented them from reintegrating into the civilian
workforce. In light of that history, I would be interested to know
whether you agree with my assessment that employment is a positive
outcome and that ``totally disabled'' or ``unemployable'' should be
findings of last resort?
Answer. The DAV was founded in reaction to high unemployment and
woefully inadequate programs for disabled veterans of the first World
War. In his June 27, 1922, address to the DAV's second National
Convention, DAV National Commander Judge Robert S. Marx reflected on
the situation:
Frequently during the past year we have had to fight for our
comrades, but personally I do not mind a fight and there is no
cause in the world for which I would rather fight than that of
the Disabled Veterans of the World War. We have had to fight
for more hospitals and better hospitals. We have had to fight
for real vocational training. We have had to fight for just
compensation. We have had to fight against red tape,
inefficiency and indifference. . . .
It seems that some things never change. Despite his explanation of
the necessity for advocacy on behalf of disabled veterans, Judge Marx
later explained that veterans fought for their country and the American
goal of world peace rather than to become disabled veterans and to
receive veterans' benefits:
[W]e did not fight this war in order to secure benefits for
our comrades. We did not fight the war in order to obtain money
from Congress nor to provide work for the builders of hospitals
or the surgeons of the Nation. These things are the sad
incidents that follow as the necessary aftermath of every war.
. . . We have said that the war is not over for the men who
gave their limbs and lungs, their eyes and their health to make
a realization of these ideals possible.
Today, DAV's ``Statement of Policy'' begins with the following:
``The Disabled American Veterans was founded on the principle that this
Nation's first duty to veterans is the rehabilitation and welfare of
its wartime disabled.'' DAV National Service Director Edward R. Reese,
Jr., was a member of the VA Vocational Rehabilitation and Employment
Task Force that recently conducted a ``top-to-bottom'' review and
evaluation of the program and made comprehensive recommendations for
improvement. The DAV's first priority is the well being of disabled
veterans. The DAV believes in responsible, honest advocacy for them. We
support effective vocational rehabilitation programs. Of course we
agree that employment is a positive outcome. The DAV is a strong
supporter of employment programs for veterans. However, some veterans
are simply unable to work, and a veteran does not become totally
disabled or unemployable at a time of his or an adjudicator's choosing.
It is not a matter that is subject to willful control or timing. It is
therefore not a matter of a ``finding of last resort.'' In our
experience, persons who possess the personal drive to serve in the
Armed Forces and willingness to put aside their personal interests and
make extraordinary sacrifices for their country also possess a strong
work ethic. Most want to work if they are truly able. Moreover, most
would probably not find the relatively modest disability compensation
paid to totally disabled veterans an enticement to feign total
disability. Consequently, we think our Nation's disabled veterans will
find the suggestion that they are not working out of laziness or for
some other reason of personal choice offensive and insulting.
Response to Written Questions Submitted by Hon. Daniel K. Akaka
to Rick Surratt
Question 1. Mr. Surratt, as someone working for a veterans service
organization, you are in constant contact with veterans throughout this
country. What message do you think veterans with PTSD may be getting as
a result of the PTSD Review coupled with this inquiry into the state of
VA's Individual Unemployability determinations?
Answer. The Department of Veterans Affairs (VA) routinely conducts
quality reviews of its rating decisions. The DAV believes these quality
reviews should be more comprehensive. Though a reviewer might
occasionally find a questionable allowance, we suspect erroneous
denials are more of a problem. Also, VA conducts routine future reviews
of disability ratings in those cases where improvement in the
disability is likely. Of course, such reviews are entirely proper, and
they are usually expected by veterans whose disabilities have not
stabilized. Veterans understand the purposes and necessity for such
routine reviews of decisions for quality assurance and reevaluation.
Unlike the PTSD review, these routine reviews do not single out
specific groups of veterans because of the nature of their disabilities
or type of rating. Moreover, VA does not widely publicize these routine
reviews in an attempt to appease critics or influence the court of
public opinion, as it has with the PTSD review. In our view, VA
needlessly caused additional anxiety among a group of veterans whose
disabilities already make them anxious, insecure, and highly vulnerable
to heightened worry about perceived personal threats to the disability
benefits they and their families rely on for the necessities of life.
Mistrust of Government among this group of veterans can only be made
worse by such missteps. Because VA has authority to sever service
connection only in the case where the grant was completely devoid of a
factual basis, absolutely contrary to law, or obtained through fraud,
VA would have had reason to contact very few of these veterans and
alert them to the review in connection with an effort to substantiate
the claim. Most of these veterans could have been spared the increased
distress caused by the highly publicized plan of review. Veterans'
suspicions that this review would be a ``witch hunt'' were fueled by
knowledge that the Office of Inspector General review and the planned
Veterans Benefits Administration review appeared one sided in that only
allowed cases were to be scrutinized. State-to-State variations in
average compensation payments therefore seemed only a pretext for
embarking on a campaign of second-guessing earlier adjudicative
judgments with a view toward reducing the compensation rolls, for, if
VA had truly been interested in variations and their causes, it would
need to review both allowances and denials. Fortunately, VA has wisely
made a decision not to proceed with the PTSD review. Unfortunately,
veterans with individual unemployability ratings, many of whom suffer
from mental disabilities, are now being subjected to the same kind of
worry. We do not in any way question the Committee's oversight
responsibility, but an increase in the number of veterans awarded total
disability ratings on the basis of unemployability does not by itself
necessarily suggest that something is amiss within the system. Had the
hearing not approached the issue from a perspective of that suspicion,
veterans would not have become as concerned that its motives were not
pure. Had we sought to learn more about the dynamics of the increase in
unemployable veterans before suggesting changes, veterans may have been
more trusting. Personally, I do not believe the approach of the profit-
driven commercial insurance industry would be an appropriate model for
veterans' programs, but the seemingly serious reception that idea
received is understandably a matter of concern for disabled veterans.
Suggestions of means testing compensation or discriminating in
individual unemployability ratings on the basis of age no doubt causes
disabled veterans to see these actions as threats to their benefits.
Had the hearing merely been an inquiry into the causes for the increase
in individual unemployability ratings, rather than making a statement
of doubt about the propriety of the benefit, it would not have sent the
negative signal it did. Now that this issue has already been given such
a high profile, we feel compelled to assure our members that we are
following developments and are prepared to deal with the matter
appropriately, where we would have no need to accentuate awareness
otherwise. As an example of how worries about these reviews burden
disabled veterans and their families, I quote this statement from a
message of concern we recently received:
So, here is my question, like a nightmare my husband is 100
percent service connected. If he loses his benefits, I don't
know what will become of us. We will lose everything. We are
both ill, of course, we live out away from people, he is your
prime example of PTSD, and to know that he's honorably served
his country, he has air medals, purple heart, army commendation
medal, I really don't know what they all are, he won't talk
about it. He says it just brings back a time he prefers to
forget, as he relives some part of it everyday.
Can they really just take your only source of income away
from you? We are worried, my husband is well, let's just say,
he's awfully upset. Can you elaborate on just how this will
effect people like us all veterans. They deserve better than
this. My husband is in his late 50's, I'm lucky to still have
him. I'm just sick about all this news.
Question 2. Mr. Surratt, is the ability to plan for retirement
different for the average worker than for a severely injured veteran
receiving VA compensation?
Answer. Working persons often have retirement plans. Workers who
become disabled and receive social security disability insurance
benefits do not actually lose their benefits at normal retirement age.
The benefit merely changes from the disability insurance benefit to the
retirement benefit. It would be expected that a disabled veteran would
not have the same ability to have a retirement plan or to build an
estate as a non-disabled person. In theory, partially disabled veterans
would not have a capacity equal to a non-disabled person to build an
estate and save for retirement. Obviously, some veterans would be
totally disabled upon military discharge, while others may not become
totally disabled until later years. The compensation program does not
distinguish between all of these variables and nuances. Compensation
has always been a lifelong benefit because paralysis, blindness,
amputations, permanent injuries, and chronic diseases cause lifelong
disabilities. Until recently, we had never seen anyone seriously
question the principle that disability compensation is a lifelong moral
obligation of the Government. Congress enacted what is now Sec. 1318 of
title 38, United States Code, to authorize dependency and indemnity
compensation for survivors of veterans who died after a long period of
total disability in recognition that disabled veterans do not generally
have the same ability to build an estate as non-disabled persons. After
discussing the effect of a veteran's death upon dependent survivors
where the veteran was totally disabled, Congress observed:
In many, if not most of these situations, the surviving
spouse is middle-aged or older. At such an age, it is very
difficult for the surviving spouse (almost all of them widows)
to become self-sufficient, and the veteran's estate is likely
to be inadequate for her support.
S. Rep. No. 95-1054, at 28 (1978).
Referring to a bill similar to the one reported, this Committee
stated:
Such proposed legislation is based, as is this provision in
the Committee bill, on the premise that the presence of a 100-
percent service-connected disability may reduce normal life
expectancy and, even more importantly, so overwhelm a family as
to prevent the normal accumulation of an estate sufficient to
provide for the survivors.
Id. at 31.
If the cessation of income from compensation due to the veteran's
death would create a hardship for a survivor, the termination of
compensation during a veteran's lifetime would quite probably have a
much more devastating effect upon the veteran and his or her family, as
is explained in the correspondence we quote above.
Chairman Craig. Thank you very much. We are in the tail end
of a vote. We had better get there or they may close us out.
Our leader is trying to create a new discipline in the Senate,
timely voting.
We are going to stand in recess for a few moments. I
certainly will return, and I believe others will, to question
you in some of your comments. Again, thank you for being here.
The Committee will stand in recess.
[Recess.]
Chairman Craig. The Committee will be back in order. Again,
thank you all very much for your patience. I have a set of
questions here, and I think Senator Akaka will attempt to
return with some questions as we probe both of your testimonies
just a little bit. And, again, thank you for being here.
Cynthia, your testimony makes it clear that the private
insurer GAO analyzed makes the up-front investment necessary to
help individuals with disabilities return to work; whereas,
VA's approach may be best described--well, I guess the term
that I am using here is pound-wise and penny-foolish.
Is that a fair characterization of VA's efforts? Am I being
overly harsh?
Ms. Bascetta. I wish I had harder data to answer the
question more concretely, but my guess is that it is not overly
harsh. I say that because we do not know what VA's actual costs
are to adjudicate the claims, and we do not know what those
costs are in relation to the benefits paid out. But what we do
know is that in the private sector, insurers looking at what
could be potentially a very large stream of future benefits
have made the decision that it is costeffective to make a
significant up-front investment, both in assuring that their
determinations of who they are going to get back to work are
well supported and that they invest in that person to assure
that there is a successful work outcome.
I guess another way of looking at it is that we do not
think enough attention is being paid to the opportunity costs
of not making that up-front investment.
Chairman Craig. Should the VA be well positioned to exceed
the help private insurers provide because of its vast health
and vocational rehabilitation resources?
Ms. Bascetta. Yes, and, in fact, in many ways VA is very
well positioned. I used to do Social Security work and was
frustrated by the fact that the Social Security Administration
cannot pull together the VR services because they are in the
Department of Education or the Health Care Services because
they are in CMS or the private sector. But VA has under its own
roof not only the rating specialists, but physicians, other
medical specialists, and vocational specialists who can all
pull together to both assess a person and manage their return-
to-work process.
They do not have the case manager piece, although under the
seamless transition effort, as you know, they have a model
where they would have a case manager who would be in charge of
tracking that complex set of benefits that a servicemember
would need to transition back to civilian life. So they have a
concept that they could bring over to the IU side of the house
or to the return-to-work processes.
Chairman Craig. Some may argue that a comparison between
private disability insurance beneficiaries and VA IU
beneficiaries is not valid because veterans' disabilities are
of a fundamentally different nature. How would you respond to
such an argument?
Ms. Bascetta. Well, first of all, I would make the point
that VA's goal is to restore the capability of veterans with
disabilities to the greatest extent possible, and that is
entirely consistent at the level of a goal with what we have
seen in the private insurers that we have looked at. What is
starkly different is the contrast between the goals that they
have and the practices that they apply to achieve those goals.
Having said that, though, we know that--and as I said in my
written statement and in my oral remarks, there are important
differences between Government programs and the private sector,
and none of these changes, should we decide that they are
appropriate, would happen overnight. They would at a minimum
require regulatory change, but they could require legislative
change as well.
Chairman Craig. If the model of the private insurer
industry were adopted by VA, would it work on veterans with
disabilities of the type and severity seen in the IU
beneficiary population?
Ms. Bascetta. That is a good question. One of the
frustrations that we have is that we do not believe that VA's
data is always good enough to know exactly the conditions of
those who are on the rolls, both in terms of the severity of
the condition or their demographics. And in this case, clearly
the comparison that we would make is that the private sector
does, in fact, deal with claimants who are very seriously
disabled. For example, claimants who have sustained traumatic
injuries in car accidents or other kinds of accidents or who
have chronic disabling diseases would be very similar to the
veteran population, and they do not in any way shy away from
the severely disabled.
In addition, with regard to IU in particular, we know that
those claimants are coming in with a 60-percent rating, not a
100-percent rating. So this is where it becomes difficult,
because of data limitations and because of the difficulty with
the rating schedule to make accurate comparisons in severity of
disability.
But if the thrust of your question is, are the private
insurers that we looked at dealing with people who are very
severely disabled, the answer is yes.
Chairman Craig. Your testimony states that private insurers
are in close contact with a claimant's treating physician to
ensure that the claimant has an appropriate treatment plan
focused, in many cases, on timely recovery and return to work.
Could you contrast this approach with the level of involvement
the Veterans Health Administration has with individuals whom
the Veterans Benefit Administration has deemed unemployable?
Ms. Bascetta. We have not completed our work on this, but
what we know, so far, is that the VHA physicians typically are
compensation and pension examiners, special physicians in VHA
who do the disability assessment, but not necessarily the
treating physician. But I cannot say that in all cases there is
not a link between VBA and the VHA treating physician if, in
fact, the claimant's treating physician is in the department.
What is important to remember is that in the private
sector, the reason that this link is so essential is to assure
that the medical treatment that is integral to the return-to-
work success actually happens, and those claims managers
monitor that, in fact, the person is getting the appropriate
treatment that is designated in their plan.
Chairman Craig. With the inclusiveness of the capability of
the VA, as you expressed in another response to a question, is
it fair in this instance to say that the right hand knows what
the left hand is doing in the context of VA and physician
tracking?
Ms. Bascetta. We have not evaluated that yet. It would not
be fair for me to make that comment at this time, although I
think there probably is not enough integration between VBA and
VHA on this issue.
Again, with regard to the seamless transition, they are
working together there, so they have figured out in that
situation that there is a model they can be using to pull
together the resources of both sides of the house.
Chairman Craig. OK. Your testimony points out that private
insurers use highly qualified staff to perform benefit
assessment. Can you contrast for us the qualifications of VA
staff who make IU determinations with those of the private
insurer?
Ms. Bascetta. Yes. The VA staff, of course, have physicians
who do not make the employability decision, but who are highly
qualified to provide the input that is important to make that
decision. And they have VR staff who would be qualified to make
the vocational assessment.
We think part of the problem is the vocational specialists
on the VR staff are not an integral part of the decision, and
it is the claims adjudicator who is making the decision. Those
folks are not well enough trained to make an employability
assessment.
Chairman Craig. Is it a question that the skill sets needed
for an effective return-to-work approach do not exist at VA or
that they are simply misplaced or not effectively used?
Ms. Bascetta. I think they do, in fact, exist at VA. They
need to do a better job bringing to bear the resources and
expertise that they have.
Chairman Craig. OK. Thank you. We appreciate your
testimony.
Rick, let us turn to you. Cynthia has testified that in
GAO's view, VA's IU program lags behind other unemployment and
disability programs. You, on the other hand, testified that the
VA system does not appear to be failing. Would you help us with
that conclusion based on these other observations?
Mr. Surratt. Well, I think I said that we cannot determine
from what we have that there is a failure responsible for the
increase in IU awards. The increase itself is not necessarily
suggestive of some failure.
The second part of your question, I believe, is her remarks
regarding private insurers versus VA?
Chairman Craig. Yes.
Mr. Surratt. Well, VA is, I guess, probably the largest
disability determination agency in the world, maybe, certainly
in the U.S., probably larger than these private insurers. And I
do not know much about private insurers' practices. And I agree
with Cindy to the extent that perhaps the vocational
rehabilitation people could play a greater role in the
adjudication process, but beyond that, I think many of these
veterans--and you have heard the criteria on mental disorders--
if you have a 70-percent rating, I think most people would
agree it is highly unlikely you are going to be able to
function in a work setting, not even in a vocational
rehabilitation setting.
So these people that assess these disabilities on a daily
basis look at them from how they function in daily life, and
they can determine that their remaining functional capacities
are so narrow that they are simply incompatible with the
regular demands of work, meeting work schedules, being there
for 8 hours, interpersonal interaction with co-workers and
supervisors and customers and so forth. And so I think they
have a general understanding and a general knowledge of those
things and probably do a pretty good job of making the
decisions on those bases.
Chairman Craig. OK. An IU recipient currently receives
about $26,000 per year in disability compensation, which is
obviously far less than the median household income in this
country. Do you believe the current system may actually be
suppressing disabled veterans by encouraging dependency on a
minimum benefit rather than empowering veterans to move out
into the workplace where they might prosper at a higher level?
Mr. Surratt. I would just have to answer that based on my
experience. I have represented veterans some 18 years in
claims, and I think that most veterans would prefer to be
working if they were truly able. You are going to find
exceptions. I think most veterans would not want that $26,000
if they were truly able to work and would be pursuing gainful
employment.
Chairman Craig. OK. Let me turn to Senator Akaka.
Danny.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Surratt, in your testimony, you note that progressive
or degenerative conditions worsen with age and that an aging
veteran, one from Vietnam in particular, could account for
increased numbers of veterans who are unemployable.
My question to you is: Can you tell me whether or not you
think that age should be made a factor when making IU
determinations?
Mr. Surratt. If, Senator, you are saying should there be a
point at which we would no longer grant unemployability, I can
answer that question, I think. Yes, sir.
Senator Akaka. Yes, whether age should be made a factor in
determining IU?
Mr. Surratt. I think that would be unfair and unwise. Let
me give you an example. Let's say we have a veteran with a very
severe disability, who struggles and despite his severe
disabilities works beyond the normal retirement age, works to--
let's say that we set a rule that beyond age 65 you could not
claim unemployability, and let's say this veteran worked to age
68 and he was an unusual veteran and he worked despite severe
disabilities. And he comes into the VA and they say, sorry, Mr.
Veteran, due to your unusual determination and your
perseverance and the fact that you worked despite all these
obviously serious conditions you have, we are going to penalize
you, and we are not going to grant unemployability. Now, had
you come in at age 64, given the severity of your disabilities
we would have probably granted IU. That is unfair.
Now let me get to the unwise aspect of that. Same scenario.
You have a rule that says that we do not grant unemployability
beyond age 65. I am this veteran and I am in the same
condition. I am struggling, but I want to hang on. I take pride
in work, and I want to work as many years as I can. And maybe I
could work 2 or 3 more years, despite the advancement of my
disability. But I realize that if I work beyond age 65, I
cannot claim IU. So I may very well decide to just give it up
now.
So you are thereby creating an incentive for veterans to
stop working earlier and costing the Government more money than
you would otherwise if they worked to later years.
So, no, I do not think an age limitation is fair or wise
for those reasons.
Senator Akaka. Mr. Chairman, I have just one more question,
and I want to direct it to Ms. Bascetta of GAO. Do you believe
that vocational rehabilitation and compensation and pension can
absorb taking on a greater role for determining IU without
sacrificing the level of service they currently give to their
clients? For example, has GAO determined the costs of
vocational rehabilitation and employment taking on a greater
role in determinations of individual unemployability?
Ms. Bascetta. No, we have not done that, and we have not
done it with respect to this program and we have not done it
with respect to our broader concerns about all Federal
disability programs and whether or not they need to be
fundamentally reformed. It is a very important question. I
think there are legitimate concerns that, in fact, the costs of
providing return-to-work assistance could exceed the benefits
that are paid out now. In other words, simply providing cash
benefits may be the least expensive option. But if that is
true, it probably is not the one that best serves the veterans
or anybody with a disability.
Senator Akaka. Mr. Surratt, as someone working for a
veterans service organization, you are in constant contact with
veterans throughout this country. Are you concerned with the
message that veterans with PTSD may be getting as a result of
the PTSD review, coupled with this inquiry into the state of
VA's individual unemployability determinations?
Mr. Surratt. I think truly that these reviews are being
well publicized and they are causing a great deal of anxiety in
the veteran public. I understand the Chairman's position that
we do have to monitor these programs to see that they're
operating properly. I again would caution, as I did in my
statement, that I do not think we should jump to any
conclusions that they are operating improperly just because we
have an increase in people on the disability rolls.
I think VA should be very cautious about the way they
contact particularly mentally disabled veterans. We heard in a
hearing last week in the House that we had a suicide, and we
heard that perhaps some of the VA offices had sent veterans
letters asking for information prematurely and so forth.
So, yes, there has to be a balance. You have to uphold your
responsibility in running Government programs properly, but you
have to be very careful, particularly with PTSD veterans and
veterans on unemployability. I think they are scared and I
think they do perceive that there is an effort to cut back on
the rolls to save money and so forth.
Senator Akaka. Thank you very much, Mr. Chairman.
Chairman Craig. Danny, thank you.
Rick, let me pursue a couple more questions. Maybe if I am
hung up on an issue, maybe it is terminology. The Congressional
Research Service--and it is a fairly well-known fact--will tell
you that with men age 65 and older, only about 19 percent
continue to pursue work in the workplace in today's figures.
And you are right, you have given exceptions or you have spoken
to a type or a personality with a phenomenal work ethic. And
they are out there. There is no question about it. I lost a
father this summer who worked up until 6 months before his
death, and he died at 87. He had a work ethic that got him up
every morning and moved him out, and he would have done so,
almost if he had to crawl to work. That is the character of the
individual.
But having said that, you know, when I hear the term
``unemployability,'' it is like workmen's compensation or it is
to compensate somebody who cannot work versus somebody who now
is in an age who will not--I should not say ``will not'' work--
is not working, retired. And yet that benefit continues in that
terminology. Is it a terminology issue? I am not sure.
I guess my frustration, if there is one--and the reason we
pursue this--is maybe said better in this statement. Your
testimony suggests that in assessing unemployability, VA should
focus on a veteran's disabilities. I think that the
Disabilities Act and all that we have come to be as a country,
and appropriately so, would suggest something else.
For instance, your position that the loss of both legs
might totally disable a common laborer with little education.
To me that seems contrary to the modern model, the view that we
should focus on the abilities rather than the disabilities. You
were probably in the room the day we had the young Black Hawk
operator here with both legs off, determined to get back in her
helicopter and fly. And she is getting there.
So with many young servicemen returning from Iraq and
Afghanistan with traumatic injuries, I believe it is critical
that we provide them with the tools they need to live
independently and to prosper if they can.
Question: Especially for those young veterans, do you agree
that VA should assess a veteran's remaining capabilities and
the possibility of achieving a vocational goal before deeming a
veteran unemployable?
Mr. Surratt. No. I think that if a veteran is unemployable
currently, they should be so rated because they cannot live off
of--let's say they are 60 percent and they are unemployable and
they have a family. And you are going to require them to go
through vocational rehabilitation, the evaluation and that
process, and rehabilitate before they start earning wages, I
mean, there is going to be a serious shortfall in their income
in the meantime.
So if they are, in fact, unemployable in their present
circumstances, they should be so rated and certainly VA should
aggressively pursue vocational rehabilitation. And as you have
heard, they can go through the vocational rehabilitation
without losing their IU rating. They could have a period of
trial work up to a year without losing that IU rating.
Senator, if I may, earlier in that question, you asked what
I perceived to be a separate question, and that is----
Chairman Craig. Process, yes.
Mr. Surratt. Why do we pay unemployability to people who
are of retirement age? Well, first of all, many times the
unemployability is granted while they are still at working age,
and we see by the chart that that is true. And these people do
not earn money like other people throughout their life and put
away retirement nest eggs. Compensation is a lifelong benefit,
going back to the amputee with both legs. We don't cutoff his
compensation at 65. He has that for the rest of his life.
Well, unemployability is the same thing. And you are
correct. If a veteran is beyond normal working age, whatever
that might be given this day and time and given your father's
experience and so forth, then certainly VA should look harder
at the case and make sure that the veteran just has not decided
to stop working and coincidentally claims IU. I mean, there
should be a factual basis for determining that his disability
is of such a severity--again, you have to focus on disability
here--to be incompatible with what we know is required in work
out there in the competitive world.
Chairman Craig. OK. Though you and I are probably going to
disagree a little bit on that, I absolutely agree with you as
to the transitional time involved here and the compensation
necessary during those periods of time. But in a situation
you--do you believe that it would be a better outcome if VA
were to provide those veterans with the educational training
necessary to perform the work rather than to simply label them
as veterans unemployable? I see a transition time here--and I
think you speak to it well--when those determinations are being
made, whereas in the private sector there is an insistence, if
not a requirement, that if you are capable, you go out and seek
the education and the training to get back into that workforce.
While we monitor, we provide, we do not require. That is one
question.
I think the other thing I have concern about in light of
resources and resource management, you are right, someone who
has lived at the $26,000 level or below most of their life, was
not able to establish a nest egg, I believe the only
qualification we have is earned income. We have no other
assessment of total capability of retirement or continuing
life, if you will, even though they maybe have a substantially
large inheritance and they may have a substantial income flow.
We do not know that because we do not ask that question because
there is no means test, in my understanding, beyond earned
income.
You know, I am in the business of making sure that we cover
as much as we can cover with the few dollars we have. Should
there be a broader test than earned income at a certain point
in time, 65 years of age and older?
Mr. Surratt. Well, if you do that, you are changing the
fundamental nature of compensation, which compensates for the
disability irrespective of your fortune or misfortune
otherwise. And if I happen to inherit, have a large
inheritance, that should not----
Chairman Craig. You said disability, but the term we are
using is ``unemployability.''
Mr. Surratt. Well, maybe we could find a better term. I do
not know what it would be because that is the essential fact to
that rating, that your disabilities are such that they keep you
from working. And I would have no objection to changing the
term, but I think the term represents the concept.
Chairman Craig. OK. Well, to both of you, thank you very
much for your time and your due diligence in this area, and
obviously, Rick, your service to our disabled is beyond
question. And, Cynthia, you know, we all know there are
differences in comparisons, but there is a basis from which we
have to look to make judgments to make sure that we have this
system operating as effectively and as efficiently as it can.
And I tie the two together, effectiveness for our veterans,
efficiency for our veterans, because I think it means the right
things in both instances.
We will continue to monitor and watch this very closely as
we work with the Admiral and his staff and people within the VA
to make sure that we have a program that obviously benefits the
veterans, but I really want this program to assess the
capability while we are assessing the disability.
I see a generation of young people today coming home
substantially impaired, but with high hopes that they are going
to be back out into the private sector, out into their own
lives again, being productive citizens. And I think that
technologies today and a lot of other assets out there can
allow that to happen, and we ought to be optimizing our ability
to serve them to cause those goals to be reached.
To both of you, thank you very much for your time here
today.
Mr. Surratt. Thank you.
Ms. Bascetta. Thank you.
Chairman Craig. The Committee will stand adjourned.
[Whereupon, at 4:04 p.m., the Committee was adjourned.]
A P P E N D I X
----------
[From the Salon, Oct 26, 2005]
The V.A.'s Bad Review
(By Mark Benjamin)
(Early this month, a vet in New Mexico took his life. At his side was
the agency's plan to question benefits for mental trauma.)
On Oct. 7, the remains of eight American Vietnam veterans were laid
to rest in a single casket at Arlington National Cemetery, after lying
in the jungle in Vietnam for over 35 years. Their unit was overrun by
two enemy regiments on May 10, 1968.
John M. Garcia fought in Vietnam with the 4th Infantry Division in
1969 and 1970. He came all the way from New Mexico to Northern Virginia
for the burial because he once knew a Marine whose body was now in that
casket. Bringing those veterans home and giving them the respect they
deserve was the right thing to do. ``It is a beautiful story,'' Garcia
said.
Garcia is the cabinet secretary of the New Mexico Department of
Veterans Services, a state agency that aids veterans and helps them get
Federal benefits from the Department of Veterans Affairs in Washington.
The Federal agency provides veterans medical care after their service
and sends disabled veterans monthly checks if needed, up to $2,000 a
month.
When Garcia got back to his office the following Monday, his phone
rang. Another Vietnam veteran needed to be buried. But this one had
died by his own hand. ``I was stunned,'' Garcia said in a telephone
interview from Santa Fe. ``And I was even more stunned at why.''
On Oct. 8, Greg Morris, 57, was found by his wife, Ginger, in their
home in Chama, N.M., an old mining town of 1,250 in the Rocky
Mountains. Lying at Morris' side were a gun and his Purple Heart medal.
For years, Morris had been receiving monthly V.A. benefits in
compensation for post-traumatic stress disorder. Next to his gun and
Purple Heart was a folder of information on how the V.A. planned to
review veterans who received PTSD checks to make sure those veterans
really deserved the money.
Last spring, the V.A. began to quietly draw up plans to take
another look at nearly 72,000 veterans who from 1999 to 2004 had been
classified as disabled and unemployable because of mental trauma from
war. The V.A. plan, about which Salon was the first to report on Aug.
9, would review previous decisions to grant disability benefits to
veterans incapacitated by PTSD.
Veterans advocacy groups are irate, charging the department with
trying to save money at the expense of the men and women traumatized by
war. They say mentally troubled veterans will be shocked, hurt and
afraid of losing their monthly checks.
Many veterans said the review was bound to trigger suicides. ``It
is my educated opinion that [the V.A.] will kill some people with
this,'' Ron Nesler told me on Aug. 24. ``They will either kill
themselves or die from stroke.''
Nesler served in Vietnam in 1970 and 1971 and is coincidentally
from New Mexico. His traumatic memories include a Claymore mine
blasting a busload of civilians near his artillery base. He has been
getting disability checks for PTSD for years.
On Aug. 11, he received a letter from the V.A. saying that his file
was one of those in its review. He said the letter left him shocked,
angry and afraid. The letter warns that ``confirmation'' of his mental
wounds ``had not been established'' and that his file at the V.A.
``does not establish that the event described by you occurred nor does
the evidence in the file establish that you were present when a
stressful event occurred.'' (The V.A. recently determined, again, that
Nesler's claims are legitimate.)
The letters themselves generated considerable controversy. ``It was
like Russian roulette,'' Garcia said. ``You are dealing with lives. You
don't do that. You don't just send out information to people who are
suffering from some sort of mental stress saying, `We are going to take
these benefits away.' ''
Morris was a member of AMVETS, a service organization for veterans,
whose issues were close to his heart. He was also one veteran who sent
a clear message back to the V.A. ``The evidence indicated that he
committed suicide because he was frustrated and afraid that the V.A.
was going to take his benefits away,'' Garcia said. By all accounts, he
was a troubled veteran who had attended counseling. And medical studies
have shown that people with PTSD often suffer intense suicidal or
homicidal rage. ``People will say, `Well, he's got problems,' Garcia
said. ``Well, that was just enough to push him over the edge.''
Morris did not receive a review letter from the V.A., but the
prospect clearly upset him. ``He was greatly shaken by the announcement
of the V.A. review,'' Rep. Tom Udall, D-N.M., said in a statement
calling for a halt to the review. Udall also said Morris ``frequently
inquired whether he would be losing the support he did receive'' before
he committed suicide. ``He believed, as so many veterans do, that he
was being forced to prove himself yet again. It is that belief that
makes veterans so angry and so frustrated with this process.''
Recently, Garcia was contacted by the wife of another Vietnam
veteran who did get a letter from the V.A. ``As a result of this
letter, I have spent the last three nights watching him walk the floor,
scared his benefits are going to be cutoff,'' the wife wrote. ``This
morning, I went to work, and when I called my husband to inform him
that I was safe at work, he told me he was going to `fix everything.' I
left work, and when I returned home, he had called his brother to pick
[up] the two guns he owns.''
Garcia said that when the wife got home, the veteran ``had his
rifles out and they were fully loaded. His family arrived in time to
prevent him from doing it.'' Garcia told me the V.A. review has to be
stopped. ``We lost a veteran because of it,'' he said, adding, ``I
don't know how many more have tried'' suicide.
The V.A. inaugurated the review after the department's inspector
general issued a report last May that showed the agency had been
inconsistent in granting full disability benefits to veterans with
PTSD. The report found that the likelihood of a veteran getting the
maximum payment varied widely in regions across the country, calling
into question the evaluation procedures.
V.A. statistics show that in 2004 an average of 9 percent of vets
in New Mexico, Maine, Arkansas, West Virginia, Oklahoma and Oregon
received a 100 percent disability rating, entitling them to the maximum
payment. In contrast, an average of 3 percent of vets received the
maximum payment rating in Indiana, Michigan, Connecticut, Ohio, New
Jersey and Illinois. The review will ultimately cover 72,000 veterans
but has started with a group of 2,100. There is a lot of money at
stake. PTSD benefits have soared from $1.7 billion in 1999 to $4.3
billion in 2004, as more veterans learn about the condition and the
V.A. benefits for it.
``We have a responsibility to preserve the integrity of the rating
system and to ensure that hard-earned taxpayer dollars are going to
those who deserve and have earned them,'' Daniel L. Cooper, the V.A.'s
undersecretary for benefits, told Salon in a written statement last
summer. (A V.A. spokesman did not return calls seeking comment on
Morris or the current state of the review.)
The original inspector general's report warned that 2.5 percent of
veterans getting 100 percent disability checks for PTSD might be
``potentially fraudulent.'' It noted ``an abundance of Web sites'' that
were ``offering ways to compile less than truthful evidence'' to get
monthly checks. It also said one Web site was selling a fake Purple
Heart for $19.95.
Concern about fraud may be ill-founded. According to an Oct. 19
letter from seven Senate Democrats to their colleagues, arguing in
favor of an amendment to halt the V.A. review, no cases of fraud have
been identified. ``At a time when service members are returning from
war and straining an already burdened system, this review raises
serious questions of costs and efficiencies,'' the letter stated.
Some lawmakers have launched an all-out effort to halt the V.A.
review. In September, the Senate passed an amendment to block it.
Drafted by Sens. Patty Murray, D-Wash.; Barack Obama, D-Ill.; Dick
Durbin, D-Ill.; and Daniel Akaka, D-Hawaii; the amendment was attached
to a Senate bill that funds the V.A.
Conferees from the House and Senate must now decide if the final
bill that lands on the President's desk will contain a prohibition on
the review of 72,000 PTSD claims.
On Oct. 14, a bipartisan group of 54 House members led by Rep.
Peter DeFazio, D-Ore., wrote to key conferees to urge them to adopt the
Senate ban on the review. ``It just sends a terrible message to those
who are serving in the military today for the VA to attack and question
whether those who served before are entitled to receive the benefits
the VA itself previously approved,'' the letter said.
Last week, the House Committee on Veterans' Affairs held a hearing
on the review. Before Garcia left for Washington to testify, he called
Morris' widow. ``She said she was happy'' that her husband's suicide
and the V.A. review would be brought up in Congress, Garcia said,
``because maybe then his death would mean something.''