[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                 DISABILITY CLAIMS RATINGS AND BENEFITS


                    DISPARITIES WITHIN THE VETERANS


                        BENEFITS ADMINISTRATION

=======================================================================



                                HEARING

                               before the

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 16, 2007

                               __________

                           Serial No. 110-53

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, Jr., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                  HARRY E. MITCHELL, Arizona, Chairman

ZACHARY T. SPACE, Ohio               GINNY BROWN-WAITE, Florida, 
TIMOTHY J. WALZ, Minnesota           Ranking
CIRO D. RODRIGUEZ, Texas             CLIFF STEARNS, Florida
                                     BRIAN P. BILBRAY, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                            October 16, 2007

                                                                   Page
Disability Claims Ratings and Benefits Disparities within the 
  Veterans Benefits Administration...............................     1

                           OPENING STATEMENTS

Chairman Harry E. Mitchell.......................................     1
    Prepared statement of Chairman Mitchell......................    36
Hon. Ginny Brown-Waite, Ranking Republican Member................     2
    Prepared statement of Congresswoman Brown-Waite..............    36
Hon. Zachary T. Space............................................     3
Hon. Cliff Stearns...............................................     4
Hon. Timothy J. Walz.............................................     5

                               WITNESSES

U.S. Department of Veterans Affairs:
  Jon A. Wooditch, Deputy Inspector General, Office of Inspector 
    General......................................................    16
    Prepared statement of Mr. Wooditch...........................    42
  Ronald R. Aument, Deputy Under Secretary for Benefits, Veterans 
    Benefits Administration......................................    22
    Prepared statement of Mr. Aument.............................    44

                                 ______

American Veterans (AMVETS), Ray Pryor, USN (Ret.), Chillicothe, 
  OH.............................................................     9
    Prepared statement of Mr. Pryor..............................    39
Kenney, John J. ``J.J.'', USMC (Ret.), Homosassa, FL, Veteran 
  Service Officer, Citrus County, FL.............................     7
    Prepared statement of Mr. Kenney.............................    37
Institute for Defense Analyses, David E. Hunter, Ph.D., Research 
  Staff Member, Cost Analysis and Research Division..............    14
    Prepared statement of Dr. Hunter.............................    40

                       SUBMISSIONS FOR THE RECORD

American Legion, Steve Smithson, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission, statement...............    46
American Legion, Department of Ohio, Donald R. Lanthorn, 
  Department Service Director, statement.........................    50
Wilson, Hon. Charles A., a Representative in Congress from the 
  State of Ohio, statement.......................................    53

                   MATERIAL SUBMITTED FOR THE RECORD

Post Hearing Questions and Responses for the Record:
  Hon. Harry E. Mitchell, Chairman, and Hon. Ginny Brown-Waite, 
    Ranking Republican Member, Subcommittee on Oversight and 
    Investigations, Committee on Veterans' Affairs, to Hon. 
    Gordon H. Mansfield, Acting Secretary, U.S. Department of 
    Veterans Affairs, letter dated November 2, 2007, and VA 
    responses....................................................    54


                 DISABILITY CLAIMS RATINGS AND BENEFITS



                    DISPARITIES WITHIN THE VETERANS



                        BENEFITS ADMINISTRATION

                              ----------                              


                       TUESDAY, OCTOBER 16, 2007

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
              Subcommittee on Oversight and Investigations,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:04 p.m., in 
Room 334, Cannon House Office Building, Hon. Harry E. Mitchell 
[Chairman of the Subcommittee on Oversight and Investigations] 
presiding.
    Present: Representatives Mitchell, Space, Walz, Brown-
Waite, and Stearns.

             OPENING STATEMENT OF CHAIRMAN MITCHELL

    Mr. Mitchell. This hearing will come to order. This is the 
Subcommittee on Oversight and Investigations hearing on 
Disability Claims Ratings and Benefit Disparities within the 
Veterans Benefits Administration (VBA). I want to thank 
everyone for coming this afternoon.
    For years the Veterans Benefits Administration has 
experienced problems maintaining adequate accuracy and 
consistency data within it's rating system. The purpose of this 
hearing is to evaluate what the VA is doing to fix these 
problems. Their ability to keep accurate records is essential 
to ensure the quality of veteran disability ratings now and 
into the future.
    Let me first thank Congressman Space who has quickly become 
a leader in working to address this issue. He and Ranking 
Member Ms. Brown-Waite took the lead in assembling the first 
panel. The disability ratings system has been an issue of 
serious concerns since 2002 following an eye-opening U.S. 
Government Accountability Office (GAO) Report. On January of 
2003, the GAO designated the U.S. Department of Veterans 
Affairs' (VA's) Disability Program as high risk. This 
designation resulted from concerns about consistency of 
decision making and accuracy of records.
    This Subcommittee is aware of the Department's efforts to 
correct these issues, but more has to be done. I am concerned 
about the wide variations in average compensation per veteran 
and grant rates that persist between states. After years of 
recommendations by the GAO and the VA Office of Inspector 
General (OIG), the VA has failed to collect and maintain an 
accurate database. This must change because our Nation's 
veterans cannot be forced to wait any longer. According to 
VBA's Systematic Technical Accuracy Review or STAR, accuracy of 
regional office (RO) decisions vary from 76 percent in Boston 
to 96 percent at the Fort Harrison regional office.
    This variation is troubling. More troubling is that STAR 
only looks at accuracy and completely ignores consistency of 
decisions. The VA has implemented a new data system called 
Rating Board Automation 2000. This system collects more 
information but it continues to set roadblocks for analyzing 
claim denials for disabilities like Post Traumatic Stress 
Disorder (PTSD) and Traumatic Brain Injury (TBI). PTSD and TBI 
are complicated and often misdiagnosed disabilities. Because of 
their nature, rating a veteran with these disabilities is 
somewhat subjective.
    We understand there are variances between states and claims 
decisions and that is to be expected. But the subjective nature 
of the ratings process does not do our veterans justice. We are 
sending the wrong message to our Nation's veterans. We are 
saying that even though you served courageously for your 
country, you better live in the right State and hire 
professionals when filing for disability benefits. This is 
unacceptable.
    Just last week we heard from the Veterans Disability 
Commission on the necessity to provide equitable treatment for 
all veterans, but this is not the case today. Aside from 
maintaining accurate records, we need to make sure that claims 
officers nationwide receive the same training. This training 
must be focused on the intricacy of each disability imposed on 
any veteran young and old. I know that we can work together in 
a bipartisan way with the VA to ensure that our veterans get 
the best and most fair benefits available.
    Before I recognize the Ranking Republican Member for her 
remarks, I would like to swear in our witnesses. Will all 
witnesses from all three panels please rise. And would you 
raise your right hand.
    Do you solemnly swear to tell the truth, the whole truth, 
and nothing but the truth.
    Thank you. I would now like to recognize Ms. Brown-Waite 
for opening remarks.
    [The prepared statement of Chairman Mitchell appears on p. 
36.]

          OPENING STATEMENT OF HON. GINNY BROWN-WAITE

    Ms. Brown-Waite. Thank you very much, Mr. Chairman. The 
Institute for Defense Analyses (IDA) recently issued their 
final report in March of this year on the analysis of the 
differences in disability compensation in the Department of 
Veterans Affairs. This report was completed at the VA's request 
to identify and collect data on compensation of recipients.
    According to this study, the VA must do three things. One, 
put forth a national effort of consistency of claims 
processing; two, make certain that the raters receive 
consistent training on a national basis; and three, collect and 
maintain valid data to analyze national statistics and trends.
    I am very interested in hearing from the three panels, but 
especially I want to hear how VBA actually plans to implement 
those recommendations. It is apparent that VBA must take steps 
to improve training and to modernize it's rating system.
    Whether a veteran's claim is rated at the St. Petersburg VA 
regional office or the Phoenix, Arizona, VA regional office, 
the same standard should be applied when making a rating 
decision on the claim.
    I would like to mention a bill that I have cosponsored with 
my colleague, Mr. Lamborn, H.R. 3047, the ``Veterans Claim 
Processing Innovation Act.'' This legislation would improve the 
veterans claim process at VA by changing the work credit system 
for VA. To do this, the measure establishes a fully electronic 
system pilot to streamline the claims process.
    That bill also requires the VA to have an independent 
organization certify the effectiveness of VBA's training 
programs and allow family members of veterans who have passed 
away to continue the original claim instead of forcing the 
dependents to start the claim all over again.
    I hope that this legislation will pass the Committee before 
the end of this Congress and be considered on the full House 
Floor. I look forward to hearing more from our witnesses today. 
And with that, I yield back the balance of my time, Mr. 
Chairman. Thank you.
    [The prepared statement of Congresswoman Brown-Waite 
appears on p. 36.]
    Mr. Mitchell. Thank you. Mr. Space?

           OPENING STATEMENT OF HON. ZACHARY T. SPACE

    Mr. Space. Thank you, Mr. Chairman, and thank you Ranking 
Member Brown-Waite for holding today's Subcommittee hearing.
    I requested this hearing because of my concern for the 
existence of inequities in veterans disability payments. More 
specifically, I requested this hearing because of my home 
State's dismal ranking in average disability payments. Ohio 
ranked dead last among States with an average of under $8,000. 
The national average according to the Institute for Defense 
Analyses Report based on 2005 data was $8,890. And the highest 
ranking State was New Mexico with an average of over $12,000.
    I am concerned that veterans in Ohio, who have served just 
as honorably as veterans in other States, may not be getting a 
fair deal by virtue of where they reside. In my district, one 
is more likely to live below the poverty line than to have a 
college education. That said, it is a struggle for many of my 
constituents to meet the demands of the cost of living in Ohio.
    Poor veterans in Ohio need every disability dollar they 
have earned. I hope this hearing is a step in addressing that. 
I understand that some of the State-by-State inequity may be a 
result of factors beyond the control of the VA. However, I also 
believe there is much that can be corrected. There is a need 
for processes to increase consistency in the training given to 
claims raters. And furthermore, there is a need for oversight 
over the regional cultures that we will hear about today.
    I want to know that every possible step toward addressing 
what is fixable about this situation is being taken. I am 
privileged to use my membership on the Subcommittee to shed 
some light on this grave problem. Congressman Charlie Wilson, a 
good friend and colleague, wanted very much to be here today. 
However, he is recovering from recent surgery and on his behalf 
and on behalf of his constituents as well as mine, I look 
forward to hearing today's testimony to determine how Congress 
can best work to address the disability claims disparity that 
exists, and that is quite frankly negatively impacting the 
brave heroes of the great State of Ohio.
    And I should also add that I am very grateful to have on 
hand today one of my constituents, Mr. Ray Pryor of 
Chillicothe, Ohio, who will present testimony on behalf of 
AMVETS.
    I would like to request permission to submit the written 
statement of Mr. Donald Lanthorn, Department Service Director 
for the Ohio American Legion, for the record, pending review by 
the appropriate authorities.
    Thank you, Mr. Chairman.
    [The statements of Donald Lanthorn and Congressman Charles 
A. Wilson appear on pages 50 and 53.]
    Mr. Mitchell. Thank you. Mr. Stearns?

            OPENING STATEMENT OF HON. CLIFF STEARNS

    Mr. Stearns. Yes. Thank you, Mr. Chairman. I guess we all 
know there have been many organizations that review the 
inconsistencies within the Veterans Benefit Administration. And 
they have recommended that the VA start gathering data and 
formulating metrics in order to better monitor any disparities.
    The most recent investigation into consistencies between 
the VA regional offices and VBA Compensation Benefits consist 
of a Government Accountability Office Report that was issued in 
2002. Another one was issued in 2003 and a third was issued in 
2004. And they are followed by the Office of the Inspector 
General investigation in 2005 and an Institute for Data 
Analysis that the Chairlady mentioned earlier in the report in 
2007.
    My colleagues, in 2002, the GAO found that the VA did not 
systematically assess decision making inconsistencies to 
determine the degree of valuation variation that occurs for 
specific impairments, and recommend that the VA begin to gather 
useful data that would allow them to determine if there were 
problems with inconsistencies. Following the GAO of 2003 
investigation, the VA began to better monitor accuracy. But it 
appears they still did not address the inconsistencies.
    When the GAO returned to the issue in 2004 and determined 
the VA had not yet acted. They had yet to act on the 2002 
recommendations. So, Mr. Chairman, we have these reports and 
the VA is not consistently acting on them. And as we go down 
this line of reports, we find there is less action than we 
would expect. GAO also noted that data in the VA benefits 
delivery network system did not, ``provide a reliable basis for 
identifying indications of possible decision making 
inconsistencies among regional offices.''
    So the question is, when you have all this information over 
many years, why aren't they acting? In 2005, the VA OIG issued 
its own report now highlighting various inconsistencies. So we 
have all these reports and you have the VA's own OIG report. 
There are disparities in claims ratings and payments within the 
VBA, some

of the most significance being 100 percent disability ratings, 
and most specifically, as mentioned for Post Traumatic Stress 
Disorder and individual unemployment ratings.
    Veterans with either a 100 percent disabled or individual 
unemployability (IU) rating received 58 percent of the total 
payment made by VA throughout the country, yet they make up 
only 17 percent of the total veterans population.
    So both the IU ratings and the PTSD are extremely 
subjective. And I think hopefully our witnesses can give us a 
better understanding of this. This is a critical issue that 
must resolved, especially in light of the reiterated 
frequencies of these various agencies indicating to us this is 
a problem. And there has been no one acting for 4 or 5 years, 
and yet we come back and talk about it.
    So I am interested in hearing from our witnesses about the 
possibility of perhaps modifying the current data compilation 
program to collect more information on claims ratings to better 
monitor possible disparities.
    So, Mr. Chairman, I appreciate your hearing on this, and 
hopefully the witnesses will be able to help us. Thank you.
    Mr. Mitchell. Thank you. Mr. Walz?

           OPENING STATEMENT OF HON. TIMOTHY J. WALZ

    Mr. Walz. Thank you, Mr. Chairman. And thank you to every 
one who is here today. We truly appreciate it and please know 
that everybody in this room is committed to our veterans. I 
would like to say Chief Kenney that I find no greater friend to 
the veterans in our County Veteran Service Officers (CVSOs) so 
I thank you for your work there. They understand who they go to 
and who is their advocate to get things done. And in our 
Veterans Service Organizations (VSOs) that are speaking for 
veterans and understanding, we see ourselves and our role in 
this Oversight and Investigation Subcommittee to help 
facilitate any changes that are necessary to help our veterans.
    I have said it dozens of times and I will continue to say 
it. We know that the people and those great civil servants that 
work in the VA want to deliver that service, but as my 
colleague Mr. Stearns so clearly and sufficiently pointed out, 
there have been plenty of suggestions to make changes, to make 
this better that have not happened. And I think it is incumbent 
upon us to make sure that this Committee is doing that.
    So this is an issue that is on our veterans' minds. It is 
on my constituents' minds. The Disability and Claims System is 
something that they feel that there is a real injustice being 
done to our veterans. And this is just one more of those 
issues. But I do believe that there is absolutely no reason to 
believe we cannot get this fixed. There are some good hard data 
out there and I think there are some things that we can put 
into place. And I hope, as my colleagues have said, to hear 
from you on how we can do this.
    And with that, I yield back, Mr. Chairman.
    Mr. Mitchell. Thank you. I ask unanimous consent that all 
Members have 5 legislative days to submit a statement for the 
record.
    Seeing no objections, so ordered.
    I would now like to call on Ms. Brown-Waite to make her 
introductions.
    Ms. Brown-Waite. Thank you, Mr. Chairman. Thank you for 
giving me the opportunity to introduce one of my constituents 
and one of my favorite VSOs just because of the number of 
veterans that he deals with every single day, and yet he does 
it in a very cheerful manner. And that is John, ``J.J.,'' as 
everyone knows him as, Kenney who is testifying before us 
today.
    There is a very strong sense of service to the country that 
runs in the Kenney family. J.J. Kenney is the son of a World 
War II combat-wounded veteran. He, along with three of his 
other four siblings, served during the Vietnam War. His older 
sister retired as a Chief Navy Corp with 20 years in the U.S. 
Navy.
    J.J. himself served in the United States Marine Corps from 
November 1963 until his retirement in September 1986 with over 
20 years of service in the Marines.
    As a training officer at the Navy Parachute Rigger School, 
he completed a total of 34 parachute jumps. After retirement 
from his civilian positions he moved to Florida and like many 
people got a little bored and re-entered the workforce as 
Citrus County's Assistant Veterans Service Officer.
    After just 18 months, the County Commission recognized his 
talents and he was selected as the County Veterans Service 
Officer.
    In 2002, his office was selected as the best large service 
office based on population by the Veterans of Foreign Wars 
(VFW) Department of Florida. J.J. is an accredited service 
officer holding accreditations for National Association of 
County Veterans Service Officers, Florida Department of 
Veterans Affairs, the American Legion, Disabled American 
Veterans (DAV), and the Veterans of Foreign Wars.
    J.J. Kenney and his beloved wife of 42 years, Mary Ann, 
reside in a beautiful part of my district, Homosassa, Florida. 
They have three children and ten grandchildren. I am very 
pleased that he is here today to share his testimony. And we 
need to listen to the disparities that he will bring forth.
    Thank you, Mr. Chairman and thank you J.J. for being here.
    [Applause.]
    Mr. Mitchell. Thank you. Mr. Space?
    Mr. Space. Thank you, Mr. Chairman. Ray Pryor served the 
United States Navy on active duty from June 1973 to May 1975 
making four tours aboard ships in the South Pacific. He then 
served 6 additional years in the Naval Reserve. Following Mr. 
Pryor's military service, he was an employee of Ohio's Job and 
Family Services for 25 years, retiring in June of 2005.
    In addition, Mr. Pryor served as a veterans employment 
State representative for 20 years with the last 5 years as the 
veterans licensing and certification coordinator for veterans 
programs. Mr. Pryor currently serves on the Ross County 
Veterans Service Commission as a county employee, and along 
with four commissioners, oversees the operations of the County 
Veterans Service Office. He sits on the South Central Ohio 
Homeless Veterans Committee; Ross County Veterans Council; 
Veterans in Transition, Inc.; and belongs to AMVETS, the 
American Legion, the DAV, Vietnam Veterans of America, and the 
VFW.
    As a resident of Chillicothe, Mr. Pryor is, as I mentioned, 
a constituent of mine and a member of my Veterans Advisory 
Board. He is accompanied by Raymond Kelley, the Legislative 
Director for AMVETS. And I welcome Mr. Pryor and Mr. Kelley and 
thank them for taking time to be here today.
    Mr. Mitchell. We will begin with Mr. Kenney. You have 5 
minutes.

STATEMENTS OF JOHN J. ``J.J.'' KENNEY, USMC (RET.), HOMOSASSA, 
FL, VETERAN SERVICE OFFICER, CITRUS COUNTY, FL; AND RAY PRYOR, 
  USN (RET.), CHILLICOTHE, OH, ON BEHALF OF AMERICAN VETERANS 
     (AMVETS); ACCOMPANIED BY RAYMOND C. KELLEY, NATIONAL 
        LEGISLATIVE DIRECTOR, AMERICAN VETERANS (AMVETS)

              STATEMENT OF JOHN J. ``J.J.'' KENNEY

    Mr. Kenney. Good afternoon, Mr. Chairman, Members of the 
Committee. I would like to thank the Committee for this 
invitation to speak this afternoon about some of the 
disparities in the awards of benefits from State to State.
    I also would like to thank in front of her peers, 
Congresswoman Brown-Waite for her efforts on behalf of the 
veterans of Citrus County, Florida. Thank you, Congresswoman.
    I would like the Committee to know that I am not here today 
to knock the VA. We, in the State of Florida, enjoy an 
exceptional relationship with our one and only regional office 
in St. Petersburg. Many of my fellow service officers in other 
States only wish they had the relationship with their RO that 
we do. If I have a problem, I can pick up the telephone and 
talk directly with the service center manager and any of the 
department heads and get the answers I need when I need them. 
When I call them, they call me back.
    There does, however, continue to be a disparity in the 
awarding of benefits from State to State. And one wonders how 
this could be possible since all 50 plus regional offices are 
guided by the same regulations; the 38 Code of Federal 
Regulations (CFR) and the M21.
    One, the 38 CFR provides the necessary information with 
regard to the ethical conduct in the adjudication of veterans 
claims along with how and when the information about veterans 
should be handled. Additionally, the 38 CFR provides the 
various information required with regards to diagnostic codes 
for the different illnesses and injuries along with the 
percentage to be awarded for severity of the disability.
    The M21 Manual is basically a Standard Operating Procedure. 
What do I do to get from point ``A'' the receipt of the claim, 
to point ``B'' the decision. It would appear a relatively 
simple task of reviewing the evidence supplied by the veterans; 
reviewing the service medical records for an in-service 
occurrence; verifying character of service; determining from 
the medical evidence if the condition is chronic in nature or 
if the disease or illness is presumptive. Presumptive meaning 
that veteran has filed a claim within 1 year of separation or 
has a disability as a result of exposure to an environmental 
hazard; i.e., Agent Orange, radiation or was a prisoner of war.
    There are several elements that are not be considered and 
they include the human element, the veteran population, and the 
inventory of the various regional offices. The human element is 
in every decision the VA renders. However, it differs from 
State to State. I know the training received by VA is superb 
and to the best of my knowledge standardized. So why the 
disparity in the awards?
    I would like to provide the Committee with a couple 
samples. In the first example, the veteran who I will call Mr. 
Smith, resides in California. He entered the Armed Forces in 
the mid 1960s. At boot camp, the veteran received his 
inoculations with the air gun. In the late 1990s, early 2000, 
he was diagnosed with hepatitis C. He had not used drugs, had 
no tattoos, and had not engaged in any improper conduct.
    He applied for service-connected compensation based on the 
use of the air guns providing medical evidence that supported 
his claim. He was awarded service connection.
    Veteran number two, we will call him Mr. Jones, resides in 
Florida and entered the service approximately the same time as 
Mr. Smith. He too received inoculations with the air gun. 
Around the same time as Mr. Smith, Mr. Jones was diagnosed with 
hepatitis C. He initially thought it may have been the result 
of surgery he had undergone at the VA. Thinking he had received 
blood during the surgery, he applied for compensation thinking 
the blood may have been tainted.
    Upon receipt of the claim, the VA located the surgical 
notes that indicated Mr. Jones had not received any blood 
products and denied his claim. In discussion with the veteran, 
again ruling out drugs, inappropriate behavior or tattoos it 
came down again to the air gun.
    The veteran again applied for compensation based on the air 
gun providing some of the same evidence as Mr. Smith did in his 
claim. Additionally, he found a medic who was administering 
shot to the same time Mr. Jones was at boot camp. The medic 
verified the method the air gun was used and this supported by 
medical evidence that was----
    Mr. Mitchell. Can you wrap it up a little?
    Mr. Kenney. Yes, sir. Basically, both individuals, same 
disability, one granted, one not granted.
    And the same thing applies. There was no disparity in the 
two of them. And the second example I had for you was with 
reference to hearing. Two veterans, same problem, hearing loss. 
Same type of service, same type of exposure. Veteran from New 
Jersey was approved, veteran from Florida was denied. That case 
is now on appeal.
    It is apparent to me that the VSR is--the human element 
played a significant role in all these claims. How to remove 
that factor from the process, I don't know. Continued training 
is probably the best bet in reducing this factor in the claims 
process.
    We look at the populations of Texas, Florida, and 
California. You can see the populations run from three million 
down to one million with Florida having the second largest 
amount of veterans and the oldest veterans population but we 
only have one regional office. California has three, Texas has 
two. That is another problem.
    I submit that the VA should take a look at or look at it 
basically like they did with the Capital Asset Realignment for 
Enhanced Services (CARES) Commission. Look at the States, think 
of possible realignment, additional regional offices, and 
standardize the training if it is not standardized.
    Mr. Chairman, thank you for your time. And again I 
appreciate the opportunity to come here before this Committee 
and your patient listening.
    [The prepared statement of Mr. Kenney appears on p. 37.]
    Mr. Mitchell. Thank you. Mr. Pryor, you have 5 minutes.

                     STATEMENT OF RAY PRYOR

    Mr. Pryor. Thank you, Mr. Chairman and Members of the 
Subcommittee. And a special thank you to Congressman Space for 
inviting me over. Thank you for providing the AMVETS the 
opportunity to testify regarding the issue of disability claims 
and ratings and benefits disparities within the Veterans 
Benefits Administration. This hearing is very important in as 
it addresses an issue that continues to plague our Veterans 
Benefits Administration and leaves veterans frustrated and 
suspicious of the system that is in place to support them after 
their service to our great Nation.
    In examining the factors that have led to the disparities 
in claims ratings two large overlying conditions are present 
that have allowed the gaps in ratings to exist and several 
circumstances have occurred which have exacerbated the problem.
    First, and foremost, we are working with the system based 
on humans making decisions. Their perceptions understanding of 
conditions and occasional mistakes are going to play a role in 
disparities. If this was the only issue then the disparities 
would not be regionally based, they would be proportionately 
distributed throughout VBA.
    However, there is evidence that displays disparities 
between regional offices. AMVETS believes these disparities are 
caused by two separate, but related, groups within the claims 
process. The Veterans Service Representative, the Rating 
Veteran Service Representative, the Decision Review Officer 
(DRO) and the rating--on the rating side and the compensation 
and pension (CP) doctors whose evaluation of a veteran is used 
by the regional office to decide a claim.
    The reason these two groups have a great influence on the 
outcome of the veterans claims and why there are regional 
disparities is due to the personalities of the doctors, the 
raters, the review officers, the personalities of the regional 
office in general. These regional personalities develop because 
new raters and DROs are trained by the regional office and they 
develop the regional personality in styles of common terms and 
language are used by the raters when filing a claim. 
Terminology such as full range of motion compared to 
essentially full range of motion could change a rating by 10 
percent.
    Likewise, physicians perceptions and similar language usage 
can alter a claim. Veterans Service Officers will state they 
routinely see compensation and pension exams which will 
describe the patient with cookie cutter language leaving room 
for subjective interpretation.
    In addition to these personalities that determine 
compensation on similar if not identical claims with a broad 
range of outcomes is the backlog of the claims themselves--VBA 
and the performance credit system that monitors the number of 
claims filed by the raters and DROs.
    Currently there is no oversight of the quality of work the 
DROs perform. As identified by the AMVETS sponsored ``National 
Symposium for the Needs of Young Veterans,'' DROs are evaluated 
on the number of claims they submit, but not necessarily on the 
number of claims that are submitted and that are good claims 
and have awards given to them or are denied or lowered.
    The backlog has increased the challenge of the number of 
claims that are overturned and remanded. When they are 
overturned and remanded they come right back into the system 
through appeals. AMVETS suggest three recommendations which 
will assist in narrowing the disparities in claims and reduce 
the backlog.
    First, a centralized training facility that will be tasked 
with teaching new raters and DROs in a standardized outlined 
process in filing and reviewing claims. This will remove much 
of the regional personality that affects the disparity in the 
claims as they are.
    Secondly, there are needs to improve the oversight of both 
the rater and reviewer and CP doctors. In regard to the CP, 
oversight should be placed and to ensure the examiners guide is 
being utilized. This could be done through the Whistle Blower 
Program which would allow a veteran to make an appeal or make a 
report on a compensation and pension (C&P) exam that went 
wrong.
    This system--a system needs to be developed that will not 
only ensure claims are being filed but the claims are being 
filed properly and completely. H.R. 3047 makes efforts to 
improve the credit receive system which the DROs and rating 
veterans service representatives (RVSRs) currently work. This 
system, or a system that monitors a ratio of cases remanded--
were overturned--to the total number of cases referred is 
essential in improving the claims process.
    Lastly, understanding this is a 2- or 3-year process, 
hiring more staff to reduce the burden of the backlog is 
critical. There is no single, simple solution to the disparity 
problem, but identifying the roots of the problem and tasking 
VA with finding solutions to these problems is critical if 
improvements are going to recognize the claims system.
    Mr. Chairman, this concludes my testimony.
    [The prepared statement of Mr. Pryor appears on p. 39.]
    Mr. Mitchell. Thank you. We will now open up for questions. 
And I have a question, first of all, to Mr. Pryor.
    Mr. Pryor. Yes.
    Mr. Mitchell. You stated that the current disability rating 
disparities leave veterans frustrated and suspicious?
    Mr. Pryor. Absolutely.
    Mr. Mitchell. I think this is perfectly understandable and 
justified.
    Mr. Pryor. Right.
    Mr. Mitchell. In your opinion, and maybe you gave it in 
your last three recommendations, what can we do in Congress, 
short of a complete overhaul, to restore confidence in 
disability ratings?
    Mr. Pryor. We need to give the VA system the support at the 
Congressional level, full funding, money to hire new staff 
people. Staff people to help decrease the backlog, bring extra 
people in or people in to work on those claims. And do exactly 
as we talked support the initiative to make a standardized 
training system throughout the VA system where all are trained 
the same nationwide to support the veterans that are out there.
    Mr. Mitchell. And this question is to either Mr. Kenney or 
Mr. Pryor. We are all aware that the disability claims backlog 
is embarrassingly long. This is due in large part to inadequate 
data systems. Pressure is being placed on decision review 
officers to meet quota standards in order to address this 
backlog. It seems to me that this pressure is pushing 
complicated cases to the back burner when they should be 
receiving extra attention. What should be done in Congress or 
the VA to ensure that we put an end to this practice?
    Mr. Pryor. Well again we need to definitely make sure that 
the rating and adjudicators and the people reviewing those 
claims are fully trained and have a standardized manual or 
standardized process that they are using to make the decisions 
on ratings.
    Secondly, when they make poor decisions and they make a low 
rating or a non-rating and that goes back to the veteran, that 
is going to cause the backlog if they are making those types of 
decisions when they should be rating a claim, that is going to 
go back to the veteran. The veteran is going to file an appeal. 
It is going to go back into the system and it is going to 
continually even bog the system down even more.
    So maybe we should have a review of claims that are denied 
before they ever go back to the veteran, you know that might be 
an idea. But we need to be have a standard process and 
everybody rating from the same process.
    Mr. Kenney. Mr. Chairman, If I may? I know in our regional 
office one of the top priorities are the young men and the 
young women that are catastrophically injured as a result of 
our current conflict. And that has with some of our older 
veterans given them the perception that they are being placed 
on the back burner. And we assure them, you know, the VA went 
about and they established a Tiger Team in Cleveland to handle 
the backlog of those veterans over 70. But until VA gets the 
funding that they need to fully staff, it is just going to 
continue.
    And it is, I think, it is going to get worse because most 
of, I would say and I am going to guess at 50 percent of the 
staff in the VA are about my age. About 2 years, 3 years from 
now, sir, they are going to be thinking very seriously about 
that cabana on the beach. And the VA is going to get hit with a 
large loss of personnel. And I think now is the time the VA has 
got to start thinking about those 3, 4 years down the road when 
those people are going to be leaving.
    And I would suggest that similar to the BOOTS to Teachers 
Program. We should have a BOOTS to VA problem? Why not 
reimplement Project Transition? Military personnel that are 
planning on leaving the service either due to the expiration of 
their enlistment or their retirement. Six years prior to that 
put them into a transitional program and put them in a VA 
Office. Have the VA offer them employment. Put them into a 
project transition. And then at their retirement or their 
release from active duty, these individuals will be 6 months 
ahead of everybody else. And they are coming off the line. They 
know what these troops have been going through because they are 
the troops. And I think that would greatly improve.
    Mr. Mitchell. Thank you. Ms. Brown-Waite?
    Ms. Brown-Waite. Thank you, Mr. Chairman. That is an 
excellent suggestion, J.J. And as you were talking about, you 
know, people looking forward to the cabana on the beach, it 
made me think that you know even though right now there is a 
slow down in the housing market, people are not going to retire 
to, with all due respect, Alaska. They are going to be coming 
to Florida. And Florida will have even more veterans than what 
they----
    Mr. Mitchell. And Arizona.
    Ms. Brown-Waite [continuing]. And Arizona. Even more 
veterans than what they do now. Right now we exceed Texas in 
the number of veterans that Florida is caring for and yet Texas 
has two regional offices. Tell me what if another regional 
office were to be placed in Florida, what do you think the 
outcome would be. Would it be more timely decisions? Tell me 
what your expectation would be if another regional office could 
be placed in Florida?
    Mr. Kenney. If we had another regional office in the State 
of Florida, I have no doubt that the claims process would be 
expedited. I think the last thing I saw was we had like 25, 
26,000 claims in the inventory at St. Petersburg. So you split 
that, you have 13,000 each regional office. If we staff up the 
second regional office with experienced raters, plus a 
contingency of newly assigned or newly raters, DROs, I think it 
can't help but improve the system.
    As we not only do we have the State of Florida, they are 
handling Puerto Rico----
    Ms. Brown-Waite. And Georgia.
    Mr. Kenney [continuing]. And the U.S. Virgin Islands. So 
they are definitely, our regional office is overwhelmed.
    Ms. Brown-Waite. Mr. Pryor, let me ask you a question. The 
IDA report that we will be hearing about in a later panel 
focuses on six recommendations for consideration by the VA. 
They are standardization of initial and ongoing training for 
rating specialist, to standardize the medical evaluation 
reporting process, to increase oversight and review of the 
rating decisions, to consolidate rating activities into a 
central location, and to develop and implement metrics to 
monitor consistency in adjudication results, and expand and 
improve data collection and retention.
    I know that you assist veterans in their claims processing. 
If only three of these recommendations could be implemented, 
which three do you think should be at the top of the list?
    Mr. Pryor. Again, standardizing the training and the 
process for all of the adjudicators and the people that are 
reviewing the claims at the regional level, I think, definitely 
should take place. I think that should be our number one 
priority.
    The claims itself and developing the claims process once it 
reaches the VA system, the regional office the VA system should 
be I think looked at very heavily. I, you know, possibly 
setting up a pre-screening a claim before it ever goes to an 
adjudicator to make sure everything is there. So that when it 
does go to the adjudicator, the adjudicator, the person 
reviewing that claim, can make good decisions.
    So standardizing and maybe reorganizing or revamping that 
claims process and what is happening with that claim once it 
gets to the regional office would be the second issue. I really 
believe that.
    The third issue to me is very important, is the staffing 
issue and to the AMVETS it is very important. I don't think you 
can do any of those things unless you staff appropriately and 
get that backlog out of there. Taking care of that backlog.
    Ms. Brown-Waite. As you know, there are 1,500 that I 
believe that were in last year's appropriations. Obviously, 
there is a training process that takes place there. There are 
many of who believe that certainly could at least double maybe 
triple that number to work on that backlog.
    I appreciate your comments, sir. Thank you very much.
    Mr. Pryor. Thank you.
    Ms. Brown-Waite. J.J., while the yellow light is on, did 
you want to add anything?
    Mr. Kenney. I think he pretty well covered it. We--I know 
the VA has the Veterans Claim Assistance Act. They have a duty 
to assist now. We in the field that sit across the desk from 
the veteran, it is our responsibility. And in my office I try 
not to forward any claim that is not ready to rate.
    Ms. Brown-Waite. Thank you very much. And I yield back, Mr. 
Chairman.
    Mr. Mitchell. Thank you. Mr. Space?
    Mr. Space. Thank you, Mr. Chairman. Mr. Pryor, I wanted to 
just inquire if we could in maybe more real world terms about 
the issue of personalities, whether it be of claims or 
physicians who are doing compensation or pension exams, or 
whether it be on the raters that are making their 
determinations based upon, in large part anyway, those exams.
    Can you give us an example, perhaps, of how that, you know 
that term personality that you referred to in real world 
application what we are talking about here?
    Mr. Pryor. Well you mentioned New Mexico and just last week 
I was working with a Veteran there in Southern Ohio who had a 
claim for PTSD. And the veteran was awarded I think 20 percent 
service connection on PTSD and was in the process of filing an 
appeal. And I don't know who he talked with at the VA System, 
but you know he was told you know, ``If you want 100 percent, 
go to New Mexico.'' Because there was C&P doctor down there 
that was a war time veteran that reviews claims. And anybody 
that was in combat and saw battle was automatically recommended 
100 percent disabled.
    That is where the personalities, past experiences, a 
persons' life--that human factor gets involved. And we are 
never, I guess, we will never get totally away from that, but 
if we try to standardize and provide that person with standard 
formula that he has to go by or they have to go by then, I 
think we are going to have more standard awards across the 
Nation, State by State.
    Mr. Space. Right. And I mean are you aware of any 
reputation that any particular facilities in your region 
perhaps may have from a personality standpoint that may affect 
the amount of awards that are rated?
    Mr. Pryor. I am, you know, I think each facility--first of 
all, I want to say that every VA facility that I have ever 
worked with the people have been great people. But if a VA 
facility is short staffed and does not have the staffing level 
to give good in-depth service and the people, the doctors, the 
people are spread so thin that they are dealing with thousands 
and thousands of people, then that is going to have an affect 
on their decision making and how much care they are going to 
take on a claim, how much care they are gong to take with one 
person. And you may have one hospital, for instance the 
hospital there in Chillicothe which is a very fine hospital, 
but they may be staffed short, staffed in the psychoanalysis 
area and that is an area that is going to suffer in that 
hospital.
    Mr. Space. Thank you, Mr. Pryor. Again, thank you for 
coming to Washington for this hearing. And I yield back.
    Mr. Mitchell. Thank you.
    Mr. Walz.
    Mr. Walz. I have no further questions, Mr. Chairman. I 
yield back.
    Mr. Mitchell. Thank you. Any further questions? Well thank 
you very much. We appreciate you coming today.
    Before we get to the second panel, let me just say that we 
are about to take some votes and the votes will be about 30 
minutes. So if the next panel would come up we can get started 
anyway. And once the buzzer rings we will recess until we have 
the votes.
    And I welcome panel two to the witness table. Dr. David 
Hunter is a Research Staff Member at the Institute for Defense 
Analyses and the Project Leader for IDA's recent report on 
disparities.
    Mr. Jon A. Wooditch is the Deputy Inspector General in the 
VA's Office of Inspector General and an original author of the 
OIG's report from 2005.
    Their insight and experience on this issue is welcomed. Mr. 
Hunter you have 5 minutes to make your presentation.

 STATEMENTS OF DAVID E. HUNTER, PH.D., RESEARCH STAFF MEMBER, 
  COST ANALYSIS AND RESEARCH DIVISION, INSTITUTE FOR DEFENSE 
ANALYSES; AND JON A. WOODITCH, DEPUTY INSPECTOR GENERAL, OFFICE 
  OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
 ACCOMPANIED BY JOSEPH M. VALLOWE, DEPUTY ASSISTANT INSPECTOR 
  GENERAL, MANAGEMENT AND ADMINISTRATION, OFFICE OF INSPECTOR 
          GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS

              STATEMENT OF DAVID E. HUNTER, PH.D.

    Mr. Hunter. Mr. Chairman and Members of the Subcommittee, I 
am please to come before you today to discuss IDA's work on 
disability compensation conducted for the Department of Veteran 
Affairs.
    In May 2005, the VA asked the Institute for Defense 
Analyses to conduct a study of the major sources of the 
observed variations across States, and one, the average 
payments that veterans receiving disability compensation, and 
two, the percent of veterans receiving disability compensation.
    My testimony today will be based on the results of that 
study which have been documented in IDA paper P4175. For the 
first question, the variation in average payments across 
States, we found that the average award in this State is almost 
entirely driven by the proportion of recipients who are 
receiving maximum awards. For the maximum awards, we found that 
awards of individual unemployability or IU exhibited the 
greatest variability across States.
    Our study quantified the amount of variation attributable 
to States having veteran population with different 
characteristics. We found that State-to-State differences in 
compensation recipients account for 50 to 70 percent of the 
observed variation across State in average awards.
    The major factors we identified that contribute to the 
observed variation across States are Post Traumatic Stress 
Disorder or PTSD, power of attorney representation, and period 
of service of the veteran.
    For the second question, the variation of percent of 
veterans receiving compensation, we found that application 
rates appear to be the key driver of the variation. In 
addition, we found that military retirees are over four times 
as likely to be receiving compensation as non-retirees. And 
this alone accounts for over 40 percent of the variation across 
States.
    Based on our findings and observations we made six 
recommendations for consideration by the VA. I should mention 
we examined the process by which VA adjudicates claims and 
found that the process has potential for producing persistent 
regional differences in rating results.
    Our recommendations were, one, standardize initial and 
ongoing training specialists. Two, to standardize the medical 
evaluation reporting process. Three, to increase oversight and 
review of the rating decision. Four, to consolidate rating 
activities to a central location or to fewer locations. Five, 
develop and implement metrics to monitor consistency and 
adjudication results. And, six, to improve and expand data 
collection and retention.
    Now these recommendations aim to improve the consistency of 
the adjudication process.
    Mr. Chairman and Members of the Subcommittee, that 
concludes my remarks. I have provided a more extensive 
statement that I ask be included in the record. And I am 
available for questions.
    [The prepared statement of Dr. Hunter appears on p. 40.]
    Mr. Mitchell. Thank you, Dr. Hunter, and we do have that 
statement. It will be included.
    Mr. Hunter. Thank you, sir.
    Mr. Mitchell. Mr. Wooditch?

                  STATEMENT OF JON A. WOODITCH

    Mr. Wooditch. Thank you, Mr. Chairman and Members of the 
Subcommittee.
    I am pleased to be here today to discuss the OIG's report 
on State Variances and VA Disability Compensation Payments 
issued in May 2005. With me is Joe Vallowe, Deputy Assistant 
Inspector General for Management and Administration, who is 
responsible for tracking implementation of OIG report 
recommendations.
    Variances in average annual disability compensation 
payments have existed for decades. Our report indicated that 
the variance between the high and low State in fiscal year 2004 
was $5,043. To understand why this variance existed we 
identified and assessed more than 20 possible factors.
    We discovered that some factors contributing to the 
variance were not within VBA's control. As such, we concluded 
that some level of variance is expected. We also discovered 
that some factors are within VBA's control, especially 
disability rating decisions, where much of the information 
needed to make these decisions is subject to varying degrees of 
interpretation in judgment.
    This occurs with both veterans when providing information 
about their medical condition and VBA claims adjudicators when 
assessing it for rating purposes.
    Rating decisions can also be influenced on how medical 
examination results are presented, by the amount of training 
and rater experience, and by the Rating Schedule itself.
    This subjectivity results in inconsistent ratings for 
similar conditions, which can influence variances in payments 
among States. As a result, the issue is not whether a variance 
exists, but whether the magnitude of the variance is 
acceptable.
    Our 2005 report includes eight recommendations aimed at 
improving consistency of ratings. In particular, we recommended 
that VBA conduct a study of compensation payments in order to 
develop data and metrics for monitoring and managing variances.
    The December 2006 Institute for Defense Analyses report 
conducted as a result of this recommendation confirmed our 
findings and made meaningful recommendations to assist VBA in 
understanding and reducing unacceptable variances.
    In preparation for this hearing, we obtained compensation 
payment data by State for fiscal years 2005 and 2006. Our 
review of this data revealed that while national variances 
continued to increase, it is doing so at a much lower rate than 
in previous years.
    We also discovered that one reason for this decline can be 
attributed to more consistent ratings for new claims. In fact, 
the national variance for new claims has declined from $6,054 
in 2004 to $4,477 in 2006.
    While some progress has been made, VBA remains challenged 
to improve consistency of ratings. To accomplish this, we 
believe further efforts are needed in monitoring and measuring 
variations in ratings by State and VBA regional offices. 
Unacceptable variations should be thoroughly evaluated to 
include in-depth reviews of individual claims that deviate from 
expected norms. Information obtained from these reviews should 
be used to improve rating consistency nationwide.
    This approach is consistent with IDA's recommendations and 
with VBA's own Consistency Analysis Study Group, which provided 
a plan to analyze and rectify inconsistencies in disability 
evaluations by looking at individual claims.
    In response to our 2007 Major Management Challenges, VBA 
stated that it plans to begin quarterly monitoring of rating 
decisions by diagnostic code and expand its quality assurance 
program, known as STAR, to accomplish these reviews during 
fiscal year 2008.
    In closing, we believe implementation of the Study Group 
plan and IDA's recommendations will greatly assist VA in 
improving the consistency of rating decisions. We also believe 
that expansion of the responsibilities and staff of the STAR 
Program will be very important to achieving this goal.
    Mr. Chairman, that concludes my remarks. I thank you once 
again for the opportunity to discuss this very important issue. 
Mr. Vallowe and I will be pleased to answer any questions.
    [The prepared statement of the Mr. Wooditch appears on p. 
42.]
    Mr. Mitchell. Thank you. We hate to inconvenience you, but 
we will be back in about a half hour. Thank you.
    At this time, the meeting is recessed for about 30 minutes.
    [Recess.]
    Mr. Mitchell. We will reconvene now with this hearing. 
Because of the little break, I hope the questions I ask both of 
you will not be redundant from what you said in your statement. 
I want you to know that both your full statements have been 
included in the record.
    First, Mr. Wooditch, you know the VA Inspector General has 
weighed in on this issue in the past. And the Department 
responded with minimal action. Having seen the report and 
recommendations by the Institute of Defense Analyses, do you 
think the VA has the resources to react more aggressively now?
    And if not, what would be immediately necessary to remedy 
this problem?
    Mr. Wooditch. As I said in my statement, I really think it 
is important to do individual case reviews of claims that show 
wide variances in ratings nationwide. I think VBA's STAR 
program, their quality assurance program, is the ideal 
mechanism to help make that happen.
    I believe that program currently is underfunded in terms of 
resources, and I think that more quality assurance folks need 
to be put into it. But given the magnitude of the problem, VBA 
has a very, very difficult challenge. They process something 
like 1.7 million claims a year. They have a backlog that 
everybody is aware of. They have a very difficult balancing act 
on determining do we put resources into processing claims or do 
we put resources into quality assurance?
    So I think they need more resources in both areas to make 
it happen.
    Mr. Mitchell. Your analysis used various data sources and 
advance statistical procedures to reach your conclusions. I do 
not think we should have to commission such an in-depth audit 
every time we want some information on improving veterans 
disability claims.
    What improvements, and I think you did suggest those, would 
you make to the current system to ensure that Congress and the 
VA always have the best disability claims data at the ready?
    Mr. Hunter. Sir, I think we recommended in our report one 
of the pressing issues is VA needs to improve their data 
collection and retention. One of the struggles we had in our 
study was getting the data in a proper form for us to do our 
analysis. To do something quicker where you could have access 
to metrics to examine variations more quickly, that would be 
only done I think if data was available for analysis that was 
now being collected by VA.
    So VA has this data in hand but typically uses it to pay 
veterans but does not keep it for analysis. And that would need 
to be done, I believe.
    Mr. Mitchell. Mr. Space?
    Mr. Space. Thanks, Mr. Chairman. Mr. Hunter, I listened to 
your testimony and I have not had a chance to review your 
report or your statement. But I just want to clarify a couple 
of things.
    Your testimony discussed some issues that I believe you 
indicated were part of the reason anyway that we see variations 
that were not attributable to actions or inaction of the VA. Is 
that correct?
    Mr. Hunter. Yes, sir. That is correct.
    Mr. Space. I want to make clear, however, that you are in 
fact acknowledging that there are variations that perhaps are 
systemic within the VA that may be contributing to the extent 
of those variances?
    Mr. Hunter. Yes. Our findings were that between 50 and 70 
percent could be attributable to different characteristics in 
the veteran and recipient population across States. But that 
the current process as it has been set up, has the potential 
for producing regional differences. And the 30 to 50 percent 
remaining that could not be explained could be due to these 
regional differences in adjudication results.
    Mr. Space. And so, 30 to 50 percent of those--we all 
understand there are going to be variations. If you had a 
perfect system there would be variations. But your feeling is 
that 30 to 50 percent are attributable to deficiencies within 
the VA?
    Mr. Hunter. Potential inconsistencies. I mean we couldn't 
find any other explanation the data we looked at.
    Mr. Space. All right. And do you--I believe your statement 
references attorney representation as a variable. I want to 
talk a little bit about that with the limited time that I have.
    First of all, with respect to attorney representation, why 
would that be listed as a variable?
    Mr. Hunter. Well it turned out that if you looked at 
veterans with power of attorney representation, they received I 
think about three times as much average awards. A little over 
11,000 versus veterans without power of attorney 
representation.
    Mr. Space. All right. And----
    Mr. Hunter. There was a huge disparity between those two 
groups.
    Mr. Space. Okay. And I understand that. I am curious as to 
why that would be listed as a variable in a study as to the 
reasons for discrepancies on a State-by-State basis.
    Mr. Hunter. I mean one of the things we tried to get at in 
our study was if that was the reason for the differences, then 
we know what corrective actions to recommend. If the 
differences were just certain States had more access to power 
of attorney than others.
    What we had found, however, were that veterans with power 
of attorney had done substantially better than veterans without 
power of attorney. But that across States, it didn't explain as 
much of the variation. We quantified only 15 percent of the 
variation was due to power of attorney differences alone across 
States.
    Mr. Space. So there are significant discrepancies between 
States in terms of the number of veterans who seek legal 
counsel?
    Mr. Hunter. Of the percent of recipients who have a power 
of attorney listed on their claim. Correct. There is variation 
across States.
    Mr. Space. Now is there a difference between having a power 
of attorney listed in seeking legal counsel or is it 
essentially the same thing?
    Mr. Hunter. Yes. I think power of attorneys aren't 
necessarily lawyers. I mean they could be CVSOs or VSOs. I mean 
there could be different levels of training. But we categorize 
whether you had a sponsor on your claim whether it was from 
AMVETS, DAV or from legal counsel versus if you submitted your 
claim yourself.
    Mr. Space. All right. Now do you have any ideas as to the 
reasons for that discrepancy between those who have power of 
attorney and those who don't?
    Mr. Hunter. Yes. We looked into that a little bit and we 
found three reasons. I mean the first one was that if you had a 
power of attorney you had slightly more issues per claim. So a 
power of attorney would advise the veteran to submit not only 
the claim they came in for, but other things they may qualify 
for of which the veteran may not been aware.
    Mr. Space. Uh huh.
    Mr. Hunter. The second one is the veteran with the power of 
attorney had a slightly higher average degree of disability 
than a veteran without a power of attorney. So the hypothesis 
there which proved out to be shown in the data was that the 
power of attorney would know what forms to fill out and be able 
to more adequately explain the veterans injury.
    But the number one reason by far for the improvement was a 
veteran with a power of attorney was far more likely to qualify 
for individual unemployability. Twelve percent of veterans with 
a power of attorney or the IU had a power of attorney. If it 
didn't have a power of attorney, only 1.7 percent wound up with 
IU.
    Mr. Space. Is it safe to assume from that a veteran is more 
likely to be able to obtain the assistance of counsel when he 
has got a stronger case?
    I mean, I am trying to figure out the reasons for this. It 
seems to me that as far as legal counsel goes, the likelihood 
of obtaining or being able to retain counsel improves with the 
quality of one's argument for disability.
    As a former lawyer, I can tell you that is true. I also--
Mr. Chairman, may I have an additional 2 minutes?
    Mr. Mitchell. Yes.
    Mr. Space. Thank you. I am also concerned that the presence 
of legal counsel in and of itself may have an impact on hearing 
officers or raters. Did your studies determine whether or not 
there was any influence that the mere presence of counsel may 
have had on the outcomes?
    Mr. Hunter. Well, I mean, I guess all we could look at was 
the data at the end. And we certainly found veterans with a 
power of attorney had higher average award than veterans 
without a power of attorney. But the hypothesis we got for 
raters were that the claims were better developed or that the 
power of attorney assisted the veteran in filling out all their 
necessary paper work for an IU claim or advise them of their 
legal rights.
    All the raters we interviewed suggested that the mere 
presence of a power of attorney did not sway their opinion one 
way or the other.
    Mr. Space. Okay. And one final question. Do you recommend 
that in response to your findings that it seems to me that we 
have one of two courses we can pursue. One is to encourage 
veterans to obtain counsel or second streamline the system and 
make it more navigable for those who aren't trained to deal 
with it.
    Have you considered recommendations in terms of either one 
or both of those?
    Mr. Hunter. I would say our recommendations that we 
presented addressed probably more than what can be done to 
improve consistency across all States.
    We didn't necessarily address the benefits of streamlining. 
It seems like it would be an excellent idea for many of the 
other VA problems that they face, but I think it was something 
a little out of the scope of our analysis which was just to 
address consistency and adjudication claims.
    Mr. Space. Okay. Thank you, Mr. Hunter.
    Mr. Mitchell. Excuse me just a second. I would like to 
follow up on a question.
    You mentioned that with an attorney or a power of attorney 
that many times they would file more than just one claim. I 
mean all the potential claims. For example, in the first panel 
Mr. Kenney pointed that two people had hepatitis C. And one 
said it was with an air gun and he was granted disability. The 
other thought it was with a blood transfusion, it was denied. 
When they went back and filed again it was the same type of air 
gun that created that.
    So you are saying probably with a power of attorney they 
would take into account all the potential reasons for the 
disability----
    Mr. Hunter. Yes.
    Mr. Mitchell [continuing]. At one time.
    Mr. Hunter. That certainly is true, sir. And they would 
recommend other disabilities that you may be presumptive for 
and ask if you also have any symptoms for those conditions as 
well. Where a veteran might just come in for his knee or his 
back, which was his primary injury and wouldn't know about 
ringing in the ear or other presumptive conditions that he may 
qualify for.
    Mr. Mitchell. Thank you. Ms. Brown-Waite.
    Ms. Brown-Waite. Thank you. I don't know how we take the 
human factor out of it with prejudices that people bring to a 
job, but in your testimony you discuss how the systematic 
technical accuracy review that is used by the VA doesn't track 
consistency. If we can't take prejudices out of it, shouldn't 
we at least be tracking consistencies?
    And I say prejudices. I mean not only prejudices but also 
sloppiness. And just those things that occur in the workplace 
that certainly shouldn't be occurring when you are dealing with 
veterans benefits, but it is out there.
    If we started over to create a performance and quality 
assurance program that would include consistency and accuracy, 
what should this program look like?
    Mr. Hunter. I think our recommendation we said to create 
metrics to improve consistency. Sort of a two-step approach. 
The first is due to the large volume of claims the VA 
processes, it is unrealistic to do a large sampling just from 
the bottom up of picking them off the pile. So we suggested 
doing metrics where you could track the data to see if there 
are any red flags that pop up on some of your more variable 
issues such as post traumatic stress disorder awards or awards 
for individual unemployability or for grants or denials of 
service connection. And that will point you into areas of 
possible discrepancies at which point you can do some detailed 
reviews of the claim files to make sure that the claims are 
being adjudicated consistently across States and correctly 
across States according to VA guidelines. Neither of which is 
really being done or hasn't been done previously
    Ms. Brown-Waite. Do you believe that having an independent 
agency review and certify the VBA training procedure would 
improve standardization?
    Mr. Hunter. I don't know if we addressed in our report 
anything about having an independent assessment or what the 
best way to do it. But we certainly stressed the importance of 
making sure where everyone did receive the same training.
    And the mechanism by which they received the training, we 
really didn't look too much into, but when one rating office is 
getting different training from raters in a different regional 
office you certainly have the potential for inconsistencies.
    Ms. Brown-Waite. Is it the echo process of this, is the way 
we did it so we're feeding this back to the raters?
    In other words, the trainers that is the way that they did 
it. They are in a region and so they echo this back to the 
people doing the rating.
    Mr. Hunter. Yeah. And then we certainly saw a lot of raters 
we had talked to said that on-the-job training from the more 
experienced people was their number one way of learning. And so 
they would typically pick up the rating style and be judged 
correct if they rated a case the same way as whoever was the 
second signature or who the more experienced raters were at the 
regional office.
    Ms. Brown-Waite. Did you at all look at best practices that 
perhaps could be emulated elsewhere?
    Mr. Hunter. Yeah. I don't think we compared, for instance, 
the VA practice to claims processing or other similar 
activities outside of the Department of Veterans Affairs, if 
that is what you are asking.
    Ms. Brown-Waite. No. I mean in the Department of Veterans 
Affairs, a really consistent, good regional office versus maybe 
one that isn't. I mean, you pointed out the disparity in the 
awards that are given. Did you also find several that really 
did a superb job where the error rate was very low?
    Mr. Hunter. Yeah. No. I think we have consciously avoided 
any declarations of good regional offices versus bad regional 
offices or correct versus incorrect. We made no judgment if one 
was too high or too low. Our tasking was to find why they were 
different. And so we tried to identify why one regional office 
was giving different results from another regional office.
    Ms. Brown-Waite. Okay. I yield back the balance of my time.
    Mr. Mitchell. Thank you. Are there any other questions of 
the panel?
    Thank you very much. And thank you for sticking around 
during the vote. I appreciate that.
    And as the third panel comes up, I just want you to know 
that in about 45 minutes to an hour we will be called for 
another one. So hopefully we can conclude this hearing by then.
    I would like to welcome to the table Mr. Ron Aument. He is 
Deputy Under Secretary for Benefits for the VA and the most 
senior civil servant at the VBA. I appreciate you coming, Mr. 
Aument, and also want to thank you for your commitment to 
helping our Nation's veterans.
    Would you please also introduce your team with you?

   STATEMENT OF RONALD R. AUMENT, DEPUTY UNDER SECRETARY FOR 
BENEFITS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS; ACCOMPANIED BY BRADLEY G. MAYES, DIRECTOR, 
      COMPENSATION AND PENSION SERVICE, VETERANS BENEFITS 
      ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Aument. I certainly will, Mr. Chairman. I am pleased 
today to be accompanied by Mr. Bradley Mayes who is the 
Director of our Compensation and Pension Service, which is the 
Program Office responsible for the Disability Compensation 
Program and developing policy and procedures that are to be 
applied uniformly throughout the system.
    Mr. Mitchell. Thank you. And you have 5 minutes. You can 
submit your full statement to the panel afterward. Thank you.
    Mr. Aument. Mr. Chairman and Members of the Subcommittee, I 
am pleased to be here today to discuss the Veterans Benefits 
Administration response to the Institute for Defense Analyses 
report on analysis of differences and disability compensation 
in the Department of Veterans Affairs.
    Today I will discuss the various initiatives underway 
within VBA that support the recommendations put forth by IDA to 
improve the quality and consistency of disability claims 
processing.
    I will respond to each recommendation in turn and discuss 
how VBA is working to achieve the intended outcome of that 
recommendation.
    First, standardize the initial and ongoing training for 
rating specialists. VBA continues to enhance and expand 
training investments to ensure accurate and consistent decision 
making. New hires receive comprehensive training and a 
consistent foundation in claims processing principles through a 
national centralized training program and a standardized 
training curriculum used by all regional offices. Standardized 
computer-based tools have been developed for use by all 
decisionmakers.
    We have established a program of advanced development 
training for post traumatic stress disorder claims, and a 
mandatory cycle of training has been implemented for all 
employees involved in claims processing. VBA already has in 
place a skills certification process for veteran service 
representatives and we are developing a skills certification 
process for rating specialists. Additionally, we have increased 
our systematic technical accuracy review, STAR, staff and 
tasked it with more oversight visits to our regional offices 
and greater responsibilities for training our decision makers.
    We have also made significant progress in our efforts to 
standardize the medical evaluation process. VA's Compensation 
and Pension Examination Program, CPEP, has been very successful 
in improving the examination process through the use of 
templates, quality reports, and examiner certification. Our 
CPEP initiatives are instrumental to achievement of our quality 
goals. VBA and the Veterans Health Administration continue to 
work together to develop and refine tools that will ensure 
greater consistency.
    VBA has established an aggressive and comprehensive program 
of quality assurance and oversight to assess compliance of 
claims processing policy and procedures and assure consistent 
application. We are increasing our STAR Program staffing and 
the sample size of their reviews. We have enhanced the STAR 
database to better use the information collected in reporting 
reviews. And we are also increasing on-site training, site 
visit participation, and use of results from STAR reports to 
clarify procedures and better focus training.
    The consolidation of specialized processing operations for 
certain types of claims has been implemented to provide better 
and more consistent decisions. Some of our efforts include the 
establishment of three Pension Maintenance Centers, the Tiger 
Team, the Appeals Management Center, and the Casualty 
Assistance Unit. VBA also established two Development Centers 
in Phoenix and Roanoke and centralized the processing of all 
radiation claims to the Jackson regional office.
    The Benefits Delivery at Discharge Program provides 
servicemembers with briefings on VA benefits, assistance of 
completing applications and a disability examination before 
leaving military service. The goal of this program is to 
deliver benefits within 60 days following discharge. VBA has 
consolidated the rating aspects of this program to two rating 
sites, which is bringing greater consistency of decisions on 
claims filed by newly separating veterans.
    We continue to look for ways to achieve additional 
organizational efficiencies through consolidation of other 
aspects of our claims processing, including death benefits, 
fiduciary activities, and telephone services. In addition to 
conducting quality reviews, C&P's STAR staff are beginning to 
conduct analyses to identify unusual patterns of variance and 
claims adjudication by diagnostic codes, and then review 
selected disabilities to assess the level of decision 
consistency among and between regional offices.
    These studies are used to identify where additional 
guidance and training are needed to improve consistency and 
accuracy as well as to drive procedural or regulatory changes. 
The VBA's data management systems have been substantially 
improved in recent years with such programs as the VETSNET 
suite of applications and the establishment of our data 
warehouse.
    VETSNET and the analytical tools in our data warehouse 
provide our employees and managers with more robust data which 
better support information management and analyses.
    Mr. Chairman, this concludes my testimony. And I will be 
pleased to answer any questions you or other Members of the 
Subcommittee may have.
    [The prepared statement of Mr. Aument appears on p. 44.]
    Mr. Mitchell. Thank you. I do have one. You know this has 
been going on for a while. In 2002, there were inconsistencies 
brought up by the Government Accountability Office. And they 
issued another report in 2003 and a third report in 2004. And 
then it was followed by an Inspector General investigation in 
2005. And from what we have heard over the course of this 
session of Congress, the lines and the wait periods are also 
getting longer, not shorter.
    I want to know, how long is it going to take? And what are 
you doing to address these particular reports? It has been 
2002, 2003, 2005 and now the most current one. What is stopping 
the VA from implementing the systems that have been 
recommended? And how long do you think it is going to take 
before we get this under control?
    Mr. Aument. Well I think there is more than a single 
question there.
    Mr. Mitchell. Right.
    Mr. Aument [continuing]. Mr. Chairman. If I can start with 
the GAO reports on consistency. One of the challenges, I 
believe that Dr. Hunter mentioned, had to do with our data on 
this. And the lack of robust and adequate data to help us----
    Mr. Mitchell. And let me ask you, who compiles this data?
    Mr. Aument. We do. It is collected as a subsidiary of the 
claims adjudication process.
    Mr. Mitchell. And evidently that is part of the problem----
    Mr. Aument. Indeed it is, sir.
    Mr. Mitchell [continuing]. Your data that you collected and 
that you have.
    Mr. Aument. That is correct, sir. And, as Dr. Hunter 
mentioned, one of the things that they found challenging in the 
course of conducting their analysis was that our payment 
system, our old legacy payment system, is just that. It is a 
payment system. And it did not collect and retain as much 
administrative data as was needed to conduct very thorough 
analyses.
    Much of that has changed starting in 2005. Looking forward 
from 2005 we have a much more robust data set available to us 
to conduct those very analyses that will lead us toward areas 
we should be examining more closely for inconsistencies.
    Up until then, our STAR Program had always focused on the 
accuracy of decisions. And we had been tied philosophically to 
the notion that if we became more accurate in our decision 
making, consistency would indeed follow. But as GAO and many 
others have told you, that is not necessarily true.
    So we need to follow up on these analyses to take us where 
the data leads us.
    Mr. Mitchell. And what did you do after the 2002, 2003, 
2005 reports? Did you do anything with these reports at all?
    Mr. Aument. There were many things included in those 
reports about what we should be doing to become more efficient, 
as well as to introduce qualitative improvements. There are a 
number of suggestions that they made about our STAR system for 
measuring accuracy. Many of those recommendations have been 
acted upon. But as for the consistency analysis aspect of it, 
very little was done with those recommendations due in part to 
the problems I just mentioned to you as far as having 
sufficient administrative data to actually get our arms around 
that.
    Mr. Mitchell. And do you think by the next time we have a 
report like this that these problems will be taken care of? How 
long do you think it is going to take to follow up on these 
recommendations?
    Mr. Aument. I believe that we will have in place, before 
this fiscal year is out, a much more robust quality assurance 
program that includes consistency review capacity.
    The STAR staff answers to Mr. Mayes and the Quality 
Assurance Program is under his direct control. We are adding 
staff to that program and we have armed them with some tools so 
that they have already begun some of the preliminary steps in 
conducting some of these consistency reviews.
    For example, we have taken a look at some station outliers, 
from our perspective, in the PTSD Program, trying to take a 
look at what those findings will tell us about that program. He 
is going to be looking at more and more of our diagnostic areas 
and disability areas to try and find out if we have stations 
that are outliers either with excessively high or excessively 
low levels of service-connection ratings and what is going on 
at those stations that is different from the Nation as a whole.
    Mr. Mitchell. And the last follow up. Then there is nothing 
stopping the VA from implementing the system? You got 
everything in place and it should all be implemented?
    Mr. Aument. That is correct, sir.
    Mr. Mitchell. Thank you. Ms. Brown-Waite.
    Ms. Brown-Waite. Mr. Aument, the system that you were 
talking about obtaining and having available all the data, is 
that the BDN System?
    Mr. Aument. The system that the Institute for Defense 
Analyses had to turn to for the data used in their analysis was 
the BDN System.
    The system that I am speaking of today that has the more 
robust data is part of the VETSNET suite of applications and it 
is called RBA 2000. It also contains information and retains 
information about those claims where we have denied benefits as 
well as those where we have granted benefits.
    Ms. Brown-Waite. Okay. Before we get to the benefit denial 
or granting, there is a problem that I actually was involved in 
with one of my constituents. He sent the necessary data in. He 
sent it, they never received it. He sent it in a second time 
and had a certified receipt requested. He got the certified 
receipt back. Any time he called or my office called the 
response was the same, that they did not have the information. 
I get involved in some of the more difficult constituent 
issues. And I called and I got a very, very helpful man who 
probably if I give his name will be fired. He told me that he 
said, ``No, ma'am.'' I identified myself. And I said, ``This is 
my constituent.'' And I said, ``You have a privacy form 
there.'' He said, ``No, we don't have the information.'' He 
said, ``But wait a minute, let me check another program. Let me 
go to another screen for another program.'' He went to the 
second screen. He said, ``No, ma'am it is not there.'' He said, 
``But there is one more.'' There was a third program and he 
finally found this information.
    Now if the veteran is calling in saying, ``Do you have my 
information that I sent you? The documentation that you 
needed.'' And he or she is getting a, ``No, no, no,'' answer 
because the person answering the phone only goes to one of the 
screens then there is an initial problem there. And when I went 
back because when I told staff about this they asked me when it 
was. I actually had the constituent step file through IQ 
printed out last night and it was in the fall of 2005. It was 2 
years ago.
    Has that problem been remedied?
    Mr. Aument. There may be more than one problem there, 
Congresswoman. One of the problems it sounds like you are 
speaking about is an employee deficiency that I cannot 
guarantee----
    Ms. Brown-Waite. Are there, sir----
    Mr. Aument. There is only one system in which that data 
should be entered. That is correct. One----
    Ms. Brown-Waite. Well, obviously, there are more than one 
system----
    Mr. Aument. Right.
    Ms. Brown-Waite [continuing]. That somebody somewhere has 
been using. And this man had the key to unlock it.
    Mr. Aument. Yes.
    Ms. Brown-Waite. Now the veteran was an elderly man who 
kind of was losing his patience and his belief in our 
government. He sent it in twice. We sent it in once. And the 
answer he consistently was getting was no it wasn't there.
    So you are telling me that there is now only one system----
    Mr. Aument. That is correct.
    Ms. Brown-Waite [continuing]. That this information would 
be entered into?
    Mr. Aument. That is correct.
    Ms. Brown-Waite. And the name of that system is the RBA 
2000?
    Mr. Aument. No, it is not. It is called MAP-D, which is 
part of the tools used by our veteran service representatives 
in the process of developing claims. It should be entered into 
that system.
    Ms. Brown-Waite. Are there still legacy systems out there 
that some people refuse to give up in the VA?
    Mr. Aument. There is--they don't really have the option to 
do that, Congresswoman. It is not discretionary on their part 
as to whether or not they wish to retain an old system or a new 
system.
    Ms. Brown-Waite. Are there simultaneously in different 
programs? Is information also being captured or is it all in 
one?
    Mr. Aument. The legacy system is still in place. Not 
everything has been moved to the replacement system. So in some 
cases not all offices are working off of the same system. Not 
all of the functionality is in place; pension is still being 
processed in the legacy systems.
    Ms. Brown-Waite. So what you are telling me is that there 
still may exist some additional system components out there 
that this information is in?
    Mr. Aument. If you are going back to your original 
question, no there is not. There are not two systems in which 
the information you described would be entered, there is one.
    Ms. Brown-Waite. Well there were three. So you are now 
saying there is only one?
    Mr. Aument. That is what I am saying, Congresswoman, yes.
    Ms. Brown-Waite. All right. I yield back.
    Mr. Mitchell. Thank you. Mr. Space?
    Mr. Space. Thanks, Mr. Chairman. Mr. Aument, this--the VA 
contracted with IDA to do this analysis. And I would be 
interested in knowing, if you know, the circumstances 
surrounding that contract. Why was IDA chosen? Was it bid out? 
What were the--what was the impetus to hire IDA as opposed to 
someone else?
    Mr. Aument. Well, first of all, the impetus was to respond 
initially to one of the recommendations that the OIG made in 
their May 2005 report----
    Mr. Space. Right.
    Mr. Aument [continuing]. Which was saying that we should 
bring in some outside----
    Mr. Space. Right.
    Mr. Aument [continuing]. Entities.
    Mr. Space. Right.
    Mr. Aument. Number two was that VBA was not the contracting 
party on that.
    Mr. Space. Who was?
    Mr. Aument. The VA's Office of Policy and Planning.
    Mr. Space. Okay.
    Mr. Aument. We co-funded that study with them, but we 
deferred to them as to the selection of the appropriate outside 
entity to perform this analysis.
    Mr. Space. Do you know what went into that selection 
process?
    Mr. Aument. No, I do not, sir.
    Mr. Space. Overall what is your sense of the IDA 
recommendations?
    Mr. Aument. I think that they are all very good 
recommendations. We believe that, for the most part, they help 
validate and support many initiatives that we already had 
underway. And they point us to areas where we need to do 
better, as well as where we need to have additional investment.
    As a result, the quality assurance component of that is 
based in part, upon their recommendations that we provide 
substantially greater resources to the Quality Assurance 
Program because we realized we probably have under resourced 
that in the past.
    Mr. Space. What is your impression of the recommendations 
concerning standardized training?
    Mr. Aument. We think it is right on target. My boss, 
Admiral Cooper, comes from a Navy background. When he came into 
this position in 2001, one of the first changes he wanted to 
see introduced into the system was to have a greater degree of 
standardized training so as to avoid perpetuating some of the 
regional proclivities toward training in a particular 
direction.
    So we have invested substantially greater amounts every 
year in centralized training.
    Mr. Space. Okay. Just so I understand, you agree that 
investing in standardized training is a good thing. The concern 
I have is that I have looked at your statement and I have heard 
your testimony. And, I fear that I may be drawing the wrong 
impression here, but the sense I have is that you believe that 
the VBA is already undertaking the necessary steps to satisfy 
the concerns raised by IDA in its analysis.
    And the concern I have is that perhaps you haven't. And 
again it almost appears to me as though you are brushing that 
off and saying, ``We agree. We are already taking steps to do 
that. What is the next recommendation?''
    And the question I have is what efforts, if any, is the VBA 
going to undertake in response to this analysis over and above 
what it has already undertaken in the past as it pertains to 
standardized training?
    Mr. Aument. As it pertains to standardized training, we are 
insisting upon, first of all, the training plans coming in from 
each and every one of our regional offices. They are required 
to submit to the Under Secretary, before the end of this month, 
standardized training programs. In the compensation and pension 
area I believe we are asking for 80 hours?
    Mr. Mayes. Eighty hours of mandatory training.
    Mr. Aument. Eighty hours of mandatory training for every 
employee within their service centers at the regional offices.
    Mr. Space. Now this is new in response to the analysis?
    Mr. Aument. Well this is an increase in the standardized 
training requirements of the past. We have increased that. We 
are saying we need to have more mandatory training. We are 
increasing the dollar investments in our Centralized Training 
Program Development Process. In 2006, we spent around $5 
million on developing standardized training products for the 
compensation----
    Mr. Space. Okay. But that appears to be something that was 
undertaken prior to the receipt of this report. And the concern 
I have is----
    Mr. Aument. Pardon?
    Mr. Space [continuing]. I think the VBA needs to step it 
up. I think the analysis verifies that. And I am optimistic 
that will happen.
    Mr. Aument. Yes, sir.
    Mr. Space. Now my other question, following up with what 
our Chairman asked, it would seem to me from your testimony 
that you believe the solution to these problems is entirely 
administrative. That apart from perhaps some additional 
funding, these are matters that can be handled administratively 
without the need for additional legislation. Is that a correct 
summary of your impression regarding the need for this Congress 
to act?
    Mr. Aument. I believe that certainly the problems that were 
brought to our attention by the Institute for Defense Analyses 
that are actionable on our part lend themselves to 
administrative solutions.
    I believe you had mentioned to one of the earlier panels 
about process simplification, whether or not we should be 
looking at that. Certainly from an ease of administration 
perspective, process simplification is a very attractive idea. 
But so often that occurs at the cost of a compromise in 
existing due process protections for veterans. We would never 
advocate that. Certainly not for the sake of making our job 
easier.
    Mr. Space. Thank you, Mr. Aument.
    Mr. Mitchell. Just to follow up a little bit with 
Congressman Space. You said that there already has been, not 
new, but there has been training to standardize. If there has 
been training already, then what has been the problem? Not 
enough training?
    Mr. Aument. Mr. Chairman, I regret if you took my comments 
to mean that we have solved the entire problem of standardized 
training, that there is nothing further to do. Indeed there is. 
We constantly must be developing new and additional 
standardized training and improving the standardized training 
that we have already developed.
    We have a long way to go. It is a never ending process. We 
are nowhere near the end of the road yet, sir.
    Mr. Mitchell. Is there anything that you need from Congress 
to make sure that we can ensure that there is a national 
consistency? As to follow up again on Mr. Space who asked if it 
was just administrative. Is there anything you need from us to 
bring about a consistency?
    Mr. Aument. There are two areas I would like to speak to. I 
think that I have seen some legislative proposals that are 
requesting reports to Congress. I think that in exercising your 
role as an oversight body holding us to task in these types of 
situations. I think that helps keep us honest.
    Number two is the continuing support through funding. Right 
now we are able to have Mr. Mayes go out and essentially double 
the staff that he has devoted to his Quality Assurance Program 
and the STAR Program. And we have also told him if that is not 
enough come back to us and ask for more and we will provide 
that.
    I think the continuing support from the Congress, 
recognizing the additional resources that need to go into this 
particular program, if we can continue to seek that support 
from you, that is a very important contribution, sir.
    Mr. Mitchell. Plus more oversight, looking over your 
shoulder.
    Mr. Aument. Yes, sir. Never hurts us.
    Mr. Mitchell. Thank you. Ms. Brown-Waite.
    Ms. Brown-Waite. Thank you very much, Mr. Chairman. How 
many people do you have in the Quality Service Program?
    Mr. Aument. I will ask Mr. Mayes, but I believe the number 
today is 18. And I believe we are in the process of hiring 16 
additional.
    Ms. Brown-Waite. So that is the doubling you were talking 
about?
    Mr. Aument. Yes.
    Ms. Brown-Waite. Did I--is that enough?
    Mr. Aument. That is a question I will ask Mr. Mayes.
    Mr. Mayes. I think that----
    Ms. Brown-Waite. You might want to turn your microphone on, 
sir.
    Mr. Mayes. First of all, when we talk about our Quality 
Assurance Program in VBA, we have 18 STAR quality reviewers 
right now. But we have over 40 employees, or will have over 40 
employees, involved in quality assurance with respect to the 
Compensation and Pension Program.
    If I could just point out, the one thing that I think we 
really learned from the IDA report is that, while we were 
looking at quality, that is through the STAR Program where we 
have 18 employees that are reviewing the final product, the 
decision that encumbers the government to the veteran. What we 
weren't looking at is the variation in that final product 
across States.
    So what we are doing is adding a fourth element to our 
Quality Assurance Program and that is consistency reviews. 
Previously we had three elements. They included STAR. They 
included site surveys. We actually go out and conduct site 
surveys to check that regional offices are in compliance with 
our policy. Then we conduct unique special reviews at the 
request of the Under Secretary or as a result of some unusual 
situation that requires reviews.
    But we weren't calling cases in. We weren't systematically 
looking at variation and then calling cases in and reviewing 
those cases to look for the root cause of the variation.
    Ms. Brown-Waite. So did you not know that there were 
discrepancies out there?
    Mr. Mayes. Well, as Mr. Aument pointed out, we were under 
the impression that if we were assured that our final product 
was accurate that in fact that would take care of 
inconsistency. And I think that is the lesson that we have 
learned. We are not just looking at whether we dot all the 
``I's'' and cross all the ``T's'' in that rating decision. But, 
is that rating decision, are those rules implemented 
consistently across jurisdictions?
    Ms. Brown-Waite. If you double the number of those in the 
Quality Assurance Program to 34 from the 18 that it is now, or 
36. If you double it, this is for 800,000 claims. Is that even 
going to be sufficient?
    Mr. Aument. He has already gone through the next steps of 
increasing the sample size that we have per station.
    Ms. Brown-Waite. All right.
    Mr. Aument. I have had many conversations with Brad on this 
issue about what the right sample size is. If you want to parse 
that sample in more than a single way, how large should that 
sample be?
    Frankly, I am of the view right now that we probably need 
to have additional staff devoted to this in order to give us 
the critical mass of sample that we really need. So it is my 
expectation that number is going to grow.
    Ms. Brown-Waite. Did I understand you correctly, Mr. 
Aument, and I may not have, that you are getting from the RO's 
their training plan? Is that what you said?
    Mr. Aument. We have asked them to produce training plans 
saying, ``Show us how your training needs provide for your 
staff.'' Not every RO has training needs that are going to be 
identical. They are going to be using the same training 
products, but we may find some office has a much more senior 
group of staff that need refresher training in a particular 
area, whereas other regional offices have many more new hires 
and are going to have to focus on more basic types of training, 
more introductory products.
    Ms. Brown-Waite. But is the training centralized? Or is the 
training left up to the RO's in which case you are still going 
to have inconsistencies?
    Mr. Aument. The training plans submitted by each RO are 
going to be subject to the Under Secretary's approval. 
Generally speaking, we are going to find that most of the 
courses we are using for those in training are going to be 
centrally developed. It will not necessarily be centrally 
administered. A lot of it is computer delivered so that the 
employees will be taking the training at their desktop.
    But we may find that there are some employees on site at 
those regional offices that may have to go to some source other 
than VBA's own centralized technical training. In some cases, 
there is leadership, management training, and coach training. 
For some of those types of products, there is a greater variety 
of course offerings.
    Ms. Brown-Waite. So it is or is not centralized? In other 
words, is the training in Arizona the same as the training 
requirement and course outlines in Florida?
    Mr. Aument. The basic training that every employee in 
Arizona takes is the same as the basic training that every 
employee in St. Petersburg takes.
    Ms. Brown-Waite. And there is a course outline?
    Mr. Aument. And there is a course outline.
    Ms. Brown-Waite. Okay. Thank you. I yield back.
    Mr. Mitchell. Mr. Space.
    Mr. Space. I have no further questions, Mr. Chairman.
    Mr. Mitchell. Let me ask this. This course outline that is 
the same, how long has that been in place?
    Mr. Aument. Excuse me, Mr. Chairman?
    Mr. Mitchell. How long has that course outline been in 
place?
    Mr. Aument. Oh, it is a dynamic outline. As we add courses 
to the curriculum it is going to be revised every single year.
    Mr. Mitchell. And everybody--how long have they been using 
this course? The same course?
    Mr. Aument. Brad.
    Mr. Mayes. Well, I want to make sure we are talking----
    Mr. Mitchell. We are talking about the training. The 
training these people are getting.
    Mr. Mayes. Yes, sir.
    Mr. Mitchell. You said that they are getting the same 
training----
    Mr. Mayes. The TPSS----
    Mr. Mitchell [continuing]. In St. Petersburg as well as 
Phoenix. If they are getting the same training, I want to know 
how long they have been getting this training.
    Mr. Mayes. The development of the training modules, I 
believe, was initiated back in 2002. These would be the tools 
that are used.
    Mr. Mitchell. And then why are there discrepancies?
    Mr. Aument. Discrepancies arise from more than just 
training differences, Mr. Chairman.
    Mr. Mitchell. But I think we were told that national 
training was one of the most important parts.
    Mr. Aument. Absolutely, Mr. Chairman.
    Mr. Mitchell. And you say you have already gotten the 
training. It hasn't been working.
    Mr. Aument. Well, there are differences in performance. 
There are many performance variables across the system, not all 
of which can be attributed to training. There are many, many 
issues: good supervision, good management, good leadership.
    Mr. Mitchell. How are you going to handle those things 
then?
    Mr. Aument. Pardon?
    Mr. Mitchell. How are you going to handle good supervision 
and performance?
    Mr. Aument. I think the way that you would do that in any 
sort of an operation, sir.
    Mr. Mitchell. But it hasn't been working.
    Mr. Aument. You put out good performance standards and you 
try to make sure that people adhere to those.
    Mr. Mitchell. But it hasn't worked.
    Mr. Aument. Well, I don't know. I think that, for the most 
part, it has worked. We have had regional office directors who 
have been removed.
    Mr. Mitchell. Then why are there discrepancies that are so 
wide?
    Mr. Aument. It is more than just that, sir. There are many 
other reasons. You heard the Institute for Defense Analyses say 
it is not all something within our control. I mean there are 
differences in veteran populations. We can't control that.
    Mr. Mitchell. So we shouldn't expect any difference than 
what has been going on?
    Mr. Aument. I think you should expect difference. You 
should see a narrowing band of variation on the new work coming 
into the system. But to the extent that you are going to be 
calling us up every year and taking a look at everybody on the 
rolls and saying, ``what is the average annual compensation,'' 
that is not going to change measurably from year to year. The 
total population of veterans receiving compensation probably 
only changes by 5 percent each year.
    Mr. Mitchell. So we can expect Ohio to still be at the 
bottom?
    Mr. Aument. Well, if I look at where Ohio is for the work 
that we do----
    Mr. Mitchell. And New Mexico at the top.
    Mr. Aument [continuing]. In 2007 you will find that Ohio 
was number 37 for the work completed and the veterans added 
during 2007. But that is not going to change their position in 
the aggregate average that you are pointing to.
    Mr. Mitchell. Mr. Space?
    Ms. Brown-Waite. May I----
    Mr. Mitchell. Excuse me. Go ahead.
    Ms. Brown-Waite. One of the training components is the 
training for PTSD. And I understand it is a 30-hour training 
course. Is that correct?
    Mr. Aument. Yes. The second module is a 30- to 33-hour 
course. It is the time, including the testing, it would take 
the average rating specialist to go through the course.
    Ms. Brown-Waite. So how many raters have taken this 30-hour 
mandatory PTSD training?
    Mr. Aument. Very few to date. We just rolled this out in 
July of this year. We just completed the field testing. In the 
training plans that are coming in for the fiscal year that 
began October 1, we are going to require every rating 
specialist to complete that. That is going to be without 
exception. Every rating specialist will complete that in 2008.
    Ms. Brown-Waite. Do I understand you correctly that 
although we have been dealing with PTSD for this long that you 
just now have a training module or is this a new one?
    Mr. Aument. This is a new one. There had been a more basic 
training module that was in place before that was really an 
introduction for new raters. This new product is developed to 
apply to all rating specialists whether they be new or 
experienced rating specialists.
    Ms. Brown-Waite. When can we expect to have all of the 
raters trained on this 30-hour course?
    Mr. Aument. By the end of this fiscal year.
    Ms. Brown-Waite. And after they take the course, is there a 
test that is given?
    Mr. Aument. Yes. During the course of the package, I 
believe there are four modules of testing built into it, 
correct?
    Mr. Mayes. Yes. There are sample cases that are basically 
cases with fact patterns that an RVSR would see in the field. 
And so they go through these cases and apply the learning that 
they just had, going through the 33-hour module, and then they 
are tested on those fact patterns to see if they arrive at a 
consistent decision.
    Ms. Brown-Waite. So is there a right and a wrong answer? 
Sir, I don't think this is funny.
    Mr. Aument. No. I----
    Ms. Brown-Waite. I have too many veterans who have been 
screwed over by the VA for you to sit there. I was going to 
comment before about your laughing.
    Mr. Aument. I am sorry.
    Ms. Brown-Waite. It is very inappropriate.
    Mr. Aument. I duly apologize.
    Ms. Brown-Waite. And you owe every veteran in this great 
country of ours an apology.
    Mr. Aument. Let me answer that question. And I do 
apologize, ma'am. You are sensing my own frustration with a 
system that allows more than a single answer to that.
    First of all, there is a right and a wrong determination on 
the notion of service connection. That is a yes/no 
determination. And there is an absolutely right answer and an 
absolutely wrong answer.
    Now as to the rating, the evaluation that is applied to the 
case. Are they going to be rated zero percent, 10, 30, 50, 70, 
or 100? There can be more than one right answer to that. Two 
different raters may rate that case and one may rate it at 50 
percent and one may rate that at 70 percent. And there is not 
going to be an absolute answer to that question.
    That is one of the frustrations. And if you sense my 
reaction to your question, that was my frustration, 
Congresswoman. Because to me, is one of the shortcomings of the 
system that it permits more than a single answer on that.
    Ms. Brown-Waite. May I just ask a follow up question? Did 
you know this when you bought this module?
    Mr. Aument. Pardon?
    Ms. Brown-Waite. Did you know that----
    Mr. Aument. Yes.
    Ms. Brown-Waite. Did you know this when you bought the 
module?
    Mr. Aument. That is correct, yes.
    Ms. Brown-Waite. So we--how much did we spend for this?
    Mr. Aument. I don't know how much on this module, but the 
training would not have changed that particular outcome, 
Congresswoman.
    Ms. Brown-Waite. So we are still going to have 
inconsistencies even after the training for PTSD?
    Mr. Aument. That is correct.
    Ms. Brown-Waite. And is there a reason why it took so long? 
It is not like PTSD is something new that the VA is having to 
deal with. You have so many returning who returned from Vietnam 
who have PTSD. It just seems like it is almost too little too 
late.
    Mr. Aument. I don't know if it is--I think that you could 
build a strong case for that, Congresswoman. But I think that 
we have to tackle it sometime. If we have not tackled that 
sufficiently in the past, we have to remedy that problem.
    Mr. Mitchell. Congressman Space?
    Mr. Space. Thank you, Mr. Chairman. You know, it seems to 
me that I mean you are right in a sense that much of the rating 
determination boils down to a subjective judgment call. It is 
not entirely objective and it never will be. But it still 
troubles me that IDA, an organization contracted with by the 
VA, has clearly stated that up to 50 percent of the variation 
is attributable to something systemic within the system or the 
process.
    And I mean it simply doesn't cut it to say it is a 
subjective issue and we are doing everything we can. We have 
heard testimony from more than one source that most of these 
raters' educational process, training process occurs while on 
the job. You can give them 30 hours of training, you can give 
them 120 hours of training, you can give them 3 years of 
training. That is always going to be the case.
    We have heard testimony that these various regional offices 
have developed personalities of their own. We heard one 
gentleman testify that it is common knowledge. You can apply 
for PTSD disability rating in Ohio and expect 20 percent, and 
you can go to New Mexico and expect 100 percent.
    And it seems to me that there should be focus on attacking 
that deviation in personality. Figuring out a way to overcome 
it. I don't see these courses as doing that. I don't see the 
work that the VA is doing now as properly addressing the issue 
of culture and personalities that varies from regional office 
to regional office.
    And my question to you, Mr. Aument, are there any efforts 
underway, either now or preceding this analysis, that would 
address specifically the problems associated with this--I mean 
it is generational. It is just that if Cleveland has got a bad 
reputation today, they had a bad reputation among veterans 20 
years ago, and they are going to have a bad reputation 20 years 
from now because the raters who work now learned on the job 
from those who preceded them and they are going to be teaching 
the raters who are going to be rating in 20 years.
    Is there anything that is going to be done or that can be 
done to address that generational culture of personalities that 
is in practice and in reality affecting this variation?
    Mr. Aument. I think there are some things that we can do, 
Congressman. I believe that we have to set the tone, first of 
all, out of Washington philosophically as to what our 
expectations are and the approach that raters and anyone 
working in the regional office is going to be taking toward 
serving veterans.
    We have to make sure that, to the extent there are pockets 
among any of the offices that have built in biases, we do 
everything that we can to stamp that out. But one of the things 
that I would suggest, and it is not necessarily a universally 
popular answer to that question, one of the recommendations 
that IDA had mentioned was that it is going to be inherently 
difficult to ensure consistency when we are rating these cases 
in 57 different locations.
    If we want to become more consistent, one of the basic 
answers is to rate these cases in fewer locations.
    Mr. Space. I am not sure that is practical or feasible.
    Mr. Aument. Correct.
    Mr. Space. Do we contract out responsibility for rating?
    Mr. Aument. No, we do not. That is an inherently 
governmental function that cannot be contracted out.
    Mr. Space. And it is not your position that should be or 
that would serve as a possible solution?
    Mr. Aument. No. I can give you a parallel. I know in other 
government programs some of the front end work can be 
contracted out, some of the development activities. I know the 
State Department, for example, in doing some of their work in 
the visa program does some contracting of the development 
activities. But ultimately the decision that binds the country 
to this continuing liability and responsibility has to be made 
by a government employee.
    Mr. Space. Nothing further. Thank you, Mr. Aument. Thank 
you, Mr. Chairman.
    Mr. Mitchell. Are there any other questions?
    Thank you.
    Mr. Aument. Yes, sir.
    Mr. Mitchell. Thank you. I appreciate it. And this hearing 
is adjourned.
    [Whereupon, at 4:41 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

        Prepared Statement of Hon. Harry E. Mitchell, Chairman,
              Subcommittee on Oversight and Investigations
    Thank you all for coming today.
    For years, the Veterans' Benefits Administration has experienced 
problems maintaining adequate accuracy and consistency data within its 
ratings system. The purpose of this hearing is to evaluate what the VA 
is doing to fix these problems. Their ability to keep accurate records 
is essential to ensure the quality of veteran disability ratings, now 
and into the future.
    Let me first thank Congressman Space, who has quickly become a 
leader in working to address this issue. He and Ranking Member Brown-
Waite took the lead in assembling the first panel.
    The disability rating system has been an issue of serious concern 
since 2002, following an eye-opening GAO Report. In January of 2003, 
the GAO designated the VA's disability program as high risk. This 
designation resulted from concerns about consistency of decision making 
and accuracy of records.
    This Subcommittee is aware of the department's efforts to correct 
these issues, but more has to be done. I am concerned about the wide 
variations in average compensation per veteran and grant rates that 
persist between States.
    After years of recommendations by the GAO and the VA Inspector 
General, the VA has failed to collect and maintain an accurate 
database. That must change because our Nation's veterans cannot be 
forced to wait any longer.
    According to the VBA's Systematic Technical Accuracy Review, or 
STAR, accuracy of regional office decisions vary from 76 percent in 
Boston to 96 percent at the Fort Harrison regional office. This 
variation is troubling. More troubling is that STAR only looks at 
accuracy, and completely ignores consistency of decisions.
    The VA has implemented a new data system called the Rating Board 
Automation 2000. This system collects more information, but it 
continues to set road blocks for analyzing claim denials for 
disabilities like Post Traumatic Stress Disorder and Traumatic Brain 
Injury.
    PTSD and TBI are complicated and often misdiagnosed disabilities. 
Because of their nature, rating a veteran with these disabilities is 
somewhat subjective.
    We understand there are variances between States in claims 
decisions, and it is to be expected. But the subjective nature of the 
ratings process does not do our veterans justice.
    We are sending the wrong message to our Nation's veterans. We are 
saying that even though you served courageously for your country, you 
better live in the right State and hire a professional when filing for 
disability benefits.
    This is unacceptable. Just last week we heard from the Veterans' 
Disability Commission on the necessity to provide equitable treatment 
for all veterans. But this is not the case today.
    Aside from maintaining accurate records, we need to make sure that 
claims officers nationwide receive the same training. This training 
must be focused on the intricacies of each disability imposed on any 
veteran, young and old.
    I know that we can work together in a bipartisan way with the VA to 
ensure that our veterans get the best and most fair benefits available.

                                 
   Prepared Statement of Hon. Ginny Brown-Waite, Ranking Republican 
          Member, Subcommittee on Oversight and Investigations
    Thank you Mr. Chairman.
    The Institute for Defense Analyses (IDA) recently issued their 
final report in March 2007 on their analysis of differences in 
Disability Compensation in the Department of Veterans Affairs (VA).
    This report was completed at the VA's request to identify and 
collect data on compensation recipients.
    According to this study, the VA must do three things:

    1.  put forth a national effort of consistency of claims 
processing,
    2.  make certain that raters receive consistent training on a 
national basis, and,
    3.  collect and maintain valid data to analyze national statistics 
and trends.

    I am interested in hearing from Mr. Aument on how the VBA plans to 
implement these recommendations.
    It is apparent that VBA must take steps to improve training and 
modernize its ratings system.
    Whether a veteran's claim is rated at the St. Petersburg VA 
Regional Office, or the Phoenix VA Regional Office, the same standard 
must be applied when making a rating decision on the claim.
    I would like to bring to your attention a bill I have cosponsored 
with my colleague, Mr. Lamborn, H.R. 3047, the Veterans Claims 
Processing Innovation Act of 2007.
    This legislation would improve the veterans' claims processing 
system at VA by changing the work credit system for VA.
    To do this, the measure establishes a fully electronic system pilot 
to streamline the claims process.
    H.R. 3047 also requires the VA to have an independent organization 
certify the effectiveness of VBA's training programs, and allow family 
members of veterans who have passed away to continue the original claim 
instead of forcing the dependents to start the claims filing over.
    I hope that this legislation will pass the Committee before the end 
of this Congress, and will be considered on the House floor.
    I look forward to hearing more from our witnesses today, and yield 
back the balance of my time.

                                 
 Prepared Statement of John J. ``JJ'' Kenney, USMC (Ret.), Homosassa, 
                                  FL,
               Veteran Service Officer, Citrus County, FL
    Good afternoon Mr. Chairman and members of the committee. I'd like 
to thank the committee for the invitation to speak this afternoon about 
some of the disparities in the awarding of benefits from state to 
state. Also I would like to express, in front of her peers, my sincere 
appreciation to Congresswoman Ginny Brown-Waite for her efforts on 
behalf of the veterans of Citrus County. Thank you Congresswoman.
    I would like the Committee to know that I am not here today to 
knock the VA. We in the state of Florida enjoy a relationship with our 
one (1) and only VA Regional Office in St. Petersburg. Many of my 
fellow service officers in other states only wish they had the working 
relationship with their ROs. If I have a problem I can pick up the 
phone and talk directly with the Service Center Manger and the heads of 
any of the departments at the RO if necessary. And when they say they 
will get back to you they do!
    There has been and continues to be a disparity in the awarding of 
benefits from state to state. One wonders how this could be possible 
since all fifty (50) plus regional offices are guided by the same 
regulations the 38 CFR and the M21 Manual. One, 38 CFR, provides the 
necessary information with regards to the ethical conduct in the 
adjudication of veteran's claims along with how and when information 
about veterans should be handled. Additionally, the 38 CFR provides the 
various information required with regards to diagnostic codes for 
different illnesses and injuries along with the percentages to be 
awarded for severity of the disability. The M21 Manual is basically a 
Standard Operating Procedure. What do I do to get from point a, the 
receipt of a claim, to point b, the decision. It would appear a 
relatively simple task of reviewing the evidence supplied by the 
veterans, reviewing Service Medical Records, for in service occurrence, 
verify character of service, determine from medical evidence if 
condition is chronic in nature or if the disease or illness is 
presumptive. Presumptive meaning that the veteran has filed within one 
(1) of separation or the disability is a result of exposure to some 
environmental hazard or i.e., Agent Orange, Radiation or was a Prisoner 
of War.
    There are several elements that are not being considered and they 
include the human element, the veteran population and the inventory of 
the various VA Regional Offices.
    The human element is in every decision the VA renders, however, it 
differs from state to state. I know that the training received by VA 
personnel is superb and to the best of my knowledge, standardized. So 
why the disparity in awards? I'd like to provide the Committee with a 
couple examples.
    Example 1--The veteran, we'll call him Mr. Smith, resides in 
California. He entered the Armed Forces in mid 1960s. At boot camp the 
veteran received inoculations with the air guns. In the late 1990s 
early 2000s he is diagnosed with Hepatitis C. He had not used drugs, 
had no tattoos and had not engaged in any improper conduct. He applied 
for Service Connection based on the use of the air guns providing 
medical evidence that supported his claim. He was awarded service 
connection. Veteran number 2, we'll call him Mr. Jones, resides in 
Florida and entered the service approximately the same time as Mr. 
Smith. He too received inoculations with the air gun. Again, around the 
same time as Mr. Smith Mr. Jones was diagnosed with Hepatitis C. He 
initially thought it may have been the result of a surgery he'd 
undergone at the VA. Thinking he'd received blood during the surgery he 
applied for compensation thinking the blood was tainted. Upon receipt 
of the claim the VA located the surgical notes that indicated Mr. Jones 
had not received any blood products and denied his claim. In discussion 
with the veteran again ruling out drugs, improper behavior or tattoos 
it came down to the air gun. The veteran again applied for compensation 
based on the air gun providing some of the very same information Mr. 
Smith did in his claim. Additionally, he found a medic who was 
administering shots the same time as Mr. Jones was at boot camp. The 
medic verified the method the air gun was used and this supported the 
medical evidence that was submitted by both Mr. Smith and Mr. Jones. 
Mr. Jones claim was again denied and it is being appealed. Mr. Jones 
will die before his appeal is complete.
    Example 2--The veteran, we'll call him Mr. Toms, resides in New 
Jersey. He spent over twenty years in aviation. Almost twenty years 
after retirement he applied to the VA for service connection for a 
hearing loss and tinnitus. He provided medical evidence of his hearing 
loss and listed the types of acoustical trauma he was exposed to which 
included several tours in Vietnam as a door gunner. His claim moved 
through the system and he was subsequently granted service connection. 
Our next veteran, we'll call him Mr. Wilson, resides in Florida. He too 
spent over twenty years in aviation. Fourteen years after his 
retirement he applied for service connected disability for several 
conditions included hearing loss and tinnitus. He provided the VA with 
medical evidence of the hearing loss and his service medical records at 
retirement supported a hearing loss. He too provided information on the 
types of acoustical trauma he was exposed to including several tours in 
Vietnam serving as a door gunner also. The claim was denied and is in 
appeal.
    It is apparent to me that the VSR, that human element, played a 
significant role in all these claims. How to remove this factor in the 
claims process is, in my opinion, almost impossible. Continued training 
is the best bet in reducing this factor in the claims process.
    In discussing the state veteran population and regional office 
inventory one has only to look at three (3) states and see where the 
problem is. California has a veteran population of 2,310,968 million, 
the largest, and has three (3) regional offices. Florida has a veteran 
population of 1,788,496 million and has one (1) regional office. Texas 
has a veteran population 1,681,748 million and has two (2) regional 
offices. Looking at the numbers is it any wonder there is a disparity 
in decisions. The key word in rating decisions is production. It's sad 
but the truth that VSR's are graded on their production so it's no 
wonder given the size of inventory and the number of regional offices 
that there will be disparities in decisions. I submit to the committee 
that the VA should conduct a study similar to the CARES Commission to 
accurately identify by state either additional regional office 
requirement and/or reallocation of regional office areas of 
responsible.
    One last item before I close and that will affect the claims 
process is the age of our VSR's. A significant amount are about my age 
and looking to retirement in the next couple of years. Now is the time 
for the VA to establish a plan for recruitment of the replacements of 
these VSR's. If we don't plan for it now I can assure you that the 
disparities in the claims process will escalate.
    Again I'd like to thank the committee for the invitation to speak 
and also your efforts on behalf of our Nation's veterans.

            Respectfully submitted
                                                        J.J. Kenney

                                 
     Prepared Statement of Ray Pryor, USN (Ret.), Chillicothe, OH,
                on behalf of American Veterans (AMVETS)
    Mr. Chairman and Members of the Subcommittee:
    Thank you for providing AMVETS (American Veterans) the opportunity 
to testify regarding the issue of disability claims ratings and 
benefits disparities within the Veterans' Benefits Administration.
    This hearing is very important in as it addresses an issue that 
continues to plague the Veterans' Benefits Administration (VBA) and 
leaves veterans frustrated and suspicious of the system that is in 
place to support them after their service to our Nation. In examining 
the factors that have led to the disparities in claims ratings, two 
large over-lying conditions are present that have allowed the gaps in 
ratings to exist and several circumstances have occurred which have 
exacerbated the problem.
    First and foremost, we are working with a system that is based on 
humans making decisions. Their perceptions, understandings of 
conditions, and occasional mistakes are going to play a role in 
disparities. If this was the only issue then the disparities would not 
be regionally based they would be proportionally distributed throughout 
VBA. However, there is evidence that displays disparities between 
Regional Offices. AMVETS believes these disparities are caused by two 
separate but related groups within the claims process: (a) the Veteran 
Service Representative (VSR), the Rating Veteran Service Representative 
(RVSR) the Decision Review Officer (DRO) on the rating side; and (b) 
the Compensation and Pension Doctors (C&P) whose evaluation of a 
veteran is used by the regional offices to decide a claim.
    The reason these two groups have such a great influence on the 
outcome of the veterans claims and why there are regional disparities 
is due to the personalities of the doctors, the raters and review 
officers, and the personalities of the Regional Offices as a whole. 
These regional personalities develop because new raters and DROs are 
trained by the region, and styles and common terms and language are 
used by the raters when filing a claim. Terminology such as ``full 
range of motion'' compared to ``essentially full range of motion'' 
could change a rating by 10 percent. Likewise, physician's perceptions 
and similar language usage can alter a claim. Veteran Service Officers 
(VSO) will state they routinely see Compensation and Pension Exams 
which will describe the patient with cookie cutter language leaving 
room for subjective interpretation.
    In addition to these personalities that determine compensation on 
similar if not identical claims with a broad range of outcomes is the 
backlog of claims that are in the VBA and the performance credit system 
that monitors the number of claims filed by the raters and DROs. 
Currently, there is no oversight of the quality of work the DROs 
perform. As identified by the AMVETS sponsored ``National Symposium for 
the Needs of Young Veterans,'' DROs are evaluated on the number of 
claims they submit, but there is no distinction between positives and 
negatives in the performance evaluation. There is only a requirement to 
process a certain number of claims and they receive credit for all 
claims they move forward, regardless of the number of that are 
overturned or remanded. The backlog has increased the challenge to push 
more claims through, but because of the need to push them through, 
incomplete and poorly written claims are routinely submitted and 
remanded cycling the claim through the system a second or third time, 
exacerbating the systems backlog.
    AMVETS suggests three recommendations which will assist in 
narrowing the disparities in claims and reduce the backlog. First, a 
centralized training facility that will be tasked with teaching new 
raters and DROs in a standardized outlined process in filing and 
reviewing claims. This will remove much of the regional personality 
that affects the disparity in the claims at the rater/reviewer level. 
Secondly, there needs to be improved oversight of both the rater/
reviewer and the C&P doctors. In regard to the C&P, oversight should be 
in place to ensure the examiner's guide is being utilized. This could 
be done through a ``whistle blower'' program that will allow veterans 
to feel safe in identifying C&Ps who are misdiagnosing claimants, or 
any other mechanism that could track validity of physical exams. 
Oversight could be improved in the rating and review of claims also. A 
system needs to be developed that will not only ensure claims are being 
filed, but that claims are being filed properly and completely. H.R. 
3047 makes efforts to improve the credit received system under which 
the DROs and RVSRs currently work. This legislation would not credit a 
regional office for a claim until the expiration of the appellate 
period. This system or a system that monitors the ratio of cases 
remanded or overturned to the total number of cares referred is 
essential in improving the claims process. Lastly, understanding this 
is a two- to three-year process, hiring more staff to reduce the burden 
of the backlog is critical. There is no single, simple solution to the 
disparity problem, but identifying the roots of the problem and tasking 
VA with finding solutions to these problems is critical if improvements 
are going to be recognized in the claims system.
    Mr. Chairman, this concludes my testimony.

                                 
  Prepared Statement of David E. Hunter, Ph.D., Research Staff Member,
  Cost Analysis and Research Division, Institute for Defense Analyses
    Institute for Defense Analyses Study on Analysis of Differences in 
Disability Compensation in the Department of Veterans Affairs
    Mr. Chairman and Members of the Subcommittee, I am pleased to come 
before you today to discuss IDA's work on disability compensation 
conducted for the Department of Veterans Affairs (VA). Let me begin 
with some background on the study and then I will summarize findings 
and recommendations.
I. Introduction
    A total of 2.6 million veterans were receiving disability 
compensation as of September 2005. The average yearly award for the 
entire United States was $8,890, and the average varied across states 
from more than $12,000 in New Mexico to less than $8,000 in Ohio.
    In addition, the percentage of veterans receiving compensation 
differed from state to state. Nationwide, 10.8 percent of veterans were 
receiving compensation, and this varied from nearly 18 percent in 
Alaska to about 7 percent in Illinois.
    In May 2005, the VA asked the Institute for Defense Analyses (IDA) 
to conduct a study of the major sources of the observed variation 
across states in:

    1.  The average payments to veterans receiving disability 
compensation; and
    2.  The percentage of veterans receiving disability compensation.

    My testimony today will be based on the results of that study, 
which have been documented in IDA Paper P-4175.
    There are two potential reasons for the observed state-to-state 
variations in average awards. First, there may be systematic 
differences across states in the claim adjudication process. Second, 
the variation may reflect differences across states in the 
characteristics of the veteran populations.
    Our study quantified the amount of variation attributable to states 
having veteran populations with different characteristics. To do this, 
we identified and collected relevant data on disability compensation 
recipients and the veteran population and used these data to test a 
wide variety of hypotheses. We used data as of September 2005 as the 
baseline for our analysis. To identify historical trends, we also 
examined available historical data.
II. Impact of Maximum Awards
    Payments to veterans are based on overall disability level, from 0 
percent to 100 percent in increments of 10 percent. In addition, 
veterans may receive an award of Individual Unemployability (IU), which 
pays them the equivalent of 100 percent disability.
    We found that the percentage of recipients receiving a maximum 
award (100 percent or IU) explains the vast majority of the observed 
state-to-state variation in average compensation. We calculated that 94 
percent of the variation was explained solely by differences across 
states in the percentage of compensation recipients receiving a maximum 
award.
    This result reflects two underlying facts. First, although veterans 
receiving maximum awards make up a small percentage (17 percent) of all 
compensation recipients, they receive the majority (58 percent) of the 
total compensation dollars. Second, there is variability across states 
in the percentage of compensation recipients receiving maximum awards, 
ranging from a low of 10 percent in Alaska to a high of 30 percent in 
New Mexico.
    For the maximum awards, we found the IU awards exhibited the 
greatest variability across states and alone accounted for 75 percent 
of the observed variation in average awards. The percentage of 
compensation recipients receiving IU per state ranges from a low of 3 
percent in Maryland to a high of nearly 20 percent in New Mexico.
    Given these findings, the key issue our study had to address was: 
To what extent do the state-by-state variations in maximum awards 
reflect different treatment of similar veterans and to what extent can 
they be explained by differences across states in the veteran 
populations?
III. Demographic and Claim-Specific Factors
    We tested a wide variety of demographic and claim-specific factors 
to identify those that influence the award outcomes. We identified 
three major factors that contribute to the observed variation across 
states in average disability compensation awards.

    1.  Post Traumatic Stress Disorder (PTSD). We found that all states 
have high average awards for veterans with PTSD. However, there are 
large differences across states in the proportion of compensation 
recipients with a PTSD award. This difference in the percentage of 
recipients with a PTSD award accounts for 40 percent of the observed 
variation in average awards across states.
    2.  Power of Attorney (POA) representation. Nationwide, veterans 
with POA representation receive an average annual award of over twice 
that of veterans with no POA representation. We found that differences 
across states in the percentage of claims with POA account for 16 
percent of the variation in average award across states.
    3.  Period of service. The average award for Vietnam veterans is 
$11,670--the highest for any period of service. As a single predictive 
factor, differences across states in the period of service of 
recipients accounts for 8 percent of the observed variation in average 
awards.

    We calculated the combined effect of the three main factors that we 
identified: PTSD, power of attorney, and period of service. Note that 
these factors are correlated, and we could not simply add the 
percentage of variation explained by each single factor to calculate 
their combined explanatory power. Taking account of the correlations, 
we found that 50 percent of the variation across states is explained by 
these three factors.
    Using a more detail model that included several demographic factors 
related to the veteran's county of residence, which proved to correlate 
with average awards, we found that as much as 70 percent of the 
variation across states is due to differences in the recipient 
populations. While these observed correlations are of interest, it is 
important to be careful in interpreting them; they almost certainly do 
not reflect direct causal relationships.
IV. Variation in the Percentage of Veterans Receiving Compensation
    Our second area of study was the sources of differences in the 
percentage of veterans receiving compensation.
    Two top-level factors influence the percentage of veterans 
receiving compensation. These factors are application rates and 
adjudication results. Of these two factors, we found application rates 
to be more important than adjudication results in explaining variation 
across states. Using available data over the past 10 years, we 
calculated that differences in application rates explained over 70 
percent of the variation in the percentage of veterans receiving 
compensation.
    We also tested a wide variety of demographic factors to identify 
those that influence the percentage of veterans receiving compensation. 
We found that military retirees are over four times as likely to 
receive compensation as non-retirees. This alone accounts for over 40 
percent of the variation across states. The percentage of veterans 
receiving compensation also varies by period of service. We calculated 
that differences in state veteran populations by period of service 
account for 12 percent of the variation across states. Unfortunately, 
available veteran population data and demographic information on all 
applicants are insufficient to quantify the total variation accounted 
for by the combination of these demographic factors.
V. The Adjudication Process
    As noted above, we found that state-to-state differences in 
compensation recipients explain 50 percent to 70 percent of the 
variation in average awards. This implies that as much as 30 percent to 
50 percent of the variation in average awards could be due to 
differences across states in the adjudication process. We examined the 
VA's adjudication process and found that most rating decisions are made 
locally and often call for subjective judgments. We also found that 
initial and ongoing rater training varies by regional office and has 
changed over time. On-the-job training and mentoring, an important 
source of rater education, promotes uniformity within a regional 
office. The current national quality review program (STAR) focuses on 
accuracy of individual claims and does not attempt to promote 
consistency. There is no program to monitor trends in ratings across 
regional offices aimed at improving understanding of regional 
differences. For these reasons, the current adjudication process has 
the potential for allowing regional differences to develop and persist.
VI. Recommendations
    Based on our findings and observations, the IDA report presented 
six recommendations for consideration by the VA.
  1. Standardize initial and ongoing training for rating specialists.
    The VA should consider preparing a set of test cases as part of 
ongoing training procedures.
  2. Standardize the medical evaluation reporting process.
    Many raters identified variation in quality of medical reports as a 
possible cause of variation in awards and stated that poor quality 
reporting hinders their ability to make an accurate rating decision.
  3. Increase oversight and review of rating decisions.
    The VA could strategically select a more significant fraction of 
rating decisions for review. This selection process should target 
claims with high leverage and evaluate each on service connection, 
degree of disability, and IU status determination.
  4. Consolidate rating activities to a central location.
    Consolidation would remove many of the underlying differences 
across regional offices that contribute to potential inconsistencies in 
decisions. Realizing that this may not be feasible, we note that 
consolidation to fewer regional offices or having regional offices 
specialize for certain claim types would also improve consistency.
  5. Develop and implement metrics to monitor consistency in 
        adjudication results.
    These metrics would target the key factors that impact the 
variations in average awards and the percentage of veterans receiving 
compensation.
  6. Improve and expand data collection and retention.
    The ability to monitor variances is currently limited by lack of 
available data. Most notably, the VA has not historically tracked data 
on denied claims. Such data are needed to further understand the 
underlying reasons for differences across states in the composition of 
claim recipients. For instance, data do not exist to show how much the 
denied claims contribute to differences across states in the mix of 
compensation recipients.
    Mr. Chairman and Members of the Subcommittee, that concludes my 
statement, and I am available for questions.

                                 
    Prepared Statement of Jon A. Wooditch, Deputy Inspector General,
    Office of Inspector General, U.S. Department of Veterans Affairs
INTRODUCTION
    Mr. Chairman and Members of the Subcommittee, I am pleased to be 
here to address the Office of Inspector General's (OIG) report, Review 
of State Variances in VA Disability Compensation Payments, issued May 
19, 2005. Today, I will summarize the report and our subsequent 
activity relating to the report, and provide observations on the 
remaining actions needed to reduce unacceptable variances in average 
annual disability compensation payments. With me is Joseph Vallowe, 
Deputy Assistant Inspector General for Management and Administration, 
who can answer questions about implementation of OIG recommendations 
and our work since the report was issued.
THE OIG REPORT
    Our review confirmed that variances in average annual disability 
compensation payments by state have existed for decades. In trying to 
understand why these variances exist, we identified and assessed more 
than 20 possible factors. Based on our assessment, we discovered that 
some of the factors contributing to differences in average payments by 
state, such as the veteran's period and branch of service, number of 
dependents, and disabling conditions, are not within the Veterans 
Benefits Administration's (VBA) control. Since these factors are not 
within VBA's control and all veterans are not identical, we concluded 
that some level of variance across states is expected.
    On the other hand, we also discovered that some of the factors that 
impact average payments are within VBA's control, such as disability 
rating decisions. To better understand the impact of rating decisions 
on the variance, we analyzed claims data for fiscal year (FY) 2004, and 
concluded that much of the information needed to make these decisions 
is subject to varying degrees of interpretation and judgment, by both 
veterans when providing information on their medical condition and VBA 
claims adjudicators when assessing this information for rating 
purposes. We also determined that the degree of rater subjectivity can 
be influenced by differences in the way medical examination results are 
presented, by vague criteria set forth in the Rating Schedule for some 
disabling conditions, and by the amount of training and rater 
experience. In short, subjectivity can lead to inconsistencies in 
rating decisions, which can influence variances in average annual 
disability compensation payments nationwide. As such, the issue is not 
whether a variance exists but whether the magnitude of the variance is 
acceptable.
    Our report included eight recommendations aimed at improving 
consistency in rating decisions in order to reduce unacceptable 
variances. VBA has taken acceptable action to implement those 
recommendations. In particular, our report recommended that VBA conduct 
a scientifically sound study of the major influences on compensation 
payments in order to develop data and metrics for monitoring and 
managing variances. The December 2006 Institute for Defense Analyses 
(IDA) report conducted as a result of this recommendation confirmed our 
review findings and made meaningful recommendations to assist VBA in 
understanding and reducing unacceptable variances.
    Other key actions taken by VBA in response to our recommendations 
include:

      Coordinating with the Veterans' Disability Benefits 
Commission to discuss issues pertaining to revising and clarifying the 
Rating Schedule.
      Forming the Consistency Analysis Study Group, which 
provided a plan to identify, analyze, and rectify inconsistencies in 
disability evaluations.
      Deploying 57 standardized medical examination templates 
that are used to submit examination results to VBA for rating 
decisions.
      Hiring 1,100 additional benefits processing staff and 
providing additional standardized training for rating decision makers.
      Enhancing outreach efforts by mailing 325,000 letters to 
veterans in the six states with the lowest average disability 
compensation payment in FY 2004, advising them of steps to follow if 
they want to reopen their disability claim.

OIG ANALYSIS OF CURRENT STATUS AND REMAINING ACTIONS
    In preparation for this hearing, we obtained updated information on 
average annual disability compensation payments, reviewed the IDA 
report, and updated our information on VBA activities since our report 
was issued with the purpose of identifying what remains to be done to 
improve rating consistency and reduce unacceptable variances.
    In our 2005 report, we indicated that the variance in average 
annual disability compensation payments between the highest and lowest 
states was $5,043 in FY 2004. We recently obtained compensation payment 
data by state for FYs 2005 and 2006. Because VBA is in the process of 
migrating disability benefit claims data from the Benefits Delivery 
Network system to the VETSNET system, we were unable to obtain complete 
data for FY 2007. The variance was $5,061 for FY 2005 and $5,105 for FY 
2006. While the trend in variances continues to increase, it is doing 
so at a much lower rate than in the previous 5 years, which averaged 
$332 a year. We also discovered that one reason for this decline can be 
attributed to more consistent ratings for new claims. In fact, the 
national variance in new claims declined from $6,054 in FY 2004 to 
$4,477 in FY 2006. This was directly attributed to an increase in 
average payment by the lowest state and a decrease in average payment 
by the highest state.
    While some progress has been made, VBA remains challenged to 
improve the consistency of rating decisions. To achieve this, we 
believe further efforts are needed in monitoring and measuring 
variations in rating decisions by state and VBA regional offices. In 
particular, we recommend that VBA review claims folders for particular 
diagnostic codes or body systems where ratings fall outside the 
expected variance range to determine whether the rating is justified or 
explained by unacceptable causes, such as incorrect or subjective 
application of the standards. VBA should incorporate what it learns 
from these reviews to improve rating consistency nationwide. This 
approach is consistent with the plan submitted by the Consistency 
Analysis Study Group and with IDA's recommendations.
    In response to our 2007 Major Management Challenges, VBA stated 
that it conducted a pilot project to monitor the consistency of 
decision making for rating-related claims and conducted a consistency 
review focusing on evaluations of Post Traumatic Stress Disorder (PTSD) 
claims from a regional office identified as a statistical outlier. VBA 
also developed a plan to expand its Systematic Technical Accuracy 
Review (STAR) quality assurance program to enable increased sampling, 
expanded rating data analysis, and focused disability decision reviews. 
During FY 2008, VBA plans to begin quarterly monitoring of rating 
decisions by diagnostic code, complete the 2007 pilot by conducting 
consistency reviews focused on Individual Unemployability claims from a 
statistical outlier regional office, and increase staff to accomplish 
additional STAR reviews.
    Our report also identified the Rating Schedule as a contributing 
factor to the subjectivity associated with the disability rating 
process. The Veterans' Disability Benefits Commission was charged with 
evaluating the Rating Schedule and making recommendations for changing 
or updating it. We defer to the Commission's recommendations, but would 
like to point out that effectively dealing with the issue of 
inconsistency in disability ratings cannot entirely occur until the 
subjectivity inherent in the Rating Schedule is addressed.
CONCLUSION
    In closing, we strongly encourage VBA to continue its efforts 
toward identifying and reducing unacceptable variances. Implementation 
of VBA's Consistency Analysis Study Group plan and IDA's 
recommendations will assist VBA in improving the consistency of ratings 
decisions. While VBA has made some progress, further efforts are needed 
to monitor and measure variations in award decisions by state. 
Unacceptable variations should be thoroughly evaluated to include in-
depth reviews of individual claims that deviate from expected norms. 
Information obtained from these reviews should be used to improve 
consistency in rating decisions nationwide. Expansion of the 
responsibilities and staff of the STAR quality assurance program will 
also be important to achieving greater consistency in rating decisions.
    Mr. Chairman, that concludes my remarks and thank you once again 
for the opportunity to discuss this important issue. Mr. Vallowe and I 
would be pleased to answer any questions.

                                 
                Prepared Statement of Ronald R. Aument,
 Deputy Under Secretary for Benefits, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs
    Mr. Chairman and members of the Subcommittee, it is my pleasure to 
be here to discuss the Veterans Benefits Administration's (VBA) 
response to the Institute for Defense Analyses' (IDA) Analysis of 
Differences in Disability Compensation in the Department of Veterans 
Affairs. I am pleased to be accompanied by Mr. Bradley G. Mayes, VBA's 
Director of the Compensation and Pension Service. Today I will discuss 
the various initiatives underway within VBA that support the 
recommendations put forth by IDA to improve the quality and consistency 
of the disability claims processing.
Background
    In December 2004, media reports identified differences in average 
disability compensation payments across states. In response, the 
Secretary of VA requested the Office of Inspector General (OIG) to 
conduct a review of disability payments. OIG examined benefit payment 
data for the six states with the lowest average payments and the six 
with the highest average payments to determine the factors that 
contributed to the differences. OIG's report concluded that the 
factors, to include demographics, were complicated and intertwined, and 
intertwined, and recommended that VA pursue a scientific study to 
further understand the influences on disability compensation payments.
    In May 2005, the Department of Veterans Affairs contracted with the 
Institute for Defense Analyses to better understand the potential 
causes of the differences in disability payments. The IDA study was 
structured to determine if a significant correlation to one or more 
variables could be identified that contribute to the variance.
Findings from IDA Study
    IDA identified several major factors that individually contribute 
to the observed variation in average compensation. These factors 
include:

     Distribution of veterans with ratings of 100%;
     Types of disabilities (including PTSD and other mental 
disabilities);
     County of residence;
     Median family income;
     Percent of the population with physical or mental 
disability;
     Population density;
     Representation by power of attorney; and
     Period of service.

    Other key drivers include application rates, which influence the 
percentage of the veteran population receiving disability benefits, and 
the percentage of beneficiaries that are military retirees.
    It is important to understand that the average payments being 
compared in the IDA study cover all veterans currently receiving VA 
disability compensation benefits, and that the decisions that awarded 
these benefits have been made over a period of more than fifty years. 
The average payment for compensation recipients is therefore not 
necessarily reflective of the experience of veterans currently applying 
for disability compensation benefits. In order to assess differences in 
VA benefits currently being awarded to recently separated veterans, VA 
also looks at average payments to veterans who are added to VA's 
disability compensation rolls during the year.
    Based on the study results, IDA made six recommendations aimed at 
critical aspects of the adjudication process they found most likely to 
affect the consistency of claims determinations. The recommendations 
are:

     Standardize initial and on-going training for rating 
specialists
     Standardize the hospital evaluation reporting process
     Increase oversight and review of rating decisions
     Consider consolidating all or selected parts of the rating 
process into
     one location
     Develop and implement metrics to monitor consistency in 
adjudication
     results
     Improve and expand data capture and retention
VBA Response to IDA Recommendations
    I will respond to each recommendation in turn and discuss how VBA 
is working to achieve the intended outcomes of that recommendation.

    Standardize initial and on-going training for rating specialists

    Critical to improving claims accuracy and consistency is ensuring 
that our employees receive the essential guidance, materials, and tools 
to meet the ever-changing and increasingly complex demands of their 
decision-making responsibilities. To that end, VBA has deployed new 
training tools and centralized training programs that support accurate 
and consistent decision-making.
    New hires receive comprehensive training and a consistent 
foundation in claims processing principles through a national 
centralized training program called "Challenge." After the initial 
centralized training, employees follow a national standardized training 
curriculum (full lesson plans, handouts, student guides, instructor 
guides, and slides for classroom instruction) available to all regional 
offices. Standardized computer-based tools have been developed for 
training decision-makers (71 courses completed and an additional 5 in 
development). Training letters and satellite broadcasts on the proper 
approach to rating complex issues are provided to the field stations. 
In addition, a mandatory cycle of training for all Veterans Service 
Center employees has been developed consisting of an 80-hour annual 
curriculum.
    VBA already has in place a skills-certification process for veteran 
service representatives, and we are developing a skills-certification 
process for rating specialists. Additionally, we have increased our 
Systematic Technical Accuracy Review (STAR) staff and tasked it with 
more oversight visits of our regional offices and greater 
responsibilities for training our decisionmakers.

         Standardize the hospital evaluation reporting process

    VA has made significant progress in our efforts to standardize the 
medical evaluation process. VA's Compensation and Pension Examination 
Program (CPEP) continues to improve the examination process through the 
use of templates, quality reports, and examiner certification.
    To date CPEP has developed 58 computerized examination templates 
based on associated worksheets that cover a variety of body systems and 
disabilities. The templates guide the examiner through specific 
examination types to ensure pertinent information is obtained and 
included in the examination report. The templates have been deployed to 
all VA medical care sites where Compensation and Pension Service (C&P) 
examinations are conducted.
    A critical component of the C&P examination process is the 
examination request generated by VBA and submitted to the Veterans 
Health Administration (VHA). Examination requests must properly 
identify the specific examinations to be conducted and provide accurate 
explanations for any medical opinions that are required. To ensure the 
quality of these requests, CPEP staff review a sampling of examination 
requests from all regional offices on a monthly basis.
    The compensation and pension disability examination is often a key 
component of the VBA disability determination process. To ensure the 
quality of these reports, CPEP conducts a monthly review of a sampling 
of completed exams generated by the Veterans Health Administration 
(VHA) medical facilities. VHA instituted a performance measure on the 
quality of C&P examinations in 2004. CPEP quality reviews are used to 
calculate this performance metric. Contract examinations are subject to 
internal quality reviews that parallel the CPEP process.
    In FY 2008, through CPEP, VHA will implement an examiner 
certification program for all examiners performing compensation and 
pension disability examinations. The examiners themselves are expected 
to undergo specified computerized training modules relevant to C&P 
examinations and be certified to perform these disability examinations.
    Our CPEP initiatives are instrumental to achieving our quality 
goals. VBA and VHA continue to work together to develop and refine 
tools that will ensure even greater consistency in the hospital 
disability evaluation reporting process.

           Increase oversight and review of rating decisions

    To ensure accurate benefit decisions, VBA has established an 
aggressive and comprehensive program of quality assurance and oversight 
to assess compliance with VBA claims processing policy and procedures 
and assure consistent application.
    The Systematic Technical Accuracy Review (STAR) program includes 
review of work in three areas: rating accuracy, authorization accuracy, 
and fiduciary program accuracy. Overall station accuracy averages for 
these three areas are included in each regional office director's 
performance standards and the station's performance measures. STAR 
results are readily available to facilitate analysis and to allow for 
the delivery of targeted training at the regional office level. C&P 
Service conducts satellite broadcast training sessions based on an 
analysis of national STAR error trends. Over the last 4 years, our 
quality has risen significantly from 81 percent to 89 percent.
    Site surveys of regional offices address compliance with 
procedures, both from a management perspective in the operation of the 
service center and from a program administration perspective, with 
particular emphasis on current consistency issues. Training is 
provided, when appropriate, to address gaps identified as part of the 
site survey.

   Consider consolidating all or part of the rating process into one 
                                location

    The consolidation of specialized processing operations for certain 
types of claims has been implemented to provide better and more 
consistent decisions. Three Pension Maintenance Centers were 
established to consolidate the complex and labor-intensive work 
involved in ensuring the continued eligibility and appropriateness of 
benefit amounts for pension recipients. We are exploring centralization 
of all pension adjudications in these Centers.
    In November 2001, a Tiger Team was established at the Cleveland 
Regional Office to adjudicate the claims of veterans age 70 and older. 
VBA also established an Appeals Management Center to consolidate 
expertise in processing remands from the Board of Veterans' Appeals. In 
a similar manner, a centralized Casualty Assistance Unit was 
established to process all in-service death claims. VBA also 
established two Development Centers in Phoenix and Roanoke to assist 
regional offices in obtaining the required evidence and preparing cases 
for decision, and centralized the processing of all radiation claims to 
the Jackson Regional Office.
    The Benefits Delivery at Discharge (BDD) Program provides 
servicemembers with briefings on VA benefits, assistance with 
completing applications, and a disability examination before leaving 
service. The goal of this program is to deliver benefits within 60 days 
following discharge. VBA has consolidated the rating aspects of our BDD 
program to two rating sites, which will bring greater consistency of 
decisions on claims filed by newly separated veterans.
    We continue to look for ways to achieve additional organizational 
efficiencies through the consolidation of other aspects of our claims 
processing, including death benefits, fiduciary activities, and 
telephone service.

 Develop and implement metrics to monitor consistency in adjudication 
                                results

    In addition to conducting quality reviews, C&P Service's STAR staff 
are beginning to conduct analyses to identify unusual patterns of 
variance in claims adjudication by diagnostic code, and then review 
selected disabilities to assess the level of decision consistency among 
and between regional offices. These studies are used to identify where 
additional guidance and training are needed to improve consistency and 
accuracy, as well as to drive procedural or regulatory changes.

            Improve and expand data collection and retention

    VBA's data management systems have been substantially improved in 
recent years with such programs as the VETSNET suite of applications 
and the establishment of our data warehouse. VETSNET and the analytical 
tools in our data warehouse provide our employees and managers with 
more robust data, which better support information management and 
analysis.
    Mr. Chairman, this concludes my testimony. I would be pleased to 
answer any questions you or other members of the Committee may have.

                                 
             Statement of Steve Smithson, Deputy Director,
    Veterans Affairs and Rehabilitation Commission, American Legion
    Mr. Chairman and Members of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
views on disability claims ratings and benefits disparities within the 
Department of Veterans Affairs (VA) Veterans Benefits Administration 
(VBA). The American Legion commends the Subcommittee for holding a 
hearing to discuss this important and timely issue.
May 2005 VA Office of the Inspector General Report
    In response to a December 2004 Chicago Sun-Times article revealing 
disparities in VA disability compensation payments on a state-by-state 
basis, the Secretary of VA ordered the VA Office of the Inspector 
General (VAOIG) to investigate the matter. On May 19, 2005, the VAOIG 
issued a report addressing the reasons for differences in average 
monthly VA disability compensation made to veterans living in different 
states.
    The VAOIG noted that for fiscal year (FY) 2004, average annual 
payments by state ranged from $6,961 to $12,000, a difference of over 
$5,000. According to the VAOIG the highest paying states were: New 
Mexico (the highest), Maine, Arkansas, West Virginia, Oklahoma, and 
Oregon. The lowest paying states were: Indiana, Michigan, Connecticut, 
Ohio, New Jersey, and Illinois. The VAOIG concluded that no single 
variable factor was responsible for the discrepancies in compensation 
payments.
    The VAOIG found that there were sixteen possible factors that could 
cause compensation payment disparities. In its analysis, the VAOIG 
concluded that there were ten factors that the VA could not control and 
there were six factors over which the VA could exert some control.
    According to the VAOIG, the factors that the VA cannot control are: 
power of attorney representation, enlisted versus officer, military 
retirees versus non-military retirees, participation of veterans 
receiving benefits, period of service, branch of service, dependents, 
special monthly compensation, age, and the average number of 
disabilities. The six factors that the VAOIG indicated the VA has some 
control over are: pending claims, brokered claims, appeal rates, 
transferred cases, grant rates, and rater experience.
    Finally, the VAOIG stated that some disabilities are inherently 
more susceptible to variations in rating determinations. The VAOIG 
indicated that the Rating Schedule (38 C.F.R. Part 4), because it is a 
60-year-old model, may also cause some inconsistencies. The VAOIG 
identified post traumatic stress disorder (PTSD) evaluations, total 
disability based on PTSD (including individual unemployability or IU), 
and all veterans rated with IU as rating decisions susceptible to 
variations.
    The VAOIG focused on mental disabilities because of several 
reasons: mental disabilities have a high variable rate (compared to the 
other parts of the body systems evaluated by the Rating Schedule); 
mental disabilities have the highest average evaluation (58 percent); 
and PTSD, which is a mental disability, is one of the fastest growing 
service-connected disabilities.
    The VAOIG reviewed 2,100 PTSD cases at seven regional offices (RO). 
They found that the ROs approach stressor verification requirements 
differently from state to state. In particular, there were differences 
in how the ROs verified veterans' allegations about traumatic events in 
service. The VAOIG also found that, in general, once veterans with PTSD 
obtain a 100 percent evaluation their receipt of mental health 
treatment declined.
    The VAOIG noted that there were several instances of benefits fraud 
in the past few years. It was stressed that based on an income match, 
8,486 veterans in receipt of IU benefits reported earned income to the 
Internal Revenue Service (IRS). The VAOIG indicated that some or all of 
the 8,486 veterans in receipt of IU benefits and in receipt of earned 
income, may not be entitled to IU benefits.
    The VAOIG also surveyed 1,992 rating specialists and Decision 
Review Officers (DROs) and 1,349 responded. The relevant results 
indicate:

      65 percent stated they did not have enough time to 
provide timely and quality service;
      57 percent indicated that they had difficulty meeting 
production standards if they took time to adequately develop claims and 
thoroughly reviewed the evidence before making a decision;
      41 percent declared that 30 percent or more of the claims 
they decided were not ready to rate when presented for rating;
      20 percent estimated that of the claims not ready to rate 
more than 10 percent were actually rated without all the needed 
information; and
      52 percent responded that they could assign two or more 
different ratings for the same medical condition.

    The May 2005 VAOIG report contained the following recommendations:

    1.  Conduct a study to detect and correct unacceptable payment 
patterns.
    2.  Work with the Veterans' Disability Benefits Commission to 
clarify and revise the rating schedule.
    3.  Conduct Review of rating practices for certain disabilities 
such as PTSD and IU.
    4.  Expand national VA quality review to include review of PTSD 
evaluations for consistency, and to determine if the stressor was fully 
documented.
    5.  Coordinate with the Veterans Health Administration to improve 
the quality of medical examinations.
    6.  Ensure that VA regional offices are adequately staffed and 
equipped.
    7.  Consider establishing a lump-sum payment option in lieu of 
recurring monthly payments for veterans with disability evaluations of 
20 percent or less.
    8.  Analyze differences in claim submission patterns to determine 
if certain veteran sub-populations, such as World War II veterans or 
veterans living in certain areas, have been underserved and perform 
outreach based on the results of the analysis.

    For years, The American Legion and other veterans service 
organizations (VSOs) have stated that the driving force behind most VA 
adjudications is the need for VA to process as many claims as possible 
in the fastest possible time. This emphasis on quantity and speed of 
adjudication results in premature adjudications, improper denials of 
benefits, and of course, inconsistent decisions.
    The VAOIG report confirms much of what we have been saying about 
the VA claims adjudication process. Essentially, the VAOIG acknowledges 
that because the VA often does not take the time to obtain all relevant 
evidence and information, there is a good chance that these claims are 
not properly adjudicated. The VAOIG, to its credit, quoted raters and 
DROs who indicated that VA management is much more concerned with 
quantity than quality. Some VA adjudicators stated that awards and 
bonuses are centered around production. The report, however, did not 
mention that in most claims where the VA does not obtain all relevant 
information, the claim is denied or under evaluated.
    The overall tone of the VAOIG report was disappointing. It implied 
that where the VA fails to develop claims properly, there are only 
improper grants of benefits. The VAOIG ignored the fact that many 
deserving veterans have their claims denied or under evaluated because 
the VA, in a rush to claim work credit, failed to, or refused to, 
comply with the duties to assist and notify. Although the VAOIG 
conceded that VA often makes errors, it failed to consider or discuss 
whether these errors could result in the unlawful denial of benefits or 
the under evaluation of service-connected disabilities.
    This negative tone exists throughout the VAOIG report. For example, 
when discussing the differences between adjudications in New Mexico and 
Illinois, the VAOIG noted that New Mexico had the highest average 
monthly VA disability compensation payments at $11,206. The VAOIG 
indicated that the high New Mexico payments ``may be a cause for 
concern.'' The VAOIG, however, did not express any concern about the 
low paying ROs. Apparently, the possibility that some veterans may be 
underpaid or unfairly denied did not alarm the VAOIG.
    The VAOIG also attacked the current rating schedule as ``a 1945 
model that does not reflect modern concepts of disability'' even though 
most of the major body systems have been updated in the last 20 years. 
Also, it did not define the term ``modern concepts of disability'' and 
did not explain why the current rating schedule would cause 
inconsistent payments.
    According to the VAOIG, whether a veteran was represented by a VSO 
was the single most important factor in determining the amount of 
compensation payments made to that veteran. The VAOIG reported that on 
the average, veterans who are represented by a VSO, receive $6,225 more 
per year than those veterans without representatives. This is a telling 
statistic. VA operates a disability benefits program that is required 
to be non-adversarial and ex parte. (See 38 C.F.R. Sec. 3.103(a).) The 
huge disparity between non-represented veterans and represented 
veterans supports the conclusion that VA's claims adjudication system 
is more adversarial than VA cares to admit.
    Additionally, the VAOIG report appears to assume that the states 
with high levels of compensation payments are doing something wrong. 
The VAOIG apparently did not consider that the states paying a high 
level of benefits are making correct legal decisions--doing a better 
job than the states with low levels of payments. The American Legion 
asserts that it is quite possible that some, if not all, ROs are 
incorrectly denying a considerable number of claims for compensation 
and under-evaluating some service-connected conditions. We believe 
there are more veterans being unfairly denied benefits and underpaid 
benefits than there are veterans who are being unfairly granted 
benefits and/or overpaid benefits.
    This conclusion is based on the following fact. In the past few 
years The American Legion has jointly reviewed the quality of 
adjudications in approximately 40 ROs. Our quality review team has 
found errors in all of the VA offices reviewed, including the regional 
office in New Mexico. For example, the review of the VA regional office 
in New Mexico generated the following comments.
    Some of the New Mexico rating decisions reviewed by The American 
Legion team exhibited lack of knowledge or carelessness. For example:

      In some instances the RO incorrectly denied service 
connection for a congenital disease because the RO misinterpreted 38 
C.F.R. Sec. 4.9.
      In some instances the Global Assessment of Functioning 
(GAF) score was ignored.
      The effective dates assigned for individual 
unemployability (IU) created problems. According to an RO official, the 
RO assigned an effective date from the receipt of the VAF 21-8940--
instead of the date of the informal claim for IU. The official stated 
this was a recurrent problem in this RO.
      Some VA examinations were inadequate.
      Some ratings concerning claims for increase should have, 
but did not, consider 38 C.F.R. Sec. 3.400(o)(2).
      Some inferred issues were either missed or ignored.
      The rules concerning new and material evidence were not 
correctly applied. In some instances, special monthly pension (SMP) was 
not correctly considered or improperly rejected.
      In some cases, the RO issued confusing and misleading 
development and notice letters.
      In some instances the RO failed to clarify the appellate 
process to veterans who clearly were confused.

    Many of the types of errors identified in New Mexico were similar 
to the errors that we found in low paying ROs like Chicago. If the New 
Mexico RO, the highest paying office according to the VAOIG, exhibited 
these underpayment and improper denial problems, it is possible that 
all VA ROs under-compensate some claimants to various degrees. The 
VAOIG never considered this possibility. In fact, all ROs reviewed by 
The American Legion's quality review team exhibited patterns of 
improper denial and underpayment. Of course, some ROs exhibited much 
better quality than other ROs.
    Also, in FY 2007 the Board of Veterans' Appeals (BVA or Board) 
remanded or reversed 56 percent of the appeals it reviewed. It is very 
unlikely that any of those remands or reversals involved overpayments 
of benefits or the improper grant of service connection. The BVA 
reversal/remand rate reveals that ROs commit many errors adverse to 
veterans.
    In spite of the inescapable fact that there is a serious quality 
problem within the ROs that unfairly deprives many deserving veterans 
of VA benefits, the VAOIG did not mention or even allude to this 
situation. This omission is a disservice to veterans and casts doubt on 
most of the VAOIG conclusions.
Institute for Defense Analyses (IDA) Report
    In response to the VAOIG's recommendation, VA contracted IDA to 
conduct a study in order to gain a better understanding of the 
potential causes of the variances in disability payments.
    The IDA offered six recommendations for improving the consistency 
of VBA's claims adjudication process:

      Standardize initial and on-going training for rating 
specialists.
      Standardize the hospital evaluation reporting process.
      Increase oversight and review of rating decisions.
      Consider consolidating all or selected parts of the 
rating process into one location.
      Develop and implement metrics to monitor consistency in 
adjudication results.
      Improve and expand data capture and retention.

    The American Legion agrees with IDA's recommendation to increase 
VBA oversight and review of RO rating decisions. We also note that this 
recommendation specifically stated that denied claims should also be 
reviewed, something the VAOIG did not consider in its investigation and 
subsequent report.
    Regarding its training recommendation, IDA noted that although VBA 
provides centralized training modules for training purposes, many 
regional offices supplement this training with material developed 
locally. IDA also noted that many rating specialists interviewed stated 
that they received ``on-the-job'' training from senior raters and 
identified these individuals as the biggest influence on their rating 
styles. IDA suggested that a ``stronger mechanism'' would reduce the 
potential for persistent differences among regional offices in ratings 
and ensure that raters VA wide are receiving the same training. IDA 
further recommended that raters be given standardized test cases, 
reflecting the most likely areas of variation, as part of an ongoing 
training process.
    The American Legion is appreciative of the importance the Under 
Secretary for Benefits has placed on training of VBA personnel. We are 
also aware of the centralized training program that has been 
implemented; however, a national training standard/requirement, in 
addition to the centralized training conducted by Compensation and 
Pension Service (C&P), for regional office personnel is also needed. 
Consistent and standardized training at each regional office must take 
place for all personnel--experienced and new hires alike. The American 
Legion believes it is crucial that such a program be implemented and 
closely monitored for compliance by the Under Secretary for Benefits. 
Management in stations not in compliance with such training 
requirements must be held accountable; otherwise any national or 
centralized training effort will not be successful.
    Additionally, The American Legion also believes it is essential to 
proper training that information (reasons for remand or reversal) from 
BVA decisions, Court of Appeals for Veteran Claims decisions, DRO 
decisions and errors noted in the National Systematic Technical 
Accuracy Review (STAR) be tracked and examined for patterns. This 
information should then be analyzed by VBA and provided to ROs in 
mandatory formal training to ensure that common errors and other 
discrepancies occurring in regional office rating decisions are not 
repeated. This information should also be used for remedial training 
purposes when patterns of errors are identified for specific 
individuals. Although such data is currently being collected and 
disseminated to the ROs, it appears that consistent utilization of this 
data in regular formalized and specific training has been lacking. 
Unless ROs (both managers and individual adjudicators) learn from their 
mistakes and take corrective action, there will continue to be a high 
rate of improperly adjudicated claims, resulting in a consistently high 
appeals rate and subsequent high BVA remand/reversal rate of RO 
decisions.
    In addition to our training-related concerns discussed above, we 
also have concerns regarding VA's skill certification testing program 
to ensure competency and proficiency. C&P conducted an open book 
(pilot) job skill certification test for veterans service 
representatives (VSR) several years ago in which the pass rate was 
extremely low (approximately 23 percent). Even more alarming than the 
low-test scores was the fact that those who took the test had several 
years of experience in the position and were considered to be 
proficient.
    C&P subsequently finalized its VSR proficiency test and conducted 
tests in May and August 2006. Employees participating in the testing 
underwent 20 hours of training prior to taking the test. Although the 
pass rate (about 42 percent) for these tests was much higher than the 
pilot test, it is still very low and can hardly be considered 
acceptable. C&P did not conduct any tests in FY 2007.
    The American Legion applauds the new testing program as a step in 
the right direction, but we still have concerns. Although successful 
completion of the test will be required for promotion or assignment to 
a rating board, it is not mandatory as a condition of employment in 
that position and is completely optional. C&P is in the process of 
developing a test for rating veterans service representatives (RVSR) 
and DROs, but a timeline for completion or implementation has not yet 
been determined. Unfortunately, like the VSR test, the test for RVSRs 
and DROs will not be mandatory as a condition of employment.
    The ultimate goal of proficiency or competency testing should be to 
ensure that an individual in any given position is competent, 
proficient, and otherwise qualified to perform the duties required of 
that position. This goal will not be achieved if testing is not 
mandatory, or is not provided for all levels or for all positions, and 
remedial training or other corrective action is not required for those 
who do not successfully pass the test. Although this concept may not be 
embraced by some, the ultimate goal is to have qualified and competent 
staff who will provide the best service possible for America's 
veterans.
    Lastly, The American Legion opposes IDA's recommendation supporting 
rating consolidation. It is likely that some VA managers also like the 
idea of consolidation because of the economic advantage to the VA. It 
is cheaper to have 10 or 16 offices than to pay for 57 regional 
offices. However, in our experience, many of the bigger VA offices have 
more quality problems than the smaller ROs. The American Legion quality 
reviews reveal that the fact that raters and DROs are under the same 
roof does not mean they will all rate claims consistently. Also, 
consolidation, especially consolidation in low cost of living rural 
areas, would hamper access to the VA regional offices for many 
veterans, especially low income and minority veterans. Obviously, that 
is not a good thing.
Closing
    In closing, The American Legion recommends increased oversight by 
VBA as well as more frequent transferring of RO service center managers 
in order to create a ``national'' culture to avoid regional differences 
and biases. We also recommend the establishment of an independent 
quality review program with accountability built in for managers and 
adjudicators. Additionally, until substantive changes are made in the 
work measurement system, a piecemeal ``band-aid'' approach will not 
make a major difference. The creation of a work measurement system that 
rewards prompt, but fair and complete adjudications would improve 
consistency and quality. Such changes would be the fastest, least 
expensive way to make the biggest positive impact on the VA's claims 
adjudication system.
    Mr. Chairman, that concludes my statement. The American Legion 
welcomes the opportunity to work closely with you and your colleagues 
on this and any other issue that concerns this nation's veterans.

                                 
     Statement of Donald R. Lanthorn, Department Service Director,
                  American Legion, Department of Ohio
    Mr. Chairman, members of the Committee. My name is Donald R. 
Lanthorn. I am the Service Director of The Ohio American Legion, a 
position I have held for 30 years. I appreciate the opportunity to 
provide my personal perspective as to why Ohio is last among the fifty 
states in VA benefit dollars received per compensated claimant.
    The issue, in my opinion, is multi-faceted and quite complex, with 
origins back to World War II in some areas. If the purpose is to lay 
blame, there is plenty to go around. I will address fault on the part 
of the Department of Veterans Affairs, and both VBA and VHA; the State 
of Ohio; County Veterans Service Officers, their Commissioners and the 
State Associations of both; and Veterans Service Organizations are not 
without culpability.
    However, fault may not be as much of an issue as one may surmise, 
and in the May 19, 2005 ``Review of State Variances in VA Disability 
Compensation Payments'' report of the Department of Veterans Affairs, 
Office of the Inspector General it is noted, in referring to the dollar 
averages of the clusters of the six highest and lowest ranked states, 
that ``Preliminarily, this suggests that the high cluster may be more 
problematic than the lower ranked states.''
    There are several factors in determining compensation received by 
Ohio Veterans that are the fault of no one.
    The IG Report analyzed states by high and low clusters of six 
states each. Ohio is in the low cluster with Indiana, Michigan, 
Connecticut, New Jersey, and Illinois. New Mexico, Maine, Arkansas, 
West Virginia, Oklahoma, and Oregon comprised the high cluster states.
    It was noted in the DVA IG Report of May 19, 2005 that demographics 
play a part in the disparity.
    Average military officer VA compensation is less than that of the 
average of enlisted personnel; hence states with more officers serving 
in the military would likely reduce their average VA compensation. 
(High cluster states have 63.4% enlisted personnel receiving VA 
compensation to an average of 44.4% in the low cluster states.)
    Military retirees receive more compensation than their non-military 
retired peers. (Eleven percent more retirees receiving compensation, 
27.6% to 16.6%, among high cluster states.)
    Period of Service is a factor in computing average compensation. 
Vietnam service veterans receive higher amounts, followed by Korean 
War, World War II and Peacetime veterans. Gulf War veterans receive 
less VA compensation on average than other periods of service. The 
numbers of veterans from each state and percentage of veteran 
population make this a no fault demographic statistic factor. (High 
cluster, 13% WWII; low cluster averages 23%.)
    Further analysis by Branch of Service indicates that Marine Corps 
veterans receive the highest average amount of VA compensation.
    Veterans with dependents receive a higher average amount of VA 
compensation per year than their peers without dependents. (High 
cluster averaged 43.8% to low cluster of 30.3% of veterans with 
dependents.)
    Age of recipients is a factor. The average age of the high cluster 
states recipient was 58 compared to 61 in the low cluster. This 
suggests younger veterans receive more compensation, but may more 
closely relate to periods of service, indicating fewer WWII or higher 
numbers of Vietnam veterans, by percentage, among VA compensation 
recipients in the high cluster states.
    The more service-connected disabilities a veteran has results in 
higher VA combined ratings for compensation. There is a correlation 
between the high and low clusters of 3.0 to 2.4, respectively, a 25 
percent difference.
    The above fact is especially significant if one accepts the premise 
that those veterans that file their own claims file for fewer 
disabilities than those who file with a veteran service organization 
(VSO) or have advocacy representation. It is generally accepted that 
VSOs recognize secondary conditions the veteran may not, and review the 
service medical records, a more accurate list of possible service 
connected conditions than the veterans' recollection. Hence, this 
supports the facts of the IG report that veterans who receive legal 
help or aid from advocacy groups receive on average $11,162 compared 
with $4,728 for those who go it alone. The National average is two-
thirds receive VSO assistance, however, reportedly forty percent of 
Ohioans file their own claims. This is a factor that can and should be 
addressed and will result in increased federal dollars for Ohio 
claimants, on an average.
    The Institute for Defense Analyses (IDA) final report is a 
scientific study of state-by-state and VA Regional Office variation in 
disability compensation claims, ratings and benefits. We certainly 
concur with their findings that 100 percent and Individual 
Unemployability (IU) are the most significant factors affecting total 
payments. Although they represent only 17% of compensation recipients, 
they represent 58% of total compensation payments. IU and often a 100% 
disability rating can be subjective. These differences alone reportedly 
were found to explain the vast majority of the variation in average 
awards across states.
    It is also our opinion that ``new'' or less experienced 
adjudication personnel would be less likely to make subjective 
decisions awarding the highest of compensation benefits. We will 
address this further later in this testimony.
    In another area of the IDA study it was noted that military 
retirees are over four times as likely to receive compensation as non-
retirees.
    Ohio has only one major military installation and a notable lack of 
state incentives for retaining military retirees in Ohio may account 
for a considerable number of benefit dollars, as the IDA study 
attributes military retirees alone for over 40 percent of the variation 
in the percentage of veterans receiving compensation.
    The IDA study identifies the ``key driver'' in the variation across 
states of veterans receiving compensation as the ``application rates.''
    Several studies, including the IDA report addressed consistency 
across VA Regional Offices and the potential for inconsistencies. We 
concur with the VA position that if VA addresses accuracy in the 
decision making process, consistency will take care of itself. We do 
support the recommendation of standardized initial and ongoing training 
for rating specialists.
    The IDA report recommends standardized hospital evaluation 
reporting. For several years The Ohio American Legion would return 
files to the adjudication officers at Cleveland VARO as ``insufficient 
examination'' for PTSD exams where the Global Assessment of 
Functionality (GAF) score did not match the doctor's list of 
symptomology. Rating specialists would use the lesser of the two if we 
did not, resulting in less VA compensation. We often wondered what 
happened to those claims without advocates to which we did not have 
access.
    In recent years we send back far fewer for new exams. Have the 
exams gotten better? Are the doctors more thorough? We doubt it.
    We suspect when a claimant has representation that may find an exam 
suspect the adjudicator gives the examiner an opportunity to ``fix 
it.'' Few doctors would remember the patient well enough to add 
symptomology to their first report. It is our belief that they adjust 
the GAF score to be consistent with the earlier reported symptomology, 
which was insufficient to justify the assigned score. This would result 
in lower compensation ratings.
    We earlier alluded that Ohio's rating specialists are ``new'' or 
``less experienced.'' As a historical perspective, in 1945 VA ``geared 
up'' to handle the wave of incoming World War II claims to be received 
from returning veterans now offered education benefits, home loan 
guarantees, and disability benefits, much as a result of the GI Bill. 
The class of '45 was born.
    Thirty years later in 1975, as these employees were completing 
their federal service they were replaced with another wave of 
personnel, many of whom were Vietnam veterans themselves. Again, VA 
``geared up'' to address the needs of this group of returning veterans.
    What is different in Ohio in 2005 as the ``Class of '75'' finished 
their 30 years of federal service?
    In 2005 VA was in the midst of a 2004-2006 hiring freeze. Key 
adjudicative positions went unfilled in some instances, filled with 
lower level employees in others. VA was also experiencing being the 
victim of their own failed hiring practices of earlier years when 
efforts were made to hire attorneys and nurses, which they were unable 
to retain.
    In Cleveland, Ohio VA created a ``Tiger Team,'' a force of senior 
adjudicators formed by Central Office directive to address the older 
claims of aged veterans. They developed processing Memorandums of 
Understanding with other government agencies and excel at handling the 
claims of our World War II veterans and those claims over a year old 
from around the country.
    As beneficial to the Nation as it is, the Tiger Team represents a 
significant brain drain in Cleveland's adjudication ranks.
    If the driving factor is the number of claims in determining state 
rank, Ohio is lacking a single, consistent message to veterans 
regarding the claims process. Each County Veterans Service Commission 
and Veterans Service Organization operates independently and within 
their own budget constraints. Few counties do any outreach and since 
their funding is from the inside mileage, there is little incentive 
from county officials to urge greater expenditures in promoting their 
offices, as one of their services is financial assistance to veterans 
and their dependents and survivors.
    County Veterans Service Officers and County Veteran Service 
Commissioners now receive their training from the Governor's Office of 
Veterans Affairs, which utilizes VA personnel at no cost. Several years 
ago VSOs provided the training, which emphasized advocacy tips. VA 
training may be fine for most areas of service, but we liken it to 
learning how to duck hunt from a duck. It should not be the lone source 
of trainers.
    Many CVSOs recognize the need for other sources of training in 
their desire for professional excellence and belong to the National 
Association of County Veteran Service Officers. However, their training 
sessions are often held in resort areas and participation restricted by 
their employers, members of the Ohio State Association of County 
Veterans Service Commissioners. VSCs receive all of their required 
training in Ohio and unfairly expect the same of their CVSO employees.
    Veterans Service Organizations (VSOs) have long been a source of 
outreach to veterans with local Posts, State Service Officers, house 
organs at the local and state levels, the distribution of pamphlets and 
benefit information.
    This changed in Ohio as the state's appropriations to VSOs were of 
slow growth, then flat lined for several of the recent years. VSO 
appropriations are given the misnomer of ``subsidy,'' leading one to 
believe that the State of Ohio is subsidizing VSO operations, when in 
fact, VSOs are subsidizing a state function in Ohio where we have no 
Department of Veterans Affairs to file claims and provide claimants 
representation.
    The flat lined revenue from the State of Ohio came at a most 
inopportune time, for The American Legion, as World War II veteran 
deaths were on the rise followed by membership declines and subsequent 
lost revenue. Publications were cut back or curtailed, employees in our 
Service Division were eliminated by attrition and wages and benefits 
suffered for those remaining. The American Legion Service Division, 
once 15 full-time employees, is now 10.5 Full-Time Employee Equivalents 
(FTEE).
    Clerical personnel have been replaced by claims representatives 
using computers to do their own letters, reports, and ``status 
updates'' to inquiring claimants. An increasing VA backlog causes 
increasing status inquiries, and the spiral goes on. Time spent filing 
claims and providing advocacy representation is often now directed to 
other matters. Outreach is no longer a goal, as increasing the workload 
is not an objective of an over burdened, underpaid staff. Meeting 
deadlines has become the area of emphasis.
    In conclusion, Ohio's woes can be addressed quite simply. Although 
the variances in demographics may never put Ohio at the top of the list 
of benefits by state, our problem areas can be resolved by the infusion 
of federal and state dollars.
    VBA needs to increase its adjudication staff and attract some 
experienced adjudicators to Cleveland that may be effective now, not 
following extensive training. Making the ``Tiger Team'' an advancement 
desirable to adjudicators around the country in salary, benefits and 
workload would go a long way in attracting bidding on vacancies from 
outside of Cleveland.
    VHA exams need to be thorough, and complete, and re-done, if not. 
VAs work measurement system of ``End Products'' rewards ROs for work 
reported, not accuracy or correctness. This is a situation that needs 
addressed, but is not unique to Ohio.
    The State of Ohio needs to centralize its veterans programs in one 
department, an Ohio Department of Veterans Affairs (ODVA), which 
Governor Strickland, by Executive Order created a Veterans Study 
Council to investigate and report to him by year's end.
    The Veterans Study Council is addressing the issue of a comparison 
of benefits available in other states to Ohio. As noted in the IDA 
report, attracting military retirees back to their roots, into Ohio or 
retaining those separating from military service as a last duty station 
will raise the compensation average significantly.
    Increased appropriations to VSOs will go a long way in serving 
veterans. The marketing and outreach by CVSOs or an ODVA would be a 
wasted effort if VSOs were not prepared at their link in the chain to 
provide needed services.
    The Ohio State Associations of County Veterans Service Officers and 
Commissioners (OSACVSO & OSACVSC) receive a state appropriation for 
training. It can be well spent on trainers from beyond VA ranks or 
sending CVSOs to VSO training programs or the NACVSO schools.
    VSOs need to prepare for increased workloads. The Ohio American 
Legion is addressing salaries and staffing levels as well as we can 
with available resources. Post Service Officers continue to train to 
identify potential beneficiaries of VA benefits and get them to claims 
filing professionals, most often their CVSO.
    Ohio has the infrastructure for excellent service to veterans, but 
its loose knit organization has not served it well during trying 
economic times.
    Piecemeal legislative efforts by well meaning legislators need to 
be coordinated under a Department of Veterans Affairs and directed into 
one omnibus legislative bill to correct Ohio's problem areas.
    Thank you for this opportunity to present my perspective on Ohio's 
needed answer to trailing other states in average compensation benefits 
per veteran.

                                 
                  Statement of Hon. Charles A. Wilson,
          a Representative in Congress from the State of Ohio
    Chairman Mitchell, thank you for providing me the opportunity to 
participate in today's hearing on this important topic. While I was 
prevented from attending the hearing in person because of a recent 
surgery, I am very grateful for the committee's attention to the 
discrepancies among states in average benefits paid to disabled 
veterans.
    Like many members of this subcommittee, I was disturbed to learn 
that the level of benefits paid to a disabled veteran seems to depend 
in part on the state in which that veteran resides. While some 
variation may be expected, the discrepancy seems too large to be 
explained fully by natural or demographic factors.
    I am convinced that the federal employees responsible for 
determining a veteran's level of disability are dedicated public 
servants who keep at heart the interests of the veterans they serve. 
Despite this, it seems likely that different Veterans Administration 
Regional Offices have developed unique cultures that have an effect on 
the level of benefits that they award. I believe that this is an 
unacceptable state of affairs, and is not fair to veterans who have the 
right to expect that their claims will be decided impartially and 
according to statute.
    As a representative from Ohio, I was dismayed to learn that my 
state ranked dead last in the average benefit paid to its disabled 
veterans. Ohio veterans, who have made the same sacrifices as veterans 
from every other state, may feel that the system is slanted against 
them. I do not believe that the Veterans Administration can afford to 
allow this situation to breed cynicism among the veterans who have 
sacrificed so much for this nation.
    While the Veterans Administration has taken some steps to correct 
this situation, I believe that more aggressive action should be taken. 
I commend Chairman Mitchell and Ranking Member Brown-Waite for calling 
this hearing to bring some much-needed attention and oversight to 
efforts to level the playing field for veterans in every state. I would 
also like to thank Congressman Space for his active leadership on this 
issue. I thank the distinguished witnesses for their testimony, and 
look forward to working to solve this problem as quickly as possible.

                                 

                                     Committee on Veterans' Affairs
                       Subcommittee on Oversight and Investigations
                                                    Washington, DC.
                                                   November 2, 2007

Honorable Gordon H. Mansfield
Acting Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Secretary Mansfield:

    On Tuesday, October 16, 2007, the Subcommittee on Oversight and 
Investigations of the House Committee on Veterans' Affairs held a 
hearing entitled Disability Claims Ratings and Benefits Disparities 
within the Veterans Benefits Administration.
    During the hearing, the Subcommittee heard testimony from Ronald R. 
Aument, Deputy Under Secretary for Benefits, Veterans Benefits 
Administration, U.S. Department of Veterans Affairs. He was accompanied 
by Mr. Bradley G. Mayes, Director, Compensation and Pension Service, 
Veterans Benefits Administration, U.S. Department of Veterans Affairs. 
As a follow-up to that hearing, the Subcommittee is requesting that the 
following questions be answered for the record:

    1.  Please explain the Institute of Defense Analyses' (IDA) finding 
regarding attorney representation. The Subcommittee is concerned that 
the findings indicate that if veterans hire attorneys, veterans will 
derive a more favorable outcome for their claims. Does the VA's agree 
with this impression? If not, please give your reasons.
    2.  Has the VA ever outsourced claims for purposes of adjudication? 
If so, please state when this occurred, the number of claims so 
outsourced, the reason for the outsourcing, and the oversight controls 
VA implemented to assure the consistency and accuracy of the outsourced 
adjudications.
    3.  Please describe how VA is implementing IDA's training 
recommendations. Please address specifically how VA's training efforts 
differ from those in the past and provide details about that training; 
for example, title and brief description of training courses; whether 
the training is mandatory or not; personnel required to take a 
particular training module; whether the training includes a testing 
requirement to ensure that trainees have assimilated the materials.
    4.  Are VBA personnel who adjudicate claims required to have 
professional or other certification? If not, please explain why 
certification is not required and whether VBA plans to require 
certification in the future. If certification is required, please 
describe the required certification, how VBA ensures that its personnel 
have the necessary certification(s), and the consequences to VBA 
personnel who do not obtain required certifications.
    5.  With respect to the STAR reviews that are conducted each year, 
how many STAR reviews are taking place, and what are the outcomes of 
each of the reviews?
    6.  The IG, GAO, and IDA have all noted that VBA has tested for 
accuracy of claims adjudication but not for consistency across offices. 
What is VBA doing to remedy this defect?
    7.  If the Veterans Benefits Administration is unable to get 
information relating to a service member's in-theatre service directly 
from the Department of Defense to verify stressors contributing to 
PTSD, what alternate sources are being used to verify stressors when 
validating a claim in the ratings process?

    We request you provide responses to the Subcommittee no later than 
close of business on Friday, November 30, 2007.
    If you have any questions concerning these questions, please 
contact Subcommittee on Oversight and Investigations Staff Director, 
Geoffrey Bestor, Esq., at (202) 225-3569 or the Subcommittee Republican 
Staff Director, Arthur Wu, at (202) 225-3527.

            Sincerely,
                                                  HARRY E. MITCHELL
                                                           Chairman

                                                  GINNY BROWN-WAITE
                                          Ranking Republican Member

                                 
                        Questions for the Record
                    Hon. Harry E. Mitchell, Chairman
              Ginny Brown-Waite, Ranking Republican Member
              Subcommittee on Oversight and Investigations
                  House Committee on Veterans' Affairs
                            October 16, 2007
    ``Disability Claims Ratings and Benefits Disparities within the 
                   Veterans Benefit Administration''
    Question 1: Please explain the Institute of Defense Analyses' (IDA) 
findings regarding attorney representation. The Subcommittee is 
concerned that the findings indicate that if veterans hire attorneys, 
veterans will derive a more favorable outcome for their claims. Does 
the VA agree with this impression? If not, please give your reasons.

    Response: The IDA study contained no findings specific to 
disability claims outcomes for veterans represented by attorneys. What 
it did find was that claimants who were represented by attorneys, 
veterans service organizations, and claims agents received, on average, 
higher compensation payments than those without representation. IDA's 
comparison was between veterans with any representation (i.e. national 
and state veterans service organizations, attorneys, and agents) and 
claimants without such assistance. The Department of Veterans Affairs 
(VA) does not agree with the position that veterans with attorney 
representation will have greater prospects for a successful claim. The 
overwhelming majority of beneficiaries are capably represented by 
national and State veterans service organizations that perform their 
services without charge. Currently, paid attorneys and agents represent 
a very small percent of claimants, although we expect that percent to 
rise based on the legislation enacted last year to allow attorney 
representation at the notice-of-disagreement stage in the adjudicative 
process.
    The claims process can be complex. We believe that claimants may 
find it helpful to seek the assistance of a national or State service 
organization, which provide their services free of charge, or 
individuals recognized by VA to provide such assistance. We routinely 
provide claimants with information about representation. We believe 
that the free services of national and State veterans service 
organizations provide the level of counsel needed in virtually all 
cases.

    Question 2: Has the VA ever outsourced claims for purposes of 
adjudication? If so, please state when this occurred, the number of 
claims so outsourced, the reason for the outsourcing, and the oversight 
controls VA implemented to assure the consistency and accuracy of the 
outsourced adjudications.

    Response: The Veterans Benefits Administration (VBA) has never 
contracted with any non-government entity to adjudicate claims for VA 
disability compensation benefits.

    Question 3: Please describe how VA is implementing IDA's training 
recommendations. Please address specifically how VA's training efforts 
differ from those in the past and provide details about that training; 
for example, title and brief description of training courses; whether 
the training is mandatory or not; personnel required to take a 
particular training module; whether the training includes a testing 
requirement to ensure that trainees have assimilated the materials.

    Response: IDA recommended VA standardize initial and ongoing 
training for rating specialists. VBA has a standardized training 
curriculum for all rating veterans service representatives (RVSRs). All 
new RVSRs are required to attend 3 weeks of national, centralized 
training. VBA provides regularly recurring centralized training 
sessions for newly appointed RVSRs. Topics covered during centralized 
training include general rating policies as well as specific rating 
policies related to the different body systems. Before and after 
attending centralized training, new RVSRs follow a prescribed 
standardized training schedule to include the use of computer-based 
training and performance support system (TPSS) modules. TPSS modules 
include tests to ensure that students assimilated the materials.
    Each year all RVSRs are required to complete at least 80 hours of 
training. Training topics are derived from a standardized RVSR 
curriculum that is available on the Compensation & Pension Web site 
(copy of curriculum is enclosed). VBA implemented the annual 80-hour 
requirement in 2006. For fiscal year (FY) 2008, all RVSRs are required 
to complete the new TPSS module on rating post traumatic stress 
disorder (PTSD) claims.

    Question 4: Are VBA personnel who adjudicate claims required to 
have professional or other certification? If not, please explain why 
certification is not required and whether VBA plans to require 
certification in the future. If certification is required, please 
describe the required certification, how VBA ensures that its personnel 
have the necessary certification(s), and the consequences to VBA 
personnel who do not obtain required certifications.

    Response: VBA personnel who adjudicate claims are not required to 
have professional or other certification. VBA has developed an 
instrument and process for skills certification for the veterans 
service representative (VSR) position. VSRs that elect to take the 
certification test and pass are promoted to the GS-11 level in the 
career ladder. Skills certification has been developed as a secure 
assessment instrument that enables VSRs to demonstrate that they have 
attained the level of skills required to provide quality service and 
decisions to veterans. Six hundred VSRs have passed certification. To 
date, certification has been a voluntary process.
    VBA is currently developing a skills certification instrument for 
rating VSRs and is in the final stages of validity testing. We are 
currently engaged in our collective bargaining obligations with the 
American Federation of Government Employees (AFGE) regarding full 
implementation of the rating VSR skills certification process.
    It is VBA's goal to make skills certification a requirement for 
advancement to the journey level for our key decision making positions.

    Question 5: With respect to the STAR reviews that are conducted 
each year, how many STAR reviews are taking place, and what are the 
outcomes of each of the reviews?

    Response: Currently, 120 rating cases and 120 authorization cases 
for each of our 57 regional offices are sampled for accuracy review 
each year. The rating sample is doubled (240 cases) for the four 
largest stations and the six stations with the lowest overall accuracy. 
Regional office and national accuracy statistics are reported on a 12-
month rolling cumulative basis. VBA recently approved a significant 
expansion of the number of claims sampled through the STAR program. In 
2008, VBA is increasing the number of annual reviews to 246 rating and 
246 authorization cases for each of the regional offices as well as 246 
cases for each of the three pension maintenance centers. Hiring 
authority for 16 additional quality reviewers was granted to support 
this sampling increase and the addition of a national rating 
consistency review. The Compensation and Pension Service is currently 
recruiting for additional reviewers and obtaining additional space to 
support this expansion.
    The STAR program assesses the accuracy of claims processing 
decisions across regional offices through a comprehensive review and 
analysis of all elements of processing associated with a specific 
claim. The STAR system includes review of work in three areas: (1) 
claims that usually require a disability rating decision, (2) claims 
that generally do not require a disability decision, and (3) fiduciary 
work. Reviews are conducted after completion of all required processing 
actions on a claim. The program was designed to be outcome-based, but 
outcome was not limited to the decision reached. The definition of 
outcome includes addressing all issues, fulfilling duty-to-notify and 
duty-to-assist obligations, making the correct decision, and 
establishing the correct payment from the correct date. These outcome 
areas are identified under the ``benefit entitlement'' category. When 
an error in the benefit entitlement category is identified, the case is 
considered ``in error.'' Other review categories include ``decision 
documentation/notification'' and ``administrative.'' A structured 
quality review check sheet is used to promote consistency of reviews. 
STAR accuracy review results are used to assess station accuracy for 
quality improvement purposes and to facilitate local training efforts.
    Upon return of the claims folder or guardianship file to the 
regional office, station management ensures that deficiencies noted are 
corrected. Corrective action can include re-adjudication or 
notification, as well as employee training and feedback. Regional 
offices are required to provide quarterly notification of corrective 
action taken on STAR benefit entitlement and decision documentation/
notification errors identified during that quarter. The quarterly 
corrective action reports are validated during routine oversight 
compliance visits conducted by the Compensation and Pension Service.

    Question 6: The IG, GAO, and IDA have all noted that VBA has tested 
for accuracy of claims adjudication but not for consistency across 
offices. What is VBA doing to remedy this defect?

    Response: As part of VBA's continued commitment to quality 
improvement, the Compensation and Pension Service Quality Assurance 
Staff is being reorganized and expanded to add a consistency tier to 
our national quality assurance program.
    VBA developed and implemented a rating consistency review program 
to assess both the frequency of assignment or denial of service 
connection (grant/denial rate) and the most frequently assigned 
evaluation (mode) across regional offices for selected diagnostic 
codes. Results are plotted per diagnostic code to identify stations 
falling outside of two standard deviations from the mean. Business 
rules are applied to the data analyses to determine the diagnostic 
codes warranting focused case reviews.
    This methodology was successfully tested in a consistency review 
pilot project that was completed in August 2007. Post-traumatic stress 
disorder (PTSD) was identified as one of the most frequently rated 
conditions during the period October 2004 through September 2006. The 
grant/denial rate of PTSD across all regional offices was plotted to 
identify stations falling outside of two standard deviations from the 
mean.
    Data on ratings involving individual unemployability (IU) decisions 
from the October 2004 through September 2006 period was also analyzed. 
The grant/denial rate of IU across all regional offices was plotted to 
identify stations falling outside of two standard deviations from the 
mean.
    A Data Analysis Staff was created within the Quality Assurance 
Staff to perform ongoing monitoring of rating consistency. Using 
approved statistical methodology, this staff works with VBA's Office of 
Performance Analysis & Integrity to extract, analyze, and identify 
statistical outliers. Focused rating consistency case reviews will be 
conducted by the quality review staff based on the results of the 
statistical analysis. The results of the current data analysis of 
rating decisions from the period October 2005 through September 2007 
will be analyzed to determine the diagnostic codes warranting focused 
case reviews for the remainder of the fiscal year.

    Question 7: If the Veterans Benefits Administration is unable to 
get information relating to a service member's in-theatre service 
directly from the Department of Defense to verify stressors 
contributing to PTSD, what alternate sources are being used to verify 
stressors when validating a claim in the ratings process?

    Response: VA uses the following sources to verify claimed in-
service stressors without requesting verification from the Department 
of Defense (DoD), or when VA is unable to obtain verification from DoD:
National Archives and Records Administration (NARA) and Records 
        Management Center (RMC)
    VA primarily uses records held by NARA and the RMC to verify 
claimed in-service stressors. NARA maintains a registry of most 
individual medical and personnel records in its custody, while the RMC 
houses records received from DoD and the Coast Guard. Examples of 
common sources of evidence VA uses to corroborate claimed in-service 
stressors from NARA/RMC include:

      military occupational specialty (MOS) or individual award 
evidence
      personnel folder or service medical records
      morning reports
      medical evidence from civilian/private hospitals, 
clinics, and physicians where or by whom a veteran was treated, either 
during service or shortly after separation

On-line Reference Material
    To reduce the time involved in verifying a claimed in-service 
stressor, VA uses VBA sanctioned Web sites and authorized reference 
material for research on corroborating stressors. Authorized sources 
are available through a VBA Web site that provides links to 30 sites on 
Web pages and cites reference material relevant to PTSD stressor 
research. A few examples of Web sites include:

      The Vietnam Casualty Search Page, ``No Quarter''--This 
Web site contains a database of Vietnam casualty information. A search 
may be conducted by name, province of casualty, hometown or state of 
the veteran.
      DoD Gulflink--This site has information on the 1990-1991 
Gulf War with declassified documents on records from all the Armed 
Forces.
      Iraqi Coalition Casualty Count--Contains a list of 
coalition casualties and the circumstances of death for Operation 
Enduring Freedom and Operation Iraqi Freedom.

    Marine Corps unit records from the Korean Conflict and Vietnam Era 
are maintained on VBA's imaging management system, Virtual VA. A Web-
based application has been developed to enable employees to research 
these records. The Marine Corps Archives and Special Collections 
(MCASC) Office maintains custodianship of the records. If VA cannot 
verify a claimed stressor, or requires unit records dated after the 
Vietnam Era, MCASC is contacted to identify the document or provide 
confirmation that the claimed stressor cannot be corroborated.
    VA considers other sources of evidence that may be used to help 
corroborate in-service stressors. Such sources include buddy statements 
or affidavits, letters written during service, photographs taken during 
service, State or local accident and police reports, or newspaper 
archives. In the case of combat veterans, the corroborating statements 
of comrades who have personal knowledge of the stressful event are 
sufficient.
    In PTSD claims involving sexual or personal assault, VA also 
develops for indicators of the assault, such as sudden declines in 
performance, sexually transmitted disease testing, requests for 
reassignment and other indicators to validate the event.

                                 
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