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


 
                     EXAMINING THE BACKLOG AND THE 
                  U.S. DEPARTMENT OF VETERANS AFFAIRS' 
                        CLAIMS PROCESSING SYSTEM 

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

                                HEARING

                               before the

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                                 of the

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 14, 2008

                               __________

                           Serial No. 110-70

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                               ----------
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41-370 PDF                       WASHINGTON : 2008 

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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     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
PHIL HARE, Illinois                  GINNY BROWN-WAITE, Florida
MICHAEL F. DOYLE, Pennsylvania       MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              BRIAN P. BILBRAY, California
JOHN T. SALAZAR, Colorado            DOUG LAMBORN, Colorado
CIRO D. RODRIGUEZ, Texas             GUS M. BILIRAKIS, Florida
JOE DONNELLY, Indiana                VERN BUCHANAN, Florida
JERRY McNERNEY, California           VACANT
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                    JOHN J. HALL, New York, Chairman

CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado, Ranking
PHIL HARE, Illinois                  MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              GUS M. BILIRAKIS, Florida

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 
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                            C O N T E N T S

                               __________

                           February 14, 2008

                                                                   Page
Examining the Backlog and the U.S. Department of Veterans' 
  Affairs Claims Processing System...............................     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    56
Hon. Doug Lamborn, Ranking Republican Member.....................     4
    Prepared statement of Congressman Lamborn....................    57

                               WITNESSES

U.S. Government Accountability Office, Daniel Bertoni, Director, 
  Education, Workforce, and Income Security......................     9
    Prepared statement of Mr. Bertoni............................    65
U.S. Department of Veterans Affairs, Michael Walcoff, Deputy 
  Under Secretary for Benefits, Veterans Benefits Administration.    41
    Prepared statement of Mr. Walcoff............................   109

                                 ______

American Federation of Government Employees, AFL-CIO, J. David 
  Cox, R.N., National Secretary-Treasurer........................    18
    Prepared statement of Mr. Cox................................    80
American Legion, Steve Smithson, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission..........................    33
    Prepared statement of Mr. Smithson...........................    96
Center for Naval Analyses (CNA) Corporation, Alexandria, VA, 
  Joyce McMahon, Ph.D., Managing Director, Center for Health 
  Research and Policy............................................     5
    Prepared statement of Ms. McMahon............................    58
Disabled American Veterans, Adrian Atizado, Assistant National 
  Legislative Director...........................................    30
    Prepared statement of Mr. Atizado............................    89
Erspamer, Gordon P., Senior Counsel, Morrison and Foerster, 
  Walnut Creek, CA...............................................    20
    Prepared statement of Mr. Erspamer...........................    83
Institute of Medicine, The National Academies, Michael McGeary, 
  Senior Program Officer and Study Director, Committee on Medical 
  Evaluation of Veterans for Disability Benefits, Board on 
  Military and Veterans Health...................................     7
    Prepared statement of Mr. McGeary............................    63
National Organization of Veterans' Advocates, Inc., Richard Paul 
  Cohen, Executive Director......................................    15
    Prepared statement of Mr. Cohen..............................    73
National Veterans Legal Services Program, Ronald B. Abrams, Joint 
  Executive Director.............................................    17
    Prepared statement of Mr. Abrams.............................    76
Veterans for Common Sense, Paul Sullivan, Executive Director.....    31
    Prepared statement of Mr. Sullivan...........................    94
Veterans of Foreign Wars of the United States, Gerald T. Manar, 
  Deputy Director, National Veterans Service.....................    34
    Prepared statement of Mr. Manar..............................   101
Wounded Warrior Project, John Roberts, National Service Director.    36
    Prepared statement of Mr. Roberts............................   107

                       SUBMISSIONS FOR THE RECORD

Bilmes, Linda J., Professor, Kennedy School of Government, 
  Harvard University, Cambridge, MA, statement...................   112
Priessman, Master Sergeant Kurt, USAF (Ret.), Vernon, TX, 
  statement......................................................   116

                   MATERIAL SUBMITTED FOR THE RECORD

``Wounded Vets, Broken System,'' CQ Weekly, April 30, 2007, by 
  Patrick Yoest and Rebecca Adams................................   119


                     EXAMINING THE BACKLOG AND THE
                  U.S. DEPARTMENT OF VETERANS AFFAIRS'
                        CLAIMS PROCESSING SYSTEM

                              ----------                              


                      THURSDAY, FEBRUARY 14, 2008

         U.S. House of Representatives,    
            Committee on Veterans' Affairs,
              Subcommittee on Disability Assistance
                                      and Memorial Affairs,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:15 p.m., in 
Room 340, Cannon House Office Building, Hon. John J. Hall 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Hall and Lamborn.

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Please forgive the delay. Once again, thank you 
all for being here. The Committee on Veterans' Affairs, 
Subcommittee on Disability Assistance and Memorial Affairs, 
hearing on examining the U.S. Department of Veterans Affairs' 
(VA's) claims processing system will come to order.
    Would everyone please rise for the Pledge of Allegiance.
    [Pledge of Allegiance.]
    Mr. Hall. Thank you.
    Today we are here to examine the VA's claims processing 
systems and its attendant disability claims backlog. There are 
many areas to explore when trying to determine why the 
disability claims backlog has reached the point of 
unmanageability and why this is the second time in a 7 year 
time period that we have reached this crisis point.
    From 2002 to 2007, the disability claims backlog has risen 
from about 250,000 to nearly 650,000. During the same time 
period, the Veterans Benefits Administration (VBA) consistently 
missed its performance targets on nearly all compensation and 
pension (C&P) claims processing fronts.
    These failures engender many questions about the complexity 
of the system the VA has created and the model upon which it is 
built.
    One of my leading questions concerns the effectiveness of 
the Claims Processing Improvement (CPI) model regards its 
suitability to establish meaningful accountability parameters 
to eliminate the claims backlog and accurately process claims. 
Thus far, none of the VA's own benchmarks have improved since 
the CPI implementation and I find this fact disturbing.
    Moreover, it seems as if the failure is not necessarily 
with the system itself, but with the execution of the processes 
that are supposed to be reinforced with transparent and highly 
visible accountability measures to make it work.
    As outlined by the 2001 report of the VA Claims Processing 
Task Force led by Daniel L. Cooper, now VA Under Secretary for 
Benefits, ``Accountability includes not only the proposition 
that a leader is responsible for the actions of the group, but 
also is accountable for the results of those actions or 
inactions. This single attribute is the most serious deficiency 
in the VBA organization.''
    At the time, Mr. Cooper was referring to VBA's then failed 
claims processing system, SDN. I think many of those who 
testify today will concur that these same observations could 
apply both to today's VBA organization and its claims 
processing system model, CPI.
    One can only wonder where the accountability is in a work 
credit system whose only meaningful measure is productivity and 
where quality seems to be an afterthought.
    Only about 2 percent of all claims are checked for quality 
and one in ten claims is processed incorrectly. This error rate 
is unacceptable and indicates that VA needs to improve its 
training regimens to ensure uniformity across Regional Offices 
(ROs) and that highly qualified individuals are processing and 
adjudicating claims.
    Further, I ask why bonuses are consistently paid to 
managers at both the Regional and Central offices while claims 
languish. I want VA management to adopt this principle: Be 
accountable for the backlog, do not pay yourselves anything 
extra until the veterans are paid.
    I know that VA contends that all of its inventory is not 
backlogged, but try selling these semantics to veterans waiting 
183 days and longer for decisions on their claims.
    From the Subcommittee's standpoint, based on the VA's 
current performance, most of the disability claims in its 
inventory are eventually going to become a part of those claims 
pending longer than VA's target of 145 days for claims 
processing. Hence, they will become part of the backlog.
    Moreover, the Subcommittee does not consider as progress an 
increase in the time needed to process a claim from 177 days in 
2006 to 183 days in 2007 accompanied by an increase in the 
VBA's target performance days for processing claims from 125 
days up to 145 days during the same time period.
    It is interesting that moving the goal from 125 days to 145 
days is actually a greater increase than the increase in the 
backlog from 177 to 183 days.
    VA should not conceive of moving its targets to compensate 
for its poor performance. I am confounded by these actions and 
would like an explanation and so would our veterans.
    I am encouraged that some of the numbers from VA's fiscal 
year 2009 budget indicated a 19 percent increase in VBA 
information technology (IT) funding to support efforts to move 
to a paperless claims environment and increased funding for 
VETSNET. While technological improvements alone will not solve 
the backlog problem, they are clearly critical to the solution.
    I am also anxious to see the results of IBM's study of the 
VBA's business processes involved with adjudicating a claim. 
This type of review is long overdue.
    I am also encouraged to see that VA is requesting more 
money to add 703 full-time employees (FTE), yet I am aware that 
you have been unable to maximize the performance of the record 
number of 3,100 FTEs that this Congress ensured you received 
during the last two funding cycles.
    Let us be very clear. This is not just a people problem and 
adding more people to a broken system cannot be the only answer 
to vanquishing the claims backlog and improving processing 
times. To date, this single-minded approach has proven 
unsuccessful.
    I think the major faulty premise in this system is that the 
VA behaves as if it is only accountable to meet the numerical 
targets it sets and that Congress tacitly approves. But I want 
to reinforce to you that you are actually supposed to be 
accountable to the veteran who has borne the battle, to his 
widow, and to his orphan.
    I believe we need to refocus and refine our Nation's claims 
processing system to make it accountable to producing better 
outcomes for our veterans, their families, and survivors.
    I thank the witnesses on the first three panels for their 
thoughtful, solution-oriented testimonies. I hear the 
frustration in your statements and I look forward to working 
with you and with the Ranking Member and other Members of this 
Committee on ways to implement the workable solutions many of 
you offer.
    I know that the backlog has taken on a life of its own. 
However, it is not bigger than the collective will we will 
devote to eliminating it and to honing a claims processing 
system that is veteran-focused, not process-focused.
    Last, I know that VA cannot be pleased with its current 
disability claims processing performance and I look forward to 
hearing VBA's strategic plan for addressing these concerns.
    Secretary Peake has highlighted this issue as one of his 
top priorities and I hope VA sees Congress as a friend and not 
a foe in helping to correct the shortfalls in the disability 
claims processing system.
    I believe that just as the Veterans Health Administration 
(VHA) experienced a revolutionary transformation, it is well 
time to think of devoting the same type of resources into 
transforming the VBA. It is time for a paradigm shift.
    Our veterans deserve the benefit of our collective 
resources to ensure that this process is a world-class, 21st 
century model that reflects their priceless sacrifice for our 
Nation.
    And I would ask that the article from CQ Weekly entitled 
``Wounded Vets, Broken System,'' April 30, 2007, issue be 
entered into the record without objection. Without hearing any, 
so ordered.
    [The prepared statement of Chairman Hall appears on p. 56, 
and the article referenced, ``Wounded Vets, Broken System,'' CQ 
Weekly, April 30, 2007, by Patrick Yoest and Rebecca Adams, 
appears on p. 119.]
    Mr. Hall. Thank you very much. I would yield now to Ranking 
Member Lamborn for his opening statement.

             OPENING STATEMENT OF HON. DOUG LAMBORN

    Mr. Lamborn. Thank you, Mr. Chairman, for yielding. I look 
forward to hearing our witnesses' testimony on how we might 
address the challenges and opportunities facing VA's 
compensation and pension service.
    In fiscal year 2007, compensation and pension service 
commonly referred to as C&P performed more than 838,000 rating 
decisions. C&P also performed nearly 582,000 claims actions 
that did not require rating decisions.
    Yet, despite this tremendous volume of work accomplished, 
C&P finds itself behind in its struggle to overcome the steady 
accumulation of claims awaiting action. An array of reasons 
contributes to this frustrating trend and our witnesses 
outlined a number of them in their written statements.
    Foremost among them will be that VA place more emphasis on 
accuracy and less on speed. Rating decisions must be done right 
the first time. I wholeheartedly agree.
    But as much as we may ponder and discuss solutions to the 
multitude of underlying problems, I think we all realize that 
the time has arrived for a reasonable, yet fundamentally 
different approach to the problem. If we continue to merely 
tread water, we are going to sink.
    As my Subcommittee colleagues are aware, I have long been 
an advocate for major reform with regard to the use of 
information technology. I am heartened to know that they concur 
with my perspective that it is well past time for VA to embrace 
IT as a remedy to an outdated paper-based system. VA should be 
on the forefront of technology in the disability benefits arena 
and I believe it can be.
    Not too long ago, VA's healthcare system was so poor, it 
was the subject of derision in movies such as Born on The 
Fourth of July. Now, though, VA healthcare is the subject of 
emulation among a number of high-quality medical models.
    I believe that VA can make a similar improvement on the 
benefits side of the Department. We must be open to considering 
new ideas, especially in the area of IT, and not be bound by 
narrow paradigms.
    I invite the Members of the Subcommittee, the veterans 
groups, and others to offer suggestions that will improve the 
process for our future veterans.
    Thank you, Mr. Chairman, and I yield back.
    [The prepared statement of Congressman Lamborn appears on
p. 57.]
    Mr. Hall. Thank you, Congressman Lamborn.
    I would like to welcome all of our panelists testifying 
before the Subcommittee today and remind our panelists that 
your complete written statements have been made part of the 
hearing record.
    Please limit your remarks so that we may have sufficient 
time for follow-up questions once everyone has had the 
opportunity to testify.
    Joining us on our first panel is Ms. Joyce McMahon, 
Managing Director, Center for Health Research and Policy, CNA 
Corporation; Mr. Michael McGeary, Senior Program Officer and 
Study Director for the Committee on Medical Evaluation of the 
Veterans for Disability Benefits, Board on Military and 
Veterans Health of the Institute of Medicine; and Mr. Daniel 
Bertoni, Director of Education, Workforce, and Income Security 
of the U.S. Government Accountability Office (GAO).
    If the panelists would come to the table, please. We 
welcome you.
    And, Ms. McMahon you are recognized for 5 minutes.

 STATEMENTS OF JOYCE McMAHON, PH.D., MANAGING DIRECTOR, CENTER 
FOR HEALTH RESEARCH AND POLICY, CENTER FOR NAVAL ANALYSES (CNA) 
 CORPORATION, ALEXANDRIA, VA; MICHAEL McGEARY, SENIOR PROGRAM 
OFFICER AND STUDY DIRECTOR, COMMITTEE ON MEDICAL EVALUATION OF 
    VETERANS FOR DISABILITY BENEFITS, BOARD ON MILITARY AND 
VETERANS HEALTH, INSTITUTE OF MEDICINE, THE NATIONAL ACADEMIES; 
AND DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME 
        SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

               STATEMENT OF JOYCE McMAHON, PH.D.

    Ms. McMahon. Thank you.
    Chairman Hall, Representative Lamborn, distinguished 
Members, I appreciate the opportunity to testify before the 
House Subcommittee on Disability Assistance and Memorial 
Affairs today on the subject of the VA's claims processing 
system.
    The testimony I am giving is based on findings and our 
final report for the Veterans' Disability Benefits Commission 
(VDBC). In the written testimony I have provided, there is a 
website link that can provide a full copy of that report.
    I am going to summarize from the testimony that we have 
that is pertinent to the topic of examining the backlog and the 
VA's claims processing system.
    In particular, there were two parts of our study that 
relate to these issues. We did an evaluation that compared the 
VA Disability Compensation Program to other Federal disability 
programs, looking at the claims process.
    We also conducted surveys of both raters and Veterans 
Service Organizations (VSOs) to determine how they felt about 
the rating process and their ability to work with the claims 
system.
    I am first going to mention briefly some of the comparisons 
we did across the other Federal disability programs. We looked 
at Social Security disability income, the Supplemental Security 
Income, workers' compensation, the disability retirement under 
the Federal employee system, and U.S. Department of Defense's 
(DoD's) disability evaluation system.
    Our strategy was to look at literature reviews, reports 
from GAO, congressional testimony, Office of Inspector General 
(OIG) reports, and interviews with various officials at all of 
these programs.
    We found two difficulties in terms of making these 
comparisons, the first of which is there is generally a lack of 
formal evaluation of the effectiveness of specific practices 
for the non-VA programs. That limited our ability to make 
direct head-to-head comparisons of methods.
    In addition, there are different goals and structures and 
procedures and claims requirements across the programs. In 
particular, the VA system has a great deal of complexity 
required for the evaluation process, more complexity than may 
be required for some of these other programs.
    To be specific, there is a requirement that the VA 
disability be a service-connected disability, and multiple VA 
disabilities are examined. Each disability has to be assessed 
for a degree of disability to determine an overall disability 
compensation that is appropriate for the individual.
    In particular, the age of claim is an important issue, 
because the initial disabling event may have occurred years 
prior to the claim being filed, meaning that the documentation 
that is provided is old and may have to be requested from DoD. 
The evidence may have to be resurrected, from old files. So the 
evidence that is needed to apply to the claim may not, in fact, 
be very current and this adds to the problem of resolving 
claims quickly.
    We looked at several metrics including timeliness, 
accuracy, consistency, training issues, and staff turnover. The 
one that was the most striking was the timeliness issue, in 
that the VA claims process takes a much longer time to complete 
than is the case for the other programs.
    In part, this may be due to the complex issues that the VA 
has to deal with in terms of the determination process, but we 
think that one suggestion that was offered by GAO has 
tremendous merit. GAO suggested that the VA should look at 
desegregating the process of the claim so that it can be 
determined which stages of the claims process contribute most 
to the total processing time.
    In other words, we do not know why it takes as many days as 
it does. We do not know enough about where the bottlenecks 
occur. Is it a problem with retrieving old paperwork? Is it 
getting input from DoD? Is it based on the issue of trying to 
do medical and clinical assessments? So we think it would be 
very helpful to look at that process more closely.
    I would like to turn now to the discussion of the rating 
officials, both the VBA rating officials and the accredited 
Veteran Service Officers in terms of the surveys that we did. 
These are the first-line people that deal with the claims 
processing, either doing the claims processing or assisting 
individuals with the claims processing.
    We prepared surveys for each group that were related as 
parallel as possible so we could ask pretty much the same 
questions from both groups of people and get their separate 
opinions. We focused on the challenges in the benefits 
determination and claims rating process and the raters' 
perspectives on their performance.
    We asked raters to identify their three top challenges, for 
example, what kind of training they had that they thought made 
them very effective, what kind of resources were good to help 
them make the claims decisions, what types of claims were most 
difficult to process, and what resources would help them do a 
better job.
    In general, the finding was that the overall determination 
process is difficult to use and, in particular, the VSOs 
reported that most veterans and survivors find it difficult to 
understand the determination process, difficult to navigate 
through the steps, and difficult to provide the needed 
evidence.
    Both raters and VSOs agree that veterans have unrealistic 
expectations about the process and I think that means 
unrealistic in terms of what they can do to help the veterans 
get through the claims process more quickly. That is how the 
raters perceived it.
    Particular things that we found from these surveys include 
the following: more clinical input would be helpful, especially 
from physicians and mental health professionals. The claims 
processes are viewed as being complex and getting more complex 
over time. And obviously, the more complex the condition that 
has to be considered, the more time it takes to do an accurate 
job on getting that done.
    Some types of disabilities were identified as being more 
difficult to assess than others. In particular, rating mental 
claims is considered to be much more problematic than rating 
physical condition claims. Again, in particular, Post Traumatic 
Stress Disorder (PTSD) was singled out as requiring more 
judgment and subjectivity and being much more difficult and 
time consuming compared to physical claims. Both groups agreed.
    Mr. Hall. Could you summarize, please?
    Ms. McMahon. Yes, I can.
    Among physical disabilities, neurological, musculoskeletal 
and sense organs were more difficult than the other physical 
disabilities to rate. It is not just a matter of training, but 
years of experience on the job that makes raters more 
confident. And, in particular, both the raters and VSOs 
believed that the claims rating process generally arrives at 
the fair and right decisions for veterans.
    Thank you.
    [The prepared statement of Ms. McMahon appears on p. 58.]
    Mr. Hall. Thank you very much, and to remind all of our 
witnesses, your full statements have been entered into the 
record.
    Mr. McGeary, you are now recognized for 5 minutes.

                  STATEMENT OF MICHAEL McGEARY

    Mr. McGeary. Good afternoon, Mr. Chairman, Members of the 
Committee.
    As the Chairman indicated, I was the Staff Director for the 
Institute of Medicine's Committee on Medical Evaluation of 
Veterans for Disability Benefits, which produced the report 
called, ``A 21st Century System for Evaluating Veterans for 
Disability Benefits,'' last June. The Committee was established 
at the request of the Veterans' Disability Benefits Commission 
and it was funded by VA.
    In this report, the Committee assessed the medical criteria 
and processes used by VA to determine the degree of disability 
of service-connected veterans. The Committee did not, however, 
assess the nonmedical aspects of the claims process. So the 
report does not address all the factors that might affect the 
timeliness of decisions on claims.
    The Committee did not, for example, evaluate the adequacy 
of staffing nor the capacity of VA's management information 
systems. Rather, the main focus of the report is on the medical 
criteria VA uses to assess degree of disability, which are 
embodied in the VA's schedule for rating disability.
    Dr. Lonnie Bristow, the Chairman of the Committee, is 
scheduled to testify before you on the rating schedule on 
February 26. I am here today to review the part of the report 
in Chapter 5 which focuses on the two steps in the claims 
process that are medically based, namely, the medical 
examination step and the rating step.
    My written testimony contains statistics on timeliness, 
accuracy, and consistency of decisions in recent years, which I 
will not repeat here other than to note that, despite 
improvements of the time it takes to resolve claims, it is long 
and the number of pending claims is still large.
    The Committee made several recommendations to improve the 
medical examination process and several more to improve the 
rating process. These recommendations were primarily aimed at 
improving the quality of the medical evidence and rating 
decisions rather than speeding the claims process. But two of 
the Committee's recommendations promise to get faster as well 
as better decisions.
    First, VA has developed standardized online protocols or 
templates for documenting the most common disability 
examinations. VA has conducted studies which indicate that 
examinations using these templates are not only higher in 
quality, but reported more quickly, 7 to 17 days more quickly 
than traditional transcribed reports.
    However, the Committee noted that the use of these 
templates is voluntary and the rate of use is low, although 
growing. And the Committee recommends, therefore, that the use 
of the templates be made mandatory.
    Second----
    Mr. Hall. Excuse me, Mr. McGeary. I am going to ask you, if 
you would, to pause right there and take a quick recess while 
we run across the street and vote and come back again.
    Mr. McGeary. Yes, sir.
    [Recess.]
    Mr. Hall. The hearing of the Subcommittee is back in 
session. Please continue Mr. McGeary.
    Mr. McGeary. Okay. Second, the Committee found that raters 
should have quicker access to medical expertise. And you just 
heard from Ms. McMahon that the raters report the need for more 
medical information to use.
    The raters are not medical professionals. If they have a 
question about the meaning of a test result or if the evidence 
is inconclusive, they have to refer the case back to the C&P 
examiners in the Veterans Health Administration, which adds 
time or, to save time, they can determine a rating based on 
incomplete information, which is obviously not desirable.
    The Committee recommends, therefore, that VA have medical 
consultants readily available to the raters in the Regional 
Offices. This does not mean having a medical consultant in 
every Regional Office, because with modern communications 
technology, VBA medical consultants could be in a national or 
in Regional centers.
    This recommendation that VBA have its own medical 
consultants would require congressional action because the U.S. 
Court of Appeals for Veterans Claims has barred the 
participation of physicians in adjudicating claims.
    The Committee believes that the Court's decision was based 
on a misunderstanding of the role of physicians in 
adjudication, which is different from the role of a treating 
physician.
    All other major disability programs, for example, Social 
Security, DoD's disability evaluation process, ``The Federal 
Employee Compensation Act'' Program, Civil Service Disability 
Retirement Program, either have physicians participating in the 
adjudication decision or have medical experts readily available 
to review and discuss claims with the lay disability raters.
    So the Committee concluded that adoption of these 
recommendations, that the templates be made mandatory, and that 
VBA have medical consultants for raters, would, among other 
results, possibly improve the timeliness of the decisions.
    And this concludes my remarks. Thank you for the 
opportunity to testify, and I would be happy to address any 
questions.
    [The prepared statement of Mr. McGeary appears on p. 63.]

                  STATEMENT OF DANIEL BERTONI

    Mr. Bertoni. Good afternoon. I am pleased to participate in 
this discussion of the Department of Veterans Affairs' 
disability claims process.
    Last year, VA provided $36 billion in benefits to nearly 
four million recipients. For years, VA's disability program has 
been plagued by untimely processes, large backlogs, and error-
prone decisions. It will be further strained as more Operation 
Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF) 
veterans seek benefits in the coming years.
    In 2003, we at GAO designated VA's disability program high 
risk because it was based on outmoded concepts and continued to 
experience management and operational problems. Since that 
time, we have issued numerous reports with recommendations for 
change.
    Today I will briefly highlight three areas, service 
delivery challenges facing VA, actions taken to improve 
performance, and areas where fundamental reform is needed.
    In summary, VA continues to experience service delivery 
challenges. Over the past 4 years, pending ratings-related 
claims increased over 50 percent to nearly 400,000. Claims 
pending longer than 6 months have more than doubled to over 
100,000.
    The time required to resolve appeals is also problematic 
with a current average processing time of almost 700 days. And 
VA also faces challenges ensuring that its decisions are 
accurate and consistent.
    VA has taken steps to expedite and improve claims 
processing such as increasing staff overtime, using retired 
staff to provide training and claims assistance, shifting 
workloads to offices with excess capacity, and establishing 
special teams to prioritize claims for aged veterans as well as 
returning OIF and OEF veterans.
    VA's 2009 budget funds nearly 11,000 claims processing 
staff, an increase of 2,600 positions, with 32 percent over 
fiscal year 2007.
    While VA acknowledges some temporary declines in 
productivity until new staff are trained and gain experience, 
it expects productivity to ultimately increase.
    Despite these assertions, we are concerned that 
incorporating a large number of new staff into the claims 
process will likely present substantial human capital 
challenges relative to hiring, training, and deployment of new 
personnel.
    And even if staffing levels increase, other actions are 
needed to improve productivity. To that end, VA has continued 
to expand the number of benefits delivery at discharge (BDD) 
sites where servicemembers can apply for benefits prior to 
discharge and receive expedited claims processing.
    To improve decisional accuracy and consistency, VA has 
begun to enhance its quality assurance processes and develop 
baseline data to monitor decisional variances, especially for 
PTSD and other brain injury claims.
    Finally, to address longstanding systemic weaknesses, VA 
and the Department of Defense are piloting a joint disability 
evaluation system whereby VA performs a single medical exam, 
rates the disabilities of active-duty servicemembers. This 
pilot intends to streamline the confusing dual DoD and VA 
disability systems and ultimately expedite claims processing.
    Despite VA's efforts, several factors may impede progress. 
Claims have increased steadily from about 579,000 at the start 
of this decade to 838,000 last year. And VA predicts that the 
current war will place a further strain on operations.
    Court decisions are requiring VA to assist veterans in 
developing claims. They have also expanded workloads. Increased 
outreach and additional laws and regulations creating new 
presumptions of service-connected disabilities have added to 
the volume of claims. Caseload complexity has also increased as 
more veterans claim multiple disabilities. Thus, continuing to 
explore new ways to work smarter and more efficiently is 
essential to increasing VA's productivity.
    Going forward, significant program improvements may lie in 
more fundamental reform. We have noted that VA's programs do 
not reflect the current state of science, medicine, technology, 
and the national economy, which has moved away from 
manufacturing jobs to service and knowledge-based employment. 
Thus, VA's rating criteria and support services have lagged 
behind modern concepts of disability and early intervention.
    The Veterans' Disability Benefits Commission has 
recommended that VA's entire rating schedule be updated 
starting with PTSD, Traumatic Brain Injury (TBI), and other 
signature disabilities of the current war.
    The Dole-Shalala Commission also noted that the current 
schedule does not sufficiently acknowledge injuries that are 
new or for which diagnostic criteria are changing rapidly. This 
is an area of concern to us also.
    Finally, we reported that VA's field structure may impede 
efficient operations. Despite limited ad hoc efforts to 
consolidate some processes and workloads at VA's 57 offices, 
claims processing remains unchanged and continues to experience 
large performance variations.
    VA must take a more strategic approach to determining the 
appropriate structure and division of labor among its field 
locations.
    In conclusion, reexamining claims processing challenges and 
implementing viable solutions for reform is difficult. However, 
recent studies have laid the groundwork to help VA better align 
its programs with modern concepts of disability.
    It is imperative that VA thoughtfully assess the range of 
options and their potential effects and continue to look for 
other reforms to further improve its disability programs into 
the 21st century.
    This concludes my statement. I am happy to answer any 
questions that you may have. Thank you.
    [The prepared statement of Mr. Bertoni appears on p. 65.]
    Mr. Hall. Ladies and gentlemen, thank you for your 
attention. We are in the middle of a stack of votes. There are 
five votes remaining, 5-minute votes supposedly. Each one is 5 
nominally. So you are still talking about somewhere in the 
neighborhood of probably 40 minutes or so.
    I apologize. I cannot control the vote schedule. But I will 
be back and hopefully the Ranking Member will be back as well 
and we will proceed. Thank you for your patience. You are 
excused again.
    I am officially putting this hearing in recess.
    [Recess.]
    Mr. Hall. The hearing of the Subcommittee is back in 
session. There is a privileged motion being discussed on the 
floor right now that could take anywhere from 1 to 50 minutes 
or so. I am not sure what is going to happen. We are going to 
try to move as much as we can through the business at hand 
today.
    So let me ask some questions of our first panelists. And 
thank you for your patience.
    Ms. McMahon, it seems that the bulk of the time, 111 days, 
according to the VDBC, is taken during the development stage of 
claims processing, most of which involves acquisition of 
medical records and a medical examination of a veteran by the 
VA or its contractor.
    Your report to the VDBC also highlights how raters 
indicated that obtaining needed evidence and the insufficiency 
of medical examinations was a serious challenge given the time 
constraints.
    During your analysis and comparison of disability programs, 
did you find that these programs allow the admission of 
independent outside examinations and, if not, how does it work 
in the other disability systems?
    Ms. McMahon. Well, I think that it does allow an 
independent examination. Although when we talked to the raters, 
they indicated that they would appreciate more of that evidence 
to help them make their decisions. They did not think they 
received enough of that information.
    So they have pointed out they wanted more information from 
clinicians, outside physicians, medical rehabilitation people, 
and material of this nature to help them with the decision 
process and that was a lack in the overall process.
    We are not in a position at CNA, as we are not clinicians, 
to make recommendations regarding the specific processes that 
these VA raters do or the other programs do with regard to how 
they take in their medical evidence. That is a little bit 
beyond my purview.
    Mr. Hall. Okay. Thank you.
    In your testimony, you mentioned that your survey results 
indicated that many raters and VSOs see claims with mental 
disorder problems or issues, especially PTSD, as requiring more 
judgment and subjectivity than claims of physical conditions.
    We know from previous hearings before the Subcommittee that 
there is a tremendous variance between ROs on these claims.
    Do you have recommendations for improving the consistency 
of the outcomes for veterans filing these types of claims and 
how do you think we can make these determinations less 
subjective?
    Ms. McMahon. One way to make it less subjective would be to 
rely more on medical testimony. I would say again not as a 
medical person myself, this is basically what I have been told, 
that one way to do this would be to have an actual one-on-one 
assessment medically that would lay out the characteristics of 
the person's case and make a medical recommendation. This is 
time consuming but it would probably be something that would be 
helpful.
    The issue of consistency across ROs can be dealt with, but 
it also takes the process further away from the individual 
person. For example, suppose you consolidated certain types of 
claims into a specified office. Perhaps it might be that all of 
the PTSD claims would go to a certain office with raters that 
were specializing in PTSD claims. You would probably get more 
consistency. But then you are taking the claim away from the 
individual Regional Office and from the individual veteran that 
is talking directly to a claims representative.
    So you have a problem in the sense that you can try to 
specialize some types of claims, perhaps not just PTSD, but 
neurological claims also, so they are reviewed by certain types 
of raters, but then you may move away from the process of 
dealing with claims in an individual RO to some extent.
    Mr. Hall. Thank you.
    Mr. McGeary, would you please elaborate on your 
recommendation that VA should implement mandatory use of 
interactive online versions of the VA examination worksheets? 
How does this process work now and how could this change affect 
the processing times for rating claims?
    Mr. McGeary. VA first started working on the medical exams 
in the mid-1990s and they developed standard worksheets. They 
worked up a large number, I think 50 plus worksheets for the 
most common conditions, for clinicians to use in conducting the 
C&P exams and in reporting them.
    And then they went the next step, which is to develop them 
into an on-line interactive system. The idea here was that the 
template would indicate what information was needed. It would 
provide standardized input, structured and so forth, and would 
also make sure that everything that was needed would be 
answered.
    And they have been working on developing these templates. 
They are, I believe at this point, rolled out nationally, but 
they are not mandatory yet. The Committee thought that they 
should make them mandatory because VA's own studies show that 
it improves the quality of the exam, at least in terms of 
making sure that the information that is asked for is provided 
and that it is also faster.
    I believe the average time for a Regional Office to get an 
examination report is about 30 to 35 days. And they found that 
using some of these templates would save 7 to 17 days. That was 
a couple of years ago. I am not sure whether they have looked 
at this lately.
    That is why I highlighted this particular recommendation as 
something that would presumably result in better medical 
evidence and also shorten the turnaround for doing the exams.
    Mr. Hall. Thank you.
    Can you provide more detail on your recommendation that 
raters should have better access to medical expertise, such as 
having medical consultants in a National or Regional Office 
which raters would be able to confer with on the tough cases?
    Currently it does not happen with most ROs, but I believe 
it used to be the case that doctors or medical experts were 
available to raters for medical advice.
    Mr. McGeary. Yes, sir. In the 1920s, when VA started the 
compensation program, they had rating boards and there would be 
a medical person on the board. They also would have a 
vocational person and a legal person.
    When you fast forward to when the U.S. Court of Appeals for 
Veterans Claims was established, the court began to issue cases 
in which they were putting a pretty high standard on using 
doctors in these decisions. So basically, VA dropped having 
physicians on the rating boards and at the VBA as well.
    We looked at the other disability programs as CNA did and 
found that VA is unique in this regard, that the other programs 
either have medical advisors or they actually have physician 
adjudicators.
    [Mr. McGreary subsequently provided the following 
information:]

        The Committee's recommendation that VBA have medical 
        consultants for raters should reduce the number of times a case 
        must be returned to the Veterans Health Administration and thus 
        save time spent deciding these cases.

    Mr. Hall. Thank you, Mr. McGeary.
    Mr. Bertoni, in your written testimony, you note that the 
VA continues to fall short on its quality assurance program to 
assess rating accuracy. In fact, by VA's own numbers, one out 
of every ten cases is adjudicated incorrectly. Many of today's 
witnesses will testify that it may even be higher than that, 
closer to three in ten.
    Would you please describe your observations of the VA's 
Systematic Technical Accuracy and Review Program (STAR) and 
provide any thoughts on how it might be improved?
    Mr. Bertoni. Certainly. We have not done an in-depth 
analysis of the STAR system for some time. I guess the bottom 
line was that our concern with STAR was that the level and 
depth of their sampling perhaps at times has been insufficient 
to generalize and to sort of drill down into the root causes of 
some of the issues for the inconsistencies and inaccuracies.
    To rectify that, I think you really need to look at 
sampling methodology, your approach, whether you are actually 
sampling enough cases and your methodology for doing that is 
going to give you a reasonable assurance that this is or is not 
a true soft spot or bottleneck in the system or quality 
assurance issue. And that has been our concern with the STAR 
system.
    Mr. Hall. You also mentioned that VA may need to look at 
more fundamental reforms for improving its disability program 
in the long term.
    Do you have any specific closing thoughts on that matter?
    For instance, we will hear later today from the VA about 
its IT improvements and plans, something that Congressman 
Lamborn and I have been advocating.
    Could you comment on what role you think technology might 
play and whether it is the panacea?
    Mr. Bertoni. Absolutely. You know, technology is not the 
panacea, but it can make everyone's life more pleasant and 
result in more accurate and more consistent decisions.
    I think before you talk about technology, I think you 
really need to, as I always say, to follow the process, to 
really understand the weak points, the bottlenecks, the parts 
of the process that really do call for reengineering.
    Once you have done your due diligence and done that 
analysis, then you should write the system requirements that 
you need to write and build your systems around the new 
reengineered, more efficient system. And at the end of the day, 
you will end up with a more effective process.
    I think what happens so many times at Federal programs, and 
we have seen it before, is agencies will take existing manual 
or inefficient processes and just embalm them into the new 
technology. And what you have is new technology that are simply 
built around faulty processes and techniques.
    So that is the issue. You really need to look at 
reengineering the process, defining the system you want to use 
for that process, and building a system around it.
    Mr. Hall. Thank you.
    You highlight in your testimony how the complexity of 
claims is adding significantly to the challenges that the VA is 
facing in getting rid of its claims backlog and in decreasing 
processing times.
    In fact, VA reported that the number of cases with eight or 
more disabilities increased from 21,800 to 58,500 between the 
years of 2000 and 2007.
    Given your familiarity with the VA and its team and 
workflow concept instituted under CPI, would you say that its 
claims processing model is equipped to or flexible enough to 
handle this dynamic of claims complexity given that the claims 
processing times and the backlog have worsened?
    Mr. Bertoni. I probably cannot talk specifically as to 
whether the current model would be sufficient or not. We have 
not done the drill or done the analysis on the claims 
processing model that we probably should do in the near future.
    I was just talking to someone on your staff earlier that it 
is probably a good time for us to go in and do a top-to-bottom 
review of the claims processing structure to get a sense of 
where the soft spots are, where the problems are and have a 
better sense of that.
    But in terms of the multiple impairments, I think in 
general, any time you have increasing complexity in a case, you 
want to make sure you have the most streamlined, efficient, 
effective process in place that is going to allow you to 
address that.
    Complexity is not going to go away. We have an aging 
beneficiary cohort. We have people coming in with some very 
complex impairments, especially the OIF/OEF veterans coming in 
with some TBI and other serious brain injuries, that and many 
other body systems are going to be affected.
    So I think I do not know exactly whether the current system 
is equipped to handle those impairments. But to the extent that 
it is not, it could be problematic and we would need to go in 
and really look at that and we have not.
    Mr. Hall. Thank you, Mr. Bertoni, Mr. McGeary, Dr. McMahon. 
Thank you for your patience. Your spoken testimony was entered 
into the record as well as your written testimony. Minority 
Counsel will enter questions for the record. With our gratitude 
for your patience, you are now excused.
    I have votes once again on the floor, so I am going to run 
across the street and come back. And this hearing will be in 
recess until then.
    [No questions were submitted.]
    [Recess.]
    Mr. Hall. The Subcommittee is reconvened and is called to 
order. Thank you again for your patience. Welcome to our second 
panel, Richard Cohen, Executive Director of the National 
Organization of Veterans' Advocates, Inc. (NOVA); Ronald 
Abrams, the Joint Executive Director, National Veterans Legal 
Services Program (NVLSP); J. David Cox, National Secretary-
Treasurer, the American Federation of Government Employees 
(AFGE); and Gordon Erspamer; is that correct?
    Mr. Erspamer. Erspamer.
    Mr. Hall. Erspamer, thank you, Claims Attorney from 
California.
    Your full statements, as usual, are entered in the record 
and you will each be recognized for 5 minutes starting with Mr. 
Cohen.

STATEMENTS OF RICHARD PAUL COHEN, EXECUTIVE DIRECTOR, NATIONAL 
 ORGANIZATION OF VETERANS' ADVOCATES, INC.; RONALD B. ABRAMS, 
  JOINT EXECUTIVE DIRECTOR, NATIONAL VETERANS LEGAL SERVICES 
  PROGRAM; J. DAVID COX, R.N., NATIONAL SECRETARY-TREASURER, 
   AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO; AND 
  GORDON P. ERSPAMER, SENIOR COUNSEL, MORRISON AND FOERSTER, 
                        WALNUT CREEK, CA

                STATEMENT OF RICHARD PAUL COHEN

    Mr. Cohen. Thank you, Chairman Hall and Members of the 
Committee.
    I will not belabor what we all know about the VA's 
shortcomings in claims processing except to say that this 
Committee needs to keep in mind the devastating effects on real 
people because we are not really talking about inventory and we 
are not talking about production standards. We are talking 
about veterans and their families, veterans who die without 
their benefits or live impoverished, lose their homes or their 
vehicles.
    Now that we are at war in two theaters, we know that there 
is a flood of injured veterans who are going to be turning to 
the VA for the benefits they deserve and now almost 7 years 
after the Claims Processing Task Force report in October 2001, 
we still have an unconscionable backlog of over more than a 
half a million claims, with decision delays of greater than 3 
years and in many cases greater than 5 years.
    The main reason for this is VA funding which is too low 
leading to inadequate staffing and inadequate training. It is 
time that we, as a country, recognize that the VA's funding is 
a cost of war and we need to adequately fund the VA so they 
have adequate staff and adequate training.
    We were told how complex the system is. It is a complex 
system, but the VA training has been less than 10 or about 10 
hours a year. Their raters consistently demonstrate lack of 
knowledge and training. They have a staff of about 14,000 who 
are handling 1.4 million claims and these people still do not 
know how to apply the VA law when it applies to presumptions, 
and when it applies to the benefit of the doubt.
    The VA is proud to tell you about an accuracy rate of over 
80 percent. I am here to tell you that is an internal number 
which has no reality in the real world and if you look at the 
numbers of the BVA decisions, the number of reversals and 
remands, because the case was not adequately developed or was 
decided wrongly, you will see that the accuracy rate is below 
20 percent.
    This accuracy rate is more than just an academic exercise. 
It directly leads to more appeals which leads to more backlogs. 
If the VA could decide the cases correctly the first time, it 
would not have the cases coming back and we would not have 
hamster-wheel justice that everyone is talking about.
    Instead of fixating on delays and on accuracy, the VA has 
decided to institute their extraordinary award rule, in 2007, 
which puts a chilling effect upon raters who now know that, if 
they state that the veteran was incorrectly denied benefits for 
a long time, that claim will be reviewed in a Central Office in 
Washington, D.C.
    Not only does it put a chilling effect on the raters 
causing them not to make the right decision, but it in effect 
punishes veterans who are finally able to convince raters, with 
further review and after further delays, that the decision was 
wrong initially and they are entitled to more money.
    This is a big mistake by the VA. This rule has resulted in, 
apparently, at least 500 claims in a 4-month period of 2007 
being reviewed.
    The production standards are improper. There is no way that 
someone can make three to five decisions each day. It takes 
longer than that to review the file and to make a proper 
decision. And the raters have said in a survey that they cannot 
keep up with those production standards.
    In addition, the VA has maliciously refused to adjudicate 
Agent Orange claims of Blue Water vets that the Haas decision 
said veterans were entitled to. There is also a movement afoot, 
that members of NOVA have been seeing to deny PTSD benefits to 
combat vets.
    Finally, the Veterans Claims Assistance Act (VCAA) is a 
mistake as applied. Congress needs to tell the VA that they 
should give claim-specific information to the veterans so they 
can know how to handle their case.
    Thank you.
    [The prepared statement of Mr. Cohen appears on p. 73.]
    Mr. Hall. Thank you, Mr. Cohen.
    Mr. Abrams, you are now recognized for 5 minutes.

                 STATEMENT OF RONALD B. ABRAMS

    Mr. Abrams. Thank you, Mr. Chairman, Councils.
    I have several things to say and it is always enjoyable for 
me to talk about the VA claims process.
    In 1987 as a VA employee, I was asked to testify, and I 
recommend to the Committee that you get a copy of serial number 
100-4 where they analyzed pretty much what you are analyzing 
today and you will see many of the same comments talking about 
what is wrong with the VA system. That is about 21 years ago.
    Unfortunately, not much has changed. The VA obviously needs 
more and better people to adjudicate claims. The system is 
complicated and they could use people who get paid at a higher 
rate if they are accountable for their work.
    And, of course, unless work is measured rationally and 
people are evaluated based on a system that considers the needs 
of veterans and not the bureaucracy, things will not change. I 
say that again. You can go to a paperless system. You can 
introduce doctors to give medical opinions. But if the workers 
in the VA system are going to be promoted and given bonuses on 
productivity by moving a claims file from desk A to desk B, 
because that is how they internally measure, you are not going 
to make major changes in this system.
    Please encourage the VA to measure work from the point of 
view of the claimant, not the bureaucracy. As part of my job in 
the VA, I worked in and was in charge of quality. And one of 
the things that we learned how to do was to look at it from the 
point of view of the claimant. The claimant just gets letters 
from the VA.
    Have any of you ever looked at a statement of the case? 
There is usually about 8 pages to 14 pages of complete boiler-
plate. Some statutes and regulations that are quoted are 
relevant. Others are not. Then there is a short paragraph as to 
why the claim was denied.
    VCAA letters, as Richard said, are not claim specific. They 
are just generalized. They give no real help to veterans. We 
need to fix that.
    In order to test this system, NVLSP took on a few test 
cases, hard cases, cases where medical opinions were necessary, 
where lay evidence was necessary. We made two basic 
assumptions, that working with the VA was not worth our time 
and that we knew the system as well as they did and we would go 
out and get all the evidence necessary. We would get the 
doctors to evaluate the claimants based on our knowledge of the 
rating schedule.
    It took us about 8 months to get all that evidence. It took 
the VA 1 week to grant benefits at the hundred-percent rate. I 
say that to you because it is not important to veterans how 
quickly the VA makes the initial rating or decision. It is 
important in the overall scheme how quickly they come to a fair 
conclusion in the claim. That is the key measure.
    The VA adjudication system is rife with premature denials 
based on inadequate development, and failures to recognize 
important issues. All of that is driven by the need for 
production. This is not just based on my time working for the 
VA, which I did for many years. It is based on over 40 recent 
quality reviews conducted for the American Legion. All of these 
reviews are available to you. I know that Mr. Smithson of the 
Legion is testifying in the next panel.
    As far as doctors being available, it is a good thing if 
doctors are available to give medical advice to raters, but we 
certainly would not be happy if they were voting on their own 
medical opinions.
    Also, all of those opinions should be in writing and freely 
available to the veteran so that he or she could obtain 
evidence to rebut them because we have found in our experience 
that you can rebut very effectively VA medical opinions. Why? 
Garbage in, garbage out. The VA, in many cases, does not ask 
the right questions to its doctors and based on that, they get 
misleading medical opinions.
    If I had more time, I would go into that in detail. 
Possibly you will want to ask me about that.
    Thank you very much, and I will be happy to take any 
questions.
    [The prepared statement of Mr. Abrams appears on p. 76.]
    Mr. Hall. Thank you, Mr. Abrams.
    Mr. Cox, you are now recognized.

                STATEMENT OF J. DAVID COX, R.N.

    Mr. Cox. Chairman Hall, thank you for the opportunity to 
share the views of the American Federation of Government 
Employees on a very urgent matter of the growing claims 
backlog.
    As the sole representative of VBA employees who process 
these disability claims, AFGE knows firsthand about the 
hardships to our veterans from the backlog of 650,000 pending 
claims. This is a disservice to veterans and unacceptable to 
AFGE members, including the many veterans and service-connected 
veterans who work at VBA.
    We want to assist you in any way we can to address this 
crisis. The Veteran Service Representatives or VSRs and rating 
specialists who develop and rate cases are an extremely 
valuable resource and a source of guidance to this problem.
    I was a registered nurse at the VA for 23 years. I acquired 
most of the skills I needed from nursing school. In contrast, 
VBA claims processing skills are learned entirely on the job. 
No one understands better than a VBA claims processor how to 
fix the VBA claims process.
    Sadly, our input is no longer welcomed by management. At 
the national level, we are left out of groups addressing claims 
process improvement, training, performance standards, or skill 
certification. At the local level, management refuses to 
consider suggestions made by employees. These days, VBA 
management wants one thing from its workforce, make the 
numbers.
    AFGE and the VSOs who represent the frontline users of this 
process are the critical eyes and ears on the ground that can 
identify and oversee VBA reform.
    Therefore, we urge Congress to establish a joint VSO/AFGE 
Advisory Committee to focus on the claims process. As long as 
VBA production standards continue to be driven by politics 
rather than methodology, all attempts to improve the claims 
process and employee training will be undermined.
    And very often, these standards are set by managers with 
little or no claims processing experience. As a result, 
critical on-the-job training is cut short by managers anxious 
to put employees back in the assembly line. Make no mistake, 
these training gaps do contribute to the backlog. We must stop 
rewarding Regional Office Directors for quantity above all 
else. Claims accuracy and effective training should also be a 
part of their performance measures.
    We concur with The Independent Budget recommendation to 
give more accountability to the Compensation and Pension 
Service Director for the performance of the Regional Office 
Directors.
    We also need a lot more accountability when it comes to 
implementing claims process reforms. When the claims process 
improvement initiative was implemented in 2002, it was supposed 
to provide a uniform national model for all Regional Offices. 
Instead, 6 years later, we have 57 varieties in 57 different 
offices.
    The first step in any reform process should be a time-
motion study of the staffing needed to process different types 
of claims. To date, VBA has made minimal attempts to gather 
this critical data.
    We urge you to proceed cautiously with artificial 
intelligence. In its current stage of development, it cannot 
begin to replace the ability of an experienced employee to 
identify and analyze all the relevant evidence in each 
veteran's record. In contrast, a paperless record system is 
within our technological reach and long overdue.
    Centralization is no panacea for fixing the claims process. 
VBA has centralized its 57 call centers down to nine and is 
planning to centralize the fiduciary program. Yet, things are 
only getting worse. Centralization increases the distance 
between the veteran and the employees serving them.
    Veterans and taxpayers deserve a real cost benefit analysis 
of the impact of centralization on claims accuracy and 
timeliness and access for veterans.
    AFGE also supports The Independent Budget recommendation to 
complete the phase-in of VETSNET, but we urge VBA to make good 
on its promise to address glitches in VETSNET that are also 
slowing down the claims processing such as requiring employees 
to input the same veteran information multiple times. Employees 
should be able to submit reports of VETSNET's problems and 
other insights about the claims process to an online suggestion 
box that is taken seriously by management.
    Finally, AFGE is concerned that the claims process 
improvement pendulum has swung too far turning the claims 
process into an assembly line. There are many benefits when 
employees work the entire claim from the application to the 
appeal, including eliminating the extra time required for 
another employee to have to relearn the same claim.
    Our members really feel the loss of weekly case management 
meetings that used to give them the opportunity to discuss 
challenging claims, changes in the laws, and best practices.
    We look forward to working with Chairman Hall and the other 
Members of the Committee to improve this process and to serve 
American veterans.
    [The prepared statement of Mr. Cox appears on p. 80.]
    Mr. Hall. Thank you, Mr. Cox.
    Mr. Erspamer.

                STATEMENT OF GORDON P. ERSPAMER

    Mr. Erspamer. Thank you, Chairman Hall. I really appreciate 
the opportunity to be here today to deliver what I think is 
probably somewhat of a unique perspective amongst all the 
panelists you are going to hear from.
    I want to attack this problem, and I will accept Mr. 
Abrams' framing of the definition, that of the basic fairness 
of procedures, from a different standpoint.
    I pose the question, what do you suppose is the most 
institutionalized form of discrimination in statutes and 
regulations today? I would suggest to you that it is our 
veterans in that suspect classification because veterans are 
the victims of the most institutionalized versions of 
discrimination.
    What do I mean by that? I am referring to basic procedural 
rights rooted in the due process clause of our Constitution.
    First of all, veterans have at the Regional Office level no 
right to a lawyer, at least no right to pay a lawyer. They have 
no right to subpoena documents. The VA has that right, but 
rarely uses it. The veteran has no right to compel the 
attendance of witnesses, no right to issue subpoenas to VA 
doctors, for example, who may have critical evidence in support 
of or in contravention of a claim.
    Most often, it is the case that the veteran's treating 
physician is a VA physician. Yet, the veteran cannot call that 
doctor to testify at a hearing to support his claim.
    There is also no discovery. The veteran gets no discovery 
at any stage of the system. For example, if the veteran has 
been the subject of some misconduct by the VA or there is some 
critical evidence that is within the VA's control or the 
control of another governmental agency, the veteran gets no 
discovery.
    And then when you add to it the defects that are built into 
the structure of the Court of Appeals for Veterans Claims, I 
think you have a system that does not comport with the basic 
requirements of due process.
    And with respect to the court, I will mention one thing, 
but there are a number of problems, and that is a problem that 
has been referred to many times by former Chief Judge Nebeker 
of the Court of Appeals for Veterans Claims, and that is the 
court has no power to force Regional Offices to obey its 
decisions. They violate the decisions with impunity repeatedly 
over and over again.
    If any of you have ever read the Myth of Sisyphus, there is 
a solitary figure that climbs a hill, rolls a rock up a hill 
only to see it come down again. I would liken the VA system to 
that because each veteran must roll that rock up the hill. Even 
if there are a hundred thousand other veterans with the same 
claim, each has to go the entire mile and push that rock up 
that hill in order to get a relief.
    There have to be improvements in the procedures and that is 
why I have proposed a Veterans Bill of Rights. And I have 
attached it to my testimony and I will go through it briefly in 
a moment.
    But there is a second aspect to this institutional 
discrimination against veterans and one that the Committee is 
probably not even aware of, and that is the limitations on the 
rights of veterans to ever go into court. The Veterans Court is 
purely a paper record appeal. All other citizens of this 
country have the right to go into court and I mean the Article 
3 courts, the Federal District Courts.
    And when you look at the positions the Veterans 
Administration over the years has taken in cases involving 
veterans, it is deplorable. They take the position, for 
example, in recent litigation that we filed, Morrison and 
Foerster, on behalf of veterans, that veterans have no 
entitlement to medical care, notwithstanding the efforts of 
Congress to create the 2 year statute for medical care under 
the ``Dignity for Wounded Warriors Act.''
    According to the VA, there is no ability to enforce those 
rights at all in Federal Court because the veterans lack a 
property interest in the benefits, because there is no 
entitlement to benefits, because medical care is completely at 
the discretion of the VA. We decide what care you get, when you 
get it, and how you get it, and no one else can question us.
    Those are very, very basic problems with the system and I 
think the Congress needs to do something about this by passing 
legislation that says, look, veterans, you do have a basic 
property right under the Fifth amendment and the receipt of 
disability and death compensation, veterans, yes, you do have 
an entitlement.
    When you are a disabled veteran who has served our country 
and been wounded in Iraq or Afghanistan or heaven help us died 
there, you have a right to those benefits and you have the 
rights that all other citizens in this country, to have access 
to the courts and meaningful access at a meaningful time in a 
meaningful way. And that is the basic tenant of due process.
    And I would be happy to take questions, but I would just 
close with just an observation. There are many myths that have 
been circulating about the VA process for many, many years. I 
have been in the thick of it for a long time. I have seen it 
from the inside. I have seen it from the perspective of 
litigation against the Veterans Administration. And I can tell 
you that these are myths. You need to find some way to get 
beyond the myths and find out what is really happening and we 
need to bring the country around to where everyone is working 
for the veteran. The veterans need it now more than ever.
    Thank you.
    [The prepared statement of Mr. Erspamer appears on p. 83.]
    Mr. Hall. Thank you, Mr. Erspamer and to the rest of our 
second panel.
    First of all, I had an opportunity this morning at the 
breakfast with the Secretary of the Army and Chief of Staff and 
numerous other brass to speak with them about some of these 
issues and possible solutions we are talking about. And the 
Surgeon General and I were speaking about hopefully what will 
soon be an electronic handshake or handoff of information from 
DoD to VA.
    Also, when I was in Landstuhl, Germany, on my way back from 
Iraq in October, I visited with our returning soldiers and also 
with the staff and the Commander who assured me that in 
December, 2 months ago, we would be able to start handing off 
the onion, as he called it, that is being created of electronic 
records.
    We have come far from having a description of the wound 
written or the injury written with magic marker on the forehead 
of the soldier as he is put in the helicopter a few years ago. 
Now I am told of having an electronic record that travels from 
the battlefield, has another layer added in the helicopter, has 
another layer added at Balad describing the treatment, the 
medications, et cetera, in the plane to Germany, another layer 
in the hospital in Landstuhl, and then the entire electronic 
record coming back here to the United States to Walter Reed or 
Bethesda or wherever the service man or woman is returning to 
for further treatment.
    I am not under any illusion about this except for the fact 
that I am being told that this is beginning to happen. And this 
panel is not perhaps as in tune to that aspect of the solution 
as some of the other panels that we have heard from and that we 
will hear from.
    But I would start with you, Mr. Cohen. How much of a 
difference would it make in your opinion if a veteran's claim 
could start with a report from DoD that states what they have 
observed and diagnosed, what the condition of the returning 
soldier or veteran is as they enter VA's care?
    Mr. Cohen. It sounds wonderful on paper. However, the 
reality is that we are hearing horror stories of servicemembers 
who have breakdowns in Iraq, go for medical treatment, and are 
then told to sign off on a paper saying they have a preexisting 
personality disorder which then becomes the kernel of this 
onion, so to speak, and follows them into the VA system.
    And when they file their claim for Post Traumatic Stress 
Disorder and anxiety, they are told, no, this is a 
noncompensating preexisting medical condition which you had 
when you entered service even though it does not appear on your 
induction physical. There is some danger of that and that 
concerns me very much.
    Mr. Hall. Any idea what percentage of those kinds of 
inaccuracies or misdiagnoses we are looking at?
    Mr. Cohen. No. I do not have any numbers on that, but I 
have seen some information, which seems to indicate that there 
is a certain percentage of the people, maybe as high as a 
quarter of the diagnoses coming out as personality disorders 
even though there is no preexisting condition noted in an 
induction physical. And that concerns me very much about the VA 
then accepting diagnoses put in by the DoD.
    Mr. Hall. Or as Mr. Abrams put it, garbage in, garbage out.
    Mr. Cohen. Yes.
    Mr. Hall. Only done electronically.
    Mr. Erspamer, could you please describe for us with a 
little more detail your recommendation that VA scrap its paper-
based system and develop a system that allows information to be 
shared between the VHA and VBA?
    Mr. Erspamer. Yeah. I think it has been covered in some of 
the other testimony. I think the VA needs to gradually move, 
and you cannot do it in one day, but to a paperless system 
where all the claims files, all the medical information on the 
medical side and on the VBA side are all shared, where 
simultaneous users can share that file at the same time. It is 
all imaged on a computer, somewhere where they can all get 
access to a database.
    I cannot believe in today's world that we do not have that 
already because the paper record system for reasons I have 
explained in my testimony just creates enormous problems. We 
have to tackle the problem and maybe we do it a year at a time. 
We work back a year at a time every year. We move back in time 
until we get them all on a computer system. And I think that is 
absolutely essential.
    Mr. Hall. You indicate in your testimony that you think the 
abandonment of claims could be as high as 99 percent.
    Mr. Erspamer. Yes.
    Mr. Hall. How did you arrive at that figure?
    Mr. Erspamer. Well, in the prior litigation we did, which 
is mentioned in my testimony, we actually got discovery from 
the VA on the claim abandonment rate. And that is the number. 
It is somewhat dated. It has been more than 10 years old. That 
was the rate that existed back then. And so I am using that as 
a basis for going forward. And whether it is 90 percent, 95 
percent, or 99 percent, it is way too high.
    The bottom line is a lot of those claims that are abandoned 
are valid claims and they only get abandoned because the 
veteran does not have a lawyer and he gets very frustrated in 
trying to deal with a very complicated system that is totally 
baffling.
    Mr. Hall. How many claims were you talking about at that 
point?
    Mr. Erspamer. I do not remember the exact number at that 
time. But it would probably be, I would guess, would be around 
half of what it is today in terms of total number of claims.
    The big thing you need to understand is that the problems 
and the most important issue is the Regional Office level 
because most claims never get beyond the Regional Office level. 
They do not get to the appellate stage. The claims are 
abandoned for one reason or another at the Regional Office 
level and they die there.
    And what I am suggesting to you is they do not die because 
the claims are bad or they are invalid. They die because lack 
of access to counsel and because of the individual veterans get 
frustrated and give up. And I know that to be the case. I have 
seen many examples of it in my own experience.
    Mr. Hall. Thank you.
    Mr. Cox, it seems that the main flaw with the CPI model of 
claims processing is the lack of accountability. You highlight 
this problem in your testimony on pages three and four when you 
say that VBA is not held accountable for the quality and 
consistency of training at each RO nor the quality or accuracy 
of its completed work.
    Could you elaborate on that statement?
    Mr. Cox. Yes, sir. VBA is very numbers driven. Every day, 
it is produce your numbers. You have to get out the number of 
claims. There is the performance standards, those type things.
    We do not believe that there is the focus on the quality of 
work. I have heard other people give testimony today about the 
number of claims someone is expected to produce versus the 
quality of the work product that they produce in the end.
    And each Regional Office again has different processes with 
training. You need people to do the work, so you cut the 
training program short. We need you back on your job. We cannot 
let you go for training today to give people the necessary 
skills.
    And, again, the big issue with people that do the work in 
VBA, they do not come with ready set skills for those jobs. 
They come with skills, but it is all on-the-job learning. 
Doctors, nurses, lawyers, whoever, come with skills by basic 
education to do that type work. But in VBA, it is all on-the-
job learning. Hire someone to work in VBA today, they are going 
to be seasoned and ready to produce work at a good level maybe 
2 to 3 years from now.
    Mr. Hall. Thank you.
    And would you please enlighten us more about the current 
use of IT in claims processing at VBA? For instance, the 
RBA2000, BDN, VETSNET, how do these systems work together? What 
limitations or benefits do they pose for VBA employees?
    Mr. Cox. In my discussions with the employees who work at 
VBA, the way these programs work and the boxes come open on the 
computer. And, you know, I am not a computer guru, sir. But the 
boxes come open or they enter information. It does not 
automatically update and populate the other fields in the 
system. If they are entering data into one box, then when the 
next box comes up, they have to enter the same data again.
    And the way work flows in the development of claims and 
reviewing the claims that, again, they have to come all the way 
out of one area to go into another area where if the system was 
more integrated, they could immediately move from one spot to 
the other.
    Mr. Hall. So the lack of integration for development and 
adjudication of claims is part of the problem?
    Mr. Cox. Yes, sir.
    Mr. Hall. Could you further explain why you think the VA's 
current IT artificial intelligence efforts to move to a 
paperless environment are not the silver bullet for fixing the 
claims processing system and how long do you think those plans 
will take to impact claims processing in the short term and the 
long term? What do you think the effect will be? Is the current 
system capable of accepting artificial intelligence (AI) 
improvements without other process improvements?
    Mr. Cox. Again, I think there are things that you can do 
that would improve the processing of claims with the 
information technology. You can never replace the human element 
and how the claims are reviewed and understanding the data and 
those type things.
    AFGE supports the paperless record. In VHA where I worked 
for many years, while we are the world leader in the paperless 
record and the electronic record and to be able to have that in 
VBA, these claims examiners would not be constantly sitting 
down now writing a letter to someone chasing down this record 
or that record. It could all be there electronically very 
quickly. But I think you cannot develop a system that will take 
away the human element, sir.
    Mr. Hall. Thank you.
    Mr. Abrams, you commented on the obtuseness or the 
obscurity of VCAA letters to veterans and how unhelpful they 
are or how difficult they are for the lay person to understand.
    Mr. Abrams. Yes.
    Mr. Hall. Do you have more specific suggestions or----
    Mr. Abrams. Well, we would like them to be claim specific. 
One of the problems is a veteran might file enough evidence to 
clearly prove one of the three elements of service connection 
and what he really needs to submit is evidence on element 
three, but he has got one and two at least started.
    The VA letter will not really get into that. He will go out 
and he will go and repeat and spend his money and his time in 
some cases trying to reprove something that should have been 
conceded.
    Part of that is the way the VA has set up how its Regional 
Offices work. They have divided these groups of adjudicators 
into teams and the people who are making the final decision are 
not the people who are developing the claim. So the people 
developing the claim are leery of conceding certain factual 
predicates.
    That also impacts on examinations. Too many times we have 
seen a VA examination go to a doctor for PTSD where the veteran 
has a Combat Infantryman's Badge and the doctor looks at it and 
is not told to concede the fact that the veteran was in combat 
and that if he alleges a stressor linked to combat to concede 
that the stressor occurred.
    So the doctor looks at the records and goes I do not see 
any stressor. I cannot diagnose PTSD. So the vet is told you do 
not have PTSD. And he spends his money to go to a private 
doctor to diagnose PTSD when really the issue was stressor and 
the VA made an error in not telling the doctor to concede the 
fact that he was exposed to combat and suffered a stressor.
    These are the kind of things that need to be fixed. But, 
again, I stress unless you change the work measurement system, 
all of these are minor cures. The major cure is to get the VA 
to do it right in the first instance.
    Mr. Hall. Thank you.
    We, my office, had a 60-year-old claim, 84-year-old 
veteran, Navy, World War II, who had been misdiagnosed for 60 
years. Just a couple months ago we got him a PTSD rating of 100 
percent, which he deserved all along after having two ships 
blown out from under him in the Pacific.
    Mr. Abrams. Mazeltov.
    Mr. Hall. Well, thank you. But, you know, I am glad he 
lived to see it.
    I want to thank you. You have all been very helpful and 
very patient.
    And starting with Mr. Cohen and then anybody else who wants 
to comment on this last question, would you elaborate on what 
you mean when you say VA should focus more on accuracy and not 
speed?
    It seems to be a theme that has been mentioned by all of 
our witnesses in processing claims. Since the VA denies that 
this is the basis for determining production standards, speed 
that is, describe how VA should change this result and focus on 
quality, not quantity.
    Mr. Cohen. Well, the OIG report, which interviewed people 
who were involved in ratings leaves us with the conclusion 
that, in fact, speed is the criteria that people who work for 
the VA live or die by in terms of their awards and their 
bonuses.
    Now, at the same time, that same evaluation by OIG revealed 
that 50 percent of the people who were doing the ratings said 
the speed criteria prohibits them from adequately developing 
the claim before they decide it and from deciding it correctly.
    We know that in order to decide a claim correctly, you have 
to decide whether this particular claim should be service 
connected, whether the impairment should be service connected, 
the proper rating, and the proper effective date. All these 
things are decisions that have to be made right. If they are 
not made right in the beginning, what we end up with is the 190 
days in the Regional Office system and then you get a denial. 
And then 90 percent of them are abandoned.
    I know that is true because in the 15 years that I have 
been representing veterans, I have yet to find a case where a 
veteran came to me with a claim that had not already been filed 
and abandoned.
    So at the time they are ready to go into court, they may 
have filed this claim twice or three times and abandoned it 
each time after they got their initial denial.
    But when someone continues on it, then they are facing 
another 2 years in the Board of Veterans Appeals and it 
probably, because it was not developed properly, will come back 
again to haunt the VA and increase their backlog.
    If they took the time to develop it properly and to decide 
it properly, then they would not face the same claim again. But 
this requires adequate training because this is a complex area 
of the law.
    And our experience shows that the people who are doing the 
ratings do not have an adequate understanding of the rules and 
regulation they are supposed to rate it under. They are not 
keeping up with the court decisions. So they are not really 
able to effectively and accurately decide a claim.
    Mr. Erspamer. May I just add one more point to that, Mr. 
Chairman? Back in the 1980s when I was doing the Norris case 
and taking discovery in that case, which went to the United 
States Supreme Court, the issue of incentive compensation 
system in the VA was a central issue in that case. It is the 
same system today. Some bells and whistles have been changed, 
but it is fundamentally the same system.
    The problem is if you create a financial incentive with the 
adjudicators that conflicts with doing the case right, that is 
a system that is bound to fail. You cannot pit the financial 
interest of the rater or the adjudicator against the interest 
of the veteran.
    It is a system that is flawed in the inception and it has 
never been changed. It needs to be changed. And I think that is 
one thing all of the people on this panel probably agree with. 
That system has severe problems and they have been endemic for 
many, many years. No one has ever paid any attention to it.
    You know, there were two attorneys at the BVA who were 
indicted for doctoring and removing records from claim files in 
order to create an immediate basis for a remand decision, a 
quick remand decision about 10 years ago that involved 
thousands of claims.
    And that illustrates the depth of the problem and it is 
still there even though there have not been any recent 
indictments. The problems are still there.
    Mr. Hall. Mr. Cox, would you care to add anything to that?
    Mr. Abrams. I do, too.
    Mr. Cox. I think I would add to it from the medical 
perspective. Who would you want to do your cardiac bypass, the 
physician who can turn out the most and make the most money in 
the day or the one that can turn out your surgery with the best 
outcome and with the least complications and the best survival 
rate?
    And I agree with my colleagues. Do the claim properly first 
out, get it right, get that veteran what they deserve, so that 
they do have that good life thereafter and are taken care of.
    Mr. Hall. Thank you.
    Mr. Abrams, last word.
    Mr. Abrams. Well, I want to answer you with a story. We had 
a case where a veteran filed a claim for a bilateral leg 
condition. The VA did not have his service medical records. But 
in its eagerness to adjudicate the claim, the VA wrote him a 
letter and asked for continuity of symptomatology. The veteran 
did not answer within 60 days and his claim was denied and it 
went away.
    I was working for the VA at the time. I picked the case up 
on quality review. After the claim had been put back in the 
file bank, the veteran's service records came in. They showed 
that the veteran lost both his legs due to machine gun fire. I 
called the veteran. I said why did you not submit evidence. And 
he said how can I prove continuity of symptomatology when I do 
not have my legs anymore.
    The man was entitled in today's dollars to over $3,000 a 
month. Now, we quickly fixed it and got him his money, but that 
was simply the Regional Office trying to do something quickly 
to get work credit and it impacts----
    Mr. Hall. Mazeltov.
    Mr. Abrams. Thank you.
    But I want to read you what I wrote in 1987 talking about 
Gordie Erspamer and his lawsuit. I was working for the VA at 
the time. I was their legal advisor. And I said if Mr. Erspamer 
can show that our system pits the financial interest of 
adjudication officers, which today are service center managers, 
against the fair and reasonable treatment of our claimants, he 
would well be on his way to proving the VA does have an unfair, 
adversarial claims adjudication system.
    It is clear that the people in this panel all say that 
there is too much emphasis on productivity, not on quality. And 
in our solutions, we have to be reasonable. The VA needs more 
people to do this. But if they are going to get the people, let 
us make them accountable for doing the claims correctly at 
first.
    Independent quality review, a different work measurement 
system, and all the other improvements will help. And that will 
change this system. The VA will have to be brought kicking and 
screaming into this, but it will work.
    Mr. Hall. Minority Counsel has a couple of questions.
    Mr. Lawrence. Thank you, Mr. Chairman.
    On behalf of the Ranking Member, Mr. Erspamer.
    Mr. Erspamer. Yes.
    Mr. Lawrence. You stated that 99 percent of the claims at 
the Regional Office are abandoned. Could you elaborate on where 
you arrived at those numbers? Do you mean that if a claim is 
denied and somebody does not appeal the decision, is that what 
you consider an abandoned claim?
    Mr. Erspamer. It would include that circumstance. And I 
think I explained this in part in my first answer, but I think 
Mr. Cohen, I believe, gave a further explanation.
    Most claims, the veteran starts out representing himself, 
files a claim, gets a denial decision. If he does not appeal 
within a certain period of time, it lapses and that claim is 
deemed abandoned.
    Most often, veterans try a second time at the Regional 
Office or a third time or a fourth time or a fifth time. 
Eventually they may try to get some help somewhere along that 
process.
    And with each abandonment, the effective date, he loses the 
effective date unless he can show CUE, clear and unmistakable 
error. So the problem is you get the same claim over and over 
and over again. The veteran often abandons it.
    And the statistics I gave you, the 99 percent as I 
indicated earlier, came from discovery in the Norris 
litigation. And that is a dated figure, but it is probably 
roughly what it is today. I do not know any reason why it would 
change.
    But if you look at the number of claims filed, you will see 
that the same veteran files a claim over and over and over and 
over again. It is not efficient for the system either.
    Mr. Lawrence. Well, let me ask this.
    Mr. Erspamer. Yeah.
    Mr. Lawrence. If somebody opens a claim for, say myopia, 
that is not service connectable by statute and they do not 
appeal that decision that would then be considered an abandoned 
claim by the standard that you apply?
    Mr. Erspamer. Well, no. The standard I would apply assumes 
that we do not really know whether a particular claim is 
abandoned because it is a bad claim or it is a good claim, 
where the veteran does not have a lawyer or whatever. We do not 
know the answer to that question.
    Some abandoned claims are abandoned because perhaps the 
veteran thinks it is not a very good claim. I do not start from 
the proposition of assuming that veterans file false claims or 
invalid claims. There probably are a few of them.
    But, yes, in that 99 percent, probably are some claims that 
are abandoned because they are without merit. I would agree 
with that part of your assumption in your question.
    But I can tell you very many times from having studied many 
claim files in litigation that many abandonments are 
abandonments of valid claims and they are abandoned because a 
veteran does not know what to do. He does not know how to 
appeal or he lets the time run. That is a very common 
occurrence.
    And if you looked at the appeal dispositions, you will see 
that many dispositions on appeal are by summary dispositions 
because the veteran has not complied with the statutory time 
requirement. It is just too bad because a lot of deserving 
veterans lose out.
    Mr. Lawrence. Thank you, sir.
    I will be interested in the VA's response, what their take 
on that is.
    And for, Mr. Cohen, you said the VA's accuracy rate is 80 
percent, that it is actually more like 20 percent. And could 
you elaborate more on how you arrived at that?
    Mr. Cohen. Yes. If you look at the report of the chairman 
of the Board of Veterans Appeals and you look at the number of 
merit decisions where the Board decides either that they are 
reversing the decision of the Regional Office or that the claim 
was inadequately developed and sent back for redevelopment and 
you calculate out adding those two together, you will find out 
that it is over 80 percent of the claims either have to be sent 
back because the Regional Office did not do its job, made a 
rating without an adequate record, or outright denied it 
improperly.
    A lot of the cases that we see that get reversed by the 
Board involve things like presumptions, benefit of the doubt, 
and my own personal favorite is lack of clear evidence of 
aggravation. The VA is very fond of saying, well, you had a 
condition before you came into service and it should not be 
service connected because the change in your condition was not 
aggravated by service.
    The burden is on the VA to show it was not clearly 
aggravated by service and what we usually have is we usually 
have the veteran's doctor saying I believe that it was 
aggravated by service, the VA doctor saying, oh, it was not 
aggravated by service. So you have one piece of evidence on one 
side, one piece of evidence on the other side. Obviously you 
cannot make a decision which way it goes.
    The standard should say there is no clear evidence of lack 
of aggravation and the veteran wins. That is not the way the 
Regional Office does it. Frequently the Board will have to 
correct them on that.
    Mr. Lawrence. All right, sir. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hall. Thank you.
    Thank you to our panel. You have been most helpful and we 
will do our best to take all the information we are gathering 
and make some progress on these very important issues. You are 
now excused.
    And we would ask our third panel to come join us at the 
table, the witness table, Adrian Atizado; Assistant National 
Legislative Director of Disabled American Veterans (DAV); Paul 
Sullivan, the Executive Director, Veterans for Common Sense 
(VCS); Steve Smithson, Deputy Director of Veterans Affairs and 
Rehabilitation Commission, the American Legion; Gerald Manar, 
Deputy Director, National Veterans Service, the Veterans of 
Foreign Wars of the United States (VFW); and John Roberts, 
National Service Director of the Wounded Warrior Project (WWP).
    Thank you, gentlemen, for your patience as well. As usual, 
your full written statements are entered in the record. And you 
will each be recognized for 5 minutes starting with Mr. 
Atizado.

 STATEMENTS OF ADRIAN ATIZADO, ASSISTANT NATIONAL LEGISLATIVE 
DIRECTOR, DISABLED AMERICAN VETERANS; PAUL SULLIVAN, EXECUTIVE 
  DIRECTOR, VETERANS FOR COMMON SENSE; STEVE SMITHSON, DEPUTY 
   DIRECTOR, VETERANS AFFAIRS AND REHABILITATION COMMISSION, 
  AMERICAN LEGION; GERALD T. MANAR, DEPUTY DIRECTOR, NATIONAL 
   VETERANS SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
 STATES; AND JOHN ROBERTS, NATIONAL SERVICE DIRECTOR, WOUNDED 
                        WARRIOR PROJECT

                  STATEMENT OF ADRIAN ATIZADO

    Mr. Atizado. Thank you, Mr. Chairman.
    Mr. Chairman, Members of the Subcommittee, I am pleased to 
have this opportunity to appear before you on behalf of the DAV 
to address the Department of Veterans Affairs disability claims 
backlog and claims processing system.
    Mr. Chairman, it is evident that the claims backlog is 
growing and it is doing so successively each year. The 
complexity of the workload has grown as veterans are claiming 
greater numbers of disabilities and the nature of such 
disabilities are ever more sophisticated.
    At the current rate, we can reasonably expect VA's caseload 
to pass 1 million claims at the current rate. However, if the 
most recent trend in increased staffing is sustained and 
recommendations that the DAV and The Independent Budget are 
utilized in conjunction, we believe VA can gain control of the 
growing claims backlog.
    In addition to the mismatch of VBA staffing and workload, 
the DAV has maintained and has been confirmed, as mentioned in 
previous panels, by the VA's Office of Inspector General's 
survey that VA should invest more in training its adjudicators 
and that such training should have a higher priority.
    The DAV has consistently stated that quality is the key to 
timeliness. Higher quality has a multiplier effect that reduces 
duplicative work and stems the flow of additional claims to an 
already overburdened system.
    With additional tools through training, the DAV also 
believes VA should hold its adjudicators accountable for higher 
standards of accuracy. In fact, the VA acknowledged in 2000 
that management needed tools to monitor individual performance. 
This led to the Systematic Individual Performance Assessment or 
SIPA Program.
    Unfortunately, due to inadequate resources, the VA 
abandoned this initiative in 2002 and proficiency is now 
apparently subjectively assessed by supervisors based on their 
day-to-day perceptions of employee performance.
    We submit to you, Mr. Chairman, that without any standard 
quality assurance review on the individual level, we do not 
believe optimum quality can be expected nor achieved.
    DAV believes various oversight and policy changes should be 
concurrently implemented to reduce VA's claims backlog while 
also improving services to VA's clientele.
    For example, numerous developmental procedures in the VA's 
claims process collectively add to the enormous backlog of 
cases. However, some of those developmental procedures are 
arbitrarily abused causing overdevelopment of a pending claim.
    Specifically the VA consistently refuses to render 
decisions in cases where the claimant has submitted a private 
medical examination and opinion until such time as VA has had 
its own medical examination and opinion obtained. We believe 
such egregious behavior should be curbed, Mr. Chairman.
    In light of the known hardships of prosecuting claims based 
on combat injuries and the type of warfare currently waged in 
Iraq and Afghanistan, the DAV believes Congress should also 
amend section 1154(b) of Title 38. This would clarify what type 
of military service would be treated as having engaged in 
combat.
    The DAV urges Congress to consider defining a veteran when 
engaged in combat as one who during active service served in a 
combat zone for purposes of section 112 of the Internal Revenue 
Code of 1986 or predecessor provision of law.
    Mr. Chairman, this concludes my oral testimony. We hope the 
Subcommittee will review these recommendations and those in my 
written testimony for inclusion in your legislative plans.
    Again, thank you for the opportunity, and I would be happy 
to answer questions you may have.
    [The prepared statement of Mr. Atizado appears on p. 89.]
    Mr. Hall. Thank you, sir.
    We will now recognize Mr. Sullivan for 5 minutes.

                   STATEMENT OF PAUL SULLIVAN

    Mr. Sullivan. I would like to thank Chairman Hall and 
Members of the Subcommittee for inviting Veterans for Common 
Sense to offer solutions on eliminating the enormous backlog of 
650,000 claims at VA Regional Offices.
    First, as a friend and former aide to the late Congressman 
Tom Lantos, I just wanted to recognize his great service on 
behalf of veterans, civil liberties, and human rights. I am sad 
to see him have passed away.
    In addition, since today is Valentine's Day and it is 
hospitalized veterans day, I would hope we would also keep 
hospitalized veterans in our thoughts today.
    VCS wants to start off by thanking the VBA Regional Office 
employees who are here in this hearing room. Veterans for 
Common Sense wants to help the VBA employees help our veterans.
    Now, regarding VBA's massive claims backlog, a failure to 
address this claims catastrophe has needlessly increased 
suffering among our returning veterans.
    According to published government and news reports, the 
number of broken homes, unemployed veterans, drug and alcohol 
abuse, homelessness, and even suicide are all rising, problems 
that are expected to worsen unless VBA resolves the claims 
backlog.
    VCS believes we must focus on two priorities. The first is 
veterans must come first and the second is veterans' claims 
must be decided accurately within 30 days.
    There are two ways to bring reform to VA. The first is an 
overhaul approach in the long term and the second is an 
incremental approach in the short term. There have been lots of 
incremental approaches, a lot of them great ones suggested 
here.
    VCS supports the Veterans' Disability Benefits Commission 
report. We also support the recommendations by Harvard 
Professor Linda Bilmes, the recommendations made by Gordon 
Erspamer from Morrison and Foerster, the veterans groups, AFGE, 
NOVA, and the NVLSP. Now, those are all long-term solutions.
    Now, in the short term, there are two quick things that 
Congress can do. One would be to pass a law that would simplify 
and expedite claims processing at Regional Offices. This would 
allow VA employees to automatically approve claims for TBI and 
PTSD. This means fewer errors and faster benefits for the 
hundreds of thousands of veterans expected to file TBI and PTSD 
claims after serving in Iraq and Afghanistan.
    This change is needed because the military does not 
document all bomb blasts and all combat events, thus making it 
hard for VA to verify and to process TBI and PTSD claims.
    Our proposal would establish that a deployment to the war 
zones means VBA concedes there was a concussive blast or 
psychological stressor sufficient to cause the TBI or PTSD.
    Another short-term solution for VBA is enforcing 
accountability. Almost everyone up here has mentioned 
accountability.
    In 2001, the current Under Secretary for Benefits was fully 
informed about all of VBA's vast problems while leading the 
Claims Processing Task Force. While in office, he should have 
planned for expanding VBA when the President started the 
Afghanistan and Iraq wars.
    He should have been aware of briefings given by me to some 
of his top aides about the claims crisis exacerbated by a flood 
of claims from veterans. This serious problem of Iraq and 
Afghanistan war veterans was first reported on the front page 
of the Wall Street Journal in 2003.
    VCS believes that Congress should hold the entire 
Administration, VBA, VA, Office of Management and Budget (OMB), 
and the White House accountable for systemic leadership 
failures to assist our disabled veterans. If we change the 
laws, but we do not change the leadership that is failing to 
implement the laws, we are still going to be crashing VA over 
and over again.
    For these reasons, VCS believes that the current Under 
Secretary for Benefits should step down and be replaced with a 
nonpartisan career official loyal to veterans, not the White 
House and not the OMB.
    In conclusion, Veterans for Common Sense believes VA, VBA, 
congressional leaders, and others should work closely with VBA 
employees, academics, VSOs, and advocates to find common-sense 
solutions. The first, of course, is to change the law for 
presumptions of PTSD and TBI.
    To finish, as General Omar Bradley said, we are dealing 
with veterans, not procedures, with their problems, not ours. 
VCS asks if Congress cannot fix this problem, then who will?
    Thank you, Mr. Chairman. I will be glad to answer any 
questions.
    [The prepared statement of Mr. Sullivan appears on p. 94.]
    Mr. Hall. Thank you, Mr. Sullivan.
    Mr. Smithson, you are now recognized.

                  STATEMENT OF STEVE SMITHSON

    Mr. Smithson. Good afternoon, Mr. Chairman. Thank you for 
this opportunity to present the American Legion's views on the 
VA claims backlog and the claims processing system.
    As of February 9th, 2008, there were more than 657,000 
total claims pending in the Veterans Benefits Administration, 
more than 402,000 of which were rating cases. There has been a 
steady increase in VA's pending claim backlog since the end of 
fiscal year 2004 when there were more than 320,000 rating cases 
pending.
    The majority of the claims processed by the VBA's 57 
Regional Offices involve multiple issues that are legally and 
medically complex and time consuming to adjudicate. Providing 
quality decisions in a timely manner has been and will continue 
to be one of the VA's most difficult challenges.
    Inadequate staffing levels, inadequate continuing 
education, and pressure to make quick decisions resulting in an 
overall decrease in quality work has been a consistent 
complaint among Regional Office employees interviewed by 
American Legion staff during Regional Office quality checks.
    It is an extreme disservice to veterans, not to mention 
unrealistic to expect VA to continue to process an ever-
increasing workload while maintaining quality and timeliness 
with the current staff levels.
    Despite the recent hiring initiatives, Regional Offices 
will clearly need more personnel given current and projected 
future workload demands.
    Since 1996, the American Legion, in conjunction with the 
National Veterans Legal Services Program, has conducted quality 
review site visits at more than 40 Regional Offices with the 
purposes of assessing overall operation.
    Our quality review team visits a Regional Office for 1 week 
and conducts informal interviews with both VA and Veteran 
Service Organization staff. The team also reviews a random 
sample of approximately 30 to 40 recently adjudicated American 
Legion represented claims. We find errors in approximately 20 
to 30 percent of the cases we have reviewed.
    The most common errors include inadequate claim development 
leading to premature adjudication of claim, failure to consider 
reasonably inferred claims based on evidence of record, ratings 
based on inadequate VA examinations, and under-evaluation of 
disability, especially mental conditions.
    In our opinion, these errors are a direct reflection of 
VA's emphasis of quantity over quality of work and validate our 
concern that emphasis on production continues to be a driving 
force in most VA Regional Offices, often taking priority over 
such things as training and quality assurance. This frequently 
results in premature adjudications, improper denials of 
benefits, and inconsistent decisions.
    Unfortunately, VA's end product work measurement system as 
discussed in detail in my written statement creates a built-in 
incentive to take shortcuts so that the work credit can be 
taken. This system in effect rewards Regional Offices for the 
gross amount of work they report, not whether the work is done 
accurately or correctly, often resulting in many claims being 
prematurely denied.
    Last, I would like to direct your attention to some 
nonlegislative remedies VA could use to help address its 
current unmanageable backlog. Several recommendations are 
discussed in detail in my written statement.
    In closing, the best way to help veteran claimants is to 
fix the entire VA claims adjudication system. Piecemeal 
solutions do not work and should be avoided. The VA work 
measurement system should be changed so that VA Regional 
Offices are rewarded for good work and suffer a penalty when 
consistent bad decisions are made.
    Managers, rating specialists, and Board of Veterans' 
Appeals (BVA) law judges and attorneys should be awarded for 
prompt, careful work and they should also be held accountable 
when they make bad decisions. American veterans seeking VA 
disability benefits deserve better treatment than what they are 
currently getting from VA.
    Mr. Chairman, that concludes my statement. I would be happy 
to answer any questions you may have.
    [The prepared statement of Mr. Smithson appears on p. 96.]
    Mr. Hall. Thank you, Mr. Smithson.
    And, Mr. Manar, is that the correct pronunciation of your 
name?
    Mr. Manar. That's correct. Thank you.

                  STATEMENT OF GERALD T. MANAR

    Mr. Manar. Chairman Hall, thank you for this opportunity to 
present the views of the 2.4 million veterans and auxiliaries 
of the Veterans of Foreign Wars of the United States on the VA 
claims processing system.
    My written testimony discusses at length many events over 
the last 30 years which have changed the world in which claims 
are adjudicated. Annual legislation, staffing limitations, 
implementing and modifying regulations, changes in leadership, 
mismanagement, failed oversight, and court decisions are just a 
few of the reasons why the backlog at VA stands perilously 
close to 900,000 compensation, education, and appeal cases.
    We hope that you consider our testimony as you ponder what, 
if anything, you can do or should do in the coming weeks and 
months to help the VA better serve veterans.
    This hearing today focuses on the claims processing system. 
Invariably when looking at the process, it is easy enough to 
ask VA why do you do it that way. Why does it take, for 
instance, so long to develop a claim when the insurance 
industry can decide a claim in a matter of days?
    The answer lies in the unique set of rights afforded 
veterans by a grateful Nation in recognition of their service 
to our country. The insurance industry requires the insured to 
provide the information it needs to pay a claim. If the insured 
does not provide the information in a timely manner, the claim 
does not get paid.
    The VA on the other hand is required by law to try and 
obtain nongovernmental information not just once, but twice, 
before the burden shifts to veterans. And the VA must spend 
whatever time is necessary in its efforts to get governmental 
records. The VA must either receive government records or be 
told that they do not exist.
    The point here is that VA operates by a very different 
veteran-friendly set of rules which imposes burdens on the 
government that are not faced by private industry. As a 
consequence, any comparison between VA and private industry is 
like comparing apples to, say, canines. They are not in the 
same genus, species, class, or family.
    We believe that there is no quick fix to fixing the 
problems in VBA. There is only the opportunity for steady and 
deliberate improvement.
    Again, we are convinced that there is no magic bullet. Any 
single plan that makes the claims processing system simple and 
easy will make things only marginally simpler and easier on the 
VA and will occur at the expense of the rights and benefits of 
at least some veterans, dependents, and survivors. Any such 
plan is simply unacceptable.
    There are a number of things that can be done to improve 
service and maximize efficiencies. The claims processing 
improvement model dictates the physical structure of claims 
processing teams within a Regional Office Service Center. It 
imposes uniform structure, staffing, and duties on Regional 
Office management. They deviate from the model at their peril. 
It has been in place for over 5 years and it has known 
limitations and problems.
    Two years ago, a group of supervisors and managers were 
asked to study the CPI model and make recommendations for its 
improvement. Although they spent months diligently working on 
the task and reportedly made at least several significant 
recommendations, their report has never been finalized and the 
changes they suggested have not been implemented.
    Since it is our view that the claims processing improvement 
model has significant problems and limitations, we recommend 
that an impartial third party critique its strengths and 
weaknesses and recommend changes that will improve the 
structure through which claims are processed.
    We discuss in our written testimony the current VBA policy 
of denying replacement staff to offices which are not 
performing well. In our view, VA either needs to adequately 
address the problems in those offices or shift the claims 
processing to other offices since veterans in those 
jurisdictions are the ones who suffer the most from extended 
delays and poor quality.
    We have offered other suggestions and observations in our 
testimony on the VCAA, how to encourage ready-to-rate cases, 
informal claims, the use of computer technology, and how to 
migrate claims processing to an all electronic environment. We 
hope that you find them to be informative and useful.
    In the end, it is our belief that VBA has difficulty 
effectively dealing with change. They appear to react to change 
rather than anticipate it. They need to learn how to better 
manage change to minimize its impact on employees and veterans.
    In our view, VA needs to change its corporate attitude and 
work toward adjusting to change, managing change, and 
accommodating the challenges that come with change. If they can 
do that, if they accomplish that, then we are certain that 
veterans can be and will be better served than they are today.
    The programs are sound. The protections afforded veterans' 
rights are justified and necessary. We caution, however, 
against any radical action that changes veterans' programs for 
the sole purpose of solving the backlog and timeliness 
problems.
    The VFW does not support proposals by Professor Linda 
Bilmes nor the Dole-Shalala Commission recommendations 
concerning the compensation program.
    Thank you for this opportunity to testify before you today. 
I will be happy to respond to any questions you may have.
    [The prepared statement of Mr. Manar appears on p. 101.]
    Mr. Hall. Thank you, Mr. Manar.
    Mr. Roberts.

                   STATEMENT OF JOHN ROBERTS

    Mr. Roberts. Thank you, Mr. Chairman, distinguished Members 
of the Committee.
    Our written testimony is on record, so I will highlight a 
few items.
    I would like to start off with agreeing with some of the 
comments made by Mr. Abrams on the second panel. I have a 
unique experience. Prior to my position with the Wounded 
Warrior Project, I was a supervisor with VBA.
    I agree until you change the current measurement system for 
production, you are going to continue to have a problem. When 
you put employees into a position where they have to worry 
about their job and not the veteran, you are going to have a 
problem. It becomes an ``us'' versus ``them'' type situation.
    Currently I disagree with some of the comments made earlier 
on other panels. I believe quality is an issue for VA because I 
have seen more employees in trouble for quality issues than I 
have production.
    So as a supervisor, I would do a random selection of cases 
per employee per month. And this was computer generated. It had 
no influence on whether I liked the employer or not. The 
computer generated what I was going to review and what I was 
not going to review. Therefore, their employee never knew what 
was going to be taking a look at for their quality issues. So 
some of the issues I agree with. Some I disagree with.
    Now, clearly the Wounded Warrior Project deals strictly 
with only the OIF/OEF generation of veterans. However, all 
these problems, they affect all generations of veterans.
    Therefore, everybody that has come before you today does 
have their own ideas, their own recommendations. However, there 
is no easy fix. That has been said several times. There is no 
silver bullet.
    We do recommend any advancement on technology be 
researched. However, that is not going to be a quick fix or 
solution to the problem.
    The VA does have in its authority to award what is called a 
prestabilization rating to the newly injured, which this would 
allow VA to get money in the hands of the servicemen being 
discharged from service as soon as possible and then they can 
go back and look at the other issues.
    As a National Service Director, I have traveled from 
military facilities across the country. On one visit to Camp 
Lejeune, I witnessed what I considered a one-stop shopping. 
They actually had a fully functional team within Camp Lejeune 
which consisted of a supervisor, a rating specialist, veterans 
service representatives. Each one of them, they had medical 
professionals there to conduct exams. The file never had to 
leave Camp Lejeune. It was done right there, which I question 
sometimes why it is not done at all the major military 
facilities.
    I understand BDD is in place. But if you can put people at 
all the major military facilities, it seems like it would cut 
down on some of the shuffling files back to other locations.
    Now, complying with the recommendation of the Veterans' 
Disability Benefits Commission to incorporate medical expertise 
into the rating process, by necessity, VA disability 
compensation claims are being rated by individuals who lack 
medical experience. As a result, if more explanation is needed 
on a particular exam, a further delay is created when the file 
is required to be sent back to the examiner for clarification.
    To remedy this, WWP agrees with the VDBC recommendation 
that VA raters should have ready access to qualified healthcare 
experts who could provide advice on medical and psychological 
issues that arise during the rating process.
    Currently, right now I do know when I was a supervisor that 
VA gave limited access to VBA employees to access VHA records 
outside their area of jurisdiction. This is an easy fix, I 
believe, if you give more VBA access to other VHA facilities. 
That is something that could be easily done.
    Most of our recommendations are very simple. I am very 
familiar with the CPI process. We are not advocating the 
removal of it as this would cause even more problems than you 
have now. However, we are in favor of allowing Regional Offices 
the flexibility to adjust their current system they have in 
place to utilize the strengths of their employees.
    Each office has employees that are better at one thing or 
another. If you allow people to adjust the current system, the 
current CPI system, they may have better processes in place 
they could use at their own office. Not every system works for 
every office across the country.
    Currently ROs are graded on the number of claims they 
complete each month. Because cases can be complex, there are 
different times in development process based on the complexity 
of the claim. However, you could take one with PTSD, brain 
injury, and an amputation. But if you go ahead and grant the 
amputation, you get money in the veteran's hands. You can go 
back at a later time and finish out the other issues that are 
more complex.
    As I said, our written testimony is on record. Therefore, 
we welcome any questions you may have. Thank you.
    [The prepared statement of Mr. Roberts appears on p. 107.]
    Mr. Hall. Thank you, Mr. Roberts.
    Mr. Roberts, for the generation of veterans that the 
Wounded Warrior Project serves, a lot seems to hinge on getting 
accurate information from DoD.
    There seems to be an effort underway to get medical records 
to the VHA, but does that also benefit the VBA in the same way? 
Is there something missing in this records transfer process?
    Mr. Roberts. Well, right now it is. You know, in my recent 
testimony last month when I came in, there is a problem now. 
You have National Guard, you have Reservists, and then you have 
regular active-duty servicemen deploying and at any given time, 
they are redeploying on numerous occasions.
    When they redeploy, the records go with them. When they 
come back, they refile a claim and you have to start the 
process all over again. Unfortunately, you have the record 
management centers that are receiving these records, DD 214s.
    There are so many different factors that play into why it 
takes so long to get a claim finished that if the records came 
straight from DoD into wherever that veteran is going to be 
located, if it is at the military facility where you staff 
personnel to rate the claims right there before they even leave 
to go to their home of record, yeah, that would be an easy 
transfer. You take them from one location, one building to 
another building. It would benefit VBA in that aspect.
    Mr. Hall. Thank you.
    Mr. Smithson, you mentioned that the American Legion does 
quality reviews, so I am sure you are familiar with the CPI 
model of claims process that VA employees.
    We have heard during our last hearing on artificial 
intelligence a description of how six teams of people handle 
one claim.
    What is your opinion or your observations about that 
process and should we keep it or go back to a case management 
model or somewhere in between?
    Mr. Smithson. Well, when we go out and do our quality 
review visits, we talk to people. We talk to both the VSOs and 
the VA personnel, both managers and the front-line people. And 
we have heard a consistent theme of problems or complaints 
about the CPI model.
    The first one is basically it is an assembly line 
mentality. Under the old case management system, there was more 
of a pride in ownership. Now it is an assembly line. You move 
it on.
    There also tends to be, I do not know whether it is 
intentional or it is just a product of the system, but we have 
heard that there tends to be discouragement of communication 
between, say, developers and raters. You know, the developers 
do the development. They move it on to the raters. There is not 
any interaction in the process.
    One case in point, and we have heard this from both raters 
and developers, rating veterans service representatives (RVSRs) 
and veterans service representatives (VSRs), is the examination 
request process. The VSR has to write up that exam request for 
the doctor. They put the information they want from the doctor, 
medical opinion, that type of thing, and oftentimes they are 
not properly trained to write it up. They are not the one 
rating the claim, but they are the one having to write it up 
for the rater to come back and then look at.
    And so we have heard from both the VSRs and the person who 
actually rates the claim that there needs to be more 
communication in that process, possibly letting the rater be 
involved in that process of doing the exam request versus the 
developer. So that has been a problem.
    And also we have also heard the rotation of employees tends 
to cause problems as well. And we also learned during our 
visits that some offices do certain parts of the CPI and some 
offices tend to ignore certain portions.
    So I do not know if the whole thing should be scrapped, but 
it definitely needs to be examined because both the managers 
and the people that actually have to implement it, the 
frontline workers, have concerns.
    Mr. Hall. Thank you.
    Mr. Manar, you stated in your written testimony that VA 
leadership has experimented with different claims processing 
models and configurations of work activities.
    Can you give us more details as to what sort of experiments 
these were or how long the VA has been experimenting with these 
claims processing models and did any of them have potential 
that you thought was worthy of following up on?
    Mr. Manar. In the context in which you use it, experiment 
probably is too strong a word. I was thinking over the course 
of my career with the VA. I started with the VA at a moment in 
time when they were just moving into the units and section 
concept.
    As the adjudication officer out in Los Angeles, I was 
charged with incorporating the case management concept and to 
bringing it into fruition. And then finally I finished up my 
career at the Washington Regional Office under the CPI model.
    So I have had an opportunity to experience it all and each 
model has its own pluses and minuses. I am convinced, however, 
that there are significant flaws in the CPI model. It is only 
marginally less flawed than the case management system.
    It could be it is just because I grew up in it and I was 
most comfortable with it, but I think that the unit and section 
concept approach offered the greatest flexibility while still 
allowing a relatively small group of people to focus on and 
manage a particular batch or digit range of the cases in front 
of them. It seemed to me that there was greater accountability 
under the unit and section concept than more currently.
    The CPI model has so many flaws and problems that it is 
difficult to describe in a short period. So that is it. If I 
could wave a magic wand, I think we would go back about 10 
years and try and do it the old-fashion way, which seemed to 
process claims pretty efficiently and quickly. And I think 
quality, if not any better, was certainly no worse than it is 
today.
    Mr. Hall. Thank you.
    Mr. Sullivan, did you want to comment on that same 
question?
    Mr. Sullivan. No.
    Mr. Hall. No? Okay. Well, in that case, Mr. Sullivan, could 
you provide any information on why National Guard and Reserves 
are nearly three times as likely to have their claims denied?
    Mr. Sullivan. Mr. Chairman, I wish I could give you a 
thorough answer. What we have done at Veterans for Common Sense 
is identified the problem.
    About a year ago when we analyzed the claim activity of 
Iraq and Afghanistan war veterans, we identified that Guard and 
Reserve were about twice as likely to have their claim denied 
than active-duty soldiers. And now that rate is almost three 
times as high, fourteen percent versus 5 percent.
    What we would like to know is, is it because of a lack of 
outreach? Is it a lack of the records being unable to be found? 
Is it a lack of redeployment? We do not know.
    What we would like to do is ask that it be investigated to 
find out what it could be. But it is a significant problem 
because it seems to be getting worse.
    Mr. Hall. That is a powerful piece of information. Colonel 
Norton, one of our witnesses in a hearing recently said, his 
slogan that stuck in my head was ``same service, same 
battlefield, same benefits.'' And he was talking about 
educational benefits in that particular hearing, but I would 
say, you know, that the same should go for all of the benefits, 
and disability included.
    Mr. Sullivan. Mr. Chairman, some of it may eventually be 
addressed if, for example, benefits delivery at discharge was 
forward deployed at National Guard and Reserve armories and 
demobilization sites. Again, there are a lot of reasons why 
this might be happening.
    I think what we should try to do here is to find out what 
are the facts, what is going behind it, and then to try to find 
some solutions. But BDD, expanding that more thoroughly for 
National Guard and Reserve, it does not currently exist for 
them, may be part of the answer to solving it.
    Mr. Hall. Thank you.
    Mr. Atizado, you mentioned quality in your statement as a 
key issue. So could you tell us more about what you envision as 
a better approach for the VA? How can individual managers and 
employees be more accountable and is there a better approach 
than the STAR Program?
    Mr. Atizado. Thank you, Mr. Chairman.
    The STAR Program has a number of limitations and one of 
which is it does not allow for any kind of root cause analysis, 
any kind of trend analysis. And it is only limited to the 
Regional Office level, not down to the section or individual 
level.
    As I had mentioned in my testimony, the SIPA Program which 
was created and eventually abandoned in 2002, we were hopeful 
that would actually get funded the following year or any 
subsequent fiscal year, but unfortunately that has not.
    The reason we believe that a more individualized quality 
review or quality assurance program should be in place is 
simply because if you do not know what the problem is, how can 
you propose a solution to it? And if we cannot somehow show 
where the issue is, whether it is a single individual or a 
group of individuals or a particular process, you know, the DAV 
comes from the position that adjudicators and rating 
specialists and developers are all inherently in the job to do 
service for veterans. The problem we see is that the workload 
is dragging that away from them.
    Our relationship with the adjudicators hinges on their 
attitude. If they are open for debate or a discussion to assist 
the veteran, it makes the quality of the claim and the decision 
of the claim more in favor of the veterans, particularly if the 
evidence supports that.
    Unfortunately, as my colleagues have mentioned, they are 
getting beat down by the requirements to produce rather than 
produce good work. And we believe that some kind of tool, 
whether it be the SIPA Program or some other standardized 
quality review instrument, be utilized or should be utilized to 
achieve the quality we are looking for.
    Mr. Hall. Thank you.
    The Minority Counsel will submit the Ranking Member's 
question for the record.
    [No questions were submitted.]
    Mr. Hall. You have all been most helpful and patient and I 
thank you all. This panel is now excused.
    And we would ask our fourth panel to join us, Michael 
Walcoff, Deputy Under Secretary for Benefits, U.S. Department 
of Veterans Affairs; Diana Rubens, Associate Deputy Under 
Secretary for Field Operations of the Veterans Benefits 
Administration; Bradley G. Mayes, Director of Compensation and 
Pension Service, Veterans Benefits Administration of the U.S. 
Department of Veterans Affairs.
    Thank you also for your patience. Had we known, we would 
have called this meeting to start at four o'clock instead of 
two o'clock. But at any rate, thank you for being here. And, of 
course, your statement is entered in the record as written, so 
feel free to highlight or shorten it or whatever you choose.
    Mr. Walcoff.

   STATEMENT OF MICHAEL WALCOFF, DEPUTY UNDER SECRETARY FOR 
BENEFITS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; ACCOMPANIED BY DIANA RUBENS, ASSOCIATE DEPUTY 
    UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS BENEFITS 
   ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND 
 BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND PENSION SERVICE, 
 VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS 
                            AFFAIRS

    Mr. Walcoff. Mr. Chairman, thank you.
    Mr. Chairman, Members of the Subcommittee, thank you for 
providing me the opportunity to appear before you today to 
discuss the Veterans Benefits Administration's claims inventory 
and claims processing system.
    I am pleased to be accompanied by Ms. Diana Rubens, VBA's 
Associate Deputy Under Secretary for Field Operations, and Mr. 
Brad Mayes, VBA's Director of Compensation and Pension Service.
    My testimony will focus on two efforts we currently have in 
progress to improve claims processing, our aggressive hiring 
initiative, and an independent study of the claims process 
conducted by IBM Global Business Systems.
    Before I begin discussing our efforts to improve the claims 
process, I would like to talk about the inventory and 
productivity.
    As of January 31st, 2008, VBA's pending inventory was 
397,077 claims. And I want to stop here because I want to talk 
about some of the other numbers that have been kind of 
mentioned in previous testimony.
    There were several people, Mr. Cohen, I believe, mentioned 
650,000. He also talked about 177 days in the same paragraph 
that he talked about 650,000. And I would tell you that I 
believe that is a little unfair in that the 177 days is how 
long it takes us to do our rating claims which is the 397,000. 
If you throw in our nonrating claims which gets it to 650,000, 
our timeliness is about 130 days. So if we are going to use the 
650, then let us use the 130 in terms of timeliness.
    And I believe that Mr. Manar threw in education claims to 
take the number up around 800,000. And our timeliness on 
education claims, especially supplementals, is approximately 12 
days. So that would really bring our timeliness down. But I do 
not think that would be an accurate reflection of what we are 
here for today.
    Basically I believe the 397,000 number are the group of 
cases that we are really talking about at this hearing and the 
timeliness for that is about 180 days.
    There are numerous factors that contribute to that number. 
The two primary ones being the increase in the number of claims 
filed and the increased complexity of those claims. The numbers 
of veterans filing initial disability compensation claims and 
claims for increased benefits has increased every year since 
fiscal year 2000.
    In fiscal year 2007, we received 838,141 rating-related 
claims compared to 578,000 in fiscal year 2000, a 45-percent 
increase. This high level of claims activity is expected to 
continue over the next years due to claims from Operation Iraqi 
Freedom and Operation Enduring Freedom veterans, the addition 
of type two diabetes as an Agent Orange presumptive disability, 
more beneficiaries on the rolls with resulting additional 
claims for increased benefits, and improved expanded outreach 
to active-duty servicemembers, Guard and Reserves, survivors, 
and veterans of earlier conflicts.
    VBA's inventory has remained at approximately the 400,000 
level for the last year. During that time, VBA has become much 
more productive, over 21 percent more productive compared to 2 
years ago.
    If you look at the current fiscal year alone, our 
production is already up 13 percent compared to fiscal year 
2007. In fiscal year 2008, we expect to make decisions on over 
878,000 claims and in 2009, that number goes to 942,000. Our 
increased productivity will eventually have a significant 
positive impact on our inventory.
    VBA is continually seeking new ways to decrease the pending 
inventory of disability claims and shorten the time veterans 
must wait for their decisions. Key to our success will be 
ongoing long-term effort to enhance and upgrade our claims 
processing system through integration of today's technology.
    In the near term, we have two initiatives that I want to 
highlight. In fiscal year 2007, we implemented an aggressive 
nationwide hiring initiative. More than 1,800 new employees 
have been added since January of 2007 and our hiring plan will 
add an unprecedented 3,100 additional employees by the end of 
this fiscal year.
    To enhance rapid integration into the veterans claims 
process, we have modified our employee training program to 
focus on initial training on specific claims processing 
functions. This will allow new employees to become more 
productive earlier in their training and at the same time allow 
our more experienced employees to focus on the more complex and 
time-consuming claims.
    By more effectively utilizing both newly hired employees 
and experienced claims processors, we expect to reduce the 
pending inventory and improve claims processing in 2008.
    From October 2007 until January 2008, the IBM Global 
Business Services conducted a detailed review of our business 
process involved with adjudicating a claim beginning with the 
application receipt and ending with notification to the 
claimant.
    To date, IBM has provided VBA with a gap analysis which 
identifies the gaps between VBA's current process and IBM's 
envisioned process. The gap analysis also includes short-term 
and long-term recommendations to help VBA improve its 
processes.
    Overall, IBM's recommendations validate areas for 
efficiency gains already identified internally. Both the short-
term and long-term recommendations made by IBM focus on the 
phases of the claims process and special activities under VBA's 
control.
    The short-term recommendations are incremental enhancements 
VBA can make to the existing business process to realize 
benefits and efficiency in productivity in the near term.
    Because our current claims process is heavily reliant on 
paper and the movement of paper claims folders, the greater 
efficiencies will be gained as a result of IBM's longer term 
recommendations to move to an electronic paperless environment.
    Managing work flow, monitoring performance, and tracking 
the number of claims processed are critical to maintaining 
processing efficiencies. The average number of medical 
disabilities or condition claimed on an original application is 
increasing.
    To further enhance our ability to monitor performance, the 
study recommends the creation of a performance measurement 
system focused on tracking the number of medical disabilities 
or issues claimed.
    VBA agrees with the idea of adding an issue-based 
performance measurement system to our current reporting system. 
This system will provide us with a better understanding of our 
workload and productivity. However, at the same time, VBA must 
ensure that our claims processors stay veteran focused.
    To achieve large-scale improvements, VBA must make a 
fundamental shift in how we process C&P claims.
    All of the study's long-term recommendations focus on IT 
enhancements that will allow VBA to move into a paperless 
environment, one where work can be managed electronically and 
automation can reduce manual activities, thereby freeing 
resources for more value-added decisionmaking.
    IBM believes that one of the first steps for VBA in this 
transition is to enhance the current veteran's online 
application or VONAPP. VBA is currently coordinating with VA's 
Office of Information and Technology to resolve all data and 
privacy and security concerns surrounding the use of an 
electronic signature.
    In addition, we are working through VA's General Counsel to 
resolve any regulatory issues regarding the need for a wet 
signature.
    Using the virtual VA application, VBA has also initiated 
two pilot efforts to test our ability to shift to a paperless 
environment and to test the utility of imaging technology. 
Through these pilots, we continue to refine our business 
process and identify necessary enhancements that will allow us 
to expand the use of imaging technology.
    We are also leveraging the lessons learned from the imaging 
accomplishments in our Insurance, Education, and Loan Guaranty 
programs.
    As VBA transitions to paperless processing, claimants' 
access to information will expand. The study team recommends 
the creation of a secure web portal so that claimants can 
access claim information and request transactions online.
    Currently, claimants may check the status of their claim by 
calling a toll-free number or by visiting a Regional Office or 
through a Veteran Service Organization. VBA has a secure web 
portal called the Veterans Information Portal. The primary 
external users of this portal are lenders and appraisers who 
are assisting veterans in the Loan Guaranty Program. Through 
this portal, external users can access web-enabled computer 
applications.
    Currently there are no disability compensation business 
applications available to external users through the portal. 
But efforts are underway as the President's Commission on Care 
for America's Returning Wounded Warriors also recommended that 
VA and DoD develop an interactive web portal.
    In conclusion, we believe that the independent study by IBM 
validates our current course of action to improve claims 
processing timeliness, particularly with regard to information 
technology. Despite ongoing challenges, VBA continues to 
develop new strategies to improve claims processing and reduce 
the time veterans must wait for decisions.
    Mr. Chairman, this concludes my testimony. I would be happy 
to respond to any questions that you may have.
    [The prepared statement of Mr. Walcoff appears on p. 109.]
    Mr. Hall. Thank you, Mr. Walcoff.
    When do you expect that the Subcommittee could see the IBM 
report?
    Mr. Walcoff. I think Monday is the official day that we get 
it and I will be glad to give you whatever we get on Monday.
    Mr. Hall. That is great. Thank you. I am looking forward to 
that.
    Congratulations on your new position.
    Mr. Walcoff. Thank you, sir.
    Mr. Hall. And as former chief person for field operations 
prior to elevation to this position, I am sure your experience 
will serve our veterans well.
    Could you please describe the current claims processing 
system model used by the VBA called CPI and the current number 
of days that each step in the process uses?
    Mr. Walcoff. The CPI model is a process where the teams are 
divided by particular functions within the claims process. We 
have a function called triage where employees will look at mail 
when it comes in. They put it under control and they make a 
determination as to whether work can be done quickly, 
immediately, or whether it has to go through a longer process 
of development before a decision is made.
    Assuming that the work does have to be developed, it is 
then passed on to the predetermination team which is 
responsible for developing the claim. That includes sending out 
VCAA letters. It includes going out for medical evidence. It 
sometimes includes going out for service medical records or 
service treatment records. It sometimes means going out for 
private medical evidence. It could be going to Joint Services 
Records Research Center (JSRRC) to get stressor information on 
a PTSD claim.
    There are all kinds of different types of development that 
has to be done and this is the process that takes the longest 
in developing for that evidence waiting for the evidence to 
come back. And I will give you some timeframes in a minute.
    The third process after the case has been developed is to 
certify it as ready to rate and it is then sent to the rating 
board where a rating specialist will rate the case.
    Once the case is rated, it goes to a fourth team called the 
post-determination team where it is gapped, meaning it is 
printed out on a piece of paper and it is authorized. The award 
is actually paid in the post-determination team.
    That would be the typical claim that you would have. There 
is another team called the appeals team that would only get 
involved in cases where a veteran has appealed the decision. So 
that is the basic process.
    The average time it takes to work a claim, and I am going 
to do this off my memory, so I might be off a couple days, but 
it will give you a little bit of an idea. It takes us about 8 
to 10 days to put the case under control and do that triage 
process that we talked about.
    It then gets sent to the pre-determination team. It takes 
them about 30 days to begin the development of the case. And 
there is an area that we can improve in. From the time it goes 
to triage to pre-D on average, we need to quicken the time that 
it will take for a VSR to begin the development on that case.
    The development itself does not really take that long, but 
waiting for the evidence to come back is what really takes 
long. That takes right now about 63 days for all the evidence 
to come back from the various places. And there are a lot of 
reasons for that.
    Under VCAA, we have to give a certain amount of time for a 
provider to respond. And under certain types of conditions, if 
he does not respond in 60 days, we give another 30 days for 
them to respond. So that is why it takes so long on this 
particular process.
    When all the evidence comes in, it actually moves fairly 
quickly from there. The rating specialist, it goes into the 
rating team and it takes about somewhere, I would say, between 
14 and 20 days for the rating team to be finished with the 
case.
    It then goes to the post team and it takes there, I would 
say, about 15 days for it to go through that process. So that 
is 30 and 60 is 90 and 30 is 120. Depending on the case and how 
long that part takes where we have to develop evidence, it 
takes you to around 170 days.
    Mr. Hall. Thank you.
    And is this an effective model in your opinion and, if so, 
why has the VA backlog increased almost threefold since its 
implementation along with a notable rise in processing times?
    Mr. Walcoff. Well, there are several answers to that. First 
in terms of whether it is an effective model, I will compare it 
to the model that it replaced which is what we called the BPR 
model. It was a model that was developed by Joe Thompson who 
was a former Under Secretary. And it involved a situation where 
an employee would not pass the case from one person to another. 
They would be responsible for all the elements involved in a 
case.
    And I will tell you that when I came into Washington in the 
Associate Deputy Under Secretary role, I was brought in by Joe 
Thompson who was Under Secretary at the time and was a 
supporter of that model at that time.
    But what we found was that our work had become so complex 
and so difficult that our VSRs were having a lot of trouble 
being able to master all aspects of what a VSR does and at the 
same time, having to do all the different aspects of VSR work 
on any given day.
    And the reason the CPI model was adopted was the idea that 
by specializing in a particular function, an employee could 
learn it, could get comfortable with it, and get good at it. 
And that is the basic philosophy behind the CPI model.
    Now, why has our inventory gone up so much? Well, I can 
give you a couple reasons. One was we got down to 253,000 at 
the end of fiscal year 2003. And on September 23rd of that 
year, there was a court decision called PVA versus Principi, I 
guess it was at the time. Yes. And that decision said that we 
could not deny any issue of a claim until it had been pending a 
year. Within 3 months, because of that court decision, our 
inventory went from 253,000 to 354,000.
    It was finally remedied by legislation passed by Congress. 
But by that time, we had already gone up 101,000 claims. So 
that is part of why we are in the shape we are in.
    In addition to that, our receipts have continued to go up. 
We went through a period when we were in a hiring freeze. So 
while we had receipts going up, while we were losing 
experienced employees, we were not hiring for about 18 months. 
Now that is a while ago and we have been hiring now for about 2 
years. But we are still paying to a certain extent for that 
period where we did not hire.
    But I believe that with the hiring we are doing now, with 
the training we are doing, and I think with the total number of 
employees that we are going to have available to us, we will 
bring the backlog down.
    Mr. Hall. And the loss of experience is slow to be made up 
when you are bringing new people on board. So that is 
understandable.
    I am curious that witnesses here have taken issue with the 
VBA's work credit system which is used to measure the 
productivity of your employees. I know that you disagree. I 
think that you disagree that the system sacrifices quantity 
over quality.
    But who is accountable for the accuracy of a veteran's 
claim and the decisions made in adjudicating it? For instance, 
if an RVSR makes an error in making a rating or a VSR commits 
an error in the development resulting in an avoidable remand, 
are there any actions taken?
    Mr. Walcoff. Well, who is responsible? I would say that the 
employee is responsible for the part of the claim that they 
did.
    And I will tell you that I do disagree with a lot of the 
statements that were made on previous panels, statements that 
in effect said that all VBA cares about is productivity and 
that we do not measure quality at the individual level.
    STAR does not measure quality at the individual level. I 
agree with what the DAV rep said about that. And the reason for 
that is that STAR is a quality assurance program. It is not a 
quality control program. It is not meant to measure quality at 
the individual level.
    We do have measures in place tied in with the individual 
performance standards of all VSRs and all rating specialists 
that require that five cases a month be reviewed for each 
employee. And what is reviewed is the part of the work that 
they were responsible for.
    So if it is a VSR who was on the pre D team, the work they 
did in developing the claim would be what would be reviewed. If 
you are a rating specialist, then the rating would be the part 
of the case that would be reviewed. That is a part of our 
performance standards.
    I thought Mr. Roberts made a point as somebody who was a 
supervisor that he has actually seen more employees be put 
under performance reviews for quality than he saw for 
productivity. So I think that certainly proves by a very 
neutral witness the fact that we do have a quality program.
    Mr. Hall. Although it is not abnormal to realign targets as 
realities change, in your testimony, you talked of the addition 
of 1,800 employees since January 2007. Yet, during the same 
time, VA has moved its claims processing target from 125 days 
in 2007 to 145 days for 2008.
    Could you explain why?
    Mr. Walcoff. The change was made because 125 days we felt 
was not realistic. And to put a goal out there that we just did 
not feel there was any way we were going to make we felt was, 
and I guess I will use the word, in some way intellectually at 
least dishonest.
    And the 145 days, I was asked by counsel whether that was a 
goal that I really felt was realistic and I absolutely believe 
it is. I do not know whether we will make it or not, but I 
honestly believe that with all the staffing we are getting that 
we should be able to make 145 days. And that is why we put that 
out as our goal.
    Mr. Hall. Well, certainly we have to get there before we 
get to 125.
    Mr. Walcoff. We do. We do. And certainly, sir, 
strategically, and I think we talked about this a little bit at 
the hearing that we had in New York, strategically I would like 
to see us get to 125 days and I have not given up on that. But 
I think that in terms of, you know, the years that we are 
talking about, 2009, 145 is more realistic.
    Mr. Hall. During this same time period as former Director 
of Field Operations, can you tell us how many Regional Office 
Directors received a bonus?
    Mr. Walcoff. I do not know the number off the top of my 
head. I would say that it is probably half. I would say it is 
probably about 50 percent. That is not an exact number, but I 
would say that is in the ballpark.
    Mr. Hall. And in your previous position, you also received 
a bonus. Can you look at that with some objectivity? With the 
current and historical performance of VBA in processing claims, 
what do you think of that? In your new position, are you 
expecting or are you eligible for receiving a bonus and what 
would that depend on?
    Mr. Walcoff. I am not going to offer a personal comment on 
whether my bonus was justified. I would suggest that you talk 
to the two people that rated me, Ron Aument and Admiral Cooper.
    In the position that I am in right now, I am eligible for a 
bonus. Whether I get one is going to be up to Admiral Cooper 
and the Secretary.
    Mr. Hall. Fair enough.
    As a long-time employee with the VA who has occupied 
several positions of leadership with the VBA, could you explain 
the seemingly sudden shift in priorities at the VBA to 
information technology improvements?
    While I am happy to see VA make affirmative moves in this 
direction to help increase the efficiency in processing claims 
for our veterans, I have to say I am not convinced, nor were a 
number of our witnesses, that the shift is a panacea for all 
that ails the system.
    Mr. Walcoff. It is not a panacea. I definitely agree with 
that. I mean that if I am giving the impression that by going 
paperless, the day after we go paperless, our timeliness will 
immediately improve by, you know, 50 percent, that certainly is 
not true and I am not saying that our quality will 
automatically improve or anything else.
    But I think it is a tool. I think it will give us a lot 
more flexibility in terms of how we handle the work. You know, 
there has been a lot of discussion. We always hear discussion 
about consistency and our quality.
    And I can tell you that right now there has been 
suggestions, for instance, just to give you an example on how 
this could help us, there have been suggestions about PTSD 
claims. You get inconsistency from office to office. Why do you 
not just have all PTSD claims processed at a particular office?
    Well, on the surface, that sounds like, that might be a 
good idea. That way, you have all people in one building doing 
them. You can, centralize your training. You can make sure 
everybody is doing it the same way, that sort of a thing.
    Well, the problem is that most PTSD claims are along with 
several other issues so that you have a claims folder with the 
PTSD information in there along with the information about, 
say, five or six other issues. You really cannot pull out 
certain pieces of the paper and send them to another office and 
then leave the paper that is left to the office where the claim 
was filed.
    If we went to an electronic system, it would be very, very 
simple to have a particular office have access to the part of 
the file that deals with PTSD while at the same time, the home 
office could have access to the rest of the file at the same 
time.
    That is a great example to me of how going to a paperless 
system will absolutely help us in terms of our flexibility and 
allow us to do some things that we cannot do today.
    Mr. Hall. Well, it would seem to me that is true and also 
all offices could have access to the same information----
    Mr. Walcoff. That is right.
    Mr. Hall [continuing]. At the same time. One of our earlier 
hearings was on artificial intelligence and some of our 
witnesses were suggesting from their academic or private-sector 
experience that a system could be set up, which would process 
80 to 90 percent of the claims or the portions of claims that 
were brought by veterans because there would be definitive 
either presumptive causes or definitive medical records that 
would establish a clear, visible, undeniable aspect of that 
claim and leave the 10 or 20 percent that were more difficult 
to be handled by the human part of the process that you 
described before.
    Do you think that is at all realistic and what would your 
comments be about that?
    Mr. Walcoff. I am going to make a comment and then I am 
going to ask Brad to comment.
    If you remember when I talked about how long it takes to do 
different parts of the claim, the actual rating of the claim 
really does not take that long. What really takes a long time 
is the part of the development, the deciding what evidence is 
needed and then having to wait for all that evidence to come 
back.
    Having an expert system or I call it an expert system which 
you are referring to, to help on the rating aspects of it, I 
think that the way I understand expert systems, it could help 
us on the quality aspect because everybody would be sent down 
the same path answering the same questions as they work through 
a claim which would, I think, provide for more consistency.
    But I am not sure that it would save that much time because 
that part of the process does not take that much time to begin 
with.
    What do you think, Brad?
    Mr. Mayes. Well, I agree with that, Mr. Chairman. Two 
comments. First of all, we are pretty effective once we gather 
all of the information and evidence needed to make a decision. 
We are pretty effective at making the decision. We are doing it 
13, 15 days, something in that neighborhood.
    Second of all, the algorithms that would be needed to 
evaluate evidence and the probative value of that evidence in 
some cases would be, I think, very complex.
    And, thirdly, the third point that I would make is that is 
the fundamental decision and obligates the U.S. Government to 
that veteran. I would think that where we are making that 
critical obligation, that commitment, that we would want to 
have a person involved in that decision-making process.
    Rather, I would like to see us, if we are going to look at 
this type of technology, let us leverage that technology up 
front in the process, taking information from an application, 
using that technology to see if there is basic entitlement. 
Does the claimant have status to file the claim in the first 
place? Are they a veteran? Use that technology up front and 
help in this process, the development process, which takes more 
time.
    So I would suggest that probably more bang for our buck if 
it could be achieved in the front part of the process as 
opposed to that part of the process where we are already doing 
it timely and also we are making that critical obligation.
    Mr. Hall. There are a number of Members, I would say most 
if not all of the Subcommittee, who feel strongly that we 
should find a way to start providing disability benefits, at 
least partial benefits to our veterans as soon as possible, if 
not immediately upon filing a claim. There must be a way for 
this to be done, even as other aspects of the claim are still 
adjudicated.
    And I realize that we do not want to make this more 
complicated and more expensive and we are running the risk of 
doing both. But at the same time, the hardest thing for us as 
individual Members of Congress in our districts when we deal 
with cases that come through our door there or as Members of 
the Committee or the Subcommittee is to justify 125 days, 145, 
180, whatever it is, before some money starts to flow and some 
part of the claim is recognized.
    I just wanted to ask if rating a claim actually is not the 
part that takes the longest, why are there over 800 cases ready 
to rate in Baltimore and close to 1,000 in Philadelphia?
    Mr. Walcoff. You know, I do not know. I would have to look 
to see what the ratio is in terms of rating specialists to 
VSRs. I do not know whether they have been instructed to 
concentrate on development with the idea that the area Director 
is planning on brokering some of those cases out. If you want, 
I can get back to you on that.
    [The following was subsequently received from Mr. Walcoff:]

          At the end of May 2008, there were 733 claims awaiting a 
        rating decision in Baltimore and 392 awaiting a decision in 
        Philadelphia. The national average processing time is 15 days 
        from the time a claim is determined to be ready to be rated 
        until the rating is completed. During this period, the Rating 
        Veterans Service Representative (RVSR) reviews all evidence in 
        the claims file, ensures that VA has met its duties to notify 
        and assist, and makes a determination related to service 
        connection, degree of disability, and effective date. 
        Additionally, the decision time includes any required second-
        signature reviews by senior RVSRs. At the Philadelphia Regional 
        Office, the decision time is 8.2 days, while this process 
        currently takes 20.6 days in Baltimore.

          To assist the Baltimore office in providing more timely 
        claims decisions, additional staffing has been authorized, and 
        cases are being brokered from Baltimore to other regional 
        offices with capacity to assist in rating these claims. 
        Baltimore has hired 51 employees since January 2007. This 
        fiscal year through May, Baltimore brokered over 1,500 claims 
        to other regional offices for rating.

    Mr. Hall. Sure. That would be great. I understand there are 
similar numbers in some of the other ROs.
    Mr. Walcoff. Sir, there are some offices that have been, 
based on a lot of different factors, and, Diana, you may want 
to comment on this, instructed to put all of their resources 
toward development with the idea that we have capacity maybe in 
the rating area in another office.
    And we want to try to get them as much as possible where 
they have trained rating specialists. So we might tell an 
office to concentrate on getting these cases ready to rate and 
we will get them rated for you.
    Mr. Hall. So each office does not have trained rating 
specialists?
    Mr. Walcoff. Well, it depends. I mean, certainly every 
office has trained rating specialists. Do they have enough 
depends on several things.
    It could be that they have recently had losses where it is 
taking a while to get the replacements trained so that they are 
temporarily in a situation where they do not have enough.
    It could be that their receipts are up more in a particular 
area than they are nationwide which is causing a shortage in a 
given area. There are a lot of different reasons why that might 
be.
    Mr. Hall. On a visit to Landstuhl, Germany, I was informed 
that efforts are underway to have the medical records for OIF/
OEF soldiers leaving the medical facility available in an 
electronic format upon arrival on American soil.
    How accurate is that or how close to that are we and what 
are VA's efforts and the status currently of efforts to have 
access to these records and to establish the level of 
disability or injury?
    Mr. Walcoff. You want to take that?
    Mr. Mayes. Sure. That is one of the lines of action that is 
underway right now with the Senior Oversight Committee. I know 
that Dr. Tibbits from VA's OI&T staff has been working with 
some individuals over at DoD at a high level.
    I do not know the exact status of the electronic transfer 
of those types of records. But I am aware that there are some 
records apparently that are available in the personnel file 
that we can actually access right now. But it is very limited.
    Ideally, we have the entire service treatment record 
available online. I mean, that is the ultimate goal and I know 
that is what the line of action team is pursuing.
    Mr. Hall. Does the IBM report address this in particular?
    Mr. Walcoff. Not really. They did not get into the whole 
idea of electronic records in our relationship with DoD. It is 
not covered.
    Mr. Hall. Can any of you tell us how compatible or 
incompatible the DoD and VA systems are from a computer 
software standpoint? How close are we to being able to actually 
transfer that information?
    Mr. Walcoff. I cannot answer the question. I do not know. I 
know that we are working with DoD on several different levels 
to try to be able to share records. But in terms of the medical 
records themselves. I do not know the answer.
    Mr. Hall. Mr. Cohen, I believe it was, on one of the other 
panels, was talking about inaccuracies or misdiagnoses in the 
DoD side and his concern about them being transferred to VA and 
being used as a starting point for whatever follows.
    Do you have any opinion as to the accuracy of what you are 
getting from DoD?
    Mr. Mayes. I do not think we would necessarily question, 
for example, a diagnosis by a medical care provider if it is in 
the service treatment records. But I can speak to the fact 
pattern that Mr. Cohen talked about. He mentioned that service 
personnel were being diagnosed with personality disorder and 
being put out of the military.
    As long as they do not have a disqualifying separation, 
they file a claim with us and there is evidence of a 
neuropsychiatric disorder, whether or not there was a diagnosis 
of personality disorder or not, then we will go ahead and 
develop that claim. We will pursue that claim.
    And in many cases, I should not say many, I am aware of 
cases where there was a personality disorder that was 
referenced on the DD-214 and, yet, we got a diagnosis of a 
condition that is subject to compensation and have awarded 
disability benefits in those cases.
    So the point here is that we will treat that claim just 
like any other claim as long as there is no barred benefits and 
we will adjudicate it. We will develop for the evidence and in 
some cases, order an exam if appropriate and pay benefits if 
appropriate.
    Mr. Hall. That is good to hear. I am still curious if there 
is a percentage. But do you want to hazard a guess?
    Mr. Mayes. I do not have data that I am aware of that would 
show how many service personnel put out for personality 
disorder where we have seen those diagnoses.
    Mr. Hall. I mean, we have heard about it, but it is 
anecdotal and hard to quantify from my point of view in any 
way. But it is a concern, especially if we are thinking that, 
as some people have suggested to the Subcommittee or to the 
full Committee, that the parallel in the health maintenance 
organization/private sector world would be a diagnosis of a 
doctor.
    I go into an emergency room or go in to see my doctor and 
he takes an X-ray, says I have a broken leg, whatever. Either 
he or I file with the insurance company and that starts, you 
know, the claim out. And if we could rely on the medical 
records transferred from DoD and have that peg or at least 
approximate the level of disability that we are going to be 
looking at so that it sort of starts the process up.
    The question is, how reliable that is and what would 
trigger a reexamination being necessary? Could that be done on 
a random basis?
    I mean, you can never remove the human component 
completely. But we are hoping that the electronic and the AI 
aspect of this is going to help us reduce those parts of claims 
and those claims which are obviously valid and not have your 
people spending time on things that theoretically could be 
simple enough that they would be rated or processed by 
electronic means. It is being done in other areas of government 
and apparently successfully.
    The American Legion testified today about the brokering of 
claims which involve transferring claims from the Regional 
Office of jurisdiction to another Regional Office to adjudicate 
the claim, usually from a poor-performing RO to a high-
performing RO. Apparently this brokering concept was instituted 
around the time of implementation of the CPI model. The Legion 
believes that this was intended to be a short-term solution as 
VBA does not have a tool in place to measure the quality of 
brokered work.
    Could you explain for the Subcommittee how and why VBA 
brokers its claims? Is this a resources, training, or 
management problem? Are these claims being checked for quality 
and how does the brokering figure into the strategic plan for 
processing claims?
    Mr. Walcoff. I can definitely do that since I was very 
involved in the decision to start the extensive brokering that 
we do.
    It really does not have anything to do with the CPI model 
per se. You have heard testimony and I think, you know that we 
do have variation in terms of performance from office to office 
around the country.
    I wish I could tell you that all 57 of our offices were 
performing very, very well--equally well. But the fact is that 
for a lot of different reasons, we have some offices that have 
more of a backlog than other offices do.
    In addition to that, we have organizations called Resource 
Centers that were set up back in 2000, 2001. The purpose of 
them being set up originally was to work the diabetes claims 
that were going to be coming in when the new presumptive was 
passed. For a lot of reasons, that is not what they were used 
for.
    But we have started using them or started using them back 
around 2002 to handle the work that was backing up at some of 
our stations that were not doing as well.
    And the philosophy is that, and I will use an example, sir, 
of your home office of New York, that if a veteran lives in the 
southern part of New York in New York Regional Office that he 
should not have to wait an extra 80 to 100 days, let us say, to 
get that case done because he happens to live in New York where 
if I move that case to Salt Lake City or Milwaukee, I can get 
the case probably turned around in 30 days.
    And that is the basic philosophy. The fact is we do not 
have, in my view, New York veterans or Utah veterans. We have 
veterans of this country and they all deserve to get their case 
worked as quickly and as accurately as possible.
    And if we can find a way to keep that case from sitting 
some place and get it moved and get it worked, we are going to 
do that. And that is really the basic philosophy behind 
brokering.
    Now, the answer to the other part of it, I know it was 
mentioned in here by somebody that we do not do quality checks 
on the brokered cases and that is not true.
    Brad, you might want to talk about that.
    Mr. Mayes. Yeah. We are now including the brokered work as 
part of our Systematic Technical Accuracy and Review Program or 
the STAR Program. So I believe there was a limitation at one 
point in attributing those cases to the Regional Office that 
actually did the work, but we are incorporating brokered work 
into those reviews.
    Mr. Hall. CPI was supposed to eliminate the inconsistencies 
in ROs, so----
    Mr. Mayes. Well, okay. Let me----
    Mr. Hall [continuing]. Was that the idea?
    Mr. Mayes. What he was talking about, the quote that I 
guess that somebody read out of Admiral Cooper's task force, 
what he was referring to had to do with the fact that when he 
came in, he found that every office was processing work in a 
different way.
    We would put a policy out from Central Office. The C&P 
Service would put a policy out and we found that there were 
offices that were deciding, yeah, that is a good policy. I am 
going to do that policy. And then there were other offices that 
said, you know, I do not agree with that. I am just going to 
ignore it. And then there were other offices that said, well, I 
am going to do it, but I am only going to half do it because 
Joe Thompson is going to be gone soon anyway, so, you know, it 
will all go away.
    And Admiral Cooper felt, based on his background of being 
in the Navy for 33 years that that was an unworkable system. 
Once the headquarters' organization puts a policy out, 
everybody has to follow it. You cannot have the people in the 
field making a decision as to whether they like that policy or 
not and deciding whether to apply it or not.
    We would put IT applications out and offices would make 
their own decisions as to whether they were going to use them 
or not. So, therefore, it really became difficult as you would 
try something new to see whether it would work in a given place 
because a given place was not necessarily the same as three 
other places.
    And that is what he meant in terms of consistency, that the 
offices need to be structured the same, meaning they all should 
be under the CPI model, and that everybody should follow the 
policies that are decided. There will be time for discussion, 
that type of a thing. But once a decision is made, everybody 
does what they are told to do. And that is what he meant by 
consistency.
    Mr. Hall. You will be happy to know this is my last 
question, Mr. Walcoff.
    Mr. Walcoff. That is fine.
    Mr. Hall. It has been mentioned several times before the 
Subcommittee that providing a prestabilization rate, as 
outlined in title 38, as well as possibly expanding the 
Benefits Delivery at Discharge Program would help provide many 
veterans who are waiting for the adjudication of claims.
    Could you give us your thoughts on these ideas?
    Mr. Walcoff. I think one of the things that we have 
discussed actually fairly recently that we are concerned about 
is that I do not think our people in the field are making 
proper use of the pre-stabilization ratings.
    Just in looking at the numbers that we see, it appears like 
there should be more of them and that is one of the things that 
I am going to talk to Diana about working with the service to 
see what we need to do to find out why stations are not using 
pre-stabilization ratings.
    Now, one thing I will tell you, sir, is that on the 
seriously injured cases, there is an assumption that if on a 
given case it took us, say, 150 days to process the case, that 
means that the veterans did not receive anything for 150 days.
    In most of those cases where the condition that is actually 
the most serious, let us say it is an individual with an 
amputation, that amputation, that leg amputation should be able 
to be rated based on the service treatment records from Walter 
Reed.
    Now, that does not mean we can take the end product on the 
case because maybe he also filed for a hearing loss and for a 
back condition or whatever. But the way our process, the way 
our procedures are laid out, the Regional Office is supposed to 
pay for the amputation, get that money out to the individual, 
and then develop for everything else. That is the procedure 
that we have so that in a situation like that, the veteran 
would not have to wait the 150 days.
    Mr. Hall. Is that happening to your knowledge?
    Mr. Walcoff. I believe it is happening, but I will tell you 
that anecdotally, I have heard some people complain to me that 
because you do not get credit for the case, you know, when you 
put the 40 percent out for the leg that stations are holding 
off on doing that until they can do the whole case.
    And I will tell you that I tell them and I have told Brad 
in terms of his STAR reviews that that is one of the things I 
want them looking at. And if we find any cases where they are 
doing that, I want to know about it because that is absolutely 
contrary to the policy we put out and it is contrary to doing 
the right thing.
    Mr. Hall. Well, thank you for expressing that sentiment and 
for passing it on to your employees. I think this Subcommittee 
would agree wholeheartedly with that approach.
    And thank you for testifying. Thank you for being here. 
Thank you for waiting so long, Mr. Walcoff, Ms. Rubens, Mr. 
Mayes. We may have other questions that we will submit in 
writing to you. And thank you for the work that you do and have 
a good evening.
    The Minority will submit questions on behalf of the Ranking 
Member and the record will stay open for 5 days.
    [No questions were submitted.]
    Mr. Hall. Okay. I just wanted to thank you again for your 
work on behalf of our Nation's veterans and thank everyone who 
testified. Some of you from the beginning are still here. We 
look forward to working with all of you on those important 
issues involved with improving the claims process system.
    This hearing now stands adjourned.
    [Whereupon, at 6:25 p.m., the Subcommittee was adjourned.]















                            A P P E N D I X

                              ----------                              

           Prepared Statement of Hon. John J. Hall, Chairman,
       Subcommittee on Disability Assistance and Memorial Affairs
    Today we are here to examine the VA's claims processing system and 
its attendant disability claims backlog.
    There are many areas to explore when trying to determine why the 
disability claims backlog has reached the point of unmanageability and 
why this is the second time in a seven-year time period that we've 
reached this crisis point.
    From 2002-2007, the disability claims backlog has risen from about 
250,000 to nearly 650,000. During the same period, the VBA consistently 
missed its performance targets on nearly all compensation and pension 
claims processing fronts.
    These failures engender many questions about the complexity of the 
system VA has created and the model upon which it is built. One of my 
leading questions concerns the effectiveness of the Claims Processing 
Improvement (CPI) model and its suitability to establish meaningful 
accountability parameters to eliminate the claims backlog and 
accurately process claims. Thus far, none of VA's own benchmarks have 
improved since its implementation, and I find this fact disturbing.
    Moreover, it seems as if the failure is not necessarily with the 
system itself but with the failed execution of the processes that are 
supposed to be reinforced with transparent and highly visible 
accountability measures to make it work.
    As outlined by the 2001 VA Claims Processing Taskforce Report, led 
by Daniel L. Cooper, now VA Under Secretary for Benefits Cooper, 
``accountability includes not only the proposition that a leader is 
responsible for the actions of the group but also is accountable for 
the results of those actions or inactions. This single attribute is the 
most serious deficiency in the VBA organization.'' At the time, Dan 
Cooper was referring to VBA's then-failed claims processing system, 
SDN. I think many of those who testify today will concur that these 
same observations could apply both to today's VBA organization and its 
claims processing system.
    One can only wonder, where is the accountability in a work credit 
system whose only meaningful measure is productivity and where quality 
seems to be an afterthought. One where only about 2% of all claims are 
checked for quality and 1 in 10 claims is processed incorrectly.
    This error rate is unacceptable and indicates that VA needs to 
improve its training regimens to ensure uniformity across ROs and that 
highly qualified individuals are processing and adjudicating claims.
    Further, I ask why are bonuses consistently paid to managers at 
both the Regional and Central Offices while claims languish. I want VA 
management to adopt this principle--be accountable for the backlog, 
don't pay yourselves anything extra until the veterans are paid.
    I know VA contends that all of its inventory is not backlogged, but 
try selling these semantics to veterans waiting 183 days and longer for 
decisions on their claims. From the Committee's standpoint based on the 
VA's current performance, most of the disability claims in its 
inventory are eventually going to become a part of those claims pending 
longer than VA's target of 145 days for claims processing. Hence, part 
of the backlog.
    Moreover, the Committee does not consider an increase in processing 
times from 177 days in 2006 to 183 days in 2007, accompanied by an 
increase in VBA's target performance days for processing claims from 
125 days to 145 days during the same time period as progress and 
neither do our veterans. VA should not conceive of moving its 
performance targets to compensate for its poor performance. I am 
confounded by these actions and would like an explanation--so would our 
veterans.
    I am encouraged by some of the numbers from VA's FY 2009 Budget 
that indicates a 19% increase in VBA IT funding to support efforts to 
move to a paperless claims environment and increased funding for 
VETSNET. While technological improvements alone won't solve the backlog 
problem they are clearly critical to the solution. I am also anxious to 
see the results of IBM's study of the VBA's business processes involved 
with adjudicating a claim. This type of review is long overdue.
    I am also encouraged to see that VA is requesting more money to add 
703 FTEs; yet I am aware that you have been unable to maximize the 
performance of the record number of 3100 FTEs that this Congress 
ensured that you receive during the last two funding cycles.
    Let's be very clear, this is not just a people problem and adding 
more people to a broken system cannot be the only answer to vanquishing 
the claims backlog and improving processing times. To date, this 
single-minded approach has proven unsuccessful at best.
    I think the major faulty premise in this system is that the VA 
behaves as if it is only accountable to meet the numerical targets it 
sets and Congress tacitly approves.
    But, I want to reinforce that you are actually supposed to be 
accountable to the veteran who has borne the battle and to his widow 
and his orphan. I believe we need to refocus and refine our Nation's 
claims processing system to make it accountable to producing better 
outcomes for our veterans, their families and survivors.
    I thank the witnesses on the first three panels for their 
thoughtful, solution-oriented testimonies. I hear the frustration in 
your statements and I look forward to working on ways to implement the 
workable solutions many of you offer.
    I know that the backlog has taken on a life of its own. However, it 
is not bigger than the collective will we devote to eliminating it and 
to honing a claims processing system that is veteran-focused, not 
process-focused.
    Last, I know that VA cannot be pleased with its current disability 
claims processing performance, and I look forward to hearing VBA's 
strategic plan for addressing these serious concerns. Secretary Peake 
has highlighted this issue as one of his top priorities and I hope the 
VA sees Congress as a friend and not a foe in helping to correct the 
shortfalls in its disability claims processing system.
    I believe that just like the VHA experienced a revolutionary 
transformation, it is well-time to think of devoting the same type of 
resources into transforming the VBA. It is time for a paradigm shift.
    Our veterans deserve the benefit of our collective resources to 
ensure that this process becomes a world-class, 21st century model that 
reflects their priceless sacrifice to our Nation.

                                 
  Prepared Statement of Hon. Doug Lamborn, Ranking Republican Member,
       Subcommittee on Disability Assistance and Memorial Affairs
    Thank you Mr. Chairman for yielding.
    I look forward to hearing our witnesses' testimony on how we might 
address the challenges and opportunities facing VA's Compensation and 
Pension Service.
    In fiscal year 2007, Compensation and Pension Service, commonly 
referred to as C&P, performed more than 838 thousand rating decisions.
    C&P also performed nearly 582 thousand claims actions that did 
require rating decisions.
    Yet, despite the tremendous volume of work accomplished, C&P finds 
itself behind in its struggle to overcome the steady accumulation of 
claims awaiting action.
    An array of reasons contributes to this frustrating trend, and our 
witnesses outlined a number of them in their written statements.
    Foremost among them will be that VA place more emphasis on accuracy 
and less on alacrity, rating decisions must be done right the first 
time.
    I wholeheartedly agree . . .
    But as much as we may ponder and discuss solutions to the multitude 
of underlying problems, I think we all recognize that the time has 
arrived for a reasonable, yet fundamentally different approach to the 
problem.
    If we continue to merely tread water, we are going to sink.
    As my Subcommittee colleagues are aware, I have long been an 
advocate for major reform with regard to the use of information 
technology.
    I am heartened to know that they concur with my perspective that it 
is well past time for VA to embrace IT as a remedy to an outdated paper 
based system.
    VA should be on the forefront of technology in the disability 
benefits arena, and I believe it can be.
    Not too long ago, VA's healthcare system was so poor it was the 
subject of derision in movies such as ``Born on the 4th of July.''
    Now, VA healthcare is the subject of emulation among a number of 
high-quality medical models.
    I believe VA can make a similar ascension on the benefits side of 
the Department.
    We must be open to considering new ideas, especially in the area of 
IT, and not be bound by narrow paradigms.
    I invite the members of the Subcommittee, the veterans groups, and 
others to offer suggestions that will improve the process for our 
future veterans.
    Thank you, Mr. Chairman. I yield back.

                                 
     Prepared Statement of Joyce McMahon, Ph.D., Managing Director,
                 Center for Health Research and Policy,
      Center for Naval Analyses (CNA) Corporation, Alexandria, VA
    Chairman Hall, Representative Lamborn, distinguished members, I 
appreciate the opportunity to testify before the House Subcommittee on 
Disability Assistance and Memorial Affairs of the House Committee on 
Veterans' Affairs today on the subject of the VA's Claims Processing 
System. This testimony is based on the findings reported in Final 
Report for the Veterans' Disability Benefits Commission: Compensation, 
Survey Results, and Selected Topics, by Eric Christensen, Joyce 
McMahon, Elizabeth Schaefer, Ted Jaditz, and Dan Harris, of the CNA 
Corporation (CNA). Details on the specific findings discussed here can 
be found in the report, which is available at http://www.cna.org/
domestic/healthcare/. The report also includes reference sources.
    The Veterans' Disability Benefits Commission (the Commission) asked 
CNA to help assess the appropriateness of the benefits that the 
Department of Veterans Affairs (VA) provides to veterans and their 
survivors for disabilities and deaths attributable to military service. 
Specifically, the Commission was charged with examining the standards 
for determining whether a disability or death of a veteran should be 
compensated and the appropriateness of benefit levels. The overall 
focus of our effort was to provide analyses to the Commission regarding 
the appropriateness of the current benefits program for compensating 
for loss of average earnings and degradation of quality of life 
resulting from service-connected disabilities for veterans. We also 
evaluated the impact of VA compensation for the economic well-being of 
survivors and assessed the quality of life of both service-disabled 
veterans and survivors.
    We also explored other issues for the Commission and documented 
those results. Pertinent to this testimony is that we were asked to:

      Compare the VA disability compensation program to other 
disability programs.
      Conduct surveys of raters and Veterans Service Officers 
(VSOs) with regard to how they perceive the processes of rating claims 
and assisting applicants.

    First we will discuss how we compared the VA disability 
compensation program to other disability programs with respect to the 
ratings process. We will then summarize the primary relevant findings 
based on conducting surveys of raters and VSOs.
Comparing the disability ratings process across disability programs
    The Commission asked us to compare VA's program with other federal 
disability compensation programs in order to determine whether there 
are any useful practices that VA could adopt to improve its own 
operations. Our first task was to identify the major criticisms of 
operations in the VA disability program. We reviewed a variety of 
publicly available sources that discussed problems with VA performance, 
including reports from the Government Accountability Office (GAO), 
reports from the VA Office of the Inspector General (OIG), and 
congressional testimony.
    Next we spoke with the relevant VA staff to get the most current 
information on the areas being criticized. We interviewed people in the 
Veterans Benefits Administration's (VBA's) Compensation and Pension 
Service, VBA's Office of Employee Development and Training, the Board 
of Veterans' Appeals, and the Office of the General Counsel. We 
discussed specific aspects of VA operations that were identified as 
problematic and the approaches that the other disability programs take 
in those areas. Our focus was limited to federal programs paying 
monetary benefits to disabled individuals, including Social Security 
Disability Insurance (SSDI) and Supplemental Security Income (SSI) 
under the Social Security Administration (SSA), Workers' Compensation 
under the Federal Employees' Compensation Act (FECA), disability 
retirement for federal employees under the Federal Employee Retirement 
System (FERS) and the Civil Service Retirement System (CSRS), and DoD's 
Disability Evaluation System (DES).
    We found that there were no formal evaluations of the effectiveness 
of specific practices in other programs in the areas identified as 
problematic for VA. We decided to first determine whether a program 
used a practice different from VA's and then to consider whether the 
other program's practice might be an improvement over VA's. We 
consulted a variety of sources, including GAO reports, congressional 
testimony, and personal interviews. We spoke with staff in various 
offices in the Social Security Administration, the Department of Labor, 
the Office of Personnel Management, and DoD.
Differences noted across disability compensation programs
    There are many differences across the disability programs in terms 
of purpose, administrative processes, eligibility, benefits, and size. 
These differences may limit the potential applicability for VA of 
lessons from the other programs. For example, each disability program 
has different administrative processes for filing claims and making 
appeals. The various disability compensation programs also have 
different criteria for determining eligibility and benefit levels, and 
different purposes of the monetary compensation, varying from partial 
or full replacement of earnings to an income supplement, or even to 
compensation for a shortened career.
    The purpose of the VA program is to compensate disabled veterans 
for earnings lost due to their disability, although there is no 
mechanism for calculating individual-specific earnings losses (except 
for cases of Individual Unemployability (IU)). A disability is defined 
as either an injury or a disease that resulted from service or as a 
pre-existing injury or disease that was aggravated by service. A 
veteran can have multiple disabilities, each of which is assigned a 
rating reflecting its severity. The combination of the disability 
ratings for all disabilities determines a veteran's level of 
compensation.
    The amount and type of information needed for each program are 
important determinants of how difficult and time-consuming it is to 
process and resolve a claim. For example, the VA, FECA, and DES 
programs all require that a disability be a consequence of an 
individual's job in order to be eligible for compensation. The 
connection between employment and disability is straightforward to 
demonstrate sometimes, but not always, especially for VA cases in which 
the injury or disability may have occurred many years previously, and 
may require providing extensive documentation. Although in general the 
VA program does not require a decision about how much the disability 
affects a particular veteran's employment and earnings (except for IU 
cases), it does require raters to determine the extent and nature of 
multiple disabilities.
Measures of performance
    For any disability compensation program, three important measures 
of performance in claims processing are timeliness, accuracy, and 
consistency. In addition, we consider issues involving training, 
productivity standards, and staff turnover.
Timeliness
    Beginning with timeliness, we note that the time required to decide 
and resolve a claim depends on how complex the design of the program 
is. For example, although the VA program does not need to know a 
claimant's earnings history, it does need to determine service 
connection and severity for each disability, and each claim can have 
multiple disabilities.
    Compared to the other disability programs, VA performance in terms 
of timeliness is poor. The average time for VA to complete a claim 
(without appeals) in FY2006 was 177 days. In comparison, the average 
for SSDI was 88 days in FY2006, and OPM staff reported that the FERS/
CSRS average is currently 38 days. In general, the FECA and DES 
programs also reported shorter times to adjudication than the VA 
average.
    Because of the differences across programs in the work required to 
process a claim, it is difficult to say whether VA's timeliness 
problems are due to the complex nature of its disability decisions, 
staffing shortages, low productivity, or some other factors. To know 
how best to address its problems with timeliness, it would be useful 
for VA first to disaggregate that 177-day average so that it 
understands what stages of the claims process are contributing most to 
the total processing time.
    With respect to specific strategies to improve timeliness, VA 
already does make use of ``Tiger Teams'' to deal with cases that are 
designated as high priority at any given time, such as very 
longstanding cases or cases where the veteran is very old or terminally 
ill. Because the success of those teams comes from the fact that they 
are made up of the most experienced staff, unfortunately the Tiger Team 
approach is not something that VA can replicate on a larger scale 
(i.e., there are not enough experienced employees to staff a large 
number of Tiger Teams). VA might also learn from SSA's new Quick 
Disability Determination (QDD) process, which involves using a 
predictive model to identify cases with a relatively high probability 
of being granted benefits and then trying to act on those cases within 
20 days.
Accuracy
    Accuracy is another major dimension of the quality of claims 
processing. VA's accuracy rate in 2006 was 88 percent. Accuracy is 
based on whether all issues in the claim were addressed, whether the 
claim was developed in compliance with the Veterans Claims Assistance 
Act, and whether the rating decision, effective date, and payment date 
were correct. VA's accuracy is below the overall accuracy rate for 
SSDI, which is 96 percent, but the difference is not large. However, 
when comparing accuracy one should remember that the programs have 
different requirements for processing a claim. In particular, the fact 
that VA has to rate the severity of a disability creates more potential 
for error than the yes-or-no disability decision that is required for 
SSDI.
    We were unable to obtain overall accuracy rates for the other 
programs. However, in comparing other programs' practices with VA's, 
the only practice that is substantively different from VA's is SSA's 
practice of focusing on the most error-prone type of cases. 
Incorporating this element could be worthwhile for the VA because it 
would result in a disproportionately large gain in accuracy for any 
given increase in the number of reviews.
Consistency
    Measuring consistency in disability programs is difficult, and none 
of the programs currently has a measure of consistency of the level 
that GAO recommends for that task, including the use of multivariate 
analysis to examine disability decisions while controlling for various 
factors, and in depth independent review of statistically selected case 
files. Although VA has studied recommendations to improve consistency, 
the lack of consistency evaluations across programs makes it impossible 
to compare consistency.
    Possible ways to improve consistency might include standardizing 
training for raters, improving standardization of medical examinations, 
and consolidating the rating process into fewer locations. In addition, 
it is worth noting that there have been criticisms of SSA regarding 
consistency, which in part may be due to the task of determining 
medical eligibility, which involves considerable subjectivity.
    Physical consolidation is also a way to reduce inconsistency in 
disability programs, and it is an approach that is already being 
considered by VA. VA disability compensation claims are currently 
processed in 57 Regional Offices (ROs), and GAO has recommended that VA 
consolidate some of its disability compensation operations as one way 
to improve claim processing quality and reduce variation across 
regional offices. VA reports that it does in fact have plans to 
consolidate some of its disability claims processing in the future, 
based in part on past successes in consolidating some other areas of 
operations. However, this may create less in-person access for some 
veterans.
    SSA has a similar regional variation to that observed for the VA. 
The other programs face fewer consolidation issues or concerns, because 
they are much smaller programs and have fewer offices and locations for 
processing claims.
    We also considered a variety of other issues that were identified 
as potential problems for the VA. We considered the claim that the VA 
emphasizes quantity over quality in performance evaluations of 
individual employees, which might lead to hasty decisions that would in 
turn lead to appeals and more backlogs. However, an emphasis on 
productivity has been identified as having the potential to negatively 
affect accuracy in SSA as well. The tension caused by quantity 
standards, even if accompanied by quality standards, appears to be an 
issue for the other disability compensation programs as well as for VA.
Training Issues
    VA has also received criticisms in the area of staff training. 
However, examination of the other disability programs shows that VA 
certainly is not lagging behind in its training efforts. None of the 
other programs seems to have any formal evaluation of their training 
either. VBA has also recently focused on increasing the standardization 
of training. It is worth noting that no other disability program has 
VA's level of standardization.
Staff Turnover
    For the VA program, high staff turnover is viewed as creating a 
problem for the quality of claims processing by lowering the overall 
level of expertise. By comparison, it is not clear that the one-year 
attrition rate for VA disability examiners differs from the rate for 
all new federal employees. However, minimizing turnover is especially 
important for VA because of the lengthy training time required for 
claims processing. GAO has recommended that it might be useful for the 
VA to take steps to quantify the reasons that raters resign. In any 
event, VA is not the only disability program facing the problem of high 
staff turnover, which has been identified as a particularly difficult 
issue for SSA. The other disability compensation programs reported 
similar staff turnover concerns.
Summary of comparisons across programs
    Except for the very important issue of timeliness, VA does not 
appear to be under-performing in comparison with other disability 
programs. Recent training improvements seem promising for improving VA 
timeliness in the long term, but effects will not be seen for a while. 
Some of VA's problems with timeliness could be the result of a complex 
program design, with multiple disabilities per claim, the need to 
determine service connection (sometimes many years after separation), 
and the need to assign a disability rating to each disability. For VA 
to develop a focused strategy to improve timeliness, it first needs to 
determine the stages of the claims process that are contributing most 
to the total elapsed time required to complete a claim.
Raters and VSOs survey results
    With regard to the benefits determination process, the Commission 
asked us to gather information by conducting surveys of VBA rating 
officials and accredited veterans service officers (VSOs) of National 
Veterans Service Organizations (NVSOs). The intent was to gather 
insights from those who work most closely with the benefits 
determination and claims rating process. Through consultation with the 
Commission, we constructed separate (but largely parallel) surveys for 
raters and VSOs. We focused on the challenges in implementing the laws 
and regulations related to the benefits determination and claims rating 
process and perspectives on how the process and rating schedule 
perform.
Survey content
    The surveys explored issues involving training, proficiency on the 
job, and resource availability and usage. Respondents were asked about 
what they considered to be their top three job challenges. They were 
also asked about how they decided or established specific criteria 
related to a claim, how smoothly the rating process went, the perceived 
capabilities of the various participants in the process, which types of 
claims were most difficult to process, and what resources would improve 
the claims process.
Assessment
    The overall assessment indicated that the benefits determination 
process is difficult to use by some categories of raters. Many VSOs 
find it difficult to assist in the benefits determination process. In 
addition, VSOs report that most veterans and survivors find it 
difficult to understand the determination process and difficult to 
navigate through the required steps and provide the required evidence. 
Most raters and VSOs agreed that veterans have unrealistic expectations 
of the claims process and benefits.
    Raters and VSOs noted that additional clinical input would be 
useful, especially from physicians and mental health professionals. 
Raters felt that the complexity of claims is rising over time, and that 
additional resources and time to process claims would help. Some raters 
felt that they were not adequately trained or that they lacked enough 
experience. They viewed rating mental disorder claims as more 
problematic than processing physical condition claims. They viewed 
mental claims, especially PTSD, as requiring more judgment and 
subjectivity and as being more difficult and time-consuming compared to 
physical claims. Many raters indicated that the criteria for IU are too 
broad and that more specific decision criteria or evidence would help 
in deciding IU claims.
Specific findings
    The findings identify several problematic issues related to the 
benefits determination process that bear on the challenges inherent in 
implementing, assisting, and navigating the claims process, including:

      Both raters and VSOs identify additional clinical input 
on rating teams as potentially useful, especially from physicians of 
appropriate specialties and from mental health professionals. VSOs 
identify rehabilitation specialists and medical records specialists as 
other potentially useful sources of input.
      There is a relatively wide range of perceived training 
adequacy, perceived proficiency in knowledge, skills and abilities 
(KSAs), KSAs relevant to the performance of the rater's role, and years 
of rating experience among rating officials that appears to be related 
to raters' ability to implement the process and their ease at rating 
and otherwise deciding claims. Raters who feel less well-trained or 
less proficient and those who have fewer years of rating experience 
generally find the process more problematic.
      Raters' perceptions regarding their training adequacy and 
their KSA proficiency are both somewhat related to their perceptions of 
the availability of the resources they need to decide a claim such as 
computer system support, information and evidence, time, and 
administrative/managerial and clerical support. As perceived training 
adequacy and KSA proficiency increase, so does perceived resource 
availability.
      In many respects, rating or otherwise deciding mental 
disorder claims is generally more problematic than rating or deciding 
physical condition claims. Both raters and VSOs see claims with mental 
disorder issues, especially PTSD, as requiring more judgment and 
subjectivity than claims with physical condition issues. Raters and 
VSOs also indicate that it is less likely that mental disorder issue 
claims rated by different raters at the same VA Regional Office would 
receive similar ratings. Raters and VSOs also both indicate that 
deciding the various criteria of a claim is more problematic for mental 
disorder than for physical condition claims.
      A significant majority of raters indicate that more 
specific decision criteria or more specific evidence regarding 
individual unemployability (IU) would be helpful and that the criteria 
for IU are too broad.
      Rating physical conditions in several body systems or 
subsystems also appears problematic. Raters identified neurological and 
convulsive disorders, musculoskeletal disorders (especially involving 
muscles), and disorders of special sense organs (especially eyes), 
along with mental disorders (especially PTSD), as the most difficult to 
rate, the most difficult to apply the Rating Schedule to, and the most 
time consuming to rate.
      Time to rate or otherwise decide a disability claim is a 
scarce resource and a major challenge for raters; it is also a 
challenge for VSOs and their veteran and survivor clients to get claims 
decided in a timely manner. Time appears to be most challenging when 
raters are deciding complex claims, and raters report that they see 
claims getting more complex over time.
      A large majority of raters reported that they had 
insufficient time to rate or otherwise decide a claim, and both raters 
and VSOs reported that there was too much emphasis on speed relative to 
accuracy.
      Obtaining needed evidence, especially given the challenge 
and scarcity of time and the insufficiency of many medical examinations 
(in particular from private examiners, according to raters) is a 
challenge in its own right.
      Separately rating the impact of a disability on quality 
of life and lost earnings capacity was not supported by a majority of 
either raters or VSOs. The use of computerized decision support 
technology was not supported by raters; however, raters reported that 
the use of standardized assessment tools and more specific criteria for 
rating and deciding mental health issues--especially PTSD--would be 
useful.
      The process is difficult for most veterans and survivors 
to understand and navigate. Assisting clients to understand the process 
and the evidence needed for it is a major challenge for VSOs. A 
majority of VSOs further report that they disagree that the process is 
satisfactory to most of their clients. A majority of both raters and 
VSOs indicate that they believe veterans have unrealistic expectations 
of the claims process and the benefits they should receive.
      Overall, most raters and VSOs report that they believe 
that the claims rating process generally arrives at a fair and right 
decision for veterans. Further, in general, raters and VSOs assessed 
the performance of their VSOs (and each other) as good; however, most 
raters reported that they believe VSOs inappropriately coach their 
clients.
Summary of survey findings for raters and VSOs
    The purpose of these surveys was to provide the Commission with 
insights and perspectives from those on the frontlines of the benefits 
determination process--VBA rating officials who rate and otherwise 
decide disability claims, and VSOs who assist veterans and their 
survivors to prepare, present, and prosecute disability claims. The 
findings presented in the previous section portray a picture of a 
benefits determination process that is difficult to use by some 
categories of raters, difficult to assist by many VSOs, and difficult 
to navigate or understand by most veterans and survivors.
    In summary, these survey results and findings highlight some 
specific issues that reflect challenges inherent in the benefits 
determination process. Addressing these challenges may assist in 
improving the overall VA rating process.

                                 
   Prepared Statement of Michael McGeary, Senior Program Officer and
    Study Director, Committee on Medical Evaluation of Veterans for
      Disability Benefits, Board on Military and Veterans Health,
             Institute of Medicine, The National Academies
    Good morning, Mr. Chairman and members of the Committee. My name is 
Michael McGeary. I am a Senior Program Officer of the Institute of 
Medicine (IOM) and served as the staff Director of the IOM's Committee 
on Medical Evaluation of Veterans for Disability Benefits. Established 
in 1970 under the charter of the National Academy of Sciences, the IOM 
provides independent, objective advice to the Nation on improving 
health.
    The Committee on Medical Evaluation of Veterans for Disability 
Benefits (the Committee) was established at the request of the 
Veterans' Disability Benefits Commission and funded by the Department 
of Veterans Affairs (VA).
    In its June 2007 report, A 21st Century System for Evaluating 
Veterans for Disability Benefits, the Committee assessed the medical 
criteria and processes used by VA to determine the degree of disability 
of service-connected veterans. The Committee did not, however, assess 
nonmedical aspects of the VA disability claims process and therefore 
the report does not address all factors that might affect the 
timeliness of decisions on claims. The Committee did not, for example, 
evaluate the adequacy of staffing levels or the performance of 
management information systems.
    Chapter 4 of the report focuses on the medical criteria VA uses to 
assess degree of disability, which are embodied in the VA's Schedule 
for Rating Disabilities. Dr. Lonnie Bristow, who chaired the Committee, 
is scheduled to testify before you on the Rating Schedule on February 
26. Chapter 5 of the report, which I am here to review today, focuses 
on the medical examination and disability rating parts of the claims 
process. Chapter 5 includes background information on the organization 
of the claims process and some statistics on workload trends and the 
timeliness and accuracy of decisions, which I will summarize briefly.
Disability Claims Workload--Veterans Benefits Administration (VBA)
    Between 2000 and 2006, the annual number of claims from veterans 
for disability compensation increased by 56 percent (from 420,000 to 
650,000). VA was able to decide 630,000 claims in 2006, almost as many 
as were filed, but the backlog of pending claims increased. At the end 
of 2006, 378,000 claims were pending, 83,000 of them for more than six 
months.
Disability Claims Workload--Board of Veterans Appeals (BVA)
    Between 2000 and 2006, the annual number of formal appeals filed on 
VA Form 9 increased by 42 percent (from 33,000 to 46,000). Although 
there were fewer Veterans Law Judges (VLJs) in 2006 than in 2000, the 
annual number of completed decisions grew, but not enough to keep the 
backlog of cases pending at BVA from doubling from 20,000 to 40,000. 
This did not include about 130,000 appeals being reconsidered at the 
regional office level, either before going to BVA or on remand from 
BVA.
Timeliness of Disability Decisions--VBA
    The average elapsed time from the date the claim requiring a 
disability decision is received to the date it is decided at the 
regional office level was 177 days in 2006, up from 166 days in 2004 
but down from 223 days in 2002.
Timeliness of Appeals Decisions--VBA and BVA
    The average number of days to resolve appeals by VBA and BVA was 
657 days in 2006, more than the 529 days it took in 2004 but less than 
the 731 days it took in 2002.
Accuracy
    VBA and BVA each review a sample of decisions for quality assurance 
purposes. In 2006, 88 percent of rating-related cases met VBA's 
accuracy standard, compared with 80 percent in 2002. BVA's rate of 
deficiency-free decisions was 93 percent in 2006, compared with 88 
percent in 2002.
Consistency
    VA does not assess consistency of decisionmaking on a regular 
basis. There are indications of substantial variability in 
decisionmaking from state to state, for example, in the average number 
of disabilities per veterans; average combined degree (or severity) of 
disability; average rating level for each of the 14 body systems; 
percentage of veterans service connected for PTSD, for ratings of 100 
percent, and for

individual unemployability; and in the percentage of appeals in which 
the appellant is successful.
IOM Committee Recommendations for Improving the Medical Examination 
        Process
    The medical aspects of the claims process that the Committee looked 
at were, first, the medical examination process and, second, the 
disability rating process.
    Applicants for disability compensation are asked to provide their 
medical records and, under the duty-to-assist law, VBA helps them 
obtain those records, especially their service medical records. In 
nearly every case, VBA has applicants undergo a compensation and 
pension, or C&P, examination performed by a Veterans Health 
Administration (VHA) or contractor clinician. The reports of these C&P 
examinations become part of the medical evidence that VBA's raters use 
to evaluate the degree of disability of the veteran and to assign a 
rating between 0 percent and 100 percent in 10 percent increments. The 
rating level in turn determines the amount of compensation the 
applicant will receive.
    The Committee found that VBA and VHA have improved the quality and 
timeliness of medical examinations greatly in the last 10 years but 
made three recommendations for further improvements. First, VA has 
developed standardized examination worksheets for more than 70 common 
conditions, to increase completeness and consistency of examination 
reports. VA does not, however, have a regular process for updating the 
worksheets. Most were developed a decade ago, and the Committee found 
some outdated tests and procedures. The Committee recommended, 
therefore, that VA implement a process for periodic updating of the 
disability examination of the worksheets, which should be part of, or 
closely linked to the process for updating the Rating Schedule 
recommended by the Committee, with input from an expert advisory 
Committee, also recommended in the report.
    Second, VA has developed interactive online versions of the 
examination worksheets, which result in quicker and higher quality 
reports than dictated reports. VA has not made use of the online 
templates mandatory, and the Committee recommended that VA make them 
mandatory.
    Third, the Committee found that VA's quality review of the 
examination process was more procedural than substantive, measuring 
whether a requested item is included in the report, not whether the 
item is accurate. The Committee recommended that VA establish a regular 
assessment of the substantive quality and consistency, or inter-rater 
reliability of examinations and, if the assessment finds problems, to 
address them, for example by revising the templates or adjusting the 
training program.
IOM Committee Recommendations for Improving the Rating Process
    After the information needed to adjudicate a claim is collected, 
including the C&P examination report, the veteran's file is given to a 
nonmedical rater, who compares the information in the file with the 
criteria in the Rating Schedule to determine the rating level. The 
Committee offered three recommendations for improving the rating 
process.
    First, the Committee found that accuracy rate of rating decisions 
has increased steadily since VA introduced a quality review program in 
1998, from an accuracy rate of 64 percent to 88 percent in 2006. The 
sample size is small, however, only enough to determine the overall 
accuracy rate of regional offices, not the accuracy of decisions at the 
body system or diagnostic code level. GAO and VA's Office of Inspector 
General have noted indicators of variability in decision outcomes and 
urged VA to identify disabilities subject to a great deal of decisions 
variability, understand the reasons for the variability, and act to 
reduce the variability where possible. The Committee recommended that 
VBA periodically assess inter-rate reliability at the diagnostic code 
level and study the accuracy and validity of ratings. For example, VBA 
could have a sample of claims rated by two or more raters and analyze 
the degree of consistency in the ratings given. It could sample ratings 
given for a particular diagnostic code across field offices to analyze 
inter-rater and inter-office differences.
    Second, the Committee found that raters should have better access 
to medical expertise. The raters are not medical professionals. If they 
have a question about the meaning of a test result or if the evidence 
is inconclusive or incomplete, they have to refer the case back to VHA, 
which adds time, or make a decision based on incomplete information, 
which affects accuracy. The Committee recommends that VBA have medical 
consultants available to raters in the regional offices. With modern 
communications technology, VBA medical consultants could be in a 
national or in regional centers.
    At one time, there were physicians on the rating boards, but the 
U.S. Court of Appeals for Veterans Claims barred the participation of 
physicians in rating decisions. The Committee believes that the court's 
decision was based on a misunderstanding of the role of physicians in 
adjudication, which is different from the role of treating physicians. 
All other major disability programs, such as Social Security's, DoD's 
disability evaluation process, and the Federal Employee Compensation 
Act program and civil service disability retirement programs, either 
have physicians or other appropriate clinicians involved in the 
adjudication decision or have medical experts readily available to 
review and discuss claims with lay disability raters.
    The third recommendation regarding the rating process is to develop 
and mandate uniform training and certification programs across all 
regional offices with standardized objectives and outcomes. At the time 
of the report, VA was well along in developing a training and 
certification program for C&P medical examiners, which was due to be 
deployed in the current fiscal year, 2008. VBA had implemented a 
certification program for its veterans service representatives but, 
although plans were being made, no such certification program existed 
for raters. The Committee recommended that VBA develop a training 
program for raters, using advanced techniques, and evaluate the program 
rigorously.
Conclusion
    The June 2007 report of the Committee on Medical Evaluation of 
Veterans for Disability Benefits recommended further improvements in 
VA's medical examination and rating processes. These recommendations 
were aimed at improving the quality of medical evaluation and rating 
processes in terms of accuracy and consistency rather than at 
increasing the timeliness of decisions. However, several of the 
recommendations promise to improve timeliness. The recommendation to 
mandate the use of online medical examination templates, should speed 
the completion of examination reports, and the recommendation to 
provide raters with access to medical consultants, should reduce the 
need to refer case files to VHA for medical opinions.
    This concludes my remarks. Thank you for the opportunity to 
testify. I would be happy to address any questions the Subcommittee 
might have.

                                 
 Prepared Statement of Daniel Bertoni, Director, Education, Workforce, 
       and Income Security, U.S. Government Accountability Office
 Veterans' Disability Benefits: Claims Processing Challenges Persist, 
            while VA Continues to Take Steps to Address Them
                             GAO Highlights
Why GAO Did This Study
    The Subcommittee on Disability Assistance and Memorial Affairs, 
House Veterans' Affairs Committee, asked GAO to present its views on 
the Department of Veterans Affairs' (VA) disability claims process. 
This statement discusses (1) claims processing challenges VA faces, (2) 
steps VA is taking to address these challenges, and (3) opportunities 
for more fundamental reform.
    GAO has reported and testified on this subject on numerous 
occasions. GAO's work has addressed VA's efforts to improve the 
timeliness and accuracy of decisions on claims, VA's efforts to reduce 
pending claims levels, and concerns about decisional consistency. This 
testimony is based on a body of past work, updated as appropriate to 
reflect the current workload and initiatives.
What GAO Found
    Despite taking steps to improve its disability claims process, VA 
continues to face challenges, specifically in reducing the number of 
claims pending, speeding up the process of deciding claims, and 
improving accuracy and consistency of decisions across regional 
offices. For example, between fiscal years 2003 and 2007, the inventory 
of claims awaiting a decision by VA grew by more than 50 percent to a 
total of about 392,000, and the average number of days claims were 
pending increased by 3 weeks to 132 days. Further, GAO and VA's 
Inspector General have identified concerns about the consistency of 
decisions across regional offices. Factors affecting VA's claims-
processing performance may include increases in the number and 
complexity of claims being filed and the potential impacts of laws and 
court decisions.
    VA continues to take steps to help improve claims-processing 
performance, including requesting funding for additional staff. The 
President's fiscal year 2009 budget request funds an increase of more 
than 2,600 additional full-time equivalent employees over fiscal year 
2007 levels to process claims.
    Beyond the steps VA is taking to address its claims processing 
challenges, opportunities for significant performance improvement may 
lie in more fundamental reform of VA's disability compensation program. 
Such reforms could include reexamining program design such as updating 
the disability criteria to reflect the current state of science, 
medicine, technology, and labor market conditions. It could also 
include examining the structure and division of labor among field 
offices. Recent studies conducted by presidential and congressionally 
appointed commissions have recommended some fundamental changes, 
including updating VA's rating schedule, which provides the basis for 
decisions about eligibility for benefits.

                               __________
Mr. Chairman and Members of the Committee:
    I am pleased to have the opportunity to comment on the claims-
processing challenges and opportunities facing the Department of 
Veterans Affairs' (VA) disability compensation and pension programs. 
Through these programs, VA provided about $37.5 billion in cash 
disability benefits to more than 3.6 million veterans and their 
survivors in fiscal year 2007. For years, the claims process has been 
the subject of concern and attention by VA, Congress, and veterans 
service organizations, due in large part to long waits for decisions 
and large numbers of claims pending a decision. Further, we and VA's 
Inspector General have identified concerns about the consistency of 
decisions across regional offices. These concerns have continued and 
been magnified as veterans of the conflicts in Iraq and Afghanistan, 
and survivors of servicemembers who have died in those conflicts face 
similar issues as they seek VA disability benefits. In January 2003, we 
designated modernizing VA and other federal disability programs as a 
high-risk area, because of these service delivery challenges, and 
because our work over the past decade has found that these programs are 
based on outmoded concepts from the past. More recently, the President 
and Congress established commissions to study VA's disability 
compensation system.
    You asked us to discuss our views on VA's disability claims 
process. Specifically, my statement today addresses (1) claims 
processing challenges VA faces, (2) steps VA is taking to address these 
challenges and (3) opportunities for more fundamental reform. My 
statement draws on a number of prior GAO reports and testimonies that 
were conducted in accordance with generally accepted government 
auditing standards. (See related GAO products.) We updated information 
as appropriate to reflect the current status of VA claims processing 
workload and initiatives.
    In summary, despite taking steps to improve its processing of 
disability claims, VA continues to face challenges, specifically in 
speeding up the process of deciding claims, reducing the number of 
claims pending, and improving the accuracy and consistency of decisions 
across regional offices. For example, between fiscal years 2003 and 
2007, the inventory of claims awaiting a decision grew by more than 50 
percent to a total of about 392,000, in part because of increased 
filing of claims, including those filed by veterans of the Iraq and 
Afghanistan conflicts and from VA's increased outreach to veterans.\1\ 
During the same period, the average number of days these claims were 
pending increased by 21 days, to an average of 132 days. Further, we 
and VA's Inspector General have identified concerns about the 
consistency of decisions across regional offices. Some of the factors 
affecting VA's claims processing performance may include increases in 
the number and complexity of claims being filed such as those for Post 
Traumatic Stress Disorder (PTSD), reopening of existing claims, and the 
potential impacts of laws and court decisions. VA has taken a number of 
steps to help improve claims processing performance, including 
requesting funding for additional staff, establishing ``tiger teams'' 
to help process certain claims, and expediting the processing of claims 
filed by veterans of Operation Iraqi Freedom (OIF) and Operation 
Enduring Freedom (OEF). The President's fiscal year 2009 budget request 
funds an increase of over 2,600 full-time equivalent employees from 
actual fiscal year 2007 levels to process compensation claims. While 
the infusion of a large number of staff has the potential of increasing 
VA's claims processing capacity, quickly absorbing these many staff 
will likely present human capital challenges for VA such as how to 
develop, train, and deploy them.
---------------------------------------------------------------------------
    \1\ Rating-related claims are primarily original claims for 
disability compensation and pension benefits, and reopened claims. For 
example, veterans may file reopened claims if they believe their 
service-connected conditions have worsened.
---------------------------------------------------------------------------
    Beyond the steps VA is taking, opportunities for significant 
performance improvement may lie in more fundamental reform of VA's 
disability compensation program. This would include reexamining program 
design as well as the structure and division of labor among field 
offices. For example, after more than a decade of research, we have 
found that VA's and other federal disability programs have not been 
updated to reflect the current state of science, medicine, technology, 
and labor market conditions. More specifically, VA's rating schedule, 
upon which disability decisions are made, is based primarily on 
estimates made in 1945 about the effect of service-connected 
impairments on the average individual's ability to perform jobs 
requiring manual labor. We and at least two recent commissions--the 
President's Commission on Care for America's Returning Wounded 
Warriors, commonly referred to as the Dole-Shalala Commission, and the 
Veterans' Disability Benefits Commission--appointed to study VA's 
disability compensation system, have recommended updating VA's rating 
schedule, among other fundamental reforms.
Background
    VA pays monthly disability compensation benefits to veterans with 
service-connected disabilities (injuries or diseases incurred or 
aggravated while on active military duty) according to the severity of 
the disability. VA also pays additional compensation for some 
dependents--spouses, children, and parents--of veterans.\2\ VA's 
pension program pays monthly benefits based on financial need to 
certain wartime veterans or their survivors.\3\
---------------------------------------------------------------------------
    \2\ 38 U.S.C. Sec. 1115 provides for payment of additional benefits 
for qualifying dependents of veterans whose disability is rated not 
less than 30 percent.
    \3\ Veterans qualify for pensions for non-service connected 
disability if they have low income, served in a period of war, and are 
permanently and totally disabled for reasons not service-connected (or 
are aged 65 or older). 38 U.S.C. Sec. 1521 and 38 U.S.C. Sec. 1513.
---------------------------------------------------------------------------
    When a veteran submits a claim to any of the Veterans Benefits 
Administration's (VBA) 57 regional offices, a veterans service 
representative is responsible for obtaining the relevant evidence to 
evaluate the claim. Such evidence includes veterans' military service 
records, medical examinations, and treatment records from VA medical 
facilities and private medical service providers. Once a claim has all 
the necessary evidence, a rating specialist evaluates the claim and 
determines whether the claimant is eligible for benefits. If the 
veteran is eligible for disability compensation, the rating specialist 
assigns a percentage rating based on degree of disability. A veteran 
who disagrees with the regional office's decision can appeal to VA's 
Board of Veterans' Appeals and then to U.S. federal courts.\4\
---------------------------------------------------------------------------
    \4\ Appeals from the Board of Veterans Appeals go to the U.S. Court 
of Appeals for Veterans Claims, and finally to the U.S. Court of 
Appeals for the Federal Circuit, under certain circumstances.
---------------------------------------------------------------------------
VA Continues to Face Challenges in Improving Its Claims Processing
    VA continues to experience significant service delivery 
challenges--large pending workloads, lengthy processing times, and 
inaccurate and inconsistent decisions. A number of factors contribute 
to these challenges, such as an increase in the numbers and complexity 
of the claims veterans are filing and the effects of recent laws and 
court decisions. These factors have eroded some of the earlier gains VA 
made in reducing claims backlogs. For example, VA made progress in 
fiscal years 2002 and 2003 reducing the size and age of its pending 
claims inventory, but it has lost ground since then.
    VA's inventory of claims awaiting a decision and their average time 
pending has increased significantly in the last 4 years, in part 
because of an increase in the number of claims received. The number of 
pending claims increased by more than 50 percent from the end of fiscal 
year 2003 to the end of fiscal year 2007 to about 392,000. During the 
same period, the number of claims pending longer than 6 months more 
than doubled from about 47,000 to about 101,000 (see figure 1).
Figure 1--Rating-Related Claims Pending at End of Period, Fiscal Years 
                               2000-2007

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Source: VA data.

    Similarly, while VA reduced the average number of days claims were 
pending from a high of 182 days at the end of fiscal year 2001 to 111 
days at the end of fiscal year 2003, the average age of pending claims 
crept back up to 132 days by the end of fiscal year 2007, as shown in 
figure 2.
 Figure 2--Average Days Pending for VA Compensation and Pension Rating-
                 Related Claims, Fiscal Years 2000-2007

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Source: VA data.

    A number of factors are contributing to this increase in VA's 
inventory of pending claims, and their average time pending. First, 
there has been a steady increase in the number of claims filed--
including those filed by veterans of the Iraq and Afghanistan 
conflicts--from about 579,000 in fiscal year 2000 to about 838,000 in 
fiscal year 2007, an increase of about 45 percent. VA projects claims 
receipts to increase to about 872,000 in fiscal year 2009 and cautions 
that ongoing hostilities in Iraq and Afghanistan, and the Global War on 
Terror in general, may further increase its workload. VA also 
attributes increased claims receipts to its efforts to increase 
outreach to veterans and servicemembers. For example, VA reports that 
in fiscal year 2006, it provided benefits briefings to about 393,000 
separating servicemembers, up from about 210,000 in fiscal year 2003. 
VA has also noted that the number of veterans receiving compensation 
has increased by about a half million from fiscal years 2000 to 2007. 
VA anticipates the number of reopened claims will increase as 
compensation recipients--many of whom suffer from chronic progressive 
disabilities such as diabetes, mental illness, and cardiovascular 
disabilities--reopen claims for increased benefits as they age and 
their conditions worsen.
    Another factor affecting processing times is the complexity of 
cases, in both terms of numbers and types of disabilities veterans are 
claiming. According to VA, some veterans are citing more disabilities 
in their claims than in the past and these claims can take longer to 
complete because each disability needs to be evaluated separately. VA 
reported that the number of cases with eight or more disabilities 
claimed increased by 168 percent--from about 21,800 to about 58,500--
from 2000 to 2007. Additionally, VA notes that it is receiving claims 
for new and complex disabilities related to combat and deployments 
overseas, including those based on environmental and infectious disease 
risks and Traumatic Brain Injuries. Further, VA reports receiving 
increasing numbers of claims for compensation for PTSD, which is 
generally more difficult to evaluate, in part because of the evidence 
required to link the disorder to a particular event. According to VA, 
from 1999 through 2007, the number of veterans receiving compensation 
benefits for PTSD increased from 120,000 to nearly 300,000.
    Further, a number of statutes \5\ and court decisions \6\ related 
to VA's disability claims process have affected VA's ability to process 
claims in a timely manner. For example, VA stated that the Veterans 
Claims Assistance Act of 2000 significantly increased the length and 
complexity of claims development by adding more steps to the process 
and lengthening the time it takes to develop and decide a claim. VA 
also notes that legislation and VA regulations have expanded benefit 
entitlement, adding to the volume of claims. In recent years, statutes 
have created new presumptions of service-connected disabilities for 
many Vietnam veterans and former prisoners of war.\7\ Also, VA expects 
additional claims receipts following enactment of legislation that 
allows certain military retirees to receive both military retirement 
pay and VA disability compensation.\8\
---------------------------------------------------------------------------
    \5\ Veterans Benefits Improvement Act of 2004, Pub. L. No.108-454; 
Veterans Benefits Act of 2003, Pub. L. No. 108-183; Veterans Claims 
Assistance Act of 2000, Pub. L. No. 106-475.
    \6\ See e.g., Moody v. Principi, 360 F.3d. 1306 (Fed. Cir. 2004); 
Szemraj v. Principi, 357 F.3d 1370 (Fed. Cir. 2004); Disabled American 
Veterans v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 
2003).
    \7\ For example, the Agent Orange Act 1991, Pub. L. No. 102-4, 
broadens the presumption of exposure to herbicides in Vietnam. See 
also, 38 C.F.R. Sec. 3.309 (diseases subject to a presumptive service 
connection).
    \8\ National Defense Authorization Act for Fiscal Year 2004, Pub. 
L. No. 108-136, Div. A. tit VI, Sec. 641, amending 10 U.S.C. Sec. 1414.
---------------------------------------------------------------------------
VA Continues to Take Steps to Improve Claims Processing
    VA is taking several steps to improve claims processing. Some near-
term initiatives include the increased use of overtime and use of 
retired VA employees to provide training and to assist in processing 
claims. VA reported it currently employs 70 rehired annuitants. VA 
expects these annuitants to complete 23,000 rating decisions in 2008. 
VA has also used other initiatives such as brokering claims between 
offices to help manage its claims inventory and establishing special 
teams to assist in the processing of claims. For example, VA 
established teams to process disability claims for veterans 70 years 
and older and for expediting claims of OIF and OEF veterans. In 2007, 
VA announced an initiative to provide priority processing of disability 
claims for all OIF and OEF veterans', including active duty, National 
Guard, and reservists.
    In VA's fiscal year 2009 budget justification, an increase in 
claims processing staff was identified as essential to reducing the 
pending claims inventory and improving timeliness. The fiscal year 2009 
request would fund 10,998 full-time equivalent employees working on 
compensation and pension claims, and represents an increase of about 
2,600 positions, or 32 percent over fiscal year 2007. In keeping with 
our prior recommendation, VA's budget justification provides 
information on actual and planned productivity, in terms of claims 
decided per full-time equivalent employee. While VA expects a temporary 
decline in productivity in fiscal year 2008 as new staff are trained 
and become more experienced, it expects productivity to increase in the 
longer term. VA is modifying its centralized training program to focus 
newly hired employees on processing burial and dependency claims. VA 
reports this will allow them to become productive more quickly, while 
enabling more experienced staff to focus on disability claims 
processing. However, incorporating the large number of new employees 
into the disability claims process will likely present human capital 
challenges for VA. For example, VA would have to adequately train them. 
For staff who decide claims, it is estimated that this could take 1 to 
2 years. VA would also have to determine where these staff should be 
deployed.
    Even as staffing levels increase, however, VA acknowledges that it 
still must take other actions to improve productivity.\9\ For example, 
VA added more locations where servicemembers can initiate the VA 
disability claims process up to 180 days prior to separating from the 
service. VA reports that these locations, known as Benefits Delivery at 
Discharge sites, now total 140. The goal of the program is to provide 
benefits within 60 days following discharge. In addition, VA also plans 
to pilot paperless Benefits Delivery at Discharge, where 
servicemembers' disability claim applications, service medical records, 
and other evidence would be captured electronically prior to discharge. 
VA expects this new process will reduce the time needed to gather 
evidence for deciding claims. GAO currently has work underway looking 
at the Benefits Delivery at Discharge program.
---------------------------------------------------------------------------
    \9\ See GAO, Veterans' Benefits: More Transparency Needed to 
Improve Oversight of VBA's Compensation and Pension Staffing Levels, 
GAO-05-47 (Washington, D.C.: Nov. 15, 2004).
---------------------------------------------------------------------------
    Another step to improve claims processing is a pilot program by VA 
and the Department of Defense (DoD) in which VA completes disability 
ratings for servicemembers who have been found unfit for duty due to 
disability by the military services. The goal of the pilot program is 
to deliver faster and more consistent disability evaluations and 
compensation to servicemembers and veterans. Because VA rates 
disabilities while the servicemember is still in the military service, 
disability benefits can be awarded soon after the servicemember is 
discharged. GAO is currently studying this pilot.
    In addition to challenges with managing pending claims inventories 
and deciding claims in a timely manner, VA acknowledges that regional 
office decisional accuracy needs further improvement. VA reports that 
it improved the accuracy of decisions on rating-related compensation 
claims from 80 percent in fiscal year 2002 to 88 percent in fiscal year 
2007. However, this figure remains short of its current strategic goal 
of 98 percent. In March 2007, VA stated it had established an 
aggressive quality assurance program to assess rating, authorization, 
and fiduciary program accuracy. Additionally, VA plans to begin routine 
quarterly monitoring of compensation and pension cases by diagnostic 
code and to expand quality review staff to complete additional reviews.
    VA also continues to face questions about its ability to ensure 
that veterans receive consistent decisions across regional offices. We 
have identified the need for VA to systematically address this issue to 
achieve acceptable levels of variation.\10\ VA's Inspector General has 
studied one indicator of possible inconsistency, which is a wide 
variation in average payments per veteran from state to state. In May 
2005, the Inspector General reported that variation in rating decisions 
was more likely to occur for some disabilities like PTSD than for 
others, where much of the information needed to make a determination is 
susceptible to interpretation and judgment. To improve decision 
consistency, VA conducted a pilot project to monitor consistency of 
rating-related claims decisions. VA also conducted a consistency review 
of Post Traumatic Stress Disorder claims. Finally, VA deployed 58 
computerized exam templates for each type of compensation and pension 
exam to each Veterans Health Administration compensation and pension 
exam site to improve the quality of medical exams used to make rating 
decisions.
---------------------------------------------------------------------------
    \10\ GAO, Veterans' Benefits: Quality Assurance for Disability 
Claims and Appeals Processing Can Be Further Improved, GAO-02-806 
(Washington, D.C.: Aug. 16, 2002); and Veterans Benefits: VA Needs Plan 
for Assessing Consistency of Decisions, GAO-05-99 (Washington, D.C.: 
Nov. 19, 2004).
---------------------------------------------------------------------------
Opportunities for Improvement May Lie in More Fundamental Reform
    While VA is taking actions to address its claims processing 
challenges, there are opportunities for more fundamental program reform 
such as reexamining program design and the structure and division of 
labor among field offices.
    After more than a decade of research, we have determined that 
federal disability programs, including VA's disability program, are in 
urgent need of attention and transformation and placed modernizing 
federal disability programs on our high-risk list in January 2003.\11\ 
Specifically, our research showed that the disability programs 
administered by VA and the Social Security Administration (SSA) lag 
behind the scientific advances and economic and social changes that 
have redefined the relationship between impairments and work. For 
instance, advances in medicine and technology have reduced the severity 
of some medical conditions and have allowed individuals to live with 
greater independence and function in work settings. Moreover, the 
nature of work has changed in recent decades as the national economy 
has moved away from manufacturing-based jobs to service- and knowledge-
based employment. At the same time, impairments such as Traumatic Brain 
Injury have become more prevalent. Yet VA's and SSA's disability 
programs remain mired in concepts from the past--particularly the 
concept that impairment equates to an inability to work--and as such, 
we found that these programs are poorly positioned to provide 
meaningful and timely support for Americans with disabilities. We 
currently are assessing the challenges VA faces in providing vocational 
rehabilitation and employment services to current beneficiaries as well 
as the large number of servicemembers returning from the OIF and OEF 
conflicts in need of such services.
---------------------------------------------------------------------------
    \11\ GAO, High Risk Series: An Update, GAO-03-119 (Washington, 
D.C.: Jan. 2003).
---------------------------------------------------------------------------
    In prior work, we recommended that VA use its annual performance 
plan to delineate strategies for and progress in periodically updating 
labor market data used in its disability determination process.\12\ We 
also recommended that VA study and report to Congress on the effects 
that a comprehensive consideration of medical treatment and assistive 
technologies would have on its disability programs' eligibility 
criteria and benefits package. This study would include estimates of 
the effects on the size, cost, and management of VA's disability 
programs and other relevant VA programs and would identify any 
legislative actions needed to initiate and fund such changes.
---------------------------------------------------------------------------
    \12\ GAO, SSA and VA Disability Programs: Re-examination of 
Disability Criteria Needed to Help Ensure Program Integrity, GAO-02-597 
(Washington D.C.: Aug. 9, 2002).
---------------------------------------------------------------------------
    In its October 2007 report, the Veterans' Disability Benefits 
Commission (VDBC)--established by Congress in 2003 to study the 
appropriateness of VA disability benefits \13\--also pointed out that 
VA's eligibility criteria were outdated and recommended that the VA 
Rating Schedule be reviewed and updated. The commission further 
recommended the schedule be reviewed and updated on a frequent basis 
and that first priority be given to revising the mental health and 
neurological body systems to expeditiously address Post Traumatic 
Stress Disorder, other mental disorders, and Traumatic Brain Injury.
---------------------------------------------------------------------------
    \13\ National Defense Authorization Act for Fiscal Year 2004.
---------------------------------------------------------------------------
    In its July 2007 report, the Dole-Shalala Commission also 
recommended updating VA's rating schedule. The commission reported that 
VA's rating schedule is outdated and does not include diagnostic 
criteria for injuries that are new or for which diagnostic criteria are 
changing rapidly, such as Traumatic Brain Injury. Further, the 
commission pointed out that VA's rating schedule fails to acknowledge 
the disabling impact of conditions such as PTSD, and the effect medical 
advances have on the prognosis for certain conditions such as serious 
burns and amputations.
    VA is in the process of addressing some of our and the commission's 
concerns. For example, VA is modifying the rating schedule to provide 
detailed and updated criteria for evaluating Traumatic Brain Injury and 
the potential effect of medical advances on certain conditions. In 
January 2008, VA announced that it had contracted for a study of the 
appropriate level of compensation for any loss of earnings capacity 
caused by service-incurred or service aggravated conditions.
    In addition to program design, VA's regional office claims 
processing structure may be disadvantageous to efficient operations. 
VBA and others who have studied claims processing have suggested that 
consolidating claims processing into fewer regional offices could help 
improve claims-processing efficiency and save overhead costs. We noted 
in December 2005 that VA had made piecemeal changes to its claims-
processing field structure. For example, VA consolidated decisionmaking 
on certain claims--Benefits Delivery at Discharge claims, which are 
generally original claims for disability compensation--at two regional 
offices (Salt Lake City, Utah and Winston-Salem, North Carolina). VA 
also consolidated in-service dependency and indemnity compensation 
claims at the Philadelphia regional office. These claims are filed by 
survivors of servicemembers who die while in military service.\14\ VA 
consolidated these claims as part of its efforts to provide expedited 
service to survivors, including servicemembers who died in Operations 
Iraqi Freedom and Enduring Freedom. Despite these initiatives, VA has 
not changed its basic field structure for processing disability claims 
at 57 regional offices, which have large variations in performance. 
Unless more comprehensive and strategic changes are made to its field 
structure, VBA is likely to miss opportunities to substantially improve 
productivity, especially in the face of future workload increases. We 
have recommended that VA undertake a comprehensive review of its field 
structure for processing disability compensation and pension 
claims.\15\ Undertaking such a review is especially critical, since VA 
will need to determine how and where to deploy the 2,600 new staff that 
may be coming on board between fiscal years 2007 to 2009 to address its 
claims processing challenges.
---------------------------------------------------------------------------
    \14\ VBA also provides dependency and indemnity compensation to 
survivors of certain deceased disability compensation beneficiaries. 38 
U.S.C. Sec. Sec. 1541,1542.
    \15\ GAO, Veterans' Benefits: Further Changes in VBA's Field Office 
Structure Could Help Improve Disability Claims Processing. GAO-06-149 
(Washington, D.C.: Dec. 9, 2005).
---------------------------------------------------------------------------
    In conclusion, reexamining claims-processing challenges and finding 
viable solutions are daunting tasks. While VA has taken a number of 
steps to improve its disability claims process, challenges persist. 
Opportunities may lie in more fundamental reform. A number of recent 
studies by commissions, GAO, and others have laid the groundwork and 
made many recommendations for addressing current workload challenges 
and redesigning the current program to better align it with modern 
concepts of disability and support services. However, as we move 
forward, it is imperative that VA adequately assess its options for 
improving its disability compensation program and their potential 
effects. It is also important that VA continue to look for other 
fundamental reforms that may be needed to improve its disability 
program for the longer term.
    Mr. Chairman, this concludes my remarks. I would be happy to answer 
any questions that you or other members of the subcommittee may have.
GAO Contact and Acknowledgments
    For further information, please contact Daniel Bertoni at (202) 
512-7215 or [email protected]. Also contributing to this statement were 
Shelia Drake, Martin Scire, Kate van Gelder, and Rachael Valliere.
Related GAO Products
    DoD and VA: Preliminary Observations on Efforts to Improve 
Healthcare and Disability Evaluations for Returning Servicemembers. 
GAO-07-1256T. Washington, D.C.: September 26, 2007.
    Veterans' Disability Benefits: Processing of Claims Continues to 
Present Challenges. GAO-07-562T. Washington, D.C.: March 13, 2007.
    Veterans' Disability Benefits: Long-Standing Claims Processing 
Problems Persist. GAO-07-512T. Washington, D.C.: March 7, 2007.
    High Risk Series: An Update. GAO-07-310. Washington, D.C.: January 
31, 2007.
    Veterans' Disability Benefits: VA Can Improve Its Procedures for 
Obtaining Military Service Records. GAO-07-98. Washington, D.C.: 
December 12, 2006.
    Veterans' Benefits: Further Changes in VBA's Field Office Structure 
Could Help Improve Disability Claims Processing. GAO-06-149. 
Washington, D.C.: December 9, 2005.
    Veterans' Disability Benefits: Claims Processing Challenges and 
Opportunities for Improvements. GAO-06-283T. Washington, D.C.: December 
7, 2005.
    Veterans' Disability Benefits: Improved Transparency Needed to 
Facilitate Oversight of VBA's Compensation and Pension Staffing Levels. 
GAO-06-225T. Washington, D.C.: November 3, 2005.
    VA Benefits: Other Programs May Provide Lessons for Improving 
Individual Unemployability Assessments. GAO-06-207T. Washington, D.C.: 
October 27, 2005.
    Veterans' Disability Benefits: Claims Processing Problems Persist 
and Major Performance Improvements May Be Difficult. GAO-05-749T. 
Washington, DC.: May 26, 2005.
    VA Disability Benefits: Board of Veterans' Appeals Has Made 
Improvements in Quality Assurance, but Challenges Remain for VA in 
Assuring Consistency. GAO-05-655T. Washington, D.C.: May 5, 2005.
    Veterans Benefits: VA Needs Plan for Assessing Consistency of 
Decisions. GAO-05-99. Washington, D.C.: November 19, 2004.
    Veterans' Benefits: More Transparency Needed to Improve Oversight 
of VBA's Compensation and Pension Staffing Levels. GAO-05-47. 
Washington, D.C.: November 15, 2004.
    Veterans' Benefits: Improvements Needed in the Reporting and Use of 
Data on the Accuracy of Disability Claims Decisions. GAO-03-1045. 
Washington, D.C.: September 30, 2003.
    Department of Veterans Affairs: Key Management Challenges in Health 
and Disability Programs. GAO-03-756T. Washington, D.C.: May 8, 2003.
    Veterans Benefits Administration: Better Collection and Analysis of 
Attrition Data Needed to Enhance Workforce Planning. GAO-03-491. 
Washington, D.C.: April 28, 2003.
    Veterans' Benefits: Claims Processing Timeliness Performance 
Measures Could Be Improved. GAO-03-282. Washington, D.C.: December 19, 
2002.
    Veterans' Benefits: Quality Assurance for Disability Claims and 
Appeals Processing Can Be Further Improved. GAO-02-806. Washington, 
D.C.: August 16, 2002.
    Veterans' Benefits: VBA's Efforts to Implement the Veterans Claims 
Assistance Act Need Further Monitoring. GAO-02-412. Washington, D.C.: 
July 1, 2002.
    Veterans' Benefits: Despite Recent Improvements, Meeting Claims 
Processing Goals Will Be Challenging. GAO-02-645T. Washington, D.C.: 
April 26, 2002.
    Veterans Benefits Administration: Problems and Challenges Facing 
Disability Claims Processing. GAO/T-HEHS/AIMD-00-146. Washington, D.C.: 
May 18, 2000.

                                 
     Prepared Statement of Richard Paul Cohen, Executive Director,
           National Organization of Veterans' Advocates, Inc.
MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    Thank you for the opportunity to present the views of the National 
Organization of Veterans' Advocates, Inc. (``NOVA'') on the issues 
surrounding the VA's disability claims process at the Regional Office 
level, including what measures can be taken to improve its 
effectiveness in lessening the 600,000 plus claims backlog, and 
solutions for improving the VA claims process system in general.
    NOVA is a not-for-profit Sec. 501(c)(6) educational organization 
incorporated in 1993. Its primary purpose and mission is dedicated to 
train and assist attorneys and non-attorney practitioners who represent 
veterans, surviving spouses, and dependents before the Department of 
Veterans Affairs (``VA''), the Court of Appeals for Veterans Claims 
(``CAVC''), the United States Court of Appeals for the Federal Circuit 
(``Federal Circuit''), and on remand before the VA. NOVA has written 
many amicus briefs on behalf of claimants before the CAVC and the 
Federal Circuit. The CAVC recognized NOVA's work on behalf of veterans 
when it awarded the Hart T. Mankin Distinguished Service Award to NOVA 
in 2000. The positions stated in this testimony have been approved by 
NOVA's Board of Directors and represent the shared experiences of 
NOVA's members as well as my own fifteen-year experience representing 
claimants at all stages of the veteran's benefits system from the VA 
Regional Offices to the Board of Veterans Appeals to the CAVC as well 
as before the Federal Circuit.

                              OBSERVATIONS

    Throughout 2007, top VA officials such as former Secretary James 
Nicholson and Daniel Cooper, VA's Veterans Benefits Administration 
Director, informed Congress about the backlog and excessive delays 
veterans are facing when filing a claim for VA benefits. Unfortunately, 
it is NOVA's conclusion that 2008 has brought little to no change in 
the following six major problem areas causing or contributing to the 
VA's inability to process a veteran's claim in a timely fashion. All of 
these problems require immediate attention and action in order for our 
Nation's veterans to see any real improvement in a system upon which 
they rely for benefits and assistance.
I. Backlog
    In 2006, the backlog of claims for VA benefits, has skyrocketed to 
over 654,000 claims. See, Report Veterans Disability Benefits 
Commission, October 2007, p. 305. At the same time, the VA received 
some 800,000 new claims in 2006, making it nearly impossible for VA 
staff to effectively address the 654,000 backlogged claims waiting to 
be processed and decided.
II. Processing Time
    When a veteran submits a new claim for VA benefits, he or she must 
currently wait an average of 177 days--almost six months--before 
getting the first decision. This six-month processing time consists 
primarily of the VA obtaining evidence, usually with the veteran's 
assistance. And, not surprisingly, when the VA does finally issue a 
decision, it is not always favorable. When a veteran appeals an adverse 
decision, the processing time for a claim on appeal is astronomical. On 
average, the time from receipt of the notice of disagreement, which 
begins the appeal, until the issuance of a Board of Veterans' Appeals 
(``BVA'') decision is 971 days. Office of the Secretary, Department of 
Veterans Affairs, ``Strategic Plan for Employees'', July 2007, P 14; 
Reports of the Chairman of the Board of Veterans' Appeals, Fiscal Year 
2006, p. 16. Simply stated, because of the problems identified herein, 
a veteran must wait more than three years (177 days for the initial 
processing of a new client plus 971 days for appeal to be ultimately 
adjudicated) to finally get a favorable decision from the BVA granting 
him or her VA benefits and compensation. Those veterans whose claims 
are not granted by the BVA must wait 2 more years for a decision by the 
CAVC.
    Compounding the processing time even more is the well-intentioned 
Veterans Claims Assistance Act of 2000. The VCAA's intended purpose was 
to better inform the veteran about the information and evidence needed 
to support his or her claim. However, the reality is that the veteran 
now receives a multi-page form letter, which results in a deluge of 
confusing correspondence between the VA and the veteran.
III. Insufficient Staffing
    As of April 30, 2007, the VBA had 12,684 employees processing 
veteran's claims. Department of Veterans Affairs, ``Fact Sheet'' July 
2007, P. 6. In September 2007, former VA Secretary Nicholson reported 
that 1,100 new staff had been hired in an effort to reduce the 177 days 
it takes the VA to issue the first decision on a new claim. Even with 
these new hires, the staffing at local VA regional offices is woefully 
inadequate as the numbers make clear: some 13,784 VBA employees are 
being tasked with processing and deciding over 1.4 million new and 
backlogged claims.
IV. Insufficient Training
    In 2006, the VA's Office of Inspector General conducted a survey of 
Rating Veterans Service Representatives (``raters'') and Decision 
Review Officers (``DROs''). The results of the survey, revealed that 
within the last year they had received 10 hours or less of formal 
classroom instruction on rating policies and procedures. Department of 
Veterans Affairs Office of Inspector General, ``Review of State 
Variances in VA Disability Compensation Payments'', May 19, 2005, p. 
58. Given that the VA is the second largest government agency with 57 
regional offices and over 12,000 staff throughout the country, 10 hours 
of training cannot possibly suffice to keep all of the VA's local 
offices and staff in step with all the policies and procedures directly 
affecting veterans' claims.
V. Inappropriate Production Standards
    Raters and DROs are held to production standards of completing 
decisions in three to five cases per day which are tied to awards and 
bonuses, and which adversely affect the quality of their work and the 
accuracy of their decisions. Nearly half (47%) of those surveyed said 
it was difficult or very difficult to meet their daily production 
standards. Forty-nine percent stated that they had difficulty meeting 
their production standards without sacrificing quality. And 57% stated 
they have difficulty meeting their production standards if they ensure 
that they have sufficient evidence for each rating and thoroughly 
review the evidence. Department of Veterans Affairs Office of Inspector 
General, ``Review of State Variances in VA Disability Compensation 
Payments'', May 19, 2005, pp. 60, 61. These adjudicators are supposed 
to make decisions based on the evidence in the veteran's claims folder, 
which can be anywhere from a couple of hundred to several thousand 
pages of records. But, by forcing VA adjudicators to make three to five 
decisions per day, the decisionmaker is forced to make rush decisions, 
oftentimes without genuinely reviewing the veteran's entire claims 
file.
VI. Inaccurate and Inconsistent Decision Making
    Calculations derived from the Reports of the Chairman of the Board 
of Veterans' Appeals reveal an accuracy rate in disability benefit 
decisions by the VA of less than 20%, rather than the 88% accuracy rate 
reported by the VA in 2006. See, Institute of Medicine ``A 21st-century 
System for Evaluating Veterans for Disability Benefits'' Pp. 180,181; 
Reports of the chairman of the board of Veterans' Appeals, Fiscal Year 
2006, p. 19. http://www.va.gov/Vetapp/ChairRpt/BVA2006AR.pdf. 
Inaccurate rating decisions result in inappropriate denials and lower 
awards than are warranted, and also in more appeals.
    Providing support for anecdotal complaints that veterans regularly 
have to appeal partially favorable Regional Office decisions ( usually 
due to a lower rating being assigned than the veteran's disability 
warrants) the VA's Office of the Inspector General's 2006 survey, 
revealed that 52.4% of Regional Office raters believed it was somewhat 
likely or very likely that two or more different ratings ( one 
resulting in more compensation for the veteran) for the same medical 
condition could be supported. Department of Veterans Affairs Office of 
Inspector General, ``Review of State Variances in VA Disability 
Compensation Payments'', May 19, 2005, p. 59. In addition, veterans' 
advocates are now reporting incidents of VA rating officers and 
examiners ignoring the diagnostic criteria contained in the Diagnostic 
and Statistical Manual of Mental Disorders, published by the American 
Psychiatric Association. Giving more weight to their personal biases 
than the diagnostic criteria, VA raters and examiners are denying PTSD 
claims submitted by combat veterans, falsely concluding that the 
veteran's combat stressor was insufficient for a diagnosis of PTSD.

                            RECOMMENDATIONS

I. Staffing
    Quite simply, all VA regional offices need more staff to process 
and decide the new and backlogged claims. NOVA recommends that 
increased funding be provided to the Veterans Benefits Administration, 
specifically targeted toward hiring more staff, raters and DROs. Only 
by increasing the number of VA employees who have the responsibility 
for processing claims can the speed of claims processing be increased 
without sacrificing the accuracy of the decisions.
II. Training
    In addition to hiring more staff, the staff must be regularly and 
effectively trained. NOVA therefore recommends that increased funding 
be specifically directed toward providing semiannual training in VA law 
and medicine to VA raters, DRO's, Regional Office staff and to 
clinicians who conduct psychological evaluations and compensation and 
pension exams. This training should provide emphasis on the 
significance of the duty to assist and notify veterans, the VA's 
regulations regarding the benefit of the doubt, and how to rate 
difficult medical conditions such as psychological impairments, TBI, 
pain, impairments caused by Agent Orange exposure, and Gulf War 
Illness. It should be noted that the Veterans' Disability Benefits 
Commission recommended increasing VA staff and adequate education and 
training in order ``to achieve a manageable claims backlog''. Veterans' 
Disability Benefits Commission, ``Honoring the Call to Duty: Veterans 
Disability Benefits in the 21st Century'', October 2007, pp. 394, 395, 
recommendations 9.1, 9.3, 9.5. Similarly, the VA's Office of Inspector 
General recognized the need for ongoing training and reevaluation of 
human resources to ``ensure that the VBA field organization is 
adequately staffed and equipped to meet mission requirements''. 
Department of Veterans Affairs Office of Inspector General, ``Review of 
State Variances in VA Disability Compensation Payments'', May 19, 2005, 
xi, recommendation 6.
    Finally, this training needs to include some meaningful way for VA 
adjudicators to review precedential opinions from the U.S. Court of 
Appeals for Veterans Claims and apply them where relevant. Given the 
current caseload of claims to decide, VA adjudicators cannot be 
expected, on their own, to keep up with the Court's jurisprudence. 
There should be a system in place for key Court cases to be 
disseminated among VA adjudicators so they can start following and 
applying Veterans Court precedent in a timely and efficient manner. 
Consistent training sessions would help VA adjudicators better 
understand the implications and meaning behind important Veterans Court 
decisions, and help them implement the Court's case law in their own 
rating decisions.
III. Concentrate on Accuracy Not Just Speed When Deciding VA Claims
    Although every claimant wants a speedy decision, and the old saw 
reminds us that ``justice delayed is justice denied'', an overly hasty 
and erroneous decision is not beneficial to the veteran or to the VA, 
which will have to deal with the eventual appeal. In the long run, the 
time spent to provide an accurate and just rating will most certainly 
reduce the VA's backlog by eliminating ``hamster wheel'' repeated 
reviews of the same claim, which occurs when a veteran is forced to 
appeal a hastily made erroneous decision. By encouraging VA 
adjudicators to make quality decisions (as opposed to meeting a quota 
of decisions per day), they will take the time to review the veteran's 
entire claims folder and apply relevant VA law, regulations and case 
law.
IV. Require the VA to Maintain Statistics on the Regional Office Denial 
        Rate
    Without statistics on the VARO's denial rate it is impossible to 
determine how many veterans and other claimants abandon their claims 
rather than proceeding with an appeal. Denial rates broken down by type 
of claim would also provide an insight into the examiner's and rater's 
experiences in dealing with different claims.
V. Enact Legislation to Enhance the VCAA
    Currently, the VA has interpreted the VCAA in such a manner as to 
deprive veterans and other claimants of meaningful and helpful claims 
specific information. Instead, the VA provides generic information 
which is not helpful because it fails to inform the veteran of what 
evidence is necessary to prove entitlement to benefits. The result is 
that is not until many years later, following multiple decisions and 
multiple remands, does the veteran finally understand the VA's 
perception of the shortcomings in the evidentiary development of the 
claim. The propensity of the VA to withhold claims specific information 
contributes to ``hamster wheel'' litigation and to the VA's increased 
caseload.

                                 
   Prepared Statement of Ronald B. Abrams, Joint Executive Director,
                National Veterans Legal Services Program
Mr. Chairman and Members of the Committee:
    I am pleased to have the opportunity to submit this testimony on 
behalf of the National Veterans Legal Services Program (NVLSP). NVLSP 
is a nonprofit veterans service organization founded in 1980 that has 
been assisting veterans and their advocates for 27 years. We publish 
numerous advocacy materials, recruit and train volunteer attorneys, 
train service officers from such veterans service organizations as The 
American Legion and Military Order of the Purple Heart in veterans 
benefits law, and conduct quality reviews of the VA regional offices on 
behalf of The American Legion. NVLSP also represents veterans and their 
families on claims for veterans benefits before VA, the U.S. Court of 
Appeals for Veterans Claims (CAVC), and other federal courts. Since its 
founding, NVLSP has represented over 1,000 claimants before the Board 
of Veterans' Appeals and the Court of Appeals for Veterans Claims 
(CAVC). NVLSP is one of the four veterans service organizations that 
comprise the Veterans Consortium Pro Bono Program, which recruits and 
trains volunteer lawyers to represent veterans who have appealed a 
Board of Veterans' Appeals decision to the CAVC without a 
representative. In addition to its activities with the Pro Bono 
Program, NVLSP has trained thousands of veterans service officers and 
lawyers in veterans benefits law, and has written educational 
publications that thousands of veterans advocates regularly use as 
practice tools to assist them in their representation of VA claimants.
    According to the VA Monday Morning Workload reports, in early 
January 2006 there were 532,228 total claims pending adjudication at 
the VA regional offices (VAROs). In early January 2007 there were 
603,104 total claims pending adjudication at the VA regional offices 
(ROs). In early January 2008 there were 647,478 total claims pending 
adjudication at the VA regional offices (ROs). These VA statistics 
reveal that there are now 115,250 more claims pending adjudication at 
the ROs in 2008 than there were in 2006. This is an increase of over 21 
percent in just two years. If this trend continues the VA ROs will have 
over 947,000 backlogged claims in just four years. NVLSP believes that 
the current size of the backlog is obviously unacceptable and allowing 
that unacceptable number to grow by 200,000 cases in just four years 
would be insulting to veterans.
Why Is There Such a Large Backlog?
    In the opinion of NVLSP, the major cause of the VA claims 
adjudication backlog is a VA work credit system that prevents the fair 
adjudication of many claims for VA benefits generating extra work for 
the VA and major problem for claimants. Also, the inadequate quality of 
many VA adjudications and the inadequate number of trained adjudicators 
contribute to the size of the backlog.
I. The Unfair VA Work Measurement System
    The current VA work credit system prevents the fair adjudication of 
many claims for VA benefits. The current VA work credit system needs to 
be overhauled because it rewards VA managers and adjudicators who claim 
multiple and quick work credit without complying with the statutory 
duties to assist claimants obtain evidence that would substantiate 
their claims and notify claimants of what evidence would substantiate 
their claims.
    No matter how much the average VA employee wants to help the client 
population, the VA decision-making culture, fueled by the VA work 
measurement system, penalizes many VA adjudicators for doing a good 
job. The VA has created a work measurement system for deciding 
critically important claims that is driven by weighty incentives to 
decide claims quickly. How the VA measures its work and evaluates the 
performance of its employees has had a major impact on the adjudication 
of claims for veterans benefits.
    Each year, after a complicated process involving the executive 
branch and Congress, the VA is given its budget. The budget can be 
defined as the resources available to the Secretary of Veterans Affairs 
to be used to accomplish the mission of the VA. Managers at different 
levels within the VA are then given their allocation from the overall 
VA budget. This allocation is determined by the workload and 
performance of the various VA components. For example, the money 
budgeted to a particular VARO determines how many workers can be hired 
or fired, how equipment is maintained, and what new equipment can be 
purchased.
    Claims received in VARO are described as ``pending issues.'' These 
claims are assigned an ``end product code,'' alternatively described by 
the VA as a unit of work. When final action is taken on a pending 
claim, or pending issue, the regional office (and eventually the VA) 
receives a credit.
    End products are assigned values based on the average number of 
work hours it takes an employee or group of employees to complete all 
action necessary for that type of claim. Each end product code has a 
different value. For example, VA managers receive more credit for work 
completed on an original claim than they do for adjusting the income of 
a current pension beneficiary. No matter how much work the VARO does on 
an individual claim, however, it receives as credit only the value that 
is provided for the end product code assigned to that particular type 
of pending claim. Therefore, VA managers receive the same credit 
whether or not the claim is granted or denied or whether the particular 
claim takes the VARO one day or two years to decide.
    VA manuals describe the end product system as a ``management tool'' 
and indicate that its measure should not be used to evaluate individual 
performance. As is the case with many management information systems, 
however, the measurement system tends to drive what and whom it 
measures, rather than the converse. VA managers are evaluated by how 
many end products they produce, how quickly they can take credit for 
end products, how many employees they need to produce these end 
products, and lastly, the quality of the work in the office they 
manage. Because it is in the best interest of the VA managers to 
complete as many cases as quickly as they can, the interests of VA 
managers in many cases stands in opposition to the interests of 
claimants for VA benefits.
    Responsibilities of VA managers that protect the fairness of the 
adjudicatory process--such as ``control'' of claims, supervisory review 
of unnecessarily delayed claims, thorough development of the evidence 
needed to decide a claim properly, recognition of all of the issues 
involved, provision of adequate notice, documentation that notice was 
given, and careful quality review--all adversely affect the 
productivity and timeliness statistics (that is, how many decisions on 
claims are made final within a particular period of time) for the VA 
manager. Consequently, proper attention by VA managers to their legal 
obligations very often adversely affects the statistics upon which 
their performance is rated.
II. The Impact of Judicial Review
    The VA claims processing (or claims adjudication) system has been 
exposed by judicial review. To say there is a crisis in VA claims 
adjudication is an understatement. Statistics from the Board of 
Veterans' Appeals (BVA) and the U.S. Court of Appeals for Veterans 
Claims (CAVC) show that nationally, for FY 2007, over 56 percent of all 
appeals decided by the BVA were reversed or remanded and over 63 
percent of CAVC decisions on the merits were reversed, or remanded. 
Some VAROs are worse than others. Over 60 percent of the appeals from 
the New York RO and over 62 percent of the appeals from the St. 
Petersburg, Florida RO were reversed or remanded by the BVA.
    Based on the experience of NVLSP (over 10 years of quality reviews, 
in conjunction with The American Legion, of approximately 40 different 
VAROs combined with extensive NVLSP representation before the CAVC), 
most of the most egregious VA errors are a result of premature 
adjudications. For example, many errors identified by the Legion/NVLSP 
quality review teams reveal that VA adjudicators failed to even try to 
satisfy its statutory duty to assist the claimant by obtaining the 
evidence needed to substantiate the claim, and incorrectly accepted and 
prematurely denied claims based on inadequate evidence (especially 
inadequate VA medical examinations).
    I want to emphasize that most premature VA adjudications are caused 
by ROs seeking work credit. If the claimant should appeal, the RO can 
earn another work credit for work to process the appeal. The VA manager 
gets to claim unearned work credits and to show an erroneously low time 
period to adjudicate these claims. That would help the manager earn a 
promotion and a bonus for such ``productive'' work.
    I have been told by a variety of VARO officials that because of 
pressure to produce end products and reduce backlogs, they 
intentionally encourage the premature adjudication of claims. This 
statement is based on my experience as a VA employee, and based on my 
experience as a member of the Legion/NVLSP quality review team.
    Fixing the VA work credit system is a topic that is near and dear 
to my heart. I have been involved in various aspects of veterans law 
for over 30 years. My experience tells me that unless the system is 
corrected most attempts to improve VA claims adjudication will not be 
successful because the driving force in VA adjudication will continue 
to be claiming quick work credit.
III. The Inadequate Quality of VA Adjudications Is A Major Influence on 
        the Size of the Backlog
    It is clear that the quality of VA adjudications is not 
satisfactory and is a major contributor to the size of the backlog. 
Because many claims are improperly denied, because many VA adjudicators 
are inadequately trained, because many VA regional offices are 
improperly managed, because many VA regional offices are inadequately 
staffed, and because VA Central Office management has not acted to fix 
these problems in any meaningful way, many veterans and other claimants 
for VA benefits have to file unnecessary appeals, wait several years 
for a BVA remand, and wait for the VA to obtain evidence that should 
have been requested during the original adjudication of the claim. 
These appeals clog the system and create unneeded work for the VA. Of 
course, it would have been better for the VARO to do the work correctly 
the first time.
    NVLSP believes that the quality of VARO adjudications is much worse 
than what is reported by the VA. A relatively independent review of the 
quality of adjudications performed by the VAROs are the remand and 
reversal statistics produced by decisions issued by the Board of 
Veterans' Appeals (BVA or Board). BVA statistics provided by the 
Veterans Appeals Control and Locator System (VACOLS) for FY 07 reveal 
that Board decided over 40,000 appeals. The Board granted additional 
benefits in 21.12 percent of the appeals and remanded 35.36 percent of 
these appeals back to the VAROs. Therefore, 56.48 percent of the VARO 
decisions that were appealed and decided by the BVA were either 
reversed or remanded. This 56.48 percent statistic could be considered 
an error rate. Even if we were to assume that the VARO did not err in 
20 percent of these cases because the Board granted additional benefits 
or remanded due to new evidence added at the Board level, an error rate 
as high as 36 percent (56.48 minus 20) is not acceptable and is flatly 
inconsistent with the low error rate produced by the VA Star Reports 
(which claims that the VAROs maintain close to a 90 percent ``accuracy 
rate'').
    The news gets worse. The BVA, in its rush to make final decisions 
and to avoid remands quite often prematurely denies claims that should 
have been remanded. Of course, the error was originally committed by 
the VARO, not the BVA. In September 2007, my fellow Joint Executive 
Director, Bart Stichman, testified that ``[f]or more than a decade, the 
Court's [Court of Appeals for Veterans Claims (Court or CAVC)] annual 
report card of the BVA's performance has been remarkably consistent. 
The 12 annual report cards issued over the last 12 years yields the 
following startling fact: of the 16,550 Board decisions that the Court 
individually assessed over that period (that is, from FY 1995 to FY 
2006), the Court set aside a whopping 77.7% of them (that is, 12,866 
individual Board decisions). In each of these 12,866 cases, the Court 
set aside the Board decision and either remanded the claim to the Board 
for further proceedings or ordered the Board to award the benefits it 
had previously denied. In the overwhelming majority of these 12,866 
cases, the Court took this action because it concluded that the Board 
decision contained one or more specific legal errors that prejudiced 
the rights of the VA claimant to a proper decision. By any reasonable 
measure, the Court's annual report card on the Board's performance has 
consistently been an ``F.''
    How should a veteran seeking VA disability benefits feel? The Board 
of Veterans' Appeals reverses or remands over 50 percent of all VARO 
adjudications and the CAVC sets aside over 77 percent of the Board 
decisions that deny benefits. These numbers do not inspire confidence 
in the quality of VA adjudications.
    Overall, the results of the Legion/NVLSP quality reviews have been 
discomforting. The American Legion/NVLSP team usually spends a week in 
a VARO reviewing the quality of recently adjudicated claims where The 
American Legion represented the veteran. The results of these quality 
reviews reveal that in many instances claims are improperly denied or 
benefits are not paid at the proper rate because the RO was more 
concerned about claiming work credit and reducing the VARO backlog than 
taking the time to develop and analyze the claim properly.
    For example, many of the VAROs had problems with claims for service 
connection for mental conditions (especially Post Traumatic Stress 
Disorder) and problems evaluating the severity of mental disabilities. 
In too many instances, claims for total disability based on individual 
unemployability were improperly denied and in more than a few instances 
we determined that claims for increase in evaluation to 60% or 70% were 
hard to obtain because such a rating could require the VARO to consider 
entitlement to a total disability rating due to individual 
unemployability (TDIU) and the VARO adjudicator did not want to have to 
take the time to deal with a claim for TDIU. Also, we have discovered 
that too many VA examinations are inadequate because the VARO did not 
explain what facts the VA physician should accept as true in making his 
or her medical opinion. The team generally reviews between 25 to 40 
cases and finds errors in about 20 to 30 percent of these cases. This 
is a much higher rate than the ``accuracy rate'' reported by VA on its 
Star Report.
Potential Solutions
    The VA needs to acknowledge the complexity of its claims 
adjudication system and hire a reasonable number of adjudicators to 
work these claims. The grade levels of VA raters and Decision Review 
Officers should be raised and these federal employees should be held 
accountable for the quality of their work product. The Congress needs 
to provide the funding for the additional adjudicators, and the VA 
would have to be willing to submit to an independent quality review to 
validate the quality of the work. The additional adjudicators should 
help the VAROs from brokering cases (sending cases from one VARO with 
too much work to another VARO). In the opinion of NVLSP, brokered cases 
are less accurately adjudicated than most cases and cause continuing 
problems for the originating VARO.
    The VA work measurement system has to be overhauled. HR 3047 which, 
in section 2 would change when VA regional offices (VAROs) can claim 
work credit, is a good bill that would accomplish this goal.
    Finally, the adjudication culture at the VAROs needs to be changed. 
Many VA managers act like they are producing widgets rather than 
adjudicating claims filed

by real people. Their goal should not be just prompt adjudication; the 
goal should be a timely, accurate and fair adjudication.
    Thank you for permitting NVLSP to testify on such an important 
issue.

                                 
Prepared Statement of J. David Cox, R.N., National Secretary-Treasurer,
          American Federation of Government Employees, AFL-CIO
Dear Chairman and Members of the Subcommittee:
    The American Federation of Government Employees, AFL-CIO, which 
represents more than 600,000 federal employees who serve the American 
people across the Nation and around the world, including roughly 
160,000 employees in the Department of Veterans Affairs (VA), is 
honored to testify today regarding the Veterans Benefits Administration 
(VBA) claims processing system and the current claims backlog.
    The current backlog and waiting times for pending claims are 
unprecedented and unacceptable. Our veterans served our country when 
they were needed. It is imperative that we serve them when they are in 
need.
    AFGE is the sole employee representative of Veterans Service 
Representatives (VSRs), Rating Specialists (RVSRs), Decision Review 
Officers (DROs) and other VBA employees. A large number of these 
employees are veterans, and many are service connected themselves. (We 
hope that VBA will increase its hiring of preference eligibles to 
ensure that the valuable perspective of the veteran remains part of the 
claims process, but that is a subject for another hearing.) Therefore, 
AFGE is in a unique position to convey the sense of mounting pressure, 
frustration and demoralization at the frontlines in the face of this 
backlog.
    AFGE is also in a unique position to identify approaches to 
improving the quality and timeliness of the process. The input of the 
VBA workforce is essential to any claims reform process because the 
skills of a VBA claims processor are unique. Unlike skills such as 
medical care and information technology that are largely transferable 
from one workplace to another, VBA claims processing is learned 
entirely on the job. Consequently, the employees who have been 
developing and rating cases for much of their career are extremely 
valuable sources of guidance.
    Sadly, the VA does not recognize what these employees have to 
offer. In recent years, management has increasingly excluded AFGE from 
national level efforts to improve the claims process, VSR Certification 
testing and training. At the local level, our members report that they 
are regularly rebuffed by management when they attempt to make 
suggestions for process improvement. These days, management wants one 
thing, and only one thing from the VBA workforce: produce claims as 
fast as possible.
    Employee representatives and veterans' service organizations (VSO) 
are the eyes and ears on the ground, and we engage in a regular 
dialogue about different reform approaches. Both are key stakeholders 
who should be included in VBA policy setting groups.

    Recommendation: Congress should establish a Joint VSO-AFGE Advisory 
Committee to make recommendations on needed improvements to the claims 
process, and related issues of training, skills certification and 
production standards.
    The unrelenting pressure ``to make the numbers'' starts at the top 
with VA Central Office (VACO) where individual station goals are set. 
The RO Director's performance is measured by the total number of claims 
produced, not the quality of completed work or quality of the training 
provided to the employees who perform the work. As a result, new 
employees lose critical on-the-job training because supervisors who are 
trying to meet their own production goals assign cases to them before 
they are fully trained. Similarly, managers frequently cut short 
training for experienced employees who rely on continuing education to 
become familiar with the steady stream of new laws, court cases, and 
benefits programs that directly impact claims determinations. It is 
also common for rating specialists who have recently been promoted from 
VSR positions to have their critical on-the-job training interrupted so 
they can perform VSR duties. All these training gaps contribute to the 
backlog.
    Issuing new mandates without accountability leaves the VBA with 
just that: more mandates. VBA is not held accountable for the quality 
and consistency of training at each RO. VBA's national training program 
operates more as a guideline, rather than a requirement to follow a 
mandatory curriculum and training schedule. VBA now mandates training, 
and proudly points out that each RO is required to provide employees 
with 80 hours of training per year. However, VBA never explained how it 
determined that 80 hours, not more, not less, was adequate.

    Recommendation: The Joint VSO-AFGE Advisory Committee should 
oversee the VBA training process and make recommendations to Congress 
about ways to improve current training programs. Training and accuracy 
of claims determinations should be included in management performance 
measures.
    Persistent problems with the VSR Skills Certification test also 
adversely impact VBA's ability to reduce the claims backlog. Pursuant 
to an agreement between VBA and AFGE, qualified GS-10 VSRs who pass a 
skills certification test can receive a noncompetitive promotion to a 
GS-11. Contrary to assurances from VBA and the terms of our agreement, 
the training is not always sufficiently aligned with the scope of the 
exam, and trainers are often confused about which training materials 
are relevant to the test. In addition, extremely low passage rates 
(that also raise questions about the test's validity) are demoralizing 
to competent VSRs with years of experience. At the same time, 
management refuses to provide employees with useful feedback on the 
questions they missed.
    AFGE was not allowed to collaborate in the process of refining the 
test and working out test administration problems. We were also denied 
access to raw test data to help address low passage rates.

    Recommendation: Congress should require VBA to release to AFGE 
complete demographics on skill certification test results. VSRs should 
be provided with adequate feedback on their test scores to allow them 
to strengthen their understanding of all relevant concepts.
    Our members desperately want to reduce the backlog, and when a new 
proposal to accomplish that emerges, they feel a sense of renewed hope. 
Yet time and again, those proposals fall victim to the same forces: 
poor implementation, lack of accountability and inadequate training.
    AFGE initially worked with VBA on the development of the Claims 
Process Improvement Initiative (CPI) Model, and reached an agreement on 
the recommendations of the CPI Task Force. Even though VBA has since 
made a number of revisions to the CPI model, such as centralizing the 
Public Contact Unit, employee representatives were excluded from recent 
Task Force meetings. When CPI was implemented in 2002, it was supposed 
to provide a uniform national model for all ROs. Instead, six years 
later, we have ``57 varieties'', that is, 57 different ways of applying 
the CPI model to the claims process. The Program Director for the 
Compensation and Pension (C&P) Service is not being held accountable 
for consistent implementation of this model.
    Similarly, VBA welcomes each new set of Government Accountability 
Office (GAO) recommendations, but fails to implement them. Again, 
accountability is the key.

    Recommendation: AFGE supports the recommendation in the veterans' 
2008 Independent Budget (IB) to hold the Compensation and Disability 
Program Director more accountable for the performance of RO directors, 
including the quality and consistency of training provided to claims 
processors.
    VBA claims process reform adds new meaning to the familiar quote, 
``Those who don't know history are destined to repeat it.'' Before 
Congress embarks on a search for a new approach to improving this 
process, we urge you to consider the reasons why previous attempts to 
reform the claims process have failed.
    We see a renewed interest is using Artificial Intelligence (AI) to 
expedite the claims process. AI may have some utility in helping a 
veteran file a claim, but our members see much less utility in AI's 
ability to help a VSR or RVSR work a claim. Certainly in its current 
stage of development, AI is not advanced enough to replace the 
individual experience-based judgment of a VSR or Rating Specialist who 
is adept at ``reading between the lines'' of a claimant's record.
    VBA also mandates production standards, but we fear they are based 
more on politics and bonuses rather than the requirements of the many 
complex, multiple claims being filed by veterans at the current time. 
Again, mandates without accountability or scientific basis will not 
bring about meaningful claims process reform. One member explains 
flawed production standards as follows: ``Like an engine, when an 
employee is run too long at too high an RPM without fresh oil, it will 
inevitably begin to perform poorly and eventually quit.''
    Currently, VBA managers, many of whom have not adjudicated a claim 
for many years (or never), define performance solely in terms of 
inventory and days pending completion of a decision. In addition, 
employees and their representatives are never invited to participate on 
teams that develop employee performance standards.
    Production standards and staffing should be based on scientific 
methodology, not politics. VBA has never done a time-motion study of 
the claims process, to determine how many hours are required to process 
claims of different categories and complexity. This should be the first 
step in any reform process.
    AFGE is aware of only one extremely limited attempt to conduct a 
study along these lines but it failed to produce any useful findings. 
Management placed a software program on a sampling of employees' 
computers in an undetermined number of ROs, with no explanation of how 
they selected the sample. The data was collected by a program appearing 
on the screen every few hours to ask what the employee was doing. The 
program did not differentiate between employees working on a single 
claim and multiple claims. Again, with input from VSOs and employee 
representatives, the findings of a more meaningful study can be used to 
establish and regularly update production standards and set appropriate 
staffing.

    Recommendation: VBA should conduct a scientific time-motion study 
of the resources and skills required to do the current mix of 
increasingly complex claims.
    We also caution the Subcommittee about further centralization of 
VBA functions. VBA regularly touts centralization as synonymous with 
management efficiencies. In addition to extensive centralization of VBA 
functions outside of Compensation and Pensions (C&P), VBA has 
centralized its 57 Call Centers down to 9 centers in operation today, 
and is planning to centralize the Fiduciary Program. Yet, VBA has never 
been held accountable for proving that centralization improved its 
operations. Centralization puts a greater distance between the veteran 
and the claims process. The taxpayer and the veteran deserve a careful 
assessment of the costs and benefits of centralization before we 
centralize more functions or continue centralized operations already in 
place.

    Recommendation: The impact of centralization on VBA functions 
should be assessed and compared with alternative, more decentralized 
approaches to delivering services.
    Our members have identified a number of specific fixes for 
expediting and improving the claims adjudication process. However, AFGE 
continues to have great difficulty in obtaining information from 
management, and as noted, is increasingly left out of key policy 
setting groups. Therefore, this list is somewhat limited.
Vetsnet: Problems Remain
    Although VBA started to phase in the Vetsnet program to replace the 
Benefits Delivery Network (BDN) nearly 20 years ago, significant 
glitches remain. For example, there remains a redundancy in the process 
of inputting information, more specifically, employees have to have 
multiple applications open at the same time and enter duplicative 
information because these programs do not ``talk to one another.'' It 
would be more efficient if the system automatically made the updates 
when employees enter new veteran information. VBA made a commitment to 
address this defect but has not done so to date.

    Recommendation: AFGE supports the recommendation of the 2008 
veterans' Independent Budget to complete the phase-in of Vetsnet. VBA 
should be required to consult with the Joint VSO-AFGE Advisory 
Committee on a regular basis to identify future problems that emerge as 
the transition from BDN to Vetsnet proceeds. VBA should develop an 
online ``suggestion box'' to which employees can submit reports of 
problems associated with Vetsnet.
``Benefits Delivery and Discharge'' Authority
    VBA already has the authority under current regulations to award 
benefits for one year payable immediately upon discharge from active 
duty. Known as Benefits Delivery at Discharge (BDD), this allows VBA to 
give seriously injured new veterans immediate compensation during their 
recovery through a 50% or 100% rating. Their claims are reevaluated a 
year later to see if their conditions have worsened or improved.

    Recommendation: VBA should expand the use of Benefits Delivery and 
Discharge authority to expedite processing of appropriate claims.
    Paperless Records: AFGE also supports the recommendation of the 
2008 Independent Budget to further develop and enhance a paperless 
records system. VBA employees already have limited access to electronic 
medical records from VA medical centers, which enables them to conduct 
an effective online search for needed medical evidence. However, 
military records are still only available in hard copy. As VBA moves 
toward an electronic records system, we urge them to take steps to 
ensure that these files are readable and that the system has a strong 
online search capability so evidence can be efficiently located.
    Recommendation: The Subcommittee should move toward a fully 
paperless records system, and should examine similar efforts already in 
place for VBA education claims for lessons learned.
Assembly lines and widgets: the wrong approach to veterans' disability 
        claims
    In the words of another member, CPI takes an assembly line approach 
to claim processing, i.e. CPI divides up the tasks, so that one 
employee installs the headlights, another the tires. Whereas in the 
past, employees did everything from taking the claim to issuing the 
final decision, now, once the employee ``installs the headlights'', he 
or she has no knowledge of or investment in the outcome of the claim. 
When a case is remanded from the Board of Veterans Appeals or the 
courts, a new employee has to learn the claim all over again. The same 
employee should handle a claim at all stages.
    Another practice from the past that should be revived are regular 
(usually weekly) meetings among claims adjudication staff to review new 
cases, changes in the law and share best practices, This practice seems 
to have disappeared along with the case management approach that CPI 
replaced.

    Recommendation: VBA and the Joint VSO-AFGE Advisory Committee 
should reexamine the case management model to determine whether some of 
its features should be brought back to the claims process, including 
regular case meetings in each RO and having the same employee handle 
cases from application to appeal.
    We look forward to working with Chairman Hall and members of the 
Subcommittee to identifying approaches to improving the VBA claims 
process and ensuring that VBA considers regular input from employees, 
their representatives, and the veterans' community. Thank you.

                                 
       Prepared Statement of Gordon P. Erspamer, Senior Counsel,
                Morrison and Foerster, Walnut Creek, CA
. . . Law has reached its finest moments when it has freed man from the 
unlimited discretion of some ruler, some civil or military official, 
some bureaucrat. Where discretion is absolute, man has always suffered. 
At times it has been his property that has been invaded; at times, his 
privacy; at times, his liberty of movement; at times, his freedom of 
thought; at times, his life. Absolute discretion is a ruthless master. 
It is more destructive of freedom than any of man's other inventions.

    Justice William O. Douglas in United States v. Wunderlich, 342 U.S. 
98, 101 (1951).

A. Personal Background:
     1.  I have been representing individual veterans on service-
connected disability and death and disability compensation claims and 
appeals for over 25 years, all on a pro bono basis. I also acted as 
counsel for my mother and late father in the first case ever argued in 
the newly created Court of Veterans Appeals, since renamed the Court of 
Appeals for Veterans Claims (``CAVC''). See Erspamer v. Derwinski, 1 
Vet. App. 3 (1990). In addition, I have represented veterans' 
organizations and veterans in two major constitutional actions against 
the DVA (``VA''), each of which Morrison & Foerster has also handled 
pro bono, including the following:

        a.  National Association of Radiation Survivors, et al. v. 
Walters, Administrator of Veterans Affairs, et al., 589 F. Supp. 1302 
(N.D. Cal. 1984); 473 U.S. 305 (1985); 111 F.R.D. 595 (N.D. Cal. 1986); 
111 F.R.D. 543 (N.D. Cal. 1987); 782 F. Supp. 1392 (N.D. Cal. 1992); 
994 F.2d 583 (1992); and
        b.  Veterans for Common Sense, et al. v. James B. Peake, M.D., 
Secretary of the Department of Veterans Affairs, et al., USDC-N. Cal. 
Case No. 07-3758-SC (filed July 23, 2007). See 
www.veteransptsdclassaction.org (reproducing copies of complaint and 
other major pleadings and decisions).

B. Major Regional Office Problems:

      1.  The Hollowness of the VA's Motto: ``For Him That Hath Borne 
the Battle . . .'' The VA's motto is not only inscribed outside its 
headquarters here in Washington, D.C., but it also is widely publicized 
elsewhere. The inconsistency between the VA's motto and the positions 
or actions it adopts in court in cases brought by veterans is steeped 
in irony. Instead of seeking to extol the contributions made by 
veterans and recognize veterans' rights, in my experience the opposite 
has been true. For example, the VA argues that disabled veterans do not 
possess an enforceable ``entitlement'' to any medical care, that all 
veterans' benefits are ``mere gratuities,'' that the Secretary has 
total discretion whether or not to provide medical care, that veterans 
lack a 5th amendment property interest in the receipt of disability or 
death compensation, or that the VA is insulated from court challenges 
by sovereign immunity, the outdated doctrine that ``The King Can Do No 
Wrong.'' Given its stated mission, it is telling that the VA actually 
labors to urge courts to minimize or restrict the scope of veterans' 
rights.

      2.  Perpetuation of Myths: A series of characterizations about 
the adjudication process have received wide circulation for many years. 
For example, Congress has frequently been told that the VA process is 
``non-adversarial,'' that lawyers are unnecessary, and that the VA's 
procedures are ``informal.'' In my opinion, these characterizations 
have always been myths, but they are even more mythical in today's 
world. The Federal Circuit itself has recognized that the claims 
process has become adversarial. See Bailey v. West, 160 F.3d 1360, 1365 
(Fed. Cir. 1998) (``[S]ince the [VJRA] . . . it appears that the system 
has changed from a nonadversarial, ex parte, paternalistic system for 
adjudicating claims, to ones in which veterans . . . must satisfy 
formal legal requirements, often without the benefits of legal counsel, 
before they are entitled to administrative and judicial review.'') As 
to informality, all too often it has been an opportunity for the VA to 
take shortcuts without the veteran's knowledge or to ``streamline,'' 
and by that I mean ignore, the procedural rights of veterans.

      3.  Absence of Single Assignment of Claims: One fundamental 
regional office problem is that the VA does not assign a person or 
persons to handle a particular veteran's claim from ``cradle to 
grave.'' Instead, the Service Center Manager (formerly called 
``Adjudication Officer'') of each office is listed on correspondence, 
and the actual decision-makers remain anonymous. Thus, the veteran 
never has a specific name to contact, and no VA employee builds 
experience or expertise on a claim. There also is no accountability and 
no incentive for the employees to develop and decide the case 
correctly.

      4.  Antiquated Hard Copy System: Congress should order the VA to 
scrap its antiquated hard copy claim file system and replace it with an 
up-to-date database where claim file information can be shared by users 
at both the VHA and VBA. The hard copy system leads to delays, lost or 
misplaced files and enables misconduct to occur without any remedy or 
detection. And Congress should force the VA to give a veteran web 
access to his claim file.

      5.  Time/Delay, Abandonment of Claims: Delay has become an 
endemic feature of the VA adjudication system for decades, raising the 
venerated principle of jurisprudence that ``Justice delayed is justice 
denied,'' as reflected in the following table, prepared in July 2007:


----------------------------------------------------------------------------------------------------------------
                    Stage                                 Time                             Source
----------------------------------------------------------------------------------------------------------------
1) Initial Decision                                            196 days*     (Department of Veterans Affairs FY
                                                                            2006 Performance and Accountability
                                                                                          Report (2006) at 213)
----------------------------------------------------------------------------------------------------------------
2) BVA Appeal                                                   971 days            BVA Chairman's Report at 16
----------------------------------------------------------------------------------------------------------------
3) CAVC Appeal                                       1286 days: 120 days    38 U.S.C. Sec.  7266; Ct. Vet. App.
                                                (notice of appeal) + 254       R. 4(c), 10(a), 10(b), 11(a)(2),
                                               days (docketing, briefing)         31(a)(1), 31(a)(2), 31(a)(3);
                                                    + 912 days (judicial       Testimony of Robert Chisholm \1\
                                                          consideration)
----------------------------------------------------------------------------------------------------------------
4) Federal Circuit                                              317 days       Review of Federal Circuit docket
                                                                           sheets re veterans' appeals from CAVC
                                                                                                            \2\
----------------------------------------------------------------------------------------------------------------
5) U.S. Supreme Court                                           386 days   Review of Supreme Court docket sheets
                                                                                              for 2005 term \3\
----------------------------------------------------------------------------------------------------------------
    TOTAL:                                       3,156 days (8.65 years)
----------------------------------------------------------------------------------------------------------------
*Accuracy is questionable.
\1\ Past-President of National Organization of Veterans Advocates (Robert V. Chisholm, Statement Before the
  House Subcommittee on Disability Assistance and Memorial Affairs of the House Committee on Veterans' Affairs
  (May 22, 2007)).
\2\ Derived from hand review of all veteran appeals in Federal Circuit from October 1, 2005 to September 30,
  2006 that resulted in decisions on the merits.
\3\ Derived from hand review of all signed Supreme Court decisions issued in the 2005 Term.


            The number of claims pending at regional offices in recent 
years has accelerated rapidly, and the huge backlog is now reaching 
crisis proportions, as shown on the graph attached as Exhibit A. 
Shockingly, there is no deadline for the VA to act on claims or to 
prepare documents needed for an appeal such as a ``Statement of the 
Case''; ironically, the only deadlines apply to the veteran, who is 
often unrepresented. As a result, veterans frequently trip up at the 
regional office level, resulting in a summary denial of a claim or 
appeal as reflected in the high percentage of appeals to the BVA and 
CAVC that are summarily denied on jurisdictional defect grounds, 
including failure to comply with time deadlines or legal doctrines such 
as waiver and subsumption. The VA benefits from delays because some of 
the veterans die while their claim is pending, and survivors often do 
not pursue the claim further, and the VA does not award interest on any 
retroactive award, which is calculated at the historical rates, not 
current rates that reflect inflation.
            The claim abandonment rate at the regional office level is 
also very high, perhaps as high as 99%. Thus, the appeal system is 
irrelevant for the vast majority of veterans because their claims never 
get that far. In my opinion, many of the abandoned claims likely have 
at least some merit, and many veterans give up out of frustration. The 
VA's timeliness measures are unreliable because it often manipulates 
the numbers, e.g., by calculating from the wrong date or by 
artificially truncating a regional office decision into a number of 
parts to make the delay numbers look more palatable. For example, the 
timeliness of medical care is calculated as the time between a request 
for an appointment and the date the appointment date is given, not the 
date the appointment occurs, which may stretch months in the future. 
Congress needs to set minimum times for complete action at the regional 
office level in the absence of which a claim would be provisionally 
granted. And it also needs to take a hard look at the BVA and the CAVC, 
which are experiencing unprecedented delays that only will get worse 
with time. See Exh. B.

      6.  Excessive Remands--The Recycling or ``Hamster Wheel'' 
Problem: If the VA makes a mistake at the regional office level, 
however egregious, no consequences attach to it. Instead, the claim is 
``remanded'' and the innocent party--the veteran--has to wait several 
years for the BVA or CAVC to order the VA to correct the mistake and 
start all over at the regional office. Thus, it is the veteran that 
suffers. The error rates reflected in the disposition of the appeals of 
VA regional offices are startlingly high, as reflected on the chart 
attached as Exhibit B.

      7.  Incentive Compensation System: The design of the VA's 
incentive compensation system is to give adjudicators a financial 
incentive to ``game'' the system at the veteran's expense. For example, 
shredding a medical examination report or another key piece of evidence 
can make a denial or remand decision easy to write. The incentive 
compensation system operates under a ``piece work'' basis, making it 
more important to find ways to accomplish a task quickly rather than 
correctly. Two BVA attorneys were indicted several years ago for doing 
exactly this in hundreds or potentially thousands of cases, and both 
plead guilty (Jill Rygwalski and Lawrence Gottfried). The VA must do 
more to detect and correct internal abuses that have plagued the agency 
for many years. I would recommend that incentive compensation for 
adjudicators and caregivers be primarily based on the results of 
veteran satisfaction surveys.

      8.  Need for Veterans Civil Rights Legislation--a ``Veterans Bill 
of Rights:'' The veteran is procedurally handicapped at the regional 
office level by statutory or regulatory restrictions on his or her 
civil and procedural rights. Unlike all other citizens, the veteran 
cannot retain a lawyer at his own expense, leaving him or her 
vulnerable to sharp practices, procedural missteps or abandonment. The 
veteran cannot subpoena any VA employees to testify (e.g., the VA's own 
doctor who concluded he was disabled or the anonymous medical person on 
the adjudication side who says he is not), and the veteran cannot 
subpoena documents or other witnesses to testify at a hearing (in most 
cases). Our veterans deserve more than a watered-down version of mass 
justice. The regional office stage is crucial because that is where the 
record is developed and upon which the appeal depends. I also believe 
that it was a serious error for Congress to set up an Article I court 
to hear veterans appeals, the limited powers of which play a key role 
in circumscribing veterans' civil rights. It is time for Congress to 
restore the civil rights of veterans by passing a veterans' Bill of 
Rights. See Exh. C.

      9.  Remedies for Denial of Healthcare: One of the greatest 
weaknesses in the veterans' benefits system at the regional level is 
that no meaningful or timely remedies exist for a veteran who is denied 
health care--no form, no established procedure. Instead, the veteran's 
complaint is handled under an informal VHA ``directive'' that does not 
have the force of law. Thus, everything is left to fiat, and the 
veterans has no enforceable rights and no timely recourse. The delays 
inherent in the informal procedure also make it ineffective. This is 
contributing to the suicide epidemic amongst returning OIF/OEF 
veterans, amongst other frustrations that veterans experience.

     10.  Inability of Veterans Court to Enforce its Decisions at the 
Regional Office Level/Need for Expansion of Powers of Veterans Court: 
One of the most serious defects in the VA system is the CAVC's 
inability to force regional offices to obey the rule of law. As former 
Chief Judge Frank Nebeker of the CAVC pointed out in his ``State of the 
Court'' speeches, the CAVC's inability to force the regional offices to 
follow its decisions means that the regional offices can violate the 
CAVC's decisions with impunity. The CAVC also needs to be given the 
power to issue injunctions against the VA and to order relief under the 
Declaratory Judgments Act. In addition, the Court should be ordered to 
adopt a class action procedure whereby relief can be extended beyond 
the individual veteran to encompass similarly situated veterans. 
Finally, the lack of discovery at any stage of the adjudication process 
has to be addressed, as it hampers veterans' ability to develop facts 
to support a claim and/or to challenge adverse evidence, and prevents 
the veteran from discovering misconduct.

     11.  The Unofficial Regulation Problem: For many years the VA has 
adopted rules by way of ``fast letters,'' directives or other 
unofficial means on important issues that in effect may dictate the 
result in an individual case or entire category of cases. Put 
differently, these unofficial rules prescribe substantive standards 
which properly should have been the subject of rulemaking, and an 
opportunity for judicial review. This practice completely circumvents 
the judicial review process set up by Congress. Most recently, the VA 
has set up a special review procedure at the Central Office for 
``extraordinary awards'' made by regional offices that involves extra 
layers of review and delay and which discourages adjudicators from 
making retroactive awards. History is rife with similar examples, such 
as the ``second signature'' requirement for PTSD grants (but not 
denials), the directive not to infer claims based upon individual 
unemployability, the ``courtesy sign-off'' system which defeated the 
whole purpose of having a three-member decision-making team, and a host 
of others.

     12.  Absence of Guaranteed VA Budget and Chronic Underfunding: The 
VA has been chronically underfunded for years. Pentagon Undersecretary 
for Personnel and Readiness David Chu's interview in the Wall Street 
Journal on Jan. 25, 2005 is very revealing as to what has been driving 
the VA budget constriction--a desire to spend more money on armaments 
and less money on personnel. The VA's chronic underfunding creates a 
compulsion to ration healthcare and disability payments, and 
contributes to lengthy delays as well as to the hiring of marginally 
qualified workers or medical professionals.

     13.  Upgrade Quality of Personnel and Leadership: The VA needs to 
upgrade the quality of its hiring. My understanding is that many VA 
rating specialists have only a high school education and lack any 
medical training--meaning that unqualified persons are deciding the 
fates of our veterans. This may help explain the high error rate and 
the great frustration felt by our veterans. At the same time, reports 
have continued to surface about the VA's use of unlicensed or 
unqualified medical personal to treat veterans. The VA's management 
problems are immense and so deeply entrenched that they warrant the 
hiring of a capable crisis management or turnaround Executive to either 
head the agency or recommend how to address the huge problems that it 
faces. Sinecures or political appointments do no one any good.

C. Conclusion
    One litmus test for the VA's performance that is within the 
experience of each of you is the frequency with which you receive 
complaints from your constituents. If the number of phone calls and e-
mails I receive from veterans is any indication, the dissatisfaction 
levels are very high. I leave you with one final quote from Marlow v. 
West, and ask you to consider whether this is the type of experience 
you want to subject our veterans to:

          Although the dispositive law is all too clear, we are 
        constrained to comment on Mrs. Marlow's 12 year effort to get 
        her veteran father's full benefits before he died. The record 
        is replete with examples of VA's disingenuous refusal to 
        acknowledge the specific nature of the claim for benefits under 
        section 1114(o) and to deny what is manifestly obvious in the 
        record and was clearly articulated in Mrs. Marlow's 
        communications to VA. See, e.g., R. at 38-42, 182-202. VA 
        ultimately corrected Mr. Mokal's ratings from the time of his 
        discharge, but only after it was too late, as a matter of law, 
        to pay him. R. at 336-38. This is a case that gives credence to 
        those who don't believe that VA is committed to the spirit 
        expressed in the words of General Omar Bradley, the 
        Administrator of Veterans Affairs from 1945 to 1947: ``We are 
        dealing with veterans, not procedures; with their problems, not 
        ours.''

    Marlow v. West, Decision No. 98-113 (CAVC 1999).
                               Exhibit A

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               Exhibit B

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                               Exhibit C

                      THE VETERANS BILL OF RIGHTS
    Preamble: It is the intent of Congress to honor the service and 
personal sacrifices of veterans and their families by ensuring that 
they have fair and timely access to all the benefits to which they are 
entitled, including death and disability compensation, medical care, 
educational assistance, job training, housing and pensions (``VA 
Benefits''). To this end,

    1.  Congress recognizes that all veterans have and have always had 
a Fifth amendment property interest in the receipt of all VA Benefits.
    2.  Veterans shall have an unfettered access to retain attorneys at 
their own expense, and the Fee Prohibition in 38 U.S.C. Sec. 5904(c)(l) 
shall be abolished.
    3.  Veterans should have full rights to judicial review in Article 
III courts, and the Court of Appeals for Veterans Claims should be 
abolished, with a transition plan for implementation.
    4.  Veterans shall have the right to subpoena documents or records 
from all federal agencies, and all federal agencies shall treat 
veterans' document or record requests expeditiously and shall produce 
all responsive documents within 60 days.
    5.  Veterans shall have the right to call any VA employees as 
witnesses at any regional office hearings related to veterans' 
benefits, including treating physicians or other medical personnel and 
anyone else who has made any determination in connection with a claim.
    6.  Congress shall take all necessary measures to insure that the 
VA delivers on its commitments to provide healthcare to veterans, and 
the VA's practice of denying care to veterans it classifies as having a 
low priority is disapproved.
    7.  The VA shall adopt remedies and procedures to timely address 
cases of alleged denial of or unreasonable delays in providing 
healthcare, including notice, an opportunity to call witnesses, and a 
hearing to any veteran contesting such denial, as well as an expedited 
procedure in cases of emergency.
    8.  The VA shall award interest at the federal rate on all 
retroactive awards of any form of death or disability compensation or 
pension.
    9.  Congress shall guarantee and appropriate all funds necessary to 
provide all veterans benefits in accordance with the VA's budgets.

                                 
                 Prepared Statement of Adrian Atizado,
  Assistant National Legislative Director, Disabled American Veterans
Mr. Chairman and Members of the Subcommittee:
    I am pleased to have this opportunity to appear before you on 
behalf of the Disabled American Veterans (DAV), to address the 
Department of Veterans Affairs' (VA) disability claims backlog and 
claims processing system.
    To improve administration of VA's benefits programs, the DAV 
recommends Congress provide the Veterans Benefits Administration (VBA) 
with enough staffing to support a long-term strategy for improvement in 
claims processing and reduction of the claims backlog. Through 
recommendations contained in VA's budget submission and the Independent 
Budget for fiscal year (FY) 2009, to include recent appropriations, the 
VA may soon have the appropriate staffing, if utilized in conjunction 
with the recommendations herein, to finally begin to gain control of 
the growing claims backlog. Therefore, this testimony primarily focuses 
on policy initiatives to manage the increase in new claims and reduce 
the out-of-control claims backlog. In total, if Congress accepts our 
recommendations, the VA will be better positioned to serve all disabled 
veterans and their families.
Claims Backlog
    Mr. Chairman, the claims' backlog is unquestionably growing. Rather 
than making headway and overcoming the protracted delays in the 
disposition of its claims, VA continues to lose ground on its claims 
backlog. According to VA's weekly workload report, as of January 26, 
2008, there were 816,211 pending compensation and pension (C&P) claims, 
which include appeals. Putting this number into perspective, at the end 
of 2004, 2005, 2006, and 2007, the total number of pending claims was 
620,926; 680,432; 752,211; and 809,707 respectively. Therefore, in the 
three years from the end of 2004 to the end of 2007, the total number 
of pending C&P claims rose by 188,781 for an average of 62,929 
additional pending claims per year. The VA's pending claims rose by 
6,504 just from the end of 2007 to January 26, 2008--less than one 
month. At this rate, VA's caseload will pass one million claims in 
three years. With the wars in Iraq and Afghanistan still raging, 
together with the mass exodus from military service that usually occurs 
following cessation of combat operations, new and re-opened claims 
received by the VA are more likely to increase than decrease. A 
caseload topping one million claims will truly be a demoralizing moment 
for America--the time to act is now.
    New claims per year continue to increase from one year to the next. 
For example, VBA received 771,115 new rating claims in FY 2004 and 
838,141 new claims in FY 2007, equaling an average increase of 16,756 
additional claims per year. During this same period, the VA received a 
total of 155,164 new beneficiaries that had never before been on VA 
rolls through the Benefits Delivery at Discharge (BDD) claims process. 
At this rate, \1\ the average number of new BDD claims per year is 
38,791 for a total of 232,746 new claims through the BDD process by the 
end of FY 2009. These figures do not include service members filing 
claims through either the military's physical disability evaluation 
systems, or those discharging via end-of-service contracts who then 
come to the VA on their own to files claims after discharge.
---------------------------------------------------------------------------
    \1\ 39,885 claims in FY 2004; 37,832 in FY 2005; 40,074 in FY 2006; 
and 37,370 in FY 2007.
---------------------------------------------------------------------------
    The significance of these new beneficiaries is that large portions 
of VA's workload increase via new claims each year are re-opened claims 
rather than claims from veterans who have never filed for VA benefits. 
Therefore, the increase in brand new beneficiaries into the system will 
inevitably increase further the number of re-opened claims, ultimately 
causing the total number of claims received by the VA each year to 
continue growing, contrary to VA's FY 2008 budget estimate. VA's 2009 
budget submission reveals the VA added 277,000 beneficiaries to its C&P 
rolls in 2007, which further proves this point.
    The complexity of the workload has also continued to grow. Veterans 
are claiming greater numbers of disabilities and the nature of 
disabilities such as Post Traumatic Stress Disorder (PTSD), complex 
combat injuries, diabetes and related conditions, and environmental 
diseases are becoming increasingly more complex. For example, the 
number of cases with eight or more disabilities increased 135 percent 
from 21,814 in 2000 to 51,260 in 2006.\2\ Such complex cases will only 
further slow down VBA's claims process.
---------------------------------------------------------------------------
    \2\ Fiscal Year 2008 Budget Submission, Volume II, National 
Cemetery Administration, Benefits Programs, and Departmental 
Administration, Benefits Summary, Department of Veterans Affairs, Pg. 
6A-2 (Retrieved Feb. 2, 2008, from ).
---------------------------------------------------------------------------
    We have maintained the VA should invest more in training 
adjudicators and that it should hold them accountable for higher 
standards of accuracy. Nearly half of VBA adjudicators responding to 
survey questions from VA's Office of Inspector General admitted that 
many claims are decided without adequate record development. (The Board 
of Veterans' Appeals (Board) and the Court of Appeals for Veterans 
Claims' (Court's) remand rate clearly demonstrate this.) The Inspector 
General saw an incongruity between their objectives of making legally 
correct and factually substantiated decisions, with management 
objectives of maximizing output to meet production standards and reduce 
backlogs. Nearly half of those surveyed reported that it is generally, 
or very difficult, to meet production standards without compromising 
quality. Fifty-seven percent reported difficulty meeting production 
standards while attempting to ensure they have sufficient evidence for 
rating each case and thoroughly reviewing the evidence. Most attributed 
the VA's inability to make timely and high quality decisions to 
insufficient staff. In addition, they indicated that adjudicator 
training had not been a high priority in VBA.
    We have consistently stated that quality is the key to timeliness. 
Timeliness follows from quality because omissions in record 
development, failure to afford due process, and erroneous decisions 
require duplicative work, which add to the load of an already 
overburdened system. Quality is achieved with adequate resources to 
perform comprehensive and ongoing training, to devote sufficient time 
to each case, and to impose and enforce quality standards through 
effective quality assurance methods and accountability mechanisms. The 
VA has simply not had the resources necessary to achieve the level of 
quality required to avoid unacceptable error rates, increased numbers 
of appeals, and the consequent overload that causes backlogs and delays 
in claims dispositions. Having said that, we realize the FY 2009 budget 
submission provides a significant increase in staffing for VBA.
    However, additional resources are not the solitary answer to the 
claims backlog. One of the most essential resources is experienced and 
knowledgeable personnel devoted to training. More management devotion 
to training and quality requires a break from the status quo of 
production goals above all else. In a 2005 report from VA's Office of 
Inspector General, VBA employees were quoted as stating: ``Although 
management wants to meet quality goals, they are much more concerned 
with quantity. An RVSR is much more likely to be disciplined for 
failure to meet production standards than for failing to meet quality 
standards;'' and that ``there is a lot of pressure to make your 
production standard. In fact, your performance standard centers around 
production and a lot of awards are based on it. Those who don't produce 
could miss out on individual bonuses, etc.'' \3\
---------------------------------------------------------------------------
    \3\ Department of Veterans Affairs Office of Inspector General, 
Rep. No. 05-00765-137, Review of State Variances in VA Disability 
Compensation Payments 61 (May 19, 2005).
---------------------------------------------------------------------------
    In addition to basing awards on production, the DAV strongly 
believes that quality should be awarded at least on parity with 
productions. However, in order for this to occur, VBA must implement 
stronger accountability measures for quality assurance.
    VA's quality assurance tool for compensation and pension claims is 
the Systematic Technical Accuracy Review (STAR) program. Under the STAR 
program, the VA reviews a sampling of decisions from regional offices 
and bases its national accuracy measures on the percentage with errors 
that affect entitlement, benefit amount, and effective date. 
Notwithstanding other elements of concern over this program, if STAR 
were being used effectively, we question why the VA did not detect the 
substantial variations in average annual compensation payments from 
state to state brought to light by the news media and thereafter 
investigated by the VA Office of Inspector General in 2005.
    Inconsistency is a sign of arbitrariness in decisionmaking, uneven, 
or overall insufficient understanding of governing criteria or rules 
for decisions or rules that are vague or overly broad to allow them to 
be applied according to the prevailing mindset of a particular group of 
decision makers. Obviously, the VA must detect inconsistencies before 
the cause or causes can be determined and remedied.
    Simply put, there is a gap in quality assurance for purposes of 
individual accountability for quality decision making. In the STAR 
program, a sample is drawn each month from a regional office workload 
divided between rating, authorization, and fiduciary end products. For 
example, a monthly sample of ``rating'' related cases generally 
requires a STAR review of ``10'' rating-related end products.\4\ 
Therefore, one can easily distinguish the significant importance placed 
on productivity over and above the priority placed on accuracy. 
Reviewing 10 rating-related cases per month for a large size regional 
office, \5\ an office that would easily employ more than three times 
that number of raters, is undeniable evidence of a total void in 
individual accountability. If an average size regional office produced 
only 1000 decisions per month, which we feel is quite conservative, the 
STAR program would only review a tenth of one percent of the total 
cases decided by that regional office. Those figures leave no room for 
trend analysis, much less personal accountability.
---------------------------------------------------------------------------
    \4\ See M21-4, Ch. 3.
    \5\ See I.d. at 3.3
---------------------------------------------------------------------------
    To complement its STAR program for allegedly measuring quality at 
the national level, the VA announced in the year 2000 a new initiative 
for quality review at the individual level. Acknowledging that 
management needed tools to monitor individual performance, the VA 
created the ``Systematic Individual Performance Assessment'' (SIPA) 
program. Under this program, the VA would review an annual sample of 
100 decisions for each adjudicator to identify individual deficiencies, 
ensure maintenance of skills, promote accuracy and consistency of 
claims adjudication, and restore credibility to the system. The 
reviewers would perform related administrative functions, such as 
providing feedback on reviews, maintaining reports, and playing a role 
in employee development and ongoing training. Unfortunately, the VA 
abandoned this initiative during 2002, and proficiency is now 
apparently subjectively assessed by supervisors based on their day-to-
day perceptions of employee performance. Without any actual systematic 
review of samples of an individual adjudicator's decisions, 
deficiencies are more likely to go undetected and uncorrected. We 
understand that the culprit behind abandonment of SIPA was inadequate 
resources. Without any quality assurance review on the individual 
level, the VA is unlikely to impose effective accountability down to 
the individual adjudicator level, where it must go if optimum quality 
is expected.
    We believe today's VA workforce is conscientious and desires to 
make the best claims decisions possible, but it needs the time, 
training, and tools to do so, and the tools include a source of direct 
feedback from individualized quality reviews. Without such oversight, 
under qualified, poorly trained VBA employees repeat the same mistakes, 
which lead to repeated appeals on the same issue, and that result in 
the VA recycling the same cases over and over, further adding to the 
backlog.
    There is no proverbial silver bullet to solving VA's challenges. 
Various policy changes can and should be implemented that will 
collectively have a positive impact on reducing VA's claims backlog 
while also improving services to VA's clientele. The DAV believes the 
following policy changes will have such an impact.
Overdevelopment of Claims
    Numerous developmental procedures in the VA claims' process 
collectively add to the enormous backlog of cases. While many of these 
procedures are mandatory, they are often over utilized. This 
unnecessarily delays claims for months--when this occurs in, or leads 
to, the appeals process, claims are delayed for many years. There is no 
single answer to solving the claims backlog. Therefore, in addition to 
staffing increases, Congress and the VA must attack the problem using 
alternative methods, particularly when those alternative methods are 
parallel with the intent of the law, work to save departmental 
resources, and protect the rights of disabled veterans.
    For example, rather than making timely decisions on C&P claims when 
evidence development may be complete, the VA routinely continues to 
develop claims. These actions lend validity to many veterans' 
accusations that whenever the VA would rather not grant a claimed 
benefit, the VA intentionally overdevelops cases to obtain evidence 
against the claim. Despite these accusations, a lack of adequate 
training is just as likely the cause of such overdevelopment.
    Such actions result in numerous appeals, followed by needless 
remands from the Board and/or the Court. In many of these cases, the 
evidence of record supports a favorable decision on the appellant's 
behalf yet the appeal is remanded nonetheless. These unjustified 
remands usually do nothing but perpetuate the hamster-wheel reputation 
of veterans law. Numerous cases exemplify this scenario; a list can be 
provided upon request.
    Essentially, the VA requests unnecessary medical opinions in cases 
where the claimant has already submitted one or more medical opinions 
that are adequate for rating purposes. VA claimants desiring to secure 
their own medical evidence, including a fully informed medical opinion, 
are entitled by law to do so. If a claimant does secure an adequate 
medical opinion, there is no need in practicality or in law for the VA 
to seek its own opinion. Congress enacted title 38, United States Code, 
section 5125 for the express purpose of eliminating the former 38 Code 
of Federal Regulations, section 3.157(b)(2) requirement that a private 
physician's medical examination report be verified by an official VA 
examination report prior to an award of VA benefits. Section 5125 
states:

        For purposes of establishing any claim for benefits under 
        chapter 11 or 15 of this title, a report of a medical 
        examination administered by a private physician that is 
        provided by a claimant in support of a claim for benefits under 
        that chapter may be accepted without a requirement for 
        confirmation by an examination by a physician employed by the 
        Veterans Health Administration if the report is sufficiently 
        complete to be adequate for the purpose of adjudicating such 
        claim. [Emphasis added]

    Therefore, Congress codified section 5125 to eliminate unnecessary 
delays in the adjudication of claims and to avoid costs associated with 
unnecessary medical examinations. Notwithstanding the elimination of 
title 38, Code of Federal Regulations, section 3.157, and the enactment 
of title 38 United States Code section 5125, the VA consistently 
refuses to render decisions in cases wherein the claimant secures a 
private medical examination and medical opinion until a VA medical 
examination and medical opinion are obtained. Such actions are an abuse 
of discretion, which delay decisions and prompt needless appeals. When 
claimants submit private medical evidence that is adequate for rating 
purposes, Congress should mandate the VA must decide the case based on 
such evidence rather than delaying the claim by arbitrarily and 
unnecessarily requesting additional medical examinations and opinions 
from the agency. Such enactment will preserve VA's manpower and 
budgetary resources; help reduce the claims backlog and prevent 
needless appeals; and most importantly, better serve disabled veterans 
and their families.
Standard for Determining Combat Veteran Status
    Title 38, United States Code, section 1154(b) requires the VA to 
accept lay or other evidence as sufficient proof of service connection 
of a disease or injury if a veteran alleges that disease or injury 
occurred in or was aggravated during combat. While the VA recognizes 
the receipt of certain medals as proof of combat, only a fraction of 
those who participate in combat receive a qualifying medal. Further, 
military personnel records usually do not document actual combat 
experiences. As a result, veterans who suffer a disease or injury 
resulting from combat are forced to provide evidence that may not exist 
or wait a year or more while the VA conducts research to determine 
whether a veteran's unit engaged in combat.
    Congress should amend title 38, United States Code, section 1154(b) 
to clarify military service as treatable service in which a member is 
considered to have engaged in combat for purposes of determining 
combat-veteran status. Such clarification would properly allow for 
utilization of nonofficial evidence as proof of in-service occurrence 
for service connection of combat-related diseases or injuries.
    This type of legislation would remove a barrier to the fair 
adjudication of claims for disabilities incurred or aggravated by 
military service in combat zone. Under existing law, veterans who can 
establish that they ``engaged in combat'' are not required to produce 
official military records to support their claim for disabilities 
related to such service. This legislation would not alter the law's 
current requirement that a veteran confirm a disability through 
official diagnosis. Further, it would not alter the requirement that a 
veteran show a nexus between a claimed disability and military service. 
The only alteration from current law would be a relaxed standard of 
proof, consistent with Congress' original intent, required to establish 
a veteran as one who engaged in combat. This relaxed standard of proof 
would then only apply to those who serve in a combat zone.
    Many veterans disabled by their service in Iraq and Afghanistan, 
and those who served in earlier conflicts are unable to benefit from 
liberalizing evidentiary requirements found in the current version of 
section 1154(b). This results because of difficulty, even 
impossibility, in proving personal participation in combat by official 
military documents.
    Impositions put forth by VA General Counsel opinion 12-99 require 
veterans to establish by official military records or decorations that 
they ``personally participated in events constituting an actual fight 
or encounter with a military foe or hostile unit or instrumentality.'' 
Oversight visits by Congressional staff to VA regional offices found 
claims denied under this policy because those who served in combat 
zones were not able to produce official military documentation of their 
personal participation in combat via engagement with the enemy. The 
only possible resolution to this problem without amending section 
1154(b) is for the military to record the names and personal actions of 
every single soldier, sailor, airman, and Marine involved in every 
single event--large or small--that constitutes combat and/or engagement 
with the enemy on every single battlefield. Such recordkeeping is 
impossible.
    Numerous veterans have been and continue to be harmed by this 
defect in the law. In numerous cases, extensive delays in claims 
processing occur while VA adjudicators attempt to obtain official 
military documents showing participation in combat: documents that may 
never be located.
    The Senate noted in 1941, in the report on the original bill that 
the absence of an official record of care or treatment in many of such 
cases is explained by the conditions surrounding the service of combat 
veterans. Congress emphasized that the establishment of records for 
non-combat veterans was a simple matter compared to the combat 
veteran--either the veteran carried on despite his disability to avoid 
having a record made lest he or she be separated from his or her 
organization or, as in many cases, the records themselves were lost. 
Likewise, many records are simply never generated.
    Congress should clarify its intent by amending title 38, United 
States Code, section 1154(b), with respect to defining a veteran who 
engaged in combat for all purposes under title 38, as a veteran who 
during active service served in a combat zone for purposes of section 
112 of the Internal Revenue Code of 1986 or a predecessor provision of 
law.
Other Factors Affecting the Backlog
    In addition to the backlog of claims originating at the local 
regional office, the Board and the Court add substantially to the 
claims backlog by needlessly and frequently remanding numerous cases on 
appeal. In many of these appeals, the evidence of record fully supports 
a favorable decision on the appellant's behalf, yet the appeal is 
remanded nonetheless. These unjustified remands deprive the appellant, 
usually for many additional years, to benefits awardable based on facts 
already of record.
    The greatest challenge facing the Court is identical to the VA--the 
backlog of cases. The Court has shown a reluctance to reverse errors 
committed by the Board. Rather than addressing an allegation of error 
raised by an appellant, the Court has a propensity to vacate and remand 
cases to the Board based on an allegation of error made by the VA's 
counsel for the first time on appeal, such as an inadequate statement 
of reasons or bases in a Board decision. Another example occurs when 
the VA argues, again for the first time on appeal, for remand by the 
Court because the VA failed in its duty to assist the claimant in 
developing the claim notwithstanding an express finding by the Board 
that all development is complete and where the appellant accepts, and 
does not challenge such finding by the Board. Such actions are 
particularly noteworthy because the VA has no legal authority to appeal 
a Board decision to the Court.\6\
---------------------------------------------------------------------------
    \6\ 38 U.S.C.A, Sec. 7252(a) (West 2002) (``The Court of Appeals 
for Veterans Claim shall have exclusive jurisdiction to review 
decisions of the Board of Veterans' Appeals. The Secretary may not seek 
review of any such decision.'')
---------------------------------------------------------------------------
    Consequently, the Court will generally decline to review alleged 
errors raised by an appellant that actually serve as the basis of the 
appeal. Instead, the court remands the remaining alleged errors on the 
basis that an appellant is free to present those errors to the Board 
even though an appellant may have already done so, leading to the 
possibility of the Board repeating the same mistakes on remand that it 
had previously. Such remands leave errors properly raised to the Court 
unresolved; reopen the appeal to unnecessary development and further 
delay; overburden an already backlogged system; exemplify far too 
restrictive judicial restraint; and inevitably require an appellant to 
invest many more months and perhaps years of his or her life in order 
to receive a decision that the court should have rendered on initial 
appeal. As a result, an unnecessarily high number of cases are appealed 
to the Court for the second, third, or fourth time.
    In addition to postponing decisions and prolonging the appeal 
process, the Court's reluctance to reverse Board decisions provides an 
incentive for the VA to avoid admitting error and settling appeals 
before they reach the Court. By merely ignoring arguments concerning 
legal errors rather than resolving them at the earliest stage in the 
process, the VA contributes to the backlog by allowing a greater number 
of cases to go before the Court. If the Court would reverse decisions 
more frequently, the VA would be discouraged from standing firm on 
decisions that are likely to be overturned or settled late in the 
process.
    To remedy this unacceptable situation, Congress should amend title 
38, United States Code section 7261 to require the Court on a de novo 
basis, to: (1) decide all relevant questions of law; (2) interpret 
constitutional, statutory, and regulatory provisions; and (3) determine 
the meaning or applicability of the terms of an action of the 
Secretary. The Court's jurisdiction should also be amended to require 
it to decide all assignments of error properly presented by an 
appellant.
Conclusion
    We hope the Committee will review these recommendations and give 
them consideration for inclusion in your legislative plans.
    Mr. Chairman, thank you for inviting DAV to testify before you 
today.

                                 
        Prepared Statement of Paul Sullivan, Executive Director,
                       Veterans for Common Sense
    I would like to thank Chairman John Hall and members of the 
subcommittee for inviting Veterans for Common Sense to offer testimony 
regarding regional office solutions to eliminate the enormous backlog 
of 650,000 claims at the Veterans Benefits Administration. VCS is a 
non-profit organization based in Washington, DC, founded in 2002, 
providing advocacy for service members and veterans.
    At a recent VCS meeting with veterans, one Iraq war combat veteran 
asked us, ``What would a smooth running VBA regional office look 
like?'' We said it should be where veterans come first and where claims 
are decided accurately within 30 days.
    VCS fully supports the superb recommendations already made by 
Harvard Professor Linda Bilmes, Morrison & Foerster's Gordon Erspamer, 
and the Veterans Disability Benefits Commission. In addition, we 
recognize the tremendous efforts by VBA rank-and-file staff, many of 
whom are veterans, for their work assisting veterans every day.
Backlog Causes
    VCS believes there are five major reasons why VBA remains 
foundering in an ocean of incomplete claims, doubling from 325,000 
claims in 2002 to 650,000 claims today. Veterans now wait more than six 
months for an answer from VBA. Most of the reasons are beyond the 
control of rank-and-file VBA employees working at regional offices:

    1.  Staffing: VBA lacks the money to hire enough staff to handle 
the increased volume or to adequately train existing staff to make 
accurate, complete and timely decisions.
    2.  Process: VBA's complex and adversarial rules, VBA's 26-page 
claim form, and VBA's lack of due process make deciding claims 
unreasonably complicated.
    3.  Volume: More claims--with an increase of 17 percent more issues 
per claim over the past six years--keep flooding into VBA, such as 
Vietnam War veterans seeking benefits for Agent Orange poisoning and 
PTSD, as well as other veterans seeking a financial safety net due to a 
weak economy.
    4.  The Iraq and Afghanistan Wars: The two wars generated 245,000 
unanticipated VBA claims--again, with more issues per claim--with high 
rates of traumatic brain injury (TBI), post traumatic stress disorder 
(PTSD), and hearing loss.
    5.  Poor Leadership: VBA's political leadership lacked the vision 
to become proactive and resolve VBA's severe claims crisis.

    When combined, these five factors created a perfect storm at VBA. 
Compounded by institutional inertia and draconian budget restrictions 
from the Office of Management and Budget and the White House, the 
result is a catastrophic failure where the backlog and the length of 
time to process claims continues to grow. Now hundreds of thousands of 
veterans go without disability payments and access to VA medical care 
because VBA remains rudderless, sinking, and far out to sea in a raging 
hurricane.
Future Challenges
    Here are four significant additional challenges VBA faces:

    1.  The VBA capacity crisis is expected to worsen in the 
foreseeable future, as VA expects to process nearly one million new and 
re-opened claims next year.
    2.  VA regional offices received 245,000 unanticipated disability 
claims, yet 16 percent, or 39,000 veterans, are still waiting, on 
average six months, for a VA claim decision.
    3.  DoD already reports 68,000 non-fatal battlefield casualties 
from the two wars, and VA expects to treat 333,000 veteran patients 
during 2009, most of whom can be expected to file VBA disability 
claims, based on the activity of Gulf War veterans.
    4.  Veterans who served in the National Guard and Reserves are 
nearly three times as likely to have their claim denied than veterans 
from regular Active Duty (14% v. 5%). VCS believes this discrepancy 
warrants an investigation by VA, the Department of Justice, and 
Congress because last year the difference was only two times as likely.

Solutions
    VBA should use two avenues to fix problems: an incremental approach 
and an overhaul approach. VBA must make immediate reforms while keeping 
its eyes focused on creating a robust system where VA can, in fact, 
produce prompt, complete, and accurate VA disability claim decisions 
with 30 days. In the long-term, VCS suggests using the recommendations 
provided by the Veterans Disability Benefits Commission as a blueprint 
for the start of a desperately needed overhaul of VA, especially VBA.
    In the short term, in addition to recommendations made by Bilmes, 
Erspamer, and the VDBC, we ask Congress to change the law and thus 
provide VBA regional office employees the tools to put our veterans 
first:

    1.  Automatically approve disability claims for TBI. Congress 
should pass legislation to automatically approve disability benefits 
for deployed veterans who are diagnosed with TBI. Such a law would 
simplify and expedite claims processing at regional offices. According 
to the Defense and Veterans Brain Injury Center at Walter Reed Army 
Medical Center, up to 20 percent of Iraq and Afghanistan war veterans 
are at risk for TBI due to roadside bomb blasts. One VA physician 
estimates up to 30 percent, or between 320,000 and 500,000 TBI cases. 
However, the military does not document all bomb blasts, thus making it 
hard for VA to verify and to process TBI claims. This new law would 
establish that a deployment to the Iraq and Afghanistan war zones means 
VBA concedes there was a concussive blast incident strong enough to 
cause the TBI, unless there is evidence to the contrary. Coupled with 
this recommendation is a requirement for mandatory full funding for VA 
to provide proper TBI screening for all 1.6 million of our service 
members sent to war zones since September 11, 2001.
    2.  Automatically approve disability claims for PTSD. In July 2007, 
VCS asked Congress to pass legislation designed to automatically 
approve disability claims for veterans who are diagnosed with PTSD. VCS 
believes such a law would simplify and expedite claims processing at 
regional offices. Estimates range from 20 percent to 36 percent for 
Iraq and Afghanistan war veterans returning home with PTSD, or between 
320,000 and 600,000 PTSD cases. In a July 2004 Army study, the military 
documented 93 percent of soldiers and 97 percent of Marines experienced 
``being shot at or receiving small arms fire,'' indicating that nearly 
all soldiers are now involved in combat. Congress should investigate 
why VA diagnosed 56,246 veterans with PTSD, yet approved only 34,138 
PTSD disability claims, or only 61 percent. Are the 22,000+ claims 
pending, denied, or under appeal? Do veterans receiving free VHA 
healthcare know about VBA? A major problem facing veterans and regional 
office staff is the military's lack of records for all combat 
engagements. PTSD claims should be automatically approved with the 
understanding that deployment to Iraq and Afghanistan means VBA 
concedes there was at least one stressor sufficient enough to cause 
PTSD, unless there is evidence to the contrary.
    3.  Expand Benefits Delivery at Discharge. One of VBA's biggest 
hurdles at regional offices is obtaining military service and medical 
records. With a complete forward deployment of VBA staff at military 
bases, including all National Guard and Reserve armory and 
demobilization sites, VBA would have immediate and full access to 
records before they are shipped off to storage, misplaced, or 
destroyed. Congress should change the law so that all service members 
can file claims while still in the military. Currently, this is not 
available at all military installations, and is noticeably absent for 
our Reserve and National Guard. Congress should require any VBA 
employee stationed at a military facility to be trained and authorized 
to assist with both military and VA healthcare and claims paperwork. 
Coupled with this suggestion is the need for DoD to comply with 38 
U.S.C. section 5106 and provide military service records and military 
medical records to VA and to the veteran at discharge and for VHA to 
automatically enroll all new service members upon enlistment.
    4.  Hold VBA Accountable. In the end, VCS believes there must be 
accountability at VBA. At present, VCS is aware of only a very small 
number of VBA employees who have faced adverse consequences for 
incomplete, incorrect, negligent, or criminal activities involving 
veterans' claims. VCS asks Congress to request statistics from VBA that 
show the number of VBA employees who faced personnel actions 
(counseling, reprimands, demotion, transfer, or termination) as a 
result of a poor performance evaluation associated with developing or 
approving claims--and this should include all VBA staff, from rating 
specialists to supervisors to Executives.

    VCS believes accountability for VBA must rest with the highest 
official at VBA, the Under Secretary for Benefits, Daniel Cooper. After 
six years, he provided only small incremental changes rather than both 
incremental change and a massive overhaul. Congress must hold the 
entire Administration--VBA, VA, OMB, and the White House--accountable 
for this systemic failure to assist our disabled veterans, lest this 
problem continue indefinitely even if a new Under Secretary were 
confirmed.
    Here is a chronology showing the Under Secretary was fully aware of 
VBA's crisis before he became Under Secretary, yet he failed to deliver 
for our veterans:

      In early 2001, then-Secretary Anthony Principi recognized 
challenges at VBA, and he created the ``Claims Processing Task Force,'' 
naming Cooper to lead it, even though he had no experience with VA. He 
was a retired Navy Vice Admiral who served on the Board of Directors 
for Exelon, a nuclear power company, and USAA, an insurance and banking 
company.
      In October 2001, Cooper issued his Task Force report, 
which made dozens of thoughtful incremental recommendations, including 
holding VBA employees accountable. In November 2001, the full Committee 
held a hearing to discuss the work of the Task Force. After 9/11 and 
after the invasion of Afghanistan, Cooper told the full Committee, ``In 
my opinion, today, there are enough resources in VBA to do the job that 
has to be done'' (page 16).
      In December 2001, with more troops pouring into 
Afghanistan and with plans on the table to invade Iraq, Cooper provided 
additional written answers to the full Committee's questions about 
staffing resources. Cooper wrote, ``At the hearing, I specifically 
stated that new resources (i.e., FTE) should not be provided'' (page 
166). Given that there were hundreds of thousands of claims from half 
of our Gulf War conflict veterans, why did he not plan for nor act on 
the needs of a new generation of war veterans when he became Under 
Secretary in 2002?

Conclusion
    A failure to address VBA's claims catastrophe has needlessly 
increased suffering among our veterans and their families. According to 
published government and news reports, the number of broken homes, 
unemployed veterans, drug and alcohol abuse, suicides, and homelessness 
all rose--problems expected to worsen without immediate action to 
resolve VBA's claims crisis. VCS believes VA, VBA, and Congressional 
leaders should work closely with VBA employees and advocates to find 
solutions. VCS respectfully requests our ethics complaint against the 
Under Secretary for Benefits sent to DoJ on September 4, 2007, be 
entered into the hearing record.

                                 
         Prepared Statement of Steve Smithson, Deputy Director,
    Veterans Affairs and Rehabilitation Commission, American Legion
Mr. Chairman and Members of the Subcommittee:
    Thank you for giving The American Legion the opportunity to present 
its views on the Department of Veterans Affairs (VA) backlog and VA's 
claims processing system.
Claims Backlog & Staffing
    In Fiscal Year (FY) 2007, more than 2.8 million veterans received 
disability compensation benefits. Providing quality decisions in a 
timely manner has been, and will continue to be, one of the VA's most 
difficult challenges. A majority of the claims processed by the 
Veterans Benefits Administration's (VBA) 57 regional offices involve 
multiple issues that are legally and medically complex and time 
consuming to adjudicate.
    As of February 2, 2008, there were 653,595 claims pending in VBA, 
400,386 of which are rating cases. There has been a steady increase in 
VA's pending claim backlog since the end of FY 2004 when there were 
321,458 rating cases pending. At the end of FY 2007, there were more 
than 391,000 rating cases pending in the VBA system, up approximately 
14,000 from FY 2006. Of these, more than 100,000 (25.7 percent) were 
pending for more than 180 days. Including non-rating claims pending, 
the total compensation and pension claims backlog was more than 
627,000, with 26.5 percent of these claims pending more that 180 days. 
There were also more than 164,000 appeals pending at VA regional 
offices, with more than 142,000 requiring some type of further 
adjudicative action. At the end of FY 2007, the average number of days 
to complete a claim from date of receipt (182.5 days) was up 5.4 days 
from FY 2006.
    Inadequate staffing levels, inadequate continuing education, and 
pressure to make quick decisions, resulting in an overall decrease in 
quality of work, has been a consistent complaint among regional office 
employees interviewed by The American Legion staff during regional 
office quality checks. It is an extreme disservice to veterans, not to 
mention unrealistic, to expect VA to continue to process an ever 
increasing workload, while maintaining quality and timeliness, with the 
current staff levels. The current wartime situation provides an 
excellent opportunity for VA to actively seek out returning veterans 
from Operations Enduring Freedom and Iraqi Freedom, especially those 
with service-connected disabilities, for employment opportunities 
within VBA. Despite the recent hiring initiatives, regional offices 
will clearly need more personnel given current and projected future 
workload demands.
    However, VBA must be required to provide better justification for 
the resources VBA says are needed to carry out its mission and, in 
particular, how VBA intends to improve the level of adjudicator 
training, job competency, and quality assurance. Each of these topics 
will be discussed in greater detail below.
Production vs. Quality
    Since 1996, The American Legion, in conjunction with the National 
Veterans Legal Services Program (NVLSP), has conducted quality review 
site visits at more than 40 regional offices for the purpose of 
assessing overall operation. This Quality Review Team visits a regional 
office for a week and conducts informal interviews with both VA and 
veterans service organization (VSO) staff. The Quality Review Team then 
reviews a random sample of approximately 30-40 recently adjudicated 
American Legion-represented claims. The Team finds errors in 
approximately 20-30 percent of cases reviewed.
    The most common errors include the following:

      Inadequate claim development leading to premature 
adjudication of claim;
      Failure to consider reasonably inferred claims based on 
evidence of record;
      Rating based on inadequate VA examination; and/or
      Under evaluation of disability (especially mental 
conditions).

    These errors are a direct reflection of VA's emphasis of quantity 
over quality of work. This seems to validate The American Legion's 
concerns that emphasis on production continues to be a driving force in 
most VA regional offices, often taking priority over such things as 
training and quality assurance. Clearly, this frequently results in 
premature adjudications, improper denials of benefits and inconsistent 
decisions.
Training
    Proper mandatory training is a key factor in the quality of VA 
regional office rating decisions. The Board of Veterans' Appeals (BVA) 
combined remand and reversal rate (56 percent) of regional office 
decisions for FY 2007 is a direct reflection of the lack of importance 
placed on training by the VA regional offices. Our quality review site 
visits have revealed that, at many regional offices, there have been 
too few experienced supervisors that could provide trainee adjudicators 
proper mentoring and quality assurance. In addition, at many stations, 
ongoing training for the new hires, as well as the more experienced 
staff, would be postponed or suspended, so as to focus maximum effort 
on production.
    Despite the assurances of the Under Secretary for Benefits that 
training of personnel is a top priority within VBA, the inconsistency 
in VBA's training approach and in its implementation needs to be 
thoroughly reviewed and addressed by upper management within the VBA. 
In the experience of The American Legion, the lack of proper training 
and oversight adversely impacts all areas of VBA. Each of VBA's 57 
regional offices appear to have different approaches to training and 
also differ in the importance placed on training. According to a May 
2005 report from the VA Office of the Inspector General (VAOIG), based 
on a survey of rating veterans service representatives (RVSRs) and 
decision review offices (DROs), the respondents expressed positive 
opinions regarding the quality of their training, but the overall 
response indicated that training did not receive high priority.
    The information obtained in the VAOIG's survey is consistent with 
what The American Legion has found in talking to service center staff 
during our quality review site visits. Some stations have regular 
formalized or structured training programs, while others have training 
programs that are best described as more informal and sporadic. Some 
stations have well established and structured training for new 
employees, but ongoing training for experienced staff is very limited.
    The VAOIG also recommended that a scientific study be conducted to 
further examine the variances in disability payments. VA subsequently 
contracted the Institute for Defense Analyses (IDA) to conduct the 
study. IDA released its report in 2007. 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.
    We are 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 (C&P) Service, 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 believes it is essential to 
proper training that information (reasons for remand or reversal) from 
BVA decisions, DRO decisions and errors noted in National STAR and 
other internal quality reviews be tracked and examined for patterns. 
This information should then be used 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 regional offices, it appears 
that consistent utilization of this data in regular formalized and 
specific training is lacking.
    The American Legion must stress that unless regional offices (both 
managers and individual adjudicators) learn from their mistakes and 
take corrective action, the VA will continue to have a high rate of 
improperly adjudicated claims, which result in a consistently high 
appeals rate and subsequent high BVA remand/reversal rate.
Performance Standards
    Performance standards of adjudicators and rating specialists are 
centered on productivity as measured by work credits, known as ``End 
Products.'' Both veterans service representatives (VSR) and RVSRs have 
minimum national productivity requirements that must be met each day. 
Some stations also set their own standards, based on their claims 
backlog and other station specific requirements that are over and above 
the national requirement. Despite the fact that VBA's policy of 
``production first'' has resulted in many more veterans getting faster 
action on their claims, the downside has been that tens of thousands of 
cases are prematurely and arbitrarily denied. Approximately 65 percent 
of VA raters and DROs surveyed by the VAOIG, in conjunction with its 
May 2005 report, admitted that they did not have enough time to provide 
timely and quality decisions. In fact, 57 percent indicated that they 
had difficulty meeting production standards if they took time to 
adequately develop claims and thoroughly review the evidence before 
making a decision. These findings are consistent with what our Quality 
Review Team has reported from interviews with regional office service 
center staff.
    Unfortunately, the End Product work measurement system essentially 
pits the interests of the claimant against the needs of VA managers. 
The conflict is created because the regional offices have a vested 
interest in adjudicating as many claims as possible in the shortest 
amount of time. Awards and bonuses are often centered on production 
rather than outcomes. This creates a built-in incentive to take 
shortcuts so that the End Product can be taken. The system, in effect, 
rewards regional offices for the gross amount of work they report, not 
whether the work is done accurately or correctly, often resulting in 
many claims being prematurely adjudicated. These problems are caused by 
inadequate development, failure to routinely identify all relevant 
issues and claims and/or ratings based on inadequate examinations. Even 
the VAOIG acknowledged 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.
    Such errors, however, are often overshadowed by the desire of VA 
managers to claim quick End Product credit. The result has been a 
traditionally high remand rate by BVA and the Court of Appeals for 
Veterans Claims (CAVC). The American Legion believes that VBA 
management is reluctant to establish a rigorous quality assurance 
program to avoid exposing the longstanding history of the manipulation 
of workload data and policies that contribute to poor quality 
decisionmaking and the high volume of appeals. VBA's quality-related 
problems and the fact that little or no action is being taken to 
prevent or discourage the taking of premature End Products have been 
longstanding issues for The American Legion. The current work 
measurement systems, and corresponding performance standards, are used 
to promote bureaucratic interests of regional office management and VBA 
rather than protecting and advancing the rights of veterans. The End 
Product work measurement system, as managed by the VA, does not 
encourage regional office managers to ensure that adjudicators do the 
``right thing'' for veterans the first time. For example, denying a 
claim three or four times in the course of a year before granting the 
benefit sought allows for a total of FIVE End Product work credits to 
be counted for this one case, rather than promptly granting the benefit 
and taking only one work credit.
    In the view of The American Legion, the need for a substantial 
change in VBA's work measurement system is long overdue. A more 
accurate work measurement system would help to ensure better service to 
veterans. Ultimately, this would require the establishment of a work 
measurement system that does not allow work credit to be taken until 
the decision in the claim becomes final, meaning that no further action 
is permitted by statute whether because the claimant has failed to 
initiate a timely appeal or because the BVA rendered a final decision. 
We are pleased that legislation (H.R. 3047) introduced in 2007 would 
mandate such overdue changes to VA's work credit system. We are hopeful 
that, if enacted, this legislation, which would change the underlying 
incentive by rewarding quality of work rather than quantity, will 
increase the number of accurate decisions as well as claimant 
satisfaction and, in doing so, reduce the overall number of appeals.
Proficiency/Competency
    C&P Service conducted an open book (pilot) job skill certification 
test for VSRs 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 Service 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 Service 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 Service is in the process 
of developing a test for RVSRs 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 veterans and their 
families.
Immediate (Non-legislative) Remedies to reduce Claims Backlog
    Greater emphasis should be placed on conducting triage to identify 
and expedite claims that are substantially complete (very little or no 
development needs to be completed in order to rate the claim) at the 
time they are submitted. Then compensation & pension exams should be 
ordered as soon as possible in cases where the only development that is 
needed in order to rate the claim is an exam. Although there are 
mandatory notification requirements under the VCAA, VA can streamline 
its waiver process in those cases where the claim is substantially 
complete and or veterans do not have any additional evidence to submit. 
This would allow VA to proceed with the adjudication process in a 
timely manner without having to wait for the expiration of the time 
period for a veteran to submit additional evidence or otherwise respond 
to the VCAA letter.
    The aforementioned process should also be applied in claims with 
multiple issues in order to provide claimants with access to VA 
healthcare and compensation, while VA continues to work those issues 
that are more complex or require significant development. Issues that 
are substantially complete and essentially ``ready to rate'' at time of 
submission should be so identified and expedited in order to avoid 
delay that would result if adjudication was put off until all issues 
were ready to rate. Issues that are more complex or require significant 
development should be deferred for rating upon completion of required 
development.
    VA often receives claims that contain evidence sufficient to 
establish service connection and also sufficient medical evidence to 
properly rate the current severity of the condition under the 
applicable diagnostic code. In most, if not all of these cases, VA, as 
matter of routine, schedules an exam even though it has sufficient 
evidence to not only establish service connection, but also sufficient 
evidence to properly rate the condition under the applicable rating 
criteria.
    Perfect examples of this are claims of entitlement to service 
connection for type II diabetes based on the Vietnam Agent Orange 
(herbicide) presumption. If a veteran diagnosed with type II diabetes 
meets the Vietnam service requirements, exposure to herbicides is 
conceded and entitlement to service connection is automatically 
established, if the condition developed to a degree of 10 percent or 
more disabling during the applicable presumptive period and rebuttal of 
service connection, in accordance with 38 C.F.R. Sec. 3.307, was not 
accomplished. In type II diabetes cases, the treatment notes (either 
private or VA) more often than not contain sufficient medical 
information to properly rate the current severity of the condition 
under the VA Schedule for Rating Disabilities, negating the necessity 
of a VA examination. Unfortunately, the routine scheduling of 
(unnecessary) examinations in cases such as this where there is 
sufficient evidence of record to establish service connection and to 
properly rate the condition can result in one to three month delays in 
adjudicating the claim. The American Legion, therefore, recommends 
establishing specially trained triage teams to identify such claims.
    VA could also explore another option that involves cases where 
there is sufficient evidence to establish service connection, but an 
exam is needed to accurately rate the current severity of the 
condition. In these cases, VA could grant service connection, establish 
a baseline evaluation based on the medical evidence of record, and then 
go back later and conduct an exam to establish current severity of the 
condition. Such a process would quickly establish service connection 
and, as a result, VA healthcare eligibility, and generally provide the 
claimant with payments in a timelier manner.
Brokered Claims
    In an effort to help balance its claims backlog across regional 
offices, VBA established a ``brokering'' program where it transfers 
claims from the regional office of jurisdiction to another regional 
office to be adjudicated. The idea behind brokering cases is to provide 
assistance to regional offices with large backlogs by having another 
regional office rate a specified number of its claims each month. 
Regional office employees and VSOs located at regional offices that 
broker work to other offices have consistently voiced concern about the 
quality of the brokered work, to our Quality Review Team during site 
visits. There seems to be a common consensus among VA and VSO 
employees, interviewed by the Team, that regional offices working 
brokered claims do not have a vested interest in the brokered claim as 
it is not under their permanent jurisdiction nor will they have to deal 
with subsequent appeals. The frequency of errors found in brokered 
cases reviewed during The American Legion quality review site visits 
supports this concern.
    Unfortunately, although VBA does not have a mechanism in place to 
monitor the quality of brokered work, VBA management continues to tout 
this program as an effective case management tool. Although this 
program may be a necessary short-term solution for regional offices 
unable to effectively manage current workloads, it does not address the 
staffing and other resource deficiencies that resulted in the need for 
work to be brokered in the first place. VBA management should not 
continue to rely on brokering as permanent solution to addressing its 
claims backlog, but should focus on ensuring that its regional offices 
have adequate staffing, training, and other resources in order to 
properly manage their own workloads and eliminate the need for 
brokering all together.
Conclusion
    The best way to help veteran claimants is to fix the entire VA 
claims adjudication system. Piecemeal solutions do not work and should 
be avoided. The VA work measurement system should be changed so that VA 
regional offices are rewarded for good work and suffer a penalty when 
consistent bad decisions are made. Managers, rating specialists and BVA 
law judges and attorneys should be rewarded for prompt careful work and 
they should also be penalized when they make bad decisions. American 
veterans seeking VA disability benefits deserve better treatment than 
what they are currently getting from VA.
    Thank you again, Mr. Chairman, for allowing The American Legion to 
present comments on these important matters. As always, The American 
Legion welcomes the opportunity to work closely with you and your 
colleagues to reach solutions to the problems discussed here today that 
are in the best interest of America's veterans and their families.

                                 
        Prepared Statement of Gerald T. Manar, Deputy Director,
   National Veterans Service, Veterans of Foreign Wars of the United 
                                 States
CHAIRMAN HALL, RANKING MEMBER LAMBORN AND MEMBERS OF THE SUBCOMMITTEE:
    Thank you for this opportunity to present the views of the 2.4 
million veterans and auxiliaries of Veterans of Foreign Wars of the 
United States on the VA claims processing system.
An increasingly complex world
    During my 30 year career with the Department of Veterans Affairs I 
was fortunate to meet, and in some cases, work with many of the highest 
leaders in what is now the Veterans Benefits Administration (VBA). 
During one such meeting several of these Executives spent a few minutes 
reminiscing about the days when they were young claims examiners in the 
1950's and `60's. They laughed about a disability pension program so 
simple that they were able to memorize the monthly benefit rates paid 
based on the breakdown of income received by veterans. Under that 
program it was only necessary to compute income within a band, or a 
range, of income. Income within that band was paid a single rate.
    That simple program was replaced by what is now called section 306 
Pension; that, in turn, was replaced in 1979 by the ``Improved 
Pension'' Program. The Improved Pension Program requires detailed 
reporting by claimants, verified through matching programs with Social 
Security and the Internal Revenue Service. The pension benefit is 
adjusted up or down for every single dollar of countable income. It is 
a program so precise that discovery of an extra $10 of income will 
lessen the pension by that amount while payment of an extra $10 for 
medical expenses may increase it.
    There are many positive and negative aspects to the Improved 
Pension Program. However, it is undisputable that it is not easy to 
understand and is certainly not ``simple'' to administer.
    In truth, I am not aware of any program administered by VA that is 
simpler or easier to administer today than it was 30 years ago.
    When I started working for the VA in 1974 there were three 
education programs: Chapter 34, the GI Bill, Chapter 31, vocational 
rehabilitation, and Chapter 35, for certain dependents and survivors of 
veterans who either died from or were totally disabled by service 
connected disabilities. Today, in addition to Chapters 31 and 35, there 
are separate programs for active duty and Guard and Reserve members. 
Better for veterans? Yes. Simpler and easier to administer? No.
    Congress created the Court of Veterans Appeals, now the Court of 
Appeals for Veterans Claims (CAVC), in 1988 to provide veterans and 
other claimants an independent review of VA decisions concerning their 
entitlement to benefits. In the 20 years since its creation, the Court 
has issued thousands of opinions affirming the decisions of the Board 
of Veterans Appeals (BVA). During the same period, however, the CAVC 
has issued many other decisions which clarified, corrected or redefined 
VA's interpretation of the law governing compensation, pension and 
education benefits. These decisions, in turn, forced VA to rework its 
policies and procedures to conform to these new interpretations of the 
law. In some instances, VA has had to rework thousands of cases to 
ensure compliance with court decisions.
    Few can dispute that veterans and other claimants have benefited 
from the improved understanding of the legal requirements surrounding 
the development and decisionmaking process within VA. However, no one 
anticipated the impact court decisions have had in making the work more 
complex. And, as we have seen, increased complexity extends the time it 
takes to resolve claims and increases the opportunity for error. Better 
for veterans? Yes. Simple and easy to administer? No.
    It is not just changes to the law and judicial review that have 
delayed VA decisionmaking. Until the last few years, staffing at VA 
experienced a decade's long roller coaster ride that trended ever 
downward. As an Adjudication Officer in Los Angeles from 1986 to 1996, 
I can report to you that we suffered through long periods of hiring 
freezes and delayed budgets. Our annual attrition rate during that 
period averaged 15 percent and to be forced to wait a year or more 
before being able to hire anyone was disastrous to the orderly 
maintenance of a workforce capable of processing of claims. Further, 
when we were able to hire, we were rarely permitted to recruit to fill 
all our needs.
    We soldiered on through those staffing draughts, always trying new 
ways to motivate and encourage our employees to produce more. Although 
we had our successes, long periods of overtime that tend to exhaust 
employees, reduced flexibility due to staffing losses and an inability 
to timely fill critical vacancies resulted in gradually increasing 
backlogs. Sadly, it also led to an increase in errors: mistakes that 
cost veterans and the government alike.
    VA leadership experimented with different claims processing models 
and configurations of work activities. While always well intentioned, 
these experiments generally failed either because they didn't translate 
well from private industry or through poor execution. Each failed 
business model caused VBA to fall further and further behind.
    I mention all these things because they are not ancient history. 
There has been no break in the last 10 years where the VA was problem 
free and operating on all cylinders. The problems of the past continue 
to echo down to the present. While the infusion of much needed staffing 
over the last few years is welcome, it takes years to properly bring 
those new employees to accomplish quality work at journeyman levels of 
production.
Axioms--self evident truths
    There is no quick fix to VBA; there is only the opportunity for 
steady and deliberate improvement.
    There is no magic bullet. Any single plan to make the claims 
processing system simple and easy will make things only marginally 
simpler and easier on the VA bureaucracy and will occur at the expense 
of the rights and benefits of at least some veterans, dependents and 
survivors. Any such plan is simply unacceptable.
    Perhaps it is time to recognize that the world has changed. There 
has been a silent paradigm shift over the last 30 years. If for no 
other reason than judicial review, the Veterans Claims Assistance Act 
and the budgetary environment which exists today, it may be time to 
acknowledge that VA cannot be staffed at such levels as will allow it 
to produce quality decisions in the same timeframe that earlier 
generations of dedicated government workers achieved.
    The converse of this may be to acknowledge that the better 
production and timeliness levels achieved in the 1950's and '60's may 
very well have been accomplished because there was less attention paid 
to procedural rights and that the VA may have exhibited a cavalier 
attitude when it came to interpreting the law and its own regulations.
    It pains me to say this, but whether you agree with either view of 
history, the initial point remains: the world in which VA operates has 
changed and it may no longer be realistic to expect accurate benefit 
decisions in a short period of time.
    If we concede for the sake of argument that the first three 
observations are accurate, there are still things that can be done to 
improve production, reduce backlogs (although perhaps not at the rate 
we would like to see) and ensure claims are completed with quality.
    During my career with the VA I made a conscious decision to avoid 
membership in any veteran's service organization. I felt that I needed 
to be totally objective and free from even the appearance of a conflict 
of interest. However, I was well aware of the good things service 
officers were able to accomplish for veterans and their families. That 
is why I did not hesitate to extend my service to veterans by joining 
with the VFW.
    One of the things that has bothered me since coming to work for the 
VFW is that the general public, when it thinks of veterans service 
organizations at all, thinks of us as always having our hand out, 
always asking more and more for veterans. It is the perception that we 
are ungrateful beggars that bothers me the most.
    We stand here speaking for our nearly 2 million veteran members. 
More than that, we, and the others at this table, speak for all 
veterans who don't have a working knowledge of the laws found in the 
U.S. Code or the rules set out in the Code of Federal Regulations. We 
are both advocates and lobbyists; we are proud to speak for all those 
men and women who, through the years, offered up themselves, sometimes 
at great risk of injury or death, so that you and I have the freedom to 
speak our minds in this public forum.
    We ask for nothing but that which these men and women deserve to 
help make them whole from the physical and mental injuries they 
suffered during their military service.
    We come today not with our hands out but with real tangible ideas 
for improving timeliness of processing claims without harming veterans 
in the process. Some of the suggestions offered below were first put 
forward to the Veterans Disability Benefits Commission in April 2007. 
Others arise from the experiences of those who serve veterans, both in 
and out of government. These suggestions alone will not have a major 
impact on the backlog. However, if presenting them spurs additional 
ideas, then perhaps they will all, cumulatively, make the improvements 
necessary to achieve quality decisions within a reasonable time.
Starving regional offices
    One of VBA's current policies is to replace lost staffing in 
regional offices according to their ability to process claims. 
Specifically, the more productive an office is, the more staff they 
receive. While this policy may encourage management at an 
underperforming office in the short run, over time it magnifies the 
deficiencies at the underperforming office, resulting in 
disproportionate backlogs and extended delays for the veterans served 
by that office.
    This policy has existed for at least the last five years. While VBA 
attempts to compensate by shifting, or ``brokering'', work to other 
offices, this does not solve the problems at the underperforming 
offices. Further, while brokering cases is an excellent temporary 
measure to deal with workload fluctuations, it has become routine for 
some offices. Continuous brokering of work takes on the trappings of a 
game called ``Whack-a-Mole'' at the county fair: as soon as you push 
down workload at one location, it rises dramatically in another.
    In our view, the policy of starving certain offices is 
counterproductive, both for employees and the veterans they serve. If 
VBA is unable to provide those offices with the leadership, resources 
and training to make them productive, then it needs to develop the 
corporate, institutional and political courage to change the mission of 
those offices to something other than claims processing.
Rotation of Veteran Service Representatives
    The current claims processing system requires the periodic rotation 
of Veteran Service Representative (VSR's) from team to team. While this 
facilitates personal development and ensures that a cadre of employees 
exist who have experience in all aspects of claims processing, it means 
that teams lose their most knowledgeable members at the very moment 
they become the most effective and productive. If the current claims 
processing model is the most efficient, and I am not convinced that it 
is, then VBA management needs to reexamine this policy and determine 
how it can be better adjusted to ensure that the needs of veterans, 
employees and the organization are best met.
    We urge the VA to reexamine the way it staffs its' Triage Team. It 
is our belief that this part of the organization would benefit most 
from having a stable workforce made up of clerks (similar to the 
correspondence and development clerks employed by VA in the past) 
rather than the higher paid and more versatile VSR. Utilization of more 
clerks at this level would reduce at least one rotation of VSR's.
Focus on quality; get it right the first time
    We believe that the greatest benefits can be found by fixing the 
front end of the claims operation. Most court decisions today focus on 
procedural problems stemming from notice to claimants and development, 
or failures to properly develop evidence. The VCAA was created because 
VA would sometimes take shortcuts in the claims development period, 
failing to give claimants adequate notice of what they needed to 
produce to prove their claims. However, as we have seen since its 
passage, it is quite possible to become bogged down in the notice 
requirements while attempting to dot every ``i'' and cross every ``t''.
    We support the VCAA because we believe it helps level the playing 
field for veterans. The VA has the expert knowledge of what is required 
in order to grant or increase benefits to veterans. They are required 
to pass that knowledge on so that claimants know, too, and can focus 
their energies in obtaining the necessary evidence to perfect their 
claim.
    However, this is not rocket science. If a veteran claims service 
connection for the residuals of a knee injury, the VA can tell her that 
she needs to show that she has a disability of the knee now, that she 
injured the knee in service or something that happened in service 
caused a knee problem and to provide VA with medical evidence that 
shows the current problem to be related to the event in service. These 
are the same three things that have always been required to prove 
service connection.
    The requirements for obtaining an increase in benefits are equally 
finite: a claimant must show that their service-connected disability 
has worsened sufficiently to obtain a higher evaluation. In order to 
obtain an increase for that knee problem, the veteran must show the 
existence of arthritis in the joint which limits motion or pain, or 
limitation of extension or flexion by certain amounts, or instability 
in the joint.
    Again, this is not rocket science. Software can be developed that 
allows a VSR in a Pre-Determination team to simply answer a question on 
a computer screen concerning whether the claim is for service-
connection or an increase and what the claimed condition is. Now, as 
you suspect, the computer can generate paragraph after paragraph 
explaining what is required and if the veteran is claiming 12 
conditions then the letter can become quite long. However, if the 
object is to ensure that claimants have the information necessary to 
perfect their claims then it can be done with properly programmed 
computers. Further, these software programs can be made available to 
claimants in a simple, easily accessed, public website. Any curious 
veteran could enter the website, answer a series of simple questions 
and receive detailed information on what is needed to obtain the 
benefit.
Veterans Claims Assistance Act
    It has been said that a journey of a thousand miles begins with a 
single step. In a like fashion, the journey from filing an initial 
claim to receipt of a final decision by the VA begins with the 
determination by VA as to whether a ``substantially complete claim'' 
has been submitted by a claimant. Once VA receives a substantially 
complete claim it is required by law to begin a rigorous ritual of 
notification and action which are designed to help claimants obtain 
either sufficient evidence to allow VA to grant their claim or all 
pertinent evidence which will allow VA to deny the benefits sought.
Background
    The rules governing VA's duty to assist were spelled out by 
Congress in the Veterans Claims Assistance Act of 2000 (VCAA). This law 
overturned a Court of Appeals for Veterans Claims ruling in Morton v. 
West, 12 Vet. App. 477 (1999) which held that individuals had to submit 
a ``well grounded'' claim before VA was required to help them obtain 
evidence necessary to prove their claim. In application, a well 
grounded claim proved to be harder to achieve than previously required 
by VA.
    With the VCAA, Congress substantially lowered the evidentiary 
standard claimants had to meet before VA was required to help them 
gather evidence. The Veterans of Foreign Wars (VFW) believes that the 
VCAA was necessary to restore the status quo ante. In doing this, 
Congress spelled out in great detail the actions VA must take to help 
claimants with their claims.
    Following passage of the VCAA, VA diligently (some would say 
bureaucratically) attempted to comply with both the substance and 
spirit of the legislation. In doing so, VA crafted and refined 
procedures and correspondence designed to comply with the law. Legal 
challenges required significant changes and one required VA to send 
letters to hundreds of thousands of individuals who had claims pending 
before VA.
    These legislative and judicial efforts to ensure that VA does 
everything possible for claimants to help them develop claims, while 
well intentioned, has led to a process that is legalistic, fragmented 
and more intended to make cases appeal proof than it is to adequately 
inform claimants of the information they need to move forward with 
their claims. Review of a single VCAA letter will leave even lawyers 
shaking their heads in an attempt to understand what it is VA needs to 
complete processing of a claim.
    On the surface, the legal requirements seem simple enough: tell the 
claimant what evidence is contained in her file; tell her what evidence 
is needed to complete the claim; tell her that VA will help her obtain 
certain evidence if she provides the names and addresses of facilities 
and doctors who provided treatment related to the claim; and tell her 
that VA will obtain service medical records, pertinent VA health 
records and any necessary records held by the Federal government.
    What makes this difficult is that individuals often want service 
connection or higher evaluations for more than one condition. At a time 
when the average new claim contains 8 or 9 conditions, and some as many 
as 20 or more, spelling out a simple and clear explanation as to how 
claimants can obtain an earlier decision from VA is difficult.
    We believe that this effort, if done properly, will go a long way 
to taking the confusion out of the VCAA notice letters. Such clarity 
will help claimants provide all the evidence needed by VA to decide 
their claims.
    We would suggest, however, that those who have brought us the 
current stable of lengthy and confusing development letters are likely 
to be the same people who revise them. Consequently, we believe that VA 
should extensively use focus groups to ensure that the new letters are 
understandable and readable to the average person while complying with 
the law.
    We believe that additional things can be done to allow 
knowledgeable claimants to move more quickly through the duty to assist 
morass:
Waiver of the VCAA notice and 60 day waiting period
    Currently, VA is required to send a VCAA notice to everyone who has 
submitted a ``reasonably complete'' claim. There are times, however, 
when knowledgeable claimants, or claimants represented by competent 
advocates, submit everything necessary for VA to adjudicate their 
claim. Under current law and practice, however, VA is required to not 
only review the claim for completeness but also undertake development 
as required by law. The VA does this even if the claimant specifically 
states, in writing, that the claim is complete, that there is no 
additional evidence available and requests a waiver of VCAA 
development. This creates additional and unneeded work on VA regional 
office personnel and delays the adjudication of the claim by at least 
60 days.
    What we propose is that Congress amend the duty to assist 
provisions of the law to allow a knowledgeable wavier of duty to assist 
development. What we envision is a form which requires positive or 
negative answers to specific questions which, in the end, demonstrates 
that the claimant knows what the law requires VA to do, what evidence 
is needed by VA and consciously waives the VCAA notice and 60 day 
waiting period.
    For example, the waiver form could include questions like:

      Have you been treated since service for any of your 
claimed disabilities? (yes/no)
      If you were treated since service, have you submitted all 
private medical evidence that shows treatment for your claimed 
disabilities? (yes/no)
      Have you furnished VA with the names, addresses and dates 
of treatment, if any, of all records held by the Federal government 
(not just VA)? (yes/no)
      Do you understand that by requesting this waiver VA will 
make no further efforts to identify or develop treatment records not 
currently held by VA? (yes/no)
      Do you understand that by requesting this waiver VA will 
make no further efforts to identify or develop records not currently 
held by the Federal government? (yes/no)
      Do you understand that while you may submit additional 
evidence while your claim is being processed, your waiver relieves VA 
of the legal requirement to help you obtain evidence that you tell it 
about? (yes/no)

    While VA would still have to develop those claims where the form 
was not utilized or not correctly completed, it would still be able to 
move a significant number of claims to the next level, reducing their 
workload and hastening the completion of some of its work.
    VA would still be responsible for developing government held 
records and obtaining required physical examinations. However, the 
elimination of the 60 day waiting period should prove extremely 
helpful.
Require VA to encourage ready to rate cases
    Many VA regional office service center managers encourage veteran 
service organizations to bring them ``ready to rate'' cases. While this 
practice works well in some offices, it is rarely utilized in others. 
This practice encourages service officers to bring complete and ready 
to rate claims to a designated person who ensures that routine 
development is bypassed and claim adjudication is expedited.
    We believe that this practice should be encouraged since it reduces 
the workload on VA staff and ensures that the backlog is not 
unnecessarily increased. We recommend the creation of a nation-wide 
initiative which formalizes this practice.
    To ensure that this practice actually works, VA should require that 
regional office personnel, managers and veteran service officers are 
adequately trained to recognize a properly developed claim and 
understand that receipt of such a claim triggers actions which ensure 
prompt adjudication.
    We believe that VA should give no preferential treatment to any 
case which, upon review, is found not to be ready to rate. This is 
necessary to ensure that partially developed cases receive no 
preferential treatment, thereby slowing completion of claims already in 
process.
    However, one of the purposes of this program is to educate veteran 
service officers as to the evidence needed to produce a ready to rate 
case. We suggest that VA could do this by offering service officers an 
opportunity to complete development in a case found not ready to rate 
by telling them exactly what evidence is missing and giving them 10 
working days to produce it.
    The case could be considered ready to rate if the service officer 
is able to provide the necessary evidence. Failure to timely complete 
the claim would simply mean that the case would receive no preference 
and be worked under current procedures.
Informal claims
    An informal claim is any communication from a claimant indicating 
intent to apply for one or more benefits from VA. (38 C.F.R. 3.155) If 
no formal claim has been received, VA writes the claimant and describes 
what is necessary to submit a substantially complete claim. The 
claimant has one year from the date of the VA letter to submit a 
completed application (e.g., VA Form 21-526). However, VA establishes 
no control and takes no further action. If the requested information is 
received within the year, the date of receipt of the informal claim 
becomes the date of claim. If the information sought is received after 
the one year period expires, the date of claim is the date of receipt 
of the additional material.
    However, if a formal claim for benefits was previously received by 
VA, than an informal claim is considered simply a claim for benefits. 
(38 CFR 3.155(c); 3.160) In this case, VA establishes a computer 
control and begins the development required by the VCAA.
    This rule discourages knowledgeable claimants and advocates from 
submitting complete or ready to rate claims to VA. Any delay in 
submitting a claim to reopen or a claim for an increase could 
negatively effect the date of claim which is the date from which 
benefits, if granted, are payable.
    What we propose is that Congress change the law to allow the 
submission of an informal claim for the purpose of establishing an 
effective date. Under such a law, knowledgeable claimants and advocates 
could submit an informal claim at any time. VA would be required to 
acknowledge receipt of the claim and the claimant would be told what is 
necessary to perfect the claim. In this situation, the claimant would 
have a year in which to either submit evidence necessary to perfect 
his/her claim or request the assistance of VA to develop the claim. In 
the later situation, VA's duty to assist would be triggered and it 
would begin development required by the VCAA.
    However, this change allows knowledgeable claimants and advocates 
to relieve VA of the burden of developing every claim. To the extent 
that the claimant or advocate is successful in obtaining evidence, it 
lessens the workload on VA and hastens the claim through VA once it is 
received by VA.
    This suggestion, if adopted, will not necessarily lessen the amount 
of time it takes for an individual or advocate to develop the claim and 
the VA to reach a decision. However, it encourages certain claimants 
and advocates to undertake development prior to submitting a claim and 
to the extent that it reduces the workload on VA personnel it will 
allow all claims to move more swiftly through the process.
Artificial Intelligence
    In our view there is computer programming and ``artificial 
intelligence''. Nearly everything touted as ``artificial intelligence'' 
is really just computer programmers giving answers to a very large 
number of yes/no questions. There is, however, ample opportunity to use 
computers to decide certain evaluations based on established findings. 
Evaluations for service connected visual impairment or hearing loss, 
largely based on loss of visual acuity, fields of vision or decibel 
loss, could be easily assigned by computers. We encourage VA to utilize 
properly programmed computers to apply regulations to discrete data to 
arrive at concrete evaluations. This will allow rating specialists more 
time to work on decisions requiring judgment and experience.
All Electronic Record
    Currently the VA has several thousand all electronic claims files 
primarily located in the Winston-Salem regional office. These cases are 
largely Benefits Delivery at Discharge cases. It is our understanding 
that VA continues to process a number of these cases.
    These electronic claims files offer VA a unique opportunity to 
create a separate office to handle all electronic claims. We suggest 
creation of a completely separate office, rather than the continued 
integration of electronic claims processing into the everyday flow of 
work, because it provides VA with the opportunity to experiment and 
create an environment unencumbered by paper files. Imagine if you will, 
two Rating VSR's located in separate sections of a building reviewing 
the claims file and making decisions on different elements of a claim 
simultaneously. The efficiencies that such a system creates could be 
significant.
    VA rightfully believes that scanning its millions of existing files 
would be cost prohibitive. We agree. However, VA receives thousands of 
requests each year for copies of claims files. Right now, each file is 
photocopied and sent to the claimant. What we propose is that each 
office be equipped with scanners so that, instead of photocopying the 
file, it is scanned. The claimant still receives a paper copy of the 
file. At the same time, VA also has an electronic record. We suggest 
that this electronic file can be transferred to the office handling all 
electronic files. VA can experiment with the most appropriate work 
procedures at this office and, when it has grown sufficiently, a second 
office can be created.
    Eventually, most claims will be electronic and VA can then begin 
converting RO's into public contact offices.
    These suggestions, ideas and recommendations will not, in and of 
themselves, solve the backlog, timeliness and quality issues impacting 
VA today. However, if adoption of these and similar proposals each 
result in some improvement, we believe the cumulative effect will be 
sufficient to achieve reductions in workload and improvements in 
quality and service to veterans, their families and survivors.
    We appreciate the opportunity to present our views to you today and 
we welcome any questions you may have.

                                 
     Prepared Statement of John Roberts, National Service Director,
                        Wounded Warrior Project
    Mr. Chairman, Ranking Member Lamborn, distinguished Members of the 
Committee, thank you for the opportunity to testify before you today 
regarding the use of technology in the Department of Veterans Affairs 
claims process. My name is John Roberts, and I am the National Service 
Director for the Wounded Warrior Project (WWP), a non-profit, non-
partisan organization dedicated to assisting the men and women of the 
United States Armed Forces who have been injured during the current 
conflicts around the world. As a result of our direct, daily contact 
with these wounded warriors, we have a unique perspective on their 
needs and the obstacles they face as they attempt to transition and 
reintegrate into their communities.
    In addition to my experience with WWP, I am a service-connected 
veteran, a former veterans service officer, and was most recently a 
supervisor with the Houston VA Regional Office where I reviewed claims 
and became familiar with a number of significant deficiencies within 
the system.
    In the words of one of our Founding Fathers and Patriot, George 
Washington ``The willingness with which our young people are likely to 
serve in any war, no matter how justified, shall be directly 
proportional as to how they perceive the veterans of earlier wars were 
treated and appreciated by their Nation''.
    Clearly with a backlog of over 600,000 claims currently pending 
within the VA claims system, the perception of veterans of all 
generations is that we are not meeting that goal.
    As I mentioned in my previous testimony, the current model of the 
VBA claims processing system has a total of six separate teams and 
often, but not always, includes another team that is dedicated to 
processing only the OIF/OEF cases. The six separate teams handle the 
incoming evidence, maintain the outdated file cabinet system, develop 
all claims for service connected disability, conduct interviews, assign 
ratings, generate notification letters, and maintain all pending 
appeals submitted by the claimants.
    Files must be hand carried to each of the teams, and any member of 
these teams has access to the records at any given time. Obviously, 
this is time consuming, and if any documents are lost or misplaced, the 
burden then falls to the veteran to replace the missing evidence or 
claims.
    In order to increase efficiency and get compensation and benefits 
into the hands of our Nations veterans, WWP recommends the following 
steps:

    1.  Capitalize on advanced technology to replace the antiquated 
paper system currently being utilized. The Veterans Health 
Administration (VHA) has already moved to an electronic system, yet VBA 
is still dependent on a paper based system which results in the loss of 
vital medical evidence, folders and files. However, this process is 
likely to take time to implement and other measures must be implemented 
simultaneously.
    2.  The VA must use its current authority to award ``pre-
stabilization ratings'' to those who are injured. Under Title 38 the VA 
can already give a pre-stabilization rating while a final rating is 
developed. This step would get cash in the hands of our veterans 
quickly without having to first complete the entire ratings process. 
Unfortunately, this is a severely underutilized authority, resulting in 
delays of months or even years in compensation for injured veterans.
    3.  The VA must have a fully functional ratings board at the major 
Military Treatment Facilities. As the National Service Director for 
WWP, I travel the country visiting the military facilities that care 
for and treat the newest generation of combat wounded. On one visit to 
Camp Lejeune, I witnessed a one stop shopping system. VBA had in place 
a supervisor, Rating Veterans Service Representatives (RVSR) to rate 
the claims and Veterans Service Representatives to develop and finalize 
disability claims. To this end, VBA and the Department of Defense are 
currently working on a pilot program at Walter Reed enabling VBA to 
perform the task of rating the disabilities received during active duty 
for the servicemen pending medical board proceedings. This step will 
help to resolve the issue of claims files being sent across the country 
for processing and reduce waiting times and lost files and, if 
successful, should be replicated across the country as soon as 
possible.
    4.  Comply with the recommendation of the Veterans Disability 
Benefits Commission (VDBC) to incorporate medical expertise into the 
ratings process. By necessity, VA disability compensation claims are 
being rated by individuals who lack medical experience. As a result, if 
more explanation is needed on a particular exam, a further delay is 
created when the file is required to be sent back to the examiner for 
clarification. To remedy this situation, WWP agrees with the VDBC 
recommendation that ``VA raters should have ready access to qualified 
healthcare experts who can provide advice on medical and psychological 
issues that arise during the rating process (e.g., interpreting 
evidence or assessing the need for additional examinations or VA 
diagnostic tests).''
    5.  Allow the Regional Offices consistent access to files across 
the country. Currently, VBA allows only limited electronic access to 
VHA medical records in areas outside their jurisdiction. What this 
means that if a veteran received treatment in New York and now resides 
in California, the past method was to send a hard copy paper request to 
the VA Medical Center and wait for a response. Although there have been 
improvements by allowing limited personnel to have nationwide access, 
this is a situation that could be easily resolved by allowing more VBA 
personnel to have this access. The concept of one VA should not be 
limited to specific personnel.
    6.  Keep files within one ratings team. WWP is not advocating for 
the removal of the current CPI processing system. However, we are in 
favor of allowing Regional Offices the flexibility to adjust the 
current system in order to utilize the strengths of their employees to 
better serve the veterans waiting on a decision to their claim.
    7.  Collect statistics on partially finalized ratings as well as 
those files that are complete. Currently, RO's are ``graded,'' if you 
will, on the number of claims that are complete. Because cases can be 
extraordinarily complex, they take significant time to develop. 
However, parts of that file can be reviewed quickly. For example a 
claim that includes Post Traumatic Stress Disorder, a brain injury and 
an amputation is very complex, but the amputation itself can be rated 
quickly. If partial ratings were more widely awarded while the complete 
file is developed, again, the result would be compensation in the hands 
of our injured veterans.

    Finally, as we discuss and implement any changes to the system, it 
is important to remember that each of the 600,000 pending claims 
represents a veteran, a dependant or survivor and not just a file 
containing documents and medical evidence. Although changing the 
current system will be difficult and time consuming, it is imperative 
that this happen to ensure that past generations and future generations 
of veterans receive the highest quality of service this country can 
offer. The current system is not sufficient to carry the VA into the 
future and now is the time for bold initiatives that will serve for 
generations to come.
    Again, thank you for the opportunity to testify today, and I look 
forward to answering any questions you may have.

                                 
                 Prepared Statement of Michael Walcoff,
 Deputy Under Secretary for Benefits, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs
Mr. Chairman and members of the Subcommittee:
    Thank you for providing me the opportunity to appear before you 
today to discuss the Veterans Benefits Administration's (VBA) claims 
inventory and claims processing system. I am pleased to be accompanied 
by Ms. Diana Rubens, VBA's Associate Deputy Under Secretary for Field 
Operations and Mr. Brad Mayes, VBA's Director of Compensation and 
Pension Service.
    Today, my testimony will focus on two efforts we currently have in 
progress to improve claims processing: our aggressive hiring initiative 
and an independent study of the claims process conducted by IBM Global 
Business Services.
Inventory
    Before I begin discussing our efforts to improve claims processing, 
I would like to talk about our inventory and productivity. As of 
January 31, 2008, VBA's pending inventory was 397,077. There are 
numerous factors that contribute to that number, the two primary ones 
being the increase in the number of claims filed and the increased 
complexity of those claims. The number of veterans filing initial 
disability compensation claims and claims for increased benefits has 
increased every year since FY 2000. In FY07, we received a total of 
838,141 rating-related claims, compared to 578,773 in FY 2000, an 
increase of forty-five percent. This high level of claims activity is 
expected to continue over the next few years due to claims from 
Operation Iraqi Freedom and Operation Enduring Freedom veterans; the 
addition of type II diabetes as an Agent Orange presumptive disability; 
more beneficiaries on the rolls with resulting additional claims for 
increased benefits; and improved and expanded outreach to active-duty 
servicemembers, guard and reserve personnel, survivors, and veterans of 
earlier conflicts.
    VBA has maintained the inventory at the 400,000 level for the last 
year due, in large part, to the productivity of our employees. In fact, 
VBA is 21 percent more productive now compared to two years ago. If you 
look at the current fiscal year alone, production is already up almost 
13 percent compared to FY07. In FY08, we expect to make decisions on 
over 878,000 claims and in FY09, we expect that number to increase to 
over 942,000 claims. Our increased productivity will have a significant 
positive impact on our inventory.
    The term ``backlog'' is frequently used when discussing VBA 
inventory, but it is not universally understood. Oftentimes you will 
hear that VBA has a ``backlog'' of approximately 400,000 claims. As 
stated earlier, 397,077 is the current number of disability claims that 
are pending determination. This inventory includes all claims, whether 
pending a few days or a few months. ``Backlog'' is actually the current 
inventory minus the normal running inventory if we are meeting our 
timeliness goals. For example, in FY 2008, we expect to receive 854,000 
claims, or 71,000 claims per month. Achievement of our strategic target 
of 145 processing days would result in a consistent running inventory 
of approximately 339,000 claims at any given time. That means with an 
inventory of 400,000, 61,000 claims should be considered ``backlog.''
    VBA is continually seeking new ways to decrease the pending 
inventory of disability claims and shorten the time veterans must wait 
for decisions on their claims. Key to our success will be our ongoing 
longer term effort to enhance and upgrade our claims processing systems 
through integration of today's technology. In the near term, we have 
two initiatives that I would like to highlight here today.
Hiring Initiative and Training
    In FY 2007, we implemented an aggressive nationwide hiring 
initiative to provide more timely decisions. More than 1,800 new 
employees have been added since January 2007. VBA's hiring plan will 
add an unprecedented total of 3,100 additional employees by the end of 
this fiscal year. We are also conducting ongoing recruitment to replace 
staffing losses due to normal attrition.
    To enhance rapid integration into the claims production process, we 
modified our new employee training program to focus initial training on 
specific claims processing functions. This will allow new employees to 
become productive earlier in their training program and, at the same 
time, allow our more experienced employees to focus on the more complex 
and time-consuming claims. By more effectively utilizing both newly 
hired employees and experienced claims processors, we expect to reduce 
the pending claims inventory and improve claims processing timeliness 
in FY 2008.
Independent Study of the Claims Process
    Adding more decisionmakers is only one part of VBA's strategy to 
further improve claims processing. Throughout the last few years, VBA 
has implemented a variety of initiatives aimed at better managing the 
disability claims workload and improving benefits processing. Some of 
the initiatives include implementation of a consistent organizational 
structure across regional offices, establishment of an aggressive 
quality assurance program, centralization and standardization of 
training, and consolidation of specialized processing operations. VBA 
continues to develop new initiatives and strategies aimed at addressing 
the challenges posed by the number of claims received, the greater 
number of disabilities veterans now claim, the increasing complexity of 
the disabilities claimed, and the changes in law and processes.
    Because of the increasing and changing workload and workforce and 
VBA's desire to ensure the most effective methods of organizing work 
and maximizing resources are in place, we sought help from the private 
sector. In September 2007, VBA contracted with IBM Global Business 
Services to analyze our current business processes and provide 
recommendations to further improve our operational efficiency and 
consistency.
    From October 2007 through January 2008, IBM conducted a detailed 
review of the business processes involved with adjudicating a claim, 
beginning with application receipt and ending with notification to the 
claimant. To date, IBM has provided VBA with a gap analysis, which 
identifies the gaps between VBA's current process and IBM's envisioned 
process. The gap analysis also includes short-term and long-term 
recommendations to help VBA improve its processes. Overall, IBM's 
recommendations validate areas for efficiency gains already identified 
internally.
    Both the short-term and long-term recommendations made by IBM focus 
on the phases of the claims process and specific activities under VBA's 
control. The short-term recommendations are incremental enhancements 
VBA can make to the existing business processes to realize benefits in 
efficiency and productivity in the near term. Because our current 
claims process is heavily reliant on paper and the movement of paper 
claims folders, the greatest efficiencies will be gained as a result of 
IBM's longer term recommendations to move to an electronic, paperless 
environment.
Recommendations
    Managing workflow, monitoring performance, and tracking the number 
of claims processed are critical to maintaining processing 
efficiencies. The average number of medical disabilities or conditions 
claimed on original applications is increasing. To further enhance our 
ability to monitor performance, the study team recommends the creation 
of a performance measurement system focused on tracking the number of 
medical disabilities or issues claimed. IBM believes that this issue-
based performance measurement system, in conjunction with the existing 
claim-based performance measurement system, will result in a more 
accurate and detailed measure of productivity and workload. Under the 
current claim-based performance measurement system, a regional office 
is given the same credit for completing a claim with one issue as a 
claim with forty issues. The study team believes that measuring work 
output by both number of claims and number of issues at an 
organizational level is a more accurate assessment of a regional 
office's productivity. In addition, an issue-based performance 
measurement at an individual level will provide more specificity in the 
activities of staff and result in increased accountability overall.
    VBA agrees with the idea of adding an issue-based performance 
measurement system to our current reporting structure. This system will 
provide us with a better understanding of our workload and 
productivity. However, VBA must ensure that our claims processors stay 
veteran-focused. Consequently, we must continue to pay benefits on 
specific issues as soon as possible, but remain cognizant that a claim 
is not complete until all issues have been resolved.
    When analyzing our claims process, the study team noted that a 
bottleneck occurs during the time VBA waits for a response to our 
Veterans Claims Assistance Act (VCAA) letter. Upon receipt of a claim 
for benefits, claims processors must carefully analyze all issues 
claimed and determine what evidence is necessary to substantiate the 
claim. Under VCAA, claims processors must also provide a letter to the 
claimant detailing the evidence required and which party (VA or the 
claimant) is responsible for obtaining the evidence. Under statute (38 
U.S.C. 5103), claimants have one year from the date of the VCAA 
notification to submit any requested evidence. However, VA may make a 
decision on the claim prior to the one-year expiration. Current VBA 
procedures allow 60 days for a claimant to respond to a request for 
evidence before VBA makes a decision.
    To help streamline this evidence-gathering process, IBM recommends 
we simplify the VCAA letter and also reduce the evidence-gathering time 
period from 60 days to 30 days. The current VCAA letters are lengthy 
and contain complex legal language that many claimants find difficult 
to understand. Additionally, the VCAA letters include a waiver that 
allows the claimants to certify that they have no additional evidence 
and waive the 60-day evidence-gathering time period. IBM believes that 
if the letter were simpler to understand, the likelihood of a veteran 
responding to the VCAA letter with either additional evidence or waiver 
of the 60 day period would increase.
    VBA agrees that a simplified VCAA letter will reduce confusion and 
misunderstanding by the veteran. In fact, VBA is currently working 
closely with the VA's Office General Counsel to revise and simplify the 
letter. However, we must ensure that any new language also meets legal 
requirements. We anticipate these revisions will be completed by August 
2008. VBA has also considered a reduced time period for evidence 
gathering and agree that it would have measurable results in improving 
claims processing timeliness.
    To achieve large-scale improvements in efficiency and productivity, 
however, VBA must make a fundamental shift in how we process 
compensation and pension claims. All of the study's long-term 
recommendations focus on information technology enhancements that will 
allow VBA to move into a paperless environment. Where work can be 
managed electronically and automation can reduce manual activities 
freeing up resources for more value-added decisionmaking. Eliminating 
manual processes is also necessary to greatly improve VBA's timeliness. 
IBM believes that one of the critical first steps for VBA to transition 
is to enhance the current Veterans Online Application (VONAPP).
    Because VONAPP is not integrated with our IT systems, claims 
processors must manually enter data provided in the online applications 
into our claims processing systems. Additionally, VBA does not 
currently have the capability or the authority to use e-signature and 
e-authentication. With these two features, claimants would no longer 
have to submit a ``wet'' signature in addition to their online 
application before benefits can be paid. Once e-signature and e-
authentication elements are in place, VBA can create direct data feeds 
into our IT applications, thereby streamlining the data entry process.
    Enhancing VONAPP is a critical step in moving to a paperless 
environment. VBA is currently coordinating with VA's Office of 
Information and Technology to resolve all data privacy and security 
concerns. In addition, we are working through VA's Office of General 
Counsel to resolve any regulatory issues regarding the need for a 
``wet'' signature. Following approval and verification of security, 
implementation is expected to begin in FY 2009.
    Another key element in a paperless environment is electronic 
workflow management, which would reduce our reliance on the physical 
movement of a claims folder to trigger the next step in the claims 
process. Work would automatically flow between claims processors as 
each activity is completed. Management would be able to allocate 
resources electronically based on individuals' workloads and available 
hours. Additionally, claims processing work would no longer be limited 
to a specific regional office. Work could be transferred 
instantaneously to any one of our regional offices, allowing for 
improved balance of our workload and increased utilization of resources 
nationwide.
    Electronic workload management will only be successful if completed 
in conjunction with an electronic content management system (ECM). The 
disability claims process is very paper-based and requires a vast 
amount of space to store all of the associated documentation. In the 
study team's envisioned paperless environment, ECM is integrated with 
business applications via an Electronic Folder (eFolder). The ECM 
system would pull relevant data from the corporate database to populate 
the eFolder. The biggest challenge and expense for VBA to convert to 
electronic content management is the scanning of paper records.
    VBA has initiated two pilot efforts to test our ability to shift to 
a paperless environment and to test the utility of imaging technology. 
The Virtual VA application is being used for both pilot programs. 
Through the pilot programs, we continue to refine our business 
processes and identify necessary enhancements that will allow us to 
expand the use of imaging technology. We are also leveraging the 
lessons learned and the imaging accomplishments in our Insurance, 
Education, and Loan Guaranty programs.
    As VBA transitions to paperless processing, claimants' access to 
information will expand. The study team recommends the creation of a 
secure web portal so that claimants can access claim information and 
request transactions online. Currently, claimants may check the status 
of their claim by calling the toll-free number, by visiting a regional 
office, or through their veterans service organization.
    The study team believes that creation of a secure web portal will 
reduce telephone call volume, improve claim processing transparency, 
and increase claimant knowledge of the claims process. In addition to 
claim status, the team recommended the secure web portal contain 
functionality to allow online claim submission with e-signature, 
updates to contact information, review of prior and current benefits, 
online help, and frequently asked questions.
    VBA has a secure web portal called the Veterans Information Portal 
(VIP). The primary external users of VIP are lenders and appraisers who 
are assisting veterans in the Loan Guaranty Program. Through VIP, 
external users can access web-enabled computer applications. Currently, 
there are no disability compensation business applications available to 
external users through VIP, but efforts are underway as the President's 
Commission on Care for America's Returning Wounded Warriors also 
recommended that VA and DoD develop an interactive web portal.
Conclusion
    We believe that the independent study by IBM validates our current 
course of action to improve claims processing timeliness, particularly 
with regard to information technology. Despite ongoing challenges, VBA 
continues to develop new strategies to improve claims processing and 
reduce the time veterans must wait for decisions.
    Mr. Chairman, this concludes my testimony. I will be happy to 
respond to any questions that you or other members of the Subcommittee 
have.

                                 
                Statement of Linda J. Bilmes, Professor,
    Kennedy School of Government, Harvard University, Cambridge, MA
    Thank you for inviting me to testify before this Committee today. I 
am Professor Linda Bilmes, lecturer in public policy, at the Kennedy 
School of Government at Harvard University. This year I have given 
testimony regarding veterans issues on three previous occasions: on 
October 24, 2007 (before the House Committee on the Budget); on May 23, 
2007, before the House Veterans Affairs Committee Claims Roundtable; 
and on March 13th, 2007 before this Subcommittee. I would like to enter 
copies of all three of these previous statements into the record.
    Today I will discuss some of my recent research and resulting 
recommendations on how to improve the disability claim process. The 
purpose of these recommendations is to: (a) reduce the backlog of 
pending disability claims; (b) process new claims more quickly; and (c) 
to reduce the rate of error and inconsistency among claims.
    I will very quickly review the context of this discussion, which I 
am sure is familiar to members of this subcommittee. First, the 
Veterans Benefits Administration (VBA) currently has a backlog of 
400,000 pending claims and another 200,000 claims that are somewhere in 
the adjudication process. This backlog has nearly doubled since 2001. 
Second, VBA expects to receive an additional 800,000 to 1,000,000 new 
claims during the next year. To date, 230,000 veterans from the Iraq 
and Afghanistan conflicts have filed claims, but the majority of claims 
for that conflict have yet to be submitted. My own projections, based 
on estimates from the first Gulf War, predict that a total of 791,000 
veterans from the Iraq/Afghan wars will eventually seek disability 
benefits. However, many veterans' organizations have suggested that my 
estimates are too conservative, considering the length of deployment 
and the number of 2nd and 3rd deployments into this theatre. It may 
well be that the number of eventual claims is far higher.
    Third, the VBA currently requires an average of 6 months to process 
a claim. Fourth, for a variety of reasons that I will address in a 
minute, there is a high level of variation in outcomes in different 
regions. This undoubtedly contributes to the fact that veterans appeal 
some 12-14% of decisions. These claims then take an average of 2 years 
to resolve, and consume a disproportionate amount of staff time and 
attention from the VBA during the protracted period.
    The solutions that have generally been put forward until now fall 
into what I call the ``typically governmental'' trap of throwing more 
people, money and overall resources at the issue without doing the 
restructuring work that is needed to fix the root of the problem. VBA 
may need more resources--but not simply to ``do the wrong thing'' 
faster; but rather to change direction and to ``do the thing right''. 
This will require VBA to simplify its process, to change the way 
initial claims are developed, and to shift presumption more in favor of 
the veteran.
    One way to analyze this is to compare the process for handling 
medical claims used by the medical insurance industry to the process 
used in the VBA. The medical insurance industry handles 30 million 
claims per year, and pays 98% of them within 60 days. The process is 
very simple. After the patient receives a medical service from the 
provider, the provider prepares and submits a claim to the insurance 
company, usually within 30 days. The insurer then pays, denies or pends 
the claim, in 57% of cases within 7 days, and in 98% of cases within 30 
days. Therefore the overwhelming majority of medical providers are 
reimbursed within 69 days. When the insurer ``pends'' a questionable 
claim, the process takes an additional 10 days, during which the 
insurer typically contacts the provider by e-mail or telephone. In 3% 
of denied cases the provider or the patient appeals the decision. Most 
appeals are resolved within 30 days. Many medical insurers also perform 
a random audit of a small number of claims.
    A diagram of the basic process flow is shown as Chart 1.
        Chart 1--Private Sector Health Insurance Claims Process

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    There are several characteristics of the private medical insurance 
claim process that enable it to be highly efficient. First, the claim 
is prepared by a healthcare provider--not the patient. Hospitals and 
physician practices employ staff who have experience in preparing such 
claims. The ``claim'' typically consists of a short form (2-3 pages), 
attached to diagnostic reports. Therefore the vast majority of claims 
that are submitted for payment to the insurance company are ``clean 
claims''. This is, of course, a major point of difference from the VBA 
system, where veterans prepare their own claims to a large extent, and 
may obtain advice from state and local governments, VSOs, VBA 
officials, websites family or friends. The result is that a high 
proportion of the initial claims submitted by veterans are not 
``clean'', so a great deal of the delay is caused by the need to get 
the form filled out properly, with the required documentation. This is 
particularly complicated when the veteran has received treatment from 
multiple providers (for example, been treated at Landstuhl, Walter 
Reed, and VA medical clinics).
    Second, it is important to note that most states require by law 
that the medical insurance industry pay the providers within 30-60 days 
of receiving the claim--with financial penalties for non-compliance. In 
the VBA, there is no ``penalty'' for delays.
    Third, the claims process described above is generally for a single 
patient transaction, such as a doctor visit, hospital procedure or 
diagnostic test. So from the perspective of the healthcare provider, 
the consequences of overpaying are limited. The insurer can tradeoff 
between the possibility of overpaying for an x-ray (or reimbursing the 
doctor for an x-ray that was not really necessary) vs. the 
alternative--a protracted wrangle over a small claim. It is not in the 
financial interest of medical insurers to contest any but the largest, 
most obviously flawed claims.
    By contrast the VBA process is dealing not with short one-off 
transactions but with making a decision on service-connectivity that 
may affect the lifetime of benefits for a veteran. Thus it is 
instructive to examine how the private medical insurers handle claims 
for long-term chronic care, nursing home care, long-term rehabilitation 
and other claims which require outlays over a long stretch of time. 
Surprisingly, the system for deciding such claims is similar to the one 
used for small ticket items. Some insurance companies will require a 
higher standard of evidence for long-term care (such as the opinion of 
2 specialists), but the actual process is the same.
    Accordingly, the medical insurance industry uses the same 
philosophical approach to claims processing that the IRS uses for 
taxes: it handles most transactions with minimal processing, and 
investigates (audits) a small subset of the total, focusing on large or 
unusual claims. The expectation is that the majority of claims received 
are approximately correct, because making them perfect would cause 
unacceptable delays in reimbursing medical providers.
    The VBA system is based on a different philosophy, which is to 
require the veteran to produce detailed medical documentation for every 
disabling condition he or she claims. Many VBA employees work hard to 
assist the veteran in putting together the package--but the underlying 
idea is still that the veteran needs to compile a dossier to prove that 
his medical problems stem from his military service. The process is 
more akin to a student applying to college, who is required to assemble 
a whole package of materials before his application is even considered.
    The VBA process is also structured to be cumbersome and 
inefficient. (See Chart 2). It involves applying to one of 57 regional 
offices, where a number of different staff members handle the claim, in 
terms of reviewing it, requesting additional documentation, checking 
that documentation, sending out formal notifications to the veteran of 
the status of his application, consolidating and evaluating the 
evidence from many different sources, and ultimately making a decision 
whether a veteran's health problems are service-connected or not, and 
assigning a percentage rating.
                      Chart 2--VBA Claims Process

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    It is not surprising, given that thousands of veterans with no 
experience in filing claims are doing the initial claims, and the 
complexity of the 26-page form, that most claims require a substantial 
work-up at the regional office. Most of the elapsed time in the 6-month 
process is spent trying to prepare a ``clean'' claim that the VBA can 
adjudicate.
    VBA has developed a large and bureaucratic structure for handling 
these claims. (See Chart 3)
               Chart 3--VBA Structure for Claims Approval

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    It is also not surprising, given this process, that the regional 
offices produce highly varying, inconsistent results. The recent 
National Institute of Medicine study found significant variance in 
processing time, compensation, and appeal rates. (See Chart 4) A number 
of GAO reports have reached the same conclusion.

                             Chart 4--NIM Study Inconsistencies Identified (sample)
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Days to process claim                                                       99 (Salt Lake City)  277 (Honolulu)
----------------------------------------------------------------------------------------------------------------
Percent of veterans receiving compensation                                       6.9%                     19.2%
----------------------------------------------------------------------------------------------------------------
Average compensation                                                $7,000 (Illinois)      $12,000 (New Mexico)
----------------------------------------------------------------------------------------------------------------
Percent Individually unemployable                                       Maryland 3.3%          New Mexico 20.1%
----------------------------------------------------------------------------------------------------------------
Number of claims appealed                                                         22%      65% (highest region)
----------------------------------------------------------------------------------------------------------------


Proposals for Reform
    The question is: considering that veterans returning from Iraq and 
Afghanistan have already served at least 15 months in the field, with 
35% of them having served two or more tours of duty, would it not make 
more sense to simply accept their word that any medical problems 
detected at discharge are a result of their service? Additionally, 
since 90% of disability compensation claims are ultimately approved by 
VBA (following this protracted process), at least in part, would it not 
make sense to follow the private sector model and to automatically 
approve a standard minimum benefit within 30 days?
    However, to implement this kind of common sense approach would 
require certain changes in the structure of the claims process. First, 
every veteran must have an exit medical examination at (or prior to) 
discharge. Any medical problems (physical or mental) identified at that 
examination should then be automatically assumed to be service-related. 
The system from that point should mirror the private system. The VBA 
needs to work with VHA to create a one-step online system for the 
medical provider to record findings from this clinical evaluation, and 
personnel need to be provided and trained to enter this information 
into the centralized system.
    Veterans returning from a war zone should then be automatically 
entitled to receive a base level of benefits corresponding to the 
clinical evidence. Current benefits scales should be revised and 
simplified to provide for four common sense categories: not disabled; 
mild, moderate and severe disability. The healthcare provider who 
evaluates the veteran should make this initial assessment.
    All returning veterans should be presumed to have acquired the 
medical conditions during military service. This should be provided 
within 30 days.
    This system should be designed to provide basic benefits for a 
period of two years only. Within that time, veterans with serious 
injuries should be fast tracked to a full evaluation of benefits. All 
other veterans should have a choice of whether their cases need to be 
re-examined or not. If veterans disability rating is adjusted downward 
during a subsequent evaluation; their monthly stipend should be lowered 
accordingly, but they should not be liable to repay their excess 
benefit. However if the benefit is found to be too low, they should be 
eligible for retroactive pay. In addition, the VBA should audit a 
sample of cases in order to deter fraud.
    Clearly there are many implications of restructuring the claims 
system along these lines, including a partial retraining and 
redeployment of claims analysts, and a possible reorganization of the 
regional offices. But I believe that moving in this direction would 
dramatically simplify the process, lower the rate of inconsistency, and 
most importantly enable returning veterans to be compensated for 
disabilities quickly and without much bureaucracy.

                                 
              Statement of Master Sergeant Kurt Priessman,
                        USAF (Ret.), Vernon, TX
    Discussion and recommendations from Veterans and Widows on the 
subject discussed by the VAC Subcommittee in expediting claims:
    Veterans need help now before we all die, not after continued 
promises of implementation of electronic medical records using 
extremely difficult interfaces, artificial intelligence with query 
language too few are able to utilize, and often delayed progress 
stretching into not months but years. The Department of Veterans 
Affairs has done nothing to correct this problem, and continues to 
promulgate anti-Veteran rules to delay, stall, and deny while it fights 
Court cases, which rather than reduce claims has exacerbated the 
backlog. The Courts gave the Department wide latitude to stay Haas, 
which it has thoroughly abused. Congress must take bold action NOW to 
mandate ways to catch up.
    Congress can help to substantially reduce this backlog by mandating 
the following:
Claim Triage Process
    A civilian fellow with Veterans Affairs (VA) experience recently 
testified before your subcommittee, and concluded that simple claims 
should not be part of the complex process that is time consuming and 
creates delays in presumptive approval that at most require a brief 
evaluation and decision.
    Triage should be performed on all claims. Any presumptive disease 
claims should go to a team that only does presumptive disorders. This 
requires the verification of ``three data points'' only, with emphasis 
on giving the ``Congressional mandated'' benefit of the doubt 
concerning presumption, service connection, and precedence to establish 
compensation rates.
    Examples: Stage four presumptive cancers are automatically 100% by 
VA rating rules. The Veteran is either going to die or is going to seek 
treatment for the cancers. Cancer treatment alone is enough to disable 
someone from working.
    In some disorders such as presumed diabetes, it is not the level of 
created disability but the level of treatment that is required to 
determine the disability rating. Only the verification of data is 
required with no C&P. In this case, the validation of four data points 
and the level of treatment are required. Obvious secondary conditions 
from the records could be included if there is a straightforward 
connection to the primary disability. C&Ps to determine levels of 
disability and other more complicated residuals can then be 
accomplished and compensated based on the results. Getting the Veteran 
and his family the needed financial support in a timely manner should 
be the most important aspect. This also entitles the Veteran to many 
benefits from their respective States that is continually being 
delayed.
    This process also would allow those claims that are contentious to 
get the full attention, fact-finding, and ``speed of resolution'' they 
deserve, also contributing to the reduction in the backlog of claims.
    Congress must not allow the Department of Veterans Affairs special 
legal privileges. Congress must hold the Department to the same legal 
standards non-governmental entities and citizens are. The Department 
ignores evidence presented by Veterans as unverified, impugns the 
veracity of honorable Veterans, calls every case unique by denying case 
precedence, and refuses to assist Veterans in accordance with law.
    If the Court of Circuit Appeals honors a Veteran's statement in 
support of a claim that he loaded herbicides in Udorn, or similarly a 
declassified report or other evidence confirms use, and the claim is 
awarded, then the Department must approve all claims for Udorn for 
similar circumstances. Each case is not unique. It makes no sense to 
have two Veterans serving side by side to have dissimilar results with 
one claim approved and the other denied for the same disorder within 
the adjudication and BVA justice system. Congress provided 
administrative adjudication powers to a department of the Executive 
Branch, not authority to act with judicial prejudice. The triage 
process looks at similar periods of service, military occupations, duty 
stations, diseases, Court decisions and then rules in favor of the 
Veteran. The data fields necessary to search like citations and 
decisions already exist.
    Example: Esophageal cancers are very prevalent in Vietnam Veterans 
with herbicide exposures, yet the Department ``of Veterans Affairs 
denies esophageal cancers as a presumptive disorder, and then is 
overruled by BVA and CAVC. These claims take years.
    Once the BVA or CAVC has approved the claim for one, then all such 
like claims should be approved. Through use of ``artificial 
intelligence,'' the Department can create rule-based criteria for all 
esophageal cancers. The rules then approve claims for widows and 
Veterans based on legal precedence and not necessarily subjective nexus 
with herbicides, particularly when data outside the DVA and IOM 
indicates this should be presumptive to tactical herbicides. We do not 
need to prosecute the same case 100,000 times rather than define 
approval criteria and approve the same 100,000 cases.
    Congress must mandate that cases with decisions overturned by the 
BVA and the Court of Appeals for Veterans Claims (CAVC) set legal 
precedence and the Department of Veterans Affairs must decide favorably 
in like cases.
    Congress must mandate that spouses and families of Veterans who die 
prior to adjudication of their claims are legally and legitimately no 
different from the deceased Veteran and the Veteran's claim is ``in 
perpetuity'' until settled. There is no other system in the world that 
treats the legal rights of the claimant's descendents as different from 
the claimant. At the DVA if the Veteran dies before his claim is 
approved, the claim is then dead as well. This is a direct conflict of 
interest and leads to a bias not to perform in a timely manner. The 
widow then must reenter the claim again and submit for DIC, a process 
that creates catastrophic financial hardship of potentially many years 
for what should be a simple validation of beneficiary information and 
the immediate prioritization to ``the head of the line'' for deciding 
the claim.
    These suggestions should result in the reduction of massive numbers 
of claims, associated costs, and delays of six to eighteen months or 
longer which cause financial hardship on the Veteran and his family or 
widow for presumptive disorders and like-claims. The Department of 
Veterans Affairs should approve these claims through a brief evaluation 
and decision process. Additionally, there is little risk of abuse as 
these changes are in accordance with law as established by Congress, 
and the Courts.
    To further reduce claims backlog Congress should amend the law for 
Veterans who served in the toxic chemical swill on the Korean DMZ. 
Congress identified the period from 1967 to 1971 for civilian 
contractors that worked ``on or near the Korean DMZ'' with presumptive 
disorders while the DoD and DVA only recognize a short period of time 
for spraying, which nullifies and discounts the laws of chemistry and 
the half-life of dioxins. This span is nearly four times that of the 
span for Veterans. We find this total disparity between Civilian versus 
Veterans an injustice and an unjustifiable issue. The DVA must stop 
denying those claims, and accept them as compensable.
    A group of 14 engineers that served along the Korean DMZ petitioned 
Congress and indicated they sprayed this toxic swill from 1967 to 1971 
on the DMZ and at Camp Casey. Many of these engineers have the same 
presumptive disorders already established for herbicide association and 
in some cases, there are two automatic presumptive cancer disorders 
leaving the DMZ with a diagnosis of pustular acne, a hallmark of dioxin 
exposures. Yet, the VA still denies claims based upon the denial of the 
laws of chemistry and the very narrow inclusive dates of which Congress 
itself is in disagreement with regarding civilian contractors.
    Many Korean DMZ and herbicide sprayings claims from documented 
locations should be presumptive and not held and denied for nefarious 
reasons and then appealed just creating more and more backlog. It is 
imperative that Congress remembers that our own government causes most 
of the mortality and morbidity issues.
    Congress must mandate the same inclusive dates that it has 
established for civilians and the inclusive dates our Veterans and 
declassified DoD documents indicate herbicide spraying occurred. The 
DVA must reverse and approve denied claims based only on erroneous DoD 
inclusive dates.
    Congress must mandate immediate release and inclusion of locations 
documented and released to the public rather than permitting the 
Departments, who are in possession of them, not to acknowledge them and 
update the list maintained by the DVA.
    Next, there is the Blue Water Navy exposure issue. Congress must 
get involved in this issue before all these seamen are dead and the DVA 
denies their widows DIC payments.
    Congress leaves the Veterans and their expert witnesses no forum 
from which to present their own scientific and medical evidence. 
Congress must make this decision and not abdicate its authority to the 
DOD, DVA, or IOM, who cannot deny conflicts of interest and insertion 
of biases into final reports. Many Veterans would welcome the 
opportunity to debate the IOM and DVA in the halls of Congress 
utilizing some common sense and scientific data but Congress has not 
afforded Veterans that opportunity. Congress must include in 
legislation the formation of a Veteran/Citizen's Committee that reports 
these conflicts of interest and recommends resolution in favor of 
Veterans to the Congress for issues previously presented only by the 
DVA and the contracted IOM, both of whom have numerous conflicts of 
interest, as does the DOD.
    If the Congress implements all of these recommendations, there 
would not be delays of years to reduce the backlog of claims. These 
risk associated with the validity of these recommendations is 
negligible. Congress and the Nation can be certain that Veterans are 
asking only for earned benefits and promises kept.
    Many scientists as well as Veterans believe that the way dioxins 
work in the body's cells, any cancer or immune system dysfunction is an 
expected outcome. The data is there in many studies including, the 
opinion of a sitting member of Congress, a medical doctor, who under 
oath, has concluded before the BVA that esophageal cancers are 
associated.
    Our personal beliefs, based on scientific data and biological 
plausibility is that all cancers, endocrine and immune system 
disturbances in homoeostasis are associated with herbicides. A 
quantitative risk analysis based on the top four-dioxin studies results 
in the SMR delta for all cancers and specific cancers as very slight. 
Additionally, the Ranch Hand Study, the government's gold standard used 
in denial, now admits it missed a twofold increase in all cancers after 
spending $140 million dollars, which was ignored by the Air Force 
chairperson.
    We have estimated a reduction of at least 200,000 claims within 6 
months by using ``artificial intelligence'' from BV NCA VC databases 
and the recommend changes noted herein. Congress provided the 
Department of Veterans Affairs funding already that doubled the number 
of employees in the Veterans Court and the result has been a 50% 
reduction in claims output, obviously a poor investment.
    The time for Congressional action is NOW. We respectfully request 
you include these suggestions in new legislation, or at worst in the 
Department of Veterans Affairs 2009 Budget Request.

            Thank you in advance,

Kurt Priessman, MSgt, USAF (Ret), B.A., M.B.A.
The Bottom Line http://tmai18.spaces.live.com
U-Tapao RTNAB, 71-72
Korat RTAFB, 72-73
Kadena AB, Okinawa, Japan 73-76
Kunsan AB, Korea 77-78
Clark AB, 78
Taegu AB, 78-80
Author: Herbicides Use in (The Relationship to the ROE and Use in and)

                               __________
Proud Father of SSgt Michael G. Priessman, USAF
Kuwait 93-94
Bahrain 95-96
Korea 03-04
Kyrgyzstan 04-05
Kadena 04-06
Baghdad 06

    (1) Grassroots Veterans, widows, and Veterans organizations now 
question the Congressional wisdom of placing veteran judicial functions 
under the direct control of our Executive Branch of Government. There 
is a groundswell of veterans that believe individuals in the government 
should be held criminally liable for their decisions and efforts to 
hide the truth. The impact of class action suits to overturn the Feres 
Doctrine and potential Rico Act suits will deluge the Courts of Appeals 
of the Federal Circuit if action is not taken.
    (2) The Executive Branch judiciary function has taken liberty to 
freely weight evidence and scientific facts in its own behalf. The 
Executive Branch in the performance of judiciary functions pronounces 
before the claimants case is brought what is and what is not valid, 
accepts invalid Executive Branch controlled studies with flawed results 
from which to base administrative and judicial decisions. Veterans 
believe these studies are invalid based on federal departmental and 
agency influence and directions not to associate mortality and 
morbidity damages to Veterans and their offspring for government 
causations. Veterans also believe that the continuing mortality and 
morbidity rates are caused by the Departments of Defense and Veterans 
Affairs, both part of the Executive Branch.
    (3) Our beliefs are based on the common sense notion that it is 
nonsensical to provide the Executive Branch a process where judicial 
decisions permit the same branch of government to adjudicate and rule 
in its own favor when they are the defendants. With the usage of the 
Feres Doctrine and the processes described, there can be no doubt in 
the proliferation of collusion rather than the prosecution of the 
government for collusion.

                                 
                    Wounded Vets Face Broken System
                         CQ WEEKLY--COVER STORY
                       April 30, 2007--Page 1256
              By Patrick Yoest and Rebecca Adams, CQ Staff
    The downtown Washington offices of Disabled American Veterans 
hummed with activity on a recent weekday as four staff counselors 
helped ex-servicemembers navigate the bureaucracy of the Department of 
Veterans Affairs.
    James Mack, a stern-looking veteran of the first Gulf War, welcomed 
recent returnees from the conflicts in Iraq and Afghanistan by handing 
them copies of VA Form 21-526--a two-sided, 13-page application for 
benefits--then tearing out the first four pages of fine-print 
instructions.
    ``For folks who just want to know what they're entitled to, that's 
a little bit too much information,'' said Mack, who patiently guided 
some veterans through questions about service-related injuries and the 
care they received, and signed others up for a biweekly class on 
veterans' benefits that he teaches Monday nights. It is fully 
subscribed until July.
    Elsewhere in the office, workers tracked the progress of hundreds 
of appeals filed by veterans in response to VA denials, stepping around 
piles of inch-thick files detailing the particulars of each case that 
threatened to inundate their cubicles. Phones constantly rang with big 
and small requests. One frantic ex-servicemember could not find the 
room in VA headquarters where he was supposed to participate in a 
teleconference about his appeal. By the time Mack sorted out the matter 
and provided directions, the hearing had been postponed. Mack then 
spent an hour rescheduling the hearing and briefing the veteran on what 
to expect.

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    FILING CLAIMS: Adam Kave, 23, who was discharged from the Air Force 
after serving in Iraq, Kuwait and Uzbekistan, recently sought help from 
the Disabled American Veterans to file a claim for VA compensation for 
a personality disorder.
    (CQ PHOTOS / SCOTT J. FERRELL)

    Disabled veterans of the Iraq War already have braved insurgent 
attacks and the threat of improvised explosive devices. But few are 
prepared for the nerve-wracking experience of dealing with the VA 
system. The government is trying to hack away at a backlog of more than 
405,500 disability claims while marshaling more injured soldiers 
through its bureaucracy. It now takes an average of 177 days for a 
disabled soldier to get a VA claim processed--nearly double the 89.5-
day wait civilians face in a private health-insurance system widely 
acknowledged to be underperforming. And with recent revelations about 
neglect of care at the Army's flagship Walter Reed Medical Center, the 
political pressure is mounting for the government to improve its 
performance.
    But there aren't many signs that the crush is dissipating at 
critical junctures like the Disabled American Veterans office and 
similar facilities run by nearly a dozen veterans' service groups. 
Academic experts and veterans' advocates say the VA is facing 
unprecedented stresses due to the conflicts in Iraq and Afghanistan and 
is ill-equipped to handle an influx of returning soldiers that would 
come from any troop withdrawal in Iraq.
    Beyond the paperwork hassles and delays, there are serious gaps in 
medical care, especially for treating Traumatic Brain Injuries and 
psychological problems that have arisen from extended deployments and 
stressful ground warfare, according to health professionals and 
veterans' groups.
    ``We have not paid careful enough attention, or devoted sufficient 
resources, to planning for how to take care of these men and women who 
have served the nation,'' said Linda Bilmes, a lecturer in public 
policy at Harvard University's John F. Kennedy School of Government who 
has studied the long-term costs of caring for veterans.
    Congress, rattled by the problems at Walter Reed and public concern 
over returning servicemembers, is pledging to spend considerably more 
on veterans' programs. The House's 2008 budget resolution would 
increase the budget for VA healthcare and claims processing by $6.6 
billion over 2007 levels. Congress in February included $3.6 billion 
for veterans' programs in a budget package to fund much of the 
government for the remainder of the fiscal year. A supplemental 
spending bill cleared April 26 would give the department $1.8 billion 
more.
    But experts such as Bilmes warn that the extra money will do little 
good unless Congress and the VA fix deep-rooted problems in the way the 
government processes disability claims, screens veterans for health 
problems and handles appeals for denied benefits. These problems will 
loom over Congress for the rest of the session as the House and Senate 
debate the direction of the war and how to provide for what a 
bipartisan majority have come to call ``wounded warriors.''
    ``All of the things we're seeing--the problems at Walter Reed, 
people getting lost in the process--can all relate back to the fact 
that the VA and the Department of Defense did not plan for a long war 
and the impacts of that,'' said Democratic Senator Patty Murray of 
Washington, a member of the chamber's Veterans' Affairs Committee and 
the Appropriations subcommittee that oversees the VA. ``If I was 
sitting in the VA, I'd be in the president's face all the time, saying 
we have to deal with these huge issues and I want resources to educate 
people.''
    The Bush administration says it is addressing the most serious 
concerns. An interagency task force headed by VA Secretary Jim 
Nicholson released recommendations April 24 that include adding case 
managers to help guide troops and their families through the system and 
improving the process for handing off medical records when an active-
duty soldier is discharged and enters the VA's network.
    ``The federal government must be responsive and efficient in 
delivering our benefits and services to these heroes,'' Nicholson said 
in announcing the recommendations. ``They should not have to fight 
bureaucratic red tape for benefits earned by their courageous 
service.''
    Some of the problems are due to the unique nature of the Iraq and 
Afghanistan conflicts. Better battlefield care has allowed more 
servicemembers to survive roadside bombs, suicide attacks, rocket-
propelled grenades and other incidents that probably would have killed 
soldiers in past conflicts. But many are returning home with 
complicated, sometimes catastrophic wounds that require much more 
elaborate treatment and rehabilitation.
    The government has not prepared itself for such demands. Harvard's 
Bilmes notes that while the VA has steadfastly maintained that it can 
cope, the agency ran out of money to provide health care for the past 
two years and had to submit emergency budget requests to Congress for 
$2 billion in fiscal 2006 and $1 billion in 2005. A Government 
Accountability Office analysis of the shortfalls concluded that the VA 
was basing its cost projections on 2002 data that was generated before 
the war in Iraq began.
Flawed Claims Process
    The concern about the VA goes beyond just how it calculates costs 
to how efficiently it provides veterans with their benefits. Experts 
are particularly worried about the claims process that returning 
soldiers must confront to qualify for disability payments--a system 
that has been widely criticized for delays and excessive bureaucracy.
    Servicemembers file claims in one of 57 regional offices belonging 
to the Veterans Benefits Administration, a branch of the VA that 
assesses service-related injuries on a sliding scale from 0 percent to 
100 percent in 10 percent increments. Veterans must submit to medical 
evaluations for each condition they are claiming. If a claim is 
rejected, the veteran can appeal to a VA board that renders a decision 
or sends the case back to the regional office.
    Government audits have uncovered fundamental flaws in the process. 
The GAO last March reported that even though medical problems that 
veterans report are becoming more complex--including those based on 
environmental risks, infectious diseases and brain injuries--the VA's 
criteria for disability decisions continue to be based on estimates 
made in 1945 about how service-connected impairments could affect the 
average individual's ability to perform manual labor.

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    LENDING A HAND: Mack of the Disabled American Veterans, with 
paperwork from hundreds of appeals of denied claims, helps returning 
veterans from Iraq and Afghanistan navigate the VA's bureaucracy.
    (CQ PHOTOS/SCOTT J. FERRELL)

    The GAO also found that the Veterans Benefits Administration has to 
wait a year or longer to obtain military records to verify some claims 
of Post Traumatic Stress Disorder. Auditors suggested that the VA try 
using an electronic library of medical records instead of submitting 
requests to the Army and Joint Services Records Research Center. The VA 
responded that it would study the matter.
    Piecemeal efforts to streamline claims processing in the regional 
offices have left big disparities in service, with significant delays 
in some cities. The advocacy group Amvets found that 63 percent of 
claims filed at the VA's Washington, D.C., office took six months or 
longer to resolve. By contrast, 7 percent or fewer claims filed in 
offices in Providence, R.I., Fargo, N.D. and Boise, Idaho, took that 
long.
    The VA's reliance on medical checkups to verify claims is adding to 
the bureaucratic headaches by lengthening waiting times at VA medical 
centers around the country and delaying some patients from getting 
access to specialists. ``People are just clamoring to get VA medical 
treatment in order to be able to get into the VA disability benefits 
ladder,'' Bilmes said.
    She expects the situation to worsen, projecting that the VA will 
receive roughly 400,000 new claims from servicemembers returning from 
Iraq and Afghanistan over the next two years. Many will be submitted 
after the veterans exhaust the two free years of medical care the VA 
provides upon discharge. ``The main stress is yet to come,'' Bilmes 
said. ``There will be a huge increase in the number of claims.''
    The claims process also does not treat every returning 
servicemember equally. Active-duty soldiers have a better chance of 
getting claims evaluated promptly and approved than reservists and 
members of the National Guard. That is because active-duty soldiers 
often have the option of having their condition reviewed earlier by the 
VA before they are discharged from service. Reservists and guardsmen 
typically cannot get a ruling because they are discharged much faster. 
The result is that some ex-servicemembers start collecting their 
disability payments later.
    ``They typically don't remain in place long enough for us to go 
ahead and make the arrangements for the necessary medical exams and the 
other steps needed . . . to give them the same types of service we give 
the active-duty members,'' said Ron Aument, the VA's deputy 
undersecretary for benefits.
    Data the VA released in February confirmed that active-duty 
servicemembers are nearly twice as likely as reservists to have claims 
approved.
    ``The result is devastating and scandalous,'' said Paul Sullivan, 
Executive Director of Veterans for Common Sense and a former project 
manager at the Veterans Benefits Administration. ``The VA should 
immediately and aggressively investigate this problem and then correct 
it.''

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    Congress tried to address claim denials last year by including 
language in a VA authorization bill allowing claimants to retain 
attorneys to represent them at some stages of the appeals process. But 
VA officials and veterans' groups have said the addition of attorneys 
has made the claims process more adversarial, encouraging claimants to 
file more, and more complicated, appeals. Veterans' groups predict 
additional delays as the system gets increasingly clogged.
    ``You have an entire system that's been designed around the notion 
of being a non-adversarial process,'' Aument said. ``You are now 
bringing attorneys into the process whose very training is to be a 
zealous advocate and actually conduct themselves in many cases in an 
adversarial manner on behalf of their clients.''
    Nicholson, in announcing improvements April 24, attributed some of 
the backlog in the system to the VA's improved outreach to the 
veterans' community, which made some ex-servicemembers aware of 
benefits and, in turn, encouraged more claims.
    ``We're challenged really because we're . . . a victim, maybe is 
the best way to say it, of our own success,'' Nicholson said. ``The 
result of that is that while we are working diligently, the time it's 
taking is too long.''
    The VA and Congress propose solving many of the problems by hiring 
more claims processors. The agency, in its fiscal 2008 budget request, 
requested 450 processors to help cut through red tape. Congress will 
probably authorize money in this year's supplemental spending measure, 
and again in 2008 spending bills. VA officials say the additional staff 
will help the agency reach a goal of shortening the time it takes 
veterans to get a ruling on initial claims to 125 days, although Aument 
said that this may not be realized until fiscal 2009 at earliest.
    However, some veterans' groups predict that extra staff at claims 
centers could increase waiting times even more. That is because it 
takes two to three years for senior staff to train claims processors. 
Meanwhile, some longtime processors are expected to retire, with the 
net effect being a shortage of experienced personnel available to 
process the veterans' paperwork.
    ``They're going to have to pull some of their best people off to 
train'' the new hires, said Dennis Cullinan, Legislative Director of 
the Veterans of Foreign Wars. ``Things are going to get worse for a 
while rather than better.''

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Shifting the Burden
    Some in Congress, such as House Veterans' Affairs Chairman Bob 
Filner of California, have embraced a new approach proposed by Bilmes 
in which the government would assume that all claims are valid, then 
audit a fraction at some later date. That would effectively shift the 
burden of proving a claim was valid from the veteran to the government.
    ``I do favor the principle of shifting the burden,'' Filner said in 
an interview, adding that the VA ``had enough time to deal with this, 
and they have refused.''
    VA officials have stated publicly that they are concerned that the 
extra auditing of claims will sap the agency's resources. The 
department this spring announced its opposition to a bill by Indiana 
Democratic Rep. Joe Donnelly, a member of the Veterans' Affairs panel, 
that would essentially implement the system Bilmes proposes, citing 
projections that the change would cost an extra $173 billion over 10 
years.
    Groups such as Disabled American Veterans, which for decades have 
guided returning servicemembers through the claims process, also 
believe the change would unwisely divert VA funding for the sake of 
shaking up the present system. Carl Blake, Legislative Director of the 
Paralyzed Veterans of America, even suggests that blanket approval of 
all claims would encourage fraud and abuse.
    ``We believe if Congress lowers this threshold . . . the results 
would be an overwhelming number of claims filed for compensation,'' 
Blake said.
    But opinion within the VA could be shifting on the issue. While 
Aument testified against Donnelly's legislation and said in an 
interview that such a proposal probably would cause ``serious 
unintended consequences,'' VA Secretary Nicholson has made statements 
to the contrary. In an interview April 24, he said he is considering 
the possibility of creating a pilot program modeled on Bilmes' 
proposal, and has discussed the matter with the White House Office of 
Management and Budget.
    Bilmes said that during a recent meeting with her, Nicholson 
``definitely was intrigued at the concept of changing the 
presumption.''
    But even if the VA gets behind such a change, the prospect of 
offering blanket approval of claims would face tough scrutiny in the 
Senate.
    ``There are serious procedural questions, but far more importantly, 
the cost implications suggest this has little chance of enactment,'' 
said a Senate Democratic aide.
    Another change proposed by Bilmes would streamline the VA's 10-
point disability rating system and create four classifications: none, 
low, medium and high. Bilmes believes the change would cut down on the 
number of appeals in the system.
    Some lawmakers, such as New York Democratic Rep. John Hall, who 
also serves on the House Veterans' Affairs Committee, would provide 
financial assistance to veterans whose claims were languishing by 
providing a $500 monthly benefit to those whose appeals were not taken 
up within 180 days.
    But such proposals face stiff opposition in the Senate, where 
lawmakers from both parties are worried about the extra costs and 
inclined to wait for the recommendations of a congressionally mandated 
13-member commission convened to study the VA's disability benefits 
programs.
    Senator Larry E. Craig of Idaho, the ranking Republican on the 
Senate Veterans' Affairs Committee, says he hopes the commission ``will 
provide the foundation for the types of fundamental changes that may be 
needed to ensure lasting improvement to the disability compensation 
system'' and possibly lead to a bipartisan reform package. ``The system 
as currently structured cannot provide veterans with timely, accurate 
and consistent decisions on their claims,'' Craig said.
Gaps in Medical Care
    In contrast to the troubled claims process, the VA's medical system 
has received widespread praise from politicians and veterans' groups 
for the way it treats more than 5 million veterans annually. The 
network's well-regarded rehabilitation services have become vital for 
many of the recent returnees from Iraq, who suffer from head trauma, 
spinal injuries, amputations, blindness or deafness.
    But experts contend that the system is ill-equipped to cope with 
increased caseloads because the VA has regularly underestimated the 
cost of care, workloads and the length of waiting lists. Harvard's 
Bilmes noted that the VA's fiscal 2006 request for emergency funding 
included $677 million to cover an unexpected 2 percent increase in the 
number of patients, another $600 million to correct inaccurate 
estimates of long-term care costs and $400 million more for an 
unexpected 1.2 percent increase in per-patient costs.
    Some professional organizations and veterans' groups are 
particularly concerned about the VA's ability to treat mental health 
and brain disorders--including traumatic brain injuries and behavioral 
problems such as post traumatic stress disorder, depression and 
substance abuse--that are fast becoming the war's signature medical 
issues.
    Frances M. Murphy, the VA's deputy undersecretary for health policy 
coordination, stoked fears last year when she told a presidential 
commission on mental health that some VA clinics do not provide mental 
health or substance abuse care, and that in other locations, ``waiting 
lists render that care virtually inaccessible.'' The remarks triggered 
a huge flap in which Murray and other congressional Democrats 
questioned whether Nicholson was giving returning veterans the services 
they need.

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    MORE OVERSIGHT: Murray says Democrats will dictate change if the VA 
doesn't act promptly.
    (GETTY IMAGES/CHIP SOMODEVILLA)

    The American Psychological Association reported in February that 
the armed forces and veterans' systems both suffer a shortage of 
qualified specialists, noting that the VA employs 1,839 psychologists 
to serve some 24.3 million veterans. Veterans' groups contend that the 
shortage has meant some returning servicemembers--especially National 
Guard members and reservists--are subjected to perfunctory screenings 
lasting only several minutes that are geared toward treating easily 
apparent physical disabilities.
    ``Funding for the VA was based more on hope than projectable 
data,'' said Paul Rieckhoff, Executive Director of the advocacy group 
Iraq and Afghanistan Veterans of America. ``They hoped people wouldn't 
have casualties, wouldn't have brain injuries. The reality is those 
things happened. There was an absurd lack of planning.''
    The VA has disputed the psychological association's study, saying 
the findings were flawed because the group did not contact the 
department for information about VA programs, staffing data and other 
information.
    However, veterans' groups and experts contend that staffing 
shortages within the military medical establishment hinder the ability 
to diagnose mental health problems in the field, before servicemembers 
return home. The American Psychological Association says the number of 
active-duty psychologists has been slipping in recent years because of 
heavy caseloads, job stress and declining morale. And only 10 to 20 
percent have been trained to counsel soldiers suffering from post-
traumatic stress disorder.
    Harvard's Bilmes says the cumulative effect of these gaps in care 
is that veterans are at higher risk of unemployment, homelessness, 
family violence, crime, alcoholism and drug abuse--problems that will 
impose societal and financial burdens on states and localities.
    VA officials say they are addressing shortcomings in their system 
by beginning to screen discharged servicemembers for traumatic brain 
injuries as soon as they are admitted into the veterans system. The 
department also will hire 100 new patient advocates to travel to 
medical facilities and help wounded servicemembers and their families 
cut through bureaucratic red tape and obtain information about 
disability compensation and options for rehabilitation. And the 
department is asking Congress for money to expand a network of 21 
``polytrauma'' centers across the country so that veterans who live in 
outlying areas can have better access to facilities that can 
simultaneously treat injuries to more than one body part.
    The task force recommendations that Nicholson issued April 24 call 
for making VA and military medical records systems interoperable 
sometime between mid-2008 and January 2009.
    ``VA has worked hard to improve the transition process for our 
deserving servicemen and women. Yet we are not satisfied that we have 
achieved all that is possible,'' VA Undersecretary for Benefits Daniel 
Cooper told a joint hearing of the Senate Armed Services and Veterans' 
Affairs Committees April 12.
Helping `Wounded Warriors'
    While Congress has always supported the principle of improving 
veterans' healthcare, the disclosure of problems at Walter Reed Army 
Medical Center has inspired more detailed proposals that address kinks 
in the system.
    After the Walter Reed disclosure, the House in late March 
overwhelmingly passed a plan to improve the coordination of VA and 
military health services by adding caseworkers and counselors to the 
military's medical system. The plan also required the Pentagon and VA 
to better coordinate the transfer of servicemembers between the two 
bureaucracies. The changes would cost at least $300 million over the 
next five years, according to the Congressional Budget Office.
    There is no identical companion legislation in the Senate yet. An 
effort by Democrats Barack Obama of Illinois and Claire McCaskill of 
Missouri to add caseworkers and mental health counselors to military 
hospitals and provide money for the military to develop a system 
allowing soldiers to submit medical paperwork over the Internet was 
defeated by Republicans during a debate on a war spending bill in late 
March. The Bush administration says it prefers that Congress wait until 
a presidentially appointed commission studying problems in the 
military's medical system issues a report, due by July 31. The 
commission is headed by former Republican Senator Bob Dole and Donna 
Shalala, former Secretary of Health and Human Services in the Clinton 
administration.
    House members and senators also are trying to confront the problems 
by earmarking more money in spending bills. The 2007 supplemental 
spending bill, for example, designated $100 million for mental health 
services, another $30 million for a new polytrauma center and $20 
million to improve services at ``Vet Centers''--a network of more than 
200 storefront centers the VA operates around the country where 
veterans and their families can receive counseling.
    Beyond such narrow remedies, VA officials and medical researchers 
are trying to gain a better understanding of the new types of injuries 
veterans are bringing home. With as many as one in five soldiers 
projected to suffer mild Traumatic Brain Injuries, researchers at the 
W.G. Hefner Medical Center in North Carolina are collaborating with 
scientists at the Massachusetts Institute of Technology to establish 
how the force of an explosion affects brain cells and their ability to 
communicate with one another. The answers could yield clues about 
whether veterans with brain injuries are more susceptible to the 
effects of alcohol or certain medicines, and help VA screeners 
differentiate between physical brain injuries and stress-related 
disorders.
    Murray, a leading Democratic voice on veterans' issues, gives the 
administration some credit for recognizing the scope of the problems 
and taking constructive steps. But she says the VA needs to be a much 
more vocal advocate for veterans' needs, especially in the area of 
healthcare.
    She predicts that unless there is more initiative, the Democratic 
Congress will impose more oversight when it draws up fiscal 2008 
spending bills and takes up a defense authorization bill later this 
year.

                                  
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