[Senate Hearing 110-35]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 110-35

                        VA CLAIMS ADJUDICATION 
                          AND APPEALS PROCESS

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 7, 2007

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS

                   Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West         Larry E. Craig, Idaho, Ranking 
    Virginia                             Member
Patty Murray, Washington             Arlen Specter, Pennsylvania
Barack Obama, Illinois               Richard M. Burr, North Carolina
Bernard Sanders, (I) Vermont         Johnny Isakson, Georgia
Sherrod Brown, Ohio                  Lindsey O. Graham, South Carolina
Jim Webb, Virginia                   Kay Bailey Hutchison, Texas
Jon Tester, Montana                  John Ensign, Nevada
                    William E. Brew, Staff Director
                 Lupe Wissel, Republican Staff Director



















                            C O N T E N T S

                              ----------                              

                             March 7, 2007
                                SENATORS

                                                                   Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........     1
    Prepared statement...........................................     2
Craig, Hon. Larry E., Ranking Member, U.S. Senator from Idaho....    72
    Charts:
        Fiscal Year 1997 to Fiscal Year 2008 Compensation and 
          Pension Staffing.......................................    74
        Options for Fundamental Reform...........................    76
Rockefeller, Hon. John D., IV, U.S. Senator from West Virginia...    77
Tester, Hon. Jon, U.S. Senator from Montana......................    78
Webb, Hon. Jim, U.S. Senator from Virginia.......................    79
Obama, Hon. Barack, U.S. Senator from Illinois...................    89
    Prepared statement...........................................    91

                               WITNESSES

Cooper, Hon. Daniel L., Under Secretary for Benefits, Department 
  of Veterans Affairs; accompanied by Michael Walcoff, Associate 
  Deputy Under Secretary for Field Operations; and Jack McCoy, 
  Associate Deputy Under Secretary for Policy and Program 
  Management.....................................................     3
    Prepared statement...........................................     5
    Response to written questions submitted by:
        Hon. Daniel K. Akaka.....................................    11
        Hon. Barack Obama........................................    50
        Hon. Larry E. Craig......................................    51
Terry, Hon. James P., Chairman, Board of Veterans' Appeals; 
  accompanied by Ron Garvin, Vice Chairman; and Steve Keller, 
  Senior Deputy Vice Chairman....................................    54
    Prepared statement...........................................    58
    Response to written questions submitted by:
        Hon. Daniel K. Akaka.....................................    61
        Hon. Barack Obama........................................    63
        Hon. Larry E. Craig......................................    69
Bertoni, Daniel, Acting Director, Education, Workforce and Income 
  Security, Government Accountability Office.....................    98
    Prepared Statement...........................................   100
    Response to written questions submitted by Hon. Barack Obama.   113
Rowan, John, National President, Vietnam Veterans of America.....   113
Surratt, Rick, Deputy National Legislative Director, Disabled 
  American 
  Veterans.......................................................   115
    Prepared statement...........................................   116
    Response to written questions submitted by Hon. Barack Obama.   127

























 
                        VA CLAIMS ADJUDICATION 
                          AND APPEALS PROCESS

                              ----------                              


                        WEDNESDAY, MARCH 7, 2007

                               U.S. Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:31 a.m., in 
room SR-418, Russell Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Committee, presiding.
    Present: Senators Akaka, Rockefeller, Obama, Tester, Webb, 
and Craig.

     OPENING STATEMENT OF HON. DANIEL K. AKAKA, CHAIRMAN, 
                    U.S. SENATOR FROM HAWAII

    Chairman Akaka. This hearing of the Committee on Veterans' 
Affairs will come to order. Aloha and welcome to all of you. I 
am pleased that all of you can join us for today's hearing on 
the VA adjudication process.
    Today's hearing will address a matter that has been an 
ongoing concern to this Committee and our Nation's veterans for 
many, many years: the timeliness and accuracy of the 
adjudication of veterans' disability claims.
    In the last Congress, Chairman Craig held two hearings on 
the topic. While the Veterans Benefits Administration and the 
Board of Veterans' Appeals have made strides in recent years to 
make the claims adjudication operation more efficient and 
productive, we must admit that much work still needs to be 
done.
    This year, GAO has once again designated VA's disability 
program as a high-risk area and in need of broad reform. Recent 
news stories, including most prominently a recent story in 
Newsweek magazine, have highlighted some of these shortcomings 
and contributed to the public perception that VA is failing to 
meet its obligations to our Nation's veterans.
    The costs of caring for our veterans must be understood by 
Congress and the Administration as nothing short of an ongoing 
cost of war. Although the President's Fiscal Year 2008 budget 
request is a step in the right direction, it does not provide 
enough resources for adjudication personnel. As the veterans 
population continues to age and disabled veterans return home 
from Iraq and Afghanistan, VBA's workload will continue to 
increase in the coming years.
    The time it takes to process a disability claim continues 
to be a matter of concern. While progress has been made in 
recent years, VBA remains nearly 2 months short of reaching its 
strategic goal of 125 days to process a claim. The majority 
Members of the Committee recommended an additional $40 million 
for VBA field offices and an additional $3.7 million for VBA 
above the President's budget request to hire new staff. We also 
endorsed increased funding for VA's training initiatives.
    I am interested in hearing from Admiral Cooper about VBA's 
new policy of prioritizing claims from veterans of the Global 
War on Terror. I, again, thank you for being here today. I look 
forward to this hearing.
    [The prepared statement of Senator Akaka follows:]
         Prepared Statement of Hon. Daniel K. Akaka, Chairman, 
                        U.S. Senator from Hawaii
    Aloha and welcome to all. I am pleased that you can join us for 
today's oversight hearing on the VA adjudication process. I look 
forward to having a constructive conversation with Admiral Cooper, 
Chairman Terry and our other witnesses.
    Today's hearing will address a matter that has been an ongoing 
concern to this Committee and our Nation's veterans for many years--the 
timeliness and accuracy of the adjudication of veterans' disability 
claims. In the last Congress, Chairman Craig held two hearings on the 
topic.
    While the Veterans Benefits Administration and the Board of 
Veterans' Appeal have made strides in recent years to make the claims 
adjudication operation more efficient and productive, much work still 
needs to be done. This year GAO has once again designated VA's 
disability program as a ``high risk area'' in need of broad reform.
    Recent news stories, including, most prominently, a recent cover 
story in Newsweek magazine, have highlighted some of these shortcomings 
and contributed to the public perception that VA is failing to meet its 
obligations to our Nation's veterans. I am confident that the VA is 
fully committed to its mission, but there are areas where improvements 
must be made in order to better serve our veterans and restore the 
Nation's faith in the institutions charged with caring for them.
    The cost of caring for our veterans must be understood by Congress 
and the Administration as nothing short of an ongoing cost of war. 
Although the President's Fiscal Year 2008 Budget Request is a step in 
the right direction, it does not provide enough resources for 
adjudication personnel. We must ensure that sufficient funding is 
available to provide veterans with timely and accurate responses to 
their claims. As the veterans' population continues to age and disabled 
veterans return home from Iraq and Afghanistan, VBA's workload will 
continue to increase in the coming years. Nevertheless, VA predicts 
that the number of new receipts will essentially flatline in Fiscal 
Years 2007 and 2008. I am concerned that this projection may 
underestimate VBA's workload. The most recent numbers indicate that 
through the first quarter of Fiscal Year 2007, VA has received 8 
percent more claims than expected. Without prompt action, we will fail 
to keep our promise to provide timely and accurate decisions to 
veterans.
    The time necessary to process a disability claim continues to be a 
matter of concern. While progress has been made in recent years, VBA 
remains nearly 2 months short of reaching its strategic goal of 125 
days to process a claim. VA must find innovative ways to absorb the 
burdens of new legislation and court decisions, as well as the 
increasing complexity of claims filed.
    The Democratic and Independent Members of the Committee recommended 
an additional $40 million for VBA field offices and an additional $3.7 
million for BVA above the President's budget request to hire new staff. 
We also endorsed increased funding for VA's training initiatives. It 
takes approximately two years before a new hire fully contributes to 
the bottom line. Thus, proper funding and infrastructure for training 
must be in place before VBA finds itself dealing with an unexpected 
increase in its workload volume. We hope that these increases for 
staffing and training will be included in the Budget Resolution.
    I am interested in hearing from Admiral Cooper and Mr. Terry on 
their plans to tackle both immediate and future challenges. I am 
particularly interested in hearing from Admiral Cooper about VBA's new 
policy of prioritizing claims from veterans of the Global War on 
Terror. How will this plan be implemented, and what impact it will have 
on claims process management at the regional office level? I am 
encouraged to hear that VA is committed to serving our veterans who 
have just returned from the battlefield, but we must also ensure that 
this policy does not adversely affect veterans of prior wars.
    I again thank you for being here today. I look forward to our 
witnesses' testimony.

    Chairman Akaka. This is going to be a busy morning. Members 
are in other Committees at this moment, and they will be coming 
in as they come from other Committees. There will be votes as 
well. However, we will continue with the hearing. At this time 
I would like to call on Admiral Cooper for your testimony.

    STATEMENT OF HON. DANIEL L. COOPER, UNDER SECRETARY FOR 
           BENEFITS, DEPARTMENT OF VETERANS AFFAIRS; 
    ACCOMPANIED BY MICHAEL WALCOFF, ASSOCIATE DEPUTY UNDER 
   SECRETARY FOR FIELD OPERATIONS; AND JACK McCOY, ASSOCIATE 
                  DEPUTY UNDER SECRETARY FOR 
                 POLICY AND PROGRAM MANAGEMENT

    Mr. Cooper. Thank you, sir.
    Mr. Chairman, Members of the Committee, it is my pleasure 
to be here today to discuss the Disability Compensation 
Program. I am pleased to be accompanied by Mr. Michael Walcoff, 
who is VBA's Associate Deputy Under Secretary for Field 
Operations, and Mr. Jack McCoy, the Associate Deputy for Policy 
and Program Management. And I will allow Judge Terry to 
introduce his particular people.
    The Veterans Benefits Administration is responsible for 
administering a wide range of benefits and services for 
veterans, their families, and their survivors. The heart of our 
mission is the Disability Compensation Program.
    In 2006, we produced over 774,000 disability 
determinations. We also performed more than 2 million decision 
actions of all types to address new claims and to maintain 
those already on the rolls. Additionally, we handled over 6.6 
million phone calls, conducted over a million interviews, 
briefed more than 390,000 service personnel, and conducted 
65,000 hours of outreach to military members, former prisoners 
of war, homeless, minorities, women, and other targeted groups.
    Today I will try to discuss the challenges we face in 
providing timely, accurate, and consistent determinations for 
veterans' claims for disability compensation. I will also 
discuss some of the actions we are taking.
    The number of veterans filing initial disability 
compensation claims and claims for additional benefits has 
increased every year since 2000. Disability claims from 
veterans of all eras increased from 578,700 in 2000 to 806,300 
in 2006. Comparing those 2 years, 2000 and 2006, this 
represents an increase of 228,000 claims a year, or 38 percent.
    Among the most important factors leading to the sustained 
high levels of claims activity are: Operations OIF and OEF, the 
present War on Terror; our increased and extensive outreach 
that we do; and the additional beneficiaries on the rolls who 
come in for additional claims and adjustments to their claims.
    The absolute increase in claims is not the only change 
affecting the claims processing environment. As stated in the 
recent GAO report, the great number of disabilities that the 
average veteran now identifies, the increasing complexity of 
the disabilities that we see, and the changes in law and 
processes are additional challenges to the claims processing 
workload. The trend toward increasingly complex and difficult-
to-rate claims is expected to continue for the foreseeable 
future.
    A significant portion of our workload comes from appeals of 
regional office decisions, remands from the board and from the 
court. A large portion of the work that we do, however, is in 
account maintenance activities for such things as dependency 
adjustments, death pension awards, income adjustments. As the 
overall claims increase, so do appellate and non-rating-related 
workloads.
    To ensure accurate benefit decisions given the increases in 
both volume and complexity of the workload, we have established 
an aggressive and comprehensive program of quality assurance 
and oversight to assess compliance with VBA claims processing 
policy and procedures and to assure consistent application. Our 
quality over these last 5 years has improved approximately 8 to 
9 percent.
    It is critical that our employees receive the essential 
guidance, materials, and tools to meet the ever-changing and 
increasingly complex workload. The frequent changes in the 
benefits programs require that we have good, stable training. 
To that end, VBA has deployed new training tools and 
centralized training programs. We have standardized computer-
based tools that we use for which each of our people has 
access. And, in addition, we have a mandatory cycle of training 
for all Veterans Service Center employees that has been 
developed consisting of 80 hours a year for their training.
    To balance the inventory of disability claims across 
regional offices, we execute a ``brokering'' strategy in which 
rating claims are sent from those stations with high 
inventories to other stations with available capacity to 
process additional rating work. Brokering allows the 
organization to address simultaneously the local and the 
national inventory by maximizing the use of those available 
resources.
    The consolidation of specialized processing operations to 
provide better and more consistent decisions is one of the acts 
that we have taken. Some of our consolidation efforts include 
establishment of the Pension Maintenance Centers at three 
sites; the Tiger Team that we have in Cleveland for veterans 
who are over 70 years old with claims pending of over a year; 
the Appeals Management center here in Washington, which takes 
the remands from the court. We have the Benefits Delivery at 
Discharge Program which has got into full functioning this 
year, and we have centralized all radiation claims in one 
specific regional office.
    We are aggressively pursuing measures to decrease the 
pending inventory of disability claims and to shorten the time 
the veterans must wait, but our pending inventory right now is 
about 400,000 claims, and the average processing time--that is, 
time to complete--is about 175 days.
    We are increasing staffing levels to reduce the pending 
inventory and to provide the level of service expected by the 
American people and our veterans. We began aggressively hiring 
additional staff in Fiscal Year 2006. We have increased the 
onboard strength between January of 2006 and January of 2007 by 
580 employees. With a workforce that is sufficiently large, 
correctly balanced, and properly trained, VBA can successfully 
meet the needs of our veterans.
    We will continue to accelerate hiring and fund additional 
training necessary for this new staff this fiscal year.
    Since the onset of the combat operations in Iraq and 
Afghanistan, VBA has worked hard to expedite and case-manage 
services for those seriously injured Operations Iraqi and 
Enduring Freedom veterans and their families. This 
individualized service begins at the military medical 
facilities where the injured servicemembers return for 
treatment and continues as these servicemembers are medically 
separated and enter the VA medical care and benefits systems. 
We assign special benefits counselors, social workers, and case 
managers to work with these veterans and their families 
throughout the transition and to help ensure expedited delivery 
of benefits.
    Last month, the Secretary directed that we start a new 
initiative to provide priority processing of all OIF/OEF 
veterans' disability claims. This will allow all of these brave 
men and women returning from the OIF/OEF theaters who were not 
seriously injured but who, nevertheless, have a disability 
incurred or aggravated during their military service to enter 
the VA system and begin receiving disability benefits as soon 
as possible after separation.
    Last month, we began processing all disability compensation 
and pension claims received from OIF/OEF veterans on a priority 
basis.
    Through these initiatives, VBA will address the challenges 
facing our organization and continue to improve claims 
processing. We will continue to assess our policies, processes, 
and approaches to take advantage of any improvement 
opportunities we can identify and to ensure that we are 
achieving the desired performance outcomes. It is vital that we 
improve production, but we must ensure that we maintain and 
continue to improve quality and consistency.
    Mr. Chairman, that concludes my testimony. I greatly 
appreciate the chance to be here before you today.
    [The prepared statement of Mr. Cooper follows:]
     Prepared Statement of Hon. Daniel L. Cooper, Under Secretary 
              for Benefits, Department of Veterans Affairs
    Mr. Chairman and Members of the Committee, it is my pleasure to be 
here today to discuss the Disability Compensation Program. I am pleased 
to be accompanied by Mr. Michael Walcoff, VBA's Associate Deputy Under 
Secretary for Field Operations, and Mr. Jack McCoy, VBA's Associate 
Deputy Under Secretary for Policy and Program Management.
    The Veterans Benefits Administration (VBA) is responsible for 
administering a wide range of benefits and services for veterans, their 
families, and their survivors. We manage a life insurance program that 
consistently ranks among the best in the Nation. We promote home 
ownership through the loan guaranty program and help veterans and their 
dependents seek greater education and economic opportunities through 
the highly successful Montgomery GI Bill program and other educational 
programs. For qualifying veterans with disabilities, our Vocational 
Rehabilitation and Employment Program provides both rehabilitation and 
training and assists them in reentering the civilian workforce. We are 
proud of our achievements in all these vital areas.
    The heart of our mission is the Disability Compensation Program. In 
Fiscal Year 2006, we produced over 774,000 disability determinations. 
We also performed more than two million decision actions of all types 
to address new claims and to maintain those already on the rolls. 
Additionally, we handled over 6.6 million phone calls; conducted over a 
million interviews; briefed more than 390,000 service persons; and 
conducted nearly 65,000 hours of outreach to military members, former 
prisoners of war, homeless, minorities, women, and other targeted 
groups.
    Today, I will discuss the challenges we face in providing timely, 
accurate, and consistent determinations on veterans' claims for 
disability compensation. These challenges include the growth of the 
disability claims workload, the increasingly complex nature of that 
workload, the rise in appellate processing, and the absolute need to 
produce accurate benefit decisions. I will also discuss some of the 
actions we are taking to improve claims processing. We view these 
efforts as opportunities to achieve greater processing efficiencies 
and, thus, to enhance service to veterans.
                  growth of disability claims workload
    The number of veterans filing initial disability compensation 
claims and claims for increased benefits has increased every year since 
Fiscal Year 2000. Disability claims from returning Afghanistan and Iraq 
war veterans as well as from veterans of earlier periods of war 
increased from 578,773 in Fiscal Year 2000 to 806,382 in Fiscal Year 
2006. For Fiscal Year 2006 alone, this represents an increase of nearly 
228,000 claims or 38 percent over the 2000 base year. It is expected 
that this high level of claims activity will continue over the next 5 
years.
    The primary factors leading to the sustained high levels of claims 
activity are: Operation Iraqi Freedom (OIF) and Operation Enduring 
Freedom (OEF); more beneficiaries on the rolls, with resulting 
additional claims for increased benefits; improved and expanded 
outreach to active-duty servicemembers, Guard and Reserve personnel, 
survivors, and veterans of earlier conflicts; and implementation of 
Combat Related Special Compensation (CRSC) and Concurrent Disability 
and Retired Pay (CDRP) programs by the Department of Defense (DOD).
    Ongoing hostilities in Afghanistan and Iraq are expected to 
continue to increase the VA compensation workload. Earlier studies by 
VA indicate that the most significant indicator of new claims activity 
is the size of the active force. Over 1.45 million active-duty 
servicemembers, members of the National Guard, and reservists have thus 
far been deployed in the Global War on Terrorism. Over 685,000 have 
returned and been discharged.
    Whether deployed to foreign-duty stations or maintaining security 
in the United States, the authorized size of the active force as well 
as the mobilization of thousands of citizen soldiers means that the 
size of the force on active duty has significantly increased. The 
claims rate for veterans of the Gulf War Era, which began in 1991 and 
includes veterans who are currently serving in Operations Enduring 
Freedom and Iraqi Freedom, is significant. Veterans and survivors of 
the Gulf War Era currently comprise the second largest population of 
veterans receiving benefits after Vietnam Era veterans.
    The number of veterans receiving compensation has increased by 
almost 400,000 since 2000--from just over 2.3 million veterans to 
nearly 2.7 million in 2006. This increased number of compensation 
recipients, many of whom suffer from chronic progressive disabilities 
such as diabetes, mental illness, and cardiovascular disabilities, will 
continue to stimulate more claims for increased benefits in the coming 
years as these veterans age and their conditions worsen. Reopened 
disability compensation claims currently comprise 54 percent of VBA's 
disability claims receipts.
    Additionally, an increase in claimants and beneficiaries on the 
rolls has a direct relationship to the workload in the public contact 
area of telephone interviews, personal interviews, and correspondence, 
including electronic correspondence. Veterans Service Center employees 
in the regional offices last year conducted over six million telephone 
interviews and one million personal interviews.
    VA is committed to increased outreach efforts to active-duty 
personnel. These outreach efforts result in significantly higher claims 
rates. Original claim receipts increased from 111,672 in Fiscal Year 
2000 to 217,343 in Fiscal Year 2006--a 95 percent increase. We believe 
this increase is directly related to our aggressive outreach programs; 
we believe this increasing trend will continue.
    Separating military personnel can receive enhanced services through 
our Benefits Delivery at Discharge (BDD) Program. On either a permanent 
or itinerant basis, VBA staff members are stationed at 140 military 
discharge points around the Nation, as well as in Korea and Germany. 
Additionally, VBA employees conduct transition assistance briefings in 
Germany, Italy, Korea, England, Japan, Okinawa, and Spain, and 
occasionally aboard ship as servicemembers return to the United States.
    Combat-Related Special Compensation (CRSC), a benefit available 
from DOD for certain military retirees with specific qualifying combat-
related disabilities defined by statute, became effective July 1, 2003, 
and was later expanded effective January 1, 2004. Today, more than 
54,000 military retirees receive this benefit. This benefit and 
Concurrent Retired and Disability Pay (CRDP), another DOD program that 
permits partial to total restoration of retired pay previously waived 
to receive VA compensation, further contribute to increased claims 
activity for VBA.
    It is now potentially advantageous for the majority of our military 
retirees, even those with relatively minor disabilities, to file claims 
with VA and to receive VA disability compensation, since their waived 
retired pay may be restored and not be subject to waiver in the future. 
Approximately 194,000 retirees receive CRDP. The number of military 
retirees receiving VA compensation has increased since the advent of 
these programs to over 840,000. There is also now significant incentive 
for retirees receiving compensation to file claims for increased VA 
benefits, as the increased amounts may also no longer be subject to 
offset. The total number of retirees as of the end of Fiscal Year 2006 
was approximately two million, meaning that over 40 percent of all U.S. 
military retirees now receive VA benefits.
                complexity of claims processing workload
    The increase in claims receipts is not the only change affecting 
the claims processing environment. The greater number of disabilities 
veterans now claim, the increasing complexity of the disabilities being 
claimed, and the changes in law and processes pose additional 
challenges to the claims processing workload. The trend toward 
increasingly complex and difficult-to-rate claims is expected to 
continue for the foreseeable future.
    A claim becomes more complex as the number of directly claimed 
conditions (issues) increases because of the larger number of variables 
that must be considered and addressed. Multiple regulations, multiple 
sources of evidence, and multiple potential effective dates and 
presumptive periods must be considered. The effect of these factors 
increases proportionately and sometimes exponentially as the number of 
claimed conditions increases. Additionally, as the number of claimed 
conditions increases, the potential for additional unclaimed but 
secondary, aggravated, and inferred issues increases as well, further 
complicating the preparation of adequate and comprehensive Veterans 
Claims Assistance Act of 2000 (VCAA) notice and rating decisions. Since 
veterans are able to appeal decisions on specific disabilities to the 
Board of Veterans' Appeals (Board) and the United States Court of 
Appeals for Veterans Claims (CAVC), the increasing number of claimed 
conditions significantly increases the potential for appeal.
    VA's experience since 2000 demonstrates that the trend of 
increasing numbers of conditions claimed is system-wide, not just at 
special intake locations such as BDD sites. The number of cases with 
eight or more disabilities claimed increased from 21,814 in Fiscal Year 
2000 to 51,260 in Fiscal Year 2006, representing a 135 percent increase 
over the 2000 base year and a 15 percent increase over Fiscal Year 
2005.
    Combat and deployment of U.S. Forces to underdeveloped regions of 
the world have resulted in new and complex disability claims based on 
environmental and infectious risks, traumatic brain injuries, complex 
combat injuries involving multiple body systems, concerns about 
vaccinations, and other variabilities.
    In addition, the aging of the veteran population that is service 
connected for diabetes adds to the complexity of claimed disabilities. 
Approximately 253,000 veterans are service connected for diabetes, with 
more than 220,000 of these awards based upon the presumption of 
herbicide exposure in Vietnam. As veterans with diabetes reach and move 
past the 10-year point since the initial diagnosis, additional 
secondary conditions tend to become manifest. VA has already begun 
seeing increasingly complex medical cases involving neuropathies, 
vision problems, cardiovascular problems, and other issues directly 
related to diabetes. If secondary conditions are not specifically 
claimed by a veteran, the rating specialist must be alert to identify 
them. This increasing complexity of the disabilities adds to the 
increased difficulty of our workload and the resources needed to 
adequately process it.
    The number of veterans submitting claims for post-traumatic stress 
disorder (PTSD) has grown dramatically and contributed to increased 
complexity in claims processing. From Fiscal Year 2000 through Fiscal 
Year 2006, the number of veterans receiving compensation for PTSD has 
increased from more than 130,000 to nearly 270,000. These cases present 
unique processing requirements to obtain the evidence needed to 
substantiate the event causing the stress disorder.
    The Veterans Claims Assistance Act (VCAA) has significantly 
increased both the length of time and the specific requirements of 
claims development. VA's notification and development duties increased 
as a result of VCAA, adding more steps to the claims process and 
lengthening the time it takes to develop and decide a claim. Since 
enactment, we are required to review the claims at additional points in 
the decision process. Mistakes due to failure to address all issues or 
an incomplete understanding of the claim when initially developed have 
resulted in significant rework and remands from the Board of Veterans' 
Appeals and the United States Court of Appeals for Veterans Claims.
    VCAA requires VA to provide written notice to claimants of the 
evidence required to substantiate a claim and of which party (VA or the 
claimant) is responsible for acquiring that evidence. Under VCAA, VA's 
``duty to assist'' the claimant in perfecting and successfully 
prosecuting his or her claim extends to obtaining government records, 
assisting with getting private records, and obtaining all necessary 
medical examinations and medical opinions. As a claim progresses, 
additional notifications to the veteran may be required.
                   appellate and non-rating workload
    A significant portion of VBA's workload comes from appeals of 
regional office decisions, remands by the Board and the CAVC, and 
account maintenance activities for beneficiaries already receiving 
benefits. As overall claim receipts increase, so do appellate and non-
rating related workloads.
    As VBA renders more disability decisions, a natural outcome of that 
process is more appeals filed by veterans and survivors who disagree 
with some part of the decision made in their case. Veterans can appeal 
decisions denying service connection for any conditions claimed. They 
may also appeal the effective date of an award and the evaluation 
assigned to a disability.
    Appeals of regional office decisions and remands by the Board and 
the CAVC following appeal are some of the most challenging types of 
cases to process because of their complexity and the growing body of 
evidence necessary to process these claims. In recent years, the appeal 
rate on disability determinations has climbed from an historical rate 
prior to 2000 of approximately 7 percent of all disability decisions to 
the current rate of 11 percent. There are more than 130,000 appeals now 
pending in the regional offices and the Appeals Management Center. This 
number includes cases requiring processing prior to transfer of the 
appeal to the Board and cases remanded by the Board and the CAVC 
following an appeal. There are over 30,000 additional appeals pending 
at the Board of Veterans' Appeals.
    In 2006, VA completed over two million award actions of all types. 
Of that number, more than 774,000 were award actions in connection with 
disability rating decisions, and the remaining were associated with 
account maintenance (dependency adjustments, death pension awards, 
income adjustments, etc.). The number of veterans on our rolls has 
increased by nearly 400,000 in recent years, and the total number of 
veterans and survivors on our rolls is now over 3.6 million. The 
combination of the higher number of beneficiaries presently on our 
rolls and the sustained and projected high levels of new claims 
activity will result in continued growth in account maintenance 
activities.
               claims processing improvement (cpi) model
    A product of the VA Claims Processing Task Force, established by 
former Secretary of Veterans Affairs Anthony J. Principi, was the 
implementation of the Claims Processing Improvement (CPI) model. The 
CPI implementation established consistent organizational structure and 
work processes across all regional offices. Work processes were 
reengineered and specialized teams established to reduce the number of 
tasks performed by individual decisionmakers, establish consistency in 
work flow and process, and incorporate a triage approach to incoming 
claims.
    We continually review the CPI model based upon feedback from 
regional offices, the needs of the organization, and the timeliness and 
quality improvements we seek. The changing workload and workforce have 
necessitated a review of the model to ensure the most effective method 
of organizing work and resources to maximize performance. The CPI Model 
Task Force was assembled in January 2006 to reevaluate the CPI model to 
assess its overall effectiveness and improve consistency and efficiency 
in claims processing. The CPI Task Force solicited recommendations and 
rationale for changes to the CPI model from all regional office 
leadership. Interviews with field station management, reviews of recent 
site-visit reports and CPI deviation requests, and analyses of other 
pertinent documents were conducted. The final recommendations of the 
Task Force are currently being studied in pilot programs at select 
regional offices.
                       claims processing accuracy
    To ensure accurate benefit decisions, given the increases in volume 
and complexity of the workload, we have established an aggressive and 
comprehensive program of quality assurance and oversight to assess 
compliance with VBA claims processing policy and procedures and assure 
consistent application.
    The Systematic Technical Accuracy Review (STAR) program includes 
review of work in three areas: rating accuracy, authorization accuracy, 
and fiduciary program accuracy. Overall station accuracy averages for 
these three areas are included in the regional office director's 
performance standard and the station's performance measures. STAR 
results are readily available to facilitate analysis and to allow for 
the delivery of targeted training at the regional office level. C&P 
Service conducts satellite broadcast training sessions based on an 
analysis of national STAR error trends.
    In addition to the STAR program, C&P Service identifies unusual 
patterns of variance in claims adjudication by diagnostic code, and 
then reviews selected disabilities to assess the level of decision 
consistency among and between regional offices. These studies are used 
to identify where additional guidance and training are needed to 
improve consistency and accuracy, as well as to drive procedural or 
regulatory changes. Over the last 4 years, our quality has risen 
significantly from 81 percent to 89 percent.
    Site surveys of regional offices address compliance with 
procedures, both from a management perspective in the operation of the 
service center and from a program administration perspective, with 
particular emphasis on current consistency issues. Training is 
provided, when appropriate, to address gaps identified as part of the 
site survey.
                                training
    It is critical that our employees receive the essential guidance, 
materials, and tools to meet the ever-changing and increasingly complex 
demands of their decisionmaking responsibilities. To that end VBA has 
deployed new training tools and centralized training programs that 
support accurate and consistent decisionmaking.
    New hires receive comprehensive training and a consistent 
foundation in claims processing principles through a national 
centralized training program called ``Challenge.'' After the initial 
centralized training, employees follow a national standardized training 
curriculum (full lesson plans, handouts, student guides, instructor 
guides, and slides for classroom instruction) available to all regional 
offices. Standardized computer-based tools have been developed for 
training decisionmakers (69 modules completed and an additional 8 in 
development). Training letters and satellite broadcasts on the proper 
approach to rating complex issues are provided to the field stations. 
In addition, a mandatory cycle of training for all Veterans Service 
Center employees has been developed consisting of an 80-hour annual 
curriculum.
                    distribution of rating workload
    To balance the inventory of disability claims across regional 
offices, VBA implemented a ``brokering'' strategy in which rating cases 
are sent from stations with high inventories to other stations with the 
capacity to process additional rating work. Brokering allows the 
organization to address simultaneously the local and national inventory 
by maximizing use of available resources.
    Brokering plans are developed on a monthly basis. Stations are 
selected for brokering based on the percentage gap between their 
current inventory of pending claims and their established end-of-year 
inventory target. Stations with the greatest percentage gap are asked 
to send ready-to-rate cases to other stations for rating decisions. The 
stations participating in brokering changes over time as stations are 
able to bring the pending inventory in line with established targets.
                consolidation of specialized operations
    The consolidation of specialized processing operations for certain 
types of claims has been implemented to provide better and more 
consistent decisions. Three Pension Maintenance Centers were 
established to consolidate the complex and labor-intensive work 
involved in ensuring the continued eligibility and appropriateness of 
benefit amounts for pension recipients. We are exploring the 
centralization of all pension adjudications in these Centers.
    In November 2001, a Tiger Team was established at the Cleveland 
Regional Office to adjudicate the claims of veterans age 70 and older. 
VBA has also established an Appeals Management Center to consolidate 
expertise in processing remands from the Board of Veterans' Appeals. In 
a similar manner, a centralized Casualty Assistance Unit was 
established to process all in-service death claims. VBA has also 
centralized the processing of all pending radiation claims to the 
Jackson RO. The BDD program provides servicemembers with briefings on 
VA benefits, assistance with completing forms, and a disability 
examination before leaving service. The goal of this program is to 
deliver benefits within 60 days following discharge. VBA has 
consolidated the rating aspects of our BDD initiatives, which will 
bring greater consistency of decisions on claims filed by newly 
separated veterans. We also established two Development Centers in 
Phoenix and Roanoke to assist regional offices in obtaining the 
required evidence and preparing cases for decision.
    We are looking for ways to achieve additional organizational 
efficiencies through consolidation of other aspects of our claims 
processing, including death benefits, fiduciary activities, and 
telephone service.
                          inventory reduction
    VBA is aggressively pursuing measures to decrease the pending 
inventory of disability claims and shorten the time veterans must wait 
for decisions on their claims.
    Our pending inventory of rating related claims is currently about 
400,000 claims, and average processing time is 175 days. However, all 
400,000 claims in our inventory should not be considered as 
``backlog''; this number includes all claims, whether pending only a 
few days or a number of months. Under the very best of circumstances, 
it takes about 4 months to fully develop a claim (obtain military and 
private medical records, schedule necessary medical examinations and 
receive results, evaluate evidence, etc.). Based on our projected 
receipts of 800,000 claims and our timeliness performance target of 145 
days, our expected level of pending inventory with no backlog would be 
approximately 318,000 claims.
    We are increasing staffing levels to reduce the pending inventory 
and provide the level of service expected by the American people. We 
began aggressively hiring additional staff in Fiscal Year 2006, 
increasing our on-board strength by over 580 employees between January 
2006 and January 2007. With a workforce that is sufficiently large and 
correctly balanced, VBA can successfully meet the needs of our 
veterans.
    Our plan is to continue to accelerate hiring and fund additional 
training programs for new staff this fiscal year. However, because it 
requires an average of 2 or 3 years for our decisionmakers to become 
fully productive, increased staffing levels do not produce immediate 
production improvements. Performance improvements from increased 
staffing are more evident in the second and third years. We have 
therefore also increased overtime funding this year and recruited 
retired claims processors to return to work as reemployed annuitants in 
order to increase decision output.
                priority processing for oif/oef veterans
    Since the onset of the combat operations in Iraq and Afghanistan, 
VA has provided expedited and case-managed services for all seriously 
injured Operations Iraqi and Enduring Freedom (OIF/OEF) veterans and 
their families. This individualized service begins at the military 
medical facilities where the injured servicemembers return for 
treatment, and continues as these servicemembers are medically 
separated and enter the VA medical care and benefits systems. VA 
assigns special benefits counselors, social workers, and case-managers 
to work with these servicemembers and their families throughout the 
transition to VA care and benefits systems, and to ensure expedited 
delivery of all benefits.
    The Secretary of Veterans Affairs recently announced a new 
initiative to provide priority processing of all OIF/OEF veterans' 
disability claims. This will allow all the brave men and women 
returning from the OIF/OEF theaters who were not seriously injured in 
combat, but who nevertheless have a disability incurred or aggravated 
during their military service, to enter the VA system and begin 
receiving disability benefits as soon as possible after separation.
    Last month, we began processing disability compensation and pension 
claims received from OIF/OEF veterans on a priority basis. This 
initiative covers all active duty, National Guard, and Reserve veterans 
who were deployed in the OIF/OEF theaters or in support of these combat 
operations, as identified by the Department of Defense (DOD).
    We have designated our two Development Centers in Roanoke and 
Phoenix and three of our Resource Centers as a special ``Tiger Team'' 
for processing OIF/OEF claims. The two Development Centers will obtain 
the evidence needed to properly develop the OIF/OEF claims. The three 
Resource Centers, located in Muskogee, San Diego, and Huntington, will 
rate OIF/OEF claims for regional offices with the heaviest workloads. 
Medical examinations needed to support OIF/OEF veterans' claims are 
also being expedited.
    We are expanding our outreach programs for National Guard and 
Reserve components and its participation in OIF/OEF community events 
and other information dissemination activities. An OIF/OEF Team is 
being established at VBA Headquarters to address all OIF/OEF 
operational and outreach issues at the national level and to support 
and assist newly designated OIF/OEF Managers at each regional office. 
The VBA OIF/OEF Team will also direct and coordinate national Memoranda 
of Understanding (MOU) with each of the Reserve Components to formalize 
relationships with them, mirroring the agreement between VA and the 
National Guard Bureau signed in 2005. Having an MOU with each Reserve 
Component will ensure that VA is provided service medical records and 
notified of ``when and where'' Reserve members are available to be 
briefed during the demobilization process and at later times.
    In order to ensure that VA benefits information is provided to all 
separating Guard and Reserve servicemembers, we will work with DOD to 
discuss the possibility of expanding VA's role in DOD's military pre-
separation process. Specifically, we will assess the feasibility of 
providing a new ``Claims Workshop'' in conjunction with VA benefits 
briefings. At such workshops, groups of servicemembers would be 
instructed on how to complete the general portions of the VA 
application forms. Following the general instruction segment, personal 
interviews would be conducted with those applying for individual VA 
benefits.
    Mr. Chairman, this concludes my testimony. I greatly appreciate 
being here today and look forward to answering your questions.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Daniel K. Akaka to 
  Hon. Daniel L. Cooper, Under Secretary for Benefits, Department of 
                            Veterans Affairs
    Question 1. It seems clear that the Department of Defense is 
keeping injured servicemembers on active duty longer than they have in 
the past. What, if any, impact does this have on VA's effort to provide 
timely and accurate adjudication of disability claims?
    Response. The Department of Veterans Affairs (VA) disability 
compensation may not be paid to servicemembers while on active duty, 
therefore the length of time on active duty does not directly affect 
timeliness of claims processing. Since the onset of combat operations 
in Afghanistan and Iraq, we have provided case-managed services to all 
seriously injured servicemembers returning from combat zones, and we 
have made the processing of their claims our highest priority. We have 
assigned benefits counselors to the 10 major military treatment 
facilities (MTF), including Walter Reed Army Medical Center. The 
counselors work with the injured servicemembers, the military, the 
Veterans Health Administration, and family members to explain benefits, 
assist in completing claims, and gather supporting medical records and 
other evidence for the servicemembers' claims for disability 
compensation so that VA disability benefits can be awarded immediately 
following separation from service.
    The involvement of benefits counselors early in the transition also 
allows VA to provide some benefits, such as the Traumatic 
Servicemembers' Group Life Insurance (TSGLI), automobile and adaptive 
equipment, and specially adapted housing benefits, to eligible 
servicemembers while still on active duty.
    As servicemembers are transferred from MTFs to other Department of 
Defense (DOD) facilities or VA care, the benefits counselors notify the 
appropriate regional office of the transfer. All regional offices have 
established points of contact with the MTFs and VA medical centers in 
their jurisdiction to ensure prompt notification of arrival, transfer, 
and discharge of seriously injured servicemembers. All regional offices 
have also designated Operation Enduring Freedom/Operation Iraqi Freedom 
(OEF/OIF) case managers, who maintain regular contact with injured 
servicemembers and veterans to ensure their needs are being met.
    Each claim from a seriously injured OEF/OIF veteran is case-managed 
to ensure expeditious processing. The regional office directors call 
these seriously injured veterans to welcome them home and advise them 
that the OEF/OIF case manager will assist them through the claims 
process.

    Question 2. Please provide to me any written guidance that has been 
given to the field regarding the priority processing of claims from 
veterans of the Global War on Terror.
    Response. All VA regional offices have been provided written 
guidance regarding the requirements to expedite processing of all OEF/
OIF claims. Copies of two Veterans Benefits Administration (VBA) 
letters providing instructions to the regional offices, dated March 8, 
2005 and January 30, 2007, are attached.
    [Copies of the Veterans Benefits Administration letters providing 
instructions to the regional offices follow:]



[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    In addition to the written guidance, the OEF/OIF priority claims 
processing initiative has been extensively discussed with regional 
office directors and managers on several nationwide conference calls. 
Our four area directors have also conducted conferences with the 
regional offices in their jurisdictions covering the procedures and 
expectations for expedited OEF/OIF claims processing. In mid-March, VBA 
hosted a conference attended by the regional office OEF/OIF 
coordinators. This conference provided additional guidance regarding 
services for seriously injured servicemembers and veterans, as well as 
refresher training on case management principles.

    Question 3. At what point in the process of DOD's consideration of 
whether an injured servicemember is going to remain on active duty or 
be processed for separation from the military does VA help 
servicemembers fill out and submit claims for VA compensation? How are 
these claims tracked once they are submitted?
    Response. Our benefits counselors who are working with the 
seriously injured OEF/OIF servicemembers at the MTFs indicate that the 
start of the Military Evaluation Board (MEB) process is usually also 
the best time to begin the VA disability compensation claim process. It 
is at this point that the medical evidence is usually compiled and 
available. Completion of the MEB/Physical Evaluation Board (PEB) 
process and separation from service is usually about 6 months from this 
point. For the very seriously injured OEF/OIF servicemember, the VA 
claims process can often begin earlier in connection with claims for 
benefits payable while on active duty, such as the automobile and 
adaptive equipment grant.
    Servicemembers who are in ``medical hold'' are also provided 
opportunities to participate in our Transition Assistance Program (TAP) 
and Disabled Transition Assistance Program (DTAP) briefings, where 
benefits counselors are available to assist in preparing and submitting 
claims for benefits. For those who are not seriously injured, it is 
appropriate to begin the VA disability claims process at the time of 
referral to the PEB (following the MEB ``fitness for duty'' decision).
    Controls are established in our Benefits Delivery Network 
processing system to track and monitor claims from seriously injured 
OEF/OIF veterans. Each claim from a seriously injured OEF/OIF veterans 
also case-managed to ensure expeditious processing.
    We are very excited about a new application that will provide VA 
with the ability to track servicemembers from the battlefield through 
Landstuhl, Germany, the MTFs, and on to the VA medical facility. The 
new application, known as the Veterans Tracking Application (VTA), is a 
modified version of DOD's Joint Patient Tracking Application--a Web-
based patient tracking and management tool that collects, manages, and 
reports on patients arriving at MTFs from forward deployed locations.
    The VTA Web-based system allows approved VA users to access this 
real-time information about the servicemembers we serve and track 
injured active duty servicemembers while they transition to veteran 
status. VTA will have all medically evaluated OEF/OIF servicemembers in 
the database as necessary to provide VA care and benefit claims 
support. This application was developed for VA to coordinate care from 
an MTF to a VA medical center to ensure that VA will know where the 
servicemember is currently located, where the patient came from, and 
who has seen the patient. The application is also designed to identify 
where servicemembers filed claims and which VBA counselor assisted the 
servicemember in the claims process. The application has an historic 
record feature to ensure we preserve all status changes. Full 
implementation was completed at the end of April.

    Question 4. What is the status of VBA's efforts to move toward 
electronic claims files?
    Response. This question concerning ``electronic claims files'' 
appears to relate to our efforts to expand our use of electronic data 
and records in place of paper records. We are working to integrate 
``paperless'' processing into our data and information systems and 
processing procedures. We are using imaging technology to support 
paperless processing in all of our education and insurance benefits 
programs. We are also incorporating imaging technology and electronic 
records in our pension program processing.
    We are now conducting a pilot program to incorporate imaging 
technology in our disability compensation processing as well. Our pilot 
program involves claims from recently separated veterans filed through 
our Benefits Delivery at Discharge Program. We are receiving the 
veterans' service medical records electronically and are maintaining 
electronic claims folders for all claims filed under this pilot 
program.
    We believe that our pilot program will successfully demonstrate the 
feasibility of this technology in the disability compensation program 
for newly separated servicemembers. However, because of the magnitude 
of the paper records we store, the extent to which we can 
``paperlessly'' process claims from veterans of all periods of service 
has yet to be determined. VA stores and maintains over four million 
active claims files and 20 million inactive files. In addition to the 
tremendous volume of records, much of the evidence VA receives includes 
handwritten and often fragile documents, particularly for veterans of 
earlier periods of service, which present unique challenges.

    Question 5. Should VA's estimate of 800,000 claims receipts be 
exceeded in Fiscal Year 2007, what measures does VA plan to take to 
avoid any negative effect on the claims inventory?
    Response. Increasing staffing levels is essential to handling the 
current high volume of incoming claims and minimizing any negative 
effect further increases might have on the claims inventory. We began 
aggressively hiring additional staff in fiscal 2006, increasing our on-
board strength by over 580 employees between January 2006 and January 
2007. We are continuing to accelerate hiring, adding 400 additional 
employees by the end of June. Our budget submission for 2008 requests 
an increase of 450 full time employees. We have also increased overtime 
funding this year and recruited retired claims processors to return to 
work as reemployed annuitants in order to increase decision output.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Barack Obama to 
  Hon. Daniel L. Cooper, Under Secretary for Benefits, Department of 
                            Veterans Affairs
    Question 1. DOD Coordination. I appreciated your comments about 
expanding the VA's role in DOD's military pre-separation process, 
although I think we need to be more systematic than simply offering a 
new VA ``Claims Workshop'' to servicemembers. I've shared the deep 
concern and outrage of many of my colleagues here today about the 
situation at Walter Reed and how DOD manages its own disability review 
process, which itself struggles under the weight of long delays and 
chronic understaffing.

    Question 1(a). Could you provide further comment on concrete and 
more systematic steps that might be taken to coordinate or integrate VA 
and DOD disability review processes to ease the transition of wounded 
and recovering servicemembers?
    Response. The Secretary of Veterans Affairs chaired the President's 
Interagency Task Force on Returning Global War on Terror Heroes, which 
reviewed VA and DOD disability benefits processes. The just-released 
Task Force Report recommends development of a joint DOD/VA process for 
disability benefits determinations by establishing a cooperative 
Medical and Physical Evaluation Board process within the military 
service branches and the VA care system.

    Question 1(b). Until more systematic coordination occurs between 
DOD and VA, what other steps have been taken by VA to follow GAO's 
previous recommendation that regional offices use an alternative 
resource for obtaining military records, prior to going through the 
inadequate Joint Service Records Research Center (JSRRC), which 
averages 1 year to turn around requests?
    Response. VA established an intranet link to VBA-sanctioned Web 
sites to assist field personnel in using research resources to expedite 
the processing of post traumatic stress disorder (PTSD) claims. RO 
personnel access these sites before sending an inquiry to JSRRC.
    VA has organized a special help team to review the cases from JSRRC 
in an attempt to reduce some of the current backlog. The special help 
team is tasked with reviewing requests currently pending at JSRRC to 
determine if any of the cases can be resolved with the research 
resources available at the regional offices.
    VA is developing a training curriculum to train regional office 
personnel in the basics of military records research, which will reduce 
the number of cases referred to JSRRC.

    Question 2. Staffing levels. I think it's fair to say I share the 
skepticism of some of my colleagues about the agency's assumptions 
regarding the anticipated number of claims in Fiscal Year 2008, which 
you've stated is expected to be 800,000.
    Question 2(a). Could you discuss in detail the assumptions VA used 
in reaching this number, especially in light of the 39 percent increase 
we've seen in claims since 2000 and the growing number of returned 
servicemembers from OEF/OIF? On that count alone, there are more than 
631,000 discharged servicemembers who are eligible for some form of 
care or benefits within the VA system.
    Response. Our budget estimation model forecasts disability 
compensation benefits for veterans of all periods of service using a 
complex combination of historical data, current experience, workload 
and performance projections, and assumptions. The model forecasts 
obligations and outlays for 10 years. This method has been determined 
to be a reliable method for projecting compensation costs and future 
liability.
    Our workload estimates for disability claims receipts are based on 
a number of factors to include historical workload trend data, veteran 
census data, staffing and other known factors impacting receipts. The 
process has yielded adjusted workload projections within approximately 
1 percent of actual receipts when viewed over the last five fiscal 
years. The current wars in Afghanistan and Iraq are an important 
workload variable that must continue to be considered. We believe our 
process is adequately adjusted for workload changes resulting from the 
wars and will allow VA to receive the resources to properly care for 
this Nation's returning servicemembers.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Larry E. Craig to 
  Hon. Daniel L. Cooper, Under Secretary for Benefits, Department of 
                            Veterans Affairs
    Question 1. In recent years, thousands of claims were filed that 
all sought the same relief--dual ratings for bilateral ringing in the 
ears. It is my understanding that, while the courts tried to resolve 
the underlying legal issue, these cases were essentially proceeding 
separately up and down the system, creating workload spikes at all 
levels of the process.

    Question 1(a). What impact did this have at the VA regional offices 
and at BVA?
    Response. VA has had a longstanding policy that a veteran is 
entitled to only a single evaluation for tinnitus (ringing in the 
ears), whether that condition manifests itself in one ear, both ears, 
or the head. Because claims for multiple evaluations for tinnitus began 
appearing at the Court of Appeals for Veterans Claims (CAVC), VA, in 
May 2003, amended the diagnostic code for tinnitus in the rating 
schedule by adding a note, which expressly prohibits multiple 
evaluations for this condition. Anticipating VA's clarification of the 
rating schedule, numerous claimants began filing claims for multiple 
ratings for tinnitus in the hope that the claims would be adjudicated 
under what was believed to be a more liberal application of the law 
allowing for multiple evaluations. On April 5, 2005, the CAVC, in Smith 
v. Nicholson, held that VA's rating schedule prior to the May 2003 
addition of the note allowed for multiple ratings for tinnitus. In 
total, fewer than 5,000 tinnitus claims had been filed or were pending 
at the Board of Veterans' Appeals (Board or BVA) when the Court 
rendered its decision in Smith. On April 22, 2005, the Secretary 
directed the BVA Chairman to impose a stay on all bilateral tinnitus 
claims pending at the BVA that could be affected by Smith, and at the 
same time, VBA stayed further processing of such claims.
    The CAVC issued its judgment in Smith on April 27, 2005, and the 
Secretary immediately appealed the decision to the United States Court 
of Appeals for the Federal Circuit.
    The Federal Circuit ruled in favor of VA's position and reversed 
the CAVC decision in a June 19, 2006, decision. Following that 
decision, VA proceeded to adjudicate and deny these claims. The Supreme 
Court denied the appellant's petition for consideration of the Federal 
Circuit's decision.
    We believe that the prompt decision to stay claims affected by the 
CAVC's decision in Smith served to avoid burdens on the adjudication 
system and delays in adjudication of other claims, and to ensure 
consistent adjudication following the resolution of the legal issues by 
the Federal Circuit Court. Additionally, it prevented an unnecessary 
flood of appeals to the Board of Veterans' Appeals and CAVC. As soon as 
all legal challenges were exhausted, claims affected by the stay were 
adjudicated expeditiously.

    Question 1(b). If similar claims were either consolidated or stayed 
early in the process, what do you believe would be the result?
    Response. As noted above, we believe that VA's stay of tinnitus 
claims was essential to managing VA's case load and ensuring efficient 
and consistent action pending the resolution of the important issue on 
appeal in Smith. More recently, however, in Ribaudo v. Nicholson, the 
CAVC held that VA does not have the power to stay the adjudication of 
cases affected by a CAVC decision that VA has appealed to the Federal 
Circuit unless VA first obtains the court's permission. Although the 
full scope and impact of this decision are not clear, it may have a 
significant effect on VA's ability to manage its case load efficiently 
in response to court decisions having broad impact on the VA 
adjudication system. We continue to believe that the Secretary has the 
inherent authority to stay an adjudication pending the resolution of an 
important legal question in order to ensure the integrity of the 
administration of a particular VA benefit and that the integrity of the 
system can be preserved only if VA is able to move quickly rather than 
await a CAVC decision on a stay request, which would likely require 
time-consuming briefing by the parties and a written decision on the 
request by the court.

    Question 2. I was very pleased to learn that, in addition to 
providing expedited decisions to severely injured veterans of OEF/OIF, 
VA is now providing priority claims processing for all OEF/OIF 
veterans.

    Question 2(a). Does VA have performance goals in place for those 
veterans' claims for the VA regional offices and BVA? If so, what are 
they?
    Response. In February 2007 VA began processing all disability 
compensation and pension claims received from OEF/OIF veterans on a 
priority basis. This initiative covers all active duty, National Guard, 
or Reserve veterans who were deployed in the OEF/OIF theaters or in 
support of the Global War on Terror (GWOT), as identified by DOD. 
However, in many of these cases, all the evidence necessary to make a 
decision regarding a claimant's entitlement to benefits has not been 
received by VA. While we have expedited the gathering of evidence, the 
scheduling of medical examinations, and the preparation of the claims 
decision, this expedited process will in most cases still take a number 
of months to complete. Our goal is to reduce the process to 100 days 
for OEF/OIF veterans, compared with the current average of 178 days for 
all veterans' claims.

    Question 2(b). Would you please provide the Committee with an 
update on how many of these claims VA has received since these policies 
were instituted; how many of those claims have been decided and the 
average time it took to render those decisions; how many are still 
pending and how long on average they have been pending; how many of 
these claims have been granted and how many have been denied; what 
percentage have been awarded service connection with disability ratings 
in excess of 10 percent; what are the nature of the claimed 
disabilities and the disabilities for which service connection was 
granted; and what is the accuracy rate for decisions on these claims? 
If this information is not available due to data limitations, please 
provide the Committee with a time frame within which that information 
will be available and can be provided to the Committee.
    Response. VA receives a data file from DOD identifying veterans who 
were deployed in support of GWOT. We match this data file with data 
from VA's information systems to track health care and benefits usage 
by GWOT veterans.
    The most recent update from DOD includes veterans discharged 
through November 2006. This data file was compared to VA records 
through February 2007. This match identified 181,966 GWOT veterans who 
have filed a claim for disability benefits either prior to or following 
their GWOT deployment (approximately 26 percent of 689,317 total GWOT 
veterans).
    Many GWOT veterans had earlier periods of service, and they filed 
for and received VA disability benefits before their most recent 
deployment. VBA's computer systems do not contain any data that would 
allow us to attribute veterans' disabilities to a specific period of 
service or deployment.
    Of the 181,966 GWOT veterans who have filed a claim either prior to 
or following their GWOT deployment, 136,189 were awarded service-
connected disability compensation, 17,241 were denied, and 28,536 have 
claims pending. Among those awarded service-connected disability 
compensation, 83,676 (61 percent) received a combined degree of 
disability rating greater than 10 percent.
    The charts that follow provide a breakdown of those awarded 
service-connected disability by combined degree of disability and the 
most frequently claimed service-connected disabilities.

                    GWOT Veterans Awarded Service Connection by Combined Degree of Disability
----------------------------------------------------------------------------------------------------------------
               Combined Degree (in percent)                   Reserve Guard      Active Duty          Total
----------------------------------------------------------------------------------------------------------------
0.........................................................            10,551            11,380            21,931
10........................................................            12,763            17,819            30,582
20........................................................             6,738            13,343            20,081
30........................................................             5,060            13,202            18,262
40........................................................             4,195            11,290            15,485
50........................................................             2,155             6,430             8,585
60........................................................             2,241             6,548             8,789
70........................................................             1,348             3,952             5,300
80........................................................               965             2,528             3,493
90........................................................               404             1,039             1,443
100.......................................................               719             1,519             2,238
                                                           -----------------------------------------------------
    Total.................................................            47,139            89,050           136,189
----------------------------------------------------------------------------------------------------------------


   Ten Most Frequent Service-Connected Disabilities for GWOT Veterans
                  [Both Active Duty and Reserve/Guard]
------------------------------------------------------------------------
          Diagnostic Code             Diagnosis Description      Count
------------------------------------------------------------------------
6260..............................  Tinnitus.................     39,120
5237..............................  Lumbosacral or cervical       33,904
                                     strain.
6100..............................  Defective hearing........     28,589
5299..............................  Generalized, Elbow and        22,813
                                     Forearm, Wrist, Multiple
                                     Fingers, Hip and Thigh,
                                     Knee and Leg, Ankle,
                                     Foot, Spine, Skull,
                                     Ribs, Coccyx.
9411..............................  Post-Traumatic Stress         17,644
                                     Disorder.
5271..............................  Limited motion of the         16,907
                                     ankle.
5260..............................  Limitation of flexion of      16,556
                                     leg.
5242..............................  Degenerative arthritis of     12,834
                                     the spine.
5201..............................  Limitation of motion of       12,127
                                     arm.
7101..............................  Hypertensive vascular         12,084
                                     disease (essential
                                     arterial hypertension).
------------------------------------------------------------------------

    We are unable to provide an accuracy rate specific to claims 
received from veterans deployed in support of GWOT. VBA's quality 
review program includes a random sampling across all claims filed for 
compensation and pension, including those submitted by veterans of this 
cohort. However, we do not isolate accuracy for any particular sub-
group of the veteran population. We also do not yet have a means of 
separately track and measure timeliness of processing for GWOT claims. 
A reporting system is being developed to track these claims.

    Question 3. In 2005, the GAO reported that there are ``large 
performance variations'' among the regional offices. For the lowest 
performing offices, would you please provide a comparison of their 
performance outcomes to the national performance outcomes over the past 
5 years?
    Response. We are providing the data requested for the 10 regional 
offices currently experiencing the longest claims processing times. VBA 
has taken measures to assist with the processing of veterans claims at 
each of the listed facilities. For example:
     The New Orleans Regional Office (RO) was severely impacted 
by Hurricane Katrina. We have temporarily transferred (``brokered'') 
work from this facility to other ROs with the capacity to process 
additional work to minimize the impact on veterans within that 
jurisdiction.
     The Pittsburgh RO was recently assigned jurisdiction of 
the overseas foreign workload. The processing of foreign claims takes 
considerably longer, as it involves working with foreign embassies to 
obtain medical examinations and other evidence. During the same period, 
the RO lost a significant number of its most experienced personnel 
through retirements.
     The Chicago RO received an increase in incoming claims as 
a result of the special Six State Outreach Initiative. We have 
authorized the Chicago RO to hire additional claims processors and have 
brokered work to other regional offices to better serve veterans in 
this area.
     To better serve the veterans residing in the Washington, 
DC area, the Roanoke RO recently assumed jurisdiction for the majority 
of claims previously assigned to the Washington RO.
     To improve benefits delivery to veterans served by the Los 
Angeles RO, jurisdiction of claims from veterans residing in Orange 
County, CA, was reassigned to San Diego.


----------------------------------------------------------------------------------------------------------------
                                                                                                       February
     Average Days to Complete           2002         2003         2004         2005         2006         2007
----------------------------------------------------------------------------------------------------------------
Nation............................        223.4        181.5        165.5        166.8        177.1        177.4
Washington........................        377.2        266.3        159.4        195.6        251.2        306.3
Pittsburgh........................        147.2        112.1        167.6        186.5        219.7        260.3
New York..........................        273.6        230.0        207.4        188.8        229.6        258.4
New Orleans.......................        166.9        150.3        156.5        153.8        269.4        249.3
Anchorage.........................        287.9        232.3        187.4        190.7        241.8        247.3
Des Moines........................        223.0        217.7        191.4        209.5        221.4        245.5
Reno..............................        329.6        261.8        197.6        187.6        203.9        239.9
Chicago...........................        190.6        133.4        185.6        203.7        226.5        237.9
Newark............................        309.5        276.3        200.9        179.2        232.7        230.8
Los Angeles.......................        239.6        217.4        206.3        211.6        237.4        226.5
----------------------------------------------------------------------------------------------------------------

    Chairman Akaka. Thank you, Admiral Cooper, for your 
testimony.
    And now I call on the Honorable James P. Terry, Chairman of 
the Board of Veterans' Appeals.

STATEMENT OF HON. JAMES P. TERRY, CHAIRMAN, BOARD OF VETERANS' 
 APPEALS; ACCOMPANIED BY RON GARVIN, VICE CHAIRMAN; AND STEVE 
              KELLER, SENIOR DEPUTY VICE CHAIRMAN

    Mr. Terry. Good morning, Mr. Chairman. I greatly appreciate 
the opportunity to be here today to discuss with you and the 
other Members of the Committee the Board of Veterans' Appeals' 
role in the VA benefits claims system.
    Mr. Chairman, I am joined today by Mr. Ron Garvin, the Vice 
Chairman of the BVA, to my immediate left, and Steve Keller, 
the Senior Deputy Vice Chairman, two integral parts of our 
leadership team, and I am delighted they could be here this 
morning.
    Mr. Chairman, I will address Board productivity, the 
accuracy of our decisions, current issues affecting the Board, 
and a review of those actions we are currently taking to 
improve the claims adjudication and appeals process in my 
remarks this morning.
    Mr. Chairman, the Board's mission is essentially unchanged 
since its establishment in 1933, and that is, of course, to 
conduct hearings and consider and dispose of appeals properly 
before the Board in a timely manner. The Board renders final 
decisions on behalf of the Secretary in all appeals of adverse 
decisions issued under a law that affects the provision of VA 
benefits. These appeals most commonly arise from decisions of 
VA regional offices, but they can also include those arising 
from decisions by VA medical centers. Although the Board is an 
appellate body, it has fact-finding authority and provides a 
fresh look at the law and evidence in each case it considers. 
In addition to ruling on the merits of the claim, the Board may 
direct further development of the evidence and readjudication 
of the claims at issue by the agency of original jurisdiction, 
be it the regional office or the VAMC, if it is necessary to 
fairly consider the appeal by our Board.
    The Board has jurisdiction, as the Committee is well aware, 
over a wide variety of issues and matters, but the vast 
majority of appeals involve claims for disability compensation 
benefits, and these, of course, encompass approximately 95 
percent of our total caseload.
    As I testified before the Committee in July of last year, 
two of the Board's most important initiatives are: first, to 
contain and reduce the backlog of appeals by increasing 
decision productivity while maintaining high quality; and, 
second, to improve timeliness and service to veterans by 
eliminating avoidable remands.
    Mr. Chairman, I am happy to report that we have had much 
success in working toward both these goals, as demonstrated by 
comparing last year's performance with that of prior years.
    In Fiscal Year 1994, for example, the Board issued 22,000 
decisions with 442 full-time equivalent employees, or FTEs. Our 
pending caseload stood at 47,000 and was on its way to 60,000. 
By Fiscal Year 1998 we had significantly improved our 
productivity by issuing 38,000 decisions and holding 4,800 
hearings with 483 FTEs--a much enlarged staff.
    Most recently, in Fiscal Year 2006, the Board issued 39,076 
decisions, but with far fewer FTEs than we had in either one of 
those years. We also conducted 9,158 hearings, the highest 
number ever by the Board, and almost twice as many hearings as 
in 1998.
    The Board's most significant challenge is to eliminate the 
growing backlog with available resources. We will continue to 
use our resources as efficiently and as effectively as possible 
to meet this challenge. However, despite our best efforts, we 
continue to receive more appeals than we are deciding. Cases 
pending at the start of Fiscal Year 2006 stood at 37,000 and by 
the end of the year rose to 40,000, this despite the fact that 
the Board issued 4,901 more decisions in Fiscal Year 2006 than 
in the preceding year.
    To enable the Board to eliminate the growing backlog, the 
two most important goals for the Board are to continue to 
reduce avoidable remands and increase productivity.
    In regard to remands, we know that veterans want timely and 
correct decisions with respect to their claims for benefits. 
For the Board to do that, the record must contain all necessary 
evidence to decide the claim and show that all necessary 
procedural protections have been provided. If the record does 
not meet these requirements and the benefits sought cannot be 
granted, a remand for further development by the agency of 
original jurisdiction is necessary.
    Remands significantly lengthen the amount of time it takes 
for a veteran to receive a final decision. A remand adds about 
a year to the appellate process. Remands not only delay 
individual cases, but divert resources from deciding new 
appeals. About 75 percent of cases remanded are returned to the 
Board, which increases our workload and further degrades 
timeliness; that is, we have to see the case twice. We decide 
it first on the remand, and we have to look at it again and 
decide it once again when it comes back.
    In addition, by law we must decide the oldest cases first. 
Processing newer appeals is, therefore, delayed when remanded 
appeals are returned to the Board for readjudication. Hence, 
eliminating avoidable remands is a goal that will provide 
better service to veterans and their families and ultimately 
will contribute to diminishing the growing backlog.
    Since Fiscal Year 2005, we began working in concert with 
Admiral Cooper and the Veterans Benefit Administration to avoid 
remands to the extent possible. We--and I include Admiral 
Cooper's team because they have done a magnificent job--have 
made great progress in reducing avoidable remands. To 
illustrate briefly, in Fiscal Year 2003 the Board issued 31,000 
decisions with a remand rate of 42 percent. In Fiscal Year 
2004, while the number of decisions issued increased to 38,000, 
the remand rate soared to 56 percent. In Fiscal Year 2006, we 
issued 34,175 decisions, but the remand rate was reduced from 
56 percent to 38 percent, and that is a very, very significant 
decline.
    Now, we are happy to report that in Fiscal Year 2006 we 
issued 39,000 decisions with a remand rate of only 32 percent, 
showing the fruits of our labor. We expect to see the remand 
rate hold at about that level or improve even further during 
Fiscal Year 2007 as the Board begins to reach cases on our 
docket that were first decided by VBA following the initiation 
of its efforts to reduce avoidable remands.
    By ``avoidable'' remands, we are referring to a class of 
cases in which a remand could have been avoided if the case was 
properly processed and reviewed in accordance with existing 
laws and regulations. It is important to note that under the 
current adjudication system, a certain percentage of remands 
are expected for various reasons certainly beyond VA's control, 
that is, both beyond the control of the VBA and the Board. For 
example, some cases must be remanded to address intervening 
changes in the law, as we have seen with regard to the VCAA. Or 
it could be that new medical evidence is brought forward or 
changes in a medical condition or other due process 
considerations. On the other hand, some remands can be avoided 
by careful development of the record and application of the 
appropriate law, as well as close analysis of the record and 
consideration of a harmless error analysis. These latter two 
points are certainly within the Board's area of responsibility, 
and we are working very hard to carefully find within the four 
corners of every case that sufficient evidence to decide the 
case and not have to ask the VBA to look at it again. And 
certainly consideration of harmless error analysis is a very 
important part of our work, as it is with the CAVC.
    We will continue to work closely not only with VBA, but 
with the Office of General Counsel and the Veterans Health 
Administration to identify and track the root causes of remands 
in order to provide training that will eliminate avoidable 
remands. Our training efforts have been considerable to date. 
Critical training sessions on remand avoidance have been held 
for all veterans law judges and staff counsel. We have also 
held joint training sessions with VBA, including a national 
video broadcast on avoidable remands and evidence development. 
We have conducted numerous sessions on a variety of medical and 
legal subjects within our jurisdiction, all designed to reduce 
remands and improve quality.
    Additionally--and this is a very important point--each of 
our Travel Boards meets on a regular basis on the last day of 
the Travel Board with regional office personnel to answer 
questions and discuss areas of concern. Finally, we recently 
completed work with VHA and VBA on the Compensation and Pension 
Examination Project, which, by improving the quality of VA 
compensation medical examinations, will reduce a major cause of 
remands. This is especially important in the mental health 
area. Until we gain the ability to examine in a constructive 
and contextual way--that is, where there is continuity in the 
questioning--in order to ensure that each veteran is examined 
with a contextual set of questions to perform a baseline, we 
will not be able to evaluate effectively the range of 
disabilities in each of our veterans. And that is what the CPEP 
project has done, and we think it is very, very important.
    Another important challenge for the Board is to work 
closely with the 57 regional offices and the Veterans Service 
Organizations to ensure that our Travel Boards are dispatched 
as soon as a sufficient docket is created so that the hearing 
can take place as quickly as possible.
    In 2006, Mr. Chairman, in addition to the 106 scheduled 
Travel Boards, 8 unscheduled trips to Montgomery, Oakland, 
Columbia, Atlanta, Seattle, Detroit, Phoenix, and New York were 
added after the schedule was set, for a total of 114 Travel 
Boards for the year. In each one of these Travel Boards, Mr. 
Chairman, we asked our judges to hold 43, approximately hour-
long, hour-plus, hearings during the course of that week. And 
if it is a 2-week session, we get 86 from each judge. We try to 
send at least two judges on each one of these trips. In the 
case of St. Petersburg, we will be sending four this year each 
month. So it is a significant number of hearings, and soon as a 
docket is ready, we try to get the hearing teams out there. And 
of the 106 scheduled Travel Boards last year, 5 were split 
trips, which visited two ROs--Lincoln/Des Moines, Fargo/Sioux 
Falls, Fort Harrison/Boise, Denver/Cheyenne, and Togus/White 
River Junction. And as I mentioned, on the last day of each of 
our Travel Boards we offer training and assistance by our staff 
to the RO adjudication staff.
    Of course, this is as much a benefit to our Board as it is 
to Admiral Cooper's staff, and by that I mean every case that 
is sufficiently developed that we do not have to return means 
it is one-half the workload for us, as well as for the VBA 
staff.
    Although much has been done, we still have much to do in 
increasing productivity at the Board. Within existing resources 
and by way of incentives and sound management, we will continue 
to improve. And these are the things we are doing on the Board, 
and I would like to outline them.
    In addition to eliminating avoidable remands, we are trying 
to strengthen our interagency partnerships, working with 
General Counsel and Admiral Cooper's staff and VHA, to improve 
decision quality and joint training efforts.
    We are writing shorter and more concise decisions. When I 
came into the Board, one of the concerns we identified was a 
need to emphasize the analysis of the facts in the context of 
existing law rather than including long factual recitations in 
each decision. And we have eliminated that, and we are writing 
more concise, more carefully coherent and clear decisions. And 
I think that really is aiding us in getting more productivity 
out of each of our staff attorneys and judges.
    We are also utilizing employee incentives, a strong 
mentoring program, and as I mentioned, working joint training 
with other organizations.
    Chairman Akaka. Mr. Terry, will you please wrap up your 
statement?
    Mr. Terry. Yes, sir. Absolutely.
    This year, certainly in 2007, we are hopeful of increasing 
the funding for our organization. In the 2008 budget, the 
President has suggested and certainly we expect the Congress 
will support an increase of 31 FTEs among our attorney ranks, 
and this will certainly make a significant difference in our 
ability to better serve veterans.
    Certainly, we would be delighted to take any questions you 
might have, sir. Thank you for this opportunity.
    [The prepared statement of Mr. Terry follows:]
          Prepared Statement of Hon. James P. Terry, Chairman, 
                       Board of Veterans' Appeals
    Good morning, Mr. Chairman. It is a pleasure to be here today to 
discuss with you, the Members of the Committee, and your staff, the 
Board of Veterans' Appeals' (Board's) role in the VA benefits claims 
system. I will address Board productivity, the accuracy of our 
decisions, current issues affecting the Board, and a review of those 
actions we are taking to improve the claims adjudication and appeals 
process.
    The Board's mission, as set forth in Chapter 71 of Title 38, United 
States Code, is essentially unchanged since its establishment in 1933--
``to conduct hearings and consider and dispose of appeals properly 
before the Board in a timely manner.'' The Board renders final 
decisions on behalf of the Secretary on all appeals of adverse 
decisions issued under a law that affects the provision of VA benefits. 
These appeals most commonly arise from decisions of VA regional 
offices, but also include those arising from decisions by VA medical 
centers. Although the Board is an appellate body, it has fact-finding 
authority and provides a fresh look at the law and evidence in each 
case it considers. In addition to ruling on the merits of a claim, the 
Board may direct further development of the evidence and readjudication 
of the claims at issue by the agency of original jurisdiction (AOJ) if 
it is necessary to fairly consider the appeal.
    The Board has jurisdiction over a wide variety of issues and 
matters, but the vast majority of appeals involve claims for disability 
compensation benefits, such as claims for service connection, an 
increased rating, or survivor's benefits, which were denied at the VA 
regional office level. The Board's objective is to produce well-
reasoned, accurate, timely, and fair appellate decisions in all the 
cases that come before us.
    As I testified before this Committee on July 13, 2006, two of the 
Board's most important initiatives are (1) to contain and reduce the 
backlog of appeals by increasing decision productivity, while 
maintaining high quality, and (2) to improve timeliness and service to 
veterans by eliminating avoidable remands in order to issue more final 
decisions.
    I am happy to report that we have had much success in working 
toward both these goals, as demonstrated by comparing our past 
performance with that of recent years.
    In Fiscal Year 1994, the Board issued 22,045 decisions with 442 
full-time equivalent employees (FTE). Our pending caseload stood at 
47,148, and was on its way to 60,000. By Fiscal Year 1998, we had 
significantly improved our productivity by issuing 38,886 decisions and 
holding 4,875 hearings, with 483 authorized FTE.
    Most recently, in Fiscal Year 2006, the Board issued 39,076 
decisions. We also conducted 9,158 hearings, the highest number ever by 
the Board, and almost twice as many hearings as in 1998.
    The Board's most significant challenge for the future is to 
eliminate the growing backlog. We will continue to use our resources as 
efficiently and effectively as possible to meet this challenge. 
However, despite our best efforts, we continue to receive more appeals 
than we are deciding. Cases pending at the start of Fiscal Year 2006 
stood at 37,539, and by the end of the year rose to 40,265. This is 
despite the fact that the Board issued 4,901 more decisions in Fiscal 
Year 2006 than in the previous year.
    To enable the Board to eliminate the growing backlog, the two most 
important goals for the Board are to continue efforts to reduce 
avoidable remands and increase productivity. In regard to remands, we 
know that veterans want timely and correct decisions with respect to 
their claims for benefits. For the Board to do that, the record must 
contain all evidence necessary to decide the claim and show that all 
necessary procedural protections have been provided. If the record does 
not meet these requirements, and the benefits sought cannot be granted, 
a remand for further development by the AOJ is necessary.
    Remands significantly lengthen the amount of time it takes for a 
veteran to receive a final decision. A remand adds about a year to the 
appellate process. Remands not only delay individual cases, but divert 
resources from deciding new appeals. About 75 percent of cases remanded 
are returned to the Board, which increases our workload and further 
degrades timeliness. In addition, because by law we generally must 
decide the oldest cases first, processing of newer appeals is delayed 
when remanded appeals are returned to the Board for readjudication. 
Hence, eliminating avoidable remands is a goal that will provide better 
service to veterans and their families and, ultimately, will contribute 
to diminishing the growing backlog.
    Since Fiscal Year 2005, when we began working concertedly with the 
Veterans Benefit Administration (VBA) to avoid remands to the extent 
possible, we have made great progress in reducing avoidable remands. To 
illustrate briefly, in Fiscal Year 2003, the Board issued 31,397 
decisions, with a remand rate of 42.6 percent. In Fiscal Year 2004, 
while the number of decisions issued increased to 38,371, the remand 
rate soared to 56.8 percent. In Fiscal Year 2005, we issued 34,175 
decisions of which 38.6 percent were remanded in whole or part. We are 
happy to report that in Fiscal Year 2006, we issued 39,076 decisions, 
with a remand rate of only 32 percent. We expect to see the remand rate 
to hold its own or improve even further during Fiscal Year 2007, as the 
Board begins to reach cases on our docket that were first decided by 
VBA following the initiation of its efforts to reduce avoidable 
remands.
    By ``avoidable'' remands, we are referring to a class of cases in 
which a remand could have been avoided if the case was properly 
processed and reviewed in accordance with existing laws and 
regulations. It is important to note that under the current 
adjudication system a certain percentage of remands are expected for 
various reasons beyond VA's control. For example, some cases must be 
remanded to address intervening changes in the law, new medical 
evidence, changes in medical condition, or other due process 
considerations. On the other hand, some remands can be avoided by 
careful development of the record and application of the appropriate 
law, as well as close analysis of the record and consideration of a 
harmless error analysis.
    We continue to work closely not only with VBA, but with the Office 
of General Counsel (OGC) and the Veterans Health Administration (VHA) 
to identify and track the root causes of remands in order to provide 
training that will eliminate avoidable remands. Our training efforts 
have been considerable. Several training sessions on remand avoidance 
have been held for all Veterans Law Judges (VLJs) and staff counsel. We 
have also held joint training sessions with VBA, including a national 
video broadcast, on avoidable remands and evidence development. We have 
conducted numerous sessions on a variety of medical and legal subjects 
within our jurisdiction--all designed to reduce remands and improve 
quality. Additionally, each of our Travel Boards has met with regional 
office (RO) personnel to answer questions and/or discuss shared areas 
of concern. Finally, we are working with VHA and VBA on the 
Compensation and Pension Examination Project (CPEP), which, by 
improving the quality of VA compensation medical examinations, will 
reduce a major cause of remands.
    Another important challenge for the Board is to work closely with 
the 57 ROs and the Veterans Service Organizations to ensure that Travel 
Boards are dispatched as soon as a sufficient number of cases that are 
nearing their place on the Board's docket are ready for hearing. In 
2006, in addition to 106 scheduled Travel Boards, 8 unscheduled trips 
to Montgomery, Oakland, Columbia, Atlanta, Seattle, Detroit, Phoenix, 
and New York were added after the ROs provided notice that the docket 
was ready, for a total of 114 Travel Boards for the year. Of the 106 
scheduled Travel Boards, 5 were split trips which visited two ROs 
(Lincoln/Des Moines, Fargo/Sioux Falls, Ft. Harrison/Boise, Denver/
Cheyenne, and Togus/White River Junction). On the last day of each of 
our Travel Boards, we offer training and assistance by our staff 
attorneys to the RO adjudication staff. This is as much of a benefit to 
the Board as to the RO staff, if it precludes one case from being 
returned to the RO from the Board via remand for further development.
    Although much has been done, we still have much to do in increasing 
productivity at the Board. Within existing resources, and by way of 
incentives and sound management, we will continue to improve by:

    (1) Eliminating avoidable remands;
    (2) Strengthening our intra-agency partnerships: Our joint training 
efforts with VBA, OGC, and VHA are improving decision quality and 
reducing remands;
    (3) Writing shorter and more concise decisions: We continue to 
train and encourage our VLJs and counsel to write clear, concise, 
coherent, and correct decisions;
    (4) Utilizing employee incentive, mentoring and training programs: 
A number of new programs have been introduced to increase employee 
motivation and satisfaction, as well as to increase productivity and 
decision quality;
    (5) Making judicious use of overtime: We will use overtime within 
existing resources to enhance productivity;
    (6) Increasing our use of paralegals: We will increase the use of 
our paralegals for non-decisional support activities, freeing up our 
legal staff to decide appeals;
    (7) Providing improved online legal research tools and analytical 
frameworks to aid timely and correct decision production;
    (8) Succession Planning: The Board will continue its rigorous 
associate counsel recruitment program to hire the best and brightest 
attorneys available;
    (9) Improve Quality: The Board will use its quality review process 
to identify areas of concern that require follow-up training;
    (10) VLJs will draft some decisions, in addition to reviewing and 
revising drafts prepared by staff counsel; and
    (11) Aggressive recruiting and training program to ensure full 
productivity by maintaining our authorized staffing levels.

    We believe these measures will reduce the backlog and shorten the 
time it takes for a veteran to receive a fair, well-reasoned Board 
decision. In addition to the Board's increases in productivity, we have 
also improved decision quality. In Fiscal Year 2005, the Board's 
decision quality was 89 percent, based on 34,175 total decisions 
issued. We are proud to report that in Fiscal Year 2006, not only did 
the Board increase its total decision output by 4,901 cases, but the 
Board's decision quality increased to 93 percent. By decision quality, 
we mean that there were no substantive or procedural errors that would 
have resulted in the case being reversed or remanded to the Board by 
the United States Court of Appeals for Veterans Claims. Into the second 
quarter of Fiscal Year 2007, we find that this enhanced decision 
quality has been maintained.
    Although there was an increase in quality and quantity, the Board 
saw its pending caseload grow significantly in 2006. As I briefly noted 
earlier, in addition to issuing 39,076 decisions in Fiscal Year 2006, 
we conducted 9,158 hearings, an increase of 582 hearings over the total 
held in Fiscal Year 2005 and the most ever held by the Board. However, 
the number of cases pending before the Board at the end of Fiscal Year 
2006 was 40,265, which was close to a 3,000 case increase over the 
37,539 cases that were pending at the end of Fiscal Year 2005. This 
increase in pending cases occurred despite the increase in the number 
of decisions issued of nearly 5,000 over the previous year--an increase 
notwithstanding the reduction in our authorized FTEs from 440 in Fiscal 
Year 2005 to 434 in Fiscal Year 2006. As of today's date, we have more 
than 28,000 cases with a pending request for a Board hearing, the 
highest number ever. Of these cases more than 8,000 are actually ready 
for a hearing. Our 114 plus Travel Boards in Fiscal Year 2007 should 
sharply reduce the number of pending hearings.
    Although we continue to operate at the 2006 level, our attorneys 
and judges are significantly ahead of last year's pace in terms of 
productivity. I attribute this increased productivity to superb 
leadership in each of our Decision Teams, an unparalleled in-house 
training and mentoring program, and to the quality of our line 
attorneys in drafting complex, quality decisions in an accurate and 
timely manner.
    As you know, we have high expectations for our counsel and Veterans 
Law Judges. We ask each of our counsel to write more than three 
complete draft decisions a week, and each of our line Judges to review, 
modify as necessary, and sign approximately 19 decisions a week. Over 
the course of the year, the Board's fair share standards call for our 
attorneys to complete a total of 156 timely decisions of high quality, 
and for each of our line Judges to complete and sign 752 decisions. In 
addition, each Judge is expected to complete at least 3 week-long 
Travel Board trips per year, in which they hear cases at one of the 57 
ROs. A senior counsel accompanies the Judges during these Travel Board 
trips to assist in the conducting of the hearings and to provide 
training and other requested assistance to the RO staff.
    In conclusion, we will continue working to develop new and creative 
solutions to the challenges we face in order to fulfill our statutory 
mission to hold hearings and provide timely, high quality decisions to 
our Nation's veterans and their families.
    I am pleased to answer any questions you or your colleagues may 
have.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Daniel K. Akaka 
      to Hon. James P. Terry, Chairman, Board of Veterans' Appeals
    Question 1. Please update the Committee on the status of the 
Board's efforts to move toward electronic records in BVA adjudication?
    Response. The Board of Veterans' Appeals (BVA or Board) reviews an 
appellate record that it receives from the agency of original 
jurisdiction, usually a regional office of the Veterans Benefits 
Administration (VBA). Aside from an occasional audio or video tape or 
microfiche film submitted in the record, almost all records reviewed by 
the Board are paper documents contained in an appellant's claims file 
or other special purpose folder, such as an education or vocation 
rehabilitation benefits folder. These files are often voluminous. They 
may contain records spanning decades and typically include records 
generated before, during and after the veteran's period of military 
service. To convert these often massive paper files into electronic 
form is an enormous undertaking and one that is well beyond the 
resources and expertise of the Board.
    In addition, as you note in the following question, the U.S. Court 
of Appeals for Veterans Claims (CAVC or Court) requires the submission 
of a paper record on appeal. As a result, any electronic copies of 
documents that are part of the appellate record would have to be 
printed in order to be received by the CAVC.
    While we have no program to generate or convert paper documents to 
electronic records, we are actively using technological advancements to 
improve our ability to accomplish our statutory mission to hold 
hearings and consider and dispose of appeals in a timely manner. These 
efforts include the provision of videoconference hearings, which use a 
system of digital recording and transmission of the hearing 
``transcript.'' We also employ extensive electronic legal research 
tools that have become essential in assisting the adjudication of 
decisions on appeal. In addition, a number of years ago the Board 
created a paperless system for retaining and filing attorney fee 
agreements that are required to be filed with the Board.

    Question 2. Rule Nine of the Court of Appeals for Veterans Claims' 
Rules of Practice and Procedure requires that paper copies of all 
documents and evidence relevant to an appeal be transmitted to the 
Court. Do you believe that repeal of this rule and the allowance of 
electronic records would expedite the referral of appeals to the CAVC?
    Response. As noted above, the Board does not have the ability to 
convert the massive amount of paper documents it receives into 
electronic form. If, at some point in time, electronic records were 
generated by the originating agency and supplemented by the Board, such 
a change in the Court's rules may well have an ameliorative effect on 
the timeliness of processing of appeals at the CAVC. The submission of 
an electronic record would obviate the need for photocopying and 
collating a massive number of documents. However, absent a change in 
the Court's rules, the Secretary would still have the burden of 
designating the record on appeal. I understand that the Court is 
considering alternatives to the current process for designating the 
record on appeal that would expedite the processing of cases at the 
Court. Under this revised process, however, paper records would still 
be employed.

    Question 3. How much training does a Veterans Law Judge undergo per 
year? What specific training is provided?
    Response. The Board devotes a substantial amount of time and 
resources to providing training to our veterans law judges (VLJs) and 
staff counsel. Besides the Department of Veterans Affairs (VA)-wide 
periodic training on Cyber Security, the Privacy Act, the No FEAR Act, 
Sexual Harassment, and Federal Employee Ethics Requirements, a wide 
variety of training is provided to enable the Board to produce high 
quality decisions in a timely manner. The Board has a full-time 
Training Coordinator who, in close coordination with the Board's Chief 
Counsel for Policy, is responsible for scheduling and organizing Board-
wide training events, which usually average about twice a month. 
Training on various topics related to computer-assisted legal research 
also is periodically scheduled by the Board's librarian. Additionally, 
the Board sends individually selected employees to management and 
leadership training courses provided at the Office of Personnel 
Management (OPM) Management Development Centers and the Federal 
Executive Institute.
    With respect to the Board-wide training provided to VLJs and 
attorneys, the types of training can be broken down into the following 
five categories: critical skills training; current issues and 
competency training; specialized skills training; leadership/management 
development training; and mandatory training. Some of the types of 
training provided within each of these categories include:
                        critical skills training
     Writing--Training is periodically provided to upgrade 
writing skills. At the beginning of 2006, the Board initiated a writing 
skills program entitled the ``4-Cs,'' short for clear, concise, 
coherent, and correct decision writing. The purpose of the training was 
to address a number of matters, including the increasing length of 
Board decisions due, in part, to long recitations of fact and 
boilerplate summaries of the law, and reasons or bases deficiencies in 
Board decisions.
     Legal Research--Initial training is offered to new 
employees and product upgrade/enhancement training is offered on an 
ongoing basis to the entire attorney and VLJ staff concerning the use 
of computer-assisted legal research tools.
                 current issues and competency training
     Educational Seminars--Learning seminars of a medical and 
legal nature are offered monthly (approximately 10 per year). Lectures 
from Board staff range from 1 hour to 1 hour and a half in length. 
Participation is voluntary. Examples of some recent topics covered are: 
Adjudicating Gulf War Claims; Rating Residuals of Gunshot Wounds; 
Adjudicating Medical Reimbursement Claims; Rating Eye Disorders; 
Understanding Military Records and Awards; Adjudicating Section 1151 
Claims; Adjudicating Section 1318 Claims; and Introduction to Medical 
Terminology.
     Grand Rounds--Periodic ``Grand Rounds'' training sessions 
are provided for all VLJs and staff counsel. Attendance is required. 
The purpose of these training sessions is to keep the legal staff 
current with continuing changes in the law, to address areas of 
weakness in Board decision quality, and to address current ``hot'' 
issues.
                      specialized skills training
     Income Verification Match--This training is required for 
selected attorneys and VLJs who handle cases that include protected tax 
information.
               leadership/management development training
     Office of Personnel Management Training
     Federal Executive Institute
     Leadership VA
     VA Learning University sponsored leadership training
                           mandatory training
     Privacy Policy
     Cyber Security Awareness
     Federal Employee Antidiscrimination and Retaliation Act 
(No FEAR)
     Prevention of Sexual Harassment
     Ethics

    Besides Board-wide training, the Board's four decision teams also 
periodically schedule internal team training events on a variety of 
issues.

    Question 4. How much training does a decision team attorney undergo 
per year? What specific training is provided?
    Response. As discussed in the previous answer, predominantly the 
same type of training is provided to both the Board's VLJs and staff 
counsel. However, there are some specific types of additional training 
that are provided solely to the newly hired attorney staff.
    On a Board-wide basis, the following training is provided to new 
staff counsel on both legal and medical matters:

     Introduction to the Board of Veterans' Appeals (BVA 101)--
This training introduces new employees to the structure, operations and 
policies of the Board. Two-hour course.
     Basic Veterans' Law (BVA 201)--This course is an 
introduction to the law of the U.S. Court of Appeals for Veterans 
Claims and the relevant rulings of the U.S. Court of Appeals for the 
Federal Circuit. Twelve-hour course.
     Computer Skills Training (CST) Course--This training 
provides the attorney with computer information and tips to enable more 
efficient drafting of decisions using the Board's computer system. One 
hour course.
     Global Training--This training provides an overview of the 
Board's management and administration process. Attorneys have the 
opportunity to learn firsthand about the journey of a case file once it 
is received at the Board. Three-hour course.
     Mentoring--This is a 3-month training period where the 
attorney is tutored on all aspects of decision preparation by an 
assigned senior Board counsel.
     Adjudication Academy--This is a 2-day collaborative 
offsite effort by the Veterans Health Administration (VHA), VBA and the 
Office of General Counsel to provide an opportunity for new BVA 
attorneys to learn about the role these administrations and staff 
offices have in the adjudication process. This course is conducted 
approximately once a year in Baltimore.

    Besides Board-wide training, the Board's four decision teams also 
schedule internal team training events for new attorney staff and 
summer interns on an ``as needed'' basis. During 2006, the teams 
provided training on a wide variety of topics, including the VCAA and 
Basic Service Connection Concepts; Increased Ratings; Quality Review at 
the Board; the Handling of Multi Issue/Complex Cases; Efficient 
Handling of Cases; Career Development; Hearing Loss; Personal 
Experiences of BVA Veterans; Research Tools; a presentation by Disabled 
American Veterans national VSO representatives; Conducting Board 
Hearings; Medical Opinion Requests; the Board's Rules of Practice and 
Procedure; BVA Handbooks; and VA Benefits Overview.

    Question 5. As of February 2007, flexi-place was available for up 
to 48 high-achieving attorneys. What are your plans to expand this 
program?
    Response. The Board plans to expand its Flexiplace program to a 
maximum of 88 attorneys, beginning on or about July 1, 2007. The 
Flexiplace program was originally only available to full- time 
attorneys, but has been open to part-time employees since September 
2006, a feature that will continue when the program is expanded. 
Employee eligibility depends upon a variety of factors, but all 
employees selected to participate in the expanded Flexiplace program 
will be required to demonstrate high levels of achievement as a 
prerequisite, and must maintain such performance in order to remain in 
the program.
    In terms of performance, the Board's Flexiplace program has 
resulted in increased individual production for participants, which in 
turn has contributed significantly to the Board's overall production of 
decisions. The Board's performance standards require that all Board 
attorneys produce a minimum of 156 credits per year (credits are 
roughly equivalent to decisions). We have found that those Flexiplace 
participants who started the program on or after December 30, 2005, 
were able to successfully produce at least 170 credits per year, while 
maintaining acceptable or better quality. We plan to continue these 
requirements for all participants selected when the expansion of the 
program is effectuated.
    Only those employees who have proven to be dependable, independent, 
and highly motivated are selected for participation in the program. In 
addition to contributing significantly to our statutory mission by 
increasing productivity in order to stem the growth of the backlog and 
improve timeliness, our Flexiplace program has proven to be a very 
attractive and important recruitment and retention tool. Some of our 
best and brightest attorneys have stayed with us or chosen employment 
with the Board because of this and other efforts to make the Board an 
employer of choice.
    In regard to information and data security, Flexiplace participants 
are issued VA laptops that are specially encrypted and regularly 
serviced by VA IT personnel to secure all sensitive information. The 
technology allows for secure communication between Flexiplace 
participants at home and personnel or data located at the office. 
Flexiplace participants transport veterans' case files and draft 
decisions by specially designed, locking carrying cases issued by VA. 
Flexiplace participants must also have a home office where their work 
is performed and data can be secured. The Board conducts periodic home 
visits of the participants to verify that they are in compliance with 
all Flexiplace requirements.
    The expansion of the Flexiplace program is an enthusiastically 
anticipated development at the Board and is expected to generate a 
significant increase in the Board's overall ability to accomplish its 
mission.
                                 ______
                                 
      Response to Written Question Submitted by Hon. Barack Obama 
      to Hon. James P. Terry, Chairman, Board of Veterans' Appeals
    Question 1. Mr. Terry, thank you for covering steps that are 
already underway in the VA to reduce the backlog of claims and shorten 
turnaround times. Beyond staffing and funding levels, which many of us 
think are currently inadequate under the proposed VA budget for FY 
2008, what do you think are the two most important measures you've 
outlined in reducing the backlog? In reducing the turnaround time?
    Response. Eliminating avoidable remands and using a variety of 
methods to increase decision productivity are our two most important 
efforts to stem the growth of the backlog and, at the same time, 
improve the timeliness of the appeals process.
    Remands significantly contribute to the backlog and degrade 
timeliness. The reworking of an appeal at the regional office, on the 
average, adds about a year to the processing of an appeal. The time and 
resources consumed by developing and readjudicating the appeal, both at 
the Board and at the regional offices, is diverted from processing 
original claims and appeals. As about 75 percent of BVA remands are 
eventually returned to the Board for readjudication, they become a 
significant addition to the appellate workload. Moreover, as remands, 
by law, require expeditious handling and generally have older docket 
numbers, they displace ``newer'' appeals on the Board's docket and add 
to the already long wait for justice that our veterans and their 
families now experience.
    While some remands are necessary and advisable, our joint efforts 
with VBA to eliminate those remands that we justifiably can avoid will, 
over time, make a significant impact in curtailing the backlog and the 
delays within the entire adjudication system. We have begun to make 
important progress in this area, bringing the remand rate down from 
56.8 percent in Fiscal 2004, to 38.6 percent in Fiscal 2005, and to 
32.0 percent in Fiscal 2006.
    Increasing decision productivity while maintaining high quality is 
the other mainstay of our efforts to stem the backlog and improve 
timeliness. We have met with success by the implementation of a number 
of measures, each of which has contributed incrementally to achieve 
this goal. These measures include fair but challenging performance 
standards for our VLJ and staff counsel, performance incentives, 
training and mentoring, efforts for improved and clearer and concise 
decision writing, and encouraging our judges to draft decisions 
whenever possible. With these measures, the Board was able to issue 
39,076 decisions and hold 9,158 hearings in Fiscal 2006 with our 
available resources. We believe that these efforts will continue to 
make inroads in stemming the growth or reducing the backlog.

    Question 2. You mentioned ``considerable'' training efforts to 
tackle the issue of avoidable remands, including sessions for Veterans 
Law Judges and joint training sessions with VBA. Expanding these 
efforts seems like one of the keys to reducing the number of these 
cases. Could you--or Admiral Cooper, or both--comment more specifically 
on the scope of these training efforts to date at the regional offices: 
how many sessions and in how many regional offices, how long do they 
last, who attends, and who is required to attend?
    Response. With respect to the Board's participation in regional 
office training, the Board conducts training for regional office 
adjudication staff both during travel board visits and by way of 
videoconference. Over the past few years, we have conducted numerous 
such sessions of varying length on a variety of medical and legal 
subjects designed to reduce remands and improve quality.
    During travel board trips, the attorney staff who are sent to 
assist the VLJs, as well as some of the VLJs, meet with regional office 
staff to answer questions, discuss shared areas of concern, and provide 
training when requested. Such interactions are mutually beneficial to 
both organizations in reducing remands and ensuring cases are fully and 
properly developed and processed.
    Based on the reports received from 28 travel boards (out of 30) 
conducted so far during Fiscal 2007, Board attorneys have provided 
informal training to the regional office staff during all trips. 
Informal training consists of case reviews, determinations of adequacy 
of development, discussions on recent CAVC cases, discussion on trends 
noticed in hearing cases, and tips to reduce avoidable remands. 
Informal training is usually provided on a one-on-one basis with rating 
veterans service representatives (RVSRs), decision review officers 
(DROs), and adjudication managers. Formal training, on the other hand, 
was provided during 17 of the 28 trips, or 61 percent of the time. 
While training topics vary, the most common topics addressed by Board 
staff so far this year address matters related to post traumatic stress 
disorder (PTSD) service connection claims, VCAA notification, and the 
discussion of recent CAVC decisions. A complete list of the training 
topics addressed and at which particular regional offices is enclosed 
(Enclosure 1).
    [Enclosure 1 follows:]

                                                   Enclosure 1
----------------------------------------------------------------------------------------------------------------
                   RO                               FY 2007 Training Topics               Informal Assistance
----------------------------------------------------------------------------------------------------------------
Boston..................................  Proper dev. of PTSD claims; recent CAVC     Yes
                                           decisions; complete dev. to reduce
                                           remands; adequacy of medical evid.
Albuquerque.............................  Rating knee disabilities, verification of   Yes
                                           combat service.
Muskogee................................  None......................................  Yes
St. Petersburg..........................  Adequacy of VCAA notice; avoidable remands  Yes
Waco....................................  None......................................  Yes
Winston-Salem...........................  Avoidable remands.........................  Yes
Columbia................................  None......................................  Yes
Houston.................................  Development and adjudication of PTSD        Yes
                                           claims; new and material evidence; CUE.
San Antonio.............................  None......................................  Yes
Nashville...............................  None......................................  Yes
Montgomery..............................  VCAA compliance; when is an exam required;  Yes
                                           rating of spine disabilities; rating of
                                           cardiovascular disabilities.
Atlanta.................................  Recent CAVC decisions; remand trends......  Yes
Detroit.................................  Inferred issues; due process in contested   Yes
                                           claims.
Indianapolis............................  Rating disabilities of the eyes; rating
                                           knee disabilities; recent CAVC cases
                                           including Haas.
Newark..................................  Development of PTSD stressors; heart        Yes
                                           disease secondary to PTSD; VCAA notice
                                           esp. Kent, other recent CAVC cases.
Portland................................  Dev. of PTSD claims; recent CAVC            Yes
                                           decisions; VCAA notice; avoidable
                                           remands; through claim development;
                                           adequacy of medical evidence; severance
                                           of service connection; rating reductions.
Philadelphia............................  VCAA notification esp. Kent...............  Yes
New York................................  None......................................  Yes
Phoenix.................................  Role of the Board; recent CAVC cases esp.   Yes
                                           Haas and Ribaudo; proper weighing of
                                           evidence; DeLuca analysis.
St. Petersburg..........................  None......................................  Yes
Little Rock.............................  Adequacy of VA exam reports...............  Yes
New Orleans.............................  None......................................  Yes
Atlanta.................................  None......................................  Yes
Jackson.................................  Adjudicating PTSD claims; recent CAVC
                                           decisions esp. Haas, Ribaudo, and Kent;
                                           avoidable remands.
Waco....................................  None......................................  Yes
St. Petersburg..........................  Adjudication of PTSD claims; Gulf War       Yes
                                           claims; VCAA; secondary service
                                           connection.
Cleveland...............................  None......................................  Yes
Winston-Salem...........................  Adjudication based on pre-discharge exam;   Yes
                                           reserve duty vs. active duty; recent CAVC
                                           decisions esp. Deshotel.
----------------------------------------------------------------------------------------------------------------

    For purposes of comparison, based on the reports received from 109 
travel boards (out of 114) that were conducted during Fiscal 2006 
(counsel did not accompany the VLJs on some of the trips), Board 
attorneys provided informal training during all 109 trips. With respect 
to formal training, this occurred during 62 of the 109 trips, or 57 
percent of the time. The most common training topics addressed were 
PTSD service connection claims, VCAA notification, discussion of recent 
CAVC decisions (Kent, Dingess, Haas), when a VA examination is needed, 
application of the presumptions of aggravation and soundness, and the 
assignment of effective dates. A complete list of the training topics 
addressed and at which particular regional offices is enclosed 
(Enclosure 2).
    [Enclosure 2 follows:]

                               Enclosure 2
------------------------------------------------------------------------
                                   FY 2007 Training         Informal
              RO                        Topics             Assistance
------------------------------------------------------------------------
Montgomery....................  Active duty for         Yes
                                 training vs. inactive
                                 duty; verifying PTSD
                                 stressors; rating
                                 hypertension; SC
                                 hepatitis claims.
St. Paul......................  Earlier effective       Yes
                                 date; informal claims.
Atlanta.......................  Remand reasons........  Yes
Albuquerque...................  Evaluating back         Yes
                                 disabilities;
                                 reducing avoidable
                                 remands.
Phoenix.......................  None..................  Yes
Pittsburgh....................  None..................  Yes
Muskogee......................  None..................  Yes
Oakland.......................  VA exam reports;        Yes
                                 recent CAVC
                                 decisions; PTSD
                                 claims; reasons for
                                 remand.
New York......................  None..................  Yes
Waco..........................  None..................  Yes
Seattle.......................  Proper framing of       Yes
                                 issues on appeal;
                                 multiple theories of
                                 entitlement;
                                 development of claims.
Huntington....................  None..................  Yes
Nashville.....................  Personal assault PTSD.  Yes
Detroit.......................  None..................  Yes
St. Petersburg................  None..................  Yes
Winston-Salem.................  None..................  Yes
Columbia......................  None..................  Yes
Montgomery....................  ``Remand proofing'';    Yes
                                 VCAA; CAVC case law
                                 on service
                                 incurrence; policy
                                 about PTSD and CAD
                                 disorders; DeLuca.
Boston........................  None..................  Yes
Philadelphia..................  None..................  Yes
Jackson.......................  Reducing remands......  Yes
Little Rock...................  None..................  Yes
Atlanta.......................  Reduction of remands;   Yes
                                 recent case law (to
                                 include VCAA).
St. Petersburg................  CAVC 1151 decisions;    Yes
                                 Haas decision.
Houston.......................  None..................  Yes
Newark........................  None..................  Yes
St. Louis.....................  revised regulations;    Yes
                                 VCAA; remands; 1151;
                                 effective dates;
                                 medical examinations
                                 of RO employees.
St. Paul......................  Due process in 4.29     Yes
                                 reductions; SC
                                 multiple sclerosis;
                                 sufficient PTSD
                                 stressors; DeLuca
                                 opinions; adequacy of
                                 opinions in hearing
                                 loss; evidence in
                                 TDIU claims; VA
                                 speculative opinions;
                                 avoiding Colvin
                                 violations; weighing
                                 of risk factors in
                                 hepatitis C cases.
Los Angeles...................  Questions about         Yes
                                 specific fact
                                 scenarios and Board's
                                 organization and
                                 structure.
San Antonio...................  Development of SOC's    Yes
                                 and VCAA.
Portland......................  None..................  Yes
St. Petersburg................  None..................  Yes
Waco..........................  None..................  Yes
Oakland.......................  Avoidance of remands;   Yes
                                 Board and CAVC
                                 trends; VCAA; when to
                                 obtain examinations;
                                 PTSD stressor
                                 development; PTSD
                                 personal assault
                                 claims; 1151 claims.
Indianapolis..................  Avoidance of remands;   Yes
                                 presumption of
                                 soundness and
                                 aggravation.
Columbia......................  proper framing of       Yes
                                 issues on appeal;
                                 multiple theories of
                                 entitlement; and the
                                 development of claims.
San Diego.....................  Reduction of remands;   Yes
                                 Dingess/Hartman
                                 impact; when to
                                 obtain an examination
                                 or opinion; VCAA
                                 notice.
Seattle.......................  Dingess/Hartman; PTSD   Yes
                                 (stressor development
                                 and IR); CUE;
                                 secondary service
                                 connection; reduction
                                 of remands.
Salt Lake City................  Function of BVA;
                                 Dingess; when nexus
                                 opinions are needed;
                                 aggravation claims;
                                 DeLuca; the role of
                                 CAVC.
Reno..........................  Reduction of remands;   Yes
                                 BVA functioning.
Wichita.......................  None..................  Yes
St. Petersburg................  Mayfield and Haas.....  Yes
Albuquerque...................  Reasons for remands;    Yes
                                 Mayfield, Haas; when
                                 to request exams and
                                 opinions.
Boston........................  None..................  Yes
Providence....................  Rating psychiatric and  Yes
                                 TDIU claims.
Little Rock...................  None..................  Yes
Cleveland.....................  None..................  Yes
Waco..........................  None..................  Yes
Winston-Salem.................  None..................  Yes
Anchorage.....................  None..................  Yes
Denver........................  None..................  Yes
Las Vegas.....................  None..................  Yes
Chicago.......................  None..................  Yes
San Juan......................  Complications of        Yes
                                 diabetes; PTSD;
                                 rating spinal
                                 disorders; DeLuca;
                                 National Guard
                                 members; avoidance of
                                 remands.
Jackson.......................  Avoidance of remands;   Yes
                                 lifting of Smith
                                 stay; VCAA; Kent;
                                 Dingess.
St. Petersburg................  Avoidance of remands;   Yes
                                 focus on when to
                                 request exams and
                                 opinions.
Waco..........................  None..................  Yes
Louisville....................  VCAA compliance;        Yes
                                 rating knees.
Ft. Harrison..................  reasonable doubt/       Yes
                                 equipoise; rating
                                 mental and joint
                                 disorders; rating
                                 hearing loss;
                                 difference between
                                 inferred and
                                 intertwined claims;
                                 VCAA; verifying PTSD
                                 stressors; Haas;
                                 effective dates;
                                 adequacy of exams;
                                 development of
                                 evidence.
Houston.......................  Avoidance of remand;    Yes
                                 impact of CAVC cases
                                 (Kent).
San Antonio...................  None..................  Yes
Muskogee......................  Dingess/Hartman; ways   Yes
                                 to reduce Manlicon
                                 remands; when to
                                 request VA exams or
                                 request opinions.
Newark........................  None..................  Yes
Boston........................  VCAA.; need to          Yes
                                 consider GAF scores.
Buffalo.......................  Kent compliance; use    Yes
                                 of diagnostic codes,
                                 particularly the knee.
Hartford......................  Cue; rating knees.....  Yes
Atlanta.......................  Common reasons for      Yes
                                 remand; BVA's
                                 attempts to avoid
                                 remands.
Roanoke.......................  Impact of Mayfield,     Yes
                                 Kent, Dingess/
                                 Hartman; when
                                 examiner must review
                                 the file for an exam;
                                 when veteran can
                                 waive development.
Detroit.......................  None..................  Yes
New York City.................  Dingess/Hartman;        Yes
                                 weighing evidence;
                                 presumption of
                                 soundness and
                                 aggravation; judicial
                                 review.
Oakland.......................  Tips on ``remand        Yes
                                 proofing'' decisions;
                                 Dingess/Hartman; duty
                                 to obtain Federal
                                 records; waiver of
                                 duty to assist; Smith.
Montgomery....................  PTSD development; when  Yes
                                 exams are needed.
St. Petersburg................  None..................  Yes
Waco..........................  None..................  Yes
Manila........................  effective dates; CUE..  Yes
White River Jun...............  None..................  Yes
Columbia......................  None..................  Yes
Los Angeles...................  None..................  Yes
Nashville.....................  Lifting of Smith stay;  Yes
                                 Kent and Dingess
                                 responses; when to
                                 obtain exams and
                                 opinions.
New York City.................  Mayfield and Kent.....  Yes
St. Petersburg................  None..................  Yes
New Orleans...................  Dingess compliance....  Yes
Huntington....................  Avoidance of remands;   Yes
                                 claim development;
                                 proper framing of
                                 issues; multiple
                                 theories of
                                 entitlement; adequacy
                                 of medical evidence.
Lincoln.......................  None..................  Yes
Atlanta.......................  Avoidance of remands;   Yes
                                 VCAA compliance
                                 (Kent, Dingess,
                                 Pelegrini; exams and
                                 opinions.
Houston.......................  None..................  Yes
San Antonio...................  None..................  Yes
Philadelphia..................  VA claims/appeals       Yes
                                 processing issues.
Seattle.......................  Recent CAVC decisions   Yes
                                 incl. Haas and
                                 McLendon; obtaining
                                 SSA records; FTR for
                                 exam; obtaining
                                 relevant medical
                                 evidence.
Wilmington....................  Reducing avoidable      Yes
                                 remands; reasonable
                                 doubt doctrine; PTSD
                                 stressor development;
                                 evaluation of PTSD.
New York......................  None..................  Yes
Newark........................  PTSD stressor           Yes
                                 development; when a
                                 VA exam is needed.
Denver........................  None..................  Yes
San Diego.....................  Recent CAVC decisions   Yes
                                 incl. Kent Haas,
                                 Dingess and Rudd.
Wichita.......................  When to obtain a VA     Yes
                                 medical opinion; VCAA
                                 compliance.
St. Petersburg................  None..................  Yes
Oakland.......................  Recent CAVC decisions.  Yes
Phoenix.......................  Overview of BVA;        Yes
                                 current BVA stats;
                                 reducing avoidable
                                 remands; PTSD
                                 stressor development;
                                 obtaining adequate
                                 medical opinions.
Waco..........................  None..................  Yes
Milwaukee.....................  Credibility and         Yes
                                 competence of lay
                                 evidence; waiver of
                                 VCAA.
St. Petersburg................  Adjudicating PTSD       Yes
                                 claims; aggravation;
                                 presumption of
                                 soundness; Haas;
                                 Colvin; when to
                                 request a VAX.
Cleveland.....................  None..................  Yes
Phoenix.......................  VCAA compliance; PTSD   Yes
                                 stressor development;
                                 DeLuca; Haas;
                                 reducing avoidable
                                 remands.
Detroit.......................  Gulf War claims;        Yes
                                 adjudicating Iraq
                                 PTSD claims;
                                 effective dates;
                                 aggravation.
Atlanta.......................  Recent CAVC decisions   Yes
                                 incl. Deshotel,
                                 McLendon, Kent,
                                 Dingess.
Cleveland.....................  Recent CAVC decisions   Yes
                                 incl. Kent, Haas,
                                 Rudd; impact of new
                                 definition of
                                 psychosis; reducing
                                 avoidable remands.
Little Rock...................  SC PTSD claims incl.    Yes
                                 combat and non-combat
                                 stressors; need for a
                                 VA exam; recent CAVC
                                 decisions incl. Haas,
                                 McLendon.
Portland......................  Definition of           Yes
                                 chronicity; asbestos
                                 claims; inactive duty/
                                 active duty claims;
                                 EED claims.
Fargo/Sioux Falls.............  VCAA compliance; PTSD   Yes
                                 stressor
                                 verification;
                                 personal assault PTSD
                                 claims; recent CAVC
                                 decisions.
Montgomery....................  active duty training/   Yes
                                 inactive duty;
                                 verifying PTSD
                                 stressors; rating
                                 hypertension; SC
                                 hepatitis.
St. Louis.....................  Remand reasons;         Yes
                                 reducing avoidable
                                 remands; VCAA
                                 compliance; when to
                                 get a VA exam.
Columbia......................  PTSD esp. Pentecost;    Yes
                                 presumption of
                                 soundness;
                                 aggravation of
                                 disabilities.
New York......................  None..................  Yes
St. Paul......................  Effective dates;        Yes
                                 informal claims.
------------------------------------------------------------------------


    Besides training conducted during travel board trips, the Board 
also provides training to the regional offices by way of 
videoconference. This training is conducted by the Board's four 
decision teams to regional offices located in that team's 
geographically assigned region of the country. This type of training 
was conducted fairly frequently in the past, but less so in recent 
years. However, the Board has recently started to see an upswing in the 
number of requests being received from regional office staff to conduct 
this type of training. During Fiscal 2006 and the first part of Fiscal 
2007, the following training has been conducted and/or scheduled:

------------------------------------------------------------------------

------------------------------------------------------------------------
July 2006..............................  Decision Tree for Rating Knee
                                          Disabilities
                                         (New Orleans, Little Rock,
                                          Jackson, Atlanta, Montgomery,
                                          St. Petersburg, Nashville and
                                          San Juan)
July 2006..............................  Local Reasons for Remand Trends
                                         (Louisville)
August 2006............................  New and Material Evidence, Kent
                                          VCAA Notice, and CUE
                                         (Hartford)
September 2006.........................  Evaluating Back Disabilities
                                         (New Orleans, Little Rock,
                                          Jackson, Atlanta, Montgomery,
                                          St. Pete and San Juan)
                                         (Nashville--training materials
                                          only)
September 2006.........................  Medical Examinations and
                                          Opinions; Rating Knee
                                          Disabilities
                                         (Louisville)
October 2006...........................  Adjudicating Nehmer Claims
                                         (New Orleans, Jackson, St.
                                          Pete, Montgomery, Atlanta, and
                                          San Juan)
                                         (Jackson and Nashville--
                                          training materials only)
October 2006...........................  Earlier Effective Dates
                                         (Houston)
November 2006..........................  VCAA Duty to Notify; Duty to
                                          Assist--Obtaining Medical and
                                          Service Records; Due Process
                                          Issues; Requesting VA
                                          Examinations
                                         (San Diego)
December 2006..........................  Questions & Answers
                                         (Boise)
December 2006..........................  Evaluating Evidence
                                         (Louisville)
January 2007...........................  VA Medical Examinations and
                                          Opinions
                                         (St. Pete, New Orleans, San
                                          Juan, Montgomery, and Atlanta)
                                         (Nashville--training materials
                                          only)
January 2007...........................  Special Monthly Compensation;
                                          Competency and Credibility of
                                          Lay Statements; VCAA Duty to
                                          Notify; Local Reasons for
                                          Remand Trends; VA Medical
                                          Examinations
                                         (Salt Lake City)
February 2007..........................  VA Medical Examinations and
                                          Opinions
                                         (Little Rock)
February 2007..........................  Earlier Effective Dates; VA
                                          Medical Examinations and
                                          Opinions; Secondary Service
                                          Connection Claims, Including
                                          for Alcohol Abuse; Service
                                          Connection for ``Tension
                                          Type'' Headaches; Benefit of
                                          the Doubt/Reasonable Doubt
                                          Standard
                                         (Phoenix)
March 2007.............................  VA Medical Examinations and
                                          Opinions
                                         (Jackson--awaiting delivery of
                                          new equipment)
March 2007.............................  Rating Skin Disorders;
                                          Periodontal Disease; Claims
                                          for Service Connection Based
                                          on Aggravation; Adjudicating
                                          New and Material Evidence
                                          Claims; Weighing Non-medical
                                          Evidence When Rating Mental
                                          and Musculoskeletal Disorders;
                                          VA Medical Examinations and
                                          Opinions; Duty to Assist/
                                          Additional Records Requests
                                         (Ft. Harrison)
April/May 2007.........................  Weighing and Evaluating
                                          Evidence
                                         (New Orleans, Little Rock,
                                          Jackson, Atlanta, Montgomery,
                                          St. Pete, Nashville and San
                                          Juan)
------------------------------------------------------------------------

    Finally, besides the training that is provided during travel board 
trips and by way of videoconference, the Board regularly responds to 
informal requests received from regional office staff for our views and 
suggestions on a wide variety of case-related legal and medical issues.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Larry E. Craig 
      to Hon. James P. Terry, Chairman, Board of Veterans' Appeals
    Question 1. In recent years, thousands of claims were filed that 
all sought the same relief -- dual ratings for bilateral ringing in the 
ears. It is my understanding that, while the courts tried to resolve 
the underlying legal issue, these cases were essentially proceeding 
separately up and down the system, creating workload spikes at all 
levels of the process.
    Question 1(a). What impact did this have at the Department of 
Veterans Affairs (VA) regional offices and at the Board of Veterans' 
Appeals?
    Response. These claims for an increased rating, in excess of 10 
percent, for ringing in the ears (tinnitus) were processed by the 
regional offices in the same manner as any other claims. Under VA's 
interpretation of the law, our regulations do not provide for a 
schedular evaluation for ringing in the ears in excess of 10 percent, 
whether the ringing is perceived to be unilateral, in either ear or in 
both ears. As a consequence, the claims were denied at the regional 
office level, and then many were appealed to the Board.
    When these claims were appealed, they were considered by the Board 
in docket order, with the exception of those appeals that were advanced 
on the docket because of serious illness, severe financial hardship, or 
other good cause, such as advanced age. They were adjudicated in 
accordance with VA regulations, which provide for a single 10 percent 
rating for tinnitus, and accordingly the appeals seeking increased 
ratings were denied.
    Some of these decisions were then appealed to the CAVC. The Court 
invalidated the Secretary's interpretation of VA regulations and 
concluded that a rating in excess of 10 percent was assignable for 
tinnitus perceived as ``bilateral.'' Smith v. Nicholson, 19 Vet. App. 
63 (2005), rev'd, 451 F.3d 1344 (Fed. Cir. 2006). At that point, a 
Department-wide stay was imposed on all cases affected by the Court's 
decision while the Secretary appealed the Smith decision to the U.S. 
Court of Appeals for the Federal Circuit (Federal Circuit).
    The Department's authority to impose such a stay was challenged by 
a petition for a writ of mandamus filed at the CAVC. While the CAVC 
subsequently concluded that the Secretary does not have unilateral 
authority to stay cases at the Board pending an appeal to the Federal 
Circuit of a decision issued by the CAVC, the CAVC denied the 
petitioner's request for a writ. Ramsey v. Nicholson, 20 Vet. App. 16 
(2006).
    On appeal of Smith, the Federal Circuit reversed the CAVC's 
decision. In pertinent part, the Federal Circuit upheld the Secretary's 
interpretation of VA regulations providing for a single 10 percent 
rating for tinnitus. The Departmental stay was then lifted and all 
affected cases were promptly adjudicated. The Board decided over 4,000 
of the appeals that had been subject to the Smith stay in a period of 
less than 2 months.

    Question 1(b). If similar claims were either consolidated or stayed 
early in the process, what do you believe would be the result?
    Response. The consolidation and/or staying of cases involving a 
common unresolved legal issue at the CAVC, and staying of cases at the 
Board and regional offices, would help ensure that similarly situated 
veterans, such as those with bilateral tinnitus rating claims, are 
treated in a consistent manner. Doing so also prevents the Board's or 
the Court's docket from being flooded with cases that may require 
additional follow-up review depending on the ultimate decision made on 
the common legal issue.
    One of the challenges posed in consolidating or staying cases, 
however, is first properly identifying them as falling within the 
parameters of the consolidation/stay. At the Board, for example, cases 
were not placed in the Department's Smith stay until their individual 
places on the Board's docket were reached and the cases were reviewed 
by VLJs and attorney staff. Interestingly, while the Court found in 
Ramsey that the Board did not have the authority to stay cases, the 
Court itself imposed a stay on processing of bilateral tinnitus cases 
on the Court's docket once the Federal Circuit overturned the CAVC's 
decision in Smith and an appeal petition was filed by the appellant 
with the U.S. Supreme Court.
    Recently, in Ribaudo v. Nicholson, 20 Vet. App. 552 (2007) (en 
banc), the CAVC rejected the Secretary's argument that he possesses the 
inherent management power to stay cases pending before the Board that 
are potentially affected by a precedential decision of the Court, and 
more specifically, Haas v. Nicholson, 20 Vet. App. 257 (2006). Instead, 
the Court stated that if the Secretary or Board wishes to stay the 
effect of Haas, the Secretary must file with the Court, or the Federal 
Circuit, a motion to stay the precedential effect of the Court's 
decision. The Court set forth detailed procedures for the Secretary to 
follow should he desire to have a Court decision stayed. The Secretary 
subsequently complied with the Court's request and in January 2007 
filed an opposed motion with the CAVC requesting, in particular, that 
the Court stay the precedential effect of Haas pending judicial 
resolution in Haas. On April 13, 2007, the Court granted the 
Secretary's motion to stay in part. Ribaudo v. Nicholson, No. 06-2762 
(U.S. Vet. App. Apr. 13, 2007) (en banc). Specifically, the Court 
ordered that the adjudication of cases before the Board and VA regional 
offices that are potentially affected by Haas is stayed until mandate 
issues in the pending appeal of Haas to the Federal Circuit. The Court 
did indicate, however, that the Secretary may consider motions for 
advancement on the Board's docket in cases to which Haas will apply.

    Question 2. I was very pleased to learn that, in addition to 
providing expedited decisions to severely injured veterans of Operation 
Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF), VA is now 
providing priority claims processing for all OIF/OEF veterans.
    Question 2(a). Does VA have performance goals in place for those 
veterans' claims for the VA regional offices and the Board of Veterans' 
Appeals?
    Response. The Board has performance standards in place for all its 
VLJs and staff counsel. These standards apply to the work they perform 
on all appeals considered, without regard to the particular period of 
service of the veteran. These standards stress the quality, timeliness 
and productivity of decisions.

    Question 2(b). Would you please provide the Committee with an 
update on how many of these claims VA has received since these policies 
were instituted; how many of those claims have been decided and the 
average time it took to render those decisions; how many are still 
pending and how long on average they have been pending; how many of 
these claims have been granted and how many have been denied; what 
percentage have been awarded service connection with disability ratings 
in excess of 10 percent; what are the nature of the claimed 
disabilities and the disabilities for which service connection was 
granted; and what is the accuracy rate for decisions on these claims? 
If this information is not available due to data limitations, please 
provide the Committee with a time frame within which that information 
will be available and can be provided to the Committee.
    Response. VA receives a data file from DOD identifying veterans who 
were deployed in support of GWOT. We match this data file with data 
from VA's information systems to track health care and benefits usage 
by GWOT veterans.
    The most recent update from DOD includes veterans discharged 
through November 2006. This data file was compared to VA records 
through February 2007. This match identified 181,966 GWOT veterans who 
have filed a claim for disability benefits either prior to or following 
their GWOT deployment (approximately 26 percent of 689,317 total GWOT 
veterans).
    Many GWOT veterans had earlier periods of service, and they filed 
for and received VA disability benefits before their most recent 
deployment. VBA's computer systems do not contain any data that would 
allow us to attribute veterans' disabilities to a specific period of 
service or deployment.
    Of the 181,966 GWOT veterans who have filed a claim either prior to 
or following their GWOT deployment, 136,189 were awarded service-
connected disability compensation, 17,241 were denied, and 28,536 have 
claims pending. Among those awarded service-connected disability 
compensation, 83,676 (61 percent) received a combined degree of 
disability rating greater than 10 percent.
    The charts that follow provide a breakdown of those awarded 
service-connected disability by combined degree of disability and the 
most frequently claimed service-connected disabilities.

                    GWOT Veterans Awarded Service Connection by Combined Degree of Disability
----------------------------------------------------------------------------------------------------------------
               Combined Degree (in percent)                   Reserve Guard      Active Duty          Total
----------------------------------------------------------------------------------------------------------------
0.........................................................            10,551            11,380            21,931
10........................................................            12,763            17,819            30,582
20........................................................             6,738            13,343            20,081
30........................................................             5,060            13,202            18,262
40........................................................             4,195            11,290            15,485
50........................................................             2,155             6,430             8,585
60........................................................             2,241             6,548             8,789
70........................................................             1,348             3,952             5,300
80........................................................               965             2,528             3,493
90........................................................               404             1,039             1,443
100.......................................................               719             1,519             2,238
                                                           -----------------------------------------------------
    Total.................................................            47,139            89,050           136,189
----------------------------------------------------------------------------------------------------------------



   Ten Most Frequent Service-Connected Disabilities for GWOT Veterans
                  [Both Active Duty and Reserve/Guard]
------------------------------------------------------------------------
          Diagnostic Code             Diagnosis Description      Count
------------------------------------------------------------------------
6260..............................  Tinnitus.................     39,120
5237..............................  Lumbosacral or cervical       33,904
                                     strain.
6100..............................  Defective hearing........     28,589
5299..............................  Generalized, Elbow and        22,813
                                     Forearm, Wrist, Multiple
                                     Fingers, Hip and Thigh,
                                     Knee and Leg, Ankle,
                                     Foot, Spine, Skull,
                                     Ribs, Coccyx.
9411..............................  Post-Traumatic Stress         17,644
                                     Disorder.
5271..............................  Limited motion of the         16,907
                                     ankle.
5260..............................  Limitation of flexion of      16,556
                                     leg.
5242..............................  Degenerative arthritis of     12,834
                                     the spine.
5201..............................  Limitation of motion of       12,127
                                     arm.
7101..............................  Hypertensive vascular         12,084
                                     disease (essential
                                     arterial hypertension).
------------------------------------------------------------------------


    We are unable to provide an accuracy rate specific to claims 
received from veterans deployed in support of GWOT. VBA's quality 
review program includes a random sampling across all claims filed for 
compensation and pension, including those submitted by veterans of this 
cohort. However, we do not isolate accuracy for any particular sub-
group of the veteran population. We also do not yet have a means of 
separately track and measure timeliness of processing for GWOT claims. 
A reporting system is being developed to track these claims.

    Question 3. In 2005, the GAO reported that there are ``large 
performance variations'' among the regional offices. For the lowest 
performing offices, would you please provide a comparison of their 
performance outcomes to the national performance outcomes over the past 
5 years?
    Response. We are providing the data requested for the 10 regional 
offices currently experiencing the longest claims processing times. VBA 
has taken measures to assist with the processing of veterans claims at 
each of the listed facilities. For example:

     The New Orleans Regional Office (RO) was severely impacted 
by Hurricane Katrina. We have temporarily transferred (``brokered'') 
work from this facility to other ROs with the capacity to process 
additional work to minimize the impact on veterans within that 
jurisdiction.
     The Pittsburgh RO was recently assigned jurisdiction of 
the overseas foreign workload. The processing of foreign claims takes 
considerably longer, as it involves working with foreign embassies to 
obtain medical examinations and other evidence. During the same period, 
the RO lost a significant number of its most experienced personnel 
through retirements.
     The Chicago RO received an increase in incoming claims as 
a result of the special Six State Outreach Initiative. We have 
authorized the Chicago RO to hire additional claims processors and have 
brokered work to other regional offices to better serve veterans in 
this area.
     To better serve the veterans residing in the Washington, 
DC area, the Roanoke RO recently assumed jurisdiction for the majority 
of claims previously assigned to the Washington RO.
     To improve benefits delivery to veterans served by the Los 
Angeles RO, jurisdiction of claims from veterans residing in Orange 
County, CA, was reassigned to San Diego.


----------------------------------------------------------------------------------------------------------------
                                                                                                       February
     Average Days to Complete           2002         2003         2004         2005         2006         2007
----------------------------------------------------------------------------------------------------------------
Nation............................        223.4        181.5        165.5        166.8        177.1        177.4
Washington........................        377.2        266.3        159.4        195.6        251.2        306.3
Pittsburgh........................        147.2        112.1        167.6        186.5        219.7        260.3
New York..........................        273.6        230.0        207.4        188.8        229.6        258.4
New Orleans.......................        166.9        150.3        156.5        153.8        269.4        249.3
Anchorage.........................        287.9        232.3        187.4        190.7        241.8        247.3
Des Moines........................        223.0        217.7        191.4        209.5        221.4        245.5
Reno..............................        329.6        261.8        197.6        187.6        203.9        239.9
Chicago...........................        190.6        133.4        185.6        203.7        226.5        237.9
Newark............................        309.5        276.3        200.9        179.2        232.7        230.8
Los Angeles.......................        239.6        217.4        206.3        211.6        237.4        226.5
----------------------------------------------------------------------------------------------------------------


    Chairman Akaka. Thank you very much, Mr. Terry.
    I would like to now ask the Ranking Member, Senator Craig, 
for his statement.

STATEMENT OF HON. LARRY E. CRAIG, RANKING MEMBER, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Well, Mr. Chairman, first of all, let me 
apologize for being late, but especially to thank you for 
continuing to pursue the issue of claims processing on a timely 
basis and the appeals process. I know of nothing more important 
for the men and women who have served their country in the 
Armed Forces than to get a swift and properly designated 
decision as it relates to their disability resulting from their 
service. This is particularly important, I think, during a time 
of war when we have thousands of troops in Operation Iraqi 
Freedom and Operation Enduring Freedom separating from service 
each year, Mr. Chairman.
    Every disability claim is extremely important; however, as 
I have previously stated, I believe that during a time of war, 
our focus must be on the needs of those returning veterans who 
for the first time are applying for their disability benefits. 
That is why I asked the VA at several hearings over the last 
Congress whether disability claims for those veterans were 
being processed by VA on a priority basis.
    At that time, VA was already providing expedited decisions 
for OIF and OEF veterans who became severely disabled during 
service. But as we all know, some disabilities such as symptoms 
of traumatic brain injury and mental health problems may not 
manifest until months after leaving service. So as you all will 
hear today and are hearing, VA is now giving priority to 
disability claims from all OIF and OEF veterans regardless of 
when their claim is filed. I think this is a significant 
improvement, and I commend Secretary Nicholson for instituting 
the policy.
    That said, I think it is clear to everyone here that the 
system overall is struggling and that some veterans are waiting 
far too long for decisions. In recent years, VA has taken a 
number of measures to try to improve this situation by 
consolidating certain types of work, creating special teams, 
streamlining work processes, and instituting new training 
policies. We have heard about some of that in just the last few 
minutes. There also has been a significant focus on hiring 
additional staff. In fact, as you can see, I think, by the 
chart behind me, the size of the claims processing staff has 
been trending upward over the past 10 years. With the 
additional employees that Mr. Terry just mentioned, staffing 
will have increased from 1997 to 2008, if we can bring that 
budget on, by about 61 percent. Also during that period, 
funding for the Compensation and Pension Service will have 
increased 118 percent.
    [Fiscal Year 1997 to Fiscal Year 2008 Compensation and 
Pension Staffing chart follows:]

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Despite those dramatic increases in staffing and funding 
and VA's other efforts to improve performance, the number of 
pending cases has been rising and timeliness has been 
deteriorating. Although I hope that further increases in staff 
will help turn things around, I do not believe that simply 
adding employees is a long-term solution to our problem.
    For many years experts have stressed that significant 
improvement may not be possible without fundamental changes, 
and that is to the design and the operation of the system 
itself. In fact, in 1996, the Veterans' Claims Adjudication 
Commission concluded that ``the problems with the existing 
system are so many and varied that it cannot be fine-tuned into 
a system that will consistently produce timely and high-quality 
adjudicative products.''
    After years of struggling to improve the performance of the 
existing system, it may be time to acknowledge that those 
experts are correct, that we need to make fundamental changes 
to the system before we will ever see true, lasting 
improvement.
    In that regard, as you can see by another chart behind me, 
Mr. Chairman, a number of specific reforms have been suggested 
over the years, such as closing evidentiary records during the 
appeals process, offering lump-sum payments to veterans with 
minimal disability conditions, updating the disability rating 
schedule, or removing redundant procedural requirements.
    [Options for Fundamental Reform chart follows:]


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    It has also been suggested that VA could improve 
productivity and consistency by consolidating claims processing 
into fewer than 57 offices. Over the years, some offices have 
chronically underperformed, while others have routinely met or 
exceeded expectations. If veterans would receive better service 
by shifting claims processing to a higher performing office, 
that seems to be an option well worth considering. But whether 
it is that recommendation or others, I hope the Committee will 
take a very serious look, Mr. Chairman, at what options we have 
not tried. It seems that some believe the solution to every 
problem in VA is just more staff. I think we ought to look at 
the way we do it, the techniques, the style, the inconsistency.
    Our colleague from Illinois, who is on this Committee, 
talked about decisionmaking in that office that was 
inconsistent as it relates to claims payments in other offices 
across the country. It is that kind of inconsistency that I 
think is frustrating us all. It is not to suggest that people 
are not working hard in most instances. But if the system is 
not throughputting in the way that we would expect it to be for 
the sake of the veteran, then I think we need to take a more 
serious look at it than just throwing money at the problem. We 
need to look at the fundamental system and how it works, or, as 
others have recommended over a period of several decades, 
fundamental changes are necessary.
    Thank you very much, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Craig. I know 
you have been very passionate about this, and while you were 
Chairman you had, as you pointed out, several hearings on this 
subject.
    May I now call on Senator Rockefeller for any statement he 
may have.

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Thank you, Chairman Akaka and Ranking 
Member Craig.
    This hearing and those many hearings which are going to 
follow not only on this Hill but all across the country are 
going to be critical, because if you go back to the Vietnam 
War, you will remember it was really not until Admiral 
Zumwalt's son got and died from cancer that all of us came to 
really understand what Agent Orange was and fund compensation 
for those suffering from it.
    If you go back to the Gulf War I, there are those who 
disagree--but I am not one of them. I think pyridostigmine 
bromide was a major factor in the illness that tens and tens of 
thousands of people across this country, many of whom live in 
my State and whom I visited and spent a lot of time with and 
who are completely disabled, that was a factor. Still to this 
day such veterans are shunted aside by the DOD and, I would 
have to say, by you simply because we are all working for the 
same purpose.
    And now we come to today. I just want to read a portion of 
a letter from a West Virginian returning from Iraq, and he 
said, ``When I contacted the VA office by phone, I was advised 
they are running behind and I would not be receiving my first 
disability payment for 6 to 8 months. My question is: How am I 
supposed to survive until I start my disability pay? I have 
rent. I have a truck payment, utilities, food, child support to 
pay. Will I be evicted from my apartment and have to live in my 
truck until it is repossessed.''
    Now, that person spent 6 to 8 months in Iraq, and in 
closing, I just think there are so many issues--PTSD, traumatic 
brain injury, mental health problems--which have been talked 
about for years. I can remember that the conference committee 
of the veterans conference, in 1997, I believe, passed a long-
term care policy for outpatient services. I do not think it has 
been particularly implemented. My dissatisfaction is not just 
with this chart, which is stunning, but with the degree of 
response and the particular kind of isolation that comes when 
you have 220,000, 250,000 employees and then you have them 
working in rooms without windows, many of whom never get out to 
see the people that they are serving because they cannot, jobs 
do not allow for that. It is sort of emblematic of Government 
not serving, not understanding, not knowing the people of 
America. And that is distressing, and I am glad, Mr. Chairman, 
that you and the Vice Chairman are having these hearings.
    Chairman Akaka. Thank you very much, Senator Rockefeller. I 
understand that you have other responsibilities this morning, 
and for that reason, I would permit you to ask any questions 
that you may have at this time before I call on other Members.
    Senator Rockefeller. I could not possibly ask a question 
before Jon Tester and Jim Webb made statements.
    Chairman Akaka. All right. We will ask----
    Senator Rockefeller. I am physically incapable of doing 
that.
    [Laughter.]
    Chairman Akaka. I will ask Senator Tester.

                 STATEMENT OF HON. JON TESTER 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman.
    Senator Rockefeller, I am not sure that my presence or 
Senator Webb's presence would stop you from asking questions, 
but we will take that as compliment. Thank you very much.
    I am not going to take a lot of time right now because I do 
want to ask some questions later down the line. But I can just 
tell you this, folks, something to think about while you are 
sitting there: (1) I appreciate the job you do; and (2), when I 
go out in the field in the State of Montana and visit with 
veterans--and I have visited with a lot of them over the last 
couple of years--there is an issue about access. It is a real 
issue.
    Now, in Montana, I will tell you that I have been through a 
lot of the veterans homes, and I have been through the facility 
there at Fort Harrison, and I can tell you that unlike what we 
see at Walter Reed, this is a top-flight facility and the 
doctors and nurses there do a tremendous amount of good work. 
But also in that case, we are burning them out. There is not 
enough of them. There needs to be more of them to provide the 
kinds of services that our veterans need in the State of 
Montana. And my guess is that may be symptomatic throughout the 
United States.
    I have a concern with the budget that the President put 
forth. I do not think it is adequate. I do not think it is 
visionary at all as we look at what the potential impacts of 
the veterans coming back from Afghanistan and Iraq are and the 
kinds of impacts that they are going to have on the system.
    But as for right now, I can just tell you this, Mr. 
Chairman, Members of this Committee, everywhere I go in 
Montana, every veterans group I visit within Montana talks 
about access and talks about delays and talks about the 
inability to get in and get their treatment, to the point--and 
I am looking at some of the documents here that talk about a 
111-day average. That is not what I am hearing in the field. I 
am hearing ``years.'' And that is not acceptable. In some 
cases, 111 days is not acceptable, but it is a heck of a lot 
better than years. But ultimately, in the end, what I hope to 
have accomplished from this hearing is that we really do get 
the kinds of benefits for veterans that they deserve across the 
board for all of them, the ones inside the system and the ones 
that are trying to get into it.
    So thank you very much, Mr. Chairman.
    Chairman Akaka. Thank you.
    Senator Jim Webb?

                  STATEMENT OF HON. JIM WEBB, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Webb. Thank you, Mr. Chairman. I just would say 
very briefly at the outset that having participated in the 
Armed Services Committee hearing yesterday, as did you, with 
respect to what I think a number of us are beginning to realize 
is kind of a systemic breakdown in the transition of people 
from active duty into the veterans community, I am really 
grateful that you and Chairman Levin are going to continue to 
look at that through joint hearings. I think that is probably 
the key issue on the table here. It affects how people are 
being processed out of active duty, not only on the medical 
side, but on a wide variety of areas. It affects priority of 
leadership, where we are putting our money, where we are 
putting our energy. And it also, I am sure, manifests itself in 
the workload that you are receiving over here in the Department 
of Veterans Affairs.
    I have some questions that I want to ask at the appropriate 
time, particularly with respect to whether there are some 
specific ways to address the nature of this backlog, other than 
simply the volume of it. I will refrain from asking those 
questions at this time, and I appreciate being a part of the 
hearing.
    Chairman Akaka. Thank you very much, Senator Webb.
    We will now go into the questioning period, and as I tried 
to do, I am going to ask Senator Rockefeller to begin with his 
questions. Senator Rockefeller?
    Senator Rockefeller. Thank you, Mr. Chairman. I will just 
pose a couple--no ``just'' in front of that. I will pose a 
couple.
    I do not know whom to address this to, and I do not have 
time to have everybody answer it. So you will have to make that 
judgment.
    What is the VA doing to ensure that it can address the 
influx of claims that are resulting from the war without 
increasing the already unacceptable waiting times? That's 
question number one.
    You estimate that the number of claims will essentially 
flatline in the future. I do not understand how that can be 
possible, not only in terms of the so-called escalation, or 
whatever, in Baghdad. Do you or do you not have a plan for the 
surge in claims and cases that will obviously follow from that?
    Mr. Cooper. Senator, let me first address what we are doing 
for the veterans coming back right now to expedite their 
claims. The Secretary has directed and we are, in fact, moving 
to make the people coming back from the Global War on Terror 
the priority. As a result, any claim we get that is from such a 
person, we will make it the priority; we will identify it as 
such at the regional office.
    About a month or two ago, we started working with OSD on 
getting a definitive list of names of people who are considered 
GWOT veterans. As we get names, we compare them with all the 
claims that have come in and specifically pull out those claims 
that have to do with GWOT veterans who have filed claims and we 
prioritize those.
    In each regional office we have designated several people 
to specifically address that group. We have also set up what we 
call a Tiger Team at five resource centers, which will work 
claims for those regional offices that are overburdened.
    So that is what we are doing that is different than we have 
done before----
    Senator Rockefeller. Could I ask within that question, is 
there a possibility--or does it already exist--of simply having 
DOD which would keep obviously the battlefield injury records, 
simply transfer them by computer directly to you so that they 
are immediately available to you?
    Mr. Cooper. Senator, I do not think they have that 
capability. We get the names, but the medical information we 
need comes to us, as it has for all these years, in paper 
files. Trying to get those is indeed a problem that we have. We 
are trying to set up a program whereby we get that information 
early for those people who are filing for disabilities so they 
will have their medical record as they get out of the service. 
And that is----
    Senator Rockefeller. That is Gulf War I all over again.
    Mr. Cooper. What I am saying is that information is not 
available to us directly from OSD.
    Senator Rockefeller. Has there been any discussion you know 
of--there are a lot of computers in the battlefield. That was 
not the case 10 years ago, 15 years ago. Has there been any 
discussion of that? I cannot think of anything that strikes me 
as more sensible than being able to transfer information. Now, 
in this case of pyridostigmine bromide, a lot of soldiers would 
take it for a couple of days. They would start getting sick. 
They would stop taking it. So the recordkeeping was bad. But 
when you have injuries and clear medical histories and that has 
to be written down by hand as opposed to the hundreds of 
thousands of computers that are on the battlefield and in the 
hospitals in Germany and elsewhere, it would strike me as 
something which is either eminent or imminent.
    Mr. Cooper. In this case it is not.
    Senator Rockefeller. Why?
    Mr. Cooper. I cannot answer that question.
    Senator Rockefeller. Has anybody discuss that?
    Mr. Cooper. Oh, yes. There is ongoing discussion because of 
the medical records that we have in VHA that are electronic. I 
do not want to throw any stones, but the fact is that the 
medical records that we get to adjudicate a claim are paper. We 
get files.
    Senator Rockefeller. Your records are, in fact, the best in 
the health care system in this country. That is what I 
understand.
    Mr. Cooper. Yes, sir.
    Senator Rockefeller. So what is it possible for you to do 
to create enough ill will and pressure to try to get the DOD to 
do something which is reasonably similar?
    Mr. Cooper. I would say to you that there is a Joint 
Executive Committee which meets every 3 to 6 months, and there 
are two ancillary Committees: one is Health, which does address 
that part of it. (Of course, on the Benefits side, we have a 
Subcommittee on Benefits.) It is discussed, and I do know that 
there are plans that OSD is working on to get into the modern 
era with records. But they certainly are not there now.
    Senator Rockefeller. Thank you, sir.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Rockefeller.
    And now we turn to Senator Craig for his questions.
    Senator Craig. Mr. Chairman, Senator Rockefeller has 
touched on something that I think has been frustrating to us 
and to VA for a long while, and I do not know what it takes to 
turn a battleship around, other than to hit it with a torpedo, 
maybe. But, Senator Rockefeller, we had DOD records accessible 
to the VA medical facility in Richmond so that for these 
traumatically injured--we could look at their records. Then we 
had a decision made by an attorney who said, ``Well, you should 
not be doing that. There may be some liability here,'' and it 
was stopped. And we intervened, and it got started again.
    Also we have a new naval facility up in Illinois where the 
Navy and VA and the hospital are working side by side now so 
the new incoming Navy men and women will have a joint record, 
and it will be Navy/VA.
    Here we have a modern military and still have no ability to 
transfer records. It is just mind-boggling to me, and Dan has 
talked about it. It still comes in a paper file. We are proud 
at VA that we are the most sophisticated medical recordkeeping 
health care delivery system in the country, but we have to re-
create medical records from paper to digital coming from the 
most modern military system in the world.
    Senator Rockefeller. At the same time as we have VA 
hospitals and DOD hospitals increasing in their collaboration.
    Senator Craig. Yes. So, I mean, it is a very slow start, 
but it is a very inconsistent start, and, therefore, it is 
phenomenally frustrating to those of us who have tried to nudge 
this along. To talk seamless transition and not have immediate 
record transition, electronic record transition, is, in fact, 
not seamless.
    As I said, we are nudging it along. It is starting. But as 
I say, I do not know how you awaken DOD to the modern reality 
of electronics.
    I hope I am expressing my frustration to the Committee that 
we have been working at this for some time and getting nowhere.
    Senator Rockefeller. Again, with the forbearance of 
Senators Tester and Webb, I would simply add this. When one 
comes into an office where there are piles of records, paper 
records all over the place, all motivation, all psychological 
motivation for I have got to get this one first, that one 
second, and I have got to get it done, I have got to drive and 
motivation disappears. I think that is in the nature of human 
beings. People go down the list, go down the pile, but the 
urgency and obviously the timeliness of it completely 
disappears.
    Senator Craig. Yes. Well, I have taken most of my time. Let 
me ask one question because there is progress. VA, as I 
mentioned in my opening statement, is moving all of our OIF/OEF 
folks to a priority position, but there is still the whole 
issue of long-term adjudication and timeliness. And I have 
talked about whether you can just keep pushing things through 
the same system expecting a timelier response by adding people. 
And I guess both to you, Admiral Cooper, and to you, Mr. Terry, 
would it make sense to examine and look at the potential to 
reduce the number of offices that are processing disability 
claims, particularly if that means removing that function from 
offices that routinely underperform, and expanding, modernizing 
those offices that do perform and demonstrate expertise, and 
move ourselves to a higher level of performance as it relates 
to these kinds of claims? I understand the sophisticated 
character of what we are doing here and the allocation of 
resources that ultimately transpires and the importance of that 
resource not only to the recipient but the impact of it on 
budgets and Government and all of that. So it is a fine thread. 
I understand that.
    But I do not know of anybody in the private sector that 
would tolerate a claims adjudication in the untimeliness that 
happens at the Federal level with VA. How do we fix this beyond 
just pushing more staff at it? Or is that the answer?
    Mr. Cooper. Well, that is certainly predicated on the paper 
claims we get. That has to be part of the answer, and we have 
asked for an increase in people. But we have been looking at 
consolidations. One thing we need to do is to get some of these 
more difficult types of claims consolidated. Radiation is a 
primary example and we have moved those claims in the last 6 
months to Jackson, Mississippi. That way we do not have people 
who are doing relatively standard types of claims, although 
somewhat complicated, suddenly diverted to doing a a type of 
claim that they only did once last year and they have only one 
this year and so must go back to the books and relearn how to 
adjudicate it. So we did that with radiation. We have done that 
with other types of things, like CLL.
    What I have tried to say is that there are some difficult 
types of claims that can be moved to a given regional office 
and, therefore, any of those claims that come in anywhere are 
consolidated there.
    A second item is----
    Senator Craig. So you are suggesting that within these 57 
offices, you are developing--your idea is to develop levels of 
expertise on certain types of claims, and they go to a certain 
office where that expertise rests.
    Mr. Cooper. That is one aspect. The other aspect is that 
there are several regional offices that are not as productive 
as they should be. And so, as you know, one of our processes is 
brokering; namely, if one office has too many claims and I have 
the capacity in another office to adjudicate those claims, I 
will transfer those claims to that office and, therefore, try 
to use our entire operation to do these claims. But I agree 
with you that we should be able to get into a better 
consolidation program whereby we have fairly large regional 
offices in specific parts of the country and then other small 
offices that are more intake sites. I set up a model for that 
with benefits delivery at discharge where, at 140 facilities 
around the country, Army, Navy, DOD facilities, we have a group 
of two, three, four people who take in claims from young men 
and women leaving the service, getting all the information they 
can. We have requested they take in all those claims for 
disability 60 days ahead of their getting out of the service. 
That way we can take advantage of getting the medical exams 
that are necessary. We can take advantage of getting their 
medical records right there and, having put all that together, 
then we have two sites that we send them to for adjudication. 
One is Winston-Salem and another one is Salt Lake City.
    I see that as a model to work toward where we have intake 
sites at various places and then larger regional offices to do 
the adjudication.
    Another problem I have to look at, however, is what is the 
optimal size for a regional office before the workload becomes 
so burdensome that it is not run effectively. I am trying to 
look at that. As I say, I am trying to use BDD as a model.
    So there are two types of consolidation: one is having 
larger offices that are good offices and have a good group of 
people process claims sent from intake sites; the other type is 
taking the harder-to-rate types of claims and have them moved 
into one office so we have people that become experts at 
working those cases.
    Senator Craig. I have taken all the time, and more. Yes or 
no: Are the movement of claims between these offices 
electronic?
    Mr. Cooper. No, sir. You are sending the files. They 
absolutely are not electronic and that is one of the problems 
we look at very carefully because of security. We work with the 
company that has that contract, and we have to make sure that 
the files leave properly, are properly tracked, and properly 
arrive.
    Senator Craig. Thank you, Mr. Chairman.
    Chairman Akaka. Thank you, Senator Craig.
    Admiral, you mentioned that the Secretary has asked you to 
set up a system to prioritize claims submitted by those who 
participated in the Global War on Terror.
    My concern regarding this priority is the effect of 
prioritization on the claims of all other veterans. And my 
question to you: Are measures being taken to ensure that all 
other veterans with claims in the system are not adversely 
affected by the prioritization of Global War on Terror claims?
    Mr. Cooper. The answer is yes, sir. On the other hand, 
there are only so many priorities and, as a result, I imagine 
that other pending claims are going to take a little longer. 
However, we have increased overtime.
    We also have authority to get retired annuitants to come 
back and adjudicate claims for the Tiger Team in Cleveland that 
I mentioned. That Tiger Team was set up shortly after I came on 
board by Mr. Principi to take care of veterans who are 70 years 
old and older and who have had a claim that has been pending 
for a year or more.
    When we started that process 5 years ago I think we had 
about 15,000 claims in the queue. We now have about 2,000. And 
we did bring on recently about 24 man-years of retired 
annuitants to help us in that respect.
    Chairman Akaka. Admiral Cooper, let me ask something that 
is somewhat outside of the scope of today's hearing. I would 
like to get some preliminary information on the record 
regarding the Benefits Delivery at Discharge program.
    Mr. Cooper. Yes, sir.
    Chairman Akaka. Can you share with the Committee where BDD 
is currently active and to what extent it is catering to 
military transition facilities, such as Walter Reed, where a 
large number of seriously injured servicemembers are being 
cared for? Also, can you describe what costs would be 
associated with expanding BDD services to reach, again, all 
seriously wounded servicemembers and get them into the VA 
compensation system upon separation from the armed services, 
including the Guard and Reserves?
    Mr. Cooper. Yes, sir. Mr. Chairman, there are two separate 
questions there. One question is how are we dealing with the 
seriously wounded who come into Walter Reed or Bethesda and 
eventually get to about eight military facilities around the 
country. That is completely separate from Benefits Delivery at 
Discharge because we have prioritized these veterans since 3 
years ago when Secretary Principi set up what he has called the 
``Seamless Transition Program.''
    We have people at Walter Reed, at Bethesda, and at the MTFs 
who contact the young men or women, the service personnel, and 
their families and try to explain, when they are ready to 
receive that information, everything that we can tell them 
about benefits. Then we try to make sure that, as they leave 
Walter Reed or as they leave other MTFs, we have gotten all the 
medical information necessary to adjudicate the claim. Our goal 
is to have the claims as soon as we receive notice that they 
are out of the service, the DD214 in hand, which we have to do 
by law. We then adjudicate the claim, and our goal is to have 
them receiving pay as soon as possible, about 40 days after 
they are out of the service. That is the way we have 
consistently been working with these seriously wounded the last 
3 years.
    Now, once in a while there are some that fall through the 
cracks. That is terrible. As soon as I find out about that, we 
jump on it and take care of them. But, in general, that is the 
way the system operates.
    The BDD system, on the other hand, is strictly for those 
people who are leaving the service or retiring and we tell them 
they can come to us 180 days before they get out, but at least 
if they come in 60 days before we should be able to adjudicate 
their claims under Benefits Delivery at Discharge. So, shortly 
after they are discharged, they will start receiving whatever 
disability benefits that they are allowed by the system.
    There are also those who, as they get out, do not want to 
file for benefits so soon or, for some reason, cannot come to 
us at the military facility where we have people. They may come 
the week before they leave or a couple of days before they 
leave. We then take their claim and send it to the regional 
office of jurisdiction where they are going to finally be 
located. They have to tell us where they are going to move. 
Then we get the records to the regional office that has that 
jurisdiction. So, we are talking about two separate programs 
here.
    Last year, we were able to adjudicate our BDD claims in 
about 64 days. That is, if we can get the medical record early. 
That is a primary component, getting the medical record the man 
or woman has as they leave the service.
    Chairman Akaka. I also asked, so it becomes three parts of 
that question, and that was the cost of expanding BDD services 
and the costs associated with that.
    Mr. Cooper. I will take that question for the record. I 
cannot tell you the cost. However, let me say that last year we 
could have taken in many more claims. The problem is contacting 
people, as they are getting close to getting out. We try to 
make ourselves available. We make presentations. We reach out 
to them. Right now I do not feel it would be effective for us 
to have more than those two sites for adjudication and, as I 
say, 140 sites at various military facilities to have an intake 
for all of those claims.
    Chairman Akaka. Thank you. Well, we have a second round.
    Senator Tester?
    Senator Tester. Mr. Chairman, I just want to make sure I 
heard what I heard here a bit ago, and it deals with the forms 
you receive from DOD are all paper copies.
    Mr. Cooper. Yes, sir.
    Senator Tester. Those files.
    Mr. Cooper. Yes, sir.
    Senator Tester. Has there been any effort to make those 
electronic?
    Mr. Cooper. This has been discussed, and I think you will 
find that on the VHA side or the medical side they have been 
talking and I think OSD is moving forward on a program. But 
this is still under discussion.
    Senator Tester. Because if it revolves around the security 
issue, that is not reasonable.
    Mr. Cooper. I did not mean to say that. I thought I was 
talking on another subject.
    Senator Tester. OK.
    Mr. Cooper. Once we have these records, we want to broker 
them to another place that has the capability to process them. 
We have to send these records and they are paper records.
    Senator Tester. OK. You know, you have got a lot of smart 
people working for you, and I know there are a lot of smart 
people in every area of Government--DOD, all down the line. We 
are well into the 21st century here, and, quite frankly, being 
a farmer, I would probably be the last one to tell you this. 
But if it was not for electronic communication, it would be 
very difficult to do my job. This is a tremendous impediment 
for you, and I know you cannot do it alone, but it would seem 
to me that it would help everybody in the system if there was 
some sort of standardization in electronic availability of 
these records. If you want to address that, that would be 
great.
    Mr. Terry. Thank you very much, sir. I would like to 
address a different aspect of it. While DOD, as the Admiral has 
said, is moving, like we are, to an electronic system--and we 
hope to have them there before too long. I know when I was in 
the Marine Corps, that was a big push by the Marine Corps to 
get our records more effectively reproduced in electronic 
fashion.
    Let me just tell you one concern we have and one of the 
things we are working with the court system on. Rule 9, for 
example, of the Court of Appeals of Veterans Claims requires at 
this time that they have a total paper record before they will 
consider an appeal. And the Court of Appeals for the Federal 
Circuit requires the same thing in very much a similar rule to 
Rule 9 of the Court of Appeals of Veterans Claims.
    So those are challenges we are working with those courts to 
change as well, and we are working very hard to do that. We 
expect that within the next year or two, we will have that 
fixed. And that is something that Admiral Cooper and myself and 
our staffs have been working with the court to change, because 
as long as we have to have this paper record in total form 
before they will process that appeal, and if it goes to those 
courts--and, of course, each one of our veterans has an 
absolute right to do that--we are going to have to maintain 
those paper records. And that is one of the things that has 
really been holding us up.
    But as I say, Senator, we are working very hard to change 
that, and we are pushing the court to do that.
    Senator Tester. Well, you know, I just think that you are 
going to be pulling a plow for a long time until you get this 
situation squared away. You know, in 1985, this was probably a 
good way of doing it, but we are well beyond that.
    I just want to touch on the interface between--for 
providing services. You know, as an elected policymaker, I 
really depend upon the bureaucracy to really do a good job. I 
can appropriate all the money, and I can have all the good 
ideas, and if it is not implemented and the money is not spent 
right, it does not do one bit of good. And I have got to tell 
you, over the last 2 months you deal with a myriad of projects, 
and I could go down the list, but it would take all the time. 
You know what I am talking about.
    This is another one of those projects, and it is a project 
for me that really hits home, because we have got a lot of 
veterans in the State of Montana, and from a pure principle 
standpoint of what is right for this country to be doing, it 
makes no sense to me that DOD and VA are not just working hand 
in glove to make sure of the transition and make sure the 
people get the services they need.
    And when we talk about the priority for the veterans now 
coming back from Iraq and Afghanistan, I really applaud that. 
But I think you also need to know that there are a lot of 
veterans out there from the first Gulf War, from Vietnam, and 
before--they need help, too. And I would hope that they are not 
forgotten about, and I know they will not be.
    But the bottom line is this: I really think that I cannot 
fix this for you, and if it is a turf war, it needs to be put 
aside. But there is a problem here. There really is a problem 
here. I hear about it way too much for it just to be some 
disgruntled veteran that is not happy. I hear about it 
everywhere I go. And my question is: Do you have people within 
your staffs that have solutions on how to fix this? Because, 
quite frankly, if you do not, we are really in trouble.
    Mr. Terry. Senator, I think we do. I think everybody in our 
staff, whether it be Admiral Cooper's staff or my organization 
or in the Secretary's office, is adamant that we will find 
solutions. For example, there is a meeting tomorrow with DOD on 
many of these same issues. One of the Committees is meeting, 
and that is an ongoing process. People are not hesitating to 
come up with good ideas and try to make it work. Sometimes we 
have existing regulations that make it more difficult.
    For example, in the appeals resolution time that I deal 
with every day, we have 330 days of built-in mandatory waiting 
times in that process. So before--we have to give 60 days after 
receipt of the NOD to offer the DRO process, have to make that 
available, have to give them that much time before we can move 
on because we do not know what they are going to give us during 
that period of time. And there are seven or eight periods like 
that that we are dealing with. If we can cut it down to 30 
days--and there is no reason we could not, with the kind of 
representation. Those are the kinds of things we are 
recommending.
    Senator Tester. Can that be done administratively or does 
that have to be done at this level?
    Mr. Terry. Some of it has to be done at your level. Some of 
it we can do by regulation. I had a chance to talk to your 
staff director a couple of weeks ago, and he had some great 
ideas, too. And we are working with your staff, hopefully, to 
make some of those kinds of changes.
    Senator Tester. I would love to have--and the sooner, the 
better--the recommendations you have to help expedite this 
process, because then we can really start moving forward, I 
think, on getting some things done that really help the people 
on the ground.
    Mr. Terry. Absolutely, and we agree. While these were well 
intentioned, were designed to provide rights at one point, now 
they are really slowing down the process on behalf of the 
veteran, and we need to fix it. I agree with you.
    Senator Tester. I am just guessing, but my guess, part of 
that has to do with the paper form. And if it was done 
electronically, you could cut a lot of those days out.
    Mr. Cooper. Senator, could I ask you a question or make a 
statement? I want to make a statement.
    Senator Tester. You can ask me a question, too.
    Mr. Cooper. I am retired military, and the thing that 
strikes me is: Why don't we take an individual that comes into 
military service and, from then on, everything that is done, 
that information, also comes to the VA, because that individual 
is going to be a veteran. It is one individual. Why do we have 
to suddenly, OK, now you are no longer military, now you are a 
veteran, and now we do this. It seems to me that type of thing 
is the type of thing that could help.
    Senator Tester. Thank you, and I agree.
    Chairman Akaka. Thank you very much, Senator Tester.
    Senator Webb, and you will be followed by a statement and 
questions from Senator Obama.
    Senator Webb. Thank you, Mr. Chairman.
    Admiral Cooper and Chairman Terry and others, I would like 
to emphasize something that I said in my opening remarks, that 
this is the very beginning of an ongoing process, at least in 
this Congress, for us to try to address this kind of abyss on 
both sides, from moving people out of DOD and hitting the wall 
here with the VA and the DVA, and there will be many other 
hearings.
    I want to say I regret, as soon as I finish my statement, I 
am going to have to leave. King Abdullah of Jordan is making a 
presentation to a joint session. I would like to hear what he 
has to say. But what I would like to do here is to follow up a 
little bit actually on what my partner, Senator Tester, was 
talking about because I have a lot of the same concerns, and 
also to suggest sort of an analytical matrix here, where at 
least from my perspective we might move forward.
    I, like many people here, have a long institutional memory 
with respect to the area of veterans law, and I think as we are 
moving forward, we need to tap into that institutional memory 
to give us a better understanding of where things are right 
now, what is different and what is the same.
    We have always had the difficulty, particularly in a period 
of wartime, of the VA being able to absorb veterans and treat 
them fairly and those sorts of things. And I do not think there 
is any group of more well motivated people that I have ever 
worked with than people who work in veterans law and the 
hospitals and all these areas. I hope we can really do some 
honest analysis here about where the breaking points are. We 
tend to focus on sort of the issue of the moment or some 
legislative piece or those sorts of things. But I think I would 
like to start by going back and looking at things like 
examining fairly the impetus for this dramatic increase in 
claims. Some of that is societal when you look at what has 
happened in the breakdown of the medical system, writ large, 
and people just wanting to get into some medical system that 
will take care of them.
    I am wondering, having spent a number of years in veterans 
law, and also at a point in my life doing a lot of pro bono 
work with veterans, whether actually the standards themselves 
have remained the same--the law is pretty much the same--
whether the standards really have remained the same, and 
whether the evaluators being trained now understand what the 
standards are so that they can move these claims with a note of 
certainty about them, not wanting to be second-guessed. You 
know, sometimes people are going to be turned down. That is 
just the way it is. But when they are, they have to 
understand--everybody has to understand--this is done fairly 
and these are the standards, they are the historical standards.
    At the same time, are the claims more complex now? I am 
hearing that people are coming up with seven and eight items on 
a claim, so one claim takes longer just by the nature of the 
way they are being presented. I am curious also about the 
impact of attorney representation, particularly at the claims 
level. Is it going to slow it down? Has it slowed it down?
    And if you look on the other side of that, I know when I 
was doing a lot of work in veterans law, the veterans service 
officers were highly trained from the service organizations, 
and particularly the DAV, if I may say. They had a tremendous 
program, and I know they still do. But is that still the same, 
writ large, among the Veterans Service Organizations? And is 
the body of people separate from attorneys?
    I have strong feelings about the notion of requiring a 
veteran to pay. I do not have strong feelings about allowing a 
veteran to have a lawyer, but I think requiring a veteran to 
pay, particularly on a contingency basis, when some of these 
claims are so minute, I just have a problem with that 
personally, having helped people and been through the system as 
a lawyer helping people at different times in my life.
    Those are the kinds of things, I think, we are going to 
look at from my staff, and Mike McGarvey, who is working with 
us, and who has got a long history of working with the VA. 
Those are going to be the starting points for us in terms of 
trying to deal with this fairly and trying to find out where 
the breaking points are and how we can help move toward a 
solution.
    And I would make one other comment with respect to what 
Senator Tester said about moving from paper to software. We are 
going to be taking a hard look at what the Marine Corps is 
doing. You know, Chairman Terry, you mentioned the Marine 
Corps. And, of course, when you and I were beginning in the 
Marine Corps, the Marine Corps was kind of the joke among the 
services about not being able to do paperwork and that sort of 
thing. Who is going to fill out the unit diary? Who wants to be 
an 01, you know? But they have done a marvelous job. From what 
we are hearing, they have got a great software program.
    I take your point about the certification process, moving 
into what you were calling Rule 9. There are ways that we might 
be able to move around that, but we are going to be looking at 
the Marine Corps system, and perhaps there is something there.
    Mr. Chairman, I thank you for the time.
    Chairman Akaka. Thank you very much, Senator Webb.
    Senator Obama?

                STATEMENT OF HON. BARACK OBAMA, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Obama. Thank you very much, Mr. Chairman. Thank 
you, gentlemen, and I apologize that I did not hear you present 
your testimony, but I have had a chance to review some of the 
issues. And I just want to pick up on a couple of themes that I 
suspect were already discussed, but bear with me if I am being 
repetitive.
    The first point, just on DOD coordination, can you 
reiterate for me, (A) What is being done to integrate VA and 
DOD disability review processes more effectively? and (B) What 
other steps have been taken by the VA to follow GAO's previous 
recommendations that regional offices use an alternative 
resource for obtaining military records prior to going through 
the inadequate Joint Services Records Research Center? As I 
think you are aware, that takes about a year. If you can just 
tell me how we are doing on that front and what steps we are 
doing to improve it.
    Again, this may have already been covered during the 
testimony. If it was, I apologize.
    Mr. Cooper. No, sir, it has not been.
    First, as for the disability process, of course, we have 
our own. And, as you have seen in the paper, when a person goes 
before the PEB, the Physical Evaluation Board in DOD, nobody 
from VA is present. There is no integration in that respect. 
And they make whatever decision they make.
    Then the veteran comes to us and comes through our 
completely separate system. What I can tell you is that, as of 
2 days ago, I got a call from people in OSD saying that we need 
to get together and talk about this.
    The issue of not necessarily merging, but certainly working 
together between the military and the VA is something that is 
in the embryonic stage and will certainly be pushed. But up 
until now, not too much has been done.
    The second question that you asked--do you want me to go on 
to the second question?
    Senator Obama. Yes, please go ahead.
    Mr. Cooper. The second question had to do with what we are 
doing about medical exams. You spoke of getting medical exams. 
There is the record center in St. Louis where we have to go for 
records of older veterans, that is, veterans who never filed a 
claim but, after 20 years--and this is true with many Vietnam 
veterans who are now having effects of Agent Orange--file a 
claim. One of the things they must do is to show that whatever 
disability they are requesting compensation for has a genesis 
to service. If it is Agent Orange related, we must establish 
that they were, in fact, in Vietnam, and that sort of thing. We 
have to have some kind of proof of that. So many times we have 
to get their record because they have retired and the record 
has gone to St. Louis to the archives there.
    We are now working on a process where we can try to 
determine this ourselves to the best of our ability as far as 
what--in PTSD, for instance--the stressor is, what happened to 
them that might have caused stress and, therefore, caused PTSD.
    What we are trying to do now through this program that we 
call Benefits Delivery at Discharge is to encourage everybody 
who is leaving the service to come see us immediately. We have 
140 locations at military sites around the country where they 
can come in and bring their record, and, therefore, we have 
their record. If they bring it timely (and they can do it up to 
180 days before they get out), then we can adjudicate that 
claim and have them start getting paid shortly after they leave 
the service. It is a benefit to them and to us. It is a benefit 
to them because they get the disability payment sooner. It is a 
benefit to us because we now have the medical record.
    For older claims, we still have to go to St. Louis many 
times to retrieve records. For younger veterans, we are trying 
to get the records as soon as possible.
    Senator Obama. I am running short on time, so let me shift 
to the issue of staffing levels. I think it is fair to say that 
a number of us on this Committee have been skeptical about some 
of the agency's assumptions regarding the anticipated number of 
claims in Fiscal Year 2008. You have stated that number at 
about 800,000.
    Mr. Cooper. Yes, sir.
    Senator Obama. Could you discuss in a little more detail 
the assumptions the VA has used in reaching this number? 
Because we are seeing a 39 percent increase in claims since 
2000, a growing number of returned servicemembers from 
Operation Iraqi Freedom and Operation Enduring Freedom. On that 
count alone, there are some 631,000 discharged servicemembers 
who are eligible for some form of care or benefits within the 
VA system. Just give me some sense of why it is that you think 
there is not going to be substantial growth in this area. And 
as you know, we have got a record on this Committee of having 
to deal with emergency supplementals mid-year because of poor 
planning and anticipation of the needs of our veterans.
    Mr. Cooper. Yes, sir.
    Senator Obama. So give me some reason why I should feel a 
little more assurance that these numbers are solid.
    Mr. Cooper. We have a model that we use. The primary 
component of the model is the size of the active duty Reserve 
and National Guard. Over the last 3 years, our estimates of the 
number we expect to get, not counting changes that occur from 
the time we put it in the budget until execution of the budget, 
our model has been within about 1 percent. The 600,000 or so 
that you mention are those who are now veterans coming out. The 
number of those who have come to us, including the seriously 
wounded and others who have have attained veteran status, is 
about 27 percent.
    The main point I want to make is that part of the model is 
predicated on the number on active duty, assuming a certain 
percentage of everybody on active duty will eventually file a 
claim. It has been correct within about 1 percent for the last 
3 years. I can get some more information on the model and 
answer that for the record.
    Senator Obama. I would like to get more information on 
that.
    Mr. Cooper. Yes, sir.
    Senator Obama. If you could work with my staff to make sure 
that we have that information so that we can follow up on that.
    Mr. Chairman, I thank you for the time. I would ask 
unanimous consent to place my written statement into the 
record.
    Chairman Akaka. Without objection, it will be placed in the 
record.
    [The prepared statement of Senator Obama follows:]
  Prepared Statement of Hon. Barack Obama, U.S. Senator from Illinois
    Thank you, Chairman Akaka and Senator Craig, for holding this 
hearing.
    Over the last few weeks, the Nation's attention has refocused on 
the moral question of how we are caring for our returning heroes and 
their families, from the moment they return from combat, to their 
recovery as outpatients, and to their transition and well-being as 
honorable veterans. Gut-wrenching revelations of unnecessary red tape 
and unacceptable delays compel us to fix and more vigilantly monitor 
those agencies and systems that are charged with the sacred duty of 
healing our warriors and guiding them through the process of getting 
the benefits they deserve.
    If the problems at Walter Reed represent the tip of the iceberg--
and sadly, I'm afraid that this is the case--then we are required to 
re-examine all aspects of our care system for servicemembers and 
veterans. And in this effort, I am deeply grateful to Chairman Akaka 
for his leadership on these issues.
    Today we hear from the Veterans' Administration (VA) and the Board 
of Veterans' Appeals (BVA) on their efforts in reducing the VA's claims 
backlog, and the other steps underway to better manage and shorten the 
turnaround time for compensation claims and service delivery. I want to 
join my other colleagues up front in stating that the President's 
budget request for the VA is inadequate, as is the number of new Full-
Time Equivalent (FTE) positions proposed to meet the growing demand of 
increasingly complex benefits claims.
    I was proud to join Chairman Akaka and other Members of the 
Committee in calling for an increase of nearly $2.9 billion in 
additional VA funding above the President's request. A portion of this 
funding will enable expanded hiring of claims workers so the VBA can 
better handle its workload and reduce the backlog. While we want to 
find ways to reduce error rates and streamline processes where 
possible, we cannot lose sight of the fact that these cases are 
increasingly complex and highly variable. Ultimately, the claims review 
and adjudication process is a human one, and we need to make sure we 
have a sufficient number of highly trained experts to shepherd our 
heroes through this process.
    Chronic understaffing and underfunding are only part of the 
problem. I continue to share the concerns of my colleagues that a lack 
of coordination and information sharing between the DOD and the VA 
exacerbate the delay in claims decisions, especially in the evidence 
gathering phase of the process. I have sponsored legislation, the Lane 
Evans Act, which would in part address this problem by requiring the 
Department of Defense to provide each discharged servicemember with a 
complete electronic file of his or her military records, including 
medical information. I hope the Committee will consider this 
legislation this year.
    Finally, I share the assessment of the Government Accountability 
Office (GAO) and our Veterans Service Organizations that we need to 
take one step back and look at broader issues that confound the current 
claims adjudication process, and how we might ensure the VA has the 
resources it needs to get the job done as we welcome a new generation 
of veterans home. I look forward to working with Chairman Akaka, the VA 
and our other partners in addressing this great national challenge.

    Chairman Akaka. Thank you very much, Senator Obama.
    I would like to continue with a second round of questions, 
and to Admiral Cooper, this is something that goes outside of 
the scope of this hearing, but I wanted to ask you for some 
information that you can send me.
    Mr. Cooper. Yes, sir.
    Chairman Akaka. I wanted to tell you about this concern 
that I have given the types of injuries that are occurring as a 
result of the Global War on Terror.
    According to the rating schedule, headaches caused by brain 
trauma are limited to a 10 percent rating. However, migraines 
can have a rating of up to 50 percent. I think that we need to 
be sensitive to the types of injuries that are occurring to our 
newly separated servicemembers and make certain that the rating 
schedule appropriately reflects the effects of their 
disabilities.
    Admiral, can you then please send me the rationale for 
these differences and the rating schedule and any direction 
that has been given to the field regarding rating these 
conditions?
    Mr. Cooper. Yes, sir. I will have to take that for the 
record, and I certainly will.
    Chairman Akaka. Thank you.
    Mr. Terry, it appears that there is still a gap between the 
Board's decisions and the Court of Appeals for Veterans Claims 
determinations. Of the 2,135 merit decisions made by the CAVC 
in Fiscal Year 2006, only 440 cases were affirmed, while 518 
were reversed, vacated, or remanded, and 847 were simply 
remanded for further action.
    I would like some comment from you on these figures, and do 
these numbers concern you?
    Mr. Terry. We have a system, sir, which allows information 
to flow to the deciding body, whether it be our Board or the 
court, in terms of new information concerning certain types of 
disabilities in a way that is very, very different than any 
other appellate process. And while certainly when you talk 
about 518 reversed or remanded, many opportunities exist for 
the court to affirm on any number of the issues before it, but 
there may be one or two that they send back for additional 
information because they are not satisfied in terms of a 
remand. So these 518 cases may not all be in any way totally 
reversed or require total redress. Many of the issues are 
affirmed.
    So I think it is important that we understand that this is 
a very unusual process where information--the record is never 
closed until it gets to the court--and so consequently, you 
have to appreciate that these are cases where we are trying to 
reach out and provide the benefit to the veteran. From our 
perspective, anything the court can do to properly give the 
veteran the benefit, we are certainly supportive of. That does 
not mean we were wrong with the information we had. Very often 
we did precisely the right thing. If the court sees something 
that they have, since our decision, ruled in a way that would 
change the law, then certainly they ought to give the benefit 
of the doubt to the veteran.
    One of the things that is interesting, the court oftentimes 
is taking a case that we have decided, and it is 2 years down 
the road that they are getting to it, or 2\1/2\ years down the 
road. And, consequently, if there are changes, if there is a 
difference in the manner in which this type of disability is 
addressed, either through a change in regulation, certainly 
they want to give the veteran the benefit of that. We certainly 
do not object to that. We applaud it. I do not think that in 
any way denigrates from our use of the existing law at the time 
we are deciding the case.
    So like I say, like the court, we are trying very hard to 
give the benefit of the doubt to the veteran. It is a 
nonadversarial process at our level. We consider it to be a 
very, very important aspect of their work if they have changed 
the way they are looking at any specific disability, to give 
that benefit to the veteran.
    Chairman Akaka. Thank you, Mr. Terry.
    Admiral Cooper, in the President's Fiscal Year 2008 budget 
request, $31.6 million is specifically for VETSNET 
improvements. What improvements do you think will be made with 
this funding?
    Mr. Cooper. Let me explain, Mr. Chairman. VETSNET is 
something that will get us into at least the 20th-plus century. 
VETSNET is a program that was seen as unsuccessful 5 or 6 years 
ago, and we have put a lot of effort into making it a success 
because VETSNET will give us records that we can then keep 
electronically. We have five elements of VETSNET. Three of 
those five elements are in full effect, 100 percent, and the 
two others, which have to do with actual processing of payment 
to the veteran, we are doing very, very carefully because, of 
course, we do not want a mistake in the veteran's pay.
    We have a specific person that is in charge of this who 
answers directly to me. We are also working very closely, and 
have for the last 2\1/2\ years, with the CIO. Two years ago we 
had a group of contractors come in from Carnegie Mellon, SAI 
from Carnegie Mellon, and I asked them to analyze what we were 
doing, what we needed to do, and whether we should continue 
this program. Their reply was, ``Yes, you should. There are 
some things you should do that you have not been doing.''
    And we took those steps. I then said, ``Could you help us 
in managing this?'' They said, ``No, we do not do that.'' So 
then I went back to the CIO, and we brought on board Mitre, and 
Mitre has now been onboard for a year.
    I think we have made tremendous progress, and, in fact, my 
impression is that VA will use the model we have used, the 
model for organizing and running this program, in other 
programs that they are going to be running centrally. So 
VETSNET is very important. This money is to continue us on the 
track to be completely using VETSNET at the end of 2008 or 
early in 2009. To show you the progress that we have made, as 
of the end of February, for all initial claims that came in 
this fiscal year, 38 percent of those claims were done 
completely in VETSNET. So we are making great strides, and I 
think strides that many people thought we would never make. 
But, quite frankly, I am quite proud of what we are doing so 
far in VETSNET and, although it will not get us into the 21st 
century, it will make a major step getting us into a position 
to jump into the 21st century.
    Chairman Akaka. Well, thank you for that. We will certainly 
follow up on that.
    Senator Tester?
    Senator Tester. Thank you, Mr. Chairman.
    Admiral Cooper, if I heard you right to Senator Obama's 
questions, you said that you are projecting about 27 percent 
will request benefits?
    Mr. Cooper. That is approximately right. I just took the 
figures that we have right now from the GWOT report where we 
can identify those who have come in with claims. OSD identifies 
all veterans who participated in the Global War on Terror, and 
then we determine how many have filed claims for benefits. 
Right now it is about 27 percent.
    Senator Tester. OK, because my information shows that in 
2006, 69,000 out of 198,000 that went out of the military 
requested benefits. That is about 35 percent.
    Mr. Cooper. Yes, and I am giving you a figure of all those 
who were in GWOT and all those who have left military service. 
I am basing it on what DOD told me, and the number I have are 
the number of people who actually filed claims.
    Senator Tester. All right. Well----
    Mr. Cooper. I would be glad to get together with your staff 
and make sure we know what----
    Senator Tester. That would be good, but the bottom line is 
that if you underestimate the projections--and I am not saying 
you did, but if they are underestimated, for whatever reasons, 
you are never going to be able to be successful, at least 
unless you have some abilities that I am not--well, I do not 
know about that. OK.
    I think, Mr. Terry, you talked about 2,000 folks are in the 
queue, and that has been some time ago. That was in the first 
round of questions. If a person applies for a benefit and gets 
rejected because of some reason--they did not put the right 
address down, or I do not know why you reject them, but there 
is a rejection because the form is not filled out right. Are 
those classified as being in the queue?
    Mr. Terry. You are talking about an appeal to our Board?
    Senator Tester. I am not actually talking about an appeal. 
I am just talking about getting through the door. I am just 
saying they have got a problem. They fill out the necessary 
paperwork, and for some reason that paperwork is rejected. Is 
that classified as being in the queue?
    Mr. Cooper. Could I answer the question?
    Senator Tester. You sure may.
    Mr. Cooper. Because it comes in to me.
    Senator Tester. Sure. No problem.
    Mr. Cooper. Claims always come in through my outfit.
    Senator Tester. Yes.
    Mr. Cooper. Eventually, they may get to him.
    Senator Tester. OK.
    Mr. Cooper. The major change in incoming claims--you saw up 
there the numbers that Senator Craig had on the chart.
    Senator Tester. Yes.
    Mr. Cooper. The major reason for a large increase 5 years 
ago in the number of people that we needed, and mostly got, is 
something called VCAA. It is the Act which determined exactly 
how we should treat claims. Prior to that time, I was not 
around, but it appears to me that we were not doing well by 
veterans.
    Senator Tester. Yes.
    Mr. Cooper. So as a result, this Act was passed. It is a 
very good Act. It says very specifically that when a veteran 
comes in and wants to file a claim, VBA must send a letter to 
the veteran that is very specific, detailing all the things 
that VBA is going to do and all the things that the veterans 
must do. Also, due to a recent court ruling VBA must state the 
elements that we will use to decide the claim and how we will 
determine the date of claim.
    So the law itself is quite specific on what we should do.
    Senator Tester. OK, and I understand that. Are those folks 
part of the 2,000 then, or are they not? I assume that 2,000 in 
the queue means 2,000 that still need additional paperwork to 
be accepted into the program to get the necessary treatment 
they need.
    Mr. Cooper. The number in the queue right now is 400,000. 
That is the number in the queue.
    Senator Tester. OK.
    Mr. Cooper. And they are in various stages of the process.
    Senator Tester. So we have got 400,000 folks out there that 
are requesting benefits. We do not know for sure if they are 
bogus or not, to be honest. But there are 400,000 folks out 
there that think they deserve benefits that are not being dealt 
with.
    Mr. Cooper. That is correct. And last year, we received 
805,000.
    Senator Tester. So about half of them are being accepted 
and half of them are being----
    Mr. Cooper. No, not necessarily. No. As a matter of fact, 
it really depends on what the veteran is claiming because there 
are various rates. If a veteran requests a hearing, you may get 
one rate----
    Senator Tester. I hear you. I guess the real question is: 
Is 400,000 a figure you are comfortable with?
    Mr. Cooper. No, sir, not at all.
    Senator Tester. What figure would you be comfortable with?
    Mr. Cooper. If I want to get to 125 processing days, I 
think I would be comfortable with a working level of about 
280,000 to 285,000. I think that is about the number that would 
give me a working level for processing claims in about 125 to 
130 days.
    Senator Tester. Do you have recommendations on how to get 
to that point?
    Mr. Cooper. We are doing many things that hopefully will 
get us to that point.
    Senator Tester. One last question--if I might, Mr. 
Chairman-- because my red light just came on. But the question 
I had deals with the stressor event that you were talking about 
with an earlier question, and I think you talked about Agent 
Orange in regards to Vietnam. The veteran has to go back--and 
the files are kept in St. Louis, or are they kept here in D.C.?
    Mr. Cooper. Most of them will be kept in St. Louis.
    Senator Tester. They have to go back and find out what 
event that was where they were exposed to Agent Orange that may 
have caused the PTSD?
    Mr. Cooper. I was answering a couple of different 
questions. In the case of Agent Orange, if you served during a 
specific time period in Vietnam, there are several presumptive 
conditions that can be considered to have resulted from 
exposure--diabetes being the primary one.
    Senator Tester. Yes.
    Mr. Cooper. If you have diabetes today and you were in 
Vietnam during that period----
    Senator Tester. Right.
    Mr. Cooper.--it is presumed you were exposed to Agent 
Orange and, therefore, presumed that you have diabetes as a 
result of it.
    Senator Tester. If you have PTSD, though, you have to make 
a proof that you were exposed?
    Mr. Cooper. In the case of PTSD, we must be able to find in 
your record something that was a stressor, something that would 
cause you to have flashbacks or something that today would 
manifest itself as PTSD.
    Senator Tester. Is Agent Orange one of those?
    Mr. Cooper. I do not think so.
    Senator Tester. The real question here is: Vietnam ended in 
1973, as I recall. We are dealing with something that happened 
to a lot of these folks 40 years ago.
    Mr. Cooper. Yes, sir.
    Senator Tester. How can they be expected to know when that 
happened in order to get that? Do you understand what I am 
saying? I mean, if they were, for instance, in a battle at some 
point in time, my guess is that most of these folks have been 
trying to erase this from their memory for 40 years. How can 
they be expected to know? And do they have any help in 
accessing those records?
    Mr. Cooper. Yes. We try to find out what it was. Besides 
going to St. Louis for the records, we also go to an 
organization at Fort Belvoir that has unit records. So if we 
have the DD214, which says they are now honorably discharged, 
we can find out various places where they were or units to 
which they were attached.
    Senator Tester. Is there--and excuse me, Mr. Chairman. I 
guess I could go on all day, so I will just cut this off at 
this point. But do you feel you have adequate resources to be 
able to help these folks determine when that stressor event 
happened?
    Mr. Cooper. I feel that, with the resources that we have 
requested in 2008, I will be well on the way to having adequate 
resources. But it is a long, lengthy process. It is a very 
involved process. And that is what----
    Senator Tester. I could not agree more. I agree. And that 
is why it is important that we not only get the most bang for 
the buck but are responsive to the needs. Thank you.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Tester.
    I want to thank this panel for your responses. As you know, 
all of us are working diligently to do the best we can to help 
the veterans of our country, and these hearings are conducted 
in an effort to do that. Your responses will certainly help us 
in doing this, and I hope we can find answers, whether it is 
more funds, personnel, or restructuring, to deliver the kinds 
of services that our veterans deserve.
    So thank you so much for what you are doing, and we wish 
you well.
    Mr. Terry. Thank you, Mr. Chairman.
    Mr. Cooper. Thank you, Mr. Chairman.
    Chairman Akaka. I would like to call up the next panel, and 
as you approach the desk, I would like to mention your names 
and your positions: Daniel Bertoni, Acting Director of 
Education, Workforce, and Income Security issues, Government 
Accountability Office (GAO); John Rowan, National President, 
Vietnam Veterans of America; and Rick Surratt, Deputy National 
Legislative Director, Disabled American Veterans.
    We welcome all of you to the Committee. Before the start of 
this panel, I would like to remind the Vietnam Veterans of 
America that although I will allow you to testify before the 
Committee today, all testimony must be received by the 
testimony deadline. I know from my experience with your 
organization that there must be some extenuating circumstances 
as to why your testimony was not received by the Committee by 
the deadline, but let me just say please make every effort in 
the future to get it here on time.
    And with that, I would like to ask you make your 
statements, and I will call you in the order that I introduced 
you. Daniel Bertoni will be first.

         STATEMENT OF DANIEL BERTONI, ACTING DIRECTOR, 
 EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES, GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Bertoni. Good morning, Mr. Chairman and Members of the 
Committee. I am pleased to be here to discuss the Department of 
Veterans Affairs' disability program challenges and 
opportunities.
    Last year, VA provided nearly $35 billion in disability 
benefits to 3.5 million veterans and survivors, and for years 
the disability claims process has been the subject of attention 
by VA, the Congress, and others due to untimely decisions, 
large backlogs, and other weaknesses.
    In 2003, we designated VA and other Federal disability 
programs high risk because these programs were based on 
outmoded concepts and continued to experience management and 
operational problems. Since that time, we have issued numerous 
reports with recommendations for change.
    My testimony today is based on our prior work and focuses 
on three areas: service delivery challenges facing VA; actions 
taken to improve claims processing; and going forward, areas 
where fundamental reform may be needed to significantly improve 
performance.
    In summary, VA continues to experience service delivery 
challenges. While VA has made progress in the past reducing its 
claims inventory, it is now losing ground. Since 2003, pending 
claims have increased almost 50 percent to nearly 400,000. 
Those pending longer than 6 months have also increased more 
than 75 percent to about 83,000. The time required to resolve 
appeals has also been problematic. The current average 
processing time of 657 days is still far from VA's stated goal 
of 1 year.
    VA also faces challenges ensuring that its decisions are 
accurate and consistent. Although the accuracy of decisions is 
currently 88 percent, this figure is well short of VA's goal of 
98 percent. Ensuring that all veterans receive comparable 
entitlement decisions and disability ratings regardless of 
location has also been problematic. We have recommended that VA 
evaluate all levels of its decisionmaking process to provide a 
foundation for addressing decisional inconsistencies.
    VA has taken several steps to improve claims processing. 
The 2008 budget requests over 450 additional claims processing 
staff, a 6 percent increase over last year. Other key 
initiatives include increasing overtime, using retired staff as 
trainers, and piloting a paperless Benefits Delivery at 
Discharge process where servicemember records and other 
evidence are captured electronically prior to separation. VA 
has also enhanced internal training and information sharing to 
reduce the number of cases sent back by the Board of Veterans' 
Appeals due to errors or incomplete evidence. And to improve 
decisional inconsistency, VA has taken action to develop 
baseline data to better monitor and assess decisional 
variances.
    Despite these efforts, several factors may impede their 
efforts. Since Fiscal Year 2000 claims have increased steadily 
from 579,000 to over 800,000 last year, placing a substantial 
strain on operations. Recent court decisions requiring VA to 
assist veterans in developing claims have expanded workloads. 
Additional laws and regulations, such as those creating new 
presumptions of service-connected disabilities, have added to 
the volume of claims. And caseload complexity has also 
increased as more veterans claim multiple disabilities, and VA 
has had difficulty obtaining all relevant documents. Thus, 
continuing to explore new ways to work smarter and more 
efficiently, will be essential to VA's productivity.
    In going forward, there also may be opportunities for 
fundamental reform that could dramatically improve performance. 
In designating VA's disability program high risk, we noted that 
VA's processes do not reflect the current state of science, 
medicine, technology, and the national economy, which has moved 
away from manual labor to more service- and knowledge-based 
employment.
    We also recommended that VA developed a strategy for 
periodically updating its disability ratings criteria to better 
reflect changes in the economy and job market. We have also 
reported that VA's field structure may impede efficient 
operations. Despite limited efforts to consolidate some 
processes and workloads, VA has not changed its basic structure 
for processing claims at its 57 regional offices, which have 
experienced large variations in performance and productivity.
    While re-examining claims processing challenges can be 
daunting, key efforts are underway. In 2003, the Congress 
established the Veterans' Disability Benefits Commission to 
study many of the issues discussed today, including underlying 
program principles, standards for determining disability 
compensation, and issues related to how and where cases are 
processed. The Commission is scheduled to report to the 
Congress by October 2007, and like you, we also look forward to 
the report findings.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions that you or other Members of the Committee 
may have. Thank you.
    [The prepared statement of Mr. Bertoni follows:]


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
Response to Written Questions Submitted by Hon. Barack Obama to Daniel 
  Bertoni, Acting Director, Education, Workforce and Income Security, 
                    Government Accountability Office
    Question 1. You outlined a number of ongoing challenges that might 
confound current VA plans to reduce its backlog and to shorten the 
turnaround on the adjudication process.
    Beyond staffing and funding levels, what in your view is the most 
significant of the challenges you outlined and why?
    Response. The most significant of the challenges we outlined is for 
VA to keep up with a workload that is growing in volume and complexity. 
As we noted in our testimony, the number of rating-related claims VA 
received increased by about 39 percent from about 579,000 in Fiscal 
Year 2000 to 806,000 in Fiscal Year 2006. While VA expects the volume 
of claims to remain at around 800,000 a year in the short term, further 
increases in claims filing are possible. This could be the result of 
more veterans of the conflicts in Iraq and Afghanistan seeking 
benefits, and older veterans filing new and reopened claims. Further, 
as recent history has shown, the expansion of benefit entitlements, 
such as the addition of new presumptive service connected disabilities, 
can significantly increase the number of claims VA receives.
    Meanwhile, according to VA, the complexity of claims is increasing. 
For example, the number of original disability compensation claims 
containing eight or more disabilities increased from about 22,000 in 
Fiscal Year 2000 to over 51,000 in Fiscal Year 2006. Because each 
disability needs to be evaluated separately, these claims can take 
longer to complete.

    Question 2. In your testimony, you alluded to more fundamental 
reform possibilities within the VA, including a reexamination of its 
current regional office claims processing structure.
    Could you provide further insight or comment into this idea and 
associated tradeoffs, especially from the perspective of a Veteran who 
is trying to navigate the claims system?
    Response. VBA currently processes claims at 57 regional offices, 
which experience large performance variances and questions about 
decision consistency. This means that some veterans receive better 
service than others based on where they live. Advantages of processing 
claims at fewer offices could be faster and more consistent decisions.
    VA has already done some consolidations and changes in regional 
office jurisdictions to give veterans faster decisions on their claims. 
For example:

     Processing claims by survivors of servicemembers who died 
on active duty at its Philadelphia regional office.
     Processing claims from veterans in southern New Jersey at 
the Philadelphia regional office instead of the Newark regional office.
     Making decisions on Benefits Delivery at Discharge claims 
at the Salt Lake City, Utah, and Winston-Salem, North Carolina regional 
offices.

    In our opinion, to better serve veterans throughout the country VA 
needs to undertake a comprehensive review of its field structure for 
processing disability compensation and pension claims. Even if VA 
consolidated compensation and pension claims processing into fewer 
offices veterans could still take advantage of public contact and 
outreach services, which would include accepting claims, at offices not 
processing claims. Veterans could also file claims by mail and online.

    Chairman Akaka. Thank you very much for your statement, Mr. 
Bertoni.
    Now we will hear from Mr. John Rowan.

         STATEMENT OF JOHN ROWAN, NATIONAL PRESIDENT, 
                  VIETNAM VETERANS OF AMERICA

    Mr. Rowan. Good morning, Mr. Chairman, and, again, I 
apologize that our testimony did not get to the Committee. 
Unfortunately, one of our computers decided to blow up.
    Chairman Akaka. Well, we are glad to have you here.
    Mr. Rowan. Thank you. I am glad to be here.
    As one of the people that, unfortunately, started to bump 
up the VA's claims processes in the recent years as a service-
connected disabled veteran who originally applied for 
disability for diabetes that significantly increased with 
various secondary conditions, and have gone through that 
process, I understand the process both as a person who has gone 
through it as a veteran, and also as a service rep who actually 
filed claims on behalf of individuals in the system from 2002 
to 2006. After I had retired from my employment for many years, 
I took on that as a task.
    It was very clear to me, coming out of another Government 
sector, that the biggest problem they had, quite honestly, was 
this whole paper problem. Listening to the questions and 
discussions that have gone on this morning, we can sit here and 
talk about the interface between the DOD and the VA, and it 
really does not matter. DOD can get as electronic as it can be. 
It still ends up in the VA, which creates paper. When the VA 
hospital system, which is very good, creates wonderful systems 
on the patient they are dealing with and gives a wonderful 
trail of the individual's history, they have to print it out 
and put it in the paper file. They do not look at it 
electronically and then deal with it electronically.
    I came out of a public sector company, the Comptroller of 
the City of New York, where I reviewed 15,000-page contracts 
electronically through my computer system we had, and not only 
could I review it, but ten other people could review the same 
contract at the same time.
    When I went through my training with the VA as a service 
rep, I remember going to a wonderful training on something 
called the ``Virtual VA'' and how this was all going to work. 
And that was a wonderful idea, because, gee, it reminded me of 
the program that I had left in 2002 when I retired. 
Unfortunately, they were nowhere near doing that.
    When I got a new computer for one of my other service reps, 
they told us--by the way, I asked them what kind of system do 
they need--``we are working on Windows 98.'' And this was in 
2004. Something was radically wrong there.
    So it is very clear that is the big issue. We have got to 
get past that electronic hurdle somehow to deal with all of 
these problems that we are talking about. Then you can talk 
about interfacing between the VHA, VBA, DOD, and BVA, and all 
the rest of it. And that is the real problem.
    There are other issues, however, that we can deal with. One 
of which is from the VSOs' point of view, as, again, somebody 
who handled claims. When we have those claims that are 
presumptive disabilities, like the Agent Orange issues, if I 
have a doctor certifying that I am a diabetic and I have a 
DD214 that shows very clearly I stepped foot in Vietnam, that 
case should take about 2 minutes to rate. The problem is it 
goes into the same system that everything else goes into and 
drags on forever. We need to be able to fast-track what we call 
``ready-to-rate claims'' that everybody agrees everything is 
done and we are ready to go, and the VA rater should be able to 
pick it up, look at it, deal with it, and move it out. 
Unfortunately, again, we are talking about getting that piece 
of paper moved from one end of the office to the other.
    One of the things they talked about taking part in is the 
idea of assisting the newer veterans and getting them on a fast 
track. We have a little bit of a concern with that. We wonder 
if there isn't going to be a little bit of a ``robbing Peter to 
pay Paul'' kind of deal here. While the idea of helping the 
newer veterans and getting them speeded up is a good idea--and 
I really listened to the case that Senator Rockefeller, I think 
it was, or Senator Craig maybe--who talked about the veteran 
who was coming home and was worried about his claim not getting 
adjudicated in time to pay his rent. It is a real issue, and I 
take concern about that. But I want to know where they are 
going to get all these raters from to deal with these claims.
    There is an issue about this idea of putting all the raters 
in one spot. One of the problems, at least, again, from my 
point of view, working in the regional office, we want to be 
able to interface with the people that we are dealing with so 
we can get rid of some of the problems that crop up from time 
to time on a face-to-face basis.
    Anyway, we are here to assist you in the Senate and anybody 
else who would like to talk about that, and I am sure my other 
colleagues in the other organizations will say the same. And I 
appreciate this Senate Committee taking the time to look at 
this very serious issue.
    Thank you.
    Chairman Akaka. Thank you very much, Mr. Rowan. I think you 
know that the two Committees on Veterans' Affairs, in the House 
and in the Senate, have come together and have reinstated their 
meetings with the VSOs. And we are glad to do that and to see 
the kinds of responses we are getting from the VSOs on that. 
But as you know, what is happening now on the question of 
veterans, whether it is benefits or health care, we have 
problems and we must get together to help resolve those 
problems.
    Mr. Surratt?

    STATEMENT OF RICK SURRATT, DEPUTY NATIONAL LEGISLATIVE 
              DIRECTOR, DISABLED AMERICAN VETERANS

    Mr. Surratt. Good morning, Mr. Chairman. Today's hearing 
addresses a major and longstanding challenge for VA: improving 
the timeliness and accuracy of the process for deciding 
disability benefits claims and appeals. The situation can be 
explained simply: The volume of work exceeds VA's output 
capacity, and that leads to backlogs. The input of new work 
exceeds the output, and the work backs up, with consequent 
delays. VA has reacted by pressing for increased production, 
compromising quality, and in turn that created more work at the 
regional office and appellate levels.
    So, if the basic problem is an imbalance between workload 
and capacity, why has capacity not increased to match the 
workload? The DAV submits that in the politics of the budget 
process, VA is not permitted to request the level of resources 
it really needs and that Congress too readily accepts VA's 
projections that it will improve timeliness and quality with 
the resources it requests.
    In its budget submission for Fiscal Year 2006, the VA 
projected that it could reduce its backlog of rating cases from 
321,000 it had on hand in 2005 to 282,000 by the end of Fiscal 
Year 2006, with an average processing time of 145 days. 
However, the backlog of rating cases had grown to 378,000 by 
the end of 2006, and the average processing time was 177 days.
    In its Fiscal Year 2008 budget submission, VA projects it 
will reduce the 378,000 rating cases in its 2006 year-end 
inventory to 369,000 cases in 2007 and 329,000 cases in 2008. 
Instead of going in the direction of reducing the backlog to 
369,000 cases, the VA has again lost ground. Nearing the 
midpoint of the fiscal year, the backlog has grown to 401,000 
cases. Yet the budget submission states, ``The 2008 budget 
provides resources to timely and accurately process a claims 
workload that continues to increase in quantity and 
complexity.'' And at the same time the budget submission 
acknowledges that the workload continues to increase in 
quantity and complexity, it bases VA's resource needs and its 
projections for reducing the backlog in 2007 and 2008 on a 
decrease in claims receipts for those years.
    While resources alone will not solve VA's problems, VA's 
problems cannot be solved without the necessary resources. VA's 
well-intentioned initiatives cannot succeed if they continue to 
be defeated by insufficient resources. Adequate resources are 
the essential foundation for rebuilding an effective claims 
processing system. We have to stop deceiving ourselves and 
admit that these problems are only going to continue and 
probably get worse if we do not remedy the root cause. As we in 
the DAV have consistently said, 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 adds to the 
load on an already overburdened system.
    Quality is achieved with adequate resources to perform 
necessary 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. 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.
    To achieve optimum quality and claims decisions, VA needs 
to have a system and personnel to perform quality reviews on a 
sample of decisions from every VA adjudicator. Its current 
quality assurance program does not provide information on the 
proficiency of adjudicators at the individual level.
    To correct the problems throughout, we believe Congress 
must invest additional resources primarily at the front end of 
the process to reduce the additional work required downstream 
and to break the vicious cycle in which the push for quantity 
at the expense of quality results in more errors and more 
rework, ever more adding to the backlog.
    That completes my statement, Mr. Chairman, and I would be 
happy to answer any questions that you may have.
    [The prepared statement of Mr. Surratt follows:]
          Prepared Statement of Rick Surratt, Deputy National 
            Legislative Director, Disabled American Veterans
    Mr. Chairman and Members of the Committee:
    I am pleased to appear before you on behalf of the Disabled 
American Veterans (DAV) to address the necessity and means to improve 
timeliness and accuracy in the disability claims adjudication and 
appellate processes of the Department of Veterans Affairs (VA).
    Achieving timeliness with accuracy has long been a major challenge 
for VA, and an ongoing concern of veterans and this Committee. While 
increased resources will not alone cure what ills the system, all of 
the best efforts to overcome the deficiencies are doomed to fail 
without an admission that inadequate resources are at the root of the 
problem and without decisive action to correct that cause for 
difficulties in timeliness and quality.
    Past reductions in staffing levels degraded VA's ability to process 
and decide disability claims in a correct and timely manner. After 
falling behind, it never fully recovered. With continued growth in the 
volume and complexity of claims for disability benefits, VA has not 
requested the resources necessary to overcome the existing backlog and 
stay abreast of that growth, with a consequent adverse effect upon both 
quality and timeliness of claims adjudication. In each of its budget 
submissions for recent years, VA has projected improvements but has 
fallen short of attaining and maintaining reductions in the backlog and 
improvements in quality. The Fiscal Year (FY) 2008 VA budget submission 
affords no reason for optimism. VA's actions have not lived up to its 
promises.
    According to its mission statement for its Compensation and Pension 
Service (C&P), the Veterans Benefits Administration (VBA) ``seeks to 
provide all possible benefits under the law to eligible claimants in a 
timely, accurate, and compassionate manner, and to the extent possible, 
apprise potential claimants of possible entitlement to benefits.'' VA 
maintains that its 2008 budget provides the resources necessary to 
timely and accurately process a claims workload that continues to 
increase in quantity and complexity. According to VA, the requested 
increase in staffing, new information technology initiatives, quality 
assurance programs and controls, and employee training will allow it to 
reduce its pending workload, despite factors that add complexity to the 
process. However, contrary to its observation that the workload 
``continues'' to increase, contrary to the several-year trend of 
consistently increasing claims volumes, and contrary to its discussion 
elsewhere of factors that would likely continue this trend, VA 
projects, without explanation, that it anticipates ``a slight 
decrease'' in receipts in 2007 and 2008. Apparently, this prediction 
was necessary for VA to project that it could reduce the backlog with 
the resources it requests in the budget. VA provides this overview at 
page 6A-2 of Volume II of its budget submission:

          The 2008 budget provides resources to timely and accurately 
        process a claims workload that continues to increase in 
        quantity and complexity. Disability compensation and other 
        claims requiring a rating decision are projected to be 800,000 
        in 2008. If we receive 2007 funding near the levels passed by 
        the House and the Senate, it is projected that our pending 
        workload will decrease throughout 2007, ending the year with 
        369,980 claims pending in our inventory. In order to achieve 
        our timeliness and accuracy performance goals and to reduce the 
        backlog, hiring of additional FTE [full-time employee(s) or 
        equivalent(s)] is necessary.
          The disability claims workload from returning war veterans as 
        well as from veterans of earlier periods has continuously 
        increased since 2000. VBA annual claims receipts grew 39 
        percent from 2000 to 2006--from 578,773 to 806,382, an increase 
        of 227,609. In 2007 and 2008, we anticipate a slight decrease 
        in receipts to 800,000. The complexity of the workload will 
        continue to grow, however, because 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 claimed 
        increased 135 percent from 21,814 in 2000 to 51,260 in 2006.

    (Emphasis added.)
    The rise in claims receipts over the past 7 fiscal years and 
anticipated receipts for 2007 and 2008 are represented in VA's graph at 
page 6B-7:

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    Given that discussion elsewhere in this same area of the budget 
submission contradicts VA's statement that claims receipts will 
decrease in 2007 and 2008, the continuing trends of an increase in 
claims receipts year after year, the absence of any change in 
circumstances that could be expected to reduce the number of claims 
filed, and the absence of stated rationale for VA's expectation of 
fewer claims in the current fiscal year and next year, this appears to 
be an expedient projection.
    The budget submission summarizes the consistent historical trend of 
increasing numbers of claims received each year for the past several 
years:

          The number of veterans filing initial disability compensation 
        claims and claims for increased benefits has increased every 
        year since 2000. Disability claims from returning war veterans 
        as well as from veterans of earlier periods increased from 
        578,773 in 2000 to 806,382 in 2006, an increase of 227,609 
        claims, or 39 percent. In addition to the increased claim rate, 
        there are two other factors that drive future claims activity. 
        First, over this same period of time the number of veterans 
        receiving benefits has significantly increased, both in terms 
        of whole numbers and as a percent of the veteran population. 
        These veterans, like their predecessors, demonstrate similar 
        disability profiles. Orthopedic, mental health, cardiovascular, 
        endocrine, and hearing problems predominate. Most of these 
        conditions can be characterized as chronic progressive 
        disabilities resulting in repeat claims. Second, the average 
        level of disability for veterans on the rolls has increased 
        steadily in the last 5 years reflecting the aging population. 
        Similar to the chronic condition issue, the aging process is 
        likely to result in additional claims for increased benefits.

    (p. 6B-6) During Fiscal Year 2006 alone, ``VA added almost 250,000 
new beneficiaries to the compensation and pension rolls.'' (p. 6B-1) 
From 2002 to the end of last year, VA lost ground in reducing the 
backlog, with a substantial increase in the number of rating claims 
pending: ``In 2003, VBA was successful in reducing the inventory of 
pending disability claims to 253,000. . . . The pending inventory of 
disability claims rose to 378,296 by the end of Fiscal Year 2006.'' 
(pp. 6B-3, 6B-4)
    The added work from the increase in the sheer volume of claims has 
been compounded by other factors: ``Since 2000, VBA has experienced a 
steady increase in workload: in claims receipts, claims complexity, and 
workload generated by improved direct contact with increasing numbers 
of servicemembers and veterans.''
(p. 6B-3)
    In discussing the ``2007 Workload Challenges,'' VA directly 
contracts its prediction for fewer claims in 2007 and 2008: ``Ongoing 
hostilities in Afghanistan and Iraq, and the Global War on Terrorism in 
general, are expected to continue to increase the compensation 
workload. (p. 6B-8) (emphasis added). VA explains:

          More than 1.3 million active duty servicemembers, members of 
        the National Guard, and reservists have thus far been deployed 
        to Afghanistan and Iraq. Whether deployed to foreign duty 
        stations or maintaining security in the United States, the 
        authorized size of the active force, as well as the 
        mobilization of thousands of citizen soldiers, means that the 
        size of the force on active duty has significantly increased. 
        Studies by VA indicate that the most significant predictor of 
        new claims activity is the size of the active force. Department 
        of Defense data show there were more than 213,000 military 
        separations in 2005. These figures do not include the 
        demobilization of Guard and Reserve members and units that 
        remain part of the military. Historical trends suggest that 
        approximately 35 percent (over 74,000) of these separating 
        servicemembers will file a VA disability claim sometime in 
        their life. The claims rate for Gulf War Era veterans is 
        significant. In 2006, nearly 700,000 veterans and 15,000 
        survivors of this era received benefits, comprising the second 
        largest population of veterans receiving benefits after Vietnam 
        era veterans.

    (p. 6B-8) Of course, we now have additional troops being deployed 
to Iraq.
    In addition to more claims proportionate to the increase in the 
size of the active force, VA observes that greater numbers of veterans 
on the compensation rolls means greater numbers of reopened claims:

          The number of veterans receiving compensation has increased 
        by more than 400,000 since 2000, from just over 2.3 million 
        veterans to over 2.7 million at the end of 2006. The 
        compensation recipients, many of whom suffer from chronic 
        progressive disabilities such as diabetes, mental illness, and 
        cardiovascular disabilities, will continue to reopen more 
        claims for increased benefits in the coming years as they age 
        and their conditions worsen. During 2006, reopened disability 
        compensation claims comprised almost 55 percent of disability 
        claims receipts.

    (p. 6B-8) (emphasis added).
    In the 3 years from the end of 2003 to the end of 2006, attendees 
at benefits briefings for separating servicemembers increased by more 
than 87 percent, from 210,025 to 393, 345. VA expects to further expand 
its outreach efforts to servicemembers and veterans, which it naturally 
expects to result in an increase in the volume of claims:

          VA has increased outreach to active duty personnel and we 
        must continue to expand our efforts. These outreach efforts 
        result in significantly higher claims rates. In 2004, the 
        greatest increase in rating receipts was in original claims--an 
        increase of 17 percent (from 167,105 in 2003 to 194,706 in 
        2004). Original claims increased by an additional 8 percent (to 
        210,504) in 2005 and by an additional 3 percent (to 217,343) in 
        2006, which is a 30 percent increase over the last 4 years. We 
        believe these increases are directly related to our aggressive 
        outreach programs and that the increases will continue.

    . . . 

          We anticipate the same high level of commitment in future 
        years. Therefore, we expect the outreach hours and claims rate 
        for separating servicemembers to continue to increase.

    . . . 

          Outreach efforts have been expanded to reach veterans, 
        particularly older veterans, who may not be aware of the 
        benefits to which they are entitled.

    (pp. 6B-9, 6B-10) (emphasis added)
    VA suggests that legislation authorizing Combat Related Special 
Compensation (CRSC) and concurrent receipt of retired and disability 
pay (CRDP) creates a potential for added workload:

          Today, more than 54,000 military retirees receive [CRSC]. The 
        military is adding between 1,500 and 2,000 retirees to the CRSC 
        rolls monthly. This benefit and Concurrent Retired and 
        Disability Pay (CRDP), another DOD program that permits partial 
        to total restoration of retired pay previously waived to 
        receive VA compensation, further contribute to increased claims 
        activity. These claims are exceptionally complex, involving 
        significant coordination with service retired pay centers to 
        determine if retroactive benefits are payable. . . . 
          . . . Nearly 194,000 retirees receive CRDP. The number of 
        military retirees receiving VA compensation has increased to 
        more than 819,000 since the advent of these programs. There is 
        now significant incentive for retirees receiving compensation 
        to file claims for increased benefits, as the increased amounts 
        may no longer be subject to offset. Additionally, the total 
        number of retirees as of July 2006 was 1,812,108, meaning that 
        only 45 percent of military retirees now receive benefits. 
        There are over 990,000 who could potentially still file claims 
        due to CRSC and CRDP.

          In 2007, VA anticipates significant workload to result from 
        the ongoing CRSC and CRDP programs.

    (p. 6B-10) (emphasis added)
    The budget submission notes that two court decisions may 
substantially increase VA's workload. In Haas v. Nicholson, the court 
held that Vietnam veterans who served in the waters offshore are 
entitled to the presumption of exposure to herbicides. VA has appealed 
the Haas decision, but estimates a total of 187,208 claims will be 
received; 25,000 in 2007 and the remaining 162,208 in 2008 if the 
decision is not overturned. In addition, a recent ruling by the Federal 
District Court for the Northern District of California in Nehmer v. 
U.S. Department of Veterans Affairs has extended the reach of the Agent 
Orange Settlement Agreement to Chronic Lymphocytic Leukemia based upon 
the extension of the lapsed Agent Orange Act. VA states it has 
identified almost 1,500 cases that must be reviewed and readjudicated. 
Under the court's order, VA must mail an outreach notice to 
approximately 26,000 additional claimants. VA is required to review and 
readjudicate cases for those claimants who respond to the mailing. VA 
notes that, due to the unique rules in the Nehmer settlement and the 
stringent time requirements imposed, these cases require significantly 
more development and management oversight than normal claims. They also 
require priority processing. (p. 6B-11)
    The budget submission also explains how the workload continues to 
increase due to increases in the number of disabilities claimed, 
increasing complexity of the claims, and added judicially imposed 
procedural steps, primarily to fulfill VA's duty-to-assist obligation. 
Some of these observations from the budget submission are as follows:

     ``The number of disabilities claimed by veterans has 
increased significantly. The number of directly claimed conditions 
increases the number of variables that must be considered and 
addressed, making the claim more complex. Multiple regulations, 
multiple sources of evidence, multiple potential effective dates and 
presumptive periods, preparation of adequate and comprehensive Veterans 
Claims Assistance Act notice, as well as adequate and comprehensive 
rating decisions increase proportionately, and sometimes exponentially, 
as the number of claimed conditions increases.''
     ``Combat and deployment of U.S. forces to underdeveloped 
regions of the world have resulted in new and complex disability claims 
based on environmental and infectious risks, traumatic brain injuries, 
complex combat injuries involving multiple body systems, concerns about 
vaccinations, and other conditions.''
     ``VA has started to see increasingly complex medical cases 
resulting in neuropathies, vision problems, cardiovascular problems, 
and other issues directly related to diabetes. As previously discussed, 
much like original claims with more than eight claimed disabilities, 
diabetes claims routinely present multiple variables with which the 
rating specialist must deal. If secondary conditions are not claimed, 
the rating specialist must be alert to identify them. This increasing 
complexity of disabilities adds to the increased complexity of our 
workload and the resources needed to process it.''
     ``The number of veterans submitting claims for post-
traumatic stress disorder (PTSD) has also grown dramatically and 
contributed to increased complexity in claims processing. From 1999 
through 2006, the number of veterans receiving compensation benefits 
for PTSD has increased from 120,000 to nearly 270,000. These cases 
present unique processing complexities because of the evidentiary 
requirements to substantiate the event causing the stress disorder.''
     ``The Veterans Claims Assistance Act (VCAA) of 2000 has 
significantly increased both the length and complexity of claims 
development.''

    (pp. 6B-11, 6B-13) All of this signals a continuing trend of more 
work.
    VA points out that this increasing complexity in the workload 
alone--i.e., with a projected decline in the number of claims receipts 
for 2007 and 2008--require the additional employees it requests: ``More 
FTE are needed to complete claims in an accurate and timely manner due 
to the greater number of disabilities veterans now claim, the 
increasing complexity of the disabilities being claimed, and changes in 
law and process.'' (p. 6B-1) This is the basis for the increase in 
employees VA requests for 2008:
    In summary, the number of conditions claimed, the nature of severe 
traumatic multiple body system combat injuries, highly complex medical 
conditions, and enhanced legal requirements substantially increase the 
complexity of the claims process and claims decisions. The resources 
required to enable us to keep up with the increasingly complex workload 
are, therefore, significantly greater.

    (p. 6B-14)
    VA also admitted that staffing levels in the current year are 
insufficient to gain ground on the backlog: ``The current staffing 
levels do not enable VA to reduce the pending claims inventory and 
provide timely service to veterans.'' (p. 6B-4) VA hopes to reduce the 
backlog some during this fiscal year through ``near-term workload 
reduction initiatives'' funded with carryover funds from 2006: 
``Special near-term workload reduction initiatives are being undertaken 
in 2007 to increase decision output and stem the upward climb of the 
pending inventory. These initiatives are being funded through the use 
of carryover funds from 2006. . . . '' (p. 6B-4) VA will bank on these 
same initiatives to reduce the backlog in 2008: ``Special near-term 
workload reduction initiatives undertaken in 2007 that include 
employment of rehired annuitants and expanded use of overtime will 
continue into 2008, enabling us to increase decision output. With these 
initiatives, we project that more than 840,000 veterans will receive 
decisions on their disability claims in 2008. . . . '' (p. 6B-1). 
Again, all of this is premised on a decrease in the number of claims 
received during 2007 and 2008.
    VA notes that increased claims receipts result in increased 
appellate workloads downstream: ``As claims receipts and the number of 
beneficiaries on our rolls increase, the appeals and other workloads 
also increase. This significantly increases our resource 
requirements.'' VA received 18,000 more claims in 2006 than in 2005, 
with an increase of only 5 direct program FTE for 2007. With its near-
term workload reduction initiatives, VA projects it will increase the 
number of rating decisions made from 774,378 in 2006 to 808,316 in 
2007. (pp. 6B-4, 6B-7) In turn, that will increase its appellate 
workload:

          As VBA renders more disability decisions, a natural outcome 
        of that process is more appellate work from veterans and 
        survivors who disagree with various parts of the decision made 
        in their case. Veterans can appeal decisions to deny service 
        connection for any conditions claimed and disposed of by a 
        denial. They may also appeal the effective date of an award and 
        the evaluation assigned to a disability. In recent years, the 
        appeal rate on disability determinations has climbed from an 
        historical rate of approximately 7 percent of all disability 
        decisions being appealed to a current rate that ranges from 11 
        to 14 percent. Thus, the 808,316 projected disability decisions 
        in 2007 are expected to generate between 88,000 and 113,000 
        appeals. The projected 840,320 completed disability decisions 
        in 2008 will likely generate between 92,000 and 117,000 
        appeals. At the end of 2006 there were more than 133,000 
        appeals pending in field stations and the Appeals Management 
        Center (AMC). In addition, there were slightly less than 31,000 
        appeals pending at the Board of Veterans' Appeals.
          This increase in appellate workload seriously impacts our 
        ability to devote resources to initial and reopened claims 
        processing. Appeals are one of the most challenging types of 
        cases to process because of their complexity and the growing 
        body of evidence that must be reviewed in order to process 
        these claims. In 2001, we received 39,000 notices of 
        disagreement, the initial step in the appeals process. From 
        2003 to 2006, notices of disagreement exceeded 100,000 each 
        year. The number of appeals received is proportionate to the 
        number of decisions made. As workload and the number of 
        decisions made increase, so too will the number of appeals. 
        Likewise, the number of actions taken in response to our 
        appellate workload has increased. In 2001, we processed more 
        than 47,600 statements of the case and supplemental statements 
        of the case. In 2006, this number increased to more than 
        134,000 statements of the case and supplemental statements of 
        the case.

    (pp. 6B-14, 6B-15)
    The budget submission projects rating decision output per FTE at 
102.8 decisions in 2007 and 101 decisions per FTE in 2008. (p. 6B-4) 
The budget submission for Fiscal Year 2007 had projected 108 decisions 
per FTE. (Vol. 2, p. 5B-5) With the projected decrease in claims 
receipts and its estimated increase in the number of rating decisions 
in both 2007 and 2008, VA projects that it will reduce the backlog:

          In 2007, we anticipate a slight decrease in disability claims 
        receipts over the 806,382 claims received in 2006, to 800,000 
        claims. The one-time workload increase in 2006 that resulted 
        from the six-state outreach initiative (approximately 8,000 
        claims) is not projected to continue into 2007 and 2008. With 
        an FTE level of 7,863 and our near-term workload reduction 
        initiatives, we estimate 808,316 completed claims and an end-
        of-year pending [rating] inventory of 369,980.
          In 2008, we anticipate disability claims receipts will remain 
        level with 2007. Based on a direct FTE level of 8,320 and our 
        near-term initiatives, we estimate completed claims will 
        increase to 840,320 and the pending inventory will decrease to 
        329,660 by the end of 2008.

    (p. 6B-7) If the 8,000 claims from the six-state outreach 
initiative are subtracted from the 2006 total of 806,000, there was 
still an increase of 10,000 claims receipts in 2006 over the 788,000 in 
2005. Again, VA does not explain its prediction of a decrease in the 
number of claims receipts in 2007 and 2008, which contradicts its 
projection in its budget submission for Fiscal Year 2007 that, for 
2007, ``we anticipate receipts will increase 2 percent over the 2006 
projected receipts.'' (Vol. 2, p. 5A-2)
    VA projects that it will reduce the average days to process rating-
related compensation and pension actions from 177 days in 2006 to 160 
days in 2007 and 145 days in 2008, with a target of 125 days. VA 
projects that its national accuracy rate for core rating work will 
improve from 88 percent in 2006 to 89 percent in 2007 and 90 percent in 
2008, with a strategic target of 98 percent. (p. 6B-24, 6B-25)
    As with this year's budget submission, VA has maintained in its 
budget submissions for previous years that it will improve claims 
processing and reduce the backlog with the resources it requests. For 
example, in its budget submission for Fiscal Year 2006, VA projected 
its rating decision output for Fiscal Year 2006 would be 109 cases per 
direct labor FTE and 825,000 total. VA projected that it would reduce 
the pending inventory of rating claims from 321,458 to 290,000 by the 
end of 2005, and that it could further reduce the pending inventory to 
282,876 by the end of 2006. (Vol. 1, pp. 2A-10, 2A-11.) VA estimated 
the average time to complete rating-related actions would be 145 days 
in 2006, with a strategic target of 125 days. It predicted a national 
accuracy rate for core rating work of 90 percent, with a strategic 
target of 98 percent. (p. 2A-14) However, as noted, its rating decision 
output per FTE was 98.5, its total rating production was 774,378 
decisions, and it ended Fiscal Year 2006 with an inventory of 378,296 
claims with an average processing time of 177 days and a national 
accuracy rate of 88 percent. Actually, the gap between VA's predicted 
output for 2006 and its performance is wider than indicated by these 
numbers because it projected reducing the backlog to 282,876 claims 
despite the expectation that it would receive 818,076 claims ( p. 2A-
10) rather than the 806,382 that it actually received. With the 
resources VA has requested, it has been unable to reduce the backlog. 
Instead it continues to grow.
    A repetition of VA's summary of the trend of annual increases in 
the volume of claims along with its acknowledgment that it has been 
unable to make progress in reducing the backlog since 2003 provides a 
more accurate picture upon which to base expectations for 2007 and 
2008, in our view:

          Since 2000, VBA has experienced a steady increase in 
        workload: in claims receipts, claims and complexity, and 
        workload generated by improved direct contact with increasing 
        numbers of servicemenbers and veterans. If resources are 
        insufficient to handle this increased workload, our pending 
        claims inventory rises and presents difficult management 
        challenges. For example, disability claims from returning war 
        veterans, as well as from veterans of earlier periods, 
        increased by 39 percent from 2000 to 2006. In 2003, VBA was 
        successful in reducing the inventory of pending disability 
        claims to 253,000. Since 2004, increased claims and court 
        decisions requiring new procedures and readjudication of claims 
        have precluded VBA from sustaining previous gains.

    (p. 6B-3) As of February 17, 2007, the number of rating cases 
pending was 401,701 of which 111,575 had been pending over 180 days. We 
are now approaching half way through Fiscal Year 2007 and not moving 
toward VA's projection of reducing the backlog to 369,980 rating 
claims.
    Discussing external factors that affect the workload, VA observed: 
``Negative impact could be realized if workload receipts are 
significantly higher than anticipated. . . . '' (p. 6B-30) It appears 
that VA's projection on claims receipts was wrong or its plan for 
reducing the backlog is not working.
    As we have consistently said, 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 adds to the load on an already 
overburdened system. Quality is achieved with adequate resources to 
perform necessary 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. 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.
    In connection with its review of variances in average annual 
compensation payments among the states, VA's Inspector General surveyed 
rating veterans service representatives (RVSRs) and decision review 
officers (DROs) to obtain their input on issues that affect the rating 
of disability compensation claims. RVSRs and DROs expressed generally 
positive opinions of the quality of their training, but their responses 
indicated training has not received high priority. Department of 
Veterans Affairs Office of Inspector General, Rep. No. 05-00765-137, 
Review of State Variances in VA Disability Compensation Payments 58 
(May 19, 2005). In a recent survey of VA raters conducted by the Center 
for Naval Analysis (CNA) for the Veterans' Disability Benefits 
Commission, 32 percent of those responding said that getting needed 
training was among the top three greatest challenges they face. 
However, VA appears to be doing the best that it can to provide better 
training to improve quality with the resources it has been given. VA 
outlines its enhanced training programs in its Fiscal Year 2008 budget 
submission at page 6B-17. Unquestionably, training is essential, but 
effective training programs require resources:

          While additional claims processors are critical to deal with 
        this workload, the quality of claims decisions and the services 
        provided is also critical. VBA's robust training program is the 
        key to improving the quality and consistency of our decisions 
        and will enable us to be flexible and responsive to changing 
        workload volumes. VBA is engaged in an ongoing effort to 
        improve its training systems for new employees and to raise the 
        skill levels of its existing staff. Improved quality and 
        consistency require resources dedicated to providing employees 
        with more and better training, up-to-date tools, and IT systems 
        to support their decisions.

    (p. 6B-6) The most essential resource is experienced and 
knowledgeable personnel devoted to training: ``Our need to continually 
enhance our national quality assurance and training programs 
necessitates additional staffing that will improve consistency, 
quality, certification, and timeliness.'' (p. 6B-17) If experienced 
adjudicators must spend part of their time training other employees, 
there must be more employees overall to avoid falling further behind in 
battling the backlog.
    Regarding sufficient time to properly develop and decide a claim, 
RVSRs and DROs surveyed by the Inspector General's Office thought VA 
management's emphasis on quantity rather than quality had an adverse 
effect upon their ability to properly dispose of claims:

          RVSRs and DROs believe their objectives are different from 
        those of their managers. We asked them to rank the importance 
        of 16 potential objectives. Their responses indicated that when 
        rating claims their most important objectives are complying 
        with applicable criteria, granting the highest ratings allowed, 
        and ensuring they have sufficient information before making 
        decisions. We also asked them to rank the importance to their 
        managers of 15 comparable objectives. Their responses indicated 
        that they believe the most important objectives for their 
        managers are maximizing the number of ratings done each day, 
        reducing the backlog of pending work, and improving the 
        timeliness of ratings.
          Survey responses showed that RVSRs and DROs are concerned 
        about their production standards, and many respondents 
        indicated that the need to meet production standards adversely 
        affects the quality of their work.

         Forty-seven percent said it is generally difficult or 
        very difficult to meet their daily production standards; 22.5 
        percent said it is generally easy or very easy.
         Forty-nine percent strongly disagreed or disagreed 
        somewhat with the statement that they have no difficulty 
        meeting their production standards without sacrificing quality; 
        30.5 percent strongly agreed or agreed somewhat with that 
        statement.
         Fifty-seven percent strongly agreed or agreed somewhat 
        with the statement that they have difficulty meeting their 
        production standards if they make sure they have sufficient 
        evidence for rating each case and thoroughly review the 
        evidence; 24.1 percent strongly disagreed or disagreed somewhat 
        with that statement.

    VA OIG Report at 60?61. Among the raters responding to the CNA 
survey, 85 percent said that having time to process a claim was one of 
the top three greatest challenges.
    The survey of RVSRs and DROs by VA's OIG cited insufficient 
staffing as the cause for too little time: ``Most RVSRs and DROs do not 
believe [VA Regional Offices] have sufficient rating staff. Sixty-five 
percent indicated that the rating activities in their offices have 
somewhat smaller or much smaller staffs than needed to provide timely 
and high quality service.'' VA OIG Report at 61. The OIG report quoted 
the following narrative remark from the survey: ``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.'' 
VA OIG Report at 61
    Sufficient staffing permits sufficient time to properly develop and 
decide claims and sufficient time to devote to training without 
allowing the backlog to grow. Discussing survey responses from RVSRs 
and DROs, the OIG report at page 61 noted: ``The most frequently 
discussed issue, mentioned by 193 respondents, was management's 
perceived emphasis on production at the expense of quality. The second 
most frequently discussed issue, mentioned by 44 respondents, was the 
need for more and better training.''
    VA's quality assurance tool for compensation and pension claims is 
the Systematic Technical Accuracy Review (STAR) program. Under the STAR 
program, VA reviews a sampling of decisions from the regional offices 
and bases its national accuracy measures on the percentage with errors 
that affect entitlement, benefit amount, and effective date. If STAR 
were being used effectively, we question why 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 signals outright arbitrariness in decisionmaking, 
uneven or overall insufficient understanding of the governing criteria 
or rules for decisions, or rules which are vague or overly broad so as 
to allow them to be applied according to the prevailing mindset of a 
particular group of decisionmakers. Obviously inconsistencies must be 
detected before the cause or causes can be determined and remedied.
    To address concerns about substantial variations in average annual 
compensation payments among the states, VA's OIG reviewed compensation 
awards from the six states with the highest average annual payments 
(``high cluster'') and the six states with the lowest average annual 
payments (``low cluster'') finding that veteran demographics and 
inconsistent rating decisions may account in part for the variations. 
OIG also found that claims processing practices, the quality of 
disability examinations, staffing levels, production pressures, and 
adjudicator experience and training may influence payment levels. On 
average, veterans in the high cluster states had more service-connected 
disabilities and higher disability ratings than veterans in the low 
cluster. In general, training was a higher priority, adjudicators were 
more experienced and had less difficulty applying the disability rating 
schedule, disability examinations were judged better, and error rates 
were lower in the high cluster states. Adjudicators in the high cluster 
states took longer to adjudicate claims, although the pressing backlogs 
were smaller there and they shipped fewer cases to other offices for 
adjudication. High cluster states had higher percentages of (1) 
represented veterans, who were shown to be higher compensated than 
unrepresented veterans; (2) Vietnam veterans, who were shown to be 
higher compensated than veterans of other periods; and (3) veterans of 
the enlisted ranks, who were shown to be higher compensated than 
veterans of the officer ranks. In the high cluster, a higher percentage 
of veterans exercised their right to appeal than in the low cluster. 
These findings suggest that the trend of lower payments in some states 
may be due in part to lower proficiency in adjudication. Adequate 
resources are essential to proficient claims adjudication.
    The variations between veterans represented by service 
organizations and unrepresented veterans were particularly marked. The 
national averages showed that veterans represented by accredited 
service organizations had substantially higher levels of compensation 
than veterans without representation. The national average annual 
payment for veterans with representation was $10,631, compared with a 
national average of $4,406 for unrepresented veterans. All the states 
in the high cluster had higher percentages of represented veterans. 
Nationwide, 63.8 percent of the veterans receiving compensation were 
represented. In the high cluster states, 69.5 percent of the veterans 
were represented. In the low cluster states, 54.7 percent of the 
veterans were represented. In the high cluster states, veterans with 
representation had an average annual payment of $13,488. Represented 
veterans in the low cluster states had an average annual payment of 
$9,891, above the national average of $8,378 for all veterans. Though 
well below the national average for represented veterans and below the 
national average for all veterans, unrepresented veterans in the high 
cluster states had an average annual payment of $5,637, compared with 
only $3,862 for unrepresented veterans in the low cluster states. Thus, 
represented veterans in the high cluster states received an average 
annual payment that was $7,644 higher than the average annual payment 
of unrepresented veterans in low cluster states. The most telling fact 
here is that the average annual payment of $9,891 for veterans in the 
six states with the lowest average annual compensation payments who had 
service organization representation was higher than the national 
average of $8,378 for all veterans. This would suggest that veterans 
service organization representatives are serving in a role of quality 
assurance, in addition to assistance in thorough record development.
    As a result of these revelations about variances, VA has undertaken 
an effort to identify unusual patterns of variances and assess the 
degree of consistency among its regional offices to enable it 
strengthen guidance and target training to problem areas: ``C&P Service 
has begun a process of identifying unusual patterns of variance by 
diagnostic code, and then reviewing selected disabilities to assess the 
level of decision consistency among regional offices. The outcome of 
these studies and STAR accuracy reviews will be used to identify the 
need for additional guidance and training to improve consistency and 
accuracy, as well as to drive procedural or regulatory changes.'' In 
addition, VA will conduct site surveys for compliance with directives. 
(p. 6B-17)
    The Board of Veterans' Appeals (BVA) now identifies, by the 
specific reason, the number of cases it remands each year to correct 
deficiencies in the record or for due process. In Fiscal Year 2006, BVA 
remanded claims for a medical opinion in conjunction with an 
examination in more claims than for any other reason. This data should 
aid VA in identifying and remedying deficiencies that add to the cycle 
of rework, and we hope this information is being utilized for that 
purpose, along with STAR results and other efforts for improvement.
    While VA's increased efforts are a move in the right direction, we 
believe they still leave a gap in quality assurance for purposes of 
individual accountability for quality decisionmaking. To complement its 
STAR program for measuring quality at the national level, VA announced 
in the year 2000 a new initiative for quality review at the individual 
level. Acknowledging that management needed a tool to consistently 
monitor individual performance, VA created the ``Systematic Individual 
Performance Assessment'' (SIPA) program. Under this program, 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, 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 unremedied. We understand that the culprit behind 
abandonment of SIPA was inadequate resources. Without any quality 
assurance review on the individual level, VA is unlikely to impose 
effective accountability down to the individual adjudicator level, 
where it must go if optimum quality is to be attained. 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. Congress must provide VA management 
with the necessary resources, and VA management must create a culture 
of quality and make a genuine commitment to the mission of providing 
``all possible benefits under the law to eligible claimants in a 
timely, accurate, and compassionate manner.''
    As noted, a natural consequence of increased numbers of claims is 
that the volume of pending appeals and time for resolution of appeals 
has also increased in recent years. The natural increase in the volume 
of appellate workload is compounded by the effects of not sufficiently 
increasing staffing at regional offices to meet increased claims 
volumes and complexity, which adds to the overload and prolongs the 
processing times for appeals at the regional office level. As 
indicated, at the end of 2006, there were more than 133,000 appeals 
pending in VBA field stations and VBA's Appeals Management Center 
(AMC). This was up from the nearly 130,000 pending at the end of 2005. 
Another consequence is increased numbers of remands, which primarily 
impacts on workload, timeliness, and resource needs at the AMC. 
However, with a joint effort by VBA and BVA to reduce the number of 
remands, the number of cases on remand declined from 31,645 at the end 
of 2004 to 21,229 at the end of 2006, according to VA's budget 
submission for Fiscal Year 2008. (Vol. II, p. 7C-4) Most remands are 
processed by the AMC, which had 15,875 cases on hand on February 22, 
2007. Our employees who deal with the AMC and our employees at BVA 
generally give AMC high marks for quality.
    VBA field offices resolved 74,440, or 72 percent, of the 103,212 
appeals resolved in 2006 without necessity for action by BVA. VBA 
resolved another 3,749, or 10 percent of the total, on remand. Although 
we do not have current VA data on the percentage of appeals favorably 
resolved by DROs, we suspect it is substantial. The DRO program has 
been a success story since it was instituted as a part of VBA's 
Business Process Reengineering program several years ago.
    In 2006, BVA decided 25,023 cases on the merits according to the 
budget submission and remanded 12,487 according to the Report of the 
Chairman of BVA for Fiscal Year 2006. (p. 20) The Report of the 
Chairman summarized the Board's production for Fiscal Year 2006 as 
follows:

          The Board issued 39,076 decisions in Fiscal Year 2006, an 
        increase of 4,901 over Fiscal Year 2005, when we issued 34,175 
        decisions. [Board members] conducted 9,158 hearings, which is 
        an increase of 582 hearings held over Fiscal year 2005. The 
        majority of the line [Board members] exceeded their 
        productivity goals and traveled to at least three [regional 
        offices] to conduct 1 week of Travel Board hearings at each 
        site. However, the number of cases pending before the Board at 
        the end of Fiscal Year 2006 was 40,265, which is almost a 3,000 
        case increase over the 37,539 appeals that were pending at the 
        end of Fiscal Year 2005. This increase occurred despite the 
        fact that the Board issued almost 5,000 more decisions in 
        Fiscal Year 2006 than the previous year. If we continue to 
        receive the same high number of appeals and hearing requests 
        each year, the ability to conduct hearings and decide appeals 
        on a timely basis with the current business plan strength of 56 
        [Board members] will present a challenge.

    (p. 3)
    The budget submission for Fiscal Year 2008 describes BVA's quality 
assurance program as one that looks at all aspects of decision quality 
but focuses on substantive qualities for reporting purposes:

          BVA has a formal quality review program to review the quality 
        of decisional products and to identify areas in which 
        professional training is needed. In this quality review 
        process, an ongoing, statistically valid sample of BVA 
        decisions is reviewed and components deemed essential to a 
        quality appellate decision are assessed on a pass/fail basis 
        according to established standards. The five areas examined and 
        scored are: (a) identification of issues; (b) findings of fact; 
        (c) conclusions of law; (d) reasons and bases/rationale for 
        preliminary orders such as remands; and (e) due process. A 
        quantified baseline for decision quality was established for 
        the first time at the outset of 1999. This provided the Board a 
        foundation for establishing quantified decision quality goals 
        and pursuing continuous improvement in the quality of decisions 
        through repeated measurements. In accordance with a GAO 
        recommendation, we consider only substantive deficiencies in 
        our quality assessment. However, while the primary focus is on 
        identifying, quantifying, and correcting substantive errors, we 
        still address minor deficiencies and seek to improve all 
        aspects of our decisions. Areas of deficiency highlighted 
        through this process are used to determine BVA training needs.

    (p. 7C-5) BVA reported a ``Deficiency-free Decision Rate'' of 89.0 
percent for 2005 and 93.0 percent for 2006. Its target for 2007 and 
2008 is 92.0 percent. (p. 7C-5)
    VA uses two measures for timeliness in appeals processing. 
``Appeals Resolution Time'' is the average time from the initiation of 
the appeal by receipt of a notice of disagreement and the final 
decision, either by VBA or BVA. ``BVA Cycle Time'' is the time from 
receipt of the appeal by BVA until dispatch of a BVA decision, 
excluding the time the case was with the appellant's service 
organization representative. Where the first measure is the average 
total time for an appellant to receive a decision, the second reflects 
more directly on BVA's timeliness.
    Timeliness in appeals processing declined in 2005 and 2006. Appeals 
resolution time increased from 529 days in 2004 to 622 days in 2005 and 
657 days in 2006. VA projects that it will further grow to 685 days in 
2007 and 700 days in 2008. BVA cycle time increased from 98 days in 
2004 to 104 days in 2005 and 148 days in 2006. VA projects that it will 
improve to 105 days in 2007 and 104 days in 2008. (p. 7C-2)
    Given that VBA resolved nearly three-quarters of appeals decided in 
2006 without the added time the case would have otherwise been before 
BVA, the appeals resolution time was much shorter than for those cases 
that were decided by BVA. According to the timeline in the Report of 
the Chairman, in a case decided by BVA, the time between the receipt of 
the notice of disagreement and issuance of a BVA decision was 971 days. 
(p. 16). The Chairman's report indicates the average elapsed time 
between receipt of a notice of disagreement and issuance of a statement 
of the case was 188 days; between issuance of a statement of the case 
and receipt of the appellant's perfection of the appeal was 42 days; 
between perfection of the appeal and field office certification of the 
appeal to BVA was 489 days; and between receipt of the certified appeal 
and issuance of a BVA decision was 252 days, for the total of 971.
    The budget submission requests that the staffing level for C&P 
Service be increased from the 7,858 FTE authorized in 2006 to 8,320 in 
2008. (p. 6A-10) Considering that VA is falling further behind in 2007 
despite special efforts to reduce the backlog and given the probability 
that claims receipts will increase, this staffing level is likely to be 
inadequate, just as the current staffing level is inadequate, a fact VA 
admits. The budget submission requests that the BVA staffing level be 
increased from the 2006 level of 452 FTE to 468, an increase of 16. (p. 
7C-10) As noted, with its current staffing and that requested for 2008, 
BVA expects its quality to suffer a slight decline from 2006 levels.
    To correct the problems throughout, we believe Congress must invest 
additional resources primarily at the front end of the process to 
reduce the additional work required downstream and to break the vicious 
cycle in which the push for quantity and the expense of quality results 
in more errors and more rework adding ever more to the backlog.
    We appreciate the opportunity to present our views on this most 
important matter, and we hope this information will be helpful to the 
Committee as it seeks to improve services to disabled veterans.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Barack Obama 
    to Rick Surratt, Deputy National Legislative Director, Disabled 
                           American Veterans
    Question 1. In an ideal world, and I know that's a big leap, what 
would be the aspiration of the VBA and Board of Veterans' Appeals, 
whether in terms of claims worker to Veteran ratios, in terms of 
turnaround time, or some other measure to indicate that we are doing 
right by our Veterans. In short, and I know I'm putting you on the 
spot, what would an ideal VBA look like?

    Response. The problem is well known and longstanding. The volume of 
claims received exceeds the volume of claims decided. With more work 
coming in than is going out, the inventory of claims pending 
accumulates into a backlog that cannot be timely processed. The reason 
for this is a claims volume that exceeds VA's production capacity. This 
imbalance is a product of increasing numbers of claims compounded by 
increasing complexity in the nature of many of the claims without a 
corresponding increase in personnel to meet workload demands. Rather 
than address this problem with increased resources, VA has been forced 
to push its decisionmakers to produce more, which, in turn, requires 
that less time be devoted to developing and deciding claims. 
Inevitably, quality suffers, and the necessity to correct mistakes adds 
even more to the workload.
    VA cannot control the volume and complexity of claims for 
disability benefits. Unless we remove our Armed Forces from the Global 
War on Terrorism and the perilous circumstances inherent in any 
military environment or reduce or eliminate benefits for disabled 
veterans, Congress cannot impact the volume or complexity of claims. 
Neither of those are realistic or acceptable solutions. The problem has 
persisted and will continue to persist, perhaps even worsen, if claims 
receipts are not forecasted accurately and resource needs are not 
stated honestly.
    The solution begins with an increase in personnel. Along with that 
must come better training and the development of better quality control 
measures. Even for VA, determining resource needs is not an exact 
science, but the problem has been that VA's resource requests have been 
tailored to the Administration's budget targets rather than being a 
true approximation of the personnel needed to handle the work expected.
    The challenge for Congress and stakeholders, such as the 
organizations preparing The Independent Budget, in making an 
independent assessment of VA's needs is that they must look behind the 
Administration's assessment and its sometimes expedient assumptions to 
the hard data and historical trends to determine if the 
Administration's projection is out of line with what can reasonably be 
expected, given the workload trends, the VA's past production numbers, 
and VA's success or failure to reduce the backlog with the resources it 
had in recent years. In its estimates of future claims receipts, VA can 
easily adjust the numbers to suit the limits imposed upon it by the 
Office of Management and Budget, but it cannot as easily manipulate the 
numbers with its historical reporting of workloads and its performance 
relative to those workloads. Those circumstances place us in a better 
position to question the legitimacy of VA's request than to make our 
own more exact determination of VA's needs. Nonetheless, by looking at 
the historical workload trend, current factors that may influence that 
trend, and past performance, we can roughly project the number of 
employees necessary to produce the number of decisions required to 
dispose of the incoming workload and begin to make some gains in 
reducing the backlog. That method assumes no appreciable increase in 
worker productivity or administrative efficiency, such as VA often 
assumes in its calculations, because experience does not justify it. 
The shortcoming is that we must rely on VA data, use VA's methodology, 
and use recent experience to adjust VA's assumptions. While the 
resulting approximation may prove to have missed the mark somewhat, it 
almost invariably demonstrates that VA's budget request is too low, and 
the higher projections of The Independent Budget are vindicated year 
after year by VA's repeated failure to meet its stated timeliness and 
backlog reduction goals.
    Unless VA's budget requests start to provide a more honest 
assessment of the resources needed, Congress must rely on its own 
judgment, aided by stakeholder input such as that from The Independent 
Budget. Staffing levels can be determined in terms of ratios between 
projected claims volume and individual employee production 
expectations. Those expectations can be arrived at by looking at past 
performance. An important consideration is to be mindful that, because 
VA is already far behind, it will need more personnel to catch up than 
to stay even once the backlog has been reduced to the optimum pending 
inventory of claims.
    The optimum pending inventory of claims would be the minimum 
required to ensure a steady workflow and avoidance of employees being 
idled by a lack of work. This volume would determine the optimum time 
that a pending claim would be in the queue awaiting action. Beyond 
that, the optimum processing time from receipt of a claim to a decision 
and payment of benefits would be determined by optimum times for 
responses to requests for records from the Department of Defense, VA, 
and private entities along with the task times for each action in 
claims development and decisions. Beyond a point of optimum efficiency, 
these turnaround and task times would be irreducible.
    To set accurate standards for optimum claims inventories and 
processing times, VA must refine its methods for quantifying its 
workload. A claim for service connection involving three separate 
disabilities might take no more time than a claim for service 
connection of a single disability as far as obtaining military medical 
records or other record development is concerned, but the three-issue 
claim can logically be expected to require more time for a decision 
than a single-issue claim. Rating the severity of a disability 
involving subjective symptoms and necessary judgments can be expected 
to require more time than one in which the disability is measured more 
mechanically by objective signs. Rather than treating all claims as 
equal, these kinds of variables must be taken into account if VA is to 
accurately measure its workload for purposes of planning and requesting 
resources.
    With staffing matched to workload, there would be adequate time to 
completely develop and carefully decide a claim thereby avoiding the 
counterproductive effect of errors and rework. Naturally, the better 
trained the employee the higher the likelihood that an accurate 
decision can be made in a shorter time. An influx of new employees 
would require substantial resources for proper training. VA simply 
cannot afford to attack this problem by diverting experienced 
adjudicators away from deciding claims to train new employees. Here, it 
would seem that VA needs to standardize training, and centralize it to 
the maximum extent practical. For necessary hands-on training at 
regional offices, VA should have a staff dedicated exclusively to 
training. VA has used rehired annuitants for training with some 
success. Of course, newer employees could continue to seek advice and 
assistance from experienced adjudicators working alongside them.
    As we have testified, another essential element is individualized 
quality reviews to enable VA to assess and improve individual 
performance. The current STAR program measures quality on a national 
and regional office level.
    With adequate staffing, improved training, and better quality 
control, VA can achieve quality. From quality, timeliness follows.
    Until VA takes a comprehensive approach to studying and employing 
methods to address all these interdependent elements of efficiency, we 
do not believe it is possible to determine precisely in terms of days 
what is achievable in claims processing timeliness goals, beyond those 
irreducible minimums inherent in the process and its governing rules.
    Until VA gets its backlog, and thus its quality, under control, BVA 
will continue to need staffing sufficient to meet an increasing 
appellate workload. With the problems fixed at the front end of the 
process, the percentage of decisions appealed should decline. In 
addition, the number of cases remanded for additional development 
should decline. However, a mass adjudication system as large as VA's 
cannot be expected to achieve perfection. We will continue to need a 
strong appellate board within the administrative process, but the 
primary focus should be on correcting deficiencies at the first level 
of adjudication. In addition to correcting errors and deciding finer 
points of law, BVA can serve as an important part of VA's quality 
assurance program.

    Question 2. The productivity of the compensation and pension staff 
within the VBA is of great concern to all of us. Yet, how do we ensure 
that we're setting the right targets and goals for them, without 
creating the wrong incentives? How do we better give them the support 
they need to apply the highest level of expertise and judgment on a 
particular claim, while doing so efficiently?
    Response. In production efficiency, there is always a balance 
between thoroughness and time. Neither can be completely ignored in 
favor of the other. Yet, as stated, VA must have adequate resources to 
achieve quality first because it can never achieve real timeliness if 
unacceptable error rates require rework, adding to the backlog and 
appellate workload and resulting in protracted claims and appeals 
processing times for those having an immediate and often urgent need 
for the assistance they seek. Instead of a situation in which 
timeliness follows from quality, it has been the other way around in VA 
where the level of quality has depended on how much cases are 
backlogged and how much pressure is put on to quickly decide cases for 
production quantity. In the past, Congress has been somewhat 
hypocritical in accepting the Administrations' inadequate resource 
requests and criticizing VA for losing ground against the backlog. 
Criticizing VA for poor timeliness without providing adequate resources 
creates a strong incentive for managers to push for production at the 
expense of quality. Again, Congress should provide the resources 
necessary for a focus on quality through an adequate workforce, 
adequate training, and an adequate quality assurance and feedback 
program. Although achieving all of this will require an immediate 
investment of money, it cannot be achieved immediately and will require 
a longer investment of time.

    To get a candid view from within VA, we posed these questions to a 
former management employee who is in a position to understand more 
specifically VA's real needs for the Compensation and Pension Service. 
The following are the answers to questions 
1 and 2:
    Response to Question 1. 1VBA would need to increase its staffing 
level in Compensation and Pension by nearly 23-25 percent from the 
fiscal year 06 staffing level of 7858 FTE. VBA would need at least 9665 
FTE (+23 percent), an increase of 1807 FTE. This 9665 FTE includes 9115 
to develop and decide claims and appeals along with another 550 FTE to 
prepare and deliver training and conduct regular (monthly) performance 
reviews of the work. Given timeliness expectations (claims decided 
within 120-180 average days), quality expectations (90 percent or more 
of decisions are error free), consistency expectations (applying 
national policy directives evenly for those decision criteria that 
require judgment for issues of service connection and evaluation of 
disabilities), additional staff is needed to meet these goals before we 
even consider any productivity goals. Moreover, retirement and 
attrition rates should average 6-8 percent over the next 2-3 years as 
employees retire. This means that VBA should lose another 471 to 629 
FTE per year which it will need to backfill/recruit in the coming 2-3 
years in addition to the 1807 FTE to get to and maintain the overall 
9665 FTE level in Compensation and Pension.
    Finally, given the rising number of disabilities claimed per 
veteran, coupled with the complexity of the current laws and 
regulations, including the legal requirements governing the number of 
requests and follow-up requests needed to fulfill VBA's ``duty to 
assist'' in obtaining medical and other evidence, a significant 
increase in staffing is needed in those positions that develop evidence 
(VSR) and decide claims (RVSR). Consequently, just about all of the 
increased staffing outside staff for the training and performance 
reviews (1251 FTE) would go to strengthening these positions. Moreover, 
VBA recent budget formulation models do not include the 550 FTE to 
build necessary infrastructure for training and quality. If VBA's 
staffing level in Compensation and Pension were increased by 25 percent 
rather than 23 percent from fiscal year 06 levels, it would need yet 
another 157 FTE or 9823 total FTE. If a mistake in staffing is made, I 
would recommend the 25 percent increase rather than 23 percent given 
the mission and the current situation. Attrition rates would quickly 
bring VBA into equilibrium to prevent overstaffing for any length of 
time.

    Response to Question 2: Wrong incentives have been set in the past 
and continue to be set. We all recognize that productivity is 
important, but not at the expense of consistency, quality, and 
timeliness. Stressing productivity goals is a big mistake and will 
continue the problems we have seen with inconsistency of 
decisionmaking, poor quality, and poor development of claims. Gathering 
and evaluating evidence continues to be the major problems affecting 
the timeliness and quality of VBA decisionmaking. Consequently, greater 
emphasis should be placed on these aspects of the process and less on 
productivity. VBA does not have any real data on the amount of work 
that can be produced with quality levels that are reliable and 
trustworthy. Stressing quality, consistency and timeliness first and 
foremost would allow VBA to better set more realistic organizational 
and individual productivity goals and standards. Finally, VBA needs 
more staffing even if the number of claims decided each year remain 
constant.
    The increasing complexity of the work coupled with judicial 
oversight ensure that more work effort (FTE) is needed to develop and 
decide claims than was expended traditionally. The data continues to 
show that more disabilities per claim are filed than in the past, more 
claims per lifetime per veteran are being filed, and more effort is 
being expended by VBA to gather evidence and explain decisions that it 
did in the past. All of these factors require a completely different 
approach to productivity and efficiency than has been taken in the 
past. The traditional measure of productivity, end products taken, no 
longer accurately reflects VBA work effort and must be abandoned as it 
takes too big a toll on service levels, i.e., quality and consistency.

    Chairman Akaka. Thank you very much, all of you, for your 
statements.
    Mr. Rowan and Mr. Surratt, you know that the VA has a 
strategic goal of 125 days for a veteran to have his or her 
claim rated. My question to you, with all your experience, is: 
What is an acceptable amount of time for a veteran to have his 
or her claim rated?
    Mr. Surratt. Well, Mr. Chairman, I will not give you an 
exact number of days, but I will tell you--I think I can tell 
you how we should figure that. A veteran files a claim, and 
there is a certain amount of turnaround time, the mailing back 
and forth between the VA and the veteran, an average time for 
that. There are task times, how long it takes to look at a 
record to see how much it needs to be developed, and those 
things can be determined. Task times, how long it takes to make 
a decision on a typical claim. There are statutory times that 
the VA has to give the veteran a certain amount of time to 
respond. So there is an irreducible amount of time. Where the 
real problem is, is the amount of time that these cases spend 
in the queue waiting to get to the next action.
    You heard someone mention this morning about reducing the 
amount of time that veterans get to 30 days to do something. If 
you look at the time line on appeals, for example, veterans, 
once they file a Notice of Disagreement, VA sends them a 
statement of the case, and they have 60 days to respond to that 
statement of the case. I think the average time that veterans 
respond is about 42 days.
    But then after the appeal is certified at the regional 
office and theoretically ready for a decision by the BVA--I 
don't remember how many days it is, but it is something like 
600 days between the date it is certified and the date that it 
goes to the Board of Veterans' Appeals. That is where your 
delays are. A hundred and twenty-five days to me does not sound 
unreasonable. The amount of time it should take to decide a 
case is the optimum amount of time that it needs to stay in the 
queue and adding on these task times that are irreducible.
    You heard Admiral Cooper say that you need to have a 
certain amount of backlog. I mean, you need a steady workflow. 
You do not want to ever be in the situation where you are 
totally caught up because you have people idle. But there is 
also an optimum amount of backlog that you need to keep that 
workflow steady, and those things can be determined. That is 
not exactly rocket science, but where you can identify the 
delay is where these cases sit idle between these steps, and 
the reason they sit idle is because VA does not have--they are 
backed up, and they wait there forever for the next step to be 
taken.
    So that is where you need to focus on when you reduce the 
amount of time.
    Chairman Akaka. Mr. Rowan?
    Mr. Rowan. I would concur with Mr. Surratt's statement on a 
lot of that, particularly with the issue of the time it takes 
when a case is deemed denied and then it has to go to the Board 
of Veterans' Appeals. There is a real problem of getting it out 
of the regional office, even down into the Board of Veterans' 
Appeals to even start their process, which takes a significant 
amount of time.
    Clearly, I also agree that a lot of the time is lost in 
moving things around, and one of the other things that concerns 
me is this idea of putting everything in one basket for, as 
already occurs now. I happen to do a lot of my work, when I was 
doing it, out of the Manhattan VA Regional Office, which, 
unfortunately, was one of those regional offices where the 
staff disappeared. I mean, the place is like a ghost town 
because of retirements, and they never got backfilled and 
replaced. And, therefore, they said, well, gee, we do not have 
enough staff, so we have got to outsource all your claims. So 
they started sending them all over the place, and they end up 
in different parts of the country.
    The problem with that is, it takes time to move all of 
these cases out of New York, literally take that file and mail 
it out to somebody else, and when they have adjudicated, mail 
it back. We never get to talk to that adjudicator sitting out 
in Togus or wherever they are. And that is a problem because 
there is no interface between the rater making the decision and 
building up the case and the VSO who is working on it. And that 
is a problem. So, I mean, I am really concerned about that.
    The 120 days is more than reasonable if they ever got 
anywhere near that. The reality is that is not even close. Even 
the duty to assist letter that we see that goes out initially 
does not get to the veteran half the time in 30 days, and then 
they are supposed to have ``X'' amount of days when they start 
the clock. So there is a real backlog problem.
    Again, I cannot state enough, they have got to get back to 
the problem that they are not electronic, that these files sit 
on paper. I will tell you, I would not want to be a rater at 
the VA. I would not want to be somebody who has to work in that 
system. If you go to any of these VA regional offices and you 
look at these people and look at their desks, and then you look 
at the two desks that are empty next to them--because those 
raters retired--which are filled up with all of the case files 
that they are actually working on, then you can see immediately 
visually why there is a problem. And it is just too obvious.
    Mr. Surratt. Mr. Chairman, I have some of those exact 
times, if you would permit me to give them to you, on the time 
that an appeal sits. Again, once a veteran files a Notice of 
Disagreement, VA responds by sending the veteran a statement of 
the case, and the statement of the case outlines the facts and 
the law that were considered in how they arrived at the 
decision. And for the appeal to go forward, the veteran has to 
perfect that appeal by filing a substantive appeal or a Form 9. 
Now, they have 60 days administratively to do that. I mean, 
actually, they have a year, but VA deactivates the appeal if 
they do not respond in 60 days. On average, veterans respond in 
41 days.
    Once that Form 9 is in the file, the appeal is 
theoretically perfected and it is ready for a BVA decision. But 
the average time nationally in 2006 between the time the appeal 
was perfected and the time it was received at the Board of 
Veterans' Appeals was 489 days.
    So if you want to find where the time is, it is in things 
like that. I do not know why appeals sit in the regional 
offices for, you know, 489 days between the time they are 
theoretically ready for a decision, but those are the areas 
that need to be looked at.
    Chairman Akaka. All right. Thank you for that.
    Mr. Rowan and Mr. Surratt, you heard Admiral Cooper's 
response to my question about prioritization of Global War on 
Terror claims. In your opinion, are enough measures being taken 
to ensure that other veterans with claims in the system are not 
adversely affected by that prioritization system of Global War 
on Terror claims?
    Mr. Rowan. I am not sure that that is happening. I think, 
in fact, something has got to happen somewhere. I mean, if you 
squeeze the balloon on one end, it has got to pop out somewhere 
else.
    I understand they are trying to do it, and maybe if they 
do, in fact, put all the cases in one or two regional offices 
and create the Tiger Teams they are talking about, maybe they 
can speed up the process and, therefore, not totally or 
completely adversely affect everybody else's claims. We had 
seen this earlier on when they had these over 70-years-of-age 
cases. And, again, it was quite obvious, they wanted to get the 
claim done before the veteran died, unfortunately. But even 
dealing with Vietnam veterans, they are in that situation on 
many cases, and there are ways you can try to prioritize a case 
within the VA. If I have got somebody who is literally dying 
from cancer, I can go there to get the VA regional office to 
speed that claim up. You know, and you have got all of these 
kinds of priorities.
    But I will get back to the more basic one, which is when 
the veterans file a claim and they are in that situation that 
one of the Senators had talked about earlier, and you are 
sitting there waiting to get your claim adjudicated to pay your 
rent because you cannot work anymore because of your physical 
disabilities which you believe is a service-connected illness, 
you are hung out to dry. That case just gets pushed further and 
further back because you are giving priority over here--and I 
am not saying we should not help these veterans--in making sure 
that system works. And maybe they ought to be the test case for 
creating an electronic system, and maybe we should say, fine, 
we are going to take all the OIF cases and make them electronic 
and get that--I mean, you can buy a computer system off the 
shelf. DOD has a million computer systems. I cannot believe we 
cannot create one in 30 days to make the system work. High-
speed scanners are easily available. All of these things are 
existing and right now we can walk outside and I can give you 
20 vendors who will sell all that stuff to the VA tomorrow.
    Somebody has got to make that decision to throw the switch 
to turn it into an electronic system, and I would feel better 
if, in fact, they were going to give the OIF priority cases 
that kind of system. And if the DOD has all this electronic 
records, which I believe they already have on all these 
veterans coming out of the military today, because they are 
smarter and they are dealing with all this computer stuff and 
not with what we did in my day and age, then I think that 
should be a good test case. Maybe that should be the cases that 
get set aside, and maybe that is how they try to prioritize it 
and at the same time affect radically how the whole 
adjudication process occurs. And maybe they will learn some 
lessons in the process.
    Chairman Akaka. Mr. Surratt?
    Mr. Surratt. Well, Mr. Chairman, as Mr. Rowan had said, 
anytime you send someone to the front of the line, you send 
someone else more to the back of the line, and that delays 
their case. I think priorities of this type may be necessary, 
but they are a reactive, short-time solution. If the system was 
working efficiently, you would not need priorities. Everyone 
would get their claims decided timely.
    Let me say something about the BDD thing along those lines. 
To qualify for that, you have to have a certain number of days 
left in the military, and you have to have a known discharge 
date. So that applies to veterans who are being discharged 
regularly who may have disabilities. But all these seriously 
disabled veterans in these medical hold companies do not have 
entitlement to that because they do not have a known discharge 
date. And sometimes their records are not there yet and so 
forth. So the more severely injured veterans do not get the 
benefit of the BDD, which is intended to speed up their claims.
    So I think if the military and VA could get together and 
somehow work that out to where these veterans that we hear 
about over in Walter Reed and in Madigan in Seattle and places 
like that, or in the medical hold companies, I think they 
should find a way to get them under the BDD process or a 
similar process, too, because if anyone is deserving of 
expedited service, they are.
    But getting back to the priorities, you give one veteran a 
priority, someone else suffers, and that is not an ideal 
situation.
    Chairman Akaka. Mr. Rowan?
    Mr. Rowan. Senator, can I just add something? The other 
process is that a lot of the people in the DOD in the military 
hospital system do not want to get out of that system because 
they do not want to go to the VA system because they hear the 
horror stories of the people who are getting out. So a lot of 
times it is the soldier, the military person who is saying, ``I 
want to stay here because I am getting good service here. If I 
go out to the VA, God knows what is going to happen to me. And 
they know they are not going to get their claim adjudicated 
right away upon their getting out. Meanwhile, they are sitting 
there getting their military pay while they are sitting in the 
hospital. I have seen that, case after case on that, where I 
finally get the person discharged and then I have got to start 
the VA process instead of having the whole thing done. I mean, 
they could adjudicate between--no matter what date the person 
is getting out, if they have somebody who has had an 
amputation, they know what it is. I mean, let's be honest here. 
So we can take care of a lot of that.
    Chairman Akaka. Well, thank you.
    Mr. Bertoni, VA obtains records from the U.S. Army and 
Joint Services Records Research Center for some post-traumatic 
stress disorder claims. As GAO has indicated, lag time affects 
VA's processing timeliness and decisional accuracy. Can you say 
something on this issue? How do we know that information that 
VA receives from these groups is accurate?
    Mr. Bertoni. That is a two-part question. In terms of the 
PTSD you are referencing to, PTSD claims, I think, in general, 
getting records from these sources is difficult because medical 
records and service records are oftentimes spread out across 
various areas and oftentimes are not where they are supposed to 
be or they are lost. In our report, we were concerned, we 
focused on the PTSD claims, which do take in excess of a year.
    Generally, if a PTSD claim person comes in and can prove 
that they were in combat, were a prisoner of war, their 
allegation of the stressor event or their statement of the 
stressor event, the description, is sufficient pretty much to 
qualify them for a benefit. But if they cannot prove that this 
person was in combat or was a prisoner of war, then it is 
incumbent upon the regional office to go to the VBA units 
located in the National Records Center to have to find that 
information. And if you are lucky enough to have been in the 
Marine Corps, there is an electronic database that can be 
searched fairly--it is accessible. It can be searched quickly. 
And turnaround time for those cases can be as little as 1 day. 
If you are in any of the other services, it essentially 
requires a manual slog through paper files, and it can take in 
excess of up to 1 year.
    So that was an issue. We did find one database that--it was 
an unclassified database--one of the regional offices in, I 
believe, the Chicago area had put together and was using to do 
their own search prior to making the request to the Records 
Center, and it was effective. They were able to get the 
information they needed in 2 to 3 weeks. And they had lent that 
same database to other regional offices for their searches 
also. So we had recommended that perhaps VA should think about 
a comparable system that could be used nationally prior to 
having to make that request to the Records Center.
    In terms of accuracy, our concern was that there was no 
quality assurance check of the work of the researchers that 
were going out to gather the information to bring to the RO to 
make the determination. The information was getting to the RO 
for the most part. For less than four cases there was error. 
But we did not know whether that was all the evidence that 
should have been gathered, the complete history. And there was 
nobody going in on VA's side to go behind, from a quality 
assurance standpoint, to do some sampling to make sure that 
these researchers were not missing key documents that could 
either substantiate or refute the claim. And we, in fact, cite 
an example in our report where that was the case for a Vietnam 
veteran.
    Chairman Akaka. Mr. Rowan?
    Mr. Rowan. Yes, sir. Just a couple of things on that.
    One of the things that needs to be understood, PTSD claims 
can have presumptions, just like the Agent Orange stuff. If you 
have a particular award or decoration, if you have a particular 
combat device such as a CIB or a Combat Medical Badge or a 
Combat Action Ribbon in the Marine Corps and Navy--
unfortunately, us guys in the Air Force, we do not have 
anything like that. Those are automatics. Again, the stressor 
is presumed. If you have got a Purple Heart or you were a POW 
and they have got it on your record, we do not have to go into 
the big song and dance. It is presumed you went through stress.
    The problem is with the 70, 80 percent of everybody else, 
what do I do with the Marine air wing guy who got sent out on 
missions once a month because he was a Marine and they decided 
he had a gun and he ought to go out and use it once in a while 
in Da Nang, for example? Or the truck driver who had to go 
through places where he was getting shot at and bombed and 
everything else on a regular basis?
    The military changed that, if you noticed, with this new 
Combat Action Badge to try to expand identifying those people 
who have been submitted to combat stressors. And I would be 
curious to see if the Combat Action Badge gets added to the 
list. I do not know if it has yet. I do not think it has. But 
it would be interesting to see if it does.
    One of the things that does concern me, however, with the 
new folks in particular with regard to PTSD, we are seeing and 
hearing of cases where the Department of Defense and the Army 
and the Marines and wherever are identifying people with 
personality disorder and not PTSD. And they say, ``Well, you 
have got personality disorder. You are not PTSD, and we do not 
owe you anything, so go away.'' And I am concerned about that 
because that is the old shell game that we have seen going on 
in earlier days. And so I hope that the Senator might be able 
to take a look at that sometime.
    Chairman Akaka. Mr. Bertoni, to follow up on your 
testimony, you noted VA's regional office claims processing 
structure may not promote efficient operations. You noted that. 
In your view, what opportunities is VA missing to improve 
productivity, accuracy, and consistency by maintaining 57 
regional offices?
    Mr. Bertoni. I think it is our view that VA or GAO really 
will not know what they are missing until a proper analysis is 
done to get at those issues, and that is why we have 
recommended that VA take a strategic look at its organizational 
structure to see if it has the people, processes, and 
technology in place to essentially be the most effective 
operating unit that it can be.
    What do we know? I think, as cited today, where VA has 
taken on the Tiger Teams, the special initiative to go after 
problematic workloads in the short term, I think they have 
claimed that there are some positives in terms of productivity, 
accuracy, the establishment of expertise among staff that 
constantly work a particular claim, as well as consistency in 
decisions in terms of entitlement, the dollar amounts 
allocated, and the ratings percentages.
    So if you look at it that way, when you do consolidate, 
when you do restructure and re-engineer processes, these are 
some small tactical areas where there have been, I think, some 
positives.
    We also know that where they have not made some really real 
structural changes in their 57 regional offices, we have the 
opposite. We have productivity issues. We have inconsistency of 
decisions and accuracy rate problems. We have variability 
across the agency.
    So we see that as potentially problematic, and our 
recommendation is that, again, VA needs to really take a more 
strategic step back, not just a tactical step back and just 
sort of fight fires, but step back and look if they have the 
people, processes, and technology in place and how they might 
reconfigure their organizational structure to be more 
effective.
    We do not have the answer. We just think somebody needs to 
look.
    Chairman Akaka. Well, thank you very much for that.
    Mr. Surratt. Mr. Chairman, may I comment on that?
    Chairman Akaka. There are other questions that I will 
submit for the record to you, and I want to thank you for your 
responses. This will be helpful to me.
    But let me conclude this hearing by giving you an 
opportunity to briefly make any other comments before we 
adjourn here and ask any of you three whether you want to make 
any final comments.
    Mr. Surratt. I do, Mr. Chairman. I would like to talk about 
the question you just asked the representative from GAO. 
Regarding consolidation, this is the DAV's view: If you are 
talking about an education claim which does not involve 
judgment, it is just looking at the person's qualifying service 
and so forth, or if you are looking at the aspect of pension 
involving calculations of income, or if you are looking at loan 
guarantee, those kinds of things can be centralized because 
there is not much of a need for the veteran to interact with 
the decisionmaker.
    But one of the good things that VA did as a part of its 
business process re-engineering effort was to establish 
decision review officers, and this was intended where the 
veteran could come in and actually talk to a person who would 
make the decision. And that interaction, face-to-face 
interaction, between the veteran and the decisionmaker proved 
to be very good. So if you take the mainstream disability cases 
and consolidate them, you lose that ability to have the veteran 
come in and personally appear before someone that makes a 
decision in his area.
    In addition to that, if you look at offices like New York 
and St. Pete and some of those, bigger is not better. So I 
would caution the Committee that while consolidation is good in 
some places and even as short-term measures, Tiger Teams are 
good--the Tiger Teams, again, are an indication that the system 
is failing to operate in a routine way. That is a reactive 
measure. So while that is good, it is necessary, it is not a 
long-term solution.
    I would like to say something about Senator Craig's 
recommendations that we look at the Veterans' Claims 
Adjudication Commission recommendations. When that committee 
reported in 1996 or 1997, virtually all the major 
recommendations were rejected by the VA Secretary at that time. 
There was a hearing in the House, at least, and none of the 
major recommendations like lump sums and putting time limits on 
claims and other things, none of those things were accepted. 
They were, in effect, rejected because they all had the same 
method of solving VA's problems. They would reduce veterans' 
rights to solve VA's problems. And let me tell you that DAV is 
opposed to putting time limits on claims, doing anything that 
seeks to accommodate any inefficiency or lack of capacity in 
the VA by taking rights away from veterans. And almost all 
those recommendations did that, and that is why they never got 
off the ground. And I would hope that we do not spend too much 
time pulling that report out of the cobwebs and revisiting 
those bad ideas and attempting to reinvent that broken wheel.
    Thank you.
    Chairman Akaka. Thank you very much.
    Mr. Rowan?
    Mr. Rowan. Senator, just a couple of things that I did not 
get a chance to cover in the early part. One of the big 
problems we are concerned about is the phone lines for the 
people calling in and trying to get information. There is a lot 
of misinformation that has gone on in there, and that has been 
reported out by a lot of folks. Again, one of the other 
problems is the system that they have for tracking the claims, 
where that piece of paper is, is often not kept up-to-date by 
the various people who handle that piece of paper, therefore 
making it difficult for the veterans to find out where they 
are.
    And we really believe that we need to see--I keep hearing 
about this nonadversarial relationship, but it sure does not 
feel that way, at least from my side of it. And I think that 
the whole system could do with a lot more interaction between 
the raters and the VSO service reps of the various 
organizations. As the claim goes on, if somebody has got a 
question, they ought to be able to really come to us, and they 
do not always do that.
    There was also something that I saw in Admiral Cooper's 
statement, I believe it was, about how the raters should be 
able to identify additional stuff and add it on to it. I have 
never seen that. I have never seen somebody get something that 
they did not ask for. And where we get into some of this in 
particular, and I know in my case as a diabetic, with all of 
the secondary conditions, nobody says, ``Oh, by the way, we 
noticed that you have high blood pressure so we will throw you 
another 10 percent on that one.'' No way. I have never seen a 
rater do that--ever. Maybe some of my colleagues have a 
different aspect to that or a different experience of that, but 
the idea that a rater will give somebody extra, something that 
they find because they found it in the system and they know 
they are entitled to it, I would be shocked to hear of that 
happening.
    Chairman Akaka. Thank you.
    Mr. Bertoni?
    Mr. Bertoni. Thank you, Mr. Chairman. I would just like to 
echo one thing relative to productivity. It is our position 
that VA needs to continually strive to increase productivity 
and to really leverage IT resources to get there. We have a 
situation in the Social Security Administration where I spent 
15 years looking at that disability program where they are 
entirely paperless. They are electronic case files. They are 
paperless. They can shift massive workloads to areas across the 
country to expedite processing. They can pull up multiple 
screens and just sift through a few documents that would be 10 
inches--10 feet deep in some records--and be able to develop 
claims. So I think managing the resources that VA has, 
leveraging their resources through IT investment is somewhere 
they need to really look.
    Second, I think the issue of inconsistency needs to be 
addressed. We have recommended that they look at their 
decisionmaking processes at all levels and try to determine 
what level of variability is acceptable, and where it is not 
deemed acceptable, to really focus in on making those fixes. 
And they have made some efforts. They have started. I think, in 
2005, they selected three impairments that were subject to 
inconsistency: knee pain, PTSD, and hearing loss. And in that 
example, they took ten subject matter experts and reviewed 
1,750 claims to try to get at some of the root causes of 
inconsistency. I think they need to do that across their 
impairments to get a good handle on where their vulnerabilities 
are, and they will need to target their efforts in that area.
    Chairman Akaka. Well, I thank you very much, all of you, 
for your responses. It will be helpful to us.
    This hearing of the Senate Committee on Veterans' Affairs 
is adjourned.
    [Whereupon, at 12 p.m., the Committee was adjourned.]



  

                                  
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