[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                  IMPLEMENTATION AND STATUS UPDATE ON

                   THE VETERANS' BENEFITS IMPROVEMENT

                           ACT, P.L. 110-389

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

                                HEARING

                               before the

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                                 of the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            February 3, 2010

                               __________

                           Serial No. 111-58

                               __________

       Printed for the use of the Committee on Veterans' Affairs




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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

       Subcommittee on Disability Assistance and Memorial Affairs

                    JOHN J. HALL, New York, Chairman

DEBORAH L. HALVORSON, Illinois       DOUG LAMBORN, Colorado, Ranking
JOE DONNELLY, Indiana                JEFF MILLER, Florida
CIRO D. RODRIGUEZ, Texas             BRIAN P. BILBRAY, California
ANN KIRKPATRICK, Arizona

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


                            C O N T E N T S

                               __________

                            February 3, 2010

                                                                   Page
Implementation and Status Update on the Veterans' Benefits 
  Improvement Act, P.L. 110-389..................................     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    32
Hon. Doug Lamborn, Ranking Republican Member.....................     2
    Prepared statement of Congressman Lamborn....................    32
Hon. Deborah L. Halvorson,.......................................     3
Hon. Jeff Miller, prepared statement of..........................    33

                               WITNESSES

U.S. Department of Veterans Affairs, Bradley G. Mayes, Director, 
  Compensation and Pension Service, Veterans Benefits 
  Administration.................................................    19
    Prepared statement of Mr. Mayes..............................    52

                                 ______

American Federation of Government Employees, AFL-CIO, John 
  McCray, Rating Specialist, Los Angeles, CA, Regional Office, 
  Veterans Benefits Administration, U.S. Department of Veterans 
  Affairs........................................................    10
    Prepared statement of Mr. McCray.............................    49
American Legion, Ian C. de Planque, Assistant Director, Veterans 
  Affairs and Rehabilitation Commission..........................     8
    Prepared statement of Mr. de Planque.........................    39
Disabled American Veterans, John L. Wilson, Assistant National 
  Legislative Director...........................................     6
    Prepared statement of Mr. Wilson.............................    35
National Organization of Veterans' Advocates, Inc., Richard Paul 
  Cohen, Executive Director......................................     9
    Prepared statement of Mr. Cohen..............................    43
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................     4
    Prepared statement of Mr. Weidman............................    34

                       SUBMISSION FOR THE RECORD

Veterans for Common Sense, Thomas Bandzul, Associate Counsel, 
  statement......................................................    57


                  IMPLEMENTATION AND STATUS UPDATE ON



                   THE VETERANS' BENEFITS IMPROVEMENT



                           ACT, P.L. 110-389

                              ----------                              


                      WEDNESDAY, FEBRUARY 3, 2010

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

    The Subcommittee met, pursuant to notice, at 2:06 p.m., in 
Room 334, Cannon House Office Building, Hon. John J. Hall 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Hall, Halvorson, Rodriguez, 
Lamborn, and Miller.

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Good afternoon. Welcome to the House Committee on 
Veterans' Affairs, Subcommittee on Disability Assistance and 
Memorial Affairs, hearing on the Implementation and Status 
Update of Veterans' Benefits Improvement Act of 2008, Public 
Law 110-389.
    This meeting will now come to order and I will ask us all 
to rise for the Pledge of Allegiance.
    [Pledge of Allegiance.]
    Thank you all for being here today to receive an update on 
the status and implementation of the Veterans' Benefits 
Improvement Act of 2008 (VBIA 2008), Public Law 110-389.
    At the time of its enactment, this law was embraced by many 
stakeholders as a way forward for the VA to revamp and 
modernize its claims processing system to bring relief to those 
veterans, their families and survivors who were languishing in 
an antiquated system in dire need of reform. I was proud to 
lead that effort for the Committee. I am proud of the 
bipartisan cooperation of the Committee in unanimously voting 
for Public Law 110-389, which also received the unanimous 
support of both houses of Congress before being signed into law 
by President Bush.
    Under this law we created the Office of Survivors 
Assistance. This measure also made it possible for survivors to 
step into the shoes of deceased claimants. We also put critical 
pilot programs in place to expedite ready-to-rate claims and to 
provide a checklist with Veterans Claims Assistance Act (VCAA) 
notices so veterans are less confused about what they actually 
need to substantiate their claims.
    In addition, we created the Disability Advisory Commission 
to provide ongoing expert input on the claims processing 
system, particularly with updating the VA Schedule for Ratings 
Disabilities (VASRD), and we created additional checks and 
balances with required studies of VA's work credit system and 
its Work Management system, currently known as the Claims 
Processing Initiative (CPI).
    On a separate note, I wish we could have included Section 
101 of H.R. 5892 in Public Law 110-389 to help the many combat 
veterans who are still forced to prove stressor exposure for 
post-traumatic stress disorders (PTSDs). While this fix was not 
included in Public Law 110-389, it is now a separate bill, 
which I have introduced, H.R. 952.
    However, I am heartened by the U.S. Department of Veterans 
Affairs' (VA's) separate executive rule making efforts 
concerning PTSD claims and look forward to issuance of a final 
rule soon so that veterans suffering from PTSD can get the 
benefits that they have earned and deserve in a more timely 
fashion.
    I am pleased that Public Law 110-389 also laid the 
foundation for a number of initiatives that VA is currently 
undertaking, particularly its Veterans Benefits Management 
System and Veteran Relationship Management initiatives, as well 
as the Business Transformation Lab in Providence, Rhode Island, 
the Claims Processing Pilot in Little Rock, Arkansas, and the 
Virtual Regional Office (RO) in nearby Baltimore, Maryland.
    You clearly have listened to the clarion call from this 
Committee and many veteran stakeholders that the current system 
is broken and in need of a major overhaul. These efforts 
hopefully will result in a system that reflects improved 
accountability, accuracy, quality assurance and timeliness of 
claims processing for our veterans, their families and 
survivors.
    I applaud VA's more deliberative approach on these fronts 
and welcome the opportunity to support the VA in the upcoming 
budget cycles in the VA's efforts to transform the Veterans 
Benefits Administration (VBA) claims processing model.
    I look forward to hearing about how all of these forward-
thinking pilots and laboratory initiatives will put VA on a 
track to processing its compensation and pension (C&P) claims 
in a virtual environment using a 21st century processing 
platform. I also look forward to hearing how VA plans to move 
to an electronic rules-based processing environment by the year 
2012.
    While electronic claims processing is not the panacea for 
eliminating the backlog, coupled with business reformation 
efforts, it will transform the claims processing system in a 
manner that will improve accuracy, consistency and quality and 
accountability, and we all hope, at long last, reduce the 
backlog of claims. We owe our Veterans nothing less.
    I now would like to welcome and recognize Ranking Member 
Lamborn for an opening statement.
    [The prepared statement of Chairman Hall appears on p. 32.]

             OPENING STATEMENT OF HON. DOUG LAMBORN

    Mr. Lamborn. Thank you, Mr. Chairman. And I also welcome 
everyone to this hearing, which is the first of our 2nd 
session, and I look forward to continuing the progress that we 
have made so far in the 111th Congress.
    We are at the midpoint and there are a lot of good 
provisions that we have passed. Perhaps most notably among 
them, the measures that we have worked on to help VA gain 
control over the claims process. The backlog is a major concern 
for everyone who is a stakeholder in veterans' issues, and I 
believe that through a bipartisan, collaborative effort, we 
will begin to resolve the issues that have hampered VA for so 
many years.
    Of course, along with following through on pending 
legislation, we must take a close look at the implementation of 
earlier provisions that became Public Law. That is the purpose 
of our hearing this afternoon, and I am eager to discuss the 
progress that has been made regarding the implementation of the 
Veterans' Benefits Improvement Act of 2008.
    I also look forward to how it is progressing with other 
measures which would increase the accuracy and timeliness of 
benefits' claims decisions and the use of information 
technology, also, of the assessment of disability compensation 
and the efforts to ensure due consideration is afforded to 
veterans for their loss of earnings and quality of life.
    I am interested, as well, if the authority to allow 
substitution upon death of a claimant for purposes of acquiring 
accrued benefits has had a noticeable impact. It is my hope 
that this will relieve survivors of the arduous and time-
consuming process of starting the entire claims process over 
from square one. I expect the VA to discuss the implementation 
of this provision.
    Mr. Chairman, it is a pleasure to be seated with you here 
once again, and I look forward to working with you and all of 
our veterans' advocates in the months ahead.
    Thank you, and I yield back.
    [The prepared statement of Congressman Lamborn appears on 
p. 32.]
    Mr. Hall. Thank you, Mr. Lamborn. The pleasure is mutual.
    And Mrs. Halvorson, would you like to make an opening 
statement?

         OPENING STATEMENT OF HON. DEBORAH L. HALVORSON

    Mrs. Halvorson. Thank you, Mr. Chairman. I just wanted to 
say thank you for having this and I look forward to working and 
making sure that we can get to the bottom of making sure that 
we can fully implement the Veterans' Benefits Improvement Act 
of 2008.
    One of the most important things that I hear everyday is 
the backlog. It is about the benefits. It is about everything 
that is due to our veterans and that we are not doing, so I 
want to make sure that whatever it is that comes of this, that 
we do a better job. So thank you, Mr. Chairman for this 
hearing.
    Mr. Hall. Thank you, Mrs. Halvorson.
    Mr. Miller, would you like to make an opening statement?
    Mr. Miller. I would just like to submit my statement for 
the record, Mr. Chair.
    Mr. Hall. Okay. Without objection, it will be included.
    [The prepared statement of Congressman Miller appears on 
p. 33.]
    Mr. Hall. Once again, I remind all panelists that your 
complete written statements have been made a part of the 
hearing record so that if you wish, you can limit your remarks 
to the 5 minutes allotted time, so that we have sufficient time 
to follow up with questions.
    Thank you all, again, for coming here to share your vision 
or your observations with us.
    On our first panel is Mr. Richard F. Weidman, Executive 
Director for Policy and Government Affairs, Vietnam Veterans of 
America (VVA); Mr. John L. Wilson, Assistant National 
Legislative Director for the Disabled American Veterans (DAV); 
Mr. Ian C. de Planque, Assistant Director for Veterans Affairs 
and Rehabilitation Commission for the American Legion; Mr. 
Richard Paul Cohen, Executive Director for the National 
Organization of Veterans' Advocates, Inc. (NOVA); and Mr. John 
McCray, Rating Specialist in the Los Angeles Regional Office on 
behalf of the American Federation of Government Employees 
(AFGE) with AFL-CIO.
    Thank you all for the work that you do. Thank you for being 
here today.
    Mr. Weidman. You are now recognized for your statement.

STATEMENTS OF RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY 
 AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA; JOHN L. 
   WILSON, ASSISTANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED 
   AMERICAN VETERANS; IAN C. DE PLANQUE, ASSISTANT DIRECTOR, 
   VETERANS AFFAIRS AND REHABILITATION COMMISSION, AMERICAN 
   LEGION; RICHARD PAUL COHEN, EXECUTIVE DIRECTOR, NATIONAL 
  ORGANIZATION OF VETERANS' ADVOCATES, INC.; AND JOHN MCCRAY, 
 RATING SPECIALIST, LOS ANGELES, CA, REGIONAL OFFICE, VETERANS 
 BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS, 
 ON BEHALF OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, 
                            AFL-CIO

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Mr. Chairman, Ranking Member Lamborn, thank 
you. I want to echo the earlier sentiments. Thank you for 
having this hearing and for keeping the dialogue going.
    The statute that we are discussing today really happened 
after a series of round tables last year where people were 
trying to figure out is there, in fact, common ground. The real 
problem there was that the VA officials at that time were 
talking about processes and how long it took to do various 
administrative processes to a paper packet and everybody else 
in the room was talking about what happens to an individual 
veteran who is going through that process and the impact that 
it has on him or her.
    Until we get a common nomenclature, we are going to 
struggle. Among the things mandated by this statute was an 
Advisory Committee which seems to be starting to work well, 
mandated several other things, including putting on a 
checklist, and that is going in four offices. We have read the 
Center for Naval Analyses (CNA) assisted evaluation of that. I 
am not sure that it is particularly helpful.
    The key thing is, are the veterans clearer about it than 
they were before, and in many cases I suspect they are, 
although that didn't come out yet and it remains to be seen 
whether it actually speeds up claims.
    The second half of that is in offices where they are 
supposed to be working on fully developed claims and that is an 
ongoing problem that we have had throughout the Nation.
    The Little Rock, Arkansas, pilot is really almost back to 
the future. The New York Regional Office at 252 7th Avenue, 
back when I was still a young man, used to operate on that 
model of groups where they broke down into small groups and 
worked it as a team and then they got away from that over the 
years. But certainly after about 1979 or 1980, and that is 
essentially what they are going back to with the help of a 
facilitator and it's working well, so that is a plus.
    The paperless office in Providence, I haven't been there, 
so I can't--nor have any of our folks--so I can't really 
comment, although I hear secondhand that both Providence and 
Baltimore seem to be moving along, but it is taking longer than 
one would think.
    The Veterans Benefits Management System (VBMS) system we 
had a briefing on about 2 weeks ago and I am not sure that it 
makes sense to a lot of us that you are going to automate a 
system to track paper claims. It makes no sense to us. You 
ought to be automating the paper claims and that would make a 
great deal more sense.
    There is, however, a new attitude in VBA that has started 
to evidence itself this spring, or excuse me, this winter since 
last spring when we had those discussions, and just last week 
there was a joint meeting between VBA and the VHA, the Veterans 
Benefits Administration and the Veterans Health Administration, 
Mental Health Specialists, to work on the ratings schedule for 
PTSD claims, and there also was Congressional staff there. 
There were advocates there and it was one of the most useful 
exchanges in coming to a common viewpoint that we have seen in 
a long time on these issues about how can you speed it up and 
how can you quickly come to an accurate diagnosis and what has 
to happen.
    Many of the things that are detailed in this statute and 
that need to be done in order to, quote/unquote, ``fix the 
Veterans' Benefit System'' are really just common sense.
    Number one is common training for VA, the veterans service 
organizations (VSOs), the State and local government employees 
in veterans claims law. Second is a common competency-based 
exam for all who touch a claim; three, organizing the claims 
files so that the documents in every single claimant's file are 
in the same order with the most salient documents up front; 
number four along that is a decision template at the beginning 
of every claim that has to be put together for every claimant 
that summarizes the key elements of the claim; and five, 
express lines for presumptive and other ready-to-rate claims; 
and last but not least, a systematic effort to put all the 
information into electronic form.
    There is another that I would add is we would encourage 
this distinguished Subcommittee to work with the Armed Services 
Committee with a view towards digitizing the unit records and 
the individual records in St. Louis, in College Park, and 
elsewhere, which would greatly speed one of the things that 
really bogs down the claims now because it's all paper and then 
VA is not really in control of the process of getting those 
claims.
    My time is up, and once again, let me thank you and your 
distinguished colleagues for having this hearing this afternoon 
and I would be happy to answer any questions. Thank you.
    [The prepared statement of Mr. Weidman appears on p. 34.]
    Mr. Hall. Thank you, Mr. Weidman.
    Mr. Wilson, welcome. You are now recognized.

                  STATEMENT OF JOHN L. WILSON

    Mr. Wilson. Thank you very much, Mr. Chairman.
    Mr. Chairman, Members of the Committee, I am glad to be 
here today on behalf of the DAV to address implementation and 
status of the Veterans' Benefits Improvement Act of 2008.
    Like my colleagues, I was hoping to come to today's hearing 
and comment upon the many studies and pilot programs related to 
improving the Benefits' Claims Process Approval System which 
the law required VA to complete last year. However, since this 
information was not available until we arrived at today's 
hearing, my testimony will focus on other aspects of the law.
    I would ask, however, that the Committee allow additional 
comments that my colleagues and I may wish to make after having 
a chance to review VA's testimony as part of today's hearing.
    Having said that, let me now comment upon a few provisions 
of the law that have already been implemented. First, Section 
101 sought to make VA correspondence to veterans' ratings, 
substantiation of claims, more understandable, uniform and 
useful. A very good idea.
    On December 11th, VA published a proposed regulation that 
we do not believe, however, meets the intent of Congress as 
expressed in Public Law 110-389. In the Federal Register of 
December 2009, VA states in part that they, ``will not provide 
any specific notice in increased rating claims regarding the 
relevant rating criteria under diagnostic codes that are 
applicable to rating the current extent of the claimant's 
disability.'' We believe the intention of Congress was for VBA 
to be case specific.
    When I read Public Law 110-389, that's what it says. We do 
not agree with VA's statements that providing case-specific 
information to veterans would, ``divert resources from the 
development and adjudication of claims and generally would not 
make VA's notices more helpful to claimants.''
    It has been, and continues to be, DAV's view that well 
informed veterans are in the best position to make educated 
decisions regarding their claims. We do not support VA's 
efforts to only develop a generic letter.
    Rather, we instead recommend that it make every effort to 
provide clarity of content and organization of information--
that is key--in every letter on matters of notice to veterans.
    Section 214 established the Advisory Committee on 
Disability Compensation which, among other matters, focused on 
updating the VASRD.
    We agree with the importance of a systematic review and 
update of the VASRD, the source of all disability compensation 
ratings. This rating scheme addresses illnesses and conditions 
running into the hundreds and should reflect the most recent 
medical findings in every case. The Advisory Committee has made 
a number of strong recommendations to strengthen the VASRD with 
which we agree.
    One, the Deputy Secretary of the VA should provide 
oversight of the VASRD process, with VHA and Office of the 
General Counsel fully integrated into this VBA process. Two, 
VHA should establish a permanent administrative staff of nine 
for this VASRD review. At least one permanent party medical 
expert must be on this team and have authority to liaise with 
VBA, assign VHA and medical staff to participate in VBA body-
system reviews and to coordinate with other medical experts.
    The expertise that VHA clinical professionals can bring to 
the discussion should prove invaluable and well worth the 
additional staffing provided.
    For example, a recent VBA/VHA Mental Health Summit, which 
Mr. Weidman referenced, conducted here in Washington just last 
week, demonstrated over a 2-day period that VHA mental health 
professionals outside academics and veteran service 
organizations can serve as effective resources for VBA, that 
VBA reviews changes that are needed in the VBA rating schedule 
for mental health disabilities in particular.
    That simplistic rating schedule on mental health 
disabilities built primarily on diagnosis and subject to 
interpretations by examiners has far too much discretion and 
has been criticized by the Institute of Medicine.
    Also, as indicated in the Independent Budget for 2011, 
which was released today, two other outside reviews have found 
that veterans rated with service-connected psychiatric 
disabilities suffer greater lifetime earnings loss than do 
veterans with physical disabilities.
    We strongly believe VA should update its mental health 
rating criteria to make them fairer, more reliable and ensure 
that those veterans with service-connected psychiatric 
disabilities are equitably and appropriately evaluated and 
compensated.
    We also agree with the Committee's body system 
prioritization, beginning with mental health disorders. Under 
the current system, for example, one veteran service-connected 
for schizophrenia, and another veteran service-connected for an 
eating disorder are evaluated using the same general criteria.
    It is essential that new criteria be formulated to evaluate 
mental health disorders. A number of possible new approaches 
can be found in the VBA/VHA Mental Health Summit results. We 
look forward to participating in their future development, as 
well as continue working with the Advisory Committee as they 
continue their vital work.
    I thank you for the opportunity to speak to you today 
regarding this particular bill and I look forward to any 
questions that you may have.
    [The prepared statement of Mr. Wilson appears on p. 35.]
    Mr. Hall. Thank you, Mr. Wilson.
    Mr. de Planque, you are now recognized.

                 STATEMENT OF IAN C. DE PLANQUE

    Mr. de Planque. Good afternoon, Mr. Chairman, and Members 
of the Committee. On behalf of the American Legion, I would 
like to thank you for the opportunity to testify today.
    VA has done several things to begin with the 
implementation, but we have several major concerns and I would 
like to state and emphasize two of those points--timeliness and 
implementation.
    Timeliness can be exemplified by the speed with which the 
VA proposes and implements the new regulation. Public Law 110-
389 provided a much needed alteration, for example, to the 
manner in which survivors are allowed to substitute as claimant 
in the case of veterans who pass away before final adjudication 
of their pending claims.
    To the credit of VA, they did publish an initial Fast 
Letter in March in response to this requirement and some of the 
claims affected have been adjudicated under the informal 
guidance of the Fast Letter.
    VA has already helped some families to receive the 
compensation they're entitled to, however, a Fast Letter is not 
a formal regulation change. The law established procedures to 
change regulations, which require the VA to publish a proposed 
regulation so the public may comment and raise questions or 
concerns. After such a proposed regulation has been proposed 
and the period for public comment has expired, final regulation 
can be considered.
    Talking recently with the expectation of proposed 
regulations showing up for the three new presumptive Agent 
Orange conditions, we are looking at the absolute earliest is 
sometime this summer to see a final regulation, so this is a 
lengthy process and we haven't even begun the process of the 
proposed regulation for this provision 16 months after the 
passage of the law. It has been a year almost since the Fast 
Letter. That is too much time.
    The implementation is the other concern that we have and 
one of the points that was brought up that this Public Law 
addressed was to look at the earning capacity and quality of 
life issues. That was stated again by Members of the Committee.
    VA has focused largely on the earning capacity and they 
stubbornly cling to focusing on that, however, there have been 
some signs that some of these studies, the Econsys Study, the 
Advisory Committee on Disability Compensation, some of those 
that are raising concerns about quality of life and whether it 
is adequately represented are starting to come to the 
forefront.
    I will reiterate that the very, very recent Mental Health 
Summit with the VA's attempt to reexamine the mental health 
rating criteria was an extremely great step forward on behalf 
of VA, that as a veterans service organization, we are excited 
to be participating in. When we think dialogue such as that is 
essential, is essential if we are going to see veterans 
properly compensated.
    The aspects of traditionally looking at things in terms of 
earning capacity are very, very difficult to measure in cases, 
particularly with mental health issues. And so seeing this as a 
first priority of getting fixed is a great step forward and we 
hope to have continued input on that.
    Other than that, we want to summarize to pay attention to 
those two main points, that the VA must be held to timeliness 
standards for the implementations of laws and that if all these 
studies are going to point out information and nothing is going 
to be acted on, then there is no purpose in having the studies. 
You can have all the studies in the world, but without action, 
they don't serve the veterans of America.
    We would like to thank you for giving us the opportunity to 
testify today and we will, of course, answer any question you 
or the Committee may have.
    [The prepared statement of Mr. de Planque appears on p. 
39.]
    Mr. Hall. Thank you, Mr. de Planque.
    Mr. Cohen, welcome, and you are recognized.

                STATEMENT OF RICHARD PAUL COHEN

    Mr. Cohen. Thank you, Mr. Chairman, and thank you to, the 
Committee, for allowing the National Organization of Veterans 
Advocates to testify here today.
    We have read in great detail, not only the VBIA 2008, but 
the Booz Allen Cycle Study as well. Although the Cycle Study 
seems to have some good recommendations, we are concerned about 
two problems with the VA, which are not addressed in the Cycle 
Study. The first one is that the VA misunderstands its mission, 
and the second one is that the VA does not function as an 
effective business.
    Looking at the mission first, NOVA agrees with Mr. Weidman 
and the VVA that the issue for the Veterans Benefits 
Administration, is that VBA's mission is veterans' lives and 
the sacrifices that were made by veterans. The mission is not 
about dealing with inventory. It is dealing with people's 
lives. The mission could be to determine how a claim should be 
granted, not to determine how to protect the public fisc.
    The mission should be how to validate the claims of a 
combat veteran, not how to deny them. The fact that the VA has 
missed the point about its mission can be seen by the example 
referenced by Mr. Lamborn, Ranking Member Lamborn, the 
importance of the survivor's benefits. That has not been 
implemented as my colleague over here mentioned. Yet it is very 
important to have those regulations. That is something that is 
top priority, yet the VA has not acted on it.
    Similarly as Mr. Wilson from the DAV mentioned, the 
proposed VCAA regs are inadequate and the VA has taken the 
opportunity, based on the Vasquez case, to propose to use a 
generic notice, rather than the case-specific notice. The fact 
pattern mentioned in the Federal Circuit's decision in Vasquez 
showed that both the claimants, Vasquez and Schultz, were given 
generic notices and did not know what they needed to introduce 
in order to get benefits for increased disabilities.
    So the VA has decided to go to the least possible help they 
can give veterans rather than the most. In addition, I will 
point to the failure to issue permanent regs on the Agent 
Orange presumptions for B-Cell leukemia, Parkinson's disease 
and ischemic heart disease.
    People are dying of those conditions today, yet no regs 
have been issued. If veterans go for priority health care and 
they are not service-connected for any other condition, they 
are not going to get health care. This needs to be taken care 
of right away.
    Our members know of instances where combat veterans are 
being denied PTSD benefits because they are told that they lack 
a stressor, and that their Purple Heart is insufficient. This 
shows a lack of understanding of the VA's mission.
    The VA is also an inefficient business. As recognized by 
yourself, Chairman Hall, the amount of paper that the VA needs 
to track mandates that there be an electronic system. The VA 
seems to be unable to figure out how to do this, yet NOVA 
members every day scan their files with optical character 
recognition programs and manage their cases with case 
management programs that are available and are out there.
    The VA does not have reliable data and doesn't know how to 
get it. The processing times are not adequately tracked. The 
backlogs, as recognized by Representative Halvorson, are 
important and they have not been tracked adequately. And 
accuracy is totally a myth in the VA. They refuse to do what 
they need to do, that is, track a claim from beginning to end 
and find out if they got it right. They should not say that a 
claim is right based on the Systemic Technical Accuracy Review 
(STAR) system because internally they think it is right.
    That would help with training, too. If they would take 
these claims and give them to raters and say, ``This is what 
you did, but this is what the court said you should have 
done.'' And I think that the tracking of accuracy would solve a 
number of their problems if they did it correctly.
    I want to thank you for the opportunity to testify and I'm 
prepared to answer your questions.
    [The prepared statement of Mr. Cohen appears on p. 43.]
    Mr. Hall. Thank you, Mr. Cohen.
    Mr. McCray, you are now recognized.

                    STATEMENT OF JOHN McCRAY

    Mr. McCray. Chairman Hall and Members of the Subcommittee, 
thank you for the opportunity to testify today on behalf of 
AFGE and to share my experiences as a rating specialist with 
the Los Angeles Regional Office.
    Since coming to the VA 9 years ago, I have worked in every 
aspect of the claims processing, public contact, claims 
development, adjudication, the rating board and as acting team 
supervisor. The one thing I am certain of is the respect and 
commitment my coworkers have for veterans. Everyone is 
extremely aware of the duty we owe to our clients and the 
responsibility we have to them and their families.
    However, the individual obstacles, flaws and idiosyncrasies 
of our job often impede us from fulfilling that duty. That is 
why AFGE urges this Subcommittee to expedite implementation of 
Public Law 110-389. This critical law has the potential to 
significantly reduce barriers to accurate efficient claims 
processing if the VA implements urgently needed changes in 
training, supervisory skills certification and systems for 
measuring and managing case production.
    The VA is one of the most data-saturated work environments 
I have ever encountered. To successfully perform your job, you 
must have a thorough knowledge of the Code of Federal 
Regulations, the VA Manual of Operations, Medical Terminology 
and Ideology, Board of Veterans' Appeals decisions, Department 
of Defense procedures, current events, military history and 
veterans legal rights.
    At the same time you must have the agility of mind to 
immediately learn and adapt to a constantly changing set of 
laws, regulations, procedures, technology, duties and 
priorities, all while maintaining the professionalism and 
compassion that our clients deserve and expect.
    Productive adjudicators and rating specialists do not 
happen overnight. You cannot simply hire more bodies, give them 
a computer and a disc and reduce the backlog.
    It takes time and commitment from both the employee and 
management. Employees must apply themselves to learning the 
written materials and commit the time it takes to effectively 
learn the job.
    From my experience, it takes 2 years of on-the-job training 
to begin making a significant contribution and production. I 
have seen people with master's degrees and law degrees, people 
who have succeeded in other careers, medical professionals and 
ex-military personnel who have thrown in the towel in 
frustration because they did not receive the proper training 
and mentoring to learn this complex job.
    Again, management must commit the time it takes to develop 
a good employee. After new employee classroom training, which 
is effective because it is developed by VA's Central Office 
(VACO), employees fail to receive consistent, sufficient 
quality on-the-job training. Too often, our own management 
fails to provide adequate training time or clear coherent 
learning materials that convey the correct way of processing 
claims and making decisions.
    Therefore, AFGE urges VA to make all VBA training programs 
standardized throughout the country and sustained throughout a 
person's career to keep everyone on track and eliminate 
variation among regional offices.
    Employees must be allowed time to develop the VA's unique 
job skills without fear of demotion or dismissal for not making 
daily production standards. As for the standards, they must 
accurately reflect everything that we do in our jobs, not just 
the number of cases that are produced.
    If people are rushing to make points at the VA, it is not 
for wanted promotion. It is for fear of losing their jobs. I 
feel we do a disservice to American veterans if we reduce their 
needs to a simple tally of numbers that are calculated at the 
end of the day.
    By failing to credit all aspects of our job, we discourage 
employees from taking the time necessary to provide 
compassionate thorough service for our veterans. I cannot 
emphasize enough the anxiety employees feel by attempting to 
meet minimum production standards.
    Unable to keep up with the current standards, employees 
with years of valuable VA experience are forced into lower 
responsibility jobs, and in some cases, forced to retire. By 
allowing these seasoned employees to fail, VA risks losing 
years of accumulated knowledge and expertise that could best be 
used to mentor the thousands of new hires at VBA.
    There is no silver bullet to claims processing. We try ways 
of tracking the files, arranging them on the shelves, color 
coding them and scanning them with the computer. Ultimately a 
human being still has to open the file, analyze the evidence 
and come to a decision and there are so many who are essential 
to the VBA claims process, from Clerks to veteran service 
representatives (VSRs), to rating specialists and Decision 
Review Officers. If any one of these people is poorly trained 
or so filled without anxiety about losing his or her job due to 
production standards that they cannot even perform their 
duties, the entire process is delayed indefinitely.
    In short, we need less finger pointing and more training 
and mentoring by knowledgeable supervisors with proven teaching 
skills. We also need revised work credit and measurement 
systems that value judgment and action over fear and avoidance 
of errors. Only then will we truly be able to fulfill our duty 
to America's veterans. Thank you.
    [The prepared statement of Mr. McCray appears on p. 49.]
    Mr. Hall. Thank you, Mr. McCray.
    I will start off the question and answer session by asking 
you, since you are working in an RO, if you could summarize any 
changes that you have seen in the approach or the attitude of 
the VA since the change at the top, the change in 
administration and the new Secretary?
    Mr. McCray. I believe that we have actually--there are a 
lot more cases that are being labeled as priority cases. For 
example, the seriously injured or the Operation Iraqi Freedom/
Operation Enduring Freedom (OIF/OEF). However, without coming 
in and giving more resources to the cases that are not 
priorities, you are essentially just moving your manpower into 
a different field and changing which cases are rated first.
    So I will say that there has been a response, different 
priorities, but yet, I feel like we need to refill the 
resources behind those priorities.
    Mr. Hall. What would AFGE recommend changing so that there 
could be a culture change and a stigma change within the VBA?
    Mr. McCray. I honestly believe that everyone that works 
there is trying to do the best for veterans. But you know, we 
have been given this enormous convoluted system that has been 
kind of cobbled together over the last 90 years. And I kind of 
always describe the VA as being, it is like an old car that, 
you know, you have to turn on the blinker and then stick in the 
cigarette lighter and jiggle the steering wheel, and even still 
it only goes 10 miles an hour.
    And you know, we get new people in and we try to teach 
them, well, you have to turn on the, you know, jiggle the 
steering wheel and stick in the cigarette lighter. And it is 
still, no matter what you do, there is only so much that you 
can get out of the machine the way it is now.
    So I think to--ultimately you have to really train the 
people. You have to encourage the people. You have to encourage 
them to be proactive. You have to encourage your employees to 
make decisions and to have confidence to make decisions because 
if people are afraid to make decisions or step out of the box 
or afraid to stick their heads up, you will never have anything 
accomplished at the VA.
    Mr. Hall. And one last thing, Mr. McCray. You talk about 
the lack of national uniformity in training programs. Do you 
feel that if there was a national standard, perhaps a manual 
that was given to all of our directors in every region, that 
this would eliminate some of the deficiencies and lack of 
uniformity training?
    Mr. McCray. I think it would. A couple of weeks ago the 
Central Office did come up with a Fast Letter that indicated 
that they were going to start standardizing some of the 
continued training, which I think is a step in the right 
direction. I am still waiting to see how it is implemented 
before I can, you know, actually comment on it personally.
    But, you know, it is kind of like a judge across the 
country. We all have the same laws, but each judge will see, 
will interpret it subtly himself, and yet we ask every rating 
specialist or every VSR to have the same laws and then come up 
with exactly the same decision every time, and it is just 
impossible, I think.
    So the clearer you can make it, as far as the procedures, 
the clearer you can make it as far as the criteria and trying 
to standardize it throughout, yeah, that would greatly help the 
job that we do.
    Mr. Hall. Thank you.
    Mr. de Planque, in your testimony you refer to flaws in the 
VA's work credit system. Could you elaborate on this point in 
terms of what you see as the major flaws and how you propose VA 
could improve upon the Work Credit System?
    Mr. de Planque. Well, the Work Credit System, and I believe 
this was alluded to by my colleague over here, counts 
production solely based on numbers. It does not take into any 
account whether or not the work is done correctly or not.
    And as you stated very clearly, there is a tremendous 
pressure that is felt by the workers. I go out as part of 
Regional Office reviews that the American Legion conducts on 
various ROs. I talk to employees within the system. These are 
people who believe they are going to work to help veterans. 
They want to help veterans. These are good employees that they 
have in there, but they feel tremendous pressure on the numbers 
that they have to turn out, and the ability to properly do 
their job within the time constraints allotted.
    I had a rater from one of the offices who was a veteran 
himself from Afghanistan and we discussed Afghanistan for a 
while and he said, I have a case, it is this thick, I have 2 
hours to get through that case, how do I give that veteran 
justice. And you know, to hear that, that is heartrending to 
hear from them. They want to be given the time to do the job 
right and so that if you look at a system that is only putting 
credit on the numbers and not whether or not they are done 
correctly, we are never going to make any progress that way.
    So then you have to look at counting it in a different sort 
of fashion. The American Legion has a resolution that it 
supported for a long time, only counting a claim as done when 
it has been properly and finally adjudicated. That obviously 
would be a major shock to the system and different in any way 
that it has been done before.
    But there are other ideas. We don't necessarily endorse the 
ideas but we have heard ideas recently mentioned where you 
could look at it like a checkbook. When you do something right, 
you get a credit to the account of an RO or the account of 
something. And when you are dinged for doing things improperly, 
when they are remanded over things that could easily have been 
corrected, then a debit would go against it and you could look 
at whether an office was operating in the black or in the red 
on whether or they are properly doing the claims.
    All of the sudden you look at it that way, then you are 
measuring your cases by how many you are getting done right and 
you are going to give people the time they need to get it done 
right. If it takes you 2 hours to do a claim wrong and you have 
to do it three times because it keeps getting remanded and 3 
hours to do it right, that is 6 hours to do a case or 3 hours 
to do it right. Do it right the first time, and that is what we 
are advocating.
    Mr. Hall. Thank you very much.
    Mr. Lamborn, you are now recognized.
    Mr. Lamborn. Thank you, Mr. Chairman. And to some extent, 
the following question you all have been addressing this, that 
sort of to clarify for me and condense what you are saying, 
what would be your top recommendation for the VA? And I would 
like each one of you to take a stab at this, on how they could 
improve the quality of their decisions. And I know, you have 
just addressed that--but what would be, and this might vary a 
little bit--what would be your top recommendation? And we can 
start with you, Mr. Weidman and just go down the table.
    Mr. Weidman. No guts, no glory.
    They can only do one thing. It is the organization of the 
C-file itself, Mr. Lamborn. You literally, I mean that was no 
exaggeration by Mr. McCray, they have them thicker than 12, 18, 
20 inches thick. And to just find the salient documents can 
burn up a good part of that 2-hour time frame that we are 
talking about.
    To have a template in a set order, which you put things 
into a C-file, so if you go to my C-file to Brian Lawrence's C-
file, to John Wilson's C-file, you will find the same documents 
in the same location within the C file and you start there and 
then, as you automate it, if you don't set that business 
process, get that straightened out, even using OCR/ICR scanning 
techniques, you get people used to a doing business process in 
a set way. Then you can concentrate on what those documents 
say, as opposed to trying to find a document in the first 
place.
    Mr. Wilson. It is a good question, Mr. Lamborn, and we are 
talking about that among ourselves as veterans service 
organizations. We had a meeting off of campus, if you will, to 
talk about how we could best advise VA to move more effectively 
towards a better way of providing a better product. And one of 
those tough points we believe is that VA take an approach of 
quality first in their work and all the other issues will fall 
into place and the timeliness and appeals issues will be 
resolved substantially.
    VBA employees need a robust digital electronic system so 
they can develop claims. They need to be able to retrieve data 
electronically from the National Archives, the military 
services, et cetera. That is essential.
    This development phase is the most time-consuming phase in 
the claims process. So efforts need to be made in the 
development area first to get your biggest bang for the buck.
    So a quality initiative focusing on a digitized development 
process and a revised the Work Credit System is essential. To 
get all these development tools off the rater's desk, out of 
binders, books and archaic data bases with little 
interoperability and into their laptop computers would help 
immensely.
    Ten years ago while on active duty, we used Lean Six Sigma. 
To improve the quality of certain programs. We found it very 
effective. We are heartened to see VA finds it to be a viable 
program to help them with their processes as well, as is being 
done down in Little Rock.
    Mr. Lamborn. Thank you.
    Mr. Wilson. Yes, sir.
    Mr. de Planque. One of the things that I think, in terms of 
looking for consistency, is to achieve consistency with the 
training and to centralize and standardize the training. You 
mentioned there is an increase in hours from 80 to 85 hours, 
but it has also got to be the right training. And to use 
another example from an RO visit, we went into a particular 
Regional Office that had been having a lot of trouble rating 
PTSD claims, and we brought this up to them and we said, we 
have seen this ahead of time.
    And they said, well, we just delivered a training on this.
    And we said, oh, do you have it?
    And they brought the PowerPoint out that they received from 
Central Office and delivered to their employees. We went 
through it. There are three errors in the PowerPoint that were 
factually incorrect on how to interpret the regulations.
    To Central Office's credit, we brought it up to them and 
they immediately changed it and distributed the information out 
to the Regional Offices. They corrected it very quickly when 
they were made aware it, but the point it that was bad training 
that was out there and so they need to be getting the right 
training. It needs to be across the board and they need to make 
sure that that is also a priority.
    And we understand that they are under a lot of pressure to 
get cases done, too. The service organizations and Congress are 
breathing down VA's necks to take care of the backlog, but 
getting the people trained to do it right will help them do the 
claims faster and get them right.
    Mr. Lamborn. Thank you.
    Mr. Cohen. I would likewise agree that the accuracy is 
crucial and that is dependent on the training. And I see the 
training as needing to be case specific so that someone who 
works on a claim should know how what they did affects the end 
product and whether they did the right thing, and they can only 
know that if they can track the claim through the BVA and 
through the Court and back down again and then, in addition to 
that, once they know the right thing to do, they need 
standardized materials. This was mentioned by the Booz Allen 
Cycle Study, that some people have some great checklists that 
they have put together and materials that they use, but others 
don't. That needs to be standardized so everyone has a 
checklist that helps them deal with a particular type of claim.
    Then, the final thing is, they need allotted time to be 
able to do it right because again, as was noted before, it 
saves time and cuts backlog to do it right the first time, but 
they can't do that if the time limits prohibit them from 
adequately developing or adequately reviewing the file.
    Mr. Lamborn. Thank you, and we have run out of time, but 
can you very quickly----
    Mr. McCray. Yeah, I would say, also, just consistent and 
ongoing, on-the-job training because, you know, this isn't like 
just moving boxes somewhere, like, we aren't saying, well, we 
have a million boxes that we have to move. I mean, each one of 
these cases is unique and individual in its own right. It is a 
person's life.
    And as a rating specialist or as a VSR, you have to observe 
that. And you know, you get the training that kind of tells you 
how to deal with cases like that, but every case is unique, and 
so you need training and mentoring that goes on to kind of 
teach people who to think and how to judge cases rather than 
just process them.
    Mr. Lamborn. Okay. I thank each one of you.
    Mr. Hall. Mr. Miller.
    Mr. Miller. Mr. Weidman, in your testimony, you suggested a 
common training platform for VA, VSOs, State, Federal or local 
government employees. Can you talk a little bit about how you 
would envision that being structured?
    Mr. Weidman. Literally, meet, call all the players together 
from the National Association of State Directors of Veterans 
Affairs to the county veterans service officers (CVSO) to the 
veterans service organizations with VA and come up with a set 
piece.
    Training manuals are great, but today they should be done 
in webinars so that people can go back and back again until 
they get whatever section it is of the training. And you can 
standardize it across the country that way much more easily as 
well. With standardized exams based on competency that everyone 
has to pass, including attorneys by the way--just because 
somebody's an attorney doesn't mean they know Veterans' law at 
all.
    So if you do that, I mean the astonishing thing is, we get 
so many complicated claims right as we do the first time 
through, given the lack of expertise, if you will, that 
impinges at so many points in that process.
    So it would be, instead of doing it in the legalistic way, 
you sit down and negotiate, if you will, the VSOs, NOVA and 
with VA, and come up with a common training program and with 
tests that make sense.
    Incidentally, on that training, somebody mentioned it here 
and I will say it more specifically. VA's training is all too 
often showing slides and exposing people to training as opposed 
to doing case studies. Case studies, people actually have to do 
and then they learn what it is, what the impact is of doing 
things right, the right way is on the end product, and a lot of 
that can be worked out.
    I can't tell you how heartened many of us were by last week 
in that session and that it was a different attitude that we 
hadn't seen before. All that was missing from that was we 
should have had Voc Rehab and claims specialists like Mr. 
McCray there, and next time I think they will get it, but the 
point is, the attitude that we can figure this out together. 
And once we have that attitude, we can, in fact, collegially 
get the darn thing done.
    Mr. Miller. Anybody else got anything they would like to 
add to that?
    Mr. de Planque. In terms of the platform and getting 
everyone together on the same page, whether you are a service 
officer or whether you are rating a claim, you are doing the 
same thing. You are going through a case file start to finish, 
trying to put together a picture of the veteran's life and why 
they are entitled to the benefits.
    Everybody's doing the same job and if we are all working 
together on the same page, it helps a lot. And I just also 
wanted to reiterate that when we do get together with VA, 
whether it is for a mental conference or when VA's compensation 
and pension holds quarterly meetings with the service 
organizations, great things do come out of those. A lot of 
improvements that have been made towards recognizing Brownwater 
Navy boats came out of the meetings with quarterlies and the 
VSOs working with VA and VA doing things of its own initiative 
by listening to the stakeholders in it.
    So when we do work together, good things happen for 
veterans and that is an essential component that needs to go 
forward and they seem willing to do.
    Mr. Miller. Thank you. I yield back.
    Mr. Hall. Thank you, Mr. Miller. I'll just recognize myself 
for a couple more questions before we excuse you.
    First of all, Mr. Cohen, I just wanted to ask you--there 
has been mention of the Vasquez-Flores v. Peake case today, and 
I was wondering if you could speculate as to what effects that 
will have on the aims of the Veterans' Benefits Improvement Act 
of 2008. Are there any other rulings because of Vasquez that 
have analyzed other provisions of this law that you are aware 
of, and if so, what has been the impact of these rulings?
    Mr. Cohen. Well, the Vasquez case is very detrimental to 
the whole idea of the Veterans' Claims Assistance Act providing 
notice to veterans because the decision of the Federal Circuit 
overturned a Veterans' Court decision requiring case-specific 
notice in a situation where a veteran applied for increased 
benefits.
    And, as I said, in the fact pattern of the case, it was 
very clear that the veterans who complained about not getting 
adequate notice, in fact, did not get notice that would tell 
them what they needed to do to get increased ratings.
    So if the VA proceeds with their proposed regulation saying 
that only generic notices would be given, they are going to be 
doing a great disservice to VBIA 2008 and to the veterans that 
legislation sought to help. These generic notices, rather than 
assist the veteran, just tie up the system because they consume 
time to get them out and get a reply back.
    But since veterans can't understand them and aren't 
benefited from them, the question is why even submit a generic 
notice? That just consumes time.
    Mr. Hall. Mr. Wilson, do you have a comment on that? Or 
perhaps what this Committee or Subcommittee might do or 
Congress might do to clear up the situation that is caused by 
Vasquez?
    Mr. Wilson. It was interesting to read in the Federal 
Register what the VA's contention was. It would be useful, if 
Congress could articulate its wishes that, in fact, the VA must 
be specific, not generic, in its notices to veterans.
    It was more than just a whim, on a particular sunny day 
that it would be a thing for the VA to do for veterans if they 
wish was Congressional intent. We believe it is absolutely 
essential that veterans be well informed and, therefore, 
request Congress mandate, in fact that VA carry out the wishes 
of Congress and make these notices specific, not generic.
    Mr. Hall. Thank you. Back to Mr. Cohen. I just wanted to 
refer to your testimony that there has been no action by the VA 
on substitution by survivor's regulations as required by the 
Act. In fact, you assert that the VA is attempting to subvert 
the intention of this provision of the Act by trying to 
administer a regulation, 38 CFR 20.1302, which requires an 
appeal to be dismissed upon the death of the claimant.
    The intention of the Act, as we all know, was to allow the 
survivor to step into the veteran's shoes and continue to the 
completion of the claim.
    What do you believe are the legal consequence of this 
action by the VA and what steps you believe we should take here 
in Congress to address this action?
    Mr. Cohen. Well, I think part of the oversight of Congress 
is to require the VA to explain why this particular regulation 
has not issued. This is not something that is complex, like 
putting into place, perhaps, a new presumption. This is 
relatively a straight forward procedural step that could be 
done and needs to be done immediately and issuing a Fast Letter 
is not a substitute for regulation.
    There is no way of understanding the failure to issue this 
regulation, except to understand that this is not a priority 
with the VA and then wonder in view of the fact that Congress 
said it is a priority and service organizations said it is a 
priority and veterans say it is a priority, why doesn't the VA 
see it as a priority?
    Mr. Hall. Thank you. I can only speculate that there are so 
many priorities that we all are working to resolve that perhaps 
it has fallen down the list further than it should have, but we 
hope to get some answers to that.
    Thank you all for your questions. As usual, we will have 5 
legislative days to extend or revise your remarks; Mr. de 
Planque, I believe you asked about that.
    Thank you very much, again, for your work on behalf of our 
veterans. Thanks for being here today. This panel is excused.
    We will ask our second panel to join us. Mr. Bradley G. 
Mayes, Director of Compensation and Pension Service, Veterans 
Benefits Administration of the U.S. Department of Veterans 
Affairs. Mr. Mayes is accompanied by Mr. James P. Hanley, 
Director of the Office of Survivors Assistance, Veterans 
Benefits Administration, and Mr. Richard J. Hipolit the 
Assistant General Counsel, Office of the General Counsel, U.S. 
Department of Veterans Affairs, and Mr. Stephen W. Warren, 
Principal Deputy Assistant Secretary, Office of Information and 
Technology (OI&T) of the U.S. Department of Veterans Affairs.
    Welcome to all of you, it is good to see you again. Mr. 
Mayes, Mr. Hipolit have been here many times, and it is much 
appreciated by this Subcommittee. You know the routine. Your 
written testimony is in the record. And Mr. Mayes, you are now 
recognized.

   STATEMENT OF BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND 
    PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY JAMES P. HANLEY, 
 DIRECTOR, OFFICE OF SURVIVORS ASSISTANCE, U.S. DEPARTMENT OF 
    VETERANS AFFAIRS; RICHARD J. HIPOLIT, ASSISTANT GENERAL 
COUNSEL, OFFICE OF GENERAL COUNSEL, U.S. DEPARTMENT OF VETERANS 
  AFFAIRS; AND STEPHEN W. WARREN, PRINCIPAL DEPUTY ASSISTANT 
SECRETARY FOR INFORMATION AND TECHNOLOGY, OFFICE OF INFORMATION 
      AND TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Mayes. Thank you, Mr. Chairman. Chairman Hall, Mr. 
Miller, thank you for providing me with this opportunity to 
address the progress made by the Department of Veterans Affairs 
towards implementing the provisions of Public Law 110-389, the 
Veterans' Benefits Improvement Act of 2008.
    As you noted, I am accompanied by Dick Hipolit from the 
Office of General Counsel, Steph Warren from the Office of 
Information and Technology, and Jim Hanley, the Director of 
VA's newly created Office of Survivors Assistance.
    Both VA and the Congress are acutely aware of the enormous 
challenges we face on improving and expediting our claims 
process. We are grateful for your input and for the opportunity 
to evaluate pilot programs to see if they help us meet our end 
goal of serving the veterans who have served us.
    Given the breath and complexity of issues covered by this 
legislation and the amount of time allotted for my oral 
remarks, I will simply summarize the progress we have made in 
implementing the provisions of this legislation. I will also 
limit my remarks to progress related to those sections of the 
legislation affecting VA's Disability Compensation and Pension 
Program. A more detailed description of our progress is 
included in my written statement for the record.
    Sections 101, 106, and 212 of the Act directed VA to define 
the contents of the up-front claim notice to add osteoporosis 
as a presumptive disease for former prisoners of war and to 
provide for substitution upon the death of a claimant in that 
order. All of these provisions of the law do require VA to 
promulgate new regulations.
    I am pleased to report that VA promulgated a final rule 
adding osteoporosis as a new presumptive disease in August 2009 
and a proposed rule addressing VA's notice requirements was 
published in December 2009.
    While we have not yet published a rule regarding 
substitution as the previous panel noted, interim processing 
guidance was provided to VA claims processors in a compensation 
and pension service fast letter in March 2009.
    We are nearing completion of a proposed regulation 
implementing in greater detail this section of the law which 
will then be published in the Federal Register for notice and 
comment. The delay in publishing a substitution rule is due for 
the complexity of the issues surrounding execution of this 
mandate.
    Sections 104, 213, 224, 226, and 228 all required the 
Secretary to conduct studies and/or report to Congress on 
issues related to variance and compensation payments, a 
previous study completed by Economic Systems, Inc. regarding 
earnings loss, quality of life, and transition, VA's quality 
assurance program, performance measures and improving access to 
medical advise for VA claims processing personnel.
    In order to comply with these requirements, VA initiated a 
total of seven studies, with three of those studies related to 
Section 104 of the legislation alone. VA contracted with the 
Institute for Defense Analyses (IDA) and the Center for Naval 
Analyses to assist with four of the seven studies.
    The contracts associated with Sections 104, 224, and 226 
total $3.6 million. Either final or interim reports have been 
submitted to Congress on three of the seven studies. I regret, 
sir, that two of the studies related to Section 104 and one 
study related to Section 226 are past due; however, they have 
been completed, and they are in the concurrence process.
    The report related to Section 224 is not yet due; however, 
the Institute for Defense Analyses is well under way with their 
review of VBA's National Quality Assurance Program and on track 
to complete their review in 2011.
    I am pleased to report that we are in compliance with 
Section 214 of the law with the creation of the Federal 
Advisory Committee on Disability Compensation chaired by 
retired General Terry Scott. My staff is providing support for 
this Committee, which is conducting monthly meetings on 
important issues related to the disability compensation 
program.
    Section 221 required VA to implement two pilot programs to 
test the effectiveness of providing a claim checklist to 
veterans at the start of the claims process and of allowing 
veterans or their accredited representatives to certify that 
their claim is fully developed. Both of these pilot programs 
were stood up in December 2008 with contract support provided 
for the Center for Naval Analyses. The two supporting contracts 
total $1.5 million.
    Preliminary findings suggest that there may be some 
improvement in timeliness as a result of the submission of a 
fully developed claim. An interim report on both of these pilot 
programs has been provided to Congress.
    As required by Section 222, the Office of Survivors 
Assistance was created in December 2008 and fully staffed by 
February 2009. Mr. Hanley is here with me today to answer any 
questions you may have regarding the progress his office has 
made in advancing survivor issues.
    Section 225 required VA to implement skill certification 
testing for all employees and managers responsible for 
processing claims for compensation and pension benefits. VA has 
deployed skill certification tests for the supervisory veteran 
service representative position and is in the process of 
completing the development of a test for our decision review 
officers. We already have tests in place for the other decision 
makers.
    And finally, Steph Warren is accompanying me here today to 
answer any questions you may have regarding the review of 
information technology in the Veterans Benefits Administration 
as required by Section 227.
    Mr. Chairman, this concludes my oral remarks, and I would 
be glad to answer any questions you may have regarding 
implementation of this quite comprehensive piece of 
legislation.
    [The prepared statement of Mr. Mayes appears on p. 52.]
    Mr. Hall. Thank you, Mr. Mayes, I appreciate your work, and 
on behalf of our veterans, and your testimony.
    I will just, if it is okay to--since they came here to be 
able to answer questions--ask Mr. Hanley and Mr. Warren maybe 
to give us a brief update as to how they see their offices 
progressing.
    Mr. Hanley, how would you assess the progress so far of the 
Survivors Assistance Office?
    Mr. Hanley. Good afternoon, Mr. Hall. I would say we have 
made quite a bit of progress. The office stood up in February. 
We are about 80 percent manned. We have five authorizations, we 
have four people on board. I came in late June. The office has 
been very successful in really becoming the advisor to the 
Secretary. We work for the Office of the Secretary, so we are 
at weekly meetings with the Secretary.
    The biggest issue that I see is really awareness for 
survivors. We get out, we do a lot with the veteran service 
organizations such as the Gold Star Wives, Tragedy Assistance 
Program and the Military Officers Association of America.
    The biggest issue outside of Survivor Benefits Plan/
Dependency and Indemnity Compensation (SBP/DIC) offset is just 
awareness. A lot of them have a--whether real or imagined 
perception that they are an afterthought to the VA as far as 
survivors go. So my job, and the job of my office, really is to 
put the umbrella across both VBA and VHA and the National 
Cemetery Administration (NCA) to try and get the attention that 
the survivors are as important as any veteran out there.
    So I think we have made some progress. We have done some 
things. We have a Web site up. We deal a lot with survivors 
individually now, actual survivors where we get e-mails and 
calls. We don't get a lot of the real hard claim stuff, we get 
a lot of people out there that are really concerned about my 
dad passed away, he was a World War II veteran, he is a Vietnam 
vet, what is in it for my mom? She has problems. That is the 
kind of thing that we do that we refer them on. We have a lot 
of those calls in the last 2 months since we have been up on 
the Web site.
    Mr. Hall. Thank you. And Mr. Warren, where do we stand now 
on the path to electronic rating, on the path to digitizing as 
much of our veterans' community's records as possible with all 
these monstrous, humongous tasks in front of you?
    Mr. Warren. If I could break the response into two 
sections, sir.
    The first one was to section 227 which requires a review 
and a report. That review is due in the April/May time frame. 
That is in draft and starting the concurrence process. So our 
expectation is that we will make it up as required, sir.
    To your broader question, where are we now? And I am drawn 
to the hearing we had 2 years ago about 3 days where we talked 
about the use of artificial intelligence (AI) in the benefits 
process, and I think we have come a long way in those 2 years.
    One of the things that Secretary Shinseki has laid out for 
us is his vision of the virtual lifetime electronic record 
(VLER), that broader view of how do we reach the point where we 
reach out to the veteran, our client, and say what you are 
eligible for. That broad vision. How do we get there? The 
efforts under way are to move us towards that.
    In the testimony there was a discussion about the Veteran 
Relationship Management (VRM). How do we come up with a single 
door through which the veteran comes to us? The pilot program 
is under way right now. Expect some good movement in fiscal 
year 2010 and 2011 to start reducing down the number of 
portals. The e-benefits portal joint with U.S. Department of 
Defense (DoD) is up and running and there are services provided 
through that both on the DoD side and the VA side so the 
veteran can come to one place. Also collapsing down call 
centers, call numbers, and the ability to pull up information 
when the veteran is on the phone. Who they are, where things 
are in process.
    In terms of pulling all the information in, the idea of 
coming up with that single virtual lifetime electronic record. 
A lot of progress on the medical side. We announced the 
successful pilot with Kaiser Permanente in San Diego where we 
exchanged information with a third-party provider. There was a 
lot of information for veterans care that was sitting outside 
VA and DoD. So we are using the Nationwide Health Information 
Network (NHIN) connector as a way of bringing that information 
in so it is available to us.
    The next pilot announced is at Hampton, where we are not 
only connecting with VA/DoD, but a medical provider network. 
How do we bring all of that information in as well? So grab 
that third-party information in terms of care.
    Business process changes. It was referred to by the 
previous panel as well in the testimony. Several pilots under 
way looking at how do we change the processes we have so we 
don't pave the cow paths, if you will, that we talked about? 
Business process change before automation.
    The virtual regional office standing up in Baltimore. How 
do we take that professional who does the rating and align them 
with the business process redesign folks and the IT folks and 
have them go through the process and learn why we did it that 
way, how can we change it, how can we apply the technologies to 
it?
    And then VBMS, the Veterans Benefits Management System, how 
do we then take what we learn in the pilots, the business 
process pilots, the technology pilots, and then start 
automating the tools that we have so we can take that unique 
case and do it quicker and meet some of the goals that we have 
met?
    So again, very comprehensive summary coverage. Glad to go 
into any other depths for further questions, sir.
    Mr. Hall. Thank you, Mr. Warren. And I have heard from 
Secretary Shinseki about the virtual VA pilot, the IT pilot in 
Providence, I believe it is, and the other pilots that are 
working to reduce the foot high pile of paper to an essential 
inch or half inch deep pile of paper so that the most highly 
qualified, most experienced claims processors or raters are 
able to work on the distilled essential stuff. And I understand 
the rationale separating those pilots out, because as our 
computer folks have also said, garbage in, garbage out, you 
don't want to have an IT program that you develop and then you 
feed this whole foot high stack of documents into it when maybe 
a lot of them are not relevant to the question at hand.
    But I am over my time at this point, and ask Mr. Miller if 
he has any questions.
    Mr. Miller. Thank you, Mr. Chairman. Let us talk a little 
bit about the ability for survivors to substitute themselves 
for a veteran, the claims process when they die. Could you 
describe the status of implementing the provision and what 
challenges have prevented VBA from implementing this sooner?
    Mr. Mayes. Yes, sir, Mr. Miller. First of all, let me say 
that in the guidance that we put out to our field claims 
processing personnel notifying them of the provisions of Public 
Law 110-389, we highlighted that section and informed those 
personnel that they needed to allow survivors to substitute in 
for the claimant as though the claimant was continuing to 
prosecute the claim. So we did put them on notice to do that, 
and I am aware that they have been doing that, because we have 
received some questions in the Compensation and Pension Service 
regarding the execution of that.
    It seems pretty simple on its face, but there are a lot of 
complexities, and I am going to turn that over to Dick Hipolit 
from our Office of General Counsel (OGC). I would just say that 
we have met with both OGC, our Office of General Counsel, and 
the Board of Veterans' Appeals on a number of occasions trying 
to work our way through these issues that we are trying to 
solve.
    Mr. Hipolit. Yeah, I would just like to say that first of 
all that we haven't set this aside, we have been actively 
working this for some time. It has proved to be a fairly 
frustrating process for myself and my attorneys who are 
involved and for the program officials as well that the bill 
was fairly general in nature and there wasn't a lot of 
legislative history on it. When we started to dig into it for 
the purpose of doing regulations we found a number of very 
difficult legal and policy issues that were raised by the 
legislation, and we want to try to come out with something that 
is consistent with the law and with Congress' intention and 
that is fair to claimants.
    A few of the issues that I might mention. One of the 
perplexing ones is that the way the legislation is set up to 
rely on the accrued benefits classes of persons who could be 
substituted. There could be more than one person within a class 
who is eligible to be substituted. For example, if you were 
looking at the veteran's children as possible substitution 
parties there might be more than one that would be substituted; 
however, how would we pick between the two? They may have 
actually adverse ideas about how the claim should be 
prosecuted, and we have to have a process that would be fair to 
everyone who is interested.
    There is a question what if the first priority substitution 
claimant decided not to prosecute the claim or wanted to--or 
waive their right to prosecute the claim, could a lower 
priority person then come in and be substituted? Would 
additional evidence be allowed to be submitted? There are a 
couple of references in the law to the accrued benefit status. 
Does that suggest that we would only look at evidence that was 
on file at the date of the veteran's death or could new 
evidence be brought in? How would somebody go about requesting 
to be substituted? Would we have to give VCA notice at the 
time? What if a case was at the Board of Veterans' Appeals when 
the veteran died and it was pending at the board? The 
substitution wouldn't be automatic, we would have to make a 
determination whether that person requesting substitution was 
eligible and was a correct party.
    So in that question could that decision be made at the 
board or would it have to be remanded to the agency of original 
jurisdiction so then the person could have appeal rights if 
they didn't agree with our decision?
    So there are a number of other issues as well. There are a 
number of really tricky issues that we came across when we did 
this in advance, and it is taking a long time to get these 
issues resolved and we are frustrated, we want to keep it 
moving. I think we are close now to being able to move forward 
with this.
    Mr. Hall. Thank you, Mr. Miller. And Mr. Hipolit, I am just 
curious. I am not an attorney, but Section 5121 enumerates in 
what appears to a layman's eye any way in a fairly clear 
fashion--who the benefits due and unpaid shall accrue upon the 
death of such individual starting with the veteran's spouse, 
the veteran's children in equal shares, the veteran's dependent 
parents in equal shares upon death of a surviving spouse or 
remarried surviving spouse to the children of the deceased 
veteran, et cetera, and it goes on to say no part of any 
accrued benefit shall be used to reimburse any political 
subdivision of the United States per expenses, and applications 
for accrued benefits must be filed within 1 year after the date 
of death.
    Excuse me for not understanding the difficulty or the 
length of time that it would take to draw up regulation from 
this. Maybe you would illuminate for me why.
    Mr. Hipolit. Okay, if I could just----
    Mr. Hall. Sure.
    Mr. Hipolit [continuing]. Speaking of those classes that 
you mentioned, I would like to reiterate that within those 
classes there are multiple--some of those classes have multiple 
people, like the dependent parents, for example, or the 
children, there may be more than one child who could 
potentially be substituted. So we would have to have a way of 
knowing which of those individuals could be the one to be 
substituted. Would it be the one that gets to us first or 
would--if they both came in and wanted to be substituted how 
would we revolve that? They may not have the same opinion as to 
how the claim should be prosecuted. So even though those 
classes are fairly simple there are other aspects to it.
    Also the fact if say there is a surviving spouse and 
children, if the surviving spouse just didn't want to prosecute 
the claim or maybe he or she wasn't able to do it, could that 
person waive their right and defer to a person of a lower class 
to take in and be substituted?
    So even within those classes there are some fairly 
difficult questions I think to be resolved. And also adverse 
interest, which could lead to, you know, contest.
    Mr. Hall. Well, I trust we will see a draft soon, and 
looking forward to that.
    Mr. Mayes, I wanted to ask you about the Monday morning 
workload report, which recently was changed into a different 
format. Could you explain to us now how you are calculating 
your total C&P inventory, what is the figure currently, and how 
does it differ from the previous workload report?
    Mr. Mayes. Mr. Chairman, I can. We are continuing to report 
the so-called rating bundle as we always have. It is on the new 
version of the Monday morning workload report. If you look at 
the very top, there is a category called ``Compensation and 
Pension Entitlement.'' That is a grouping of claim types that 
is new, but right underneath that is the grouping, 
``compensation and pension rating bundle,'' and that is the 
traditional count that we have included on our Monday morning 
workload report now for years. That current number, the latest 
one I have, is 465,707.
    I had a lot to do with this. We wanted to improve the 
report for our stakeholders, and we also wanted to align the 
Monday morning workload report much more closely with our 
budget submission. We think that veterans and stakeholders 
think of our benefits in terms of just that. Benefits, whether 
it is disability compensation, disability pension, death 
benefits such as burial benefits. So what we did was we lumped 
all of the compensation under one grouping and then we broke 
that into entitlement. So that is a veteran coming to us and 
asking us for an entitlement determination, whether that be an 
original claim, a reopened claim, a claim for increase, or 
adjustments, which aren't necessarily veterans. In some cases, 
veterans come to us, for example, adding a dependent, program 
reviews, and other issues. We did the same thing for pension, 
and we broke out burial.
    The new category, compensation and pension entitlement, is 
simply a compilation of each of the benefit types that includes 
entitlement requests. It is a little bit higher because we 
actually included some things in there, for example, spina 
bifida claims. We previously did not include those in the 
rating bundle, and that is why that number is a little bit 
higher. It was merely to try and clarify, and I hope I have 
done that.
    Mr. Hall. Thank you, Mr. Mayes. You mentioned in your oral 
testimony and in your written testimony some of the reports 
that P.L. 110-389 called for have been done and some not. I 
wanted to ask in particular about the $1.7 million contract 
that was awarded by the VA to the IDA for the report on causes 
for variance and compensation payments report that was due in 
2009, and actually IDA has not been sanctioned for its failure 
as I understand it to meet this deadline. But instead they have 
been awarded another contract for $1.3 million. Ironically this 
second contract requires IDA to assess the VA's program 
established to increase efficiency and customer service. It 
seems ironic that the same company that is already late with 
one report would be retained to do another one, especially on 
such a topic.
    So what is your feeling about that, and how many contracts 
do you have or has VA had with IDA, and are they usually late 
or are they usually on time?
    Mr. Mayes. Well let me start by saying I am not aware that 
they were sanctioned, so that is the first I have heard of 
that.
    The Institute for Defense Analyses has been retained to do 
three studies related to Public Law 110-389, two of which are 
related to Section 104. One of those is the report that you 
just mentioned, and it is completed. I just completed it. We 
have it.
    The second one is related to 104(b)(3), which were 
differences in current patterns of claims submitted for 
disability compensation, and that one has been submitted to 
Congress.
    And the third study and report that IDA is doing for us is 
related to the independent review of our quality assurance 
program, and that is not due, I believe, until October 2011.
    As far as our work with IDA, they have been outstanding. 
They do a very thorough and, I think, comprehensive review when 
we have asked them to do those reviews.
    I don't know if I answered your question. I wasn't aware of 
the sanctions.
    Mr. Hall. My question sought to learn the reason why the 
report was late and whether we have mechanisms to hold 
contractors accountable. They are late, right?
    Mr. Mayes. Well, I know we are late, and I hope I am not--
--
    Mr. Hall. But I am glad that you have the report, I am 
looking forward to our seeing it.
    Mr. Mayes. We are very close, Mr. Chairman, and I think you 
will be pleased with the work they have done.
    Mr. Hall. I am glad to hear that, sir.
    Also regarding the Providence pilot, which as I understand 
it involved calling veterans on the telephone after the VCAA 
notices were sent. The notice that is included with the notice 
was reported that this effort is met with almost 100 percent 
success and employees are very excited about interfacing with 
veterans in this way, and that it seemed to speed up the 
development process. The telephone development unit pilot as 
described to us on the Committee also reflects a more veterans 
centered approach to claims processing, which of course is what 
we have all been trying to capture.
    Mr. Mayes. Yes.
    Mr. Hall. Could you elaborate on this new approach and is 
it effectiveness? Is there a plan to expand it separate to the 
other 56 ROs, and if so, how would that be rolled out? Since I 
know many veterans who are filing claims would love the benefit 
of that kind of contact.
    Mr. Mayes. Right. It is being evaluated in Providence. We 
are also going to be looking at expanding this in a pilot in 
Pittsburgh. Certainly there is no question that when we receive 
a claim from a claimant, a veteran, and we send out the 
notice--and currently I would agree with some of the earlier 
panel members, the notice is rather legalistic and complex, 
which is why we have promulgated a regulation to simplify that 
at the request of Public Law 110-389. If we follow that notice 
letter up with a call and a very focused effort at explaining 
that and helping the claimant understand the notice letter, 
then I think that it would help the process.
    Then we have a requirement to gather all of the evidence 
that is referenced by the claimant. If they then certify that 
we have everything, we can move the claim on to the next point 
in the process, the point where we actually make the decision 
and notify the claimant.
    My only caution here is that Providence is a relatively 
small station that is really on top of their workload. You have 
some really large offices where they are struggling to keep up 
with the maturing diaries and the cases as they are ready to 
move along to the next point in the process.
    So I believe what we have to do is evaluate whether this is 
ultimately an effective use of the resources for us to address 
our national workload and the increase. So that is the reason 
that we are doing this in Providence and going to be taking a 
look at it in Pittsburgh, and we will continue to evaluate it 
to see if this is something we need to export nationwide.
    Mr. Hall. Well that is an encouraging process. I think we 
are all aware of the fact that you are chasing a moving target, 
you know, you yourselves, the VA are a moving target, we in 
Congress are a moving target, and the technology as it evolves 
is itself a moving target.
    Mr. Mayes. Feels that way some days.
    Mr. Hall. All we have to know is that our Blackberry is 
obsolete every 6 months to know that, you know, the systems 
that become available or the tools that become available to you 
every year, every 6 months are probably a quantum leap ahead, 
and so on top of this we have the increased number of claims 
that are coming forward, especially with the three new Agent 
Orange connected diseases that have been now made to be 
service-connected so--with hundreds of thousands of new claims 
just for that alone. Obviously some offices are going to be 
more overwhelmed than others.
    I just wanted to ask you to also elaborate on the Veterans' 
Benefits Management System which is supposed to converge your 
business process information efforts with your 21st century 
paperless claims processing system efforts. The U.S. Government 
Accountability Office (GAO) recently reported that the 
usefulness of these pilots is in question to them because VA is 
not properly evaluating the value of these initiatives to 
determine whether they should be implemented on a VBA-wide 
basis. Accordingly, it describes your ability to process claims 
in an electronic environment as ``elusive,'' quote, unquote.
    Could you tell us, tell the Committee the strategic time 
line that VBA is employing to process claims by 2012 in an 
electronic environment using a transformed claims processing 
model? Will the new VBMS system interface with the virtual 
lifetime electronic record effort? And will it interface with 
VHA's CAPRI/VistA systems as well?
    Mr. Mayes. I will ask Mr. Warren to address that.
    Mr. Hall. Mr. Warren.
    Mr. Warren. Sure. To your question about VBMS and will it 
actually result in anything, I believe is the summary of your 
question, Mr. Chairman. The key tenants, if you will, that VBMS 
is applying to paperless to streamline processing first, let's 
look at the business processes in terms of how we do claims. 
The pilot in Little Rock is focused on how do we change things? 
It was referred to in the previous panel about how do you do it 
as teams, how do we change the way we do process, how do we 
move things? And also the written testimony I believe refers to 
it as well. So those are focused on business process changes 
themselves. There are also other pilots under way concurrent 
with that in different parts of the benefits complex.
    The business transformation lab in Providence is asking the 
question with the technology infrastructure we have today can 
we do the things we do today better or different? So it is not 
a wholesale rip and replace, it is; can we tune, can we 
optimize what we have? So an effort to look at the processes, a 
second effort to look at the technologies we are using, and can 
we upgrade those specific technologies without impacting the 
process itself?
    What we are trying to do is, we are trying to manage the 
complexity and the variables. So again, focus on changing 
business processes, multiple pilots and multiple locations, 
focus on how do we look at specific technologies versus 
changing everything all at once and then trying to implement it 
across the complex. You make it so complex you never can get 
there. So how do we bring those two things together?
    The next key component is this virtual regional office, 
which is now let us take what we have heard, what we have 
experimented with, what looks good and actually lay the 
professionals around them. The business re-engineering folks, 
the IT folks, and have a rating professional go through what do 
you do, why do you do it, what if you do this, what if this 
tool is available for you, what if this technology is available 
for you and change it? So go through and change it. So it is 
not a great idea you spend a lot of money on deploying and 
finding reality makes it not work. How do we take it into a 
laboratory setting and figure out what works?
    Those then result in pilots. Pilots that are being laid out 
this fiscal year and next fiscal year of taking the things that 
are shown to work in that test bed and start laying them across 
the complex. The discussion about how we change the way we do 
development. In other words, moving to smaller increments. The 
P-mass process that we have talked about, that Secretary Baker 
has spoken to. How do we take long projects, which spend a lot 
of money over a long period of time with no outcome, and pull 
it back into 6 month or less increments?
    So again, in a virtual environment try out the concepts 
that appear to make sense, see if they make sense, and then 
start dropping those in incrementally across the different 
regional offices and the different locations. That is 
scheduled, those pilots start this fiscal year, the end of this 
fiscal year, roll into the next fiscal year to actually start 
laying those pieces in an incremental manner such then in 
fiscal year 2012 we have changed the way we do the comp and pen 
process that the technologies and the tools are available for 
the rating specialist to move that forward.
    Mr. Hall. So are you optimistic about meeting the 2012 
goal?
    Mr. Warren. At this time I am very optimistic, Mr. 
Chairman.
    Mr. Hall. Great, maybe you could tell us a little bit about 
the employee training inputs that would be necessary to have 
everybody be able to use these new processing tools.
    Mr. Warren. I am going to hand that question to Mr. Mayes, 
if you will, it is a team work.
    Mr. Hall. Right.
    Mr. Warren. And so we have gone back--we throw this back 
and forth, if you will, in terms of where is the technology 
going? And as the technology is coming forward, part of those 
integrated teams, as we need to train we hand it back into our 
colleagues, and they, if you will, pivot to the front and move 
the training forward. So Mr. Mayes.
    Mr. Mayes. Mr. Chairman, we are involved in the deployment 
of new technology even today, and the way we have done it 
through the VetsNet platform is that we have developed training 
mechanisms here in headquarters, and then we utilize a group of 
super users at our regional offices around the country. And 
actually with VetsNet when we started deploying that, we 
limited the deployment to pilot sites, and so we would make 
conversions of records, make sure it didn't break the system, 
and then we would incrementally expand around the country as we 
deployed the new technology, all the while leveraging the super 
users that we had trained centrally, but then deployed out in 
the regional offices.
    So I would envision as new technology gets deployed, 
whether it be VBMS or VLER, that we could utilize a deployment 
strategy like that.
    Mr. Hall. Mr. Mayes, in your testimony you discussed the 
employment of commercial off-the-shelf (COTS) technologies 
which you describe as featuring a stable, scalable 
infrastructure that fully supports the business vision. How 
will this align with the existing VA technology architecture? 
Maybe this is a question for Mr. Warren too. Virtual VA in 
particular. And what is the strategy of the VA in terms of 
implementing these COTS technologies with improving claims 
processing?
    Mr. Mayes. I will have to defer that question to Mr. 
Warren.
    Mr. Warren. To your question of commercial off-the-shelf 
software or COTS software. One of the things that we are very 
aware of based upon site visits we have made to USAA is an 
example as well as other insurance providers is, there are 
tools and technologies in use today out in the marketplace, and 
in fact we have had a roundtable with yourself on that as well 
as several hearings.
    So what are those tools and technologies? We talk about 
them in the testimony in terms of work flow management, in 
terms of flexible user interface. And a lot of those tools, if 
you will, we have been using to build that long-term solution 
for the Post-9/11 new GI Bill. So those tools and technologies 
we are proving them when we roll the first increment out in 
April to show that these technologies in the marketplace can be 
used to where we need to go.
    So the idea of a virtual case file, the fact that it is 
indexed, pulling that information from our partners at DoD, 
putting the information to the NHIN connector in terms of 
third-party medical information, scanning, using scanning tools 
and technologies. Providence will be one place where we will be 
testing those things that are already available in the 
marketplace.
    So work flow engines, that graphical user interface, the 
idea of breaking it into service components and using a 
service-oriented architecture, which has been proven out in the 
commercial work space.
    So hopefully that answered your question, sir.
    Mr. Hall. Yes, thank you. I thank you all for the work you 
are doing and for your forthcoming answers here.
    I want to salute the VA first of all for fully complying 
with Section 106 of the Act, which mandated that osteoporosis 
be added to the presumptive list of disabilities for those 
prisoners of war who are also diagnosed with PTSD.
    That said I was curious if you could wrap up by telling us 
where we stand on post-traumatic stress and traumatic brain 
injury fronts to ensure that the veterans suffering from these 
conditions are getting the disability benefits they deserve, 
and in particular, what is the status of finalizing the pending 
PTSD rule making?
    Mr. Mayes. Yes, Mr. Chairman, I am really proud of the work 
that was accomplished in changing the rating schedule 
evaluation criteria for traumatic brain injury. We published a 
final rule, I believe it was in October of 2008, and that now 
provides a vehicle for us to compensate veterans for cognitive 
impairment. There are ten facets of cognitive impairment now in 
the schedule, and previously there was a limitation to only 
compensate veterans at the ten percent evaluation level for 
subjective complaints. This new rule allows our rating 
specialists like Mr. McCray to assign up to a 40 percent 
evaluation for subjective complaints. So that was the one 
signature injury that we are seeing from the servicemembers 
coming back. We feel like we have done a good job in crafting a 
new rule.
    Now we are addressing mental health disorders, primarily 
PTSD. The first component of that is what you referred to, 
reducing the evidentiary burden for proving the stressor. We 
have received comments, I believe it was 127 comments from the 
public, which we have addressed and have a final rule drafted. 
It is also working its way through concurrence and will be 
published in the Federal Register soon. I think we are very 
close on that, and I give this Committee much credit for 
working with us on that.
    And the next piece is what the panelists previously talked 
about, it is not just the evidentiary standard for proving the 
stressor, but we need to revise the evaluation criteria in the 
schedule for all mental health disorders. You saw a start of 
that last week, and you had staff there. I was pleased to see 
that staff were represented, but the next step will be to 
revise the schedule.
    So we are moving forward. I know it is probably not as fast 
as everyone would like, including myself, but we are taking 
steps.
    Mr. Hall. Well thank you very much, Mr. Mayes, Mr. Hipolit, 
Mr. Warren, Mr. Hanley. We have very good timing here in that I 
have run out of questions exactly when they called the next 
votes, but thank you so much for the work that you are doing on 
behalf of our veterans. I know that we all are aware of the 
distance we have yet to go, but together I believe we can bring 
a more timely and transparent process to bear on the backlog, 
and hopefully while we are still on solid food will see those 
numbers come down.
    So all Members of the Subcommittee and of both panels of 
witnesses have 5 legislative days to revise and extend their 
remarks.
    Thank you everyone for being here today to offer your 
insights and opinions, and this hearing stands adjourned.
    [Whereupon, at 3:47 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              


           Prepared Statement of Hon. John J. Hall, Chairman,
       Subcommittee on Disability Assistance and Memorial Affairs
    Good Afternoon.
    Would everyone please rise for the Pledge of Allegiance?
    Flags are located at the front and back of the room.
    Ladies and gentlemen we are here today to receive an update on the 
status and implementation of the Veterans' Benefits Improvement Act of 
2008, P.L. 110-389.
    At the time of its enactment P.L. 110-389 was embraced by many 
stakeholders as a way forward for VA to revamp and modernize its claims 
processing system to bring relief to those veterans, their families and 
survivors who were languishing in an antiquated system in dire need of 
reform. I was proud to lead that effort for the Committee.
    Under this law we created the Office of Survivors Assistance and 
made it possible for survivors to step into the shoes of the deceased 
claimants. We also put critical pilots in place to expedite ready to 
rate claims and to provide a checklist with the VCAA notices so that 
Veterans are less confused about what they actually need to 
substantiate their claims. In addition, we created the Disability 
Advisory Commission to provide ongoing expert input on the claims 
processing system, particularly with updating the VASRD, and we created 
additional checks and balances with required studies of VA's work 
credit system and its Work Management system, currently known as CPI.
    On a separate note, while I wish we could have included Section 101 
of H.R. 5892 in P.L. 110-389 to help the many combat veterans who are 
still forced to prove stressor exposure as part of this effort (which 
is now my bill, H.R. 952) I am heartened by VA's rulemaking efforts on 
this front and look forward to issuance of the final rule soon.
    I am pleased that P.L. 110-389 also laid the foundation for a 
number of initiatives that VA is currently undertaking, particularly 
its Veterans Benefits Management System and Veteran Relationship 
Management Initiatives, as well as, the Business Transformation Lab in 
Providence, RI, the Claims Processing Pilot in Little Rock, AR, and the 
Virtual Regional Office in Baltimore. You clearly have listened to the 
clarion call from this Committee and many veteran stakeholders that the 
current system is broken and in need of a major overhaul. These efforts 
hopefully will result in a system that reflects improved 
accountability, accuracy, quality assurance and timeliness of claims 
processing for our Veterans, their families and survivors.
    I applaud VA's more deliberative approach on these fronts and 
welcome the opportunity to support you in the upcoming budget cycles in 
your efforts to transform the VBA claims processing model.
    I look forward to hearing about how all of these pilots and 
laboratory initiatives will put VA on track to processing its 
compensation and pension claims in a virtual environment using a 
twenty-first century processing platform. I also look forward to 
hearing how it plans to move to an electronic rules-based processing 
environment by 2012.
    While electronic claims processing is not the panacea for 
eliminating the backlog, it will transform the claims processing system 
into a 21st Century set-up that will improve accuracy, consistency and 
quality. Let's get it right the first time. We owe our Veterans nothing 
less.
    I now recognize Ranking Member Lamborn for his opening statement.

                                 
  Prepared Statement of Hon. Doug Lamborn, Ranking Republican Member,
       Subcommittee on Disability Assistance and Memorial Affairs
    Thank you Mr. Chairman,
    And welcome everyone, to this first hearing of the second session.
    I look forward to continuing the progress we've made thus far in 
the 111th Congress.
    We're at the midpoint, and there are a lot of good provisions that 
we've passed--perhaps most notably among them are the measures we've 
worked on to help VA gain control over the claims process.
    The backlog is a major concern for everyone who is a stakeholder in 
veterans' issues, and I believe that through a bipartisan, 
collaborative effort we will begin to resolve the issues that have 
hampered VA for so many years.
    Of course along with following through on pending legislation, we 
must take a close look at the implementation of earlier provisions that 
became public law.
    That is the purpose of our hearing this afternoon, and I am eager 
to discuss the progress that has been made regarding the implementation 
of the Veterans' Benefits Improvement Act of 2008.
    I hope to find that the many good provisions we passed are 
fulfilling their intended purpose--which is to enhance and improve 
veterans' benefits and the system that administers them.
    Such provisions include measures to increase the accuracy and 
timeliness of benefits claims decisions and to enhance VA's use of 
information technology.
    It is imperative that this subcommittee continue to exercise its 
oversight responsibilities to ensure that this time the IT program 
works and is on time.
    I am also very interested to learn what VA has discovered in its 
assessment of disability compensation and effort to ensure due 
consideration is afforded to veterans for their loss of earnings and 
quality of life.
    I am interested as well in if the authority to allow substitution 
upon death of a claimant for purposes of acquiring accrued benefits has 
had a noticeable impact.
    It is my hope that this will relieve survivors of the arduous and 
time consuming process of starting the entire claims process over from 
square one. I expect the VA to discuss the implementation of this 
provision.
    Mr. Chairman, it is a pleasure to be seated with you here once 
again, and I look forward to working with you and all of our veterans' 
advocates in the months ahead.
    Thank you, I yield back.

                                 
  Prepared Statement of Hon. Jeff Miller, a Representative in Congress
                       from the State of Florida
    Thank you, Mr. Chairman.
    Public Law 110-389, the Veterans' Benefits Improvement Act, was a 
wide-sweeping move toward improving what is often a frustrating process 
for our nation's veterans in receiving well-deserved benefits from VA. 
Many members are still here on the committee and share a common 
interest in seeing that Congress's intent, as voted upon and signed 
into law by the President, is carried out.
    While VA may not intentionally try to make the claims process 
difficult, every member of this committee has constituents who have 
experienced trouble receiving their benefits. Among the concerns of 
this committee was the nationwide perception that veterans in different 
parts of the country were receiving different compensation for the same 
disability. The fact that this concern could even arise should warrant 
immediate action by VA, and shouldn't rely on Congress to step in.
    Another concern was how to expedite fully-processed claims. I think 
we can all agree that the entire scope of this bill has an impact for 
veterans across the country, and the implementation is important to us 
all, not just because it was passed by this committee, the full 
Congress, and signed into law, but also because it is important to the 
veterans themselves.
    Unfortunately, not all of the deadlines established have been met, 
and I hope that we can learn the full reasons for this today as well as 
what is being done to address those shortfalls. I am pleased to see 
that certain sections that were implemented, such as the Office of 
Survivors Assistance. The support of servicemembers' families is 
vitally important, and we must never forget to include them in our 
efforts.
    I look forward to today's testimony on the implementation of Public 
Law 110-389, and yield back my time.

                                 
      Prepared Statement of Richard F. Weidman, Executive Director
     for Policy and Government Affairs, Vietnam Veterans of America
    Good afternoon, Mr. Chairman, Ranking Member Lamborn, and 
distinguished Members of the Subcommittee. Thank you for giving Vietnam 
Veterans of America (VVA) the opportunity to offer our comments on the 
progress with the pilot programs authorized under Public Law 110-389.
    Before commenting on the situation to date, VVA notes that almost 
everything that is mandated to be tried in the pilot programs is just 
plain common sense, and most of the elements of the pilot probably 
could have been done by the Veterans Benefits Administration (VBA) 
under already existing authorities, if they had the motivation and the 
drive to do so. The statute was written after extensive hearings in the 
Spring of 2008 in response to frustration legitimately expressed by 
veterans and their advocates about the inordinate delays in the 
processing of even relatively straightforward claims before the 
Compensation & Pension system. Further, the delays were compounded by a 
lack of information as to the status of the claim, whether additional 
information was needed to make an accurate decision, and if so what 
information in what form from what source would move the process 
forward. Many veterans, and their advocates, often felt that submitting 
a claim was like entering into a maze of a process that would rival 
anything that Franz Kafka might have dreamed up in one of his stories.
    A number of ``roundtable'' discussions resulted in frustration for 
all concerned, largely because all of the Members and the advocates 
participating in the discussions kept talking about individual veterans 
and what was happening to that individual citizen who believed they had 
been injured by virtue of military service to country, whereas the VBA 
officials kept talking about processes and mean average of time taken 
in activities performed on claims. Not to put too fine a point on it, 
the VA folks appeared to think in terms of system processes and 
everyone else in terms of what happens to the individual, and how he or 
she experiences what is and is not happening to them.
    The effort to implement the Veterans Claims Assistance Act (VCAA) 
had become so legalistic and seemingly complicated that many claimants 
could no longer understand the letters of notification that VA sent to 
them after initially filing a claim. The General Accounting Office 
(GAO) took VA to task for not doing more to simplify the process so the 
claimant could more effectively respond to what was required, and for 
sending out poorly written and/or unnecessarily densely worded letters 
to veterans. What the Pilot program required is a test in a limited 
number of offices whereby half of the claimants would be sent out a 
straightforward ``check list'' that clearly noted ``by the numbers'' 
exactly what was needed from the veteran in order to move to a decision 
on his or her claim, and the other half would NOT get the check list, 
but would get the aforementioned letter.
    The VA contracted with the Center for Naval Analysis (CNA) to 
assist with the evaluation of the data from the first six months of the 
pilot, or December of 2008 to June of 2009. The focus of the analysis 
is to determine whether the use of the check list with the letter 
actually sped up the adjudication process. Because so many claims were 
still in the process of waiting to be adjudicated at the end of the six 
month period, the CNA and the VBA noted that any such conclusions one 
way or the other could not be ascertained.
    The question of whether the individual veterans and/or their 
advocates felt better about the process, or better understood what was 
still needed, and how to get it, was not covered in the data that we 
have seen.
    From what we have been given to understand, there is a separate 
report/analysis of the aspect of the pilot that focuses on fully 
developed claims, but we have been unable to secure any information on 
this separate project. One would assume that there is a separate CNA 
aided report to the Congress, but we have yet to see it.
    VVA has said for some years that most of what is wrong with the C&P 
system can be fixed under existing statutory authority. We have further 
advocated that essentially a week with the major stakeholders locked in 
a room would produce the models and agreements needed to move us toward 
a system that works for the individual veteran who has been lessened by 
virtue of his or her military service to country in the military. These 
steps would include, but not be limited to: (1) common training for VA, 
VSOs, state and local government employees, and others; (2) a common 
competency based exam for all who touch a claim; and, (3) organizing 
the claims file so that documents are in a set order in every 
claimant's file, with the most salient documents at the front of the 
file; and, (4) a decision template for every claimant that summarizes 
the key elements of the claim; and, (5) ``express lines'' for 
presumptive and other ``ready to rate'' claims; and, (6) systematic 
efforts to put all info in electronic form by means of Optical 
Character Recognition (OCR) or even ICR so that one can do a key word 
search of files; and, (7) work with the Armed Services Committee to 
begin the process of digitizing all unit and individual records.
    The two day meeting regarding the rating schedule for Post 
Traumatic Stress Disorder (PTSD) of VSO/MSO advocates with 
representatives of the Veterans Benefits Administration, 
representatives of the Veterans Health Administration, representatives 
of the Department of Defense, and at least some Congressional staff 
gave us more hope that reasonable solutions can be achieved by sitting 
and reasoning together than we have had in very long time. Maybe it is 
the right time to move forward together, and to do what can be done by 
agreement, and then lock it into statute after we get it to work.
    Again, thank you for allowing us to present information here today, 
Mr. Chairman. I will be pleased to answer any questions.

                                 
        Prepared Statement of John L. Wilson, Assistant National
            Legislative Director, Disabled American Veterans
    Mr. Chairman and Members of the Subcommittee:
    I am pleased to have this opportunity to appear before you on 
behalf of the Disabled American Veterans (DAV) to address the 
``Implementation and Status Update on the Veterans' Benefits 
Improvement Act (P.L. 110-389).'' In accordance with our congressional 
charter, the DAV's mission is to ``advance the interests, and work for 
the betterment, of all wounded, injured, and disabled American 
veterans.'' We are therefore pleased to support various measures 
insofar as they fall within that scope.
    DAV was pleased with Section 101 which sought to make 
correspondence more understandable and useful. We understand that VA 
has been drafting regulations with a focus on various legal 
complexities. They are also concerned with any potential impact on 
their ability to reduce their pending claims inventory or backlog. We 
are also concerned, however, that a September 2009 decision by the 
United States Court of Appeals for the Federal Circuit may have an 
impact on this effort.
    The September 2009 Federal Circuit decision overturned the 
notification requirements in Vasquez-Flores. The Court ruled that VA is 
not required to provide veteran-specific notification in order to 
comply with 38 U.S.C. 5103(a).
    The Court's conclusion was:

         As in Wilson, the arguments made by the veterans in this case 
        ``overlook[] the many statutory and regulatory provisions that 
        do apply to VA's actions after an initial RO decision.'' 506 
        F.3d at 1061. These provisions ensure that the veteran will 
        receive ``notice as to why his claim was rejected and an 
        opportunity to submit additional relevant evidence. Indeed, the 
        existence of other statutes . . . requiring specific notice at 
        other points during the claim adjudication process strongly 
        suggests that section 5103(a) was not intended to sweep as 
        broadly as appellant contends.'' Id.We conclude that the notice 
        described in 38 U.S.C. Sec. 5103(a) need not be veteran 
        specific under Wilson and Paralyzed Veterans.

    We are hopeful that VA will continue its work as specified in this 
section of P.L. 110-389 on clarifying the content of notices and not 
use this as a basis to continue with generic pre-determination 
notifications.
    Section 104 required VA to submit a report to Congress describing 
the progress of the Secretary in addressing the causes of variances in 
compensation payments for veterans with service-connected disabilities. 
The contract was awarded to the Institute for Defense Analysis and a 
workgroup was established to ensure a proper analysis was conducted. 
DAV is very interested in the results of the report, which were due to 
Congress by October 2009.
    Section 106 added osteoporosis to disabilities presumed to be 
service connected in former prisoners of war (FPOWs) with post-
traumatic stress disorder. DAV was pleased with the final rule 
incorporating a determination by the Secretary that a presumption of 
service connection for osteoporosis in FPOWs will be established 
irrespective of the presence of PTSD as indicated in the testimony 
given by Mr. Walcoff, VA Deputy Under Secretary for Benefits, before 
this Committee on June 18, 2009.
    Section 212 added a new section 5121A entitled ``Substitution in 
case of death of claimant,'' to title 38, providing that if a claimant 
dies while his or her claim or appeal for any benefit is pending, a 
person who is eligible to receive accrued benefits can request to be 
substituted as the claimant to continue the claim. The DAV supports the 
provisions of section 212 that pertain to the management of claims for 
accrued benefits upon the death of a claimant.
    Section 214 established the Advisory Committee on Disability 
Compensation. This eleven-member committee has met each month since its 
first meeting in November 2008. The Advisory Committee on Disability 
Compensation focused on the necessity and methodology of updating the 
VA's Schedule of Rating Disabilities or VASRD; transition compensation 
adequacy and sequencing for servicemembers moving to veterans' status; 
and quality of life compensation.
    The importance of a systematic review and update of the VASRD, in 
our view, is a priority, as it is the source of all disability 
compensation ratings. It is a rating scheme that addresses illnesses 
and conditions that run into the hundreds, and as such, should reflect 
the most recent medical findings in each and every case. DAV agrees 
with the Advisory Committee's assessment that a systematic process is 
lacking and that one is a necessity. The Committee offered the 
following recommendations, with all of which we agree:

        1.  The Deputy Secretary of the VA should be tasked with 
        providing oversight of the VASRD process, and of ensuring that 
        the Veterans Health Administration (VHA) and Office of the 
        General Counsel (OGC) are fully integrated in the Veterans 
        Benefits Administration's (VBA's) process;
        2.  Immediately increase staff at the VBA to nine full-time 
        employees (FTE) for the purpose of continuously reviewing and 
        updating the VASRD. The staff should include a coordinating 
        administrative person and two sub-teams comprised of one 
        medical expert, two legal specialists, and one administrative 
        support staff each. This staff should be assigned to the 
        Compensation and Pension Service (C&P) for administrative 
        purposes; and
        3.  As part of its new role as full partner in the VASRD review 
        process, VHA must establish a permanent administrative staff to 
        participate in VASRD review. The VHA administrative staff 
        should include at least one permanent party medical expert. 
        This staff member should have the authority to liaise with VBA, 
        assign medical staff from VHA to participate in VBA body system 
        reviews, and to coordinate with other medical experts as 
        appropriate.

    Staffing within the VHA and VBA must be allocated towards this 
task. It is a positive step to include the medical expertise from the 
VHA into this process. Although previous sources of expertise such as 
the Institute of Medicine contributed to this body of work, the 
experiential expertise that VHA professionals will bring to the 
discussion, with a decades-long role in providing medical care to 
veterans, should prove invaluable to this endeavor and well worth the 
additional staffing.
    The various stakeholders must also have a voice in this process. 
Such a collaborative effort by all parties helps to dispel any 
misperceptions and missteps.
    Additionally, VA's leadership must ensure oversight and successful 
implementation of this important recommendation. It was anticipated 
that VA's commitment to the systematic updating of the VASRD would have 
carried forward and been reflected in its strategic plan. Is not the 
VASRD the key source of all disability ratings? However, a search of 
VA's fiscal year (FY) 2006-2011 Strategic Plan finds no mention of the 
VASRD. The need for an update of the VASRD is instead referenced in the 
FY 2008 Performance and Accountability Report, as a result of a U.S. 
Government Accountability Office (GAO) update to its High-Risk Series 
(GAO-07-310), GAO High-Risk Area #1: Modernizing Federal Disability 
Program. The VA would be well served to add the very language of this 
section of the Advisory Committee's report to its Strategic Plan as its 
map for the systematic updating of the VASRD.
    As noted earlier, while we agree that a rewrite of sections of the 
VASRD is appropriate, DAV would oppose an approach that required a 
complete revamping of the 1945 rating schedule. Generally, the VASRD 
has served America's disabled veterans quite adequately. It 
incorporates a policy of ``average impairment,'' and that policy has 
treated all veterans with like disabilities equally and fairly, in 
spite of age, education or work experience. It also encourages disabled 
veterans to seek vocational rehabilitation training in order to become 
a more productive wage earner without penalty for doing so. 
Understandably, the VASRD has been modified and upgraded many times 
when advances in medical science dictate a change in a particular 
disability rating might be necessary, or additions to the Schedule have 
been incorporated to cover injuries, infirmities and illnesses unique 
to some theatre of operations. We agree with the Advisory Committee 
that the VASRD be updated in a systematic fashion, based on sound 
medical principles, provided there are no wholesale changes and, when 
change is necessary, it is based on the above principles.
    We also agree with the body system prioritization the Committee 
offers, beginning with mental health disorders. It is essential that 
different criteria be formulated to evaluate the various mental 
disorders under the appropriate psychiatric disorder. Criteria for 
evaluating mental disorder under title 38, Code of Federal Regulations, 
Section 4.130, are very ambiguous. For example, schizophrenia and other 
psychotic disorders, delirium, dementia, and amnestic and other 
cognitive disorders, anxiety disorders, dissociative disorders, 
somatoform disorders, mood disorders, and chronic adjustment disorders, 
are all evaluated using the same general rating formula for mental 
disorders. The Diagnostic and Statistical Manual for Mental Disorders 
(DSM IV) specifically lists different symptoms for posttraumatic stress 
disorder, schizophrenia, and other psychiatric disorders. One veteran 
service connected for schizophrenia and another veteran service 
connected for another psychiatric disorder should not be evaluated 
using the same general formula. Therefore, the DAV supports amendment 
of title 38, Code of Federal Regulations, section 4.130, to formulate 
different criteria to evaluate the various mental disorders under the 
appropriate psychiatric disorder and is pleased to see the Advisory 
Committee place mental disorders as the first to be considered in this 
systematic review.
    Section 221 required VA to carry out two pilot programs. The first 
is a one-year pilot program to assess the feasibility and advisability 
of providing expeditious treatment of fully developed compensation and 
pension claims no later than 90 days after the date the claim is 
submitted. VBA sent an all-station letter implementing the pilot on 
December 11, 2008, which identified the ten regional offices 
participating in the pilot. The letter directed that the claimant and/
or representative must submit, along with the claim, an indication that 
the claimant does not intend to submit any additional information or 
evidence in support of the claim, and does not require additional 
assistance with it. The claim must be accompanied by a fully developed 
claim (FDC) certification signed and dated by the claimant and/or 
representative. Additional development will not be needed, other than 
scheduling a VA examination or obtaining records in the constructive 
custody of the federal government. A contract was awarded to the Center 
for Naval Analyses (CNA) to review and report on results of the pilot. 
DAV is interested in the results of this pilot, the report of which was 
due to Congress on December 9, 2009.
    The second pilot was to assess the feasibility and advisability of 
providing a claimant and/or representative with a checklist containing 
information or evidence required for the claimant to submit to 
substantiate the claim will result in more frequent and timelier 
submissions of evidence. An all-station letter implementing the pilot 
was issued on December 11, 2008, which identified the four regional 
offices participating in the pilot. The Center for Naval Analyses was 
awarded the contract for preparing an analysis and report upon the 
completion of this project. DAV is interested in the results of these 
pilots, reports of which were due to Congress by December 9, 2009.
    Section 223 directed the Comptroller General to report to Congress 
VA's Dependency and Indemnity Compensation (DIC), addressing the 
current system for paying DIC to survivors, the current rates; an 
assessment of the adequacy of DIC payments in replacing the deceased 
veteran's income; and recommendations to improve or enhance the effects 
of the DIC payments in replacing the deceased veteran's income. We look 
forward to reviewing the findings and recommendations.
    Section 224 directed the Secretary of VA to enter into a contract 
with an independent third-party entity to conduct an assessment of 
VBA's quality assurance program and issue a report no later than 
October 2011. The contract was awarded to the Institute for Defense 
Analysis (IDA). While VA leadership may stress quality, and agree that 
it is ``absolutely a requirement for successful performance,'' what 
employees are compensated for is quantity based on a work credit 
system.
    In March 2009, the VA's Inspector General discovered that the VA 
was making more mistakes than it reported. The internal investigation 
found that nearly one out of four files had errors. That is 200,000 
claims that ``may be incorrect.''
    Although quality may be emphasized and measured in limited ways, as 
it currently stands, almost everything in the VBA is production driven. 
Employees naturally will work towards those things that enhance 
compensation and currently that is production. Performance awards are 
based on production alone. They should also be based on demonstrated 
quality. However, in order for this to occur, the VBA must implement 
stronger accountability quality assurance measures.
    What does VBA do to assess the quality of the product it delivers? 
The quality assurance tool used by the VA for compensation and pension 
claims is the Systematic Technical Accuracy Review (STAR) program. 
Under the STAR program, VA reviews a sampling of decisions from 
regional offices and bases its national accuracy measures on the 
percentage with errors that affect entitlement, benefit amount, and 
effective date. However, samples as small as 20 cases per month per 
office are inadequate to determine individual quality.
    With STAR samples far too small to allow any conclusions concerning 
individual quality, rating team coaches who are charged with reviewing 
a sample of ratings for each RVSR each month. This review, if conducted 
properly, should identify those employees with the greatest success as 
well as those with problems. In practice, however, most rating team 
coaches have insufficient time to review what could be 100 or more 
cases each month. As a result, individual quality is often under 
evaluated and employees performing successfully may not receive the 
recognition they deserve and those employees in need of extra training 
and individualized mentoring may not get the attention they need to 
become more effective.
    The results of visits by the VA's Office of Inspector General (VA 
OIG) to six VAROs in 2009/2010 certainly underscore the need for a 
comprehensive quality reporting mechanism. The VA OIG is well placed to 
conduct such operational assessments. It is evident to DAV that the 
STAR program uses too small a sampling size to provide any significant 
trend analysis. Rating team coaches, burdened with a cumbersome claims 
management system and massive claims inventory, are hard pressed to 
review sample ratings monthly. Were this the norm, what mechanisms 
exist to capture this data at a national level? The results of these 
visits point to the need for a Quality Assurance staff at each VARO 
that reports its efforts to the VBA.

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

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

VA OIG Reasonable Assurance of Compliance for Calendar Year 2009-2010


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


--------------------------------------------------------------------------------------------------------------------------------------------------------
       VA Regional Offices             Nashville          Wilmington            Roanoke            Anchorage           San Juan            Baltimore
--------------------------------------------------------------------------------------------------------------------------------------------------------
Claims Processing

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

Haas                              No                  No                  No                  No                  Yes                 No

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

PTSD                              No                  No                  Yes                 No                  No                  No

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

TBI                               No                  Yes                 No                  No                  No                  No

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

Diabetes                          Yes                 No                  No                  No                  No                  No

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

Data Integrity

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

Date of Claim                     No                  No                  Yes                 No                  Yes                 No

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

COVERS                            Yes                 No                  Yes                 No                  Yes                 No

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

Management Controls

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

SAO                               Yes                 Yes                 Yes                 No                  No                  No

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

STAR                              No                  Yes                 Yes                 No                  No                  No

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

Date Stamp Accountability         Yes                 Yes                 Yes                 No                  No                  No

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

CPI                               No                  Yes                 Yes                 Yes                 Yes                 Yes

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

Information Security

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

Mail Handling Procedures          No                  Yes                 No                  No                  No                  No

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

Destruction of Documents          No                  No                  No                  No                  No                  No

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

Public Contact

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

IRIS                              No                  Yes                 No                  No                  No                  No

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

Congressional Inquiries           Yes                 No                  Yes                 No                  Yes                 No

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

Fiduciary                         No                  No                  n/a                 No                  No                  No
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DAV looks forward to the IDA report on VBA's quality assurance 
program, due October 2011.
    Section 225 required VA to develop skills certification examination 
criteria for VBA employees and managers responsible for processing 
compensation and pension claims. VBA's decision review officers (DROs) 
and coaches (Supervisory VSRs) were designated to participate in 
testing. A contract was awarded to the Human Resources Research 
Organization (HumRRO). We have long advocated for better training in 
VBA. The DAV has maintained the preeminent training program throughout 
the VSO community for many years, which many other organizations have 
adopted. Training is tied directly to quality--the DAV would welcome 
the opportunity to assist the VA in developing such a program.
    Section 226 tasked VA with conducting a study on the effectiveness 
of the current employee work credit system and management system within 
VBA, which is used to measure and manage the work production of 
employees who handle compensation and pension claims. The study will 
also evaluate more effective means of improving performance. The 
contract was awarded to the Center for Naval Analyses in March 2009. 
DAV has long advocated for a more stringent system of accountability. 
Any improvements in the work credit system, aimed at increasing 
accuracy and accountability, will be less than effective if equal or 
coinciding changes are not made in VA's quality assurance practices in 
conjunction with those of the work credit system.
    Section 227 required VA to conduct a review of information 
technology (IT) in VBA concerning compensation and pension benefits, 
and to develop a comprehensive plan for the use of IT technology in 
processing claims for the purpose of reducing subjectivity, avoidable 
remands, and regional office variances in disability ratings for 
specific disabilities. A full report is due to Congress by April 2010.
    Contrary to some beliefs, the majority of time spent by VA on 
disability claims is actually spent in development of the case for a 
rating decision. This includes receiving the claims by VA, establishing 
the claim in VA's current computer systems, and developing the evidence 
to support the claim. Evidence development, whether in the form of 
gathering military records from the Service department or the Records 
Processing Center, private health records, VA health records, VA or 
private medical opinions, and stressor verification through the U.S. 
Army and Joint Services Records Research Center consumes the vast 
majority of the claims-processing time. Therefore, any viable 
electronic claims-processing system implemented with real expectations 
of shortening the claims process must focus on digitizing all archived 
data locations and automating all VA development functions leading up 
to the rating decision.
    We are hopeful that the report will put forth a broad and over-
arching plan with reasonable milestones outlining the technology 
identified and the manner in which such technology would be utilized. 
Once complete, the groundwork would be laid for VA to coordinate with 
various entities, i.e., Congress, Veterans Service Organizations, 
Department of Defense, etc., to turn the plan into reality. The DAV 
would welcome the opportunity to work with the Agency, to include any 
contractors, in order to assist in the development of this system.
    This concludes my testimony regarding Implementation and Status 
Update on the Veterans' Benefits Improvement Act (P.L. 110-389). I look 
forward to any questions the Committee may have.

                                 
      Prepared Statement of Ian C. de Planque, Assistant Director,
    Veterans Affairs and Rehabilitation Commission, American Legion
    Mr. Chairman and Members of the Subcommittee:
    I appreciate this opportunity to express the views of the 2.4 
million members of The American Legion on the ongoing implementation of 
PL 110-389, the Veterans' Benefits Improvement Act of 2008. When this 
legislation was passed in 2008, it offered a broad spectrum of benefits 
to the veterans of America. However, since the enactment of this 
legislation, the speed with which the Department of Veterans Affairs 
(VA) has complied with many of its numerous provisions has been 
disappointing. The efforts of Congress and the citizens of America to 
improve the situation of veterans seeking their earned benefits from 
the VA are of little consequence if the VA cannot move swiftly to 
implement them. This law was enacted on October 10, 2008 and we sit 
nearly 16 months later with little concrete result. The implementation 
of this law cannot be considered successful at this time.
    This is broad reaching legislation. We were asked to focus on the 
issues surrounding VA's disability claims processing system as they 
apply to the Veterans' Benefits Improvement Act of 2008, the 
effectiveness of compensation and pension benefits-related provisions 
of that act. My testimony will be limited to those areas under the 
disability claims processing umbrella we feel in most need of 
attention. Should the subcommittee feel that further information is 
needed about any portion of the legislation not considered in this 
testimony, The American Legion would be happy to provide further 
response in those areas.
    In Fast Letter (FL) 09-15, distributed March 3, 2009, VA laid out 
their plan for implementing the provisions of this law. Some of the 
points required little or no action on behalf of VA, such as the 
extension of provisions already in effect for the authority of 
performance of medical disability exams by contract physicians, or 
aspects relating to the Court of Appeals for Veterans Claims, which 
falls outside of VA purview. Others required studies to be performed, 
and in many of those cases, we are still waiting to determine the 
results of those studies.
    Important studies take many months or years to bear fruit. This 
underlines the importance of an early beginning for such studies, in 
the interest of providing answers to the questions.
    Section 213 called for a report on the progress of the Secretary of 
Veterans Affairs in addressing the findings of a Study of Compensation 
Payments for Service Connected Disabilities. This report was compiled 
by Economic Systems, Inc. (Econsys), and provided a variety of policy 
options to address appropriate levels of disability compensation to be 
paid to veterans. Compensation for loss of earnings capacity and for 
loss of quality of life, as well as the feasibility and appropriate 
level of long term transition payments for veterans undergoing 
vocational rehabilitation as a result of their service-connected 
disabilities were researched. VA provided a special forum for comment 
by Veterans' Service Organizations (VSOs) on January 14, 2009 on this 
study, published in September 2008.
    One of the factors which became apparent in the earnings loss 
section of this report was that different disabilities rated at the 
same percentage rate, for example two distinct conditions each assigned 
a 30 percent rating by the ratings schedule, have differing impacts on 
level of earnings loss. There is no ``one size fits all'' for rating 
disability. This was most apparent in mental disorders, as veterans 
suffering from a mental disorder often have a greater earnings loss 
than for a physical disability rated at the same tier percentage. 
Econsys found that this may require improved accuracy in the ratings 
schedule to adequately reflect earnings loss for the individual 
disabilities, but noted the potential problems inherent in such a 
revision, such as the possible reduction of some rates of disability to 
make the overall scale more equitable and the concerns among service 
connected veterans such reductions would bring about.
    One of the key areas of interest brought about by the study was the 
first attempt to devise a system to incorporate quality of life 
considerations into the ratings schedule. The study provided three 
possible options. One option simply would implement a Quality of Life 
(QOL) Benefit with a statutory rate for each combined level of 
disability. While this is completely objective and would require 
comparatively little additional effort, it is quite unlikely that all 
veterans receiving this compensation would be compensated to match 
their individual degree of QOL. Some veterans would receive 
overpayment, some would be underpaid. However, the actual QOL loss of 
all veterans at a set degree of disability, such as a combined 60 
percent rating, would not be equal, and QOL being often subjective to 
individual cases would not be equitably applied. The American Legion 
does not consider this a desirable solution.
    The second proposed remedy is to individually assess each veteran's 
claim for individual loss of QOL. While this certainly is targeted to 
accurately matching loss of QOL to an individual subjective case, this 
would represent a considerable amount of time and manpower to process 
this additional component of the claim. The American Legion believes 
this would be a less than optimal solution.
    A third proposed remedy was to provide for the creation of a 
separate ratings scale geared to QOL loss. The proposal called for this 
process to have some level of computer automation to enhance 
timeliness, and would incur additional costs creating a QOL schedule, 
although it would be more objective and subject to less processing 
time. The objective nature of such a schedule may also fall short of 
addressing the individual picture of impairment for specific veterans. 
However, it could be more tailored than the first proposal to 
accurately reflect the impact of the facets of QOL loss. The American 
Legion believes the work involved in setting up such an additional 
schedule would be great at the outset.
    No one system presented was without flaws; however, all of the 
options in this study, as in similar studies such as the Veterans 
Benefits Disability Committee (VDBC) and the Advisory Committee on 
Disability Compensation, underline the inadequacy of the present VA 
ratings schedule to address issues related to the impact of a 
disability on the quality of life. VA has made some strides, most 
notably a recent Mental Health Forum that stated that the reformation 
of the difficult schedule of ratings for mental health was their 
priority and represents an important step forward. While aspects of 
impact on quality of life are not exclusive to mental health, this has 
been an area often overlooked in the past.
    Reports and studies are of little value if we cannot implement the 
lessons learned from them. It is becoming clear from many of these 
studies that VA's compensation system is falling short in addressing 
these aspects of impairment. When considering ratings schedule for 
mental disorders, VA is directed to consider social and occupational 
impairment, yet this is currently an area of deficiency and a target 
for improvement. These studies should increase our awareness of mental 
disorders and to seek to rectify present deficiencies in that area.
    Section 221 called for two pilot programs to be implemented to 
improve the speed of the claims process. One pilot called for an 
expedited process for ``fully developed claims,'' the other called for 
a pilot to assess the feasibility and advisability of providing 
claimants with a checklist including information and evidence required 
to substantiate a claim. Both programs represent possible ways of 
speeding up the claims process, improving clarity of information to 
veterans and potentially reducing the backlog of claims. Both programs 
have been initiated, yet no update on the status of these projects has 
been provided as of this time. In a March 3, 2009 ``Fast Letter'' (FL), 
VA stated that the initial report would be due to Congress no later 
than September 10, 2009, with a second interim report no later than 
September 10, 2012. As of this writing, we are nearly five months past 
the first deadline.
    Section 101 of this law provides much needed updates for the 
letters mandated by the Veterans' Claims Assistance Act (VCAA). The 
VCAA letters have been a point of contention for quite some time. 
Originally intended to provide veterans with an assessment of the 
information required to substantiate their claims, the letters are 
complicated, containing confusing legal language that many veterans 
have a hard time understanding properly. Section 101 calls for these 
letters to be made more specific to the types of claims, whether 
original or reopened, or a claim for an increase in benefits. 
Furthermore, Section 101 directs these letters to be more appropriate 
to the type of information specific to those types of claims.
    On December 11, 2009, VA published a proposed rule change to 
implement the revisions. A period of public comment expires on February 
9, 2010. The new letter templates are broken down into four distinct 
subtypes based on the type of claim, as mandated in PL 100-389, and the 
language has been updated to be clearer and provide examples of the 
manner in which VA processes claims and the type of information that 
they require. In this they also include compliance with the recent 
court decisions of Dingess/Hartman and Vasquez-Flores. The overall 
effect shows a continuation of efforts to provide clarity in these 
letters. Increasing the clarity of direction to veterans in the claims 
process will help the entire claims process by increasing veteran 
understanding of the issues involved and reducing unnecessary paperwork 
with excessive information over and above what is required to 
substantiate a claim.
    Section 106 directed VA to add the condition of osteoporosis to the 
presumptive list of disabilities for those Prisoners of War (POWs) who 
are also diagnosed with posttraumatic stress disorder (PTSD). Not only 
has VA complied with this provision, in a final rule published August 
28, 2009, they further extended the presumption of osteoporosis for 
POWs to any POW who was detained or interred for a period of 30 days or 
more, regardless of whether or not that POW is diagnosed with PTSD or 
any other condition. The American Legion is opposed to the 30-day 
period required for many presumptive disabilities associated with POW 
status, and continues to call for VA to rescind such 30-day periods. 
However, we also recognize that VA has reached beyond the initial scope 
of this presumption as written in the law, and commend them for this 
extension of benefits above and beyond that which they were directed to 
do.
    Section 211 calls for the addition of temporary ratings for 
immediately transitioning servicemembers to bridge the gap during the 
transition time and provide some measure of relief until a more 
detailed and permanent rating is issued. This would represent an 
important step in what has been identified recently as one of the most 
difficult periods in the current wartime climate, the transition 
process. FL 09-15 stated that 38 C.F.R. Sec. Sec. 4.28 and 4.129 would 
be revised to reflect the new statutory language. However, we have yet 
to see any meaningful movement towards implementing this measure. 
Perhaps one of the easiest steps which could be taken is the granting 
of obvious issues in multiple claim cases, with issues that could not 
be immediately adjudicated deferred to a later time.
    VA can then adjudicate claims for which they have the information 
up front and partially set those veterans on the road to their full 
eligibility. This would allow VA to take the necessary time towards 
adjudicating the more complicated issues without penalizing the 
veteran. Adjudicating one or two applicable issues, while deferring 
others, would get the veteran a measure of monetary compensation for 
their disabilities and also increase access to the affordable health 
care for those disabilities that can immediately be service-connected. 
Too often the practice currently is to hold all decisions on claims 
until every issue can be adjudicated. With multiple issue claims, which 
are more common with transitioning servicemembers, delays can become 
quite lengthy. This results in a more frustrating process in the 
difficult time of transition when aid is needed most.
    There has been focus lately on the lengthy claims process. In the 
veterans' community, there is a perception by some that VA policy is to 
``delay, and delay until the veteran dies.'' While this is an unfair 
perception, the reality exists that many VA claims take so long to 
process that veterans who suffer from terminal conditions, often do 
pass away before their claims can be finally adjudicated. In the claims 
process, this has meant that these claims cease to be processed with 
the death of the veteran and must be reinitiated by an eligible 
survivor, thus beginning the whole, lengthy process anew.
    Section 212 of this legislation was meant to provide some measure 
of relief to the families of the veterans in those situations. This 
section provided for the continuation of the claims by the families of 
the veterans, in short, the living family member who would have been 
entitled to the accrued benefits assumes the position of claimant and 
maintains the claim until it has been finally adjudicated. Many 
veterans state that among their final wishes is the belief that their 
families receive the benefits to which they are entitled, and this is 
precisely what this measure was intended to ensure.
    Guidance to the regional offices on how to process these claims 
prior to the publication of an implementing regulation was issued in FL 
09-15, but VA has yet to publish a proposed regulation. The process of 
publishing a proposed regulation, receiving public comment, and 
assimilating it into a final regulation is already a lengthy process, 
yet it has not even begun. Although VA provided internal interim 
instructions on how to process these claims, the regulation process 
provides public review and comment to ensure transparency and external 
involvement in VA's implementation of the statute. Sixteen months 
without VA publishing a proposed regulation is unacceptable.
    Perhaps one of the greatest areas of concern for The American 
Legion is the implementation of the provisions of Section 226. The 
American Legion has long argued that the current work credit system in 
use by the VA contributes substantially to the ongoing backlog of VA 
claims. In short, the present system gives equal credit to claims 
properly and improperly adjudicated. The American Legion has maintained 
that this system places undue weight on quantity over quality. The 
resulting deficiencies in quality thus lead to an increased number of 
appeals clogging the system. If a job is done correctly the first time, 
then the inherent delays in redundant work are eliminated.
    Section 226 called for a study of the work credit system to 
consider better measures to improve accountability, quality of work, 
and accuracy in processing compensation and pension claims. To date, we 
have received no updates on the results of any study, or even whether 
or not such a study is in process. VA's own ``Fast Letter'' stated that 
a report would be submitted no later than October 31, 2009.
    The American Legion continues to call for the establishment of a 
work credit system in which credit would only be assigned when a claim 
has been finally adjudicated. In such a system, the impetus would be to 
properly adjudicate a claim the first time. By making the decision 
airtight, credit could be claimed more swiftly for the final claim. VA 
could point to accurate figures of claims that had been done to the 
standard of accuracy and with proper legal rights maintained throughout 
the claim. Though we feel that such a system would be the most 
beneficial, the main point is that VA's current work measurement has 
serious flaws and is in desperate need of a major overhaul.
    Although not officially endorsed by The American Legion, a recent 
proposal informally circulated among VSOs called for a ``checking 
account'' type system. In such a system, VA would get credit for work 
when it was completed, at the time it was completed. However, if work 
is found to be done improperly or inaccurately, then debits would be 
assigned against that credit. It could be a better rubric that provides 
more accurate information to interested parties. Where does VA stand on 
the claims process? Are they ``in the red'' or ``in the black?'' There 
would be easy answers to those questions, plain numbers in black and 
white. The culture could move away from shuffling papers and counting 
widgets to quality work. With adherence to strict standards, VA 
employees could take pride in their ability to keep their offices 
operating squarely in a positive credit status. VA itself could easily 
discern where the resources available to improve quality were needed 
most. Veterans and the groups that advocate on their behalf could see 
at a glance where the efforts were working most effectively and where 
more attention would be needed.
    Any system different from the current process would require a 
transition period and would require adjustments. Asking the entire 
veterans' community to change how it measures the claims process, but 
change can be a good thing. In this case, change to a more transparent 
and easy to interpret rubric for the measurement of progress and 
achievement. The sooner change begins, the sooner a system in which the 
veterans' community can efficiently participate.
    Such a watershed change should not be considered separate from 
changes already being studied. VA is currently developing many pilot 
programs with the potential to improve the operating environment to the 
benefit of veterans involved. In Little Rock, Arkansas, VA is still 
implementing a pilot program in conjunction with Booz, Allen, and 
Hamilton to apply ``Lean Six Sigma'' business practices to the claims 
process. Representatives of The American Legion and other major VSOs 
have visited Little Rock at the invitation of VA to examine this pilot 
program during its initial operation, and the early feedback is 
positive. In Providence, Rhode Island, VA is piloting a program to 
operate in an entirely electronic environment. While VSOs have not yet 
had ``eyes on'' experience of this program, again early feedback is 
positive. VA is of course extensively examining the impact and 
implementation of electronic ``paperless'' processing of claims.
    All of these examinations of aspects of VA operations should not 
operate in a vacuum. What is essential is that VA must develop an 
integrated management approach, a holistic composite of all lessons 
learned from these examinations. There are many great things that VA 
has done and can continue to do. However, there are also many stumbling 
blocks from reliance on the old ways of doing things that must be 
transformed if a truly integrated operating approach is to be 
implemented. The American Legion wants to help VA to become the most 
responsive and beneficial system possible. There are many challenges to 
such a system, but they are not insurmountable.
    VA transformation must go forward. It is not enough for Congress to 
propose changes and to pass laws which provide for such changes; we 
must ensure that these changes are followed up on and implemented in a 
manner that forges VA into the operating entity it is capable of 
becoming. Congress has worked very hard with the VSOs and America's 
veterans to investigate this system and determine the most essential 
areas for reform. VA strives to provide many excellent services and 
benefits to veterans, but they must not be hampered by a reliance on 
outdated and inefficient means to deliver these benefits and services. 
As willing partners in the process, Congress, the veterans' community, 
and VA must all work together to ensure that this system continues to 
be what Abraham Lincoln long ago envisioned, an organization endowed by 
this country ``to care for him who shall have borne the battle, and for 
his widow and his orphan.''
    The American Legion stands ready to answer any questions of this 
Subcommittee and thanks you again for this opportunity to provide 
testimony on behalf of our members.

                                 
     Prepared Statement of Richard Paul Cohen, Executive Director,
           National Organization of Veterans' Advocates, Inc.
    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    Thank you for the opportunity to present the views of the National 
Organization of Veterans' Advocates, Inc (``NOVA'') concerning the 
implementation and effectiveness of the Veterans' Benefits Improvement 
Act of 2008, P.L.110-389.
    NOVA is a not-for-profit Sec. 501(c)(6) educational organization 
incorporated in 1993. Its primary purpose and mission is dedicated to 
train and assist attorneys and non-attorney practitioners who represent 
veterans, surviving spouses, and dependents before the Department of 
Veterans Affairs (``VA''), the Court of Appeals for Veterans Claims 
(``CAVC''), the United States Court of Appeals for the Federal Circuit 
(``Federal Circuit''), and on remand before the VA.
    NOVA has written many amicus briefs on behalf of claimants before 
the CAVC and the Federal Circuit. The CAVC recognized NOVA's work on 
behalf of veterans when it awarded the Hart T. Mankin Distinguished 
Service Award to NOVA in 2000. The positions stated in this testimony 
have been approved by NOVA's Board of Directors and represent the 
shared experiences of NOVA's members as well as my own seventeen-year 
experience representing claimants at all stages of the veteran's 
benefits system from the VA Regional Offices to the Board of Veterans 
Appeals to the CAVC as well as before the Federal Circuit.
                              P.L. 110-389
    In October 2008 Congress passed S. 3023, enacted as P.L. 110-389, 
and titled the ``Veterans' Benefits Improvement Act of 2008'' (``the 
VBIA 2008'' or ``Act'').
    The Department of Veterans Affairs (``the VA'') was directed by the 
Act to issue regulations prescribing the content of notices to be 
provided to claimants in conformity with the Veterans Claims Assistance 
Act of 2000 (``VCAA''), 38 U.S.C. Sec. 5103(a), Act, section 101, and 
to issue regulations regarding substitution in case of death of the 
claimant, Act section 212.
    Among the reports which the Act required the VA to submit to 
Congress, before the end of 2009, are the following six reports:

        1.  The VA's progress in addressing variances in compensation 
        payments by improving coordination between the Veterans 
        Benefits Administration and the Veterans Health Administration 
        regarding examinations of veterans. Act, section 104;
        2.  The assessment of personnel requirements of the VBA. Act, 
        section 104;
        3.  On descriptions of patterns of claims submitted to the VA 
        and the effort undertaken to reduce such differences. Act, 
        section 104;
        4.  On the appropriate levels of disability compensation to 
        compensate for loss of earning capacity and quality of life and 
        on the feasibility and appropriate level of long term 
        transition payments during rehabilitation for veterans 
        separated from the Armed Forces due to disability. Act, section 
        213;
        5.  On a one year pilot program, at ten regional offices, to 
        assess the feasibility and advisability of expeditiously 
        deciding ``fully developed'' claims. Act, section 221; and
        6.  On a study conducted on the effectiveness of the current 
        VBA employee work credit and work management systems. Act, 
        section 226.

    The following four studies, by the VA, were required by the Act:

        1.  Assessment of the quality assurance program, including 
        retaining, monitoring, and storing designated data on each 
        claim. Act, section 224;
        2.  Development of an updated certification examination for 
        appropriate employees and managers. Act, section 225;
        3.  Review of VBA's use of information technology to process 
        claims and develop a plan for the use of such technology. Act, 
        section 227; and
        4.  Assessment of the feasibility and advisability of 
        mechanisms to provide VBA employees with medical advice from 
        the VHA, when needed. Act, section 228.

    Additionally, the VBIA 2008 required the United States Court of 
Appeals for Veterans Claims to submit to Congress an annual report 
containing detailed information summarizing the Court's workload during 
the preceding year.
                             VA COMPLIANCE
Proposed VCAA Regulations

    The VA's notice of proposed regulations regarding VCAA notices to 
be provided to claimants was published, on December 11, 2009, in 74 FR 
65702, as RIN 2900-AN 46, Notice of Information and Evidence Necessary 
To Substantiate Claim.
    NOVA has commented on the proposed regulations, observing that the 
VA has not implemented regulations which would assist claimants by 
providing specific and helpful information and guidance and by 
explaining what is necessary to support the claim at issue. Rather, the 
VA has opted to provide claimants with the minimum possible information 
and explanation, that is, generic ``general information and evidence to 
substantiate entitlement for the type of claim filed and benefit 
sought.''

There has been no action on a substitution regulation

    The VA has not issued any regulations, nor published any intent to 
do so, regarding substitution in the case of death of the claimant. 
Accordingly, the VA is obstinately trying to administer a regulation, 
38 C.F.R. 20.1302, which requires an appeal to be dismissed upon the 
death of the claimant in violation of 38 U.S.C.Sec. 5121A which allows 
the appeal to continue with the substitution of an eligible person.
                               VA Reports
                           Submitted Reports
    According to a presentation by VBA, in November 2009, the following 
reports, which NOVA has not seen, have been submitted to Congress:

        1.  A July 2009 report on EconSys;
        2.  An interim report in October 2009 on the pilot study on 
        expediting fully developed claims;
        3.  An interim report in October 2009 on the pilot study on 
        providing checklists to claimants; and,
        4.  An April 2009 report on improving medical advice to rating 
        specialists.

                         Booz Allen Cycle Study
    The June 5, 2009, report prepared by Booz Allen Hamilton (``Booz 
Allen'') and entitled ``Compensation and Pension Claims Development 
Cycle Study'' (``the report'') offers recommendations to improve the 
cycle time of the claim development and rating process.

Findings

    According to the report, the present Claims Processing Improvement 
(``CPI'') model divides claims processing into six functional teams, 
(triage, pre-determination, rating, post-determination, appeals and 
public contact) in each of the 57 Regional Offices. This has resulted 
in an average claim rating processing time, a/k/a average days to 
complete (``ADTC''), of 163 days with some Regional Offices having an 
ADTC of 238 days, or close thereto.
    In site visits to eight of the 57 ROs, Booz Allen observed great 
variability, from 99-193 days, in the average time it takes for a claim 
to go through the development process, but very little variability, 
from 5 to 6 hours, in the average time a claim is worked on during the 
entire development process.
    Because of the division of labor resulting from use of the CPI 
model, claim folders spend time waiting in queues between process 
operations. Segregation of work ``creates overlapping, redundant, and 
sometimes unnecessary work activities'', and work typically backs up at 
each step. To make matters worse, work is, typically, unevenly assigned 
to VSRs according to the last two digits of the veteran's claim number 
which causes further backups and delays.
    Booz Allen found that policy documents provided by VBACO are 
difficult to access during the processing of a claim, which causes 
Veterans Service Representatives (``VSRs''), who are responsible for 
all activities in the pre-determination and post-determination 
functioning of claims processing, to use self-generated and non-
standardized tools. In addition to tools which are hard to access, fast 
letters communicating policy changes ``do not specify the required 
procedural changes in a step-by-step format that would allow VSRs to 
rapidly enact the changes.'' As a result of lack of guidance, the 
policies for scheduling compensation and pension exams vary 
considerably across VAROs ``resulting in the inconsistent collection of 
evidence, rework, and increased cycle times.''
    Separation of the physical locations of the functional teams in the 
VAROs leads to ``functional stovepipes'' characterized by frontline 
employees, such as file clerks and claims assistants, being ``unaware 
of what happens to a claim once they have finished their steps in the 
process, or how their work contributes to the quality of the final 
product.''
    Not only are employees unaware of their contribution, but the 
employee performance data base, ASPEN, is misaligned with the goal of 
increasing the number of claims ready to rate. Instead of tracking 
production goals and progress toward the goals, ASPEN tracks self-
reported work activities without regard to the overall production 
goals. Quality control is similarly inadequate, lacking timely 
feedback. It can take as long as 6 weeks between the time that five of 
a VSR's claim folders are pulled for the monthly review and the time 
that feedback is provided by the ``Super Senior VSR''.
    Also detracting from production and accuracy goals is the mandatory 
training which is inappropriately focused on functional position 
regardless of the knowledge or skill level of the VSRs. Because all 
employees must attend the same training sessions, some employees are 
bored by the training while other are confused.

Recommendations

    Primarily, Booz Allen recommends initiating a pilot project based 
upon a ``pod team structure'' with changes in physical layout and 
responsibilities that create self contained teams. Each team would 
perform triage, pre-determination, rating and post determination 
functions as a team, thus reducing cycle times by facilitating claims 
flow and reducing inventories. It is anticipated that the team members 
would ``have a greater appreciation for how their work quality impacts 
downstream processes'' thus eliminating the functional stovepipe effect 
and increasing work quality.
    To further gauge claim progress and to supervise performance, Booz 
Allen suggests visual management displays with charts of daily 
production goals and progress toward those goals. Linking processing 
activities to ``Veteran customer demand'' by ``Takt Time'' 
calculations, management would generate information on the required 
pace for production to allow the RO to better balance workload and 
assess the ability to meet demand on a daily basis. To control quality 
it is suggested, rather than increasing the number or frequency of 
inspections, that quality be embedded into the claims resolution 
process by encouraging the uncovering of errors thus allowing for 
quality to be controlled by root cause analysis.
    To solve the problem of inconsistent procedures utilized by the 
VSRs, Booz Allen recommends development of standardized claims 
development processes and the use of Job Instruction Sheets containing 
action steps and times to completion. Additionally, faster resolution 
of claims could be realized by improved clarity and consistency of 
communications with Veterans.
    Booz Allen recommends streamlining file and records retrieval 
through collaboration and electronic records sharing among the VBA and 
the Records Management Center, the National Personnel Records Center, 
the Federal Archives and Records Center and the Department of Defense. 
An additional recommendation is development of manual procedures to 
minimize the delay caused by unavailability of claim folders because of 
pending appeals.
                          NOVA's Observations
    Booz Allen's Cycle Study highlights systemic problems of delays, 
inefficiencies and inaccuracies present in and created by the VBA's 
claims adjudication process which are well known to those who practice 
in this field and are consistent with findings contained in reports of 
other recent investigations by the VA Office of Inspector General.\1\
    NOVA supports the recommendation to explore the pod team approach. 
We had advocated employing a similar team approach in a letter sent to 
the Senate Veterans Affairs Committee in March 2009, as part of a 
comprehensive plan to remake the VBA. See attached letter. NOVA is 
pleased to learn that a pilot project utilizing the pod team approach 
is already in place in the North Little Rock Arkansas RO, and we await 
the upcoming progress reports.
    Although the use of an electronic file is only mentioned in passing 
in the Booz Allen report, as part of the recommendation to streamline 
file and records retrieval, section 227 of the Act requires the use of 
information technology to be utilized by the VBA to, among other 
things, access information which has been submitted; to permit veterans 
to view applications for benefits submitted online; and through a 
secure portal, to allow a claimant to check the status of any claim 
submitted by that claimant. NOVA views the VA's use of a secure, 
readily searchable, and adequately indexed, electronic file as 
essential to Congress's goal of correcting the delays in the VBA claims 
adjudication process. Moreover, having such an electronic file which is 
accessible by claimants and their representatives, online, will 
eliminate the need for many of those VA employees in the public contact 
team, who are tasked with answering inquiries regarding the status and 
contents of claims folders. It will also solve the problem, identified 
by Booz Allen, which was created by trying to develop one claim 
submitted by a veteran while the claim file containing a different 
claim also submitted by the veteran is at a different location for 
review by an appellate adjudication team. To eliminate confusion and 
mis-mailed submissions by claimants, NOVA recommends modifying the RO 
structure suggested by Booz Allen which utilizes a VARO based mail 
intake facility. Instead, NOVA suggests utilizing one address for all 
correspondence and documents sent to the VA housed in a central 
processing facility and tasked with scanning documents into the file. 
This central scanning and filing system should automatically send an 
electronic notice to the submitter of the document acknowledging 
receipt, which is what happens with the CAVC's E-Filing system, and it 
should also send notice to the appropriate RO, to the BVA, to the 
appropriate VAMC, or to the General Counsel, as necessary.
    Two crucial matters not addressed by the Cycle Study are continued 
unreliability of statistics published by the VA and the continued anti-
veteran institutional bias in the VA. Both of these problems negatively 
impact the VA's ability to monitor performance and to provide accurate 
decisions. NOVA has previously called this committee's attention to the 
fact that both the VBA and the BVA claim decision accuracy rates of 90 
percent although the rates of appeals and the rates of affirmances by 
the CAVC reveal an accuracy rate of below 20 percent. More recently the 
VBA has altered the Monday Morning Workload Reports so as to under 
report backlog and to make comparisons with reports published in 2009 
and preceding years impossible.
    As discussed above, the VA has also inexplicably issued regulations 
proposing to provide to claimants generic and meaningless statutorily 
required notices, called Veterans Claims Assistance Act notices. Such 
general notices are of no value to claimants, waste precious VA 
resources and are contrary to the recommendations in the Cycle Study to 
``improve the clarity and consistency of communications with 
Veterans.'' Another indication of the VA's indifference to veterans is 
shown by the reaction of the C&P Service after being told by NOVA that 
erroneous notices had been sent to claimants informing them, contrary 
to section 101 of P.L. 109-461, that claimants are not permitted to 
hire a representative, for a fee, until after the BVA decides their 
appeal. Ignoring the assertion of NOVA that due process rights of 
claimants who received erroneous letters require that corrected letters 
be sent, the C&P Service, in the December 2009 Bulletin, declined to 
correct the erroneous notices and opted instead to attempt to send 
correct notices some time in the future.
    NOVA continues to learn of VSRs who refuse to apply statutorily 
mandated presumptions, incorrectly apply the benefit of the doubt and 
refuse to acknowledge diagnoses of PTSD in combat veterans as service 
connected. Obviously, the VA requires more than a structural overhaul 
to achieve the stated goal of being ``strongly and uniquely pro-
claimant.''
    An additional matter covered by the VBIA 2008 is reporting by the 
CAVC. The Court's FY 2009 annual report lacks the information required 
by VBIA 2008, Section 604, items 4 through 15 which includes 
information such as the number of dispositions by the Court, by the 
clerk, by a single judge, by a panel and by the full Court; the time 
from filing the brief to disposition; and an assessment of the workload 
of each judge. All of this required information is necessary to 
determine the Court's need for increased resources.

                              ----------                              

          National Organization of Veterans' Advocates, Inc. (Nova)
                                                    Washington, DC.
                                                     March 16, 2009
By Email and U.S. Mail

Senator Daniel Akaka, Chairman
Senate Veterans' Affairs Committee
141 Hart Senate Office Building
Washington, D.C. 20510

Dear Senator Akaka:

    Attached are NOVA's answers to your additional questions following 
the hearing on February 11, 2009.
            Sincerely,

                                                 Richard Paul Cohen
                                                 Executive Director
    RPC/smp
    Attachment

                              ----------                              

                  RECOMMENDATIONS FOR REMAKING THE VBA
Summary
    NOVA's recommendations include utilizing secure, electronic files; 
decentralizing rating and appellate functions; and implementing a user-
friendly, simplified system which puts the veteran first.

Specific recommendations

    NOVA's plan to remake the Veterans' Benefits Administration 
contemplates an organization dedicated to being user-friendly, 
considerate of the needs and limitations of veterans when adjudicating 
claims, and believing that veterans generally file meritorious claims 
for VA benefits. Fundamental to creating a system which truly does put 
veterans first is ensuring that veterans and their families receive 
actual assistance in the development of their claims and that fully-
developed claims are properly paid regardless of whether the veteran is 
represented or proceeding pro se.
    First and foremost, there must be a system which allows disabled 
veterans and their families to file simplified claim forms, participate 
in hearings and review claim files without having to travel four or 
more hours to participate in the adjudication of their claims. Under 
the present system, 57 Regional Offices (RO) handle all of these 
functions, forcing many veterans to travel long distances to their 
``local'' RO. A veteran-friendly system would disperse most of the 
functions of the present ROs closer to VA Hospitals, VA outpatient 
clinics, and/or Vet Centers. This way, the processes of meeting the 
veteran, completing forms, developing evidence, and attending hearings 
would take place closer to the claimant's home, while centralized state 
offices would house the rating boards. With computerized files, the 
file could be accessed in all locations. A system like this has been 
utilized by the Social Security Administration, which has multiple 
local offices dispersed throughout each state for these precise 
processes.
    Such a system would begin to process the simplified application by 
requesting specific documentation from the claimant, such as a 
necessary DD214 or current medical records. Then, rather than 
continuing with the obsolete system of separating work functions at the 
ROs into six teams, there should be one decision unit which handles 
everything from reviewing the application for completeness in 
predetermination through gathering the evidence and producing rating 
decisions. This reworked adjudication unit would be charged with the 
responsibility of partnering with the claimant and the claimant's 
representative, if the claimant is represented, to fully understand and 
develop the claim. It would then issue an understandable and case 
specific VCAA notice, prior to any rating decision, assist with any 
additional development, and then, after case-development was completed, 
issue the rating decision.
    Because the present rating system is obviously difficult for 
veterans to understand and for rating boards to apply, it often results 
in erroneous decisions. What is needed is an overhaul of the entire 
Schedule for Rating Disabilities contained in 38 C.F.R. Part 4 to 
simplify and update the schedules.
    There should be increased use of presumptions to eliminate the need 
for development of evidence regarding the incidents of military service 
for all those who were deployed to a war zone regardless of their 
military occupational specialty or place of assignment within the war 
zone. For example, any veteran who was deployed to a war zone, whether 
during WWII, Korea, Vietnam, the Gulf War or the GWOT and who is 
subsequently diagnosed with PTSD, the sole inquiry during the rating 
stage of their claim should concentrate on the severity of their 
symptoms without requiring development of the nature of their in-
service stressor(s) or the connection between their stressor(s) and 
their present diagnosis of PTSD. Any veteran who is diagnosed with a 
medical condition while on active duty and who is presently being 
treated for that same condition should not need to prove a medical 
nexus between the in-service condition and the current condition. Also 
veterans who are receiving Social Security Disability or Supplemental 
Security Income benefits based on medical conditions and/or 
disabilities which are related to service should be presumed to be 
unemployable.
    PTSD, TBI, and their underlying symptoms and residuals are leaving 
increasing numbers of veterans'lives in shambles. It is only right, 
therefore, that any rewrite of the Schedule for Rating Disabilities 
include consideration and compensation for a veteran's loss of quality 
of life as well as for his/her loss of earning capacity as related to 
these medical conditions.
    Obviously, NOVA's recommendation to decentralize the VA will not 
work without a 21st century VA claims system, i.e., one that is 
paperless and secure. Also, the VA will never secure the confidence of 
our country and our veterans until there are secure claims files.
    Together with a modern claims file system, veterans must be granted 
the same rights granted to all other classes of citizens--the right to 
choose to hire a lawyer for assistance, if desired, from the very 
beginning of the claim adjudication process. Presently, veterans are 
the only class of citizens who do not have the right to hire an 
attorney to assist with a claim from the claim's inception. For 
example, veterans who are notified of the possibility that their rating 
will be reduced are not permitted to hire an attorney for a fee to 
represent them even after objecting to the notice of reduction. They 
must wait until after their rating has been reduced to hire a lawyer. 
Moreover, once a lawyer or other representative is hired, neither the 
first-line decision makers, the appellate teams nor the BVA should view 
the veteran's representative as having interests opposed to the VA's 
central mission of providing proper benefits to veterans and their 
families. It follows that the VA should partner with the claimant's 
representative and use informal conferences to speed claim-development 
and narrow the issues to be decided.
    Following an unfavorable rating decision, the claimant should only 
need to file one request for an appeal instead of the present 
requirement to file both a notice of disagreement and a substantive 
appeal to the BVA. Thereafter, the claimant and his representative 
should have the right to submit further evidence and/or argument, have 
a de novo review on the record, and/or a personal hearing before a 
Board Member (in person at the ``local'' RO, via video-conference, or 
in person in Washington, DC).
    Fundamental to remaking the VBA is adequate training, supervision 
and accountability. This will require a revamping of the VA's 
organizational chart so as to provide reporting and direct 
accountability from the Regional Offices to the Secretary. Presently, 
there are an excessive number of layers of executives in the system 
which impedes the flow of knowledge and communication to the Secretary, 
thereby impeding accountability. With direct accountability comes less 
likelihood of lost, shredded or compromised evidence and/or claims 
files. Direct accountability also brings about better-trained staff who 
are properly motivated to perform functions essential to the mission. 
Finally, in a system with adequate training and accountability, VLJs 
are less likely to write decisions which are affirmed only 20 percent 
of the time when appealed to the Veterans Court.
    To ensure efficient, convenient, timely and proper appellate review 
at the administrative level, the Board of Veterans Appeals should be 
made independent of the VBA and should be decentralized and dispersed 
within reasonable distances from the many Regional Offices. Not only 
should the BVA Veterans Law Judges be moved out of their fortress in 
Washington, D.C., but the BVA's VLJs should be reconfigured into a 
corps of truly independent and well-trained Federal Administrative Law 
Judges.
    It is fundamental that the pressures placed on raters and VLJs to 
turn out decisions must be replaced with a system which expects the 
right decision to be made at all levels of the process. Veterans 
require a system which does not provide a decision until the claim is 
fully developed, which involves a true partnership between the claimant 
and the VA, and which rewards prompt and correct decision-making. 
NOVA's experience confirms the findings in the 2005 report of the 
Office of Inspector General that the present work credit system is 
providing a disincentive to properly deciding claims. It should be 
replaced. To complement new expectations of increased accuracy and 
accountability, it is essential that VA employees be repeatedly and 
adequately trained and supervised. Additionally, the high rate of VLJ 
decisions which are returned to the BVA because of inadequate reasons 
and bases is unacceptable and contributes to the backlog and to the 
reputation of ``hamster wheel'' adjudications.
    Appeal from a VLJ's decision should go to the CAVC and then to the 
Federal Circuit. Two changes to the operation of the court would make a 
big change. First, the CAVC should be granted class action jurisdiction 
to remedy situations which affect a broad class of veterans. Second, 
the CAVC should be required to resolve all issues reasonably raised, 
except for constitutional claims, if the appeals can be resolved 
without reaching the constitutional claim.
---------------------------------------------------------------------------
    \1\ 09-01995-63, 20100114, VARO Roanoke; 09-00213-125, 20090512, 
VARO Pittsburgh; 09-01996-41, 20091204, VARO San Juan; 09-00189-81, 
20090227 VARO C&P Benefit Claim Receipt Dates; 08-02073-96, 20090312, 
VBA Compensation Rating Accuracy and Consistency Reviews; 09-01993-29, 
20091119, VARO Baltimore; 09-01193-228, 20090928, VBA's Control of 
Veterans' Claims Folders; 08-01759-234, 20090930, VARO Claim-Related 
Mail Processing; 08-03156-227, 20090923 VARO Rating Claims Processing 
Exceeding 365 Days.

                                 
 Prepared Statement of John McCray, Rating Specialist, Los Angeles, CA,
   Regional Office, Veterans Benefits Administration, U.S. Department
of Veterans Affairs, on behalf of the American Federation of Government
                           Employees, AFL-CIO
    Dear Chairman and Members of the Subcommittee:
    Thank you for the opportunity to testify today on behalf of the 
American Federation of Government Employees, AFL-CIO (AFGE), the 
exclusive representative of employees in the Veterans Benefits 
Administration (VBA). I currently serve as a Rating Specialist (RVSR) 
at VBA's Los Angeles Regional Office (RO), and have been employed with 
VBA for nine years.
    P.L. 110-389 provides many valuable tools that will significantly 
reduce an inventory of one million claims or any other size by getting 
each claim processed correctly the first time. The urgency of putting 
these tools into practice grows greater with each new claim in the 
queue. AFGE's comments today focus on Sections 224 (Quality Assurance), 
225 (Certification and Training), and 226 (Study of Performance 
Measures).

VBA Continues to Exclude the Perspective of Front Line Employees

    AFGE greatly appreciated Chairman Hall's request for our views 
during the drafting of the Disability Claims Modernization Act 
(P.L.110-389) and our views on implementation of the law at this 
hearing. In contrast, VBA continues to exclude AFGE from its efforts to 
implement this critical new law even though our members are the ones 
who know first hand which management policies and practices speed up 
production and accuracy, and which ones worsen the backlog and lead to 
a counterproductive ``assembly line'' work environment.
    Therefore, AFGE recommends that the Subcommittee increase its site 
visits to the ROs, and in order to ensure unfiltered discussions with 
employees and their representatives, these meetings should take place 
outside of the presence of management. We also encourage regular 
roundtables where VSOs and frontline AFGE members can exchange 
recommendations for improving the claims process.
    Sadly, there appears to be little chance of a culture change at VBA 
anytime soon. The work environment at most ROs is more hostile now than 
under the prior Administration. Terminations of both experienced 
employees and newly trained employees are a routine occurrence. The 
constant threat of termination places additional stress on a workforce 
that is working mandatory overtime every weekend and still struggling 
to comply with arbitrary increases in production requirements.
    It is equally discouraging that VBA is not fully complying with the 
December 9, 2009 White House Executive Order creating labor management 
forums. More specifically, at the last Partnership meeting, VBA 
expressed its unwillingness to establish interim level partnerships at 
the Area Offices.

Quality Assurance (Section 224)

    In the short term, the input of front line employees and their 
representatives will be an essential component of any third part 
assessment of VBA's quality assurance program. RO management facing 
intense production pressures have resorted to a number of techniques 
for hiding the size of the backlog and the number of aging claims. Our 
members on the front lines see how these techniques are employed on a 
daily basis.
    In the long term, managers without sufficient expertise are unable 
to carry out quality assurance duties, leading to greater errors, which 
in turn lead to more appeals, remands and other delays. Therefore, it 
is critical that these managers pass the same certification tests as 
managers supervising claims processors. Training quality and 
management's compliance with training requirements should be included 
as quality assurance criteria.

Skills Certification (Section 225(a))

    The requirement in the new law to require both employees and 
managers to pass skills certification tests will yield multiple 
benefits for VBA's efforts to address the backlog. Our members 
regularly report that they are supervised by managers who have little 
or no experience performing the complex functions involved in 
processing disability claims, rendering their roles as mentors and 
trainers ineffective.
    In addition, workplace morale suffers when front line employees 
work under intense pressure to adjudicate complex claims while 
supervised by managers who have not done and do not understand their 
jobs. As one Rating Specialist put it, ``There is not a doubt in my 
mind that most managers would fail the VSR and RVSR certification tests 
if they had to take them today.''
    AFGE is troubled by recent reports that VBA is considering 
excluding higher levels of management from the supervisor skills 
certification requirement--the very officials who have significant 
fiduciary duties.
    Despite enormous expenditures to the contractor HumRRO for the 
development and administration of the certification tests, they 
continue to malfunction. Every time the test has been given, a critical 
component of the testing process, such as the website, has shut down.
    AFGE learned that VBA field tested the supervisor certification 
exam a few weeks before this hearing. Unfortunately, VBA is not 
complying with the requirement in the law that VBA consult with all 
stakeholders, including employee representatives, in order to improve 
the certification.

Training (Section 225(b))

    The provision in P.L. 110-389 for an independent evaluation of 
VBA's employee training programs is a crucial component of any claims 
process overhaul. The link between poor training and claims processing 
errors has been well established.
    AFGE members report a wide range of deficiencies in the training 
provided at ROs, including:

          Failure to adequately advise employees of the impact 
        of changes in the law;
          Failure to adequately prepare employees for the 
        skills certification test;
          Lack of national uniformity in training programs 
        provided at the ROs; and
          Lack of centralized formal ``train the trainer'' 
        programs, resulting in trainers with poor teaching skills and 
        insufficient subject matter expertise.

    The most detrimental training policy of all is lack of training 
time, including demands by pressured managers to shortcut training. As 
soon as new employees complete their initial centralized training and 
arrive at their work sites, production pressures begin to compete, and 
win, against training needs. New employees are not rotated to all 
stations and are put on the ``assembly line'' before fully trained. 
Older employees are regularly deprived of their full 80 hours of annual 
mandatory training.
    VBA also engages in intentional deception regarding the 80 hour 
mandatory training requirement. AFGE has received a number of VA 
central office memos instructing employees to briefly review training 
materials sent by email, and then managers get credit for 1.5 hours of 
mandatory training that should be provided in a classroom setting. More 
generally, VBA leaves it up to each RO director to decide how training 
is provided. One can easily guess how well this approach works, 
considering that management bonuses are based on production and not on 
training.
    It is laudable that VBA has issued a new training Fast Letter (10-
05) a few weeks before this hearing to increase the mandatory training 
requirement to 85 hours per year and standardize more of the 
curriculum. However, if VBA continues to force managers and processors 
to choose production over training and accuracy, this initiative will 
be of little benefit.
    The competency of trainers, both in terms of subject matter 
expertise and teaching ability, continues to be poor. Employees who are 
assigned to training duties are given minimal instruction on how to 
competently convey the material. AFGE again recommends that VBA use a 
cadre of formally trained instructors from VA Central Office to conduct 
RO training.

Work Credit and Work Management Systems (Section 226)

    Despite its assertions over the years, VBA has never produced 
evidence of a comprehensive reliable time and motion study that would 
enable it to properly assign work credits for different tasks in the 
claims process. As a result, employees are pressured to short cut those 
tasks that are undervalued, such as additional case development.
    In turn, an accurate work credit system will lay the foundation for 
an effective work management system. VBA has not adjusted individual 
employee production standards to reflect the increasing complexity and 
difficulty of the claims process. Employee workload requirements must 
be ascertained by reference to valid empirical data. VBA must, with no 
preconceptions, identify how much an employee can reasonably be 
expected to do with an acceptable level of accuracy, and use that data 
to project the number of employees it needs to process its inventory.
    As long as employees are subjected to arbitrary and unreasonable 
production standards, the claims development process will be flawed by 
inefficiency and incomplete claims development. The ultimate harm falls 
upon the veterans, who are deprived of a full, fair, and timely 
consideration of their claims, and a growing backlog.

Other Workplace Issues Contributing to the Backlog

    Telework Production Standards: AFGE is disappointed that Secretary 
Shinseki was unwilling to grant a recent request to eliminate unfair 
work-at-home policies for RO claims processors made by Congressman 
Frank Wolf (R-VA), the author of 1990 flexiplace legislation. Even 
though the VA currently lags behind other federal agencies in the use 
of flexiplace, Secretary Shinseki also informed Congressman Wolf that 
he was unwilling to reverse RO policies denying the flexiplace option 
to many employees.
    In contrast, two years ago, former Secretary Peake granted a 
similar request by Congressman Wolf to reverse policies that imposed 
higher production standards on Board of Veterans Appeals attorneys 
working from home. We urge the VA to reconsider its position, which is 
hurting the VA's ability to retain experienced employees.
    Unfair Terminations: Senior employees with invaluable experience 
are being terminated for failure to meet rising production standards. 
At the same time, VBA continues to assure Congress that thousands of 
new hires are helping to reduce the backlog. However, the agency 
refuses to answer questions about the large number of probationary 
employees (including many OIF/OEF veterans) who are being terminated 
during their probationary periods for low production, before they 
receive adequate training to master basic proficiency.
    Use of State Employees at ROs: Last year, Texas Governor Perry 
launched an initiative to fund two news claims processing assistance 
teams through the Texas Veterans Commission (TVC) to ``work closely 
with the VA in all areas of the claims process to reduce the backlog'' 
in the Houston and Waco ROs. While the Governor's goal of expediting 
VBA claims processing is laudable, he proceeded in a manner that could 
lead to greater errors and delays, and unfair treatment of some 
veterans. More specifically, these projects were initiated without any 
input from veterans' groups or front line employees or their 
representatives. Neither TVC nor VBA has shared copies of the 
interagency agreements that define the scope of this project. AFGE 
shares the concerns of veterans' groups that inadequately trained state 
employees, who may be operating under a conflict of interest, are 
unduly interfering with the outcome of the claims process and case 
priority setting.
    In closing, AFGE thanks the Subcommittee for the opportunity to 
share its views on implementation of P.L. 110-389, and hopes that VBA 
will return to an era of greater labor-management cooperation that can 
improve the timeliness and accuracy of claims processing. Thank you.

                                 
           Prepared Statement of Bradley G. Mayes, Director,
          Compensation and Pension Service, Veterans Benefits
          Administration, U.S. Department of Veterans Affairs
    Chairman Hall and Subcommittee Members, thank you for providing me 
with this opportunity to address the progress made by the Department of 
Veterans Affairs (VA) towards implementing the provisions of Public Law 
110-389, the Veterans' Benefits Improvement Act of 2008. Both VA and 
the Congress are acutely aware of the enormous challenges we face in 
improving and expediting our claims process. We are grateful for your 
input and for the opportunity to evaluate pilot programs to see if they 
help us meet our end goal, of serving the Veterans who have served us.
    I regret that some of the reports required by Public Law 110-389 
are overdue, and I would like to share the reasons for these delays. 
Because of the importance of these issues, we are proceeding 
deliberately on these often-complex matters. In some cases the need to 
obtain outside expertise, and to duly consider the advice obtained, has 
had to come at the expense of speed. Let me discuss each relevant 
section and explain how we have addressed it.

Sec. 101--Regulation on Contents of Notice to be Provided Claimants 
        Regarding Substantiation of Claim

    Under this section, Congress required the Secretary to prescribe in 
regulations the contents of the notice to be provided to claimants for 
VA benefits pursuant to 38 U.S.C. 5103. The amended regulation must: 
(1) specify the different content for notices based on whether the 
claim is original, a claim to reopen a prior decision, or a claim for 
increased benefits; (2) provide that the content of such notices be 
appropriate to the type of benefit or service sought under the claim; 
and (3) specify for each type of claim the general information and 
evidence required to substantiate the basic elements of the claim type.
    In order to comply with this requirement, VA developed appropriate 
regulation language and published it as a proposed rulemaking in the 
Federal Register on December 11, 2009. The period for public comment 
ends on February 9, 2010. At the close of the comment period, we will 
review the comments and consider whether any revisions to the proposed 
regulation are warranted. Following that, a final regulation will be 
published in the Federal Register.

Sec. 104--Report on Causes for Variance in Compensation Payments

    Under this section, Congress required the Secretary to report on 
efforts to address perceived patterns of nationwide variance in 
disability compensation payments provided to Veterans. The report's 
content was to include three elements: (1) a description of efforts 
jointly undertaken by the Veterans Benefits Administration (VBA) and 
the Veterans Health Administration (VHA), including contract 
clinicians, to improve the quality of medical examinations provided to 
Veterans seeking disability compensation; (2) an assessment of current 
VBA personnel adequacy and requirements for claims adjudication; and 
(3) a description of any differences in disability claims adjudication 
outcomes for various populations of Veterans. Separate reports for each 
of the three elements have been completed and are undergoing final 
administrative review prior to submission. I sincerely apologize for 
the delay in complying with the requirements of this section of the 
law.
    Addressing the first element involved an internal review of actions 
taken to improve the Compensation and Pension Examination Program 
(CPEP). Addressing the second and third elements involved contracting 
with the Institute for Defense Analyses (IDA) for relevant studies. The 
cost for these studies amounted to $1.7 million. I look forward to 
sharing the full contents of these reports with you soon.

Sec. 213--Report on Compensation for Veterans' Earning Capacity Loss 
        and Quality of Life Loss and on Long Term Transition Payments 
        for Disability Rehabilitation

    Under this section, Congress required the Secretary to provide a 
report on his findings as a result of studies of: (1) the appropriate 
levels of disability compensation for loss in earning capacity and loss 
of quality of life as a result of service-connected disability; and (2) 
the feasibility of providing and appropriate levels of long-term 
transitional benefits for Veterans separated from the Armed Forces due 
to disability while they undergo rehabilitation. This report has been 
provided to Congress. The report is based on the findings of Economic 
Systems, Inc. (EconSys), which was contracted by VA to study these 
areas of Congressional concern. VA previously provided testimony on the 
EconSys study during a DAMA Subcommittee hearing on July 23, 2009. 
Those views are contained in VA's prepared statement and testimony 
presented at that time.

Sec. 221--Pilot Programs on Expedited Claims and Checklists

    Under this section, Congress required the Secretary to conduct 
pilot programs to evaluate expedited treatment of fully developed 
claims (FDC) and the value of providing checklists to Veterans 
submitting claims. The FDC pilot is designed to reduce claims 
processing to 90 days when the Veteran claimant has provided a signed 
certification form stating that ``no additional information or evidence 
is available or needs to be submitted in order for the claim to be 
adjudicated.'' The checklist project is designed to encourage more 
complete and timelier submission of evidence from Veteran claimants as 
an additional means to reduce claims processing time. VA contracted 
with the Center for Naval Analyses (CNA) to review and evaluate the 
effectiveness of both pilot programs at a cost of $1.5 million.
    For the FDC pilot, VA developed methods for implementation, which 
include providing Veterans with a certification form and tracking the 
progress of the FDC claims involved. Regional offices at Boise, Boston, 
Chicago, Columbia, Denver, Manchester, Milwaukee, Montgomery, Portland, 
and Providence were selected to conduct the pilot. In addition, VA 
notified all regional offices of the pilot through a Fast Letter 
released in December 2008, which explained the implementation 
procedures. The CNA study of the pilot involved field visits and will 
focus on claims filed between December 2008 and December 2009. The 
study will analyze whether the 90-day claims processing time is 
feasible and, if not, will identify those specific barriers to swift 
adjudication that are most difficult to overcome. In August 2009, CNA 
produced its Interim Evaluation of Fully Developed Claims Pilot 
Program, which has been provided to Congress. CNA noted that, although 
preliminary in nature, the study thus far indicates that expediting the 
processing of FDC claims results in faster processing time for such 
claims and does not negatively impact the processing of non-FDC claims. 
A final CNA evaluation report will be provided to Congress at the 
conclusion of the pilot program. The report is due on June 7, 2010, and 
the data analysis is on schedule.
    The checklist pilot is designed to alleviate potential confusion 
that Veterans may experience with the detailed notification letters 
that VA is obligated by law to provide when a disability claim is 
received. The checklist is intended to summarize the information and 
evidence required to substantiate the claim in an easy-to-read format. 
The pilot consists of two phases. Phase I involves original claims 
filed between December 2008 and December 2009, and Phase II involves 
reopened claims and claims for increased disability filed between 
December 2008 and December 2011. Regional offices at Boise, Cleveland, 
Louisville, and Waco were chosen to conduct the pilot. In December 2008 
VA notified all regional offices of the pilot through a Fast Letter, 
which explained the implementation procedures. The CNA study is 
applying quantitative and qualitative analytical methods and will 
compare processing timeliness of claims using the checklists to claims 
without it. In August 2009, CNA produced its First Interim Evaluation 
of Individual Claimant Checklist Pilot Program, which has been provided 
to Congress. CNA noted that its preliminary evaluation was incomplete 
due to receiving data only on closed claims, but not pending claims, 
and cautioned against drawing any conclusions on the effectiveness of 
the pilot at this time. A second interim CNA report is due on September 
10, 2011, and is on schedule. The due date for the final CNA evaluation 
report to be provided to Congress is June 6, 2012.

Sec. 222--Office of Survivors Assistance

    This section requires the Secretary to establish an Office of 
Survivors Assistance to serve as a resource regarding all benefits and 
services related to survivors and dependents of deceased Veterans and 
deceased servicemembers.
    The Office was established in December 2008, was provided the 
necessary resources to carry out its responsibilities, and by February 
2009 was fully staffed and operational. As part of the Secretary's 
Executive Leadership Board and the VA Strategic Communications Group, 
the Office has been able to begin fulfilling its role as a primary 
advisor to the Secretary on all matters related to the policies, 
programs, legislative issues, and other initiatives affecting 
survivors.
    In the past year the Office has been directly involved in 
advocating survivor issues to shareholders both internal and external 
to VA. The Office was a key driver in the addition of the term 
``survivors'' to the title of the informational 2009 Federal Benefits 
for Veterans, Dependents and Survivors book. Along with this change the 
Office also spearheaded updates to the benefits book by clarifying the 
language regarding bereavement counseling for survivors; this change 
will ultimately make counseling more accessible for all survivors. The 
Office also established multiple partnerships with DoD agencies and 
Veteran Service Organizations to explore ways to ease the transition of 
survivors into the VA system. The Office also created and maintains a 
website to help survivors navigate through the survivor resources that 
may be available to them. The Office will continue to monitor policy 
and legislative issues as well as pursue outreach to survivors to 
ensure that survivor issues are fully understood and addressed at the 
appropriate level.

Sec. 224--Independent Assessment of Quality Assurance Program

    This section amends 38 U.S.C. 7731, which requires the Secretary to 
carry out a quality assurance program within VBA that meets ``generally 
applicable governmental standards for independence and internal 
controls for the performance of quality reviews of Government 
performance and results.'' As amended, this statute now requires VA to 
``enter into a contract with an independent third-party entity to 
conduct, during the three-year period beginning on the date of the 
enactment of the Veterans' Benefits Improvement Act of 2008, an 
assessment of the quality assurance program.'' This assessment is 
required to evaluate the following: (1) the quality and accuracy of the 
work of VBA employees, using a statistically valid sample of such 
employees and a statistically valid sample of such work; (2) the 
performance of each VBA regional office; (3) the accuracy of disability 
ratings assigned under the Rating Schedule; (4) the consistency of 
disability ratings among VBA regional offices based on a sample of 
specific disabilities; and (5) the performance of VBA employees and 
managers.
    VA is also required to ``retain, monitor, and store,'' under a 
demographic baseline, the following data for each disability claim 
submitted to VA: (1) the state in which the claimant resided when the 
claim was submitted, and where such claimant currently resides; (2) the 
decision with respect to the claim and each issue claimed; and (3) the 
regional office and individual VA employee responsible for rating the 
claim.
    By October 2011, VBA is required to submit a report to Congress 
that contains the results and findings of the three-year independent 
assessment. This assessment is currently on track. VA awarded a $1.3 
million contract to IDA to review: (1) the performance of each regional 
office; (2) accuracy of disability ratings assigned; (3) consistency of 
disability ratings among regional offices; and (4) implications of 
quantitative assessment of the performance of VBA employees and 
managers. VA received a progress briefing from IDA in December 2009. 
The briefing confirmed that the final evaluation provided by IDA will 
address accuracy of VBA employee work and will include a sampling 
methodology that will produce statistically valid results.
    IDA established certain benchmarks in their progress briefing. 
These include outlining certain objectives, comparables, and 
preliminary findings. IDA's objectives are to survey quality assurance 
programs used by other organizations with similar tasks, while looking 
for possible technology transfers appropriate for VA. The comparables 
currently under consideration are: (1) Social Security Disability 
Benefit Program; (2) Supplemental Nutrition Assistance Food Stamp 
Program; (3) United Kingdom Service Personnel and Veterans 
Administration; (4) U.S. Patent and Trademark Office; and (5) CMO (a 
health care administration firm). IDA's preliminary findings are that 
there is no ``gold standard'' quality assurance program in other 
agencies and that ``general'' quality assurance ``best practices'' may 
be the most valuable.
    According to IDA's first progress briefing, its planned path 
forward will focus in part on certain research questions. Those 
questions will seek insight into: (1) how best to utilize VBA's current 
accuracy reviews and how to handle inconsistencies in such reviews; (2) 
whether expanded rating reliability studies can evaluate the accuracy 
of certain disability ratings; and (3) what measures of consistency 
across regional offices reveal about accuracy.
    VBA expects, according to IDA's initial progress briefing, to 
receive initial findings and recommendations in the summer of FY 2010. 
VBA looks forward to receiving the final report required under section 
224 and reporting such findings to Congress. We stand ready to 
objectively consider all recommendations of the final report and are 
ready to collaborate with stakeholders in order to improve VBA programs 
where possible.

    Sec. 225--Certification and Training of VBA Employees Responsible 
for Claims Processing

    This section added 38 U.S.C. 7732A, which requires VA employee 
certification. Under this section, Congress required the Secretary to 
develop and administer a certification examination for appropriate 
employees and managers who are responsible for processing disability 
claims. In response, VA contracted with the Human Resources Research 
Organization (HumRRO) to assist with development and testing of a 
certification examination for supervisory VSRs (SVSRs) and DROs that 
would establish them as proficient in their work assignments. Contract 
costs were $313,380 for development of the SVSR examination and 
$268,291 for the DRO examination.
    For the SVSR certification examination, HumRRO utilized information 
from VA subject matter experts and generated a detailed task analysis 
of the position. This included elements of the knowledge, skills, and 
abilities required for successful job performance. A test instrument 
database was then developed and a content validity study conducted. A 
pilot test followed in November 2009, which involved 114 VA regional 
office employees from around the country and led to completion of an 
online secure test instrument. HumRRO then conducted an operational 
field test on January 13, 2010, involving 102 regional office 
employees, which, when scoring is completed, will provide test takers 
with individualized report cards. This will serve as a model for 
administration of future SVSR certification examinations.
    Development of the DRO certification examination instrument was 
delayed due to changes in the scope of the test that required contract 
modifications. Development continues with deployment anticipated during 
June 2010.

    Sec. 226--Study of Performance Measures for Claims Adjudicators
    Under this section, Congress required the Secretary to initiate a 
study of the effectiveness of the employee work credit system and work 
management system to evaluate more effective means of improving 
disability claims processing performance. VA contracted with CNA to 
perform this study at a cost of $600,000. The study was conducted and 
produced Qualitative Analysis of VBA Employee Work Credit and Work 
Management Systems in November 2009, which will soon be transmitted to 
Congress. Again, I sincerely apologize for the delay in compliance with 
the requirements of the law.
    CNA noted that the study results were based on qualitative data 
obtained from interviews of claims adjudicating personnel at six VA 
regional offices. CNA also looked at the current VA work management 
system, referred to as the Claims Process Improvement (CPI) model, 
which emphasizes employee task specialization.
    The CNA study perspective has value, but VA is already engaged in 
multiple initiatives closely aligned with the CNA recommendations. 
Among them is a revision of current VSR performance standards to place 
less emphasis on tasks for individual production and more emphasis on 
tasks that move a claim through its life cycle to final resolution and 
promulgation. This revision also proposes to increase expected 
individual employee output quality to the overall national quality 
target level for a journeyman VSR. Additionally, system modifications 
are being pursued that will allow for the automatic capture of work 
credits as a claim moves through the processing stages. VA has also 
engaged Booz, Allen, and Hamilton to assist with evaluating the current 
claims process utilizing lean six sigma analysis techniques. These 
techniques are being applied as part of a pilot project conducted at 
our Little Rock VA Regional Office. I am pleased that some of your 
staff members have taken the time to visit the pilot site and view 
first-hand what is taking place.

Sec. 227--Review and Enhancement of Use of Information Technology in 
        VBA

    Under this section, Congress required VA to conduct a review of 
VBA's use of information technology in disability claims processing and 
develop a comprehensive plan for the use of such technology in 
processing claims so as to reduce subjectivity, avoidable remands, and 
regional office variances in disability ratings for specific 
disabilities.
    In 2009, VA performed a review of VBA's use of Information 
Technology in C&P claims processing. The findings from the review were 
made a part of a comprehensive System Architecture Plan (SAP). The SAP 
included an analysis of VBA's Paperless Delivery of Veterans Benefits 
Initiative (Paperless Initiative), which was VA's first attempt at 
creating a paperless claims processing system. The SAP findings were 
consistent with VBA's own internal findings: despite the progress made 
under the Paperless Initiative, VBA's benefits claim processing 
continued to rely on an ineffective and costly paper-based system that 
was preventing VA from fully meeting its strategic goal of timely 
delivery of benefits to Veterans.
    VA concluded it needed to focus on C&P claims processing, moving 
away from a broader approach incorporating all VBA services, and to 
develop an effective, stable, and scalable technology infrastructure to 
support optimized business processes.
    This approach is the Veteran's Benefits Management System (VBMS) 
Initiative, a cornerstone of VA's long-term, comprehensive plan to 
achieve timely provision of benefits to Veterans. It is a holistic 
approach, integrating business transformation and a 21st century 
paperless claims processing system. This approach is supported by a 
Business Transformation Lab which serves to converge process re-
engineering and technology innovation, ensuring optimized best 
practices are developed and tested before being deployed throughout VA.
    As part of the business transformation, VA initiated a Compensation 
Claims Processing Pilot designed to restructure and streamline the 
current paper-based process through applying lean six sigma tools. This 
pilot will focus on reducing cycle time and improving the quality of 
overall end-to-end disability claims processing by driving cultural 
transformation and beneficial change in business processes.
    As part of the technology innovation, VA will use commercial-off-
the-shelf (COTS) technologies featuring a stable, scalable 
infrastructure that fully supports the business vision and will help 
ensure our best business value. The COTS technologies in large part are 
an extension of the state-of-the-art system being deployed as part of 
the long-term solution for the delivery of the New GI Bill benefits. 
The specific technologies include: a rules engine, a managed process 
flow tool, web-based data entry, report generation tools, data 
validation and calculation tools, and attribute-based security access 
tools. These will be implemented using an incremental development model 
based on a service- oriented architecture.
    Furthermore, the VBMS Initiative is aligned with ongoing VA 
programs/efforts, such as Veteran's Relationship Management (VRM), 
enhancements in rules-based processing, and other external initiatives. 
Particularly, VRM will help provide on-demand access to comprehensive 
VA services and benefits in a consistent, user-centric manner through a 
multi-channel customer relationship management (CRM) approach. VRM is 
designed to improve the speed, accuracy, and efficiency in which 
information is exchanged between Veterans and VA, regardless of the 
communications method (phone, web, email, or social media). Its focus 
will include modernizing voice telephony, unifying public contact 
representative desktops, implementing Identity and Access Management 
(IAM), developing cross-VA knowledge management systems, implementing 
CRM systems, and integrating self-service capabilities with multiple 
communication channels. A primary feature of VRM will be on-line access 
to services for Veterans that will promote self-service and provide 
access to personalized claims information.
    The VBMS Initiative meaningfully addresses the objectives of 
section 227 of the Act by:

          Reducing the average days to complete (ADC) for C&P 
        claims--ADC shall ultimately be reduced to the strategic target 
        of 125 days (from 161 days at the end of 2009).
          Tracking progress on established milestones/
        deliverables on the VBMS Initiative Project Schedule.
          Increasing Veterans' access to VBA services and 
        claims status through additional and improved web-based 
        information processing.
          Improving workflow management in areas such as claims 
        sorting, fast-tracked binning, and dynamic load balancing with 
        geographic flexibility.
          Reducing avoidable remands caused by delayed 
        association of paper evidence to the claim under consideration 
        by the decision maker.

    Improving reliability and security over the acquisition and 
movement of Veterans' data throughout the claims process. The Virtual 
Lifetime Electronic Record (VLER) will streamline the process of 
disability determinations by making the information more accessible. 
The ultimate goal of VLER is to include the essential administrative 
data needed for benefits determinations. The first phase of VLER 
development between VA and DoD will be to create interoperability and 
exchange important electronic health information between our systems 
and the private sector through the protocols and standards of the 
Nationwide Health Information Network (NHIN). This network will 
exchange secure and authorized information that can ultimately produce 
a comprehensive record for adjudicators. This capability will enable 
the electronic compilation of relevant health information from multiple 
sources, thereby reducing the information-gathering phase and relieving 
the burden on Veterans, servicemembers and their families to provide 
this information. The VLER program is commencing with the first pilot 
nearing successful completion during the second quarter of FY 2010. The 
Department looks forward to returning with periodic updates on the 
phased implementation of this important program.

    Sec. 228--Study and Report on Improving Access to Medical Advice

    Under this section, Congress required the Secretary to evaluate the 
feasibility and advisability of adding methods to improve 
communications between VHA and VBA as a means to provide regional 
office rating personnel with greater access to medical information and 
opinions. VA provided a report to Congress on this issue in April 2009 
that was generated internally without additional cost. The report 
reviewed previous studies conducted on medical aspects of the 
disability claims process and outlined the resulting improvements 
initiated by VA. Such improvements include the CPEP collaboration 
between VBA and VHA and establishment of a VHA liaison in each regional 
office. The report also included an assessment of current methods and 
resources utilized by rating personnel to obtain competent medical 
information and opinions for claims adjudication purposes and concluded 
that existing procedures meet the needs of our rating personnel.
    As explained in the report, the disability claims adjudication 
process currently makes effective use of VHA and contract examiners to 
provide medical diagnoses and an evaluation of the Veteran's current 
level of disability. The other useful function of examiners is to 
provide opinions related to the various medical disability scenarios 
faced by rating personnel. These include: (1) reconciling different 
diagnoses; (2) clarifying the relationship between two conditions; (3) 
describing the extent of functional impairment; (4) providing etiology 
and nexus opinions; (5) determining whether a service-connected 
condition has aggravated a non-service-connected condition; (6) 
evaluating the value and credibility of submitted medical evidence; and 
(7) describing the extent to which service-connected disabilities 
affect the Veteran's ability to perform physical and non-physical tasks 
in order for rating personnel to determine the impact on earnings 
potential.
    The VHA medical services described above are generally sufficient 
to provide VBA rating personnel with ample information to evaluate and 
rate disability claims. However, if specialized medical advice is 
required to resolve a claim, procedures are in place to procure it from 
VHA or private medical specialists. VA has therefore concluded that 
additional medical assistance for rating personnel, such as placing 
medical doctors in regional offices, is unnecessary and will not 
improve the timeliness of claims processing.
    This concludes my testimony. I would be happy to address any 
questions or comments from Chairman Hall or the Subcommittee Members.

                                 
            Prepared Statement of Thomas Bandzul, Associate
                   Counsel, Veterans for Common Sense
    Chairman Hall, Ranking Member Lamborn and members of the 
Subcommittee, I thank you for inviting Veterans for Common Sense (VCS) 
to express our concerns relating to the implementation of the Veterans' 
Benefits Improvement Act of 2008, Public Law 110-389.
    Our comments provide the Subcommittee with a broad review of 
portions of this law as well as a list of suggestions to improve the 
delivery of services and benefits for our veterans.
    VCS remains concerned that the Department of Veterans Affairs (VA) 
fails to be the strong advocate for their needs, especially on the 
subject of disability compensation claims.
    When there is a failure to implement new laws, then it becomes a 
true travesty with a high level of frustration among veterans and their 
families. A serious problems not generally noticed by the public or 
press.
    The Veterans' Benefits Improvement Act of 2008 addressed six 
specific areas of concern relating to the needs of veterans not 
previously addressed by VA or by existing laws. The six areas include: 
Compensation and Pension Matters, Modernization of VA Disability 
Compensation System, Labor and Education Matters, Insurance Matters, 
Housing Matters, and Court Matters.
    The focus of our comments is limited to the sections dealing with 
Modernization of VA's Disability Compensation System. VCS offers our 
review and specific suggestions for improvement.
    The section of Modernization of VA Disability Compensation System 
under Benefit Matters requires VA to develop and implement a temporary 
disability rating system for veterans' claims. This change in VA's 
authority was prompted by the advocacy from veteran service 
organizations and veterans. We wanted, as a priority, to address VA's 
well-documented claims process we find to be lengthy, complex, 
cumbersome, and adversarial.
    The number of new disability compensation benefit requests has 
predictably grown to more than one million per year. VA's error rate is 
between 20 percent and 40 percent. And VA's process takes, on average, 
between five and six months to produce an initial decision.
    The goal behind assigning a temporary rating to specific, pre-
screened claims is to reduce the amount of time to process a claim and 
alleviate the enormous pressure on VA's overwhelmed adjudication 
system.
    Sadly, after more than one year, VA has failed to enact a temporary 
rating system. As an adverse consequence caused by VA, the time to 
process a claim is now 161 days, and VA expects the amount of time to 
increase to 190 or longer during 2010.
    Some VA regional offices are reporting increased error rates, 
according to VA's Office of the Inspector General (OIG) investigations.
    VCS remains deeply troubled VA is not responding to the concerns of 
VSOs, veterans, and Congress to remedy a serious problem even after 
Congress ordered changes. In our view, VA appears to have a strong and 
seemingly deliberate resolve to ignore the crisis and the Congressional 
mandate. VA's actions reveal a disturbing culture of ambivalence, 
adversity, and hostility toward veterans and the law.
    The new 2008 law also requires reports with specific timelines. 
VA's failure to comply with these sections of a law is impudent and 
totally unacceptable. When asked about the lack of compliance with 
this, and other laws, VA leaders appearing before Congress appeared 
arrogant in their collective response. Their actions reveal their 
belief the rule of law only applies to those laws VA is willing to 
address, and the other laws can be ignored at their sole and unlimited 
discretion, without any sanction from Congress or the courts.
    VA leaders and staff must be held individually and collectively 
accountable as would any citizen or agency for their actions and/or 
inaction in the face of Congressional mandates. In this instance, and 
as has been the case for decades, there has been no action taken to 
hold any person or agency responsible for the problems veterans and 
families face.
    The use of a temporary disability rating for a claim could be a 
very real solution for the veterans seeking help. Our former 
servicemembers with medical conditions severe enough to warrant a 
discharge from military service should not have to wait months, and 
some cases years, to be awarded their earned benefits.
    As of June 2009, VA medical professionals have diagnosed more than 
134,000 Iraq and Afghanistan war veterans with Post Traumatic Stress 
Disorder (PTSD). However, VA has only approved half of the veterans' 
disability compensation claims - an outrageous outcome in demand of 
immediate action by Congress and VA.
    This law was specifically designed to address this group, as well 
as other similarly affected cases or classes of people, whom have a 
service connected illness or injury with a pending request for 
benefits. The application of a temporary system to the benefit 
adjudication process is not intended to circumvent the existing system 
of verification used in determining qualification for the programs 
within the VA. It was anticipated this change would allow a set of 
circumstances of obvious qualification to be used as a urgently needed 
substantive substitute for the current lengthy, detailed, step-by-step, 
task oriented, paper-centric, adversarial, and overly burdensome phases 
of evidentiary development for veterans' PTSD claims.
    VCS strongly encourages Congress to increase oversight of this law. 
We ask Congress to consider possible sanctions for VA leaders who fail 
to comply with the law.
    The changes mandated by the enactment of a bill, such as this one, 
must have closer scrutiny until such time as the VA can be trusted to 
act on its own in timely and forthright manner.
    Given VA's past and present history of excessive delays and poor 
benefits management, we believe there must be an ongoing and vigilant 
posture by Congress until such time as the claims process is 
restructured or the number of claims are reduced and processed in a 
expeditious and accurate manner.
    Again, VCS thanks to Chairman Hall and Ranking Member Lamborn for 
your continued leadership on this issue and your strong dedication to 
our veterans and their families.

                                 
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