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



 
                  QUALITY VS. QUANTITY: EXAMINING THE
                   VETERANS BENEFITS ADMINISTRATION'S
                        EMPLOYEE WORK CREDIT AND
                           MANAGEMENT SYSTEMS

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

                                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

                               __________

                              MAY 6, 2010

                               __________

                           Serial No. 111-77

                               __________

       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

                               __________

                              May 6, 2010

                                                                   Page
Quality vs. Quantity: Examining the Veterans Benefits 
  Administration's 
  Employee Work Credit and Management Systems....................     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    30
Hon. Doug Lamborn, Ranking Republican Member.....................     3
    Prepared statement of Congressman Lamborn....................    31

                               WITNESSES

U.S. Department of Veterans Affairs, Diana M. Rubens, Associate 
  Deputy Under Secretary for Field Operations, Veterans Benefits 
  Administration.................................................    21
    Prepared statement of Ms. Rubens.............................    53

                                 ______

American Federation of Government Employees (AFL-CIO), and AFGE 
  National Veterans Affairs Council, Jimmy F. Sims, Jr., Shop 
  Steward, Local 1738, and Rating Veterans Service 
  Representative, Winston-Salem, NC, Regional Office, Veterans 
  Benefits Administration........................................    14
    Prepared statement of Mr. Sims...............................    51
American Legion, Ian C. de Planque, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission..........................    12
    Prepared statement of Mr. de Planque.........................    48
CNA, Institute for Public Research, Eric Christensen, Managing 
  Director of Health Research Policy.............................     3
    Prepared statement of Mr. Christensen........................    31
Disabled American Veterans, John L. Wilson, Assistant National 
  Legislative Director...........................................    10
    Prepared statement of Mr. Wilson.............................    45
National Organization of Veterans' Advocates, Inc., Richard Paul 
  Cohen, Executive Director......................................     7
    Prepared statement of Mr. Cohen..............................    38
National Veterans Legal Services Program, Ronald B. Abrams, Joint 
  Executive Director.............................................     8
    Prepared statement of Mr. Abrams.............................    40
Veterans of Foreign Wars of the United States, James D. Wear, 
  Assistant Director, National Veterans Service..................     9
    Prepared statement of Mr. Wear...............................    43


                  QUALITY VS. QUANTITY: EXAMINING THE
                   VETERANS BENEFITS ADMINISTRATION'S
                        EMPLOYEE WORK CREDIT AND
                           MANAGEMENT SYSTEMS

                              ----------                              


                         THURSDAY, MAY 6, 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 2:00 p.m., in 
Room 334, Cannon House Office Building, Hon. John J. Hall 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Hall, Donnelly, and Lamborn.

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Good afternoon. The House Committee on Veterans' 
Affairs, Subcommittee on Disability Assistance and Memorial 
Affairs, will come to order for our hearing.
    Quality vs. Quantity: Examining the Veterans Benefits 
Administration's (VBA's) Employee Work Credit and Management 
Systems is the theme today, and I would start by asking us all 
to rise for the pledge of allegiance. Flags are at both ends of 
the room.
    [Pledge of Allegiance.]
    Thank you, and welcome to today's hearing that is entitled, 
``Quality vs. Quantity: Examining the Veterans Benefits 
Administration's Work Credit and Management Systems.''
    The purpose is to examine how VBA's employee work credit 
system and its claims processing improvement work management 
system model may contribute to diminished quality, 
accountability, and accuracy in compensation and pension claims 
processing.
    Today's hearing continues this Subcommittee's efforts to 
analyze various elements of the compensation and pension claims 
process over the 111th Congress and marks our fifth oversight 
examination this year focused on ensuring that our veterans and 
survivors properly receive their benefits. It is our collective 
quest to vanquish VBA's backlog of claims and appeals, which 
currently exceeds 1 million.
    We also intended for today's hearing to provide an 
opportunity to examine a Congressionally mandated report on the 
VBA's work and management systems outlined in legislation that 
was developed by me and other Members of this Committee during 
the 110th Congress, the Veterans Disability Benefits Claims 
Modernization Act of 2008, H.R. 5892, codified in Public Law 
110-389. The goal of this legislation, among other things, was 
to provide VBA with a valuable road map to assess and improve 
its work credit and management systems to produce better claims 
outcomes for our veterans.
    The deadline for this report was October 31, 2009, and I 
note that we have yet to receive it. However, the VA has 
authorized an independent research contractor that was retained 
to complete this report, the Center for Naval Analysis (CNA), 
to testify before us today concerning a summary of the report's 
findings and recommendations, the Cliff Notes version of the 
report, I guess. The U.S. Department of Veterans Affairs (VA) 
advised the Subcommittee that the report is still under review 
by the agency and Office of Management and Budget (OMB) and 
should be submitted to Congress soon.
    We look forward to hearing today when the report will be 
ready and submitted to Congress and to getting a better 
understanding of why it has not yet been delivered.
    Since 2007, the VBA has added over 7,100 claims processing 
personnel; and Congress has funded these requests. Yet the 
backlog still climbs. This is not to say that adding additional 
workforce has not been beneficial. Had Congress not provided 
these new claims processors, the backlog might be much worse 
than it is today, given the exponential growth in claims 
receipts.
    As the VA itself acknowledged during Chairman Filner's 
Claims Roundtable in March, this is a sign of a broken system. 
The mounting claims backlog is a symptom that cannot be 
addressed until the VA refocuses itself on adjudicating claims 
correctly the first time. We need to continue to look at the 
system with fresh eyes and determine how a new outlook can help 
VA fix its claims processing system and get the backlog under 
control.
    In convening today's hearing, the Subcommittee seeks to 
further explore how the VBA work credit incentives and the 
flawed Claims Process Improvement (CPI) Model might be 
contributing to delays and errors in the claims process. It is 
my hope that we will--in continuing to examine this issue--be 
able to help veterans secure the benefits they deserve and 
prevent them from suffering further injury as a result of 
delays in receiving disability benefits.
    That is why I want to revisit the issue of partial, 
provisional, and temporary ratings. I believe that if the VA 
increases the use of this authority and also awards a credit to 
claims processing personnel who use it, it will go a long way 
in making sure that more veterans can begin to receive their 
benefits more promptly. I would like the VA to address this 
issue when it testifies.
    Today, we will also hear from veterans service 
organizations (VSOs) and advocacy groups who will explain their 
vision for how the VA should address this problem. From them, I 
know we can get a better understanding of the underlying issues 
that led to such an unmanageable backlog at VBA, as well as if 
they believe that the efforts of the VA are in the right 
direction regarding this issue. Specifically, I would like to 
know if the VSOs and advocacy groups agree with VBA's assertion 
that it emphasizes quality on a par with quantity and 
timeliness.
    I look forward to your testimony and insightful comments 
and questions from my colleagues, and I would recognize Ranking 
Member Lamborn for his opening statement.
    [The prepared statement of Chairman Hall appears on p. 30.]

             OPENING STATEMENT OF HON. DOUG LAMBORN

    Mr. Lamborn. Thank you, Mr. Chairman, and I look forward 
also to this afternoon's hearing on VA's work credit system.
    The purpose of this discussion is to ascertain whether 
proper performance measures are in place to effectively gauge 
both efficiency and accuracy of work. A system that rewards 
work credits based on production alone undermines quality; and, 
as we all know, poor quality work has ramifications throughout 
the entire system that has contributed to the backlog of 
claims. At the same time, there is also clearly a need for VA 
to maintain a high level of efficiency so that veterans can be 
receiving compensation in a timely manner.
    Where does the proper balance lie? True quality means being 
effective and efficient. The key to achieving this balance lies 
in how employees are rewarded for the work they accomplish. For 
too long, it appears that VA has placed too high an incentive 
on production, but it is simply counterproductive to strive for 
high numbers if the work has to be revisited at a later time. 
Yet, it would be equally detrimental to veterans if there was 
an overemphasis on quality and the average handle time was off 
the charts.
    This Subcommittee passed legislation during the past 
session to obtain a study of the effectiveness of the VA's 
employee work credit and work management system. From this, we 
hope VA will be able to develop a more effective means of 
improving its claims processing performance. I look forward to 
working with my colleagues and Department officials to delve 
into this issue and hopefully identify how the work credit 
system can help incentivize the proper balance between quality 
and quantity.
    I want to thank the witnesses in advance for their 
participation and their testimony, and I look forward to our 
discussion today.
    Mr. Chairman, I yield back.
    [The prepared statement of Congressman Lamborn appears on 
p. 31.]
    Mr. Hall. We just had a vote call, but I would like to move 
ahead with our first witness, and then we will have to break so 
we can go across the street and vote and ask the rest of you to 
be patient, as you always are.
    So we will first welcome Eric Christensen on our first 
panel, the Managing Director, Institute for Public Research, 
CNA.
    Your full statement is entered in the record, sir and you 
are now recognized.

  STATEMENT OF ERIC CHRISTENSEN, MANAGING DIRECTOR OF HEALTH 
      RESEARCH POLICY, INSTITUTE FOR PUBLIC RESEARCH, CNA

    Mr. Christensen. Thank you, Mr. Chairman, distinguished 
Members. I appreciate the opportunity to testify before you 
today on the subject of VBA's work credit and work management 
systems.
    As you said, I am Eric Christensen, Managing Director of 
Health Research and Policy at CNA. CNA is a non-profit firm 
that provides independent objective analysis to various 
government agencies.
    CNA conducted its analysis of the work credit and work 
measurement systems between March and September of 2009. We 
interviewed over 100 VBA employees at six regional offices 
(ROs) to understand the issues, complexities, and incentives 
associated with these systems. We note that VBA works in a 
challenging environment. The number of compensation claims 
submitted each year increased by 53 percent between fiscal 
years 1999 and 2008. At the same time, the complexity of claims 
has also increased.
    There are three principal concerns about the current 
employee work credit system: one, that it emphasizes quantity 
over quality; two, that production standards are not based on a 
careful analysis of the task performed; and, three, that work 
credits and production standards do not reflect changes in 
claim complexity and additional duties imposed by legislation.
    Our study confirmed that employees perceive that quantity 
is emphasized over quality, as well as confirmed the other two 
concerns.
    To address these concerns, we recommended that VBA redefine 
the work credits so that work credits account for claim 
characteristics that are correlated with the amount of work 
required. For example, accounting for the number of issues and 
types of medical conditions would likely be important to 
accurately reflect the work credits on a claim.
    Further, we recommended that VA consider two options or 
frameworks when redefining work credits. The first is to give 
work credits for only the following broad groups: one, 
initiating development; two, making a claim ready to rate; 
three, deciding an award; and, four, authorizing the award. 
This was the recommendation of a VA work group. At the time of 
our report, VA was preparing to pilot test this approach at 
multiple sites.
    The second option is to base work credits on a 
comprehensive, detailed list of all individual activities that 
employees perform.
    As for quality, we recommended that VA conduct more quality 
reviews to better communicate quality as a priority. Similarly, 
we recommended that, on internal quality reviews, VA consider 
deviations from official procedures for claiming work credits 
as errors rather than as comments. Further, we recommended that 
there would be work credit deductions for actions with errors.
    Turning to VBA's work management system, the concern is 
that quality and accountability are lacking, because many 
different people are involved in processing each claim under 
the Claims Process Improvement, or CPI, Model.
    Note that the CPI Model is not VBA's first effort to manage 
claims processing by dividing it into separate stages and 
passing a claim through a series of people. In the 1990s, VBA 
used a similar model called the unit model. In the late 1990s, 
there was an effort to address these challenges of the unit 
model. These challenges were lack of individual accountability 
and an emphasis on quantity over quality. The solution was a 
case management model in which each case was handled by one 
veterans service representative (VSR) and one rater. VBA used 
this model until it adopted the CPI model in response to 
concerns about problems with timeliness.
    At the time of our report, VBA was conducting a pilot study 
in the Little Rock regional office. The key element to this 
pilot is processing claims that contain predetermination, 
rating, and post-determination functions while maintaining the 
current specialization of VSRs under the CPI model. This model 
appears to have the potential to improve quality compared to 
the CPI model, especially if it creates a greater sense of 
accountability. Consequently, we recommended that VA waits to 
see the results of this pilot before investigating other 
alternatives to the CPI model.
    Thank you for allowing me to testify. I would be happy to 
answer any questions you may have.
    [The prepared statement of Mr. Christensen appears on p. 
31.]
    Mr. Hall. Thank you, Mr. Christensen.
    We will just ask you a couple of questions before we break 
for votes; and if we have any more, we will submit them to you 
in writing.
    But in surveying stakeholders concerning the VBA's employee 
work credit system, the central issues, as you noted, indicate 
that you are able to determine, first, that the system 
emphasizes quantity over quality, that production standards are 
not based on a careful analysis of the tasks performed, and 
that work credits and production standards do not reflect the 
changes in complexity of claims and in Congressional mandates. 
What would you recommend to address these issues?
    Mr. Christensen. As I mentioned, what we recommend--the 
issue is there are very broad categories with which credits are 
given. So, for example, a claim with zero to seven issues would 
receive the same work credits if it was one issue or seven. 
There is a difference in work credits if the claim has eight 
issues or more compared to something that has less than that. 
Those are relatively broad categories. We would recommend that 
narrower variations be given in work credits.
    We also recommend that work credits be contingent upon the 
type of medical condition. There is some variation of work 
credits, for example, if a veteran has post-traumatic stress 
disorder (PTSD), but, otherwise, there is really no recognition 
of type of medical condition. You speak with people at the VA 
and the people who rate the claims, obviously, a hearing case 
is much simpler and probably over credited compared to some 
other types of claims such as one with traumatic brain injury 
(TBI). So we think that considering those things in the work 
credits would be important.
    As I mentioned a couple of options, there are two really 
kind of philosophical approaches you can take for credits. One 
is giving a credit for each individual action that raters 
perform, and the other is basing credits more on broad 
categories of moving a claim past key milestones in the 
process. It is kind of a different philosophical approach to do 
so. There are advantages and disadvantages to each of those, 
but those are things that we recommend in terms of production.
    The other recommendations of quality are really to create 
signals to rating personnel that quality is important.
    Mr. Hall. Thank you.
    And can you give us any insight into why the VA has been 
unable to release the study which was done by CNA, which I 
believe you said was completed in September?
    Mr. Christensen. We completed it in September and delivered 
it to VBA per our contract. I cannot speak for VA in terms of 
why they have not provided it to you.
    Mr. Hall. Mr. Christensen, the last question I have is, 
there are two, as you said, seemingly opposite philosophies 
that may be able to be followed at the same time. The question 
is, in your opinion, is it possible to provide a partial work 
credit or a positive employee evaluation for a claims processor 
who begins the flow of compensation dollars to a veteran for an 
undisputed part of his or her claim while at the same time 
doing what many stakeholders, many veterans groups are 
suggesting, which is to not give the complete work credit until 
the appeals process or appeals time period has expired and the 
final resolution of the claim is done? So that I guess the 
question is, can you speed up the front end while at the same 
time holding up the back end to make sure that the quality is 
there?
    Mr. Christensen. That is not something we looked at 
specifically. Obviously, you can give work credits however the 
system is designed and chooses to do so. But that is not 
something we specifically study.
    Mr. Hall. Okay. Thank you very much, sir. We will send you 
some more questions in writing.
    For now, this Subcommittee will recess until after votes; 
and I ask the rest of your patience, please.
    [Recess.]
    Mr. Hall. The Subcommittee on Disability Assistance and 
Memorial Affairs will resume our hearing. Thank you all for 
your patience.
    We welcome our Panel 2: Richard Paul Cohen, Executive 
Director of National Organization of Veterans' Advocates 
(NOVA), Inc.; Mr. Ronald B. Abrams, Joint Executive Director of 
National Veterans Legal Service Programs (NVLSP); James D. 
Wear, Assistant Director, National Veterans Service, Veterans 
of Foreign Wars of the United States (VFW); John Wilson, the 
Assistant National Legislative Director of Disabled American 
Veterans (DAV); Ian C. de Planque, Deputy Director, Veterans 
Affairs and Rehabilitation Commission, the American Legion; and 
Jimmy F. Sims, Jr., Rating Veterans Service Representative 
(RVSR) from the Winston Salem Regional Office of the Veteran 
Benefits Administration and Shop Steward for Local 1738, on 
behalf of the American Federation of Government Employees 
(AFGE) .
    Gentlemen, thank you so much for waiting and for the 
testimony you are going to give and have given.
    You know the routine by now. Your full written statement is 
already made a part of the record, so you each will have 5 
minutes, starting with Mr. Cohen.

STATEMENTS OF RICHARD PAUL COHEN, EXECUTIVE DIRECTOR, NATIONAL 
 ORGANIZATION OF VETERANS' ADVOCATES, INC.; RONALD B. ABRAMS, 
  JOINT EXECUTIVE DIRECTOR, NATIONAL VETERANS LEGAL SERVICES 
 PROGRAM; JAMES D. WEAR, ASSISTANT DIRECTOR, NATIONAL VETERANS 
SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES; JOHN L. 
   WILSON, ASSISTANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED 
AMERICAN VETERANS; IAN C. DE PLANQUE, DEPUTY DIRECTOR, VETERANS 
  AFFAIRS AND REHABILITATION COMMISSION, AMERICAN LEGION; AND 
  JIMMY F. SIMS, JR., RATING VETERANS SERVICE REPRESENTATIVE, 
     WINSTON-SALEM, NC, REGIONAL OFFICE, VETERANS BENEFITS 
    ADMINISTRATION, AND SHOP STEWARD, LOCAL 1738, AMERICAN 
FEDERATION OF GOVERNMENT EMPLOYEES (AFL-CIO), AND AFGE NATIONAL 
                    VETERANS AFFAIRS COUNCIL

                STATEMENT OF RICHARD PAUL COHEN

    Mr. Cohen. Thank you, Chairman Hall, for allowing NOVA to 
submit its comments regarding the claims allocation process.
    It is no secret that we agree with you that the system is 
not working well. We have testified in great detail on other 
occasions about the backlogs, the errors in the ratings, and 
the hamster wheel phenomenon. There is a fundamental problem 
not with the individual employees in the trenches who want to 
do the right thing. There is a problem with the bureaucracy, 
with the organization.
    We all know that the VA has problems acting. A case in 
point, is Public Law 110-389, which required a report on the 
work credit system. The report is not out. The VA has not 
issued the required regulations on substitutions in the case 
where a veteran dies when the claim is pending. The new Agent 
Orange presumption regulations were not put out as proposed 
regulations until there was a lawsuit compelling it.
    The VA just is ineffective. It reminds us of trying to 
correct the course of the Titanic. There seems to be a 
disconnect between what the Secretary says, what the management 
says, and what is actually going on in the regional offices.
    A case in point is the testimony that you will hear later 
on from the VA stating that the VA has never emphasized 
production over quality. Yet, we had a 2005 report from the 
Office of Inspector General (OIG) showing that the work credit 
system did emphasize production over quality and inhibited the 
ability of VA employees to do quality decision-making. And, in 
fact, CNA just testified, and their written testimony says, 
that their research indicates that work credit system inhibits 
quality.
    So what the VA needs is a total course correction in terms 
of supervision, and in terms of management.
    We have a system where the VA claims to be looking for 
quality decision-making, yet they do not know what their actual 
error rate is. In their reports, the VA indicates an error rate 
around 80 percent. But if you do the math and figure out how 
many claims are denied, how many are abandoned, the remainder 
that go to the Board of Veterans' Appeals (BVA), and how many 
are confirmed by the BVA, you will find out that the error rate 
is probably as high as what they say their accuracy is. Their 
error rate is about 80 percent if you trace the cases to the 
BVA and then to the court. So what the VA needs to do is to 
develop a method for analyzing whether they are doing correct 
decisions. They need to get it right the first time.
    Congress' role is a watchdog. It can't micromanage the VA 
but has to encourage them to change the whole system. The pod 
approach--where a team takes credit for the end result--is the 
way to go, where the credit is not for productivity on an 
individual basis but is on reaching the correct decision by the 
pod, by the group. That would solve the problem.
    The other thing is that the VA is never going to get a 
handle on this backlog until they start looking at the crisis 
on a triage basis. What they need to do is look at those cases 
which are easy grants. The claim by a combat veteran who has a 
Purple Heart for benefits based on PTSD needs no further 
development. That should be a grant. Don't waste time on it. 
There are harder claims with harder medicine, and harder laws. 
Those, the VA should spend time on.
    They have not been effective in working claims like a true 
business, but that is what they need to do. They need to bring 
in business experts to help them do this and, as AFGE has said, 
true time and motion studies are needed to try to figure out 
how to save time on what VA's employees do.
    But the bottom line here is NOVA and the veterans who our 
members represent are not that interested in work credits. I 
know the employees are. I know the VA is. Everyone should be 
more interested in quality decision-making from the outset.
    Thank you.
    [The prepared statement of Mr. Cohen appears on p. 38.]
    Mr. Hall. Thank you, Mr. Cohen.
    Mr. Abrams.

                 STATEMENT OF RONALD B. ABRAMS

    Mr. Abrams. Thank you, Mr. Chairman.
    I would first like to say that when I listened to the 
earlier testimony I think that you should be cautioned that it 
is not a one-way street. Claims are filed, and people are 
represented. And when we get involved in a case, we try to file 
the claim as early as we can so a veteran can get the earliest 
possible effective date.
    But that doesn't mean we are going to let the VA adjudicate 
that claim in 30, 90, or even 180 days. Sometimes it takes us, 
with all the time that we have to spend on a case, 6 to 8 
months to get proper medical opinions; and the VA has to wait 
until we get that. So it is just not up to the VA to do things 
in a certain time.
    The advocates are also going to submit evidence, and we are 
going to take our time to get the right evidence. Therefore, if 
you have a system that stops the clock for the VA when an 
advocate says, look, we are going out and getting several 
medical opinions, that would be a good thing. It is not the 
VA's fault that we are taking our time, and that would 
encourage them to let us do that.
    As you know, veterans cannot shop where they are going to 
get their VA benefits. They are stuck with the VA. Other people 
who are shopping for televisions, for cars, if they don't like 
the quality of a certain brand can buy some other brand. Vets 
have to go to the VA. And I want to stress that proper 
attention by VA managers to protect the fairness of the process 
is counterintuitive to them because it affects the statistics 
upon which they are evaluated.
    For example, control of claims, checking to see where the 
claim is, slows managers and workers down. If they have to 
review unnecessarily delayed claims, it takes time and energy 
to do that. You take people off of production. Development, 
even Systematic Technical Accuracy Review (STAR) shows that is 
the biggest error; and, as a result of improper development, 
claims are just churned. You get on the hamster wheel, and we 
have talked about that over and over again.
    It takes time to carefully analyze a case and recognize all 
the important issues. As you know, the VA has been doing it 
wrong for many years. As a result, when a rater gets the case 
in the regional office, they have to review the entire file if 
they are going to do the right job, and they might have to 
correct errors all the way back 30, 40 years ago. This needs to 
be acknowledged and built into the work credit system.
    There is always tension between quality and quantity, and 
the VA has to establish a natural balance. And what we would 
like the VA to do is first change its work measurement system 
so it reflects the needs of the claimants rather than the needs 
of the people working in the VA. Let them adjust to what really 
needs to be done correctly.
    Second, we should have an independent quality check, one 
from outside of VBA. That way you are not going to have 
pressure not to find errors, and I think that would help a 
great deal.
    Thank you very much.
    [The prepared statement of Mr. Abrams appears on p. 40.]
    Mr. Hall. Thank you, Mr. Abrams.
    Mr. Wear.

                   STATEMENT OF JAMES D. WEAR

    Mr. Wear. Chairman Hall and Members of the Subcommittee, on 
behalf of the 2.1 million members of the Veterans of Foreign 
Wars of the United States and our auxiliaries, I would like to 
thank you for the opportunity to be here today to share our 
concerns and thoughts regarding VBA's work credit and 
management systems.
    The VFW's chief concern today is a very real perception 
that VA puts more emphasis on the number of claims that are 
processed than the accuracy of those claims. This is validated 
by the over 1.1 million claims for compensation, pension, 
education, and appeals pending, as reported by the VBA in its 
weekly Monday Morning Report, as well as many VA OIG reports.
    Secretary Shinseki's goal of rating all claims with a 98-
percent accuracy in under 125 days is very laudable, But the 
VFW would be ecstatic if the VA could reach the 98-percent 
accuracy goal with even the current average wait time of 165 
days.
    The VFW has developed five immediate actions that we 
believe will improve VBA's quality now:
    First, the VA management team must focus on changing the 
culture in VBA to award quality over production. VBA must 
incorporate quality and accountability into its self-imposed 
work credit measurement system. VBA must determine which 
employees get it right and which employees get it wrong. VBA 
must hold every employee and manager accountable. VBA needs to 
know who is making the errors in order to train the employees 
accordingly. VBA must provide incentives to employees and 
managers so that they continuously look for ways to improve 
quality. The employees and managers must know that quality is 
the most important aspect of their job. VBA's new slogan could 
be ``Do It Right the First Time.''
    Second, require two signatures on all awards and ratings 
prepared by new employees and/or employees with low quality 
until sustained improvement is shown. A second signature will 
help to ensure a more experienced set of eyes have reviewed the 
work of less-experienced employees. Also, it gives managers 
more opportunities to train on those errors as soon as they are 
discovered.
    Third, require employees and managers to prepare partial 
rating decisions whenever possible to give the veteran 
immediate financial assistance and access to VA medical care. 
This will aid veterans and foster good public relations among 
veterans. VA must emphasize giving work grade credit for 
partial ratings to incentivize employees to make this extra 
effort.
    Fourth, publicize VSRs and rating VSRs who have 
demonstrated consistently outstanding quality. Morale is a 
large part of motivating employees to work towards 
organizational goals.
    Lastly, VA should share with their claimants the average 
wait time to process their type of claim in either an e-mail or 
in the initial development letter. This would let the veteran 
know up front about how long he might have to wait.
    The VFW supports a fully integrated system, one that allows 
VA to operate in a paperless environment as much as possible. 
We urge Congress to use its oversight authority to ensure VA 
successfully transforms from a paper-centric to paperless 
environment. The VA must enter the 21st Century, which is only 
achievable with the support and careful attention of this 
Committee.
    This concludes my remarks. I would be happy to address any 
questions you or your Committee may have.
    Thank you.
    [The prepared statement of Mr. Wear appears on p. 43.]
    Mr. Hall. Thank you.
    Mr. Wilson.

                  STATEMENT OF JOHN L. WILSON

    Mr. Wilson. Mr. Chairman, Members of the Subcommittee. I am 
pleased to have this opportunity to appear before you on behalf 
of the Disabled American Veterans to address the efforts of the 
Veterans Benefits Administration to properly balance quality 
and quantity in the work credit and work management programs.
    Too often, VBA has attempted to manage its ever-increasing 
workload emphasizing production to the detriment of accuracy. 
DAV is as concerned as the Committee about the large and 
growing claims inventory, or backlog, the VBA is managing. The 
problem is not the backlog. Nor is it the root cause of the 
problem. Rather it is the symptom. It is akin to an individual 
having a fever. While one can take an Aspirin to reduce the 
fever, the underlying condition, the cause of fever must be 
treated. Otherwise, it will return. The patient's condition may 
worsen. So, too, it is with the claims backlog and the process. 
The underlying condition is a broken claims processing system 
that leaves too many veterans waiting too long for rating 
decisions that are too often wrong.
    Until we address the lack of quality, accuracy, and 
consistency--the root cause of the backlog--then no matter how 
quickly claims are processed the problem will remain and the 
backlog will return.
    We, therefore, believe that the best and only approach is 
to take one that emphasizes quality at every stage of 
production. To achieve this outcome, it is essential that we 
examine the system of incentives and accountability for 
employees, management, and leadership.
    We have heard Secretary Shinseki says that he intends to 
break the back of the backlog this year. The only way any such 
success will be measured at present is through VBA's Monday 
Morning Workload Reports, which contain measures of production, 
not accuracy or quality.
    Similarly, looking at VBA's dashboard, which provides 
current performance statistics for each VA regional office, the 
measure's report primarily relates to pending work inventory 
and production times, not quality.
    With the directive from leadership to break the back of the 
backlog, it is not surprising that the RO management focuses 
heavily on production, rather than accuracy or quality. Given 
leadership's and management's focus on production, it is also 
not surprising that VSRs and RVSRs feel tremendous pressure to 
meet production goals.
    While accuracy has been and remains one of the performance 
standards that must be met by employees, we are concerned that 
the work credit system creates incentives for them to favor 
production over accuracy. Performance standards are the most 
important factor in determining the incentives for employees. 
If performance standards directly or indirectly reward 
production over quality and accuracy, we must expect employees 
to work first towards production goals.
    The new performance standards have streamlined the measures 
of production for VSRs from what had been 63 categories of 
rated work activities to five production categories, now called 
outputs. Essentially, VSR will receive one output credit for 
completing each stage of the work process. We have been told 
that the old work credit system created opportunities for 
gaming the system, such as delaying requests for routine future 
exams in order to get additional work credits later. However, 
we are now concerned that the new streamlined system of 
measuring only outputs may inadvertently create incentives for 
cutting corners, since more complex cases get no more credit 
than simple cases.
    We know that VBA has increased the accuracy standard for 
VSRs, and we certainly agree that accuracy even by the national 
STAR measures remains too low. However, it is not clear how 
raising the standard in and of itself will result in increased 
accuracy.
    We also remain concerned about how reliable the employee 
reviews will be for measuring quality. We have testified 
previously that coach reviews of five cases per month are not 
accomplished 100 percent of the time; and, in many cases, 
coaches do not have sufficient time to comprehensively review 
each case. Consequently, we do not have confidence that 
employees performing below or above standard will be 
consistently measured.
    We are also concerned about these local quality reviews 
being different from station to station. We continue to note 
that VBA does not have a unified system for aggregating and 
analyzing results of both coaches' reviews and STAR reviews to 
provide trend analysis for quality control, improvements, and 
new training instrument development.
    Under the new VSR standards, time limits are established by 
each RO based on end-of-year station targets. We recognize 
cycle times will vary from station to station but question 
whether it is a reasonable expectation to have employees at 
different stations being held to different standards for the 
same work.
    We also have questions about whether cycle times, which 
include wait periods and work volume, are the most reasonable 
measure for holding VSRs accountable, since it is out of their 
control. For example, is the cycle time for average days 
awaiting evidence a fair measure, since the admission of 
evidence by the claimant is not under the control of the VSR?
    VSRs will also now be held accountable for meeting the 
training standard. We question whether this should be a 
management accountability standard more than an employee 
standard, since training is critical to keeping staff informed 
of the ever-revolving nature of claims, whether it is new 
presumptive service conditions, changes in public law, or 
recent court cases.
    Given some reports, we have heard from the field about 
management pressuring employees to cut back from time for 
training to production goals. How is management being held 
accountable for training being implemented at the regional 
office level?
    That concludes my testimony. I would be happy to answer any 
questions you may have.
    [The prepared statement of Mr. Wilson appears on p. 45.]
    Mr. Hall. Thank you very much.
    And, Mr. de Planque, you are now recognized.

                 STATEMENT OF IAN C. DE PLANQUE

    Mr. de Planque. Thank you, Mr. Chairman. I appreciate the 
opportunity to express the views of the American Legion on the 
importance of accuracy in the veterans benefits system.
    Before discussing the problem of accuracy in depth, a 
little bit of perspective is necessary to illustrate why this 
is such an important component of the VA claims adjudication.
    According to most optimistic numbers--and these are VA's 
public statistics and not those suspected by OIG audit, which 
are believed to be much lower--VA is operating at approximately 
87 percent accuracy rate, or 13 percent error rate.
    This year alone, VA expects to receive and process nearly 
200,000 claims solely related to the three new presumptive 
Agent Orange conditions. Statistically, we can thus expect that 
26,000 of those claims will be processed in error. Twenty-six 
thousand veterans will have their claims improperly handled. 
That figure represents nearly half of the names on the Vietnam 
Wall in Washington, DC.
    Every claim is a life affected. Every claim is more than 
one life, because veterans have families and loved ones. 
Veterans have husbands. They have wives. They have children.
    We are told VA will process as many as 1 million claims a 
year within the next year or two. One must remember that at 
least 1 percent of inaccuracy represents 10,000 veterans' 
claims. VA has to do better, clearly.
    The inaccuracy of the system contributes to the massive 
lack of trust in the VA by the veterans' community. When 
veterans cease to trust the system by which their country 
returns the promise to them, there must be great concern. VA 
has to stop asking the veterans of America to trust them, that 
they will be treated properly, and VA is now in a position to 
re-earn that trust.
    Rather than repeating the number of things that we all have 
been saying here, not just in this session but for many, many 
years now, I want to touch on something that Mr. Christensen's 
report listed this morning. Because we, like you, have not had 
been an opportunity to see this report until this time.
    One of the things that was stated is there were two surveys 
on the perceptions of quality and quantity and considerations 
of which is more important and that both surveys had found that 
the quantity of claims process was believed to be more 
important, and it said something which is very interesting. It 
states, this is an important finding, because, even if that 
perception is incorrect, at least some employees who have that 
perception will probably change the way they process claims in 
order to do what they think their supervisors want. Perception 
is reality. If VA employees think that numbers are what is 
important, that is what they will work to; and they have 
nothing to look to that is there to show them that accuracy is 
the same thing.
    We mentioned the daily reports that VA makes, their Monday 
Morning Workload Reports. They list the number of claims and 
how long they have been pending. They don't list how accurate 
the regional offices are performing. You can find those 
statistics, but you really have to start digging for them.
    Transparency gets mentioned a lot in Washington right now. 
If VA wants to start re-earning that trust from the veteran 
community, they need to be a lot more transparent. They need to 
put those numbers up and say this is what we are staking our 
reputation on. Our reputation is on the accuracy; and if we 
can't see that, if the veterans can't see that, if the 
employees working in those offices can't see that that is what 
VA is putting their priorities to, then they are not going to 
believe that that is the case. They are going to believe that 
it is still continuing to be driven by the numbers.
    There are ways that they can help do that. Obviously, it 
takes more time to process a claim effectively; and VA doesn't 
want to lose ground with the number of claims that they have 
pending right now. Putting an experienced claims examiner at 
the beginning of the process to do triage is going to help the 
VA if they can have someone who can take these cases and say, 
this is ready to rate. This doesn't need as much development.
    It was mentioned earlier a hearing loss case doesn't 
require near as much work as a TBI case. Put them to the people 
who can do the work best.
    We have mentioned that hiring all of the VA employees is 
going to take a while to show dividends because of the training 
times that are involved. Less-experienced employees can handle 
simpler claims, such as hearing loss. The other ones can be 
directed to other employees who are more competent and more 
capable of doing them right.
    So if you do better triage at the beginning, if you direct 
the cases better, you will be able to do them on time and have 
the time you need to do the ones that take more time.
    Making time for training. Making training a priority is 
also going to show those employees that this is the priority. 
We are okay with you setting aside some time from those numbers 
to make sure you understand that it is right, and we are going 
to take the time to pay attention to what you are doing and get 
it right.
    There are a number of other solutions, and I would be happy 
to answer any more questions on those, but we would like to 
state on behalf of the millions of veterans of the American 
Legion but also the millions and millions of veterans in 
America, VA needs to earn this trust back, and they need to do 
that by showing that accuracy is their most important priority.
    Thank you.
    [The prepared statement of Mr. de Planque appears on p. 
48.]
    Mr. Hall. Thank you, Mr. de Planque.
    Mr. Sims.

                STATEMENT OF JIMMY F. SIMS, JR.

    Mr. Sims. Thank you, Chairman Hall. Appreciate the 
opportunity to testify today on behalf of AFGE and the VA 
Council.
    In my position as a RVSR and a union steward who has 
represented numerous employees, I have seen firsthand the 
impact of VBA's work credit and management system. These 
systems have placed the VBA on the precipice at a great risk of 
falling behind on our mission to provide service to the 
veterans and their dependents. The performance standards under 
these work management systems established by the VBA do not 
provide adequate work credit for many of the critical steps 
involved in the claims process.
    The new VSR standards that were issued last month provide 
no credit for supplemental development such as requesting 
additional evidence and have reduced the work credits from over 
60 categories to only 5. Denying work credits for critical 
tasks will slow down the process and decrease quality.
    The standards also force employees to make daily choices 
between quality and quantity by including timeliness as a 
critical element. Many delays, such as awaiting records from 
the U.S. Department of Defense (DoD) or from private 
physicians, are outside of the control of the employee and, as 
such, employees should not be held accountable for these 
delays.
    The implementation of the new VSR standards included a 
prohibition on variation from the national standards, although 
current RVSR standards do not. Local VA ROs may arbitrarily 
increase the production standard, which results in disparity 
based on geographic location. An RVSR in Seattle may be 
required to produce 31 percent more daily work than an RVSR in 
Winston Salem. Variations in local standards are taking their 
toll on morale and accelerating attrition of senior RVSRs with 
valuable experience. I fear that the new RVSR standards being 
developed will continue the systemic problem.
    Trainees are also being subjected to these unrealistic 
standards and working conditions during their initial period of 
on-the-job training. The minute they hit the floor, they have 
only 90 days to hit the standard. During this training phase, 
the receive no time allowance or credit for making corrections 
to their work. These VBA production standards result in a waste 
of taxpayer dollars through termination of large number of 
probationary employees who fail to meet these arbitrary 
standards during training.
    Under the current work credit management system, employees 
find themselves in a catch 22. If they focus on quality of 
work, the quantity may fall behind. If they focus on quantity 
of work, their quality may fall below. Either situation results 
in the risk of demotion or termination.
    Because of the inverse relationship of quality and 
quantity, many employees find themselves being forced to work 
off-the-clock to meet their production and quality standard. By 
doing this, they risk disciplinary action for violating VA 
directives and Federal wage and hour laws.
    One critical element for an effective work credit 
management system is a scientific time-motion study that 
accurately measures the process. VBA has conducted no more than 
a minimal attempt at this. Without an effective analysis of the 
process, there can be no improvement.
    President Obama's executive order on labor management is 
intended to include the employees and their representatives in 
development of policies before they are implemented. 
Unfortunately, VBA is woefully behind in establishing effective 
partnership. Frontline employees and other stakeholder have 
ideas to improve the claims process. We are the subject matter 
experts and wish management would acknowledge and include us in 
the establishment of the policies.
    In closing, AFGE urges you to mandate completion of the 
scientific study of the claims process for VBA to include 
stakeholders in the policy development and to end the local 
variations in the RVSR production standards.
    Thank you for this time you have allowed me to provide this 
insight.
    [The prepared statement of Mr. Sims appears on p. 51.]
    Mr. Hall. Thank you, Mr. Sims.
    I will start with you, sir, Mr. Sims, and ask you if you 
could elaborate on your suggestions for VBA so that Rating 
Veterans Service Representatives, RVSRs, can more accurately 
rate claims at a pace that allows the VA to meet its goals of 
timely delivering of benefits to veterans and their families.
    Mr. Sims. One of the primary concerns for the RVSRs in the 
field is the training that is being provided. Currently, 
training is done through a computerized system which is on an 
independent basis, which gives no feedback from a subject 
matter expert on the issues for which they are training. This 
lack of proper training is resulting in a delay in the RVSR 
being able to process the claim due to lack of knowledge.
    It also is impacting the overall process of meeting the 
requirements for the VA. Because as the RVSRs are being slowed 
down in their process of rating the claims due to lack of 
proper knowledge, it reduces or it increases a backlog of the 
claims that we are trying to produce.
    Mr. Hall. Can you suggest any specific reforms to the work 
credit system that would reward claims processors for spending 
sufficient time developing and adjudicating claims? Is there 
some way to get around this inverse relationship you talked 
about between quality and quantity?
    Mr. Sims. The only way that is actually going to be 
effective is for the time that is required for each element of 
the claims process to be considered in the work crediting 
system. Currently, that is not the case.
    An RVSR may get a case which contains three issues that may 
be incredibly complex and requires hours of review of the 
evidence in rendering the decision. But that time frame that is 
required to conduct the proper rating is not considered under 
the production standards. We are required to maintain a certain 
level of productivity without consideration of the amount of 
time that is involved in each individual rating. So in order to 
adjust the production standards properly, there would have to 
be an adequate time management study done, which indicates the 
necessary time frame for each individual step in the process.
    Mr. Hall. Do you have a comment on I believe it was Mr. 
Abrams' suggestion that the clock be stopped at the VA for a 
particular claim if the claim is being developed and documents 
or medical evidence is being produced by the veteran or 
representative of the veteran and that is not within the VA's 
control?
    Mr. Sims. Unfortunately, currently, the receipt of evidence 
from a third party is strictly based on that third party's 
willingness to provide the evidence in a timely fashion. 
Regulations stipulate that certain providers such as the 
Department of Defense, Social Security, those agencies were 
required to continue to request that evidence until it is 
received. Therefore, the time delay that is associated with 
that process is outside the control of the individual RVSR or 
VSR. So, currently, the new standards are holding the employee 
accountable for that process of which they have no control.
    If the VA was to consider a time delay in the processing of 
a claim to allow for that third party to develop the evidence 
that they wish to submit, then at that point it becomes an 
issue of timeliness over the overall process, which Congress 
has indicated that needs to be adjusted.
    So the current concept of delaying or stopping the clock to 
allow for additional evidence to come in may be beneficial on 
one aspect for the claimant, but then again it will end up in 
greater delays for the claimant and result in a greater delay 
in the claims processing overall.
    Mr. Hall. Right. And it may be that the VA person who was 
trying to get the information from Social Security or from DoD 
or whatever will feel less pressure to harass the other branch 
of government into coming up with--I understand you are saying 
we don't want to make the time longer, but at the same time we 
want--I think we are looking for ways to emphasize, as we have 
been saying, quality without having the RVSRs or any VA 
personnel feel that their evaluation of their work will be more 
negative if they take the time to get it right, and that may be 
out of their control due to these certain factors.
    Mr. Cohen, this question could be for you but also for 
everybody else on the panel. Could you briefly state if you 
feel the reforms of the claims process that focus primarily on 
timeliness and speed of claims will be effective? Do you think 
that veterans should be and are willing to accept a slightly 
longer adjudication process if it results in a more accurate 
claims decision the first time?
    Mr. Cohen. I think that veterans and their representatives 
would accept a longer time period if it was correct the first 
time around.
    One of the things, though, that we need to consider is the 
biggest delay in processing a claim is in development, is in 
getting the exams. If the VA were to make it clear to the 
treating physicians who work for the VA that they are permitted 
to provide opinions, if they have them, about whether 
conditions are service-connected or the degree of disability, 
that might eliminate the need for Compensation and Pension 
(C&P) exams.
    In addition, if 5125 were amended to be mandatory to accept 
an adequate exam, one that is adequate for rating purposes, 
then, again, additional medical development could be 
eliminated.
    The biggest part of the time delay is in obtaining these 
C&P exams. If we can do anything to shortcut that time, the 
total process will be much shorter.
    Mr. Hall. Mr. Abrams.
    Mr. Abrams. I think any veteran would rather obtain 
benefits in 8 months than be promptly denied in 3 months. That 
doesn't seem to be worthy of any more discussion. The idea is 
to try to get the veteran the benefit as quickly as possible 
correctly.
    Mr. Hall. General agreement on that, or would anybody else 
like to comment?
    Mr. Wilson. I would like to say that we--I would like to 
see a case take the current 160 days to get done correctly 
rather than 90 days to get done quickly but incorrectly. The 
excessive amount of churn you will have in the appellate 
process is not acceptable to us; and, given the current 
situation, moving towards speedier decisions without proper 
development is going to lead to just that.
    Mr. de Planque. I would just like to add, in terms of 
perspective for this, when you have a rush to judgment, if they 
are just going to blitz through quickly and get them done in a 
short period of time, it has to be appealed. And when we talk 
about the backlog and when we talk about veterans waiting years 
and years to get their claims, that is not an initial claim. If 
a veteran is waiting years and years and years to get their 
claim, that is a claim that is on appeal; and it had to be 
appealed because there were problems made at the lower level.
    The problem is that mistakes at the RO don't take a minute 
to correct. They take years to correct. Because it has to go 
out to the Board of Veterans' Appeals, sometimes the courts, 
because things weren't done right the first time; and that is 
why waiting a little bit longer, waiting a couple months more 
to get it done right the first time, I don't think any veteran 
would argue with that.
    Mr. Sims. If I can add the insight from the employees' 
perspective on this process.
    For myself as a rating specialist, the greatest problem 
that I face is inadequate development. Currently, under the 
current work management system, the employees are pressured to 
get the claims to us on the rating board as quickly as possible 
so that we can get a decision out within the 125 days that the 
Secretary has stated that we would do.
    Unfortunately, oftentimes these claims are not developed 
appropriately and evidence is missing, which is intricate to 
the rating decision. That is why the appellate process is the 
way it is, is because the development process is being rushed. 
If the process was slowed down and allowed to be developed 
appropriately, the veteran and the claimant on the other end 
would get the decision correctly the first time; and that would 
alleviate a lot of the appellate process.
    Mr. Hall. Thank you, Mr. Sims.
    And I would ask starting with you perhaps to comment on the 
pod concept and the triage concepts that were mentioned by a 
number of our panelists, Mr. Cohen in particular. But what do 
you think about those two approaches?
    Mr. Sims. I have personally been involved in a pod 
situation in which the VSR and the RVSR were paired in a 
project that we had at the regional office. It resulted in an 
extensive amount of knowledge being transferred between the 
RVSR and the VSR on both sides of the equation, and we found 
that the quality of our team at that point was 100 percent and 
the production was increased by an overall 30 percent. This was 
in a decision review process that we conducted.
    As for the triage phase, there are a number of claims that 
come through that I see on a daily basis that there is no basis 
for the additional development to have been conducted. The 
decision could have been rendered when the claim was received. 
Unfortunately, because there is not an adequate triage system 
in place, those decisions are delayed and thus increasing the 
overall inventory.
    Mr. Hall. Mr. de Planque?
    Mr. de Planque. I think with both of those systems--
certainly in a pod system, being able to see the entire 
picture, being able to immediately communicate back and forth--
--
    Mr. Sims commented not too long ago that development--
inadequate development is one of the biggest problems they 
face, the ability to communicate back and forth and say I am 
here trying to rate this case but we don't have the development 
that we need and this needs to get done at that level. That 
level of communications can only help the claims process.
    In terms of the triage system, you can't indicate the 
importance of that enough. When VA got caught with the 
shredding scandal and 10s of thousands of documents were being 
shredded, they took it seriously; and they put a GS-12 in every 
office whose only job now is to control what documents are 
being shredded. That was a way of sending a message that the 
document destruction is important.
    If they took a high-level employee in every regional office 
with the job of making sure this is right, looking at the 
accuracy, making sure this is directed to the right place, that 
is another way of sending a signal.
    We talked about sending signals so the employees have a 
perception of what truly is most important: getting the work to 
the right places and getting the work done right. That is 
another way that they can indicate that.
    Mr. Hall. Mr. Wilson.
    Mr. Wilson. I think the pods and the pilots that VBA has 
implemented are important to consider. There are lessons to be 
learned from them. I think we will see that as we continue with 
the pilot programs and see what the final reports have from 
them.
    The triage, putting an experienced person in the beginning 
of a particular process to have them as a gatekeeper to make 
sure the right decisions are being made by those less-
experienced personnel, and pushing ready-to-rate claims to 
raters, is an excellent approach, which is one that should be 
adopted as soon as possible at each VA regional office.
    Mr. Hall. Mr. Wear?
    Mr. Wear. I think the pod system and the triage, I think 
those are all good ways to make sure that the claim is complete 
as early in the process as possible. We have all talked about 
how long it takes--the longer development takes, the more time 
it takes to reach a final decision on a case--and the people 
don't see it. I think the better we can get the right 
information to the VA as quickly as possible and have somebody 
look at it is critical.
    If we could rearrange who we put where so we could put 
maybe a GS-12 or somebody right up front to do triage, I think 
that would be really critical to looking at what they have got 
and where it needs to go but also working with service 
organizations to say, can you get me this or get me that? Or 
they can have people call.
    All that is going to help get everything focused as early 
as possible, and that will lead to a better decision quicker.
    Mr. Hall. Mr. Abrams?
    Mr. Abrams. We like the pod concept. We don't like what 
they have now. Several years ago, we went to one of the 
regional offices with the American Legion to do a quality 
check, and a friend of mine from my days at the VA called me 
aside. He was on the rating board, and he complained forever 
about the inadequate development.
    Mr. Abrams. He called it widget production. People are 
disassociated with the final result when they are isolated and 
only have one part of the claim to do. It is much better to do 
it the other way.
    Mr. Hall. Mr. Cohen, anything to add?
    Mr. Cohen. Yes. I just wanted to add something about the 
triage. The indication that triage is needed can be seen by the 
number of combat veterans who have Purple Hearts or have 
significant heavy combat who apply for benefits based on PTSD 
and are denied, that either the VA wants more development on 
their stressor or doesn't believe the adequacy of their 
stressor or doesn't believe that the horrific conditions that 
they experienced in combat were sufficient to cause the PTSD. 
Those should be no-brainers and should just run right through 
the system.
    It is appalling that some of these people get denied and 
then have to go through the appellate system and may wait a 
year and a half to get the benefits that should be so obvious.
    Mr. Hall. Thank you.
    Mr. Abrams, you said that 60 percent of the claims appealed 
to VBA are remanded or overturned, and the most common problem 
they report is premature adjudication of claims and lack of 
development. Do you think the VA has resorted to using the BVA 
and the U.S. Court of Appeals for Veterans Claims as a de facto 
quality control process?
    Mr. Abrams. Yes. We have been told by VA employees who are 
frustrated, that what the VA says is, Let them appeal. Let the 
BVA decide this.
    And it is a good way to take the case off their backlog, 
put it into appellate process, and move it up. This is not the 
first time that this has happened.
    During the 1970s, when the vets were coming back from the 
Vietnam war or Vietnam conflict, I started working at the VA. 
And when I walked in, I saw case files piled to the ceiling in 
the Philadelphia office, and the managers would run up and down 
the aisles yelling, ``Make a final decision.''
    You were pressured to take what evidence you had and try to 
make a final determination. And most of the time it had to be a 
denial, because you didn't have the evidence that would support 
a grant.
    Mr. Hall. And Mr. de Planque, regarding the Monday Morning 
Reports you spoke about, do you believe that the VA could 
produce analogous reports to show the accuracy on a weekly 
basis of the claims system? Could this lead to an increased 
accountability and focus the attention of VA personnel on 
quality as a basis for their evaluation and for reforming the 
system?
    Mr. de Planque. Actually, I think if they are reporting on 
quality on a daily basis, it would show that it is important. 
And I think that it would help. It is like having your grades 
posted on the wall at school. You know, when they have their 
workloads posted, this is how many cases they have, this is how 
many cases they have pending over this number of days, there 
has to be a pressure at that point to move those cases along so 
we are not the lowest or we are not the ones who are looking 
that way.
    If they were having their accuracy ratings posted at the 
same time, that is going to create an analogous pressure to--I 
want to be in the top of accuracy. I want to be able to point 
to our regional office and say we are in the tops in VA in 
accuracy.
    If you talk to VA employees, as we do when the American 
Legion works with NVLSP and does quality review visits, they 
want to be proud of the place where they work. And so if you 
have something that is publicly posted that this office is 
doing this level of quality, there then becomes an incentive to 
make sure that you are reaching the top numbers, that you are 
achieving, and that you are not falling behind of those levels.
    At the same time, it gives the veterans groups, it gives 
the veterans themselves, independent of groups, an ability to 
look at that and say, All right, this is how I restore my 
confidence in VA, because I see where they are going and I see 
it is a priority to them because they are posting their numbers 
and showing pride in what they are doing.
    Mr. Hall. Well, thank you, Mr. de Planque. And thank you 
all.
    We have more questions for you. I have more questions for 
you, but I will submit them in writing so that we can move on 
to our next panel. Thank you for your patience and for your 
continuing work on behalf of our veterans.
    Mr. Hall. And panel two is now excused, and we will have a 
changing of the guard and invite our last panel, Diana M. 
Rubens, Associate Deputy Under Secretary for Field Operations 
at the Veterans Benefits Administration, U.S. Department of 
Veterans Affairs, accompanied by Jason McClellan, Director of 
the Central Area Office of VBA, U.S. Department of Veterans 
Affairs, to join us at the table.
    Thank you again for your being here, for your testimony, 
and for your patience with the schedule across the street. As 
usual, your full written statement is entered in the record.
    And, Ms. Rubens, you are now recognized for 5 minutes.

STATEMENT OF DIANA M. RUBENS, ASSOCIATE DEPUTY UNDER SECRETARY 
 FOR FIELD OPERATIONS, VETERANS BENEFITS ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY JASON McCLELLAN, 
       DIRECTOR, CENTRAL AREA OFFICE, VETERANS BENEFITS 
      ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Ms. Rubens. Thank you, Mr. Chairman. Thank you for 
providing me the opportunity to appear before you today to 
discuss the work credit and management systems study and the 
way we think that those things relate to accountability, 
accuracy, and compensation and pension claims processing.
    We acknowledge the concerns of our stakeholders and our 
veterans regarding the current work credit system and perceived 
emphasis on quantity over quality. But I want to make it clear 
that VBA does not emphasize quantity over quality.
    Secretary Shinseki has set a goal for VBA to process 
disability claims at a rate sufficient to ensure all veterans 
have their response within 125 days. But that is only a 
successful effort if we also achieve the goal that he has 
established for us of a 98-percent quality rate.
    As the Subcommittee is fully aware, Public Law 110-389 
required the Secretary to initiate a study of the effectiveness 
of VBA's employee work credit and work management systems to 
evaluate a more effective means of improving disability claims 
processing performance.
    I apologize for the late delivery, as we experienced delays 
in both the initiation of that study and the completion of that 
concurrence process. I do anticipate that it will be delivered 
shortly, and am happy to be available for any questions you 
have upon your review of that study.
    [The Report was received by the Committee.]
    The Center for Naval Analyses recommendations closely align 
with VBA's current initiatives to better link individuals' 
performance with completion of decisions for veterans. VBA has 
both long- and short-term strategies underway to reduce the 
backlog of claims while improving quality, even as the 
complexity and the numbers increase. We continue to hire 
aggressively, with the strategy being to make good selections, 
provide full training, establish expectations, provide 
feedback, and hold ourselves accountable.
    As it pertains to quality, I have also asked the area 
offices to increase their oversight of regional offices with 
quality that doesn't measure up to par. While this is just a 
starting point, we need to work all together to raise that to 
that 98-percent quality.
    We talked a little bit about the new performance standards 
that were developed in concert with our national Labor partners 
at AFGE, our veterans service representatives, that address 
recommendations since made by CNA.
    While our local performance standards have always included 
a quality element, the new standards further align individual 
targets with national targets and require that local reviews 
that are being done use that same checklist used by our 
national star review team. These new standards give work credit 
only for work done that moves the claim to the next stage of 
the process, as we feel that aligns most closely with veterans' 
desire to actually get a decision in their claim.
    We are nearing the 30-day mark of the implementation of 
those new standards, and will be working with our labor 
partners to review how that implementation has gone in terms of 
outcomes as we look at that first 30 days, and then over the 
coming months to share that information with them to ensure we 
are getting closer to the right standard and measuring the 
right things to help us get the job done for veterans.
    The CNA study also looked at the current work management 
study, referred to as the Claim Process Improvement Model, 
which emphasized employee task specialization. VBA has been 
engaged for some time in several pilots to evaluate the 
alternatives to the CPI model; most notably, the pilot in 
Little Rock, Arkansas, which used Lean Six Sigma analysis 
techniques. That pilot will complete shortly, and we anticipate 
having a final report. Additionally, we have pilots underway in 
both our Pittsburgh Regional Office and our Providence Regional 
Office to look at the process and technology respectively.
    Recognizing that there are many approaches to improve our 
process, we have gathered ideas from as many arenas as 
possible, to include opportunities such as our Innovation 
Initiative competition, engaging in the roundtable held by 
Chairman Filner, and in March, VBA leadership met to generate 
ideas with the focus on reaching that 125-day processing at a 
98-percent quality level. We have also engaged our VSO partners 
in a one-day session to get their input directly, and similarly 
are working to schedule one with our Labor partners from AFGE 
early in June.
    VBA does not believe there is going to be one silver bullet 
to solve the problems of the backlog, but it will be a 
combination of people, process, and technology that will enable 
us to meet the Secretary's goal of no claims over 125 days at a 
98-percent quality level.
    That concludes my statement. I would be happy to answer any 
questions you may have.
    Mr. Hall. Thank you, Ms. Rubens.
    [The prepared statement of Ms. Rubens appears on p. 53.]
    Mr. Hall. First of all, could you please explain what has 
delayed the transmission of the report outlined in Public Law 
110-389. And when you said ``shortly,'' what does that mean? 
When will we receive that report?
    Ms. Rubens. Yes, sir. I will tell you that this study was 
one of 11 required in Public Law 110-389. As we work to get the 
studies all engaged, it took us longer than it should have. It 
was an inexcusable delay. That was enacted in October. It took 
us until March; you heard Mr. Christensen say we engaged them 
in March. So that was an inexcusable delay.
    As I understand it, and as I followed up in the last couple 
of days trying to ascertain just where it is, the concurrence 
process, through VBA, VA, and working with OMB, is closer to 
the end of that process than at the beginning. And we have 
engaged in some ongoing discussions to ensure that everybody 
that is looking at it, if you will, outside of VBA, recognizes 
that we are late.
    Mr. Hall. Well, if the report was done in September, are 
you changing the report? Is it being modified? Or are you just 
reading it before we get to read it?
    Ms. Rubens. I will tell you that I think we were reading it 
before you get to read it. And the concurrence process over the 
course of October, November, and December was painfully 
protracted. It wasn't so much that we are editing or changing, 
I think, as making sure that we understand and, unfortunately, 
not staying on top of the concurrence process to move it along.
    Mr. Hall. Well, I would appreciate receiving it within what 
I would consider to be a reasonable time, like the next week. I 
see no reason why a report that was paid for by the taxpayers, 
that was required by this Congress and by this Committee, and 
was completed last September by an outside contractor, should 
be sitting somewhere at VA, and for no good reason that I have 
been told, other than it being reviewed and concurred upon--
whatever that may mean--has not yet been shared with us. And I 
think it is time.
    Ms. Rubens. Yes, sir.
    Mr. Hall. Concerning that VBA Management System, the CPI 
model, today's witnesses have testified that while 
specialization of the process improves quality and timeliness 
on the one hand, the moving of claims across teams also reduces 
quality and timeliness. I know that VA is working on at least 
four pilots pertaining to transforming its claims processing 
system into a 21st Century entity looking at other business 
reorganization efforts in the process.
    Could you elaborate on these pilots by explaining how they 
fit into the larger mission of greater accountability, 
accuracy, and consistency and outcomes?
    Ms. Rubens. Yes, sir. The Little Rock pilot that I think 
you alluded to and the last panel addressed in terms of the pod 
concept, and quite frankly the triage effort, are both things 
that are part of that Little Rock pilot. And some of the things 
that we have seen have preliminarily shown us that triage 
function up front, where you get the claims started in the 
right direction with the right folks as quickly as possible, 
absolutely will result in a quicker, more timely outcome for 
the veteran.
    But additionally, that close proximity of the VSRs and the 
rating VSRs we found, in fact, does encourage the cooperation, 
the learning, the cross-talk in an effort to ensure the VSRs 
are requesting the right evidence, the right information that 
that rating specialist will need to make that final decision.
    As I said, that study concludes shortly. We anticipate to 
have a report. We have begun some preliminary discussions 
about--and how and what do we do with this on the national 
level to ensure that we take the best parts of it to increase 
our consistency, our quality, and improve timeliness as well.
    The pilot in Pittsburgh is, if you will, a case management 
development process where we have begun on a small scale to 
engage the veteran on a more personal level early in the 
process, so that when we receive a claim we will make a phone 
call and talk to that veteran about the contentions, the issues 
that they have claimed. Do we understand them? Are we searching 
for the right evidence? Are there other pieces of evidence that 
might be there that he perhaps forgot or overlooked on his 
application?
    When we send out that VCA letter that informs the veteran 
of what steps we have taken, what steps might help to move that 
claim along, it gives us an opportunity, quite frankly, to 
better explain what is a very lengthy letter, so that we can 
ensure the veteran understands; and that at various points 
during the processing of that claim, as we get evidence or have 
not received evidence, whether it is from the veteran or 
perhaps a third-party private medical care provider, we are 
able to apprise the veteran of the progress that we have made, 
what help we might use to get that evidence in an effort to 
help veterans better understand what we need and move that 
claim along, ensuring that we have all the evidence to make the 
best decision possible.
    Mr. Hall. Well, thank you, Ms. Rubens. And you heard the 
previous panel talk about the pods and triage, which seemed to 
be a fairly popular and somewhat successful approach. At least 
you are speaking positively of it.
    There have been cases in research projects that were done 
by the Centers for Disease Control and Prevention, I believe, 
or the National Institutes of Health where, in the middle of a 
study--if I remember correctly, I think it was hormone 
replacement therapy (HRT) for women--in the middle of the 
study, they realized that the evidence was so overwhelming that 
they stopped the rest of the study and said, Let's all do this. 
Let's recommend that women stop taking these HRTs because there 
is risk to their health caused by that.
    I can think of some others in terms of various 
pharmaceuticals that were being investigated, where the 
researchers themselves thought that it was so clear what the 
outcome was going to be that they stopped the study and said--
for instance, Celebrex I can think of as one that was found to 
be a health risk for most of the patients who were taking it, 
and so doctors were advised immediately to stop prescribing, it 
except in particular situations.
    But my question is, is there a point at which you would 
take this pod concept and/or the triage concept and just say, 
okay, let's just do it at every RO? Do we have to wait? Is 
there a long time necessary to do this if it seems to be 
working?
    Ms. Rubens. No, sir. There is not a long time necessary. In 
fact, the area directors and the office field operation have 
been working with Compensation and Pension Service to draft the 
guidance that says here is how to put that mail processing, 
that triage piece, up front right now. So that while we haven't 
received the final report on this study, we are already taking 
that piece of it and saying here is that guidance. Here is how 
we put it together.
    If I may, additionally, some of the early success that we 
have seen in Pittsburgh insofar as that telephone contact with 
veterans, we have also required already some phone calls up 
front with the veteran to make sure that, when that VCA letter 
has gone out, did you understand it? It is rather complex. Let 
us make sure you get it. We are working on the right issues, as 
well as mandating follow-up at intervals for claims that are 
pending so that we can apprise the veterans of the progress 
that we are making on their claims.
    Mr. Hall. Well, that is encouraging. My next question 
actually was going to be of phone calls, because the study Mr. 
Christensen testified about apparently found that work credits 
do not accurately reflect the effort involved in various 
actions. Like telephone calls. VBA employees surveyed noted 
that phone calls to claimants, as you just said, are the most 
direct or quickest way to resolve claims. Calls are seldom 
made, because the current work credit system does not award 
credit for a phone call. So are we seeing steps? Is VBA taking 
steps to change that, to award work credits for phone contacts?
    Ms. Rubens. As part of the new VSR standards, the work 
credit currently is going to be given out for establishing the 
claim, beginning the development of the claim, getting that 
claim ready to rate, so that all the evidence has been 
gathered, as well as inputting the final decision and 
authorizing the claims. So there really only could be four 
steps that will get us credit.
    As we did the study on the new VSR standards--and we had 10 
stations participate in the study to evaluate how would this 
work for a VSR--over 1,300 VSRs participated in gathering the 
information. And some of the feedback that we got was the 
encouragement of folks to pick up the phone and make a call in 
an effort to get that ready for decision so that claim is now 
ready and that credit could be garnered.
    The challenge of the complexity of the claims will, I 
think, show itself as we work to do the reviews of what does 
the data show, now that we have implemented it nationally, at 
the 30-day, 60-day, 90-day mark? And we sit down and look at 
that with our AFGE Labor partners to say, is it working the way 
we thought it would?
    Mr. Hall. Thank you. As of May 1 of this year, there are 
over 8,700 compensation claims pending before the New York RO, 
nearly half of which have been waiting for over 125 days.
    What can you tell my New York area veterans and those in 
other Congressional districts about the work that is being done 
to reform the system so that the staff--both line staff and 
managers alike--focus on improving quality and still get the 
benefits to the veteran in a timely manner?
    Ms. Rubens. Yes, sir. Specifically to New York, as you 
know, we have got a new management team in the New York 
Regional Office. I am very excited about their innovative 
approach, their collaboration that they have taken on their own 
already with the local medical centers to ensure that we get 
timely and accurate exams upon which to make decisions. And so 
the efforts there with the new management team I think will 
begin to, if you will, bear fruit as they help the employees 
better manage the work in innovative ways that we have 
developed locally.
    At the national level, I mentioned some of the things that 
we have done to generate ideas, whether it is internally, 
whether it is through the roundtable that Chairman Filner 
hosted, whether it is our National Innovation Initiative. And 
we are working to put together an overarching approach to 
improve nationwide some of the things that I heard of concern 
here.
    Interim ratings is one of the things that I have heard 
discussed in terms of if there are three or four issues on a 
claim and we can process one and need to develop further 
information on the other. We are reinforcing the use of interim 
ratings. It starts getting money flowing to the veteran and 
starts getting them access to health care, and ensures that 
they are in, if you will, our system and getting work done.
    We are also looking at how do we segment claims. I heard 
some discussion from some of the panel members about those one-
issue claims that might move more quickly, whether it is that 
hearing loss claim or perhaps just one single issue, and are 
currently piloting, in a couple of offices, how will that work. 
About 26 percent of our work is a single-issue claim. And if we 
can move those along more quickly, will we allow ourselves a 
better focus, if you will, on those more complex claims, 
whether it is a complex issue or whether it is a number of 
issues.
    I talked a little bit about the proactive phone 
development. We have heard some concerns about whether or not 
we are incentivizing and rewarding employees. I will tell you 
that as we reward employees, quality is always a part of the 
requirement for a reward to be given. But it is also about 
that--I will call it ``less tangible monetary award,'' and it 
is that recognition of who your performers are and making sure 
that we are recognizing them for that effort.
    One of the initiatives that we are developing and in which 
the Secretary is interested in supporting is, if you will, a 
Who's Who in VBA for VSRs and ratings specialists that will 
allow us to recognize, quarterly, the top 25 in each of those 
categories, and, at the annual level, with recognition from the 
Secretary, in an effort to have people continue to stay jazzed 
and focused on ``We have got to get this job done.''
    I would be remiss if I didn't mention some of the efforts 
that we are making in both the technology, if you will, the 
VBMS, the Veterans Benefits Management System. We are standing 
up an organization that brings VBA end-users, if you will, 
field users and the Office of Information and Technology 
organization together to be focused on this project that will 
grow from the virtual regional office pilot that was just 
completed in Baltimore, allowing us to change and pursue 
actively the electronic claims processing system.
    Mr. Hall. Well, thank you for all that. I am especially 
happy to hear that you are moving toward more streamlined 
granting of claims or approval of claims in clear-cut cases 
like hearing loss.
    Although I am a little bit disappointed that in 2008, 
Congress passed a law unanimously, that was signed by President 
Bush, that said the Secretary shall issue this partial claims 
rating. Changed the language from ``may'' to ``shall,'' 
indicating the clear intent of Congress that when there is an 
undisputed severe disability--which I think hearing loss might 
fall under--or a loss of limb or a paralysis or blindness, or 
any number of other things that are clearly service-connected 
and are not in dispute--notwithstanding the possibility that 
there may be many other facets of claims that need further 
development or adjudication--that the Secretary shall award an 
immediate partial rating so that money starts flowing to the 
veteran. That was passed unanimously and signed by the previous 
President. And 2 years later, I am surprised that we are 
talking about being partway on the road to getting that done. I 
would hope that we would have been there already.
    In your written testimony, you state, Ms. Rubens, quote: 
VBA does not and never has emphasized the quantity of claims 
completed over the quality of our decisions. Unquote.
    While this may be VBA's stated policy, I think the 
testimony of other witnesses here demonstrates pretty clearly 
that that is not actually true in practice, to say nothing of 
the roughly 25 percent error rate nationally that the VA Office 
of Inspector General reported to this Subcommittee in March at 
our hearing on the STAR process in light of the staggering 
rates of claims that are remanded or overturned by the Board of 
Veterans' Appeals and the U.S. Court of Appeals for Veterans 
Claims.
    The message that I would like the VA to take from this 
hearing is that speed cannot be the sole aim of reforming the 
claims system or else the same problems will continue to plague 
veterans. Timeliness will be a byproduct of an efficient and 
accurate claims processing system.
    So I would just hope that you can reassure me that VBA has 
some idea how to effectively live up to the quality commitment, 
while at the same time providing speed when it is appropriate, 
as in the case of the undisputed severe cases that you were 
speaking about, which I was mentioning also.
    And I am also curious whether claims processors can be or 
are being incentivized in a way to achieve both of these 
goals--the accuracy, but also the credit for compensation--
flowing to veterans as soon as possible when that part of their 
claim is not in dispute.
    I also and the Committee needs to better understand the 
ways in which VBA is emphasizing quality on a par with 
quantity. And we would like to be reassured that the courts--
that the appeals levels are not being used as a backstop, and 
that hopefully by triage and pod approaches, we may achieve a 
higher accuracy rating the first time around.
    I am sure these are all goals of yours, too. I know you 
have a lot on your plate. I know that the VA has a lot of cases 
and an increasing number of claims. Nobody thinks that you have 
an easy job or that the Secretary has an easy job, or that 
anybody who works at the VA has an easy job. But we are in a 
position to hopefully provide you with resources to do what you 
need to do, and all branches at the VA to do what needs to be 
done for our veterans, but, at the same time, fulfilling our 
Congressional role of oversight.
    And to that end, seeing the report, which you have, would 
be good, and at least having the knowledge that the law that 
was passed in 2008 and signed into law is actually being 
implemented. And hopefully that, as was requested then, that 
claims processors and raters are being credited and rewarded 
and that their evaluations are getting more positive. Not only 
are they making more accurate decisions but they are, when they 
can, speeding the delivery of compensation to the veterans. 
Because for a veteran who is sleeping under a bridge, or for a 
veteran who is having suicidal thoughts or family problems or 
bankruptcy issues or adjustment, family adjustment problems, 
all the things that we all know are happening, time is 
important. And one of the ways we can help is by easing the 
financial difficulties, especially in this difficult financial 
time that the country is going through.
    So I am not telling you anything you don't already know, 
but I would appreciate your getting back to us. You can do it 
in writing, if you would like, because I have a plane to catch 
and you have probably heard enough by now. But if you would 
like to take a couple minutes to answer, Ms. Rubens, I would be 
happy to let you do that and then we will submit some more 
questions to you in writing.
    Ms. Rubens. Thank you. I do want to just--I didn't mean to 
insinuate, to say that we hadn't been doing partial ratings all 
along. I will tell you, though, that we have seen the 
opportunity to allow us to achieve, if you will, one more piece 
of that vision that the Secretary has; and that is, how do we 
make sure that we are being the best advocates for veterans 
that we can? And that is to make sure that not only are we 
using them when they come up, but that we are actively pursuing 
them, that we are actively encouraging our VSRs and ratings 
specialists that, as quickly as they can--even if it is only 
partial--that they are ensuring that they are starting that 
flow of money, for the reasons that you stated in terms of the 
challenge of a transition, the challenge of the economy and 
homelessness, that we need to make sure that we are getting the 
message across. We know we are a source of help for them, and 
that is what we are here for.
    I will tell you that I do not believe that we are using the 
appeals process, if you will, as a backstop. We see about a 12 
to 13 percent appeal rate. We don't think that is good. We know 
we need to improve that. But it is also one of the measures 
that we look at regularly from the standpoint of appeals, 
remands, by individual regional office as you look at quality, 
and make sure that that is part of the feedback that we give 
not only to our directors but to our service center managers 
and our employees who are doing the job on a day-to-day basis.
    We recognize that it is possible to be both timely and have 
a high degree of quality. We do have offices that have managed 
to achieve those goals. And part of what we have to do is 
invest in stealing those good ideas and making sure that they 
are being implemented in other places; that we are requiring 
them, and that we are holding ourselves accountable to meeting 
that same level of service, which really does pair those two 
things--a timely decision, made in a quality way.
    Mr. Hall. Well, that is the last word, and thank you very 
much for it. Thank you for your testimony and for your 
commitment to working with us to improve the quality of 
processing veterans claims.
    And I will just state that all Members have 5 legislative 
days to revise and extend their remarks.
    We thank all our witnesses on our three panels today for 
staying this afternoon. We value your insight and opinions and 
your work on behalf of our veterans. This hearing stands 
adjourned.
    [Whereupon, at 5:03 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, I welcome you to today's hearing entitled 
``Quality vs. Quantity: Examining the Veterans Benefits 
Administration's Employee Work Credit and Management Systems.''
    The purpose of the hearing is to examine how VBA's employee work 
credit system and its Claims Processing Improvement (CPI) work 
management system model may contribute to diminished quality, 
accountability and accuracy in compensation and pension claims. Today's 
hearing continues this Subcommittee's efforts to analyze various 
elements of the compensation and pension claims process over the 111th 
Congress, and marks the fifth oversight examination this year focused 
on ensuring that our veterans and survivors properly receive their 
benefits. It is our collective quest to vanquish VBA's backlog of 
claims and appeals, which currently exceeds one million.
    We also intended for today's hearing to provide an opportunity to 
examine a congressionally-mandated report on the VBA's work credit and 
management systems outlined in legislation that I developed and 
sponsored during the 110th Congress, the Veterans Disability Benefits 
Claims Modernization Act of 2008, H.R. 5892, (codified in P.L. 110-
389). The goal of this legislation, among other things, was to provide 
VBA with a valuable roadmap to assess and improve its work credit and 
management systems to produce better claims outcomes for our veterans.
    The deadline for this report was October 31, 2009 and I note that 
we have yet to receive it. However, VA has authorized its independent 
research contractor that was retained to complete this report, the 
Center for Naval Analyses (CNA), to testify before us today concerning 
a summary of the report's findings and recommendations. VA advised the 
Subcommittee that the report is still under review by the agency and 
OMB, and that it should be transmitted to Congress soon. We look 
forward to hearing today when this report will be ready and submitted 
to Congress, and getting a better understanding of why it has not yet 
been delivered.
    Since 2007, the VBA has added over 7,100 claims processing 
personnel and Congress has funded these requests. Yet the backlog still 
climbs. This is not to say that adding additional workforce has not 
been beneficial. Had Congress not provided these new claims processors, 
the backlog might have been even worse than it is today, given the 
exponential growth in claims receipts. As the VA itself acknowledged at 
Chairman Filner's Claims roundtable in March, this is a sign of a 
broken system. The mounting claims backlog is a symptom that can not be 
addressed until the VA truly refocuses itself on adjudicating claims 
correctly the first time. We need to continue to look at the system 
with fresh eyes and determine how a new outlook can help VA fix its 
claims processing system and get the claims backlog under control.
    In convening today's hearing, the Subcommittee seeks to further 
explore how the VBA's work credit incentives and flawed CPI model may 
be significantly contributing to delays and errors in the claims 
process. It is my hope that in continuing to examine this issue, we 
will be able to help veterans secure the benefits they deserve and 
prevent them from suffering further injury as a result of delays in 
receiving disability benefits. That is why I want to revisit the issue 
of partial, provisional and temporary ratings. I believe that if VA 
increases the use of this authority and also awards a credit to claims 
processing personnel who use it. This will go a long way in making sure 
that many more veterans can begin to receive their benefits more 
promptly. I would like VA to address this issue when it testifies.
    Today we will also hear from Veterans Service Organization and 
Veterans Advocacy Groups who will explain their vision for how the VA 
should address the problem with VBA claims processing. From them, I 
hope to gain a better understanding of the underlying issues that led 
to such an unmanageable claims backlog at VBA, and if they believe that 
VA is directing its efforts in the right direction to address the 
issue. Specifically, I would like to know if you agree with VBA's 
assertion that it emphasizes quality on par with quantity and 
timeliness.
    I look forward to the testimony of our witnesses and insightful 
comments and questions from my colleagues on the Subcommittee. 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,
    I look forward to this afternoon's hearing on VA's work credit 
system.
    The purpose of this discussion is to ascertain whether proper 
performance measures are in place to effectively gauge both efficiency 
and accuracy of work.
    A system that rewards work credits based on production alone 
undermines quality, and as we all know, poor quality work has 
ramifications throughout the entire system that have contributed to the 
backlog of claims.
    At the same time, there is also clearly a need for VA to maintain a 
high level of efficiency so that veterans can begin receiving 
compensation in a timely manner.
    Where does the proper balance lie?
    True quality means being effective and efficient, the key to 
achieving this balance lies in how employees are rewarded for the work 
they accomplish.
    For too long, it appears that VA has placed too high an incentive 
on production--but it is simply counterproductive to strive for high 
numbers if the work has to be revisited at a later time.
    Yet it would be equally detrimental to veterans if there was an 
overemphasis on quality and the average handle time was off the charts.
    This Subcommittee passed legislation during the last session to 
obtain a study of the effectiveness of the VA's employee work credit 
and work management system.
    From this, we hope VA will be able to develop a more effective 
means of improving its claims processing performance.
    I look forward to working with my colleagues and Department 
officials to delve into this issue and hopefully identify how the work 
credit system can help incentivize the proper balance between quantity 
and quality.
    I want to thank the witnesses for their participation and their 
testimony, and I look forward to our discussion today.
    Mr. Chairman, I yield back.

                                 
  Prepared Statement of Eric Christensen, Managing Director of Health 
          Research Policy, Institute for Public Research, CNA

    In response to Section 226 of Public Law 110-389, the Veterans' 
Benefits Improvement Act of 2008, the Department of Veterans Affairs 
(VA) asked CNA to study the effectiveness of its current employee work 
credit system and the work management system. Beyond these principal 
areas of study, we considered other topics including the use of 
information technology (IT) applications, methods of reducing the time 
required to obtain outside information, processing of claims that are 
ready to rate upon submittal, processing of claims from severely 
injured (SI) and very severely injured (VSI) veterans, and an 
assessment of best practices in claims processing. CNA conducted this 
analysis between March and September 2009.
    Due to the nature of our study questions and the short timeline for 
this project, the most appropriate methodology was qualitative data 
analysis. Our primary source of data was information collected from 
interviews on site visits to six Regional Offices (ROs) selected by the 
Veterans Benefits Administration (VBA). On these site visits we spoke 
with employees in a wide variety of roles in order to obtain as 
complete a picture as possible within the time constraints of the 
study. We took detailed notes from each interview and reviewed them to 
identify common themes among the responses. In total we spoke with 41 
frontline employees, 49 managers, and 11 other employees. We 
supplemented the information from our site visits with background 
information from congressional hearings, formal evaluations from a 
variety of sources (such as the Government Accountability Office (GAO), 
VA's Office of Inspector General (OIG), and internal VBA projects), 
conversations with VBA subject matter experts, and summarized VBA 
administrative data.
Background
    VBA faces multiple challenges in processing claims including large 
increases in the number of claims submitted and the increasing 
complexity of these claims. The increase in the number of claims 
submitted is striking. For example, VA received about 719,000 
compensation claims in FY 2008. This is a 53 percent increase from FY 
1999.\1\ Reasons often cited for the increase are the return of 
veterans from Global War on Terror deployments and the expansion of 
benefit entitlements, such as new presumptions of service connection. 
As for the complexity of claims, GAO reported that in FY 2006, 11 
percent of claims that VA decided included 8 or more issues. By FY 
2008, this proportion increased to 16 percent.\2\ We note these 
statistics to illustrate the challenging and dynamic environment in 
which VBA works to process claims.
---------------------------------------------------------------------------
    \1\ U.S. Government Accountability Office. Veterans' Disability 
Benefits: Preliminary Findings on Claims Processing Trends and 
Improvement Efforts. Testimony of Daniel Bertoni before the Committee 
on Veterans' Affairs, U.S. Senate, 20 July 2009, GAO-09-910T.
    \2\ Ibid.
---------------------------------------------------------------------------
    The work management system that VBA uses is the Claims Process 
Improvement Model or CPI model. The CPI model is an organizational 
model that promotes specialization as a way to improve quality and 
timeliness. The model has separate claims processing teams to perform 
functions in each of the following areas: public contact, triage, pre-
determination, rating, post-determination, and appeal. In this model 
the triage team reviews and routes mail, enters basic claim information 
into the computerized workload management system, and performs some 
simple claims processing actions. From triage, claims move to the pre-
determination team, which primarily gathers the information necessary 
to rate each claim. Once a claim is ready to rate, the rating team 
decides whether a veteran's medical conditions are connected to 
military service and if so, what the degree of disability is according 
to the VASRD (Department of Veterans Affairs Schedule for Rating 
Disabilities). Next the post-determination team processes (i.e., 
authorizes) awards and notifies claimants of the decisions made on 
their claims. Outside of this process, the appeals team handles claims 
for which claimants disagree with the award decision and decided to 
appeal it and the public contact team conducts personal interviews and 
responds to phone inquiries.
    Veterans Service Representatives (VSRs), Rating VSRs (RVSRs), and 
Decision Review Officers (DROs) are VBA employees that work on the 
various teams in the CPI model. These employees are all subject to 
minimum work credit standards. They earn work credits by performing 
certain claims processing actions, each of which is assigned a specific 
number of credits meant to reflect the time required to complete the 
action. Employees' ability to meet the work credit standards is one of 
the elements considered in their annual performance evaluations.
    Note that VBA asked CNA to study its work credit and work 
management systems to see how they could be improved. While there are 
positive aspects to these systems, our charter was to look for areas of 
improvement; hence, we report on areas for improvement only. Therefore, 
one should not conclude that no part of these models works well because 
we focused on areas for improvement only.
Work credit system
Findings
    Stakeholders' main concerns about the current employee work credit 
system are (1) that it emphasizes quantity over quality, (2) that 
production standards are not based on a careful analysis of the tasks 
performed, and (3) that work credits and production standards do not 
reflect changes in claim complexity and additional duties imposed by 
legislation.
    Two recent surveys found strong evidence that VBA claims-processing 
employees perceive that quantity is considered more important than 
quality. The first was a survey of RVSRs and DROs conducted by VA's OIG 
during March and April 2005.\3\ CNA conducted the second survey of 
rating officials and Veterans Service Organization (VSO) 
representatives for the Veterans' Disability Benefits Commission during 
December 2006 and January 2007.\4\ Both surveys found very strong 
evidence that rating officials perceive that quantity is considered 
more important than quality. This is an important finding because even 
if that perception is incorrect, at least some employees who have that 
perception will probably change the way they process claims in order to 
do what they think their supervisors want.
---------------------------------------------------------------------------
    \3\ U.S. Department of Veterans Affairs, Office of the Inspector 
General. Review of State Variances in VA Disability Compensation 
Payments. Report No. 05-00765-137. May 2005.
    \4\ D. Harris. Findings from Raters and VSOs Surveys, May 2007 
(D0015934.A2).
---------------------------------------------------------------------------
    From our analysis in this study, the perception that the quantity 
of work receives more emphasis than the quality of work was common. The 
overwhelming theme from frontline employees was that the production 
standards are difficult to meet, whereas concerns about struggling to 
meet the quality standards were rare. We infer from this that a 
moderate increase in the number of quality reviews per employee would 
better communicate to employees that VBA values both production and 
accuracy. In addition, some interview respondents reported that they 
feel the current number of reviews is too low to be representative of 
their work, which certainly implies that some employees would even 
welcome an increase in the number of quality reviews.
    VBA has undertaken several of its own efforts to consider ways to 
improve the work credit system. One of these efforts was a time-motion 
study intended to provide information for updating the work credit 
values. A more fundamental change that VBA is investigating is re-
defining all the actions for which employees receive credit in order to 
better align them with the overall goal of completing claims. In 
particular, VA established a VSR Performance Standards Workgroup that 
recommended that VSRs receive work credit for only the following four 
types of actions: (1) initiating development, (2) making a claim ready 
to rate, (3) deciding an award, and (4) authorizing the award. At the 
time of our report, VA was preparing to pilot test this approach at 
multiple ROs.
    Prior to developing this approach, the VSR Performance Standards 
Workgroup conducted a survey of frontline employees and managers. It 
included questions on perceived weaknesses in the current work credit 
system, and the responses echoed what we heard through our evaluation. 
The most commonly reported problems were that the performance standards 
are outdated, there are inconsistencies across teams and ROs in the 
rules for claiming credits, deductible time is subjective, the 
standards are stagnant, the current system rewards churning of work, 
and piecemeal development is the only way to meet the performance 
standards.
    Based on information from our site visits, we found that employees 
generally feel that the work credit values in the current work credit 
system do not accurately reflect the amount of time required for each 
action. In particular, each action is too broadly defined to account 
for the large degree of variation in complexity across claims. The 
perceived inaccuracy of the work credits combined with the requirement 
to meet minimum work credit standards and the perceived emphasis on 
quantity over quality result in some unintended consequences for the 
way in which claims are processed.
    One of the most basic questions to consider about the employee work 
credit system concerns the actual work credit values. Both frontline 
employees and managers were overwhelmingly in agreement that the work 
credits assigned to each individual action do not always accurately 
reflect how much time is needed to perform that action for each claim. 
Respondents reported multiple ways in which the work credit values are 
not accurate. Some actions receive too much credit for the average 
claim, some actions receive too little credit for the average claim, 
and some actions receive no credit at all.
    There is tremendous variation in the complexity of claims, and 
based on information from our site visit interviews, the actions in the 
work credit system are not defined at a level of detail to reflect that 
variation. This implies that even if the work credit for an action is 
accurate on average for claims worked over an extended period of time, 
there's no assurance to the employees that the work credit they receive 
for that action on any particular claim reflects the actual amount of 
time required to be spent.
    The two factors that respondents reported as the main determinants 
of the difficulty of processing a claim were the number of issues and 
the types of medical conditions. For some actions, the current system 
allows extra work credit for claims with eight or more issues and for 
claims with certain medical conditions that are difficult to adjudicate 
(e.g., post-traumatic stress disorder). However, there is still a lot 
of variation that is not taken into account. There was general 
agreement that the number of issues on a claim is not adequately 
addressed by the work credits system. In particular, the ranges for the 
number of issues (1 to 7 issues and 8 or more issues) are too broad, 
and performing an action for a claim with 7 issues should receive more 
credit than for a claim with 1 issue.
    There was also agreement that the particular medical condition or 
conditions on a claim have a big effect on how much time a claim 
requires. For example, respondents reported that actions on claims for 
hearing loss are typically relatively straightforward and might even be 
over-credited, whereas actions on claims with complex medical 
conditions (such as traumatic brain injury) might merit additional 
credit.
    Some respondents indicated that one of the reasons they believe 
that work credits do not accurately reflect the effort involved in 
various actions is that the system has not been revised to account for 
changes in the types of claims submitted. They specifically cited 
increases in the number and complexity of issues.
    Based on information from our site visits, one unfortunate effect 
of the current work credit values is that VSRs tend not to use phone 
calls to veterans to expedite development because there are generally 
no separate work credits for those phone calls during the development 
phase, even though sometimes a phone call is the most direct way to 
resolve a question. Some of the VSRs who do make use of phone calls 
said they have learned to work around the absence of work credits. They 
do this by following up a phone call (for which they receive no credit) 
with a letter (for which they do receive credit), even for cases where 
they feel the letter isn't necessary. Thus, the lack of work credits 
for phone calls slows development down both by discouraging some VSRs 
from using a potentially good source of information and by causing 
others to perform an unnecessary activity (writing a follow-up letter) 
in order to get the work credits that they need.
    We also heard about some examples of churning or piecemeal 
development of claims such as spreading development over multiple days 
to classify them as separate actions and therefore be able to claim 
multiple credits. However, we do not know exactly how frequent or rare 
piecemeal development is. We observed that most frontline employees are 
genuinely concerned with serving veterans and their families and that 
these types of activities are simply responses to the production 
pressures that many employees feel.
    Figure 1 shows the distribution of the average number of work 
credits claimed per completed claim for all the ROs. If all ROs were 
processing the same set of cases in the same way, and if all employees 
were claiming the same work credits for the same actions, then we would 
expect minimal variation across ROs. Instead, we found that the average 
number of work credits per claim at each RO ranged from 5.2 to 17.7, 
with substantial variation within that range. These results do not 
account for average differences in the types of cases across ROs, and 
those differences certainly could explain some of the differences in 
work credits per claim. However, the sizable magnitude of variation 
raises questions.

Figure 1. RO's average work credits per claim

[GRAPHIC] [TIFF OMITTED] T7021A.001

    The existence of unintended consequences such as rushed actions and 
piecemeal development, have negative effects on both the quality and 
timeliness of claims processing. The first step toward eliminating them 
should be a pilot to develop a set of actions and associated work 
credits that accurately reflect, and are perceived to accurately 
reflect, the time required to perform each action at a targeted level 
of quality. Those work credit values can then be combined with 
information on expected caseload to determine the staff required to 
process that caseload at that quality level. Because these changes will 
not be quick to implement, VBA should determine what the trade-off 
between quality and quantity is under current resource constraints and 
then explicitly decide on which levels of quality and quantity best 
contribute to accomplishing VA's mission.
Recommendations
    To address both the issues of work credit values and increasing the 
perceived emphasis on quality, we recommend conducting a pilot test of 
the effectiveness of taking the following steps, in the order 
indicated:

    1.  Develop a list of actions defined so that there is little 
variation across claims in the time required to perform the action. 
This will probably require accounting for the number of issues and the 
specific medical conditions involved.
    2.  Determine the time that is required (i.e., the work credits) to 
perform each action at a certain average level of quality. This will 
require incorporating the fact that employees with different levels of 
experience (i.e., different GS levels) will need different amounts of 
time to achieve the same average level of quality.
    3.  Communicate information to employees about the methodology used 
in developing the new work credits. The goal is for employees to 
understand that the work credits accurately reflect the time that 
should be required for each action. In addition, they should understand 
how accuracy of claims processing was explicitly incorporated into the 
development of the work credits and thus how important quality is to 
VBA.
    4.  Set the daily work credit performance standards for each 
individual employee to match the number of available work hours per 
day. Since the work credits from step #2 above will have been developed 
to equal the time required for each action, setting daily standards to 
match the time available ensures that employees should not perceive a 
need to rush. This recommendation is for staff's ease of understanding 
work credit values.
    5.  Set the RO production standards so that they can be attained 
when employees are working at the work credit standards from step #4 
above. (This contrasts with what we heard about the current RO 
standards, which apparently cannot be met if all frontline employees 
are working only at their minimum work credit standards.)
    6.  Develop mathematical models to predict how the number and 
complexity of claims translate into the number of employees needed to 
complete those claims. Then, apply the model to the predicted caseload 
to calculate the number of employees needed in the future to handle 
that caseload. Plan to increase or decrease the number of claims 
processing employees accordingly.
    7.  Conduct ongoing analysis and revisions of the actions, work 
credit values, and number of employees needed. The ongoing analysis is 
required to account for the fact that there are continuing changes in 
the complexity of claims, in the legal requirements about what must be 
done for each claim, and in IT system capabilities.

    We consider the following options for redefining actions (step 1) 
as only two examples among the numerous possible alternative 
approaches.
    One option is to base the detailed list of actions on the four main 
types of actions proposed by the VSR Performance Standards Workgroup, 
which are initiating development, making a claim ready to rate, 
deciding an award, and authorizing the award. Within each of those four 
types of actions, the work credit values would vary to account for 
differences in complexity of claims by number of issues, types of 
medical conditions, and any other factors found to be good predictors 
of how much time the action requires.
    One advantage of this approach would be that employees could focus 
more on the actual performance of actions rather than spending time 
recording a lot of separate smaller actions. Another advantage would be 
that employees would have a lot of incentive to perform only those 
activities that make a definite contribution to completing the claim. A 
disadvantage of this approach would be that work credits would be 
``lumpy,'' by which we mean they would be relatively large but there 
would be only a few points in processing a claim at which work credits 
could be claimed. This could be a problem if there were a day or even a 
week in which a VSR was in the middle of intensive development 
activities for a large number of claims, but by chance none of the 
claims became ready to rate during that day or week because the 
external parties from whom supporting information had been requested 
were not responding. In that case, the VSR would earn zero credits for 
that time period.
    A second option is to base the detailed list of actions on a 
comprehensive list of all the individual activities that employees 
perform in the process of doing their jobs. The main advantage and 
disadvantage of this option would be directly opposite to those 
described in the first example above. Specifically, the disadvantages 
would be that not all actions make a direct contribution to completing 
the claim and that the frontline employees would need to spend time 
recording each of their many separate actions in ASPEN (Automated 
Standardized Performance Elements Nationwide). However, the advantage 
would be that this approach would produce detailed records on each 
frontline employee's specific activities, which would provide both 
frontline employees and managers with very precise information on 
exactly how much work the employees have done for any given time period 
and therefore how well they are on track to meet the month's minimum 
work credit standards.
    In addition to the seven recommended steps, we also have the 
following individual recommendations for actions that would contribute 
to the effectiveness of the work credit system:

      As discussed earlier, conducting more quality reviews 
would better communicate to staff that quality is a priority for VBA.
      If the RO internal quality reviews counted deviations 
from official procedures for claiming work credits as errors (instead 
of just as ``comments''), then that would improve adherence to 
procedures, thereby improving quality.
      If there were work credit deductions for actions on which 
there were errors, then that would improve quality.
      In the long term, if VETSNET could be modified so that it 
captures work credits automatically as a claim moves through the stages 
of processing, then that would save time for employees in recording 
their work credits, and it would ensure that work credits are logged 
more accurately and consistently across staff and ROs.
Work management system (CPI Model)

    VBA's current work management system is the Claims Process 
Improvement Model. The CPI model is not VBA's first attempt to manage 
the claims process by dividing it into separate stages and passing a 
claim along to a different person at each stage. In the 1990s, VBA was 
using a similar model called the ``unit model.'' That model resembled 
the CPI model in that employees were specialized so that the various 
functions of claims processing (e.g., development, rating, 
authorization) were performed by different people. The main difference 
between the unit model and the CPI model was that employees were not 
organized into teams in which everyone on the team performed the same 
function. Instead, each team consisted of employees who performed 
different functions so that they collectively covered all the necessary 
claims processing functions.
    In the late 1990s, there was a business process reengineering (BPR) 
effort in which a VBA guidance team analyzed the key challenges facing 
claims processing. Among those challenges were a lack of individual 
accountability and an emphasis on quantity of work over quality. The 
team's solution was a ``case management model'' in which each claim was 
handled by only one VSR and a rater who made the rating decision. VBA 
used this model until it adopted the CPI model in response to concerns 
about problems with timeliness.
    It's not difficult to see the cyclical pattern of recurring 
concerns that led to switching between two basic types of approaches 
(more vs. less employee specialization), each of which has different 
advantages and disadvantages. The key question then is which approach 
has stronger advantages than disadvantages, and based on our synthesis 
of information that we obtained from our site visits, the answer is not 
straightforward.
    The main motivation for studying the CPI model is the concern that 
quality and accountability are lacking because many different people 
are involved in processing each claim. Our analysis finds that two of 
the main distinguishing features of the CPI model, i.e., the 
specialization of VSRs and the fact that claims are passed through a 
series of specialized teams, have both advantages and disadvantages for 
the quality and timeliness of claims processing. In particular, VSR 
specialization improves quality and timeliness (compared to a model 
with less specialization but more continuity in the staff who work on 
each claim), but the movement of claims across teams reduces quality 
and timeliness. The issue is to determine whether the improvements 
outweigh the disadvantages. Thus, the net effect of the CPI model is 
unclear, which means that before making any changes to its approach to 
claims 
 **** MANUALLY BROKE PARA TO PREVENT BAD BODONI DASH BREAK 
****  deg.
processing, VBA should conduct a pilot study to confirm that those 
changes will actually produce the desired net improvements.
    At the time of our report, VBA was already conducting a pilot study 
to test an alternative to the CPI model that, based on its design, 
appears to have the potential to improve both quality and timeliness. 
Consequently, we recommend that VBA wait for the results of that study 
before deciding whether it would be worthwhile to investigate other 
alternatives.
    Specifically, VA was conducting a pilot study in the Little Rock 
RO, and one of its main elements is testing the use of claims 
processing teams (called ``pods'') that contain pre-determination, 
rating, and post-determination functions. One of the expected benefits 
of organizing employees into pods is ``improved quality resulting from 
more rapid identification and resolution of errors within the team 
(i.e., errors will be detected much closer to the point of 
occurrence)''.\5\ This approach also retains the current specialization 
of VSRs. Thus, the current pilot study is testing a model that appears 
to have reasonable potential to improve quality compared to the CPI 
model, especially if organizing employees into pods creates a greater 
sense of accountability than in the CPI model's function-based teams. 
Consequently, we do not see any reason to pilot test another approach 
(e.g., the hypothetical one we consider above) unless the results of 
the current pilot show that the use of pods does not result in claims 
processing outcomes any better than&ose obtained under the CPI model.
---------------------------------------------------------------------------
    \5\ Booz Allen Hamilton. Veterans Benefits Administration 
Compensation and Pension Claims Development Cycle Study. Final Report. 
5 June 2009.
---------------------------------------------------------------------------
    It is also important for all stakeholders to consider the 
possibility that different work management systems might ultimately 
produce similar outcomes. On our site visits, we heard from a number of 
managers who thought that the specific claim processing model is less 
important than managers' abilities in implementing it. This line of 
thinking suggests that only limited improvements could be obtained from 
changing the approach to claims processing. VA should certainly be 
using the approach that will best produce the quality and timeliness 
results it wants. However, other factors, such as certain IT 
improvements, could easily have much more impact than changes to the 
claims processing approach.
Other study topics
    In the area of IT use, VA has been proceeding with its efforts to 
increase the use of paperless processing, and that strategy seems to 
have the most long run potential for improving timeliness and quality. 
VA has investigated the possibility of using rules-based applications 
for the rating decision, but the subjective nature of many of the 
current VASRD criteria would make implementation of that approach 
extremely challenging.
    Timely development of claims is essential to the timely completion 
of claims, and VBA could improve development time by encouraging more 
use of telephone contacts to obtain information from claimants and 
third-party organizations. The best way to encourage this would be to 
provide appropriate work credit for phone development. Currently, some 
employees who use phone contacts for development report that they also 
follow up with a letter that's not always necessary because sending the 
letter is what enables them to claim sufficient work credits to meet 
their minimum performance standards.
    On the topic of claims that are ready to rate at the time they're 
submitted, we found that there are no standard practices across ROs for 
handling those claims. There is currently a pilot study to determine 
the potential for a program in which ``fully developed claims'' receive 
expedited treatment, and depending on the results of that pilot, it is 
possible that VA will establish such a program at all ROs. If it does, 
then it seems likely that any special procedures that ROs have 
developed for ready-to-rate claims would be superseded by the program 
for fully developed claims.
    Another category of claims that we were asked to address is claims 
from SI and VSI veterans. The practice reported to be effective in 
ensuring that those claims are processed promptly is to designate 
specific individuals to be responsible for following those claims 
extremely closely through all phases of processing.
    Until recently, VBA did not formally assess or disseminate best 
practices for claims processing. Instead, managers tended to learn 
about practices at other ROs through informal contacts. We heard from 
managers that they would like more access to information on alternative 
approaches that other ROs have found to be successful, but because of 
the many differences among ROs, the managers would prefer that any 
practice reported to work well at one RO be presented as a suggestion 
rather than as a requirement. In July 2009, VBA issued a standard 
operating procedure for identifying best practices and disseminating 
them on their Quality Assurance Web site. So, in the future, it should 
be easier for managers at ROs to access information regarding best 
practices.

                                 
     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 
Veterans Benefits Administration Employee Work Credit and Management 
Systems.
    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'').
    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 eighteen-year 
experience representing claimants before the Veterans Benefits 
Administration (``VBA'').

                              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'').
    Among the reports which the Act required the VA to submit to 
Congress, before the end of 2009, is a report on a study conducted on 
the effectiveness of the current VBA employee work credit and work 
management systems. Act, section 226.

                    VA COMPLIANCE WITH P.L. 110-389

    As of the date this testimony was submitted, NOVA has not seen a 
copy of the VA's required report to Congress. Moreover, as of May 1, 
2010, the VA's required report had not been submitted to Congress.

                         THE WORK CREDIT SYSTEM

    For many years NOVA's members have noticed large numbers of 
inaccurate compensation and pension decisions which we attributed, in 
part, to lack of effective training of VA employees and to their 
cursory review of claims folders.
    One of the first published studies to confirm that the VA's present 
work credit system prevents accurate decision-making was the May 19, 
2005 report from the VA Office of Inspector General, ``Review of State 
Variances in VA Disability Compensation Payments'', Report No. 05-
00765-137 (``the Report''). According to the IG, the VBA's national 
production standards which must be equaled or exceeded by each Regional 
Office (``VARO'') include, for journeyman Rating Veterans Service 
Representatives (``RSVRs''), 3 to 5 weighted cases per day, based on 
the type of claim and the number of claimed disabilities or issues 
rated; from 3 to 7 weighted cases per day for those working from home; 
and from 3 to 4 weighted cases per day for Decision Review Officers 
(``DROs''). Report, page 60.
    Sixty-five percent of those VA employees who responded to the IG's 
questions (questionnaires were sent to 1,992 rating specialists and 
DROs) reported insufficient staff to insure timely and quality service. 
More troubling is the report by 57 percent of those responding that it 
is difficult to meet production standards if they adequately develop 
claims and thoroughly review the evidence before issuing rating 
decisions. And, 41 percent of those responding estimated that 30 
percent or more of the claims were not ready to rate when presented for 
rating. Report, pages viii, 58, 60.
    An additional indictment of the work credit system is contained in 
the June 5, 2009, Booz Allen Hamilton Final Report, ``Veterans Benefits 
Administration Compensation and Pension Claims Development Cycle 
Study'' (``Booz Allen Report'') which noted that, although the work 
credit system ties employee performance standards to the system, the 
work credit system ``does not measure individual contribution to VARO 
production goals . . . [and] does not track the number of claims made 
ready to rate or the amount of time a VSR needs to prepare a claim for 
rating.'' Booz Allen Report, pages 16, 17. Furthermore, the work credit 
system is processed utilizing software known as the Access Standardized 
Performance Elements Nationwide (``ASPEN''), an automated database 
maintained on the VBA's information technology system, which relies 
upon self reporting of specific actions taken during the processing of 
a claim, for example, .5 credits for conducting follow-up work on a 
claim already in development, but 1.5 credits for sending a VCAA 
notification letter. Booz Allen Report, pages 5, 16. More specifically, 
in 2010, Veterans Service Representatives (``VSRs'') received 1.25 
credits for issuing a Veterans Claims Assistance Act (``VCAA'') 
notification letter to a veteran claiming 1 to 7 disabilities and 1.5 
credits if the veteran claimed 8 or more disabilities. September 23, 
2009, Report from the VA Office of Inspector General, ``Audit of VA 
Regional Office Claims Processing Exceeding 365 Days'' Report 08-03156-
227, page iv.
    The American Federation of Government Employees, AFL-CIO, has 
stated that work credits are not properly assigned for the various 
tasks necessary for processing a claim which causes VBA employees ``to 
short cut those tasks that are undervalued, such as additional case 
development.'' Statement of John McCray, AFGE, February 3, 2010, before 
the House Subcommittee on Disability Assistance and Memorial Affairs, 
page 5. Additionally the work credit system has led to a hostile work 
environment in which additional stress is imposed by ``arbitrary 
increases in production requirements.'' Statement of John McCray, AFGE, 
February 3, 2010, before the House Subcommittee on Disability 
Assistance and Memorial Affairs, page 2. The result of the VA's 
periodic increases in required production standards has been ``a 
dramatic drop in both accuracy and station production. . . .'' id., 
page 2.

                                ACCURACY
                            The STAR Program

    Accuracy in VBA decision-making is reported in and is measured by 
STAR, Statistical Technical Accuracy Review, which requires reviewers, 
who are VBA employees, to review for accuracy a statistical sample of 
cases worked by each regional office. According to the 2005 IG report, 
the VBA's error rate was 13 percent in 2004. Report, page 55.
    There is presently no 100 percent reliable way to assess the VBA 
accuracy rate because there are no available statistics on the number 
of incorrect rating decisions which are not appealed, nor on the number 
of partially correct rating decisions, containing incorrect effective 
dates or disability percentages, which are not appealed. Rather than 
rely on the VBA's misleading published accuracy rates, one commentator 
suggests that review of the claims which are appealed to the BVA is 
more informative. Benjamin W. Wright, The Potential Repercussions of 
Denying Disabled Veterans the Freedom to Hire an Attorney, 19 FCBJ 433, 
440 (2009).
    Statistics from the Board of Veterans Appeals for FY 2007, suggest 
a VBA error rate over four times as large as that reported by the VBA 
for those decisions which were appealed to the BVA. Thus, in 2004 it 
took on average 937 days, or 2\1/2\ years from initial appeal, or 
Notice of Disagreement, to final Board decision, see Report Chairman of 
Board of Veterans Appeals, FY 2004, page 8, http://www.bva.va.gov/docs/
Chairmans_Annual_Rpts/BVA2004AR.pdf.
    Review of the Chairman's Annual Report for FY 2007, page 20, http:/
/www.bva.va.gov/docs/Chairmans_Annual_Rpts/BVA2007AR.pdf which would be 
expected to contain decisions on appeals from those VBA decisions 
appealed in 2004, shows that, in 2007, 41 percent of the appeals to the 
BVA were denied, leaving 59 percent which were reversed or remanded 
because of errors by the VBA, not the 13 percent error rate which was 
reported in STAR.

                            The Use of ASPEN

    Another information technology system utilized by VBA to track 
performance of VSRs, RVSRs, and DROs, is the Access Standardized 
Performance Elements Nationwide (``ASPEN''). Booz Allen Report, page 5. 
Problems with this system include that it reflects a random internal 
review by a Super Senior VSR who pulls the file, reviews the case, logs 
the result in ASPEN and returns the file. Not only might the internal 
reviewer's judgment be questionable, but the delay in providing 
feedback can be as long as six weeks. The procedure discourages 
employees from revealing problems, and does not emphasize problem-
solving and root-cause analysis. Booz Allen Report, page 18.

                               MANAGEMENT

    Because the VBA changed the claim processing model from the unified 
team case management approach to the Claims Processing Improvement 
(``CPI'') model, utilizing six separate teams, and separating pre-
determination (development) from rating and post-determination and 
appeals, ``work moves in large batches to the next step before it is 
actually needed . . . claims spend time waiting in queues between 
process operations . . . [and there is] overlapping, redundant, and 
sometimes unnecessary work activities.'' Standardized step-by-step 
instructions are not provided. Team members lack immediate and 
unambiguous feedback because limited visual management cues are 
provided. Additionally, employees are ``not sure how the quality of 
their work impacts the next step in the process, or how their work 
contributes to the quality of the final product.'' Booz Allen Report, 
pages 3, 13, 14, 18.
    Not only does the use of the CPI model cause delays, but the 
present system, which requires the assignment of work to a VSR 
utilizing a system based on the last two digits of a Veteran's claim 
number, leads to short term ``backlogs and delays by not routing work 
to available VSRs,'' Booz Allen Report, page 14.
    A further inefficiency is caused by VBA's use of supervising 
managers who are not adequately trained. Statement of John McCray, 
AFGE, February 3, 2010, before the House Subcommittee on Disability 
Assistance and Memorial Affairs, page 3.

                           NOVA'S SUGGESTIONS

    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 the findings contained in the 
2005 report by the VA Office of Inspector General concerning the effect 
of the work credit system on inducing VA employees to prematurely and 
inaccurately rate claims.
    NOVA supports the Booz Allen recommendation to return to a pod team 
approach and to encourage VA employees to take the time necessary to 
process a claim correctly the first time. Further, rather than 
utilizing the present obstructing work credit system, VA employees 
should be evaluated on the correctness and completeness of their 
actions to advance the efficient, timely and accurate resolution of the 
claim. Because most of the delay in processing claims involves 
development, particularly waiting for and obtaining C&P exams, \1\ NOVA 
also suggests that 38 U.S.C. Sec. 5125(a) be amended to require the VA 
to forego obtaining an additional exam where the record already 
contains an exam sufficient for rating purposes which would result in a 
grant of the benefit requested.
---------------------------------------------------------------------------
    \1\ March 17, 2010, Report from the VA Office of Inspector General, 
``Audit of VA's Efforts To Provide Timely Compensation and Pension 
Medical Examinations'' Report 09-02135-107, pages i, 11; September 23, 
2009, Report from the VA Office of Inspector General, ``Audit of VA 
Regional Office Claims Processing Exceeding 365 Days'' Report 08-03156-
227, pages iii, 4, 8, 9; Booz Allen Report, page 12.
---------------------------------------------------------------------------
    Additionally, NOVA recommends the creation of independent quality 
control teams to monitor accuracy and efficiency and to provide the 
additional service of conducting on the job training by reviewing 
claims folders with VSRs, RVSRs, and DROs. Obviously, suitable training 
is a crucial component of a system designed to make the correct 
decision the first time. More time and resources need to be devoted to 
ensuring that all VA employees who handle claims are adequately trained 
to do their job in an accurate and timely manner.

                                 
   Prepared Statement of Ronald B. Abrams, Joint Executive Director, 
                National Veterans Legal Services Program

    Mr. Chairman and Members of the Committee:
    I am pleased to have the opportunity to submit this testimony on 
behalf of the National Veterans Legal Services Program (NVLSP). NVLSP 
is a nonprofit veterans service organization founded in 1980 that has 
been assisting veterans and their advocates for 30 years. We publish 
numerous advocacy materials, recruit and train volunteer attorneys, 
train service officers from such veterans service organizations as The 
American Legion and Military Order of the Purple Heart in veterans 
benefits law, and conduct quality reviews of the VA regional offices on 
behalf of The American Legion. NVLSP also represents veterans and their 
families on claims for veterans benefits before VA, the U.S. Court of 
Appeals for Veterans Claims (CAVC), and other federal courts. Since its 
founding, NVLSP has represented over 1,000 claimants before the 
Department of Veterans Affairs (VA) and the Court of Appeals for 
Veterans Claims (CAVC). NVLSP is one of the four veterans service 
organizations that comprise the Veterans Consortium Pro Bono Program, 
which recruits and trains volunteer lawyers to represent veterans who 
have appealed a Board of Veterans' Appeals decision to the CAVC without 
a representative. In addition to its activities with the Pro Bono 
Program, NVLSP has trained thousands of veterans service officers and 
lawyers in veterans benefits law, and has written educational 
publications that thousands of veterans advocates regularly use as 
practice tools to assist them in their representation of VA claimants.
    NVLSP has been asked to testify about the quality vs. quantity 
tension that exists in almost every production system--in the 
production of televisions, in the production of automobiles and in the 
production of decisions on claims for VA disability benefits. 
Television and automobile companies would like to produce as many 
products as quickly as they can; however their need for production is 
tempered by their certain knowledge that if they produce automobiles or 
televisions that have lousy quality people will not buy their products 
because consumers seeking televisions or automobiles have other 
choices. But veterans seeking VA disability benefits can only turn to 
the VA. They are stuck with the quality of the product the VA produces.
    As you know, there is always tension between quantity and quality. 
In fact, faced with a growing backlog caused by a surge of claims from 
OIF and OEF veterans and with the compounded impact of many years of 
premature adjudications that forced claimants to appeal or file 
reopened or repeat claims, the issue of quantity vs. quality has gained 
increased importance. Unfair, premature denials cause unnecessary 
appeals and years of delay before deserving veterans obtain justly 
earned benefits. Adjudicating many claims quickly does no good if many 
of these adjudications are premature and many deserving veterans are 
unfairly denied.
    The most important and pervasive problem facing veterans seeking VA 
disability benefits is the eagerness of some VAROs to adjudicate claims 
before all necessary evidence has been obtained. For example, some 
VAROs prematurely deny claims based on inadequate VA examinations. In 
some cases, even where the VA examiner clearly fails to respond to a 
specific question asked by the RO, the examination report is not 
returned as inadequate. Instead, the claim is adjudicated and denied on 
the basis of the inadequate report. In other instances, claims are 
denied before all service medical records are received. Other claims 
are sometimes denied before the veteran has a fair opportunity to 
submit independent medical evidence. These all-too-frequent cases of 
premature denial result from an over-emphasis on timeliness and a lack 
of accountability.
    It is clear to NVLSP that the way the VA evaluates its adjudicators 
and the way the VA awards work credit encourages sloppy adjudication 
resulting in premature, unfair denials. Therefore, the first thing 
stakeholders and those who manage the VA need to do is to admit there 
is a real and very serious problem with the quality of VA 
adjudications. NVLSP believes that the problems within the VA claims 
adjudication system are so serious that band aids (such as: paper-free 
or electronic claims processing, and a return to the team adjudication 
approach) will not be enough to fix the problem.
    NVLSP has learned that the Veterans Benefits Administration is 
considering changing how its raters and adjudicators are evaluated, and 
we eagerly anticipate reviewing these changes once they are final. We, 
however, advise the Veterans Benefits Administration not to simply make 
cosmetic changes to the quality, timeliness and output (production) 
standards for VSRs and RVSRs and expect significant improvement. For 
example, increasing the quality or accuracy standard from 83 percent to 
85 percent for a GS-9 adjudicator could be considered just a 
superficial change because the current crop of GS-9 adjudicators are 
having trouble meeting the current 83 percent accuracy rate goal. 
Unless VBA changes the current system, a system that rewards VA 
managers for premature denials, there will be no substantive change in 
the quality of work performed by the VA regional offices.
    In the opinion of NVLSP, the current VA employee and work 
management systems reflect a system that was created to serve the needs 
of the bureaucracy rather than the needs of the veteran. Veterans do 
not care about the VA need for: work credit; for productivity 
statistics; and for timeliness statistics. From the point of view of a 
veteran claimant it is just one claim even if the VARO improperly 
adjudicated his claim five times and the BVA remanded it three times 
over the course of 10 years. The primary goal of VBA should be to 
provide the best service to veterans. It makes sense that the VA work 
measurement system should reflect and support that goal. What is 
easiest for the VA bureaucracy is not necessarily best for veterans.
    NVLSP suggests that final work credit should not be awarded until 
the appellate period expires or when the BVA makes a final decision. 
That would encourage the VAROs to completely and correctly adjudicate 
claims at the earliest possible time. It would also incentivize VA 
managers to encourage their adjudicators to ``do the claim right the 
first time'' because a correct, complete adjudication would be in the 
best interest of the VA manager.
    Therefore, NVLSP suggests that the VA restructure its work credit 
and work management systems to reflect the needs of its veteran 
claimants and then restructure its bureaucracy so that veterans can be 
best served. The VA needs to balance its competing needs for timeliness 
and production with the need to provide quality service to its 
claimants.

I. The Unfair VA Work Measurement System
    The current VA work credit system prevents the fair adjudication of 
many claims for VA benefits. The current VA work credit system needs to 
be overhauled because it rewards VA managers and adjudicators who claim 
multiple and quick work credit without complying with the statutory 
duties to assist claimants obtain evidence that would substantiate 
their claims and notify claimants of what evidence would substantiate 
their claims.
    No matter how much the average VA employee wants to help the client 
population, the VA decision-making culture, fueled by the VA work 
measurement system, penalizes many VA adjudicators for doing a good 
job. The VA has created a work measurement system for deciding 
critically important claims that is driven by weighty incentives to 
decide claims quickly. How the VA measures its work and evaluates the 
performance of its employees continues to have a major impact on the 
adjudication of claims for veterans benefits.
    Responsibilities of VA managers that protect the fairness of the 
adjudicatory process--such as ``control'' of claims, supervisory review 
of unnecessarily delayed claims, thorough development of the evidence 
needed to decide a claim properly, recognition of all of the issues 
involved, provision of adequate notice, documentation that notice was 
given, and careful quality review--all adversely affect the 
productivity and timeliness statistics (that is, how many decisions on 
claims are made within a particular period of time) for the VA manager. 
Consequently, proper attention by VA managers to their legal 
obligations very often adversely affects the statistics upon which 
their performance is rated.

II. The Impact of Judicial Review
    The VA claims processing (or claims adjudication) system has been 
exposed by judicial review. To say there is a crisis in VA claims 
adjudication is an understatement. Statistics from the Board of 
Veterans' Appeals (BVA) and the U.S. Court of Appeals for Veterans 
Claims (CAVC) show that nationally, for FY 2009, over 60 percent of all 
VA regional office appeals reviewed by the BVA were reversed or 
remanded and over 80 percent of CAVC decisions on the merits reversed, 
or remanded BVA decisions. Please note that for FY 2008 the CAVC 
reversed and remanded only 63 percent of all merits decisions.
    Based on the experience of NVLSP (over 12 years of quality reviews, 
in conjunction with The American Legion, of over 40 different VA 
regional offices combined with extensive NVLSP representation before 
the CAVC), the most egregious VA errors are a result of premature 
adjudications. For example, many errors identified by Legion quality 
reviews reveal that VA adjudicators failed to even try to satisfy its 
statutory duty to assist the claimant by obtaining the evidence needed 
to substantiate the claim, and incorrectly accepted and prematurely 
denied claims based on inadequate evidence (especially inadequate VA 
medical examinations).
    I have been told by a variety of VARO officials that because of 
pressure to produce end products and reduce backlogs, they 
intentionally encourage the premature adjudication of claims. This 
statement is based on my experience as a VA employee, and based on my 
experience as a member of the Legion quality review team.
    Fixing the VA work credit system is a topic that is near and dear 
to my heart. I have been involved in various aspects of veterans law 
(working for the VA and then NVLSP) for about 35 years. My experience 
tells me that unless the system is corrected most well-meaning attempts 
to improve VA claims adjudication will not be successful because the 
driving force in VA adjudication will continue to be claiming quick 
work credit.

III. The Inadequate Quality of VA Adjudications Is a Major Influence on 
        the Size of the Backlog
    It is clear that the quality of VA adjudications is not 
satisfactory and is a major contributor to the size of the backlog. 
Because many claims are improperly denied, because many VA adjudicators 
are inadequately trained, because many VA regional offices are 
improperly managed, because many VA regional offices are inadequately 
staffed, and because VA Central Office management has not acted to fix 
these problems in any meaningful way, many veterans and other claimants 
for VA benefits have to file unnecessary appeals, wait several years 
for a BVA remand, and wait for the VA to obtain evidence that should 
have been requested during the original adjudication of the claim. 
These appeals clog the system and create unneeded work for the VA. Of 
course, it would have been better for the VARO to do the work correctly 
the first time.
    The VA is now receiving many claims submitted by OIF and OEF 
veterans. These claims will obviously increase the backlog and increase 
VA workload. Dealing with this wave of claims will become especially 
daunting if many of these claims are improperly denied in an effort to 
artificially decrease the backlog and improve VA managers' timeliness 
and productivity statistics. This makes it even more important that the 
VA adjudication system be improved now.
Potential Solutions
    The VA work measurement system has to be overhauled. H.R. 3047 
which, in Section 2 would change when VA regional offices (VAROs) can 
claim work credit, was a good bill that would have accomplished this 
goal. NVLSP looks forward to reviewing the overdue VA report that was 
mandated by P.L. 110-389.
    The VA needs to acknowledge the complexity of its claims 
adjudication system and continue to increase the number of adjudicators 
to work these claims. The following suggestions should be considered:

      The VA should be required to submit to an independent 
quality review to validate the quality of work performed in the 
individual VA regional offices.
      The grade levels of VA raters and Decision Review 
Officers should be raised and these employees should be held 
accountable for the quality of their work.
      Even though additional adjudicators have been hired, 
Congress needs to continue to provide additional funding for more 
adjudicators if the workload requires more adjudicators. The additional 
adjudicators, once properly trained, should help prevent the VAROs from 
brokering cases (sending cases from one VARO with too much work to 
another VARO). In the opinion of NVLSP, brokered cases are less 
accurately adjudicated than most cases and cause continuing problems 
for the originating VARO.
      The VA should consider going back to the ``team'' concept 
in the VAROs.
      Adjudicating from electronic records is a laudable goal 
if complete records can be obtained and if the database permits logical 
searches.
      Finally, the adjudication culture at the VAROs needs to 
be changed. Many VA managers act like they are producing widgets rather 
than adjudicating claims filed by real people. Their goal should not be 
just prompt adjudication; the goal should be a timely, accurate and 
fair adjudication--which in the long run is the fastest way to finally 
adjudicate claims.

    I want to stress that NVLSP is not demanding perfection from VA 
managers and adjudicators. NVLSP, however, feels that unless the VA 
changes the way it counts its work, there will be no significant 
improvement.

    Thank you.

                                 
   Prepared Statement of James D. Wear, Assistant Director, National 
    Veterans Service, Veterans of Foreign Wars of the United States

    MR. CHAIRMAN, RANKING MEMBER LAMBORN, AND MEMBERS OF THE COMMITTEE:
    On behalf of the 2.1 million men and women of the Veterans of 
Foreign Wars of the U.S. (VFW) and our Auxiliaries, we appreciate the 
opportunity to present our views before you today. The Veterans 
Benefits Administration's (VBA) work credit and management systems 
deserve careful review by Congress. The VFW applauds this Subcommittee 
for using its oversight authority to examine the incentives within VBA 
that pit ``Quality vs. Quantity.''
    Further, the VFW compliments Secretary Shinseki's leadership team 
for VA's Open Government Plan. We fully support all efforts to 
transform VA into a people-centric, results-driven, forward-looking 
organization. We welcome every opportunity to work with Secretary 
Shinseki to encourage a transparent, participatory and collaborative VA 
that places veterans and their survivors at the center of every 
decision.
    The VFW's chief concern today is the very real perception that VA 
puts more emphasis on the number of claims that are processed than the 
accuracy of those claims. This is validated by VA's own measures in the 
``Monday Morning Report,'' as well as by many VA Office of Inspector 
General (IG) reports. Secretary Shinseki's goal of rating all claims 
with 98-percent accuracy in under 125 days is extremely laudable, but 
the VFW would be ecstatic if VA could just reach the 98-percent goal 
with the current average wait time of 165 days.
Workload & Management Systems
    Claims submitted to VA are tracked by the assignment of a discreet 
identifier called an ``end product.'' VBA's work management and 
measurement systems have various subsystems to track the age of each 
pending end product, to track the various development and rating 
actions taken in end products, and the number of end products 
completed. VBA's work management system tracks all computer actions 
taken on pending claims by service center employees.
    In our view, the major focus for VA must be on management systems 
reform and fostering a culture change in VBA. As indicated above, VBA 
has management and work measurement systems that have been in place 
with only minimum changes for decades. There is a systematic review of 
the basis used for these management and work measurement systems being 
conducted, but the results have not yet been released.
Quality Measurement
    The current system employed by the Department of Veterans Affairs, 
Systematic Technical Accuracy Review (STAR), to analyze and determine 
accuracy in promulgated claims decisions was created and deployed in 
1997. The system determines accuracy by using analytic statistics over 
the previous 12 months. This is identified as a ``rolling 12'' since 
each current month that is added results in dropping the oldest month. 
When STAR was first used, the accuracy rate was 64 percent and is 
currently 83 percent. Although there has been an increase in overall 
accuracy, it is far from an acceptable standard.
    The system is based on a random selection of promulgated decisions 
(rating, authorization and fiduciary) under specific rating indicators 
or ``end products.'' Therefore, not every decision of a claim is 
subject to the review. Cases are requested from each regional office 
based on size. It is very difficult to obtain a reliable sample size. A 
truly representative sample for the larger offices would require many 
additional reviewers. The current sample size for the ``National 
Average'' in rating decisions is 13,199 cases for 57 regional offices 
for the past 12 months. The current sample size for the ``National 
Average'' in authorization decisions is 8,251 cases for 57 regional 
offices for the past 12 months.
    The system is based on the concept that a decision is either 
entirely correct or entirely wrong. No longer are there classifications 
of errors from mere procedural to substantial. Once an error is called 
and the regional office notified, there is a time period (usually 60 
days) in which the regional office may request reconsideration of the 
error. It is their responsibility to ``make the case'' that the 
decision was not incorrect. Since an error can be reversed within a 
period of time, the accuracy rate reflects a period of time that is 3 
months delayed. In other words, the report issued in early February 
covers decisions ending in November 2009. This time delay affects the 
validation of the numbers.
    The group of employees, considered to be staff of the Compensation 
and Pension Service in VA Central Office, is located in a separate 
facility in Nashville, Tennessee. Each expert consultant is tasked with 
a ``second look'' at cases with identified errors to insure corrective 
action is completed based on the error. This is assigned on a rotating 
basis as ``other duties as assigned'' and not their primary priority.
    There are some deficiencies in this analysis of completed claims. 
Since it is a random selection of certain types of actions, it is only 
those identified actions that determine the error or accuracy rate. For 
example, a claim is identified for review based on a completed action 
in April 2009. That action is completed according to current policies 
and regulations. However, the consultant discovers an erroneous action 
taken in January 2006. The consultant has the responsibility to 
identify that error and direct corrective action under a ``comment'' 
rather than a formal error call. That action must be completed, but 
does not figure into the overall accuracy rate.
    There is one big deficiency to this system that constantly presents 
a major problem to VA. No one learns from their mistakes. The STAR 
system was designed to enhance training and knowledge. Each regional 
office is treated as an individual office and not part of a larger 
quality control system. It is true that the VA ``intranet'' has links 
for regional staff to review the number and type of errors being called 
but there is no mandatory training of personnel. Identification of an 
error without a clear instruction or resolution is of no value. Each 
individual rating or authorization decision maker very rarely is 
counseled on their individual quality. Therefore, they believe that 
they were not responsible for any mistake. The overall accuracy rate 
may be part of the performance standards for managers and directors, 
but an individual employee is graded on a ``pass/fail'' standard. VA 
willingly admits that production is ``job one.'' Training is the first 
casualty in the war of the pending backlogs. The nature of the work has 
become extremely complicated and training should be absolutely required 
for all decision makers. Regular and serious training will not only 
stop the slide, but will actually enhance individual skills. The 
training in an open and serious environment will also benefit all VA 
staff who interacts with veterans. All such training efforts should be 
thoroughly documented for all interested parties.
Suggestions for Improvement
    Quality must be incentivized as the primary component of all VA 
workload and management systems. The current systems are self-imposed 
VA models that do not have incentives built in to reward accuracy or to 
correct poor decision-making. The VA must consider the individual 
training needs of each employee and each regional office in all future 
work-credit systems. VA leadership must be able to quickly and 
accurately identify the items that need additional training on the 
local level.
    The current VA nationwide accuracy rate is 83 percent, which ranges 
from 92 percent at the best Regional Office in Des Moines to a 67 
percent worst in Baltimore. All of which still fails to achieve 
Secretary Shinseki's 98-percent accuracy goal.
    The VFW previously suggested that ratings quality could be improved 
by instituting a two-signature review on every claim before the rating 
decision is finalized. The management at the Baltimore Regional Office 
recently decided to start doing two-signature reviews on all actions, 
ratings and authorization. We will be watching carefully to see if this 
practice improves their accuracy rate.
    The VFW strongly supports partial rating decisions, thus allowing a 
veteran immediate financial assistance and access to medical care, 
while promoting the further development of the complete claim. However, 
VA must grant work credit for partial decisions to incentivize VA 
employees to utilize this practice. With the advent of an electronic 
claim, individual issues will be more easily tracked. Most claims are 
comprised of multiple conditions/issues. Currently, a claim cannot be 
counted as a completed end product until all claimed conditions have 
been addressed. Further, veterans cannot be paid until a condition or 
issue is granted. With the tracking of individual issues, both work-
credit and compensation may be awarded as the claim undergoes further 
development and is finally completed.
    VBA leadership needs to reward quality and accuracy. VA must 
examine each process and decision point and reengineer them to reduce 
the opportunity for error. Make each decision more difficult to get 
wrong and errors will be reduced. Regional Offices and individuals with 
high quality and/or accuracy ratings should be rewarded for their work. 
The VA management team should focus on changing the culture in VBA so 
that quality rules, without exception. VBA should emphasize processing 
an issue correctly the first time.
    Finally, VA collects timeliness data to monitor the ability of 
every office to complete claims within certain pre-established goals. 
The VFW believes VA should share this information with new claimants 
via e-mail or letter. Just as many commercial service centers inform 
telephone callers that ``your call will be answered in 3 minutes,'' it 
should be just as easy for VA to use real-time information on how long 
it normally takes to process original compensation claims from, for 
example, Montgomery, Alabama, which would be 250 days. While that is 
far too long to process a claim in any world, the veteran would still 
be knowledgeable of the average length of the wait.
    Mr. Chairman, this concludes my testimony. I would be happy to 
address any questions you or your committee may have. Thank you.

                                 
 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 efforts 
of the Veterans Benefits Administration (VBA) to properly balance 
quality and quantity in their work credit and work management programs. 
Too often, VBA has attempted to manage an ever increasing workload by 
emphasizing production to the detriment of accuracy. We commend this 
Subcommittee and Congressman Hall for holding today's hearing which 
focuses on this very important issue and how VBA's work credit and 
management systems impact the claims backlog.
    Let me note at the outset that in preparing for today's testimony, 
we lacked some information that could have better informed our 
testimony. Specifically, I am referring to the report on the work 
credit and work management system required by Section 226 of Public Law 
110-389, Veterans' Benefits Improvement Act of 2008, which was due to 
Congress over 6 months ago. It is our understanding that the Center for 
Naval Analysis (CNA) presented this report to VBA last November, but 
that it has remained at the Department of Veterans Affairs (VA) for 
their review and concurrence.
    In addition, VBA has just recently implemented new performance 
standards for Veterans Service Representatives (VSRs) that 
significantly change the work credit system for employees performing 
triage, development and post-development work on claims for benefits. 
We understand that new performance standards for Rating Veterans 
Service Representatives (RVSRs) are also due to be released shortly. We 
look forward to hearing VBA's explanation for how these new standards 
were developed, how they will be implemented, and what effect they will 
have on both the quantity and quality of work produced by VSRs and 
RVSRs.
    Mr. Chairman, like you, DAV remains concerned about the large and 
growing claims inventory, or backlog, that VBA is managing. However, we 
caution the Subcommittee that the backlog is not the problem, nor the 
root cause of the problem; rather it is a symptom. It is akin to an 
individual having a fever. While one can take aspirin to reduce the 
fever, unless the underlying condition that caused the fever is 
treated, the fever may return and the patient's condition may worsen. 
So too it is with the claims backlog. The underlying condition is a 
broken claims processing system that leaves too many veterans waiting 
too long for rating decisions that are too often wrong. Until we 
address the root problems within that system that resulted in the 
backlog--lack of quality, accuracy and consistency--no matter how 
quickly claims are processed, the problems will remain and the backlog 
will return.
    For this reason, we believe that the best and only approach that 
will work is one that emphasizes quality at every stage of production. 
To achieve this outcome, it is essential that we examine the system of 
incentives and accountability for employees, management and leadership.
    Mr. Chairman, I am sure you and other members of this Subcommittee 
have heard Secretary Shinseki say that he intends to ``break the back 
of the backlog this year.'' The way this will be measured is through 
VBA's Monday Morning Workload Reports which contain measures of 
production, but not accuracy or quality. Since this is the only set of 
numbers that consistently makes its way into the consciousness of 
Congress and the media, it is not surprising that the backlog has 
become the focus of each, and thus VBA's leadership has a great 
incentive to reduce the backlog, which logically leads to an emphasis 
on production. However, producing more inaccurate decisions will not 
reduce the backlog; it will increase it and further clog the appellate 
process.
    Similarly, looking at VBA's Dashboard, which provides the current 
performance statistics for each VA Regional Office (VARO), the measures 
reported are primarily related to pending work inventory and production 
times. There are few measures of accuracy included in the Dashboard 
reports, and those are based upon 12-month rolling averages from 
national STAR reviews. Improvements to these quality measures would 
take many months to show up, whereas changes in production would be 
more easily influenced by management decisions about resource and work 
allocation. Given the directive from leadership to ``break the back of 
the backlog,'' it is not surprising that VARO management focuses 
heavily on production, rather than accuracy or quality.
    Given leadership and management's focus on production, it is not 
surprising that employees--VSRs and RVSRs--feel tremendous pressure to 
meet production goals. While accuracy has been and remains one of the 
performance standards that must be met by employees, there is reason to 
believe that the work credit system creates incentives for them to 
favor production over accuracy.
    Performance standards are the most important factor in determining 
the incentives for employees. If the standards either directly or 
indirectly reward production over quality and accuracy, we must expect 
employees to work first toward production goals. Although we have not 
heard VBA's explanation of the new performance standards, nor seen the 
CNA study on the work credit system, we were able to get a copy of the 
new VSR performance standards and offer the following observations and 
concerns about this significant change.
    The new performance standards have streamlined the measures of 
production for VSRs from what had been 63 categories of weighted work 
activities to five production categories now called ``outputs.'' 
Essentially, a VSR will receive one ``output'' credit for completing 
each stage of the work process: initial rating development, initial 
nonrating development, ready for decision, process award/decision and 
authorize award. It appears that this system is designed to emphasize 
moving claims quickly towards completion by eliminating the piecemeal 
work credits that were based upon each activity related to development 
that was completed.
    The new system provides no work credit for Congressional inquiries, 
Freedom of Information Act requests or conducting personal interviews. 
It also appears to eliminate work credit for appeals related 
activities, such as supplemental statements of case (SSOC).
    We have been told that the old work credit system created 
opportunities for ``gaming'' the system, such as delaying requests for 
routine future exams, in order to gain additional work credits. 
However, we are now concerned that the new streamlined system of 
measuring only ``outputs'' may inadvertently create incentives for 
cutting corners, since more complex cases get no more credit than 
simple cases.
    In addition to output, there are three other ``Critical Elements'' 
in the new VSR performance standards: Quality, Timeliness, and 
Training. We certainly agree that each of these are essential to 
improving the benefit claims processing system; however, we do have 
questions about how these new standards will produce more accurate and 
timely claims.
    We note that VBA has increased the accuracy standard for VSRs and 
we certainly agree that accuracy, even by the national STAR measures, 
remains too low. However, it is not clear how raising the standard in 
and of itself will result in increased accuracy. We also remain 
concerned about how reliable the employee reviews will be for measuring 
quality. We have testified previously that coach reviews of five cases 
per month are not accomplished 100 percent of the time, and in many 
cases coaches do not have sufficient time to comprehensively review 
each case. As a consequence, we do not have confidence that employees 
performing below or above standard will be consistently measured. 
Employees in need of extra training and individualized mentoring may 
not get the attention they need to become more effective. We are also 
concerned that these local quality reviews may be significantly 
different from station to station.
    We continue to note that VBA does not have a unified system for 
aggregating and analyzing the results of both the coach reviews and the 
STAR reviews in order to provide trend analysis for both quality 
control improvements and for development of new training instruments.
    Under the new VSR performance standards, ``Timeliness'' will be 
established locally by each VARO based upon end of year station 
targets. While we recognize that cycle times vary from station to 
station due to workload and inventory, we question whether it is 
reasonable to have employees at different stations being held to 
different standards for the same work. We also have questions about 
whether cycle times, which include wait periods and work volume, are 
the most reasonable measure for holding VSRs accountable. For example, 
is the cycle time for average days awaiting evidence a fair measure 
since the submission of evidence is not in the control of the VSR?
    VSRs will also now be held accountable for meeting the ``Training'' 
standard. We question whether this should be a management 
accountability standard more than an employee standard, since training 
is critical to keeping staff informed of the evolving nature of claims, 
whether it is new presumptive service conditions, changes in public law 
or recent Court cases. Given some reports we have heard from the field 
about management pressuring employees to cut back on time for training 
to meet production goals, how is management held accountable for 
training being properly implemented?
    Mr. Chairman, we congratulate you and the Subcommittee for holding 
today's hearing raising the critical issue of quality. We will continue 
to work with you and others to help create a culture at VBA that 
measures and rewards the quality and accuracy of results, not just 
quantity, and provides sufficient training of VA's management and 
workforce in order to achieve this outcome.
    That concludes my testimony and I would be happy to answer any 
questions the Subcommittee may have.

                                 
       Prepared Statement of Ian C. de Planque, Deputy 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 American 
Legion on the importance of accuracy in the veterans' benefits system. 
The Department of Veterans Affairs (VA) has maintained, as stated by 
Acting Undersecretary for Benefits Michael Walcoff in a January 3, 2010 
appearance on CBS's 60 Minutes, that: ``We stress over and over again 
to our employees that quality is our number one indicator, that that's 
absolutely a requirement for successful performance.'' However, even 
cursory examination of actual operations shows that a far greater 
emphasis falls on the quantity of claims processed than the accuracy 
with which those claims are processed. VA Secretary Shinseki has 
recently set forth a bold goal of elevating the accuracy rate to 98-
percent, while slashing the time of processing those claims to a state 
in which no claim would remain in the system unfinished for more than 
125 days. In short, VA means to eliminate the backlog while eliminating 
error. If such a thing is possible, it would obviously be of great 
benefit to the veterans of America; however, if such a plan has any 
chance of being effective, it must start with the quality component. 
Otherwise there is little hope of providing real benefits to veterans.
    Quality is essential because of the sheer scale of the matter. By 
VA's own admission, in 2010 and 2011 and beyond, they will be 
processing in excess of a million claims a year. With volume such as 
this, even an error rate of 1 percent represents 10,000 claims 
incorrectly processed. Recently, VA's most optimistic accuracy 
projection was 87 percent. This number was challenged by the VA Office 
of the Inspector General (VAOIG) as being highly optimistic and at 
least 10 percent higher than the actual figure. However, even relying 
on this inflated number, when one small component of the upcoming 
claims challenge is examined, the impact is potentially staggering. VA 
expects approximately 200,000 veterans with Ischemic Heart Disease to 
file claims under the new regulations regarding Agent Orange in 2010. 
Going by the optimistic error rate of 13 percent, this still means 
26,000 of those veterans will have their claims improperly processed.
    Errors at VA impact thousands of veterans every year. A veteran who 
struggles to earn an income because of a service-connected disability, 
an error that denies service-connection for that disability can be the 
difference between getting by and becoming one of the over 100,000 
homeless veterans in America today. Errors affect lives. It is 
essential that the removal of errors from the system be the highest 
priority of reform.
    Testimony from the American Federation of Government Employees 
(AFGE) representatives before this Subcommittee, as well as comments 
during personal interviews conducted during American Legion Quality 
Review visits to Regional Offices, has spoken of the overarching 
pressure to ``make the numbers for the week''. VA employees are charged 
to complete a minimum of 3.5 claims per day, often more in some 
Regional Offices. This pressure leads to the conundrum faced by a VA 
rater at one Regional Office who, during the interview process of an 
American Legion Quality Review, gestured to a claims file five inches 
thick and stated, ``That's one of my fellow veterans there. I have less 
than two hours to go through that claim. How am I giving that guy 
justice?'' The employees want to get the job done right. VA employees 
want to take pride in their work and be accurate. They want to help 
veterans. However, the pressures brought about by volume are making it 
increasingly difficult for those employees to do so.
    To resolve the issue, VA will have to go through a several step 
process, yet none of these steps are insurmountable. VA must begin by 
making quality the foundation upon which all else is based. They can 
make better use of triage techniques to help manage the time 
constraints that quality demands. Finally, VA must commit to accuracy 
as a greater measure of success than quantity of claims processed.
    VA is in the process of testing multiple pilots across the country 
to determine the most effective operating procedures in their Regional 
Offices. Whether it is the ``Lean Six Sigma'' pilot in Little Rock, the 
electronic office pilot in Providence or one of the many others, these 
pilots all have the same aim--to improve how VA operates and to create 
a better system. However, even in these efforts, the goal is increased 
speed in processing as the ``Prime Directive.'' Clearly, VA is 
interested in transforming the office environment and thus there is no 
better time to ensure that this transformation is built upon a solid 
foundation--accuracy.
    Quality takes time. It takes time to do something right. However, 
when something is done properly in a repetitive manner, speed will 
derive from the smoothness. Familiarity breeds speed. When an employee 
develops speed due to quality and effectiveness, they are developing 
speed with the proper procedure. As the system currently works, there 
are errors rampant within the processing system. This is compounded by 
tremendous pressure placed on VA by veterans' and military service 
organizations; private citizens; the media; and Congress to eliminate 
the backlog. Perhaps the focus should be on quality the first time and 
not the backlog itself. New tools, such as electronic office measures 
to operate in a paperless environment, are touted as the solution to 
increase timeliness. However, unless the transformation of the 
operating environment is fundamentally changed to an environment based 
on quality, VA will only be processing mistake-ridden claims . . . 
faster.
    Ingrained in military training is a well-known maxim that ``if you 
do something right, the speed will follow.'' It is the principle of 
crawl, walk, run. Take the time to learn the procedure right the first 
time, each successive time that the task is performed, speed can and 
will be increased. The important difference is that proficiency and 
speed will be increased under a proper operational model.
    VA has increased hiring due to additional monies provided by 
Congress. As the existing workforce is being displaced through 
retirement, VA is in a position to, through training of the new 
employees, create a core group that will be the foundation of VA going 
forward through the 21st Century.
    Taking the time to do claims correctly and inculcate this mindset 
of attention to detail will, in fact, temporarily increase the existing 
backlog. Some of this process may require a more sympathetic eye 
towards a slower pace of reduction. Most veterans could agree that a 
little longer time for a claim, if it is done properly, is a small 
sacrifice to pay for a system that will be better and better for many 
years to come. A little more patience is required for a job done right. 
If your choices are swift, but shoddy work vs. deliberate, but accurate 
work, many would vote for accuracy every time. Errors take years, not 
hours, to correct.
    Still, there can be improvements in the overall system that will 
help create the necessary time to get the job right. In a more 
efficient system, time can be better allocated to get the right amount 
of time to the claims that demand additional time. With a better system 
of triage, simple claims which require little or no development can be 
fast-tracked, allowing for a greater portion of time to be allotted to 
those claims that justifiably demand more intricate attention. VA can 
identify claims, such as presumptive disorders, submitted with private 
medical evidence. These claims can be granted immediately with an 
interim rating, allowing for the lion's share of development time to be 
undertaken after veterans are integrated into the system and receiving 
their earned benefits, such as health care for their condition.
    A simple claim seeking an increased rating for hearing loss, which 
should require little development, can be performed in short order. If 
VA seeks to maintain their present rate of three to four claims a day 
per employee, triaging claims to account for simple claims that can be 
accomplished relatively quickly will provide more time for those claims 
that have more issues or are more complex. In this manner, the overall 
numbers should continue to be relatively the same, or even improve, if 
a more efficient system of directing claims to where they can be 
processed most effectively can be implemented.
    All of this will be in vain, however, if VA continues to track 
success primarily by the number of claims processed. VA regularly 
reports the number of claims processed and the number of claims pending 
in their Monday morning workload reports. These reports are silent as 
to the accuracy of claims being processed in the offices and in the VA 
overall. This is a clear indication of what matters. Human nature 
dictates that employees will work to the acceptable standards put forth 
by management. If management stresses numbers, then numbers are what 
employees will strive to accomplish. If management stresses accuracy 
and judges employees based on accuracy, then the incentive to cut 
corners will disappear, and employees will exercise more caution to 
ensure they aren't falling behind in accuracy.
    Similarly, if management is judged on the volume that their office 
produces, and little attention is paid to the quality of work, managers 
will respond with greater emphasis on volume to their employees. 
Currently, there is a single component devoted to accuracy rate in 
management evaluation, the greater emphasis is on performance, and 
thus, whether management receives bonuses is based on the volume of 
claims moved through the office. As long as this state of affairs 
persists, then quantity is what will be produced, often at the expense 
of quality.
    The American Legion has long supported a change in the manner in 
which VA counts their production. The American Legion continues to 
advocate for a system that is based on quality determined by the final 
adjudication of the claim. This is based on a belief that the current 
emphasis on numbers creates an atmosphere of substandard quality and 
cutting corners, and that, as much as any other factor, contributes to 
claims remaining in the system for long periods of time, thus leading 
to the backlog of claims VA is currently operating under.
    The American Legion believes that the backlog is not the problem. 
The backlog is merely a symptom of the problem. Much as an infection in 
the body leads to a fever, the infection of poor quality work in VA 
leads to the backlog. If you treat the infection, the fever will 
reduce. If you improve the quality of decision-making in VA, the 
backlog will diminish.
    The media is full of reports of veterans who fight years and years 
in the VA system for benefits they are entitled to receive. The 
constant refrain from frustrated veterans is that VA is delaying and 
denying and waiting for them to die. A veteran's claim is not an 
initial claim, if it is languishing in the system for multiple years. 
VA's average processing time for an initial claim hovers around 6 
months. While many of these initial claims can exceed a year, multiyear 
claims are almost exclusively claims that have been appealed through 
the higher levels of VA's adjudication system.
    When a claim is reviewed by the Board of Veterans Appeals (BVA) 
many years after the initial claim has been filed and appealed and made 
its way to Washington, DC, that claim is commonly remanded or returned 
to address simple procedural errors that were made at the Regional 
Office. Many of these claims are won once the proper procedure has been 
followed. The end result is that a veteran with a legitimate claim has 
waited now for three to 4 years or more to be granted a claim that 
would have been won in the Regional Office had the Regional Office only 
done its duty properly the first time.
    To understand the scale of the appeals problem, it is again 
important to consider the numbers involved. If VA is processing 
approximately one million claims a year, and approximately 10-15 
percent of veterans are appealing these claims simply because of poor 
decision-making and failure to adhere to the required procedures, then 
approximately 100,000--150,000 cases are being recycled into the system 
every year. These are hundreds of thousands of claims that would not be 
a part of the backlog had VA done the job properly when given the first 
opportunity to do so.
    It is this cycle which must stop if the backlog is ever to be 
cured. By minimizing, or better yet eliminating errors at the Regional 
Office level, the number of appeals and thus the number of claims 
destined to languish many years in the system will be massively 
diminished. This is the goal VA must strive for.
    VA's frequency of error has created a gulf of distrust between this 
Federal agency created to help veterans and the community of veterans 
that they have been directed to serve. Veteran confidence in the VA's 
ability to correctly process their claim is very low. However, this 
trust is not lost, merely damaged, and with diligent effort on the part 
of VA it can be restored. In the 1970s the Veterans' Health 
Administration faced a similar lack of confidence in their ability to 
serve the veterans' population. A major overhaul was required to regain 
the public trust.
    The American Legion monitors the VA health care system through our 
annual System Worth Saving reports. What has been shown is a renewed 
confidence in VA health care. Many veterans speak proudly of the care 
they receive through VA and the quality of that care. Patient 
satisfaction is among the very best in the entire health care industry, 
public and private. There are still problems within that system, and 
there is always much work to be done. However, the example of this 
transformation and VHA's ability to regain some measure of trust within 
the veterans' community is indicative that it is not too late for the 
Veterans' Benefits Administration (VBA) to similarly embark on a great 
campaign to regain the trust of the veterans that they serve.
    The present administration of VA under Secretary Shinseki has set 
bold expectations and shown promising signs. The candor with which they 
admit to the grave flaws within the system and the necessity of change 
is both refreshing and admirable. Whether or not the reality of this 
transformation within VA will conform to this mission statement remains 
to be seen. VA has recently announced changes to their internal work 
credit system. Information on exactly what these changes constitute is 
currently slim, yet hopefully will be revealed in the near future. 
Whether these changes will be real changes with a chance to positively 
support an emphasis on quality or simply window-dressing covering a 
continued emphasis on pure volume remains to be seen.
    With the positive mission laid out by Secretary Shinseki, perhaps a 
situation of distrust may be moved to one of ``trust, but verify''. 
There is, to be sure, a great deal of damage that has been done to the 
state of trust by an ongoing culture of volume over accuracy. When 
veterans look to the system designed to support them, they too often 
experience only a cold, unfeeling bureaucracy that treats them as a 
number and pays little attention to getting their claim done ``right''. 
If a mistake is made, then what are the consequences? Veterans do not 
see consequences for errors, but experience the dramatic impact on 
their life and well being. This must change.
    VA stands on the brink of a major transformational effort. There is 
no better time than the present to rebuild this system on a bedrock of 
quality and accuracy. There is no better time to repair the lost trust 
with the veterans' community. A demonstrable dedication to quality 
above all else would go a long way towards doing so.
    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 Jimmy F. Sims, Jr., Rating Veterans Service
          Representative, Winston-Salem, NC, Regional Office,
    Veterans Benefits Administration, and Shop Steward, Local 1738,
       American Federation of Government Employees (AFL-CIO), and
                 AFGE National Veterans Affairs Council

    Chairman Hall, Ranking Member Lamborn and Members of the 
Subcommittee:
    Thank you for the opportunity to share the perspective of the 
American Federation of Government Employees (AFGE) and the National 
Veterans Affairs Council (VA Council), the exclusive representatives of 
Compensation and Pension Service (C&P) employees of the Veterans 
Benefits Administration (VBA), regarding the critical need to overhaul 
the current work credit and work management systems.
    The work credit system is the essential building block for managing 
work and evaluating performance. This system must be developed on the 
basis of 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.
    The studies that form the basis of work credit systems are widely 
used in industry to increase productivity and known by terms such as 
``business efficiency'' or ``time and motion'' studies. AFGE and the VA 
Council are aware of only one extremely limited attempt by VBA to 
conduct a study along these lines but it failed to produce any useful 
findings. Management placed a software program on a sampling of 
employees' computers in an undetermined number of ROs, with no 
explanation of how they selected the sample. The data was collected by 
a program appearing on the screen every few hours to ask what the 
employee was doing. The program did not differentiate between employees 
working on a single claim and multiple claims, thereby leading VBA to 
continue to create flawed work credit and work management systems based 
on incomplete data retrieved.
    A study of VBA's work credit and work management systems was 
mandated by P.L.110-389, but we fear that when completed by the 
contractor, this long overdue study will not produce adequate data. It 
is very troubling that once again, VBA did not solicit input from 
employee representatives.
    The performance standards that comprise the work management system 
are only as good as the underlying work credit system. Pursuant to an 
agreement between VBA and AFGE and the VA Council, national performance 
standards to boost VSR productivity were put in place in 1997, and were 
later revised in 2003, again in 2005, and most recently this spring.
    AFGE and the VA Council have long taken the position that VBA is 
contractually barred from raising local production standards above the 
national standards. VBA's insistence on allowing ROs to set their own 
local standards has led to harmful inconsistencies and low morale. For 
example, a RVSR assigned to the Seattle Regional Office may be required 
to produce 5.25 weighted cases per day, where a RVSR assigned to the 
Winston Salem Regional Office may be required to produce 4.0 weighted 
cases. Consequently, RVSRs in Seattle have to complete 6 single 
weighted action cases, while RVSRs in Winston-Salem only have to 
complete 4 cases, to meet the local standard.
    The underlying problem is that production standards for VSRs and 
RVSRs appear to be based more on politics and bonuses rather than on 
the goal of processing today's complex claims in an accurate and 
complete manner. VBA managers, many of whom have not adjudicated a 
claim for many years (or never), define performance largely in terms of 
inventory and days pending completion of a decision. Our members 
working on the front lines report that when they meet RO production 
goals, they have been ``rewarded'' with arbitrary increases in 
production standards for the following year.
    VBA has not adjusted individual employee production standards to 
reflect the increasing sophistication of our claimants, the complexity 
of claims and continued changes stipulated by regulation. Employees are 
subjected to arbitrary and unreasonable production standards that lead 
to inefficient and incomplete claims development. As a result, issues 
are missed, evidence is ignored, and decisions are rushed. All of this 
results in poor service to our claimants and is contrary to the VA's 
mission.
    The current standards discourage complete and accurate claims 
development by denying employees credit for completing work on 
essential tasks. The following are some of the many examples of 
essential work that VSRs and RVSRs perform for which they receive zero 
credit: (We can provide more examples at your request)

    1.  VSRs receive zero credit for Triage and Public Contact work 
because the new VSR Performance Standards only allow credit based on 5 
criteria (instead of 60);
    2.  RVSRs get zero credit for additional development directed or 
completion of VA examination requests, even though both may require 
multiple hours of production time to complete;
    3.  Under the previous standards, VSR would receive full credit for 
all tasks (``End Products (EP)''). Under the current VSR standards, 
employees can receive zero credit for work completed. For example, a 
VSR on the Post-determination team receives a rating to promulgate a 
reopened claim (EP 020), and the veteran requests to add a dependent 
(EP 130). In addition, VBA proposes to reduce the rating of one of the 
veteran's service-connected disabilities (EP 600). The employee would 
only receive credit for the 020, while completing the other actions for 
zero work credit.
    4.  VSRs get zero credit for any supplemental development, i.e. all 
aspects of the claim following initial development actions at the time 
the claim is established. The only other credit is applied at the time 
the claim is established as Ready for Decision. For example, RVSRs may 
send the case back to ``cut'' (request) the correct exam. (This is 
occurring more frequently because VSRs are being asked to write opinion 
exams and perform other complex work without adequate training, thus 
causing more requests for the wrong exams). In this case, the VSR is 
forced to remove any prior credit taken, and must complete the directed 
development with zero credit given.
    5.  In order to provide medical release forms to all treating 
physicians, VSRs may spend up to an hour--with zero credit--duplicating 
individual release forms, because veterans often erroneously list all 
their providers on a single form.
    6.  VSRs and RVSRs get zero credit for the mandatory work of 
reviewing the claims folder, which may take as long as two to four 
hours to complete.
Other Concerns
    The current work credit system fails to adequately measure the work 
of VBA personnel who have been assigned collateral duties (in addition 
to adjudication duties), e.g. Homeless Veteran Coordinator and 
Seriously Disabled Veteran Coordinator. These employees are especially 
impacted by management's continual change in priorities to meet new 
Central Office mandates.
    Similarly, employees assigned to outreach duties during the work 
day do not receive adjustments in their work credit for time away from 
production.
    New VSRs and RVSRs still undergoing training are held to 
unrealistic standards and penalized for having to correct prior work, 
regardless of how much time this takes away from production. 
Corrections are not considered in the evaluation of performance.
Summary
    The current work credit system has created a tremendously 
stressful, demoralizing, assembly-line work environment that is hurting 
VBA retention of experienced employees and contributing to attrition 
among new hires. The current system also takes a heavy toll on 
training, resulting in the termination of many employees within the 
first year. The ultimate harm falls upon the veterans, who are deprived 
of a full, fair, and timely consideration of their claims, and a 
growing backlog.
    Therefore, AFGE and the VA Council urge the Subcommittee to mandate 
a scientific time-motion study of the resources and skills required to 
do the current mix of increasingly complex claims. Both VSOs and 
employee representatives should have formalized, ongoing roles in the 
design, implementation and updating of the new work credit and work 
management systems, as well as staffing decisions based on these 
measures. Thank you.

                                 
     Prepared Statement of Diana M. Rubens, Associate Deputy Under
   Secretary for Field Operations, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs

    Mr. Chairman and Members of the Subcommittee, thank you for 
providing me the opportunity to appear before you today to discuss the 
Veterans Benefits Administration's (VBA) work credit and work 
management systems as they relate to quality, accountability, and 
accuracy in compensation and pension claims processing. I am happy to 
be accompanied by Jason McClellan, Director of the Veterans Benefit 
Administration's (VBA) Central Area Office. VBA acknowledges the 
concerns of our Veterans, stakeholders, and the general public 
regarding our current work credit system and the perceived emphasis of 
quantity rather than quality; however, VBA does not and never has 
emphasized the quantity of claims completed over the quality of our 
decisions.
    Under the leadership of Secretary Shinseki, the vision of VBA and 
that of the entire Department is to be an advocate for Veterans, not an 
adversary. Secretary Shinseki's guidance to VBA and all of VA is clear: 
to transform VA into a 21st Century organization and to ensure that we 
provide timely access to benefits and high quality care to our Veterans 
over their lifetimes, from the day they take their oaths of allegiance 
until the day they are laid to rest. One of the Secretary's key 
objectives is to eliminate the disability claims backlog by 2015 while 
creating a new claims processing system that is more timely and 
accurate. The Secretary set a goal for VBA to process disability claims 
at a rate sufficient to avoid any Veteran waiting more than 125 days 
for a quality review and decision. It will take all of VA, as well as 
the help of Congress, Veterans Service Organizations, and other 
stakeholders to achieve this goal. A crucial component of achieving 
this goal is a well-trained, well-managed, and well-resourced workforce 
that has the tools and systems in place to tackle the complex work of 
disability claims processing. The President's 2011 budget fully 
supports our progress with a 27 percent increase in VBA funding over 
the current year.
    As the Subcommittee is well aware, under Section 226 of Public Law 
110-389, Congress required the Secretary to initiate a study of the 
effectiveness of the VBA's employee work credit and work management 
systems to evaluate more effective means of improving disability claims 
processing performance. A report to Congress on that study was due on 
October 31, 2009. I want to apologize to the Subcommittee for this late 
report, which we expect to deliver in the near future.
    Under a contract with the VBA, the Center for Naval Analyses (CNA) 
conducted this study and produced the report titled, Qualitative 
Analysis of VBA Employee Work Credit and Work Management Systems. The 
CNA report was primarily a qualitative analysis of employee interviews, 
and the recommendations provided focus on improving the employee work 
credit system by establishing specific standards with clearly defined 
actions and time allotments that support quality work. The CNA 
recommendations closely align with VBA's current initiatives to better 
link performance with the completion of decisions for Veterans and 
lessen emphasis on discrete work actions within the claims processing 
lifecycle.
    I want to emphasize that VBA strives to ensure that compensation 
and pension benefits are provided in a timely, accurate, and consistent 
manner. As our workload continues to grow, we are committed to 
increasing the consistency and accuracy of our decisions while 
completing an anticipated record 1,000,000 claims in fiscal year 2010.
    Regional Office (RO) performance varies as the result of several 
factors including workforce experience, local economic and employment 
environment, and staff turnover. VBA aggressively monitors RO 
performance and develops specific action plans to address areas for 
improvement. Leadership within the Compensation and Pension Service as 
well as Area Directors oversee RO performance through monitoring and 
site visits. Lessons learned and specific examples of ``best 
practices'' from these visits are provided to assist ROs in enhancing 
their performance.
    As VBA's workload continues to increase, maintaining balance 
between the quality and quantity of claims completed remains a 
priority. VBA experienced a 14.1 percent increase in annual claims 
received in 2009, and we project increases of 13.1 percent and 11.3 
percent in 2010 and 2011, respectively. In addition, on October 13, 
2009, Secretary Shinseki announced his decision to establish 
presumptions of service-connection for Vietnam Veterans with three 
specific illnesses based on the latest evidence of an association with 
exposure to herbicides including Agent Orange. To respond to this 
expected growth in claims receipts, Secretary Shinseki announced an 
aggressive new initiative in March, 2010 to solicit private-sector 
input on a proposed ``fast track'' Veterans' claims process for these 
new claims related to Agent Orange exposure during the Vietnam War. We 
are seeking automated solutions for the parts of the claims process 
that take the longest amount of time but do not involve actual 
adjudication or award of benefits. VA believes these parts of the 
process can be collected in a more streamlined and accurate way. With 
this new approach, VA expects to shorten the time it takes to gather 
evidence, which now takes on average over 90 days. Once the claim is 
fully developed and all pertinent information is gathered, VA will be 
able to more quickly decide the claim.
    VBA has both short-term and long-term strategies underway to reduce 
the backlog of disability claims while improving the quality of our 
output, even as those claims increase in number and complexity. VBA 
continues to aggressively hire claims processing staff across the 
Nation. Recognizing that it takes approximately 2 years for a new 
employee to become fully trained in claims processing, ROs are 
encouraged to implement mentoring programs and provide new claims 
processing employees with timely feedback from trainers, reviewers, and 
supervisors. Area offices are increasing their oversight of ROs whose 
national rating-related claims quality is below 85 percent. In 
addition, quality factors heavily into VBA's three-tiered incentive 
compensation program which provides meaningful incentives to ROs that 
achieve a 90 percent or higher accuracy rate for the fiscal year. As 
mentioned earlier, an expanded workforce, improved training and 
leadership are a part of the toolkit we are bringing together with new 
technology and business systems solutions to tackle the disability 
claims backlog. No single part of this approach can solve the 
disability claims backlog alone. It must be a concerted approach, 
throughout the entire VA, to bring every tool to bear on this important 
priority.
    Completing an independent VBA effort begun in 2009, we recently 
revised the Veterans Service Representative (VSR) performance standards 
in ways that address recommendations since made by CNA. VBA performance 
standards have always included a quality element for claims processors 
to ensure correct information is disseminated and accurate decisions 
are provided on all claims administered by the VA.
    The newly revised VSR performance standards further align 
individual employee performance targets with national targets and 
require local quality reviews to be based on the same criteria as the 
national quality assurance reviews. In developing these new standards, 
VBA formed a workgroup of subject matter experts from all levels of the 
organization, including RO Directors, Veterans Service Center managers, 
and first-line supervisors, as well as employees from the Compensation 
and Pension Service and the Office of Field Operations in VBA 
Headquarters. A VSR also participated in the workgroup as the 
representative for VBA's labor partner, the American Federation of 
Government Employees.
    VBA implemented the revised performance plan for VSRs nationwide on 
April 12, 2010. The revised plan aligns the specific quality and 
production elements with the national targets, allowing performance 
credit only for those actions that advance a claim to the next stage of 
a claim's life cycle. A similar initiative is currently underway for 
the Rating Veterans Service Representative and Decision Review Officer 
performance plans.
    VBA is actively pursuing additional initiatives to reach our 
strategic goals of eliminating the backlog of disability claims while 
achieving a 98-percent quality level. We established pilot initiatives 
to improve claims processing and services to Veterans at the Little 
Rock, Providence, and Pittsburgh ROs. These pilots are actively 
exploring process and policy simplification and technology improvements 
to enable VBA to reach our goal of providing world-class service to our 
Veterans. The CNA study also looked at the current VA work management 
system, referred to as the Claims Process Improvement Model, which 
emphasized employee task specialization. In support of the pilot in the 
Little Rock RO, VA has engaged Booz, Allen, and Hamilton to assist with 
evaluating the current claims process using lean six sigma analysis 
techniques.
    This past fall, VA employees and co-located Veterans Service 
Organizations submitted more than 3,000 ideas as part of a VA 
Innovation Initiative competition with the stated purpose of finding 
the best ideas to improve the claims process. Ten winners were 
announced; after further analysis, eight were determined to be viable 
solutions. We are working with the ROs that submitted these initiatives 
to refine costs, timelines, and resource requirements for 
implementation.
    In addition, VBA Leadership met for a week in March to begin to 
develop a comprehensive plan that will focus on eight lines of action 
for change in VBA in order to achieve the Secretary's goal of 
eliminating the disability claims backlog by 2015. These lines of 
action include: leadership and culture, performance management, 
resource capacity and footprint, process design, claims segmentation, 
Veteran partnership, legislative and regulatory framework, and 
technology.
    Developing and implementing these technological and procedural 
initiatives will reduce the time required to obtain information from 
outside sources, simplify the claims adjudication process, and increase 
accountability for claims decisions. These changes will help us achieve 
our goals of eliminating the disability claims backlog, reducing the 
pending inventory, fielding a sustainable processing system where 
significant inventories do not develop, and most importantly, providing 
all Veterans with accurate, timely, and consistent decisions on their 
disability claims.
    Mr. Chairman, this concludes my statement. I would be happy to 
respond to any questions from you or other Members of the Subcommittee.

                                 
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