[Senate Hearing 111-265]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-265
 
                  VETERANS' DISABILITY COMPENSATION: 
                         FORGING A PATH FORWARD

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 29, 2009

                               __________

       Printed for the use of the Committee on Veterans' Affairs


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate



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                     COMMITTEE ON VETERANS' AFFAIRS

                   Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West         Richard Burr, North Carolina, 
    Virginia                             Ranking Member
Patty Murray, Washington             Lindsey O. Graham, South Carolina
Bernard Sanders, (I) Vermont         Johnny Isakson, Georgia
Sherrod Brown, Ohio                  Roger F. Wicker, Mississippi
Jim Webb, Virginia                   Mike Johanns, Nebraska
Jon Tester, Montana
Mark Begich, Alaska
Roland W. Burris, Illinois
Arlen Specter, Pennsylvania
                    William E. Brew, Staff Director
                 Lupe Wissel, Republican Staff Director


                            C O N T E N T S

                              ----------                              

                             July 29, 2009
                                SENATORS

                                                                   Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........     1
Tester, Hon. Jon, U.S. Senator from Montana......................     2
Johanns, Hon. Mike, U.S. Senator from Nebraska...................     2
Burr, Hon. Richard, Ranking Member, U.S. Senator from North 
  Carolina.......................................................    17
    Prepared statement...........................................    17
Begich, Hon. Mark, U.S. Senator from Alaska......................    18
Murray, Hon. Patty, U.S. Senator from Washington.................    20
    Prepared statement...........................................    20
Brown, Hon. Sherrod, U.S. Senator from Ohio......................    70

                               WITNESSES

Dunne, Patrick W., RADM U.S. Navy (Ret.), Under Secretary, 
  Benefits, U.S. Department of Veterans Affairs; accompanied by 
  Thomas J. Pamperin, Deputy Director for Policy, Compensation 
  and Pension Service, Veterans Benefits Administration..........     2
    Prepared statement...........................................     4
Koch, Noel, Deputy Under Secretary, Office of Transition Policy 
  and Care Coordination, U.S. Department of Defense..............     7
    Prepared statement...........................................     8
Allen, Michael P., Professor of Law, Stetson University..........    30
    Prepared statement...........................................    31
Bertoni, Daniel, Director, Disability Services, Government 
  Accountability Office..........................................    40
    Prepared statement...........................................    42
Wilson, John L., Lt. Col., USAF (Ret.), Associate National 
  Legislative Director, Disabled America Veterans................    60
    Prepared statement...........................................    61
    Response to questions arising during hearing by:
      Hon. Patty Murray..........................................    66
      Hon. Sherrod Brown.........................................    73

                                APPENDIX

Jackson, Robert, Assistant Director, National Legislative 
  Service, Veterans of Foreign Wars of the United States; 
  prepared statement.............................................    79
Allen, Michael P., Professor of Law, Stetson University; article.    82


       VETERANS' DISABILITY COMPENSATION: FORGING A PATH FORWARD

                              ----------                              


                        WEDNESDAY, JULY 29, 2009

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:15 a.m., in 
room 418, Russell Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.
    Present: Senators Akaka, Murray, Brown, Tester, Begich, 
Burr, and Johanns.

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

    Chairman Akaka. This hearing of the Senate Committee on 
Veterans' Affairs will come to order. This morning we continue 
our work on VA's disability compensation process.
    Today's hearing will focus on improvements that can be made 
in reviewing disability compensation claims. My goal is to 
ensure that claims are adjudicated accurately and in a timely 
fashion. Everyone involved realizes that there is no quick fix 
to solving all the problems with disability claims, but the 
Committee, teaming with the Administration and those who work 
with veterans, intends to do all it can to improve this 
situation.
    To bring optimal change to a process that is as complicated 
and important as this, we must be deliberate, focused and open 
to input from all who are involved in this process. It is in 
that spirit that we have held previous hearings and it is the 
backdrop of this hearing as well.
    To be fair, claims processing is a complicated matter. 
There have been many changes to the claims processing landscape 
in recent years. Many of those changes have come from policies 
intended to make improvements piece-by-piece. Unfortunately, 
these piece by piece reforms have failed to produce the results 
veterans deserve.
    While many claims processing issues are internal to VA, 
this Committee recognizes that solutions go beyond the VA. This 
is especially true for transitioning servicemembers who look to 
VA and DOD to help them receive the care and benefits they have 
earned.
    The Disability Evaluation System Pilot Program is one 
example of VA and DOD working collaboratively to ease the 
transition of disabled servicemembers from military to civilian 
life. Today, I hope to hear from VA and DOD about the status of 
this program and their plans for its future.
    I reiterate that our goal is to provide veterans with 
accurate and timely resolution to their cases. No idea is too 
bold. We must act quickly, yet responsibly, to rectify this 
situation. I, again, welcome everyone to today's hearings.
    May I call on Senator Tester for any opening remarks?

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

    Senator Tester. Well, thank you, Mr. Chairman. I think I am 
going to forego my opening remarks and will make the opening 
remarks during the questions. So, thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Tester.
    Senator Johanns, your opening statement please.

                STATEMENT OF HON. MIKE JOHANNS, 
                    U.S. SENATOR FROM NEVADA

    Senator Johanns. Mr. Chairman, I will do likewise. That is 
a good idea.
    Chairman Akaka. Thank you very much.
    I want to welcome our principal witness from VA, the 
Honorable Patrick Dunne. It is good to have you, the Under 
Secretary for Benefits, here. He is accompanied by Thomas J. 
Pamperin, Deputy Director for Policy at the Compensation and 
Pension Service. I also want to welcome DOD's witness, Noel 
Koch, Deputy Under Secretary, Office of Transition Policy and 
Care Coordination.
    I thank all of you for being here this morning. Your full 
testimony will, of course, appear in the record.
    Admiral Dunne, will you please begin with your testimony?

  STATEMENT OF PATRICK W. DUNNE, RADM U.S. NAVY (RET.), UNDER 
   SECRETARY, BENEFITS, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
ACCOMPANIED BY THOMAS J. PAMPERIN, DEPUTY DIRECTOR FOR POLICY, 
     COMPENSATION AND PENSION SERVICES, VETERANS BENEFITS 
                         ADMINISTRATION

    Admiral Dunne. Good morning, Mr. Chairman, Members of the 
Committee. Thank you for the opportunity to appear today to 
discuss the direction of VA's Disability Compensation Program. 
I fully share the concerns of this Committee, veteran service 
organizations, and the veteran community regarding the 
timeliness of disability benefits claims processing.
    Our mission is to deliver to veterans first-rate care and 
service. Where we do not meet high standards, such as with 
timeliness and benefits adjudication, we will find the root 
causes and fix them. Our leadership team is deeply committed to 
changing the paradigm of today's lengthy and paper-bound 
disability claims processing.
    The number of claims completed during this fiscal year is 
10 percent greater than in the same period in 2008. We have 
improved average days to complete on rating claims from 178 
days at the end of 2008 to 161 days at the end of June. We 
currently have approximately 406,000 disability claims pending, 
which includes all disability claims received, whether pending 
only a few hours or significantly longer.
    This inventory is dynamic rather than static. Completed 
claims are continuously removed from the inventory while new 
claims are added. We currently average over 80,000 new rating-
related claims added to the inventory each month.
    Our strategic goal for completing disability claims is 125 
days. We consider all disability claims pending for more than 
125 days to be our claims backlog. At the end of June, 144,652 
rating claims, or 35 percent of the inventory, were pending for 
more than 125 days.
    We believe our disability claims workload is increasing 
largely due to our many outreach efforts. We conducted 
thousands of transition briefings, including pre- and post-
deployment briefings for Reserve and National Guard members and 
briefings for military personnel stationed overseas. All 
separating servicemembers are encouraged to attend Transition 
Assistance Program briefings. We project that we will brief 
over 300,000 new veterans this year. We have also hired nearly 
4,200 new employees since January 2007. In addition, to 
leverage the knowledge and experience of retired claims 
processors, we hired more than 100 recent retirees as re-hired 
annuitants to assist in completing rating decisions and train 
and mentor our new employees.
    Last September, we partnered with Booz Allen Hamilton to 
conduct a review of the claim development process to divide 
recommendations on cycle time reduction. On July 20, we began a 
pilot at the Little Rock Regional Office to implement those 
recommendations.
    Our core IT modernization strategy includes implementing a 
business model for claims processing that is less reliant on 
the acquisition and storage of paper documents. Our 
comprehensive plan will employ imaging and computable data as 
well as enhanced electronic workflow capabilities, enterprise 
content and correspondence management services, and integration 
with our modernized payment system. We are also exploring the 
utility of business-rules-engine software for both workflow 
management and improved decisionmaking.
    We developed strategic partnerships with two recognized 
experts in the field of organizational transformation. First, 
MITRE Corporation is actively providing strategic program 
management support as well as support for the overall paperless 
initiative. Booz Allen was recently engaged to provide business 
transformation services as part of a pilot project for business 
process reengineering, organizational change management, 
workforce planning, and organizational learning strategies. The 
Providence Regional Office will serve as our business 
transformation lab--the focal point for convergence of process 
reengineering and technology.
    We continue to work collaboratively with DOD to enhance the 
transition of servicemembers to successful civilian lives with 
programs such as Benefits Delivery at Discharge and Quick Start 
for servicemembers separating or demobilizing from the active 
force, and the joint Disability Evaluation System, or DES, 
Pilot. We believe the revised DES Pilot is a better process for 
servicemembers. It has been faster and more transparent than 
the traditional 
process and has reduced appellate activity. The pilot is now 
the standard process at 21 military treatment facilities, 
accounting for almost 30 percent of all servicemembers going 
through the DES process.
    As of July 12th, over 3,000 servicemembers enrolled in the 
pilot and 560 completed the process. Those servicemembers 
qualified for veteran benefits are informed of entitlements 
from both departments when they are notified of the Physical 
Evaluation Board, or PEB's, decision.
    Mr. Chairman, this concludes my testimony, and I will be 
happy to respond to any questions.
    [The prepared statement of Admiral Dunne follows:]

 Prepared Statement of Patrick W. Dunne, Under Secretary for Benefits, 
 Veterans Benefits Administration, U.S. Department of Veterans Affairs

    Chairman Akaka, Ranking Member Burr, and Members of the Committee: 
Thank you for providing me the opportunity to appear before you today 
to discuss the direction of the Veterans Benefits Administration's 
(VBA) disability compensation program. Accompanying me today is Mr. Tom 
Pamperin, VBA's Deputy Director of Compensation and Pension Service, 
Policy and Procedures. My testimony will focus on the challenges VBA 
faces processing claims and what we are doing to overcome those 
challenges. I will also discuss the status and future of the Disability 
Evaluation System (DES) Pilot.

                           ADDRESSING BACKLOG

    I fully share the concerns of this Committee, Veterans Service 
Organizations, and the Veteran community regarding the timeliness of 
disability benefit claims processing. Our mission at VA is to deliver 
to Veterans--our clients--first rate care and services. Where we do not 
meet high standards, as is case with timeliness of benefit 
adjudication, we will find the root causes and address the issue. Our 
leadership team is deeply committed to changing the paradigm of today's 
lengthy and paper-bound disability claims processing.
    VBA is completing more claims than ever before. The number of 
claims completed this fiscal year is 10 percent greater than the same 
period in fiscal year 2008. We currently have approximately 406,000 
disability claims pending in our inventory, which includes all 
disability claims received, whether pending only a few hours or 
significantly longer. This entire inventory of pending disability 
claims is frequently--and incorrectly--referred to as the ``claims 
backlog.'' The inventory is dynamic rather than static. Completed 
claims are continuously removed from the inventory while new claims are 
added.
    VBA's pending inventory of claims is bundled into two categories: 
rating workload and non-rating workload. The rating workload is 
composed of original and reopened claims for disability compensation 
and/or pension. This workload is how VBA traditionally measures its 
claims inventory. We consider these claims the core of our claims 
processing activity because they represent Veterans awaiting an 
entitlement decision for service-connected disability compensation or 
non-service-connected pension benefits. At the end of June 2009, VBA's 
rating-related inventory was 406,056 claims. Of these, 270,863, or 66.7 
percent, were reopened claims, which include claims for increased 
benefits, newly claimed disabilities for Veterans who have previously 
filed claims, or additional evidence submitted to reopen a previously 
denied claim.
    Non-rating workload includes dependency adjustments on active 
compensation awards, income adjustments on pension awards, and 
eligibility determinations for ancillary benefits like automobile 
grants, clothing allowances, and special housing grants. At the end of 
June 2009, the non-rating inventory was 219,124 claims. This portion of 
VBA's workload varies during the year due to the cyclical nature of the 
income and eligibility verification processes associated with pension 
workload. During the second and third quarter of the fiscal year, 
inventory typically fluctuates by as much as 50,000 claims.
    The steady and sizable increase in workload is a significant 
challenge in improving service delivery of compensation and pension 
benefits. During fiscal year 2008, VBA received 888,000 rating claims 
and 755,000 non-rating claims for a total of more than 1.6 million. In 
the third quarter ending June 30, we completed over a quarter of a 
million rating-related claims and nearly 210,000 non-rating claims. We 
currently average over 80,000 new rating-related claims added to the 
inventory each month, and we project we will receive nearly one million 
new disability claims this year. Rating-related claims received are up 
14.5 percent compared to the same period in fiscal year 2008. Despite a 
10.3 percent increase in claims completed, the rating-related inventory 
has increased from 379,842 at the end of fiscal year 2008 to 406,056 at 
the end of June 2009.
    Although the inventory of rating claims has increased by 
approximately 26,000 this year, we have made progress in improving the 
timeliness of our decisions. VBA has improved average days to complete 
on rating claims from 178.9 days at the end of fiscal year 2008 to 
161.3 days at the end of June 2009. We have made similar progress in 
improving non-rating timeliness from 109.4 days at the end of fiscal 
year 2008 to 88.9 days at the end of June 2009. The combined fiscal 
year 2009 timeliness for all rating and non-rating claims completed 
through June 2009 is 129 days.
    VBA's strategic goal for completing disability claims is 125 days. 
We therefore consider all disability claims pending for more than 125 
days to be our ``claims backlog.'' At the end of June 2009, 144,652 
rating claims, or 35.6 percent of the inventory, were pending for more 
than 125 days.
    We acknowledge that our disability claims workload is increasing, 
which we believe is largely due to VBA's many outreach efforts. Our 
disability claims receipts this year are up 13 percent over the same 
period last year. We have conducted thousands of transition briefings, 
including pre- and post-deployment briefings for Reserve and National 
Guard members and briefings for military personnel stationed overseas. 
All separating servicemembers are encouraged to attend Transition 
Assistance Program (TAP) briefings to learn about the benefits 
available to them and receive assistance in applying for their 
benefits. We project we will brief over 300,000 new Veterans this year.
    Serving our seriously injured servicemembers returning from the 
current conflicts remains our top priority. The average time to 
complete these claims is 45 days. All of these efforts are a part of a 
dynamic shift to an organization that advocates and reaches out to 
Veterans to inform them of their benefits and to assist them in 
applying for them.

                        IMPROVEMENT INITIATIVES

    VBA is aggressively hiring across the Nation, and we have hired 
nearly 4,200 new employees since January 2007. Because it takes at 
least 2 years for a new employee to become fully trained in all aspects 
of claims processing, we are only now beginning to see the full impact 
of those employees hired at the outset of our hiring initiative. We 
completed 10.3 percent more claims through June 2009 than we completed 
in the same period during 2008, and 19.6 percent more than the same 
period in 2007. Our newly hired workforce will continue to progress in 
delivering more decisions to Veterans.
    In order to leverage the knowledge and experience of recently 
retired claims processors, VBA hired more than 100 recent retirees as 
rehired annuitants. Rehired annuitants assist in completing rating 
decisions and train and mentor new employees.
    In September 2008, VBA partnered with Booz Allen Hamilton (BAH) to 
conduct a review of the rating-related claim development process to 
provide recommendations to improve the process with an emphasis on 
cycle time reduction. During its study, BAH interviewed VBA leadership, 
conducted site visits to regional offices, and met with front-line 
employees. At the conclusion of its review, BAH recommended VBA apply 
Lean Six Sigma production practices to claims processing to facilitate 
claims movement, thereby reducing processing time. On July 20, we began 
a pilot to implement BAH's recommendations.

                  INFORMATION TECHNOLOGY MODERNIZATION

    VBA is taking additional initiatives to improve claims processing. 
We are modernizing our information technology by investing in the 
migration of compensation and pension claims processing to a paperless 
environment. We have successfully used imaging technology and 
computable data to support claims processing in our Insurance, 
Education, and Loan Guaranty programs for many years.
    Our core information technology modernization strategy includes 
implementing a business model for compensation and pension claims 
processing that is less reliant on the acquisition and storage of paper 
documents. Our comprehensive plan, the Paperless Delivery of Veterans 
Benefits Initiative, will employ a variety of enhanced technologies to 
support end-to-end claims processing.
    In addition to imaging and computable data, we will incorporate 
enhanced electronic workflow capabilities, enterprise content and 
correspondence management services, and integration with our modernized 
payment system. We are also exploring the utility of business-rules-
engine software for both workflow management and improved 
decisionmaking by claims processing personnel.

                    BUSINESS TRANSFORMATION EFFORTS

    While the use of advanced technologies is critical to our service-
delivery strategy, we must also address our business processes. To that 
end, VBA developed strategic partnerships with two recognized experts 
in the field of organizational transformation. MITRE Corporation, a 
manager of federally Funded Research and Development Centers, has been 
supporting VBA on the VETSNET project since 2006. MITRE is now actively 
providing strategic program management support, as well as support for 
the overall Paperless Initiative, addressing multiple areas of focus.
    Additionally, BAH was recently engaged by VBA to provide business 
transformation services. BAH assists VBA in business process re-
engineering, organizational change management, workforce planning, and 
organizational learning strategies to ensure that VBA positions itself 
to take best advantage of the technology solutions being developed.
    Our comprehensive transformation strategy also includes designating 
the VA Regional Office in Providence, Rhode Island, to serve as our 
Business Transformation Lab. The Business Transformation Lab will serve 
as the focal point for convergence of process re-engineering and 
technology. This designation assures that VBA will optimize service 
delivery and then develop and deploy best practices throughout the 
organization.
    We recognize that technology is not the sole solution for our 
claims-processing concerns; however, it is the hallmark of a forward-
looking organization. Our paperless strategy combines a business-
focused transformation and re-engineering effort with enhanced 
technologies, to provide an overarching vision for improving service 
delivery to our Nation's Veterans.

                DISABILITY EVALUATION SYSTEM (DES) PILOT

    The Departments of Veterans Affairs and Defense continue to work 
collaboratively to enhance the transition of servicemembers to 
successful civilian lives. We work together through the Benefit 
Delivery at Discharge (BDD) and Quick Start programs for servicemembers 
separating or demobilizing from the active force, the joint DES pilot, 
and the development of the combat-related catastrophically disabled 
Expedited DES process.
    Since March 2007, the two Departments have engaged in unprecedented 
joint efforts to resolve concerns about the process through which 
servicemembers are released from active duty due to disability. 
Following detailed collaborative analysis, the two Departments deployed 
a revised DES process in November 2007 at the three Military Treatment 
Facilities (MTFs) in the National Capital Region. VA believes the 
revised pilot is a better process for servicemembers and our respective 

Departments.
    VA is involved at the earliest stages of the process by 
interviewing servicemembers and taking claims for both the potentially 
unfitting and other potentially qualifying disabilities. Examinations 
are conducted in accordance with established VA protocols for all 
potentially unfitting and claimed conditions. If the Military 
Department's Physical Evaluation Board (PEB) determines the member to 
be unfit, VA prepares a single rating that is binding on both 
Departments.
    The revised pilot process has been faster and more transparent than 
the traditional process and has reduced appellate activity. Based on 
findings to date, the two Departments are expanding the pilot. The 
pilot is now the standard process at 21 MTFs, accounting for almost 30 
percent of all servicemembers going through the DES process.
    As of July 12, 2009, over 3,000 servicemembers enrolled in the 
pilot, and 560 servicemembers completed the process. The servicemembers 
who completed the process includes 179 retained by the Services, 230 
retired, and 57 separated with severance pay. Separated and retired 
servicemembers are informed of entitlements from both Departments when 
they are notified of the PEB's decision.

                               CONCLUSION

    VA's goal is to transform to a 21st century organization that is 
Veteran-centric, results-driven, and forward-looking. We have initiated 
a plan to address this issue in a more aggressive fashion, which 
includes development of a paperless benefits delivery system that will 
integrate the latest technologies with redesigned business processes. 
We are examining automated decision-support programs to enhance 
decisionmaking and evidence gathering, as well as streamline the claims 
workflow. We look forward to working with Congress, the Department of 
Defense, and the Department of Homeland Security in the continuing 
transformation of the DES to meet the needs of 21st century Veterans 
and their families.

    Mr. Chairman, this concludes my testimony. I will be happy to 
respond to any questions that you or other Members of the Committee 
have.

    Chairman Akaka. Thank you very much.
    Mr. Koch, will you please proceed with your statement?
    Mr. Koch. Good morning, Mr. Chairman. I submitted written 
testimony for the record.
    Chairman Akaka. Thank you. It will be included.
    Mr. Koch. Thank you.

   STATEMENT OF NOEL KOCH, DEPUTY UNDER SECRETARY, OFFICE OF 
  TRANSITION POLICY AND CARE COORDINATION, U.S. DEPARTMENT OF 
                            DEFENSE

    Mr. Koch. Mr. Chairman, distinguished Members of the 
Committee, this is my first appearance before you in my present 
capacity, and I am privileged to have the opportunity to be 
with you this morning. I am honored to share with you our 
profound responsibility for the future well-being of our 
wounded, ill, and injured servicemembers, veterans and their 
families.
    My position as Deputy Under Secretary for Transition Policy 
and Care Coordination was established in December 2008, and I 
am the first person to hold this position formally. As you 
know, it represents not only a priority of the Secretary of 
Defense, but of the President and the First Lady as well, so I 
am mindful of the potential cost of failing in this work that 
has been assigned to me.
    I am responsible for Lines of Action 1, 3, and 8; 
Disability Evaluation System Reform; case management and 
benefits--the latter including management and monitoring the 
DOD side of the Benefits Executive Council, which I co-chair 
with my colleague, Admiral Dunne.
    Immediately at issue before us today is the progress of the 
Disability Evaluation System Pilot, also called the DES Pilot. 
As you know, this was a spearhead of the effort to expedite--
simply, smoothly and equitably the transition of our wounded, 
ill, and injured warriors to the next phase of their lives--
from healing and rehabilitation back to active duty or to 
veterans status. This undertaking was prompted in the first 
instance by the events at Walter Reed Army Medical Center, but 
it had deeper antecedents in the experience of duplicative 
examination procedures, lost records, delayed medical care, and 
protracted efforts to provide to your servicemembers the 
attention they earned, deserved, and, in many cases, 
desperately needed to assist in recovering from the sacrifices 
they made on the battlefield.
    The DES Pilot is precedent to a more extensive effort to 
make permeable the barriers between DOD and the Department of 
Veterans Affairs through the DES evolution. I can report to you 
that the DES Pilot has exceeded its expectations as a learning 
process and as an expedient to serve those who have been 
engaged in it.
    As of the 12th of this month, some 2,500 servicemembers 
were enrolled in the pilot at 21 medical treatment facilities; 
466 servicemembers completed the DES Pilot--returning to duty, 
separating from service, or retiring. The average time to 
completion of the DES Pilot has been 275 days--exceeding the 
goal set for the pilot and exceeding the legacy to DES by an 
estimated 46 percent.
    The legacy DES, Mr. Chairman, would be one that you would 
have familiarity with from your experience in the Army. It goes 
back to the earliest days. The Republic was refined somewhat in 
1949 and has not improved since then.
    The people who have gone through this were active duty 
personnel. Reserve and National Guard members moved through the 
system to the receipt of their VA benefits letter 13 percent 
faster than the goal set for them in the terms of reference 
governing the DES Pilot, which was 305 days. Tracking of 
servicemembers satisfaction reflects the success indicated by 
these numbers. Among the practical efforts taken to assist the 
wounded, ill, and injured, has been the Recovery Coordination 
Program begun in November 2008. This covers servicemembers less 
severely wounded but who are not likely to return to active 
duty in less than 180 days.
    We are wrestling with a number of complex issues, ranging 
from the fit to the unfit equation, compensation for family 
caregivers, and TBI and PTSD screening. One among many of the 
issues we face in addressing these and other issues is the 
velocity with which medical science is accelerating the area of 
care for our wounded, ill and injured personnel.
    Injuries that once would have disqualified a servicemember 
from returning to active duty no longer do so. So, in the 
policy arena we find ourselves trying to keep up with miracles. 
The tendency in some areas is to sit tight and see where the 
miracles take us, between medical science and the incredible 
will of our servicemembers. Many of them want to go back to 
war. So this is what we are dealing with. It is very different 
than any conflict we have ever seen in the past.
    As you know, the DES Pilot is a test bed that will help us 
determine what future changes we can and may need to make in 
this endeavor through the modality of the DES evolution. The 
pilot program is operated within the context of existing policy 
and law. We may discover the need for changes in policy and may 
request that you consider changes in the law.
    I do not want to speculate on that today. We are required 
to report on the DES Pilot at the end of August, and at that 
point, we expect to have a sense of the future of the pilot 
itself as well as the course of the DES evolution.
    That concludes my oral statement, Mr. Chairman, and I look 
forward to any questions you may have.
    [The prepared statement of Mr. Koch follows:]

  Prepared Statement of Noel Koch, Deputy Under Secretary, Office of 
  Transition Policy and Care Coordination, U.S. Department of Defense

                                OPENING

    Mr. Chairman, Committee Members, I am pleased to be here today to 
discuss with you the Department's continued support of our wounded, ill 
and injured servicemembers, veterans, and their families, and in 
particular, the continued work of the Office of Transition Policy and 
Care Coordination (TPCC) with regard to the Disability Evaluation 
System (DES) Pilot.

                            TPCC BACKGROUND

    On 14 November 2008, the Under Secretary of Defense for Personnel 
and Readiness established the Office of Transition Policy and Care 
Coordination (TPCC). As the Deputy Under Secretary for TPCC, it's my 
mission to ensure equitable, consistent, high-quality care coordination 
and transition support for members of the Armed Forces, including 
wounded warriors and their families by collaborating with Federal and 
State agencies. The TPCC assumed responsibility for policy and programs 
related to the DES, Servicemembers' transition to veteran status, 
wounded warrior case and care coordination, and related wounded warrior 
pay and benefit issues. These assigned responsibilities include the 
totality of the Department of Defense (DOD) functions formerly assigned 
to DOD co-chairs of the interagency DOD and Veterans Affairs (VA) 
Wounded, Ill, and Injured (WII) Senior Oversight Committee (SOC) Lines 
of Action (LOAs) 1, 3, and 8. The TPCC also assumed DOD 
responsibilities for management and monitoring of performance against 
DOD/VA Benefits Executive Council (BEC) goals and for coordinating with 
VA in support of BEC activities. The TPCC has the authority to enter 
into agreements with VA and represent the Under Secretary of Defense 
for Personnel and Readiness (USD (P&R)) as a member on councils and 
interagency forums established under the authority of the DOD/VA Joint 
Executive Council (JEC), the BEC and the SOC.

                  DISABILITY EVALUATION SYSTEM (LOA-1)

    The mission of Disability Evaluation System (DES) Reform is to 
develop and establish a DOD and VA Disability Evaluation System that is 
seamless, transparent, and administered jointly by both Departments and 
uses one integrated disability rating system, streamlining the process 
for the Servicemember transitioning from DOD to VA. The system must 
remain flexible to evolve as trends in injuries and supporting medical 
documentation and treatment necessitates. The Department continues to 
make significant steps forward in regards to the DES Pilot to include 
periodic refinements to the process and expansion of the Pilot beyond 
the original three initial sites in the National Capitol Region.

Overview
    Now, as in the past, the DOD remains committed to providing a 
comprehensive, equitable and timely medical and administrative 
processing system to evaluate our injured or ill Servicemembers' 
fitness for continued service. One way we have honored these men and 
women, was to develop and establish a Disability Evaluation System 
(DES) Pilot that provides one solution for a DOD and VA Disability 
Evaluation System using one integrated disability rating system. This 
system has several key features: simplicity; non-adversarial processes; 
single-source medical exam and disability ratings (eliminating 
duplication and the inconsistencies associated with it); seamless 
transition to veteran status; and strong case management advocacy. The 
system is flexible to evolve as trends in injuries and supporting 
medical documentation and treatment necessitates. LOA-1 has continued 
to make significant progress in regards to the DES Pilot to include the 
Pilot's initial expansion to an additional 18 locations across the 
Continental United States (CONUS).

Pilot
    The DES Pilot integrates the DOD and VA disability systems to the 
extent allowed under current statute and includes several key features 
that distinguish it from the current DOD and VA disability systems. The 
key features of the Pilot include a single physical disability 
examination conducted according to VA examination protocols, with 
disability ratings defined by the VA and accepted by DOD for those 
conditions it must address under law--those that render the member 
unfit for military service. The Departments apply the shared results of 
the single disability examination and ratings to render their 
respective decisions (the fitness decision, disability level, 
separation disposition, and DOD disability benefits by DOD and 
disability level, Veteran disability benefits eligibility, and VA 
disability compensation level by VA). Another key feature of the Pilot 
is that the early involvement of the VA allows the Department to 
deliver disability compensation and benefits immediately upon 
transition to Veteran status for members of the Military Departments 
being separated for disability.
    Our efforts to improve the DES is co-directed by the Deputy 
Director for Policy Compensation and Pension (C&P) Service from the VA 
and me as the DOD representative.
    The vision for the DES Pilot is a Servicemember-centric, seamless 
and transparent disability evaluation system jointly administered and 
supported by the Departments. The Departments set the following 
objectives for the Pilot:

     Design a more transparent, efficient, and effective DES
     Evaluate reform initiatives
     Refine reform mechanisms
     Identify training requirements
     Identify staffing and system support requirements
     Identify legal and policy issues/constraints.

Current Operational Status
    As of July 12, 2009, 2,944 Servicemembers are currently enrolled in 
the DES Pilot at 21 MTFs. Four hundred sixty-six (466) Servicemembers 
completed the DES Pilot by returning to duty, separating, or retiring. 
Active Component Servicemembers who completed the DES Pilot averaged 
275 days from Pilot entry to VA benefits decision, excluding pre-
separation leave. Including pre-separation leave, Active Component 
Servicemembers completed the DES Pilot in an average of 294 days. This 
is 1% faster than the goal for Active Component Servicemembers and 46% 
faster than the current or legacy DES and VA Claim process. Reserve 
Component/National Guard Servicemembers who completed the DES Pilot 
averaged 266 days from Pilot entry to issuance of the VA Benefits 
Letter, which is 13% faster than the 305-day goal.

Customer Satisfaction
    On the whole, Pilot participants reported higher average 
satisfaction than legacy participants. Additionally, Pilot participants 
reported higher satisfaction for all MEB and the PEB. Notably, 
Servicemembers were significantly more satisfied with the procedural 
justice component of the PEB phase (i.e., they felt the PEB portion of 
the Pilot was fairer than did legacy DES participants). Finally, the 
Pilot participants were more satisfied than legacy DES participants on 
the Transition phase of the program. Family members of DES Pilot 
participants were most satisfied with medical providers and the medical 
care the Servicemember received in the DES Pilot process. Stakeholder 
(perceptions of the impact of the Pilot on Servicemembers and Veterans 
were favorable; their ratings reflected a DES Pilot process that was 
more responsive to Servicemembers and their families, fairer, more 
consistent, and timelier compared to the current DES program. Perhaps 
most importantly, stakeholders felt that people within their 
organization cared about the Servicemembers in the DES Pilot program. 
These results speak to the dedicated efforts of Physical Evaluation 
Board Liaison Officers, Military Service Coordinators, care providers, 
and others who are remaining responsive to the needs of their customers 
given the limited level of resources they have available. The VA is 
preparing to administer surveys to determine satisfaction with the 
pilot one year after separation. We look forward to that information in 
spring 2010.

Expansion
    The Departments carefully planned for and expanded the DES Pilot 
beyond the initial three, National Capital Region locations, to 18 
additional locations throughout the continental United States. In 
accordance with recommendations by the U.S. Government Accountability 
Office, this deliberate approach allowed the Departments to gather data 
on the effectiveness of the Pilot at a diverse set of locations. 
Expansion to these locations began October 1, 2008 and was completed 
May 31, 2009. The SOC is scheduled to meet in August, 2009, to evaluate 
future expansion opportunities.
    Should the SOC decide to further expand the Pilot into the norm, 
significant DOD and VA planning and preparation will be essential to 
efficient and effective implementation.

Initial Conclusions of the Pilot
    The Departments successfully implemented a more transparent, 
efficient, and effective disability evaluation system through the DES 
Pilot. The Pilot resulted in a significant improvement in case 
timeliness with perhaps the most important enhancement being the 
elimination of delays between separation or retirement and the award of 
VA disability benefits. Servicemembers were more satisfied with the 
process and the outcomes were improved over the legacy system.
    Based on the proven performance of the Pilot, the Departments are 
evaluating effective ways to extend the advantages of the Pilot to all 
Servicemembers in the DES. Additionally, the Departments are reviewing 
the Joint DOD/VA DES process as a bridge to further DES reform.

                                CLOSING

    We are extremely proud of the progress made to date and the success 
enjoyed in the Pilot. Our obligation to our Servicemembers, veterans, 
and their families is a lifetime pledge which requires our unwavering 
commitment to complete the work which has been started. There remains 
more work to do. Our valiant heroes and their families deserve our 
support and dedication to ensure their successful transition through 
recovery, rehabilitation, and return to duty or reintegration into 
their communities.
    With those thoughts in mind, the Departments successfully 
implemented a more transparent, efficient, and effective disability 
evaluation system through the DES Pilot. The Pilot resulted in a 
significant improvement in case timeliness with perhaps the most 
important enhancement being the elimination of delays between 
separation or retirement and the award of VA disability benefits.
    Based on the proven performance of the Pilot, the Departments are 
evaluating effective ways to extend the advantages of the Pilot to all 
Servicemembers, Veterans, and their families in the DES.

    Thank you for your generous support of our wounded, ill and injured 
servicemembers, veterans and their families. I look forward to your 
questions.

    Chairman Akaka. Admiral Dunne, a popular statistic going 
around is that the claims backlog is nearing 1 million. That is 
1 million claims yet to be fully resolved.
    Is that figure an accurate indicator of DBA's claims 
inventory? If it is not, where is that number coming from?
    Admiral Dunne. Mr. Chairman, I would say that the 
calculation of that large number is based on taking a look at 
all the work that our regional offices are involved with. The 
number of 406,000 for compensation and pension claims 
inventory, which I referred to earlier, is the number of active 
claims that we are working on for veterans who are waiting for 
some compensation or pension from us.
    If we take a look at a larger number by adding up some of 
the other categories--everything from making adjustments for 
hospitalization of a veteran, incarceration of a veteran, doing 
changes of address, et cetera--we track all of those as 
workload elements at which they must also be accomplished, but 
they are not directly related to a decision on a veteran 
getting compensation or pension, sir.
    Chairman Akaka. This question is for you, Admiral Dunne and 
also for Mr. Koch on the Disability Evaluation System.
    How are the departments working to make certain that the 
Disability Evaluation System Pilot Program is being implemented 
in the same way at participating sites?
    Admiral Dunne. Sir, in order to maintain the consistency 
that we need and to ensure that the military treatment 
facilities have the capabilities that they need to serve our 
servicemembers--future veterans--first, we conducted a very 
extensive evaluation of what was needed in the National Capitol 
Region when we started in November 2007--what capabilities we 
needed both on the VA side and on the DOD side.
    We use that as lessons learned in order to conduct training 
for each of the individual military treatment facilities and VA 
offices who would be involved at the now 21 sites. So, all of 
those individuals involved received training, having the 
benefit of what we learned at the first three sites. And we 
have continued to follow through on that as we expand it on to 
the 21, sir.
    Chairman Akaka. Mr. Koch?
    Mr. Koch. Yes, sir. Mr. Chairman, I do not have a great 
deal to add to what Admiral Dunne has said. We are constantly 
monitoring the progress of these efforts at all 21 sites and 
adding to the inventory of trained personnel to assist with the 
care of our servicemembers.
    So, to some extent, it is a constant becoming; it is a work 
in progress. And some of the things that we had started out to 
do, similar to the Army with its AW2 program, it has evolved as 
it has gone along. We have built on what we have learned there 
with our Recovery Care Coordinators; and, of course, on the 
other side with the Veterans Affairs, there are the Federal 
Recovery Coordinators that do this work as well.
    But there are a range of issues that we have got to 
continue to attack, and we are doing that within the evaluation 
of the pilot as well as within the working group, which I chair 
as well for the DES evolution.
    Chairman Akaka. Admiral and Mr. Koch, how can VA and DOD do 
a better job at screening servicemembers so that those who 
enroll will actually complete DES and make wiser use of 
resources?
    Mr. Koch?
    Mr. Koch. Yes, sir. The process begins at the intake of the 
wounded, ill, or injured warrior. We look at, of course, the 
nature of the wounds that may be considered catastrophic. These 
would be people that we do not expect to be able to go back to 
active duty, and they are going to have to change their 
expectations for their future. And we have to try to manage 
those expectations so that we do the best we possibly can for 
them.
    There is a process set up for them to proceed through the 
system from the point of intake through the healing process--
rehabilitation--and to reach a point at which a determination 
will be made on our side--on the DOD side--whether they are fit 
or unfit for duty.
    Now, that sounds like a very cut and dry determination. In 
fact, it is not because, as I said in my oral testimony, many 
of these people who have suffered wounds that would have been 
completely disabling in the past are going through some 
marvelous procedures of recovery. Now if they want to stay in, 
the chances of us being able to retain them are greater than 
they ever were in the past.
    So, through this process, which we are evolving, we think 
that it is going to be what it is set out to be, which is 
smooth, simple, equitable and optimal. Again, we constantly 
monitor this to assure that we meet the standards that we have 
set for ourselves.
    Chairman Akaka. Do you have any comment on that, Admiral?
    Admiral Dunne. Yes, Mr. Chairman. On the VA side, as we 
perform the medical evaluations that we do, working with DOD, 
there is close monitoring of the results of that, of course. I 
believe as we look at it through the Senior Oversight 
Committee, which includes taking a look at the data of 
servicemembers who are not eventually separated or retired, 
that that is good feedback for the services to evaluate and 
evolve their program, as we are working on right now, sir.
    Chairman Akaka. Thank you.
    Senator Johanns, your questions?
    Senator Johanns. Thank you, Mr. Chairman.
    Admiral, I think I will start this question with you, but I 
would encourage the other members of the panel to jump in here.
    One of the things we did when I was a mayor--and I was very 
active in the U.S. Conference of Mayors--is we established a 
best practices sort of system. We would always joke with each 
other that we were not looking for original ideas, we were 
looking for ideas that worked that we could bring back home and 
implement.
    Does the VA in its disabilities process have anything like 
that? And I will tell you what I have in mind. I was looking at 
the statistics for the Lincoln office, and they are just simply 
better than the national average. Now, there might be a dozen 
reasons for that.
    But is there anything out there where you look at what is 
happening across the country and say to yourself, I wonder why 
those 12 offices are doing so much better than the average, and 
actually try to take those models and implement them? Talk to 
me about that.
    Admiral Dunne. Yes, sir. We are looking for all sorts of 
good ideas. I think I will start by setting the example myself. 
That is, over the past 16 months I have visited over 30 of our 
regional offices, including the Lincoln office, to be able to 
talk firsthand to the employees who are actually doing the work 
to learn directly from them what their challenges are, what 
issues they have that could either make them more effective, or 
a best practice that perhaps they are using locally that we 
could share with the other 56 offices and implement that.
    We have a program where twice a year, we get all the 
Regional Office Directors together. In fact, we will be doing 
that at the end of August. One of the segments of that meeting 
is all about best practices and where? As a result of our 
periodic reviews and inspections, we become aware of something 
that one office is doing, whether that be through training or 
otherwise. We share those with all the directors and provide 
them enough information to be able to take back and apply them 
at their office if they see that they could benefit from them.
    That is one example, but we are continually looking to the 
ROs by communicating with them periodically at all levels in 
order to take advantage of those ideas. In addition to that, by 
publishing our results office by office, we allow the different 
offices to be aware of who is performing better and they talk 
amongst themselves to figure out why some are better. But we do 
try to oversee that process and keep track of it.
    Senator Johanns. Anyone else have any thoughts on that?
    Mr. Koch. Senator, you have talked about looking for good 
ideas. One of the first good ideas we had and implemented was 
building a collegial relationship between our two departments--
the DOD and the Department of Veterans Affairs. That has been 
very productive and we continue to share our efforts, share 
information, and build on each other's learning process.
    So, as Admiral Dunne indicated, there is almost no 
substitute for visiting these centers. These polytrauma centers 
and other hospitals that we have are quite remarkable, and at 
each point, we learn something that we can bring back. We 
learn, as you might imagine, more from being in the field than 
we do from sitting here in Washington. So, that is a process 
that is ongoing and very 
valuable.
    There is, as you suggest, it seems to me, some unevenness 
in various centers that we are involved in. I think you can 
trace this to efforts to break the mold and to do things that 
we have never done before. In the Great Lakes, for example, in 
northern Chicago, we are not satisfied with the progress that 
we are making there, but what we are trying to do is unique and 
it is extremely difficult to do.
    In many cases, these problems are found to be rooted in the 
effort of information sharing in the sense of information 
technology. Building these systems to work across disparate 
systems is not easy to do. And the less people seem to know 
about the information technology business, the more ambitious 
they seem to be about the terms of reference that they levy on 
us.
    We began, for example, with creating a system for sharing 
medical information, which is a very good idea, but then you 
add to that, to the same system, personnel records and benefits 
records, and you have increased the problems exponentially. So 
that gets us in a little bit of a different area, but it is an 
example of some of the kinds of problems we have.
    So, it is a constant learning and it is a constant process 
of sharing what we learn. I think we are doing a pretty good 
job of it.
    Senator Johanns. I am out of time, Mr. Chairman, but if I 
might offer one other suggestion. Regarding best practices--
because I did a lot of things, as a Governor, as a mayor, that, 
quite honestly, somebody else had thought of, which looked so 
good that we implemented it, and it really turned out well for 
us.
    The second thing I wanted to ask, though I am not going to 
ask you to answer it here, but maybe with a follow-up letter to 
the Chairman with copies to us. As we have tried to improve 
this, I worry at times that maybe we have done things that have 
only made it worse. So, I am going to turn the tables here.
    Is there anything out there that has happened in terms of 
our effort to solve this problem that you would like us to 
revisit? I have one thing in mind: the AMC, the Appeals 
Management Center. We hear from veterans that it can be a black 
hole; things go in there and disappear. Maybe that is an 
individual case, maybe it is not. But that is only an example.
    I would ask you to give some thought to this idea, that 
maybe in our effort to improve things, we have actually created 
another level of bureaucracy that is making it difficult for 
the veteran to overcome. I would like to hear from you on that. 
Please do not be shy. We have broad shoulders in this business.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Johanns.
    Let me call on Senator Murray.
    Senator Murray. I am happy to wait for the other Members.
    Chairman Akaka. Fine.
    Senator Tester?
    Senator Tester. That is very kind. Thank you very much, Mr. 
Chairman.
    Admiral Dunne, you stated that you have 406,000 pending. 
What is that level compared to a year ago?
    Admiral Dunne. About 25,000 or 30,000 more than a year ago, 
sir.
    Senator Tester. OK. And the ratings claims are 80,000 each 
month? What is that compared to a year ago?
    Admiral Dunne. About 5,000 a month more, sir.
    Senator Tester. Five thousand more?
    You stated in your testimony that you have 125 days as your 
goal, but you have got 145,000--and this may be wrong because I 
was taking notes--145,000 claims over 125 days?
    Is that correct?
    Admiral Dunne. Correct. Yes, sir.
    Senator Tester. Are those also fluid? You said the 406,000 
were fluid.
    Admiral Dunne. Oh, yes, sir.
    Senator Tester. Is 145,000----
    Admiral Dunne. The 145,000 is part of the 406,000, so it is 
a subset. We are trying to move those through as fast as we 
can.
    Senator Tester. All right. So is it a fair question to ask, 
of those 145,000, how long do they go past the 125 days? I 
mean, are we talking----
    Admiral Dunne. As short a time----
    Senator Tester [continued]. One hundred eighty days, or 
240?
    Admiral Dunne. Well, that is an average number, sir. And 
what we do, based on the computer, is we take all the claims 
and we keep track of how many days they have been there.
    Senator Tester. I guess the question is, is there a point 
and time on a claim, when it gets to a certain number of days, 
that you guys say, we fix this; we fix it now?
    Admiral Dunne. Yes, sir. We have a team----
    Senator Tester. And what is that day?
    Admiral Dunne [continuing]. The Tiger team. When it gets to 
be a year old, it goes to a Tiger team that works specifically 
on it to try to find what issue is slowing it down.
    Senator Tester. And how many of those claims get to 365 
days?
    Admiral Dunne. At the present time, there is on the order 
of 11,000, sir.
    Senator Tester. OK. The chairman asked a question about 1 
million claims, and you said that is all the work that is being 
done, and you listed changes of address and some other things.
    Do you guys track that backlog of that additional 600,000?
    Admiral Dunne. We track all of them, sir. Everything that 
comes in that is a work item is given an end product and we 
track it all.
    Senator Tester. All right.
    If there is a change of address and we do not discover it 
for a while, it makes the ability to service that veteran a lot 
more difficult. That is just one example.
    So, you have got approximately 600,000 out there that you 
are doing various, much more minor things on, is how I 
interpret that. Do you track that----
    Admiral Dunne. Yes, sir, we do.
    Senator Tester [continuing]. To see what the backlog is on 
those? I mean, what is your goal on those?
    Admiral Dunne. There are about 219,000 items in the 
inventory right now, sir, and we complete those on average, in 
about 88 days. Some of them we were able to complete the day 
they come in; others take longer.
    Senator Tester. OK. Sounds good. So the million figure that 
the Chairman brought up is not accurate. Because if my figures 
add up, you have about 625,000 total work that you have been 
doing, 219 and 406.
    Admiral Dunne. Sir, we have to include appeals in there as 
part of the workload also, which the RO has to use some of 
their personnel for.
    Senator Tester. OK. I assume that there are timelines for 
the appeals process, too.
    Admiral Dunne. Yes, sir. We established those.
    Senator Tester. Can you tell me what those are off the top 
of your head?
    Admiral Dunne. I would have to get those for you 
specifically in terms of targets.
    Senator Tester. That would be great.
    Do you have the needed employees you have now to reduce the 
backlog? Because it has been growing.
    Admiral Dunne. Sir, there is a difficult balance that has 
to be struck between simply adding more people to the process, 
which then creates also additional administrative 
responsibilities. I am not sure exactly where that perfect 
balance is.
    Senator Tester. I appreciate the position you are in 
because the claim rates are going up 5,000 a month from what it 
was last year, and the pending claims have gone up based on 
your answer to the question.
    The question is, does VA have a plan to reduce that 
backlog?
    Admiral Dunne. Absolutely.
    Senator Tester. Whether it is employees or technology or 
whatever, when will that plan be implemented so that we can 
start to see that backlog go down?
    Admiral Dunne. Sir, we are working on several issues right 
now, both technology-wise and training of personnel, which will 
have effects over time. How fast, it is very difficult to say 
that a certain action that we take will result in X number of 
days or X number of claims being affected because each claim is 
truly unique.
    Senator Tester. I understand.
    Admiral Dunne. We have a technology plan, which I am 
working with the Chief Information Officer and the Chief 
Technology Officer to put in place on top of our business 
process--the reevaluation--which is going on now. We have the 
pilot going on in Little Rock and a pilot going on in 
Providence that are directly looking at the process that we go 
through, how we handle things, in trying to improve that, sir.
    Senator Tester. I understand. I understand the position you 
are in, and I have some empathy for it. But I also have some 
empathy for the veteran out there who is in that backlog group.
    My time has also run out. But I would just say we have not 
hit break even yet. We are still going the wrong direction. 
That somewhat distresses me. I know that the pressures have 
been greater because of Afghanistan and Iraq and others, but 
the truth is we have to get to a point where we start reducing 
the backlog, and we are not there yet, and that is somewhat 
distressing.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you, Senator Tester.
    Let me call on our Ranking Member, Senator Burr, for any 
opening remarks and questions.

        STATEMENT OF HON. RICHARD BURR, RANKING MEMBER, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Burr. Mr. Chairman, thank you for recognizing me.
    Admiral, I apologize for my tardiness this morning. I would 
ask unanimous consent that my opening statement be a part of 
the record, and I will be happy to fall in the back of the line 
to ask questions after every other Member has completed the 
first round.
    Chairman Akaka. Without objection, it will be added to the 
record.
    [The prepared statement of Senator Burr follows:]

       Prepared Statement of Hon. Richard Burr, Ranking Member, 
                    U.S. Senator from North Carolina

    Thank you, Mr. Chairman. Welcome to you and to our witnesses. I 
appreciate you calling this hearing to discuss ideas on how to improve 
the Disability Evaluation System for our Nation's veterans. For the men 
and women who have served and sacrificed for our Nation, they deserve a 
system that meets their needs without hassles or delays.
    To truly live up to that goal, experts have stressed for more than 
five decades that we need to update and streamline the disability 
system. But, decades later, many wounded warriors still face a lengthy, 
bureaucratic process to find out whether they will be medically 
discharged from service and what benefits the military will provide. 
Then, these injured veterans may go through a long, complicated process 
to find out what VA benefits they will receive.
    We will hear today about the steps that have been taken to try to 
improve this situation, such as the joint VA/DOD pilot program for 
transitioning servicemembers and ongoing efforts to modernize 
information technology systems. Also, there have been large staffing 
increases at VA, with field staff more than doubling in less than 10 
years.
    Despite those efforts, I think it's clear that simply adding more 
staff and making minor changes hasn't fixed the problems. The claims 
process, as a whole, still takes far too long for many veterans, in 
North Carolina and across the country.
    It takes more than five months on average for VA to make an initial 
decision on a claim for veterans' benefits and, if the veteran decides 
to appeal, the delays can go on for years. In fact, Professor Allen 
noted in a recent article that the average time from when a veteran 
files a claim with VA until getting a decision by the Court of Appeals 
for Veterans Claims is between five and seven years!
    I think a process that takes that long is indefensible. Our 
veterans and their families deserve better.
    That's why, at a hearing earlier this year, I asked our witnesses 
to take a clean piece of paper and redesign the entire disability 
process, as if we were standing up a new system today. In response, the 
Committee received some very constructive recommendations, and I thank 
everyone involved in crafting those responses.
    Today, we will hear from the Disabled American Veterans about the 
proposal they developed in response to my request. That proposal 
includes recommendations for technological improvements, compressing 
timeframes throughout the claims process, eliminating unnecessary 
procedural steps, and helping avoid time-consuming 
remands.
    I applaud DAV for these constructive proposals. I think these types 
of changes could go a long way toward streamlining the claims process 
and, more importantly, toward reducing the delays and frustrations our 
Nation's veterans and their families now face. That's why I am pleased 
to be working with DAV to draft a bill that would help make those 
changes a reality.
    Mr. Chairman, I hope my bill will be a good step in the right 
direction. I look forward to working with you to advance that 
legislation and other changes that can help get decisions to veterans 
faster. This system has been plagued with problems for far too long. 
So, I hope this Committee will move aggressively to make the system 
work better for veterans, now and in the future.

    I thank the Chair.

    Chairman Akaka. Senator Begich?

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you very much, Mr. Chairman.
    Thank you all for being here. I believe this is your second 
or so hearing regarding the DES. I'd like to follow up on two 
questions, one each by Senator Johanns and Senator Tester.
    First, on the best practices, to be honest with you, I was 
not satisfied with your answer, and here is why. When you 
mentioned the best practices you said--I am going to try to 
paraphrase your comments, and that is--that you had the groups 
kind of talk about it.
    What I learned as mayor is when there are best practices, 
and you have multiple agencies with different practices, one 
may not acknowledge that the other one has a best practice. To 
let them just discuss it does not work.
    How do you pull the trigger to make sure that when you see 
something that is successful--I do not know enough about 
Nebraska's example in Lincoln, but let's assume that has best 
practices there. How do you say to the rest of them this is 
working; we are doing it this way. Because the way you made it 
sound, honestly, I was not satisfied with that. When you leave 
it to the agencies or the different organizations, no one 
believes they have bad practices.
    Admiral Dunne. Senator, I will give you an example. One of 
the things that I learned from traveling around to the offices 
is that at the present time people that are working claims have 
to send letters to veterans. They have to print those letters 
out on printers. They share printers. They have to walk around 
the room to get it. They also have to sort through the outbox 
to figure out which product from the printer is theirs and 
which belongs to another VSR.
    I directed that we start funding that so that we can get a 
printer on everybody's desk, and they can all print their own 
correspondence and handle it themselves; save time and save 
confusion. So, we are going to go do that. That is one example, 
sir.
    Senator Begich. Let me ask you, also, in regards to that--I 
think Senator Tester asked a question of the claims. I think 
you said around 11,000 at some point have gotten to a year.
    Maybe I am wrong about this, but is the goal 125 days? Is 
that right?
    Admiral Dunne. The strategic target is to complete all 
claims on an average of within 125 days, sir. If we can do them 
sooner than that, we will do them sooner than that.
    Senator Begich. How did you select a year, which is almost 
three times what the target is? In other words, it seems 
significantly long when you think about it. If your target is 
125 days but you are waiting a year to intervene on those kind 
of--I do not know if the right phrase is complicated claims--
but claims that are not resolved, it is three times what your 
average is before you kind of step in and say we got to deal 
with this.
    How did you come up with three times?
    Admiral Dunne. Senator I did not mean to imply that we did 
not take a look at a claim until it got to be over a year, but 
when it did--each of the regional offices has their own 
monitoring system. They are able to monitor, through the 
computer, the age of all their claims and they work them. But 
if they get to that point of a year, then that is when we turn 
them over to a Tiger team.
    Admiral Dunne. You had mentioned around 4,000 or so new 
employees that were added.
    Is that net after attrition and other exits?
    Admiral Dunne. A net of 4,200 new employees since January 
2007, sir.
    Senator Begich. What do you need to get to the level to--I 
think to follow up again with Senator Tester--get ahead of the 
game? How many more employees?
    Admiral Dunne. Again, ahead of the game, sir. I would say 
at this point, having evaluated it for 16 months, we need to 
implement the IT portion of this because the significant 
savings that we need to move things around, we need a digital 
capability to do it. I will give you an example of a claim.
    When a claim comes in and it is processed, then there is a 
need to go back and communicate with the veteran, and send that 
veteran a letter and say this is what you have claimed, this is 
what we need, additional evidence, et cetera, and give that 
veteran 30 days to respond. If the veteran sends additional 
information in, then that comes in to the mailroom, and someone 
has to take it and move that piece of paper to wherever that 
claim file might be. That takes time; it takes people.
    If we have a digital capability, when that new piece of 
evidence is scanned in, it can be scanned in with the bar code 
and immediately go to the electronic claim file, which would 
then trigger a management item that would tell someone there is 
new evidence in this claim folder; you can act on it now.
    Senator Begich. Let me ask you--and I am just about out of 
time here. First, regarding personnel that you believe you may 
or may not need, do you have the necessary resources to hire 
those personnel? And the second piece is on the digital 
component. Do you have enough resources to implement what you 
want to do with regards to digital resources?
    Admiral Dunne. Sir, I would say that we have the correct 
people. At this point, we have the correct funding. And I 
believe that the budget requests the additional resources that 
we need.
    Senator Begich. Great. Then, I guess, last question.
    When you set on this course, did you develop a strategic 
plan--I am assuming you did--that lays out kind of your target 
dates and goals, how you will achieve where you want to be, and 
how do you keep track of that? Do you have such a document?
    Admiral Dunne. Sir, I am in the process of creating such a 
timeline with the Chief Information Officer and the Chief 
Technology Officer.
    Senator Begich. Can you share that with us when you----
    Admiral Dunne. Absolutely.
    Senator Begich. Great. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Begich.
    We will next hear from Senator Murray--her opening 
statement and questions. We will be continuing with the 
questions.
    Unfortunately, my presence is required at the markup of 
another committee. In my absence, Senator Murray will be 
chairing this hearing to conclusion. She is, you know, an 
active Member of this Committee, and I know that she cares 
deeply about the issue that we are discussing.
    So now, I would like to turn the gavel over to Senator 
Murray.

                STATEMENT OF HON. PATTY MURRAY, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Murray [presiding]. Mr. Chairman, thank you very 
much. I will submit my opening statement for the record.
    [The prepared statement of Senator Murray follows:]

 Prepared Statement of Hon. Patty Murray, U.S. Senator from Washington

    Chairman Akaka, Senator Burr, thank you very much for holding 
today's hearing to discuss VA's disability claims and appeals process.
Improvements Made by VA and Congress
    Over the last several years, this Committee has held a number of 
hearings to explore ways we can improve the timeliness and quality of 
our disability compensation system. Congress has provided funding to 
increase staffing at the Veterans Benefits Administration, promote 
specialized training, and urged the adoption of information technology 
solutions.
    In response, VA has redistributed workloads, begun to shift to a 
paperless environment; and implemented pilots to test new innovative 
methods for improving the claims process.
    Those efforts have yielded some results. Over the last 10 years, VA 
has increased the number of claims it has processed by 60 percent. It 
has also reduced the average time to complete a rating claim from 178.9 
days in Fiscal year 2008 to 161.3 days at the end of June 2009.
More Work Remains
    Yet, despite all of the progress and all of the hard work being 
done, far too many veterans continue to wait far too long to have their 
claim reviewed.
    Part of this, as we all know, has to do with the massive increase 
in claims being filed; part of it has to do with the increasing 
complexity of those claims; and part of it has to do with legislation 
and regulations that we have used to expand VA benefits.
Importance of Fairly and Quickly Compensating Wounds of War
    It goes without saying that this country owes a debt of gratitude 
to the men and women who have sacrificed to defend our freedoms.
    But we owe our veterans more than gratitude. As the Veterans 
Disability Benefits Commission wrote in its report, ``just as citizens 
have a duty to serve in the military, the Federal Government has a duty 
to preserve the well-being and dignity of disabled veterans by 
facilitating their rehabilitation and reintegration into civilian 
life.''
    By providing services and benefits to veterans in a timely and 
sufficient way, not only do we express the gratitude of grateful nation 
to our wounded warriors, but we also help smooth their transition back 
into civilian life.
Problems with Current System
    Yet, too often when I speak with veterans, I am frequently reminded 
that the VA is often seen as a veteran's adversary, not a veterans 
advocate.Between lost or destroyed records, unruly and unorganized 
files, and an incentive system that many VBA employees perceive to 
value the quantity of claims processed more than the quality of those 
claims, Veterans often perceive the deck to be stacked against them.
    General Omar Bradley once famously said, ``We are dealing with 
veterans, not procedures--with their problems, not ours.''
    As we move forward with the modernization and improvement of the 
veteran's compensation system, we need to keep that sentiment in mind.

    Thank you Mr. Chairman.

    Senator Murray. Let me just summarize it by saying that we 
have provided a lot of funding and promoted specialized 
training and passed legislation, and I know that there is a lot 
of increasing complexity with veterans' filings and that we are 
facing an increased number of veterans. But I have to say I am 
still--because I talk to veterans--really worried.
    I am frequently reminded that a lot of veterans see the VA 
as their adversary, not as an advocate: lost paperwork, 
misorganized files, an incentive system that many VBA employees 
perceive to value the quantity of claims processed more than 
the quality of those claims. So we still have a lot of work to 
do, because I think the veterans often see that when they go to 
file a claim, the deck is stacked against them, and we have got 
to keep working on this.
    So with that in mind, I wanted to ask some questions of you 
this morning, Admiral Dunne and Mr. Koch.
    In GAO's September 2008 report on the VA/DOD Disability 
Evaluation System Pilot, GAO reported that your two agencies 
had not established criteria for determining whether the pilot 
should be deemed a success and expanded to the rest of the 
system.
    Now, I understand that you are going to be issuing your 
final report to Congress in August, which is coming up very 
quickly, but can you tell the Committee, both of you, whether 
or not you have developed strong criteria to measure the 
success of this pilot and determined the feasibility of 
expanding this?
    Admiral Dunne. Senator, I think the best criteria that we 
have established so far is feedback from the servicemembers 
themselves and the veterans, which will be reflected in the 
report that we are providing. We are going straight to the 
veterans and the family members and asking them how satisfied 
they are with the process, with the different stages of the 
process, to determine whether what we think is progress is 
actually seen by them as progress, and learn from that, so that 
we can adjust the DES Pilot as necessary.
    Senator Murray. From your perspective, what is the 
important criteria to determine whether this is doing well or 
not?
    Admiral Dunne. Whether or not the servicemembers feel that 
they are being treated fairly, that they are getting consistent 
results, and that it is being done in the minimum amount of 
time, with recognition that they need time for medical healing 
and to adapt to the fact that their military career has been 
cut short.
    Senator Murray. Mr. Koch, do you have anything to add?
    Mr. Koch. Yes. I would add that one of the things we 
discovered--first of all, as Admiral Dunne indicated, we have 
extensive survey efforts to find out what the servicemembers 
feel about the way they are being treated. One of the things we 
discovered as we progress through this is that the earliest 
generations of veterans and their families--in particular, 
talking to the wives who have to deal with injured 
servicemembers--that the earlier group has a higher level of 
dissatisfaction than more recent participants in the process.
    So, what it is telling us is that we are getting better at 
what we do, but we still have to go back and recapture those 
earlier people who have gone through this at a point when we 
were just learning how to do better what we were doing.
    Senator Murray. How much money is the VA putting in and how 
much is DOD putting in to this pilot?
    Mr. Koch. Oh, into the pilot?
    Senator Murray. Into the pilot.
    Admiral Dunne. Senator, I would have to get the exact 
figures for you, but our approach has been that we do what is 
necessary. I do not mean to say we have been cavalier about the 
funding of it, but we have just gone off and determined what 
has to be done, which the Secretary has directed us to go do 
it.
    Senator Murray. OK. If you could get that answer back to 
me, I would appreciate that.
    If you do decide that this pilot should be expanded, how 
are you going to roll it out consistently?
    Admiral Dunne. Senator, the next step will be that the 
Senior Oversight Committee is going to meet near the end of 
August and will evaluate the report preliminary to providing it 
to Congress. Should they accept the report and be satisfied 
with the results or provide guidance to make some changes, 
those will be implemented directly with each of the military 
treatment facilities before implementation.
    We have cued up right now a list of seven MTFs which we 
plan to recommend to the Senior Oversight Committee that we 
include them within the pilot. We have already conducted 
training for those organizations. If we get additional guidance 
from the Senior Oversight Committee, we would conduct that 
training with those MTFs before we implemented it.
    Senator Murray. OK. Will you share that information with us 
as you move forward on it?
    Admiral Dunne. Absolutely, Senator.
    Senator Murray. OK. Let me change direction a little bit.
    Earlier this month, the director of the VA's Center for 
Women Veterans came before this Committee and testified that 
her office was planning on working with DOD and VA, through the 
White House Interagency Council on Women and Girls, to make 
sure that the combat experience of female servicemembers and 
veterans is properly documented in their DD-214s.
    This is extremely important. I am hearing from a lot of 
women who have been in Iraq, some in Afghanistan, who have come 
home and do not have the proper documentation saying that they 
were in combat areas. I wondered if either of you are aware of 
that effort, and can you give us any progress on that so these 
women get their proper service credentials when they come home.
    Admiral Dunne. Senator, I am aware of the fact that we are 
working with DOD, two parts of it, to get the DD-214 
transferred to us electronically so that will also speed up the 
process of us adjudicating claims; and to make sure that DOD 
has all the requirements that we need from that DD-214 document 
so that they can be incorporated into this electronic exchange 
of information.
    Senator Murray. OK. The problem begins in DOD where women--
particularly, but also some men who are in combat--experience 
their records being notoriously incomplete or vague. It 
particularly impacts women, where people are not so excited 
about writing something in their DD-214.
    So, Mr. Koch, are you aware of this problem and can give us 
any input?
    Mr. Koch. I am aware of it, Senator, and we are finding 
that this, again, is a learning process. The sort of war that 
we are involved in is requiring us to think in new ways about 
how we handle this. I mean, it is just not cut and dried and 
anymore.
    I do not mean to be craven about it; I am not making 
excuses about it, but what we are trying to get our arms around 
are the multiple deployments, people who are trying to catch up 
with their records; we are trying to catch up with their 
records. And we do, but there are backlogs. In some cases, we 
do not know that we have missed something until a servicemember 
calls it to our attention, and that may take some time. So it 
is something that the Department is concerned about and is 
trying to address as quickly as we can.
    Senator Murray. Well, I am going to continue to push 
everybody on this because when somebody goes over and serves 
our country and then--simply because somebody does not write 
something on a form--comes home and is denied their care, to me 
is just really unjust. This is something I care a lot about, 
and I will continue to push all of you on this.
    Admiral Dunne, let me ask you. GAO's testimony notes that 
the VA is expecting an increase in claims as the result of an 
October 2008 regulation change that affects the VA rating for 
TBI, for Traumatic Brain Injury. Given the complexity of rating 
TBI claims, what is the VA doing now to prepare its staff with 
this expected increase in TBI claims?
    Admiral Dunne. Senator, the regulation that was put in 
place last October was the most up-to-date, best information-- 
medical evaluation--that we could obtain as a result of meeting 
with many experts, both on the DOD side and on the VA side.
    Our anticipation is that we will get additional claims, but 
our claims processors--the folks who actually do the rating--
received training on the new regulation and how to apply it. 
And we think as a result of the work that Mr. Pamperin and his 
folks did, that the rating schedule in that area is much easier 
to understand and easier for the medical folks to provide the 
information that we need to put into the schedule.
    Senator Murray. OK.
    Mr. Pamperin. Ma'am, in addition to that, part of that 
projection of increased workload is an outreach effort that we 
have made for the people who are already service-connected for 
TBI, advising them of the change in the schedule and encourage 
them to come in if they feel that they have more than 
subjective symptoms. We have done extensive training on TBI. We 
have issued training letters on that, and I believe that we are 
ready.
    Senator Murray. OK. Well, this is something, too, that this 
Committee, as you know, has followed very closely, especially 
on knowing that a lot of men and women have come home and are 
sitting somewhere in their community with symptoms, and have no 
idea that it is Traumatic Brain Injury. We have had a lot of 
resources put into this, so we want to make sure those folks on 
the ground out there are trained and adequately following these 
new procedures. So we will be following this closely, and I 
appreciate that.
    Senator Burr?
    Senator Burr. Thank you, Madam Chairman.
    Admiral, again, welcome. Thank you, and I thank your 
colleagues for your service to our country's veterans. I really 
appreciate it.
    Admiral, in the stimulus package, we provided $150 million, 
and the purpose of it was to hire the individuals to create a 
surge in the claims process. According to the VA's 2010 budget 
request, you suggested that the goal was to achieve an 
additional 10,000 cases from that surge effort.
    How many new hires does that $150 million provide?
    Admiral Dunne. Senator, I believe that we will be able to 
hire over 2,000 temporary employees. At the present time, we 
have already hired almost 1,300 of them. So, some of them have 
already started and we are in the process of training them so 
that they can take on some of the other work--that which we can 
quickly train them and get them started on.
    Senator Burr. Do you stand by the goal of 10,000 claims 
being processed based upon the surge capacity?
    Admiral Dunne. Senator, I would tell you that that is not 
based on any specific equation that I could put numbers into, 
et cetera. We just had to take a look at how many people we 
thought we could hire. The training that we can do to get them 
proficient in some task. They obviously will not be able to 
rate claims, but they can help us move different support 
functions through the regional office faster. So while they 
will not have a direct impact on claims, we believe it will be 
an ancillary impact, and that is our best judgment on what we 
think we can make happen.
    Senator Burr. I appreciate that, and for the purpose of my 
colleagues to understand that there is a learning curve that 
these people have to go through, that you cannot go out in the 
marketplace and hire people to walk in on day one and start 
making disability determinations. One really cannot walk in and 
process claims.
    I might note that this is not a cheap investment. If, in 
fact, we got 10,000 claims off of it, that is $15,000 a claim. 
When you stop to think about it in those terms, you realize 
just what the size of the investment is to try to address this 
backlog, and to do it by increasing the number of claims that 
can be processed by people.
    I might say, the most refreshing thing I think I will hear 
today, I heard earlier, is that we need to think in new ways. I 
appreciate that thought, because I think that is what some of 
us on the Committee have been saying for sometime. We have got 
to a point where we have got to think outside the box. We have 
got to look at doing things in ways that we have not done 
before. We have got to reach out and look at technology, and 
pull it in and say, how can you help us do this. But we also 
have to look at the process that we have and ask ourselves, 
where can we make changes that we are comfortable with that 
shorten the period of time yet provide the right opportunities 
to a veteran to make sure that their case has fully been heard.
    Now, the DAV submitted a proposal to the Committee 
outlining a number of recommended changes to the claims 
process. In part, their proposal recommends eliminating certain 
procedural steps that they see as unnecessary.
    Admiral, do you agree with the basic premise that wherever 
possible we should try to eliminate unnecessary procedural 
steps in the claims and appeals process?
    Admiral Dunne. Absolutely, Senator. I am working on that 
right now.
    Senator Burr. Then I would take for granted you are aware 
of some of the steps that probably should be eliminated or 
should be considered for elimination.
    Admiral Dunne. Senator, I have my own list, yes.
    Senator Burr. Today's testimony from the Government 
Accounting Office mentions, and I quote, ``Each time appellants 
submit new evidence, VA must review and summarize the case for 
the appellant again, adding to the time it takes to resolve the 
appeal.''
    As we will hear later, ``the proposal from the DAV would 
attempt to address this issue by providing the Board of 
Veterans' Appeals with the authority to review the newly 
submitted evidence in the first instance unless the individual 
who files disagrees.''
    Is that reasonable?
    Admiral Dunne. Sir, when we get into the appellate 
category, I have to defer to the lawyers because I might see 
something where I would say we could do this faster, but I 
would not want to deny a veteran his legal rights for 
consideration of certain items.
    Senator Burr. But if it could uphold that legal right, then 
we should do everything to avoid these types of delays?
    Admiral Dunne. Any delay. I am happy to get rid of sources 
of delays, sir. So, as long as we take care of the veterans in 
the process and they are amenable to it, I am in favor of it.
    Senator Burr. OK.
    Earlier this year at one of our hearings, I think a number 
of organizations testified that the VA Appeals Management 
Center should be dissolved. They called it a black hole. And I 
realize there have been attempts to make changes within the 
center. I would like you to be very candid with us.
    Can you update us as to those changes and successes? Then, 
at what point should we collectively look at that and either 
say it has now worked or we need to eliminate it and move on?
    Admiral Dunne. Senator, we have made some changes. One of 
the changes we made is we put a new director at the AMC here in 
Washington. He has made progress already. I think he will 
continue to make progress.
    One of my sources of information, of course, is talking 
with the veteran service organizations. I meet with them 
routinely--at a minimum, once a month--to get their inputs. I 
plan to continue to work with them on this and other issues 
where we can identify problems.
    But, I truly believe that consolidating this into one area 
is the best way to go in order to serve our veterans. I do not 
deny that we have had some problems, but that is part of 
putting the process together, and I think we will continue to 
improve it.
    Senator Burr. So, would I take away from that that we are 
hopeful that a leadership change will resolve the deficiencies 
that are there? Or are there other challenges that we are faced 
with--local job market, et cetera--that come into play?
    Admiral Dunne. Senator, I would say that this appellate 
process is also affected by the fact that it is paper-borne as 
well. So, to the extent that we can bring IT solutions into the 
basic claims process, that also will help the appellate 
process.
    One of the big points that I am always making with the 
folks that work on claims is that we need to continue to 
improve our accuracy because the goal is to touch a claim once. 
We want to create a reputation with our veterans that when we 
take their claim, we handle it, we give them an answer--it is 
the right answer--and that there will be a reduced number of 
appeals as a result of that consistency and accuracy, in 
addition to using IT solutions, sir.
    Senator Burr. Well, I thank you for that.
    Last question, Admiral, and it is slightly off of today's 
topic, so I hope you will give me the leeway to do that.
    I understand that the VA recently heard from a number of 
family caregivers who have concerns about VA's fiduciary 
program. My office has heard from some of the same caregivers 
that voiced some concerns to the VA. These are wives and 
parents and siblings of severely injured veterans who have 
dedicated their lives to caring for the needs of those 
individuals--their injured loved ones--and they feel that the 
VA's fiduciary policies are demeaning and burdensome.
    Do I have your assurance that you will take their concerns 
seriously and will ensure that the VA's fiduciary policies are 
not only looking out for the interest of the injured veterans 
but also are affording the respect, trust and dignity that we 
owe these family caregivers?
    Admiral Dunne. Senator, I would tell you that I am sworn to 
do that very thing, and I intend to do that. I can tell you 
specifically that Mr. Pamperin here has already reached out to 
several of the VSOs to meet with them and understand what their 
concerns are with the fiduciary process.
    That is always a difficult thing whenever a fiduciary has 
to get involved on behalf of a veteran. We want to make sure 
that it is done properly. We also want to recognize that we are 
in a new environment and there are younger veterans and 
families involved. So, we perhaps need to revise our rules and 
processes, and that is exactly what we intend to evaluate and 
pursue, sir.
    Senator Burr. Admiral, I appreciate your candid answer and, 
again, thank all three of you for your service to the veterans.
    Thank you, Madam Chairman.
    Senator Murray. Senator Johanns, do you have any additional 
questions?
    Senator Johanns. No.
    Senator Murray. OK. I just have a few additional questions. 
Admiral Dunne, you piqued my interest.
    Can you tell us what steps in the claim process are on your 
list for possible removal?
    Admiral Dunne. I would be happy to, Senator. I will give 
you an example of some of the items.
    One is apportionment. When we get involved with a veteran, 
family member, et cetera, where there is separation, one party 
will apply to us for a portion of the veteran's benefits in 
order to be properly supported. At the present time, there is a 
very lengthy, detailed process--essentially, in the absence of 
a court decision, for us to go in and play Solomon and decide 
what the percentage breakdown should be.
    I am trying to determine the proper way to approach this so 
that our employees are not asked to play judge and jury but 
rather to have a metric that they go by, which would be fair to 
all concerned, and that would save us a considerable amount of 
time.
    We have seen some progress as a result of the fully 
developed claim pilot, which Congress authorized us to do. In 
that environment, where the veteran takes advantage of that, we 
have been able to turn those claims around under the 90-day 
goal that was set in the legislation. So, we intend to pursue 
that. We are also seeing some success as a result of the 
checklist, which is added to the letter--another pilot that 
Congress authorized us to perform--and we would like to perfect 
that as well.
    Senator Murray. OK. Very good. I appreciate that.
    One of the things I hear from veterans all the time is that 
their paperwork is lost. I understand complex systems and 
everything, but, Admiral Dunne, let me start with you.
    What action can the VA and DOD take to make sure that 
somebody's ship or unit location can be readily accessed by VA 
employees so that they can substantiate a claim?
    Admiral Dunne. Senator, I think the long-term answer is our 
virtual lifetime electronic record, which, as you know, the 
President charged both the Secretary of Defense and Secretary 
of VA with pursuing. We are hard at work at that. I think that 
is the long-term solution.
    In the short term, some of the things that we have 
accomplished--as you recall, last October we did have a problem 
with shredding of documents, et cetera. I believe that the 
records management program we have put in place as a result of 
that situation is yielding benefits, and we are going to pursue 
that. One piece of paper lost, one piece of evidence, is too 
many. So, we just have to continue to work at it and keep 
people's attention focused on the fact that that piece of paper 
is a veteran; it is not just a piece of paper.
    Senator Murray. Thank you. I appreciate that.
    Mr. Koch, what can the DOD do to keep better records so 
that we do not hear continuously from veterans that their 
paperwork has been lost, cannot be found, and VA cannot 
substantiate it?
    Mr. Koch. Senator, I am not sure that the issue is the 
quality of recordskeeping, but the management of those records 
once they are created. I, frankly, do not know what the answer 
to that is. I am sorry. I wish I could give you something more 
straightforward, but I can not. People lose records--I think, 
particularly, medical records.
    Something as simple as putting these things into a thumb 
drive that a servicemember could carry like an electronic dog 
tag might make sense. But then you would have the question of 
keeping these things updated, and that is always a difficult 
thing to do, so that every time you go to get shots, that has 
to be recorded. And sometimes it is difficult to keep these 
things together and to keep them up to date.
    So, there is a question of our responsibility to find a 
solution to this, and the servicemembers share a responsibility 
as well. Sometimes one side or the other does not do it. Of 
course, as we understand very well, those are the exceptions 
that come to our attention and that give us so many headaches.
    What is not recorded is the vast majority of records that 
are properly kept and are properly handled, which is not to 
negate, as Admiral Dunne has said, one slip-up is one slip-up 
too many. But in a perfect world, we would not have those slip-
ups. We are trying to create a perfect world, but I do not 
think in my lifetime we are going to succeed at it.
    Senator Murray. Well, we have to keep working at it for 
sure because this is what we hear more than, I think, anything, 
is somebody's complete frustration that they cannot get a piece 
of paper that allows them to be able to substantiate and 
process a claim. So, the burden is on you.
    Senator Burr, you had another question?
    Senator Burr. Yes, ma'am, one last one.
    I chuckled, Mr. Koch, at the answer because I sat here 
thinking, you know, MasterCard and Visa can find everybody in 
America. And when they find them, they know exactly what they 
make and they know exactly what risk they are taking.
    I think sometimes there are real merits to us looking 
outside of organizations that we are in and tapping into people 
that, as you said earlier, think in new ways. It is not always 
incumbent on us to think of all those new ways, but it is 
incumbent on us to look out and find those entities that can 
help us make that transition to new ways. I certainly encourage 
the VA to do that in every appropriate area.
    Admiral, last year, the Congress directed the VA to submit 
a report regarding a study conducted by Economics Systems, Inc. 
on the issues of earnings, loss, quality-of-life payments, and 
transition payments. In part, the law required VA to set forth 
what actions VA plans to take in response to the study, a 
timeline for taking those actions, and any legislative changes. 
But I do not see any planned actions or timelines laid out in 
the VA's report.
    Can you clarify whether VA plans to take any actions in 
response to that study?
    Admiral Dunne. Senator, we evaluated the study. I would say 
that in the short 6-month period of time Econ Systems had to do 
that, they did a good job of evaluation, et cetera. But what I 
learned from that report is there is more information that we 
need in order to make any decisions or make any 
recommendations.
    I also recognize that I believe we need an opportunity, a 
time period for the Congress, all our stakeholders, to read 
that report and evaluate what is in there because some of the 
recommendations in there are truly national policy 
recommendations which do deserve evaluation and debate. And for 
us to have at this point, with only the information we have--
put forth a definitive ``this is what should be done,'' I think 
would not be serving our veterans properly, sir.
    Senator Burr. As a follow-up, does the VA have a position 
right now as it relates to compensating veterans for any loss 
in quality-of-life caused by their service-connected disability 
or can I take the report as an indication that the VA does not 
support it?
    Admiral Dunne. Sir, I would take it as a recognition by VA 
that there is more information that is needed and that there 
is more discussion that needs to take place with many experts 
before we would be prepared to say yes or no on any of those 
recommendations.
    Senator Burr. Admiral, I will not put you on the spot 
today, but I would love for you to go back and converse with 
the Secretary because I think what we need from you is what is 
the next step. Rather than to have this lay dormant for some 
period of time, I think it is absolutely essential that you 
tell us whether the next step are congressional steps, the next 
steps are VA steps, the next step is to stimulate the national 
debate.
    But I think that we have had a number of commissions 
report, and I think many of us have expressed our strong desire 
that the most recent two not join with the other commission 
reports which have found there way to the shelf of dust. I 
think that they were very specific as it related to the need to 
move to a system that compensated for the loss of quality-of-
life. I think there was a consensus within the VA then, and for 
the most part, I think, in Congress.
    I just want to make sure that with this momentum we try to 
come to some finality in the loss, that we get to that point. 
If at the end of the day we determine we have a system that 
cannot do that, then we have to decide whether we change the 
system to accommodate it, or, in fact, we may find that we can 
do this and incorporate it in the same system.
    I happen to believe, as you know, that the disability 
system needs to be, for the lack of a better word, updated to 
reflect where we are and the new ways that we have got to think 
in the future. I think a quality-of-life payment is probably 
very appropriate in the context of the overall change to the 
system.
    Admiral Dunne. Yes, sir.
    Senator Burr. I thank you and look forward to the comments 
from you or the Secretary on what the next step is.
    Admiral Dunne. Understood, sir. I will get you an answer.
    Senator Burr. Thank you, Admiral; Madam Chair.
    Senator Murray. If there are no further questions from the 
senators, I want to thank this panel for your testimony and 
your work. There will be time left to submit any questions from 
senators. Again, thank you so much for your testimony this 
morning.
    With that, we are going to move to our second panel. Please 
come forward and take your seats.
    I want to welcome our second panel this morning. I will 
introduce them as they are getting seated.
    Our first witness is going to be Michael Allen. He is a 
professor of law at Stetson University. Next, we have Daniel 
Bertoni, the Director of the Disability Issues from the 
Government Accountability Office, GAO. Our final witness is 
retired Air Force Lieutenant-Colonel John Wilson. He is the 
Associate National Legislative Director of the Disabled 
American Veterans.
    I thank all of you for being here this morning and 
appreciate your appearing before this Committee. Your full 
testimony will appear in the record. Professor Allen, we are 
going to begin with you.

   STATEMENT OF MICHAEL P. ALLEN, PROFESSOR OF LAW, STETSON 
                           UNIVERSITY

    Mr. Allen. Thank you, Senator Murray, Ranking Member Burr 
and Members of the Committee. Thank you for the invitation to 
testify here this morning. Most of the other witnesses have 
talked about, or will talk about, the claims processing at the 
administrative level. I am going to focus my remarks on the end 
of the process, which is the appellate review--the judicial 
appellate review of those determinations--because, as the 
Members of the Committee have noted at many different times in 
the past, what goes in at the beginning is going to make a 
difference at the end of the pyramid.
    This coming October marks the 20th anniversary of what we 
now know as the U.S. Court of Appeals for Veterans Claims. 
Until Congress enacted the Veterans' Judicial Review Act of 
1988, there was effectively no judicial review of veterans' 
benefits determinations outside of the VA administrative 
process itself. So, the VJRA was itself a milestone in the 
commitment, the evolving commitment, to veterans in the United 
States, and I think it is an opportune time to look back and 
see what has happened in the last two decades.
    I should say that the addition of independent judicial 
review of these veterans' benefits determinations has been 
successful, and I think we can lose sight of that when we try 
to think about ways to improve the system.
    As I explain more fully in my written testimony, it has 
been successful in a number of ways. One, it has dramatically 
increased the uniformity and predictability of administrative 
decisions. Second, it has enhanced the actual but also the 
perceived fairness of the process and it has improved 
administrative decisionmaking. But despite its successes, 
independent judicial review has caused or contributed to 
serious problems in the system.
    First, and most importantly, as the Committee has noted now 
and in past hearings, are the delays that veterans face as part 
of the claims process. One cause of that is the dual layer of 
appellate review, meaning appellate review first at the 
Veterans Court and then a second appellate review at the U.S. 
Court of Appeals for the Federal Circuit. There is no other 
similar level of dual layer of appellate review right now in 
the Federal system.
    Second, there are, and as this Committee has noted in the 
past, large numbers of remands. Those large numbers of remands 
do not just occur from the board to the regional office within 
the administrative system. They occur from the Veterans Court 
back to the board, and this increases delay.
    Third, there is an inability to adjudicate class actions or 
aggregate litigation at the Veterans Court. And in lots of 
other contexts, class actions can have bad or good 
connotations, depending upon the political views. But, really, 
the issue here is not the traditional class action; it is the 
ability to handle a large number of claims that all have the 
same legal issue at once. Those factors have led to increased 
delay.
    There is also tension between the Federal Circuit and the 
Veterans Court. There are tensions between the Veterans Court 
and the Secretary at times. Another problem with judicial 
review has been an issue that Senator Murray alluded to in her 
questions to the last panel, which is that the veteran can get 
caught in the space between the administrative process and the 
judicial process, because whether or not the VA process 
continues to be non-adversarial, people can debate that.
    But that is the stated purpose of the system. There is a 
transition point from that system to judicial review before the 
federal courts where it is a traditional adversary system, and 
veterans face a difficult challenge moving from one to another. 
So, there are these problems with judicial review.
    So, what I would urge is for Congress to consider--and I 
hate to use the word ``commission'' again, Senator Burr--a 
commission or I will call it a working group perhaps, to study 
the system. What changes can be made in the process from 
beginning to end, including judicial review now that we have 20 
years under our belts.
    The key to this idea is that there is the widest possible 
buy-in from affected groups: veterans, the Department and all 
its facets, Congress and the relevant judicial bodies. And I do 
not think this commission should be limited in what it can 
consider.
    To paraphrase Ranking Member Burr at a hearing in February, 
``This commission should start with a blank piece of paper to 
design this system with no preconceived notions. It has got to 
keep the interest of veterans in mind, their paramount 
constitutional issues of due process and separation of powers, 
and the public's interest in the expenditure of resources.''
    But beyond that, the system should take the time to step 
back and see where we have been because, after all, only a few 
hundred yards from here in 1865, Abraham Lincoln gave his 
famous second inaugural address in which he called on the 
Nation to stand up for the people who stood up for the country 
and their dependents. We are still doing that today. So for me, 
it is a distinct honor to even be a small part of the process. 
Thank you.
    [The prepared statement of Mr. Allen follows:]

             Prepared Statement of Prof. Michael P. Allen, 
            Stetson University College of Law, Gulfport, FL

    Mr. Chairman, Ranking Member Burr, and Members of the Committee: 
Thank you for the invitation to testify this morning concerning the 
current state of appellate review of veterans' benefits determinations 
and how this review might be improved. It is a distinct honor to be 
here to discuss this critically important topic for the men and women 
who have answered the call to serve the Nation.
    I am a Professor of Law at Stetson University College of Law in 
Gulfport, Florida. For the past five years, I have had the pleasure of 
studying the existing system for reviewing veterans' benefits 
determinations. As I will explain, one should not lightly discount the 
benefits of the current system given the reality that twenty years ago 
there was no such review. However, there are clearly steps that could 
be taken to improve the existing system. The time is ripe to do so. I 
applaud the Committee for its attention to this important matter.
    My testimony this morning is based in large part on prior work I 
have done in this area. That work is discussed in more detail in two 
law review articles to which I refer the Committee for additional 
information: Michael P. Allen, The United States Court of Appeals for 
Veterans Claims at Twenty: A Proposal for a Legislative Commission to 
Consider its Future, 58 Cath. U. L. Rev. 361 (2009) and Michael P. 
Allen, Significant Developments in Veterans Law (2004-2006) and What 
They Reveal About the U.S. Court of Appeals for Veterans Claims and the 
U.S. Court of Appeals for the Federal Circuit, 40 U. Mich. J.L. Reform 
483 (2007). [See Appendix for article from Prof. Allen.]
    As I explain below, I believe that Congress should appoint a 
commission or other working group to consider possible improvements in 
the process by which veterans' benefits determinations are reviewed. 
While I have my own thoughts about this matter (some of which I will 
share in my testimony), the key to any successful revision of the 
system will be buy-in from the widest possible cross-section of 
interested groups. As such, the commission or working group should be 
comprised of representatives of all relevant constituencies including 
veterans, the Department in all its facets, Congress, and the 
appropriate judicial bodies. Only in this way will the successes of the 
past twenty years be maintained and the way paved for an even brighter 
future.

                     THE CURRENT SYSTEM IN CONTEXT

    Until 1988, there was effectively no judicial review of 
administrative determinations concerning the benefits to which veterans 
and their spouses and dependants might be entitled under relevant law. 
As the Supreme Court noted (quoting a congressional report), the 
Veterans Administration operated in ``splendid isolation.'' Brown v. 
Gardner, 513 U.S. 115, 122 (1994) (quoting H.R. Rep. No. 100-963, 
pt. 1, p. 10 (1988)). This state of affairs changed with the passage of 
the Veterans' Judicial Review Act of 1988 (the ``VJRA''), Pub. L. No. 
100-687, 102 Stat. 4105 (codified as amended in scattered sections of 
38 U.S.C.). The centerpiece of the VJRA was the creation of what is 
today called the United States Court of Appeals for Veterans Claims 
(the ``Veterans Court'').
    In order to assess the current state of appellate review of 
veterans' benefits determinations, and the role of the Veterans Court 
in that process, it is useful to step back and consider a high-level 
overview of the system. The Members of this Committee already have a 
deep understanding of these matters. As such, what follows is simply a 
general outline of what is a far more detailed system.
    A veteran wishing to receive a benefit to which she believes she is 
entitled begins the process by submitting an application with one of 
the VA's regional offices (RO). If the veteran is satisfied with the 
benefits awarded, the process is at an end. However, there are a number 
of reasons why the veteran may be dissatisfied with the RO's decision.
    When the veteran is dissatisfied with the RO's decision, she has 
the option to pursue an appeal within the Department by filing a 
``Notice of Disagreement'' (NOD) with the RO. The NOD triggers the RO's 
obligation to prepare a ``Statement of the Case'' (SOC) setting forth 
the bases of the decision being challenged. If the veteran wishes to 
pursue her appeal after receiving the SOC, she must file VA-Form 9 with 
the RO indicating her desire that the appeal be considered by the Board 
of Veterans' Appeals (``Board'').
    Congress provided that veterans are entitled to ``one appeal to the 
secretary [of the Department of Veterans Appeals]'' when denied 
benefits. See 38 U.S.C. Sec. 7104(a). That appeal in actuality is taken 
to the Board. The Board is led by a Chairperson, appointed by the 
President and confirmed by the Senate, and a Vice-Chairperson, 
designated by the Secretary. The Board is comprised of approximately 60 
Veterans Law Judges and over 250 staff counsel and other support 
personnel.
    The Board bases its decision ``on the entire record of the 
proceeding and upon consideration of all evidence and material of 
record and applicable law and regulation.'' See 38 U.S.C. Sec. 7104(a). 
In addition to the material developed at the RO, the Board may also 
conduct personal hearings with the veteran at which new evidence may be 
added to the record. A final Board decision concludes the 
administrative process.
    If a veteran is dissatisfied with a final Board decision, she may 
elect to appeal that decision to the Veterans Court, which has 
exclusive jurisdiction to review such matters. The Secretary may not 
appeal an adverse Board decision. See 38 U.S.C. Sec. 7252(a). Congress 
created the Veterans Court under its Article I powers. See 38 U.S.C. 
Sec. 7251. The Court is comprised of judges appointed by the President 
with the advice and consent of the Senate to serve fifteen-year terms. 
See 38 U.S.C. Sec. 7251(a), (b), (c). The Veterans Court has the 
``power to affirm, modify or reverse a decision of the Board or to 
remand the matter, as appropriate.'' See 38 U.S.C. Sec. 7252(a). The 
Veterans Court is an appellate body that Congress specifically 
precluded from making factual determinations. See 38 U.S.C. 
Sec. 7261(c). The Court has ruled that its jurisdiction is limited to 
denial of (or other dissatisfaction with) individual claims 
determinations. Specifically, the Court has held that it is without 
power to adjudicate class actions or other aggregate litigation 
concerning more generic issues that may affect groups of veterans. See, 
e.g., American Legion v. Nicholson, 21 Vet. App. 1 (2007) (en banc) 
(holding that court lacked jurisdiction to adjudicate claims brought by 
an organization as opposed to an individual veteran); Lefkowitz v. 
Derwinski, 1 Vet. App. 439 (1991) (rejecting contention that court had 
the authority to adjudicate class actions).
    Any aggrieved party may appeal a final decision of the Veterans 
Court to the United States Court of Appeals for the Federal Circuit. 
See 38 U.S.C. Sec. 7292. Review of Federal Circuit decisions is 
available by writ of certiorari in the Supreme Court of the United 
States. See 28 U.S.C. Sec. 1254 (providing for Supreme Court appellate 
jurisdiction concerning decisions of the courts of appeals). Review in 
these Article III courts is limited by statute. Specifically, in the 
absence of a constitutional issue, the Federal Circuit (and at least by 
implication the Supreme Court) may review only legal questions; it 
specifically is precluded from ruling on a factual determination or on 
the application of law to the facts in a particular case. See 38 U.S.C. 
Sec. 7292(d)(2).
    Figure A summarizes the current procedures for considering 
challenges to the determination of entitlement to veterans' benefits:




    There is no question that at every stage in the process the current 
system operates under a staggering workload. This Committee has held 
numerous hearings over the past few years addressing this very real 
problem. There is no need here to dwell upon the statistics at the 
various adjudicatory levels in the process. For present purposes, the 
summary below is sufficient to establish that the system is operating 
at (or perhaps above) capacity:
Matters Before the Board
    In Fiscal Year 2008, there were 40,916 cases received at the Board 
(with 43,351 Form-9s filed). In FY 2008, the Board issued 43,757 
decisions. See Fiscal year 2008 Report of the Chairman, Board of 
Veterans' Appeals, available at http://www.va.gov/Vetapp/ChairRpt/
BVA2008AR.pdf.
Matters Before the Veterans Court
    In Fiscal Year 2008, there were 4,128 new cases filed at the 
Veterans Court. The Veterans Court decided 4,446 cases during that 
period. See United States Court of Appeals for Veterans Claims, Annual 
Reports, available at http://www.uscourts.
cavc.gov/documents/Annual_Report_-_20081.pdf.
Matters Before the Federal Circuit
    In Fiscal Year 2008, there were 170 appeals filed with the Federal 
Circuit from decisions of the Veterans Court. See Table: U.S. Court of 
Appeals for the Federal Circuit--Appeals Filed, Terminated, and Pending 
During the Twelve-Month Period Ended September 30, 2008, available at 
http://www.cafc.uscourts.gov/pdf/b08sep08.pdf. This accounted for 
approximately 12% of the Federal Circuit's filed appeals during that 
period. See Chart: United States Court of Appeals for the Federal 
Circuit, Appeals Filed by category FY 2008, available at http://
www.cafc.
uscourts.gov/pdf/ChartFilings08.pdf.

                    EVALUATION OF THE CURRENT SYSTEM

    Now is an excellent time to take a step back and consider how the 
current system of appellate review of veterans' benefits determinations 
operates. This October, we will celebrate the twentieth anniversary of 
the first convening of the Veterans Court. This important milestone 
provides a time for reflection. That would be so even if the system was 
not being flooded with claims and even if one believes it is operating 
without difficulty. In my opinion, we owe it to veterans to evaluate 
the functioning of the revolutionary changes of two decades ago.
    My remarks will focus primarily on the judicial review portion of 
the process. That is, I will largely confine my testimony to appeals 
taken from the Board to the federal court system. In this portion of my 
testimony, I will highlight the successes of judicial review and then 
mention some of its shortcomings.
Successes of Judicial Review
    It is easy to focus on areas on which the current system can be 
improved. However, it is important to remember the many successes that 
have resulted from the addition of independent judicial review of 
veterans' benefits determinations. I highlight four such benefits.
    First, independent judicial review has produced a body of law that 
has at least begun to provide uniformity and predictability for those 
seeking veterans' benefits. When the Veterans Court began operation 
twenty years ago there were essentially no judicial opinions governing 
benefits determinations. The ``law'' in the area consisted almost 
entirely of the statutes passed by Congress and the actions taken by 
the Veterans Administration in its ``splendid isolation.'' Today, we 
are into the twenty-third volume of the Veterans Appeals Reporter 
containing precedential opinions of the Supreme Court, the Federal 
Circuit and the Veterans Court. These decisions provide broad rules 
governing the claims adjudication process throughout the agency and 
across the country. All actors in the system are in a position to know 
the law when it is settled and to make reasonable predictive judgments 
about outcomes in individual cases. Such uniformity and predictability 
could certainly be said to be staples of the rule of law itself. Their 
development over the past twenty years is an important success of 
judicial review under the VJRA.
    Second, over the past twenty years the Veterans Court has grown 
into a strong, independent body. It is easy to forget the challenges 
that faced the Veterans Court at its inception. The judges of the Court 
were confronted with a situation almost unheard of in American law. 
They were not only writing on a clean slate in terms of the content of 
veterans' benefits law, they were also required to build an institution 
from the ground up. Where was the Court physically to be located? How 
was it to pay its bills? How did it fit into other governmental 
structures? Answering all these questions was as important to the 
success of the enterprise as was producing solid judicial opinions.
    Once it was established physically, the Court then needed to focus 
on its substantive work. One of the striking aspects of the history of 
the Veterans Court is the conscious way in which the judges of the 
Court over time developed the institution as a court. It is one thing 
for Congress to say that it is creating a court of law; it is quite 
another for that institution to become one. The Veterans Court's 
efforts to make itself into an institution commanding respect is itself 
a benefit of the judicial review process.
    Third, judicial review has provided greater procedural protection 
for veterans that has increased both the actual fairness of the system 
as well as a perception of fairness in the process. There is no 
question that one still hears complaints about fairness, but those 
complaints pale in comparison to the complaints one heard when there 
was no independent process to review administrative decisions. One 
should not lightly discount how important the provision of independent 
judicial review has been to the actual and perceived fairness of the 
system as a whole.
    Fourth, judicial review has improved the quality of administrative 
decisionmaking in the system. Do not get me wrong. There are still 
deficiencies in the decisions rendered at the administrative level. 
However, the Veterans Court's rigorous enforcement of the statutory 
requirement that the Board provide adequate reasons and bases for its 
decisions, see 38 U.S.C. Sec. 7104(d)(1), has made a real difference in 
both the transparency of decisions as well as the perception of a fair 
process.

Problems with Judicial Review
    Despite its very real successes, the current structure of judicial 
review has caused or contributed to problems that should be addressed. 
I briefly highlight four such issues.
    First, judicial review has increased delays associated with the 
review of benefits determinations. As this Committee has noted time and 
again in hearings, there are unacceptable delays in reviewing benefits 
determinations at almost every level of the current system. An 
excellent overview of this issue can be found in the material 
associated with this Committee's February 11, 2009, hearing concerning 
Review of Veterans' Disability Compensation: What Changes are Needed to 
Improve the Appeals Process?. Of course, with no other changes to the 
system any addition of a review by an independent body would add some 
measure of delay. The issue is that the way in which judicial review is 
structured has increased delay beyond that required by providing for 
such review in the first instance. There are three prime examples of 
such needless delay:

     The current system has two levels of appellate review 
(leaving aside the possibility of review by certiorari in the Supreme 
Court). A veteran dissatisfied with a Board decision may appeal as of 
right to the Veterans Court. In addition, any party dissatisfied with 
the Veterans Court's decision may appeal as of right to the Federal 
Circuit. This double layer of appellate judicial review is unique in 
the Federal system. It certainly adds time to the appellate process. Of 
course, that time may be justified by other factors, such as a 
perceived increase in the accuracy of decisions. Nevertheless, any 
consideration of the current system needs to address this duplicative 
appellate process.
     As the Committee has noted, the prevalence of remands in 
the system leads to increased delays in the resolution of disputes. 
Remands are an issue at the administrative level due to the practice of 
allowing claimants to have an initial adjudication followed by one 
review at the Board level. The practical effect of this practice is 
what has been called a ``hamster wheel'' process by which cases are 
shuttled from the Board to the RO and then back again as new facts are 
adduced. Remands are also a problem at the judicial level. Here, the 
issue stems in large part from the statutory limitation on the finding 
of facts at the Veterans Court. The Court was meant to be an appellate 
body. As such, when an error is found--say, an inadequate statement of 
reasons and bases by the Board--the Veterans Court's usual course is to 
remand the matter for re-adjudication instead of reversing the Board's 
decision and ordering that benefits be awarded. Such remands, even if 
one assumes them to be mandated by current statute, unquestionably add 
time to the resolution of disputes.
     A final example in this area concerns the Veterans Court's 
holdings that it does not have the authority to entertain class actions 
or other forms of aggregate litigation. In the cases cited earlier in 
my testimony, the Court reasoned that it was limited to cases in which 
a veteran challenged a specific, individual Board decision. Again, 
assuming that this reading of the law is correct, one cannot avoid 
concluding that the absence of such authority to address multiple cases 
at once has an effect on system-wide timeliness of adjudication.
    Second, the current system of judicial review has built into it a 
serious risk of prejudice to veterans. This prejudice flows from the 
movement of the veteran from the administrative system that is designed 
to be non-adversarial to the judicial process which is patterned on 
traditional adversarial litigation. This movement can leave veterans, 
particularly those unrepresented at the filing of a judicial appeal, at 
risk of running afoul of rules designed to implement an adversarial 
system. For example, the time periods within which veterans are 
required to take certain actions in the administrative system are 
generally longer and more flexible than the time periods they will 
confront before a court. Such issues in transition are a significant 
hurdle for many veterans moving between systems.
    Third, there is at times an unusual tension between the Veterans 
Court and the Federal Circuit. Under the current structure, both these 
courts play important roles in the system. However, one cannot read the 
opinions of these bodies without being left with the firm conviction 
that there are occasions on which each court displays a certain lack of 
respect for the other. I have discussed this issue in more depth in the 
articles to which I referred earlier. For now, my point is that this 
tension is a product of the current structure of judicial review.
    Fourth, while the Veterans Court has worked diligently to establish 
itself as an independent institution over the past twenty years, the 
Department has not always acted in ways that reflect the respect the 
Court is due. I believe the Department's attitude is at least partly 
caused by the Veterans Court's status as an Article I tribunal with 
Article III oversight in the Federal Circuit. A prime example of this 
attitude can be found in the Department's actions concerning two 
Veterans Court decisions with which the Secretary strongly disagreed. 
One case concerned the Veterans Court's decision that a veteran was 
entitled to independent ratings for tinnitus in each ear. Smith v. 
Nicholson, 19 Vet App. 63 (2005), rev'd 451 F.3d 1344 (Fed. Cir. 2006). 
The second dealt with a statutory presumption concerning exposure to 
certain pesticides by those persons serving on naval vessels in the in-
land waters of the Republic of Vietnam. See Hass v. Nicholson, 20 Vet. 
App. 257 (2006), rev'd sub nom Haas v. Peake, 525 F.3d 1168 (Fed. Cir. 
2008). In each instance, the Secretary unilaterally ordered that the 
Board stay the adjudication of all cases affected by the Veterans 
Court's rulings while he sought an appeal. In neither instance did the 
Secretary seek a judicial stay order. It is inconceivable to me that 
the Secretary would have acted in this respect toward an Article III 
judicial body. Perhaps he would not have done so if the Veterans Court 
was the last realistic venue for appellate review (whether the Court 
retained its Article I status or not). These actions reflect a serious 
and dangerous impediment to the recognition of independent judicial 
review. In both instances, the Veterans Court issued decisions critical 
of the Secretary's actions. See Ribaudo v. Nicholson, 20 Vet. App. 552 
(2007) (en banc) (concerning Haas); Ramsey v. Nicholson, 20 Vet. App. 
16 (2006) (concerning Smith). I am not convinced, however, that the 
Secretary's attitude will necessarily change if the current structure 
remains in place.
    In short, while the addition of judicial review has provided many 
important benefits to veterans, it has also caused or contributed to 
certain drawbacks in the system. The question then becomes: what should 
be done?

                          WHAT SHOULD BE DONE?

    In past hearings, Members of this Committee have made an important 
point about changes to the current system of review of benefits 
determinations. Specifically, Members have noted that one should 
consider both focused changes in the current system as well as the 
distinct question concerning more sweeping alterations. I believe that 
this distinction is important. While my testimony is principally 
focused on the latter issue, I begin this portion of my comments by 
mentioning at least some targeted matters that could be undertaken more 
immediately than any type of sweeping reform.
Some Targeted Matters
    There are certain steps that could be taken within the current 
system to address some of the drawbacks I have discussed above. I again 
principally limit my testimony to the judicial review of benefits 
determinations. I should note that some of the matters I mention are 
already in the works in one form or another:

     Congress has already taken one critically important step 
to address some of the issues facing the system as currently 
constituted: the addition of judges to the Veterans Court. In the 
Veterans' Benefits Improvement Act of 2008, Pub. L. No. 110-389, 122 
Stat. 4145, Congress authorized the addition of two judges to the 
Veterans Court, bringing its complement to nine. Those additional 
judges are temporary, with Congress set to re-assess the matter in 
2012. I urge Congress and the President to act as expeditiously as 
possible to fill these positions (which come into force in December 
2009) and to monitor the effect of these additional judgeships on the 
workload of the Veterans Court.
     The Veterans Court itself has also taken steps to address 
some of the difficulties veterans face, in particular issues involving 
the movement from the non-adversarial administrative process as well as 
the delays veterans face in the system generally. For example, under 
the leadership of Chief Judge Greene, the Court has adopted a mediation 
program that appears to be helpful in resolving cases. The Court has 
also taken steps to address the assembly of the appellate record that 
should help reduce delay. Finally, the Court has largely moved to a 
paperless system that should also have a positive effect on the time to 
disposition. I urge Congress to support the Veterans Court in these and 
similar efforts.
     One of the difficulties with assessing the successes and 
shortcomings in the current system is obtaining relevant empirical 
information. Relevant information is collected and disseminated by 
different bodies (e.g., the Board, the Veterans Court, and the Federal 
Circuit). As such, it is often difficult to compare apples to apples. 
Without an empirical foundation, it is both challenging and potentially 
dangerous to make changes in the system. I urge Congress to consider 
whether there are means for a standardized collection of information 
relevant to issues facing veterans in the system.
     As I mentioned, the Veterans Court has held that it is 
without the authority to adjudicate class actions or other aggregate 
litigation. I believe Congress should amend Title 38 of the United 
States Code to provide that the Veterans Court may adopt a class 
action/aggregate litigation procedure. I do not believe Congress should 
mandate that the Veterans Court adopt such a procedure. There are too 
many interconnected issues for such a mandate to necessarily improve 
the system. But the Veterans Court should have the clear authority to 
adopt such a rule if the judges of that Court, in consultation with 
those who practice in this field, conclude it would be beneficial to 
the prompt and fair adjudication of claims on a system-wide basis.
     Finally, the Veterans Court could more aggressively 
exercise its authority to reverse Board decisions instead of remanding 
them for further factual development. Deciding when a Board decision is 
inadequate due to the failure to provide reasons and bases for a 
decision or simply legally erroneous is a matter of degree. It is fair 
to say that at this point the Veterans Court is far more inclined to 
find that Board decisions are insufficiently supported by explanations, 
a decision that leads to remand and delay. The Veterans Court should 
consider whether more such decisions could actually be considered 
simply erroneous, a result that would lead to reversal and an award of 
benefits. While I believe that such a re-evaluation should be done, I 
do not believe it should be mandated by legislation. The Court is in 
the best position to make such decisions.

                           THE BIGGER PICTURE

    This brings me to the more macro level questions concerning the 
current system of review of veterans' benefits determinations. As I 
alluded to at the beginning of my testimony, Congress should establish 
a commission or other working group to study the judicial review of 
veterans' benefits determinations. The Commission should be led by a 
chairperson or chairpersons who are widely respected and seen to be 
independent, particularly of influence from the Department. The leader 
or leaders of the Commission must also be politically savvy as well as 
capable of the follow though necessary to make the Commission's work 
meaningful in the real world.
    The Commission should be composed of representatives of all the 
relevant constituencies affected by and involved in the award of 
veterans' benefits. These constituencies include: veterans (and other 
claimants in the system), most likely represented through the various 
Veterans Service Organizations; the Department in all its facets (thus 
the RO adjudicators, the Board, the litigation arm of the Department 
and the Secretary, probably through the Office of the General Counsel, 
should all be included); the Veterans Court; the Federal Circuit; and 
Congress itself.
    Congress should also ensure that the Commission has adequate 
resources with which to perform its functions. The Commission should be 
provided with a staff for, among other things, data collection and 
analysis as well as space in which to work. It should also have funds 
available sufficient to allow the Commissioners to travel so that 
public hearings can be held to obtain the greatest input of views as 
part of its work.
    The Commission should be charged with evaluating the current state 
of appellate review of veterans' benefits determinations and making 
recommendations concerning what changes might be made to that system. 
There should be no constraints imposed on the Commission with respect 
to the options it might consider and/or propose. Finally, the 
Commission should be directed to submit a report to Congress within a 
defined period of time. That report should describe the Commission's 
activities, provide relevant background and statistical information, 
and set forth specific proposals for changes to the system warranted by 
the Commission's investigation.
    While the Commission should not be limited in terms of the matters 
it considers, it should keep three interests in mind during its 
investigation and deliberations:

The Interests of Veterans
    The paramount interest the Commission must consider is that of the 
veteran. The nation should never forget--and I am confident none of the 
people involved in the process do--that the entire structure of 
veterans' benefits law exists for the purpose of providing support to 
the men and women who served this country. Thus, the Commission must 
ensure that it proposes nothing that harms the interests of the 
beneficiaries of the system.
    Veterans' interests fall into five broad categories:

     Accuracy: Veterans have an interest in ensuring that 
decisions concerning the award of benefits be as accurate as possible. 
The gains in accuracy that have likely been achieved over the past 
twenty years due in part to judicial review should be preserved.
     Fairness: It is critically important that the system of 
awarding benefits and reviewing such decisions both be fair and be 
perceived as being fair. Veterans need to believe that the system 
provides an opportunity for their claims to be adjudicated in a manner 
that is, broadly speaking, consistent with the rule of law. Thus, the 
gains in the nature of VA decisionmaking (e.g., better reasoned 
decisions) need to be preserved. In addition, the substantive fairness 
of the process needs to be preserved as well. Finally, one needs to be 
concerned with the speed of the decisionmaking process.
     Transparency: Closely related to fairness is veterans' 
interest in a transparent process. Largely as a result of the influence 
of the Veterans Court (although aided by Congress), the process of 
awarding benefits has become more open. That trend should be preserved.
     Predictability: It is important that the Department and 
veterans and their counsel be in a position to predict how issues will 
be resolved. Of course, there will always be a level of uncertainty in 
any legal system populated by humans. Nevertheless, the value of 
enhanced predictability of results is important systemically.
     Finality: No legal system can exist for long in any 
functional respect if disputes never come to an end. Veterans, as well 
as the VA, have an interest in having disputes resolved once and for 
all. The value of finality should not drive the system. There should be 
means of correcting errors, but those means need to be balanced against 
the interests of repose. Thus, finality itself is a value that should 
be considered when evaluating the current--or a future--system 
concerning the award of veterans' benefits and the judicial review of 
such decisions.

Institutional Concerns
    A second interest that the Commission must consider concerns the 
preservation of American constitutional values. In particular, the 
importance in the American constitutional order of the maintenance of 
separate and independent centers of political authority must be a part 
of the Commission's deliberations. This is a structural concern. Thus, 
it is important to preserve an independent institutional check on the 
political branches' authority to award veterans' benefits.
    The Veterans Court was created as an Article I tribunal, meaning 
that its members do not enjoy the tenure and salary protections 
afforded judges serving in the coordinate Article III judiciary. Under 
well-established law, there is no structural constitutional violation 
flowing from the assignment of the adjudication of disputes concerning 
veterans' benefits to such an Article I tribunal. Veterans benefits are 
a ``public right.'' That is, entitlement to benefits flows from 
statutes instead of the common law or the Constitution itself. See, 
e.g., Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 
U.S. 50, 69 n.22 (1982) (describing ``payments to veterans'' as an 
example of a public right (citation omitted)); Congress has wide 
latitude to assign the adjudication of disputes concerning such public 
rights to non-Article III adjudicators such as the Veterans Court. See, 
e.g., Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986); 
Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568 (1985).
    The institutional concern the Commission must consider is less 
formalistic than a suggestion that one must necessarily have the 
Article III judiciary (beyond the Supreme Court) involved in the 
process to make it legitimate. Of course, that is one way in which one 
could preserve institutional concerns regarding separation of powers. 
But there are other ways in which such power divisions can be 
established and maintained. The key is that one needs to ensure that 
the system of review employed in the process contains sufficient 
independence that there is a meaningful check on the unilateral 
authority of the political branches.

The Public Interest
    Finally, any consideration of the judicial review of veterans' 
benefits decisions needs to take into account the public's interest in 
maintaining a system that, while fair to veterans, also safeguards the 
great resources devoted to veterans and their dependants. The public 
has a right to ensure that the funds allotted to the Department for the 
payment of veterans' benefits are spent according to the directions of 
Congress.
    As I near the end of my remarks, I wanted to highlight some of the 
more important issues the Commission for which I have called should 
address. This list is by no means exhaustive. Rather, it is meant to 
illustrate some of the matters that I see as most significantly in need 
of attention. Moreover, I do not necessarily suggest that any of the 
steps I mention should be taken. The key is that they be considered. I 
mention five primary matters:

     The Commission should consider whether the Federal Circuit 
should remain as part of the system for review of veterans' benefits 
determinations. There is no question that having a second layer of as-
of-right appellate review adds delay to the system. On the other hand, 
some could argue that any additional delay is justified by the error-
correcting function of the Federal Circuit. The question the Commission 
should consider is whether any such error-correcting function is worth 
the cost in delayed resolution. There is no requirement that the 
Federal Circuit remain as part of the process. For example, the United 
States Court of Appeals for the Armed Forces is an Article I court with 
review by way of the writ of certiorari in the Supreme Court. While I 
have reached no firm conclusion on this point, I lean toward removing 
the Federal Circuit from the process. The fact is that delayed 
resolution in the system is a significant problem. The removal of the 
Federal Circuit is a relatively easy way to reduce delay.
     If the Federal Circuit remains in the appellate review 
system, the Commission should consider whether that court's 
jurisdiction should be expanded. As I have mentioned, at present the 
Federal Circuit is precluded from reviewing factual determination or 
the application of law to fact. This prohibition leads to a fair amount 
of ink being spilled as to whether a certain issue is one dealing with 
a pure legal question or rather it concerns the application of law to 
fact. If the Federal Circuit is deemed to add value to the process, 
consideration should be given to whether the benefits of the current 
jurisdictional restrictions outweigh the costs.
     A third issue the Commission should consider is whether 
the Veterans Court should be converted into an Article III body. Such a 
conversion, if warranted, could take place regardless of whether the 
Federal Circuit remained as part of the appellate review process. 
Article III status could augment the respect the Veterans Court 
receives from the Secretary as well as other courts. In addition, 
Article III status would allow the court to more easily utilize the 
support mechanisms for the Federal judiciary. Of course, there are also 
potential negative effects of a conversion, including less turnover in 
judges and, perhaps, greater politicization of the appointment and 
confirmation process.
     The Commission should consider the appropriate place of 
the Board in the appellate process. As Members of the Committee have 
noted in the past, the Board came into existence in a time when there 
was no judicial review. Given the fundamental shift twenty years ago 
ushering in the current era of judicial supervisor, a fresh look should 
be taken at the Board's function as well as its structure.
     Finally, the Commission should evaluate the jurisdiction 
of the Veterans Court. The Court is currently prohibited from making 
factual determinations. I suspect that any review would likely conclude 
that the Court should remain an appellate tribunal without fact-finding 
authority. However, the prohibition on fact-finding does have an effect 
on delays in the system because the Veterans Court often feels 
compelled to remand matters in which it has found an error instead of 
reversing Board decisions outright. The Commission should consider 
whether there are statutory changes that could be made that would 
preserve the Veterans Court's status as an appellate body but also 
decrease needless remands.

                               CONCLUSION

    In conclusion, I want to stress that nothing I have said here today 
should be taken to cast aspersions on anyone involved in the current 
system for the award and review of veterans' benefits. I firmly believe 
that the people who have elected to devote a good portion of their 
professional lives to working in this system have nothing but the best 
interests of veterans at heart. In many respects, they are heroes 
themselves because they are a contemporary example of President Abraham 
Lincoln's call in his famous Second Inaugural Address (as slightly 
edited to reflect today's society) for the Nation ``to care for him 
[and her] who shall have borne the battle and for his widow [or her 
widower], and his [or her] orphan.''

    Thank you again for allowing me to testify today.

    Senator Murray. Thank you.
    Mr. Bertoni?

  STATEMENT OF DANIEL BERTONI, DIRECTOR, DISABILITY SERVICES, 
                GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Bertoni. Senator Murray, Members of the Committee, good 
morning. I am pleased to be here to discuss the Department of 
Veterans Affairs Disability Compensation Claims process. I want 
to preface my remarks by saying some of the numbers I will 
reference today will be slightly different than what we have 
been hearing. We focused for this Committee on our ongoing work 
only on compensation claims. We have isolated DIC and pension 
out of our analyses, so the numbers will be slightly different 
although the trends are consistent.
    Last year, VA paid over $31 billion of disability benefits 
to 3 million veterans. For years, VA's claims process has been 
a subject of concern due to long waits for decisions and large 
numbers of pending claims. My statement today is based on prior 
and ongoing work for this Committee and discusses trends and 
compensation claims a s w e l l a s t h e s t e p s t h e 
a g e n c y i s t a k i n g t o i m p r o v e s e r v i c e 
delivery.
    In summary, over the last decade, disability workloads have 
improved in some areas and worsened in others. Since 1999, VA 
has steadily increased the number of initial claims processed 
annually by 60 percent to 729,000, and the agency has realized 
substantial gains in the number of claims processed over the 
last three fiscal years.
    Last year, compensation claims were pending an average of 
123 days, down from 152 days in 1999, but still in excess of 
VA's goal of 116 days. Despite these gains, the inventory of 
claims waiting a decision has increased 65 percent to 340,000. 
Those pending more than 6 months have increased by 20 percent. 
More recent data shows that pending claims declined slightly 
between 2007 and 2008. However, the average time VA took to 
complete a claim increased from a low of 181 days in 2004 to 
196 days in 2008.
    Regarding disability appeals, VA has also experienced some 
gains and setbacks. Since 2003, the number of appeals processed 
increased by 22 percent and the number of pending cases 
decreased from 126,000 to 95,000. Unfortunately, average 
processing time has trended upward from 543 days in Fiscal Year 
2003 to 639 days--over 21 months--last year.
    Various factors have contributed to the trends in 
disability workloads, including substantial increases in the 
number of claims received, growing claims complexity and laws, 
court decisions and regulations changes, which have expanded 
workloads over time.
    VA has taken several steps to expedite service to veterans. 
First, the agency has hired thousands of additional claims 
processing and appeals board staff and plans to use Recovery 
Act funds to hire 1,500 additional support staff going forward.
    This infusion of staff has helped VA process more claims, 
and that explains the positive trends in recent data. However, 
VA has cautioned that per person productivity will decrease in 
the short term because it takes from 3-5 years for staff to 
become fully trained and proficient. We have also noted that 
quickly absorbing these staff will likely pose substantial 
human capital challenges going forward in regard to training 
and deployment.
    Second, beyond increasing staff, VA has also expanded its 
efforts to redistribute key workloads to 15 resource centers. 
These centers process claims for backlogged offices, often 
specializing in distinct phases of the process, such as claims 
development or ratings. In fiscal year 2008 alone VA 
redistributed over 140,000 ratings cases. And although such 
actions could improve processing time and consistency, VA has 
not yet collected key data to evaluate the effectiveness of 
these centers.
    Third, VA has expanded efforts to assist servicemembers in 
filing claims prior to leaving the military when their 
personnel and medical records are most accessible and up to 
date.
    In 2008, VA received 32,000 claims through this program 
known as Benefits Delivery at Discharge or BDD. To improve 
consistency, all BDD rating activities are consolidated at two 
VA regional offices, and on average, processing times for these 
claims are shorter than for other claims. However, we have 
recommended that VA take additional steps to improve its 
measure for BDD timeliness and quality and to ensure access to 
members of the National Guard and Reserves who represent 1 in 4 
disability applicants.
    While VA has a number of other initiatives underway, I will 
conclude by noting that it is piloting a joint disability 
evaluation process with DOD to improve the transparency, 
timeliness and quality of disability evaluations. Key pilot 
features include a single physical exam and a single disability 
rating prepared by the VA for determining both military 
retirement and VA disability benefits. If the pilot is 
successful, the likely outcome will be worldwide implementation 
of this streamlined system and a substantial change in the way 
many veterans first receive VA benefits.
    We have noted, however, that broader expansion will require 
development of a comprehensive service delivery plan, sound 
performance measures, and resolution of key operational 
challenges, such as who will perform the single physical exam 
at locations where there is no VA facility nearby. Both 
agencies have been working to address these and other concerns.
    Senator Murray, this concludes my statement. I am happy to 
answer any questions you may have. Thank you.
    [The prepared statement of Mr. Bertoni follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    Senator Murray. Thank you very much, Mr. Bertoni.
    Colonel Wilson.

 STATEMENT OF JOHN L. WILSON, LT. COL, USAF (RET.), ASSOCIATE 
   NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS

    Colonel Wilson. Madam Chair, Members of the Committee, I am 
glad to be here today on behalf of the Disabled American 
Veterans.
    As you know, the claims process is complex and lengthy. VA 
estimates that it will decide over 940,000 claims in 2009, but 
it may well be 1 million considering the total workload. It is 
also important to note that the VA has decided close to 200,000 
more claims than it decided just 2 years ago, which is a likely 
indication that the VA is making good use of the additional 
staffing provided by Congress over that same period. What is 
discouraging is that the VA may actually receive just as many 
new claims as it decides this year, which is also close to 
200,000 more than just a couple of years ago.
    Short of growing VA's workforce indefinitely, what 
solutions are available to us? The DAV believes it has a viable 
solution. We have presented this Committee with the DAV's 21st 
Century Claims Process proposal, which is intended to simplify 
the process while preserving resources and reducing 
expenditures.
    Our proposal begins with the initial stages of the claims 
process and continues through the entire appellate process. Our 
recommendations are carefully aimed at making efficient a 
rather inefficient process without sacrificing a single earned 
benefit.
    They include: (1) amending legislation to indicate that the 
VA 
will assist a claimant in obtaining private medical records 
only when such assistance is requested by the claimant on a 
form prescribed by the Secretary; (2) amending legislation to 
allow the VA on its own to waive all VCAA requirements when it 
determines that evidence of record is sufficient to award all 
benefits sought; (3) amending legislation so VA could issue 
appeal election letters at the same time as the initial rating 
decision; (4) amending legislation to decrease the period in 
which a VA claimant may submit a timely notice of disagreement 
to the VA, following the issuance of a VA rating decision from 
1 year to 6 months; (5) amending legislation in a manner that 
would specifically incorporate an automatic waiver of regional 
office jurisdiction for any evidence received by the VA, to 
include the board, after an appeal has been certified to the 
board following submission of a VA Form 9 unless the appellant, 
or his or her representative, expressly chooses not to waive 
such jurisdiction.
    These and other suggested changes could result in reduced 
pre-appellate stage processing time between 30 and 90 days, and 
as high as a 3-year reduction for certain post-remand appellate 
cases.
    My written testimony contains many more details regarding 
these suggestions, to include how they could be incorporated 
into a new digital claims process as part of a new electronic 
record and imaging scanning center. Implementation of this 
legislative package will result in a dynamic responsive claims 
process with flexibility for future growth.
    In closing, the VA will never be able to maximize its 
recent increases in staffing without making its processes more 
efficient. If such changes are made, the VA will see vast 
improvements in its entire claims process that are essential to 
achieving the broader goals of prompt and accurate decisions on 
claims. Likewise, only then will the VA be able to incorporate 
training, quality assurance, and accountability. Such programs 
have been demanded by the veterans community.
    It has been a pleasure to appear before this honorable 
Committee today and I look forward to your questions.
    [The prepared statement of Colonel Wilson follows:]

   Prepared Statement of John Wilson, Associate National Legislative 
                  Director, Disabled American Veterans

    Mr. Chairman, Ranking Member and Members of the Committee: I am 
pleased to have this opportunity to appear before you on behalf of the 
Disabled American Veterans (DAV), to address problems and suggest 
solutions to the Department of Veterans Affairs (VA) disability claims 
process.
    The claims process is complex as a result of the scope of benefits 
that the VA is mandated to consider and potentially deliver. The DAV 
has presented this Committee with our comprehensive suggestions for 
what we have dubbed the 21st Century Claims Process. Our suggestions 
would help reduce the Veterans Benefits Administration claims backlog.
    DAV's 21st Century Claims Process represents an ambitious but 
achievable goal. The proposal benchmarks certain milestones be achieved 
by VA with assistance from Congress. Essentially, our plan focuses on 
creation of digital architecture to 
receive and manage all claims, as well as legislative changes to 
streamline the 
process.
    The legislative recommendations are not only vital to the success 
of this proposed process, but will also bring cost-savings efficiency 
to the current claims process--efficiency perhaps equaling more than 
100,000 reduced work hours annually and reducing initial average claims 
processing time by at least 30-90 days.
    We have shared this proposal with committee staff, current and 
former VA officials, and other veterans' service organizations. Their 
recommendations were incorporated where feasible.
    In DAV's plan, the initial claims process (pre-appellate stage) 
essentially consists of adjudication stage one, adjudication stage two, 
and a rating team. Adjudication teams one and two will perform 
functions similar to the current triage and predetermination teams, but 
in a revised and more efficient format.
    The backbone of the entire 21st Century Claims Process is the 
Imaging Scanning Center (ISC)/drop box-mail point and a data-centric 
claims management system. An opportunity to benchmark an effective 
system records management system and data-centric application with 
adjudication features can be found at the Social Security 
Administration.
    In our current draft of this process, all paper claims and paper in 
support of claims will be routed to the ISC for immediate imaging and 
inclusion in the electronic record. The electronic records warehouse 
center should be housed centrally and accessible by all points in VBA. 
The ISC and electronic records center (electronic warehouse) will be 
linked directly to each other with a dedicated and secure, high-speed 
connections.
    Another benefit to the proposed system would be that any evidence 
received by the ISC would be viewable in the official record the 
following day. It currently takes many days, or even weeks, for VA to 
incorporate new evidence into a claims folder. Lost or incorrectly 
destroyed records would be a problem of the past. In addition, data-
centric forms would be developed
    Upon receipt of the claim by ``team one,'' the claim would be 
analyzed on a data-centric form with one of the design features 
displaying the veteran's intent with respect to the type of benefit(s) 
claimed. This will facilitate immediate establishment of ``end product 
codes'' (or viable replacement system). In addition to utilizing data-
centric forms for rapid claims identification and establishment, such 
data-centric forms and resulting codes will also be utilized to 
determine the kind of ``notice'' VA is required to send the claimant, 
and (as near as possible) the type of assistance VA is required to 
offer the claimant in developing the case.
    For example, consider a veteran requesting an increased rating for 
a single service-connected disability that does not have supporting 
private treatment records (PTRs), and therefore only needs a current VA 
examination. The claims form would clearly annotate that the veteran is 
requesting an increased rating for XYZ disability and has not received 
treatment outside of VA. Under the current process, the veteran is 
required to undergo the entire development process, despite that fact 
that the veteran only requires a current VA examination. Therefore, 
legislative amendments to VA's ``duty to notify/assist'' are necessary 
so as not to require VA to undertake futile development in such a case.
    If the same scenario occurred but the veteran had PTRs, such info 
must be clearly indicated on the claims form. The modified notification 
letter would then inform the veteran that VA requests he/she obtain the 
PTRs and submit them to VA (mailed to ISC) within 30 days. The same 
notification would also clearly and in understandable language inform 
the veteran that if, and only if, he/she cannot or will not obtain 
PTRs, then VA will assist if the veteran submits VAF 21-4142 (enclosed 
with notification only in cases where PTRs are indicated on the claims 
form).
    In addition to the this change regarding development of private 
records, another legislative change to current Duty to Assist 
requirements should be incorporated that would allow the VA on its own 
to waive all notice and assistance under the Veterans Claims Assistance 
Act (VCAA) of 2001 when the VA determines that the evidence of record 
is sufficient to award all benefits sought. Such a change would be 
instrumental in expediting numerous types of claims wherein the VA must 
currently follow all VCAA requirements despite having evidence 
sufficient to award benefits. (E.g., certain claims under 38 CFR 
Sec. Sec. 3.22, DIC benefits for survivors of certain veterans rated 
totally disabled at time of death; 3.309, Disease subject to 
presumptive service connection; 3.312, veteran's death considered 
service-connected when the evidence establishes disability was either 
the principal or contributory cause of death; 3.350, Special monthly 
compensation; 4.16, Disability Ratings for Compensation Based on 
Individual Unemployability; 4.28, temporary total rating based on 
convalescence; 4.29, Ratings for service-connected disabilities 
requiring hospital treatment or observation.; 4.30, Convalescence 
ratings; etc).
    The recommendation to allow the VA to waive, on its own, all notice 
and assistance for claims when the VA can award all benefits sought 
should be utilized in conjunction with section 221 of Public Law 110-
389, the Veterans Benefits Improvement Act of 2008. This section, among 
other things, directs the Secretary to carry out a pilot program at 
four VA regional offices to assess the feasibility and advisability of 
providing to claimants and their representatives a checklist of 
information and evidence required to substantiate a claim.
    However, if utilized in conjunction with this recommendation, such 
a checklist could be crafted in accordance with specific regulations as 
mentioned above. A memorandum of understanding (MOU) could then be 
drafted between the VA and all service organizations housing 
representatives within each regional office. The MOU should specify 
that each representative screen cases that qualify under certain 
prescribed guidelines, and then deliver such cases directly to one or 
two designated VA rating specialists for no less than a two-week turn 
around for rating such a case.
    In the 1990s, VBA conducted a pilot program in the St. Petersburg 
regional office under the title, ``Partner Assisted Rating and 
Development System.'' (PARDS). Our recommendation is similar to the 
PARDS pilot.
    This approach would not require VA employees to spend valuable time 
screening cases that could qualify under this expedited plan. It would 
also engage representatives in a more structured and less interest-
conflicting manner. If executed properly and maximized to its fullest 
potential, such a procedure could have the potential to produce close 
to 100,000 rating decisions per year within two weeks processing time.
    Regarding other claims, the items team one can complete under this 
plan will require one to three days, but should not require more than 
one week. Under the current disability timeline, these same functions 
take 44 days on average.
    Following completion of team one functions, the electronic claim 
immediately goes to team two. With the exam requested and the 
notification sent to the claimant (or waived), team two will require 
little or no action on the case. Team two serves primarily as a more 
advanced stage of development for those cases with more complexity, 
such as those requiring stressor or other service information 
verification, development of private records, or complexities returned 
from the rating team. Team two will not be forced to deal with many of 
the activities that complicate functions of its current equivalent, the 
pre-determination team. Therefore, team two will be able to take more 
time and potentially produce more accurate rating decisions for more 
complex cases.
    The actions of teams one and two must take place in a fluid, but 
accurate manner. If executed properly, many cases received by VA will 
be ready to rate within 30 days because the notice response (to the 
current VCAA process) will be complete as will any required 
compensation and pension (C&P) examinations. The rapid initiation and 
synchronized completion of these two milestones are the keys to success 
in this revised process.
    Many cases will inevitably require extended processing times due to 
development that cannot be streamlined because of inter-agency 
roadblocks, (i.e., combat-stressor development from the Department of 
Defense's Center for Research of Unit Records). However, many other 
cases, such as ones similar to the examples above, could be ready to 
rate much faster than 60 days because of considerably fewer 
developmental requirements.
    The 21st Century Claims Process achieves, on average, at 30 days 
what the current paper-locked, procedure-heavy system achieves at 
approximately150-160 days.
    Once ready to rate within 30 days, the final rating team will have 
30 days in which to issue a decision, a process that currently takes 13 
days on average. With more time to review cases by the rating teams, 
contained within a much shorter overall processing time, decisionmakers 
can focus far more on quality than the current system allows, but 
without sacrificing production standards. This process will be greatly 
enhanced by even a modest rules-based automated rating system--one that 
will quickly and accurately process cases wherein there is nearly no 
room for debate, such as hearing loss and tinnitus ratings or paragraph 
29/30 (hospitalization and convalescence) ratings, among others.
    When VA issues a rating decision, an appeal election letter will be 
included. This will prevent VA from having to mail more than 100,000 
letters annually to claimants appealing their decision and will reduce 
the appellate processing time by 60 days. The letter will explain that 
any notices of disagreement submitted without electing a post-decision 
review (DRO) process will automatically be reviewed under the 
traditional appeal process. (The same thing currently happens if a 
claimant does not respond to the appeal election letter). This could be 
accomplished either by a legislative or administrative change. If 
addressed legislatively, 38 U.S.C. 5104(a) would be modified to permit 
inclusion of an appeal election letter. As noted earlier, the VA does 
have the option, through proper rulemaking procedures, to amend current 
guidance and make an administrative change to accomplish the same task.
    A claimant wishing to appeal a decision will have 180 days in which 
to do so versus the current one year. This will require a legislative 
change. We realize that some may impulsively draw several inferences 
onto this idea. Those inferences will likely be misplaced--our 
ambitious goal is to take every opportunity in which to bring 
efficiency to VA's entire claims process so that it can better serve 
our Nation's disabled veterans today and in the future. We must be open 
to change for such a goal to succeed.
    To put this issue into perspective, the average time it took the VA 
to receive a notice of disagreement (NOD) in 2008 was 41 days. In fact, 
92,000 out of just over 100,000 NODs were received within the first six 
months of 2008.
    This is also an opportunity to bolster certain statutory rights for 
which the law is currently silent. When amending the appellate period 
from one year to 180 days, Congress must include an appellate period 
extension clause and equitable tolling clause to the appropriate 
section of law concerning NODs.
    Specifically, we recommend changing the law so that an appellant 
may, upon request, extend his/her appellate period by six months beyond 
the initial six months. We also suggest an amendment to provide for 
equitable tolling of the appellate period in cases of mental or 
physical disability so significant to have prevented a VA claimant from 
responding within the specified time. Again, the Social Security 
Administration has a generous good cause exemption that could apply 
here as well.
    If the appeal is not resolved, the VA will issue a Statement Of the 
Case with an amended VAF-9. The amendment will explain that evidence 
submitted after the appeal has been substantiated to the Board of 
Veterans Appeals (Board) will be forward directly to the Board and not 
considered by the regional office unless the appellant or his/her 
representative elects to have additional evidence considered by the 
Regional Office (RO). This opt-out clause merely reverses the standard 
process without removing any choice/right/etc. from an appellant. This 
change will result in drastically reduced appellant lengths, much less 
appellant confusion, and nearly 100,000 reduced VA work hours by 
eliminating the requirement to issue most supplemental statements of 
the case. A legislative change, amending 38 U.S.C.A. 7104 in a manner 
that would incorporate an automatic waiver of jurisdiction of Regional 
Office jurisdiction authorizing VA to allow the veteran to instead opt-
out of his/her case being transferred to the BVA.
    The Appeals Management Center (AMC) is essentially a failure and 
should be disbanded. The AMC received nearly 20,000 remands from the 
Board in fiscal year (FY) 2008. By the end of FY 2008, the AMC had 
slightly over 21,000 remands on station. By the end of January 2009, 
they had approximately 22,600 remands on station. The AMC completed 
nearly 11,700 appeals, out of which 9,811 were returned to the Board, 
89 were withdrawn, and only 1,789 were granted. In fact, 2,500 appeals 
were returned to the AMC at least a second time because of further 
errors in carrying out the Board's instructions, over a 25-percent 
error rate. This means the AMC's error rate was higher than its grant 
rate. Such a poor record of performance cannot be allowed to exist 
anywhere in the VA claims process. Returning these cases to their 
respective jurisdictions will help ensure accountability, and most 
likely reduce the number of cases that proceed to the Board.
    The VA will require an additional ``administrative team'' that is 
not technically part of the claims or appeals process teams. This 
groups' function will be to handle daily tasks required by VA but that 
are not necessarily part of the ``claims process.'' These tasks include 
subordinate or administrative functions such as complying with records' 
requests under the Freedom of Information Act, serving as attorney fee 
coordinators, responding to informal claims, and many others that are 
administrative only. Currently, post- or pre-adjudication teams handle 
many functions for which they do not receive work credit and/or are 
otherwise not a required part of the claims process. Placing these 
functions under the responsibility of an administrative team dedicated 
solely for such tasks will free up resources that can be utilized 
specifically for claims processing, resulting in increased efficiency

                   ADMINISTRATIVE/LEGISLATIVE CHANGES

    1. Amend 38 U.S.C. Sec. 5103A (b) to indicate that VA will assist a 
claimant in obtaining private medical records when such assistance is 
requested by the claimant on a form prescribed by the Secretary. This 
will pave the way for some of the changes discussed above. (Process 
time saved--30 to 90 days (estimate) on average; work hours saved--
unknown but very significant.)
    2. Amend 38 U.S.C. Sec. Sec. 5103, 5103A to allow the VA to on its 
own waive all VCAA requirements when it determines that evidence of 
record is sufficient to award all benefits sought. (Process time and 
work hours saved are unknown but very significant.)
    3.Title 38 U.S.C.A. Sec. 5104(a) states, among other things, that 
when VA notifies a claimant of a decision, ``[t]he notice shall include 
an explanation of the procedure for obtaining review of the decision.'' 
38 U.S.C.A. Sec. 5104(a). An appeal election choice is part of that 
notice; therefore, the VA could modify 38 CFR Sec. 3.2600 in order to 
facilitate the changes suggested above. (Process timed saved--60 days 
per appeal (estimate); work hours--approximately 50,000 (estimate).)
    4. Congress should decrease the period in which a VA claimant may 
submit a timely notice of disagreement to the VA following the issuance 
of a VA rating decision from one year to six months by amending 38 
U.S.C. Sec. 7105.
    5. Amend 38 U.S.C.A. Sec. 7104 in a manner that would specifically 
incorporate an automatic waiver of RO jurisdiction for any evidence 
received by the VA, to include the Board, after an appeal has been 
certified to the Board following submission of a VA Form 9, unless the 
appellant or his/her representative expressly chooses not to waive such 
jurisdiction. (Process time saved--60 to 180 (estimate) days for 
affected appeals at local offices; up to 2 years for appeals otherwise 
subject to remand; work hours--in excess of 50,000 at local offices 
(estimate), unknown but significant at the Board)
    6. Average total savings, 30 to 90 days pre-appellate stage. 
Average total savings for pre and post appellate cases (cumulative); 90 
days minimum in most cases and as much as 90 to 330 days pre-remand. 
Potentially 3 years post-remand for affected cases.
    All of the above changes can and should be implemented as soon as 
possible. They will adapt to the current process and produce short term 
results.
    7. Disband the Appeals Management Center and return remanded 
appeals to original rating team.
    8. VA will be required to amend its claims form (VAF 21-526) as 
well as create and specify the form that must be used (post 21-526) for 
all re-opened and new formal claims.

                               CONCLUSION

    We are confident these recommendations, if enacted, will help 
streamline the protracted claims process and drastically reduce undue 
delays. Some of recommendations contained herein may appear novel and/
or controversial at first; they may even draw criticism. However, such 
a response would be misdirected. These recommendations are carefully 
aimed at making efficient an inefficient process without sacrificing a 
single earned benefit.

    Mr. Chairman, we have provided your staff as well as the staffs of 
Chairman Filner, Ranking Member Buyer, and Ranking Member Burr, with a 
copy of the DAV's proposal.

    Senator Murray. Thank you very much to all of you for your 
testimony.
    Mr. Bertoni, let me begin with you. You testified that the 
VA has not collected data to evaluate the impact of using the 
research centers to redistribute workload. We have heard that 
mentioned by several of our colleagues this morning with 
concerns about that.
    Can you tell us what measurement you would recommend the VA 
use to evaluate the effectiveness of these centers?
    Mr. Bertoni. Sure. I think critical to any of these 
processes is timeliness, accuracy, and consistency. I think it 
behooves any manager, as opposed to going out talking to the 
troops, trying to discuss issues on site--that is all important 
and good--but I think there is no substitute to the data to 
help management make good data-driven decisions. So, if you 
have a resource center and there are indications--and you do 
the analysis, and there are indications of problems in certain 
areas--you can make remedial interventions.
    To date, I do not believe that is occurring. I think even 
very recently, I do not believe there were any quality 
assurance reviews being conducted. So, that would be, first and 
foremost, very critical: what type of quality assurance reviews 
are being done; what is the MI data showing; and what do you do 
with that data going forward to make the interventions that 
need to be done?
    Senator Murray. OK. Thank you very much for that.
    Mr. Allen, you talked about the current structure for 
judicial review of veterans' benefits, and it has two appellate 
levels: the Veterans Court and Federal Circuit, which you 
indicate increased delays and could be duplicative.
    You raised the option of removing the Federal Circuit from 
the structure of the veterans' benefits determination process 
as one way of perhaps reducing some of the delays in this 
system. It did not sound like you were a hundred percent 
committed to that, but can you tell us why you sort of lean 
toward the Federal Circuit?
    Mr. Allen. Sure, Senator. Let me start out by saying that 
it seemed to me that when Congress created the Veterans Court, 
one of the things it was trying to do was create an independent 
body to review these issues outside of the VA and that that 
body would be the expert in that area of the law. But since 
this was a new process, it provided for this second layer of 
review at the Federal Circuit.
    Now, I should say that the level of review at the Federal 
Circuit is not plenary; it is not total. The Federal Circuit 
does not have jurisdiction to review any matter of fact or, 
quite oddly, any application of law to fact. It, in theory, 
should only review pure questions of law.
    Now, it made perfect sense to structure the system, at 
least in my view at the time, like that. Today, I think that 
unbalanced. It is not worth having the Federal Circuit involved 
anymore. And I do not say that lightly because that is a major 
change.
    What it goes to is, what are the competing values that one 
wants. Because if the value that was absolutely top on the list 
was making sure that the maximum number of judges' eyes looked 
at a case, figuring that that would reduce overall inaccuracy 
in decisions--well then, it might make sense to have this two-
level court.
    To use a silly analogy, if your absolute, 100 percent, 
number 1 value in a day is making sure that your pants do not 
fall down, wearing belt and suspenders makes perfect sense. It 
is not irrational because that is your value. But I think that 
for the Federal Circuit employment here, it is not having the 
maximum number of eyes look at a case because over time, having 
that second layer review has increased delay. I am sure for 
myself that it has not increased the quality of veterans' law 
sufficiently to justify its current place in the system.
    Senator Murray. OK.
    Colonel Wilson, have you given any thought to a proposal to 
remove the Federal Circuit from the veterans' benefits 
determination process and what that would mean?
    Colonel Wilson. No, ma'am, I have not, but will be glad to 
respond later.
    Senator Murray. If you could respond to the Committee, I 
would appreciate it.

Response to Request Arising During the Hearing by Hon. Patty Murray to 
   John L. Wilson, Assistant National Legislative Director, Disabled 
                           American Veterans

    Response. DAV is not in favor of removing the U.S. Court of Appeals 
for the Federal Circuit from the veteran's benefits determination 
process. It is our view that this next level of appealate review is 
critical in ensuring cases on appeal are afforded proper and thorough 
consideration. This next level of review is vital because the U.S. 
Court for Veterans Claims has the authority to hear cases by judges 
sitting alone or in panels. No other U.S. appellate court permits one 
judge to decide appeals. The Court's caseload does not prohibit each 
appeal being decided by a panel, yet this is typically the case for 
such appeals. As a result, a veteran's status before the Court is 
diminished when compared to other citizens' cases heard before other 
appellate courts. Status as a veteran should not reduce the quality of 
judicial review to which he or she is entitled. Therefore, we are not 
in favor of removing the Federal Circuit from this process. The Federal 
Circuit has limited jurisdiction to hear appeals from the Veterans 
Court and we do not believe removing the Federal Circuit from the 
appeals process is in the best interest of veterans.

    Senator Murray. Mr. Bertoni, would you have any input on 
that?
    Mr. Bertoni. I would say we have not looked into that or 
any considerations there. But I would say there would be a 
range of stakeholders that you would have to bring in.
    Senator Murray. That is why you suggested commission----
    Mr. Bertoni. Yes, that is right, Senator.
    Senator Murray. Senator Burr?
    Senator Burr. Mr. Allen, you are right. It is a major 
shift, but I think we are challenged to look at it in a 
different context. I was serious months ago when I suggested to 
the service organizations, let's start with a blank sheet of 
paper, and come in and tell us how you design it in the 21st 
century. To the credit of DAV, they took on the task, and I am 
appreciative of that.
    You are right when you mention the word ``commission.'' 
What little bit of hair I had on the back of my neck did stand 
up. So let me ask, what additional information do you believe a 
commission would find that we do not have readily available to 
us today?
    Colonel Wilson. I thought of two ways to respond to that. 
The first and most direct is, I do not know what additional 
information the commission would have that you do not. I do not 
mean to refer back to Secretary Rumsfeld, however, there are 
things that we know we do not know. But more importantly, 
Senator----
    Senator Burr. And that was sort of the basis of why you had 
the creation of the VA appellate process and the federal court.
    Colonel Wilson. Yes.
    Senator Burr. We did not know what we were going to run 
into.
    Colonel Wilson. Absolutely. And second, though, Senator, I 
think that the key--because I think this has been the key over 
time as various veterans' benefits have been discussed--is it 
reaches a tipping point when enough of the relevant 
constituencies come together on an idea. I do not know whether 
something can truly be successful if it is, in fact, deemed to 
be imposed.
    Senator Burr. How long do you think a commission would need 
to take to accomplish the work that you perceive a commission 
should attempt to accomplish?
    Colonel Wilson. Part of it would be how broadly the 
commission should be structured. In my perfect world, I would 
say that it should actually be a commission that looks at the 
claims processing from cradle to grave. Because the situation 
we have now, some have described as a spider web which is not 
quite right, I think, because is an older spider web--the 
administrative process--on which a new spider web has been 
grafted. So, anything you do to one part is going to affect 
another.
    I think that now that we have a system that we have seen, 
if a commission starts from the beginning and looks at the end, 
because things that are done at claims processing at the 
administrative level are going to make a difference in the 
judicial review arena as well, and vice versa. So if the 
process were from beginning to end, I think this could probably 
be done, with commitment, in 6 months.
    Senator Burr. You mentioned in a recent Law Review article, 
and I quote, ``Perhaps the most significant shortcomings of the 
current system of veterans' benefit determinations and their 
judicial review is the delay that veterans face.'' I think many 
veterans would agree with the assessment you have made.
    How would you suggest we strike the right balance between 
speeding up the system and protecting the rights of veterans?
    Colonel Wilson. That is a very tough question. At the 
hearing in February, I think, Senator Begich mentioned that 
there are sort of two generic approaches one can take. What I 
have been talking about is the big picture, beginning to end. 
But there are also targeted things that can be done in the 
system right now to help reduce delay. Some of them, Congress 
has done. Congress authorized new judgeships for the Veterans 
Court that are going to come into force in December 2009, in 
theory, to help reduce that workload. There are things being 
done at the Veterans Court to decrease delay and to increase 
efficiency. For example, the provision of technology, there are 
things being done with the system.
    But I think that we have to be honest about the fact that 
any reduction in, say, for example, the number of remands--
which on a systemic scale is bad--is going to affect, in any 
given case, the fact that a veteran's claim is going to stop 
somewhere on the road earlier than it would otherwise have 
done. And so, I think that we have to start with the assumption 
that that is the case.
    I think a lot of this can be enforcing what Congress has 
put in the statutes to make the VA process have the benefit of 
the doubt going to the veteran, and I think that that is a good 
point.
    Senator Burr. Mr. Bertoni, you are familiar with DAV's 
recommendations. Am I correct?
    Mr. Bertoni. We have not done much analysis. I am vaguely 
familiar with what they recommended, yes, in terms of the--on 
the appellate----
    Senator Burr. Are you aware of them enough to make a 
recommendation as to whether you think if we enacted them, they 
could save some of the delays that have been identified?
    Mr. Bertoni. No, but I could talk generically about 
reengineering processes and why that is a good thing, and then 
sort of segue into that.
    We always said that benefit processing organizations should 
be looking to reengineer their processes, to look for 
efficiencies in streamlining their processes. To the extent 
that you can do that, then you take those redesigned processes 
and build your automation systems around them. Then you 
actually have gained two efficiencies: your process is better 
and your automated system is better.
    To the extent that what they are proposing can eliminate 
steps and compress timeframes, we would think that would be 
possibly a good solution. The only concern that I have in the 
limited knowledge I have is that if you create a system where 
the paperwork is pushed up the flag pole to the next level, I 
think for a while you can be more efficient. But if the numbers 
start to come in at substantially higher levels, if they do not 
have the resources and 
staff and reengineered processes up there, you might get into a 
situation where you have just moved the problem to the next 
phase. We have seen that in other programs like the Social 
Security Administration.
    Senator Burr. Let me ask you, if you could--I cannot 
remember whether your comments have included an observation on 
the stimulus money that went to the VA ($150 million for 2,200 
positions which expires in 14 months) to basically process 
10,000 claims. And I realize that is something that was pulled 
out of the sky on the run, but let me ask you. Good investment?
    Mr. Bertoni. Well, I have seen the plan. The number I have 
seen is 150 million and 1,500 employees, in written form. I 
believe it is 500 permanent and 1,000 temporary employees. 
Clearly, absorbing the staff at the rate at which they have 
been going is going to be a challenge.
    You mentioned the appeals resource centers. Anecdotally, we 
have heard some noise there, that absorbing staff and trying to 
find trained staff or get staff trained enough has caused some 
issues. So, I think the organization, since 2005, has been 
injecting a great number of staff in, and they have had some 
issues with training, deployment, and getting folks up to a 
proficient level. They have acknowledged it is going to lead to 
sort of a downturn in productivity for some time. However, it 
also shows that they are producing more. In the last couple of 
years, it looks like there is some good trending in the data.
    So, I think over time, if they can integrate staff into the 
processes in a timely manner and get them trained, I think you 
should be able to see some better training in the numbers. 
However, it is going to really depend on how they design their 
service delivery plan to make sure they have people processed 
and technology in the right places at the right time. It is not 
a matter of simply putting staff where you have space. You 
could really run into some real inequities in terms of 
experience in certain areas if they do it that way.
    Senator Burr. Thank you.
    Thank you, Madam Chair.
    Senator Murray. Thank you.
    I have one additional question, then I am going to turn it 
over to Senator Brown for his questions and comments and to 
hand him the gavel to chair the final time of this Committee. 
So, thank you for being here.
    Mr. Bertoni, I just wanted to ask you, as you know the DES 
pilot could be implemented worldwide. You have testified that 
the DOD and VA have not established how they will define 
success for that pilot.
    In your opinion, what would indicate success?
    Mr. Bertoni. I agree with the indicators of customer 
satisfaction and timeliness. I mean, I think those are two very 
important things. I do not think that VA and DOD have put 
enough thought in terms of what is the performance bar for 
accuracy and consistency. How much improvement in any of these 
elements do you want to see that would warrant worldwide 
implementation?
    I do not believe they are there. The last thing you want to 
do is have more decisions--quick decisions but bad decisions. 
So I do believe they need to get behind the accuracy and 
consistency ball and really design some criteria and targets to 
shoot for.
    Another concern we have is they are about to issue a report 
in August, and they are going to be rolling out or standing up 
at least several sites in the latter part of this pilot, which 
by their own designation are high risk or high risk of failure. 
They are very unique characteristics. It is unclear to us how 
they will be able to cutoff analysis to begin drafting this 
report and still incorporate the data that those sites will 
yield to give you all a good sense of how effective this pilot 
is by August.
    Senator Murray. OK. Thank you very much for that input.
    Senator Brown, thank you for being here, and I turn the 
gavel over to you.

               STATEMENT OF HON. SHERROD BROWN, 
                     U.S. SENATOR FROM OHIO

    Senator Brown [presiding]. Thank you, Senator. I appreciate 
that.
    Thank you for joining us. I appreciate your pubic service, 
all of you, and your support for veterans.
    I represent Ohio, and Ohio has, if not unique, some more 
severe problems perhaps than the rest of the country. I want to 
get to something specific later on that way.
    But let me ask you--we all hear about this all the time. We 
hear about the bottleneck, we hear about the frustration that 
so many veterans have. Talk through with me where the real 
bottleneck is. Is it the initial claims process? Is it the 
appeals process? How do I better explain to veterans why there 
are 145,000 claims that are older than 125 days? Each of you, I 
would just like to hear your thoughts about it.
    Mr. Allen, you want to start?
    Mr. Allen. Sure, Senator. I think part of it depends on the 
individual veteran who comes up to you and where their claim is 
in the process. Starting at the back end: if you are a veteran 
who has been dissatisfied at the administrative level--which 
you have appealed now to the federal court system--you are 
going to be shocked by the way it works there because now you 
have a traditional adversary system in which there is time 
built in for the assembly of an appellate record and the 
debriefing that goes into that, where in that process itself is 
going to take 120 days if you are lucky, and then the case is 
right for decision. Then if you are still not happy, one part 
or the other, can appeal to the Federal Circuit.
    So, part of this is that the downside of judicial review is 
increased process. If you are at the administrative level, 
other people are going to be able to discuss this better than I 
would. But certainly, the statutory provision that allows for 
``one appeal to the Secretary''--which is essentially the Board 
in this case--means that the board will remand matters for 
initial adjudication over and over and over again to the 
regional office to allow one appeal to the Secretary.
    So, in that sense, I do agree with Mr. Wilson that it would 
make sense in terms of delay to allow the veteran to waive that 
right, essentially; to allow the veteran to affirmatively say I 
know I have the right to have it remanded and considered first 
before the RO, but I will let the Board do it, because I think 
that is a big part of administrative delay.
    Senator Brown. Mr. Bertoni?
    Mr. Bertoni. I do not think I could isolate any particular 
aspect of the process from front to back as a particular 
bottleneck. I think throughout the process there are program 
design inefficiencies that have slowed the way cases are 
processed through the system.
    I do believe one key aspect or problem that starts very 
early on is the inability to develop the medical record and 
difficulties establishing service connection. I think that some 
of the initiatives that they are trying to do right now, in 
terms of benefits delivery at discharge, where 70 percent of 
departing servicemembers are leaving through these sites, where 
you could get early information on the medical history and the 
personnel record when it is most fresh, you can establish 
service connection more easily.
    So I do believe there are some things going on, especially 
the DES pilot, where those issues can be resolved early on. 
Certainly, there are program design issues throughout the 
system that are causing slow downs in processing, but I think 
that upfront development and being able to establish service 
connection can help throughout.
    Senator Brown. So, Mr. Bertoni, you think that the meetings 
that Secretary Shinseki and Secretary Gates have had, the 
information technology to help IT, that they are working on, 
and the fact that the VA will have access to those records much 
earlier in the process--really, from the day that a man or 
woman signs up and joins the military--and that it will be more 
seamless and all, that should help in terms of this backlog?
    Mr. Bertoni. If you could create those interfaces, the 
ability to quickly share medical information in an online 
fashion, I think that is going a long way. But be mindful that 
it is not just a matter of taking a 400-page paper manual file, 
and evolving it into an electronic system. I do believe you 
need to build into that system the ability to query, to search, 
and to be able to pull out documents that you need specifically 
to reach a decision.
    So, it is a matter of having this electronic interface, and 
having it be a very user-friendly system that can help those 
who develop the claim also pull out the information they need.
    Senator Brown. Colonel Wilson, your thoughts on my original 
question, about the bottleneck.
    Colonel Wilson. Yes. Thank you, Senator. It is certainly a 
complex issue, as well intended to. One of the issues is simply 
that when a veteran files a claim and appeals, during appeal, 
should it wish to provide additional information, supplemental 
statements of the case are created for each particular time 
that veteran submits information for that particular appeal.
    When I was in the field, I saw as many as 9, 10, and 12 
supplemental statements of the case being issued for a veteran 
on their appeal because they had not bothered to talk to their 
representative and say what is going on here, ``They have asked 
me for information and I sent it forward, and I have got 
another delay and another delay.'' I have to caution them, 
please do not submit any more additional evidence. Stop, you 
have certainly submitted enough; it is duplicative as a matter 
of fact. They do not understand the process. So, this is one of 
the complications that is raised--a very complex issue.
    So, if you allow the veteran to instead opt out of this 
current process where the regional office has a review, opt 4, 
which I think is already the case, the Board of Veterans 
Appeals to have a review, you then, therefore, also eliminate 
the supplemental statement of the case. By the way the VA 
tracks as many as only up to five SSOCs; there could be far 
more than that. As I indicated I have seen 9, 10, and 12 from 
certain veterans.
    When you figure that SSOC is 1 hour of work for a simple 
case, and you have thousands of them, you have thousands and 
tens of thousands of man-hours that you can save as a result. 
It moves the appeal process further, gets the appeal decision 
back to the veteran sooner.
    The other issue that you face is the VA working in the 
proper direction with its infrastructure issues in the IT 
arena. Moving to the electronic record, as is being talked 
about with the DOD and VA, is outstanding; absolutely the right 
way to go. It may likely take an additional investment of 
resources as was testified to before this Committee previously.
    So, those are a couple of the issues that cause the 
continued problems that the VA has in being responsive to the 
veteran in a timely manner.
    Senator Brown. Thank you.
    From your comments, Colonel Wilson, about delay, and, 
Professor Allen, your comments about judicial review taking to 
120 days, just that alone, that process--there are some 145,000 
claims, as we have discussed, over 125 days old. What is the 
right number of those, considering these factors? What should 
be our goal because of the slower judicial review process? What 
number should we be aiming at? What is fair to veterans?
    Your thoughts on that?
    Mr. Allen. Well, in terms of the judicial element, once you 
have sort of crossed the Rubicon and decide you want 
independent judicial review in an adversary setting, in a court 
system, there is only so much that can be done to reduce 
``delay.''
    Senator Brown. So what is that number taking those out? 
Where should we be?
    Mr. Allen. This is not necessarily something that veterans 
want to hear, but I think, realistically at the appellate court 
level, the claims are being adjudicated at about the right 
speed if we want to maintain a traditional adversary system. 
There are things that can be done in certain cases that the 
court is doing, I understand--an aggressive mediation program--
to try to get things resolved earlier. But, in terms of the 
speed to decision at the appellate court level, I think that 
that is about right. In fact, I think the Veterans Court 
produces decisions, on average, faster than other federal 
courts of appeals, but it is still a significant chunk of time.
    Senator Brown. That's little consolation to someone going 
through the process, but I understand that.
    Mr. Allen. That fundamentally is the tradeoff about whether 
or not this type of judicial review is worth the candle. I 
think it is, but that is also why in my response to Ranking 
Burr----
    Senator Brown. Can you estimate of the 145,000 how many of 
those are actually part of judicial review?
    Mr. Allen. None. None technically, at least not yet. Each 
year approximately 4,500 to 5,000--depending on the year--cases 
are appealed from the Board of Veterans Appeals to the Veterans 
Court. Last year, I think it was just under 4,200 cases that 
went to the Veterans Court.
    Senator Brown. Any comments from Colonel Wilson or Mr. 
Bertoni about that?
    Colonel Wilson. No, Senator. I could not offer a 
perspective on what the proper timeframe should be for that at 
this particular time. I would be glad to respond in writing, 
however.
    Senator Brown. OK.

Response to Request Arising During the Hearing by Hon. Sherrod Brown to 
   John L. Wilson, Assistant National Legislative Director, Disabled 
                           American Veterans

    Response. In addressing speed of decisions by the Court and the 
proper timeframe, the primary emphasis should be on a quality decision. 
Quality decisions will ultimately drive timeliness and accuracy. The 
Courts should use the time necessary to provide quality decisions.
    Further, the Court could enhance the quality of its' decisions if 
it would modify its current policy and decide all issues of law raised 
by an appellant and provide an opinion as to how the law affects the 
disability in question. When Congress passed the Veterans' Judicial 
Review Act of 1988 (VJRA) and created the Court, it was granted the 
authority to decide all relevant questions of law and to hold unlawful 
and set aside or reverse any finding of material fact adverse to the 
claimant, which is clearly erroneous. Unfortunately, due to long delays 
in claims processing at the VA, it can take veterans years to get their 
appeals before the Court.
    The result is that the veteran must appeal to the Court a second 
time and, in some cases, a third or fourth time to obtain a decision on 
the merits of his or her appeal. It is DAV's opinion that legislation 
should be enacted that would require the Court to decide each 
assignment of error made by an appellant in an appeal to the Court and 
to reverse any such errors found; and grant the Court the authority to 
modify or remand any Board decision found to contain any error or 
errors, that the authority to modify should include the power to order 
an award of benefits in appropriate cases, and that an appellant should 
be expressly permitted to waive confessions of error made by the 
appellee.
    The basis for this position is a matter of policy rather than 
object analysis however. The Court believes leaving appellants the 
added latitude of resubmitting an appeal on an undecided issue is 
beneficial to the veteran. When asked for the statistical analysis to 
support this position none could be provided. So, the Courts will 
continue their current practice of not deciding all issues based on 
policy only.
    An analysis of the Annual Reports for 2000-2009 finds a remand rate 
of 62.6% for 2008 and 60.5% for 2009. This calculation is based: on the 
total cases affirmed or dismissed in part, reversed/vacated & remanded 
in part; reversed/vacated & remanded; or remanded. In 2008, of the 
4,446 cases decided, 2,787 were remanded resulting in a remand rate of 
62.6%. In 2009, of the 4,379 cases decided, 2,651 were remanded 
resulting in a remand rate of 60.5%.
    It would seem the Courts and veterans would be better served by a 
reduced remand rate if all issues of law as they relate to the appeal 
in question were decided. Having the Court address all issues on appeal 
would, from the perspective of the veteran, also enhance the quality of 
decisions and likely improve the timeliness of decisions.

    Mr. Bertoni. I was just going to say, in terms of the 
initial claims, I do not know what the number is either, but I 
would look at what has been accomplished. If you look at the 
Benefits Delivery at Discharge program, their average is 2-3 
months versus 6-7 months for non-BDD claims. So, I think any 
veteran receiving a claim within 2-3 months would probably be 
pretty satisfied with that.
    As far as the appellate end, 639 days--21 months--I can say 
is probably too long. I do not know what the numbers should be.
    Senator Brown. Veterans are not just frustrated but there's 
the difficulty of survival for some number of veterans that are 
in this process, who have to wait and wait and wait. All that 
is pretty troubling of course.
    I hear veterans often ask if there is a way that VA could 
provide some preliminary classification so that they could get 
some assistance while this process went forward--in those cases 
that, perhaps, are a little more obvious or a little simpler.
    Is there a way that the VA can define preliminary 
classification and move forward with that?
    Mr. Bertoni. Preliminary classification with--are we saying 
a temporary disability or----
    Senator Brown. Yes.
    Mr. Bertoni. I have heard folks make that point. The issue 
we have here, I think, in doing a preliminary classification is 
it could cause problems for both the administration and the 
veteran.
    Number 1, if you do that and 6 months down the road you 
finally do complete the case, or 2 years down the road, and you 
find that the veteran is not disabled or at a much lower 
disability rate, that person could potentially be slapped with 
a fairly high overpayment.
    Given the rules that VA has in terms of waiver, after some 
administrative and bureaucratic gyrations that amount would 
probably be waived. But now you are left with the VA or Federal 
Government having to eat that payment. So, that is one 
scenario.
    Senator Brown. Is there a way of doing that in cases that 
you can reduce significant--and I apologize for going over, 
Senator Burr. Is there a way of doing that so that those cases 
which have a great deal more certainty, so that the likelihood 
of error will be very, very small? It is perhaps a price that 
the taxpayers and the VA pay for these overpayments, if you 
will, but you do it and you define it in a way with much more 
certainty so that overpayments are rare.
    Mr. Bertoni. There is. It is done in the Social Security 
Administration. It is called ``compassion and allowances.'' 
They are doing some of this in VA with some of the target 
subpopulations that they are looking to sort of expedite. These 
are cases most likely to be approved, so they are doing that. I 
do not know the range of subpopulations with the numbers, but 
that is a model.
    Senator Brown. But it is done in a relatively small number 
of cases now, to your knowledge.
    Mr. Bertoni. I do not know the numbers, but it is not done 
on the macro level.
    Senator Brown. From your examination of this from GAO, can 
you tell if you could expand it to a good many more veterans 
without a high rate of overpayment?
    Mr. Bertoni. That is part of what we are doing. This is 
ongoing work. Preliminarily I do not have that answer, but we 
are aware of several pilots that are ongoing where that is 
exactly the concept. These cases are good candidates for 
approval and they are on a fast-track basis. Whether they could 
find more or revise the criteria to bring more cases in, I do 
not know that right now, but it is something we are looking at.
    Senator Brown. OK. Thank you.
    Senator Burr?
    Senator Burr. Thank you, Mr. Chairman. I was going to ask 
Mr. Wilson a couple of questions, but I am going to forego 
those and just make an observation.
    As we have talked about the disability claims process, we 
have all sort of looked at the middle and the end and tried to 
point to all the things we think cause the delays. We have 
extensive debates about what the appropriate amount of time is. 
When do you restart the clock? I think that is what Mr. Wilson 
talked about with the new evidence. It restarted the clock, and 
this brought further delays. There was a point that it was not 
beneficial to veterans.
    Let me just suggest that I hope all of us might back up and 
possibly look at the beginning of the process--when the first 
interaction takes place--and ask ourselves if we put as much 
effort toward the re-training and re-tooling of our VA 
personnel and charge them more with slowing down the process of 
moving that claim forward until they are confident that all of 
the pertinent information that that claimant might need for the 
claim is there, and become a little more invested in each 
individual claimant, then I think, one, we would be able to 
then identify what we do not need, very easily, because there 
would not be this addition of new evidence. Somebody would be 
there helping them construct that file at the beginning.
    If, in fact, the medical information was not in it--you 
requested it of the veteran--and after a period of time you 
move the claim into the process without it, well, you have got 
a VA employee who knows that at some point this is going to bog 
down. This is just going to stop dead, and then it is going to 
set off all these little triggers. The VA at some point, as Mr. 
Wilson says, goes back to the veteran and says, well, we need 
this. They ask, was there somebody in the theater that saw 
this? As you build that case, that is where the delays come 
from.
    Now, I know I am probably suggesting something that is way 
too simple for us to accomplish, but I think that--I refer back 
to those commissions, and here is my frustration. I have seen 
us put commissions together to identify changes to big things; 
and sometimes we get little changes to big things, but we do 
not get big results.
    I think we have got to think about this process, about how 
we can change it tomorrow for veterans. I am not suggesting the 
only place we need to look that the beginning is, but I do not 
think that we can satisfactorily solve all of our problems 
without making sure at the earliest possible point we get all 
the information needed to make determinations. So, when I ask 
how do you find the right balance between the veterans' rights 
and the speed of the process, it is having the most information 
to make an educated decision early in the process so that you 
know whether the individual is going to pursue it further, 
meaning to the appellate court, or, in fact, whether the 
veteran might look at the process up to that point and 
determine they have been treated fairly and now is the time to 
exit the system and let somebody else come in.
    It's my personal observation, because I have been as 
focused as everybody else on having too much in the middle and 
too much at the end, on how many times we restart the clock, 
and whose responsibility is it to make sure that that does not 
happen too often. We have a habit of throwing the hot potato to 
somebody else.
    Maybe we can all agree that we have got to do a better job 
up front, slowing the process down, making sure we have all the 
information; more importantly, making sure that the first 
interaction with the Veterans Administration is with somebody 
whose sole objective is to get the information they know that 
individual is going to need throughout the process. If we fall 
short after that, well, we will deal with it. I think we can do 
a much better job at the beginning because some of the things 
that we all refer to, quite frankly, are achievable at the 
earliest possible point in the process.
    I want to thank all three of our witnesses as well as the 
administration for being here today. I thank the Chair for his 
indulgence for my observations, and I look forward to hopefully 
progress on this in calendar year 2009. Thank you.
    Senator Brown. Thank you, Senator Burr.
    We have a vote call in a couple of minutes, and I just 
really have one question that I would like each of you to 
explore before we wrap up. I would particularly like to thank 
Admiral Dunne and Mr. Koch for staying and listening to the 
questions. Witnesses often do not do that--listen to the next 
panel--and I thank you very much, both of you, for staying.
    I know this hearing is about claims processing, and we each 
have our stories about our own States. I want to ask you 
briefly about a related matter. Mr. Bertoni possibly could be 
the most helpful on this, but if others want to weigh in, 
that's great.
    Ohio consistently receives some of the lowest disability 
compensation in the country year after year, and nobody quite 
understands why. I mean, our delays--the slowness of the 
processing may be worse in Ohio, and that is not really clear 
from information we have. But we do know we have some of the 
lowest disability compensation in the country year after year 
after year.
    I know it is partly demographics, but how much of this can 
be attributed to individual claims processing? Is there a 
structural issue with the Cleveland region that you can see, 
Mr. Bertoni?
    Mr. Bertoni. I do not know that answer. I think the one to 
get behind that would be VA. I know they have started a 
program, which I believe is called the Interrater Comparison 
Program, where they are basically taking a case in a particular 
area and having a number of raters examine it, rate the case, 
and see where there are breakdowns in terms of consistency or 
where there is inconsistency.
    So, I think that exercise is very important. To have that 
kind of analysis where you have three folks rate a like case 
with like impairments and see how far or how close they are in 
terms of the rating determination I think is a first step to 
sort of getting behind whether there is substantial variation 
that needs to be addressed.
    Senator Brown. Anybody else want to----
    Mr. Bertoni. They have just started to do this, I believe.
    Senator Brown. So, a year from now we may know the answer 
to this?
    Mr. Bertoni. I think that is a question for VA, but I do 
not know how long that exercise will be going on.
    Senator Brown. VA has never done anything like that. We 
have asked questions of them and tried to get answers on this, 
and they really do not seem to know the answer. This is the 
first time they have sort of approached that model to be able 
to determine people.
    Mr. Bertoni. I know the VA or the IG took a stab at this 
several years back, and I do not believe their analysis was 
conclusive either. But, again, I do know about this fairly 
recent experience. They are doing this analysis and, hopefully, 
it will yield some information relative to why there may be 
inconsistencies.
    Senator Brown. Colonel Wilson, I am sure you have heard 
from DAV members in Ohio about this. Do you have any thoughts 
or have you been able to give them any insight into this?
    Colonel Wilson. No, sir, no specific insight on that 
particular location. I would offer that the various veterans 
service organizations have long contended that although the 
quantity of work is important--to move cases quickly--that 
quality of work must be a part of that process as well.
    We believe if you change the work credit system--I do not 
care where the location of the regional office is--work credit 
system changes to require accountability, both up and down for 
good work, take it away for work that is not as good, will 
improve the process for all, and eventually as well in Ohio.
    Senator Brown. OK.
    Mr. Allen, any insight you might have?
    Mr. Allen. I do not know enough about that, Senator.
    Senator Brown. OK. Well, thank you.
    Thank you all for your testimony, and thank you especially 
for your service to this Nation's veterans. The Veterans' 
Affairs Committee is adjourned. Thank you.
    [Whereupon, at 11:25 a.m., the Committee was adjourned.]


                            A P P E N D I X

                              ----------                              


  Prepared Statement of Robert Jackson, Assistant Director, National 
   Legislative Service, Veterans of Foreign Wars of the United States

    Mr. Chairman, Ranking Member Burr and Members of the Committee: 
Thank you for the opportunity to provide testimony before this 
Committee on VA disability compensation. The 1.8 million men and women 
of the Veterans of Foreign Wars of the U.S. appreciate the voice you 
give them at these important hearings.
    As we all know, over the past two years the VA has funded the 
hiring of hundreds of new rating specialists in order to reduce the 
growing backlog of veterans' disability compensation claims. We also 
know that it takes at least two years for a rating specialist to be 
trained, and at least another year getting comfortable with the VA 
claims system to get to the point to where the rating specialist 
becomes somewhat proficient in assessing veterans claims. We note this 
because we believe it is important to understand that simply increasing 
the number of VA rating specialists will not significantly reduce the 
claims backlog in a fashion considered timely by this Committee, 
Veterans Service Organizations, and most importantly the very veterans 
this system was developed to serve. This is merely a starting point in 
order to advance our discussion to a self-evident truth:

    There is no quick fix to VBA . . . only the opportunity for steady 
and deliberate improvement.

    There has been a silent paradigm shift over the past 30 years. If 
for no other reason than judicial review, the Veterans Claims 
Assistance Act (VCAA) and the budgetary environment that exists today, 
it may be time to acknowledge that the VA cannot be staffed at such 
levels as will allow it to produce quality decisions in the same period 
those earlier generations of VA workers achieved.
    The converse of this may be to acknowledge that the better 
production and timeliness levels achieved in the 1950s and `60s may 
very well have been accomplished because there was less attention paid 
to procedural rights and that the VA may have exhibited a rather 
cavalier attitude when it came to interpreting the law and its own 
regulations.
    Whether you agree with either view of history, you have to admit 
the world in which the VA operates has changed and it may no longer be 
realistic to expect accurate benefit decisions in a short period of 
time. There are still things that can be done to improve production, 
reduce backlogs (although perhaps not at the rate we all would like to 
see) and ensure claims are completed with quality.

                  PROVISIONAL CLAIMS PROCESSING SYSTEM

    Within two years of the conclusion of World War II, more than 16 
million service men and women were released from active duty. Millions 
filed claims with VA for compensation. Why wasn't the VA overwhelmed? 
There are numerous answers to the question, including:

     Veterans claimed fewer disabilities than at present.
     There were no due process requirements in the law and VA 
procedures required little more than acknowledgement of a claim and 
notice of the final decision.
     VA was not obligated to help veterans obtain private 
records
     VA could and did make decisions after receipt of service 
medical records but before all records were received. When additional 
records were received, VA reviewed those records in context with other 
evidence of record and made a new decision.
     VA frequently evaluated disabilities based on service 
discharge examinations.

    All of these facts allowed the VA to make claim decisions quickly. 
Reexaminations were frequent and allowed VA to increase or reduce 
evaluations as disabilities worsened or improved.
    Today, claims development takes longer. Quite simply, Congress 
recognized that past procedures and practices by VA were not always 
veteran friendly, did not adequately tell veterans what was needed and 
often led to decisions based on less than all the available evidence. 
Decisions are longer because Congress decided that veterans should be 
told what evidence was considered and why benefits were denied or 
granted. Appeals take longer to resolve because of increased 
evidentiary and notice requirements, the introduction of an additional 
review level with Decision Review Officers and the need to satisfy all 
judicial mandates.
    The fact is there is nothing inherently wrong with any of these 
changes. Those decisions are needed to fix recognized problems and 
abuses.
    However, the question still remains; how do you devise a system 
that allows VA to make decisions rapidly without increasing mistakes, 
is not costly either to the veteran or the American people, and 
continues to provide veterans with the protections that have been built 
into the law over the past 60 years?
    Jerry Manar, VFW's Deputy Director for National Veterans Service, 
along with four other retired VA alumni, has developed a process that 
incorporates the best practices of a post WWII claims system to make 
expedited provisional decisions based on existing records. This 
proposal, which calls for the creation of a test program entitled the 
Provisional Claims Processing Program, would grant benefits on limited 
information quickly but with quality.
    The Program would be limited to servicemembers leaving the Armed 
Forces or recently discharged veterans. An initial evaluation would be 
conducted based on existing evidence, and the veteran would have the 
opportunity to accept the provisional rating. If the veteran declines 
the provisional rating, the claim would be processed through the normal 
claims process.
    If the veteran accepts the provisional rating, full development, a 
VA examination and a new decision would be required four years after 
the initial provisional rating. Provisional decisions made under this 
program would have no precedent value and service connection for all 
disabilities, including any new condition the veteran chooses to place 
into contention, would be made during the review at the four-year 
point.
    This program would restore the rapid delivery of benefits based on 
current rating standards, while still maintaining veterans' rights 
under a system of protections carefully crafted by Congress over the 
past 60 years. It should dramatically increase decisions on original 
claims while allowing the bulk of VA's field staff to concentrate on 
resolving the existing backlog.
    More importantly, this program would provide a win for new 
veterans. In exchange for agreeing to wait for a final decision, they 
receive a provisional decision and benefits in a matter of weeks 
instead of more than six months. If properly structured the VA could 
fulfill the promise it made with the BDD program that a decision could 
be made prior to discharge.
    Further, veterans have the right to choose which program they 
participate in AFTER they know what the provisional decision awards. If 
they disagree with the provisional decision, they need not accept it. 
And, since they know that the current program may take six months or 
more to produce a decision, their conscious choice to accept the wait 
should reduce the number of complaints and consequent pressure on 
Congress.
    This proposal offers a viable short-term solution to the growing 
backlog of claims and we would hope the Congress would consider this 
proposal or some similar program as a means of assisting the VBA in 
improving the claims processing system.

                    GETTING IT RIGHT THE FIRST TIME

    We also believe some of the greatest benefits can be found by 
fixing the front end of the claims operation. Most court decisions 
today focus on procedural problems stemming from notice to claimants 
and development, or failures to properly develop evidence. The VCAA was 
created because VA would sometimes take shortcuts in the claims 
development period, failing to give claimants adequate notice of what 
they needed to produce to prove their claims. However, as we have seen 
since its passage, it is quite possible to become bogged down in the 
notice requirements while attempting to dot every ``i'' and cross every 
``t''.
    We support the VCAA because we believe it helps level the playing 
field for veterans. The VA has the knowledge of what is required in 
order to grant or increase benefits to veterans. They are required to 
pass that knowledge on so that claimants know, too, and can focus their 
energies in obtaining the necessary evidence to perfect their claim.
    This is not rocket science. If a veteran claims service connection 
for the residuals of a knee injury, the VA can tell her that she needs 
to show that she has a disability of the knee now, that she injured the 
knee in service or something that happened in service caused a knee 
problem and to provide VA with medical evidence that shows the current 
problem to be related to the event in service. These are the same three 
things that have always been required to prove service connection.
    The requirements for obtaining an increase in benefits are equally 
finite: a claimant must show that their service-connected disability 
has worsened sufficiently to obtain a higher evaluation. In order to 
obtain an increase for that knee problem, the veteran must show the 
existence of arthritis in the joint which limits motion or causes pain, 
or demonstrates instability in the joint.
    Again, this is not rocket science. Software could be developed that 
allows a VSR in a Pre-Determination team to simply answer a question on 
a computer screen concerning whether the claim is for service-
connection or an increase and what the claimed condition is. Now, as 
you suspect, the computer can generate paragraph after paragraph 
explaining what is required and if the veteran is claiming 12 
conditions then the letter can become quite long. Yet, if the object is 
to ensure that claimants have the information necessary to perfect 
their claims then it can be done with properly programmed computers. 
Further, software programs could be made available to claimants in a 
simple, easily accessed, public web site. Any curious veteran could 
enter the web site, answer a series of simple questions and receive 
detailed information on what is needed to obtain the benefit.

         UTILIZING TECHNOLOGY AS A TOOL TO CREATE EFFICIENCIES

    We have testified before this Committee in the past, and continue 
to believe, that if VA takes advantage of the rapid advances in 
technology they will be able to create efficiencies that currently do 
not exist. For instance, the VA currently has thousands of all 
electronic claims files. These cases are largely Benefits Delivery at 
Discharge (BDD) cases and the electronic claims files offer VA a unique 
opportunity to create a separate office to handle all electronic 
claims, allowing the VA to experiment and create an environment 
unencumbered by paper files. Imagine the possibility of having two or 
three Rating VSR's located in separate sections of a building reviewing 
one claims file and making decisions on different elements of the claim 
simultaneously. The efficiencies that such a system creates could be 
significant.
    We understand that VA has established a claims processing 
laboratory in Providence, RI to explore and develop these efficiencies. 
We welcome this effort and look forward to viewing the results of this 
work in the years to come.
    What about the millions of existing paper claim files? VA 
rightfully believes that copying these files would be cost prohibitive. 
We agree. However, VA receives thousands of requests each year for 
copies of claims files. Currently, each file is photocopied and sent to 
the claimant. What if each office was equipped with a scanner so that 
instead of photocopying the file, it is scanned. The claimant would 
still receive a paper copy of the file and at the same time, the VA 
would have yet another electronic record.
    Mr. Chairman, these suggestions and ideas, in and of themselves, 
will not solve the backlog, timeliness and quality issues plaguing the 
VA today. However, if adoption of these and similar proposals each 
result in steady and deliberate improvement, we believe the cumulative 
effect will be sufficient to achieve reductions in workload and 
improvements in quality and service to veterans, their families and 
survivors.

    Thank you for allowing the VFW to provide written testimony on this 
issue.
                                 ______
                                 
           Additional Submission of Prof. Michael P. Allen, 
            Stetson University College of Law, Gulfport, FL













































































































































































      

                                  
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