[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





                  AN EXAMINATION OF POORLY PERFORMING
          U.S. DEPARTMENT OF VETERANS AFFAIRS REGIONAL OFFICES

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

                                HEARING

                               before the

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                                 of the

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

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 2, 2011

                               __________

                           Serial No. 112-16

       Printed for the use of the Committee on Veterans' Affairs








                                _____

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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
Vacancy
Vacancy

            Helen W. Tolar, Staff Director and Chief Counsel

                                 ______

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                    JON RUNYAN, New Jersey, Chairman

DOUG LAMBORN, Colorado               JERRY McNERNEY, California, 
ANN MARIE BUERKLE, New York          Ranking
MARLIN A. STUTZMAN, Indiana          JOHN BARROW, Georgia
Vacancy                              MICHAEL H. MICHAUD, Maine
                                     TIMOTHY J. WALZ, Minnesota

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














                            C O N T E N T S

                               __________

                              June 2, 2011

                                                                   Page

An Examination of Poorly Performing U.S. Department of Veterans 
  Affairs Regional Offices.......................................     1

                           OPENING STATEMENTS

Chairman Jon Runyan..............................................     1
    Prepared statement of Chairman Runyan........................    36
Hon. Jerry McNerney, Ranking Democratic Member...................     2
    Prepared statement of Congressman McNerney...................    37

                               WITNESSES

U.S. Department of Veterans Affairs:

  Belinda J. Finn, Assistant Inspector General for Audits and 
    Evaluations Office of Inspector General......................     3
      Prepared statement of Ms. Finn.............................    38
  Diana M. Rubens, Deputy Under Secretary for Field Operations, 
    Veterans Benefits Administration, U.S. Department of Veterans 
    Affairs......................................................    27
      Prepared statement of Ms. Rubens...........................    59

                                 ______

American Federation of Government Employees, AFL-CIO, James R. 
  Swartz, Jr., Decision Review Officer, Cleveland Veterans 
  Benefits Administration Regional Office, and President, AFGE 
  Local 2823, and the AFGE National Veterans Affairs Council.....    17
    Prepared statement of Mr. Swartz.............................    56
American Legion, Ian de Planque, Deputy Director, National 
  Legislative Commission.........................................    13
    Prepared statement of Mr. de Planque.........................    48
National Organization of Veterans' Advocates, Inc., Richard Paul 
  Cohen, Esq., Executive Director................................    15
    Prepared statement of Mr. Cohen..............................    53
Veterans of Foreign Wars of the United States, Gerald T. Manar, 
  Deputy Director, National Veterans Service.....................    12
    Prepared statement of Mr. Manar..............................    44

 
                  AN EXAMINATION OF POORLY PERFORMING
          U.S. DEPARTMENT OF VETERANS AFFAIRS REGIONAL OFFICES

                              ----------                              


                         THURSDAY, JUNE 2, 2011

         U.S. House of Representatives,    
                Committee on Veterans' Affairs,    
                  Subcommittee on Disability Assistance    
                                      and Memorial Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room 334, Cannon House Office Building, Hon. Jon Runyan 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Runyan, Buerkle, Stutzman, and 
McNerney.

              OPENING STATEMENT OF CHAIRMAN RUNYAN

    Mr. Runyan. Good afternoon and welcome. This oversight 
hearing of the Subcommittee on Disability Assistance and 
Memorial Affairs will now come to order. We are here today to 
examine how to improve the under-performing regional offices. 
One of the challenges facing our Nation's veterans is the 
current backlog of claims for disability benefits. As of May 
31, 2011, there are over 809,000 claims for disability benefits 
pending rating at the U.S. Department of Veterans Affairs (VA) 
regional offices (ROs). Of this amount, almost 60 percent have 
languished past the strategic target of completing claims in 
125 days. The President's fiscal year 2012 budget projects that 
the average days to complete a claim will rise from 165 days in 
fiscal year 2010 to 230 days in fiscal year 2012. The data show 
that while VA is producing more claims decisions than ever 
before, they are clearly not able to keep up with the demand. 
Congress is unable to truly understand the makeup of these 
809,000 claims and reasons why so many of them take so long to 
be adjudicated correctly.
    Therefore, I soon will be requesting that the VA Office of 
Inspector General (OIG) direct the benefit inspection division 
to compile copies of the 100 oldest claims awaiting 
adjudication at VA regional offices, and conduct a review of 
these claims. I will also ask that this Subcommittee be 
provided with a detailed analysis of the types of issues that 
are claimed in these files and the average age of the claim, 
the average age of the claimant and other characteristics of 
these claims, such as which regional office they were 
processed. I am hopeful that this analysis will allow the 
Subcommittee to better understand why these claims have been in 
the backlog as long as they have and how the processing of 
these claims might be improved. In addition to seeking answers 
by identifying trends in these types of cases that have 
lingered so long past any reasonable period of adjudication, 
this Subcommittee is looking at VA employee performance and 
lack of consistency in quality rating decisions between 
regional offices that have been noted, and prior OIG reports.
    We plan to attack this from several different perspectives. 
Today we will focus on underperforming regional offices. In a 
future hearing, I anticipate examining the training of VA 
employees in claims processing. As a former professional 
athlete, I have an understanding and respect for a healthy 
competition. It is one of many tools for measuring and 
encouraging peak performance by all. There are regional offices 
that consistently rank in the top tier of performance metrics 
and customer satisfaction.
    We commend and salute those offices for consistently giving 
their best on behalf of the veterans they are serving. Our 
veterans who have given so much deserve no less. Competitive 
comparison can also quickly identify chronically poor 
performers. There may be many explanations for this 
underperformance, from lack of training and inadequate 
resources or even poor management. But regardless of the 
explanation, the failures of these offices are unacceptable. 
While there are a few bad employees that contribute to these 
mistakes, I believe that many more are good employees trapped 
in a system that makes things difficult. When our regional 
offices fail, those who suffer are veterans served by that 
office. Heroes in need should not be denied or delayed often 
for many years, because of the happenstance of where the claim 
was filed. This is unacceptable and must end. Last month I 
introduced a bill intended to address this problem and received 
some very good input at a legislative hearing from the VA and 
several of the veterans service organizations (VSOs) on ways to 
improve upon the national ideas in that bill.
    I welcome today's witnesses to continue that discussion and 
offer their own specific recommendations on how to fix the 
problem of consistency in underperforming regional offices. I 
would now like to call on the Ranking Member, Mr. McNerney, for 
any opening statement he would have.
    [The prepared statement of Chairman Runyan appears on p. 
36.]

            OPENING STATEMENT OF HON. JERRY MCNERNEY

    Mr. McNerney. Well, thank you, Mr. Chairman. I think it is 
a great idea to continue to look into how the backlog can be 
reduced. The stated purpose of the hearing today is to examine 
the VA's poorly performing regional offices, and this continues 
the Subcommittee's efforts from the 110th and 111th Congresses 
to analyze the various elements in the compensation and pension 
claims process, to improve performance of the system as a 
whole, and to ensure accurate and accountable claims outcomes 
for our veterans. Everyone wants to see the claims backlog 
reduced. I have spoken to the Secretary about it. So we want to 
work together as a team to find the ways forward on this and 
use the money that we are given to do this in the most 
effective way.
    I have to say, since 2007, the Veterans Benefits 
Administration (VBA) has added over 10,000 claims processing 
personnel and Congress has funded these requests. And yet, the 
backlog still continues to grow. So that tells you that just 
adding people is not necessarily the answer. We have to look at 
the system as a whole, find out what the choke points are, and 
move forward in a way that addresses those choke points and 
uses the money wisely. So that is what I am going to continue 
to look for. I will turn it back over to the Chairman.
    [The prepared statement of Congressman McNerney appears on 
p. 37.]
    Mr. Runyan. I thank my colleague from California for that. 
I know we are kind of thin up here on the dais on the panel 
today. There are several things going on and being pushed back 
by some votes. I appreciate all of your patience and sticking 
around for that. Now we are going to call up panel one, witness 
is Ms. Belinda Finn, Assistant Inspector General for Audits and 
Evaluations with the VA OIG. She is accompanied by Mr. Brent 
Arronte, Director of the Bay Pines Benefits Inspection Division 
for the VA Inspector General. Mrs. Finn, your complete written 
statement will be entered into the hearing record, and I now 
recognize you for 5 minutes for your statement.

 STATEMENT OF BELINDA J. FINN, ASSISTANT INSPECTOR GENERAL FOR 
   AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. 
 DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY BRENT ARRONTE, 
 DIRECTOR, BENEFITS INSPECTION DIVISION, BAY PINES, FL, OFFICE 
   OF INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Ms. Finn. Thank you, sir. Chairman Runyan and Ranking 
Member McNerney, thank you for the opportunity to be here today 
to discuss the OIG's oversight of VA's Regional Offices. Mr. 
Brent Arronte, Director of our Benefits Inspection Division in 
Bay Pines, Florida is also with me today. Our testimony 
summarizes systemic issues resulting from our recent 
inspections and audits. VBA faces challenges in improving the 
accuracy and timeliness of disability claims decisions and 
maintaining efficient regional office operations. From our 
inspections of 16 regional offices conducted between April 2009 
and September 2010, we projected that VBA did not correctly 
process 23 percent of approximately 45,000 disability 
compensation claims. In these 16 offices, the Jackson regional 
office had the highest level of overall compliance, at 70 
percent, with VBA policy, while the Anchorage and Baltimore 
offices had the lowest at 7 percent. We recommended that 
Regional Office Directors enhance policy guidance, compliance 
oversight, workload management, training and supervisory 
reviews to improve claims processing and regional office 
operations. The Directors agreed with all of our 
recommendations for improvement. Our review showed processing 
of temporary 100-percent disability evaluations had the highest 
error rate at 82 percent. These errors happened when staff did 
not follow policy and schedule future re-examinations in the 
electronic system. In a nationwide audit of these 100-percent 
disability evaluations, we projected that VBA's failure to 
timely address the deficiencies could result in about $1.1 
billion in overpayments to veterans over the next 5 years.
    Errors in traumatic brain injury (TBI) claims were second 
highest at 19 percent. These errors resulted from medical 
examination reports that did not contain adequate information 
to determine the disability claim rating. We saw improved 
accuracy in processing for post-traumatic stress disorder 
(PTSD) claims after VA relaxed the rules regarding the stressor 
verification. This change reduced the claim processing errors 
in PTSD from 13 percent to about 5 percent. We also identified 
a number of problems in management areas that support 
disability claims processing. For example, the regional office 
employees exceeded VBA's 7-day standard by taking an average of 
32 days to control claims-related mail. About 75 percent of the 
regional offices inspected did not process incoming mail 
according to policy. The employees also delayed making final 
competency determinations for approximately one-third of 
incompetent beneficiaries and did not always timely appoint 
fiduciaries. Seven regional offices did not always correct 
claims processing errors, identified by VBA's Systematic 
Technical Accuracy Review (STAR) program. And regional office 
management did not always timely complete systematic analyses 
of operations that are intended to identify existing or 
potential problems and propose corrective actions in 
operations. We will continue our work to identify improvements 
in benefits delivery during our future regional office 
inspections and nationwide audits.
    For example, in fiscal year 2012, we will begin an audit of 
VA's efforts to develop and implement the next phase of the 
Veterans Benefits Management System (VBMS), which is intended 
to facilitate paperless claims processing and integrate mission 
critical applications. Additionally, our benefits inspection 
program will continue to review temporary 100-percent 
evaluations and traumatic brain injury claims. We also plan to 
add a review of VBA's homeless veterans program and continue 
our work in herbicide-related disabilities.
    Mr. Chairman, thank you again for the opportunity to be 
here today. Mr. Arronte and I would be pleased to answer any 
questions that you or any other Members may have.
    [The prepared statement of Ms. Finn appears on p. 38.].
    Mr. Runyan. First of all, thank you for being here and 
thank you for your testimony. I heard Mr. McNerney sigh at a 
few of the statistics while you were reading them out and it is 
shocking. With that, I guess it is going to be more of a frank 
conversation with Mr. McNerney and myself being up here and 
really trying to figure out what we can do. We all know there 
are problems. And like I said in my opening statement, it is 
the ideas and how we are going to fix the problems that I think 
are lacking a lot of times. And we do need ideas to implement 
and to make into legislation. I look forward to your input 
along with the other panels as we move forward. So with that, 
we are going to begin questioning.
    I was just curious, Mrs. Finn, as you described 
characteristics of the lower ranked regional office, that don't 
perform as well; are there any similar characteristics that 
they all share?
    Ms. Finn. We see some characteristics. Before I address the 
specifics of your question, I would like to note that at some 
level, all of the regional offices have performance issues. As 
you said earlier, none of them are meeting the strategic 
targets for timeliness and accuracy, so when we say an office 
is underperforming it is basically a matter of degree as to how 
their performance ranks against others. When we looked at the 
timeliness of claims 2 years ago and as we looked at claims 
that were over 365 days old, we noted that a lot of, regional 
offices did not have efficient workload management plans, and 
also that the individual performance goals weren't linked to 
national targets related to claims processing. What we mean by 
that is, although they may have had a total target of 125 days, 
it wasn't broken down into increments that could be more easily 
managed. Further, we continue to find that management and 
supervisors struggle with ensuring the employees follow 
policies and procedures.
    We think this could be attributed to a lack of training, 
need for better guidance and better supervisory oversight 
procedures. We have often found that the regional offices have 
not necessarily implemented policy or didn't enforce policy. 
Further, they didn't do the quality reviews which is back to 
the supervisory issue.
    And finally, we have correlation, we believe, between 
management vacancies and the performance of regional offices. 
In several instances, we have seen prolonged vacancies in 
offices that seem to really struggle to perform and rate claims 
correctly. Since we have only completed 16 regional office 
inspections for our roll-up report, we didn't make a 
recommendation on this yet. We are continuing to follow that 
trend to see how this plays out over the longer term.
    Mr. Runyan. In any of the instances you have been through, 
as you are saying we have the ultimate goal, ``the big goal,'' 
but we don't have the steps. Are there any specific regional 
offices out there that have implemented something like that, or 
they are just sticking to the big picture?
    Ms. Finn. I would like to ask Mr. Arronte to address that 
because he has been actually on the ground in these offices.
    Mr. Arronte. Yes, sir. Primarily what we see is the 
regional offices are supposed to follow national policy and to 
some extent, some of the regional offices have special missions 
so they are allowed to develop some local policies to meet that 
mission. But for the most part, the regional offices follow 
national policy to process the claims or to manage their 
service centers.
    Mr. Runyan. Well, I think the issue is that we are not 
following the policy.
    Mr. Arronte. That is correct, but what they attempt to do 
is to follow the national policy.
    Mr. Runyan. And I think going through this process, have 
you, through your experience in the investigation, found any 
disciplinary action in that realm to get people motivated? I 
mean, I kind of said it in my opening statement. I know I have 
gotten some pushback from some of the other VSOs before just 
talking about competition.
    I know human nature is to be comfortable in your spot and 
not worried about competition. But a lot of time, that drives 
and motivates people, and so does discipline and fear of losing 
your job.
    Mr. Arronte. Sure. Accountability to perform your mission, 
regardless of what your job is key. We don't specifically go 
out to look in these regional offices to see if punishment has 
been taken or administrative action has been taken. I can tell 
you at three of the offices, after our inspection results were 
made available to the Regional Office Directors, some staff did 
receive disciplinary action.
    Mr. Runyan. Okay. I appreciate that. With that, my 5 
minutes is almost up, so I will yield to Mr. McNerney for 5 
minutes.
    Mr. McNerney. Thank you, Mr. Chairman. You do realize the 
Chairman can take more than 5 minutes when he wants.
    Mr. Runyan. I will have a second round.
    Mr. McNerney. I am going to focus on the quality issue. I 
think that is really a key to getting where we need to go. You 
know, when DeLorean was in charge of producing cars, he had the 
highest output of any car manufacturer in the world. But a 
large number of those cars had to be recalled and it didn't 
really help the bottom line any. So putting out a large number 
of claims and adjudicating them, if they have to come back, we 
are not gaining anything.
    So I think if we focus on the quality, we really have to 
balance the quality versus the production. In surveying 
stakeholders concerning VBA's employee work credit system, some 
central issues raised concluded that the system emphasizes 
quantity over quality. Production standards are not based on 
careful analysis of the tasks performed, and work credits and 
production standards do not reflect changes in the claim 
complexity. Do you have any inputs on those conclusions? Does 
that pretty much agree with what you understand?
    Ms. Finn. We definitely see a production mentality in the 
offices, and we hear employees talk about the pressure of the 
production environment. Brent has firsthand experience working 
in an RO, so I think he probably can add some thoughts to that.
    Mr. Arronte. What we see when we go out to these regional 
offices is, and to kind of piggyback off my answer that I gave 
you about disciplining staff, I think that is the exception 
that you find staff that are apathetic or that do not care 
about their mission. I think for the most part, what we see is 
people do care and the employees do want to do well, and they 
want to serve veterans. I think what they are frustrated over 
is the voluminous policies that VBA has, the backlog, and the 
production environment. And some interviews that we have 
performed with regional office staff, they tell us that they 
get so frustrated that they have to put out so many widgets, 
but the quality of those widgets appear to take the back seat, 
and that seems to frustrate the staff, I think, more than 
anything.
    Mr. McNerney. So the work credit system is kind of at the 
base of this, right? What do VA employees get credit for? Do 
they get credit for putting out a lot of claims?
    Mr. Arronte. Right. It depends on which team in the process 
that they are assigned to. They have a work credit system to 
meet production. They have a personal production goal where, 
say, a rating specialist in one office, has to complete five 
disability decisions a day. But if every rating specialist in 
the regional office, let's just say there was 20 and they had 
to do five per day, if they all did five per day, that would 
still not make a dent in the backlog.
    So when Ms. Finn said these are not tied to performance 
goals, they are not tied to the overall performance goals. They 
are more individual goals.
    Mr. McNerney. And moreover, the five-per-day goal doesn't 
necessarily reflect the complexity of the claims because the 
complexity varies from claim to claim. I mean, there has to be 
some way to not only have a numerical goal but a goal that 
includes complexity of claims and quality of output.
    Mr. Arronte. Well, I think the quality is the key, because 
typically what they do is if a claim has one to seven issues 
you get one credit for rating that claim or making a final 
decision. But if that claim has eight or more issues, then they 
get more credit because it is a more complex claim. But the 
issue, I think, is the quality. And when Ms. Finn talked about 
supervisors or first line supervisors not performing quality 
reviews, when we speak to these first line supervisors they are 
inundated with the amount of work that they have to review. 
They consistently tell us that they are mandated to review five 
claims per person to ensure that these are quality claims. But 
five out of 500 is not material. So the emphasis on quality 
doesn't appear to be as much as the emphasis on let's get the 
inventory down, and the way we get the inventory down is to put 
out claims.
    Mr. McNerney. Does the Chairman intend to have another 
round on this panel?
    Mr. Runyan. You can proceed if you want to.
    Mr. McNerney. Okay. Well, another question related to 
management and prolonged management vacancies. My understanding 
is there is a clear correlation between the quality of the 
output and management being present. And what I want to ask 
you, if you can verify that, is what is the reason for such a 
large vacancy record of some of these ROs?
    Ms. Finn. Sir, I am sorry. I would not feel that I could 
give you accurate information on the reason for the vacancies. 
We can speak to the length of the vacancies and some of the 
circumstances, but I believe Ms. Rubens may be better able to 
address the reason for why some of the vacancies have 
continued.
    Mr. McNerney. Okay. But you can affirm that there is a 
strong correlation between the quality and the presence of 
management oversight?
    Ms. Finn. From what we have seen, yes, we believe there is 
a strong correlation.
    Mr. McNerney. So one of the ways we can improve the quality 
is to make sure that management is present in these ROs, from 
your point of view?
    Ms. Finn. We believe so, yes. It is not just having the 
manager available, it is making sure the manager is equipped 
with the skills and tools they need to do the job. Sometimes, 
not just in VBA, but many organizations may promote good 
technicians to be a manager, and that is not always the best 
manager. That person needs training and perhaps mentoring to 
learn the skills required to be a good manager and not just a 
good technician.
    Mr. McNerney. Okay. Thank you. I yield.
    Mr. Runyan. Thank you. Going back and kind of revisiting 
quality, it seems that it is the quality issue that is lacking 
weight in the metric and the measuring of what we are doing. 
Obviously, the lack of quality directly correlates to the 
backlog because then we are in, to use a phrase we use around 
here, ``the hamster wheel'' again. Do you have that sense when 
you look at this stuff that it is not weighted as heavily as 
the output?
    Mr. Arronte. Yes. It appears not to be weighted as heavily. 
Even the staff, like I said, they are frustrated that they have 
to continue to push out numbers. There is a quality standard, 
but supervisors can only review so many. One of the issues is 
span of control for the supervisors. The standard span of 
control is four to six people for a supervisor. Some of these 
supervisors are managing 15 to 20 people. And they just can't 
physically get around and review enough claims for quality and 
then perform the rest of their missions as well.
    Mr. Runyan. And there is, Ms. Finn, regarding misplacing 
loss claim folders, you said in your written statement this is 
happening in the VA's COVER system. They are tracked by bar 
code. How are we losing files like this all the time?
    Ms. Finn. What we found was the location in the system 
doesn't correspond to where the folder is. So when you go to 
where the folder was last recorded, it is not there.
    Mr. Runyan. Isn't that the purpose of the bar code?
    Ms. Finn. The purpose the bar code, yes, is to provide a 
system for tracking it. But it requires compliance that people 
use the scanner to COVER it in every place it goes. And if 
somebody misses doing that step, and then the folder gets put 
into a file room, perhaps it gets misfiled and then you can't 
find it.
    Mr. Runyan. Something that is a little closer to my heart; 
it is something I have talked about and haven't uncovered 
tremendously, obviously with the conflicts we have been in in 
the last 10 years with respect to TBI. And I know how difficult 
sometimes it is to diagnose something like that because there 
are so many different avenues of how we are going to diagnose. 
I know myself, coming out of professional sports, it has been a 
new thing. Things weren't talked about before because it was 
unprofessional or unmacho to do. And now we are entering a 
different type of environment and it is very difficult. But you 
indicated the examiners are not providing adequate medical 
exams for that. Is it an educated guess? I mean, how are you 
able to have a professional make a medical ruling and send it 
over to the VBA to have something like that?
    Again, there is not a lot of metrics there and it is a 
process that I don't think is very sound right now.
    Mr. Arronte. What happens with the compensation and pension 
exams is that for each type of examination, there is a template 
that the examiners are supposed to follow. And the information 
in those templates is what VBA needs to make an adequate 
decision. What we have found is that the examiners were not 
always following the template. They were not answering all the 
questions. When we spoke to a few medical examiners at one 
regional office that was colocated with a VA medical center, 
and they told us that they felt that, one, the rules were 
confusing. And second, this is when TBI first became an issue, 
they weren't sure what type of examiner should conduct the 
exam.
    Should it be a neuro doctor, should it be a mental health 
doctor? And we have also found that according to one of VBA's 
rules, if the veterans has coexisting mental condition and a 
TBI, then the medical examiner has to distinguish which 
disability is causing the symptoms. VBA's own policy says that 
it is almost difficult to make that call, but we are asking 
medical examiners to make that call. What we are finding in 
some of these exams, they are not making the call because they 
can't. They cannot attribute the symptoms to the specific 
disability. They don't know if it is a mental disability or 
they don't know if it is a residual of the traumatic brain 
injury.
    Mr. Runyan. It kind of goes right back to what I was 
saying. While I believe it is kind of new, I think it is such a 
kind of a new--I wouldn't say it was a new disease as we would 
call it, it is just very hard to diagnose, and I think, again, 
it kind of refers back to what we are saying throughout the 
whole process is sound criteria that we are sticking to and not 
taking guesses on it.
    Mr. Arronte. Correct. We believe that if a medical examiner 
answered every question correctly on the TBI template, it would 
probably make it easier for the decision makers in VBA to make 
a sound decision. We are just not seeing that.
    Mr. Runyan. That is all I have. Do you have anything else, 
Mr. McNerney?
    Mr. McNerney. Yes, actually, if you will allow me.
    Mr. Runyan. Yes, sir.
    Mr. McNerney. Ms. Finn, I understand that the VA OIG made 
86 recommendations to improve performance. Is that correct?
    Ms. Finn. I believe the 86 refers to recommendations over 
the course of our 16 regional office inspection reports. In our 
roll-up report, we had four recommendations to VBA leadership.
    Mr. McNerney. Okay. And are those ranked in any kind of 
order, or are they just equally important, in your opinion?
    Ms. Finn. I think they were equally important. Three of 
them dealt with improving the process for obtaining medical, 
good medical exams on traumatic brain injuries, and 
coordination between VBA and the Veterans Health Administration 
(VHA) on those type of exams. And the fourth issue was 
establishing a standard of time for when people at the regional 
office should make a determination that a veteran was 
incompetent and required a fiduciary.
    Mr. McNerney. So would you consider comprehensive 21st 
Century type reform instituting IT, paperless, you know, that 
kind of thing, would you consider that to be something that 
would have significant impact?
    Ms. Finn. I think, yes, it could definitely have 
significant impact. I think it can also be a very difficult 
thing to do. We will be taking a look in 2012 at the VBMS 
system. My concern with that is we have a lot of veterans from 
the Vietnam era and it may be very difficult to ever really 
convert their records to any kind of paperless system in a 
fashion that provides any kind of real functionality.
    Mr. McNerney. I mean, that wouldn't stop us from starting 
with----
    Ms. Finn. Absolutely not.
    Mr. McNerney. And the last question. With claims brokering, 
in your opinion, you know, between ROs, would that improve the 
situation or not?
    Ms. Finn. We have seen mixed results with brokering. We 
believe that claims could sometimes have been addressed as 
quickly at the original office because brokering has some 
overhead in terms of time to process, package up a claim and 
move it from one regional office to another. At times we 
actually saw claims being brokered to a development center, 
back to a regional office, back to a rating center and then 
back. That was a lot of time in the mail.
    Mr. McNerney. Okay. All right. Well, thank you. I yield.
    Mr. Runyan. Thank you very much. Mr. Stutzman, do you have 
any questions?
    Mr. Stutzman. Yes. Thank you, Mr. Chairman.
    Mr. Runyan. You are recognized for 5 minutes.
    Mr. Stutzman. Thank you. Thank you for being here and I 
appreciate the work that you do, because it is obviously 
important for us and the information that you provide. Just a 
first question is has the VA followed up on your 
recommendations? And what have been the results? What kind of 
correspondence, what kind of reception have you received?
    Ms. Finn. In the OIG, we follow-up to obtain information 
from management as to what they are doing on a recommendation. 
That is done centrally. Then the information is shared with the 
people in my office who actually wrote the recommendations. We 
make a decision as to whether or not we can close the 
recommendation based on the evidence so far. We also do a more 
traditional follow-up where we actually go out into regional 
offices or the environment and evaluate how well the fixes have 
addressed the problem. We can do far fewer of those because we 
have a lot of new areas we want to look at also. We have used 
the benefits inspection program to do is follow up on our 
national audits.
    For example, the issue of the COVER system, claim files 
being lost, and the 100-percent disabilities, came up in 
national audits. Our Benefits Inspectors go out and give us a 
feel for what is going on in the field and whether or not the 
situation is improving. And in most areas we still see issues 
so we will continue to work on those.
    Mr. Stutzman. Regarding the misplacement and the loss of 
claim folders, how is this happening with VA's COVER system 
that tracks claims by bar code?
    Mr. Arronte. It basically boils down to compliance. When we 
do our inspections, we are still seeing staff that do not use 
COVERS to track mail or do not use COVERS to track the location 
of the claim folders. Now, what happens--sometimes, we see with 
the claims folders is somebody will be in a hurry, they will 
have the evidence, they want to make a decision and they will 
take it to the person that needs to make the decision and they 
don't use the system to track the folder. So it is simply a 
compliance issue. We see first line supervisors not holding 
employees accountable for using the tools that they have 
available.
    Mr. Stutzman. So it is something just as simple as putting 
it in the envelope?
    Mr. Arronte. Or scanning the bar code.
    Mr. Stutzman. Okay. Thank you, Mr. Chairman. I will yield 
back.
    Mr. Runyan. Just to touch on that, I mean, is there 
anything that you have witnessed through your investigation 
that, whether it is a Regional Office Director trying to 
develop plans to help us through this, in the oversight 
process, the compliance process; is there anything that you 
have seen we could do to help them give us some teeth in this 
to make the process actually valid?
    Mr. Arronte. I am not sure if we have seen anything that is 
concrete. Like I said, it is basic supervisory skills and I am 
not sure all the supervisors. As Ms. Finn said, we promote 
technicians into supervisor positions that don't have the 
skills or the understanding all the time what it takes to 
supervise. And I think part of it is experience and definitely 
part of it is training. Because when you are in this production 
environment and you stop producing to train, you have lost that 
production time, and you are not going to get that back. And so 
sometimes we have seen some regional offices purposely not 
train because they don't want to lose that production time.
    So the thing is there is a lot of intertwined issues in the 
service center. And I am not sure if that is the best answer, 
but that is what we see. It is basically supervisors aren't 
holding folks accountable.
    Mr. Runyan. Thank you. Mr. McNerney, do you have anything 
else?
    Mr. McNerney. No.
    Mr. Runyan. Mr. Stutzman? No? I want to thank you both for 
being here and your testimony and look forward to continue 
working with you on these important matters. You are both 
excused and we will have the second panel up. Thank you all for 
being here.
    Mr. Runyan. We will be hearing first from Mr. Gerald Manar, 
Deputy Director of National Legislative Service of the Veterans 
of Foreign Wars (VFW). And then we will hear from Ian de 
Planque, Deputy Director of National Legislative Commission of 
the American Legion. Then our third witness on this panel will 
be Mr. James Swartz, Jr., Decision Review Officer (DRO) at the 
Cleveland VBA Regional Office and President of Local 2823 of 
the American Federation of Government Employees (AFGE).
    And finally, we will have Mr. Richard Cohen, Executive 
Director for the National Organization of Veterans' Advocates 
(NOVA). We appreciate all of your attendance here today. And 
your complete written statements will be entered into the 
hearing record. And Mr. Manar, you are now recognized for 5 
minutes for your statement.

   STATEMENTS OF GERALD T. MANAR, DEPUTY DIRECTOR, NATIONAL 
   VETERANS SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
 STATES; IAN DE PLANQUE, DEPUTY DIRECTOR, NATIONAL LEGISLATIVE 
    COMMISSION, AMERICAN LEGION; RICHARD PAUL COHEN, ESQ., 
    EXECUTIVE DIRECTOR, NATIONAL ORGANIZATION OF VETERANS' 
  ADVOCATES, INC.; AND JAMES R. SWARTZ, JR., DECISION REVIEW 
 OFFICER, CLEVELAND VETERANS BENEFITS ADMINISTRATION REGIONAL 
OFFICE, AND PRESIDENT, AFGE LOCAL 2823, AMERICAN FEDERATION OF 
 GOVERNMENT EMPLOYEES, AFL-CIO, AND THE AFGE NATIONAL VETERANS 
                        AFFAIRS COUNCIL

                  STATEMENT OF GERALD T. MANAR

    Mr. Manar. Chairman Runyan, Ranking Member McNerney and 
Members of the Committee, thank you for this opportunity to 
present the views of the 2.1 million veterans and auxiliaries 
of the Veterans of Foreign Wars of the United States on quality 
problems within VA regional offices.
    In October 2008, rating accuracy for all regional offices 
was 86 percent. Four of those offices had quality in the '70s. 
Fifteen had rating quality of 90 or above.
    In February 2011, the national average had fallen to 83 
percent with 15 offices showing quality in the '70s.
    Only six offices had scores of 90 or higher.
    Quality in the Baltimore regional office plummeted from 84 
percent in 2008 to 65 percent today. That means that veterans 
in Maryland have a one-in-three chance of receiving a rating 
which contains a substantive error.
    In the face of this data, the VFW believes that the VA will 
not achieve the Secretary's goal of 98 percent quality in 
claims processing by 2015. Poor quality is a cancer. It creates 
distrust and suspicion among veterans towards VA.
    Real quality problems and this atmosphere of distrust have 
driven appeals to record levels with over 230,000 appeals 
pending today, a 25 percent increase over October 2008.
    VFW believes that rating quality results from certain 
fundamental problems. We are convinced that VBA's unrelentingly 
efforts to reduce the backlog, poorly trained and inexperienced 
managers, poor management systems and controls, and an 
inability to devise and bring online IT solutions, a sea of new 
employees and a host of other problems contribute to a 
breakdown of focus on VA's primary mission.
    In a review of 16 regional offices as we have just heard, 
the VA OIG found widespread management failures including 
absent or untimely management reviews of operations, improper 
mail handing, untimely establishment of computer controls of 
claims, failure to maintain or review diaries in order to 
adjust awards, and a fascinating comparison of managerial 
vacancies in the five best and worst offices they visited.
    These failures are real indicators of inefficient or 
inattentive management within some regional offices. We urge 
this Committee to consider a study of how VBA selects, develops 
and trains individuals for leadership positions. Providing 
well-trained effective leaders at the local level is one way to 
foster a culture of quality.
    While there are several things that VA can do to 
significantly improve quality and rating decision-making today, 
we believe that VA cannot hope to consistently reach the 
Secretary's goal until VA has a computer system which uses 
rules based decision-making as an aid to rating specialists. 
The VA must find a way to reduce the opportunity for error. It 
is only then that these specialists can focus on getting right 
those decisions which require judgment, expertise and 
experience.
    From our perspective, VBMS promises to move VA into the 
21st Century. The lack of a comprehensive fully integrated 
paperless claims system has contributed to inefficiencies in 
claims processing and the backlog.
    VBA is still 2 years away from rolling out a serviceable 
first iteration. It is for this reason that VBMS is not the 
answer to the current problems. Until rules-based decision 
capability is incorporated into VBMS, it should not have a 
significant impact on either quality or workload reduction.
    So what can be done to improve quality especially in 
troubled offices? First, restore a mandatory second review of 
all ratings.
    Today most raters have single signature authority. This 
means that once they sign the rating they wrote, no one reviews 
it. Mistakes are not identified and corrected. Even experienced 
raters have strengths and weaknesses. Providing a second review 
ensures that errors are identified and corrected, and ensures 
that continued learning and development occur among raters. 
Veterans receive better decisions and raters become better at 
their jobs.
    Allow veterans service officers to do their jobs. Our 
written testimony describes a number of practices found in some 
regional offices which inhibit or restrict veterans service 
officers from representing veterans. Service officers provide 
the final quality review a rating receives. We can catch 
problems and get them corrected. We must be allowed to do our 
job of representing veterans. Failure to do so only results in 
more mistakes and appeals.
    Finally, fixing problems in regional offices. VBA knows how 
to fix struggling offices. Our written testimony describes the 
actions they took to fix problems at the Washington regional 
office in 1999. We suggest that that experience is a roadmap 
for making significant improvements in similarly struggling 
offices today.
    Thank you for the opportunity to testify before you today. 
I will be pleased to answer any questions you may have.
    Mr. Runyan. Thank you Mr. Manar.
    [The prepared statement of Mr. Manar appears on p. 44.]
    Mr. Runyan. And Mr. de Planque, you are now recognized for 
5 minutes for your testimony.

                  STATEMENT OF IAN DE PLANQUE

    Mr. de Planque. Thank you, Mr. Chairman. Thank you Ranking 
Member McNerney and Mr. Stutzman for having the American Legion 
here to speak to you today. We sometimes feel like we could 
have gone back to last year's testimony or 2 years ago or 10 
years ago or 20 years ago and we would be saying the same 
thing. It starts to feel like a broken record. In 1977, when a 
veteran wasn't getting benefits and the whole country didn't 
really look too well at veterans, it was still an inexcusable 
tragedy. But for the last 10 years, we have been at war and the 
country, regardless of what they felt about the wars, has been 
pretty much unanimous in saying we have to treat the veterans 
right. And we are still not doing it, and that is incredibly 
frustrating. Rather than go through a big litany of all of the 
things that continue to go wrong over and over and over again, 
hopefully a couple of solutions that the American Legion thinks 
are going to make some improvements that VA can begin utilizing 
now as they are switching to their new electronic system, 
because if they don't change the culture at the time they 
switch to the new tools, and we have said this before, the 
electronic tools are just going to allow them to make the same 
mistakes faster, and that is not going to help anyone. That is 
going to keep the poor veterans in the same hamster wheel.
    VA needs to go forward and they need to increase the 
accuracy of the claims. Everybody agrees with this. I think 
everyone has unanimously said that there is a quantity over 
quality culture. And until they change that, they are not 
really going to get any effective change. To do that, you have 
to look at how they count work credit. Right now, there is no 
difference in whether you do a claim correctly or incorrectly. 
And when your manager is breathing down your neck and saying, I 
need to get another claim, I need to get another claim, you 
need to do this many claims, if you cut a couple of corners 
here, if you don't look at it as closely as you need to, you 
are under that pressure to do your job.
    Nobody can fault the people for doing that, but that is how 
errors get passed on. If you create a work credit system that 
also takes away credit for errors, one that is not only going 
to be answerable for the work that you do, but also recognizes 
the work that is done improperly that assesses a regional 
office say, for example, a percentage of claims that were done 
wrong, then all of a sudden there is an incentive to be doing 
those claims right. And sometimes that means slowing down a 
little bit. And slowing down a little bit is a part of that.
    I am sure you will hear later the VA employees talk about 
the amount of time that is allocated for training and the 85 
hours a year that they do for training. And yet if you go into 
any of the regional offices, the American Legion makes a number 
of regional office action review visits every year where we go 
in and spend a week in the regional office talking with the 
employees, reviewing claims, looking for common errors.
    It is the same thing. You talk to them and they will point 
out that training is lip service at best; that there is too 
much pressure to actually make the numbers, that they don't 
have the time to do the training right. Slow down. Breathe. 
Train, and maybe you won't make those same mistakes. If you 
take advantage of the computer system you have that can tell 
you we are getting errors on these claims out of these offices, 
you know, the board is noticing the same common areas. If you 
hear the court come before you, Judge Lance, Judge Castle, they 
will tell you they are seeing the same errors coming out of 
offices.
    Now you have a computer system. You can start aggregating 
that data and saying we are not training people well enough on 
TBIs. They don't know how to do it. It is not their fault, they 
just haven't been trained well enough to do that. You can fix 
that with training. You can pay attention to the training. And 
the overall net gain is going to be moving claims out of the 
system and bringing down the backlog. VA needs to work at 
efficiency, and that means putting somebody experienced at the 
front of the process instead of at the end of the process as a 
decision review officer. If you take some of those experienced 
people and put them up at the front, doing triage, to use a 
sports analogy, as a point guard, who knows how to take that 
case and go where the best route is for that.
    VA demonstrated this recently with the Agent Orange claims 
and the expected volume they were getting. They set up a 
separate stream just to deal with the Nehmer cases and the 
Agent Orange claims they were expecting on the three new 
presumptive disorders, and they got those claims out of the 
main system in a way that it wasn't clogging up the other work 
that needed to be done.
    If you have somebody at the front who can look at it and 
say this is a complicated thing, this needs to go to a more 
experienced person, this is a simple one, we can track this, 
you should have the ability with VBMS to be able to direct 
these better. And I think that is going to help VA. And I think 
they also need to be more transparent. The American Legion has 
asked for a while to, in addition to Monday morning workload 
reports, listing the number of claims that they have done, to 
list the accuracy rating, to list what the real accuracy is for 
that office. That helps show the employees, look, we care about 
this too. We don't just care about the number of claims you do 
every week, we care about the accuracy too. I think if they are 
more transparent, if they are more honest and open with people, 
then the veterans community is going to give them the time they 
need to get it right.
    And the one thing that I do want to sum up, I think the VA 
employees want to work hard at this. I was speaking with a VA 
claims worker in one of the offices during a review. And this 
was an Afghan veteran who was looking at me and he said, you 
know each of these claims is another veteran. It is another 
person just like a guy in my platoon or a woman in my platoon. 
And here's a case file that is this thick. I have 2 hours. How 
am I giving that veteran justice? They are under the gun. They 
are under the pressure. They want to do a good job. They need 
to have it relaxed so that they can do that job. And I hope we 
can give that to them. Thank you very much and we are happy to 
answer questions.
    Mr. Runyan. Thank you, Mr. de Planque.
    [The prepared statement of Mr. de Planque appears on p. 
48.]
    Mr. Runyan. Mr. Cohen, you are now recognized for 5 
minutes.

             STATEMENT OF RICHARD PAUL COHEN, ESQ.

    Mr. Cohen. Good morning Chairman Runyan, Ranking Member 
McNerney and Members of the Committee. On behalf of the almost 
500 VA accredited attorneys and non attorneys who represent 
veterans for a fee, and on behalf of the thousands of veterans 
who we have represented, I would like to thank you for the 
opportunity to bring to this Committee what we have experienced 
working in the trenches. I am not going to go through the 
litany of problems that the VA has. They are of record. They 
are in the reports. You know about them. A question was raised 
about the characteristics of the worst performing regional 
offices. Understand that all the regional offices are not 
performing their job in an accurate and timely manner, but the 
worst performing regional offices tend to be those which look 
at veterans and their representatives as adversaries, rather 
than as people who are trying to get benefits that the veterans 
have earned.
    The service officers will tell you the same thing as the 
NOVA members. When we come to one of those worst performing 
regional offices, it is like pulling teeth to look at the 
claims file, to talk to one of the people who is in charge of 
doing ratings, or a decision review officer. That is one of the 
problems.
    Now, this is not solely a problem of employees. I will echo 
what has already been said. This is not a problem of employees 
at the line level not wanting to help veterans. It is, however, 
a problem of middle management, which hampers the line 
employees from doing what they want to do. Middle management is 
not only hampering the employees from doing what they want to 
do, but middle management is undercutting the Secretary. The 
Secretary has come out repeatedly with statements that the VA 
is going to put veterans first, and is going to advocate for 
veterans. And then middle management comes out with regulations 
or proposed legislation which will hurt veterans, and NOVA ends 
up coming to hearings and saying how this is ridiculous, this 
will make the system worse. There is no reason for the VA to 
come out with anti-veteran legislation except that middle 
management has a vested interest in keeping things the way they 
were. This system will not change until the VA cleans house, 
gets rid of people who don't buy in to the new mission.
    There was a report that came out in 2009, a cycle report 
from a company called Booz Allen. That cycle report talked 
about the problems created by the work credit system. It talked 
about the problems caused by ineffective measurement of 
accuracy, in which the VA says that they are measuring accuracy 
in the STAR system. However, if you look at what happens when 
those denied claims are appealed to the Board of Veterans' 
Appeals level, you will see that 70 percent of them, when they 
get to the Board, are either remanded or outright reversed. 
That means that the accuracy rate is 30 percent or less.
    Understand, not every claim that is denied or partially 
granted gets appealed. Frequently, more than half the time 
veterans get so frustrated they throw their hands up, they go 
back to wherever they were, in the woods, in the basement, and 
they tell their friends it is useless. They say, I am not 
dealing with that government. I am not dealing with that 
government to try to get benefits and I am not dealing with 
that government either to get treatment. So we have veterans 
who are untreated and are prone to the PTSD symptoms, to the 
TBI symptoms and to suicide.
    NOVA has said over and over again that it is not the fault 
of the line workers who are trying to do the best job they can. 
It is not the fault of Congress which has been trying to get 
something done.
    In 2008, Congress directed the VA to change the law as to 
substitution to change their training and to change the work 
credit system. Nothing happened. NOVA recently, this year, 
filed a lawsuit to compel the VA to issue the substitution 
regulations. Now they have been issued in a proposed form. This 
demonstrates that the VA is not capable of doing what it knows 
it needs to do and that Congress' attempts to effectuate a 
change have not been effective. That is why we have this 
decision from the 9th Circuit which now will compel the VA to 
put in the time limits that NOVA has said they should.
    And we think that, echoing what was said before, the VA 
needs to understand that you don't measure accuracy at the 
moment. You measure accuracy when the claim is concluded. You 
look and you see if you have it right. I can tell you if their 
claim adjudication is accurate, and I can tell you that they do 
not have 90 percent accuracy, even though--or 80 percent that 
they are claiming. Their accuracy is 20 to 30 percent. Thank 
you. I am available to answer any questions you have.
    [The prepared statement of Mr. Cohen appears on p. 53.]
    Mr. Runyan. Thank you, Mr. Cohen.
    Mr. Swartz, you are recognized for 5 minutes.

               STATEMENT OF JAMES R. SWARTZ, JR.

    Mr. Swartz. Thank you for the opportunity to testify on 
behalf of the American Federation of Government Employees and 
AFGE National VA Council. As a Decision Review Officer, I have 
seen firsthand the growing number of complex cases coming into 
the regional offices. And let's face it. Because more veterans 
are surviving the battlefield with catastrophic injuries and 
with the advancements in medical technology for the treatment 
of diseases such as Parkinson's, diabetes, coronary artery 
disease, the new rash of Nehmer cases nearly doubled the 
workload because we are looking at, as a Decision Review 
Officer or Rating Specialist, for some of these veterans, four 
decades of medical evidence to find the secondary medical 
evidence so that we could give the veteran the benefits they 
deserve.
    As a VA employee and as a disabled veteran, I share that 
deep commitment to make sure that VBA gets it right the first 
time. But even at what it considered a high performing office 
like Cleveland, the claims process is still broken. I urge you 
not to rely too much on labels such as high performing and low 
performing, which are based, in part, on manipulations of 
production numbers that have been used in the past to hide old 
cases, in part on the extreme pressure on employees to work off 
the clock and take shortcuts and in part on the experience 
level of the managers, many of which we have at my own regional 
office with less than 2 years experience.
    VBA is not going to break the back of the backlog unless it 
makes some fundamental changes. First, the new hires need 
experienced, skilled supervisors and mentors. They cannot be 
rushed into production, and they must be rotated in every 
position in their job category, in particular, the veterans 
service representative, or VSR, spot.
    VBA has to start holding managers accountable for the 
quality of ongoing training for experienced employees. Managers 
regularly take credit for 85 hours of yearly training, when, in 
fact, the employees are told to learn complex new information 
on their own with much less allotted training time. Many 
employees will print the information out and take it home so 
that they are able to take the time necessary to review the 
information.
    VBA will not break the back of the backlog if employees 
with only 2 years of experience keep getting promoted into 
management positions who are supposed to supervise, mentor, and 
perform quality assurance. Their skills must be tested, just 
like that for the frontline employees.
    If VBA would finally implement the supervisor skills 
certification test, that would address the huge gaps in 
knowledge of so many supervisors. An all-skill certification 
test would do a better job of measuring what the employee 
really needs to know if VBA would start collaborating the test 
design with the AFGE and the members who are actually doing the 
job.
    Also, it simply does not seem right that so few VBA 
managers are actually veterans. Veterans bring a unique 
commitment to the job itself.
    We won't break the back of the backlog as long as VBA 
continues to use a broken work credit system. Right now the 
number of credits a VSR or rating veterans service 
representative (RVSR) has to earn in a day is very arbitrary 
and depends on which regional office you work in. They get too 
little credit for tests that are essential to getting the claim 
decided right the first time. The VSRs in my office only get 
credit for the initial development. Any additional development 
that is necessary to be done, such as ordering exams, the VSRs 
don't get any credit for.
    A broken work credit system leads to bad performance 
standards. If a DRO, like myself, is working the claim of a 
military retiree with 20 to 30 years of service, I am probably 
reviewing maybe 40 to 50 years of medical evidence because of 
decades of private physician care as well as service treatment 
records, yet I am expected to make a decision and print it out 
within 2 hours. You can't give the veteran the opportunity that 
they need and provide them benefits when you have 2 hours to 
review 30 to 40 years of medical evidence. It can't be done.
    There is a simple fix, a fix we see every day in the 
private industry: Develop a new work credit system based on a 
true time-motion study that would show how long it really takes 
to complete each step of the claim process. When employees 
start getting credit for all the work they need to do, more 
claims will be decided right the first time, and there will be 
fewer appeals and remands that add to the backlog.
    Jumping into another new initiative like H.R. 1647 will 
cause VBA to lose, not gain, ground on its fight to break the 
back of the backlog. Rather, let us build on the VBA pilots 
that are already in place with good training, good supervision 
and good performance standards that no longer reward the 
shortcuts.
    Thank you. I am also available for questions.
    Mr. Runyan. Thank you, Mr. Swartz.
    [The prepared statement of Mr. Swartz appears on p. 56.]
    Mr. Runyan. We will begin questioning of the witnesses now.
    Mr. Swartz, talking about the skill certification test, can 
you describe your experience a little more and if you believe--
why is there such a low pass rate?
    Mr. Swartz. The low pass right, in my opinion, is based on 
the training that the VBA employees, are receiving. A lot of 
our training is crisis training. This is the new hot topic; 
here is 30 minutes of instruction, get to it, and we expect you 
to make your production.
    I also believe that the testing, the certification testing, 
that is being done isn't being done by people who perform the 
job. When you are going to contract out something like that to 
be designed, it is very difficult for them to actually realize 
without having to have done the job itself what questions to 
even ask. A lot of the questions--I, myself, have taken the 
RVSR certification test and passed it, but a lot of the 
questions that were involved were more concerned with different 
laws, different rules, different things that weren't really 
applicable to rating the case and being able to go through the 
evidence and provide for the veteran the disabilities that they 
have and the benefits they deserve.
    Mr. Runyan. So we are walking down the issue of 
standardized tests at that point?
    Mr. Swartz. Standardized tests would probably make it a lot 
better than it is now.
    Mr. Runyan. Do you see any benefit in something I think we 
all did when we were in elementary school? For example, as you 
failed a test, this is the answer to the question you missed. 
Is there any relevance to that? This is how the process works 
out?
    Mr. Swartz. I think that would make it a lot better for 
someone to understand the areas that they may be weak in. We do 
get some feedback, but as far as the actual answer to the 
actual question, that we don't get.
    Mr. Runyan. You have no idea of what you actually failed on 
the test then?
    Mr. Swartz. All you know is what area you may have been 
weak in, but you don't know what part of the area. Now, the 
position of an RVSR or a DRO was so specific and has such a 
wide range in so many different areas, just telling somebody, 
okay, under ordering an exam, you got three wrong, doesn't 
really help that person to be able to learn the position and 
learn where their mistakes were.
    Mr. Runyan. And there is no process there for them to 
require them to have further training on what they have missed?
    Mr. Swartz. Yes, sir. The feedback system is inadequate.
    Mr. Runyan. I think a lot of what we are dealing with--I 
think as we move towards an electronic process, I think data 
collection on what is wrong is going to be a lot more 
accessible and, therefore, we'll be able to get to the issue 
much faster.
    Mr. Swartz. Sir, if I could address that, the one thing I 
would like to say is if we have the paperless claims, speaking 
as somebody who does the job, to me, it doesn't matter if that 
claim is written on parchment, written on paper, on the 
computer or carved into granite. Somebody still has to read 
that evidence. They have to diagnose what the evidence has in 
it, and they have to be able to make an accurate decision. 
Whatever form it is in, the evidence still has to be reviewed.
    Mr. Runyan. I was referring more to the metrics of tracking 
and mistakes being made. It is more accessible and at your 
fingertips a little more readily, and I think it has the 
potential to be able to head some of that off. We had a work 
credit system bill in Congress a couple of years ago that died 
in the Senate, and this may be a time to really dust that off 
and revisit that. I think, as Mr. de Planque said earlier, 
maybe it is time to take points away for not accomplishing the 
task at hand, because I think all of you kind of touched on the 
culture and how it needs to change, and I think that would be 
one step. Yes, it is an uncomfortable process for people to 
have negativity thrown at them, but it is human nature not to 
let that happen to yourself. I talk about competition all the 
time, Mr. Swartz.
    Mr. Swartz. Sir, the one thing I can say is that that is in 
place under Aspen, which is the program that is used to keep 
track of the work that we do. If we do make a mistake in our 
work, and it is caught in a review, we do get that credit 
removed. It is held against us, and we are held accountable for 
it. Once the mistake is also found, it is brought to the 
attention of the rating specialist or the DRO to make the 
correction, once it is found. So in that regard, there is 
something in place.
    In order to do 100-percent review of any of the claims 
files that are being done, you would have to double the staff. 
For every person who is doing a claim, someone else has to be 
able to review the same evidence to find out where it has gone. 
Just realistically it is not going to be able to happen unless 
we doubled staff.
    Mr. Runyan. I understand that.
    Mr. de Planque, to really change the culture, do you have 
any ideas how to really effectively, economically, fiscally 
change that culture like that? Because obviously, like you 
said, it seems that you come here year after year with the same 
issues. How do we do it without breaking the bank?
    Mr. de Planque. Well, effectively and economically and with 
the snap of the fingers, it is going to be very difficult. I 
mean, obviously things take time to change. But you have to 
commit to that, and you have to have people who are willing to 
go in and do that.
    Mr. Swartz mentioned getting more veterans in there, 
veterans who understand looking at a claims file. I recall 
seeing cases when I was at the Board of a stressor being denied 
for PTSD by saying, well, we looked up the name of your friend 
that you said died, and, yes, we confirmed they died, but they 
were in Bravo Company, and you were in Charlie Company, so you 
wouldn't have known anyone. Well, anyone who has ever been in 
an actual military unit knows that that is absolutely 
ridiculous. But people aren't going to see stuff like that.
    You can get veterans and bring them in, and there is a 
large group of unemployed veterans who I am sure could be 
trained. They know how to accomplish tasks. They know how to do 
things when there is pressure on their shoulders, to go in and 
to make life-and-death decisions and to take care of their 
fellow veterans. You look at World War II, and people talk 
about how the greatest generation came back and built this 
country. Well, maybe we have a generation of veterans who can 
come back and fix the government and get this working, get the 
system working for them, people who are going to be committed 
to understand things like that. That is a possibility.
    I don't want to create the impression that we want to use 
these errors as a rolled-up newspaper to beat people and say, 
you are very bad that you made these mistakes. I am talking 
about capturing these errors, not just from STAR review, but 
also from places like boards of appeals. When you see something 
that was done improperly at a lower level, that can be flagged 
and tracked back through the electronic system from the Appeals 
Management Center, from the courts, to take these things and 
use them as a training opportunity, use them as a way--like you 
said, if you tell somebody you have something wrong, but you 
don't tell them what they did wrong, that doesn't help that 
person. But if there is somebody who has a deficiency in 
training perhaps and doesn't know how to properly apply the 
ratings schedule for post-traumatic stress disorder, then take 
that opportunity to go back, fix it, get it better, because 
they want to do it right. I mean, the people who are there. And 
I think that is more the kind of system that we are looking at.
    Mr. Cohen. Mr. Chairman, I think you hit the nail on the 
head when you were talking about metrics, and that is the 
difference between modern business and the way the VA operates. 
We are talking about tracking a case. There is that capability 
in the business world. There should be that capability in the 
VA world to see what happens with a claim and then to provide 
the feedback that the employees need to figure out, why did the 
case get reversed? Why did it get remanded? What did you miss? 
That is the best kind of training. That is on-the-job training.
    The VA is sort of fixated on the STAR system, which is an 
internal review of looking at it and saying, oh, yeah, we got 
it right. And then they ignore the fact that if that case gets 
appealed, the Board says, no, you didn't. We are either 
granting benefits or we are remanding because you didn't 
adequately develop it. That information needs to get back to 
the people who are working in the trenches so they understand, 
rather than this arbitrary STAR system which doesn't accurately 
measure what is going on with the claims.
    Mr. Runyan. Well, I think it goes back to my statement 
about your taking your test in elementary school. What did you 
get wrong? This is where you went wrong, and this is the answer 
to the question. And that is how you design your training 
programs around it. You are not feeding people unnecessary 
information. So I thank you.
    Mr. McNerney, I recognize you for your questions.
    Mr. McNerney. Thank you, Mr. Chairman.
    I thank the panel for coming up here today.
    Mr. Manar, I was pretty depressed by listening to the stuff 
you initially said, your words about how in the last few years, 
the accuracy has plummeted, and that coincides with the build-
up of new employees, which is consistent with what Ms. Finn 
said about the need for good management, the need for training. 
These things fit together. I am not hearing anything that is 
wildly outside of expectations. It is certainly not what I want 
to hear, but there is a consistent message here.
    What I would like to do is ask Mr. Cohen, for example--I 
mean, your testimony was probably the most critical, and yet 
you said, well, Congress has tried to direct the VA and so on, 
and nothing has happened. What would be the best role, in your 
opinion, for us to play? Are there statutes that we could pass 
that would, in your opinion, force the kind of changes that are 
needed? Or are we going to sit here and play whack-a-mole 
forever?
    Mr. Cohen. There is some opportunity for legislative 
change. We have in the past raised the idea that the VA is 
ignoring their opportunity, which is in statute which allows 
them to take a private exam, which is adequate for rating 
purposes and use that to rate the claim as opposed to sending 
it out for a compensation and pension exam, which takes further 
time. Because the statute is written permissively and not in 
the form that requires them to accept the private exam, they 
don't do so in most cases and consume more time. So that is 
something that deals with the time factor.
    Another thing that Congress could do is impose deadlines 
upon the VA and say, you must decide a claim within 3 months.
    Mr. McNerney. But the deadlines are going to continue to 
pressure for time for quantity and not quality.
    Mr. Cohen. The other thing is this is the time--we have a 
very short window of opportunity before the backlog breaks the 
back of the VA and not the other way around. This is the time 
for a paradigm shift. This is a time when Congress needs to be 
thinking about why a criminal defendant is presumed to be 
innocent, but a decorated combat veteran is presumed to be a 
liar and putting in a phony claim.
    Mr. McNerney. What you are saying is all right, but it is 
not specific. I mean, you are not giving us direction.
    Mr. Cohen. Well, what I am suggesting is that there could 
be more statutory presumptions imposed for combat veterans for 
the simplest type of cases. That would free up the more 
difficult cases. The TBI cases, cases of Lyme disease, other 
types of cases are difficult cases medically and legally. These 
cases are going to take more time and are going to be difficult 
to resolve accurately. But when you have a PTSD case for 
someone who has been deployed to an area of combat, Congress 
has been trying for the longest time to get legislation passed 
to say that if you are deployed to an area of conflict, and you 
say that something happened to you, that is going to be enough. 
And if you have a diagnosis of PTSD, end of discussion on 
whether you have a service-connected condition. The VA should 
just move on to the next step and decide how bad is it.
    Mr. McNerney. Basically presumption of--say, Agent Orange, 
which is what Mr. Filner was so interested in. Let us presume 
that anyone that was in Vietnam that has the symptoms that are 
associated with Agent Orange has Agent Orange exposure and, is 
therefore, entitled to benefits. Is that kind of what you are 
getting at?
    Mr. Cohen. Presumptions will save time for the VA and allow 
the VA to work. If we have presumptions for the cases that are 
most obvious, it will save time for the VA.
    I can just tell you anecdotally, it took me 10 years to get 
a claim decided for service-connected benefits for residuals of 
hairy cell leukemia. This was before the VA decided to make it 
a presumptive condition, and the VA kept saying, well, we don't 
presume it is service-connected, and we don't care that you are 
trying to prove it directly through a doctor's statement that 
he believes it is service-connected. They wasted 10 years of 
the veteran's time and their time on that case, which they 
could have granted presumptively from the get-go.
    Mr. McNerney. Thank you.
    Mr. Swartz, do you think that moving toward IT processing 
would be a big advantage? I mean, it sounds like that is 
something that you are advocating.
    Mr. Swartz. Part of the problem that we have, especially--I 
am going to use the National Call Centers as an example. What 
the VA has is a lot of programs that they are using, but they 
are unable to talk amongst each other. If there was one 
centralized program that was not only used by the hospitals 
which plays a very important role in our ability to do our jobs 
as a rating specialist DRO, but also for people who are calling 
in.
    Now, they have the National Call Center, and I can tell you 
from personal experience, my wait time went from 6 minutes to 
23, and that was a call that I made the other day while I was 
preparing to come down here for this trip.
    Now, with computer programs that are unable to work 
together or talk together, it is very difficult to actually do 
the job when, okay, I have to go, and I have to update this 
program as it comes up, I have to update this program. Now, 
there is one that we use for what is called a statement of the 
case. God help you if you open any other program while that one 
is up, because you are going to lose all your work. It is very 
unfriendly and does not play nice with other programs. And that 
is a problem that we have with many of the IT issues that we 
have. If you work in the call center, you now have Broome 
Closet, Genesys, Variant, RightFax. Then you have the other 
programs that we already had in place, none of which talk to 
each other.
    So when you have an 80-year-old veteran who is unfamiliar 
with the process itself, it becomes very frustrating for the 
employee to try to provide any kind of real information to that 
veteran, because on the average you get 3 minutes to handle the 
call because you have to answer so many calls in so much time. 
So if you don't have the information before you, you pretty 
much give him a scripted answer that is supplied to you, and 
you finish the conversation with, ``Is there anything else I 
can help you with today?'' Well, yeah, you could answer the 
question I just called about.
    And those are some of the problems that we are having on 
the IT front. One centralized program that everybody could use 
instead of several programs that are unable to communicate and 
do nothing really but slow you down.
    Mr. McNerney. Thank you. I yield back.
    Mr. Runyan. Ms. Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman.
    And thank you to our panelists for being here today.
    I was going to ask all of you--and I will ask this question 
following up with Mr. McNerney's question--if you could each 
make one specific recommendation to us today about how we can 
help our veterans. But before I get to that--and you have 5 
minutes, so you can divide it up four ways when you get there.
    I do want to just follow up, Mr. Swartz, on IT. You talked 
about multiple systems. Is there one system that you could 
recommend that we could convert to one system?
    Mr. Swartz. Ma'am, that is something I would have to get 
back with you on. I, myself, am lucky I can work my home 
computer, let alone make any kind of recommendations like that. 
That is not my specialty. But if you like, I will get with 
AFGE, and we will see if we can provide some feedback for you.
    [The AFGE subsequently provided the following information:]

          AFGE is not able to recommend a single system that could make 
        a significant dent in the backlog or assist veterans in other 
        ways. We do not believe that any IT system can replace the 
        essential function of a VSR or RVSR thoroughly reviewing the 
        veteran's entire file. As we have said before, there is no 
        silver bullet for breaking the back of the backlog.
          Currently, claims processing personnel struggle with multiple 
        IT system that do not'' talk to each other''. VBMS shows some 
        promise in improving coordination between these multiple 
        systems. However, it does not appear that the benefits of VBMS 
        will trickle down to the backlog.
          More generally, it is too early in the development process to 
        know effective VMBS will be in this coordination role. The 
        system has not been field tested yet. We encourage the 
        Committee to closely monitor VBMS in the design and 
        implementation phases.
          Finally, with regard to VMBS, an AFGE representative made a 
        site visit to the VBMS pilot in Salt Lake City on August 26, 
        2011, and provided the following report:

             Currently the VBMS platform is in its first generation. 
        The platform will incorporate all legacy claims processing 
        platforms into a single web based system. While the web based 
        platform has potential to provide a streamlined operating 
        system for claims processing, effective utilization will be 
        dependent on employee training.
             Based on past technology advancements which have been 
        released to the field, it would be recommended that VBA begin a 
        public relations campaign which provides insight and 
        information of the upcoming release.
             Training should be extensive and validated prior to 
        utilization of the platform on a nationwide scale. To ensure 
        adequate transition into this new technology, AFGE should be 
        afforded an opportunity to have subject matter experts in the 
        Claims Assistant, Veterans Service Representative, Rating 
        Veterans Service Representative and Decision Review Officer 
        positions process through the training program prior to 
        release.
             AFGE is supportive of advancing VA's ability to address 
        the ever growing needs of our claimants, although, AFGE has 
        trepidation about the potential impact on the human capital as 
        a result of this platform. The VA cannot exchange human capital 
        for technology and believe the agency will be able to continue 
        to meet its mission.

    Ms. Buerkle. Good.
    And then I will go back to my original question. If each of 
the panelists can give us one specific recommendation on how we 
could ease the burden of the veterans and be able to process 
their claims quicker.
    Mr. Manar.
    Mr. Manar. I think I just heard you say something that is 
part of the problem, and I say that with all due respect. And 
the Chairman started off his remarks earlier in the same vein, 
and that is talking about timeliness. Let us do things quicker, 
quicker, quicker. That is the message that employees are 
hearing in the field.
    I have been in many meetings with Acting Under Secretary 
for Benefits, Mike Walcoff and Deputy Under Secretary Rubens, 
and I have seen them out in the field conducting town hall 
meetings with employees where they are talking about quality. 
This is what they are interested in. But by the time they get 
back to Washington and at the end of the day, what the 
employees are hearing--not necessarily even from their regional 
office directors, but from the first-line supervisors--is that 
it is production, production, production. ``You didn't do five 
cases a day?'' It doesn't matter that you had a foot and a half 
of material to look at today in one case or it was really 
difficult stuff. The message that is getting out is production 
and timeliness.
    Now, there are some fixes for these problems--eventually 
some of these computer solutions will help make the easier 
decisions. They have already got a couple of calculators for 
hearing loss. I mean, you plug in two numbers, numbers for both 
ears, and it tells you what the hearing loss should be, the 
evaluation for hearing loss. The same thing is true with the 
special monthly compensation calculator that has come out 
recently. The interesting thing is that the Disabled American 
Veterans 30 years ago devised a slide rule with stick figures 
on it which does the same thing that this calculator that is 
computerized today does.
    Be that as it may, they have these solutions, and they are 
finding that as they take some of these more mundane mechanical 
functions, decisions and computerize them, they are getting 
higher quality, higher consistency. They are taking the 
opportunity for errors out of the hands of employees and 
allowing them more time to work on the more difficult things 
that require their experience and judgment.
    So I think part of the problem here is that we have to 
figure out what the message is. Now, in a wonderful world, we 
want to knock down the backlog. But do we want to do it if by 
VA standards they are making 20 percent errors or, by some 
other assessments, much higher? Are we really serving veterans 
if we do that?
    Ms. Buerkle. If I could interrupt, I apologize because my 
time is rapidly----
    Mr. Manar. I am sorry.
    Ms. Buerkle. I need one suggestion from you. But I don't 
mean to say that we need to rush through this, but I do think 
that quality service to the veterans is timely service, and 
veterans should have an expectation about when their process is 
going to be claimed. I think the two go hand in hand. If a 
veteran files his process, and it is undergoing a real quality 
review, but it takes 6 months or 9 months or a year, that is a 
problem. So I think we have to put the two together. We should 
expect timeliness.
    Mr. Manar. If I may make one suggestion. Have management 
focus on continuous improvement, improving something every day. 
If they can do that, even small things, over time, they will 
change the processes to allow the employees to make better 
decisions more consistently. Thank you.
    Mr. de Planque. One thing to tag onto that, because we 
understand that process. What is going to help the veterans 
during that time--because we don't think about things from the 
perspective of who the veteran is who is waiting for that 
benefit, and the problem is that they exist in a vacuum of 
information. Yesterday was rent day. It was mortgage day. Maybe 
you have a spouse and kids who are saying, how are we going to 
pay our bills this month, and when is the money coming in from 
that, and what is going on? And you call, and you can't get any 
information, and you don't really know what is going on.
    I think when VA has communicated better--and they have 
recently done some pilots where when they sent out the letters, 
this is what is going on with your case, and they called and 
they talked to the veterans with it--those veterans feel better 
about the process, even if it is going to take a little bit 
longer. If that is communicated to them, if the veterans 
understand up front what the expectation is, if that 
expectation is managed, yes, it is going to take a little while 
to get this done because we are trying to get it right, and you 
have a complicated condition, ma'am, you know, something like 
that, I think that is going to help the veterans deal with the 
situation, because we don't want to rush people and make too 
many mistakes, but at the same time, being out there in that 
isolated vacuum of information and not knowing what is going 
on, that is the worst part for a veteran.
    Mr. Cohen. I will agree that no one suggestion will do 
something, but what was just suggested is a very important key. 
If the regional offices start calling up veterans and their 
representatives and talking to them and saying, let me 
understand what kind of a claim are you trying to put in, what 
are you looking for; and this is what we have in the claims 
file right now, do you have anything else; do you understand 
you will need this in order to win your claim; communication 
like that takes a little bit of time, but it will allow the 
people in the trenches working for the VA to get it right the 
first time, and that is what we want. So the communication is 
the most important thing.
    Ms. Buerkle. Thank you.
    Mr. Swartz.
    Mr. Swartz. I am not going to reiterate on the 
communication, because as a veteran who has waited several 
years for having my claims processed and several years for the 
remands that were done--and I am in the system, and I know how 
frustrating it is for myself--but some of the things we need to 
do is stop developing these programs that monitor the employee 
and give them programs that they could use to do the job.
    One of the other things is the accurate, meaningful 
training that the employees need. I myself, I was very 
fortunate when I came aboard VBA. I am also a registered nurse, 
and I have also spent 8 years Active Duty military, Army. I 
spent a lot of time in the infantry. I came into the program 
with two-thirds of what is necessary. I had to learn the 
specific legal issues in developing and working on claims, but 
I am one of the fortunate few.
    What we need to have is, I believe, more veterans who have 
a vested interest in the VA being successful, especially in 
management, and also a training program that gives them the 
tools they need to do the job right the first time. Thank you.
    Ms. Buerkle. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Mr. Runyan. Thank you.
    I don't have another question. I want to make one 
statement. It may sound kind of a little different, but I think 
when we look at the definition of ``production,'' I think we 
really have to redefine that, because it is kind of something, 
I think, as being new to Congress, I think we have a difficult 
time dealing with the definition of ``budget'' around here a 
lot of times, and that I think there is an obvious correlation 
there. We are losing what that word really means. I think we 
have to really return to that for the sake of on the budget and 
our country, and on the veterans end it is taking care of our 
heroes.
    Mr. McNerney, do you have any further questions?
    Ms. Buerkle.
    Gentlemen, thank you for your testimony. On behalf of the 
Subcommittee, I thank you for your testimony, and you are now 
excused.
    Mr. Runyan. At this time I would like to welcome Ms. Diana 
Rubens, Deputy Under Secretary for Field Operations, Veterans 
Benefits Administration, United States Department of Veterans 
Affairs.
    Welcome, Ms. Rubens. Your complete written statement will 
be entered into the hearing record, and you are now recognized 
for 5 minutes.

STATEMENT OF DIANA M. RUBENS, DEPUTY UNDER SECRETARY FOR FIELD 
 OPERATIONS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT 
  OF VETERANS AFFAIRS; ACCOMPANIED BY ALAN BOZEMAN, DIRECTOR, 
    VETERANS BENEFITS MANAGEMENT SYSTEM, VETERANS BENEFITS 
      ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Rubens. Mr. Chairman, thank you.
    Mr. Chairman, Members of the Subcommittee, I appreciate the 
opportunity to discuss the Veterans Benefits Administration's 
efforts to improve performance at challenged regional offices. 
I am accompanied today by Mr. Alan Bozeman, Director for the 
Veterans Benefits Management System.
    While today's hearing focuses on challenged regional 
offices, I would be remiss in not noting the many thousands of 
exceptionally hardworking and dedicated employees within VBA's 
ranks that are committed to serving veterans every day. They 
work in our most productive offices, our challenged offices, 
and everything in between doing their level best to meet the 
performance standards, both individual and office, that we set. 
They are both valued and appreciated members of the workforce 
with great pride and the will to succeed in any mission.
    We are pursuing strategic goals established by the 
Secretary 2 years ago to transform VBA into a high-performing, 
innovative, 21st Century organization that is people-centric, 
results-driven, and forward-looking. One of VA's highest goals 
is to eliminate the disability backlog by 2015, ensuring that 
all veterans receive a quality decision at the 98 percent rate, 
and taking no more than 125 days.
    The performance of all of our regional offices is evaluated 
against national and regional office-specific targets based on 
our strategic goals. These targets are set at the beginning of 
each fiscal year across the various business lines for various 
measures, including quality, timeliness, production and 
inventory.
    The Office of Field Operations and the area directors 
regularly match the facilities' achievements against its 
performance targets to include monthly dashboard reviews. 
Regional office directors and individual employees alike are 
held accountable for performance deficiencies, and if a 
regional office is not meeting performance targets, improvement 
plans for the office are put in place and closely monitored.
    The area director will engage in more frequent 
communication with an underperforming office. Written 
electronic communications, structured telephone calls, and 
increased site visits are all used to ensure progress towards 
planned targets.
    For a number of years, VBA has been pursuing a strategy 
that allocated additional resources to regional offices that 
perform at a higher level. Our strategy to recruit and expand 
operations in locations where we have demonstrated that we can 
be competitive and achieve high performance levels has been 
impacted in recent years as a result of dramatic workload 
increases and our need to rapidly and significantly increase 
staffing levels.
    This fiscal year has been particularly challenging because 
VBA has been utilizing our resource center brokering capacity 
to readjudicate previously denied claims for the newly 
established Agent Orange presumptive conditions.
    As we look at quality, STAR findings provide statistically 
valid accuracy results at both the regional office and national 
level. STAR error trends are identified and used as training 
topics to improve performance. VBA is committed to using those 
error trends and accuracy findings to improve overall quality 
and to adjust and develop employee training and curricula.
    Additionally, we are reviewing and reengineering our 
business processes in collaboration with both internal and 
external stakeholders to constantly improve our claims process 
using best practices and ideas. We are working to simplify 
those processes and reduce the burden of paperwork for our 
veterans, and streamline the process for our employees.
    The new disability benefits questionnaires are being 
specifically designed to capture medical information essential 
for timely and accurate evaluation of disability compensation 
and pension claims.
    Regional office performance is expected to improve 
significantly through the integration of the rules-based 
processing and other calculator tools designed to increase 
decision accuracy, consistency, and employee productivity.
    The Veterans Benefits Management System is meant to give 
VBA a paperless processing environment. The overarching goal of 
this long-term initiative for phase 1 was the development and 
testing of software, while ensuring integration with existing 
databases and legacy claims-processing systems. Claims 
processors at the Providence Regional Office began using this 
new software to process a limited number of original claims for 
disability compensation to validate those capabilities within 
phase 1 of VBMS.
    Phase 2 began just last month in the Salt Lake City 
regional office, building upon the efforts and information 
gathered in Providence. Phase 3 is set to begin in November of 
2011 at a site yet undetermined, and scheduled for completion 
in May of 2012.
    VBA employees in all of our regional offices are dedicated 
to delivering accurate and timely benefits decisions. We 
recognize that there is a variance in the overall performance 
of our regional offices, and we must be both vigilant in 
identifying shortcomings and aggressive in correcting them. 
VBMS and our other claims transformation initiatives are 
critical to our future success in improving the performance of 
all of our regional offices. We will continue to vigorously 
pursue business process and technology-centered improvements 
designed to break the back of the claims backlog and achieve 
our goal of processing all claims within 125 days at 98 percent 
accuracy by 2015.
    Mr. Chairman, Members of the Subcommittee, this concludes 
my remarks. Thank you again for the opportunity to testify. I 
am happy to respond to any questions.
    Mr. Runyan. Thank you, Ms. Rubens.
    [The prepared statement of Ms. Rubens appears on p. 59.]
    Mr. Runyan. At this time I will start with the first round 
of questions.
    The Inspector General noted several regional offices that 
do not perform to VBA's standards and encountered long periods 
of time where a senior management position was unfilled. What 
are you doing to ensure that these positions are filled so we 
can have the necessary oversight?
    Mr. Rubens. Yes, sir. I feel that challenge, quite frankly, 
every day. We work very closely with the Department as well as 
our own human resources community to ensure that, one, if we 
have adequate notice that there will be a departure, we post 
positions as early as possible. I will tell you that it is a 
process of evaluating many applicants from both within and 
outside VA and VBA.
    Part of our challenge when we see extended periods of 
vacancies are, quite frankly, due to our inability to get good 
quality candidates. I have a regional office position that I 
should have a certificate for today or tomorrow that we have 
now posted three separate times in an effort to find quality 
candidates. Our challenge is finding the right folks to do the 
job, because I don't think that we want to put somebody in 
there that we don't have the confidence in the person to make a 
difference for the employees and the veterans that we serve.
    Mr. Runyan. I am kind of going down that road regarding the 
80 to 85 hours of annual training all employees must receive. 
How can you really adjust their training to better correspond 
with the need of the basic employee instead of having just a 
list of training that they need? I know it is something where 
you would have to get into the weeds. I know it will probably--
like I said before, it will probably be much easier with an 
electronic system because you can find it much quicker and 
tailor your system. But is there something there that you are 
looking into so you can tailor your program a little more 
instead of just having a broad range? Because obviously, as you 
say, even finding someone, you know, a senior member, to step 
in there, they don't have the qualifications. And to be able to 
take somebody you know is capable of doing it and tailor a 
program around it, I think it has some legitimacy to it.
    Mr. Rubens. Yes, sir. I would tell you that there are a 
variety of things that we are doing as we look at not only 
training for brand new employees coming into either VBA for the 
first time or perhaps being promoted into a new position, 
working with compensation service; we are looking at how we can 
better ramp up, if you will, those brand new employees more 
quickly.
    Every year as we establish the training requirements for 
regional offices, there will be a set of requirements that we 
anticipate as a portion of that 85 hours. But there is also a 
portion of that left to the individual regional office 
discretion to ensure that if they have some unique issues that 
are not a national concern, that they can tailor those things 
at the local level.
    If, for instance, an employee, however, is having 
difficulty with performance, and they identified trends at the 
local level for training needs, they will be addressed then 
individually for that employee to ensure that if they have a 
unique gap, that we try to work with them to ensure we are 
addressing just those things to those individual employees.
    Mr. Runyan. Kind of going down that same path with the 
skill certification tests, you have taken--and I know we kind 
of touched on standardized testing, and some of that stuff is 
even necessary. Even if it is not a question, if it does relate 
to someone actually doing their job, are you able to pull that 
kind of out and tailor your training to what is really being 
missed in general? Because obviously, I mean, you look at the 
low pass rates, and it is mind-boggling sometimes to look at 
when you are in the 50 percentile of people passing a test, to 
elevate themselves within an organization.
    Mr. Rubens. My observation would be that we have begun 
implementing certification many years ago with the VSR position 
as our first position. We have since expanded that to rating 
VSRs as well as journey-level RVSRs. So we have different 
certification test in place now for the decision review 
officers and, in fact, a new certification test in place for 
our supervisors.
    As I go back and look at the outcomes for that VSR test, I 
see the increase in the scores over time. I think part of that 
is as we work together to understand where our gaps are and 
making sure that the training meets the needs of those 
employees, we are working to ensure that all of those tests are 
valid tests.
    If I may, the certification tests are definitely helped by 
the force of a contractor coming to bear. They are not building 
the questions, if you will, though. We bring together subject 
matter experts from those positions to develop a pool of those 
questions that are of the utmost importance, for instance, for 
a VSR, who has to understand the development of a claim and 
gathering the evidence as well as the promulgation. So we are 
working to ensure that when the test has been taken, the 
feedback is given to the individual employee.
    Mr. Swartz was accurate. We are not given the specific 
answers to each of the individual questions. As the tests are 
constructed around various components of a job, we will give 
them feedback on this particular type of skill set you need as 
a VSR. You missed those questions. The concern, quite frankly, 
is that it has taken us a considerable amount of time to build 
that pool of questions, and as we give employees multiple 
opportunities to take that certification test, we want to 
ensure that through the random chance, they aren't just getting 
questions that they have had before that we have, if you will, 
spoon-fed them back the answers. So we will make sure that the 
topic and scenarios and the area of training they need feedback 
on, they have gotten that direction.
    Mr. Runyan. Okay. Several weeks ago at the legislative 
hearing, you mentioned that VBA was planning on placing quality 
review reports about the VA regional offices on the Internet. I 
had about five interns try to find it on the Web the other day 
and were unable to do it. Is it there?
    Mr. Rubens. Sir, my recollection is it has been about a 
month since that hearing. We talked about the fact that, in 
fact, VBA is about to post externally the performance results 
for all of our regional offices. You wondered when that would 
be available.
    We have been engaged in discussion with the highest levels 
within the Department for final reviews. My expectation at the 
time was that it would be about 60 days before it would be out, 
and, in fact, we have had those final reviews with some 
constructive criticism in an effort to ensure that the end 
users from the outside who may not be familiar with all of the 
measures that we can understand the data that they are looking 
at, and we are working to make some final adjustments.
    We are working towards the time frame I gave you. If there 
are some things we can put out now and upgrade later to help 
ease the use, that is kind of the tack we are taking. But I 
would expect within the next 3 to 4 weeks, we will have that 
out there. I will promise to let you know when we have it 
publicly facing and send you a link.
    [The VA subsequently provided the following information, 
which was included as well in the May 3, 2011, Legislative 
Hearing record:]

          The ASPIRE Web site went live on June 30, 2011. VBA's press 
        release to announce this is available at: http://www.va.gov/
        opa/pressrel/pressrelease.cfm?id=2125.

    Mr. Runyan. Thank you very much.
    Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    And thanks for coming today to testify, Ms. Rubens.
    I was going to follow up with that question I asked Ms. 
Finn. What is the reason we are missing so many managers? Is it 
attrition? They are just moving on and leaving holes that take 
forever to fill? Is that basically what it is?
    Mr. Rubens. I would tell you, sir, that it is a combination 
of things. In some cases it is opportunities for promotion, and 
folks move on. I would like to tell you that we have some 
crystal ball that would allow us to post those jobs to fill 
behind before they are empty, but, of course, we don't have 
that crystal ball in front of us. So it won't be until a 
position is vacated that we will post for that replacement. And 
then in some instances, employees move to other positions, 
whether they are promotions or not, or retire.
    Organizationally, we have experienced a great deal of 
change in the last few years. We have about 50 percent of our 
staff which has less than 5 years of experience. We have had 
great opportunities to do a tremendous amount of hiring in the 
last few years, as you mentioned earlier, and that has created 
an ongoing opportunity, whether that is, gosh, we need more 
supervisors, or do we have more positions at the manager level. 
So it has continued to create an almost domino effect where we 
continue to find vacancies. We are working very hard to ensure 
we are attracting the right individuals to ensure that when we 
put them particularly into those senior manager positions, that 
they are going to help us be successful.
    Mr. McNerney. You know, you listed in your testimony a lot 
of things that are taking place, that are taking place under 
your management to improve the backlog situation. But we hear a 
preponderance of testimony that says we are going backwards. I 
just want to know if you believe, you know, that we are 
actually going to get there. Are we actually improving? Is the 
Secretary's goal anywhere near realistic? If it is not, is 
there a goal that we ought to be aiming that at that is 
realistic that we can reach? Where do you stand on this? That 
is a tough question. I mean, you are responsible here for that 
Department. So you have to defend that, and I understand that. 
But I would like to hear what you would say.
    Mr. Rubens. Mr. McNerney, I do believe that we have a very 
overarching plan that focuses not just on one thing. It 
includes looking at quality, and I am very cognizant of the 
comments regarding the concerns for quality.
    There are a number of things that we are doing to ensure 
that we address that. Along with the production, I will say the 
culture of an advocacy approach for veterans, I believe that 
most regional offices have exactly that. When I go in, I can't 
tell you a single office I have ever been to where the 
employees don't come to work every day trying to do the right 
thing for veterans. And I do believe that they are excited and 
interested about the initiatives that we have coming and an 
interest in ensuring that we meet the Secretary's goals. I 
can't tell you that there is anybody out there that would say, 
gosh, it is okay to have 800,000 claims pending, because that 
is just not the case.
    Mr. McNerney. Well, just a little analogy. It is great that 
we have all these employees that want to work. And I know they 
do because I have met them, and they all want to do the best 
they can. But if you look in a place like Libya, there is a 
great revolutionary force, and they all want to go out and 
fight, and they just didn't have the organization. And we need 
that. We need to make sure that we are going in the direction 
that gives us the organization.
    And I want you to believe that myself and the Chairman and 
everyone here wants to help you. We want to know what we can 
do. Is it a statute telling you to go make regulations? What is 
it that we can do that we haven't done that is going to make 
this better?
    Mr. Rubens. I would tell you that we have great control 
over many things that need to be accomplished. As we utilize 
the opportunity for legislative proposals, working with this 
Committee and others, we work to take advantage of those 
opportunities to identify areas where we can make a difference. 
We also recognize that that process can sometimes take an awful 
lot of time. So a lot of the focus that we are working from 
today is what can we do, if you will, on our own and in our own 
means.
    And you are right, the employees are out there. And at some 
point it becomes, do we have the right leadership in place? 
Once we select those leaders, are we providing them with the 
appropriate training, whether it is those first-line 
supervisors? We have had a lot of new first-line supervisors, I 
would say new to VBA and new to supervision, where we have been 
working to ensure that they have some immediate tools; that 
they are ready to help them understand how best to not only 
move from a technical position, but to leading and supervising 
people. It is a very different job. We have programs for our 
division-level managers, our Assistant Director of Development 
program, and our Senior Executive Service (SES) candidate 
program, where we are investing in leaders to ensure that we 
have folks to work with all of those employees to get the job 
done.
    Mr. McNerney. Well, again, I would like you to believe that 
we want to help you, and I would like us to believe that from 
your testimony that we are moving in the right direction.
    With that, I would yield back.
    Mr. Runyan. Thank you Mr. McNerney.
    Ms. Buerkle.
    Ms. Buerkle. Thank you, Mr. Chairman.
    Thank you to our panelist for being here today.
    I am kind of uncertain as to where to start when I read 
over the report here. There are so many issues that just are of 
great concern. Twenty-three percent of the approximate 45,000 
disability claims were processed incorrectly; 82 percent error 
rate with 100-percent disability. The VBA's failure to timely 
address these claims could result in about a $1.1 billion 
overpayment to veterans.
    Now, when you started your testimony, you mentioned that 2 
years ago you set goals for the VBA, and when this all came to 
light, do you feel like you are reaching any of those goals?
    Mr. Rubens. Ms. Buerkle, I would tell you that we know that 
at the moment we have an uphill battle in front of us with that 
much work. But I will also tell you that, for instance, one of 
the things that we know that slowed our progress over the 
course of this year was the processing of those Nehmer claims 
both at the resource centers, where we are readjudicating 
previously denied, but also at the regional offices across the 
country where they were engaged in processing Nehmer claims 
that were received after the Secretary made his announcement, 
but before the regulation became final.
    At the regional offices we had about 63,000 of those 
claims, which we put an awful lot of effort in to ensure that 
we were meeting what would be the requirements of the external 
oversight from the plaintiffs in the Nehmer suit. As we have 
done that, it has slowed our output down, and we are now in the 
regional offices nearly done with those 63,000 claims, and that 
is allowing us to begin to ensure that we are focused on 
quality, but also beginning to pick up the pace in terms of the 
output.
    At our resource centers where they are working the 
previously denied Nehmer claims, we are making great progress 
with the goal of September 30 being largely complete with those 
claims except for the most complex claims, such as where the 
veteran has passed away, and we have to ensure we have the 
right next of kin to make that payment to.
    Ms. Buerkle. I am sure you have heard the panel before you, 
and one of their suggestions that would make things better is 
communication with the veteran, a status of his claim. So even 
if it can't be processed as timely as he would like, at least 
they are hearing from the VBA, and they are understanding what 
is going on, that their claim hasn't been dropped, that someone 
didn't remember to set a calendar date so that the claim can 
back up.
    Can you address that? Is there anything in place right now 
where the veteran hears from you regarding the status of their 
claim?
    Mr. Rubens. Actually there is. Last year we implemented a 
process by which when we received a claim and we began the 
development of that claim, essentially sending the veteran what 
could often be a complex letter saying, hey, we have received 
your claim, here are the things we need. Well, we are making 
that phone call at about the 10-day mark to say, did you get 
the letter, did you understand it; and then at the end of about 
60 days after that, calling to follow up on any additional 
evidence.
    I would add to that that we recognize the helpfulness of 
making that contact with veterans, and as we build the new 
technology, part of the opportunity we are trying to build into 
that is the contact with the veteran about, hey, we have your 
claim, this is where we are in the process, to ensure that that 
communication is strengthened.
    Ms. Buerkle. Is it a standard process from regional office 
to regional office that at X number of days we reach out to the 
veteran with a phone call, and we tell him what is going on 
with his claim?
    Mr. Rubens. That was the guidance that was issued from the 
Office of Field Operations last August. It was at the 10-day 
mark and at the 60-day mark that we are making those phone 
calls.
    Ms. Buerkle. Okay. Now, just one last point, and that is in 
your testimony earlier when you were answering a question, you 
said at some point we begin to look at whether or not we have 
the correct managers, whether we have the correct staff. At 
what point--when does it become apparent to you that things 
just aren't working here?
    Mr. Rubens. I would tell you that during that monthly 
review with the area directors and as well as myself, as we 
look at performance at regional offices, if we continue to have 
a trend without one of several things, an understanding of 
perhaps what is causing it, a sense that they are taking action 
to delve deeper locally to ensure that if it is local managers 
that aren't appropriately managing their division, we will 
begin to provide the feedback to them that they are just not 
getting the job done, and that we have to first, like any 
employee that we would identify performance issues with, look 
at are there extenuating circumstance. Or is there some 
training that needs to be provided? Is there some help that we 
can provide?
    But they also come to the table with what they are going to 
do. And as the area directors engage in that more, I will say, 
consistent and close-in communication with the regional office 
about that performance, we will implement through the 
performance evaluation process appropriate steps if, in fact, 
we cannot, if you will, help them turn that ship around.
    Ms. Buerkle. Thank you, Ms. Rubens.
    Mr. Chairman, I yield back.
    Mr. Runyan. Thank you, Ms. Buerkle.
    Any other questions from any of the other Members?
    Mr. McNerney, do you have a closing statement you would 
like to present?
    Mr. McNerney. I don't really have a closing statement. I am 
a little nonplussed here. You know, I would like to say that, 
well, we can issue statutes. But the kinds of things I am 
hearing here, they are regulatory, they are things that ought 
to be coming from your office, not from Congress. So what we 
are going to have to do between the Chairman and I and the 
Members of the Committee is just make sure that we are moving 
along in the right direction one way or another. And I can tell 
you that that is my intention at this point.
    I yield back.
    Mr. Runyan. Thank you.
    Ms. Rubens, on behalf of the Subcommittee, I thank you for 
your testimony and appreciate your past cooperation with the 
Subcommittee. We welcome, as the Ranking Member said, working 
closely with you, because it is obvious that the claims 
backlog--and there are many other issues besides that 
confronting our heroes, both past and present. Thank you for 
that. Based on what we have heard today, there is no small 
amount of work to be done.
    I repeat my desire from the Subcommittee's first hearing of 
the year to work with Members on both sides of the aisle to 
ensure America's veterans receive their benefits that they have 
earned in a timely and accurate manner.
    I ask unanimous consent that all Members have 5 legislative 
days to revise and extend their remarks and include extraneous 
material. Hearing no objection, so ordered.
    I thank the Members for their attendance today, and this 
hearing is now adjourned.
    [Whereupon, at 4 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement of Hon. Jon Runyan, Chairman,
       Subcommittee on Disability Assistance and Memorial Affairs
    Good afternoon and welcome. This oversight hearing of the 
Subcommittee on Disability Assistance and Memorial Affairs will now 
come to order.
    We are here today to examine how to improve underperforming 
regional offices.
    One of the challenges facing our Nation's veterans is the current 
backlog of claims for disability benefits. As of May 31, 2011, there 
are over 809,000 claims for disability benefits pending rating at 
Department of Veterans Affairs (VA) Regional Offices.
    Of this amount, almost 60 percent have languished past VA's 
strategic target of completing claims in 125 days. The President's FY 
2012 budget projects that the average days to complete a claim will 
rise from 165 days in FY 2010 to 230 days in FY 2012.
    This data shows that while VA is producing more claims decisions 
than ever before, they are clearly not able to keep up with the demand. 
Congress is unable to truly understand the make-up of these 809,000 
claims and reasons why so many of them take so long to be adjudicated 
correctly.
    Therefore, I will soon be requesting that the VA Inspector General 
direct the Benefit Inspection Division to compile copies of the 100 
oldest claims awaiting adjudication at VA Regional Offices and conduct 
a review of these claims. I will also ask that this Subcommittee be 
provided with a detailed analysis of the type of issues that are 
claimed in these files, the average age of the claim, the average age 
of the claimant, and other characteristics of these claims such as at 
which Regional Office they were processed.
    I am hopeful that this analysis will allow the Subcommittee to 
better understand why these claims have been in the backlog as long as 
they have and how the processing of these claims might be improved.
    In addition to seeking answers by identifying trends in the types 
of cases that have lingered on long past any reasonable period for 
adjudication, this Subcommittee is looking at VA employee performance 
and the lack of consistency and quality in rating decisions between 
Regional Offices that has been noted in prior IG reports.
    We plan to attack this from several different perspectives. Today 
we will focus on the underperforming Regional Offices. In a future 
hearing I anticipate examining the training of VA employees in claims 
processing.
    As a former professional athlete, I have an understanding of and 
respect for healthy competition. It is one of many tools for measuring 
and encouraging peak performance by all. There are regional Offices 
that constantly rank in the top tier of performance metrics and 
customer satisfaction. We commend and salute those offices for 
consistently giving their very best on behalf of the veterans they are 
serving. Our veterans, who have given so much, deserve no less.
    Competitive comparison can also quickly identify chronically poor 
performers. There may be many explanations for this underperformance, 
from a lack of training to inadequate resources or even poor 
management.
    But regardless of the explanation, the failures of these offices 
are unacceptable. While there are a few bad employees that contribute 
to these mistakes, I do believe that many more are good employees 
trapped in a system that makes things difficult.
    When our Regional offices fail, those who suffer are the Veterans 
served by that office. Heroes in need should not be denied or delayed 
help, often for many years, because of the happenstance of where their 
claim was filed. This is unacceptable and must end.
    Last month, I introduced a bill intended to address this problem 
and received some very good input at the legislative hearing from the 
VA and several of the VSO's on ways to improve upon the initial ideas 
in that bill. I welcome today's witnesses to continue that discussion 
and offer their own specific recommendations on how to fix the problem 
of consistently underperforming Region Offices.
    I would now call on the Ranking Member for his opening Statement.

                                 
 Prepared Statement of Hon. Jerry McNerney, Ranking Democratic Member, 
       Subcommittee on Disability Assistance and Memorial Affairs
    Thank you, Mr. Chairman.
    The stated purpose of the hearing is to examine the VA's poorly 
performing regional offices.
    Today's hearing also continues this Subcommittee's efforts from the 
110th and 111th Congresses to analyze various elements of the 
compensation and pension claims process--to improve performance of the 
system as a whole and to ensure accurate and accountable claims 
outcomes for our veterans. It is our collective quest to vanquish VBA's 
backlog of claims and appeals, which currently exceeds one million.
    Since 2007, the VBA has added over 10,000 claims processing 
personnel and Congress has funded these requests. Yet the backlog still 
climbs. However, merely adding more people to the same broken system 
does not expedite benefits to veterans and their families. We need to 
continue to look at the system with fresh eyes to help VA with managing 
its claims processing mission.
    At the time of its enactment, the Veterans' Benefits Improvement 
Act of 2008, P.L. 110-389, was embraced by many stakeholders as a way 
forward for VA to revamp and modernize its claims processing system--to 
bring relief to those veterans, their families and survivors who were 
languishing in an antiquated system in dire need of reform.
    I am pleased that P.L. 110-389 also laid the foundation for a 
number of initiatives that VA is currently undertaking, particularly 
its Veterans Benefits Management System and Veteran Relationship 
Management Initiatives, as well as, the Business Transformation Lab in 
Providence, Rhode Island; the Claims Processing Pilot in Little Rock, 
Arkansas; and the Virtual Regional Office in nearby Baltimore, 
Maryland. It also helped with eliminating confusion regarding the PTSD 
stressor proof requirements.
    However, the need is still there to focus on comprehensive reform 
that will result in a system that reflects improved accountability, 
accuracy, quality assurance and timeliness of claims processing for our 
Veterans, their families and survivors.
    As the VA OIG recently concluded in its report after the inspection 
review of 16 VA ROs, VBA is processing 23 percent of its claims 
erroneously. To change this, the VAOIG recommended that VA needs to 
enhance policy guidance, compliance oversight, workload management, 
training and supervisory review in order to improve claims processing 
operations.
    These conclusions echo many of the provisions in P.L. 110-389 and 
the continued chorus from Congress and other stakeholders that say time 
and again that the backlog is just a symptom of the problem: the 
current system is broken and in need of a major overhaul. We need to 
focus on getting the claim right the first time.
    I look forward to hearing about how VA plans to implement these 
recommendations. While I know that VA has developed a number of 
forward-thinking pilots and laboratory initiatives, how will they help 
put VA on track to processing its compensation and pension claims in a 
virtual environment using a twenty-first Century processing platform 
and ensuring quality outcomes.
    How will it help deliver the promise to improve accuracy, 
consistency, quality and accountability of the claims processing 
system?
    However, I must caution, that with all of the irons that VA has in 
the claims processing fire: let us not confuse activity for action or 
confuse processes with progress. The Committee will continue to 
stringently conduct oversight to ensure that this confusion does not 
occur.
    I look forward to hearing from our witnesses today. Thank you, Mr. 
Chairman, and I yield back my time.

                                 
   Prepared Statement of Belinda J. Finn, Assistant Inspector General
        for Audits and Evaluations, Office of Inspector General,
                  U.S. Department of Veterans Affairs
                           EXECUTIVE SUMMARY
    The Veterans Benefits Administration (VBA) faces challenges in 
improving the accuracy and timeliness of disability claims decisions 
and maintaining efficient VARO operations. In general, based on our 
inspections of 16 VA Regional Offices (VAROs) from April 2009 through 
September 2010, we projected that VBA did not correctly process 23 
percent of approximately 45,000 disability compensation claims.
    Our claims sampling showed processing of temporary 100-percent 
disability evaluations had the highest error rate (82 percent), due to 
staff not putting reminders to schedule reexaminations in the 
electronic system. In a nationwide audit of 100-percent disability 
evaluations, we projected that VBA failure to timely address these 
claims processing deficiencies could result in about $1.1 billion in 
overpayments to veterans over the next 5 years. Errors in traumatic 
brain injury (TBI) claims processing were second highest (19 percent), 
primarily due to inadequate TBI medical examination reports on which to 
base disability claims decisions, and raters' not returning these 
inadequate reports to the hospitals for correction. We saw improved 
accuracy in processing post-traumatic stress disorder (PTSD) claims due 
to VA's relaxation of its rule regarding stressor verification. This 
change reduced PTSD claims processing errors from 13 percent to 5 
percent.
    We identified a number of problems in disability claims processing 
in need of improved management:

      Approximately 75 percent of the VAROs inspected did not 
process incoming mail according to VBA policy.
      VARO employees delayed making final competency 
determinations for approximately one-third of incompetent beneficiaries 
and did not always timely appoint fiduciaries to manage their funds.
      Seven VAROs did not always correct claims processing 
errors identified by VBA's Systematic Technical Accuracy Review 
program.
      VARO management did not always timely complete Systematic 
Analyses of Operations which are intended to identify existing or 
potential problems and propose corrective actions in VARO operations.

    Based on our inspections work for the period of April 2009 through 
September 2010, the Jackson, Mississippi, VARO had the highest level of 
overall compliance (70 percent) with VBA policy while the Anchorage, 
Alaska, and Baltimore, Maryland, VAROs had the lowest (7 percent). We 
recommended that VAROs enhance policy guidance, compliance oversight, 
workload management, training, and supervisory review to improve claims 
processing and VARO operations. VBA agreed with all of our 
recommendations for improvement.
    We will continue to look for ways to promote improvements in 
benefits delivery operations during our future VARO inspections and 
nationwide audits. For example, in FY 2012, we will begin an audit of 
VA's efforts to develop and implement the next phase of the Veterans 
Benefits Management System, which is intended to facilitate paperless 
claims processing and integrate mission critical applications.

                               __________
INTRODUCTION
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to discuss issues related to the performance of Department 
of Veterans Affairs (VA) Regional Offices (VAROs) as identified in 
reports by the Office of Inspector General (OIG). The reports include 
audits of the programs and operations of the Veterans Benefits 
Administration (VBA) as well inspections conducted in individual VAROs. 
I am accompanied by Mr. Brent Arronte, Director, Benefits Inspection 
Division, in Bay Pines, Florida.
BACKGROUND
    Delivering timely and accurate benefits and services to the 
millions of veterans who provided military service to our Nation is 
central to VA's mission. VBA, specifically the Office of Field 
Operations, is responsible for oversight of the nationwide network of 
57 regional offices that administer a range of veterans benefits 
programs, including compensation, pension, education, home loan 
guaranty, vocational rehabilitation and employment, and life insurance. 
These programs will pay out over $72 billion in claims to veterans and 
their beneficiaries in fiscal year (FY) 2012, and comprise 
approximately half of VA's total budget.
    For years, however, the disability compensation claims process has 
been the subject of concern and attention by VA leadership, Congress, 
and veteran service organizations, due in part to long wait times for 
benefits and services and the large backlog of claims pending 
decisions. VA also faces challenges improving the accuracy of 
disability claims decisions.
    As part of our oversight responsibility, we conduct inspections of 
VAROs on a 3-year cycle to examine the accuracy of claims processing 
and the management of Veterans Service Center (VSC) operational 
activities. After completion of our inspection, we issue a separate 
report to each VARO Director of the results. In their responses to our 
reports, VARO Directors have concurred with our recommendations for 
improving the operations of their specific VARO. Recently, we issued a 
summary report of the results of our inspections conducted at 16 VAROs 
from April 2009 through September 2010 (Systemic Issues Reported During 
Inspections at VA Regional Offices, May 18, 2011). This summary report 
included four recommendations. The Acting Under Secretary for Benefits 
concurred with all recommendations.
    Since September 2009, we have consistently reported the need for 
enhanced policy guidance, oversight, workload management, training, and 
supervisory review to improve the timeliness and accuracy of disability 
claims processing and VARO operations. Of those 16 VAROs inspected from 
April 2009 through September 2010, the Jackson, Mississippi, VARO (70 
percent) had the highest level of overall compliance with VBA policy in 
the areas that we inspected while the Anchorage, Alaska, and Baltimore, 
Maryland, VAROs had the lowest (7 percent).
    Our Statement today will focus on the summary report as well as 
nationwide audits of related areas such as mail processing and 
fiduciary management to promote broad improvements in VBA programs and 
operations.
DISABILITY CLAIMS PROCESSING
    Our inspections of 16 VAROs from April 2009 through September 2010 
disclosed multiple challenges that management teams face in providing 
timely and accurate disability benefits and services to veterans. We 
focused our efforts on several specific types of disability claims 
processing, including temporary 100-percent disability evaluations, 
post-traumatic stress disorder (PTSD), and traumatic brain injury 
(TBI). In total, we projected that VARO staff did not correctly process 
23 percent of approximately 45,000 claims from April 2009 through 
September 2010. We found that the Wilmington VARO had the highest 
accuracy rate (89 percent) for claims processing, whereas the San Juan 
VARO had the lowest (59 percent). However, we did not review temporary 
100 percent evaluations processing at these VAROs.\1\ If we had, these 
VAROs' accuracy rates could have been much lower, given the high number 
of errors we typically have identified in processing this type of 
claim.
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    \1\ In September 2009, we included the review of temporary 100 
percent claims to our protocols because it is a high risk area.
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Temporary 100 Percent Evaluations
    In January 2011, we projected VBA did not correctly process 
temporary 100 percent evaluations for about 27,500 (15 percent) of 
181,000 veterans (Audit of 100-Percent Disability Evaluations, January 
24, 2011). We reported that since January 1993, VBA has paid veterans a 
net $943 million without adequate medical evidence. If VBA does not 
take timely corrective action, it could overpay veterans a projected 
$1.1 billion over the next 5 years. The Under Secretary for Benefits 
agreed with our seven report recommendations for implementing training 
and internal control mechanisms to improve claims processing 
timeliness. To date, VBA has implemented two recommendations, and plans 
to implement the remaining five recommendations by September 30, 2011.
    We followed up on these audit results during our VARO inspections. 
We found VARO staff incorrectly processed 82 percent of the temporary 
100-percent disability evaluations we reviewed, resulting in 
approximately $82 million in overpayments to veterans. About 42 percent 
of the improper payments were due to human errors. These errors 
occurred when VARO staff did not input reminder notifications in VBA's 
electronic system to request reexaminations of these veterans as 
required by VBA policy.
Traumatic Brain Injury
    From April 2007 through FY 2009, based on outpatient screening of 
veterans requesting VA health care treatment following military service 
in Operation Enduring Freedom and Operation Iraqi Freedom, VA 
determined that over 66,000 could possibly have TBI. Of those 
identified through the screening, VA ultimately confirmed that 24,559 
had sustained TBI; claims processing workloads corroborated that 
amount.
    Our VARO inspections showed that staff had made errors in 19 
percent of the TBI claims we reviewed. Most of the errors related to 
either VA medical examiners providing inadequate TBI medical 
examination reports on which to base disability claims decisions, or 
Rating Veterans Service Representatives (RVSRs) not returning these 
inadequate reports to the hospitals for correction as required. RVSRs 
often did not return the inadequate reports due to pressure to meet 
productivity standards. A common scenario in TBI claims processing 
involved veterans who had TBI-residual disabilities as well as co-
existing mental conditions. When medical professionals did not ascribe 
the veterans' overlapping symptoms to one condition or the other as 
required, VARO staff could not make accurate disability determinations. 
RVSRs' difficulty in following complex TBI claims evaluation policies 
also contributed to the TBI claims processing errors.
Post-Traumatic Stress Disorder
    VARO staff did not correctly process 1,350 (8 percent) of 
approximately 16,000 PTSD claims completed from April 2009 through July 
2010. Approximately 38 percent of the errors were due to staff 
improperly verifying veterans' alleged stressful events, a requirement 
for granting service-connection for PTSD. VARO staff lacked sufficient 
experience and training to process these claims accurately. 
Additionally, some VAROs were not conducting monthly quality assurance 
reviews. For these reasons, veterans did not always receive accurate 
benefits.
    Effective July 13, 2010, VA amended its rule for processing PTSD 
disability compensation claims. The new rule allows VARO staff to rely 
on a veteran's testimony alone to establish a stressor related to fear 
of hostile military or terrorist activity, as long as the claimed 
stressor is consistent with the circumstances of service. This change 
significantly reduced processing errors associated with PTSD claims. 
Prior to the rule change, we identified a 13 percent error rate in PTSD 
claims processing. From the date of the rule change until September 
2010, however, that rate had dropped to 5 percent.
Opportunities to Improve Disability Claims Processing Timeliness
    In September 2009, as a result of a nationwide audit, we identified 
opportunities for VAROs to improve timeliness and minimize the number 
of claims with processing times exceeding 365 days (Audit of VA 
Regional Office Rating Claims Processing Exceeding 365 Days, September 
23, 2009). As of August 2008, VBA had 11,099 claims that had been 
pending rating decisions more than 365 days. On average, these claims 
were pending 448 days. A primary cause for the slow claims processing 
times was VARO workload management plans and VSC staff production 
credits that were not linked to timeliness goals, such as the national 
target to complete claims ratings within 125 days. VSC execution of the 
workload management plans was also inadequate. Although VBA has 
performance standards to monitor and evaluate VARO staff performance in 
elements such as service delivery (accuracy), claims processing, 
customer service, and workload management, those standards are tied to 
neither timeliness goals for claims processing phases nor the national 
target.
    In addition, VARO workload management plans did not adequately 
address ten inefficient VARO practices, such as improperly identifying 
delayed claims, untimely initial requests for evidence, and untimely 
follow-up on requests for evidence. These inefficient practices caused 
claims processing delays averaging between 47 and 224 days. For 
individual claims, the delays were as long as 817 days (27 months). We 
projected that the inefficient VARO workload management plans and 
practices unnecessarily delayed benefit payments totaling about $14.4 
million for 3,501 claimants an average of 8 months. This report 
contained four recommendations to establish goals and revise workload 
management policy to help improve claims processing timeliness. The 
Under Secretary for Benefits agreed with our findings and 
recommendations and VBA implemented all recommendations.
DATA INTEGRITY
    Our inspection results showed that VARO staff did not timely 
control Notices of Disagreements (NODs)--written communication from 
claimants contesting claims decisions. A NOD is the first step in the 
appeals process. VARO staff did not input NODs in VBA's electronic 
system in 7 days for 37 percent of the claims we reviewed, although 
they generally met VBA's pending timeliness goal of 145 days for NOD 
processing.
    Untimely recording of NODs in VBA's electronic system affects data 
integrity, misrepresents timeliness in NOD processing, and provides an 
inaccurate account of the total appeals inventory. Such data integrity 
issues make it difficult for VAROs and senior VBA leadership to 
accurately measure and monitor regional office performance. Further, 
VBA's National Call Centers rely upon this information to provide 
accurate customer service to veterans regarding their appeals. VARO 
Directors concurred with our recommendations to train staff to properly 
identify NODs and establish plans to ensure these disagreements are 
controlled within VBA's 7-day standard.
MAIL PROCESSING AND CLAIMS FOLDER MANAGEMENT
    Timely and efficient mail processing is key to completing claims 
processing and providing benefits and services to veterans as quickly 
as possible. In September 2009, as a result of a nationwide audit, we 
reported that VAROs needed to improve the handling, processing, and 
protection of claim-related documents, as well as meet mailroom 
security and other operational requirements (Audit of VA Regional 
Office Claim-Related Mail Processing, September 30, 2009). In FY 2008, 
VBA placed 82 percent of claims under control (i.e. entered claim 
information into the electronic application to officially establish a 
claim) in 7 days or less after receipt; however, it took an average of 
32 days to place the remaining 18 percent of claims under control. The 
Under Secretary for Benefits concurred with our findings and 
recommendations for addressing these issues. VBA implemented all 
recommendations by instituting controls and new policies to improve 
mail processing and ensure VARO staff do not improperly destroy 
applications for benefits and other official documentation.
    In September 2009, based on another nationwide audit, we reported 
that VBA had inadequate procedures in place for locating veterans' 
claims folders (Audit of VBA's Control of Veterans' Claims Folders, 
September 28, 2009). VBA managers did not track the number of lost or 
rebuilt folders, consistently enforce Control of Veterans Records 
System (COVERS) policies, and establish effective search procedures for 
missing claims folders. Misplaced claims folders can cause unnecessary 
claim processing delays, reduce the time regional office personnel have 
to spend processing claims, and place additional burdens on the 
veterans awaiting benefits.
    As of February 20, 2009, VBA had assigned about 4.2 million claims 
folders to regional offices for benefit claims processing and 
safeguarding. We projected that claims folders for an estimated 437,000 
(10 percent) veterans were misplaced. Approximately 296,000 (7 percent) 
veterans had claims folders at locations different from those shown in 
COVERS. Of these misplaced claims folders, we projected about 55 
percent were in other locations inside the regional office, and the 
remaining 45 percent were at the VA Records Management Center with no 
certainty as to why.
    We concluded that the remaining 141,000 (3 percent) veterans had 
claims folders that were lost. Most of the 141,000 lost claims folders 
were for veterans with denied claims or for deceased veterans with no 
current payments. VBA officials agreed that some of these folders were 
lost, but also Stated that many may never have existed. However, we 
discovered evidence in COVERS and the Beneficiary Identification and 
Records Locator System that the folders did exist and at one time were 
located at Federal Records Centers, the Regional Management Center, or 
regional offices. Our report included nine recommendations to improve 
tracking and accountability for veterans' claims folders. The Under 
Secretary for Benefits concurred with our findings and recommendations. 
VBA has implemented seven of the recommendations and plans to implement 
the remaining two by August 31, 2011.
    Our inspections disclosed similar findings with regard to mail 
processing and claims folder management. We found that 12 (75 percent) 
of the 16 VARO mailrooms did not always control and process mail 
according to VBA policy. This occurred because VARO management and 
staff were generally unaware of mail processing requirements, including 
accurately and timely date stamping mail received at VA facilities. 
Further, VARO workload management plans contained unclear mail 
processing procedures or first-line supervisors did not always follow 
the guidance delineated in these plans. Consequently, beneficiaries may 
not have received accurate or timely benefit payments.
    Our inspections also showed that Triage Team staff improperly 
managed claims-related mail at 10 (63 percent) of the 16 VAROs 
inspected. Triage Teams are responsible for reviewing, controlling, and 
processing or routing all incoming mail received from the VARO 
mailroom. Untimely control and processing of mail can cause delays in 
processing disability claims. Triage Team members did not timely record 
receipt and process 21 percent of the incoming mail. In addition, staff 
did not properly use COVERS to track the location of 24 percent of 
claims-related mail. At one VARO, we found 1,462 pieces of mail waiting 
to be associated with veterans' claims folders.
INFORMATION SECURITY
    Securing veterans' personal information is critical while 
processing VA benefits and services. Unauthorized release of veterans' 
personal information can result in compromised data and lost veterans' 
confidence in VA operations. In September 2009, we reported VARO staff 
had inappropriately placed some claims-related documents in shred bins 
(Audit of VA Regional Office Claim-Related Mail Processing, September 
30, 2009). Our inspections at nine VAROs also showed that VBA's policy 
for safeguarding veterans' personal information was not being followed. 
Specifically, we identified 78 instances of improper safeguarding of 
veterans' sensitive information. While VBA policy requires that 
supervisors perform routine inspections of workstations, some VAROs 
were not performing these inspections as directed. Although we found no 
evidence of improper document destruction, we did find evidence of 
improper storage of documents and other materials containing PII. We 
discontinued our review of this topic because the majority of the 
material found was of relatively low-risk, such as unredacted training 
materials, and its improper safeguarding did not seem intentional.
FIDUCIARY AND ELIGIBILITY DETERMINATIONS
    VA must consider the competency of beneficiaries in every case 
involving a mental health condition that is totally disabling or when 
evidence raises a question as to a beneficiary's mental capacity to 
manage his or her financial affairs, including VA benefits. When a 
veteran is deemed incompetent, VA appoints a fiduciary, which is a 
third party that assists in managing funds for an incompetent 
beneficiary.
    Our inspections found staff at seven VAROs unnecessarily delayed 
making final competency decisions in 54 (34 percent) of 159 cases we 
reviewed. Delays ranged from approximately 17 to 530 days. VARO 
workload management plans did not make competency determinations a 
priority or include measures for oversight of this work. As a result, 
incompetent beneficiaries received their benefits directly without 
fiduciaries in place to manage their financial resources. While the 
beneficiaries were entitled to these payments, fiduciary stewardship 
may have been needed to ensure effective funds management and the 
welfare of the beneficiaries. The risk of incompetent beneficiaries 
receiving benefit payments without fiduciaries assigned to manage those 
funds increases if staff do not complete competency determinations 
promptly.
    At the time of these inspections, VBA did not have a clear, 
measurable standard to ensure timely completion of these 
determinations. Its policy required ``immediate'' action to make a 
determination following a beneficiary's due process period. However, 
VARO managers had different interpretations of ``immediate.'' One VARO 
Director Stated the term ``immediate'' was unrealistic while four 
Veterans Service Center Managers defined ``immediate'' as a period from 
3 to 30 days. In response to our recommendation, in May 2011 the Acting 
Under Secretary for Benefits determined VBA would implement a 21-day 
standard to ensure timely completion of competency determinations 
(Systemic Issues Reported During Inspections at VA Regional Offices, 
May 18, 2011).
    In addition to the inaccuracies related to delays in processing 
competency determinations, VARO staff did not follow VBA policy when 
determining if beneficiaries were competent to handle VA funds. Staff 
incorrectly determined beneficiaries were incompetent without adequate 
medical evidence demonstrating they could not manage their affairs. 
Additionally, VAROs determined beneficiaries were incompetent without 
providing the mandatory 65-day due process period for the beneficiaries 
to provide evidence to the contrary.
    Further, in March 2011, we reported VBA improperly managed 
retroactive and one-time payments of $10,000 or greater awarded to 
incompetent beneficiaries served by appointed, professional (non-
spousal), legal custodians (Audit of Retroactive and One-Time Payments 
to Incompetent Beneficiaries, March 3, 2011). VBA did not effectively 
ensure these payments valued at $10,000 or greater were effectively 
coordinated among VBA offices, or that Fiduciary Activities completed 
required account management and estate protection actions. Fiduciary 
Activities failed to conduct at least one required account management 
or estate protection action for 72 (40 percent) of the 180 payments 
reviewed. VBA used manual notification processes, lacked policies and 
procedures to perform required program actions, and did not ensure 
sufficient management oversight. Moreover, Fiduciary Activities either 
did not provide training specific to the management of retroactive and 
one-time payments to incompetent beneficiaries, or the training was 
informal and unstructured. This report included five recommendations 
for improvements in VBA's Fiduciary Activities. The Acting Under 
Secretary for Benefits agreed with our findings and recommendations and 
provided responsive implementation plans.
QUALITY ASSURANCE AND OVERSIGHT
    In addition to OIG inspections and audits, VBA has its own 
processes for assessing the quality of its disability claims 
processing. Our assessment of VARO management controls found weaknesses 
associated with correcting errors identified by VBA's Systematic 
Technical Accuracy Review (STAR) program. Of the 16 VAROs inspected, 
seven did not follow VBA policy when correcting errors identified by 
VBA's STAR staff. VARO staff did not properly correct 11 percent of the 
errors reviewed. However, VSC management erroneously reported to STAR 
staff that all corrective actions were completed. In all instances, VSC 
management did not provide oversight to ensure correction of the errors 
identified.
    Further, VARO management did not always conduct complete Systematic 
Analyses of Operations (SAOs). SAOs provide an organized means of 
reviewing VSC operations to identify existing or potential problems and 
propose corrective actions. VBA policy requires VSCs annually perform 
SAOs, covering all aspects of claims processing, including quality, 
timeliness, and related factors. Our inspections found six (38 percent) 
of the 16 regional offices did not follow VBA policy to ensure SAOs 
were timely and complete. We determined 53 (30 percent) of 175 SAOs 
were untimely and/or incomplete. VARO management did not provide 
oversight to ensure SAOs addressed all necessary elements and 
operations of the VSC. By not completing SAOs as required by VBA 
policy, management may fail to identify existing or potential problems 
that could hamper effective delivery of benefits and services to 
veterans. We recommended VARO Directors develop plans to improve 
oversight and thereby ensure timely correction of errors identified by 
STAR staff and the completion of SAOs. The VARO Directors concurred 
with the recommendations and corrective actions are ongoing.
    We noted a correlation between VAROs producing complete and timely 
SAOs and VSC compliance with other VBA policies. We found that five 
VAROs, where managers ensured SAOs were timely and complete, were the 
most compliant in other operational activities we inspected. 
Conversely, of the six VAROs that had untimely and/or incomplete SAOs, 
five had the lowest performance in other operational activities, such 
as claims processing, mail handling, and data integrity. The manager of 
one of these VAROs considered SAOs to be of little or no value toward 
improving VARO performance. At five of the six least compliant VAROs, 
vacancies in senior management positions contributed to delays in 
completing SAOs and implementing corrective actions. These VAROs had 
Director or Veteran Service Center Manager positions vacant or filled 
with temporary staff for periods of 5 months or greater. For example, 
during the 8-month absence of the Anchorage Veterans Service Center 
Manager, that office did not have any senior leadership physically in 
place to manage and oversee operations.
    We did not provide a recommendation on this issue. However, VBA 
would benefit from conducting further analysis on improving the timely 
selection and replacement of key VARO leadership positions. We will 
continue to look at the effect of management vacancies on VARO 
operations during future reviews.
CONCLUSION
    VBA continues to face challenges in improving the accuracy and 
timeliness of disability claims decisions and maintaining efficient 
VARO operations. Our inspections and audit work repeatedly have shown 
that VAROs do not always comply with VBA's national policy and struggle 
with implementing effective workload management plans and clear and 
consistent guidance to accomplish their benefits delivery mission. Our 
inspections disclosed a wide disparity between the most and least 
compliant VAROs in the areas we reviewed. VBA's own oversight and 
quality assurance processes have not been fully effective in closing 
this gap and ensuring identification and correction of deficiencies in 
VARO operations. Prolonged vacancies in the VARO leadership needed to 
drive internal review and promote performance improvement only 
exacerbate the situation.
    Such claims processing and operational problems result in not only 
added burdens and delayed or incorrect payments to veterans, they also 
mean wasted Government funds through improper payments that VBA will 
not likely recover. While VBA has made some incremental progress 
through its own initiatives and in response to our prior report 
recommendations, more remains to be done. We will continue to look for 
ways to promote improvements in benefits delivery operations during our 
future VARO inspections and nationwide audits. We will also conduct 
work in related areas, such as an audit in FY 2012 of VA's efforts to 
develop and implement the next phase of the Veterans Benefits 
Management System, which is intended to integrate mission critical 
applications and facilitate data sharing across the Department. This 
audit will include examination of project management activities, 
architectures, and security for the system development effort.
    Mr. Chairman, this concludes my Statement. We would be pleased to 
answer any questions that you or other Members of the Subcommittee may 
have.

                                 
   Prepared Statement of Gerald T. Manar, Deputy Director, National 
    Veterans Service, Veterans of Foreign Wars of the United States
    Chairman Runyan, Ranking Member McNerney and Members of the 
Committee, thank you for this opportunity to present the views of the 
2.1 million veterans and auxiliaries of Veterans of Foreign Wars of the 
United States on quality problems within VA regional offices.
    Secretary Shinseki has committed VA to achieving a 98 percent 
quality level for disability claims by 2015. While we have grown to 
appreciate the Secretary's unrelenting focus on improving the 
Department of Veterans Affairs, especially those elements affecting 
claims processing, and we accept that VA is undergoing significant and 
lasting change, I believe we can State without fear of being proven 
wrong that the VA will not achieve this goal within the next 4 years.
    One need only examine the data to see why we arrived at this 
conclusion.
    In October 2008, VA's Statistical Technical Accuracy Review (STAR) 
report for Benefit Entitlement Accuracy showed that the national 
accuracy rate was 86 percent. This reflects 12 month cumulative data 
for 56 regional offices. Four (4) of those offices had quality in the 
70's; 15 offices had rating quality of 90 or above.
    In February 2011 (the most recent data available to us) the 
national average had fallen to 83 percent and 13 offices had quality 
results of 79 or below. Only 6 offices had rating quality of 90 or 
above.
    Quality levels in the Baltimore regional office plummeted from 84 
percent in 2008 to 65 percent today. That means that one veteran in 
three is given a decision which contains at least one material error 
affecting service-connection, evaluation or effective date.
    Poor quality is a cancer. It is incredibly frustrating to VA 
employees, nearly all of whom want to do quality work for veterans, 
their families and survivors. Poor quality has also resulted in an 
immense well of distrust and suspicion by veterans towards the VA.
    Real quality problems and this atmosphere of distrust have driven 
appeals to record levels. While national rating quality has dropped 
from 86 percent in October 2008 to 83 percent in February, 2011, 
appeals backlogs increased from 183,496 to 230,219 (25 percent).\1\
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    \1\ From February 28, 2011, to May 23, 2011, the backlog increased 
an additional 5,301 appeals. Monday Morning Workload Report, May 23, 
2011. http://www.vba.va.gov/reports/mmwr/.
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Real problems, practical solutions
    There are many reasons to explain VBA's inability to process claims 
accurately and consistently from office to office. More than poorly 
trained personnel, the main cause of these problems rests with a 
culture that has lost its focus. It is our belief, our conviction that 
most people within VBA want to do a good job. However, conditions 
beyond their individual control keep them from achieving consistently 
good work.
    We are convinced that VBA's unrelenting efforts to reduce the 
backlog, poorly trained and inexperienced managers, poor management 
systems and controls, an inability to devise and bring online effective 
IT tools and systems, and a sea of new employees and a host of other 
problems, many not of VBA's making, contribute to a breakdown of focus 
on VA's primary mission: to help veterans and their families to the 
fullest extent the law allows.
                               Management
    The VA OIG recently released a report summarizing its findings from 
reviews of 16 regional offices from April 2009 through September 
2010.\2\ In addition to quality issues, the OIG found widespread 
management failures, including absent or untimely Statistical Analyses 
of Operations (SAO's), \3\ improper mail handling, untimely 
establishment of computer controls, failure to maintain or monitor 
proper diaries to review or adjust certain awards, and a fascinating 
comparison of managerial vacancies in the five best and worst offices 
they visited.\4\
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    \2\ ``Systemic Issues Reported During Inspections at VA Regional 
Offices''. VA Office of Inspector General, 11-00510-167, May 18, 2011.
    \3\ ``SAOs provide an organized means of reviewing VSC operations 
to identify existing or potential problems and propose corrective 
actions. VBA policy requires VSCs perform SAOs annually, covering all 
aspects of claims processing, including quality, timeliness, and 
related factors.'', pg 14, ibid.
    \4\ Ibid, pg 15.
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    We believe issues such as improper mail handling, failure to 
maintain proper computer controls and diaries and similar breakdowns to 
be first and foremost an indication of ineffective or inattentive 
management. In any large organization, and some VBA offices are quite 
large enterprises, it is reasonable to assume that systems and 
processes will break down from time to time. The break down is not the 
problem; the problem rests with failing to have effective monitoring 
systems to quickly identify a developing situation and procedures in 
place to fix the problem before it creates much damage. The creating 
and maintenance of these systems is strictly a management function. 
Where they are neglected indicates a problem with management.
    SAO's are established to force local management to examine specific 
areas of their operation on a regular basis. Once per year a manager or 
a trusted subordinate is expected to conduct a review of the targeted 
function, identify problems and propose solutions.\5\ Regional office 
directors are charged with ensuring that SAO's are completed on time 
and any identified problems are corrected. Further, VA Central Office 
(VACO) routinely conducts staff visits to examine every aspect of 
regional office operations and is tasked with ensuring that local 
management is performing required activities such as reviews. That the 
OIG was able to find so many deficiencies in so many offices points to 
a serious breakdown in managerial oversight.
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    \5\ VA Manual M21-4, 5.03, pg 5-1.
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    At one time some SAO's were required quarterly or semi-annually. We 
suggest that returning to more frequent formal reviews of operations 
would help ensure that problems are identified early and corrected. 
Further, we suggest that these SAO's be included in whatever monthly or 
quarterly summary of operations to VACO which may currently be required 
of regional office directors.
    We also suggest that an independent study be conducted to determine 
how managers, from the Assistant Service Center Manager position 
through regional office Director are developed and selected for their 
positions. Years of experience in various Veterans Service Center 
positions should be examined. In addition, this study should examine 
the extent and nature of training offered to managers at all levels and 
the relative quality of such training. It would be interesting to see 
how this training differs with that offered to managers of similar 
levels of responsibility and pay in both the military and major 
corporations. Any study of managers should include other areas of 
interest as thought appropriate. The results of this study may be 
useful in identifying ways in which VBA can better identify, select and 
develop individuals to become more effective leaders within VA regional 
offices.
Rating quality and Single Signature Authority
    We believe all VA employees want to make quality decisions. That 
they fail to do so is a result of poorly constructed systems, sometimes 
inadequate training, inadequate or absent mentoring, and quality 
reviews which may be adequate to assess regional office quality but are 
inadequate to determine individual quality with any assurance.
    VA employees should be able to work within a set of systems which 
ensure that the opportunity to make mistakes is minimized. In an 
industrial setting, employers devise machines that can only be operated 
in such a way that the employee cannot put fingers and other body parts 
at risk of injury. If somehow an employee is injured, the whole process 
is reexamined to identify what must be changed so that future employees 
cannot be hurt.
    In our view, the rating decision process should be structured in 
such a way that errors are impossible in those areas where judgment is 
not a factor. That is why we are pleased to see the Compensation 
Service adopt new calculators which make purely mechanical 
computations, such as field of vision, special monthly compensation 
(SMC) and hearing loss, for the rater.
    We have been told that use of the SMC calculator has greatly 
reduced errors in that area. Development of additional tools to aid 
rating specialists will go a long way to increase accuracy and 
consistency between raters.
    In the last year VA has reviewed its training program for rating 
specialists and is introducing changes which promise to better prepare 
students for their new jobs. However, we remain concerned that new 
raters receive only limited training once they return to their home 
offices.
    Once formal training is complete, on-the-job training helps 
solidify learning, ensure proper application of the material to real 
world claims and fosters continued long term growth and development. We 
have heard far too many instances of new raters rushed into production 
with little mentoring or experience.
    Even worse, many new raters have been given single signature 
authority well short of their first anniversary on the job. Single 
signature authority means that a rater is allowed to write a rating 
without further review by a seasoned specialist. Mistakes go 
uncorrected; differences in judgment, which might benefit a veteran, 
are never explored.
    At one time ratings required the review and approval of three 
rating board members. One of the three was a medical doctor. As a 
result of court decisions, physicians were removed from the rating 
boards. Still, two trained raters were required to review and approve 
each rating.
    Single signature authority was first allowed nearly 20 years ago. 
Originally restricted to the most experienced senior raters, its use 
slowly expanded to less exceptional raters. In recent years, single 
signature authority has been given to more and more new or nearly new 
raters as the pressure to resolve an ever growing workload mounted.
    If VBA did nothing else to improve rating quality, elimination of 
single signature authority and the reinstitution of a mandatory second 
review would show immediate and significant improvement in quality. 
Just last week a VBA director disclosed that a recently trained group 
of raters in his office produced over 660 rating decisions with 85 
percent quality, an error rate better than the national rate of 83 
percent.
    It is no mystery how this group of new raters was able to achieve 
what the rest of the Nation could not. Each new rater had a mentor who 
reviewed every rating with them. Not only did the mentor ensure that 
the veteran receive a more correct rating, every identified problem was 
an opportunity for the rater to learn something new.
    This suggestion is not new. Highly placed VBA leaders have been 
reminded that second and third reviews were once required before a 
rating could be promulgated. However, their response has been that the 
second review was always pro forma; that the second reviewer blindly 
signed the rating to move the work along. While this was undoubtedly 
true in some offices and among some employees, the fact remains that 
where this process is rigorously followed, quality improves. If this 
process has no value, then perhaps VBA can explain why a large portion 
of Nehmer cases, those with potential for a significant retroactive 
award, require two signatures.\6\
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    \6\ C&P Fast Letter 10-41, pg 4. September 28, 2010.
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Veterans Benefit Management System (VBMS)
    VA management has extensively briefed veterans service 
organizations throughout the early stages of development of the VBMS. 
We have asked many questions and provided substantive feedback. It 
appears that many of our concerns are being addressed as this project 
moves forward. Recently a service officer with extensive field 
experience from the Disabled American Veterans spent a month working 
with the VBMS team. From all reports, the collaboration was very 
successful.
    From our perspective, VBMS promises to move VA into the 21 Century. 
A system like this is decades late. The lack of a comprehensive, fully 
integrated, paperless claims processing system has surely contributed 
to inefficiencies in claims processing and the backlog.
    We believe that VBMS holds great promise for the future. Once fully 
functional, it promises to allow VBA to move claims, or parts of 
claims, anywhere in the country with the touch of a button allowing 
specialists to work on individual elements separately and 
simultaneously. The system should be able to electronically capture VA 
and military health care records, import data into rules based decision 
trees and, in general, allow VA to revolutionize and improve 
development and rating decision-making.
    However, none of this will happen tomorrow. VBA is still 2 years 
away from rolling out a serviceable first iteration. We have been told 
not to expect rules based decision capability for several years after 
that. While VA's ability to move work electronically will surely 
produce immediate efficiencies, it will be years before the full 
capability of VBMS can be realized.
    It is for this reason that VBMS is not the answer. It provides some 
answers, the promise of improved processes and enhanced capabilities. 
However, until rules based decision capability is incorporated into 
VBMS, it should not have a significant impact on either quality or 
workload reduction.
Service Organizations
    Congress has recognized that properly trained veteran service 
officers can provide a vital service to veterans and their families in 
the preparation and presentation of claims within VA. With a veterans 
permission, we can review their records, help them develop their claims 
and represent them before VA and the Board of Veterans Appeals.
    However, our job is not just that of claims preparer. Our role is 
that of advocate. To that end we train our service officers in the same 
laws, regulations and policies that VA teaches to their staff. Our goal 
is to train our service officers to be as good as or better than the VA 
employees they deal with on a daily basis.
    There are two recurrent problems which frequently arise within VA 
regional offices which inhibit efforts by service organizations to help 
VA make the most correct decisions possible in disability ratings.

      VA policy provides that accredited service officers 
holding a veterans power of attorney must be given 2 business days to 
review each completed rating. That means that our service officers 
provide the very last quality check that those ratings receive before 
those decisions are promulgated. This service is provided to veterans 
and the VA for free. Other than office space, this service doesn't cost 
the government a dime.
      Why is it, then, that we regularly hear from service 
officers that they were denied the opportunity to review ratings prior 
to promulgation? The Acting Under Secretary for Benefits has Stated, 
often and loudly, that VSO's must be given those 2 days to review 
ratings. To his credit and that of his senior staff, they have 
intervened when we have alerted them to a problem at a particular 
office. Somehow, however, that policy, that message, is periodically 
ignored in the field.
      What happens when a service officer finds a problem with 
a rating? In the past, he or she would take it back to the rater, 
discuss the issue and, often, get it fixed before the decision is 
promulgated. When the rating specialist is right, the service officer 
learns something new. When the decision is not changed and the service 
officer remains convinced a problem exists, they must decide whether to 
file an appeal. Whatever happens, this simple common sense process 
allows for informal discussion and correction of problems without 
having to resort to a lengthy and resource intensive appeal.
      It is unfortunate that management in many offices forbid 
service officers from conferring with rating specialists. They are 
forced to go to a rating team coach, or, in some offices, the service 
center manager, with their concerns. All too often, these managers have 
less rating experience than the rating specialist who made the 
decision.
      While the stated objective is to protect the rater from 
irregular interruptions, hence maximizing the opportunity for doing 
more work, the reality is that the supervisor acts as a filter, and 
often not a very good one. If they agree that the rating needs 
correction, they must still go back to the rater and explain the 
problem as it was explained to them. This is a totally unnecessary 
step. What happens all too frequently is that the supervisor fails to 
take any action, forcing the service officer to appeal the decision.
      We urge VBA to restore the former practice of allowing 
service officers to meet directly with decision makers. This is an 
efficient method to resolve problems short of the appeal process.

    Both of these examples illustrate a problem with the attitude of 
management in some VA regional offices. They have come to believe that 
allowing service officers a review of ratings prior to promulgation, 
and speaking directly with a rating specialist when a problem is 
perceived, gets in the way of their production goals. Even if this were 
true, and it is not, it shows that they care more about production than 
quality.
    They are simply not interested in having ratings reviewed and 
problems corrected prior to promulgation if it means that a little less 
work is produced.
An Illustrative History
    The Committee has asked us to discuss our ideas for improving VA 
regional offices with the worst quality. We have already mentioned 
several things that can be done to improve the quality of decision-
making. We understand that adoption of some of these suggestions, 
especially the reinstatement of a second review of every rating, will 
reduce production. It has to reduce production. Every hour mentoring 
another person is an hour of lost production.
    However, if we are indeed serious about improving quality to ensure 
that veterans receive the benefits they have earned by their service, 
without either over or under payment, then changes must be made.
    What can be done to help improve those VA offices with the worst 
quality? The past offers a possible answer.
    In 1999 the Washington, DC regional office (WRO) was floundering. 
Because of its location near VA Central Office, decades of poaching the 
best and brightest employees from the WRO ensured a continuous struggle 
by the remaining workforce to make decisions with acceptable quality 
and in sufficient numbers. Leadership turned over frequently, with some 
Directors and senior managers from outside either moving sideways or 
down a once promising career path. It was not the office of choice for 
those who sought to show their talents and move up. VA internal reports 
of the time described the WRO as in ``disarray''.\7\
---------------------------------------------------------------------------
    \7\ ``VA Report Says Regional Office Is in Chaos'', Steve Vogel, 
Washington Post, April 10, 1999.
---------------------------------------------------------------------------
    Faced with a failing office and negative publicity, VBA decided to 
make changes. Senior managers were replaced. The new Service Center 
Manager had a proven track record of managing adjudication divisions in 
different regional offices. He was given the authority to recruit a 
half dozen experienced raters from around the country, using bonuses, 
and in some cases promotions, to encourage them to move to Washington. 
He established a rating training coordinator position, someone who 
could set up a training regimen and also mentor rating personnel. He 
also had authority to replace those who left with other experienced 
staff.
    WRO rating personnel underwent total retraining. Each was assigned 
a mentor and 100 percent of the work was reviewed and corrected before 
it was approved. Every case provided an opportunity for learning. 
Regular classes continued long after the retraining program was 
completed. The Compensation and Pension Service provided a staff 
physician to conduct specialized training on anatomy, physiology, 
different medical conditions and the rating schedule.
    In the end, these measures produced results. Independent reviews 
showed improving quality. Initially, production fell as time was 
devoted to retraining and mentoring; however, as employee skills and 
confidence grew, so did production. Under intense scrutiny, some 
employees left, but those who remained became better raters.\8\
---------------------------------------------------------------------------
    \8\ I would like to say that there was a happy ending to this 
story. Unfortunately, I cannot. Several years after this effort began, 
VBA decided to create the Appeals Management Center (AMC). What's 
worse, they placed it in Washington in the same building as the WRO. In 
the end, virtually every employee at the WRO in claims adjudication 
moved to the AMC. Washington's claims are now processed in Roanoke, VA.
---------------------------------------------------------------------------
    In our view, VBA should undertake similar actions at failing 
offices. Finding qualified and experienced managers and rating 
specialists who are willing to move to the affected offices will be the 
most difficult task. That and accepting that production at those 
offices will fall off for months, and may never fully recover to 
previous levels, while quality improves. But that is the vital factor: 
quality improves.
    Once VBA makes a serious commitment to improving poorly performing 
regional offices, veterans in those States will grow to understand that 
their government is serious when it tells them that ``we are here to 
help you.''
    Mr. Chairman and Members of the Committee, this concludes the VFW's 
testimony. We again thank you for including us in today's most 
important discussion and I will be happy to answer any questions you 
may have.

                                 
    Prepared Statement of Ian de Planque, Deputy Director, National 
              Legislative Commission, The American Legion
                           Executive Summary
    The American Legion shares concerns regarding underperforming 
Regional Offices. While this problem is systemic and ongoing, with 
little change to address the underlying concerns over many years, it is 
not unreasonable to believe change can occur if VA is willing to break 
the current culture of placing quantity over quality.
    The American Legion recommends the following measures to help each 
office achieve the goal of becoming a model Regional Office and 
avoiding the pitfalls of underperforming Regional Offices.

    1.  Accuracy--The VA must change the present culture that places a 
premium on quantity of claims processed and merely pays lip service to 
quality concerns. The system clogs up with unnecessary errors and this 
endless cycle of appeals and remanded claims more than any other factor 
contributes to the unconscionable backlog. VA must elevate accuracy 
rate to the same relevance as the simple number of claims processed and 
must back this up with systemic changes which illustrate this 
importance to staff at all levels. To this end, the creation of a new 
work credit system that not only credits work done, but penalizes work 
done improperly will strike a balance between speed and accuracy that 
will best serve veterans. VA must move away from present work credit 
systems that fail to distinguish between work done right and work 
simply passed on to the next level.
    2.  Efficiency--Reports from the VA Office of the Inspector General 
(VA-OIG) indicate that over 90 percent of the claims pending over 1 
year in 2008 had been delayed over half a year because of 
inefficiencies in the Regional Offices. The American Legion believes 
the simplest measure to increase efficiency of operation and best 
utilize the new electronic tools becoming available with the Veterans 
Benefits Management System (VBMS) is to add an additional experienced 
claims evaluation to the front of the claims process to better triage 
claims and where they should be directed through the system. By 
utilizing the experienced eyes of this ``point guard'' the claims could 
be directed into tracks where they could be handled more efficiently. 
Claims for presumptive disorders such as those associated with Agent 
Orange could be processed in efficient manners similar to those 
developed to deal with the influx of cases seen with the addition of 
three new presumptive disorders in 2010 and more complicated claims 
could be directed to the experienced personnel more capable of dealing 
with those claims without error.
    3.  Transparency--In order to restore trust, VA must become more 
transparent in their operations and communicate better to stakeholders 
in the community. Publishing accuracy numbers alongside the usual 
Monday Morning Workload reports would be a clear indicator that error 
rate is just as important as number of claims processed. Providing more 
information on how VA offices are meeting the standards will 
demonstrate VA's commitment to achieving their stated goals of 
achieving an end state with no claim pending over 125 days and an 
accuracy rate of 98 percent.

                               __________
    Mr. Chairman and Members of the Committee:
    The American Legion welcomes this opportunity to address the issue 
of underperforming Regional Offices (ROs) of the Department of Veterans 
Affairs (VA). For well over a decade now, The American Legion has 
conducted regular site visits as a part of a dedicated quality review 
system of the disability claims system. These visits, now entitled 
Regional Office Action Review (ROAR) visits, have enabled Legion 
personnel to see firsthand the actual operating environment in which VA 
conducts the business of adjudicating claims for disability and other 
benefits. Obviously, this firsthand knowledge provides ground truth for 
assessing the challenges VA faces and in providing analysis of the 
obstacles VA continues to stumble over to fulfill their charge to serve 
veterans.
    How do we even know what ``Poorly Performing'' means to a Regional 
Office without clear parameters? By what standard should we measure the 
performance of a Regional Office? The American Legion believes that 
accuracy should be paramount, coupled with the timeliness of delivering 
earned benefits. A model Regional Office needs to be error free and 
smooth of operation to deliver benefits to those veterans who have 
earned them on time, fairly and consistently.
    Sadly, there is little to be said addressing poorly performing 
offices of a truly groundbreaking nature. Perhaps the most tragic 
aspect of testimony such as this is the broken-record refrain of VA's 
inability to deliver benefits to deserving veterans in a timely and 
accurate manner. Congress, The American Legion, and many other voices 
have continued to ask VA why they fall short of meeting their mission 
to deliver benefits to these veterans and all are treated to the 
familiar replies. VA acknowledges errors have been made in the past, 
but insists they are working on the problem, and the next great 
management tool is going to fix all the errors of the past and present 
a rosier future to the veterans of America. The rosy future has 
stubbornly refused to arrive.
    Congress and Veterans Service Organizations such as The American 
Legion are not alone in their harsh criticisms of VA for their failure 
to meet the needs of veterans. VA's performance has fallen so far short 
that the United States Court of Appeals for the Ninth Circuit issued a 
scathing decision in the matter of Veterans for Common Sense v. 
Shinseki that charged VA with no less than violating the Constitutional 
rights of veterans. The chorus call from concerned stakeholders for VA 
to set their house in order is growing by levels of magnitude.
    Perhaps the system suffers largely from a lack of accountability 
for failure. What consequences are in store for VA officials who fail 
to address the chorus of complaints leveled at the organization by 
veterans and Congress and the rest of the public? The sad answer is 
there is little consequence that must be borne by the VA for failing to 
meet the needs of the veterans and the public. Sadly, the consequences 
of failure are felt not by VA but by the veterans they were created to 
serve.
    Recently VA Secretary Eric Shinseki set forth the admirable goal 
that by 2015 no VA disability claims would be pending over 125 days, 
and VA's accuracy rate for claims would be 98 percent. However, not 
only has VA failed to make substantial progress towards those goals in 
the past year, VA overall has fallen further behind in both categories.
    VA's backlog of cases pending over 125 days rose from just under 
180,000 claims to over 290,000 claims. Accuracy was also a casualty. 
According to a GAO report from March 2010 VA's own self reported STAR 
accuracy figures noted a drop from 86 percent accuracy to below 84 
percent accuracy. The news gets worse. According to a VA Office of the 
Inspector General report issued May 18, 2011 VA Regional Offices are 
expected to inaccurately process 23 percent of all claims, dropping 
their accuracy numbers even further to a dismal 77 percent.
    VA is moving backwards, not forwards, and what fear is being placed 
into the hearts of those responsible? VA distributed bonus payments to 
Senior Executive Employees (SES) in the Veterans' Benefits 
Administration (VBA) averaging $14,000 last year. The figure of $14,000 
is interesting, because if an indigent veteran seeking non-service-
connected pension received $14,000 for an entire year's wages they 
would be told they earned too much money to be eligible for pension. VA 
SES executives can watch over a VBA that saw the Secretary's key goals 
leap backwards for a year, making the claims process worse for 
veterans, and at the end of the year take home a bonus payment greater 
than what thousands of indigent veterans are forced to survive on for 
an entire year.
    This is not solely an issue of money. Several years ago a massive 
scandal within VA was exposed relating to the shredding of personal 
documents and evidence sent to VA by veterans. In Detroit alone, over 
14,000 documents were found waiting to be shredded improperly, 
jeopardizing legitimate benefits for veterans. The documents to be 
destroyed included original birth certificates, death certificates, 
marriage certificates and discharge documents. These documents were 
going to be destroyed, along with any hopes of receiving the disability 
benefits due to those veterans. This was not limited to one or two 
offices. This problem was found to be systemic and pervasive throughout 
the entire system. The implication was clear. VA employees were 
destroying veterans' documents, cutting corners to improve their 
numbers, and throwing disabled veterans onto the trash heap.
    Yet in the aftermath, there were no public waves of firings. VA 
expressed remorse, yet very little was publicly seen in terms of 
accountability. Perhaps worse, instead of losing jobs, jobs were 
created. Because of the shredding fiasco, each Regional Office now has 
a GS-12 level government employee tasked solely to overseeing the 
destruction of documents. If this job could truly be seen as something 
that was a real protection of veterans' personal data, perhaps there 
would be justification. However, even VA's own employees internally 
joke about ``The GS-12 who has to initial even a blank post-it note 
before you can throw it out.'' When pressed about such statements, 
under the assumption they were exaggerations, VA employees shake their 
heads and state ``Yes, we really have a GS-12 who has to initial 
everything we are going to throw out, and it even includes blank 
paper.''
    To change VA requires a commitment to fundamental cultural change 
within VA. The American Legion does not believe this to be out of the 
realm of possibility, to the contrary by a few simple yet far reaching 
actions, VA can take advantage of the new technologies available to 
them and change the culture to a system more meaningful to veterans and 
more likely to be able to address their needs. VA must move forward to 
be more accurate, to be more efficient, and to be more transparent. 
Only when VA truly commits to these goals and ceases mere lip service 
to those aims will any real change occur.
VA ACCURACY:
    The Monday Morning Workload reports posted regularly by VA on their 
Web site represent an interesting window into what publicly matters to 
VA. These reports publish raw number of claims on hand, claims decided, 
almost anything but the figures continually asked for by veterans' 
advocates, figures on accuracy. While VA continues to maintain that 
accuracy is equally important to the number of claims processed, but if 
it is then Central Office's resistance to putting these figures forward 
is something of a conundrum.
    If you listen to the words spoken in front of Congressional 
hearings by VA officials, absolutely accuracy is vitally important. 
However, if you talk to VA employees in the actual offices in the 
field, they will tell you point blank that the number one driving 
concern, the familiar refrain they are told day in and day out, is to 
move files across their desks, no matter what the cost. Somewhere there 
is a disconnect between the competing statements. Somewhere along the 
way the stakeholders are being told one thing while the office 
environment tells a different story.
    VA cannot simply give lip service to accuracy. As stated before, 
accuracy numbers are falling, not rising. VA is getting worse. Simply 
increasing the number of claims processed merely shifts the problem to 
another desk. The backlog exists not only in every Regional Office, but 
at the Board of Veterans Appeals and at the Court of Appeals for 
Veterans Claims. Both of these bodies also must deal with the crippling 
backlogs brought about by sloppy work at the lower level where quality 
is sacrificed on the altar of speed.
    Accuracy can and must be brought to equal standing with speed in 
the claims process. To begin with, VA must change the way they count 
work credit, or the message will never filter down to ground level. 
Until work done right counts more than work simply done, VA employees 
will never see that their leadership frowns upon cutting corners at the 
expense of veterans. As the system presently stands, it doesn't matter 
whether a claim is properly adjudicated, you get credit when it leaves 
your desk. With the additional power to track claims afforded by VBMS, 
VA should be able to track the eventual outcome of claims. When claims 
are found to be done in a sloppy or slipshod manner, when a Decision 
Review Officer or Veterans' Law Judge finds that the lower rater never 
bothered to consider medical evidence, or blatantly ignored supporting 
evidence in a veteran's file, the credit for completing that claim 
should be removed.
    Yes, credit is due for completing a veteran's claim, but credit 
must be taken away for error. This is not dissimilar to the workings of 
a checkbook. When work is done positively, you generate credit in the 
black, but when your work is riddled with errors and omissions, you 
deserve debits to place you in the red. If Regional Offices know their 
numbers will be adjusted in accordance with their error rates, and this 
is transparently disclosed to all stakeholders, the pressure shifts 
from simply moving files from one desk to the next and instead creates 
an environment supportive of accurately moving files on when they've 
been properly considered. There will always be a balance, to be sure, 
but such a simple change in the way work credit is counted has the 
potential to shift that balance towards accurate work and away from the 
decades old VA culture of purely numbers driven motivation.
VA EFFICIENCY
    In a September 2009 audit of VA by the Office of the Inspector 
General (VA-OIG) an important yet disturbing trend was outlined. As of 
August 2008, when VBA had 11,099 claims pending over 1 year VA-OIG 
determined that inefficient workload management in the Regional Offices 
delayed 11,063 of those claims, nearly all of them. VA-OIG went on to 
state:

          ``Inefficient VARO workload management caused avoidable 
        processing delays averaging 187 days for a projected 10,046 
        (90.5 percent) of the 11,099 rating claims.''

    Possibly the greatest single change VA could enact to improve their 
efficiency involves shifting experienced workers to the front end of 
the claims process. As the system stands now, there is little rhyme or 
reason to VA's workflow, but that could change. On the battlefield, 
triage exists to sort rapidly through the ranks of the injured to 
determine which would benefit most from immediate work. This same sort 
of triage is absent from VA's process, but need not be.
    Some claims VA must deal with, such as those for a clear cut 
presumptive illness associated with Agent Orange, a simple rating 
increase based on severity of an existing injury, or a claim in which 
all of the material needed to grant the claim have been submitted up 
front by the veteran, can be processed more quickly. With an 
experienced hand to spot these claims as they are incoming, these 
claims can be shunted to ``fast lanes'' and swiftly handled, allowing 
for more time to be spent on the more complex claims. VA needs to 
average a certain amount of time per claim to keep up with their 
inventory and ensure veterans are not getting left behind. With a 
little triage to help align the claims with the best route to servicing 
those claims, the average time for all claims can be reduced.
    VA's use of the new VBMS system can help here as well. The tracking 
potential within this system should give VA a great amount of control 
of workflow. When claims are electronic in format, the data can easily 
be shifted to the teams or rating specialists best suited to deal with 
those claims. In many training programs for service officers, new 
employees begin with simpler, one issue and straightforward claims to 
ensure they understand the overall process. As they gain experience and 
comfort with the VA system then they delve into claims of greater 
complexity. We are often reminded by VA of the complexity of 
adjudicating claims, and that it can take up to 2 years to become fully 
proficient. A good gatekeeper at the beginning of the process can 
ensure that the more inexperienced and green claims processors are 
receiving simpler claims within their skill level, and not being tossed 
into a deep end over their head with claims too complex for the newer 
employees to fairly adjudicate.
    The addition of an experienced triage point guard to direct 
workflow has the potential to transform efficiency in an extremely 
positive way for VA. Furthermore, this is not a radical systemic 
overhaul requiring massive changes on behalf of VA and taking years and 
studies to develop a plan to implement. This can be initiated with 
relative swiftness and can start having immediate impact, and The 
American Legion urges VA to consider this addition as they are already 
in the transformative process of installing VBMS in all offices. As 
these new electronic tools are installed in each office, make this 
small adjustment to the work environment come with them to truly help 
maximize the impact of the new VBMS tools.
VA TRANSPARENCY
    While Secretary Shinseki's stated goal to achieve an operational 
state for VA in which no claim is pending over 125 days and all claims 
have an accuracy rate of 98 percent is admirable, as stakeholders 
outside VA's inner workings it is difficult to track whether this 
culture is taking hold. Put quite simply, it seems apparent VA is 
tracking what is important to VA, and that is solely the number of 
claims processed by each station and the number of claims received. For 
all of VA's rhetoric about changing the culture and how important they 
view accuracy of claims, when VA publishes their Monday Morning 
Workload reports it's still just a numbers game for claims moved from 
one desk to another. Until this changes the veterans on the outside 
have to remain skeptical about any promises of culture change.
    The American Legion has called on VA many times to add tracking of 
accuracy rates for Regional Offices to the Monday Morning Workload 
reports. These reports on VA's public Web site aren't solely accessed 
by veterans' group policy experts or concerned veterans on the street, 
VA's own employees look at these reports, and in dozens of Regional 
Office review visits conducted by The American Legion a familiar 
refrain has come from the employees themselves: ``I know what my boss 
is looking at, and if error rate was important it would be on those 
reports too. It's numbers. It's how many of these claims I can move on 
by the end of the week. That's what my boss cares about.''
    Employees are motivated to perform work to meet and exceed the 
expectations of their boss. Much as we can be unaware of our non-verbal 
cues and the messages they send in social situations, we also must be 
aware of what cues we are sending institutionally. VA's institutional 
cue is quite clear. We care about the number of claims we process.
    There are swaths of data veterans would love to know about their VA 
to understand what VA is doing for them. How accurate is the Regional 
Office handling my claim? How accurate is VA when it comes to rating my 
illness? How many veterans work in my Regional Office? How successful 
is the Voc-Rehab group in that Office?
    VA regularly makes press releases regarding their agenda and how 
they're serving veterans, it's time for VA to regularly publish status 
updates on how they're doing. If VA states they are committed to 
reducing error rates, they ought to start publishing those error rates 
in a place and manner easy to find and be understood.
    When VA has discovered problems in hospital operations, such as 
sterilization issues in Florida, Georgia, St. Louis and other places, 
they embarked on an aggressive awareness campaign to let veterans know 
what they were doing to ensure these things wouldn't happen again. When 
they did happen again they again aggressively reached out to those 
veterans and tried to restore their faith. A broken claims system is 
just as devastating as a broken hospital system. Both erode public 
trust in something essential, in the belief the government is set up to 
serve you the veteran in the manner that you the veteran served the 
Nation.
    Years of obfuscation, lies, manipulation, stall tactics and similar 
ill will have taken their toll on the veteran population. There is only 
a finite amount of trust in veterans. VA has squandered much of this 
trust. In order to win it back, it's time to start being truly 
transparent. VA needs to pull back the curtains, admit to what is 
broken, admit to where they fail, and show veterans on a day-to--day 
basis how they are improving.
CONCLUSION
    It's easy to look at the challenges of the veterans' disability 
claims process in a vacuum and forget what ultimately the process is 
all about. VA is given a pass on this to a certain extent, and 
continues to fall short because to the people who work at VA, from the 
bottom to the top, there is little in terms of consequences for 
failure. The lack of consequence for failure does not extent to the 
veteran on the street however, and perhaps therein lies the greatest 
tragedy.
    We don't often think about what it means to be a veteran waiting 
for benefits, or even what it means to be a veteran applying for 
benefits. Soldiers, sailors, Marines and airmen are not people who are 
conditioned to admit something is wrong and ask for help. It's not in 
their nature to begin with. Many of these veterans have families, and 
they seek benefits to help take care of those families only when they 
can no longer exist without them.
    Dropped into a seemingly endless web of delays and denials, these 
systemic properties of the system only further exacerbate the existing 
personal doubts and poor self image of the veteran. Nobody talks about 
what it feels like to have your spouse question every day ``When is the 
VA going to give us the benefits?'' Nobody talks about how it feels 
around rent time every month when a veteran is paying their bills and 
wondering how they are going to keep for on the table for a child when 
they can't work because of what their service cost them.
    We, as America, are failing these veterans. Veterans band together 
in groups to take care of each other, as we learned in our most basic 
training, but we also cannot get by entirely on our own. As painful as 
it may be to admit, veterans need the aid of the government to get by 
at times, to compensate for the toll on our bodies that we willingly 
expended to help carry the government through the execution of its 
policies in far off lands. When our country asked, we didn't even stop 
to say 'Yes sir' we just did what we were asked. Now when we ask, we 
must navigate a labyrinth that would have thwarted Theseus himself.
    With electronic tools such as VBMS coming online VA has the 
potential to break this maze apart and actually deliver on the promise 
to veterans, but without systemic cultural change these new tools will 
only allow VA to repeat the errors of the past with greater speed. VA 
needs to take steps to be a new VA, and not simply the old VA with thin 
facade. Accuracy needs to be a top priority, or the current hamster 
wheel of wrongfully denied claims clogging the appeals process will 
prevail and the backlog will continue to grow. Efficiency needs to be 
addressed, and VA needs to shift work in smarter ways to maximize the 
advantages of the electronic system. Finally, VA must pull back the 
curtains and stop hiding behind their smokescreens of the past. If VA 
is truly proud of their record they need to show that record to the 
veterans, and if they're not proud then they need to step up, admit 
where they are failing, and show the veterans how they are working to 
make the system better. If VA cannot do these things, then the question 
remains--how much longer can they continue before the trust is 
irrevocably broken?

                                 
     Prepared Statement of Richard Paul Cohen, Executive Director,
           National Organization of Veterans' Advocates, Inc.
    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    Thank you for the opportunity to present the views of the National 
Organization of Veterans' Advocates, Inc. (``NOVA'') concerning the 
under-performing Regional Offices (``ROs'') of the Department of 
Veterans Affairs (``VA'').
    NOVA is a not-for-profit Sec. 501(c)(6) educational membership 
organization incorporated in 1993. Its primary purpose and mission is 
dedicated to train and assist attorneys and non-attorney practitioners 
who represent veterans, surviving spouses, and dependents before the 
VA, the Court of Appeals for Veterans Claims (``CAVC''), and the United 
States Court of Appeals for the Federal Circuit (``Federal Circuit'').
    NOVA has written amicus briefs on behalf of claimants before the 
CAVC, the Federal Circuit and the Supreme Court of the United States of 
America. The CAVC recognized NOVA's work on behalf of veterans when it 
awarded the Hart T. Mankin Distinguished Service Award to NOVA in 2000. 
The positions stated in this testimony have been approved by NOVA's 
Board of Directors and represent the shared experiences of NOVA's 
members as well as my own 19-year experience representing claimants 
before the VBA.
           THE ROs HAVE A LONG HISTORY OF REFRACTORY PROBLEMS
    NOVA's previous testimony, together with the June 2009 ``Veterans 
Benefits Administration Compensation and Pension Claims Development 
Cycle Study'' by Booz Allen Hamilton (``the Booz Allen report'') and 
many reports from the United States Government Accounting Office and by 
Department of Veterans Affairs Office of Inspector General have 
detailed the persistent problems of the Veterans Benefits 
Administration (``VBA''), including:

      an antiquated and insecure paper file;
      inadequately trained employees;
      ineffective supervision;
      inadequate metrics leading to inability to determine 
whether work is performed correctly;
      a work credit system which induces employees to rate 
claims which have not been properly developed;
      an institution which is more concerned with finding 
fraudulent claims than timely granting meritorious claims; and
      an institution which is so out of control that it takes 
years to promulgate needed regulations and which is incapable of 
effectively communicating policy to its employees.

    Indeed, in a recent decision, the United States Court of Appeals 
for the 9th Circuit found that the VA's dilatory adjudications of 
veterans' claims denied veterans due process and that time limits for 
adjudicating claims must be imposed by the courts. Veterans for Common 
Sense v. Shinseki, __F.3d__ (9th Cir. 2011) (No. 08-16728).
    Because the ROs are laboring under an avalanche of claims and 
employees are judged by a work credit system which rewards paper 
pushing over efficient, effective and accurate claims adjudication 
(see, Booz Allen report, p.16) the number of pending appeals continues 
to increase, thus adding to the frustrations of veterans and other 
claimants. During the past year, from May 22, 2010 to May 31, 2011, the 
VBA's Monday Morning Workload Reports show a 23 percent increase in 
pending appeals from 193,134 to 236,141. Equally startling is the fact 
that pending claims have increased by 54 percent and those claims 
pending over 125 days have increased by 126 percent. http://
www.vba.va.gov/REPORTS/mmwr/historical/2010/index.asp; http://
www.vba.va.gov/REPORTS/mmwr/index.asp.
    There is no one legislative, nor one administrative, initiative 
which can rearrange and reconstitute the VA into an efficient and 
effective claims processing organization, however, NOVA has some 
suggestions which might yield positive results.
         ALTHOUGH THE PRIOR ATTEMPT BY CONGRESS TO IMPROVE THE
  WORK CREDIT SYSTEM AND VA TRAINING AND SUPERVISION HAS NOT YIELDED 
                  RESULTS, IT SHOULD NOT BE ABANDONED
    During October 2008, Congress passed P.L. 110-389, which required, 
among other things, that the VA implement an employee certification 
exam, that the Comptroller General of the United States evaluate the 
VA's employee training program and that the VA study the effectiveness 
of the current employee work credit system and work management system, 
consider methods for improvement, and report back to Congress.
    It is apparent that these tasks have not been accomplished in over 
2\1/2\ years and they will not be completed without firm direction from 
Congress. By way of example, the VA had not issued proposed 
substitution regulations, which were also required by P.L. 110-389, 
until February 2011. This followed, and was the result of, a lawsuit 
which NOVA filed in the United States Court of Appeals for the Federal 
Circuit, to compel compliance with the Congressional directive.
    Congress was wise to pass this legislation, and enforcement should 
be pursued.
  THE VA MUST BE REQUIRED TO MEASURE AND TO REPORT OBJECTIVE ACCURACY
    Reports from the United States Court of Appeals for Veterans Claims 
show that over 70 percent of the appeals which are decided on the 
merits result in the determination that the VA's actions were not 
substantially justified. This results in punishment to the VA by an 
award of Equal Access to Justice Act fees to the veteran. http://
www.uscourts.cavc.gov/annual_report/. Similarly, in the Board of 
Veterans Appeals, almost 70 percent of the appeals are allowed or 
remanded, and when the veteran is represented by an attorney, the 
positive outcome goes up to 75 percent. http://www.bva.va.gov/
Chairman_Annual_Rpts.asp.
    In the face of this clear showing of RO and BVA accuracy of only 30 
percent, the VA continues to rely upon internal estimates showing 
accuracy of 80 percent or more.
    Congress should require the VA to include remand and reversal rates 
by the CAVC and by the BVA in the Monday Morning Workload reports and 
should further require that tracking of claims through the appeal 
process be part of the VA's employee training program. This would allow 
a true picture of accuracy and provide relevant on-the-job training.
 PRE-ADJUDICATION REVIEW AND CONFERENCES CAN IMPROVE THE VA'S ACCURACY
    Apparently, as a result of the VA's awareness that improperly 
developed claims lead to erroneous decisions and that, in the rating 
process, the most time is consumed by claim development, the VA 
continues to try different plans to generate ``fully developed claims'' 
prior to rating. Remarkably, the VA has never advocated for veterans to 
have the right to hire a lawyer, for pay, during the time that the 
claim is initially filed and developed, to assist in the claim 
development. It is equally remarkable, that the VA appears to be 
opposed to working cooperatively with the veteran and his or her 
representative to obtain the most complete claim development prior to 
adjudication.
    Therefore, 38 U.S.C. Sec. 5103(a) should be amended to require the 
VA to prepare a claim-specific pre-adjudication review of the claim 
which should state precisely what additional evidence is necessary to 
substantiate the claim. That written information should also be 
communicated, if possible, by phone, to the veteran and to the 
veteran's representative, during a pre-rating decision conference. The 
result of providing for a meaningful Veterans Claims Assistance Act 
notice conference, rather than a useless generic notice, and of working 
cooperatively with the veteran and with the veteran's representative 
will be to eliminate avoidable remands and avoidable reversals 
resulting from inadequate or hasty VA claims development. It will also 
result in some unjustifiable claims being withdrawn.
 ELIMINATION OF THE SUBSTANTIVE APPEAL CAN SAVE TIME AND SIMPLIFY THE 
                                PROCESS
    Presently, in order to place an unfavorable rating decision into 
appellate status, a veteran must file a Notice of Disagreement 
(``NOD''), with the RO, showing an intent to appeal and, after 
receiving a Statement of the Case from the RO, which in many cases 
merely restates the information contained in Rating Decision, the 
veteran must file a second document to perfect the appeal.
    It would be quicker, and in most situations would eliminate the 
possibility of the veteran becoming enmeshed in a procedural trap, to 
eliminate the second step. Thus 38 U.S.C.Sec. Sec. 7105 (a) and 7105A 
should be amended to eliminate the need for a veteran to submit a 
``substantive appeal'' or a ``formal appeal'' as is presently required 
after the NOD is filed. Instead, once a veteran submits an NOD, 60 days 
would be provided to allow for the submission of additional evidence, 
and, so long as no additional evidence is submitted, the appeal would 
be directed to the BVA for de novo review. However, in cases where the 
claimant requests a hearing or submits additional evidence, then the 
appeal will remain at the RO for a new decision, which addresses the 
additional evidence and/or argument, and either confirms the prior 
denial or grants in whole or in part the relief requested.
  CONSIDERABLE TIME AND MONEY COULD BE SAVED BY THE VA BY ELIMINATING 
                           UNNECESSARY EXAMS
    Presently, the VA will delay rating a claim until after reviewing a 
VA generated Compensation and Pension (``C&P'') exam even if there is a 
suitable private exam report in the file. Even if a veteran submits a 
complete and well-reasoned supporting medical opinion from a treating 
or examining physician, the VA's general procedure is to request yet 
another medical examination, referred to as a C&P examination. The VA 
physicians who provide these medical examinations are employed by VBA, 
which is separate and distinct from the VA physicians who provide 
medical care to veterans and are employed by the Veterans Health 
Administration (VHA). Last year, a report by the VA's Inspector General 
revealed that, although C&P exam reports are required to be returned to 
the RO within 30 days, there are times when it takes over 180 days for 
the RO to receive the exam report. ``Audit of VA's Efforts to Provide 
Timely Compensation and Pension Medical Examinations'', March 17, 2010, 
09-02135-107, p. 5. www.va.gov/oig/52/reports/2010/VAOIG-09-02135-
107.pdf.
    NOVA recommends amending 38 U.S.C. Sec. 5125 to eliminate waiting 
for those unnecessary medical exams. The title of Section 5125 should 
be amended to read ``Acceptance of Reports of VHA and Private Physician 
Examinations.'' The body of the statute should be amended to read as 
follows: ``For purposes of establishing any claim for benefits under 
chapter 11 or 15 of this title [38 USCS Sec. Sec. 1101 et seq. or 1501 
et seq.], a report of a medical examination administered by a VHA 
treating physician or a private treating or examining physician that is 
provided by a claimant in support of a claim for benefits, including a 
claim for increased benefits, under that chapter, if requested by the 
claimant, shall be accepted without a requirement for confirmation by 
an examination by a VBA physician, so long as the report is 
sufficiently complete to be adequate for the purpose of adjudicating 
such claim.'' By doing this, the VA would be able to diminish delays 
and save money by eliminating unnecessary medical exams and the 
subsequent C&P exam reports.
 MEASURES IN THE NATURE OF A PARADIGM SHIFT ARE REQUIRED TO SOLVE THE 
                              VA's BACKLOG
    In addition to the suggestions provided to eliminate unnecessary 
delays and to improve the decision-making procedure, nothing short of a 
major change will enable the VA to get control over its burgeoning 
backlog which is now over one million claims.
    The VA must change its culture to operate under the assumption that 
veterans, especially combat veterans, file meritorious claims which 
should be fully and quickly granted. Such a change in outlook would 
naturally lead to a triage system for claims management which would 
dramatically cut backlogs of initial claims and appeals.
    The creation and utilization of new presumptions of entitlement to 
benefits would eliminate the need for unnecessary and time consuming 
development of evidence regarding the incidents of military service for 
all those who were deployed to a war zone regardless of their military 
occupational specialty or place of assignment within the war zone. 
Thus, for example, anyone who was deployed to a war zone, whether 
during WWII, Korea, Vietnam, the Gulf War or the GWOT who is 
subsequently diagnosed with PTSD should have the sole inquiry, during 
the rating stage of their claim, concentrate on the severity of their 
symptoms. Anyone who is diagnosed with a medical condition while on 
active duty and who is presently being treated for that condition 
should not need to prove a medical nexus between the conditions. Also, 
veterans who are receiving Social Security Disability or Supplemental 
Security Income benefits based on conditions which are related to 
service should be presumed to be unemployable.

                                 
  Prepared Statement of James R. Swartz, Jr., Decision Review Officer,
    Cleveland Veterans Benefits Administration Regional Office, and
     President, AFGE Local 2823, American Federation of Government 
   Employees, AFL-CIO, and the AFGE National Veterans Affairs Council

Dear Chairman Runyan, Ranking Member McNerney, Members of the 
Subcommittee:

    Thank you for the opportunity to testify on behalf of the American 
Federation of Government Employees and the AFGE National VA Council 
(hereinafter ``AFGE''). AFGE is the exclusive representative of 
Department of Veterans Affairs (Department) Veterans Benefits 
Administration (VBA) employees who process disability claims.
    AFGE welcomes all opportunities to provide input into efforts to 
break the back of the backlog, and it is our view that these efforts 
cannot succeed without front line employee input. Our members work on 
every aspect of the claims process, and many AFGE members working at 
VBA are, like me, service-connected disabled veterans who have applied 
for VA benefits. Quite simply, we know best which elements of the 
claims process work, or do not work.
    We take great pride in our strong working relationship with 
veterans' service organizations (VSO) on VBA issues and other matters, 
and our longstanding support for the Independent Budget. In contrast, 
VBA continues to exclude AFGE from a meaningful role in key elements of 
the claims process including training, skills certification and 
performance measures.
    While AFGE members have been directly involved in some of the 
current VBA pilot projects, we have had minimal or no input into 
others. For example, the Subcommittee asked for our views on the 
Veterans Benefit Management System (VBMS). Other than a briefing 
earlier this year, we have had virtually no role in VBMS. The first 
phase of the VBMS pilot was implemented at the Providence RO, but only 
a handful of employees are working on it, and the Providence AFGE local 
was not given any role. We were pleased to learn that the VBMS 
contractor communicates regularly with the employees assigned to the 
pilot.
    We understand that the next phase of VBMS will take place at the 
Salt Lake City RO. We hope AFGE will have a greater role in VBMS at the 
Salt Lake City site and during all future phases of the pilot.
    As a service-connected disabled veteran, I especially appreciate 
this Subcommittee's oversight of the claims process. I also faced long 
delays in getting my claim decided. It simply is not right for a 
veteran to wait 18 months for a claims decision. Waiting 2 to 3 years 
is absolutely unacceptable.
    However, as this Subcommittee has been advised on many occasions, 
there are no quick fixes to the claims process. We share the view 
expressed by veterans' groups at an earlier hearing that VBA should 
complete the current pilot projects before starting others, such as the 
pilot proposed by H.R. 1647, that might interfere with their progress, 
hinder VBA's ability to manage its workload or have other unintended 
consequences.
    Within the next 2 years, VBA should see a reduction in the backlog. 
Many new hires will have acquired sufficient experience to increase 
their production levels. The recent surge of complex Nemer cases will 
have subsided. A number of the current pilot projects should be ready 
for a national rollout (and will no longer need to divert personnel 
from other functions.)
    We especially caution against new initiatives that would 
restructure VBA based on labels like ``underperforming'' or ``low 
performing'' ROs. These are questionable labels that should not be the 
basis for major policy changes. RO performance data varies from RO for 
many reasons, including:

      Number of new hires;
      Number of veterans filing claims at each RO;
      Experience level of managers;
      Quality of employee training;
      Whether staff is being detailed to another office (e.g. 
managers from Cleveland and other ROs have been detailed to other 
offices);
      Impact of brokering on performance data (e.g. often two 
ROs get credit for the rating of one case);
      Finally, and quite significant: How well local managers 
manipulate performance data.

    Rather than resort to new pilot projects or a major restructuring 
of VBA, AFGE urges the Subcommittee to build on current momentum by 
addressing three essential components of RO performance: training, 
quality of supervision and performance measures.
IMPROVED TRAINING WILL REDUCE THE BACKLOG
    VBA training continues to be left too much to the discretion of RO 
managers preoccupied with ``making the numbers'' at all costs. It is 
widely acknowledged that it takes at least 2 to 3 years for new hires 
to get close to ``full production'' Yet, new hires returning from 
Challenge training are not getting the on-the-job training, supervision 
and mentoring they need to reach that level. They are rushed into 
production before they receive adequate hands-on training. Also, rather 
than rotating new hires to all stations, many are kept at stations 
experience the most problems, which prevents them from being able to 
handle a full range of claims later on.
    Current employees also face widespread deficiencies with training 
provided by VBA to meet the mandatory 85 hour yearly requirement. 
Simply put, too often, 85 hours are not 85 hours. Our members 
frequently report that managers substitute fixed hours of classroom 
training on complex concepts with significantly less ``excluded time'' 
to learn this information online without any instruction.
    As a former Rating Specialist (RVSR), I can say with certainty that 
if RVSR training was nationally consistent and of good quality, 
variations in performance between ROs would greatly diminish.
    On numerous occasions, VBA has made a commitment to Congress to 
develop a cadre of national trainers teaching the same curriculum based 
on similar interpretations of law and regulations. To date, it has not 
delivered on that commitment.
    I am not aware of any performance measures that reflect the quality 
of training provided by managers or the degree of management compliance 
with the 85 hour requirement.
QUALITY SUPERVISION WILL IMPROVE ACCURACY AND TIMELINESS
    Given the growing complexity of claims coming into VBA and the 
immense pressure to rush new hires into production, it is all the more 
urgent that they receive supervision and mentoring from experienced 
managers with sufficient expertise.
    In addition to mentoring and supervision, RO managers are 
responsible for conducting quality assurance and managing the workflow 
without sacrificing accuracy. Unfortunately, many VBA managers have 
been promoted after only a few years of ``floor'' experience regardless 
of their own skill levels.
    In 2008, a unanimous Congress enacted Public Law 110-389 that 
provided for another needed reform: supervisor skills certification. 
This exam is still not in place. Like the skills certification exams 
that VSRs and RVSRs must pass, a supervisor certification exam can be a 
valuable tool for ensuring that managers know their subject matter--
especially because they are not on the floor processing claims 
themselves every day.
    As a veteran, I also am troubled by how few managers are veterans 
themselves, despite clear veterans' preference rules that apply to VBA. 
I know firsthand how veterans' status gives VBA employees a vested 
interest in making sure that a veteran gets what he or she earned, and 
in a timely fashion. In my RO, only about 5 percent of managers are 
veterans, in contrast to at least 40 percent frontline employees with 
veteran status.
FLAWED PERFORMANCE MEASURES HURT QUALITY AND PRODUCTION
    The 2008 also law mandated that VBA develop an evidence-based work 
credit system to ensure that performance measures count all work that 
goes into getting a claim processed correctly the first time, including 
full claims development. Three years later, VBA still imposes 
arbitrary, unrealistic performance measures set through local 
management discretion that reward quantity at the expense of quality. 
It is urgent that VBA finally comply with the 2008 law, and include 
front line employees in the development of these critical measures.
OTHER COMMENTS
    Is mandatory overtime cost effective? The current national 20 hour 
per month mandatory overtime requirement for all employees has been in 
place for a month. We fear the added costs of this requirement far 
outweigh the benefits. First, many ROs were already selectively using 
mandatory overtime (at a lower number of hours) to increase production. 
The new overtime requirement is imposing undue pressure on many 
employees with family commitments, and is already leading to 
resignations, shortcuts and lower workplace morale. The VBA workforce 
was already under intense pressure to make production; mandating more 
hours of work may lead to marginal returns at a great cost.
    Bonuses: We also urge the Subcommittee to address the issue of 
excessive bonuses. Managers at my RO and many others continue to 
receive large bonuses regardless of performance, at the expense of 
taxpayers, veterans and workplace morale.
    National Call Centers: AFGE urges the Subcommittee to look closely 
at the National Call Centers (NCC) and assess whether these resources 
would be better spent back at the ROs or on a centralized, automated 
tracking system for claims. The new Genesys system deprives NCC 
employees of adequate time to complete other tasks between calls and at 
the end of their shifts. They now have on average only five seconds 
(instead of fifteen) between calls. At the end of the day, they have 
less than 15 minutes to complete other work, down from 30 minutes under 
the old system. As a result, employees are pressured to take shortcuts 
and work off the clock.
    Genesys is also causing real hardships for veterans. They are on 
hold much longer. Employees are expected to work from scripts rather 
than provide individualized help. Calls longer than 6 minutes are 
discouraged and employees are pressured to keep most calls to 3 
minutes. It is simply wrong to limit an 80-year old veteran to a 3-
minute call, especially when it takes 2 minutes just to get him through 
the ID protocol!
    We also recommend a reexamination of the costs and benefits of the 
Broome Closet templates used by NCC employees to answer callers' 
questions and create correspondence. In addition to a significant error 
rate, this program creates additional steps in the process that cause 
unnecessary delays.
    Consistency Studies: VBA has been conducting interreliability 
studies in the field to test the consistency of DRO and RVSR decisions. 
AFGE supports efforts to improve national consistency, but we are 
concerned that VBA is not producing reliable data or using these 
studies to make real improvements.
    High Cost of Poor Personnel Practices: The number of labor-
management problems at ROs is skyrocketing. Rather than working with 
employees and their representatives, RO managers are threatening many 
hardworking employees with terminations and ``performance improvement 
plans.'' These wasteful actions hurt the ability of front line 
employees to do their jobs and divert dollars from direct services to 
veterans. Holding front line employees responsible for management 
failures is not going to solve the backlog. Rather, we should all be 
working together on a meaningful solution.
    Thank you again for the opportunity to share AFGE's views on this 
important issue.

                                 
     Prepared Statement of Diana M. Rubens, Deputy Under Secretary
        for Field Operations, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs
    Mr. Chairman and Members of the Subcommittee, thank you for 
providing me with this opportunity to discuss the Veterans Benefits 
Administration's (VBA) efforts to improve performance at challenged 
regional offices. I am accompanied today by Mr. Alan Bozeman, Director, 
Veterans Benefits Management System (VBMS), VBA.
    The Subcommittee has indicated special interest in learning about 
the operations of underperforming Department of Veterans Affairs (VA) 
regional offices and our efforts to improve performance to ensure 
higher quality and consistency of disability claims decisions. We will 
address these areas and also provide an update on VBA's implementation 
of recommendations made by the Office of Inspector General to improve 
regional office operations. In addition, we will update the 
Subcommittee on our progress in developing VBMS and the timeline for 
its implementation.
    While today's hearing focuses on challenged regional offices, I 
would be remiss in not noting the many thousands of exceptionally hard-
working and dedicated employees within VBA's ranks that are committed 
to serving Veterans every day. They work in our most productive 
offices, our challenged offices, and everything in between, doing their 
level-best to meet the performance standards--both individual and 
office--that we set. They are both valued and appreciated members of a 
workforce with great pride and the will to succeed in any mission.
Regional Office Performance
    Let me begin by stating that we constantly strive to find new ways 
to improve the performance of our regional offices. We are pursuing 
strategic goals established by the Secretary 2 years ago to transform 
VBA into a high-performing and innovative, 21st Century organization 
that is people-centric, results-driven, and forward-looking. One of 
VA's highest priority goals is to eliminate the disability claims 
backlog by 2015 and ensure all Veterans receive a quality decision (98 
percent accuracy rate). VA has defined the claims backlog as any claim 
pending more than 125 days
    VA is attacking the claims backlog through a focused and multi-
pronged approach. At its core, our transformational approach relies on 
three pillars: changing our culture to one that is centered on 
accountability to, and advocacy for, our Veterans; improving our 
business processes through collaboration with stakeholders and industry 
experts on best practices and ideas; and deploying powerful 21st 
Century IT solutions to simplify and improve claims processing for 
timely and accurate decisions. Our strategic initiatives seek to 
improve the quality and timeliness of benefits delivery; expand 
accessibility to VA benefits and services; increase Veterans' 
satisfaction; and improve VA internal management systems to 
successfully perform our mission.
    The performance of all of our regional offices is evaluated against 
national and regional office-specific targets that are based on our 
strategic goals. These targets are set at the beginning of fiscal year, 
across all the business lines and for a variety of measures, including 
quality, timeliness, production, and inventory. In setting targets, 
consideration is given to the previous year's performance and current 
staffing levels.
    VBA's Office of Field Operations and the Area Directors regularly 
match a facility's achievements against its performance targets, to 
include a monthly dashboard review. Several factors influence 
performance including workload, workforce experience, and staff 
turnover. VBA closely monitors regional office performance, and should 
negative performance trends develop, Area Directors require improvement 
plans from regional office directors to correct problem areas.
    Area Directors visit each regional office at least annually to 
conduct an in-person review of operations. On-site reviews of regional 
office operations are also conducted by the VBA's Compensation and 
Pension Services. In addition, monthly Statistical Technical Accuracy 
Reviews (STAR) provide a consistent and objective review of regional 
office decision quality.
    Regional office directors and individual employees alike are held 
accountable for performance deficiencies. If a regional office is not 
meeting performance targets, improvement plans for the office are put 
in place and closely monitored. The regional office director must 
identify efforts that can be taken locally to improve performance. If 
productive capacity is the issue, a regional office will frequently 
broker work to another regional office. If the deficiency is a quality 
issue, there are several options that can implemented, often in a 
complementary fashion, such as a ``Technical Assistance Team'' from the 
Compensation Service; additional training provided by the STAR staff on 
identified error trends; and training for local quality reviewers. 
Challenged regional offices will also engage an identified high-
performing ``sister'' or ``mentor'' station to share best practices and 
identify opportunities for improvement.
    Claims processing timeliness is affected by factors ranging from 
the regional office's workload management to the responsiveness of 
outside entities. VBA has established a Workload Management Training 
Program to train new supervisors in the use of reports that help in 
timely decisions on workload that can enhance office performance.
    As an improvement plan will involve any or all of the approaches 
outlined above, the Area Director will also engage in more frequent 
communication with an underperforming office. Written and electronic 
communication, structured telephone calls and site visits are all used 
to ensure progress toward the improvement plan targets.
    If the Director cannot successfully lead the regional office to 
improvement, subsequent performance action will be taken during 
performance appraisal periods.
Resource Allocation Strategy to Optimize Organizational Performance
    For a number of years, VBA has been pursuing a strategy to allocate 
additional resources to regional offices that perform at a higher 
level. This strategy was intended to increase the VBA organizational 
performance and capacity to assist regional offices experiencing 
workload challenges and performance difficulties due to unexpected 
staffing losses or workload increases. Resource Centers have been 
established at thirteen high-performing offices throughout the country, 
and claims are brokered to these centers for processing. However, our 
strategy to recruit and expand operations in locations where we have 
demonstrated that we can be competitive and achieve high performance 
levels has been impacted in recent years as a result of the dramatic 
workload increases and our need to rapidly and significantly increase 
staffing levels. In a number of cases, we have had to add resources to 
regional offices based on the availability of space in existing 
facilities rather than high performance.
    This fiscal year has been challenging because VBA has been 
utilizing our Resource Center brokering capacity to readjudicate 
previously denied claims for newly established Agent Orange presumptive 
conditions (ischemic heart disease (IHD), Parkinson's disease (PD) and 
Hairy Cell (B-Cell) leukemia (HCL)). VA must adjudicate or readjudicate 
approximately 147,000 claims for IHD, PD, or HCL filed by Nehmer class 
members (Vietnam Veterans and their survivors) and, when appropriate, 
provide retroactive benefits. Due to the complexity of readjudicating 
these claims, all Nehmer readjudication claims are being processed at 
VBA's Resource Centers. Our Resource Centers are therefore temporarily 
not available to assist in balancing claims workload across regional 
offices or support underperforming or challenged regional offices. 
There has been some capacity for brokering identified in other regional 
offices, and Areas have taken advantage of that to continue helping 
challenged offices this year.
    VA currently has 1,300 employees at Resource Centers around the 
country devoted to the readjudication of Nehmer claims. There are 
approximately another 1,800 VA employees across VA's 56 regional 
offices that are adjudicating Agent Orange claims received after 
October 13, 2009. All other regional office employees continue to 
process non-Agent Orange workload.
Higher Quality and Consistency of Disability Claims Decisions
    STAR is the component of VBA's quality assurance program that 
focuses on improving regional office claims processing accuracy. STAR 
reviews evaluate the quality of the rating decision product that VBA 
provides for Veterans. From the Veteran's perspective, there is an 
expectation that we understand the claim, evaluate it accurately and 
fairly, and provide proper compensation under the law. The purpose of 
STAR reviews is to ensure that rating decision outcomes meet these 
expectations. STAR findings provide statistically valid accuracy 
results at both the regional office and national level. STAR error 
trends are identified and used as training topics to improve 
performance.
    Training continues to be a priority to achieve our performance 
improvement goals, and is conducted using a variety of methods, 
including a monthly national Quality Call, where the Compensation 
Service's training, policy, and procedures staffs collaborate with the 
STAR staff to address national error trends identified in STAR 
assessments.
    Regional offices are provided explanations on all error calls, and 
they are required to take corrective action. On a quarterly basis, 
regional offices are required to certify to VBA headquarters the 
corrective action taken for all errors identified by STAR. The reported 
actions are validated during the oversight visits conducted by the site 
survey teams.
    VBA is committed to using the error trends and accuracy findings to 
improve overall quality. VBA uses nationwide error patterns identified 
by STAR reviews, as well as information from other components of the 
Quality Assurance Program, to adjust and develop the employee training 
curricula.
    All employees, regardless of training level, must receive 80 hours 
of instruction annually. Instructional methods may include Training 
Performance Support System (TPSS) modules, lectures, or practical 
application exercises. For intermediate and journey-level employees, 
the 80 hours must include 40 Core Technical Training Requirement (CTTR) 
hours. These involve standardized training curricula of essential 
topics and information. Employees must complete an additional 20 hours 
of training from a list of standardized topics provided by VBA. The 
final 20 hours may be used by regional offices to train on local issues 
and areas of concern. This approach ensures that new and experienced 
employees are grounded in standardized claims processing fundamentals.
    Data from STAR reviews, consistency reviews, special focus reviews, 
and regional office site visits are used to develop training for our 
new hires, as well as our intermediate and journey-level employees. 
Claims processing personnel are informed in a timely manner of errors, 
and inconsistency trends, and provided with constructive feedback to 
include instructions on how to avoid such errors in the future. The 
error trends identified in STAR reviews provide us the information we 
need to assess the effectiveness of our training programs and make 
necessary adjustments. This promotes our goal of providing accurate, 
fair, and consistent claims processing. Performance support training 
tools allied to TPSS modules continue to show high and increasing 
usage, reflecting their utility to the field. For example, the Medical 
Electronic Performance Support System provides computerized visual 
images of the various human body systems. It was developed with STAR 
review input to assist with identifying the appropriate rating codes 
associated with different body systems and to facilitate medical 
examination requests.
    Last month the Compensation STAR staff completed seven special 
training programs for select employees from each regional office 
currently responsible for performing local quality reviews. This 
training was designed to help achieve consistency between national and 
local quality reviews. Another training session is schedule in June for 
the remaining regional offices. Additionally, specialized quality 
review positions are being created in each regional office to further 
drive quality improvements.
Claims Transformation Plan
    We are reviewing and reengineering our business processes in 
collaboration with both internal and external stakeholders, including 
Veterans Service Organizations and Congress, to constantly improve our 
claims process using best practices and ideas. We're relying heavily on 
technology and infrastructure by deploying leading-edge, powerful 21st 
Century IT solutions to create a smart, paperless claims system which 
simplifies and improves claims processing for timely and accurate 
decisions the first time.
    VBA is working to simplify processes and reduce the burden of 
paperwork for our Veterans. Improvements in efficiency and customer 
service include new policies to promote the use of simple telephone 
contacts with Veterans to clear up evidence questions and add 
dependents, reducing requirements for second signatures in medical 
reports where appropriately trained practitioners are capable of 
providing health evaluations, and implementing the Fully Developed 
Claims Initiative to promptly rate claims submitted with all required 
evidence.
    New disability benefits questionnaires are being specifically 
designed to capture medical information essential for timely and 
accurate evaluation of disability compensation and pension claims. VA 
published the first set of these forms in October 2010 and dozens more 
of these forms are in development for various disabilities. The content 
of these disability benefits questionnaires is being built into VA's 
own medical information system to guide in-house examinations. Veterans 
can provide them to private doctors as an evidence guide that will 
speed their claims decisions. The result will be more timely rating 
decisions, fewer duplicated examinations, a reduced need for VA 
examinations, less time needed to evaluate examination results by 
claims processors, and a potential to improve rating accuracy.
    Regional office performance will also be significantly improved 
through the integration of rules-based processing and other calculator 
tools designed to increase decision accuracy and employee productivity. 
We are working on more than a dozen such logic-based calculators with 
VA's Office of Information and Technology to equip VA decision-makers 
with rules-based, online tools that automatically calculate evaluations 
and certain award actions. VA recently completed and deployed tools for 
cases regarding hearing loss and special monthly compensation. These 
types of calculators free up time and create efficiencies that allow 
employees to concentrate on more complex claims that require detailed 
review and analysis.
Office of Inspector General
    The Office of Inspector General (OIG) established its Benefits 
Inspection Program in March 2009 as a major initiative to help ensure 
timely and accurate delivery of Veterans' benefits and services. On May 
18, 2011, the OIG issued a report, Systemic Issues Reported During 
Inspections at VA Regional Offices, which identified issues at 16 VA 
regional offices inspected from April 2009 through September 2010. OIG 
found that VARO management teams face multiple challenges in providing 
benefits and services to Veterans. As a result of the 16 inspections, 
OIG made several recommendations to improve VARO operations. Of those 
recommendations only four remain open.
    One of OIG's recommendations was that the Acting Under Secretary 
for Benefits revise the policy on evaluating residuals of Traumatic 
Brain Injuries (TBI) and provide training to medical examiners 
conducting TBI medical examinations to ensure compliance with current 
examination requirements. VBA is collaborating with the Veterans Health 
Administration (VHA) to ensure that all compensation and pension 
examination providers are trained on TBI examinations. This initiative 
is approximately 70 percent complete; all clinicians performing TBI 
medical examinations will be trained by June 30, 2011.
    OIG also recommended that the Acting Under Secretary for Benefits 
develop a clear and measurable standard for timely completion of 
competency determinations. VBA has determined that a 21-day standard is 
sufficient for timely completion of competency determinations. This 
will be measured from the date of expiration of the notification to the 
Veteran to the date of completion. Guidance is currently being written 
for formal distribution. Notice will also be provided and reinforced to 
regional offices through regularly scheduled conference calls.
    VBA is collaborating with VHA to address the remaining two 
recommendations covered in the OIG's report. Our target for completion 
of these recommendations is June 30, 2011.
Veterans Benefits Management System (VBMS)
    VBMS is a business transformation initiative supported by 
technology to improve VBA service delivery. VBMS is currently in a 
developmental state with nationwide deployment scheduled to begin in 
calendar year 2012.
    To improve the efficiency of the claims process, VA is 
transitioning to a business model that relies less on the acquisition 
and movement of paper documents for benefits delivery. Phase 2 of VBMS 
began in November 2010 at the Providence Regional Office. The 
overarching goal of Phase 1 was the development and testing of 
software, while ensuring integration with existing databases and legacy 
claims processing systems. Additionally, Phase 1 focused on identifying 
and correcting critical defects, optimizing scanning operations and 
procedures, and developing functionality enhancements for future 
iterations.
    During the second quarter of fiscal year 2011, claims processors at 
the Providence Regional Office began using the new software to process 
a limited number of original claims for disability compensation to 
validate capabilities within VBMS. The measure of success, which was 
achieved for Phase 1, was the capability to enter claims into a 
paperless system and process the claims to completion. As of May 18, 
2011, 175 claims were established through the VBMS interface and were 
being processed in a paperless environment.
    Phase 2 began in May 2011 at the Salt Lake City Regional Office, 
building upon the efforts and information gathered in Providence. The 
Providence Regional Office will continue using VBMS to process claims 
and provide recommendations for system improvements.
    Phase 3 is scheduled to begin in November 2011, at a site yet to be 
determined. Phase 3 is scheduled for completion in May 2012. These 
successive phases validate and refine system requirements. The three 
phases will be followed by a national rollout to all regional offices, 
which is scheduled to begin in calendar year 2012.
    VBA recognizes that technology is not the sole solution for our 
claims-processing challenges; however, it is the hallmark of a forward-
looking organization. Combined with a renewed commitment and focus 
toward increasing advocacy for Veterans, the VBMS strategy combines a 
business transformation and re-engineering effort with enhanced 
technologies, giving an overarching vision for improving service 
delivery to our Nation's Veterans.
Conclusion
    VBA employees in all of our regional offices are dedicated to 
delivering accurate and timely benefits decisions. We recognize that 
there is variance in the overall performance of our regional offices, 
and we must be both vigilant in identifying shortcomings and aggressive 
in correcting them. VBMS and our other claims transformation 
initiatives are critical to our future success in improving the 
performance of all of our regional offices. We will continue to 
vigorously pursue business process and technology-centered improvements 
designed to ``break the back of the claims backlog'' and achieve our 
goal of processing all claims within 125 days with 98 percent accuracy 
by 2015.
    Mr. Chairman and Members of the Subcommittee, this concludes my 
remarks. Thank you again for the opportunity to testify. I am happy to 
respond to any questions.

                                 
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