[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]














  EXPLORING VA'S ADMINISTRATION OF INDIVIDUAL UNEMPLOYABILITY BENEFITS

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

                                HEARING

                               before the

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        WEDNESDAY, JULY 15, 2015

                               __________

                           Serial No. 114-32

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

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 
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both printed and electronic versions of the hearing record, the process 
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unintentional errors or omissions. Such occurrences are inherent in the 
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                            C O N T E N T S

                              ----------                              

                        Wednesday, July 15, 2015

                                                                   Page

Exploring VA's Administration of Individual Unemployability 
  Benefits.......................................................     1

                           OPENING STATEMENTS

Jeff Miller, Chairman............................................     1
    Prepared Statement...........................................    23
Corrine Brown, Ranking Member....................................     2

                               WITNESSES

Mr. Daniel Bertoni, Director Education, Workforce, and Income 
  Security, U.S. Government Accountability Office................     3
    Prepared Statement...........................................    25
Mr. Brandley Flohr, Senior Advisor, Compensation Service, VBA....     5
    Prepared Statement...........................................    39
Mr. Paul R. Varela, Assistant National Legislative, Director 
  Disabled American Veterans.....................................     7
    Prepared Statement...........................................    45
Mr. Ian de Planque, Legislative Director, The American Legion....     8
    Prepared Statement...........................................    54

                             FOR THE RECORD

Question for the Record..........................................    58
 
  EXPLORING VA'S ADMINISTRATION OF INDIVIDUAL UNEMPLOYABILITY BENEFITS

                              ----------                              


                        Wednesday, July 15, 2015

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 11:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[chairman of the committee] presiding.
    Present: Representatives Miller, Roe, Coffman, Wenstrup, 
Costello, Brown, Takano, Brownley, Ruiz, O'Rourke, and 
McNerney.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    The Chairman. I want to welcome our witnesses to the 
hearing this morning.
    The hearing is focused on how VA is administering 
unemployability benefits. This important benefit compensates 
disabled veterans at the 100-percent rate even though they are 
rated at less than 100 percent but, because of their service-
connected disabilities, they are unable to find or keep 
substantially gainful employability.
    In June of 2015, GAO released a report that raised concerns 
about whether VA's procedures for adjudicating IU claims are 
resulting in consistent and accurate decisions and whether 
Congress should review how VA applies the criteria used to 
determine eligibility for individual unemployability benefits.
    The cost of the IU benefit is growing at a fast pace. 
Disability compensation paid to veterans who qualify for IU 
benefits increased from $8.5 billion in 2009 to $11 billion in 
fiscal year 2013, which is a 30-percent increase. GAO estimates 
that in fiscal year 2013 the cost of the IU benefit alone was 
$5.2 billion more than if the qualifying veteran had been paid 
based on their scheduler evaluation.
    Given the growing cost, I was very disappointed to learn 
that VA has not implemented procedures to ensure that only 
veterans who are rightfully entitled to the IU benefits are 
receiving those benefits.
    To qualify for the IU benefit, veterans are required to 
report their income, yet VA stopped verifying veterans' self-
reported income in 2012. As my good friend Ms. Brown says in 
many instances, ``Let's be clear.'' We are not talking about an 
isolated problem in one or two regional offices. This is a 
systemic issue based on a decision by VBA's upper management to 
stop verifying veterans' self-reported income.
    According to GAO, VA's explanation for stopping the 
verification is that the Department planned to adopt a new 
electronic data system in fiscal year 2015, which, of course, 
is the year that we are currently in. The new system has not 
been implemented and will not be ready until next year, maybe. 
This begs the question of why did VA discontinue income checks 
before the new system was in place, and how much more time will 
lapse before VA resumes income verification.
    The GAO report also raises the question of whether VA 
should consider age as a factor when deciding if a veteran is 
eligible to receive IU benefits. According to the GAO, in 
fiscal year 2013, 180,043 IU beneficiaries were at least 65 
years old, which represents a 73-percent increase from 2009. 
GAO found that approximately half of all the new IU 
beneficiaries are age 65 and older. And even more surprising 
was that, according to GAO, 408 veterans age 90-years-old and 
older began receiving IU benefits for the first time in fiscal 
year 2013.
    Finally, this hearing will address other systemic problems 
within VA--the lack of consistency in the adjudication of 
disability claims.
    Although VA's written testimony provides a detailed 
description of its training program for IU rating specialists, 
the GAO report found that VA has not issued clear guidance to 
help rating specialists determine if a veteran is eligible for 
individual unemployability benefits. GAO also found that VA has 
neglected to establish a quality review assurance approach that 
would allow VA to ensure that IU decisions are complete, that 
they are accurate, and that they are consistent.
    I expect VA to explain in detail the steps it is taking to 
implement GAO's recommendations to improve its training 
programs and quality review procedures.
    Finally, in the recent past, each of our witnesses has 
praised VA's vocational rehabilitation and employment programs 
designed to put disabled veterans back to work. So what I don't 
understand is why an evaluation by that same program is not 
part of the process for awarding IU benefits.
    I look forward to hearing from our witnesses about VA's 
plans to fix this program and to ensure that taxpayer dollars 
are used as they were intended, to compensate veterans who are 
unable to work because of a service-connected disability.
    I now yield to my distinguished ranking member, Ms. Brown, 
for her opening statement.

    [The prepared statement of Jeff Miller appears in the 
Appendix]

       OPENING STATEMENT OF RANKING MEMBER CORRINE BROWN

    Ms. Brown. Thank you, Mr. Chairman, for having this 
hearing.
    We are here today to discuss some of our most disabled 
veterans who are receiving individual unemployability.
    I think it is important that during this hearing we not 
lose sight of what we are talking about here. We are not 
talking about costs or numbers, we are talking about people. 
Men and women who put everything on the line, were injured 
greatly, and now receiving additional funds because of an 
injury that has left them unable to work.
    Why have these costs ballooned? As the DAV notes, we have 
higher numbers of seriously disabled veterans from the wars in 
Iraq and Afghanistan, VA is completing record numbers of 
disability claims, VA's intense outreach effort to provide 
benefits to our veterans, and to the expansion of presumption 
related to Agent Orange and PTSD.
    With that said, there is still work to do. The GAO, in 
their review of the IU program, identified four areas for 
improvement. VA concurred with the GAO findings. I look forward 
to hearing from VA on their progress to complete GAO's 
recommendations.
    Again, these are some of the most vulnerable disabled 
veterans. Mr. Chairman, I look forward to working with you in a 
bipartisan spirit of our committee. And I am committed to 
ensure that our Nation adequately compensates our veterans for 
their loss in defense of this great Nation.
    I want to add a little special note here. I know every 
member of Congress experience it. I met a veteran with five 
stars, and that veteran was 10 percent. When I spoke with that 
veteran VA had been working on his particular case for over 6 
years. The veteran, couldn't get adequate information from the 
Department of Defense. Six years! I worked on his case for 2 
months, and this veteran was able to get 70 percent. That is a 
life-changing event going from 10 percent to 70 percent.
    Each Member of Congress Office receives all kind of 
casework and staff work on it, and it is most satisfying when 
Members of Congress and their staff are able to help a veteran 
receive the benefit that they deserve.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    Dr. Roe [presiding]. I thank the gentlelady for yielding.
    I ask that all members waive their opening remarks, as per 
this committee's custom.
    Joining us on our first and only panel this morning are: 
Mr. Daniel Bertoni, Director of Education, Workforce, and 
Income Security for the U.S. Government Accountability Office, 
GAO; Mr. Bradley Flohr, the Senior Advisor, Compensation 
Service, for the Veterans Benefits Administration; Mr. Paul 
Varela, the assistant national legislative director for the 
Disabled American Veterans; and Mr. Ian de Planque, the 
legislative director for the American Legion.
    Your complete written testimonies will be entered into the 
hearing record.
    Mr. Bertoni, you are recognized for 5 minutes.

                  STATEMENT OF DANIEL BERTONI

    Mr. Bertoni. Mr. Chairman, Ranking Member Brown, members of 
the committee, good morning. I am pleased to discuss our work 
on the Department of Veterans Affairs individual 
unemployability benefit, which is a supplemental benefit that 
allows veterans to be deemed totally disabled even if they 
don't meet the criteria for a 100-percent rating.
    In fiscal year 2013, over 330,000 of 3.7 million veterans 
VA-compensated for service-connected disabilities received 
individual unemployability, or IU, benefits. Moreover, over the 
last several years, the beneficiary population and program 
costs have increased steadily, especially among older veterans. 
And, in fiscal year 2013, disability payments to IU recipients 
totaled $11 billion.
    My testimony discusses age-related trends in the 
beneficiary population, VA's procedures for benefit 
decisionmaking, and various options that have been proposed for 
revising this benefit.
    In summary, the number of veterans receiving individual 
unemployability benefits is increasing and now comprises nearly 
half of all veterans whose disabilities are rated at 100 
percent. Moreover, the number of older beneficiaries, age 65 or 
older, has also steadily increased and by fiscal year 2013 
comprised over half of the beneficiary population, a 73-percent 
increase over fiscal year 2009 levels. Further, of these older 
veterans, 57,000 were 75 and older and 11,000 were 90 and 
older.
    The increase in older veterans is mostly driven by new 
beneficiaries receiving the benefit for the very first time, 
including over 13,000 veterans age 65 to 90-plus years entering 
in fiscal year 2013. For that year, we estimate that VA paid 
$5.2 billion above what veterans would have received in the 
absence of such a benefit.
    We also found that VA's decisional guidance, quality 
assurance checks, and income verification procedures do not 
ensure individual employability decisions are well-supported. 
Specifically, VA's guidance for assessing employability falls 
short in ensuring consistency, and VA rating specialists we 
interviewed frequently disagreed on key factors to consider, 
weighed the same factors differently, and had difficulty 
separating allowable from nonallowable factors in deciding IU 
claims. Such challenges create a risk that two raters could 
examine the same claim and the same evidence and reach opposite 
decisions to award or deny the claim.
    Also, as designed and implemented, VA's quality assurance 
framework primarily focuses on processing errors and does not 
ensure a comprehensive assessment of whether award or denial 
decisions are accurate, complete, and consistent.
    In addition, VA does not independently verify self-reported 
earnings information supplied by applicants and current 
beneficiaries although the agency has ready access to IRS wage 
data for this purpose. As a result, the agency risks paying 
taxpayer dollars to those who may be working in excess of 
current program earnings limits and are thus ineligible for 
these benefits.
    In our June 2015 report, we identified a number of options 
proposed by others for revising the IU eligibility requirements 
and the benefits structure. More specifically, several options 
proposed changes such as imposing age limits, lowering the 
disability rating requirement, or increasing income thresholds, 
while another option would lower but not immediately eliminate 
benefit payments as beneficiaries earn more income beyond 
program limits.
    Based on our discussions with various experts and 
stakeholders, we identified a range of strengths and challenges 
associated with each, such as improved beneficiary targeting 
and reduced benefit outlays in some instances and potential 
additional administrative costs and beneficiary equity concerns 
for others.
    VA is currently at a juncture where it is revising its 
complex, multifaceted disability compensation programs. 
Concurrent with this effort, VA has the opportunity during its 
deliberations to benefit from the attention that the IU benefit 
has received from various experts. Accordingly, these proposed 
options and the potential strengths and challenges they present 
warrant thoughtful consideration in any broader benefit 
refinement analyses and efforts to improve IU benefit design 
and eligibility criteria going forward.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions that you or other members of the committee 
may have. Thank you.

    [The prepared statement of Daniel Bertoni appears in the 
Appendix]

    Dr. Roe. Thank you, Mr. Bertoni.
    Mr. Flohr, you are now recognized for 5 minutes.

                   STATEMENT OF BRADLEY FLOHR

    Mr. Flohr. Mr. Chairman, Ranking Member Brown, and members 
of the committee, thank you for the opportunity to review with 
you the issue of individual unemployability.
    I will discuss with you what IU is, the criteria and 
standards used to determine eligibility, VA's quality assurance 
and training programs, and VA's process to verify earnings and 
employment information.
    IU is the regulatory basis upon which the Department of 
Veterans Affairs grants entitlement to service-connected 
disability compensation at the 100-percent rate when a 
veteran's disabilities do not meet the schedular criteria for a 
100-percent rate under VA's schedule for rating disabilities. 
VA's intent is to ensure that veterans with service-connected 
disabilities that are not rateable at 100 percent are provided 
compensation at that rate if it is determined they are 
precluded from obtaining or maintaining gainful employment as a 
result of their disabilities.
    Authorization for IU was added to the 1933 rating schedule 
by regulation in 1934. While there is no specific statutory 
authority for this benefit, there is implicit authority under 
section 1155 of title 38, U.S.C., which authorizes VA's rating 
schedule.
    The minimum evaluation requirements for consideration of 
entitlement to IU are a single disability rated at 60 percent 
or more, and, if there are two or more service-connected 
disabilities, there must be at least one disability rateable at 
40 percent or more and additional disability, resulting in a 
combined 70-percent evaluation.
    Where the rating schedule is found to be inadequate to 
fairly compensate a veteran for the inability to be gainfully 
employed, VBA's regional offices may refer cases that fail to 
meet the minimum combined evaluation criteria to the Director 
of the Compensation Service for consideration of an IU rating 
on an extrascheduler basis.
    VA determines eligibility for this benefit through 
development for all evidence that may weigh on the decision in 
a veteran's claim. The application for IU requires the veteran 
to furnish an employment history for the 5-year period 
preceding the date on which the veteran last worked. VA 
contacts these employers and asks them to provide information 
concerning the veteran's employment, the reasons for 
termination of the employment, the type of work performed, and 
the dates of employment.
    VA will also request records from the Social Security 
Administration if the veteran is under age 65 and there is an 
indication that he or she is in receipt of Social Security 
Disability Insurance and from VA's Vocational Rehabilitation 
and Employment Service if there is an indication that the 
veteran has applied for or participated in that program. In 
addition, if the decisionmaker determines current medical 
information is necessary, a VA examination will be ordered.
    VBA requires all veteran service representatives and rating 
veteran service representatives to complete Web-based training 
on IU following completion of their initial Challenge training. 
The Challenge program consists of a national technical training 
curriculum that provides new veterans service center employees 
with the skills they need to function effectively as VSRs and 
RVSRs.
    Upon successful completion of Challenge, VSRs have 90 days 
to complete the training and RVSRs have 60 days to complete the 
training. The 5-hour Web-based VSR-IU course enables the 
students to learn about the benefit, the eligibility 
requirements, and the evidence needed to process a claim. The 
RVSR Web-based course is 2 hours of training, covering the 
definition of IU, eligibility criteria, evidence requirements, 
effective dates, and preparing the rating decision.
    Additional IU training was provided to RVSRs in 2014. As a 
result, during the first two quarters of fiscal year 2015, VA's 
accuracy rate for IU decisions based on our national Systematic 
Technical Accuracy Review is 94 percent. The most common errors 
are the failure to properly consider earlier effective dates 
and to infer IU in appropriate cases.
    Once a veteran is awarded IU benefits, he or she is 
required to submit an annual employment certification until the 
age of 70. The veteran must list all employment for the 
preceding 12-month period. VA uses the certification to verify 
continued entitlement to IU. Failure to return the form will 
cause VA to send the veteran a due-process notice of the 
potential reduction of the monthly benefit payment to the rate 
for the actual combined disability evaluation.
    Currently, Compensation Service is developing a method to 
review all IU recipients' wage income annually to ensure the 
integrity of the program. Under the revised post-award audit 
process, VA will conduct a data match of IU recipients with 
SSA. Once SSA runs the data file against the records in their 
system, VA will exclude veterans whose earned income is below 
the poverty threshold. The poverty threshold is based on the 
Census Bureau poverty level, currently $11,655 for one person.
    The IU benefit fills a critical gap when the ratings 
schedule fails to fully address the impact of disability in a 
specific veteran's circumstances. VA is responsible for 
ensuring that those who served this Nation and have been 
disabled during that service are fully compensated for their 
disabilities.
    VA continues to review the IU program for potential 
improvements, including a current review of the program from 
both the compensation and vocational rehabilitation and 
employment perspective.
    Thank you for this opportunity to be here today.

    [The prepared statement of Bradley Flohr appears in the 
Appendix]

    Dr. Roe. Thank you, Mr. Flohr.
    Mr. Varela, you are recognized for 5 minutes.

                  STATEMENT OF PAUL R. VARELA

    Mr. Varela. Chairman Miller, Ranking Member Brown, and 
members of the committee, thank you for inviting DAV to testify 
at today's hearing.
    DAV is comprised of 1.3 million wartime service-disabled 
veterans, and we are dedicated to a single purpose: empowering 
veterans to lead high-quality lives with respect and dignity.
    For veterans who aren't able to work because of service-
connected disabilities but do not meet the requirements for a 
100-percent rating, VA has established special provisions for 
awarding total disability ratings based on individual 
unemployability, or IU.
    The main question at issue in IU claims is whether a 
veteran can engage in substantially gainful employment due to 
service-connected disabilities. Any subtle change in a 
veteran's physical or mental capacity may cause poor 
performance in a work setting that an employer could find 
unacceptable, thus leading to loss of employment opportunities.
    Some veterans will become unemployable as their 
disabilities worsen with age. However, age is not a factor in 
IU determinations, nor should it be. Unlike VA pension benefits 
and Social Security Disability Insurance benefits, where age is 
appropriately considered in determining entitlement, 
consideration of age as a factor in IU claims would be 
inappropriate.
    The idea that Americans do not aspire for greater personal 
and economic prosperity beyond a certain age can easily be 
dispelled by the number of people working beyond normal 
retirement age. Just look in the House and the Senate, where 
many of your colleagues continue to work productively into 
their 70s and some into their 80s.
    We realize that VA's IU regulations and policies are 
imperfect but believe the current rules for the most part 
prescribe consideration of the appropriate factors. VA 
adjudicators must perform careful examination of the facts and 
exercise well-informed and well-reasoned judgments.
    We believe most veterans would prefer to work if capable to 
do so, and experience has shown that VA adjudicators are not 
particularly liberal in awarding IU benefits.
    DAV recognizes the growth in IU claims for fiscal years 
2009 through 2013 but believes this growth is consistent with 
the pattern of higher numbers of more seriously disabled 
veterans returning from the wars in Iraq and Afghanistan, 
increased claims processing, intense outreach efforts, 
expansions of presumptive disabilities, and new rules governing 
claims for post-traumatic stress disorder. Consider that in 
2009 VA changed its policy relative to claims processing for 
PTSD cases and in 2010 VA added three new presumptive 
disabilities related to Agent Orange exposure.
    For these reasons, increasing numbers of veterans receiving 
IU benefits, as reported by CBO in 2014 and by GAO in 2015, 
does not, in our view, signal a failure or fault in the 
administration of this benefit.
    In the August 2014 CBO report, it states, ``VA reviews the 
employment history of IU applicants but does not require those 
veterans to have their employability assessed by the 
Department's vocational rehabilitation program.'' This suggests 
that a determination of IU could be made contingent upon a 
vocational rehabilitation evaluation and determination. This 
additional administrative step would add unnecessary delay and 
undoubtedly place a greater burden upon veterans seeking timely 
decisions for adequate compensation to maintain a basic 
standard of living.
    In the June 2015 GAO report on IU, several options were 
noted to revise IU eligibility requirements and restructure the 
administration of this benefit. These options consisted of 
discontinuing IU beyond retirement age, a vocational assessment 
prior to awarding IU, gradually reducing IU payments, 
increasing earning limits, lowering disability rating criteria, 
adding new IU criteria, and developing a new patient-centered 
work disability measure.
    DAV would strongly oppose any legislation or recommendation 
that would restrict IU entitlement on the basis of age, delay 
processing of IU claims due to increased administrative 
requirements, or reduce IU payments prior to a veteran 
demonstrating sustained and gainful employment.
    We would strongly oppose any measure that proposes to 
offset the payment of any other Federal benefit or other earned 
benefit entitlement by VA compensation payments. Reducing a 
benefit provided to a veteran in receipt of IU due to receipt 
of a different benefit offered through a separate benefit 
program would be viewed as an unjust penalty.
    DAV supports lowering the rating criteria for IU for 
veterans with multiple disabilities to a combined disability 
rating of 60 percent, rather than the 70 percent, and 
eliminating the requirement that one of the disabilities have a 
minimum rating of 40 percent.
    In closing, DAV appreciates the opportunity to discuss the 
merits and our concerns regarding the administration of VA's IU 
benefit. IU provides payments at the 100-percent rate that 
affords considerable financial relief for veterans when 
employment opportunities diminish because of the wounds, 
injuries, and illnesses sustained as a consequence of active 
military service.
    This concludes my testimony, Mr. Chairman. I am prepared to 
answer any questions from you or other members of the 
committee. Thank you.

    [The prepared statement of Paul Varela appears in the 
Appendix]

    Dr. Roe. Thank you, Mr. Varela.
    Mr. de Planque you are recognized for 5 minutes.

                  STATEMENT OF IAN DE PLANQUE

    Mr. de Planque. Good morning, Dr. Roe, Mr. Takano, and 
members of the committee. Thank you for having me here today to 
speak on behalf of the American Legion; our national commander, 
Mike Helm; and the more than 2 million members in over 14,000 
posts across the country that make up the backbone of the 
Nation's largest wartime service organization.
    One of the tragic consequences of putting your life on the 
line to defend this Nation is that the men and women who do so 
do not always return home whole. There are many ways your 
service can impact your life in the civilian world. It can 
happen immediately, as an IED blast forever and irrevocably 
changes your world. It can happen over time, as the slow and 
insidious effects of exposure to dioxin and the herbicide Agent 
Orange destroys the functions of various bodily systems.
    Some of these disabilities can result in a 100-percent 
disability rating. Sometimes the numbers don't add up, but the 
overall effect of the toll of war on your body leaves you in a 
state where you can't really go to work like the rest of the 
world. This is a hard place to be for a veteran.
    To account for this, VA has the rating of total disability 
due to individual unemployability, TDIU. TDIU is available when 
the veteran doesn't meet the 100-percent criteria but their 
disabilities prevent them from regular work.
    There are ways the TDIU program can be improved, but the 
American Legion wants to ensure that improvement does not come 
at the cost of unintended consequences to the veterans who rely 
on this benefit, particularly some of the very vulnerable 
veterans who need this to survive.
    There is a proposal in the recent GAO report on TDIU that 
would look at reducing or removing the benefit for veterans 
over the working age of 65. There are three good reasons the 
American Legion believes this is a bad idea:
    First of all, it is clear in the law age is not to be 
considered as a factor in these decisions. This law has existed 
for decades; there has never been a problem with it. You want 
to be very, very careful when you give serious consideration to 
changing the United States Code to diminish a benefit intended 
to serve disabled veterans.
    Second, age isn't even reflective of the modern workforce. 
According to the Bureau of Labor Statistics, Americans over the 
age of 65 still in the workforce have doubled over the past 30 
years. Well more than half of those workers are working full-
time. Those workers can collect their work income; they can 
collect other benefits. Why should veterans be put into a 
disadvantaged category, especially veterans who have been 
injured and disabled in service to their country?
    Third, most workers build a retirement portfolio of some 
kind over the course of their lives. For a veteran disabled 
during the course of their service, often a lengthy career to 
build retirement is taken away from them. The TDIU benefit they 
receive may be the most substantial piece of income to support 
them in their old age. We need to think long and hard about 
depriving veterans of that benefit.
    Which is not to say there isn't room for improvement in the 
program. One of the areas where delays can occur in the 
adjudication of TDIU is the verification of income and 
employment. Indeed, it is absent.
    In this area, the American Legion would point VA in the 
direction of one of their recent moves to improve the pension 
program. In 2012, VA announced a more automated process for 
eligibility verification by forming partnerships with the 
Social Security Administration and the IRS. There is no reason 
to believe such partnerships can't be expanded to include this 
program as well.
    Rapid communication between government agencies needs to 
become an assumed standard. It needs to be the baseline, 
something the public can take for granted. Until we can reach 
that point, VA should certainly build on existing partnerships 
and relationships to help other programs.
    TDIU is a difficult benefit to discuss. We don't think 
about the toll it takes on veterans. We don't think about what 
it means to be told you can't work anymore. We don't think 
about how it feels to struggle with finding your place in the 
world when your injuries leave you unable to be productive. 
There is a tremendous cost to these veterans.
    It is easy to look at veterans benefits in terms of dollars 
and cents. I know there are concerns about a benefit like TDIU 
and how it will be driven by how much it costs. That is a 
question we, as a moral Nation, can't afford to ask.
    In the past, we have seen veterans programs slashed when 
the focus of war disappeared from the front page. In 1933, FDR 
passed the Economy Act. It gutted a lot of veterans benefits as 
the country struggled through the Great Depression. Taking from 
veterans was wrong then. The American Legion wants to make it 
clear that walking back compensation from those who have been 
injured in service is always wrong.
    There can be savings to be found in the Department of 
Veterans Affairs, but an earned benefit that a veteran is 
entitled to is never a waste of money.
    We look forward to working with this committee to find ways 
to improve and strengthen TDIU benefits to make it do what it 
is supposed to do: to help serve the veterans who paid a great 
price for their country.
    I am happy to answer any questions.

    [The prepared statement of Ian de Planque appears in the 
Appendix]

    Dr. Roe. Thank you, Mr. de Planque.
    And I will start the questioning.
    Mr. Bertoni, you know, we obviously want to ensure that 
veterans are compensated for their service-related disabilities 
and conditions. And that is a given.
    The GAO report raised concerns about the growing number of 
beneficiaries who are beyond traditional retirement age when 
they first apply for IU benefits. And, just in the last 
quarter, there were 33,046 65- to 69-year-olds and 97 over-90-
year-olds that applied.
    Is that an issue or a problem now?
    Mr. Bertoni. We didn't present it as a problem. We were 
asked to look at age-related trends.
    But, clearly, that cohort of beneficiaries fall within a 
group that you would expect, especially at the outer reaches, 
would not be employable or even seeking employment. We heard 
some statistics here today, but after 75, the number of folks 
working falls to about 10 percent, and 90, it is probably 
pretty much nonexistent.
    So that older cohort at the outer edges certainly falls out 
of most folks who would be seeking employment.
    Dr. Roe. Okay.
    Well, I guess a question that I would have--and to Mr. de 
Planque's last point that he made--is, in many of these 
veterans, certainly the more senior veterans, if you are in 
your 90s, you certainly have come through a time when your 
earnings were much less than people today. And that may be a 
very significant part of their income. It probably is a 
significant part.
    I know from my own family, my mother is 92, will be 93--I 
have to stop that. I don't want to tell how old my mother is. 
She was born in 1922. I have to stop saying that.
    But I think the point I am making is, should we label it 
something else? Because I am a little bit toward, if you have a 
service-connected disability, you were injured in the line of 
duty, and the raters say that you were, then you are due that 
compensation. I am kind of leaning in that camp.
    I realize that, over 90, probably no one is working at that 
age. But maybe we should label it something else.
    Again, if it is a service-connected disability--and all of 
these people at the dais were correct. We see in Vietnam--that 
is my generation that fought in the Vietnam war--long-term 
issues that show up.
    So anyone can comment on this that would like to.
    Mr. de Planque. One of the things that I wanted to jump in 
on that--and I know my colleague from DAV mentioned the 
addition of the Agent Orange condition. Sometimes newly 
adjudicated conditions can change a veteran's eligibility and 
cause that.
    I mean, think about it. Somebody who was 20 years old in 
1965 serving in Vietnam is 70 years old today. So, you know, 
that age cohort, we are certainly seeing a large influx of 
veterans, particularly from the early part of the Vietnam war, 
who are in that age cohort and who are looking at that.
    And so you are running into veterans who are looking at a 
new period of eligibility and maybe newly eligible for that 
benefit. And we want to be very careful about dialing back any 
benefit that you are eligible for, you know, changing the idea 
and saying, well, no, we are not going to compensate you for 
that anymore. And that is the one place that we want to be 
careful.
    And I think we can understand that, you know, maybe there 
is a point about, if you are over 90 years old, you are 
unlikely to be seeking employment at that point, and look at 
how, you know, the benefits can exist or how they can be 
structured for veterans to make sure that they are not having 
that taken away.
    But because it is a changing situation and because there 
are things, you know, in our understanding of how toxins like 
Agent Orange can affect people over time, it is important to 
still recognize that at later ages they may need access to 
these benefits.
    Dr. Roe. Well, Mr. de Planque, let me give you an example. 
I just had, not 6 weeks ago, one of the best friends I will 
ever have on this Earth, who was a Vietnam-era veteran, who 
died of a very rare lymphoma that very well may have been 
related to Agent Orange. And he was 68 years old and still 
working full-time. And he hadn't planned to stop working 
either; he was going to continue.
    So I think you are right. And I don't know whether these 
very senior veterans that are over 90 who are in need--there is 
no question they are in financial need. We may need to look at 
some different--call it something else or whatever, at that 
age.
    But, with that, I am going to----
    Mr. Bertoni. If I could quickly jump in, I think you make a 
good point about, what it is called. I mean, with individual 
unemployability, what is inferred is that the person can't work 
and we are going to compensate them for the inability to work. 
And, at the outer reaches of these ages, it strains the 
credibility of that program.
    I think you really need to be concerned when you are 
looking at these age cohorts, had these people worked in the 
10, 12 years prior to coming in? If they had and tried and fell 
out of the workforce periodically, that shows an intent to 
work. So that is a factor that could be, you know, built into 
this process.
    With Social Security Administration--if you are out of the 
workforce for 10 years, so you retire or drop out for whatever 
reason, if you can't show that you have worked at least 20 
quarters in that 10-year period, you don't qualify for 
benefits.
    So the concern amongst many of the folks we interviewed in 
the field was folks who have been out of the workforce for many 
years, retired from long careers, no work activity, will come 
in, apply for the benefit, and there is some discomfort amongst 
VA staff in having to award those benefits.
    Dr. Roe. Certainly, because it is hard to put a straight-
face test on that, is what you are saying?
    Mr. Bertoni. Yes.
    Dr. Roe. Mr. Takano, you are recognized.
    Mr. Takano. Dr. Roe, I understand your point about the 
straight-face test. I hadn't been aware of applicants for this 
benefit. They were--so some of them were in the workforce, they 
stopped working, and then come in and apply for the benefit.
    But I would like to hear a response from Mr. Varela or Mr. 
de Planque about this, sort of, straight-face test situation. 
Are there alternative explanations for why people might be 
doing these sort of things? Applicants.
    Yes, go ahead.
    Mr. Varela. Thank you, Congressman Takano.
    I have had the benefit of being with DAV nearly 13 years 
this October, and 10 of those years I spent in regional offices 
helping a wide range of veterans--younger veterans and older 
veterans. Whether it was helping an 80-year-old veteran file a 
claim for the first time for PTSD or a recently discharged 
servicemember from the wars in Iraq and Afghanistan, age was 
never an issue. We never took that issue.
    If somebody comes into our office to apply for a benefit, 
the first question that we ask is, how did this disability--in 
cases of IU--how did this disability or disabilities impact 
your ability to work? Historically, you know. What kind of 
limitations did you have over these periods of time?
    And I will give you an example. Mr. de Planque mentioned 
the 70-year-old Vietnam veterans. Well, remember, many of them 
may not have been eligible up until 2009 and 2010. So they went 
decades without receiving any benefits. How did those 
disabilities impact them over the years?
    So, when somebody comes in at age 90, it is not 
unreasonable for us to say, what limitations did your 
disabilities, your service-connected disabilities, impose on 
your ability to work? And would you still be working today? 
What do you think? Yes, I feel that if I didn't have this 
diabetes or I didn't have this Parkinson's disease, I could be 
doing something above the poverty threshold, which is roughly 
$12,000 today.
    So age, for us, is not a factor. It is what did those 
service-connected disabilities do to that person over time and 
today.
    Mr. Flohr. If I may add something, Mr. Chairman. It is not 
a requirement, for us to consider entitlement to IU, that a 
veteran specifically claim that benefit. The U.S. Court of 
Appeals for Veterans Claims and the Court of Appeals for the 
Federal Circuit, in a number of cases and precedent opinions, 
have held that, when we are reviewing a claim for increase--and 
that could be from a gentleman that is 75, 85, 90 years old--an 
increase in their service-connected disabilities, when 
reviewing that claim, if there is an indication in the claim 
and in the claims file of the veteran that they cannot work, 
and it is due to their service-connected disabilities, we are 
required to consider the issue of entitlement to IU.
    As my colleagues in the American Legion and DAV have 
pointed out and I did in my testimony, age is not a factor. We 
are prohibited under the rating schedule, section 4.19, from 
considering age, both in making disability determinations, 
including unemployability.
    And I agree also with the written testimony of my 
colleagues. It was my own testimony, I believe. We are working 
longer, as a Nation. We are living longer. We work because we 
are more healthy, sometimes. But even those who are not and 
have severe disabilities are working because of the economy 
over the last 10, 12 years. They can't afford to retire 
anymore, so they continue to work until they can't work 
anymore.
    And if, at some point, regardless of their age, when they 
no longer actually can work due to their disabilities, their 
service-connected disabilities, then we are required to take 
care of them and provide them with the benefits that they need 
to survive.
    Mr. Takano. Thank you very much for offering those 
comments. It helps me understand other scenarios under which we 
can justify--or it could be justified, this sort of benefit.
    Can you tell me what kind of mental health treatment an 
individual suffering from severe PTSD and using individual 
unemployability benefits receives? So they are, sort of, 
suffering from severe PTSD, but they are also receiving IU 
benefits. What sort of mental health treatment does that 
individual receive?
    Mr. Varela or anyone on the panel? Or Mr. de Planque?
    Mr. Varela. They are open for the full range of mental 
health services provided by the VA, regardless of disability. 
Any service that is provided at VHA for mental health, PTSD, 
TBI, they can receive that concurrently with IU, or they would 
receive that concurrently with their disability evaluation. IU 
is not a determining factor in the level of services.
    Mr. Takano. Could I ask one more question, sir? Is that 
possible?
    Dr. Roe. Yes.
    Mr. Takano. Do you still believe there is sufficient 
motivation to find a positive outcome for their PTSD while 
receiving IU benefits? So, in other words, they are being 
successfully treated for PTS, but they are also receiving IU 
unemployment benefit. Can we justify that situation?
    Mr. de Planque. Are you asking in the sense that is there a 
disincentive to get better----
    Mr. Takano. Yes.
    Mr. de Planque [continuing]. Basically?
    I think there is always--you know, this is something from 
having worked with and spent a lot of time talking to veterans 
who suffer not just from PTSD, but also keep in mind depression 
goes hand-in-hand with a lot of these debilitating injuries.
    Mr. Takano. Yes.
    Mr. de Planque. Every single one of them that I have ever 
talked to would rather feel better than have a large amount of 
money attached to it. They would rather get better. They would 
rather not have to deal with the symptoms of the depression or 
the PTSD.
    So I don't think it presents a particular obstacle to that. 
Those veterans will push towards getting better in treatment, 
because that is a far better goal than--you know, and to be 
able to return to the workforce, hopefully, or do something 
like that. That is where most of them are motivated.
    Mr. Flohr. I would add that that has been a long-time 
perception, that veterans, once they get 100 percent or get IU 
at a 100-percent rate, they stop being treated for their PTSD, 
and that is just not the case. VHA has told us that they 
continue to be treated. They are treated; they want to get 
better.
    So, many years ago, I went to a 2-day conference where the 
question was, is disability compensation a disincentive to the 
treatment of PTSD? As I said, that has been around a long time. 
And, actually, it is not the case.
    If we were to--the 100-percent evaluation for mental 
disorders is total social and occupational impairment. And if 
we were to evaluate everyone at 100 percent rather than 70 
percent and then give them IU at 100, we would decrease the 
numbers of people getting IU, but the compensation, the dollars 
spent, would not change. They would still be getting the same 
amount of compensation.
    Mr. Takano. Okay.
    I appreciate your generosity, sir.
    Dr. Roe. Thank you.
    Mr. O'Rourke you are recognized for 5 minutes.
    Mr. O'Rourke. Thank you, Dr. Roe.
    Just following this line of questioning, for Mr. Flohr or 
Mr. Bertoni, if you have these numbers, in terms of the goal of 
returning veterans who are unemployable to employable status, 
what kind of numbers do we have on that? What has been the 
success rate?
    Mr. Flohr. You are referring to veterans who may be going 
through a vocational rehabilitation?
    Mr. O'Rourke. Yes. What kind of numbers do we have for 
veterans who have been classified as unemployable who are later 
classified as employable or find a job?
    And I agree with everything that has been said. Nobody, or 
very few people, don't want to work. I mean, in terms of self-
esteem, their ability to provide for themselves and their 
family, and moving forward in their careers, everyone wants to 
work.
    So what has our success been in helping veterans get back 
to work?
    Mr. Flohr. I am sorry, but I don't have that information 
today, but I would be glad to get it.
    Mr. O'Rourke. Has GAO looked at that at all?
    Mr. Bertoni. I don't know the actual percentages wise, but 
we did do some work in VR&E a couple years ago.
    The issue we had was the goals that they were using to 
demonstrate success were very short-term in nature. We felt 
they had to have, beyond the short term, a more extended goal 
for actual success. Because people can come in and out, you 
know, in the short term and in the long term not be successful. 
But, really, over time you would want to see a broader metric 
that gauges success.
    I don't have the number, but----
    Mr. O'Rourke. Okay. Could you share with me and the other 
members of the committee what you do have?
    Mr. Bertoni. Sure.
    Mr. O'Rourke. I will ask that question for the record and 
would love to hear back from you.
    And then for Mr. Flohr, I am reading the staff summary of 
the GAO findings. VBA guidance on how to determine a veteran's 
unemployability is incomplete. Format and delivery of TDIU 
guidance does not support efficient claims decisionmaking. VBA 
quality assurance approach does not provide comprehensive 
assessment of TDIU decisions. And VBA does not verify self-
reported income eligibility information.
    Do you agree with all of those findings, Mr. Flohr.
    Mr. Flohr. Yes, sir. We have concurred in all the 
recommendations of GAO.
    And I would take this opportunity to personally thank Mr. 
Bertoni and his staff for doing this report. It will allow us 
to strengthen our process going forward in the next several 
months. And so we appreciate it.
    Mr. O'Rourke. Okay.
    And for Mr. Varela and Mr. de Planque, beyond those GAO 
findings--and if you disagree with them, let me know--but, 
beyond those, do you see a significant problem to be solved 
within TDIU?
    Mr. de Planque. you said there are ways this can be 
improved, and you talked about partnerships and better 
communication. But, other than that, do you see any necessary 
improvements to the program?
    Mr. de Planque. Well, there are improvements there, 
obviously, with the communication between agencies. I think VA 
is going to win overall if they can get a more consistent 
adjudication. And I think they would agree on that. That is 
what I think they want; it is what we all want. And that is not 
unique to the IU, you know, part of the disability process.
    So I think, you know, those are two main areas that could 
definitely get a lot of focus. And I think if we can get 
consistent adjudication out of every RO, then that is a win for 
everyone. So I think those would be two of the largest areas to 
look at.
    Mr. O'Rourke. Mr. Varela, anything to add?
    Mr. Varela. Yes, Congressman O'Rourke. Thank you. A couple 
of improvements.
    Hopefully, when VBA moves to this electronic income 
verification process, that they would discontinue requiring 
veterans to send the 4140 form back to them to verify whether 
or not they are working.
    If you looked at the GAO report, you saw a certain 
percentage of veterans that no longer qualified for IU because 
they failed to return the questionnaire.
    You know, there are a lot of veterans that receive that 
questionnaire, they don't know what it is for, they don't 
return it, their benefits get reduced. Whether or not they come 
in to have them, you know, reevaluated and their benefits 
reinstated--it happens, okay, that they are not going to come 
back to the VA; they think that their benefits have been 
reduced properly. Then you get some veterans that submit it 
late, they have been reduced; then you have got to go through a 
whole other process to get their benefits reinstated.
    So, hopefully, when they move to that electronic 
verification, we can get rid of that. You go online, this 
person is working; if they are not working, they continue into 
the program.
    In terms of other improvements within IU, we all want 
quality decisions. Quality is number one. I mean, that is what 
we are all shooting for. But what I would say is, no matter the 
case, I have never come across somebody that had an identical 
IU case. So what I say to that is, I may present a Member of 
Congress with this body of evidence, this body of information, 
this work history, but we still may arrive at a different 
decision.
    So the administrative procedures that VA has to perform, 
infer the IU claims, send the 4140, did you schedule an 
examination, that is great, but, at the end of the day, we want 
to make sure that we understand that we are not all going to 
reach the same conclusion 100 percent of the time.
    Mr. O'Rourke. And just very quickly in 10 seconds, Mr. 
Flohr, on that point, is the 94-percent accuracy rate that you 
talked about, is that independently verified or determined, or 
is that determined within VBA?
    Mr. Flohr. That is determined within VA through our 
technical accuracy staff that reviews them.
    Mr. O'Rourke. Okay.
    And has GAO looked at that to confirm that?
    Mr. Bertoni. We have confirmed the percentage. We don't 
agree that that is likely representative of the quality of the 
cases.
    Mr. O'Rourke. Okay.
    Thank you, Mr. Chair. I yield back.
    Dr. Roe. Mr. McNerney, you are recognized for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    And thanks for testifying this morning.
    Mr. Bertoni, you mentioned the inconsistency in awarding, 
and that has sort of been echoed. Mr. de Planque said that was 
one of the big problems.
    Are your recommendations aimed at improving the consistency 
in awarding IU?
    Mr. Bertoni. Yes. I mean, it goes back to the guidance. I 
have been, you know, living with the guidance for a couple 
days, looking at this, really trying to learn the guidance or 
to familiarize myself with it. And guidance is very weak in 
several areas.
    I mean, there is information on evidence that they should 
consider, evidence they could exclude. But there is a middle 
area of very valuable information, such as whether they are in 
school, what their work history looks like, other aspects of 
the veteran's life, that they are silent on. And it claims the 
examiners are using them, you know, unevenly.
    Mr. McNerney. So is it going to be up to the committee to 
improve the guidance? Or is it going to be up to----
    Mr. Bertoni. I think it is up to the agency to take a first 
crack at, sort of, clarifying what is in, what is out, the 
hierarchy of evidence.
    I mean, an example. In the Social Security Administration, 
the primary physician's report, that has the most weight. There 
are no references in the VA guidance around that issue.
    So I think the agency can, based on their experience, help 
staff, sort of, gradate, or gradate for staff, the importance 
of information. That will help them, I think, make better 
decisions and more consistent decisions.
    Mr. McNerney. So, in terms of abuse, in your opinion, is 
the abuse unintentional because of poor guidance, or is it due 
to intentional factors?
    Mr. Bertoni. I don't see this as abuse. I believe these 
veterans, they see this benefit out there. A single veteran at 
60 percent is going to get $1,000 a month. If that veteran gets 
their rate increased to 100 percent, that is a $2,800-a-month 
benefit. So there is an incentive to go for that, and I 
understand why they would.
    What we are talking about here is having better guidance to 
make better decisions on that $1,000-versus-$2,800-a-month 
decision.
    Mr. McNerney. Do you agree with that, Mr. de Planque?
    Mr. de Planque. That seems relatively consistent, yeah.
    Mr. McNerney. So, I mean, then the consensus might be that 
there is not that much intentional abuse; it is just poorly 
administered.
    Mr. de Planque. I don't think there is really intentional 
abuse, I mean, to any extent. I think these are veterans who 
see that there is a benefit and that believe that they are 
entitled to it and, by law, you know, seem to fit within the 
entitlement of it, and so they seek the benefit. And that is 
not an abuse of the system. That is getting a benefit that they 
are entitled to.
    Mr. Bertoni. Yeah. We did not hear, you know, abuse 
mentioned. People were just concerned that, given what was in 
front of them in terms of the guidance, it was difficult 
making, in their view, sometimes, accurate and consistent 
decisions.
    Mr. McNerney. So, then, Mr. Flohr, what is the prognosis in 
terms of when we are going to see a better guidance 
implemented?
    Mr. Flohr. As I said, we have concurred with GAO's 
recommendations. We have already started to implement some of 
them. We have groups that are working on each of the four 
recommendations, one of which is to improve the consistency and 
accuracy.
    We have a national program in our 56 regional offices 
called an in-process review. And that is where the rating 
veteran service representative completes a one-page summary of 
the decision they made, what they looked at. And that is 
reviewed by our quality review teams in our regional offices. 
If there is any issue as to maybe not looking at all the 
evidence properly or needing to have a better discussion, that 
goes back to them.
    And we have captured all that data, and we have added to 
that individual unemployability and we are looking at that.
    Mr. McNerney. Well----
    Mr. Flohr. Once we get all that information together, then 
we will know how to better shape our guidance and our training.
    Mr. McNerney. In terms of developing what you might call 
rules in many Federal agencies, is this a transparent process 
that will develop these guidance or the rules?
    Mr. Flohr. Transparent in terms of?
    Mr. McNerney. Asking for outside inputs, putting proposed 
rules on the Internet for people to comment on, those kind of 
things.
    Mr. Flohr. If we have to make changes to our regulations, 
of course, that is--publication for notice and comment, 
followed by a final rulemaking. We get input from anyone who 
wants to comment. Of course, we get the GAO and we get CBO and 
others who provide us with guidance, as well.
    Mr. McNerney. So you mentioned the word ``regulation.'' Are 
we talking about the guidance becoming regulations?
    Mr. Flohr. Well, if we wanted--for example, if we decided 
for some reason that we wanted to change or do away with the 
age issue, we would have to publish that for notice and 
comment. That is in the regulations. To change that, we would 
have to go through rulemaking.
    Mr. McNerney. So is there a distinction, then, between 
guidance and regulations?
    Mr. Flohr. Absolutely. Guidance is like internal guidance, 
just, okay, here is how you process a claim, here is how you 
develop the claim, you have to get this evidence.
    Of course, we are grounded in statute. We have a statutory 
duty to assist, which tells us that we have to get all the 
evidence that we are aware of, or at least to try to get all 
that, before we make a decision, unless at some point we can 
grant the claim. Once we grant the claim, the duty to assist 
ends. But, until that point, we have to get all the evidence 
that we are aware of. That is evidence from the veteran, from 
private physicians perhaps, from VHA if we need an exam, 
whatever is necessary.
    Mr. McNerney. So the guidance, are those publicly 
available, what the guidance criteria are?
    Mr. Flohr. I don't know. I would have to--if our procedures 
manual, the M21-1--I think it is available. Yes.
    Mr. McNerney. Okay. All right.
    Thank you, Mr. Chairman.
    Mr. Flohr. And the rating schedule, as well. Yes.
    Dr. Roe. I thank the gentleman for yielding.
    I am going to do just a brief second round right quick. And 
if any of you all want to stick around for this, that will be 
fine.
    But, Mr. Flohr, according to the VA testimony, once a 
veteran is awarded an IU benefit, he or she is required to 
submit an annual unemployment certification until attaining the 
age of 70.
    Why does the VA stop asking for this information after a 
veteran who is age 70 or older when you don't ask the 
question--it doesn't matter the other direction, if you are 
getting the IU benefit?
    So that is question number one.
    Mr. Flohr. That is a very good point. And I hadn't thought 
about it until I started preparing for this hearing.
    I think that is an old--it comes from way back, a long time 
ago, before we were working longer and living longer, and 70 
seemed like a good point in which not to require the employment 
questionnaire anymore. I think, as we grant more and more 
benefits to more elderly veterans, that we may have to look at 
that.
    Dr. Roe. Yes. Thank you, Mr. Flohr.
    And the veterans must meet certain income restrictions in 
order to receive IU benefits, of course. However, 3 years ago, 
in 2012, the VBA suspended income verification matches, and, 
according to the GAO, this decision may have resulted in 
ineligible veterans receiving IU benefits.
    One, explain why the VBA decided to suspend income 
verifications in 2012.
    Mr. Flohr. Sir, we suspended that when we started 
developing a new process, the secure encrypted portal with SSA 
and IRS, with which we could get income information rather than 
going through our old process, which was a paper-based process.
    At the same time, we were going through converting to VBMS 
and electronic claims processing. And I am amazed to say that, 
right now, we are 95-percent electronic in claims processing. I 
never thought I would see that in my tenure at VA, but we have 
gone about that quickly.
    Part of that is working with the IT, both on VA's side and 
on SSA's side, and getting it to communicate. And it has been a 
long time. I understand that it has not been perfected yet, but 
hopefully by January next year it will be.
    Dr. Roe. Let me point out something obvious. The new IT 
system--this is 2012. The new IT system is not scheduled to be 
operational until 2015, and it is still not operational. Why 
didn't you continue just to use the old system until the new 
system came up in place and had its scrub-down?
    Mr. Flohr. I don't know the answer to that, to be quite 
honest, sir.
    Dr. Roe. I think I know the answer. I think the answer was 
they thought--and I will just answer this for you--that that 
system would be up and running very quickly. It turned out it 
was a little harder to implement. That would be my guess.
    Mr. Flohr. That is quite possible.
    Dr. Roe. According to the GAO, the VBA has not provided a 
plan or a timeline for implementing the new verification 
system. Did you just say January of 2016?
    Mr. Flohr. Yes, sir.
    Dr. Roe. So that is when it will be implemented?
    Mr. Flohr. That is what we expect, yes.
    Dr. Roe. Five months from now. Okay. Very good. And it will 
go live then.
    I guess the last couple of questions I want to ask is--
obviously, everybody in this room agrees that, veterans 
receiving disability and IU would prefer to get better. I think 
anybody wants to get better. As a doctor, I saw patients; 
almost everybody I talked to wanted to improve when they came 
to you. That is why they were there.
    And VA has a lot of tools in its toolbox. They have voc 
rehab, PTSD treatment, healthcare, all those things to help 
achieve that.
    Does the VA track how many of the IU recipients utilize 
these benefits--in other words, utilize all these incredible 
resources that the VA supplies? Is there any way to track that?
    Mr. Flohr. In terms of voc rehab? I would have to ask----
    Dr. Roe. Or just all those things. If you are in IU and you 
are trying to get back to work, how many people actually access 
themselves to all the benefits that VA supplies?
    Mr. Flohr. Well, they do receive treatment. We know that. 
VHA has told us they do not discontinue treatment once they get 
at a certain level of compensation. They continue to be 
treated, in an effort to get back to employment. VR&E works 
with veterans with PTSD and all disabilities to try and return 
them to the workforce.
    The numbers I don't know off the top of my head.
    Dr. Roe. I think that Mr. Takano asked this question a 
minute ago, and I will just re-ask the same question. His 
question was, I think when veterans access themselves to these 
benefits that they have earned, how many actually come off of 
IU rolls because they have been helped?
    It is like what voc rehab does in the private sector. And 
we look at that in Tennessee and see how many people use voc 
rehabilitation and get education benefits and so forth and 
actually return to the workforce.
    Do you all have that number?
    Mr. Flohr. Yes, sir. I do, actually.
    At the end of fiscal year 2014, during that year, we 
proposed to terminate almost 6,800 veterans who were on IU. 
That is due to them having returned to work, having exceeded 
the income at a point where we found them to be gainfully 
employed, or where their disability got worse to the point that 
they could get a schedular 100-percent evaluation, so they got 
an increase. And, additionally, 12,000 in that year died, so 
they were taken off the rolls too.
    So approximately 18,000 were removed from the IU rolls over 
fiscal year 2014.
    Dr. Roe. But you said 6,800 went back to work or----
    Mr. Flohr. Either went back to work or else got an increase 
to 100 percent.
    Dr. Roe. Got it increased. I am not sure I quite understand 
that, so, after we get through, I would like to ask you to put 
that in writing for me, if you would.
    Mr. Flohr. Okay.
    Dr. Roe. I certainly appreciate you all being here today.
    Mr. O'Rourke. Do you have further questions?
    Mr. O'Rourke. I may have just a couple, if you don't mind.
    Dr. Roe. Okay. You are recognized.
    Mr. O'Rourke. Thank you, Mr. Chairman.
    You know, following up on the question that Dr. Roe just 
asked, I would also like to see more information about the 
6,800 and how many of those were deemed employable again versus 
100 percent. And, of those who were deemed employable, how many 
actually found employment? I think that is important for us to 
know.
    And my second request or question is the four findings that 
the GAO has made, Mr. Flohr, that you have acknowledged and are 
working on, what is your deadline to complete the work 
necessary to come into compliance or to resolve the concerns in 
those?
    And if you have already given us that, I apologize. I 
didn't hear it.
    Mr. Flohr. We did give that information to Mr. Bertoni when 
we responded to their recommendations.
    We have a group that has been put together that includes 
people from the Vocational Rehabilitation and Employment 
Service, our Compensation Service, our general counsel, and we 
are looking at specific actions that we can take to improve the 
process. We have a number identified right now that have not 
yet been briefed, however, to our leadership. We expect to do 
that by the end of this month.
    In terms of the recommendation about updating IU guidance, 
we expect to do that within--or at least by the end of January 
2016 after we do some consistency reviews and determine really 
how can we better improve the process using both GAO's 
recommendations and what we find during our studies.
    Recommendation number two, to improve the quality assurance 
approaches, we have started doing that already. We expect to 
have that completed by October of this year.
    Recommendation three was verify self-reported income. We 
have talked about that. That is 2016, January.
    And recommendation four, develop a plan to study IU in 
terms of age or voc rehab assessments. We expect to have some 
either legislative proposals or regulation changes which would 
be required by the end of July, of this month.
    Mr. O'Rourke. Of this month. And do you feel confident in 
meeting all of those proposed deadlines?
    Mr. Flohr. At this point, from what I know, yes, sir, I do.
    Mr. O'Rourke. Okay.
    And then my last question, Mr. Chairman, is for Mr. 
Bertoni.
    When I had asked questions during the previous round about 
the 94-percent accuracy rating, Mr. Flohr said that that is 
done internally by the VA. You said you don't disagree with the 
94 percent, but you may disagree with what that represents. I 
would like to give you a chance to expand on that answer.
    Mr. Bertoni. Sure. Thank you.
    In terms of IU, the STAR reviews sample a very small 
proportion of the IU claims. So we have some concerns there 
about their ability to project for that subpopulation.
    Also, I think there is a very high standard within STAR and 
even within the in-process reviews that my colleague just 
mentioned, that the error has to be clear and undebatable. And 
it is very difficult for an examiner, even if they feel that 
there was a mistake made, to substitute their judgment in a 
particular instance.
    So it is almost impossible, to find an error in STAR and in 
in-process reviews. And I am a bit concerned, as they move 
forward, that they are not taking a different approach.
    I think there are other vehicles. They do special targeted 
studies, they do greater reliability reviews, they do these 
comparable questionnaires to try to get at, sort of, 
consistency that we believe may be better tools for getting at 
the inconsistencies, the root causes for inconsistencies, and 
ultimately building their training around those areas.
    Mr. O'Rourke. As with all VA measurements, I would like to 
see more independent assessments and verifications of anything 
that the VA reports because of past concerns--or, current 
concerns based upon past problems that we have had with VA 
self-reporting. So any further recommendations that you have or 
that the VSOs have, I think we are very open to hear those.
    Mr. Bertoni. For what it is, like I said, it is an accurate 
figure. But for what it is supposed to be doing, we don't 
believe it hits the mark.
    Mr. de Planque. One thing that we would additionally note 
on that, the STAR reviews--and their reviews tend to be 
things--did they make a particular evaluation, as opposed to 
what was the quality of that evaluation. And so they may get a 
check for they made the evaluation, but if you look further at 
it, the evaluation was done in an improper fashion or it didn't 
take the right things into account.
    And so you don't get any notion of the quality within that 
step. And so, at a 94-percent rate, yes, 94 percent of the 
steps may be being done, but it is a qualitative versus 
quantitative kind of measure in it, which sometimes leads to--
you know, that is where we would like to see more 
investigation, from an American Legion standpoint.
    Mr. O'Rourke. Great.
    And, again, if there is a specific proposal from American 
Legion or anyone else about how to more accurately assess how 
VBA is doing, I am very open to seeing that, and either VA 
adopts that or we can introduce that as legislation. So thank 
you.
    Thank you, Mr. Chair.
    Dr. Roe. Thank you, Mr. O'Rourke.
    And full disclosure, I just sent my American Legion dues in 
Monday. So I wanted to get that on the record. The check is in 
the mail.
    Thank all of you. You have been a terrific panel. I thank 
you for taking your time, preparing.
    This, obviously, is an important issue. I am sure there are 
many veterans out there watching this expectantly, and it is 
good to have this information.
    And if there are no further questions, and there are not, 
you all are now excused.
    Mr. O'Rourke. Do you have any closing comments?
    Mr. O'Rourke. I do not. Thank you.
    Dr. Roe. Okay.
    I would 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.
    Dr. Roe. I thank all the members who were here for being 
here today.
    Without any further comments, this meeting is adjourned.
    [Whereupon, at 12:35 p.m. the committee was adjourned.]

                                APPENDIX

               Prepared Statement of Chairman Jeff Miller

    I want to welcome our witnesses this morning.
    Today's hearing will focus on how VA is administering 
unemployability benefits.
    This important benefit compensates disabled veterans at the 100% 
rate, even though they are rated as less than 100% but, because of 
their service-connected disabilities, are unable to find or keep 
substantially gainful employment.
    In June 2015, GAO released a report that raises concerns about 
whether VA's procedures for adjudicating IU claims are resulting in 
consistent and accurate decisions, and whether Congress should review 
how VA applies the criteria used to determine eligibility for IU 
benefits.
    The cost of the IU benefit is growing at a fast pace.
    Disability compensation paid to veterans who qualify for IU 
benefits increased from $8.5 billion in FY 2009 to $11 billion in FY 
2013, which is a 30% increase.
    GAO estimates that in FY 2013, the cost of the IU benefit alone was 
$5.2 billion more than if the qualifying veterans had been paid based 
on their schedular evaluation.
    Given the growing cost, I was very disappointed to learn that VA 
has not implemented procedures to ensure that only veterans who are 
rightfully entitled to IU benefits are receiving those benefits.
    To qualify for IU benefits, veterans are required to report their 
income, yet VA stopped verifying veterans' self-reported income in 
2012.
    Let's be clear: we're not talking about an isolated problem in one 
or two regional offices.
    This is a systemic issue based on a decision by VBA's upper 
management to stop verifying veterans' self-reported income.
    According to GAO, VA's explanation for stopping the verification is 
that the Department planned to adopt a new electronic data system in FY 
2015, which, of course, is this year.
    The new system has still not been implemented, and will not be 
ready until next year--maybe.
    This begs the question of why did VA discontinue income checks 
before the new system was in place, and how much more time will elapse 
before VA resumes income verifications.
    The GAO report also raises the question of whether VA should 
consider age as a factor when deciding if a veteran is eligible to 
receive IU benefits.
    According to the GAO, in FY 2013, 180,043 IU beneficiaries were at 
least 65 years old--which represents a 73% increase from FY 2009.
    GAO found that approximately half of all new IU beneficiaries are 
age 65 and older.
    Even more surprising was that according to GAO, 408 veterans age 90 
and older began receiving IU benefits for the first time in FY 2013.
    Finally, this hearing will address another systemic problem within 
VA: the lack of consistency in the adjudication of disability claims.
    Although VA's written testimony provides a detailed description of 
its training program for IU rating specialists, the GAO report found 
that VA has not issued clear guidance to help rating specialists 
determine if a veteran is eligible for IU benefits.
    GAO also found that VA has neglected to establish a quality review 
assurance approach that would allow VA to ensure that IU decisions are 
complete, accurate, and consistent.
    I expect VA to explain in detail, the steps it is taking to 
implement GAO's recommendations to improve its training programs and 
quality review procedures.
    Finally, in the recent past, each of our witnesses has praised VA's 
vocational rehabilitation and employment program designed to put 
disabled veterans back to work. So what I don't understand is why an 
evaluation by that same program is not a part of the process for 
awarding IU benefits.
    I look forward to hearing from our witnesses about VA's plans to 
fix this program and ensure taxpayer dollars are used as intended: to 
compensate veterans who are unable to work because of a service-
connected disability.



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                  Prepared Statement of Ian de Planque

    A recent report of the Government Accountability Office (GAO) 
examining the Department of Veterans Affairs (VA) Total Disability 
Individual Unemployability (TDIU) benefit recommends cutting the 
benefit for veterans over the age of 65.\1\ The American Legion 
strongly disagrees with this recommendation, as it is not only in 
direct contradiction to clear directions from the Code of Federal 
Regulations, but it also flies in the face of the current trends in 
employment statistics and represents a bad precedent--the cutting of 
veterans' earned disability benefits because the costs of such benefits 
are increasing. The American Legion worked closely with the GAO in the 
preparation of the report, and does believe there are improvements that 
could help increase the efficiency of the program, but cuts to elderly 
veterans are not the way to begin.
---------------------------------------------------------------------------
    \1\ GAO Report-15-464-June 2015.
---------------------------------------------------------------------------
    Chairman Miller, Ranking Member Brown and distinguished Members of 
the committee, on behalf of National Commander Michael D. Helm and the 
over 2 million members of The American Legion, we thank you for the 
opportunity to testify regarding The American Legion's position on the 
Department of Veterans Affairs administration of individual 
unemployability benefits to our nations' veterans.
    The Department of Veterans Affairs (VA) defines individual 
unemployability as being a part of the overall disability compensation 
program that allows VA to pay certain veterans disability compensation 
at the 100% rate even though the VA has not rated the overall veterans 
service connected disabilities at 100% by the statutory rating 
scale.\2\ It is a recognition that some disabilities, while not rated 
at 100% may cause serious problems for individual veterans seeking 
gainful employment.
---------------------------------------------------------------------------
    \2\ http://www.benefits.va.gov/COMPENSATION/claims-special-
individual--unemployability.asp.
---------------------------------------------------------------------------
    The Department of Veterans Affairs (VA) disability rating schedule 
is based upon the severity of chronic medical conditions, and the 
impact of those conditions upon earnings. For example, if a veteran 
receives a 50 percent disability rating, the medical condition could 
impact 50 percent of a veteran's earnings in a labor-intensive work 
environment. Unfortunately, VA's rating schedule does not always 
reflect the individual impact of disabilities on individual veterans. A 
service-connected condition or the combined effects of multiple 
service-connected conditions could be so severe that the veteran is 
unable to gain and sustain meaningful employment, even if the veteran's 
disability rating is not fully 100 percent. As a result, VA provides 
TDIU benefit.
    According to the June 2015 GAO report--Veterans' Disability 
Benefits: VA Can Better Ensure Unemployability Decisions are Well 
Supported--in Fiscal Year (FY) 2013, there were approximately 333,000 
veterans that were receiving TDIU benefits.\3\ The report also 
indicated there was a 22 percent increase in number of veterans 
receiving the benefits and a 73 percent increase in veterans that were 
65 years and older. This is likely reflective of an aging veteran 
population, and the increasing life expectancy of Americans.
---------------------------------------------------------------------------
    \3\ GAO Report-15-464-June 2015.
---------------------------------------------------------------------------
    The GAO report suggests discontinuing TDIU benefits beyond the 
Social Security Administration's full retirement age; the logic that 
was provided was that veterans older than the full retirement age would 
not be working due to age and would likely have income from other 
sources. However, The American Legion disagrees because this not only 
contradicts clearly stated law in the regulations, it also is not an 
accurate reflection of the changing statistics of the American 
workforce.

    VA benefits are codified in the Code of Federal Regulations, where 
it clearly states:
    Age may not be considered as a factor in evaluating service-
connected disability; and unemployability, in service-connected claims, 
associated with advancing age or intercurrent disability, may not be 
used as a basis for a total disability rating. Age, as such, is a 
factor only in evaluations of disability not resulting from service, 
i.e., for the purposes of pension.\4\

    \4\ 38 CFR Sec.  4.19.
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    Furthermore (emphasis added):

    . . . if the total rating is based on a disability or combination 
of disabilities for which the Schedule for Rating Disabilities provides 
an evaluation of less than 100 percent, it must be determined that the 
service-connected disabilities are sufficient to produce 
unemployability without regard to advancing age.\5\
---------------------------------------------------------------------------
    \5\ 38 CFR Sec.  3.341(a)

    The regulations are clear and have been enforced in this 
manner for decades without problems. It's not just the way VA 
has implemented the program, it's the law.
    In addition, the labor statistics show that Americans are 
working later and later into their 60's and beyond, as health 
and lifespan have improved. From 1977-2007, Americans age 65 
and older in the workforce has increased by 101 percent, 
according to the Bureau of Labor Statistics (BLS); of these 
individuals, 56 percent are working full-time. These Americans 
are eligible to collect Social Security retirement benefits 
concurrent with income received through their employment, 
according to Social Security's regulations.\6\
---------------------------------------------------------------------------
    \6\ Social Security: June 2015: ``How Work Affects Your Benefits''
---------------------------------------------------------------------------
    When preparing this report, GAO worked closely with The 
American Legion to understand TDIU benefits. During the 
process, The American Legion indicated that veterans receiving 
TDIU are by definition unable to sustain employment. For the 
Americans discussed in the BLS report, they are able to receive 
both Social Security benefits and the financial gain of 
employment. If TDIU benefits were eliminated at retirement age, 
those veterans receiving TDIU prior to retirement would only be 
able to survive off of Social Security benefits.
    Furthermore, many veterans receive TDIU for decades prior 
to retirement. Due to this fact, they often do not receive an 
employer retirement package. Additionally, as the veterans 
would not have been contributing to Social Security during the 
period of receiving TDIU, their Social Security benefits would 
be greatly reduced. In the end, veterans that suffered severe 
medical conditions related to their military service to this 
nation that prevented an ability to work would ultimately 
suffer significant financial hardship once they reached 65 
years old. The American Legion opposes `any administrative or 
legislative proposal to dilute or eliminate any provision of 
the disability compensation program'' \7\ and will always 
oppose such diminutions.
---------------------------------------------------------------------------
    \7\ Resolution No.18-AUG 2014.
---------------------------------------------------------------------------
    Another significant area of concern highlighted in the 
report was the manner in which TDIU claims were being 
adjudicated. VA instructs its raters how to adjudicate the 
claims; however, the implementation of the instructions varies 
based upon the individual rater. As a result, a certain level 
of inconsistency in the delivery of the benefit occurs. The 
report also points to VA's quality assurance approach and an 
inability to provide a comprehensive assessment of TDIU 
adjudications.
    The American Legion has testified before Congress on 
multiple occasions regarding VA's inconsistencies in the 
adjudications of claims; these concerns extend beyond TDIU 
benefits to the types of VA disability claims that are being 
adjudicated. In December 2013, The American Legion testified 
regarding concerns pertaining to VA's evaluation process. 
Within the testimony, we stated that VA fails to truly provide 
a comprehensive evaluation, instead opting for a checklist 
format to indicate that certain considerations have been 
offered.\8\ We continue to assert that a thorough evaluation is 
unable to occur if VA does not conduct a thorough evaluation of 
its own processes. The entire purpose of the TDIU rating is to 
reflect a comprehensive understanding of the unique impact of 
the complete disability picture on an individual veteran.
---------------------------------------------------------------------------
    \8\ HVAC Subcommittee on Disability Assistance and Memorial Affairs 
Hearing-Dec 4, 2013.
---------------------------------------------------------------------------
    In December 2012, VA announced that individuals receiving 
VA pension benefits no longer are obligated to complete an 
annual Eligibility Verification Report (EVR). The EVR was 
designed to verify that beneficiaries were earning below the 
prescribed amount for eligibility. Within VA's announcement, 
they indicated that they had formed a relationship with the 
Internal Revenue Service (IRS) and Social Security 
Administration (SSA) to verify income. The American Legion 
supported the VA's announcement, recognizing that this would 
improve efficiency in the administration of the VA pension 
program.\9\
---------------------------------------------------------------------------
    \9\ VA eliminates Eligibility Verification Report-Dec. 20, 2012.
---------------------------------------------------------------------------
    Similar to VA's pension program, TDIU has income 
requirements. While the GAO report notes that VA has plans to 
release an electronic data system that it is compatible with 
SSA, it is frustrating that this has been unavailable to 
veterans receiving TDIU benefits; meanwhile, compatibility 
appears to exist for the pension program.
    Previous employer cooperation also appears to hinder the 
adjudication process. Had VA been utilizing the relationship 
created in 2012 with SSA and the IRS, employer cooperation 
would not be required. Waiting for employers to report income 
likely takes significantly longer than reviewing an electronic 
database. The American Legion supports efforts to address all 
claims, to include its growing inventory of appeals, in an 
expeditious and accurate manner, provided that no program 
diminishes a veteran's due process rights.\10\ If VA employs 
the process it efficiently uses with its pension beneficiaries, 
it would expedite the manner in which some claims are 
adjudicated.
---------------------------------------------------------------------------
    \10\ Resolution No. 28: May 2015.
---------------------------------------------------------------------------
    The American Legion believes efficiencies with TDIU can be 
achieved through better electronic communication between VA, 
SSA, and the IRS, much in the same way these efficiencies have 
been achieved in the pension program. It's a way to improve the 
overall operation of the program.

Conclusion

    The American Legion fully supports TDIU. We recognize that 
military service is inherently dangerous, and that service may 
have severe physical and psychological consequences. Quite 
simply the VA rating schedule does not address each symptom or 
condition, and the severity of a medical condition may prevent 
employment for some veterans while not impacting other veterans 
quite as severely. Through having a strong TDIU program, we are 
able to ensure that our nation's veterans receive the necessary 
compensation awarded due to catastrophic medical conditions 
incurred by our veterans.
    There are ways to improve the TDIU program--better data 
efficiency by communication with other agencies and attention 
to most consistent adjudication would be two of them. Ensuring 
adjudicators understand the importance of looking at the entire 
disability picture of the veteran in question is essential to a 
well run program.
    However, cutting benefits to elderly veterans is a non-
starter, and The American Legion strongly urges the Committee 
to dismiss this GAO recommendation. It contradicts the law, it 
contradicts labor statistics, and it will directly hurt 
veterans who have been devastatingly injured in service to this 
country.
    As always, The American Legion thanks this committee for 
the opportunity to explain the position of the over 2 million 
members of this organization. Questions concerning this 
testimony can be directed to Warren J. Goldstein, Assistant 
Director in The American Legion's Legislative Division at (202) 
861-2700, or [email protected].



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