[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
of converting between various electronic formats may introduce
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current publication process and should diminish as the process is
further refined.
C O N T E N T S
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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
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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.
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\1\ GAO Report-15-464-June 2015.
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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.
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\2\ http://www.benefits.va.gov/COMPENSATION/claims-special-
individual--unemployability.asp.
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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.
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\3\ GAO Report-15-464-June 2015.
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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\
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\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\
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\6\ Social Security: June 2015: ``How Work Affects Your Benefits''
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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.
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\7\ Resolution No.18-AUG 2014.
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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.
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\8\ HVAC Subcommittee on Disability Assistance and Memorial Affairs
Hearing-Dec 4, 2013.
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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\
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\9\ VA eliminates Eligibility Verification Report-Dec. 20, 2012.
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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.
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\10\ Resolution No. 28: May 2015.
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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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