[Senate Hearing 114-609]
[From the U.S. Government Publishing Office]




 
     MILITARY CONSTRUCTION, VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2016

                              ----------                              


                        THURSDAY, MARCH 19, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 10:30 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mark Kirk (chairman) presiding.
    Present: Senators Kirk, Boozman, Capito, Cassidy, Tester, 
Udall, and Schatz.

                     DEPARTMENT OF VETERANS AFFAIRS

                    Veterans Benefits Administration

STATEMENT OF HON. ALLISON A. HICKEY, UNDER SECRETARY 
            FOR BENEFITS
ACCOMPANIED BY:
        JAMES E. MANKER, JR., CHIEF FINANCIAL OFFICER
        THOMAS MURPHY, DIRECTOR, COMPENSATION SERVICE

                 OPENING STATEMENT OF SENATOR MARK KIRK

    Senator Kirk. The subcommittee will come to order. We are 
very happy today to have Under Secretary Allison Hickey, who 
led a long and distinguished career in the wrong service, the 
Air Force.
    I was joking with you why you did not join the Navy, which 
you should have. I would just advise you of that. Let me say 
that we have now Allison Hickey, the Under Secretary of the 
Veterans Benefits Administration (VBA), and Jamie Manker, the 
CFO for VBA. And I am very happy to have you here.
    With that, let me recognize my good friend, Jon Tester.

                    STATEMENT OF SENATOR JON TESTER

    Senator Tester. Well, thank you, Mr. Chairman, and thank 
you for being generous with your time. Thank you very much. 
And, Secretary Hickey, Mr. Manker, Mr. Murphy, thank you all 
for being here today in front of this subcommittee.
    VA compensation and pension benefits provide a lifeline of 
support for millions of Americans who have worn the uniform of 
this Nation, especially disability compensation for those who 
have been injured in the line of duty. And, Secretary Hickey, I 
appreciate your aggressive efforts that you and your colleagues 
have made to reduce the disability claims backlog, streamlining 
the claims process, and transforming the way VBA does business.
    These efforts have reduced the backlog from 611,000 in 
March 2013 to 215,000 claims as of today. But I think we all 
recognize that there is much more work that has to be done not 
just to eliminate the backlog, but also to position the VBA so 
that we do not see a future backlog, particularly given the 
continuing rise in filings and the complexity of the claims.
    Secretary Hickey, you are facing a tough challenge, and I 
look forward to hearing the details of your budget request and 
the reforms that you are recommending to bring the VBA into the 
21st century. With that, once again, thank you all for being 
here, and I will turn it back to you, Mr. Chairman.
    Senator Kirk. Thank you. Let us go with--sure, I will do my 
opening statement here. Secretary Hickey, you have aggressively 
tackled the veterans' claims backlog. We have talked a lot 
about this with my obvious interest in the Chicago regional 
office, to make sure--the general question that I would have 
for you, the issue I would put before you, now I think it is an 
average of 172 days in Chicago.
    The point that I would like to make, you know, for normal 
Americans, for a veteran who has suffered a catastrophic 
injury, like amputation, there should be a way within 24 hours 
of adjudicating the disability of that person. Most Americans 
would say if there is a missing leg, boom, we should just 
adjudicate that within a day. I would just highlight that 
point. That concludes my statement.
    I wanted to recognize you for helping. You may give your 
opening statement.

              SUMMARY STATEMENT OF HON. ALLISON A. HICKEY

    Secretary Hickey. Thank you very much, chairman. Chairman 
Kirk, Ranking Member Tester, members of the subcommittee, thank 
you for the opportunity to present VBA's 2016 budget request. 
In addition to Jamie Manker to my left, I also have with me 
today Tom Murphy, who is the director of compensation service.
    Our 2016 budget request includes $2.7 billion in 
discretionary funds and $95.3 billion in mandatory funds, 
reflecting the ever-growing demand for VA benefits and 
services. Our obligation to veterans continues to grow because 
demand for benefits continues to increase long after war's end.
    The percent of the veteran population receiving 
compensation was nearly constant for 40 years at 8.5 percent. 
Over the last 15 years, it has increased to 19 percent. The 
average disability rating has also increased. After 45 years 
with a consistent average rating of 30 percent, the average has 
risen to 48 percent since 2000. In addition, the number of 
veterans filing claims and the number of medical issues within 
those claims has soared. GWOT veterans separating through our 
Benefits Delivery at Discharge Program claim an average of 16 
medical issues compared to only four issues that were claimed 
by our World War II veterans and six issues by Vietnam era 
veterans.
    Despite these challenges, VBA's workforce, 53 percent of 
whom are veterans themselves, are making major strides in 
increasing productivity and reducing the claims backlog. The 
number of claims completed per full-time equivalent (FTE) 
increased 25 percent from 2012 to 2014. A more accurate 
representation is the 67 percent increase in productivity at 
the issue level from 2009 to 2014.
    As a direct result of our transformation, we have reduced 
the pending disability claims inventory by 46 percent and the 
claims backlog by 66 percent. Progress made has not come at the 
expense of quality. We have increased claim-based accuracy from 
83 percent in June 2011 when I arrived to nearly 92 percent 
today, and issue-based accuracy has improved to 96 percent. 
Veterans are waiting less time for decisions and benefits. The 
average time to decide a claim has improved by 170 days, and 
the average age of pending claim has improved by 144 days.
    In 2014, we completed a record breaking 1.32 million 
claims, a 35-percent increase over the 980,000 claims completed 
in 2009. But there has even been more dramatic growth in the 
number of issues completed, 2.7 million in 2009 to 5.5 million 
in 2014. That is a 101 percent increase over just 5 years. We 
expect it to grow to 115 percent increase by 2017. With 
investments provided by the President and this Congress in 
recent years, we are on track to eliminate the claims backlog 
by the end of 2015.
    Our budget request includes critical investments in 
transformation initiatives and IT support. Previous IT 
investments helped VBA to now process over 6,500 education 
claims per day without any human intervention, while increasing 
accuracy to 99.6 percent. Our request also includes funding to 
right size our workforce. As VBA continues to receive and 
complete more rating claims, the volume of appeals, non-rating 
claims, and fiduciary exams correspondingly increases.
    In July 2014, VBA notified Congress of a need to hire 
nearly 1,700 FTEs to address this increase in workload. We are 
grateful for funding in 2015 to hire 250 of those who are 
asking for funding in 2016 to hire another 770. The hiring 
would include 200 appeals processors.
    The 11 to 12 percent appeals rate has not changed for over 
20 years. However, as we complete record breaking numbers of 
claims, the volume of appeals continues to grow. We need your 
support. Our only options are for Congress to either change the 
complex laws around appeals or provide additional resources to 
address this workload. Our 2016 request would also fund hiring 
320 non-rating claims processors and 85 field examiners for 
fiduciary.
    We appreciate the opportunity to discuss our budget request 
and look forward to working with you to identify and prioritize 
spending to best serve the interests of our Nation's veterans, 
their family members, and their survivors. And I am prepared to 
take your questions.
    [The statement follows:]
              Prepared Statement of Hon. Allison A. Hickey
    Chairman Kirk, Ranking Member Tester, Distinguished Members of the 
Senate Appropriations Committee, Subcommittee on Military Construction, 
Veterans Affairs, and Related Agencies: Thank you for the opportunity 
to present the President's 2016 budget and 2017 advance appropriations 
requests for the Veterans Benefits Administration (VBA). I am 
accompanied today by Mr. Jamie Manker, VBA's Chief Financial Officer, 
and Mr. Thomas Murphy, VBA's Compensation Service Director.
    VBA has the incredibly important mission of effectively delivering 
the benefits our Nation's veterans and their families have earned and 
deserve. In carrying out its mission, VBA employees have adopted and 
embraced the Department's core values of Integrity, Commitment, 
Advocacy, Respect, and Excellence--appropriately captured in the phrase 
``ICARE.'' Our workforce includes over 21,000 employees, 53 percent of 
whom are veterans themselves, and 34 percent of whom have service-
connected disabilities.
                     summary of 2016 budget request
    The President's 2016 budget for the Department of Veterans Affairs 
(VA) will allow VBA to manage integrated benefits and services, 
administered through a nationwide network of 56 regional offices (RO). 
The 2016 budget requests $2.7 billion in discretionary funds and $95.3 
billion in mandatory funds for VBA. The budget also requests a first 
time advance appropriation of $104.0 billion for 2017 for VBA's three 
mandatory appropriations, including Disability Compensation and 
Pensions, Readjustment Benefits, and Insurance and Indemnities. Funding 
for VBA is critical to continue providing the following benefits:

  --Disability compensation for 3.9 million veterans with service-
        connected disabilities;
  --Dependency and indemnity compensation for 369,000 veterans' 
        survivors;
  --Pension for 308,000 wartime veterans and 209,000 of their 
        survivors,
  --Vocational rehabilitation and employment benefits paid for over 
        99,000 veterans and servicemembers;
  --Education and training assistance for 1.2 million veteran students 
        and their families;
  --Home-loan assistance for 2.1 million veterans with active VA loans;
  --Fiduciary activities providing estate protection services for 
        173,000 VA beneficiaries unable to manage their own funds; and
  --Life insurance programs for 6.5 million servicemembers, veterans, 
        and their families.

    The President's 2016 budget request includes critical information 
technology investments supporting VBA's claims processing 
transformation and other essential initiatives to continue improving 
benefits delivery. For example, the Veterans Claims Intake Program 
makes investments in the conversion of paper claims to digital images, 
and the Veterans Benefits Management System facilitates electronic 
claims processing. In addition, the request includes funding to right-
size our workforce. As VBA continues to receive and complete more 
disability rating claims, the volumes of appeals, non- rating claims 
(claims that in most cases do not require a rating decision but 
directly impact benefits, such as survivors pension, burial claims, 
dependency claims, income adjustments, and drill pay adjustments), and 
fiduciary field examinations correspondingly increase. We anticipate 
that demand for benefits will continue to grow in fiscal year 2016. 
VBA's request for 770 additional FTE is necessary to meet veterans' 
expectations for more timely actions on non-rating claims and appeals 
and ensure strong fiduciary oversight.

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                increased demand for disability benefits
    Our obligation to veterans grows over time because veterans' demand 
for benefits continues to increase long after wars end. Even as we are 
becoming more productive through our Transformation, the demand for 
benefits and services from veterans of all eras continues to increase. 
For example, the population of Vietnam Era Veterans receiving 
disability compensation has not yet peaked--40 years after the Vietnam 
War ended. VBA anticipates a similar trend for Gulf War Era Veterans, 
26 percent of whom have already been awarded disability compensation. 
The total number of service-connected disabilities for veterans 
receiving compensation has grown from 11.8 million in 2009 to 17.8 
million in 2014--an increase of over 50 percent in just 5 years. This 
dramatic growth portends even greater growth in claims for increased 
benefits as veterans age and their disabilities worsen. It is also 
significant to note that VA is still providing benefits to the child of 
a Civil War Veteran 150 years after the Civil War ended.

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    Fueled by more than a decade of war, Agent Orange-related 
disability claims, a disjointed claim appeal process, demographic 
shifts, increased medical issues claimed, and other factors, veterans' 
demand for benefits has exceeded VBA's ability to timely meet it. VBA 
must build the capacity now to meet current demand and ensure we are 
prepared to meet future demand. We look forward to working with you to 
identify and prioritize spending to best serve the interests of 
veterans and our Nation.
    While the percent of the veteran population receiving compensation 
was nearly constant for over 40 years at 8.5 percent, over the past 15 
years there has been a striking increase to 19 percent.

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    The increase in veterans receiving disability compensation is 
accompanied by the significant rise in the average degree of disability 
compensation granted to veterans. For 45 years, from 1950 to 1995, the 
average degree of disability held steady at 30 percent. But, since 
2000, the average degree of disability has risen to 47.7 percent. VBA's 
mandatory spending is projected to reach $106 billion in fiscal year 
2017, twice the amount spent in fiscal year 2009.

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                         transformation results
    In order to meet this ever growing demand for benefits, VBA is 
undergoing the largest transformation in its history--bringing the 
delivery of VA benefits and services into the 21st Century. VBA is 
aggressively implementing its transformation plan--a set of actions 
targeted to reorganize and retrain its people, streamline its 
processes, and deploy technology designed to achieve VA's goal of 
processing all claims within 125 days with improved accuracy by the end 
of 2015. VBA has achieved the following transformation results:

  --VBA is reducing the pending disability claims inventory.
    --Peak: 884,000 claims in July 2012.
    --Now: 477,000 claims--Improvement: 46 percent.
  --The number of claims pending over 125 days and considered part of 
        the claims backlog has decreased.
    --Peak: 611,000 claims in March 2013.
    --Now: 215,000 claims--Improvement: 65 percent.
  --Rating accuracy has improved.
    --3-month claim-based accuracy increased from 83 persent in 2011 to 
            92 percent, an improvement of 9 percentage points.
    --3-month issue-based accuracy improved to 96 percent.
  --Veterans are waiting less time for decisions and benefits.
    --The average time to decide a veteran's disability claim:
      -- Peak: 348 days as of September 2013.
      --Now: 186 days--Improvement: 162 days.
    --The average age of pending disability claims:
      --Peak: 282 days in February 2013.
      --Now: 142 days--Improvement: 140 days.

    Improving quality and reducing the length of time it takes to 
process disability claims are integral to our mission of providing the 
care and benefits that veterans have earned and deserve in a timely, 
accurate, and compassionate manner. The disability rating claims 
workload continues to increase, due to the reduction in military 
forces, servicemembers returning from wars, and the aging of the 
veteran population. Also, the complexity of the workload continues to 
grow because veterans are claiming greater numbers of disabilities and 
the nature of disabilities--such as posttraumatic stress disorder 
(PTSD), combat injuries, diabetes and related conditions, and 
environmental diseases--is becoming increasingly complex.
    The number of separating servicemembers filing disability claims--
and the number of medical issues within those claims--have soared in 
recent years. The chart below highlights this growth, with Global War 
on Terror Veterans separating through our Benefits Delivery at 
Discharge program now claiming an average of 16 medical disabilities as 
a result of their military service--compared to only 3.9 issues for 
WWII Veterans and 6.4 issues for Vietnam Era Veterans.

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    In 2009, VBA completed almost 980,000 claims. In fiscal year 2014, 
we completed over 1.3 million--a 35 percent increase. But there has 
been even more dramatic growth in the number of medical issues in 
claims--2.7 million in 2009 to 5.5 million in 2014, a 101 percent 
increase over just 5 years.

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    Despite these challenges, VBA has made major strides in increasing 
its productivity and thereby reducing the claims backlog by 65 percent 
since its peak in March 2013 (from 611,000 to 215,000). Through VBA's 
claims transformation initiatives, the number of claims completed per 
FTE increased 25 percent from 2012 to 2014. An even more accurate 
representation of VBA's increase in productivity is seen at the medical 
issue-level rather than the claim-level. From 2009 to 2014, VBA's 
issue-level productivity increased by 67 percent. VBA greatly 
appreciates the investments provided by the President and Congress over 
the past 6 years, and we are on track to meet the President's goal to 
eliminate the disability claims backlog and processing all claims 
within 125 days by the end of 2015.

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         transformation initiatives in the 2016 budget request
    VBA's transformation progress is the result of an integrated series 
of initiatives designed to eliminate the backlog. The President's 2016 
budget will allow VBA to continue building on the success of the 
following initiatives:

  --Veterans Claims Intake Program (VCIP): VCIP streamlines processes 
        for receiving digital records and data into the Veterans 
        Benefits Management System (VBMS) and other VBA systems, 
        transitioning VBA from a paper-based claims environment to a 
        digital operating environment. It scans paper claims, converts 
        them into digital format, and extracts important data for input 
        into electronic folders. VCIP has converted and uploaded more 
        than 1.2 billion images from paper. In addition to supporting 
        scanning operations for incoming claims, VBA's 2016 request of 
        $140.8 million will allow the digital intake of military, 
        income, and employment records from other Federal agencies and 
        private providers. This will broaden electronic evidence 
        exchange for processing all types of claims more accurately and 
        more rapidly by building additional interfaces for Official 
        Military Personnel Folders (OMPF) from DOD and interfaces with 
        health networks, hospitals, and private clinicians.

  --Centralized Mail: Centralized mail consolidates inbound paper mail 
        from VA's ROs to a centralized intake site. This initiative 
        expands VBA's capabilities for scanning and conversion of 
        claims evidence, increases electronic processing capabilities, 
        and assists in converting 100 percent of received source 
        materials to electronic format. VBA has deployed centralized 
        inbound mail for all ROs. The 2016 budget request of $18.3 
        million provides resources to sustain operations at all 56 ROs 
        and positions VBA to expand centralized mail operations to 
        other lines of business and centralize outbound correspondence 
        to veterans.

  --Veterans Benefits Management System: VBMS, as VBA's key business 
        transformation initiative, provides a paperless claims-
        processing environment and improved business processes to 
        provide veterans and their dependents with timely, high-quality 
        decisions. National deployment of VBMS was completed June 2013 
        and provides access to over 28,000 end users. VBMS allows VBA 
        to centrally manage the claims workload at the national level 
        and direct cases electronically across its network of ROs to 
        more efficiently match claims demand with available processing 
        capacity. VBA went from touching 5,000 tons of paper annually 
        to now processing 95 percent of the claims inventory 
        electronically in VBMS. VBA has now completed over 1.32 million 
        claims in VBMS. In 2015, VBMS is focused on delivering the 
        National Work Queue (NWQ) and reducing reliance on legacy 
        systems. In 2016, VBMS enhancements will focus on the 
        Integrated Disability Evaluation System, appeals, and pension.

  --National Work Queue: VBA will distribute claims electronically from 
        a centralized queue based on RO capacity using the electronic 
        NWQ, a national workload management strategy. With all claims 
        placed in the electronic NWQ, veterans' claims will be 
        automatically directed across all ROs to efficiently match 
        claim demand with available expertise and processing capacity 
        regardless of RO jurisdiction, delivering benefits to veterans 
        more quickly and accurately. The electronic inventory provides 
        real-time updates, no matter where the claim is assigned for 
        processing. Veterans are still able to receive assistance with 
        their claims by visiting their RO for personal assistance at 
        the public contact sites, going on-line through eBenefits from 
        anywhere, and utilizing VBA's National Call Centers across the 
        Nation. In 2016, VBA is requesting $3.2 million to provide the 
        requisite funding to resource and support 13 employees to 
        manage the NWQ across the VBA enterprise.

  --Veterans Relationship Management: The VRM initiative continues to 
        facilitate an increasingly more veteran-centric digital 
        operating environment. VRM is delivering a scalable, 
        enterprise-wide, services-based technology environment that 
        will be the foundation for how veterans are served and how 
        benefits and services are delivered. This new model will 
        provide VA an integrated services delivery platform with the 
        approach of placing the veteran at the center of the service 
        with all business requirements and design being driven from the 
        veteran perspective.
          Components of VRM include eBenefits, the Stakeholder 
        Enterprise Portal (SEP), Customer Relationship Management 
        solutions, Digits-to-Digits, Knowledge Management, and Veterans 
        Online Application Direct Connect. Through the eBenefits 
        portal, veterans can submit claims for benefits, administer 
        their accounts, and receive status updates. The eBenefits Web 
        portal standardizes claim intake and enables collaboration with 
        VSOs to assist veterans with all interactions with VA. VA 
        continues to expand the capabilities available through the 
        eBenefits portal as more veterans use the site. Today eBenefits 
        has 4.4 million registered users and over 48 million visits 
        annually. VBA's 2016 request for $13.8 million, in addition to 
        the $67 million requested for VRM in the Office of Information 
        Technology, will support ongoing operations and continued 
        efforts to pilot and deploy new solutions for VBA mobile 
        applications that expand access to self-service tools and 
        benefits/services information in VBA portal environments; 
        develop new service features in SEP for medical providers, loan 
        officers, fiduciaries, and funeral directors; and integrate 
        VetSuccess with Career Center for Veterans, enabling searches 
        for jobs posted by unique employers targeting veterans.
                      right-sizing vba's workforce
    VBA's success in reducing the disability claims backlog is also 
due, in part, to its strong reliance on mandatory overtime by claims 
processors. Staff at all ROs worked mandatory overtime for 8 months in 
2014 and resumed mandatory overtime on January 12, 2015, to accelerate 
the reduction in the backlog following the heavy leave usage period 
during the holiday season, and to mitigate the impact of any additional 
weather-related office closures during the winter months. Employees 
processing disability compensation claims are working 20 hours of 
mandatory overtime per month. However, this strategy is not sustainable 
from a human capital management perspective, and VBA is investing in 
other initiatives, like right-sizing our workforce and training, to 
improve performance. We are also taking the lessons learned in 
eliminating the disability claims backlog and applying them to 
transform business processes supporting the fiduciary program, the 
delivery of non-rating benefits, and the appellate workload.
    For 2016, VBA requests $2.7 billion for general operating expenses, 
an increase of $165.8 million (6.6 percent) over the 2015 enacted 
level. These resources will support 21,871 Full-Time Equivalent (FTE) 
employees and allow VBA to administer compensation and pension benefits 
totaling $83.1 billion to over 5.2 million veterans and survivors; 
education benefits and vocational rehabilitation and employment 
benefits and services to nearly 1.3 million participants; guarantee of 
more than 431,000 new home loans; and provide life insurance coverage 
to 1.1 million veterans, 2.3 million servicemembers, and 3.1 million 
family members.
    As highlighted earlier in this testimony, VBA continues to receive 
and complete more disability rating claims, resulting in corresponding 
increases in the volumes of appeals, non-rating claims, and fiduciary 
field examinations.

  --Appeals. Over the last 20 years, appeal rates have continued to 
        hold steady at between 11 and 12 percent of completed claims. 
        As VBA continues to receive and complete record-breaking 
        numbers of disability rating claims in recent years (1.3 
        million claims completed in 2014), the volume of appeals 
        increases concomitantly. The number of statements of the case 
        and other appellate actions completed by VBA on veterans' 
        appeals has increased 31 percent since 2011, from 135,000 
        actions to 177,000 actions. VBA currently has approximately 
        290,000 pending appeals.

  --Non-rating claims. VBA's success in completing rating decisions has 
        driven an increase in non-rating claims. Despite completing a 
        20-year record number of non- rating claims in 2014, this work 
        continues to grow. In 2015, VBA expects to receive 2.9 million 
        non-rating claims and review actions, an increase of 7.4 
        percent over 2014 (2.7 million) and 20.8 percent over 2013 (2.4 
        million).

  --Fiduciary program. In 2014, VBA's fiduciary program protected more 
        than 173,000 beneficiaries, which is a 42 percent increase in 
        the number of beneficiaries from 2011 (122,000). Primary 
        drivers of the growth in this program are the increase in the 
        total number of beneficiaries receiving VA benefits and an 
        aging beneficiary population. In 2014, fiduciary personnel 
        conducted over 86,000 field examinations, and VBA anticipates 
        field examination requirements to exceed 117,000 in 2016.

    To ensure all aspects of the claims process are improved for 
veterans, VBA is requesting additional claims processors and field 
examiners. VBA is requesting $85 million to fund 200 appeals 
processors, 320 non-rating claims processors, 85 fiduciary field 
examiners, and 165 support personnel (including 13 FTE for the National 
Work Queue (NWQ)), for a total of 770 additional FTE. VBA employees--53 
percent of whom are veterans--are leading advocates for veterans, 
servicemembers, their families, and survivors and are key to our 
success. With the additional 770 employees, VBA will provide veterans 
with more timely decisions on their appeals and non-rating claims, and 
conduct thousands more vital fiduciary home visits.
    VBA is able to accommodate additional staff without additional 
space requirements by digitalizing veterans folders:

    Winston-Salem RO: Before and After Transformation:

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         high levels of demand continue in all benefit programs
    In addition to benefits provided through VA's compensation and 
pension programs, VBA's fiscal year 2016 budget request supports 
delivery of insurance, education, vocational rehabilitation, 
employment, transition, and home loan guaranty benefits.
    VBA, through its Insurance program, maintains life insurance 
programs that give financial security and peace of mind for 
servicemembers, veterans, and their families. Insurance claims are 
currently paid in an average of 3 days at 99 percent accuracy. The 
Insurance program request is $35.14 million, of which $867,000 is in 
the GOE appropriation and $34.27 million is reimbursable by the 
Insurance funds. This request will support 347 FTE and provides 
servicemembers and their families with universally available life 
insurance, as well as traumatic injury protection insurance for 
servicemembers. In 2016, VA insurance programs will provide $1.3 
trillion of insurance coverage to 2.3 million servicemembers, 1.2 
million veterans, and 3 million spouses and children.
    VA's education programs provide education and training benefits to 
eligible servicemembers, veterans, and dependents. The 2016 budget 
request reflects VBA's commitment to their needs. The request is $207.5 
million and 1,904 FTE to provide veterans, servicemembers, Reservists, 
and qualified family members with educational resources. These programs 
are designed to assist in the readjustment to civilian life, help the 
armed forces both recruit and retain members, and provide the 
opportunity to enhance the Nation's economic competitiveness through 
the development of a more highly educated and productive workforce. The 
most utilized of VA's education programs is the Post-9/11 GI Bill. As 
of February 21, 2015, VA has issued approximately $49.5 billion in 
Post-9/11 GI Bill benefit payments to 1,359,148 individuals and their 
educational institutions since program inception in August 2009. As a 
result of VA's success in automating the processing of Post-9/11 GI 
Bill claims, VBA is now providing benefits to the majority of Post-9/11 
GI Bill beneficiaries in an average of 6 days at 99 percent accuracy.
    The Vocational Rehabilitation and Employment (VR&E) program request 
is $322.8 million and 1,594 FTE. VR&E is a veteran-centric program 
providing the services and assistance to enable veterans with service-
connected disabilities become employable and obtain and maintain 
suitable employment or, to the maximum extent feasible, achieve 
independence in daily living. Through the VR&E program, VBA provides 
employment and independent living services including career vocational 
counseling, job search assistance, and post-secondary training for 
service-disabled veterans. VBA will also enhance outreach and service 
delivery of educational and vocational counseling services. These 
services will be delivered by Vocational Rehabilitation Counselors, 
Integrated Disability Evaluation System counselors, and contract 
rehabilitation counselors. These counseling services will also be 
provided through the VetSuccess on Campus programs at more than 94 
schools.
    VBA is also investing in the successful transition of 
servicemembers, building pathways to meaningful career opportunities 
for veterans by bringing them together with educators and employers 
across U.S. cities and communities and leveraging unique VA and 
interagency programs and resources to improve economic outcomes for 
veterans. VBA's plan to support these veterans includes the following 
strategic areas:

  --Veterans Employment Center (VEC): Provides transitioning 
        servicemembers, veterans, and their families with a single 
        authoritative Internet source that connects them with job 
        opportunities, and provides tools to translate their military 
        skills into plain language and build a profile that can be 
        shared--in real time--with employers. Employers have made 
        commitments to hire over 390,000 individuals. Over 1.7 million 
        private and public-sector jobs are listed on the VEC.

  --Transition Goals, Plans, Success (GPS): The Transition GPS program 
        helps separating servicemembers prepare for civilian life by 
        providing benefits briefings and other transition activities. 
        VBA has provided over 45,000 benefits briefings, career 
        technical training courses, and support for capstone events to 
        over 550,000 servicemembers and their family members (this 
        count does not represent unique servicemembers).

  --MyVA (City) Economic Opportunity Campaign: VBA is collaborating 
        with public and private partners in more than 20 communities 
        across the country to help connect and amplify available 
        resources and support for veterans and their families.

    The VA Home Loan Program ensures veterans can obtain, retain, and 
adapt their home by guaranteeing their loan against foreclosure. The 
Housing program request of $139.4 million and 907 FTE is funded through 
appropriations to credit accounts and helps eligible veterans, Active 
Duty personnel, surviving spouses, and members of the Reserve 
components and National Guard purchase, retain, and adapt homes in 
recognition of their service to the Nation. VA's partial guaranty on 
loans made by private lenders enables our clients to purchase homes 
with little or no down payment. Many of these borrowers would be unable 
to purchase a home without VA's assistance. VBA guaranteed 438,398 home 
loans and helped 80,000 veterans avoid foreclosure in 2014, while 
maintaining the lowest foreclosure rate (1.56 percent) in the industry 
for 25 of the last 27 quarters.
                              legislation
    In addition to presenting VBA's resource requirements, the 2016 
President's budget proposes legislative actions that will benefit 
veterans. VBA in this budget proposes changes in disability claims 
processes, an area where reform is greatly needed, for the benefit of 
all veterans who are frustrated with the time it takes to resolve 
claims and appeals. We are open to all ideas from the subcommittee and 
from VSO's to modernize this process, and make it work for veterans. 
Our increased manpower and great strides in automation are helping, but 
these cannot replace statutory changes to modernize the process.
                                closing
    We appreciate the opportunity to provide additional information on 
VBA's 2016 budget request and to share with you the progress we are 
making in transforming the delivery of benefits and services for our 
veterans and their families. The work we do continues and grows for 
decades after the end of America's conflicts. I assure you of our 
commitment to achieving improvements that will expedite the delivery of 
benefits, improve quality, and ensure we are providing timely, 
accurate, and comprehensive information and assistance to all those we 
serve.
    In today's challenging fiscal and economic environment, we must be 
diligent stewards of every dollar and apply them wisely to ensure that 
veterans--our clients-- receive timely access to the highest quality 
benefits and services we can provide and which they earned through 
their sacrifice and service to our Nation.
    This concludes my remarks. I am happy to respond to any questions 
from you or other members of the subommittee.

              SOCIAL SECURITY ERRONEOUS DEATH NOTIFICATION

    Senator Kirk. Thank you, Under Secretary. I will start the 
questions. Let me ask you, 60 Minutes did a big, long report on 
the deceased Americans that were still getting benefits. Can 
you describe your work to make sure we are not paying people 
who have already passed away?
    Secretary Hickey. Thank you, chairman, for the question. 
And prior to the 60 Minutes show this past weekend, we had been 
working extensively with the Social Security Administration, as 
have we with other agencies, and had done some really good work 
with them to help move us forward on claims.
    One of the conversations I had a week before the 60 Minutes 
show was a note to the current acting Commissioner at the 
Social Security Administration to ask if we could set up 
another team effort like we have done in the past to address 
whether veterans might show up on those lists, and how we can 
avoid sending a veteran a letter who is alive and saying you 
are not alive, you are deceased. And then how we can go about 
being part of the solution for both Social Security and 
preventing any of those letters from showing up to our veterans 
that are in error.
    Senator Kirk. I would say that almost the entire private 
sector does not bother to send mail or sales promotions to 
people who are dead. We want to make sure that we are as good 
as any mass mailer in America with your operation. I would hope 
you would also work with the big list providers in America to 
make sure that we are following the same practices and not 
wasting money by issuing checks to people who are already in 
the great beyond.
    Secretary Hickey. So, chairman, a great question, a great 
comment. Certainly as I have been doing for the last several 
years, I am working with commercial industries that do similar 
work to what VBA does. In fact, I have been repeatedly over the 
last 2 years meeting with their chief claims officers and 
learning about what they do. And this is one I would be happy 
to discuss with them as well.

                        CHICAGO REGIONAL OFFICE

    Senator Kirk. Thank you. Let me drill into the Chicago 
regional office. Right now I am told that we have about a 172-
day delay in adjudicating a disability claim there. I ask you 
to facilitate my visit there so I could personally go through 
the process there.
    Secretary Hickey. So, chairman, happy to do so. In fact, I 
would love to join you in that process. And I think when you 
get there, what you would find is that we are phenomenally 
different than we were even a couple of years ago.
    Senator Kirk. There may be some deep dish pizza and some 
Italian beef in it for you.
    Secretary Hickey. I will do that. I would love that. I have 
had good food in Chicago before, and I would look forward to 
the opportunity to do so again.

                  VETERANS BENEFITS MANAGEMENT SYSTEM

    Let me just tell you nationally, I mentioned in my opening 
statement we have fundamentally transformed this organization. 
We are now 95 percent of our work is done in a digital 
environment where we have scanned over 1.3 billion images into 
Veterans Benefits Management System (VBMS), and now processing 
just about everything we do in a digital way. That did not 
exist 2 years ago, and it certainly did not exist in Chicago 2 
years ago, and it made us very inefficient. We were touching 
5,000 tons of paper every single year with little rubber 
fingertips on our fingers trying to make a very ineffective and 
inefficient process better.
    We now today have VBMS built. There are 28,000 or more 
users on it, and that has resulted in some very good effects 
for our veterans, their family members, and survivors. By 
example, in Chicago, since they peaked in their backlog in June 
2012, they now have reduced that backlog by 65 percent, and 
they are on target to bring it all the way down. And they did 
not trade speed for quality.
    I think it is worthy to know they have increased their 
quality at the claims level by more than 11 percentage points, 
and at the issue-based level they are now at 92, almost 93 
percent in their quality. So doing better answers and faster 
service to our veterans. And they will be part of our getting 
all the way down in this backlog this year.
    Senator Kirk. Thank you. Mr. Tester.
    Senator Tester. I am going to defer to Senator Schatz.

            ELIGIBILITY DETERMINATION AND CLAIMS PROCESSING

    Senator Schatz. Thank you, Senator. Schatz, yes, you got it 
right. Thank you, Senator Tester. Thank you, Mr. Chairman. Ms. 
Hickey, thank you for your great work, and I know you have been 
making good progress.
    I want to ask--I want to drill down a little bit on where 
the choke points are in terms of eligibility determination and 
claims processing--disability claims processing. The specific 
question I have is obviously you are getting into the modern 
era. You are making the IT investments, the software 
investments that are necessary. But presumably, there is a sort 
of suite of solutions that you have had to apply, and maybe it 
is personnel. You know, obviously you have had shortfalls in 
terms of clinicians. Sometimes it is clerical, and then 
sometimes it is policies and procedures.
    Can you describe to me where the various choke points are 
and how you kind of do real time assessments, because it seems 
to me you could add clinicians, but if you are not processing 
the claims, then you are stuck. You could add clerks or you 
could improve IT, and if you do not have the clinicians, you 
are stuck.
    And so, how do you kind of make those assessments, and then 
how do you report back to the Congress, because presumably 
those are operational questions. But we have a tendency to sort 
of say we did 1,500 additional FTEs; therefore, go do your 
thing. And I am concerned that we are not giving you enough 
flexibility, and there is not enough of a dialogue about where 
the actual choke points are where we fix last year's choke 
point and there may be a new emerging one.
    Secretary Hickey. So, Senator, thanks for the question, and 
what you are describing basically is the transformation plan. 
When I came into this job in June 2011, I had to deliver to the 
Senate within 45 days a transformation plan that we have 
largely executed to today 45 different initiatives. Let me give 
you a sense of some of the big ones--people, process, and 
technology that we did.
    First thing we did is what industry has done, which is we 
looked at how could we segment the work. So we took and 
segmented the work by complexity of the claim. Obviously lower 
numbers of medical issues and claims that have really sort of a 
simple answer go now in our express lane, and we do those much 
faster. Really hard ones, like Parkinson's, and diabetes, and 
even military sexual trauma (MST) that have much--many more 
implications and inferred conditions on them go into our most 
senior people in our special operations lane. And then the rest 
goes into body of work. Simply doing that process and breaking 
up the work gained us about a 10 to 12 percent improvement in 
our productivity.
    The second thing we did was obviously move out of this 
lumbering paper-bound--by the way 5,000 tons of paper, 
touching, looks like 10 Mount Everests stacked end to end, and 
200 Empire State Buildings stacked that we were doing in paper-
bound ways. So we have looked lots of things. You asked about 
really those big muscle movements of what we really depend on. 
First and foremost, when I came here in June 2011, we did not 
have a particularly effective relationship with DOD. We have 
moved mountains in that respect between us and DOD.
    One of those big muscle movements is getting a hold of the 
complete service treatment record from the day they signed up 
for the MEPs exam to get in the door until the day they leave 
in a separation health exam. That did not exist then and that 
relationship with DOD does now. First in the discussion, DOD 
had the impression they were giving us all those things within 
45 days, and they did not understand why we were sort of not 
feeling good about that.
    We now measure them all, and the first data points that we 
showed them about a year and a half ago that showed them, no, 
in fact, 83 percent of them were late to us, very late to us. 
That woke them up, and they went into high gear to resolve 
that. We now still get about 37, 40 percent late, but they have 
made major movement to reduce the late Service Treatment 
Records (STRs) that we get. That was one big issue.
    Another big issue that we solved for is getting the fully 
developed claims. We were getting claims that were only 
partially ready to be looked at. So we have implemented, with 
the help of our great veterans service organizations out there, 
a fully developed claim process whereby the veteran comes in 
with all the parts and pieces that help us move immediately 
into the adjudication process.

                REAL TIME VISIBILITY AND ACCOUNTABILITY

    Senator Schatz. So just one final question. How are you in 
terms of visibility into the process in real time? I mean, if 
the analogy is a private healthcare delivery system, you should 
be able to run reports about current claims, about, you know, 
all of your personnel. You should be able to literally press a 
button and kind of know where you are at. I am assuming that 
you are not quite where you need to be eventually in terms of 
having the visibility that gives you the leverage for 
accountability to make sure that--first of all, you are making 
real time adjustments, but second of all, you are able to hold 
people down the chain accountable. Are you there--are you where 
you need to be yet?
    Secretary Hickey. So, Senator, I am probably further than 
you would expect me to be. So let me just describe a VBA that 
might be different than some of the things you have heard about 
relative to data, very quickly. My data is held--our VBA data 
is held at a national level. It is not held at the local level. 
It is turned over every night, so, in fact, if you would allow 
me for at least a 24-hour view, I do see data every single day, 
and I get reports, detailed reports, every single day. I make 
those reports available to you and the free world every Monday 
morning that we put out that data. I do not give it to you 
daily. I think you could not do your job if I was giving the 
amount of data I have daily, but we do it every single Monday 
so you get that.
    I have also a VBA stat that I do and have been doing now 
for 3 years. Eight to 10 regional office directors sitting 
across from me once a month, all the rest on the phone, where 
we dig into in a 6-hour meeting their data in ways that are eye 
opening. And we do it in a lead-up way to make sure I know of 
any anomalies in the system, and they are accountable for 
describing what is going on.
    Senator Schatz. Thank you very much, Madam Secretary. I 
really appreciate the work you have done. It is very 
impressive.
    Secretary Hickey. Thank you, Senator.
    Senator Kirk. Mr. Boozman.

                      APPEALS FTE INCREASE REQUEST

    Senator Boozman. Thank you, Mr. Chairman, and thank you for 
being here, Madam Secretary, you and your staff, and we 
appreciate all of your hard work. In the 2016 budget, you 
requested an additional 200 employees to work on appeals, and I 
know you mentioned that earlier. I guess the question is, how 
many people do we have working on appeals now, and if the 2016 
budget were enacted, how many would--what would be the total 
number of people that we have working on appeals?
    Secretary Hickey. So thank you, Senator. So you are right. 
There is a request for 200. It is not the full requirement. We 
also had a 2015 omnibus add that I really appreciate that gave 
us the ability to hire 250. Some of those--100 of those we put 
into appeals, so that would take us up to 300 in appeals.
    But the real requirement is north of about 750, about 769, 
to get us to the point where we take appeals down to a year-
long process. Today it is far too long. I know that. I hear it 
every single day because I am getting between 200 and 300 
emails from veterans that I answer myself. But to get that down 
from sort of that 3-year unacceptable level, it would get us 
down to a 1-year level.
    Senator Boozman. So how many employees now?
    Secretary Hickey. Do you have that? I can get that for you, 
Senator, and I am happy to give you the breakout for that.
    [The information follows:]

    Senator Boozman. In the 2016 budget, you requested an additional 
200 employees to work on appeals. How many people do we have working on 
appeals now, and if the 2016 budget were enacted, how many would be the 
total number of people that we have working on appeals.

    VA Response. If VBA's fiscal year 2016 budget request is fully 
funded, VBA would have 1,440 FTE working on appeals. VBA currently has 
approximately 950 employees on board dedicated to working on appeals in 
regional offices and 190 employees at the Appeals Management Center. VA 
is leveraging the funding provided in the 2015 appropriation to 
increase appeals staffing levels by 100 FTE, and the 2016 President's 
budget includes a request for an additional 200 FTE for appeals.

    Senator Boozman. And so, how did you arrive at the 200 
number?
    Secretary Hickey. So we looked at the--there are several 
things that are key indicators for work required in appeals. 
The first is responding to the notice of disagreement, so when 
you get a notice of disagreement, it triggers something called 
an SOC, which is a statement of the case. And that is where 
somebody has to write the statement of a case, and then send 
that out to the veteran, and then have the veteran decide 
whether they wish to go forward with their appeal. So we take 
that number and see in general how many we have there and what 
the requirements for those statements of the cases are.
    Then we also take and look at--once we move past that 
point, there is another trigger called a supplementary 
statement of the case. If after the veteran has moved forward 
in the appeals process, which, by the way, is a really open 
process that is not one that is described anywhere else like 
it. If we get information back that says the veteran now has 
created more evidence post the decision we made, it comes back 
to us to write another statement of the case to see if we can 
resolve that without it having to go through the full Board of 
Veterans Appeals and court process.
    So it is based on all those sort of work requirements built 
into our side of the process, but Senator, that brings us to a 
broader point on appeals. Appeals for us is an issue that I 
need your help on, and at the end of the day, it is so wired in 
law, it looks worse than tax code. I need a solution that 
either changes the law or gives me the people that we need to 
do this. There is no other resolution that I can find that does 
a fundamental shift in it. Fully developed appeals will help 
with the margins, but they will not solve this for the long 
haul without law or people.

            LITTLE ROCK, ARKANSAS AND OLD CLAIMS INITIATIVE

    Senator Boozman. Right. Thank you. We had a situation in 
Little Rock where a number of old claims were found, and there 
was some confusion as to what you do with old claims that were 
found. And some of these were very old, and they were told to 
stamp them as current. I guess the question is, is this a 
problem throughout the country? How do we have these old 
claims? What are we doing with them?
    If you find like an old claim that goes back to 1998, and 
you might comment on maybe the oldest that you are finding, 
okay? How do you--are we going ahead and putting those--are we 
treating those as old claims in the sense that they need to be 
done immediately, or are they just putting in--being put into 
the current day that they are found? And then also if a person 
is in that situation, do you go back and pay them back to the 
time that they made the initial claim, or are we doing it--
post-dating to the situation where they were found?
    Secretary Hickey. Thank you, Senator, and I am glad you 
asked that question because I would like to get this on the 
record for everyone. Back when we were starting the old claim 
initiative, I asked the staff to bring the 10 oldest claims in 
the inventory, and when they did, here is the backdrop I got on 
most of them. It was a claim that came in----
    Senator Boozman. But these are claims, like I said, that 
were not really in the inventory that have just kind of popped 
up that they are finding behind desks?
    Secretary Hickey. No, sir, not at all. That is why I would 
like to explain it to you very quickly. And I will do it with 
one--and frankly I will do it with one that we have got in 
Little Rock. Here is the claim. It is more than 20 years old, 
but it came in 2 weeks ago. And you would go, that does not 
make any logical sense, and it did not to me either. So I said, 
how do I rationalize a 20-year-old claim that came in 2 weeks 
ago?
    And what happened is when it came in 2 weeks ago, that 
Little Rock employee picked it up and did what a Little Rock 
employee is supposed to do. They go back through the entire 
claims folder looking to scrutinize everything that has 
happened over that veteran's life. When they did, they found 
that 20 years ago someone in the VBA system could have noticed 
there might have been a way to do a claim on something that 
they did not do 20 years ago, but they just got the claim 2 
weeks ago. Then I said this does not make any sense to me. Why 
can we not go ahead in a policy and give the veteran the 
benefit, that gets to your second question, on the effective 
date of 20 years, but not charge that employee who just got 
this claim from the veteran 20 years later that he just started 
working on 2 weeks ago, 20 years against that in the system?
    So what I said is let us be smart about this. Let us take 
the disincentive out of the system to go, well, the veteran did 
not know it is even here, and I found it, and let us instead 
put an incentive in the system for that employee to pick it up, 
do it, and give it to that veteran effective the 20 years ago 
date. So I did a policy that I briefed everyone on. We briefed 
the veteran service organizations (VSOs), we briefed the 
inspector general, we briefed the staffs of the four corners of 
the two veterans committees. We sent it out in a mail message. 
We did a public affairs address on it. We got out there saying 
we were going to do this.
    We put controls on it. You could only have them--if the 
director or the assistant director signed it off, you had to 
write them on a sheet and send them up to Comp Service so they 
could track them. In fact, even the inspector general report on 
this one clearly states the Little Rock regional office did 
nothing wrong. In fact, they exceeded the requirement I had in 
policy for them.
    I have subsequently in the last month met with one of the 
very large VSOs, who looked at me and said we actually think 
that is a good policy. Why did you cancel it? And I said, 
because I had recommendations from my counsel and because we 
did not understand what we were doing. They want me to restart 
it because they think it puts a good incentive in the system 
for the employee to do the right thing by old things they find.
    Senator Boozman. Good. Thank you. That is very helpful. 
Thank you, Mr. Chairman.
    Senator Kirk. Mr. Tester.
    Senator Tester. Udall has a meeting, so I am going to defer 
to Senator Udall.
    Senator Udall. Thank you, Senator Tester, for your 
courtesy. Really appreciate that. Secretary Hickey, thank you 
for your service, and we really appreciate your hard work. 
Hearing some of the things that you have talked about where you 
have moved from a paper system to a computerized system, I 
think in the long run that is really going to make a 
difference. And I know that you are making tremendous progress 
there.
    This subcommittee has taken the lead effort to reduce the 
VBA claims backlog, and this has been a resource and efficiency 
issue since the beginning, as you know. And I am proud to have 
supported the increased appropriations which have led to the 
national decline in the claims backlog. And I am going to show 
you a graph here behind me, and I think you have a copy of that 
up there in case you cannot see all the details here.

             CLAIMS BACKLOG AND ALBUQUERQUE REGIONAL OFFICE

    This increase in funding also had an initial positive 
impact in New Mexico, and I think you can see right about here 
where the money came in, you saw a dramatic drop. But then what 
happened after that, we had a leveling off in terms of the 
claims process. And I think most veterans would say, you know, 
we made some progress initially, but what happened with that? I 
know we have a new director of the VA in New Mexico dealing 
with some of the problems, but I am wondering if you could 
focus in and see--what is your explanation for why there has 
been a national increase in the claims backlog, but in the case 
of New Mexico we are seeing not only stagnated progress, but an 
uptick in the percentage of backlog claims?
    Secretary Hickey. So, Senator, I would be happy to address 
that. First, I would like to tell you, your regional office run 
by Chris Norton in New Mexico is doing an awesome job. In fact, 
they have reduced the backlog in Albuquerque by almost 53 
percent. And their quality is through the roof, 95 percent at 
the claim-based level and 98.9, almost 99 percent at all those 
medical issues inside of it. So doing an amazing job.
    Here is what I would share with all of you on this issue. 
We have not stagnated on taking the backlog down. In fact, the 
Monday morning workload report this week shared with you that 
the backlog was 209,000. This morning it is 206,000, and it 
will start increasingly cycling faster as we have literally cut 
the inventory in almost half. You will start to see over the 
next several months a really significant bend in the curve.
    Here is a phenomenon I would share with you that happens 
every single year, and it is a--I am sorry, but I am stuck to 
the way the calendar was built. The fall--first quarter of 
every year, which you can sort of see there is when it starts 
to stagnate, has more Federal holidays and more holidays in it 
that affect productivity and production. It is a fact of the 
calendar. You will always see us do better the second, third, 
and fourth quarters routinely. So I have to try not to react to 
a calendar problem in the first quarter, but you will see that 
we have made significant progress second, third, and fourth 
quarters.
    What I will share with you is I have been--we have done 
that increased productivity, that 67 percent increase in 
productivity, largely because we have transformed. So to the 
paper issue, we can simultaneously in parallel operations now 
share the electronic record between the hospital that has got 
to do the exam, the reviewer who is looking at it, and the VSO 
who is helping move it through. All of them can see it at the 
same time. Could not do that before. We are not mailing things 
around. We are taking that out of the system.
    The centralized mail is going to take another 20 days out 
of the process. We are starting to see the effects of going 
into the full centralized mail now. Days are coming down out of 
the system because they are doing and scanning those in in 5 
days rather than 22 days. So we will see, and we will get to, 
functional zero; I will say that. I am going to have people in 
the backlog by their choice or by the really unique 
circumstances of their life. But functional zero, you will 
agree with who is in functional zero and understand and nod 
their heads. And even a veteran in many cases who is in there 
will say that was by my choice. I do not want to do the exam 
yet. I want to add a new contention now.
    I think you are going to be very happy with where 
Albuquerque gets. That is one station I was headed to when I 
got changed up on. I still have to get there, and I am looking 
forward to a visit.
    Senator Udall. Well, we look forward to having you, and we 
look forward to working with you on continued decline in terms 
of those numbers. And we really appreciate, as I said before, 
all of your work. Thank you, Mr. Chairman.
    Senator Kirk. Ms. Capito.
    Senator Capito. Thank you, Mr. Chairman, and I want to 
thank the witnesses for their hard work, and would really like 
to tell the Under Secretary and those who are working for you 
that after our meeting yesterday, really have a full 
appreciation of the volume of what you are doing. But 
appreciate that you are able to, you know, with the data show 
all the improvements that you are making, and certainly 
appreciate that.

                     DOD TUITION ASSISTANCE PROGRAM

    I have a question surrounding the tuition assistance issue. 
On January 1, 2014, the Army issued a policy change to its 
Federal Tuition Assistance Program (TAP), and this change 
requires soldiers for all three components--Army components to 
wait 1 year after they complete advanced individual training or 
a basic officer leadership course before receiving tuition 
assistance. You know, we have talked with our National Guard, 
and there are some questions. This could have some negative--
the year wait--negative impacts on recruiting and educational 
levels within our Guard.
    In the State of West Virginia, 65 percent of our National 
Guard has either a college education or is working towards 
that, and it is a good recruitment tool. I can vouch for that. 
Could you explain the reasoning and how you plan to address the 
already declining numbers of students that are utilizing this 
benefit?
    Secretary Hickey. So, Senator, thanks for the question. I 
will tell you that tuition assistance is a DOD program. I own 
seven other education programs that we process claims for in 
VBA, the 9/11 GI Bill and other kinds. There are seven other 
chapters----
    Senator Capito. Right.
    Secretary Hickey [continuing]. Seven other chapters that I 
know you are well aware of.
    Senator Capito. Right.
    Secretary Hickey. And I appreciate, by the way, your 
National Guard in the State of West Virginia, having been 
active Guard and Reserve, have a strong heart and family 
feeling for the National Guard.
    Here is what I can tell you. We expect any time there is an 
implication to DOD programs on tuition assistance, there is 
going to be a reciprocal load request to utilize the benefits 
that they may be entitled to on our side. National Guard and 
Reserve has a unique opportunity on the 9/11 GI Bill 
perspective because they are both a still serving member, but 
maybe a qualifying veteran who can access resources while they 
continue to serve. So there are other changes I know that DOD 
has talked about in tuition assistance that could put further 
pressure on the GI Bill. We will have to respond to that if 
that is the case.
    I will tell you that as we are taking military members 
through TAP, 75 percent of them are telling us at the point of 
meeting in TAP that they will plan to leverage their GI Bill. 
So I expect this benefit to continue to have a high demand.
    One last thing I might offer is that I need your help 
across the entire Congress. We appreciate the benefit that came 
out in the Choice Act for Section 702 that gives veterans and 
service members the opportunity to use in-State tuition no 
matter where they have been based. We think it is a tremendous 
benefit. I went out immediately with letters to every governor 
and all the schools asking them to please comply by the 
required 1 July date.
    We do have now--every State now has signaled intent to 
comply, but I only have four that are in compliance with the 
requirements for that in-State tuition that goes on the 1st of 
July. I need help from you all getting the word out across all 
the States to please comply as soon as possible. We are not 
going to let our student veterans suffer, so we will have to be 
prepared for our Secretary to take some kind of authority he 
has been granted to keep those veterans in school. But we 
really need the States to be in full compliance absolutely as 
soon as possible.
    Senator Capito. Do you have those States?
    Secretary Hickey. I do. I will tell you the four that are 
in compliance.
    Senator Capito. The four that are in compliance.
    Secretary Hickey. The four that are in compliance are 
Georgia, Texas, Kentucky, and Wyoming.
    Senator Capito. Thank you.
    Secretary Hickey. All others----

                          WOMEN VETERAN ISSUES

    Senator Capito. Okay, second question. Thank you for that, 
and we will follow up with the DOD on that on the tuition 
assistance. As you know, and I think we might have talked about 
this yesterday slightly, there are 200,000 women who have 
served in Iraq and Afghanistan, and now approximately 20 
percent of the recruits are females, which creates more female 
veterans. I did not know if you were--if there were any 
specific--I know some of the hospitals have created women's 
clinics for the returning women's veterans. I did not know if 
there was anything specific that you are doing to address 
women's issues maybe in the area of sexual assault or any kind 
of mental health coverages along that area.
    Secretary Hickey. We are, and as you might imagine as a 
woman veteran myself, I have a great deal of advocacy for my 
sisters in service. So let me just give you a little bit of a 
drumbeat on that. We have in every single regional office a 
woman veterans coordinator, and that person is--we post it in 
public context so they all know who it is. We also have in 
every single one of our regional offices a military sexual 
trauma coordinator, one woman and one man, for the choice of 
the veteran who would like to speak more privately with them.

                         MILITARY SEXUAL TRAUMA

    Of recent times, and this is a function of my email going 
viral and my willingness to actually answer them all myself 
last sort of May/June timeframe, that somehow I ended up as a 
person that was taking care of MST victims, which I have a 
special place in my heart for them as well. And now I have got 
a lot of requests for ways in which we could put people on very 
high density sites that are specifically addressing that to try 
to get better information out there.
    About 2 months ago, I put an MST coordinator on one of 
those blog sites, and she has been actively helping. And at the 
same time, I released the names in the public domain for every 
single MST coordinator in every single regional office, their 
emails, so that people could reach them, and talk to them, and 
get help from them for this really difficult and sensitive 
topic. When I arrived----
    Senator Capito. If you could just tell us, ``MST?''
    Secretary Hickey. Military sexual trauma or MST.
    Senator Capito. Right, I just wanted to make sure we had it 
out there, yes.
    Secretary Hickey. Right after I arrived, one of my first 
steps to do because I just know far too many people that have 
dealt with this, and it is just--we have got to do something 
about this. I asked, because I had heard that we were rating 
these lower than--granting these lower than we were doing our 
regular PTSD claims for combat, and fear, and terrorism. And, 
in fact, in the review, we determined we were substantially 
about 20 percentage points lower.
    I mandated that we go through an extensive effort to train, 
and we did that in conjunction with the Veterans Health 
Administration (VHA) folks together, the examiners. And as a 
result of that, in very quick fashion we got those levels up to 
par with the normal grants that we do for PTSD, and they remain 
there because I keep watching it. We do a review and I demand a 
review every 6 months, and we have remained on par with those 
claims.
    Senator Capito. Thank you. Thank you very much. Good work. 
Thank you.
    Secretary Hickey. Thank you.
    Senator Kirk. Mr. Tester.

                   AVERAGE DISABILITY RATING AND PTSD

    Senator Tester. Yes, thank you, Mr. Chairman, and once 
again, thank you for being here. I have got a chart here from 
the VA. You mentioned in your opening statement about the 
average disability rating being at 30 percent for basically 45 
years, and now it is at 48 percent. I know we went into war in 
Iraq in 2000, but the question is why the difference. Why when 
it was static for 45 years at 30 percent, why today we have it 
at 48?
    Secretary Hickey. Really good question, Senator Tester, and 
lots of good data to show the following. Today's veteran is 10 
times more likely to survive their wounds of war than World War 
II, Vietnam, and every other conflict, Korea and all the rest. 
So 10 times more likely to survive wounds means you are coming 
back with many more. That jumps you up.
    Also we relaxed the rules for PTSD. We had 47,000 people on 
the PTSD rolls in the 1990s. Today we are breaking 800,000 on 
the rolls for PTSD. That is not just today's veteran. Those are 
World War II veterans who were never able to file before 
because of the threshold level to be able to have to produce 
proof----
    Senator Tester. Gotcha.
    Secretary Hickey [continuing]. Of what you endured at the 
Battle of the Bulge. It is also--we also----
    Senator Tester. So could you just give me an idea what--the 
veterans that served--of the overall veterans that served, the 
numbers that have served since the war in Iraq, how many of 
those veterans have post-traumatic stress disorder (PTSD) 
issues as a percentage?
    Secretary Hickey. I think--I do not know that I can do it 
as----
    Senator Tester. Is it half?
    Secretary Hickey. I do not even know that I could do that.
    Senator Tester. That is all right.
    Secretary Hickey. I do not know if I have it in that way.
    Senator Tester. If it possible and you can get it easily--
--
    Secretary Hickey. I can get that back to you.
    Senator Tester. It is just for my edification.
    [The information follows:]

    Senator Tester. So could you just give me an idea what of the 
overall veterans that served since the war in Iraq, how many of those 
have post-traumatic stress disorder issues as a percentage?

    VA Response. As of December 2014, 12.7 percent, or 262,904 of 
2,065,944 GWOT veterans were service-connected for PTSD.

                            APPEALS PROCESS

    Senator Tester. So, okay. Let me talk about appeals, and I 
know you want to talk about legislation because I heard it in 
your answer to Senator Boozman, and I will let you get to that 
in a second. But how long does it take for a decision on an 
appeal currently, start to finish?
    Secretary Hickey. Sadly it is upward in the neighborhood of 
800 to 1,000 days depending on the station.
    Senator Tester. Okay. And you talked about the appeal 
process being disjointed. You said in your opening statement 
that it is a complex law.
    Secretary Hickey. It is a complex law.
    Senator Tester. Which indicates you may need some help. Do 
you have a proposal?
    Secretary Hickey. I do. We have put one in front of you, 
and this one has come over before, our proposal frankly to fix 
it once and for all, is the legislation we have in front of you 
that says close the evidentiary record at the time the decision 
is made. And then what you are doing----
    Senator Tester. So the question is, have you put this 
proposal in front of the VSOs also?
    Secretary Hickey. I have.
    Senator Tester. And what has been their response?
    Secretary Hickey. In transparency, they do not favor 
closing the evidentiary record at the time the appeal is made. 
They prefer instead, and I give great credit to Disabled 
American Veterans (DAV), who has taken the charge to do and 
try a fully developed appeal, which also requires a legislative 
fix from the Congress that allows us to move 25 percent of 
those people who will say here is all my stuff, I am not going 
to add anything else to it, move me through the appeals 
process. And the current approach they have is 25 percent of 
those would be allowed to do that. That could help at the 
margins. That is not going to solve anything for the long haul, 
and it is not going to solve anything soon.
    Senator Tester. This is absolutely your subcommittee, Mr. 
Chairman, but this may be something that we could have a 
hearing on to talk about the proposals and the ups and the 
downs. I think it would be very difficult to get legislation 
passed unless you get the VSOs on board. It is just going to be 
tough to do.
    Secretary Hickey. I agree.
    Senator Tester. But if there are ways we can make it work, 
because the VSOs are going to represent the veterans, quite 
frankly, that is who the chairman and I represent, too. Then we 
can try to figure out solutions. There has got to be middle 
ground here. There has to be.
    Secretary Hickey. Senator, I would love to find any 
solution. Right now, I have done everything possible within 
people, process. There is a little technology we need to do on 
the board side to get them more efficient. But I have done 
everything on my side I can do short of changing law or a lot 
more people.

                       MILITARY FAMILY RELIEF ACT

    Senator Tester. Okay, and I am going to be very brief with 
this because I think this is a slam dunk. There is a bill 
called the Military Family Relief Act. What it does is it 
expedites the process for recently widowed spouses of disabled 
veterans to receive their benefits. In other words, a veteran 
dies, their spouse get their benefits. Right now, it could take 
up to a year. It does not make a lot of sense to me, quite 
frankly.
    Is there any reason why we could not just make it 
immediate? I mean, you are given the veteran, they are not 
divorced, they are married, whether it be a man or a woman that 
is the veteran. Is there not an easier way to get this done, 
because I cannot imagine what they are going--I mean, I just 
cannot. Someday it will probably happen to me or my wife, but I 
cannot imagine what they are going through. Is there some way 
to make it more streamlined, and would you support this bill?
    Secretary Hickey. Senator, I am fond of saying in my 
offices with my employees that I have a flat spot on the back 
of my head from banging my head on a wall on this very issue. 
Though it sounds a little bit trite, I could hug you or anyone 
else who would move forward this legislation to do this right 
thing by people who are suffering, and who deserve this, and 
are poverty level veterans and now poverty level survivors.
    Senator Tester. We will do that. I do not want a hug right 
now because I got a cold, but I will take a raincheck. Mr. 
Chairman.
    Senator Kirk. Mr. Cassidy.
    Senator Cassidy. Hello, Secretary Hickey. Thank you again 
for coming by yesterday afternoon. It really helped. Now, one 
thing you mentioned just to follow up, and my staff has done a 
good job subsequent, and this may have been talked about 
earlier. I apologize; I was in another committee hearing. You 
had mentioned the progress you all have made in terms of 
accuracy of claims, expeditious, et cetera. And you had 
mentioned that even though there might be some centers which do 
not perform as well as others, that nonetheless it is constant 
across all centers as regards to percent accuracy, et cetera.

               GAO REPORT ON REGIONAL OFFICE CLAIMS DATA

    Now, the GAO report, though, seemed to take a little bit of 
issue with that from November of last year. And when they 
ranked the different sites, I cannot help but notice--I always 
take a city that has a pro football team is a big city. So in 
the bottom half we have 15 different, if you include Los 
Angeles, 15 different NFL football cities, which are poorly 
ranked in terms of accuracy of claims. And in the top we have 
seven. And in the bottom we have New York, Los Angeles, 
Baltimore, St. Louis, Houston, some really big cities, 
Philadelphia. And in the north, in the kind of top half we have 
New Orleans, Milwaukee, St. Paul, Twin Cities, so relatively 
small cities.
    Long context to ask. As you look at your--the criticism was 
that you are not weighting according to the number of claims 
processed in each office the percent accuracy, which 
artificially inflates your accuracy. What are your comments on 
that?
    Secretary Hickey. Senator, first of all, the Government 
Accountability Office (GAO) report, if you look back to the 
dates that they pulled the data, are well--a long time ago for 
the range where they pulled the data, not reflective of today's 
quality improvements that we have made across the system. 
Second, there is variance across regional offices, but I will 
tell you there is not one I cannot identify where they have not 
made significant improvements in their accuracy and their 
quality. And that is what has driven up the full nine 
percentage point increase in claims quality.
    The other thing I will tell you about the GAO study that 
was released last year, one of the--they make two points that I 
would say listen to as well. One of the points was they said 
that we were over sampling--first they validated that we had a 
statistically valid sample, but they said you are over 
sampling, you know. You do not have to do that many, and maybe 
if you did not do that many you could take some of those 
auditors and point them towards other things you want to do. I 
actually agree with them. We have done some work with two, now 
three independent parties looking at our quality process. We 
are likely to move forward in that regard.
    The second thing that they said was, well, you are over 
sampling for the small cities or regional offices, under 
sampling for the large ones. So I said, good, let me see what 
happens if I change the--if I look at the data and I weight it 
based on size of what is being done. We did that. It made a 0.6 
percent difference when we did that, so not much moving the 
needle at all on the differences between what we are showing 
you in our quality and our accuracy today.
    But I still will probably likely do that because we could 
always do what we should do to even make it more refined and 
better. But you are right also, New Orleans has done a 
phenomenal job on their quality. Today, by example, their 
quality is 95 percent at the issue--claims-based level and 
97.34 percent at the issue-based level. And they have reduced 
their backlog by a full 65.5 percent.
    Senator Cassidy. Well, let me compliment Fort Harrison, 
Montana, who apparently has been number one for a while. And 
so, whatever they are doing in Fort Harrison we need to export 
across the rest of the country, particularly to Baltimore and 
Los Angeles who are the worst.
    I have no more questions. Again, thank you for coming by 
yesterday, and thank you for you all's good work in addressing 
the issue.
    Secretary Hickey. Thank you, Senator. And if I might just 
add, I do not have Baltimore and--oh, I do have Baltimore in 
front of me and L.A. But I will tell you in both cases, 
significant improvements made, and I thank this subcommittee 
for the additional resources you gave me to apply to the new 
training that we did where we literally stood the offices down 
and retrained everybody top to bottom. So I thank you for those 
resources to do that. And we are seeing improvements as a 
result.
    Senator Cassidy. Thank you. I yield back.
    Senator Kirk. Mr. Tester.

                  FT. HARRISON MONTANA REGIONAL OFFICE

    Senator Tester. Thank you, Mr. Chairman. I have got just a 
couple of questions. And thank you, Senator Cassidy, for 
recognizing Fort Harrison, Montana. The first one is a bit 
parochial. Recently Fort Harrison's VBA facility created 25 
work spaces. Does the VBA intend to fill those spaces with 
people?
    Secretary Hickey. So, Senator Tester, some of that depends 
on what you all do in my budget. I will tell you I have--any of 
the people that you give me up to my full requirement, not even 
my budget, I will have room for because, guess what? I am not 
using paper anymore, and I have got lots of space to be able to 
put people in to effect it. So I know they have space for an 
additional 25. Depending on the budget, we might have the 
opportunity to grow the footprint.
    Senator Tester. So let me ask you, if they hire another 25, 
if we give you the budget authority and the money, and we hire 
another 25 additional folks, we would be up to 100 in Montana. 
Would that mean we would also get a VBA director in Montana 
then, or are there numerics around that kind of a thing?
    Secretary Hickey. Typically, when you are crossing into the 
100 category, we are starting to think of you as a standing RO, 
so we would look at that. You would be considered a small one, 
and those are typically run by GS-15s. That would require a few 
extra--you know, not a lot, but a few extra FTEs because with 
that comes requirements for support services, things of that 
nature. So we are not talking a lot, but it could be upwards of 
a dozen more people.

                       SERVICE TREATMENT RECORDS

    Senator Tester. Okay. One of the most time-consuming pieces 
of the claims process is collecting evidence, and much of that 
evidence is gathered not by you, but by the DOD. Last summer, I 
wrote to Secretary Hagel after the DOD inspector-general-issued 
report revealing that the DOD was taking entirely way too long 
to transmit complete records to the VA. This is an issue that 
not only I have been involved in, but several on the Senate 
side. There have been reforms implemented, and your 
communication and cooperation with the DOD has strengthened 
over the last couple of years, and I commend you for that. Can 
you elaborate on how the transmission is going with the DOD of 
documents?
    Secretary Hickey. So we have--so thanks, Senator, for that, 
and they are doing better, and I am really appreciative of that 
because they are a critical supplier to our process. A year 
ago, about 80 to 83 percent of everything they sent us was 
late. We were getting it in paper. We were not getting it 
digitized. But that has all changed.
    Now, they have built their Health Artifact and Image 
Management (HAIMS) system. Basically they are scanning all of 
their full and complete service treatment records at central 
cells at different places across the country. And then they are 
uploading them into this HAIMS system. Our VBMS system has been 
built and coded such that when we say--when we get a request 
for a claim, it automatically goes into the HAIMS system, no 
human intervention, asks for that record, finds that record, 
pulls it back across, and puts it into VBMS so it is ready to 
be looked at and worked by a VBA employee.
    They have gotten better. They are now down to about 37 to 
40 percent of them are still late, but they are doing better, 
and they are really working hard at it. So we will continue to 
keep pushing so that we get them all the way down only because 
it is so critical to our ability to get and stay at 125. So we 
need them to stay eyes on target as much as we are right now.
    Senator Tester. Yes, and I appreciate that. I would just 
ask you if--I mean, there are many people on this 
subcommittee--I am not one--but they do serve on Armed 
Services. And there can be pressure applied to make sure that 
the DOD is doing their part in this transaction because it is 
an important part. I want to talk about National Guard and 
their records. Are they also as timely?
    Secretary Hickey. No, they are not, Senator, and I need 
more work there in rapid fashion.
    Senator Tester. And what is the pressure point to make that 
happen?
    Secretary Hickey. They have recently stood up a National 
Guard single point of entry cell as well. And as you well know, 
with a State that has a lot of National Guard in it, the 
National Guard has not always served with the same units and in 
various places. And as you well know, chairman, as a naval 
reservist, you often went as an IMA or an individual 
mobilization augmentee, and nobody was keeping track of your 
records anywhere. This is a real problem.
    We actually let a contract to try to go understand better 
how we could figure it out because we were not getting enough 
in-depth understanding of how this could be made better on the 
DOD side. That is literally coming to me here in the next 
couple of weeks to tell me what they have discovered and found. 
As I see that and I look for opportunities to improve, I will 
be taking that to DOD from my perspective.
    We need to do more about this. We have nearly a million in 
the Guard and Reserve who have served this country well and 
faithfully over this last 15 years of war and beyond.
    Senator Tester. Yes. I would just say, and then this will 
just be a side comment, that if you need help, we will help. I 
mean, we are using the Guard in a way that they have never used 
before. And so, I think it is important that we meet their 
needs, too. And if we are falling down, we have just got to 
figure out where to apply the pressure. We will work on it.
    So once again, Secretary Hickey, thank you for your good 
work. I very much appreciate it.
    Secretary Hickey. Thank you, Senator.
    Senator Kirk. Let me conclude with one last question. Is 
there any way we could establish something I would call the 
Hickey process for any amputee where in 1 day we could 
adjudicate that claim?
    Secretary Hickey. Chairman, when we have very seriously 
injured individuals, we put them at the top of the priority 
list along with POWs, Medal of Honor recipients, and terminal 
veterans. It will sometimes take a little bit longer than a day 
to do them, but we do prioritize them well in front of the 
rest.
    I usually will find someone who is a double amputee has 
many more conditions we need to address. Can we take one and do 
it? Yes, we do that to try to get something started for that 
veteran all the time.
    Senator Kirk. All right, thank you.
    Secretary Hickey. Thank you, chairman.
    Senator Kirk. Thank you. Well, I remind members that we 
will keep the record open until close of business, and we will 
meet next week, Thursday. For those members who may want to 
submit additional questions, they can do so for the record.

                          SUBCOMMITTEE RECESS

    Senator Kirk. The subcommittee will be meeting again on 
March 26 at 2:30 p.m. With that, we will close the hearing.
    Secretary Hickey. Thank you, chairman.
    Senator Kirk. Thank you.
    [Whereupon, at 11:26 a.m., Thursday, March 19, the 
subcommittee was recessed, to reconvene Thursday, March 26, 
which was later postponed to Thursday, April 15, at a time 
subject to the call of the Chair.]