[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


       VA'S DEVELOPMENT AND IMPLEMENTATION OF POLICY INITIATIVES

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

                                HEARING

                               BEFORE THE

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                                 OF THE

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

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION
                               __________

                      THURSDAY, NOVEMBER 29, 2018
                               __________

                           Serial No. 115-83
                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]       

        Available via the World Wide Web: http://www.govinfo.gov
        
        
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
35-948                    WASHINGTON : 2019           



                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BILL FLORES, Texas                   JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   CONOR LAMB, Pennsylvania
JODEY ARRINGTON, Texas               ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
BRIAN MAST, Florida
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                     MIKE BOST, Illinois, Chairman

MIKE COFFMAN, Colorado               ELIZABETH ESTY, Connecticut, 
AMATA RADEWAGEN, America Samoa           Ranking Member
JACK BERGMAN, Michigan               JULIA BROWNLEY, California
JIM BANKS, Indiana                   CONOR LAMB, Pennsylvania

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


                            C O N T E N T S

                              ----------                              

                      Thursday, November 29, 2018

                                                                   Page

VA's Development And Implementation Of Policy Initiatives........     1

                           OPENING STATEMENTS

Honorable Mike Bost, Chairman....................................     1
Honorable Elizabeth Esty, Ranking Member.........................     4

                               WITNESSES

Honorable Paul R. Lawrence, Under Secretary for Benefits, 
  Veterans Benefits Administration, U. S. Department of Veterans 
  Affairs........................................................     6
    Prepared Statement...........................................    37
        Accompanied by:

    Mr. Willie C. Clark, Sr., Deputy Under Secretary for Field 
        Operations, Veterans Benefits Administration, U. S. 
        Department of Veterans Affairs

    Ms. Beth Murphy, Director, Compensation Service, Veterans 
        Benefits Administration, U. S. Department of Veterans 
        Affairs

Honorable Michael J. Missal, Inspector General, Office of 
  Inspector General, U. S. Department of Veterans Affairs........     8
    Prepared Statement...........................................    39

Mr. Michael S. Figlioli, Deputy Director, National Veterans 
  Service, Veterans of Foreign Wars..............................    26
    Prepared Statement...........................................    44

Mr. Shane L. Liermann, Assistant National Legislative Director, 
  National Legislative Service, Disabled American Veterans.......    28
    Prepared Statement...........................................    47

Mr. Greg Nembhard, Deputy Director, Veterans Affairs and 
  Rehabilitation Division, The American Legion...................    30
    Prepared Statement...........................................    53

                        STATEMENT FOR THE RECORD

Letter From: Thomas S. Kahn, Director, Legislative Affairs, 
  American Federation of Government Employees, AFL-CIO (AFGE)....    56


 
           VA'S DEVELOPMENT AND IMPLEMENTATION OF POLICY INITIATIVES

                              ----------                              


                      Thursday, November 29, 2018

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Disability Assistance
                                      and Memorial Affairs,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Mike Bost 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Bost, Coffman, Radewagen, Bergman, 
Banks, Esty, Lamb.
    Also Present: Representatives Roe and Peters.

            OPENING STATEMENT OF MIKE BOST, CHAIRMAN

    Mr. Bost. Good morning. The oversight hearing of the 
Subcommittee on Disability Assistance and Memorial Affairs will 
now come to order.
    I would like to welcome the Under Secretary of Benefits, 
Paul Lawrence. Since this is your first appearance before this 
Subcommittee, before we begin this hearing, I would also like 
to yield to the Full Committee Chairman, Phil Roe. I understand 
that Chairman Roe would like a few moments to clarify something 
discussed during the Economic Opportunity hearing a couple 
weeks ago.
    And with that, Chairman Roe.
    Mr. Roe. Thank you, Mr. Chairman.
    I want to thank Chairman Bost for giving me just a few 
minutes of the hearing time today to ask a question regarding a 
topic that has been prominent in the news and is of the utmost 
importance to our student veterans.
    Dr. Lawrence, thank you for being here to testify today. I 
understand that the question I am about to ask is not on 
today's topic, but I feel like it is very important that we 
clarify these things.
    Yesterday, Secretary Wilkie released a statement on his 
plan to address GI Bill payment and system rollout delays. And 
that statement said in part, quote, ``During this time, VBA 
will pay monthly housing allowance rates for the Post-9/11 GI 
Bill at the current academic year uncapped Department of 
Defense Basic Housing Allowance Rates. The VBA will also 
correct retroactively any underpayments resulting from Section 
107 and 501 implementation problems,'' end quotes.
    On November 15, you and Director of Education Services, Mr. 
Worley, testified before this Committee regarding GI Bill 
payment and system delays. At that hearing, Mr. Worley stated, 
quote, ``We will not go back and try to recover the 
overpayments once the IT fix is in. And where we have underpaid 
our beneficiary, we will make them whole at the time the IT fix 
goes in,'' end quote.
    My staff received information yesterday which appears to be 
in apparent conflict with what previously and publicly was 
stated.
    So my question, Dr. Lawrence, is this: Will the new 
effective date of Section 107(b) when the system is ready or 
will you go back, and as you and Mr. Worley promised a few 
weeks ago, ensure that all students be made whole who are 
underpaid since the August 1, 2018, deadline stated in the law?
    Mr. Lawrence. Thank you. Let me clarify. We are going to go 
back, and for the fall of 2018, recompute the payments using 
the 2018 rates, as you indicated, and we will make those people 
whole.
    Mr. Roe. Okay.
    Mr. Lawrence. So overpayments, if there are any, will be 
disregarded. Underpayments will be adjusted, and those veterans 
will get a check in January.
    When the new law goes into effect in the spring of 2020, we 
will use the new rates going forward.
    Mr. Roe. So basically, the students are going to be held 
harmless either way?
    Mr. Lawrence. That is correct.
    Mr. Roe. The question I have, and I won't take too much 
more of the Committee's time, but we have got to have a whole 
new system. I think, as I understand it, that system that we 
have got currently is not going to be used and it is going to 
be rebid. Is that correct?
    Mr. Lawrence. Certainly, you are right. So the announcement 
yesterday reflected our fundamental thinking about what the 
options are going forward, that we need to really address all 
the learning we have had and do something different. That is 
correct.
    Mr. Roe. And I agree with that. And is that going to create 
a problem on the lookback? Because we are going to have 
hundreds of thousands of these to go through within a year. 
Because I think what I had heard, by the end of next year, 
December 2019, would be when it would be fully operational. I 
think that is the date certain that we were given.
    Mr. Lawrence. That is correct. For the spring of 2020, we 
will be ready in December of 2019.
    Mr. Roe. Okay. Thank you. I yield back.
    Mr. Bost. Thank you, Chairman Roe.
    Okay. So we are going to move back to our planned hearing.
    Today, we are going to focus on how the VA develops and 
carries out new policies and procedures.
    Most of you know that I ran a family trucking business for 
more than 10 years. I know that in order to make successful 
changes to our company, you have to sit down and create a plan 
to carry out the changes. For instance, you have to decide 
whether employees will be needed and need new training or if we 
are going to have to update computer software. You also have to 
think about how many modifications would impact the rest of the 
business, especially whether there will be unintended 
consequences that will cause problems down the line. Finally, 
you have to design and execute the implementation plan and 
figure out whether the changes are working as well as you had 
hoped.
    Unfortunately, according to the IG, it looks like the VA 
does not take these commonsense steps when it develops new 
programs. In the last few months, the IG has released at least 
three reports that document the problems that arose when the VA 
implemented new policies or initiatives.
    The VA had these problems because it doesn't appear that 
the VBA took the time to consider what they needed to do 
successfully and put the new procedures into place, such as 
adequately updating the IT systems or training employees prior 
to implementation. It also looks like the VA wasn't taking the 
time to evaluate whether they were working as intended. In one 
report, the IG discovered that when NWQ went into effect, 
claims based on military sexual trauma, or MST, were assigned 
to any employee even if that employee did not have specific MST 
training. In this case, the IG estimates that about 1,300 or 
almost 50 percent of the MST claims were not properly developed 
before VA issued a denial.
    Although I am troubled by these cases, they may not have 
been decided properly. We have to remember that this does not 
necessarily mean that all of these cases were improperly 
denied, but it does mean that the VA did not and didn't follow 
all of the safeguards to ensure that this particular sensitive 
issue and these particular sensitive cases were handled in the 
way they should have been.
    I think I can safely speak for all of my colleagues when I 
say the claims involving military sexual trauma are some of the 
most sensitive that the Department handles. These veterans have 
gone through an unimaginable ordeal, and VA owes it to them to 
ensure that the cases involving an alleged MST are processed 
correctly.
    Dr. Lawrence, I look forward to hearing from you about the 
VBA and what it intends to move forward based on this report.
    The IG also reviewed how the VA handles claims that include 
an Intent to File form. The VA developed the Intent to File 
initiative to allow veterans to preserve an early effective 
date even if they don't have enough information to file the 
formal claim. However, the VA didn't think to update VBMS to 
flag when the veterans submit an Intent to File form. As a 
result, the IG estimates that as many as 23,000 veterans may 
have gotten the wrong effective date on their claim. Even 
worse, these IG reports expose another major issue within VBA: 
poor quality control.
    If the IG had not reviewed these three programs, I don't 
know how the VBA would have ever identified the problem and 
taken corrective action.
    I wish I could say these were isolated incidents that we 
haven't seen before. I think one reason so many VA's new 
initiatives fail or cause serious problems is because VA is so 
anxious to find a silver bullet that painlessly solves all the 
problems. But the VBA repeatedly rolls out new initiatives 
before fully testing them or considering the downstream impact 
the changes will have on or how it will affect the VA and how 
they can better serve the veteran.
    I was encouraged that the Under Secretary for Benefits, 
Paul Lawrence, met with me and my staff, and he shared with us 
that he recognizes the VBA has to refocus on improving services 
for veterans rather than making employees' jobs easier. I also 
appreciate the fact the Under Secretary's commitment to 
reassessing how the VBA does business so that there is more 
care and consideration to how the VBA rolls out new programs, 
instead of rushing to get out a product that may not be ready 
to go live. That is a step in the right direction.
    I look forward to the hearing and hearing from the 
Secretary on how he intends to change the VA's culture and 
adopt good management practices. We all want the same thing: to 
ensure that the veterans receive the benefits they have earned.
    Now, I am going to turn over to our distinguished Ranking 
Member, Ms. Esty, for her opening statement.

      OPENING STATEMENT OF ELIZABETH ESTY, RANKING MEMBER

    Ms. Esty. Thank you, Mr. Chairman, for scheduling today's 
hearing on three reports issued in recent months by the Office 
of the Inspector General at the Department of Veterans Affairs. 
And you will see a great deal of consistency between the 
Chairman's remarks and mine. And I think you have come to know 
that this Committee works in a very bipartisan way, and we all 
share the same mission but share some of the same concerns 
about what we see happening.
    Each one of these IG reports raises serious questions about 
inadequate processing of veterans' disability compensation 
claims by the Veterans Benefits Administration.
    I want to start by thanking Dr. Lawrence and his team for 
being here today to respond to these findings, to describe what 
you are doing in response to those and, again, for meeting with 
the Chairman and with me at length prior to today's hearing.
    Though this hearing is setting on the reports on military 
sexual trauma, processing inaccuracy and unnecessary medical 
exams, there is and additional IG report on the processing of 
ALS claims that points to similar issues. And I want to make a 
brief aside. It looks like we have reached some accommodation 
on ALS, and I hope you will have a chance to describe that, 
which I think is indicative of what is encouraging to me about 
the attitude you are bringing to changing culture and going 
that extra mile.
    I am grateful to the VSO representatives in all parts of 
the country who raised the alert on some of these issues and 
who must play a direct role in the development and 
implementation of remedial policy initiatives and procedures 
recommended by the IG and with which VA has concurred.
    Let me be clear. When the report on military sexual trauma 
came to my attention in August, I was disappointed and 
disturbed. I had expected that after VBA provided liberalized 
guidance in 2011 and VBA's concurrence in the recommendation of 
the GAO report in 2014, that veterans who filed disability 
compensation claims for PTSD as a result of military sexual 
trauma would be finding an easier path establishing service-
connection required for accurate compensation ratings and that 
access to VA mental health care and treatment programs that are 
so important to recovery. But for too many, this is apparently 
still not the case. The IG has reported that 50 percent of 
denied claims that they examined from 2017 involved processing 
errors.
    I know that Dr. Lawrence as well was taken aback with the 
report when it was issued, because he immediately put into 
place a plan of action, including reviewing 2 years of claims. 
But to be blunt, however, there are patterns in all of the 
reports that need to concern all of us, this Committee and you 
as well.
    I see a pattern of not sharing and disseminating best 
practices as an ongoing basis and update when VBA is getting 
reports back that needs to be part of a continuous improvement, 
as Chairman Bost talked about, as we can learn from the private 
sector. With the National Work Queue in place, this should 
facilitate that, but there needs to be a mission to disseminate 
those best practices when we learn them.
    That will help address continuing inconsistencies in 
regional offices that just with the National Work Queue, we 
shouldn't be seeing that kind of variability that we are 
seeing. It is of particular concern on the military sexual 
trauma claims, and I look forward to hearing your responses on 
that.
    As the Chairman has noted at length, a real concern with 
inadequate planning. You are very responsive, but you need to 
take time to step back and figure out how best to implement. 
There are several instances in the report where it is clear 
that there were secondary impacts that were not properly 
assessed or at least not communicated back to us. If more time 
was needed or resources, we need to be informed of that. It is 
not enough to respond to an IG report and tick the box, because 
that is not necessarily achieving the mission. And this really 
is my overall point.
    The mission is to serve our veterans. And it is a customer 
service endeavor. And so that requires going that extra mile. 
The IG report sometimes takes several years to produce.
    We know in the case of, say, military sexual trauma, the 
training materials that we have now are way better than they 
were 2 years ago. There needs to be constant updating of that 
training. There needs to be dissemination of best practices.
    So if the IG puts forward a plan of action, you actually 
need to be pushing back to say, we want to achieve the mission, 
but if there is a better way to do it, we are going to do it 
that way, and not just taking the training materials that are 
noted, say, the IG says, you know, best practices from 2013. 
Well, that is not good enough in 2018.
    And so that is a broader issue. That is a broader issue of 
owning the continuous improvement, the mission of serving our 
veterans and being proactive in that, as opposed to reactive to 
this Committee, the Senate, or the IG reports.
    I know everybody here sees themselves as being on Team 
Veteran, Team America, but we have to deal with the culture 
issues that have led to the series of IG reports, series of 
concerns that the mark is being missed. And that is not good 
enough for our veterans. It is discouraging and frustrating to 
the taxpayers, and we need to do collectively better. But that 
is going to require you to be proactive in letting us know and 
looking for ways to do that.
    I know it is important to recognize we have a number of 
people here today for whom the GI Bill revelations are going to 
be important. But, again, the purpose of this hearing is, in 
particular, to focus on these IG reports that we have had over 
the last couple of months.
    With that, I want to thank Dr. Lawrence, Ms. Murphy, Mr. 
Clark, and the IG, Mr. Missal, for being with us here today, 
and we look forward to your presentations.
    Mr. Bost. Thank you, Ms. Esty.
    I want to welcome the witnesses who have joined us this 
morning, and thank you for taking time out of your day and 
being here today.
    Our first witness is the Honorable Paul R. Lawrence, who is 
Under Secretary for Benefits for VA. He is accompanied by Mr. 
Willie C. Clark, Sr., VBA's Deputy Under Secretary for Field 
Operations, and Ms. Beth Murphy, the Director of Compensation 
Services for VBA.
    Also joining us at the table is the Honorable Michael J. 
Missal, who is the Inspector General for the VA's OIG.
    Welcome to all of you.
    I want to remind the witnesses that your complete written 
statement will be entered into the hearing record.
    Dr. Lawrence, you are now recognized for 5 minutes.

                 STATEMENT OF PAUL R. LAWRENCE

    Mr. Lawrence. Good morning, Chairman Bost, Ranking Member 
Esty, and Members of the Subcommittee. We appreciate the 
opportunity to speak on the topic of VBA's development and 
implementation of policy initiatives. But before I get into my 
opening statement on the subject of this morning's hearing, I 
want to address a misleading NBC news story from late yesterday 
that gives the false impression that some veterans on the GI 
Bill will not be made whole with respect to their housing 
payments based on the announcement VA made yesterday.
    Nothing could be further from the truth. Each and every 
veteran on the Post-9/11 GI Bill will be made 100 percent 
whole, retroactively if need be, for their housing benefits for 
this academic year based on the current uncapped DoD rates. And 
beginning in spring 2020, we will be in a position to provide 
veterans with the new rates, where applicable, to meet the law 
known as the Forever GI Bill.
    Once again, each and every, and I mean every single 
veteran, will be made whole for their housing benefits this 
year. As announced yesterday, the rates we are providing for 
the current year uncapped DoD basic rate for housing allowance 
based on the location of the schools' main campus rather than 
the physical location of the student.
    For many students, the DoD BAH rate will be equal to or 
higher than their current payment. If a student was overpaid 
due to the changes in law or because of VBA's challenges in 
implementing the law, the student will not be held liable for 
the debt. And starting in spring term of 2020, VA will have 
solved its current technology challenges so the Department is 
in a position to provide Post-9/11 GI Bill veterans the new 
rates, where applicable, to comply with the Forever GI Bill.
    Let's move to the topics at hand.
    We recognize the significant role that oversight plays in 
the importance of the Veterans Service Organizations. We have 
worked hard to foster our relationship with the Office of the 
Inspector General, the General Accountability Office, and with 
congressional members and staffers. We meet monthly with the 
OIG to discuss trends and review findings. We have also 
recurring meetings with GAO. Since June, we have held monthly 
meetings with VSOs to discuss improvement plans to address 
issues that affect veterans.
    Working with these partners ensures together that the right 
elements as we move forward in developing and assessing our 
plans for implementation. We appreciate the special 
relationship VBA has with the OIG. The invaluable feedback and 
observations the OIG provides to VBA leadership enhance our 
ability to review our effectiveness and validate our plans. We 
count on this continued collaborative relationship and the 
feedback that is received. We concur with all the findings in 
recent reports and are executing these recommendations.
    Let me begin with the report on military sexual trauma. VBA 
is committed to serving our Nation's veterans by processing 
claims to MST in an accurate and caring manner. By October 2, 
2018, VBA provided updated training and guidance to claims 
processors. Additionally, VBA developed an action plan that 
puts us on track to conduct special focus reviews and 
consistency studies in a timely manner. Therefore, we are 
returning to the best practices that previously made us 
effective, which includes a designation of specialized claims 
processors to work these sensitive cases.
    Let me turn to the Intent to File. VBA appreciates the 
acknowledgment by the OIG that the error rate dropped steadily 
to 4 percent during the course of its review. The report also 
noted that after March 24, 2015, VA could no longer grant 
entitlements to benefits using an informal claim, and a new 
form was required. The report highlighted issues identified 
with this new form. It also noted that the form was introduced 
for quick rollout and insufficient training. We have done 
better with our ITF claims and we were able to fix issues while 
this report was in motion.
    Let me turn to the report on reexaminations. While veterans 
are service-connected for a disability that is likely to 
improve, VBA establishes a plan to review the current severity 
of the condition. Many of these reviews result in 
reexamination.
    OIG's key findings included reducing the number of 
unnecessary reexaminations. In response to this recommendation, 
VBA has provided targeted training to identify where 
reexamination is needed. We have also created tracking systems 
which allow us to better identify and manage the workload. VBA 
has also developed a phased implementation plan to assess 
quality. Each of the phases focuses on a set of business rules 
that help us identify unnecessary case reviews.
    Finally, I will address the most recent report on claims 
for ALS. VBA concurred with OIG's findings and has taken steps 
to address the recommendations to improve the proficiency of 
our staff. On November 19, 2018, VBA issued guidance and 
updated training to specialized claims processors assigned to 
work these complex claims.
    Mr. Chairman, we have heard the concerns that VBA has 
rolled out many programs too quickly and with insufficient 
training. Previously, in an effort to address problems, we 
focused on unilateral decisions that did not engage our 
stakeholders early enough.
    Since I arrived, we have been more thoughtful and 
systematic in our approach. I developed three priorities, the 
third of which is fostering a culture of collaboration.
    One example of the difference in management style is my 
first senior leadership conference where meaningful discussions 
led to the development of 14 integrated groups with both 
headquarter and field membership. These groups gather data, 
conduct analysis, collaborate with stakeholders, and map out 
plans for solutions on topics ranging from performance 
management to quality improvements to reducing rework.
    I launched several organizational assessments, including 
utilizing external consultants to survey several functions and 
offices in VBA to obtain objective insights, appraisals and 
recommendations for improvement based on best practices.
    I am implementing a deliberative approach to planning, 
consulting, executing, assessing, and then doing course 
corrections and leveraging best practices with each new 
initiative or policy change. VBA is now focused on continuous 
improvement, and we do this deliberatively and collaboratively. 
We look forward to coming back to you as a group or 
individually to discuss our successes.
    This concludes my testimony. I look forward to answering 
your questions.

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

    Mr. Bost. Thank you, Mr. Lawrence.
    Mr. Missal, you are recognized for 5 minutes.

                 STATEMENT OF MICHAEL J. MISSAL

    Mr. Missal. Thank you.
    Chairman Bost, Ranking Member Esty, Chairman Roe, and 
Members of the Subcommittee, thank you for the opportunity to 
discuss my office's oversight of VBA's programs and operations. 
I want to begin by detailing recent changes to our oversight 
model for VBA that allows us to better review national policy 
changes and focus on VBA's high-impact programs and operations.
    Previously, we largely conducted oversight through 
inspections of VBA's 56 regional offices. In October of 2017, 
we implemented a new national inspection model for VBA 
oversight. Under this new model, we now conduct nationwide 
audits and reviews of high-impact programs and operations 
within VBA with a focus on identifying the root causes of any 
problems uncovered and making meaningful recommendations.
    Since implementing this new model, we have published 15 
oversight reports related to VBA. In these reports, we made 55 
recommendations for improvement, identifying nearly $278 
million in potential monetary benefits.
    I want to highlight four recently issued reports related to 
our oversight of VBA. In July, we reported on whether VBA 
required disabled veterans to receive unwarranted medical 
reexaminations. In August, we published the report that 
examined whether VBA staff correctly processed claims related 
to veterans' military sexual trauma prior to denying the 
claims.
    Also in August, we published the results of a nationwide 
review of whether VBA staff assigned correct effective dates 
for compensation benefits for veterans using the recently 
implemented Intent to File process. And last week, we reported 
on whether VBA accurately decided veterans' claims involving 
service-connected ALS, also known as Lou Gehrig's disease.
    These reports identified common systemic issues that 
contributed to our findings. The primary root causes of the 
problems we found were deficient internal controls, inadequate 
program leadership and monitoring, a lack of information 
technology system functionality, and the unintended impacts of 
VBA's National Work Queue implementation.
    To be clear, we believe that recent VBA initiatives and 
policy changes were well intentioned to expedite the benefits 
delivery process. However, these reports revealed that VBA 
leadership's emphasis on efficiency has affected the ability to 
review and process claims accurately. As detailed in our 
reports in my written testimony, these recurring deficiencies 
resulted in the inadequate delivery of services and inaccurate 
benefits rendered to veterans.
    We understand that VBA's leadership has been taking 
numerous actions for the last several years to address the 
changing and growing demands for benefits and services and to 
reduce the claims backlog. However, the recurring deficiencies 
we identified are often the result of VBA leadership making 
management and operational decisions without fully considering 
and planning for potential unintended consequences resulting 
from their actions.
    These include sacrificing accuracy for timeliness, rolling 
out national initiatives after small and short pilot programs, 
and implementing programs that do not have fully developed IT 
systems and robust internal controls.
    For example, VBA's Intent to File initiative had a short 6-
month implementation and delivery period. Errors generally 
occurred because VBA did not take the time to set up adequate 
standard operating procedures before implementing the new 
initiative. Additionally, VBA's IT system lacked the 
functionality to assist rating personnel in assigning correct 
effective dates for benefits for Intent to File claims.
    Since nationwide implementation of the Intent to File 
process, VBA has taken steps to improve its control activities 
and IT functionality, which has resulted in improved accuracy. 
But the errors that occurred during the initial implementation 
period will have to be reviewed and corrected, requiring the 
use of additional VBA resources.
    We believe VBA's implementation of our recommendations will 
help limit the unintended consequences of VBA's policies and 
programs and better position VBA to provide services to 
veterans and their families in the most effective and efficient 
manner possible. VBA has generally concurred with the 55 
recommendations we have made under our new national inspection 
model and has provided acceptable action plans.
    VBA must now follow through with the difficult work of 
implementation if they are to carry out the responsibilities 
effectively and be good stewards of taxpayer dollars. We will, 
of course, monitor their progress.
    Mr. Chairman, this concludes my statement. I would be happy 
to answer any questions that you or other Members of the 
Subcommittee may have.

    [The prepared statement of Michael Missal appears in the 
Appendix]

    Mr. Bost. Thank you, Mr. Missal.
    With that, we are going to begin questioning. And I will 
allow myself 5 minutes to start off.
    But let me first off also say, Dr. Lawrence, that your 
announcement of making it very clear to us and to the public 
that it is to make all of our GI veterans whole and/or also 
then not to--and hold them harmless for those who may have been 
overpaid is a good start for this hearing. And let me tell you 
that I believe that it will also calm down a lot of the 
questions that would have probably come up here today.
    That being said, we do have some real issues that we have 
got to deal with. And I am going to go a little off script here 
because I know the question I want to ask, but I want to 
express it this way. I know you came in in May. But the--I was 
a full-time firefighter, and I can remember my first night on 
duty. And the fire chief came in and he says, Mike, I want you 
to know something. He said, you are in a job that there is 
going to be a lot of problems and you are going to. You didn't 
create the problem. You have got to fix it, though. Whatever 
you do, don't make it worse. Whatever you do, don't make it 
worse. Okay?
    Let me simply ask, how are you planning to change the 
culture from the VBA from its present issues that arise from 
this systematic lack of planning and effectiveness and how to 
implementate things going forward, not only on past projects, 
but on new projects?
    Mr. Lawrence. I am going to change the culture by modeling 
different behavior. And let me explain. When I think about 
these problems, I draw on my experience in the private sector, 
just like you, sir. And what I observe and I take away from 
this is sort of, you know, other general management 
perspectives.
    As Mr. Missal described, you know, decisions were made very 
quickly and probably without the right amount of expertise in 
the room to really appreciate it. I've slowed things down. So 
decisions are made more deliberatively. I call it go slow to go 
fast. We focus on fewer things and we spend more time thinking 
about what the risks are and the potential unintended 
consequences. And more importantly, or equally importantly, we 
have more people in the room to make sure we have voices.
    I take diversity and inclusivity very serious, but, to me, 
it is not a skin color thing. Inclusivity refers to bringing 
people with different perspectives into the conversation to 
avoid the things we were just describing.
    So those are the two things that drive my understanding of 
how we are going to go forward. My leadership style. That has 
been demonstrated from the very first time I showed up, even in 
confirmation, when I talked about priorities and what we were 
going to focus on.
    Most importantly, you heard me make reference to the 
director's conference, the leadership conference in September. 
That is where we really did the work I am describing. Where 
people came into the conference having prepared thoughts around 
key topics, where we had rigorous discussion about what the 
possibilities were. There were no talking heads in this 
conference. There was real work being done till 8 o'clock the 
2-1/2 days we were together.
    And at the end of that, we put forth ideas about how we 
would work on things, like rework, like quality. Everybody in 
the room, all 76 people, got a star and got to go vote on what 
we thought the best answers forward were.
    Those were the projects we took down and are now working, 
which will be harvested in the spring and beyond. So that is 
the different behavior we are now doing.
    So I think collectively, the good ideas in the room, you 
know, really make me confident about the talent on the team and 
what we can do differently going forward.
    Mr. Bost. My next question is for Mr. Missal. You know, you 
mentioned that the VA has historically exhibited systematic 
problems associated with and how it implements policies 
initiatives, such as inadequate training and complete IT 
functions, deficient mitigation strategies and lacks quality 
control. Have you identified other areas where the VA can 
improve its foresight to better plan for the new policies 
initiatives to avoid potential negative impact on claims 
processes?
    Mr. Missal. Yes. You have mentioned some of the more 
significant ones that we found. One of the other issues that we 
think is real important is communication within VBA, because 
there are instances where one side involved in an issue may be 
aware of it and the other side doesn't get that same 
information. It is very hard to properly implement something if 
everybody is not on the same page as to the information there, 
what the goals are, what the process is, et cetera.
    And so what we try to do in our reports, we not only try to 
get it right, we try to be fair, but we also try to say what 
the root cause is that we find. Because if a mistake is made, 
we want to be able to point out that mistake so that it doesn't 
happen again.
    Mr. Bost. Okay. I am going to go ahead and turn over now to 
Ranking Member Esty for 5 minutes.
    Ms. Esty. Thank you very much.
    And I am going to have a series of fairly specific 
questions that I am going to submit for the record, but I want 
to continue this line of discussion because I think it is 
really important about changing the culture.
    Things are happening quickly. You are being asked to do a 
lot of new things in VA quickly. And we understand that can be 
a lot, especially for an institution that coming out of a 
military background doesn't always embrace change that quickly. 
So you have got a mindset change you have to deal with.
    I want to talk about the communication issue. How do we 
ensure that that is happening? How do we disseminate those best 
practices?
    The National Work Queue was a huge undertaking. We should 
be reaping the benefits of that now, but that means that 
information has to be assessed and it has to be pushed back out 
to all of the offices. So I want you to talk about that, as 
well as specialization. I think that has come up on the quality 
control, these more difficult claims, ALS being one, military 
sexual trauma being another. They require specialization to get 
right because of the nature of the trauma to the veteran 
involved, the importance of doing those accurately, and while 
it is just not fair or reasonable to think we should be 
training each and every claims reviewer to do that. That is not 
a good use of time and it should not be done.
    So can you talk about, Dr. Lawrence, how you are going to 
identify the areas that are going to require specialization, 
what you are doing to make sure that happens so that you are 
proactively, not just in response to an IG report, but how are 
you going to track? What are those areas that require 
specialization? How are you going to do that training? How are 
you going to update the training so that we are continuing to 
have best information and best practices disseminated across 
the totality of the VA?
    Mr. Lawrence. Let me start with specialization first, 
ma'am. Yes, we agree. There should be more specialization. The 
benefits of it are clear, and we should do more of it.
    Probably early summer, unrelated to the report, we began to 
think about how we process claims under the guise to be better 
for veterans, and part of it was efficiency. We are identifying 
which claims should be bundled in a specialized manner like 
this. And so we have what we call lanes, and there is 
specialization by virtue of this. We are trying to balance the, 
you know, efficiency we get, the sensitivity, the caring and, 
quite frankly, the right places we should do this around the 
country.
    This is something we are already working on, and we think 
the benefits are clear. And as we discussed with you leading up 
to this, to build on even some of the things we better 
understand about the veteran experience. So we should do more 
of that, but I want to be careful it won't be the answer to 
every problem. But we see the benefits of specialization, and 
we want to reap those.
    We draw on best practices from some of the leading 
companies, and they caution us to be careful because at some 
point you can go too far. But we don't think we are anywhere 
near close to that, based on the work we have done.
    If I could just answer your other two questions. In terms 
of communication, yes, ma'am, that was something I thought 
about a long time. In any large organization, as you know, we 
have 24,000 people, our construct is headquarters and then 56 
regional offices around the country. We have tiers of people 
and levels in between that we need to communicate with.
    This also came up in our directors conference, and there is 
a project that was just concluded about how we are going to 
more formally communicate what the mechanisms are, what the 
vehicles are, what the responsibility of everybody is to 
participate, and then pass that information along. That will 
not solve every problem, but at least we will begin to address 
the awareness of issues pushing it out to everybody so we have 
greater consistency.
    And your last thing, I think, was the training, to make 
sure we got it. And let me draw on Beth here because I know she 
has been thinking a lot about this as we deal with that.
    Ms. Murphy. Thank you, sir. We have really been empowered 
under Under Secretary Lawrence's leadership to look for 
different ways to do things.
    As far as training, I think in the past we relied on a more 
one-dimensional aspect of training, which is we put out a call 
or we have a PowerPoint, materials, someone delivers that or 
you do that online. These days, when you want to find out how 
to do something, what I do, and I know a lot of folks do, is 
you go online and you look for a video. I would rather have 
someone show me how to do something rather than just tell me 
how to do something.
    So we are capitalizing on that with new technology and 
tools and platforms. With the Intent to File, that was part of 
the solution. We used a video to instruct folks how to look for 
the effective date with the Intent to File, and we reap the 
benefits down to a 4 percent error rate. And more recently, a 2 
percent error rate.
    We are doing the same thing with the military sexual 
trauma. Rather than a PowerPoint, it is now a video that says I 
am putting myself in the place of the military sexual trauma 
coordinator. We are going to walk through the checklist, how to 
develop for these cases, how to make these phone calls. So it 
is a more dynamic three-dimensional training that folks can 
access at their leisure. And it is mandatory, but then you can 
go back and look at it for refresher as necessary.
    Ms. Esty. Thank you. And I see my time is expired. Thank 
you. I yield back.
    Mr. Bost. Mr. Coffman, you are recognized.
    Mr. Coffman. Thank you, Mr. Chairman.
    Mr. Missal, what is the central problem here? We get this 
all the time that, oh, how we are going to do things 
differently, and at the end, they always fail, the VA always 
fails. Is it that they never assess the requirements properly, 
they don't manage contracts properly? What would you say is a 
central reason for failure?
    Mr. Missal. I think there are a number of different reasons 
why these programs don't operate as effectively and as 
efficiently as they should. And I think you can start first 
with the planning phase. Do they do enough to plan? Do they 
take the proper time? Secondly, do they determine whether or 
not any IT that is going to go along with the program has the 
proper functionality? Has it been properly tested?
    Next, once it is implemented, what are the internal 
controls? Because in a question of, like, communication, how do 
we know it is working? If you are looking at it in hindsight, 
you are looking at the controls to determine whether or not you 
have issues there.
    And finally, do a root cause analysis, so that if something 
hasn't worked as anticipated, you take a look at it again, so 
you don't make the same mistake.
    So I think putting all those together, that is sort of a 
general summary of the issues that we generally find.
    Mr. Coffman. Does the VA, Mr. Missal, bring in outside 
consultants, experts to be able to define--it is one thing to 
have a contractor come in to implement a system; it is the 
other thing to objectively define the requirements.
    And it seems to me that, at least certainly when we looked 
at the issue concerning the Post-9/11 GI Bill and the changes--
and we are going to be doing that in the second round, so I 
don't want to really get into that now--but they were unable to 
assess, number one, could they do it and said that they could 
do it. And number two, even come up with a timeline. Number 
three, they couldn't manage the contract and the contract 
ultimately failed, is my understanding.
    But is it they need professionals from outside the VA to 
come in and write these requirements and manage the contracts, 
or are they doing that?
    Mr. Missal. In a number of situations, they do bring in 
people from the outside. The VA has thousands of contractors 
who are working at VA. And sometimes it is as simple as just 
working together to make sure that when you have a contractor 
working with the VA staff and systems, are they all integrated 
well? And that is one thing we find is that sometimes the 
integration is not what you would like it to be and then you 
are sometimes working across purposes.
    Mr. Coffman. Okay. Mr. Chairman, I yield back.
    Mr. Bost. Mr. Bergman, you are recognized.
    Mr. Bergman. Thank you, Mr. Chairman. And thank you all for 
being here today.
    These hearings are always informative, I believe, to all of 
us. I am very appreciative, as I know we all are, of your 
proactive nature in this.
    People who serve in uniform have to be proactive by nature 
because the mission requires movement, adaption, and overcoming 
obstacles in order to succeed. And I would suggest to you that 
any culture, whether it be here in the Congress or whether it 
be in the VA or the Department of Defense, or anybody else 
related to veterans, if they don't have that same culture of 
adapt and overcome, we are going to have long-term failure.
    Okay. So having said that, Dr. Lawrence, when you talk 
about, if you will, revamping, revising, building a new culture 
under your command, can you give me an instance of some of the 
things you might be doing outside a norm, that of we have 
always done it this way kind of thing, to build that culture 
with those under your command?
    Mr. Lawrence. Sure. One of the things we have done, and I 
alluded to this in my opening statement, is really searching 
hard for best practices in industry.
    If you think about what we do, for example, we maintain an 
insurance product line. We can learn from how the world-class 
insurance companies learn and copy those behaviors that are 
relevant. So I want to really draw on, leverage best practices 
from around the world. I don't mean as good as it gets in 
government. I mean world class elsewhere, because we can be 
that good because the talent at VBA is that strong.
    Mr. Bergman. Let me ask a question because--you know, I 
appreciate that. Looking outside your organization for best 
practices is what I heard. Do people come to work because they 
have to or because they want to, under your command?
    Mr. Lawrence. I don't know the answer for me specifically, 
but I will tell you the survey of why VBA employees come to 
work every day is the purpose of the mission of serving 
veterans. We have had outside studies done of that prior to me, 
and consultants come and talk to us all the time and say that 
is a very powerful draw to why folks come to work at VBA.
    Mr. Bergman. Okay. The use of contractors, how do--if you 
have those who are on your payroll, if you will, as your 
employees under your command and then you have this adjunct 
group that melds into your organization for a time but not as 
permanent employees, how, then--what do you do within the 
culture that you are trying to create that will make those 
contractors feel part of that team, that they are actually--
they are just trying to stay because they want to stay working 
for the veterans. What kind of programs or policies or training 
things do you have in place to bring those contractors in that 
it is just one group, you can't tell who is the contractor, and 
who is the employee?
    Mr. Lawrence. So we focus on--when we use contractors the 
way you are describing, because sometimes we use them for spot 
solutions, right. They come, they assess something, and they 
leave, so they wouldn't quite qualify for what you are 
describing.
    We focus on integrated product teams and try real hard to 
get contractors who are also focused on serving veterans. As 
you know, there is a requirement that we deal with generally 
veteran-owned businesses, and that sets us in a very good 
position as well. Many folks have traveled in and out of the VA 
processes and they get it.
    So really, we have seen people working closely together. 
And quite frankly, we think VA is a good client to have if you 
are a contractor or consultant, and people come to us and they 
want to stay for long periods of time through the contractor 
relationship.
    Mr. Bergman. Okay. And one last question, because I see I 
have about a minute left. Is there any current surge capability 
that--or on the horizon for you as you build your organization 
here going towards the future? Again, mission-oriented. We know 
we have--you know, we are talking military language here, but 
when you need a surge, is there anything in your plan to create 
some level--doesn't have to be a lot necessarily--but that idea 
within your organization that if you need to redistribute 
assets for a short period of time, is there anything in your 
plan that would indicate that that is part of it as well?
    Mr. Lawrence. Yes, sir, there is. So, for example, in the 
September-October timeframe when we were experiencing real 
difficulties with the GI Bill, our call centers were 
overwhelmed. We are staffed for 15,000 calls a day. We were 
getting north of 25,000 a day.
    I am looking at best practices for other call centers to 
figure out what the surge capabilities are. Often they have 
relationships with other external entities for situations like 
this. Christmas, for example. So, yes, that is definitely part 
of our plan, because I don't think the answer for our veterans 
should be ``wait.''
    Mr. Bergman. Okay. Thank you. And I yield back.
    Mr. Bost. Thank you.
    Mr. Banks, you are recognized.
    Mr. Banks. Thank you, Mr. Chairman.
    Dr. Lawrence, yesterday's news report regarding the Forever 
GI Bill is deeply concerning, even more than when we heard from 
you testify last before my Subcommittee, the Technology 
Modernization Subcommittee, a couple of weeks ago. Your IT 
systems continue to leave veterans in need. The mission of the 
VA should not continue to be compromised because of a foible 
like this.
    What was the rationale behind you getting rid of the Booz 
Allen contract? And why would you not just have Booz Allen hire 
different subcontractors to do the job?
    Mr. Lawrence. Sir, we have not made the decision to get rid 
of Booz Allen, so that is inaccurate. That is being discussed 
right now. They do many things for VA broadly, and they will 
continue. I think we are trying to figure out how to redirect 
them to the work they continue to do for =VA. So that is a 
misnomer.
    To get to your broader question, though--
    Mr. Banks. Why don't we pause with that? How much have you 
paid Booz Allen?
    Mr. Lawrence. I don't know. I don't administer those 
contracts. We can take that for the record.
    Mr. Banks. Okay. Please do. Go ahead.
    Mr. Lawrence. More broadly, I think, you know, my 
recommendation for which the Secretary and others churned on 
and accepted dealt on sort of three primary tenets, and this 
was pretty clear to me based on my professional experience, as 
well as just traveling through this journey that I arrived on 
it.
    We had real challenges with accountability, and so I 
stepped forward and said I would be the person accountable for 
implementing the GI Bill. We had difficulties with the program 
management structure, so we will engage our FFRDC, Federal 
Funded Research and Development Center, the special 
relationship we have with the MITRE Corporation, to provide 
conflict-free advice on the program integration, the schedule, 
and help us manage it. And then we will go find a world-class 
contractor to deal with the following: systems integration and 
software development.
    Two weeks ago when I sat here, you listened to the 
contractor say, I do software development. We need to do 
systems integration. You will recall I drew the chart with all 
the boxes. That is what he was talking about.
    In hindsight, we need a systems integrator and software 
development corporation to help us.
    Mr. Banks. Okay. Let me switch gears a little bit. One of 
the issues that came up on the Committee staff's trip recently 
to Muskogee GI Bill processing office was the problems that 
processors were having with Microsoft Word and other Microsoft 
systems.
    It is my understanding that you were given a plan before 
Thanksgiving from OINT to bring in a team to try to address 
these problems. Have you acted on that plan? And if not, why 
not?
    Mr. Lawrence. Sure. We had a team there when I visited the 
next week, so, yes.
    Mr. Banks. What have they done? What has that team done?
    Mr. Lawrence. They have been de-conflicting the software 
and identifying workarounds to make it, so it does not lock up. 
And that has been dramatically reduced. I am still concerned 
that we are using workarounds versus a solution, so we are 
trying to figure out whether we need to engage Microsoft, for 
example. But, again, that has been--
    Mr. Banks. So you are still trying to figure out whether or 
not to engage Microsoft? What has that team accomplished? What 
has come out of--
    Mr. Lawrence. They are about 95 percent of the way there. 
And the question is, you know, is it because we have 
workarounds or we solve the problems. And that is still being 
assessed.
    Mr. Banks. When do you think we will be 100 percent of the 
way there?
    Mr. Lawrence. I don't know the answer. I will be happy to 
come back and talk to you about it.
    Mr. Banks. All right. I yield back.
    Mr. Bost. Mrs. Radewagen, you have been recognized.
    Mrs. Radewagen. Thank you, Mr. Chairman. I want to thank 
the Ranking Member for holding this important meeting. I also 
want to welcome the panel. Thank you very much.
    My question is for Inspector General Missal. Are there any 
of your recommendations in the MST report that VA is not 
addressing?
    Mr. Missal. I am sorry, that VA is not?
    Mrs. Radewagen. Are there any of your recommendations in 
the MST report that VA is not addressing?
    Mr. Missal. No. They have concurred with all of the 
recommendations and are in the process of implementing them. 
And we will review that to ensure that they are fully 
implemented.
    Mrs. Radewagen. And, Dr. Lawrence, how are you planning to 
address the rest of IG's recommendations? And when is the 
timeline to complete these actions?
    Mr. Lawrence. We are going to address them aggressively. We 
have already started on some, so I know--let me draw on Willie 
here because he actually implements the plans we have.
    Mr. Clark. Good morning. We have a several-pronged approach 
to dealing with the MST. Beth spoke earlier on the training. We 
are updating the modules in a YouTube type of effect. We also, 
Beth, we have updated the manual, mandating the use of a 
checklist that all of our claims processors are supposed to use 
or will use. We are mandating a checklist for them to use. That 
way it will improve upon our quality if they are guided into a 
step-by-step process of what they need to do for the 
appropriate development of that case, and to rate the case.
    We also have identified coordinators for MST for each of 
our regional offices. We have conducted training, all of which 
has happened. We completed some training in September, in the 
end of last month. We have another set of training that is 
supposed to be done--or has been completed at the end of this 
month. So every one of the recommendations, we have 
implemented.
    Mrs. Radewagen. Thank you, Mr. Chairman. I yield back.
    Mr. Bost. Thank you.
    I see that our colleague, Representative Peters, has joined 
us here, and I would like to ask unanimous consent that 
Representative Peters be allowed to sit at the dais and ask 
questions.
    Hearing no objections, so ordered.
    Mr. Peters, you are recognized.
    Mr. Peters. I am going to pass this round.
    Mr. Bost. Chairman Roe.
    Mr. Roe. I want to just get a couple things clarified. And 
this GI Bill is complicated. So that I understand and so that 
our students out there understand, Dr. Lawrence, is that when 
the law went into effect August 1, it contained two sections, 
107 and 501. And as I understand it, the 501 section is a COLA, 
it is the cost of living adjustment. The 107 section is where a 
student would be paid a per diem based on where the bricks and 
mortar campus is. And then lastly, the online students are paid 
at a different rate.
    So am I correct on all that? Do I understand that right?
    Mr. Lawrence. That is correct.
    Mr. Roe. Okay. And I want to make sure that I understand 
that when the law states that all this goes into effect on 1 
August of this year, 2018, are we saying, and maybe I 
misunderstood you, but are we saying that the 107 provision and 
the 501 provision will be made whole, those students under both 
those provisions, will be made whole as of the law was stated 
on 1 August? Am I correct on that?
    Mr. Lawrence. We are going to go back into the fall of 2018 
and make sure they get the DoD uncapped rates.
    Mr. Roe. Back, again, are we going to--are we going to 
follow the 107 section of law which says where the bricks--like 
a student, for instance, let's say the student is going to 
college in San Francisco. It has a much higher per diem than if 
they went to college where I did in Clarksville, Tennessee, 
which is a per diem that would be less than half or a third of 
that much. That student who took the majority of their classes 
in Clarksville will be paid a certain per diem. Am I correct?
    Mr. Lawrence. That is correct.
    Mr. Roe. And then the student who would be in San 
Francisco, which is obviously much more expensive to live 
there, we are going to go--because those payments may not be 
correct right now--are we going to look back and follow law and 
pay them going forward? Then what is the discussion about 
changing the statute to December of 2019? That is what I don't 
understand. If we are going to go back and make 107 and 501, we 
are going to follow that, then what is the point in moving it 
forward? I know it is a lot of work and it is complicated, but 
I want to make sure we get it straight here today for the 
people.
    Mr. Lawrence. Sure. So this fall, we are using the 2017 
rates. We need to use the 2018 rates. That is the true-up we 
are doing.
    When we implement the law, the Forever GI Bill in December 
of 2019, we will not use the ZIP Code. We will be using the 
definition of campus, and that is what we use going forward.
    Mr. Roe. But the law states now that in August 1 of now we 
should be doing that, correct?
    Mr. Lawrence. That is correct.
    Mr. Roe. So, again, why wouldn't we follow the--because 
there are going to be a group of students that for at least 1-
1/2 academic years are not going to be paid correctly and are 
not going to be trued-up? Am I right on that?
    Mr. Lawrence. No. They will be trued-up for this fall. 
Okay. It is not clear what the difference will become the 
implementation.
    Mr. Roe. Maybe none.
    Mr. Lawrence. Maybe none. We will have to assess the burden 
on schools to go back. We will have to assess the burden on 
VBA, and we will have to figure out the benefits to folks we 
are describing. It is not clear there will be any difference 
under this interpretation of what a campus is.
    Mr. Roe. And again, I am not trying to overdo the point, 
but if we follow the law as is, then you have got to go back 
and look. It creates, I realize, a lot of work to do that, I 
understand that, to go back and make sure that those students 
who started class in the fall semester in August of this year 
are going to be made whole, according to the law as it was 
passed August 1, and stated in law August 1 of 2018.
    Mr. Lawrence. Right. We will seek to work with you and your 
staff to better understand whether that is in the best interest 
of veterans, given all the work you described, the potential 
low benefits from doing that, quite frankly.
    So I think we need to figure out whether we need to come 
back to you and ask for a legislative change to push the date 
to December 1 or not. It is not our intention to harm veterans. 
We also have to think about the broad veteran population and 
whether what you are describing yields any benefit, just work.
    Mr. Roe. Well, I think--anyway, we will continue this. I 
will go ahead and yield back, but I want to make sure that we 
off-mike work through this and just see how many veterans we 
are talking about. Because there could be some that we have 
underpaid out there, and probably are veterans that have been 
underpaid. And we want to make sure that those veterans get 
what they earn and what the law stated.
    I yield back.
    Mr. Bost. It is the chair's intent to have a second round 
of questioning. The second round of questioning will be a 3-
minute, so the Members know.
    So recognizing myself, because we really want to focus--
this GI thing is big, okay. And we want to know, and I think 
the people deserve to know, because when Representative Banks 
asked, there was still some confusion on the statements, I 
guess, that were made yesterday. And you clarified those, and I 
appreciate that.
    That being said, how many--what is our actual number of 
GIs--that are receiving the GI benefit at this time?
    Mr. Lawrence. I don't have the exact numbers in front of 
me, but when I was here 2 weeks ago, I said it was 450,000, 
approximately.
    Mr. Bost. Do we know an approximate error ratio or how many 
people are being affected and which ones were underpaid? I know 
we can't get exact number but--
    Mr. Lawrence. No. That is part of the problem, without the 
technology, we were unable to do anything but estimate that 
broadly, and I am not so certain those were accurate estimates 
because of the way the changes were going through.
    Again, I apologize I don't have subject matter experts 
here, but I would be happy to take questions for the record on 
the GI Bill as we get to--
    Mr. Bost. Okay. Then the question I have on top of that is, 
as you go back and try to figure out these errors and then live 
up to the commitment to make someone whole, is it going to have 
to be done through the tech people that you were working with 
originally? Because the statement--was it Booz and--the 
contractor's--are they going to have to be able to pull that 
out or can your staff pull that out and figure that--
    Mr. Lawrence. Sure. The--sorry, I didn't mean to cut you 
off, sir. The technology is in place to do the true-up I've 
described for the fall of 2018. The next two weekends, we will 
load the 2018 rates, we will compute them. And folks who were 
short will get a check in January for the difference.
    Mr. Bost. Okay. I think another concern is where the 
Chairman was asking as well, this confusion about what your 
home ZIP Code is but where you were actually located and then 
getting the proper per diem is vitally important, especially 
whenever the law has been written, and so that is what we will 
do to make sure that everything is caught up and done 
correctly. And trying to get--I want to know from this 
Committee's standpoint that we have the commitment that that is 
going to be the case where your staff--your group as a whole is 
going to be aggressive to make sure that anyone that is owed is 
found out that they are owed and then made whole in each one of 
the areas.
    Mr. Lawrence. So, yes, generally, but let me work 
specifically on this. There is a couple things going on here in 
the new path forward.
    One of them is returning to the definition in the law of 
what a campus is. It is a building owned by an institution. 
That is different than the ZIP Code thing we explained where 
students could do an interim. This is different. That 
difference will go into place December 1, 2019, for the spring 
semester of 2020.
    When we asked to go back, it is not clear what the 
differences will be, and that is what we have to figure out and 
work with your team to figure out, is all the processing going 
to end up with one person getting a check for a dollar. We 
don't know that yet. It is not our intention to harm veterans, 
but it is also our intention to process the GI Bill effectively 
and accurately going forward.
    Mr. Bost. Okay. I am out of time.
    Ms. Esty.
    Ms. Esty. Thank you, Mr. Chairman.
    Again, I think we need clarity on this. And this is, again, 
an example of we had an intent in the law, veterans may have 
understood that to be a certain way, so we may still have an 
issue. You may look at the law and say, well, we interpret it 
this way. I assure you, we are going to have constituents who 
will say that is not what we thought that to mean.
    So we need to be in close communication as you look at what 
is an error, to understand there are going to be veterans who 
believe that they were promised this, and we need much greater 
clarity. And that takes me to sort of the second point.
    The IG noted that some of these systematic problems going 
back, and I am thinking now with our hearing next week, we have 
got appeals modernization rolling forward. So what are we going 
to do, not only on the Forever GI Bill, but on appeals 
modernization to be looking at that IT capacity and knowing 
what the requirements are so that we are not faced with exactly 
the same kind of situation with appeals modernization where we 
are having to go back and redo and rerun and rework, which is 
one of the core things we need to stop doing, is having so much 
need for rework?
    So if you can address what is being done now. Are we doing 
beta testing? How are we going to ensure that we understand the 
needs the system will have from an IT point of view that we 
aren't, you know, learning by the seat of our pants having done 
a national rollout and actually not being ready to do that?
    Mr. Lawrence. I don't want to steal the thunder from the 
team that will appear before you next week on appeals 
modernization, but they will tell you a very positive story 
with technology. The system is in place and they are doing end-
to-end testing exactly the way you are describing.
    I will tell you that the takeaway from my confirmation 
hearing were the two things that I should worry about going 
forward were the GI Bill and appeals modernization. And after I 
was in office for 1 week, I started meeting with both teams 
every week for an hour to understand the state of what is going 
on.
    I will tell you that in terms of appeals modernization, you 
see a very different experience. The team began working 
together 3 years ago. The systems we used are some of the most 
mature, and the technology we use is new and invented just for 
this purpose.
    So far along the way all tests have been passed. I am very 
positive. They will tell you more about it next week, I 
believe.
    Ms. Esty. Well, I hope we can take the lessons that are 
being learned there and make sure that those are used every 
time with forward-going programs. And to the extent we can, 
then put this back into the Forever GI, or at least maybe we 
cut that off and start over again with the kind of design we 
are doing to benefit from this approach. Because I think 
sometimes trying to bootstrap and rework a system that is not 
working well is not a good way to go. I am just going to put 
that out there as something for you to consider.
    Thank you, and I yield back.
    Mr. Bost. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    Dr. Lawrence, first of all, if you are unable to meet the 
statutory requirements that are very clear, you need to come 
before the Congress of the United States to have those altered. 
You can't simply change the law yourself, if you are unable to 
meet the obligations that your department agreed to and the 
Congress of the United States mandated through law and the 
President of the United States signed.
    Let me ask you this. How many senior executive service 
positions do you have in VBA?
    Mr. Lawrence. I don't know the exact number. It is 
approximately 100, I would guess, but I will get you the exact 
numbers.
    Mr. Coffman. You have been there for 6 months. How many SES 
positions have you let go?
    Mr. Lawrence. I think the answer is zero.
    Mr. Coffman. Really? Because I have had a conversation with 
our new Secretary and followed up in writing to him that there 
are about 400 positions in the senior executive service level 
in the Department of Veterans Affairs.
    After the scandal with the appointment wait times, on a 
bipartisan basis, the Congress of the United States passed and 
President Obama signed the ability for you and for the senior 
leadership of this department, the Department of Veterans 
Affairs, to expeditiously let go senior executive service 
personnel that were not competent.
    In my discussions with the Secretary, he is unwilling to 
make that commitment to do that, to look through these 400 
positions where there is objective failure and the inability to 
correct that failure by inspector general reports, by GAO 
reports. And yet you will never change the culture of 
bureaucratic incompetence in the VA unless you are willing to 
look through those 400 positions. And where there is a lack of 
competence, where problems are unresolved, that you are 
unwilling to make those hard decisions, which our Secretary is 
not willing to do, which you obviously haven't done, then 
nothing will change.
    This President will fail the country in terms of the 
commitments that he made to change the VA. He changed the 
Secretary, but that was on the basis of his record in terms of 
personal spending or spending taxpayer dollars on a European 
vacation. It was not on his competence in terms of running the 
VA. This is the same VA of the prior administration, just 
papered over with saying how great things are when they are not 
great.
    I yield back.
    Mr. Bost. Mr. Lamb, you are recognized.
    Mr. Lamb. Thank you, Mr. Chairman.
    If it is okay, I am going to go back to one of the issues 
that this hearing was called for having to do with processing 
of benefits claims. In particular, our VAs in Pittsburgh 
process claims involving military sexual trauma. And I know--
well, I guess you can confirm for me if I am correct, that each 
office is supposed to have a specialist dealing with military 
sexual trauma claims. Is that true, Mr. Clark?
    Mr. Clark. Good morning, Mr. Lamb. That is true. We have 
specialized individuals for military sexual trauma at each RO. 
That is true.
    Mr. Lamb. Okay. And have you been able to fill all those 
positions? Are they full as of right now?
    Mr. Clark. They should be full, yes. We have military 
sexual trauma coordinators that are full. If for some reason, 
someone left yesterday that, you know, that I don't know about, 
but, generally, our leaders know to keep those positions filled 
and to make sure that they receive all of the requisite 
training and quality measures are filled in order do this work. 
They are not to do the work on an MST claim unless they have 
had the requisite training and they follow the guidelines that 
we have set forth with this checklist and viewing the trainings 
materials and the like.
    Mr. Lamb. Okay. Are they overseeing examinations for 
military sexual trauma done by contractors or more done by VA 
personnel?
    Mr. Clark. For the most part, contractors.
    Mr. Lamb. Okay.
    Mr. Clark. But there are some instances where VHA doctors 
perform these examinations. And again, VHA sometimes uses 
contractors as well.
    Mr. Lamb. Have you looked at the outcomes or quality of 
those examinations to see whether the contractors are doing an 
adequate job? Because I think this is an area where the VA's 
doctor's kind of particular training and familiarity with this 
population and this type of claim would really help.
    Mr. Clark. I would certainly let Ms. Murphy speak to that.
    Ms. Murphy. So, sir, I think it has generally been about a 
50/50 split overall with exams as far as VHA versus 
contractors. I think we both entities, VHA and VBA, watch 
closely who is doing the exams and has quality controls, 
checking the reports.
    So I can't, in the moment, speak to the specifics, but, 
yes, both sides are watching, both sides are engaged in this 
work.
    Mr. Lamb. Okay. Thank you very much.
    Mr. Chairman, I yield back.
    Mr. Bost. Thank you.
    And, Mr. Bergman, you are recognized.
    Mr. Bergman. Kind of to continue on with my questioning 
along the line of building a culture. As we look at the GI Bill 
going forward and the payments and the coordination between the 
VA and the educational institutions--not the veteran, but the 
educational institutions--about a year ago, we had a hearing in 
here where I brought up the concept of in the brain core, the 
sand table exercise. And we did a little, you know, back and 
forth on that. But the idea of is there--and by the way, this 
Committee, bipartisan, is going to be the best partners that we 
can be with you, because we want results just like you do. Of 
course, it is our job to give you the money and then hold you 
accountable. It is your job to execute the mission.
    Is there anything that we can do for you to, if you will, 
to participate in a--I am going to call it a sand table 
exercise that the goal of this exercise would be to see where 
the system can be gamed, whether it be accidental or on 
purpose, on either side of the equation? Because unless we take 
what we are about to implement and then put it into exercise to 
see and put the--I know all these minds on all sides of the 
table are smart, motivated, and potentially devious, okay? 
Because I have kids. I have grandkids. You know, that is how it 
works. And it is up to us to make sure that we make--that we, 
if you will, close accidental loopholes that cause others pain. 
Pain of loss of dollars or pain of loss of credits or whatever 
it happens to be.
    Any thoughts on where we can do that? Or maybe that is 
already in your game plan.
    Mr. Lawrence. Yes and yes. Absolutely want your help. A 
couple things immediately come to mind. One of them is when we 
do the user testing, to sort of, you know, get examples of 
veterans that we think we need to make sure the system works 
for. So I know your staff has been great sort of identifying 
people who call you and say I am having trouble, so we do that.
    In addition, I am sure the new plan going forward, we will 
spend a lot of time with you explaining things. So I think 
there is probably, you know, reason for engagement as our 
interpretations of some of the things that require and to make 
sure that we are coordinated on that as well.
    Mr. Bergman. Okay. Well, again, I see my time is about to 
run out, but engage us early because the sooner we engage and 
the sooner we pick it apart, the less we are going to have to 
have hearings like this after the fact.
    And I yield back.
    Mr. Bost. Thank you.
    Mr. Peters, you are recognized.
    Mr. Peters. Thank you, Mr. Chairman.
    Dr. Lawrence, I just want to make sure I am clear on 
exactly what you're saying about Section 107 of the Forever GI 
Bill, which we passed last--or this session.
    Section 107 is the section dealing with students being paid 
according to where they are taking the majority of their 
classes. And are you testifying right now that after the VA 
finally implements Section 107, that they will go back and 
recompute what students would have been paid had Section 107 
been in place by the August 1, 2018, deadline in the law, and 
if they were underpaid between August 1, 2018, and when the 
section is finally implemented, pay them the difference to make 
them whole?
    Mr. Lawrence. What I am testifying to is that we will go 
back into the fall of 2018, put the right rates in and make 
sure they get a check in January if they have been underpaid.
    What changes as we go forward and think about December of 
2019 is the way we thought about campuses. If you recall, there 
was a long discussion about ZIP Code in practicums--
    Mr. Peters. Right.
    Mr. Lawrence [continued].--and that set-in motion some 
expectation of overpayments or underpayments and the like.
    When we return to the definition of campuses defined by the 
law and our interpretation of it, it is not clear there is 
going to be any changes. We have got to figure out what the 
implications of that are and then go back or not as 
appropriate.
    Mr. Peters. So what you are suggesting is that there are 
some--you are having an issue with interpreting the law as to 
whether money is owed?
    Mr. Lawrence. A couple thoughts. We are not interpreting 
the law. The law is pretty clear. It defines campus a certain 
way, and we are going to go execute that.
    Mr. Peters. Right.
    Mr. Lawrence. It is not clear that--possibilities. What are 
the possibilities? There could be wide-scale variation, and we 
have to go back for exactly the way you described. There could 
be no variation and the going back would be energy that would 
be better spent processing claims going forward.
    That is the unknown we have to figure out, and quite 
frankly, work with you on too. It is not our intention to harm 
people the way we are imagining. It is our intention to process 
efficiently.
    Mr. Peters. I want to get the sense of--it sounds to me 
like you are leaving yourself some flexibility as to whether to 
do that or not. Maybe you are assessing whether it is worth the 
trouble to go back in following the law as it is written. But 
we would like to know whether these people are going to be made 
whole by that formula. And I am having trouble getting that 
answer out of you, it sounds like.
    Mr. Lawrence. We want to make people whole. I am not trying 
to give you trouble. I am just trying to not give you a blanket 
statement that requires tremendous activity for no gain.
    So if you ask me what should we spend an extra hour on, 
processing things that yield veterans nothing, putting at risk 
the spring 2020 semester, or saying this doesn't yield much and 
we are going to move forward. We just have to figure it out.
    It is not my intention to be evasive. It is my offer to 
work with you to make sure we all come away feeling this is the 
right way forward.
    Mr. Peters. What are you telling veterans and students now 
who are going into the process going forward? What are you 
telling them now to do?
    Mr. Lawrence. We are telling them you will get trued-up for 
the fall of 2018 with the right rates. We will execute the new 
law in the spring of 2020.
    Mr. Peters. Okay. Thank you. My time is expired. I yield 
back.
    Mr. Bost. Chairman Roe.
    Mr. Roe. I want to go back with what Mr. Peters, the line 
he was taking. And I am not trying to be difficult, but the law 
states what we must do on 1 August. It is not an 
interpretation--like you said, it is fairly clear what the law 
states.
    The question is, are we going to follow the law? That is 
the question. And if we are not, then we have got to change the 
law. It has got to be changed to a different time. Otherwise, 
you are required by statute to go back and implement Section 
107 and 501, as stated in the law. Am I correct?
    Mr. Lawrence. That is correct. And previously, I made a 
request for your help to do exactly that, if that is what we 
conclude based on the energy that it would take for potentially 
not much gain. We completely agree.
    Mr. Roe. How would we know--I guess that is a question I 
have. I am putting myself as a student out there at somewhere, 
sitting there thinking I have a benefit that I have earned. Am 
I getting paid correctly for my benefit? Am I getting unpaid? 
How do we determine it is too much trouble to follow the law?
    Mr. Lawrence. Let me--
    Mr. Roe. How is that--do you follow? I am not trying--
    Mr. Lawrence. I understand what you are saying. And I 
appreciate that you admit you are not trying to be difficult. 
And I don't mean to be difficult either. I am trying to be 
precise in my answer.
    When we adjust the rates for fall to the 2018 rates, we 
will have honored the obligation. Nobody has yet been paid 
under this system that doesn't exist. So there isn't a feeling 
of I am owed something, unless they have been able to calculate 
something that we have been, quite frankly, unable to 
calculate. Okay?
    When we put the new system in, we will know what that is. 
Somewhere along the line as we begin to see it coming into 
focus, we will make an estimate of what you are just 
describing, what is the difference and what should we do about 
it. And that is what we will have to continue to talk to you 
about.
    Mr. Roe. So basically, what we did was, just for clarity, 
we stood up a system that didn't work and paid people what we 
had paid them in the past, and we don't know what we should 
have paid them. Am I correct?
    That is pretty much what we did. Because our IT system 
didn't work. That is what happened.
    Mr. Lawrence. Notionally, correct. That is correct.
    Mr. Roe. Yeah. I yield back.
    Mr. Bost. Well, I want to thank the panel for being with 
us. We did two rounds of questioning, and we have another panel 
that is coming forward. But thank you for being here and thank 
you for the opportunity to say that you will come back and try 
to work with us to try to straighten this out.
    Thank you.
    Mr. Bost. So we do want to invite the second panel to the 
table.
    Okay. On our second panel, we have Mr. Michael Figlioli, 
the Deputy Director of National Veteran Services for VFW. We 
have Mr. Shane Liermann, Assistant National Legislative 
Director for DAV; and Mr. Greg Nembhard, the Deputy Director of 
the Veterans Affairs and Rehabilitation Division for the 
American Legion.
    Thank you all for being here.
    Mr. Figlioli, you are recognized to start and give your 
testimony for 5 minutes.

                STATEMENT OF MICHAEL S. FIGLIOLI

    Mr. Figlioli. Thank you, Mr. Chairman.
    Chairman Bost, Ranking Member Esty, Members of the 
Subcommittee, on behalf of the VFW, thank you for the 
opportunity to testify on VA's methods for developing and 
implementing policy changes for VA claims.
    The VFW National Veterans Service established in 1919 
begins its second century of service. VFW is encouraged by the 
VA's efforts to modernize the disability claims process.
    The VA has a number of challenges to overcome. However, we 
feel the process is headed in the right direction. Our 
philosophy in dealing with VA's bureaucracy has always been 
praise when you can, be critical when you must.
    Lately, we have found ourselves more on the critical side 
than we would like. VFW has consistently held the VA's speeding 
to completion of its workload for the sake of reducing volume 
is precarious for both VA and our claimants. It does no good to 
deliver benefits to veterans faster if the decisions made are 
incomplete or inaccurate. It is futile to implement policies 
for the sake of implementing policy and declare mission 
accomplished.
    Over the last 3 years, the VA has rolled out programs that 
were intended to alleviate a number of claims and appeals-
related issues. VFW and our partner VSOs cautioned the VA on 
numerous occasions about the pitfalls of rapid development.
    We are appreciative of the VA's efforts in seeking VSO 
input for newly developed platforms. Despite repeated attempts 
urging the VA to assess shortfalls and take corrective action 
before implementation, we have seen the VA forced to play 
catchup time and time again.
    VFW has been concerned since the implementation of the 
National Work Queue. Why do some claims seem to move smoothly 
through the system while others are bogged down due to 
misunderstood guidance or improper application of the law? We 
have not discerned why, other than pointing to inconsistency in 
the system. Up until the decision was made to level the playing 
field, we had the ability to mitigate irregularities at the 
local level.
    Since the implementation of National Work Queue, VSOs have 
been restricted more than ever in locally resolving problems at 
the regional office, such as the example we cited from 
Pittsburgh where our local advocate was told by RO leadership 
that calling the White House hotline was the only way they 
could move on a claim that required significant attention.
    In my many years as an accredited VSO, this is one of the 
most absurd responses I have heard from VA staff on an issue 
that could have been easily resolved. To be frank, the VFW has 
been doing this longer than the VA. We pride ourselves on the 
advocacy we provide to our claimants.
    But what happens when the VA no longer permits its 
employees to do the right thing locally? I fear that the drive 
to National Work Queue, while well-intentioned, has only 
amplified problems with the VA's inconsistency. The goal was to 
level the playing field, to ensure veterans receive consistent, 
timely, quality decisions. The playing field is certainly more 
level today but not in the way we intended.
    Instead, we see shoddy work from all corners of the VA, 
with little accountability for what has gone wrong in the 
process. We see our leadership that is hamstrung from doing the 
right thing because it makes the national system look bad.
    Regarding the recent IG reports, they all point to sloppy 
development at the regional office and significant gaps in 
training. None of what the IG found came as a surprise to VFW, 
and this is no way to serve veterans.
    As with any new implementation, training is paramount to 
success. This is a persistent shortcoming in VBA. Across the 
VFW's field offices, our staff see little consistency in the 
application of law or the Code of Federal Regulation. VFW is 
acutely aware of instances where intent of a regulatory change 
is crystal clear, but applied irregularly at the majority of 
ROs, whether it is the acceptance of electronic signatures, 
recently updated forms, or simply processing dependency claims.
    As we discussed in detail in our written statement, if the 
VA is fully committed to establishing a fully electronic and 
efficient claims process as they have touted over the past few 
years, they need to ensure consistency across all regional 
offices.
    In all the scenarios we outlined in our prepared testimony, 
VFW maintains that proper training will result in better 
outcomes for the VA and its customers. The VA needs to get it 
right the first time every time. The welfare of our veterans 
requires it. If quality training is not developed, implemented, 
and overseen, veterans and their families pay the price.
    As said in our opening statement, VFW has been embedded in 
the claims process for longer than the VA has existed. We have 
always been able to provide a local mediation to assist the VA 
in getting it right only to be told in the name of efficiency, 
we can no longer do that. With the inconsistencies the VFW has 
seen recently, it becomes clear the policies and innovations 
the VA seems extraordinarily proud of don't exist in the eyes 
of veterans and family members who continue to suffer delays 
and denials.
    In closing, the VFW does believe the VBA is headed in the 
right direction in establishing a fully electronic and easily 
accessible claims process. However, the VA still has 
significant problems in the system that need to be addressed, 
starting with the unrealized efficiencies of National Work 
Queue and the seeming lack of authority for ROs to resolve 
issues at the lowest possible level. We hope this Subcommittee 
takes a hard look at these issues and works to resolve them in 
a way that truly benefits veterans.
    Mr. Chairman, this concludes my testimony. The VFW thanks 
you and the Ranking Member for the opportunity to testify on 
these issues, and I am prepared to take any questions you may 
have.

    [The prepared statement of Michael Figlioli appears in the 
Appendix]

    Mr. Bost. Thank you, Mr. Figlioli.
    Mr. Liermann, you are recognized for 5 minutes.

                 STATEMENT OF SHANE L. LIERMANN

    Mr. Liermann. Thank you.
    Chairman Bost, Ranking Member Esty, and Members of the 
Subcommittee, thank you for inviting DAV to testify at today's 
hearing on VA's implementation of policy initiatives and the 
challenges identified in the three recent OIG reports.
    We are deeply concerned over the findings of the 
significant deficiencies in these reports from July and August 
of this year. The reason for these substantial errors can be 
broken down into three main categories: training, IT systems 
development, and quality review.
    For example, the unwarranted medical reexaminations for 
disability benefits report estimated that during the 6-month 
review period, VBA spent over $10 million on examinations not 
required by VA policy. The reexaminations resulted in proposed 
benefit reductions for 3,700 veterans.
    The OIG determined the main reasons for the unwarranted 
examinations were lack of pre-examination review, lack of 
system automation, and inadequate quality assurance reviews.
    The report on processing inaccuracies involving veterans' 
Intent to File submissions for benefits found that 97 percent 
of the cases reviewed with errors resulted in underpayments. On 
a national level, this resulted in an estimated $72 million in 
underpayments to veterans and their families.
    The reasons for the ITF processing errors were noted to be 
an absence of standard operating procedures and inadequate 
procedural guidance, deficient and delayed training, lack of 
quality assurance, and a lack of IT development as VBMS lacked 
functionality.
    In reference to the OIG report on denied PTSD claims 
related to military sexual trauma, VBA staff did not always 
follow policy and procedures, and as a result, they incorrectly 
processed approximately 49 percent of the MST-related claims 
that were denied during the review period.
    The reasons the MST-related claims were incorrectly 
processed were a lack of previous specialization, lack of 
additional review, and discontinuance of specialized focused 
reviews, and inadequate training.
    In all three OIG reports, these errors could have been 
mitigated with the adoption of a VBA-wide strategic formula to 
apply prior to implementation of any new changes processes, 
benefits, or IT systems.
    As demonstrated, VBA's erratic training, lack of planning 
for IT systems development, and uneven quality review has 
wasted millions of taxpayers' dollars, as well as underpaid, 
denied, and reduced thousands of veterans. The VA needs to 
develop proactive measures to lessen these deficiencies in 
future projects.
    We recommend VBA to create a systematic strategic review 
process for new policies and initiatives. This could encompass 
each appropriate VA office potentially impacted by any of the 
new policies, such as the VA Office of Training, the VA Quality 
Assurance and Review, IT services, to include VBMS and the 
National Work Queue. However, to be truly effective, it 
requires VSOs and other stakeholders, as well as VA's frontline 
subject matter experts, including RVSRs and VSRs.
    A good example is how VBA, VA agencies, GAO, VSOs, and 
other stakeholders were all engaged from the beginning in the 
development of the Appeals Modernization Act.
    Before its implementation, VBA and BVA have collaborated to 
develop IT infrastructure, training programs, and quality 
review. This type of proactive strategy will lessen the 
preventable errors noted by the OIG.
    Mr. Chairman, the need for this type of strategic review 
process is, again, reaffirmed by the most recent OIG report 
released just last week. The accuracy of claims involving 
service-connected ALS report projected that 45 percent of the 
ALS claims completed during the 6-month review had erroneous 
decisions. And once again, OIG recommended that VBA provide 
additional training, better quality review, and add 
functionality to VBMS.
    A systematic strategic review process would focus on 
vetting new policies and initiatives to prevent these 
unintended consequences that negatively impact veterans and 
their families. It would be better for the VA to invest time 
and resources preventing these problems from occurring, rather 
than developing workarounds and patches after veterans have 
already been harmed. This pattern of systemic failures will 
continue unless action is taken.
    Mr. Chairman, this concludes my testimony. I would be 
pleased to answer any questions you or any Members of the 
Subcommittee may have.

    [The prepared statement of Shane Liermann appears in the 
Appendix]

    Mr. Bost. Thank you, Mr. Liermann.
    Mr. Nembhard, you are recognized for 5 minutes.

                   STATEMENT OF GREG NEMBHARD

    Mr. Nembhard. The American Legion remains 100 percent 
committed to our veteran community and believe that our 
Nation's heroes should not suffer at the hands of institutions 
whose existence and mission is to care for them.
    Chairman Bost, Ranking Member Esty, and distinguished 
Members of the Subcommittee on Disability Assistance and 
Memorial Affairs, on behalf of our national commander, Brett 
Reistad, and the nearly 2 million members of the American 
Legion, I thank you for the opportunity to testify on the 
Department of Veterans Affairs development and implementation 
of policy initiatives.
    We believe in quality of care at the VA facilities. We 
remain committed to a strong VA, and we believe that the VA is 
a system worth saving.
    Since 2003, the American Legion has conducted more than 500 
nationwide visits to VA medical centers and regional offices to 
assess the quality and timeliness of veterans' health care and 
provide feedback from veterans about the care and service 
provided by the VA.
    We compile reports from our visits into a publication for 
distribution to the President of the United States, Congress, 
and VA officials. This comprehensive report provides an 
understanding of VA challenges, best practices, and offers 
recommendations based on our observations and our nearly 100 
years of experience.
    The Department of Veterans Affairs Office of Inspector 
General recently published three reports addressing unwarranted 
medical reexaminations, processing inaccuracies involving 
veterans' intent to file for benefits, and denied post-
traumatic stress disorder claims related to military sexual 
trauma.
    The VA OIG reports cited inaccuracies, timeliness issues, 
lack of specialization, inadequate training, and overall poor 
quality of VA examinations completed by contracted medical 
examiners.
    The American Legion wants to protect veterans from these 
and other inadequacies and urge the VBA to take swift, 
corrective action. We believe that a variety of factors cause 
these shortfalls, including lack of funding, understaffed VA 
facilities, and contracting companies solely focused on their 
bottom line at the veterans' expense.
    Mr. Chairman, through American Legion Resolution No. 87, we 
support the implementation of policy aimed at ensuring veterans 
receive adequate, comprehensive VA examinations.
    The VA OIG report regarding intent to file concluded that 
VBA staff did not always assign correct effective dates for 
compensation. The VA led the entire initiative and set the 
deadlines well before publishing a proposed and final rule. 
Time constraints and any subsequent minimally viable product 
during this period was self-imposed. The VA must address 
processing issues associated with the intent to file to avoid 
additional costs and inconvenience to veterans and their 
families. VA claims must be processed accurately. Veterans 
should not experience additional harm in the process, 
especially when processing MST-related claims.
    The improper denial of nearly half the MST-related claims 
submitted to the VA is unacceptable. Finding ways to ensure 
these veterans receive the services they deserve is one of the 
highest priorities of the American Legion. VBA should review 
all MST-related PTSD decisions since 2011 and share the results 
with Congress and VSOs to ensure accuracy, transparency, and 
accountability.
    The growing diversity of veterans mean that a system which 
primarily provided care to male enrollees must now evolve and 
adapt to meet the needs of all veterans and to provide them the 
best possible care. The VA must continue to adjust to the 
changing demands of the population it serves.
    The American Legion continues to work directly with 
veterans to help them overcome challenges associated with 
access to VA health care and claims process. We remain 
committed to a VA that is appropriately funded, staffed, 
trained, and empowered to conduct internal quality reviews and 
oversight.
    Chairman Bost, Ranking Member Esty, and distinguished 
Members of this Subcommittee, thank you for the opportunity to 
share the American Legion's position on these vital issues 
impacting the men and women who have selflessly defended this 
Nation. This concludes my remarks, and I look forward to 
answering any questions you may have.

    [The prepared statement of Greg Nembhard appears in the 
Appendix]

    Mr. Bost. Thank you.
    So we are going to go to the 5 minutes of questioning. And 
I am going to start out.
    Mr. Liermann, we are going to start with you. And this is 
probably the most simple, straightforward question, but 
probably a very difficult one to answer, but do it anyway. How 
about that?
    Do you have any recommendations for how the VA can improve 
how it develops and implements new policies and initiatives?
    Mr. Liermann. Yes, Mr. Chairman, we do. And I think one of 
the basic recommendations is to get everybody involved, whether 
it is upstream, downstream, within the VA system, make sure all 
the offices are touching each other and being aware of the 
changes that are being made.
    For example, what happened with the MST-related claims? 
When they decided to put them in the National Work Queue, I 
don't know if everybody was fully aware we lost specialization. 
And prior to that in 2015, they stopped doing the special focus 
review or quality review of those claims. So both of those 
things happened, which created the problem we are currently in. 
So it is like those decisions were made in a vacuum.
    What we need to do is bring everybody in together and 
discuss how these are going to touch, as well as VSOs. And I 
really believe RVSRs and VSRs should be a part of these 
conversations because they are the ones dealing with this work 
on the local level. So they truly understand what changes will 
impact them and the choices or decisions they make.
    So I think if we are able to get everybody together, maybe 
not in a formal setting, but be able to vet these things up and 
down with everybody involved so we can see some of these 
possible unintended consequences in the future and prevent 
these types of things from happening.
    Mr. Bost. Mr. Figlioli, do you have anything to add to that 
that you might suggest?
    Mr. Figlioli. Thank you, Mr. Chairman. No, I can only 
concur with my colleague. It is something that we have brought 
up to the VBA, BAS, the VA a number of times. Get everybody in 
the room, listen to all of our experienced opinions. We are 
their partners.
    I had to commend Dr. Lawrence, since he has been the new 
Under Secretary and being a bit more open and more inclusive, 
we see progress. But I concur with my colleague.
    Mr. Bost. Mr. Nembhard?
    Mr. Nembhard. Thank you, Mr. Chairman. I have to agree with 
my colleagues here, and I want to second Mr. Figlioli's 
comments about Dr. Lawrence bringing us to the table.
    We have seen an increase in communication and in meetings 
with the VBA, and we truly appreciate that. I think that is the 
way forward, and we hope that relationship continues to build.
    Mr. Bost. All right. That kind of springboards me into the 
other question that I have got for each one of you. Can you 
describe the extent to which your organization consulted prior 
to introduction of the NWQ and your organizations' suggestions 
and incorporated the rollout?
    Mr. Liermann. Thank you, Mr. Chairman. I guess when the 
National Work Queue was rolled out, I am not aware of any 
consultation that was specifically done across-the-board before 
it was rolled out. I think it was brought to us once it was 
closer to a test subject and already being tested and piloted.
    I guess what we would have liked to have pointed out at 
that time is to make sure that anything that is specialized can 
still be specialized within the system, because by removing 
that, it really has created a lot of the problems, not only 
with the MST but the ALS.
    Mr. Bost. So what you are saying when I asked were you 
consulted before, you were not consulted or talked to until it 
was already rolled out?
    Mr. Liermann. Well, Mr. Chairman, that happened before I 
was on our legislative staff.
    Mr. Bost. Okay.
    Mr. Liermann. So to answer that confidently, I am not sure. 
But I am not fully aware that we were. We may have been. I 
would have to discuss that with our service department.
    Mr. Bost. Does the VFW or the American Legion, either of 
you know whether you were?
    Mr. Nembhard. Well, I was not in this position at the time, 
Mr. Chairman, but I can get you a more accurate answer to that 
after this session.
    Mr. Figlioli. Mr. Chairman, thank you. I too was not in 
this position at the time National Work Queue was developed. I 
can only add to that that we did, after the fact, bring our 
concerns to the VA. There had been improvements made, but at 
the end of the day, we still have lost local advocacy through 
the system.
    Mr. Bost. Thank you. And I yield back.
    And, Ms. Esty, you are recognized for 5 minutes.
    Ms. Esty. Thank you very much. I want to thank the under 
secretary and his team for staying. It is really important that 
you are here to hear from the VSOs. And I think that--I want 
that on the record and I want that noted, because I think that 
is exactly what the three of you gentlemen are talking about, 
the importance of collaboration, of understanding we are all 
partners in doing better for veterans. And this is precisely 
what we always need to be doing.
    And I think what you noted about, and I was pleased, I will 
also note that all three of you concurred with the Under 
Secretary's assessment that appeals modernization is proceeding 
with that kind of input from the beginning. And I think that 
needs to be baked in as what is standard operating procedure.
    I also want to note, because I know from my conversation 
with the Under Secretary yesterday, to underscore the 
importance of what you do as VSOs.
    We discussed yesterday, he talked to me about how he had 
reviewed our hearing about the sort of notices veterans receive 
and the unintelligible language that leads to lots of questions 
and lots of appeals. A great deal of work by VSO officers. He 
said he looked at that tape and has begun a complete overhaul 
of those letters.
    So I think that speaks a lot to the importance of our 
collective efforts and our collaboration, whether it is Members 
of Congress, members of the public, VSOs, those at the VA, to 
genuinely find a better way forward to serve the veterans 
community. And I think we need to keep those lines of 
communication open. Accountability is, of course, important, 
but the main mission is really to do it better and get it right 
the first time.
    What I hear all three of you talking about is, in fact, 
what we have seen, which is by taking--and Under Secretary 
acknowledged, by focusing so much, I think, on the National 
Work Queue and that backlog and the timeliness issue, the eye 
got taken off of quality. Quality has to be there. And so your 
input as these processes move forward to make sure we pick back 
up specialization.
    Mr. Figlioli, you mentioned something that has been, I 
think, much on our mind is how we utilize the benefits of the 
National Work Queue but don't have the siloing and don't have 
the delay that happens when you can't resolve claims within a 
single regional office. Could you expand on that a little bit?
    Given that we have the National Work Queue in place now, 
how can you imagine--you mentioned empowering, you know, the 
ability to decide issues closer to that granular level. Can you 
talk about what you have seen or concepts you have or how we 
can try to better integrate the best of both worlds, right, 
that granular concentration in one office, yet the efficiency 
of having National Work Queue?
    Mr. Figlioli. Thank you, Ranking Member. It has been a 
concern for a while. I think my colleagues would also agree. 
Before National Work Queue, you sat face-to-face with a 
veteran, you heard their story, you heard their concerns, you 
built a relationship with them. You knew the people in the 
regional office and you were able to have conversations as that 
claim went through the system.
    As National Work Queue has been implemented, the claim may 
start off in Boston, it will go to New York, it can be out into 
the Philippines, all in the same day. And at some point, that 
local advocate has lost eyes on what that claim is.
    Suddenly, we are asking a VSO that is in Houston, who had 
no input in the beginning of the session or the process, to 
review a claim and alert the VA to what is good, bad, or 
indifferent about that claim but not know the personal touch of 
that veteran or that veteran's personal story.
    Then the other process is going back to get these things 
corrected, essentially moved across the country. We no longer 
had the ability to just, you know, get in the elevator and go 
downstairs and talk to somebody. We have to send things via 
email or via a phone call to several regional offices. And by 
the time you get caught up with it, it could be moved somewhere 
else. It is highly inefficient, and it is just a shame that we 
have lost that ability to get things resolved at the lowest 
possible level before they end up in appeals.
    Ms. Esty. Anyone else has thoughts on this? This is going 
to be an ongoing issue, I think, about how to get the 
efficiency of those medical records, electronic medical records 
and processing of claims, specialization, but also that 
personal touch.
    So again, I want to thank you as we move forward in this 
Committee, over in the Senate, with our colleagues at the VA, 
how to do a better job and, again, try to get the best of that 
efficiency with the quality, the timeliness, and that human 
touch, you know, the hands-on that the VSOs have always 
provided and I think need to provide.
    We should not expect our veterans to be experts in appeals 
law, Veterans Affairs regulations. That is not their job. It is 
our job to take care of them.
    So, again, I want to thank all of you for joining us here 
today. And I want to thank the Chairman for his ongoing efforts 
and all of you to do better for our veterans.
    Thank you.
    Mr. Bost. I want to thank everyone for being here. With 
that, I want to recognize the Ranking Member if she has--for 
any closing remarks she might want to make besides what she--
    Ms. Esty. I think this is going to be my last Subcommittee 
hearing in Congress on this with this really wonderful 
Committee. And I want to thank all of you for your partnership, 
your hard work. And I am strongly urging this big new class of 
freshmen Members of Congress, whether they serve on this 
Committee or not, to honor that commitment to our Nation's 
veterans.
    And, Mr. Nembhard, you mentioned a really important issue 
about the diversity that we see of our veterans now. And we 
need to keep our eye on that moving forward. We have a very 
diverse group of veterans we are serving now. World War II 
veterans who have certain life experience, certain way they 
want to interface with the VA, and we have got brand new 
veterans coming out, who are unprecedented numbers of women, 
much younger, much different backgrounds.
    And that is a challenge for all of us, but I hope we are 
all up to the challenge. And I hope the 116th Congress and this 
Committee will continue to do its best to be honest brokers and 
partners in doing better for our Nation's veterans.
    And I want to thank the Chairman and the excellent staff on 
this Committee for their hard work and their bipartisan 
cooperation to make sure that we are all, to the best possible, 
rowing in the same direction and doing our level best every day 
for our Nation's veterans.
    Thank you all, and I yield back.
    Mr. Bost. Thank you.
    And before we do adjourn, let me say this: It has been one 
of the greatest honors that you could ever imagine being 
Chairman of this Committee. And let me tell you that what we do 
as far as our veterans, those living and those passed, through 
this Committee is very humbling to work on this Committee.
    Being Chairman of the Subcommittee, I will tell you, I 
couldn't ask for--I want to thank Ms. Esty. We were able to 
work together in a bipartisan manner when quite often in 
Congress, the bipartisanship doesn't occur as often as it 
should.
    I also want to say a special thank you to the staff. The 
staff has been wonderful, both Republican and Democrat staff, 
hardworking. And it is the mission and our mission to make sure 
our veterans are taken care of.
    And know this, as a marine--and I will continue to serve in 
Congress. I will still continue to focus on our veterans' 
issues. And I thank the American people and the people that 
voted in my district that gave me this opportunity. And thank 
you to Chairman Roe for giving me the opportunity to be 
Chairman of this Subcommittee.
    So finally, as I said earlier--oh, hold on. Ah, and also to 
ways to improve with the Department and assist any way we can.
    So with that, I am going to say as I did earlier, complete, 
written statements for today's witnesses will be entered into 
the hearing record. I ask for unanimous consent that all 
Members have 5 legislative days to revise and extend their 
remarks and include extraneous material.
    Hearing no objection, so ordered.
    This hearing is now adjourned.

    [Whereupon, at 1:17 p.m., the Subcommittee was adjourned.]



 
                            A P P E N D I X

                              ----------                              

               Prepared Statement of Dr. Paul R. Lawrence
                 VETERANS BENEFITS ADMINISTRATION (VBA)
    Good morning, Chairman Bost, Ranking Member Esty, and Members of 
the Committee. Thank you for the invitation to speak today on VBA's 
methods for developing and implementing policy changes and initiatives. 
Joining me today is
    Mr. Willie Clark, Deputy Under Secretary for Field Operations and 
Ms. Beth Murphy, Executive Director of Compensation Service. In this 
statement, I will provide an overview of how VBA develops, implements, 
and manages change within the organization. I will highlight some key 
initiatives and progress from recent internal reviews and will discuss 
strategies to enhance the effectiveness of our programs.

Developing Collaborative Initiatives

    VBA's number one priority is to provide Veterans with the benefits 
they have earned in a manner that honors their service. While doing so, 
VBA also focuses on ensuring we are strong fiscal stewards of the money 
entrusted to us and fostering a culture of collaboration. These 
principles guide our modernization efforts and our approach to 
organizational changes and improvements.
    VBA is a learning organization that embraces oversight and 
continually seeks to improve the business of serving Veterans and their 
families. VBA manages a wide range of Veterans' benefits and programs-
governed by laws, regulations, and procedures-administered across 56 
regional offices (RO). VBA operates in a dynamic community uniquely 
positioned to identify existing challenges and propose new solutions to 
improve the benefits claims process and its outcomes. This community 
includes key stakeholders such as Veterans, VA employees, Congress, 
Veterans Service Organizations (VSO), and other Veterans' 
representatives.
    VBA welcomes the oversight role of Congress and other entities, 
such as VA's Office of Inspector General (OIG) and the Government 
Accountability Office (GAO), to identify areas for improvement and 
change. VBA's partnership with VSOs also helps identify the needs and 
concerns of Veterans and gather ideas for policy and operational 
changes while leveraging external resources.
    VBA also relies on its employees for input on operational and 
procedural innovations. Annual leadership training events are critical 
forums for the exchange of ideas between field and VA Central Office 
(VACO) leaders. Recurring training, quality, and collaboration calls 
between VACO and ROs are vital in sharing information and gathering 
suggestions for change.

Implementing Change and Achieving Results

    VBA has transformed and modernized its claims processing activities 
dramatically over the past several years, primarily by becoming an 
organization that operates in a paperless, electronic claims processing 
environment for a significant portion of its work, which allows us to 
more efficiently and effectively assess and manage workload.
    We have previously shared information about our successes with the 
National Work Queue, our automated workload prioritization and 
distribution tool that enables VBA to maximize the capacity of claims 
processors nationally. The National Work Queue has contributed to more 
efficient claims processing; for example, during the last fiscal year, 
76 percent of disability rating claims were completed within 125 days, 
a 10 percent improvement over 2017. Also in 2018, VBA began 
distributing non-rating claims using the National Work Queue, reducing 
inventory by 31 percent and improving timeliness by 36 percent over 
2017 production levels. In Fiscal Year (FY) 2017 and FY 2018, data-
driven employee performance standards were developed to better match 
the NWQ environment. Employee performance standards continue to be 
monitored as changes occur to ensure they are fair and obtainable while 
still maximizing productivity.
    Similarly, in October 2017, Compensation Service launched the 
Quality Management System (QMS) that utilizes a national approach to 
automating and routing individual quality reviews and corrections for 
employees. QMS was created using a customized commercial off-the-shelf 
product, which allowed VBA to leverage the usage of existing products. 
Today, more than 10,000 VBA field employees across the 56 ROs use QMS 
to manage error corrections, with nearly 700,000 cases reviewed to date 
in QMS. Overall, QMS has allowed quicker reviews, more timely 
corrections, and fairness in the review process to help lead to a 
higher quality product delivered to veterans. VBA remains focused on 
mitigating performance risks by improving training, and providing a 
faster quality feedback loop on completed work. Such efforts are 
reflected in a positive quality trend in the past fiscal year across 
rating and authorization accuracy measures.
    Another milestone in VBA's paperless efforts was achieved in 
September 2018, when the last paper records exited the Records 
Management Center (RMC) in St. Louis, Missouri. This is the culmination 
of a multi-year plan to extract and scan all claims folders and service 
treatment records from the 56 ROs and RMC. The goal behind this 
extraction was to make Veterans' records instantaneously available 
electronically in the Veterans Benefits Management System (VBMS) for 
faster claims processing. In all, more than 7.8 million inactive paper 
claims records have been extracted for scanning. Some of the space in 
RO's previously designated to store files has been reallocated to 
support initiatives such as Appeals Modernization.
    In FY 2018, VBA updated systems, policies, and data matching 
agreements to develop a more streamlined and efficient audit process to 
certify continued entitlement to the Individual Unemployability (IU) 
benefit. IU payments are provided to Veterans who are unable to follow 
a substantially gainful occupation due to service-connected disability. 
Instead of manually mailing annual income certification forms to all 
Veterans in receipt of IU, VBA now sends forms only to those Veterans 
with incomes above the eligibility threshold, based on its existing 
automated data match with the Social Security Administration. In 
September 2018, VBA sent a paper copy of the certification form to 
fewer than 10 percent (only 3,163 out of 368,979) of IU recipients 
compared to prior years because of the data match capability. This 
process strengthens internal controls, reduces burdens on Veterans, and 
redirects over 300,000 staff hours annually to processing other types 
of claims.
    These are examples of VBA's continuous improvement efforts to serve 
Veterans and their families. In each instance, VBA identified 
procedural or operational opportunities. These opportunities were then 
discussed, planned, and executed with key partners or industry experts. 
Options were tested and risks were identified and mitigated while 
keeping actively engaged in change management, training, and 
communications to ensure improved outcomes.

Recent Inspector General Reports and VBA Actions to Address Report 
    Recommendations

    In addition to internally-driven improvements, VBA also 
incorporates recommendations from oversight organizations, such as GAO 
and OIG. I will briefly address three recent OIG reports and subsequent 
VBA actions taken in response to these reports.

    Military Sexual Trauma (MST) - OIG conducted a review of VA's 
processing of Posttraumatic Stress Disorder (PTSD) claims related to 
MST. VBA concurred with OIG's findings of inadequate processing of 
these sensitive issue claims and has taken immediate steps to implement 
the recommendations, which include a special claims review. VBA issued 
guidance to its ROs on the processing of MST-related claims and 
continues to emphasize the importance of training and appropriate 
processing of these claims on national calls with the field. 
Recommendations included updating training and development checklists 
for MST-related claims at the end of FY 2018. The checklists and the 
first training course focused on development and identification of 
markers and were implemented at the end of September 2018. By October 
2nd, 2018, VBA provided updated training and guidance to claims 
processors. Additionally, VBA developed an action plan that has us on 
track to conduct special focus reviews and consistency studies in a 
timely manner. VBA has plans to designate specialized groups of trained 
Veterans Service Representatives and Rating Veterans Service 
Representatives to process MST-related claims by the end of November. 
These specially-trained employees will maintain proficiency by working 
MST claims on a regular basis.

    Intent to File (ITF) - The purpose of this OIG review was to 
determine whether VBA staff assigned correct effective dates on claims 
for compensation benefits with an ITF, which is an effective date 
placeholder in lieu of the previous ``informal claim.'' OIG found 
errors in VBA's assignment of effective dates but acknowledged 
improvement in ITF effective date quality over time as VBA implemented 
a variety of training products and system enhancements. Specifically, 
VA modified its procedures in July 2016 to include guidance and 
specific details on how to identify ITFs received electronically or by 
mail. In June 2017, VA updated VBMS to create a banner to remind staff 
that an ITF exists. The most recent accuracy reviews reflect an error 
rate of less than 4 percent, down from 44 percent. VBA will continue to 
monitor the quality of ITF effective dates to include determining if 
additional VBMS functionality is needed.

    Reexaminations - OIG conducted this review to determine whether VBA 
employees required Veterans to undergo unwarranted reexaminations. VBA 
agreed with OIG recommendations to establish better internal controls, 
design system automation features, and enhance quality assurance 
reviews to minimize unwarranted reexaminations. Prior to the audit, VBA 
had already initiated process improvements to address reexaminations, 
including a FY 2017 data-mining initiative that removed 44,000 marked 
claims which were determined to be unnecessary, saving exam costs and 
reducing the burden on Veterans. OIG's audit reinforced this 
initiative, and in FY 2018, VBA conducted Phase 2 of this initiative by 
removing another 32,000 claims designated for reexamination. VA will 
continue to utilize six-month periodic reviews of data and will 
implement new updates to our rules in VBMS in FY 2020. In October 2018, 
VA also updated its National Quality Review checklist to ensure 
employees are correctly requesting reexaminations.

Looking Ahead

    In fulfilling the mission to deliver timely and high-quality 
benefits and services, VBA serves as a leading advocate for Veterans, 
Servicemembers, and their families. A few important components of how 
VBA will mitigate risk and maximize our effectiveness in this role will 
be highlighted.
    VBA is committed to continuously increasing collaborative efforts 
internally and externally. VBA currently holds monthly meetings with 
OIG and has begun similar recurring meetings with GAO. In addition to 
these collaborative sessions, VBA and the acting Chief Information 
Officer along with their teams meet regularly in person to track key 
information and status of technology projects. Supportive of these 
engagement sessions, we continue to embrace VBA's longstanding practice 
of engaging VSOs in several monthly and quarterly forums to share 
information, listen, and engage them as project partners and strong 
Veteran advocates.

Conclusion

    In conclusion, VBA develops and executes change initiatives with 
input from a myriad of sources both within and outside of VA. VBA 
continues to incorporate technology and process improvements while 
embracing oversight and accountability, which are beneficial to 
improving our level of service and ensure good stewardship of taxpayer 
dollars. At the heart of VBA's strategy to manage change is our focus 
on assisting and serving Veterans and their families.
    VBA is focused on continuous, deliberative, and collaborative 
improvement by fostering relationships in place and further developing 
our planning processes. In doing so, VBA continues to strive for 
excellence in the service and products it provides to our Veterans.
    This concludes my testimony. I would be happy to address any 
questions from you and other Members of the Committee.

                                 
                Prepared Statement of Michael J. Missal
                           INSPECTOR GENERAL
    Chairman Bost, Ranking Member Esty, and members of the 
Subcommittee, thank you for the opportunity to discuss the Office of 
Inspector General's (OIG's) oversight of the programs and operations of 
the Veterans Benefits Administration (VBA). We recently made changes to 
our oversight model for VBA to allow us to better review national 
policy changes and focus on their high-impact programs and operations. 
Aside from reporting on specific problems and providing targeted 
solutions to VBA, we have emphasized identifying the underlying root 
causes of issues that have negatively impacted current programs and 
future initiatives. Among other causes, we have identified program 
leadership and governance as common deficiencies. We are committed to 
uncovering the source of problems that put taxpayer dollars and 
veterans' benefits at risk of fraud, waste, and abuse or that undercut 
the quality and timeliness of services to veterans and their families.
    We believe that recent VBA initiatives and policy changes were 
well-intentioned to expedite the benefits process. Our recent reviews 
and audits, however, have revealed that VBA's emphasis on efficiency 
has affected its ability to review and process claims accurately. Our 
reports identified recurring deficiencies, such as the lack of adequate 
controls and information technology functionality, that resulted in the 
inefficient delivery of services and inaccurate benefits rendered to 
veterans.

Background

    The OIG is committed to conducting effective oversight of VA 
programs and operations through independent audits, inspections, 
reviews, and investigations. VBA is responsible for delivering 
approximately $100 billion in federally authorized benefits and 
services to eligible veterans, their dependents, and survivors.
    In October 2017, the OIG implemented a new national inspection 
model for VBA oversight. Previously, the OIG largely conducted 
oversight through inspections of VBA's 56 regional offices. Under the 
new model, the OIG now conducts nationwide audits and reviews of high-
impact programs and operations within VBA. The purpose of these audits 
and reviews is to

      Identify systemic issues within VBA that affect veterans' 
benefits and services,
      Determine the root causes of identified problems, and
      Make useful recommendations to drive positive change 
across VBA.

    Since October 1, 2017, the OIG has published 15 oversight reports 
related to VBA. \1\ In these reports, the OIG made 55 recommendations 
to VBA for improvement, \2\ and identified nearly $278 million in 
potential monetary benefits. VBA has generally concurred with our 
recommendations and provided acceptable action plans. It must now 
follow through with the difficult work of implementation if they are to 
carry out their responsibilities effectively and be good stewards of 
taxpayer dollars.
---------------------------------------------------------------------------
    \1\ Audit of VBA's National Pension Call Center, November 1, 2017; 
Review of Claims Processing Actions at Pension Management Centers, 
November 1, 2017; Review of Alleged Appeals Data Manipulation at the VA 
Regional Office, Roanoke, VA, December 5, 2017; Audit of Vocational 
Rehabilitation and Employment Program Subsistence Allowance Payments, 
March 15, 2018; Review of Timeliness of the Appeals Process, March 28, 
2018; Alleged Contracting and Appropriation Irregularities at the 
Office of Transition, Employment, and Economic Impact, May 2, 2018; 
VA's Compliance with the Improper Payments Elimination and Recovery Act 
for FY 2017, May 15, 2018; Unwarranted Medical Reexaminations for 
Disability Benefits, July 17, 2018; Denied Posttraumatic Stress 
Disorder Claims Related to Military Sexual Trauma, August 21, 2018; 
Processing Inaccuracies Involving Veterans' Intent to File Submissions 
for Benefits, August 21, 2018; Accuracy of Effective Dates for Reduced 
Evaluations Needed Improvement, August 29, 2018; VA Policy for 
Administering Traumatic Brain Injury Examinations, September 10, 2018; 
Review of Accuracy of Reported Pending Disability Claims Backlog 
Statistics, September 10, 2018; Timeliness of Final Competency 
Determinations, September 28, 2018; Accuracy of Claims Involving 
Service-Connected Amyotrophic Lateral Sclerosis, November 20, 2018.
    \2\ As of November 19, 2018, 35 of the 55 recommendations (64 
percent) remain open/not fully implemented.

---------------------------------------------------------------------------
Recent OIG Oversight Reports

    We want to highlight four recently-issued reports related to the 
OIG's oversight of VBA that we believe are illustrative of our efforts:

      Unwarranted Medical Reexaminations for Disability 
Benefits
      Denied PTSD Claims Related to Military Sexual Trauma
      Processing Inaccuracies Involving Veterans' Intent to 
File Submissions for Benefits
      Accuracy of Claims Involving Service-Connected 
Amyotrophic Lateral Sclerosis (ALS)

    In these four reports, the OIG made a total of 14 recommendations 
to the Under Secretary for Benefits and identified about $187 million 
in potential monetary benefits. The reports' findings identify a number 
of systemic problems that VBA needs to address:

      Deficient control activities
      Inadequate program leadership and monitoring
      Lack of information technology system functionality
      Unintended impacts of the National Work Queue

Unwarranted Medical Reexaminations

    The OIG conducted a nationwide review to determine whether VBA 
staff required veterans with disabilities to be subjected to 
unwarranted medical reexaminations. According to VBA policy, medical 
reexaminations can be requested when there is no qualified exclusion 
from reexamination. A qualified exclusion could include, for example, a 
disability that is permanent and not likely to improve, a disability 
without substantial improvement over five years, and updated medical 
evidence in the claims folder sufficient to continue the current 
disability evaluation without additional examination. If not subject to 
exclusion, reexaminations may be requested when there is a need to 
verify the continued existence, or current severity, of a disability. 
VBA policy also requires staff to exercise prudent judgment in 
determining the need for reexaminations by requesting them only when 
necessary and making every effort to limit those requests.
    The OIG reviewed a statistical sample of 300 cases with 
reexaminations from March through August 2017 and found that VBA staff 
requested unwarranted medical reexaminations in 111 cases. Based on 
this sample, the OIG estimated that VBA staff requested unwarranted 
reexaminations in 19,800 of 53,500 cases. As a result, the OIG 
projected that VBA spent about $10.1 million on these unwarranted 
reexaminations. The OIG further estimated that VBA would waste an 
additional $100.6 million over the next five years unless it ensures 
that staff only request medical reexaminations when necessary. The OIG 
made four recommendations for

    (1) establishing internal controls to ensure that a reexamination 
is necessary, (2) prioritizing the design and implementation of system 
automation to minimize unwarranted reexaminations,
    (3) enhancing VBA's quality assurance reviews of requested 
reexaminations, and (4) conducting a focused quality improvement review 
of cases with unwarranted reexaminations to understand and redress the 
causes of avoidable errors. The Under Secretary for Benefits concurred 
with the recommendations and provided acceptable action plans.

Denied Military Sexual Trauma-Related Claims

    The OIG conducted a nationwide review to determine whether VBA 
staff correctly processed claims related to veterans' military sexual 
trauma (MST) in accordance with VBA procedures prior to denying the 
claims. Some service members are understandably reluctant to submit a 
report of MST, particularly when the perpetrator is a superior officer. 
Service members may also have concerns about the potential for negative 
performance reports or punishment for collateral misconduct. There is 
also sometimes the perception of an unresponsive military chain of 
command. If the MST leads to posttraumatic stress disorder (PTSD), it 
is often difficult for victims to produce evidence to support the 
occurrence of the assault. VBA policy, therefore, requires staff to 
follow additional steps for processing MST-related claims so veterans 
have additional opportunities to provide adequate evidence.
    VBA reported that it processed approximately 12,000 claims per year 
over the last three years for PTSD related to MST. In fiscal year 2017, 
VBA denied about 5,500 of those claims (46 percent). The review team 
assessed a sample of 169 MST-related claims that VBA staff denied from 
April through September 2017. The review team found that VBA staff did 
not properly process veterans' denied MST-related claims in 82 of 169 
cases. As a result, the OIG estimated that VBA staff incorrectly 
processed approximately 1,300 of the 2,700 MST-related claims denied 
during that time (49 percent).
    The OIG made six recommendations to the Under Secretary for 
Benefits including that VBA review all approximately 5,500 MST-related 
claims denied from October 2016 through September 2017, take corrective 
action on those claims in which VBA staff did not follow all required 
steps, assign MST-related claims to a specialized group of claims 
processors, and improve oversight and training on addressing MST-
related claims. The Under Secretary concurred with the recommendations 
and has already taken steps to address them. The Under Secretary 
recently stated that VBA was increasing its focus on MST claims by 
updating required training for claims processors, as well as adding 
more quality and accuracy reviews of MST claims. The Under Secretary 
also stated that, in FY 2019, VBA will review every denied MST-related 
claim decided since the beginning of FY 2017.

Intent to File Submissions

    The OIG conducted a nationwide review to determine whether VBA 
staff assigned correct effective dates for compensation benefits with 
submissions of an intent to file (ITF). Before March 24, 2015, VBA 
could grant entitlement to benefits as early as the date of receipt of 
an informal claim as long as a formal claim was submitted within one 
year of the date VBA sent the claimant the application form. However, 
to standardize its claims process, VBA removed the informal claims from 
its regulations and replaced them with the ITF process. With the new 
process, claimants can submit an ITF electronically, by mail, or by 
calling a VBA representative. The submission date of an ITF is 
important because VBA may use the ITF's date of receipt as the 
effective date for paying benefits.
    From March 24, 2015, through September 30, 2017, VBA reported 
receiving more than 1 million claims using ITF submissions. The OIG 
reviewed a statistical sample of 300 claims with ITF submissions during 
this period and found that VBA staff incorrectly assigned effective 
dates in 56 cases. Based on this sample, the OIG estimated that 22,600 
of the 137,000 cases (17 percent) completed during this period had 
incorrect effective dates assigned. The OIG estimated that these errors 
resulted in an estimated $72.5 million in inaccurate benefits payments 
to veterans-of which about 97 percent were underpayments. Most of the 
errors occurred during the initial period of ITF implementation, and 
the OIG found that VBA made significant improvements over time. VBA has 
since reduced the number of incorrectly dated claims to 4 percent. The 
OIG recommended that the Under Secretary for Benefits prioritize the 
modernization of the ITF system and consider integrating ITF 
submissions into the Veterans Benefits Management System (VBMS), VBA's 
electronic claims processing system. The OIG also recommended a special 
review of veterans' claims with ITFs submitted during the initial 
implementation period. The Under Secretary concurred with the 
recommendations and provided acceptable plans for implementation.

Amyotrophic Lateral Sclerosis Claims

    The OIG conducted a nationwide review to determine whether VBA 
accurately decided veterans' claims involving service-connected 
Amyotrophic Lateral Sclerosis (ALS). VA describes ALS, commonly 
referred to as Lou Gehrig's disease, as a rapidly progressive 
neurological disease that attacks the nerve cells responsible for 
directly controlling voluntary muscles. Because a statistical 
correlation was found between military service activities and the 
development of ALS, VA established a presumption of service-connection 
in 2008. As a result, veterans who develop the disease during service, 
or any time after separation from military service, generally receive 
benefits if they had active and continuous service of 90 days or more. 
Although VBA prioritizes claims for veterans with ALS, staff must also 
accurately decide these claims because it is a serious condition that 
often causes death within three to five years from the onset of 
symptoms.
    The OIG reviewed a statistical sample of 100 veterans' case 
involving service-connected ALS from April 2017 through September 2017. 
The team found that VBA staff made 71 errors involving 45 veterans' ALS 
claims. We then projected that 430 of 960 total ALS veterans' cases had 
erroneous decisions.
    For example, rating personnel incorrectly decided ALS claims 
related to one or more of the following categories:

      special monthly compensation benefits
      evaluations of medical complications of ALS
      effective dates
      benefits related to adapted housing or automobiles
      inaccurate or conflicting information in decisions
      proposals to discontinue service-connection

    These errors resulted in estimated underpayments of about $750,000 
and overpayments of about $649,000 over a six-month period. The OIG 
estimated that VBA could make an estimated $7.5 million in 
underpayments and $6.5 million in overpayments over a five year period 
if VBA staff continue to make errors at the rate identified in this 
review. Also, VBA staff generally did not tell veterans about special 
monthly compensation benefits that may be available. The Under 
Secretary for Benefits agreed to implement the OIG's two 
recommendations to implement a plan to improve and monitor decisions 
involving service-connected ALS and to provide notice regarding 
additional special monthly compensation benefits that may be available.

Systemic Issues

    Within just these four reports, the OIG identified common systemic 
issues that contributed to the troubling outcomes detailed in their 
findings. As mentioned earlier, these include deficient control 
activities, inadequate program leadership and monitoring, a lack of 
information technology system functionality, and the unintended impacts 
of VBA's National Work Queue implementation.

Deficient Control Activities

    The Comptroller General is required by the United States Code to 
issue standards for internal control in the federal government. \3\ The 
Government Accountability Office (GAO) Standards for Internal Control 
in the Federal Government provides the overall framework for 
establishing and maintaining an effective internal control system. It 
further defines control activities as the actions that management 
establishes through policies and procedures to achieve objectives. In 
all four reviews, the OIG determined that inadequate control activities 
contributed to the deficiencies identified.
---------------------------------------------------------------------------
    \3\ Section 3512 (c) and (d) of Title 31.
---------------------------------------------------------------------------
    VBA currently requires an additional level of review for some types 
of complex claims, such as traumatic brain injury cases, but does not 
require this additional level of review for MST-related claims. The OIG 
determined that an additional level of review for MST-related claims 
would serve as a control activity to ensure VBA staff processes claims 
in accordance with applicable regulations.
    We reported in our ALS work that VBA policy requires an additional 
level of review for decisions involving higher levels of special 
monthly compensation. The OIG identified errors in 25 ALS decisions 
despite having additional reviews by rating personnel or VA regional 
office managers. The OIG determined VBA should implement a plan to 
improve the decisions and additional reviews of claims involving ALS 
and monitor these claims to ensure staff demonstrate proficiency.
    In the ITF review, errors generally occurred because the ITF 
process was new and had a six-month implementation and delivery period. 
VBA did not take the time to set up adequate standard operating 
procedures before implementing the new initiative. The OIG determined 
that errors generally occurred due to inadequate procedural guidance 
that lacked specific details for locating electronic ITF submissions 
within VBMS. Since nationwide implementation of the ITF process, VBA 
has taken steps to improve its control activities, which has resulted 
in improved accuracy.
    We found in the unwarranted reexaminations review that VBA policy 
requires a pre-exam review of the veteran's claims folder before 
requesting that a veteran appear for a medical reexamination to 
determine whether it is needed. The pre-exam review should be completed 
by a rating veterans service representative and would serve as a 
control activity to prevent unwarranted reexaminations. However, VBA 
management routinely bypassed the pre-exam review, which contributed to 
the significant number of unwarranted reexaminations ordered by VBA 
staff.

Inadequate Program Leadership and Monitoring

    One of the key requirements set forth by federal internal control 
standards is program monitoring. Management should establish and 
operate activities to monitor the internal control system and evaluate 
needs, as well as remediate identified internal control deficiencies in 
a timely manner. In two of the four reviews, the OIG determined that 
inadequate program monitoring was a contributing factor to the problems 
identified.
    VBA's quality assurance programs consist of the Systematic 
Technical Accuracy Review (STAR) team nationally and the Quality Review 
Teams (QRT) at each VA regional office. During the MST review, the OIG 
determined that the STAR team stopped conducting special focused 
quality improvement reviews of MST-related claims in December 2015. VBA 
managers stated that they reallocated resources toward other areas 
because the error rate declined for MST-related claims from 2011 to 
2015. However, since the volume of MST-related claims is less than 
other types of claims, many of these claims do not appear in the 
typical samples reviewed by STAR and QRT staff, who therefore lacked 
proficiency. The OIG concluded, and VBA agreed, that special focused 
reviews should be reinstated and targeted feedback and training 
provided to claims processors.
    In the unwarranted reexaminations review, the OIG determined that 
VBA's quality assurance processes did not measure whether VBA employees 
requested reexaminations only when necessary. VBA also stated that the 
quality assurance division had not conducted any trend analysis or 
special focused quality improvement reviews of the reexamination 
process. VBA agreed with the need for modifying the quality review 
processes to include a review of reexaminations and with conducting a 
special focused quality improvement review in this area.

Lack of Information Technology System Functionality

    The OIG identified issues that can be traced to a lack of 
information technology system functionality. For example, VBA could add 
features to VBMS to prevent scheduling reexaminations in cases that 
meet the exemption criteria. Specifically, VBMS could issue an alert if 
a claims processor tries to request a reexamination for a veteran that 
meets exception criteria. Implementing this strategy would help prevent 
errors and reinforce training by providing immediate feedback to staff.
    VBMS contains ITF data; however, the system lacked the 
functionality to assist rating personnel when assigning effective dates 
for benefits based on ITFs. More than two years after the 
implementation of ITF, in June 2017, VBA updated VBMS. Additional 
modernization of functionality within VBMS could further improve 
accuracy of assigning effective dates related to ITF submissions. The 
OIG recommended that VBA prioritize the design and implementation of 
system automation reasonably designed to minimize these issues.

Unintended Impact of National Work Queue

    VBA's National Work Queue (NWQ) distributes claims daily to each VA 
regional office based on factors such as workload capacity, national 
claims processing priorities, and special missions. While the NWQ is 
designed to create efficiencies, it has created other unintended 
consequences. In 2016, when VBA implemented the NWQ, it no longer 
required VA regional offices to use specialized staff to process claims 
that VBA designated as requiring special handling, which included MST-
related claims. As a result, all claims processors became responsible 
for a wide variety of claims, including MST-related claims. However, 
many claims processors did not have the experience or expertise to 
process these types of claims. This was a contributing factor to VBA 
staff incorrectly processing almost half of veterans denied MST-related 
claims. The Under Secretary for Benefits has agreed to reinstate 
specialized teams to process these claims.

Ongoing OIG Oversight

    In addition to the recently completed oversight, the OIG continues 
to work on matters designed to improve the delivery of benefits to 
veterans and their families, including several ongoing nationwide 
reviews to identify systems-level barriers to effective and efficient 
implementation efforts.
    For example, in August 2018, the OIG initiated a review related to 
the Decision Ready Claims (DRC) program. VBA established the DRC 
program to streamline claims processing and improve timeliness. Like 
the ITF process, VBA prioritized the DRC program and implemented it 
within about six months. VBA piloted the program in May 2017 and 
implemented it nationally in September 2017. As of October 2018, VBA's 
self-reported data shows that DRC cases have been completed in an 
average of about 15 days. However, the number of claims submitted 
through the program has fallen far short of what VBA initially 
anticipated. As a result, the OIG initiated a review to determine 
whether VBA effectively planned and implemented the program. The OIG 
anticipates publishing the final report for this review in early 2019.
    In May 2018, the OIG also initiated a review related to canceled 
contract medical examinations. VBA requests Compensation and Pension 
medical exams from a Veterans Health Administration (VHA) clinician, or 
through one of the Medical Disability Examination contract vendors. 
Exam cancellations can delay veterans' claims, waste appropriated 
funds, and increase VBA's workload because they duplicate the exam 
request process. Exam cancellations can also cause an adverse decision 
on veterans' claims. The OIG anticipates publishing the final report 
for this review in early 2019.

Conclusion

    VBA attempts to quickly implement programs and policies and reduce 
claims backlogs have resulted in unintended consequences. These include 
sacrificing accuracy for timeliness, rolling out national initiatives 
after small and short pilot programs, and other efforts to meet the 
changing and growing demands for benefits and services. The OIG's 
efforts to identify important systemic issues and focus on high-impact 
programs and initiatives will help limit those unintended consequences, 
and better position VBA to provide service to veterans and their 
families in the most effective and efficient manner possible.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you or other members of the Subcommittee may have.

                                 
                 Prepared Statement of Michael Figlioli
    Chairman Bost, Ranking Member Esty, and members of the 
Subcommittee, on behalf of the Veterans of Foreign Wars of the United 
States (VFW) and its Auxiliary, thank you for the opportunity to 
provide our comments on evaluating the Department of Veterans Affairs' 
(VA) methods for developing and implementing policy changes.
    As the VFW National Veterans Service (NVS), which was established 
in 1919, begins its second century of service to our nation's veterans 
and their families, the VFW is encouraged by VA's efforts to modernize 
and update the disability claims process. We take into account a number 
of challenges, both technical and administrative, that VA has had to 
overcome to arrive where we are today. Yet, despite our support for 
some changes and opposition to others, we feel the process is headed in 
the right direction overall. Our philosophy in dealing with VA's 
cumbrous bureaucracy has always been ``praise when you can, be critical 
when you must'' if it is in the best interest of our veterans. Lately, 
we have found ourselves more on the critical side than we would like.
    The VFW has consistently held that VA speeding to completion of its 
claims workload for the sake of reducing volume is precarious for both 
VA and our claimants. It does no good to deliver benefits to veterans 
faster if the decisions made are incomplete or inaccurate. It is futile 
to implement policies for the sake of implementing policies and declare 
mission accomplished. Often, employees are just becoming comfortable 
with the former system only to be forced to employ a new system or 
business process in the name of efficiency.
    Over the last three years, VA has rolled out programs that in 
theory were intended to alleviate a number of claims and appeals 
related issues. The VFW and our partner veterans service organizations 
(VSOs) cautioned VA on numerous occasions about the pitfalls of rapid 
development. We are appreciative of VA's efforts in seeking VSO input 
for newly developed platforms. Yet in the final analysis, despite our 
repeated attempts urging VA to assess shortfalls and take corrective 
action before programs went fully operational, we have seen VA forced 
to play catch up time and time again.
    The VFW has been concerned since the implementation of the Veterans 
Benefits Administration's National Work Queue (NWQ), and other 
programs, about how VA evaluates its workforce and products. Why do 
some claims seem to move smoothly through the system while others are 
bogged down due to misunderstood guidance or improper application of 
the law? We have not discerned why, other than pointing to one 
consistency: inconsistency in the system. We are well aware this is 
going to take place, but up until the decision was made to ``level the 
playing field'' we had the ability to mitigate irregularities at the 
local level.
    Since the implementation of NWQ, VSOs have been restricted more 
than ever in locally resolving problems at the VA Regional Office 
(VARO). In Pittsburgh, we worked through our local representative to 
resolve a foreign claims issue, or so we thought. VA failed to properly 
evaluate a claimed condition in 2015, pushing the veteran into a 
lengthy appeal process that affected other subsequent claims. After 
going through the normal protocols, the end result was that VA would 
not correct the issue locally. However, our local advocate was 
instructed that if we contacted the White House veterans' helpline, the 
case would be given priority and the proper attention it should have 
been given without the roadblocks.
    In all my years as a VA-accredited veteran service officer, this is 
one of the most absurd responses I have heard from VA staff on an issue 
that could have been easily resolved. To be frank, the VFW has been 
doing this work longer than VA. We pride ourselves in the advocacy we 
can provide to our claimants. But what happens when VA no longer 
permits its employees to do the right thing locally? I fear that the 
drive to NWQ, while well intentioned, has only amplified problems with 
VA inconsistency. The goal in leveling the playing field was to ensure 
veterans received consistent, timely, quality decisions. The playing 
field is certainly more level today, but not in the way we intended. 
Instead, we see shoddy work from all corners of VA with little 
accountability for what has gone wrong in the process. We see VARO 
leadership that is hamstrung from doing the right thing because it may 
make the national system look bad. This is no way to serve veterans.
    As with any new implementation, training is paramount to success. 
Unfortunately, this is a shortcoming in VBA on a number of levels. 
Across the VFW's field offices, our staff continues to see little 
consistency in the application of law or the Code of Federal 
Regulations. The VFW is acutely aware of instances where the intent of 
a regulatory change is crystal clear but applied irregularly at the 
majority of VAROs.
    One recent and ongoing example is the acceptance of electronic 
signatures. VA transitioned claims submissions to an electronic format. 
VSOs asked repeatedly if a ``wet signature'' was required or if an 
electronic facsimile was acceptable. VBA Office of Field Operations 
(OFO) advised us that a signature created on a VA-approved signature 
pad would be acceptable, and we alerted our field staff. Despite our 
best efforts to comply, we almost immediately began to receive reports 
that claims were being rejected at certain VAROs due to veterans not 
physically signing the form. Needlessly wasted time had to be taken 
from claim processing for VACO to issue corrective guidance to those 
offices that were in error, despite prior notification being sent to 
the field and guidance being clearly published in the M21-1, the 
standard operating procedure for adjudicating claims. Despite clear 
guidance from VBA on this matter, we still receive sporadic reports 
from the field that this has not been completely resolved. Similarly, 
each time VA updates its standard claims forms, we receive reports that 
VAROs immediately stop accepting the previous version both in paper and 
electronic formats, even though this directly contradicts VA's own 
rules allowing for continued use of recently expired forms. If VA is 
earnest in seeking to establish a fully electronic claims process as 
they have touted over the past few years, they need to ensure 
consistency across the VAROs in allowing for electronic submissions.
    Another instance of a breakdown in development and implementation 
is dependency claims. This has been an issue for years, and one that 
seems highly inconsistent. Some dependency claims move quickly through 
rules-based processing. But there seems to be no consistency when a 
dependency claim may be off-ramped, or even if a dependency claim will 
be addressed in a timely manner. We cite an example regarding a veteran 
living in Maryland whose claim was adjudicated through VA's NWQ across 
several VAROs. The veteran meets the schedular requirements for 
additional compensation for dependents. The VARO in Iowa denied his 
claim based on a 21-686c that was filed with his original application 
stating that he did not meet the criteria upon filing, citing erroneous 
M-21 references that failed to reinforce why VA did not address the 
dependency issue when adjudicating the veteran's claim. This is 
preposterous and speaks to the larger training issue of VA staff.
    We received a number of reports from our office in Boise where 
veterans have had to endure multiple examinations for the same 
disability over and over. All seemingly attempting to reach a 
conclusion that was desired by VA. In another example, a supplemental 
claim was submitted electronically to VA for a specific veteran. The 
claimants direct deposit information was already of record and, 
therefore, not included on the application as he was already being 
paid. Upon receipt of this new application, VA deleted his current 
banking data and set him up to receive a physical check exposing him to 
potential fraud, benefit and identity theft. On the same day, VA was 
notified by our office that another of our claimants needed to adjust 
his income and net worth for pension purposes. This veteran also 
received a letter from VA telling him that his direct deposit 
information had been updated and he would now receive a hard copy check 
to his home address.

Intent to File

    From the inception of the policy change in 2015 until the end of 
fiscal year 2017, it was discovered that 17 percent, or nearly 23,000 
ITFs received by VA were improperly processed. This resulted in more 
than $72 million in underpayments to deserving veterans. A senior VA 
manager reported that this program was deployed within 6 months from 
inception and development, which affected VBAs business model, and 
those six months were not enough to produce sound guidance. VA's own 
Office of Inspector General OIG) reported that mandatory intent to file 
(ITF) training, which was not made available to VA staff until January 
2017, was deficient. Despite VA knowing that it had hastily and 
indiscriminately fielded a flawed product, it took more than two years 
to update their Veterans Benefits Management System (VBMS) to assist 
rating personnel when assigning effective dates based on ITFs.
    The under secretary for benefits acknowledged that there were 
errors involving proper processing of ITFs, and agreed to implement 
recommendations made by the VAOIG. This notwithstanding, the under 
secretary did not agree that most errors occurred because standard 
operating procedures had been published. The VFW does not concur; 
neither does the OIG. Regardless of rules having been published in the 
M21-1, VBMS User Guide and Delta Training, the under secretary held 
that ``standard operating procedures were unnecessary for this critical 
new approach to claims processing.'' The OIG found that to be 
perplexing, as do we.

Military Sexual Trauma

    On August 24, 2018, the VFW released a statement critical of the 
handling of nearly 18,000 improperly decided claims related to military 
sexual trauma (MST) that VA had received over the previous 36 months. 
VA leaders assured us that a review would be conducted to determine 
what course of action VA would take to make these dually victimized 
claimants whole. While the headlines were alarming and reprehensible, 
the VFW was not surprised by any of the OIG's findings. In our reading 
of the report, we determined that, like most claims that are improperly 
adjudicated, these claims seemed more the result of careless 
development rather than a deeper systemic problem or bias against 
victims of MST. In fact, VA's own figures on MST claims processing show 
the year covered by the OIG investigation was actually more successful 
in adjudicating MST claim grants than prior years.
    The VFW finds it inexcusable that claimants who have experienced 
this type of trauma and whom may have explained their circumstances 
several times could be forced to relive the experience due to untrained 
adjudicators; adjudicators who must adhere to unrealistic timelines; or 
adjudicators who are beholden to a flawed work credit system. The VAOIG 
concurs with our position that inaccurate claims decisions related to 
MST may lead to additional psychological harm to MST victims.
    In all of these scenarios, the VFW maintains that proper, 
consistent, and pointed training will result in better outcomes for VA 
and its customers. Benefits Assistance Service (BAS) has testified 
before this very committee, as recently as two weeks ago, that it 
delivers training in a number of ways and on a number of topics to 
better serve veterans. If in fact the training were effective and 
overseen, we probably would not be in the current situation. VA needs 
to get it right the first time, every time. The welfare of our veterans 
requires it. Thousands of man hours and millions of dollars have been 
spent on modernization, yet despite VA's best efforts, it continues to 
find ways to put corners on a circle. If quality training is not 
developed and implemented, and so-called efficiencies overseen, 
veterans and their families pay the price. As said in our opening 
statement, the VFW has been embedded in the claims process for longer 
than VA has existed. We have always been able to provide local 
mediation to assist VA in getting it right, only to be told in the name 
of efficiency that we can no longer do that.
    In closing, the VFW does believe that VBA is headed in the right 
direction philosophically in establishing a fully electronic and easily 
accessible claims process. However, VA still has significant problems 
in the system that need to be addressed, starting with the unrealized 
efficiencies of NWQ and the seeming lack of authority for VAROs to 
resolve claims issues at the lowest possible level.
    With the inconsistencies the VFW has seen over the past couple of 
years, it becomes clear that the efficiencies and innovations that VA 
seems extraordinarily proud of do not exist in the eyes of veterans and 
the family members who continue to suffer delays and denials due to 
incorrect rating decisions. We hope this subcommittee takes a hard look 
at these issues and works to resolve them in a way that truly benefits 
veterans.
    Mr. Chairman, this concludes my testimony. Again, the VFW thanks 
you and Ranking Member Esty for the opportunity to testify on these 
important issues before this subcommittee. I am prepared to take any 
questions you or the subcommittee members may have.

                                 
                Prepared Statement of Shane L. Liermann
    Chairman Bost, Ranking Member Esty, and Members of the 
Subcommittee:

    Thank you for inviting DAV (Disabled American Veterans) to testify 
regarding the Department of Veterans Affairs (VA) development and 
implementation of policy initiatives and the reasons for the challenges 
identified in three recent VA Office of Inspector General (OIG) 
Reports.
    Mr. Chairman, as you may know, DAV is a congressionally chartered 
national veterans' service organization of more than one million 
wartime veterans, all of whom were injured or made ill while serving on 
behalf of this nation. To fulfill our service mission to America's 
injured and ill veterans and the families who care for them, DAV 
directly employs a corps of more than 260 National Service Officers 
(NSOs), all of whom are themselves wartime service-connected disabled 
veterans, at every VA regional office (VARO) as well as other VA 
facilities throughout the nation. Together with our chapter, 
department, transition and county veteran service officers, DAV has 
over 4,000 accredited representatives on the front lines providing free 
claims and appeals services to our nation's veterans, their families 
and survivors.
    We represent over one million veterans and survivors, making DAV 
the largest veterans service organization (VSO) providing claims 
assistance. This testimony reflects the collective experience and 
expertise of our thousands of dedicated and highly trained service 
officers.
    DAV is deeply concerned over the findings of significant 
deficiencies in three VA OIG reports from July and August of this year. 
As revealed by these reports, the reasons for these substantial errors 
can be broken down into three main categories: training; IT systems 
development and resources; and quality review. As we will conclude, 
these deficiencies could be mitigated with the adoption of a VBA-wide 
strategic formula for application prior to implementation of any new 
changes, processes, benefits or IT systems.

``UNWARRANTED MEDICAL REEXAMINATIONS FOR DISABILITY BENEFITS''

    On July 18, 2018, VA OIG published its findings on ``Unwarranted 
Medical Reexaminations for Disability Benefits''. The OIG team reviewed 
a statistical sample of 300 cases with reexaminations from March 
through August 2017 and found that employees requested unwarranted 
medical reexaminations in 111 cases. Veterans Benefits Administration 
(VBA) employees requested reexaminations for veterans whose cases 
qualified for exclusion from reexamination for one or more of the 
following reasons:

      Over 55 years old at the time of the examination, and not 
otherwise warranted by unusual circumstances or regulation;
      Permanent disability and not likely to improve;
      Disability without substantial improvement over five 
years;
      Claims folders contained updated medical evidence 
sufficient to continue the current disability evaluation without 
additional examination;
      Overall combined evaluation of multiple disabilities 
would not change irrespective of the outcome of reexamining the 
condition;
      Disability evaluation of 10 percent or less;
      Disability evaluation at the minimum level for the 
condition.

    The three main reasons for the requested unwarranted examinations 
were lack of pre-examination reviews, lack of system automation and 
inadequate quality assurance reviews.

Lack of Pre-Examination Reviews

    VBA policy requires a pre-exam review of the veteran's claims 
folder prior to requesting that a veteran appear for a medical 
reexamination to determine whether the reexamination is needed. It was 
estimated that 15,500 of 19,800 unwarranted reexaminations (78 percent) 
lacked a pre-exam review. Determining the necessity of a reexamination 
was a Ratings Veterans Representative Specialist (RVSR) responsibility, 
however, in 2017, this task was removed from RVSR performance standards 
as they do not receive work credit for this function. It has been 
assigned to Veterans Representative Specialists (VSRs). Bypassing the 
pre-exam review caused unwarranted reexaminations because VSRs lacked 
the training and experience needed to determine whether a reexamination 
is warranted. Similarly, 14 of the 24 VSRs interviewed told the review 
team that they were unfamiliar with the criteria for determining 
whether a reexamination was necessary. In addition, managers with 
Compensation Service's Quality Assurance Program indicated there would 
be fewer unwarranted reexaminations if RVSRs reviewed cases before VSRs 
request reexaminations.

Lack of System Automation

    VBA did not invest in developing alternative internal controls to 
make up for the lack of a pre-exam review, such as information system 
automation. Veterans Benefits Management System (VBMS) automation to 
address pre-examination review, is scheduled for FY 2019 or later. 
However, VBA did not maximize any of their electronic automation 
systems to help prevent employees from requesting unnecessary 
reexaminations.

Inadequate Quality Assurance Reviews

    VBA's quality assurance program measures claims processing accuracy 
for each VARO and for individual employees and provides feedback and 
training. The program consists of the Systematic Technical Accuracy 
Review (STAR) office and the Quality Review Teams (QRT). Neither the 
STAR office nor the QRT measured whether VBA employees requested 
reexaminations only when necessary or whether they conducted pre-exam 
reviews. The Deputy Under Secretary for Field Operations and the 
Director of Compensation Service both agreed with the need for 
modifying VBA's quality review processes to include a review of 
reexaminations, and with conducting a special focused quality 
improvement review in this area.

Impact of Unwarranted Medical Reexaminations for Disability Benefits

    The review team estimated that during the six-month review period, 
VBA spent $10.1 million on unwarranted reexaminations. It also 
estimated that VBA would waste $100.6 million on unwarranted 
reexaminations over the next five years unless it ensures employees 
only request reexaminations when necessary. The review team estimated 
that VBA required 19,800 veterans to report for unwarranted medical 
reexaminations during the review period. Approximately 14,200 veterans 
experienced no change to their disability evaluations. The 
reexaminations resulted in proposed benefit reductions for about 3,700 
veterans.
    Veterans and their families depend on their VA benefit payments to 
provide a better quality of life. VA has threatened that quality of 
life by creating unwarranted examinations that possibly led to 
thousands of veterans having their compensation benefits significantly 
reduced.

``PROCESSING INACCURACIES INVOLVING VETERANS' INTENT TO FILE 
    SUBMISSIONS FOR BENEFITS''

    On August 21, 2018, VA OIG published its findings on ``Processing 
Inaccuracies Involving Veterans' Intent to File Submissions for 
Benefits''. The OIG review team found that VBA staff did not always 
assign correct effective dates for compensation benefits with Intent to 
File (ITF) submissions. VA OIG estimated that 22,600 of 137,000 cases 
(17 percent) completed from March 24, 2015, through September 30, 2017, 
had incorrect effective dates assigned for compensation benefits 
whenever a veteran submitted an ITF.
    The OIG review team selected a sample of 300 cases completed from 
March 24, 2015, through September 30, 2017, to determine the accuracy 
of effective dates assigned. Most of the errors occurred from March 24, 
2015, through July 21, 2016, during the initial ITF implementation 
period. The OIG estimated that in 15,200 of 35,400 cases (43 percent) 
completed during that period, rating personnel assigned incorrect 
effective dates. Most of the errors occurred with electronic ITF 
submissions.
    VBA modified its ITF procedures on July 22, 2016, to include 
guidance and specific details on how to identify ITFs received 
electronically or by mail. The OIG review team estimated that in 6,000 
of 66,400 cases (9 percent), rating personnel assigned incorrect 
effective dates. The number of errors decreased significantly during 
the post-procedure update period ranging from July 22, 2016, through 
June 12, 2017. Significant improvement was shown following the initial 
ITF implementation period, with the improper processing of effective 
dates decreasing from a 43 percent error rate to 4 percent.
    The reasons for the ITF processing inaccuracies were summed up as 
absence of standard operating procedures, inadequate procedural 
guidance on electronic ITF submissions, deficient and delayed ITF 
training, quality assurance and VBMS lacked functionality.

Absence of Standard Operating Procedures

    When VBA initially implemented the ITF policy, its procedures 
mainly focused on what to do with an incomplete ITF and how to enter 
ITF data into VBMS. However, the guidance did not give rating personnel 
instructions on how to identify the electronic submission of an ITF. 
The Compensation Service's office of Procedures' lack of standard 
operating procedures when implementing ITF guidance contributed to a 
high error rate.

Inadequate Procedural Guidance on Electronic ITF Submissions

    VBA's Compensation Service Acting Assistant Director and program 
analysts for Procedures provided inadequate procedural guidance 
associated with ITF submissions. The manual procedures in use from 
March 24, 2015, through July 21, 2016, lacked details on the 
identification of electronic ITF submissions for rating personnel to 
correctly assign effective dates, despite numerous updates.
    The Acting Assistant Director for Policy stated that the ITF 
process was not part of the original proposed rule but resulted from 
negative feedback received from Veterans Service Organizations about 
the elimination of the informal claim process. Consequently, VBA had to 
restructure policies, procedures, and claims processing systems within 
a short time frame.

Deficient and Delayed ITF Training

    The OIG reviewed all completed mandatory ITF-related training from 
March 2015 through March 2017 and determined that the training 
completed before March 2017 was deficient; because it lacked specific 
information related to identifying an electronically submitted ITF.
    Compensation Service provided the OIG with an instructional video 
dated March 2015. Although the video provided instructions on how to 
record the receipt of an ITF in VBMS, it did not show how rating 
personnel would locate an electronically submitted ITF. Furthermore, a 
program analyst for Procedures indicated the video was later removed 
because it was not compliant with accessibility standards. The OIG was 
unable to substantiate whether any staff were able to view this video 
because it was no longer available.

Quality Assurance

    In March 2016, Quality Assurance conducted a national quality call 
to inform VBA staff of an error trend with effective dates and ITF. 
Based on the error trend, Quality Assurance provided explicit 
instructions on how to identify the presence of an electronic ITF 
filing in VBMS. It took until July 22, 2016, approximately four months 
from identification of the error trend, to provide these instructions.
    The VBA official reported that the development of mandatory 
training should ideally occur within a three-month time frame following 
identification of an error trend, depending on other competing 
priorities. Mandatory training was created and made available to rating 
personnel in January 2017. The same official required VARO staff to 
complete the training by March 31, 2017, a delay of approximately one 
year following the discovery of the error trend.

Impact of ITF Processing Inaccuracies

    Compensation Service's absence of standard operating procedures, 
inadequate procedural guidance for electronic ITF submissions, 
deficient and delayed mandatory training, and lack of VBMS 
functionality resulted in improper payments made to veterans from March 
24, 2015, through September 30, 2017.
    Of the 22,600 cases with errors, 21,900 (97 percent) resulted in 
underpayments and represent money that should have been paid to 
veterans between the correct effective date and the one assigned. On a 
national level, this resulted in the OIG's findings of an estimated 
monetary impact of $72.5 million in under payments to veterans and 
their families.
    In many cases, earned benefits from the VA, prevent veterans and 
their families from being homeless or at-risk of homelessness. 
Therefore, it is unconceivable that VA would act so slowly to correct 
their severe under payments. To correct also possible deficiencies and 
to afford justice to all veterans affected, we recommend that VA review 
all ITF submissions from March 24, 2015 to the present and correct all 
under payments.

``DENIED POST-TRAUMATIC STRESS DISORDER CLAIMS RELATED TO MILITARY 
    SEXUAL TRAUMA''

    On August 21, 2018, VA OIG published its findings on ``Denied Post-
traumatic Stress Disorder Claims Related to Military Sexual Trauma''. 
The OIG report team stated that VBA staff did not always follow VBA's 
policy and procedures, which may have led to the denial of veterans' 
military sexual trauma (MST)-related claims.
    In reviewing the MST-related claims denied by VBA, the review team 
found that staff did not follow the required claims processing 
procedures. The most commonly encountered errors in processing were:

      Evidence was enough to request a medical examination and 
opinion, but staff did not request one;
      Evidence-gathering issues existed, such as VSRs not 
requesting veterans' private treatment records;
      MST Coordinators did not make the required telephone call 
to the veteran, or VSRs did not use required language in the letter 
sent to the veteran to determine whether the veteran reported the 
claimed traumatic event in service and to obtain a copy of the report; 
and
      RVSRs decided veterans' claims based on contradictory or 
otherwise insufficient medical opinions.

    The reasons the MST-related claims were incorrectly processed were 
lack of previous specialization, lack of additional level of review, 
discontinued special focused reviews and inadequate training.

Need for Specialization

    VBA previously implemented the Segmented Lanes model. It had 
required VSRs and RVSRs on Special Operations teams to process all 
claims VBA deemed highly complex, as well as sensitive issues such as 
MST-related claims. The OIG review team concluded that staff on the 
Special Operations teams developed subject matter expertise on these 
highly sensitive claims due to focused training and repetition. Under 
the National Work Queue (NWQ), VBA no longer utilized the Special 
Operations teams. Under this new model, the NWQ distributed claims 
daily to each VARO and the VARO determined the distribution of MST-
related claims.
    As a result, MST-related claims could potentially be processed by 
any VSR or RVSR, regardless of their experience and expertise. The OIG 
review team determined VSRs and RVSRs at offices that did not 
specialize, lacked familiarity and became less proficient at processing 
MST-related claims.
    VARO staff suggested VBA reestablish specialized processing, 
allowing employees to develop the necessary expertise to ensure 
consistency and accuracy in processing these sensitive claims. The 
Deputy Under Secretary for Field Operations agreed that dedicated staff 
working MST-related claims would help improve the quality of claims 
processing.

Lack of Additional Level of Review

    VBA currently requires an additional level of review for some types 
of complex claims, such as traumatic brain injury cases, but does not 
require this additional level of review for MST-related claims. RVSRs, 
quality review personnel, and supervisors interviewed at the four VAROs 
visited generally thought an additional level of review would be 
helpful and could improve accuracy. An additional level of review 
serves as an internal control and quality check to help ensure:

      Claims processors followed all applicable statutes, 
regulations, and procedures;
      Evidence of record properly supports the decision; and
      RVSR adequately explained the decision.

    The Deputy Under Secretary for Field Operations and Compensation 
Service Quality Assurance personnel agreed that an additional level of 
review would help improve the accuracy of processing MST-related 
claims.

Discontinued Special Focused Reviews

    The national Systematic Technical Accuracy Review (STAR) team for 
Compensation Service and the Quality Review Teams (QRT) at each VARO 
execute VBA's quality assurance programs. MST-related claims are 
included in the STAR and QRT claim reviews. However, MST-related claims 
are only a small percentage of the overall claim volume and are less 
likely than other claim types to be randomly selected for STAR and QRT 
reviews. Therefore, STAR and QRT staff did not frequently review them.
    STAR staff completed special focused quality improvement reviews of 
MST-related claims beginning in 2011, based on the deficiencies 
identified in a 2010 OIG report related to combat stress in women 
veterans. These reviews continued based on a 2014 Government 
Accountability Office (GAO) report on MST-related claims that found the 
problems persisted. Staff performed the reviews twice a year and 
identified errors like those this OIG review team found, such as missed 
evidence or markers and failure to request necessary medical 
examinations.
    The STAR office stopped completing special focused quality 
improvement reviews of MST-related claims in December 2015. VBA's 
Quality Assurance Officer indicated the STAR office stopped performing 
special focused quality improvement reviews because it had met the GAO 
requirement. The Assistant Director of Quality Assurance for 
Compensation Service also stated that they reallocated resources 
towards other areas because the error rate declined for MST-related 
claims from 2011 to 2015.
    Given the high error rate identified during its review, the OIG 
review team determined the STAR office should reinstate special focused 
quality improvement reviews of MST-related claims.

Inadequate Training

    Compensation Service delivered MST training through four modules 
using VBA's online training management system. The OIG reviewed the 
four training modules and identified the following issues:

      Consistently referred to a development checklist that was 
outdated and inaccurate;
      Included erroneous development procedures, such as 
instructing claims processors to use incorrect medical opinion 
language;
      Misstated the MST Coordinator's role and 
responsibilities;
      Did not address how to rate claims where a diagnosis 
other than PTSD was provided; and
      Included incomplete information regarding what 
constitutes an insufficient or inadequate examination.

    The MST-related claims training was one-time only and there was no 
requirement for annual refresher training. The Compensation Service 
Quality Assurance Officer stated that VSRs and RVSRs needed refresher 
training, and staff at the four VAROs visited, generally agreed it was 
not adequate. The Director of Compensation Service and Assistant 
Director of Compensation Service Training agreed that the training 
needed improvement and indicated that VBA was in the process of 
creating a new training program. The Deputy Under Secretary for Field 
Operations stated that training for MST-related claims should be an 
annual requirement.

Impact of Improperly Adjudicated MST-Related Claims

    The review team found that VBA staff did not properly process 
veterans' denied MST-related claims in 82 of 169 cases. As a result, 
the OIG estimated that VBA staff incorrectly processed approximately 
1,300 or 49 percent of the 2,700 MST-related claims denied during that 
time. Due to the severity and volume of these errors, VA OIG 
recommended that VBA review all denied MST-related claims since the 
beginning of FY 2017 and reopen the cases with errors to ensure 
veterans receive accurate claims decisions as well as better customer 
service.
    Those who experience sexual military trauma often suffer in 
silence. However, nearly 50 percent of those claiming MST-related PTSD 
have been denied due to VA's own failures. How long will these veterans 
continue to suffer without justice?

PATTERN OF SYSTEMIC FAILURES

    The VA's requesting unwarranted examinations was estimated to 
require 19,800 veterans to report for unwarranted medical 
reexaminations during the review period at a cost of over $10 million. 
The report specifically noted that these were caused by lack of 
training, lack of automated systems, and no quality review.
    VBA's absence of standard operating procedures, inadequate 
procedural guidance for electronic ITF submissions, deficient and 
delayed mandatory training, and lack of VBMS functionality resulted in 
improper payments made to veterans.
    49 percent of denied MST-related claims were processed incorrectly 
and were not processed within VBA's own guidelines and policies. The 
reasons the MST-related claims were incorrectly processed were lack of 
previous specialization, lack of additional level of review, 
discontinued special focused reviews and inadequate training.
    The new VA OIG report ``Accuracy of Claims Involving Service-
Connected Amyotrophic Lateral Sclerosis'' released on November 20, 
2018, continues to show these same patterns. The report projected that 
430 of the 960 total ALS veterans' cases (45 percent) completed during 
the six-month review period had erroneous decisions. It was recommended 
that VBA provide additional training, better quality review and add 
functionality to VBMS.

RECOMMENDATIONS

    As demonstrated, VBA's erratic training, lack of planning for IT 
systems development and uneven quality review has wasted millions of 
taxpayers' dollars, as well as underpaid, denied and reduced thousands 
of veterans. While VA is implementing the recommendations from the VA 
Office of Inspector General, we believe VA needs to develop proactive 
measures to lessen these preventable errors in the future.
    VA has used production goals and other metrics to drive down the 
backlogs of claims and appeals and provide timely decisions. However, 
as noted by the OIG reports, VA is not placing enough emphasis on 
comprehensive training and quality review. As evidenced, lack of 
training and improper quality review of claims decisions led to 
multiple denied claims, reduced benefits, unnecessary examinations 
conducted, and inaccurate effective dates for claimants.
    Training and feedback are instrumental in shifting VA's culture to 
one primarily driven to achieve quality, rather than merely 
productivity. After all, proper quality review, training, and feedback 
will lead to more claims decisions being made right the first time, and 
thereby lead to a reduction of appeals.
    Updated and modern IT is critical to the ultimate success of VBA. 
Despite past failed attempts to modernize its claims processing systems 
over the past two decades, VBA made a critical decision to transform 
its paper-based systems and replace them with streamlined business 
processes supported by modern IT systems. However, unless VBA is 
provided sufficient resources to fully implement and program new IT 
systems at the front end, both productivity and quality will continue 
to suffer, resulting in more errors and veterans waiting longer to 
receive their earned benefits.
    Over the past several years, VBA has developed and implemented new 
IT systems to support the transformations, including VBMS, the NWQ, and 
e-Benefits. Unfortunately, VBA must compete with other offices and 
agencies within VA for the limited IT funding available each year, 
delaying development and deployment of critical IT systems and 
programming. As a result, critical IT systems are rarely fully 
developed before business process changes are implemented; instead they 
are phased in over several years, forcing VBA to rely on an 
inconsistent mix of old and new IT systems, as well as an endless 
stream of suboptimal ``work around'' solutions.
    While it may be understandable from a purely budgetary view to 
stretch out development and deployment of new IT systems, it is a 
failure from a functional perspective. Providing only partial IT 
solutions inevitably results in a loss of productivity, and often leads 
to lower quality and less accurate decisions on claims and appeals by 
veterans. Similar problems caused by inadequately developed technology 
can be seen in the Vocational Rehabilitation and Employment's (VR&E) 
$12 million IT debacle and the Education Service's continuing problems 
in making accurate payments under the new GI Bill program.
    As VA is correcting the deficiencies outlined in the OIG reports, 
we believe that if VA shifts from a reactive position to a preemptive 
and aggressive approach to future changes and new policies, they can 
lessen the types of errors noted. VA needs to devote their attention to 
developing a process to address future changes and potential new 
policies in advance of the actual changes.
    We recommend VBA to create a systematic strategic review process 
for new policies and initiatives. This could encompass each appropriate 
VA office potentially impacted by the changes, such as VA Office of 
Training, VA Quality Assurance and Review, VA IT services including 
VBMS and NWQ. However to be truly effective, it requires VSOs and other 
stakeholders, as well as VA's front line subject matter experts 
including RVSRs and VSRs.
    This systematic strategic review process should be focused on 
vetting new policy initiatives to prevent unintended consequences that 
can negatively impact veterans and their families. It would be better 
for VA to invest time and resources preventing these problems from 
occurring rather than developing ``work arounds'' and patches after the 
veterans have already been harmed.
    A good example is how VBA, VA Agencies, GAO, VSOs, and stakeholders 
were all engaged from the beginning in the development of the Appeals 
Modernization Act (AMA). Before the implementation of the AMA, VBA and 
BVA have collaborated to develop IT infrastructure, training programs, 
and quality review. This type of systematic strategic review process 
will lessen the preventable errors noted by the VA OIG reports.
    Mr. Chairmen, this concludes my testimony on behalf of DAV. I would 
be happy to answer any questions you or other members of the 
Subcommittees may have.

                                 
                  Prepared Statement of Greg Nembhard
    Chairman Bost, Ranking Member Esty and distinguished members of the 
Subcommittee on Disability Assistance and Memorial Affairs, on behalf 
of National Commander Brett P. Reistad and the nearly two million 
members of The American Legion, we thank you for the opportunity to 
testify on the Deartment of Veterans Affairs' (VA) development and 
implementation of policy initiatives. As the largest patriotic service 
organization in the United States, with a myriad of programs supporting 
veterans, The American Legion appreciates the committee focusing on 
these critical issues that will affect veterans and their families.

Background

    The Department of Veterans Affairs Office of Inspector General 
(VAOIG) published three reports about unwarranted medical reexamination 
for disability benefits, processing inaccuracies involving veterans' 
intent to file submissions for benefits and denied Post-Traumatic 
Stress Disorder (PTSD) claims related to Military Sexual Trauma (MST), 
in July and August 2018.
    Congress approved the use of contract examiners within the Veterans 
Benefits Administration (VBA) in 1996 to expedite the scheduling of 
disability exams, so the Veterans Health Administration (VHA) can focus 
resources on treating patients. VA dramatically expanded the size and 
cost of the program since its inception. On November 15, 2018, the 
United States House of Representatives Committee on Veterans Affairs 
Disability Assistance and Memorial Affairs (DAMA) Subcommittee held a 
hearing regarding VA oversight of contract disability examinations and 
the use of contractors to provide disability examinations. The 
Government Accountability Office's (GAO) testimony before the 
Subcommittee illuminated how VBA has limited information regarding 
whether contractors who conduct disability compensation medical exams 
are meeting the VA's quality and timeliness targets. \1\ Contracted 
providers perform approximately half of VA's disability examinations, 
and their national accuracy rate does not achieve VA's prescribed 92 
percent accuracy goal. \2\ These findings raise The American Legion's 
concerns about numerous factors. Specifically, the accuracy of claims 
decisions, the adequacy of training for contractors, VA's inability to 
comply with timeliness goals, and whether or not the cost of 
contracting these services would be considered exorbitant if program 
oversight and management were factored in, bringing services up to par 
with VA standards.
---------------------------------------------------------------------------
    \1\ VA DISABILITY EXAMS Improved Oversight of Contracted Examiners 
Needed, GAO Testimony, November 2017
    \2\ U.S. Department of Veterans Affairs Annual Performance Plan and 
Report, Accuracy Goals Table
---------------------------------------------------------------------------
    The American Legion believes that our nation's heroes should not 
suffer at the hands of institutions whose existence and mission is to 
care for them. We believe in quality of care at VA facilities, remain 
committed to a strong VA, and that VA is a ``system worth saving.''

System Worth Saving

    The System Worth Saving program, created in 2003, by then-American 
Legion National Commander Ron Conley, focuses on what works best at VA 
Medical Centers (VAMC), identifies any challenges, and makes 
recommendations that help veterans. The mission of the System Worth 
Saving program is to assess the quality and timeliness of veterans' 
health care, the claims process at VA Regional Offices (VARO), and 
provide feedback from veterans about the care and services offered. We 
conduct site visits at VAMCs and Regional Offices nationwide. The 
American Legion compiles the reports from our visits into a publication 
for distribution to the President of the United States, Congress, VA 
officials, and members of The American Legion. A copy of which can be 
found at: https://www.legion.org/systemworthsaving. The compressive 
report provides an understanding of VA challenges, best practices, and 
offers recommendations based on our observations through our nearly 100 
years of experience.

Unwarranted Medical Reexaminations for Disability Benefits

    The VAOIG conducted a review to determine whether VBA employees 
required disabled veterans to report for unwarranted medical 
reexaminations. \3\ VBA employees have authority to request 
reexaminations for veterans ``whenever VA determines there is a need to 
verify either the continued existence or the current severity of a 
disability,'' and when there is no exclusion from reexamination. \4\
---------------------------------------------------------------------------
    \3\ VBA also refers to medical reexaminations as routine future 
examinations.
    \4\ 38 CFR Sec. 3.327, Reexaminations
---------------------------------------------------------------------------
    The VAOIG found that VBA did not consistently follow policy 
regarding reexamination requests. The Inspector General's office found 
that VBA required unwarranted medical examinations in 19,800 of the 
53,500 cases in the review period (37 percent). \5\ The OIG review team 
estimated that during the six-month period, VBA spent $10.1 million on 
unwarranted reexaminations - $5.3 million involving VHA clinicians, and 
$4.8 million involving VBA contractors.
---------------------------------------------------------------------------
    \5\ VA OIG 17-04966-201, Page i, July 17, 2018

---------------------------------------------------------------------------
Intent to File (ITF)

    The VAOIG sought to determine whether VBA assigned correct 
effective dates on claims for compensation benefits with an intent to 
file (ITF). VA issued guidance to require claims for benefits be filed 
on standard forms to improve the quality and timeliness of processing 
veterans' claims in March 2015. VA acknowledged that some veterans 
might need additional time to gather all of the information and 
evidence necessary in support of their claims; therefore, VA allows 
applicants to notify them of their intent to file a claim to establish 
the earliest possible effective date for benefits, if determined 
eligible.
    The VA's Acting Assistant Director for Procedures stated that the 
absence of granularity in the procedural guidance is a cause for the 
processing inaccuracies. The Assistant Director also indicated that the 
ITF process was an initiative with a six-month implementation and 
delivery period. \6\ VA's effort affected VBA's policy and procedures 
considerably. VBA asserted that six months was not enough time to 
produce sound guidance, restructure policies, procedures, and claims 
processing systems. The VA's Acting Assistant Director for Policy 
stated that VBA produced a minimally viable product, as related to 
system functionality because of time constraints. The VA published the 
proposed rule to implement ITF on October 31, 2013, and finalized it on 
September 25, 2014. VA bears responsibility for setting the time frame 
of implementation. They led the initiative and set the deadlines before 
publishing the proposed rule more than five years ago.
---------------------------------------------------------------------------
    \6\ VA OIG 17-04919-201, Page ii, August 21, 2018

---------------------------------------------------------------------------
PTSD and MST

    MST can lead to PTSD, but VA denies granting MST victims benefits 
based on a claim of PTSD because they cannot produce the required 
evidence to support the occurrence of the reported assault. Victims of 
MST have difficulty providing the necessary evidence because reporting 
the incident when it occurs is challenging. Victims of MST typically do 
not report the incident due to concerns about negative implications for 
performance reports, worries about punishment for collateral 
misconduct, and the perception of an unresponsive military chain of 
command. VBA issued guidance in 2011 to ensure consistency, fairness, 
and a ``liberal approach'' regarding acceptable types of evidence to 
support and identify stressors related to MST that can lead to PTSD. 
\7\
---------------------------------------------------------------------------
    \7\ VBA Training Letter, Adjudicating PTSD Claims Based on MST. 
(Historical)
---------------------------------------------------------------------------
    A review team assessed a sample of 169 MST-related claims denied 
during the review period, according to the VAOIG report dated August 
21, 2018. The review found that VBA did not correctly process veterans' 
denied MST-related claims in 82 of 169 cases. VAOIG estimated that VBA 
incorrectly processed approximately 1,300 of the 2,700 MST-related 
claims denied during that time (49 percent) as a result. \8\ This is 
unacceptable. Finding ways to ensure these veterans receive the 
services they deserve is one of the highest priorities of The American 
Legion.
---------------------------------------------------------------------------
    \8\ VA OIG 17-05248-241, Page ii, August 21, 2018

---------------------------------------------------------------------------
What is The American Legion Doing

    The American Legion continues to work directly with veterans to 
help them overcome challenges associated with access to VA health care 
and the claims process, and through our System Worth Saving program 
provides first-hand observations and analyses to VA and members of 
congress
    Recent VAOIG reports cited inaccuracies, timeliness issues, lack of 
specialization, inadequate training, and overall poor quality of VA 
examinations completed by contracted medical examiners. The American 
Legion seeks to protect veterans from these, and other inadequacies. A 
variety of factors cause these shortfalls, including a lack of funding, 
understaffed VA facilities, and unscrupulous contracting companies who 
solely focus on their bottom line -at the veterans' expense. The 
American Legion works closely with and urges the VA to take swift 
corrective action.

Recommendations

    VA's hiring and incentives process need greater emphasis. If VA 
needs additional resources to secure fulfillment of critical positions 
to complete tasks associated with exams, The American Legion calls on 
VA to communicate that need to Congress and urge Congress to allocate 
the necessary funding to make those critical hires. This will ensure 
veterans receive the prompt care they need within the system that is 
designed to treat the unique nature of their wounds.
    The American Legion encourages Congress to conduct oversight to 
ensure veterans receive adequate and comprehensive VA examinations. We 
also urge the secretary of VA to establish appropriate requirements for 
examiners and to enforce the use of those requirements. The American 
Legion also urges the VA secretary, through resolution, \9\ to review 
the effectiveness of the requirements for examiners, including 
contracted disability compensation medical exams, and how that 
effectiveness impacts the appropriate ratings for compensation claims. 
The American Legion understands VA is working hard to eliminate 
unnecessary reexaminations, but timeliness and functionality of 
processing systems associated with ITF must be addressed to avoid 
additional costs and inconvenience to veterans and their families.
---------------------------------------------------------------------------
    \9\ The American Legion Resolution No. 87: Establishing and 
Enforcing Requirements for Contract Examiners Conducting Medical 
Examinations for VA Compensation Purposes
---------------------------------------------------------------------------
    The American Legion continues to advocate for the improved delivery 
of timely and quality health care for women using VA, including 
specific attention to MST-related claims. The proportion of female 
servicemembers and veterans is at its highest point in history, with 
projections for continued growth. \10\ The growing numbers of female 
veterans mean that a system which primarily provided care to male 
enrollees must now evolve, and adapt, to meet the needs of both male 
and female veterans. Veterans, regardless of gender, must receive the 
best possible care from VA, and the system needs to continue to adjust 
to the changing demands of the population it serves. VA must develop a 
comprehensive health care program for female veterans that extend 
beyond reproductive issues.
---------------------------------------------------------------------------
    \10\ Department of Veterans Affairs Study of Barriers for Women 
Veterans to VA Health Care, April 2015

---------------------------------------------------------------------------
Conclusion

    Chairman Bost, Ranking Member Esty, and distinguished members of 
this veteran-centric committee, The American Legion thanks you for the 
opportunity to illuminate the positions of the nearly two million 
veteran members of this organization.
    Ensuring those who have selflessly raised their right hand in 
defense of this nation receive the benefits and care they deserve is a 
priority of The American Legion, and by the action of this committee, 
we can see that it is for you as well.
    For additional information regarding this testimony, please contact 
Ms. Lindsay Dearing, Legislative Associate in The American Legion's 
Legislative Division at (202) 861-2700 or [email protected].

                                 
                       Statements For The Record

      American Federation of Government Employees, AFL-CIO (AFGE)
    December 12, 2018

    Chairman Bost, Ranking Member Esty, and Members of the Committee:

    On behalf of the American Federation of Government Employees, AFL-
CIO (AFGE), and its National VA Council, which represents more than 
700,000 federal and D.C. Government Employees, including over 250,000 
front line employees at the Department of Veterans Affairs (VA) who 
provide vital care and services for our veterans, I write to you today 
about the hearing held by the House Committee on Veterans' Affairs, 
Subcommittee on Disability Assistance and Memorial Affairs (DAMA) on 
November 29, 2018 titled ``VA's Development and Implementation of 
Policy Initiatives.'' This includes serving as the representatives of 
staff who work throughout the Veterans Benefits Administration (VBA) 
and are on the front lines serving veterans every day. In turn, AFGE 
has several comments on how proposed policy changes by VBA will impact 
the VBA workforce and its mission to serve veterans.

The National Work Queue:

    During the hearing, members of subcommittee addressed several 
aspects of the National Work Queue (NWQ), and how in many ways it has 
hurt veterans. First and foremost, AFGE agrees with the Inspector 
General's (IG) conclusion that eliminating specialization has had a 
detrimental impact on veterans with claims, particularly those that are 
more complex and sensitive in nature. As the IG report explains, prior 
to the implementation of the NWQ:

    The Segmented Lanes model required VSRs and RVSRs on Special 
Operations teams to process all claims VBA designated as requiring 
special handling, which included [Military Sexual Trauma]-related 
claims. By implementing the NWQ, VBA no longer required Special 
Operations teams to review MST-related claims. Under the NWQ, VSRs and 
RVSRs are responsible for processing a wide variety of claims, 
including MST-related claims. However, many VSRs and RVSRs do not have 
the experience or expertise to process MST-related claims. \1\
---------------------------------------------------------------------------
    \1\ VA OIG 17-05248-241 / Page iii / August 21, 2018

    Because of the level of difficulty in processing these claims, AFGE 
would support returning these and other former ``Special Operations'' 
cases including Traumatic Brain Injury back to a specialized lane or 
lanes in Regional Offices. Much like a doctor choosing to become a 
pediatrician and not being expected to be an expert in podiatry, not 
all VSRs and RVSRs should be expected to process highly specialized 
cases.
    Furthermore, AFGE encourages the VA to modify the NWQ so that cases 
remain within the same regional office while they are being processed, 
and that VSRs and RVSRs are more clearly identified on each case file. 
This will allow for better collaboration between VSRs and RVSRs (as was 
done prior to the implementation of the NWQ) and allow the staff of 
Veteran Service Organizations to better assist their members.

Information Technology:

    AFGE also believes that the VBA can create a better environment to 
allow VBA employees to succeed by fixing Information Technology (IT) 
problems plaguing the agency. Highlighting the written testimony of 
Shane L. Liermann, Assistant National Legislative Director of the 
Disabled American Veterans (DAV), AFGE agrees with several of the 
recommendations made by DAV, including the need for VA to invest in and 
improve its IT infrastructure by fixing system automation with the 
Veterans Benefits Management System (VBMS). To quote Mr. Liermann:

    Updated and modern IT is critical to the ultimate success of VBA. 
Despite past failed attempts to modernize its claims processing systems 
over the past two decades, VBA made a critical decision to transform 
its paper-based systems and replace them with streamlined business 
processes supported by modern IT systems. However, unless VBA is 
provided sufficient resources to fully implement and program new IT 
systems at the front end, both productivity and quality will continue 
to suffer, resulting in more errors and veterans waiting longer to 
receive their earned benefits.

Furthermore:

    Over the past several years, VBA has developed and implemented new 
IT systems to support the transformations, including VBMS, the NWQ, and 
e-Benefits. Unfortunately, VBA must compete with other offices and 
agencies within VA for the limited IT funding available each year, 
delaying development and deployment of critical IT systems and 
programming. As a result, critical IT systems are rarely fully 
developed before business process changes are implemented; instead they 
are phased in over several years, forcing VBA to rely on an 
inconsistent mix of old and new IT systems, as well as an endless 
stream of suboptimal ``work around'' solutions.

    AFGE would add that these delays and ```work around' solutions'' 
make it more difficult for VBA employees to complete their duties, and 
that VBA employees suffer negative impacts on their production and 
quality ratings because of malfunctioning and uncooperative technology.

Training and Collaboration:

    AFGE would also like to reiterate the DAV's points on the need for 
improved training. Whether it is related to the ``Intent to File'' 
process for claiming benefits or special procedures for highly complex 
claims including Military Sexual Trauma, the additional training given 
to VBA employees will help them to better serve veterans and help them 
prevent facing unfair discipline for mistakes that they did not know 
how to avoid. With the misuse of the Department of Veterans Affairs 
Accountability and Whistleblower Protection Act of 2017 by VA 
management to unnecessarily terminate employees, the more training 
employees receive, the more likely they will be able to grow in their 
positions instead of constantly fearing removal.
    Lastly, as the subcommittee and the VA decide what polices to 
implement in the future, as a stakeholder AFGE expects to be consulted. 
As the front-line employees processing the claims and using the IT in 
practice, and not just in planning, AFGE strongly encourages the VA to 
consult with AFGE, the exclusive representative of employees who have 
extensive experience and expertise and actually perform these duties.
    Thank you, and I respectfully request that this letter be submitted 
for the record.

    Sincerely,

    Thomas S. Kahn
    Director, Legislative Affairs
    American Federation of Government Employees, AFL-CIO

                                 [all]