Veterans' Benefits: VBA's Efforts to Implement the Veterans
Claims Assistance Act Need Further Monitoring (01-JUL-02,
GAO-02-412).
The Veterans Claims Assistance Act of 2000 was passed in response
to concerns expressed by veterans, veterans service
organizations, and Congress over a 1999 decision of the U.S.
Court of Appeals for Veterans Claims which held that the VA did
not have a duty to assist veterans in developing their claims
unless they were "well-grounded." The Veterans' Benefits
Administration (VBA) has taken a number of steps, including
issuing guidance, revising and supplementing this guidance based
on questions raised by regional offices, and reinforcing the
guidance based on the results of its accuracy reviews. Despite
these efforts, VBA has found problems with consistent regional
office compliance with the law. While taking steps to implement
the the act, VBA is also focusing on significantly increasing
production and reducing the claims inventory to manage the
slowdown in case processing. In fiscal year 2002, VBA plans to
complete 839,000 claims to reduce its inventory to 316,000
claims.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-412
ACCNO: A03574
TITLE: Veterans' Benefits: VBA's Efforts to Implement the
Veterans Claims Assistance Act Need Further Monitoring
DATE: 07/01/2002
SUBJECT: Federal legislation
Military benefits claims
Veterans benefits
Claims processing
VA Systematic Technical Accuracy Review
System
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GAO-02-412
Report to the Chairman and Ranking Member, Committee on Veterans? Affairs,
U. S. Senate
United States General Accounting Office
GAO
July 2002 VETERANS? BENEFITS
VBA?s Efforts to Implement the Veterans Claims Assistance Act Need Further
Monitoring
GAO- 02- 412
Page i GAO- 02- 412 Veterans Claims Assistance Act Letter 1
Results in Brief 2 Background 3 VBA?s Efforts To Implement the VCAA Have Not
Resulted in Full
Compliance with the Law 6 VBA Is Focusing on Increasing Production, but
Challenges Remain
in Improving Timeliness 9 Conclusions 15 Recommendation 16 Agency Comments
and Our Response 16
Appendix Comments from the Department of Veterans Affairs 18
Table
Table 1: Changes in VBA?s Workload of Rating- Related Claims, Fiscal Years
1997 - 2002 10
Figure
Figure 1: Average Days to Complete Rating- Related Claims, Fiscal Years 1999
- 2003 15
Abbreviations
BVA Board of Veterans? Appeals STAR Systematic Technical Accuracy Review VA
Department of Veterans Affairs VBA Veterans Benefits Administration VCAA
Veterans Claims Assistance Act of 2000 Contents
Page 1 GAO- 02- 412 Veterans Claims Assistance Act
July 1, 2002 The Honorable John D. Rockefeller IV Chairman The Honorable
Arlen Specter Ranking Member Committee on Veterans? Affairs United States
Senate
In November 2000, the Veterans Claims Assistance Act (VCAA) of 2000 1 was
enacted to ensure that the Department of Veterans Affairs (VA) assisted
veterans claiming VA benefits. This legislation was passed in response to
concerns expressed by veterans, veterans service organizations, and the
Congress over a July 1999 decision of the U. S. Court of Appeals for
Veterans Claims, 2 known as the Morton decision, which held that the VA did
not have a duty to assist veterans in developing their claims unless they
were ?well- grounded.? That is, enough information was provided for VA to
determine that the claim was plausible. The VCAA invalidated certain
portions of the Morton decision and obligated VA to assist veterans in the
development of their claims. According to VA?s Veterans Benefits
Administration (VBA), the VCAA has significantly increased VBA?s workload in
processing veterans? claims for VA disability compensation and pension
benefits because it decided to rework many of the 98,000 claims that had
been denied under the Morton decision, review approximately 244,000 claims
that were pending at the time the VCAA was enacted, and it added more time
to the processing of new claims received after the passage of the law.
VBA considers the VCAA?s implementation a significant factor in the recent
growth of its inventory of compensation and pension claims awaiting
decisions. From the law?s enactment to January 2002, the inventory increased
by more than three- quarters, to a peak of about 433,000 claims. Given the
number of veterans whose claims are awaiting decisions, you asked that we
evaluate VBA?s implementation of the legislation. Specifically, you asked us
to determine (1) what steps VBA has
1 Public Law 106- 475, Nov. 9, 2000. 2 Morton v. West, 12 Vet. App. 477
(1999).
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 02- 412 Veterans Claims Assistance Act
taken to implement the legislation and (2) how VBA is managing the slowdown
in case processing.
To address the questions, we reviewed VBA guidance and regulations
pertaining to the implementation of the VCAA and analyzed workload and
productivity reports to identify changes since the enactment of the VCAA. We
also interviewed agency officials to discuss their efforts to implement the
VCAA. In addition, we visited five VBA regional offices to review their
implementation of the VCAA and how the law has impacted their workload and
claims processing production. The regional offices we visited were in
Montgomery, Alabama; Oakland, California; Buffalo, New York; Winston- Salem,
North Carolina; and Roanoke, Virginia. We focused our work on VBA?s
disability compensation and pension programs, since they account for most of
the benefit claims in VA. We conducted our review from September 2001
through May 2002 in accordance with generally accepted government auditing
standards.
VBA has taken a number of steps to implement the VCAA, including issuing
guidance, revising and supplementing this guidance based on questions raised
by regional offices, and reinforcing the guidance based on the results of
its accuracy reviews. Despite these efforts, VBA has found problems with
consistent regional office compliance with the law. To VBA?s credit, shortly
after the enactment of VCAA, it issued to its regional offices its first
guidance on VCAA implementation for new and pending cases. From December
2000 to February 2001, VBA issued further guidance to clarify its original
guidance and respond to regional office questions. VBA also revised its
quality assurance system to reflect the new VCAA requirements and capture
data on their proper implementation. Despite VBA?s efforts, recent results
from its quality assurance reviews indicate a significant decrease in rating
accuracy due, in large part, to improper regional office implementation of
VCAA requirements. To correct this, VBA instructed regional office
management to certify that all claims processing employees have read and
understand VCAA guidance. However, VBA does not know the underlying reasons
why regional offices are not properly implementing the VCAA. Without
understanding the root causes of the errors, certifying that staff have read
and understand the guidance may not be enough for proper implementation.
While taking steps to implement the VCAA, VBA is also focusing on
significantly increasing production and reducing the claims inventory to
manage the slowdown in case processing. In fiscal year 2002, VBA plans to
complete about 839,000 claims to reduce its inventory to 316,000 claims.
Results in Brief
Page 3 GAO- 02- 412 Veterans Claims Assistance Act
VBA plans to eventually reduce its inventory to 250,000 claims to meet the
Secretary?s timeliness goal of processing claims in an average of 100 days
by the end of fiscal year 2003. 3 Through the first 6 months of fiscal year
2002, VBA completed about 367,000 claims, and its inventory was 412,000
claims. Although VBA has made some progress in increasing production,
meeting the fiscal year 2002 production and inventory reduction goals will
be challenging because VBA is relying on staff to increase their
productivity even more in the second half of the fiscal year. Furthermore,
as we noted in our April 2002 testimony, 4 cutting the time to process
claims roughly in half to meet the Secretary?s timeliness goal of 100 days
by the end of fiscal year 2003 depends on more than just increasing
production and reducing inventory. VBA continues to face difficult
challenges we identified in the past that can lengthen claims processing
times, such as delays in obtaining evidence.
This report contains a recommendation to the Secretary of Veterans Affairs
that he direct VBA to identify the causes of the VCAA- related errors so
that more specific corrective action can be taken if VBA continues to
experience significant quality assurance problems related to the VCAA.
In its July 1999 Morton decision, the U. S. Court of Appeals for Veterans
Claims ruled that the VA did not have a duty to assist in developing claims
unless they were ?well- grounded? as required by federal statute. Prior to
this court decision, VA policy was to assist claimants in developing a
wellgrounded claim. This practice, however, was not required by law, and VBA
regional offices varied in the amount of assistance they provided. The VCAA
(P. L. 106- 475), commonly referred to as the ?duty to assist? law, was
enacted in November 2000. This law repealed the requirement that claims be
well- grounded and it obligated VA to assist a claimant in obtaining
evidence that is necessary to establish eligibility for the benefit being
sought.
VCAA requires VBA to take specific steps to assist claimants once they have
filed a complete claim for benefits. Specifically, the VCAA requires
3 VBA measures processing time from the date the claim was received to the
date on which VBA issued a decision on the claim. 4 U. S. General Accounting
Office, Veterans? Benefits: Despite Recent Improvements, Meeting Claims
Processing Goals Will Be Challenging, GAO- 02- 645T (Washington, D. C.: Apr.
26, 2002). Background
Page 4 GAO- 02- 412 Veterans Claims Assistance Act
VBA to: (1) notify claimants of the information necessary to complete the
application; (2) indicate what information not previously provided is needed
to prove the claim, and distinguish between the portion of the information
for which the claimant will be responsible and the portion for which VA will
be responsible; (3) make reasonable efforts to assist claimants in obtaining
evidence to substantiate claimants? eligibility for benefits, including
relevant records; and (4) inform claimants when relevant records are unable
to be obtained. The VCAA also allowed for the re- adjudication of claims
denied as not well- grounded between the date of the Morton decision, July
14, 1999, and the effective date of the VCAA, November 9, 2000. The act
stated that this rework could be done at the veteran?s request or on VBA?s
initiative. VBA decided to review all such claims and perform any necessary
work, such as sending additional notifications or making new rating
decisions.
The compensation program pays monthly benefits to veterans who have service-
connected disabilities (injuries or diseases incurred or aggravated while on
active military duty). The pension program pays monthly benefits based on
financial need to wartime veterans who have low incomes and are permanently
and totally disabled for reasons not service- connected. 5 VA expects to
provide about $25 billion in compensation and pension benefits in fiscal
year 2002 to over 3 million veterans and their dependents and survivors.
Disability compensation benefits are graduated in 10 percent increments
based on the degree of disability from 0 percent to 100 percent. Eligibility
and priority for other VA benefits and services such as health care and
vocational rehabilitation are affected by these VA disability ratings. Basic
monthly payments range from $103 for 10 percent disability to $2,163 for 100
percent disability. Generally, veterans do not receive compensation for
disabilities rated at 0 percent. About 65 percent of veterans receiving
disability compensation have disabilities rated at 30 percent or lower;
about 8 percent have disabilities rated at 100 percent. The most common
impairments for veterans who began receiving compensation in fiscal year
2000 were skeletal conditions; tinnitus; auditory acuity impairment rated at
0 percent; arthritis due to trauma; scars; and post- traumatic stress
disorder.
5 Veterans who are 65 years or older do not have to be permanently and
totally disabled to become eligible for pension benefits, as long as they
meet the other requirements for income and military service.
Page 5 GAO- 02- 412 Veterans Claims Assistance Act
Veterans may submit claims to any one of VBA?s 57 regional offices. To
develop veterans? claims, veterans service representatives at the regional
offices request and obtain the necessary information to evaluate the claims.
This includes veterans? military service records; medical examinations and
treatment records from VA medical facilities; and treatment records from
private providers. Once claims are developed and
?ready to rate,? rating veterans service representatives (hereafter referred
to as rating specialists) evaluate the claimed disabilities and assign
ratings based on degree of disability. Veterans with multiple disabilities
receive a single, composite rating. For veterans claiming pension
eligibility, the regional office determines if the veteran served in a
period of war, is permanently and totally disabled for reasons not service-
connected, and meets the income thresholds for eligibility.
If a veteran disagrees with the regional office?s decision, he or she can
ask for a review of that decision or appeal to VA?s Board of Veterans?
Appeals (BVA). BVA makes the final decision on such appeals and can grant
benefits, deny benefits, or remand (return) the case to the regional office
for further development and reconsideration. After reconsidering a remanded
decision, the regional office either grants the claim or returns it to BVA
for a final VA decision. If the veteran disagrees with BVA?s decision, he or
she may appeal to the U. S. Court of Appeals for Veterans Claims. If either
the veteran or VA disagrees with the court?s decision, they may appeal to
the U. S. Court of Appeals for the Federal Circuit.
In fiscal year 1999, VBA implemented the Systematic Technical Accuracy
Review (STAR) system to measure the accuracy of its claims processing for
its rating- related work. Under the STAR system, VBA considers a claim to
have been processed accurately if the regional office determines basic
eligibility correctly, obtains all required medical and nonmedical
documentary evidence, decides service- connection correctly, gives the
correct rating to each impairment, determines the correct payment amount,
and properly notifies the veteran of the outcome of his or her claim. If a
claim has any errors in any of these areas, VBA counts the entire claim as
incorrect for accuracy rate computation purposes. For the nation as a whole,
VBA reported an accuracy rate of 81 percent for fiscal year 2001. VBA?s goal
for fiscal year 2002 is 85 percent, and its strategic goal is to achieve a
national accuracy rate of 96 percent by fiscal year 2006. Beginning with
fiscal year 2002, VBA has revised its accuracy measure to focus on whether
regional office decisions to grant or deny are correct. Prior to this
change, VA?s accuracy rate included whether the decision to grant or deny
claims were correct and also included errors stemming from procedural and
technical issues, such as failure to include all the
Page 6 GAO- 02- 412 Veterans Claims Assistance Act
documentation in the case file. This revision to VBA?s quality assurance
program for compensation claims processing is consistent with
recommendations made by the VA Secretary?s 2001 Claims Processing Task
Force. Issues related to benefit entitlement decisions would be the basis
for future revision based on clear and unmistakable error or would result in
a BVA remand if not otherwise corrected during the appeal process.
To implement the VCAA, VBA has issued guidance, obtained and responded to
regional office staff questions, conducted an informal review of cases, and
issued clarifying instructions based on the questions it received and the
results of its review. To better hold regional offices accountable for
proper implementation, VBA revised its quality assurance system to reflect
the VCAA requirements. However, recent quality reviews show that VCAA
requirements are not always being met. Though VBA does not know the
underlying reason why regional offices may not be meeting VCAA requirements,
it has attempted to correct the implementation deficiencies by requiring
regional office managers to certify that staff had read and understand VCAA
guidance.
On October 19, 2000, in anticipation of enactment of the VCAA, VBA
instructed regional offices to stop denying claims as not well- grounded
under the Morton decision. On November 17, 2000- 8 days after the VCAA?s
enactment- VBA issued its first VCAA implementation guidance and rescinded
guidance on implementing Morton. This guidance was provided pending the
revision of VA?s adjudication regulations to conform with the VCAA. 6
To clarify and supplement its initial guidance, VBA issued several other
guidance letters through February 2001. VBA supplemented this written
guidance with teleconferences and questions and answers posted on VBA?s
Intranet site. This guidance covered the development and adjudication of
claims (1) denied as not well- grounded under Morton,
(2) pending when the VCAA was enacted, and (3) received after the law was
enacted. The guidance also covered the handling of appealed claims.
6 VA published its proposed regulations on April 4, 2001, and its final
regulations on August 29, 2001. VBA?s Efforts To
Implement the VCAA Have Not Resulted in Full Compliance with the Law
Page 7 GAO- 02- 412 Veterans Claims Assistance Act
In February 2001, VBA issued guidance for the review of about 98,000 claims
that regional offices had previously denied as not well- grounded under
Morton. VBA required regional offices to complete reviews of these claims by
October 1, 2001; it later extended this deadline to December 31, 2001. Where
a new decision was required, 7 regional offices were to follow the VCAA
guidance on notifications to veterans and claims development. This included
sending ?duty to assist? letters to veterans requesting any additional
evidence the veterans may have to substantiate their claims; developing any
previously or newly identified evidence; obtaining medical examinations, if
appropriate; and making a new rating decision. If the veteran did not
respond to the regional office?s request for information within 60 days, VBA
could deny the claim again for lack of evidence. As of the end of March
2002, VBA has completed about 81 percent of its reviews.
The areas in which VBA clarified and supplemented its initial guidance
included: (1) requesting VHA medical examinations and medical opinions; (2)
pursuing records from federal agencies and private providers; and (3)
notifying veterans, including requests for evidence, and notifications that
VBA was unable to obtain identified evidence. For example, in response to
staff questions about the criteria for scheduling medical exams and
requesting medical opinions, VBA advised that medical exams should be
scheduled unless it is absolutely clear that no relation exists between the
veteran?s current disability and military service. Also, in response to
staff questions on what to do if federal and private provider records are
unavailable, VBA advised that regional offices needed positive confirmation
that federal records do not exist. Regional offices also asked if they
needed to develop all claims denied under Morton as not wellgrounded or
simply re- rate the claims without performing additional development. VBA
responded that for all such claims that required readjudication, VBA must
develop the claim in accordance with the VCAA?s requirements. Furthermore,
VBA provided templates for VCAA development letters.
Veterans Service Organization (VSO) officials we spoke with at the regional
offices we visited expressed concerns about the clarity and necessity of
VCAA pre- decision notification letters. 8 They said that some
7 A new decision was not required if VBA had already readjudicated the
claim, and the claim was (a) granted or (b) denied on the merits after being
fully developed. 8 The pre- decision notice (also known as a development
letter) is a notification sent to the claimant requesting any information,
not previously provided that is necessary to substantiate the claim.
Page 8 GAO- 02- 412 Veterans Claims Assistance Act
veterans did not understand why they were receiving the letters-
particularly if they had already responded to previous VBA letters
requesting evidence. Also, the officials said that the letters were not
always clear and were often not tailored to the circumstances of individual
veterans? claims. We reported in April 2002 9 that 43 percent of our sample
of development letters did not clearly explain the actions that claimants
were to take to support their claims. We recommended that VBA eliminate
deficiencies in its development letter to clarify the actions that the
claimant should take to substantiate a claim. In response to our
recommendations, VBA agreed to revise its development letter.
In an effort to assess the impact of VCAA on the outcome of claims and to
assess regional office compliance with VCAA, VBA conducted an informal
review in the summer and fall of 2001 of claims that had been denied as not
well- grounded under Morton. VBA found that its VCAA implementation
instructions had not been followed in some of the cases it sampled. In
particular, the letters notifying the veteran of necessary evidence were not
being sent in about 20 percent of the cases. As a result of this study, VBA
issued instructions in August 2001 that emphasized the need to follow the
previous written guidance, particularly the need to fully and completely
develop claims. This included providing notice to the veteran of any
additional evidence needed, pursuing records from federal agencies and
private providers, and obtaining medical examinations when needed to make a
decision on the claim. VBA noted that failure to take these actions would
cause STAR reviewers to find the claim to be in error and could serve as a
basis for BVA to remand the claim, if appealed.
To ensure accountability by regional offices and their claims processing
staffs for VCAA compliance, VBA has incorporated the requirements into its
STAR quality assurance review checklists. 10 These revised checklists- which
began to be used to review claims decisions made in October 2001- include
two specific VCAA- related questions: (1) Was VCAA predecision notice
provided and adequate? and (2) Does the record show
9 U. S. General Accounting Office, Veterans Benefits Administration: Clarity
of Letters to Claimants Needs to Be Improved, GAO- 02- 395 (Washington, D.
C.: Apr. 23, 2002). 10 Under STAR, regional offices submit samples of claims
each month to be reviewed. Decisions are reviewed for accuracy and
conformance with VBA?s standards. Feedback is provided to the regional
offices. VBA has two STAR checklists: one for rating decisions and one for
?authorization? decisions, which do not require ratings.
Page 9 GAO- 02- 412 Veterans Claims Assistance Act
VCAA compliant development to obtain all indicated evidence (including a VA
exam, if required) prior to deciding the claim?
Early fiscal year 2002 data show that benefit entitlement errors are still
occurring because of VCAA implementation errors. Of the STAR sample of 830
rating- related decisions made from October 2001 through January 2002, the
overall accuracy rate- under VBA?s new standard, which focuses on the
accuracy of the decision on entitlement to benefits 11 -was 71 percent. VBA
found that about half (142 of 288) of the entitlement decision errors
involved noncompliance with VBA?s guidance on the VCAA. 12 Of these errors,
60 involved a pre- decision notice that was not adequate or not provided at
all and 82 showed that not all indicated evidence was obtained as required.
VBA considered the error rate for VCAA compliance to be significant enough
that in April 2002 it asked regional offices to ?retrain? staff on the VCAA
guidance and certify that the staff have read and understand the guidance,
by the end of April 2002. As of May 7, 2002, 56 of the 57 offices had
certified that their staff had read and understand the guidance. Although
ensuring that staff have read and understand the guidance is a positive
step, this may not be enough. VBA had already issued a series of
implementing guidance letters to answer staff questions and to reinforce
guidance prior to the STAR review. However, the STAR review showed that
regional offices continued to experience problems with implementation. VBA
has not determined the reasons why the regional offices are not properly
implementing the VCAA.
VBA is managing the slowdown in case processing by attempting to
significantly increase regional offices? rating decision production. VCAA
contributed to the slowdown in claims processing because VBA reworked many
claims based on the VCAA?s new requirements and because new claims must also
be processed under these more time- consuming requirements. VBA has set
production and inventory goals for fiscal year 2002, which it believes will
put it on track to reducing the average time to process claims to 100 days
by the end of fiscal year 2003. Although VBA has made some progress in
increasing production, it faces challenges in
11 The two VCAA questions in the rating checklist are included in the
criteria for determining entitlement accuracy. 12 A decision may have more
than one error on the STAR checklist. VBA Is Focusing on
Increasing Production, but Challenges Remain in Improving Timeliness
Page 10 GAO- 02- 412 Veterans Claims Assistance Act
meeting these production and inventory goals. Monthly production will need
to significantly increase in the second half of the fiscal year if VBA is to
meet its goal for the year. Even if VBA achieves its production and
inventory goals, it still faces additional challenges to achieving its end
of fiscal year 2003 goal of processing claims in an average of 100 days.
VBA attributes a significant part of the increase in pending claims
inventory in fiscal year 2001, and the associated increase in claims
processing times, to the VCAA?s impact. According to VBA, the VCAA added to
the inventory because of the need to rework many claims. VBA also believes
that VCAA will lengthen the processing time of new claims, but could not
quantify the extent. Several other factors, such as the addition of diabetes
as a presumptive service- connected disability for veterans who served in
Vietnam, the implementation of VBA?s new claims processing software, and the
hiring and training of a large number of staff, also impacted VBA?s workload
and production in fiscal year 2001.
Table 1: Changes in VBA?s Workload of Rating- Related Claims, Fiscal Years
1997- 2002
Rating- related compensation and pension claims Fiscal year Received
Completed End of year
inventory
1997 740,052 701,717 213,193 1998 691,461 663,400 241,254 1999 639,070
630,145 250,179 2000 578,773 601,451 227,501 2001 674,219 481,117 420,603
2002 first half 358,895 367,476 412,022 2002 goal 734,087 838,874 315,586
Source: Veterans Benefits Administration.
As shown in table 1, VBA received about 95, 000 more claims and produced
about 120,000 fewer claims decisions in fiscal year 2001 than in the prior
fiscal year.
The VCAA contributed to VBA receiving more claims in fiscal year 2001 than
the prior fiscal year. The VCAA required VA, if requested by a veteran, to
readjudicate claims that were denied as not well- grounded under the
Morton decision. It also allowed VA to readjudicate these claims on its own
initiative. VBA undertook a review of about 98,000 veterans? disability
claims that it had identified as previously denied as not well grounded. In
VBA Attributes the
Slowdown in Claims Processing in Part to VCAA
Page 11 GAO- 02- 412 Veterans Claims Assistance Act
addition, VBA had an inventory of about 244,000 rating- related claims
pending when the VCAA was enacted in November 2000. VBA decided to review
these claims to ensure that VCAA requirements were met. VBA had completed
about 64, 000 of these claims as of April 29, 2002. 13 In addition to the
VCAA, VBA has cited other factors as contributing to the increase in its
claims inventory. For example, the recent addition of diabetes as a
presumptive service- connected disability for veterans who served in Vietnam
has caused an influx of new disability claims. By the end of fiscal year
2003, VBA expects to have received 197,500 diabetes claims. The addition of
new claims processing staff during fiscal year 2001 has also temporarily
hampered the productivity of experienced staff. According to officials at
some of the regional offices we visited, experienced rating specialists had
less time to spend on rating work because they were helping train and mentor
new rating specialists. The learning curve and implementation difficulties
with VBA?s new automated rating preparation system (Rating Board Automation
2000) also hampered regional offices? productivity. 14
Furthermore, the VCAA has significantly impacted VBA?s work processes.
According to VA officials, the most significant change is the requirement to
fully develop claims even in the absence of evidence showing a current
disability or a link to military service. Under Morton, if a veteran could
not provide enough information to show that the claim was plausible, VBA
could deny the claim as not well- grounded. These claims must now be
developed and evaluated under the expanded procedures required by the VCAA.
For example, officials at one regional office we visited noted that they are
requesting more medical examinations than they did before the VCAA was
enacted. Also, time can be added in waiting for evidence. For example, VBA
must make repeated efforts to obtain evidence from federal agencies-
stopping only when the agency certifies that the record does not exist, or
VBA determines that further efforts to obtain the evidence would be futile.
13 VCAA also impacted VBA?s appeals workload. For example, prior to
enactment of VCAA about 30 percent of appealed regional office decisions
were remanded (returned) back for additional work by the Board of Veterans?
Appeals. According to VBA, the VCAA led to an increase in the remand rate to
about 50 percent during fiscal year 2001.
14 Rating Board Automation 2000 is a system designed to assist rating
specialists in preparing rating decisions on claims.
Page 12 GAO- 02- 412 Veterans Claims Assistance Act
VBA is addressing its claims processing slowdown by taking steps to increase
production and reduce its claims inventory. VBA believes that it will be
able to reduce its inventory to a level that will enable it to process cases
in an average of 100 days by the end of fiscal year 2003. Specifically, VBA
has established an end of fiscal year 2002 inventory goal of about 316,000
claims. To meet this goal, VBA plans to complete about 839,000 rating-
related claims during the fiscal year. The regional offices are expected to
complete about 792, 000 of these claims. This level of production is greater
than VBA has achieved in any of the last 5 fiscal years- as shown in table
1, VBA?s peak production was about 702,000 claims in fiscal year 1997.
However, VBA has significantly more rating staff now than it did in any of
the previous 5 fiscal years. VBA?s rating staff has increased by about 50
percent since fiscal year 1997 to 1,753. To reach VBA?s fiscal year 2002
production goal, rating specialists will need to complete an average of
about 2. 5 cases per day- a level VBA achieved in fiscal year 1999. VBA
expects this production level to enable it to achieve its end- of- year
inventory goal of about 316,000 rating- related claims, which VBA believes
would put the agency on track to meet the Secretary?s inventory goal of
250,000 cases by the end of fiscal year 2003.
To meet its production goal, in December 2001, VBA allocated its fiscal year
2002 national production target to its regional offices 15 based on each
regional office?s capacity to produce rating- related claims given each
office?s number of rating staff and their experience levels. 16 For example,
an office with 5 percent of the national production capacity received 5
percent of the national production target. In February 2002, VBA revised how
it allocated the monthly production targets to its regional offices based on
input from regional offices regarding their current staffing levels. In
allocating the target, VBA considered each regional office?s fiscal year
2001 claims receipt levels, production capacity, and actual production in
the first quarter of fiscal year 2002.
15 VBA had initially established production targets in March 2001 for April
through December 2001. The target was to complete 52, 000 rating- related
claims per month that would allow VBA to reduce its inventory by 1 percent
per month.
16 In determining regional office production capacity, VBA officials told us
that they considered the various experience levels of regional office rating
specialists. For example, rating specialists with 6 months to 1 year of
experience are expected to rate half as many claims as rating specialists
with more than 2 years of experience. A rating specialist with 1 to 2 years
of experience would be expected to rate three- quarters as many claims as a
rating specialist with over 2 years? experience. VBA Is Focusing on
Increasing Production to Address Its VCAA- Related Slowdown
Page 13 GAO- 02- 412 Veterans Claims Assistance Act
In March 2001, VBA allowed regional offices to suspend or alter several VBA
initiatives in order to increase production. Offices were allowed to revert
back to an early version of VBA?s Rating Board Automation (RBA) software for
ratings where the new software (RBA 2000) was significantly impeding
productivity. In an effort to increase rating decision output while VBA
continued its training of new rating specialists, offices were directed to
have their decision review officers- who handle veterans? appeals of
regional office decisions- spend half their time rating claims. Also,
offices were given latitude to vary from VBA?s case management principles,
under which claims processing teams handle most types of claims, and realign
staff to perform specialized processing of certain types of claims.
To hold regional office managers accountable, VBA incorporated specific
regional office production goals into regional office performance standards.
For fiscal year 2002, regional office directors are expected to meet their
annual production target or their monthly targets in 9 out of 12 months.
Generally, the combined monthly targets for the regional offices increase as
the year progresses and as the many new rating specialists hired in previous
years gain experience and become fully proficient claims processors.
At the same time as it is expecting regional offices to complete more
claims, VBA has implemented two initiatives to expedite claim decisions and
supplement regional office capacity. In October 2001, VBA established the
Tiger Team at its Cleveland Regional Office to expedite decisions on claims
by veterans aged 70 and older and clear from the inventory claims that have
been pending for over a year. The Tiger Team relies on 17 experienced rating
specialists, complemented by a staff of veterans service representatives.
The Tiger Team also relies on expedited access to evidence needed to
complete claims development. For example, VA and the National Archives and
Records Administration completed a Memorandum of Understanding in October
2001 to expedite Tiger Team requests for service records at the National
Personnel Records Center (NPRC) in St. Louis, Missouri. Also, VBA and the
Veterans Health Administration (VHA) established procedures and timeframes
for expediting Tiger Team requests for medical evidence and examinations.
As of the end of May 2002, the Tiger Team had completed about 10,000 claims
requested from 49 regional offices. From December 2001 through May 2002, the
team?s production exceeded its goal of 1,328 decisions per month. According
to Tiger Team officials, its experienced rating specialists were averaging
about 4 completed ratings per day. Officials added that in the short term,
completing old claims might increase VBA?s
Page 14 GAO- 02- 412 Veterans Claims Assistance Act
average time to complete decisions. VBA also established nine Resource
Centers 17 to supplement regional offices? rating capacity. The Resource
Centers receive claims from nearby regional offices that are ?ready to
rate,? but which are awaiting decisions. From October 2001 through May 2002,
the Resource Centers had completed about 22,000 ratings. The Tiger Team and
Resource Centers are expected to complete 47,000 claim decisions in fiscal
year 2002; as of the end of May 2002, they had completed about 32, 000
decisions.
VBA?s ability to achieve this increase in production, and reduction in
inventory, depends on (1) increasing productivity of new claims processing
staff over the second half of fiscal year 2002 and (2) receipts being
consistent with projected levels. VBA?s monthly goals for fiscal year 2002
assume that its large number of new rating specialists will become more
productive, with additional experience and training, as the fiscal year
progresses. However, VBA lacks historical data on the productivity of staff
by experience level. Meanwhile, receipts of new claims must not exceed VBA?s
projections. VBA received about 359,000 rating- related claims-- about 3,000
fewer than projected-- in the first half of fiscal year 2002. However, an
unexpected surge in receipts could mean that, even if VBA achieved its
production goal for the fiscal year, it might not meet its inventory goal.
External factors beyond VBA?s control, such as the decisions made by the U.
S. Court of Appeals for Veterans Claims, could affect VBA?s workload and its
ability to make sustained improvements in performance.
As stated in our April 2002 testimony, even if VBA meets its production and
inventory goals, it still faces challenges in meeting its 100- day goal.
Improving timeliness depends on more than increasing production and reducing
inventory. VBA continues to face some of the same challenges that we
identified in the past that can lengthen claims processing times. For
example, VBA needs to continue to make progress in reducing delays in
obtaining evidence, ensuring that it will have enough well- trained staff in
the long term, and implementing information systems to help improve claims
processing productivity.
17 The Resource Centers are located at the regional offices in San Diego,
California; St. Petersburg, Florida; Togus, Maine; St. Louis, Missouri;
Muskogee, Oklahoma; Philadelphia, Pennsylvania; Columbia, South Carolina;
Seattle, Washington; and Huntington, West Virginia.
Page 15 GAO- 02- 412 Veterans Claims Assistance Act
Figure 1 shows that VBA will need to cut average processing time from 224
days to 100 days by the end of fiscal year 2003. This is less than half its
fiscal year 2002 goal and 65 days less than its fiscal year 2003 goal. VBA
officials noted that the link between increasing production and improving
timeliness is not clear. Thus, the officials could not show how meeting
VBA?s production and inventory goals would result in a specific level of
timeliness improvement. Given this uncertainty, it is possible that VBA
could meet its fiscal years 2002 and 2003 production and inventory goals but
not meet the 100- day goal.
Figure 1: Average Days to Complete Rating- Related Claims, Fiscal Years 1999
2003
Source: Veterans Benefits Administration data.
To its credit, VBA has taken a number of steps over the last year and a half
to provide guidance to its regional offices on the proper application of the
VCAA requirements for both new and pending veterans? claims. However,
despite VBA?s efforts, results from VBA?s quality assurance reviews
Conclusions
Average days 0 25
50 75
100 125
150 175
200 225
Fiscal year 1999 2000 2001 2002
First half 2002 2003 2003 Last
quarter 166 173 181
224 208
165 100
Goals Actual
Page 16 GAO- 02- 412 Veterans Claims Assistance Act
indicate a decrease in rating accuracy due to regional office noncompliance
with VCAA requirements. In an effort to improve rating accuracy, VBA
recently instructed regional office management to ensure that all claims
processing employees read and understand VCCA- related guidance. But, VBA
may need to do more than verify that claims processors have read and
understood the VBA guidance. In the past, we have noted that VBA needs
better analysis of case- specific data to identify the root causes of claims
processing problems and target corrective actions. If VCAA- related accuracy
problems continue, VBA will need to determine the underlying causes for the
improper implementation as part of its continuing efforts to monitor proper
implementation of the VCAA. Without proper implementation of VCAA, some
veterans may not receive the benefits to which they are entitled by law.
If VBA continues to experience significant problems with implementing the
VCAA, we recommend that the Secretary of Veterans Affairs, direct the Under
Secretary for Benefits to identify the causes of the VCAA- related errors so
that more specific corrective actions can be taken.
We received written comments on a draft of this report from VA (see app. I).
In its comments, VA concurred with our recommendation that if VBA continues
to experience problems with implementing the VCAA, VBA identify the causes
of the VCAA- related errors so that more specific corrective actions can be
taken.
We will send copies of this report to the Secretary of the Department of
Veterans Affairs, appropriate congressional committees, and other interested
parties. We will also make copies available to others on request. In
addition, the report will be available at no charge on the GAO Web site at
http:// www. gao. gov.
If you or your staff have any questions regarding this report, please call
me at (202) 512- 7101 or Irene Chu, Assistant Director, at (202) 512- 7102.
In Recommendation
Agency Comments and Our Response
Page 17 GAO- 02- 412 Veterans Claims Assistance Act
addition to those named previously, Steve Morris, Corinna Nicolaou, Martin
Scire, and Greg Whitney made key contributions to this report.
Cynthia A. Bascetta, Director Education, Workforce, and
Income Security Issues
Appendix: Comments from the Department of Veterans Affairs
Page 18 GAO- 02- 412 Veterans Claims Assistance Act
Appendix: Comments from the Department of Veterans Affairs
(130080)
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