VA Disability Benefits: Routine Monitoring of Disability	 
Decisions Could Improve Consistency (20-OCT-05, GAO-06-120T).	 
                                                                 
The House Subcommittee on Disability Assistance and Memorial	 
Affairs asked GAO to discuss its work on the consistency of	 
disability compensation claims decisions of the Department of	 
Veterans Affairs (VA). GAO has reported wide state-to-state	 
variations in average compensation payments per disabled veteran,
raising questions about decisional consistency. In 2003, GAO	 
designated VA's disability programs, along with other federal	 
disability programs, as high risk, in part because of concerns	 
about decisional consistency. Illustrating this issue, GAO	 
reported that inadequate information from VA medical centers on  
joint and spine impairments contributed to inconsistent regional 
office disability decisions.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-120T					        
    ACCNO:   A39900						        
  TITLE:     VA Disability Benefits: Routine Monitoring of Disability 
Decisions Could Improve Consistency				 
     DATE:   10/20/2005 
  SUBJECT:   Claims adjudicators				 
	     Claims processing					 
	     Comparative analysis				 
	     Disability benefits				 
	     Eligibility determinations 			 
	     Performance measures				 
	     Standards evaluation				 
	     Veterans benefits					 
	     Veterans disability compensation			 
	     Decision making					 
	     VA Disability Rating Schedule			 

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GAO-06-120T

United States Government Accountability Office

GAO	Testimony Before the Subcommittee on Disability Assistance and
Memorial

Affairs, Committee on Veterans' Affairs, House of Representatives

For Release on Delivery

Expected at 10:30 a.m. EDT VA DISABILITY BENEFITS

Thursday, October 20, 2005

      Routine Monitoring of Disability Decisions Could Improve Consistency

Statement of Cynthia A. Bascetta, Director, Education, Workforce, and Income
Security Issues

GAO-06-120T

[IMG]

October 2005

VA DISABILITY BENEFITS

Routine Monitoring of Disability Decisions Could Improve Consistency

                                 What GAO Found

GAO's November 2004 report explained that adjudicators in the Department
of Veterans Affairs often must use judgment in making disability
compensation claims decisions. As a result, it is crucial for VA to have a
system for routinely identifying the effect of judgment on decisional
variations among its 57 regional offices to determine if the variations
are reasonable and, if not, how to correct them. In 2002, GAO reported
that state-to-state variations of as much as 63 percent in average
compensation payments per disabled veteran indicated potential
inconsistency. The nature of the criteria that adjudicators must apply in
evaluating the degree of impairment due to mental disorders provides an
example of the extent of judgment required.

VA's Medical Criteria for Evaluating the Degree of Impairment Due to
Mental Disorders

Degree of impairment as characterized in VA's medical criteria

                                      Disability severity rating (in percent)

                              Totally impaired 100

Deficient in most areas such as work, school, family relations, judgment,
thinking, or mood 70

                    Reduced reliability and productivity 50

Occasional decrease in work efficiency and intermittent periods of
inability to perform occupational tasks 30

Mild or transient symptoms that decrease work efficiency and ability to
perform
occupational tasks only during periods of significant stress, or symptoms
can
be controlled by continuous medication 10

Not severe enough to interfere with occupational or social functioning or
to require continuous medication 0

Source: VA's Schedule for Rating Disabilities.

GAO's October 2005 report on decisions for joint and spine disabilities
showed one important way to improve consistency. Specifically, regional
offices often rely on VA's 157 medical centers to examine claimants and
provide medical information needed to decide the claims. However, VA has
found inconsistency among its medical centers in the adequacy of their
joint and spine disability exam reports that regional offices need to
decide these claims. As of May 2005, the percentage of exam reports
containing the required information varied across the medical centers from
a low of 57 percent to a high of 92 percent. This could adversely affect
the consistency of disability claims decisions involving joint and spine
impairments. Although VA has made substantial progress, more remains to be
done to improve the level of consistency in the disability exam reports.

                 United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me to discuss our work on the consistency of
decisions that the Department of Veterans Affairs (VA) makes on veterans'
disability compensation claims. Ensuring that VA's disability decisions
are consistent across the nation is vital to ensuring the integrity of
VA's disability program. In 2002, we reported that wide variations existed
across the nation in the average compensation payments per disabled
veteran, and we recommended that VA study such indications of
inconsistency in the decision making of its 57 regional offices.1 As you
know, in January 2003, GAO designated VA's disability program, along with
other federal disability programs, as high risk, in part because of
concerns about the consistency of decision making.2

In December 2004, the media published data showing that the average
compensation payment per disabled veteran varied from a low of $6,710 in
Ohio to a high of $10,851 in New Mexico. In response, the Secretary asked
the Office of Inspector General in December 2004 to study the reasons for
the wide variations in average payments, and in May 2005, the Inspector
General reported its findings and made recommendations for improvement.3
As the Inspector General found, much needs to be done to ensure that VA
renders consistent decisions across the nation.

As you requested, my remarks today will draw upon two GAO reports. The
first, issued in November 2004, addressed VA's need for a systematic
approach to identifying consistency issues that need to be studied in
detail.4 The second report, issued on October 12, 2005, examined VA's
efforts to achieve consistency among its medical centers in the quality of
the medical information they provide to regional offices in order to make
decisions on disability claims involving impairments of joints and the

1GAO, Veterans' Benefits: Quality Assurance for Disability Claims and
Appeals Processing Can Be Further Improved, GAO-02-806 (Washington, D.C.:
Aug. 16, 2002).

2GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: January
2003).

3VA Office of Inspector General, Review of State Variances in VA
Disability Compensation Payments, Report No. 05-00765-137 (Washington,
D.C.: May 19, 2005).

4GAO, Veterans Benefits: VA Needs Plan for Assessing Consistency of
Decisions, GAO-05-99 (Washington, D.C.: Nov. 19, 2004).

spine.5 Improving the quality of the medical information for these
impairments could improve VA's decisional consistency.

In summary, as we reported in November 2004, VA's adjudicators often must
use judgment in making disability decisions. As a result, variation is an
inherent factor in the decision-making process. This makes it crucial that
VA have a system for routinely identifying variations among its 57
regional offices so that such variations can be studied to determine if
they are within the bounds of reasonableness and, if not, how to correct
the problem. Also, as we reported in October 2005, to achieve consistency,
VA must deal with issues involving not only its regional offices but also
its 157 medical centers which conduct most of the disability examinations
that regional offices rely on to provide the medical information they need
to make disability decisions. As we reported, VA has found inconsistency
among its medical centers in the extent to which they provide regional
offices with exam reports containing all the medical information needed to
ensure that regional offices make decisions awarding the appropriate level
of benefits to veterans with joint and spine impairments. Some medical
centers consistently provide high-quality exam reports, while others do
not, which means the benefits awarded to veterans with similar joint and
spine impairments could differ, depending on which medical center examined
them. Although VA has made substantial progress in correcting this
problem, more remains to be done to ensure that all medical centers
provide exam reports containing adequate information for regional offices
to make proper decisions.

Regardless of a veteran's employment status or level of earnings, VA's
disability compensation program pays monthly cash benefits to eligible
veterans who have service-connected disabilities resulting from injuries
or diseases incurred or aggravated while on active military duty. A
veteran starts the disability claims process by submitting a claim to one
of the 57 regional offices administered by the Veterans Benefits
Administration (VBA). In the average compensation claim, the veteran
claims about five disabilities for which the regional office must develop
the evidence required by law and federal regulations, such as military
records and medical evidence. To obtain the required medical evidence,
VBA's regional offices often arrange medical examinations for claimants.
For example, in

5GAO, Veterans' Disability Benefits: VA Could Enhance Its Progress in
Complying with Court Decision on Disability Criteria, GAO-06-46
(Washington, D.C.: Oct. 12, 2005).

  Background

fiscal year 2004, VBA's 57 regional offices asked the 157 medical centers
administered by the Veterans Health Administration (VHA) to examine about
500,000 claimants and provide examination reports containing the medical
information needed to decide the claim.

On the basis of the evidence developed by the regional office, an
adjudicator determines whether each disability claimed by the veteran is
connected to the veteran's military service. Then, by applying medical
criteria contained in VA's Rating Schedule, the adjudicator evaluates the
degree of disability caused by each service-connected disability in order
to determine the veteran's overall degree of service-connected disability.
The degree of disability is expressed as a percentage, in increments of 10
percentage points-for example, 10 percent, 20 percent, 30 percent, and so
on, up to 100 percent disability. The higher the percentage of disability,
the higher the benefit payment received by the veteran.

If a veteran disagrees with the regional office adjudicator's decision on
whether a disability is service-connected or on the appropriate percentage
of disability, the veteran may file a Notice of Disagreement. The regional
office then provides a further written explanation of the decision, and if
the veteran still disagrees, the veteran may appeal to VA's Board of
Veterans' Appeals. Before appealing to the board, a veteran may ask for a
review by a regional office Decision Review Officer, who is authorized to
grant the contested benefits based on the same case record that the
original adjudicator relied on to make the initial decision.

After appealing to the board, if a veteran disagrees with the board's
decision, the veteran may appeal to the U.S. Court of Appeals for Veterans
Claims, which has the authority to render decisions establishing criteria
that are binding on future decisions made by VA's regional offices as well
the board. For example, in DeLuca v. Brown, 8 Vet. App. 202 (1995), the
court held that when federal regulations define joint and spine impairment
severity in terms of limits on range of motion, VA claims adjudicators
must consider whether range of motion is further limited by factors such
as pain and fatigue during "flare-ups" or following repetitive use of the
impaired joint or spine. Previous to this decision, VA had not explicitly
considered whether such additional limitations existed because VA
contended that its Rating Schedule incorporated such considerations.

  VA Needs a System for Routinely Monitoring Variations Inherent in Deciding
  Disability Claims

Because adjudicators often must use judgment when deciding disability
compensation claims, variations in decision making are an inherent
possibility. While some claims are relatively straightforward, many
require judgment, particularly when the adjudicator must evaluate (1) the
credibility of different sources of evidence; (2) how much weight to
assign different sources of evidence; or (3) disabilities, such as mental
disorders, for which the disability standards are not entirely objective
and require the use of professional judgment. Without measuring the effect
of judgment on decisions, VA cannot provide reasonable assurance that
consistency is acceptable. At the same time, it would be unreasonable to
expect that no decision-making variations would occur.

Consider, for example, a disability claim that has two conflicting medical
opinions, one provided by a medical specialist who reviewed the claim file
but did not examine the veteran, and a second opinion provided by a
medical generalist who reviewed the file and examined the veteran. One
adjudicator could assign more weight to the specialist's opinion, while
another could assign more weight to the opinion of the generalist who
examined the veteran. Depending on which medical opinion is given more
weight, one adjudicator could grant the claim and the other could deny it.
Yet a third adjudicator might conclude that the competing evidence
provided an approximate balance between the evidence for and the evidence
against the veteran's claim, which would require that the adjudicator
apply VA's "benefit-of-the-doubt" rule and decide in favor of the veteran.

An example involving mental disorders also demonstrates how adjudicators
sometimes must make judgments about the degree of severity of a
disability. The disability criteria in VA's Rating Schedule provide a
formula for rating the severity of a veteran's occupational and social
impairment due to a variety of mental disorders. This formula is a
nonquantitative, behaviorally oriented framework for guiding adjudicators
in choosing which of the degrees of severity shown in table 1 best
describes the claimant's occupational and social impairment.

Table 1: VA's Medical Criteria for Evaluating the Degree of Occupational
and Social Impairment Due to Mental Disorders

             Degree of occupational and social impairment Disability ratingas
                          characterized in VA's medical criteria (in percent)

                              Totally impaired 100

Deficient in most areas such as work, school, family relations, judgment,
thinking, or mood

Reduced reliability and productivity

Occasional decrease in work efficiency and intermittent periods of
inability to perform occupational tasks

Mild or transient symptoms that decrease work efficiency and ability to
perform occupational tasks only during periods of significant stress, or
symptoms can be controlled by continuous medication

Not severe enough to interfere with occupational or social functioning or
to require continuous medication

Source: VA's Schedule for Rating Disabilities.

Note: The Veterans' Disability Benefits Commission is currently reviewing
the appropriateness of VA's Rating Schedule, including the criteria for
mental disorders.

Similarly, VA does not have objective criteria for rating the degree to
which certain spinal impairments limit a claimant's motion. Instead, the
adjudicator must assess the evidence and decide whether the limitation of
motion is "slight, moderate, or severe." To assess the severity of
incomplete paralysis, the adjudicator must decide whether the veteran's
paralysis is "mild, moderate, or severe." The decision on which severity
classification to assign to a claimant's condition could vary in the minds
of different adjudicators, depending on how they weigh the evidence and
how they interpret the meaning of the different severity classifications.

Despite the inherent variation, however, it is reasonable to expect the
extent of variation to be confined within a range that knowledgeable
professionals could agree is reasonable, recognizing that disability
criteria are more objective for some disabilities than for others. For
example, if two adjudicators were to review the same claim file for a
veteran who has suffered the anatomical loss of both hands, VA's
disability criteria state unequivocally that the veteran is to be given a
100 percent disability rating. Therefore, no variation would be expected.
However, if two adjudicators were to review the same claim file for a
veteran with a mental disability, knowledgeable professionals might agree
that it would not be out of the bounds of reasonableness for these
adjudicators to diverge by 30 percentage points but that wider divergences
would be outside the bounds of reasonableness.

The fact that two adjudicators might make differing, but reasonable,
judgments on the meaning of the same evidence is recognized in the design
of the system that VBA uses to assess the accuracy of disability decisions
made by regional office adjudicators. VBA instructs the staff who review
the accuracy of decisions to refrain from charging the original
adjudicator with an error merely because they would have made a different
decision than the one made by the original adjudicator. VBA instructs the
reviewers not to substitute their own judgment in place of the original
adjudicator's judgment as long as the original adjudicator's decision is
adequately supported and reasonable.

Because of the inherent possibility that different adjudicators could make
differing decisions based on the same information pertaining to a specific
impairment, we recommended in November 2004 that the Secretary of Veterans
Affairs develop a plan containing a detailed description of how VA would
(1) use data from a newly implemented administrative information
system-known as Rating Board Automation 2000-to identify indications of
decision-making inconsistencies among the regional offices for specific
impairments and (2) conduct systematic studies of the impairments for
which the data reveal possible inconsistencies among regional offices. VA
concurred with our recommendation but has not yet developed such a plan.
At this point, VA has now collected 1 full year of data using the new
administrative data system, which should be sufficient to begin
identifying variations and then assessing whether such variations are
within the bounds of reasonableness.

  Inconsistent Quality Of Disability Examination Reports Underscores Need to
  Monitor Consistency of Decisions

Because the existing medical records of disability claimants often do not
provide VBA regional offices with sufficient evidence to decide claims
properly, the regional offices often ask VHA medical centers to examine
the claimants and provide exam reports containing the medical information
needed to make a decision. Exams for joint and spine impairments are among
the exams that regional offices most frequently request.6

To comply with the DeLuca decision's requirements for joint and spine
disability exam reports, VHA instructs its medical center clinicians to
make not only an initial measurement of the range of motion in the
impaired joint or spine but also to measure range of motion after having
the claimant flex the impaired joint or spine several times. This is done
to determine the extent to which repeated motion may result in pain or
fatigue that further degrades the functioning of the impaired joint or
spine. In addition, the clinician also is instructed to determine if the
claimant experiences flare-ups from time to time, and if so, how often
such flareups occur and the extent to which they limit the functioning of
the impaired joint or spine. However, in a baseline study conducted in
2002, VA found that 61 percent of the exam reports on joint and spine
impairments did not provide sufficient information on the effects of
repetitive movement or flare-ups to comply with the DeLuca criteria.

We reported earlier this month on the progress VA had made since 2002 in
ensuring that its medical centers consistently prepare joint and spine
exam reports containing the information required by DeLuca. We found that,
as of May 2005, the percentage of joint and spine exam reports not meeting
the DeLuca criteria had declined substantially from 61 percent to 22
percent. Much of this progress appeared attributable to a performance
measure for exam report quality established by VHA in fiscal year 2004
after both VHA and VBA had taken a number of steps to build a foundation

6Because of workload issues at some VHA medical centers, 10 of VBA's 57
regional offices request most of their disability exams from a private
contractor, QTC Medical Services. These 10 regional offices are San Diego,
California; Los Angeles, California; Salt Lake City, Utah; Seattle,
Washington; Atlanta, Georgia; Winston-Salem, North Carolina; Boston,
Massachusetts; Roanoke, Virginia; Houston, Texas; and Muskogee, Oklahoma.
To assess the quality of QTC exam reports, VBA uses a review system
separate from the system for reviewing the quality of VHA medical center
exam reports. According to VBA officials responsible for reviewing QTC
exam report quality, VBA deemed about 95 percent of QTC's exam reports to
be adequate during the quarter ending October 31, 2004. However, the
method used to select the review sample does not provide statistically
reliable results for any specific type of impairment, such as joint or
spine impairments.

for improvement. This included creating the Compensation and Pension
Examination Project Office, a national office established in 2001 to
improve the disability exam process, and providing extensive training to
VHA and VBA personnel.

While VA made substantial progress in ensuring that its medical centers'
exam reports adequately address the DeLuca criteria, a 22 percent
deficiency rate indicated that many joint and spine exam reports still did
not comply with DeLuca. Moreover, in relation to the issue of consistency,
the percentage of exam reports satisfying the DeLuca criteria varied
widely across the 21 health care networks that manage VHA's 157 medical
centers-from a low of 57 percent compliance to a high of 92 percent. It
should be noted that the degree of variation is likely even greater than
indicated by these percentages because, within any given health care
network, an individual medical center's performance in meeting the DeLuca
criteria may be lower or higher than the combined average performance for
all the medical centers in that specific network. Therefore, in the
network that had 57 percent of its joint and spine exams meeting DeLuca
criteria, an individual medical center within that network may have had
less than 57 percent meeting the DeLuca criteria. Conversely, in the
network that had 92 percent of the exams meeting the DeLuca criteria, an
individual medical center within that network may have had more than 92
percent satisfying DeLuca. Unless medical centers across the nation
consistently provide the information required by DeLuca, veterans claiming
joint and spine impairments may not receive consistent disability
decisions.

Further, VA has found deficiencies in a substantial portion of the
requests that VBA's regional offices send to VHA's medical centers, asking
them to perform disability exams. For example, VA found in early 2005 that
nearly one-third of the regional office requests for spine exams contained
errors such as not identifying the pertinent medical condition or not
requesting the appropriate exam. However, VBA had not yet established a
performance measure for the quality of the exam requests that regional
offices submit to medical centers.

To help ensure continued progress in satisfying the DeLuca criteria, we
recommended that the Secretary of Veterans Affairs direct the Under
Secretary for Health to develop a strategy for improving consistency among
VHA's health care networks in meeting the DeLuca criteria. For example, if
performance in satisfying the DeLuca criteria continues to vary widely
among the networks during fiscal year 2006, VHA may want to consider
establishing a new performance measure specifically for joint

Conclusions

Contact and Acknowledgments

and spine exams or requiring that medical centers use automated templates
developed for joint and spine exams, provided an in-progress study of the
costs and benefits of the automated exam templates supports their use. We
also recommended that the Secretary direct the Under Secretary for
Benefits to develop a performance measure for the quality of exam requests
that regional offices send to medical centers.

As a national program, VA's disability compensation program must ensure
that veterans receive fair and equitable decisions on their disability
claims no matter where they live across the nation. Given the inherent
risk of variation in disability decisions, it is incumbent on VA to ensure
program integrity by having a credible system for identifying indications
of inconsistency among its regional offices and then remedying any
inconsistencies found to be unreasonable. Until assessments of consistency
become a routine part of VA's oversight of decisions made by its regional
offices, veterans may not consistently get the benefits they deserve for
disabilities connected to their military service, and taxpayers may not
trust the effectiveness and fairness of the disability compensation
program.

Mr. Chairman, this concludes my remarks. I would be happy to answer any
questions you or the members of the subcommittee may have.

For further information, please contact Cynthia A. Bascetta at (202)
5127101. Also contributing to this statement were Irene Chu and Ira
Spears.

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