Veterans' Benefits: Improved Operational Controls and Management 
Data Would Enhance VBA's Disability Reevaluation Process	 
(06-DEC-07, GAO-08-75). 					 
                                                                 
To help ensure that veterans are properly compensated for	 
disabilities, VA is required to perform disability reevaluations 
for specific disabilities. VA also performs reevaluations	 
whenever it determines there is a need to verify either the	 
continued existence or current severity of veterans'		 
disabilities. VBA completed about 17,700 reevaluations in fiscal 
year 2005. GAO was asked to review the Veterans Benefits	 
Administration's (VBA) disability reevaluation program. This	 
report assesses (1) the operational controls VA uses to ensure	 
the effectiveness of the disability reevaluation process and (2) 
the management information VA collects and uses to manage the	 
disability reevaluation process. To conduct this study, GAO	 
analyzed VBA data, reviewed federal regulations and VBA 	 
procedures, conducted site visits, and interviewed VBA officials.
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-75						        
    ACCNO:   A78668						        
  TITLE:     Veterans' Benefits: Improved Operational Controls and    
Management Data Would Enhance VBA's Disability Reevaluation	 
Process 							 
     DATE:   12/06/2007 
  SUBJECT:   Data collection					 
	     Data integrity					 
	     Disability benefits				 
	     Internal controls					 
	     Program evaluation 				 
	     Program management 				 
	     Veterans						 
	     Veterans benefits					 
	     Veterans disability compensation			 
	     Policies and procedures				 
	     VA Benefits Delivery Network System		 
	     Veterans Service Network				 

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GAO-08-75

   

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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

December 2007: 

Veterans' Benefits: 

Improved Operational Controls and Management Data Would Enhance VBA's 
Disability Reevaluation Process: 

GAO-08-75: 

GAO Highlights: 

Highlights of GAO-08-75, a report to congressional requesters. 

Why GAO Did This Study: 

To help ensure that veterans are properly compensated for disabilities, 
VA is required to perform disability reevaluations for specific 
disabilities. VA also performs reevaluations whenever it determines 
there is a need to verify either the continued existence or current 
severity of veteransâ disabilities. VBA completed about 17,700 
reevaluations in fiscal year 2005. GAO was asked to review the Veterans 
Benefits Administrationâs (VBA) disability reevaluation program. This 
report assesses (1) the operational controls VA uses to ensure the 
effectiveness of the disability reevaluation process and (2) the 
management information VA collects and uses to manage the disability 
reevaluation process. To conduct this study, GAO analyzed VBA data, 
reviewed federal regulations and VBA procedures, conducted site visits, 
and interviewed VBA officials. 

What GAO Found: 

VBAâs operational controls do not adequately ensure that staff schedule 
or conduct disability reevaluations as necessary; however, VBA is 
planning to improve some of the controls. VBA claims processing 
software does not automatically establish or prompt regional office 
staff to schedule a time â known as a diary date â to determine whether 
a disability reevaluation should proceed. Consequently, some cases that 
require a reevaluation may never receive it. After the diary date 
matures, staff perform a preliminary review of a veteranâs claim file 
to determine if a more comprehensive reevaluation should be conducted. 
If staff determine during this review that a reevaluation is no longer 
needed, the reevaluation is canceled. However, cancellations are not 
tracked or subject to quality assurance reviews to ensure adherence to 
program policies and procedures. VBA plans on improving some of its 
control mechanisms through its new claims management system, the 
Veterans Service Network (VETSNET), including developing the ability to 
track cancellations. However, VBA has no plans to include a prompt for 
scheduling reevaluation diary dates in VETSNET. 

VBA cannot effectively manage the disability reevaluation process 
because some of the data it collects are inconsistent and it does not 
systematically collect and analyze key management data. While VBA 
collects data on the amount of time regional offices take to conduct 
disability reevaluations, these data are not consistent because 
regional offices use different starting points for measuring 
timeliness. Also, VBA does not know the types of disabilities being 
reevaluated, the length of time before reevaluations are conducted, or 
the results of the reevaluations. As a result, VBA cannot ensure that 
it is effectively and appropriately using its resources. 

VBA Reevaluation Process with an Added Data Driven Feedback Component: 

[See PDF for image] 

This figure is a graphic illustration of the VBA Reevaluation Process 
with an Added Data Driven Feedback Component. The illustration depicts 
the following data: 

Schedule a disability reevaluation diary date at time disability 
compensation claim decided; Disability Reevaluation: 
* Diary date matures; 
* Regional office notified; 
* RVSRs preliminary assessment; 
* Cancel reevaluation or Conduct reevaluation; Increase, decrease, or 
retain disability rating level. 

Data-driven feedback component: 
Beginning at the 'Increase, decrease, or retain disability rating 
level' step listed above: 
* Collect data on disability reevaluations, including results and 
timing of reevaluations; 
* Analyze data to aid decisions on selection and scheduling of 
disability reevaluations; 
* Develop guidance to improve decisions based on data analysis; 
* continue on to 'Schedule a disability reevaluation diary date at time 
disability compensation claim decided' step listed above. 

What GAO Recommends: 

GAO recommends that VA modify its electronic diary date system to 
ensure that the appropriate reevaluations are scheduled to occur; 
develop additional methods to ensure accuracy of completed and canceled 
reevaluations; clarify its guidance so that all regional offices use 
the same criteria for measuring the timeliness of reevaluations; and 
develop a plan to collect and analyze data on the results of 
reevaluations. VA concurred with our recommendations. 

[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-75]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Daniel Bertoni at (202) 
512-7215 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

VBA's Operational Controls Do Not Ensure That Disability Reevaluations 
Occur, but VBA Is Planning to Update Some of Its Processes and 
Procedures: 

VBA Lacks Adequate Program Information to Effectively Manage the 
Disability Reevaluation Process: 

Conclusions: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Veterans Affairs: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Figures: 

Figure 1: Summary of VBA's Disability Reevaluation Process: 

Figure 2: VBA Disability Reevaluation Process with an Added Data Driven 
Feedback Component: 

Abbreviations: 

BDN: Benefits Delivery Network: 

RVSR: Rating Veterans Service Representative: 

STAR: Systematic Technical Accuracy Review: 

VA: Department of Veterans Affairs: 

VBA: Veterans Benefits Administration: 

VETSNET: Veterans Service Network: 

[End of section] 

United States Government Accountability Office: Washington, DC 20548: 

December 6, 2007: 

The Honorable Richard Burr: 
Ranking Member: 
Committee on Veterans' Affairs: 
United States Senate: 

The Honorable Larry E. Craig: 
United States Senate: 

In fiscal year 2006, the Department of Veterans Affairs (VA) paid about 
$26.5 billion in cash benefits to approximately 2.7 million veterans to 
compensate them for disabling medical conditions connected to injuries 
or illnesses incurred or aggravated during active military service. To 
help ensure that veterans are properly compensated for these service- 
connected disabilities, VA is required to perform disability 
reevaluations for specific disabilities. VA also performs disability 
reevaluations whenever it determines there is a need to verify either 
the continued existence or current severity of veterans' disabilities. 
In fiscal year 2005 the Veterans Benefits Administration (VBA) 
completed about 17,700 disability reevaluations. During this same time 
period, VBA completed about 629,000 disability compensation claims. 

At your request, we reviewed VBA's disability reevaluation program. 
Specifically, we assessed (1) the operational controls VA uses to 
ensure the effectiveness of the disability reevaluation process and (2) 
the management information VA collects and uses to manage the 
disability reevaluation process. To develop the information for this 
report, we analyzed VBA workload and timeliness data and reviewed 
federal regulations on disability reevaluations, VBA's written guidance 
and training materials on reevaluations, and VBA's procedures for 
conducting reevaluations. We discussed the procedures for ensuring that 
reevaluations are conducted and the information used to manage the 
reevaluation program with headquarters and regional office officials 
and observed control procedures at 5 of VA's 57 regional offices. We 
selected these five offices based on the number of reevaluations they 
completed, the time it took to complete reevaluations, and geographic 
dispersion. For more details on our scope and methodology, see appendix 
I. We conducted our review from October 2006 through October 2007 in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

VBA's operational controls do not adequately ensure that the 
administration is conducting reevaluations of veterans with 
disabilities that are likely to change in the future; however, VA is 
planning to improve some of the controls. VBA claims processing 
software does not automatically establish or prompt regional office 
staff to schedule a time--known as a diary date--to determine whether a 
disability reevaluation should be conducted. To the extent that staff 
do not enter a diary date, some cases that need reevaluations may never 
be brought to the attention of claims processing staff. In fact, the VA 
Office of Inspector General has found instances where this has 
occurred. After a regional office is notified of a maturing diary date, 
staff perform a preliminary assessment of the veteran's claim file to 
determine if a more comprehensive reevaluation should be conducted. 
According to VBA guidance, if staff determine during this assessment 
that a reevaluation is no longer needed, the reevaluation is canceled. 
For example, a reevaluation may be canceled if a veteran reopens their 
claim because the disability has worsened. However, the number of 
cancellations and their associated reasons are not tracked or subject 
to quality assurance reviews. As a result, VBA does not know if 
reevaluations are being canceled appropriately. Also, completed 
reevaluations--which represent a small proportion of regional offices' 
total disability compensation claims workload--are not likely to be 
selected for quality assurance review due to VBA's methodology for 
selecting cases. VBA plans on improving some of its control mechanisms 
through its new claims management system, the Veterans Service Network 
(VETSNET), including developing the ability to track cancellations. 
However, VBA has no plans to include in VETSNET prompts for scheduling 
disability reevaluations. VBA expects to complete the rollout of 
VETSNET for disability compensation claims in May 2008. 

VBA cannot effectively manage the disability reevaluation process 
because some of the management data it collects are inconsistent and it 
does not systematically collect and analyze other key management data. 
While VBA does collect data on the amount of time regional offices take 
to conduct disability reevaluations, regional offices use different 
starting points for measuring timeliness. As a result, the amount of 
time to complete a disability reevaluation may be undercounted for some 
offices and overcounted for others. VBA also does not know the types of 
disabilities being reevaluated, the length of time before reevaluations 
are conducted, or if the reevaluation decisions result in an increase, 
decrease, or no change in VBA's assessment of the severity of the 
veteran's disability. Without such key management data, VBA cannot 
ensure that it is effectively using its resources to reevaluate those 
veterans with disabilities where reevaluation is mandated or whose 
disabilities are likely to change, and that it is reevaluating those 
disabilities at the appropriate point in time. 

We are recommending that VBA (1) modify its electronic claims 
processing system so that a rating decision cannot be completed without 
staff completing the diary date field, (2) modify its electronic claims 
processing system to ensure that a diary date is automatically 
generated by the system for all disabilities where a reevaluation is 
required by VA's Schedule for Rating Disabilities, (3) include canceled 
reevaluations in its quality assurance reviews and evaluate the 
feasibility of periodically sampling a larger number of completed 
disability reevaluations for quality assurance, (4) clarify its 
guidance so that all regional offices use the date they are notified of 
a matured diary date as the starting point for measuring timeliness, 
and (5) collect and analyze data on the results of disability 
reevaluations in order to refine guidance on the selection and timing 
of future disability reevaluations. In its comments on a draft of this 
report, VA generally agreed with our conclusions and concurred with our 
recommendations. 

Background: 

Through its disability compensation program, VBA pays monthly benefits 
to veterans for injuries or diseases incurred or aggravated while on 
active military duty. VBA rates such disabilities by using its Schedule 
for Rating Disabilities.[Footnote 1] For each type of disability, the 
Schedule assigns a percentage rating that is intended to represent the 
average earning reduction a veteran with that condition would 
experience in civilian occupations. Veterans are assigned a single or 
combined (in cases of multiple disabilities) rating ranging from 0 to 
100 percent, in increments of 10 percent. Basic monthly payments range 
from $115 for a 10 percent disability to $2,471 for a 100 percent 
disability. About 58 percent of veterans receiving disability 
compensation have disabilities rated at 30 percent and lower; about 9 
percent have disabilities rated at 100 percent. The most common 
impairments for veterans who began receiving compensation in fiscal 
year 2005 were, in order, hearing impairments, diabetes, post-traumatic 
stress disorder, back-related injuries, and other musculoskeletal 
conditions.[Footnote 2] 

VA performs disability reevaluations for disabilities required by 
regulation and whenever it determines that it is likely that a 
disability has improved, or if evidence indicates there has been a 
material change in a disability or that the current rating may be 
incorrect. Federal regulations generally instruct VA to conduct 
reevaluations between 2 and 5 years after any initial or subsequent VA 
examination, except for disabilities where another time period is 
specifically mentioned in the regulations. The latter generally require 
a reexamination 6 or 12 months after the discontinuance of treatment or 
hospitalization. 

The reevaluation process starts when a VBA Rating Veterans Service 
Representative (RVSR) completes a disability compensation claim and 
determines whether the veteran should be reevaluated at some time in 
the future. RVSRs base this decision on a number of factors. The 
disability reevaluation may be mandated by the Schedule for Rating 
Disabilities. For example, a veteran with a 100 percent disability 
rating due to a heart valve replacement is required to be reevaluated 6 
months after discharge from the hospital. Alternatively, the RVSR may 
determine that the severity of the disability may change. For instance, 
medical evidence may suggest that a veteran with limited range of 
motion will be continuing physical rehabilitation and is expected to 
improve. To ensure that the disability is reviewed in the future, the 
RVSR enters a diary date into VBA's claims processing system, which 
later generates a reminder that the disability needs to be reviewed. 
When this reminder is generated, the veteran's file is retrieved and an 
RVSR performs a preliminary assessment of whether a reevaluation should 
be conducted. If the RVSR determines that a reevaluation is no longer 
needed, the reevaluation is canceled. For example, staff may cancel a 
reevaluation when a veteran dies or if the file is already being 
reviewed by VBA following the veteran's claim that his disability has 
worsened. If the RVSR determines that a reevaluation of the disability 
should be conducted, the RVSR can simply review the information in the 
file or, if needed, collect supplemental medical information which can 
include the results of a physical examination. Once all of the 
information has been analyzed, an RVSR can make a decision to increase, 
decrease, or continue the current rating. Figure 1 summarizes the 
disability reevaluation process. 

Figure 1: Summary of VBA's Disability Reevaluation Process: 

[See PDF for image] 

This figure is a graphic illustration of the VBA Reevaluation Process. 
The illustration depicts the following data: 

Schedule a disability reevaluation diary date at time disability 
compensation claim decided; Disability Reevaluation: 
* Diary date matures; 
* Regional office notified; 
* RVSRs preliminary assessment; 
* Cancel reevaluation or Conduct reevaluation; Increase, decrease, or 
retain disability rating level. 

Source: GAO. 

[End of figure] 

VBA maintains a quality assurance review program known as the 
Systematic Technical Accuracy Review (STAR) program. VBA selects random 
samples of each regional office's disability compensation decisions and 
assesses the regional office's accuracy in processing and deciding such 
cases. For each decision, the STAR quality review unit reviews the 
documentation contained in the regional office's claim file to 
determine, among other things, whether the regional office complied 
with the Veterans Claims Assistance Act[Footnote 3] duty-to-assist 
requirements for obtaining relevant records, made correct service 
connection determinations for each claimed condition, and made correct 
disability rating evaluations for each condition.[Footnote 4] VBA has a 
fiscal year 2008 performance goal that 90 percent of compensation 
decisions contain no errors that could affect decision outcomes; its 
long-term strategic goal is 98 percent.[Footnote 5] In addition to 
STAR, regional offices conduct their own local quality assurance 
reviews. The guidance for these local quality assurance reviews calls 
for reviewing a random sample of an average of five claims for each 
RVSR, per month. 

VA is currently projecting that it will fully implement a new 
processing and benefits payment system--VETSNET, for their disability 
compensation process in May 2008. VA anticipates that VETSNET will be 
faster, more flexible, and have a higher capacity than VBA's aging 
Benefits Delivery Network (BDN). For the past 40 years, BDN has been 
used to process compensation and pension benefits payments to veterans 
and their dependents each month. However, this system is based on 
antiquated software programs that have become increasingly difficult 
and costly to maintain. 

VBA's Operational Controls Do Not Ensure That Disability Reevaluations 
Occur, but VBA Is Planning to Update Some of Its Processes and 
Procedures: 

VBA's operational controls do not adequately ensure that staff schedule 
or conduct disability reevaluations as necessary. VBA's claims 
processing software does not ensure that diary dates are established. 
To the extent that staff do not enter diary dates, some cases that need 
reevaluations may never be brought to the attention of claims 
processing staff. As a result, some reevaluations may not be conducted. 
Staff can also cancel disability reevaluations and VBA does not track 
or review canceled reevaluations. Thus, VBA does not have assurances 
that reevaluations are being canceled appropriately. Also, completed 
reevaluations are not likely to receive quality assurance reviews. VBA 
plans on improving some of its control mechanisms through its new 
claims management system, VETSNET. However, VETSNET will not address 
all of the issues we found regarding VBA's operational controls. 

Controls Do Not Ensure Staff Schedule or Conduct Disability 
Reevaluations: 

VBA operational controls do not ensure that cases that should be 
reevaluated are scheduled for disability reevaluations. VA's 
regulations require VBA to schedule disability reevaluations either 
when VBA determines that a veteran's disability is likely to change or 
when mandated by the Schedule for Rating Disabilities. For cases where 
VA determines that a disability is likely to change, VBA staff must 
manually enter diary dates into VBA's claims processing system in order 
to ensure that a reminder is generated. The diary date is the only VBA 
procedural trigger that alerts regional offices that a claim needs to 
be reviewed. However, claims processing staff can complete a rating 
decision on a disability claim without entering a reevaluation diary 
date. To the extent that staff do not enter a diary date, a case that 
needs to be reevaluated may never be brought to the attention of claims 
processing staff. As a result, the case will likely not be 
reevaluated.[Footnote 6] The VA Office of Inspector General has found 
some instances where this has occurred.[Footnote 7] For example, during 
a review at the Little Rock, Arkansas regional office, the VA IG found 
that staff failed to enter required dates for 10 of 41 cases sampled at 
that office. 

VBA's electronic claims processing system also does not automatically 
set up diary dates for all disabilities where a reevaluation is 
mandated by VA's Schedule for Rating Disabilities. According to VA, 
there are 31 disabilities where reevaluations are required by the 
Schedule. VBA has automated diary dates for 14 of these disabilities. 
As a result, staff must manually enter diary dates into the system for 
the remaining 17 disabilities. VBA does not currently have a plan for 
expanding its automated diary date protocol to include all disabilities 
where reevaluations are mandatory. VBA officials said that their first 
priority is to ensure VETSNET is operational and their conversion plan 
is completed. 

Once diary dates have been entered by RVSRs into the claims processing 
system, the dates are transferred to VBA's centralized data processing 
center in Hines, Illinois. When the diary dates mature, the data 
processing center prints and mails out paper notices to VBA's regional 
offices alerting them that reevaluations are needed. However, once the 
centralized data processing center prints out these notifications, the 
diary dates are erased from the centralized computer system. In 
addition, VBA does not track which disability cases were identified for 
reevaluation. Since the notices are single pieces of paper, they could 
be lost or misplaced. If this occurs, these disability reevaluations 
would likely be delayed or not performed at all. VBA is planning on 
improving its ability to track reevaluations. According to VBA 
officials, VETSNET will eliminate the paper notification of a matured 
diary date. Instead, once a disability reevaluation diary date matures, 
VETSNET will automatically create an electronic record, which can be 
tracked. Although VA plans on processing all disability compensation 
claims using VETSNET by May 2008, VBA officials told us that the 
automatically created electronic record would not be included. These 
officials were unable to provide us with a timetable for when such a 
control system would be rolled out. 

Some Disability Reevaluations Not Tracked or Reviewed: 

Once the regional office receives the paper notice that a reevaluation 
is due, staff perform a preliminary assessment of the veteran's claim 
file to determine if more comprehensive reevaluation should be 
conducted. If staff determine during this preliminary assessment that a 
reevaluation is no longer needed, they can cancel the reevaluation. 
Regional office staff noted several reasons for canceling 
reevaluations, such as when a veteran dies. Additionally, a 
reevaluation would be canceled if the veteran reopens their claim 
because the disability has worsened. However, VBA does not track the 
number or reasons for cancellations. Also, canceled reevaluations are 
not subject to quality assurance reviews. VBA plans on improving its 
ability to track cancellations using VETSNET. According to VBA 
officials, when VETSNET is fully implemented for disability 
compensation claims in May 2008, VBA will be able to track the number 
and reasons for canceled disability reevaluations. 

While completed disability reevaluations are subject to quality 
assurance review, very few are likely to be reviewed. Disability 
reevaluations represent a small portion of the total disability claims 
workload that VBA reviews for quality. For example, reevaluations 
represented about 2 percent of the total number of disability claims 
decisions completed in fiscal year 2005. Since VBA randomly selects 
claims for review from the total number of disability decisions, it is 
not likely that VBA will review many reevaluations. Similarly, each 
regional office's quality assurance review would not likely select many 
reevaluation claims. Specifically, the local quality assurance guidance 
calls for reviewing a random selection of an average of five claims for 
each RVSR per month. Disability reevaluations are part of the sample, 
but since they are a small portion of the total caseload, they have a 
low likelihood of being selected. Some of the regional office quality 
assurance review staff we spoke with reported that in the course of a 
month, they may only see a handful of disability reevaluation claims. 
Thus, VBA may not have a sufficient handle on the accuracy and 
consistency of these reevaluations agencywide. 

VBA Lacks Adequate Program Information to Effectively Manage the 
Disability Reevaluation Process: 

VBA cannot effectively manage the disability reevaluation process 
because some of the data it collects are not consistent and it does not 
systematically collect and analyze key management data. While VBA 
collects data on the amount of time regional offices take to conduct 
disability reevaluations, these data are not reliable. Also, VBA does 
not know the number of reevaluation diary dates that mature in a year 
or the types of disabilities being reevaluated, the length of time 
before reevaluations are conducted, or if the reevaluation decisions 
result in an increase, decrease, or no change in the severity of 
veterans' disabilities. VBA's electronic system is unable to capture 
the entire amount of time it takes to complete a disability 
reevaluation and VBA does not currently collect and analyze outcome 
data. 

Timeliness Data Are Inconsistent: 

VBA's disability reevaluation timeliness data are inconsistent because 
regional offices use different starting points for measuring how long 
it takes to complete reevaluations. For example, staff at one regional 
office told us they start measuring the length of time to complete 
disability reevaluations from the date that VBA's centralized data 
processing center in Hines, Illinois, prints the paper notifications. 
Since the paper notifications are mailed from Hines to the regional 
office, several days can pass before the regional office receives the 
paper notifications. As a result, the actual time it takes this office 
to complete disability reevaluations would be overcounted. Other 
regional offices we visited indicated that measuring timeliness is not 
started until the date that staff review the claims file and determine 
that a reevaluation should proceed. Staff at one regional office we 
visited stated that it takes about 10 days for the claim to reach the 
desk of staff who perform the review. Since this review may not always 
take place as soon as the office receives the notification, the actual 
time it takes to complete disability reevaluations for these offices 
would be undercounted. 

VBA Does Not Collect Key Disability Reevaluation Management Data: 

VBA does not collect and analyze key management data on disability 
reevaluations. Thus, VBA does not have a firm grasp on its performance 
in handling claims that are due for a reevaluation. That is, while VA 
collects data on the number of revaluations that it completes, it does 
not compare this information to the number of claims that were 
initially scheduled for a reevaluation. Therefore, VA does not know if 
it is performing well in completing the claims scheduled for review. By 
not tracking this information, VA does not have a clear sense of the 
extent to which reevaluations are being canceled (as noted) or whether 
some reevaluations are simply never started. 

According to VBA officials, VBA also does not collect data on the types 
of disabilities being reevaluated and how far in the future 
reevaluations are scheduled. Also according to VBA officials, VBA does 
not collect data on the outcomes of reevaluations and, as a result, 
does not have the benefit of historical results data that could be used 
to calibrate its decisions on which disabilities are likely to change 
and thus should be a higher priority for reevaluation. Regional office 
staff stated that such information on the disability reevaluation 
process could be useful in aiding their daily decision making on which 
disabilities to reevaluate and when to schedule them. Having such 
historical data could also aid VBA in workload management decisions. 
For example, in January 2002, as a temporary effort to free up staff 
for processing its backlog of disability compensation and pension 
claims, VBA postponed most of their currently scheduled reevaluations 
for 2 years. VBA made this decision without historical data on the 
extent to which reevaluations affect the benefit levels of disabilities 
and lost an opportunity to target only those cases likely to result in 
a change in status. As such, VBA did not know the potential number of 
veterans it could be over-or under-compensating for the 2 years the 
reevaluations were postponed. If VBA had a better data-driven feedback 
component, it could have avoided wholesale postponement of reviews for 
2 years. Figure 2 summarizes the disability reevaluation process with 
an added data-driven feedback loop. 

Figure 2: VBA Disability Reevaluation Process with an Added Data Driven 
Feedback Component: 

[See PDF for image] 

This figure is a graphic illustration of the VBA Reevaluation Process 
with an added Data Driven Feedback Component. The illustration depicts 
the following data: 

Schedule a disability reevaluation diary date at time disability 
compensation claim decided; Disability Reevaluation: 
* Diary date matures; 
* Regional office notified; 
* RVSRs preliminary assessment; 
* Cancel reevaluation or Conduct reevaluation; Increase, decrease, or 
retain disability rating level. 

Data-driven feedback component: 
Beginning at the 'Increase, decrease, or retain disability rating 
level' step listed above: 
* Collect data on disability reevaluations, including results and 
timing of reevaluations; 
* Analyze data to aid decisions on selection and scheduling of 
disability reevaluations; 
* Develop guidance to improve decisions based on data analysis; 
* continue on to 'Schedule a disability reevaluation diary date at time 
disability compensation claim decided' step listed above. 

Source: GAO. 

[End of figure] 

Conclusions: 

It is important that veterans have confidence in the system designed to 
compensate them for their service-connected disabilities and that 
taxpayers have faith in VBA's stewardship of the disability 
compensation program. Inadequate management controls could result in 
some veterans being under-compensated for conditions that have worsened 
or over-compensated for conditions that have improved. VBA is improving 
some of its operational controls over reevaluations. For example, 
through its VETSNET system VBA plans to track the number and reasons 
for cancellations. However, without a system to remind staff to 
schedule disability reevaluation diary dates or a system that 
automatically schedules diary dates for all claims that require 
reevaluation, staff could inadvertently fail to enter diary dates, and 
reevaluations may not be scheduled and performed as needed. Meanwhile, 
measuring regional office performance requires reliable performance 
data. VBA cannot adequately measure how long it actually takes regional 
offices to complete disability reevaluations since offices use 
different starting points for measuring timeliness. For offices that 
start measuring their timeliness after the claim review has been 
started, the measurement can result in undercounting the total amount 
of time to complete a disability reevaluation. Also, without reliable 
performance data, VBA cannot accurately evaluate regional office 
timeliness or compare regional offices' performance. Therefore, VBA 
cannot reward good performance and take actions to improve lagging 
performance. In addition, without data on the results of reevaluations, 
VBA cannot ensure that it is prioritizing its resources to reevaluate 
those veterans whose disabilities are likely to change, and that it is 
reevaluating those disabilities at the appropriate point in time. 
Moving in this direction becomes increasingly more important given 
Operation Enduring Freedom and Operation Iraqi Freedom. Outcome data on 
the reevaluation process could be used to target certain disabilities 
in the future. For example, if VBA found that reevaluating a certain 
disability never resulted in a change in the rating level, then it 
could consider not reevaluating that disability in the future. In 
addition, data on the timing of reevaluations could also be used 
strategically to refine when disabilities are reevaluated. For example, 
some regional offices may be scheduling reevaluations for 2 years into 
the future for a particular disability, whereas other regional offices 
may be using a 3-year time period. This information could be combined 
with the outcomes of such reevaluations to refine guidance and training 
on scheduling reevaluations. 

Recommendations: 

We recommend that the Secretary of the Department of Veterans Affairs 
direct the Under Secretary for Benefits to take the following five 
actions to enhance VBA's disability reevaluation process: 

* VA should modify its electronic claims processing system so that a 
rating decision cannot be completed without staff completing the diary 
date field. 

* VA should modify its electronic claims processing system to ensure 
that a diary date is automatically generated by the system for all 
disabilities where a reevaluation is required by VA's Schedule for 
Rating Disabilities. 

* VBA should include canceled reevaluations in its quality assurance 
reviews and should evaluate the feasibility of periodically sampling a 
larger number of completed disability reevaluations for quality 
assurance review. 

* VBA should clarify its guidance so that all regional offices 
consistently use the date they are notified of a matured diary date as 
the starting point for measuring timeliness. 

* VBA should develop a plan to collect and analyze data on the results 
of disability reevaluations. To the extent necessary, this information 
could be used to refine guidance on the selection and timing of future 
disability reevaluations. 

Agency Comments: 

In its written comments on a draft of this report (see app. II), VA 
generally agreed with our conclusions and concurred with our 
recommendations. 

As agreed with your office, unless you publicly announce its contents 
earlier, we plan no further distribution until two weeks after the date 
of this report. At that time, we will send copies of this report to the 
Secretary of Veterans Affairs, appropriate congressional committees, 
and other interested parties. The report will also be available at 
GAO's Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
call me at (202) 512-7215. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Other contacts and staff acknowledgments are 
listed in appendix III. 

Daniel Bertoni: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To develop the information for this report, we analyzed Veterans 
Benefits Administration (VBA) workload and timeliness data on 
disability reevaluations. We found that VBA workload reports, which 
detail the length of time it takes regional offices to complete 
disability reevaluations are not reliable, since VBA guidance allows 
regional offices the ability to begin measuring when disability 
reevaluations begin at different points in time. Because VBA does not 
routinely collect and analyze data on the time allowed prior to 
reevaluating disabilities or the results of reevaluations, we requested 
a VBA analysis of claims-level data. In November 2006, VBA agreed to 
develop a one-time analysis of reevaluations completed in 2006. 
However, because of difficulties in developing the data VBA was unable 
to provide the analysis in time for us to incorporate the results into 
this report. We also reviewed federal regulations on disability 
reevaluations, VBA's written guidance and training materials on 
reevaluations, and VBA's procedures for conducting reevaluations. We 
discussed the procedures for ensuring that reevaluations are conducted 
and the information used to manage the reevaluation program with VBA 
headquarters and regional office officials and observed control 
procedures at 5 of VBA's 57 regional offices. Specifically, we visited 
VA's regional offices in Chicago, Illinois; Columbia, South Carolina; 
Muskogee, Oklahoma; Nashville, Tennessee; and Seattle, Washington. We 
selected the Columbia, Muskogee, and Nashville regional offices based 
on fiscal year 2005 VBA data that showed they completed reevaluations 
faster than the national average. Chicago and Seattle took longer than 
the national average. All five offices also completed a greater than 
average number of reevaluations. We also selected these five offices 
based on their geographic dispersion. During our site visits, we toured 
the regional office's facilities and interviewed regional office 
management, 30 staff involved in regional office claims processing, 6 
staff tasked with quality assurance, and other staff. We did not 
perform a case file review during our visits. The VA Office of 
Inspector General had performed a limited case file review and found 
that in some instances reevaluations were not scheduled where required. 
We built on the Inspector General's work by looking at VBA's processes 
for ensuring that reevaluations are scheduled when required. 

[End of section] 

Appendix II: Comments from the Department of Veterans Affairs: 

The Secretary Of Veterans Affairs: Washington: 
November 26, 2007: 

Mr. Daniel Bertoni: 
Director, Education, Workforce and Income Security: U.S. Government 
Accountability Office: 441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Bertoni: 

The Department of Veterans Affairs (VA) has reviewed the Government 
Accountability Office's (GAO) draft report, Veterans' Benefits: 
Improved Operational Controls and Management Data Would Enhance VBA's 
Disability Reevaluation Process (GAO-08-75) and generally agrees with 
GAO's conclusions and concurs with GAO's recommendations. 

The enclosure specifically addresses each of GAO's recommendations and 
provides comments to the draft report. VA appreciates the opportunity 
to comment on your draft report. 

Sincerely yours, 

Signed by: 

Gordon H. Mansfield: 
Acting: 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) Draft Report Veterans' Benefits: Improved 
Operational Controls and Management Data Would Enhance VBA's Disability 
Reevaluation Process (GAO-08-75). 

To enhance VBA's disability reevaluation process, GAO recommends that 
the Secretary of Veterans Affairs direct the Under Secretary for 
Benefits to take the following actions: 

* VA should modify its electronic claims processing system so that a 
rating decision cannot be completed without staff completing the diary 
date field. 

Concur - Rating Veterans Service Representatives (RVSR) determine 
whether a disability is static. VA will change Rating Board Automation 
(RBA) 2000 programming to provide an edit to require a "yes or no" 
decision about reexamination. Programming to accomplish this change 
will be scheduled at a future date to avoid any diversion of resources 
currently devoted to VETSNET implementation. 

* VA should modify its electronic claims processing system to ensure 
that a diary date is automatically generated by the system for all 
disabilities where a reevaluation is required by VA's Schedule for 
Rating Disabilities. 

Concur - Determining the need for reevaluation is based on the facts 
and circumstances of each individual claim. VA will assess the 
technical feasibility of this recommendation. Programming to accomplish 
this change will be scheduled at a future date to avoid any diversion 
of resources currently devoted to VETSNET implementation. 

* VBA should include canceled reevaluations in its quality assurance 
reviews and should evaluate the feasibility of periodically sampling a 
larger number of completed disability reevaluations for quality 
assurance review. 

Concur - Quality assurance review selection criteria will be modified 
to include canceled requests for disability reexaminations. A larger 
proportion of reevaluations are being selected for review. A total of 
38,899 reevaluations were completed during fiscal year 2007, accounting 
for 4.72 percent of the rating workload. Quality assurance reviews were 
conducted on 485 reevaluation cases, which represent 7.7 percent of the 
total quality assurance reviews. 

* VBA should clarify its guidance so that all regional offices 
consistently use the date they are notified of a matured diary date as 
the starting point for measuring timeliness. 

Concur - Using the date printed on the system-generated exam request as 
the starting date to measure how long it takes to complete 
reevaluations would provide consistency in timeliness measurements. VA 
will clarify its guidance to the regional offices to ensure 
consistency. 

* VBA should develop a plan to collect and analyze data on the results 
of disability reevaluations. To the extent necessary, this information 
could be used to refine guidance on the selection and timing of future 
disability reevaluations. 

Concur - A one-time review will be conducted. Data involving end 
products will be matched against reevaluation requests and results 
analyzed to determine if guidance for scheduling disability 
reevaluations needs to be refined. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, Director (202) 512-7215: 

Staff Acknowledgments: 

The following individuals made important contributions to the report: 
Brett Fallavollita, Assistant Director; Martin Scire; David Forgosh; as 
well as Susannah Compton; James Rebbe; Christine San; and Walter Vance. 

[End of section] 

Footnotes: 

[1] Schedule for Rating Disabilities is primarily a guide for 
evaluating disabilities resulting from all types of diseases and 
injuries encountered as a result of, or incident to, military service. 

[2] VA specifically identifies these conditions as tinnitus, defective 
hearing, diabetes mellitus, post-traumatic stress disorder, lumbosacral 
or cervical strain, and generalized musculoskeletal conditions. 

[3] The Veterans Claims Assistance Act of 2000 (Pub. L. No. 106-475, 
Nov. 9, 2000) obligates VA to assist a claimant in obtaining evidence 
that is necessary to establish eligibility for the benefit being 
sought. 

[4] Service connected disabilities are injuries or diseases incurred or 
aggravated while on active military duty. 

[5] Department of Veterans Affairs FY 2008 Budget Submission, National 
Cemetery Administration, Benefits Programs, and Departmental 
Administration, Volume 2 of 4, February 2007. 

[6] VBA claims processing staff explained to us that a claim could be 
reevaluated if a veteran submits a claim to increase the benefit for a 
current disability or claim a new disability. 

[7] VA Office of Inspector General, Combined Assessment Program Review 
of the VA Regional Office Little Rock, Arkansas, Report No. 04-03331-91 
(Washington, D.C.: Feb. 25, 2005). 

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