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Hearing Transcript on The Impact of Operation Iraqi Freedom/Operation Enduring Freedom on the U.S. Department of Veterans Affairs Claims Process.

 

 

THE IMPACT OF OPERATION IRAQI FREEDOM/OPERATION ENDURING FREEDOM ON THE U.S. DEPARTMENT OF VETERANS AFFAIRS CLAIMS PROCESS

 


HEARING

BEFORE  THE

SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

OF THE

COMMITTEE ON VETERANS' AFFAIRS

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION


MARCH 13, 2007


Printed for the use of the Committee on Veterans' Affairs

SERIAL No. 110-8

 

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WASHINGTON, DC:  2008


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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman

 

CORRINE BROWN, Florida
VIC SNYDER, Arkansas
MICHAEL H. MICHAUD, Maine
STEPHANIE HERSETH SANDLIN, South Dakota
HARRY E. MITCHELL, Arizona
JOHN J. HALL, New York
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
SHELLEY BERKLEY, Nevada
JOHN T. SALAZAR, Colorado
CIRO D. RODRIGUEZ, Texas
JOE DONNELLY, Indiana
JERRY MCNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

STEVE BUYER,  Indiana, Ranking
CLIFF STEARNS, Florida
JERRY MORAN, Kansas
RICHARD H. BAKER, Louisiana
HENRY E. BROWN, JR., South Carolina
JEFF MILLER, Florida
JOHN BOOZMAN, Arkansas
GINNY BROWN-WAITE, Florida
MICHAEL R. TURNER, Ohio
BRIAN P. BILBRAY, California
DOUG LAMBORN, Colorado
GUS M. BILIRAKIS, Florida
VERN BUCHANAN, Florida

 

 

 

Malcom A. Shorter, Staff Director


SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
JOHN J. HALL, New York, Chairman

CIRO D. RODRIGUEZ, Texas
PHIL HARE, Illinois
SHELLEY BERKLEY, Nevada
DOUG LAMBORN, Colorado, Ranking
MICHAEL R. TURNER, Ohio
GUS M. BILIRAKIS, Florida

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

 

       

C O N T E N T S
March 13, 2007


The Impact of Operation Iraqi Freedom/Operation Enduring Freedom on the U.S. Department of Veterans Affairs Claims Process

OPENING STATEMENTS

Chairman John J. Hall
        Prepared Statement of Chairman Hall
Hon. Doug Lamborn, Ranking Republican Member
        Prepared Statement of Congressman Lamborn


WITNESSES

U.S. Government Accountability Office, Daniel Bertoni, Acting Director, Education, Workforce, and Income Security Issues
        Prepared statement of Mr. Bertoni
U.S. Department of Veterans Affairs, Ronald R. Aument, Deputy Under Secretary for Benefits, Veterans Benefits Administration
       Prepared statement of Mr. Aument


Bilmes, Linda,  Professor, John F. Kennedy School of Government, Harvard University,
    Cambridge, MA
        Prepared statement of Ms. Bilmes
Iraq and Afghanistan Veterans of America, Patrick Campbell, Legislative Director
        Prepared statement of Mr. Campbell
National Association of County Veterans Service Officers, Ann G. Knowles, President
        Prepared statement of Ms. Knowles
Veterans for America:
    Stephen L. Robinson, Director of Veterans Affairs
        Prepared statement of Mr. Robinson
    Brady Van Engelen, Associate Director
        Prepared statement of Mr. Van Engelen
VoteVets.org, Jon Soltz, Co-Founder and Chairman
        Prepared statement of Mr. Soltz


MATERIAL SUBMITTED FOR THE RECORD

"How the U.S. Is Failing Its War Veterans," Newsweek Magazine, March 05, 2007, by Dan Ephron and Sarah Childress

"Pomona Veteran Shares Story of Fighting for Health Benefits," The Journal News, (Original Publication: March 13, 2007), by Hema Easley

"Vietnam Vet Fights for Fellow Soldiers," Times Herald-Record, March 13, 2007, by Greg Bruno

"Veterans Face Vast Inequities Over Disability," New York Times, March 09, 2007, by Ian Urbina and Ron Nixon

"The Economic Costs of the Iraq War:  An Appraisal Three Years after the Beginning of the Conflict," January 2006, by Linda Bilmes, Kennedy School, Harvard University, and Joseph E. Stiglitz, University Professor, Columbia University

" Soldiers Returning From Iraq and Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and Disability Benefits," January 2007, by Linda Bilmes Professor, Kennedy School of Government, Harvard University


THE IMPACT OF OPERATION IRAQI FREEDOM/OPERATION ENDURING FREEDOM (OIF/OEF) ON THE U.S. DEPARTMENT OF VETERANS AFFAIRS CLAIMS PROCESS


Tuesday, March 13, 2007
U. S. House of Representatives,
Subcommittee on Disability Assistance and Memorial Affairs,
Committee on Veterans' Affairs,
Washington, DC.

The Subcommittee met, pursuant to notice, at 10:17 a.m., in Room 334, Cannon House Office Building, Hon. John J. Hall (Chairman of the Subcommittee) presiding.

Present:  Representatives Hall, Hare, Rodriguez, Lamborn. 

OPENING STATEMENT OF CHAIRMAN HALL

Mr. HALL. Okay.  Now we are going to move to our hearing on the Impact of Operation Iraqi Freedom/Operation Enduring Freedom (OIF/OEF) Returning Veterans on the VA Claims Process.

And if our first two panelists would like to come to the table in front, Dan Bertoni from the U.S. Government Accountability Office and Linda Bilmes from the John F. Kennedy School of Government.

And I think I have asked Congressman Lamborn, if it is okay with my colleagues on this side of the aisle, we will make a brief statement each and then we will hear from you because that is where the hearing is.  And then we can each make statements as part of our five minutes.  We can have as many five minutes as we want.

Thank you again for coming here today, and I am honored and at the same time troubled to be sitting here with our topic today and the news that has been heard and seen recently and what I am hearing from veterans in my district.

Regardless of whether or not you agree or disagree with a particular policy or a particular war, all members of Congress I have spoken to, and I think all Americans, believe that our young men and women who serve in OIF/OEF deserve the best medical care and all the help we can give them in transitioning from military to civilian life.

Nothing bothers me more than hearing people say they support the troops, but seeing a cold shoulder being turned when those troops return home, or seeing veterans have to fight their way through layers of bureaucracy, or wait for months or years while their claims are processed.

The purpose of today's hearing is to ensure that the problems discovered at Walter Reed Army Medical Center are not the tip of the iceberg with respect to how prepared we are for our returning servicemembers.

Since the jurisdiction of this Subcommittee is not veterans' healthcare but veterans' benefits, we are going to focus on the VA's claims process and how it has been impacted by OIF and OEF, and more importantly, how it will be impacted, I think, as the wave—I think we are only beginning to see the front end of the wave of returning veterans who are affected physically or psychologically.

As an aside, I would like to say that I am sponsoring a bill to allow active-duty servicemembers the option of receiving medical treatment at their local VA hospital if they so desire without changing their status as active-duty members of the military.

In addition to looking at whether the VA is equipped to handle the claims of returning servicemembers, this hearing will also examine reports of discrepancies among active and reserve veterans.  Some media reports state that Reserve and National Guard servicemembers had a greater risk of their claims being denied or lowered than their active-duty counterparts.

I am going to skip over the rest of my statement for now.  I just want to refer you all to, if you have not seen it already, to the March 5th edition of Newsweek, which I will introduce into the record, to see how some returning OIF and OEF veterans are falling through the cracks.

[The article referenced by Chairman Hall, "How the U.S. Is Failing Its War Veterans," Newsweek Magazine, March 05, 2007, by Dan Ephron and Sarah Childress, appears in the Appendix.]  

Mr. HALL.  There is a story on page 33 of that magazine about Patrick Feges, who was wounded in October of 2004 and had to wait 17 months until his first VA disability check arrived.  His mother, an elementary school teacher, took a second job at McDonald's to help support him.

Mr. Feges' claim was only approved after Newsweek and the Veterans for America began looking into his case.  I thank them both for their work.

And this hearing today is to see if the 17-month delay is an anomaly or evidence of a systemic problem for returning OIF and OEF veterans.  If it is the latter, I would be interested in hearing any and all recommendations from our witnesses on how we can fix the problem. 

And now I would like to recognize our Ranking Member, Congressman Lamborn, for his opening statement.

[The prepared statement of Chairman Hall appears in the Appendix.]

OPENING STATEMENT OF HON. DOUG LAMBORN

Mr. LAMBORN.  Thank you, Mr. Chairman, for recognizing me.  And I want to thank you for holding this hearing on the claims backlog and how it will affect the returning servicemembers from the Global War on Terror.

As I said earlier, I congratulate you on your being appointed as the Chairman of this Subcommittee, and I look forward to working with you in a bipartisan manner to solve these problems.

Today we are here to talk about the effect of OIF and OEF veterans on the VA claims process.  I am more concerned about the effect of the VA claims process on our great veterans.  And since the beginning of Operation Enduring Freedom, more than 150,000 claims have been filed by OIF and OEF veterans.

In part, this is a positive response to VA's increased outreach, but now we have a responsibility to process these claims and to care for these veterans in a responsible manner.

I believe the first step toward improvement for these veterans is to improve the overall VA claims processing system.  The backlog of compensation and pension claims is over 632,000 claims, about 15,000 more than a month ago according to the VA's weekly report.

The VA has set a goal to decide a given claim in an average of 125 days.  While more than four months does strain the meaning of the word prompt, it is not unreasonable given the complexity and the demands of the “Veterans Claims Assistance Act” and other administrative requirements, but now we need the VA to go out and just do it.

I know that we in Congress bear some responsibility for all of the complexity.  I look forward to asking Mr. Aument what we can do to help improve the bureaucratic process while safeguarding it for veterans.

Mr. Chairman, both the budget views and estimates from the Committee's Majority and the Minority recommend 1,000 new hires for the VBA over and above the President's request for 457 new staff for compensation and pension. 

In two years when they are all hired and trained, they will indeed make a difference.  The conventional approach of increased hiring is entirely appropriate.  VBA has over the past several years experienced personnel shortages. 

We must also explore some innovative ways to tackle the challenge that may have even faster payoffs than the new hires.  That is why Committee Republicans this year have recommended funding for innovative pilot programs to address the backlog as well.

We recommended funded for a pilot program to explore the feasibility of inter-governmental and VSO partnerships with VA in the development of compensation and pension claims.  This pilot program would build on positive findings from a 2002 project conducted between the VA's Buffalo, New York regional office and the New York State Division of Veterans Affairs.

Within six months of their collaboration, the State Veterans Division was developing claims in partnership with VA.  Decisions for the region's veterans came faster and accuracy improved.  This kind of innovation holds great promise.

Access to VBA regional offices can be difficult for many veterans.  That is why we also recommended funding a pilot program for mobile claims offices.

VBA staff members in mobile offices would provide outreach, help veterans file their claims, and gather ombudsman feedback and resolution for veterans.

Mobile offices helping veterans with their claims could speed up the claims process by improving communication and access for veterans.

To take advantage of the potential offered by technology, we recommend funding to explore a rules-based adjudication system.  Software could potentially decide simple claims accurately, quickly, and consistently so that developers can focus on the complex cases.

For our newest veterans returning from Afghanistan, Iraq, and elsewhere in the Global War, we must achieve a seamless transition from the military into the VA system.  It is apparent to me that a seamless transition will help erase that backlog because it does increase the system's overall efficiency.

We need full inter-operable electronic health records between VA and Department of Defense, an electronic DD Form 214, military separation physicals that can also function as VA disability physicals, and a disability rating process that provides consistent ratings.

What good is a separation exam and health records from DoD if the veteran has to repeat the whole process all over again with the VA?

Mr. Chairman, I am sure you agree no veteran should have to wait six months to a year for their claim to be decided and then endure an appeal possibly that adds another year or two.  For some veterans, this is not merely inconvenient, it is financial and potentially emotional disaster.

Every one of these claims is an American veteran and his or her family awaiting a decision.  Every veteran deserves to have their claim adjudicated quickly and accurately.

One thing is certain.  If we do not fix this problem now, our legacy will be an intolerable backlog regrettably endured by this generation of veterans and inexcusably bequeathed to a future generation.  I firmly believe no one in this room wants such an outcome.

I want to thank the witnesses for their service and for their testimony.  I look forward to hearing it and I look forward to our continued discussion today.

Mr. Chairman, I yield back.

[The prepared statement of Congressman Lamborn appears in the Appendix.]

Mr. HALL.  Thank you, Mr. Lamborn.  Some good ideas there, and we will be taking close looks at them as we go forward.

If our other members would be content to submit opening statements to the record, then we will move straight to the testimony.

And if we could start with you, Mr. Bertoni.  Daniel Bertoni, the Acting Director of Education, Workforce, Income Security Issues for the GAO.

Welcome, Mr. Bertoni.

STATEMENTS OF DANIEL BERTONI, ACTING DIRECTOR, EDUCATION, WORKFORCE, AND  INCOME SECURITY ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND LINDA J. BILMES, PROFESSOR, JOHN F. KENNEDY SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY, CAMBRIDGE, MA

 STATEMENT OF DANIEL BERTONI

Mr. BERTONI.  Mr. Chairman, members of the Subcommittee, good morning.  I am pleased to be here to discuss the Department of Veterans Affairs disability claims process in the context of the wars in Iraq and Afghanistan.

Last year, VA provided nearly $35 billion in benefits to 3.5 million veterans and survivors.  For years, the claims process has been the subject of attention by VA, the Congress, and others due to untimely decisions, large backlogs, and other weaknesses.

In 2003, we designated VA and other Federal disability programs high risk because these programs were based on outmoded concepts and continue to experience management and operational problems.  And since that time, we have issued numerous reports with recommendations for change.

My testimony today is based on our prior work and focuses on three areas, service delivery challenges facing VA, actions taken to better serve applicants, and areas where fundamental reform may be needed to further improve performance in the future.

In summary, several factors have created service delivery challenges for VA.  In general, the growth in disability claims has strained operations.  Since 2000, the number of annual claims, including those filed by veterans of Iraq and Afghanistan, haven risen steadily from about 579,000 to over 800,000 last year. 

While VA has had success in the past reducing its claims inventory, it is now losing ground.  Since 2003, pending claims have increased almost 50 percent to nearly 400,000.  Those pending over six months also increased more than 75 percent to over 80,000.

And the time required to resolve appeals also remains problematic.  The current average processing time of 657 days is far from VA's stated goal of one year.

Other factors affecting performance include court decisions requiring VA to assist veterans in developing claims, laws and regulations which have expanded benefit entitlement, increasing caseload complexity as more veterans claim multiple disabilities, difficulties obtaining key evidence in a timely manner, and VA's increased outreach to veterans and servicemembers.

VA is also receiving more claims for new and complex disabilities related to combat overseas, including traumatic brain injuries, as well as posttraumatic stress disorder cases as well, which are generally hard to evaluate.

In light of these considerable challenges, we have noted that continuing to devise new ways to work smarter and more efficiently will be essential to VA's productivity.  VA has taken steps to improve claims process.  Its 2008 budget requests over 450 additional claims processing staff, a six percent increase over last year.

Other productive initiatives include increasing overtime, using retired staff as trainers, and piloting a paperless benefits delivery and discharge process where servicemembers' disability claim and medical records are captured electronically prior to separation.

VA has also enhanced internal training and information sharing to reduce the number of cases sent back by the Board of Appeals due to errors or incomplete evidence.

VA also recently announced a new initiative to provide priority processing of all OIF and OEF disability claims. 

It is imperative that VA continue to address weaknesses and bottlenecks in its system to expedite case processing, increase decisional accuracy, as well as consistency.

Through our ongoing work, we will continue to monitor and assess VA's near-term initiatives to ensure that VA balances the need for improved case processing, that they need to protect the veterans' due process rights.

Going forward, there also may be opportunities for more fundamental reform that could dramatically improve the program in the longer term.

In designating VA's disability program high risk, we noted that its processes did not reflect the current state of science, medicine, technology, and the national economy which has moved away from manual labor to service and knowledge-based employment.

We recommended that VA reassess its disability criteria to better align with changes in the national economy and that it place a greater emphasis on early intervention and rehabilitation services.

We have also reported that VA's field structure may impede efficient operations.  Despite limited efforts to consolidate some processes and workloads, VA has not changed its basic field structure for processing claims at 57 regional offices which have experienced large variations in productivity, accuracy, and consistency.

While reexamining claim processing challenges can be daunting, key efforts are underway.  In 2003, the Congress established the Veterans Disability Benefits Commission to study many of the issues discussed today, including VA claims processing operations and the location and number of processing centers.

The Commission is scheduled to report to Congress by October of 2007.  And like you, we look forward to the findings and recommendations.

Mr. Chairman, this concludes my remarks.  I am happy to answer any questions that you or the members of the Subcommittee may have.  Thank you.

Mr. HALL.  Thank you, Mr. Bertoni.  And your written testimony as submitted will be added to the record.

[The prepared statement of Mr. Bertoni appears in the Appendix.]

Mr. HALL.  And before we go to questions, we would like to hear the statement of Professor Linda J. Bilmes from the Kennedy School of Government at Harvard University.

Professor Bilmes.

STATEMENT OF LINDA J. BILMES

Ms. BILMES.  Thank you, Mr. Chairman, Mr. Lamborn, members of the Subcommittee.  Thank you for inviting me to speak to you today on this important topic.

I am Professor Linda Bilmes, a faculty member of the Kennedy School of Government where I teach budgeting and public finance.

Just by way of background, last year, I co-authored with Nobel Laureate Professor Joe Stiglitz a paper that analyzed the economic cost of the Iraq War.  One of the long-term costs we identified is the cost of providing lifetime disability benefits and medical care for veterans.

[The paper referenced above, "The Economic Costs of the Iraq War:  An Appraisal Three Years after the Beginning of the Conflict," appears in the Appendix.]

Today I would like to focus on the projected number of veterans' claims, the capacity of the Department of Veterans Affairs to process those claims, and the cost of providing benefits to returning OIF/OEF soldiers. 

This was the subject of my second paper written this year which specifically looked at the cost of providing care and disability benefits to veterans in Operation Iraqi Freedom and Enduring Freedom.  The paper has been entered into the record.

[The second paper referenced above, " Soldiers Returning From Iraq and Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and Disability Benefits," appears in the Appendix.]

I would like to discuss five key areas of concern and then to recommend five changes that I believe would significantly streamline the process.

First, the areas of concern.  First, the VBA is currently overwhelmed with the volume of claims it is receiving, leading to a huge backlog.  In 2006, the VBA received over 800,000 claims. 

Secretary Nicholson testified last month that he expects to receive 1.6 million additional claims in the next two years.  My own projections show that between 250,000 and 400,000 of these claims will be new, unique applications from soldiers currently serving in Iraq and Afghanistan.  The number of pending claims and paperwork has risen from 69,000 in 2001 to more than 600,000 as of today.

Second, the claims process itself is extremely long, cumbersome, and paperwork intensive.  As noted, the VBA takes an average of about six months to process an initial claim and an average of about two years to process an appeal.  By contrast, the private sector medical insurance settles 30 million insurance claims, including the appeals, within an average of 89.5 days. 

The process for ascertaining whether a veteran is suffering from a disability and rating the percentage level of a veteran's disability is far too complex.  After a veteran applies to one of the 57 regional offices, a claims adjudicator evaluates the veteran's service-connected impairments and assigns a rating for the degree to which the veteran is disabled.

Claims specialists determine the percentage of disability for each condition in increments of ten.  However, you would think that would be complicated enough, but conditions are not scaled monotonically from zero to a hundred. 

Mental conditions, for example, are rated zero, ten, thirty, fifty, seventy, or a hundred.  Coronary artery disease ratings are ten, thirty, sixty, and one hundred.  Spinal conditions are rated ten, twenty, thirty, forty, fifty, one hundred.  A huge amount of time and effort is devoted to making these determinations and then on the veteran's side, to appealing the decision. 

There is wide disparity in efficiency between individual VBA offices.  Regional offices are inconsistent in how they rate disabilities.  GAO found that the days needed to process a claim range from 99 days in the Salt Lake City VA to 237 in Honolulu.  Currently some of the States providing the most soldiers for the war are suffering the longest delays in claims adjudication.

In addition, the claims themselves are more complicated than in previous conflicts.  Vietnam-era claims cited on average three disability conditions.  Gulf War veterans filed four.  For GWOT veterans, the average claim includes five separate disability issues.  One-quarter of the new claims filed this year cited eight or more disabilities.  And then since each item within a claim is treated separately, there is a great deal of opportunity for duplication and delay.

The VBA has more than 9,000 claims specialists.  Many of them are themselves veterans, and they generally do a good job and they try very hard to help veterans.  But they are under an enormous strain.  They are required to assist the claimant in obtaining evidence in accordance with hundreds of arcane VBA regulations, policies, procedures, and guidelines.  They have to rate the claims, establish files, authorize payments, conduct in-person and telephone interviews, process appeals, and generate various notification documents through the process.  New employees require about 18 months to become trained.

For all these reasons, I believe that the agency as currently structured is simply not capable of settling the current and projected volume of claims in a timely manner.

My third point is that the projected number of claims from the wars in Iraq and Afghanistan will rapidly turn this disability claims problem into a crisis.  The current conflict has the highest incidence of nonmortal casualties in U.S. military history, a ratio of 16 woundings or injuries per fatality.

To date, of the more than 1.4 million U.S. soldiers who have been deployed, about 631,000 have been discharged and one-third have already been treated and diagnosed at VHA hospitals and clinics.  About 180,000 have applied for disability benefits.

If returning GWOT soldiers claim benefits at the same rate as veterans from the first Gulf War, we can expect anywhere from 638,000 to 869,000 unique, new first-time claims from the GWOT in the next five years.  If all the troops return home sooner, if they all return home by 2008, there are likely to be more than 400,000 new claims by the end of 2009 alone.

Fourth, the cost of providing disability benefits to GWOT veterans is projected to be between 70 billion and 150 billion in 2007 dollars.  The cost is not the only issue here, but it is yet another major cost of war that has not been anticipated by the Administration.

The eventual cost will depend on several factors, including the total number of troops deployed and the length of time they are deployed, the rate of claims and utilization of benefit programs by returning troops, and the cost of living adjustments in their benefits. 

Fifth, it is important to understand that the disability process and the health process are inter-related.  The growing number of disability claims is creating additional demand for veterans' medical examinations.  This is adding to pressure on the veterans health facilities.

The current system, as Mr. Lamborn pointed out, does not guarantee that all soldiers receive complete physicals in the military upon discharge and even if they do, they cannot automatically transfer that information from DoD to VA.

Consequently newly-discharged veterans who intend to file a disability claim are seeking medical examinations from VHA health facilities in order to document their disabilities.  Some of the backlog at the veterans health facilities is from veterans who are seeking appointments not necessarily because they require immediate treatment but they have to verify a disabling condition, even in cases where it was already documented upon discharge from the military.

Recommendations.  To address the immediate backlog, the proposal from Secretary Nicholson is to hire 457 additional claims specialists, to increase the claims processed per specialist from 98 to 101, and to make training manuals more readily available.

He projects that this will cut the length of time it takes to process a veteran's claim by 32 days by 2008.  I am not at all optimistic that a few hundred inexperienced new staffers, even assuming that they can be hired quickly, will produce a 22 percent improvement in claims processing time during a period in which the agency faces a huge influx of complex claims.

Indeed, it is conceivable that the task of training and integrating a large number of inexperienced new hires will in the short term actually lengthen claims processing times and increase the number of appeals.  And this problem is compounded by the fact that like many Federal agencies, many experienced VBA personnel will be retiring over the next two to five years.

Therefore, I believe that finding an answer to the claims problem requires us to think outside the box, and I would like to offer several proposals that do this.

First, for the next two years, the VBA should accept and pay all disability claims by returning GWOT soldiers at face value and then audit a sample of them.  In other words, what we should do is essentially what the IRS does with taxes, accept the claims and then audit them.

I would not see this as being a long-term solution, but as a short-term solution.  This would ensure that new returning veterans do not fall through the cracks and it would shift the focus while the VBA reforms its process.

Second, the VBA should replace the cumbersome zero to one hundred scale for disabilities with a simple four-level ranking, zero disabled, low disability, medium disability, and high disability.  This would immediately streamline the process, reduce discrepancies between regions, and likely cut the number of appeals.

The VBA should create a short form for returning veterans using this four-level ranking and set a goal of processing all claims within 60 days of receipt.  This new system should be up and running within two years, including retraining the workforce and developing necessary guidelines and appeals procedures.

Third, all soldiers serving in the GWOT should receive a mandatory full medical examination at discharge from DoD with all records from this examination made available electronically to the VBA immediately, and then the VBA should be able to use these records to grant disability, to spot check and audit claims, and to assist veterans and to relieve some of the pressure on VBA.

Moreover, if veterans are discharged without full medical examinations, they should be reimbursed to receive such an examination from any fully-accredited physician within 90 days of discharge, and this record should be used by VBA for making claims.

Fourth, VBA should shift some of its focus away from claims processing onto more rehabilitation and reintegration of veterans.  In other words, the VBA staff should be used more as a strategic asset.  More of them should be placed in neighborhood veteran centers, health centers, and assisting in benefits at discharge systems.

Fifth and finally, Congress should enact what is a bill now in the Senate, Senate Bill 117, the Lane Evans “Veterans Healthcare and Benefits Improvement Act,” co-sponsored by Senators Obama and Snowe.  This is an excellent piece of legislation that would improve data collection, improve monitoring of claims, improve access to mental healthcare, and improve the benefits and level the playing field for Guards and Reservists.

Thank you very much for your time and attention, and I would be pleased to answer any questions you have. 

[The prepared statement of Ms. Bilmes appears in the Appendix.]

Mr. HALL.  Thank you, Professor Bilmes.

Excellent presentations from both of our witnesses.

I will keep my questions short for now, and say there have been a number of instances you both have brought up and Congressman Lamborn has also mentioned the redundancy of having a discharge physical from DoD and then an evaluation physical from the Department of Veterans Affairs.

I had a visit yesterday in my district with a soldier, a Vietnam veteran, who had repeated physicals for a prostate diagnosis when, in fact, he had prostate cancer.  He already had scans showing that it was in his bones already and he went five years before getting his claims recognized and the bills paid. 

And I will submit a couple stories about that into the record, but he was complaining not just that he was going back for redundant physicals, but the time the doctor was taking on his could have been used for somebody who actually needed a physical who had not been diagnosed already with a more high-tech means.

[The articles referenced by Chairman Hall, "Pomona Veteran Shares Story of Fighting for Health Benefits," The Journal News, (Original Publication: March 13, 2007), by Hema Easley, "Vietnam Vet Fights for Fellow Soldiers," Times Herald-Record, March 13, 2007, by Greg Bruno, appear in the Appendix.]

And it seems that obviously there are some procedural guidelines, the simplification that you speak of in terms of categories, but also in terms of certain conditions, what the doctors and the staff are required to do, maybe to cover their own backs so that they can show a paper trail and not be questioned later.

Which would you suggest, and this can be for both of our witnesses, that we accept the DoD's separation physical, we make that mandatory?  And you were saying it did not always occur, but that we make that mandatory and make that the equivalent of a VA evaluation entry physical or vice versa.

And a more radical thought, what would you think of—it has been suggested recently to me—what would you think of the Department of Veterans Affairs being folded into the Department of Defense so that the true cost of war and of the use of our soldiers is evaluated in the long term and seen as part of the same budget?

Ms. BILMES.  Shall I comment first?  First of all, in terms of the discharge issue, I think there are three parts to it.  First, all soldiers should have a mandatory physical on discharge from the military, you know, while they are there in the military. 

And if you think about the private sector analogy, you cannot imagine most employers dumping the entire cost and responsibility on to their insurers, which is sort of the VA, for the care of their employees.

So, I would recommend that they should have a mandatory examination, and it is very important that the information be then useable, that the files be electronically immediately available to people in the VA and that they not be sort of at the mercy of the fax machine to be trying to locate documents from the DoD, and finally that this examination be allowable within the VA for benefits.

You know, those are three different things that need to be accomplished at the same time.  But I strongly feel it would be very helpful.

Secondly, regarding the more radical idea of folding the VA into DoD, I would not be in favor of that at this time.  I think that generally the culture in the VA is very much an empathetic culture that favors the veteran, that cares about the veteran. 

Certainly when you speak to people who run the polytrauma units and some of these units, they are wonderful people.  They really, care about the veterans and there is sort of an inherent conflict in putting some of those people into a military fighting machine.

However, there has to be a much better transition between the DoD and the VA, and GAO has certainly documented many cases of a lack of sharing of information between DoD and VA.

So what typically happens now is a veteran has to scramble around, having already fought for his country, to get hold of a blood test or something like that was already taken in DoD.  It takes a huge amount of time and effort just to get the most basic information that DoD already has.

So this kind of lack of sharing of DoD medical records and medical information with VA simply has got to be stopped.

Mr. HALL.  Thank you, Professor.

My time has expired, and I will turn to Ranking Member Lamborn.

Mr. Lamborn.

Mr. LAMBORN.  Thank you, Mr. Chairman.

Mr. Bertoni, what do you think about the feasibility of the VA using a rules-based computer system to automate some of the claims decisions that do not require complex interpretations?

Mr. BERTONI.  I think for some straightforward maladies, disabilities, that is a possibility.  There can be deviations even for those and perhaps a rules-based system would not work.  There would have to be, I think, an escape hatch where you would go to another process if it did not apply.

But certainly the concept for applying that technology or that approach to more straightforward—I do not want to say simple—but more straightforward conditions, there is a potential.

But we have not looked at that.  We would be happy to explore that further in the future though.  But conceptually it is possible to use.

Mr. LAMBORN.  Thank you.

And, Professor Bilmes, in your study, you propose a change in the disability rating system to four levels that you just described to us. 

What would be the compensation levels for each of those four categories?

Ms. BILMES.  Sir, you know, I have not studied what would be the compensation levels for those four levels, but I have discussed this proposal with a number of veterans organizations as well as Cynthia Bascetta at GAO.  And I believe that it is something that should be studied.  I mean, I think it could be designed to be a better and fairer system.

Mr. LAMBORN.  Okay.  Thank you.

And which VSOs were you just referring to?

Ms. BILMES.  I have been in contact over the course of the last six months on all of the research I have done with the American Legion, the Veterans of Foreign War, the Paralyzed Veterans of American, the Vietnam Veterans of America, the Veterans for America, the Disabled Veterans of America, the Iraq and Afghanistan Veterans, as well as other groups of veterans, the university veterans organizations, you know, with basically a full range of the veterans organizations.

Mr. LAMBORN.  Thank you, Professor.

Ms. BILMES.  Indeed, I want to point out the reason I wrote this paper is that veterans from the Legion, the VFW, and Veterans for America approached me and asked if I would look at this.

Mr. LAMBORN.  Okay.  Thank you.

Mr. BERTONI.  Mr. Chairman, could I respond to your first question—

Mr. HALL.  Yes.  Certainly.

Mr. BERTONI.  —with regard to the exit physical?  I believe an exit physical, regardless of whether it is at DoD or VA, makes good sense in terms of establishing a baseline whether that person ultimately never even enters the disability system or whether they do shortly thereafter.

But I think it is a good idea to have.  We think it is a good idea to have that baseline.  And certainly when you look at the VA's Benefits Delivery at Discharge Program, that is an avenue where you are getting pretty comprehensive medical information, historical information up front where you can use that in the event of a claim.  And to the extent that that is electronic, it can be transferred electronically, that is even better.

Mr. HALL.  Okay.  Thank you, Mr. Bertoni, Professor Bilmes.  

I will now recognize for his questions Congressman Rodriguez for five minutes.

Mr. RODRIGUEZ.  Thank you very much, and thank you for your testimony.

And let me just make a couple of comments and ask you for your comments.  First of all, you know, the recommendations that you have made with the exception of the first one, are good. 

And I think the idea of the Ranking Minority member about trying to get an assessment on some of the individuals who are almost assured through a computer process, that they will receive the correct rating that they deserve.  It might be something that we ought to look at.

But let me make some general comments.  It is my understanding, and it is based on maybe just stereotypes and feedback, because there were some people that, I thought it was a no-brainer, they should have received something the first time around.  The general rule is, and I tell them, hey, you are going to get turned down the first time no matter what, so you just apply the second time and keep going at it.

And is there a feeling within the system that they automatically—because that is the feeling that we have back home—that they automatically, no matter how genuine their request is, they are going to get denied the first time and that there is an attitude by the Administration, by the VA to do that. 

I am wondering if from region to region, how that varies in terms of how veterans get treated in one region versus another, and if there has been any assessments from that perspective?  I would assume that in some areas where there is a no-brainer, that we just go ahead and recognize the fact that these individuals might deserve those benefits.  Just do that, and that in itself would reduce the number of claims in the future because they have a feeling, like I do, that they are going to get turned down the first time anyway.

Ms. BILMES.  I think that may be a perception that some people have, but my research showed that 88 percent of claims are accepted, at least at some level.  That means at least part of the claim is granted. 

So, you know, my sense is that the real problem here is that when you have a system where almost 90 percent of the claims are eventually granted, the process of getting to that final point is unbelievably complex and bureaucratic.  And so it is really a process problem compounded by a huge volume of incoming claims problem.

Mr. RODRIGUEZ.  You just indicated that 88 percent get granted and then at the end 90 percent.  That means all this fighting is over two percent?

Ms. BILMES.  No.  Eighty-eight—

Mr. RODRIGUEZ.  Or did I misunderstand?

Ms. BILMES.  If I submit a claim, 88 percent of the total claims do get granted, but sometimes claims have multiple parts.  The claim might have four parts and not all of the parts might be granted.

And what we see in this war is much greater complexity of claims.  And so we do not have the data yet on how many, at least I do not have the data on what percentage of, say, an eight-condition claim, you know, is granted.

Mr. RODRIGUEZ.  And do any of you have any data on the regions, if one region is harsher than the other regions?

Mr. BERTONI.  Yeah, I can speak to that.  I would reiterate what the witness just said that there is a continuum.  Someone can apply, be denied, and ultimately get to appeal and their case will be approved.  And ultimately as they go through that process, we end up with the 80 percent approval rate.

As far as consistency across regions, we have reported on numerous occasions that there is considerable inconsistency across the 57 regional offices.  And veterans with like conditions are not always treated consistently in terms of the actual determination of disability, the compensation amount, and/or the rating percentage. 

So there has been numerous reports that we put out where we have been concerned about consistency.  We have recommended that VA look at all levels of their decision-making process, identify specific disabilities that are most problematic or areas that are most problematic and take actions to address them.  And we are aware of some movement on their part to do that. 

But, yes, consistency has been a long-standing issue and your benefit amount or decision should not be contingent upon where you filed.

Mr. RODRIGUEZ.  My last comment.  I know that we had situations where we would submit a case on behalf of a veteran, and I think most of the members of Congress, I think, are doing a lot of the casework for VA, and we would submit it and then 30 days later, we would call up and they would say, sorry, you know, we have not gotten it yet.  So we would submit it again, and this was a game that was played.

Have we made any end roads in that area?

Mr. BERTONI.  In terms of hand-offs and lost documents, I mean, I think that is part of the paper process that we are in.  You know, we have real concerns about the hand-offs, the movement of case files across country, the brokering of claims, how that can result in just lost records and materials. 

So certainly, yes, that is an issue of concern.  I cannot talk to specific circumstances, but, yes, it is an issue.

Mr. RODRIGUEZ.  Thank you.  My time has expired.

Thank you, sir.

Mr. HALL.  I thank the gentleman from Texas.

I now recognize the gentleman from Illinois, Mr. Hare.

Mr. HARE.  Thank you, Mr. Chairman.

Thank you both for coming this morning.

It seems like every time we take one step forward here on disability, we are taking two or three steps backwards.  And, you know, we really, from my perspective, have got to get this under control and we have got to do it sooner rather than later.

And, Professor, let me just say I like what you had in your testimony in terms of your recommendations.  I think that would go a long way towards helping solve some of the problems that we have encountered here because I have a lot of veterans in my congressional district and I hear this over and over again, "It takes so long and, you know, I fought and defended this country and, you know, what is the holdup here."

And for that veteran, they do not understand the process.  They need the help.  And they said you guys have got to figure it out.  So, that is why we are here today.

I just want to ask you, if I could, Mr. Bertoni.  You said in your written testimony that due to the increased number of compensation claims for posttraumatic stress disorders, it adds to the amount of time required to process the claim because the claims are more difficult to evaluate and provide evidence for.

Can you talk about why these claims are more difficult to evaluate and what actions the VA can take to improve the process to evaluating medical or mental health?

Mr. BERTONI.  Sure.  And in the case of PTSD claims, one of the key variables is to document the stressor event.  And if a veteran comes into a regional office and claims PTSD, if in the record they can corroborate combat experience or POW status, that individual's allegation of a stressor event is sufficient for them to process the claim.

If they cannot substantiate combat or a POW status and this individual alleges a stressor event, you have to go to the record.  And if it is not immediately available, the regional office submits a claim. 

The National Personnel Records Center is a VBA unit that has to do the search to find that specific event that is claimed.  And you are talking about historical record, you know, the person's unit, whatever, to dig through this information.

If, in fact, the individual is a Marine Corps veteran, it is easier.  There is an electronic historical database where the analyst can go and do the research.  And I believe we were told that that turnaround time could be as little as one day.  Any of the other services, we are in a more difficult situation, basically slog through manual paper documents, a needle in a haystack.  And that can take up to in excess of a year.

So, you know, we are back to this automated electronic environment versus paper manual environment, and you can see how the deficiencies occur when you have two environments.

We did find that VA has been trying to sort of offset, at least in a couple regional offices.  They have cobbled together or put together an unclassified historical database of records that they are able to use prior to making that referral to the Records Center.  And we are told that they can close the loop on that in about three weeks.  And they have farmed that out to other regions, and we have recommended that they consider a similar system nationally.

Mr. HARE.  Okay.  In both the testimonies, you state that the VBA needs to seriously reexamine the structure and program design for the benefits system.

I wonder if you could describe what specific structural problems you have encountered and what recommendations you would have to improve the VBA system to meet the demands.

Ms. BILMES.  I favor, as I have testified, a complete revamp of the system basically in every way.  I mean, first of all, I think that the claims disability rating system needs to be vastly simplified.  I think there needs to be a short form where people can apply quickly. 

I think that the benefit of the doubt should go to the veteran right away up front so that claims should be essentially granted for returning first-time unique claims at least to some extent, so a veteran has a small stipend at least coming in while the rest of the claim is processed. 

And I think that the VA needs to kind of shift its culture in the benefits process, shifting the culture away from trying to make sure that not one penny is given out that is not deserving to a process of trying to use the people more strategically, deploying them more in the field at benefits of discharge, deploying them more in theatre which is not done at the moment, and deploying claims adjudicators in the vet centers which are very popular neighborhood walk-in clinics for veterans to help them fill in these simplified forms.

And so I think that the whole way that it is structured in terms of what people do, what the process is, the records, the medical records for granting disabilities, and the culture needs to be reformed.

Mr. HARE.  Thank you.

Mr. BERTONI.  Our position is that as VA considers how it may want to modernize its disability process and think more about more timely intervention support services, with that, you might want to look at how you are organized structurally.

We do know that they have at times consolidated workloads and processes to ring out efficiencies, and these were mainly tactical efforts to try to go after problem areas or backlogs.

But we also know that in doing that in those isolated or specific instances, they were able to again ring out additional efficiencies, productivity increases, accuracy, consistency, building staff expertise are particular issues and even administrative overhead savings.

We also know where they have not done that in their current existing 57 regional office structure, we have a situation with massive productivity variance.  We have timeliness, accuracy, consistency issues.

So we believe that they really need to look at this more strategically as they move into the 21st century, as we move forward, and think about this more strategically and how they want to reorganize and they have the right people, processes, and technologies in the right place going forward.

We do not have the answers, but somebody has to take a hard look at this.

Mr. HARE.  Thank you.

Mr. HALL.  Thank you very much, Mr. Bertoni and Professor Bilmes.

The idea of giving veterans the benefit of the doubt sounds good to me.  When you said that in the end 88 percent of claims are approved, that would seem to indicate that maybe only 12 percent of them are an excessively ambitious task. 

And so we may actually save money as well as serve our veterans benefit if we tried your idea of a temporary plan of accepting all claims and then auditing them later so that our returning soldiers get, as you said, at least a baseline of assistance.

So thank you very much, both of you, and the first panel is now excused.

Mr. BERTONI.  Thank you.

Ms. BILMES.  Thank you.

Mr. HALL.  And we are going to try to keep moving along because we all have busy days of solving such serious problems and others.

Panel two, Stephen Robinson from Veterans for America, Brady Van Engelen from Veterans for America, Patrick Campbell from Iraq and Afghanistan Veterans for America, and Ann Knowles of the National Association of County Veterans Service Officers, please come up and take your seats.  Oh, I am sorry.  Jon Soltz from VoteVets.org.  Thank you, Mr. Soltz.

Thank you all.  You do not need to hear a speech from me.  We will start with Mrs. Knowles.

And we have your written testimony and it will be included in the record, so feel free to deviate from your statement.

STATEMENTS OF ANN G. KNOWLES, PRESIDENT, NATIONAL ASSOCIATION OF COUNTY VETERANS SERVICE OFFICERS; STEPHEN L. ROBINSON, DIRECTOR OF VETERANS AFFAIRS, VETERANS FOR AMERICA; BRADY VAN ENGELEN, ASSOCIATED DIRECTOR, VETERANS FOR AMERICA; PATRICK CAMPBELL, LEGISLATIVE DIRECTOR, IRAQ AND AFGHANISTAN VETERANS OF AMERICA; AND JON SOLTZ, CHAIRMAN, VOTEVETS.ORG

STATEMENT OF ANN G. KNOWLES

Ms. KNOWLES.  Thank you, sir.

Mr. Chairman and members of the Committee, it is truly my honor to be able to present this testimony before you.  As President of the National Association of County Veterans Service Officers, I am going to talk about the issues affecting the veterans of the OIF and OEF.

Returning veterans from these two theaters of action have been receiving priority care from the Veterans Administration.  There are valid reasons, but it has resulted in many other claims being placed on the back burner, claims that have equal and valid reasons for priority action.

VA officials have stated the number of claims filed since 2000 has risen nearly 40 percent, and this has caused the number of cases pending to balloon to over 800,000.  Yet, only about four percent of the new claims are from Iraq and Afghanistan.  This is according to the St. Louis Post dispatch February the 26th, 2007.

To stay on target with the subject at hand, let us look at the number and nature of injuries of OIF and OEF veterans.  It has been reported by the DoD that over 19,000 Purple Heart Medals have been awarded since the beginning of OIF and OEF.  Each of these is a potential claim for benefits with the DVA.  Add to this another 25,000 wounded and ever-escalating KIA numbers as additional troops are assigned to Iraq.

Secretary Nicholson in his interview with Bob Woodard of ABC News showed statistics of treatment within VA facilities of over 200,000 OIF/OEF veterans, and not every treatment is a claim, but even a small percentage of these filing a claim for benefits will escalate the numbers in the pipeline waiting processing.

PTSD is recognized in returning veterans from Iraq and Afghanistan.  Their treatment has been given priority.  A United States Army study places those suffering from PTSD at approximately one in eight soldiers who have served in either Iraq or Afghanistan.

A survey of deployed troops indicates that twelve percent of those serving in Iraq and up to six percent who served in Afghanistan have reported symptoms of major depression, anxiety, or PTSD. 

The most frightening statistic is that only 38 percent were interested in getting help and as low as 28 percent actually have even looked at help.  They cited concerns for how they would be viewed by their peers if they sought assistance. 

This, Mr. Chairman, is a ticking timebomb that will eventually blow up in our faces, not necessarily in the face of the military, but in the local communities where the veterans are returning to their homes.

CVSOs and the VA would be forced to deal with these issues because local officials and families concerned about the mental health