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Testimony of

April 13, 2000

Mr. Chairman and Members of the Subcommittee, I am pleased to be here this morning to provide the views of the Department of Veterans Affairs (VA) on several bills that affect important programs for veterans and their dependents and survivors. Today’s agenda includes the following bills: H.R. 4131 (authorizing a compensation cost-of-living adjustment); H.R. 3816 (authorizing service connection for heart attack or stroke suffered by individuals performing inactive duty training); H.R. 3998 (authorizing payment of special monthly compensation for the service-connected loss of one or both breasts due to mastectomy); and H.R. 1020 (establishing a presumption of service connection for occurrence of hepatitis C in certain veterans). In addition, for purposes of oversight, you requested that we address separately the adjudication of

hepatitis C claims. Accompanying me this morning are Mr. John H. Thompson, Deputy General Counsel, and Mr. John F. McCourt, Deputy Director, Compensation & Pension Service.

H.R. 4131 – COMPENSATION COST-OF-LIVING ADJUSTMENT

Mr. Chairman, one of the most important bills on today’s agenda is H.R. 4131. This bill would direct the Secretary of Veterans Affairs to increase administratively the rates of compensation for service-disabled veterans and of dependency and indemnity compensation (DIC) for the survivors of veterans whose deaths are service related, effective December 1, 2000. On February 15, 2000, the Secretary of Veterans Affairs transmitted to Congress draft legislation proposing a cost-of-living adjustment (COLA) for compensation and DIC recipients at the same rate of increase as the COLA that will be provided under current law to veterans’ pension and Social Security recipients. We currently estimate that this year’s Social Security adjustment will be 2.5 percent. We believe this proposed COLA is necessary and appropriate in order to protect the affected benefits from the eroding effects of inflation. Therefore, we strongly support this bill.

We estimate enactment of the COLA would cost $345 million during fiscal year (FY) 2001 and $6.3 billion over the period FYs 2001 – 2005. This increase is not subject to the pay-as-you-go (PAYGO) requirements of the Omnibus Budget Reconciliation Act of 1990 (OBRA).

I would also like to take this opportunity to urge your favorable consideration of another Administration proposal. Our draft legislative proposal of February 15 also included a provision to repeal a provision of the Balanced Budget Act of 1997 that would require VA to defer until October 2, 2000, making veterans-benefit payments which would otherwise be delivered by mail or transmitted for credit to the payee’s account by Friday, September 29, 2000. We strongly believe that veterans should not be financially burdened by this provision and ask that you take action to correct this situation. This proposal is subject to the PAYGO requirements of the OBRA. The PAYGO effect will be an increase in outlays of $1.8 billion in FY 2000, with a corresponding decrease in FY 2001.

H.R. 3816 – SERVICE CONNECTION FOR STROKE AND HEART ATTACK IN CASE OF INDIVIDUALS PERFORMING INACTIVE DUTY TRAINING

H.R. 3816 would amend current law "to provide that a stroke or heart attack that is incurred or aggravated by a member of a reserve component in the performance of duty while performing inactive duty training shall be considered to be service-connected for purposes of benefits under laws administered by the Secretary of Veterans Affairs." VA supports the principle embodied in

H.R. 3816, although we believe that certain changes to the bill as drafted would be beneficial.

Specifically, H.R. 3816 would amend section 101(24) of title 38, United States Code, by adding at the end the following new sentence: "For purposes of this paragraph, a cardiovascular accident or an acute myocardial infarction incurred in performance of duty during a period of inactive duty training shall be considered to be an injury incurred or aggravated in line of duty." We note that the bill uses the term "cardiovascular accident," apparently referring to stroke. However, we believe the intended medical term is "cerebrovascular accident."

In general, the performance of inactive duty training does not qualify an individual as a "veteran" for VA purposes. Under 38 U.S.C. § 101(2), veteran status is conditioned on performance of "active military, naval, or air service." Currently, section 101(24) defines the term "active military, naval, or air service" to include active duty, any period of active duty for training during which the individual concerned was disabled or died from a disease or injury incurred or aggravated in line of duty, and any period of inactive duty training during which the individual concerned was disabled or died from an injury incurred or aggravated in line of duty. Thus, unless an individual suffers disability or death as the result of an injury incurred or aggravated during inactive duty training, the individual is not considered a veteran on the basis of participation in such training.

For purposes of laws administered by VA, the term "injury" has been interpreted as not including non-traumatic incurrence or aggravation of disease processes or manifestations thereof, including myocardial infarction (heart attack). VAOPGCPREC 86-90. This interpretation was upheld by the U.S. Court of Veterans Appeals and affirmed by the U.S. Court of Appeals for the Federal Circuit in Brooks v. Brown, 5 Vet. App. 484 (1993), aff’d, 26 F.3d 141 (Fed. Cir. 1994) (table). Neither a heart attack nor a stroke results from an injury. In most cases, there is an underlying disease process at work. We believe the existing distinction Congress has made in this section between injury and disease is a valid and workable one and should not be disturbed.

Nonetheless, we recognize that certain non-traumatic physiological events or episodes during training, such as the strain of unaccustomed exertion, may result in disability or death through heart attack or stroke. Accordingly, we recommend that section 101(24) be amended to provide that any period of inactive duty training during which an individual was disabled or died from an injury incurred or aggravated in line of duty, or from a cerebrovascular accident or an acute myocardial infarction incurred as a result of duty, will be considered active military, naval, or air service.

Finally, the bill applies only to a heart attack or stroke incurred "in performance of duty." We note that this provision may be interpreted as barring service connection pursuant to 38 U.S.C. § 106(d) where an individual suffers a heart attack or stroke while proceeding to or coming home from inactive duty training. We do not believe eligibility should be so limited.

H.R. 3816 is subject to the PAYGO requirements of the OBRA, and, if enacted, it would increase direct spending. Our preliminary cost estimate for

H.R. 3816 would result in benefit costs of $111,000 in FY 2001 and a total benefit cost of $1.1 million for FYs 2001-2005.

H.R. 3998 – SPECIAL MONTHLY COMPENSATION FOR SERVICE-CONNECTED LOSS OF ONE OR BOTH BREASTS DUE TO MASTECTOMY

H.R. 3998 would authorize special monthly compensation under 38 U.S.C. § 1114(k) for the service-connected loss of one or both breasts due to a radical mastectomy or modified radical mastectomy. VA supports this bill.

Section 1114(k) of title 38, United States Code, authorizes a special rate of compensation (the "k" rate) if a veteran, as the result of service-connected disability, has suffered the anatomical loss or loss of use of one or more creative organs, or one foot, or one hand, or both buttocks, or blindness of one eye, having only light perception, or has suffered complete organic aphonia with constant inability to communicate by speech, or deafness of both ears, having absence of air and bone conduction. Under current section 1114(k), a monthly award of $76 is payable, generally, for each such loss or loss of use. This special monthly compensation is payable in addition to the compensation payable by reason of ratings assigned under the rating schedule.

Under the current schedule for rating disabilities, the disability suffered following surgical removal of one breast by radical mastectomy is assigned a 50% disability rating. (38 C.F.R. § 4.116). The resulting disability following removal of both breasts by radical mastectomy is currently assigned an 80% disability rating. The loss of one breast by modified radical mastectomy is rated 40% disabling, and the removal of both breasts by modified radical mastectomy is rated 60% disabling. A veteran is also compensated for at least six months at the total-disability level following the cessation of any surgical procedure to treat breast cancer.

Special monthly compensation is currently authorized for certain anatomical losses or losses of use for which the rating schedule, which is based solely on impairment of earning capacity, is considered inadequate for compensation purposes. The statute recognizes that the loss of a hand or foot, for example, or loss of a creative organ, involves loss of bodily integrity which may negatively affect self-image and precipitate considerable emotional distress.

The service-connected radical or modified-radical mastectomies covered by H.R. 3998 involve loss of bodily integrity and associated emotional trauma to a degree that is at least comparable to the removal of a single testicle, for example, for which special monthly compensation is currently payable regardless of its effect on a veteran’s procreative ability and regardless of whether the veteran is still of procreative age. As a matter of simple equity, these mastectomies warrant equal compensation for the veterans who suffer them.

H.R. 3998 is subject to the PAYGO requirement of the OBRA and, if enacted, would increase direct spending. However, our preliminary estimate indicates that the bill would result in only insignificant costs in any fiscal year.

H.R. 1020 – PRESUMPTIVE SERVICE CONNECTION FOR HEPATITIS C

H.R. 1020 would establish a presumption of service connection for the occurrence of hepatitis C in certain veterans. VA opposes this bill.

H.R. 1020 would add a new section 1119 to title 38, United States Code, providing a presumption of service connection for certain veterans who served during a period of war and who suffer from hepatitis C, notwithstanding that there is no record of such disease during the period of active military, naval, or air service. The presumption would apply where a veteran experienced one of the following during service: 1) transfusion of blood or blood products before

December 31, 1992; (2) blood exposure on or through skin or mucous membrane; (3) hemodialysis; (4) tattoo or body piercing or acupuncture;

(5) unexplained liver disease; (6) unexplained abnormal liver function tests; or

(7) working in a health care occupation.

Hepatitis C virus (HCV) infection was first recognized in the 1970s, when the majority of transfusion-associated infections were found to be unrelated to hepatitis A and B, the two hepatitis viruses recognized at the time. The infection now recognized as hepatitis C was often categorized as "non-A, non-B hepatitis," a term used for any type of hepatitis that could not be identified as viral hepatitis A or B. In 1989, the identification of the distinct virus causing HCV infection was reported. A first-generation screening test to detect antibody to HCV in blood became available in 1990, and a more accurate, second-generation, test became available in 1992; during those years, effective screening of donated blood for HCV antibody was instituted. Nearly 4 million Americans have been infected with HCV; an estimated 3 million remain chronically infected, and approximately 36,000 new infections occur annually. Most persons who become newly infected with HCV are unaware of their infection because more than 80% will have no discernable symptoms. HCV is now known to be responsible for 8,000 to 10,000 deaths annually, and this number could triple in the next 10 to 20 years. The mortality rate of HCV may be reduced by treatment; however, this is as yet unproven. HCV infection is becoming a leading cause of cirrhosis, liver failure, and hepatocellular carcinoma.

VA is very concerned about HCV because prevalence in the veteran population cared for by VA is likely higher than in the civilian population. On March 17, 1999, VA conducted the largest single HCV surveillance study in the United States, examining the blood of 26,000 veteran patients who agreed to be tested for HCV. Based on the results of this study and others, VA estimates that 6.6 percent of veterans receiving VA-provided health care are antibody positive, which is more than one and one-half times the national rate in adult men as reported by the Centers for Disease Control and Prevention (CDC).

With regard to H.R. 1020, we note initially that the bill provides, "[f]or

purposes of section 1110 of this title," a presumption of service connection for hepatitis C would be established if a veteran experienced one of the enumerated risk factors during active military, naval, or air service. As a result of the reference to 38 U.S.C. § 1110, which governs entitlement to wartime disability

compensation only, we believe that the presumption would only apply to veterans who served during a period of war, which may not have been intended.

We recognize that, because there is such a prolonged period between acute HCV infection, which is typically asymptomatic or results in mild illness, and the development of symptomatic liver disease, it is difficult, in the absence of a medical history, to determine the causative factor for HCV. However, current research establishes that the highest incidence of HCV infections occurs in persons who would not be eligible for VA compensation. Pursuant to 38 U.S.C. §§ 1110 and 1131, VA is prohibited from paying compensation if a disability is a result of a veteran’s abuse of drugs. See also 38 U.S.C. § 105(a). A May 1999 CDC fact sheet, "Hepatitis C Virus and Disease," reports that injecting drug use accounts for about 60 percent of HCV cases. According to an October 16, 1998, CDC report, "Recommendations for Prevention and Control of Hepatitis C Virus (HCV) Infection and HCV-Related Chronic Disease," 47 Morbidity and Mortality Weekly Report 5 (Oct. 16, 1998) (hereinafter "CDC Report"), injection of drugs currently accounts for a substantial number of HCV transmissions and may have accounted for a substantial proportion of HCV infections in the past. After 5 years of injecting drugs, as many as 90 percent of users are infected with HCV. (CDC Report at 6.) Based upon these data, we believe that many claimants would not be entitled to compensation based on the presumption of service connection to be established by new section 1119, because their HCV was caused by drug abuse.

VA is also opposed to enactment of H.R. 1020 because the CDC report indicates there is a very low risk of infection associated with several of the risk factors included in proposed new section 1119. New section 1119(2) would provide a presumption of service connection if a veteran who has HCV was exposed to blood "on or through skin or mucous membrane." New section 1119(7) would establish a presumption based on work in a health-care occupation. HCV is transmitted primarily through large or repeated direct percutaneous, i.e., through the skin, exposures to blood. (CDC Report at 1.) The prevalence of HCV infection among health-care workers, including orthopedic, general, and oral surgeons, who are at risk for being infected as a result of exposure to blood, is no greater than that among the general population. (CDC Report at 6.) In addition, the CDC reports that there are no incidence studies documenting transmission associated with mucous membrane or nonintact skin exposures, although transmission of HCV from blood splashes to the conjunctiva (membrane lining the eyelid) have been described. (CDC Report at 7.) Thus, it appears likely that HCV infection would only occur if blood permeated a veteran’s skin, such as through an open wound or skin puncture. Based upon these CDC data, we believe that the risk of HCV infection for veterans based upon exposure to blood on or through skin or mucous membrane is so small as to make a presumption on this basis unnecessary.

We also believe that a presumption is not warranted based upon occurrence of three of the other risk factors identified in the new section 1119. Section 1119(4) would provide a presumption of service connection for veterans

infected with HCV who have experienced tattooing, body piercing, or acupuncture. According to the CDC, there are no studies in the United States demonstrating that persons with a history of tattooing or body piercing are at increased risk for HCV infection based on these exposures alone. (CDC Report at 7.) Further, of patients with acute hepatitis C identified in CDC’s surveillance system during the past 15 years and who denied a history of injection drug use or other risk factors for infection, only 1% reported a history of tattooing or ear piercing, and none reported a history of acupuncture. (CDC Report at 7.) Thus, a presumption based upon a veteran’s exposure to these risk factors is not warranted.

Section 1119(5) and (6) would provide a presumption of service connection for hepatitis C based on unexplained liver disease or unexplained abnormal liver function tests. Since testing became available for HCV, we are unaware of any evidence showing that unexplained liver disease diagnosed during service or unexplained abnormal liver function tests performed during service would indicate a veteran had an HCV infection which was not diagnosed while the veteran was on active service. We believe that serology testing is routinely performed when a service member is diagnosed with unexplained liver disease or has abnormal liver function tests and that that testing would reveal at the time whether the service member is infected with HCV. As a result, a presumption of service connection for unexplained liver disease or abnormal liver function tests would not be warranted.

In sum, advances in testing over the past ten years make clear that, for patients who have abnormal liver function tests, but whose serologic tests are negative for hepatitis A and heptitis B, there are many causes for such abnormal tests other than HCV. These non-viral causes include liver toxins (e.g., alcohol, prescription and non-prescription drugs), non-viral infections (e.g., malaria, rickettsia), environmental factors (e.g., heatstroke), and malignancies.

By our preliminary estimates, enactment of this legislation would result in PAYGO costs of $32.5 million in the first fiscal year and $739 million over the five-year period.

ADJUDICATION OF CLAIMS FOR SERVICE CONNECTION OF HEPATITIS C

Mr. Chairman, you also requested that we address the issue of adjudication of claims for service-connected benefits for veterans diagnosed with hepatitis C. I wish to explain VA’s procedures for adjudicating claims for service connection for hepatitis C and related conditions and to discuss the information we have given to our field personnel on this issue.

To ensure that claims for service connection for hepatitis C were being appropriately addressed, we issued an instructional letter to our field stations in November 1998 on the subject of rating claims for hepatitis C. This letter explained the various known types of hepatitis, the symptoms and complications of each type, and the serologic tests used to diagnose them. We emphasized the fact that chronic hepatitis caused by the hepatitis B and C viruses (HBV and HCV) could persist in a latent form and return years later, having progressed slowly without symptoms or physical signs. The latent nature of the disease is the particular problem associated with rating such cases. We discussed the major risk factors for hepatitis C because it is those factors that our rating personnel would need to look for upon review of service medical records in each case. We also outlined the major related rating issues concerning claims for service connection for hepatitis C, including how such claims are determined to be well grounded and how to track the incidence of such claims for statistical purposes.

With respect to establishing a well-grounded or plausible claim for service connection for hepatitis C, we reminded our rating personnel of the courts’ holding that there must be competent evidence of a current medical condition, in-service incurrence, and a link between the two. For purposes of establishing a well-grounded claim for service connection for hepatitis C or a related liver disease, the medical evidence must show a current hepatitis C infection. There must also be medical evidence of a hepatitis infection in service, or, because an infection may go undetected, lay or medical evidence of exposure to a known risk factor for hepatitis in service. The known risk factors for hepatitis B and C infections were listed as these: intravenous drug use; blood transfusions; accidental exposure in healthcare workers; hemodialysis; intranasal cocaine use; high-risk sexual activity; direct percutaneous exposure such as through tattoos, body piercing, or acupuncture with non-sterile needles; and shared toothbrushes or razor blades. Because the quality and quantity of the evidence required to meet the statutory burden of a claimant to file a well-grounded claim will, by necessity, depend upon the circumstances, we consider a claim to be plausible or well grounded for service connection for hepatitis C if there is evidence of the veteran’s exposure to one of the known risk factors which could later be substantiated, such as a blood transfusion, hemodialysis, or working in a healthcare profession, together with evidence of currently diagnosed hepatitis C. Service connection cannot be established for hepatitis C due to injecting drug use or intranasal cocaine use because, by statute, disabilities resulting from drug abuse are not considered to have been incurred in line of duty.

However, simply because the evidence shows that a claim for service connection for hepatitis C or a related condition is plausible does not mean that the evidence at that stage establishes entitlement to benefits. Rating personnel were instructed in the November 1998 letter that, after they determine that a claim is plausible, they are to develop and evaluate all pertinent evidence, including evidence of treatment after service and evidence of other possible risk factors. Once all this evidence is obtained, it is to be reviewed by a physician to determine the likelihood that the veteran’s currently diagnosed hepatitis C or related liver condition is attributable to the hepatitis infection in service. We developed a new C&P examination worksheet to be used for medical examiners to more easily elicit information which would be helpful to the rating specialists in adjudicating claims for service connection for hepatitis C and related conditions.

Problems inherent in adjudicating claims for service connection for hepatitis C and related conditions

There are potential complications inherent in rating these claims caused by the possible absence in veterans’ service medical records of definitive diagnoses of hepatitis infections, or, where a diagnosis was made, the absence of a designation as to which type of hepatitis was involved. In addition, medical or service records could show evidence of multiple risk factors, or none at all. In cases where the veteran claims service connection for hepatitis C or related conditions many years after service, complete development is necessary to evaluate intervening causes and other possible risk factors unrelated to service.

Our letter to field personnel in November 1998 stressed that adjudication of these claims requires a medical review of the entire record, with the examiner giving careful consideration to the known risk exposures and providing us with a medical opinion as to whether any current hepatic condition is at least as likely as not related to those known factors or any identified hepatitis infection in service. Subsequently, as a further safeguard, the rating specialist carefully reviews the record, including the opinions rendered by any medical reviewers, and determines if the evidence has been fully and fairly developed. If further evidence is required to resolve conflicting or ambiguous medical evidence, then further evidence is sought. Any rating decision must fully explain how the evidence was weighed in arriving at a determination on whether the condition is service connected.

Review of claims decisions

In 1999 we reviewed claims in which service connection for hepatitis had been an issue. As a result, we issued further instruction on rating these cases in September 1999, reiterating the need to differentiate between the types of hepatitis, with an emphasis on understanding the serologic tests which confirm a hepatitis infection. We also emphasized the need to obtain a medical opinion on whether a relationship exists between any confirmed episodes of hepatitis in service or any identified risk factors, and any currently diagnosed hepatitis.

Important Rating Considerations

In order to establish service connection for hepatitis C infection, there must be a definitive current diagnosis of HCV infection by serologic tests. The type of hepatitis must be specified by medical diagnosis and identified in the rating decision itself. Unless there is evidence of hepatitis C in service (which could not be reliably determined until 1992), there must be a medical opinion assessing the risk factors and giving an opinion as to the most likely risk factor in the veteran. The C&P examination worksheet developed for this purpose gives explicit instructions to the examiner related to diagnosing HCV and assessing its likely etiology. With service prior to 1992, any hepatitis or jaundice that occurred in service may be uncertain as to etiology. Neither hepatitis A, B, nor C had been identified at the start of the Vietnam War. Thus, we do not see these viruses identified specifically in service medical records from that period. However, the examiner does review the service medical records for evidence of occurrence of any risk factors in service and notes any general diagnoses of hepatitis, assesses any in-service illness, and correlates these with the current laboratory and clinical findings.

In cases where a veteran has established service connection for HCV, his or her condition is evaluated using the criteria currently contained in the Schedule for Rating Disabilities. These criteria are applied to assign an evaluation for symptoms manifested during active treatment for hepatitis C as well as for any related liver conditions that result from the infection. However, only criteria for evaluating hepatitis A are currently contained in the rating schedule. Hepatitis A is the first type of viral hepatitis that was identified and is an acute disease that almost never results in chronic infection. Therefore, hepatitis C claims are rated by using an analogous code as provided in

38 C.F.R. § 4.20. This permits the assignment of an evaluation under criteria for a closely related disease or injury where the functions affected as well as the anatomy and symptoms are closely analogous to the condition diagnosed. In the case of complications of hepatitis C, for instance, an evaluation can be assigned under the diagnostic code for cirrhosis of the liver, or malignant new growths of the digestive system, as appropriate.

The evidence concerning the number of people who can continue to work while undergoing treatment for hepatitis C is currently incomplete; there are, however, ongoing clinical trials that should provide more information about effects of treatment on activities of daily living. Meanwhile, we assess each veteran individually and do not limit the evaluation assigned to an individual veteran based only on the current rating schedule criteria for infectious hepatitis. We separately evaluate diagnosed secondary conditions, such as major depression or seizures, that develop during treatment.

Conclusion

Mr. Chairman, because of the prevalence of hepatitis C in the veteran community, we are committed to thoroughly developing claims for service connection for hepatitis C and its complications. To facilitate the fair adjudication of these claims, we have undertaken education of our rating specialists on the different types of hepatitis and the keys to properly rating these claims. We are in the process of proposing revisions to our rating schedule that would provide a separate code for hepatitis C and new, more appropriate criteria for evaluating the condition. The revisions would also ensure that the rating schedule uses current medical terminology and unambiguous criteria and that it reflects current medical advances. We believe that proceeding proactively is the best way to ensure that veterans who contracted hepatitis in service are promptly and adequately compensated.

Mr. Chairman, this concludes my statement.

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