Today we are here to examine the VA’s claims processing system and its attendant disability claims backlog. 

There are many areas to explore when trying to determine why the disability claims backlog has reached the point of unmanageability and why this is the second time in a seven year time period that we’ve reached this crisis point.

From 2002-2007, the disability claims backlog has risen from about 250,000 to nearly 650,000.  During the same period, the VBA consistently missed its performance targets on nearly all compensation and pension claims processing fronts.

These failures engender many questions about the complexity of the system VA has created and the model upon which it is built.  One of my leading questions concerns the effectiveness of the Claims Processing Improvement (CPI) model and its suitability to establish meaningful accountability parameters to eliminate the claims backlog and accurately process claims.  Thus far, none of VA’s own benchmarks have improved since its implementation, and I find this fact disturbing. 

Moreover, it seems as if the failure is not necessarily with the system itself but with the failed execution of the processes that are supposed to be reinforced with transparent and highly visible accountability measures to make it work. 

As outlined by the 2001 VA Claims Processing Taskforce Report, led by Daniel L.Cooper, now VA Under Secretary for Benefits Cooper, “accountability includes not only the proposition that a leader is responsible for the actions of the group but also is accountable for the results of those actions or inactions.  This single attribute is the most serious deficiency in the VBA organization.” At the time, Dan Cooper was referring to VBA’s then-failed claims processing system, SDN.  I think many of those who testify today will concur that these same observations could apply both to today’s VBA organization and its claims processing system. 

One can only wonder, where is the accountability in a work credit system whose only meaningful measure is productivity and where quality seems to be an afterthought.  One  where only about 2% of all claims are checked for quality and 1 in 10 claims is processed incorrectly. 

This error rate is unacceptable and indicates that VA needs to improve its training regimens to ensure uniformity across ROs and that highly qualified individuals are processing and adjudicating claims. 

Further, I ask why are bonuses consistently paid to managers at both the Regional and Central Offices while claims languish.  I want VA management to adopt this principle--be accountable for the backlog, don’t pay yourselves anything extra until the veterans are paid.

I know VA contends that all of its inventory is not backlogged, but try selling these semantics to veterans waiting 183 days and longer for decisions on their claims.  From the Committee’s standpoint based on the VA’s current performance, most of the disability claims in its inventory are eventually going to become a part of those claims pending longer than VA’s target of 145 days for claims processing.  Hence, part of the backlog. 

Moreover, the Committee does not consider an increase in processing times from 177 days in 2006 to 183 days in 2007, accompanied by an increase in VBA’s target performance days for processing claims from 125 days to 145 days during the same time period as progress and neither do our veterans.   VA should not conceive of moving its performance targets to compensate for its poor performance.  I am confounded by these actions and would like an explanation—so would our veterans.

I am encouraged by some of the numbers from VA’s FY 2009 Budget that indicates a 19% increase in VBA IT funding to support efforts to move to a paperless claims environment and increased funding for VETSNET.  While technological improvements alone won’t solve the backlog problem they are clearly critical to the solution. I am also anxious to see the results of IBM’s study of the VBA’s business processes involved with adjudicating a claim.  This type of review is long overdue.

I am also encouraged to see that VA is requesting more money to add 703 FTEs; yet I am aware that you have been unable to maximize the performance of the record number of 3100 FTEs that this Congress ensured that you receive during the last two funding cycles.

Let’s be very clear, this is not just a people problem and adding more people to a broken system cannot be the only answer to vanquishing the claims backlog and improving processing times. To date, this single-minded approach has proven unsuccessful at best.

I think the major faulty premise in this system is that the VA behaves as if it is only accountable to meet the numerical targets it sets and Congress tacitly approves. 

But, I want to reinforce that you are actually supposed to be accountable to the veteran who has borne the battle and to his widow and his orphan.  I believe we need to refocus and refine our Nation’s claims processing system to make it accountable to producing better outcomes for our veterans, their families and survivors.

I thank the witnesses on the first three panels for their thoughtful, solution-oriented testimonies. I hear the frustration in your statements and I look forward to working on ways to implement the workable solutions many of you offer.

I know that the backlog has taken on a life of its own.  However, it is not bigger than the collective will we devote to eliminating it and to honing a claims processing system that is veteran-focused, not process-focused. 

Lastly, I know that VA cannot be pleased with its current disability claims processing performance, and I look forward to hearing VBA’s strategic plan for addressing these serious concerns.  Secretary Peake has highlighted this issue as one of his top priorities and I hope the VA sees Congress as a friend and not a foe in helping to correct the shortfalls in its disability claims processing system.

I believe that just like the VHA experienced a revolutionary transformation, it is well-time to think of devoting the same type of resources into transforming the VBA.  It is time for a paradigm shift.  

Our veterans deserve the benefit of our collective resources to ensure that this process becomes a world-class, 21st century model that reflects their priceless sacrifice to our Nation.