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Submission For The Record of Ronald B. Abrams, National Veterans Legal Services Program, Joint Executive Director

Mr. Chairman and Members of the Committee:

I am pleased to have the opportunity to submit this testimony on behalf of the National Veterans Legal Services Program (NVLSP).  NVLSP is an independent, non-profit veterans service organization that has been assisting veterans and their advocates for twenty-seven years. We publish numerous advocacy materials, recruit and train volunteer attorneys, train service officers from veterans service organizations, such as The American Legion and Military Order of the Purple Heart, in veterans benefits law, and conduct quality reviews of the VA regional offices on behalf of The American Legion. NVLSP also represents veterans and their families in claims for veterans benefits before VA, the U.S. Court of Appeals for Veterans Claims (CAVC), and other federal courts. 

My testimony today will focus on HR 3047 which, in Section 2 would change when VA regional offices (VAROs) can claim work credit. Also, I would like to comment on Section 4 of HR 3047 which mandates that, in the event of the veteran’s death, the person who would be entitled to accrued benefits would be treated as the claimant.

ESTABLISHMENT OF A WORK CREDIT SYSTEM FOR VA REGIONAL OFFICES

NVLSP supports this bill because the current VA work credit system prevents the fair adjudication of many claims for VA benefits. The current VA work credit system is an abomination that needs to be overhauled because the current system rewards VA managers and adjudicators who claim multiple and quick work credit by not complying with the statutory duties to assist claimants obtain evidence that would substantiate their claims and notify claimants of what evidence would substantiate their claims.[1]

Background

No matter how much the average VA employee tries to help the client population, the VA decision-making culture, created by the VA work measurement system, prevents many VA adjudicators from doing a good job. The VA has created a work measurement system for deciding critically important claims that is driven by weighty incentives to decide claims quickly.  How the VA measures its work and evaluates the performance of its employees has had a major impact on the adjudication of claims for veterans benefits. 

Each year, after a complicated process involving the executive branch and Congress, the VA is given its budget.  The budget can be defined as the resources available to the Secretary of Veterans Affairs to be used to accomplish the mission of the VA.  Managers at different levels within the VA are then given their allocation from the overall VA budget.  This allocation is determined by the workload and performance of the various VA components. For example, the money budgeted to a VARO determines how many workers can be hired or fired, how equipment is maintained, and what new equipment can be purchased. 

Claims received in VARO are described as “pending issues.” These claims are assigned an “end product code,” alternatively described by the VA as a unit of work. When final action is taken on a pending claim, or pending issue, the regional office (and eventually the VA) receives a credit.[2]

End products are assigned values based on the average number of work hours it takes an employee or group of employees to complete all action necessary for that type of claim. Each end product code has a different value.  For example, VA managers receive more credit for work completed on an original claim than they do for adjusting the income of a current pension beneficiary.  No matter how much work the VARO does on an individual claim, however, it receives as credit only the value that is provided for the end product code assigned to that particular type of pending claim.  Therefore, VA managers receive the same credit whether or not the claim is granted or denied or whether the claim takes the VARO one day or two years to decide.

VA manuals describe the end product system as a “management tool” and indicate that its measure should not be used to evaluate individual performance. As is the case with many management information systems, however, the measurement system tends to drive what and whom it measures, rather than the converse. VA managers are evaluated by how many end products they produce, how quickly they can take credit for end products, how many employees they need to produce these end products, and lastly, the quality of the work in the office they manage.  Because it is in the best interest of the VA managers to complete as many cases as quickly as they can,  the interests of VA managers in many cases stands in opposition to the interests of claimants for VA benefits.

Responsibilities of VA managers that protect the fairness of the adjudicatory process--such as “control” of claims, supervisory review of unnecessarily delayed claims, thorough development of the evidence needed to decide a claim properly, recognition of all of the issues involved, provision of adequate notice, documentation that notice was given, and careful quality review -- all adversely affect the productivity and timeliness statistics (that is, how many decisions on claims are made final within a particular period of time) for the VA manager. Consequently, proper attention by VA managers to their legal obligations very often adversely affects the statistics upon which their performance is rated. 

The Impact of Judicial Review

The VA claims processing (or claims adjudication) system has been exposed by judicial review. To say there is a crisis in VA claims adjudication is an understatement. Statistics from the Board of Veterans’ Appeals (BVA) and the U.S. Court of Appeals for Veterans Claims (CAVC) show that nationally, for FY 2007, over 56 percent of all appeals decided by the BVA were reversed or remanded and over 63 percent of CAVC decisions on the merits were reversed, or remanded. In fact, some VAROs were even worse than the national average. Over 60 percent of the appeals from the New York RO and over 62 percent of the appeals from the St. Petersburg Florida RO were reversed or remanded by the BVA.

Based on the experience of NVLSP (over ten years of NVLSP quality reviews of  approximately 40 different VAROs for The American Legion combined with extensive NVLSP representation before the CAVC), most of the most egregious VA errors are a result of premature adjudications. For example, many errors identified by the Legion/NVLSP quality review teams reveal that VA adjudicators failed to even try to obtain evidence that could substantiate the claim, and incorrectly accepted and prematurely denied claims based on inadequate evidence (especially inadequate VA medical examinations).[3]

I want to emphasize that most premature VA adjudications are caused by ROs seeking work credit.  If the claimant should appeal, the RO can earn another work credit for work to process the appeal. Here is an example of how this system can be manipulated. Suppose:

  • In January 2005, a veteran files a claim for service connection for post traumatic stress disorder (PTSD). The veteran indicates he has symptoms of PTSD and alleges that he engaged in combat during service. (In order to obtain service connection for PTSD the evidence must show that the veteran suffers from PTSD, that he or she experienced a stressor (a traumatic event) in service, and that the stressor is linked by a medical expert to the stressful event.)[4]
  • Before the RO verifies that the veteran engaged in combat, in an effort to obtain quick work credit, the RO schedules a VA examination (VAE).
  • The examination is promptly conducted and the VA medical examiner, although noting symptoms of PTSD, refuses to diagnose PTSD because the veteran’s alleged stressor is not verified by the evidence of record.
  • The RO then denies the claim because the veteran does not have the claimed condition. An end product (work credit) is then taken by the RO in April 2005.
  • In the same month, the veteran is notified by the VA that his claim is denied because he does not have PTSD. The veteran, in an attempt to prove his claim, hires a private psychiatrist who accepts the veteran’s allegation regarding the stressor and diagnoses PTSD. The veteran, after paying the doctor, then submits this private medical opinion to the RO (within the one-year appellate period).
  • Upon receipt of the new evidence the RO sets up a new end product but promptly denies the claim because the RO finds there is insufficient evidence of the alleged stressor. The RO then informs the veteran of its decision and takes credit for a second end product in July 2005.
  • Within one year of the original denial, in December 2005, the veteran submits several “buddy statements” (lay statements) that support the conclusion that he engaged in combat. The RO then erroneously denies the claim because in the opinion of the RO, the first VA examination was more probative than the private medical opinion and therefore the veteran does not suffer from PTSD. The RO takes a third end product in March 2006.
  • In March 2006, the veteran submits a notice of disagreement. The RO establishes another end product and when the case is reviewed by a Decision Review Officer (a VA hearing officer) a new VA examination is ordered. The DRO informs the VA examiner to accept the fact that the veteran engaged in combat during service.  The VA examiner then concludes that the current PTSD is linked to the combat the veteran experienced in service. This process takes quite a while.
  • The DRO, in January 2007, grants service connection for PTSD retroactive to January 2005. A fourth end product is then claimed by the RO.

The VARO was really entitled to only one end product for this work. But, because of premature adjudications and flat-out errors in judgment by the RO, the RO was able to claim four work credits. The RO was also able to show that these four actions were completed in a faster time than what it really took to adjudicate this claim. From the veteran’s point of view it has taken the VA 24 months to adjudicate his claim. However, the RO is not unhappy. The RO, during this two year period, has earned four end products (work credits). The end products claimed by the RO also show that it took only 6 months on average (instead of the 24 months it really took for the claim to be adjudicated) to adjudicate these claims. Therefore, the VA manager gets to claim three unearned work credits and to show an erroneously low time period to adjudicate these claims. That would help the manager earn a promotion and a bonus for such “productive” work.

HR 3047, Section 2 solves the above problem. The bill would prohibit the RO from claiming end product credit until the appellate period has expired. In the above case, the RO would not have been able to claim work credit until the appellate period expired. Because the veteran kept submitting evidence within the appellate period and because the veteran filed an appeal, the three extra end products could not be taken by the RO. The RO would have an incentive to adjudicate the claim correctly in the first place. This is something we should all want. This bill would prevent unfair, premature RO decisions.

Fixing the VA work credit system is a topic that is near and dear to my heart. I have been involved in various aspects of veterans law for over 30 years. My experience tells me that unless the system is corrected most attempts to improve VA claims adjudication will not be successful because the driving force in VA adjudication will continue to be claiming quick work credit.  This bill does not tweak the current system, it forces the VA to create new systems to manage its workload that will encourage adjudicators to properly and fairly deal with claimants seeking VA benefits.

HR 3047 -- Section 4, Treatment of the Beneficiary of the Veteran’s Accrued Benefits as the Claimant for Purposes of Incomplete Claims Upon the Death of the Veteran

NVLSP supports the intent of this bill. We believe the authors tried to cure the situation where a claimant for VA benefits dies before the final resolution of that claim and persons seeking accrued benefits are forced to go back and start at the beginning of the adjudication process. That is unfair and Congress should act to stop this from happening.

However, because the bill limits its impact to situations where a claimant dies before completing the submission of a claim the bill does not go as far as we hoped. The law should be amended so that when a claimant who has submitted a claim dies before the final resolution of that claim, the person who would receive accrued benefits could substitute for the veteran.

Current Law

Under the current law, if an individual who has filed a claim for VA benefits dies while the claim is pending before a VARO, the BVA, or a reviewing court, the pending claim dies as well.  This is true for claims for disability compensation, pension, dependency and indemnity compensation (DIC), and death pension.  See Richard v. West, 161 F.3d 719 (Fed. Cir. 1998); Zevalkink v. Brown, 102 F.3d 1236 (Fed. Cir. 1996); Landicho v. Brown, 7 Vet. App. 42 (1994).  A survivor may not step into the shoes of the deceased claimant to continue or to appeal the claim—no matter how long the claim has been pending in the VA claims adjudication process.

  1. The Route Surviving Family Members Have to Travel to Obtain Benefits Based on the Deceased Claimant’s Claim

As a logical matter, some benefit claims that do not result in a final decision because the claimant dies before a final decision could be issued would result in a grant of benefits if the claimant had lived.  Congress has provided a limited opportunity for certain specific surviving family members to obtain the benefits the deceased claimant had been seeking at the time of death.  This opportunity for accrued benefits is quite limited however, as I will describe below.

  1. Only Certain Family Members May Apply for Accrued Benefits

In order to obtain the benefits that the deceased claimant was seeking at the time of death, a brand new claim for benefits, called accrued benefits, must be filed.  See 38 U.S.C. § 5121, 38 C.F.R. § 3.1000.  Only certain surviving family members may pursue a claim for accrued benefits.  An individual satisfying the definition of a surviving spouse may apply for accrued benefits.  If there is no surviving spouse, a surviving child may qualify as a claimant, but only if he or she is: (a) unmarried and under the age of 18; or (b) under the age of 23, unmarried, and enrolled in an institution of higher education.  If there is no surviving spouse or qualifying surviving child, a surviving parent may apply for accrued benefits but only if he or she was financially dependent on the claimant at the time of the claimant’s death.  No brothers or sisters or other family members may apply for accrued benefits.  See 38 U.S.C. §§ 101, 5121; 38 C.F.R. § 3.1000(d).[5] 

  1. Time Limits

The application for benefits must be filed within one year of the date of the claimant’s death.  VA regulations do allow for extensions of time to file outside of the one-year period, but only if the survivor is able to demonstrate “good cause”.  38 C.F.R. § 3.109(b).  Thus, the VA may allow for an extension of time, but is not required to do so.

  1. No New Evidence Can Be Submitted

The survivor also cannot submit new evidence to show that the deceased claimant is entitled to the benefits sought.  Accrued benefits determinations can only be “based on evidence in the file at date of death.” 38 U.S.C. § 5121.  The VA regulations provide that “evidence in the file” means evidence within the VA’s constructive possession, on or before the date of death, but that would only include evidence like existing service personnel records or existing VA medical records.  See 38 C.F.R. § 3.1000(a); 67 Fed. Reg. 65,707 (2002). [6]

  1. Limitations on the Types of Benefits that Qualify as Accrued Benefits

The opportunity for a qualified survivor to receive accrued benefits under section 5121 is restricted to pending claims of the deceased for “periodic monetary benefits.”  To be a claim for “periodic monetary benefits”, the benefits must be the type that are “recurring at fixed intervals”, such as disability compensation.

Many claims are for benefits that are not periodic monetary benefits.  For example, in Pappalardo v. Brown, 6 Vet.App. 63 (1993), the Court held that a claim for a one-time payment for specially adapted housing reimbursement assistance under 38 U.S.C. Chapter 21 did not qualify as a claim for periodic monetary benefits for purposes of Section 5121.  This is so even though the family had already incurred the expense of remodeling the home in accordance with standards approved by the Boston VARO to meet the needs of the veteran, who had lost the use of both lower extremities twenty years earlier due to service-connected post-encephalitic Parkinson’s disease, and who died while the housing assistance claim was pending.  Thus, an accrued benefits claim may only be granted if the deceased claimant would have been entitled to a benefit like monthly disability compensation or special monthly compensation benefits. 

  1. Limitations on the Amount of Benefits

The amount of accrued benefits available to a survivor may also be limited.  For veterans who died prior to December 16, 2003 (the date of enactment of the Veterans Benefits Act of 2003), family members cannot receive more than two years’ worth of accrued benefits, even if, for example, the survivor is able to prove that the veteran was entitled to ten years worth of benefits.  The enactment of the VBA of 2003 removed the two-year cap, but only when the claimant with a pending claim died on or after December 16, 2003.  Pub. L. No. 108-183, § 104, 117 Stat. 2651 (Dec. 16, 2003).[7]

  1. The Recent Court Decision Carving Out an Exception to the Harsh Rules that Currently Exist

Probably the harshest part of the rules that apply when a claimant with a pending claim dies before a final decision is rendered is that the survivor must start the claim all over again at a VARO, regardless of how far the pending claim had proceeded in the adjudication process.  Even if the pending claim had made it up the chain to a reviewing court, which often takes many years, the survivor, who may be elderly or infirm, must still file a new claim at the VARO level and “go to the back of the line.” The inability of the survivor to substitute and pick up where the claimant left off can add years to the claims process and add to the burden of the agency, which must now address an entirely new claim where there had already been development of another claim raised by the deceased.

Frustrated survivors have long sought to continue to prosecute a deceased claimant’s disability compensation claim at the Court level.  See, e.g., Zevalkink, supra; Landicho, supra at 47.  In Padgett v. Nicholson, 473 F.3d 1364 (Fed.Cir. 2007), the Federal Circuit carved out a very limited exception to the harsh rule that a claim dies with the claimant.   In a case like Mr. Padgett’s, in which: (a) the veteran had appealed his claim all the way to the CAVC; (b) the CAVC issued its decision before it became aware that the veteran had died; and (c) the death occurred after all of the legal briefs had been filed with the CAVC so that there was nothing left to do but to issue a decision; then (d) the CAVC could keep its decision on the books by making it effective retroactive to the date of the veteran’s death, and allow the surviving spouse to substitute for the veteran in the appeal before the CAVC.

A recent VA General Counsel Opinion, VAOPGCPREC 2-2007, however, held that the decision in Padgett would have no effect on an appeal pending before the BVA when a claimant dies.  The General Counsel held that 38 C.F.R. § 20.1302 would require the Board to dismiss an appeal pending before the Board when the claimant dies-and survivors of a deceased claimant seeking accrued benefits at the Board level will still have to go to the “back of the line”.

Thank you for holding such an important hearing.


[1] 38 U.S.C. §§ 5103A, 5103(a).

[2] In general, see VA Manual M21-4, Manpower Control and Utilization in Adjudication Divisions.

[3] Many of the pro bono attorneys NVLSP trains and mentors ask why the VA would adjudicate claims when it is obvious that additional development of evidence is required.

[4] 38 C.F.R. § 3.304(f).

[5] There is one narrow exception:  Accrued benefits may be paid to reimburse any individual who bore the expense of the last sickness or burial—but only to the extent of the actual expenses incurred.

[6] The accrued benefits statute does provide that if a survivor’s application “is incomplete at the time it is originally submitted, the Secretary shall notify the claimant of the evidence necessary to complete the application.”  38 C.F.R. § 3.1000(c)(1)  However, this “evidence necessary to complete the application for accrued benefits” is information necessary to establish that the survivor is within the category of eligible survivors and circumstances exist that make the survivor the specific person entitled to the accrued benefits.  That is to say, materials including the death certificate of the deceased claimant, marriage certificates demonstrating the status of an individual as a surviving spouse, birth certificates demonstrating the status of an individual as a child, or documentation of enrollment in studies at an educational institution are the only types of additional evidence that may be introduced.  67 Fed. Reg. 65,707 (2002).

[7] For deaths occurring on or after December 16, 2003, successful accrued benefits claimants are now entitled to the entire amount of benefits that would have been paid had death not occurred.