Mr. Chairman and Members of the Subcommittee:

I am pleased to have this opportunity to appear before you on behalf of the Disabled American Veterans (DAV), to address the Department of Veterans Affairs’ (VA) disability claims backlog and claims processing system.

To improve administration of VA’s benefits programs, the DAV recommends Congress provide the Veterans Benefits Administration (VBA) with enough staffing to support a long-term strategy for improvement in claims processing and reduction of the claims backlog.  Through recommendations contained in VA’s budget submission and the Independent Budget for fiscal year (FY) 2009, to include recent appropriations, the VA may soon have the appropriate staffing, if utilized in conjunction with the recommendations herein, to finally begin to gain control of the growing claims backlog.  Therefore, this testimony primarily focuses on policy initiatives to manage the increase in new claims and reduce the out-of-control claims backlog.  In total, if Congress accepts our recommendations, the VA will be better positioned to serve all disabled veterans and their families.

Claims Backlog

Mr. Chairman, the claims’ backlog is unquestionably growing.  Rather than making headway and overcoming the protracted delays in the disposition of its claims, VA continues to lose ground on its claims backlog.  According to VA’s weekly workload report, as of January 26, 2008, there were 816,211 pending compensation and pension (C&P) claims, which include appeals.  Putting this number into perspective, at the end of 2004, 2005, 2006, and 2007, the total number of pending claims was 620,926; 680,432; 752,211; and 809,707 respectively.  Therefore, in the three years from the end of 2004 to the end of 2007, the total number of pending C&P claims rose by 188,781 for an average of 62,929 additional pending claims per year.  The VA’s pending claims rose by 6,504 just from the end of 2007 to January 26, 2008—less than one month.  At this rate, VA’s caseload will pass one million claims in three years.  With the wars in Iraq and Afghanistan still raging, together with the mass exodus from military service that usually occurs following cessation of combat operations, new and re-opened claims received by the VA are more likely to increase than decrease.  A caseload topping one million claims will truly be a demoralizing moment for America—the time to act is now. 

New claims per year continue to increase from one year to the next.  For example, VBA received 771,115 new rating claims in FY 2004 and 838,141 new claims in FY 2007, equaling an average increase of 16,756 additional claims per year.  During this same period, the VA received a total of 155,164 new beneficiaries that had never before been on VA rolls through the Benefits Delivery at Discharge (BDD) claims process.  At this rate[1], the average number of new BDD claims per year is 38,791 for a total of 232,746 new claims through the BDD process by the end of FY 2009.  These figures do not include service members filing claims through either the military’s physical disability evaluation systems, or those discharging via end-of-service contracts who then come to the VA on their own to files claims after discharge.

The significance of these new beneficiaries is that large portions of VA’s workload increase via new claims each year are re-opened claims rather than claims from veterans who have never filed for VA benefits.  Therefore, the increase in brand new beneficiaries into the system will inevitably increase further the number of re-opened claims, ultimately causing the total number of claims received by the VA each year to continue growing, contrary to VA’s FY 2008 budget estimate.  VA’s 2009 budget submission reveals the VA added 277,000 beneficiaries to its C&P rolls in 2007, which further proves this point.

The complexity of the workload has also continued to grow.  Veterans are claiming greater numbers of disabilities and the nature of disabilities such as post-traumatic stress disorder (PTSD), complex combat injuries, diabetes and related conditions, and environmental diseases are becoming increasingly more complex.  For example, the number of cases with eight or more disabilities increased 135 percent from 21,814 in 2000 to 51,260 in 2006.[2]  Such complex cases will only further slow down VBA’s claims process. 

We have maintained the VA should invest more in training adjudicators and that it should hold them accountable for higher standards of accuracy.  Nearly half of VBA adjudicators responding to survey questions from VA’s Office of Inspector General admitted that many claims are decided without adequate record development.  (The Board of Veterans’ Appeals (Board) and the Court of Appeals for Veterans Claims’ (Court’s) remand rate clearly demonstrate this.)  The Inspector General saw an incongruity between their objectives of making legally correct and factually substantiated decisions, with management objectives of maximizing output to meet production standards and reduce backlogs.  Nearly half of those surveyed reported that it is generally, or very difficult, to meet production standards without compromising quality.  Fifty-seven percent reported difficulty meeting production standards while attempting to ensure they have sufficient evidence for rating each case and thoroughly reviewing the evidence.  Most attributed the VA’s inability to make timely and high quality decisions to insufficient staff.  In addition, they indicated that adjudicator training had not been a high priority in VBA.

We have consistently stated that quality is the key to timeliness.  Timeliness follows from quality because omissions in record development, failure to afford due process, and erroneous decisions require duplicative work, which add to the load of an already overburdened system.  Quality is achieved with adequate resources to perform comprehensive and ongoing training, to devote sufficient time to each case, and to impose and enforce quality standards through effective quality assurance methods and accountability mechanisms.  The VA has simply not had the resources necessary to achieve the level of quality required to avoid unacceptable error rates, increased numbers of appeals, and the consequent overload that causes backlogs and delays in claims dispositions.  Having said that, we realize the FY 2009 budget submission provides a significant increase in staffing for VBA.

            However, additional resources are not the solitary answer to the claims backlog.  One of the most essential resources is experienced and knowledgeable personnel devoted to training.  More management devotion to training and quality requires a break from the status quo of production goals above all else.  In a 2005 report from VA’s Office of Inspector General, VBA employees were quoted as stating: “Although management wants to meet quality goals, they are much more concerned with quantity.  An RVSR is much more likely to be disciplined for failure to meet production standards than for failing to meet quality standards;” and that “there is a lot of pressure to make your production standard.  In fact, your performance standard centers around production and a lot of awards are based on it.  Those who don’t produce could miss out on individual bonuses, etc.” [3]

In addition to basing awards on production, the DAV strongly believes that quality should be awarded at least on parity with productions.  However, in order for this to occur, VBA must implement stronger accountability measures for quality assurance. 

VA’s quality assurance tool for compensation and pension claims is the Systematic Technical Accuracy Review (STAR) program.  Under the STAR program, the VA reviews a sampling of decisions from regional offices and bases its national accuracy measures on the percentage with errors that affect entitlement, benefit amount, and effective date.  Notwithstanding other elements of concern over this program, if STAR were being used effectively, we question why the VA did not detect the substantial variations in average annual compensation payments from state to state brought to light by the news media and thereafter investigated by the VA Office of Inspector General in 2005. 

Inconsistency is a sign of arbitrariness in decision-making, uneven, or overall insufficient understanding of governing criteria or rules for decisions or rules that are vague or overly broad to allow them to be applied according to the prevailing mindset of a particular group of decision makers.  Obviously, the VA must detect inconsistencies before the cause or causes can be determined and remedied.

Simply put, there is a gap in quality assurance for purposes of individual accountability for quality decision making.  In the STAR program, a sample is drawn each month from a regional office workload divided between rating, authorization, and fiduciary end products.  For example, a monthly sample of “rating” related cases generally requires a STAR review of “10” rating-related end products.[4]  Therefore, one can easily distinguish the significant importance placed on productivity over and above the priority placed on accuracy.  Reviewing 10 rating-related cases per month for a large size regional office[5], an office that would easily employee more than three times that number of raters, is undeniable evidence of a total void in individual accountability.  If an average size regional office produced only 1000 decisions per month, which we feel is quite conservative, the STAR program would only review a tenth of one percent of the total cases decided by that regional office.  Those figures leave no room for trend analysis, much less personal accountability. 

To complement its STAR program for allegedly measuring quality at the national level, the VA announced in the year 2000 a new initiative for quality review at the individual level.  Acknowledging that management needed tools to monitor individual performance, the VA created the “Systematic Individual Performance Assessment” (SIPA) program.  Under this program, the VA would review an annual sample of 100 decisions for each adjudicator to identify individual deficiencies, ensure maintenance of skills, promote accuracy and consistency of claims adjudication, and restore credibility to the system.  The reviewers would perform related administrative functions, such as providing feedback on reviews, maintaining reports, and playing a role in employee development and ongoing training.  Unfortunately, the VA abandoned this initiative during 2002, and proficiency is now apparently subjectively assessed by supervisors based on their day-to-day perceptions of employee performance.  Without any actual systematic review of samples of an individual adjudicator’s decisions, deficiencies are more likely to go undetected and uncorrected.  We understand that the culprit behind abandonment of SIPA was inadequate resources.  Without any quality assurance review on the individual level, the VA is unlikely to impose effective accountability down to the individual adjudicator level, where it must go if optimum quality is expected. 

We believe today’s VA workforce is conscientious and desires to make the best claims decisions possible, but it needs the time, training, and tools to do so, and the tools include a source of direct feedback from individualized quality reviews.  Without such oversight, under qualified, poorly trained VBA employees repeat the same mistakes, which lead to repeated appeals on the same issue, and that result in the VA recycling the same cases over and over, further adding to the backlog.

There is no proverbial silver bullet to solving VA’s challenges.  Various policy changes can and should be implemented that will collectively have a positive impact on reducing VA’s claims backlog while also improving services to VA’s clientele.  The DAV believes the following policy changes will have such an impact.

Overdevelopment of Claims

            Numerous developmental procedures in the VA claims’ process collectively add to the enormous backlog of cases.  While many of these procedures are mandatory, they are often over utilized.  This unnecessarily delays claims for months—when this occurs in, or leads to, the appeals process, claims are delayed for many years.  There is no single answer to solving the claims backlog.  Therefore, in addition to staffing increases, Congress and the VA must attack the problem using alternative methods, particularly when those alternative methods are parallel with the intent of the law, work to save departmental resources, and protect the rights of disabled veterans.

For example, rather than making timely decisions on C&P claims when evidence development may be complete, the VA routinely continues to develop claims.  These actions lend validity to many veterans’ accusations that whenever the VA would rather not grant a claimed benefit, the VA intentionally overdevelops cases to obtain evidence against the claim.  Despite these accusations, a lack of adequate training is just as likely the cause of such overdevelopment.

Such actions result in numerous appeals, followed by needless remands from the Board and/or the Court.  In many of these cases, the evidence of record supports a favorable decision on the appellant’s behalf yet the appeal is remanded nonetheless.  These unjustified remands usually do nothing but perpetuate the hamster-wheel reputation of veterans’ law.  Numerous cases exemplify this scenario; a list can be provided upon request. 

Essentially, the VA requests unnecessary medical opinions in cases where the claimant has already submitted one or more medical opinions that are adequate for rating purposes.  VA claimants desiring to secure their own medical evidence, including a fully informed medical opinion, are entitled by law to do so.  If a claimant does secure an adequate medical opinion, there is no need in practicality or in law for the VA to seek its own opinion.  Congress enacted title 38, United States Code, section 5125 for the express purpose of eliminating the former 38 Code of Federal Regulations, section 3.157(b)(2) requirement that a private physician’s medical examination report be verified by an official VA examination report prior to an award of VA benefits.  Section 5125 states:

For purposes of establishing any claim for benefits under chapter 11 or 15 of this title, a report of a medical examination administered by a private physician that is provided by a claimant in support of a claim for benefits under that chapter may be accepted without a requirement for confirmation by an examination by a physician employed by the Veterans Health Administration if the report is sufficiently complete to be adequate for the purpose of adjudicating such claim.  [Emphasis added]

Therefore, Congress codified section 5125 to eliminate unnecessary delays in the adjudication of claims and to avoid costs associated with unnecessary medical examinations.  Notwithstanding the elimination of title 38, Code of Federal Regulations, section 3.157, and the enactment of title 38 United States Code section 5125, the VA consistently refuses to render decisions in cases wherein the claimant secures a private medical examination and medical opinion until a VA medical examination and medical opinion are obtained.  Such actions are an abuse of discretion, which delay decisions and prompt needless appeals.  When claimants submit private medical evidence that is adequate for rating purposes, Congress should mandate the VA must decide the case based on such evidence rather than delaying the claim by arbitrarily and unnecessarily requesting additional medical examinations and opinions from the agency.  Such enactment will preserve VA’s manpower and budgetary resources; help reduce the claims backlog and prevent needless appeals; and most importantly, better serve disabled veterans and their families.

Standard for Determining Combat Veteran Status

Title 38, United States Code, section 1154(b) requires the VA to accept lay or other evidence as sufficient proof of service connection of a disease or injury if a veteran alleges that disease or injury occurred in or was aggravated during combat.  While the VA recognizes the receipt of certain medals as proof of combat, only a fraction of those who participate in combat receive a qualifying medal.  Further, military personnel records usually do not document actual combat experiences.  As a result, veterans who suffer a disease or injury resulting from combat are forced to provide evidence that may not exist or wait a year or more while the VA conducts research to determine whether a veteran’s unit engaged in combat.

Congress should amend title 38, United States Code, section 1154(b) to clarify military service as treatable service in which a member is considered to have engaged in combat for purposes of determining combat-veteran status.  Such clarification would properly allow for utilization of nonofficial evidence as proof of in-service occurrence for service connection of combat-related diseases or injuries.

This type of legislation would remove a barrier to the fair adjudication of claims for disabilities incurred or aggravated by military service in combat zone.  Under existing law, veterans who can establish that they “engaged in combat” are not required to produce official military records to support their claim for disabilities related to such service.  This legislation would not alter the law’s current requirement that a veteran confirm a disability through official diagnosis.  Further, it would not alter the requirement that a veteran show a nexus between a claimed disability and military service.  The only alteration from current law would be a relaxed standard of proof, consistent with Congress’ original intent, required to establish a veteran as one who engaged in combat.  This relaxed standard of proof would then only apply to those who serve in a combat zone.

Many veterans disabled by their service in Iraq and Afghanistan, and those who served in earlier conflicts are unable to benefit from liberalizing evidentiary requirements found in the current version of section 1154(b).  This results because of difficulty, even impossibility, in proving personal participation in combat by official military documents.

Impositions put forth by VA General Counsel opinion 12-99 require veterans to establish by official military records or decorations that they “personally participated in events constituting an actual fight or encounter with a military foe or hostile unit or instrumentality.”  Oversight visits by Congressional staff to VA regional offices found claims denied under this policy because those who served in combat zones were not able to produce official military documentation of their personal participation in combat via engagement with the enemy.  The only possible resolution to this problem without amending section 1154(b) is for the military to record the names and personal actions of every single soldier, sailor, airman, and Marine involved in every single event—large or small—that constitutes combat and/or engagement with the enemy on every single battlefield.  Such recordkeeping is impossible.

Numerous veterans have been and continue to be harmed by this defect in the law.  In numerous cases, extensive delays in claims processing occur while VA adjudicators attempt to obtain official military documents showing participation in combat: documents that may never be located. 

The Senate noted in 1941, in the report on the original bill that the absence of an official record of care or treatment in many of such cases is explained by the conditions surrounding the service of combat veterans.  Congress emphasized that the establishment of records for non-combat veterans was a simple matter compared to the combat veteran—either the veteran carried on despite his disability to avoid having a record made lest he or she be separated from his or her organization or, as in many cases, the records themselves were lost.  Likewise, many records are simply never generated.

Congress should clarify its intent by amending title 38, United States Code, section 1154(b), with respect to defining a veteran who engaged in combat for all purposes under title 38, as a veteran who during active service served in a combat zone for purposes of section 112 of the Internal Revenue Code of 1986 or a predecessor provision of law.

Other Factors Affecting The Backlog

In addition to the backlog of claims originating at the local regional office, the Board and the Court add substantially to the claims backlog by needlessly and frequently remanding numerous cases on appeal.  In many of these appeals, the evidence of record fully supports a favorable decision on the appellant’s behalf, yet the appeal is remanded nonetheless.  These unjustified remands deprive the appellant, usually for many additional years, to benefits awardable based on facts already of record.

The greatest challenge facing the Court is identical to the VA—the backlog of cases.  The Court has shown a reluctance to reverse errors committed by the Board.  Rather than addressing an allegation of error raised by an appellant, the Court has a propensity to vacate and remand cases to the Board based on an allegation of error made by the VA’s counsel for the first time on appeal, such as an inadequate statement of reasons or bases in a Board decision.  Another example occurs when the VA argues, again for the first time on appeal, for remand by the Court because the VA failed in its duty to assist the claimant in developing the claim notwithstanding an express finding by the Board that all development is complete and where the appellant accepts, and does not challenge such finding by the Board.  Such actions are particularly noteworthy because the VA has no legal authority to appeal a Board decision to the Court.[6]

Consequently, the Court will generally decline to review alleged errors raised by an appellant that actually serve as the basis of the appeal.  Instead, the court remands the remaining alleged errors on the basis that an appellant is free to present those errors to the Board even though an appellant may have already done so, leading to the possibility of the Board repeating the same mistakes on remand that it had previously.  Such remands leave errors properly raised to the Court unresolved; reopen the appeal to unnecessary development and further delay; overburden an already backlogged system; exemplify far too restrictive judicial restraint; and inevitably require an appellant to invest many more months and perhaps years of his or her life in order to receive a decision that the court should have rendered on initial appeal.  As a result, an unnecessarily high number of cases are appealed to the Court for the second, third, or fourth time.

In addition to postponing decisions and prolonging the appeal process, the Court’s reluctance to reverse Board decisions provides an incentive for the VA to avoid admitting error and settling appeals before they reach the Court.  By merely ignoring arguments concerning legal errors rather than resolving them at the earliest stage in the process, the VA contributes to the backlog by allowing a greater number of cases to go before the Court.  If the Court would reverse decisions more frequently, the VA would be discouraged from standing firm on decisions that are likely to be overturned or settled late in the process.

To remedy this unacceptable situation, Congress should amend title 38, United States Code section 7261 to require the Court on a de novo basis, to: (1) decide all relevant questions of law; (2) interpret constitutional, statutory, and regulatory provisions; and (3) determine the meaning or applicability of the terms of an action of the Secretary.  The Court’s jurisdiction should also be amended to require it to decide all assignments of error properly presented by an appellant.

Conclusion

We hope the Committee will review these recommendations and give them consideration for inclusion in your legislative plans.

Mr. Chairman, thank you for inviting DAV to testify before you today. 

[1] 39,885claims  in FY 2004; 37,832 in FY 2005; 40,074 in FY 2006; and 37,370 in FY 2007.

[2] Fiscal Year 2008 Budget Submission, Volume II, National Cemetery Administration, Benefits Programs, and Departmental Administration, Benefits Summary, Department of Veterans Affairs, Pg. 6A-2  (Retrieved Feb. 2, 2008, from <http://www.va.gov/budget/summary/index.htm>). 

[3] Department of Veterans Affairs Office of Inspector General, Rep. No. 05-00765-137, Review of State Variances in VA Disability Compensation Payments 61 (May 19, 2005). 

[4] See M21-4, Ch. 3.

[5] See I.d. at 3.3

[6] 38 U.S.C.A, § 7252(a) (West 2002) (“The Court of Appeals for Veterans Claim shall have exclusive jurisdiction to review decisions of the Board of Veterans’ Appeals.  The Secretary may not seek review of any such decision.”)