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Witness Testimony of Adrian Atizado, Disabled American Veterans, Assistant National Legislative Director

Mr. Chairman and Members of the Subcommittee:

On behalf of the 1.3 million members of the Disabled American Veterans (DAV), I am pleased to present our views on the functioning and performance of the appellate operations of the United States Department of Veterans Affairs (VA), as carried out by its Board of Veterans’ Appeals (BVA or Board), and Appeals Management Center (AMC).  The members of the DAV are made up of service-connected disabled veterans and along with family members in the Auxiliary, have a special interest in the subject of today’s oversight hearing. 

The effective administration of appellate review of claims decisions is essential to discharging VA’s mission of caring for our Nation’s veterans.  Approximately 96 percent of BVA’s workload involves disability compensation and pension claims.   The oversight this Subcommittee provides is necessary to guarantee veterans receive the benefits to which they are entitled by law and to impose the accountability for results and efficiency that our citizens rightfully demand.  Your vigilant oversight of performance, and your watchfulness of execution of the laws, creates an incentive for better performance by VA. 

The law governing veterans’ benefits, as it is generally, is not an exact science.  Adjudication of veterans claim for VA benefits and services require the intervention of human judgment.  Such judgment is not infallible, and we therefore view the right to appeal as an important element of fairness and necessary to safeguard against injustices that result from human error.  Because appellate review is so essential to ensuring justice in an unavoidably imperfect adjudication system, the proper functioning of appellate processes is of major importance, especially where the rights and benefits of our veterans are involved. 

As a statutory board, BVA was created by consolidating and centralizing the appellate board in Washington, D. C., and with a clearer sense of direction, the problems of decentralization, lack of uniformity, and the lack of finality were addressed.  Since its inception, BVA has operated separate and independent from the other elements of VA.  While there have been some changes in its configuration since 1933, BVA has retained its basic concept and mission. 

BVA’s mission today is still to make the final decision on behalf of the VA Secretary in claims for benefits.  Section 7104 of title 38, United States Code, provides: “All questions in a matter which…is subject to a decision by the Secretary shall be subject to one review on appeal to the Secretary.  Final decisions on such appeals shall be made by the Board. ”

Although BVA generally makes the final decision in an appeal, the appellate process begins with the VA field office responsible for the appealed decision, commonly referred to as the agency of original jurisdiction.  Some appealed decisions are resolved by the agency of original jurisdiction, which alleviates the need for a final decision by BVA.  Other appeals that have been transferred to BVA may be sent back, “remanded,” to the agency of original jurisdiction to cure some procedural omission or record defect, or may be favorably resolved.  Up to 50 percent of the appealed cases are resolved by the agencies of original jurisdiction and never reach the Board.  About 75 percent of the remanded cases are returned to the Board for a final decision.

Appellate Process

A veteran or other claimant initiates an appeal by filing a “notice of disagreement” with the agency of original jurisdiction.  The agency of original jurisdiction may then take such additional development or review action as it deems proper.  If such action does not resolve the disagreement, the agency of original jurisdiction issues to the appellant a “statement of the case” that contains a summary of the pertinent evidence, a citation of the pertinent legal authorities along with an explanation of their effect, and an explanation of the reasons for the decision on each issue.  To complete, or “perfect,” the appeal, the appellant must then file with the agency of original jurisdiction a “substantive appeal,” a written statement specifying the benefit or benefits sought and the bases of the appellant’s belief that he or she is legally entitled to the benefit or benefits.  Upon receipt of the substantive appeal, VA enters the case on the BVA docket.  The BVA docket is a list of cases perfected for appellate review compiled in chronological order of when the substantive appeal was received.  The Board receives these cases for review by their order on the docket, although a case may be advanced on the docket for demonstrated hardship or other good cause.  The Board must afford each appellant an opportunity for a hearing before deciding his or her appeal.  The hearing may be held before the BVA at its principal office or at a VA facility located within the area served by appellant’s VA regional office.  The Board may enter a decision that orders the granting of appropriate relief, denying relief, or remanding the appeal for further action by the agency of original jurisdiction.

Claimants for veterans’ benefits who believe BVA made factual or legal errors in deciding their claims may appeal to the United States Court of Appeals for Veterans Claims (CAVC or Court).  The Court may affirm or reverse the BVA decision, or remand for further action.  The landmark legislation enacted in 1988 that subjected BVA decisions to the scrutiny of an independent court has necessitated positive reforms in BVA decision-making.  Because the Board’s decisions must be justified with an explanation of the factual findings and legal conclusions and because VA must defend its decisions in court, denials that go against the weight of the evidence or law have declined.  The Board allows and remands substantially higher percentages of appeals than it did before judicial review.   Prior to judicial review, BVA allowed or remanded only about 20 percent of appeals.  Today that number is approximately 56 percent.

During 2006, 3,729 claimants appealed to CAVC.  The Court decided 2,135 cases based on the merits of each case, with a median processing time from filing of the appeal to disposition of 351 days.  Of that total, 1,365 cases, or 64 percent, were either reversed/vacated and remanded or remanded because of some substantive error or procedural defect.  This reflects a high error rate among those BVA decisions appealed to the Court.

The DAV’s judicial appeals representatives complain that the Board, with increasing frequency, is deviating from the Court’s orders reversing and/or remanding cases with specific instructions.  The Board’s failure to adhere to the Court’s orders is blatantly unlawful.  Claimants have no immediate means to remedy the Board’s unlawful action.   For example, in one recent case the Secretary and the veteran appellant agreed that the Board had committed an error which required remand for a new Board decision and that the record was sufficient for the Board to make that decision.   The Court granted a joint motion for remand that directed the Board to decide the appeal based on the existing record.   The Board ignored that order and remanded to the regional office with an instruction to conduct an examination.   The Court has held that such remand orders by the Board are not final decisions and therefore not appealable to the Court.   The claimant in that case was consigned to the VA adjudication hamster wheel for an additional period of months or years.  The Board’s defiance of the Court’s mandates breaks down the order and discipline imperative in appellate systems where inferior tribunals are legally bound to adhere to the orders of superior tribunals. 

During fiscal year (FY) 2006, 101,240 new notices of disagreement were received by VA, 46,076 appeals were perfected and added to BVA’s docket, 41,802 cases were physically transferred from agencies of original jurisdiction to BVA, and the Board decided 39,076 cases.  The Board began 2006 with 37,539 cases pending before it and ended the year with 40,265 cases pending.   Accordingly, the number of new appeals added to the Board’s docket during the year exceeded the number of cases it decided by 7,000, and the number of new appeals added to the Board’s docket exceeded the number of cases transferred to the Board for a decision by 4,274.  The Board decided 2,726 fewer cases than it received from field offices.

Processing Time

At the end of FY 2006, there were more than 164,000 cases in field offices in various stages of the appellate process, including the 21,229 on remand.  Some of these appeals will be resolved at the field office level, but about three-fourths of them will come before the Board.

During FY 2006, the average time for resolving an appeal, from the filing of the notice of disagreement to the date of the decision was 971 days.  Of this total, 719 days was the average time an appeal was pending in the field office, from the notice of disagreement to the transfer of the case to BVA, with an average of 252 days from the date of receipt of the case at BVA to the date of the decision.

For FY 2006, the average number of days an appeal was pending in the New York City VA regional office before being transferred to BVA was 1,513 days, with 1,213 of those days representing the time after the appeal was perfected and the case was ready for transfer.  Corresponding average days in the St. Petersburg, Florida regional office was 1,014 and 645; Chicago, Illinois was 865 and 613 days; 755 and 542 days in Cleveland, Ohio; 745 and 478 days in Denver, Colorado; and 706 and 478 days in Reno, Nevada.  For a New York case, the average total processing time for an appeal at BVA in FY 2006 was 209 for a total of 1,722 days, almost 4 years and 9 months.  Correspondingly, for a case in St. Petersburg the average total number of days to a BVA decision was 1,254 or 3 years and 5 months, nearly 3 years in Chicago (1,093 days) and Denver (1,050 days), and over 2. 5 years in Cleveland (982 days) and Reno (935 days).  Eleven VA regional offices exceeded 1,000 days for the average time an appeal was pending at the field office (New York; Seattle; San Diego; Los Angeles; Providence; Houston; Honolulu; Milwaukee; Atlanta; Des Moines; St. Petersburg).

From the start of this fiscal year through August 2007, the average total days for cases pending in the field was 784 days and the average time at BVA was 274 days.  Of course, for those cases remanded, the total processing time is considerably longer.  An additional 140 days were added to the total processing time of appeals for the time the case spent at BVA the second time following the remand, and this does not include the number of days the case was on remand at the field office.

In FY 2006, an additional 115 days were added to the total processing time of appeals for the time the case spent at BVA the second time following the remand not including the number of days the case was on remand at the field office.  During FY 2006, 13,812 cases were returned to the Board following remands.  As noted, there were 21,229 cases on remand at the end of 2006.  Of the 39,076cases decided by BVA in FY 2006, approximately 37 percent had been previously remanded.  With these long processing times, far too many disabled veterans die before their appeals can be decided.  Three obvious conclusions follow from these numbers: (1) most of the delay in these unreasonably protracted appeals processing times is at the field office level, (2) far too many cases must be remanded more than once, and (3) multiple remands add substantially to the workload of BVA and the regional office.

Accuracy

From the beginning of FY 2007 to date, the Board allowed 21 percent of the 37,120 cases it decided.  Approximately 31 percent of those allowed cases had been previously remanded.  In addition, the Board remanded 35 percent of the cases it reviewed and of those remanded cases, 21 percent had already been previously remanded, suggesting that the field office did not fulfill the Board’s instructions in the remand order.  Together, the allowed and remanded cases represented 56 percent of the Board’s total case dispositions.   In addition to noting the high percentage of cases remanded multiple times, two conclusions can be drawn from these percentages: within these appealed cases, (1) agencies of original jurisdiction have denied many meritorious claims, and (2) agencies of original jurisdiction have denied many cases without proper record development.  

Space Issues

BVA experiencing some shortage of storage space for claims files because of the large volume of appeals, the President’s FY 2008 budget request for 468 fulltime employees (FTE) and indications from this Subcommittee to increase BVA will create a more pronounced need for additional space.  Considerable time and effort was invested toward the Board’s planned relocation to a more suitable office space in FY 2007.  Unfortunately, funding for this necessary move was withdrawn and the move has been permanently delayed.   If future backlogs and delays in appellate processing are to be avoided, BVA must have the additional resources necessary to meet this increasing workload. 

New Initiative

Timeliness and accuracy of claims for veterans benefits and services remains a concern for the DAV.  A proposed initiative was announced this year to address the timeliness of claims and appeals.  The Expedited Claims Adjudication (ECA) initiative as proposed would offer an expedited process to selected claimants by requiring a waiver of certain time periods normally afforded in the claims and appeals process.  While we agree that the timely processing of all claims and appeals must be improved, this initiative is only one method to achieve the goals it has outlined.  We must remain cautious that any such agreement or waiver of protection afforded to the veteran by law should be an option and not a requirement, and not be utilized to discriminate or disallow the claim or appeal from proceeding or returning to the normal claims process.  Moreover, we do not concur with the proposed statutory changes to 38 U. S. C § 7105(b)(1), 7104, 7101, and 7107(b) as the goal of speeding up the process should not be accomplished by depriving appellants of due process.  We believe that the 3 core elements that must be allowed are staffing levels, adequate training, and accountability.

Appeals Management Center

In August 2001, VA proposed to amend the Board’s regulations to enable the Board to perform record development itself and make a decision on that evidence rather than remand the case to the agency of original jurisdiction for these purposes.  For several reasons related to unfairness and inefficiency, the DAV urged VA not to issue a final rule to authorize this practice.  We also noted that such a rule would be unlawful because it would deprive claimants of the statutory right to have a decision by VA and one administrative appeal from that decision. 

VA brushed aside our objections and recommendations to utilize Veterans Benefits Administration (VBA) personnel rather than the BVA and issued a final rule for this purpose in January 2002.  BVA created its Evidence Development Unit, which began operations in February 2002.  The DAV, joined by three other organizations, challenged this rule and in its May 1, 2003, decision, the United States Court of Appeals for the Federal Circuit invalidated the rule as unlawful.  As a result, VA created a special VBA unit, the AMC, to perform remand functions. 

The AMC develops and decides approximately 82 percent of the BVA remands.  The issues involved in the other 8 percent are more appropriately handled by the field offices.  Although the average time a case was in remand status during FY 2006 was 16 months because a portion of the cases were old ones remanded to field offices, the portion of the remanded cases that were developed and decided by the AMC were on remand an average of approximately 336 days.  The most recent data available to DAV for FY 2007 indicates the AMC currently completes work on an average of 710 cases a month and 18,622 cases are assigned to AMC.

The initial bulk transfer of approximately 9,000 cases from the Board to the AMC in the first quarter of FY 2004 were cases in which further development was pending at the Board.  Of course, the AMC had both the responsibility to develop and adjudicate these cases.  In the beginning when the AMC was first organized, it had to cope with new processes and adjudicators, and it was understandably not up to full efficiency.  As a consequence, cases began to back up. 

Because the volume of work at the AMC was higher than expected, VBA developed a plan in December 2004 to have three VA regional offices do a portion of the remands to reduce the backlog.  These offices are located in Huntington, West Virginia; St. Petersburg, Florida; and Cleveland, Ohio.  Initially, the plan was to broker already developed cases to these regional offices to adjudicate, and authorize awards as indicated.  However, the Huntington and St. Petersburg offices found that some of the cases they received from the AMC were not actually ready to adjudicate, and that these offices began to undertake development also. 

Out of the three regional offices, only Huntington remains a receiving station for brokered cases from the AMC, in addition to the Seattle VA regional office.  According to the AMC, 300 cases a month are sent to the AMC teams at the two regional offices, significantly less than the 1,300 cases to three regional offices in 2005. 

Our DAV representatives at BVA observed that some of the earlier cases returned to the Board from the AMC were not developed in compliance with the remand orders.  However, with AMC employees gaining experience, the quality of development has improved.  The AMC is viewed as an improvement over the prior procedure in which all cases were remanded to agencies of original jurisdiction because cases are more strictly controlled and not left to languish in field offices for years as too often happened before.   Our representatives at the AMC also report that AMC adjudicators are granting the benefits sought in many of these appeals. 

When the BVA allows an appeal, it returns the case to the AMC rather than the agency of original jurisdiction to effectuate the award of benefits.  The case often must go to the AMC because the appeal also involves a remanded issue.  A major and continuing complaint is the delay in the award of benefits on the allowed portion of the appeal.  While benefits sought may be granted, the average time from the decision to issuance of the award to the veteran has doubled from an average of 3 months in 2005 to an average to 6 months.   Even where the case involves no remanded issue, the case is sent from BVA to the AMC for the award of benefits resulting in unnecessary delays.

In 2005, VBA had 134 FTE devoted to the AMC and its three outstations: 87 FTE in the AMC; 25 FTE in St. Petersburg; 8 FTE in Huntington, and 14 FTE in Cleveland.   According to the AMC, there are now 99 in the AMC, and no FTE devoted to the two resource centers in Huntington and Seattle.

Focus on the BVA and the AMC alone does not present a complete picture of the effectiveness of VA’s appellate processes.  The timeliness and propriety of actions on appeals by agencies of original jurisdiction in preparing the case for BVA review and in completing remand actions after BVA review account for much of the overall appellate processing time and necessity to rework the case.  The available data show the error rates in appealed cases are high and that the process takes an inexcusably long time, thereby delaying disability and other benefits for many veterans with meritorious claims and immediate needs.  The problem of appeals languishing in regional offices for years is not a new one.  The responsible VBA officials need to take more decisive action to correct this problem.  Board officials need to take the necessary steps to reduce error rates in BVA decisions and to ensure binding court mandates are carried out.  With recent increases in the appellate caseloads and no corresponding increase in staffing, timeliness at BVA and the AMC is likely to suffer even more.  Congress needs to address BVA space and staffing more seriously. 

In addition, DAV and VA are unaware of what the effects of the provision in Public Law 109-461, which allows attorneys and agents to charge fees to veterans, will be on the Board, the AMC, and the timeliness and accuracy of the appellate process. 

We appreciate the Subcommittee’s interest in these issues, and we appreciate the opportunity to provide you with the DAV’s views.  We hope our views will be helpful to the Subcommittee.