Chairman Hall, Representative Lamborn, distinguished members, I appreciate the opportunity to testify before the House Subcommittee on Disability Assistance and Memorial Affairs of the House Committee on Veterans’ Affairs today on the subject of the VA’s Claims Processing System. This testimony is based on the findings reported in Final Report for the Veterans’ Disability Benefits Commission: Compensation, Survey Results, and Selected Topics, by Eric Christensen, Joyce McMahon, Elizabeth Schaefer, Ted Jaditz, and Dan Harris, of the CNA Corporation (CNA). Details on the specific findings discussed here can be found in the report, which is available at http://www.cna.org/domestic/healthcare/. The report also includes reference sources.

The Veterans’ Disability Benefits Commission (the Commission) asked CNA to help assess the appropriateness of the benefits that the Department of Veterans Affairs (VA) provides to veterans and their survivors for disabilities and deaths attributable to military service. Specifically, the Commission was charged with examining the standards for determining whether a disability or death of a veteran should be compensated and the appropriateness of benefit levels. The overall focus of our effort was to provide analyses to the Commission regarding the appropriateness of the current benefits program for compensating for loss of average earnings and degradation of quality of life resulting from service-connected disabilities for veterans. We also evaluated the impact of VA compensation for the economic well-being of survivors and assessed the quality of life of both service-disabled veterans and survivors.

We also explored other issues for the Commission and documented those results. Pertinent to this testimony is that we were asked to:

• Compare the VA disability compensation program to other disability programs.

• Conduct surveys of raters and Veterans Service Officers (VSOs) with regard to how they perceive the processes of rating claims and assisting applicants.

First we will discuss how we compared the VA disability compensation program to other disability programs with respect to the ratings process. We will then summarize the primary relevant findings based on conducting surveys of raters and VSOs.

Comparing the disability ratings process across disability programs

The Commission asked us to compare VA’s program with other federal disability compensation programs in order to determine whether there are any useful practices that VA could adopt to improve its own operations. Our first task was to identify the major criticisms of operations in the VA disability program. We reviewed a variety of publicly available sources that discussed problems with VA performance, including reports from the Government Accountability Office (GAO), reports from the VA Office of the Inspector General (OIG), and congressional testimony.

Next we spoke with the relevant VA staff to get the most current information on the areas being criticized. We interviewed people in the Veterans Benefits Administration’s (VBA’s) Compensation and Pension Service, VBA’s Office of Employee Development and Training, the Board of Veterans’ Appeals, and the Office of the General Counsel. We discussed specific aspects of VA operations that were identified as problematic and the approaches that the other disability programs take in those areas. Our focus was limited to federal programs paying monetary benefits to disabled individuals, including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) under the Social Security Administration (SSA), Workers’ Compensation under the Federal Employees’ Compensation Act (FECA), disability retirement for federal employees under the Federal Employee Retirement System (FERS) and the Civil Service Retirement System (CSRS), and DOD’s Disability Evaluation System (DES).

We found that there were no formal evaluations of the effectiveness of specific practices in other programs in the areas identified as problematic for VA. We decided to first determine whether a program used a practice different from VA’s and then to consider whether the other program’s practice might be an improvement over VA’s.  We consulted a variety of sources, including GAO reports, congressional testimony, and personal interviews.  We spoke with staff in various offices in the Social Security Administration, the Department of Labor, the Office of Personnel Management, and DOD.

Differences noted across disability compensation programs

There are many differences across the disability programs in terms of purpose, administrative processes, eligibility, benefits, and size. These differences may limit the potential applicability for VA of lessons from the other programs. For example, each disability program has different administrative processes for filing claims and making appeals. The various disability compensation programs also have different criteria for determining eligibility and benefit levels, and different purposes of the monetary compensation, varying from partial or full replacement of earnings to an income supplement, or even to compensation for a shortened career.

The purpose of the VA program is to compensate disabled veterans for earnings lost due to their disability, although there is no mechanism for calculating individual-specific earnings losses (except for cases of Individual Unemployability (IU)). A disability is defined as either an injury or a disease that resulted from service or as a pre-existing injury or disease that was aggravated by service. A veteran can have multiple disabilities, each of which is assigned a rating reflecting its severity. The combination of the disability ratings for all disabilities determines a veteran’s level of compensation.

The amount and type of information needed for each program are important determinants of how difficult and time-consuming it is to process and resolve a claim. For example, the VA, FECA, and DES programs all require that a disability be a consequence of an individual’s job in order to be eligible for compensation. The connection between employment and disability is straightforward to demonstrate sometimes, but not always, especially for VA cases in which the injury or disability may have occurred many years previously, and may require providing extensive documentation. Although in general the VA program does not require a decision about how much the disability affects a particular veteran’s employment and earnings (except for IU cases), it does require raters to determine the extent and nature of multiple disabilities.

Measures of performance

For any disability compensation program, three important measures of performance in claims processing are timeliness, accuracy, and consistency. In addition, we consider issues involving training, productivity standards, and staff turnover.

Timeliness

 Beginning with timeliness, we note that the time required to decide and resolve a claim depends on how complex the design of the program is. For example, although the VA program does not need to know a claimant’s earnings history, it does need to determine service connection and severity for each disability, and each claim can have multiple disabilities.

Compared to the other disability programs, VA performance in terms of timeliness is poor. The average time for VA to complete a claim (without appeals) in FY2006 was 177 days. In comparison, the average for SSDI was 88 days in FY2006, and OPM staff reported that the FERS/CSRS average is currently 38 days. In general, the FECA and DES programs also reported shorter times to adjudication than the VA average.

Because of the differences across programs in the work required to process a claim, it is difficult to say whether VA’s timeliness problems are due to the complex nature of its disability decisions, staffing shortages, low productivity, or some other factors. To know how best to address its problems with timeliness, it would be useful for VA first to disaggregate that 177-day average so that it understands what stages of the claims process are contributing most to the total processing time.

With respect to specific strategies to improve timeliness, VA already does make use of “Tiger Teams” to deal with cases that are designated as high priority at any given time, such as very long-standing cases or cases where the veteran is very old or terminally ill. Because the success of those teams comes from the fact that they are made up of the most experienced staff, unfortunately the Tiger Team approach is not something that VA can replicate on a larger scale (i.e., there are not enough experienced employees to staff a large number of Tiger Teams). VA might also learn from SSA’s new Quick Disability Determination (QDD) process, which involves using a predictive model to identify cases with a relatively high probability of being granted benefits and then trying to act on those cases within 20 days.

Accuracy

Accuracy is another major dimension of the quality of claims processing. VA’s accuracy rate in 2006 was 88 percent. Accuracy is based on whether all issues in the claim were addressed, whether the claim was developed in compliance with the Veterans Claims Assistance Act, and whether the rating decision, effective date, and payment date were correct.  VA’s accuracy is below the overall accuracy rate for SSDI, which is 96 percent, but the difference is not large. However, when comparing accuracy one should remember that the programs have different requirements for processing a claim. In particular, the fact that VA has to rate the severity of a disability creates more potential for error than the yes-or-no disability decision that is required for SSDI. 

We were unable to obtain overall accuracy rates for the other programs. However, in comparing other programs’ practices with VA’s, the only practice that is substantively different from VA’s is SSA’s practice of focusing on the most error-prone type of cases. Incorporating this element could be worthwhile for the VA because it would result in a disproportionately large gain in accuracy for any given increase in the number of reviews.

Consistency

Measuring consistency in disability programs is difficult, and none of the programs currently has a measure of consistency of the level that GAO recommends for that task, including the use of multivariate analysis to examine disability decisions while controlling for various factors, and in depth independent review of statistically selected case files. Although VA has studied recommendations to improve consistency, the lack of consistency evaluations across programs makes it impossible to compare consistency.

Possible ways to improve consistency might include standardizing training for raters, improving standardization of medical examinations, and consolidating the rating process into fewer locations. In addition, it is worth noting that there have been criticisms of SSA regarding consistency, which in part may be due to the task of determining medical eligibility, which involves considerable subjectivity.

Physical consolidation is also a way to reduce inconsistency in disability programs, and it is an approach that is already being considered by VA. VA disability compensation claims are currently processed in 57 Regional Offices (ROs), and GAO has recommended that VA consolidate some of its disability compensation operations as one way to improve claim processing quality and reduce variation across regional offices. VA reports that it does in fact have plans to consolidate some of its disability claims processing in the future, based in part on past successes in consolidating some other areas of operations. However, this may create less in-person access for some veterans.

SSA has a similar regional variation to that observed for the VA. The other programs face fewer consolidation issues or concerns, because they are much smaller programs and have fewer offices and locations for processing claims.  

We also considered a variety of other issues that were identified as potential problems for the VA. We considered the claim that the VA emphasizes quantity over quality in performance evaluations of individual employees, which might lead to hasty decisions that would in turn lead to appeals and more backlogs. However, an emphasis on productivity has been identified as having the potential to negatively affect accuracy in SSA as well. The tension caused by quantity standards, even if accompanied by quality standards, appears to be an issue for the other disability compensation programs as well as for VA

Training issues

VA has also received criticisms in the area of staff training. However, examination of the other disability programs shows that VA certainly is not lagging behind in its training efforts. None of the other programs seems to have any formal evaluation of their training either. VBA has also recently focused on increasing the standardization of training.  It is worth noting that no other disability program has VA’s level of standardization.

Staff turnover

For the VA program, high staff turnover is viewed as creating a problem for the quality of claims processing by lowering the overall level of expertise. By comparison, it is not clear that the one-year attrition rate for VA disability examiners differs from the rate for all new federal employees. However, minimizing turnover is especially important for VA because of the lengthy training time required for claims processing. GAO has recommended that it might be useful for the VA to take steps to quantify the reasons that raters resign.  In any event, VA is not the only disability program facing the problem of high staff turnover, which has been identified as a particularly difficult issue for SSA.  The other disability compensation programs reported similar staff turnover concerns.

Summary of comparisons across programs

Except for the very important issue of timeliness, VA does not appear to be under-performing in comparison with other disability programs. Recent training improvements seem promising for improving VA timeliness in the long term, but effects will not be seen for a while. Some of VA’s problems with timeliness could be the result of a complex program design, with multiple disabilities per claim, the need to determine service connection (sometimes many years after separation), and the need to assign a disability rating to each disability.  For VA to develop a focused strategy to improve timeliness, it first needs to determine the stages of the claims process that are contributing most to the total elapsed time required to complete a claim.

Raters and VSOs survey results

With regard to the benefits determination process, the Commission asked us to gather information by conducting surveys of VBA rating officials and accredited veterans service officers (VSOs) of National Veterans Service Organizations (NVSOs). The intent was to gather insights from those who work most closely with the benefits determination and claims rating process. Through consultation with the Commission, we constructed separate (but largely parallel) surveys for raters and VSOs. We focused on the challenges in implementing the laws and regulations related to the benefits determination and claims rating process and perspectives on how the process and rating schedule perform.

Survey content

The surveys explored issues involving training, proficiency on the job, and resource availability and usage. Respondents were asked about what they considered to be their top three job challenges. They were also asked about how they decided or established specific criteria related to a claim, how smoothly the rating process went, the perceived capabilities of the various participants in the process, which types of claims were most difficult to process, and what resources would improve the claims process.

Assessment

The overall assessment indicated that the benefits determination process is difficult to use by some categories of raters. Many VSOs find it difficult to assist in the benefits determination process. In addition, VSOs report that most veterans and survivors find it difficult to understand the determination process and difficult to navigate through the required steps and provide the required evidence. Most raters and VSOs agreed that veterans have unrealistic expectations of the claims process and benefits.

Raters and VSOs noted that additional clinical input would be useful, especially from physicians and mental health professionals. Raters felt that the complexity of claims is rising over time, and that additional resources and time to process claims would help. Some raters felt that they were not adequately trained or that they lacked enough experience. They viewed rating mental disorder claims as more problematic than processing physical condition claims. They viewed mental claims, especially PTSD, as requiring more judgment and subjectivity and as being more difficult and time-consuming compared to physical claims. Many raters indicated that the criteria for IU are too broad and that more specific decision criteria or evidence would help in deciding IU claims.

Specific findings

The findings identify several problematic issues related to the benefits determination process that bear on the challenges inherent in implementing, assisting, and navigating the claims process, including: 

• Both raters and VSOs identify additional clinical input on rating teams as potentially useful, especially from physicians of appropriate specialties and from mental health professionals.  VSOs identify rehabilitation specialists and medical records specialists as other potentially useful sources of input.

• There is a relatively wide range of perceived training adequacy, perceived proficiency in knowledge, skills and abilities (KSAs), KSAs relevant to the perfor­mance of the rater’s role, and years of rating experience among rating officials that appears to be related to raters’ ability to implement the process and their ease at rating and otherwise deciding claims.  Raters who feel less well-trained or less proficient and those who have fewer years of rating experience generally find the process more problematic.

• Raters’ perceptions regarding their training adequacy and their KSA proficiency are both somewhat related to their perceptions of the availability of the resources they need to decide a claim such as computer system support, information and evidence, time, and administrative/managerial and clerical support.  As perceived training adequacy and KSA proficiency increase, so does perceived resource availability.

• In many respects, rating or otherwise deciding mental disorder claims is generally more problematic than rating or deciding physical condition claims.  Both raters and VSOs see claims with mental disorder issues, especially PTSD, as requiring more judgment and subjectivity than claims with physical condition issues.  Raters and VSOs also indicate that it is less likely that mental disorder issue claims rated by different raters at the same VA Regional Office would receive similar ratings.  Raters and VSOs also both indicate that deciding the various criteria of a claim is more problematic for mental disorder than for physical condition claims.

• A significant majority of raters indicate that more specific decision criteria or more specific evidence regarding individual unemployability (IU) would be helpful and that the criteria for IU are too broad.

• Rating physical conditions in several body systems or subsystems also appears problematic.  Raters identified neurological and convulsive disorders, musculoskeletal disorders (especially involving muscles), and disorders of special sense organs (especially eyes), along with mental disorders (especially PTSD), as the most difficult to rate, the most difficult to apply the Rating Schedule to, and the most time consuming to rate.

• Time to rate or otherwise decide a disability claim is a scarce resource and a major challenge for raters; it is also a challenge for VSOs and their veteran and survivor clients to get claims decided in a timely manner.  Time appears to be most challenging when raters are deciding complex claims, and raters report that they see claims getting more complex over time.

• A large majority of raters reported that they had insufficient time to rate or otherwise decide a claim, and both raters and VSOs reported that there was too much emphasis on speed relative to accuracy.

• Obtaining needed evidence, especially given the challenge and scarcity of time and the insufficiency of many medical examinations (in particular from private examiners, according to raters) is a challenge in its own right.

• Separately rating the impact of a disability on quality of life and lost earnings capacity was not supported by a majority of either raters or VSOs.  The use of computerized decision support technology was not supported by raters; however, raters reported that the use of standardized assessment tools and more specific criteria for rating and deciding mental health issues—especially PTSD—would be useful.

• The process is difficult for most veterans and survivors to understand and navigate.  Assisting clients to understand the process and the evidence needed for it is a major challenge for VSOs. A majority of VSOs further report that they disagree that the process is satisfactory to most of their clients.  A majority of both raters and VSOs indicate that they believe veterans have unrealistic expectations of the claims process and the benefits they should receive.

• Overall, most raters and VSOs report that they believe that the claims rating process generally arrives at a fair and right decision for veterans.  Further, in general, raters and VSOs assessed the performance of their VSOs (and each other) as good; however, most raters reported that they believe VSOs inappropriately coach their clients.

Summary of survey findings for raters and VSOs

The purpose of these surveys was to provide the Commission with insights and perspectives from those on the front lines of the benefits determination process—VBA rating officials who rate and otherwise decide disability claims, and VSOs who assist veterans and their survivors to prepare, present, and prosecute disability claims. The findings presented in the previous section portray a picture of a benefits determination process that is difficult to use by some categories of raters, difficult to assist by many VSOs, and difficult to navigate or understand by most veterans and survivors.

In summary, these survey results and findings highlight some specific issues that reflect challenges inherent in the benefits determination process. Addressing these challenges may assist in improving the overall VA rating process.