Chairman Hall, Ranking Member Lamborn, and Members of the Subcommittee:  It is my pleasure to appear before you today representing the Advisory Committee on Disability Compensation.  The Committee is chartered by the Secretary of Veterans Affairs under the provisions of 38 U.S.C. & 546 in compliance with P.L. 110-389 to advise the Secretary with respect to the maintenance and periodic readjustment of the VA Schedule for Rating Disabilities.  Our charter is to “(A)ssemble and review relevant information relating to the needs of veterans with disabilities; provide information relating to the character of disabilities arising from service in the Armed Forces; provide and on-going assessment of the effectiveness of the VA’s Schedule for Rating Disabilities; and provide on-going advice on the most appropriate means of responding to the needs of veterans relating to disability compensation in the future”.

The Committee has met nineteen times and has forwarded an interim report to the Secretary that addressed our efforts as of July 7, 2009to date.  (Copies of this interim report were furnished to majority and minority staff in both Houses of Congress.)  The Secretary of Veterans Affairs responded to the interim report on February 23, 2010. (Copy provided for the Record).  The Committee has prepared a draft report to fulfill the statutory requirement to submit a report by October 31, 2010. (Copy provided for the Record.)  

Our focus is in three areas of disability compensation:  Requirements and methodology for reviewing and updating the VASRD; adequacy and sequencing of transition compensation and procedures for service members transitioning to veteran status with special emphasis on seriously ill or wounded service members; and disability compensation for non-economic loss (often referred to as quality of life). 

Your letter of invitation asked me to present the Committee’s views on the current Veterans Benefits Administration.  I will focus on the current status of review and update of the VASRD.

I begin by acknowledging the progress that has been made in reviewing and updating the VASRD.  Standards for the diagnosis and evaluation of TBI have been established.  There has been progress to date in reviewing the entire mental disability category with emphasis on PTSD.  Preliminary steps are underway to review the musculoskeletal body system and the endocrine system

The Committee remains convinced that an updated and clarified Rating Schedule is key to enabling examining, rating and reviewing officials to make a more accurate and timely assessment of a veteran’s disability and its effect on his or her average earnings loss and that an updated and clarified Rating Schedule should improve first time accuracy and reduce the number of appeals and the backlog that appeals create.  The updated Rating Schedule should address the recognized inconsistencies in mental versus physical disabilities and in differences in age at entry into the disability system.

Recent studies by the Veterans Disability Benefits Commission, the Institute of Medicine, the General Accounting Office and others have consistently recommended a systematic review and update process for the VASRD.  The Congress has repeatedly demanded the same.  I believe that the case for such a review is made and that sufficient data currently exists to proceed with a review and update.  The Committee recommended to the Secretary that the Deputy Secretary be tasked with oversight of the VASRD systematic review and update process to insure that the VBA, VHA and General Counsel are fully integrated into the process.  We proposed a level of permanent staffing in both VBA and VHA to insure that all fifteen body systems are reviewed and updated, as necessary, in a timely way.  We believe that a minimum of three body systems can and should be reviewed and updated each year on a recurring basis.  We proposed a priority among the body systems that takes into account the following: body systems that are at greatest risk of inappropriate evaluations; body systems are considered problem prone, and relative number of veterans and veterans’ payments associated with each body system. 

The Secretary’s response to the recommendations in our interim report concurs in general with most of our recommendations but does not commit to specific management procedures, staffing, or time line for review and update.

The Committee has proposed a detailed procedure for review and updating the VASRD.  This procedure is an addendum to the report we are submitting in accordance with our statutory requirement.  It may be overly prescriptive in nature, but it offers a standing procedure for reviewing and updating all body systems.

The Committee foresees requirements for two studies.  The first is to validate horizontal and vertical equity in the tables of disability. For example, prior studies have shown a disparity in earnings capacity between mental and physical disabilities at most levels.  VA should conduct this study every three to five years.  It can be done internally or by contract.  The second study is an in depth study of the Vocational Rehabilitation Program.  A contract study was begun last year but cancelled.  Low participation rates and completion rates indicate need for a study to assess all programs and make recommendations for change.  This study can also be done internally or by contract.

Regarding disability compensation for non-economic loss, also referred to as quality of life, we are reviewing the Special Monthly Compensation program as a potential model for quality of life system and we are analyzing options for forms of compensation beyond a monetary stipend.  One of our concerns is to avoid a compensation system for non-economic loss that encourages seeking increasingly higher levels of compensation.  Our current view is that quality of life compensation should be limited to clearly defined and very serious disability.

Regarding disability compensation related to transition from service member to veteran status, we are reviewing the many recent changes and improvements to the transition programs such as the recent caregiver legislation to determine if and where gaps in coverage and assistance may remain for veterans and families.  We are also reviewing the Vocational Rehabilitation and Education program as it relates to transition for disabled veterans.

In summary, our Committee’s work is progressing on a broad front.  The parameters of our charter offer us the opportunity to look at all aspects of disability compensation and we are doing so.   The Committee has excellent access to the Secretary and his staff.  The VA staff is responsive and helpful to the Committee’s requests for information.  It is our intent to offer interim reports to the Secretary semi-annually and to provide copies to the Veterans Committees of both Houses of Congress.

Mr. Chairman, this concludes my statement.  I welcome any comments or questions.