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Disability Claims Ratings and Benefits Disparities within the Veterans Benefits Administration.

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OCTOBER 16, 2007

SERIAL No. 110-53

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BOB FILNER, California, Chairman


VIC SNYDER, Arkansas
JOHN J. HALL, New York
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
TIMOTHY J. WALZ, Minnesota

STEVE BUYER,  Indiana, Ranking
HENRY E. BROWN, JR., South Carolina
BRIAN P. BILBRAY, California




Malcom A. Shorter, Staff Director

HARRY E. MITCHELL, Arizona, Chairman

TIMOTHY J. WALZ, Minnesota
GINNY BROWN-WAITE, Florida, Ranking
BRIAN P. BILBRAY, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.



October 16, 2007

Disability Claims Ratings and Benefits Disparities within the Veterans Benefits Administration


Chairman Harry E. Mitchell
    Prepared statement of Chairman Mitchell
Hon. Ginny Brown-Waite, Ranking Republican Member
    Prepared statement of Congresswoman Brown-Waite
Hon. Zachary T. Space
Hon. Cliff Stearns
Hon. Timothy J. Walz


U.S. Department of Veterans Affairs:
Jon A. Wooditch, Deputy Inspector General, Office of Inspector General
    Prepared statement of Mr. Wooditch
Ronald R. Aument, Deputy Under Secretary for Benefits, Veterans Benefits Administration
    Prepared statement of Mr. Aument

American Veterans (AMVETS), Ray Pryor, USN (Ret.), Chillicothe, OH
    Prepared statement of Mr. Pryor
Kenney, John J. "J.J.", USMC (Ret.), Homosassa, FL, Veteran Service Officer, Citrus County, FL
    Prepared statement of Mr. Kenney
Institute for Defense Analyses, David E. Hunter, Ph.D., Research Staff Member, Cost Analysis and Research Division
    Prepared statement of Dr. Hunter


American Legion, Steve Smithson, Deputy Director, Veterans Affairs and Rehabilitation Commission, statement
American Legion, Department of Ohio, Donald R. Lanthorn, Department Service Director, statement
Wilson, Hon. Charles A., a Representative in Congress from the State of Ohio, statement


Post Hearing Questions and Responses for the Record:

Hon. Harry E. Mitchell, Chairman, and Hon. Ginny Brown-Waite, Ranking Republican Member, Subcommittee on Oversight and Investigations, Committee on Veterans' Affairs, to Hon. Gordon H. Mansfield, Acting Secretary, U.S. Department of Veterans Affairs, letter dated November 2, 2007, and VA responses


Tuesday, October 16, 2007
U. S. House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs,
Washington, DC.

The Subcommittee met, pursuant to notice, at 2:04 p.m., in Room 334, Cannon House Office Building, Hon. Harry E. Mitchell [Chairman of the Subcommittee on Oversight and Investigations] presiding.

Present: Representatives Mitchell, Space, Walz, Brown-Waite, and Stearns.


Mr. MITCHELL. This hearing will come to order. This is the Subcommittee on Oversight and Investigations hearing on Disability Claims Ratings and Benefit Disparities within the Veterans Benefits Administration (VBA). I want to thank everyone for coming this afternoon.

For years the Veterans Benefits Administration has experienced problems maintaining adequate accuracy and consistency data within it’s rating system. The purpose of this hearing is to evaluate what the VA is doing to fix these problems. Their ability to keep accurate records is essential to ensure the quality of veteran disability ratings now and into the future.

Let me first thank Congressman Space who has quickly become a leader in working to address this issue. He and Ranking Member Ms. Brown-Waite took the lead in assembling the first panel. The disability ratings system has been an issue of serious concerns since 2002 following an eye-opening U.S. Government Accountability Office (GAO) Report. On January of 2003, the GAO designated the U.S. Department of Veterans Affairs' (VA’s) Disability Program as high risk. This designation resulted from concerns about consistency of decision making and accuracy of records.

This Subcommittee is aware of the Department’s efforts to correct these issues, but more has to be done. I am concerned about the wide variations in average compensation per veteran and grant rates that persist between States. After years of recommendations by the GAO and the VA Office of Inspector General (OIG), the VA has failed to collect and maintain an accurate database. This must change because our Nation’s veterans cannot be forced to wait any longer. According to VBA's Systematic Technical Accuracy Review or STAR, accuracy of regional office (RO) decisions vary from 76 percent in Boston to 96 percent at the Fort Harrison regional office.

This variation is troubling. More troubling is that STAR only looks at accuracy and completely ignores consistency of decisions. The VA has implemented a new data system called Rating Board Automation 2000. This system collects more information but it continues to set roadblocks for analyzing claim denials for disabilities like post traumatic stress disorder (PTSD) and traumatic brain injury (TBI). PTSD and TBI are complicated and often misdiagnosed disabilities. Because of their nature, rating a veteran with these disabilities is somewhat subjective.

We understand there are variances between States and claims decisions and that is to be expected. But the subjective nature of the ratings process does not do our veterans justice. We are sending the wrong message to our Nation’s veterans. We are saying that even though you served courageously for your country, you better live in the right State and hire professionals when filing for disability benefits. This is unacceptable.

Just last week we heard from the Veterans Disability Commission on the necessity to provide equitable treatment for all veterans, but this is not the case today. Aside from maintaining accurate records, we need to make sure that claims officers nationwide receive the same training. This training must be focused on the intricacy of each disability imposed on any veteran young and old. I know that we can work together in a bipartisan way with the VA to ensure that our veterans get the best and most fair benefits available.

Before I recognize the Ranking Republican Member for her remarks, I would like to swear in our witnesses. Will all witnesses from all three panels please rise. And would you raise your right hand.

Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth.

Thank you. I would now like to recognize Ms. Brown-Waite for opening remarks.

[The statement of Chairman Mitchell appears in the Appendix.]


Ms. BROWN-WAITE. Thank you very much, Mr. Chairman. The Institute for Defense Analyses (IDA) recently issued their final report in March of this year on the analysis of the differences in disability compensation in the Department of Veterans Affairs. This report was completed at the VA’s request to identify and collect data on compensation of recipients.

According to this study, the VA must do three things. One, put forth a national effort of consistency of claims processing; two, make certain that the raters receive consistent training on a national basis; and three, collect and maintain valid data to analyze national statistics and trends.

I am very interested in hearing from the three panels, but especially I want to hear how VBA actually plans to implement those recommendations. It is apparent that VBA must take steps to improve training and to modernize it’s rating system.

Whether a veteran's claim is rated at the St. Petersburg VA regional office or the Phoenix, Arizona, VA regional office, the same standard should be applied when making a rating decision on the claim.

I would like to mention a bill that I have co-sponsored with my colleague, Mr. Lamborn, H.R. 3047, the "Veterans Claim Processing Innovation Act." This legislation would improve the veterans claim process at VA by changing the work credit system for VA. To do this, the measure establishes a fully electronic system pilot to streamline the claims process.

That bill also requires the VA to have an independent organization certify the effectiveness of VBA's training programs and allow family members of veterans who have passed away to continue the original claim instead of forcing the dependents to start the claim all over again.

I hope that this legislation will pass the Committee before the end of this Congress and be considered on the full House Floor. I look forward to hearing more from our witnesses today. And with that, I yield back the balance of my time, Mr. Chairman. Thank you.

[The statement of Congresswoman Brown-Waite appears in the Appendix.]

Mr. MITCHELL. Thank you. Mr. Space?


Mr. SPACE. Thank you, Mr. Chairman, and thank you Ranking Member Brown-Waite for holding today’s Subcommittee hearing.

I requested this hearing because of my concern for the existence of inequities in veterans disability payments. More specifically, I requested this hearing because of my home State's dismal ranking in average disability payments. Ohio ranked dead last among States with an average of under $8,000. The national average according to the Institute for Defense Analyses Report based on 2005 data was $8,890. And the highest ranking State was New Mexico with an average of over $12,000.

I am concerned that veterans in Ohio, who have served just as honorably as veterans in other States, may not be getting a fair deal by virtue of where they reside. In my district, one is more likely to live below the poverty line than to have a college education. That said, it is a struggle for many of my constituents to meet the demands of the cost of living in Ohio.

Poor veterans in Ohio need every disability dollar they have earned. I hope this hearing is a step in addressing that. I understand that some of the State-by-State inequity may be a result of factors beyond the control of the VA. However, I also believe there is much that can be corrected. There is a need for processes to increase consistency in the training given to claims raters. And furthermore, there is a need for oversight over the regional cultures that we will hear about today.

I want to know that every possible step toward addressing what is fixable about this situation is being taken. I am privileged to use my membership on the Subcommittee to shed some light on this grave problem. Congressman Charlie Wilson, a good friend and colleague, wanted very much to be here today. However, he is recovering from recent surgery and on his behalf and on behalf of his constituents as well as mine, I look forward to hearing today’s testimony to determine how Congress can best work to address the disability claims disparity that exists, and that is quite frankly negatively impacting the brave heroes of the great State of Ohio.

And I should also add that I am very grateful to have on hand today one of my constituents, Mr. Ray Pryor of Chillicothe, Ohio, who will present testimony on behalf of AMVETS.

I would like to request permission to submit the written statement of Mr. Donald Lanthorn, Department Service Director for the Ohio American Legion, for the record, pending review by the appropriate authorities.

Thank you, Mr. Chairman.

[The statements of Congressman Charles A. Wilson and Donald Lanthorn appear in the Appendix.]

Mr. MITCHELL. Thank you. Mr. Stearns?


Mr. STEARNS. Yes. Thank you, Mr. Chairman. I guess we all know there have been many organizations that review the inconsistencies within the Veterans Benefit Administration.  And they have recommended that the VA start gathering data and formulating metrics in order to better monitor any disparities.

The most recent investigation into consistencies between the VA regional offices and VBA Compensation Benefits consist of a Government Accounting Office Report that was issued in 2002. Another one was issued in 2003 and a third was issued in 2004. And they are followed by the Office of the Inspector General investigation in 2005 and an Institute for Data Analysis that the Chairlady mentioned earlier in the report in 2007.

My colleagues, in 2002, the GAO found that the VA did not systematically assess decision making inconsistencies to determine the degree of valuation variation that occurs for specific impairments, and recommend that the VA begin to gather useful data that would allow them to determine if there were problems with inconsistencies. Following the GAO of 2003 investigation, the VA began to better monitor accuracy. But it appears they still did not address the inconsistencies.

When the GAO returned to the issue in 2004 and determined the VA had not yet acted.  They had yet to act on the 2002 recommendations. So, Mr. Chairman, we have these reports and the VA is not consistently acting on them. And as we go down this line of reports, we find there is less action than we would expect. GAO also noted that data in the VA benefits delivery network system did not, "provide a reliable basis for identifying indications of possible decision making inconsistencies among regional offices."

So the question is, when you have all this information over many years, why aren’t they acting? In 2005, the VA OIG issued its own report now highlighting various inconsistencies. So we have all these reports and you have the VA’s own OIG report. There are disparities in claims ratings and payments within the VBA, some of the most significance being 100 percent disability ratings, and most specifically, as mentioned for post traumatic stress disorder and individual unemployment ratings.

Veterans with either a 100 percent disabled or individual unemployability (IU) rating received 58 percent of the total payment made by VA throughout the country, yet they make up only 17 percent of the total veterans population.

So both the IU ratings and the PTSD are extremely subjective. And I think hopefully our witnesses can give us a better understanding of this. This is a critical issue that must resolved, especially in light of the reiterated frequencies of these various agencies indicating to us this is a problem. And there has been no one acting for four or five years, and yet we come back and talk about it.

So I am interested in hearing from our witnesses about the possibility of perhaps modifying the current data compilation program to collect more information on claims ratings to better monitor possible disparities.

So, Mr. Chairman, I appreciate your hearing on this, and hopefully the witnesses will be able to help us. Thank you.

Mr. MITCHELL. Thank you. Mr. Walz?


Mr. WALZ. Thank you, Mr. Chairman. And thank you to every one who is here today. We truly appreciate it and please know that everybody in this room is committed to our veterans. I would like to say Chief Kenney that I find no greater friend to the veterans in our County Veteran Service Officers (CVSOs) so I thank you for your work there. They understand who they go to and who is their advocate to get things done. And in our Veterans Service Organizations (VSOs) that are speaking for veterans and understanding, we see ourselves and our role in this Oversight and Investigation Subcommittee to help facilitate any changes that are necessary to help our veterans.

I have said it dozens of times and I will continue to say it. We know that the people and those great civil servants that work in the VA want to deliver that service, but as my colleague Mr. Stearns so clearly and sufficiently pointed out, there have been plenty of suggestions to make changes, to make this better that have not happened. And I think it is incumbent upon us to make sure that this Committee is doing that.

So this is an issue that is on our veterans' minds.  It is on my constituents' minds.  The Disability and Claims System is something that they feel that there is a real injustice being done to our veterans. And this is just one more of those issues. But I do believe that there is absolutely no reason to believe we cannot get this fixed. There are some good hard data out there and I think there are some things that we can put into place. And I hope, as my colleagues have said, to hear from you on how we can do this.

And with that, I yield back, Mr. Chairman.

Mr. MITCHELL. Thank you. I ask unanimous consent that all Members have five legislative days to submit a statement for the record.

Seeing no objections, so ordered.

I would now like to call on Ms. Brown-Waite to make her introductions.

Ms. BROWN-WAITE. Thank you, Mr. Chairman. Thank you for giving me the opportunity to introduce one of my constituents and one of my favorite VSOs just because of the number of veterans that he deals with every single day, and yet he does it in a very cheerful manner. And that is John, "J.J.," as everyone knows him as, Kenney who is testifying before us today.

There is a very strong sense of service to the country that runs in the Kenney family. J.J. Kenney is the son of a World War II combat-wounded veteran. He, along with three of his other four siblings, served during the Vietnam War. His older sister retired as a Chief Navy Corp with 20 years in the U.S. Navy.

J.J. himself served in the United States Marine Corps from November 1963 until his retirement in September 1986 with over 20 years of service in the Marines.

As a training officer at the Navy Parachute Rigger School, he completed a total of 34 parachute jumps. After retirement from his civilian positions he moved to Florida and like many people got a little bored and re-entered the workforce as Citrus County’s Assistant Veterans Service Officer.

After just 18 months, the County Commission recognized his talents and he was selected as the County Veterans Service Officer.

In 2002, his office was selected as the best large service office based on population by the Veterans of Foreign Wars (VFW) Department of Florida. J.J. is an accredited service officer holding accreditations for National Association of County Veterans Service Officers, Florida Department of Veterans' Affairs, the American Legion, Disabled American Veterans (DAV), and the Veterans of Foreign Wars.

J.J. Kenney and his beloved wife of 42 years, Mary Ann, reside in a beautiful part of my district, Homosassa, Florida. They have three children and ten grandchildren. I am very pleased that he is here today to share his testimony. And we need to listen to the disparities that he will bring forth.

Thank you, Mr. Chairman and thank you J.J. for being here.


Mr. MITCHELL. Thank you. Mr. Space?

Mr. SPACE. Thank you, Mr. Chairman. Ray Pryor served the United States Navy on active duty from June of 1973 to May of 1975 making four tours aboard ships in the South Pacific. He then served six additional years in the Naval Reserve. Following Mr. Pryor’s military service, he was an employee of Ohio’s Job and Family Services for 25 years, retiring in June of 2005.

In addition, Mr. Pryor served as a veterans employment State representative for 20 years with the last five years as the veterans licensing and certification coordinator for veterans programs. Mr. Pryor currently serves on the Ross County Veterans Service Commission as a county employee, and along with four commissioners, oversees the operations of the County Veterans Service Office. He sits on the South Central Ohio Homeless Veterans Committee; Ross County Veterans Council; Veterans in Transition, Inc.; and belongs to AMVETS, the American Legion, the DAV, Vietnam Veterans of America, and the VFW.

As a resident of Chillicothe, Mr. Pryor is, as I mentioned, a constituent of mine and a member of my Veterans Advisory Board. He is accompanied by Raymond Kelley, the Legislative Director for AMVETS. And I welcome Mr. Pryor and Mr. Kelley and thank them for taking time to be here today.

Mr. MITCHELL. We will begin with Mr. Kenney. You have five minutes.








Mr. KENNEY. Good afternoon, Mr. Chairman, Members of the Committee. I would like to thank the Committee for this invitation to speak this afternoon about some of the disparities in the awards of benefits from State to State.

I also would like to thank in front of her peers, Congresswomen Brown-Waite for her efforts on behalf of the veterans of Citrus County, Florida. Thank you, Congresswomen.

I would like the Committee to know that I am not here today to knock the VA. We, in the State of Florida, enjoy an exceptional relationship with our one and only regional office in St. Petersburg. Many of my fellow service officers in other States only wish they had the relationship with their RO that we do. If I have a problem, I can pick up the telephone and talk directly with the service center manager and any of the department heads and get the answers I need when I need them. When I call them, they call me back.

There does, however, continue to be a disparity in the awarding of benefits from State to State. And one wonders how this could be possible since all 50 plus regional offices are guided by the same regulations; the 38 Code of Federal Regulations (CFR) and the M21.

One, the 38 CFR provides the necessary information with regard to the ethical conduct in the adjudication of veterans claims along with how and when the information about veterans should be handled. Additionally, the 38 CFR provides the various information required with regards to diagnostic codes for the different illnesses and injuries along with the percentage to be awarded for severity of the disability.

The M21 Manual is basically a Standard Operating Procedure. What do I do to get from point "A" the receipt of the claim, to point "B" the decision. It would appear a relatively simple task of reviewing the evidence supplied by the veterans; reviewing the service medical records for an in-service occurrence; verifying character of service; determining from the medical evidence if the condition is chronic in nature or if the disease or illness is presumptive. Presumptive meaning that veteran has filed a claim within one year of separation or has a disability as a result of exposure to an environmental hazard; i.e. Agent Orange, radiation or was a prison of war.

There are several elements that are not be considered and they include the human element, the veteran population, and the inventory of the various regional offices. The human element is in every decision the VA renders. However, it differs from State to State. I know the training received by VA is superb and to the best of my knowledge standardized. So why the disparity in the awards?

I would like to provide the Committee with a couple samples. In the first example, the veteran who I will call Mr. Smith, resides in California. He entered the Armed Forces in the mid 1960s. At boot camp, the veteran received his inoculations with the air gun. In the late 1990s, early 2000, he was diagnosed with hepatitis C. He had not used drugs, had no tattoos, and had not engaged in any improper conduct.

He applied for service-connected compensation based on the use of the air guns providing medical evidence that supported his claim. He was awarded service connection.

Veteran number two, we will call him Mr. Jones, resides in Florida and entered the service approximately the same time as Mr. Smith. He too received inoculations with the air gun. Around the same time as Mr. Smith, Mr. Jones was diagnosed with hepatitis C. He initially thought it may have been the result of surgery he had undergone at the VA. Thinking he had received blood during the surgery, he applied for compensation thinking the blood may have been tainted.

Upon receipt of the claim, the VA located the surgical notes that indicated Mr. Jones had not received any blood products and denied his claim. In discussion with the veteran, again ruling out drugs, inappropriate behavior or tattoos it came down again to the air gun.

The veteran again applied for compensation based on the air gun providing some of the same evidence as Mr. Smith did in his claim. Additionally, he found a medic who was administering shot to the same time Mr. Jones was at boot camp. The medic verified the method the air gun was used and this supported by medical evidence that was—

Mr. MITCHELL. Can you wrap it up a little?

Mr. KENNEY. Yes, sir. Basically, both individuals, same disability, one granted, one not granted.

And the same thing applies. There was no disparity in the two of them. And the second example I had for you was with reference to hearing. Two veterans, same problem, hearing loss. Same type of service, same type of exposure. Veteran from New Jersey was approved, veteran from Florida was denied. That case is now on appeal.

It is apparent to me that the VSR is—the human element played a significant role in all these claims. How to remove that factor from the process, I don’t know. Continued training is probably the best bet in reducing this factor in the claims process.

We look at the populations of Texas, Florida, and California. You can see the populations run from three million down to one million with Florida having the second largest amount of veterans and the oldest veterans population but we only have one regional office. California has three, Texas has two. That is another problem.

I submit that the VA should take a look at or look at it basically like they did with the Capital Asset Realignment for Enhanced Services (CARES) Commission. Look at the States, think of possible realignment, additional regional offices, and standardize the training if it is not standardized.

Mr. Chairman, thank you for your time. And again I appreciate the opportunity to come here before this Committee and your patient listening.

[The statement of Mr. Kenney appears in the Appendix.]

Mr. MITCHELL. Thank you. Mr. Pryor, you have five minutes.


Mr. PRYOR. Thank you, Mr. Chairman and Members of the Subcommittee. And a special thank you to Congressman Space for inviting me over. Thank you for providing the AMVETS the opportunity to testify regarding the issue of disability claims and ratings and benefits disparities within the Veterans Benefits Administration. This hearing is very important in as it addresses an issue that continues to plague our Veterans Benefits Administration and leaves veterans frustrated and suspicious of the system that is in place to support them after their service to our great Nation.

In examining the factors that have led to the disparities in claims ratings two large overlying conditions are present that have allowed the gaps in ratings to exist and several circumstances have occurred which have exacerbated the problem.

First, and foremost, we are working with the system based on humans making decisions. Their perceptions understanding of conditions and occasional mistakes are going to play a role in disparities. If this was the only issue than the disparities would not be regionally based, they would be proportionately distributed throughout VBA.

However, there is evidence that displays disparities between regional offices. AMVETS believes these disparities are caused by two separate, but related, groups within the claims process. The Veterans Service Representative, the Rating Veteran Service Representative, the Decision Review Officer (DRO) and the rating—on the rating side and the compensation and pension (CP) doctors whose evaluation of a veteran is used by the regional office to decide a claim.

The reason these two groups have a great influence on the outcome of the veterans claims and why there are regional disparities is due to the personalities of the doctors, the raters, the review officers, the personalities of the regional office in general. These regional personalities develop because new raters and DROs are trained by the regional office and they develop the regional personality in styles of common terms and language are used by the raters when filing a claim. Terminology such as full range of motion compared to essentially full range of motion could change a rating by ten percent.

Likewise, physicians perceptions and similar language usage can alter a claim. Veterans Service Officers will state they routinely see compensation and pension exams which will describe the patient with cookie cutter language leaving room for subjective interpretation.

In addition to these personalities that determine compensation on similar if not identical claims with a broad range of outcomes is the backlog of the claims themselves—VBA and the performance credit system that monitors the number of claims filed by the raters and DROs.

Currently there is no oversight of the quality of work the DROs perform. As identified by the AMVETS sponsored "National Symposium for the Needs of Young Veterans," DROs are evaluated on the number of claims they submit, but not necessarily on the number of claims that are submitted and that are good claims and have awards given to them or are denied or lowered.

The backlog has increased the challenge of the number of claims that are overturned and remanded. When they are overturned and remanded they come right back into the system through appeals. AMVETS suggest three recommendations which will assist in narrowing the disparities in claims and reduce the backlog.

First, a centralized training facility that will be tasked with teaching new raters and DROs in a standardized outlined process in filing and reviewing claims. This will remove much of the regional personality that affects the disparity in the claims as they are.

Secondly, there are needs to improve the oversight of both the rater and reviewer and CP doctors. In regard to the CP, oversight should be placed and to ensure the examiners guide is being utilized. This could be done through the Whistle Blower Program which would allow a veteran to make an appeal or make a report on a compensation and pension (C&P) exam that went wrong.

This system—a system needs to be developed that will not only ensure claims are being filed but the claims are being filed properly and completely. H.R. 3047 makes efforts to improve the credit receive system which the DROs and rating veterans service representatives (RVSRs) currently work. This system, or a system that monitors a ratio of cases remanded were overturned to the total number of cases referred is essential in improving the claims process.

Lastly, understanding this is a two- or three-year process, hiring more staff to reduce the burden of the backlog is critical. There is no single, simple solution to the disparity problem, but identifying the roots of the problem and tasking VA with finding solutions to these problems is critical if improvements are going to recognize the claims system.

Mr. Chairman, this concludes my testimony.

[The statement of Mr. Pryor appears in the Appendix.]

Mr. MITCHELL. Thank you. We will now open up for questions. And I have a question, first of all, to Mr. Pryor.

Mr. PRYOR. Yes.

Mr. MITCHELL. You stated that the current disability rating disparities leave veterans frustrated and suspicious?

Mr. PRYOR. Absolutely.

Mr. MITCHELL. I think this is perfectly understandable and justified.

Mr. PRYOR. Right.

Mr. MITCHELL. In your opinion, and maybe you gave it in your last three recommendations, what can we do in Congress, short of a complete overhaul, to restore confidence in disability ratings?

Mr. PRYOR. We need to give the VA system the support at the Congressional level, full funding, money to hire new staff people. Staff people to help decrease the backlog, bring extra people in or people in to work on those claims. And do exactly as we talked support the initiative to make a standardized training system throughout the VA system where all are trained the same nationwide to support the veterans that are out there.

Mr. MITCHELL. And this question is to either Mr. Kenney or Mr. Pryor. We are all aware that the disability claims backlog is embarrassingly long. This is due in large part to inadequate data systems. Pressure is being placed on decision review officers to meet quota standards in order to address this backlog. It seems to me that this pressure is pushing complicated cases to the back burner when they should be receiving extra attention. What should be done in Congress or the VA to ensure that we put an end to this practice?

Mr. PRYOR. Well again we need to definitely make sure that the rating and adjudicators and the people reviewing those claims are fully trained and have a standardized manual or standardized process that they are using to make the decisions on ratings.

Secondly, when they make poor decisions and they make a low rating or a non-rating and that goes back to the veteran, that is going to cause the backlog if they are making those types of decisions when they should be rating a claim, that is going to go back to the veteran. The veteran is going to file an appeal. It is going to go back into the system and it is going to continually even bog the system down even more.

So maybe we should have a review of claims that are denied before they ever go back to the veteran, you know that might be an idea. But we need to be have a standard process and everybody rating from the same process.

Mr. KENNEY. Mr. Chairman, If I may? I know in our regional office one of the top priorities are the young men and the young women that are catastrophically injured as a result of our current conflict. And that has with some of our older veterans given them the perception that they are being placed on the back burner. And we assure them, you know, the VA went about and they established a Tiger Team in Cleveland to handle the backlog of those veterans over 70. But until VA gets the funding that they need to fully staff, it is just going to continue.

And it is, I think, it is going to get worse because most of, I would say and I am going to guess at 50 percent of the staff in the VA are about my age. About two years, three years from now, sir, they are going to be thinking very seriously about that cabana on the beach. And the VA is going to get hit with a large loss of personnel. And I think now is the time the VA has got to start thinking about those three, four years down the road when those people are going to be leaving.

And I would suggest that similar to the BOOTS to Teachers Program. We should have a BOOTS to VA problem? Why not reimplement Project Transition? Military personnel that are planning on leaving the service either due to the expiration of their enlistment or their retirement. Six years prior to that put them into a transitional program and put them in a VA Office. Have the VA offer them employment. Put them into a project transition. And then at their retirement or their release from active duty, these individuals will be six months ahead of everybody else. And they are coming off the line. They know what these troops have been going through because they are the troops. And I think that would greatly improve.

Mr. MITCHELL. Thank you. Ms. Brown-Waite?

Ms. BROWN-WAITE. Thank you, Mr. Chairman. That is an excellent suggestion, J.J. And as you were talking about, you know, people looking forward to the cabana on the beach, it made me think that you know even though right now there is a slow down in the housing market, people are not going to retire to, with all due respect, Alaska. They are going to be coming to Florida. And Florida will have even more veterans than what they—

Mr. MITCHELL.  And Arizona.

Ms. BROWN-WAITE. —and Arizona. Even more veterans than what they do now. Right now we exceed Texas in the number of veterans that Florida is caring for and yet Texas has two regional offices. Tell me what if another regional office were to be placed in Florida, what do you think the outcome would be. Would it be more timely decisions? Tell me what your expectation would be if another regional office could be placed in Florida?

Mr. KENNEY. If we had another regional office in the State of Florida, I have no doubt that the claims process would be expedited. I think the last thing I saw was we had like 25, 26,000 claims in the inventory at St. Petersburg. So you split that, you have 13,000 each regional office. If we staff up the second regional office with experienced raters, plus a contingency of newly assigned or newly raters, DROs, I think it can’t help but improve the system.

As we not only do we have the State of Florida, they are handling Puerto Rico—

Ms. BROWN-WAITE. And Georgia.

Mr. KENNEY. —and the U.S. Virgin Islands. So they are definitely, our regional office is overwhelmed.

Ms. BROWN-WAITE. Mr. Pryor, let me ask you a question. The IDA report that we will be hearing about in a later panel focuses on six recommendations for consideration by the VA. They are standardization of initial and ongoing training for rating specialist, to standardize the medical evaluation reporting process, to increase oversight and review of the rating decisions, to consolidate rating activities into a central location, and to develop and implement metrics to monitor consistency in adjudication results, and expand and improve data collection and retention.

I know that you assist veterans in their claims processing. If only three of these recommendations could be implemented, which three do you think should be at the top of the list?

Mr. PRYOR. Again, standardizing the training and the process for all of the adjudicators and the people that are reviewing the claims at the regional level, I think, definitely should take place. I think that should be our number one priority.

The claims itself and developing the claims process once it reaches the VA system, the regional office the VA system should be I think looked at very heavily. I, you know, possibly setting up a pre-screening a claim before it ever goes to an adjudicator to make sure everything is there. So that when it does go to the adjudicator, the adjudicator, the person reviewing that claim, can make good decisions.

So standardizing and maybe reorganizing or revamping that claims process and what is happening with that claim once it gets to the regional office would be the second issue. I really believe that.

The third issue to me is very important, is the staffing issue and to the AMVETS it is very important. I don’t think you can do any of those things unless you staff appropriately and get that backlog out of there. Taking care of that backlog.

Ms. BROWN-WAITE. As you know, there are 1,500 that I believe that were in last year’s appropriations. Obviously, there is a training process that takes place there. There are many of who believe that certainly could at least double maybe triple that number to work on that backlog.

I appreciate your comments, sir. Thank you very much.

Mr. PRYOR. Thank you.

Ms. BROWN-WAITE. J.J., while the yellow light is on, did you want to add anything?

Mr. KENNEY. I think he pretty well covered it. We I know the VA has the Veterans Claim Assistance Act. They have a duty to assist now. We in the field that sit across the desk from the veteran, it is our responsibility. And in my office I try not to forward any claim that is not ready to rate.

Mr. BROWN-WAITE Thank you very much. And I yield back, Mr. Chairman.

Mr. MITCHELL. Thank you. Mr. Space.

Mr. SPACE. Thank you, Mr. Chairman. Mr. Pryor, I wanted to just inquire if we could in maybe more real world terms about the issue of personalities, whether it be of claims or physicians who are doing compensation or pension exams, or whether it be on the raters that are making their determinations based upon, in large part anyway, those exams.

Can you give us an example, perhaps, of how that, you know that term personality that you referred to in real world application what we are talking about here?

Mr. PRYOR. Well you mentioned New Mexico and just last week I was working with a Veteran there in Southern Ohio who had a claim for PTSD. And the veteran was awarded I think 20 percent service connection on PTSD and was in the process of filing an appeal. And I don’t know who he talked with at the VA System, but you know he was told you know, "If you want 100 percent, go to New Mexico." Because there was C&P doctor down there that was a war time veteran that reviews claims. And anybody that was in combat and saw battle was automatically recommended 100 percent disabled.

That is where the personalities, past experiences, a persons' life—that human factor gets involved. And we are never, I guess, we will never get totally away from that, but if we try to standardize and provide that person with standard formula that he has to go by or they have to go by then, I think we are going to have more standard awards across the Nation, State by State.

Mr. SPACE. Right. And I mean are you aware of any reputation that any particular facilities in your region perhaps may have from a personality standpoint that may affect the amount of awards that are rated?

Mr. PRYOR. I am, you know, I think each facility—first of all, I want to say that every VA facility that I have ever worked with the people have been great people. But if a VA facility is short staffed and does not have the staffing level to give good in-depth service and the people, the doctors, the people are spread so thin that they are dealing with thousands and thousands of people, then that is going to have an affect on their decision making and how much care they are going to take on a claim, how much care they are gong to take with one person. And you may have one hospital, for instance the hospital there in Chillicothe which is a very fine hospital, but they may be staffed short, staffed in the psychoanalysis area and that is an area that is going to suffer in that hospital.

Mr. SPACE. Thank you, Mr. Pryor. Again, thank you for coming to Washington for this hearing. And I yield back.

Mr. MITCHELL. Thank you. Mr. Walz?

Mr. WALZ. I have no further questions, Mr. Chairman. I yield back.

Mr. MITCHELL. Thank you. Any further questions? Well thank you very much. We appreciate you coming today.

Before we get to the second panel, let me just say that we are about to take some votes and the votes will be about 30 minutes. So if the next panel would come up we can get started anyway. And once the buzzer rings we will recess until we have the votes.

And I welcome panel two to the witness table. Dr. David Hunter is a Research Staff Member at the Institute for Defense Analyses and the Project Leader for IDA's recent report on disparities.

Mr. Jon A. Wooditch is the Deputy Inspector General in the VA’s Office of Inspector General and an original author of the OIG's report from 2005.

Their insight and experience on this issue is welcomed. Mr. Hunter you have five minutes to make your presentation.


Mr. HUNTER. Mr. Chairman and Members of the Subcommittee, I am please to come before you today to discuss IDA’s work on disability compensation conducted for the Department of Veteran Affairs.

In May 2005, the VA asked the Institute for Defense Analyses to conduct a study of the major sources of the observed variations across States, and one, the average payments that veterans receiving disability compensation, and two, the percent of veterans receiving disability compensation.

My testimony today will be based on the results of that study which have been documented in IDA paper P4175. For the first question, the variation in average payments across States, we found that the average award in this State is almost entirely driven by the proportion of recipients who are receiving maximum awards. For the maximum awards, we found that awards of individual unemployability or IU exhibited the greatest variability across States.

Our study quantified the amount of variation attributable to States having veteran population with different characteristics. We found that State-to-State differences in compensation recipients account for 50 to 70 percent of the observed variation across State in average awards.

The major factors we identified that contribute to the observed variation across States are post traumatic stress disorder or PTSD, power of attorney representation, and period of service of the veteran.

For the second question, the variation of percent of veterans receiving compensation, we found that application rates appear to be the key driver of the variation. In addition, we found that military retirees are over four times as likely to be receiving compensation as non-retirees. And this alone accounts for over 40 percent of the variation across States.

Based on our findings and observations we made six recommendations for consideration by the VA. I should mention we examined the process by which VA adjudicates claims and found that the process has potential for producing persistent regional differences in rating results.

Our recommendations were, one, standardize initial and ongoing training specialists. Two, to standardize the medical evaluation reporting process. Three, to increase oversight and review of the rating decision. Four, to consolidate rating activities to a central location or to fewer locations. Five, develop and implement metrics to monitor consistency and adjudication results. And, six, to improve and expand data collection and retention.

Now these recommendations aim to improve the consistency of the adjudication process.

Mr. Chairman and Members of the Subcommittee, that concludes my remarks. I have provided a more extensive statement that I ask be included in the record. And I am available for questions.

[The statement of Dr. Hunter appears in the Appendix.]

Mr. MITCHELL. Thank you, Dr. Hunter, and we do have that statement. It will be included.

Mr. HUNTER. Thank you, sir.

Mr. MITCHELL. Mr. Wooditch?


Mr. WOODITCH. Thank you, Mr. Chairman and Members of the Subcommittee.

I am pleased to be here today to discuss the OIG's report on State Variances and VA Disability Compensation Payments issued in May 2005. With me is Joe Vallowe, Deputy Assistant Inspector General for Management and Administration, who is responsible for tracking implementation of OIG report recommendations.

Variances in average annual disability compensation payments have existed for decades. Our report indicated that the variance between the high and low State in fiscal year 2004 was $5,043. To understand why this variance existed we identified and assessed more than 20 possible factors.

We discovered that some factors contributing to the variance were not within VBA's control. As such, we concluded that some level of variance is expected. We also discovered that some factors are within VBA's control, especially disability rating decisions, where much of the information needed to make these decisions is subject to varying degrees of interpretation in judgment.

This occurs with both veterans when providing information about their medical condition and VBA claims adjudicators when assessing it for rating purposes.

Rating decisions can also be influenced on how medical examination results are presented, by the amount of training and rater experience, and by the Rating Schedule itself.

This subjectivity results in inconsistent ratings for similar conditions, which can influence variances in payments among States. As a result, the issue is not whether a variance exists, but whether the magnitude of the variance is acceptable.

Our 2005 report includes eight recommendations aimed at improving consistency of ratings. In particular, we recommended that VBA conduct a study of compensation payments in order to develop data and metrics for monitoring and managing variances.

The December 2006 Institute for Defense Analyses report conducted as a result of this recommendation confirmed our findings and made meaningful recommendations to assist VBA in understanding and reducing unacceptable variances.

In preparation for this hearing, we obtained compensation payment data by State for fiscal years 2005 and 2006. Our review of this data revealed that while national variances continued to increase, it is doing so at a much lower rate than in previous years.

We also discovered that one reason for this decline can be attributed to more consistent ratings for new claims. In fact, the national variance for new claims has declined from $6,054 in 2004 to $4,477 in 2006.

While some progress has been made, VBA remains challenged to improve consistency of ratings. To accomplish this, we believe further efforts are needed in monitoring and measuring variations in ratings by State and VBA regional offices. Unacceptable variations should be thoroughly evaluated to include in-depth reviews of individual claims that deviate from expected norms. Information obtained from these reviews should be used to improve rating consistency nationwide.

This approach is consistent with IDA's recommendations and with VBA's own Consistency Analysis Study Group, which provided a plan to analyze and rectify inconsistencies in disability evaluations by looking at individual claims.

In response to our 2007 Major Management Challenges, VBA stated that it plans to begin quarterly monitoring of rating decisions by diagnostic code and expand its quality assurance program, known as STAR, to accomplish these reviews during fiscal year 2008.

In closing, we believe implementation of the Study Group plan and IDA's recommendations will greatly assist VA in improving the consistency of rating decisions. We also believe that expansion of the responsibilities and staff of the STAR Program will be very important to achieving this goal.

Mr. Chairman, that concludes my remarks. I thank you once again for the opportunity to discuss this very important issue. Mr. Vallowe and I will be pleased to answer any questions.

[The statement of the Mr. Wooditch appears in the Appendix.]

Mr. MITCHELL. Thank you. We hate to inconvenience you, but we will be back in about a half hour. Thank you.

At this time, the meeting is recessed for about 30 minutes.


Mr. MITCHELL. We will reconvene now with this hearing. Because of the little break, I hope the questions I ask both of you will not be redundant from what you said in your statement. I want you to know that both your full statements have been included in the record.

First, Mr. Wooditch, you know the VA Inspector General has weighed in on this issue in the past. And the Department responded with minimal action. Having seen the report and recommendations by the Institute of Defense Analyses, do you think the VA has the resources to react more aggressively now?

And if not, what would be immediately necessary to remedy this problem?

Mr. WOODITCH. As I said in my statement, I really think it is important to do individual case reviews of claims that show wide variances in ratings nationwide. I think VBA's STAR program, their quality assurance program, is the ideal mechanism to help make that happen.

I believe that program currently is underfunded in terms of resources, and I think that more quality assurance folks need to be put into it. But given the magnitude of the problem, VBA has a very, very difficult challenge. They process something like 1.7 million claims a year. They have a backlog that everybody is aware of. They have a very difficult balancing act on determining do we put resources into processing claims or do we put resources into quality assurance?

So I think they need more resources in both areas to make it happen.

Mr. MITCHELL. Your analysis used various data sources and advance statistical procedures to reach your conclusions. I do not think we should have to commission such an in-depth audit every time we want some information on improving veterans disability claims.

What improvements, and I think you did suggest those, would you make to the current system to ensure that Congress and the VA always have the best disability claims data at the ready?

Mr. HUNTER. Sir, I think we recommended in our report one of the pressing issues is VA needs to improve their data collection and retention. One of the struggles we had in our study was getting the data in a proper form for us to do our analysis. To do something quicker where you could have access to metrics to examine variations more quickly, that would be only done I think if data was available for analysis that was now being collected by VA.

So VA has this data in hand but typically uses it to pay veterans but does not keep it for analysis. And that would need to be done, I believe.

Mr. MITCHELL. Mr. Space?

Mr. SPACE. Thanks, Mr. Chairman. Mr. Hunter, I listened to your testimony and I have not had a chance to review your report or your statement. But I just want to clarify a couple of things.

Your testimony discussed some issues that I believe you indicated were part of the reason anyway that we see variations that were not attributable to actions or inaction of the VA. Is that correct?

Mr. HUNTER. Yes, sir. That is correct.

Mr. SPACE. I want to make clear, however, that you are in fact acknowledging that there are variations that perhaps are systemic within the VA that may be contributing to the extent of those variances?

Mr. HUNTER. Yes. Our findings were that between 50 and 70 percent could be attributable to different characteristics in the veteran and recipient population across States. But that the current process as it has been set up, has the potential for producing regional differences. And the 30 to 50 percent remaining that could not be explained could be due to these regional differences in adjudication results.

Mr. SPACE. And so, 30 to 50 percent of those—we all understand there are going to be variations. If you had a perfect system there would be variations. But your feeling is that 30 to 50 percent are attributable to deficiencies within the VA?

Mr. HUNTER. Potential inconsistencies. I mean we couldn’t find any other explanation the data we looked at.

Mr. SPACE. All right. And do you—I believe your statement references attorney representation as a variable. I want to talk a little bit about that with the limited time that I have.

First of all, with respect to attorney representation, why would that be listed as a variable?

Mr. HUNTER. Well it turned out that if you looked at veterans with power of attorney representation, they received I think about three times as much average awards. A little over 11,000 versus veterans without power of attorney representation.

Mr. SPACE. All right. And—

Mr. HUNTER. There was a huge disparity between those two groups.

Mr. SPACE. Okay. And I understand that. I am curious as to why that would be listed as a variable in a study as to the reasons for discrepancies on a State-by-State basis.

Mr. HUNTER. I mean one of the things we tried to get at in our study was if that was the reason for the differences, then we know what corrective actions to recommend. If the differences were just certain States had more access to power of attorney than others.

What we had found, however, were that veterans with power of attorney had done substantially better than veterans without power of attorney. But that across States, it didn’t explain as much of the variation. We quantified only 15 percent of the variation was due to power of attorney differences alone across States.

Mr. SPACE. So there are significant discrepancies between States in terms of the number of veterans who seek legal counsel?

Mr. HUNTER. Of the percent of recipients who have a po