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Hon. James P. Terry

Hon. James P. Terry, Board of Veterans' Appeals, Chairman, U.S. Department of Veterans Affairs

Good morning, Chairman Hall, Mr. Lamborn and members of the Subcommittee.  It is a pleasure to be here today to discuss with you the Board of Veterans’ Appeals’ (Board’s) role in the VA benefits claims adjudication system.  I will address Board productivity, the accuracy of our decisions, current issues affecting the Board, and a review of those actions we are taking to improve the claims and appeals adjudication process. 

The Board renders final decisions on behalf of the Secretary on all appeals of adverse decisions issued under a law that affects the provision of VA benefits.  These appeals most commonly arise from decisions of VA regional offices, but also include those arising from decisions by VA medical centers.  Although the Board is an appellate body, it has fact-finding authority and provides a fresh look at the law and evidence in each case it considers.  In addition to ruling on the merits of a claim, the Board may direct further development of the evidence and readjudication of the claims at issue by the agency of original jurisdiction (AOJ) if it is necessary to fairly consider the appeal. 

The Board has jurisdiction over a wide variety of issues and matters, but the vast majority of appeals involve claims for disability compensation benefits, such as claims for service connection, an increased rating, or survivor’s benefits, which were denied at the VA regional office (RO) level.  The Board’s objective is to produce well-reasoned, accurate, timely, and fair appellate decisions in all the cases that come before us.

As I testified last year before this Committee, two of the Board’s most important initiatives are: (1) to contain and reduce the backlog of appeals by increasing decision productivity, while maintaining high quality; and (2) to improve timeliness and service to veterans by eliminating avoidable remands in order to issue more final decisions. 

I am happy to report that we have had much success in working towards both these goals, as demonstrated by comparing our past performance with that of recent years.

In Fiscal Year (FY) 1994, the Board issued 22,045 decisions with 442 full time equivalent employees (FTE).  Our pending caseload stood at 47,148, and was on its way to 60,000.  By FY 1998, we had significantly improved our productivity by issuing 38,886 decisions and holding 4,875 hearings, with 483authorized FTE.

Most recently, in FY 2006, the Board issued 39,076 decisions.  We also conducted 9,158 hearings, the highest number ever by the Board, and almost twice as many hearings as in 1998.  In 2007, we are on track to exceed both these figures.

The Board’s most significant challenge for the future is to eliminate the growing backlog.  We will continue to use our resources as efficiently and effectively as possible to meet this challenge.  However, despite our best efforts, we continue to receive more appeals than we are deciding.  Cases pending at the start of FY 2006 stood at 37,539, and by the beginning of FY 2007 rose to 40,265.  This is despite the fact that the Board issued 4,901 more decisions in FY 2006 than in the previous year.  We have already exceeded the FY 2006 total at this point in 2007.     

To enable the Board to eliminate the growing backlog, the two most important goals for the Board are to continue efforts to reduce avoidable remands and increase productivity.  In regard to remands, we know that veterans want timely and correct decisions with respect to their claims for benefits.  For the Board to do that, the record must contain all evidence necessary to decide the claim and show that all necessary procedural protections have been provided.  If the record does not meet these requirements, and the benefits sought cannot be granted, a remand for further development by the AOJ is necessary. 

Remands significantly lengthen the amount of time it takes for a veteran to receive a final decision.  A remand adds about a year to the appellate process.  Remands not only delay individual cases, but divert resources from deciding new appeals.  About 75 percent of cases remanded are returned to the Board, which increases our workload and further degrades timeliness.  In addition, because by law we generally must decide the oldest cases first, processing of newer appeals is delayed when remanded appeals are returned to the Board for readjudication.  Hence, eliminating avoidable remands is a goal that will provide better service to veterans and their families and, ultimately, will contribute to diminishing the growing backlog. 

Since FY 2005, when we began working concertedly with the Veterans Benefits Administration (VBA) to avoid remands to the extent possible, we have made great progress in reducing avoidable remands.  To illustrate briefly, in FY 2003, the Board issued 31,397 decisions, with a remand rate of 42.6 percent.  In FY 2004, while the number of decisions issued increased to 38,371, but the remand rate soared to 56.8 percent.  In FY 2005, we issued 34,175 decisions of which 38.6 percent were remanded in whole or part.  We are happy to report that in FY 2006, we issued 39,076 decisions, with a remand rate of only 32 percent.  We have seen the remand rate hold its own during FY 2007, as we have produced more cases on appeal than a year before and will exceed 40,000 decisions on appeal this fiscal year. 

By “avoidable” remands, we are referring to a class of cases in which a remand could have been avoided if the case was properly processed and reviewed in accordance with existing laws and regulations.  It is important to note that under the current adjudication system a certain percentage of remands are expected for various reasons beyond VA’s control.  For example, some cases must be remanded to address intervening changes in the law, new medical evidence, changes in medical condition, or other due process considerations.  On the other hand, some remands can be avoided by careful development of the record and application of the appropriate law, as well as close analysis of the record and consideration of a harmless error analysis. 

We continue to work closely not only with VBA, but with the Office of General Counsel (OGC) and the Veterans Health Administration (VHA) to identify and track the root causes of remands in order to provide training that will eliminate avoidable remands.  Our training efforts have been considerable.  Several training sessions on remand avoidance have been held for all Veterans Law Judges (VLJs) and staff counsel.  We have also held joint training sessions with VBA, including a national video broadcast, on avoidable remands and evidence development.  We have conducted numerous sessions on a variety of medical and legal subjects within our jurisdiction – all designed to reduce remands and improve quality.  Additionally, each of our Travel Boards has met with regional office (RO) personnel to answer questions, conduct training, and/or discuss shared areas of concern.  Finally, we have been working with VHA and VBA through the Compensation and Pension Examination Project (CPEP) to improve the quality of VA compensation medical examinations, which is reducing a major cause of remands.

Another important challenge for the Board is to work closely with the 57 ROs and the Veterans Service Organizations to ensure that Travel Boards are dispatched as soon as a sufficient number of cases that are nearing their place on the Board’s docket are ready for hearing.  In 2007, in addition to 114 scheduled Travel Boards, 12unscheduled trips to San Antonio, Texas (3 trips); Seattle, Washington; New York City, New York; Atlanta, Georgia; Phoenix, Arizona; Cleveland, Ohio; Huntington, West Virginia; Albuquerque, New Mexico; Houston, Texas, and San Diego, California were added after the ROs provided notice that the docket was ready.  The Board also expanded a scheduled Travel Board to St. Petersburg, Florida, from one week to two weeks at the request of the RO.  These additions during the year resulted in a total of 126 Travel Boards for 2007.  Of the 126 Travel Boards, 5 were combined trips which visited two ROs (Lincoln/Des Moines, Fargo/Sioux Falls, Ft. Harrison/Boise, Denver/Cheyenne, and Togus/White River Junction).  On the last two days of each of our Travel Boards, we offer training and assistance by our staff attorneys to the RO adjudication staff.  This is as much of a benefit to the Board as to the RO staff if it precludes one case from being returned to the RO from the Board via remand for further development.   

Although much has been done, we still have much to do in increasing productivity at the Board.  Within existing resources, and by way of incentives and sound management, we will continue to improve by:

  1. Eliminating avoidable remands;
  2. Strengthening our intra-agency partnerships:  Our joint training efforts with VBA, OGC, and VHA are improving decision quality and reducing remands;
  3. Writing shorter and more concise decisions:  We continue to train and encourage our VLJs and counsel to write clear, concise, coherent, and correct decisions;
  4. Utilizing employee incentive, mentoring and training programs:  A number of new programs have been introduced to increase employee motivation and satisfaction, as well as to increase productivity and decision quality;
  5. Making judicious use of overtime:  We will use overtime within existing resources to enhance productivity;
  6. Increasing our use of paralegals:  We will increase the use of our paralegals for non-decisional support activities, freeing up our legal staff to decide appeals;
  7. Providing improved on-line legal research tools and analytical frameworks to aid timely and correct decision production;
  8. Succession Planning:  The Board will continue its rigorous associate counsel recruitment program to hire the best and brightest attorneys available;
  9. Improve Quality:  The Board will use its quality review process to identify areas of concern that require follow-up training;
  10. VLJs will draft some decisions, in addition to reviewing and revising drafts prepared by staff counsel; and
  11. Aggressive recruiting and training program to ensure full productivity by maintaining our authorized staffing levels.

We believe these measures will reduce the backlog and shorten the time it takes for a veteran to receive a fair, well-reasoned Board decision.  In addition to the Board’s increases in productivity, we have also improved decision quality.  In FY 2006, the Board’s decision quality was 93 percent, based on 39,076 total decisions issued.  We are proud to report that in Fiscal Year 2007, not only will the Board increase its total decision output to over 40,000 cases, but the Board’s decision quality will be maintained at over 93 percent.  By decision quality, we mean that there were no substantive or procedural errors that would have resulted in the case being reversed or remanded to the Board by the United States Court of Appeals for Veterans Claims.  Into the fourth quarter of FY 2007, we find that the enhanced decision quality of 93.4 percent is being maintained. 

Although there was an increase in quality and quantity, the Board saw its pending caseload grow significantly in 2006 and 2007.  As I briefly noted earlier, in addition to issuing 39,076 decisions in FY 2006 and more than 40,000 projected for FY 2007, we conducted 9,158 hearings in 2006 and expect to conduct more than 10,000 in 2007.  This is the greatest number of hearings ever held by the Board.  However, the number of cases pending before the Board at the beginning of FY 2007 was 40,265, which was close to a 3,000 case increase over the 37,539 cases that were pending at the beginning of FY 2006.  This increase in pending cases occurred despite the increase in the number of decisions issued of nearly 5,000 in 2006 over 2005 and an even greater number of decisions issued this year than in 2006.  By the end of this September, we expect to have about 28,500cases with a pending request for a Board hearing.  Of these cases, approximately 8,000 are actually ready for a hearing.  Our 126 Travel Boards in FY 2007 have sharply reduced the number of pending hearings from one year ago. 

Although we continue to operate below a required personnel level, our attorneys and judges are ahead of last year’s pace in terms of productivity.  I attribute this increased productivity to superb leadership in each of our Decision Teams and in our Administrative support division, an unparalleled in-house training and mentoring program, and to the quality of our support staff and the line attorneys that draft complex, quality decisions in an accurate and timely manner. 

As you know, we have high expectations for our counsel and Veterans Law Judges.  We ask each of our counsel to write more than three complete draft decisions a week, and each of our line Judges to review, modify as necessary, and sign an average of at least 19 decisions a week.  Over the course of the year, the Board’s fair share standards call for our attorneys to complete a total of 156 timely decisions of high quality, and for each of our line Judges to complete and sign 752 decisions.  We are also concentrating on quickly dispatching the final decisions to the applicant and his or her representative through improved administrative processing.   In addition, each Judge is expected to complete at least three week-long Travel Board trips per year, in which they hear cases at one of the 57 ROs and at several satellite offices.  An experienced staff counsel accompanies the Judges during these Travel Board trips to assist in the conducting of the hearings and to provide training and other requested assistance to the RO staff.

Finally, I would like to mention a new initiative directed by Secretary Nicholson that will greatly assist our timely resolution of new appeals.  The Expedited Claims Adjudication Initiative, briefed to the staffs of the House and Senate Veterans’ Affairs Committees earlier this year, and to VSO representatives as well, will offer an expedited process to represented claimants who desire to shorten the time required to process their claims.  At four selected Regional Office locations (Philadelphia, Nashville, St. Paul and Seattle), the VBA and the Board will provide a two year model to streamline the claims adjudication and appeals process system-wide.  A veteran who elects to participate in this program will be required to waive time periods not required to address his or her claim, and in return, will be placed on a fast track for adjudication.  The rapid disposition of these claims will reduce the backlog and thereby ultimately improve the overall timeliness of claims processing.  In addition, the pilot program will provide useful information on the efficacy of revising timelines in current law and regulation to establish a fair, but streamlined, claims adjudication process.  The regulations required to effect this program through their publication in the Federal Register have been drafted and are now under Departmental review. 

In conclusion, we will continue working to develop new and creative solutions to the challenges we face in order to fulfill our statutory mission to hold hearings and provide timely, high quality decisions to our Nation’s veterans and their families. 

I am pleased to answer any questions you or your colleagues may have.