Ms. Diana Rubens
Good morning Chairman Runyan, Ranking Member Titus, and Members of the Subcommittee. Thank you for the opportunity to discuss the Veterans Benefits Administration’s (VBA’s) administration of the temporary 100-percent disability rating. We recognize the critical importance of providing this benefit to our Veterans, which allows them to receive compensation at the 100-percent rate during the times they are most in need. We also recognize our obligation to ensure proper administration of the benefit to Veterans and good stewardship of taxpayers’ dollar.
Temporary 100-Percent Disability Rating
VA regulations authorize a 100-percent disability rating under specific criteria tied to individual disabilities, or when any service-connected impairment of mind or body makes it impossible for a Veteran to pursue a substantially gainful occupation. These 100-percent disability ratings can be granted on either a temporary or permanent basis. VBA grants a permanent rating if medical evidence shows the Veteran’s total disability is not likely to improve. The 100-percent disability rating is generally held to be permanent when no routine future examination is warranted. Additionally, if a 100-percent rating has been in place for 20 years, VBA cannot reduce the rating unless the Veteran committed fraud in obtaining the benefits.
Temporary 100-percent disability ratings are often awarded when service-connected disabilities require complex surgery, convalescence, or specific inpatient or intense treatment, such as radiation or chemotherapy in the case of most cancers. At the end of a mandated period of convalescence or following cessation of treatment, VBA is responsible for reviewing the Veteran’s medical condition to determine whether to continue the temporary 100-percent rating. Generally, medical examinations are required if there is potential for improvement in a disability that might lead to a decreased disability rating. If a medical examination shows material improvement in the Veteran’s condition, and VBA determines that a reduced rating is necessary, then VBA initiates action to reduce benefits. When VBA proposes a reduction in benefits, the beneficiary is notified that he or she has 60 days to submit additional evidence and/or request a pre-reduction hearing.
National Audit of 100-Percent Disability Ratings
On January 24, 2011, the Department of Veterans Affairs (VA) Office of Inspector General (OIG) released the report of its audit of temporary 100-percent disability ratings. The audit examined two areas: whether VBA regional offices (ROs) correctly assigned 100-percent disability ratings as either permanent or temporary and whether ROs effectively monitored and reevaluated temporary 100-percent disability ratings.
The audit found that temporary 100-percent disability ratings were not being correctly monitored for reevaluation. The OIG identified three primary causes: Staff did not (1) enter future medical examination dates into VBA’s electronic records; (2) monitor automated notifications entered into VBA’s electronic records; and (3) comply with VBA regulations that require ROs to ensure a Veteran’s condition was not likely to improve before assigning permanent evaluation.
The OIG made seven recommendations, including a recommendation that VBA review all temporary 100-percent disability ratings to ensure each evaluation had a future examination date entered in the Veteran’s electronic record. VBA agreed to implement all of the recommendations.
System Problem in Future Examination Processing
In September 2010, during the course of the OIG audit, VBA identified a system software problem that was causing many properly established future examination dates to drop out of the system, contributing significantly to the problems being identified by the OIG. VBA found that the premature removal of future examination dates occurred in three scenarios. Without these future dates in the system, our employees did not receive notification to schedule these Veterans for medical examinations to reevaluate their conditions. After extensive analysis, VA determined that the complexity of the system requirements for future examination processing required a complete redesign of that system functionality.
VBA completed business requirements for the redesign, and new system functionality for future-examination processing was deployed on July 2, 2012. This redesign successfully corrected the previously identified system defects.
VBA Review of Temporary 100-Percent Ratings
VBA conducted three separate claims reviews while system changes were being made to ensure future-examination dates were properly recorded for temporary 100-percent ratings and to schedule medical examinations for those Veterans who were overdue for reevaluation. VBA established a system control for each identified record so corrective action could be taken.
In the course of the reviews, VBA continued to identify cases that were not under proper control to be tracked for completion of all required actions – either because proper corrective action had not yet been taken or had been taken prior to July 2012 and the future date had again dropped from the system. To address this concern, a backup process was put in place to identify cases without a future examination date established and require review of these cases to either establish a future date or ensure the rating decision correctly documented that the 100-percent rating had been established as permanent.
Because the input of future-examination dates remains a manual input process in VBA’s current legacy processing system, VBA is now conducting this backup process every two weeks to ensure that all 100-percent ratings are appropriately identified in our system as either temporary (with a future examination scheduled) or permanent.
Training on Future Examination Processing
VBA also continues to provide extensive training for claims processors on inputting future exams:
· Future examination training is provided to all new claims processors during the initial training for new claims processors, known as Challenge training.
· Since fiscal year (FY) 2010, Rating Veterans Service Representatives (RVSRs) have been required to complete the training lesson plan on Rating Reductions. This lesson plan addresses the use of future examinations.
· In January 2011, Compensation Service amended the mandatory “Matching Programs” training lesson plan for Veterans Service Representatives (VSRs). This amended training lesson provides claims processors with instructions on the appropriate actions to take when processing claims with future examination dates. Supplemental material regarding future examinations was provided in mandatory National Core Curriculum training for all VSRs.
· In March 2011, a lesson on permanent and total ratings was mandated for all RVSRs. This lesson included information concerning the establishment of future examination dates.
· In March 2012, Compensation Service created a mandatory lesson plan on “Inferred Issues” for RVSRs that focuses on determining when a future examination is required. The training provides an additional reminder to the field to ensure that future examination dates were not omitted from the award.
· In June 2012, Compensation Service released two mandatory training lessons for RVSRs. These were entitled “Effective Dates” and “Subordinate Issues” and were required training during FY 2012. Both of these lessons address the proper use of future examinations.
VBA is in the midst of implementing a series of tightly integrated people, process, and technology initiatives designed to eliminate the claims backlog and achieve our goal of processing all claims within 125 days at a 98-percent quality level in 2015. VBA is developing and deploying technology solutions that drive automation of the claims process. Our new paperless processing system, the Veterans Benefits Management System (VBMS), is employing rules-based functionalities that will allow VBA to more effectively monitor and timely adjust temporary 100-percent ratings.
VBMS software requires the decision-maker to either establish the permanency of the 100-percent rating or establish a future examination diary. Once VBMS is in place nationwide, these rule sets will ensure compliance with business rules and procedures associated with 100-percent ratings.
Based on the audit findings, the OIG projected that VBA has paid Veterans a net amount of $943 million without adequate medical evidence since January 1993. Further, the OIG projected that if corrective action was not taken, VBA would overpay Veterans another $1.1 billion over the next five years. VBA believes the overpayment projection of $1.1 billion over the next five years is significantly overstated.
VBA believes OIG’s overall error rate in the report of 15-percent is overstated. OIG reduced the population from which to sample by approximately 58,000 Veterans with conditions that clearly indicated no likelihood of improvement, such as double amputees. VBA believes that removing 58,000 presumed error-free cases skewed the analysis and caused sampling to no longer be truly random.
VBA reviewed records for eight of the top overpayments that were identified by the OIG, and found that three of these cases (38-percent) still warranted 100-percent ratings or payment at the 100-percent rate. Therefore, potentially 38 percent of the errors used to make monetary projections may not be valid.
Nevertheless, VBA agrees that significant overpayments were occurring as a result of not timely reevaluating all cases with 100-percent temporary ratings.
VBA is committed to providing timely and accurate payments to Veterans while ensuring proper stewardship of taxpayers’ dollar. VBA has already taken significant corrective actions (including case reviews, legacy system software changes, mandatory training, increased oversight, and technology enhancements in our new VBMS paperless processing system currently being deployed) to ensure temporary 100-percent ratings are effectively monitored and adjusted. At the same time, we acknowledge that our regional offices have not yet completed action on all of the individual cases requiring review. We will continue to carefully monitor these cases to completion and partner with OIG to ensure we are providing our Veterans with timely and accurate benefit payments. Mr. Chairman, this concludes my statement. I would be pleased to answer any questions you or other Members of the Subcommittee may have.