Veterans' Disability Benefits
Preliminary Findings on Claims Processing Trends and Improvement Efforts Gao ID: GAO-09-910T July 29, 2009The Senate Veterans' Affairs Committee asked GAO to present its preliminary findings on the Department of Veterans Affairs' (VA) disability claims process. This statement discusses (1) the trends in VA compensation claims and appeals, and (2) the steps VA is taking to improve disability claims processing. This testimony is based on ongoing work. GAO's findings are based largely on VA performance data and information obtained from VA documents and through interviews with VA officials. This testimony is also based on past GAO work on this subject, updated as appropriate to reflect VA's current workload and initiatives.
Over the past several years, VA disability claims workloads at both the initial and appellate levels have improved in some areas and worsened in others. For example, the number of disability claims VA completes annually at the initial level increased about 60 percent--from about 458,000 in fiscal year 1999 to about 729,000 in fiscal year 2008. However, during this same period, the number of claims pending at year-end increased 65 percent to about 343,000. Several factors affect these and other disability claims workloads, including increases in disability claims received, growing complexity of claims, court decisions and changes in regulation. Disability claims workloads at the appellate level have also improved in some areas and worsened in others. For example, over the past several years, the number of appeals resolved increased 22 percent, from more than 72,000 cases in fiscal year 2003 to almost 88,000 cases in fiscal year 2008. However, it took on average 96 days longer in fiscal year 2008 to resolve appeals than in fiscal year 2003. One factor that affects workloads at the appellate level is the submission of new evidence or claims that must be evaluated. VA has taken several steps to improve claims processing, but the effect of some of these actions is not yet known. For example, VA increased claims processing staff about 58 percent from fiscal years 2005 to 2009, which has helped to increase the total number of decisions VA issues annually. However, VA expects individual staff productivity to decline in the short-term in part because of the challenge of training and integrating new staff. In addition, VA has established 15 resource centers to which it redistributes claims and appeals for processing from backlogged regional offices. Although VA has not collected data to evaluate the effect of its workload redistribution efforts, these efforts may ultimately increase the timeliness and consistency of VA's decisions. VA is also implementing a pilot with the Department of Defense (DOD) to perform joint disability evaluations that has the potential to streamline the disability process for prospective veterans. Finally, VA has begun other initiatives, which we are in the process of reviewing, such as targeting certain claims for fast-track processing and leveraging technology.
GAO-09-910T, Veterans' Disability Benefits: Preliminary Findings on Claims Processing Trends and Improvement Efforts
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Testimony:
Before the Committee on Veterans' Affairs, United States Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 9:30 a.m. EDT:
Wednesday, July 29, 2009:
Veterans' Disability Benefits:
Preliminary Findings on Claims Processing Trends and Improvement
Efforts:
Statement of Daniel Bertoni, Director:
Education, Workforce, and Income Security:
GAO-09-910T:
GAO Highlights:
Highlights of GAO-09-910T, a testimony to the Committee on Veterans'
Affairs, United States Senate.
Why GAO Did This Study:
The Senate Veterans‘ Affairs Committee asked GAO to present its
preliminary findings on the Department of Veterans Affairs‘ (VA)
disability claims process. This statement discusses (1) the trends in
VA compensation claims and appeals, and (2) the steps VA is taking to
improve disability claims processing.
This testimony is based on ongoing work. GAO‘s findings are based
largely on VA performance data and information obtained from VA
documents and through interviews with VA officials. This testimony is
also based on past GAO work on this subject, updated as appropriate to
reflect VA‘s current workload and initiatives.
What GAO Found:
Over the past several years, VA disability claims workloads at both the
initial and appellate levels have improved in some areas and worsened
in others. For example, the number of disability claims VA completes
annually at the initial level increased about 60 percent”from about
458,000 in fiscal year 1999 to about 729,000 in fiscal year 2008.
However, during this same period, the number of claims pending at year-
end increased 65 percent to about 343,000. Several factors affect these
and other disability claims workloads, including increases in
disability claims received, growing complexity of claims, court
decisions and changes in regulation. Disability claims workloads at the
appellate level have also improved in some areas and worsened in
others. For example, over the past several years, the number of appeals
resolved increased 22 percent, from more than 72,000 cases in fiscal
year 2003 to almost 88,000 cases in fiscal year 2008. However, it took
on average 96 days longer in fiscal year 2008 to resolve appeals than
in fiscal year 2003. One factor that affects workloads at the appellate
level is the submission of new evidence or claims that must be
evaluated.
Figure: Pending Compensation Claims, End of Fiscal Years 1999-2008:
[Refer to PDF for image: multiple vertical bar graph]
Fiscal year: 1999;
Total pending: 207;
Pending over six months: 65.
Fiscal year: 2000;
Total pending: 188;
Pending over six months: 52.
Fiscal year: 2001;
Total pending: 370;
Pending over six months: 159.
Fiscal year: 2002;
Total pending: 309;
Pending over six months: 114.
Fiscal year: 2003;
Total pending: 227;
Pending over six months: 44.
Fiscal year: 2004;
Total pending: 228;
Pending over six months: 64.
Fiscal year: 2005;
Total pending: 309;
Pending over six months: 68.
Fiscal year: 2006;
Total pending: 335;
Pending over six months: 79.
Fiscal year: 2007;
Total pending: 351;
Pending over six months: 96.
Fiscal year: 2008;
Total pending: 343.
Pending over six months: 78.
Source: VA data.
[End of figure]
VA has taken several steps to improve claims processing, but the effect
of some of these actions is not yet known. For example, VA increased
claims processing staff about 58 percent from fiscal years 2005 to
2009, which has helped to increase the total number of decisions VA
issues annually. However, VA expects individual staff productivity to
decline in the short-term in part because of the challenge of training
and integrating new staff. In addition, VA has established 15 resource
centers to which it redistributes claims and appeals for processing
from backlogged regional offices. Although VA has not collected data to
evaluate the effect of its workload redistribution efforts, these
efforts may ultimately increase the timeliness and consistency of VA‘s
decisions. VA is also implementing a pilot with the Department of
Defense (DOD) to perform joint disability evaluations that has the
potential to streamline the disability process for prospective
veterans. Finally, VA has begun other initiatives, which we are in the
process of reviewing, such as targeting certain claims for fast-track
processing and leveraging technology.
View [hyperlink, http://www.gao.gov/products/GAO-09-910T] or key
components. For more information, contact Daniel Bertoni at (202) 512-
7215 or bertonid@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
I am pleased to have the opportunity to comment on the Department of
Veterans Affairs' (VA) disability compensation claims process. In
fiscal year 2008, VA paid $30.7 billion in benefits to nearly 3 million
veterans through its disability compensation program. For years, the
claims process has been the subject of concern and attention by VA,
Congress, and veterans service organizations, due in large part to long
waits for decisions and large numbers of claims pending a decision.
Further, we and VA's Inspector General have identified concerns about
the consistency of decisions across regional offices.
You asked us to discuss preliminary findings of our ongoing work for
this Committee examining VA's disability compensation claims process.
Specifically, my statement today addresses (1) trends in VA
compensation claims and appeals workloads and (2) steps VA is taking to
improve its claims processing. To identify trends in VA's disability
claims and appeals workloads, we analyzed compensation claims
processing data from VA's Veterans Benefits Administration (VBA) and
Board of Veterans' Appeals (Board). To identify steps VA is taking to
improve its claims process, we reviewed VA's budget submissions,
strategic plans, and other documents such as external studies and VA's
Office of Inspector General reports; interviewed VA officials and
veterans service organization representatives; and examined ongoing
initiatives or those that VA completed within the last 3 fiscal years.
In addition, we visited four VBA regional offices and the Board to
learn more about these initiatives. In selecting the regional offices-
-Chicago, Illinois; Seattle, Washington; Togus, Maine; and Winston-
Salem, North Carolina--we considered regional offices that would
provide: (1) insights about ongoing initiatives such as pilots; (2) a
mix of offices located in different geographic settings (e.g., urban
and rural); and (3) a mix of offices that are above and below VBA's
averages for select case-processing measures. Our work, which began in
November 2008, is being conducted in accordance with generally accepted
government auditing standards. Given testimony timelines we have not
yet completed our assessment of the reliability of VA data. We plan to
issue a final report at a later date.
In summary, over the past several fiscal years, VA disability
compensation claims workloads at both the initial and appellate levels
have improved in some areas and worsened in others. For example, at the
initial level, the number of claims VA completes annually increased
about 60 percent from fiscal year 1999 to fiscal year 2008. However,
the number of claims pending during this period increased by more than
65 percent to about 343,000, and the average time VA took to complete a
claim increased about 9 days. A number of factors contribute to these
results, including an approximately 53 percent increase in VA's claims
workload, more complex claims, and court decisions that have expanded
benefit entitlement. Workloads at the appellate level have also
improved in some areas and worsened in others. For example, for the
past several fiscal years, the number of appeals resolved increased 21
percent from more than 72,000 in fiscal year 2003 to almost 88,000 in
fiscal year 2008. On the other hand, it took VA 96 days longer in
fiscal 2008 to resolve appeals than it did in fiscal year 2003. One
factor that contributes to the challenge in further improving workloads
at the appellate level is the submission of new evidence or claims that
must be evaluated.
VA has taken several steps in an effort to improve claims processing,
such as increasing staffing, redistributing workloads, implementing a
joint pilot with the Department of Defense (DOD) to perform disability
evaluations and other initiatives, but the effect of some of these
actions is not yet known. For example, VA increased claims processing
staff an estimated 58 percent from fiscal years 2005 to 2009, which has
helped to increase the total number of decision VA issues annually.
However, VA expects individual staff productivity to decline before it
ultimately improves in part because of the challenge of training and
integrating new staff. In addition, VA also established 15 resource
centers to which it redistributes claims and appeals workloads from
backlogged regional offices. These centers currently process thousands
of cases annually. Such efforts may ultimately increase the timeliness
and consistency of VA's decisions; however, VA has not collected data
to evaluate the effect of its workload redistribution efforts. Another
step VA has taken is partnering with DOD in piloting a joint process
for performing disability evaluations for servicemembers who are going
through the military's disability evaluation system. According to VA,
preliminary pilot results suggest that the new process expedites
delivery of VA benefits to servicemembers upon discharge from the
military. This pilot represents a positive step toward streamlining the
disability process and expediting benefits for servicemembers upon
discharge from the military. However, we have noted that critical
implementation challenges will need to be addressed prior to worldwide
implementation. Moreover, given the relatively small number of cases in
the military's disability evaluation system compared to the number of
claims processed under VA's disability compensation program, the pilot
will have a limited impact on VA's claims backlog. Finally, VA is
taking other steps that could improve the claims process, such as
targeting other claims for fast-track processing and leveraging
technology.
Background:
VA pays monthly disability compensation to veterans with service-
connected disabilities (injuries or diseases incurred or aggravated
while on active military duty) according to the severity of the
disability.[Footnote 1] VA also pays additional compensation for some
dependents--spouses, children, and parents--of veterans.[Footnote 2] In
fiscal year 2008, the disability compensation program represented 78
percent, or $30.7 billion, of the cash benefits paid through VBA's
Compensation and Pension Service. In addition, VA's pension program
pays monthly benefits to wartime veterans who have low incomes and are
permanently and totally disabled for reasons that are not service-
connected.[Footnote 3]
VA's disability compensation claims process starts when a veteran
submits a claim to one of VBA's 57 regional offices. A service
representative is then responsible for assisting the veteran in
obtaining the relevant evidence to evaluate the claim. Such evidence
includes veterans' military service records, medical examinations, and
treatment records from VA medical facilities and private medical
service providers. Also, if necessary for reaching a decision on a
claim, the regional office arranges for the veteran to receive a
medical examination or opinion. Once a claim has all the necessary
evidence, a rating specialist evaluates the claim and determines
whether the claimant is eligible for benefits. If the veteran is
eligible for disability compensation, the rating specialist assigns a
percentage rating. Veterans with multiple disabilities receive a single
composite rating. In addition, veterans can reopen claims for
additional benefits over time from VA, for example, if a service-
connected disability worsens or arises in the future. If the veteran
disagrees with the regional office's decision, he or she may begin the
appeals process by submitting a written notice of disagreement to the
regional office. In response to such a notice, VBA provides further
written explanation of the decision, and if the veteran still
disagrees, the veteran may appeal to the Board. The Board, whose
members are attorneys experienced in veterans' law and in reviewing
benefit claims, may grant or deny the appeal or return the case to VBA
to obtain additional evidence necessary to decide the veteran's claim.
In addition to receiving disability benefits from VA, veterans may
receive disability benefits from the Department of Defense (DOD). If
the military determines that a servicemember is unfit for duty because
of conditions incurred in the line of duty, the military assigns a
combined percentage rating for those unfit conditions using VA's rating
system as a guideline. This one-time rating, along with years of
service and other factors, determines subsequent disability benefits
from DOD. Unlike through VA, veterans cannot reopen claims for
additional benefits over time through DOD's disability determination
process.
VA's Disability Claims and Appeals Processing Has Improved in Some
Areas and Worsened in Others:
Over the past 10 fiscal years, the total number of compensation claims
decisions completed annually by VA and the average days compensation
claims were pending improved, while the total number of claims pending
at year end and the average days to complete a claim worsened.[Footnote
4] From fiscal year 1999 to fiscal year 2008, VA increased the number
of initial compensation claims processed annually by nearly 60 percent
from about 458,000 to about 729,000[Footnote 5] (see figure 1).
Moreover, VA experienced substantial year-to-year increases in the
number of claims completed between 2006 and 2008.
In fiscal year 2008, compensation claims were pending an average of 123
days compared to 152 days in fiscal year 1999 (see figure 2). While
slightly higher than the average 115 days claims were pending in fiscal
year 2003, this represents a marked improvement over the average 188
days claims were pending in fiscal year 2001. VA's fiscal year 2009
average days pending goal for rating-related actions is 116 days.
Figure 1: Compensation Claims Completed, Fiscal Years 1999-2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 1999;
Claims: 458,000.
Fiscal year: 2000;
Claims: 440,000.
Fiscal year: 2001;
Claims: 348,000.
Fiscal year: 2002;
Claims: 641,000.
Fiscal year: 2003;
Claims: 683,000.
Fiscal year: 2004;
Claims: 571,000.
Fiscal year: 2005;
Claims: 629,000.
Fiscal year: 2006;
Claims: 628,000.
Fiscal year: 2007;
Claims: 662,000.
Fiscal year: 2008;
Claims: 729,000.
Source: VA data.
[End of figure]
Figure 2: Average Days Compensation Claims were Pending, End of Fiscal
Years 1999-2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 1999;
Claims: 152,000.
Fiscal year: 2000;
Claims: 146,000.
Fiscal year: 2001;
Claims: 188,000.
Fiscal year: 2002;
Claims: 181,000.
Fiscal year: 2003;
Claims: 115,000.
Fiscal year: 2004;
Claims: 122,000.
Fiscal year: 2005;
Claims: 124,000.
Fiscal year: 2006;
Claims: 132,000.
Fiscal year: 2007;
Claims: 137,000.
Fiscal year: 2008;
Claims: 123,000.
Source: VA data.
[End of figure]
VA's inventory of pending compensation claims has varied over time, but
on whole has increased significantly over the last decade. From the end
of fiscal year 1999 to the end of fiscal year 2008, pending claims
increased by more than 65 percent from about 207,000 to about 343,000
(see figure 3). During the same time period, the number of claims
awaiting a decision longer than 6 months increased by 20 percent from
about 65,000 to about 78,000. However, more recent data show that
pending claims declined slightly from the end of fiscal year 2007 to
2008, and those pending more than 6 months declined almost 20 percent.
Figure 3: Pending Compensation Claims, End of Fiscal Years 1999-2008:
[Refer to PDF for image: multiple vertical bar graph]
Fiscal year: 1999;
Total pending: 207;
Pending over six months: 65.
Fiscal year: 2000;
Total pending: 188;
Pending over six months: 52.
Fiscal year: 2001;
Total pending: 370;
Pending over six months: 159.
Fiscal year: 2002;
Total pending: 309;
Pending over six months: 114.
Fiscal year: 2003;
Total pending: 227;
Pending over six months: 44.
Fiscal year: 2004;
Total pending: 228;
Pending over six months: 64.
Fiscal year: 2005;
Total pending: 309;
Pending over six months: 68.
Fiscal year: 2006;
Total pending: 335;
Pending over six months: 79.
Fiscal year: 2007;
Total pending: 351;
Pending over six months: 96.
Fiscal year: 2008;
Total pending: 343.
Pending over six months: 78.
Source: VA data.
[End of figure]
The average time VA took to complete a claim has also varied over time,
although the agency experienced significant increases from fiscal years
2004 to 2007. In fact, the average number of days VA took to complete
claims increased from a low of 181 days in fiscal year 2004 to 200 days
in fiscal year 2007. However, recent data show that VA took on average
4 days less to complete a claim in fiscal year 2008 than in fiscal year
2007 (see figure 4).
Figure 4: Average Days to Complete Compensation Claims, Fiscal Years
1999-2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 1999;
Claims: 187,000.
Fiscal year: 2000;
Claims: 195,000.
Fiscal year: 2001;
Claims: 202,000.
Fiscal year: 2002;
Claims: 246,000.
Fiscal year: 2003;
Claims: 197,000.
Fiscal year: 2004;
Claims: 181,000.
Fiscal year: 2005;
Claims: 181,000.
Fiscal year: 2006;
Claims: 193,000.
Fiscal year: 2007;
Claims: 200,000.
Fiscal year: 2008;
Claims: 196,000.
Source: VA data.
[End of figure]
Several factors have contributed to the trends in VA's disability
workloads. First, there has been a steady increase in the number of
claims filed--including those filed by veterans of the Iraq and
Afghanistan conflicts. The number of compensation claims VA received
annually increased about 53 percent, from about 468,000 in fiscal year
1999 to about 719,000 in fiscal year 2008. In part, VA attributes
increased claims receipts to its enhanced outreach to veterans and
servicemembers. VA reported that in fiscal year 2007, it provided
benefits briefings to about 297,000 separating servicemembers, up from
about 210,000 in fiscal year 2003. Ongoing hostilities also contribute
to increased claims. For example, according to VA, the claim rate of
veterans from ongoing hostilities is 35 percent. In addition, claims
filed by veterans currently receiving compensation whose conditions
have worsened contribute to increased claims. VA anticipates that the
number of reopened claims will increase as current disability benefit
recipients--many of whom suffer from chronic progressive disabilities
such as diabetes, mental illness, and cardiovascular disabilities--
submit claims for increased benefits as they age and their conditions
worsen. In fiscal year 2008, VA received about 488,000 reopened claims
for disability benefits, up 42 percent from about 345,000 in fiscal
year 1999. Finally, according to VA officials, prior legislation and VA
regulations have also expanded benefit entitlement, adding to the
volume of claims received. In recent years, court decisions related to
a 1991 law have created new presumptions of service-connected
disabilities for many Vietnam veterans and prisoners of war.[Footnote
6] In addition, VA anticipates an increase in claims stemming from an
October 2008 regulation change that affects how VA rates traumatic
brain injuries (TBI). According to a VA official, a letter was sent to
approximately 32,000 veterans notifying them that their TBI rating
could potentially increase even if their symptoms had not changed.
Another factor impacting VA's claims workloads--particularly the
average time to complete a claim--is the complexity of claims received.
VA notes that it is receiving claims for more complex disabilities
related to combat and deployments overseas, including those based on
environmental and infectious disease risks and TBI. In addition,
according to VA officials, veterans cited more disabilities in their
claims in recent years than in the past, and these claims can take
longer to complete because each disability must be evaluated
separately. The number of compensation claims VA decided with 8 or more
disabilities increased from 11 to 16 percent from fiscal years 2006 to
2008. Further, a number of statutes[Footnote 7] and court
decisions[Footnote 8] related to VA's disability claims process may
have affected VA's ability to improve claims processing timeliness. For
example, according to VA officials, the Veterans Claims Assistance Act
of 2000 added more steps to the claims process, lengthening the time it
takes to develop and decide a claim.
Similarly, VA has experienced workload improvements and challenges in
the area of disability appeals. For example, over the past 6 fiscal
years,[Footnote 9] the number of appeals resolved increased about 22
percent from over 72,000 in fiscal year 2003 to almost 88,000 in fiscal
year 2008 (see figure 5). Between fiscal years 2003 and 2008, VA also
reduced the number of pending appeals by 24 percent from about 126,000
to about 95,000 (see figure 6).
Figure 5: Number of Compensation Appeals Resolved, Fiscal Years 2003-
2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2003;
Appeals: 72,000.
Fiscal year: 2004;
Appeals: 90,000.
Fiscal year: 2005;
Appeals: 79,000.
Fiscal year: 2006;
Appeals: 83,000.
Fiscal year: 2007;
Appeals: 85,000.
Fiscal year: 2008;
Appeals: 88,000.
Source: GAO analysis of VA data.
[End of figure]
Figure 6: Number of Pending Compensation Appeals, End of Fiscal Years
2003-2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2003;
Appeals: 126,000.
Fiscal year: 2004;
Appeals: 132,000.
Fiscal year: 2005;
Appeals: 134,000.
Fiscal year: 2006;
Appeals: 126,000.
Fiscal year: 2007;
Appeals: 113,000.
Fiscal year: 2008;
Appeals: 95,000.
Source: GAO analysis of VA data.
[End of figure]
However, the average time it took VA to process appeals of compensation
claims--from when a veteran files a notice of disagreement to when the
appeal is resolved--has trended upward from 543 days in fiscal year
2003 to 639 days--or approximately 21 months--in fiscal year 2008 (see
figure 7). Several factors contribute to the time it takes VA to
resolve appeals. According to VA officials, each time appellants submit
new evidence, VA must review and summarize the case for the appellant
again, adding to the time it takes to resolve the appeal. Furthermore,
appeals cannot be forwarded to the Board for a decision until all of a
veteran's pending claims are resolved, regardless of whether they
relate to the appeal. Therefore, cases that are pending resolution of
other issues can forestall final resolution for the appellant. Also,
according to VA officials, processing time is further lengthened when
appeals are remanded back to VBA by the Board for further work, such as
correcting procedural errors and obtaining additional evidence.
According to VA, in fiscal year 2008, about 18 percent of the Board's
decisions were remanded because of VBA errors that were avoidable. Many
other appeals are remanded because requirements--such as the legal
requirements discussed previously--change after the appeal is sent to
the Board.
Figure 7: Average Days from Notice of Disagreement to Resolution of
Compensation Appeals, Fiscal Years 2003-2008:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2003;
Days: 543.
Fiscal year: 2004;
Days: 533.
Fiscal year: 2005;
Days: 533.
Fiscal year: 2006;
Days: 563.
Fiscal year: 2007;
Days: 612.
Fiscal year: 2008;
Days: 639.
Source: GAO analysis of VA data.
[End of figure]
VA Continues to Take Steps to Improve Claims Processing:
VA has taken several steps to improve claims processing, including
increasing claims processing staff, redistributing certain workloads,
implementing a joint pilot with DOD to perform disability evaluations,
and developing a number of other initiatives to expedite benefits to
veterans. VA expects these efforts to yield improvements, but their
effects are not yet known and we have identified challenges with some
of these efforts. For example, over the past 4 years, VA has hired a
significant number of disability claims staff, who are expected to
improve the timeliness of initial claims and appeals processing. From
fiscal year 2005 to fiscal year 2009, VA expects VBA's claims
processing staff to increase by 58 percent from about 7,550 to an
estimated 11,948. During the same period, VA expects the Board's staff
to increase by 20 percent, from 433 to an estimated 519. In addition,
VA plans to use funds from the American Recovery and Reinvestment Act
of 2009 (ARRA) to hire and train about 1,000 temporary employees and
about 500 permanent employees, who will replace staffing losses that
VBA experiences through normal attrition. The temporary employees will
assist in developing disability claims and perform other administrative
tasks to free decision-makers to complete more complex claims
processing tasks.
We have reported that an infusion of a large number of staff has the
potential to improve VA's capacity. However, quickly absorbing these
staff will likely pose human capital challenges for VA, such as how to
train and deploy them. The additional staff has helped VA process more
claims and appeals overall, but as VA has acknowledged, it has also
reduced individual staff productivity. For example, while VA has issued
more claims decisions annually since hiring the additional staff, the
number of rating-related claims processed per staff person declined
from 101 in fiscal year 2005 to 88 in fiscal year 2008. According to
VA, this decline in productivity is attributable primarily to new staff
who have not yet become fully proficient at processing claims and to
the loss of experienced staff due to retirements. VA expects its
productivity to decline further before it improves, in part because of
the challenge of training and integrating new staff. According to VA
officials, it takes about 3 to 5 years for newly hired rating
specialists to become proficient given the complexity of the job.
Training new staff also reduces productivity in the near-term because
experienced staff must take time to train and mentor them, and
therefore may have less time to process their own claim workloads.
According to the VBA official in charge of training, VBA has developed
curricula that use practical application of key concepts to accelerate
the learning curve for new staff.
VA expects that the staff hired with ARRA funding will increase the
number of claims processed and reduce average processing times in 2010.
However, even though their responsibilities are expected to be limited
to less complex claims processing tasks, these additional staff could
also pose human capital challenges in the near-term while they are
being trained and integrated into the process.
In addition to increasing staffing, VA has also expanded its practice
of redistributing disability workloads, which is intended to improve
the timeliness and consistency of decisions. Since 2001, VA has created
15 resource centers that are staffed exclusively to process claims or
appeals from backlogged regional offices at distinct phases in the
claims process.[Footnote 10] The number and types of claims
redistributed from backlogged offices are determined on a monthly basis
based on changing workloads. For example, from 2001 to 2002, VA created
nine resource centers to exclusively rate claims from other offices.
The number of claims redistributed for rating has increased from about
88,000 in fiscal year 2006 to about 140,000 in fiscal year 2008. Claims
initially had to meet specific criteria to be eligible for
redistribution, such as having seven or fewer disabilities. However, VA
relaxed these criteria in May 2008, which has allowed more claims to be
redistributed. In addition, since 2007, VA has created four additional
resource centers to exclusively develop claims for rating, and in 2009
it created two more resource centers focusing exclusively on
reconsidering appealed claims before they are sent to the Board. The
claims development resource centers work on obtaining information
necessary for rating claims, while the appeals resource centers work on
reviewing appeals and providing written summaries of cases for the
veteran. According to VA officials, redistributing backlogged claims to
resource centers improves average processing times because VA can
better leverage its ever-changing capacity across its offices. Although
such efforts could improve the timeliness as well as the consistency of
its decisions, VA has not collected data to evaluate the effect of its
workload redistribution efforts.
VA has also expanded its efforts to assist servicemembers filing claims
prior to leaving military service and has consolidated the processing
of such claims at specific regional offices. For example, since 2006,
disability compensation claims filed by some servicemembers before they
leave the military and become veterans--known as Benefits Delivery at
Discharge (BDD) claims--are rated at two regional offices instead of at
each of the 57 regional offices.[Footnote 11] In addition, in February
2008, we reported that VA had increased the number of military
locations where servicemembers could file BDD claims. VA received about
32,000 BDD claims in fiscal year 2008. According to VA officials, the
goal of BDD is to expedite delivery of benefits to new veterans as soon
as possible after leaving the military. Consolidating certain tasks,
such as rating BDD claims at a limited number of regional offices,
could improve consistency because of greater control in communicating
procedures and conducting training, but VA officials said the agency
lacks data to measure the impact of consolidating BDD claims rating
because VA did not consistently track BDD claims prior to the
consolidation. We have identified the need for VA to systematically
address concerns about the consistency of its decisions.[Footnote 12]
VA's Inspector General has studied one indicator of possible
inconsistency, which is a wide variation in average payments per
veteran from state to state. In May 2005, the Inspector General
reported that variation in rating decisions was more likely to occur
for some disabilities like post-traumatic stress disorder (PTSD) than
for others, where much of the information needed to make a
determination is susceptible to interpretation and judgment. VA took
several steps to improve decision consistency, including conducting a
pilot project to monitor consistency of rating-related claims
decisions, reviewing the consistency of decisions on PTSD claims, and
developing a schedule for reviews of other disabilities. Given the
increasing numbers of veterans from the hostilities in Iraq and
Afghanistan with PTSD claims, the BDD program may offer opportunities
to enhance consistency in rating such impairments.
In addition to increasing staffing and redistributing and consolidating
certain workloads, VA is also implementing a joint pilot with DOD to
perform disability evaluations. Begun in November 2007, the pilot
process applies to servicemembers navigating the military's disability
evaluation system, which determines whether servicemembers are fit for
duty or should be released from the military. In the pilot, VA
completes disability ratings for servicemembers found unfit for duty.
Key features of the pilot include a single physical examination
conducted to VA standards, disability ratings prepared by VA for use by
both DOD and VA in determining disability benefits, and additional
outreach and case management provided by VA staff at DOD pilot
locations to explain VA results and processes to servicemembers. The
goals of the pilot are to increase transparency and to reduce confusion
about the disability evaluations conducted, and if military separation
or retirement is necessary, to expedite VA disability compensation
benefits upon discharge. If deemed successful at pilot locations, DOD
and VA intend to implement the process worldwide.
Implementing the pilot process worldwide may be challenging. VA and DOD
are using local agreements to establish the pilot process as it expands
to new locations. These agreements reflect local collaboration on pilot
implementation, notably to ensure that participants receive timely
examinations especially when there is no VA facility located nearby.
While local agreements may be an effective tool for implementing change
involving many parties, we found in our review of the BDD program that
their effectiveness may diminish over time due to changes in base
command, lack of communication between agencies, and resource
constraints.[Footnote 13] In addition, in September 2008, we reported
that while DOD and VA had established measures for the disability
evaluation system pilot's performance and a mechanism for tracking
performance, they had not established criteria for determining whether
the pilot was successful and should be expanded on a large
scale.[Footnote 14] For example, DOD and VA did not establish how much
improvement in timeliness or other indicators would be needed before
deciding that the pilot was successful. The agencies plan to issue
their final report to the Congress in August 2009; however, it is
unclear whether they will have identified criteria or collected
sufficient performance data on key indicators in order to move forward
with large-scale implementation.
If implemented widely, the pilot process could change the way many
veterans first receive disability benefits from VA. According to recent
testimony from a DOD official, preliminary pilot results suggest that
the new process expedites delivery of VA benefits to servicemembers
following discharge from the military. Moreover, implementing the pilot
process widely could reduce VA's reported average processing times
because VA begins tracking the timeliness of these claims from the date
a servicemember is discharged. However, the number of claims affected
by widespread implementation of the pilot process would probably be
small compared to the total number of compensation claims processed by
VA. VA processes many compensation claims from veterans who are no
longer in the military. In fiscal year 2005, the military's disability
evaluation system caseload was approximately 23,000 compared to the
nearly 650,000 compensation claims received by VA that year.
VA has also begun other initiatives such as testing other ways to
process claims and leveraging technology. For example, in February
2009, VA launched a pilot called Expedited Claims Adjudication in four
regional offices. This pilot, a joint effort between the VBA and the
Board, is intended to help accelerate the processing time of claims and
appeals. Claimants who opt into the pilot agree to respond to VA within
timeframes that are shorter than generally required. In return, the
expectation is that claimants will receive decisions from VA more
quickly. Because this pilot began only recently, little data are
available about its effectiveness. In addition, VA is leveraging
technology to improve claims processing. For example, in recent years,
VA has upgraded its claims processing software in phases. Such upgrades
are intended to improve processing timeliness and to improve data
quality by minimizing the need for data entry. Further, as of October
2008, claims processing staff review scanned versions of all BDD
claims. According to VA officials, this process is currently as
efficient as paper-based processing, but may eventually be more
efficient and enable further distribution of workloads as changing
capacities and demands require. VA is working to overcome technical
challenges that inhibit widespread implementation of paperless
processing. We are in the process of reviewing these initiatives as
part of our ongoing study.
In conclusion, workload data indicate that VA has made progress in some
areas of its disability claims and appeals process, but it continues to
experience challenges in reducing the time it takes to process claims
and appeals and in reducing the number of claims awaiting decisions. VA
has taken a number of steps to improve its disability claims process,
but significant increases in claims workloads combined with multiple
conditions per claim continue to pose challenges to VA's progress.
Productivity will be key to addressing the growing number of veterans
awaiting a decision on VA claims and appeals, underscoring the need to
address human capital challenges associated with training and
integrating VA's new staff--a growing and significant portion of all
its claims processors--and the need to track and monitor performance
data for major initiatives in order to ensure that they are functioning
as designed and achieving optimal returns on investment.
Mr. Chairman, this concludes my prepared statement. I would be pleased
to answer any questions that you or other members of the committee may
have.
GAO Contact and Acknowledgments:
For further information, please contact Daniel Bertoni at (202) 512-
7215 or bertonid@gao.gov. Also contributing to this statement were
Shelia Drake, Cynthia Grant, Joel Green, Lisa McMillen, Jessica Orr,
Bryan Rogowski, Christine San, and Walter Vance.
[End of section]
Footnotes:
[1] VA's ratings are in 10-percent increments, from 0 to 100 percent.
Generally, VA does not pay disability compensation for disabilities
rated at 0 percent. Since December 2008, basic monthly payments have
ranged from $123 for 10 percent disability to $2,673 for 100 percent
disability.
[2] 38 U.S.C. § 1115 provides for payment of additional benefits for
qualifying dependents of veterans whose disability is rated not less
than 30 percent.
[3] VA also pays pensions to surviving spouses and unmarried children
of deceased wartime veterans. In addition, VA pays dependency and
indemnity compensation to some deceased veterans' spouses, children,
and parents.
[4] The average days to complete a claim is the average processing time
of decisions reached during a specific time period. The average days
pending is the average time that pending claims at a point in time have
been awaiting a decision. For example, the average days pending for a
fiscal year is calculated on the last day of the year.
[5] The reported compensation claims data are comprised of three VBA
categories: initial compensation claims with eight or more issues,
initial compensation claims with seven or less issues, and reopened
compensation claims.
[6] See e.g., Haas v. Nicholson, 20 Vet. App. 257 (2006). The Agent
Orange Act of 1991, Pub. L. No. 102-4, broadens the presumption of
exposure to herbicides in Vietnam. See also, 38 C.F.R. § 3.309
(diseases subject to a presumptive service connection).
[7] Veterans Benefits Improvement Act of 2008, Pub. L. No. 110-389;
Veterans Benefits Improvement Act of 2004, Pub. L. No.108-454; Veterans
Benefits Act of 2003, Pub. L. No. 108-183; Veterans Claims Assistance
Act of 2000, Pub. L. No 106-475.
[8] See e.g., Haas v. Nicholson, 20 Vet. App. 257 (2006); Moody v.
Principi, 360 F.3d. 1306 (Fed. Cir. 2004); Szemraj v. Principi, 357
F.3d 1370 (Fed. Cir. 2004); Disabled American Veterans v. Secretary of
Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 2003).
[9] We analyzed rating-related compensation appeals from VA's appeals
database. In meeting testimony deadlines, we were unable to fully
explore reasons for some low record counts in this database prior to
fiscal year 2003, and therefore are limiting our reporting of appeals
trends to fiscal years 2003 through 2008.
[10] VA also redistributes workload from backlogged regional offices to
regional offices without resource centers but with more capacity than
the backlogged office. VA refers to moving workloads--to either a
resource center or another regional office--for processing as
"brokering."
[11] In September 2008, we reported that DOD and VA have relied on
local memoranda of understanding at 130 military bases to execute the
BDD program. However, some bases faced difficulties executing the
program due to changes in base command and lack of communication
between the agencies or resource constraints, which negatively affected
the efficiency of access to the BDD program. As such, we recommended
that VA and DOD take additional steps to ensure best practices about
the BDD program are disseminated across locations. GAO, Veterans'
Disability Benefits: Better Accountability and Access Would Improve the
Benefits Delivery at Discharge Program, GAO-08-901, Washington, D.C.,
Sept. 9, 2008).
[12] GAO, Veterans' Benefits: Quality Assurance for Disability Claims
and Appeals Processing Can Be Further Improved, [hyperlink,
http://www.gao.gov/products/GAO-02-806] (Washington, D.C.: Aug. 16,
2002); and Veterans Benefits: VA Needs Plan for Assessing Consistency
of Decisions, [hyperlink, http://www.gao.gov/products/GAO-05-99]
(Washington, D.C.: Nov. 19, 2004).
[13] [hyperlink, http://www.gao.gov/products/GAO-08-901].
[14] GAO, Military Disability System: Increased Supports for
Servicemembers and Better Pilot Planning Could Improve the Disability
Evaluation Process, [hyperlink,
http://www.gao.gov/products/GAO-08-1137] (Washington, D.C.: Sept. 24,
2008).
[End of section]
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