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[Senate Report 111-354]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 654
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-354

======================================================================

 
               CLAIMS PROCESSING IMPROVEMENT ACT OF 2010

                                _______
                                

               November 29, 2010.--Ordered to be printed

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 3517]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), to which was referred the bill (S. 3517), to 
amend title 38, United States Code (hereinafter, ``U.S.C.''), 
to improve the processing of claims for disability compensation 
filed with the Department of Veterans Affairs (hereinafter, 
``VA''), and for other purposes, having considered the same, 
reports favorably thereon with an amendment in the nature of a 
substitute, and recommends that the bill, as amended, do pass.

                              Introduction

    On June 22, 2010, Committee Chairman Daniel K. Akaka 
introduced S. 3517, the proposed ``Claims Processing 
Improvement Act of 2010.'' Senators Murray, Rockefeller, and 
Schumer were later added as cosponsors. S. 3517, as introduced, 
would amend title 38 to improve the processing of disability 
compensation claims at VA, and for other purposes. The bill was 
referred to the Committee.
    Earlier, on May 12, 2010, Chairman Akaka introduced 
S. 3348, to provide for the treatment of documents that express 
disagreement with decisions of the Board of Veterans' Appeals 
(hereinafter, ``Board'') and that are misfiled with the Board 
within 120 days of such decisions as motions for 
reconsideration of such decisions. The bill was referred to the 
Committee.
    On May 13, 2010, Chairman Akaka introduced S. 3367, to 
increase the rate of pension for disabled veterans who are 
married to one another and both of whom require regular aid and 
attendance, and for other purposes. The bill was referred to 
the Committee.
    On May 13, 2010, Chairman Akaka introduced S. 3368, to 
authorize certain individuals to sign claims filed with VA on 
behalf of claimants. The bill was referred to the Committee.
    On May 13, 2010, Chairman Akaka introduced S. 3370, to 
improve the process by which an individual files jointly for 
Social Security and dependency and indemnity compensation 
(hereinafter, ``DIC''), and for other purposes. The bill was 
referred to the Committee.
    On May 19, 2010, the Committee held a hearing on the above-
referenced bills and other benefits-related legislation. 
Testimony on the above-referenced bills was offered by: Thomas 
J. Pamperin, Associate Deputy Under Secretary for Policy and 
Program Management, Veterans Benefits Administration, 
Department of Veterans Affairs; Ian DePlanque, Assistant 
Director, Veterans Affairs and Rehabilitation Commission, The 
American Legion; Eric A. Hilleman, National Legislative 
Director, Veterans of Foreign Wars of the United States; Rick 
Weidman, Executive Director for Policy and Government Affairs, 
Vietnam Veterans of America; and Tom Tarantino, Legislative 
Associate, Iraq and Afghanistan Veterans of America.
    On June 16, 2010, Chairman Akaka introduced S. 3499, the 
proposed ``Fiduciary Benefits Oversight Act of 2010.'' S. 3499 
would authorize VA to obtain financial records of fiduciaries 
of individuals receiving benefits from VA. The bill was 
referred to the Committee.
    On July 14, 2010, the Committee held a hearing entitled 
``Review of Veterans Claims Processing: Are Current Efforts 
Working?'' Testimony on S. 3517 was offered by: Michael 
Walcoff, Acting Under Secretary for Benefits, Veterans Benefits 
Administration, Department of Veterans Affairs; Joseph 
Thompson, Former Under Secretary for Benefits; Linda Jan Avant, 
Rating Specialist, Little Rock, Arkansas Regional Office, and 
1st Vice President, Local 2054, American Federation of 
Government Employees; Richard Cohen, Executive Director, 
National Organization of Veterans' Advocates, Inc.; and Joe 
Violante, National Legislative Director, Disabled American 
Veterans, on behalf of The Independent Budget.

                           Committee Meeting

    After carefully reviewing the testimony from the foregoing 
hearings, the Committee met in open session on August 5, 2010, 
to consider, among other legislation, an amended version of 
S. 3517, consisting of provisions from S. 3517 as introduced 
and provisions from the other legislation noted above. The 
Committee voted, without dissent, to report favorably S. 3517 
as amended and as subsequently amended during the markup.

                     Summary of S. 3517 as Reported

    S. 3517, as reported (hereinafter, ``the Committee bill''), 
consists of 22 sections, summarized below:

    Section 1 would provide a short title and table of 
contents.
    Section 2 would provide for partial adjudication of claims 
consisting of multiple issues, one or more of which can be 
quickly adjudicated.
    Section 3 would authorize certain individuals to sign 
claims filed with VA on behalf of claimants who are incompetent 
or physically incapable of signing.
    Section 4 would clarify that the requirement that VA 
provide notice to claimants of additional information and 
evidence applies only when additional evidence or information 
is actually required to substantiate and grant a claim.
    Section 5 would require that equal deference be accorded to 
private medical opinions in assessing claims for disability 
compensation.
    Section 6 would require that claims that have the potential 
of being adjudicated quickly, as determined by experienced 
claims adjudicators, be expedited. It would also authorize VA 
to establish procedures related to fully-developed claims.
    Section 7 would authorize VA to utilize a retroactive 
effective date when awarding disability compensation based on 
applications that are fully-developed when submitted.
    Section 8 would require that VA send, with a rating 
decision, a form that, if completed and returned, would suffice 
as a Notice of Disagreement (hereinafter, ``NOD'').
    Section 9 would improve the process by which an individual 
files jointly for Social Security benefits and DIC.
    Section 10 would authorize VA to obtain financial records 
of fiduciaries of individuals receiving benefits from VA.
    Section 11 would provide for the treatment of documents 
that express disagreement with decisions of the Board and that 
are misfiled with the Board within 120 days of such decisions 
as motions for reconsideration of such decisions.
    Section 12 would modify the filing period for NODs from one 
year to 180 days, with a good cause exception.
    Section 13 would replace VA's obligation to provide a 
Statement of the Case with an obligation to provide a new, 
plain-language decision in the case.
    Section 14 would require a claimant to file a substantive 
appeal within 60 days of VA issuing a post-NOD decision, with a 
good cause exception.
    Section 15 would automatically waive the review of new 
evidence by the agency of original jurisdiction so that certain 
evidence submitted on or after the date a substantive appeal is 
filed will be subject to initial review by the Board, unless 
review by the agency of original jurisdiction is requested.
    Section 16 would require the Board to present an appellant 
with the options for a Board hearing and with a recommendation 
to the appellant of the option that would lead to the earliest 
possible date for the hearing and with statistics for the 
average wait experienced for similarly situated appellants.
    Section 17 would require the United States Court of Appeals 
for Veterans Claims (hereinafter, ``the Court'') to decide all 
issues raised by an appellant.
    Section 18 would allow a good cause extension, not to 
exceed 120 days, for filing a notice of appeal with the Court.
    Section 19 would require VA to carry out a pilot program on 
collaboration with tribal governments to improve the quality of 
claims for disability compensation.
    Section 20 would increase the rate of pension for disabled 
veterans who are married to one another and who both require 
regular aid and attendance.
    Section 21 would require VA to automatically increase the 
rates of disability compensation, DIC, and other rates whenever 
there is an increase in Social Security benefits.
    Section 22 would require VA to create an action plan to 
improve the correlation between employee compensation and 
performance.

                       Background and Discussion

Sec. 2. Adjudication of claims for disability compensation consisting 
        of multiple issues one or more of which can be quickly 
        adjudicated.

    Section 2 of the Committee bill, which is derived from 
S. 3517 as introduced, would provide for partial adjudication 
of claims consisting of multiple issues, one or more of which 
can be quickly adjudicated.
    Background. As of July 2010, it took, on average, 163.1 
days for VA to complete a rating decision for a claim for 
compensation. Although this is better than the average for 
Fiscal Year (hereinafter, ``FY'') 2008, which was 178.9 days, 
the average veteran waits nearly five and one-half months for a 
claim for compensation to be adjudicated. VA is predicting 
that, by the end of FY 2011, it will take on average 190 days 
to complete a claim. These timeframes do not include those 
decisions that are appealed.
    VA realized a 14.1 percent increase in claims receipts in 
2009; projected a 16.2 percent increase in 2010; and projected 
a 12 percent increase in 2011. The volume of claims received 
has increased from 578,773 in 2000 to 1,013,712 in 2009 (a 75 
percent increase). Many factors, including an aging veteran 
population, a decade of America's involvement in overseas 
conflicts, new laws and regulations, and greater outreach, have 
contributed to this increase in claims receipts.
    Through July 2010, VA completed 870,921 claims while taking 
in 938,958 claims. In addition, during the month of July, VA 
had approximately 508,000 pending disability claims, about 
173,000 (35 percent) of which were pending for longer than VA's 
strategic target of 125 days. This means that VA is taking in 
much more work than it can complete in a timely manner, despite 
a significant increase in staffing and several new initiatives 
aimed at bringing down the backlog.
    Also, original disability claims with eight or more issues 
increased from 22,776 in 2001 to 67,175 in 2009--a nearly 200 
percent increase. This increase in the number of issues per 
claim further complicates an already complex process.
    Committee Bill. Section 2 of the Committee bill would amend 
section 1157 of title 38, by adding a new subsection (b) to 
require VA to assign intermediate ratings for claims of 
compensation that have more than one condition and VA 
determines that a disability rating can be assigned with 
respect to one or more conditions within those claims without 
further development.
    This provision of the Committee bill would also require, in 
subparagraph (A) of (b)(1), that VA assign the disability 
rating expeditiously. New subparagraph (B) of new subsection 
(b)(1) would require that VA continue to develop the remaining 
conditions. New subsection (b)(2) would require that, if VA is 
able to assign a rating with respect to a remaining condition 
or conditions, then VA would combine such ratings with the 
intermediate rating or ratings previously assigned.
    VA would further have the discretion, in new subsection 
(b)(3), to assign an intermediate rating and then continue 
development of such condition and reassess the rating. All of 
these changes would take effect on the date of enactment and 
apply to claims filed on or after the date that is 60 days 
after enactment.
    It is the Committee's view that partial adjudication of 
claims would be beneficial to veterans, given that the average 
time to complete adjudication of a claim is nearly five and a 
half months, because at least partial payment of disability 
compensation could begin while that process is ongoing.

Sec. 3. Authority for certain individuals to sign claims filed with 
        Secretary of Veterans Affairs on behalf of claimants.

    Section 3 of the Committee bill, which is derived from 
S. 3368, would authorize certain individuals to sign claims 
filed with VA on behalf of claimants who are under age 18, are 
mentally incompetent, or are physically unable to sign a form.
    Background. Some claimants for VA benefits are so disabled 
as to be incapable of understanding the information on a 
benefits application form. Under current law, section 5101 of 
title 38, VA lacks specific authority to authorize a court-
appointed representative or caregiver to sign an application 
form allowing the adjudication of the claim to proceed. 
However, the Social Security Administration (hereinafter, 
``SSA'') has specific authority in section 404.612 of title 20 
of the Code of Federal Regulations (hereinafter, ``CFR'') to 
permit certain individuals, such as court-appointed 
representatives, to sign a claim form on behalf of an 
individual unable to understand and sign a claim form.
    Committee Bill. Section 3 of the Committee bill would amend 
section 5101 of title 38 to modify the application process for 
claims filed with VA to allow court-appointed representatives 
or caregivers to sign applications from individuals who are 
under 18 years of age, mentally incompetent, or physically 
unable to sign a form. These changes would apply with respect 
to claims filed on or after the date of enactment.
    This change will give VA the same authority that SSA has 
with respect to claimants who are unable to complete 
applications for benefits without requiring assistance. The 
Committee does not intend that this provision alter VA's 
responsibility to evaluate and appoint a fiduciary in cases 
where the beneficiary is determined to be incompetent to manage 
his or her benefits.

Sec. 4. Clarification that requirement of Secretary of Veterans Affairs 
        to provide notice to claimants of additional information and 
        evidence required only applies when additional information or 
        evidence is actually required.

    Section 4 of the Committee bill, which is derived from 
S. 3517 as introduced, would clarify a provision in current law 
that VA is obligated to provide notice to claimants of 
additional information and evidence only when additional 
evidence or information is actually required to substantiate 
and grant a claim.
    Background. Section 5103(a)(1) of title 38 requires VA to 
provide notice, upon receipt of a complete or substantially 
complete application, to a claimant and a claimant's 
representative, if any medical or lay evidence not previously 
provided is necessary to substantiate the claim. As part of 
that notice, VA is required to indicate which portion of that 
information and evidence, if any, is to be provided by the 
claimant and which portion, if any, VA will attempt to obtain 
on behalf of the claimant. VA has developed initiatives to 
adjudicate ``fully developed claims,'' those for which the 
veteran submits all information and medical or lay evidence 
needed to adjudicate the claim with the application for 
benefits.
    If the evidence submitted in support of a claim, together 
with any evidence previously submitted, is sufficient to 
substantiate the claim, there would be no additional 
information or evidence to notify the veteran to submit. In 
such cases, VA should proceed to adjudicate the claim. For 
example, if a veteran, who has a previous determination of 
service in the Republic of Vietnam and has been service-
connected for diabetes in a prior adjudication, submits 
evidence of a diagnosis of prostate cancer and current 
treatment for the condition at a VA facility, VA has sufficient 
evidence to both substantiate and grant the claim without the 
need for additional information or evidence. In such a case, 
there would be no need for VA to ``notify the claimant and the 
claimant's representative'' of information or evidence to 
substantiate the claim.
    Committee Bill. Section 4 of the Committee bill would amend 
section 5103(a)(1) of title 38 to require VA to provide notice 
to a claimant and a claimant's representative that additional 
information and evidence is required only when additional 
information or evidence is actually required to substantiate 
and grant a claim. These changes would apply with respect to 
claims filed on or after the date that is 60 days after the 
date of enactment.

Sec. 5. Equal deference to private medical opinions in assessing claims 
        for disability compensation.

    Section 5 of the Committee bill would provide for equal 
deference to private medical opinions in assessing claims for 
disability.
    Background. Section 5125 of title 38, provides that, for 
purposes of establishing any claim for benefits under chapters 
11 or 15, a private medical opinion that is provided by a 
claimant in support of a claim for benefits ``may be accepted 
without a requirement for confirmation by an examination by a 
[VA employee] if the report is sufficiently complete to be 
adequate for the purpose of adjudicating such claim.''
    Further, under section 5103A(d) of title 38, VA is required 
to provide an examination or medical opinion when either is 
necessary to adjudicate a claim. Section 5103A(d)(2) provides 
that an examination is required when the information of record: 
``(A) contains competent evidence that the claimant has a 
current disability, or persistent or recurrent symptoms of 
disability; and (B) indicates that the disability or symptoms 
may be associated with the claimant's active military, naval, 
or air service; but (C) does not contain sufficient medical 
evidence for [VA] to make a decision on the claim.''
    However, it appears that VA in some cases orders a medical 
evaluation despite having a private, non-VA, medical opinion 
already on record that should be sufficient to make a decision 
on the claim. For example, in testimony before the Committee 
during an oversight hearing on July 9, 2008, regarding undue 
delay in claims processing, the witness representing the 
Disabled American Veterans provided an example of VA's non-
utilization of private medical opinions.
    The Committee was presented with testimony about a veteran, 
who served 25 years honorably and was diagnosed with a right 
lumbar strain following a lifting injury in February 1963, 
after a 20 foot fall while rappelling, and once more when he 
was thrown from the vehicle while swerving to avoid a landmine 
in Vietnam.
    The veteran had a medical history containing months-long 
spans of back pain accompanied by neurological symptoms that 
were reported in 1966, 1968, 1973, 1974, and 1976. X-rays of 
the veteran's lower back taken prior to military discharge 
revealed an injury, and numerous private treatment records 
following discharge continued to document a definite 
disability. A board-certified orthopedic surgeon, who was also 
an Associate Professor of Orthopedic Surgery, diagnosed the 
veteran with degenerative joint disease of the lumbar spine 
with spinal stenosis. Later, VA received a medical opinion from 
this same orthopedic surgeon wherein he stated his belief that, 
in all likelihood, the Vietnam War injuries contributed to his 
early onset of arthritis and spinal stenosis.
    The veteran filed a claim for service connection for his 
lower back condition in January 2002, wherein he provided a 
detailed explanation of the circumstances of his injuries 
during service and the reasoning behind his failure to seek 
treatment in service. He submitted a statement to VA that all 
doctors who provided medical opinions on his condition had an 
opportunity to review a complete copy of his service medical 
records. A few months later VA received another medical opinion 
from a second board-certified orthopedic surgeon, an Associate 
Professor of Orthopedic Surgery, who stated that he had treated 
the veteran since March 1993 for chronic back issues and that 
he had reviewed the veteran's service medical records. The 
opinion stated that the veteran's ``condition is a continuation 
of the difficulties he developed in the service.'' The veteran 
submitted a second medical (totaling three) opinion from one of 
the surgeons stating that the lower back pain complaints he had 
while in the military ``gradually progressed to the point where 
he now has post-traumatic arthritis of the lumbar spine.'' A 
second opinion from the other surgeon (totaling four) was 
submitted that stated, ``[h]e had problems dating back to 1974 
* * *. I have reviewed his medical service record which 
indicates this difficulty to that point in time.''
    In developing the claim, the VA conducted an examination of 
the veteran, and requested an additional medical opinion, 
despite the four opinions already of record. The examination 
and medical opinion was performed by a non-certified physician 
assistant (``PA'' rather than ``PA-C''). Failing to refer to 
all of the treatment records in service, and without 
acknowledging the evidence that included four opinions 
presented by the two orthopedic surgeons, the physician 
assistant's opinion explored the likelihood that the veteran's 
condition was congenital and age related, thus not related to 
his service. Based on the physician assistant's opinion, the VA 
did not grant the claim.
    The veteran in the example above obtained evidence from 
multiple physicians. VA, in turn, obtained a contradictory 
opinion from one provider with lower credentials than all four 
physicians relied upon by the veteran. Hence, it appears that 
no deference was provided to the four physicians from whom 
medical opinions were obtained.
    Committee Bill. Section 5 of the Committee bill would add a 
new section to title 38, section 5103B, that would require 
that, if a claimant submits a private medical opinion in 
support of a claim for disability compensation and that opinion 
satisfies any standards established by VA, the opinion would be 
treated with the same deference as a medical opinion provided 
by a VA health care provider. However, if the private medical 
opinion is found by VA to be competent, credible, and 
probative, but otherwise not entirely adequate for purposes of 
assigning a disability rating or determining service-
connection, and VA determines that a medical opinion from a 
Department health care provider, to include a health care 
provider under contract with VA, is necessary for such 
purposes, VA would be required to obtain from an appropriate 
Department health care provider, a medical opinion that is 
adequate for such purposes. In the event that such an opinion 
is obtained, this provision further requires that VA, to the 
extent feasible, provide an opinion from a Department health 
care provider who has expertise in the same area as the private 
medical provider, if the private provider had opined on a 
pertinent issue within his or her expertise.
    This section would also amend section 5103(a) of title 38 
by adding a new paragraph (3), to require VA to notify a 
claimant, as the Secretary considers appropriate, regarding the 
rights of the claimant to assistance under section 5103A and, 
if the claimant submits a private medical opinion in support of 
the claim for disability compensation, how such medical opinion 
will be treated under new section 5103B.
    The Committee does not intend that the effect of this 
provision will be to tie VA's hands with respect to private 
medical evidence--VA would be required to treat the private 
medical opinion with equal deference if, and only if, such 
opinion satisfies standards established by the Secretary. One 
goal of this change is to eliminate overdevelopment of claims, 
which in turn may provide a decision on disability compensation 
for a veteran in a timelier manner, as well as allow VA 
resources to be used in areas which may need them more.
    The Committee further believes that there is, at a minimum, 
a perception of unfairness, if VA relies more heavily on a 
negative VA medical opinion from an examiner with lesser 
credentials, rather than the favorable medical opinions from 
one or more private medical examiners who provide competent, 
credible, and probative opinions with greater credentials than 
the VA examiner.

Sec. 6. Improvements to disability compensation claim review process.

    Section 6 of the Committee bill, which is derived from 
S. 3517 as introduced, would require expedited review of 
initial claims for disability compensation that have the 
potential of being adjudicated quickly. It would also authorize 
VA to establish procedures for fully-developed claims.
    Background. As noted in the discussion of section 2 of the 
Committee bill, the average time for the adjudication of an 
initial claim for disability compensation is five and a half 
months. In addition, as also discussed above, initial claims 
for compensation are growing increasingly complex as the number 
of claimed issues increases.
    Committee Bill. Subsection (a) of section 6 of the 
Committee bill would add a new section to title 38--5103C, 
entitled ``Expedited review of claims for disability 
compensation,'' which would require, in new subsection (a), VA 
to establish a process for the rapid identification of initial 
claims for disability compensation that should receive priority 
in review.
    Subsection (b) of new section 5103C would require VA to 
assign employees who are experienced in the processing of 
claims for disability compensation to carry out a preliminary 
review of all initial claims for disability compensation 
submitted to VA in order to identify if: the claims have the 
potential of being adjudicated quickly, they qualify for 
priority treatment, and a temporary disability rating could be 
assigned.
    Subsection (c) of new section 5103C would require VA to 
give priority to claims that have the potential of being 
adjudicated quickly. This subsection would also allow VA to 
prescribe by regulations the order of priority of claims for 
disability compensation, which allows some claims to be placed 
ahead of others for purposes of adjudication.
    Subsection (b) of section 6 of the Committee bill would add 
a new section to title 38--section 5103D, entitled ``Procedures 
for fully developed claims,'' which would allow a claimant to 
notify VA that he or she has no additional information or 
evidence to submit. VA would then be required to undertake any 
development necessary to obtain any Federal records, medical 
examinations, or opinions relevant to the claim and decide the 
claim based on all the evidence of record.
    New section 5103C would take effect 90 days after the date 
of enactment and new section 5103D would take effect on the 
date of enactment.

Sec. 7. Authority for retroactive effective date for awards of 
        disability compensation in connection with applications that 
        are fully-developed at submittal.

    Section 7, which was accepted as an amendment during Markup 
of the Committee bill, would allow up to a one year retroactive 
effective date for awards of disability compensation that are 
based on claims that are fully-developed when submitted to VA.
    Background. Under section 221 of Public Law 110-389, the 
Veterans' Benefits Improvement Act of 2008, VA was required to 
conduct a pilot project to test ``the feasibility and 
advisability of providing expeditious treatment of fully 
developed compensation or pension claims to ensure that such 
claims are adjudicated not later than 90 days after the date on 
which such claim is submitted as fully developed.'' After 
carrying out that pilot at 10 VA regional offices, VA expanded 
the fully-developed claim process to all VA regional offices. 
At a July 14, 2010, hearing before the Committee, VA's Acting 
Under Secretary for Benefits explained that, ``if VA receives 
all of the available evidence when the claim is submitted, the 
remaining steps in the claims-decision process can be expedited 
without compromising quality.''
    However, under current law, there is a potential 
disincentive for veterans to file fully-developed claims. That 
is because, under section 5110(a) of title 38, the effective 
date of an award of disability compensation generally cannot be 
earlier than the date on which VA received the application for 
those benefits. Although there are exceptions to that general 
rule, none of the exceptions would allow a retroactive 
effective date for veterans who file fully-developed claims. 
Accordingly, if a veteran takes time before filing a claim to 
gather the necessary information and evidence so as to ensure 
that the claim is fully-developed, the veteran could 
potentially lose out on benefits for the period between when 
the veteran began gathering the evidence and when he or she 
ultimately filed a fully-developed claim.
    Committee Bill. Section 7 of the Committee bill would amend 
section 5110 of title 38 to provide that the effective date of 
an award of disability compensation to a veteran who submitted 
a fully-developed claim would be based on the facts found but 
would not be earlier than one year before the date on which VA 
received the veteran's application.
    It is the Committee's expectation that, by allowing an 
effective date up to one year earlier than the date on which a 
fully-developed claim is filed, more veterans will be 
encouraged to file fully-developed claims and, in return, 
receive faster decisions on their claims.

Sec. 8. Provision by Secretary of Veterans Affairs of Notice of 
        Disagreement forms to initiate appellate review with notices of 
        decisions of Department of Veterans Affairs.

    Section 8 of the Committee bill, which is derived from 
S. 3517 as introduced, would require VA to develop a form that 
suffices as an NOD, as required to initiate appellate review 
under current law.
    Background. Under current law, section 511 of title 38, VA 
is required to decide all questions of law and fact necessary 
to a decision under a law that affects its provision of 
benefits to veterans or dependents or survivors of veterans. 
VA's decision is final and conclusive and may not be reviewed 
by any other official or court, unless it is a matter subject 
to judicial review by the United States Court of Appeals for 
Veterans Claims, or it pertains to insurance programs 
administered by VA or housing and small business programs 
administered by VA.
    Section 5104(a) of title 38 requires VA to provide a 
claimant and the claimant's representative timely notice of 
decisions under section 511 that affect the provision of 
benefits to a claimant. That notice must include an explanation 
of how to obtain review of the decision. In addition, section 
5104(b) provides that, if VA denies a benefit sought, the 
notice must include a statement of the reasons for the decision 
and a summary of the evidence relied upon by VA.
    Pursuant to section 7105 of title 38, once notice has been 
given to the claimant, the claimant must initiate appellate 
review by filing an NOD within one year, if the claimant wishes 
to have the decision reviewed. This initial step in the appeals 
process is mandatory. Under current VA regulations, section 
20.201 of title 38, CFR, an NOD is defined as a ``written 
communication from a claimant or his or her representative 
expressing dissatisfaction or disagreement with an adjudicative 
determination by the agency of original jurisdiction and a 
desire to contest the result.''
    Committee Bill. Section 8 of the Committee bill would amend 
section 5104(b) so as to require VA, in addition to providing a 
statement of the reasons for the decision and a summary of the 
evidence relied upon by VA in making a decision to provide an 
explanation of the procedure for obtaining review of the 
decision and a copy of a form that, once completed, will serve 
as an NOD. The explanation of the procedure for obtaining 
review of the decision would be required to include the period 
prescribed under paragraph (1) of section 7105(b) of title 38 
for filing an NOD and the good cause exception under new 
paragraph (3) of section 7105(b), as amended by section 12 of 
the Committee bill. These changes would take effect on the date 
that is 180 days after enactment.
    Given the complexity of the VA adjudication and appeals 
process, it is the Committee's belief that providing a form to 
the claimant that would suffice as the first step in obtaining 
appellate review would be beneficial to the claimant and should 
speed up the overall process.

Sec. 9. Improvement of process for filing jointly for Social Security 
        and dependency and indemnity compensation.

    Section 9 of the Committee bill, which is derived from 
S. 3370, would codify VA's current practice of allowing any 
claim for survivor benefits filed with SSA to establish the 
effective date for DIC benefits.
    Background. Under current law, section 5105 of title 38, VA 
and SSA are required to develop and use joint applications for 
survivor benefits for those who apply for both DIC and Social 
Security survivor benefits. Section 5105 further provides that, 
if such a joint application form is filed with either VA or 
SSA, it will be deemed an application for both DIC and Social 
Security benefits. However, at present, SSA applications are 
primarily online and VA's are paper-based.
    In a recent court case, Van Valkenburg v. Shinseki, 23 Vet. 
App. 113 (2009), VA represented to the Court that ``there has 
never been an individual `jointly prescribed form' promulgated 
between VA and SSA'' and that, ``in practice, a claim for 
survivor's benefits can be filed on any form, with either VA or 
SSA, when the applicant reflects an intent to seek such 
benefits.'' The Court accepted the Secretary's representation 
that ``any claim, sufficient to reflect an intent to apply for 
survivor's benefits, that is filed with SSA will suffice to 
establish the effective date of DIC.''
    Committee Bill. Section 9 of the Committee bill would amend 
section 5105 of title 38 to permit--but not require--the 
development of a joint form for SSA and VA survivor benefits. 
This provision of the Committee bill would also amend section 
5105 so that any form indicating an intent to apply for 
survivor benefits would be deemed an application for both DIC 
and Social Security benefits. This is intended to codify VA's 
practice under which any indication of intent to apply for 
Social Security survivor benefits is also treated as an 
application for VA DIC survivor benefits.

Sec. 10. Access by Secretary of Veterans Affairs to financial records 
        of individuals represented by fiduciaries and receiving 
        benefits under laws administered by Secretary.

    Section 10 of the Committee bill, which is derived from 
S. 3499, would authorize VA to obtain the financial records of 
fiduciaries from financial institutions.
    Background. Under section 5502(a)(1) of title 38, 
beneficiaries who have been determined by VA to be incompetent 
to handle their financial affairs may have a fiduciary 
appointed by VA to receive their benefits. Section 5502(a)(2) 
of title 38 allows the Secretary to authorize a reasonable 
commission for services rendered by an appointed fiduciary, if 
the appointment is necessary to obtain services that are in the 
best interests of the beneficiary. Under section 5502(b) of 
title 38, VA is responsible for monitoring the activity of 
fiduciaries to assure that the monies paid to the fiduciary are 
used only for the beneficiary and the beneficiary's dependents.
    VA may request that a fiduciary sign a release of 
information to enable VA to obtain the records of a financial 
institution in order to review such records in the course of 
its oversight of the fiduciary. There is currently no specific 
sanction if a fiduciary refuses or neglects to sign an 
authorization. Under section 1104 of Public Law 95-630, the 
Financial Institutions Regulatory and Interest Rate Control Act 
of 1978, codified at section 3404 of title 12, United States 
Code, any release signed by a fiduciary is valid ``for a period 
not in excess of three months.'' This amount of time is not 
always adequate for VA to properly monitor the financial 
accounts of certain fiduciaries.
    The Social Security Administration, which is responsible 
for similar monitoring of benefits paid to ``representative 
payees'' of beneficiaries of their programs, has authority to 
obtain financial records for proper administration of its 
programs under section 3413 of title 12, United States Code, 
without the time limitation applicable to VA.
    Committee Bill. Section 10 of the Committee bill would 
amend section 5502 of title 38 to add a new subsection (f) that 
would authorize VA to access the financial records of 
fiduciaries of individuals receiving benefits.
    New subsection (f) of section 5502 would allow VA to 
require any person appointed or recognized as a fiduciary for a 
VA benefit to provide authorization for VA to obtain from any 
financial institution any financial record held by the 
institution with respect to the fiduciary or beneficiary if VA 
determines that the financial record is necessary for the 
administration of any program administered by VA, or to 
safeguard a beneficiary's benefits against neglect, 
misappropriation, misuse, embezzlement, or fraud.
    Under new subsection 5502(f) an authorization by a 
fiduciary would remain in effect until the earlier of: an 
approval by a court or VA of a final accounting of payment of 
any VA-administered benefit; in the absence of any evidence of 
neglect, misappropriation, misuse, embezzlement, or fraud, the 
express revocation by the fiduciary of the authorization in a 
written notification to VA; or three years after the date of 
the authorization.
    Were a fiduciary to refuse to provide or to revoke any 
authorization to permit VA to obtain financial records, new 
subsection 5502(f) would allow VA to remove the appointment of 
recognition of the fiduciary for such beneficiary and any other 
VA beneficiary for whom the fiduciary has been appointed or 
recognized.
    The Committee expects that enactment of this provision 
would improve the ability of VA to identify and prevent 
neglect, misappropriation, misuse, embezzlement, or fraud 
involving VA monies paid to fiduciaries. This provision will 
provide VA with authority similar to that provided to the 
Social Security Administration for similar beneficiaries of its 
programs.

Sec. 11. Treatment of certain misfiled documents as motions for 
        reconsideration of decisions by Board of Veterans' Appeals.

    Section 11 of the Committee bill, which is derived from 
S. 3348, would provide for the treatment of documents that 
express disagreement with decisions of the Board and that are 
misfiled with the Board or an agency of original jurisdiction 
(hereinafter, ``AOJ'') within 120 days of such decisions as 
motions for reconsideration of such decisions.
    Background. If a claimant disagrees with a Board decision, 
the claimant has the option, under section 7103 of title 38, to 
ask the Board for reconsideration or to appeal to the U.S. 
Court of Appeals for Veterans Claims pursuant to section 7266 
of title 38. Under section 7266, an appeal to that Court must 
be filed with the Court within 120 days after notice of the 
Board decision is mailed to the claimant. Veterans or their 
family members are sometimes confused by this process and 
incorrectly send the Notice of Appeal to one of VA's offices. 
If that happens and the Notice of Appeal is not forwarded to 
the Court within the 120-day window, the appeal eventually may 
be dismissed by the Court as untimely.
    In Posey v. Shinseki, 23 Vet. App. 406 (2010), the Court 
discussed this problematic situation where claimants notify VA 
of their disagreement with a decision of the Board but 
mistakenly send their documents to VA instead of the Court. The 
Court suggested that VA be held accountable for properly 
receiving and forwarding Notices of Appeal.
    Judge Hagel wrote a concurring opinion that includes this 
observation:

          It has become clear to me that VA somewhat routinely 
        holds correspondence from claimants that it determines, 
        sometime after receipt, are Notices of Appeal to this 
        Court. As a result, in far too many cases, the Court 
        receives the Notice of Appeal from VA only after the 
        120-day appeal period has expired, permitting the 
        Secretary to then move to dismiss the appeals for lack 
        of jurisdiction * * *.

    As one possible solution, Judge Hagel made this suggestion:

          Another option * * * would be for Congress to amend 
        38 U.S.C. 7103 (governing reconsideration of Board 
        decisions) or 38 U.S.C. 7266 (regarding Notices of 
        Appeal) to include language providing that a Notice of 
        Appeal filed with VA during the 120-day appeal period 
        following an adverse Board decision will be treated as 
        a motion for reconsideration of the Board decision if 
        VA does not forward the Notice of Appeal to the Court 
        in a timely manner.

    Committee Bill. Section 11 of the Committee bill would 
amend section 7103 of title 38 to add a new subsection (c), to 
provide that a Notice of Appeal sent to VA, instead of the 
Court, will be considered as a motion for reconsideration by 
the Board in certain circumstances. Specifically, this new 
subsection would provide that, if a person, within the 120-day 
appeal period, files a document with the Board or the AOJ, 
expressing disagreement with a Board decision and has not yet 
filed a Notice of Appeal with the Court, the document will be 
treated as a motion for reconsideration, unless the Board or 
AOJ determines that the document expresses an intent to appeal 
to the Court and forwards the document to the Court within the 
120-day appeal period and the Court receives the document 
within the 120-day period. This change would treat the notice 
sent to VA as a request for reconsideration of the Board 
decision, thereby permitting the claimant to have his or her 
case reconsidered by the Board as well as preserve the later 
right of appeal to the Court.

Sec. 12. Modification of filing period for notice of disagreement to 
        initiate appellate review of decisions of Department of 
        Veterans Affairs.

    Section 12 of the Committee bill, which is derived from 
S. 3517 as introduced, would modify the filing period for an 
NOD from one year to 180 days, with a good cause exception.
    Background. Under current law, section 7105(b) of title 38, 
a claimant has one year to file an NOD after the date on which 
VA mails notice of an initial decision on a claim for benefits, 
meaning that, in some cases, VA must wait a year to determine 
if a claimant disagrees with a decision on a claim for 
benefits. If a claimant waits until the end of the one-year 
period to file an NOD, VA is often required to re-develop the 
record to ensure the evidence of record is up to date. Data 
from the Board supports the conclusion that post-NOD 
development delays the resolution of the claim. In FY 2008, 
appeals in which the AOJs received an NOD more than 180 days 
after the date the decision was mailed took, on average, 32 
additional days to decide. If the period in which to file an 
NOD were reduced to 180 days, VA could more quickly finalize 
the administrative processing of claims not being appealed and 
focus resources on the processing of new pending claims and 
appeals.
    Committee Bill. Section 12 of the Committee bill would 
amend section 7105(b) of title 38 to modify the filing period 
for NODs to 180 days. It would also permit NODs to be filed 
electronically.
    With the addition of a new paragraph (3)(A) to section 
7105(b), VA would also be authorized to grant good cause 
exceptions to the 180-day limit under specific circumstances, 
such as: circumstances relating to any physical, mental, 
educational, or linguistic limitation of the claimant, legal 
guardian, representative, attorney, or authorized agent; 
circumstances relating to significant delay in the delivery of 
the initial decision or of the NOD caused by natural disaster 
or geographic location; or any change in financial 
circumstances. If good cause for lack of filing within the 180-
day period is shown, the NOD will be treated as timely if filed 
within 186 days after the initial 180-day period ends.
    These changes would take effect 180 days after the date of 
enactment and apply to claims filed on or after the date of 
enactment.
    Because the majority of claimants are able to determine 
quickly if they are satisfied with VA's decision on their 
claim, it is the Committee's view that enactment of this 
provision should not adversely affect claimants for VA 
benefits. In FY 2008, 77 percent of the NODs were filed in less 
than 180 days. Among these cases, the average time to file an 
NOD was just 41 days.

Sec. 13. Provision of post-notice of disagreement decisions to 
        claimants who file notices of disagreements.

    Section 13 of the Committee bill, which is derived from 
S. 3517 as introduced, would replace VA's responsibility to 
provide a ``statement of the case'' with a requirement to 
provide a ``post-notice of disagreement decision.''
    Background. Under current law, section 7105 of title 38, 
appellate review is initiated by an NOD and completed by a 
substantive appeal after a statement of the case is provided by 
VA to the claimant and to the claimant's representative, if 
any. Pursuant to subsection (d)(1) of that section, a statement 
of the case must contain a summary of the pertinent evidence, a 
citation to pertinent laws and regulations, a discussion of how 
those laws and regulations affect the decision, the decision on 
each issue, and a summary of the reasons for each decision.
    Committee Bill. Section 13 of the Committee bill would 
amend section 7105 to replace VA's responsibility to provide a 
``statement of the case,'' as currently mandated by section 
7105, with a requirement to provide a ``post-notice of 
disagreement decision.''
    This provision of the Committee bill would additionally 
rewrite section 7105(d)(1) to require that the post-notice of 
disagreement decision include: in new subparagraph (A), a 
description of the specific facts that support VA's decision, 
including an assessment as to the credibility of any lay 
evidence pertinent to the issue or issues with which 
disagreement has been expressed; in new subparagraph (B), a 
citation to pertinent laws and regulations that support VA's 
decision; in new subparagraph (C), a statement that addresses 
each issue and provides the reasons why the evidence relied 
upon supports the conclusions of the agency under the specific 
laws and regulations applied; in new subparagraph (D), the date 
by which a substantive appeal must be filed in order to obtain 
further review of the decision; and in new subparagraph (E), 
the rights of the claimant under subsection (f) of section 
7105, as added by section 15 of the Committee bill, to request 
that the agency of original jurisdiction initially review 
evidence that has been submitted after the agency of original 
jurisdiction receives a substantive appeal.
    Section 13 would further require, in new paragraph (d)(4) 
of section 7105, as renumbered by section 4 of the Committee 
bill, that the post-notice of disagreement decision be written 
in plain language. The changes made by this section would take 
effect 180 days after enactment and apply with respect to NODs 
filed on or after that date.

Sec. 14. Modification of substantive appeal process.

    Section 14 of the Committee bill, which is derived from 
S. 3517 as introduced, would require a claimant to file a 
substantive appeal within 60 days of VA mailing a post-notice 
of disagreement decision and allow an extension of that period 
with good cause.
    Background. Under current law, section 7105(a) of title 38, 
an appeal to the Board must be initiated by the claimant's 
filing of an NOD and completed by the claimant's filing of a 
substantive appeal, which is the means that a claimant must use 
to respond to the statement of the case, or VA's version of the 
issues in dispute.
    Current law, section 7105(d)(3), as it relates to 
substantive appeals, provides that:

          Copies of the ``statement of the case'' * * * will be 
        submitted to the claimant and to the claimant's 
        representative, if there is one. The claimant will be 
        afforded a period of sixty days from the date the 
        statement of the case is mailed to file the formal 
        appeal. This may be extended for a reasonable period on 
        request for good cause shown. The appeal should set out 
        specific allegations of error of fact or law, such 
        allegations related to specific items in the statement 
        of the case. The benefits sought on appeal must be 
        clearly identified. The agency of original jurisdiction 
        may close the case for failure to respond after receipt 
        of the statement of the case, but questions as to 
        timeliness or adequacy of response shall be determined 
        by the Board of Veterans' Appeals.

    In addition, VA regulations, 38 CFR 20.302(b), provide that 
a ``Substantive Appeal must be filed within 60 days from the 
date that the agency of original jurisdiction mails the 
Statement of the Case to the appellant, or within the remainder 
of the 1-year period from the date of the mailing of the 
notification of the determination being appealed, whichever 
period ends later.'' Another VA regulation, 38 CFR 19.34, 
provides that a determination by the agency of original 
jurisdiction as to the timeliness of the a Substantive Appeal 
is an appealable issue.
    Committee Bill. Section 14 of the Committee bill is tied to 
the changes proposed in section 13 of the Committee bill, which 
would replace VA's current requirement to provide a ``statement 
of the case'' to claimants with a requirement to provide a 
``post-notice of disagreement decision.''
    Section 14 of the Committee bill would create a new 
subsection, (e) to section 7105, which would allow the claimant 
60 days to file a substantive appeal after a post-notice of 
disagreement decision is mailed. This provision of the 
Committee bill would authorize VA to grant an additional 60 
days, in new section 7105(e)(2)(A), to file a substantive 
appeal for good cause, rather than the undefined period in 
current law. Good cause is defined in new section 7105(e)(2)(B) 
as including those circumstances relating to any physical, 
mental, educational, or linguistic limitation of the claimant, 
legal guardian, or other accredited representative, attorney, 
or authorized agent filing the request; circumstances relating 
to significant delay in the delivery of the initial decision or 
of the NOD caused by natural disaster or factors relating to 
geography; or a change in the financial circumstances that are 
considered in determining eligibility for benefits or services 
on an annualized basis.
    Consistent with current law, proposed new section 
7105(e)(4) would provide that a claimant would not be presumed 
to agree with any statement of fact contained in the new 
``post-notice of disagreement decision'' with which he or she 
does not specifically disagree.
    Section 7105 would be further modified by section 14 of the 
Committee bill to clarify, in new subparagraph (e)(5), what 
occurs when a claimant does not file a substantive appeal in 
accordance with the law, to include requiring dismissal of the 
case by the agency of original jurisdiction and notification of 
the claimant of such dismissal. The notification would include 
an explanation of the procedure for obtaining review of the 
dismissal by the Board.
    The changes proposed by section 14 of the Committee bill 
would take effect on the date of enactment and apply with 
respect to claims filed on of after the date 180 days after 
enactment.

Sec. 15. Automatic waiver of agency of original jurisdiction review of 
        new evidence.

    Section 15 of the Committee bill, which is derived from 
S. 3517 as introduced, would automatically waive the review of 
certain new evidence by the AOJ so that certain evidence 
submitted after the initial decision will be subject to initial 
review by the Board, unless review by the agency of original 
jurisdiction is requested.
    Background. VA regulations, section 20.1304(c) of title 38, 
CFR, provide that, if additional evidence is submitted to the 
Board after an appeal is certified to the Board, the evidence 
``must be referred to the agency of original jurisdiction for 
review, unless this procedural right is waived by the appellant 
or representative.'' The requirement that the AOJ initially 
consider all evidence, unless the claimant waives the right, 
frequently delays the final adjudication of claims because 
claimants often submit additional evidence after perfecting 
their appeals to the Board by filing a substantive appeal. 
Under current procedures, each time a claimant, after filing a 
substantive appeal, submits more evidence without waiving the 
right to initial AOJ consideration, the AOJ must review the 
evidence submitted and issue a supplemental statement of the 
case pursuant to section 19.31 of title 38, CFR, that addresses 
the additional evidence.
    Committee Bill. Section 15 of the Committee bill would 
amend section 7105 by creating a new subsection (f) that would 
provide for an automatic waiver of the right to initial 
consideration of certain evidence by the AOJ. The evidence that 
would be subject to the waiver is evidence that the claimant or 
his or her representative submits to the AOJ or the Board 
concurrently with or after filing the substantive appeal. Such 
evidence would be subject to initial consideration by the 
Board, unless the appellant or his or her representative 
requests in writing that the AOJ initially consider the 
evidence. The request would be required to be submitted with 
the evidence or within 30 days of its submittal of the 
evidence.
    These changes would take effect 180 days after enactment 
and apply with respect to claims for which a substantive appeal 
is filed on or after that date.
    The Committee believes that the establishment of an 
automatic waiver would necessarily improve the timeliness of 
processing appeals as a whole. Because the Board bases its 
decisions on a de novo review of all the evidence of record, 
many more appeals could be more quickly transferred to the 
Board following the receipt of a substantive appeal. The AOJs 
would spend less time responding to appellants who submit 
additional evidence following the filing of a substantive 
appeal. By presuming a waiver of AOJ review of new evidence, 
the Board would be able to adjudicate claims without the delay 
of a remand, thereby getting final decisions to veterans 
quicker and reducing the increased appellate workload caused by 
the reworking of remanded claims. In addition, any appellant 
wishing to have the evidence considered by the AOJ in the first 
instance would still have the right to such a review simply by 
alerting the Board of that desire.

Sec. 16. Determination of location and manner of appearance for 
        hearings.

    Section 16 of the Committee bill, which is derived from 
S. 3517 as introduced, would require the Board to present an 
appellant the options for a Board hearing.
    Background. Under current law, section 7107(d) of title 38, 
if an individual appeals to the Board, the individual may 
request a hearing before the Board at the Board's principal 
location in Washington, DC, or at a VA facility in the area of 
the appellant's local regional office (called field hearings or 
travel Board hearings). In addition, that section provides that 
field hearings may be conducted ``through voice transmission or 
through picture and voice transmission'' with Board members 
sitting in Washington, DC. According to the Board's Annual 
Report to Congress for Fiscal Year 2009, in fiscal year 2009, 
the Board conducted 3,375 video hearings and 7,784 field 
hearings. Although veterans are less likely to utilize video 
hearings, as opposed to travel Board hearings, the Board 
reports that there is no statistical difference in the 
allowance rate of appeals in which hearings are held in the 
field compared to video conference hearings. Also, the Board 
will move to a new location in 2011, where it will have 17 
video hearing rooms instead of just five.
    According to the Board, the potential results of expanded 
use of video capabilities include serving more veterans, 
reducing an appellant's wait time for a hearing, and increasing 
efficiency in issuing final decisions on appeal, as travel days 
can be utilized as decision-generating workdays and the Board 
will not lose time in the field due to appellants who fail to 
show up for scheduled hearings.
    Committee Bill. Section 16 of the Committee bill would 
amend subsection (d)(1) of section 7107 of title 38 to provide 
that, upon request from an appellant for a hearing before the 
Board, the Board would be required to present the appellant 
with the options for a Board hearing, to include the Board's 
principal location in Washington, DC, a travel board hearing, 
or a video hearing, along with a recommendation to the 
appellant of the option that would lead to the earliest 
possible date for the hearing and statistics for the average 
wait experienced for similarly situated appellants. This 
section would also amend subsection (e) of section 7107 of 
title 38 to require the Board to inform the appellant of the 
advantages and disadvantages of participation in a hearing 
utilizing the Board's principal location in Washington, DC, a 
travel board hearing, or a video hearing. These changes would 
take effect 180 days after enactment and apply to requests for 
hearings made on or after that date.
    It is the Committee's view that these changes should allow 
appellants to make a better informed choice of the type of 
hearing that best suits their needs and preferences. If these 
provisions are enacted, veterans would be better informed of 
their options for a hearing, including the potential for video 
hearings, which have been shown to be statistically as 
advantageous to a veteran as a travel Board hearing.

Sec. 17. Decision by Court of Appeals for Veterans Claims on all issues 
        raised by appellants.

    Section 17 of the Committee bill, which is derived from 
S. 3517 as introduced, would require the Court of Appeals for 
Veterans Claims (hereinafter, ``CAVC'') to decide all issues 
raised by appellants in the cases that come before it.
    Background. Under current law, section 7261(a)(1) to (4) of 
title 38, the Court, ``to the extent necessary to its decision 
and when presented, shall'': (1) decide relevant questions of 
law, interpret statutory and regulatory provisions, and 
determine the meaning or applicability of the terms of an 
action of VA; (2) compel action of VA unlawfully withheld or 
unreasonably delayed; (3) hold unlawful and set aside 
decisions, findings, conclusions, rules, and regulations issued 
or adopted by VA that are found to be arbitrary, capricious, an 
abuse of discretion, or otherwise not in accordance with the 
law, contrary to constitutional power, privilege or immunity, 
in excess of statutory jurisdiction, authority, or limitations, 
or in violation of statutory law, or without observance of 
procedure required by law; and (4) hold unlawful and set aside 
or reverse findings of fact if they are clearly erroneous. See 
Mahl v. Principi, 15 Vet. App. 37, 38 (2001) (holding that 
where remand is appropriate, the Court need not ``analyze and 
discuss all the other claimed errors that would result in a 
remedy no broader than a remand''); Best v. Principi, 15 Vet. 
App. 18, 20 (2001) (per curiam order) (holding that ``[a] 
narrow decision preserves for the appellant an opportunity to 
argue those claimed errors before the Board at the 
readjudication, and, of course, before this Court in an appeal, 
should the Board rule against him'').
    Committee Bill. Section 17 of the Committee bill would 
amend section 7261 of title 38, relating to the Court's scope 
of review, to require CAVC to decide all issues raised by 
appellants in cases before the Court. Specifically, section 
7261(a) would be amended by striking the phrase ``to the extent 
necessary to its decision,'' thereby removing the Court's 
discretion to address issues pertaining to paragraphs (1) to 
(4) of that section when presented by any party. This provision 
of the Committee bill would also add a new subsection, (c), to 
section 7261 to require that the Court render a decision on 
every issue raised by an appellant.

Sec. 18. Good cause extension of period for filing notice of appeal 
        with United States Court of Appeals for Veterans Claims.

    Section 18 of the Committee bill, which is derived from 
S. 3517 as introduced, would create a good cause extension, not 
to exceed 120 days, for filing a notice of appeal with the 
Court.
    Background. Under section 7266(a) of title 38, if a 
claimant disagrees with a decision of the Board, the claimant 
may appeal to the Court by filing a notice of appeal within 120 
days after the date on which notice of the decision was mailed 
by the Board.
    In Henderson v. Shinseki, 589 F.3d 1201 (Fed. Cir. 2009) 
(en banc), the United States Court of Appeals for the Federal 
Circuit (hereinafter, ``Federal Circuit'') held that the 120-
day period for filing a notice of appeal to the Court is 
jurisdictional and not subject to equitable tolling. This 
inflexible application of the time limit for appeal creates 
sometimes harsh results.
    The absence of any provision for a ``good cause'' extension 
in section 7266(a) of title 38 also creates a disparity between 
veterans appealing a decision to the Court and other appellants 
in federal appeals courts because section 2107(c) of title 28 
allows a limited ``good cause'' extension of the period for 
appealing to a Federal circuit court of appeals.
    Committee Bill. Section 18 of the Committee bill would 
modify section 7266 of title 38 to authorize the Court of 
Appeals for Veterans Claims to extend the 120-day period for 
appealing a decision of the Board to the Court of Appeals for 
Veterans Claims no more than an additional 120 days based on a 
showing of ``good cause.''
    It is the Committee's intent to amend section 7266(a) to 
permit a limited ``good cause'' extension of the appeal period 
so as to place veterans on equal footing with appellants in 
other federal courts and prevent sometimes harsh results due to 
the lack of such a period.
    Matters concerning the existence of ``good cause'' for the 
extension of the appeal filing period or the timeliness of a 
motion for extension necessarily turn upon the facts of each 
litigant's case and are therefore not reviewable under section 
7292(a) and (d) of title 38, which preclude the Federal Circuit 
from reviewing the Court of Appeals for Veterans Claims 
decisions on factual matters or the application of law to the 
facts of a case. Notwithstanding the clear jurisdictional 
mandate of that statute, the Federal Circuit has at times 
asserted authority to review all matters pertaining to the 
Court of Appeals for Veterans Claims, irrespective of whether 
the particular matter presented turned only upon the facts of a 
particular case. See, e.g., Morris v. Principi, 239 F.3d 1292, 
1294 (Fed. Cir. 2001); Maggitt v. West, 202 F.3d 1370, 1379-80 
(Fed. Cir. 2000). Without addressing whether Congress condones 
those actions, it is not the Committee's intent to open the 
door to that type of review for good cause determinations 
relating to filing a notice of appeal.

Sec. 19. Pilot program on participation of local and tribal governments 
        in improving quality of claims for disability compensation 
        submitted to Department of Veterans Affairs.

    Section 19 of the Committee bill, which is derived from 
S. 3517 as introduced, would create a pilot program on 
collaboration with local and tribal governments to improve the 
quality of claims for disability compensation.
    Background. Although VA, local governments, and tribal 
governments all seek to provide veterans with the benefits for 
which they are eligible, coordination among these entities is 
limited. This is especially true for VA's coordination efforts 
with tribal governments, despite the fact that U.S. Census data 
show that American Indians and Alaska Natives serve in the U.S. 
military at a much higher rate than the general population. 
Further still, according to a September 2006 analysis by VA's 
Office of Policy and Planning, American Indian and Alaska 
Native veterans are nearly 50 percent more likely than other 
veterans to have a service-connected disability, and those 
under age 65 are twice as likely to be unemployed, making their 
receipt of health care, disability compensation, and other 
benefits even more crucial.
    VA currently serves the health care needs of American 
Indians and Alaska Natives under a memorandum of understanding 
with the Indian Health Service (hereinafter, ``IHS'') and 
sharing agreements between the Veterans Health Administration 
and federally recognized tribal governments. The approach of 
collaborating with IHS and tribal governments through memoranda 
of understanding and sharing agreements has shown some promise. 
However, coordination between the Veterans Benefits 
Administration and federally recognized tribal governments is 
much more limited.
    In recent years, Congress has authorized VA to operate 
benefits programs and conduct outreach in a way that responds 
to the practical realities of Indian Country, Alaska Native 
villages, and Hawaiian Homelands. For example, because of 
commercial lenders' reluctance to extend mortgage loans secured 
by properties resting on Native American trust land, section 
103 of Public Law 109-233, the Veterans' Housing Opportunity 
and Benefits Improvement Act of 2006, made permanent VA's 
authority to make housing loans directly to Native American 
veterans. In addition, section 403 of Public Law 109-461, the 
Veterans Benefits, Health Care, and Information Technology Act 
of 2006, enabled Native American tribal governments to apply 
for construction grants under VA's State Cemetery Grant 
program, a program previously only open to States. The 
Committee believes that further progress can be made through 
stronger partnerships and greater cultural understanding 
between VA and tribal organizations and the Native Hawaiian 
community.
    Committee Bill. Section 19 of the Committee bill, in a 
freestanding provision, would require VA to establish and 
implement a pilot program to study the feasibility and 
advisability of entering into memorandums of understanding 
(hereinafter, ``MOU'') with local governments and tribal 
organizations in the provision of certain benefits to veterans. 
VA would be required to enter into an MOU with at least two 
tribal organizations. The program would seek to improve quality 
of claims submitted for compensation and provide assistance to 
veterans in submitting such claims.
    The Committee recognizes that many local governments, as 
well as some tribal governments, already operate paid and 
volunteer services for veterans in their communities. Through 
the type of collaboration envisioned by this section, those 
service providers could work with VA to advance their shared 
goals. It is the Committee's view that VA must collaborate with 
local governments and federally recognized tribal governments 
in order to more effectively and efficiently provide veterans' 
benefits.

Sec. 20. Increase in rate of pension for disabled veterans married to 
        one another and both of whom require regular aid and 
        attendance.

    Section 20 of the Committee bill would increase the benefit 
paid to married couples when both members are veterans who 
qualify for aid and attendance.
    Background. Veterans of a period of war who meet income, 
net worth, and other eligibility criteria are eligible to 
receive a pension based upon need. The amount of the pension is 
based upon the number of dependents of the veteran. Additional 
benefits are paid if the veteran has a disability which results 
in housebound status or need for aid and attendance. In 
general, when a veteran is married to a veteran, the pension 
benefits paid are the same as for a veteran who is married to a 
non-veteran. However, in cases where one or both members of a 
veteran couple is housebound and/or in need of aid and 
attendance, the additional amounts paid are computed separately 
for each veteran and added to the basic grant.
    In 1998, section 8206 of Public Law 105-178, the 
Transportation Equity Act for the 21st Century, increased the 
VA benefit for a veteran who requires aid and attendance by 
$600 per year. Because of the way the legislation was drafted, 
the benefit was increased for only one of the veterans in those 
rare cases where a veteran is married to a veteran and both 
require aid and attendance. The legislative history of that law 
does not indicate any intent to treat these spouses 
differently. According to VA there are currently only 74 cases 
in which this applies. Therefore, under current law, if a 
veteran who is married to a veteran where both veterans qualify 
for aid and attendance benefits, the benefit amount for one of 
the spouses is $825 per year lower than for the other spouse.
    Committee Bill. The Committee bill would increase the 
benefit paid to married couples where both members of the 
couple are veterans and both qualify for aid and attendance by 
$825.00 per year. This amount represents the present value of 
the $600 increase added in 1998.

Sec. 21. Automatic annual increase in rates of disability compensation 
        and dependency and indemnity compensation.

    Section 21 of the Committee bill, which was accepted as an 
amendment during Markup of the Committee bill, would require 
that whenever there is an increase in benefit amounts payable 
under title II of the Social Security Act, VA would 
automatically increase the rates of disability compensation and 
DIC, among other rates, by the same percentage and make it 
effective on the same date.
    Background. The service-connected disability compensation 
program under chapter 11 of title 38, provides monthly cash 
benefits to veterans who have disabilities incurred or 
aggravated during active service in the Armed Forces. The 
amount of compensation paid depends on the nature and severity 
of a veteran's disability or combination of disabilities and 
the extent to which the disability impairs earning capacity. 
Certain veterans with more severe disabilities are also 
eligible to receive additional compensation on behalf of the 
veteran's spouse, children, and dependent parents.
    Under chapter 13 of title 38, VA pays DIC to the survivors 
of servicemembers or veterans who died on or after January 1, 
1957, from a disease or injury incurred or aggravated during 
military service. Survivors eligible for DIC include surviving 
spouses, unmarried children under the age of 18, children age 
18 or older who are permanently incapable of self-support, 
children between the ages of 18 and 22 who are enrolled in 
school, and certain needy parents.
    Section 415(i) of title 42 provides for an automatic annual 
cost-of-living adjustment (hereinafter, ``COLA'') for benefits 
payable under title II of the Social Security Act based on the 
annual increase in consumer prices. Title II Social Security 
benefits are indexed to the Consumer Price Index for Urban Wage 
Earners and Clerical Workers (hereinafter, ``CPI-W''), which is 
published on a monthly basis by the Bureau of Labor Statistics. 
The annual COLA increase is equivalent to the increase in the 
CPI-W from the most recent period between the third quarter of 
one calendar year to the third quarter of the next.
    Currently, under section 5312 of title 38, there are 
several VA benefits that receive automatic increases tied to 
the annual adjustments in title II Social Security benefits. 
These include pension benefits for indigent, wartime veterans 
who are permanently and totally disabled due to a non-service-
connected condition, or over the age of 65, as well as their 
surviving spouses and children, and DIC benefits for the 
parents of a deceased veteran whose income is below a specified 
threshold.
    However, the majority of disability compensation and DIC 
benefits paid by VA are not indexed to the CPI-W and do not 
increase automatically when title II Social Security benefits 
are increased. Instead, Congress regularly enacts an annual 
cost-of-living adjustment to ensure that inflation does not 
erode the purchasing power of VA benefits. Although Congress in 
recent years has consistently enacted legislation on time so as 
to provide benefit recipients with a COLA increase beginning 
December 1 of each year, veterans service organizations have 
expressed support for making the COLA automatic, as 
demonstrated during legislative hearings of the Committee.
    Committee Bill. Section 21 of the Committee bill would 
amend section 5312 of title 38, so as to add a new subsection 
(d)(1), which would require VA to increase the amounts of 
certain VA benefits by the same percentage and effective on the 
same date as adjustments made to title II Social Security 
benefits pursuant to section 415(i) of title 42. Proposed new 
subsection (d)(2) of section 5312 would specify the VA benefits 
that would be covered by any annual COLA increase. The benefits 
covered would be:

    1. Basic compensation rates for veterans with service-
connected disabilities and the rates payable for certain severe 
disabilities (section 1114 of title 38);
    2. The allowance for spouses, children, and dependent 
parents paid to service-connected disabled veterans rated 30 
percent or more disabled (section 1115(1));
    3. The annual clothing allowance paid to veterans whose 
compensable disabilities require the use of prosthetic or 
orthopedic appliances that tend to tear or wear out clothing or 
veterans whose service-connected skin conditions require the 
use of prescribed medication that causes irreparable damage to 
outergarments (section 1162); and
    4. Dependency and indemnity compensation paid to:

          (a) surviving spouses of veterans whose deaths were 
        service-connected (section 1311);
          (b) surviving spouses for dependent children below 
        the age of 18 (sections 1313(a) and 1314);
          (c) surviving spouses who are so disabled that they 
        need aid and attendance or are permanently housebound 
        (section 1311(i) and 1311(d));
          (d) surviving spouses covered under section 1318 of 
        title 38; and
          (e) the children of veterans whose deaths were 
        service-connected if no surviving spouse is entitled to 
        DIC, the child is age 18 through 22 and attending an 
        approved educational institution, or the child is age 
        18 or over and became permanently incapable of self-
        support prior to reaching age 18 (section 1313).

    Proposed new subsection (d)(3) of section 5312 would 
require VA to publish any increases under this new authority in 
the Federal Register.
    The effective date of section 21 of the Committee bill 
would be the first day of the first calendar year that begins 
after the date of enactment.

Sec. 22. Action plan to improve correlation between employee pay and 
        performance.

    Section 22 of the Committee bill, which was accepted as an 
amendment during Markup of the Committee bill, would require VA 
to develop an action plan for improving the correlation between 
the pay, advancement, and rewards of VA employees and their job 
performance.
    Background. In July 2010, the United States Office of 
Personnel Management (hereinafter, ``OPM'') released the 
results from the 2010 Federal Employee Viewpoint Survey. The 
results suggest that VA employees do not believe there is a 
strong correlation between job performance and pay, awards, and 
promotions. For example, of the VA employees who responded to 
the survey, 38.8 percent disagreed or strongly disagreed with 
the notion that ``[a]wards in my work unit depend on how well 
employees perform their jobs;'' 39.0 percent disagreed or 
strongly disagreed with the notion that, ``[i]n my work unit, 
differences in performance are recognized in a meaningful 
way;'' 45.4 percent disagreed or strongly disagreed with the 
notion that ``[p]romotions in my work unit are based on 
merit;'' and 52.6 percent disagreed or strongly disagreed with 
the notion that ``[p]ay raises depend on how well employees 
perform their jobs.''
    In that report, OPM provided this guidance to agencies: 
``Collecting and analyzing survey results is just the first 
step in moving agencies towards greater effectiveness. Taking 
action on the results is the most important step in the 
process.'' To that end, OPM recommended that agencies develop 
an action plan, which ``will state the objectives, action to be 
taken, outcome measures, accountable personnel and improvement 
targets, and will describe how progress will be tracked.'' 
Following that advice, leaders at OPM announced that, in 
response to the survey responses provided by OPM employees, 
they would develop a ```corporate action plan' to address 
employees' biggest concerns.''
    Committee Bill. Section 22 of the Committee bill, in a 
freestanding provision, would require VA, within 90 days after 
the date of enactment, to submit to Congress an action plan for 
improving the correlation between the pay, advancement, and 
rewards of VA employees and their job performance. The action 
plan would be required to have a particular focus on employees 
who perform work in relation to processing and adjudicating 
claims for disability compensation and dependency and indemnity 
compensation. In addition, the action plan must include 
specific objectives, planned actions, metrics for measuring 
improvements, and methods for tracking progress. It must also 
include any legislative changes that VA considers necessary in 
order for VA to improve the correlation between pay, 
advancement, and rewards and job performance.

                      Committee Bill Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the CBO, estimates that enactment of 
the Committee bill would, relative to current law, increase 
direct spending by $393 million over the 2011-2015 period and 
$2.1 billion over the 2011-2020 period. S. 3517 would add $5 
million in discretionary spending over the 2011-2015 period, 
subject to appropriation of the necessary amounts. Enactment of 
the Committee bill would not affect the budget of state, local 
or tribal governments.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                 Washington, DC, November 19, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3517, the Claims 
Processing Improvement Act of 2010.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure.

S. 3517--Claims Processing Improvement Act of 2010

    Summary: S. 3517 would modify the procedures used by the 
Department of Veterans Affairs (VA) to process and adjudicate 
compensation and pension claims. S. 3517 also would make 
changes to the compensation and pension programs and institute 
a pilot program for local and tribal governments. CBO estimates 
that enacting S. 3517 would increase direct spending by $393 
million over the 2011-2015 period and about $2.1 billion over 
the 2011-2020 period. CBO also estimates that implementing 
S. 3517 would add $5 million in discretionary spending over the 
2011-2015 period, subject to appropriation of the necessary 
amounts. Enacting the bill would not affect revenues.
    Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending.
    S. 3517 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 3517 is shown in the following table. 
The costs of this legislation fall within budget function 700 
(veterans benefits and services).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2011   2012   2013   2014   2015   2016   2017   2018   2019   2020  2011-2015  2011-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Private Medical Opinions
    Estimated Budget Authority..............................      5     21     53    102    158    217    278    340    405    472       339      2,051
    Estimated Outlays.......................................      5     21     53    102    158    217    278    340    405    472       339      2,051
Intermediate Disability Rating
    Estimated Budget Authority..............................     15     16     21      1      1      2      2      2      2      2        54         64
    Estimated Outlays.......................................     15     16     21      1      1      2      2      2      2      2        54         64
                                                             -------------------------------------------------------------------------------------------
    Total Changes
        Estimated Budget Authority..........................     20     37     74    103    159    219    280    342    407    474       393      2,115
        Estimated Outlays...................................     20     37     74    103    159    219    280    342    407    474       393      2,115
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: In addition to the changes in direct spending shown above, S.3517 also would increase discretionary spending by $5 million over the 2011-2015
  period for a disability compensation pilot program and various administrative provisions, subject to appropriation of the necessary amounts.

    Basis of estimate: For the purposes of this estimate, CBO 
assumes S. 3517 will be enacted by the end of calendar year 
2010.

Direct Spending

    S. 3517 would make several changes to the VA disability 
compensation and pensions programs. CBO estimates that enacting 
S. 3517 would increase direct spending by $2.1 billion over the 
2011-2020 period.
    Private Medical Opinions. Section 5 would allow medical 
opinions from private practitioners to be used to support 
claims for VA disability ratings. VA would be required to give 
such medical opinions the same deference as opinions provided 
by VA physicians. Under current law, a medical examination 
conducted by a physician is the main factor in assigning a 
disability rating, though other evidence can be used to support 
a claim. CBO estimates that enacting section 5 would increase 
direct spending by $2.1 billion over the 2011-2020 period.
    CBO expects that mental disorders and other disabilities 
where the diagnosis is in part subjective would comprise the 
majority of the cases where private medical opinions would be 
sought by veterans, and that 25 percent of veterans with such 
disabilities would provide credible private opinions. Based on 
a review of historical data on disability ratings, CBO 
estimates that veterans providing a private medical opinion 
would see a 10 percentage- point increase in their disability 
rating--moving from an average disability rating of 40 percent 
to 50 percent--over what they would have otherwise received. 
That change would increase a veteran's monthly benefit by $250 
in 2011. CBO does not expect the number of veterans receiving 
disability compensation to be significantly affected by this 
provision.
    New Cases. In 2009, VA added 212,000 veterans to the 
disability compensation rolls. CBO estimates that there will be 
about 215,000 new accessions in 2011, growing to about 243,000 
in 2020. Based on information from VA, mental and other 
disorders (such as back injuries) where a subjective diagnosis 
exists account for about 10 percent of the disabilities for 
which a rating for compensation is provided. Assuming a gradual 
phase-in of the use of private opinions, CBO estimates that in 
2011 about 1,000 new veterans would receive higher disability 
ratings, and that this number would increase to about 6,100 in 
2020. After accounting for mortality and inflation, CBO 
estimates that section 5 would increase direct spending for new 
accessions by $110 million over the 2011-2015 period and $640 
million over the 2011-2020 period.
    Veterans Currently On the Rolls. Under section 5, veterans 
who are currently receiving veterans' disability compensation 
also would be eligible for an increase in their disability 
ratings. About 3.2 million veterans currently receive veterans' 
disability compensation and about 15 percent return each year 
to be re-rated. After accounting for the factors described 
above, CBO estimates that the population of veterans on the 
rolls who would receive an increased rating would be about 
2,400 in 2011, increasing to about 13,200 in 2020. Therefore, 
CBO estimates that section 5 would increase direct spending for 
veterans currently on the rolls by about $1.4 billion over the 
2011-2020 period.
    Intermediate Disability Rating. Section 2 would require VA 
to assign a temporary disability rating to any veteran who 
submits a claim for multiple disabilities that includes at 
least one disability that can be rated immediately. VA 
currently has the authority to assign such partial ratings but 
because of the large backlog of claims it has used this 
authority sparingly. Most veterans with multiple disabilities 
have to wait until their claim is fully adjudicated--often a 
year or more--before receiving disability compensation. When 
such veterans begin receiving monthly compensation payments, 
they also receive a retroactive payment that covers the months 
back to the date of their application.
    Under section 2, CBO expects that such veterans would begin 
receiving partial disability compensation payments in the year 
in which they file a claim. That would increase costs in that 
first year (because of the earlier payments) and decrease costs 
in a subsequent year (because of reduced retroactive payments). 
CBO expects that costs would increase substantially for the 
first three years, as VA gradually phased in the process of 
assigning intermediate ratings more widely over that period. 
Once that process was fully phased in, CBO expects those 
increased costs would be largely offset by the reduced 
retroactive payments.
    The population that would generate additional spending 
would be veterans filing claims for the first time. Based on 
information from VA, CBO estimates that about 50 percent of all 
new claims for a disability rating are seeking a rating based 
on multiple disabilities and that about 25 percent of those 
cases (12.5 percent of all new claims) have at least one 
disability that could be decided immediately. In 2007, VA 
assigned temporary ratings to 33 cases. Under section 2, CBO 
expects that VA would eventually assign intermediate ratings to 
half of the eligible population--about 6 percent of new cases 
each year.
    In 2009, there were about 212,000 new accessions to the 
disability compensation rolls. CBO estimates that there will be 
about 215,000 new accessions in 2011, growing to about 243,000 
in 2020. After accounting for a three-year phase-in and the 
number of veterans with a disability that could be rated 
immediately, CBO estimates that about 4,000 new veterans in 
2011 would receive an intermediate rating (and, therefore, a 
payment in 2011), increasing to about 15,000 in 2020. The 
average disability rating for new cases is 40 percent (about 
$600 per month--$7,200 annually--in 2010) and CBO assumes that 
these veterans would receive that rating. After accounting for 
mortality and inflation, CBO estimates that section 2 would 
increase direct spending by $64 million over the 2011-2020 
period.
    Increased Pension for Married Veterans Requiring Aid and 
Attendance (A&A). Section 20 would increase the annual pension 
payable to married veterans when both spouses require regular 
A&A. Under current law, when two married veterans are in need 
of regular A&A, they are eligible to receive an annual combined 
pension of $30,480. Section 20 would increase that combined 
annual payment amount to $31,305.
    There are currently about 75 married couples who are both 
receiving pensions and both in need of regular A&A. Based on 
information from VA, CBO estimates that the number of eligible 
couples will decline slightly over the next decade. Therefore, 
we estimate that enacting section 20 would increase direct 
spending by $500,000 over the 2011-2020 period.
    Automatic Cost-of-Living Adjustment (COLA). Section 21 
would automatically increase the amounts payable to veterans 
for disability compensation and to their survivors for 
dependency and indemnity compensation by the same COLA payable 
to Social Security recipients each year. Currently, this 
increase is authorized on an annual basis. The COLA that would 
be authorized by this bill is assumed in CBO's baseline, 
consistent with section 257 of the Balanced Budget and 
Emergency Deficit Control Act, and savings from rounding it 
down were achieved by the Balanced Budget Act of 1997 (Public 
Law 105-33) as extended by the Veterans Benefits Act of 2003 
(Public Law 108-183); therefore, enacting section 21 would have 
no budgetary effect relative to the baseline.

Spending Subject to Appropriation

    S. 3517 includes several provisions that would have a small 
impact on discretionary spending. CBO estimates that 
implementing those provisions would cost $5 million over the 
2011-2015 period, subject to appropriation of the necessary 
amounts.
    Pilot Program for Local and Tribal Governments. Section 19 
would require VA to conduct a pilot program to determine the 
feasibility of entering into memorandums of understanding 
(MOUs) with local and tribal organizations intended to help 
facilitate the claims application process. VA would be required 
to enter into such MOUs with at least two tribal organizations. 
Assuming that VA entered into two such agreements, CBO expects 
that implementing those agreements would require VA to hire a 
total of four additional employees to provide on-site 
assistance--two for each tribal organization. Based on 
information from VA, CBO estimates that implementing section 19 
would cost less than $500,000 per year and about $2 million 
over the 2011-2015 period, subject to the availability of 
appropriated funds.
    Other Provisions. Several sections of S. 3517 would make 
changes to the claims adjudication process at VA, both in terms 
of the filing of claims and VA's method for adjudication and 
the appeals process when a veteran disagrees with a VA 
decision. While most of those changes would have either an 
insignificant budget impact or no impact at all, CBO expects 
that implementing all of them would require VA to hire 
additional employees. Thus, CBO estimates that those provisions 
would cost about $3 million over the 2011-2015 period, subject 
to the availability of appropriated funds.
    Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. S. 3517 would increase direct spending by increasing 
the amount of disability compensation that certain veterans 
would be eligible to receive. The changes in outlays that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

          CBO Estimate of Pay-As-You-Go Effects for S.3517 as ordered reported by  the Senate Committee on Veterans' Affairs on August 5, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2011   2012   2013   2014   2015   2016   2017   2018   2019   2020  2011-2015  2011-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT

Statutory Pay-As-You-Go Impact..............................     20     37     74    103    159    219    280    342    407    474       393      2,115
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 3517 
contains no intergovernmental mandates as defined in UMRA and 
would impose no costs on state, local, or tribal governments.
    Estimate prepared by: Federal Costs: Dwayne M. Wright; 
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its August 5, 2010, meeting. Three 
amendments were offered to S. 3517. All three were accepted by 
the Chairman and the bill was ordered favorably reported.

                             Agency Report

    On July 14, 2010, Michael Walcoff, Acting Under Secretary 
for Benefits, Veterans Benefits Administration, Department of 
Veterans Affairs, appeared before the Committee and submitted 
testimony on S. 3517, among other issues. Excerpts from this 
statement are reprinted below:

  STATEMENT OF MICHAEL WALCOFF, ACTING UNDER SECRETARY FOR BENEFITS, 
 VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Chairman Akaka, Ranking Member Burr, and Members of the 
Committee:
    Thank you for the opportunity to appear before you today to 
discuss the Department of Veterans Affairs (VA) disability 
compensation and pension programs. Accompanying me today are 
Ms. Diana Rubens, Associate Deputy Under Secretary for Field 
Operations; Mr. Tom Pamperin, Associate Deputy Under Secretary 
for Policy and Program Management; Mr. Mark Bologna, Director 
for the Veterans Benefits Management System (VBMS) initiative; 
Dr. Peter Levin, Senior Advisor to the Secretary and Chief 
Technology Officer; and Mr. Richard Hipolit, Assistant General 
Counsel. My testimony will provide preliminary views on the 
Chairman's bill, the Claims Processing Improvement Act of 2010. 
I will also focus on the Secretary's goal to eliminate the 
claims backlog by 2015 so as to ensure timely and accurate 
delivery of benefits and services to our Veterans and their 
families.

           *       *       *       *       *       *       *

         S. 3517: THE CLAIMS PROCESSING IMPROVEMENT ACT OF 2010

    First, let me commend you Mr. Chairman and your staff for 
your efforts to put forward ideas on how to improve the 
disability claims processing system. I would like to 
acknowledge your work and we appreciate your staff keeping the 
Department informed as you developed the legislation.
    S. 3517, the ``Claims Processing Improvement Act of 2010,'' 
would establish a pilot program on evaluation and rating of 
service-connected musculoskeletal disabilities and would revise 
a number of statutes affecting VA's adjudication of claims and 
appeals. The Department is in the final stages of coordinating 
the Administration's full position and developing cost 
estimates on the legislation. However, I will provide you with 
a brief overview of VA's initial reactions to Title I of the 
bill and, with your permission, we will provide more detailed 
information on the entire bill in writing for the record.

           *       *       *       *       *       *       *

    Title II of this bill addresses several matters relating to 
the adjudication process for claims and appeals. We appreciate 
the inclusion of a number of provisions drawn from Secretary 
Shinseki's proposed legislation, known as the Veterans Benefit 
Programs Improvement Act of 2010, which he submitted to 
Congress for consideration on May 26, 2010. We look forward to 
the opportunity to provide our views on the legislation in the 
coming weeks.
                                ------                                

                                ------                                

                         The Secretary of Veterans Affairs,
                                    Washington, DC, August 2, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I write to provide the views and cost 
estimates of the Department of Veterans Affairs (VA) on 
S. 3517, the ``Claims Processing Improvement Act of 2010.'' 
Although this bill was included on the agenda for a July 14, 
2010, oversight hearing before the Senate Committee on 
Veterans' Affairs, VA was unable to provide full views in time 
for that hearing. This bill contains legislation of 
considerable significance to VA, and we appreciate your 
allowing us to submit this letter to supplement VA's testimony.
    First, let me commend you, Mr. Chairman, and your staff for 
your efforts to put forward ideas on how to improve the 
disability claims processing system. I would like to 
acknowledge your work, and we appreciate your staff keeping the 
Department informed as you developed the legislation.
    The ``Claims Processing Improvement Act of 2010'' would 
establish a pilot program on evaluation and rating of service-
connected musculoskeletal disabilities and would revise a 
number of statutes affecting VA's adjudication of claims and 
appeals. VA supports the goals of many of the sections in this 
bill that would enhance the processing of claims and appeals. 
However, VA also has significant concerns regarding a number of 
provisions in the bill as discussed below.

           *       *       *       *       *       *       *

                                Sec. 201

    Section 201 would provide for the expeditious partial 
adjudication of a disability compensation claim for multiple 
conditions, when one or more of the conditions could be 
assigned a disability rating without further development. VA 
supports the underlying goal of this section as a means to 
expedite payment of disability compensation to a Veteran, even 
though it may be less than the eventual total monthly payment. 
In fact, VA has implemented a policy to this effect in the 
Compensation and Pension Service Procedures Manual. Because 
this procedure is already part of VA's standard operating 
procedure, it is unnecessary to mandate this procedure by law. 
We anticipate that there would be no costs associated with the 
enactment of this section.

                                Sec. 202

    Section 202 would attempt to clarify that the Secretary is 
required to provide claimants notice of additional information 
and evidence necessary to substantiate a claim, only if 
additional information and evidence is required to support the 
claim. We support the purpose of clarifying that notice is not 
required when VA has sufficient information and evidence to 
decide the claim. However, the wording of this section is 
confusing and may not lead to the desired result stated in its 
title. We believe the purpose of this provision could be 
achieved by retaining the existing language in 38 U.S.C. 
Sec. 5103(a) and adding a sentence stating that VA is not 
required to provide notice if no additional information or 
evidence is required. VA has already interpreted the current 
statute as providing such a result in its proposed rulemaking 
to amend 38 CFR Sec. 3.159, which would not require VA to 
provide notice where the evidence is already sufficient to 
award all benefits sought. We anticipate that there would be no 
costs associated with the enactment of this section.

                                Sec. 203

    Section 203 would require that the same deference be given 
to private medical opinions as to VA medical opinions. The 
section would further require that, if VA requests a VA medical 
opinion in response to a private medical opinion, then the 
professional qualifications of the VA health care provider must 
be equal to or greater than those of the provider of the 
private medical opinion.
    VA does not support this section of the bill as it assumes 
that VA automatically gives more weight to opinions from VA 
clinicians as opposed to private clinicians, regardless of the 
content of the opinions at issue. This is simply not the case. 
VA adjudicators must weigh competing medical opinions, whether 
from a VA or private clinician, based on a variety of factors, 
including the discussion of relevant facts and pertinent 
medical history, the relative thoroughness of the opinions, and 
the clarity of analysis, among other things. The bill language 
could be construed to require VA by law to assign equal 
probative value to private medical opinions regardless of these 
factors. The assignment of probative value, however, is an 
essential part of the adjudicative function that involves the 
adjudicator looking at the reasoning provided by all 
clinicians, both VA and private, concerning a submitted medical 
opinion, and then judging the credibility and determining the 
weight to be assigned to the evidence. If this process were 
merely to become one of adding up the number of favorable 
versus the unfavorable medical opinions, there is a serious 
risk that harm would occur to both Veterans and VA.
    VA further objects to the provision of this section that 
would require that, when a VA health care provider is 
responding to a private medical opinion, the professional 
qualifications of the VA health care provider be equal to or 
greater than those of the private health care provider. In many 
circumstances it may not be evident what VA health care 
provider would have ``professional qualifications that are at 
least equal to the qualifications of the provider of the 
private medical opinion''--particularly in situations where a 
complex medical condition is at issue. Furthermore, it would be 
difficult for VA to assess the qualifications of those who 
provide private medical opinions because private clinicians 
often do not provide a curriculum vitae or other statement 
outlining their professional qualifications. In fact, many 
times the signature line, which may include a notation such as 
``M.D.,'' ``N.P.,'' or ``F.A.C.S.,'' would be the only 
indicator of their professional status.
    We anticipate that there would be no costs associated with 
the enactment of this section.

                                Sec. 204

    Section 204 would direct the Secretary to establish a 
process to identify whether claims could be quickly adjudicated 
or a whether a temporary disability rating could be assigned. 
As part of this process, VA would be required to assign 
employees who are experienced in the processing of claims to 
carry out a preliminary review of all initial disability 
compensation claims submitted to VA. Priority adjudication 
would be authorized for certain disability compensation claims, 
including claims of Veterans who are terminally ill, claims of 
homeless claimants, claims of claimants suffering severe 
financial hardship, and claims partially adjudicated under 
section 1157(b) as proposed by section 201 of this bill. This 
section would further provide VA the discretion to terminate 
development of a claim at the request of the claimant, but 
would still require VA to undertake any development necessary 
to obtain any Federal records, medical examinations, or 
opinions relevant to the claim. This section would also allow 
VA to decide these claims based on all the evidence of record.
    While VA supports the underlying purpose of section 204 to 
identify claims that may be subject to quick adjudication, VA 
does not believe that the structure of this process, including 
the allocation of human resources, should be mandated by law. 
VA regional offices are presently committed to processing 
claims in as timely and consistent a manner as possible. 
Flexibility in operations at a local level is necessary to 
accomplish this goal. Mandating that experienced claims 
processing personnel be employed in these positions may deprive 
VA regional offices of needed flexibility in utilizing 
experienced claims processing personnel and adjusting their 
staffing in response to the natural ebb and flow of the claims 
adjudication process. Adding this extra layer of review may 
result in duplicative review of many claims and may 
unnecessarily delay the claims of Veterans whose claims are 
more complex or difficult to adjudicate. Further, we are 
concerned that the proposed language, if not expressly limited 
to claims processing by VA regional offices, could be construed 
to potentially interfere with the current obligation of the 
Board of Veterans' Appeals (Board) under 38 U.S.C. Sec. 7107 to 
decide cases in docket order.
    VA supports the provision that would allow VA to treat a 
claim as fully developed upon notification that the claimant 
has no further information or evidence to submit, subject to 
VA's completion of any necessary development. VA does not 
anticipate any costs associated with this section.

                                Sec. 205

    Section 205 would require the Secretary, upon denying a 
benefit, to provide the claimant a notice of decision that 
includes: a statement of reasons for the decision, a summary of 
the evidence relied upon in making the decision, and an 
explanation of the procedure for obtaining appellate review. 
Along with the notice of decision, the Secretary would be 
required to provide the claimant a notice of disagreement (NOD) 
form that, if completed and returned, would initiate appellate 
review process. The content of the notice to be provided under 
the proposal would be the same as that provided under current 
law. A NOD form is not currently provided. VA has no objection 
to this section, although we consider providing the NOD form 
unnecessary in light of the explicit notice of appellate rights 
already provided with VA claim decisions. We anticipate no 
costs associated with section 205, beyond the cost of printing 
the proposed NOD form.

                                Sec. 206

    Section 206 would reduce the time period in which a 
claimant could submit a NOD to initiate appellate review from 
one year to 180 days from the issuance of the VA decision. This 
section would also create a good cause exception that would 
require VA to treat an untimely NOD as timely, if VA determines 
that the claimant, legal guardian, or accredited 
representative, attorney, or authorized agent filing the notice 
has demonstrated ``good cause'' for the failure to timely file 
and if the NOD is filed within 186 days after the initial 180-
day appeal period. This section would further authorize VA to 
accept NODs by electronic means as well as through traditional 
mail.
    VA supports the portion of this section that would reduce 
the time involved in processing appeals and provide a good 
cause exception for certain untimely filings. VA believes that 
the 180-day time frame is a sufficient period for a claimant or 
representative to evaluate a VA decision and respond with a NOD 
if the claimant decides to initiate an appeal. VA would, 
however, recommend restructuring the ``good cause'' exception 
as an extension request similar to that found in section 207 
for the filing of a substantive appeal. Section 207 would allow 
for an extension of the time to file a substantive appeal 
provided that good cause is shown and the request is filed 
within the initial 60-day period to file a substantive appeal. 
As currently drafted, section 206 does not require that an 
extension request be filed within the initial 180-day NOD 
filing period. Requiring that extension requests be filed 
within the initial 180-day filing period would allow the agency 
of original jurisdiction (AOJ) to close an appeal 180 days 
after a decision is issued, provided that an NOD or extension 
request was not submitted. Without a requirement that extension 
requests be filed within the initial 180-day filing period, the 
AOJ would not be able to close an appeal until 366 days after 
the initial AOJ decision was issued (180 days for the initial 
NOD filing period and an additional 186 days for the extension 
period). Therefore, to avoid further delay, we recommend that 
the bill be revised to require that requests for extension of 
the period to file an NOD be filed within the initial 180-day 
filing period. We would also recommend limiting the extension 
period to 180-days or less versus the current 186-day period.
    VA does not support the provision in section 206 stating 
that certain broadly described circumstances ``shall'' be 
considered as relating to good cause. While VA has no objection 
to the inclusion of a list of examples, VA believes that the 
fact-specific determination as to what is considered ``good 
cause'' should be left to the adjudicator and decided on a 
case-by-case basis, not mandated by law. As written, this 
provision seemingly would require VA to treat any linguistic 
barrier or change in financial circumstances as good cause, 
without regard to the degree of the barrier or change and 
without regard to any mitigating factors.
    Further, VA does not support the portion of section 206 
that would extend the ``good cause exception'' to a Veteran's 
accredited representative, attorney, or agent. Such 
representatives are duty bound to provide competent 
representation and to act with reasonable diligence and 
promptness in representing claimants, which includes being 
accountable for observing the various filing deadlines. Failing 
in these duties may indicate misconduct or lack of competence 
on the part of the representative, attorney, or agent. VA does 
not anticipate any costs associated with this section.

                                Sec. 207

    Section 207 would require a substantive appeal to be filed 
within 60 days from the date of the mailing of a ``post-notice 
of disagreement decision.'' This time period could be extended 
an additional 60 days for good cause shown. The substantive 
appeal must identify the alleged specific errors of fact or law 
made by the AOJ. If the claimant does not file a substantive 
appeal in accordance with this section, the AOJ would be 
required to dismiss the appeal and notify the claimant. The 
dismissal notice would have to explain that the Board may 
review the dismissal, and such a request for review must be 
made within 60 days.
    VA supports the 60-day time period for filing a substantive 
appeal as is provided under the current law. However, similar 
to section 206, section 207 includes a list of broad 
circumstances that ``shall'' be considered ``good cause.'' As 
written, this could be construed as placing a mandatory 
requirement on VA to always consider certain situations to be 
good cause. While VA has no objection to the inclusion of a 
list of examples, VA believes that the fact-specific 
determination as to what is considered ``good cause'' should be 
left to the adjudicator. VA is in the process of developing 
costs for this section.

                                Sec. 208

    Section 208 would replace the Secretary's obligation to 
provide a statement of the case with an obligation to provide a 
``post-notice of disagreement decision'' and would clarify that 
VA's action is a decision on the claim. This decision would be 
written in plain language and contain a description of the 
specific facts in the case which support the decision 
including, if applicable, an assessment as to the credibility 
of any lay evidence pertinent to the issues with which 
disagreement has been expressed; a citation to pertinent laws 
and regulations that support the decision; the decision on each 
issue and a summary of the reasons why the evidence relied upon 
supports such decision under the laws and regulations applied; 
and the date by which a substantive appeal must be filed in 
order to obtain further review of the decision. The post-notice 
of disagreement decision is different from the statement of the 
case in that it has the additional requirements that the 
decision include a discussion of the specific facts supporting 
the decision and an assessment as to the credibility of any lay 
evidence pertinent to the issue, that the decision be written 
in plain language, and that the decision contain the deadline 
to file a substantive appeal.
    While VA generally has no objection to renaming the 
statement of the case, VA believes that the requirement that 
these post-notice of disagreement decisions be written in 
``plain language'' is very subjective and could result in an 
increase in appeals that would further delay the adjudication 
of claims. We anticipate no costs associated with this section.

                                Sec. 209

    Section 209 would provide that a claimant automatically 
waives the review by the AOJ of new evidence submitted after 
the substantive appeal is filed, so that such evidence would be 
subject to initial review by the Board unless the claimant, or 
the claimant's representative, submits a written request, with 
the evidence or within 30 days of submitting the evidence, that 
the AOJ review such evidence.
    VA generally supports this section because it would allow 
AOJs to spend less time responding, through supplemental 
statements of the case, to appellants who submit additional 
evidence following the filing of a substantive appeal and would 
allow the Board to avoid time-consuming remands when the 
appellant submits evidence directly to the Board. We believe 
that this would reduce the time spent processing appeals and 
thereby provide final decisions to Veterans more quickly.
    VA's only concern with this section is the provision that 
permits a request for AOJ review to be ``made within 30 days of 
the submittal'' of evidence. Providing a 30-day period to 
submit a request for AOJ review would require the AOJ in many 
cases to hold the case for at least 30 additional days 
following the receipt of evidence to determine whether a 
request for AOJ review is going to be filed before forwarding 
the case to the Board. Moreover, if an appellant submits 
evidence in piecemeal fashion after filing a substantive 
appeal, the AOJ would be forced to hold the case pending the 
expiration of multiple 30-day periods. Requiring that the 
request for AOJ review be filed contemporaneously with the 
evidence would enhance efficiency and reduce delay in the 
appellate process. We anticipate that there would be no 
mandatory or discretionary costs associated with this section.

                                Sec. 210

    Section 210 would allow the Board to determine the most 
expeditious location for and type of hearing (i.e., an in-
person hearing or a video conference hearing) to afford an 
appellant, unless the appellant demonstrates good cause or 
special circumstances to warrant another location or type of 
hearing. VA supports enactment of section 210 as it would 
improve efficiency and speed claim adjudications. We anticipate 
that this section would result in no mandatory or discretionary 
costs or savings.

                                Sec. 211

    Section 211 of the draft bill would require that the Court 
of Appeals for Veterans Claims (Veterans Court) decide every 
issue raised on appeal before remanding an issue for 
readjudication. VA takes no position on this provision as it 
directly pertains to the operation of the Veterans Court. We do 
not anticipate that there would be any costs associated with 
this section.

                                Sec. 212

    Section 212 would authorize the Veterans Court to extend 
the 120-day time period for filing a notice of appeal for an 
additional period not to exceed 120 days upon a written request 
by the appellant filed not later than 120 days after expiration 
of the initial appeal period and a showing of good cause. VA 
supports this section of the proposed bill and anticipates that 
there would be no costs associated with this section.

                                Sec. 213

    Section 213 would require the Secretary of Veterans Affairs 
to carry out a pilot program to assess the feasibility and 
advisability of entering into memorandums of understanding with 
local governments and tribal organizations to improve the 
quality of compensation claims submitted under chapter 11of 
title 38, United States Code, and to provide assistance to 
Veterans who may be eligible for such compensation in 
submitting such claims. VA is unable to provide views on the 
proposed pilot program or estimate the costs associated with 
enactment of section 213 as the purpose and intent of this 
section is unclear.

    Thank you for the opportunity to provide the Department's 
views on this legislation, and again I commend you and your 
staff for your efforts to put forward proposals to improve the 
disability claims processing system.
    I look forward to continuing to work together with you on 
our shared goal of a disability claims processing system that 
provides accurate and timely decisions to our Nation's 
Veterans. Thank you for your ongoing support of our mission.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                          Eric K. Shinseki.
                                ------                                

                         The Secretary of Veterans Affairs,
                                     Washington, DC, July 30, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on 
twelve of the thirteen bills listed in your May 21, 2010, 
letter. In addition, we are providing cost estimates for three 
bills about which we testified at the Committee's May 19, 2010, 
hearing but for which we were unable to develop cost estimates 
in time for that hearing. We will provide views and costs on 
S. 3486 to the Committee in a separate letter.

           *       *       *       *       *       *       *

                                S. 3348

    S. 3348 would require that certain misfiled documents be 
treated as motions for reconsideration of decisions of the 
Board of Veterans' Appeals (Board). A document so treated would 
be a document that expresses disagreement with a Board 
decision, is filed with the Board or the VA agency of original 
jurisdiction within 120 days after the Board issues the 
decision, and is filed by a person who is adversely affected by 
the Board decision but has not timely filed a notice of appeal 
with the United States Court of Appeals for Veterans Claims 
(Veterans Court). Such a document would not be treated as a 
motion for reconsideration if the Board or the agency of 
original jurisdiction determines that the document expresses an 
intent to appeal the Board decision to the Veterans Court and 
forwards the document to the Veterans Court, and the court 
receives the document within 120 days after the Board issued 
the decision.
    VA objects to the bill for two reasons. First, it would 
require the Board to decide motions for reconsideration of 
decisions without any meaningful basis for such 
reconsideration. This is because the bill would allow 
reconsideration of previously final decisions based on nothing 
more than a mere expression of disagreement, rather than based 
on the current reconsideration standard of obvious error of 
fact or law. Second, by requiring VA to make an initial 
determination as to whether a notice of appeal was filed in a 
case, the bill would place VA in the unprecedented position of 
determining whether a particular case falls within the 
jurisdiction of the Veterans Court, a superior tribunal. The 
additional activity that S. 3348 would require could 
potentially burden an already overburdened adjudication system 
and introduce uncertainty as to the finality of Board 
decisions.
    We believe that legislation recently proposed by VA that 
would authorize the Veterans Court to extend the 120-day period 
for appealing a Board decision on a showing of good cause 
presents a better solution for appellants who are unable to 
correctly file a notice of appeal of a Board decision. Under 
VA's proposal, the Veterans Court would determine whether the 
facts and circumstances of a particular case justify an 
extension of the statutory time period for filing an appeal, 
and the Board would not have to decide a case a second time 
with no clearly discernible benefit flowing to the Veteran.
    Concerning costs, the Board processes between 800 and 900 
motions for reconsideration each year at a cost of 
approximately $587,000. The Board cannot predict the number of 
motions for reconsideration it would have to decide each year 
under the bill because the proposed standard involves too many 
variables. However, because S. 3348 would potentially treat all 
expressions of disagreement filed within the 120-day period for 
appealing a Board decision as motions for reconsideration, it 
is reasonable to conclude that the number of such motions 
decided would increase significantly along with VA's costs in 
issuing such decisions.

           *       *       *       *       *       *       *

                                S. 3367

    S. 3367 would increase from $8,911 to $31,305 the maximum 
annual rate of pension for two disabled Veterans married to one 
another when both are in need of regular aid and attendance 
currently prescribed by section 1521(f)(2) of title 38, United 
States Code. This bill would have the effect of amending the 
law governing improved pension to prospectively establish a 
pension rate for two Veterans married to one another, both of 
whom are in need of aid and attendance, at the rate that would 
have been payable had 38 U.S.C. Sec. 1521(f)(2) been amended in 
1998 to provide a $600 increase for each Veteran, rather than a 
single $600 increase for the two Veterans, and the increased 
rate had subsequently been adjusted by annual cost of living 
adjustments. VA supports this bill as an equitable approach to 
meeting the needs of severely disabled Veterans, subject to 
Congress identifying offsets for the additional costs 
identified below. However, VA has a technical concern with this 
bill. It would update in accordance with current pension rates 
only one of the rates specified in section 1521(f)(2). The 
multitude of other pension rates prescribed by section 1521 
would continue to be those that were in effect years ago. To 
avoid confusion, should Congress decide to amend one of the 
rates prescribed by section 1521(f)(2), it should also update 
all the other rates prescribed in section 1521 to account for 
past cost-of-living adjustments.
    Because there are only 74 pension awards for two Veterans 
married to one another and both in need of regular aid and 
attendance, VA estimates the cost of this bill, if enacted, 
would be $733,000 in the first year, $3.7 million over 5 years, 
and $8 million over 10 years. VA has determined that there 
would be no additional administrative or full-time employee 
costs associated with this bill.

                                S. 3368

    S. 3368 would authorize certain individuals and 
organizations to sign an application for VA benefits on behalf 
of claimants under 18 years of age, mentally incompetent, or 
physically unable to sign the application form.
    VA does not support this bill because it is unnecessary and 
would place Veterans, their family members, and VA at a higher 
risk for abuse and fraud. First, VA regulations currently 
provide a process for initiating a claim without a traditional 
signature. Section 3.2130 of title 38, Code of Federal 
Regulations, requires VA to accept a signature by mark or 
thumbprint if appropriately witnessed or certified by a notary 
public or certain VA employees. This alternate process enables 
claims to be filed by persons unable to sign an application. 
Second, a claimant unable to sign an application for benefits 
due to mental deficiency will likely be found incompetent to 
handle his or her own VA benefit payments, which requires VA to 
appoint a fiduciary, who would be qualified to sign application 
forms for the claimant. Allowing persons not appointed as VA 
fiduciaries to file claims for incompetent claimants would 
increase the risk that VA benefits would be diverted from 
claimants. For these reasons, we do not support S. 3368.
    VA estimates that there would be no benefit costs or 
administrative costs associated with this bill.

                                S. 3370

    S. 3370 would amend 38 U.S.C. Sec. 5105(a), which directs 
the Secretary of Veterans Affairs and the Commissioner of 
Social Security to jointly prescribe forms for use by survivors 
of members and former members of the uniformed services to 
apply for benefits under both chapter 13 of title 38, United 
States Code, and title II of the Social Security Act. Under 
section 5105(b), when an application on such a form is filed 
with either VA or the Social Security Administration (SSA), it 
is deemed to be an application for benefits under both chapter 
13 of title 38 and title II of the Social Security Act. 
Accordingly, applicants for survivor benefits need file only 
one of the prescribed forms with either agency to apply for 
such benefits at both agencies.
    The bill would authorize but no longer require VA and SSA 
to jointly prescribe forms to apply for survivor benefits and, 
more significantly, require VA and SSA to interpret an 
application made on any form indicating an intent to apply for 
survivor benefits filed with either agency as an application 
for benefits under both chapter 13 of title 38, United States 
Code, and title II of the Social Security Act. Requiring VA and 
SSA to accept as an application for survivor benefits any 
application that indicates an intent to file for such benefits 
without regard to the application form would be inconsistent 
with the concept embodied in 38 U.S.C. Sec. 5101(a) that a 
claim for veterans benefits must be made by filing a claim ``in 
the form prescribed by the Secretary.'' This requirement serves 
the beneficial purpose of ensuring that a claim contains 
sufficient information as specified in the claim form to permit 
VA to efficiently adjudicate the claim. Permitting the filing 
of ``any form'' to constitute a claim for survivor benefits 
would condone use of a multitude of forms (for example, a VA 
Form 21-4138, Statement in Support of Claim), that might 
provide only minimal information and require inefficient follow 
up inquiries from VA. Such a procedure would be inconsistent 
with VA's efforts to improve the efficiency of claim 
adjudications. For this reason, VA does not support S. 3370.
    We estimate that there would be no cost associated with 
S. 3370.

           *       *       *       *       *       *       *

    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                          Eric K. Shinseki.
                                ------                                

                         The Secretary of Veterans Affairs,
                                   Washington, DC, October 1, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on 
five of the amendments agreed to at the Committee's August 5, 
2010, markup.

   automatic annual increase in rates of disability compensation and 
                 dependency and indemnity compensation.

    This amendment would provide for an automatic cost-of-
living increase in the rates of disability compensation for 
Veterans with service-connected disabilities, and of dependency 
and indemnity compensation (DIC) for the survivors of Veterans 
whose deaths are service related, whenever there is such an 
increase in Social Security benefits, and by the same 
percentage as the percentage by which Social Security benefits 
are increased. VA benefits would increase on the date Social 
Security benefits are increased. VA supports enactment of this 
amendment.
    Since 1992, Congress has enacted annual increases in these 
benefits in the same percentages as Social Security benefit 
increases. Making the cost-of-living adjustments (COLAs) 
automatic would simplify the annual rate adjustments for 
compensation and DIC in the same manner that the process for 
pension was simplified by indexing pension increases to Social 
Security COLAs. VA believes the annual increases are necessary 
and appropriate to provide continuous protection of the 
affected benefits from the effects of inflation. The 
beneficiaries deserve no less.
    Because future COLA estimates are already included in the 
baseline President's budget, this legislation would not result 
in additional costs.

   authority for retroactive effective date for awards of disability 
 compensation in connection with applications that are fully-developed 
                             at submittal.

    This amendment would amend 38 United States Code (U.S.C.) 
Sec. 5110(b) to provide an effective date for an award of 
disability compensation to a Veteran who submits an application 
that sets forth a claim that is ``fully-developed'' as of the 
date of submittal of the application. The effective date of 
such an award would be fixed in accordance with the facts 
found, but could not be earlier than the date one year earlier 
than the date VA received the application. VA does not support 
enactment of this amendment.
    The availability of a retroactive effective date for an 
award of disability compensation granted on a claim fully 
developed when submitted would create an incentive for Veterans 
to file fully developed claims. Submission of more fully 
developed claims would free up resources at VA regional offices 
to address the claim backlog. However, VA does not support this 
amendment because it would penalize Veterans who, through no 
fault of their own, are not able to submit all the evidence 
necessary to decide the claim with the initial application. 
This would lead to the inequitable result of Veterans with 
similar disability claims receiving different compensation 
amounts based on the extent of medical treatment they may have 
received in the year prior to submission of their claims and 
the types of information readily available to them. Further, it 
would provide Veterans whose claims involve relatively simple 
fact issues with a greater benefit than Veterans whose claims 
are factually complex but no less meritorious.
    We note that certain claimants already receive retroactive 
benefits. Under 38 U.S.C. Sec. 5110(b)(1), if a Veteran files a 
claim for disability compensation within one year of discharge 
from military service, the effective date of an award will be 
the day following the date of the Veteran's discharge. Under 38 
U.S.C. Sec. 5110(b)(2), if a Veteran files a claim for 
increased compensation within one year of the date the 
disability increased, the effective date of an award may be 
retroactive to the date of such increase. Entitlement to those 
retroactive payments is based on the prompt filing of a claim, 
which is generally within the claimant's control. Because 
retroactive payments under this amendment may rest upon matters 
beyond a claimant's control, it would create an inequity not 
found in existing law. The creation of another category of 
claimants, specifically those who submit a fully developed 
claim, who are eligible for retroactive benefits also would add 
more complexity to the adjudication process and significantly 
increase benefit entitlement costs.
    We cannot estimate costs without knowing how many fully-
developed claims would be submitted and the disability ratings 
awarded to these Veterans.

   processing of applications for relief from adjudication of mental 
                   incompetence for certain purposes.

    Under current law, VA has one year to process applications 
for relief from restrictions on buying firearms imposed because 
a person has been adjudicated as a mental defective or 
committed to a mental institution. If VA fails to resolve a 
claim for relief within 365 days, the claim is deemed denied 
for purposes of judicial review of agency action. This 
amendment would create a statutory provision specific to VA 
that would require that such applications for relief be 
processed not later than 180 days after receipt, and if VA 
fails to ``resolve such application'' within 180 days, for any 
reason, the application for relief would be deemed granted.
    VA agrees that relief applications should be processed in a 
timely manner. However, VA has great difficulty in adjudicating 
cases of this type, which involve issues of public safety that 
fall outside VA's mission. VA is concerned that this provision 
could raise serious issues of public safety and potential 
liability if a person whose restrictions are relieved on this 
basis obtains firearms and causes death or injury. The 
Committee should also consider the Department of Justice's 
views regarding the legal and policy implications of this 
provision.

  requirement that bid savings on major medical facility projects of 
department of veterans affairs be used for other major medical facility 
                construction projects of the department.

    This amendment would modify 38 U.S.C. Sec. 8104(d) to state 
that, ``[i]n any fiscal year, unobligated amounts in the 
Construction, Major Projects account that are a direct result 
of bid savings from a major medical facility project may only 
be obligated for other major medical facility projects 
authorized for that fiscal year or a previous fiscal year.'' VA 
does not support enactment of this amendment.
    VA is concerned that this amendment would limit a 
Secretary's flexibility to apply construction dollars where he 
or she deems them most needed. Specifically, the amendment 
would restrict VA's ability to respond to emergent situations 
as they arise. VA currently is allowed to use major 
construction bid savings for any VA major construction project, 
consistent with authorization and programming limitations 
contained in chapter 81 of title 38, U.S.C. The amendment would 
also add new fiscal year restrictions because bid savings could 
only be used for projects authorized in the current fiscal year 
or in a prior fiscal year. This would hamper the Secretary's 
ability to use unobligated balances that are authorized in 
future fiscal years to respond to new project needs in as 
timely a manner as possible to optimize the infrastructure 
serving our Nation's Veterans.
    Congress already maintains close oversight and control over 
major construction projects. VA projects may not move forward 
without budgetary review and congressional authorization, and 
the Department now consults with Congressional committees 
regarding any substantial movement of funds. This amendment 
would severely impede VA's ability to maintain flexibility in 
major construction projects.

              action plan to improve correlation between 
                     employee pay and performance.

    This amendment would require VA, in consultation with the 
Director of the Office of Personnel Management, to submit to 
Congress an action plan for improving the correlation between 
pay, advancement, and rewards of VA employees with their job 
performance. This amendment is specifically focused on VA 
employees who process and adjudicate claims for compensation 
under chapters 11 and 13 of title 38, U.S.C. (i.e., employees 
who work within VA at the Veterans Benefits Administration 
(VBA)), but would apply to all VA employees. While VA 
appreciates the intent of this amendment, VA does not support 
enactment.
    VBA already has in place elaborate metrics for tracking the 
adjudication of cases on which employee performance evaluations 
are based. The performance management system that is already in 
place for VBA, and for that matter, VA, provides the necessary 
correlation between job performance and employee pay, 
advancement and compensation as required by chapter 43 of title 
5, U.S.C. This performance management system includes 
performance standards that are aligned with VBA and VA's 
corporate performance objectives and goals, and VA reviews and 
updates this system, as needed. Additionally, chapter 45 of 
title 5, U.S.C., provides VA authority to give awards to 
employees--another mechanism to connect pay and performance. 
Also, for General Schedule employees, VA can provide Quality 
Step Increases to employees with the highest performance 
rating.
    This system, in conjunction with the existing professional 
development opportunities that VA offers its employees, 
effectively and appropriately aligns our employees' 
professional contributions and accomplishments with their 
compensation levels and rewards. Further, VA's senior executive 
performance management system is certified by the Office of 
Personnel Management and the Office of Management and Budget. 
Certification requirements include alignment of performance 
standards with VA's strategic goals and objectives. While this 
amendment is expressly applicable to VBA employees, it would 
apply to all VA employees. This approach is overly broad if 
Congress' goal is to improve the efficiency of VA's claims 
processing.
    Given VBA already has a system in place for tracking the 
adjudication of cases on which employee performance evaluations 
are based, VA will be willing to work with Congress to provide 
a briefing regarding the system currently in existence, rather 
than create a new action plan as required by this legislation.
    While the anticipated cost of preparing the action plan 
described in this proposed legislation would likely be nominal, 
the commitment of personnel resources and time would be 
significant.

    Thank you for the opportunity to provide the Department's 
views on these amendments. I look forward to continuing to work 
together with you on our shared goals of improving benefits and 
services to our Nation's Veterans. Thank you for your ongoing 
support of our mission.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                          Eric K. Shinseki.
                                ------                                

                                ------                                

                                ------                                

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           *       *       *       *       *       *       *
                        Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the 
Committee bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

Title 38. Veterans' Benefits

           *       *       *       *       *       *       *

Part II. General Benefits

           *       *       *       *       *       *       *

Chapter 11. Compensation for Service-Connected Disability or Death

           *       *       *       *       *       *       *

Subchapter VI. General Compensation Provisions

           *       *       *       *       *       *       *

SEC. 1157. COMBINATION OF CERTAIN RATINGS

    (a) In General._The Secretary [The Secretary] shall provide 
for the combination of ratings and pay compensation at the 
rates prescribed in subchapter II of this chapter to those 
veterans who served during a period of war and during any other 
time, who have suffered disability in line of duty in each 
period of service.
    (b) Intermediate Assignment of Ratings.--(1) In the case of 
a veteran who submits to the Secretary a claim for compensation 
under this chapter for more than one condition and the 
Secretary determines that a disability rating can be assigned 
without further development for one or more conditions but not 
all conditions in the claim, the Secretary shall--
          (A) expeditiously assign a disability rating for the 
        condition or conditions that the Secretary determined 
        could be assigned without further development; and
          (B) continue development of the remaining conditions.
    (2) If the Secretary is able to assign a disability rating 
for a condition described in paragraph (1)(B) with respect to a 
claim, the Secretary shall assign such rating and combine such 
rating with the rating or ratings previously assigned under 
paragraph (1)(A) with respect to that claim.
    (3) If the Secretary determines, after assigning a rating 
for a condition under paragraph (1)(A), that further 
development of the condition could result in assignment of a 
higher rating, the Secretary shall continue development of such 
condition and reassess the rating.

           *       *       *       *       *       *       *

 Chapter 15. Pension for Non-Service-Connected Disability or Death or 
for Service

           *       *       *       *       *       *       *

Subchapter II. Veterans' Pensions

           *       *       *       *       *       *       *

            NON-SERVICE-CONNECTED DISABILITY PENSION

SEC. 1521. VETERANS OF A PERIOD OF WAR

           *       *       *       *       *       *       *

    (f)(1) * * *
          (2) If either such veteran is in need of regular aid 
        and attendance, the annual rate provided by paragraph 
        (1) of this subsection shall be $23,396. If both such 
        veterans are in need of regular aid and attendance, 
        such rate shall be [$30,480] $31,305.

           *       *       *       *       *       *       *

Part IV. General Administrative Provisions

           *       *       *       *       *       *       *

           Chapter 51. Claims, Effective Dates, and Payments

SEC.

                          SUBCHAPTER I. CLAIMS

5100. DEFINITION OF ``CLAIMANT''.

           *       *       *       *       *       *       *

5103A. DUTY TO ASSIST CLAIMANTS.

5103B. TREATMENT OF PRIVATE MEDICAL OPINIONS.

5103C. EXPEDITED REVIEW OF CLAIMS FOR DISABILITY COMPENSATION.

5103D. PROCEDURES FOR FULLY DEVELOPED CLAIMS.

           *       *       *       *       *       *       *

Subchapter I. Claims

           *       *       *       *       *       *       *

SEC. 5101. CLAIMS AND FORMS

    (a)(1) A specific [A specific] claim in the form prescribed 
by the Secretary (or jointly with the Commissioner of Social 
Security, as prescribed by section 5105 of this title must be 
filed in order for benefits to be paid or furnished to any 
individual under the laws administered by the Secretary.
    (2) If an individual has not attained the age of 18 years, 
is mentally incompetent, or is physically unable to sign a 
form, a form filed under paragraph (1) for the individual may 
be signed by a court appointed representative or a person who 
is responsible for the care of the individual, including a 
spouse or other relative. If the individual is in the care of 
an institution, the manager or principal officer of the 
institution may sign the form.
    (b) * * *
    (c)(1) Any person who applies for, signs a form on behalf 
of a person to apply for, or is in receipt of any compensation 
or pension benefit under laws administered by the Secretary 
shall, if requested by the Secretary, furnish the Secretary 
with the social security number of such person, or TIN in the 
case that the person is not an individual, and the social 
security number of any dependent or beneficiary on whose 
behalf, or based upon whom, such person applies for or is in 
receipt of such benefit. A person is not required to furnish 
the Secretary with a social security number for any person to 
whom a social security number has not been assigned.
    (2) The Secretary shall deny the application of or 
terminate the payment of compensation or pension to a person 
who fails to furnish the Secretary with a social security 
number or TIN required to be furnished pursuant to paragraph 
(1) of this subsection. The Secretary may thereafter reconsider 
the application or reinstate payment of compensation or 
pension, as the case may be, if such person furnishes the 
Secretary with such social security number or TIN.
    (3) * * *
    (d) In this section:
          (1) The term ``mentally incompetent'' with respect to 
        an individual means that the individual lacks the 
        mental capacity--
                  (A) to provide substantially accurate 
                information needed to complete a form; or
                  (B) to certify that the statements made on a 
                form are true and complete.
          (2) The term ``TIN'' has the meaning given the term 
        in section 7701(a)(41) of the Internal Revenue Code of 
        1986.

           *       *       *       *       *       *       *

SEC. 5103. NOTICE TO CLAIMANTS OF REQUIRED INFORMATION AND EVIDENCE

    (a) Required information and evidence.--
          (1) [Upon receipt of a complete or substantially 
        complete application, the Secretary shall notify the 
        claimant and the claimant's representative, if any, of 
        any information, and any medical or lay evidence, not 
        previously provided to the Secretary that is necessary 
        to substantiate the claim.] If the Secretary receives a 
        complete or substantially complete application that 
        does not include information or medical or lay evidence 
        not previously provided to the Secretary that is 
        necessary to substantiate the claim, the Secretary 
        shall, upon receipt of such application, notify the 
        claimant and the claimant's representative, if any, 
        that such information or evidence is necessary to 
        substantiate and grant the claim. As part of that 
        notice, the Secretary shall indicate which portion of 
        that information and evidence, if any, is to be 
        provided by the claimant and which portion, if any, the 
        Secretary, in accordance with section 5103A of this 
        title and any other applicable provisions of law, will 
        attempt to obtain on behalf of the claimant.
          (2) * * *
          (3) A notice provided under this subsection shall 
        inform a claimant, as the Secretary considers 
        appropriate with respect to the claimant's claim--
                  (A) of the rights of the claimant to 
                assistance under section 5103A of this title; 
                and
                  (B) if the claimant submits a private medical 
                opinion in support of a claim for disability 
                compensation, how such medical opinion will be 
                treated under section 5103B of this title.

           *       *       *       *       *       *       *

SEC. 5103B. TREATMENT OF PRIVATE MEDICAL OPINIONS

    (a) In General.--If a claimant submits a private medical 
opinion in support of a claim for disability compensation in 
accordance with standards established by the Secretary, such 
opinion shall be treated by the Secretary with the same 
deference as a medical opinion provided by a Department health 
care provider.
    (b) Supplemental Information.--(1) If a private medical 
opinion submitted as described in subsection (a) is found by 
the Secretary to be competent, credible, and probative, but 
otherwise not entirely adequate for purposes of assigning a 
disability rating or determining service-connection and the 
Secretary determines a medical opinion from a Department health 
care provider is necessary for such purposes, the Secretary 
shall obtain from an appropriate Department health care 
provider (as determined pursuant to the standards described in 
subsection (a)) a medical opinion that is adequate for such 
purposes.
    (2) If a private medical opinion submitted as described in 
subsection (a) addresses a matter relevant to the claim 
described in such subsection and such matter is within an area 
of expertise of the provider of such opinion, any opinion 
obtained by the Secretary under paragraph (1) of this 
subsection that addresses the same matter shall, to the extent 
feasible, be obtained from a health care provider of the 
Department that has expertise in that area.
    (c) Department Health Care Provider Defined.--In this 
section, the term ``Department health care provider'' includes 
a provider of health care who provides health care under 
contract with the Department.

SEC. 5103C. EXPEDITED REVIEW OF CLAIMS FOR DISABILITY COMPENSATION

    (a) Process Required.--The Secretary shall establish a 
process for the rapid identification of initial claims for 
disability compensation that should, in the adjudication of 
such claims, receive priority in the order of review.
    (b) Review of Initial Claims.--As part of the process 
required by subsection (a), the Secretary shall assign 
employees of the Department who are experienced in the 
processing of claims for disability compensation to carry out a 
preliminary review of all initial claims for disability 
compensation submitted to the Secretary in order to identify 
whether--
          (1) the claims have the potential of being 
        adjudicated quickly;
          (2) the claims qualify for priority treatment under 
        paragraph (2) of subsection (c); and
          (3) a temporary disability rating could be assigned 
        with respect to the claims under section 1156 of this 
        title.
    (c) Priority in Adjudication of Claims.--(1) Except as 
provided in paragraph (2), the Secretary shall, in the 
adjudication of claims for disability compensation submitted to 
the Secretary, give priority in the order of review of such 
claims to claims identified under subsection (b)(1) as having 
the potential of being adjudicated quickly.
    (2) The Secretary may, under regulations the Secretary 
shall prescribe, provide priority in the order of review of 
claims for disability compensation.

SEC. 5103D. PROCEDURES FOR FULLY DEVELOPED CLAIMS

    Upon notification received from a claimant that the 
claimant has no additional information or evidence to submit, 
the Secretary may determine that the claim is a fully developed 
claim. The Secretary shall then undertake any development 
necessary for any Federal records, medical examinations, or 
opinions relevant to the claim and may decide the claim based 
on all the evidence of record.

SEC. 5104. DECISIONS AND NOTICES OF DECISIONS

    (a) In the case of a decision by the Secretary under 
section 511 of this title affecting the provision of benefits 
to a claimant, the Secretary shall, on a timely basis, provide 
to the claimant (and to the claimant's representative) notice 
of such decision. [The notice shall include an explanation of 
the procedure for obtaining review of the decision.]
    (b) In any case where the Secretary denies a benefit 
sought, the notice required by subsection (a) shall [also 
include (1) a statement of the reasons for the decision, and 
(2) a summary of the evidence considered by the Secretary.] 
include the following:
          (1) A statement of the reasons for the decision.
          (2) A summary of the evidence relied upon by the 
        Secretary in making the decision.
          (3) An explanation of the procedure for obtaining 
        review of the decision, including the period prescribed 
        under paragraph (1) of section 7105(b) of this title 
        and the good cause exception under paragraph (3) of 
        such section.
          (4) A form that, once completed, can serve as a 
        notice of disagreement under section 7105(a) of this 
        title.

SEC. 5105. JOINT APPLICATIONS FOR SOCIAL SECURITY AND DEPENDENCY AND 
                    INDEMNITY COMPENSATION

    (a) The Secretary and the Commissioner of Social Security 
[shall] may jointly prescribe forms for use by survivors of 
members and former members of the uniformed services in filing 
application for benefits under chapter 13 of this title and 
title II of the Social Security Act (42 U.S.C. 401 et seq.). 
[Each such form] Such forms [shall] may request information 
sufficient to constitute an application for benefits under both 
chapter 13 of this title and title II of the Social Security 
Act (42 U.S.C. 401 et seq.).
    (b) When an application [on such a form] on any form 
indicating an intent to apply for survivor benefits is filed 
with either the Secretary or the Commissioner of Social 
Security, it shall be deemed to be an application for benefits 
under both chapter 13 of this title and title II of the Social 
Security Act (42 U.S.C. 401 et seq.). A copy of each such 
application filed with either the Secretary or the 
Commissioner, together with any additional information and 
supporting documents (or certifications thereof) which may have 
been received by the Secretary or the Commissioner with such 
application, and which may be needed by the other official in 
connection therewith, shall be transmitted by the Secretary or 
the Commissioner receiving the application to the other 
official. The preceding sentence shall not prevent the 
Secretary and the Commissioner of Social Security from 
requesting the applicant, or any other individual, to furnish 
such additional information as may be necessary for purposes of 
chapter 13 of this title and title II of the Social Security 
Act (42 U.S.C. 401 et seq.) respectively.

           *       *       *       *       *       *       *

                     Subchapter II. Effective Dates

SEC. 5110. EFFECTIVE DATES OF AWARDS

    (a) * * *
    (b)(1) * * *
    (2) The effective date of an award of disability 
compensation to a veteran who submits an application therefor 
that sets forth a claim that is fully-developed (as prescribed 
by the Secretary for purposes of this paragraph) as of the date 
of submittal shall be fixed in accordance with the facts found, 
but shall not be earlier than the date that is one year before 
the date of receipt of the application.
    (3) [(2)] The effective date of an award of increased 
compensation shall be the earliest date as of which it is 
ascertainable that an increase in disability had occurred, if 
application is received within one year from such date.
    (4) [(3)](A) The effective date of an award of disability 
pension to a veteran described in subparagraph (B) of this 
paragraph shall be the date of application or the date on which 
the veteran became permanently and totally disabled, if the 
veteran applies for a retroactive award within one year from 
such date, whichever is to the advantage of the veteran.

           *       *       *       *       *       *       *

Chapter 53. Special Provisions Relating to Benefits

           *       *       *       *       *       *       *

SEC. 5312. ANNUAL ADJUSTMENT OF CERTAIN BENEFIT RATES

           *       *       *       *       *       *       *

    (d)(1) Whenever there is an increase in benefit amounts 
payable under title II of the Social Security Act (42 U.S.C. 
401 et seq.) as a result of a determination made under section 
215(i) of such Act (42 U.S.C. 415(i)), the Secretary shall, 
effective on the date of such increase in benefit amounts, 
increase the dollar amounts in effect for the payment of 
disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in paragraph (2), 
as such amounts were in effect immediately before the date of 
such increase in benefit amounts payable under title II of the 
Social Security Act, by the same percentage as the percentage 
by which such benefit amounts are increased.
    (2) The dollar amounts to be increased pursuant to 
paragraph (1) are the following:
          (A) Compensation.--Each of the dollar amounts in 
        effect under section 1114 of this title.
          (B) Additional compensation for dependents.--Each of 
        the dollar amounts in effect under section 1115(1) of 
        this title.
          (C) Clothing allowance.--The dollar amount in effect 
        under section 1162 of this title.
          (D) New DIC rates.--Each of the dollar amounts in 
        effect under paragraphs (1) and (2) of section 1311(a) 
        of this title.
          (E) Old DIC rates.--Each of the dollar amounts in 
        effect under section 1311(a)(3) of this title.
          (F) Additional DIC for surviving spouses with minor 
        children.--The dollar amount in effect under section 
        1311(b) of this title.
          (G) Additional DIC for disability.--Each of the 
        dollar amounts in effect under sections 1311(c) and 
        1311(d) of this title.
          (H) DIC for dependent children.--Each of the dollar 
        amounts in effect under sections 1313(a) and 1314 of 
        this title.
    (3) Whenever there is an increase under paragraph (1) in 
amounts in effect for the payment of disability compensation 
and dependency and indemnity compensation, the Secretary shall 
publish such amounts, as increased pursuant to such paragraph, 
in the Federal Register at the same time as the material 
required by section 215(i)(2)(D) of the Social Security Act (42 
U.S.C. 415(i)(2)(D)) is published by reason of a determination 
under section 215(i) of such Act (42 U.S.C. 415(i)).

           *       *       *       *       *       *       *

Chapter 55. Minors, Incompetents, and Other Wards

           *       *       *       *       *       *       *

SEC. 5502. PAYMENTS TO AND SUPERVISION OF FIDUCIARIES

           *       *       *       *       *       *       *

    (f)(1) The Secretary may require any person appointed or 
recognized as a fiduciary for a Department beneficiary under 
this section to provide authorization for the Secretary to 
obtain (subject to the cost reimbursement requirements of 
section 1115(a) of the Right to Financial Privacy Act of 1978 
(12 U.S.C. 3415)) from any financial institution any financial 
record held by the institution with respect to the fiduciary or 
the beneficiary whenever the Secretary determines that the 
financial record is necessary--
          (A) for the administration of a program administered 
        by the Secretary; or
          (B) in order to safeguard the beneficiary's benefits 
        against neglect, misappropriation, misuse, 
        embezzlement, or fraud.
    (2) Notwithstanding section 1104(a)(1) of such Act (12 
U.S.C. 3404(a)(1)), an authorization provided by a fiduciary 
under paragraph (1) with respect to a beneficiary shall remain 
effective until the earliest of--
          (A) the approval by a court or the Secretary of a 
        final accounting of payment of benefits under any law 
        administered by the Secretary to a fiduciary on behalf 
        of such beneficiary;
          (B) in the absence of any evidence of neglect, 
        misappropriation, misuse, embezzlement, or fraud, the 
        express revocation by the fiduciary of the 
        authorization in a written notification to the 
        Secretary; or
          (C) the date that is three years after the date of 
        the authorization.
    (3)(A) An authorization obtained by the Secretary pursuant 
to this subsection shall be considered to meet the requirements 
of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 
et seq.) for purposes of section 1103(a) of such Act (12 U.S.C. 
3403(a)), and need not be furnished to the financial 
institution, notwithstanding section 1104(a) of such Act (12 
U.S.C. 3404(a)), if the Secretary provides a copy of the 
authorization to the financial institution.
    (B) The certification requirements of section 1103(b) of 
such Act (12 U.S.C. 3403(b)) shall not apply to requests by the 
Secretary pursuant to an authorization provided under this 
subsection.
    (C) A request for a financial record by the Secretary 
pursuant to an authorization provided by a fiduciary under this 
subsection is deemed to meet the requirements of section 
1104(a)(3) of such Act (12 U.S.C. 3404(a)(3)) and the matter in 
section 1102 of such Act (12 U.S.C. 3402) that precedes 
paragraph (1) of such section if such request identifies the 
fiduciary and the beneficiary concerned.
    (D) The Secretary shall inform any person who provides 
authorization under this subsection of the duration and scope 
of the authorization.
    (E) If a fiduciary of a Department beneficiary refuses to 
provide, or revokes, any authorization to permit the Secretary 
to obtain from any financial institution any financial record 
concerning benefits paid by the Secretary for such beneficiary, 
the Secretary may, on that basis, revoke the appointment or the 
recognition of the fiduciary for such beneficiary and for any 
other Department beneficiary for whom such fiduciary has been 
appointed or recognized. If the appointment or recognition of a 
fiduciary is revoked, benefits may be paid as provided in 
subsection (d).
    (4) For purposes of section 1113(d) of such Act (12 U.S.C. 
3413(d)), a disclosure pursuant to this subsection shall be 
considered a disclosure pursuant to a Federal statute.
    (5) In this subsection:
          (A) The term ``fiduciary'' includes any person 
        appointed or recognized to receive payment of benefits 
        under any law administered by the Secretary on behalf 
        of a Department beneficiary.
          (B) The term ``financial institution'' has the 
        meaning given such term in section 1101 of such Act (12 
        U.S.C. 3401), except that such term shall also include 
        any benefit association, insurance company, safe 
        deposit company, money market mutual fund, or similar 
        entity authorized to do business in any State.
          (C) The term ``financial record'' has the meaning 
        given such term in such section.

           *       *       *       *       *       *       *

             Part V. Boards, Administrations, and Services

Chapter 71. Board of Veterans' Appeals

           *       *       *       *       *       *       *

SEC. 7103. RECONSIDERATION; CORRECTION OF OBVIOUS ERRORS

           *       *       *       *       *       *       *

    (c)(1) Except as provided in paragraph (2), if a person 
adversely affected by a final decision of the Board, who has 
not filed a notice of appeal with the United States Court of 
Appeals for Veterans Claims under section 7266(a) of this title 
within the period set forth in that section, files a document 
with the Board or the agency of original jurisdiction referred 
to in section 7105(b)(1) of this title that expresses 
disagreement with such decision not later than 120 days after 
the date of such decision, such document shall be treated as a 
motion for reconsideration of such decision under subsection 
(a).
    (2) A document described in paragraph (1) shall not be 
treated as a motion for reconsideration of the decision under 
paragraph (1) if--
          (A) the Board or the agency of original jurisdiction 
        referred to in paragraph (1)--
                  (i) receives the document described in 
                paragraph (1);
                  (ii) determines that such document expresses 
                an intent to appeal the decision to the United 
                States Court of Appeals for Veterans Claims; 
                and
                  (iii) forwards such document to the United 
                States Court of Appeals for Veterans Claims; 
                and
          (B) the United States Court of Appeals for Veterans 
        Claims receives such document within the period set 
        forth by section 7266(a) of this title.
    (d) [(c)] The Board on its own motion may correct an 
obvious error in the record, without regard to whether there 
has been a motion or order for reconsideration.

           *       *       *       *       *       *       *

SEC. 7105. FILING OF NOTICE OF DISAGREEMENT AND APPEAL

    (a) Appellate review will be initiated by a notice of 
disagreement and completed by a substantive appeal after a 
[statement of the case] post-notice of disagreement decision is 
furnished as prescribed in this section. Each appellant will be 
accorded hearing and representation rights pursuant to the 
provisions of this chapter and regulations of the Secretary.
    (b)(1) Except in the case of simultaneously contested 
claims, notice of disagreement shall be filed within [one year] 
180 days from the date of mailing of notice of the result of 
initial review or determination. Such notice, and appeals, must 
be in writing and be filed with the activity which entered the 
determination with which disagreement is expressed (hereinafter 
referred to as the ``agency of original jurisdiction''). A 
notice of disagreement postmarked or transmitted by electronic 
means before the expiration of the [one-year] 180-day period 
will be accepted as timely filed.
    (2) * * *
    (3)(A) A notice of disagreement not filed within the time 
prescribed by paragraph (1) shall be treated by the Secretary 
as timely filed if--
          (i) the Secretary determines that the claimant, legal 
        guardian, or other accredited representative, attorney, 
        or authorized agent filing the notice had good cause 
        for the lack of filing within such time; and
          (ii) the notice of disagreement is filed not later 
        than 186 days after the period prescribed by paragraph 
        (1).
    (B) For purposes of this paragraph, good cause shall 
include the following:
          (i) Circumstances relating to any physical, mental, 
        educational, or linguistic limitation of the claimant, 
        legal guardian, representative, attorney, or authorized 
        agent concerned (including lack of facility with the 
        English language).
          (ii) Circumstances relating to significant delay in 
        the delivery of the initial decision or of the notice 
        of disagreement caused by natural disaster or factors 
        relating to geographic location.
          (iii) A change in financial circumstances, including 
        the payment of medical expenses or other changes in 
        income or net worth that are considered in determining 
        eligibility for benefits and services on an annualized 
        basis for purposes of needs-based benefits under 
        chapters 15 and 17 of this title.
    (c) * * *
    (d)(1)Where the claimant, or the claimant's representative, 
within the time specified in this chapter, files a notice of 
disagreement with the decision of the agency of original 
jurisdiction, such agency will take such development or review 
action as it deems proper under the provisions of regulations 
not inconsistent with this title. If such action does not 
resolve the disagreement either by granting the benefit sought 
or through withdrawal of the notice of disagreement, such 
agency shall prepare a [statement of the case] post-notice of 
disagreement decision. A [statement of the case] post-notice of 
disagreement decision shall include the following:
          [(A) A summary of the evidence in the case pertinent 
        to the issue or issues with which disagreement has been 
        expressed.
          [(B) A citation to pertinent laws and regulations and 
        a discussion of how such laws and regulations affect 
        the agency's decision.
          [(C) The decision on each issue and a summary of the 
        reasons for such decision.]
                  (A) A description of the specific facts in 
                the case that support the agency's decision, 
                including, if applicable, an assessment as to 
                the credibility of any lay evidence pertinent 
                to the issue or issues with which disagreement 
                has been expressed.
                  (B) A citation to pertinent laws and 
                regulations that support the agency's decision.
                  (C) A statement that addresses each issue and 
                provides the reasons why the evidence relied 
                upon supports the conclusions of the agency 
                under the specific laws and regulations 
                applied.
                  (D) The date by which a substantive appeal 
                must be filed in order to obtain further review 
                of the decision.
                  (E) The rights of the claimant under 
                subsection (f).
    (2) A [statement of the case] post-notice of disagreement 
decision, as required by this subsection, will not disclose 
matters that would be contrary to section 5701 of this title or 
otherwise contrary to the public interest. Such matters may be 
disclosed to a designated representative unless the 
relationship between the claimant and the representative is 
such that disclosure to the representative would be as harmful 
as if made to the claimant.
    (3) Copies of the ``[statement of the case] post-notice of 
disagreement decision'' prescribed in paragraph (1) of this 
subsection will be submitted to the claimant and to the 
claimant's representative, if there is one. [The claimant will 
be afforded a period of sixty days from the date the statement 
of the case is mailed to file the formal appeal. This may be 
extended for a reasonable period on request for good cause 
shown. The appeal should set out specific allegations of error 
of fact or law, such allegations related to specific items in 
the statement of the case. The benefits sought on appeal must 
be clearly identified. The agency of original jurisdiction may 
close the case for failure to respond after receipt of the 
statement of the case, but questions as to timeliness or 
adequacy of response shall be determined by the Board of 
Veterans' Appeals.]
    [(4) The claimant in any case may not be presumed to agree 
with any statement of fact contained in the statement of the 
case to which the claimant does not specifically express 
agreement.
    [(5) The Board of Veterans' Appeals may dismiss any appeal 
which fails to allege specific error of fact or law in the 
determination being appealed.]
    (4) The post-notice of disagreement decision shall be 
written in plain language.
    (e)(1) A claimant shall be afforded a period of 60 days 
from the date the post-notice of disagreement decision is 
mailed under subsection (d) to file a substantive appeal.
    (2)(A) The period under paragraph (1) may be extended for 
an additional 60 days for good cause shown on a request for 
such extension submitted in writing within such period.
    (B) For purposes of this paragraph, good cause shall 
include the following:
          (i) Circumstances relating to any physical, mental, 
        educational, or linguistic limitation of the claimant, 
        legal guardian, or other accredited representative, 
        attorney, or authorized agent filing the request 
        (including lack of facility with the English language).
          (ii) Circumstances relating to significant delay in 
        the delivery of the initial decision or of the notice 
        of disagreement caused by natural disaster or factors 
        relating to geographic location.
          (iii) A change in financial circumstances, including 
        the payment of medical expenses or other changes in 
        income or net worth that are considered in determining 
        eligibility for benefits and services on an annualized 
        basis for purposes of needs-based benefits under 
        chapters 15 and 17 of this title.
    (3) A substantive appeal under this subsection shall 
identify the particular determination or determinations being 
appealed and allege specific errors of fact or law made by the 
agency of original jurisdiction in each determination being 
appealed.
    (4) A claimant in any case under this subsection may not be 
presumed to agree with any statement of fact contained in the 
post-notice of disagreement decision to which the claimant does 
not specifically express disagreement.
    (5) If the claimant does not file a substantive appeal in 
accordance with the provisions of this chapter within the 
period afforded under paragraphs (1) and (2), as the case may 
be, the agency of original jurisdiction shall dismiss the 
appeal and notify the claimant of the dismissal. The notice 
shall include an explanation of the procedure for obtaining 
review of the dismissal by the Board of Veterans' Appeals.
    (6) In order to obtain review by the Board of a dismissal 
of an appeal by the agency of original jurisdiction, a claimant 
shall file a request for such review with the Board within the 
60-day period beginning on the date on which notice of the 
dismissal is mailed pursuant to paragraph (5).
    (7) If a claimant does not file a request for review by the 
Board in accordance with paragraph (6) within the prescribed 
period or if such a request is timely filed and the Board 
affirms the dismissal of the appeal, the determination of the 
agency of original jurisdiction regarding the claim for 
benefits under this title shall become final and the claim may 
not thereafter be reopened or allowed, except as may otherwise 
be provided by regulations not inconsistent with this title.
    (8) If an appeal is not dismissed by the agency of original 
jurisdiction, the Board may nonetheless dismiss any appeal 
which is--
          (A) untimely; or
          (B) fails to allege specific error of fact or law in 
        the determination being appealed.
    (f) If, either at the time or after the agency of original 
jurisdiction receives a substantive appeal, the claimant or the 
claimant's representative, if any, submits evidence to either 
the agency of original jurisdiction or the Board of Veterans' 
Appeals for consideration in connection with the issue or 
issues with which disagreement has been expressed, such 
evidence shall be subject to initial review by the Board unless 
the claimant or the claimant's representative, as the case may 
be, requests in writing that the agency of original 
jurisdiction initially review such evidence. Such request for 
review shall accompany the submittal of the evidence or be made 
within 30 days of the submittal.

SEC. 7105A. SIMULTANEOUSLY CONTESTED CLAIMS

    (a) * * *
    (b) Upon the filing of a notice of disagreement, all 
parties in interest will be furnished with a [statement of the 
case] post-notice of disagreement decision in the same manner 
as is prescribed in section 7105. The party in interest who 
filed a notice of disagreement will be allowed thirty days from 
the date of mailing of such [statement of the case] post-notice 
of disagreement decision in which to file a formal appeal. 
Extension of time may be granted for good cause shown but with 
consideration to the interests of the other parties involved. 
The substance of the appeal will be communicated to the other 
party or parties in interest and a period of thirty days will 
be allowed for filing a brief or argument in answer thereto. 
Such notice shall be forwarded to the last known address of 
record of the parties concerned, and such action shall 
constitute sufficient evidence of notice.

SEC. 7106. ADMINISTRATIVE APPEALS

    Application for review on appeal may be made within the 
[one-year period described in section 7105] period described in 
section 7105(b)(1) of this title by such officials of the 
Department as may be designated by the Secretary. An 
application entered under this paragraph shall not operate to 
deprive the claimant of the right of review on appeal as 
provided in this chapter.

SEC. 7107. APPEALS: DOCKETS; HEARINGS

           *       *       *       *       *       *       *

    (d)(1) [An appellant may request that a hearing before the 
Board be held at its principal location or at a facility of the 
Department located within the area served by a regional office 
of the Department.] Upon request by an appellant for a hearing 
before the Board, the Board shall present the appellant with 
the following:
          (A) The option of holding the hearing at--
                  (i) the Board's principal location; or
                  (ii) a facility of the Department located 
                within the area served by a regional office of 
                the Department.
          (B) A recommendation as to the option presented under 
        subparagraph (A) that would lead to the earliest 
        possible date for the hearing, including with respect 
        to the use of facilities and equipment under subsection 
        (e).
          (C) Statistics on the average wait experienced by 
        similarly situated appellants for hearings at either 
        option presented under subparagraph (A).

           *       *       *       *       *       *       *

    (e)(1) * * *
    (2)(A) When such [When such] facilities and equipment are 
available, the Chairman may afford the appellant an opportunity 
to participate in a hearing before the Board through the use of 
such facilities and equipment in lieu of a hearing held by 
personally appearing before a Board member or panel as provided 
in subsection (d).
    (B) Any such [Any such] hearing shall be conducted in the 
same manner as, and shall be considered the equivalent of, a 
personal hearing.
    (C) In affording the appellant an opportunity under 
subparagraph (A), the Board shall inform the appellant of the 
advantages and disadvantages of participating in a hearing 
through the use of such facilities and equipment.
    (D) If the appellant [If the appellant] declines to 
participate in a hearing through the use of such facilities and 
equipment, the opportunity of the appellant to a hearing as 
provided in such subsection (d) shall not be affected.

           *       *       *       *       *       *       *

            Chapter 72. United States Court of Appeals for 
Veterans Claims

           *       *       *       *       *       *       *

                        Subchapter II. Procedure

SEC. 7261. SCOPE OF REVIEW

    (a) In any action brought under this chapter, the Court of 
Appeals for Veterans Claims[, to the extent necessary to its 
decision and when presented, shall] shall, when presented--

           *       *       *       *       *       *       *

    (c) In carrying out a review of a decision of the Board of 
Veterans' Appeals, the Court shall render a decision on every 
issue raised by an appellant within the extent set forth in 
this section.
    (d) [(c)] In no event shall findings of fact made by the 
Secretary or the Board of Veterans' Appeals be subject to trial 
de novo by the Court.
    (e) [(d)] When a final decision of the Board of Veterans' 
Appeals is adverse to a party and the sole stated basis for 
such decision is the failure of the party to comply with any 
applicable regulation prescribed by the Secretary, the Court 
shall review only questions raised as to compliance with and 
the validity of the regulation.

           *       *       *       *       *       *       *

SEC. 7266. NOTICE OF APPEAL

    (a) * * *
    (b)(1) The Court may extend the initial period for the 
filing of a notice of appeal set forth in subsection (a) for an 
additional period not to exceed 120 days from the expiration of 
such initial period upon a motion--
          (A) filed with the Court not later than 120 days 
        after the expiration of such initial period; and
          (B) showing good cause for such extension.
    (2) If a motion for extension under paragraph (1) is filed 
after expiration of the initial period for the filing of a 
notice of appeal set forth in subsection (a), the notice of 
appeal shall be filed concurrently with, or prior to, the 
filing of the motion.
    (c) [(b)] An appellant shall file a notice of appeal under 
this section by delivering or mailing the notice to the Court.
    (d) [(c)] A notice of appeal shall be deemed to be received 
by the Court as follows:
          (1) * * *
          (2) * * *
    (e) [(d)] For a notice of appeal mailed to the Court to be 
deemed to be received under [subsection (c)(2)] subsection 
(d)(2) on a particular date, the United States Postal Service 
postmark on the cover in which the notice is posted must be 
legible. The Court shall determine the legibility of any such 
postmark and the Court's determination as to legibility shall 
be final and not subject to review by any other Court.

           *       *       *       *       *       *       *

      

                                  
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