Report to the Chairman and Ranking

Member, Committee on Veterans’

Affairs, U.S. Senate

United States General Accounting Office

GAO

July 2002 VETERANS’

BENEFITS

VBA’s Efforts to

Implement the

Veterans Claims

Assistance Act Need

Further Monitoring

GAO-02-412
Page i GAO-02-412 Veterans Claims Assistance Act

Letter 1

Results in Brief 2

Background 3

VBA’s Efforts To Implement the VCAA Have Not Resulted in Full

Compliance with the Law 6

VBA Is Focusing on Increasing Production, but Challenges Remain

in Improving Timeliness 9

Conclusions 15

Recommendation 16

Agency Comments and Our Response 16

Appendix Comments from the Department of Veterans Affairs 18

Table

Table 1: Changes in VBA’s Workload of Rating-Related Claims,

Fiscal Years 1997 - 2002 10

Figure

Figure 1: Average Days to Complete Rating-Related Claims, Fiscal

Years 1999 - 2003 15

Abbreviations

BVA Board of Veterans’ Appeals

STAR Systematic Technical Accuracy Review

VA Department of Veterans Affairs

VBA Veterans Benefits Administration

VCAA Veterans Claims Assistance Act of 2000

Contents
Page 1 GAO-02-412 Veterans Claims Assistance Act

July 1, 2002

The Honorable John D. Rockefeller IV

Chairman

The Honorable Arlen Specter

Ranking Member

Committee on Veterans’ Affairs

United States Senate

In November 2000, the Veterans Claims Assistance Act (VCAA) of 20001

was enacted to ensure that the Department of Veterans Affairs (VA)

assisted veterans claiming VA benefits. This legislation was passed in

response to concerns expressed by veterans, veterans service

organizations, and the Congress over a July 1999 decision of the U.S. Court

of Appeals for Veterans Claims,2

 known as the Morton decision, which

held that the VA did not have a duty to assist veterans in developing their

claims unless they were “well-grounded.” That is, enough information was

provided for VA to determine that the claim was plausible. The VCAA

invalidated certain portions of the Morton decision and obligated VA to

assist veterans in the development of their claims. According to VA’s

Veterans Benefits Administration (VBA), the VCAA has significantly

increased VBA’s workload in processing veterans’ claims for VA disability

compensation and pension benefits because it decided to rework many of

the 98,000 claims that had been denied under the Morton decision, review

approximately 244,000 claims that were pending at the time the VCAA was

enacted, and it added more time to the processing of new claims received

after the passage of the law.

VBA considers the VCAA’s implementation a significant factor in the

recent growth of its inventory of compensation and pension claims

awaiting decisions. From the law’s enactment to January 2002, the

inventory increased by more than three-quarters, to a peak of about

433,000 claims. Given the number of veterans whose claims are awaiting

decisions, you asked that we evaluate VBA’s implementation of the

legislation. Specifically, you asked us to determine (1) what steps VBA has

 1

 Public Law 106-475, Nov. 9, 2000.

2 Morton v. West, 12 Vet. App. 477 (1999).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-412 Veterans Claims Assistance Act

taken to implement the legislation and (2) how VBA is managing the

slowdown in case processing.

To address the questions, we reviewed VBA guidance and regulations

pertaining to the implementation of the VCAA and analyzed workload and

productivity reports to identify changes since the enactment of the VCAA.

We also interviewed agency officials to discuss their efforts to implement

the VCAA. In addition, we visited five VBA regional offices to review their

implementation of the VCAA and how the law has impacted their

workload and claims processing production. The regional offices we

visited were in Montgomery, Alabama; Oakland, California; Buffalo, New

York; Winston-Salem, North Carolina; and Roanoke, Virginia. We focused

our work on VBA’s disability compensation and pension programs, since

they account for most of the benefit claims in VA. We conducted our

review from September 2001 through May 2002 in accordance with

generally accepted government auditing standards.

VBA has taken a number of steps to implement the VCAA, including

issuing guidance, revising and supplementing this guidance based on

questions raised by regional offices, and reinforcing the guidance based on

the results of its accuracy reviews. Despite these efforts, VBA has found

problems with consistent regional office compliance with the law. To

VBA’s credit, shortly after the enactment of VCAA, it issued to its regional

offices its first guidance on VCAA implementation for new and pending

cases. From December 2000 to February 2001, VBA issued further

guidance to clarify its original guidance and respond to regional office

questions. VBA also revised its quality assurance system to reflect the new

VCAA requirements and capture data on their proper implementation.

Despite VBA’s efforts, recent results from its quality assurance reviews

indicate a significant decrease in rating accuracy due, in large part, to

improper regional office implementation of VCAA requirements. To

correct this, VBA instructed regional office management to certify that all

claims processing employees have read and understand VCAA guidance.

However, VBA does not know the underlying reasons why regional offices

are not properly implementing the VCAA. Without understanding the root

causes of the errors, certifying that staff have read and understand the

guidance may not be enough for proper implementation.

While taking steps to implement the VCAA, VBA is also focusing on

significantly increasing production and reducing the claims inventory to

manage the slowdown in case processing. In fiscal year 2002, VBA plans to

complete about 839,000 claims to reduce its inventory to 316,000 claims.

Results in Brief
Page 3 GAO-02-412 Veterans Claims Assistance Act

VBA plans to eventually reduce its inventory to 250,000 claims to meet the

Secretary’s timeliness goal of processing claims in an average of 100 days

by the end of fiscal year 2003.3 Through the first 6 months of fiscal year

2002, VBA completed about 367,000 claims, and its inventory was 412,000

claims. Although VBA has made some progress in increasing production,

meeting the fiscal year 2002 production and inventory reduction goals will

be challenging because VBA is relying on staff to increase their

productivity even more in the second half of the fiscal year. Furthermore,

as we noted in our April 2002 testimony,4

 cutting the time to process

claims roughly in half to meet the Secretary’s timeliness goal of 100 days

by the end of fiscal year 2003 depends on more than just increasing

production and reducing inventory. VBA continues to face difficult

challenges we identified in the past that can lengthen claims processing

times, such as delays in obtaining evidence.

This report contains a recommendation to the Secretary of Veterans

Affairs that he direct VBA to identify the causes of the VCAA-related errors

so that more specific corrective action can be taken if VBA continues to

experience significant quality assurance problems related to the VCAA.

In its July 1999 Morton decision, the U.S. Court of Appeals for Veterans

Claims ruled that the VA did not have a duty to assist in developing claims

unless they were “well-grounded” as required by federal statute. Prior to

this court decision, VA policy was to assist claimants in developing a wellgrounded claim. This practice, however, was not required by law, and VBA

regional offices varied in the amount of assistance they provided. The

VCAA (P.L. 106-475), commonly referred to as the “duty to assist” law, was

enacted in November 2000. This law repealed the requirement that claims

be well-grounded and it obligated VA to assist a claimant in obtaining

evidence that is necessary to establish eligibility for the benefit being

sought.

VCAA requires VBA to take specific steps to assist claimants once they

have filed a complete claim for benefits. Specifically, the VCAA requires

 3

 VBA measures processing time from the date the claim was received to the date on which

VBA issued a decision on the claim.

4

 U.S. General Accounting Office, Veterans’ Benefits: Despite Recent Improvements,

Meeting Claims Processing Goals Will Be Challenging, GAO-02-645T (Washington, D.C.:

Apr. 26, 2002).

Background
Page 4 GAO-02-412 Veterans Claims Assistance Act

VBA to: (1) notify claimants of the information necessary to complete the

application; (2) indicate what information not previously provided is

needed to prove the claim, and distinguish between the portion of the

information for which the claimant will be responsible and the portion for

which VA will be responsible; (3) make reasonable efforts to assist

claimants in obtaining evidence to substantiate claimants’ eligibility for

benefits, including relevant records; and (4) inform claimants when

relevant records are unable to be obtained. The VCAA also allowed for the

re-adjudication of claims denied as not well-grounded between the date of

the Morton decision, July 14, 1999, and the effective date of the VCAA,

November 9, 2000. The act stated that this rework could be done at the

veteran’s request or on VBA’s initiative. VBA decided to review all such

claims and perform any necessary work, such as sending additional

notifications or making new rating decisions.

The compensation program pays monthly benefits to veterans who have

service-connected disabilities (injuries or diseases incurred or aggravated

while on active military duty). The pension program pays monthly benefits

based on financial need to wartime veterans who have low incomes and

are permanently and totally disabled for reasons not service-connected.5

VA expects to provide about $25 billion in compensation and pension

benefits in fiscal year 2002 to over 3 million veterans and their dependents

and survivors.

Disability compensation benefits are graduated in 10 percent increments

based on the degree of disability from 0 percent to 100 percent. Eligibility

and priority for other VA benefits and services such as health care and

vocational rehabilitation are affected by these VA disability ratings. Basic

monthly payments range from $103 for 10 percent disability to $2,163 for

100 percent disability. Generally, veterans do not receive compensation for

disabilities rated at 0 percent. About 65 percent of veterans receiving

disability compensation have disabilities rated at 30 percent or lower;

about 8 percent have disabilities rated at 100 percent. The most common

impairments for veterans who began receiving compensation in fiscal year

2000 were skeletal conditions; tinnitus; auditory acuity impairment rated

at 0 percent; arthritis due to trauma; scars; and post-traumatic stress

disorder.

 5

 Veterans who are 65 years or older do not have to be permanently and totally disabled to

become eligible for pension benefits, as long as they meet the other requirements for

income and military service.
Page 5 GAO-02-412 Veterans Claims Assistance Act

Veterans may submit claims to any one of VBA’s 57 regional offices. To

develop veterans’ claims, veterans service representatives at the regional

offices request and obtain the necessary information to evaluate the

claims. This includes veterans’ military service records; medical

examinations and treatment records from VA medical facilities; and

treatment records from private providers. Once claims are developed and

“ready to rate,” rating veterans service representatives (hereafter referred

to as rating specialists) evaluate the claimed disabilities and assign ratings

based on degree of disability. Veterans with multiple disabilities receive a

single, composite rating. For veterans claiming pension eligibility, the

regional office determines if the veteran served in a period of war, is

permanently and totally disabled for reasons not service-connected, and

meets the income thresholds for eligibility.

If a veteran disagrees with the regional office’s decision, he or she can ask

for a review of that decision or appeal to VA’s Board of Veterans’ Appeals

(BVA). BVA makes the final decision on such appeals and can grant

benefits, deny benefits, or remand (return) the case to the regional office

for further development and reconsideration. After reconsidering a

remanded decision, the regional office either grants the claim or returns it

to BVA for a final VA decision. If the veteran disagrees with BVA’s

decision, he or she may appeal to the U.S. Court of Appeals for Veterans

Claims. If either the veteran or VA disagrees with the court’s decision, they

may appeal to the U.S. Court of Appeals for the Federal Circuit.

In fiscal year 1999, VBA implemented the Systematic Technical Accuracy

Review (STAR) system to measure the accuracy of its claims processing

for its rating-related work. Under the STAR system, VBA considers a claim

to have been processed accurately if the regional office determines basic

eligibility correctly, obtains all required medical and nonmedical

documentary evidence, decides service-connection correctly, gives the

correct rating to each impairment, determines the correct payment

amount, and properly notifies the veteran of the outcome of his or her

claim. If a claim has any errors in any of these areas, VBA counts the entire

claim as incorrect for accuracy rate computation purposes. For the nation

as a whole, VBA reported an accuracy rate of 81 percent for fiscal year

2001. VBA’s goal for fiscal year 2002 is 85 percent, and its strategic goal is

to achieve a national accuracy rate of 96 percent by fiscal year 2006.

Beginning with fiscal year 2002, VBA has revised its accuracy measure to

focus on whether regional office decisions to grant or deny are correct.

Prior to this change, VA’s accuracy rate included whether the decision to

grant or deny claims were correct and also included errors stemming from

procedural and technical issues, such as failure to include all the
Page 6 GAO-02-412 Veterans Claims Assistance Act

documentation in the case file. This revision to VBA’s quality assurance

program for compensation claims processing is consistent with

recommendations made by the VA Secretary’s 2001 Claims Processing

Task Force. Issues related to benefit entitlement decisions would be the

basis for future revision based on clear and unmistakable error or would

result in a BVA remand if not otherwise corrected during the appeal

process.

To implement the VCAA, VBA has issued guidance, obtained and

responded to regional office staff questions, conducted an informal review

of cases, and issued clarifying instructions based on the questions it

received and the results of its review. To better hold regional offices

accountable for proper implementation, VBA revised its quality assurance

system to reflect the VCAA requirements. However, recent quality reviews

show that VCAA requirements are not always being met. Though VBA does

not know the underlying reason why regional offices may not be meeting

VCAA requirements, it has attempted to correct the implementation

deficiencies by requiring regional office managers to certify that staff had

read and understand VCAA guidance.

On October 19, 2000, in anticipation of enactment of the VCAA, VBA

instructed regional offices to stop denying claims as not well-grounded

under the Morton decision. On November 17, 2000—8 days after the

VCAA’s enactment—VBA issued its first VCAA implementation guidance

and rescinded guidance on implementing Morton. This guidance was

provided pending the revision of VA’s adjudication regulations to conform

with the VCAA.6

To clarify and supplement its initial guidance, VBA issued several other

guidance letters through February 2001. VBA supplemented this written

guidance with teleconferences and questions and answers posted on

VBA’s Intranet site. This guidance covered the development and

adjudication of claims (1) denied as not well-grounded under Morton,

(2) pending when the VCAA was enacted, and (3) received after the law

was enacted. The guidance also covered the handling of appealed claims.

 6

 VA published its proposed regulations on April 4, 2001, and its final regulations on August

29, 2001.

VBA’s Efforts To

Implement the VCAA

Have Not Resulted in

Full Compliance with

the Law
Page 7 GAO-02-412 Veterans Claims Assistance Act

In February 2001, VBA issued guidance for the review of about 98,000

claims that regional offices had previously denied as not well-grounded

under Morton. VBA required regional offices to complete reviews of these

claims by October 1, 2001; it later extended this deadline to December 31,

2001. Where a new decision was required,7

 regional offices were to follow

the VCAA guidance on notifications to veterans and claims development.

This included sending “duty to assist” letters to veterans requesting any

additional evidence the veterans may have to substantiate their claims;

developing any previously or newly identified evidence; obtaining medical

examinations, if appropriate; and making a new rating decision. If the

veteran did not respond to the regional office’s request for information

within 60 days, VBA could deny the claim again for lack of evidence. As of

the end of March 2002, VBA has completed about 81 percent of its reviews.

The areas in which VBA clarified and supplemented its initial guidance

included: (1) requesting VHA medical examinations and medical opinions;

(2) pursuing records from federal agencies and private providers; and

(3) notifying veterans, including requests for evidence, and notifications

that VBA was unable to obtain identified evidence. For example, in

response to staff questions about the criteria for scheduling medical

exams and requesting medical opinions, VBA advised that medical exams

should be scheduled unless it is absolutely clear that no relation exists

between the veteran’s current disability and military service. Also, in

response to staff questions on what to do if federal and private provider

records are unavailable, VBA advised that regional offices needed positive

confirmation that federal records do not exist. Regional offices also asked

if they needed to develop all claims denied under Morton as not wellgrounded or simply re-rate the claims without performing additional

development. VBA responded that for all such claims that required

readjudication, VBA must develop the claim in accordance with the

VCAA’s requirements. Furthermore, VBA provided templates for VCAA

development letters.

Veterans Service Organization (VSO) officials we spoke with at the

regional offices we visited expressed concerns about the clarity and

necessity of VCAA pre-decision notification letters.8

 They said that some

 7

 A new decision was not required if VBA had already readjudicated the claim, and the

claim was (a) granted or (b) denied on the merits after being fully developed.

8

 The pre-decision notice (also known as a development letter) is a notification sent to the

claimant requesting any information, not previously provided that is necessary to

substantiate the claim.
Page 8 GAO-02-412 Veterans Claims Assistance Act

veterans did not understand why they were receiving the letters—

particularly if they had already responded to previous VBA letters

requesting evidence. Also, the officials said that the letters were not

always clear and were often not tailored to the circumstances of individual

veterans’ claims. We reported in April 20029

 that 43 percent of our sample

of development letters did not clearly explain the actions that claimants

were to take to support their claims. We recommended that VBA eliminate

deficiencies in its development letter to clarify the actions that the

claimant should take to substantiate a claim. In response to our

recommendations, VBA agreed to revise its development letter.

In an effort to assess the impact of VCAA on the outcome of claims and to

assess regional office compliance with VCAA, VBA conducted an informal

review in the summer and fall of 2001 of claims that had been denied as

not well-grounded under Morton. VBA found that its VCAA

implementation instructions had not been followed in some of the cases it

sampled. In particular, the letters notifying the veteran of necessary

evidence were not being sent in about 20 percent of the cases. As a result

of this study, VBA issued instructions in August 2001 that emphasized the

need to follow the previous written guidance, particularly the need to fully

and completely develop claims. This included providing notice to the

veteran of any additional evidence needed, pursuing records from federal

agencies and private providers, and obtaining medical examinations when

needed to make a decision on the claim. VBA noted that failure to take

these actions would cause STAR reviewers to find the claim to be in error

and could serve as a basis for BVA to remand the claim, if appealed.

To ensure accountability by regional offices and their claims processing

staffs for VCAA compliance, VBA has incorporated the requirements into

its STAR quality assurance review checklists.10 These revised checklists—

which began to be used to review claims decisions made in October

2001—include two specific VCAA-related questions: (1) Was VCAA predecision notice provided and adequate? and (2) Does the record show

 9

 U.S. General Accounting Office, Veterans Benefits Administration: Clarity of Letters to

Claimants Needs to Be Improved, GAO-02-395 (Washington, D.C.: Apr. 23, 2002).

10 Under STAR, regional offices submit samples of claims each month to be reviewed.

Decisions are reviewed for accuracy and conformance with VBA’s standards. Feedback is

provided to the regional offices. VBA has two STAR checklists: one for rating decisions and

one for “authorization” decisions, which do not require ratings.
Page 9 GAO-02-412 Veterans Claims Assistance Act

VCAA compliant development to obtain all indicated evidence (including a

VA exam, if required) prior to deciding the claim?

Early fiscal year 2002 data show that benefit entitlement errors are still

occurring because of VCAA implementation errors. Of the STAR sample of

830 rating-related decisions made from October 2001 through January

2002, the overall accuracy rate—under VBA’s new standard, which focuses

on the accuracy of the decision on entitlement to benefits11—was 71

percent. VBA found that about half (142 of 288) of the entitlement decision

errors involved noncompliance with VBA’s guidance on the VCAA.12 Of

these errors, 60 involved a pre-decision notice that was not adequate or

not provided at all and 82 showed that not all indicated evidence was

obtained as required.

VBA considered the error rate for VCAA compliance to be significant

enough that in April 2002 it asked regional offices to “retrain” staff on the

VCAA guidance and certify that the staff have read and understand the

guidance, by the end of April 2002. As of May 7, 2002, 56 of the 57 offices

had certified that their staff had read and understand the guidance.

Although ensuring that staff have read and understand the guidance is a

positive step, this may not be enough. VBA had already issued a series of

implementing guidance letters to answer staff questions and to reinforce

guidance prior to the STAR review. However, the STAR review showed

that regional offices continued to experience problems with

implementation. VBA has not determined the reasons why the regional

offices are not properly implementing the VCAA.

VBA is managing the slowdown in case processing by attempting to

significantly increase regional offices’ rating decision production. VCAA

contributed to the slowdown in claims processing because VBA reworked

many claims based on the VCAA’s new requirements and because new

claims must also be processed under these more time-consuming

requirements. VBA has set production and inventory goals for fiscal year

2002, which it believes will put it on track to reducing the average time to

process claims to 100 days by the end of fiscal year 2003. Although VBA

has made some progress in increasing production, it faces challenges in

 11 The two VCAA questions in the rating checklist are included in the criteria for

determining entitlement accuracy.

12 A decision may have more than one error on the STAR checklist.

VBA Is Focusing on

Increasing

Production, but

Challenges Remain in

Improving Timeliness
Page 10 GAO-02-412 Veterans Claims Assistance Act

meeting these production and inventory goals. Monthly production will

need to significantly increase in the second half of the fiscal year if VBA is

to meet its goal for the year. Even if VBA achieves its production and

inventory goals, it still faces additional challenges to achieving its end of

fiscal year 2003 goal of processing claims in an average of 100 days.

VBA attributes a significant part of the increase in pending claims

inventory in fiscal year 2001, and the associated increase in claims

processing times, to the VCAA’s impact. According to VBA, the VCAA

added to the inventory because of the need to rework many claims. VBA

also believes that VCAA will lengthen the processing time of new claims,

but could not quantify the extent. Several other factors, such as the

addition of diabetes as a presumptive service-connected disability for

veterans who served in Vietnam, the implementation of VBA’s new claims

processing software, and the hiring and training of a large number of staff,

also impacted VBA’s workload and production in fiscal year 2001.

Table 1: Changes in VBA’s Workload of Rating-Related Claims, Fiscal Years 1997-

2002

Rating-related compensation and pension claims

Fiscal year Received Completed

End of year

inventory

1997 740,052 701,717 213,193

1998 691,461 663,400 241,254

1999 639,070 630,145 250,179

2000 578,773 601,451 227,501

2001 674,219 481,117 420,603

2002 first half 358,895 367,476 412,022

2002 goal 734,087 838,874 315,586

Source: Veterans Benefits Administration.

As shown in table 1, VBA received about 95,000 more claims and produced

about 120,000 fewer claims decisions in fiscal year 2001 than in the prior

fiscal year.

The VCAA contributed to VBA receiving more claims in fiscal year 2001

than the prior fiscal year. The VCAA required VA, if requested by a veteran,

to readjudicate claims that were denied as not well-grounded under the

Morton decision. It also allowed VA to readjudicate these claims on its

own initiative. VBA undertook a review of about 98,000 veterans’ disability

claims that it had identified as previously denied as not well grounded. In

VBA Attributes the

Slowdown in Claims

Processing in Part to

VCAA
Page 11 GAO-02-412 Veterans Claims Assistance Act

addition, VBA had an inventory of about 244,000 rating-related claims

pending when the VCAA was enacted in November 2000. VBA decided to

review these claims to ensure that VCAA requirements were met. VBA had

completed about 64,000 of these claims as of April 29, 2002.13 In addition to

the VCAA, VBA has cited other factors as contributing to the increase in its

claims inventory. For example, the recent addition of diabetes as a

presumptive service-connected disability for veterans who served in

Vietnam has caused an influx of new disability claims. By the end of fiscal

year 2003, VBA expects to have received 197,500 diabetes claims. The

addition of new claims processing staff during fiscal year 2001 has also

temporarily hampered the productivity of experienced staff. According to

officials at some of the regional offices we visited, experienced rating

specialists had less time to spend on rating work because they were

helping train and mentor new rating specialists. The learning curve and

implementation difficulties with VBA’s new automated rating preparation

system (Rating Board Automation 2000) also hampered regional offices’

productivity.14

Furthermore, the VCAA has significantly impacted VBA’s work processes.

According to VA officials, the most significant change is the requirement to

fully develop claims even in the absence of evidence showing a current

disability or a link to military service. Under Morton, if a veteran could not

provide enough information to show that the claim was plausible, VBA

could deny the claim as not well-grounded. These claims must now be

developed and evaluated under the expanded procedures required by the

VCAA. For example, officials at one regional office we visited noted that

they are requesting more medical examinations than they did before the

VCAA was enacted. Also, time can be added in waiting for evidence. For

example, VBA must make repeated efforts to obtain evidence from federal

agencies—stopping only when the agency certifies that the record does

not exist, or VBA determines that further efforts to obtain the evidence

would be futile.

 13 VCAA also impacted VBA’s appeals workload. For example, prior to enactment of VCAA

about 30 percent of appealed regional office decisions were remanded (returned) back for

additional work by the Board of Veterans’ Appeals. According to VBA, the VCAA led to an

increase in the remand rate to about 50 percent during fiscal year 2001.

14 Rating Board Automation 2000 is a system designed to assist rating specialists in

preparing rating decisions on claims.
Page 12 GAO-02-412 Veterans Claims Assistance Act

VBA is addressing its claims processing slowdown by taking steps to

increase production and reduce its claims inventory. VBA believes that it

will be able to reduce its inventory to a level that will enable it to process

cases in an average of 100 days by the end of fiscal year 2003. Specifically,

VBA has established an end of fiscal year 2002 inventory goal of about

316,000 claims. To meet this goal, VBA plans to complete about 839,000

rating-related claims during the fiscal year. The regional offices are

expected to complete about 792,000 of these claims. This level of

production is greater than VBA has achieved in any of the last 5 fiscal

years—as shown in table 1, VBA’s peak production was about 702,000

claims in fiscal year 1997. However, VBA has significantly more rating staff

now than it did in any of the previous 5 fiscal years. VBA’s rating staff has

increased by about 50 percent since fiscal year 1997 to 1,753. To reach

VBA’s fiscal year 2002 production goal, rating specialists will need to

complete an average of about 2.5 cases per day—a level VBA achieved in

fiscal year 1999. VBA expects this production level to enable it to achieve

its end-of-year inventory goal of about 316,000 rating-related claims, which

VBA believes would put the agency on track to meet the Secretary’s

inventory goal of 250,000 cases by the end of fiscal year 2003.

To meet its production goal, in December 2001, VBA allocated its fiscal

year 2002 national production target to its regional offices15 based on each

regional office’s capacity to produce rating-related claims given each

office’s number of rating staff and their experience levels.16 For example,

an office with 5 percent of the national production capacity received 5

percent of the national production target. In February 2002, VBA revised

how it allocated the monthly production targets to its regional offices

based on input from regional offices regarding their current staffing levels.

In allocating the target, VBA considered each regional office’s fiscal year

2001 claims receipt levels, production capacity, and actual production in

the first quarter of fiscal year 2002.

 15 VBA had initially established production targets in March 2001 for April through

December 2001. The target was to complete 52,000 rating-related claims per month that

would allow VBA to reduce its inventory by 1 percent per month.

16 In determining regional office production capacity, VBA officials told us that they

considered the various experience levels of regional office rating specialists. For example,

rating specialists with 6 months to 1 year of experience are expected to rate half as many

claims as rating specialists with more than 2 years of experience. A rating specialist with 1

to 2 years of experience would be expected to rate three-quarters as many claims as a

rating specialist with over 2 years’ experience.

VBA Is Focusing on

Increasing Production to

Address Its VCAA-Related

Slowdown
Page 13 GAO-02-412 Veterans Claims Assistance Act

In March 2001, VBA allowed regional offices to suspend or alter several

VBA initiatives in order to increase production. Offices were allowed to

revert back to an early version of VBA’s Rating Board Automation (RBA)

software for ratings where the new software (RBA 2000) was significantly

impeding productivity. In an effort to increase rating decision output while

VBA continued its training of new rating specialists, offices were directed

to have their decision review officers—who handle veterans’ appeals of

regional office decisions—spend half their time rating claims. Also, offices

were given latitude to vary from VBA’s case management principles, under

which claims processing teams handle most types of claims, and realign

staff to perform specialized processing of certain types of claims.

To hold regional office managers accountable, VBA incorporated specific

regional office production goals into regional office performance

standards. For fiscal year 2002, regional office directors are expected to

meet their annual production target or their monthly targets in 9 out of 12

months. Generally, the combined monthly targets for the regional offices

increase as the year progresses and as the many new rating specialists

hired in previous years gain experience and become fully proficient claims

processors.

At the same time as it is expecting regional offices to complete more

claims, VBA has implemented two initiatives to expedite claim decisions

and supplement regional office capacity. In October 2001, VBA established

the Tiger Team at its Cleveland Regional Office to expedite decisions on

claims by veterans aged 70 and older and clear from the inventory claims

that have been pending for over a year. The Tiger Team relies on 17

experienced rating specialists, complemented by a staff of veterans service

representatives. The Tiger Team also relies on expedited access to

evidence needed to complete claims development. For example, VA and

the National Archives and Records Administration completed a

Memorandum of Understanding in October 2001 to expedite Tiger Team

requests for service records at the National Personnel Records Center

(NPRC) in St. Louis, Missouri. Also, VBA and the Veterans Health

Administration (VHA) established procedures and timeframes for

expediting Tiger Team requests for medical evidence and examinations.

As of the end of May 2002, the Tiger Team had completed about 10,000

claims requested from 49 regional offices. From December 2001 through

May 2002, the team’s production exceeded its goal of 1,328 decisions per

month. According to Tiger Team officials, its experienced rating

specialists were averaging about 4 completed ratings per day. Officials

added that in the short term, completing old claims might increase VBA’s
Page 14 GAO-02-412 Veterans Claims Assistance Act

average time to complete decisions. VBA also established nine Resource

Centers17 to supplement regional offices’ rating capacity. The Resource

Centers receive claims from nearby regional offices that are “ready to

rate,” but which are awaiting decisions. From October 2001 through May

2002, the Resource Centers had completed about 22,000 ratings. The Tiger

Team and Resource Centers are expected to complete 47,000 claim

decisions in fiscal year 2002; as of the end of May 2002, they had

completed about 32,000 decisions.

VBA’s ability to achieve this increase in production, and reduction in

inventory, depends on (1) increasing productivity of new claims

processing staff over the second half of fiscal year 2002 and (2) receipts

being consistent with projected levels. VBA’s monthly goals for fiscal year

2002 assume that its large number of new rating specialists will become

more productive, with additional experience and training, as the fiscal

year progresses. However, VBA lacks historical data on the productivity of

staff by experience level. Meanwhile, receipts of new claims must not

exceed VBA’s projections. VBA received about 359,000 rating-related

claims–-about 3,000 fewer than projected–-in the first half of fiscal year

2002. However, an unexpected surge in receipts could mean that, even if

VBA achieved its production goal for the fiscal year, it might not meet its

inventory goal. External factors beyond VBA’s control, such as the

decisions made by the U.S. Court of Appeals for Veterans Claims, could

affect VBA’s workload and its ability to make sustained improvements in

performance.

As stated in our April 2002 testimony, even if VBA meets its production

and inventory goals, it still faces challenges in meeting its 100-day goal.

Improving timeliness depends on more than increasing production and

reducing inventory. VBA continues to face some of the same challenges

that we identified in the past that can lengthen claims processing times.

For example, VBA needs to continue to make progress in reducing delays

in obtaining evidence, ensuring that it will have enough well-trained staff

in the long term, and implementing information systems to help improve

claims processing productivity.

 17 The Resource Centers are located at the regional offices in San Diego, California; St.

Petersburg, Florida; Togus, Maine; St. Louis, Missouri; Muskogee, Oklahoma; Philadelphia,

Pennsylvania; Columbia, South Carolina; Seattle, Washington; and Huntington, West

Virginia.
Page 15 GAO-02-412 Veterans Claims Assistance Act

Figure 1 shows that VBA will need to cut average processing time from 224

days to 100 days by the end of fiscal year 2003. This is less than half its

fiscal year 2002 goal and 65 days less than its fiscal year 2003 goal. VBA

officials noted that the link between increasing production and improving

timeliness is not clear. Thus, the officials could not show how meeting

VBA’s production and inventory goals would result in a specific level of

timeliness improvement. Given this uncertainty, it is possible that VBA

could meet its fiscal years 2002 and 2003 production and inventory goals

but not meet the 100-day goal.

Figure 1: Average Days to Complete Rating-Related Claims, Fiscal Years 1999 -

2003

Source: Veterans Benefits Administration data.

To its credit, VBA has taken a number of steps over the last year and a half

to provide guidance to its regional offices on the proper application of the

VCAA requirements for both new and pending veterans’ claims. However,

despite VBA’s efforts, results from VBA’s quality assurance reviews

Conclusions

Average days

0

25

50

75

100

125

150

175

200

225

Fiscal year

1999 2000 2001 2002

First half

2002 2003 2003

Last

quarter

166 173

181

224

208

165

100

Goals

Actual
Page 16 GAO-02-412 Veterans Claims Assistance Act

indicate a decrease in rating accuracy due to regional office

noncompliance with VCAA requirements. In an effort to improve rating

accuracy, VBA recently instructed regional office management to ensure

that all claims processing employees read and understand VCCA-related

guidance. But, VBA may need to do more than verify that claims

processors have read and understood the VBA guidance. In the past, we

have noted that VBA needs better analysis of case-specific data to identify

the root causes of claims processing problems and target corrective

actions. If VCAA-related accuracy problems continue, VBA will need to

determine the underlying causes for the improper implementation as part

of its continuing efforts to monitor proper implementation of the VCAA.

Without proper implementation of VCAA, some veterans may not receive

the benefits to which they are entitled by law.

If VBA continues to experience significant problems with implementing

the VCAA, we recommend that the Secretary of Veterans Affairs, direct the

Under Secretary for Benefits to identify the causes of the VCAA-related

errors so that more specific corrective actions can be taken.

We received written comments on a draft of this report from VA (see app.

I). In its comments, VA concurred with our recommendation that if VBA

continues to experience problems with implementing the VCAA, VBA

identify the causes of the VCAA-related errors so that more specific

corrective actions can be taken.

We will send copies of this report to the Secretary of the Department of

Veterans Affairs, appropriate congressional committees, and other

interested parties. We will also make copies available to others on request.

In addition, the report will be available at no charge on the GAO Web site

at http://www.gao.gov.

If you or your staff have any questions regarding this report, please call me

at (202) 512-7101 or Irene Chu, Assistant Director, at (202) 512-7102. In

Recommendation

Agency Comments

and Our Response
Page 17 GAO-02-412 Veterans Claims Assistance Act

addition to those named previously, Steve Morris, Corinna Nicolaou,

Martin Scire, and Greg Whitney made key contributions to this report.

Cynthia A. Bascetta, Director

Education, Workforce, and

 Income Security Issues
Appendix: Comments from the Department of

Veterans Affairs

Page 18 GAO-02-412 Veterans Claims Assistance Act

Appendix: Comments from the Department

of Veterans Affairs

(130080)
The General Accounting Office, the investigative arm of Congress, exists to

support Congress in meeting its constitutional responsibilities and to help

improve the performance and accountability of the federal government for the

American people. GAO examines the use of public funds; evaluates federal

programs and policies; and provides analyses, recommendations, and other

assistance to help Congress make informed oversight, policy, and funding

decisions. GAO’s commitment to good government is reflected in its core values

of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older

products. The Web site features a search engine to help you locate documents

using key words and phrases. You can print these documents in their entirety,

including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site

daily. The list contains links to the full-text document files. To have GAO e-mail

this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily

E-mail alert for newly released products” under the GAO Reports heading.

The first copy of each printed report is free. Additional copies are $2 each. A

check or money order should be made out to the Superintendent of Documents.

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a

single address are discounted 25 percent. Orders should be sent to:

U.S. General Accounting Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000

TDD: (202) 512-2537

Fax: (202) 512-6061

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800

U.S. General Accounting Office, 441 G Street NW, Room 7149

Washington, D.C. 20548

GAO’s Mission

Obtaining Copies of

GAO Reports and

Testimony

Order by Mail or Phone

To Report Fraud,

Waste, and Abuse in

Federal Programs

Public Affairs