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[Senate Hearing 113-168]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-168

 
        VA CLAIMS SYSTEM: REVIEW OF VA'S TRANSFORMATION PROGRESS 

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 11, 2013

                               __________

       Printed for the use of the Committee on Veterans' Affairs

         Available via the World Wide Web: http://www.fdsys.gov

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                          Washington, DC 20402-0001

                     COMMITTEE ON VETERANS' AFFAIRS

                 Bernard Sanders, (I) Vermont, Chairman
John D. Rockefeller IV, West         Richard Burr, North Carolina, 
    Virginia                             Ranking Member
Patty Murray, Washington             Johnny Isakson, Georgia
Sherrod Brown, Ohio                  Mike Johanns, Nebraska
Jon Tester, Montana                  Jerry Moran, Kansas
Mark Begich, Alaska                  John Boozman, Arkansas
Richard Blumenthal, Connecticut      Dean Heller, Nevada
Mazie Hirono, Hawaii
                    Steve Robertson, Staff Director
                 Lupe Wissel, Republican Staff Director

                            C O N T E N T S

                              ----------                              

                           December 11, 2013
                                SENATORS

                                                                   Page
Sanders, Hon. Bernard, Chairman, U.S. Senator from Vermont.......     1
Isakson, Hon. Johnny, U.S. Senator from Georgia..................     5
Murray, Hon. Patty, Chairman, U.S. Senator from Washington.......     6
Heller, Hon. Dean, U.S. Senator from Nevada......................     7
Brown, Hon. Sherrod, U.S. Senator from Ohio......................     8
Boozman, Hon. John, U.S. Senator from Arkansas...................     8
Begich, Hon. Mark, U.S. Senator from Alaska......................     9
Blumenthal, Hon. Richard, U.S. Senator from Connecticut..........    10
Burr, Hon. Richard, Ranking Member, U.S. Senator from North 
  Carolina.......................................................    26

                               WITNESSES

Hickey, Hon. Allison A., Under Secretary for Benefits, U.S. 
  Department of Veterans Affairs; accompanied by Diana M. Rubens, 
  Associate Deputy Under Secretary for Field Operations, Veterans 
  Benefits Administration; Brad Houston, Director, Office of 
  Business Process Integration, Veterans Benefits Administration; 
  and Richard Hipolit, Assistant General Counsel, Office of 
  General Counsel................................................    11
    Prepared statement...........................................    14
    Response to prehearing questions submitted by Hon. Richard 
      Burr.......................................................    20
    Response to posthearing questions submitted by Hon. Bernard 
      Sanders....................................................    23
    Response to request arising during the hearing by Hon. 
      Richard Burr                                                28,29

                                APPENDIX

Paralyzed Veterans of America; prepared statement................    43

        VA CLAIMS SYSTEM: REVIEW OF VA'S TRANSFORMATION PROGRESS

                              ----------                              

                      WEDNESDAY, DECEMBER 11, 2013

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
room 418, Russell Senate Office Building, Hon. Bernard Sanders, 
Chairman of the Committee, presiding.
    Present: Senators Sanders, Murray, Brown, Begich, 
Blumenthal, Burr, Isakson, Boozman, and Heller.

          OPENING STATEMENT OF HON. BERNARD SANDERS, 
              CHAIRMAN, U.S. SENATOR FROM VERMONT

    Chairman Sanders. Good morning. Thanks, everybody, for 
coming to what I believe will be a very informative and 
important hearing on an issue that is of concern to veterans 
all over this country and to every Member of this Committee.
    Today, we are going to continue our oversight of VA's 
efforts to transform the claims system. As members will recall, 
earlier this year this Committee met to discuss one of the 
major challenges confronting VA, the claims backlog.
    I think all of us have heard from veterans who are deeply 
concerned about the backlog. It is a concern to the Veterans 
Service Organizations, I know it is a concern to every Member 
of this Committee, and I suspect every member of the Senate.
    The origin of this problem goes back a number of years. It 
has everything, in my view, to do with the reality that, until 
2008--and maybe at some point General Hickey can give me some 
clues about this--for whatever reason, there was no serious 
effort on the part of VA to do what every other major 
corporation and government agency in this country had done, and 
that is, move from the world of paper to electronics.
    I do not quite understand, given the enormous amount of 
paper facing VA historically, why it took so long for them to 
do that. Nonetheless, that was the case.
    Furthermore, VA has also had to deal with a staggering 
number of new claims, tragically, for veterans who served in 
Afghanistan and Iraq. On top of that, VA--I think 
appropriately--made sure that veterans who were impacted by 
Agent Orange in Vietnam also got the benefits to which they 
were determined to be eligible for. So, that is a lot of stuff 
coming in.
    Nonetheless, this Committee, at our hearing in mid-March, 
despite all of these factors, heard about the unacceptably 
large number of claims that were pending and the numerous 
challenges confronting VA. It is my view, and I believe it is 
the view of every Member of this Committee, that no veteran in 
our country should have to wait years to have his or her claim 
adjudicated. It is a disgrace and that is an issue that must be 
dealt with.
    Today, as I understand it, VA is going to give us some good 
news, welcome news, about significant progress made in this 
area. When we last met in March to discuss this issue, there 
were over 896,000 claims in the inventory. Of that number, more 
than 632,000 or 70 percent were backlogged or pending longer 
than VA's goal of 125 days. That is a staggering number.
    Today, as I understand it, those numbers look much 
different and, in fact, are much improved. The number of claims 
pending longer than 125 days, or officially part of the 
backlog, has dropped to just over 395,000 claims or 57 percent 
of the total inventory. That is still a large number but is a 
significant improvement. The total number of pending claims has 
dropped to its lowest level since July 2012 at slightly less 
than 694,000 claims.
    Let me be clear--and I think we can all agree on this--many 
challenges remain. This Committee will touch on some of those 
challenges and I will deal with them in my statement this 
morning.
    We must, however, begin today by acknowledging the progress 
we have seen since we last met in March. I want to thank 
General Hickey and her staff and maybe most importantly, the 
hundreds and thousands of hard-working folks at VA all over 
this country who have put their shoulder to the wheel to see 
the improvements that we are going to be talking about today. 
So, I want to thank VA for those improvements.
    For the fourth year in a row, VA has processed more than 
one million claims. This is no small feat given the sheer size 
of the transformation the Department is undertaking.
    VA is moving to an electronic claims processing system and 
VBMS, which is a major component of that system, has been 
deployed to every regional office, as I understand it, ahead of 
schedule.
    The Department has implemented a new organizational model 
changing the way in which it processes claims, and it continues 
to build upon efforts to improve employee training and address 
underperforming regional offices. I believe this Committee has 
worked in a productive and bi-partisan manner to support VA's 
efforts while also holding it accountable for meeting its 
ambitious claims processing goals. I have said this before and 
I say it again.
    I applaud General Shinseki, Secretary of VA, for having the 
courage to do what I think very few public officials do. He put 
in black and white a goal, so there is no ambiguity attached to 
it. He said that he wants to see all claims processed within 
125 days at 98 percent accuracy by 2015.
    So, he has put VA out on a line on this issue, and we will 
be talking with General Hickey and the others today to see, in 
fact, whether they are on schedule to achieve that goal. That 
is very clearly an extremely ambitious goal.
    Following the March hearing, I was joined by all of my 
colleagues on this Committee in asking for DOD's, the 
Department of Defense's, continued commitment to help VA 
eliminate the backlog. That is a huge issue, and we have got to 
move forward on this.
    This Committee continues to closely monitor, and when 
necessary, encourage greater cooperation between the 
Departments because at the end of the day this problem is not 
going to be solved until there is greater cooperation.
    Members from both sides of the aisle have presented 
legislative ideas to address these problems. I am confident a 
number of these ideas, including significant portions of the 
Claims Processing Improvement Act that I introduced earlier 
this year, will pass the Senate this week as part of a 
veteran's omnibus bill. So, we are making some legislative 
progress in this area.
    This Committee also continues to conduct aggressive 
oversight of VA's transformation efforts, in part through 
hearings like this one, in order to hold VA accountable for 
meeting its ambitious claims processing goals.
    Despite the very good progress that I think we are going to 
hear about today, we all know--I do not think there is any 
debate on this--that VA is not yet where it needs to be in 
addressing the very serious problem of the backlog issue.
    Veterans are still waiting too long for a decision and the 
Inspector General continues to find issues with the quality of 
the work.
    I am concerned by the most recent IG findings, which found 
significant problems with provisional rating decisions reviewed 
at the Los Angeles Regional Office, and this is an issue we 
will want to discuss this morning.
    During Committee oversight, my staff has identified clear 
and unmistakable errors in provisional rating decisions. I am 
pleased to hear VA is taking action to remedy the problems 
identified by the IG.
    However, this should have been done immediately upon 
recognition of the problem at the local level; and here I think 
is the important point that I want to make.
    Reducing the backlog at the expense of accuracy is not 
acceptable. Our goal is to move forward rapidly to make sure 
that this backlog goes down but we will not do it at the 
expense of accuracy.
    This Committee will continue to examine the oldest claims 
first initiative and the issuance of provisional rating 
decisions. This is an enormously important issue.
    The Committee's oversight efforts will also continue to 
focus on other components of transformation to ensure VA is 
providing timely and accurate decisions.
    For example, VA still has a long way to go in creating a 
truly electronic claims processing system, a system that does 
not rely on the scanning of millions of pieces of paper.
    VA must also ensure that, as it transitions to a Web-based 
system, it does not inadvertently disadvantage certain 
populations of claimants, such as elderly veterans or those 
veterans living in rural areas, with limited internet access. A 
very important issue in States like Vermont.
    Finally, VA must do more to address other work pending at 
the ROs, regional offices, such as appeals and award 
adjustments. Despite the significant reduction in claims 
measured as part of the backlog, other pending work has 
continued to climb since our last hearing on this issue.
    Finally, let me touch on a few areas that I believe VA 
needs to focus on in its efforts to transform the claims 
system. VA must focus on the appellate process. This is a large 
part of the claims system, and it is not receiving, in my view, 
the attention that it deserves.
    General Hickey, I know VA has been piloting a number of 
ideas in the Houston Regional Office, but I think we need some 
increased leadership attention on these efforts in order to 
ensure real progress is being made on appeals.
    In that regard, the numbers are not good. According to VA's 
Performance and Accountability Report, last year it took on 
average 866 days, as I understand it, to provide a final 
decision on an appeal.
    Let me repeat that. Veterans were waiting on average 866 
days for a final decision on an appeal. This is why providing 
an accurate initial decision, by the way, is so important, so 
we do not have to go through the appeals process.
    General Hickey, I am requesting of you today to get back to 
us as soon as you possibly can, certainly if you can by the end 
of January, with how you plan to improve the processing of the 
appellate workload at the ROs.
    In 2009, VA began an effort to revise and update VA's 
rating schedule which is an enormously complicated process, and 
I know and I think we are all aware that this is painstaking 
work, but I am concerned about the progress of this effort.
    In the fall of 2012, the GAO provided a comprehensive 
review of this effort and the associated challenges. The rating 
schedule is the foundation of the claims system and any future 
updates will impact every piece of transformation from the 
rules based calculators to employee training. VA will need to 
spend significant time and energy reprogramming computers, 
modifying forms and ensuring employees are properly trained on 
the updated schedule.
    As VA moves forward with this update, it must plan 
accordingly. Too often in the past, the Department was not 
prepared to cope with major changes to the claims system and 
that failure resulted in negative experiences for veterans. Let 
us not see history repeat itself in that area.
    Finally, VA needs to continue to demonstrate with data and 
hard facts how transformation will ultimately improve the 
veteran experience and result in more timely and accurate 
decisions.
    In closing, let me say this. I am pleased by the fact that 
VA has taken very seriously the claims backlog. General Hickey 
and her staff are working very, very hard to address this 
problem. It is very clear that significant progress has been 
made, and we appreciate that very much. But it is also clear 
that a whole lot of important work remains to be done.
    So, we appreciative that General Hickey is with us today. 
We are going to begin speaking with her in a moment.
    First, Senator Burr is not yet here and Senator Isakson 
will be acting as ranking member.
    Senator Isakson.

               STATEMENT OF HON. JOHNNY ISAKSON, 
                   U.S. SENATOR FROM GEORGIA

    Senator Isakson. Thank you, Mr. Chairman. I would like to 
welcome the members of VA for sharing their testimony today. We 
appreciate them coming.
    As we will hear today, VA has taken a number of steps to 
try to improve its handling of disability claims and, in recent 
months, the backlog has started to decline. Although any true 
progress is welcome, I think there are still many reasons for 
concern.
    To start with, nearly 700,000 veterans and their families 
do not yet have an answer to their requests for benefits, and 
they can expect to wait at least 9 months for a decision. Also, 
we continue to hear from veterans' groups about how often VA 
makes mistakes in the processing disability claims.
    In fact, The American Legion recently testified that it 
found errors in over half of the decisions that it reviewed 
last year. This is of real concern to me and to every Member of 
the Committee because it can take years for a veteran to 
correct those errors through VA's appeal process.
    Today, more than a quarter of a million appeals are waiting 
to be resolved. This number has been trending upward, not 
downward. The work has also been piling up, such as claims, for 
accrued benefits, responses to incoming mail, and adjustments 
to monthly checks based on how many dependents a veteran is 
claiming.
    The number of dependency adjustments waiting for VA 
decision has tripled in just over 2 years, and what VA calls 
the ``correspondence'' has grown nearly five times since last 
year.
    All of this raises questions about VA and its 
prioritization work that is not counting the backlog statistic.
    Mr. Chairman, I want to follow up on your comments with 
regard to provision problems that we have seen. As you know, 
the Committee asked the Inspector General to review the 
provisional initiative to make sure claimants would receive 
appropriate, quality decisions without any unnecessary hurdles.
    Although that review is not finished, the Inspector General 
testified last week that it found 10 errors out of 11 
provisional decisions at one regional office.
    In fact, it appears that the employees were encouraged to 
violate VA policy by making provisional decisions without first 
obtaining necessary medical examinations. That office has now 
reviewed all of its provisional decisions and found hundreds 
that contained errors.
    Mr. Chairman, all of this suggests that more must be done 
to make sure VA's efforts to reduce the backlog will not cause 
veterans and their families more delays or more frustrations 
down the road.
    VA must be held accountable for making real, lasting 
improvements in the services provided to those seeking benefits 
from VA which they have earned. I look forward to working with 
you and the rest of the Committee to ensure that happens.
    I thank the Chairman.
    Chairman Sanders. Thank you, Senator Isakson.
    Senator Murray.

                STATEMENT OF HON. PATTY MURRAY, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Murray. Thank you very much, Mr. Chairman. I really 
do appreciate your holding this hearing.
    Ending this claims backlog and building a timely, accurate 
claims processing system is one of the absolute top priorities 
for our veterans. I continue to hear frequently from veterans 
in my homestate of Washington that they are still waiting far 
too long for their claims to be completed. I know that getting 
this right is a top priority for the Department and I 
understand this is a very complex problem that has no single, 
easy solution.
    So, I am encouraged by the steps VA has taken so far, but 
we have a very long way to go.
    VA's initiative to expedite the oldest claims was a good 
step. However, I have heard repeatedly from veterans that they 
were confused and frustrated with the provisional rating 
process. Some believe their claims have been flat out rejected 
and others did not understand that they had a year to submit 
additional evidence.
    Under Secretary Hickey, we need to hear more from you today 
about how VA is going to improve outreach and communication 
with veterans so that future initiatives do not cause so much 
confusion on the ground.
    While the numbers are moving in the right direction, we 
need to know that the necessary structural changes, as the 
Chairman referenced, are being made as well. This is especially 
important in handling the more complex claims.
    The recent testimony by the office of the Inspector General 
shows some of the examples of these problems. It is not 
surprising these claims take longer to rate. These are also 
claims for veterans who need their benefits the most and we 
need to keep that in mind.
    So, as VA continues to work to bring the backlog down, we 
cannot prevent them from doing their jobs either. That means 
keeping the government open. The entirely unnecessary shutdown 
of the government forced us into some very bad circumstances 
earlier this year. VA had to furlough 7,800 the VBA employees. 
They ended mandatory overtime for our claims processors; and as 
Secretary Shinseki testified, it decreased claims production by 
an average of 1,400 claims every day.
    So all of you know, Chairman Ryan and I announced our 
budget agreement last night. I cannot stress enough how 
important it is for everyone to help us pass this agreement so 
that we can get away from governing by crisis and presenting 
another government shutdown in January and protecting our 
veterans as we did in the past from serious harm that we saw in 
October.
    So, I look forward to continuing to work with all of our 
colleagues, with you, Under Secretary Hickey, and meeting the 
challenges that we have.
    Mr. Chairman, thank you for having this really critical 
hearing.
    Chairman Sanders. Well, Senator Murray, thank you and thank 
you for your work on the budget process.
    Senator Heller.

                STATEMENT OF HON. DEAN HELLER, 
                    U.S. SENATOR FROM NEVADA

    Senator Heller. Mr. Chairman, thank you and to the Ranking 
Member, thank you also for holding this hearing.
    An issue that I do not think is lost on anybody is about 
the critical mission facing the Veterans Benefits 
Administration. I think every person in this room knows the 
seriousness of this problem, but I specifically want to 
underscore how this is affecting veterans in Nevada.
    4,000 veterans in Reno, Las Vegas, and across Nevada are 
waiting for VA target deadline of 125 days for their claim to 
be completed. They are waiting more than 125 days. On average, 
veterans wait 436 days to have their claims completed, which is 
the longest wait of any regional office in the Nation. I think 
we can all agree that this is unacceptable.
    I know for a fact that, Under Secretary Hickey, you are 
committed to fixing this issue, and I appreciate you 
recognizing the gravity of this problem. I want to thank you 
personally for your staff working with mine in trying to look 
for better ways to handling these issues.
    I also want to thank you for working with Senator Brown's 
staff also as we try to come together with ideas to see if we 
can bring this problem to an end.
    It is important to me and my constituents to bring this one 
particular story to your attention. A Las Vegas veteran wrote 
me recently, ``I am just one more disabled veteran still 
fighting the appeals process with the VA. I understand now that 
no one is going to expedite my appeal, and I will probably die 
before I get any successful resolution. But there are a huge 
number of vets just like me and some in worse shape. None of us 
deserve to be put on hold forever.''
    Frustration. That is what this veteran and veterans across 
the Nation are feeling. I, as well as my colleagues, want this 
to be fixed for the good of our veterans. There is no doubt 
about that, and I am proud to have teamed up with some of my 
colleagues to thoroughly examine the claims process front to 
back and from every perspective.
    The reality is that VA has a 1945 process. This outdated 
process no longer makes sense for VA nor for the veteran. 
Looking back at two decades of VA backlog, I have found that VA 
has always fixed the problem with short-term solutions rather 
than asking the difficult question of whether the entire 
process needs to be updated.
    VA needs a 21st-century benefit delivery system for our 
Nation's veterans but there is not going to be one silver 
bullet, I think we can all agree, that solves this particular 
problem.
    It is going to take multiple proposals that address 
multiple aspects of the claims process for us to really reach a 
resolution but that means it is time for all stakeholders to 
open up about what needs to be fixed and how to fix it.
    VA has a role to play. Veterans Service Organizations and 
the Congress have a role to play. Even the veterans themselves 
have a part to play in resolving this. It no longer makes sense 
to point fingers and to place blame as we have for quite 
sometime now. Instead, Congress needs to meet and give VA and 
the regional offices the tools and resources they need to bring 
the backlog down but this cannot be done without an open, frank 
discussion about what is working and what is not.
    Congress needs to work together with VA and the VSOs to 
solve this problem and solve it permanently so that this 
Committee is not back here in a few years having the same 
discussion.
    I know the Chairman and Ranking Member are committed to 
that and I will be reaching out to them with solutions or about 
solutions that I have identified.
    Our Nation owes it to veterans to resolve this problem and 
together keep our promises to care for them when they return 
home from war.
    Thank you again, Under Secretary Hickey, for being here to 
testify. I want to thank everybody on the panel today for 
taking time for being here. I look forward to hearing about the 
progress VA has made in working with you, the VSOs, and the 
veterans, of course, to end this backlog.
    Thank you.
    Chairman Sanders. Thank you, Senator Heller.
    Senator Brown.

               STATEMENT OF HON. SHERROD BROWN, 
                     U.S. SENATOR FROM OHIO

    Senator Brown. Thank you, Mr. Chairman, I will be very 
brief.
    General, thank you for joining us. It is good to see you 
again and I appreciate your public service as well as all of 
the panel.
    I appreciate the VBA transformation plan. I think the 
results you outlined in your testimony are admirable and 
important and positive. I echo Senator Heller and others on 
this Committee that this has obviously got to improve. You know 
that. We will not lecture you on that.
    I will bring up in the question period something that I 
still do not quite understand. The average claim has been 
pending, according to VA's Monday Morning Report this week, the 
average claim nationally is 167 days.
    In Cleveland it is 208 days. It has persistently been the 
highest second-highest, or third-highest in the country. We 
have not really had good answers for that. I guess I want to 
know less about why than will it be fixed.
    167 days, obviously, is way too long. Another 40 days on 
top of that is something that we need to work on. So, I 
appreciate the work you are doing and look forward to figuring 
this out.
    Thank you.
    Chairman Sanders. Thank you, Senator Brown.
    Senator Boozman.

                STATEMENT OF HON. JOHN BOOZMAN, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Chairman and Ranking Member 
Burr, for having this hearing. In the interest of time, let us 
move on and I look forward to hearing the testimony of the 
panel.
    Chairman Sanders. Thank you very much.
    Senator Begich.

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you very much, Mr. Chairman. I 
apologize that I will not be able to stay that long but I do 
want to make a few comments.
    Under Secretary Hickey, thank you and I thank VA for the 
improvements. I know there have been, since I have been here, 
back and forth and you have suffered through many meetings here 
on this side as well as the other side.
    I do want to say at least in the Alaska region things are 
improving and we want to recognize that and give you credit for 
that plus the hard work I know the employees there are doing. 
They are under a lot of stress and I know when the shutdown 
occurred it added more.
    So, I appreciate the work you are doing, but I just want to 
highlight for the record and also to give you a sense that even 
though we are making improvements there are still some 
challenges; and give you some specific cases that in a lot of 
ways it is easy to find the specific cases because our office 
usually gets those calls very quickly. I will give you just a 
couple that I want to kind of bring to your attention.
    For example, one vet that came in who was 100 percent 
disabled under SSDI but only 20 percent under VA because of 
their coding process, the VA's coding process, had not been 
completed or updated to address the artificial discs 
replacement in his back. A simple little thing, yet pretty 
significant for that individual who was trying just to get 
something done.
    Or in the situation--because they contacted us and we moved 
very quickly--the vet and his wife who literally cried on the 
phone when they got their permanent total disability claim 
reviewed and approved literally overnight, and the reason was 
because the PTD finding allowed enrollment for the CHAMPVA 
allowing his wife to be able to enroll so she could get the 
necessary insurance for brain cancer that she was dealing with 
and was able to ensure that she was no longer at risk or at 
least limited risk of disability.
    Or the vet who was found 100 percent disabled with a mental 
health condition who was living in a six-by-eight room without 
windows in a basement before we got his claim expedited and 
approved.
    Then the vet who was waiting a year to get adjustments to 
their pension for adding a dependent, that is, that they got 
married.
    The vet whose lung cancer is attributable to Agent Orange 
exposure but the COPD attributable to the lung cancer is not 
considered service-connected.
    Why I bring those up is because we then work at the 
constituent end in trying to solve these problems. The way we 
will judge the success and I will judge success of what work 
you are doing is when we are not making these calls because 
they are being processed without having us to make those calls.
    Those examples are sometimes extreme but real and it really 
puts a face on these individuals where sometimes we are in 
these meetings and we talk a lot about data and statistics and 
days and so forth. But really when it boils down to it, they 
are individuals who are experiencing in their life the most 
important thing or could be the most extreme situation.
    So, I do want to echo the concern we have in trying to get 
these numbers down and the timeline, but also I want to credit 
your folks for the improvement over the last 4 or 5 years and 
the priority you have placed on this.
    We know it is not just VA. We know DOD is part of this 
equation, and you have been partnered or your agency as well as 
DOD have had several meetings where we have put some pressure 
on them. It may have been in this Committee or in the 
Appropriations Committee, trying to get this moving forward 
because it is not just on your back but predominantly and 
significantly you have a huge role once it is in your hands.
    So, I again want to commend you for the work but also 
recognize that there is still a lot more to do I appreciate 
your giving me a chance to talk about these Alaskans who 
everyday, you know--it is probably the largest input we get, 
from veterans contacting us about their concerns and obviously 
disability claims is one of those.
    So, I thank you. I apologize that I will not be able to be 
here for the questions and the testimony but I know our staff 
is working aggressively with you. And again, your Alaska team 
is working double-time and we know that and we are going to 
keep some pressure on them, as you can imagine.
    So, thank you very much.
    Chairman Sanders. Thank you Senator Begich.
    Senator Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
for having this hearing.
    First of all, General Hickey, thank you for the work that 
you and VA are doing. I know that General Shinseki is 
personally committed to eliminating the backlog.
    I met with him, in fact, in Connecticut and had an 
opportunity to talk to him about this subject. So, nothing we 
say here is to imply that this backlog is the result of any 
sort of malevolence or personal animus on the part of anybody 
at VA. We are all grappling with a common challenge here but 
there is still a lot of work to be done to reach the goal of 98 
percent accuracy and an end to the backlog by 2015.
    Just a few quick points. Accuracy is important. We do not 
want to sacrifice accuracy for the sake of eliminating the 
backlog because accuracy is itself a source of problems if it 
is ignored. So, I cannot emphasize strongly enough how timing 
and deadlines are important but accuracy matters to the person 
on the ground.
    To take one example, Michael Scovetta, a veteran who served 
our country in Iraq and Afghanistan, was denied his application 
after a 2-year wait; and he has now been waiting a full year 
for his appeal. Obviously, the 2-year wait was regrettable but 
the potential inaccuracy of his denial is also important.
    I want to thank Senator Murray for her work to avoid 
another shutdown because in another case the shutdown itself 
aggravated the timing issue. Jordan Massa, an Iraq and 
Afghanistan veteran who received a Purple Heart, had to wait 
for 2 years for his application to be approved but then waited 
another month due to the government shut down.
    So, the point here is that different issues, challenges, 
problems are interconnected and interrelated. Just to finish on 
this point of talking about interrelated problems, electronic 
medical records.
    The Chairman has mentioned it in his opening remarks. I 
have talked about it, I think, almost every opportunity in this 
room at every hearing, and I want to commend VA for its 
willingness to move forward, its interest in resolving these 
issues.
    I again express regret that the Department of Defense 
apparently has been less cooperative than VA, but one way or 
the other this problem has to get solved so that these records 
are truly interoperable, so that the system is seamless.
    There is no reason for someone leaving active duty as a 
member of our United States military and then becoming ``a 
veteran,'' should not have been the benefit of completely 
seamless electronic medical records. And I am going to pursue 
legislation.
    I know the Chairman has expressed his concern and other 
Members of the Committee are committed as well.
    So, thank you for your work on this issue. As much as we 
seem critical, and we are, we are also supportive because we 
have a common goal.
    Thank you, Mr. Chairman.
    Chairman Sanders. Thank you, Senator Blumenthal.
    I would now like to welcome General Allison Hickey, the 
Undersecretary for Benefits at VA.
    General Hickey, thank you for joining us today to address 
the Department's progress in eliminating the claims backlog and 
what you are going to do to address the remaining very serious 
problems.
    We are interested in an update on the transformation 
currently underway and the successes and challenges presented 
by this effort.
    General Hickey is accompanied by Diana Rubens, the 
Associate Deputy Under Secretary for Field Operations; Brad 
Houston, the Director of VBA's Office of Business Process 
Integration; and Richard Hipolit, an Assistant General Counsel 
in VA's Office of General Counsel.
    We thank you all very much for being here.
    General Hickey, please begin.

   STATEMENT OF HON. ALLISON A. HICKEY, UNDER SECRETARY FOR 
 BENEFITS, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 
  DIANA M. RUBENS, ASSOCIATE DEPUTY UNDER SECRETARY FOR FIELD 
  OPERATIONS, VETERANS BENEFITS ADMINISTRATION; BRAD HOUSTON, 
  DIRECTOR, OFFICE OF BUSINESS PROCESS INTEGRATION, VETERANS 
BENEFITS ADMINISTRATION; AND RICHARD HIPOLIT, ASSISTANT GENERAL 
               COUNSEL, OFFICE OF GENERAL COUNSEL

    Ms. Hickey. Thank you. Good morning, Chairman Sanders, 
Ranking Member Burr, and Members of the Committee. Thank you 
for the opportunity to update you on the Veterans Benefits 
Administration's transformation efforts and progress we have 
made to date.
    In recent months, VA has made significant progress in 
executing our Benefit Claims Transformation Plan. We reduced 
the backlog impacting our veterans by approximately 36 percent 
since March of this year, and we expect these reductions to 
continue over the next year.
    More importantly, while our employees have increased their 
productivity, they have also increased the quality of their 
work at the same time.
    In June 2011, when I arrived, our average for claims 
accuracy was approximately 83 percent; as of the end of 
November 2013, the number was approximately 90 percent at the 
claim level. When measuring accuracy at the medical issue 
level, which is a more precise measure of VA's quality, our 
rating accuracy today stands at nearly 97 percent. So, in other 
words, we have done more and better for our veterans, their 
families, and survivors.
    That said, we continue to push closer to the Secretary's 
goal of completing our veterans claims in 125 days at 98 
percent accuracy in 2015. Our veterans deserve no less from us.
    None of this progress would be possible were it not for the 
tremendous support VA receives from its partners. This 
Committee and the Congress's sustained support for VBA's budget 
and legislative requirements over the last 4 years has fostered 
significant headway for implementation of our plan and enabled 
VBA to complete a record one million claims for 4 consecutive 
years.
    Our Veterans Service Organizations and labor partners and 
those at the Federal, State, and local level have worked in 
close collaboration with us throughout this transformation to 
roll out new initiatives and provide the best possible service 
to our veterans, their family members, and survivors.
    Our progress would not be possible without the support of 
our partners in VA Office of Information and Technology who 
continue to work tirelessly to deliver new capabilities to 
improve productivity and workload management; our Veterans 
Health Administration partners who co-located physicians within 
our regional office workforce to provide on-site support for 
medical opinions and expedited claim examination at 
unprecedented levels; our IRS and Social Security partners who 
now provide us data every week; and our DOD partners who are 
collaborating more and more to deliver the new gold standard 
service treatment and personnel records and other capabilities.
    Finally, but most importantly, this progress would not be 
possible without the exceptionally committed tremendous effort 
and dedication of VBA's employees--52 percent of these are 
veterans themselves; the majority of others are direct family 
members of a veteran.
    They have each worked tirelessly in mandatory overtime for 
the last 8 months serving veterans, their families, and 
survivors by working an additional 20 hours every month for 
those 8 months. Many employees continue to work overtime in 
voluntary status even now.
    Let me highlight some key outcome statistics as of December 
7 that show our progress: inventory, down from a peak of 
884,000 to 693,000 or 191,000 claims down, 22 percent reduced; 
backlog, down from a peak of 611,000 in March 2013 to 395,000, 
a decrease of 216,000 or 36 percent. Nearly one-third of the 
backlog is gone.
    Claim level accuracy increased from approximately 83 
percent in 2011 to 90 percent today.
    Medical issue accuracy is approximate 97 percent today. We 
cut our B2, or exam errors, by 50 percent across the Nation by 
focusing on them hard this year. We trained over 3,500 
employees through the new challenge training where they rate 
claims 150 percent faster and are 30 percent more accurate at 
the end of the training.
    We have completed more than 45,000 reviews by our quality 
review teams to catch errors earlier in the process before a 
final outcome for the veteran, avoiding those errors in the 
outcomes.
    We have completed 1.17 million claims in fiscal year 2013, 
an all-time historic high for VBA and 4 months of record-
breaking production.
    We completed 99.9 percent of all claims older than 2 years; 
67,000 veterans waiting the longest now have a quality 
decision. We completed over 96 percent of all claims in the 1-
year-old category from 513,000 veterans in April of this year 
to approximately 18,000 that remain.
    We have already completed 61 percent of all claims older 
than 334 days, our next tranche. We will continue to drive the 
age of these claims down until we hit 125 and, and 98 percent 
quality in 2015.
    You can see it for yourself in our Monday Morning Workload 
Report where our pending workload today is, on average, 100 
days younger than it was this time last year.
    We have also fully implemented one of our people 
initiatives, our new Transformational Organizational Model in 
all 56 regional offices 9 months ahead of schedule and are 
seeing a 10 percent increase in production as we predicted in 
the plan.
    We built the Stakeholder Enterprise Portal and granted 
1,148 credentials to our VSO partners, representing over 75 
organizations. We are currently building and testing the 
capability to connect digit-to-digits with their electronic 
claims submission systems, as well.
    We grew our fully-develop claims receipts from 3 to 27 
percent since February because of our great partnerships with 
our VSOs. We are even seeing some VSOs take the fully develop 
claims issue to new levels providing even the Federal records 
and exams completed in a disability benefit questionnaire, or 
DBQ, making these claims ready to rate.
    We have VHA physicians in our regional offices now 
providing just-in-time medical opinions, DBQs, acceptable 
clinical evidence or ACE exams, and simple time-saving, quick 
on-the-spot answers to raters who need clarification.
    We have supported over 3.2 million active accounts in 
eBenefits up from 250,000 in June 2011 and now eBenefits hosts 
50 self-service features including over the last year the 
ability to file a claim online, upload your own evidence, and 
submit your claim directly into a VBMS. When I last spoke to 
you, we had received a total of 1,500 claims this way. Today, 
we receive 1,000 a week this way.
    We deployed VBMS to every regional office, medical center, 
records management center, appeals management center a full 6 
months ahead of schedule. Under the original VBMS 
transformation plan, we would still be delivering VBMS to 
regional offices for the first time this month.
    Instead, we have more than 25,000 users and have converted 
more than 360 million images from paper into digital format at 
a 99 percent quality level.
    We have created or converted 75 percent of our current 
claims in the inventory into the digital format for processing 
electronically in the new VBMS system.
    We have established the Newark Regional Office as a model 
for an electronic regional office or eRO, to test and validate 
the changes associated with converting to a completely 
paperless operation so we see no surprises.
    Despite these recent outcome metrics and success, please 
know this, Mr. Chairman and Members of this Committee, we still 
recognize that many veterans wait too long to receive the 
benefits that they have earned and deserved. This has never 
been acceptable to VA and it remains unacceptable to VA.
    No one in VBA is ``taking a knee'' as we would have said in 
our military careers and the combined effects of our 
transformation plan are having a positive impact for many of 
our veterans, their families, and survivors.
    I thank this Committee for your continued support 
especially as we move into our crucial fiscal year--2014.
    [The prepared statement of Ms. Hickey follows:]
Prepared Statement of Allison A. Hickey, Under Secretary for Benefits, 
  Veterans Benefits Administration (VBA), U.S. Department of Veterans 
                              Affairs (VA)
    Good morning, Chairman Sanders, Ranking Member Burr, and Members of 
the Committee. Thank you for the opportunity to discuss VA's benefits 
claims processing transformation efforts. I am accompanied today by 
Richard Hipolit, Assistant General Counsel, Brad Houston, Director of 
VBA's Office of Business Process Integration, and Diana Rubens, VBA's 
Deputy Under Secretary for Field Operations.
    In recent months, VA has made significant progress in executing our 
benefit claims Transformation Plan. We reduced the backlog by 
approximately 36 percent since March of this year, and we expect these 
reductions to continue over the next year. More importantly, while 
increasing our productivity, we have also increased the quality of our 
work. In June 2011, when I arrived, our average for claims accuracy was 
approximately 83 percent; as of the end of November 2013, that number 
was approximately 90 percent. When measuring accuracy at the medical 
issue level--which is a more precise measure of VA's workload--our 
rating accuracy today stands at 97 percent. My testimony today will 
focus on how execution of our Transformation Plan has decreased the 
backlog and increased quality, resulting in better service to the 
Veteran community and pushing us closer to the Secretary's goal of all 
claims completed in 125 days at 98-percent accuracy in 2015.
    None of this progress would be possible were it not for the 
tremendous support VA receives from its partners. The direct support of 
this Committee and the Congress has helped us make significant headway 
on our Transformation Plan and enabled us to complete a record-breaking 
1 million claims for 4 consecutive years. Our Veterans Service 
Organization (VSO) partners have worked in close collaboration with us 
throughout this transformation to roll out new initiatives and provide 
the best service possible to our Veterans, their family members, and 
Survivors. Our State Departments of Veterans Affairs partners across 
the country have helped us reduce the backlog at a local level by 
contributing resources to innovative Federal/state solutions. Our 
progress would not be possible without the support of our partners in 
the VA Office of Information and Technology, who continue to work 
tirelessly to deliver new capabilities to improve productivity and 
workload management, and our Veterans Health Administration (VHA) 
partners, who co-located physicians with our regional office workforce 
to provide onsite support for medical opinions and expedited claim 
examinations at unprecedented levels. Finally, this progress would not 
be possible without the tremendous effort and dedication of VBA's 
claims processing employees, who worked mandatory overtime for 6 months 
straight on this important mission.
       vba transformation plan: results through november 30, 2013
    Here are some key statistics that show our progress:

     Inventory: Down from peak of 884,000 in July 2012 to 
693,000--a decrease of 191,000 or 22 percent
     Backlog: Down from peak of 611,000 in March 2013 to 
392,000--a decrease of 219,000 or 36 percent
     ``1-Year Claims'' Initiative: Approximately 96 percent 
complete from 513,000 in April 2013 to 20,000
     Claim-Level Accuracy (12-month): Increased from 
approximately 83 percent in 2011 to 90 percent today
     Medical-Issue Accuracy (3-month): Approximately 97 percent
     Completed 1.17 million claims in Fiscal Year (FY) 2013--an 
all-time high Completed 128,000 claims in August and 129,000 in 
September--an all-time high
     Recognized the 1 millionth GI Bill recipient in 
November 2013; approximately 82 percent of supplemental claims are now 
either fully or partially automated
     Granted 1,148 credentials to VSOs to use Stakeholder 
Enterprise Portal
     Approximately 75 percent of current claims in the 
inventory are in digital format for processing electronically within 
the Veterans Benefits Management System
     Converted more than 360 million images from paper into 
digital format
     Supporting over 3.2 million active accounts in eBenefits

    Despite these recent successes, many Veterans still wait too long 
to receive benefits they have earned and deserve. This has never been 
acceptable to VA or to the dedicated employees of VBA--approximately 52 
percent of whom are Veterans themselves. As this Committee knows from 
our previous discussions, VA's Transformation Plan includes initiatives 
to re-train and reorganize our people, streamline our business 
processes, and build and implement new technology solutions that are 
getting us out of paper-bound, manual processes to improve our service 
to Veterans, their families, and Survivors. There is no silver bullet 
in this Transformation Plan; the results being reported today cannot be 
attributed to any one single initiative or program but rather the 
collective synergy of all of them. However, I would like to take this 
time to review a few key initiatives that have had a significant impact 
on our increased production and quality and show promise for the way 
ahead.
                        vba organizational model
    Initially planned for deployment throughout FY 2013, VBA 
accelerated the implementation of its new organizational model by 9 
months due to early indications of its positive impact on performance. 
The new organizational model incorporates a case-management approach to 
claims processing, by reorganizing the workforce into cross-functional 
teams that give employees visibility of the entire processing cycle of 
a Veteran's claim. These cross-functional teams work together on one of 
three segmented lanes: express, special operations, or core. Lanes were 
created based on the complexity and priority of the claims, and 
employees are assigned to the lanes based on their experience and skill 
levels. An Intake Processing Center serves as a formalized triage 
process to quickly and accurately route Veterans' claims to the right 
lane when first received.
    The Express Lane was developed to identify those claims with a 
limited number of medical conditions (i.e., about 1-2 issues) and 
subject matter which could be developed and rated more quickly. The 
Special Operations Lane applies intense focus and case management on 
specific categories of claims that require special processing or 
training (e.g., homeless or terminally-ill Veterans, military sexual 
trauma, former prisoners of war, seriously injured, etc.). The Core 
Lane includes claims with three or more medical issues that do not 
involve special populations of Veterans. Less complex claims move 
quickly through the system in the Express Lane, and the quality of our 
decisions improves by assigning more experienced and skilled employees 
to the more complex claims in our Special Operations Lane.
    Thus far, we have seen a 10-percent increase in production in 
regional offices using the new model during the first 60 days of 
deployment. We have also seen processing speed in our Express Lanes 
improve; about 30 percent of claims are routed through Express Lanes 
and are being processed about 100 days faster than claims routed 
through Special Operations Lanes (approximately 10 percent of claims) 
or the Core Lanes (approximately 60 percent of claims).
               veterans benefits management system (vbms)
    VBMS, VA's Web-based electronic claims processing solution, was 
fully deployed to all 56 regional offices 6 months ahead of schedule in 
June 2013. Since then, VBA has also successfully deployed VBMS to the 
Appeals Management Center, the Records Management Center, the Board of 
Veterans' Appeals, all National Call Centers, and all VA medical 
centers. This new technology helps us get out of paper and begin 
reaping gains in processing speed within a digital claims processing 
environment; currently, more than 75 percent of our existing claims 
inventory is electronic and will be processed electronically. In 
addition, VBMS improves access, drives automation, and enables greater 
exchange of information and increased transparency to Veterans, our 
workforce, and our stakeholders.
    The evolution of VBMS is occurring across four distinct generations 
of development. Generation One of VBMS began in 2010 with the 
conceptualization, piloting, development, and deployment of baseline 
system functionality with improved quality and efficiency. The 
development of Generation One of VBMS concluded with the successful 
implementation of Release 4.1 in January 2013.
    As we moved into the development of Generation Two of VBMS, the 
focus has been on building additional system capabilities while 
leveraging simple automation features. VBA has deployed three major 
Generation Two software releases: VBMS 4.2, 5.0, and 5.1. These 
releases included improvements to correspondence and work queue tools, 
additional rating functionality, and more extensive data exchange and 
system integration capabilities.
    VBMS 6.0, scheduled for release this month, will enhance existing 
features, integrate additional correspondence functionality, deliver 
initial capabilities to the Board of Veterans' Appeals, and add new 
functionality to allow claims processors to electronically request and 
receive service treatment records from the Department of Defense (DOD) 
Healthcare Artifacts and Image Management Solution (HAIMS).
    Generation Three of VBMS, which will deploy in 2014, will increase 
system functionality, add more complex automation capabilities, and 
have the capability to accept Veterans' electronic service treatment 
records and personnel records from DOD. Additional workload management 
capabilities will also allow VBA to move claims electronically across 
regional office boundaries when needed. A national work queue is being 
developed based on this capability, which will route claims 
automatically based on VBA's priorities and essentially match a claims 
processor with the ``next best claim'' to work based on their skill 
level and national policy. All of these improvements will enable VBMS 
end-users, which include VA Medical Center personnel and VSOs, to 
perform their work more efficiently and accurately.
    Enhancements to system capabilities in 2014 will increase both the 
production and quality of our claims decisions. In this year, VA will 
also have an additional opportunity to assess and validate the 
effectiveness of the model as a whole and implement improvements as 
needed.
    Generation Four of VBMS, which will deploy in 2015, will capitalize 
on efficiencies and quality improvements gained during the previous 
year. VA will utilize enhancements made in Generation Three to identify 
additional automation and process improvement opportunities that can be 
incorporated into Generation Four, allowing employees to focus on more 
difficult claims by reducing the time required to process less complex 
claims.
    VBA established the Veterans Claims Intake Program (VCIP) in 2012 
to streamline the process for receiving records and data into VBMS and 
other VBA systems. VCIP converts claims and other paper records that we 
receive into a digital format that is usable within VBMS. Under VCIP, 
documents are scanned and converted into electronic format, and 
important information and data are extracted and populated in an 
electronic folder accessible to claims processors through VBMS. In 
November 2013, VCIP achieved a major milestone by surpassing 350 
million images converted from paper and uploaded into VBMS.
         ebenefits and the stakeholder enterprise portal (sep)
    eBenefits is a joint VA/DOD client services portal that provides 
life-long engagement with Servicemembers, Veterans, and their families. 
VA has been strongly encouraging the use of eBenefits since 
October 2009, and just recently crossed the three-million-user mark. 
eBenefits users have access to more than 50 self-service features and 
greater access to benefits and health information at the time and 
method of their choosing. Through self-service, eBenefits users have 
generated over 370,000 requests for official military personnel 
documents, 379,000 requests for VA guaranteed home loan certificates of 
eligibility, approximately 29.1 million claim status requests, and over 
3.2 million self-service letters. VA will continue to add more 
functionality and features to the site, with the goal of using it to 
anticipate Veterans' needs, prompt them when they're eligible for new 
benefits and services, and ultimately reach out to them instead of 
waiting until they reach out to us.
    The integration of eBenefits with VBMS also enables Veterans to 
submit claims online. Using the Veterans On-line Application (VONAPP) 
Direct Connect (VDC) application in eBenefits, Veterans can file a 
claim online by answering a series of questions (which may seem 
familiar to users of today's tax preparation software like Turbo Tax), 
upload all their evidence and supporting documents, check the status of 
their claims, and much more. The electronic claims submission 
capability provided by VDC improves the timeliness of claims processing 
by leaping over the entire paper-based mail, triage, and claims 
establishment process. Claims filed in eBenefits feed right into VBMS, 
giving employees the ability to work these claims without ever having 
to touch a piece of paper. Today, VA receives about 1,000 claims each 
week through VDC. We are grateful for the support of all our partners--
in the Congress, at the state and national VSO level, and in every 
State Department of Veterans Affairs across the country--for 
encouraging Veterans to use eBenefits and submit their claims 
electronically, which boosts productivity and helps us eliminate the 
backlog. VA distributed toolkits with information on eBenefits and 
fully developed claims (FDCs) to every Congressional office. eBenefits 
prompts Veterans to file FDCs when they submit a claim online and 
outlines the advantages in terms of improved decision timeliness. We 
ask that you continue to partner with us on promoting these important 
initiatives to Veterans in your states by adding information to your 
Web pages and in correspondence to constituents who are Veterans.
    The third component of our online engagement strategy is the 
Stakeholder Enterprise Portal (SEP), which is a secure, Web-based 
connection that complements eBenefits and gives VSOs and other 
authorized advocates access to assist Veterans in filing disability 
claims electronically. Using the portal, VSOs can check the status of 
claims, review payment history, and upload documentation on behalf of 
the Veterans they represent--all within a digital environment. When 
filing a claim online in eBenefits, a Veteran can request the 
assistance of a VSO by choosing from a list of accredited 
representatives in VA's database. When logging into SEP, the chosen VSO 
representative is alerted to the Veteran's request, and upon 
acceptance, is given power-of-attorney authorization to access the 
Veteran's claim and assist with preparation. Once the VSO 
representative believes the claim is ready for submission, he or she 
can send notification back to the Veteran in eBenefits, and the Veteran 
submits the claim to VA. With SEP, 8,000 VSO representatives throughout 
the Nation can continue to perform their vital advocacy and assistance 
role within VA's transformed benefits delivery model. As of 
November 30, 2013, VA has registered more than 14 percent of all VSOs.
                    electronic regional office (ero)
    On November 1, 2013, VBA established the Newark Regional Office as 
the first eRO. There are no longer any paper claims being processed at 
the Newark eRO. All claims are processed electronically, which allows 
us to refine, test, and streamline our operations as we prepare for a 
fully electronic environment nationwide. Veterans, Survivors, and 
families served by the Newark eRO do not experience any change in the 
way they interact with the Newark RO. Claims submitted in paper format 
continue to be accepted but are scanned and immediately entered into 
VBMS for electronic processing. We anticipate all 56 regional offices 
will be in a fully electronic environment later this year. Modeling the 
eRO at the Newark RO will enable us to understand the impacts on our 
current operations and help to ensure we have planned for a smooth 
transition. We continue to encourage all Veterans to file claims 
electronically through eBenefits and to utilize Veterans service 
organizations to assist them with their claims.
                      fully-developed claims (fdc)
    VA's FDC program is a critical tool for transforming the way we do 
business. The longest phase of the current claims-processing timeline 
is the phase in which VBA employees gather evidence. FDCs drastically 
reduce the length of this phase by allowing Veterans to submit claims 
as ``fully developed,'' which means the claim includes all available 
supporting evidence like private treatment records, a notice of any 
other records held in Federal facilities, and a certification that the 
Veteran has no more evidence to submit. Veterans are not at any risk 
when submitting an FDC, because if we find that there is another piece 
of relevant evidence that is needed for a rating decision, our 
employees will work to obtain it on the Veteran's behalf and continue 
processing the claim.
    The Congress and our state and VSO partners have been instrumental 
in helping us increase awareness and understanding of our FDC program, 
especially by supporting the FDC workshops we have conducted across the 
country. As a result of these efforts and many others, the use of FDCs 
has dramatically improved since last year. In the third quarter of FY 
2012, VA received approximately 3.6 percent of all claims as FDCs; in 
the fourth quarter of FY 2013, we received almost 25 percent of all 
claims as FDCs. FDCs are currently processed in less than half of the 
time it takes to process non-FDCs.
           challenge training and quality review teams (qrts)
    VBA is committed to providing high quality, timely, and relevant 
training for both new and experienced personnel to ensure that claims 
quality continues to improve. To this end, our transformation efforts 
include redesigned programs and tools that standardize training for the 
disability compensation and pension benefit programs across our 56 
regional offices.
    VBA instituted national-level Challenge Training in 2011 and 
Quality Review Teams (QRTs) in 2012 to improve employee training and 
decision accuracy while decreasing rework time. Challenge Training is 
focused on building the overall skills and readiness of the workforce 
through an 8-week curriculum, and QRTs focus on fixing the most common 
sources of error in the claims-processing cycle. To date, approximately 
3,000 employees have graduated from our Challenge Training program, and 
an additional 484 employees have undergone Station Enhancement Training 
(SET), which is based on the Challenge model for new employees. In FY 
2013, rating accuracy for claims completed in Challenge training was 
95.5 percent.
    Evidence shows that these training sessions are having a 
significant impact on accuracy, timeliness, and production. Challenge 
graduates decide approximately 150 percent more claims per day than 
their predecessor cohorts, at 30-percent better accuracy. Before 
Challenge Training, employees processed about half a claim a day at 
approximately 60-percent accuracy during the first 6 months following 
graduation; today, claims processors trained under the new Challenge 
program complete about 1.6 claims a day at approximately 94-percent 
accuracy within 6 weeks of graduation. In addition, when an entire 
regional office undergoes SET, accuracy improves by approximately 8 
percent, and monthly production improves by approximately 27 percent.
    In 2012, VBA reassigned 573 of our most skilled and experienced 
employees from their duties as claims processors to serve on QRTs. In 
FY 2013, these QRTs conducted more than 145,000 in-process reviews, 
preventing errors before they can impact the Veteran and providing 
specialized re-training to claims processors so these errors can be 
prevented in the future. QRTs made a particularly big impact on the 
most common types of errors this year.
    In 2012, VBA found that almost 40 percent of claims rework errors 
across VBA were occurring in the medical examination phase (identified 
as ``B2'' errors). In April 2012, we launched the B2 Error Reduction 
Initiative and trained QRT Coaches to lead a Lean Six Sigma project at 
their regional offices to reduce B2 errors by approximately 50 percent. 
We made the investment--both by taking 573 employees off the line to 
serve on the QRTs and by training every QRT coach in Lean Six Sigma--
and we are now seeing the results. In FY 2013, we reduced the B2 error 
rate by more than 40 percent across all of VBA, which means Veterans 
will not have to wait as long for a decision on their claims, and they 
will receive a high-quality decision.
    VA currently uses a 3-month rolling average to track the impact of 
these initiatives, and others like them, on rating accuracy. These 
metrics are reported in ASPIRE, the monthly Dashboard providing 
information on how VBA and regional offices are doing in relation to 
2015 aspirational goals, and can be seen online (www.vba.va.gov/
reports/) by anyone inside or outside of VA. In FY 2012, VA showed a 3-
percent increase in national accuracy--from approximately 83 percent to 
86 percent. In FY 2013, our 3-month accuracy at the claims level rose 
to approximately 90 percent, meeting the goal we set for ourselves this 
year. The accuracy outcome goals for the next 2 years are approximately 
93 percent in FY 2014 and 98 percent in FY 2015.
    It is important to recognize that under the existing quality review 
system, any one error on the claim, no matter how many medical 
conditions must be developed and evaluated, makes the entire claim in 
error--the claim is therefore counted as either 100 percent accurate or 
100 percent in error, with no credit for anything in between. Medical 
issues are defined as individually evaluated medical conditions. Given 
that the average number of medical issues included in each claim for 
recently separated Servicemembers is now in the 12 to 16 range, we do 
not believe the current all-or-nothing measure reflects the actual 
level of decision accuracy achieved. When we measure the quality of 
claims based on the individual medical issues rated (i.e., ``issue-
based accuracy''), the accuracy of our decisions is at approximately 97 
percent. This issue-based accuracy approach also affords VBA the 
opportunity to precisely target those medical issues where we make the 
most errors, at the individual employee level, and develop and direct 
training in a targeted manner.
                    collaborations and partnerships
    VBA is relying more and more on partnerships with Federal, state 
and non-profit agencies to improve benefits delivery for Veterans. A 
key component of VBA's transformation is leveraging technology to 
interface with partners to securely exchange Veteran information needed 
to verify benefits eligibility. Over the past year, VBA has worked to 
develop these interfaces with the agencies below, and steady progress 
is being made.
Defense Department Service Treatment Records
    DOD continues to strive to provide VA with 100 percent of 
separating Servicemembers' complete and certified Service Treatment 
Records. During the third week of November 2013, DOD achieved a 90-
percent certification rate. VBA continues to work with DOD to 
transition to receiving all Service Treatment Records electronically. 
This will be accomplished via HAIMS to VBMS interface, which is 
scheduled for implementation effective January 1, 2014.
Internal Revenue Service (IRS) and Social Security Administration (SSA) 
        Data Sharing
    In February 2013, VA developed an expanded data-sharing initiative 
with IRS and SSA to streamline income verification for pension 
applicants. This initiative enabled VBA to eliminate an annual 
reporting surge of 150,000 actions and redirect significant resources 
to address the backlog of dependency and indemnity compensation (DIC) 
claims from Survivors. As a result, we have doubled our output of DIC 
claims processing with this effort, cutting the inventory in half and 
ensuring approximately 74 percent of all DIC claims are completed 
within 125 days.
VSOs and State and County Service Officers
    Currently, VA's Digits-to-Digits (D2D) project allows VSOs, County 
Veterans representatives, and State Veterans Affairs agencies to 
directly submit electronic compensation claims into VA's digital claims 
system using their own existing systems. Allowing our partners this 
connectivity dramatically increases access to VA for Veterans and their 
advocates. We have already seen six claims management software 
providers build to VA's D2D specifications to make their products more 
competitive to their customer base of VSOs and County and State 
Veterans Affairs agencies. This path is very similar to the online tax 
preparation model provided by IRS, in which IRS published technology 
standards and specifications for how to send/receive data and then 
allowed the private sector to develop solutions for their customers to 
file their tax returns with IRS. While D2D is currently focused on 
digital submission of disability claims, this model can be extended to 
other benefits delivery programs in VA.
                        oldest claims initiative
    On April 19, 2013, VBA began to implement a special initiative to 
quickly decide the oldest claims in the inventory. This initiative was 
created to accelerate the elimination of the backlog for Veterans who 
have waited the longest for a decision, and is a key part of VA's 
overall strategy to eliminate the claims backlog in 2015.
    In June, VA completed the first phase of the initiative, which 
focused on all claims that had been pending over 2 years. While some 
claims from that category were still outstanding due to the 
unavailability of a claimant and other unique circumstances, 
approximately 99 percent of these 2-year claims (over 67,000) had been 
processed for Veterans, eliminating those claims from the backlog. 
Since that milestone, VBA claims processors have focused on completing 
the claims of Veterans who have been waiting over 1 year for a 
decision. VA has processed approximately 96 percent of all 513,000 
claims pending over 1 year.
    Several key factors have made this important initiative a success:

    Veterans Health Administration (VHA) Collaboration. First, the 
contribution of our VHA partners has been critical. During this period, 
VHA physicians have been working in each of VBA's regional offices to 
provide onsite support for medical opinions, reducing deferral rates 
and increasing efficiency. They have been a key node in the management 
process by tracking those medical exams that are needed for rating 
decisions and ensuring the information is flowing between the 
administrations.
    Mandatory Overtime. Mandatory overtime is a management tool that 
VBA implemented starting May 20, 2013, to maximize productivity during 
the oldest claim initiative. While in mandatory overtime, Rating 
Veterans Service Representatives (RVSRs), Veterans Service 
Representatives (VSRs), and Decision Review Officers (DROs) worked a 
minimum of 20 hours of overtime per month and focused exclusively on 
completing priority claims--claims over 1 year, FDCs, and special-
interest claims (homeless, hardship, former prisoner of war, terminally 
ill, etc.). From May 20 to September 30, 2013, VBA's daily rating 
production increased over 30 percent, or more than 1,000 additional 
claims per day. VBA also recorded its highest monthly production rates 
ever in August and September 2013--over 128,000 and 129,000 
respectively. Mandatory overtime was halted during the 2-week 
Government shutdown in October but was re-established and continued 
through November 23, 2013. VBA anticipates mandatory overtime to resume 
in 2014, contingent upon available funding. Optional overtime for 
claims processors will remain in effect.
    National-level Workload Management. The oldest claims initiative 
also validated the need for a national approach to workload management. 
Historically VBA has maintained regional office claims processing 
jurisdictions that are aligned with state boundaries. This results in 
less-than-optimal utilization of VBA claims processing capacity. In 
recent years, VBA has ``brokered'' claims between regional offices via 
file transfer in order to maximize national claims processing 
resources. During VBA's focus on the oldest claims, more than 100,000 
claims were brokered, ensuring the right ``next claim'' is matched with 
resources available nationwide. When the full system capacity is 
leveraged and state boundaries are disregarded, VBA achieves a much 
higher level of production.
    The future state of VBA's brokering capabilities lies in the 
continued development of VBMS and a workload that is entirely 
electronic. The workload management capabilities of VBMS are being 
developed in two steps. Currently, a working group is building the 
design requirements that will provide managers with the tools and 
reporting capabilities to manage their workload most effectively at the 
regional office level. Second, a national work queue is being 
developed, to include the capability to route claims automatically 
through a pre-determined set of logic that matches claims processors 
with the ``next best claim'' to work, based on their skills and 
competencies and nationally set priorities.
    Improved Production and Increased Accuracy. The results of our 
transformation efforts, including the oldest claims initiative, have 
proven that increased production does not have to come at the expense 
of decision quality. During this recent period of unprecedented 
production, VBA's 3-month rolling average for claims accuracy has 
steadily improved, from approximately 86 percent at the beginning of 
the year, increasing to 90 percent as of the end of November 2013. 
Issue-level accuracy has improved to approximately 97 percent. 
August 2013 proved to be the most productive month in VBA history for 
claims processing--with 128,594 claims completed--and in September our 
performance was even stronger, completing 129,488 claims.
                               conclusion
    While we know there is much more work to be done to reach our 
goals, the combined effects of our Transformation Plan--the people, 
process, and technology innovations and initiatives that have been 
developed and deployed--are having an impact. The gains we are making 
in information technology and the automation of our processes are 
critical, and going forward, we will need to sustain the resources for 
programs like VBMS in order to eliminate the backlog in 2015 and 
achieve our quality goals. Much of our success is attributable to the 
support of this Committee and your commitment to helping us in our 
transformation. I thank you for that--and for your full support of our 
information technology budgets. FY 2014 is a crucial year in our 
transformation, and I look forward to your continued support and 
commitment on behalf of Veterans, their families, and Survivors.
                                 ______
                                 
  Response to Prehearing Questions Submitted by Hon. Richard Burr to 
                  U.S. Department of Veterans Affairs
    Question 1. In April 2013, VA announced an initiative to focus on 
claims that have been pending for at least one year, called its Oldest 
Claims First Initiative.
    a. In total, how many claims were included in this initiative?
    VBA Response: VBA's Oldest Claims First initiative included 512,942 
claims. Through December 5, almost 495,000 of 512,942 of the oldest 
claims have been completed (96.5 percent), reducing the over-one-year 
claims remaining to be worked under this initiative to 18,005 (3.5 
percent).
    VBA previously submitted a response to this question that may have 
been confusing and only included information through September 30, 
2013. The numbers above reflect information as of December 5, 2013.

    b. Of those, how many claims have received a final decision and how 
many have received a provisional decision?
    VBA Response: Through November 8, 2013, a total of 14,871 claims 
received a provisional rating, including 7,513 2-year claims and 7,358 
1-year claims. This represents approximately two percent of the rating-
related decisions made under the Oldest Claims Initiative through 
November 8, 2013. The use of provisional rating decisions ended on 
November 8, 2013.

    c. Please provide redacted copies of at least ten provisional 
decisions that have been issued in connection with this initiative.
    VBA Response: VA provided 10 copies of provisional decisions to the 
Committee on 12/09/2013. Due to file size, these were delivered on CD.

    [Redacted submissions were received and are being held in Committee 
files.]

    Question 2. According to the Monday Morning Workload Report, the 
number of items pending under End Product (EP) 400 (Correspondence) 
increased from less than 5,200 in September 2010 to over 70,500 in 
September 2013.
    a. For the hearing record, please explain what work items are 
included under EP 400 and whether it includes claims that received 
provisional decisions under VA's Oldest Claims First Initiative.
    VBA Response: Traditionally, VBA utilized the EP 400 to track 
correspondence actions that did not require a decision and only 
required a written response (e.g., a letter requesting the status of a 
claim).
    In fiscal year 2011, VBA expanded the use of EP 400 to track two 
types of claims filed under the 2009 Agent Orange presumption policy 
change.
    On April 19, 2013, VBA once again expanded its use of the EP 400 to 
track a subset of claims completed during the Oldest Claims Initiative. 
EP 400, with an additional tracking label, is used to identify claims 
that received a provisional rating decision for claimants who are both 
in receipt and not in receipt of VA benefits at the time of the 
decision.

    b. Are any of the work items reflected under EP 400 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: EP 400 is not included in VA's statistics on the 
backlog of claims. VBA has defined the ``backlog,'' as rating claims 
pending greater than 125 days. Rating claims are considered claims for 
disability compensation, dependency and indemnity compensation, and 
Veterans' pension benefits, including both original and supplemental 
claims. Rating claims generally require a disability rating decision by 
a Rating Veterans Service Representative.

    Question 3. According to the Monday Morning Workload Report, the 
number of items pending under EP 930 (Review, including quality 
assurance) increased from less than 14,700 in September 2010 to over 
26,500 in September 2013.
    a. For the hearing record, please explain what work items are 
included under EP 930 and whether it includes claims that received 
provisional decisions under VA's Oldest Claims First Initiative.
    VBA Response: Traditionally, EP 930 was used to track completed 
claims that subsequently require review, such as quality assurance 
reviews or award corrections. Because VA had already taken rating end-
product credit on these claims, reviews or corrective actions are 
tracked in this ``non-credit'' series.
    On April 19, 2013, VBA expanded its use of EP 930 to track a subset 
of claims completed during the Oldest Claims Initiative. EP 930, with a 
date of claim 364 days from the date of the provisional rating 
decision, identifies provisional rating decisions issued to claimants 
not in receipt of VA benefits at the time of the decision. This end 
product was established to ensure a final rating decision is issued to 
these claimants.

    b. Are any of the work items reflected under EP 930 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: Actions pending under EP 930 are not included in VA's 
statistics on the backlog of claims. VBA has defined the ``backlog'' as 
rating claims pending greater than 125 days. Rating claims are 
considered claims for disability compensation, dependency and indemnity 
compensation, and Veterans' pension benefits, including both original 
and supplemental claims. Rating claims generally require a disability 
rating decision by a Rating Veterans Service Representative.

    Question 4. According to the Monday Morning Workload Report, the 
number of items pending under EP 130 (Dependency) increased from less 
than 49,000 in September 2010 to over 210,000 in September 2013 and 
nearly 72 percent of those 210,000 work items have been pending for 
more than 125 days.
    a. Please explain what work items are included under EP 130.
    VBA Response: EP 130 applies to all actions involving dependency 
determinations, where the primary issue involves entitlement of the 
Veteran to increased benefits based on relationship or dependency.

    b. During that time, has VA suspended work on these items or placed 
a lower priority on this work?
    VBA Response: VBA completed a record number of non-rating claims in 
FY 2013 (875k), which includes EP 130 dependency claims. This is a 16% 
increase over FY12.

    c. Are any of the work items reflected under EP 130 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: EP 130 is not included in VA's statistics on the 
backlog of claims. VBA has defined the ``backlog,'' as rating claims 
pending greater than 125 days. Rating claims are considered claims for 
disability compensation, dependency and indemnity compensation, and 
Veterans' pension benefits, including both original and supplemental 
claims. Rating claims generally require a disability rating decision by 
a Rating Veterans Service Representative.

    Question 5. According to the Monday Morning Workload Report, the 
number of items pending under EP 290 (Misc. determinations) increased 
from less than 27,000 in September 2010 to over 87,000 in 
September 2013 and 83 percent of those 87,000 work items have been 
pending for more than 125 days.
    a. Please explain what work items are included under EP 290.
    VBA Response: EP 290 applies to adjudicative decisions relating to 
eligibility benefits under other VA programs; programs of other Federal 
and State agencies; and independent determinations relating to 
elections, waivers, guardianship issues and other issues affecting 
payments. Examples of EP 290 work include adjustments due to 
incarcerations, claims for clothing allowance, and eligibility for loan 
guaranty benefits.

    b. During that time, has VA suspended work on these items or placed 
a lower priority on this work?
    VBA Response: VBA completed a record number of non-rating claims in 
FY 2013 (875k), which includes EP 290 claims. This is a 16% increase 
over FY12.

    c. Are any of the work items reflected under EP 290 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: EP 290 is not included in VA's statistics on the 
backlog of claims. VBA has defined the ``backlog,'' as rating claims 
pending greater than 125 days. Rating claims are considered claims for 
disability compensation, dependency and indemnity compensation, and 
Veterans' pension benefits, including both original and supplemental 
claims. Rating claims generally require a disability rating decision by 
a Rating Veterans Service Representative.

    Question 6. According to the Monday Morning Workload Report, the 
number of items pending under EP 600 (Due process) increased from less 
than 20,000 in September 2010 to over 52,700 in September 2013 and 52 
percent of those 52,700 work items have been pending for more than 125 
days.
    a. Please explain what work items are included under EP 600.
    VBA Response: EP 600 can be used for two different types of VBA 
actions. Most often, EP 600 identifies cases where a predetermination 
notice is provided to a VBA beneficiary proposing to reduce benefits. 
EP 600 can also be applied to claims where VA proposes to find the 
claimant unfit to manage their VBA benefits.

    b. During that time, has VA suspended work on these items or placed 
a lower priority on this work?
    VBA Response: VBA completed a record number of non-rating claims in 
FY 2013 (875k), which includes EP 600 claims. This is a 16% increase 
over FY12.

    c. Are any of the work items reflected under EP 600 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: EP 600 is not included in VA's statistics on the 
backlog of claims. VBA has defined the ``backlog,'' as rating claims 
pending greater than 125 days. Rating claims are considered claims for 
disability compensation, dependency and indemnity compensation, and 
Veterans' pension benefits, including both original and supplemental 
claims. Rating claims generally require a disability rating decision by 
a Rating Veterans Service Representative.

    Question 7. According to the Monday Morning Workload Report, the 
number of items pending under EP 165 (Accrued) increased from less than 
3,700 in September 2010 to over 15,300 in September 2013.
    a. Please explain the nature of the work items included under EP 
165.
    VBA Response: EP 165 applies to claims for compensation or pension 
payable as reimbursement of the expenses of last sickness and burial, 
or claims for accrued benefits payable based on relationship.

    b. During that time, has VA suspended work on these items or placed 
a lower priority on this work?
    VBA Response: VBA completed a record number of non-rating claims in 
FY 2013 (875k), which includes EP 165 claims. This is a 16% increase 
over FY12.

    c. Are any of the work items reflected under EP 165 included in 
VA's statistics on the backlog of claims that VA aims to eliminate by 
2015?
    VBA Response: EP 165 is not included in VA's statistics on the 
backlog of claims. VBA has defined the ``backlog,'' as rating claims 
pending greater than 125 days. Rating claims are considered claims for 
disability compensation, dependency and indemnity compensation, and 
Veterans' pension benefits, including both original and supplemental 
claims. Rating claims generally require a disability rating decision by 
a Rating Veterans Service Representative.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Bernard Sanders to 
                  U.S. Department of Veterans Affairs
    Question 1. During the hearing Under Secretary Hickey testified 
that veterans were able to access VONAPP to file pension claims using a 
portal at the bottom of the Pension Home Page on VA's Internet site. 
However, according to the information on this site pension claims must 
be submitted in paper form. There is a link on the Pension Home Page to 
allow veterans to obtain and print out a pension application for paper 
submission. The page states: ``This application will need to be 
completed and mailed to the appropriate VA Regional Office based on the 
state in which you reside.''
    Please clarify the ability of veterans to file pension claims on-
line, including any timetable for restoration of on-line applications 
for pension claims in VONAPP, e-Benefits or any other portal.
    Response. Veterans wishing to apply for pension do not currently 
have the capability to apply online. However, the application for 
pension remains available for download and printing through the VA 
pension Web site. While VA only received 30 pension claims per month 
through the VONAPP system, we agree that it is necessary to maintain 
some online capability in legacy systems during the transition to new 
systems. Therefore, VA is currently evaluating several options to 
restore the capability to submit an online application for pension. 
Since we are still evaluating options, we do not yet have a timetable 
for restoration. Additionally, as part of our transformation, we plan 
to deploy the pension application within eBenefits during fiscal year 
2015.

    Question 2. The Department's written testimony states: ``In FY 
2013, these QRTs conducted more than 145,000 in-process reviews, 
preventing errors before they can impact the Veteran and providing 
specialized re-training to claims processors so these errors can be 
prevented in the future. QRTs made a particularly big impact on the 
most common types of errors this year.''
    a. How are the errors identified by Quality Review Teams (QRT) 
tracked to capture the most common errors in order to better focus 
employee training?
    Response. All errors identified by the QRTs are entered into the 
Automated Standardized Performance Elements Nationwide, the computer 
program used to track performance for the quality elements.

    b. How many errors were identified during the more than 145,000 in-
process reviews?
    Response. A total of 16,651 errors were identified.

    c. What were the three most common errors identified by the more 
than 145,000 in-process reviews?
    Response. The three most common types of errors identified during 
the in-process reviews were:

     Rating the case without requesting an exam;
     Failure to request a medical opinion; and
     Rating a case based on an insufficient medical exam.

    d. How to these errors compare to the most common errors identified 
by VA's Systematic Technical Accuracy Review and the most common 
reasons for remands issued by the Board of Veterans' Appeals?
    Response. The errors noted on the in-process reviews are consistent 
with errors found in Systematic Technical Accuracy Reviews. The 
Veterans Benefits Administration does not currently have a way to 
compare these numbers to remands issued by the Board of Veterans' 
Appeals.

    Question 3. The Department's written testimony states, ``In 2012, 
VBA found that almost 40 percent of claims rework errors across VBA 
were occurring in the medical examination phase (identified as ``B2'' 
errors).''
    a. How has training QRT coaches in Lean Six Sigma contributed to 
the reduction of B2 errors?
    Response. For the period of November 2011 through October 2012, 
there were 624 B2 errors out of 2,274 total benefit entitlement errors 
(27.4 percent). For the period of November 2012 through October 2013, 
there were 344 B2 errors out of 1,687 total benefit entitlement errors 
(20.4 percent). This represents a 45 percent reduction in the number of 
B2 errors since the inception of QRTs in 2012. The reduction in the 
number of benefit entitlement errors overall was 26 percent.

    b. Has the Acceptable Clinical Evidence Initiative contributed to 
the reduction of B2 errors? If so, how and what impact has it had?
    Response. The Acceptable Clinical Evidence initiative is primarily 
intended as a convenience for Veterans and an efficiency tool for 
Veterans Health Administration clinicians. Because this is a relatively 
new initiative, more data is needed to assess the true impact.

    Question 4. In discussing VA's appellate process, Under Secretary 
Hickey testified, ``* * * we have a standard notice of disagreement 
form that will take 100 of those days immediately off that wait time 
for our veterans because we have never had a mandatory standard notice 
of disagreement form for an appeals before.'' What data does the 
Department rely upon that supports the assertion that use of a standard 
notice of disagreement form will reduce appeals processing time by 100 
days?
    Response. The Appeals Design Team Pilot, which ran from March 1, 
2012, to March 1, 2013, found that control time was reduced to 7 days 
when using the standard notice of disagreement form. Control time for 
appeals processed outside of the pilot was 98 days during the same 
period. This represents a reduction of 91 days in the appeals process.

    Chairman Sanders. General Hickey, thank you very much for 
your presentation. I am going to begin my questions with the 
same question I asked in March when you were last before this 
Committee, and that is, the Secretary has set a very ambitious 
goal of processing claims within 125 days at 98 percent 
accuracy by 2015. That is a very, very ambitious goal.
    According to this week's Monday Morning Workload Report, 
there were 693,857 pending claims, 57 percent or about 395,000 
of which have been pending longer than the Department's goal of 
125 days. These numbers clearly are better, significantly 
better than the last time we met and seem to indicate that VA 
is making very real progress.
    My question to you is you have made progress, but you still 
have a long way to go. Do the Department's claim processing 
goals remain attainable? Are you, in fact, going to tell us 
this morning that you are on track to achieve the Secretary's 
goal of 125 days with 98 percent accuracy by 2015?
    Ms. Hickey. Chairman Sanders, we are on track. Barring any 
implications to our full Fiscal Year 2014 request, which we 
obviously need at the expiration of the continuing resolution 
in January, and barring any impact to our OIT budget, because 
we are particularly focused in 2014 on the automation that adds 
functionality every 12 weeks to our capability.
    So, we will also require our full Fiscal Year 2014 IT 
budget when the CR expires in January of this year.
    Chairman Sanders. So, what you are telling us is that 
everything being equal, if you get the budget that you need, 
you expect to achieve the Secretary's goals?
    Ms. Hickey. That is what I am telling you, Chairman 
Sanders.
    Chairman Sanders. General Hickey, your testimony contains 
some significant statistics. It highlights a 36 percent 
reduction in the backlog since March of this year, including 
record numbers of claims completed in Fiscal Year 2013 and 
specifically the months of August and September, an improvement 
in claim level accuracy from 83 to 90 percent, and a continued 
conversion of millions of pieces of paper into a digital format 
suitable for use in the new electronic claims processing 
system.
    Are you confident that VA will continue to see this level 
of production as well as continued improvement in accuracy?
    Ms. Hickey. Chairman Sanders, I am confident that we will 
continue to see that. I will say that we have achieved an 
historical high for VBA, never achieved before, which is 1.17 
million claims in a single year, never done it before, never 
achieved 128,000 claims a month at the same time that our 
quality was also very high and rising, never achieved a 128,000 
claim month.
    Even November of this year where we achieved 94,000 claims, 
we have never achieved more than another month--74,000 claims. 
So, we are 20,000 high in the month of November, meaning 20,000 
claims more have been produced in the month of November than we 
have ever done before, which is to show the demonstrated 
capabilities of where we are moving.
    Chairman Sanders. OK. Thank you. Let me just state that I 
have got a few more questions here.
    In April of this year, VA rolled out an initiative to 
provide decisions on the claims that have been pending the 
longest. While I appreciate VA's efforts to provide the 
veterans who have been waiting the longest with decisions, I 
continue to have concerns about this initiative.
    The IG, the Inspector General's recent findings regarding 
provisional ratings decisions at the Los Angeles Regional 
Office which found a number of errors was very, very 
concerning. I understand the office corrected the error by 
issuing appropriate guidance to staff in June and is now in the 
process of correcting any errors in claims which may have been 
improperly adjudicated.
    So, this IG report is very concerning to many of us. Can 
you explain to this Committee any actions that have been taken 
to remedy the problems identified in Los Angeles?
    Ms. Hickey. Chairman, I absolutely can do that, but let me 
start first by saying the IG did go back and look at these 
claims later. But I will tell you the regional office knew 
within 1 week of doing this guidance they had misinterpreted 
the letter we sent. They were leaning in, trying to help to 
really move forward. No malicious intent. They put out an 
alternative guidance to the regional offices that they 
themselves identified within a week that they had done wrong.
    The leadership at the regional office immediately notified 
Deputy Under Secretary Rubens of the issue. She immediately got 
in touch with everybody across the Nation, made sure no other 
guidance had been interpreted that way. It had not.
    The regional office leadership immediately called not only 
one all-hands meeting to make sure everybody in the regional 
office knew they had made a mistake in the guidance, not the 
employees; but also then conducted a second all-hands meeting 
face-to-face with every employee to tell them about that and 
followed up with four more letters or written correspondence to 
the employees reminding them over periods of time about the 
guidance on this.
    Now, it is important to note that this particular regional 
office had for the previous complete year made only one error 
like that in the whole year before. They had cut down those B2 
errors that significantly. So, this was an anomaly.
    Those claims that were looked at were found during that 
period of time and about the week after as it was still being 
cleaned up and trickled through.
    So, yes, the IG did go in and identify them later, but the 
RO identified them immediately or within 1 week of making the 
wrong guidance decision.
    It has been resolved. We had our star accuracy team 
pulling--and let me put it in context, this is 3 percent of 
those half a million or 14,000 or 512,000 claims we have made 
on the oldest claims initiative. We are reviewing every one of 
them to make sure it did not happen again. Our star accuracy 
through our compensation service is doing that.
    Chairman Sanders. OK. Thank you very much.
    Senator Burr.

        STATEMENT OF HON. RICHARD BURR, RANKING MEMBER, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Burr. General, welcome to you and your team, and 
thank you for your testimony. Let me ask you, as it relates to 
the IG's report and the Los Angeles situation specifically, did 
the LA office violate VA policy in how they implemented that 
initially?
    Ms. Hickey. So, Senator Burr, yes, they gave out an 
alternative policy that they--they did not intend to violate 
policy. They just interpreted the policy differently.
    Senator Burr. So, in that short period of time before they 
self-identified the misinterpretation of the memorandum, when 
they went back and reviewed all the provisional decisions, it 
found 470 out of 513. Can I assume that all 513 of those cases 
were decided in that 1 week period and those 470 errors were 
made in that 1-week period?
    Ms. Hickey. So, Senator Burr, I told you that we kept 
sending reminders. They had a second all-hands meeting and they 
had four more follow-ups because they found some of them were 
continuing to trickle out that way. So, it is about a 2-3-week 
period of time before they got the errors all caught and 
cleaned up, but they were actively and aggressively going after 
that cleanup.
    Senator Burr. Were provisional decisions included in 
determining the number of claims VA is reporting it completed 
during 2013?
    Ms. Hickey. I am sorry, Senator, I am not understanding the 
question.
    Senator Burr. Were provisional decisions included in 
determining the number of claims VA has completed during the 
calendar year 2013?
    Ms. Hickey. I am going to ask Ms. Rubens. She just told me 
yes. So I will answer yes on behalf of the Deputy Under 
Secretary. There were 14,000 of those claims which is 3 percent 
of all of the claims we have done in the oldest claim 
initiative, which was 67,000 at 2 years and older and 512,000 
at 1 year and older.
    Senator Burr. You highlighted 97 percent quality or 
accuracy. I will use both words. Last week The American Legion 
testified, ``VA's accuracy statistics from the Monday Morning 
Reports are not consistent with the review of recently 
adjudicated claims as conducted by The American Legion.'' 
According to the Legion, they reviewed 260 decisions and found 
errors in 55 percent.
    Also, the National Veterans Legal Service Program testified 
that the current error rate is somewhere between 30 and 40 
percent. In some ROs it is higher. Are they wrong?
    Ms. Hickey. Senator Burr, it is an ``apples and oranges'' 
discussion; if I may have a moment to clarify. First of all, 
let me just state for the record and for every time I talk on 
this subject anywhere, we will not trade production for 
quality. It is an ``and'' equation. Both must rise, which is 
why it is 125 and 98.
    But there is a very different way the IG and others look at 
issues than the way we do. I will tell you that our process has 
been validated by an external agency in----
    Senator Burr. Let me ask my question again. Are they wrong?
    Ms. Hickey. Senator Burr, they are right for the way they 
look at it. We are right for the way we measure it, which is 
statistically valid.
    Senator Burr. General, they are the customer, are they not?
    Ms. Hickey. Actually, the veteran, the family member, and 
their survivors are my customers, senator.
    Senator Burr. Yes. And these are the organizations that 
represent them.
    Ms. Hickey. They are, sir, and they are our partners.
    Senator Burr. Should this Committee believe that there is 
any VSO in America that believes that the accuracy or the 
quality is at 97 percent right now?
    Ms. Hickey. Senator Burr, I would ask you to ask them for 
their opinions. I can not quite----
    Senator Burr. They testified on it. But that is not 
necessarily something that computes.
    Ms. Hickey. Senator Burr, I have a statistically valid, 
validated process that goes further----
    Senator Burr. I asked a very simple question. Are they 
wrong? I guess the answer is yes because you are saying your 
statistics are different than what their review has been.
    Ms. Hickey. They have a different process, Senator.
    Ms. Hickey. OK. According to VA's Monday Morning Workload 
Reports, there are at least 266,000 appeals that have not been 
resolved. That is about 100,000 more than were pending 5 years 
ago. Although appeals are not counted in VA's backlog 
statistics, they represent individuals who have yet to know 
what benefits they received.
    Do the performance standards for regional office directors 
and service center managers include how quickly and accurately 
they are handling appeals?
    Ms. Hickey. Senator Burr, the simple answer to your 
question is yes, they do; however, I would also tell you that a 
veteran does know the answer to our opinion on a claim. In many 
cases they are deriving resources associated with that claim 
decision already, even though they might be appealing only a 
part or piece of our overall decision.
    Senator Burr. So, you have a metrics that you use to 
determine this?
    Ms. Hickey. We absolutely have metrics on our appeals, 
Senator.
    Senator Burr. Would you provide that metrics for the 
Committee?
    Ms. Hickey. We will do that, sir.
Response to Request Arising During the Hearing by Hon. Richard Burr to 
 Hon. Allison A. Hickey, Under Secretary for Benefits, U.S. Department 
                          of Veterans Affairs
    Response. VBA establishes yearly performance standards to track 
regional office performance. Regional Office Directors are evaluated on 
the following appeals metrics:

     Control time: The number of days it takes to establish an 
appeal within VA systems
     Pending appeals: The number of appeals in the inventory
     Average days pending: The average length of time an appeal 
has been pending in the inventory
     Average days pending for Form 9: The average length of 
time a Form 9 (formal appeal) has been pending in the inventory
     Avoidable remand rate: The percent of remanded appeals 
that are remanded for an action that should have been taken by the RO 
prior to sending it to the Board.
    As of January 31, 2014, approximately 72 percent of Veterans with 
pending appeals (318,000 Veterans) are receiving benefits.

    Senator Burr. On average, how long have those 266,000 
appeals been pending?
    Ms. Hickey. Senator, the Chairman cites some 800 days, and 
so I will accept----
    Senator Burr. Does VA track that?
    Ms. Hickey. We do, Senator Burr.
    Senator Burr. OK. At what point is an appeal considered to 
be backlogged?
    Ms. Hickey. We do not have a backlog number for appeals, 
Senator. What I can tell you is the rate of appeals has not 
changed in the last many decades.
    Senator Burr. At what point does the length of an appeal 
become a concern to VA?
    Ms. Hickey. It is a concern of ours right this minute, sir. 
I will tell you that is why we have done a Lean Six Sigma 
effort on the appeals process to try to identify ways to 
improve the appeals process.
    In fact, we have some legislation in front of you that I 
would appreciate your consideration to help the appeals 
process, and I appreciate the Members of this Committee who are 
supporting that.
    I will also tell you we have a standard notice of 
disagreement form that will take 100 of those days immediately 
off that wait time for veterans because we have never had a 
mandatory standard notice of disagreement form for an appeals 
before, and that is, by the way, out for public comment right 
now. That period closes this month, and we hope to have that as 
soon as January 2014.
    Senator Burr. Mr. Chairman, my last question in this round 
is, how many employees are currently devoted or dedicated to 
working on appeals?
    Ms. Hickey. Senator Burr, I can get you the specific 
number. I do not have that at my fingertips. But we have 
decision review officers who are dedicated in normal hours 
though they have been working overtime on compensation claims. 
They have been dedicated to working appeals.
    Senator Burr. Would you provide that for the Committee and 
would you provide it in a way that you compare it to the 
previous 2 years and how many people were dedicated to appeals?
    Ms. Hickey. Senator, I would be happy to provide you what 
you need.
Response to Request Arising During the Hearing by Hon. Richard Burr to 
 Hon. Allison A. Hickey, Under Secretary for Benefits, U.S. Department 
                          of Veterans Affairs
    Response. VA appreciates Congress' investments in VBA and the Board 
of Veterans' Appeals to address appeals. While there is some variation 
in staffing levels throughout the year in all of our claims processing 
activities including appellate processing, VBA estimates that 899 and 
902 full-time employees were dedicated to processing appeals in FY 2012 
and FY 2013, respectively, including employees at the Appeals 
Management Center. Currently, 895 full-time employees are processing 
appeals in VBA. In the last two quarters of FY 2013, the Board hired 
and began training 100 new attorneys and increased the number of 
authorized Veterans Law Judges from 64 to 78. The Board currently has 
628 employees processing appeals, a growth of approximately 22% in FY 
2013.

    Senator Burr. I thank the Chair.
    Chairman Sanders. Senator Burr, thank you very much.
    Senator Brown.
    Senator Brown. So, why does it take 40 days longer in the 
Cleveland office?
    Ms. Hickey. Senator Brown, it depends on the amount of 
workload that the regional office has within its inventory. So, 
in some cases, we will have, as we have had in Ohio and as we 
have had in other locations, major demobilizations of large 
contingents of National Guard and Reserve that come back that 
create sudden surges in the system.
    We have had that in Ohio. The Ohio National Guard has been 
participating very heavily in the current wartime environment 
so there have been some surges in returns as they redeployed.
    Senator Brown. But the backlog in Cleveland has been 
persistent for some time. Does not the VA need to respond? Why, 
if your community has sent more people to the National Guard, I 
guess that is what you are saying in part, so that you happen 
to live in a place where you have to wait 40 days longer is 
because you live in that place?
    I understand if it is a surge and it is a short-term surge, 
but if it is persistent, is there not something VA should do to 
move people around or assist in a way that brings that a little 
more likely closer to the national average?
    Ms. Hickey. Senator Brown, there it is, and we have. So, 
let me just talk to you. Let me also say we had delivered 
yesterday to all of you--if you do not have it, please let us 
know. I will do Cleveland by example.
    The inventory in Cleveland has been decreased by 47.2 
percent over the last 8 months. The backlog is down by 64.5 
percent. So, there is an improvement there.
    Veterans in Ohio are now waiting less time for decisions. 
Almost 176.2 days less than they were waiting this time last 
year. Their 2-year-old claims, 99.1 percent of them are 
complete. Their 1-year-old claims, 73.4 percent of those are 
complete, and they have done it while increasing their quality 
5 percentage points at the claim level and another 3.51 percent 
at the medical issue level.
    But let me tell you how we did that. We did that by all-
hands-on-deck--everybody in the Nation working on a national 
workload ``queue'' model that we have done over the last 8 
months which helped all veterans regardless of State borders 
and have benefited from that help.
    Senator Brown. OK. Thank you.
    Let me tell you a story. Sean Malone is a former Marine 
sergeant in New Vienna, Ohio. His claim had been pending in the 
development phase for 15 months. It appears the allegedly 
missing evidence that slowed his claim was already in the 
system but it was not routed to whoever is evaluating his 
claim.
    It appears to me, and let me make sure I understand this, 
that there is a discrepancy. When there is a discrepancy 
between a claimant's status between paper mail and online--I 
understand it seems troublesome when requested evidence is 
missing or overdue.
    My understanding is that there is no information provided 
online or in paper form about what evidence is outstanding, and 
there may be a discrepancy between the notification that there 
is evidence outstanding in paper format versus online.
    Is that correct, and if it is, what do you do, what do we 
do to try to eliminate that discrepancy? In other words, 
whether you are filing online or are filing by paper, on paper, 
that one, you need to know that there is evidence missing 
whether it is online or paper; second, you need to know what 
specific evidence it is. It seems that we are falling short 
depending on how you file on either or both of those.
    Ms. Hickey. So, Senator Brown, I can absolutely both tell 
you what we are doing and what help we need.
    Senator Brown. OK.
    Ms. Hickey. This is an easier-to-do thing in IT and in 
automation: file to load that file directly onto that veteran's 
eBenefits account, but that takes a fully-funded IT budget in 
January when the CR expires.
    IT for us is the way forward for really providing that even 
higher level of service to our veterans, their family members, 
and their survivors.
    I will also say our VSOs who have met us online through the 
stakeholder enterprise portal will start to get that kind of 
information as well, but that also relies on a strong IT 
budget.
    Senator Brown. OK. Thank you, General.
    Mr. Chairman, thank you.
    Chairman Sanders. Thank you, Senator Brown.
    Senator Isakson.
    Senator Isakson. General Hickey, what is a B2 error?
    Ms. Hickey. Senator, a B2 error is an examination error, 
either an insufficient exam or an exam where we asked for the 
wrong kind of exam, or a claim where we did not ask for an exam 
and we should have. That is a B2 error.
    It had been, singularly prior to this year, our highest 
exam error, our highest error in general. But we put a big 
focus on it; we asked how do we go after the biggest error we 
make in the system. And I literally put it in all of our senior 
leaders' performance standards last year. I said you will 
reduce your B2 errors by 50 percent. Which they did.
    Senator Isakson. What is it about the letter that you sent 
to the Los Angeles office that they misinterpreted that caused 
them to have a 91 percent error rate?
    Ms. Hickey. I would like to ask, since she has the very 
explicit language in the letter and had the conversation, I 
would like to defer that question to Ms. Diana Rubens, the 
Deputy Under Secretary for Field Operations.
    Ms. Rubens. Thank you, ma'am. Thank you, Senator Isakson.
    Obviously, the Los Angeles Regional Office had a problem 
with B2 errors, as they interpreted the guidance that went out. 
It was, ``do I have to wait for an exam that has been ordered 
or do I need to order an exam. The right answer, sir, was yes 
in both cases.
    They misinterpreted that. Did not order exams when they 
should have. Obviously as soon as they discovered they had a 
spike in their B2 errors, they worked very quickly, as the 
Under Secretary has indicated, to correct that.
    Ms. Hickey. I will also add----
    Senator Isakson. Excuse me. So, they misinterpreted and did 
not order an exam to justify a provisional decision. So, the 
error was they did not order the exam they should have ordered? 
Is that correct?
    Ms. Hickey. Senator, if I can answer that question. In many 
of those cases, they did order an exam but they made the 
decision before they got the exam results back. In other cases, 
they did not order the exam. But there is a mix of that.
    Senator Isakson. Is there a particular medical problem that 
causes your adjudicators the biggest problems? Is there a 
particular medical condition?
    Ms. Hickey. So, we have put TBI at the top of the list for 
some of those medical conditions. I will tell you that is one 
of the things you do see in our IG reports because our IG is 
focused on that narrow subset of claims when they go out to 
look at us.
    In fact, what I will tell you is in the testimony last 
week, they cited those errors but what I would like to tell you 
was in none of those errors cited was there at entitlement 
problem to the veteran. The veterans still got what the veteran 
deserved.
    We made a process error where we did not get the second 
signature but not an outcome error. I will say I do appreciate 
it when the IG tells me we have a process where we have set a 
policy and we have people not doing what we said in policy.
    Though in many cases, the errors that they call us on are 
not an outcome to the veteran problem. They are that we are not 
doing, what we have given out as policy in the process 
perspective, and that is what was reflected in the TBI 
condition.
    But I do appreciate when they tell me that somebody is not 
following policy. That helps us clean that up.
    Senator Isakson. Would it be fair to say that soft tissue 
determinations are the most difficult for VA to make a final 
determination on?
    Ms. Hickey. I cannot state that, Senator Isakson. I will go 
look to see if there is any data that sheds any light on that 
for us.
    Senator Isakson. Well, my personal observation is that I 
think it would be because it is the most difficult assertation 
to make.
    One other particular question. Has Secretary Petzel 
retired? I know he was getting ready to retire.
    Ms. Hickey. Senator, he has not yet but we have gone 
through the initial processes to begin the selection for his 
replacement.
    Senator Isakson. Well, I just want to make one comment for 
you to deliver back to Secretary Shinseki and Mr. Petzel. We 
had a hearing in Atlanta in August 2012 on the veteran suicide 
problem at the Atlanta VA but also focused nationwide on the 
problem--that 22 veterans a day, 8000 a year are taking their 
own life--and in certain cases in the Atlanta VA, we found some 
holes in the follow-up on patients who came into VA and were 
followed up, were not followed up on in terms of their 
connecting with their counseling and their further 
appointments.
    I want to thank VA for the attention they have been paying 
most recently to the veteran suicide issue but please remind 
them that until we get our arms around this we are going to 
continue to focus like a laser beam on that problem because it 
is the single biggest problem facing our veterans community 
today.
    Ms. Hickey. Senator Isakson, we will join you in focusing 
extremely hard on this issue. Even the loss of one life due to 
suicide is one too many.
    Senator Isakson. Thank you very much.
    Chairman Sanders. Senator Isakson, thank you very much.
    Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman.
    I want to join Senator Isakson and commend him for raising 
this issue which is linked to another problem. Increasingly 
prevalent among our veteran community is the invisible wounds 
of Post Traumatic Stress often linked to suicide, unfortunately 
though not always.
    I want to call attention to the effort that has been made 
with respect to veterans of previous wars, Vietnam and others 
before Iraq and Afghanistan, to qualify them for benefits 
because of Post Traumatic Stress, that they may have suffered 
with a condition that was unrecognized at the time, in fact, 
completely undiagnosed and untreated but very much a factor for 
them.
    I know that there has been a settlement recently with 
respect to Mr. Shepherd of Connecticut whose claim was brought 
by the Yale Veteran Legal Clinic. My hope is that perhaps that 
recognition can become more general with respect to other 
veterans and I would like to ask for a report back, an update, 
as to what the status of consideration is in VA of Post 
Traumatic Stress and at the Department of Defense in terms of 
what veterans of previous wars have suffered.
    Let me focus, though, on the appeals issue which has been 
raised here. Why does VA have no time measure for appeals? You 
mentioned that you do not keep track of--maybe I misunderstood 
your point there--but you do not have a metric on the time 
taken for appeals.
    Ms. Hickey. Senator Blumenthal, we absolutely have a metric 
down to every single area on the time it takes to do the 
appeals workload. What I said was we did not have a 125-days 
similar goal, or stretch goal as has been mentioned before.
    If I can really quickly thank you for bringing up the PTSD 
issue because I would like to share on it. Our Secretary made a 
very effective decision to really enable many, many more 
serving members from all cohorts to have access to VA as a 
result of having PTSD.
    By example, in 1990 we had 49,000 service veterans on our 
PTSD roles. In 2009 when the Secretary came, that number was 
355,000. Today, it is over 750,000 people that we now are 
paying benefits to and now have access to different forms of 
health care in VA associated with PTSD.
    The last thing I would just point out is, though it was not 
remarked in last weeks HVAC hearing, one of the three things 
that IG had been regularly looking at us for was the accuracy 
of our PTSD decisions.
    They have recently informed me they are not seeing 
problems. So, therefore, they are going to discontinue looking.
    Senator Blumenthal. I want to come back to the appeals, if 
I may.
    Ms. Hickey. Yes, please.
    Senator Blumenthal. I stand corrected. In fact, I misspoke. 
I understand that you do measure the length of time for appeals 
and that you do not have the 125-day metric which would have 
been the more accurate way of putting it. But what I am 
troubled to find is that, unless I am wrong, the average length 
of appeals has actually increased by about 7 percent since 
March. Is that correct?
    Ms. Hickey. Senator, I do not have that metric specifically 
but what I can tell you is the rate of filing has not 
increased. In fact, it has been pretty steady----
    Senator Blumenthal. Well, what about the rate of decision?
    Ms. Hickey. It has not changed either.
    Senator Blumenthal. The average length of time?
    Ms. Hickey. Let me answer you by example. For the claim 
decisions we make in a year, about 11 percent of our veterans 
file what we call a Notice of Disagreement. At the end of a 
process that includes our regional offices, about 4 percent of 
those go forward to the Board of Veterans' Appeals. At the end 
of the Board of Veterans' Appeals process, about 1.2 percent or 
about 12,500 claims are overturned by the board who disagree 
with our decision in the claims process.
    Senator Blumenthal. Is at number increasing or diminishing?
    Ms. Hickey. Interestingly enough, it has held fairly 
constant in the last several decades. I will tell you I do not 
know what it means but this Fiscal Year 2013 is down.
    Senator Blumenthal. Can you get us the number, and I 
apologize for interrupting, but my time is expiring.
    Ms. Hickey. I understand.
    Senator Blumenthal. Could you get us the number for the 
length of time that is required for resolution of appeals? I 
understood it increased by 7 percent.
    I would also like you to tell me why the percentage of 
backlog claims in the Hartford office has increased from 57 to 
58.6 percent?
    Ms. Hickey. Senator, actually my data has something 
different. My data shows that your inventory in Hartford is 
down 9.1 percent; and your backlog is down 6.0 percent. The age 
of your claims is down 59.1 days right now. Your 2-year-old 
claims, you have none left in Hartford. Your 1-year-old claims, 
you only have very few, 18 of them remaining. Your quality is 
actually up 8.6 percentage points and your issue-based accuracy 
is up to 96.05 percent, a 1.73 percentage increase.
    And that is while you also have been helping in the 
national workload.
    Senator Blumenthal. May I ask you what date that is?
    Ms. Hickey. This is as of November 30, 2013.
    Senator Blumenthal. I had data as of December 7 which is 
more recent data. It shows that the backlog has increased from 
57 percent to 58 percent. I would like you to tell me why.
    Ms. Hickey. Senator Blumenthal, we will absolutely take 
that and try to explain that for you.
    Senator Blumenthal. Thank you.
    Ms. Hickey. You are welcome.
    Chairman Sanders. Thank you, Senator Blumenthal.
    Senator Boozman, are you up? Or Senator Heller, I think is 
up next.
    All right, Senator Heller.
    Senator Heller. Thank you. Thank you very much, Mr. 
Chairman and Ranking Member Burr, again for having this 
hearing. In my opening statement I said, General Hickey, that I 
believe that you knew this was a problem and you want to solve 
this problem and you are going to do everything you can to 
solve it. So, I appreciate that.
    You have been giving some interesting statistics about 
Hartford and Cleveland. Can you give me the Reno statistics?
    Ms. Hickey. I absolutely can.
    Senator Heller. Thank you.
    Ms. Hickey. I will share them with you now.
    Senator Heller. Thank you.
    Ms. Hickey. We did have a big problem in Reno. I am pleased 
that we had an opportunity to address some of that problem, 
though we know we still have others to solve there.
    Inventory is down by 42.1 percent. The backlog is down by 
57.7 percent. The inventory, the age of the inventory they have 
in their system right now today remaining is 194.9 days younger 
than it was this time last year.
    They have eliminated all but 13 of their 2-year-old claims 
for a 94.5 percent improvement. They have eliminated 90.9 
percent of all their 1-year-old claims, and they have increased 
their claims space accuracy by 8.38 percent to over 92 percent, 
and their medical issue accuracy has been at 95 percent and 
remains at 95 percent.
    Senator Heller. Thank you. I guess my concern is have you 
had a chance to make it to the Reno RO. I know you have a lot 
of ROs.
    Ms. Hickey. I have actually been to Reno three times in 2 
years and a few months.
    Senator Heller. You know, we always rank it as the worst 
RO. Can you give me any insight as to why that is the case and 
why we continue to be one of the worst?
    Ms. Hickey. Senator, this was not always a challenge for 
the Reno office. In fact, they have had times where they are on 
the top of the list. But they did have a growth of claims at a 
time where they had some vacant positions in the workforce, and 
simultaneously they had some retirements in the workforce. 
Between those kinds of numbers when you are a very small 
regional office, as Reno is, you see the impact pretty quickly.
    Senator Heller. You cited in some of your answers and I 
think a little bit in your opening statement about some of the 
concerns in surges that we have. My concern is that I think it 
is going to take maybe one major court decision or perhaps 
another military action to get us where we were a couple of 
years ago. I am not sure the structural changes are there.
    We are looking at improvement, and I am glad to see that. 
But I know VA has cited a number of reasons as to why we got to 
where we were recently and that is obviously the changes to the 
diseases associated with Agent Orange.
    Obviously, court cases that have expanded VA's duties--and 
frankly I think VA's own outreach and efforts--have increased 
claims also.
    I guess what we are trying to hear in this Committee is how 
do we keep a surge from erasing perhaps all of these 
improvements that we have seen in the last year?
    Ms. Hickey. Thank you, Senator, for your questions; and I 
will reflect back to my DOD days if I might for a moment.
    When we would go into a contingency operation, we did not 
go in with the resources we had. We went into that contingency 
operation with a supplemental that addressed the new 
requirements that that contingency brought to us that were 
outside of the planning environment.
    I will tell you from the way we look at it, every time we 
get a new thing--you are right--I am telling you I will get to 
2015 and 125 days except if I have a large perturbation of 
something like we experienced in the Agent Orange environment--
260,000 claims in our inventory overnight in October 2010--that 
will kill us.
    So, I cannot budget for a totally unknown, unprojected, 
inability-to-plan-for contingency operation that I do not know 
is coming, and that I have no idea will happen in a court case. 
But I do think in the future we ought to consider resources 
along with some of those new requirements. I think this needs 
to be addressed.
    Senator Heller. Thank you.
    Mr. Chairman. Senator Heller, thank you very much.
    Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman.
    Again, we really do appreciate all your efforts. This is a 
difficult situation. I know you are working very hard.
    I was in the veterans' benefit office or got to visit with 
them last week in the Little Rock area. You know, they have a 
good story to tell. They are working very, very hard. They 
mentioned the partnerships with the VSOs and our county veteran 
service officers, the great job that they were doing getting 
the pre-material ready so that they would have less problems.
    I have a couple of things. The IG has not been real pleased 
in the sense you mentioned, you know, the key to this was the 
IT in the future. We struggled with that. We have had some 
problems.
    Can you tell us, besides rolling out new versions, what is 
VA doing to remedy the issues in regard to that particular 
problem?
    Ms. Hickey. So, first----
    Senator Boozman [continuing]. Meaning, the benefits 
management system.
    Ms. Hickey. Thank you, Senator, I will address that.
    First, let me just thank this Committee and specifically 
Senator Burr for your leadership around the fully-developed-
claims process. That is tremendously good for our veterans and, 
frankly, it is tremendously good for us too and our ability to 
meet the needs of our veterans. You have provided an awesome 
tool to our VSOs who are just rolling in in big ways, including 
your county service officers, with more and more fully-
developed claims.
    So, I just want to acknowledge what you have done there in 
that leadership role. Now, our veterans get a whole year of 
additional benefits as a result.
    Let me speak now to the VBMS system. I will tell you this 
time last year when we were deploying VBMS, we did have some 
latency issues. I spoke to you about that the last time. We had 
about three major issues with VBMS.
    We rolled in hard. We are doing what the industry calls 
DevOps now which is when they put the developer with the 
operator, sitting side-by-side, fixing issues as we go, so that 
it works for the user and the coder knows what to code right 
the first time. I believe a lot of those issues were resolved 
with the January 2013 release that cleaned up a lot of those 
really big issues.
    Do we have things that happen every now and then? Yes. I 
will tell you last week we had an access down time on VBMS, not 
because of VBMS. We had another underlying infrastructure that 
affected all of our systems.
    So, that has been fixed, that has been resolved. It is not 
the system itself. It was the underlying hardware. There was a 
server somewhere that needed a new server.
    But I will tell you we have it all backed up. And I will 
tell you frankly on that day the ingenuity of our employees 
said, ``run to ground; find every paper claim we can find in 
the system that is left and start working those on the old 
legacy system.'' As a result, we still had a decent amount of 
production that day.
    That is what I would tell you. I think VBMS is delivering 
every 12 weeks new and improved functionality.
    I hear that from my employees sitting at the keys, banging 
it out, because I talk to them once a week on a pulse check 
call for 2-3 hours. Nobody else is allowed to do it.
    I talk to bargaining unit employees only who are using the 
system and get to their challenges and their likes. They are 
telling me if you are a rater you really like it. If you are a 
VSR, there is still a little change management going on because 
I have built the checklist into the system that does not allow 
you to work around things and create errors. So, there is still 
some adjustment from our VSR's in that respect.
    Senator Boozman. Right. Tell me about what has happened to 
the non-rating actions, those claims. We focused a tremendous 
amount, rightly so, on the other but the dependency 
adjustments, changes to clothing allowance, things like that. 
What has happened to those claims?
    Ms. Hickey. I am happy to do so. I am trying to get to my 
page that gives me the explicit number but what I can tell you 
as I am flipping pages is that, in addition to having the all-
time record-setting year for rating claims this year, I am 
happy to report that for the non-rating workload we also had 
the all-time historical record for those claims, doing more 
than 875,000 of those non-rating pieces. That is a 16 percent 
increase over last year.
    Senator Boozman. You mentioned to the Senator that was 
concerned about his statistics and you mentioned that his 2-
year rate had gone down significantly.
    How much of that would be provisional in regard to the 
category of over 2 years?
    Ms. Hickey. Probably very little when we have at most 
14,000 claims across the Nation out of 512,000 claims.
    Senator Boozman. Thank you.
    Ms. Hickey. Thank you.
    Chairman Sanders. Senator Boozman, thank you very much.
    General Hickey, I would be remiss, having heard your status 
reports from Connecticut, Ohio, and Nevada, to not ask you 
about Vermont. How are we doing in Vermont?
    Ms. Hickey. Mr. Chairman, I will tell you that White River 
Junction has decreased its inventory by 25 percent and has 
reduced its backlog by 34 percent.
    The days that your veterans are waiting for their 
decisions, they have been reduced by 127 days. They are wading 
into today's inventory. They have completed 18.4 percent more 
claims this year than last year. They have no 2-year-old 
claims, those are 100 percent complete. And they have no 1-
year-old claims, they are 100 percent complete, while they have 
also increased their quality at the claim level by 15 
percentage points, almost 16 full percentage points in White 
River Junction, and their issue-based quality is up at 96 
percent for a 4.25 percent increase.
    Chairman Sanders. OK. Thank you.
    Let me raise very briefly two issues. I know that Senator 
Burr you have some questions you want to ask.
    I want to talk a little bit about Web-based claims filing. 
I want to follow up on an issue I wrote the Secretary about 
last week and I appreciate both your and the Secretary's 
efforts to finally move VA into an electronic claims processing 
environment, something obviously long-overdue.
    However, as VA continues its transition to a paperless 
environment, it needs to ensure that it does not inadvertently 
disadvantage certain populations of claimants. That is why I am 
so concerned about an ongoing transition of web-based claims 
filings from the veterans online application, VONAPP, to 
eBenefits.
    At present, pension claimants can no longer file online as 
I understand it. This seems like a step in the wrong direction. 
The veterans with service prior to 1988 and no Defense 
Enrollment Eligibility Reporting System, or DEERS, identifier 
must physically visit a regional office before gaining the 
necessary access to file an application for disability 
compensation online. You, I think, can understand how difficult 
that may be for elderly veterans or those living in rural 
areas.
    I would very much urge--I would make the same request of 
you that I made to the Secretary--first, will you restore 
VONAPP filings capabilities for pension applicants until such 
time as pension applications are available in eBenefits?
    Ms. Hickey. Mr. Chairman, I will take this one. We own this 
one. I did see your letter. We are responding to your letter 
but let me just give you the elevator response here.
    The VONAPP capability still exists; however, it is on our 
pension page. Now, we have not, and I own this, done a very 
good job about telling our veterans that is where it is.
    So, we will take that for action and we will get the 
message out there better and faster so those applicants can 
still use some of that capability.
    Second, just as I say to every veteran, I will say it again 
today, I think one of the best ways to navigate our system is 
to get a certified VSO, State, county, Federal, local somebody 
to help. I really do value that they give it----
    Chairman Sanders. I know that but not every veteran has 
access.
    Ms. Hickey. Absolutely, I understand that.
    What I will tell you is that we have built something called 
the 527EZ for our veterans. It is the counterpart to the 526EZ 
online form on eBenefits. That will be loaded eventually into 
eBenefits. It depends on IT dollars.
    What I can also tell you that I hope will help is, and I 
have seen this--I was helping a veteran myself on this--when 
you go in for an eBenefits account, if you are one of those 
veterans who do not show up in the DEER system, there is some 
functionality on the bottom of that page. We need to do a 
better job of highlighting it which I will take that for 
action.
    But if you click on that and say, I am having a problem, it 
goes to three people at our benefits assistance service who are 
dedicated to getting you in the system. We need to do a better 
job about getting that word out.
    Chairman Sanders. Not everybody is as familiar with IT as 
you are.
    Ms. Hickey. I understand, Mr. Chairman. Thank you. We will 
do a better job about getting that word out across the system.
    Chairman Sanders. I think my last comment is that you have 
heard a lot of concern this morning about the appeals process. 
We are concerned about the rise in the appellate workload 
pending at the regional offices.
    The average amount of time it takes to resolve an appeal 
which, according to VA's performance and accountability report 
was 866 days in 2012, is clearly unacceptable. So, what I want 
to hear from you is how, with very specific ideas, we are going 
to improve the processing of the appellate workload, and I 
would very much like to hear from you within 45 days, by your 
telling this Committee the actions VBA will take to improve the 
processing of the appellate workload at the regional offices.
    Can I have your commitment on that?
    Ms. Hickey. Mr. Chairman, yes, you can and I would be happy 
to deliver that.
    Chairman Sanders. Thank you very much.
    Senator Burr.
    Senator Burr. I thank the Chairman.
    General Hickey, thank you for your comments as it relates 
to fully develop claims. I think the Committee has always tried 
to provide anything that they thought might make the system 
better. I think it is good to know that that is having an 
impact.
    Let me reiterate to you and your team anything, and I say 
anything, that the Committee can do from a legislative 
standpoint that makes the situation better we are anxious to 
hear those requests. I would hate for this hearing to go on 
without us not reiterating that one more time.
    In your conversation with Senator Boozman as it related to 
the VBMS, I have got a follow-up because last week the 
Inspector General testified that claims processing staff had 
complained that the VBMS system has, ``spontaneous system 
shutdowns, latency issues related to slow time to develop 
documents such as medical evidence for review, longer times to 
review electronic evidence, mislabeled electronic evidence, and 
mixing evidence from one veteran's electronic file to another 
veteran's file.''
    Is that an accurate depiction by the Inspector General?
    Ms. Hickey. Senator Burr, I think it may be a very dated 
perception by the Inspector General.
    Senator Burr. Have you heard similar complaints from 
employees?
    Ms. Hickey. Senator, a year ago I may have heard similar 
comments from employees which I listened to every single week. 
We did have latency issues last year. We did have some issues 
in the system. We do not have the same issues in the system.
    But if I can couch that really quickly, there is some 
change management that has to happen in this, as well. When you 
are doing something electronic, you are standing there looking 
at the screen the whole time. You forget about how much time 
you had to waste when it was in paper. You had to go upstairs 
two flights, go find the file in the file bank, pull the file 
out of the file bank, run downstairs, go to the mail room, find 
the associated mail that was hanging around in paper, bring it 
back, go to the copier, go get the sticky 3M notes, write it 
all down.
    You sort of forget about all that logistical time that you 
used to spend. So, suddenly 3-20 seconds feels like a big deal 
when you are standing looking at a screen doing nothing.
    Senator Burr. But you are actively involved in a weekly 
conversation on the phone and you are not hearing any of this?
    Ms. Hickey. I am. I hear occasionally now, I heard it a lot 
last November. So, I will acknowledge that. I heard it a lot 
last November, while I had the IT guys sitting there with me, 
and the VBMS program management office sitting there with me, 
and we are asking them literally for the note that they sent in 
to the national help desk on it. We are looking at exactly the 
right time and what happened and how it needed to be fixed.
    Senator Burr. OK. We will follow up with the IG to see the 
timeliness of what he reported in his testimony.
    Ms. Hickey. Thank you, Senator.
    Senator Burr. The Monday Morning Reports also reflect there 
has been an increase in the number of days, the number of work 
items pending in categories like correspondence, miscellaneous 
determinations, and dependency adjustments and that these have 
been increases that have been pending for a long time.
    For example, the number of dependency adjustments increased 
from 48,000 in 2010 to 228,000 today and 71 percent have been 
pending more than 125 days compared to 19 percent in 2010.
    Let me just be blunt. Has VA been putting off this type of 
work in order to focus resources on driving down the backlog 
numbers?
    Ms. Hickey. As equally responsive to you, Senator Burr, no. 
It is indicative by the fact that we have done an all-time 
record high number of those, 875,000 of them and we are 16 
percent more productive this last year over the previous year.
    So no, we are not putting them off but I have good news to 
tell you----
    Senator Burr. So, why are these piling up?
    Ms. Hickey. Because we are doing more claims, Senator. As 
we do more claims, we get more dependency claims. As you all 
have told me, and I accept that, as we have been slow, you have 
sent more letters, rightfully so, that we need to acknowledge 
and respond to at the local level so I will acknowledge that.
    I am trying hard to get that mail volume down for you by 
doing that claim right and well for our veterans and their 
family members and survivors, I acknowledge there are a lot of 
letters that have grown over this time.
    But what I will tell you, we do have a really good solution 
set to talk to you about, and I think non-rating workload is 
perfect for automation. It does not have an adjudicative, 
judgmental, non-objective rule set associated with it.
    We have just built this last year, something called RVPS, 
focused at dependency claims. When you file a claim online on 
eBenefits today for dependents, 40 percent of them go through 
in a single day and pay. This week we are loading another set 
of functionality focused at our retiree population. It will 
take 60 to 70 of those, flow them through in a single day--
automated, done and moving out.
    I think this non-rating workload is really, really 
conducive to automated IT solutions. That is where we are 
focused for this next year.
    Senator Burr. Ms. Rubens, VA's testimony mentions 
generation three of the VBMS and that it will deploy next year 
with additional capabilities including a national queue, ``will 
route claims automatically based on VBA's priorities.'' I think 
that is in large measure what you were just talking about, 
General.
    It says that the processor will place the claim with the 
next best person to work based upon the skill level and 
national policy.
    Is VBA working on a national policy?
    Ms. Rubens. Thank you, Senator Burr.
    The effort behind the national work queue really is to take 
things like our Priority 1 claims today--our Congressional 
Medal of Honor recipients, our former POWs, the category, if 
you will, of the homeless veteran, the terminal, the hardship--
that is, of course, our first priority.
    Then as we continue to work the aged claims down, we 
started with the over two category, then 1 year, and now we are 
all on the 334-day bucket. Those are the kinds of policies that 
the national work queue will help with to make sure that those 
claims get routed properly, whether that is to a member of an 
express lane, a core lane, or a special operations lane 
depending on the nature of the claim to ensure we are, if you 
will, managing that as efficiently as possible.
    Senator Burr. Am I just misinterpreting the statement that? 
I understand the part about routing the claim the most 
appropriate place regardless of geographically where that is. 
Is there an overarching national policy that exists on top of 
that? Or is that routing national policy?
    Ms. Hickey. Well, Senator Burr, those categories that she 
just mentioned including, by the way, we put fully developed 
claims in that because we want to incentivize folks to bring us 
in a fully developed claim.
    The national policy is just saying what is the workload we 
want you to do first. So, we do not want you to go grab 
something easy off the list and off the shelf just because it 
is easy for you to do. We want you to do the things we say 
nationally are critically important for us to do to get to 125-
98.
    Senator Burr. My question earlier was, what participation 
did critical stakeholders have in the development of that 
national policy?
    Ms. Hickey. Well, I personally engage monthly with the 
executive directors of all of the VSOs and also monthly with 
all of the executive directors from the military support 
offices, the MSOs, as well.
    We go over every single initiative we are doing, every 
single strategy they do.
    Senator Burr. Do they contribute to the development of that 
national policy?
    Ms. Hickey. They do. They give us input. They say where 
they think we should do something differently. We change and 
address and adapt in that environment as well. I completely ran 
the old claims initiative through and by them. In fact, I think 
we called a special meeting just before that.
    Senator Burr. Last, if I can----
    Chairman Sanders. I have got to run. Senator Burr will take 
over.
    I want to thank all of you for being here. It is very clear 
to me that we are making significant progress. It is also clear 
to me that there are a lot of problems that remain. This 
Committee looks forward to working with you. Thank you.
    Ms. Hickey. Thank you, Chairman.
    Senator Burr [presiding]. Thank you, Mr. Chairman.
    General, VBMS 6.0 is scheduled to be released this month 
which includes delivering initial capabilities to the Board of 
Veterans' Appeals.
    As we continue to see a decrease in the number of 
backlogged claims, it appears we can also expect to see the 
number of appeals increase. As VBMS is deployed to the board, 
it is critical that it does not hamper their ability to 
adjudicate appeals in a timely fashion.
    The functions and requirements of regional offices and 
boards are significantly different. What steps has VBA and the 
Office of Information Technology taken to tailor-make the VBMS 
system to meet the need of the Board of Appeals?
    Ms. Hickey. Senator, great questions. I will tell you that 
from the get-go the board has been part of the requirements 
development process and, frankly, has driven the requirements 
development process because it is, in large part--at the end of 
the day we are building that functionality out for them and 
releasing them in this version.
    We will add functionality just as we do every 12 weeks for 
the claims side. We will add functionality over time for the 
appeals side as well, but we will not do that in a vacuum.
    In fact, I have to take the lead off of them for building 
out of their requirements.
    Senator Burr. Great. Well, let me reiterated what the 
Chairman said. We are grateful to you for the job you do. Thank 
you for being here today.
    General, if there is one take away I would at the 
conclusion of this emphasize with you, this inconsistency 
between what some of the VSOs perceive of the quality debate 
and what your numbers show the quality to be is something I 
hope you will focus on as to how we close the gap.
    Both cannot be right; both cannot be wrong. I think that it 
is important that we all work off of the same metrics. I have 
asked you to share some metrics with us, and I hope you will 
get that here in a timely fashion.
    By the same standpoint, we both know we still have got work 
to do and I want your team to know that the Committee is a 
willing partner to try to accelerate that in any way, shape, or 
form that we can, but not to sacrifice quality. I think we are 
all in agreement with that.
    Ms. Hickey. We are absolutely in agreement with that, 
Senator.
    Senator Burr. We thank you for your time.
    This hearing is adjourned.
    [Whereupon, at 11:44 a.m., the Committee was adjourned.]
                            A P P E N D I X

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          Prepared Statement of Paralyzed Veterans of America
    Chairman Sanders, Ranking Member Burr, and Members of the 
Committee, Paralyzed Veterans of America (PVA) would like to thank you 
for the opportunity to offer our views on the VA's transformational 
progress, in particular, our views on the adjudication of VA's most 
complex disability claims to ensure quality, accuracy and consistency 
on these complicated issues. PVA has a unique expertise in dealing with 
complex claims because our members have complex disabilities as a 
result of spinal cord injury or dysfunction.
    The Department of Veterans Affairs (VA) has fully deployed its new 
processing model for disability compensation claims, called the 
Veterans Benefits Management System (VBMS), in order to reduce the 
number of backlogged claims. This paperless processing model places an 
emphasis on expediting claims where the supporting documentation is 
fully developed by the Veteran. But the success of VBMS greatly depends 
on the process design, like rules-based processes, and supportive 
technologies like Special Monthly Compensation (SMC) calculators, that 
undergird the system.
    Unfortunately, rules-based systems treat all veterans the same and 
can be flawed by imperfect rulemaking and application, invariably 
leading to increased errors for these claims. This is the challenge for 
a rules-based computer system; it does not have the human interaction 
to fully understand the circumstances of a specific injury. The 
numerous issues faced by veterans with catastrophic injuries create a 
complex set of outcomes that cannot be easily reconciled by logic-based 
systems that cannot appreciate nuance in disability assessments. 
Calculators used in rules-based systems historically fail to compute 
the right ratings for persons with multiple issues. This type of 
decision analysis uses decision trees that attempt to enable the rater 
to simplify and resolve complex questions. This technique, however, can 
be problematic when the analysis involves highly qualitative 
assessments that are reduced to binary choices.
    This processing model also handles claims for veterans who have 
unique circumstances, such as financial hardship, homelessness, or 
serious injuries or disabilities in special ``segmented lanes.'' The 
problem is the growth in the number of claims considered ``complex'' 
since September 11, 2001. Complex claims, according to VA, are 
characterized by the number of issues per claimant filed, which has 
doubled to 8.5, when compared with claims from past wartime eras. Also 
of significance, of the 47,814 complex claims currently in the VA 
inventory, over half are backlogged. In fairness, this number has 
steadily decreased over time. But VA still takes too long to adjudicate 
these claims in many cases, particularly for our members with 
Amytrophic Lateral Sclerosis (ALS or Lou Gehrig's disease).
    PVA has developed unique expertise in dealing with complex claims 
because our membership is predicated on having one of the most complex 
disabilities an individual can have: spinal cord dysfunction, whether 
due to injury or disease. This can occur due to trauma, ALS, Multiple 
Sclerosis (MS), and other debilitating causes, and often manifests in 
both primary and secondary residual losses throughout the bodily 
systems, including the often under-regarded ``invisible'' aspects of 
injury like mental impairment, need for attendant care, and 
helplessness. Complex claims in this regard go beyond the mere number 
of issues.
    Accurately rating these losses for claim purposes requires 
expertise in neurology, physiatry, urology, psychiatry, and other 
specialty areas. But during Compensation & Pension (C&P) examinations, 
it is common to see a general practitioner authoring medical opinions 
on etiology, nature and extent of dysfunction and cumulative effect of 
separate yet concurrent disabilities. This is not a problem when the 
examiner devotes enough time to understanding the disability and its 
nuances before rendering a conclusion. However, this is not always the 
case. As a result, when these opinions result in lower ratings than the 
veteran should have received, the ensuing debate takes on a subjective 
hue when the regulations alone do not persuade a decision reversal.
    While VBA has instituted an evaluation system that assigns greater 
weight to complex claims, these claims are often too esoteric for 
journeyman raters, full of embedded issues and ambiguities both legal 
and medical that lead to errors. Moreover, these issues do not lend 
themselves exclusively to rules-based analysis without inductive, 
common sense reasoning in many cases, such as reasonable doubt 
provisions, which seems to have slowly disappeared from training and 
guidance for new raters. Working these cases requires a combination of 
experience and open-mindedness to make a correct determination. And 
while a VA claim of 90 percent accuracy could be accepted, it is 
completely possible that this average is due to 99 percent accuracy on 
simple claims and 50 percent accuracy on complex claims. This 
possibility is not very comforting to those with complex claims.
    For example, in one PVA case a veteran with ALS submitted evidence 
supporting a higher rating for Special Monthly Compensation at the R-2 
rate from his treating physician, thus verifying his need for skilled 
care in his home. Despite substantiating his need with credible medical 
documentation, he had to subsequently submit to a C&P exam at the VA's 
direction where the examiner concluded he did not need skilled care on 
a daily basis because he had some limited movement. Not only did the 
examiner improperly contemplate movement as a basis for determining 
need for care, VA misapplied its own regulation on resolving doubt when 
two expert opinions conflict. When common sense is applied, there is 
little doubt on the question of whether a veteran with ALS, an 
incurable, quickly debilitating condition with foreseeable, inevitable 
consequences, needs skilled care. This case out of the San Diego VA 
Regional Office illustrates what happens when a profoundly complicated 
set of disabilities, a lack of expertise, subjective interpretation of 
regulations, and rules that do not allow for a ``common sense 
override'' option collide in a veteran's claim. In this instance, the 
veteran presented enough evidence from his VA clinician, yet VA still 
required a VA examination per inflexible VA guidance in such cases (see 
M21-1MR Part IV, Subpart ii, Chapter 2, section H). While PVA commends 
the Veterans Benefits Administration (VBA) for implementing such 
initiatives as the Acceptable Clinical Evidence option, which allows a 
rater to decide based on the record in lieu of a C&P exam, this has not 
taken root system-wide and this needs to be disseminated nationwide.
    It would also help to eliminate redundancies such as unnecessary 
C&P exams that either corroborate the evidence of record or create 
arbitrary bases for denying a claim. PVA has long criticized VA's 
overuse of C&P examinations particularly when the evidence of record 
already substantiates the claim. These exams attempt to provide a 
snapshot of complex disabilities based on cursory review of the medical 
history and templates, called Disability Benefits Questionnaires 
(DBQs), that ask a lot of questions but not always the right ones. For 
example, ``need for higher level of assistance'' is not asked on the 
ALS DBQ, even though the terminal nature of the disease makes constant 
need for specialized care likely in virtually every case. And with the 
addition of rules-based calculators that make C&P exams a mandatory 
step in many instances, these incorrect decisions are given the patina 
of unassailable faultlessness. PVA is on record stating that rules-
based calculators and processing are not conducive to accurate analysis 
where complex claims, as we describe them, are concerned. They can be 
adequate starting points. But these claims require experienced raters 
who, for example, would not conclude that a veteran who can barely 
stand up due to lost ``useful'' function should be rated the same as a 
veteran who can walk but with difficulty. Or that a veteran with 
paraplegia cannot be considered in need of aid and attendance because 
he manages his neurogenic bowel and bladder and dresses independently 
thus no longer being functionally disabled.
    Experienced raters, not algorithms, best factor in the nuances of 
Special Monthly Compensation and areas of subjective interpretation 
that can lead to an incorrect decision. For this reason, PVA has 
previously asserted in testimony before the House and Senate Committees 
on Veterans' Affairs that reducing the backlog through the use of 
technologies cannot come at the expense of accurately rating the most 
complicated claims in the inventory. This is why PVA trained its 
service officers to fully develop a claim long before VA idealized the 
Fully Developed Claim concept. Our service officers know what questions 
to pose to an examiner, how to reconcile the medical and legal 
ambiguities, and how to draw a path toward entitlement for the rater 
from the time the claim is filed. But not every rater, particularly the 
new ones, can or feel empowered to see past the inflexible rules and 
seemingly indisputable C&P examinations enough to question or deviate 
when necessary.
    Perhaps that is how it has to be in the grand scheme of the entire 
backlog and we understand that rules are critical to organizational 
success. But the exceptions are the rule for PVA. A veteran with ALS 
died in hospice while his claim was pending before a ``Special Ops'' 
lane coach because he needed a DBQ despite the fact that the evidence 
of record supported entitlement. A utilitarian system that successfully 
delivers benefits to one million veterans, but overlooks the most 
vulnerable, is inconsistent with the moral obligation derived from 
Lincoln's promise to those who served our country. As VA celebrates the 
success in reducing the backlog through the use of new technologies and 
innovative processes, more attention now needs to shift toward 
developing strategies for adjudicating complex claims more timely and 
accurately.
    PVA believes there are several things that can be done to improve 
support to veterans needing SMC:

     SMC cases should be assigned only to the most experienced 
raters and VA must ensure that new raters are properly trained on SMC 
and its applicable regulatory doctrines.
     VA needs to allow for the application of a ``common 
sense'' override when rules-based processes limit or preclude necessary 
subjective analysis such as reasonable doubt or the weight/credibility 
of evidence, or fail to reconcile ambiguities in the medical evidence 
or legal applications
     It is critical that if denial of a complex claim is 
predicated on a C&P exam, particularly in cases of terminal illness or 
catastrophic disability, the reasons and bases must detail how the 
weight of all evidence was assigned, whether reasonable doubt applied 
or not, and whether the acceptable clinical evidence option was 
considered in lieu of ordering a C&P exam.
     VA must expand acceptable clinical evidence (VHA Directive 
2012-025) for nationwide implementation.
     And finally, VA must ensure the rules-based process allows 
for and encourages the application of 38 CFR Sec. 3.102, which defines 
``Reasonable doubt'' doctrine. Accordingly, ``When, after careful 
consideration of all procurable and assembled data, a reasonable doubt 
arises regarding service origin, the degree of disability, or any other 
point, such doubt will be resolved in favor of the claimant. Reasonable 
doubt means one which exists because of an approximate balance of 
positive and negative evidence which does not satisfactorily prove or 
disprove the claim.'' (Authority: 38 U.S.C. 501(a))

    Historically, due to the nature of our catastrophically disabled 
membership, PVA has been the subject matter expert for claims involving 
multiple injuries or conditions. PVA has enjoyed the privilege of 
providing VA with help in field studies and advice on processes that 
best meet the unique needs of veterans with catastrophic injuries. PVA 
National Service Officers have even participated in the training of VA 
claims processors. This valuable service has tremendously benefited 
both organizations and illustrates an important, enduring partnership. 
PVA's success in claims processing is due to diligence in training our 
service officers and in understanding the challenges faced by those 
with the most complex of cases. VA must do the same. Data processing is 
no substitute for education, training and understanding. We fear that 
as VA continues to aggressively look to reduce the backlog, complex 
claims may move further behind. While advances have been made in 
processing theses claims for those most needing, we caution the 
Committee and VA not to become too satisfied with successes that are 
achieved now while some veterans are still left behind. PVA looks 
forward to continuing to make VA aware of the need to keep complex 
claims in the forefront and to ensure they are properly and quickly 
adjudicated, particularly as they impact our most catastrophically 
injured veterans.
    We thank you for the opportunity to submit our views for the record 
and we would be happy to answer any questions you may have for the 
record.
      

                                  
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