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[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

 
                        OVERSIGHT HEARING ON THE ADMINIS- 
                        TRATION OF THE VETERANS BENEFITS 
                        ADMINISTRATION'S PENSION PROGRAM 
=======================================================================
                                HEARING 

                               BEFORE THE 

                      COMMITTEE ON VETERANS' AFFAIRS 

                         HOUSE OF REPRESENTATIVES 

                      SUBCOMMITTEE ON DISABILITY ASSISTANCE 
                          AND MEMORIAL AFFAIRS 

                          ONE HUNDRED NINTH CONGRESS

                              SECOND SESSION
                               _____________

                             SEPTEMBER 27, 2006 
                               _____________

          Printed for the use of the Committee on Veterans' Affairs 

                            Serial No. 109-66

                               _____________
                      U.S. GOVERNMENT PRINTING OFFICE
30-384 PDF                    WASHINGTON  :  2007
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                    COMMITTEE ON VETERANS' AFFAIRS
                         STEVE BUYER, Indiana, Chairman

MICHAEL BILIRAKIS, Florida                LANE EVANS, Illinois, Ranking
TERRY EVERETT, Alabama                    BOB FILNER, California
CLIFF STEARNS, Florida                    LUIS V. GUTIERREZ, Illinois
DAN BURTON, Indiana                       CORRINE BROWN, Florida
JERRY MORAN, KANSAS                       VIC SNYDER, Arkansas      
RICHARD H. BAKER, Louisiana               MICHAEL H. MICHAUD, Maine
HENRY E. BROWN, Jr., South Carolina       STEPHANIE HERSETH, South    
JEFF MILLER, Florida                        Dakota                
JOHN BOOZMAN, Arkansas                    TED STRICKLAND, Ohio   
JEB BRADLEY, New Hampshire                DARLENE HOOLEY, Oregon
GINNY BROWN-WAITE, Florida                SILVESTRE REYES, Texas
MICHAEL R. TURNER, Ohio                   SHELLEY BERKLEY, Nevada
JOHN CAMPBELL, California                 TOM UDALL, New Mexico
BRIAN P. BILBRY, California               JOHN T. SALAZAR, Colorado

                     JAMES M. LARIVIERE, Staff Director

             SUBCOMMITTEE ON DISABILITY ASSISTANCE
                    AND MEMORIAL AFFAIRS

JEFF MILLER, Florida, Chairman                SHELLEY BERKLEY, Nevada,
JERRY MORAN, Kansas                             Ranking
JEB BRADLEY, New Hampshire, Vice Chairman     TOM UDALL, New Mexico
GINNY BROWN-WAITE, Florida                    LANE EVANS, Illlinois

              PAIGE MCMANUS, Subcommittee Staff Director

                           C O N T E N T S
                         September 27, 2006
                                                                   Page

Oversight Hearing on the Administration of the Veterans Ben-
 efits Administration's Pension Program ....................          1

                          OPENING STATEMENTS

Chairman Miller ............................................          1
Prepared statement of Chairman Miller ......................         10

                         STATEMENTS FOR THE RECORD

Hon. Shelley Berkley, Ranking Democratic Member ............         11

                                 WITNESSES

McCoy, Jack, Associate Deputy Under Secretary for Policy 
 and Program Management, Veterans Benefits Administra-
 tion, U.S. Department of Veterans Affairs .................          2
Prepared statement of Mr. McCoy ............................         12

    POST-HEARING QUESTIONS FOR THE RECORD

Hon. Tom Udall .............................................         21

                     OVERSIGHT HEARING ON THE 
              ADMINISTRATION OF THE VETERANS BENEFITS 
                ADMINISTRATION'S PENSION PROGRAM 
                        ________________

                      Wednesday, September 27, 2006

                                      U.S. House of Representatives,
                            Subcommittee on Disability Assistance and
                                                   Memorial Affairs,
                                      Committee on Veterans' Affairs,
                                                    Washington, D.C.

The Subcommittee met, pursuant to call, at 10:30 a.m., in Room 334, 
Cannon House Office Building, Hon. Jeff Miller presiding.
Present: Representatives Miller and Udall.
Staff Present: Paige McManus, Majority Counsel and Mary Ellen 
McCarthy, Minority Counsel.
Mr. Miller.  Good morning, everybody.  This Subcommittee meeting will 
come to order.  Ms. Berkley is on her way over, but I wanted to go 
ahead and convene this final Subcommittee hearing for the 109th 
Congress, I think Ms. Berkley and the other members of our Subcommittee 
would agree that we have had an informative and what I feel a very 
productive two years.  The majority of our oversight hearings in this 
Congress have intended to lay basically a groundwork or foundation for 
the Subcommittee members on each of the VBA programs that we have 
jurisdiction over, and today we are going to wrap up by looking at VA's 
pension program.  In the next Congress the full Committee and our 
Subcommittee, Disability Assistance and Memorial Affairs, will delve 
deeper into the issues facing VBA and the Board of Veterans' Appeals.
VA's nonservice-connected disability pension program provides financial 
assistance to low income veterans who are totally or permanently 
disabled as a result of a disability not related to military service, 
or are age 65 or older.  VBA also provides pension benefits to certain 
low income surviving spouses and unmarried children of deceased 
veterans with wartime service.  There are approximately 530,000 
pensioners, veterans and survivors who receive nearly $3.5 billion in 
benefits annually.
[The statement of Hon. Jeff Miller appears on p.   ]

**********INSERT**********
Mr. Miller.  Today we have one panel.  Testifying for the Veterans 
Benefits Administration is Mr. Jack McCoy.  He is Associate Deputy 
Under Secretary for Policy and Program Management.  He is accompanied 
today by Mr. Steve Simmons, Deputy Director of the Compensation and 
Pension Service.  At Ms. Berkley's request we also have with us the 
managers of the three Pension Maintenance Centers.  That would be Ms. 
Filipov from the Philadelphia Regional Office and Insurance Center, Mr. 
John Limpose from the Milwaukee Regional Office, and Mr. Woody 
Middleton from the St. Paul Regional Office. Mr. McCoy is the only 
witness who will be testifying before us today.  The others are here to 
answer any questions that the Subcommittee members may have.  We talked 
about whether or not we wanted to put the timer on you today, Mr. 
McCoy. We will not do that since you are the only person.  That does 
not mean that we would want you to go for the next two hours, but we 
will give great latitude in your testimony.
We thank you all for being here.  Until Ms. Berkley comes, I will let 
Mr. Udall do a statement if he wants to.  Do you want to make a 
statement or wait for Ms. Berkley?
Mr. Udall.  I would just put her statement in the record, because she 
may or may not be here, and go ahead and go forward with our panel.
Mr. Miller.  All right, very good.  Without objection her opening 
statement will be entered into the record.  And with that, Mr. McCoy, 
you may begin.
[The statement of Hon. Shelley Berkley appears on p.   ]

**********INSERT**********

STATEMENT OF JACK MCCOY, ASSOCIATE DEPUTY UNDER SECRETARY FOR POLICY 
AND PROGRAM MANAGEMENT, VETERANS BENEFITS ADMINISTRATION; ACCOMPANIED 
BY STEVE SIMMONS, DEPUTY DIRECTOR, COMPENSATION AND PENSION SERVICE; 
LUCY FILIPOV, MANAGER, PENSION MAINTENANCE CENTER, PHILADELPHIA, 
PENNSYLVANIA REGIONAL OFFICE AND INSURANCE CENTER; JOHN LIMPOSE, 
MANAGER, PENSION MAINTENANCE CENTER, MILWAUKEE, WISCONSIN REGIONAL 
OFFICE; AND WOODY MIDDLETON, MANAGER, PENSION MAINTENANCE CENTER, 
ST. PAUL, MINNESOTA REGIONAL OFFICE.

                         STATEMENT OF JACK MCCOY.

Mr. McCoy.  Thank you.  Mr. Chairman, and members of the Subcommittee, 
I appreciate the opportunity to appear before you today to discuss the 
VA pension program.  The VA pension program provides financial 
assistance to wartime veterans and surviving spouses and children of 
wartime veterans based on financial need.  Pension recipients currently 
number over 530,000, including 330,000 veterans and 200,000 survivors.  
Annual benefit payments total approximately $3.5 billion.  The 
disability pension program assists wartime veterans with low incomes 
who are permanently and totally disabled due to causes not related to 
military service.  Low income veterans aged 65 and older may be 
eligible for a service pension.  The requirements and conditions for 
which are the same as the disability program, except there is no 
requirement that the veteran be permanently and totally disabled.
Both the disability pension program and the age 65 and older service 
pension require 90 days or more of active military service during a 
period of war or 90 days or more of continuous active military service 
beginning or ending during a period of war.  The veteran's discharge 
must have been under conditions other than dishonorable.
In addition to needy veterans, VA also provides pensions to low income 
surviving spouses and unmarried children of deceased veterans with 
wartime service.  To be eligible, spouses must not have remarried and 
children must be under age 18 or age 23 if attending school.  Children 
who become incapable of self-support because of a disability before age 
18 may be eligible for death pension as long as the condition exists 
unless the child marries or the child's income exceeds the applicable 
limit.
Under the VA pension programs, payments are made to bring beneficiaries 
total income, including all earnings as well as retirement as social 
security income, to a level set by Congress.  The maximum annual 
pension currently payable to a veteran with no dependents and no other 
income is $10,579. The maximum annual death pension payable to a 
surviving spouse with no dependents is currently $7,094.  Payments are 
reduced dollar for dollar by the amount of countable income of the 
veteran, spouse or dependent children.
The VA pension rolls have declined steadily from a high of almost two 
million beneficiaries in 1978 to current levels of just over 530,000.  
There are obvious contributing factors causing the reduction in the 
number of pension recipients. Foremost would be the increasing death 
rate among veterans of World War II and the earlier wartime periods, 
since most veterans who meet the income requirements for pension are 
eligible based on age and the low income limits of the programs.  The 
sharp decline in the number of pension recipients has also raised 
concern in VA that our most needy veterans and survivors, among them 
the homeless and the destitute elderly, may not be aware of the pension 
programs or that they may qualify for monthly benefits.  As a result of 
this concern, VBA has been expanding our outreach to elderly, low 
income veterans and surviving spouses.
In November of 2005 we issued a news article entitled, VA Reaches Out 
to Veterans and Their Families from Every Generation that has been 
printed in 176 newspapers in 23 states with a readership of 10.5 
million.  VBA is also working closely with the Veterans Health 
Administration and the National Cemetery Administration to reach 
potentially eligible veterans and surviving spouses.  Information about 
pension benefits is now included in the enrollment welcome letters sent 
by VHA to veterans eligible for healthcare under category five.  Copies 
of VBA Pamphlet 21-00-1, A Summary of VA Benefits and Services, are 
distributed to VHA facilities for placements and locations where 
veterans often visit. Better communications have been established with 
the VHA Social Work Service to ensure social workers are aware of the 
pension programs, and can identify and assist veterans who may have 
entitlement.  VA Pamphlet 21-03-1, VA Benefits for Survivors, is now 
distributed to all national cemeteries and training on our benefit 
programs is provided to cemetery directors.
There are also other venues through which VBA is seeking to expand 
outreach to the elderly veteran population.  VBA distributes copies of 
VA Pamphlet 21-00-1 to over 1,000 Social Security Administration 
offices.  VBA has also strengthened its working relationship with the 
Department of Health and Human Services Administration on the Aging, 
and we have become more actively involved with area agencies on the 
aging.  To help spread the word about our pension program, we set up 
information booths at such events as AARP conferences and funeral 
director conventions.
In January of 2002, VBA activated three Pension Maintenance Centers, or 
PMCs, at the Philadelphia, Milwaukee and St. Paul Regional Offices to 
process all pension award adjustments and account maintenance 
activities.  There were two particularly important considerations in 
the decision to consolidate.  First, by moving pension maintenance 
activities out of other Regional Offices, the Regional Offices are able 
to focus their attention and resources on processing of new and 
reopened disability compensation claims and appeals.  The second 
consideration was that by consolidating to three PMCs we could increase 
the efficiency and improve the quality and consistency of our pension 
processing activities.
National accuracy reviews of pension processing are conducted in 
accordance with VBA's Systematic Technical Accuracy Review system, 
STAR.  STAR reviews show that the accuracy of claims processed by the 
PMCs has significantly increased in the past year, from 80 percent in 
fiscal year 2005 to 91 percent in fiscal year 2006.
VBA has implemented a number of changes to improve the quality and 
consistency of pension maintenance activities. In March of 2006 each 
Pension Maintenance Center designated a quality review coordinator 
responsible for quality improvement oversight.  The individuals 
monitor all quality issues, such as training, mentoring, monthly 
quality reviews, and local and national STAR findings.  Each quality 
review coordinator also works closely with the other two PMCs quality 
review coordinators and keeps division management apprised of all 
efforts through regular conference calls and meetings.
We will continue our efforts to improve our training programs and tools 
and ensure the quality and consistency of pension benefit delivery.
Mr. Chairman, that concludes my testimony.  We will be happy to respond 
to any questions that you or other members of the Committee might have.
[The statement of Mr. McCoy appears on p.    ]

**********INSERT**********
Mr. Miller.  Thank you very much, Mr. McCoy.  You talked about your 
outreach programs and that they were successful.  How do you quantify 
the success of your outreach or how do you measure it?
Mr. McCoy.  I believe the biggest measurement is how much we actually 
do.  How many people we can actually talk to and get out and meet, and 
each one of the Pension Maintenance Centers works closely with the 
Regional Offices that are under their jurisdiction.  And, of course, 
people from those regional offices meet with County Veterans Service 
Officers, State Directors of Veterans Affairs, and groups like that.
Mr. Miller.  Can you tell any measurable difference, though, in those 
who make application since you started the outreach?  Or expanded the 
outreach?
Mr. McCoy.  Steve?
Mr. Simmons.  I do not have that answer.
Mr. Miller.  It would be interesting to know. Obviously you are doing a 
lot of work.  You are touching a lot of veterans and beneficiaries.  
But it would be interesting to know if all of the effort is actually 
increasing the amount of applications for pensioners.
Now, I think the current backlog of claims is just under 17,000 and 
what I would like to know is, does this reflect the new pension claims 
only?  Or does it include routine follow-up issues such eligibility 
verification reports?  And also, would consolidating all original 
pension claims to the Pension Maintenance Centers improve processing 
times and consistency of decisions?
Mr. Simmons.  The backlog at the PMCs?
Mr. Miller.  Yes.
Mr. Simmons.  It does not include the original claims at this time.
Mr. McCoy.  As Steve said, we have not consolidated the original 
pension claims to the PMCs at this time.
Mr. Miller.  Would it improve the processing times and consistency?  
You know, that is the question.
Mr. McCoy.  Yes sir, I believe it will.  I mean, from when we first 
started the consolidation of PMCs, I think in the last year, they have 
made tremendous strides.  And I believe it would.  Admiral Cooper and I 
have discussed that, and when Admiral Cooper is comfortable that the 
PMCs are at that position then our plan would definitely be to finish 
the consolidation.
Mr. Miller.  We have talked a lot about cyber security in this 
Committee.  Obviously there was a lot of angst when the laptop computer 
was missing.  There are some proposed changes in VA cyber security and 
the polices that affect VBA's ability to match the pensioner's income 
data with Social Security.  Do you see any problems with being able to 
make those matches given some of the changes that are being made?
Mr. McCoy.  No sir.  One thing that we will make sure of is that, if 
there is any security issue, we will have it covered.  And we have MOUs 
with everyone that we do any type of match with.
Mr. Miller.  But what I am more concerned with is being able to get the 
data to talk back and forth to each other.  You do not foresee a 
firewall problem?
Mr. McCoy.  No sir.
Mr. Miller.  Mr. Udall?
Mr. Udall.  Thank you, Mr. Chairman.  Mr. McCoy, according to the most 
recent evaluation of VA's pension program, Congressional intent of the 
program is not being met due to the low level of benefits.  
Congresswoman Berkley has introduced H.R. 5119 to begin to increase 
benefits for veterans.  Does the Administration support increasing 
pension benefits so that our wartime veterans and their survivors can 
afford food, shelter and medical care?
Mr. McCoy.  Sir, I cannot speak for the Agency in that regard, if the 
Agency actually supports it.  We have had a number of conversations 
about it.  I could not answer that at this time.
Mr. Udall.  Many Native American communities have high levels of 
poverty and large percentages of wartime veterans. Has the VA done any 
special outreach to Native American communities concerning the pension 
program?
Mr. Middleton.  Congressman Udall, I am Woody Middleton from the St. 
Paul Pension Center.  We have a number of Native American states and, 
to answer your question, yes. We routinely visit the Dakotas in 
outreach to their Native American communities.  I do not have 
information as to the number of Native Americans on the rolls.
Mr. Udall.  We have over ten percent of our population as Native 
American in New Mexico.  Are you aware of any figures or numbers there? 
And many of them live in very rural areas.  The best means of 
communication is usually by radio, and then asking them to come into a 
Chapter House or something along that line.  On the Navajo Reservation 
for sure, and the Pueblos sometimes you use different techniques. Are 
you aware of anything you have done in the southwest or in New Mexico?
Mr. Middleton.  Mr. Udall, I am not aware of any means that we are 
pursuing to reach these folks.  We do acknowledge that there is an 
importance to reach all our veterans who need pension benefits.  I am 
sure with the Compensation and Pension Service we will pursue avenues 
to reach the Native American veterans.
Mr. Udall.  Thank you.  Many elderly veterans and survivors are 
spending their life savings on medical care. How can the VA improve its 
outreach to veterans paying for nursing home care or those receiving 
care at home instead of nursing home care?
Mr. Simmons.  Congressman, all of our regional offices conduct outreach 
to homeless and to the elderly.  We work with the AARP and a number of 
other organizations to reach the elderly and other low income groups.  
So our Albuquerque Regional Office would be conducting outreach in many 
different formats throughout the state of New Mexico.
Mr. Udall.  Thank you.  Mr. Chairman, yield back.
Mr. Miller.  Let me ask another question about the consolidation of 
pension activities to the three offices. How much time do you think was 
freed up at the Regional Offices to focus on other types of claims?  
And how has the quality of eligibility verification reviews been 
impacted?
Mr. Simmons.  The quality of the work has increased dramatically over 
the past year, and I think that the consolidation is directly related 
to that.  The consolidation has also freed up our regional offices.  
Rather than trying to train our Veterans Claims Representatives to 
handle both the income related issues and the disability compensation, 
and both areas are complicated, we have been able to specialize in the 
regional offices on the compensation. In the PMCs, focusing on the 
complex activities associated with the pension adjustments.
Mr. Miller.  Mr. McCoy, you spent a couple days at the St. Paul PMC.
Mr. McCoy.  Yes sir.
Mr. Miller.  Talk to us a little bit about what you found there.
Mr. McCoy.  I found an awful lot of employees very dedicated to being 
part of the PMCs.  One of the questions that I had was, you know, in 
St. Paul they are still working compensation claims in the Veterans 
Service Center. So one of the questions was how often do we pull people 
from the Pension Maintenance Center to help in compensation.  And I was 
assured that that does not happen, which made me feel really good 
because that was one of the things that we wanted to make sure did not 
happen.  We wanted to know that the Pension Maintenance Center only did 
Pension Maintenance work.  That is what they are trained to do and that 
is what I saw.
Mr. Miller.  How many people are employed there?
Mr. McCoy.  In St. Paul in the Pension Maintenance Center?
Mr. Miller.  Yes.
Mr. Middleton.  Mr. Chairman, we have 137 employees.
Mr. Miller.  Mr. Udall, do you have another question?
Mr. Udall.  Yes, I would like to direct a couple of questions to the 
Pension Service Center managers, Mr. Chairman.  What functions are 
currently performed at VA Regional Offices and what functions are 
performed at the Pension Management Centers?  And is there a liaison at 
the Regional Office for cases involving both offices?
Ms. Filipov.  I can answer that.  Right now the home Regional Offices 
handle service connected disability claims and also determination on 
the original pension claims.  In other words, the first award on 
whether to put someone on the pension rolls.  The Pension Maintenance 
Centers handle maintenance actions once someone is receiving pension.  
And I believe the second part of your question was, I am sorry, can you 
repeat the second?
Mr. Udall.  Is there a liaison at Regional Offices for cases involving 
both offices?
Ms. Filipov.  There are liaisons, people that we work with when we need 
information from each other and we normally communicate by email and 
telephone contact.
Mr. Udall.  What do you believe is the biggest improvement in 
processing of pension claims by having Pension Management Centers?
Ms. Filipov.  I believe the increase in our quality coming from 80 
percent in fiscal year 2005 and being closer to 91 percent now.
Mr. Udall.  What is the most difficult aspect of your job?
Ms. Filipov.  The cyclical nature of the workload in the Pension 
Maintenance Center.  We probably receive 65 percent of our workload in 
a very short time frame, from January through March, and we spend a lot 
of time working that inventory off.
Mr. Udall.  Do any of the other pension managers have any comments on 
the questions I just asked?
Mr. Middleton.  I would like to echo Ms. Filipov's remarks about the 
cyclical nature of the pension workload.  We all experience tremendous 
backlogs at the beginning of the calendar year, January, February, 
March time frame.  And it is an enormous workload, but collaborative 
efforts with C & P Service, training, and consistency in the 
procedures, we have managed that work.
Mr. Udall.  Is there some way that you can address the cyclical nature 
of the demands that are occurring there?
Mr. Limpose.  Yes sir.  In late December of every calendar year, 
anybody that is on the VA rolls for pension will receive an Income 
Verification report and will also be sent an unreimbursed Medical 
Expenses form to file for retro payments.  Each PMC will have 
approximately 80,000 to 100,000 of those types of requests go out, and 
then they come back to us, usually, as Lucy said, within the first 
three months of every calendar year.
Mr. Udall.  Thank you very much.  Yield back, Mr. Chairman.
Mr. Miller.  Thank you very much.  We appreciate it.  It has been an 
informative hearing, although it may appear short to some.  We know 
that the pension program, as illustrated by the testimony, provides low 
income veterans and survivors valuable financial resources on behalf of 
a very grateful nation.  And I want to thank VBA for their testimony, 
and for working with us throughout the 109th Congress.  You have all 
helped educate the Subcommittee on the many programs that VBA 
administers, and I look forward to working with you next Congress to 
address concerns and make improvements in these programs.  Mr. Udall, 
it has certainly been a pleasure to work with you and Ms. Berkley and I 
look forward to our next Congress together.
Without objection, members will have five legislative days to submit 
materials for the record as well as post hearing questions to the 
witnesses.  And with nothing further, this hearing is adjourned.
[Whereupon, at 10:55 a.m., the Subcommittee was adjourned.]
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