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[Senate Hearing 110-732]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 110-732
 
HEARING ON REVIEW OF VETERANS' DISABILITY COMPENSATION: UNDUE DELAY IN 
                           CLAIMS PROCESSING
=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 9, 2008

                               __________

       Printed for the use of the Committee on Veterans' Affairs

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                   U.S. GOVERNMENT PRINTING OFFICE
43-860 PDF                 WASHINGTON : 2009
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Washington, DC 20402-0001

                     COMMITTEE ON VETERANS' AFFAIRS

                   Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West         Richard Burr, North Carolina, 
    Virginia                             Ranking Member
Patty Murray, Washington             Arlen Specter, Pennsylvania
Barack Obama, Illinois               Larry E. Craig, Idaho
Bernard Sanders, (I) Vermont         Kay Bailey Hutchison, Texas
Sherrod Brown, Ohio                  Lindsey O. Graham, South Carolina
Jim Webb, Virginia                   Johnny Isakson, Georgia
Jon Tester, Montana                  Roger F. Wicker, Mississippi
                    William E. Brew, Staff Director
                 Lupe Wissel, Republican Staff Director

                            C O N T E N T S

                              ----------                              

                              July 9, 2008
                                SENATORS

                                                                   Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........     1
Burr, Hon. Richard, Ranking Member, U.S. Senator from North 
  Carolina.......................................................     2
Murray, Hon. Patty, U.S. Senator from Washington.................     3
Tester, Hon. Jon, U.S. Senator from Montana......................     4

                               WITNESSES

Dunne, Hon. Patrick W., Acting Under Secretary for Benefits, 
  Veterans' Benefits Administration, Department of Veterans' 
  Affairs, accompanied by Michael Walcoff, Deputy Under Secretary 
  for Benefits, Veterans' Benefits Administration................     5
    Prepared statement...........................................     7
    Response to written questions submitted by Hon. Patty Murray.    11
    Response to questions arising during the hearing by:
      Hon. Patty Murray..........................................    15
      Hon. Jon Tester............................................    18
Baker, Kerry, Associate National Legislative Director, Disabled 
  American Veterans..............................................    23
    Prepared statement...........................................    25
Cox, J. David, R.N., National Secretary-Treasurer, American 
  Federation of Government Employees.............................    37
    Prepared statement...........................................    39
Pierce, Howard, Chief Executive Officer, PKC Corporation.........    43
    Prepared statement...........................................    46
Rollins, William ``Bo,'' Director of Field Services, Paralyzed 
  Veterans of America............................................    48
    Prepared statement...........................................    50

HEARING ON REVIEW OF VETERANS' DISABILITY COMPENSATION: UNDUE DELAY IN 
                           CLAIMS PROCESSING

                              ----------                              

                        WEDNESDAY, JULY 9, 2008

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:30 a.m., in 
room 418, Russell Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.
    Present: Senators Akaka, Murray, Tester, and Burr.

     OPENING STATEMENT OF HON. DANIEL K. AKAKA, CHAIRMAN, 
                    U.S. SENATOR FROM HAWAII

    Chairman Akaka. The Committee on Veterans Affairs of the 
U.S. Senate will come to order.
    Good morning, everyone. I am pleased that you can join us 
for the fourth in our series of hearings to review veterans' 
disability compensation.
    Today's hearing will examine what can be done to mitigate 
the undue delay in claims processing. It is something that has 
been with us and we are looking forward to finding answers as 
to how we can improve this.
    The Veterans' Benefits Administration's workload will 
continue to increase in the coming years. Two factors make this 
true.
    One is aging veterans who have conditions made worse by 
their advancing age and newer veterans returning disabled from 
Iraq and Afghanistan. The time necessary to process a 
disability claim continues to be a matter of concern to 
veterans and to this Committee.
    While VBA's goal is to process a disability claim within 
125 days, they remain woefully short of that goal with most 
claims completed within 185 days--fully 2 months beyond their 
goal. That is 2 months of waiting in limbo for a benefit that 
was earned through selfless service to our Nation.
    There is some gratifying news. For the first time in recent 
memory, VBA is now processing more claims than it receives, but 
as I have said many times, timeliness cannot take precedent 
over accuracy. These two components go hand-in-hand.
    In recent months, accuracy has declined. I know that 
accuracy diminishes in part from the increase in the new hires 
that must learn the ropes. I am confident that VBA takes this 
issue seriously and is attempting to alleviate the decline.
    Over the last several years, Congress has taken affirmative 
steps to ensure adequate staffing for claims processing. At the 
beginning of fiscal year 2007, the Compensation and Pension 
Service had more than 8,000 staffers with a goal of hiring more 
than 2,000 more by the end of fiscal year 2008. As of last 
week, VBA had just 290 more full-time employees to hire in 
order to reach its goal. VBA's hiring process has proven to be 
effective and timely. I am hopeful that this increase in 
staffing will put VBA further on the road to reducing its 
inventory of rating claims.
    However, the increase in staffing is not enough to solve 
the many issues that VBA faces in adjudicating claims. It is my 
hope that the groups we have assembled today will begin an open 
dialog with this Committee on what more should be done to 
improve claims processing. Staffing is not the only answer. 
Greater reliance on technology, increased training initiatives 
and an enhanced adjudication process are possible components of 
an improved system. There will be no silver bullet, no quick 
fix; but this is one area where the Committee must continue to 
provide oversight and assistance.
    Again, I want to thank you for being here today and I would 
now like to call upon our ranking member for his statement.

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

    Senator Burr. Thank you, Mr. Chairman, and welcome panels.
    As part of its mission, the Department of Veterans Affairs 
provides a wide range of benefits to veterans, including 
pension benefits and disability compensation. For many years, 
VA's claims processing system has been plagued by large 
backlogs and long delays.
    We are well aware of the problems that these delays can 
cause our veterans. Veterans back in North Carolina regularly 
tell me how frustrated they are with the confusing process. In 
recent years, Congress has responded to the problem by 
providing more money so the VA can hire more employees.
    Since 1997 this funding increase has allowed VA to more 
than double its claims processing staff. Unfortunately, despite 
all the added funding and staffing, we have not seen much 
improvement. In fact, it is now taking an average of about 6 
months to get a decision to veterans. That is among the longest 
processing times since 1997. And the number of pending claims 
is around 390,000--among the highest levels in 10 years.
    However, if you look in this year's budget, the VA's 
explanation for this enormous backlog is basically the same as 
it was 10 years ago. We need better answers and we need new 
ideas to solve this problem once and for all.
    Simply throwing more money and more personnel at the 
problem clearly has not been the solution.
    Mr. Chairman, I think this hearing will provide a good 
starting point for the Committee to seriously explore other 
options. As we will discuss today, those options may include 
the increased use of technology in converting to full 
electronic claims processing procedures. In my view, moving 
away from a paper-based process could lead to much better 
service for our country's veterans.
    As we have seen on the health side of VA, electronic health 
records not only prevent medical information from being lost, 
it can also be used to remind VA staff of when to schedule a 
veteran's next appointment, chart their health over time, and 
prevent life-threatening medical errors from occurring. So, I 
hope our country's veterans will soon have the benefits of a 
modern electronic system for benefits as well.
    I believe it is important to keep in mind that lasting 
improvement in the claims process may require more than just 
automation and a few small changes. As the Government 
Accountability Office put it, and I quote, ``There are 
opportunities for more fundamental reform that could 
drastically improve decisionmaking and processing,'' unquote.
    For example, commissions and studies have stressed for more 
than five decades the need to update the VA disability rating 
schedule, a tool that is the cornerstone of the entire 
disability claims process.
    As the Veterans' Disability Benefits Commission recently 
stressed, and I quote, ``It is critical that the rating 
schedule be as accurate as possible, so that ratings decisions 
based on it are as valid and reliable--and therefore fair--as 
possible,'' unquote.
    Without updating this critical part of the claims system, 
we may succeed in speeding up the process but the results for 
veterans might possibly be no better.
    So, Mr. Chairman, I hope the Committee will consider not 
only the use of automation in helping to improve the claims 
process but will also work to address some of the fundamental 
changes that could lead to better service and, more 
importantly, different outcomes for our country's veterans.
    Mr. Chairman, again, I want to thank you for holding what I 
think is an extremely important hearing and I look forward to 
the testimony of our witnesses today.
    I yield the floor.
    Chairman Akaka. Thank you very much, Senator Burr.
    Senator Murray.

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

    Senator Murray. Thank you very much, Mr. Chairman, Senator 
Burr.
    I really appreciate your holding this hearing today on 
undue delays in the disability claims processing system and I 
welcome all of our panelist today. I appreciate all of your 
time today to talk to us about this critical issue.
    We all know that when a decision about a veteran's VA claim 
is excessively delayed, the result is financial and emotional 
hardship for the veteran and for his or her family.
    The VA has a backlog of nearly 400,000 claims and an 
average claims processing time of 183 days. As the number and 
complicity of disability claims being filed with the VA 
increases, it is more important than ever that we make the 
necessary changes to improve the disability claims process.
    Over the last several years, Congress has taken steps to do 
that by providing funding to increase staffing at the Veterans' 
Benefits Administration and I am pleased that VBA has made 
substantial progress in meeting its hiring goals for the new 
full-time employees. But, simply increasing staff at the VBA 
will not solve all the problems with the Veterans' Disability 
Compensation system.
    We have got to make sure that new claims adjudicators are 
properly trained, there is accountability, there is staff at 
levels--all levels of the agency--and, importantly, that we 
make the systemic changes that are needed to improve the 
system.
    And as the VA starts to improve the timeliness of the 
claims, I think we need to ensure that the quality of those 
claims are not sacrificed.
    I am concerned that VBA employees perceive management to 
value the quantity of claims processed more than the quality of 
those claims and I look forward to hearing from our witnesses 
today about how we can best address that issue.
    Mr. Chairman, I have a transportation markup that has been 
moved up to 10:30 this morning as a result of the votes that 
have been scheduled, so I will not be able to stay probably for 
the second panel, but I want all the witnesses to know I will 
be reviewing the testimony. I think it is extremely important 
and will work with everyone to help make sure we are doing 
accurate ratings for all of our veterans.
    Thank you very much.
    Chairman Akaka. Thank you very much, Senator Murray, and I 
want to thank you for your regular attendance here at the 
Committee. I appreciate that.
    Senator Tester.

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. I too want thank you, Mr. Chairman and 
Ranking Member Burr, for holding this hearing. I think it is 
critically important and I want to thank you fellows for being 
here, too. I appreciate your work.
    As I look at the figures, in fiscal year 2007 it took 183 
days to process a veteran's disability claim. So far this year, 
it is about 182 days. We picked up a day so we are headed in 
the right direction. It took 120 days in the late 1990's.
    The backlog, as you mentioned earlier, was exceeding 
400,000 at the beginning of the year and now it is down 
390,000. We are heading in the right direction, but we have got 
a long way to go.
    And, you know, when I go and talk to veterans, and I've 
told this story before, about the one veteran who specifically 
stood up and said, ``The VA is trying to outlive me.'' It is as 
simple as that. It is almost an adversarial relationship. And I 
do not think anybody wants that.
    But the question I have is that, I mean, we have talked 
about staffing, we have talked about additional money, 
technology training, the adjudication process, the rating 
schedule. The question I have is, that there has got to be a 
reason why it takes this long. And I do not know what it is, 
but I have got a notion you guys might.
    We can sit here and we can have you guys in front of us and 
we can talk about the issues that revolve around the 
untimeliness of the claims process. But you need to tell us 
what you can do to fix it and when it will be fixed or if this 
is the best we can do. Truthfully, I hope we can do much much 
better. It was better in the 1990's. I think it can be better, 
but I look forward to your testimony and I look forward to 
solutions for getting this figured out because, as Senator 
Murray pointed out, it is financial and it is emotional. 
Families tend to split up and there are all sorts of problems 
that are created when we've got somebody who has served this 
country that we do not treat in a timely manner and get the 
family benefits they deserve.
    So, I want to thank you folks for being here and I also 
wanted to thank the second panel for being here at this time. 
But, what I am looking for today are solutions because we put 
money, we have staffed up and we are still not getting much 
better. Why?
    Thank you, Mr. Chairman. And, thank you folks for being 
here.
    Chairman Akaka. Thank you very much, Senator Tester.
    I want to welcome our principal witness from VA, Admiral 
Patrick Dunne, Acting Under Secretary for Benefits. He is 
accompanied by Michael Walcoff, Deputy Under Secretary for 
Benefits.
    I thank you both for being here. VA's full testimony will 
appear in the record.
    Admiral Dunne, will you please begin.

STATEMENT OF HON. PATRICK W. DUNNE, ACTING UNDER SECRETARY FOR 
  BENEFITS, VETERANS' BENEFITS ADMINISTRATION, DEPARTMENT OF 
VETERANS' AFFAIRS; ACCOMPANIED BY MICHAEL WALCOFF, DEPUTY UNDER 
   SECRETARY FOR BENEFITS, VETERANS' BENEFITS ADMINISTRATION

    Mr. Dunne. Mr. Chairman, Members of the Committee, good 
morning and thank you for the opportunity to discuss VA's 
disability claims processing system this morning.
    I was going to give you an update on our workload, but, 
sir, you have adequately covered that; so I think I will move 
right on.
    The nationwide hiring initiative which you mentioned has 
added more than 2700 new employees since last year and will 
result in a total of 3100 additional employees by October.
    To rapidly integrate these new employees, we modified our 
training program to initially focus on specific claims 
processing functions. This allows them to become productive 
sooner and lets our more experienced employees focus on the 
more complex and time-consuming claims.
    Timeliness, as you mentioned, has not improved that much 
from last year, 183 down to 181 as of the 30th of June, and 
that does not meet our goal that we set of 169 days.
    One of the factors--short-term factors--in this is the 
increased number of claims that we have seen. This year there's 
a 5 percent increase thus far through the fiscal year.
    One of the things we have observed and are aware of is that 
the evidence gathering process takes the most time; and so, 
therefore, we have instituted several initiatives to speed 
development.
    Last year, two development centers were established in 
Roanoke and Phoenix to assist regional offices experiencing 
workload difficulties. Participating regional offices have 
reduced the number of cases awaiting development by between 30 
and 75 percent and we are establishing two additional 
development centers in Togus and Lincoln.
    At the Waco Regional Office, the Texas Veterans Commission 
has provided four full-time employees to make telephone contact 
with claimants and third-party sources to obtain necessary 
evidence more quickly. This initiative has already achieved 
some early successes and we are exploring expansion to other 
States.
    We conducted two pilot projects using imaging technology. 
Both projects utilized our virtual VA imaging platform and 
related applications.
    The first involves imaging documents received in 
conjunction with the annual income verification and reporting 
process of the pension program. We are expanding this effort to 
support the transition of all pension claims processing to the 
Pension Maintenance Centers.
    The second supports the BDD Program. The separating 
servicemembers' medical records and supporting claims 
information are imaged at the outset of the claims process. By 
September, all BDD claims will be paperless.
    We are developing another pilot project to allow self-
service changes to beneficiaries' accounts such as change of 
address or change of banking institution or addition or 
deletion of a dependent.
    We are also exploring the utility of business rules engine 
software for both work flow management and to potentially 
support improved decisionmaking by claims processing personnel.
    Last September VA contracted with IBM Global Business 
Services to analyze our current business processes and 
recommend changes. The short term recommendations are 
incremental enhancements to the existing paper-based processes. 
The greatest efficiencies will be gained as a result of IBM's 
longer term recommendations to move to an electronic paperless 
environment.
    The IBM study noted bottlenecks occurred during the time we 
wait for a response to our Veterans' Claims Assistance Act 
letter. VA issued a final rule on May 30th to shorten the 
period to 30 days, as recommended. We also simplified the VCAA 
letter as recommended and they will be available electronically 
with our November software update.
    IBM identified enhancements to the veteran's online 
application. We recently completed the process to accept on-
line applications without requiring submission of a signed 
paper application. This streamlines the application process for 
veterans and reduces the need for additional development by VA 
personnel.
    Integration with VETSNET is also critical to success. 
Approximately 98 percent of all of the regional compensation 
claims are being processed end to end in VETSNET and we are now 
paying monthly compensation benefits to nearly 2.4 million 
veterans using this modernized platform.
    In November of 2007, VA and DOD launched a joint pilot of 
the revised disability evaluation system in the national 
capital region. VA now enters the process at the beginning 
rather than at the end. The process has been organized to 
enable VA to authorize benefits on the date that the member 
separates from service.
    As of June 29, a total of 461 servicemembers have entered 
the pilot and 69 servicemembers have completed or exited the 
pilot and returned to duty.
    Mr. Chairman, this concludes my testimony and I will be 
happy to respond to questions.
    [The prepared statement of Mr. Dunne follows:]
Prepared Statement of Rear Admiral Patrick W. Dunne, USN (Ret.), Acting 
    Under Secretary for Benefits, Veterans Benefits Administration, 
                     Department of Veterans Affairs
    Mr. Chairman and Members of the Committee: Thank you for the 
opportunity to appear before you today to discuss the Veterans Benefits 
Administration's (VBA) disability claims processing system. I am 
accompanied by Mr. Michael Walcoff, Deputy Under Secretary for 
Benefits.
    Today, my testimony will focus on the numerous efforts we have in 
progress to improve the claims process. I will also address the recent 
independent study conducted by IBM and the actions we have taken to 
implement IBM's recommendations.
    Before I discuss our efforts to improve benefits delivery, I would 
like to update you on our current workload situation. Last year we 
estimated we would receive 855,000 disability claims in fiscal year 
2008. However, based on our claims receipts through May, we now project 
that we will receive as many as 883,000 disability claims this fiscal 
year, an increase of over 5 percent from last year. While the incoming 
volume of claims continues to grow, our decision production has also 
significantly increased. Even with the increased volume, we are now 
completing more claims than we receive. As a result, the pending 
inventory at the end of May was reduced to 390,000.
    VBA is continually seeking new ways to increase production and 
shorten the time veterans are waiting for decisions on their claims. In 
the near term, we have several initiatives that I will highlight here 
today. However, key to our success will be our ongoing longer-term 
efforts to enhance and upgrade our claims processing systems through 
integration of today's technology.
                     hiring initiative and training
    Last year we began an aggressive nationwide hiring initiative that 
has added more than 2,700 new employees since January 2007. Our hiring 
plan will result in an unprecedented increase of a total of 3,100 
additional employees through the end of this fiscal year. At the same 
time, we continue ongoing recruitment to replace staffing losses that 
occur due to normal attrition.
    To rapidly integrate these new employees into the claims production 
process, we modified our new employee training program to focus initial 
training on specific claims processing functions. This allows our new 
employees to become productive earlier in their training program and 
lets our more experienced employees focus on the more complex and time-
consuming claims.
    While the complexity of VBA's decisionmaking responsibilities 
normally requires a comprehensive program of classroom and on-the-job 
training over the course of a 2-year period, our modified training 
program for new employees has contributed to earlier performance 
improvements from the staffing increases. In May 2008, our inventory of 
390,000 was at the lowest level since September 2006. We expect 
continued reductions through the balance of this year and throughout 
2009.
                        timeliness of processing
    The timeliness of our claims processing decisions has essentially 
remained stable throughout this fiscal year. In fiscal year 2007 our 
average processing time was 183 days; we have averaged 182 days through 
May of this year. This is very disappointing to us, as we projected we 
would reduce our processing times this year to an average of 169 days. 
We believe our inability to reduce processing time this year is due in 
part to the greater than projected increase in incoming claims we are 
experiencing (approximately 30,000 more than projected). Although we 
increased production and will end the year at or above our projection 
of 878,000 completed claims, the greater volume has had an impact on 
our ability to achieve the timeliness improvements we projected. 
However, as our new hires receive training and gain experience over the 
coming months, we will make significant improvements in timeliness in 
2009.
                  pilot to expedite claims development
    Because the evidence-gathering process comprises such a significant 
portion of the time required to provide veterans with decisions on 
their claims, we have recently undertaken a pilot initiative in 
partnership with the Texas Veterans Commission (TVC) to test new ways 
to expedite claims development.
    Through an intergovernmental agreement with the Waco Regional 
Office, TVC is providing the equivalent of four full-time employees who 
will make telephone contact with claimants and third-party sources in 
efforts to obtain necessary evidence more quickly. Additionally, the 
TVC employees have been trained to retrieve information from electronic 
sources to assist in obtaining documentation required to advance 
claims. This pilot commenced on June 9, 2008, and will run through 
January 2009. This initiative has already achieved some early 
successes, and we are exploring expansion of the pilot to other States.
                      development center expansion
    Last year VBA established two Development Centers in Roanoke and 
Phoenix to assist regional offices experiencing workload difficulties. 
This year through the end of May, these two centers completed 
development on over 31,000 claims. We are establishing two additional 
Development Centers this year in Togus and Lincoln. The Togus Center is 
already operational and the Lincoln Center will be fully operational in 
October 2008. Regional offices that have sent cases to the Development 
Centers have reduced the number of cases awaiting development 
(reductions range from 30 percent to 75 percent). We expect marked 
improvements in the timeliness of claims decisions at these regional 
offices as a result of the Development Centers' efforts.
                independent study of the claims process
    Because of the increasing and changing workload and workforce and 
our desire to ensure we are using the most effective methods of 
organizing work and maximizing resources, we sought help from the 
private sector. In September 2007, VBA contracted with IBM Global 
Business Services to analyze our current business processes and 
recommend changes to further improve our operational efficiency and 
consistency.
    From October 2007 through January 2008, IBM conducted a detailed 
review of the business processes involved with claims adjudication, 
beginning with application receipt and ending with notification to the 
claimant. Overall, IBM's recommendations validated areas for efficiency 
gains we had already identified internally.
    Both the short-term and long-term recommendations made by IBM focus 
on the phases of the claims process and specific activities under VBA's 
control. The short-term recommendations are incremental enhancements 
that VBA can make to the existing business processes to realize 
benefits in efficiency and productivity. Because our current claims 
process is heavily reliant on paper and the movement of paper claims 
folders, the greatest efficiencies will be gained as a result of IBM's 
longer-term recommendations to move to an electronic, paperless 
environment.
                implementation of ibm's recommendations
    When analyzing our claims process, the IBM study team noted that 
bottlenecks occur during the time VBA waits for a response to our 
Veterans Claims Assistance Act (VCAA) letter. Upon receipt of a claim 
for benefits, claims processors must carefully analyze all issues and 
determine what evidence is necessary to substantiate the claim. Under 
the VCAA, we must provide a letter to the claimant detailing the 
evidence required to substantiate the claim and which party (VA or the 
claimant) is responsible for obtaining the evidence. Under statute (38 
U.S.C. 5103), claimants have 1 year from the date of the VCAA 
notification to submit any requested evidence. However, VA may make a 
decision on the claim prior to the 1-year expiration. To help 
streamline this evidence-gathering process, IBM recommended that we 
simplify the VCAA letter and also reduce the evidence-gathering time 
period from 60 days to 30 days.
    VA issued a final rule on May 30, 2008 that clarified the 30-day 
response time. VA now allows 30 days for a claimant to respond to the 
VCAA notification before VA may adjudicate a claim. Of course, if the 
claimant submits evidence after VA adjudicates a claim, but before the 
expiration of the 1-year period, VA will readjudicate the claim.
    We have revised the VCAA letters in order to reduce confusion and 
misunderstanding by the veterans. Four new VCAA letter templates were 
created for specific types of claims. Each letter template is concise, 
reader-focused, and consolidates all VCAA requirements to a single 
enclosure. The option to waive the VCAA waiting period to further help 
expedite the claims process is in bold font on the first page of each 
letter template. Programming changes to our claims processing systems 
are necessary to implement the new letters. The revised letters will be 
available for use in field stations with our November 2008 programming 
update.
    To achieve large-scale improvements in efficiency and productivity, 
VBA must make a fundamental shift in how we process compensation and 
pension claims. All of IBM's longer-term recommendations focus on 
information technology enhancements that will allow VBA to move into a 
paperless environment. Integration of paperless processing technologies 
will enable us to assign and manage work electronically and reduce 
manual activities, freeing resources for more value-added 
decisionmaking. Eliminating manual processes is necessary to greatly 
improve VBA's timeliness.
    IBM identified enhancements to the current Veterans Online 
Application (VONAPP) system as one of the critical first steps in VBA's 
transition. Because VONAPP is not integrated with our IT systems, data 
from applications that were filed on-line must be manually entered into 
our processing systems. Enhancing VONAPP is an essential step in moving 
to a paperless environment. We recently completed the process to begin 
accepting VONAPP applications without requiring submission of a signed 
paper application. The electronic application is accepted as sufficient 
authentication of the claimant's application for benefits. This 
streamlines the application process for veterans and their families and 
reduces the need for additional development by VA personnel to obtain 
the required signatures. Normal evidentiary development procedures and 
rules of evidence still apply to all VONAPP applications.
    Our comprehensive strategy for paperless delivery of veterans' 
benefits employs a variety of enhanced technologies to support end-to-
end claims processing. In addition to imaging and computable data, we 
will incorporate enhanced electronic workflow capabilities, enterprise 
content and correspondence management services, and integration with 
our modernized payment and claims processing system, VETSNET.
    Integration with VETSNET is also a critical success factor in our 
overall strategy. We have made significant progress in the 
implementation of VETSNET over the past 2 years. Approximately 98 
percent of all original compensation claims are being processed end-to-
end in VETSNET, and we are now paying monthly compensation benefits to 
nearly 2.4 million veterans--or approximately 84 percent of all 
compensation recipients--using this modernized platform.
    We are exploring the utility of business-rules-engine software for 
both workflow management and to potentially support improved 
decisionmaking by claims processing personnel. We published a ``Request 
for Information'' last summer that yielded a variety of products that 
may be useful in our end-state vision.
    We have conducted two pilot projects that have demonstrated the 
utility of imaging technology in our Compensation and Pension Program. 
Both projects utilize our Virtual VA imaging platform and related 
applications. Virtual VA is a document and electronic claims-folder 
repository.
    The first pilot supports our income-based pension program. It 
involves imaging documents received in conjunction with the annual 
income verification and reporting process. This imaging allows the 
three Pension Management Centers to make the necessary claims 
adjustments without retrieving and reviewing the paper claims file. We 
are expanding this effort to support the transition of all pension 
claims processing to the Pension Maintenance Centers, which will bring 
this category of claims into the paperless environment from the outset 
of the claims process.
    The second pilot supports the compensation program at the 
centralized rating activity sites for our Benefits Delivery at 
Discharge (BDD) Program. The separating servicemembers' medical records 
and supporting claims information are imaged at the outset of the 
claims process. This allows rating veterans service representatives to 
make decisions based solely upon review of the imaged records rather 
than the paper claims file. We are now expanding this pilot to include 
all claims filed under the BDD Program. By September 2008, all BDD 
claims will be processed in the paperless environment.
    We are continuing to expand. The next category of claims to move to 
the paperless environment will be claims filed by separating 
servicemembers who have less than 60 days until discharge.
    We are developing another pilot project as a first step in 
implementing on-line ``self-service'' to allow veterans to manage some 
of their interactions with VA electronically. This project will examine 
issues such as user authentication that will allow self-service changes 
to beneficiaries' accounts (e.g., change of address or banking 
institution, addition or deletion of a dependent).
                disability evaluation system (des) pilot
    In November 2007, VA and the Department of Defense launched a joint 
pilot of the revised Disability Evaluation System in the national 
capital region. The redesigned process differs from the existing 
standard process in four critical elements.
    First, VA enters the process at the beginning rather than the end. 
When a servicemember is referred for a Medical Evaluation Board, VA is 
advised of the conditions that are potentially unfitting. Experienced 
VA military services coordinators interview the member and determine 
whether there are additional conditions that the servicemember believes 
were incurred in or aggravated by their military service.
    Second, a comprehensive physical examination is conducted according 
to VA protocols for both the potentially unfitting and other claimed 
conditions. In the initial stages of the pilot, VA is conducting those 
examinations. As the pilot expands and if it becomes the standard 
business practice, examinations will be conducted according to VA 
protocols by a combination of DOD, VA and contract clinicians.
    Third, if DOD determines that the servicemember is unfit for 
further military duty, VA assesses the level of disability for both the 
unfitting and other claimed conditions for DOD and VA purposes. Thus, 
there is one rating and the servicemember has a comprehensive 
understanding of what he/she is entitled to from both Departments.
    Finally, in accordance with DOD policy, the member has a right to a 
one-time reconsideration of the evaluation assigned by VA by a VA 
Decision Review Officer while the member is still on active duty. This 
review does not compromise the servicemember's right to exercise his/
her VA appellate rights once separated.
    The process has been organized to enable VA to authorize benefits 
on the date that the member separates from service. As of June 15, 
2008, a total of 439 servicemembers have entered the program. One 
member has separated from service and four other servicemembers were 
scheduled to separate on June 27, 2008. Currently 33 servicemembers are 
in transition pending separation.
                   expanded quality assurance program
    As part of VBA's continued commitment to quality improvement, VBA 
is expanding its quality assurance program. The national STAR 
(Systematic Technical Accuracy Review) staff has been consolidated to 
the Nashville office. The expanded program includes increased national 
accuracy review sampling, expanded data analysis, and focused rating 
decision consistency reviews.
    Based on sound statistical sampling procedures, sample size for any 
national or regional office accuracy measure should be 246 cases. With 
the addition of 10 FTE in February 2008, the STAR staff was able to 
increase the annual rating sample size for each regional office from 
120 cases to 246 cases in April 2008. A similar increase for the 
Pension Maintenance Centers (PMC) annual sample is planned for August 
2008. Expansion of the sample size for the 57 regional offices for 
compensation maintenance (authorization) end products is pending 
completion of new space completion and full hiring.
    This year the STAR staff conducted several special focused reviews 
of rating cases, including a special quality review of radiation cases 
and the ongoing review of extraordinarily large awards. Additional 
special reviews include a focused review of cases completed by the 
Appeals Management Center that began in June 2008.
    On-going data analysis is conducted quarterly to identify the most 
frequently rated disabilities or diagnostic codes, assess the frequency 
of the assignment or denial of service connection for each code by 
regional office, and assess the most frequently assigned evaluation 
mode for each code by regional office. Focused audit-style case reviews 
are conducted on station outlines to identify root causes of 
inconsistency. Through these regular reviews, we expect to gain more 
consistent decisionmaking across regional offices, as well as a better 
understanding of underlying causes for variation across geographic 
boundaries.
                               conclusion
    Mr. Chairman, this concludes my testimony. I will be happy to 
respond to any questions that you or other Members of the Committee may 
have.
                                 ______
                                 
Response to Questions Submitted by Hon. Patty Murray to Admiral Patrick 
     Dunne, Acting Under Secretary for Benefits, Veterans Benefits 
             Administration, Department of Veterans Affairs
Use of Private Medical Opinion for Ratings
    Question 1. Admiral Dunne, both the Paralyzed Veterans of America 
and the Disabled American Veterans believe that the VA should allow the 
medical statements and opinions of private physicians to be used for 
the purpose of adjudicating a claim, but despite being able to do so 
under law, I am told that VA adjudicators regularly ignore the findings 
of private physicians and require the veteran to obtain a medical 
opinion from a VA doctor, unnecessarily delaying the claim. Can you 
tell me why the VA does not accept the medical opinions or statements 
prepared by private physicians for the purpose of adjudicating a claim?
    Response. The Department of Veterans Affairs (VA) regularly accepts 
medical evidence, such as statements and opinions, from private 
physicians that are submitted by veterans and survivors in support of 
their claims. Such evidence often establishes entitlement to the 
benefit sought by the claimant, whether service connection or a higher 
disability evaluation.
    VA regulations direct that such evidence be accepted for the 
purposes of establishing and/or rating a claim. 38 CFR Sec. 3.157(b)(2) 
provides that evidence from a private physician will be accepted as a 
claim for increased benefits or a claim to reopen when it is competent 
and shows a reasonable probability of entitlement to benefits. 38 CFR 
Sec. 3.326(b) and (c) direct that statements from a private physician 
and hospital or examination reports from any private institution may be 
accepted for rating a claim without further examination by VA if the 
private evidence is otherwise adequate for rating purposes. Further, 38 
CFR Sec. 3.328(b) provides that a claimant or a claimant's 
representative may ask VA to obtain an expert medical opinion from a 
non-VA source when warranted by the complexity of the case.
    VA applies the same uniform standard in evaluating all medical 
evidence, whether generated by VA, another Federal agency, or a private 
medical provider. VA assesses the credibility and probative value of 
such evidence, resolving all reasonable doubt in the claimant's favor, 
in adjudicating disability claims.
IT upgrade
    Question 2. All of the IBM report's long term recommendations focus 
on improving VBA's information technology system. Can you tell me how 
much these measures are expected to cost and if you are budgeting 
accordingly for their implementation?
    Response. In collaboration with VA's Office of Information and 
Technology (OI&T), the Veterans Benefit Administration (VBA) is 
developing an overarching strategy for the Paperless Delivery of 
Veterans Benefits Initiative. This initiative conceptually incorporates 
many of IBM's recommendations as well as findings from analyses 
conducted by VBA. The concept of operations is to employ a variety of 
enhanced technologies to support end-to-end claims processing. In 
addition to imaging and computable data, VBA will also incorporate 
electronic workflow capabilities, enterprise content and correspondence 
management services, and integration with our modernized payment 
system, VETSNET. In addition, VBA is examining the utility of business 
rules engine software for both workflow management and potentially to 
support improved decisionmaking by claims processing personnel.
    To fully develop the Paperless Delivery of Veterans Benefits 
Initiative, VBA will engage the services of a lead systems integrator 
(LSI). The LSI will work closely with VBA and OI&T during fiscal year 
2009 to fully document detailed business requirements, technical 
requirements, and a systems engineering master plan. Until we have had 
the opportunity to complete these tasks with the LSI, it is premature 
to speculate on the full life-cycle cost of the paperless initiative. 
VBA and OI&T have examined a similar paperless claims processing 
initiative undertaken by the Social Security Administration (SSA). The 
Electronic Disability Project (eDib) is one of the most notable 
strategic investments at SSA. By analogy, SSA's paperless initiative 
eDib, has a reported life-cycle cost of approximately $800 million and 
8 years to fully implement.
    A comprehensive investment strategy is critical for the success of 
this initiative. The recently approved supplemental appropriation of 
$20 million, earmarked to support improved claims processing through 
information technology, will be a significant factor in this strategy. 
Additional funding would be required to sustain planned investments for 
the LSI, systems engineering, and development activities.

    Chairman Akaka. Thank you very much, Admiral Dunne.
    As I mentioned in my opening statement, over the last 
several years Congress has taken steps to ensure adequate 
staffing for claims processing and I think we have done that. 
But, beyond staffing, is there legislative assistance that 
Congress could provide that would aid in improving the process?
    Mr. Dunne. Sir, I am not aware of anything that I would ask 
for right now. As we go through the paperless process, 
preparing for that, something may arise and I would recommend 
asking for it at that point in time. But we need to pursue the 
IT work that is ongoing and move that along as fast as we can.
    Chairman Akaka. Admiral Dunne, VBA has developed new VCAA 
letters for four types of claims. Can you elaborate on the 
changes that were made and discussed how these changes will 
make it easier for veterans to understand the adjudication 
process?
    Mr. Dunne. Yes, sir. The basic context of the letter was to 
move some of those things--which are mandated by the courts and 
tend to be in difficult language to understand--move those as 
enclosures to the letter which the veteran can deal with after 
reading through the text at the beginning. It basically says, 
here is what we have got, here is what we are acting on, here 
is how you can help us, and here is how you can contact us. And 
the remainder of the information is as an enclosure which they 
can look at afterwards.
    Chairman Akaka. Admiral, how would you determine if the 
single disability evaluation pilot should be expanded to other 
areas; or can the process that was created in Washington be 
duplicated in smaller communities?
    Mr. Dunne. Sir, I believe, based on the information that we 
have gotten since last November, that we can take some of the 
lessons learned and use them throughout the country at all of 
the bases where the disability evaluation system is executed.
    At the meeting we had at the Senior Oversight Committee 
yesterday, we decided to meet on August 12 to discuss the 
lessons learned up to this point and at what rate we would 
expand the pilot beyond the National Capital Region.
    Chairman Akaka. Admiral, in your written testimony, you 
describe a pilot between VBA and the Texas Veterans' Commission 
to expedite claims development. TVC employees have been trained 
to retrieve information from electronic sources to assist in 
obtaining the documentation required to advance claims. Does VA 
not have the resources to do this without using outside 
organizations?
    Mr. Dunne. Sir, we took it on as a pilot to evaluate the 
impact of the process. As you know, probably two-thirds of the 
time that it takes to process a claim is spent on actually 
gathering this evidence.
    And so, in talking with the folks in Texas, we came up with 
the idea of letting their experienced folks work on some of the 
more difficult parts of the development process. To give you an 
example, I was down in Waco last week to talk with the four 
people that are doing this process and get some feedback from 
them. One of them described to me the fact that she was working 
on a case and one of the problems in that case was verifying 
that the veteran had actually been in Vietnam.
    In going through the records--going back trying to find 
something, after several hours of work--she was able to 
determine from a re-enlistment document that had been executed 
in Da Nang that, obviously, that veteran had been in Vietnam 
because that is where the enlistment took place. But, that was 
several hours worth of work that had been required to do that. 
It is time intensive. So, we are trying to go through this and 
use then the experience that they get on these time-consuming 
projects to figure out if there is a management approach we can 
take and get the information faster.
    Chairman Akaka. Thank you for much for your response.
    Senator Burr.
    Senator Burr. Admiral, welcome. Thank you immensely for 
what you do. I think that sometimes you end up inheriting other 
people's problems or other people's lack of action. So, I 
empathize with the situation you are in and I thank you for the 
steps in the right direction that you are taking. But I have 
got to ask a real specific question.
    Why does it take IBM to suggest something paperless when we 
collectively have all highlighted VA's commitment and success 
with a paperless medical health system process? Did anybody 
look at the health care side and say, my gosh, you know, it 
works so good, why don't we do this over here on this side?
    Mr. Dunne. Sir, I do not think that the intent of bringing 
in IBM was to define paperless, per se, but rather to define 
the best mechanism by which to get to that goal.
    Senator Burr. Do we know today what that is?
    Mr. Dunne. What we know at this point is that we have 
several systems that work fairly well: say in the education 
area; in the insurance area; and in loan guaranty. They all 
have slightly different programmed type of capabilities and the 
requirements that on the C&P side would be, once again, 
slightly different. What was recommended is to bring in a lead 
systems integrator who would first evaluate what is in 
existence that works, what needs to be added to it, and then 
the most efficient and effective way to integrate all of those 
processes together.
    I think the end result, at least what my vision is and what 
I am trying to impart to folks as I talk to them is, this 
starts back when you are in DOD before you become a veteran.
    We need to get to the point where an active duty 
servicemember has a user name and a password which meets all of 
the criteria. But when they leave the service, all their 
records and everything need to come over to us. That is truly 
paperless. Until that happens, the best we are going to be able 
to do is get something in and turn it into a paperless document 
by scanning it or an OCR or getting it online.
    But then, when you come back to us--as a veteran having 
only come in once electronically--for a loan guaranty, you do 
not have to start from scratch and tell us who you are all over 
again, because now we already know. We do not have to find out 
five different times.
    Senator Burr. So, are we attempting to try to set up that 
process to get that information now?
    Mr. Dunne. Yes, sir. I would say that it works in two 
areas. One is, we are working around the edges on those things 
that we can right now. For instance, more documents to be 
scanned in, changing electronic signatures on the online 
application which exists right now, getting an independent 
contract in place by August to completely rewrite that online 
application.
    Senator Burr. Let me go back a couple of steps. What I 
heard you express to me was, you know, the one thing that we 
recognize is that if we take people who are currently in DOD 
and we electronically collect their information, this is 
invaluable to us whatever the platform is we create in 
processing the benefits. What are we doing to capture 
electronically that information today? I believe with every 
initiative like this there is a starting point.
    Though we may not know exactly what the perfect platform is 
to roll out across-the-board, we do know that if we capture 
electronically everybody that is coming into the system today, 
or everybody that may come in the future, that we are ahead of 
the game because that is now electronic.
    I think one of the frustrations that I personally have 
looking through the history of this is that--we have identified 
over and over again--as long as we have a paper system, the 
processing of that claim is locked to the person who holds the 
file versus a collective effort.
    So, if for some reason that person took a 1-month vacation 
and nobody picked up the file, the veteran is basically out 30 
days. So what would have been a 6-month process on average is 
now a 7-month process for that individual. I think any business 
model would tell you that that probably is not the most 
productive or efficient way to do it.
    My only point is, we have an opportunity now to capture 
that information. You have expressed that would be beneficial. 
What do you need from us to help facilitate that, while in a 
parallel effort you are trying to determine what platform, when 
we roll it out and how many areas you can roll it out into.
    Mr. Dunne. Sir, in order to get started on that process we 
are working through the Senior Oversight Committee on the 
inter-operable health records. Also, the interagency program 
office--which the National Defense Authorization Act required 
us to stand up, as you know--was started on the 29th of April.
    At the SOC yesterday we were talking specifically about 
expanding the responsibilities of that office so that it pulls 
in not just the health records but the administrative records 
that are needed also.
    On our side, specifically, we are working the contracts to 
make sure that virtual VA--which would be the recipient of this 
data electronically coming over from DOD--is basically ready to 
receive. So, we are working to improve our capability, our 
bandwidth, our ability to take the flow that DOD would be 
required to give us.
    Senator Burr. My time is up and I do not want to take you 
through any questions. I want to instill a statement with you. 
It is my hope that those things that we feel certain about we 
will accelerate the process.
    I think the only way we fail is inaction. I think you can 
study some things to death. I think we know, with some degree 
of certainty, 60 percent of what we need to do and I do not 
believe that you can wait until you know 100 percent to start 
executing the 60 percent that you do know.
    The troubling thing about this town and this institution is 
that we have a change of administrations every 4 years, which 
is sort of like getting the opportunity to restart the clock. 
Then, somebody new walks in and they want to assess everything 
from start to finish. That takes about three and one-half 
years. And all of a sudden we are at a hearing like this and in 
the interim it has been funding and personnel. Now, we have 
tried that. We have tried that and the net result is, it got 
marginally better.
    My hope is that in the time that this Administration has 
left, that we will set a course, a bold course, to try to find 
a solution, as Senator Tester said, one that would have to be 
reversed by the next Administration, versus studied. And we 
rely on you to carry that back.
    Thank you.
    Chairman Akaka. Thank you very much, Senator Burr.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    I am thinking, Admiral, I have heard that many of the 
valuable new employees that Congress has given VBA money to 
hire have been let go during their probationary period because 
they cannot meet production quotas. Is that true, and if it is 
true, does that raise concerns about the adequacy of training? 
I wondered if you could address that.
    Mr. Dunne. Senator, I have not seen any details or facts on 
people being let go. There is a certification process as the 
training takes place, and as you know, working on claims is a 
demanding skill, and some folks who might be inclined to do it 
and want to do it may not be as successful. I will have to get 
you figures on the number.
    Senator Murray. Do you know how many probationary employees 
have been terminated?
    Mr. Dunne. I would have to get that data for you, Senator.
    Senator Murray. I would appreciate that.
    [VA was unable to provide this information by the 
Committee's deadline for printing this hearing.]
    Senator Murray. Do you think the training is adequate?
    Mr. Dunne. Senator, I think that we are always trying to 
improve our training. I think that the training that we are 
doing right now is the best that we are capable of doing. But 
we are not satisfied with that and we are always evaluating it 
and trying to find out ways to do it better.
    Senator Murray. I have a concern about the measurement of 
caseloads. Oftentimes when you set a numeric goal, the number 
itself becomes the bottom line and that often means that you 
are shifting your focus from quality to quantity, then 
everybody is just trying to get to that number.
    I have heard that there are some reports on the practice of 
regional offices using different methods to hide the age of 
older cases in order to artificially strengthen that number of 
average days pending. Have you heard of any reports of that 
practice?
    Mr. Dunne. No, Senator, I have not, because if I was aware 
of something like that, I would take action to fix it.
    Senator Murray. Is there any way for the VBA to ensure that 
that is not happening or to make sure it does not happen?
    Mr. Dunne. I would say that we monitor the figures at our 
level here in Washington and hold people accountable for them. 
We ask questions about them.
    I have already been around in the last 2 months to visit 10 
percent of the regional offices and look and ask questions, and 
we do not just accept the numbers. We evaluate them and look 
for trends and try to figure out what makes sense.
    Senator Murray. I would appreciate it if you would 
specifically look to make sure about not hiding numbers based 
on age.
    Mr. Dunne. Senator, I am not aware of any. I will continue 
to look at that as I evaluate all the processes that we are 
conducting.
    Senator Murray. I appreciate that. In looking at the 
testimony from the AFGE, it says that the IBM study did not 
interview a single front-line employee. If the point of the 
study was to improve the claims process, I do not understand 
why the VA staff did not interview staff on the ground that 
actually processed those claims.
    Can you tell me why the VBA determined not to do that?
    Mr. Dunne. I cannot, Senator.
    Do you have any knowledge of that, Mike?
    Senator Murray. Mr. Walcoff.
    Mr. Walcoff. I do know that in the course of the study the 
IBM people did go out and visit regional offices. I do not know 
whether they did formal interviews with front-line employees, 
but I do know that in their travels throughout the offices they 
had contact and did talk with some employees. Whether they were 
formal interviews or not, I do not know. But, they definitely 
got out and visited several of our stations.
    Senator Murray. It seems to me it would be a biased survey 
sample if we were not actually talking to the people on the 
ground who are processing claims and getting their input as 
well.
    Mr. Dunne. I cannot disagree with that, Senator.
    Senator Murray. Admiral, this Committee has urged VBA on a 
number of occasions to improve the accuracy of its workload 
forecasting. I am not aware of any efforts by the VBA to do a 
time motion study or another study that would measure the 
amount of time needed to develop and rate different types of 
claims. Can you tell us if VBA has any plans to do anything 
like that?
    Mr. Dunne. I would say that it is part of the process of 
the management attention which is being put on it while we are 
trying to get into paperless claims.
    I do not want to just sit there and say we are going to 
train up some people and eventually we are going to get 
paperless because the one thing I know is, we cannot turn this 
computerized system on a dime. We are going to be relying on 
those employees.
    So, to take a look at how much time it takes them to do 
things--how the processes work--we need to make sure that the 
business process that is being executed is properly understood 
so that it can be digitized.
    So, therefore, as we go through that, yes, I do intend to 
take a look at how we do things efficiently before we convert 
them digitally and perhaps turn out a system that we are not 
going to be happy with in the end.
    Senator Murray. Mr. Walcoff.
    Mr. Walcoff. Senator, I do want to make one comment about a 
previous question that you asked having to do with the data 
integrity issue--of ROMs possibly hiding work or doing things 
that would make the numbers look better than they actually are.
    There are specific, if an RO is going to do that, there 
would be certain things that they would do that I know from 
having been in a regional office--I was in Seattle for a 
while--and our C&P service has certain reviews that they do of 
our caseload where they look at a station, look for some of 
those types of what I will call ``maneuvers'' that would 
indicate that stations are prematurely taking end products, for 
instance, and then reestablishing them a short time later so 
that the case that is old does not get older.
    There are several things like that that a station could do 
and we are aware of that. We have looked at those things to 
make sure that the numbers that we report are accurate numbers. 
So, I want to assure you that, you know, obviously we would 
like our numbers to be better, but not at the stake of our 
integrity; and that is something that we are aware of.
    Senator Murray. Right. I just think that we all want those 
numbers to go down. We would love to have you sit in front of 
us and give us great numbers. But if it means that we are 
sacrificing the quality or hiding numbers or doing something to 
get there, then we have not done anybody a favor.
    Mr. Walcoff. I totally agree with you.
    Senator Murray. Admiral, do you have anything else?
    Mr. Dunne. Senator, I guess I would add that one of the 
things that Secretary Peake and I take a look at is what we 
call our variance chart and it is not only time to complete but 
it is also accuracy. And so, therefore, you know, we are 
looking at that and I have to report to him periodically.
    Senator Murray. My time is up.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Murray.
    Senator Tester.
    Senator Tester. Thank you, Mr. Chairman.
    Admiral Dunne, what is your working relationship with the 
DOD? Is it good?
    Mr. Dunne. I think I would classify it as better than good, 
Senator. I spend a lot of time with those guys.
    Senator Tester. So, you get everything you need from them?
    Mr. Dunne. I did not say that, sir.
    Senator Tester. If you are trying to reduce your claims, 
your evidence gathering period, DOD is a pretty critical part, 
an important part of this situation?
    Mr. Dunne. Yes, sir, it is.
    Senator Tester. What do they need to do better?
    Mr. Dunne. One of the things that we are working with them 
on is to get records that we need faster. One of the challenges 
is getting records from Guard and Reserve personnel because, as 
you know, their records are more piecemeal sometimes than a 
person who is on active duty and always has an active duty 
record.
    So, we are working with them to alert the organizations 
that are scattered all around and have the records that it is 
important that the records be turned over to us expeditiously.
    Senator Tester. Is there anything we can do in that regard 
to help that expeditious turnover of records?
    Mr. Dunne. Not that I am aware of, sir. It is within the 
two organizations and I have got the attention of Mike 
Dominguez, who is my counterpart, and we are working on getting 
information out.
    Senator Tester. Can you give me an idea on the backlog that 
you have now, what percentage of those are National Guard and 
Reservists, if you can. You can get back to me.
    Mr. Dunne. I think I would like to get back to you.
    [The response from VA follows:]
Response to Questions Arising During the Hearing by Hon. Jon Tester to 
   Patrick W. Dunne, Acting Under Secretary for Benefits, Veterans' 
        Benefits Administration, Department of Veterans' Affairs
    Question. Can you give me an idea on the backlog that you have now. 
What percentage of those are National Guard and Reservists?
    Response. At the end of June 2008, VBA had 390,034 claims pending. 
We are unable to identify how many of these claims were submitted by 
members of the Guard and Reserve components. However, we are able to 
identify pending claims from Guard and Reserve members deployed in 
support of the Global War on Terror (GWOT). As of the end of June 2008, 
there were 18,002 GWOT Guard and Reserve claims pending (35% of the 
total volume of pending GWOT claims).

    Senator Tester. OK. That would be fine.
    You talked about a 5 percent increase in claims in fiscal 
year 2007, I believe. Is that correct?
    Mr. Dunne. In receipts of this year versus last year.
    Senator Tester. Do you have any projected increases in 
claims over the next 5 to 10 years.
    Mr. Dunne. I would have to go with the latest trend, sir, 
and think that it is going to stay to 4 to 5 percent.
    Senator Tester. OK. So that means that this is not going to 
be static for a while?
    Mr. Dunne. I would not expect it to be; no, sir.
    Senator Tester. You have talked about a situation where you 
found that a veteran that had reenlisted in Vietnam and that 
was the only evidence that you had that they had served in 
Vietnam.
    Mr. Dunne. That was what I was told, yes, sir.
    Senator Tester. For the stressor. How often does this 
happen where people come in and claim that they have got a 
stressor from Vietnam service and did not serve?
    Mr. Dunne. I do not have any figures on that, sir.
    Senator Tester. Is there any penalty for people who come in 
and make false statements about their service?
    Mr. Dunne. Yes, sir. That would be pursued if someone made 
a false statement.
    Senator Tester. That is good. In your opinion, you talked 
about 169 days next year to close out a disability benefit 
claim. What is the acceptable timeframe? In your opinion, what 
would be an acceptable timeframe for claims processing?
    Mr. Dunne. Well, I think we would like to get it down to 4 
months.
    Senator Tester. Back to 120?
    Mr. Dunne. Sure. Yes, sir.
    Senator Tester. Do you feel confident that what you have 
done so far, from a long range planning standpoint, will get it 
there?
    Mr. Dunne. I would say that we have set the wheels in 
motion to be able to do it, but it will take a lot of hard work 
and management attention to execute it, to get us to that 
point.
    Senator Tester. Is there one thing that will speed it up 
more than others?
    Mr. Dunne. Yes, sir. Secretary Peake talking to me every 
day about it is keeping it sped up.
    Senator Tester. I was thinking more on process.
    Mr. Dunne. But I think that is an important part of the 
process. The essence of it is that it is important to Secretary 
Peake. It is important to me; and that message is being 
transmitted throughout the entire organization. I want people 
who are responsible for going paperless, coming to work every 
day saying what do I do today to make that process better and 
make it faster.
    Senator Tester. And it is important to us, too. We are here 
talking about it in a Committee meeting. It is very important 
and I have a tremendous amount of respect for Secretary Peake. 
He knows that.
    The question is, is there a process? And, I agree with 
you--if the upper management does not think it is important, it 
is never going to get done. But is there a process in your 
long-term plan that can save more time than others?
    Mr. Dunne. I guess the best way to describe it is 
digitizing the records. In other words, if we can get to the 
point where a veteran can log on and do all those things that 
need to be accomplished and we can move things electronically 
from DOD over to us, yes, that would be a big help.
    Senator Tester. You touched on it in the first question and 
that deals with a question I asked. I believe quite a while ago 
you dealt with National Guard and Reservists and the fact that 
their claims get denied at a much higher rate--let us put it 
that way--than active duty. Do you have any more information on 
that to tell us if that is the case?
    Mr. Dunne. We still monitor that, sir. And just to go 
through the details: the active duty we calculated at 95 
percent; and the Guard and Reserve at 87 percent. And I recall 
in the paper we provided you that some of the factors that we 
see there are longer terms of service on the active duty side, 
and more claimed disability contentions per claim on active 
duty side as a result of that longer period of service.
    So, those are factors we need to continue to take a look at 
and track, but there is no intent to separate out the active 
duty from the Guard and Reserve.
    Senator Tester. OK. Thank you very much.
    Chairman Akaka. Thank you very much Senator Tester.
    Admiral, I may have questions to submit for the record, but 
I want to ask you a final question.
    This question deals with how you prioritize claims. Claims 
from global war on terror (GWOT) veterans are nearly 20 percent 
of VA's current completed workload. I understand that priority 
is given to both original and reopened claims for this group of 
veterans. Can you please explain what prioritization means and 
describe what special measures are taken in regional offices to 
expedite these claims?
    Also, will VA reevaluate the priority given to GWOT 
veterans at a minimum for reopened claims when they become a 
larger part of VA's workload? And third, just to mention it, I 
am concerned that with so many veterans given priority, that 
attention to other veterans' claims will suffer?
    Mr. Dunne. Yes, sir. With the GWOT claims there is a flag 
that is put on the paper record. There is also a flash, it is 
called, that is put on in the computer system, so it is evident 
to folks.
    There also are, within the regional offices, there will be 
a team that is set up that works the GWOT claims, but we will 
continually monitor the need to adjust those priorities--
reopened claims versus other periods of service. Those are 
important and the numbers are important and the focus right now 
of that priority is because those veterans are in a transition 
phase. The most recent ones to enter a transition phase.
    But, we are also tracking other elements. I mean, we take a 
look at how many claims from veterans 70 years and older are 
still pending. We have a tiger team that works on those as 
well.
    So, I would like to say that to the extent that we can we 
put a priority on everything, the bottom line is we want to do 
every single claim in the minimum amount of time that we can do 
it.
    Chairman Akaka. Senator Burr.
    Senator Burr. Admiral, I just have one last question. We 
have 57 processing centers. Do some historically perform poorer 
than others?
    Mr. Dunne. Yes, sir.
    Senator Burr. And what are we doing to try to fix that?
    Mr. Dunne. Sir, we have a process that we are starting into 
to take a look at the variances between those offices, because 
if one office can be successful--be up in accuracy and days to 
complete where we want it to be--there is a reason. And so, my 
goal is to figure out why somebody is up here high and right on 
completion and accuracy when someone else is not up there. We 
need to take those best practices and generate those throughout 
the whole system.
    Senator Burr. I look back at those March 2007 similar 
hearings and the information that was supplied to us and I 
marked the four locations that had at least a 10 percent 
increase in the number of days: Washington, DC; Pittsburgh; New 
York; and Reno.
    Clearly Pittsburgh received some additional 
responsibilities at that time, which could explain their 
increase in the number of days. There were no caveats for the 
other locations.
    The national average for 2007 was 177.4. The Washington, 
DC, data showed 306. The New York data showed 258. The Reno 
data showed 239. There were actually locations, Newark and Los 
Angeles, where the actual number of days went down. Certainly a 
good trend.
    My hope is that you will stay focused on those processing 
centers where there is not just a problem in 2007. It is a 
historical challenge.
    Mr. Dunne. Sir, I can guarantee you we are focused on that.
    Senator Burr. Thank you.
    Chairman Akaka. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman.
    I too have just one question and it deals with an evidence 
gathering. It shows that about 60 days are required at this 
point in time--at least that is what the IBM studies shows--
trying to get down to 30 days to gather evidence. Have I 
misread that? Could you tell me what it really says?
    Mr. Dunne. Sir, the 60 days was a waiting period that we 
had in place where we would tell the veteran with the VCAA 
letter, we will wait 60 days for you to send us anything you 
want to before we act on your claim. By shortening that to 30 
days we can act faster.
    Senator Tester. OK. So, the question I had deals more with 
some folks we are going to hear from in this next panel, the 
Veterans' Service Organizations.
    Are you able to utilize some of their expertise and help in 
having the vets get information to you more timely? Have you 
reached out to them, have they reached out to you, are you able 
to utilize their expertise, because I think they have got 
access to a lot of information and a lot of people that could 
help one another?
    Mr. Dunne. Yes, sir, we work very closely with the VSOs. In 
fact, in our regional offices, many of the VSOs have permanent 
offices where they are there everyday that we are open to help 
veterans.
    Senator Tester. Has that been going on for a while?
    Mr. Dunne. It has been going on for a long period of time, 
yes, sir.
    Senator Tester. Ten years?
    Mr. Walcoff. More than that.
    Senator Tester. OK. I have been sitting here scratching my 
head because I am trying to figure out--and I know claims 
volume has gone up some--but 6 months is a little bit too long, 
and actually 4 months is fine, but it would be nice if it was 
even shorter than that.
    What can we do? There is always a solution for a problem. 
Efficiency--there has got to be some efficiency gains somewhere 
in the process and that is all. It is a bit frustrating for me 
sitting here because I think this Committee and the Senate has 
done a decent job of getting resources to you guys.
    The question is, is there is a hitch somewhere? I mean 
there is something going on here that is not right that needs 
to be fixed, and I do not know what the hell it is; and that is 
the part that is frustrating for me.
    Could you just comment on what you think the problem is, 
ultimately, in the end; and when we can see some significant 
gains? 60 days is pretty significant considering we picked up 1 
day in the last year. Things do not happen all at once in this 
machine, and Michael, you can answer too if you want. It does 
not much matter.
    Mr. Dunne. Senator, Mike has a great deal of experience 
personally doing this and working on claims. I think he might 
be the best person to answer that one.
    Senator Tester. That is fine.
    Mr. Walcoff. Thank you, admiral.
    I think that when you look at the process, the 180 days, as 
Admiral Dunne said, about probably 65 to 70 percent of those 
days are involved in development of the evidence, not only 
looking at a claim, deciding what evidence is needed, but then 
going after that evidence and waiting for the evidence to come 
back.
    Under VCAA that 60 days that we give a veteran to submit 
evidence, we also give 60 days to his doctor. Let us say he 
comes in and says, I have three doctors that have been treating 
me. We then will write the doctors and give them 60 days to 
come back. If the doctor does not reply in 60 days, we then 
write the veteran and say, we are going to give the doctor 
another 30 days, and if he does not submit it within 30 days, 
we will decide the case on the evidence that we have. Now, you 
are talking about 90 days.
    Senator Tester. This is a private practice doctor for the 
most part?
    Mr. Walcoff. Right. I guess, Senator, what I would say is 
the----
    Senator Tester. Just for clarity, you notify the vet when 
you are sending the doctor a letter?
    Mr. Walcoff. Yes. What will happen is: the veteran has to 
tell us who he is being treated by; and we also ask him, 
hopefully when he submits his application, he will submit the 
privacy form that we are going to need in order to get the 
information. But if he does not, we then will have to go back 
to the veteran to get the privacy form.
    But, let's say that he does. We will then go out to the 
doctor and we will say, we understand you have treated Mr. 
Veteran. Could you please send us his record? Here is the 
privacy release.
    In some cases they act promptly. In other cases we do not 
hear from them. So, 60 days go by; we diary the case and, 
ideally, we look at it on the 61st day. I cannot tell you that 
every office does that, but ideally they would. If it has not 
come back yet, we then go back out to the doctor and say, you 
have another 30 days.
    Senator Tester. So, in the 1990's you had 120 days. Is 
there something in the process that changed between then and 
now?
    Mr. Walcoff. Yes. The law that causes us to have to do all 
of that was passed in 2001. That law did not exist in the 
1990's.
    Senator Tester. What does that law say?
    Mr. Walcoff. It is the Veterans' Claims Assistance Act. It 
is a good law. It is a law that was set up to guarantee that 
veterans have certain rights, that they are protected; and I 
think that is something we all agree with.
    Over the years, the law has been interpreted by the court 
in various ways that have made it very difficult to administer, 
which has added time to the process. And that is one of the 
things that we are looking at in terms of what can we do within 
our authority, and one of the things was to reduce that waiting 
time from 60 to 30. That is going to help us a little bit.
    The other thing we can do--and this is something that the 
Texas Veterans' Commission is doing with us in Waco, and this 
is important--when that doctor does not send anything back, we 
pick up the phone and call the doctor. We ask, oh, by the way, 
do you realize that you got a request from us for records? 
Maybe you did not know that, maybe you have not seen that, but, 
you know, we would like you take a look and maybe you can then 
send it back to us because that would enable us to process Mr. 
Veteran's claims.
    So, we have people from the Veterans' Commission making 
some of those phone calls just to help speed up the process so 
we do not have to wait for 60 days and then another 30 days. I 
mean, there are things that we can do administratively to 
improve. We are not at the point where we are doing every case 
the next day, but I do believe that certain things that the law 
requires have changed situations from where it was in the 
1990's.
    Senator Tester. Thank you.
    Chairman Akaka. Thank you very much, Senator Tester.
    I want to thank our witnesses for your responses. We will 
have questions that we will send to you.
    May I ask, were you done, Senator Tester?
    Senator Tester. Yes, I was done. We will check into the 
law. We will see what is going on there.
    You guys are on the ground. I am not. My only 
recommendation, I think you are on the right track, calling.
    If you do not get it back in 2 weeks, I would call. 
Actually it should be the vet that calls or maybe the VSO that 
calls or somebody that calls. But somebody needs to call the 
doctor, because it can get lost in their bureaucracy too.
    Mr. Walcoff. But, see, under the law, we have a duty to 
assist. It is our job to assist the veteran in developing that 
evidence and we do that by asking the doctor for it, and then 
hopefully calling and following up.
    Senator Tester. Right. You are exactly right. You might be 
able to cut 2 weeks out of it just by calling them quicker.
    Chairman Akaka. Again, I want to thank our witnesses. It 
appears that a huge problem is collection of evidence. That 
takes time and we hope we can find a way of speeding that up.
    Again, let me say thank you for our witnesses on the first 
panel.
    I welcome the second panel of witnesses to this Committee. 
Joining us this morning are Kerry Baker, Disabled American 
Veterans. David Cox, American Federation of Government 
Employees. Howard Pierce, PKC Corporation. And William ``Bo'' 
Rollins, Paralyzed Veterans of America.
    Your full statements will, of course, appear in the record 
of this hearing; and I again welcome you and ask Mr. Baker to 
please begin with your statement.

   STATEMENT OF KERRY BAKER, ASSOCIATE NATIONAL LEGISLATIVE 
              DIRECTOR, DISABLED AMERICAN VETERANS

    Mr. Baker. Mr. Chairman, Ranking Member Burr.
    The following suggestions are intended to simplify the 
claims process by drastically reducing delays caused by 
superfluous procedures.
    One, remove procedural roadblocks to the efficiency in the 
appeals process. Having Congress amend the law and the mandate 
would incorporate an automatic waiver of all jurisdiction for 
any evidence received by VA to include the board after an 
appeal has been certified to the board. This would eliminate 
VA's requirement to issue an SSOC every time an appellant 
submits additional evidence in the appellate stage. It would 
also help prevent the board from having to remand an appeal 
just for VA to issue an SSOC. This would free up significant 
resources in the VA. For example, VA issued 51,600 SSOCs last 
year. As of May 2008 they already issued 38,600. Likewise, the 
board remanded cases for the same reason.
    Congress should also amend the law to eliminate the need to 
wait until after an appellant files an NOD in order to issue an 
appeal election letter. VA should mail this letter with the 
original decision. This would eliminate the requirement that VA 
allow an appellant 60 days to respond to such letter.
    The VA currently receives over 100,000 NODs annually. This 
minor change would eliminate 60 days of delay in every one of 
those appeals by eliminating VA's requirement to separately 
mail all 100,000-plus election letters.
    These recommendations would have a tremendous effect on 
VA's appeals workload without the need to expend any 
governmental resources.
    Two, remove duplicative processes from VA's duty to assist. 
The law has evolved to cause VA to request the same set of 
records multiple times. Such development procedures cause 
massive delays in the claims process and feed otherwise empty 
litigating positions of attorneys.
    These requirements can be made more efficient by amending 
the law to limit VA's requirements that it request no 
individual private record or set of private records more than 
once. This will reduce delays in one of the most time-consuming 
procedures in the process.
    Three, Congress should restructure part of the claims 
development process.
    The enactment of VCAA has led to unintended consequences 
that have proven detrimental rather than beneficial to the 
claims process. Since VCAA's enactment in November 2000, the 
court has issued only 17 precedential decisions imposing 
stringent requirements on content and timing.
    The root of the problem is in statutory language, which is 
far too broad. There is nearly no limit of requirements that 
can be read into its language. The solution of this problem is 
to amend the law to state the specific type of basic 
information VA is required to include in its notice, both in 
content and timing, and what is not required to be included.
    The goal is to ensure language is understandable to the 
claimant while specific enough to set limits aimed at shielding 
it from continuous judicial interpretation.
    Another problem is that various sections of the law 
concerning medical opinions are so subjective as to eliminate 
uniformity in the system and erode enforceable rights of 
claimants.
    For example, claims of service connection are the 
foundation of VA's benefit system. The crux of the majority of 
these claims lies in either the claimant or the VA obtaining a 
medical opinion.
    VA's notice requirement should be amended to include 
specific information concerning the basic elements that render 
a medical opinion adequate for rating purposes. As a matter of 
fairness, VA relays this exact information to its own doctors 
when it seeks medical opinion.
    From October 2006 to October 2007, the board remanded 
12,269 appeals in order to obtain medical opinions. Far too 
many were remanded for no other reason but for VA to obtain a 
medical opinion, merely because the appellant had submitted a 
private medical opinion. Such actions are a complete waste of 
VA's resources.
    Congress should mandate that when claimants submit private 
medical evidence that is competent, credible and otherwise 
adequate for rating purposes, VA must decide the case based on 
such evidence rather than delaying the claim while arbitrarily 
requesting medical opinions from the agency. This would 
preserve manpower and budgetary resources, reduce the claims 
backlog and prevent needless appeals.
    Congress should further amend the law to mandate that if VA 
must request an opinion after a claimant submits a private 
opinion, then a health care expert of equal qualifications must 
render such opinion.
    Finally, we urge Congress to adopt the treating physician 
rule as applied by the majority of Federal courts in evaluating 
Social Security claims. The rule governs the weight accorded to 
the opinion of a claimant's treating physician relative to 
other evidence before the fact finder.
    This rule is applied to help resolve conflicting medical 
evidence by giving legal recognition to the assumption that a 
claimant's treating doctor is the physician best able to 
present a complete picture of the claimant's medical condition.
    A similar role adopted by the VA would provide sound legal 
structure to an otherwise far too subjective system.
    I have outlined some of these suggestions as well as others 
with great detail in my written testimony and I hope you will 
take a look at it. I will be happy to answer any questions that 
you may have.
    [The prepared statement of Mr. Baker follows:]
   Prepared Statement of Kerry Baker, Associate National Legislative 
               Director of The Disabled American Veterans
    Mr. Chairman and Members of the Committee: I am pleased to have 
this opportunity to appear before you on behalf of the Disabled 
American Veterans (DAV), to address undue delays in the Department of 
Veterans Affairs' (VA) disability claims processing system.
    The claims process is extremely complex and often not understood by 
veterans, some veterans' service representatives, and by many VA 
employees. Many studies have been completed on timeliness of claims 
processing yet the delays continue and the frustrations mount for all 
involved in the process of filing and adjudicating claims and appeals. 
Therefore, the following suggestions are intended to simplify the 
claims process by drastically reducing delays caused by superfluous 
procedures while providing sound structure with enforceable rights, 
where current law otherwise promotes subjectivity, resulting in large 
variances in decisionmaking, unnecessary appeals, and overdevelopment 
of claims.
 i. remove procedural roadblocks to efficiency in the appeals process.
    To begin the appeal process, an appellant files a written notice of 
disagreement (NOD) with the VA regional office (RO) that issued the 
disputed decision. For most cases, the appeal must be filed within 1 
year from the date of the decision. After filing an initial NOD, the VA 
sends the appellant an appeal election form asking him/her to choose 
between a traditional appellate-review process by a rating veterans' 
service representative (RVSR) or a review by a decision review officer 
(DRO). DROs provide a de novo (brand new decision), review of an 
appellant's entire file, and they can hold a personal hearing about an 
appellant's claim. DROs are authorized to grant the contested benefits 
based on the same evidence in the claim folder that the initial rating 
board used. The appellant is given 60 days to respond to the appeal 
election form. See 38 CFR Sec. 3.2600 (2007).
    Once the appeal election form is received, the RVSR or DRO (as 
appropriate) issues a statement of the case (SOC) explaining the 
reasons for continuing to deny the appellant's claim. A VA Form 9, or 
substantive appeal form, which is used to substantiate an appeal to the 
Board of Veterans Appeals (``Board'' or ``BVA'') is attached to the 
SOC. The VA Form 9 must be filed within 60 days of the mailing of the 
SOC, or within 1 year from the date VA mailed its decision, whichever 
is later.
    If the appellant submits new evidence or information with the 
substantive appeal, such as records from recent medical treatment or 
evaluations, the local VA office prepares a supplemental statement of 
the case (SSOC), which is similar to the SOC, but addresses the new 
information or evidence submitted. The VA must then give the appellant 
an additional 60 days to respond (with any additional evidence, for 
example) following the issuance of an SSOC. If the appellant submits 
other evidence, regardless of its content, another SSOC must be issued 
and another 60 days must pass before the VA can send the appeal to the 
Board. In many cases, this process is repeated multiple times before a 
case goes to the Board. In many of those cases, the appellants are 
simply unaware that they are preventing their appeal from being sent to 
the Board.
    The VAROs are not supposed to submit a case to the Board before the 
RO has rendered a decision based on all evidence in the file, to 
include all new evidence. This restriction stems from 38 U.S.C.A. 
Sec. 7104, which has been interpreted to mean that the Board is 
``primarily an appellate tribunal'' and that consideration of 
additional evidence in the first instance would violate section 7104 
and denies an appellant ``one review on appeal to the Secretary,'' 38 
U.S.C.A. Sec. 7104(a) (West 2002 & Supp. 2007); see Disabled Am. 
Veterans v. Sec'y of Veterans Affairs, 327 F.3d 1339, 1346 (Fed. Cir. 
2003).
    The result of the above is that ROs are forced to issue SSOCs 
repeatedly in many cases, which merely lengthens the appeal, frustrates 
the VA, and confuses the appellant. The problem does not end there. If 
an appellant submits new evidence once the case is at the Board, or if 
the RO submits a case to the Board with new evidence attached, the 
Board is prohibited from rendering a decision on the case and is forced 
to remand the appeal (usually to the Appeals Management Center (AMC)), 
if for no other reason but for VA to issue an SSOC.
    Notwithstanding the above, an appellant can choose to waive the 
RO's jurisdiction of evidence received by VA after a case has been 
certified to the Board by submitting a written waiver of RO 
jurisdiction. In the case of an appeal before the VARO, this results in 
VA not having to issue an SSOC concerning the newly submitted evidence. 
In the case of an appeal before the Board, it results in not requiring 
the Board to remand the case solely for issuance of an SSOC.
    The Board amended its regulations in 2004 so that it could solicit 
waivers in those cases where an appellant or representative submits 
evidence without a waiver. 38 CFR Sec. 20.1304(c); see 69 Fed. Reg. 
53,807 (Sept. 3, 2004). This has helped to avoid some unnecessary 
remands. The Board's remand rate decreased from 56.8 percent in fiscal 
year 2004, to 35.4 percent in fiscal year 2007 due in part to these 
procedures.
    The statistical data for appeals in the VA represents a significant 
amount of its workload. Appellants filed 46,100 formal appeals 
(submission of VA Form 9) in fiscal year 2006 compared with 32,600 
formal appeals in fiscal year 2000. The annual number of BVA decisions, 
however, has not increased. As a result, the number of cases pending at 
BVA at the end of fiscal year 2006--40,265--was almost double the 
number at the end of fiscal year 2000. These numbers are exclusive to 
appeals at the Board and do not include the substantial number of 
appeals processed by the appeals teams in VAROs and the AMC.
    In fiscal year 2007, the Board physically received 39,817 cases. 
Despite this number of cases making it to the Board, the VBA actually 
issued 51,600 SSOCs, a difference of 11,783. As of May 2008, the VBA 
has already issued 38,634 SSOCs. Likewise, the Board has remanded an 
additional 1,162 cases solely for the issuance of an SSOC. This number 
does not include cases wherein the appellant responded to the Board's 
initiation of a request for waiver of RO jurisdiction, thereby 
eliminating the requirement for a remand for VBA to issue an SSOC.
    The average number of days it took to resolve appeals, by either 
the Veterans Benefits Administration (VBA) or the Board, was 657 days 
in fiscal year 2006.\1\ This number, however, is very deceptive, as it 
represents many appeals resolved at the RO level very early into the 
process. The actual numbers show a picture much worse. According the 
fiscal year 2007 Report of the Chairman, Board of Veterans' Appeals, a 
breakdown of processing time between steps in the appellate process is 
as follows:
---------------------------------------------------------------------------
    \1\ Note: Appeals resolution time is a joint BVA-VBA measure of 
time from receipt of notice of disagreement by VBA to final decision by 
VBA or BVA. Remands are not considered to be final decisions in this 
measure. Also not included are cases returned as a result of a remand 
by the U.S. Court of Appeals for Veterans Claims.

     NOD to receipt of SOC--213 days--VARO;
     SOC issuance to receipt of VA Form 9--44 days--appellant;
     receipt of VA Form 9 to certification to the Board--531 
days --VARO;
     receipt of certified appeal to Board decision--273 days--
Board;

Total--1,061 days from NOD to Board decision--sadly, many are much 
longer.
    The item of special interest regarding the above numbers, is that 
the function that should conceivably take the least amount of time 
actually took the most amount of time--receipt of VA Form 9 to 
certification to the Board. The reason for this extraordinary time VA 
spends on a relatively simple task is in part the result of issuing 
multiple SSOCs.
    Congress has the chance to eliminate tens of thousands of man-hours 
from VA's workload, the cost associated therewith, and to simplify an 
important part of the claims process with a minor legislative change. 
This would eliminate, as much as practicable, VA's requirement to issue 
SSOC's, to include the Board's requirement to remand for the issuance 
of an SSOC.
Recommendation
    Amend 38 U.S.C.A. Sec. 7104 in a manner that would specifically 
incorporate an automatic waiver of RO jurisdiction for any evidence 
received by the VA, to include the Board, after an appeal has been 
certified to the Board following submission of a VA Form 9. This type 
of amendment would eliminate the VA's requirement to issue an SSOC 
every time an appellant submits additional evidence in the appellate 
stage. It would also prevent the Board from having to remand an appeal 
to the AMC solely for the issuance of an SSOC. Such an amendment should 
state that the statutory change applies ``notwithstanding any other 
provision of law.'' This language would prevent any contradiction with 
other statutes and future confusion caused by any potential judicial 
review.
    Certain safeguards would nonetheless be necessary. VA must still be 
required to notify the appellant that it received the newly submitted 
evidence, and whether that evidence changed the outcome of the 
decision; if so, then the appeal would most likely be resolved. If not, 
a single-page, automated letter could be issued to the appellant 
indicating that VA received the newly submitted evidence and that it 
had no effect on the outcome of the appeal. VA would then not be 
required to wait an additional 60 days before forwarding the appeal to 
the Board. If the Board receives evidence not considered by the RO, the 
Board would have first instance jurisdiction, but only on the newly 
submitted evidence. That would prevent the Board from having to 
initiate contact with the appellant to seek a waiver of RO jurisdiction 
and would prevent a needless remand by the Board.
    This type of legislative change could free up significant resources 
from the VA and the Board that could then be utilized to focus on other 
causes of delay in the claims process.
Recommendation
    Congress should amend 38 U.S.C. Sec. 5104 (Decisions and Notices of 
Decisions) subsection (a), to eliminate the need to wait until after an 
appellant files an NOD in order to issue an appeal election letter. 
Such an amendment would further eliminate the requirement that VA allow 
an appellant 60 days to respond to such a letter, thereby shortening 
every appeal period by 60 days.
    The provisions of the foregoing statute states, inter alia, that 
when VA notifies a claimant of a decision, ``[t]he notice shall include 
an explanation of the procedure for obtaining review of the decision.'' 
38 U.S.C.A. Sec. 5104(a). This section could be amended to read: ``The 
notice shall include an explanation of the procedure for obtaining 
review of the decision, to include any associated appeal election 
forms.'' The VA could then modify 38 CFR Sec. 3.2600 accordingly.
    The VA currently receives over 100,000 NODs annually. This minor 
change would eliminate 60 days of undue delay in every one of those 
appeals and eliminate VA's requirement to separately mail, in letter 
format, all 100,000 plus appeal election forms. This recommendation, 
along with the foregoing recommendation, would have a tremendous effect 
on VA's appeals workload without the need to expend any governmental 
resources.
   ii. modify the court's jurisdiction to insure effective judicial 
      review--its current standard of review adds to claim delays.
    Over the years, the Court of Appeals for Veterans Claims (Court) 
has shown a reluctance to reverse errors committed by the BVA. Rather 
than addressing an allegation of error raised by an appellant, the 
Court has a propensity to vacate and remand cases to the Board based on 
an allegation of error made by the VA Secretary, such as an inadequate 
statement of reasons or bases in the board decision.
    Another example occurs when the Secretary argues for remand by the 
Court because VA failed in its duty to assist the claimant in 
developing the claim notwithstanding the Board's express finding of 
fact that all development is complete. Such actions are particularly 
noteworthy because the Secretary has no legal authority to appeal a 
Board decision to the Court. 38 U.S.C.A. Sec. 7252(a) (West 2002) 
(``The Court of Appeals for Veterans Claim shall have exclusive 
jurisdiction to review decisions of the Board of Veterans' Appeals. The 
Secretary may not seek review of any such decision.'').
    These types of defend-to-the-death characteristics by counsel are 
not at all surprising in most settings. However, they can easily rise 
to a level of inappropriateness in the setting at hand. The United 
States Court of Appeals for the Federal Circuit has addressed the 
American Bar Association's Model Code of Professional Responsibility, 
which expressly holds a government lawyer in a civil action or 
administrative proceeding to higher standards than a private lawyer. A 
government lawyer has ``the responsibility to seek justice.'' Freeport-
McMoRan Oil & Gas Co. v. F.E.R.C., 962 F.2d 45, 47 (1992). In other 
words, the government lawyer should not attempt to ``win at any cost.'' 
The Court has drawn attention to the fact that the VA General Counsel's 
function of representing the Department also extends to veteran 
claimants, that the General Counsel should ``look at all sides of the 
case,'' and is obligated ``to see that the veteran gets what he or she 
is entitled to.'' Johnson v. Brown, 7 Vet. App. 95, 98 (1994). 
Furthermore, the General Counsel should ``suggest remand where 
indicated'' and ``attempt to `settle cases' '' where appropriate. Id.
    Nonetheless, the Court will generally decline to review alleged 
errors raised by an appellant that actually serve as the basis of the 
appeal. Instead, the Court remands the remaining alleged errors on the 
basis that an appellant is free to present those errors to the Board 
even though an appellant may have already done so, leading to the 
possibility of the Board repeating the same mistakes on remand that it 
had previously. Such remands leave errors by the Board, and properly 
raised to the Court, unresolved; reopen the appeal to unnecessary 
development and further delay; overburden a backlogged system already 
past its breaking point; exemplify far too restrictive and out-of-
control judicial restraint; and inevitably require an appellant to 
invest many more months and perhaps years of his or her life in order 
to receive a decision that the Court should have rendered on initial 
appeal. As a result, an unnecessarily high number of cases are appealed 
to the Court for the second, third, or fourth time.
    This type of judicial restraint is highly ineffective. It serves 
neither the VA nor its clientele any favorable purpose. It is merely a 
judicially created law that only serves the Court. The practice is 
rooted in the Best decision, which held: ``A narrow decision preserves 
for the appellant an opportunity to argue those claimed errors before 
the Board at the readjudication, and, of course, before this Court in 
an appeal, should the Board rule against him.'' Best v. Principi, 15 
Vet. App. 18, 20 (2001). The Court's language, couched speciously in a 
favorable tone, in practice is but a fallacy. The idea that an issue 
not addressed by the Court, regardless of how well framed, is better 
for the appellant if preserved for the Board to take a second 
proverbial bite at the apple is nonsensical.
    The Best doctrine has been invoked no less than 1,123 times since 
2001. Many of those cases have returned to the Court repeatedly. That 
represents significant VA resources that could have been spent on 
resolving original appeals rather than making the same decision on the 
same case for a second, third, or fourth time. Such a result is 
inevitable following a Court vacate/remand containing no judicial 
guidance whatsoever.
    In addition to postponing decisions and prolonging the appeal 
process, the Court's reluctance to reverse BVA decisions provides an 
incentive for VA to avoid admitting error and settling appeals before 
they reach the Court. By merely ignoring arguments concerning legal 
errors rather than resolving them at the earliest stage in the process, 
VA contributes to the backlog by allowing a greater number of cases to 
go before the court. If the Court were to address all properly raised 
assignments of error, more appeals would be reversed, which would 
discourage VA from standing firm on decisions that are likely to be 
overturned or settled late in the process.
Recommendation
    Congress should amend the Court's jurisdiction to require that it 
decide all assignments of error properly presented by an appellant. 
There is currently a bill in the house (H.R. 5892) that would amend 38 
U.S.C.A. Sec. 7252(a) to require the Court to decide assignments of 
error when properly raised. H.R. 5892 would add the following to 
section 7252(a):

        The Court shall have power to affirm, modify, reverse, remand, 
        or vacate and remand a decision of the Board after deciding all 
        relevant assignments of error raised by an appellant for each 
        particular claim for benefits. In a case in which the Court 
        reverses a decision on the merits of a particular claim and 
        orders an award of benefits, the Court need not decide any 
        additional assignments of error with respect to that claim.

    This type of statutory amendment would have very positive impact in 
many ways, not the least of which would prevent the Court from 
arbitrarily remanding appeals without addressing an appellant's primary 
reason for appealing to the Court in the first place. This in turn 
would prevent the Board from rendering the exact same erroneous 
decision as it previously issued. The result is less undue delay in the 
claims process.
    The DAV fully supports this bill and requests the Senate initiate 
similar legislation.
   iii. congress should simplify, solidify, and provide structure to 
                   the va claims development process.
    In order to understand the complexities, the bureaucratic and 
procedural dilemmas, and the bewildering nature of the claims process 
and how these characteristics unduly delay accurate and lawful 
conclusion of claims, one must focus on the individual processes and 
how they affect the program as a whole. Whether through uncontrolled 
judicial orders, continuously repeated mistakes that cause frequent 
variances in decisionmaking, or inherent unfairness accidentally built 
into the system, portions of the claims processing system have become 
far too complex, very loosely structured, and too open to the whims of 
VARO-level personal discretion. By solidifying and properly structuring 
these processes, Congress can build on what otherwise works.
            A. Provide solid, nondiscretionary structure to VA's ``duty 
                    to notify.''
    The law regarding VA's requirement to provide notice to claimants 
of information needed to complete their claim is found in title 38, 
United States Code, section 5103, otherwise known as VA's ``duty to 
notify.'' Section 5103(a) states:

        Upon receipt of a complete or substantially complete 
        application, the Secretary shall notify the claimant and the 
        claimant's representative, if any, of any information, and any 
        medical or lay evidence, not previously provided to the 
        Secretary that is necessary to substantiate the claim. As part 
        of that notice, the Secretary shall indicate which portion of 
        that information and evidence, if any, is to be provided by the 
        claimant and which portion, if any, the Secretary, in 
        accordance with section 5103A of this title [38 USCS 5103A] and 
        any other applicable provisions of law, will attempt to obtain 
        on behalf of the claimant.

38 U.S.C.A. Sec. 5103. See Veterans Claims Assistance Act of 2000 
(VCAA), Pub. L. 106-475, 114 Stat. 2096 (Nov. 9, 2000). The enactment 
of this section was well intended. It has nonetheless led to unintended 
consequences that have proven detrimental, rather than beneficial, to 
the claims process. Essentially, the language of section 5103(a) has 
led to such a procedural quagmire that it is not fulfilling its 
intended benefit to VA claimants.
    Many Court decisions have significantly expanded VA's statutory 
duty to notify, in terms of both content and timing of that notice. 
These decisions have long-term implications. The Court has mandated 
specific content of VA's notice to claimants that impose both highly 
complex and problematic duties in a claims system that was designed to 
be informal--continual rework and re-notice has become unavoidable. 
Since VCAA's enactment in November 2000, the Court has issued at least 
17 precedential decisions imposing stringent requirements of content 
and timing.
    Although VCAA has been in effect for 6 years, the Court continues 
to expand and interpret it. In early 2006, a Court ruling required VA 
to send more than 450,000 supplemental notice letters.
    Despite the foregoing, the DAV does not fault the Court for doing 
its job, nor do we fault Congress for enacting legislation meant to 
assist VA claimants. The root of the problem is that the statutory 
language is far too broad. There is nearly no limit of requirements 
that can be read into its language.
    The Court, on the other hand, recognizes VA's benefits system as a 
veteran-friendly, pro-claimant, and non-adversarial process for 
providing benefits to our Nation's disabled veterans. It has, since the 
enactment of VCAA, been interpreted by the Court as broadly as 
possible. For example, by direction of the Supreme Court, ambiguity in 
a veterans' benefits statute must be resolved in favor of the claimant. 
Brown v. Gardner, 513 U.S. 115, 118 (1994) (directing that reasonable 
doubt in statutory interpretation is to be ``resolved in the veteran's 
favor''). Moreover, it is a longstanding maxim of statutory 
interpretation that remedial legislation, is to be interpreted broadly 
in order to effectuate its basic purpose. See Smith (William) v. Brown, 
35 F.3d 1516, 1525 (Fed. Cir. 1994) (``courts are to construe remedial 
statutes liberally to effectuate their purposes * * * and veterans' 
benefits statutes clearly fall in this category'').
    When Congress writes legislation that is less than completely 
clear, it is the judiciary's role to make the best of the language that 
is enacted and to seek to find a reasonable interpretation of the 
statutory text consistent with the goals that Congress has indicated it 
sought to achieve with that legislation. If, after undertaking this 
analysis, the only reasonable conclusion is that Congress, 
notwithstanding its intention, failed to provide statutory language 
that can be fairly interpreted as achieving its basic legislative 
purpose should a court tell Congress ``nice try, but you haven't done 
the job you apparently intended to do.'' However, those interpretations 
have actually done more to add to procedural requirements than they 
have ever done to resolve cases.
Recommendation
    The solution behind the notice problem is somewhat simple: amend 
section 5103 to state the specific type of information VA is required 
to include in its notice, in both content and timing. The goal is to 
ensure such language is helpful and understandable to the claimant 
while specific enough to set limits aimed at shielding it from 
continuous judicial interpretation.
    Any such amendment should specify that the notice requirements 
contained in section 5103 apply to benefits under title 38, chapters 
11, 13, and 15 (i.e., disability compensation, dependency and indemnity 
compensation, and pension). Further, while we will not suggest verbatim 
how the statutory language should be amended, we nonetheless have some 
specific suggestions.
    The premise behind section 5103 should be that VA is required to 
provide the claimant notice of the ``basic'' type of information 
necessary to substantiate a claim, (for clarity, ``basic'' should be 
defined in the statute, i.e., ``starting point''). The statute should 
also indicate that VA ``may,'' ``but is not required'' to provide 
additional evidence as it finds necessary so as not to tie the agency's 
hands should it decide to expand its notice.
    The statute should also be clear as to what evidence the notice 
should not include, such as: (1) information concerning effective dates 
unless such is the basis of the claim; (2) individual diagnostic code 
rating criteria; (3) methods of determining applicable diagnostic codes 
to include information concerning VA's rating scale (this information 
can be explained in a rating decision); and, any other criteria that is 
determined extraneous and/or confusing to the claimant. Despite our 
foregoing general advice, we must explain our suggested notice 
requirements for most claims of service connection somewhat more 
thoroughly.
    Service connection connotes many factors; however, it essentially 
means that the facts, shown by evidence, establish that a particular 
injury or disease resulting in disability was incurred coincident with 
service in the Armed Forces, or if preexisting such service, was 
aggravated therein. See 38 CFR Sec. 3.303(a) (2007). Establishing 
service connection generally requires: (1) medical evidence of a 
current disability; (2) medical evidence, or, in certain circumstances, 
lay evidence of in-service incurrence or aggravation of a disease or 
injury; and (3) medical evidence of a nexus between the claimed in-
service disease or injury and the present disease or injury. Hickson v. 
West, 12 Vet. App. 247, 253 (1999); see 38 CFR Sec. 3.303(a). In some 
cases, continuity of symptoms between the time of discharge and the 
claim will suffice in the absence of a medical nexus between service 
and the disability. See 38 CFR Sec. 3.303(b).
    Claims of service connection are the foundation of VA's benefits 
system. Service connection and increased-rating claims easily make up 
the bulk of VBAs work, but the notice required for an increased-rating 
claim is less controversial and not the subject here. The subject is 
part of the notice that should be required for service connection 
claims. The crux of a majority of these claims lies in either a 
claimant or the VA obtaining a medical opinion. In fact, there are 
nearly entire volumes of Veterans Appeals Reporters filled with case 
law regarding the subject of medical opinions, i.e., who is competent 
to provide them, when are they credible, when are they adequate, when 
are they legally sufficient, when or which ones are more probative, 
etc. Yet, the one group of people that still understand VA's 
requirements concerning medical opinions the least are its claimants.
    The issue of medical opinions could easily be a subject of its own, 
but in the context of undue delay in the claims process, there is ample 
room to improve the law concerning medical opinions in a manner that 
would bring noticeable efficiency to VA's claims process. It must start 
with VA's notice requirements under section 5103.
    When VA issues a VCAA letter under its current notice requirements, 
the letter, if addressing the issue of service connection, normally 
informs a claimant that he/she may submit their own medical opinion. 
Such letter also states that VA may obtain one for them. Likewise, most 
claimants understand the requirement for a medical opinion linking 
their current disability to their military service. In accordance with 
the foregoing suggested amendments to section 5103, VA should be 
required to inform a claimant filing for service connection the basic 
elements needed to substantiate the claim, one of those elements being 
the necessity for a medical opinion.
    However, a bare statement advising a claimant of the need for a 
medical opinion should not suffice. Such a bare statement would also do 
nothing to solve the continuous problems caused by claimants' poor 
understanding of proper medical opinion adequacy. The VA's notice 
requirements should be amended to include specific information 
concerning the basic elements that render a medical opinion adequate 
for rating purposes, i.e., a medical statement indicating what records 
(e.g., service medical records, copy of VA claims file, etc.) were 
reviewed in reaching the opinion, a medical rationale for the opinion, 
and a conclusion to the opinion stated in terms of ``as likely as 
not,'' ``more likely than not,'' or ``less likely than not'' rather 
than ``maybe,'' ``possibly,'' or ``could be.''
    As a matter of fairness, the VA does relay this exact information 
to its own doctors when it seeks a medical opinion. If VA claimants 
were aware of what constitutes a medical opinion adequate for rating 
purposes, it would prevent the VA from having to delay a decision on 
the claim by seeking its own opinion. This would also reduce the 
numerous appeals that result from conflicting medical opinions--appeals 
that are ultimately decided in an appellant's favor more often than 
not.
    If Congress amends 38 U.S.C. Sec. 5103 as requested above, it 
should also amend section 5103A(d)(1), which currently states: ``In the 
case of a claim for disability compensation, the assistance provided by 
the Secretary under subsection (a) shall include providing a medical 
examination or obtaining a medical opinion when such an examination or 
opinion is necessary to make a decision on the claim.'' A sentence 
should be added to section 5103A(d)(1) that states: ``However, when a 
claimant submits private medical evidence, to include a medical 
opinion, that is competent, credible, probative, and otherwise adequate 
for rating purposes in accordance with sections 5103 and 5125 [section 
5125 to be discussed below] of this title, the Secretary shall not 
request such evidence from a Department health care facility.''
    While some may view the foregoing suggestion as tying VA's hands 
with respect to private medical evidence, or more specifically, medical 
opinions, it does not nor is it our intention to do so. The new 
language suggested above concerning section 5103A(d)(1) would not bind 
the VA to accepting such private evidence if it finds the evidence is, 
for example, not credible or not adequate for rating purposes. The goal 
is, as discussed below, to eliminate overdevelopment of claims.
            B. Remove duplicative processes from VA's ``duty to 
                    assist.''
    VA claimants should be encouraged to participate in the development 
of their own claims to the extent possible. Apart from filling out an 
application, one of the easiest functions that a claimant can perform 
happens to be the cause of some of the longest delays in the claims 
process--obtaining private records. While this function can sometimes 
prove difficult for unrepresented claimants who are very elderly, 
severely disabled, or incompetent, most claimants can easily obtain 
their own private records. In fact, most claimants prefer to do so as 
they can then ensure the VA receives the pertinent records.
    The VA will obtain these types of records for a claimant. However, 
undue delays in the claims process arise out of statutory and 
regulatory requirements that cause the VA to request the same private 
treatment records repeatedly. The pertinent section of the VA's ``duty 
to assist'' statute, 38 U.S.C.A. Sec. 5103A(b) states:

          (b) Assistance in obtaining records.--(1) As part of the 
        assistance provided under subsection (a), the Secretary shall 
        make reasonable efforts to obtain relevant records (including 
        private records) that the claimant adequately identifies to the 
        Secretary and authorizes the Secretary to obtain.
          (2) Whenever the Secretary, after making such reasonable 
        efforts, is unable to obtain all of the relevant records 
        sought, the Secretary shall notify the claimant that the 
        Secretary is unable to obtain records with respect to the 
        claim. Such a notification shall--
                  (A) identify the records the Secretary is unable to 
                obtain;
                  (B) briefly explain the efforts that the Secretary 
                made to obtain those records; and
                  (C) describe any further action to be taken by the 
                Secretary with respect to the claim.

38 U.S.C.A. Sec. 5103A(b) (West 2002 & Supp. 2007).
    The VA promulgated a regulation concerning the above statutory 
requirements that states:

        Obtaining records not in the custody of a Federal department or 
        agency. VA will make reasonable efforts to obtain relevant 
        records not in the custody of a Federal department or agency, 
        to include records from State or local governments, private 
        medical care providers, current or former employers, and other 
        non-Federal Governmental sources. Such reasonable efforts will 
        generally consist of an initial request for the records and, if 
        the records are not received, at least one follow-up request * 
        * *.

38 CFR Sec. 3.159(c)(1) (2007).
    These provisions of law have evolved to cause the VA to request the 
same set of records multiple times, usually to no avail. Alternatively, 
when such attempts fail, the pertinent private records are usually 
submitted by the claimants themselves. These duplicative development 
procedures cause massive delays in the claims process and feed 
otherwise empty litigating positions of many attorneys representing 
appellants before the Court. The latter, just as in litigating 
positions regarding the VA's ``duty to notify,'' continues to result in 
numerous judicial precedent that merely adds hollow procedures to the 
VA's development requirements.
Recommendation
    The undue delays caused by these requirements can be made much more 
efficient by amending section 5103A(b) to limit the VA's requirement 
that it request no individual private record or set of private records 
more than once. This would reduce by hundreds of thousands the number 
of duplicative letters mailed by VA.
            C. Prevent overdevelopment of claims.
    Numerous developmental procedures in the VA claims process 
collectively add undue delay in the claims process. For example, rather 
than making timely decisions on C&P claims when evidence development 
may be complete, the VA routinely continues to develop claims. These 
actions lend validity to many veterans' accusations that whenever VA 
would rather not grant a claimed benefit, VA intentionally overdevelops 
cases to obtain evidence against the claim. Despite these accusations, 
a lack of adequate training is just as likely the cause of some 
overdevelopment.
    Such actions result in numerous appeals, followed by needless 
remands from the Board and/or the Court. In many of these cases, the 
evidence of record supports a favorable decision on the appellant's 
behalf yet the appeal is remanded nonetheless. These unjustified 
remands usually do nothing but perpetuate the hamster-wheel reputation 
of veterans' law. In fact, the BVA is guilty of remanding an untold 
number of appeals solely for unnecessary medical opinions. From October 
2006 to October 2007, the Board remanded 12,269 appeals in order to 
obtain medical opinions. While many were legitimate, far too many were 
remanded for no other reason but to obtain a VA medical opinion merely 
because the appellant had submitted a private medical opinion. Such 
actions are a complete waste of VA's resources.
    The foregoing amendments to section 5103A(d)(1) suggested in 
``III.A.'' of this testimony would have a significant positive effect 
on this problem. Essentially, VA requests unnecessary medical opinions 
in cases where the claimant has already submitted one or more medical 
opinions that are adequate for rating purposes. VA claimants desiring 
to secure their own medical evidence, including a fully informed 
medical opinion, are entitled by law to do so. If a claimant does 
secure an adequate medical opinion, there is no need in practicality or 
in law for VA to seek its own opinion. Congress enacted title 38, 
United States Code, section 5125 for the express purpose of eliminating 
the former 38 Code of Federal Regulations, section 3.157(b)(2) 
requirement that a private physician's medical examination report be 
verified by an official VA examination report prior to an award of VA 
benefits. Section 5125 states:

        For purposes of establishing any claim for benefits under 
        chapter 11 or 15 of this title, a report of a medical 
        examination administered by a private physician that is 
        provided by a claimant in support of a claim for benefits under 
        that chapter may be accepted without a requirement for 
        confirmation by an examination by a physician employed by the 
        Veterans Health Administration if the report is sufficiently 
        complete to be adequate for the purpose of adjudicating such 
        claim. [Emphasis added]

38 U.S.C.A. Sec. 5125 (West 2002). Therefore, Congress codified section 
5125 to eliminate unnecessary delays in the adjudication of claims and 
to avoid costs associated with unnecessary medical examinations.
    Notwithstanding the elimination of 38 CFR Sec. 3.157, and the 
enactment of 38 U.S.C.A. Sec. 5125, VA consistently refuses to render 
decisions in cases wherein the claimant secures a private medical 
examination and medical opinion until a VA medical examination and 
medical opinion are obtained. Such actions are an abuse of discretion 
that delay decisions and prompt needless appeals. When claimants submit 
private medical evidence that is competent, credible, and otherwise 
adequate for rating purposes, Congress should mandate that VA must 
decide the case based on such evidence rather than delaying the claim 
by arbitrarily and unnecessarily requesting additional medical 
examinations and opinions from the agency. Such enactment will preserve 
VA's manpower and budgetary resources; help reduce the claims backlog 
and prevent needless appeals; and most importantly, better serve 
disabled veterans and their families.
Recommendation
    Congress should amend title 38, United States Code, section 5125, 
insofar as it states that a claimant's private examination report ``may 
be accepted * * * if * * * the report is sufficiently complete to be 
adequate for the purpose of adjudicating such claim.'' The foregoing 
statutory language should be amended to read that a claimant's private 
examination report, including medical opinion, ``must be accepted * * * 
if * * * the report is (1) provided by a competent health care 
professional, (2) probative to the issue being decided, (3) credible, 
and (4) otherwise adequate for the purpose of adjudicating such 
claim.''
            D. Restore fairness to the claims process.
    In order for us to reach the conclusion regarding this 
recommendation, we must explain the story of James Halvatgis. Mr. 
Halvatgis served approximately 25 years of honorable service. He was 
diagnosed with a right lumbar strain following a lifting injury in 
February 1963. Mr. Halvatgis also hurt his back when he fell 
approximately 20 feet while rappelling and then again in a jeep 
accident when he was thrown from the vehicle while swerving to avoid a 
landmine in Vietnam.
    He reported low back pain in July 1966, December 1968, September 
through November 1973, September through October 1974, and again in 
1976. Many of these symptoms spanned months at a time and were 
accompanied by neurological symptoms indicating nerve involvement. X-
rays of the veteran's low back taken prior to military discharge 
revealed minimal sacralization of the L5 with secondary slight 
narrowing of the L5-S1 (i.e., stenosis), spina bifida occulta of the S1 
segment and slight right scoliosis.
    Numerous private treatment records following discharge continued to 
document a definite back disability. A board-certified orthopedic 
surgeon, who was also an Associate Professor of Orthopedic Surgery, 
diagnosed degenerative joint disease of the lumbar spine with spinal 
stenosis. The VA subsequently received a medical opinion from this same 
orthopedic surgeon wherein he stated that he felt that the veteran had 
symptoms since the 1960's with respect to his low back and opined that 
in all likelihood, the Vietnam War injuries contributed to his early 
onset of arthritis and spinal stenosis.
    Mr. Halvatgis filed a claim of service connection for his low back 
condition in January 2002 wherein he explained in detail the 
circumstances of his injuries during service. Mr. Halvatgis explained 
how his fall during rappelling training produced severe pain in the 
neck and back, but that he was scheduled to graduate from Ranger school 
the following day. The veteran further explained that he did not seek 
medical treatment despite the pain he experienced as he did not want to 
jeopardize his chances of graduating from Ranger school. Mr. Halvatgis 
also explained the circumstance surrounding the jeep accident. He 
indicated that when thrown from the jeep he landed on his head, neck, 
shoulders, and back.
    Mr. Halvatgis submitted a statement to VA that all doctors who 
provided statements regarding his claims were afforded one complete 
copy of his service medical records. In April 2002, the VA received 
another medical opinion from a second board-certified orthopedic 
surgeon, who again was also an Associate Professor of Orthopedic 
Surgery. This physician stated that he had treated Mr. Halvatgis since 
March 1993 for chronic back problems and that he had also reviewed the 
veteran's service medical records. The physician opined that the 
veteran's ``condition is a continuation of the difficulties he 
developed in the service.''
    The veteran submitted a second medical (totaling three) opinion 
from one of the surgeons that stated the low back pain Mr. Halvatgis 
complained of while in the military ``gradually progressed to the point 
where he now has post-traumatic arthritis of the lumbar spine.'' A 
second opinion from the other surgeon (totaling four) was submitted 
that stated, ``[h]e had problems dating back to 1974 when * * * he was 
noted to have collapse, narrowing, and degeneration at the L5-S1 level. 
I have reviewed his medical service record which indicates this 
difficulty to that point in time.''
    In developing the claim, the VA conducted an examination of Mr. 
Halvatgis, in which it asked for a medical opinion, despite the 
opinions already of record. The examination, to include the medical 
opinion was performed by a non-certified physician assistant (``PA'' 
rather than ``PA-C''). Without referring to all of the treatment 
records in service, and without acknowledging the evidence that 
included four opinions presented by the two orthopedic surgeons, the 
physician assistant opined that Mr. Halvatgis' condition was congenital 
and otherwise age related, and therefore not related to his service. 
Based on the physician assistant's opinion, the VA denied the claim.
    Mr. Halvatgis appealed to the Board. After reviewing all the 
evidence from the SMRs, the private medical evidence and medical 
opinions based on the veteran's service records from two board-
certified orthopedic surgeons, together with one medical opinion from a 
non-certified physician assistant, the Board found that there was ``no 
competent evidence linking the veteran's low back disorder with his 
service * * *.'' The Board arbitrarily provided the physician 
assistant's opinion more probative value simply because that examiner 
had reviewed the veteran's claims file, despite the fact that each 
orthopedic surgeon had reviewed Mr. Halvatgis' SMRs (the remainder of 
evidence in the claims file was mostly the private treatment records 
that were actually from the treating orthopedic surgeons).
    Mr. Halvatgis appealed to the Court. See Halvatgis v. Mansfield, 
No. 06-0149, 2007 WL 4981384 (U.S. Vet. App., November 2, 2007). 
Because of the Board's nearly unreviewable authority to assign 
probative value as arbitrarily as it sees fit, regardless of how 
abusive, and because of the Court's refusal to reverse such ludicrous 
decisions if they contain the slightest scintilla of plausibility, the 
Court denied Mr. Halvatgis' claim of service connection for his back 
condition.
    Unfortunately, cases such as this are not at all uncommon. A 
combination of reasons explains the inherent unfairness displayed in 
Mr. Halvatgis' case, to include countless others like his. Part of the 
problem is because a claimant's statutory right to the benefit of the 
doubt in cases like this (see 38 U.S.C.A. Sec. 5107), has been 
converted by the Court's jurisprudence to nothing more than meaningless 
window dressing consisting only of smoke and mirrors. See The 
Independent Budget's Judicial Review section for a complete explanation 
of the flaws concerning the benefit of the doubt.
    Another reason, as explained above, is that the Board has nearly 
unreviewable authority to assign probative value to evidence. The Board 
is fully aware that its power to assign such value to evidence is 
practically untouchable; therefore, rather than using that power to 
ensure fairness and objectivity when reviewing evidence, it 
consistently yields it as a proverbial double-edged sword to 
marginalize and minimize evidence to fit its own subjective view.
    Each of the above problems is significant in and of itself--each 
deserves attention from this Committee. Nonetheless, the root of these 
problems lies in the inefficient, sometimes unfair, and far too 
subjective processes for obtaining medical opinions in the VA's 
benefits system. As unfair, unlawful, and subjective as the 
circumstances in Mr. Halvatgis' case are, and as many problems that 
exist between the Board and the Court regarding this subject, the 
procedural mess and undue delays effect far more cases at the VARO 
level. Improving the process locally will have a positive ripple effect 
throughout the system.
Recommendation
    Congress should further amend section 5103A to indicate that in 
circumstances where a claimant submits a private medical opinion in 
accordance with the remainder of sections 5103A, 5103, and 5125 (if 
amended in accordance with suggestions herein), and that where the VA 
finds such medical opinion competent, credible, and probative, but 
otherwise not entirely adequate for rating purposes, and based on such 
finding decides to obtain a medical opinion from a Department health 
care provider, such opinion shall be obtained from a medical expert 
with equal qualifications as that of the private health care provider 
who rendered the private medical opinion on behalf of the claimant. Mr. 
Halvatgis' case, and thousands of others like his, serves as a perfect 
example for such a change in law.
    Mr. Halvatgis took an active role in the development of his own 
case by obtaining evidence from multiple physicians of the highest 
stature; in turn, the VA obtained a contradictory opinion from a non-
certified physician assistant, which are some of the lowest qualified 
professionals in the health care field.\2\
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    \2\ Physician Assistants receive approximate 2 years of training, 
less in some circumstances. See /www.aapa.org/geninfo1.html> and 
U.S. Department of Labor, Bureau of Labor Statistics, Occupational 
Outlook Handbook, at /www.bls.gov/oco/ocos081.htm>
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    In order to qualify as a physician assistant under current VA 
standards, the minimum requirements are 12 months of formal training, 
certified by ARC-PA, and what is otherwise on-the-job training. See VA 
Handbook 5005, Part II, Appendix G8 (April 2002). Additionally, while 
the VA, the Board, and the Court generally recognized physician 
assistants as having authority to render medical opinions, the Veterans 
Health Administration (VHA) has not. VA prescribed utilization of 
physician assistants in VHA Directive 2004-029.
    That Directive contains VA's published ``Physician Assistant Scope 
of Practice,'' which does not authorize physician assistants to provide 
medical opinions on any issue. Performing routine physical examinations 
are authorized; providing medical opinions are not. Yet the practice 
continues. Nonetheless, please understand that DAV is not advocating 
that physician assistants not be allowed to render opinions, but they 
certainly should not be allowed to counter the opinions of one or more 
Board-certified experts, especially when each opinion is based on a 
review of the exact same evidence.
            E. Reverse VA's rejection of the treating physician rule.
    Appellants and many legal advocates have long urged the Court to 
adopt the ``treating physician rule'' (the Rule), as applied by the 
majority of Federal courts in evaluating claims for disability benefits 
under the Social Security Act. 42 U.S.C.A. Sec. 301 et seq. The Rule 
``governs the weight to be accorded to the medical opinion of the 
claimant's treating physician relative to other evidence before the 
factfinder, including the opinions of other physicians.'' Schisler v. 
Heckler, 787 F.2d 76, 81 (2nd Cir. 1986). In Schisler, the United 
States Court of Appeals for the Second Circuit stated the ``Rule'' as 
follows:

        [The] treating source's opinion on the subject of medical 
        disability, i.e., diagnosis and nature and degree of 
        impairment, is (i) binding on the factfinder unless 
        contradicted by substantial evidence; and (ii) entitled to some 
        extra weight, * * * although resolution of genuine conflicts 
        between the opinion of the physician, with its extra weight, 
        and any substantial evidence to the contrary remains the 
        responsibility of the fact-finder.

Schisler, 787 F.2d at 81.
    The ``Rule'' was formulated specifically to address problems 
generated by the Social Security system, where the factfinder must 
weigh the diagnosis of a claimant's physician against the opinions of 
Social Security's consulting physicians. The Rule is applied to help 
resolve conflicting medical evidence by giving legal recognition to the 
assumption that a Social Security claimant's own treating doctor is the 
physician best able to present a complete picture of the claimant's 
medical condition. A similar rule adopted by the VA would provide sound 
legal structure to an otherwise far too subjective system insofar as 
medical opinions within the VA are concerned.
    The Social Security Administration's ``Rule'' is grounded in 
statute. 42 U.S.C.A. Sec. 423(d)(5)(B). Since the VA has no equal 
statute, the VA's General Counsel has argued in return that VA should 
not adopt the ``Rule.'' See Guerrieri v. Brown, 4 Vet. App. 467, 471-73 
(1993). It is rather surprising given the non-adversarial, pro-
claimant, veteran-friendly system that the VA touts, that any valid 
argument exists for not adopting such a rule in title 38. This is 
especially true considering the anti-veteran tactics displayed in the 
Halvatgis case.
    Congress should also be aware that, as in other recommendations 
herein concerning medical opinions, that we do not desire to tie the 
VA's hands. If a claimant's treating-physician medical opinion is not 
adequate as discussed herein, then the VA should not be bound to accept 
it. Likewise, if such an opinion is genuinely contradicted by evidence 
of obvious greater probative value, then the VA should not be bound by 
the opinion.
Recommendation
    Congress should add a subsection to section 5125 that adopts a 
treating physician rule, whether such physician happens to a private or 
VA health care provider. Consideration of a claimant's evidence from 
his/her treating physician would be subject to the suggested amendment 
herein to sections 5103, 5103A, and 5125.
       iv. the va must address its problems with accountability.
    We have consistently stated that quality is the key to timeliness. 
Timeliness follows from quality because omissions in record 
development, failure to afford due process, and erroneous decisions 
require duplicative work, which add to the load of an already 
overburdened system. Quality is achieved with adequate resources to 
perform comprehensive and ongoing training, to devote sufficient time 
to each case, and to impose and enforce quality standards through 
effective quality assurance methods and accountability mechanisms.
    One of the most essential resources is experienced and 
knowledgeable personnel devoted to training. More management devotion 
to training and quality requires a break from the status quo of 
production goals above all else. In a 2005 report from VA's Office of 
Inspector General, VBA employees were quoted as stating: ``Although 
management wants to meet quality goals, they are much more concerned 
with quantity. An RVSR is much more likely to be disciplined for 
failure to meet production standards than for failing to meet quality 
standards;'' and that ``there is a lot of pressure to make your 
production standard. In fact, your performance standard centers around 
production and a lot of awards are based on it. Those who don't produce 
could miss out on individual bonuses, etc.'' \3\
---------------------------------------------------------------------------
    \3\ Department of Veterans Affairs Office of Inspector General, 
Rep. No. 05-00765-137, Review of State Variances in VA Disability 
Compensation Payments 61 (May 19, 2005).
---------------------------------------------------------------------------
    In addition to basing awards on production, the DAV strongly 
believes that quality should be awarded at least on parity with 
production. However, in order for this to occur, VBA must implement 
stronger accountability measures for quality assurance.
    VA's quality assurance tool for compensation and pension claims is 
the Systematic Technical Accuracy Review (STAR) program. Under the STAR 
program, VA reviews a sampling of decisions from regional offices and 
bases its national accuracy measures on the percentage with errors that 
effect entitlement, benefit amount, and effective date.
    Inconsistency signals outright arbitrariness in decisionmaking, 
uneven, or overall insufficient understanding of governing criteria or 
rules for decisions or rules that are vague or overly broad to allow 
them to be applied according to the prevailing mindset of a particular 
group of decisionmakers. Obviously, VA must detect inconsistencies 
before the cause or causes can be determined and remedied.
    Simply put, there is a gap in quality assurance for purposes of 
individual accountability in quality decisionmaking. In the STAR 
program, a sample is drawn each month from a regional office workload 
divided between rating, authorization, and fiduciary end-products. For 
example, a monthly sample of ``rating'' related cases generally 
requires a STAR review of 10 rating-related end products.\4\ Reviewing 
10 rating-related cases per month for an average size regional office, 
an office that would easily employee more than three times that number 
of raters, is undeniable evidence of a total void in individual 
accountability. If an average size regional office produced only 1,000 
decisions per month, which we feel is quite conservative, the STAR 
program would only review 1 percent of the total cases decided by that 
regional office. Those figures leave no room for trend analysis, much 
less personal accountability.
---------------------------------------------------------------------------
    \4\ See M21-4, Ch. 3, Sec. 3.02.
---------------------------------------------------------------------------
    Another method of measuring the VA's need for more accountability 
is an analysis of the Board's Summary of Remands, while keeping in mind 
that its summary represents a statistically large and reliable sample 
of certain measurable trends. The examples must be viewed in the 
context of the VA (1) deciding 700,000 to 800,000 cases per year; (2) 
receives over 100,000 NODs; and (3) submits 40,000 appeals to the 
Board. The examples below are from October 2006 to October 2007.
    Remands resulted in 998 cases because no ``notice'' under section 
5103 was ever provided to the claimant. The remand rate was much higher 
for inadequate or incorrect notice; however, considering the confusing 
(and evolving) nature of the law concerning ``notice,'' we can only 
fault the VA when it fails to provide any notice.
    VA failed to make initial requests for SMRs in 667 cases and failed 
to make initial requests for personnel records in 578 cases. The number 
was higher for additional record requests following initial. This 
number is disturbing because initially requesting a veteran's service 
records are the foundation to every compensation claim. It is claims 
development 101.
    The Board remanded 2,594 cases for initial requests for VA medical 
records and 3,393 cases for additional requests for VA medical records. 
The disturbing factor here is that a VA employee can usually obtain VA 
medical records without ever leaving the confines of one's computer 
screen.
    Another 2,461 cases were remanded because the claimant had 
requested a travel board hearing or video-conference hearing. Again, 
there is a disturbing factor here. A checklist is utilized prior to 
sending an appeal to the Board that contains a section that 
specifically asked whether the claimant has asked for such a hearing.
    The examples above totaled 7,298 cases, all of which cleared the 
local rating board and the local appeals board with errors that are 
elementary in nature. Yet they were either not detected or they were 
ignored. The problem with the VA's current system of accountability is 
that it does not matter if they were ignored because those that commit 
such errors are usually not held responsible. They therefore have no 
incentive to concern themselves with the quality of their work. Above 
all else, these figures showing that the VA's quality assurance and 
accountability systems require significant enhancement.
    To recap the various issues regarding medical opinions mentioned 
herein in relation to the above analysis, the numbers in all categories 
of remands are completely overshadowed in comparison to the total 
number of remands for initial and/or subsequent medical opinions--
12,269.
Recommendation
    Congress should authorize the formation of a committee comprised of 
congressional staff from the House and Senate Committees on Veterans 
Affairs, select personnel from service organizations, and key employees 
of the Department with a defined purpose of establishing a quality 
assurance and accountability program that will detect, track, and hold 
responsible those VA employees who commit egregious errors.
                               conclusion
    The recommendations herein have been formulated from a perspective 
of ``building on what works.'' With the potential exception of the last 
recommendation, all other recommendations are highly cost effective, in 
both monetary resources and human resources--they will not require 
expenditure of any additional appropriations. Additionally, no 
recommendation herein relaxes any burden of proof or provides for any 
benefit not already provided in law.
    We are confident these recommendations, if enacted, will help 
simplify the confusing claims process, will make efficient its 
cumbersome procedures, and drastically reduce undue delays in the 
claims process. It has been a pleasure to appear before this honorable 
Committee today.

    Chairman Akaka. Thank you very much.
    Mr. Cox.

STATEMENT OF J. DAVID COX, R.N., NATIONAL SECRETARY-TREASURER, 
          AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

    Mr. Cox. Chairman Akaka, Ranking Member Burr and Members of 
the Committee. Thank you for the opportunity to share the views 
of VBA front-line employees on ways to improve claims 
processes.
    AFGE is the sole representative of employees who work on 
the floor to respond to veterans' inquiries and develop and 
rate their cases.
    The current backlog in processing delays is a disservice to 
veterans and unacceptable to AFGE members.
    We want to assist you in any way we can to alleviate this 
growing problem. VBA employees who process claims acquire their 
skills entirely through on-the-job training unlike VA 
registered nurses such as myself who attended professional 
schools. Therefore, experienced VBA employees are in a unique 
position to evaluate VBA training, skill certification tests, 
CPI implementation and IT tools.
    Thus, it was very disheartening to learn that VBA 
contracted with IBM to do a study on claims process 
improvement--to survey 583 management employees and zero front-
line employees. This sends the message that VBA believes that 
front-line employees have zero insight into how to improve the 
claim processes.
    At least, the IBM study is consistent with VBA's practice 
of excluding front-line employees and their representatives 
from national groups addressing training, performance 
standards, and other aspects of the claims process.
    Locally, managers also refused to consider suggestions made 
by employees. These days they want one thing from their 
workforce--make the numbers.
    In contrast, GAO's May 2008 study on VBA training solicited 
the views of front-line employees and AFGE. As a result, GAO's 
findings on training are more informative. For example, the 
need for better evaluation of training and more consistency 
among different instructors and the need to ensure that 
training is not cut short by workload pressures.
    AFGE supports GAO's findings that staff should be held more 
accountable for meeting their training requirements. However, 
this recommendation should be considered in conjunction with 
GAO's other findings: that there is a constant struggle between 
office production goals and training goals.
    By far, the greatest factor preventing employees from 
completing required training is demand from pressured managers 
to work the cases, not lack of employees motivation. In fact, 
on any given day, you will find that VA employees are using 
their breaks and lunch hours to master new materials. Studying 
at home after hours is also a very common practice.
    AFGE thanks this Committee for its role in bringing 3100 
new employees to VBA. Now, the challenge is to use them 
effectively and retain them. More realistic production quotas 
will reduce attrition and burn out. A work credit system that 
recognizes quality as well as quantity, and adjusts for complex 
and multiple issue cases, will reduce management's incentive to 
cut short critical on-the-job training.
    A more professional approach to training is also needed. 
Trainers do not always know their subject matter well enough 
and often lack good teaching skills.
    In addition, despite VBA's centralized training program, 
ROs have too much discretion to determine how training will be 
provided. The independence and professionalism in the training 
academy should be carried over to training at ROs.
    To improve the quality of supervision and ensure that new 
employees receive adequate guidance, supervisors should also be 
required to pass the skills certification test. The VSR skills 
certification test remains the only avenue for GS-10 VSRs to 
rise to a GS-11.
    The last test was offered over 2 years ago and had a 
passage of only 42 percent. VBA needs to improve the quality of 
training provided to employees to prepare for the test.
    In addition, employees need better explanations of missed 
questions so they can master all required subjects.
    Several years ago, VBA initiated a reclassification study 
to update a decades-old VSR job series. It dropped the study 
without explanation. Meanwhile, VBA continues to lose VSRs to 
Social Security and other agencies with higher career ladders.
    Education loan assistance should also be offered on a much 
larger scale to recruit and retain good employees.
    The recent labor-management agreement on a Flexiplace 
Program will also be a valuable tool for retention.
    AFGE has received a number of troubling reports that new 
hires are being terminated during their probationary period 
because they cannot meet production quotas. This is wasteful 
and counterproductive. It is time for VBA to acknowledge that 
VSRs need several years of quality on-the-job training to begin 
producing cases effectively.
    We strongly agree with the Committee's majority views and 
estimates that VBA needs to significantly enhance its workload 
forecasting ability. VBA has still not done a scientific time 
and motion study. If VBA is to prepare for the steady increase 
of claims that are going to be filed as a result of two wars 
and aging veterans, it must follow the example of other public 
and private benefit programs and adopt a scientific approach to 
assessing future staffing needs.
    Thank you, Mr. Chairman. I will be glad to answer any 
questions.
    [The prepared statement of Mr. Cox follows:]
Prepared Statement of J. David Cox, R.N., National Secretary-Treasurer, 
          American Federation of Government Employees, AFL-CIO
    The American Federation of Government Employees, AFL-CIO (AFGE) 
thanks you for the opportunity to testify today on behalf of the nearly 
160,000 AFGE members working at the Department of Veterans Affairs (VA) 
regarding the Veterans Benefits Administration (VBA) claims processing 
system.
    AFGE is the sole employee representative of Veterans Service 
Representatives (VSRs), Rating Specialists (RVSRs), Decision Review 
Officers (DROs) and other VBA employees. As many of our members who 
work at VBA are veterans, including service-connected veterans, they 
also bring the ``customer'' perspective to the job.
The VBA Backlog: A Barrier to Benefits, Health Care and Employment
    The enormous VBA claims backlog hurts veterans on several levels. 
Processing delays deprive disabled veterans of a means of support, as 
well as access to VA health care (with the exception of new OEF/OIF 
veterans). The backlog delays veterans' ability to get the rating 
required to apply for Federal employment as preference eligibles. 
Veterans recently hired by VBA and taxpayers both lose when new hires 
are terminated during their probationary period because they are 
expected to ``make the numbers'' before receiving adequate on-the-job 
training.
The IBM Study: Flawed Methodology, Overlooked Problems
    AFGE concurs with a number of the broad recommendations of the IBM 
study, such as moving toward a paperless environment, completing the 
phase-in of VETSNET,\1\ improving the VCAA letter and moving to issues-
based performance measurement. In fact, some of these changes are 
already underway.
---------------------------------------------------------------------------
    \1\ VBA has still not addressed the problem of a redundancy in the 
process of inputting information that requires employees to have 
multiple applications open at the same time and enter duplicative 
information because these programs do not ``talk to one another.'' It 
would be more efficient if the system automatically made the updates 
when employees enter new veteran information.
---------------------------------------------------------------------------
    However, it is hard to take seriously a study of the claims process 
that interviewed 583 management employees and zero front-line employees 
who are ``on the floor'' actually doing the work. Every position listed 
in IBM's survey methodology was a management position. Our members 
confirm that IBM only interviewed management during its site visits.
    AFGE appreciates IBM's recommendations for greater labor-management 
communication, better staff morale and more effective use of the TPSS 
training tool.
    However, the study's one-sided database contributed to overly 
optimistic assumptions and findings that understate serious problems 
that are contributing to the backlog, for example:

     Finding: Staffing in the Pre-determination Unit is above 
satisfactory. Comment: VSRs are under intense pressure to meet 
unrealistic production quotas and are encouraged by management to 
develop only some issues in the case.
     Finding: On-the-job training is highly effective. Comment: 
New hires are frequently deprived of critical hands-on training by 
production-quota driven managers who want them to cut short their 
rotations to continue processing cases in their current station.
     Finding: The level of staff experience in the Pre-
Determination team is less than satisfactory. Comment: If front-line 
employees were surveyed, they would report that trainers, supervisors 
and mentors often lack the experience, subject matter expertise and 
training skills to fulfill their roles.
     Finding: VBA's three-tiered monetary award system provides 
incentives for good performance. Comment: The study completely 
overlooks recent disclosures that both the size and number of VBA 
bonuses are heavily skewed toward management.
     Finding: VBA has effectively implemented the 
recommendations of the CPI Task Force. Comments: At the RO level, 
numerous CPI recommendations have been ignored or poorly implemented. 
For example, smaller offices often lack the staff to establish all six 
CPI model teams. Second, RO accountability is still severely lacking: 
Managers continue to manipulate data and hide older cases despite 
revised performance standards, station work performance reports and the 
ASPEN tracking system.
             reducing the backlog through improved training
    One fact that we can all agree on is that the claims backlog is 
soaring and there is no relief in sight. IBM reported that over the 
past 4 years, pending VBA claims increased by 54 percent while the 
number of cases with eight or more disability claims increased by 88 
percent.
    There is no magic bullet for reducing the backlog in the face of 
two wars, an aging veteran population and new benefits and laws. 
Adequately compensating a growing disabled veteran population requires 
a growing workforce that is adequately trained. IT improvements are 
long overdue and will increase the efficiency and quality of the claims 
process. However, these IT tools must be used by a skilled workforce 
that has enough time to process claims fully and accurately.
    In the short term, the challenge is to effectively utilize the 
1,800 new hires that Congress funded in fiscal year 2008 and the 
significant number of new hires expected for the current fiscal year. 
AFGE greatly appreciates the recognition by Chairman Akaka and other 
Committee members in their fiscal year 2009 Majority Views and 
Estimates that an ``intensive training effort'' is required to enable 
additional staff to reduce the backlog. New employee training at the 
Academy is well regarded, but RO-level on-the-job training for new 
hires and mandatory 80-hour annual training programs for ongoing 
employees are severely lacking in quality and consistency.
    GAO's May 2008 findings regarding lack of accountability and the 
lack of evaluation of training particularly at the RO level are 
valuable guides for further action, and closely align with the concerns 
our members report from the field. We also note that, unlike IBM, GAO 
interviewed front-line employees and included their insights and 
concerns in its report. AFGE's only concern with the GAO study is that 
one could misconstrue its finding that there are no consequences for 
individual staff who fail to complete their training. By far, the 
primary reason that employee training is incomplete is constant demands 
by management to stay in production mode, even when it directly 
violates mandatory training requirements. On any given workday, a 
visitor to an RO will see employees using their breaks and lunch hours 
to study, and take home training materials to review after work hours.
    Train the Trainers: The first component of an effective training 
program is good trainers. To ensure that training is of high quality, 
VBA should develop a cadre of effective, competent trainers with 
formalized training skills and adequate subject matter expertise who 
operate independently of RO Directors. The CPI recommendation that each 
RO have its own full-time training coordinator assisted by VBA Central 
Office has not been widely implemented. Rather, RO directors assign 
staff without any particular training skills to be part of the training 
team. The typical trainer is a mid-level or senior VSR who has not had 
formalized instruction on training and is too closely aligned with 
management and its focus on production goals. The result is great 
variation in the quality and thoroughness of training across ROs.
    Use experienced supervisors and mentors: Managers who supervise and 
mentor new employees often lack adequate experience and subject matter 
expertise. They should be required to pass the same skills 
certification tests as front-line employees. AFGE urges the Committee 
to consider the proposal in H.R. 5892, the Veterans Disability Benefits 
Claims Modernization Act of 2008 to require that managers pass 
certification exams also.
    Nationally uniform training curriculum: AFGE is pleased with VBA's 
efforts to develop new training tools and centralized training 
programs, but much more needs to be done to ensure that quality and 
consistent training is provided to every VSR and Rating Specialist. VBA 
training operates much more like national guidance than a national 
training plan, resulting in tremendous variations in quality between 
ROs. There is currently too much discretion at the RO level to 
determine how training is provided and how to ensure that pressured 
managers do not cut training short to keep employees in production 
mode. (IBM survey respondents acknowledged that they find it 
``disruptive'' to rotate new hires to different teams even though it 
greatly benefits employees' professional development.)
    Formalized, Independent Oversight: AFGE urges the Committee to 
increase oversight of VBA training, especially during this critical 
period of workforce expansion so that new hires develop critical skills 
and ongoing employees stay abreast of best practices and new benefit 
rules. Sadly, VBA no longer uses one of the most effective oversight 
tools available: active collaboration with employee representatives. 
For example, in recent years, AFGE has been consistently left out of 
groups addressing training, skills certification and performance 
standards. An independent, stakeholder training advisory committee that 
includes employee representatives and veterans' organizations could 
help VBA develop a national training plan with clearly defined 
curriculum, identify and disseminate best practices from local 
facilities, and regularly assess the quality and thoroughness of 
training programs. The oversight process should also allow require 
regular reports to Congress.
    Strengthen and standardize the 80-hour mandatory training program 
for ongoing employees: There are a number of factors that deprive 
ongoing employees of adequate training. First, RO Directors often count 
subjects that are not ``core subjects'' for example, courses on ethics 
and sexual harassment, toward the 80-hour requirement. Second, ROs have 
too much discretion over whether training is delivered through the 
classroom, TPSS, self-study, etc. Training modules assign credit hours 
but there is no oversight of how well a particular training mode 
worked, or whether employees had the time to fully learn the material.
    Regular staff meetings--a simple yet valuable training tool: 
Managers should also return to the practice widely used during VBA's 
``case management era'' that preceded CPI of setting aside time for 
weekly staff meetings. These enable employees to learn about 
challenging and unique cases, and share best practices. This practice 
is clearly another casualty of the current production-driven 
environment.
    Improve VSR Skills Certification Training: Pursuant to an agreement 
between VBA and AFGE, qualified GS-10 VSRs who pass a skills 
certification test can receive a noncompetitive promotion to a GS-11. 
The test preparation training program has a number of problems. First, 
contrary to assurances from VBA and the terms of our agreement, the 
training is not always sufficiently aligned with the scope of the exam, 
and trainers are often confused about what training materials are 
relevant to the test. Second, there is significant variation in the 
amount of time employees have to train for the test. Finally, although 
the test is ``open book,'' it tests for a tremendously high level of 
expertise. When employees get a wrong answer, they are directed to 
complex user manuals rather than receive additional training to help 
them better understand the training syllabus.
    More generally, VBA no longer solicits input of employees and their 
representatives on matters relating to skills certification testing and 
training. More collaboration will improve the reliability of this test, 
which still suffers from low passage rates (25 percent and 29 percent 
for the first two validity tests and 42 percent for the May 2006 test).
    reducing the backlog through effective staffing and performance 
                                measures
Workload Forecasting
    This Committee has recognized VBA's longstanding tendency to 
underestimate its staffing needs and the lack of tools to make accurate 
forecasts. A scientific workload forecasting study, such as a time-
motion study of the time and skill sets needed to process different 
types of claims at each stage, is long overdue. Production standards 
and staffing should be based on scientific methodology, not politics.
    AFGE is aware of only of one meager attempt by VBA to collect this 
data through use of a software program for a small sample of employees. 
VBA provided no explanation of how they selected the sample or how they 
selected participating ROs. Data was collected by a program appearing 
on the screen every few hours to ask what the employee was doing. The 
program did not differentiate between employees working on a single 
claim and multiple claims. Front-line employees and veterans' groups 
had no input into the study.
       reducing the backlog through improved performance measures
    Pursuant to an agreement between VBA and AFGE, national performance 
standards to boost VSR productivity were put in place in 1997 and 
revised in 2005. For the first time, these standards set a national 
floor and gave ROs the discretion to set them higher.
    Currently, these production standards appear to be based more on 
politics and bonuses rather than the work required to process a C&P 
caseload that consists of more and more complex, multiple issue claims. 
VBA managers, many of whom have not adjudicated a claim for many years 
(or never), define performance solely in terms of inventory and days 
pending completion of a decision.
    The current work credit system has created a tremendously 
stressful, demoralizing, assembly-line work environment that is hurting 
VBA retention of experienced employees and contributing to attrition 
among new hires. Some members report that when they meet RO production 
goals, they are ``rewarded'' by arbitrarily higher goals for the 
following year. As already noted, the current performance measurement 
system also takes a heavy toll on training.
    AFGE urges the Committee to consider the proposal in H.R. 5892 to 
mandate a study of the work credit system that focuses on quality and 
accuracy as well as production. IBM's recommendation to move toward 
issue-based performance measures is a small step in the right 
direction; VBA's current practice of assigning more credit for work on 
cases of eight or more claims should be further refined.
 reducing the backlog through more effective recruitment and retention
    As VBA skills are learned entirely on the job, new employees are 
only able to begin processing cases effectively after roughly 2 years 
on the job. In these challenging times, VBA cannot afford to lose the 
unique skills and experience of its senior claims processing staff. 
AFGE has several recommendations in this regard.
    First, as already discussed, production quality and workplace 
morale will be greatly enhanced if management returns to the 
collaborative environment of past years, where employee insights were 
valued and encouraged on key aspects of VBA operations, including 
training, certification, IT and CPI.
    Next, VBA can take several steps to make the VSR career ladder more 
competitive. VBA regularly loses VSRs to Social Security and other 
agencies with higher promotion tracks. Despite the extremely complex 
medical and legal analysis required by this job, VSRs can only rise to 
a GS-10 unless they pass the Skills Certification test. VBA started a 
VSR reclassification study some years ago but dropped it without 
explanation.
    VBA should take lessons from the Veterans Health Administration and 
offer more educational loan assistance to recruit and retain its 
employees. Our members report that VBA promises these benefits to 
recruit new college graduates who are later told there is no money to 
back up that promise. Greater funding and oversight of VBA's use of 
this benefit is needed.
    Another retention tool that was suggested by the CPI Task Force was 
to offer experienced VSRs a ``super senior'' position that offers a 
promotion to a GS-12. This tool has been woefully underutilized.
                               conclusion
    We look forward to working with Chairman Akaka, Ranking Member 
Burr, and Members of the Committee to identifying approaches to 
reducing the backlog and improving the claims process and ensuring that 
VBA considers regular input from employees and their representatives 
and the veterans' community. Thank you.

    Chairman Akaka. Thank you very much, Mr. Cox.
    Mr. Pierce.

   STATEMENT OF HOWARD PIERCE, CHIEF EXECUTIVE OFFICER, PKC 
                          CORPORATION

    Mr. Pierce. Mr. Chairman, I think I will submit my written 
testimony so as to save some time, give you a quick overview of 
why I am here, and show you something.
    Chairman Akaka. Thank you.
    Mr. Pierce. I am the CEO for PKC and for 20 years we have 
been building what we call ``decision support systems.'' In the 
parlance that is being used here, that would be a business 
rules engine.
    What we do is, we take and analyze the different sections 
rules that have to be applied to make decisions. We try to de-
construct them and put them into to some algorithms and then we 
construct a set of questions typically that the user would go 
through or often multiple users would have different parts of 
the information set. They would be prompted to be sure, by the 
software, that the right data gets put in, then the rules set 
runs, and recommendations and guidance as to how to proceed are 
given.
    We work principally in the medical world for clinical 
decision reports. But, the last 10 years we have worked closely 
with the Department of Defense, building tools for them that 
are used when a servicemember joins the military--to get a base 
line on them, and then to capture different moments in time 
during their career, as DOD starts to build their electronic 
medical record, ALTA. Our system is embedded in ALTA.
    About 7 years ago a representative from the VBA came to our 
company and asked whether our system could be useful in helping 
out with some of the problems that are being discussed here 
today. We said, well, we would be happy to take a look. That is 
what we do. Why do you not send us your rules? And a Federal 
Express truck showed up sometime later with a book so big that 
it had handles on it in order to be able to carry it. That was 
the schedule at the time.
    Our folks, after our initial shock, took a look at those 
rules and said to me, we need to go out and talk to the people 
that apply these rules. We have got to talk to the raters so we 
understand what kind of workarounds, what kind of special 
protocols and best practices they have developed.
    Our folks went out and talked to a few of those and then it 
was agreed with the VBA that we would create a demonstration, a 
little tiny demonstration, a piece of software that would test 
out whether it was possible to do this in their world. And that 
is what I am going to show you here in a minute.
    I will emphasize that, in order to do that demonstration in 
a reasonable period of time, we had to take a tiny segment of 
what raters have to deal with, and have to have in their head, 
and have to be able to know how to access in this rule set.
    We asked the VBA what section they would like, hoping that 
they would pick something nice and simple like orthopedics or 
that kind of thing. And, of course, they picked PTSD, which 
is--both from a clinical point of view as well as a rating 
point of view--one of the greatest challenges.
    So, I am going to quickly show you what we built for them 7 
years ago. This is a very crude representation of what we do 
now, but I, hopefully, will make the point that a lot of the 
paperless discussion that is going on has merit. Other 
industries have taken this stuff down this way, but I want to 
emphasize that what a rater is asked to do on a day-to-day 
basis is extraordinarily complicated.
    We live in a world of complexity in my company. We work 
with a very challenging science. We have never seen anything 
more complex, actually, because it has both legal, 
psychosocial, clinical, and more importantly, administrative 
law that has to be woven together. It is doable; but it is very 
very complicated. So, I am going to show you just a tiny little 
bit of that now, if that is OK. Hopefully all the systems work 
here.
    I am going to show to two cases quickly. We were asked, 
again, to do a work-up on PTSD. So, we set up our system; as I 
said, we asked a bunch of questions to make sure we get the 
data into the system. So, the type of questions that are asked 
here are very fundamental to start with and in a future world, 
DOD can feed this data cross-electronically because the same 
system is used to capture this data in their world.
    The rater, or whomever is using this system, and I will 
emphasize in response to, I think, a comment that Senator 
Murray made--this system is designed to be used collaboratively 
by different people, the rater or the vet themselves could 
start this very easily. The VSO could help them with it. The 
rater can then put information in. The system could even be 
projected out to a doctor who has to make medical 
determinations to get a diagnosis in, and that is what I am 
going to show you here.
    So, you just click on the things that are true about the 
person, filling in the various different boxes, et cetera. This 
is all very boring stuff, but these are data points that were 
needed to be captured by dint of the rules as they existed 7 
years ago. And when you are done with getting in the basics, 
you start figuring out what it is that you are trying to rate 
here.
    There are 13 body systems that are covered in that 
schedule. The one we are talking about here is down in mental 
disorders; and within the mental disorders world, we are 
talking about an anxiety disorder and in that we are talking 
about PTSD. That gives you some sense of what a tiny little 
slice you are looking at here and how complex the system is.
    I am not going to spend a lot of time on the data capture 
side of it because it is pretty boring. But it is important to 
note that because there are so many points that have to be 
captured, having a system that can intelligently prompt the 
users: what do you mean here; what do you have to get there; 
what are you missing there; how do you get this stuff in; where 
do you go look for it. It is very very useful.
    This system walks through what is the stressor evidence you 
have right now: what medical evidence do we have for diagnosis 
so far; what evidence do we have for a nexus; and what relevant 
dates we have.
    When you are done running through the thing--and that would 
take a little bit of time for me to show you, so I am not going 
to bother--you have got a set of data now being represented to 
you as text on the screen. But, this is coded data that can go 
into a database so that you can not only understand this 
servicemember, but you can also do population studies and learn 
a lot more about what is causing you your problems and your 
bottlenecks.
    So far, this is meant to represent the initial work-up, the 
guy who just started the claim. We know this is a 42-year-old 
male who is having employment problems. He is an Army veteran. 
He has got a combat infantryman's badge. He has got an original 
claim for PTSD, but all the stressor evidence is pending 
verification. So far, we have got a little testimony from his 
wife and his personal diaries. We know currently that the exam 
has been done--such as it is for PTSD--does not conform either 
to the DSM-IV, which is the way the psychiatric world 
categorizes things, nor is it sufficient for the VBA; and we do 
not have a diagnosis yet. We have a sort of hodgepodge of 
evidence that has been stuck in here because of details that 
the servicemember suggested right away.
    So, the next thing our system does--after capturing the 
data in an organized fashion so that you know what you have got 
and what you do not have--is it pushes that against that rule 
set that we are talking about and puts out some guidance for 
the rater at this point.
    And all it tells him right now is (a) we need more 
information. You have got to go out and make sure somebody does 
a decent exam here because what you have right now is not 
sufficient for a diagnosis. And here is the section out of the 
schedule that is the relevant rule that dictates that. This is 
the law that has been passed that says you have to do that. And 
if you want to go directly to see the actual law itself, you 
click here and then right there. I am not attached to the 
internet right, but that would take you right into the 
schedule, right to the page where it has the relevant legal and 
medical details as to what has to be done at this point.
    So, all we are saying at this point is, we are prompting 
the rater in a way that will hopefully be efficient. What do 
you have to do next? We also know that we have not got service 
connection right now. If this case were closed or adjudicated 
right now, you would have to deny. Why? Because you haven't got 
a diagnosis of PTSD. And here again, if you are constructing a 
letter to send out about what to do or sending an e-mail, here 
is all the text that you need to do that.
    So that is all there is so far at that point.
    Now, let us jump in time a little bit and assume that this 
rater has now collected a lot of that information. Let us 
assume, potentially, that he has either sent out a 
questionnaire or actually we could e-mail this right to the 
doctor so they can fill out their part and send it back for 
diagnosis. Let us hypothesize that that has been done. That is 
what I have just pulled up here as a new case, or an extension 
of the original case.
    So, now we know a whole bunch about the stressor. We know 
that this guy actually had an IED explode under his Humvee. 
There was one killed, two wounded--a pretty clear stressor 
there.
    We know that we have got a lot of verification of that both 
from further testimony of the wife as well as testimony from an 
Army buddy. We have got his personal diary. We have got his 
records from ALTA--because those records are increasingly 
digitized. They are sendable and they were actually produced 
oftentimes by our software.
    So, now we have also got a current diagnosis of PTSD 
because we have had a legitimate provider, a medical provider. 
To your point, it could have been all kinds of providers that 
have the ability to do this exam, because the exam is all 
stated right in here. All the points have to be captured. We 
have got a complete diagnosis of PTSD.
    So, now the guidance extends to (a) you have got your 
diagnosis. If you want to see the legitimacy of it, there are 
the 15 DSM criteria that have been met. There are the ones that 
have not been set positive, but here are the rules of how you 
calculate PTSD. We were told when we built this to not do the 
calculation. They said, we want the rater to have further 
ability to sort of make a judgment themselves.
    Obviously, our software could have done the rule 
calculation for the DSM diagnosis all the way.
    Furthermore, what are we going to do about this? So, here 
are the options that are offered by the rules to the rater at 
that point.
    The first thing is, the law says you must review, in a 
mental disability case, you must review these particular 
findings before you make your final adjudication. That is 
written in the law and has nothing to do with medicine. It has 
to do with the way you want these raters to be sure they are 
serving the best needs of our veterans. So, it is just prompted 
for them right there.
    Then the rater is offered the five different approaches he 
could take to this rating. You can go anywhere from total 
disability, 10 percent, 30, 50 or 70. Within each of these, you 
have the criteria that would suggest why that is. The rater 
then makes their decision.
    In this particular case, he has flagged the fact that he 
has made a total disability decision and flagged the fact that 
he has, in fact, reviewed this mental disorder stuff and so 
that then goes into a database and the process proceeds.
    So, hopefully, in a short period of time, I have just given 
you a taste of the fact that systems are out there like this 
that can be used. It is a horrendous job the raters have. They 
do a noble job of trying to do it. They are being asked to do 
what is physically impossible--in our estimation--in a quality-
assured way, and tools need to be produced and they need to be 
at the heart of this bigger process of all of the bureaucracy 
that has to be tailored to work better. This kind of thing 
needs to be at the heart of it.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Pierce follows:]
     Prepared Statement of Howard Pierce, Chief Executive Officer, 
                            PKC Corporation
    Chairman Akaka, and Members of the Committee, I would like to thank 
you for inviting me to testify today on the important subject of ways 
to improve the VA's disability ratings process.
    My name is Howard Pierce and I am the Chief Executive Officer of a 
software company called PKC.
    PKC has worked exclusively in the field of medical decision support 
for almost twenty years. We have optimized our tools to illuminate and 
support the inherently grey and multi-faceted decisions required for 
clinical problem solving. Our 70 employees work in a remodeled woolen 
mill by the banks of the Winooski River in Burlington, Vermont. Day in 
and day out, for the last 20 years, they read medical literature and 
figure out how to separate medical facts from opinion and then how to 
construct sophisticated questionnaires to expose those facts. Our 
system is a proven technology, which has been licensed by the 
Department of Defense for almost a decade. In fact, our tools produce 
some of the baseline and deployment-related data on servicemembers that 
is eventually used by VBA raters. When approached by the VBA some time 
ago, we delivered a proof-of-concept implementation of the Post 
Traumatic Stress Disorder benefits rating rule set. This particular 
problem (PTSD) was selected by the VBA for its complexity, cost, and 
difficulty to rate, and I will show it to you briefly today.
    The issues that confront the Veteran's Benefits Administration are 
complex and difficult, as recent studies and commissions have reported. 
Reengineering the claims process cuts across clinical, legal, 
bureaucratic, political, and social domains. Furthermore, refitting the 
VBA ship must be accomplished as the ship is sailing full speed during 
a time of war, when the needs of many new veterans are at their 
greatest.
    Nevertheless, my company believes that there is a core component 
within the larger set of issues facing the VBA which must be reinvented 
regardless of whatever form the broader disability rating process 
reorganization takes.
    The VA Schedule of Rating Disability is the core rule set that 
governs all of the decisions that are rendered by raters to our 
Nation's veterans. It is a massive tome that represents 60 years of 
evolved public policy combining medicine, law, and regulation. It is 
the essence of what the VBA is expected to provide, on a consistent 
basis, to any of our veterans who claim disability. The Schedule 
provides the rater with the means to determine 1) if a medical problem 
is ratable 2) if the problem was incurred during or as a result of 
military service, and 3) to what degree the problem should be 
compensable by the government.
    Yet as we approach the end of the first decade of the 21st century, 
the only way to access the rules in the Schedule is by doing it the 
same way one would have in the 16th century; by reading the rules in a 
book. But this is no ordinary book. It is a massive conglomeration of 
rules that is thousands of pages long, so big that it has handles on 
it, covering the 13 body systems of the most complex machine ever, the 
human body, along with 60 years of evolved policy of how to proceed 
when that body is damaged in the service of the Nation.
    Like the practice of medicine itself, the Schedule is so 
complicated that no human being can be expected to accurately negotiate 
its byzantine, sometimes conflicted, and ever changing rules in a 
timely and consistent manner.
    Instead, the VBA should focus on automating the Schedule so that 
the raters can make sure that every veteran gets the same 
comprehensive, standardized problem workups and evidence review 
processes. When a veteran applies for compensation, a second year rater 
from the Baltimore regional office should be able to do as well as 
rater with 25 years' experience from the Portland office.
    Properly designed computer software can provide that standardized 
consistency, while still retaining the flexibility so that raters can 
make the final decisions.
    An automated VA Schedule would incorporate the following 
characteristics:

     It would be released from its current text-based format
     It would be inspected carefully for currency, accuracy, 
and conflicts
     It would incorporate the critical ``best practices'' that 
have been evolved by the VBA's most talented raters
     It would be restated as concepts, references, rules, and 
guidance options in a world-class decision support system
     It would be updated regularly to ensure changes in the 
rules are quickly and efficiently implemented

    In addition, this new decision support system must assure the 
following process improvements:

     The individual veteran case-profiles it produces must be 
in a computable form and granular enough so the VBA can continuously 
study its database of cases looking for new lessons, anomalies, and 
evolving veteran disability profiles. This will allow both faster 
reaction to new and emerging realities and needs, as well as improved 
population level reporting to Congress and other stakeholders.
     The system must be far easier to learn and use than the 
current approach. It must assure faster training of raters, better 
quality assurance and less variation, and improved retention of 
experienced raters as the result of better job satisfaction.
     The system must be fundamentally designed to evolve and 
improve, with little or no impact on the daily workflow of the Raters.
     The system must be configured in such a way that the 
veterans themselves (and their representatives) can be safely utilized 
to input required historical data, thereby lightening the load on the 
rater.
     Every aspect of the decision logic must be available, 
auditable, and transparent to all parties and at any point in the 
process. This transparency aspect has the greatest potential to save 
money and assure fewer non-viable cases and legal appeals.

    PKC's demonstration product was well received by every VBA official 
that reviewed it. However various larger information technology issues 
intervened and the prospect of building a fully automated version of 
the VA Schedule never became a reality. It appears that the VBA is 
again interested in companies like PKC who have the unique ability to 
manage this sort of non-black and white decision support challenge. Our 
concern however is that once again the larger process of selecting and 
managing a systems integrator will further delay the fundamental work 
effort necessary to begin to get to the hard job of automating the VA 
Schedule.
    The task ahead is not easy, but it is imminently achievable. We at 
PKC would assert that the core effort of analyzing the VBA's disability 
rating business rules and their re-implementation within a state-of-
the-art decision support system should begin immediately as this will 
be the rate limiting step in improving the claims process to better 
serve our veterans and the taxpayers.

    Mr. Chairman. Thank you very much, Mr. Pierce.
    Mr. Rollins.

    STATEMENT OF WILLIAM ``BO'' ROLLINS, DIRECTOR OF FIELD 
            SERVICES, PARALYZED VETERANS OF AMERICA

    Mr. Rollins. Chairman Akaka, Ranking Member Burr, and 
Members of the Committee, on behalf of Paralyzed Veterans of 
America, I would like to thank you for the opportunity to 
testify today on improvements that can be made to the 
Department of Veterans' Affairs claims process.
    PVA appreciates the effort being given to updating and 
modernizing the VA disability system and we recognize the hard 
work that VA is doing every day to try to make the system 
better.
    We generally agree that the claims process takes far too 
long for many veterans, but we do not believe simple quick 
fixes are the solution to overcoming this problem. As such, we 
would like to make some recommendations that we believe can 
improve the entire process.
    We will also briefly address the recommendations of the IBM 
Claims Processing Improvement Study referenced in the 
invitation for this hearing and we appreciate you listening to 
our views.
    PVA believes that two basic benchmarks must be established 
when assessing changes to the disability claims system. First 
and foremost, no current benefit or service for today's 
veterans should be diminished, including the reduction of 
resources for those benefits or services in the interest of 
change.
    Second, and no less important, there should be no 
distinction made between combat and non-combat related 
disabilities or where the disabling event occurred. PVA views 
all veterans in the same light and we believe that the current 
system reflects appropriate priorities.
    PVA, along with the co-authors of The Independent Budget, 
continue to advocate for adequate funding for general operating 
expenses and, as noted, we are particularly pleased that 
Congress has, in fact, increased funding for VBA to increase 
their staffing.
    We have long argued that the only way to give VA a fighting 
chance to overcome a rapidly growing backlog is to provide for 
adequate staffing. But it is important to note that simply 
hiring additional staff is not enough, as we have heard earlier 
today.
    Equally important is to ensure proper training and 
accountability of claims adjudication staff at all levels of 
the process. While it is easy to blame first front-line claims 
staff for improper ratings decisions, much of the blame also 
has to fall with the management within VBA.
    Performance measures for all levels of adjudication staff 
have wrongly focused too much on quantity of claims decided 
rather than quality.
    PVA is also concerned that VBA is not really spending the 
new funding that Congress has provided in the last couple of 
years in the manner that Congress intended and that the 
Veterans' Service Organizations desire.
    Specifically, we believe that VA is spending too much of 
this new funding on pilot projects and special programs than on 
basic hiring and systemic needs.
    Recent hearings have demonstrated how far behind the VBA is 
in using IT technology in the claims process; and while we 
believe the entire claims process cannot be automated, there 
are many aspects and steps that certainly can.
    We have long complained to the VA that it makes no sense 
for severely disabled veterans to separately apply for the many 
ancillary benefits to which they are entitled. Their service-
connected rating immediately establishes eligibility for such 
benefits as: the specially adapted housing grant; automobile 
adaptive equipment; and education benefits. However, they still 
have to file a separate application form to receive these 
benefits. There has to be a separate decision made to establish 
their entitlement to what they are entitled by law.
    Furthermore, certain specific disabilities require an 
automatic rating under the Disability Ratings Schedule. For 
example, it does not take a great deal of time and effort to 
adjudicate a below knee single-leg amputation. An advanced 
information technology system can determine a benefit award for 
just such an injury quickly. We believe that it is time for the 
VA to automate consideration of ancillary benefits and specific 
ratings disabilities that are generally automatic.
    With this thought in mind, we also believe that it is 
essential that VBA expeditiously adjudicate claims that can be 
adjudicated quickly. By tying into an advanced IT system, VA 
could identify and decide claims that can be granted quickly. 
We have observed through our national service officers in the 
field that oftentimes VA continues to develop evidence in cases 
where the evidence already developed supports the grant of the 
benefit.
    We also believe that VA should use experienced adjudicators 
to decide initial claims and to prepare VCAA notice letters 
rather than using its most inexperienced staff for the initial 
review. VA should employ more experienced adjudication 
personnel to review claims to determine what information or 
evidence they need to support their claim.
    After identifying it, they need to prepare the letter and 
send it to the veteran. They should, and as they do, require 
and expect the VSOs to help them in that effort, and I expect 
my service officers to develop every client.
    We also believe that VA should not be reluctant to issue 
regulations overruling court opinions that have required the VA 
to provide unnecessary information in VCAA notice letters. VA 
often complains that much of the delays that it experiences in 
developing and adjudicating cases result from court opinions 
interpreting the letter. Congress should consider amending the 
law to direct VA to fill in the contours of an adequate VCAA 
notice letter.
    Also in the interest of time, I can echo the comments Mr. 
Baker from DAV made regarding the view of private physician 
evidence and private medical opinions.
    Having said that, I am running out of time. I thank you 
very much and I am available for questions.
    [The prepared statement of Mr. Rollins follows:]
    Prepared Statement of William ``Bo'' Rollins, Director of Field 
                Services, Paralyzed Veterans of America
    Chairman Akaka, Ranking Member Burr, and Members of the Committee, 
On behalf of Paralyzed Veterans of America (PVA) I would like to thank 
you for the opportunity to testify today on improvements that can be 
made to the Department of Veterans Affairs (VA) claims process. PVA 
appreciates the effort being given to updating and modernizing the VA 
disability system. In fact, we have been very involved with a number of 
the Commissions that have been charged over the last couple of years--
particularly the Veterans' Disability Benefits Commission and the Dole-
Shalala Commission--with developing real solutions to the problems 
facing the Veterans Benefits Administration. We recognize that the 
claims processing system is in need of change. However, we believe that 
the current system is a fundamentally good system.
    While we generally agree that the claims process takes far too long 
for many veterans, we do not believe simple quick fixes are the 
solution to overcoming this problem. As such, we would like to make 
some recommendations that we believe can improve the entire claims 
process. We will also briefly address the recommendations of the IBM 
Claims Processing Improvement Study referenced in the invitation for 
this hearing. We certainly appreciate the Committee soliciting our 
views on how to improve a system that so many veterans rely on.
    PVA believes that two basic benchmarks must be established when 
assessing changes to the disability claims system. First and foremost, 
no current benefit or service for today's veterans should be 
diminished, including the reduction of resources for those benefits or 
services, in the interest of change. Second, and no less important, 
there should be no distinction made between combat and non-combat 
related disabilities or where the disabling event occurred. PVA views 
all veterans in the same light and we believe that the current system 
reflects appropriate priorities.
    As Congress and the VA consider implementing changes to the claims 
process to decrease delays, it is essential that they acknowledge that 
a certain amount of delay is inherent in the VA adjudication system. 
The Veterans Benefits Administration (VBA) administers a massive 
program that handles nearly a million new claims each year. Moreover, 
these claims are often very complicated, requiring difficult decisions 
based on detailed evaluations of medical, legal, and vocational issues. 
Furthermore, the VBA is a complex organization involving multiple steps 
at the VA regional offices and at the Board of Veterans' Appeals 
(Board). And this does not take into account the Court level above the 
Board. With these thoughts in mind, this should not be interpreted as 
an excuse for unnecessary delays nor does it mean that real, meaningful 
improvements cannot be made. In the end, it is important to remember 
that the claims system is charged with meeting the financial, medical, 
and vocational needs of the men and women who have served this country 
honorably, often at great physical and emotional expense.
    Paralyzed Veterans of America, along with the co-authors of The 
Independent Budget, continue to advocate for adequate funding for 
General Operating Expenses (GOE) in the VA budget, specifically for the 
VBA. We are particularly pleased with the fact that Congress has 
appropriated significant increases in funding for VBA over the last 
couple of years. Likewise, we appreciate the emphasis placed on hiring 
many new claims adjudication personnel. We have long argued that the 
only way to give the VA a fighting chance at overcoming the rapidly 
growing claims backlog is to provide for adequate staffing.
    However, it is important to note that simply hiring additional 
staff is not enough. Equally important is to ensure proper training and 
accountability of claims adjudication staff at all levels of the 
process. While it is easy to blame first-line claims staff for improper 
ratings decisions, much of the blame also has to fall to the management 
within VBA. Performance measures for all levels of adjudication staff 
have wrongly focused too much on quantity of claims decided rather than 
quality.
    PVA is also concerned that VBA is not really spending the new 
funding Congress has provided in the last couple of years in the manner 
that Congress intended and the veterans service organizations (VSO) 
desired. Specifically, we believe that VA is spending too much of this 
new funding on pilot projects and special programs rather than on basic 
hiring and systemic needs.
    We believe that VBA must accelerate the progress toward an 
electronic claims record system. As long as VA continues to use a paper 
file shipped around the country, the claims and appeals process will be 
done in an expensive and antiquated manner. Under the current system, 
VA staff need the actual claims file to act on claims. In a paperless 
environment VA staff could act on claims without having to access a 
claimant's actual claims file. Additionally, transition to a paperless 
system will permit claims work to be seamlessly transferred to any of 
VA's regional offices, allowing for quicker decisionmaking on claims. 
As demonstrated by the Veterans Health Administration's outstanding 
electronic medical record system, similar gains in access to records 
can be realized in the claims and appeals process, as well as 
significant cost savings as VBA and the BVA move toward a ``Virtual 
VA.'' We urge Congress to accelerate funding of VA's transition to an 
electronic claims record.
    Recent hearings have demonstrated how far behind the VBA is in 
using information technology in its claims adjudication process. While 
we believe that the entire claims process cannot be automated, there 
are many aspects and steps that certainly can. We have long complained 
to the VA that it makes no sense for severely disabled veterans to 
separately apply for the many ancillary benefits to which they are 
entitled. Their service-connected rating immediately establishes 
eligibility for such benefits as the Specially Adapted Housing grant, 
adaptive automobile equipment, and education benefits. However, they 
still must file separate application forms to receive these benefits. 
That makes no sense whatsoever.
    Furthermore, certain specific disabilities require an automatic 
rating under the disability ratings schedule. For example, it does not 
take a great deal of time and effort to adjudicate a below knee single-
leg amputation. An advanced information technology system can determine 
a benefit award for just such an injury quickly. We believe that it is 
time for the VA to automate consideration of ancillary benefits and 
specific ratings disabilities that are generally automatic.
    With this thought in mind, we believe that it is essential that VBA 
expeditiously adjudicate claims that can be adjudicated quickly. By 
tying into an advanced information technology system, the VA could 
identify and decide claims that can be granted quickly. We have 
observed through our national service officers in the field that 
oftentimes the VA continues to develop evidence in cases where the 
evidence already developed supports the grant of claimed benefits.
    PVA also believes that centralized training better prepares ratings 
specialists at all levels. Training of rating specialists was 
historically conducted at the local level by the more senior staff. The 
VA now provides centralized training at its Veterans Benefits Academy 
located in Baltimore, Maryland and via the VA intranet. The 
Compensation and Pension Service also issues Decision Assessment 
Documents (DAD) in response to Court precedent opinions to inform staff 
of these decisions. The VA should be lauded for these actions. 
Furthermore, as we have called for in The Independent Budget, co-
authored by PVA, AMVETS, Disabled American Veterans, and the Veterans 
of Foreign Wars, Congress should fully fund VA's training initiatives. 
Improved and continued centralized training should help reduce 
inconsistencies and disparities between Regional Offices and should 
improve consumer confidence.
    Meanwhile, we believe the VBA should use experienced adjudicators 
to decide initial claims and to prepare Veterans Claims Assistance Act 
(VCAA) notice letters. Rather that using its most inexperienced 
adjudication staff to perform initial review of claims, VA should 
employ more experienced adjudication personnel to review claims to 
determine what information or evidence each claimant should submit to 
VA in order to support their claims. After identifying the evidence or 
information that is needed to substantiate each claim these more 
experienced VA adjudication personnel should then have the 
responsibility to prepare and send VCAA notice letters to each claimant 
advising each claimant of the evidence or information they need to 
submit to VA in order to substantiate their claims.
    It also is important to realize that decisions made on appeal 
require greater expertise and often involve more complex questions of 
medicine and law. As such, it takes years to train a competent ratings 
specialist. Trainees and other adjudications staff with little claims 
rating experience should simply not be conducting appellate review due 
to the complexity of these decisions. Increases in staffing today 
should be seen as an investment in the future. Unfortunately, in the 
end, staffing issues do not have a quick fix.
    With regards to the VCAA notice letters, we believe that there is 
much room for improvement in their quality and readability. The only 
individuals impacted by what we deem to be substandard VCAA notice 
letters are veterans. Current VCAA notice letters issued by the VA tend 
to be long and contain complicated legal language that most average 
veterans cannot comprehend. By simplifying VCAA notice letters, 
claimants will have less confusion and will have a better understanding 
of the information and evidence that the VA needs to grant their 
claims.
    We also believe that VA should not be reluctant to issue 
regulations overruling court opinions that have required the VA to 
provide unnecessary information in VCAA notice letters. VA often 
complains that much of the delays that it experiences in developing and 
adjudicating cases result from Court opinions ``interpreting'' the 
nature and content of an adequate VCAA notice letter. Congress should 
consider amending the law to direct VA to fill in the contours of an 
adequate VCAA notice letter by regulation.
    The VA and veterans' service organizations can also explore 
opportunities to share resources for training. For example, PVA has 
prepared a Guide for Special Monthly Compensation (SMC) that has been 
adopted by the VA for use when training ratings specialists. This 
information has been included on the VA's intranet. The PVA Guide has 
also been distributed via BVA Special Monthly Compensation training. 
PVA staff also interacts with other veterans' service organizations at 
their training events. Moreover, Congress should require the VA to 
provide greater access for veterans' service organizations to VA's 
training modules.
    We would also like to make a couple of minor recommendations that 
could prove particularly beneficial to veterans filing claims. First, 
we believe VA should establish phone banks that allow veterans/
claimants to get their questions answered. The VA should establish 
these phone banks in each regional office around the country. The phone 
banks should then be staffed by experienced claims adjudicators who 
would be responsible for calling claimants concerning their claims and 
offering advice or suggestions to veterans on the evidence or 
information that they need to submit in order to substantiate the 
claim. We believe this could go a long way toward improving the 
customer relations problem that the Veterans Benefits Administration 
clearly has when it comes to dealing with veterans filing claims.
    The VA should also establish a secure internet web portal where 
claimants can go to get answers to their questions on their claims. By 
establishing such a portal, if and when the VA transitions to a 
paperless claims processing system, claimants will have greater access 
to information. Moreover, it could provide veterans with some degree of 
transparency as to what the status of their claims is in the process.
    We remain concerned that VA does not readily accept medical 
statements and medical opinions prepared by private physicians. 
Congress should enact legislation that requires VA to accept a medical 
report or a medical opinion provided by a private physician unless VA 
is able to articulate sound reasons for declining to accept the private 
medical opinion. Experience seems to suggest that VA adjudicators are 
disinclined to accept private physician statements or medical opinions 
simply because the statements or medical opinions are prepared by 
private physicians and not VA doctors. These actions occur regardless 
of whether the private physicians' findings are sound. By refusing to 
credit private medical statements or medical opinions, VA unnecessarily 
delays adjudication in many claims.
    The veterans' service organizations play an active role in 
assisting veterans through their national service officer programs. As 
such, in recognition of the professionalism and expertise of the 
service officers who already work very close with VA staff, we believe 
certain opportunities to assist veterans filing claims should be 
expanded. First, Congress should authorize accredited veterans' service 
organization representatives to file any type of claim for the veteran 
without obtaining the veteran's signature. This will allow veterans to 
access benefits that they may not know are available in an expeditious 
manner. The VA should also authorize accredited service officers access 
to VA computer systems to input important data such as updates to 
personal information. This would relieve VA staff of some of the 
minutia that accompanies their own job responsibilities. It will also 
ensure that otherwise critical information impacting the claim filed by 
a veteran is updated in a timely manner.
    We believe that allowing veterans' service organizations to assist 
injured servicemembers who are still on active duty and who are going 
through the medical evaluation board process would be a beneficial 
change. These men and women will ultimately turn to the VA for health 
care and benefits, and veterans' service organizations are one of the 
best resources in the transition process. Congress should consider 
changing the statute to allow for a Power-of-Attorney (POA) to be valid 
before both the Department of Defense and the VA. Moreover, we believe 
veterans' service organization national service officers should be 
granted access to active duty servicemembers preparing for discharge up 
to 6 months prior to the discharge. This could certainly expedite the 
transition process as well as the time it takes for the soon-to-be 
veteran to receive a ratings decision for a disability claim.
    PVA staff also reviewed the recommendations included in the IBM 
Claims Processing Improvement Study. We generally support all of the 
recommendations included in the report. However, there is one 
recommendation that we do not support in the report. Specifically, the 
IBM report suggests that evidence to support a claim should be filed 
within 30 days rather than the current 60 days. PVA has provided 
written comments in response to proposed VA regulations to establish 
strict time limits on the time to file evidence. PVA wholeheartedly 
opposes this suggestion. Claimants are not always in a position to 
obtain and file evidence quickly, whether as a result of health 
conditions or other circumstances. Moreover, the recommendation of the 
IBM report and the proposal by the VA seems to ignore the fact that 
many of the problems with obtaining evidence in a timely manner are not 
the fault of the veteran at all. We have often waited months simply 
trying to get a medical opinion from a doctor to include as evidence 
for a claim. To require a veteran to submit evidence within 30 days is 
simply unrealistic.
    We would also like to recommend that VA consider contracting with 
IBM to study the Board of Veterans' Appeals (Board). Given the 
comprehensive scope of recommendations included in the Claims 
Processing Improvement Study, similar recommendations could certainly 
benefit the Board. Moreover, we believe that it may be time for 
Congress to consider decentralizing the operations of the Board of 
Veterans' Appeals. While we understand why the Board was originally 
centralized in the Washington, DC area, the benefits of that type of 
control seem to have passed. The centralized Board has now become a 
huge bottleneck in the current VA adjudication system causing a rapidly 
growing case backlog of its own and intolerable delays in 
administrative appeals. Currently, it takes the Board more than 900 
days to decide an administrative appeal. A decentralized Board would 
likely achieve efficiencies and improve customer satisfaction. At the 
same time, we realize that decentralization would require the veterans' 
service organizations to change the way we provide service at this 
level. But we believe that this is a change worth making.
    We also believe Congress should require that members of the Board 
be Office of Personnel Management (OPM) qualified Administrative Law 
Judges (ALJ). As ALJs, we believe Board members would be better 
qualified decisionmakers and have the independence currently lacking in 
how Board members are selected and managed.
    PVA would like to make a simple recommendation as it relates to the 
Court of Appeals for Veterans Claims (Veterans Court). It is a known 
fact that the Veterans Court is dealing with a heavy caseload. As such, 
we would recommend that Congress consider increasing the number of 
Veterans Court judges. Earlier this year, PVA testified in support of 
legislation--S. 2091--before this Committee that would address this 
need. We certainly believe that adding two new judges to the Veterans 
Court could improve its speed and efficiency. However, if two new 
judges are added to the Court, it is important to ensure that the terms 
of the first two are appropriately staggered. We believe that one judge 
should serve for no more than five or 7 years and the other judge 
should serve 10 to 12 years. This will ensure that the first two new 
judges and all subsequent judges will not leave the Court at the same 
time.
    We would also recommend that Congress take more care to encourage 
the nomination of judges who have some prior experience in Veterans 
Law. Similarly, Congress could also ensure that the Veterans Court 
maintain an experienced and skilled central legal staff that would be 
in a position to assist newly appointed judges. With skilled legal 
staff and experienced Veterans Law judges, the transition to a nine-
member (or expanded) Veterans Court would be eased.
    PVA appreciates the efforts of this Committee to address the 
difficulties facing the Veterans Benefits Administration as it works to 
overcome the growing claims backlog. While we understand the desire to 
improve specific benefits for veterans, it is imperative that the 
systemic problems with the claims process are addressed. We look 
forward to working with the Committee to develop meaningful reforms to 
the claims processing system that do not diminish the benefits provided 
to the men and women who have served and continue to serve this Nation 
honorably.

    Thank you again for the opportunity to testify. I would be happy to 
answer any questions that you might have.

    Chairman Akaka. Thank you very much, Mr. Rollins.
    Mr. Pierce, I appreciate your testimony concerning the 
difficulties confronting VA employees who use the VA schedule 
for rating disabilities.
    Given its current complexity, my question is, how difficult 
and time intensive would it be to automate the schedule; and 
how would you recommend that this process or the system be 
undertaken by VA?
    Mr. Pierce. Mr. Chairman, I think that there is a general 
question out there as to, do you try to automate the system as 
it exists right now or do you try to review it before you 
automate it.
    I would suggest in order to even understand how you would 
want to modify the system and make it more efficient and less 
contradictory, first you have to take it apart and automate it 
once.
    Seven years ago we did something of an analysis as to how 
long it might take us, our particular company, to take the job 
down. We estimated that overall it would take about 3 years, 
and we could do it in components so that the really difficult 
and urgent ones--particularly the psychiatric things like PTSD, 
concussion injuries, things like that--could be done first so 
those could come online early in that 3-year process. It is a 
very time consuming process.
    I do not think there is any company in the world, any 
company, that could do it very very fast.
    Chairman Akaka. Mr. Cox, I agree with you that there is no 
magic bullet for reducing the backlog in the face of two wars, 
an aging veteran population now, benefits and laws, and new 
benefits and laws. I know that you believe that an intensive 
training effort is required to enable staff to reduce the 
backlog.
    My question to you is, how can regional offices meet 
training requirements without sacrificing production?
    Mr. Cox. If I could answer that totally today, sir, I would 
probably be the Secretary of the department, because I think 
that is a very difficult question.
    I think up-front you have to make that commitment. You have 
to allocate that time to the employee, do the proper training 
and realize that they are not going to be able to produce the 
same work that someone who has been there 5 or 10 years doing 
it.
    Again, these are on-the-job people--all training happens 
on-the-job. It is about 2 years before a person is functioning 
at full capacity to be able to deal with the claims and to do 
the work.
    Again, it is like someone going to nursing school. We would 
not expect someone the first 6 weeks in a nursing program to be 
able to function at the same level as the nurse that had 5 or 
10 years working in an intensive care unit.
    So, I think there has to be the set aside and understanding 
that it takes a period of time. You hired 3100 employees over 
the last year, but I do not think you are going to see the full 
effects of those employees for about another year or a year and 
one-half to come when they are at full production level.
    Chairman Akaka. Thank you.
    Mr. Rollins, your testimony suggested that Congress may 
want to consider decentralizing the operations of the Board of 
Veterans' Appeals. Can you explain what the benefits of this 
reform would be? In your mind would this require additional 
resources or could it be accomplished with BVA's current staff 
size and budget allocation?
    Mr. Rollins. I certainly have not studied it to the depth 
that I could say with a degree of confidence that they would be 
able to do that with current staffing and budget. I really do 
not know.
    I do believe the system, as it was designed, is quite 
antiquated and it has been in place a long time. The VA has a 
tendency right now to want to consolidate everything. The 
problem with that is, you get away from local decisions. The 
appeals staff right now are very highly trained. As you may 
remember, over the past few years this was a big issue--4, 5 or 
6 years ago--with the backlog in appeals. They have staffed up 
and they are being more productive, but they are getting more 
appeals. And if the trends continue, that will go up as well.
    So, by decentralizing, you may be able to get a decision 
done locally. Certainly you would have the expertise of the 
administrative law judges available to the VA staff. The raters 
and the staff that are working at regional offices today, they 
do not have a dialog or connection right now. We might be able 
to avoid an appeal if a rating specialist had the ability to 
talk to a law judge about a case before it got up to the board 
even. They might be able to resolve it quickly and locally.
    Chairman Akaka. Thank you very much.
    Senator Burr.
    Senator Burr. Mr. Pierce, I heard you say, as you made your 
presentation, that this was developed a number of years ago. 
Were this to be a project that you developed today, from that 
experience, what would you do differently as you developed that 
product?
    Mr. Pierce. A very good question, sir. The main thing that 
we would do that we did not have the resources nor the time in 
that demonstration project, what we would do differently is 
assemble a team of experienced raters to work with us as we did 
it.
    Just as with any complicated world, the rule sets only give 
you maybe 70 percent of the expertise you need. The best 
practices developed in the field are critically important and 
the variation you see between the different ROs has a lot to do 
with where that expertise lies.
    If you can bring it altogether--put that expertise in the 
tools and, therefore, everybody is benefiting from it--and as 
new expertise is developed, you put them right back, so you are 
continuously evolving those tools. That is probably the main 
thing that I would focus on right away. It was not that we did 
not know that at the time. It was just that in this project we 
did not incorporate that level. One lot of interviews with 
people and then we had to get this done and get it to 
everybody.
    Senator Burr. Within that framework at the time you had to 
deal with, did you review the software that they currently use 
to probe through these files?
    Mr. Pierce. Well, at the time, as they were starting to 
consider building a program--I think it is called RBA-2000--I 
think one of the reasons that--after our demo was done and well 
received by everybody in the VBA--we never heard from anybody 
again until now was the hope that they would be able to do 
something similar to this in-house. So, we had no visibility 
from that day forward into what was going on in the VBA despite 
a number of inquiries, obviously. This would be a huge project 
for a small company like mine.
    Senator Burr. Well, that is sort of a government impulse. 
If we can do it outside, we can do it better inside. The 
current Administration not included.
    Mr. Pierce. It is a natural impulse because they do not 
want to be trapped by parochial software that some other 
company has to maintain.
    Senator Burr. Let me ask you. You understood very well the 
complexity of what these raters are asked to go through and the 
impact frequent court decisions, new laws, and changing 
regulations might have on their process.
    If you created a software package like this, could it be 
created in a fashion that had the flexibility to incorporate 
those changes, those nuances, as they, in fact, took place?
    Mr. Pierce. That would be the whole point. The world that 
we live in mostly is clinical decision support and the science 
of medicine changes constantly. So our system, and any system 
like it, is designed so that you have people monitoring those 
changes continuously and updating the software continuously. 
So, the software is inherently designed to anticipate constant 
evolution and new information and new rules being asserted into 
it while it is being used.
    Senator Burr. Let me ask this question for Senator Tester, 
because I think he would ask it if he was still here. You said 
that creating this automated system would not be easy, that it 
would take some time.
    Mr. Pierce. Yes.
    Senator Burr. How long?
    Mr. Pierce. Our estimate at the time 7 years ago with one 
major assumption being made--which was that we had the full 
cooperation of the VBA and access to some of their best 
raters--we estimate our company could build this totally in 3 
years, and we could build it in components so that they come 
online during the course of those 3 years, starting with the 
most complex areas and the most currently active areas. 
Obviously in the current situation we are in now, that would 
mean a lot of the psychological components and a lot of the 
concussive Traumatic Brain Injury, and things like that, and 
some of the orthopedic stuff.
    Senator Burr. Let me turn to the other three if I can. I 
mean, you have seen the same presentation I have--possibly for 
the first time--and the use of technology in making these 
decisions or building in the assumptions, I guess one would 
say. What is your assessment of it and do you believe that it 
would provide the degree of accuracy and consistency with what 
we need in the rating process?
    Mr. Baker. Not myself, but others at DAV have looked at the 
technology and they like it. What I think I could add to it is 
that we have looked at manpower and budgetary resources and now 
this IT stuff. What I try to focus on with my recommendations 
are changing core procedures in the VA. Now, that, added to the 
technology, I think you would have a completely different 
system.
    How you can mend the two together, I do not think it would 
be that difficult. But some of the recommendations we tried to 
make here today, if you look at a case that goes all the way 
through the appeals process, could conceivably take 3 years off 
of the case and not take away a single right from a veteran. 
That is the case that would normally get remanded to AMC. It 
takes 6 months to 7 months off of an appeal just to get to the 
BVA.
    Now, if you can incorporate those types of procedural 
changes that do not take any rights away from the vet, does not 
expend any governmental resources--while at the same time 
automating other parts of the process,--then you are kind of 
attacking the problem all the way through. Only the IT, I think 
you are still left with these superfluous procedures that just 
add to the process, do nothing for the vet, complicate things 
for the VA and open up interpretations from the court.
    So, I would like to see a combination of the two and I 
think you would have a pretty solid system at that point.
    Senator Burr. David.
    Mr. Cox. I think IT here is just like in health care. It 
has greatly enhanced the doctors and nurses in the work that 
they do, but by the same token, it will not totally replace the 
human element of the individual that that person needs to be 
involved in that claim, just as the doctor has to be involved 
in health care.
    I think IT is certainly moving along, but there is also the 
great need to train the employees in the use of the IT; and 
understand that while they are learning how to use that it will 
slow down the process while you are actually doing things that 
will speed up the process.
    Senator Burr. Well, I think of something that Bo said. 
Below the knee amputation is sort of a no-brainer. If you look 
at it, a claims processor can sort of process that pretty 
quickly.
    Mr. Rollins. Yes, sir.
    Senator Burr. We do not have a system that sorts out the 
easy ones and shuffles the tough ones over here. They work 
through the list.
    We assume that an individual processes that faster, not 
necessarily looking at the numbers, believing that that 
assumption is the right one. With this package, it would happen 
because it would kick that out in a process very early on 
because the likelihood is the majority of the information was 
there. It is almost like a third-party review and we know the 
easier the conclusions are, third-party review takes a 
tremendous pressure off of those individuals who do the tough 
ones.
    I will go to you on any comments on this, Bo?
    Mr. Rollins. Yes, sir. I think certainly the IT idea system 
is going to help. I do agree with Mr. Cox about we cannot 
remove the human element no more than we can take a computer 
and replace a judge and a jury in a courtroom. Evidence has to 
be weighed and material has to be interpreted, and there is 
always going to be a brain that is going to have to be involved 
in the process, but there are a lot of things that are no-
brainers, and they are not automated, and they could very 
easily be.
    The other thing is, it is a little ridiculous that a 
veteran has to go tell the VA he is a male when we figured that 
out when we examined him when he enlisted in the service. We 
should capture that data, as you referred to earlier, from the 
very start. The DOD knows it. There is no reason that that 
cannot be entered the day I raise my hand and you put me in the 
system. I am eventually going to be a veteran unless I somehow 
dishonor myself and am booted out.
    When I get my leg blown off a year and one-half later in 
Iraq and that ``op'' report gets in there reporting my trauma, 
that data has already been captured. It is simply a matter of 
transmitting and getting it to the VA. And anything that 
happens to me during the entire period of my service can be 
documented, transmitted over, stored in some giant server 
somewhere and then blasted to VA once it is time for my claim 
to be processed. It is not as complex as it might be made to 
appear in a lot of cases.
    Senator Burr. I am thoroughly convinced that we have 
individuals at the VA today that understand the need to capture 
that DOD information, that they are doing everything that they 
can professionally and privately to try to facilitate that at 
all levels. I think that is the one thing that changed: its 
that we do have that aggressive attempt to try to glean that 
information.
    Howard.
    Mr. Pierce. Yes. One comment just to echo what these folks 
have been saying is, that this is a decision support system. It 
absolutely does not remove the human and one of the main goals 
for designing this stuff is to improve the job experience of 
the people who have to make these tough decisions.
    We are absolutely convinced that a system like this, 
properly implemented, will actually help with retention and 
will certainly help with the job of training people up from new 
recruits into the system.
    If you put the knowledge of how the rules perform into the 
machine itself, it allows the training to be much more focused 
on the interpersonal and those subtle skills on how do you go 
out and ferret this information out, help them in service 
organizations assemble stuff. That is really what these tools 
are best at.
    Linking all those rules in is great, but I think the most 
important part is helping--particularly the new rater--get a 
vision of what has to be done quickly and become effective more 
quickly.
    Senator Burr. Thank you. Thank all of you.
    Chairman Akaka. Thank you. I will start a second round 
here.
    Mr. Baker, you note that over the years the Court of 
Appeals for Veterans' Claims has demonstrated a propensity to 
remand and vacate cases rather than reverse errors committed by 
the Board of Veterans' Appeals.
    Please discuss your prescription for addressing this 
problem and describe the impact it will have on the claims 
adjudication process as a whole.
    Mr. Baker. The bill in the House right now, H.R. 5892, 
would amend the court's rules. I believe it is section--I am 
not going to try to repeat the section. I will misstate it. But 
it would require the court to address errors raised by the 
appellant unless the court is going to reverse the decision.
    So, if you have a case come up and an attorney or a 
representative or the appellant himself presents two or three 
legal arguments, a lot of times what the court will do either 
at the encouragement of VA counsel or on their own, sua sponte. 
They will take one issue and address it, and they will take the 
other two and they will not address it. They will vacate that 
issue and remand it back to the board and indicate in their 
decision that that can be raised again at the board.
    But, you are sending the same thing back to the board that 
they already looked at with no judicial instruction. And most 
likely you have made that same argument at the board. The board 
is going to do the exact same thing and render the exact same 
opinion.
    It is going to come to the court just to do it all over 
again; and when you have these things pile up by the thousands 
at the court, you can multiply that numerous times over at the 
board and numerous times over at the oral levels or the AMC. 
And if the court would just address it the first time, you 
would eliminate all of that.
    Now, that is going to simply address appellant's error. In 
some instances it may be favorable and it may be unfavorable. 
At the same time VA knows that this takes place. There have 
been a tremendous number of cases settled once we pushed for 
the court to address something. But when VA is convinced that 
they are not going to address it, you know, they continue to, I 
guess, sort of defend to the death and we will not settle the 
case.
    A lot of cases went to oral argument; and as soon as the 
case goes to oral argument, VA settles the case because they 
have a feeling that they are going to lose.
    If the errors were addressed by the court the first time 
they were raised, you would eliminate all of that and it would 
do a tremendous amount of, you know, it would add a lot of 
efficiency to the system; and it would not expand benefits 
whatsoever. It would just clean up some procedural messes and I 
think it would be very positive to the system.
    Chairman Akaka. Thank you.
    Mr. Pierce, you suggested it would take 3 years to automate 
the current rating schedule. What do you estimate the cost of 
such an effort would be?
    Mr. Pierce. OK. For the record, with several caveats that, 
again, we would need a great deal of cooperation with this, 
that, and the other; and that we are just tool builders. We 
build a tool. The way it is implemented and the other tools 
with which it is imbedded is not part of my estimate.
    We estimate it would take somewhere in the nature of $3 
million a year for 3 years and then a $2 million carrying cost 
thereafter for keeping up with the law, keeping things current, 
always updated. That was just off the cuff, that is what we 
thought it might take.
    Chairman Akaka. In your testimony, Mr. Pierce, you suggest 
that the VA's approach of using a systems integrator for 
developing IT solutions to improve the disability rating 
process will further delay the process of automating the rating 
schedule. I am interested in your thoughts on what you would 
recommend VA use in lieu of a systems integrator.
    Mr. Pierce. I certainly did not want that to be the intent 
of anything I put in my testimony. So, I do not believe it was, 
but I believe the opposite--that a systems integrator is 
absolutely necessary here in order to try to put together all 
of the parts and improve them individually; and they can work 
together. You need somebody whose job it is to do that at the 
high level.
    We would be one small component of that in my estimation. 
But I would suggest that the kind of thing we do needs to be a 
core component; and it will be the rate-limiting step of the 
whole project if it is not started soon. No one could take this 
apart and reconstruct it in a set of tools like this quickly, 
but I think that an integrator is absolutely necessary.
    Chairman Akaka. My final question is for each of the 
witnesses and I will begin with Mr. Rollins.
    Recognizing the difficulties in automating the claims 
adjudicating process, are there parts of the process which are 
more easily suited to automation than others?
    Mr. Rollins.
    Mr. Rollins. Yes, sir. As I said earlier, there are several 
steps that right now require human actions. Somebody has to 
look at a piece of evidence or a document and make a decision 
and then enter it into the system and implement that decision.
    The application for automobile adaptive equipment right now 
is a carbon paper form and I do not know when the last time you 
filled out a carbon paper form is, but it is the only one I 
filled out recently. That can be automated.
    The entitlement for automobile adaptive equipment is based 
on loss of a hand, loss of a foot and a few other things like 
that. So that would be very easily automated with my very 
limited IT experience. But, the way the system works, 
basically, it is a rule that this gentleman refers to--if you 
have got X and that equals Y and you could code that and put 
that into a system, it should not be that complex.
    There are many benefits that that could be done with 
already and done quickly. While it is not huge in terms of 
workload, that frees what currently is a human process--that 
frees that human to go back to doing work that really requires 
decision processing--and that would improve the system overall 
quickly. And some of the baby steps that we need to take, that 
we can take now or in the relatively near future instead of 
waiting and dealing with the contracting and going through a 3-
year upgrade and so on.
    Chairman Akaka. Mr. Pierce.
    Mr. Pierce. I have not reviewed all the parts of what would 
be re-engineered in the process. I cannot really speak to it, 
but what I could say is that one of the things that should be a 
fundamental goal of the process is to take what is now a rather 
opaque set of processes to the vet and to the people who are 
supporting the vet, and even to the people trying to produce a 
case, and make it all more transparent.
    One of the great benefits these days of automation is that 
you can take data, put it in a form that can be shown to others 
and then have them put more data in, in a very controlled 
fashion so they do not make mistakes, do not put in data that 
is not useful and are prompted as to what is useful.
    I would say that one of the first things that could be done 
is to build a first--I showed you 13 body systems here. We 
proposed one other component, which was a starter component for 
the vet themselves and the VSOs to fill out that would start 
that process of telling them what they needed to get together 
to complete their particular claim most efficiently, and it 
would also start the case.
    So, in our proposal at the time, we suggested that is the 
first thing that could be built. It could be built very very 
quickly, put online, and at least get everybody started on the 
process of using these kinds of tools as part of the work flow.
    Chairman Akaka. Mr. Cox.
    Mr. Cox. Mr. Chairman, I believe the first step in trying 
to figure out how to automate the process and improve it is to 
ask the employees that actually do the work every day, the 
thousands of VBA employees that AFGE represents. And I think 
that I would not be able to say exactly which step to be done 
first, but I would say, ask our membership, go to those rank 
and filers that do that work every day and I am sure that they 
have many ideas of how to automate the process; what needs to 
be done first; and how to do the work better; and how to better 
service America's veterans. Ask the workers that do the work, 
sir.
    Chairman Akaka. Thank you.
    Mr. Baker.
    Mr. Baker. I kind of agree with what everybody said. As far 
as looking at what specific procedures can be automated the 
easiest, I think there are plenty. It could be claims for 
temporary 100 percent based on hospitalization or service-
connected condition or surgery of service-connected condition 
or the automobile grant, the housing grant, DIC. There are lots 
of things that are simply, if you have A, B and C you get the 
benefit, and it is very easy to see if you have A, B and C. 
Those can be automated.
    These are absolutely no-brainers, for lack of a better 
explanation. That is where I would start if you are looking at 
actual end products and goals that VA does on a daily basis.
    I also agree with Mr. Cox and I think there is a lot more 
of an answer to that if you ask the VA employees themselves. 
That is what I would state.
    Chairman Akaka. Thank you very much.
    I want to thank our witnesses on the second panel and I 
want to thank all of our witnesses and thank you, Admiral, for 
remaining here for the entire hearing.
    Your input is of great value to the Committee as we 
continue to work to ensure timeliness and accuracy in claims 
processing. We look further to working with you and look 
forward to some rapid improvement here, and without question, 
we need to work together on all levels to bring this about.
    This hearing is now adjourned.
    [Whereupon, at 11:26 a.m., the Committee was adjourned.]
  

                                  
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