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[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

 
                      RATING THE RATING SCHEDULE--
                   THE STATE OF VA DISABILITY RATINGS
                          IN THE 21ST CENTURY

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON DISABILITY ASSISTANCE
                          AND MEMORIAL AFFAIRS

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 24, 2012

                               __________

                           Serial No. 112-39

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                  U.S. GOVERNMENT PRINTING OFFICE
72-519                    WASHINGTON : 2012
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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York

            Helen W. Tolar, Staff Director and Chief Counsel

                                 ______

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                    JON RUNYAN, New Jersey, Chairman

DOUG LAMBORN, Colorado               JERRY McNERNEY, California, 
ANN MARIE BUERKLE, New York          Ranking
MARLIN A. STUTZMAN, Indiana          JOHN BARROW, Georgia
ROBERT L. TURNER, New York           MICHAEL H. MICHAUD, Maine
                                     TIMOTHY J. WALZ, Minnesota

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________

                            January 24, 2012

                                                                   Page
Rating the Rating Schedule--The State of VA Disability Ratings in 
  the 21st Century...............................................     1

                           OPENING STATEMENTS

Chairman Jon Runyan..............................................     1
    Prepared statement of Chairman Runyan........................    42
Hon. Jerry McNerney, Ranking Democratic Member...................     2
    Prepared statement of Congressman McNerney...................    43

                               WITNESSES

Jeffrey C. Hall, Assistant National Legislative Director, 
  Disabled American Veterans.....................................     4
    Prepared statement of Mr. Hall...............................    43
Frank Logalbo, National Service Director, Benefits Service, 
  Wounded Warrior Project........................................     6
    Prepared statement of Mr. Logalbo............................    47
Theodore Jarvi, Past President of N.O.V.A., National Organization 
  of Veterans' Advocates, Inc....................................     9
    Prepared statement of Mr. Jarvi..............................    52
Thomas J. Murphy, Director of Compensation Service, Veterans 
  Benefits Administration, U.S. Department of Veterans Affairs...    20
    Prepared statement of Mr. Murphy.............................    57
John R. Campbell, Deputy Assistant Secretary of Defense, Wounded 
  Warrior Care & Transition Policy, U.S. Department of Defense...    22
    Prepared statement of Mr. Campbell...........................    60
Accompanied by:
    Jack Smith, Acting Deputy Assistant Secretary for Clinical 
      and Program Policy for Health Affairs, U.S. Department of 
      Defense
    Daniel Cassidy, Deputy Commander of the U.S. Army Physical 
      Disability Agency
    Robert Powers, Secretary of the Navy Council of Review 
      Boards, U.S. Department of Defense
    Frank Carlson, MC, Physical Evaluation Board, U.S. Department 
      of Defense
James Terry Scott, Lieutenant General USA (Ret.), Chairman, 
  Advisory Committee on Disability Compensation..................    34
    Prepared statement of Mr. Scott..............................    61

                       SUBMISSIONS FOR THE RECORD

Verna Jones, Director, National Veterans Affairs and 
  Rehabilitation Commission, The American Legion.................    63
Paralyzed Veterans of America....................................    64
Jim Vale, Director, Veterans Benefits Program, Vietnam Veterans of
   America.......................................................    67

                      RATING THE RATING SCHEDULE--
                   THE STATE OF VA DISABILITY RATINGS
                          IN THE 21ST CENTURY

                              ----------                              

                       TUESDAY, JANUARY 24, 2012

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

    The Subcommittee met, pursuant to notice, at 10:08 a.m., in 
Room 334, Cannon House Office Building, Hon. Jon Runyan 
(Chairman of the Subcommittee) presiding.

    Present: Representatives Runyan, Buerkle, McNerney, Barrow, 
Michaud, and Walz.

    Also present: Representatives Harris and Miller.

            OPENING STATEMENT OF CHAIRMAN JON RUNYAN

    Mr. Runyan. Good morning and welcome. The Disability 
Assistance and Memorial Affairs Subcommittee will now come to 
order.
    We are here today to examine the Department of Veterans 
Affairs current framework on rating for veterans injury, 
illness, and disabilities resulting from service in our 
Nation's military.
    Along with my colleagues on this Subcommittee I take our 
focus on disability and veterans and to our wounded warriors 
very seriously, and on a personal note I am pleased to be able 
to participate in the House of Representatives Wounded Warrior 
Program by recently hiring Melissa Worthan, a Marine, disabled 
veteran as a caseworker in my district office. Ms. Buerkle and 
I were just having a conversation about this; she also hired a 
veteran who is a great liaison to have. These veteran-employees 
talk to veterans as they call in with their case issues in our 
district offices. I am truly honored to have Ms. Worthan as a 
member of my team.
    My continued hope for DAMA is that this meeting of minds 
sets a precedent and tone for a broader promise that we have 
made our veterans population. That promise is to ensure that 
the entire claims process, the delivery of earned benefits and 
veterans medical services is transformed into a fully efficient 
and modernized system equipped with the best tools available to 
aid our veterans population in the 21st century.
    Several years ago a commission was established to care for 
our veterans returning as wounded warriors; it was led by 
former Senator Dole and former Secretary of Health and Human 
Services, Donna Shalala. The purpose of this commission was to 
examine the health care services provided to members of the 
military and returning veterans by the VA and the Department of 
Defense.
    Around the same time, Congress created the Veterans 
Disability Benefits Commission, which was established in the 
National Defense Authorization Act of 2004. This commission was 
created by Congress out of serious concerns, many of which we 
still have today. Those concerns included the timeliness of 
processing disabled veterans claims for benefits.
    This commission conducted a 2-year indepth analysis of 
benefits and services available to veterans and the processes 
and procedures used to determine eligibility.
    Their conclusion was published in a comprehensive report 
entitled Honoring the Call to Duty, Veterans Disability 
Benefits in the 21st Century.
    The end results of these reports were several 
recommendations, including the goal of updating and simplifying 
the disability determination and compensation system on a more 
frequent basis. Although select portions of the rating system 
have been updated throughout the past 20 years these reports 
refer to the rating schedule as outdated. The schedule as a 
whole has not been comprehensively revised since the conclusion 
of World War II.
    They recommended the rating schedule be updated at 
recurrent and relative intervals to address advances in medical 
and rehabilitative care. Also recommended was a greater 
appreciation of understanding for certain disabilities such as 
PTSD. The more recent updates to the diagnostic criteria for 
new types of injuries such as TBI were a step in the right 
direction; however, I believe it is our duty to be vigilant and 
pressing for continued revision reflecting the continuing 
advances and understanding on all medical care and treatment.
    In addition I am in agreement with their conclusion that a 
more candid emphasis on veteran quality of life should be taken 
into account in an updated rating schedule.
    Therefore we are here today to honor our duty to our 
Nation's veterans. Just as we would not issue World War II era 
equipment and weapons to our current soldiers and Marines and 
expect them to be successful on the modern battlefield we 
should not be satisfied with the World War II era system for 
evaluating and rating their disabilities as a result of their 
service and sacrifice to this Nation.
    I want to thank the VA, the DoD, and the present VSOs and 
General Scott for their valuable input as we work together to 
find important solutions.
    I welcome today's witnesses to continue this ongoing 
discussion and offer their own specific recommendations to how 
to improve the current system of rating our veteran's 
disabilities.
    I would now call on the Ranking Member for his opening 
statement.

           OPENING STATEMENT OF HON. JERRY McNERNEY, 
                   RANKING DEMOCRATIC MEMBER

    Mr. McNerney. Thank you, Mr. Chairman.
    Today is an important hearing and it is a bipartisan 
hearing so I am really delighted that we are having this today.
    As we have discussed over the course of many hearings in 
the 110th and 111th Congresses, the VA's claim processing 
system has many shortcomings which have left many disabled 
veterans without proper and timely compensation and other 
benefits to which they are rightfully entitled.
    Today 66 percent of VA's 866,000 pending claims languish in 
backlog status.
    At the heart of this system is the VA Schedule for Rating 
Disabilities or VASRD.
    In this study the Veterans' Disability Benefits Commission 
concluded that the VA rating schedule has not been 
comprehensively updated since 1945. Although sections of it 
have been modified no overall review has been satisfactorily 
conducted, leaving some parts of the schedule out of date, 
relying on arcane medical and psychological practices, and out 
of sync with modern disability concepts.
    The notion of a rating schedule was first crafted in 1917 
so that returning World War I veterans could be cared for when 
they could no longer function in their pre-war occupations. At 
the time the American economy was primarily agriculturally 
based and labor intensive. Today's economy is much different 
and the effects of disability may be greater than just the loss 
of earning capacity.
    Many disability specialists believe that the loss of 
quality of life, functionality, and social adaptation may also 
be important factors.
    Our Nation's disabled veterans deserve to have a system 
that is based on the most available and relevant medical 
knowledge. They do not deserve a system that is in many 
instances based on archaic criteria for medical and psychiatric 
evaluation instruments.
    I know that Congress in the Veterans' Benefits Improvement 
Act of 2008, P.L. 110-389, directed the VA to update the VASRD 
and to delve into revising it based on modern medical concepts. 
I know that the VA in following this directive has undertaken a 
comprehensive review of the VASRD and I look forward to 
receiving a thorough update on its progress.
    Congress also created the Disability Advisory Committee in 
P.L. 110-389, and I welcome General Scott here today who is the 
chair of the Committee and I also welcome his insight.
    I look forward to the testimony today from all of the 
witnesses on the complex issues surrounding modernizing the VA 
rating schedule.
    I know that there is a lot to be done to improve the VA 
claims processing system, but with the rating schedule at the 
core of the process it seems that the centerpiece is in need of 
a comprehensive update.
    There are over 2.2 million veterans of the wars in 
Afghanistan and Iraq with 624,000 who have already filed 
disability claims. There are also so many veterans whose claims 
were not properly decided in the past because of the analogous-
based subjectivity that is inherent in the current VASRD.
    Since the DoD relies on this system and as we transition to 
the one exam platform under the Integrated Disability 
Evaluation System bringing the VASRD into the 21st century is 
so critical. We must finish updating it without delay.
    I look forward to working with you, Mr. Chairman, and the 
Members of this Subcommittee in providing stringent oversight 
of the VA Schedule for Rating Disabilities.
    The VA needs to adopt the right tools to do the right thing 
so our Nation's disabled veterans get the right assistance they 
have earned and deserve.
    I thank you, Mr. Chairman, and I yield back.
    Mr. Runyan. Thank you, Mr. McNerney.
    At this point I want to ask unanimous consent that Dr. 
Harris sit at the dais and participate in our hearing here 
today. Without objection so moved.
    At this point the chairman now calls panel one to come to 
the witness table. We will be hearing first from Mr. Jeff Hall, 
the Assistant National Legislative Director for the Disabled 
American Veterans, then we will hear from Frank Logalbo, the 
National Service Director of Benefits and Service for the 
Wounded Warrior Project, and our final witness on this panel 
will be Mr. Theodore Jarvi, the Past President of the National 
Organization of Veterans' Advocates.
    Your complete statement will be entered into the hearing 
record, and Mr. Hall, I know recognize you for 5 minutes.

 STATEMENTS OF JEFFREY C. HALL, ASSISTANT NATIONAL LEGISLATIVE 
 DIRECTOR, DISABLED AMERICAN VETERANS; FRANK LOGALBO, NATIONAL 
 SERVICE DIRECTOR, BENEFITS SERVICE, WOUNDED WARRIOR PROJECT; 
 THEODORE JARVI, PAST PRESIDENT OF NOVA, NATIONAL ORGANIZATION 
                  OF VETERANS' ADVOCATES, INC.

                  STATEMENT OF JEFFREY C. HALL

    Mr. Hall. Thank you, Mr. Chairman. Good morning to you and 
Ranking Member McNerney and Members of the Subcommittee.
    On behalf of the 1.2 million members of DAV it is an honor 
to be here to offer our views regarding the VA Schedule for 
Rating Disabilities and the revision process currently under 
way.
    My written testimony, which has been submitted, focuses 
primarily on three key concerns. The current rating table 
revision process, which should be open but has effectively been 
closed to VSOs. The proposed revisions to the mental disorder 
section of the rating schedule which appear to be headed in a 
direction which may be harmful to veterans and could undermine 
the entire rating schedule. And compensating disabled veterans 
for the loss of quality of life, which the rating schedule 
should include.
    Mr. Chairman, as I prepared my remarks for today I thought 
about what it really means to be a severely disabled veteran 
who wants to work, and I would ask you and the other Members of 
the Subcommittee to take a moment and think back about what you 
went through this morning as you prepared for and getting to 
work. Consider what you and millions of others go through each 
and every day just to make it to your job on time.
    Now consider a veteran with serious service-related 
disabilities. Think about a paraplegic confined to a wheelchair 
as he heads to work, what must that veteran go through every 
single day? Perhaps enduring who knows how many additional 
hours daily just getting to and from work because simple tasks 
that we take for granted such as practicing personal hygiene or 
negotiating a vehicle or using mass transit can be monumentally 
more complicated for him or her. Or a veteran with bilateral 
leg amputations. What does he or she have to go through when it 
snows and the driveway needs to be shoveled just in order to 
make it to the train station negotiating obstacles encountered 
along the way simply to get to work? Think of a severely 
disabled veteran and what they have already endured during the 
rehabilitation process and what they must withstand simply to 
compete for and in the same job as someone without disability.
    Now imagine a system that measures his or her disability 
based on the ability of that veteran to hold full-time 
employment without any consideration about the obstacles that 
they must overcome or how that disability has forever altered 
their lives.
    Mr. Chairman, that is the direction we fear that the VA is 
moving in with the ongoing mental health rating revision.
    Based on two public briefings to the Advisory Committee for 
Disability Compensation, one in December 2010 and one in 
October 2011, the new mental health rating schedule would no 
longer look at the medical consequences of disability but 
instead focus solely on work, how often a veteran was unable to 
work or was impaired from working effectively.
    For example, from what was discussed in October under this 
proposal a veteran unable to work 2 days per week would be 
rated 100 percent disabled, while a veteran with decreased work 
quality or productivity 2 days per week would be rated 70 
percent disabled and so on using various combinations of work 
productivity and quality measures.
    In such a system a disabled veteran suffering from PTSD or 
depression who has a job and is doing his or her best toward 
vocational fulfillment would be confronted with the dilemma of 
having to choose between working full-time or receiving 
disability compensation. Basically the less a veteran is able 
to work the more he or she is compensated.
    Such an approach is not only directly contrary to the 
existing statute in legislative history and intent, it also 
raises a number of troubling questions about how such a system 
would work and what effects it would have on veterans and the 
disability compensation system.
    How would VBA know when or how effectively a veteran was 
able to work? Will VBA simply rely on self-reporting by 
veterans to determine ratings or will they seek to verify the 
impact on work performance by contacting employers? How would 
this be done? Would VBA tell employers that they are verifying 
mental health disorders and ask employers to verify personnel 
records?
    These are troubling questions indeed. What if a veteran has 
a law degree, but whose severe PTSD makes it so difficult to 
work around other people that the only job he can perform is as 
a night watchman or a custodian. Since he is able to work 
productively 40 hours per week does that mean he is not 
entitled to VA disability compensation?
    What would that mean for other types of disabilities? Would 
a veterans whose legs were blown off by an IED in Iraq but who 
has struggled mightily to overcome that disability and is 
working productively in a full-time job be subject to a lower 
disability compensation?
    Mr. Chairman, we don't believe that this was the intent of 
Congress 75 years ago, and we certainly hope that it is not 
what Congress wants now.
    We hope that this Subcommittee will seek answers to these 
and other questions about the ongoing VASRD update process to 
insure the integrity and intent of VA disability compensation 
system.
    Finally DAV strongly believes that the time is long overdue 
that VA disability compensation implicitly and directly include 
compensation for the loss of quality of life. There is a well-
established and understood concept in the field of disability 
that it has been recommended by numerous commissions, including 
the congressionally charted VDBC and other western countries 
which also offer comprehensive benefits such as Canada and 
Australia who do exactly that.
    Mr. Chairman, DAV looks forward to working with you and 
other Members of the Subcommittee on this important matter.
    This concludes my statement and I will be happy to answer 
any questions you may have.
    [The prepared statement of Jeffrey Hall appears on p. 43.]
    Mr. Runyan. Thank you, Mr. Hall.
    As everybody noticed Chairman Miller has joined us at the 
dais. I would like to welcome him and his participation here. 
Do you have any comments you would like to make?
    That being said, having missed the opportunity before we 
got started here, I know Dr. Harris would like to make a 
comment. Is there any other Members that are on the 
Subcommittee that would like to say anything before we get 
started? Dr. Harris.
    Mr. Harris. Thank you, Mr. Chairman, I can just delay it 
until just before my questions.
    Mr. Runyan. Okay, thank you.
    Mr. Harris. Thank you for giving me the opportunity and 
thank you for allowing me to sit in.
    Mr. Runyan. Thank you very much.
    Mr. Logalbo, you are now recognized for 5 minutes.

                   STATEMENT OF FRANK LOGALBO

    Mr. Logalbo. Thank you.
    Chairman Runyan, Ranking Member McNerney, and Members of 
the Subcommittee, thank you for holding this timely and 
important hearing on VA's rating schedule and for inviting the 
Wounded Warrior Project to provide testimony.
    Wounded Warrior Project brings a special perspective to 
this subject reflecting its founding principal of warriors 
helping warriors. We pride ourselves on outstanding service 
programs that advance that ethic.
    Among those program efforts Wounded Warrior Project across 
the country works daily to help warriors understand their 
entitlements and fully pursue VA benefits claims.
    As Wounded Warrior Projects national service director, a 
position which I oversee A work of our service officers, I draw 
extensively from 17 years of claims adjudication experience and 
work with the VA's rating schedule as a VSR, a senior service 
representative, rating specialist, assistant service center 
manager with the Veterans' Benefit Administration.
    In our view VA's most important challenge as it works to 
update its rating schedule is to make compensation for mental 
health conditions as fair as possible.
    Combat-related mental health conditions are not only highly 
prevalent and often severely disabling, but have profound 
consequences for warriors' overall health, well-being, and 
economic adjustment.
    To illustrate the point, two-thirds of the Wounded Warrior 
Project or wounded warriors responding to a recent Wounded 
Warrior Project survey reported that emotional problems have 
substantially interfered with work or regular activities during 
the previous 4 weeks. And when asked to comment on the most 
challenging aspect of their transition some two out of five in 
the survey cited mental health issues.
    Given the strong link between warriors' mental health and 
their achieving economic empowerment it is vital that 
compensation for service-incurred mental health conditions be 
equitable and make up for lost earning capacity, but deep flaws 
in both VA evaluation procedures and its rating criteria pose 
real problems for warriors bearing psychic combat wounds.
    To its credit the Department of Veterans Affairs, the VA, 
has acknowledged that its rating criteria of mental health 
disorders needs thorough revision. Those criteria are deeply 
problematic.
    To illustrate, one independent expert panel characterized 
the mental health rating criteria as crude and overly general, 
focused too narrowly on occupational and social impairment, and 
is failing to consider other factors like frequency of symptoms 
that are used in the rating physical disorders. Also given that 
VA disability ratings are to be based on average impairment of 
earning capacity, rating a mental health condition on the basis 
of that veteran's occupations impairment is simply 
inappropriate.
    Eliminating occupational impairment as a defining rating 
factor in rating would be an important first step, but VA must 
also recognize that its rating criteria are unreasonably high.
    An example would be the criteria for 100 percent rating 
more closely resembles a degree of impairment with a need for 
institutional care than simply functional impairment. In fact 
the criteria for 100 percent rating, which entitles a veteran 
to $2,679 in monthly entitlement, are most indistinguishable 
from the criteria, especially monthly compensation, which 
entitles the veteran to $3,100 monthly.
    It is simple and reasonable for the disability bar to be 
seat that high.
    VA most also insure that compensation for mental health 
conditions replaces average loss and earning capacity. Today it 
is not. The flaw was carefully documented in an analytic 
prepared for the Veterans' Disability Benefit Commission which 
showed that on average VA compensation for mental health 
condition fails to fully replace lost earnings unlike 
compensation for physical disabilities.
    In short we believe VA must completely rewrite its rating 
criteria for mental health disorders, but let me stress, the 
best possible ratting criteria alone with not result in fair 
and accurate compensation awards because VA's principal 
mechanism for evaluating the veteran's condition is 
fundamentally unreliable.
    Currently the claims adjudication process relies heavily on 
examination conducted by a psychologist or psychiatrist who 
typically has never before met yet alone treated the veteran. 
Let us be clear, evaluating the extent of a psychiatric 
disability is far more complex than evaluating a physical 
condition which can be objectively measured. A one time 20- to 
30-minute conversation in a hospital office simply will not 
tell the most knowledgeable, conscientious examiner how the 
veteran functions in the community, yet more than one in five 
wounded warriors who responded to Wounded Warrior Project 
survey last year reported their VA compensation examination for 
original PTSD claim was 30 minutes or less. Hurried or less 
incomprehensive C&P examinations heighten the risk of adverse 
outcomes, additional appeals, and long delays in veterans 
receiving benefits.
    VA's mental health compensation determination should be 
based on the best evidence of a veteran's functional impairment 
associated with that service-connected condition.
    We urge the Committee to press VA to revise current policy 
to give much greater weight to the findings of mental health 
professionals who are treating the veteran and are necessarily 
far more knowledgeable about his or her circumstances.
    One last area of VA compensation policy we would like to 
address has the unfortunate effect of impeding many warriors 
with service-connected mental health conditions from overcoming 
disability and regarding productive life. It involves VA 
regulations that have long provided a mechanism to address a 
situation where a rating schedule would not warrant 100 percent 
rating, but the veterans are nevertheless unable to work 
because of a service-connected disability.
    The regulations permit disability ratings in certain 
instances when the veteran is found unable to obtain 
substantially gainful employment. This individual employability 
rating results in a very substantial increase in the veteran's 
compensation. But while the veterans are rated based on 
individual employability the same compensation to those with 
100 percent rating under the schedule the implication for 
employment differed drastically.
    Veterans receiving IU who engage in a substantially gainful 
occupation for a period of 12 consecutive months can lose IU 
benefits and suffer steep reduction in compensation benefits. 
For some it can mean a sudden loss of approximately $1,700 
monthly.
    Expert panels have recognized that this cash cliff may 
deter some veterans from attempting to reenter the work force 
and have recommended a restructuring of the IU benefit.
    The experience of the Social Security Administration which 
has successfully piloted a program step down approach to 
reducing benefits for beneficiaries who retain employment 
offers a helpful model.
    Recognizing unemployment often acts as an powerful tool in 
recovery and is an important aspect of community reintegration 
for this younger generation of warriors. We believe that VA 
should revise the IU benefit to foster those goals.
    In closing we emphasize that compensation for service-
connected disability is not only an earned benefit, it is 
critically important to most veterans' reintegration and 
economic empowerment, and particularly for those who are 
struggling with psychiatric disabilities of war.
    VA must work to make compensation for combat-related men- 
tal health conditions as fair as possible, and we look forward 
to working with the department and the Subcommittee to realize 
that goal.
    Thank you.
    [The prepared statement of Frank Logalbo appears on p. 47.]
    Mr. Runyan. Thank you, Mr. Logalbo.
    Mr. Jarvi, you are now recognized for 5 minutes.

                  STATEMENT OF THEODORE JARVI

    Mr. Jarvi. Thank you, Mr. Chairman for the opportunity to 
address you on behalf of NOVA and the many veterans they 
represent.
    Our clients' cases are cases where the VA schedule of 
disabilities meets the road. We have recommendations for how to 
bring the schedule in sync with the purpose Congress has 
established for it in 38 U.S.C. 1155.
    I agree with the prior speakers that that statute should be 
amended to include quality of life, but just as it stands the 
schedule for disabilities does not meet the requirements of the 
statute. That statute says VA shall adopt and apply the 
schedule of ratings based on impairment of earning capacity 
resulting from service-connected disabilities.
    The VA schedule represents the VA's attempt to provide a 
narrative description of all the things that can go wrong with 
a person with a human body in mind, and then it assigns the VA 
the responsibility of assigning a disability rating or a 
combination of ratings for each veteran with service-connected 
disability; however, as we have heard, the schedule is out of 
date and not responsive to change. It contains obsolete medical 
terms and fails to incorporate modern medical knowledge.
    Too often terms in a veteran's medical records can't be 
found in the schedule. What happens is that after VA rating 
officials read the veteran's medical records they must find a 
description in the schedule that sounds to them something like 
the veteran's condition. It is hard and results are uneven or 
wrong and that leads to appeals and lengthy delays.
    NOVA asks why should the VA even be engaged in creating a 
schedule of disabilities when there is an accepted existing 
schedule of disabilities which is consistent with current 
medical terminology and usage?
    NOVA recommends that VA use the International Code of 
Disabilities, the ICD. It is regularly updated, you won't have 
to be having this meeting again in 5 years, it is in its ninth 
edition and an updated tenth edition will be issued shortly. It 
is a great time for the VA to switch to the ICD.
    There are good reasons for adopting the ICD. There is 
precedent for using professional schedules like this. The VA 
currently uses the American Psychiatric Association's standards 
for mental disabilities, the DSH-4. General Scott's Disability 
Benefits Commission, which Congress established to review many 
aspects of VA recommended that VA use the ICD. And most 
importantly VA doctors already use the ICD in their daily work.
    Doctors won't have to be retrained in how to apply the 
ICDs. They will have to be trained to use the VA's new 
schedules.
    VA medical records will be consistent with the schedule.
    We know VA is currently engaged in a regulation rewrite 
program, but it has gone on for too many years. This work could 
be greatly simplified if VA adopted the ICDs by reference.
    NOVA's second recommendation is to reform the schedule so 
that ratings actually do compensate veterans based on loss of 
earning capacity and hopefully quality of life. There is no 
body of data which confirms or supports most of the percentages 
in the schedule. The percentages are rough estimates arrived at 
by doctors and VA rating officials who don't have training in 
evaluating lost earning capacity.
    The schedule should be changed to connect medical 
conditions to accurate assessments of impairment for earning 
capacity.
    VA should utilize experts who are trained in reviewing 
medical records and assessing the impact of disabilities on an 
earning capacity.
    VA treats assessment of employability as a medical issue, 
but it is not.
    VA asks the doctors to determine what in a veteran's 
condition renders him unemployable, but they don't have the 
training and experience for this task.
    Many vets have more than one disability. Take a combat 
Marine who was shot through the leg in Afghanistan and has 
orthopedic, neurological, and psychological conditions. What VA 
doctor will assess the reduction in this veteran's earning 
capacity? The answer is none. None are competent to make an 
overall assessment of their earnings impairment. Vocational 
experts are suited for this job. We should include vocational 
experts into the rating system.
    NOVA makes two recommendations for implementation of the 
ICDs and vocational experts. We need congressional guidance. VA 
needs congressional guidance on incorporating vocational 
experts into the VA disability system and incorporating the 
ICD.
    Second, VA must be required to move more quickly. VA must 
be forced to pick up their operational tempo. Military people 
know what that means. Veterans are dying while waiting for the 
VA to do its job.
    In my small private practice in Tempe, Arizona I have had 
more than 60 veterans die waiting for their benefits to be 
finally adjudicated. That is a well-staffed platoon. That is a 
platoon of regret and we need to make them move faster.
    Thank you.
    [The prepared statement of Theodore Jarvi appears on p. 
52.]
    Mr. Runyan. Thank you, Mr. Jarvi.
    With that we are going to begin the questions, alternating 
either side in the order that they arrived. And I will start. 
My first question is directed to Mr. Hall in talking about 
quality of life compensation.
    Can you elaborate on the DVA's views on how we can 
accurately rate disabilities and compensate for them? Because I 
know there is a lot of gray area out there and we have talked 
about the ability to work and I know Mr. Logalbo touched on 
that a little bit as well. How do you nail it down to where we 
are eliminating the guesswork from it?
    Mr. Hall. Thank you, Mr. Chairman.
    Quality of life, it does entail a great deal of questions. 
We know that other countries do utilize or include a quality of 
life component in their rating criteria. How that would be 
utilized in the current VA schedule for rating disabilities 
here is something that we are still exploring.
    I would be happy to provide further detail after we 
continue to research that particular aspect of it, but 
essentially, you know, an average impairment in work capacity 
versus average loss of earnings, they are two completely 
different things. Loss of earnings meaning the actual loss of 
wages because an individual was not paid for services rendered 
or time lost on the job. Average impairment in earning capacity 
as the law is intended we do believe also included a component 
for functional limitations in the daily activities and also a 
quality of life component; however, that has not been 
instituted or actually pushed to the point that it needs to be.
    But quality of life in itself versus functional limitations 
of daily activity, meaning non-work-related type activities, 
i.e. hobbies, things like that, that an individual would not be 
able to do or would be limited because--or by reason of their 
disability, quality of life is the enrichment, to enjoy life to 
its fullest extent would be severely impacted.
    Again, the rating schedule simply does not take that into 
consideration as Mr. Logalbo had stated from his years of 
experience working with it. My same years of experience working 
with it, the rating schedule just simply does not take that 
into account and must.
    We also know that it should not be limited to simply work-
related limitations.
    Mr. Runyan. I hear that all the time and I think the 
biggest thing as we move forward and you try to set criteria we 
have to work together to figure out how best to formulate that 
and put a piece of legislation out there, because obviously it 
is too broad, too vague as we stand and we had problems.
    And it leads right into my question with Mr. Logalbo. I 
know we get it and I just want to get it for the record so 
everybody can hear it, do most veterans understand and feel 
comfortable with the ratings they receive from both the VA and 
the DoD?
    Mr. Logalbo. We deal with that on a daily basis reaching 
out to the warriors and the veterans, even the family care 
givers in the community, and throughout that a lot of them do 
not understand a lot of the complex rating decisions or the 
information that is in there and they do continue to contact us 
continuously to make sure that one, they understand the 
disability percentage with the references and their entitlement 
to benefits.
    Mr. Runyan. And also tying into that, we deal with that a 
lot specifically on this Subcommittee with obviously being the 
Disability Assistance Subcommittee, but the inconsistency and 
difference in the ratings between the DoD and the VA, what is 
the common misnomers about all of that stuff?
    Obviously as we move forward the records don't transfer and 
these ratings aren't the same. How can we systematically step 
forward and try to smooth that road bump out?
    Mr. Logalbo. I think as a transition through the warrior--
like if you look at the MEBPB process and working with the VA 
and us working it and along with the DoD and the Committee we 
can look at those issues, you know, together, and see, you 
know, from our standpoint as a warrior, as 1 Wounded Warrior 
Project and warriors moving forward what would be the best 
solution to make that transition as smooth as possible.
    Mr. Runyan. Thank you.
    With that I recognize Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    This issue so to complicated I almost don't know where to 
start here.
    Mr. Jarvi, you have a pretty strong recommendation that we 
move forward with adopting the ICD-9, and that sounds like a 
pretty good idea, except I know that there are some concerns 
about that.
    One of the things that I think would be driving us in that 
direction is this sort of lack of uniformity or repeatability 
of the current analogous-based system and I am hearing it from 
some of the other veterans organizations that they think the 
current system has virtues that we ought to be aware of, and so 
I would like to have Mr. Logalbo address that.
    What do you think would be the advantage or disadvantage of 
moving forward with the ICD system?
    Mr. Logalbo. Again, with the ICD-9 I don't have enough--my 
overall opinion would be with the rewrite of the disability 
rating schedule is to work with the VA and the Subcommittee to 
look at, you know, some of the research and see if it would be, 
you know, a cause of the factor.
    I think the disability rating schedule rewrite from years 
of experience is moving in the right direction based on, you 
know, the committee reports, but I would be willing to work, 
you know, along side to see if it would be a viable option 
moving forward.
    Mr. McNerney. Mr. Jarvi, does the ICD-9 have pretty strong 
provisions for mental disabilities and impairments that would 
be adoptable by the VA?
    Mr. Jarvi. The ICD is primarily for physical disabilities. 
General Scott in his Disability Benefits Commission report 
recommended the use of the ICDs with a proviso that peculiarly 
military-related disabilities could be accepted from the ICD 
provision. In other words the VA doesn't have to operate them 
in toto, doesn't have to include them in toto, it can make 
special provisions for--or it should make special provisions 
for military disabilities that are unlike anything you find in 
civilian life.
    Mr. McNerney. But I mean that is sort of wavering, sort of 
undoes the reliability, and certainly we would like to see that 
with a system that we would adopt. I mean I would like to see a 
system that is reliable from State to State. If an individual 
got a rating and then went to another office and got a 
different rating I would like to see that lack of uniformity go 
away, and that would have to apply to mental disabilities as 
well, and I think that is kind of what we are trying to get at 
here.
    Mr. Hall, would you like to comment on how we could get 
there?
    Mr. Hall. Personally I am not that familiar with the ICD 
process.
    I would just simply say that while we might be able to 
adopt certain aspects of the ICD-9, it is still really to DAV, 
it still comes back to the fact that any revision or whatever 
the end product may be cannot be based solely on functional 
limitations as it is related to work.
    Mr. McNerney. Okay. The ICD-9, does it have provisions for 
quality of life or is it strictly disabilities?
    Mr. Jarvi. No, it is more mechanical, it doesn't include 
quality of life. We heartily approve of the inclusion quality 
of life, but the difficulty of measuring that is a problem.
    The courts made an important step in that direction when 
they passed the--or when they rendered the DeLuca case which 
required the VA to include considerations of pain in its 
evaluations. Up until the DeLuca case the VA was strictly 
measuring for instance restrictions in range of motion without 
any consideration of pain. Certainly pain is one of those 
quality of life issues that is critical in a VA disability 
case.
    Mr. McNerney. Okay, thank you.
    Mr. Chairman, I yield back at this point.
    Mr. Runyan. Thank you, Mr. McNerney.
    Mr. Harris.
    Mr. Harris. Thank you very much, Mr. Chairman, and thank 
the Members of the Subcommittee for allowing me to join you 
here today.
    You know, as a physician and Navy veteran I am familiar 
with many of the issues facing our veterans, but really until I 
got to Congress didn't understand firsthand how difficult some 
of the interactions with the veterans with the system are and 
certainly delays in processing in benefits and pension claims 
and having access to quality medical care, two of those that we 
do have to deal with.
    Let me ask you though, Mr. Jarvi, the ICD-9 is a diagnosis 
code, I mean it is just a medical diagnosis code. Clearly, you 
know, pain, there are pain diagnostic codes, so what you would 
end up with is a veteran who has--probably the disabled 
veteran, so probably end up having multiple ICD-9 codes that 
would have to be integrated together, but is it your testimony 
that you think that would be better than the prevailing system 
because of the uniformity between providers?
    I mean all providers know what an ICD-9 code book looks 
like and they know how to work it, is that what you are 
proposing, that that would simplify the process of classifying 
veterans?
    Mr. Jarvi. Right. The schedule of rating disabilities 
really does three things. It makes general classifications of 
disabilities, then it attempts to describe their disability, 
and then it assigns percentages.
    The ICD-9 is primarily valuable for those first two 
functions, not necessarily for the third. The third is where we 
think that the vocational experts can play an important part.
    Mr. Harris. Sure, that makes sense.
    Now for all three of you, you know, one of the reasons why 
I wanted to join the Subcommittee today is because of the 
increasing number of complaints we are getting from our 
veterans about a backlog of claims processing. In fact as I 
look through the study, and I will ask a consent panel of 
performance and accountability report, you know, it says there 
were 1.3 million claims last year and one million were handled. 
Well that means 300,000 weren't handled.
    And Mr. Jarvi, like your experience, I mean we have had 
people who in the short time that we have been dealing with 
veteran's claims who have passed away waiting for their claims 
to be adjudicated.
    And I will ask all three witnesses, is this something that 
you observe as a--because the report if the department suggests 
that, you know, don't worry things are getting better, but our 
impression is that no, they are not, they may in fact be 
getting worse because we are involved in some recent wars and 
actions overseas that increase the number of our disabled 
veterans.
    What is your impression from out in the field, is it 
getting better or worse? And Mr. Hall and Mr. Logalbo if you 
would--why don't you just give me your impression.
    Mr. Jarvi. Mr. Harris, it slowed down dramatically as the 
VA focused on Agent Orange issues for the last year. It is 
beginning to pick up again now. We have noticed a slight 
increase in tempo, but nothing dramatic at all, it is pretty 
much the same. And the unfortunate part about that is that when 
we have to decide what to devote our resources to in terms of 
advocacy we actually have to look at the veteran's age. It is a 
problem.
    Mr. Harris. Mr. Logalbo.
    Mr. Logalbo. I agree with Mr. Jarvi. The claims, the actual 
you know herbicide claims that were out there did slow down the 
process which did increase the backlog. A number of warriors 
are continuing to wait, you know, an extensive amount of time 
for the disability claims to be processed.
    Mr. Harris. And Mr. Hall.
    Mr. Hall. It is been a while since I have been in the 
field, but in touch with those of us, you know, our office is 
in the field and testifying before this Subcommittee and 
others, I don't know if it is accurate to say that it has 
slowed down or it has gained more. Certainly we all understand 
the principal of one million claims processed, but 1.3 million 
were actually received.
    With DAV being have involved with the many other aspects 
with VBA we appreciate their outreach to include us in a lot of 
the process to include the complicated process of the veteran's 
benefits management system, which is driving forward. I believe 
it is Providence, Rhode Island and Salt Lake and getting ready 
to spread out to other regional offices, which may in fact 
improve the claims process or the timeliness of the claims 
process, but between that and a lot of the other pilot projects 
that they have going on, you know, at various stations the 
Indianapolis Integration Lab, different things like that, we 
simply can't see where whether or not it is actually getting 
better but we have written some papers ourselves on it and I 
would be happy to forward those to you if you would like to 
read them.
    Mr. Harris. I would appreciate that, thank you very much.
    Thank you very much, Mr. Chairman.
    Mr. Runyan. Thank you, Mr. Harris.
    Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman, Mr. Ranking 
Member for having this very important hearing today.
    I also just want to comment, Mr. Chairman, your opening 
statements about the Wounded Warrior Program and hiring a 
staffer in your congressional office. We have had one and that 
is an excellent program, it has definitely added a lot of value 
to our congressional office having a wounded warrior soldier 
there on staff. So I commend you and Ms. Buerkle for hiring 
one.
    So my question actually relates around the ICD. I guess I 
don't believe I heard Mr. Hall say whether DAV agrees with the 
ICD recommendation that Mr. Jarvi had recommended. Is that 
something that you think--what I really like about it is the 
fact that it is updating all the time and the VA won't have to 
wait another 40 years or so to reevaluate it.
    So what is the DAV's comment on Mr. Jarvi's recommendation?
    Mr. Hall. Well, as I had stated, sir, I personally am not 
that familiar with the ICD process. DAV and others, my boss, we 
can probably get you something in more detail, but again, in 
short I don't think any system going to something that focuses 
solely on functional limitations related to work is something 
that is acceptable to anybody.
    As Mr. Jarvi had said, it is more of a mechanical process 
and does not include the quality of life component, which we 
have heard not only from myself but others here today, must be 
included in the rating schedule.
    So if the ICDs do not include that in there I can't see how 
DAV would be supporting including that. Maybe aspects of it, 
but not the overall.
    Mr. Michaud. Okay. And speaking this for all three, 
speaking about the quality of life criteria, which I can 
understand having part of that in there, but how do you deal 
with that issue because it is very subjective? And a good 
example is when they closed the air force base in Limestone, 
Maine, the ultimate decision why they closed it was the quality 
of life; however, if you ask the people that live in Russup 
County they love the quality of life, so it is very subjective.
    So how do you build that into a system and have it be 
considered fair on that--as to all three of you--that question?
    Mr. Hall. Well again, we don't have the exact how to. We 
know that other countries do it. Whether it is a rating 
formulated, something that is added to a baseline of 
disability, it is added to it, I know that we have special 
monthly compensation above and beyond a base rating, but that 
is reserved for those individuals with things such as 
amputations or loss of use of an extremity or blindness or 
something of that nature.
    Including it in there, we know that it must be included in 
there because again it can't simply be related to how it 
affects a person's ability to work because it is going to 
disincentivize individuals from actually going to work.
    Okay, when an individual has to contemplate and negotiate 
these steps over here just to simply get up here where you or I 
wouldn't normally have to do that that is a quality of life 
issue. They have to take into account every single step that we 
again common or routine activities we wouldn't think of.
    So again, while we might not have the exact answer for it, 
we know that it must be included in there, and we are happy to 
work with the Subcommittee and move that particular issue 
forward.
    Mr. Logalbo. Thank you, Mr. Chairman.
    On the quality of life issue itself if you look at the 
foundation of Wounded Warrior Project as economic empowerment, 
our organization has 16 different programs. One of the 
components is our service program that allows warriors to 
actually solidify that single part, that compensation part, and 
then we have other programs to make sure and insure that the 
warrior and our organization is the most well-adjusted and 
successful generation of veterans that we have. And basically 
with the Wounded Warrior Project is, it is, you know, our point 
is to do a holistic approach with our 16 programs and make sure 
that each portion of the warrior is taken care of from 
transition from military to civilian life to insure that they 
are most successful.
    Mr. Jarvi. I wasn't necessarily suggesting that quality of 
life should not be included, we would like to see it included. 
We don't know necessarily how it will be measured, but what the 
purpose of our recommendation regarding the ICDs is, is that it 
enhances a smooth transition from the medical records to a VA 
rating. It is a starting point, it is an initial way for raters 
to understand what is going on in the veteran's medical case.
    Mr. Runyan. Thank you, Mr. Michaud.
    Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman and Ranking Member for 
holding this. Thank you for being informative as our panel, 
this is a challenging subject.
    I would just like to state again thank you to the Members 
for their hiring of veterans.
    I would also like to make note the chairman has left, but 
Chairman Miller, myself, and Congresswoman Fudge kind of led a 
little initiative, tonight you will see a lot of Members 
bringing guests to the State of the Union tonight that are Iraq 
veterans to say a very public thank you. I have Mike McLaughlin 
from Mankato, Minnesota here whose father is a combat-wounded 
Vietnam veteran. Mike did two tours in Iraq of being there, so 
for all of us to say thank you for that and thank you for 
continuing to put the emphasis on this.
    You are exactly right, this is a very, very subjective 
situation, but it is one that is paramount to us is, is getting 
this right.
    The claims backlog troubled all of us for a long time. I 
think that all of us understand though the ultimate goal here 
is an accurate claim. Just getting it done we have seen is not 
good enough, just getting it done on time if it is not 
accurate.
    And I would also mention one thing that is very challenging 
about this, I think the chairman is exactly right when he asked 
you, Mr. Logalbo, you know, if you hear people complaining 
about the process, I would be interested, has anybody ever 
complained to you that they have too high of a rating?
    Mr. Logalbo. With the warriors that we serve they are 
really motivated and to be successful, so their own premise, a 
lot of the warriors that we are serving is to make sure that 
they get back into society.
    Mr. Walz. That is exactly the point. I am trying to figure 
this out. And I think this goes back, you also mentioned, and I 
am interested about this, the restructuring of the IU. How 
would we do that? Do you have some ideas on that?
    Mr. Logalbo. That is a process we were--basically is we use 
Social Security as a guide, but we would be more than willing 
to work with the Subcommittee and the Committee and also the 
Department of Affairs looking at the best way to restructure it 
so it is the best suitable for the warrior to get back into--
adjust into the economy.
    Mr. Walz. Is it safe to say this is similar to our health 
care cost where we have 15 percent of the population accounting 
for 80 percent of the cost in the last, you know, 36 months of 
life or whatever, is this a case of the IU is eating up a 
bigger and bigger share of the disabilities?
    Mr. Logalbo. That I couldn't answer.
    Mr. Walz. Okay.
    Mr. Logalbo. I don't know.
    Mr. Walz. I just see it start to happen. Because I think 
you are right, I think we have to get structured at this in 
trying to figure it out. We want them to be accurate, we want 
to get people back working again, we want to be fair in how we 
do it, and I do believe this quality of life issue, this is one 
I really struggle with of how do we get to that.
    I have to be very honest, and I am looking forward to our 
next panel helping me out with this, I tend to think I am 
leaning the way all of you are, a structure like the ICD or 
something, the AMA is going on, it is very difficult.
    I guess I would throw this out there to you. I know we are 
always balancing this issue of doing right by veterans, doing 
it in an efficient manner, and the costs.
    I will not apologize for the added claimed by Agent Orange. 
That was something we advocated for, that cluster of folks in 
southeast Minnesota who brought the issue of Parkinson's 
forward, I am very proud of the work we did for them. If I have 
my way we are going to make VA busier with blue water, but that 
will be for another time.
    With that being said, is it time to think about allowing 
individual physician assessment, that treating physician rule, 
or are we going end up with a situation--I know this is also 
hard--how do you keep up then with the pace? It is not as if VA 
denies claims to save money, they are trying to get them 
accurate. I trust physicians to do this right, but are we going 
to then be criticized for look at all these claims that you 
have approved and the cost it has been and we have no control 
over that physician who did it? Is there a lucrative business 
approving claims then out there by treating physicians?
    I just ask all of you to if you could give me your candid 
assessment the way you see that.
    Mr. Hall. Well, let me ask you do you think with everything 
surrounding the backlog of claims, which I have been here 
before you before, it is an important subject, but with the 
backlog of claims do you think that it is possible that going 
to a system that is based solely on how it affects an 
individual's work is going to speed the process up? Do you 
think that might be an underlining factor?
    Mr. Walz. No. Yeah.
    Mr. Hall. I mean it is something that we certainly think 
about because to us it is illogical. It is illogical to omit to 
as they had stated in the--I believe it was the ACDC back in 
October to--or the Veterans' Disability Commission, to reject 
the mental rating disorders criteria and to eliminate social 
impairment from the rating schedule itself, that is not 
feasible. Again, we are----
    Mr. Walz. This is where I struggle, because I think we 
could speed the system, I think we could become more efficient, 
but as I said, again the goal is, is the fairness to the 
veteran, and there is the quality of life issues, there is in 
each and every one of these cases is unique depending on where 
the ability of the skills and the ability to get back are for 
each of these folks, so I really struggle with this.
    Mr. Hall. Yeah, I mean one good point with that would be 
Congress has worked diligently with the employment bills, the 
legislation that has been enacted, we want to put veterans to 
work, we want to encourage them and incentivize employers to 
hire veterans, that is on the front end.
    On the back end this could head down a path that would 
actually be contrary to that to say we are pushing you to go 
back to work, but if you go back to work you are not going to 
receive disability compensation.
    Now that may be a very raw way to look at it, but again, if 
you look at the reports coming out of those commissions, which 
we as we understand it, because we have not been fully included 
into the open and transparent process, VSOs, it has been closed 
off to us, we want to be engaged more indepth with that, but I 
agree with you.
    Mr. Walz. My time is just about it.
    Individual physician assessment?
    Mr. Jarvi. If I may address your questions about the 
treating physician rule.
    Mr. Walz. Yeah.
    Mr. Jarvi. It is a bad rule because veterans who want to 
challenge their ratings when they think they have been 
improperly rated generally the only person they have to go to 
is their treating physician. Their option is to go to a 
forensic physician whose report may cost thousands of dollars.
    The veteran really needs to be able to introduce the 
evidence from their own treating physicians. It is an important 
change and I hope the Committee addresses it.
    Mr. Walz. Thank you Mr. Chairman, I appreciate it.
    Mr. Runyan. Thank you, Mr. Walz. I was just talking to the 
Ranking Member about how we move forward and how we improve 
this process. The comments we heard from Mr. Hall, and his 
comments about Mr. Jarvi with the ICD things, I think the 
biggest thing is we have to find a framework that works for 
most of our stuff and everyone make these pieces fit together.
    Dr. Harris commented that the medical world has their own 
language they are used to, the VA has their own world and a lot 
of the things they put on the medical staff, so we have to find 
this common ground so we are not always trying to merge two 
different volumes of a book that says a lot of similar things. 
I think that the quality of life issue is going to be a 
challenge, because every single one of those determinations is 
different. Everybody has a different--and I know this from my 
personal experience--everybody has a different pain threshold, 
a different way they deal with those injuries and such.
    So we are not going to solve it in this hearing, I just 
wanted to raise the issue so we can take an honest look at it 
and attempt to make this fair for everybody. I think at the end 
of the day it will happen.
    So with that being said I want to thank you gentlemen on 
behalf of the Subcommittee for your testimony and look forward 
to working with you on these matters, because obviously we have 
a long way to go and it is the mission of this Committee to 
take care of the ones who sacrificed everything for everything 
we have.
    So thank you and you are excused now.
    At this time I would like to call the next panel up to the 
table.
    At this time I welcome Mr. Tom Murphy, Director of the 
Compensation Service for the Veterans Benefits Administration, 
U.S. Department of Veterans Affairs. Next we will hear from Mr. 
John Campbell, the Deputy Assistant Secretary of Defense for 
the Wounded Warrior Care & Transition Policy, U.S. Department 
of Defense. He is accompanied by Dr. Jack Smith, Acting Deputy 
Assistant Secretary for Clinical and Program Policy in the 
Office of the Assistant Secretary of Defense for Health 
Affairs.
    We appreciate your attendance today and your complete 
written statements will be entered into the hearing record.
    With that being said, Mr. Murphy, you are now recognized 
for 5 minutes.

   STATEMENTS OF THOMAS J. MURPHY, DIRECTOR OF COMPENSATION 
 SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; JOHN R. CAMPBELL, DEPUTY ASSISTANT SECRETARY 
  OF DEFENSE, WOUNDED WARRIOR CARE & TRANSITION POLICY, U.S. 
 DEPARTMENT OF DEFENSE; ACCOMPANIED BY DR. JACK SMITH, ACTING 
DEPUTY ASSISTANT SECRETARY FOR CLINICAL AND PROGRAM POLICY FOR 
  HEALTH AFFAIRS, U.S. DEPARTMENT OF DEFENSE; COLONEL DANIEL 
CASSIDY, DEPUTY COMMANDER OF THE U.S. ARMY PHYSICAL DISABILITY 
AGENCY; ROBERT POWERS, SECRETARY OF THE NAVY COUNCIL OF REVIEW 
BOARDS, U.S. DEPARTMENT OF DEFENSE; CAPTAIN FRANK CARLSON, MC, 
     PHYSICAL EVALUATION BOARD, U.S. DEPARTMENT OF DEFENSE

                 STATEMENT OF THOMAS J. MURPHY

    Mr. Murphy. Thank you, Mr. Chairman.
    Chairman Runyan, Ranking Member McNerney, and Members of 
the Subcommittee, thank you for the opportunity to testify on 
the state of the VA Disability Rating Schedule.
    The VASRD is the engine which VA is able to provide 
veterans with compensation for diseases and injuries they incur 
while serving our Nation.
    Section 1155 of Title 38 U.S.C., and the statute's 
implementing regulation 38 CFR 4.1, require VA to assign 
veterans who are service-connected with percentage ratings that 
represent the average impairment in earning capacity resulting 
from diseases and injuries that were incurred or aggravated 
during active military service.
    Section 1155 also provides that the schedule be constructed 
to provide ten grades of disability for payments of 
compensation with increments of 10 to the total 100 percent. 
Congress sets the associated dollar amount under 38 U.S.C. 
1144.
    The current rating schedule has three basic concepts 
introduced in the 1945 schedule. First, compensation based on 
average loss earnings capacity. Second, use of disability 
evaluations and associated compensation ranges. And third, 
disabilities organized into discrete body systems.
    The current rating schedule differs from the 1945 rating 
schedule due to periodic updates to individual body systems 
throughout the years and now contains diagnostic codes for 15 
body systems.
    Various studies and commissions since 2007 have made many 
recommendations relating to VA's Disability Compensation 
Program.
    For example, the Institute of Medicine in its 2007 report 
to the VDBC recommended that VA immediately update the current 
rating schedule, devise a system for keeping the schedule up-
to-date, and conduct research on the ability of the rating 
schedule to predict actual loss in earnings.
    In 2007 the VDBC recommended that priority be given to the 
mental disorders section of the rating schedule to include 
PTSD, TBI, and other mental disorders. It further recommended 
that VA address the other body systems until the rating 
schedule is comprehensively revised.
    The President's Commission on Care for America's Returning 
Wounded Warriors in its 2007 report recommended that the rating 
schedule focus on veterans ability to function directly instead 
of inferring it from physical impairments.
    A Center for Naval Analyses study determined that VA 
compensation, on average, is generally appropriate relative to 
earned income losses. The study found that veterans with 
physical disabilities are properly compensated while those with 
mental disabilities may be under-compensated.
    In 2009 VA began a comprehensive revision and update of all 
15 body systems contained in the rating schedule.
    VBA implemented a detailed project management plan that 
will result in a complete modernization of the rating schedule 
by 2016. The plan calls for the application of current medical 
science and econometric earnings loss data consistent with our 
charge in 38 U.S.C. 1155.
    Each body system starts with an initial public forum 
intended to solicit updated medical information from 
governmental and private sector subject-matter experts, as well 
as input on needed improvements in the rating schedule from the 
public and interested stakeholders, such as veteran service 
organizations. This is accomplished in the most transparent 
manner possible.
    As VA convened work groups of subject matter experts for 
each body system a common theme emerged, there is a need for a 
shift in focus in the rating criteria from a symptomatology-
based system to one which focuses on functional impairment.
    Subject-matter experts have concluded that while symptoms 
determine diagnosis, the translation of symptoms into 
functional impairments and overall disability is the indicator 
of impairment in earning capacity.
    Another important aspect of the review process for each 
system is the execution of an econometric earnings loss study. 
Each study will provide the data necessary to determine whether 
current compensation rating levels accurately reflect the 
average impairment in earnings capacity for specific conditions 
in the current rating schedule.
    VA is partnering with the George Washington University in 
connection with five body systems to analyze the income and 
benefits data. VA may solicit proposals from other entities to 
carry out the studies for the remaining body systems.
    Currently proposed rules to revise three body systems are 
undergoing final review within VA. Drafts of proposed rules for 
ten more body systems are underway, and all will incorporate 
the results of the earning loss studies.
    This week, public forums will be completed for the four 
remaining body systems.
    We at VA recognize the importance of insuring that the 
VASRD meets the needs of veterans in the 21st century. Through 
a successful modernization and revision of the rating schedule 
VA is anticipating and proactively preparing for the needs of 
Veterans and their families.
    [The prepared statement of Thomas Murphy appears on p. 57.]
    Mr. Runyan. Thank you, Mr. Murphy.
    Mr. Campbell, you are now recognized for your statement.

                 STATEMENT OF JOHN R. CAMPBELL

    Mr. Campbell. Thank you, Mr. Chairman.
    Good morning Ranking Member McNerney and Members of the 
Subcommittee, thank you for the opportunity to be here this 
morning to discuss the Department of Veterans Affairs Schedule 
for Rating Disabilities known as VASRD as it applies to the 
Department of Defense.
    I am pleased to be on a panel with my colleague from VA's 
Veterans Benefits Administration, Mr. Thomas Murphy. I am also 
joined this morning by Dr. Jack Smith from DoD's Health 
Affairs, Colonel Daniel Cassidy from the Army, Captain Frank 
Carlson, and Robert Powers from the Navy.
    DoD uses the disability evaluation system to determine if a 
servicemember is fit for continued military service, and if 
found unfit servicemembers are retired or separated with 
disability benefits for service-connected injuries, illness, or 
diseases.
    As you know, in order to achieve more consistent disability 
ratings assigned by the military departments and the Department 
of Veterans Affairs the national defense authorization Act of 
2008 required the military departments to utilize the VASRD for 
making determinations of disability ratings without deviating 
from that schedule.
    VA disability ratings are based primarily on the degree of 
impairment by injuries incurred or aggravated while on active 
duty while the VASRD percentage ratings represent the average 
impairment and earning capacity in civil occupations.
    Military departments use the VASRD disability rating to 
determine whether an unfit servicemember will be retired or 
separated with disability benefits.
    As you can see the two departments use the VASRD for 
different purposes and there are some instances where VASRD 
ratings are not relevant to DoD's requirements.
    Sleep apnea, for example, discussed in detail in my written 
statement is a perfect one where exceptions to the strict 
application of the VASRD should be allowed in certain 
circumstances.
    In May 2011 VA Secretary Shinseki proposed draft 
legislation to the Congress entitled the Veterans Benefits 
Programs Improvement Act 2011 in which he requested that period 
for reevaluating former servicemembers with traumatic mental 
health conditions be extended from 6 months to 18 months 
following their release from active service.
    Reevaluating servicemembers within 6 months following the 
separation has a significant impact on limited behavioral 
health resources and may be of mental benefit in determining a 
change in those mental health conditions.
    We support the proposed legislation as an initial step 
toward standardizing the requirement for the military 
departments to reevaluate former servicemembers with traumatic 
mental health conditions, specifically post-traumatic stress 
disorder who are placed on temporary disability retirement as 
the same timeframe established for reevaluating other medical 
conditions.
    Ultimately the DoD would prefer to eliminate mandatory 
reevaluation for all traumatic mental health conditions.
    Our recommendation is to treat these conditions like all 
others, that is to set reexamination requirements only when 
necessary and to rate the condition at its observed level of 
severity rather than at a 50 percent minimum.
    While the department recognizes that the VA's secretary 
ultimate responsibility and decision of authority for the 
content of the VASRD, the department believes it should have 
more developmental input given the direct connection between 
the VASRD ratings and the decision to place servicemembers on 
medical retirement lists with annuities, benefits, and health 
care.
    Moreover we appreciate VA's outreach to include DoD in the 
body system rating update review that began last year and the 
service's participation through their subject matter experts.
    DoD plans to continue to participate in VA's public 
meetings as DoD and VA leadership continue discussing how to 
strengthen DoD's role in the VASRD rewrite process.
    We look forward to finalizing a memorandum of understanding 
with the VA which will formalize DoD's active voice in the 
future development and modernization of the VASRD.
    Mr. Chairman, this concludes my opening statement, I 
appreciate the opportunity to be with you today and look 
forward to any questions that you or other Members of the 
Subcommittee have.
    Thank you.
    [The prepared statement of John Campbell appears on p. 60.]
    Mr. Runyan. Thank you, Mr. Campbell.
    My first question is, Mr. Murphy, I know you witnessed what 
Mr. Hall had to say on the last panel, and quality of life is a 
huge part of what he deals with in his organization, whether we 
are talking about PTSD and social anxiety and people's 
inability and through that whether, they are driven to give 
back through charity work However, through PTSD they are having 
social anxiety or are not able to kind of unwind a little bit 
because of something that was created.
    Would the VA agree that there is a need to take a look at 
that type of thing?
    Mr. Murphy. The VA has to function within its statutory 
limitation, which is we are limited to providing compensation 
for average impairment of earnings.
    So along those lines any compensation for quality of life 
would be beyond the authority that we have to compensate 
veterans.
    Mr. Runyan. Okay. There has been recommendations that the 
entire ratings schedule be revised. Is the VA considering that 
at all?
    Mr. Murphy. The VA is in the middle of a program of an 
entire look top to bottom of the rating schedule. In fact as of 
this week the last of the 15 body systems is currently under 
revision.
    Mr. Runyan. And I know our timeline has been dragging quite 
behind on a lot of that stuff. Is there any finality in the 
near future on any of that?
    Mr. Murphy. Yes. Three of the regulations are in the final 
draft mode, one of those is sitting with our Office of General 
Counsel, ten of them are in draft rule making phase, and the 
additional four are just entering that phase as of this week 
with the VASRD form going on in New York City.
    Mr. Runyan. Okay.
    Mr. Murphy. We realize that this is a very important 
process that has a significant impact on the veterans of this 
Nation, but on the other hand this is a process that needs to 
be done right, and a little extra time now can save us a 
significant amount of time in making sure we do it right for 
veterans the first time.
    Mr. Runyan. In talking, other conversations we have had in 
dealing with--and it came up in the last panel too--the 
veterans lack of understanding of the process. Is there any 
attempt at the VA to address the lack of education and how the 
veteran understands the rating system?
    Because I think that is one of the big disconnects, when 
people have the information they understand the process they 
are a lot more comfortable with it. I think that the education 
aspect of it and how to move forward is important.
    Now are we doing that early on or are we doing it after 
there is a problem and everybody is frustrated and at that the 
point a lot of times it is hard to break that barrier down?
    Mr. Murphy. VA is doing some significant work to fix that 
very issue. It is in VA's best interest and the best interest 
of the veteran for everybody to understand exactly what is 
going on in this process.
    So there is a couple of things that are happening right 
now. We have introduced what is called a DBQ, disability 
benefits questionnaire. Standardized evaluation, medical 
evaluation, 81 of them currently in use by all VHA 
practitioners. We are in the process of releasing those to the 
general public.
    We talked earlier, the earlier panel discussed some 
comments about a veteran not being able to understand and have 
input into the system. The DBQ evaluation is the exact same 
evaluation that you would receive, the exact same form that you 
would receive inside provided by a VHA practitioner, and a 
veteran will very shortly be able to take that to his private 
treating physician and submit that to VA for evidence to rate 
their claim.
    On top of that we have one of the initiatives in place that 
Mr. Hall was talking about on the previous panel, is the 
simplified notification process. We realize that our 
notification process has a lot of legal explanation in there 
and we are in a pilot phase right now simplifying that, taking 
that into some plain English and explaining it to the veteran 
in a way that you don't need to have a legal degree to 
interpret.
    Mr. Runyan. And then Mr. Campbell, and I would like Mr. 
Murphy to respond also, but starting with Mr. Campbell.
    In talking about the different ratings that we get from the 
DoD and the VA on the same thing, do you find any common areas 
that we can work on there to--like I said, I think in the 
previous one, to kind of eliminate that bump in the system?
    Mr. Campbell. We use the VA Disability Rating Schedule to 
ascertain whether a servicemember is fit or unfit for duty and 
their condition whether they stay in the service or don't say 
in the service, and then in the disability evaluation system we 
utilize that to help servicemembers move forward in the system.
    Mr. Runyan. But it almost seems like you are using the same 
set of rules, and obviously we know how this works, there are 
two different results out of them. Do we need to have a better 
integration maybe and talking from the DoD to the VA to kind of 
smooth that out so this process isn't reinvented as we 
transition?
    Mr. Campbell. I don't believe that the ratings themselves 
are that different. There are some inconsistencies, there are 
some peculiarities where our understanding of a rating is 
different.
    Like sleep apnea, as I mentioned in my oral statement, 
there is a difference there, but I think in most cases they are 
pretty consistent.
    Mr. Runyan. Would you agree with that statement, Mr. 
Murphy?
    Mr. Murphy. Yes, I would. Completely agree with it. Sleep 
apnea being a prime example, we rate it based on the symptoms 
displayed by the veteran and then the Department of Defense 
applies that inside their world to constitute the rating that 
they use for continued service.
    Mr. Runyan. Well, I bring that up because that question 
arises all the time. It is something that I think we should 
probably dig in a little deeper around in this Subcommittee 
because I think it is a little more frequent than you guys are 
aware of and I think that is part of the issue, we go back to 
the education aspect, going both ways down that street.
    So I thank you and recognize Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    Mr. Murphy, thank you for appearing before the committee 
today again.
    Does the VA intend to publish the proposed VASRD 
provisions, and if so when will that happen?
    Mr. Murphy. Yes, sir, we will publish each of the body 
systems as they are completed through their draft process 
inside of VA, then we will follow under the Administrative 
Procedures Act, we will publish them in the Federal Register as 
a draft, receive comments from the public, rewrite, if the 
comments are extensive and any rewriting is extensive then 
those drafts will be republished before a final is published 
and put into effect.
    So there is a significant comment period to come on 
anybody's system before anything is put into a final form.
    Mr. McNerney. One of my questions is the significance of 
the standards like the VASRD versus the training, and it seems 
to me that they are both pretty relevant and pretty important.
    I am sure that your specialists are very well trained, but 
the variance between outcomes is a big problem. Do you think it 
is due to the training or do you think it is due to the sort of 
subjective nature of the standards?
    Mr. Murphy. I think that is a much more complex question 
than we give it credit for, and training is absolutely a part 
of it. You have approximately 3,700 raters spread across 50 
plus offices across the country and our challenge in the 
training world is how to get each one of them to read a single 
piece of evidence and come to the identical conclusion every 
single time. And the way we are attacking that is through as 
you heard earlier, the introduction of Veterans Benefits 
Management System by introduction through the disability 
benefits questionnaire. And the answer is we attack that by 
standardizing the process as best we can and putting it into a 
uniform format which leaves the individual to come to the same 
conclusion given the same set of evidence.
    We think that the disability benefits questionnaire is 
going to give us significantly strides forward in obtaining the 
quality goals that we have in front of us.
    Mr. McNerney. I hate to jump around but I only have 5 
minutes.
    One of the issues that seems to be coming up today is the 
disparity between physical disabilities and mental disabilities 
and the difference in compensation between those two sort of 
categories, and I understand that they are different in terms 
of how to evaluation and the difficulty and so on.
    What do you think the barriers are to adopting standards 
for mental disabilities compensation?
    Mr. Murphy. Mr. McNerney, that is the very reason we are 
doing the revision of the VASRD, to eliminate the 
recommendations that were coming from three or four different 
Committees in here, and we are going through it to eliminate 
the variances that we are talking about and to identify a 
process that is a better representative of the disabilities 
that veterans are suffering.
    Mr. McNerney. What are the barriers?
    Mr. Murphy. I don't think that we have barriers sitting in 
front of us. We have gathered the best medical professionals we 
can both inside and outside the VA, so private sector and 
inside the government, and we are significantly down the road 
on the draft rule making process of that.
    So the identification of what are those barriers will come 
with the publishing of the draft regulation in the near future.
    Mr. McNerney. But you yourself stated that physical 
disabilities are considered to be compensated appropriately 
where a mental disabilities are not. So we still have a long 
ways to go then in terms of developing standards as I would 
understand it.
    Mr. Murphy. I quoted one of the reports from the Center for 
Naval Analysis that they considered. Center for Naval Analysis 
considered physical disabilities to be adequately compensated 
and that mental disabilities to be undercompensated, and with 
that piece of information when we go into the draft rule making 
process it guides us where we want to go with the medical 
advisors and practitioners that we have to insure that we are 
adequately compensating for the disabilities that are suffered 
by veterans.
    Mr. McNerney. Mr. Campbell, the Veterans' Disability 
Benefits Commission study found that there were variances in 
the way that DoD rates disabilities in comparison to the way 
the VA rates disabilities. As you probably know the VA also had 
its own issues with variances between raters and regional 
offices.
    What steps would you recommend to gain more consistency in 
rating between the VA and the DoD?
    Mr. Campbell. Mr. McNerney, I wanted to correct a statement 
I made earlier, I didn't really understand the question.
    In terms of the integrated disability evaluation system the 
DoD uses the VA disability ratings to insure greater 
consistency in the outcomes for servicemen and women. That 
process that we have in place does insure a greater consistency 
that the ratings were the same.
    Mr. McNerney. Within the DoD.
    Mr. Campbell. Within the DoD.
    Mr. McNerney. What about the variances between DoD and VA?
    Mr. Campbell. Well, within this particular system there 
should not be any, you know, any differences.
    Mr. Murphy. Are we referring to the differences between, 
for example, a veteran may come to VA and get a rating of 70 
percent, but through the IDEA process would get a percentage 
that would be lower than that based on the fact that the DoD 
rates on unfitting conditions as opposed to VA looking at 
assessment of the total veteran? Is that the differences in 
rating that you are referring to?
    Mr. McNerney. Yes.
    Mr. Campbell. Oh. Well we just rate the condition found 
unfitting for the servicemember, the VA rates for all 
conditions, unfitting and anything else that the VA doctors 
determine as a condition to be rated.
    Mr. McNerney. How do you both feel about the ICD, 
International Classification of Diseases and VA adopting 
something, again at least for the physical side?
    Mr. Murphy. I would recommend that we not limit our self to 
just the ICD-9 codes. It is an option as opposed to the option.
    And the reason I say that is, is it is something that is 
being considered under the revision for the VASRD, we are also 
looking at the AMA guides and we are looking at the World 
Health Organizations International Classifications on 
Functioning, and the point being that we are so early in the 
draft process here that there are no options that are off the 
table and ICD-9 codes being adopted as the standard is 
certainly in the discussion.
    Mr. McNerney. Thank you, I am going to yield back here.
    Mr. Runyan. Thank you, Mr. McNerney.
    Mr. Walz.
    I dropped the ball on the first round, he is a visiting 
Member, so.
    Mr. Walz. Thank you very much.
    Well again, and I have to congratulate you, Mr. Chairman, 
you did what I have been asking for for a long time, we have VA 
and DoD at the same table and that is something. As a seamless 
transition guy I can't tell you, but I do in all seriousness 
thank both of you. I can see the effort that is going here, 
this is a step in the right direction, it is a very complex 
issue as, you know, the Chairman and the Ranking Member have 
pointed out, but I appreciate you helping us try and get there.
    I just have a couple of things on this. And I still keep 
coming back to it, and I am glad that Dr. Harris is here, 
because this issue of the science and the art of medicine as it 
plays into this is a really difficult one to navigate.
    The difficulty I know in DoD is you are determining fitness 
for war fighting duty, VA is taking care of our veterans, and 
so I mean many times I preach that gospel of seamless 
transition, I do understand that your core missions are 
different, even though that that main focus is on that veteran, 
so thank you for being so candid with us, thanks for trying to 
help us understand a way we can do that.
    I guess maybe to you, Mr. Campbell, just asking this, 
during that PEB, and I follow up a little bit on Mr. McNerney's 
point on, who advocates for the veterans during a PEB or for 
that warrior? Who is there to advocate for them if you will?
    Because that is a pretty important time, right, when they 
are in an evaluation board there are medical things.
    I am just asking from a standpoint of I think of this, and 
maybe I am approaching this wrong, I had in my own personal 
time I had 20 years of service right after September 11th, 
wanted to re-up, had to do a medical review board, deemed I 
couldn't hear, imagine that 20 years of artillery so I couldn't 
hear and that was deemed up fit. So I went back, got a civilian 
doctor, did some work, got that done, came back and was allowed 
to re-up.
    I was advocating for myself to stay in to do service and 
all of that, who is advocating for these guys on when they are 
hurt?
    Mr. Campbell. I brought some subject-matter experts with me 
who actually were on the ground.
    Mr. Walz. That will be helpful.
    Mr. Campbell. And I ask Colonel Cassidy if he would like to 
respond to the question.
    Colonel Cassidy. Thank you, sir.
    As far as advocates during the medical evaluation board and 
physical evaluation board process we have a number of 
advocates. One that you are most familiar with is the physical 
evaluation board liaison officer are kind of counselors and 
that kind of shepard the soldier or servicemember through the 
process.
    I think your direct question is who assists as far as when 
there are issues with the fitness determination or ratings.
    We have an Office of Soldier Counsel that is subordinate to 
our medical department that are lawyers for the most part that 
are trained in both--they have gone to the VA school for 
ratings, and attend our training courses so they are absolutely 
familiar with the VA schedule for rating and our fitness 
standards so they would be direct advocates that would go 
before the physical evaluation board to argue for a soldier.
    And then recently within the last 2 years we have put a 
medical evaluation board counsel down at each of the MTFs to 
assist the soldiers with understanding their medical evaluation 
boards and helping them through that appeal process.
    Mr. Walz. This kind of goes to the heart of what the 
chairman has been saying about understanding the process, 
especially important here when people are looking at careers 
and things that can go forward about those wanting to serve as 
we heard from the previous panel talking about trying to get it 
there, so these are advocates while they are part of DoD, but 
they are advocates for those veterans, that is their specific 
purpose to make sure you are that all their rights and 
responsibilities and things that that soldier needs and has are 
being advocated for.
    Colonel Cassidy. Sir, with the office of soldier counsel 
that is absolutely correct. They similar to a defense lawyer.
    Mr. Walz. Yeah, I was going say, they are a public defender 
or whatever. Is that adequate, is there a need no outside 
counsel with those or does that really make it hard?
    Colonel Cassidy. The soldiers are not just limited to the 
office of soldier counsel, they can bring in private attorneys, 
we have a number of pro bono attorneys that represent soldiers 
or they can bring in any representative they choose. We have 
had disabled American vets, American Legion have come to 
represent soldiers. So it is not limited to just those.
    Mr. Walz. Okay, I appreciate that. I am running out of time 
I want to throw a quick one at you, Mr. Murphy.
    I know we are in a transition stage here, the paperless 
system at Winston Salem, the only problem I am having and I am 
totally cognizant and empathetic to you on this, once you go 
paperless there is no transition between the papered world and 
the paperless world, so when claims end up down there we can't 
get them back if there is problems; is that correct?
    Your people down there have been fabulous on helping us 
with some problems as we have called in, the problem for the 
veteran is, is that I know you are moving in the right 
direction, I know moving to that paperless system is going to 
take a little while, but the lack of communication--are we 
addressing that or is this a growing pain that we are going 
live with?
    Mr. Murphy. You are talking about the BDD----
    Mr. Walz. Yes.
    Mr. Murphy [continuing]. Claims that are being processed in 
Winston Salem in the individual environment?
    Okay. The electronic record is the system of record, that 
is the official I want to see it, that is it, that is the 
electronic record. The documents that are retained after that 
are literally stored in big boxes in a gigantic room.
    Mr. Walz. Yeah.
    Mr. Murphy. In terms of from a legal standpoint the source 
document just became the electronic world that you are seeing 
as a result of the BDD.
    Mr. Walz. Okay. And this growing pain of moving back and 
forth, it left St. Paul, went down there, that is--I mean they 
are going a great job of troubleshooting these, but I am just 
afraid again that burden of backlog of claims of 
troubleshooting for congressional inquires is a very 
inefficient way to go about business, but----
    Mr. Murphy. It is, but it also is an avenue for veterans 
that are not taken care of adequately through the system to 
address their concerns and to make things right for them. So it 
is a necessary process.
    Mr. Walz. I appreciate it. Thank you, Mr. Chairman.
    Mr. Runyan. Thank you, Mr. Walz.
    Mr. Harris.
    Mr. Harris. Thank you, Mr. Chairman, and again thanks to 
the Committee for letting me sit in, because I do want to 
scratch the surface of this a little bit.
    Mr. Murphy, in the 2011 Performance and Accountability 
report, you know, there is a lot of talk about performance 
result, but let me ask you, with regards to these claims are 
you surveying continuously the claimants for satisfaction 
specifically with the process?
    Mr. Murphy. We are talking about the veteran's satisfaction 
with that process as opposed to the quality of the process?
    Mr. Harris. Yeah, quality. I just want, you know, if you're 
people-centric you have to have the perception that you are 
doing a good job.
    And again, you know, for instance there are these figures 
that I know the survey says well, 64 percent of veterans are 
satisfied with their in-patient care, 55 out-patient care, 97 
percent with the appearance of veteran cemeteries.
    Mr. Murphy. Yeah.
    Mr. Harris. I got to tell you, you know, by that time it is 
a little too late. You have to have done everything right up 
until that time.
    Mr. Murphy. Absolutely.
    Mr. Harris. So do you continuously survey for satisfaction 
on the veteran's side with regards to claims processing?
    Mr. Murphy. We are, yes.
    Mr. Harris. And what is the results?
    Mr. Murphy. And we are expanding that process now.
    Mr. Harris. What is the result and what----
    Mr. Murphy. I am not able to talk to the results of that, 
but let me give you a little bit of background ream quick on 
what we are doing.
    We hired J.D. Powers & Associates because of their 
reputation for quality and we want a straight answer, solid 
feedback to us on where we are doing wrong.
    We are expanding it to look into multiple areas. We started 
in the benefits assistance service specifically around phone 
centers, public contact centers, and interaction points with 
the veterans.
    So we recognize that it is there, we are expanding where we 
are using their services to tell us about veteran satisfaction, 
and I am sorry, sir, but I am unable to give you the numbers on 
that today.
    Mr. Harris. Okay. And if they come available if you would 
share them I would appreciate that.
    Hopefully again we are going take some active measures. 
Because again, I am here because we are getting so many 
complaints that things are taking long.
    With regards to the 1.3 million figure for claims, are 
those new claims filed or that is just existing claims----
    Mr. Murphy. You mean like in original claims?
    Mr. Harris. Yes. Where is the 1.3 million, that figure that 
comes in the report?
    Mr. Murphy. Depending on the time of year that you are 
looking 20 to 30 percent are new original never been seen 
before claims. The remainder are claims for increase and other 
types of changes to existing claims.
    Mr. Harris. Okay. So when the figure is that 1.3 million 
claims are filed, 1 million processed, what happens to those 
other 300,000? I mean do they just--we haven't gotten around to 
them or is that where the backlog is occurring?
    Mr. Murphy. No, the backlog is all across is board, and the 
backlog is actually a measure of any case, with the date clock 
being the date that it becomes a formal claim, and it is 
measured from any claim that is longer than 125 days since the 
date it was filed it becomes a part of the backlog.
    So no, it doesn't matter where you are in that 1.3 million.
    Mr. Harris. And what has been happening to the number of 
backlog claims in the past year? What has been happening?
    Mr. Murphy. We struggle internally a lot with what we call 
working the right next claim, and the process of developing a 
claim there is a series of gathering evidence steps that you go 
through from service treatment records to private medical 
records to examinations, et cetera, and the secret to our 
success is going to be that we work the claim that is ready to 
be rated and moved to the rating board next.
    When all of the evidence is presented, it is in the right 
format, it is in the right way and it is ready to be made--a 
decision to be made.
    So to look at it and say, well, this one was a simple one 
issue claim or this one was a new claim or a claim for 
increase, it doesn't matter. The next claim that has all the 
evidence that is ready to proceed to the rating board goes to 
the rating board and that is the one the rater works on.
    Mr. Harris. So what are the specific ways you are going to 
deal with those 300,000 cases that were--you know, the 
difference between the new claims and the claims that were 
processed?
    I mean I know the digital claim system is one, but I am a 
little skeptical that that will acutely affect it, except in a 
negative way, because for instance whenever you take a health 
system, and you know the VA system has the finest electronic 
record in the world, I will bet you it took a while of in that 
transition things actually slowed down a little bit.
    How are you doing to deal with that as you go toward 
digital claims? I am afraid we are just going to--you know, 
that backlog is going to grow, not shrink.
    Mr. Murphy. Absolutely. We have a 5-year forecast knowing 
what the number of claims is going to be, looking at 2, 3, 4, 5 
years down the road, and the answer is how do we take care of 
those veterans in less than 125 days like the secretary has 
stated as our goal and do it with the resources that we have 
currently on board? And the answer to that is, the only way we 
are going to be able to do that is we need to get out of the 
paper world and into the digital world.
    Very shortly you are going to see the introduction of 
something called the Vonac Direct Connect, VDC, it is a 526 
claim for disability done in electronic format.
    Think something along the lines of your Turbo Tax interview 
process completed electronically. At the same time the veteran 
has the opportunity to submit any private evidence that they 
want considered in the case, and what just that little bit that 
I just described to you takes months out of our process.
    Mr. Harris. Just as a benchmark what are the percent of 
claims that are handled in less than 125 days?
    Mr. Murphy. Forty-four percent, quoting Mr. McNerney's 
numbers earlier talking about 66 percent being in the backlog, 
so the inverse of that would be true, the other 44 percent 
would not be.
    Mr. Harris. Thank you so very much and thanks to all the 
Members sitting at the witness table for taking care of our men 
and women in uniform and who have been in uniform.
    Thank you.
    Mr. Runyan. Thank you, Mr. Harris, and I know the Ranking 
Member and I have a couple more questions so we will get 
another round in quickly.
    Mr. Campbell, what purpose does the DoD have in actually 
giving a percentage of disability? For example, why is it that 
you have to make a rating just say fit or unfit?
    Mr. Campbell. I am sorry, would you repeat the question? I 
am sorry.
    Mr. Runyan. The purpose of the DoD making a disability 
rating instead of just an up or down on whether they are fit 
for service or unfit for service, what is the purpose there in 
the DoD?
    Mr. Campbell. That is what we are required to do under 
current legislation.
    Mr. Runyan. Are there thresholds in there that have to be 
met for certain pathways that they have to fit into as they are 
found--what is the threshold for fit, unfit in your service? To 
say you are not fit to continue.
    Mr. Campbell. There are a number of conditions that need to 
be met that you can actually do your job, whatever your MOS is, 
specifically able to perform the duties in a proper and 
efficient way.
    There are more specifics, I mean I can get you the actual--
--
    Mr. Runyan. No, my question is more of it is either able or 
not able.
    Mr. Campbell. Right.
    Mr. Runyan. That is not part of the process, correct?
    Mr. Campbell. That is the determination that DoD makes.
    Mr. Runyan. And it is just yes or no, up or down?
    Mr. Campbell. Right.
    Mr. Runyan. There is no percentage involved in this of 
capability, disabled, there is none of that involved in that 
process? You are 10 percent disabled, 20, 30 percent disabled?
    Mr. Campbell. Can I ask Colonel Cassidy?
    Mr. Runyan. Certainly.
    Colonel Cassidy. Sir, the standard for fitness is as Mr. 
Campbell indicated whether or not a soldier in the case of the 
Army can perform their duties in their MOS, whether or not 
there is an impact, the medical condition impacts their 
performance of duties in their MOS, whether or not it poses a 
risk to themselves or others, and the third criteria is 
maintaining that individual on active duty would impose a 
burden on the military to maintain that individual.
    I think the percentage you are talking about is the 
threshold, the 30 percent disability rating that is required to 
receive a military retirement. That is a second order type 
decision. The first decision that all physical evaluation 
boards make is whether or not the servicemember is fit or unfit 
for each condition, for all conditions that are identified, 
then under the integrated service we turn the case over to the 
VA to actually determine the ratings for each condition and 
then the VA provides those ratings back to the military and we 
accept the rating for the military unfitting conditions, which 
are a subset of all service connected conditions.
    Mr. Runyan. Thank you very much.
    Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    I have a couple things on my mind regarding questionnaires. 
Mr. Murphy, you mentioned the DBQ, and also I was concerned 
about the WLQ, the work limitation questionnaire. How extensive 
are these questionnaires, how long does it take to go through 
them?
    I mean one of the things that was mentioned in the prior 
panels was a 30-minute interview by a mental specialist is not 
sufficient to give a proper disability rating. So how reliable 
are these kind of questionnaires and what is involved in it?
    Mr. Murphy. They are extremely reliable. And the reason I 
say that with confidence is they were written by my staff in 
conjunction with the VHA doctors, with the Board of Veterans 
Appeal, Office of General Counsel, we had some VSO involvement, 
all the players, all the stakeholders that are involved in this 
process sitting down and over the course of months for each one 
of these DBQs going through and lining up exactly the questions 
that need to be answered in order to rate that veteran.
    So what happened in the process is we lined up the 
disability benefits questionnaire with the condition in the 
VASRD. So when you are completing the DBQ you are taking the 
rater to the right parts, to the right decision points in the 
VASRD, which is one of the concerns raised by the earlier panel 
was the consistency in rating decision, and my answer to that 
was the DBQ will significantly improve that quality and 
consistency and that is how it is going to happen.
    Mr. McNerney. And you mentioned, it would be in the future 
similar to a Turbo Tax interview. And when you do Turbo Tax you 
also have to have your paperwork behind you. How would you 
enforce or verify the veteran's answers?
    Mr. Murphy. With secure access through eBenefits level two 
similar to the way you would access your bank account. We can 
positively identify who the individual is. The form then 
becomes prepopulated with the information that we know about 
that veteran, and as we talked just a few moments ago, 60 to 70 
percent or 70 to 80 percent of the veterans are claimed for 
increase, we already have a history of that veteran.
    So when the veteran comes in to file that claim form I 
prepopulate it with the information from that individual 
veteran and then they explain to us what the additional 
conditions or increased impacts are and then we assess it from 
there.
    For a new veteran coming in it would be as simple as we 
prepopulate the information from our DE214 service records and 
other service treatment records that we may already be in 
possession of for that individual.
    Mr. McNerney. Okay, sounds reasonable.
    How long would it take for a veteran to finish one of these 
questionnaires?
    Mr. Murphy. Going through what we call the wiring diagram, 
electronic version of it that I sat through last week, 30, 45 
minutes on a relatively simple case.
    It obviously has to be tied back to the complexity and the 
number of contentions that the individual is doing and the 
individual circumstances for that veteran.
    Mr. McNerney. Well, one of the inconsistencies that I am 
aware of is veterans with mental disabilities are generally 
speaking not able to work and continue to receive disability 
benefits. Is that something that we can address here?
    Mr. Murphy. Are we talking back to tying that back to the 
completing the electronic claim?
    Mr. Murphy. Yes. That is absolutely one of the issues being 
addressed in the revision of the VASRD.
    What we don't want to do is we don't want to put a negative 
incentive saying that if----
    Mr. McNerney. Right.
    Mr. Murphy [continuing]. I receive treatment, I become 
better and I go back to work, I put a negative disincentive to 
stay home because if I go to work it is just going to offset 
what I am already making by sitting at home. So that is being 
addressed in the draft regulations.
    Mr. McNerney. Okay, Mr. Chairman, I yield back.
    Mr. Runyan. All right, Mr. Walz, nothing further?
    I thank you gentlemen on behalf of the Subcommittee for 
your testimony and we again welcome working closely with all of 
you as we tackle these impacts that we are having on our 
veterans, and you all are excused.
    I now invite General James Terry Scott to the witness 
table. General Scott is the Chairman of the Advisory Committee 
on Disability Compensation.
    I welcome you, General, and your complete statement will 
now be entered into the hearing record and you are recognized 
for five minutes.
    Sir, is your mic on?
    General Scott. I think it is on now.
    Mr. Runyan. There we go. Thank you.

STATEMENT OF JAMES TERRY SCOTT, LIEUTENANT GENERAL USA (RET.), 
    CHAIRMAN, ADVISORY COMMITTEE ON DISABILITY COMPENSATION

    General Scott. Okay. I am glad to be here with you today 
representing the Advisory Committee on Disability Compensation.
    This Committee is chartered by the Secretary of Veterans 
Affairs under the provisions of the U.S. Code and in compliance 
with Public Law 110-389 to advise the secretary with respect to 
the maintenance and periodic readjustment of the VA Schedule 
for Rating Disabilities.
    Your letter asked me to testify on the Advisory Committee's 
work to date and my views on the work being done by the VA to 
update the disability rating system.
    Our focus has been in three areas of disability 
compensation. Requirements and methodology for reviewing and 
updating the VASRD; the adequacy and sequencing of transition 
compensation and procedures for servicemembers transitioning to 
veteran status; and disability compensation for non-economic 
loss, often called quality of life.
    I am prepared to answer questions about these areas of 
focus. These are now for the record.
    After coordination with the secretary's office and the 
senior VA staff we have added review of individual 
unemployment, review of the methodology for determining 
presumptions, and review of the appeals process as it pertains 
to the timely and accurate award of disability compensation. 
These issues will be addressed in our next report to the 
secretary and the Congress.
    Regarding the current project to update the disability 
rating system I believe the project management plan that the VA 
has laid out will achieve the goals sought by all.
    The revised VASRD will be a guide for veterans, medical 
examiners, and claims adjudicators that is simpler, fairer, and 
more consistent than the current process.
    The secretary and the VBA should be commended for 
undertaking this long overdue revision, which has been 
repeatedly called for by the Congress as well as numerous 
boards, studies, and reports.
    Some of you may recall former Senator Dole's observation at 
the congressional out brief of the Dole-Shalala Commission 
where he said that the VASRD at that time was 600 pages of 
band-aids. While perhaps an overstatement, his views reflect 
those of many of the participants in commissions and studies.
    The revision of the VASRD is not a stand alone operation, 
it is part of a larger effort that includes electronics claims 
filing, use of disability questionnaires, and improved claims 
visibility at all stages.
    In my judgment, many of the current VBA initiatives depend 
on a successful and accepted revision of the rating schedule.
    Some stakeholders have expressed concern that the revision 
effort may adversely affect current and future veterans. My own 
view is that if properly done the revision will simplify and 
expedite claims preparation, medical examinations, and claims 
adjudication. These will in turn help the VBA reduce processing 
time and increase accuracy.
    Consistency among raters and regional offices, another 
recurring area of concern, should be improved.
    There is an inherent resistance to change that must be 
overcome through involving all the stakeholders in the process 
and insuring that the purpose and results of the revisions are 
understood.
    A concern, which I share, is that the process is not 
scheduled for completion until 2016; however, the scope and 
complexity of revising and updating all 15 body systems is 
daunting.
    The first major step, gathering and assembling the medical 
data for all body systems, is well along. The forums at which 
each body system has been discussed by leading medical experts 
have resulted in broad agreement on how to update medical 
terminology and medical advances.
    The work groups of subject-matter experts for each body 
systems are now analyzing the results of the forums in order to 
develop specific proposed changes to the schedule.
    The econometric data sought in conjunction with George 
Washington University will assist in determining the 
relationship between specific conditions and average impairment 
of earnings loss.
    The process, to include publishing draft changes in the 
Federal Register offers all stakeholders an opportunity to 
request clarifications and make comments. I believe that this 
step will protect current and future veterans from unintended 
consequences as revisions move toward implementation.
    The Advisory Committee is involved in all steps in this 
rating schedule revision process. As an outside advisory 
committee we are able to offer advice and suggestions directly 
to the secretary and VA management. We listen closely to the 
subject-matter experts from outside sources who meet with us as 
well as to the VA professionals who are leading the effort. The 
members have an opportunity to ask questions, offer 
suggestions, and track the progress of the revision. We are a 
sounding board for options and proposals.
    The committee includes experience and expertise from DoD, 
VA, the congressional staff, disability law, family programs, 
and the VSO community. Our meetings are open to the public.
    Some of the presenters who come from the outside have 
somewhat radical or out of the box ideas. We listen to them 
carefully and move on.
    And one of the problems we occasionally run into is that an 
outside presenter with a very you might call an innovative 
solution to our problems may propose a solution that causes 
people's hair to get on fire, but we have that under control. 
That is just one person's presentation.
    In conclusion, Mr. Chairman, the Advisory Committee on 
Disability Compensation is deeply involved in the VA project to 
revise the VASRD.
    We appreciate the openness of the VA leadership and staff 
to our questions and recommendations. We recognize that even 
the best revisions will not solve all the complex issues of 
disability compensation, but the members believe that the 
updated schedule will address many of the noted shortcomings of 
the current version, such as outdated medical terminology, 
outdated diagnosis and treatment regiments for illnesses and 
injuries, changes in today's social and work environment, and 
the apparent earnings loss disparities between mental and 
physical disabilities. It will also offer an institutional 
process for future updates.
    Thank you for your attention and the opportunity to 
testify. I look forward to any questions you may have.
    [The prepared statement of James Terry Scott appears on p. 
61.]
    Mr. Runyan. I will start the questions. Addressing this 
committee last year put forth a recommendation to develop and 
implement new criteria specific to PTSD in the VA Schedule for 
Ratings Disabilities. Can you identify those deficiencies 
veterans with PTSD could suffer with the current schedule?
    Obviously the problems that we have and obviously dealing 
with mental disorders right now I think and talking to people 
it is still kind of a gray area and there is a lot to learn 
scientifically on how we move forward, but what are they 
specifically in the ratings?
    General Scott. Well, the Center for Naval Analysis on 
behalf of the VDBC, which I chaired some years ago, their 
analysis showed that veterans suffering from mental 
disabilities were undercompensated across the board based on 
their average earnings loss, and they also showed that those 
with physical disabilities were compensated quote about right.
    So one of the things that we are looking at is how do we 
think about changing the rating schedule to accommodate that?
    You know, 100 percent is 100 percent, So that is about all, 
you know, you can't really go above that, but what I think you 
are going to see at the end of the day is that PTSD, the degree 
of disability associated with PTSD is going to be recognized in 
terms of a higher percentage of disability rating that is 
assigned. In other words, I think you will see more people who 
are suffering from the more severe PTSD rated at 100 percent or 
at 70 percent as opposed to the lower percentage that the 
current criteria seems to place them at.
    Does that answer your question, sir?
    Mr. Runyan. Well, I think it is being done inside the 
revision of the mental disability body system. That is in my 
judgment probably the very toughest one of the body systems to 
revise. None of them are easy, but this one is certainly the 
toughest because there is a certain amount of subjectivity 
involved in this as we all recognize.
    So you have to get a good diagnosis, and I think that the 
medical community that has been working with the revision is 
well on the way to that.
    The second thing is you have to say well, how bad is this? 
What is the average earnings loss going to be for this 
individual?
    And I keep coming back to that because that is the basis of 
which as you well know, sir, that disability is compensated, 
that is what--there is a lot of discussion about well, what 
about quality of life and all that, and it is very important, 
and I have some strong views on that, but the statutory or the 
legislative ability to deal with the disabilities is pretty 
much centered on average earnings loss.
    And I believe that that will get us pretty far down the 
road of saying, okay, well, this individual is suffering so 
greatly from either PTSD or a combination of problems that he 
will be rated at 100 percent as opposed to something less than 
that for people who aren't.
    And I realize that is a major concern of all the 
stakeholders, is how can you fairly do that? And I believe we 
are going to come up with it. I know there is some concern 
about that.
    I believe that the VA is going to come up with it.
    General Scott. Right.
    Mr. Runyan [continuing]. And you know, I have had the 
discussion with many people, do we actually have the manpower 
or the structure in the VA to establish a lot of that? And I 
think that is another question that arises with that.
    So thank you for that.
    Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    Thank you, Lieutenant General Scott for your hard work, for 
your service to our country, and for your free and thoughtful 
answers here this morning.
    There has been a lot of discussion about the quality of 
life and including a component in the scale of rating. Do you 
have any idea how the VA can go about--I mean you said earlier 
that you have strong ideas on this issue--on what tools they 
have that might be available in the short term?
    General Scott. Well quickly I think there are two ways that 
you can look at quality of life. You can look at it as it 
exists today in saying, okay, there are some imputed quality of 
life compensations imbedded in the system as it exists now, and 
I would include to some extend the special monthly 
compensation, some part of that, and in some cases where there 
appears to be an overcompensation based on degree of 
disability, and you can also say that many of the other things 
that the VA does address quality of life.
    One could start with medical care if you wanted to. You 
could talk about many of the things that the VA and the DoD are 
doing together regarding making transition easier, you can talk 
about the family care legislation that was passed by the 
Congress recently.
    So you can take a position that there is currently some 
compensation for loss of quality of life or you can take the 
position that there should be a separate compensation program 
for quality of life.
    My personal view on that is that if that is the direction 
that the Congress and the VA want to go that it needs to in 
many ways model the special monthly compensation program so 
that the criteria are clear and definite and that the quality 
of life additional payment, if you will, goes to people who 
obviously, clearly, and without question have lost some quality 
of life.
    The studies that were done for the VDBC would indicate that 
at some of the lower levels of disability there is not 
significant loss in quality of life, but that at the higher 
levels, particularly when you start talking about paralysis, 
amputations, blindness, and on and on, the very serious 
disabilities that an argument can be made that there is so much 
quality of life that is not compensated by the current system 
that it should be addressed.
    What the VDBC said was that we should consider and up to a 
25-percent increase in the compensation for serious loss of 
quality of life. Now up to, that is how we get to the very 
seriously disabled where it is obvious cases that quality of 
life is tremendously impacted, and it also addresses the issue 
that at some of the lower levels it is--the data would show 
that there is not a significant impairment to quality of life, 
and that would be my position on it, and that is my position 
only, not reflecting the Committee's or the VA's.
    Mr. McNerney. So do you identify any tools that could be 
used in helping to quantify quality of life impairment?
    General Scott. I think it would start with what is the 
degree of degradation of quality of life based on the physical 
or mental disability?
    In other words, I think if you could start by looking at 
people who are in the 100 percent category or somewhere near 
that and that is where you would start looking to see how much 
degradation of quality of life might be associated with their 
particular disability.
    But again, I think the parameters have to be clear as to 
what we are talking about, what disabilities we are talking 
about, what impacts, it would have to be some pretty complex 
legislation or rule making, because what you don't want to do 
is organize a parallel system that more or less encourages 
people to seek a higher level of disability compensation in 
order to break into the area where quality of life might be 
added on.
    In other words, you can't just base it on percentages, it 
has to be based on something besides that.
    Mr. McNerney. Okay, thank you, Lieutenant General.
    Mr. Runyan. Thank you, Mr. McNerney.
    Mr. Walz.
    Mr. Walz. Thank you, Chairman.
    Thank you, General. I think your last statement was very 
true, I think about it for most of us quality of life on the 
lowest of the disability ratings is hearing is certainly 
impacted if you can't hear your children in the morning or 
whatever it might be.
    General Scott. Right.
    Mr. Walz. So this is a complex issue.
    I will ask you, General. You sat here and you got to hear, 
and I would argue that both the panels are advocates for 
veterans, but we heard our VSOs and some folks on the first 
panel, experts in VA and DoD, how do you respond to some of the 
things that you heard during that, some of the suggestions, 
maybe the individual physician assessments and some of those 
types of things?
    I know it is a very generalized question, but it worked out 
well that you got to hear both sides and your job is unique 
that you are a VA under law entity, but you are advocating for 
all those veterans.
    General Scott. Well, I will be glad to make a couple 
comments about ICD if you would like.
    Mr. Walz. Yeah, that would be great.
    General Scott. What the Veterans Disability Commission 
recommended regarding ICD is that it be considered as an 
appendix to the regulation. So it is there, it can be used, it 
should be used, but the problem with incorporating it in with 
the regulation then it really gets tough to change, but if you 
made it an appendix to the regulation then when they go to ICD-
10, which I think is in the mill somewhere right now, then you 
just change an appendix and we don't have to try to get a 
regulation change done.
    So to me that gives the opportunity for the medical 
professional who is doing the examination to use the 
standardized codes that are well understood by all without 
getting into, well, you know, now we have chipped it into 
cement by putting it into the regulation as ICD-9, and then as 
we all know sooner or later it is ICD-10 and then it is 11, and 
so what do you do, but you could change an appendix without 
having to go back and change the regulation, if I understand it 
right.
    So that would be the approach that I would take to 
integrate the ICD, kind of the commonly accepted medical 
terminology into the system.
    Also understanding as was pointed out by some others that 
there are unique situations and medical conditions that are not 
going to be found in the ICD, and they will still have to be 
worked into the VA system through the regulation.
    In other words, there are some things are aren't going to 
be covered by ICD-9 or 10 or 11 or whatever and they are going 
have to be accounted for.
    And one of the things that I believe that this revision 
will do, I think it will make it less of a requirement to use 
individual unemployment as a catchall for people that you don't 
know what to do with.
    In other words, if we get this revision right it should be 
clear enough that the disabilities of the veteran fall into 
categories and we should get the percentages right so that we 
don't have a huge number of people that can't work, but their 
disability is not recognized inside the system at say the 100 
percent level or whatever.
    And so I think we can over time in the long run reduce the 
number of instances of individual unemployment by getting the 
revisions right.
    One of the other things that was mentioned was outreach. 
Somebody mentioned what is the outreach program? I would give 
Secretary Shinseki very high marks for attempting to outreach 
to the veterans' community and to the DoD for outreach to the 
servicemembers before they leave the service.
    Some years ago it was all pretty perfunctory when people 
left the service. You would say, well, there is nothing wrong 
with you so we are not going give you a physical and you don't 
really need to see anybody, good-bye, here is your DD214. And 
what occurred then is that you had people who later on 
developed problems and sometimes it took a long time to get 
them as you mentioned, sir, get in the system and get them 
working.
    So the DoD is doing I think a very good job in increasing 
the outreach to people departing, and I think that Secretary 
Shinseki has done a very good job of getting outreach to 
veterans about how to apply and how to get into the system and 
all of that.
    One of the things that the VDBC recommended was that all 
departing servicemembers from all services have an exit 
physical. We all got an entry physical when we went into the 
military, but it is still not really standard across the board 
in all the services for everyone that there is an exit service. 
If you do that then you have bookends. You have a you went in 
here and this was your condition, you came out here and this 
was your condition. It makes it lot easier for the VA.
    Mr. Walz. I couldn't agree more, and especially on the 
mental health screening, then we have a benchmark, we know 
where to go.
    But overall if I could, I know my time just ran out, some 
of the--I wouldn't call them criticisms--but some of the 
critiques is, is the process open enough, is everybody getting 
their word in, and you on this committee are comfortable we are 
moving in the right direction, General?
    General Scott. Again, speaking for myself. I am comfortable 
that the process is open. I mentioned our committee meetings 
are open to the public, so when someone comes in they--anyone 
can come in and listen and at the end of them we always say 
does anybody got anything to say, and it can be from the back 
benches someone can say, well, what about this or what about 
that.
    I think that the process of developing the regulation that 
the VA is going through I think it is open in the sense that we 
start out the medical forums are open, people come to them and 
all of that, once the draft is put together--you know, somebody 
has to sit down with a blank piece of paper and a typewriter 
and make a draft, and once the draft is done, and then the 
draft needs to be passed around for comment, observation, and 
all of that, and the safety valve is a Federal Register where 
that draft reg has to be published for a certain amount of 
time, anybody that wants to can comment, and then it is up to 
VA to take all those comments and suggestions and integrate 
them as necessary into it.
    And so that is a long answer to say yes, I think the system 
is as open as you can make it and keep it moving.
    Mr. Walz. I appreciate that.
    Thank you, Mr. Chairman.
    Mr. Runyan. Thank you, Mr. Walz.
    General Scott, on behalf of the Subcommittee I thank you 
for your testimony and appreciate your hard work on behalf of 
our Nation's veterans and your attendance here today, and with 
that you are excused. Thank you.
    I want to repeat my desire from the Subcommittee's first 
hearing last year, and that is to work with Members on both 
side of the aisle to insure that America's veterans receive the 
benefits they have earned in a timely and accurate manner, and 
I believe assessing and where necessary updating the present 
state of the disability rating schedule is another crucial step 
in the endeavor.
    I ask unanimous consent that all Members have five 
legislative days to revise and extend their remarks and include 
extraneous material.
    Hearing no objection so ordered.
    I thank the Members for their attendance today and this 
hearing is now adjourned.
    [Whereupon, at 12:18 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

         Prepared Statement of Honorable Jon Runyan, Chairman,
       Subcommittee on Disability Assistance and Memorial Affairs

    Good morning and welcome everyone. This oversight hearing of the 
Subcommittee on Disability Assistance and Memorial Affairs will now 
come to order.
    We are here today to examine the Department of Veterans Affairs' 
current framework for rating veterans' injuries, illnesses, and 
disabilities resulting from service in our military.
    As I mentioned during my opening remarks of our first hearing last 
year, my hope is that this meeting of minds sets a precedent and tone 
for a broader promise we have made to our veteran population for the 
remainder of this 112th session.
    And that is to ensure the entire claims process, the delivery of 
earned benefits, and veterans medical services, is transformed into a 
fully efficient and modernized system equipped with the best tools 
available to aid our veteran population in the 21st century.
    Several years ago, a Commission was established on Care for 
America's Returning Wounded Warriors led by former Senator Bob Dole and 
former Secretary of Health and Human Services Donna Shalala. The 
purpose of this commission was to examine the health care services 
provided by the VA and the Department of Defense to members of the 
military and returning veterans.
    Around the same time, Congress created the Veterans' Disability 
Benefits Commission, established under the National Defense 
Authorization Act of 2004. The commission was created by Congress out 
of many of the same concerns we still hold today, including the 
timeliness of processing disabled veterans' claims for benefits.
    This commission conducted a 2-year, indepth analysis of benefits 
and services available to veterans, and the processes and procedures 
used to determine eligibility. Their conclusions were published in a 
comprehensive report titled ``Honoring the Call to Duty: Veterans' 
Disability Benefits in the 21st Century.''
    The end result of these reports were several recommendations, 
including the goal of updating and simplifying the disability 
determination and compensation system on a more frequent basis.
    Although select portions of the ratings system have been updated 
throughout the last 20 years, these reports refer to the rating 
schedule as ``outdated,'' noting that it has not been comprehensively 
revised since the conclusion of World War II.
    They recommend the Rating Schedule be updated at recurrent and 
relative intervals, due to advances in medical and rehabilitative care, 
and a greater appreciation and understanding of certain disabilities, 
such as PTSD. The more recent updates to diagnostic criteria for newer 
types of injuries, such as TBI, were a step in the right direction.
    However, I believe it is our duty to be vigilant in pressing for 
continued revision reflecting the continued advances and understanding 
in medical care and treatment. In addition, I am in agreement with 
their conclusion that a more candid emphasis 
on veteran quality of life should be taken into account in an updated ra
tings schedule.
    Therefore, we are here today to honor our duty to the Nation's 
veterans. Just as we would not issue World War II era equipment and 
weapons to our current soldiers and Marines and expect them to be 
successful of the modern battlefield; we should not be satisfied with a 
World War II era system for evaluating and rating their disabilities as 
a result of their service and sacrifice to this Nation.
    I want to thank the VA, the DoD, the present VSOs, and General 
Scott for their valuable input as we work together to find important 
solutions.
    I welcome today's witnesses to continue this ongoing discussion and 
offer their own specific recommendations on how to improve the current 
system of rating our veterans' disabilities.
    I would now call on the Ranking Member for his opening statement.

                                 
            Prepared Statement of Honorable Jerry McNerney,
                       Ranking Democratic Member

    Thank you, Mr. Chairman.
    I would like to thank you for holding today's hearing.
    As we have discussed over the course of many hearings in the 110th 
and 111th Congresses,the VA's claims processing system has many 
shortcomings which have left many disabled veterans without proper and 
timely compensation and other benefits to which they are rightfully 
entitled. Today, 66 percent of VA's 886,000 pending claims languish in 
backlog status (meaning longer than 125 days).
    At the heart of this system is the VA Schedule for Rating 
Disabilities (or VASRD). In its study, the Veterans' Disability 
Benefits Commission (VDBC) concluded that the VA Rating Schedule has 
not been comprehensively updated since 1945.
    Although sections of it have been modified, no overall review has 
been satisfactorily conducted, leaving some parts of the schedule out 
of date--relying on arcane medical and psychological practices--and out 
of sync with modern disability concepts.
    The notion of a Rating Schedule was first crafted in 1917, so that 
returning World War I veterans could be cared for when they could no 
longer function in their pre-war occupations. At the time, the American 
economy was primarily agricultural based and labor intensive.
    Today's economy is different and the effects of disability may be 
greater than just the loss of earning capacity. Many disability 
specialists believe that loss of quality of life, functionality, and 
social adaptation may also be important factors.
    Our Nation's disabled veterans deserve to have a system that is 
based on the most available and relevant medical knowledge. They do not 
deserve a system that in many instances is based on archaic criteria 
for medical and psychiatric evaluation instruments.
    I know that Congress, in the Veterans' Benefits Improvement Act of 
2008, P.L. 110-389, directed VA to update the VASRD and to delve into 
revising it based on modern medical concepts. I know that VA, in 
following this directive, has undertaken a comprehensive review of the 
VASRD, and I look forward to receiving a thorough update on its 
progress.
    Congress also created the Disability Advisory Committee in P.L. 
110-389. I welcome General Scott here today who is the Chair of that 
Committee and also welcome his insight. I look forward to the testimony 
today from all of the witnesses on the complex issues surrounding 
modernizing the VA Rating Schedule.
    I know that there is a lot to be done to improve the VA claims 
processing system, but with the rating schedule at the core of the 
process, it seems that the centerpiece is in need of a comprehensive 
update. There are over 2.2 million veterans of the wars in Afghanistan 
and Iraq with 624,000 who have already filed disability claims. There 
are also so many veterans whose claims were not properly decided in the 
past because of the analogous-based subjectivity that is inherent in 
the current VASRD.
    Since the DoD also relies on this system, and as we transition to 
the one exam platform under the Integrated Disability Examination 
System (IDES), bringing the VASRD into the 21st century is so critical. 
We must finish updating it without delay.
    I look forward to working with you, Mr. Chairman, and the Members 
of this Subcommittee in providing stringent oversight of the VA 
Schedule for Rating Disabilities. VA needs to adopt the right tools to 
do the right thing, so that our Nation's disabled veterans get the 
right assistance they have earned and deserve.
    Thank you, and I yield back.

                                 
                 Prepared Statement of Jeffrey C. Hall,
   Assistant National Legislative Director of the Disabled American 
                                Veterans

    Chairman Runyan, Ranking Member McNerney and Members of the 
Committee:
    On behalf of the Disabled American Veterans and our 1.2 million 
members, all of whom are wartime disabled veterans, I am pleased to be 
here today to offer our views regarding the VA Schedule for Rating 
Disabilities.
    Mr. Chairman, as you know VA disability compensation is a monthly 
benefit paid to veterans for disabilities resulting from active 
military service. The VA Schedule for Rating Disabilities (VASRD) is 
the determining mechanism to provide ratings for disability 
compensation. Divided into 15 body systems containing more than 700 
diagnostic codes, the VASRD establishes disabilities by assigning 
percentages in 10 percent increments on a scale from 0 percent to 100 
percent. As defined in title 38, United States Code, section 1155, 
ratings must be based on the ``average impairments of earning 
capacity,'' a term that has remained unchanged in the law for more than 
50 years. Congress did not choose to use ``actual earnings loss'' or 
``average earnings loss,'' both of which would have very different 
results and implications. Under this system, a veteran who is able to 
overcome the impairments in bodily function caused by their 
disabilities and productively work is not punished by a reduction in 
disability compensation.
    Since its last major revision to the VASRD in 1945, VA continued to 
make changes to account for new injuries and illnesses with the 
developments in medical sciences, however there has been no 
comprehensive review or update to ensure that disability categories, 
rating percentages and compensation levels were accurate, consistent 
and equitable for more than 60 years. In 2007, both the Congressionally 
mandated Veterans Disability Benefits Commission (VDBC), as well as the 
Institute of Medicine (IOM) Committee on Medical Evaluation of Veterans 
for Disability Compensation in its report ``A 21st Century System for 
Evaluating Veterans for Disability Benefits,'' recommended that VA 
regularly update the VASRD to reflect the most up-to-date understanding 
of disabilities and how disabilities affect veterans' earnings 
capacity. In line with these recommendations, in 2010, the Veterans 
Benefits Administration (VBA) began a 5-year process to update each 
section of the VASRD, beginning with mental disorders and the 
musculoskeletal system. It is VBA's stated intention to continue 
regularly updating the entire VASRD every five years.
    Additionally, pursuant to Public Law 110-389, Congress established 
the Advisory Committee on Disability Compensation (ACDC) to help 
implement the recommendations of the VDBC, specifically the 
effectiveness of the VASRD. One recommendation from the ACDC was that 
veterans service organization (VSO) stakeholders be consulted at 
several critical moments throughout the VASRD review and revision 
process, to ensure the expertise and perspectives of VSOs were 
incorporated to produce a better result. Unfortunately, over the past 
two years, there has been little opportunity for VSO input during the 
update and revision process. While VBA has held a number of public 
forums and made some efforts to include greater VSO participation, the 
process itself does not allow input during the crucial decisionmaking 
period. Because these public forums were conducted at the very 
beginning of the rating schedule review process, veterans service 
organizations were not able to provide informed comment, since VBA had 
not yet undertaken any review or research activities.
    For example, a joint VBA-VHA mental health forum was held in 
January 2010 with VSOs invited to make presentations. Since that time, 
there has been no opportunity for further VSO review of or input to the 
revision process. Moreover, the VBA Revision Subcommittee tasked with 
doing the actual work on the VASRD update was not even formed at that 
time. Consequently, VSO and other stakeholder involvement really took 
place before the actual revision process had begun. While the public 
forum may be part of the official record, it is unclear whether any of 
the Subcommittee Members actually know of that input. Over the course 
of the next 2 years, there has been no transparency of the work of this 
Subcommittee and no opportunity to provide any input on the mental 
disorders VASRD update.
    In August 2010, the VBA and VHA held a Musculoskeletal Forum, which 
also included a VSO panel. Additional public forums on other body 
systems have been held over the past year, each ostensibly offering an 
opportunity for VSO and public input. Some of these, however, were held 
in remote locations, such as Scottsdale, Arizona, which resulted in 
less of an opportunity for most VSOs to observe, much less offer any 
input. We do want to note that VBA has made an effort to increase the 
level of VSO participation at some of the public forums, however from 
that point forward the process has essentially been closed.
    While we are appreciative of any outreach efforts, we are concerned 
that but for these initial public forums, VBA is not making any 
substantial efforts to include VSO input during the actual development 
of draft regulations for the updated rating schedule. Since the initial 
public meetings, VBA has not indicated it has any plans to involve VSOs 
at any other stage of the rating schedule update process other than 
what is required once a draft rule is published, at which time they are 
required by law to open the proposed rule to all public comment. We 
strongly believe VBA would benefit greatly from the collective and 
individual experience and expertise of VSOs and our service officers 
throughout the process of revising the VASRD. As the ACDC noted, it 
would have been helpful to include the experience and expertise of VSOs 
during its deliberations on revising the VASRD. Moreover, since VBA is 
committed to continual review and revision of the VASRD, we believe it 
would be advantageous to conduct reviews of the revision process itself 
so future body system rating schedule updates can benefit from 
``lessons learned'' during prior body system updates.
    Mr. Chairman, there is no question that the current VASRD for 
Mental Disorders (VASRD-MD) has some significant problems that must be 
addressed. As the nature of mental health disorders has become better 
understood, and increasing numbers of returning servicemembers have 
been diagnosed with such disorders, particularly PTSD, the flaws of the 
VASRD-MD have become increasingly apparent. Unlike most physical 
conditions, the majority of mental health disorders do not have visible 
symptoms that can be measured with precision. Since the rating schedule 
relies primarily on objective measures of symptomology, VBA has 
struggled to establish uniform and standard ratings for mental 
disorders. DAV and others who have studied the rating schedule have 
agreed that there is a need to revise and update the VASRD-MD in order 
to achieve consistency and parity for mental health disorders.
    Unfortunately, however, it appears that VBA's efforts to revise and 
update the VASRD-MD are heading in a direction that could harm veterans 
suffering with mental health disorders and potentially threaten the 
integrity of the entire veterans disability compensation system.
    Following the January 2010 VBA-VHA public forum on mental health 
disorders, VBA established a Revision Subcommittee to review and update 
the VASRD for mental disorders. Since that Subcommittee was established 
sometime in early 2010, DAV and other VSOs have had no opportunity to 
engage with or provide any input to that Subcommittee. However, based 
upon two public briefings made by the Subcommittee over the past year, 
it appears that they have gone beyond updating or revising the 
schedule, and instead are intending to completely throw out the current 
system and substitute a dramatically different process for rating and 
compensating veterans for service-connected mental health disorders.
    At a December 2010 meeting of the Advisory Committee on Disability 
Compensation (ACDC), members of the Revision Subcommittee provided a 
Power Point briefing about their progress on updating the VASRD-MD. In 
that briefing, they stated clearly that they had ``rejected'' the 
entire rationale of the VASRD for mental disorders, and instead decided 
to create a brand new one that focused only on functional impairment, 
completely eliminating any consideration of social impairment or other 
non-work-related losses or quality of life issues. Rather than relying 
on medical judgments of the severity of mental health disorders to 
determine ratings, they were proposing to rely instead on the veteran's 
work performance. This would be a clear departure from almost a decade 
of consistent legislative history about the purpose of veterans 
disability compensation.
    Mr. Chairman, over the past year, we have made repeated requests 
for VBA to explain the new rating system they have been developing, to 
answer questions about how and why they are moving in this direction, 
and to allow VSO stakeholders to share our input as they finalize this 
brand new mental health rating schedule. Since VBA has yet to respond 
to any of our requests, we are left with a number of troubling 
questions.
    According to what was presented at the ACDC meeting, and confirmed 
again at the ACDC meeting in October 2011, the new mental health rating 
schedule would rely on how often a veteran was unable to work or was 
impaired in working effectively. For example, based upon their current 
draft proposal, a veteran who was unable to work 2 days per week would 
be rated at 100 percent, a veteran who had decreased work productivity 
or quality 2 days per week would be rated at 70 percent, a veteran who 
missed appointments or deadlines 1 day per week would be rated at 50 
percent, and so on using various other combinations of work 
productivity and quality measures. Basically, the less a veteran 
worked, the more he or she would be compensated. In effect, rather than 
compensate for ``average impairments of earning capacity,'' under this 
approach a veteran would be more closely compensated for his or her 
personal loss of earnings.
    Such an approach is not only directly contrary to existing statute 
and legislative history and intent, it also raises a number of 
troubling questions about how such a system would work and what effects 
it would have on veterans and the disability compensation system.
    For example, how would VBA measure a veteran's reduced work 
productivity? At the December 2010 ACDC briefing, the Subcommittee 
indicated that their proposal was based on a business and industry tool 
known as the Work Limitations Questionnaire (WLQ), which was developed 
to measure productivity losses for the business due to employees' 
health problems, and the impact that medical care and other 
intervention programs might have to mitigate such losses. The WLQ 
relied upon confidential responses from employees about how their 
health conditions were affecting their productivity and performance. 
Aggregating this data, the business or industry could then determine 
the economic cost of health problems, and the economic benefit of 
various treatment and intervention programs.
    What is yet to be answered is how such a tool would work for the VA 
disability compensation program. Does VBA intend to use this same tool 
to determine how much compensation to pay a veteran? Will VBA simply 
rely on self-reporting to determine ratings or will they seek to verify 
the impact on work performance by contacting employers? How would they 
confirm or refute a veteran's contention that his mental health 
disorder is decreasing his work quality? Would VBA have to obtain and 
analyze employees' personnel records and performance reviews?
    Such a system that looks only at the individual veteran's ability 
to work raises other troubling scenarios. What of a veteran who has a 
law degree, but whose severe PTSD makes it so difficult to work around 
other people that the only job he can perform is as a night watchman or 
janitor? Since he is able to work productively 40 hours per week, does 
that mean he is not entitled to any VA disability compensation?
    Moreover, we are concerned about a statement made by VBA's Revision 
Subcommittee that this ``. . . model based on the Work Limitations 
Questionnaire can be applied to service-connected disability in all 
body systems.'' What would that mean for other types of disorders? 
Would a veteran whose legs were blown off by an IED in Iraq, but who 
has struggled mightily to overcome that disability and is working 
productively in a full-time job, lose his disability compensation? 
Would a veteran who suffered severe burns and is in constant pain, but 
works through that pain, be denied full compensation?
    We believe that disability percentages should be based on a medical 
determination with emphasis being placed upon limitations involving 
routine activities and not simply a prediction of how employment may be 
affected. In fact, title 38 of the Code of Federal Regulations, section 
4.10, it states, in part, ``[T]he basis of disability evaluations is 
the ability to function . . . under ordinary conditions of daily life 
including employment . . . a person may be too disabled to engage in 
employment even though he or she is up and about and fairly comfortable 
at home or upon limited activity.'' Conversely, even though an 
individual is able to engage in employment does not necessarily mean he 
or she is less disabled.
    Mr. Chairman, we hope that this Subcommittee will seek answers to 
these and other questions about the ongoing VASRD update process to 
ensure the integrity and intent of the VA disability compensation 
system.
    Finally, as VBA completes its ongoing update and revision of the 
rating schedule, we strongly believe that it is time for VA to develop 
and implement a system to compensate service-connected disabled 
veterans for loss of quality of life and other non-economic losses. 
Under the current VA disability compensation system, the purpose of the 
compensation is to make up for ``average impairments of earning 
capacity,'' whereas the operational basis of the compensation is 
usually based on medical impairment. Neither of these models fully 
incorporate non-economic loss or quality of life into the final 
disability ratings, though special monthly compensation (SMC) does in 
some limited cases. SMC affords compensation beyond baseline ratings to 
individuals who suffer the loss or loss of use of one or more 
extremities, organs of special sense, as well as other similar 
disabilities. SMC is also provided to individuals whose service-
connected disabilities leave them housebound or in need of the regular 
aid and attendance by another person. Similarly, when an individual's 
service-connected conditions are rated less than 100 percent, but they 
are unable to obtain or maintain substantially gainful employment, 
Individual Unemployability (IU) may be granted, which would allow 
compensation at the 100-percent rate, although he or she may be rated 
less than total.
    However, none of these programs addresses the non-work losses that 
may be suffered by veterans as a result of their disabilities. While 
SMC may help pay for the additional costs a double amputee may incur 
through their daily activities, it does not compensate for the extra 
time, effort, or pain he or she goes through just to get up in the 
morning and move forward with the day. It certainly does not compensate 
for the loss of enjoyment in life activities that can result from 
severe disabilities.
    In 2007, the Institute of Medicine looked at this issue and 
recommended that the current VA disability compensation system be 
expanded to include compensation for non-work disability (also referred 
to as ``non-economic loss'') and loss of quality of life. Non-work 
disability refers to limitations on the ability to engage in usual life 
activities other than work. This includes ability to engage in 
activities of daily living, such as bending, kneeling, or stooping, 
resulting from the impairment, and to participate in usual life 
activities, such as reading, learning, socializing, engaging in 
recreation, and maintaining family relationships. Loss of quality of 
life refers to the loss of physical, psychological, social, and 
economic well-being in one's life.
    The IOM report stated, ``[C]ongress and VA have implicitly 
recognized consequences in addition to work disability of impairments 
suffered by veterans in the Rating Schedule and other ways. Modern 
concepts of disability include work disability, non-work disability, 
and quality of life (QOL). . . .''
    After more than 2 years examining how the rating schedule might be 
modernized and updated, the VDBC agreed with the recommendations of the 
IOM study, and recommended that the, ``[v]eterans disability 
compensation program should compensate for three consequences of 
service-connected injuries and diseases: work disability, loss of 
ability to engage in usual life activities other than work, and loss of 
quality of life.''
    The IOM report, the VDBC (and an associated Center for Naval 
Analysis study) and the President's Commission on Care for America's 
Returning Wounded Warriors (chaired by former Senator Bob Dole and 
former Secretary Donna Shalala) all agreed that the current benefits 
system should be reformed to include non-economic loss and quality of 
life as a factor in compensation.
    In fact, other countries do just that. Both Australia and Canada 
provide a full range of benefits to disabled veterans similar to VA 
benefits, including health care, vocational rehabilitation, disability 
compensation and SMC-like payments. However, both Canada and Australia 
also provide a quality-of-life (QOL) payment.
    Canada, under their Pension Act, includes a QOL component in its 
disability pensions. Much like VA's current system, the Canadian 
disability compensation system first determines functional or 
anatomical loss. After a rating has been assigned for a condition under 
the medical impairment table, a QOL rating is determined and the 
ratings added. In order to determine the QOL rating, the Canadian 
system looks at three components: the ability to participate in 
activities of independent living, the ability to take part in 
recreational and community activities, and the ability to initiate and 
take part in individual relationships.
    The Australian Department of Veterans' Affairs also utilizes a 
system that combines medical impairment and functional loss with QOL 
interference. Unlike the Canadian system, which provides an individual 
QOL rating for each condition, the Australian model assigns an overall 
QOL rating based on total medical impairment. In order to determine the 
level of QOL impairment, the Australian system considers four 
categories: personal relationships, mobility, recreational and 
community activities and employment and domestic activities.
    In closing, DAV believes that in addition to providing compensation 
to service-connected disabled veterans for their average loss of 
earnings capacity, VA must also include compensation for their non-
economic loss and for loss of their quality of life. We strongly 
recommend that Congress and VA determine the most practical and 
equitable manner in which to provide compensation for non-economic loss 
and loss of quality of life and move expeditiously to implement this 
updated disability compensation program.
    Mr. Chairman, DAV looks forward to working with you, as well as all 
of the Members of the Subcommittee, to protect and strengthen the 
benefits programs that serve our Nation's veterans, especially disabled 
veterans, their families and survivors. This concludes my statement and 
I would be happy to answer any questions.

                                 
    Prepared Statement of Frank Logalbo, National Service Director,
               Benefits Service, Wounded Warrior Project

    Chairman Runyan, Ranking Member McNerney, and Members of the 
Subcommittee:
    Thank you for holding this hearing on VA's rating schedule and for 
inviting Wounded Warrior Project (WWP) to provide testimony.
    This hearing is both timely and important given the responsibility 
of the Secretary of Veterans Affairs to ``adopt and apply a schedule of 
ratings of reductions in earning capacity from specific injuries or 
combinations of injuries . . . based as far as practicable, upon the 
average impairment of earning capacity resulting from such injuries in 
civil occupations . . . [and] from time to readjust this schedule of 
ratings in accordance with experience.'' \1\
---------------------------------------------------------------------------
    \1\ 38 U.S.C. sec. 1155.
---------------------------------------------------------------------------
    As you know, VA's disability rating schedule has not been 
comprehensively revised or updated since 1945. Congress recognized the 
troubling implications of that gap in creating the Veterans' Disability 
Benefits Commission.\2\ Importantly, among the Commission's 
recommendations in its 2007 report were that VA ``benefits and 
standards for determining benefits should be updated or adapted 
frequently based on changes in the economic and social impact of 
disability and impairment, advances in medical knowledge and 
technology, and the evolving nature of warfare and military service.\3\ 
Building on the Commission's findings and recommendations, Congress 
wisely directed VA to establish an Advisory Committee on Disability 
Compensation to advise the Secretary on the maintenance and periodic 
readjustment of the schedule of rating disabilities.\4\ That Committee 
is playing a vital role in monitoring, questioning, and advising VA as 
it is working to update the disability rating schedule.
---------------------------------------------------------------------------
    \2\ National Defense Authorization Act of 2004, Public Law 108-136.
    \3\ Veterans' Disability Benefits Commission Report, Honoring the 
Call to Duty: Veterans' Disability Benefits in the 21st Century, p. 4 
(2007).
    \4\ Public Law 110-389 (October 10, 2008).
---------------------------------------------------------------------------
    WWP brings a special perspective to this subject, reflecting its 
founding principle of warriors helping warriors. We pride ourselves on 
outstanding service programs that advance that ethic. Among those 
program efforts, WWP staff across the country work daily to help 
Wounded Warriors understand their entitlements and fully pursue VA 
benefits' claims. But our goal is broader: To ensure that this is the 
most successful, well-adjusted generation of veterans in our Nation's 
history.

               Unique Impact of Mental Health Disability

    From that perspective, we believe that perhaps no aspect of VA's 
work on modernizing its rating schedule may be more important than to 
bring the evaluation and rating of mental health conditions into the 
21st century. It is very clear to us at WWP that combat-related mental 
health conditions are not only highly prevalent among OEF/OIF veterans 
and often severely disabling, but they have profound consequences for 
warriors' overall health, well-being, and economic adjustment. We see 
this in our day-to-day work with Wounded Warriors. Moreover, the annual 
surveys that WWP has conducted in partnership with RAND have confirmed 
those impressions, and provided us important data.
    WWP's most recently completed survey of more than 5,800 
servicemembers and veterans wounded after 9/11 found that one in three 
of the more than 2,300 respondents reported that mental health issues 
made it difficult to obtain employment or hold jobs.\5\ Almost two-
thirds of those surveyed reported that emotional problems had 
substantially interfered with work or regular activities during the 
previous 4 weeks.\6\ And more than 62 percent indicated they were 
experiencing current depression (compared to a rate of 8.6 percent in 
the general population, and an earlier RAND projection of nearly 14 
percent among OEF/OIF veterans generally).\7\ Only 8 percent of 
respondents did not experience mental health concerns since 
deployment.\8\ Of those surveyed, post-traumatic stress disorder was 
their most commonly identified health problem.\9\ Questioned about 
their experience in theater, 83 percent had a friend who was seriously 
wounded or killed; 78 percent witnessed an accident that resulted in 
serious injury or death; 77 percent saw dead or seriously injured non-
combatants; and 63 percent experienced six or more of these types of 
traumatic incidents.\10\
---------------------------------------------------------------------------
    \5\ WWP Survey, p. 67. In contrast to the one in three so 
responding, only about one in five identified ``not physically 
capable'' and ``not qualified/lack of education'' as creating greatest 
difficulty.
    \6\ Id., p. 34.
    \7\ Id., p. 41.
    \8\ Id., p. 53.
    \9\ Id., p. ii.
    \10\ Id., p. 16.
---------------------------------------------------------------------------
    Asked to comment on the most challenging aspect of their 
transition, some two in five of those surveyed cited mental health 
issues. Their words are telling:
    ``I've been dealing with PTSD/Depression for many years now and it 
just seems to never go away. It affects my day to day activities. I 
seem to have lost my self purpose and interest.''
    ``My main problems are being emotionally numb, isolation, freezing 
up in social environments, drugs and not having the desire or energy to 
put toward changing my situation any more. It has been over 5 years, 
and I am still just as bad as and even worse than when I came back.''
    ``My greatest challenge is the feeling of uselessness and 
helplessness of coping with a mental illness.'' \11\
---------------------------------------------------------------------------
    \11\ Id., pp. 83-4.
---------------------------------------------------------------------------
    Some acknowledged finding help from VA therapists and clinics. 
Others had less positive experiences--commenting, for example, ``the VA 
is overwhelmed at this point and discouraging for young troopers 
seeking care. . . . Too much medicine gets thrown at you. Each provider 
thinks they can solve the complex issue of PTSD/Combat Stress with 
meds.'' \12\ Overall, our Wounded Warriors' battles with mental health 
issues underscore the importance not only of addressing substantial 
gaps in VA health care but significant challenges for the Veterans 
Benefits Administration.
---------------------------------------------------------------------------
    \12\ Id., p. 90. Recent studies document the widespread off-label 
VA use of antipsychotic drugs to treat symptoms of PTSD, despite the 
recent finding that one such medication is no more effective than a 
placebo in reducing PTSD symptoms. Leslie, D., Mohamed, S., & 
Rosenheck, R., ``Off-Label Use of Antipsychotic Medications in the 
Department of Veterans Affairs Health Care System'' Psychiatric 
Services, 60 (9), (2009) 1175-1181; Krystal, John H.; et al. (2011) 
``Adjunctive Risperidone Treatment for Antidepressant-Resistant 
Symptoms of Chronic Military Service-Related PTSD: A Randomized 
Trial,'' JAMA; 306(5), (August 3, 2011) 493-502.
---------------------------------------------------------------------------
    Given the strong link between veterans' mental health and their 
achieving economic empowerment, it is vital that compensation for 
service-incurred mental health conditions be equitable and make up for 
lost earning power. But deep flaws in both VA evaluation procedures and 
its rating criteria pose real problems for warriors bearing psychic 
combat wounds.
    Veterans seeking compensation for a mental health condition 
typically undergo a compensation and pension (C&P) examination, which 
is intended to develop documentation for disability-evaluation 
purposes, to include determining the severity of the condition. Where 
the examination and other pertinent evidence establishes a basis for a 
grant of service-connection for a mental health condition, adjudicators 
determine the level of compensation to be awarded by evaluating 
examination findings by reference to criteria for rating mental health 
disorders that have been codified in Federal regulation at 38 CFR sec. 
4.130.

                  Flawed Mental Health Rating Criteria

    To its credit, VA has acknowledged that its criteria for rating 
mental health disorders for compensation purposes need thoroughgoing 
revision,\13\ and officials have stated that major studies agree that 
mental health issues have a greater impact on earnings than VA for 
which is currently compensating.\14\
---------------------------------------------------------------------------
    \13\ The Veterans Benefits Administration and Veterans Health 
Administration sponsored a ``Mental Health Forum'' on January 28-29, 
2010 to begin a dialogue and process aimed at rulemaking to revise the 
rating criteria for mental disorders.
    \14\ Id.
---------------------------------------------------------------------------
    Major changes are needed. An expert panel convened by the Institute 
of Medicine (focused specifically on PTSD) characterized VA's schedule 
of ratings for mental disorders (which is a single set of criteria for 
rating all mental disorders except eating disorders) as a crude, overly 
general instrument for assessing PTSD disability.\15\ The IOM panel 
cited two major limitations in the rating criteria: First that it lumps 
everything into a single scheme, allowing for very little 
differentiation across specific conditions; second that occupational 
and social impairment is the driving factor for each level of 
disability, omitting consideration of secondary factors (such as 
frequency of symptoms or treatment intensity) used in rating physical 
disorders.\16\
---------------------------------------------------------------------------
    \15\ Committee on Veterans' Compensation for Post-Traumatic Stress 
Disorder, ``PTSD Compensation and Military Service,'' National 
Academies Press (2007), p. 6.
    \16\ Id., at 156.
---------------------------------------------------------------------------
    The criteria's reliance on occupational and social impairment 
departs in a very fundamental way from the core principle that 
disability ratings are to be based on average impairments of earning 
capacity.\17\ No other disability is rated by reference to 
``occupational impairment,'' and in any other instance under the rating 
criteria the actual impact of a veteran's occupational functioning 
would be irrelevant. The emphasis on occupational impairment throughout 
the criteria for rating mental disorders places the focus 
inappropriately on the individual veteran's capacity for employment, 
rather than on average impairment of earning capacity. We concur with 
the IOM panel's view that eliminating occupational impairment as the 
defining factor in rating mental health conditions would result in 
greater parity between the rating of mental and physical disorders.\18\ 
It could also remove the disincentive to seeking gainful employment.
---------------------------------------------------------------------------
    \17\ 38 U.S.C. sec. 1155.
    \18\ Committee on Veterans' Compensation for Post-Traumatic Stress 
Disorder, ``PTSD Compensation and Military Service,'' p. 157.
---------------------------------------------------------------------------
    The mental health rating criteria are also unreasonably high. By 
way of example, the criteria for a 100 percent schedular rating 
require:

        ``Total occupational and social impairment, due to such 
        symptoms as: Gross impairment in thought processes or 
        communication; persistent delusions or hallucinations; grossly 
        inappropriate behavior; persistent danger of hurting self or 
        others; intermittent inability to perform activities of daily 
        living (including maintenance of minimal personal hygiene); 
        disorientation to time or place; memory loss for names of close 
        relatives, own occupation, or own name.''

    With such elements as ``persistent danger of hurting self or 
others,'' the criteria more closely resemble the degree of impairment 
associated with psychiatric hospitalization or other institutional care 
than simply severe functional impairment. In other respects, the 
criteria describe such profound impairment as to render the individual 
unable to perform self-care. As such, they closely reflect the very 
high degree of impairment associated with eligibility for special 
monthly compensation based on a need for aid and attendance of another 
person.\19\ Surely an individual who manifests ``gross impairment in 
thought processes or communication,'' ``persistent delusions or 
hallucinations,'' ``grossly inappropriate behavior,'' ``persistent 
danger of hurting self or others,'' or ``disorientation to time or 
place,'' is in need of ongoing protective care. To set so high a bar 
for a 100 percent rating for a mental health disorder is not simply to 
blur the line between the 100 percent rating and the criteria for aid 
and attendance, but virtually to erase it.\20\ The criteria for a 100 
percent rating (and lesser percentage ratings) must be relaxed. But 
regulatory changes should also be made to ensure that veterans whose 
mental health status is as severely impaired as now reflected in the 
criteria for a 100 percent rating can receive special monthly 
compensation.
---------------------------------------------------------------------------
    \19\ ``. . . need for regular aid and attendance [due to] . . . 
incapacity, physical or mental, which requires care or assistance on a 
regular basis to protect the claimant from the hazards or dangers 
incident to his or her daily environment.'' 38 CFR sec. 3.352(a).
    \20\ Given that the rating schedule sets so unreasonably high a 
level of impairment for a 100% rating, it is not surprising that the 
70%, 50% and other rating levels also set the bar at unreasonably high 
points. To illustrate, an individual who experiences ``near continuous 
panic or depression,'' ``inability to establish or maintain effective 
relationships,'' ``difficulty in adapting to stressful circumstances,'' 
and ``neglect of personal appearance and hygiene,''--symptoms now 
entitling one to a 70% rating--cannot realistically be considered able 
to hold a job. It is hardly surprising, therefore, that a high 
percentage of veterans with a schedular 70% rating for a mental 
disorder receive a total disability rating based on individual 
unemployability. Likewise, the criteria for a 50% rating--impaired 
memory, judgment and thinking; difficulty in understanding complex 
demands, mood disturbance, weekly panic attacks, and difficulty in 
establishing and maintaining effective relationships--seem hardly 
consistent with the notion that such individuals, on average, have lost 
only half of their earning capacity. In short, these are not equitable 
criteria; they dramatically under-rate the extent of disability and 
earning capacity.
---------------------------------------------------------------------------
    If mental disorders are to be rated under a single set of criteria, 
VA must enable adjudicators to take account of the many ways in which 
mental illness may manifest itself. For example, while the criteria for 
a 100 percent rating are intended to be applied to rate a very wide 
range of illnesses, they focus narrowly on profound schizophrenia.\21\ 
As such, they provide virtually no basis for assigning a 100 percent 
rating for such widely prevalent and often profoundly disabling 
conditions as major depression, PTSD, and anxiety.
---------------------------------------------------------------------------
    \21\ See http://www.schizophrenia.com/diag.php#common.
---------------------------------------------------------------------------
    Finally, VA must ensure that compensation for mental health 
conditions replaces average loss in earnings capacity. Today it does 
not! As carefully documented in a detailed 2007 report to the Veterans 
Disability Benefits Commission (``the CNA Report''), it is important in 
assessing whether compensation replaces average lost earnings to 
distinguish between physical and mental disabilities. The CNA Report 
shows that average VA compensation for physical disabilities 
approximated lost earnings based on non-service-connected peer group 
earnings. In contrast, however, for veterans whose primary disability 
was a mental condition VA compensation fell below lost earnings, and 
for those who were severely disabled at a young age VA compensation 
fell substantially below lost earnings.\22\ Similarly, CNA found 
substantial employment rate differentials between veterans with a 
primary physical disability and those with a mental one, with the 
average employment rate of service-disabled veterans with a mental 
health condition markedly lower than for veterans with a physical 
condition.\23\
---------------------------------------------------------------------------
    \22\ CNA Corp., ``Final Report for the Veterans' Disability 
Benefits Commission: Compensation, Survey Results, and Selected Topics 
(August 2007), 3-4. Accessed at http://www.cna.org/documents/
D0016570.A2.pdf.
    \23\ Id., 48.
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    In our view, VA must completely rewrite its rating criteria for 
mental disorders with the goal of fairness, reliability, and accuracy. 
In doing so, it must abandon principal reliance on occupational 
impairment, which has the effect of discouraging veterans from pursuing 
gainful employment and from achieving overall wellness. Criteria that 
evaluate disability on the basis of the applicable domain or domains 
that most affect an individual (as reflected in the rating criteria for 
traumatic brain injury, for example) offer a possible model for 
achieving greater reliability. Any such criteria must also reflect how 
disabling mental disorders actually are.

                   Risk of Error in C&P Examinations

    But even the most thoroughgoing revision of VA's criteria for 
rating PTSD, or mental disorders generally, will not by itself result 
in fair, accurate compensation awards. Currently, the claims-
adjudication process relies heavily on an examination conducted by a 
psychologist or psychiatrist who typically has never met (let alone 
treated) the veteran before. In addition, VA C&P examinations of mental 
health conditions have long been criticized as superficial, and 
routinely fall far short of a VA best-practice manual, which suggests 
such an examination can take three or more hours to complete.\24\ 
Years-old problems of too-hurried VA compensation examinations have not 
abated.
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    \24\ An Institute of Medicine (IOM) study on PTSD compensation 
reflected concern that VA mental health professionals often fail to 
adhere to recommended examination protocols. As an IOM panel member 
described it at a congressional hearing, ``Testimony presented to our 
committee indicated that clinicians often feel pressured to severely 
constrain the time that they devote to conducting a PTSD Compensation 
and Pension (``C&P'') examination--sometimes as little as 20 minutes--
even though the protocol suggested in a best practice manual developed 
by the VA National Center for PTSD can take three hours or more to 
properly complete.'' (Dean G. Kilpatrick, Ph.D., Committee on Veterans' 
Compensation for Post-Traumatic Stress Disorder, Institute of Medicine, 
Testimony before House Veterans' Affairs Committee Hearing on ``The 
U.S. Department of Veterans Affairs Schedule for Rating Disabilities'' 
Feb. 6, 2008, accessed at: http://veterans.house.gov/hearings/
Testimony.aspx?TID = 638&Newsid=2075&Name=%20Dean% 
20G.%20Kilpatrick,%20Ph.D.
---------------------------------------------------------------------------
    In response to a survey WWP conducted last year, more than one in 
five Wounded Warriors reported that VA C&P examination associated with 
the adjudication of their original PTSD claim was 30 minutes or less in 
duration. A recent VHA-conducted survey of its mental health clinicians 
found that over 26 percent of responding mental health providers said 
the need to perform compensation and pension examinations pulled them 
away from patient care.\25\ Hurried, or less than comprehensive, C&P 
examinations heighten the risk of adverse outcomes, additional appeals, 
and long delays in veterans receiving benefits. It bears noting that 
meaningful evaluation of a mental health condition requires a 
painstaking inquiry that often depends on developing a trusted 
relationship with a client, on probing inquiry, and on sustained 
dialogue.\26\ A brief, one-time office visit with a stranger is hardly 
conducive to such an encounter, and--disconnected from the claimant's 
community, home, and workplace or school, as applicable--provides only 
the most distant impression of the extent of disability.
---------------------------------------------------------------------------
    \25\ Chairman Patty Murray, Letter to Robert A. Petzel, Under 
Secretary for Health, Department of Veterans Affairs (October 3, 2011).
    \26\ See Gold, et al. ``AAPL Practice Guidelines for the Forensic 
Evaluation of Psychiatric Disability,'' Journal of the American Academy 
of Psychiatry and the Law, (2008) 36: S3-S49.
---------------------------------------------------------------------------
    VA mental-health compensation determinations should be based on the 
best evidence of a veteran's functional impairment associated with that 
service-connected condition. As such, we believe it is important to 
recognize the inherent limitations of C&P mental health examinations. 
An adjudication system aimed at accurately assessing functional 
impairment of a disabling mental health condition should seek a more 
reliable basis for assessment.
    We urge this Committee to press VA to revise current policy and 
give much greater weight to the findings of mental health professionals 
who are treating the veteran, and are necessarily far more 
knowledgeable about his or her circumstances. To the extent that VA 
must still rely on C&P exams, strict measures should be instituted to 
ensure much more thorough, reliable exams.

                       Individual Unemployability

    We believe there is yet another area in which VA compensation 
policy should be modernized. In this instance one of VA's compensation 
regulations has the effect of impeding many wounded veterans--
particularly those with service-incurred mental health conditions--from 
overcoming disability and regaining productive life. By way of 
background, VA regulations have long provided a mechanism to address 
the situation where the rating schedule would assign a less than a 100 
percent rating, but the veteran is nevertheless unable to work because 
of that service-connected condition. In instances where a veteran has a 
disability rating of 60 percent of or more, or at least one disability 
ratable at 40 percent or more and sufficient additional disability to 
bring the combined rating to 70 percent or more, VA may grant a 100 
percent disability rating when it determines the veteran is ``unable to 
follow a substantially gainful occupation as a result of service 
connected disabilities.'' This Individual Unemployability (IU) rating 
results in a very substantial increase in the veteran's compensation.
    While veterans receiving IU are compensated at the same monetary 
level as those who receive a 100 percent rating, the implications for 
employment drastically differ. A veteran who receives a schedular 
rating of 100 percent for a disability other than a mental health 
condition is not precluded from gainful employment. But for veterans 
receiving IU, engaging in a substantially gainful occupation for a 
period of 12 consecutive months can result in a loss of IU benefits and 
a subsequent reduction in compensation benefits.\27\ For some veterans, 
this can spell a sudden loss of as much as $1,700 in monthly income. 
Both the Institute of Medicine (IOM) and Veterans' Disability Benefits 
Commission have recognized this decrease as a ``cash-cliff'' that may 
deter some veterans from attempting to re-enter the work force.\28\
---------------------------------------------------------------------------
    \27\ 38 CFR sec. 3.343(c).
    \28\ Institute of Medicine, A 21st Century System for Evaluating 
Veterans for Disability Benefits. Committee on Medical Evaluation of 
Veterans for Disability Compensation, National Academies Press, 2007, 
250, and Veterans' Disability Benefits Commission, Honoring the Call to 
Duty: Veterans Disability Benefits in the 21st Century, October 2007, 
243.
---------------------------------------------------------------------------
    We concur with the recommendations of the IOM and Veterans' 
Disability Benefits Commission that the IU benefit should be 
restructured to encourage veterans to reenter the work force. The 
experience of the Social Security Administration (SSA)--which has had 
success piloting a gradual, step-down approach to reducing benefits for 
beneficiaries who return to employment--offers a helpful model. SSA's 
experience has shown that, for those reentering the workplace, a 
gradual rather than sudden reduction in disability benefits not only 
allowed participants to minimize the financial risk of returning to 
work, but over time participants actually increased their earning 
levels above what they would have received in disability payments.\29\ 
Inherent in this approach is the underlying assumption that individuals 
with disabilities can and will re-enter the work force if benefits are 
structured to encourage that opportunity.
---------------------------------------------------------------------------
    \29\ Social Security Administration, ``Benefit Offset Pilot 
Demonstration--Connecticut Final Report.'' September 2009, accessed at: 
http://www.ssa.gov/disabilityresearch/offsetpilot.htm.
---------------------------------------------------------------------------
    Recognizing that employment often acts as a powerful tool in 
recovery and is an important aspect of community reintegration for this 
young generation of warriors, we believe VA should revise the IU 
benefit to foster those goals.
    Compensation for service-connected disability is not only an earned 
benefit, it is critically important to most veterans' reintegration and 
economic empowerment, and particularly so for those struggling with the 
psychic wounds of war. VA has much work to do to make compensation for 
combat-related mental health conditions as fair as it should be. We 
look forward to working with the Department and this Subcommittee to 
realize that goal.

                                 
         Prepared Statement of Theodore Jarvi, Past President,
              National Organization of Veterans' Advocates

    The National Organization of Veterans' Advocates (NOVA) thanks 
Chairman Jon Runyan and Ranking Member Jerry McNerney for the 
opportunity to testify about the functional utility of the Disability 
Rating Schedule used by the Department of Veterans Affairs (VA).
    NOVA is a not-for-profit 501(c)(6) educational membership 
organization incorporated in the District of Columbia in 1993. NOVA 
represents more than 500 attorneys and agents assisting tens of 
thousands of our Nation's military veterans, their widows, and their 
families obtain VA benefits. Our primary purpose is providing quality 
training to attorneys and non-attorney practitioners who represent 
veterans, surviving spouses, and dependents before VA, the U.S. Court 
of Appeals for Veterans Claims (Veterans Court), and the U.S. Court of 
Appeals for the Federal Circuit (Federal Circuit).
    NOVA operates a full-time office in Washington, DC. Accompanying me 
is Paul Sullivan, our new NOVA Executive Director, who will assist this 
Subcommittee and staff with any followup questions regarding VA's 
disability claim adjudication process with the over-arching goal of 
assisting VA with providing timely and accurate disability compensation 
claim decisions.
    One of NOVA's regular functions is monitoring and commenting on VA 
rulemaking. In this regard, NOVA submits comments on changes in the VA 
Schedule of Rating Disabilities (VASRD). This is an area of close 
scrutiny. NOVA also files challenges to VA rule making at the Federal 
Circuit when we believe VA rule changes may harm veterans or veterans' 
access to legal representation. Most recently, NOVA is challenging VA's 
unilateral and unannounced determination that the Board of Veterans 
Appeals (BVA) would no longer be subject to a VA regulation it had 
followed for years.
    NOVA files amicus briefs on behalf of claimants before the CAVC, 
the Federal Circuit and the Supreme Court of the United States. The 
CAVC recognized NOVA's work on behalf of veterans when the CAVC awarded 
the Hart T. Mankin Distinguished Service Award to NOVA in 2000. The 
positions stated in this testimony are approved by NOVA's Board of 
Directors and represent the shared experiences of NOVA's members as 
well as my own 20-year experience representing our veterans and their 
families before VA, the Veterans Court, and Federal Circuit.
    NOVA's goals today are to work with Congress and VA to implement 
the following:

      Establish a VASRD based on impairment of earning 
capacity; focusing on the congressional requirement that VA compensate 
veterans for reductions in such capacity from service connected 
injuries, rather than totally on medically based criteria.
      Provide VA guidance concerning how vocational experts are 
to measure impairment of earning capacity.
      Establish a uniform system for evaluating medical 
disabilities using the 2007 recommendations of the Veterans' Disability 
Benefits Commission (VDBC), which featured disability standards used by 
VA's Veterans Health Administration (VHA), such as the International 
Classification of Diseases (ICD) and American Medical Association (AMA) 
guides, while retaining some of the unique conditions relevant for 
disabilities incurred during or aggravated by military service.
      Require VA to publish proposed VASRD revisions at the 
earliest possible date so an open dialogue on the issue can commence 
among interested stakeholders, especially NOVA.

PROBLEMS WITH THE VA DISABILITY RATING SCHEDULE ARE WELL KNOWN
    VA regulations in the Code of Federal Regulations are divided into 
75 different parts. Only one of those parts, Part IV, deals with the 
VASRD. There are 88 pages of narrative descriptions which attempt to 
cover nearly all of the many medical conditions that affect the human 
body and mind. VA's attempt falls short. For instance, the VASRD is not 
consistent with diagnostic classifications used by all other health 
care providers, including VHA.
    The VASRD is a unique set of disability rating criteria first 
implemented in 1933. The list of qualifying disabilities was greatly 
expanded in 1945. There were changes again in 1988 and 1996. The 
existing VASRD is not totally static, but the construct has been 
fundamentally the same for nearly 80 years. Since 2001 VA pursued an 
extensive regulation rewrite program \1\ in an effort to correct 
shortfalls in its regulations. As recently as last year, VA staff 
concluded the VASRD is ambiguous, poorly organized, stated in outdated 
or overly technical terms, and uses obsolete language.\2\
---------------------------------------------------------------------------
    \1\ http://www.va.gov/ORPM/
Summary_of_Regulation_Rewrite_Project.asp.
    \2\ VA Regulation Rewrite Project: Update January 2011, McKevitt, 
Pine, Russo.
---------------------------------------------------------------------------
    What happens when the VASRD fails to accurately identify a 
veteran's condition and/or disability? In those situations, the 
individual VA rating specialists compare a veteran's medical records to 
all the descriptions in the VASRD, and find one that comes closest (is 
analogous) to the veteran's condition. Predictably, this results in 
great variances in the official condition listed in VA records as well 
as the veteran's disability percentage. Common conditions such as 
Gastroesophageal Reflux Disease (GERD) and Irritable Bowel Syndrome 
(IBS) do not appear in the VASRD, so VA rating specialists must find 
something analogous to the veteran's symptoms. In another example of 
the incomplete VASRD, VA rating specialists have to know that veterans 
presenting with an unstable shoulder or elbow should be evaluated under 
one of the Codes for ``flail joint'' because it is an obsolete term 
unlikely to appear in the veteran's medical treatment records.
    Selecting analogous codes is a difficult task for VA rating 
specialists who do not have medical training. VASRD remains incomplete 
and flawed as proven by the wide variation in disability payments found 
in VA ratings in different States and regions for veterans with similar 
ailments. Errors in VA adjudications arise not only from the employment 
of new and inexperienced claims adjudicators, but also from the 
difficulty in applying the VASRD.
    Dispositions of veterans' appeals by the Veterans' Court provide an 
indication of the scope of VA's significant problem harming our 
veterans. In 2010 the Veterans' Court disposed of 4,959 VA appeals. Of 
those, only 741, or 15 percent, of BVA appeal decisions were affirmed. 
Only 854, or 17 percent, of BVA decisions were dismissed for technical 
reasons. The Veterans Court found an astounding 3,062 VA decisions to 
be in error, in whole or in part, a staggering 62 percent. Not all of 
these VA errors were due to problems with the VASRD. However, many VA 
errors were traced back to VA's inadequate rating schedule. Because 
only about 10 percent of all BVA decisions are appealed, the likelihood 
exists that the problems are much wider spread than this measure 
suggests.

HOW ARE VETERANS AFFECTED?
    If it is difficult for VA rating officials and VA appeals experts 
to apply the VASRD, then NOVA asks Congress to consider the serious 
difficulties faced by unrepresented veterans with complex disability 
compensation benefits claims. Veterans are still barred by law from 
obtaining legal assistance until they have been denied by VA for at 
least one condition at the Regional Office level. Unrepresented 
veterans must contend with finding, reading, and understanding VA's 
complex regulations on how to pursue their claims. Then veterans must 
somehow find and decode the VASRD as it applies to their specific 
disability claim decision. Because VA's rating schedule is so complex, 
our veterans might as well be handed the keys to the Starship 
Enterprise and told to explore the universe.
    If a veteran is dissatisfied with a VA rating and seeks a private 
medical evaluation of his or her condition, the veteran's physician 
must be literally educated anew on the VASRD's obsolete and incomplete 
requirements. Private physicians rarely have time for such complicated 
tasks, even if they are willing to address the questions raised by 
faulty VA adjudication.
    When the veteran's claim is adjudicated, VA's rating decision 
occasionally contains the VASRD code number which VA applies to the 
disability, but no more. The veteran is not provided with a copy of the 
VA examination used to rate the claim. The veteran is not alerted to 
the possibility that other VASRD codes may be equally applicable, or to 
the fact the rating was arrived at through the process of an analogous 
rating, or the range of severity of the condition within the VASRD code 
used.
    Lack of information about how the VASRD codes are used 
significantly impacts the veteran's disability rating, often with a low 
rating as well as isolating the veteran from meaningful participation 
in adjudication of the claim. If the veteran later obtains legal 
representation, the representative starts out with a messy denial, or a 
minimal grant of benefits, flowing from an adjudication in which the 
veteran submitted little or no evidence because he could not understand 
VA's complex and adversarial VASRD-based system.

ARE CURRENT EFFORTS ENOUGH?
    NOVA remains concerned VA's Regulation Rewrite Project is 
unfinished. NOVA remains pessimistic about the final product that may 
eventually emerge from VA's Regulation Rewrite Project. Our concern is 
well founded, based on prior VASRD revisions.
    For instance, a final rule amending 38 CFR 4.75 through 4.84a was 
published in the Federal Register on November 10, 2008, at 73 FR 66543. 
This rule revised portions of the rating schedule addressing eye 
disabilities. Blind veterans are some of our most disabled, but VA's 
cumbersome revisions rendered obtaining accurate and timely decisions 
very difficult. This is doubly true because VA frequently elects to use 
non-medical doctor examiners to evaluate medically complex conditions. 
For example, VA often uses non-medical doctor optometrists to opine on 
complex medical questions such as the etiology of retinitis pigmentosa, 
or Leibers Optic Atrophy.
    Another instance in which VA amendments of the VASRD worked to 
veterans' disadvantage is in the evaluation of spinal disabilities. In 
August 2003, the VA amended the VASRD by revising the portion dealing 
with spine disabilities. No one disputes the spine is a central element 
of the body, carrying an elaborate nerve network which operates the 
arms, neck, and legs. Back conditions are one of the most common kinds 
of all veterans' claims, and these conditions are often the most 
painfully disabling.
    Despite the centrality of the spine in the body system, and the 
frequency with which back claims occur, the highest rating available in 
the VA's 2003 amendments for either the cervical or lumbar spine was 40 
percent, absent ankylosis, a rare condition.\3\ A higher rating was 
available, but only if the veteran is prescribed a certain amount of 
``bed rest'' for his back condition.\4\ A 40 percent rating means a 
veteran with a profoundly painful back condition cannot even qualify as 
being unemployable under 38 CFR Sec. 4.16 \5\ unless the veteran finds 
a doctor willing to prescribe bed rest. The lack of a ``bed rest'' 
prescription often means compensation rated at 40 percent, or $541 per 
month, compared with a more accurate rating of 100 percent, or $2,673 
per month. This represents a potential loss of more than $25,000 in 
disability benefits per year for the remainder of the veteran's life.
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    \3\ Ankylosis means fusion, which is 0 degrees of Range of Motion.
    \4\ 38 CFR Sec. 4.71a, DC 5243, Note 1 [For purposes of evaluations 
under diagnostic code 5243, an incapacitating episode is a period of 
acute signs and symptoms due to intervertebral disc syndrome that 
requires bed rest prescribed by a physician and treatment by a 
physician.]
    \5\ Sixty percent is the schedular requirement for unemployability 
consideration.
---------------------------------------------------------------------------
    The hitch here is doctors often do not and will not prescribe ``bed 
rest'' for a bad back. It is contraindicated and possibly medical 
malpractice to do so.\6\
---------------------------------------------------------------------------
    \6\ ``Bed Rest for Acute Low-Back Pain and Sciatica (Review)'' 
Hagen, Hilde, Jamtvedt, Winnem; The Cochrane Library, 2009, Issue 4; 
``Treatment of Acute Low Back Pain--Literature Review'' Knight, Deyo, 
Staiger, Wipf; Uptodate.com, March 10, 2011. UpToDate is a clinical 
decision support system that helps clinicians provide patient care 
using current evidence to answer clinical questions quickly at point of 
care.
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    Another area of concern relates to dental disorders. The VASRD (VA 
Diagnostic Code 9913) provides for compensation for tooth loss only 
when there is bone loss due to in-service trauma or disease. While 
service connection for treatment purposes only may be granted for loss 
of teeth in service where there is no bone loss, such tooth loss 
without bone loss can also be very painful and disabling. We must ask 
why there is no provision for compensation in such circumstances.
    There are many other examples. The VASRD is unresponsive to new 
diseases, developments, or advances in medical knowledge. Currently, 
when a VA rating specialist adjudicates a claim for GERD or IBS, the VA 
employee will find no Disability Code for those common conditions. 
Similarly, other more exotic conditions are absent.
    What is the rating specialist to do in such circumstances? VA must 
go to 38 CFR Sec. 4.20, which states, ``When an unlisted condition is 
encountered it will be permissible to rate under a closely related 
disease or injury in which not only the functions affected, but the 
anatomical localization and symptomatology are closely analogous.'' VA 
rating specialists rarely ask medical experts what is most 
``analogous'' to the veteran's condition. Instead, VA staff engage in a 
hit-or-miss estimate, often to the veteran's detriment.
    VA's Diagnostic Codes (DC) should be regularly updated to provide 
new DCs and evaluative criteria for new conditions, and VA rating 
specialists should be directed to seek medical expertise before 
selecting analogous DCs.

WHAT SHOULD BE DONE?
    To determine what should be done to provide the greatest benefits 
for our veterans, we can look to the past for guidance to avoid 
repeating preventable and harmful mistakes.
    In May 2005, the Veterans' Disability Benefits Commission (DRBC), 
established by Congress to review benefits going to disabled veterans 
and the survivors of deceased veterans, held meetings in Washington, 
D.C. Congress instructed it to examine three specific issues:

      the ``appropriateness'' of compensation and other 
benefits for disabled veterans and for the survivors of veterans who 
died from causes related to military service;
      ``the appropriateness of the level of such benefits''; 
and
      ``the appropriate standard . . . for determining whether 
a disability or death of a veteran should be compensated.''

    The 13-member DRBC, chaired by retired Army Lieutenant General 
James Terry Scott, then asked a distinguished panel of experts \7\ (the 
``Committee'') about (1) the advantages and disadvantages of adopting 
other universal medical diagnostic codes rather than the unique VA 
system, and (2) the advantages and disadvantages of using established 
guides for evaluation of permanent impairment (Guides) instead of the 
VASRD.
---------------------------------------------------------------------------
    \7\ The Committee on Medical Evaluation of Veterans for Disability 
Compensation. See Chap 8 [Other Diagnostic Classification Systems and 
Rating Schedules], A 21st Century System for Evaluating Veterans for 
Disability Benefits. National Academies Press, 2007.
---------------------------------------------------------------------------
    The resulting report of the Committee was far more comprehensive 
than any study or collection of anecdotal complaints compiled on the 
subject before or since. The Committee considered alternative 
diagnostic classification codes such as the International 
Classification of Diseases (ICD) maintained by the World Health 
Organization, the Social Security Administration system for its 
disability benefits program based loosely on the ICD-9-CM, and the 
American Medical Association Guides to the Evaluation of Permanent 
Impairment.
    The Committee compared the relative strengths and weaknesses of 
each system. They noted how VASRD contains numerous instances of 
outdated terms and names, especially in the orthopedic section of the 
musculoskeletal and neurological systems, which have not changed since 
1945. For instance it noted that VA raters must know that Parkinson's 
disease should be rated as paralysis agitans.
    The Committee commented that traumatic brain injury (TBI) is the 
signature injury of the war in Iraq, but the VASRD's diagnostic code 
for brain disease due to trauma (DC 8045) had not been revised since 
1961. They found that VA raters are directed to evaluate TBI according 
to its numerous neurological consequences, ``such as hemiplegia, 
epileptiform seizures, facial nerve paralysis, etc.,'' and there is no 
other guidance in the VASRD for the rater to consider. This is a heavy 
burden to place on VA raters, and an impossible task for veterans who 
are trying to advocate on their own.
    The Committee recognized switching to an entirely new system of 
disability codes would have significant consequences, but it pointed 
out that if VA must update its own VASRD, the same difficulties will 
arise. They found the cost of switching to a different set of codes 
would also be offset by the benefits veterans would gain by having a 
system aligned with modern medical practice and recordkeeping.
    Based on its analysis, the Committee made two recommendations which 
sought to incorporate favorable features of both the ICD and the AMA 
Guides. They were:

          Recommendation 8-1. VA should adopt a new classification 
        system using the International Classification of Diseases (ICD) 
        and the Diagnostic and Statistical Manual of Mental Disorders 
        (DSM) codes. This system should apply to all applications 
        claims?, (apply to all applications?) including those that are 
        denied. During the transition to ICD and DSM codes, VA can 
        continue to use its own diagnostic codes, and subsequently 
        track and analyze them comparatively for trends affecting 
        veterans and for program planning purposes. Knowledge of an 
        applicant's ICD or DSM codes should help raters, especially 
        with the task of properly categorizing conditions.

          Recommendation 8-2. Considering some of the unique conditions 
        relevant for disability following military activities, it would 
        be preferable for VA to update and improve the Rating Schedule 
        on a regular basis rather than adopt an impairment schedule 
        developed for other purposes.

NOVA's RECOMMENDATIONS

1. Establish a VASRD based on impairment to earning capacity.

    There are several steps which can be taken and should be required 
by Congress for VA to modernize its current rating schedule. NOVA 
believes vocational experts are better suited than doctors for meeting 
the intent of Congress in 38 U.S.C. Sec. 1155 (the congressional 
requirement that VA compensate veterans for reductions in earning 
capacity from service-connected injuries).
    Congress must decide whether the measurement or assessment of the 
degree of impairment of a veteran's earning capacity is a medical 
question or a vocational one. VA's VASRD treats the question 
exclusively as a medical issue. For instance, endocrinologists, 
cardiologists, or oncologists are routinely asked to determine if a 
veteran's medical condition renders him or her unemployable. This is 
totally outside the training and expertise of such specialists. In 
order to bring the VASRD into accord with the intent of the system, 
Congress should require VA to modify this medical model in favor of a 
medical/vocational model to assess a veteran's disability.
    After doctors have identified and assessed a veteran's service-
connected medical condition(s), VA should use that information to 
evaluate the impact on the veteran's earning capacity arising from the 
disability. This would be based on expert testimony of vocational 
experts who are in a better position to provide consistent impairment 
assessment of earning capacity. The use of medical personnel to assess 
earning capacity impairment defeats the goals expressed in U.S.C. 
Sec. 1155 and CFR Sec. 4.2.
    Congress should provide VA guidance concerning how vocational 
experts are to measure impairment of earning capacity to prepare VA for 
the type of vocational assessment described above. Using this baseline, 
VA should ask vocational experts to compare the degree of a veteran's 
service-connected disability, using the 10 percent increments, as in 38 
U.S.C. Sec. 1114(a) through (j) to assess percentage reduction of the 
veteran's earning capacity.
    The provisions of Sec. 1114(a) through (j) provide a progressive 
set of standards which can be used to carry out VA's goal of 
compensating veterans for lost earnings.\8\
---------------------------------------------------------------------------
    \8\ (a) While a disability is rated 10 percent monthly compensation 
shall be $127; (b) while a disability is rated 20 percent monthly 
compensation shall be $251; (c) while a disability is rated 30 percent 
monthly compensation shall be $389; (d) while a disability is rated 40 
percent monthly compensation shall be $560; (e) while a disability is 
rated 50 percent monthly compensation shall be $797; (f) while a 
disability is rated 60 percent monthly compensation shall be $1,009; 
(g) while a disability is rated 70 percent monthly compensation shall 
be $1,272; (h) while a disability is rated 80 percent monthly 
compensation shall be $1,478; (i) while a disability is rated 90 
percent monthly compensation shall be $1,661; (j) while a disability is 
rated as total monthly compensation shall be $2,769.

2. Establish a uniform system of evaluating medical disabilities using 
the informed recommendations of the Veterans' Disability Benefits 
---------------------------------------------------------------------------
Commission.

    Despite NOVA's reservations about VA regulation making in general, 
we know the VASRD needs serious attention and revision. Additionally, 
VA's use of the VASRD must become more transparent to veterans.
    Adoption of disability standards that are recognized outside VA, 
such as the ICD and AMA guides, ensures changes will not be made solely 
to save VA money at the expense of our wounded, injured, ill, and 
disabled veterans.
    NOVA urges Congress to revisit the work of the Committee and the 
Veterans' Disability Benefits Commission which Congress commissioned.
    VA rulemaking is inherently slow and, in almost every aspect of 
veterans' claims adjudication, VA makes delay its hallmark. NOVA 
fervently requests VA be pushed to publish its proposed VASRD revisions 
at the earliest possible date so an open dialogue on the issue can 
commence.
    In conclusion, NOVA thanks the Subcommittee for its interest in 
VA's rating schedule, an issue we follow with significant interest. 
NOVA's leaders and staff are prepared to provide additional examples 
and assistance to Congress and VA in our continuing cooperative effort 
to improve the delivery of accurate and timely VA disability 
compensation claim benefits to our veterans.

                                 
           Prepared Statement of Thomas J. Murphy, Director,
      Compensation Service, Veterans Benefits Administration (VBA)

    Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to testify on the state of the VA 
disability ratings schedule. The Department of Veterans Affairs (VA) 
Schedule for Rating Disabilities (rating schedule) is the engine 
through which VA is able to provide veterans with compensation for 
diseases and injuries they incur while serving our Nation. It is this 
rating schedule that guides the disability rating personnel of the 
Veterans Benefits Administration (VBA) and Department of Defense (DoD) 
in making the correct determination of the compensation benefit level 
applicable for a veteran's service-connected condition(s). The manner 
of rating veterans for their service-connected conditions has evolved 
since the 1917 War Risk Insurance Act created the first rating schedule 
that was used to calculate replacement of lost earnings for our 
veterans. This evolution continues as we update the rating schedule to 
include the signature injuries of our current wars.
    Today, I will describe the history of the rating schedule and the 
statutory basis for our current schedule, 38 United States Code 
(U.S.C.) Sec. 1155, and I will explain how VBA is actively and 
comprehensively ensuring that this legislative mandate is implemented 
effectively. To focus on the Subcommittee's concerns regarding the 
contemporary state of disability ratings, I will also describe VBA's 
current plan to ensure the rating schedule is as accurate and 
modernized as possible, to meet the needs of veterans in the 21st 
century.

I. Rating Schedule's Authority and Brief History
    Section 1155 of Title 38, U.S.C., and the statute's implementing 
regulation, at 38 Code of Federal Regulations (CFR) Sec. 4.1, require 
VA to assign veterans who are service-connected with percentage ratings 
that represent as far as practicable the average impairment in earning 
capacity resulting from diseases and injuries that were incurred or 
aggravated during active military service. This statutory and 
regulatory mandate is the current manifestation of a history of the 
rating schedule that has included various measures of disability. 
Section 1155 also provides that ``[t]he schedule shall be constructed 
so as to provide ten grades of disability, and no more, upon which 
payments of compensation shall be based,'' with increments of 10 to the 
total 100 percent. Congress sets the associated dollar amount rates of 
compensation under 38 U.S.C. Sec. 1114.
    With the outset of the first rating schedule in 1917, the law 
focused on average loss of earning capacity as the measure for 
replacement of lost income for veterans. In 1925, lawmakers switched to 
an individual occupation-based evaluation of compensation before 
returning to the original concept of average impairments of earning 
capacity without regard to occupation under a new schedule in 1933. The 
schedule would undergo future revisions, notably in 1945, the year in 
which a system was developed that forms the baseline from which VA has 
developed the current rating schedule. Particularly, the 1945 rating 
schedule introduced three basic concepts that are still evident in 
today's scheme for rating veterans: (1) compensation that is based, to 
the extent possible, on average lost earnings capacity; (2) use of 
disability evaluations, and associated compensation ranges, from 10 
percent through 100 percent disability, including a potential non-
compensable zero percent evaluation for each disability; and (3) 
disabilities organized into 14 discrete body systems--for instance, 
musculoskeletal, digestive, organs of special sense, or mental 
disorders--with unique descriptive diagnostic codes for diseases and 
injuries within each system. The current rating schedule differs from 
the 1945 rating schedule due to periodic updates to individual body 
systems throughout the years and now contains diagnostic codes for 15 
body systems. Revisions in 1961 updated the mental disorder diagnostic 
codes, which had been largely unchanged since 1933.
    Starting in 1989, VA has incrementally revised the rating schedule 
many times with consideration given to the views of Veterans Health 
Administration (VHA) clinicians, VBA disability rating personnel, 
groups of non-VA medical specialists, and comments received from 
Veterans Service Organizations (VSOs), veterans, and other public and 
private interested stakeholders in response to various Notices of 
Proposed Rule Making.

II. Increasing Focus on Rating Veterans' Disabilities: Recent Studies 
        and a New VA Rating Schedule Initiative
    With increased interest turning to veterans' benefits and care, 
deservedly so due to the return of servicemembers from recent 
conflicts, various studies and commissions since 2007 have made many 
recommendations relating to VA's disability compensation program. Some 
studies and commission reports have proposed wholly new concepts for 
rating disabilities. Some of these recommendations for improvement have 
been outside the bounds of VA's current statutory authority based on 
average impairments of earning capacity; however, some recommendations 
have been within the scope of VA's mandate from Congress.
    For example, the National Academy of Sciences' Institute of 
Medicine (IOM), in its 2007 report to the Veterans Disability Benefits 
Commission (VDBC), A 21st Century System for Evaluating Veterans for 
Disability Benefits, recommended, in part, that VA immediately update 
the current rating schedule, beginning with body systems that have been 
in place for a long time without a comprehensive update. The IOM report 
also recommended that VA devise a system for keeping the schedule up-
to-date, and that VA regularly conduct research on the ability of the 
rating schedule to predict actual loss in earnings. The report 
additionally recommended that VA regularly use the results from 
research on the ability of the rating schedule to predict actual losses 
in earnings to revise the rating system, either by changing the rating 
criteria in the schedule or by adjusting the amount of compensation 
associated with each rating.
    The 2007 VDBC report, Honoring the Call to Duty: Veteran's 
Disability Benefits in the 21st Century, recommended that priority be 
given to the mental disorders section of the rating schedule, urging 
that VA begin by updating those body systems that addressed the rating 
of post-traumatic stress disorder, other mental disorders, and 
traumatic brain injury. The report further recommended that VA address 
the other body systems until the rating schedule is comprehensively 
revised. Another recommendation, made by the President's Commission on 
Care for America's Returning Wounded Warriors in its 2007 report, 
Serve, Support, Simplify, is that the rating schedule focus on a 
veteran's ability to function directly instead of inferring it from 
physical impairments.
    One major aspect of the previously mentioned VDBC report was the 
results of a survey study by the Center for Naval Analyses (CNA) on 
disability compensation as a replacement for the average impairment in 
earning capacity. It was determined that VA compensation, on average, 
is generally appropriate relative to earned income losses. However, the 
study found, particularly, that veterans with physical disabilities are 
properly compensated, while those with mental disabilities may be 
under-compensated. The study also found that veterans entering the 
system at younger ages are generally under-compensated, while those 
entering at older ages are generally over-compensated. While the study 
provided VA with an empirical basis for developing ways to correct any 
rating inconsistencies, it also confirmed that the current rating 
schedule generally provides fair compensation for lost earnings.
    VA is moving forward with a complete revision of the rating 
schedule while understanding that the current rating schedule is in 
many aspects sufficient as an adequate proxy for earnings loss. The 
efforts VA is taking toward modernization will ensure it continues to 
effectively serve veterans.
    In October 2009, following these studies and reports, VA began a 
comprehensive revision and update of all 15 body systems contained in 
the rating schedule. VBA has implemented a project management plan 
detailing the organizational, developmental, and supporting processes 
that will result in a complete modernization of the rating schedule by 
2016. The plan calls for the application of current medical science and 
econometric earnings loss data, consistent with our charge in 38 U.S.C. 
Sec. 1155. VBA's project management plan incorporates a comprehensive, 
systematic review process for each body system, to include an initial 
public forum intended to solicit updated medical information from 
governmental and private-sector subject matter experts, as well as 
input on needed improvements in the rating schedule from the public and 
interested stakeholders, such as Veterans Service Organizations. These 
forums have gathered medical science experts and interested 
stakeholders in a single meeting to engage in challenging dialogue and 
capture current medical information, all in the most transparent manner 
possible. In 2009, VA held mini-forums for the endocrine and 
hematologic/lymphatic systems. Public forums for the mental disorder 
and musculoskeletal systems were held in 2010. In the interest of 
expediting the rating schedule revision process, in 2011, VA held 
public forums regarding eight body systems: dental and oral conditions, 
the genitourinary system, the digestive system, rheumatologic diseases 
and immune disorders, infectious diseases, the cardiovascular system, 
the respiratory system, and the system addressing the impairment of 
auditory acuity.
    As the next step in the plan, VA convened work groups of subject 
matter experts for each body system to assist in development of 
specific changes. A common theme emerging from the work groups 
analyzing the schedule is the need for a shift in focus in the rating 
criteria from a symptomatology-based system of rating to one which 
focuses on functional impairment. Subject matter experts involved with 
the revision process have concluded that while symptoms determine 
diagnosis, the translation of symptoms into functional impairments and 
overall disability is the indicator of impairment in earning capacity.
    Another important aspect of the review process for each system is 
the execution of an econometric earnings loss study. Each study will 
provide the data necessary to determine whether current compensation 
rating levels accurately reflect the average impairment in earning 
capacity for specific conditions in the current rating schedule. They 
will help identify any discrepancies between earnings loss and VA 
disability compensation by analyzing if conditions are adequately 
compensated based on current associated evaluation levels. VA is 
partnering with The George Washington University in connection with 
five body systems to analyze income and benefits data to carry out 
these studies. VA may solicit proposals from other entities to carry 
out the studies for the remaining body systems.
    To provide a more concrete example of our process, I would like to 
describe the steps VA has undertaken for one body system--the 
musculoskeletal system. In August 2010, clinical musculoskeletal 
experts, stakeholders, including Veterans Service Organizations and DoD 
officials, gathered in Washington D.C. for a public forum addressing 
musculoskeletal diseases and injuries. Following the public forum, the 
subject matter experts gathered to kick off the workgroup phase, using 
information obtained in the public forum to discuss areas of the 
current schedule potentially in need of revision. Over the next 10 
months, the workgroup held periodic in-person meetings and 
teleconferences to craft revisions to the schedule. Simultaneously, The 
George Washington University began an earnings loss study for the 
musculoskeletal system. Drafting of a proposed rule revising the system 
has begun, and VA looks forward to publishing it in the Federal 
Register for public comment. When comments are received, we will 
consider each comment to determine whether changes to the proposed 
regulations for the body system are needed and will respond to each 
comment in a published final rule. Changes to the rating schedule for 
the body system will then become effective.
    As noted earlier, VBA is committed to modernizing the rating 
schedule by 2016. Currently, proposed rules to revise three body 
systems are undergoing final review within VA, and drafts of proposed 
rules for ten more systems are underway, and all will incorporate the 
results of earnings loss studies. This week, public forums to obtain 
the input of medical experts and interested stakeholders will be 
completed for the four remaining body systems.
    While VA is nearing the completion of its modernization of the 
rating schedule, this effort does not signify the end of the 
initiative. VA intends to establish a process that requires continual 
review and more frequent updating of body systems. This will ensure 
America's veterans are compensated for their disabilities based on both 
cutting-edge medical science and the economic impacts of their 
disabilities resulting from military service.

III. Conclusion
    VA recognizes the importance of ensuring that its Schedule for 
Rating Disabilities meets the needs of veterans in the 21st century. 
Through a successful modernization and revision of the rating schedule, 
VA is anticipating and proactively preparing for the needs of veterans 
and their families. VA is currently implementing a comprehensive 
initiative to modernize the rating schedule, with input from, DoD, 
VSOs, private-sector experts, members of the public, and Congress. VA 
continues to look for ways to improve the rating schedule and will 
consider changes and improvements that appropriately compensate our 
Nation's veterans while meeting the rating schedule's statutory 
mandate. VA looks forward to continued input from this Subcommittee, 
Congress, and other stakeholders in working together to ensure the best 
possible rating schedule for our Nation's veterans and their families.

                                 
                Prepared Statement of John R. Campbell,
                 Deputy Assistant Secretary of Defense

    Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to be here today to discuss the use 
of the Department of Veterans Affairs Schedule for Rating Disabilities 
(VASRD) by the Department of Defense (DoD) in the Disability Evaluation 
System (DES). Codified in Title 38, the VASRD governs how the 
Department of Veterans Affairs (VA) compensates veterans for injuries 
and diseases acquired or aggravated during military service.
    As you know, the Integrated Disability Evaluation System (IDES) 
integrates the DoD and VA DES processes in which servicemembers receive 
a single set of physical disability examinations conducted according to 
VA examination protocols, disability ratings prepared by VA, and 
simultaneous processing by both Departments to ensure the timely and 
quality delivery of disability benefits. Both Departments use the VA 
protocols for disability examination and the VA disability rating to 
make their respective determinations. DoD determines fitness for duty 
and compensates for unfitting conditions incurred in the line of duty 
(Title 10), while VA compensates for all disabilities incurred or 
aggravated during military service for which a disability rating is 
awarded and thus establishes eligibility for other VA benefits and 
services (Title 38).
    To ensure more consistent disability ratings, the National Defense 
Authorization Act for Fiscal Year 2008 (P.L. 110-181) mandated the DoD 
to use the VASRD for disability ratings by the Physical Evaluation 
Board (PEB), including any applicable interpretation by the United 
States Court of Appeals for Veterans Claims, without exception. As a 
result, decisions on servicemember's medical retirement and disability 
compensation are tied to the VASRD. After a servicemember is declared 
unfit, VA uses the VASRD to determine the degree of disability 
resulting from the unfitting condition(s) and DoD then applies the VA 
rating to ascertain whether retirement or separation applies. A DoD 
disability rating of 30 percent or above qualifies for military 
retirement, while a disability rating below 30 percent qualifies for 
separation and severance pay.
    The VASRD compensates for the average impairment in earning 
capacity resulting from such diseases and injuries and their residual 
conditions in civil occupations, and VA compensation ratings are based 
on the degree of impairment. As a result, there are some instances 
where VASRD ratings are not always relevant to DoD's requirements. 
Sleep apnea is an example of how VASRD ratings may not accurately 
reflect the degree of disability or even unfitting conditions. Under 
the VASRD, sleep apnea requiring continuous positive airway pressure 
(CPAP) treatment, would receive a rating of 50 percent. Although this 
condition might be unfitting for some military occupational 
specialties, many other military personnel would be able to continue on 
active duty and function very well with CPAP treatment.
    VA is in the midst of a total rewrite of the VASRD and has 
solicited DoD expert participation in upcoming public workshops. We 
appreciate VA's outreach to include DoD in the body system rating 
update review, and DoD plans to continue to participate in VA's public 
meetings. DoD and VA leadership are discussing how to strengthen DoD's 
role in the VASRD rewrite process. DoD very much looks forward to 
having an active voice in future development and modernization of the 
VASRD.
    Mr. Chairman, the Department looks forward to continued 
collaboration with the VA in achieving the goal of ensuring both 
servicemembers and veterans are evaluated using the latest medical 
evaluation and diagnostic criteria. Once again, I appreciate the 
opportunity to discuss DoD's views on the modernization of the VASRD, 
and this concludes my statement.

                                 
Prepared Statement of James Terry Scott, Lieutenant General USA (Ret.),
        Chairman, Advisory Committee on Disability Compensation

    Mr. Chairman and Members of the Subcommittee: It is my pleasure to 
appear before you today representing the Advisory Committee on 
Disability Compensation. The Committee is chartered by the Secretary of 
Veterans Affairs under the provisions of 38 U.S.C. in compliance with 
P.L. 110-389 to advise the Secretary with respect to the maintenance 
and periodic readjustment of the VA Schedule for Rating Disabilities. 
Our charter is to ``(A)ssemble and review relevant information relating 
to the needs of veterans with disabilities; provide information 
relating to the character of disabilities arising from service in the 
Armed Forces; provide an ongoing assessment of the effectiveness of the 
VA's Schedule for Rating Disabilities; and provide ongoing advice on 
the most appropriate means of responding to the needs of veterans 
relating to disability compensation in the future.''
    Your letter asked me to testify on the Advisory Committee's work to 
date and my views on the work being done by the VA to update the 
disability rating system.
    The Committee has met 35 times and has forwarded two reports to the 
Secretary that addressed our efforts as of September 30, 2010 and 
fulfilled the statutory requirement to submit a report by October 31, 
2010. (Copies of these reports were furnished to majority and minority 
staff in both Houses of Congress.) The Secretary of Veterans Affairs 
responded to both reports.
    Our focus has been in three areas of disability compensation: 
Requirements and methodology for reviewing and updating the VASRD; 
adequacy and sequencing of transition compensation and procedures for 
servicemembers transitioning to veteran status with special emphasis on 
seriously ill or wounded servicemembers; and disability compensation 
for non-economic loss (often referred to as quality of life). I am 
prepared to answer questions about these areas of focus.
    After coordination with the Secretary's office and senior VA staff, 
we have added review of individual unemployment, review of the 
methodology for determining presumptions, and review of the appeals 
process as it pertains to the timely and accurate award of disability 
compensation. These issues will be addressed in our next report to the 
Secretary and the Congress.
    Regarding the current project to update the disability rating 
system, I believe the project management plan that the VA has laid out 
will achieve the goals sought by all stakeholders, including the 
Congress. The revised VASRD will be a guide for veterans, medical 
examiners and claims adjudicators that is simpler, fairer, and more 
consistent.
    The Secretary and the VBA should be commended for undertaking this 
long overdue revision which has been repeatedly called for by the 
Congress as well as numerous boards, studies, and reports. Some of you 
may recall former Senator Dole's observation at the congressional 
outbrief of the Dole-Shalala Commission where he said that the VASRD is 
600 pages of band-aids. While perhaps an overstatement, his views 
reflect those of many participants in commissions and studies.
    It is easy to understand why the can has been kicked down the road 
for a long time. The revision requires significant resources. The VA is 
working on many high priority projects that compete for resources and 
management effort.
    The revision of the VASRD is not a stand alone operation. It is 
part of a larger effort that includes electronic claims filing, use of 
disability questionnaires, and improved claims visibility at all 
stages. In my judgment, many of the current VBA initiatives depend on a 
successful and accepted revision of the rating schedule.
    Some stakeholders have expressed concern that the revision effort 
may adversely affect current and future veterans. My own view is quite 
the contrary. If properly done, the revision will simplify and expedite 
claims preparation, medical examinations, and claims adjudication. 
These will, in turn help the VBA reduce processing time and increase 
accuracy. Consistency among raters and regional offices, another 
recurring area of concern, should be improved.
    There is an inherent resistance to change that must be overcome 
through involving all stakeholders in the process and insuring that the 
purpose and results of the revision are understood.
    A concern, which I share, is that the process is not scheduled for 
completion until 2016. However, the scope and complexity of revising 
and updating all 15 body systems is daunting. The first major step, 
gathering and assembling the medical data for all body systems is well 
along. The forums at which each body system is discussed by leading 
medical experts have resulted in broad agreement on how to update 
medical terminology and medical advances.
    The work groups of subject matter experts for each body system are 
now analyzing the results of the forums in order to develop specific 
proposed changes to the schedule.
    The econometric data sought in conjunction with GWU will assist in 
determining the relationship between specific conditions and average 
impairment of earnings loss.
    The process, to include the publishing of draft changes in the 
Federal Register offers all stakeholders an opportunity to request 
clarifications and make comments. I believe this step will protect 
current and future veterans from unintended consequences as revisions 
move toward implementation.
    The Advisory Committee on Disability Compensation is involved in 
all steps in the rating schedule revision process. As an outside 
advisory committee, we are able to offer advice and suggestions 
directly to the Secretary and senior VA management. We listen closely 
to the subject matter experts from outside sources who meet with us as 
well as to the VA professionals who are leading the effort. The members 
have an opportunity to ask questions, offer suggestions, and track the 
progress of the revision. We are a sounding board for options and 
proposals. The Committee includes experience and expertise from DoD, 
VA, congressional staff, disability law, family programs, and the VSO 
community.
    In conclusion, the Advisory Committee on Disability Compensation is 
deeply involved in the VA project to revise the VASRD. We appreciate 
the openness of the VA leadership and staff to our questions and 
recommendations. We realize that even the best revision will not solve 
all the complex issues of disability compensation, but the members 
believe the updated schedule will address many of the noted 
shortcomings of the current version such as outdated medical 
terminology, outdated diagnosis and treatment regimens for illnesses 
and injuries, changes in the social and work environment, and apparent 
earnings loss disparities between mental and physical disabilities. It 
will also offer an institutional process for future updates.
    Thank you for your attention and the opportunity to testify today. 
I look forward to your questions.

                   MATERIAL SUBMITTED FOR THE RECORD

   Statement of Verna Jones, Director, National Veterans Affairs and
             Rehabilitation Commission, The American Legion

    Mr. Chairman and Members of the Committee:
    As the Nation's largest wartime veterans' service organization, The 
American Legion has been deeply involved in ensuring proper care and 
compensation for service disabled veterans since our founding in 1919. 
Every day, over 2,000 American Legion accredited service officers are 
hard at work providing advocacy free of charge to veterans in their 
often arduous quest for disability compensation for injuries and 
conditions incurred as a result of their service. These service 
officers are frontline soldiers in the fight for justice for these 
disabled veterans. Their insights, coupled with insights gleaned from 
interviews with VA staff in over fifty Regional Office Action Review 
visits over the last decade, have provided The American Legion with 
critical insight into the problems inherent in the VA Rating Schedule.
    Any attempt to reform or revise the rating schedule must begin by 
considering the overall mission and purpose of the Department of 
Veterans Affairs (VA.) To paraphrase the words of President Abraham 
Lincoln, VA exists to care for those who have borne the battle and for 
their families and their orphans. The American Legion believes 
therefore any rating schedule must be built upon the guiding principle 
of serving the disabled veteran.
    Understanding this principle, concerns of VA must be examined and 
understood in the proper context. Those with experience in the VA 
disability rating system will agree the current regulations are 
difficult for veterans and employees of VA to utilize effectively. 
However, care must be taken in revision to ensure regulations are not 
simply changed for administrative expediency that comes at the expense 
of veterans. We cannot afford to simplify for bureaucratic convenience 
if those simplifications result in an overall negative impact on 
disabled veterans.
    The adjudication of claims in a timely and accurate manner is 
perhaps the greatest challenge facing VA's service to disabled 
veterans. As of January 3, 2012 over 65 percent of pending compensation 
claims were still pending over 125 days. Accuracy figures are difficult 
to determine as VA still does not publish accuracy ratings with the 
same prominence as those for timeliness despite repeated requests from 
The American Legion and other service organizations. If VA is to 
achieve their stated goal of 98 percent accuracy and zero claims 
pending over 125 days by 2015 they will clearly need help, and some of 
that help will most likely come from a more efficiently designed rating 
schedule.
    Clarity of language and ease of use will be essential in making the 
tools adjudicators must use to fairly process veterans' claims. Simply 
rewriting the regulations will not replace the need to properly train 
those who must interpret the regulations on a daily basis to ensure 
veterans receive their fair due. Currently over half of VA's employees 
have less than 3 years experience on the job. This is a 
transformational time and that must be used to VA's benefit, shedding 
institutional biases of the past for a more agile and efficient work 
force. Of course, service to the disabled veterans must assume its 
place at the proper position of prominence. These VA employees must be 
trained on the new regulations, and that training time cannot be 
sacrificed in the service of raw output. An improperly trained staff 
would only waste the good efforts invested in the creation of the 
regulation rewrite.
    Any rewrite must also be directed toward better consistency, and 
The American Legion believes this must be considered not solely with 
regard to variations across regional offices, but also across the 
various branches of active duty service and the medical and physical 
evaluation boards. One only has to consider lawsuits such as Sabo, et 
al. v. United States to realize there are still widespread issues with 
proper application of the existing laws at the critical bridge point of 
transition between active duty and veteran status. American Legion 
personnel also are deeply involved tracking the status of disabled 
active duty servicemembers experiencing the Medical Evaluation Boards 
(MEBs) and Physical Evaluation Boards (PEBs) and have noticed 
inconsistencies across branches of service.
    Just as veterans with identical knee injuries should receive the 
same rating whether they are evaluated in Newark, NJ or Oakland, CA 
active duty servicemembers with identical injuries should be evaluated 
equally regardless of whether they serve in the Air Force, Coast Guard, 
Navy, Army or Marine Corps. Furthermore, it is only common sense that 
ratings on both sides of the green line dividing active duty and 
veteran status should be consistent. Sadly, this is not the current 
state of affairs.
    The American Legion would like to thank VA for the progress being 
made toward better inclusion of service organizations and concerned 
stakeholders in the revision process. This very week I am attending a 
review of proposed changes to the VA Schedule for Rating Disabilities 
(VASRD) and we have had regular meetings and briefings from VA as a 
part of this process. This is important. Any change to the rating 
schedule will require thought and analysis, and a proper period of 
informed consideration of changes cannot be underestimated. We hope 
this continues throughout the process, and that there is deep 
consideration of the input from organizations such as The American 
Legion and others. Our service officers are right there with VA's 
adjudicators in the frontline trenches. The input from these sources is 
incalculable and deserves heavy consideration and recognition of its 
value. Furthermore, The American Legion encourages field testing of any 
changes before any final decisions are made. Often unintended 
consequences are not immediately apparent when a regulation is rolled 
out, and the old military advice that no plan survives first contact is 
an important guiding principle.
    The rating system as a whole is indeed full of challenges. The 
mental health section is desperately in need of revision, and VA is in 
the process of addressing this. In American Legion Regional Office 
visits, this section is consistently mentioned by VA employees as the 
most difficult to interpret. Care should be exercised however. In the 
past, the diagnostic schedule for Traumatic Brain Injury was justly 
recognized as being inadequate to address the impact of the sometimes 
terrible injury. However, the system ultimately rolled out, while 
medically addressing all the proper information, was unwieldy and even 
incomprehensible to many who are required to use the new schedule on a 
daily basis.
    The American Legion is sympathetic to the line VA must walk in 
designing the rating schedule. The ratings must be complete enough to 
adequately address complex injuries, but must be clear enough to be 
interpreted by non-medical employees during the claims process. It is 
difficult, but we believe possible, to achieve this with the input of 
veterans' law experts and medical professionals as well as those 
adjudicators and service officers who utilize the system on a daily 
basis.
    This is not a new task. Daniel Cooper, Chairman of the VA Claims 
Processing Task Force noted the need to ``rewrite and organize the C&P 
Regulations in a logical and coherent manner . . .'' over a decade ago 
in October of 2001. This is an ongoing task and will require continued 
input of all interested stakeholders be they from Congress, VA, the 
service organizations or even the lawyers and medical professionals who 
also use the system.
    If there is one underlying point to remember throughout this 
process however, it is this: the disability system exists to serve 
those veterans who have suffered ongoing and often devastating effects 
in the service of this country. Every act must be considered in light 
of how well it will serve those veterans.

                                 
               Statement of Paralyzed Veterans of America

    Chairman Runyan, Ranking Member McNerney, and Members of the 
Subcommittee, Paralyzed Veterans of America (PVA) would like to thank 
you for the opportunity to provide our views on the current state of 
the Department of Veterans Affairs (VA) ratings schedule and the steps 
that are being taken to transform the ratings schedule and claims 
process into a more modern system. As you know, the VA is currently in 
the process of revising the Schedule for Rating Disabilities. 
Meanwhile, it is also in the process of transforming the entire claims 
process into a more modern system that should ensure that veterans will 
receive an accurate ratings decision the first time.
VA Schedule for Rating Disabilities
    The amount of disability compensation paid to a service-connected 
disabled veteran is determined according to the VA Schedule for Rating 
Disabilities (VASRD), which is divided into 15 body systems with more 
than 700 diagnostic codes. In 2007, the congressionally mandated 
Veterans Disability Benefits Commission (VDBC), established by Public 
Law 108-136, the ``National Defense Authorization Act of 2004,'' 
recommended in its final report that the VA regularly update the 
Schedule for Rating Disabilities. Likewise, the Institute of Medicine 
(IOM) Committee on Medical Evaluation of Veterans for Disability 
Compensation, supported this idea in its report ``A 21st Century System 
for Evaluating Veterans for Disability Benefits'' recommending that the 
VASRD be regularly revised to reflect the most up-to-date understanding 
of disabilities and how disabilities affect veterans' earnings 
capacity.
    In line with these recommendations, the Veterans Benefits 
Administration (VBA) is currently engaged in the process of updating 
all 15 of the body systems. Additionally, it has committed to regularly 
updating the entire VASRD every 5 years. As VBA indicated in its 
statement before the Subcommittee at the hearing on January 24, 2012, 
the review process for all 15 body systems is in various stages of 
completion, ranging from interim final rules being written to already 
having been posted for public review in the Federal Register.
    Meanwhile, in order to help implement the recommendations of the 
VDBC, Congress established the Advisory Committee on Disability 
Compensation (ACDC) in Public Law 110-389 to advise the Secretary on 
``. . . the effectiveness of the schedule for rating disabilities . . . 
and . . . provide ongoing advice on the most appropriate means of 
responding to the needs of veterans relating to disability compensation 
in the future.'' In its 2009 ``Interim Report'' and its first 
``Biennial Report'' dated July 27, 2010, the Advisory Committee 
recommended that the VBA follow a coordinated and inclusive process 
while reviewing and updating the Schedule for Rating Disabilities. 
Specifically, the ACDC recommended that veterans service organization 
(VSO) stakeholders be consulted several times throughout the review and 
revision process, both before and after any proposed rule is published 
for public comment.
    While VBA has held a number of public forums and made some other 
good faith efforts to include greater VSO participation, the process 
itself does not allow input during the crucial decisionmaking period. 
Because these public forums were conducted at the very beginning of the 
rating schedule review process, veterans service organizations were not 
able to provide informed comment, as the VBA had not yet undertaken 
review or research activities.
    VSOs and other stakeholders were invited to offer comments and 
suggestions before the VBA working groups were even created. As a 
result, while the discussions from the public forums may be part of the 
official record, the insight and information provided during these 
forums was likely never considered by the working groups once they were 
established. As the ACDC noted, it would have been helpful to include 
the experience and expertise of VSOs during their deliberations on 
revising the VASRD. With this in mind, the soon-to-be-released FY 2013 
Independent Budget will recommend that the VBA should involve veterans 
service organizations throughout the process of reviewing and revising 
each body system in the rating schedule, not only at the beginning and 
end of its deliberative process. Moreover, the VBA should conduct 
regular after-action reviews of the rating schedule update process, 
with veterans service organization participation so that it may apply 
``lessons learned'' to future body system updates. Additionally, we 
highly encourage the Subcommittee and full Committee to carefully 
review any proposed rules that would change the VASRD, particularly if 
such rules would change the basic nature of veterans' disability 
compensation.
Quality of Life
    One of the most important aspects of a revision to the ratings 
schedule for PVA and its members is the consideration of quality of 
life as a component of a new ratings schedule. PVA's opinion has always 
been that the schedule for rating disabilities is meant to reflect more 
than just the average economic impairment that a veteran faces. VA 
disability compensation also takes into consideration the impact of a 
lifetime of living with a disability and the everyday challenges 
associated with that disability. This approach reflects the fact that 
even if a veteran holds a job, when he or she goes home at the end of 
the day, that person is still disabled.
    While seriously disabled veterans have the benefit of many adaptive 
technologies to assist with employment, these technologies do not help 
them overcome the many challenges presented by other events and 
activities that unimpaired individuals can participate in. Most spinal 
cord injured veterans no longer have the ability to conceive children. 
Most of them cannot perform normal bowel and bladder functions or 
easily bathe themselves. Many cannot play ball with their children or 
carry them on their shoulders. Many severely disabled veterans suffer 
from potential negative stereotypes due to disability in all aspects of 
their lives.
    This matter was researched a great deal by the IOM Committee on 
Medical Evaluation of Veterans for Disability Compensation in its 
report, ``A 21st Century System for Evaluating Veterans for Disability 
Benefits,'' released in 2007. IOM recommended that the current VA 
disability compensation system be expanded to include compensation for 
non-work disability (also referred to as ``non-economic loss'') and 
loss of quality of life.
    Under the current VA disability compensation system, the purpose of 
the compensation is to make up for average loss of earning capacity, 
whereas the operational basis of compensation is usually based on 
medical impairment. Neither of these models generally appears to 
incorporate non-economic loss or quality of life into the final 
disability ratings, though special monthly compensation (SMC) does in 
some limited cases. The IOM report stated:

          In practice, Congress and VA have implicitly recognized 
        consequences in addition to work disability of impairments 
        suffered by veterans in the Rating Schedule and other ways. 
        Modern concepts of disability include work disability, non-work 
        disability, and quality of life (QOL). . . .''

    The Veterans Disability Benefits Commission (VDBC), which was 
mandated by Congress, spent more than 2 years examining how the rating 
schedule might be modernized and updated. Reflecting the 
recommendations of the comprehensive study of the disability rating 
system by the IOM, the VDBC in its final report issued in 2007 
recommended:

          The veterans disability compensation program should 
        compensate for three consequences of service-connected injuries 
        and diseases: work disability, loss of ability to engage in 
        usual life activities other than work, and loss of quality of 
        life.

    Ultimately, the IOM Report, the VDBC, and the President's 
Commission on Care for America's Returning Wounded Warriors (the Dole-
Shalala Commission) all agreed that the current benefits system should 
be reformed to include non-economic loss and quality of life as a 
factor in compensation.
    With regards to the question of how to quantify quality of life for 
certain service-disabled veterans for compensatory purposes, PVA 
believes an important benchmark to examine would be how ``regular need 
for aid and attendance (A&A)'' is assessed. The need for regular A&A is 
measured against enumerated criteria that have to do with meeting basic 
human needs (answering the call of nature, protection from hazards of 
daily living, etc.) insofar as a catastrophic disability has impeded 
the ability to address those needs. As with the demonstrated ``need'' 
for something, quality of life is an abstraction that, while 
subjective, can be predicated on differentiating objective indicators 
of a veterans potential for success (notwithstanding his or her 
disability) based on education level, rank, employment, and similar 
factors.
Mental Disorders Ratings Schedule
    PVA also has serious concerns about potential changes to the mental 
disorders rating table that have been discussed and may be proposed to 
create an entirely new methodology for rating mental health disorders, 
such as PTSD. Since this proposal was developed entirely after the 
public forum conducted by the Veterans Health Administration and VBA in 
January 2010, it has essentially been done without any VSO input. The 
VSO community has only been afforded two additional opportunities to be 
updated on the activities of VBA with regards to revising the mental 
health disorders component of the VASRD.
    Despite very little information being provided, we have concluded 
that VBA has decided to go beyond updating or revising the schedule, 
and instead are intending to completely discard the current system 
entirely and develop a dramatically different process for rating and 
compensating veterans for service-connected mental health disorders. 
Based on briefings we received in 2011, it seems that the VBA intends 
to implement a mental health disorders rating schedule that looks only 
at how often a veteran was unable to work effectively. If this is in 
fact the approach that VBA has chosen, then it has apparently developed 
a ratings schedule completely contradictory to the long stated purpose 
of veterans' disability compensation.
    PVA is particularly appalled by the mere suggestion that this is an 
acceptable method to rate a veteran's service connected disability. It 
blatantly ignores the far greater impact that a disability has on that 
veteran's quality of life and ability to accomplish activities of daily 
living. If VBA does in fact present a revised ratings schedule that 
presumes to rate veterans according to inability to perform work, this 
Subcommittee, and in fact all of Congress, should vigorously oppose 
this plan. While VBA has the regulatory authority to update and revise 
the VASRD, considering the limited transparency to the process, it will 
be important for Congress to look closely at any changes being 
proposed. Most importantly, Congress must ensure that such revisions 
adhere strictly to the law which requires that the levels of disability 
compensation are based on the principle of the ``average loss of 
earnings capacity'' as required by statute.
    To ensure that the revisions accurately reflect the intent of the 
law and substantially address the disparities found by the studies 
cited in this article, the IB veterans service organizations strongly 
recommend that VA conduct extensive testing of the revised criteria 
against cases rated under the existing criteria prior to publication of 
a proposed revision. The test should include both the new rating 
criteria and revised disability examination protocols. It is only 
through such testing, the results of which can be used to support the 
proposed revisions that veterans can be assured that the new criteria 
corrects past inequities.
Variability in the IDES/MEB Process
    Currently, the process for evaluating servicemembers through the 
integrated disability evaluation system (IDES) and the Medical 
Evaluation Board (MEB) contains too much variability across military 
departments and between the VA and the Department of Defense (DoD). 
While VA rates a disability based on diminished earning capacity, DoD 
evaluates based simply on the fitness to serve, two altogether 
differing lenses of assessment in the philosophical and practical 
sense. It is important to remember, however, that the VA's disability 
evaluation examines the veteran as a whole with the combination of all 
possible disabilities being rated. Meanwhile, the DoD only evaluates to 
the limit of determining fitness to serve, and no more. This can 
produce a result where a Marine who has incurred a spinal cord injury 
that has left him as a quadriplegic might receive a 60 percent 
evaluation for spinal cord injury from DoD then a 100 percent rating 
from VA for the same injury. PVA believes this disparity in valuation 
can be resolved by adopting one standard across all military 
departments and VA, perhaps by adding a ``readiness'' evaluation for 
servicemembers to the Disability Benefits Questionnaires (DBQ) used to 
rate veterans.
The ``Treating Physician Rule''
    In the past, VA referred to VHA Directive 2000-029, Provision of 
Medical Opinions by VA Health Care Practitioners, to provided veterans 
with an efficient means of obtaining a medical opinion from their VA 
treating clinicians when being considered for a rating from VBA. 
However, VA revised this directive, presumably once the higher courts 
began rejecting the treating-physician rule, to impede a veteran's 
ability to obtain a medical opinion from his VA treating physicians to 
support a VA disability claim. The VA typically cites the case of 
Guerrieri v. Brown considered by the United States Court of Appeals for 
Veterans Claims (CAVC) to support its rejection of the ``treating 
physician'' rule. In that case, the Court rejected the rule because it 
``might raise a conflict with the VA's evaluative process outlined in 
38 CFR Sec. 3.303.'' Guerrieri, 4 Vet. App. at 472. Thus, the Court's 
rejection of the ``treating physician'' rule was based on its 
interpretation of 38 CFR Sec. 3.303.
    The reasons VA proffered for adopting the directive made the case 
for why it was necessary. In fact, the Directive specifically states 
that ``restrictions on the ability of VA health care providers to 
provide statements and opinions for VA patients are inconsistent with 
the goal of VHA to provide comprehensive care and place a serious 
burden on veterans who depend on VHA for their care.'' The VHA did 
reiterate the point that this policy must be implemented in a way that 
avoids inappropriate VHA participation in the claims adjudication 
process that determines eligibility for VA disability benefits. The 
definition of ``inappropriate'' in this case may require further 
discussion. However, to altogether close off this means of accurately 
assessing the nature and severity of a veteran's condition only adds to 
the inefficiency that typifies the VA claims adjudicative process.
    Once this avenue to substantiating a claim had been cut off, 
veterans were forced to heavily rely on the findings of C&P examiners 
who neither had first-hand knowledge of a claimant's medical condition 
and prognosis nor provided the hands-on medical care necessary to fully 
appreciate the medical history beyond what could be gleaned from a VA 
claims file. PVA believes that the original provisions of VHA Directive 
2000-029 should be reinstated in order to allow a veteran to 
substantiate his or her claim for disability based on medical treatment 
he or she received within the VA. While opinions have called into 
question the objectivity of a medical care provider's opinion when 
substantiating his or her patient's condition, we see no reason why the 
``treating physician's'' opinion should be marginalized, as is 
currently the case in the claims process.
    PVA appreciates the opportunity to express our views on the ongoing 
revision of the VASRD. We cannot emphasize enough that the final 
outcome of any revisions should place the interests of the veteran 
first and foremost. We look forward to working with the Subcommittee to 
ensure that veterans receive the best possible determination for 
benefits in the most efficient manner possible. Thank you.

                                 
      Statement of Jim Vale, Director, Veterans Benefits Program,
                      Vietnam Veterans of America

    Chairman Runyan, Ranking Member McNerney and Members of the 
Committee, Vietnam Veterans of America (VVA) thanks you for the 
opportunity to present our statement for the record on ``Rating the 
Rating Schedule--The State of VA Disability Ratings in the 21st 
Century.'' We would also like to thank you for your overall concern 
about the VA Rating System that is impacting our troops and veterans, 
especially the current generation of war fighters returning home today 
who are suffering from Post-Traumatic Stress Disorder (PTSD).
    We are deeply concerned with the state of our VA Disability Rating 
System, and share many of the same concerns as our fellow Veteran 
Service Organizations regarding the need to compensate disabled 
veterans for their loss of ``Quality of Life'' and other economic 
losses in addition to compensating for ``average impairments of earning 
capacity.'' Rather than repeating what has already been said, we would 
like to focus our comments on the problems with the VA Disability 
Rating System when the VA rates claims for Post-Traumatic Stress 
Disorder (PTSD).

The Current VASRD is Grossly Inadequate for Rating PTSD Because It 
        Ignores Fundamental Differences Among Various Psychiatric 
        Disorders
    VA regulations have historically adopted the nomenclature and 
diagnostic criteria of the American Psychiatric Association's 
Diagnostic and Statistical Manual of Mental Disorders (DSM).\1\ The DSM 
recognizes the differences among the various psychiatric disorders 
(e.g., psychoses, like schizophrenia, and neurosis, like PTSD). Some 
psychiatric disorders are organic in nature, some are acquired and some 
are congenital. Some are chronic, some are intermittent and acute. Yet 
the rating schedule completely ignores such differences. Instead, it 
lumps all psychiatric disorders together and evaluates them under the 
exact same list of symptoms.\2\ This is both inherently inconsistent 
and illogical. The DSM diagnostic criteria are expressly adopted, but 
fundamental differences among various psychiatric disorders are 
virtually ignored.
---------------------------------------------------------------------------
    \1\ 38 CFR Sec. 4.125(a).
    \2\ 38 CFR Sec. 4.130.
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The VA Should Initially Undertake a Comprehensive Review of the Rating 
        Schedule In Concert With Medical, Psychiatric and Vocational 
        Experts
    New rating criteria should be developed that take into account not 
only impairment in industrial capacity, but also the psychiatric 
effects of physical disability and the effect of physical and 
psychiatric disability on the veteran's quality of life. VVA often 
advocates for a ``Veterans' Health Care System,'' rather than a health 
care system that happens to be for veterans, based on the unique nature 
of veterans' disabilities. Such disabilities are incurred in unique 
ways and have unique consequences. It is the very nature of a veteran's 
disability that demands a system of evaluating disabilities that keeps 
pace with technology, current medical standards and practices, 
socioeconomic factors and individual self-esteem.
VA Does Not Follow Their Own Procedures
    As mentioned by previous VVA Veterans Benefits Program Directors in 
prior VVA testimony, local Veterans Health Administration (VHA) 
officials routinely do not provide adequate training, materials, or 
time to examining clinicians to let them do their job correctly in 
performing C&P exams. An excellent example is the ``Best Practices 
Manual for Adjudication of PTSD Claims.'' VA examiners should be 
trained in these ``Best Practices'' and given sufficient time by their 
clinic directors to successfully complete their job. We frequently hear 
complaints from veterans that their C&P exam lasted only 20 minutes. 
This is inadequate per IOM standards:

          ``It is critical that adequate time be allocated for this 
        assessment. Depending on the mental and physical health of the 
        veteran, the veteran's willingness and capacity to work with 
        the health professional, and the presence of comorbid 
        disorders, the process of diagnosis and assessment will likely 
        take at least an hour or could take many hours to complete. . . 
        . Unfortunately, many health professionals do not have the time 
        or experience to assess psychiatric disorders adequately or are 
        reluctant to attribute symptoms to a psychiatric disorder.'' 
        \3\
---------------------------------------------------------------------------
    \3\ National Research Council. ``2 Diagnosis and Assessment.'' 
Post-Traumatic Stress Disorder: Diagnosis and Assessment. Washington, 
DC: The National Academies Press, 2006. Available: http://www.nap.edu/
openbook.php?record_id=11674&page=17. (last visited January 30, 2012).

    Examiners are required by law to review a claimant's entire claims 
file and medical record.\4\ Unfortunately, it is common for veterans to 
appear for a C&P exam and discover their examiner has not reviewed or 
even been provided their claims folder.
---------------------------------------------------------------------------
    \4\ 38 CFR Sec. 4.2.
---------------------------------------------------------------------------
    If VA properly used their own manual, policy, procedures, rules, 
trained their employees properly, gave them proper tests, and let their 
professionals do their job correctly; almost all VA staff would get it 
right the first time. This would obviate the need to ``churn'' claims 
back and forth in the system. Add to this effective supervision and VA 
would greatly increase their accuracy and output.

VA Should Use the Best Medical Science To Accurately Diagnose and 
        Assess PTSD
    The Institute of Medicine (IOM) report of June 16, 2006 presented 
the best medical science as to how to accurately diagnose and assess 
PTSD. Unfortunately, VA does not follow these recommendations, even 
though VA commissioned and paid for this study. If VA were to use the 
PTSD assessment protocols and guidelines as strongly suggested by the 
Institutes of Medicine back in 2006,\5\ our veteran warriors would 
receive the accurate mental health diagnoses needed to assess their 
PTSD.
---------------------------------------------------------------------------
    \5\ National Research Council. ``2 Diagnosis and Assessment.'' 
Post-Traumatic Stress Disorder: Diagnosis and Assessment. Washington, 
DC: The National Academies Press, 2006. Available: http://www.nap.edu/
openbook.php?record_id=11674&page=1. (last visited January 30, 2012).
---------------------------------------------------------------------------
International Classification of Diseases (ICD) 9/10
    VVA at this time does not support the adoption of ICD 9/10 to 
replace the VASRD and DSM codes for mental health disabilities. There 
are too many differences that would increase the confusion and 
complexity for VA raters trying to rate PTSD claims. For example, ICD 
9/10 lacks DSM-IV criterion A2 for PTSD.\6\
---------------------------------------------------------------------------
    \6\ Id. p. 14.
---------------------------------------------------------------------------
Diagnostic and Statistical Manual of Mental Disorders (DSM)-IV
    We are waiting for the revision of the DSM-IV (scheduled to be 
revised by 2013). Preliminary evidence suggests there will be further 
separation of some mental health classifications. We feel the VASRD 
should reflect these latest medical advancements in classification of 
mental health conditions and follow the revised DSM standards.
Disability Benefit Questionnaires (DBQ)
    VA describes DBQs as ``. . . streamlined medical examination forms 
designed to capture essential medical information for purposes of 
evaluating VA disability compensation and/or pension claims from 
veterans or servicemembers.'' \7\ DBQs are designed to closely follow 
the VASRD, and increase consistency and accuracy of VA rating decisions 
by replacing traditional C&P medical opinions with ``Turbotax-like'' 
questionnaire for doctors to quickly point and click when evaluating 
veterans. This potentially reduces the amount of reading a VA rater 
must do when rating a claim. VVA supports the use of DBQs, but cautions 
DBQs are only as good as the VASRD they are based on.
---------------------------------------------------------------------------
    \7\ U.S. Dept. of Veterans Affairs, Fact Sheet: Disability Benefit 
Questionnaires. http://benefits. va.gov/TRANSFORMATION/disabilityexams/
docs/DBQ_Fact_Sheet.doc.
---------------------------------------------------------------------------
    In closing, on behalf of VVA National President John Rowan and our 
National Officers and Board, I thank you for your leadership in holding 
this important hearing on this topic that is literally of vital 
interest to so many veterans, and should be of keen interest to all who 
care about our Nation's veterans. I also thank you for the opportunity 
to speak to this issue on behalf of America's veterans.

             Vietnam Veterans of America Funding Statement
                            January 30, 2011

    The national organization Vietnam Veterans of America (VVA) is a 
non-profit veterans' membership organization registered as a 501(c)(19) 
with the Internal Revenue Service. VVA is also appropriately registered 
with the Secretary of the Senate and the Clerk of the House of 
Representatives in compliance with the Lobbying Disclosure Act of 1995.
    VVA is not currently in receipt of any Federal grant or contract, 
other than the routine allocation of office space and associated 
resources in VA Regional Offices for outreach and direct services 
through its Veterans Benefits Program (Service Representatives). This 
is also true of the previous two fiscal years.
    For Further Information, Contact:

        Executive Director for Policy and Government Affairs
        Vietnam Veterans of America
        (301) 585-4000, extension 127

                                 
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