Testimony Before the Subcommittee on 

Disability Assistance and Memorial 

Affairs, Committee on Veterans’ Affairs, 

House of Representatives 

United States Government Accountability Office

GAO

For Release on Delivery 

Expected at 10:30 a.m. EDT 

Thursday, October 20, 2005 VA DISABILITY BENEFITS

Routine Monitoring of 

Disability Decisions Could 

Improve Consistency 

Statement of Cynthia A. Bascetta, Director, Education, 

Workforce, and Income Security Issues 

GAO-06-120T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-06-120T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cynthia A. 

Bascetta at (202) 512-7101. 

Highlights of GAO-06-120T, a testimony 

before the Subcommittee on Disability 

Assistance and Memorial Affairs, House 

Committee on Veterans' Affairs 

October 2005

VA DISABILITY BENEFITS 

Routine Monitoring of Disability 

Decisions Could Improve Consistency 

GAO’s November 2004 report explained that adjudicators in the Department 

of Veterans Affairs often must use judgment in making disability 

compensation claims decisions. As a result, it is crucial for VA to have a 

system for routinely identifying the effect of judgment on decisional 

variations among its 57 regional offices to determine if the variations are 

reasonable and, if not, how to correct them. In 2002, GAO reported that 

state-to-state variations of as much as 63 percent in average compensation 

payments per disabled veteran indicated potential inconsistency. The nature 

of the criteria that adjudicators must apply in evaluating the degree of 

impairment due to mental disorders provides an example of the extent of 

judgment required. 

VA’s Medical Criteria for Evaluating the Degree of Impairment Due to Mental Disorders 

Degree of impairment as characterized in VA’s medical criteria 

Disability 

severity rating 

(in percent)

Totally impaired 100

Deficient in most areas such as work, school, family relations, judgment, 

thinking, or mood 70

Reduced reliability and productivity 50

Occasional decrease in work efficiency and intermittent periods of inability to 

perform occupational tasks 30

Mild or transient symptoms that decrease work efficiency and ability to perform 

occupational tasks only during periods of significant stress, or symptoms can 

be controlled by continuous medication 10

Not severe enough to interfere with occupational or social functioning or to 

require continuous medication 0

Source: VA’s Schedule for Rating Disabilities. 

GAO’s October 2005 report on decisions for joint and spine disabilities 

showed one important way to improve consistency. Specifically, regional 

offices often rely on VA’s 157 medical centers to examine claimants and 

provide medical information needed to decide the claims. However, VA has 

found inconsistency among its medical centers in the adequacy of their joint 

and spine disability exam reports that regional offices need to decide these 

claims. As of May 2005, the percentage of exam reports containing the 

required information varied across the medical centers from a low of 57 

percent to a high of 92 percent. This could adversely affect the consistency 

of disability claims decisions involving joint and spine impairments. 

Although VA has made substantial progress, more remains to be done to 

improve the level of consistency in the disability exam reports. 

The House Subcommittee on 

Disability Assistance and Memorial 

Affairs asked GAO to discuss its 

work on the consistency of 

disability compensation claims 

decisions of the Department of 

Veterans Affairs (VA). GAO has 

reported wide state-to-state 

variations in average compensation 

payments per disabled veteran, 

raising questions about decisional 

consistency. In 2003, GAO 

designated VA’s disability 

programs, along with other federal 

disability programs, as high risk, in 

part because of concerns about 

decisional consistency. Illustrating 

this issue, GAO reported that 

inadequate information from VA 

medical centers on joint and spine 

impairments contributed to 

inconsistent regional office 

disability decisions. 

What GAO Recommends

In 2004, GAO recommended that 

VA develop a plan to use data from 

a new administrative data system 

to identify indications of 

inconsistent decision making that 

need to be studied. VA concurred 

but has not yet developed such a 

plan. In October 2005, GAO 

recommended that VA develop a 

strategy for improving consistency 

of disability examination reports 

needed by regional offices to make 

proper decisions across the nation 

on claims involving joint and spine 

impairments. VA concurred. 
Page 1 GAO-06-120T 

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to discuss our work on the consistency of 

decisions that the Department of Veterans Affairs (VA) makes on veterans’ 

disability compensation claims. Ensuring that VA’s disability decisions are 

consistent across the nation is vital to ensuring the integrity of VA’s 

disability program. In 2002, we reported that wide variations existed 

across the nation in the average compensation payments per disabled 

veteran, and we recommended that VA study such indications of 

inconsistency in the decision making of its 57 regional offices.1

 As you 

know, in January 2003, GAO designated VA’s disability program, along 

with other federal disability programs, as high risk, in part because of 

concerns about the consistency of decision making.2

In December 2004, the media published data showing that the average 

compensation payment per disabled veteran varied from a low of $6,710 in 

Ohio to a high of $10,851 in New Mexico. In response, the Secretary asked 

the Office of Inspector General in December 2004 to study the reasons for 

the wide variations in average payments, and in May 2005, the Inspector 

General reported its findings and made recommendations for 

improvement.3

 As the Inspector General found, much needs to be done to 

ensure that VA renders consistent decisions across the nation. 

As you requested, my remarks today will draw upon two GAO reports. The 

first, issued in November 2004, addressed VA’s need for a systematic 

approach to identifying consistency issues that need to be studied in 

detail.4

 The second report, issued on October 12, 2005, examined VA’s 

efforts to achieve consistency among its medical centers in the quality of 

the medical information they provide to regional offices in order to make 

decisions on disability claims involving impairments of joints and the 

 1

GAO, Veterans’ Benefits: Quality Assurance for Disability Claims and Appeals 

Processing Can Be Further Improved, GAO-02-806 (Washington, D.C.: Aug. 16, 2002). 

2

GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: January 2003). 

3

VA Office of Inspector General, Review of State Variances in VA Disability 

Compensation Payments, Report No. 05-00765-137 (Washington, D.C.: May 19, 2005). 

4

GAO, Veterans Benefits: VA Needs Plan for Assessing Consistency of Decisions, 

GAO-05-99 (Washington, D.C.: Nov. 19, 2004). 
Page 2 GAO-06-120T 

spine.5 Improving the quality of the medical information for these 

impairments could improve VA’s decisional consistency. 

In summary, as we reported in November 2004, VA’s adjudicators often 

must use judgment in making disability decisions. As a result, variation is 

an inherent factor in the decision-making process. This makes it crucial 

that VA have a system for routinely identifying variations among its 57 

regional offices so that such variations can be studied to determine if they 

are within the bounds of reasonableness and, if not, how to correct the 

problem. Also, as we reported in October 2005, to achieve consistency, VA 

must deal with issues involving not only its regional offices but also its 157 

medical centers which conduct most of the disability examinations that 

regional offices rely on to provide the medical information they need to 

make disability decisions. As we reported, VA has found inconsistency 

among its medical centers in the extent to which they provide regional 

offices with exam reports containing all the medical information needed to 

ensure that regional offices make decisions awarding the appropriate level 

of benefits to veterans with joint and spine impairments. Some medical 

centers consistently provide high-quality exam reports, while others do 

not, which means the benefits awarded to veterans with similar joint and 

spine impairments could differ, depending on which medical center 

examined them. Although VA has made substantial progress in correcting 

this problem, more remains to be done to ensure that all medical centers 

provide exam reports containing adequate information for regional offices 

to make proper decisions. 

Regardless of a veteran’s employment status or level of earnings, VA’s 

disability compensation program pays monthly cash benefits to eligible 

veterans who have service-connected disabilities resulting from injuries or 

diseases incurred or aggravated while on active military duty. A veteran 

starts the disability claims process by submitting a claim to one of the 57 

regional offices administered by the Veterans Benefits Administration 

(VBA). In the average compensation claim, the veteran claims about five 

disabilities for which the regional office must develop the evidence 

required by law and federal regulations, such as military records and 

medical evidence. To obtain the required medical evidence, VBA’s regional 

offices often arrange medical examinations for claimants. For example, in 

 5

GAO, Veterans’ Disability Benefits: VA Could Enhance Its Progress in Complying with 

Court Decision on Disability Criteria, GAO-06-46 (Washington, D.C.: Oct. 12, 2005). 

Background 
Page 3 GAO-06-120T 

fiscal year 2004, VBA’s 57 regional offices asked the 157 medical centers 

administered by the Veterans Health Administration (VHA) to examine 

about 500,000 claimants and provide examination reports containing the 

medical information needed to decide the claim. 

On the basis of the evidence developed by the regional office, an 

adjudicator determines whether each disability claimed by the veteran is 

connected to the veteran’s military service. Then, by applying medical 

criteria contained in VA’s Rating Schedule, the adjudicator evaluates the 

degree of disability caused by each service-connected disability in order to 

determine the veteran’s overall degree of service-connected disability. The 

degree of disability is expressed as a percentage, in increments of 10 

percentage points—for example, 10 percent, 20 percent, 30 percent, and so 

on, up to 100 percent disability. The higher the percentage of disability, the 

higher the benefit payment received by the veteran. 

If a veteran disagrees with the regional office adjudicator’s decision on 

whether a disability is service-connected or on the appropriate percentage 

of disability, the veteran may file a Notice of Disagreement. The regional 

office then provides a further written explanation of the decision, and if 

the veteran still disagrees, the veteran may appeal to VA’s Board of 

Veterans’ Appeals. Before appealing to the board, a veteran may ask for a 

review by a regional office Decision Review Officer, who is authorized to 

grant the contested benefits based on the same case record that the 

original adjudicator relied on to make the initial decision. 

After appealing to the board, if a veteran disagrees with the board’s 

decision, the veteran may appeal to the U.S. Court of Appeals for Veterans 

Claims, which has the authority to render decisions establishing criteria 

that are binding on future decisions made by VA’s regional offices as well 

the board. For example, in DeLuca v. Brown, 8 Vet. App. 202 (1995), the 

court held that when federal regulations define joint and spine impairment 

severity in terms of limits on range of motion, VA claims adjudicators must 

consider whether range of motion is further limited by factors such as pain 

and fatigue during “flare-ups” or following repetitive use of the impaired 

joint or spine. Previous to this decision, VA had not explicitly considered 

whether such additional limitations existed because VA contended that its 

Rating Schedule incorporated such considerations. 
Page 4 GAO-06-120T 

Because adjudicators often must use judgment when deciding disability 

compensation claims, variations in decision making are an inherent 

possibility. While some claims are relatively straightforward, many require 

judgment, particularly when the adjudicator must evaluate (1) the 

credibility of different sources of evidence; (2) how much weight to assign 

different sources of evidence; or (3) disabilities, such as mental disorders, 

for which the disability standards are not entirely objective and require the 

use of professional judgment. Without measuring the effect of judgment on 

decisions, VA cannot provide reasonable assurance that consistency is 

acceptable. At the same time, it would be unreasonable to expect that no 

decision-making variations would occur. 

Consider, for example, a disability claim that has two conflicting medical 

opinions, one provided by a medical specialist who reviewed the claim file 

but did not examine the veteran, and a second opinion provided by a 

medical generalist who reviewed the file and examined the veteran. One 

adjudicator could assign more weight to the specialist’s opinion, while 

another could assign more weight to the opinion of the generalist who 

examined the veteran. Depending on which medical opinion is given more 

weight, one adjudicator could grant the claim and the other could deny it. 

Yet a third adjudicator might conclude that the competing evidence 

provided an approximate balance between the evidence for and the 

evidence against the veteran’s claim, which would require that the 

adjudicator apply VA’s “benefit-of-the-doubt” rule and decide in favor of 

the veteran. 

An example involving mental disorders also demonstrates how 

adjudicators sometimes must make judgments about the degree of severity 

of a disability. The disability criteria in VA’s Rating Schedule provide a 

formula for rating the severity of a veteran’s occupational and social 

impairment due to a variety of mental disorders. This formula is a 

nonquantitative, behaviorally oriented framework for guiding adjudicators 

in choosing which of the degrees of severity shown in table 1 best 

describes the claimant’s occupational and social impairment. 

VA Needs a System 

for Routinely 

Monitoring Variations 

Inherent in Deciding 

Disability Claims 
Page 5 GAO-06-120T 

Table 1: VA’s Medical Criteria for Evaluating the Degree of Occupational and Social 

Impairment Due to Mental Disorders 

Degree of occupational and social impairment 

as characterized in VA’s medical criteria 

Disability 

rating

(in percent)

Totally impaired 100

Deficient in most areas such as work, school, family relations, judgment, 

thinking, or mood 70

Reduced reliability and productivity 50

Occasional decrease in work efficiency and intermittent periods of 

inability to perform occupational tasks 30

Mild or transient symptoms that decrease work efficiency and ability to 

perform occupational tasks only during periods of significant stress, or 

symptoms can be controlled by continuous medication 10

Not severe enough to interfere with occupational or social functioning or 

to require continuous medication 0

Source: VA’s Schedule for Rating Disabilities. 

Note: The Veterans’ Disability Benefits Commission is currently reviewing the appropriateness of 

VA’s Rating Schedule, including the criteria for mental disorders. 

Similarly, VA does not have objective criteria for rating the degree to 

which certain spinal impairments limit a claimant’s motion. Instead, the 

adjudicator must assess the evidence and decide whether the limitation of 

motion is “slight, moderate, or severe.” To assess the severity of 

incomplete paralysis, the adjudicator must decide whether the veteran’s 

paralysis is “mild, moderate, or severe.” The decision on which severity 

classification to assign to a claimant’s condition could vary in the minds of 

different adjudicators, depending on how they weigh the evidence and 

how they interpret the meaning of the different severity classifications. 

Despite the inherent variation, however, it is reasonable to expect the 

extent of variation to be confined within a range that knowledgeable 

professionals could agree is reasonable, recognizing that disability criteria 

are more objective for some disabilities than for others. For example, if 

two adjudicators were to review the same claim file for a veteran who has 

suffered the anatomical loss of both hands, VA’s disability criteria state 

unequivocally that the veteran is to be given a 100 percent disability rating. 

Therefore, no variation would be expected. However, if two adjudicators 

were to review the same claim file for a veteran with a mental disability, 

knowledgeable professionals might agree that it would not be out of the 

bounds of reasonableness for these adjudicators to diverge by 30 

percentage points but that wider divergences would be outside the bounds 

of reasonableness. 
Page 6 GAO-06-120T 

The fact that two adjudicators might make differing, but reasonable, 

judgments on the meaning of the same evidence is recognized in the 

design of the system that VBA uses to assess the accuracy of disability 

decisions made by regional office adjudicators. VBA instructs the staff 

who review the accuracy of decisions to refrain from charging the original 

adjudicator with an error merely because they would have made a 

different decision than the one made by the original adjudicator. VBA 

instructs the reviewers not to substitute their own judgment in place of the 

original adjudicator’s judgment as long as the original adjudicator’s 

decision is adequately supported and reasonable. 

Because of the inherent possibility that different adjudicators could make 

differing decisions based on the same information pertaining to a specific 

impairment, we recommended in November 2004 that the Secretary of 

Veterans Affairs develop a plan containing a detailed description of how 

VA would (1) use data from a newly implemented administrative 

information system—known as Rating Board Automation 2000—to 

identify indications of decision-making inconsistencies among the regional 

offices for specific impairments and (2) conduct systematic studies of the 

impairments for which the data reveal possible inconsistencies among 

regional offices. VA concurred with our recommendation but has not yet 

developed such a plan. At this point, VA has now collected 1 full year of 

data using the new administrative data system, which should be sufficient 

to begin identifying variations and then assessing whether such variations 

are within the bounds of reasonableness. 
Page 7 GAO-06-120T 

Because the existing medical records of disability claimants often do not 

provide VBA regional offices with sufficient evidence to decide claims 

properly, the regional offices often ask VHA medical centers to examine 

the claimants and provide exam reports containing the medical 

information needed to make a decision. Exams for joint and spine 

impairments are among the exams that regional offices most frequently 

request.6

To comply with the DeLuca decision’s requirements for joint and spine 

disability exam reports, VHA instructs its medical center clinicians to 

make not only an initial measurement of the range of motion in the 

impaired joint or spine but also to measure range of motion after having 

the claimant flex the impaired joint or spine several times. This is done to 

determine the extent to which repeated motion may result in pain or 

fatigue that further degrades the functioning of the impaired joint or spine. 

In addition, the clinician also is instructed to determine if the claimant 

experiences flare-ups from time to time, and if so, how often such flareups occur and the extent to which they limit the functioning of the 

impaired joint or spine. However, in a baseline study conducted in 2002, 

VA found that 61 percent of the exam reports on joint and spine 

impairments did not provide sufficient information on the effects of 

repetitive movement or flare-ups to comply with the DeLuca criteria. 

We reported earlier this month on the progress VA had made since 2002 in 

ensuring that its medical centers consistently prepare joint and spine exam 

reports containing the information required by DeLuca. We found that, as 

of May 2005, the percentage of joint and spine exam reports not meeting 

the DeLuca criteria had declined substantially from 61 percent to 22 

percent. Much of this progress appeared attributable to a performance 

measure for exam report quality established by VHA in fiscal year 2004 

after both VHA and VBA had taken a number of steps to build a foundation 

 6

Because of workload issues at some VHA medical centers, 10 of VBA’s 57 regional offices 

request most of their disability exams from a private contractor, QTC Medical Services. 

These 10 regional offices are San Diego, California; Los Angeles, California; Salt Lake City, 

Utah; Seattle, Washington; Atlanta, Georgia; Winston-Salem, North Carolina; Boston, 

Massachusetts; Roanoke, Virginia; Houston, Texas; and Muskogee, Oklahoma. To assess 

the quality of QTC exam reports, VBA uses a review system separate from the system for 

reviewing the quality of VHA medical center exam reports. According to VBA officials 

responsible for reviewing QTC exam report quality, VBA deemed about 95 percent of QTC’s 

exam reports to be adequate during the quarter ending October 31, 2004. However, the 

method used to select the review sample does not provide statistically reliable results for 

any specific type of impairment, such as joint or spine impairments. 

Inconsistent Quality 

Of Disability 

Examination Reports 

Underscores Need to 

Monitor Consistency 

of Decisions 
Page 8 GAO-06-120T 

for improvement. This included creating the Compensation and Pension 

Examination Project Office, a national office established in 2001 to 

improve the disability exam process, and providing extensive training to 

VHA and VBA personnel. 

While VA made substantial progress in ensuring that its medical centers’ 

exam reports adequately address the DeLuca criteria, a 22 percent 

deficiency rate indicated that many joint and spine exam reports still did 

not comply with DeLuca. Moreover, in relation to the issue of consistency, 

the percentage of exam reports satisfying the DeLuca criteria varied 

widely across the 21 health care networks that manage VHA’s 157 medical 

centers—from a low of 57 percent compliance to a high of 92 percent. It 

should be noted that the degree of variation is likely even greater than 

indicated by these percentages because, within any given health care 

network, an individual medical center’s performance in meeting the 

DeLuca criteria may be lower or higher than the combined average 

performance for all the medical centers in that specific network. 

Therefore, in the network that had 57 percent of its joint and spine exams 

meeting DeLuca criteria, an individual medical center within that network 

may have had less than 57 percent meeting the DeLuca criteria. 

Conversely, in the network that had 92 percent of the exams meeting the 

DeLuca criteria, an individual medical center within that network may 

have had more than 92 percent satisfying DeLuca. Unless medical centers 

across the nation consistently provide the information required by 

DeLuca, veterans claiming joint and spine impairments may not receive 

consistent disability decisions. 

Further, VA has found deficiencies in a substantial portion of the requests 

that VBA’s regional offices send to VHA’s medical centers, asking them to 

perform disability exams. For example, VA found in early 2005 that nearly 

one-third of the regional office requests for spine exams contained errors 

such as not identifying the pertinent medical condition or not requesting 

the appropriate exam. However, VBA had not yet established a 

performance measure for the quality of the exam requests that regional 

offices submit to medical centers. 

To help ensure continued progress in satisfying the DeLuca criteria, we 

recommended that the Secretary of Veterans Affairs direct the Under 

Secretary for Health to develop a strategy for improving consistency 

among VHA’s health care networks in meeting the DeLuca criteria. For 

example, if performance in satisfying the DeLuca criteria continues to vary 

widely among the networks during fiscal year 2006, VHA may want to 

consider establishing a new performance measure specifically for joint 
Page 9 GAO-06-120T 

and spine exams or requiring that medical centers use automated 

templates developed for joint and spine exams, provided an in-progress 

study of the costs and benefits of the automated exam templates supports 

their use. We also recommended that the Secretary direct the Under 

Secretary for Benefits to develop a performance measure for the quality of 

exam requests that regional offices send to medical centers. 

As a national program, VA’s disability compensation program must ensure 

that veterans receive fair and equitable decisions on their disability claims 

no matter where they live across the nation. Given the inherent risk of 

variation in disability decisions, it is incumbent on VA to ensure program 

integrity by having a credible system for identifying indications of 

inconsistency among its regional offices and then remedying any 

inconsistencies found to be unreasonable. Until assessments of 

consistency become a routine part of VA’s oversight of decisions made by 

its regional offices, veterans may not consistently get the benefits they 

deserve for disabilities connected to their military service, and taxpayers 

may not trust the effectiveness and fairness of the disability compensation 

program. 

Mr. Chairman, this concludes my remarks. I would be happy to answer any 

questions you or the members of the subcommittee may have. 

For further information, please contact Cynthia A. Bascetta at (202) 512-

7101. Also contributing to this statement were Irene Chu and Ira Spears. 

Conclusions 

Contact and 

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