Report to the Chairman and Ranking

Minority Member, Committee on

Veterans’ Affairs, U.S. Senate

United States General Accounting Office

GAO

December 2002 VETERANS’

BENEFITS

Claims Processing

Timeliness

Performance

Measures Could Be

Improved

GAO-03-282
VBA’s key claims processing timeliness measure does not clearly reflect how

quickly it decides claims by veterans and their families for disability

compensation, pension, and dependency and indemnity compensation

benefits. Although each program has its own purpose and eligibility

requirements, VBA does not set a separate timeliness goal for each in its

annual performance plan. This obscures the significant differences in the

time required to complete decisions under each program. Fiscal year 2002

timeliness, using VBA’s measure, was 223 days; however, disability

compensation decisions took significantly longer than decisions under the

other two programs. A disability compensation decision requires more

evidence, in part because VBA must determine that each claimed disability is

related to the veteran’s military service.

Time to Complete VBA Compensation and Pension Claims, Fiscal Year 2002, by Program

VBA does not yet have adequate data to measure the timeliness of its new

specialized regional office claims processing teams but is working to

improve its data. VBA’s inventory management system, which allows it to

report and analyze teams’ timeliness, relies on an existing information

system that does not provide timeliness data on all cases. VBA is acting to

improve the completeness of the data in the existing system. Meanwhile,

VBA is deploying new software that it expects should enable it to capture

more complete and accurate data. VBA expects to deploy this new software

at all regional offices by October 2003.

VETERANS’ BENEFITS

Claims Processing Timeliness

Performance Measures Could Be

Improved

www.gao.gov/cgi-bin/getrpt?GAO-03-282.

To view the full report, including the scope

and methodology, click on the link above.

For more information, contact Cynthia

Bascetta at (202) 512-7101 or

bascettac@gao.gov.

Highlights of GAO-03-282, a report to the

Chairman and Ranking Minority Member,

Committee on Veterans’ Affairs, United

States Senate

December 2002

The Chairman and Ranking

Minority Member, Senate

Committee on Veterans’ Affairs,

asked GAO to assist the Committee

in its oversight of the Veterans

Benefits Administration’s (VBA)

efforts to improve compensation

and pension claims processing. As

part of this effort, GAO assessed

(1) whether VBA’s key timeliness

measure clearly reflects its

performance and (2) whether it has

adequate data to measure the

timeliness of its newly created

specialized claims processing

teams.

GAO recommends that the

Veterans Benefits Administration

establish claims processing

timeliness goals for its three main

disability programs, incorporate

these goals into VA’s strategic plan

and annual performance plan, and

report its progress in meeting these

goals in its annual performance

report.

VA concurred in principle with

GAO’s recommendation. VA

provided additional information to

clarify the possible timeframe for

implementing timeliness measures

and goals by program.
Page i GAO-03-282 VBA Performance Measurement

Letter 1

Results in Brief 2

Background 3

VBA’s Key Timeliness Measure Does Not Clearly Reflect Its

Performance 4

VBA Does Not Have Adequate Data to Measure Timeliness of

Claims Processing Teams, but Is Making Progress 6

Conclusions 8

Recommendation 9

Agency Comments and Our Response 9

Appendix I Comments from the Department of Veterans Affairs 11

Table

Table 1: Claims Processing Teams and Related Timeliness

Measures 7

Figure

Figure 1: Average Days to Complete Rating-Related Cases, Fiscal

Year 2002, by Program 5

Abbreviations

CAPS Claims Automated Processing System

CPI claims process improvement

IMS inventory management system

MAP-D Modern Award Processing–Development

VA Department of Veterans Affairs

VBA Veterans Benefits Administration

VSA veterans service representative

VSC Veterans Service Centers

VSR veterans service representatives

Contents
Page 1 GAO-03-282 VBA Performance Measurement

December 19, 2002

The Honorable John D. Rockefeller IV

Chairman

The Honorable Arlen Specter

Ranking Minority Member

Committee on Veterans’ Affairs

United States Senate

Timely compensation and pension claims processing has been a

longstanding problem for the Veterans Benefits Administration (VBA). In

fiscal year 2002, VBA took an average of more than 7 months to complete

veterans’ claims for disability compensation and pension benefits. In order

to ensure that veterans and their families receive more timely decisions,

the Secretary of Veterans Affairs (VA) tasked VBA to reduce claims

processing time to an average of 100 days by the end of fiscal year 2003. As

part of this effort, the Secretary created the VA Claims Processing Task

Force to recommend ways to improve the claims process. In October 2001,

the task force recommended actions to improve claims processing. VBA is

in the process of implementing these recommendations.

You asked that we assist the Committee in its oversight of VBA’s efforts to

improve its compensation and pension claims processing. As part of this

request, you asked that we examine VBA’s timeliness performance

measures. Specifically, we assessed (1) whether VBA’s key timeliness

measure clearly reflects its performance and (2) whether VBA has

adequate data to measure the timeliness of its newly created specialized

claims processing teams. We analyzed VBA’s claims processing timeliness

data. We reviewed VA’s strategic plan, most recent performance plan, and

report and VBA’s implementation plan for its claims process improvement

(CPI) initiative. We also talked with VBA officials about the quality of its

existing timeliness data and its efforts to improve data quality. In addition,

we observed how performance data are collected and used and how the

reorganization of claims processing was being implemented at the

Milwaukee, Wisconsin, and San Diego, California, regional offices. These

were two of the four pilot sites for VBA’s CPI initiative, which is

implementing task force recommendations to organize claims processing

around specialized teams to handle specific stages of the claims process at

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-03-282 VBA Performance Measurement

all 57 regional offices.1 We focused our work on VBA’s compensation and

pension programs, since they account for most VBA benefit claims and

were the subject of the task force’s report. We conducted our review from

August through November 2002 in accordance with generally accepted

government auditing standards.

VBA’s key timeliness measure does not clearly reflect its speed in claims

processing in that it is a composite figure for three distinct disability

benefit programs—disability compensation, pension, and dependency and

indemnity compensation. While the aggregate timeliness for deciding

rating-related claims in fiscal year 2002 was 223 days, it was 241 days for

disability compensation claims, 126 days for pension claims, and 172 days

for dependency and indemnity compensation claims. Thus, using one

measure obscures VBA’s timeliness in completing claims under each of the

three different programs. Similarly, VBA has not set separate timeliness

goals for these programs even though each program has its own purpose,

beneficiaries, eligibility criteria, and evidence requirements. For example,

disability compensation is provided to veterans with service-connected

disabilities, while pensions are for low-income veterans with disabilities

that are not related to their military service.

VBA does not yet have adequate data to measure the timeliness of its new

specialized regional office claims processing teams. VBA is developing

new timeliness measures appropriate to the work of these specialized

teams. However, the current data are not as complete and accurate as they

could be, because the agency currently relies on an information system

that was not used to capture data on all cases. VBA instructed its regional

offices to report on how fully they use the system and to provide estimated

timeframes for full compliance with data entry requirements. Meanwhile,

VBA is deploying new software applications that are expected to enable it

to routinely capture information on all cases. VBA anticipates being able

to better quantify its performance, determine baselines for future

comparisons, and identify problems for corrective actions when these

applications are deployed at all regional offices by October 2003.

This report contains a recommendation to the Secretary of Veterans

Affairs to direct VBA to establish separate claims processing timeliness

goals for each of its three main disability programs, incorporate these

 1

The other pilot sites were the Reno, Nevada, and Roanoke, Virginia, regional offices.

Results in Brief
Page 3 GAO-03-282 VBA Performance Measurement

goals into VA’s strategic plan and its annual performance plans, and report

its progress in meeting these goals in its annual performance reports.

VBA’s compensation program pays monthly benefits to veterans with

service-connected disabilities (injuries or diseases incurred or aggravated

while on active military duty), according to the severity of the disability.

VBA’s pension program pays monthly benefits to wartime veterans who

have low incomes and are permanently and totally disabled for reasons

not service-connected.2

 In addition, VBA pays dependency and indemnity

compensation to some deceased veterans’ spouses, children, and parents.

In fiscal year 2001, VBA paid over $20 billion in disability compensation to

about 2.3 million veterans and over 300,000 survivors. VBA also paid over

$3 billion in pensions to over 600,000 veterans and survivors.

Veterans may submit their disability claims to any of VBA’s 57 regional

offices, which process these claims in accordance with VBA regulations,

policies, procedures, and guidance. Regional offices assist veterans in

obtaining evidence to support their claims. This assistance includes

helping veterans obtain the following documents: records of service to

identify when the veteran served, records of medical treatment provided

while the veteran was in military service, records of treatment and

examinations provided at VA health-care facilities, and records of

treatment of the veteran by nonfederal providers. Also, if necessary for

decision on a claim, the regional office arranges for the veteran to receive

a medical examination or opinion. Once this evidence is collected, VBA

makes a rating decision on the claim. Veterans with multiple disabilities

receive a single composite rating.3

 For pension claims, VBA determines

whether the veteran meets certain criteria.4 The regional office then

notifies the veteran of its decision.

 2

VBA also pays pensions to surviving spouses and unmarried children of deceased wartime

veterans.

3

VA’s ratings are in 10-percent increments, from 0 to 100 percent. Generally, VA does not

pay disability compensation for disabilities rated at 0 percent. Basic monthly payments

range from $103 for 10 percent disability to $2,163 for 100 percent disability.

4

Veterans are eligible for pensions if they meet the following criteria: (1) served in a period

of war, (2) are permanently and totally disabled for reasons not related to military service,

and (3) have incomes below VA’s thresholds.

Background
Page 4 GAO-03-282 VBA Performance Measurement

In May 2001, the Secretary created the VA Claims Processing Task Force

to develop recommendations to improve the compensation and pension

claims process and to help VBA improve claims processing timeliness and

productivity. The task force observed that the work management system

in many VBA regional offices contributed to inefficiency and an increased

number of errors. The task force attributed these problems primarily to

the broad scope of duties performed by regional office staff—in particular,

veterans service representatives (VSR). For example, VSRs were

responsible for both collecting evidence to support claims and answering

claimants’ inquiries. In October 2001, the task force made short- and

medium-term recommendations for improving the claims process and

reorganizing regional office operations. In particular, the task force

recommended that VBA change its claims processing system to one that

utilizes specialized teams. VBA is in the process of implementing many of

these recommendations and has established a new claims processing

structure that is organized by specific steps in the claims process. For

example, regional offices will have teams devoted specifically to claims

development, that is, obtaining evidence needed to evaluate claims.

VBA’s key timeliness measure does not clearly reflect its timeliness in

completing claims because it fails to distinguish among its three disability

programs—disability compensation, pension, and dependence and

indemnity compensation. The programs’ processing times differ, in part

because they have different purposes, beneficiaries, eligibility criteria, and

evidence requirements to decide each type of claim. Despite these

differences, VBA sets an annual performance goal that is an average of all

three programs.

For the purposes of reporting its performance to the Congress and other

stakeholders, VBA adopted one key timeliness measure—the average time

to complete decisions on rating-related cases.5

 This measure includes

original and reopened disability compensation, pension, and dependency

and indemnity compensation claims—in other words, claims for three

VBA compensation and pension programs.6

 VBA sets an annual goal for

average days to complete rating-related cases in VA’s annual performance

 5

VBA also reports the average number of days that rating-related actions are pending. In

fiscal year 2002, VBA’s actual pending timeliness was 174 days.

6

Reopened claims are filed by a veteran who is already receiving benefits, for example, a

claim to increase a veteran’s disability rating. Reopened dependency and indemnity

compensation claims are counted with reopened disability compensation claims.

VBA’s Key Timeliness

Measure Does Not

Clearly Reflect Its

Performance
Page 5 GAO-03-282 VBA Performance Measurement

plans and subsequently reports its actual timeliness—and whether it met

its goal—in VA’s annual performance reports to the Congress.

This one measure does not reflect the differences in the timeliness for the

three programs. In general, the disability compensation program requires

the most evidence and thus these claims generally take longer to complete,

as shown in figure 1. While VBA’s average fiscal year 2002 timeliness was

223 days, disability compensation decisions (which represented about

83 percent of total decisions) took almost twice as long to complete as

pension decisions. The aggregate measure understated the time required

to decide disability compensation claims by 18 days and overstated the

time to decide pension claims by 97 days and dependency and indemnity

compensation claims by 51 days.

Figure 1: Average Days to Complete Rating-Related Cases, Fiscal Year 2002, by

Program

Note: Compensation includes some reopened dependency and indemnity compensation claims and

VBA actions that can lead to adjustments in disability compensation ratings.

Average days to complete

0

50

100

150

200

250

compensation

Pension

Dependency and indemnity compensation

Program

Source: Veterans Benefits Administration.

241

126

172

Disability
Page 6 GAO-03-282 VBA Performance Measurement

Each program has a different claims processing time frame because each

has different evidence requirements resulting from their different purposes

and eligibility requirements. For example, a major reason why disability

compensation claims take longer is that VBA must not only establish that

each claimed disability exists, but that each was caused or aggravated by

the veteran’s military service. This process requires substantial evidence

gathering, with VBA actively assisting the claimant. To prove serviceconnection, VBA obtains the veteran’s service medical records and may

request medical examinations and treatment records from VA medical

facilities. In contrast, pension claims do not require evidence that the

claimed disabilities were service-connected. Also, veterans aged 65 and

older do not have to prove that they are disabled to receive pension

benefits as long as they meet the income and military service

requirements.

VBA does not yet have adequate data to measure timeliness or set goals

for its specialized regional office teams but is making progress in obtaining

complete and accurate data. While VBA is in the process of developing

performance measures and goals for these teams and has developed a

system to report timeliness data, it acknowledges that the quality of its

existing timeliness data needs to be improved.

Implementation of the task force recommendations to reorganize claims

processing requires that VBA measure its performance for its teams.

Where teams were once responsible for processing claims from receipt to

completion, teams are now responsible for specific phases of the process.

With complete and accurate data, VBA will be able to measure the

timeliness of the individual teams and, therefore, will be able to hold them

accountable for their performance as well as identify processing delays

and take corrective actions. VBA expects to be able to obtain more

complete and accurate data to measure team performance once it deploys

new software applications that should enable it to consistently capture

data for all cases and will rely less on manual data entry. VBA expects

these applications to be fully deployed by October 2003.

The task force recommended that regional office Veterans Service Centers

(VSC), which process compensation and pension claims, be reorganized

into specialized teams. The task force identified six types of teams—triage,

pre-determination, rating, post-determination, appeals, and public

contact—based on different phases of the claims process. From February

through April 2002, VBA piloted its CPI initiative, which included

reorganizing regional offices’ VSCs into specialized teams at four regional

VBA Does Not Have

Adequate Data to

Measure Timeliness

of Claims Processing

Teams, but Is Making

Progress
Page 7 GAO-03-282 VBA Performance Measurement

offices. The CPI task team noted that processing teams needed clearly

defined and reasonable performance expectations and recommended

timeliness measures for each team, as shown in table 1. VBA began to

implement the CPI model at its other regional offices in July 2002.

Table 1: Claims Processing Teams and Related Timeliness Measures

Team Description Measures

Triage Reviews, controls, processes,

and routes all incoming mail. If

claim can be resolved at once

without a claims folder, the triage

team does so.

Average control time—time

from date claim received to

date claim is established in

VBA’s claims processing

information system.

Pre-determination Develops claims. Tasks include

requesting and obtaining all

evidence needed to support a

claim.

Average days to initiate

development.

Average days to complete

development.

Rating Makes decisions on ratingrelated claims.Days from the date the claim is

certified ready to rate to the

date the rating is prepared.

Post-determination Approves the establishment of

benefits, authorizes payments to

beneficiaries, and notifies

claimants of VBA’s decisions.

Days from completion of the

rating decision to the

authorization of benefits.

Appeals Processes appeals and remands

of regional office decisions.

Number of appeals correctly

certified to the Board of

Veterans Appeals.

Public contact Answers telephone and inperson inquiries and refers

claims to triage and informs

veterans of the status of their

claims.

Days to complete routine

correspondence.

Days to complete special

correspondence (e.g.,

responses to congressional

inquiries).

Source: Veterans Benefits Administration.

VBA has implemented an inventory management system (IMS) that allows

it to measure and report team timeliness, nationally and at the regional

office level. This system should provide VBA with the necessary data to

develop annual performance goals, which can be used to hold itself and its

regional offices accountable for improving timeliness. IMS should also

provide useful data to assist VBA management with identifying problems

in specific regional offices and allowing regional office management to

identify problems with specific teams for further analysis and corrective

actions.

However, VBA acknowledges that its IMS reports are not as useful as they

can be, because IMS receives incomplete data from an existing VBA
Page 8 GAO-03-282 VBA Performance Measurement

system—the Claims Automated Processing System (CAPS). Not all

regional offices are fully using CAPS; thus, CAPS data that are sent to IMS

are incomplete. CAPS was not being used to collect timeliness data for all

cases; rather, it was used to provide regional office staff with information

on the status of cases expected to take more than 30 days to process. In

order to provide a short-term improvement in the completeness of IMS

data, in May 2001 VBA instructed regional offices to ensure that certain

data were consistently entered into CAPS; for example, dates when

evidence was requested and received. In May 2002, VBA instructed

regional offices to report on how fully they use CAPS and to provide

estimated timeframes for complete compliance with CAPS data entry

requirements. As of August 2002, VBA reported that about 81 percent of its

pending cases had records in CAPS.7

According to VBA officials, as the regional offices implement new

software applications, the ability of IMS to provide complete and accurate

timeliness reports is expected to improve. For example, Share, the new

claims establishment application, will automatically input data on a case

into other applications, including CAPS. This will help ensure more

complete and consistent data in the short term, because there will be a

CAPS record for each case. Eventually, the Modern Award Processing–

Development (MAP-D) application will replace CAPS as a source of

timeliness data for IMS. MAP-D will, according to VBA officials, contain

records for all cases and will reduce the amount of manual data entry

required, thus reducing the potential for data input errors. VBA plans to

have all regional offices using Share and MAP-D by October 2003.

VBA has chosen to use one aggregate performance measure for timeliness

for its disability compensation, pension, and dependency and indemnity

compensation programs. Such a measure does not reflect VBA’s

performance for programs with different purposes, beneficiaries, and

claims processing requirements. In particular, VBA’s timeliness in deciding

disability compensation claims is assessed under a measure that also

covers pension and dependency and indemnity compensation claims,

which take much less time. Consequently, the aggregate measure can

make the processing time for VBA’s largest and most time-consuming

 7

Some regional offices reported more than 100 percent of pending cases in CAPS.

According to VBA officials, this is because the CAPS record was not properly closed in

every case.

Conclusions
Page 9 GAO-03-282 VBA Performance Measurement

workload look better than it really is. As long as VBA uses an aggregate

timeliness measure, it will not be able to clearly demonstrate to the

Congress, top VA management, and claimants how well it is meeting its

objectives to serve disabled veterans and their families.

VBA’s reorganization of its regional office compensation and pension

claims processing operations into specialized teams underscores the need

for complete and accurate data on the timeliness of the phases of the

claims process. VBA does not yet have adequate data for timeliness

measurement purposes but is making progress in ensuring that it does.

Once VBA has deployed its new claims processing software applications at

all of its regional offices, it expects to be able to better measure the

timeliness of its specialized teams, provide baselines for future

comparisons, quantify team performance goals, and identify problems

needing corrective action. In this way, local and team-specific information

can be used to hold regional offices and their specialized teams

accountable for improving timeliness.

We recommend that the Secretary of Veterans Affairs direct the Under

Secretary for Benefits to establish separate claims processing timeliness

goals for its three main disability programs, incorporate these goals into

VA’s strategic plan and annual performance plans, and report its progress

in meeting these goals in its annual performance reports.

In its written comments on a draft of this report (see app. I), VA concurred

in principle with our recommendation. VA noted that VBA plans to

develop performance measures for each of its programs, as part of VA’s

effort to restructure its budget. However, VA believes establishing new

goals by program should be deferred until at least fiscal year 2005, because

establishing new goals at this time risks obscuring its focus on achieving

the Secretary’s 100-day goal by the end of fiscal year 2003. We believe

developing timeliness measures for each program would not obscure

VBA’s focus on performance improvement, but would provide a more

accurate picture of claims processing timeliness, because the new

measures would reflect the differences among the three programs.

Because VBA already has the necessary data, we believe that it should

report timeliness by program for fiscal year 2004 and set goals by program

for fiscal year 2005, at the latest.

VA also suggested that we based our calculations of average days to

complete disability compensation, pension, and dependency and

Recommendation

Agency Comments

and Our Response
Page 10 GAO-03-282 VBA Performance Measurement

indemnity compensation decisions, as shown in figure 1, on original claims

only. We based our calculations on all eight types of claims (known as end

products) that VBA uses to calculate rating-related timeliness. These end

products include both original and reopened claims.

As agreed with your offices, unless you publicly announce its contents

earlier, we plan no further distribution of this report until 1 day after its

issue date. At that time, we will send copies of this report to the Secretary

of the Department of Veterans Affairs, appropriate congressional

committees, and other interested parties. We will also make copies of this

report available to others on request. The report will also be available at

no charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions regarding this report, please call me

at (202) 512-7101 or Irene Chu, Assistant Director, at (202) 512-7102. In

addition to those named, Susan Bernstein, Martin Scire, and Greg Whitney

made key contributions to this report.

Cynthia A. Bascetta

Director, Education, Workforce,

 and Income Security Issues
Appendix I: Comments from the Department

of Veterans Affairs

Page 11 GAO-03-282 VBA Performance Measurement

Appendix I: Comments from the Department

of Veterans Affairs
Appendix I: Comments from the Department

of Veterans Affairs

Page 12 GAO-03-282 VBA Performance Measurement (130180)
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