VA pays monthly disability compensation to veterans with service- connected disabilities (injuries or diseases incurred or aggravated while on active military duty) according to the severity of the disability. VA also pays additional compensation for some dependents––spouses, children, and parents––of veterans. In fiscal year 2008, the disability compensation program represented 78 percent, or $30.7 billion, of the cash benefits paid through VBA’s Compensation and Pension Service. In addition, VA’s pension program pays monthly benefits to wartime veterans who have low incomes and are permanently and totally disabled for reasons that are not service-connected. VA’s disability compensation claims process starts when a veteran submits a claim to one of VBA’s 57 regional offices. A service representative is then responsible for assisting the veteran in obtaining the relevant evidence to evaluate the claim. Such evidence includes veterans’ military service records, medical examinations, and treatment records from VA medical facilities and private medical service providers. Also, if necessary for reaching a decision on a claim, the regional office arranges for the veteran to receive a medical examination or opinion. Once a claim has all the necessary evidence, a rating specialist evaluates the claim and determines whether the claimant is eligible for benefits. If the veteran is eligible for disability compensation, the rating specialist assigns a percentage rating. Veterans with multiple disabilities receive a single composite rating. In addition, veterans can reopen claims for additional benefits over time from VA, for example, if a service-connected disability worsens or arises in the future. If the veteran disagrees with the regional office’s decision, he or she may begin the appeals process by submitting a written notice of disagreement to the regional office. In response to such a notice, VBA provides further written explanation of the decision, and if the veteran still disagrees, the veteran may appeal to the Board. The Board, whose members are attorneys experienced in veterans’ law and in reviewing benefit claims, may grant or deny the appeal or return the case to VBA to obtain additional evidence necessary to decide the veteran’s claim. In addition to receiving disability benefits from VA, veterans may receive disability benefits from the Department of Defense (DOD). If the military determines that a servicemember is unfit for duty because of conditions incurred in the line of duty, the military assigns a combined percentage rating for those unfit conditions using VA’s rating system as a guideline. This one-time rating, along with years of service and other factors, determines subsequent disability benefits from DOD. Unlike through VA, veterans cannot reopen claims for additional benefits over time through DOD’s disability determination process. Over the past 10 fiscal years, the total number of compensation claims decisions completed annually by VA and the average days compensation claims were pending improved, while the total number of claims pending at year end and the average days to complete a claim worsened. From fiscal year 1999 to fiscal year 2008, VA increased the number of initial compensation claims processed annually by nearly 60 percent from about 458,000 to about 729,000 (see fig. 1). Moreover, VA experienced substantial year-to-year increases in the number of claims completed between 2006 and 2008. In fiscal year 2008, compensation claims were pending an average of 123 days compared to 152 days in fiscal year 1999 (see fig. 2). While slightly higher than the average 115 days claims were pending in fiscal year 2003, this represents a marked improvement over the average 188 days claims were pending in fiscal year 2001. VA’s fiscal year 2009 average days pending goal for rating-related actions is 116 days. VA’s inventory of pending compensation claims has varied over time, but on whole has increased significantly over the last decade. From the end of fiscal year 1999 to the end of fiscal year 2008, pending claims increased by more than 65 percent from about 207,000 to about 343,000 (see fig. 3). During the same time period, the number of claims awaiting a decision longer than 6 months increased by 20 percent from about 65,000 to about 78,000. However, more recent data show that pending claims declined slightly from the end of fiscal year 2007 to 2008, and those pending more than 6 months declined almost 20 percent. The average time VA took to complete a claim has also varied over time, although the agency experienced significant increases from fiscal years 2004 to 2007. In fact, the average number of days VA took to complete claims increased from a low of 181 days in fiscal year 2004 to 200 days in fiscal year 2007. However, recent data show that VA took on average 4 days less to complete a claim in fiscal year 2008 than in fiscal year 2007 (see fig. 4). Several factors have contributed to the trends in VA’s disability workloads. First, there has been a steady increase in the number of claims filed— including those filed by veterans of the Iraq and Afghanistan conflicts. The number of compensation claims VA received annually increased about 53 percent, from about 468,000 in fiscal year 1999 to about 719,000 in fiscal year 2008. In part, VA attributes increased claims receipts to its enhanced outreach to veterans and servicemembers. VA reported that in fiscal year 2007, it provided benefits briefings to about 297,000 separating servicemembers, up from about 210,000 in fiscal year 2003. Ongoing hostilities also contribute to increased claims. For example, according to VA, the claim rate of veterans from ongoing hostilities is 35 percent. In addition, claims filed by veterans currently receiving compensation whose conditions have worsened contribute to increased claims. VA anticipates that the number of reopened claims will increase as current disability benefit recipients—many of whom suffer from chronic progressive disabilities such as diabetes, mental illness, and cardiovascular disabilities—submit claims for increased benefits as they age and their conditions worsen. In fiscal year 2008, VA received about 488,000 reopened claims for disability benefits, up 42 percent from about 345,000 in fiscal year 1999. Finally, according to VA officials, prior legislation and VA regulations have also expanded benefit entitlement, adding to the volume of claims received. In recent years, court decisions related to a 1991 law have created new presumptions of service-connected disabilities for many Vietnam veterans and prisoners of war. In addition, VA anticipates an increase in claims stemming from an October 2008 regulation change that affects how VA rates traumatic brain injuries (TBI). According to a VA official, a letter was sent to approximately 32,000 veterans notifying them that their TBI rating could potentially increase even if their symptoms had not changed. Another factor impacting VA’s claims workloads—particularly the average time to complete a claim—is the complexity of claims received. VA notes that it is receiving claims for more complex disabilities related to combat and deployments overseas, including those based on environmental and infectious disease risks and TBI. In addition, according to VA officials, veterans cited more disabilities in their claims in recent years than in the past, and these claims can take longer to complete because each disability must be evaluated separately. The number of compensation claims VA decided with 8 or more disabilities increased from 11 to 16 percent from fiscal years 2006 to 2008. Further, a number of statutes and court decisions related to VA’s disability claims process may have affected VA’s ability to improve claims processing timeliness. For example, according to VA officials, the Veterans Claims Assistance Act of 2000 added more steps to the claims process, lengthening the time it takes to develop and decide a claim. Similarly, VA has experienced workload improvements and challenges in the area of disability appeals. For example, over the past 6 fiscal years, the number of appeals resolved increased about 22 percent from over 72,000 in fiscal year 2003 to almost 88,000 in fiscal year 2008 (see fig. 5). Between fiscal years 2003 and 2008, VA also reduced the number of pending appeals by 24 percent from about 126,000 to about 95,000 (see fig. 6). However, the average time it took VA to process appeals of compensation claims—from when a veteran files a notice of disagreement to when the appeal is resolved—has trended upward from 543 days in fiscal year 2003 to 639 days—or approximately 21 months—in fiscal year 2008 (see fig. 7). Several factors contribute to the time it takes VA to resolve appeals. According to VA officials, each time appellants submit new evidence, VA must review and summarize the case for the appellant again, adding to the time it takes to resolve the appeal. Furthermore, appeals cannot be forwarded to the Board for a decision until all of a veteran’s pending claims are resolved, regardless of whether they relate to the appeal. Therefore, cases that are pending resolution of other issues can forestall final resolution for the appellant. Also, according to VA officials, processing time is further lengthened when appeals are remanded back to VBA by the Board for further work, such as correcting procedural errors and obtaining additional evidence. According to VA, in fiscal year 2008, about 18 percent of the Board’s decisions were remanded because of VBA errors that were avoidable. Many other appeals are remanded because requirements—such as the legal requirements discussed previously— change after the appeal is sent to the Board. VA has taken several steps to improve claims processing, including increasing claims processing staff, redistributing certain workloads, implementing a joint pilot with DOD to perform disability evaluations, and developing a number of other initiatives to expedite benefits to veterans. VA expects these efforts to yield improvements, but their effects are not yet known and we have identified challenges with some of these efforts. For example, over the past 4 years, VA has hired a significant number of disability claims staff, who are expected to improve the timeliness of initial claims and appeals processing. From fiscal year 2005 to fiscal year 2009, VA expects VBA’s claims processing staff to increase by 58 percent from about 7,550 to an estimated 11,948. During the same period, VA expects the Board’s staff to increase by 20 percent, from 433 to an estimated 519.