Under the existing, or “legacy” system, the military’s disability evaluation process begins at a military treatment facility when a physician identifies a condition that may interfere with a servicemember’s ability to perform his or her duties. On the basis of medical examinations and the servicemember’s medical records, a medical evaluation board (MEB) identifies and documents any conditions that may limit a servicemember’s ability to serve in the military. The servicemember’s case is then evaluated by a physical evaluation board (PEB) to make a determination of fitness or unfitness for duty. If the servicemember is found to be unfit due to medical conditions incurred in the line of duty, the PEB assigns the servicemember a combined percentage rating for those unfit conditions, and the servicemember is discharged. Depending on the overall disability rating and number of years of active duty or equivalent service, the servicemember found unfit with compensable conditions is entitled to either monthly disability retirement benefits or lump sum disability severance pay. In addition to receiving disability benefits from DOD, veterans with service-connected disabilities may receive compensation from VA for lost earnings capacity. VA’s disability compensation claims process starts when a veteran submits a claim listing the medical conditions that he or she believes are service-connected. In contrast to DOD’s disability evaluation system, which evaluates only medical conditions affecting servicemembers’ fitness for duty, VA evaluates all medical conditions claimed by the veteran, whether or not they were previously evaluated in DOD’s disability evaluation process. For each claimed condition, VA must determine if there is credible evidence to support the veteran’s contention of a service connection. Such evidence may include the veteran’s military service records and treatment records from VA medical facilities and private medical service providers. Also, if necessary for reaching a decision on a claim, VA arranges for the veteran to receive a medical examination. Medical examiners are clinicians (including physicians, nurse practitioners, or physician assistants) certified to perform the exams under VA’s Compensation and Pension program. Once a claim has all of the necessary evidence, a VA rating specialist determines whether the claimant is eligible for benefits. If so, the rating specialist assigns a percentage rating. If VA finds that a veteran has one or more service- connected disabilities with a combined rating of at least 10 percent, the agency will pay monthly compensation. In November 2007, DOD and VA began piloting the IDES. The IDES merges DOD and VA processes, so that servicemembers begin their VA disability claim while they undergo their DOD disability evaluation, rather than sequentially, making it possible for them to receive VA disability benefits shortly after leaving military service. Specifically, the IDES: Merges DOD and VA’s separate exam processes into a single exam process conducted to VA standards. This single exam (which may involve more than one medical examination, for example, by different specialists), in conjunction with the servicemembers’ medical records, is used by military service PEBs to make a determination of servicemembers’ fitness for continued military service, and by VA as evidence of service-connected disabilities. The exam may be performed by medical staff working for VA, DOD, or a private provider contracted with either agency. Consolidates DOD and VA’s separate rating phases into one VA rating phase. If the PEB has determined that a servicemember is unfit for duty, VA rating specialists prepare two ratings—one for the conditions that DOD determined made a servicemember unfit for duty, which DOD uses to provide military disability benefits, and the other for all service-connected disabilities, which VA uses to determine VA disability benefits. Provides VA case managers to perform outreach and nonclinical case management and explain VA results and processes to servicemembers. In August 2010, DOD and VA officials issued an interim report to Congress summarizing the results of their evaluation of the IDES pilot as of early 2010 and indicating overall positive results. In that report, the agencies concluded that, as of February 2010, servicemembers who went through the IDES pilot were more satisfied than those who went through the legacy system, and that the IDES process met the agencies’ goals of delivering VA benefits to active duty servicemembers within 295 days and to reserve component servicemembers within 305 days. Furthermore, they concluded that the IDES pilot has achieved a faster processing time than the legacy system, which they estimated to be 540 days. Although DOD and VA’s evaluation results indicated promise for the IDES, the extent to which they represented an improvement over the legacy system could not be known because of limitations in the legacy data. DOD and VA’s estimate of 540 days for the legacy system was based on a small, nonrepresentative sample of cases. Officials planned to use a broader sample of legacy cases to compare against pilot cases with respect to processing times and appeal rates; however inconsistencies in how military services tracked information and missing VA information (i.e., on the date VA benefits were delivered) for legacy cases, precluded such comparisons. While our review of DOD and VA’s data and reports generally confirmed DOD and VA’s findings as of early 2010, we found that not all of the service branches were achieving the same results, case processing times increased between February and August 2010, and other agency goals are not being met. Since our December report, processing times have worsened further and the agencies have adjusted some goals downward. Servicemember satisfaction: Our reviews of the survey data as of early 2010 indicated that, on average, servicemembers in the IDES pilot had higher satisfaction levels than those who went through the legacy process. However, Air Force members—who represented a small proportion (7 percent) of pilot cases—were less satisfied. Currently, DOD and VA have an 80-percent IDES satisfaction goal, which has not been met. For example, 67 percent of servicemembers surveyed in March 2011 were satisfied with the IDES. Satisfaction by service ranged from 54 percent for the Marine Corps to 72 percent for the Army. Average case processing times: Although the agencies were generally meeting their 295-day and 305-day timeliness goals through February 2010, the average case processing time for active duty servicemembers increased from 274 to 296 days between February and August 2010. Among the military service branches, only the Army was meeting the agencies’ timeliness goals as of August, while average processing times for each of the other services exceeded 330 days. Since August 2010, timeliness has worsened significantly. For example, active component cases completed in March 2011 took an average of 394 days—99 days over the 295-day target. By service, averages ranged from 367 days for the Army to 455 days for the Marine Corps. Meanwhile, Reserve cases took an average of 383 days, 78 days more than the 305-day target, while Guard cases took an average of 354 days, 49 days more than the target. Goals to process 80 percent of cases in targeted time frames: DOD and VA had indicated in their planning documents that they had goals to deliver VA benefits to 80 percent of servicemembers within the 295-day (active component) and 305-day (reserve component) targets. For both active and reserve component cases at the time of our review, about 60 percent were meeting the targeted time frames. DOD and VA have since lowered their goals for cases completed on time, from 80 percent to 50 percent. Based on monthly data for 6 months through March 2011, the new, lower goal was not met during any month for active component cases. For completed Reserve cases, the lower goal was met during one of the 6 months and for Guard cases, it was met in 2 months. The strongest performance was in October 2010 when 63 percent of Reserve cases were processed within the 305-day target. Based on our prior work, we found that--as DOD and VA tested the IDES at different facilities and added cases to the pilot--they encountered several challenges that led to delays in certain phases of the process. Staffing: Most significantly, most of the sites we visited reported experiencing staffing shortages and related delays to some extent, in part due to workloads exceeding the agencies’ initial estimates. The IDES involves several different types of staff across several different DOD and VA offices, some of which have specific caseload ratios set by the agencies, and we learned about insufficient staff in many key positions. With regard to VA positions, officials cited shortages in examiners for the single exam, rating staff, and case managers. With regard to DOD positions, officials cited shortages of physicians who serve on the MEBs, PEB adjudicators, and DOD case managers. In addition to shortages cited at pilot sites, DOD data indicated that 19 of the 27 pilot sites did not meet DOD’s caseload target of 30 cases per manager. Local DOD and VA officials attributed staffing shortages to higher than anticipated caseloads and difficulty finding qualified staff, particularly physicians, in rural areas. These staffing shortages contributed to delays in the IDES process. Two of the sites we visited—Fort Carson and Fort Stewart—were particularly challenged to provide staff in response to surges in caseload that occurred when Army units were preparing to deploy to combat zones. Through the Army’s predeployment medical assessment process, large numbers of servicemembers were determined to be unable to deploy due to a medical condition and were referred to the IDES within a short period of time, overwhelming the staff. These two sites were unable to quickly increase staffing levels, particularly of examiners.