Through its disability compensation program, VA pays monthly benefits to veterans with service-connected disabilities. Under its disability pension program, VA pays monthly benefits to low-income veterans who have disabilities not related to their military service or are age 65 or older. VA also pays compensation to the survivors of certain veterans who had service-connected disabilities and of servicemembers who died while on active duty. Veterans and their survivors claim benefits at one of the Veterans Benefits Administration’s (VBA) 57 regional offices. Once the claim is received, a service representative assists the veteran in gathering the relevant evidence to evaluate the claim. Such evidence includes the veteran’s 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. Once all necessary evidence has been collected, a rating specialist evaluates the claim and determines whether the claimant is eligible for benefits. If so, the rating specialist assigns a percentage rating. Veterans with multiple disabilities receive a single composite rating. Since 2001, VBA has created 15 resource centers that are staffed exclusively to process claims or appeals from backlogged regional offices. Most of these centers focus either on making rating decisions, or on developing the information needed to evaluate claims. In addition to the traditional claims process, any member of the armed forces who has seen active duty—including those in the National Guard or Reserves—is eligible to apply for VA disability benefits prior to leaving military service through VA’s Benefits Delivery at Discharge (BDD) program or the related Quick Start program. In 2006, VA completed its consolidation of BDD rating activity into its Salt Lake City, Utah, and Winston-Salem, North Carolina, regional offices, to increase the consistency of BDD claims decisions. Also, under the Department of Defense (DOD)–VA disability evaluation system pilot program, servicemembers undergoing disability evaluations, if found medically unfit for duty, receive VA disability ratings. This rating covers both the unfitting conditions identified by the military service and conditions identified by the servicemember during the process. The rating is used by both DOD and VA to determine entitlement for disability benefits. Enacted in October 2008, the Veterans’ Benefits Improvement Act of 2008 required VA to contract for an independent, 3-year review of VBA’s quality assurance program. This review is to include, among other items, assessments of the accuracy of disability ratings and their consistency across VA regional offices. VA contracted with the Institute for Defense Analyses (IDA) to conduct this study. According to VA, IDA will provide preliminary findings in the Summer of 2010, and VA is scheduled to report to the Congress in October 2011. Under the STAR program, which was implemented in fiscal year 1999, VBA selects a random sample of completed claims decisions each month from each of its regional offices to review for accuracy. STAR reviewers assess decision accuracy using a standard checklist. For decisions affecting benefit entitlement, this review includes an assessment of whether (1) all issues in the claim were addressed; (2) assistance was provided to the claimant, as required by the Veterans Claims Assistance Act of 2000; and (3) the benefit entitlement decision was correct. If a claim has any error, VBA counts the entire claim as incorrect for accuracy rate computation purposes. The STAR reviewer then returns the case file and the results of the review to the regional office that made the decision. If an error was found, the regional office is required to either correct it or request reconsideration of the error determination. VBA uses the national accuracy rate from STAR reviews of compensation entitlement decisions as one of its key claims processing performance measures. VA also uses STAR data to estimate improper compensation and pension benefit payments. One VA consistency review activity involves conducting studies of regional offices’ decisions on specific conditions such as post-traumatic stress disorder where VBA found differences, such as in benefit grant rates, across regional offices through comparative statistical analysis. VBA uses the results of these reviews to identify root causes of inconsistencies and to target training. Under another VA consistency review activity, called inter-rater reliability reviews, VBA provides rating specialists a sample case file to assess how well raters from various regional offices agree on an eligibility determination when reviewing the same body of evidence. These reviews allow VBA officials to target a single rating issue and take remedial action to ensure the consistent application of policies and procedures nationally. Over the past decade, VBA has taken several actions to improve its STAR program and to address deficiencies identified by both GAO and VA’s OIG. For example, in March 1999, we found that STAR review staff lacked sufficient organizational independence because they were also responsible for making claims decisions and reported to regional office managers responsible for claims processing. In response to our findings, VBA took steps to address this by utilizing reviewers who do not process claims and who do not report to managers responsible for claims processing. More recently, in February 2008, we found that STAR was not sampling enough initial pension claims to ensure the accuracy of pension claims decisions. Because initial pension claims constituted only about 11 percent of the combined compensation and pension caseload subject to accuracy review, few were likely to be included in the STAR review sample. We recommended that VBA take steps to improve its quality assurance review of initial claims, which could include reviewing a larger sample of pension claims. According to VBA, it has addressed this issue by consolidating pension claims processing in its three Pension Management Centers and establishing a separate STAR sample for pension claims. During fiscal year 2009, VBA began reviewing more pension claim decisions and reported that, for fiscal year 2009, its pension entitlement accuracy was 95 percent, exceeding its goal. In a September 2008 report, we noted that VA lacked sufficient and specific performance measures for assessing the accuracy of decisions on BDD claims and recommended that VA consider options for separately estimating the accuracy of such claims decisions. VA conducted an analysis of the costs of sampling pre-discharge claims as part of STAR and concluded that the costs would outweigh possible, unquantifiable benefits. VA also noted that the two sites that rate BDD claims surpassed the national average in accuracy for claims overall. While generally responsive to our recommendation, VA’s analysis did not specifically review the accuracy of BDD claims relative to traditional claims. Moreover, because BDD claims do not comprise all claims reviewed at the two rating sites, we continue to believe VA’s analysis was not sufficient to estimate the relative accuracy of BDD claims at these sites. While we agree that the benefits of reviewing accuracy are difficult to measure, if VA had better information on the accuracy of BDD claims, VA could use such information to inform training and focus its monitoring efforts. In contrast, VA currently performs STAR reviews that target rating decisions made by its Baltimore and Seattle offices under the DOD-VA disability evaluation system pilot program. Such a targeted review could also be conducted for BDD claims. In its March 2009 report, VA’s OIG also identified several deficiencies in the STAR program and recommended corrective actions. The OIG found that (1) regional offices did not always submit all requested sample cases for review, (2) reviewers did not evaluate all documentation in sample files, and (3) reviewers were not properly recording some errors. The OIG also found that VBA was not conducting STAR reviews of redistributed cases (for example, claims assigned to resource centers for rating). The OIG reviewed a sample of redistributed claims and found that 69 percent had accurate entitlement decisions, well below VBA’s reported rate of 87 percent for the 12-month period ending in February 2008. Further, the OIG found that VBA did not have minimum training requirements for STAR reviewers. As of March 2010, VBA had taken actions to respond to all of the OIG’s recommendations related to STAR, including (1) implementing procedures to follow up on cases not submitted by regional offices; (2) adding a mechanism to the STAR database to remind reviewers of key decision points; (3) requiring a second-level review of STAR reviewers’ work; and (4) establishing a requirement that STAR reviewers receive 80 hours of training per year. In addition, during fiscal year 2009, based in part on the OIG’s recommendation, VBA also began monitoring the accuracy of claims decided by rating resource centers as it does for regional offices. As we noted in our January 2010 report, VBA has significantly expanded its practice of redistributing regional offices’ disability claims workloads in recent years, and gathering timeliness and accuracy data on redistributed claims could help VBA assess the effectiveness of workload redistribution. In addition, as the Congress has provided more resources to VBA to increase compensation and pension staffing, VBA has devoted more resources to quality review. In fiscal year 2008, VBA more than doubled the size of the quality assurance staff, allowing it to increase the scope of quality assurance reviews. VA states that in the 12-month period ending in May 2009, STAR staff reviewed over 14,000 compensation and pension benefit entitlement decisions. Although VBA has taken steps to address deficiencies in the STAR program, the accuracy of its benefit entitlement decisions has not improved. The accuracy rate was 86 percent in fiscal year 2008 and 84 percent in fiscal year 2009, well short of VBA’s fiscal year 2009 goal of 90 percent. VA attributed this performance to the relatively large number of newly hired personnel conducting claims development work and a general lack of training and experience. Human capital challenges associated with providing the needed training and acquiring the experience these new claims processors need to become proficient at their jobs will likely continue in the near future. According to VBA officials, it can take 3 to 5 years for rating specialists to become proficient.