In recent years the claims adjudication process within the Department of Veterans Affairs (VA) has been the subject of much concern and attention, both within VA and from others, including members of the Congress and veterans service organizations. In May 1995, veterans were awaiting decisions on over 450,000 compensation and pension claims and VA was taking over 5 months on average to process original disability compensation claims. Although these numbers represent some improvement over the immediately preceding years, no such improvement has been shown in appeals processing. At the end of 1994 over 47,000 appeals were before the Board of Veterans’ Appeals. On average, veteranscould expect to wait almost 2-1/2 years from the date of their original claim to receive a decision on these appeals. Many veterans will, therefore, experience a significant delay in receiving benefits they are entitled to. Over the last 5 years, numerous studies have made recommendations to improve VA claims processing and many of these recommendations have focused specifically on appeals processing. In response to these studies, recent legislation, and other management initiatives, VA has implemented many changes and plans more efforts to address problems at both its regional offices (VARO) and the Board. In spite of these actions, however, VA officials foresee continued problems with appeals processing. Although the recommendations were wide-ranging, three areas were most frequently targeted. Appendix I summarizes recommendations and VA actions in two of these areas: (1) improving staff performance through training, guidance, and standards and (2) increasing process efficiency through actions such as automation, revised procedures, and increased staffing. Recommendations and VA actions in the third area—ensuring that VA organizations work together to identify and resolve problems—are the focus of this report. The adjudication of VA disability compensation and pension claims, including adjudication of appeals, is a fairly complicated process, involving many organizations in VA and often a veterans service organization representative as well as the veteran. The process is one that seeks to ensure every opportunity for the veteran to substantiate the claim. One of the 58 VAROs in the Veterans Benefits Administration (VBA) first makes a decision about a claim after obtaining all available pertinent evidence, including oral evidence at a hearing if the veteran so requests. An important part of the evidence is often a physical examination conducted by physicians in the Veterans Health Administration (VHA), which operates the many medical centers and other health facilities in VA. If dissatisfied with the VARO’s decision, the veteran may file an appeal, which is decided by the Board, an independent organization within VA. The Board also may conduct a hearing if the veteran requests. The Board can allow or deny benefits or remand (return) the claim to the VARO to develop further evidence and reconsider the claim. Before 1989, the Board’s decision on an appeal was final. In that year the Court of Veterans Appeals, established by the Veterans’ Judicial Review Act (P.L. 100-687, Nov. 18, 1988), began to hear cases. With the Court in place, the Board is no longer the final step in the claims adjudication process. Veterans who disagree with Board decisions may now appeal to the Court. Additionally, under some limited circumstances, either veterans or VA may appeal Court decisions to the Court of Appeals for the Federal Circuit. Veterans appeal relatively few VARO decisions. In 1994, veterans appealed 8 percent of compensation and pension cases decided by the VAROs. Of the cases appealed to the Board, about 17 percent are ultimately allowed by the VARO or Board when they consider the appeal. VA officials have recognized the critical problems they face in appeals processing and are making many changes in an effort to solve them (see app. I). Such changes could improve claims adjudication quality and timeliness; however, Board officials are skeptical about the extent to which implemented and planned changes will reduce the appeals backlog and processing time. In fact, the Chairman of the Board suggested that to solve the problems either significant additional resources must be committed or the process itself must be altered. The Congress’ continued concern about VA’s ability to process claims led it to create, in November 1994, the Veterans’ Claims Adjudication Commission. The Commission, with representation from both inside and outside VA, is charged with studying the entire adjudication process, from the beginning through final appeal, and making recommendations for improvements. The Commission is to submit its preliminary conclusions to the Congress in November 1995 and its final report with recommendations in May 1996. Senator John D. Rockefeller IV, then Chairman, Senate Committee on Veterans’ Affairs, and Senator Ben Nighthorse Campbell asked us to review several aspects of the Board’s processing of appeals. During our preliminary work we identified several recently completed reviews of VA’s appeals process. We also determined that VA had made progress in implementing two types of recommendations frequently cited in these studies—those dealing with improving staff performance and with making the process more efficient—but substantially less progress in a third area, interaction among VA organizations responsible for appeals processing. In subsequent discussions with the requesters’ staffs we agreed to focus our review on (1) the current state of appeals processing, including trends in timeliness and backlog, and (2) the extent to which VA has implemented study recommendations, especially those designed to help VA organizations work together to improve claims and appeals processing to better serve the veteran. Through discussions with Board officials and others, we identified seven studies that included adjudication of veterans’ appeals. The studies were completed between May 1990 and March 1995. The studies contained 89 recommendations. To better understand the intent of some recommendations and obtain further insights of those who had participated in the studies, in some cases, we also discussed the recommendations with members of the study groups. We reviewed the following seven studies that evaluated aspects of the appeals process: 1990 GAO report, (Veterans’ Benefits: Improved Management Needed to Reduce Waiting Time for Appeal Decisions (GAO/HRD-90-62, May 25, 1990) discussed the lack of timeliness in VA appeals processing. 1992 Task Force on the Impact of the Judicial Review Act of 1988 evaluated the effect of the Court on workload and timeliness. 1993 Blue Ribbon Panel on Claims Processing made recommendations to shorten the time it takes to make disability decisions, including appeals. 1994 Analysis of Board of Veterans’ Appeals Remands (VBA’s study of almost 700 remanded cases) sought to improve the timeliness of the service VA provides to customers who appeal a decision. 1994 Board of Veterans’ Appeals Select Panel on Productivity Improvement developed recommendations to reduce appeal processing time. 1995 VA’s Compliance With the Court of Veterans Appeals (a committee appointed by the Secretary of VA) investigated issues raised by the Court’s Chief Judge. 1995 VA Inspector General Audit of Appeals Processing Impact on Claims for Veterans’ Benefits reviewed the impact of appeals and the appeals process. We also included in our review actions taken beyond specific study recommendations, including the Board’s plans for reorganization and implementation of two key pieces of legislation that mandated or allowed changes in claims processing: The Board of Veterans’ Appeals Administrative Improvement Act of 1994 (P.L. 103-271, July 1, 1994) and the Veterans’ Benefits Improvements Act of 1994 (P.L. 103-446, Nov. 2, 1994). Among other things, these laws allowed single-member Board decisions and required VAROs to place a priority on adjudicating appeals remanded by the Board. To determine the status of the recommendations and other actions, we interviewed officials of three VA organizations directly involved in appeals processing—VBA, the Board, and the VA Office of the General Counsel—in Washington, D.C. We also reviewed pertinent documents and records obtained from these organizations, as well as relevant VHA policies; VHA publishes the guidance used by its physicians in performing disability determination examinations. Additionally, to provide examples of the adjudication process and problems identified in the studies, we reviewed a small sample (39) of appeals that the Board remanded during the period January 27 to 31, 1995. We selected the cases from the 290 that were remanded during this period. Although the Board decides appeals about all aspects of veterans programs, including, for example, health care, home loans, and education, over 90 percent of appeals concern claims for disability compensation and pension benefits originally decided by VAROs. Therefore, we focused on these types of appeals. The Board remands appeals to the agency of original jurisdiction, which could be organizations within VA other than VBA. However, because we focused on compensation and pension appeals, we refer throughout this report to VBA, which is the agency of original jurisdiction for these types of claims. We did not assess either the efficiency of VA’s claims and appeals adjudication operations or the impact that implementing the study recommendations would have on operations. Also, we did not independently verify, beyond reviewing VA central office documents, the extent or manner in which recommendations have been implemented. We did our work in accordance with generally accepted government auditing standards from December 1994 through July 1995. Veterans are waiting increasingly longer times for their appeals to be decided. Both the number of appeals waiting to be processed and appeal processing times have grown substantially in recent years. Similarly, the percentage of cases remanded to VAROs for additional action has increased. The Board attributes much of this increase to additional responsibilities placed on VA and the Board in particular by the act and Court rulings.These responsibilities are seen as especially difficult to integrate into an already complicated and lengthy process. The backlog of cases awaiting Board action has been increasing since at least 1985. However, as shown in figure 2.1, this increase began to skyrocket after 1991. Overall, the backlog increased by almost 175 percent, from about 17,000 in 1991 to over 47,000 in 1994. In large part this increase is due to the decrease in the Board’s productivity—the number of decisions rendered annually. This decrease began about the time the Court began remanding cases to the Board for lack of completeness.