[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]


 
                BOARD OF VETERANS' APPEALS ADJUDICATION 
                        PROCESS AND THE APPEALS 
                           MANAGEMENT CENTER 

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON DISABILITY ASSISTANCE
                          AND MEMORIAL AFFAIRS

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 25, 2007

                               __________

                           Serial No. 110-46

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, Jr., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                    JOHN J. HALL, New York, Chairman

CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado, Ranking
PHIL HARE, Illinois                  MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              GUS M. BILIRAKIS, Florida

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
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                            C O N T E N T S

                               __________

                           September 25, 2007

                                                                   Page
Board of Veterans' Appeals Adjudication Process and the Appeals 
  Management Center..............................................     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    36
Hon. Doug Lamborn, Ranking Republican Member.....................     3
    Prepared statement of Congressman Lamborn....................    37

                               WITNESSES

U.S. Department of Veterans Affairs:
Arnold Russo, Director, Appeals Management Center, Veterans 
  Benefits Administration........................................    24
    Prepared statement of Mr. Russo..............................    57
Hon. James P. Terry, Chairman, Board of Veterans' Appeals........    26
    Prepared statement of Mr. Terry..............................    58

                                 ______

American Legion, Steve Smithson, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission..........................    10
    Prepared statement of Mr. Smithson...........................    48
Disabled American Veterans, Adrian Atizado, Assistant National 
  Legislative Director...........................................    12
    Prepared statement of Mr. Atizado............................    51
National Organization of Veterans Advocates, Inc., Richard Paul 
  Cohen, President...............................................     6
    Prepared statement of Mr. Cohen..............................    41
National Veterans Legal Services Program, Barton F. Stichman, 
  Joint Executive Director.......................................     5
    Prepared statement of Mr. Stichman...........................    38
Paralyzed Veterans of America, Carl Blake, National Legislative 
  Director.......................................................     8
    Prepared statement of Mr. Blake..............................    45
Veterans of Foreign Wars of the United States, Eric A. Hilleman, 
  Deputy Director, National Legislative Service..................    13
    Prepared statement of Mr. Hilleman...........................    55

                   MATERIAL SUBMITTED FOR THE RECORD

Post Hearing Questions and Responses for the Record:
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Robert Chisholm, National Organization of 
  Veterans Advocates, letter dated October 1, 2007 [NO RESPONSE 
  TO THE QUESTION WAS RECEIVED.].................................    61
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Bart Stichman, National Veterans Legal 
  Services Program, letter dated October 1, 2007 [NO RESPONSE TO 
  THE QUESTIONS WAS RECEIVED.]...................................    62
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Carl Blake, National Legislative 
  Director, Paralyzed Veterans of America, letter dated October 
  1, 2007........................................................    63
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Steve Smithson, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission, American Legion, letter 
  dated October 1, 2007..........................................    64
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Eric A. Hilleman, Deputy Director, 
  National Legislative Service, Veterans of Foreign Wars of the 
  United States, letter dated October 1, 2007....................    65
Hon. Doug Lamborn, Ranking Republican Member, Subcommittee on 
  Disability Assistance and Memorial Affairs, Committee on 
  Veterans' Affairs, to Hon. James P. Terry, Chairman, Board of 
  Veterans' Appeals, U.S. Department of Veterans Affairs, letter 
  dated October 1, 2007..........................................    67


                       BOARD OF VETERANS' APPEALS
                      ADJUDICATION PROCESS AND THE
                       APPEALS MANAGEMENT CENTER

                              ----------                              


                      TUESDAY, SEPTEMBER 25, 2007

             U.S. House of Representatives,
Subcommittee on Disability Assistance and Memorial 
                                           Affairs,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
Room 334, Cannon House Office Building, Hon. John J. Hall 
[Chairman of the Subcommittee on Disability Assistance and 
Memorial Affairs] presiding.
    Present: Representatives Hall, Hare, Berkley, and Lamborn.

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Good afternoon. I would like to welcome you all 
here to this hearing of the House Committee on Veterans' 
Affairs, Subcommittee on Disability Assistance and Memorial 
Affairs, and ask if we could all rise for the Pledge of 
Allegiance. The flags are located at both ends of the room.
    [Pledge of Allegiance.]
    Mr. Hall. Thank you. First of all I would like to thank the 
witnesses for coming today to appear before the Subcommittee 
for our discussion about the Board of Veterans' Appeals (BVA) 
and the Appeals Management Center (AMC).
    I know the challenges that are presented by the growing 
backlog at both the BVA and the AMC are troubling for us all. 
Making the administrative appeals process better and quicker 
for our veterans is a shared priority and I thank you for 
joining me and the Committee in helping to find workable 
solutions.
    As many of you know, the Board of Veterans' Appeals was 
established in 1933 and was designed to provide the veteran 
with an opportunity to appeal a decision issued by one of the 
57 regional offices (RO) at the VA. No one disputes the 
importance of this step in the claims process, but 
unfortunately it has become more foe than friend to some of our 
veterans who are appealing a regional office decision.
    Moreover, it seems to be an unspoken belief held by many 
veterans and their advocates that given the variances and RO 
level decisions an appeal to the BVA may almost be a necessity. 
However, appealing an RO decision presents many challenges to 
our veterans. With a current backlog of over 39,000 cases, the 
average length of an appeal filed with the BVA is an amazing 
761 days. This is after the 240 days a claim spends at the 
regional office. This inefficiency is only exceeded by the 
outcome of these long waits--a 71 percent denial rate by the 
BVA. Also, although the BVA claims a 93 percent accuracy rate, 
the U.S. Court of Appeals for Veterans Claims (CAVC) sets aside 
or remands over 70 percent of the cases appealed indicating a 
much lower accuracy rate in reality. It is clear from reading 
the BVA's Fiscal Year 2006 Chairman's Report that these 
percentages may not be based on the same statistics.
    There are many reasons for the current 39,000 plus backlog 
at the Veterans Benefits Administration (VBA). First, as 
pointed out by several veterans advocacy organizations in their 
testimonies, an entity such as the BVA, which employs a system 
of rewards based on the quantity of work outputs rather than 
the quality of those work outputs, will soon become an 
organization that adopts the principle of quantity over 
quality, consciously or unconsciously.
    The effort by the BVA to avoid remands is also yielding 
mixed results at best. Additionally, unless the U.S. Department 
of Veterans Affairs (VA) standardizes the training process for 
its raters, this often subjective system will continue to yield 
inequitable results. Most claims raters indicate that their 
major source of learning was on the job training. As the 
preliminary findings of the Veterans' Disability Benefits 
Commission indicate, over 50 percent of the raters believe that 
they are ill-equipped to perform their jobs. Over 80 percent of 
raters, and Veterans Service Organizations (VSO's), believe 
that there is too much emphasis placed on speed relative to 
accuracy. Also, the Institute for Defense Analysis (IDA), in 
its recent report of the analysis of variances in VA disability 
compensation, recommends that VA undoubtedly needs to: first 
standardize initial and ongoing training for rating 
specialists; second, increase oversight of rating decisions; 
third, develop and implement metrics to monitor consistency and 
adjudication results; and fourth, increase oversight and review 
of rating decisions and to improve and expand data collection 
and retention.
    The IDA Report also indicates that the current STAR Program 
(Systematic Technical Accuracy Review) is insufficient to 
promote consistency and ratings across regional offices, as 
very little action has been taken on any trends found at region 
offices. Among other things, I would like to hear what the VBA 
intends to do to improve the STAR program as well as an update 
on its Expedited Claims Adjudication Initiative.
    The increased work load at both the AMC and BVA is not lost 
on this Committee. The most recent Fiscal Year 2007 figures 
indicate that there are more than 18,300 remands pending at the 
AMC and over 39,206 appeals waiting for adjudication at the 
BVA.
    Moreover, the BVA expects to receive up to 48,000 appeals 
through the course of 2007. As such, any increase in 
productivity has not been able to keep pace with the increase 
of appeals being sent to the BVA. So we are aware of the tall 
task that we are facing.
    On a separate but related note, I am heartened by the fact 
that the Fiscal Year 2008 Budget Resolution allowed, and the 
Fiscal Year 2008 Military Construction-VA Appropriations Bill 
will provide, funding for 1,000 full-time equivalents (FTEs) to 
help with the growing claims backlog. This fact 
notwithstanding, I firmly believe that the only way to maximize 
VBA employees' effectiveness and lessen the backlog is to give 
them the necessary tools and training to provide accurate 
ratings.
    To be clear, it is not my intention simply to point out the 
shortcomings of the BVA or the AMC. I think we should all abide 
by the underlying and stated principles of the entire VA 
system, which is to provide a non-adversarial system for 
awarding our veterans the benefits they have earned. We need to 
begin to see ourselves, the VA, Congress, VSO's and advocacy 
organizations alike as partners in fulfilling this mission.
    I also firmly believe that with the expected surge in 
filings by returning Operation Enduring Freedom/Operation Iraqi 
Freedom (OEF/OIF) veterans, VA as the gateway for, and the 
creator of, the record that forms the basis for appeal, should 
amplify its role in improving the benefits claims processing 
and adjudication system to get our veterans off the appeals 
hamster wheel, a term that we have heard quite often.
    I am looking forward to hearing testimony that sets forth 
recommendations that are consistent with producing the best 
outcomes for our veterans who are appealing RO decisions and 
improving the overall system of claims adjudication.
    Thank you. And now I would like to recognize Ranking Member 
Lamborn for his opening statement.
    [The prepared statement of Chairman Hall appears on p. 36.]

             OPENING STATEMENT OF HON. DOUG LAMBORN

    Mr. Lamborn. Thank you, Mr. Chairman. I thank you for 
holding this hearing today on the Board of Veterans' Appeals 
and its role in the efficient processing of disability 
compensation claims. And I welcome our witnesses, especially 
Chairman Terry. And I thank you all for your contributions to 
the Veterans Affairs system.
    As everyone is aware, the VA's Compensation and Pension 
backlog has reached an epidemic and disgraceful level. While I 
understand that there are numerous challenges facing the Board 
and the Appeals Management Center, both play a significant role 
in veterans waiting many months, if not years, for an accurate 
rating.
    I agree with Mr. Smithson of the American Legion that we 
can't just look at the Board in a vacuum. Poor quality work at 
the regional office level results in much larger problems later 
in the appeals process. We must ensure that rating boards 
strive to achieve thoroughness and accuracy along with 
efficiency in their work. Doing so is a key step toward 
eventual elimination of the backlog.
    I do want to commend Chairman Terry for the excellent work 
the Board is doing. They are deciding a record number of 
appeals this Fiscal Year. While your output has increased, the 
number of claims waiting to be reviewed, though, is still too 
high. While I agree that Congress needs to adequately staff the 
Board and the Appeals Management Center, I don't believe that 
hiring more people is the only solution.
    I also acknowledge that there is no silver bullet that will 
make a significant and immediate impact on the backlog. 
However, I do believe that the system needs to be fundamentally 
changed. That is why I am anxiously awaiting the findings of 
the Disability Commission that reports next month. While 
fundamental change is needed, I believe that we can take 
immediate, vital action by passing H.R. 3047 which I have 
introduced, the Veterans Claim Processing Innovation Act of 
2007. H.R. 3047 will bring VA's compensation and pension system 
into the 21st century. By increasing accountability and 
leveraging technology at the Veterans Benefits Administration, 
this bill would improve the accuracy and speed of benefits 
claims and I commend it to the attention of my colleagues.
    Several of the provisions of H.R. 3047 are recommendations 
from our witnesses today and I thank them for their support. I 
thank you, Mr. Chairman, for promising to hold a legislative 
hearing on H.R. 3047 next month and I hope that you will soon 
join two of our colleagues in cosponsoring this bipartisan 
bill.
    I want to thank the witnesses for their testimony and yield 
back.
    [The prepared statement of Congressman Lamborn appears on 
p. 37.]
    Mr. Hall. Thank you, Mr. Lamborn for your thoughtful and 
insightful comments. And as you noted, we will be having a 
legislative hearing on H.R. 3047 next month. I am looking 
forward to that and to hearing testimony from some of our 
expert, our usual expert witnesses on that bill among others 
that we will be looking at on that day.
    I would also like to welcome our panelists who are 
testifying today. Joining us on our first panel and if you 
could come up as you are called. Mr. Barton Stichman, Joint 
Executive Director for the National Veterans Legal Services 
Program; Mr. Richard Cohen, President of the National 
Organization of Veterans Advocates, Inc. (NOVA); Mr. Carl 
Blake, National Legislative Director for Paralyzed Veterans of 
America (PVA); Mr. Steve Smithson, Deputy Director of the 
Veterans Affairs and Rehabilitation Commission for the American 
Legion; Mr. Adrian Atizado, Assistant National Legislative 
Director for Disabled American Veterans (DAV); and last but not 
least, Mr. Eric A. Hilleman, Deputy Director of the National 
Legislative Service for the Veterans of Foreign Wars (VFW).
    It is a large and extremely knowledgeable panel. As usual 
your comments are entered into the written record, so you can 
deviate or shorten them as you wish. We will recognize each of 
you for 5 minutes starting with Mr. Stichman.

  STATEMENTS OF BARTON F. STICHMAN, JOINT EXECUTIVE DIRECTOR, 
 NATIONAL VETERANS LEGAL SERVICES PROGRAM; RICHARD PAUL COHEN, 
 PRESIDENT, NATIONAL ORGANIZATION OF VETERANS ADVOCATES, INC.; 
 CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, PARALYZED VETERANS 
 OF AMERICA; STEVE SMITHSON, DEPUTY DIRECTOR, VETERANS AFFAIRS 
AND REHABILITATION COMMISSION, AMERICAN LEGION; ADRIAN ATIZADO, 
  ASSISTANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN 
   VETERANS; AND ERIC A. HILLEMAN, DEPUTY DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
                             STATES

                STATEMENT OF BARTON F. STICHMAN

    Mr. Stichman. Thank you. I am very thankful that you 
invited us to testify this morning. Before discussing the Board 
of Veterans' Appeals, I would like to second the comments that 
I have just heard from both the Chairman and Congressman 
Lamborn about the fact that the solution to the dysfunctional 
VA System lies in large part in reforming the way the regional 
offices decide cases and process cases. I think if you had to 
concentrate on one of the three tiers of the adjudicatory 
process, the regional offices, the Board of Veterans' Appeals, 
or the Veterans Court, which reviews Board of Veterans' Appeals 
decisions, the regional offices are the most important. And 
they handle the majority of all the claims. And the problem is 
they are not deciding them accurately in the first instance. 
And part of the reason for the problems is the pressure put on 
them, on really all levels, to decide cases quickly. So while 
we all condemn the backlogs, there is a sliding scale here. 
There are two different things one has to weigh. Speed versus 
quality. And I worry a little bit when we concentrate only on 
the backlog and not on quality, because that is what encourages 
this hamster wheel system from continuing by great 
concentration on speed and not enough concentration on quality.
    With that said, let me turn to my testimony on the Board of 
Veterans' Appeals. The most prominent fact when you look at the 
Board of Veterans' Appeals to evaluate its performance is the 
report card that the Court of Appeals for Veterans Claims 
issues each year on BVA decisionmaking. They review and make 
decisions on between 1,000 and 2,800 BVA decisions a year. And 
over the last 12 years as the Chairman indicated, the over 77 
percent of the decisions the Courts reviewed, it has set aside 
the Board decision and sent it back the large majority of those 
the Court found at least one error that was prejudicial to the 
claimant in processing the claim. That is a terrible record. 
That would be an ``F'' grade if one were grading from ``A'' to 
``F.''
    Now to anticipate what Chairman Terry might say about the 
77 percent figure. The cases that the Court judges are not 
randomly selected. They are self selected by the veterans who 
appeal. But it is clear to me and I think it is to the other 
Members of this panel that it is not only Board decision--it is 
not the Board decisions that are in error or that are the only 
ones that are appealed. A lot of veterans with erroneous 
decisions don't bother to appeal. They give up. They have been 
pursuing their claim for years.
    And so while the 77.7 percent figure is not a random 
sample, it is definitely evidence of something that is majorly 
wrong with the decisionmaking process. In reviewing the 
thousands of decisions we have reviewed and Court decisions 
analyzing them, there are three significant factors that we 
believe exist. One is the Board keeps making the same types of 
errors over and over again. The failure to comply with the duty 
to assist. The failure to evaluate fairly, the lay evidence in 
the record. The failure to explain why positive medical 
evidence is rejected by the Board.
    Second, it is my understanding that Board management does 
not downgrade the Veterans Law Judges (VLJs) for this--for 
making these types of errors. And so, by not downgrading their 
performance, it actually encourages them to continue in this 
vein.
    And third, the Board campaign over the last few years to 
eliminate what they call unnecessary remands has actually 
contributed to the Board's poor performance by encouraging the 
Board to make a final decision on a case that should be 
remanded. And what happens in that situation is the claimant 
often appeals to the Court and the Court overturns it a year or 
two later sending it back to the Board to do what the Board 
should have done 2 or 3 years earlier.
    The solutions that we advocate are twofold. One, the 
Congress should require a different selection process for 
judges at the BVA. There is a system that most Federal agencies 
use. It is the administrative law judge system for selection. 
And it is the only system, merit based system of judges in the 
United States. And it allows selection of people who may not 
come from within the agency and, therefore, may not have 
developed the habits that clearly the Veterans Law Judges have 
accumulated over the years.
    And so I commend to the Committee looking at the 
administrative law judge (ALJ) system as a method to reform the 
Board and its decisionmaking process. I don't mean to suggest 
that there are not talented judges on the Board of Veterans' 
Appeals, there are. But it is helpful to get a blend of 
experience as we found out at the Veterans Court when you 
select judges for that Court to increase the quality of 
decisionmaking.
    And at least, if Congress doesn't do that, they should 
require that the evaluative criteria used by the Board 
management to judge, the Veterans Law Judges be made public so 
one can see whether they are downgrading the types of errors 
that the Court is overturning, because you are not going to see 
an improvement unless there are some consequences or better 
instruction to the Board Members.
    Thank you.
    [The prepared statement of Mr. Stichman appears on p. 38.]
    Mr. Hall. Thank you, Mr. Stichman. Mr. Cohen, you are now 
recognized for 5 minutes.

                STATEMENT OF RICHARD PAUL COHEN

    Mr. Cohen. Thank you, Chairman Hall and Members of the 
Subcommittee. I will agree with the observations that Mr. 
Stichman has made and add some of my own in addition.
    I believe that the VA needs to make faster decisions and 
better decisions. Part of the problem with the decisionmaking 
at the regional office and at the Board of Veterans' Appeals is 
the condition of the file. I brought a little show and tell 
today. This big pile over here is what I would call a small 
claims file. If you looked at it you would see that there are 
no page numbers. There is no index. There is no way for a 
decision review officer at the regional office nor for a 
Veterans Law Judge at the BVA to be able to select out a piece 
of important evidence in here unless the representative happens 
to carry some Post-it notes in his or her pocket and gets hold 
of the file and then puts Post-it notes in it.
    The file that I am holding in my hand is the file that I 
presented to the Veterans Law Judge in Washington, DC, in this 
case. These are the only significant papers out of that file, 
but still because my client selected a video hearing and we 
were in St. Petersburg, there was no way for me to show the 
judge where these documents were contained in this file.
    If you follow what I am saying the bottom line here is that 
the VA must go paperless and must have the documents indexed so 
we can tell the people who are doing the decisionmaking where 
the important documents are. The reason why this is so 
important is as the Committee has recognized, the sheer number 
of cases that the VA is dealing with. In the BVA, we have four 
teams around the country. Each team has 14 Veterans Law Judges 
supported by 60 attorneys who are writing the decisions. These 
four teams cover the entire country and some teams cover as 
many as 16 States.
    I know there was an opinion that just throwing more money 
at the problem will not solve the problem. Well, I am here to 
tell you that it is impossible for the VA regional offices the 
way they are staffed presently and impossible for the BVA the 
way it is staffed presently to return prompt and accurate 
decisions. They just can't do it. They are trying to keep up 
every way they can, but there is a flood of cases coming in. We 
know that about 5 percent of all the claims that are filed in 
the regional office will end up at the Board of Veterans' 
Appeals. We also know that the servicemembers in Iraq and 
Afghanistan have sustained injuries to the extent that more 
than 10,000 are already injured and will be filing claims. So 
we can expect that there are going to be a lot of claims coming 
down the line.
    And because of that fair share system that the BVA has put 
into place to try to move cases along, the attorneys are 
expected to write three to five decisions a week. Veterans Law 
Judges are expected to sign 15 to 20 cases a week. That is 
impossible. And they won't be able to keep up with it.
    The Chairman has already said in his 2006 report that it is 
going to be unrealistic to assume that they are going to be 
able to keep up.
    In addition, I would call your attention to the fact that 
not only does the Court remand a lot of the cases that come out 
of the Board, but on the actual decisions on the merit, on the 
merits, the Court only affirms 20 percent of the cases, which 
means 80 percent of the cases are wrong. And I attribute that 
to the number of cases that the Board has to deal with. Part of 
the speed problem, the difficulty of resolving the cases are 
what we call unnecessary remands where the Board will remand it 
when the evidence is sufficient to make a decision just to 
develop the case in order to deny or remand to get additional 
information that is not really necessary. The reason why that 
is done is there is a production quota. And a remand counts as 
much as an actual decision. So there is a motivation to remand 
cases unnecessarily.
    We could move cases a little faster if the Board would 
change its policy to encourage conversations between the 
judges, their staff, and the representatives of the veteran. 
Might be able to resolve cases without an actual decision. The 
Appeals Management Center is just not helpful to veterans in 
the opinion of NOVA. All cases end up going there where they 
languish for a while and then get bounced out to the regional 
office. We would rather see our cases go back to the regional 
office for development if it is necessary.
    Thank you.
    [The prepared statement of Richard Paul Cohen appears on p. 
41.]
    Mr. Hall. Thank you, Mr. Cohen. And I was saying to Mr. 
Lamborn that when we have the hearing in October on his bill, 
his information technology bill, that perhaps you could come 
back with that stack of paper as a witness.
    Moving along, Mr. Blake, you are now recognized for 5 
minutes.

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Mr. Chairman, Members of the Subcommittee, on 
behalf of PVA I would like to thank you for the opportunity to 
testify today on the Board of Veterans' Appeals and the Appeals 
Management Center.
    PVA appeals representatives play an important role in the 
appeals process at both the BVA and the AMC. Our 
representatives prefer to resolve claims without the need for 
an appeal by educating our members on the benefits provided to 
them by law, by obtaining those benefits for those veterans, by 
avoiding frivolous claims and appeals and by aiding the VA in 
identifying issues and assembling evidence.
    Our goal ultimately is to resolve differences with the VA 
at the lowest possible level through cooperation with VA's 
decisionmakers. As Congress attempts to address concerns 
related to the claims backlog specifically as it relates to 
what occurs in the appeals process, it is important to 
understand factors contributing to the current situation at 
BVA.
    The BVA anticipates that by the end of Fiscal Year 2007, 
the Board will enter approximately 45,000 decisions. Currently, 
the average docket date for decisions entered by the Board is 
June 2005. Meanwhile, approximately one-third of appeals are 
currently remanded. According to the VA's own studies, a 
significant number of BVA remands were required because the 
agency of original jurisdiction, usually the regional office, 
failed to fully and or properly develop or decide the claim in 
accordance with existing instructions and directives of the 
department. This factor alone should be examined and addressed 
sooner rather than later as we believe that no meaningful 
reduction in the claims backlog can be achieved without paying 
attention to this problem first.
    Realizing that the regional offices were doing a poor job 
on remands, the BVA began doing its own claims development 
without regulations permitting it. The VA then changed the 
regulations to allow the practice. The regulations were 
subsequently found not valid in the court case, DAV versus The 
Secretary of Veterans' Affairs. In response to this decision, 
the VA created the Appeals Management Center to handle the 
remands in Washington, DC, where they could do the same 
evidence development but not compete with new claims and 
hopefully resolve these claims faster and better.
    The AMC was then staffed and resourced to handle the 
historical average number of BVA remands which was about 12,000 
per year. As a result of the unanticipated significant increase 
in the number of remands well in excess of the 12,000 per year 
estimate, the AMC was quickly overwhelmed which then led it to 
form three satellite offices located at St. Petersburg, 
Florida, Cleveland, Ohio, and Huntington, West Virginia. With 
all of these considerations that we have outlined in our 
written statement, we would like to make a few recommendations 
and attempt to explain their potential impacts.
    We believe that first VBA must accelerate the progress 
toward an electronic claims records system. As long as VA 
continues to use a paper file shipped around the country, the 
claims and appeals process will be done in an expensive and 
antiquated manner. As demonstrated by the VHA's outstanding 
electronic medical record, similar gains and access to records 
can be realized in the claims and appeals process.
    PVA also believes that centralized training better prepares 
rating specialists at all levels. Training of rating 
specialists was historically conducted at the local level by a 
more senior staff member. The VA now provides this centralized 
training at its Veterans Benefits Academy located in Baltimore, 
Maryland, and via the VA Intranet.
    Furthermore, as we have called for in the ``Independent 
Budget'' (IB), Congress should fully fund any VA training 
initiatives in the VBA side. Improved and continued centralized 
training should help reduce inconsistencies and disparities 
between regional offices and should improve consumer 
confidence. Another point that the ``Independent Budget'' has 
advocated for is significant increases in staffing levels in 
the VBA at all levels. If the Fiscal Year 2008 Military 
Construction of Veterans' Affairs Appropriations Bill is 
enacted prior to the start of the new Fiscal Year on October 1, 
a prospect that seems to be getting dimmer by the day.
    The VA will be provided much needed funding to add more 
than 1,000 new full-time equivalent employees to VBA. However, 
it is important to realize that decisions made on appeal 
require much greater expertise and often involve more complex 
questions of medicine and law. As such, it takes years to train 
a competent rating specialist. Trainees should simply not be 
conducting appellate review due to the complexity of these 
decisions. Increasing staffing today should be seen as an 
investment in the future.
    Mr. Chairman, Subcommittee Members, again, I would like to 
thank you for the opportunity to testify and I would be happy 
to answer any questions that you might have.
    [The prepared statement of Mr. Blake appears on p. 45.]
    Mr. Hall. Thank you, Mr. Blake. Mr. Smithson, you are now 
recognized.

                  STATEMENT OF STEVE SMITHSON

    Mr. Smithson. Good afternoon, Mr. Chairman and Members of 
the Subcommittee. The American Legion appreciates the 
opportunity to appear before you this afternoon to share our 
views on the Board of Veterans' Appeals Adjudication Process 
and the Appeals Management Center.
    There are more than 31,000 appeals currently pending at the 
Board of Veterans' Appeals. Since 2004, the BVA has 
concentrated much of its efforts on eliminating avoidable 
remands in order to issue more final decisions to reduce its 
backlog. This effort has resulted in a significant reduction in 
remands, but has also resulted in a significant increase in 
denials with only a slight increase in allowances.
    It is the opinion of the American Legion, based on our 
review of American Legion represented appeals denied by the BVA 
that in its zeal to avoid remands, the BVA has rendered 
erroneous or premature decisions in cases where benefits should 
have been granted or the case should have been remanded. In the 
past 8 years, the National Veterans Legal Services Program 
consultant to the American Legion has appealed approximately 
500 American Legion BVA denials to the U.S. Court of Appeals 
for Veterans Claims and has won a remand or reversal in over 90 
percent of these appeals.
    Further, according to the CAVC Web site, the combined 
remand plus reversal rate for appeals decided by the Court on 
the merits was just over 76 percent. Such a reversal rate--such 
a remand and a reversal rate is unacceptable for any 
adjudicative system, but an extraordinarily high rate is 
especially galling for an adjudicative system that is required 
by statute to be so veteran friendly that the benefit of the 
doubt is given to the claimant. Clearly, such a high remand and 
reversal rate is a direct reflection of substandard BVA 
decisions.
    The BVA, however, cannot be reviewed in a vacuum. The 
Board's work product is a direct reflection of the 
adjudications produced by the VA regional offices. Most of the 
problems with the BVA can only be corrected if the quality of 
adjudications in the VA regional offices is improved. The poor 
quality of VA regional office adjudications adversely impacts 
the work of the BVA. The American Legion has long maintained 
that such poor quality regional office work is a direct result 
of VA management placing a higher value on the quantity of 
adjudications produced by the VA regional officers rather than 
the quality of the work.
    This emphasis on production continues to be a driving force 
in the VA regional office, often taking priority over such 
things as training and quality assurance. Performance standards 
of adjudicators and rating specialists are focused on 
productivity as measured by work credits known as ``End 
Products.'' In short, the ``End Product'' work measurement 
system as managed by VA does not encourage regional office 
managers to ensure that adjudicators do the right thing for 
veterans the first time.
    The emphasis on production causes two bad results. First, 
because of shoddy regional office work, there are so many cases 
for the BVA to remand that the Board pressured to reduce its 
remand rate all too often denies claims that should be 
remanded. This is reflected by the very high remand reversal 
rate at the CAVC. Second, in many instances, the Board has no 
choice but to remand prematurely adjudicated claims. The high 
BVA remand rate has resulted in a growing backlog at the AMC. 
The BVA combined remand rate and reversal rate of 56 percent 
for Fiscal Year 2007 through August is arguably a direct 
reflection of the greater emphasis placed on the production 
over training and quality assurance by the VA regional offices.
    In the view of the American Legion, the need for a 
substantial change in VBA's work measurement system is long 
overdue. A more accurate work measurement system would help to 
ensure better service to veterans. Ultimately, this will 
require the establishment of a work measurement system that 
does not allow work credit to be taken until the decision and 
the claim becomes final. Meaning that no further action is 
permitted by statute whether because the claimant has failed to 
initiate a timely appeal or because the BVA rendered a final 
decision.
    We are pleased that recently introduced legislation, H.R. 
3047 would mandate such overdue changes to VA's work-credit 
system. We are hopeful that if enacted, this legislation which 
would change the underlying incentive by rewarding quality of 
work rather than quantity, will increase the number of accurate 
decisions as well as claimant satisfaction, and in doing so 
reduce the overall number of appeals.
    Moving to the Appeals Management Center. While the AMC is 
an admirable attempt by VBA to improve service to veterans, it 
does nothing to address the problems underlying the continued 
rise in the number of appeals and remands by the VBA. In our 
view, the very necessity of the AMCs existence begs the 
question, ``Why hasn't VBA mandated the regional offices to 
correct their own mistakes?''
    Moreover, the AMCs apparent inability to bring its 
extremely large backlog under control since its creation in 
2003 has been a major concern of the American Legion. The AMC 
currently has more than 18,000 remands pending development and 
adjudication. In August of this year, the BVA remanded 1,710 
cases to the AMC while the AMC only returned 639 remands to the 
BVA, leaving the AMC with a deficit of 1,071 cases for the 
month.
    Moreover, 21 percent of the 13,082 appeals remanded by the 
BVA in the first 11 months of Fiscal Year 2007 were prior 
remands, as were 30 percent of the appeals allowed by the BVA. 
This data tends to reflect a large percentage, 51 percent, of 
cases that were not properly developed or adjudicated by the 
AMC.
    Additionally, in July of this year the AMC started 
brokering ready-to-rate cases to designated regional offices 
with additional brokering expected to take place each month. 
Unfortunately, this is another example of the AMC as it is 
currently structured not being able to properly handle its 
workload. It is clear that the AMC is underfunded. The Congress 
and the VA should now take prompt action to either eliminate 
the AMC or to properly fund its work.
    In conclusion, the best way to help veterans is to fix the 
entire VA Claims Adjudication System. Piecemeal solutions do 
not work and should be avoided. The VA work measurement system 
should be changed so that the VA regional offices are rewarded 
for good work and suffer a penalty with consistent--when 
consistent bad decisions are made. Managers, attorneys and 
Veterans Law Judges at the BVA should be awarded for prompt 
careful work and they should also be penalized when they make 
bad decisions.
    The AMC should be adequately funded or closed. American 
veterans seeking VA disability benefits deserve better 
treatment than what they are currently getting from VA.
    This concludes my statement, Mr. Chairman. I would be happy 
to answer any questions you or Members of the Subcommittee may 
have.
    [The prepared statement of Mr. Smithson on p. 48.]
    Mr. Hall. Thank you, Mr. Smithson. I am sure we will have 
some questions. Now we are going to move to Mr. Atizado for 5 
minutes.

                  STATEMENT OF ADRIAN ATIZADO

    Mr. Atizado. Yes, sir. Thank you. Mr. Chairman, Ranking 
Member Lamborn, Members of the Subcommittee, on behalf of the 
1.3 million members of the Disabled American Veterans, I do 
thank you for the opportunity to testify at this important 
hearing on the Board of Veterans' Appeals and the Adjudication 
Process as well as the Appeals Management Center.
    And the best evidence for the importance of a fair and 
effective appeals process for veterans is a large number of VA 
decisions that are overturned on appeal. Experience has shown 
that nearly half of these appeals will be resolved by the 
regional office that made the decision being appealed without 
the necessity for review by the BVA. Of the 39,076 cases in 
which there was a BVA decision last year, 19.3 percent were 
allowed. Another 32 percent involve some processing omission 
that render the claims decision unsustainable, thereby 
requiring remand from the Board to the agency of original 
jurisdiction.
    Together the allowed and remand cases comprise 51.2 percent 
of the Board's total decisions last year. This demonstrates not 
only the necessity of the appeals process, but also that VA's 
appeals process is fulfilling its purpose to ensure veterans 
receive the benefits they are due. In any adjudication system, 
mistakes are inevitable. An adjudication system as massive as 
VA's that claims wrongly decided will be relatively numerous 
under the best of circumstances. However, the unusually large 
percentage of appeals in which errors are found demonstrates 
serious problems in the initial decisionmaking process.
    In addition, repeated errors at the field office level 
results in multiple remands and multiple Board decisions in far 
too many cases. Erroneous or defective decisions result in 
several adverse consequences. Erroneous denials deprive large 
numbers of veterans the benefits they are rightly due and delay 
the delivery of these benefits for protracted periods. Because 
erroneous denials necessitates multiple decisions, they add 
substantially to the workload at all levels of adjudication. 
Greater workloads require greater resources.
    If the increased workloads are not matched by increased 
resources, quality must yield to quantity as my colleagues have 
mentioned. Leading to even higher error rates and a vicious 
cycle of increasing inefficiency these result in claims 
backlogs that delay the delivery of benefits for all claimants. 
In other words, everyone suffers. And though there is room for 
improvement at BVA and the AMC, their problems are secondary to 
the more critical problems in the initial decision making 
process, again a recurring theme on this panel.
    To give you an example, VBA management has tolerated for 
years problems such as that at the New York City Regional 
Office where on average an appeal languishes for over 4 years 
before the regional office transfers it to the Board for a 
decision. Or the fact that about 50 percent of all remanded 
cases last year come from only 20 percent of VA stations 
responsible for original decisions. Many of these appellants 
are elderly or many of them are very seriously disabled and 
they need these benefits in a more timely fashion than that.
    With recent increases in the appellate caseloads and no 
corresponding increase in staffing, timeliness at BVA and the 
AMC is likely to suffer even more. Congress needs to address 
BVA's space and staffing more seriously. The Board's current 
location continues to be pressed for space due to the large 
volume of appeals. And if the request for additional employees 
to the Board is provided, space will become critical as 
representative organizations must likewise increase their 
staff.
    The DAV appreciates the Subcommittee's interest in these 
issues and would be glad to work with you and your staff to 
improve the timeliness and accuracy of claims for veterans 
benefits and services.
    This concludes by statement, Mr. Chairman. I would be happy 
to answer any questions you or other Members may have.
    [The prepared statement of Mr. Atizado appears on p. 51.]
    Mr. Hall. Thank you, Mr. Atizado. Mr. Hilleman, now you are 
recognized for 5 minutes.

                 STATEMENT OF ERIC A. HILLEMAN

    Mr. Hilleman. Thank you, Chairman Hall and Members of the 
Subcommittee. On behalf of the 2.4 million members of the 
Veterans of Foreign Wars and our auxiliaries, it is my pleasure 
to testify before you today on the Board of Veterans' Appeals 
Adjudication Process and the Appeals Management Center.
    Let me begin by stating that the VFW is committed to an 
effective and efficient claims process with a just and 
accessible appeals process. We hope to be a partner in seeking 
actionable solutions to the challenges that face the VA. All 
veteran service organizations have a similar goal, to ensure 
America meets her stand and responsibility to the American 
veteran for the sacrifices endured in her service.
    The VFW believes this agreement does not cease when the 
uniform lies folded in a drawer. We must view the Department of 
Veterans Affairs Claims Process through the lens of this social 
contract. The VFW has long served at no cost to our fellow 
veterans to provide benefits counseling, claims development, 
outreach, claims review at regional offices, the BVA and the 
AMC.
    The VFW adds value to the claims adjudication process as a 
quality assurance tool and a veterans provider of 
representation. The backlog of veterans' claims within the VBA 
or excuse me--the VBA is on the rise. The nearly 640,000 
ratings and authorization cases are pending. This is 7.4 
percent higher than last year and 22\1/2\ percent higher than 
2005. The challenges that VBA faces in addressing the mounting 
workload are well established. These include the growth of 
total claims, every increasing complexity, and the expectations 
for an accurate and timely decision.
    The contributing factors of the backlog are also well 
known. As the backlog of VBA claims swells at every step of the 
process, the VA weighs the values of quality versus quantity. 
The VA has repeatedly testified before the Congress to the ills 
that plague its claim system. Congress has responded with a 
much needed increase in funding, yet additional personnel 
following decades of inadequate funding and staffing will not 
be productive in the near term.
    VA has sought to address these problems by creating the 
Appeals Management Center here in Washington. The driving idea 
behind the AMC was specialization, thus making the AMC a catch 
basin at the end of the process to improve its overall quality. 
It has yet to realize its original vision despite the committed 
and dedicated staff, yet the absence of training and high 
turnover will never allow it to live up to its potential.
    VBA employees face a long and complex training regimen and 
are not easily replaced. We believe the AMC would be well 
served by moving its operations to a small or moderate size 
city with minimal cost of living and a large university. The 
greatest strain on the AMC is constant turnover of employees. 
In a smaller community with a thriving university population, 
the AMC would be a premier employer offering job security, high 
wages, and room for advancement. Currently the AMC is more like 
a regional office in a headquarters town. Imagine, if you will, 
an office that is losing the top 10 percent of its skilled 
workforce yearly to higher paying offices. This is the dynamic 
between the AMC and the VA Central Office.
    Such a move in the VA is not without precedent. In 2001, 
the technical accuracy review STAR Program relocated from 
Washington, DC, to Nashville, Tennessee. This move allowed the 
VA to attract greater quality and more qualified employees. It 
reduced the cost of living for its employees and in cutting 
down on commute times, allowed employees to arrive at the 
office more refreshed and ready to work.
    Reform of the system is necessary through a strong VBA 
leadership, congressional support, and VSO involvement policy 
reform that keeps the best interest of the veteran at heart are 
truly possible.
    Thank you for the opportunity to present our views today 
before this Subcommittee and I welcome your questions.
    [The prepared statement of Mr. Hilleman appears on p. 55.]
    Mr. Hall. Thank you, Mr. Hilleman. As you know from the 
buzzers going off, we have had votes called on the House Floor. 
So if you would be so kind as to wait and have some more of our 
delicious ice water. We will--I think these are going to be 
quick votes.
    Okay. I have another suggestion--okay. We are going to stay 
with plan ``A.'' We are going to recess the hearing while we go 
cast these three votes and ask you please to stay with us and 
we will be back as soon as we can.
    [Recess.]
    Mr. Hall. Thank you for your patience. The hearing is 
called back to order. I will try to get through my questions as 
quickly as possible and then depending on who comes back and 
when they come back we will have more questions.
    I wanted to ask Mr. Stichman about the concept that you 
discussed of a merit-based system to pick judges similar to the 
ALJ system. Can you give us some more specifics about that? You 
know how that might work or in how that differs from the 
current method of choosing the adjudicators for the BVA or the 
CAVC?
    Mr. Stichman. Certainly. That is an established system of 
picking Administrative Law Judges that work at various 
different agencies. My testimony talks about the methodology 
which involves taking a test, written and oral, interview, 
etcetera. And it results in a high quality of judiciary among 
the Federal agencies. And a major advantage is people from all 
different walks of life compete. And to contrast that with the 
system we have now, most of the Veterans Law Judges come from 
within the VA system and they develop habits that aren't always 
healthy. Witness the track record at the veterans court. And so 
there are plenty of people knowledgeable in veterans law that 
don't work for the VA but they don't become Veterans Law Judges 
but they would potentially become judges if we had a system 
that was open to everyone to apply.
    I was talking to one of my colleagues about an attorney 
named Steve Purcell who used to work at the Disabled American 
Veterans for many years. An excellent advocate. And finally he 
went through the test process to become an Administrative Law 
Judge and he is a judge in the Social Security Administration 
now. But he was--because of the system, he couldn't really be a 
judge at the Board of Veterans' Appeals because of their 
tendency to hire people from within. So I think that is a basic 
overview of the difference between the systems.
    Mr. Hall. Thank you. There will be a follow up by minority 
counsel on that question, but first let me just ask Mr. Cohen, 
you are suggesting, if I understand you, that we should change 
the regulation so that a remand does not count as a decision. 
So that to meet quotas, one has to actually make a decision of 
yes or no as to the validity of the particular claim?
    Mr. Cohen. Yes, Chairman Hall.
    Mr. Hall. Boy, that makes too much sense. And I think I 
hear, pretty much across the board, the feeling that there is 
more staffing needed both at the regional offices and at the 
BVA, because the numbers are overwhelming and probably only 
going to get more so. Does anybody dissent from that viewpoint? 
Just checking. I just, you know, I thought I heard somebody in 
the executive branch say that we are spending too much money on 
veterans in the last week or two. But I didn't, you know, I 
think money does, speaking as a former school board president, 
money doesn't take care of all problems, but there are some 
problems you need money to take care of.
    Mr. Blake, you talked about full funding for training. How 
short are we now on that in your view?
    Mr. Blake. I don't know that I could necessarily give a 
dollar figure on that. One of the things we actually struggled 
with, with the Independent Budget, is figuring out how to 
really quantify a cost for training, something we are actually 
trying to refine to improve the Independent Budget. I know last 
year there was some recommended dollars as it relates to 
electronics or electronic initiative within VBA that we have 
also pushed for funding. I think the priority for us in the 
current year was to get the funding for the additional VBA 
staff.
    Kind of to your point about adequate staffing, I would only 
draw your attention to the point that we made, although we 
called for more than 1,000 recommended VBA increase in staffing 
in the IB, the appropriations bills would provide for that if 
they ever get passed. But we have also stated that that doesn't 
mean that those new trainees should go directly into BVA or 
that level of claims works because it is too complex to have a 
trainee stuck in there and the concern that was addressed from 
when I had this discussion with some of our appeals 
representatives was that if you are going to at that level of 
complexity in the claims process you need to have people who 
have moved up in the system and understand at least how that 
system works.
    But it is to your point again about the training. You know, 
I could probably try to put together something to better 
quantify that but just off the top of my head I don't know that 
I could provide a number.
    Mr. Hall. Thank you. Mr. Smithson, would you elaborate 
briefly on your statement that a more accurate way to measure 
work accomplished should be developed?
    Mr. Smithson. Well, right now with the end product work 
measure system, the adjudicators, the rating specialist they 
get credit each time they rate a case. So in the current system 
if I file a claim, they rate the claim, they deny the claim, I 
submit additional evidence or I file a notice of disagreement 
or I question it and they come back and they rate it again, 
they get another credit. They keep getting credit for that same 
claim.
    So in one case, for example, where they erroneously deny it 
or prematurely deny it and they have to rate it 2 or 3 times 
they get credit each time whereas if they would have rated it 
correctly the first time they would have gotten one end product 
credit. So the system itself, as it is set up now, there is 
really an incentive not to do it right the first time because 
they continue to get credit each time they rate that claim. And 
that is why we make a recommendation and we support the recent 
legislation that has been introduced that would change the work 
measurement system to only provide the credit when the claim is 
final; either that the veteran does not appeal it within a year 
or the Board of Veterans' Appeals makes a final decision.
    Mr. Hall. Thank you. Mr. Hilleman, I am struck by the 
figures that you had in your written testimony and your oral 
testimony also about the backlog being 7.4 percent higher than 
2006 and 22\1/2\ percent higher than 2005. It is obvious, with 
the returning OEF/OIF vets and Vietnam veterans hitting that 
age when things start to develop that may have been lying in 
wait, that the challenge is only going to increase.
    You made a statement about how the AMC could be the premier 
employer or a premier employer in a smaller university town 
making it more effective. How do you see that happening?
    Mr. Hilleman. Thank you for the question, Mr. Chairman. The 
VFW has an idea that the AMC, if it were moved to a smaller 
town with a university where you had a high influx of talented 
young people seeking an education, you would have a ready pool 
of young applicants.
    I can speak from my personal experience having gone to a 
university in a small town in Northern Utah. The student body 
there was about 18,000 students. Some of the premier employers 
in that community of about 100,000 people were Best Buy and a 
cheese factory. So an organization, such as the VA doing 
substantive work, offering career advancement and working from 
a government pay scale would be a very, very competitive 
employer.
    Mr. Hall. That is a good answer.
    Mr. Hilleman. Okay.
    Mr. Hall. Thank you. And it is complete. Until Members and 
Minority counsel return here we will just continue until all 
questions have been asked.
    Mr. Atizado, the erroneous initial decisions that you spoke 
about causing more and more work down the line, obviously 
training, better training at the local office level and more 
staff at the local office level would seem to help that. Is 
there a particular flaw or pattern that you have observed that 
you think contributes to those erroneous decisions?
    I mean, we have seen in my district a few cases with 
individual veterans who have come to our staff and to our 
office for help, but I just thought you are seeing a bigger 
picture than we are. So is there a particular area or two that 
you would pinpoint?
    Mr. Atizado. Not really, Mr. Chairman. The whole idea of 
getting it right the first time really is varied throughout the 
Nation--I was actually trying to recall as that issue came up 
where certain States were--veterans in certain States were not 
receiving equal or were receiving less than the average 
compensation than their counterparts in other States. I was 
trying to remember specifically how that issue was dealt with. 
But I think when I had inserted that in my testimony it really 
does come down to doing it right the first time. Erroneous 
decisions are exactly what we are here talking about.
    And if----
    Mr. Hall. Thank you. I wasn't talking about geographical 
areas where, but areas of medicine or areas of psychiatry or 
you know a particular kinds of injury or disease or so----
    Mr. Atizado. Conditions.
    Mr. Hall. Right.
    Mr. Atizado. Not that we are aware of, Mr. Chairman.
    Mr. Hall. Okay. Thank you very much. That is it for my 
time. Minority counsel may have a question to ask on Mr. 
Lamborn's behalf. Okay. We will wait for Mr. Lamborn. There he 
is now.
    And meanwhile we will ask Mr. Hare if he has questions.
    Mr. Hare. Thank you, Mr. Chairman. Thanks for holding this 
very important hearing today. And I just have two questions for 
the entire panel and you might have touched on this but I think 
it bears repeating.
    The two questions I have are what do you believe are the 
most critical interagency steps that the BVA and the AMC could 
take to decrease the time it takes to process an appeal, would 
be my first question.
    And the second one would be, would changing the ``number of 
cases per year'' provision in the evaluation of these BVA 
judges and attorneys allow for more focus on fully developing 
the claims?
    I know these are two very long questions and I apologize, 
but I am interested to get your perspective on this, because I 
just have to tell you by the way, you know, a backlog of 31,000 
and that stack that you showed to us, you know, these are 
people. I mean this paperwork is paperwork, but what we are 
talking about are people that really need these benefits, 
desperately need them and going through this process.
    I was amazed and I am glad you brought them. It was a very 
eye-opening experience for me. And I don't know for the life of 
me how when you are doing the video, the teleconference, I mean 
I don't even understand why they are not numbering the pages. I 
don't how you can possibly process an appeal like that unless 
you are a Kreskin or a mind reader.
    Mr. Cohen. Well, I think you have hit it on the head. The 
initial problem that goes throughout the system is the paper 
file that has to be transmitted from one place to another place 
and has no index and no pagination. This is probably the only 
agency that would dare to try to render decision without a 
pagination and indexed record. It makes it exceedingly 
difficult on all decisionmakers from the regional office to the 
BVA. And the moving of that record takes time. Whereas if it 
was an electronic record we wouldn't have that problem with 
time.
    The other problem that we have in terms of decisionmaking 
and consuming a lot of time is if we have needless remands, 
unnecessary remands where the case can be decided favorably in 
favor of the veteran based on the presumptions that apply in a 
veterans favor, yet the case is sent out for another exam in 
hopes that the VA might have another doctor who might disagree 
with the veterans' doctor or with the favorable evidence. That 
consumes a lot of time and ends up with the wrong decision 
ultimately that goes up to the Court and comes back down again.
    Mr. Hare. I just want to say before the panel answers, I 
think it will be a wonderful day when we err on the side of the 
veteran and not the Administration.
    Mr. Stichman. I agree with what Mr. Cohen said about the 
need for electronic claims file. That would be a great help.
    With regard to your question about the focus at the Board 
on productivity getting cases out, I think that it is too much 
of a focus and not enough focus on the quality of 
decisionmaking. I would rather see a decision come out slightly 
later and be correct than a decision that needs to be appealed 
to the Veterans' Court and be incorrect. And I think there is a 
general problem on that score.
    Mr. Blake. Sir, I would just kind of re-emphasize one point 
that I don't think can be overstated and that is that I think 
on some level the workload at the BVA could be reduced simply 
by ensuring that the work coming from the RO is correct the 
first time.
    When I discussed this with our appeals representatives, 
their concern was that a significant percentage of cases that 
come to the Board level should have never even gotten there 
because the RO simply wasn't following instructions that the VA 
has in black and white or directives that the VA has put out. 
And if they would just follow their own instructions and rules 
that they are required to follow, a lot of these cases would 
never even reached that level and would have been decided 
properly from the get go.
    So I think that is why I think we have all kind of 
emphasized the point that, I mean you don't necessarily fix the 
whole problem, but you can at least address a significant 
percentage of the problem right away by holding the lowest 
level their feet to the fire.
    We participated in a task force with a couple of the VSO's 
last year for the Ranking Member of the Full Committee, Mr. 
Buyer, addressing our concerns about true performance measures 
and performance standards as it relates to VBA and particularly 
at the RO level. So I think that is where you have to start and 
go from there.
    Mr. Cohen. I will just add one other thing. And that is the 
duty to notify the veteran of evidence that needs to be 
submitted in the claim has been looked at by the VA as a 
procedural hardship and not as something that really benefits 
the veteran. As somebody who has represented veterans since 
1992, I can't count the number of times that I started 
representing a World War II era veteran or a Korean War veteran 
who had a claim pending all those years and when I look at the 
file I explain to the veteran what is necessary to win this 
case. What additional pieces of evidence the veteran could 
submit and win this case. And the veteran said, ``No one ever 
told that to me.''
    And I put the thing together and I win the case. The duty 
to notify is not a mere procedural benefit that a veteran has. 
It is the essence of the case. If a veteran is told from the 
beginning, ``If you just submit this piece of evidence, you 
will win the--we could grant the case.'' And they do, the case 
is over. We don't have to go up and down the ladder. That is a 
very important benefit that veterans are entitled to, but it 
is, still is, interpreted by the VA and by the Court as a mere 
procedural safeguard where the VA really doesn't have to 
evaluate the evidence that is in and instruct the veteran. 
Submit this piece of evidence and we will grant the case.
    Mr. Hare. Thank you, Mr. Chairman.
    Mr. Hall. Thank you, Mr. Hare. The Chair will now recognize 
Ranking Member Lamborn.
    Mr. Lamborn. Thank you, Mr. Chairman. Mr. Stichman, I have 
a two part question about the Veterans Law Judges. And what 
would we do if we replaced them with Administrative Law Judges? 
What would we do with the current VLJ's number one, and number 
two how long would it take to train people from outside the 
system to become proficient so that they are able to render 
accurate decisions?
    Mr. Stichman. Well, as to the first part, the Veterans Law 
Judges I am sure during the process should stay on until you 
have people approved as ALJ's. It will have to be a staggering 
system. But they should be able to apply through the normal 
administrative law judge process of application, examination, 
and selection. So they might end up being selected, but they 
would be competing with other people from outside the agency.
    With regard to the experience of the people who were 
selected, I would think that having a background in veterans 
law would be an advantage in the selection process. And there 
are many people outside the agency that do have veterans law 
experience. And while you were out during the voting, I was 
telling the Chairman about in answer to his question of one of 
the DAV representatives, Steve Purcell who worked as a 
representative both at the court level and at the agency level 
for a number of years and then he went through the process and 
is now a Social Security Administration administrative law 
judge. But with the system at present he didn't have the 
opportunity to be a Veterans Law Judge. And he would have the 
opportunity if we had an open system as used by other agencies.
    So I guess that that is a partial answer to the second 
part. And it is true that if select people are selected who 
don't have veterans law experience there will be a start up 
time and that has a certain disadvantage to it. But in the long 
run I think it is an advantage that type of person is going 
through that competition is going to make better quality 
decisions in the long run. And so in the long run, I think, we 
are benefited by that system.
    Mr. Lamborn. Okay. Thank you. I have no further questions, 
Mr. Chairman.
    Mr. Hall. Thank you, Mr. Lamborn. I just wanted to quickly 
ask before we let this panel go, Mr. Stichman, the VA has an 
obligation to assist claimants in developing evidence to 
substantiate claims. In your written testimony you stated that 
this obligation is frequently unfilled. At what stages of the 
process are claimants suffering most from the lack of help?
    Mr. Stichman. Really at their regional office. I mean that 
is the major problem is you get quick decisionmaking. All the 
panelist have talked about it, about it not being accurate. And 
a major reason they are prematurely decided is the regional 
office didn't get all the evidence needed to make a fair 
decision.
    And so they make that mistake and let's say deny the claim. 
It is appealed up to the Board and then the Board has the 
problem when they look at the case they really should send the 
case back to develop the evidence that the regional office 
should have developed. And because of the pressure to avoid 
what they call unnecessary remands too often the Board caves in 
and decides the case based on an inadequate record. Denies it, 
because the evidence is not in the record. So the claimant has 
to appeal to the Veterans' Court which overturns it, sends it 
back to the Board of Veterans' Appeals to send it back to the 
regional office to get the regional office to get the evidence 
they should have gotten 10 years earlier.
    So the problem begins with the regional office.
    Mr. Hall. Thank you, sir. Mr. Cohen, I was wondering if you 
could explain how you arrived at the 71 percent denial rate in 
your testimony for the BVA? And in your opinion, what is the 
real problem behind this prolonged wait?
    Mr. Cohen. I took the numbers from the report of the 
Chairman for Fiscal Year 2006 and--okay. It is at page 19. What 
I did is I added together the number of cases that were 
remands, which were 12,487 with the other--the cases that were 
nominated--which were designated as ``other'' which were 945 
which comes out to 13,432. I subtracted those from the total 
number of cases, which was 39,076 to leave me with 25,644 merit 
decisions. I then calculated the percentage of denials over 
merit decisions, which comes out to 70.6 percent which I 
rounded off to 71.
    And the second part of the question I didn't hear. I am 
sorry.
    Mr. Hall. Oh, okay. Well let me just change the second part 
of the question. Thank you for that answer. Is there any reason 
why there is such a dramatic, that you can identify, why there 
is such a dramatic asymmetrical increase in denials as has been 
observed or why that increase would be warranted?
    Mr. Cohen. Well I agree with Mr. Stichman that a number of 
the cases that are denied should actually have been developed 
and they are denied because they are inadequately developed. I 
also believe that there is an institutional bias throughout the 
VA where the veterans are not given the benefit of the doubt 
and the benefit of presumptions that exist in their favor. And 
as a result, end up with erroneous denials.
    Mr. Hall. Thank you, sir. Mr. Stichman, I think one of your 
recommendations was to hire more BVA judges. From your 
assessment, how many more judges do you think would be 
necessary to start making headway on the backlog without 
sacrificing the quality of decisionmaking?
    Mr. Stichman. Well I didn't suggest in my testimony more 
BVA judges. I suggested a different system for selection, but I 
don't oppose what many people have suggested that we fund the 
Board better so it can get its job done better. So I am in 
support of that.
    Mr. Hall. Okay. Thank you. I think I just made a mistake. 
That was actually Mr. Cohen's testimony. Sir, I believe you did 
recommend more BVA judges. Was that correct?
    Mr. Cohen. That is correct.
    Mr. Hall. And do you have a number in mind?
    Mr. Cohen. Well what I was looking at is if we were to 
compare the VA system with the Social Security system, we would 
see that in the Social Security system in each region and for 
example in the West Virginia region, there are three offices of 
judges that handle the cases. There is one in Charlestown, 
there is one Morgantown, and people in the northern panhandle 
also go up to Pittsburgh.
    Each one of those regions has about five judges. And then 
sufficient staff to follow through with the decision writing. 
If you look at the VA system, what we are looking at is a four 
to one ratio of judges to staff, but the number of judges that 
handle all these cases is greatly reduced. I would suggest that 
for each region that we would need four to five judges.
    It would--we would probably triple the number of judges and 
staff that we needed in order to adequately make decisions in a 
timely and accurate basis.
    Mr. Hall. Thank you, Mr. Cohen. Mr. Blake, I wanted to ask 
you, you mentioned the high cost of shipping paper claim files 
from one site to another as an appeal works its way through the 
system. And I just wanted to ask you regarding Mr. Lamborn's 
legislation. I don't know if you have had a chance to look at 
it yet, but H.R. 3047 addresses this issue of electronic 
records. Could you comment on the impact this would have on the 
speed and efficiency of the claims processing system?
    Mr. Blake. Well, first let me say we haven't actually taken 
a position on the legislation and we will be glad to do so with 
some detail to our discussion. There are some good points, I 
think the legislation we have some concerns and we have 
actually talked to staff about it and we will be glad to 
address it in more detail with our testimony in the future.
    I think in my testimony I make the point as an example of 
the VHA's electronic medical record and how that has 
streamlined basically the entire healthcare process. And how 
the same principles could be applied to the claims process and 
expedite a lot things. I mean Mr. Cohen held up a copy of an 
appeals file there and knowing that postal rates change 
significantly this year and how that has changed. There is a 
significant cost related to that. If you just figure that it 
doesn't cost anything to send some megabytes over the Internet 
or whatever system the VA wants to develop, you would save a 
lot of money there. And I think you there has been some 
legislation that addresses concerns about timeliness and things 
like that. And you significantly reduce a lot of wasted time 
that is done simply through shipping as well.
    Mr. Hall. Thank you. Of course we will be having a hearing 
on that so we will look forward to hearing more from you on the 
details of that bill.
    I wanted to ask Mr. Smithson, given the issues with 
workflow that you cited in your testimony, does the American 
Legion believe that veterans would be better served currently 
by increasing staffing at the AMC or by doing away with this 
entity entirely?
    A number of you mentioned, you know, either fund it and 
staff it adequately or do away with it. And it sounds to me 
like it sort of hasn't yet hit a stride where it is doing what 
we expected or hoped that it would do so?
    Mr. Smithson. Unfortunately, for the AMC and not all of it 
is the AMC's fault. When they opened their doors they were 
faced with an extreme backlog of cases that came from the 
defunct BVA development unit. So they have been under the gun 
ever since they opened their doors.
    It is not only the type of work or the amount of work they 
have. If you look at the type of decisions that are coming out 
of the BVA or are coming out of the AMC for the first 11 months 
of this Fiscal Year, 21 percent of the cases that were remanded 
by the Board were previous remands, meaning they were already 
at the AMC once before. At least once before. Thirty percent of 
the cases allowed by the Board of Veterans' Appeals were 
previous remands that were again denied by the AMC and sent to 
the Board.
    So I think we really need to look at the quality of work 
that is being done at the AMC. Why are they making these type 
of errors and address that. Obviously, more staffing to help 
with that would facilitate that, but ultimately I think we need 
to look at the quality. And if the VA is not willing to put the 
resources in place at the AMC, they need to think of other 
options.
    Mr. Hall. Thank you. I would like to recognize Mr. Hare 
again for another question.
    Mr. Hare. Thank you, Mr. Chairman. And I will try to brief 
here, because I have to leave for another meeting. But I think 
you might have touched upon this, but I am hoping that the 
VSO's here can help me out.
    The BVA is reporting a 93 percent decision quality rating 
and many of the VSO's that have been here, many of the VSO's we 
have talked to, are reporting that about 75 percent of the 
cases brought before the CAVC are either remanded or reversed. 
And I am wondering if you could explain to me, maybe you 
already did, but I just want to make sure that I am clear on 
this. What is, you know, why is there such a large discrepancy 
here and what is causing that, in your opinion?
    Mr. Stichman. Well I will take a crack at that. I think the 
question is better addressed to Chairman Terry. I don't know 
how they came up with the 93 percent accurate figure. My 
understanding is that the reason it is so high is they don't 
consider errors, some types of errors like duty to assist or 
reasons or basis errors made that the Court finds that the 
Board has made as rendering the decision inaccurate. I could be 
wrong about that. Chairman Terry, I think, is the best person 
to answer it.
    But it makes very little sense that the Board of Veterans' 
Appeals decisions could be 93 percent accurate and to have such 
a high inaccuracy finding rate at the Veterans Court. Now the 
Veterans Court does review only a small percentage of the 
overall Board decisionmaking, that is true. But to believe that 
only the erroneous decisions that have errors are appealed to 
the Court is not consistent with the decisions I have reviewed 
and in talking to veterans who give up.
    Mr. Cohen. And I would agree with that. The real test is 
the number of affirmations by the Court, that is only 20 
percent. That does not indicate an accuracy rate in the 90 
percent bracket.
    Mr. Hare. I am sorry. What does that 20 percent mean? When 
you say that they are affirming----
    Mr. Cohen. That only 20 percent of the decisions coming out 
of the Board are affirmed by the Court outright. The rest of 
the cases are either remanded because of errors committed, 
notice is not given, extra development needed, or are reversed. 
So only 20 percent of the time does the Court agree with what 
the Board has done. And understanding what Mr. Stichman has 
said, many of the veterans who get denials from the Board do 
not appeal. They just give up. Especially someone with post 
traumatic stress disorder who doesn't like the system anyway. 
When they get the denial they just throw it away, they get 
angry, and they won't do anything further.
    Some of them may file new claims. And you have to 
understand that the claims that do go to the Court that are 
appealed to the Court are not just ones that are taken by 
attorneys. Most of the cases that go up to the Court initially 
are filed pro se by veterans. They are not filed by attorneys.
    So we can't assume that the ones that go up are only the 
ones that have errors in them. We have to assume that there 
were errors in a lot of them and they just never went up to the 
Court.
    Mr. Hare. Thank you. Thank you, Mr. Chairman.
    Mr. Hall. Thank you, Mr. Hare. I would like to thank all of 
our Members of the first panel very much for your testimony. We 
will be taking it to heart and trying to incorporate into the 
best legislation we can develop. You are now excused. Thank you 
for your patience and your generosity with your testimony.
    We will now call panel two. Joining us is Mr. Arnold Russo, 
the Director of Appeals Management Center of the U.S. 
Department of Veterans Affairs. And Mr. James P. Terry, the 
chairman of the board of Veterans' Appeals for the U.S. 
Department of Veterans Affairs.
    Mr. Lamborn. Mr. Chairman. I am going to excuse myself 
because I am torn, but I want to also go to the farewell 
reception for outgoing Secretary Nicholson. So I am going to 
excuse myself, but I am leaving some questions for the record. 
And I will be studying the written testimony that the two 
witnesses have provided in detail in lieu of hearing them 
verbally speak.
    Mr. Hall. Mr. Lamborn, you are excused. Say 
``congratulations'' and ``good luck'' to Mr. Nicholson for us.
    Mr. Lamborn. I will.
    Mr. Hall. Mr. Russo, thank you for your patience, and Mr. 
Terry. Both. I guess we will start with Mr. Russo. We have your 
written statement so you are recognized for 5 minutes.

   STATEMENTS OF ARNOLD RUSSO, DIRECTOR, APPEALS MANAGEMENT 
 CENTER, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS; AND HON. JAMES P. TERRY, CHAIRMAN, BOARD OF 
    VETERANS' APPEALS, U.S. DEPARTMENT OF VETERANS AFFAIRS.

                   STATEMENT OF ARNOLD RUSSO

    Mr. Russo. Good afternoon, Mr. Chairman, Ranking Member. I 
appreciate the opportunity to testify today.
    The Veterans Benefits Administration and the Board of 
Veterans' Appeals have worked closely together to address the 
root causes of remands. Our joint initiatives have focused on 
increased coordination of data collection, identification of 
trends, and training. These joint initiatives have proven to be 
very successful.
    The remand rate for Fiscal Year 2005 was 43 percent. The 
current remand rate has improved dramatically to 34 percent. We 
continue to work to identify the root causes of cases being 
remanded. There are many reasons why a case may be remanded by 
VBA for additional action that are beyond the control of the 
regional office that process the case, such as a regulatory 
change or a new precedent court decision.
    While remands do not necessarily mean that a mistake was 
made in the processing of the case, we have focused our 
attention on analyzing those cases where development by the 
regional office was deficient and the remand could have been 
avoided. Deficiencies are identified nationally and by regional 
office and are targeted for development of additional guidance 
and or increased training.
    Additionally, VBA this year added avoidable remand rate to 
the performance standards for all regional office directors. 
Through the end of August 2007, the Fiscal Year national 
avoidable remand rate is under 18 percent or a 6 percent 
improvement over last year. To improve the timeliness of remand 
processing at the Appeals Management Center, we have added a 
technical expert to every development team to ensure that all 
the information requested in the remand order was asked for and 
obtained or a satisfactory explanation as to why the evidence 
could not be obtained is included in the claims folder.
    This procedure provides an internal check on our 
development practices and ensures consistency throughout the 
AMC. The AMC has received assistance in remand processing from 
three of VBA's resource centers. This allowed the AMC to 
establish a workflow that develops cases in a timely, 
efficient, and accurate manner. During Fiscal Year 2003, 
regional offices were taking an average of 700 days to complete 
a remand. In Fiscal Year 2005, average processing time for a 
remand completed at the AMC was 400 days. Currently, the AMC is 
averaging 343 days to process a remand.
    We continue to strive for further improvement. We have set 
a strategic goal of 230 days to complete remands. This goal 
represents the minimum time needed to complete a remand given 
the notification, evidence collection, and follow up 
requirements of the Veterans Claim Assistant Act and other 
legal requirements.
    Steady improvement also continues as a result of the AMC's 
effective working relationships with many of the veteran 
service organizations. The VSO's work directly with our 
decisionmakers and help reduce administrative waiting time. 
When the VSO's are satisfied that a case is ready to be 
certified back to the BVA they complete the necessary forms and 
assist us in getting the case back to the BVA for a final 
determination.
    The AMC's progress in improving the quality of remand 
processing is demonstrated by the reduction in the number of 
cases remanded a second time. Two years ago approximately 35 
percent of the cases certified to BVA by the AMC were again 
remanded to the AMC. Today, approximately 85 percent of the 
cases certified to BVA by the AMC are accepted and finalized. 
The AMC remand inventory at the end of Fiscal Year 2006 was 
approximately 14,650. Currently the inventory is above 18,300. 
One of the reasons for the increased inventory is the increase 
in the number of remands received during the Fiscal Year. Last 
year, the AMC received 15,000 remands or an average of 1,250 
per month. Even with the reduced remand rate, we are this year 
receiving an average of 1,417 remands per month.
    In addition, because of VBA's increased disability claims 
workload, the three resource centers that had been assisting 
the AMC were redirected to supporting regional offices with 
high workload inventories. To address the remand workload, the 
AMC was authorized to increase its staffing level from 87 
employees to 105. These new employees have gone through 
centralized training and are now receiving training at the AMC.
    Many of our new hires will attain journey-level status 
toward the end of the Fiscal Year and will then be able to 
significantly contribute to remand production. The long-term 
impact of our hiring will be that the AMC will become self-
sufficient and will continue to improve in both the timeliness 
and accuracy of remand processing.
    [The prepared statement of Mr. Russo appears on p. 57.]
    Mr. Hall. Thank you very much, sir. Mr. Russo, you spotted 
the red light and stopped shorter than you had to. But we will 
have a couple of questions for you in a moment. And thank you 
for your testimony and for the improvement that you are making 
and describing to us, which was certainly good news.
    Chairman Terry, your statement is in the record and you are 
now recognized for 5 minutes.

                STATEMENT OF HON. JAMES P. TERRY

    Mr. Terry. Thank you very much, Mr. Chairman. It is a 
pleasure to be here. And I thank you for the opportunity to 
discuss with you the Board of Veterans' Appeals role in the 
process of benefits adjudication.
    I would like to say a few words about the VA adjudication 
system, which has been described in such glowing terms by the 
prior panel. And I would like to do it by starting and looking 
at a few numbers. And I think we need to put this system in 
perspective. I believe the first panel did not do so.
    This prior year, Fiscal Year 2006, the Veterans Benefits 
Administration, and they are not here to defend themselves so 
let me try, adjudicated approximately 815,000 claims. Eight 
hundred and fifteen thousand claims. Less than 5 percent of 
those were appealed. And certainly not 95 percent of the 
claimants in that system received what they asked for. Five 
percent appealed to the Board of Veterans' Appeals.
    Of those who appealed to the Board of Veterans' Appeals, 
some 41,000, we adjudicated 39,076 claims. Of that number, 9 
percent appealed to the Court of Appeals for Veterans Claims. 
Nine percent. And as you know, Mr. Chairman, this is the 
easiest system in the world to appeal. For example, for VBA the 
words, ``I disagree'' or ``I appeal'' on a Notice of 
Disagreement is all that is required and a mere two-line Form 
Nine is required as each of the gentleman who testified before 
well know.
    There is no cost to appeal to the Board of Veterans' 
Appeals. There is a $50 charge to appeal to the Court of 
Appeals for Veterans Claims and it is always waived, at least I 
have not seen one time it has been denied if the individual 
indicates an inability to pay.
    Of those cases that go to the Court of Appeals for Veterans 
Claims, 15 percent are appealed or a somewhat higher number 
than are appealed to our Board. I think it is important to know 
that despite the testimony in the prior panel, 40 percent in 
Fiscal Year 2006, of those cases that went to the Court of 
Appeals for Veterans Claims were either affirmed or were 
dismissed because our decisions were upheld for one reason or 
another.
    I think we need to put in perspective what has been 
testified to and look at the real numbers. We are talking about 
91 percent of the people who come to our Board being satisfied, 
not appealing to the Court of Appeals of Veterans Claims, 91 
percent. Ninety-five percent being satisfied at the regional 
office level. And 85 percent at the Court of Appeals of 
Veterans Claims and not going forward to the Court of Appeals 
for the Federal Circuit.
    I have had the opportunity in my 36-year legal career to 
serve both as a judge in the military system where I was a 
General Court-Martial Judge, and also a judge in the system at 
the U.S. Department of the Interior before I came over here. 
And in that prior life at Interior, I managed the 
Administrative Law Judge system. I would just like to say a 
little bit about my observations of this system in which I am 
presently engaged, and a system that I saw at Interior as an 
example of one in which Administrative Law Judges sat.
    We have a very complex body of law. And it requires a great 
deal of experience to administer that body of law as a judge. 
And I believe that it is important that we all recognize that 
someone coming just as a generalist would have a tremendous 
learning curve. We presently have a system where the 
individuals are screened by senior judges within our system. A 
recommendation is made to a panel. An evaluation is made by a 
panel of--a second panel to evaluate their talents in each of 
the core competencies. They are then interviewed by an 
interview panel with outside panelists from other organizations 
in every case. They are then recommended to me. I discuss it 
with the Secretary. The Secretary goes and talks to the 
President and the President gives his approval.
    I beg to differ with the good judgment of the individuals 
who have testified before, and I know they have testified in 
good faith, but at the same time, I think our judges are 
comparable with any in the Federal system. When I was in the 
Marine Corps and serving as a General Court-Martial Judge, I 
thought we had some of the best judges I had ever seen. I can 
honestly tell you I think the judges we have on the Board of 
Veterans' Appeals are the finest I have ever seen.
    [The prepared statement of Hon. Terry appears on p. 58.]
    Mr. Hall. Thank you, Mr. Chairman. Since we have such a 
small contingent of the Committee here and we won't have 
questions from a great number of Members, I want to give you an 
opportunity if you would like to talk about the recommendations 
that you make in your written testimony.
    Would you like to--you have 11 points of ways by which the 
Board could continue to improve. You have already spoken about 
some of them, but I would like to allow you to elaborate.
    Mr. Terry. I would be delighted----
    Mr. Hall. Well you have waited so long.
    Mr. Terry. Well, certainly, I have put my written statement 
in and those cover those issues, but I would be glad to address 
anything the Chairman would feel most comfortable with.
    We certainly are very proud of the fact that the Secretary 
has asked us to spearhead an initiative, which is called the 
Expedited Claims Adjudication Initiative. This has been briefed 
to the staffs of both the House and Senate Committees of 
jurisdiction and to VSO representatives as well. And this will 
offer certainly an expedited process to represented claimants 
who desire to shorten the time required to process their 
claims.
    This is going to be formally established when the 
regulatory scheme is finally vetted through the Federal 
Register. And that process will be set up in four locations for 
a period of two years, and it would simply ensure that cases 
are not sitting on the shelf waiting for time to expire. And it 
would simply offer the veteran the opportunity to move forward 
when, in fact, all evidence on any given area has been 
presented.
    Mr. Hall. Thank you, sir. May I ask Mr. Russo, you 
mentioned that the help VSOs have provided to reduce 
administrative waiting time for claimants has been significant. 
Can you describe your relationship with the VSOs more deeply 
and outline what role they play in the appeals process at the 
AMC?
    Mr. Russo. Sure. Mr. Chairman, I currently have three 
members from different service organizations sitting on the 
floor with the decisionmakers of the AMC. And when a decision 
comes out it is promulgated and given directly to that 
representative for review. If that representative has a 
question, they have the opportunity to go and speak directly 
with the decisionmaker and, if there is a difference of opinion 
there, they can certainly work out that difference of opinion 
or resolve it. Certainly, if there is a clear mistake made, 
typographical error, I have seen all kinds of things that we 
are able to resolve just by that open line of communication. We 
can clear it up there instead of letting it go through the 
process.
    Mr. Hall. In developing a remand, how does the work done by 
the AMC differ from that done for the same purpose by the ROs? 
And can you describe an average remand that is processed by the 
AMC?
    Mr. Russo. Sure. Mr. Chairman, the work itself is very 
similar to that of the regional offices with the one exception 
that the remand actually has orders in it telling the VBA folks 
what exactly to go and obtain in order to make that claim ready 
for a final decision. So what they do is they enumerate a list 
of orders that the people on my staff go and get the particular 
type of evidence. For example, it might be medical evidence 
from particular private doctors. It might be Federal records 
from different agencies and ultimately it will probably be an 
examination and a medical opinion.
    And my staff goes ahead and literally puts a checklist 
together enumerating exactly what they are doing to accomplish 
each one of those remand orders. When those remand orders are 
complete, and only when those remand orders are complete, is it 
certified as a ready-to-rate case.
    I had mentioned in my oral testimony about a technical 
expert on each particular development team. There are cases 
that are a little bit more complicated. Those technical experts 
are there to assist the other members of those teams in the 
more complicated cases. They are also there to review 
internally some of the quality of the work. And if they see 
mistakes are being made before it is certified as ready-to-
rate--ready for a decision, they go ahead and correct those 
errors and make sure that the evidence is properly obtained 
before it is sent up for a decision.
    Mr. Hall. Thank you. Mr. Russo, with your new hires, do you 
believe that the AMC is staffed adequately and has adequate 
resources? And when do you think you will be able to meet your 
stated long-term goal of self-sufficiency?
    Mr. Russo. Yes. I do believe that we are staffed 
adequately. I couldn't give you an estimate as to when I would 
believe we would make our long-term goal of being self-
sufficient. Everything hinges upon the number of claims that 
are being filed each particular year. The number of claims that 
are appealed, and a number of remands that we get from the 
Board of Veterans' Appeals.
    I will tell you that the area that I have concentrated on 
in my two plus year tenure as the Director of the Appeals 
Management Center is to properly get and gather the evidence so 
that a final decision can be made. This was an area that I 
thought was deficient in the Appeals Management Center and that 
was the area of concentration that I decided we needed to pay 
the most attention to. And that is what we have accomplished.
    Mr. Hall. Okay. Considering that, what is your best 
estimate as to when the backlog of over 18,000 cases can be 
reduced?
    Mr. Russo. New decisionmakers have been hired. They are 
currently being hired. And it is approximately a 2 year, 
minimum 2-year training program before they are considered to 
be journeymen level. So I estimate most of the decision makers 
that we have recently hired would be fully trained and 
considered journeymen by third quarter Fiscal Year 2008.
    Mr. Hall. Okay. How does the AMC's role in the broader 
claims processing system add to or affect the workload of the 
BVA and the regional offices?
    Mr. Russo. I didn't catch the entire question, Mr. 
Chairman.
    Mr. Hall. Oh. How does the AMC's role in the broader claims 
processing system add to the work of the BVA and the--or does 
it in your opinion affect the work of the BVA and the regional 
offices?
    Mr. Russo. The broader claims load is what you are asking. 
I would say it doesn't. The AMC is created to address the 
remand workload.
    Mr. Hall. Uh huh.
    Mr. Russo. So when a remand comes from the Board of 
Veterans' Appeals instead of going to the regional offices for 
further development, it comes to the central location in 
Washington, the Appeals Management Center, and it handles that 
workload. The AMC does not handle the regular, first-time 
claims that are filed at the regional offices.
    Mr. Hall. So it is either neutral or beneficial in terms of 
the work that is required of BVA or the regional offices?
    Mr. Russo. Yes.
    Mr. Hall. Okay. That is--thank you. Chairman Terry, could 
you explain, please, the BVA's and the VA's work measurement 
system with some detail in terms of the emphasis in terms of 
awarding points for quantity or quality. Is more emphasis 
placed on quantity because of the great number of cases that 
are before us? And if not, why do you think there is such a 
belief held by so many veteran stakeholders?
    Mr. Terry. I would be delighted to answer that. I think 
where our focus is both on quality and quantity, and I take 
issue with the view of most veterans do not think that we are 
doing a great job. I go around the country every day and I 
think that the great majority of veterans you talk to will tell 
you that we are doing a good job.
    Let me just start with our quantity. First, sir, we asked 
each of our attorneys to go through an incredibly intense 
training program when they come on board. We are seeking to 
hire clerks who have been clerks for Federal judges in nearly 
every instance. In fact, our pool right now and the people we 
are interviewing--the great majority of them have served as 
clerks. We are finding the great people out there and we train 
them over a period of approximately 6 months before they go on 
production and are rated in terms of the decisions they write.
    So it is that initial 6-month intense training program 
where they were mentored on a daily basis by a senior attorney 
and by a judge who looks at every one of their cases and they 
grow and develop expedientially during that period of time. We 
start our people at the lowest level in terms of the complexity 
of the cases, and by their third year, they are expected to do 
most every case that we can find within our inventory.
    You have to remember that we have an intense training 
program that we have developed in the Board and I have 
supported tremendously. Every month we have at least one 
training session, normally of 2 hours. We invite the local Bar. 
That is our Bar Association from the Court. And we invite 
general counsel participants as well and we get good 
participation from both.
    Those are videotaped and they are made available to our 
attorneys as an issue comes up so they can look back at those 
training sessions, but we feel that our training is among the 
best available in the Federal Government today.
    We ask our attorneys to draft between three and four 
decisions a week when they are competent and they are certified 
by their judge as ready and able to do so. We evaluate every 
one of those decisions as it comes out. It is evaluated by the, 
first of all, the mentor in the first 6 months and thereafter 
by their judge. That case is reviewed and certainly as we look 
at those cases by our young attorneys, they are both used as 
training tools and certainly as a means by which we can help 
the attorney grow in stature and in competency.
    We have a quality review program which we also think is a 
fine program and this is certainly what we were talking about 
before when we talked about the 93 percent error-free rate. And 
that rate is designed to show us in reviewing a selected number 
of our decisions that there are no substantive or procedural 
errors which would have resulted in the case being reversed or 
remanded by the Court of Appeals for Veterans Claims. Now there 
has been talk of a 71 percent error rate. That is simply not 
the case. I have the statistics from last year right here and 
certainly as I mentioned to you, 40 percent of the cases last 
year were either affirmed or dismissed. There were 29 percent 
that were remanded and then there were 18 percent of the total 
were reversed, vacated, and remanded.
    So I mean, I think you need to take a look very carefully 
at the Court's own statistics before you rush to judgment in 
that regard. Certainly we are dealing in every case with an 
open record and a system which requires a remand if in fact 
something is presented after the case is on our docket back to 
the RO for a complete review. And that is a problem. It is a 
tremendous problem. And we have addressed it before your 
Committee previously and certainly it is among the legislative 
proposals in addition to the paperless record, which we 
strongly support. By the way, on the paperless record you need 
to know, sir, that the Court rules right now require a paper 
record and until that changes both with the Court of Appeals 
for Veterans Claims and the Federal Circuit, that is not going 
to change. We think it is a wonderful idea. We join our 
colleagues from the first panel. We certainly applaud it. But 
until the Court agrees to it and changes their rules of 
procedure, that is not going to change.
    Mr. Hall. Well we will be resigned to duplication maybe for 
some period of time, which might be a good thing in case the 
hard drive crashes. But, you know, part of our issue here is 
resolving different statistics and different numbers that we 
are hearing.
    So I wanted to ask you, Mr. Chairman, we heard testimony 
today that the denial rate of cases from the BVA on the merits 
hovers around 71 percent. Your Fiscal Year 2006 annual report 
does not provide a definitive total denial rate.
    Mr. Terry. We grant, sir, just like most appellate courts--
we are in the range of between 20 and 23 percent and have been 
for the last 7 years. Similarly, if you look at the Court of 
Appeals for Veterans Claims, their grant rate last year, that 
is reversing us, was about the same. It is at 19 percent. So in 
looking at appellate courts and what they do, they are looking 
at whether or not the group below, the body below, made an 
error.
    And I think that when we look at certainly, when you look 
at the situation with the Veterans Benefits Administration, 
they are deciding 815,000 cases and they are granting a large 
number of those cases, but certainly not 95 percent. And so 
certainly I think you have to look at the system in the entire 
context.
    Certainly with the ease in which in our system one can 
appeal when you look at only 5 percent of VBA's claimants 
seeking redress. And when you look at only 9 percent of those 
before our Board with the ease by which they can appeal seeking 
redress. And when you look at the number of cases that are 
upheld by the Court of Appeals for Veterans Claims, it is 
averaging 40 percent last year and this year in terms of those 
that are dismissed or those that are affirmed. And then when 
you look at the number that are sent back for further 
development, not because they are wrong or that we should be 
changed, but because either the law has changed, sir. You have 
to remember that when the Court of Appeals for Veterans Claims 
sees a case from our Board they are seeing it 2 or 3 years down 
the road. That is how long it takes for them to get to it. I 
would like to say it was sooner, but that is not the case.
    Mr. Hall. Right.
    Mr. Terry. And the law changes and it is retroactively 
applied.
    Mr. Hall. Could you tell us if there is a place in your 
annual report where we can find what your figure for the BVA's 
denial rate is?
    Mr. Terry. For the what rate?
    Mr. Hall. The BVA's denial rate, what you believe it is. 
And is there a location in your annual report where we can find 
it?
    Mr. Terry. Well certainly you can figure it out based on 
the number of cases that are remanded for further development, 
which is last year as you know 32 percent. And the number we 
granted, which last year was 21 percent. And then there is the 
category, I believe of ``others.'' And so for example, we would 
have upheld the VBA on the remainder of those cases. We would 
have found that they made the right decision. It is not a 
denial rate, it is a finding that they have made the proper 
decision below.
    Mr. Hall. Okay.
    Mr. Terry. Of that 5 percent of the people who have 
appealed.
    Mr. Hall. Okay. In your Chairman's Report you stated that 
the BVA has maintained a decision quality at over 93 percent. 
We are trying to understand and reconcile with earlier 
testimony that the Court of Appeals of Veterans Claims has set 
aside, either through remand or reversal, a large majority of 
76 percent.
    Mr. Terry. Well as I say, I think you need to take a 
careful look at their own annual report. I have it right in 
front of me and that certainly is not indicative of this 
report. So I mean I listened to the prior panel as well, and 
you know, when you are trying to present your perspective it is 
interesting.
    Mr. Hall. Can you explain how your decision quality 
percentage is calculated and how we should reconcile these 
different numbers?
    Mr. Terry. Absolutely. What we do is we look at a certain 
number of our cases randomly taken and we basically look and 
see whether they were subject to a procedural error which would 
of resulted in the case being reversed or remanded. And we 
evaluate and basically correct in-house any procedural or 
substantive errors before it goes out, but that is the way we 
keep a measure of effectiveness and use that as part of our 
training program.
    Now the U.S. Government Accountability Office (GAO) has 
taken a very careful look and reviewed this. We have a report 
and would like to share it with you in which they have 
applauded our program and said it was actually exemplary. We 
would be delighted to share that with you.
    [Two GAO reports were supplied to the Committee and will be 
retained in the Committee files. The reports are entitled, 
``Veterans' Benefits--Quality Assurance for Disability Claims 
and Appeals Processing can be Further Improved,'' August 2002, 
GAO-02-806; and ``VA Disability Benefits--Board of Veterans' 
Appeals Has Made Improvements in Quality Assurance, but 
Challenges Remain for VA in Assuring Consistency,'' May 5, 
2005, GAO-05-655T, Testimony Before the Subcommittee on 
Disability Assistance and Memorial Affairs, Committee on 
Veterans' Affairs, House of Representatives by Cynthia A. 
Bascetta, Director, Education, Workforce and Income Security. 
GAO Report Number GAO-02-806 can be obtained from the GAO 
website at http://www.gao.gov/new.items/d02806.pdf, and GAO 
Report Number GAO-05-655T at http://www.gao.gov/new.items/
d05655t.pdf.]
    Mr. Hall. Thank you. We would appreciate that.
    Mr. Terry. Thank you very much. We will do that.
    Mr. Hall. And we heard testimony today that as BVA has 
increased its focus on productivity there has been a decrease--
a dramatic increase in the denial of claims while approvals 
have stayed relatively the same. To what do you attribute this, 
if you agree with it, statistically asymmetrical trend?
    Mr. Terry. I don't think the denials have remained the same 
or have increased by any means. I think we have upheld the 
Veterans Benefits Administration to a greater degree as they 
have improved the quality of their decisionmaking below. I 
think that is a trend which we have seen and we have seen it 
too in the sense that our remand rate, as I had mentioned 
before, went from 56.8 percent in 2004 down to 32 percent last 
year and it is holding at that.
    Now clearly the remand rate at the Court of Appeals for 
Veterans Claims went down this year too from 33 percent last 
year to 29 percent this year. And I think it is important--from 
2007 at this point--and I think through August. So I think it 
is important that those figures be kept in perspective as well. 
I think the entire system benefits and improves as increased 
training is provided. One of the things we do, sir, in each of 
the 126 travel boards that we send out each year, is the last 2 
days we work with the VBA staff, rating staff, and provide our 
insights and our training. We find that to be a tremendous 
opportunity and I think it really works well. And I think this 
has a tremendous affect on their effectiveness.
    Mr. Hall. Thank you, sir. I wanted to ask you, given the 
fact that you know statistics are one groups' or one persons' 
percentages or figures may or may not be as accurate as the 
others, but we are still looking at roughly a 2-year period for 
a decision to be made by the Board on average.
    Mr. Terry. Well you have to remember, sir, that while we 
are at July and August 2005 right now, we take more than 12,000 
cases a year and move them ahead of the pack, because either 
the person is aged, is infirm, has a financial disability of 
some kind, or it is a remand case. That goes to the head of the 
line.
    Mr. Hall. Right.
    Mr. Terry. So any----
    Mr. Hall. The rest of the question. Excuse me, sir. But the 
rest of the question was going to be, what can we in Congress 
do to help you, to help the VBA shorten the length of the 
appeals process? More people? Legislative mandates?
    Mr. Terry. I would love to respond to that, because I think 
the prior panel hit on a number of very, very good thoughts. 
And we certainly feel that a paperless record is absolutely 
mandated. We would welcome your support in that regard and your 
support with the Judiciary Committee to make that happen. It is 
going to have to come out of that Committee and certainly we 
are going to have to gain their support.
    We would really greatly appreciate your help in that 
regard. We think certainly closing the record as long as the 
individual is totally protected. One of the great concerns of 
the VSO community has been that they are afraid to close the 
record because they are afraid they are going to lose the date, 
the claim's original date. We would not object to that 
whatsoever. We think that certainly preserving the date on 
which the claim was originally filed is a date of record is 
absolutely incredibly important. We think that would help 
tremendously.
    Now with the Hodge case which came down 3 years ago, there 
is absolutely no difficulty whatsoever in reopening with any 
new and material evidence. All it need do is shed new light or 
give a new perspective on the proceeding and if so, the case is 
reopened.
    I think that the time has come to make these proceedings 
more in line with other proceedings in the Federal Government 
and move forward while at the same time giving every 
opportunity for the veteran to prevail.
    Mr. Hall. Thank you. In your testimony you stated that BVA 
is currently operating below a required personnel level. 
Current Fiscal Year 2008 appropriation levels would provide for 
more FTEs for the BVA. Do you feel this increase would be 
sufficient to handle the increased input you have been 
experiencing and make headway toward eliminating the backlog? 
And what would be the ideal staffing size to ensure the 
timeliest decision possible for our veterans?
    Mr. Terry. Thank you, Mr. Chairman. We have testified 
previously and before the full Committee and certainly before 
the Office of Management and Budget (OMB) that our staffing 
needs to begin to reflect what it was 15 years ago. If you 
recall in 1997, sir, we were at 492 FTE's. We are at 444 this 
past year up from 434 the year before that.
    We have more cases in our docket. We have more complex 
cases, multi-issue cases, and certainly 444 is not reflective 
of what we need. OMB and the appropriators have agreed to give 
us 31 in the 2008 budget. We believe that will occur. We have 
likewise urged the Secretary, and he supported this, that we 
seek an additional 25 in 2009. Our understanding is that this 
is moving forward with our submission as a Department. We would 
certainly appreciate any support that your Committee could give 
us in that regard. Greatly appreciate it, sir.
    Mr. Hall. You can count on it. We are trying.
    Mr. Terry. Thank you very much, sir. I greatly appreciate 
that.
    Mr. Hall. Last, I wanted to ask you what do you think 
caused the remand rate to increase so dramatically in Fiscal 
Year 2004? And do you think it was a one-time issue or a trend 
that may reoccur?
    Mr. Terry. There are a great number of reasons, the 
greatest of which was the interpretation by the Court of 
Appeals for Veterans Claims and the Federal Circuit of the 
``Veterans Claims Assistance Act'' and the cases hitting the 
Board at that point. Certainly, that we have all recognized 
that to be the case. We have overcome that. And the other thing 
was that Congress mandated that the Court of Appeals for 
Veterans Claims carefully provide a prejudicial error analysis 
in our cases. And they were not doing so, they have begun to do 
so and that has had a tremendous impact. The new Chief Judge 
has been extremely influential in that regard and we greatly 
appreciate it.
    Mr. Hall. If you have the patience for one more, I was 
wondering if you could provide us with the details of the 
Expedited Claims Adjudication Initiative. Has it launched? And 
if so where and how is it working?
    Mr. Terry. The Initiative is a pilot program to be 
established in four of our regional offices. It is designed to 
ensure that not so much that things be done differently, but 
that excess time not required to proceed with a veterans claim 
be taken advantage of and the case be moved forward more 
quickly.
    This would simply ensure that cases are not sitting on the 
shelf waiting for time to expire. This is the easiest way I can 
explain it. An individual would opt in within 30 days of filing 
a claim. He can opt out at any time. If he should opt out by 
not making the new time processing requirements in the program 
he would simply go back into the regular queue as if he had 
been in the queue the entire time.
    Mr. Hall. Mr. Chairman, Mr. Russo, thank you both for your 
patience and for the work that you do and your service to our 
veterans. We have a big problem to solve together, but I am 
confident that we can. And that is the spirit that will take 
for us to solve it, or at least--it is a work in progress. It 
is progress not perfection, I am sure.
    We will keep working toward that. And minority counsel will 
submit Mr. Lamborn's questions for the record and perhaps you 
could respond in writing to them if----
    Mr. Terry. Absolutely.
    Mr. Hall [continuing]. You would be so kind.
    Mr. Terry. And thank you so much for the opportunity.
    Mr. Hall. And thank you for your patience and for hanging 
in there all afternoon with us. The record will remain open for 
5 business days. Now this panel is excused and the Committee is 
adjourned.
    [Whereupon, at 5:04 p.m., the Subcommittee was adjourned.]






























                            A P P E N D I X

                              ----------                              

           Prepared Statement of Hon. John J. Hall, Chairman,
       Subcommittee on Disability Assistance and Memorial Affairs
    I would ask everyone to rise for the Pledge of Allegiance--flags 
are located in the front and in the rear of the room.
    I would first like to thank the witnesses for coming today to 
appear before the Subcommittee. I know the challenges presented by the 
growing backlog at the Board of Veterans' Appeals and at the AMC are 
troubling for us all. Making the administrative appeals process better 
and quicker for our veterans is our shared priority and I thank you for 
joining me in helping to find workable solutions.
    As many of you know, the Board of Veterans' Appeals, established in 
1933, is designed to provide the veteran with an opportunity to appeal 
a decision issued by one of the 57 Regional Offices (RO) of the VA. No 
one disputes the importance of this step in the claims process, but 
unfortunately it has become more foe than friend to our veterans 
seeking a decision on an RO appeal. Moreover, it seems to be an 
unspoken belief held by many veterans and their advocates that given 
the variances in RO level decisions, an appeal to the BVA is almost a 
necessity.
    However, appealing an RO decision presents many challenges for our 
veterans. With a current backlog of over 39,000, the average length of 
an appeal filed with the BVA is an amazing 761 days. This inefficiency 
is only exceeded by the outcome of these long waits--a 71 percent 
denial rate by the BVA. Also, although BVA claims a 93 percent accuracy 
rate, the Court of Appeals for Veterans' Claims sets aside or remands 
over 76 percent of cases appealed, indicating a much lower accuracy 
rate in reality. It is clear from reading the BVA's annual report to 
Congress that these percentages may not be based on the same 
statistics.
    There are many reasons for the current 40,000 case backlog at the 
VBA. First, as pointed out by several veterans' advocacy organizations 
in their testimonies--an entity, such as the BVA, which employs a 
system of rewards based on the quantity of work inputs rather than the 
quality of those work inputs, will soon become an organization that 
adopts the principle of quantity over quality, consciously or 
unconsciously.
    Additionally, unless the VA standardizes the training process for 
its raters, this often subjective system will continue to yield 
inequitable results. Most claims raters indicate that their major 
source of learning was on-the-job training. As the preliminary findings 
of the Disability Benefits Commission indicate, over 50 percent of 
raters believe that they are ill-equipped to perform their jobs and 
over 80 percent of raters and VSOs believe there is too much emphasis 
placed on speed relative to accuracy. Also, as the recent IDA Report 
(Analysis of Differences in VA Disability Compensation) on variances in 
VA's disability compensation recommended, the VA undoubtedly needs to:

      standardize initial/ongoing training for rating 
specialists;
      increase oversight of rating decisions;
      develop and implement metrics to monitor consistency in 
adjudication results; and
      increase oversight and review of rating decisions and 
improve and expand data collection and retention.

    And, as pointed out by the IDA Report, the current STAR program is 
insufficient to promote consistency in ratings across regional offices, 
as very little action is taken on any trends found at regional offices. 
Among other things, I want to hear what the VBA intends to do to 
improve this program as well as an update on its Expedited Claims 
Adjudication Initiative efforts.
    The increased workload at both the AMC and the BVA is not lost on 
this Committee.
    The most recent FY 2007 figures indicate that there are more than 
18,300 remands pending at the AMC and about 39,206 appeals awaiting 
adjudication at the BVA. Moreover, the BVA expects to receive up to 
48,000 appeals through the course of 2007. As such, any increase in 
productivity has not been able to keep pace with the increase of claims 
being sent to the BVA.
    I am heartened by the fact that the FY 2008 Budget Resolution 
allowed and the FY 2008 MilCon-VA Appropriations bill will provide 
funding for 1,000 FTEs to help with the growing backlog. This fact 
notwithstanding, I firmly believe that the only way to maximize VBA 
employees' effectiveness in lessening the backlog is to give them the 
necessary tools and training to provide accurate ratings.
    To be clear, it is not my intention simply to point out the 
shortcomings of the BVA or the AMC. I think we should all abide by the 
underlying and stated principles of the entire VA system, which is to 
provide a non-adversarial system for awarding our veterans the benefits 
they have earned. We need to begin to see ourselves, the VA, Congress, 
VSOs, and advocacy organizations alike, as partners in fulfilling this 
mission.
    I also firmly believe that with the expected surge in filings by 
returning OIF/OEF veterans, the VA, as the ``gateway'' for and the 
creator of the record that forms the basis for appellate review, should 
amplify its role in the benefits claims adjudication process to get our 
veterans off the appeals ``hamster wheel''.
    I hope to hear testimony that will yield recommendations that are 
consistent with producing the best outcomes for our veterans appealing 
RO decisions.

                                 
  Prepared Statement of Hon. Doug Lamborn, Ranking Republican Member,
       Subcommittee on Disability Assistance and Memorial Affairs
    Thank you, Mr. Chairman, for recognizing me. I thank you for 
holding this hearing on the Board of Veterans' Appeals and its role in 
the efficient processing of disability compensation claims.
    I welcome our witnesses, especially Chairman Terry, and thank you 
all for your contributions to the veterans' affairs system.
    As everyone is aware the VA's compensation and pension backlog has 
reached an epic and disgraceful level. While I understand that there 
are numerous challenges facing the Board and the appeals management 
center, both play a significant role in veterans waiting many months if 
not years for an accurate rating.
    I agree with Mr. Smithson of the American Legion that we can't just 
look at the Board in a vacuum. Poor quality work at the regional office 
level results in much larger problems later in the appeals process.
    We must ensure that rating boards strive to achieve thoroughness 
and accuracy along with efficiency in their work. Doing so is a key 
step toward eventual elimination of the backlog.
    I do want to commend Chairman Terry for the excellent work the 
Board is doing. They are deciding a record number of appeals this 
Fiscal Year. While your output has increased the number of claims 
waiting to be reviewed is still too high.
    While I agree that Congress needs to adequately staff the Board and 
the appeals management center, I don't believe that hiring more people 
is the only solution. I also acknowledge that there is no silver bullet 
that will make a significant and immediate impact on the backlog. 
However, I do believe that the system needs to be fundamentally 
changed. That is why I am anxiously awaiting the findings of the 
disability commission that reports next month.
    While fundamental change is needed, I believe that we can take 
immediate, vital action by passing H.R. 3047, the Veterans Claims 
Processing Innovation Act of 2007.
    H.R. 3047 will bring VA's compensation and pension system into the 
21st century. By increasing accountability and leveraging technology at 
the Veterans Benefits Administration, this bill would improve the 
accuracy and speed of benefits claims; and I commend it to the 
attention of my colleagues.
    Several of the provisions of H.R. 3047 are recommendations from our 
witnesses today and I thank them for their support.
    I thank you Mr. Chairman for promising to hold a legislative 
hearing on H.R. 3047 next month and I hope that you will soon join 24 
of our colleagues in cosponsoring this bipartisan bill.
    I want to thank the witnesses for their testimony and I yield back.

                                 
  Prepared Statement of Barton F. Stichman, Joint Executive Director,
                National Veterans Legal Services Program
    Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to present the views of the National 
Veterans Legal Services Program (NVLSP) on the adjudication process of 
the Board of Veterans' Appeals and the Appeals Management Center.
    NVLSP is a nonprofit veterans service organization founded in 1980. 
Since its founding, NVLSP has represented over 1,000 claimants before 
the Board of Veterans' Appeals and the Court of Appeals for Veterans 
Claims (CAVC). NVLSP is one of the four veterans service organizations 
that comprise the Veterans Consortium Pro Bono Program, which recruits 
and trains volunteer lawyers to represent veterans who have appealed a 
Board of Veterans' Appeals decision to the CAVC without a 
representative. In addition to its activities with the Pro Bono 
Program, NVLSP has trained thousands of veterans service officers and 
lawyers in veterans benefits law, and has written educational 
publications that thousands of veterans advocates regularly use as 
practice tools to assist them in their representation of VA claimants.

     I. The Adjudication Process of the Board of Veterans' Appeals

    The fact that stands out most prominently when it comes to 
assessing the performance of the Board of Veterans' Appeals is the 
track record that Board decisions have experienced when an independent 
authority has examined the soundness of these decisions. Congress 
created an independent authority that regularly performs this 
function--the U.S. Court of Appeals for Veterans Claims. Each year, the 
Court issues a report card on BVA decisionmaking. This annual report 
card comes in the form of between 1,000 and 2,800 separate final 
judgments issued by the Court. Each separate final judgment 
incorporates an individualized judicial assessment of the quality of a 
particular one of the 35,000 to 40,000 decisions that the Board issues 
on an annual basis.
    For more than a decade, the Court's annual report card of the BVA's 
performance has been remarkably consistent. The 12 annual report cards 
issued over the last 12 years yields the following startling fact: of 
the 16,550 Board decisions that the Court individually assessed over 
that period (that is, from FY 1995 to FY 2006), the Court set aside a 
whopping 77.7 percent of them (that is, 12,866 individual Board 
decisions). In each of these 12,866 cases, the Court set aside the 
Board decision and either remanded the claim to the Board for further 
proceedings or ordered the Board to award the benefits it had 
previously denied. In the overwhelming majority of these 12,866 cases, 
the Court took this action because it concluded that the Board decision 
contained one or more specific legal errors that prejudiced the rights 
of the VA claimant to a proper decision.
    By any reasonable measure, the Court's annual report card on the 
Board's performance has consistently been an ``F''. But an equally 
startling fact is that despite a consistent grade of ``F'' for each of 
the last 12 years, no effective action has ever been taken by the 
management of the BVA to improve the Board's poor performance. Year 
after year, the Court's report card on the Board has reflected the same 
failing grade. If the Board had been subject to the ``No Child Left 
Behind'' rules that govern our Nation's public schools, it would have 
been shut down long ago.
    To formulate an effective plan to reform the Board and 
significantly improve its performance requires an understanding of the 
underlying reasons that the Board has consistently failed in its 
primary mission (i.e., to issue decisions on claims for benefits that 
comply with the law). Over the last 15 years, NVLSP has reviewed over 
10,000 individual Board decisions and thousands of Court assessments of 
these decisions. Based on this review, NVLSP has reached three major 
conclusions, which are set forth below.
The Board Keeps Making the Same Types of Errors Over and Over Again
    The decisions of the Board and the final judgments of the Court 
reflect that the Board keeps making the same types of errors over time. 
For example, one common error involves the type of explanation the 
Board is required to provide in its written decisions. When Congress 
enacted the Veterans' Judicial Review Act 1988, it expanded the type of 
detail that must be included in a Board decision to enable veterans and 
the Court of Appeals for Veterans Claims to understand the basis for 
the Board's decision and to facilitate judicial review. See 38 USC 
Sec. 7104(d).
    The Board has consistently been called to task by the Court for 
faulty explanations that violate 38 USC Sec. 7104(d). These violations 
fall into several common patterns. One pattern is that the Board often 
does not assess or explain why it did not credit positive medical 
evidence submitted by the claimant from a private physician, while at 
the same time expressly relying on a negative opinion provided by a VA-
employed physician. The problem here is not that the Board decided to 
believe the VA physician and disbelieve the private physician. The 
problem is that the Board never explained its analysis (if indeed, it 
had one) of the private physician's opinion in the first place.
    Another common pattern involves lay testimony submitted by the 
claimant and other witnesses. Despite the statutory and regulatory 
obligation (38 USC Sec. 5107(b) and 38 C.F.R. Sec. 3.102) to give the 
veteran the benefit of the doubt in adjudicating a claim for benefits, 
in many of the Board decisions that have been set aside by the Court, 
the Veterans Law Judge has refused in his or her written decision to 
assess, no less credit, this lay testimony. The decisions of the 
Federal Circuit and the Court of Appeals for Veterans Claims in 
Buchanan v. Nicholson, 451 F.3d 1331, 1336-37 (Fed. Cir. 2006), and 
Kowalski v. Nicholson 19 Vet. App. 171, 178 (2005) chronicle this 
refusal to analyze the validity of lay testimony.
    Sometimes the lay testimony that the Board refuses to analyze 
involves what happened during the period of military service. The 
underlying philosophy in these Board's decisions appears to be: ``If 
the event is not specifically reflected in the existing service medical 
or personnel records, we don't need to assess the lay testimony''--no 
matter what lay testimony has been submitted.
    Sometimes this lay testimony involves the symptoms of disability 
that the veteran experienced following military service. Despite the 
legal obligation to consider lay evidence attesting to the fact that 
veteran continuously experienced symptoms of disability from the date 
of discharge to the present, the Board often denies the claim on the 
unlawful ground that the evidence in the record does not show that the 
veteran was continuously provided medical treatment for the disability, 
without assessing the lay evidence of continuity of symptomatology.
    Another common Board error is to prematurely deny the claim without 
ensuring that the record includes the evidence that the agency was 
required to obtain to fulfill its obligation to assist the claimant in 
developing the evidence necessary to substantiate the claim. The 
statutory duty placed by Congress on the VA to provide such assistance 
is a fundamental cornerstone of the nonadversarial pro-claimant 
adjudicatory process. Unfortunately, the Board often fails to honor 
this very important obligation.

 Board Management Does Not Downgrade the Performance of a Veterans Law 
                 Judge for Making These Types of Errors

    One method of eliminating repetitive types of Board errors would be 
if Board management downgraded the performance of Veterans Law Judges 
for repeatedly violating deeply embedded legal principles. This has not 
been done.
    The problem is not that Board management fails to assess the 
performance of the Board's Veterans Law Judges. Board management does 
conduct such assessments. The problem lies in Board management's 
definition of poor performance. As the chairman of the board stated in 
his FY 2006 Report, Board management assesses the accuracy of Board 
decisionmaking and its assessment is that Board decisions are 93 
percent accurate.
    There obviously is a major disconnect between the annual report 
card prepared by the Court of Appeals for Veterans Claims and the 
annual report card prepared by Board management. \1\ How can it be that 
year in and year out the Court consistently concludes that well over 50 
percent of the Board decisions contain one or more specific legal 
errors that prejudiced the rights of the VA claimant to a proper 
decision, while at the same time Board management concludes that only 7 
percent of Board decision-making is inaccurate?
---------------------------------------------------------------------------
    \1\ Because the only BVA decisions that the Court assesses are 
those appealed to the Court by a VA claimant, the decisions the Court 
reviews are self-selected by VA claimants. They do not represent a true 
random sample of BVA decisionmaking. Thus, it does not necessarily 
follow that the Board's overall error rate is 77.7 percent.
    On the other hand, the Court's report cards undoubtedly indicate 
that the Board's overall error rate is quite high. In NVLSP's 
experience, many of the BVA decisions that are not appealed to the 
Court contain the same types of errors as those contained in the 
decisions that are appealed to the Court. Some veterans do not appeal 
these flawed decisions because after years of pursuing their claim, 
they simply give up.
---------------------------------------------------------------------------
    NVLSP understands that there is a simple answer to this question. 
Board management simply does not count as ``inaccurate'' many of the 
types of prejudicial legal errors that have forced the Court to set 
aside the Board decision and place the veteran on the well-known 
``hamster wheel'' of remands and further administrative proceedings. In 
this way, Board management actually promotes, rather than discourages, 
these errors of law.

     Board Management's Campaign to Avoid ``Unnecessary Remands'' 
              Contributes to the Board's Poor Performance

    Another policy adopted by Board management that contributes to the 
Board's poor performance is its campaign to avoid ``unnecessary 
remands'' from the Board to the regional offices to correct prejudicial 
errors made by the regional office in developing the evidentiary 
record. If this campaign truly influenced the Board to avoid 
``unnecessary'' remands, NVLSP would applaud the effort because it 
would help eliminate the ``hamster wheel'' phenomenon that plagues the 
VA adjudication process. But the problem is that this campaign has 
promoted Board decisions that prematurely deny the claim without a 
necessary remand to the regional office to obtain the evidence that the 
law required, but the RO failed to obtain, before the case ever reached 
the BVA. This unlawful failure to remand actually contributes to the 
``hamster wheel'' phenomenon by forcing the claimant to appeal to the 
Court, which, after a year or two, sets the Board decision aside with 
instructions for the Board to do what it should have d1 years earlier--
send the case back to the RO to obtain additional evidence.

                        NVLSP's Recommendations

    Recommendation 1: Adopt the Long-Standing Process Used and the 
Protections Afforded to Administrative Judges Who Adjudicate Disputes 
in Other Federal Agencies. NVLSP believes that one of the major steps 
that Congress should take to reform the Board and significantly improve 
its performance is to change the methodology used to select the 
individuals who adjudicate appeals at the Board of Veterans' Appeals. 
These individuals, called Veterans Law Judges (VLJs), are usually long-
time VA employees who are promoted to this office from within the 
agency. By the time they become a VLJ, they often have adopted the 
conventional adjudicatory philosophy that has long held sway at the 
VA--an adjudicatory philosophy that underlies the failing grade 
assigned by the Court. Moreover, Veterans Law Judges do not enjoy true 
judicial independence.
    In the Federal administrative judicial system outside the BVA, most 
judges are administrative law judge (ALJs). An ALJ, like a VLJ, 
presides at an administrative trial-type proceeding to resolve a 
dispute between a Federal Government agency and someone affected by a 
decision of that agency. ALJs preside in multi-party adjudication as is 
the case with the Federal Energy Regulatory Commission or simplified 
and less formal procedures as is the case with the Social Security 
Administration.
    The major difference between Federal ALJs and the VLJs that serve 
on the Board of Veterans' Appeals is that ALJs are appointed under the 
Administrative Procedure Act 1946 (APA). Their appointments are merit-
based on scores achieved in a comprehensive testing procedure, 
including an 4-hour written examination and an oral examination before 
a panel that includes an OPM representative, American Bar Association 
representative, and a sitting Federal ALJ. Federal ALJs are the only 
merit-based judicial corps in the United States.
    ALJs retain decisional independence. They are exempt from 
performance ratings, evaluation, and bonuses. Agency officials may not 
interfere with their decisionmaking and administrative law judges may 
be discharged only for good cause based upon a complaint filed by the 
agency with the Merit Systems Protections Board established and 
determined after an APA hearing on the record before an MSPB ALJ. See 
Butz v. Economou, 438 U.S. 478, 514 (1978).
    There are many attorneys who have never been employed by the VA who 
are familiar with veterans benefits law and who are eminently qualified 
to serve as an administrative judge at the Board of Veterans' Appeals. 
Moreover, while use of the ALJ process may not always result in the 
selection of an individual with a great deal of experience in veterans 
benefits law, it should not take a great deal of time for someone 
without such experience to become proficient. The experience of the 
many judges who have been appointed to the Court of Appeals for 
Veterans Claims without prior experience in veterans benefits law 
attests to this proposition. NVLSP believes the likelihood of improved 
long-term performance of a judge selected through the ALJ process 
greatly exceeds whatever loss in short-term productivity may result if 
someone who is not steeped in veterans benefits law happens to be 
selected.

    Recommendation 2: The Criteria Used in, and the Results of the 
Evaluation System of VLJs Employed by Board Management Should Be 
Publicly Available and Reported to Congress. This recommendation may 
not be necessary if Congress adopts the first recommendation. But if 
Congress does not embrace the ALJ system for the BVA, it should at 
least require Board management to make publicly available the details 
of the system it employs for evaluating and rewarding the performance 
of VLJs and the results of the evaluation as applied to individual 
VLJs. When the evaluation system employed by Board management results 
in the conclusion that 93 percent of all Board decisions are accurate, 
it is plain that the evaluation system suffers from serious defects. 
Oversight of this system requires that it be made publicly available 
and reported to Congress.

     II. The Adjudication Process of the Appeals Management Center

    Turning to the adjudication process of the Appeals Management 
Center, the most prominent problem faced by the AMC is lack of adequate 
resources. The backlog of remands from the Board of Veterans' Appeals 
languishing at the AMC is simply unacceptable. The Achilles Heal of the 
entire system is the lack of quality in the initial decisionmaking 
process at the VA regional offices. But if one were forced to ignore 
the needed reformation of this initial decisionmaking process, then 
providing adequate financial resources to the AMC should be a high 
legislative priority.

                                 
          Prepared Statement of Richard Paul Cohen, President,
           National Organization of Veterans Advocates, Inc.
    Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to present the views of the National 
Organization of Veterans Advocates, Inc. (``NOVA'') on the adjudication 
process at the Department of Veterans Affairs' (``VA'') Board of 
Veterans' Appeals (``BVA'') and the Appeals Management Center 
(``AMC'').
    NOVA is a not-for-profit Sec. 501(c)(6) educational organization 
incorporated in 1993 and dedicated to train and assist attorneys and 
non-attorney practitioners who represent veterans, surviving spouses, 
and dependents before the United States Court of Appeals for Veterans 
Claims (``CAVC'' or ``Veterans Court'') and on remand before the VA. 
NOVA has written many amicus briefs on behalf of claimants before the 
CAVC and the United States Court of Appeals for the Federal Circuit 
(``Federal Circuit''). The CAVC recognized NOVA's work on behalf of 
veterans when it awarded the Hart T. Mankin Distinguished Service Award 
to NOVA in 2000. The positions stated herein have been approved by 
NOVA's Board of Directors and represent the shared experiences of 
NOVA's members as well as my own fifteen-year experience representing 
claimants at all stages of the veterans benefits system from the VA 
regional offices to the Board of Veterans' Appeals to the CAVC as well 
as before the Federal Circuit.
    NOVA's members have little contact with the AMC because veterans' 
claims that have attorney representation are instructed to be remanded 
directly to the Agency of Original Jurisdiction, which usually is a VA 
Regional Office, for further development. However, when an attorney-
represented claim does inadvertently arrive at the AMC, NOVA members 
experience considerable hurdles in speaking with AMC personnel 
regarding a claim's whereabouts and or status, as well as tremendous 
delays in having the claim transferred out of the AMC. As with other 
agency-level backlog, providing the AMC with additional staff and 
resources would assist greatly in resolving these issues.
    With respect to the current operation of the BVA, NOVA submits the 
following observations and recommendations for the Subcommittee's 
consideration and further action:

                           OBSERVATION NO. 1:

The Number of Claims on Appeal Challenges BVA's Resources
    As of September 1, 2001, the VA reported a backlog of 533,029 
veterans' claims for VA benefits and or compensation. See Report of the 
Secretary of Veterans Affairs, VA Claims Processing Task Force, October 
2001.
    For every 100,000 claims submitted for VA benefits and or 
compensation, 4,600 claimants will file appeals to the BVA. Department 
of Veterans Affairs, ``Strategic Plan for Employees'', July 2007, p. 
14. In addition, more than 10,000 U.S. military servicemembers are 
already known to have sustained physical and psychological injuries 
since the onset of U.S. operations in Afghanistan and Iraq. Testimony 
Before the Committee on Veterans' Affairs, U.S. Senate, GAO-05-444T, p. 
1. As a result of the on-going wars in Iraq and Afghanistan, the VA can 
expect a flood of BVA appeals in the next few years. See ``Strategic 
Plan for Employees'', July 2007, p. 3.

                           OBSERVATION NO. 2:

The Processing Time for BVA Appeals Is Too Slow and Too Often Results 
        In Erroneous Denials and, or Unnecessary Remands
    It takes, on average, over 2 years for a veteran to get a decision 
from the BVA on an appeal of a denied claim. This 2-year waiting period 
is in addition to the 230 days, on average, that it takes a VA Regional 
Office to process and complete development of the initial claim. See 
Reports of the chairman of the board of Veterans Appeals, Fiscal Year 
2006, p. 16. (www.va.gov/Vetapp/ChairRpt/BVA2006AR.pdf).
    Moreover, after waiting over 2 years for a decision, some one-third 
of the BVA's decisions from the past few years consist merely of a 
remand, providing the veteran with yet more delays, on what has been 
characterized as a ride on the ``hamster wheel''. See Stallworth v. 
Nicholson, 20 Vet. App. 482, 491 (2006) (Lance J., dissenting); Coburn 
v. Nicholson, 19 Vet. App. 427, 434 (2006) (Lance, J., dissenting). 
However, the most unfortunate statistic is that over the past 6 years, 
the most common decision veterans have received from the BVA after 
waiting over 2 years is a denial of the claim.


----------------------------------------------------------------------------------------------------------------
                                 Days from                                                           Fiscal Yr
         Fiscal year             appeal to     Total number of   Decision on the      Denials     Comm'er Report
                                 decision         decisions        merits \1\                           \2\
----------------------------------------------------------------------------------------------------------------
2006                                    741            39,076            25,644             71%           16,19
----------------------------------------------------------------------------------------------------------------
2005                                    750            34,175            20,985             62%           12,17
----------------------------------------------------------------------------------------------------------------
2004                                    724            38,371            16,574             58%            8,12
----------------------------------------------------------------------------------------------------------------
2003                                    890            31,397            17,160             59%           10,13
----------------------------------------------------------------------------------------------------------------
2002                                    905            17,231            13,373             64%           11,14
----------------------------------------------------------------------------------------------------------------
2001                                    648            31,557            15,537             54%           35,44
----------------------------------------------------------------------------------------------------------------
2000                                    829            34,028            23,041             61%           33,42
----------------------------------------------------------------------------------------------------------------
\1\ Subtracting the remand decisions and other decisions from total decisions leaves only those decisions
  resulting in an allowance or denial of benefits, i.e., decisions based on the merits of the claim.
\2\ The numbers in this column refer to pages in the respective Fiscal Year Reports of the chairman of the board
  of Veterans Appeals found at www.va.gov/vbs/bva/annual_rpt.htm.

                           OBSERVATION NO. 3:

BVA Denials Are Rarely Affirmed By The Veterans Court
    The statistics provided above demonstrate the growing trend of the 
BVA denying veterans' claims. Yet, according to the Veterans Court, 
these BVA denials are rarely warranted. This fact is laid bare in 
annual reports from the CAVC which show that, in recent years, only an 
average of 20 percent of BVA's denials have been affirmed by the Court: 
\3\
---------------------------------------------------------------------------
    \3\ See www.vetapp.uscourts.gov/documents/Annual_Reports.pdf.


----------------------------------------------------------------------------------------------------------------
                                                                             CAVC non-writ
           Fiscal year                BVA denials        CAVC appeals      merits decisions      BVA affirmed
----------------------------------------------------------------------------------------------------------------
2006                                         18,107               3,729               2,079                 21%
----------------------------------------------------------------------------------------------------------------
2005                                         13,032               3,466               1,209                 22%
----------------------------------------------------------------------------------------------------------------
2004                                          9,300               2,234               1,278                 12%
----------------------------------------------------------------------------------------------------------------
2003                                         10,228               2,532               2,090                  6%
----------------------------------------------------------------------------------------------------------------
2002                                          8,606               2,150                 818                 13%
----------------------------------------------------------------------------------------------------------------
2001                                          8,514               2,296               2,778                  1%
----------------------------------------------------------------------------------------------------------------
2000                                         14,080               2,442               1,556                 33%
----------------------------------------------------------------------------------------------------------------

                           OBSERVATION NO. 4:

The Structure and Organization of The BVA Has Been In Flux
    Over the years, the structure and organization of the BVA has 
changed. When it was first created in July 1933, the BVA began as a 
centralized office in Washington, DC, and consisted of a Chairman, a 
Vice Chairman, and no more than 15 associate members, who were 
delegated the authority to render the final decision on appeal for the 
Administrator of the Veterans Administration. (Report of the Chairman, 
Board of Veterans' Appeals, for Fiscal Year 1995, p. 1, 8). But, by the 
sixties, the Board grew to 14 sections of three members each, and by 
1984, expanded to 19 three-member sections. All of this expansion was a 
result of increased appellate processing time at the BVA (Chairman's 
Report, Board of Veterans' Appeals, for Fiscal Year 1995, p. 2).
    On November 18, 1988, the Veterans' Judicial Review Act (VJRA), 
Pub. L. No. 100-687, established the United States Court of Veterans 
Appeals (now officially re-named the United States Court of Appeals for 
Veterans Claims), thereby providing an Article I court of review, 
separate and distinct from the VA, available to veterans whose claims 
are denied by the BVA. The VJRA also created increased demand for a 
``travel board'' hearing. Beginning in 1992, and relying on statutory 
authority contained in 38 USC Sec. 7102(b), the BVA began holding 
hearings both in Washington, DC, and in regional offices utilizing a 
single board member but still continued to make decisions by a section 
consisting of three board members. (Chairman's Annual Report, Board of 
Veterans' Appeals, Fiscal Year 1991, p. 3).
    Then, in July 1994, following the passage of the BVA's 
Administrative Procedures Improvement Act of 1994, individual board 
members, acting alone, began to issue decisions (Pub. L. No. 103-271, 
Sec. 6, 108 Stat. 740, 741; Report of the Chairman, Board of Veterans' 
Appeals, for Fiscal Year 1995, p. 6, 7). Later, in late-1995, the BVA 
was restructured--again--into four decision teams comprised of board 
members and staff counsel to review and decide appeals, operating as 
semi-autonomous entities with latitude regarding internal operating 
procedures, having a workload structured along geographical lines with 
responsibility for deciding appeals originating from specific VA 
regional offices (Report of the chairman, Board of Veterans' Appeals, 
for Fiscal Year 1995, p. 9). As of 2006, the four Decision Teams 
consisted of 56 Veterans Law Judges and 240 staff counsel (Report of 
the chairman, Board of Veterans' Appeals, for Fiscal Year 2006, p. 2).

                           OBSERVATION NO. 5:

BVA ``Judges'' Are Not Independent and Their High Number of Unjustified 
        Remands and Erroneous Denials Are In Part The Result of Demands 
        For Increased Productivity
    As was previously shown, the BVA judges overwhelmingly deny claims 
and those denials are affirmed only 20 percent of the time. See 
Observations 3 and 4, supra. Nevertheless, the BVA claims a 93 percent 
accuracy rate regarding the decisions it issues. See Report of the 
Chairman of the Board of Veterans' Appeals, Fiscal Year 2006, p. 3. 
www.va.gov/Vetapp/ChairRpt/BVA2006AR.pdf. Moreover, although the 56 
Veterans Law Judges issued 39,076 decisions in 2006, the BVA Chairman 
is on record as stating that the ability to conduct hearings and decide 
appeals on a timely basis ``will present a challenge'' Report of the 
chairman of the Board of Veterans' Appeals, Fiscal Year 2006, p. 16. 
www.va.gov/Vetapp/ChairRpt/BVA2006AR.pdf).
    Whether BVA judges are ``recertified'' or are ``noncertified'' and 
have their appointment terminated is dependent upon evaluation 
performed by the Chairman and an inhouse panel which considers among 
other things legal analysis, timeliness of decisions and productivity 
(38 USC Sec. 7101A(c)(1)(A), (2)-(3)). Furthermore, it is not the 
accuracy or substantive correctness of the BVA judge's decision that is 
evaluated; rather, it is the ``productivity'', i.e., the raw number of 
decisions issued by each BVA judge that is scrutinized.

 THE BVA SHOULD BE GIVEN MORE STAFF AND FUNDING, SHOULD STREAMLINE THE 
    MAINTENANCE OF RECORDS, AND SHOULD BE HELD MORE ACCOUNTABLE FOR 
                   ERRONEOUS, QUOTA-DRIVEN DECISIONS

                         RECOMMENDATION NO. 1:

Hire More BVA Judges
    NOVA's first and foremost recommendation is for Congress to provide 
sufficient funds for the BVA to hire more judges. Increasing the number 
of judges is paramount to alleviating the backlog of appeals awaiting 
adjudication at the BVA. There simply is no other solution. BVA 
attorneys currently are expected to submit roughly 150 cases per year, 
and VLJ's, who have five attorneys writing for them, are expected to 
sign about 750 cases per year. That allows for only 2-3 hours per case 
as it is. We do not think it is reasonable to assume any large 
productivity gains can come from increased work output of the existing 
BVA attorneys and judges without quality suffering greatly. The only 
answer is to hire more people.

                         RECOMMENDATION NO. 2:

Encourage Open Communication Between BVA Judges and Veterans' Attorneys
    Currently the policy at the Board of Veterans' Appeals is that its 
attorneys and VLJ's will have no contact whatsoever with outside 
counsel aside from hearings. We believe this policy is 
counterproductive. Ironically, the reason most often given for this 
policy is that such communications would be ``ex parte.'' This 
reasoning is hollow given that there is only one party to a case before 
the VA--the veteran. Moreover, by law the proceedings before the 
Department of Veterans Affairs are supposed to be non-adversarial. Yet 
the BVA has concluded it is appropriate to use courtroom language and 
mimic the adversarial process, to the detriment of veterans.
    Communication between BVA legal staff and the attorneys and agents 
who represent veterans is essential. As described in Observation No. 2, 
supra, the BVA oftentimes remands a veteran's appeal because either 
evidence needed to decide the claim is missing or due process 
procedures were not followed theretofore at the VA regional office. 
Open communication would allow agents and attorneys to waive bases for 
remand instead of having a case remanded for a procedural issue, which 
can easily take a year at the regional office. It would also allow for 
an explanation by the BVA as to what evidence is missing from a file 
and what evidence would allow for a grant.
    It is therefore NOVA's recommendation that the VA establish a 
policy of open communication between BVA judges and veterans' agents 
and attorneys.

                         RECOMMENDATION NO. 3:

Give BVA Staffing and Resources To Complete The Technological Updating 
        of All Veterans' Claims File Folders
    The VA has already started the arduous process of transferring its 
paper-driven system to a paperless system. We commend them on their 
efforts. Completing this process as soon as possible will assist in the 
backlog present in the VA system-wide. We therefore respectfully 
suggest that Congress provide the VA and the BVA with the additional 
funds and staff necessary for this process to be expedited.
    With respect to this process, NOVA recommends that contemporaneous 
to scanning a veteran's claims file folder, the documents therein 
should also be indexed and paginated. At the present time, to locate 
and review documents relevant to the merits of an appeal, the BVA judge 
must sift through the entire claims file folder, which currently 
consists of all documents related to all claims filed at any time for 
compensation, educational benefits, or for medical care. These records 
are all bound together in one file, typically in reverse chronological 
order, but are in no way paginated or indexed. By indexing and 
paginating the documents in a veteran's claims file folder, the entire 
appeals process at the BVA would be more efficient for the judges, the 
veterans, and the veterans' attorneys.

                         RECOMMENDATION NO. 4:

Have the BVA Change Its Internal Performance Measures So That Remands 
        Do Not Count The Same As Decisions Made On The Merits
    BVA's internal performance review system should be changed. As 
noted in Observation No. 5, supra, a BVA judge's performance is 
evaluated in large part based on the number of cases decided per year. 
Currently, BVA attorneys need to issue 156 decisions per year--or 
approximately 3\1/2\ per week when vacations and travel boards are 
factored in--in order to pass the evaluation process. This number is 
hard to reach, especially when faced with appeals involving multiple 
and, or complex issues, and voluminous claim file folders.
    Presently, internal accounting regarding a BVA attorney's 
production assigns the same point value for remands and decisions (1 
point) and assigns a point and a half for cases that encompass both a 
decision and a remand. Remands are much less time-consuming and are 
easier to write. In this way, BVA's internal performance review system 
is skewed such that remands are encouraged over merit-based decisions.
    It is NOVA's recommendation that if the BVA changed it system so 
that remands would be assigned a lesser point value than a decision on 
the merits, far fewer superfluous remands would be issued. This 
solution would not affect those cases that require a legitimate remand. 
But, for the marginal cases that could be decided either way, such a 
change would result in more decisions instead of remands, which would 
reduce the VA's system-wide backlog as well as curtail the number of 
trips on the proverbial ``hamster-wheel'' for the veteran.
    While NOVA respects the integrity of the attorneys and VLJ's who 
work at the Board of Veterans' Appeals, it is simply a fact of human 
nature that if an organization sets up an incentive structure which 
rewards certain behavior, that behavior will increase. This is 
especially true in a stressful situation like that at the Board of 
Veterans' Appeals where employee production is tracked on a weekly 
basis and where bonuses, promotions, and even the ability to take 
vacation time all hinge on meeting their demanding production quota.

                                 
    Prepared Statement of Carl Blake, National Legislative Director,
                     Paralyzed Veterans of America
    Mr. Chairman and Members of the Subcommittee, on behalf of 
Paralyzed Veterans of America (PVA), I would like to thank you for the 
opportunity to testify today on the Board of Veterans' Appeals (BVA or 
Board) process and the Appeals Management Center (AMC). The activities 
that occur at this level of the claims process have a significant 
impact on the lives of thousands of veterans each year. I will frame my 
statement in terms of the role that PVA plays in the appeals process, 
our perceptions of that process, and the challenges that face both the 
Department of Veterans Affairs (VA) and PVA. I will also make some 
recommendations that we believe could improve this process.
    As you know, PVA is the only congressionally chartered veterans 
service organization that represents veterans with spinal cord injury 
or dysfunction. PVA appeals representatives play an important role in 
the appeals process at the BVA and the AMC. Our representatives prefer 
to resolve claims without the need for an appeal, by educating 
paralyzed veterans on the benefits provided by law, to obtain those 
benefits for those veterans, to avoid frivolous claims and appeals, and 
to aid the VA in identifying issues and assembling evidence. Our goal 
is to resolve differences with VA at the lowest possible level through 
cooperation with VA's decisionmakers. We aid the VA by identifying 
statutory and regulatory authorities that permit VA to grant a claim, 
and assist VA in obtaining the evidence the adjudicators need or choose 
to seek.
    PVA maintains a data base and diary system to ensure that the 
claimant and VA perform their responsibilities in the appeals process, 
to include the Notice of Disagreement (NOD), Statement of the Case 
(SOC), and Substantive Appeal (VA Form 9), in a timely manner. When 
deemed appropriate, we encourage appellants to utilize the Decision 
Review Officer (DRO) and to utilize the opportunity to appear at a 
personal hearing in order to resolve appeals as early as possible. PVA 
helps appellants prepare for hearings and appears with appellants at 
hearings.
    When efforts to resolve disputes are unsuccessful at the VA 
regional office (RO), we prepare and submit appeals to the Board of 
Veterans' Appeals (BVA) with representation by our experienced staff at 
our national Appeals Office collocated with the BVA. PVA perennially 
maintains an enviable record of favorable resolutions by BVA with 
minimal denials, we believe as a result of comprehensive review and 
careful preparation for BVA consideration. In fact, in a recent BVA 
decision, the Board stated, ``Here, the veteran is represented by a 
highly respected national Veterans Service Organization which is well 
versed in veterans' law.'' Approximately 40 percent of appeals 
represented by PVA are remanded. When appeals are remanded to the 
Appeals Management Center, we continue representation through our 
network of National Service Officers who maintain local contact with 
the appellant and assist with the submission of further evidence or 
other responses.
    As Congress attempts to address concerns related to the claims 
backlog, specifically as it relates to what occurs in the appeals 
process, it is important to understand factors contributing to the 
current situation at the BVA. The BVA anticipates that by the end of FY 
2007, the Board will enter approximately 45,000 decisions. Currently, 
the average docket date for decisions entered by the Board is June 
2005. Meanwhile, approximately one third of appeals are currently 
remanded. According to the VA's own studies, a significant number of 
BVA remands were required because the Agency of Original Jurisdiction--
usually the Regional Office--failed to fully and/or properly develop or 
decide the claim in accordance with existing instructions and 
directives of the Department. This factor alone should be examined and 
addressed sooner rather than later as we believe that no meaningful 
reduction in the claims backlog can be achieved without paying 
attention to this problem.
    We believe that changes introduced into the claims process by 
enactment of the Veterans Claims Assistance Act (VCAA) and a series of 
precedent interpretations of the Act entered by the U.S. Court of 
Appeals for Veterans Claims and the U.S. Court of Appeals for the 
Federal Circuit resulted in unanticipated numbers of appeals remanded 
by BVA for compliance with the new law and new interpretations, peaking 
at a remand rate of more than 50 percent.
    The VA realized then that Regional Offices were doing a poor job on 
remands, so the BVA began doing its own claims development without 
regulations permitting it. The VA then changed the regulations to allow 
this practice. The regulations were subsequently found not valid in 
Disabled American Veterans v. Secretary of Veterans Affairs, 327 F.3d 
1339 (Fed. Cir. 2003). The Court held that the BVA cannot use evidence 
it develops unless the veteran waives the right to have the evidence 
reviewed by the RO in the first instance. In response to this decision, 
the VA created the AMC to handle the remands in Washington, DC, where 
they could do the same evidence development but not compete with new 
claims, and hopefully resolve these claims faster and better. The AMC 
was then staffed and resourced to handle the historical average number 
of BVA remands--about 12,000 per year.
    As a result of the unanticipated increase in the number of 
remands--well in excess of the 12,000 per year estimate--the AMC was 
quickly overwhelmed. It then formed three satellite offices located in 
St. Petersburg, Florida; Cleveland, Ohio; and Huntington, West 
Virginia, to attempt to handle the volume of cases. The AMC inventory 
is now at the level originally planned. The VA's data indicates that 
AMC review on average is completed in less time than at ROs and results 
in higher allowance rates. PVA's experience at the AMC was initially 
favorable. We experienced approximately a 30 percent allowance rate on 
remand at AMC in the early years. Upon request, we were also able to 
solicit the cooperation of AMC employees and resolve especially complex 
cases or cases for people with terminal illness or financial hardship.
    In addition to and apart from the aforementioned problems 
identified at the Agency of Original Jurisdiction, significant customer 
service challenges for the VA are presented and always will be 
presented in the appeals process. Foremost in the minds of appellants, 
PVA and the VA is the goal of having appeals resolved in a timely and 
accurate manner. The Veterans Benefits Administration (VBA) and BVA 
have been stressing to their employees the need to quickly adjudicate 
the claims and appeals in order to reduce the backlog. However, as 
shown by BVA's ``average docket,'' appeals remain pending before the 
BVA for an average of 2 years. All agree with VA's stated goal of 
improving the timeliness of this process. Unfortunately, timeliness 
competes with accuracy and quantity competes with quality. Confirmation 
that efforts to process appeals faster is winning over efforts to 
produce quality decisions is the consistently high error rate found in 
BVA decisions on appeal to the U.S. Court of Appeals for Veterans 
Claims.
    In fairness to the VA, judicial review does require the VA to 
conform to new precedential decisions. Appellants at the Court will, as 
they must, seek the most favorable interpretation of laws and 
regulations presented in their appeals. Such advocacy is obviously 
consistent with the statutory scheme controlling the adjudication of 
veterans benefit claims.
    Merely creating templates to comply with mandates established in 
Title 38 USC is not enough and results in necessary remands because the 
claimants do not receive the information they need and adjudicators 
have a tendency to focus less on the facts and law involved in 
individual claims. With VA's data indicating that nearly a third of 
remands are required because of the inaccuracies in the initial 
determination, and with the recent revelations of the disparities 
between the results of adjudications depending on the location of the 
RO, the veteran community is reasonably skeptical of an RO decision. 
When a veteran receives a letter that contains an inaccurate statement, 
whether or not the inaccuracy would have an impact on the decision, the 
veteran loses confidence in the ability of the RO to fairly and 
accurately decide his or her claim. This lack of confidence has had the 
natural effect of increasing the number of appeals filed. Veterans hope 
that Washington staff will provide a more accurate decision.
    With the emphasis placed on the timeliness of the adjudications in 
support of the goal of reducing the backlog of claims, there exists an 
environment at VA that favors speed and numbers of decisions over 
accuracy. We continue to receive candid reports from VA employees 
expressing their desire to perform more careful reviews, who feel 
compelled to maintain their production goals for the quantity of work. 
The degree of accuracy and consistency impacts the number of appeals. 
With the systems used by VA to credit employees for work performed, 
there exists an immediate benefit to the employee to maintain a high 
quantity of work. Maintaining the quality of work is achieved primarily 
through sampling by the Compensation and Pension Service, which does 
not share the same impact on the rating process or the employees. 
Simply put, there is no substitute for doing the work correctly the 
first time.
    PVA also has concerns about the piecemeal process of appeals 
decisions. With the creation of the AMC, it is not uncommon for a 
veteran to have issues simultaneously pending before a Regional Office, 
the AMC, the BVA and possibly in the Court. Since VA remains wedded to 
a paper claim file for most issues, this requires VA to frequently ship 
files around the country as different offices compete over a single 
record to adjudicate the issues pending within their own jurisdiction. 
Maintaining control of the claim files is challenging and shipping 
costs are expensive.
    An appeal often presents multiple issues, such as service 
connection for multiple disabilities, the evaluation of disabilities 
and perhaps an appeal for a resulting inability to maintain employment. 
A single BVA decision will often contain a grant of an issue, denial of 
an issue and a remand of an issue. In this circumstance, the file will 
be transferred to the AMC where the grant of a benefit by the BVA will 
be implemented by a rating decision and then the AMC will proceed to 
comply with the BVA remand instructions. The decision to have the AMC 
act first by implementing the benefit granted by BVA has improved the 
timeliness of these awards compared to past procedures. By design, the 
AMC does not accept jurisdiction on new appeals, only those matters 
remanded by the BVA. Therefore, if a veteran disagrees with a rating 
entered by the AMC, a Notice of Disagreement must be filed at the RO 
and the new appeal must wait without action until after the return of 
the file.
    At times, resolution of one issue may affect another. If the BVA 
recognizes this potential, it may choose to simultaneously remand 
multiples issues. As with all decisions of the Board involving 
judgment, the BVA may or may not agree in a given case and may deny one 
issue to the detriment of an appellant and decline jurisdiction on a 
related issue. Our experience at the BVA leads us to conclude that the 
BVA as a body is inconsistent in its response to pleadings that a 
decision on a matter before them should be deferred until after a 
separate issue is resolved. In the effort to reduce the backlog, we 
perceive reluctance on the BVA's part to entertain additional issues 
that would introduce further delay.
    Ultimately, splitting jurisdiction between several offices that 
compete over a single record precludes a comprehensive review and 
introduces additional delay. To best represent how complex and 
complicated this can be, the following chart (developed by PVA appeals 
staff) reflects the situation a single veteran may face as he or she 
navigates the appeals process.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    With all of these considerations in mind, we would like to make a 
few recommendations and attempt to explain their potential impacts. We 
believe that VBA must accelerate the progress toward an electronic 
claims record system. As long as VA continues to use a paper file 
shipped around the country, the claims and appeals process will be done 
in an expensive and antiquated manner. As demonstrated by the Veterans 
Health Administration's outstanding electronic medical record, similar 
gains in access to records can be realized in the claims and appeals 
process, as well as significant cost savings as VBA and the BVA move 
toward a ``Virtual VA.'' We urge Congress to accelerate funding of VA's 
transition to an electronic claims record.
    PVA also believes that centralized training better prepares ratings 
specialists at all levels. Training of rating specialists was 
historically conducted at the local level by the more senior staff. The 
VA now provides centralized training at its Veterans Benefits Academy 
located in Baltimore, Maryland, and via the VA intranet. The 
Compensation and Pension Service also issues Decision Assessment 
Documents (DAD) in response to Court precedent opinions to inform staff 
of these decisions. The VA should be lauded for these actions. 
Furthermore, as we have called for in The Independent Budget, co-
authored by PVA, AMVETS, Disabled American Veterans, and the Veterans 
of Foreign Wars, Congress should fully fund VA's training initiatives. 
Improved and continued centralized training should help reduce 
inconsistencies and disparities between Regional Offices and should 
improve consumer confidence.
    The VA and VSOs can also explore opportunities to share resources 
for training. Moreover, Congress should authorize VA to provide greater 
access for VSOs to VA's training modules. For example, PVA has prepared 
a Guide for Special Monthly Compensation that has been adopted for 
rater training placed on VA's intranet. The PVA Guide has also been 
distributed via BVA Special Monthly Compensation (SMC) training. PVA 
staff also interacts with other VSOs at their training events.
    Another point that The Independent Budget has advocated for is 
significant increases in staffing levels in the VBA at all levels. If 
the FY 2008 Military Construction and Veterans' Affairs appropriations 
bill is enacted prior to the start of the new Fiscal Year on October 1 
(a prospect that seems to be getting dimmer every day), the VA will be 
provided much needed funding to add more than 1000 new full-time 
equivalent employees (FTEE) to VBA.
    However, it is important to realize that decisions made on appeal 
require greater expertise and often involve more complex questions of 
medicine and law. As such, it takes years to train a competent ratings 
specialist. Trainees should simply not be conducting appellate review 
due to the complexity of these decisions. Increases in staffing today 
should be seen as an investment in the future. In the end, staffing 
issues do not have a quick fix.
    Mr. Chairman and Subcommittee Members, I would like to thank you 
once again for allowing PVA to present its views on the Board of 
Veterans' Appeals and the Appeals Management Center. We look forward to 
working with you to continue to improve the claims process at all 
levels. I would be happy to answer any questions that you might have.

                                 
         Prepared Statement of Steve Smithson, Deputy Director,
    Veterans Affairs and Rehabilitation Commission, American Legion
    Mr. Chairman and Members of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
views on the Board of Veterans' Appeals (Board or BVA) and the Appeals 
Management Center (AMC). The American Legion commends the Subcommittee 
for holding a hearing to discuss these two important parts of the 
Department of Veterans Affairs (VA) claims adjudication system.
Board of Veterans' Appeals
    The BVA is a separate entity within VA. Its responsibility is to 
render a final decision on the propriety of regional office decisions. 
If the BVA determines that a final decision cannot be made on a case 
due to an inadequate record it has the authority to remand the case 
back to the agency of original jurisdiction, which now includes the 
AMC, for additional development and readjudication.
    As of September 8, 2007, there were more than 160,000 cases in 
appellate status still pending in VA's 57 regional offices, with more 
than 142,000 requiring some type of further adjudicative action. In 
September of 2006 there were approximately 9,000 fewer pending appeals. 
Based on statistics produced by the VA for the first 11 months of FY 
2007, once a substantive appeal has been filed it takes the VA regional 
offices an average of 527 days to forward the case to the BVA. In view 
of the increasing number of new appeals coming into the system, it is 
painfully obvious that the level of dissatisfaction among claimants 
seeking VA disability benefits is substantial and growing.
    At the end of FY 2006, the BVA had 457 employees, including 56 
veteran law judges. Even though the Board's current average processing 
time is 274 days, up about 22 days from FY 2006, we do not believe 
there is an urgent or overriding need for any substantial increase in 
staffing. The amount of time it is taking to process an appeal should 
not be the most important factor in decisions about the adequacy of the 
Board's staffing. The American Legion is more concerned that the 
Board's decisions are fair and proper.
    Since 2004 the BVA has concentrated much of its effort on 
eliminating avoidable remands. It is clear that the Board would like to 
issue more final decisions in order to reduce its backlog. This effort 
has resulted in a significant reduction in remands (from 56.9 percent 
in FY 2004 to 32 percent in FY 2006). It has also resulted in a 
significant increase in denials (from 24.2 percent in FY 2004 to 46.3 
percent in FY 2006), with only a slight increase in allowances (17.1 
percent in FY 2004 to 19.3 percent in FY 2006). It is the opinion of 
The American Legion, based on our review of American Legion represented 
appeals denied by the BVA, that in its zeal to avoid remands, the BVA 
has rendered erroneous or premature decisions in cases where benefits 
should have been granted or where the case should have been remanded. 
In the past 8 years the National Veterans Legal Services Program 
(NVLSP), consultant to The American Legion, has appealed approximately 
500 American Legion BVA denials to the U.S. Court of Appeals for 
Veterans Claims (CAVC) and has won a remand or reversal in over 90 
percent of these appeals. Further, according to the CAVC Web site, the 
combined remand plus reversal rate for appeals decided by the Court on 
the merits was just over 76 percent. This rate mirrors the remand plus 
reversal rate achieved by the volunteer attorneys who take cases 
through the Veterans Consortium Pro Bono Program. A 90 percent (or even 
a 76 percent) reversal/remand rate is unacceptable for any adjudicative 
system, but this extraordinarily high remand/reversal rate is 
especially galling for an adjudicative system that is required by 
statute to be so veteran friendly that the benefit of the doubt is 
given to claimants. Clearly, such a high remand/reversal rate is a 
direct reflection of substandard BVA decisions.
    There are more than 31,000 appeals currently pending at the BVA. In 
FY 2006, the BVA issued 39,076 decisions (95 percent of these decisions 
involved compensation claims). In the first 11 months of FY 2007, the 
BVA issued more than 37,000 decisions and, of these, only 41 percent of 
the regional offices' decisions have been affirmed or upheld by the 
BVA. The Board overturned the regional offices' decisions in 21 percent 
of the cases and remanded 35 percent of the appeals. Most remands went 
to the AMC for additional development and readjudication. The BVA 
remand, allowance and denial rate for the first 11 months of FY 2007 is 
similar to that of FY 2006. A logical conclusion that one reaches after 
reviewing this data is that the quality of regional office adjudication 
continues to be totally unacceptable and the BVA continues to issue 
many substandard decisions.
    It should be noted that the Board's work product is a direct 
reflection of the adjudications produced by the VA regional offices. 
The BVA cannot be reviewed in a vacuum. Most of the problems with the 
BVA can only be corrected if the quality of adjudications in the VA 
regional offices is improved. The poor quality of VA regional office 
adjudications adversely impacts the work of the BVA. The American 
Legion has long maintained that such poor quality regional office work 
is a direct result of VA management placing a higher value on the 
quantity of adjudications produced by the VA regional offices rather 
than the quality of that work.
    This emphasis on production continues to be a driving force in the 
VA regional office, often taking priority over such things as training 
and quality assurance. Performance standards of adjudicators and rating 
specialists are focused on productivity as measured by work credits, 
known as ``End Products''. Both veteran service representatives (VSRs) 
and rating veteran service representatives (RVSRs) have minimum 
national productivity requirements that must be met each day. The 
American Legion has also learned that some VA regional offices also set 
their own production standards that require VA adjudicators to produce 
more final decisions over and above the national requirement.
    Unfortunately, the end product work measurement system essentially 
pits the interests of the claimant against the needs of VA managers. 
The conflict is created because the regional office managers seeking 
promotion and bonuses have a vested interest in adjudicating as many 
claims as possible in the shortest amount of time. This creates a 
built-in incentive to take shortcuts so that the end product can be 
taken. The system, in effect, rewards regional offices for the gross 
amount of work they report, not whether the work is done accurately or 
correctly. Often, the emphasis on production results in many claims 
being prematurely adjudicated. These problems are caused (in part) by 
not taking the time to adequately develop the claim, not taking the 
time to identify all relevant issues and claims, and not taking the 
time to order a new VA examination when the previous VA examination is 
obviously inadequate. Such errors are often overshadowed by the desire 
of VA managers to claim quick end product credit.
    The emphasis on production causes two bad results. First, because 
of shoddy regional office work there are so many cases for the BVA to 
remand that the Board, pressured to reduce its remand rate, all too 
often denies claims that should be remanded. This is reflected by the 
very high remand/reversal rate at the CAVC. Second, in many instances, 
the Board has no choice but to remand prematurely adjudicated claims. 
The high BVA remand rate has resulted in a growing backlog at the AMC. 
The BVA combined remand and reversal rate (56 percent) through August 
of 2007 is arguably a direct reflection of the greater emphasis placed 
on production over training and quality assurance by the VA regional 
offices.
    Veterans Benefits Administration (VBA) management has been 
reluctant to establish a rigorous quality assurance program to avoid 
exposing the longstanding history of the manipulation of workload data 
and policies that contribute to poor quality decisionmaking and the 
high volume of appeals. VBA's quality-related problems and the fact 
that little or no action is being taken to prevent or discourage the 
taking of premature End Products have been longstanding issues for The 
American Legion. The current work measurement system, and corresponding 
performance standards, are used to promote bureaucratic interests of 
regional office management and VBA rather than protecting and advancing 
the rights of veterans. The end product work measurement system, as 
managed by the VA, does not encourage regional office managers to 
ensure that adjudicators do the ``right thing'' for veterans the first 
time. For example, denying a claim three or four times in the course of 
a year before granting the benefit sought allows for a total of five 
end product work credits to be counted for this one case, rather than 
promptly granting the benefit and taking only one work credit.
    In the view of The American Legion, the need for a substantial 
change in VBA's work measurement system is long overdue. A more 
accurate work measurement system would help to ensure better service to 
veterans. Ultimately, this would require the establishment of a work 
measurement system that does not allow work credit to be taken until 
the decision in the claim becomes final, meaning that no further action 
is permitted by statute whether because the claimant has failed to 
initiate a timely appeal or because the BVA rendered a final decision. 
We are pleased that recently introduced legislation (H.R. 3047) would 
mandate such overdue changes to VA's work credit system. We are hopeful 
that, if enacted, this legislation, which would change the underlying 
incentive by rewarding quality of work rather than quantity, will 
increase the number of accurate decisions as well as claimant 
satisfaction and, in doing so, reduce the overall number of appeals.
Appeals Management Center
    Frustrated with the large number of underdeveloped appeals received 
from the regional offices and the inordinate amount of time it was 
taking for remands to be worked upon by the regional offices and 
returned to the Board, the BVA established a development unit, pursuant 
to a newly written regulation (38 C.F.R. Sec. 19.9(a)(2)) on February 
25, 2002. However, as a result of a successful legal challenge to the 
establishment of the BVA development unit VBA dismantled the BVA 
development unit and the VA then established the AMC on July 23, 2003. 
The purpose of the AMC is to provide more expeditious action on remands 
and also to relieve the regional offices of the workload burden 
associated with remands.
    The AMC was established to function as a national regional office 
that would handle BVA remands. It has been tasked to undertake the 
additional development of evidence specified by the Board and then 
readjudicate the claim. Unfortunately the AMC office, with a staff of 
94 FTE, has been overwhelmed by an unmanageable backlog of remands 
since it first opened its doors. Initially, 16,484 cases were inherited 
from the BVA development unit and, currently, the AMC has more than 
18,000 remands under development.
    While the AMC is an admirable attempt by VBA to improve service to 
veterans, it does nothing to address the problems underlying the 
continued rise in the number of appeals and remands by the BVA. In our 
view, the very necessity of the AMC's existence begs the question--why 
hasn't VBA mandated the regional offices to correct their own mistakes?
    The AMC is now responsible for correcting errors that the regional 
offices were unwilling or unable to do. The AMC, however, has no 
authority to prevent the same type of error, which prompted the appeal 
and remand, from occurring again. Since production work on new claims 
was the highest priority and because the VA regional offices did not 
receive work credit for work caused by a BVA remand, many regional 
offices placed a low priority in developing and adjudicating BVA 
remands. This resulted in many cases remanded by the BVA not being 
adjudicated for several years after the case was remanded. Now, because 
there is an AMC, there is little incentive for the regional offices to 
improve the quality of their adjudications. Most prematurely denied 
claims are being remanded to the AMC. Therefore, when a regional office 
denies a claim incorrectly or prematurely it does not have to correct 
its error because the case will be remanded to the AMC. The American 
Legion asks that Congress take action to require that the VA regional 
offices are held accountable for the poor quality of initial 
decisionmaking.
    The AMC's apparent inability to bring its extremely large backlog 
under control since its creation in 2003 has been a major concern of 
The American Legion. As previously stated, the AMC currently has more 
than 18,000 remands pending development and adjudication. In August of 
this year, the BVA remanded 1,710 cases to the AMC while the AMC only 
returned 639 remands to the BVA, leaving the AMC with a deficit of 
1,071 cases for the month. Moreover, 21 percent of the 13,082 appeals 
remanded by the BVA in the first 11 months of FY 2007 were prior 
remands as were 30 percent of the appeals allowed by the BVA. This data 
tends to reflect a large percentage (51 percent) of cases that were not 
properly developed or adjudicated by the AMC. Additionally, in July of 
this year the AMC started brokering ready-to-rate cases to designated 
regional offices. As of September 24, 2007, there were 199 AMC remands 
at the Huntington Regional Office and 75 at the Seattle Regional Office 
with additional brokering expected to take place each month. 
Unfortunately, this is another example of the AMC, as it is currently 
structured, not being able to properly handle its workload. It is clear 
that the AMC is under funded. The Congress and the VA should now take 
prompt action either to eliminate the AMC or to properly fund its work.
Conclusion
    The best way to help veteran claimants is to fix the entire VA 
claims adjudication system. Piecemeal solutions do not work and should 
be avoided. The VA work measurement system should be changed so that VA 
regional offices are rewarded for good work and suffer a penalty when 
consistent bad decisions are made. Managers, attorneys and the law 
judges at the BVA should be rewarded for prompt careful work and they 
should also be penalized when they make bad decisions. The AMC should 
be adequately funded or closed. American veterans seeking VA disability 
benefits deserve better treatment than what they are currently getting 
from the VA.
    Thank you again, Mr. Chairman, for allowing The American Legion to 
present comments on these important matters. As always, The American 
Legion welcomes the opportunity to work closely with you and your 
colleagues to reach solutions to the problems discussed here today that 
are in the best interest of America's veterans and their families.

                                 
                 Prepared Statement of Adrian Atizado,
  Assistant National Legislative Director, Disabled American Veterans
    Mr. Chairman and Members of the Subcommittee:
    On behalf of the 1.3 million members of the Disabled American 
Veterans (DAV), I am pleased to present our views on the functioning 
and performance of the appellate operations of the United States 
Department of Veterans Affairs (VA), as carried out by its Board of 
Veterans' Appeals (BVA or Board), and Appeals Management Center (AMC). 
The members of the DAV are made up of service-connected disabled 
veterans and along with family members in the Auxiliary, have a special 
interest in the subject of today's oversight hearing.
    The effective administration of appellate review of claims 
decisions is essential to discharging VA's mission of caring for our 
Nation's veterans. Approximately 96 percent of BVA's workload involves 
disability compensation and pension claims. The oversight this 
Subcommittee provides is necessary to guarantee veterans receive the 
benefits to which they are entitled by law and to impose the 
accountability for results and efficiency that our citizens rightfully 
demand. Your vigilant oversight of performance, and your watchfulness 
of execution of the laws, creates an incentive for better performance 
by VA.
    The law governing veterans' benefits, as it is generally, is not an 
exact science. Adjudication of veterans' claims for VA benefits and 
services require the intervention of human judgment. Such judgment is 
not infallible, and we therefore view the right to appeal as an 
important element of fairness and necessary to safeguard against 
injustices that result from human error. Because appellate review is so 
essential to ensuring justice in an unavoidably imperfect adjudication 
system, the proper functioning of appellate processes is of major 
importance, especially where the rights and benefits of our veterans 
are involved.
    As a statutory board, BVA was created by consolidating and 
centralizing the appellate board in Washington, DC, and with a clearer 
sense of direction, the problems of decentralization, lack of 
uniformity, and the lack of finality were addressed. Since its 
inception, BVA has operated separate and independent from the other 
elements of VA. While there have been some changes in its configuration 
since 1933, BVA has retained its basic concept and mission.
    BVA's mission today is still to make the final decision on behalf 
of the VA Secretary in claims for benefits. Section 7104 of Title 38, 
United States Code, provides: ``All questions in a matter which . . . 
is subject to a decision by the Secretary shall be subject to one 
review on appeal to the Secretary. Final decisions on such appeals 
shall be made by the Board. ''
    Although BVA generally makes the final decision in an appeal, the 
appellate process begins with the VA field office responsible for the 
appealed decision, commonly referred to as the agency of original 
jurisdiction. Some appealed decisions are resolved by the agency of 
original jurisdiction, which alleviates the need for a final decision 
by BVA. Other appeals that have been transferred to BVA may be sent 
back, ``remanded,'' to the agency of original jurisdiction to cure some 
procedural omission or record defect, or may be favorably resolved. Up 
to 50 percent of the appealed cases are resolved by the agencies of 
original jurisdiction and never reach the Board. About 75 percent of 
the remanded cases are returned to the Board for a final decision.
Appellate Process
    A veteran or other claimant initiates an appeal by filing a 
``notice of disagreement'' with the agency of original jurisdiction. 
The agency of original jurisdiction may then take such additional 
development or review action as it deems proper. If such action does 
not resolve the disagreement, the agency of original jurisdiction 
issues to the appellant a ``statement of the case'' that contains a 
summary of the pertinent evidence, a citation of the pertinent legal 
authorities along with an explanation of their effect, and an 
explanation of the reasons for the decision on each issue. To complete, 
or ``perfect,'' the appeal, the appellant must then file with the 
agency of original jurisdiction a ``substantive appeal,'' a written 
statement specifying the benefit or benefits sought and the basis of 
the appellant's belief that he or she is legally entitled to the 
benefit or benefits. Upon receipt of the substantive appeal, VA enters 
the case on the BVA docket. The BVA docket is a list of cases perfected 
for appellate review compiled in chronological order of when the 
substantive appeal was received. The Board receives these cases for 
review by their order on the docket, although a case may be advanced on 
the docket for demonstrated hardship or other good cause. The Board 
must afford each appellant an opportunity for a hearing before deciding 
his or her appeal. The hearing may be held before the BVA at its 
principal office or at a VA facility located within the area served by 
appellant's VA regional office. The Board may enter a decision that 
orders the granting of appropriate relief, denying relief, or remanding 
the appeal for further action by the agency of original jurisdiction.
    Claimants for veterans' benefits who believe BVA made factual or 
legal errors in deciding their claims may appeal to the United States 
Court of Appeals for Veterans Claims (CAVC or Court). The Court may 
affirm or reverse the BVA decision, or remand for further action. The 
landmark legislation enacted in 1988 that subjected BVA decisions to 
the scrutiny of an independent court has necessitated positive reforms 
in BVA decisionmaking. Because the Board's decisions must be justified 
with an explanation of the factual findings and legal conclusions and 
because VA must defend its decisions in court, denials that go against 
the weight of the evidence or law have declined. The Board allows and 
remands substantially higher percentages of appeals than it did before 
judicial review. Prior to judicial review, BVA allowed or remanded only 
about 20 percent of appeals. Today that number is approximately 56 
percent.
    During 2006, 3,729 claimants appealed to CAVC. The Court decided 
2,135 cases based on the merits of each case, with a median processing 
time from filing of the appeal to disposition of 351 days. Of that 
total, 1,365 cases, or 64 percent, were either reversed/vacated and 
remanded or remanded because of some substantive error or procedural 
defect. This reflects a high error rate among those BVA decisions 
appealed to the Court.
    The DAV's judicial appeals representatives complain that the Board, 
with increasing frequency, is deviating from the Court's orders 
reversing and/or remanding cases with specific instructions. The 
Board's failure to adhere to the Court's orders is blatantly unlawful. 
Claimants have no immediate means to remedy the Board's unlawful 
action. For example, in one recent case the Secretary and the veteran 
appellant agreed that the Board had committed an error which required 
remand for a new Board decision and that the record was sufficient for 
the Board to make that decision. The Court granted a joint motion for 
remand that directed the Board to decide the appeal based on the 
existing record. The Board ignored that order and remanded to the 
regional office with an instruction to conduct an examination. The 
Court has held that such remand orders by the Board are not final 
decisions and therefore not appealable to the Court. The claimant in 
that case was consigned to the VA adjudication hamster wheel for an 
additional period of months or years. The Board's defiance of the 
Court's mandates breaks down the order and discipline imperative in 
appellate systems where inferior tribunals are legally bound to adhere 
to the orders of superior tribunals.
    During Fiscal Year (FY) 2006, 101,240 new notices of disagreement 
were received by VA, 46,076 appeals were perfected and added to BVA's 
docket, 41,802 cases were physically transferred from agencies of 
original jurisdiction to BVA, and the Board decided 39,076 cases. The 
Board began 2006 with 37,539 cases pending before it and ended the year 
with 40,265 cases pending. Accordingly, the number of new appeals added 
to the Board's docket during the year exceeded the number of cases it 
decided by 7,000, and the number of new appeals added to the Board's 
docket exceeded the number of cases transferred to the Board for a 
decision by 4,274. The Board decided 2,726 fewer cases than it received 
from field offices.
Processing Time
    At the end of FY 2006, there were more than 164,000 cases in field 
offices in various stages of the appellate process, including the 
21,229 on remand. Some of these appeals will be resolved at the field 
office level, but about three-fourths of them will come before the 
Board.
    During FY 2006, the average time for resolving an appeal, from the 
filing of the notice of disagreement to the date of the decision was 
971 days. Of this total, 719 days was the average time an appeal was 
pending in the field office, from the notice of disagreement to the 
transfer of the case to BVA, with an average of 252 days from the date 
of receipt of the case at BVA to the date of the decision.
    For FY 2006, the average number of days an appeal was pending in 
the New York City VA regional office before being transferred to BVA 
was 1,513 days, with 1,213 of those days representing the time after 
the appeal was perfected and the case was ready for transfer. 
Corresponding average days in the St. Petersburg, Florida regional 
office was 1,014 and 645; Chicago, Illinois was 865 and 613 days; 755 
and 542 days in Cleveland, Ohio; 745 and 478 days in Denver, Colorado; 
and 706 and 478 days in Reno, Nevada. For a New York case, the average 
total processing time for an appeal at BVA in FY 2006 was 209 for a 
total of 1,722 days, almost 4 years and 9 months. Correspondingly, for 
a case in St. Petersburg the average total number of days to a BVA 
decision was 1,254 or 3 years and 5 months, nearly 3 years in Chicago 
(1,093 days) and Denver (1,050 days), and over 2\1/2\ years in 
Cleveland (982 days) and Reno (935 days). Eleven VA regional offices 
exceeded 1,000 days for the average time an appeal was pending at the 
field office (New York; Seattle; San Diego; Los Angeles; Providence; 
Houston; Honolulu; Milwaukee; Atlanta; Des Moines; St. Petersburg).
    From the start of this Fiscal Year through August 2007, the average 
total days for cases pending in the field was 784 days and the average 
time at BVA was 274 days. Of course, for those cases remanded, the 
total processing time is considerably longer. An additional 140 days 
were added to the total processing time of appeals for the time the 
case spent at BVA the second time following the remand, and this does 
not include the number of days the case was on remand at the field 
office.
    In FY 2006, an additional 115 days were added to the total 
processing time of appeals for the time the case spent at BVA the 
second time following the remand not including the number of days the 
case was on remand at the field office. During FY 2006, 13,812 cases 
were returned to the Board following remands. As noted, there were 
21,229 cases on remand at the end of 2006. Of the 39,076 cases decided 
by BVA in FY 2006, approximately 37 percent had been previously 
remanded. With these long processing times, far too many disabled 
veterans die before their appeals can be decided. Three obvious 
conclusions follow from these numbers: (1) most of the delay in these 
unreasonably protracted appeals processing times is at the field office 
level, (2) far too many cases must be remanded more than once, and (3) 
multiple remands add substantially to the workload of BVA and the 
regional office.
Accuracy
    From the beginning of FY 2007 to date, the Board allowed 21 percent 
of the 37,120 cases it decided. Approximately 31 percent of those 
allowed cases had been previously remanded. In addition, the Board 
remanded 35 percent of the cases it reviewed and of those remanded 
cases, 21 percent had already been previously remanded, suggesting that 
the field office did not fulfill the Board's instructions in the remand 
order. Together, the allowed and remanded cases represented 56 percent 
of the Board's total case dispositions. In addition to noting the high 
percentage of cases remanded multiple times, two conclusions can be 
drawn from these percentages: within these appealed cases, (1) agencies 
of original jurisdiction have denied many meritorious claims, and (2) 
agencies of original jurisdiction have denied many cases without proper 
record development.
Space Issues
    BVA experiencing some shortage of storage space for claims files 
because of the large volume of appeals, the President's FY 2008 budget 
request for 468 fulltime employees (FTE) and indications from this 
Subcommittee to increase BVA will create a more pronounced need for 
additional space. Considerable time and effort was invested toward the 
Board's planned relocation to a more suitable office space in FY 2007. 
Unfortunately, funding for this necessary move was withdrawn and the 
move has been permanently delayed. If future backlogs and delays in 
appellate processing are to be avoided, BVA must have the additional 
resources necessary to meet this increasing workload.
New Initiative
    Timeliness and accuracy of claims for veterans benefits and 
services remains a concern for the DAV. A proposed initiative was 
announced this year to address the timeliness of claims and appeals. 
The Expedited Claims Adjudication (ECA) initiative as proposed would 
offer an expedited process to selected claimants by requiring a waiver 
of certain time periods normally afforded in the claims and appeals 
process. While we agree that the timely processing of all claims and 
appeals must be improved, this initiative is only one method to achieve 
the goals it has outlined. We must remain cautious that any such 
agreement or waiver of protection afforded to the veteran by law should 
be an option and not a requirement, and not be utilized to discriminate 
or disallow the claim or appeal from proceeding or returning to the 
normal claims process. Moreover, we do not concur with the proposed 
statutory changes to 38 USC Sec. 7105(b)(1), 7104, 7101, and 7107(b) as 
the goal of speeding up the process should not be accomplished by 
depriving appellants of due process. We believe that the three core 
elements that must be allowed are staffing levels, adequate training, 
and accountability.
Appeals Management Center
    In August 2001, VA proposed to amend the Board's regulations to 
enable the Board to perform record development itself and make a 
decision on that evidence rather than remand the case to the agency of 
original jurisdiction for these purposes. For several reasons related 
to unfairness and inefficiency, the DAV urged VA not to issue a final 
rule to authorize this practice. We also noted that such a rule would 
be unlawful because it would deprive claimants of the statutory right 
to have a decision by VA and one administrative appeal from that 
decision.
    VA brushed aside our objections and recommendations to utilize 
Veterans Benefits Administration (VBA) personnel rather than the BVA 
and issued a final rule for this purpose in January 2002. BVA created 
its Evidence Development Unit, which began operations in February 2002. 
The DAV, joined by three other organizations, challenged this rule and 
in its May 1, 2003, decision, the United States Court of Appeals for 
the Federal Circuit invalidated the rule as unlawful. As a result, VA 
created a special VBA unit, the AMC, to perform remand functions.
    The AMC develops and decides approximately 82 percent of the BVA 
remands. The issues involved in the other 8 percent are more 
appropriately handled by the field offices. Although the average time a 
case was in remand status during FY 2006 was 16 months because a 
portion of the cases were old ones remanded to field offices, the 
portion of the remanded cases that were developed and decided by the 
AMC were on remand an average of approximately 336 days. The most 
recent data available to DAV for FY 2007 indicates the AMC currently 
completes work on an average of 710 cases a month and 18,622 cases are 
assigned to AMC.
    The initial bulk transfer of approximately 9,000 cases from the 
Board to the AMC in the first quarter of FY 2004 were cases in which 
further development was pending at the Board. Of course, the AMC had 
both the responsibility to develop and adjudicate these cases. In the 
beginning when the AMC was first organized, it had to cope with new 
processes and adjudicators, and it was understandably not up to full 
efficiency. As a consequence, cases began to back up.
    Because the volume of work at the AMC was higher than expected, VBA 
developed a plan in December 2004 to have three VA regional offices do 
a portion of the remands to reduce the backlog. These offices are 
located in Huntington, West Virginia; St. Petersburg, Florida; and 
Cleveland, Ohio. Initially, the plan was to broker already developed 
cases to these regional offices to adjudicate, and authorize awards as 
indicated. However, the Huntington and St. Petersburg offices found 
that some of the cases they received from the AMC were not actually 
ready to adjudicate, and that these offices began to undertake 
development also.
    Out of the three regional offices, only Huntington remains a 
receiving station for brokered cases from the AMC, in addition to the 
Seattle VA regional office. According to the AMC, 300 cases a month are 
sent to the AMC teams at the two regional offices, significantly less 
than the 1,300 cases to three regional offices in 2005.
    Our DAV representatives at BVA observed that some of the earlier 
cases returned to the Board from the AMC were not developed in 
compliance with the remand orders. However, with AMC employees gaining 
experience, the quality of development has improved. The AMC is viewed 
as an improvement over the prior procedure in which all cases were 
remanded to agencies of original jurisdiction because cases are more 
strictly controlled and not left to languish in field offices for years 
as too often happened before. Our representatives at the AMC also 
report that AMC adjudicators are granting the benefits sought in many 
of these appeals.
    When the BVA allows an appeal, it returns the case to the AMC 
rather than the agency of original jurisdiction to effectuate the award 
of benefits. The case often must go to the AMC because the appeal also 
involves a remanded issue. A major and continuing complaint is the 
delay in the award of benefits on the allowed portion of the appeal. 
While benefits sought may be granted, the average time from the 
decision to issuance of the award to the veteran has doubled from an 
average of 3 months in 2005 to an average of 6 months. Even where the 
case involves no remanded issue, the case is sent from BVA to the AMC 
for the award of benefits resulting in unnecessary delays.
    In 2005, VBA had 134 FTE devoted to the AMC and its three 
outstations: 87 FTE in the AMC; 25 FTE in St. Petersburg; 8 FTE in 
Huntington, and 14 FTE in Cleveland. According to the AMC, there are 
now 99 in the AMC, and no FTE devoted to the two resource centers in 
Huntington and Seattle.
    Focus on the BVA and the AMC alone does not present a complete 
picture of the effectiveness of VA's appellate processes. The 
timeliness and propriety of actions on appeals by agencies of original 
jurisdiction in preparing the case for BVA review and in completing 
remand actions after BVA review account for much of the overall 
appellate processing time and necessity to rework the case. The 
available data show the error rates in appealed cases are high and that 
the process takes an inexcusably long time, thereby delaying disability 
and other benefits for many veterans with meritorious claims and 
immediate needs. The problem of appeals languishing in regional offices 
for years is not a new one. The responsible VBA officials need to take 
more decisive action to correct this problem. Board officials need to 
take the necessary steps to reduce error rates in BVA decisions and to 
ensure binding court mandates are carried out. With recent increases in 
the appellate caseloads and no corresponding increase in staffing, 
timeliness at BVA and the AMC is likely to suffer even more. Congress 
needs to address BVA space and staffing more seriously.
    In addition, DAV and VA are unaware of what the effects of the 
provision in Public Law 109-461, which allows attorneys and agents to 
charge fees to veterans, will be on the Board, the AMC, and the 
timeliness and accuracy of the appellate process.
    We appreciate the Subcommittee's interest in these issues, and we 
appreciate the opportunity to provide you with the DAV's views. We hope 
our views will be helpful to the Subcommittee.

                                 
        Prepared Statement of Eric A. Hilleman, Deputy Director,
                     National Legislative Service,
             Veterans of Foreign Wars of the United States
    Mr. Chairman and Members of the Subcommittee:
    On behalf of the 2.4 million members of the Veterans of Foreign 
Wars of the U.S. (VFW) and our Auxiliaries, I would like to thank you 
for your invitation to testify at today's important hearing on the 
``Board of Veterans' Appeals (BVA) Adjudication process and the Appeals 
Management Center (AMC).'' Let me begin by stating that the VFW is 
committed to an effective and efficient claims process, with a just and 
accessible appeals process. We hope to be a partner in seeking 
actionable solutions to the challenges that the VA faces.
    The VFW's genesis is with the group of veterans who returned from 
the U.S. campaigns on Cuba and the Philippines in 1898 and 1899. These 
veterans organized to care for veterans who endured the hardships of 
the battlefield, so that our Nation may never forget their sacrifice. 
All Veterans Service Organizations (VSOs) have a similar goal, to 
ensure the American people, through their government continue to 
recognize and acknowledge their sacred obligation to those citizens who 
sacrificed and risked life and limb for their defense. The VFW believes 
this agreement does not cease when the uniform lies folded in a drawer.
    We must view the Department of Veterans Affairs' claims process 
through the lens of this social contract. We, and other VSOs, have long 
served at no cost to our fellow veterans to provide benefits 
counseling, claims development, outreach, and claims review in VA 
regional offices, the BVA and the AMC. We, like other VSOs, maintain 
full time appeals consultants at the BVA and AMC.
    The VFW adds value to the claims adjudication process. We serve as 
a quality assurance tool in reviewing cases. We formulate arguments to 
further veterans' rights to fair compensation. In addition, we foster a 
working relationship with the VA with the goal of keeping the best 
interests of the veteran at the forefront of the decisionmaking 
process.
    The backlog of veterans' claims within Veterans Benefits 
Administration (VBA) is on the rise. The nearly 640,000 rating and 
authorization cases are pending and this is 7.4 percent higher than 
last year and 22\1/2\ percent higher than 2 years ago. The challenges 
VBA faces in addressing the mounting workload are well established. 
These include the growth of the total claims workload, an ever-
increasing complexity of the workload, and the expectations for 
accurate and timely decisions. The contributing factors of the backlog 
are also well known.
    The rise in the number of claims is a tragic success for the VA. 
Due to VA's increased outreach efforts and greater access through Vet 
Centers, more veterans are learning and taking advantage of their 
earned benefits. Greater numbers of young veterans are returning from 
combat operations and seeking assistance to reestablish a civilian 
life. So too, an aging generation of Vietnam, Korean, and WWII veterans 
are living longer lives than previous generations and seeking care at 
VA facilities.
    With the residual effects of combat and military service on 
veterans, the complexity of claims is on the rise. The United States 
Court of Appeals for Veterans Claims has also ruled to improve the 
fairness and access for veterans seeking compensation for injuries and 
illness incurred or aggravated while in service. On more than one 
occasion, rulings of the court have caused VBA to readjudicate 
thousands of claims in an already overwhelmed claims processing system. 
Couple this administrative woe with the medical challenge of multiple 
body-system blast injuries of OIF/OEF veterans and the increasing 
strain of the effects of illnesses like diabetes and cancer that are 
synonymous with herbicide exposure in Vietnam and the VA is 
overwhelmed.
    As the backlog of VBA claims swells at every step of the process, 
the VA weighs the values of quality vs. quantity. The VFW demands both 
quality and timeliness. The VA has repeatedly testified before Congress 
to the ills that plague its claims system. Congress has aptly responded 
with a much-needed increase in funding, yet additional personnel, 
following decades of inadequate staffing, will not be productive in the 
near term. The Congress, the VA, and the Veterans' community must 
examine the system and move forward together.
    VBA has sought to address these problems by creating an Appeals 
Management Center (AMC) here in Washington. The AMC is comprised of a 
dedicated and committed staff. The AMC addresses the problem of appeal 
remand development, collecting and requesting additional medical 
records, exams, and necessary military records. The driving idea behind 
the AMC was specialization, thus making the AMC a catch basin at the 
end of the process to improve quality. It has yet to realize its 
original vision--again the absence of training and difficulties in 
fully staffing ensures that it will never live up to its potential.
    The VFW supported the establishment of the AMC and we continue to 
work side-by-side with the VBA to improve the appeal process. There are 
a number of looming concerns beyond the present need for adequate 
funding, such as personal issues in the areas of training and turnover. 
VBA employees face a long and complex training regimen and are not 
easily replaced. VBA's ability to deliver timely and accurate claims is 
eroding because of operating in crisis management mode, an aging 
workforce, and a program that seems to be growing relentlessly more 
complex. Perhaps the answers lie in some combination of technology, 
more effective and enlightened training, and new employees committed to 
serve the new generation of veterans. Most troubling to us is the 
possibility of significant policy change, not necessarily favorable to 
veterans, which would further complicate the process and change it into 
a more adversarial environment.
    Despite their best efforts, VBA's production is fraught with a high 
error rate and growing caseload. It seems clear that VBA lacks a 
methodology to eliminate or accurately identify the serious errors that 
plague one out of every seven or eight claims decisions. It also seems 
obvious that faulty decisionmaking will go unaddressed unless solutions 
involving a combination of improved information technology, program 
reform, and strong leadership are implemented with special care not to 
increase complexity and duplication.
    Reform of the system is required. Change is not without precedent 
in government agencies, but it is only possible when all concerned are 
truly interested in improvement, and not just in putting a positive 
spin on the latest bad news. We think that with the support of a strong 
VBA leadership, the necessary reform is possible. We urge the Congress 
to further examine this issue, exercise leadership, and build consensus 
for reform.
    Thank you for this opportunity to present our views before this 
Subcommittee. We welcome questions and look forward to working with 
interested parties toward viable solutions with the best interests of 
veterans at heart.

                                 
             Prepared Statement of Arnold Russo, Director,
      Appeals Management Center, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs
    Chairman Hall and Members of the Subcommittee.
    Thank you for providing me the opportunity to appear before you 
today to discuss the operations of the Department of Veterans Affairs 
(VA) Appeals Management Center (AMC).
    My statement today will address the remand process and the current 
AMC workload.
Appeals Management Center
    The AMC was created in July 2003, consolidating the responsibility 
for managing remands from the Board of Veterans' Appeals (BVA) into a 
single operation where resources and expertise could be concentrated.
    The mission of the AMC is to process remands timely and 
consistently. The AMC has complete authority to develop remands, reach 
decisions based on additional evidence gathered, and authorize the 
payment of benefits. If the AMC is unable to grant an appeal in full, 
the appeal is re-certified to BVA for continuation of the appellate 
process.
    Veterans Benefits Administration (VBA) and BVA have worked closely 
together to address the root causes of remands. Our joint initiatives 
have focused on increased coordination of data collection, 
identification of trends, and training. These joint initiatives have 
proven to be very successful. The remand rate for FY 2005 was 43 
percent. The current remand rate has improved dramatically to 34 
percent.
    We continue to work to identify the root causes of cases being 
remanded. There are many reasons why a case may be remanded by BVA for 
additional action that are beyond the control of the regional office 
that processed the case, such as a regulatory change or new precedent 
Court decision. While remands do not necessarily mean that a mistake 
was made in the processing of the case, we have focused our attention 
on analyzing those cases where development by the regional office was 
deficient and the remand could have been avoided.
    Deficiencies are tracked nationally and by regional office and are 
targeted for development of additional guidance and/or increased 
training. Additionally, VBA this year added ``avoidable remand rate'' 
to the performance standards for all regional office directors. Through 
the end of August 2007, the FY 2007 national avoidable remand rate is 
under 18 percent, or a 6 percent improvement over last year.
    To improve the timeliness of remand processing at the AMC, we have 
added a technical expert to every team to ensure that any information 
requested in the remand order was asked for and obtained, or a 
satisfactory explanation as to why the evidence could not be obtained 
included in the claims folder. This procedure provides an internal 
check on our development practices, and ensures consistency throughout 
the AMC.
    The AMC has received assistance in remand processing from three of 
VBA's resource centers. This allowed the AMC to establish a workflow 
that develops cases in a timely, efficient, and accurate manner. During 
FY 2003, regional offices were taking an average of 700 days to 
complete a remand. In FY 2005, average processing time for a remand 
completed at the AMC was 400 days. Currently, the AMC is averaging 343 
days to process a remand. We continue to strive for further 
improvement. A strategic goal of 230 days to complete a remand has been 
established. This goal represents the minimum time needed to complete a 
remand given the notification, evidence collection, and follow-up 
requirements of the Veterans Claims Assistance Act and other legal 
requirements.
    Steady improvement also continues as a result of the AMC's 
effective working relationships with many of the veterans service 
organizations (VSOs). The VSOs work directly with our decisionmakers 
and help reduce administrative waiting time. When the VSOs are 
satisfied that a case is ready to be certified back to BVA, they 
complete the necessary forms and assist us in getting the case back to 
the BVA for a final determination.
    The AMC's progress in improving the quality of remand processing is 
demonstrated by the reduction in the number of cases remanded a second 
time. Two years ago, approximately 35 percent of the cases certified to 
BVA by the AMC were again remanded to the AMC. Today, approximately 85 
percent of the cases certified to BVA by the AMC are accepted and 
finalized.
    The AMC remand inventory at the end of FY 2006 was 14,650. 
Currently, the inventory is 18,300. One of the reasons for the 
increased inventory is the increase in the number of remands received 
during the Fiscal Year. Last year the AMC received 15,008 remands, an 
average of 1,250 per month. Even with the reduced remand rate, we are 
this year receiving an average of 1,417 remands per month. In addition, 
because of VBA's increased disability claims workload, the three 
resource centers that had been assisting the AMC were redirected to 
supporting regional offices with high workload inventories.
    To address the remand workload, the AMC was authorized to increase 
its staffing level from 87 employees to 105 employees. These new 
employees have gone through centralized training and are now receiving 
training at the AMC. Many of our new hires will attain journey-level 
status toward the end of FY 2008 and will then be able to significantly 
contribute to remand production. The long-term impact of our hiring 
will be that the AMC will become self-sufficient, and will continue to 
improve both the timeliness and accuracy of remand processing.
Conclusion
    In summary, VBA has made a concentrated effort to improve appellate 
processing and focus on the remand workload by establishing a 
centralized processing center that establishes a core expertise in this 
area. The AMC is dedicated to properly and accurately assembling any 
evidence needed, as directed by BVA, in order to expeditiously process 
the remands. We believe we are moving in the right direction, and 
continuing efforts will allow us to significantly improve the appeals 
process for veterans.
    Mr. Chairman, this concludes my statement. I will be happy to 
respond to any questions that you or other Members of the Subcommittee 
might have.

                                 
          Prepared Statement of Hon. James P. Terry, Chairman,
    Board of Veterans' Appeals, U.S. Department of Veterans Affairs
    Good morning, Chairman Hall, Mr. Lamborn and Members of the 
Subcommittee. It is a pleasure to be here today to discuss with you the 
Board of Veterans' Appeals' (Board's) role in the VA benefits claims 
adjudication system. I will address Board productivity, the accuracy of 
our decisions, current issues affecting the Board, and a review of 
those actions we are taking to improve the claims and appeals 
adjudication process.
    The Board renders final decisions on behalf of the Secretary on all 
appeals of adverse decisions issued under a law that affects the 
provision of VA benefits. These appeals most commonly arise from 
decisions of VA regional offices, but also include those arising from 
decisions by VA medical centers. Although the Board is an appellate 
body, it has fact-finding authority and provides a fresh look at the 
law and evidence in each case it considers. In addition to ruling on 
the merits of a claim, the Board may direct further development of the 
evidence and readjudication of the claims at issue by the agency of 
original jurisdiction (AOJ) if it is necessary to fairly consider the 
appeal.
    The Board has jurisdiction over a wide variety of issues and 
matters, but the vast majority of appeals involve claims for disability 
compensation benefits, such as claims for service connection, an 
increased rating, or survivor's benefits, which were denied at the VA 
regional office (RO) level. The Board's objective is to produce well-
reasoned, accurate, timely, and fair appellate decisions in all the 
cases that come before us.
    As I testified last year before this Committee, two of the Board's 
most important initiatives are: (1) To contain and reduce the backlog 
of appeals by increasing decision productivity, while maintaining high 
quality; and (2) to improve timeliness and service to veterans by 
eliminating avoidable remands in order to issue more final decisions.
    I am happy to report that we have had much success in working 
toward both these goals, as demonstrated by comparing our past 
performance with that of recent years.
    In Fiscal Year (FY) 1994, the Board issued 22,045 decisions with 
442 full time equivalent employees (FTE). Our pending caseload stood at 
47,148, and was on its way to 60,000. By FY 1998, we had significantly 
improved our productivity by issuing 38,886 decisions and holding 4,875 
hearings, with 483 authorized FTE.
    Most recently, in FY 2006, the Board issued 39,076 decisions. We 
also conducted 9,158 hearings, the highest number ever by the Board, 
and almost twice as many hearings as in 1998. In 2007, we are on track 
to exceed both these figures.
    The Board's most significant challenge for the future is to 
eliminate the growing backlog. We will continue to use our resources as 
efficiently and effectively as possible to meet this challenge. 
However, despite our best efforts, we continue to receive more appeals 
than we are deciding. Cases pending at the start of FY 2006 stood at 
37,539, and by the beginning of FY 2007 rose to 40,265. This is despite 
the fact that the Board issued 4,901 more decisions in FY 2006 than in 
the previous year. We have already exceeded the FY 2006 total at this 
point in 2007.
    To enable the Board to eliminate the growing backlog, the two most 
important goals for the Board are to continue efforts to reduce 
avoidable remands and increase productivity. In regard to remands, we 
know that veterans want timely and correct decisions with respect to 
their claims for benefits. For the Board to do that, the record must 
contain all evidence necessary to decide the claim and show that all 
necessary procedural protections have been provided. If the record does 
not meet these requirements, and the benefits sought cannot be granted, 
a remand for further development by the AOJ is necessary.
    Remands significantly lengthen the amount of time it takes for a 
veteran to receive a final decision. A remand adds about a year to the 
appellate process. Remands not only delay individual cases, but divert 
resources from deciding new appeals. About 75 percent of cases remanded 
are returned to the Board, which increases our workload and further 
degrades timeliness. In addition, because by law we generally must 
decide the oldest cases first, processing of newer appeals is delayed 
when remanded appeals are returned to the Board for readjudication. 
Hence, eliminating avoidable remands is a goal that will provide better 
service to veterans and their families and, ultimately, will contribute 
to diminishing the growing backlog.
    Since FY 2005, when we began working concertedly with the Veterans 
Benefits Administration (VBA) to avoid remands to the extent possible, 
we have made great progress in reducing avoidable remands. To 
illustrate briefly, in FY 2003, the Board issued 31,397 decisions, with 
a remand rate of 42.6 percent. In FY 2004, while the number of 
decisions issued increased to 38,371, the remand rate soared to 56.8 
percent. In FY 2005, we issued 34,175 decisions of which 38.6 percent 
were remanded in whole or part. We are happy to report that in FY 2006, 
we issued 39,076 decisions, with a remand rate of only 32 percent. We 
have seen the remand rate hold its own during FY 2007, as we have 
produced more cases on appeal than a year before and will exceed 40,000 
decisions on appeal this Fiscal Year.
    By ``avoidable'' remands, we are referring to a class of cases in 
which a remand could have been avoided if the case was properly 
processed and reviewed in accordance with existing laws and 
regulations. It is important to note that under the current 
adjudication system a certain percentage of remands are expected for 
various reasons beyond VA's control. For example, some cases must be 
remanded to address intervening changes in the law, new medical 
evidence, changes in medical condition, or other due process 
considerations. On the other hand, some remands can be avoided by 
careful development of the record and application of the appropriate 
law, as well as close analysis of the record and consideration of a 
harmless error analysis.
    We continue to work closely not only with VBA, but with the Office 
of General Counsel (OGC) and the Veterans Health Administration (VHA) 
to identify and track the root causes of remands in order to provide 
training that will eliminate avoidable remands. Our training efforts 
have been considerable. Several training sessions on remand avoidance 
have been held for all Veterans Law Judges (VLJs) and staff counsel. We 
have also held joint training sessions with VBA, including a national 
video broadcast, on avoidable remands and evidence development. We have 
conducted numerous sessions on a variety of medical and legal subjects 
within our jurisdiction--all designed to reduce remands and improve 
quality. Additionally, each of our Travel Boards has met with regional 
office (RO) personnel to answer questions, conduct training, and/or 
discuss shared areas of concern. Finally, we have been working with VHA 
and VBA through the Compensation and Pension Examination Project (CPEP) 
to improve the quality of VA compensation medical examinations, which 
is reducing a major cause of remands.
    Another important challenge for the Board is to work closely with 
the 57 ROs and the Veterans Service Organizations to ensure that Travel 
Boards are dispatched as soon as a sufficient number of cases that are 
nearing their place on the Board's docket are ready for hearing. In 
2007, in addition to 114 scheduled Travel Boards, 12 unscheduled trips 
to San Antonio, Texas (3 trips); Seattle, Washington; New York City, 
New York; Atlanta, Georgia; Phoenix, Arizona; Cleveland, Ohio; 
Huntington, West Virginia; Albuquerque, New Mexico; Houston, Texas, and 
San Diego, California were added after the ROs provided notice that the 
docket was ready. The Board also expanded a scheduled Travel Board to 
St. Petersburg, Florida, from 1 week to 2 weeks at the request of the 
RO. These additions during the year resulted in a total of 126 Travel 
Boards for 2007. Of the 126 Travel Boards, 5 were combined trips which 
visited two ROs (Lincoln/Des Moines, Fargo/Sioux Falls, Ft. Harrison/
Boise, Denver/Cheyenne, and Togus/White River Junction). On the last 2 
days of each of our Travel Boards, we offer training and assistance by 
our staff attorneys to the RO adjudication staff. This is as much of a 
benefit to the Board as to the RO staff if it precludes one case from 
being returned to the RO from the Board via remand for further 
development.
    Although much has been done, we still have much to do in increasing 
productivity at the Board. Within existing resources, and by way of 
incentives and sound management, we will continue to improve by:

     1.  Eliminating avoidable remands;
     2.  Strengthening our intra-agency partnerships: Our joint 
training efforts with VBA, OGC, and VHA are improving decision quality 
and reducing remands;
     3.  Writing shorter and more concise decisions: We continue to 
train and encourage our VLJs and counsel to write clear, concise, 
coherent, and correct decisions;
     4.  Utilizing employee incentive, mentoring and training programs: 
A number of new programs have been introduced to increase employee 
motivation and satisfaction, as well as to increase productivity and 
decision quality;
     5.  Making judicious use of overtime: We will use overtime within 
existing resources to enhance productivity;
     6.  Increasing our use of paralegals: We will increase the use of 
our paralegals for non-decisional support activities, freeing up our 
legal staff to decide appeals;
     7.  Providing improved online legal research tools and analytical 
frameworks to aid timely and correct decision production;
     8.  Succession planning: The Board will continue its rigorous 
associate counsel recruitment program to hire the best and brightest 
attorneys available;
     9.  Improve quality: The Board will use its quality review process 
to identify areas of concern that require follow-up training;
    10.  VLJs will draft some decisions, in addition to reviewing and 
revising drafts prepared by staff counsel; and
    11.  Aggressive recruiting and training program to ensure full 
productivity by maintaining our authorized staffing levels.

    We believe these measures will reduce the backlog and shorten the 
time it takes for a veteran to receive a fair, well-reasoned Board 
decision. In addition to the Board's increases in productivity, we have 
also improved decision quality. In FY 2006, the Board's decision 
quality was 93 percent, based on 39,076 total decisions issued. We are 
proud to report that in FY 2007, not only will the Board increase its 
total decision output to over 40,000 cases, but the Board's decision 
quality will be maintained at over 93 percent. By decision quality, we 
mean that there were no substantive or procedural errors that would 
have resulted in the case being reversed or remanded to the Board by 
the United States Court of Appeals for Veterans Claims. Into the fourth 
quarter of FY 2007, we find that the enhanced decision quality of 93.4 
percent is being maintained.
    Although there was an increase in quality and quantity, the Board 
saw its pending caseload grow significantly in 2006 and 2007. As I 
briefly noted earlier, in addition to issuing 39,076 decisions in FY 
2006 and more than 40,000 projected for FY 2007, we conducted 9,158 
hearings in 2006 and expect to conduct more than 10,000 in 2007. This 
is the greatest number of hearings ever held by the Board. However, the 
number of cases pending before the Board at the beginning of FY 2007 
was 40,265, which was close to a 3,000 case increase over the 37,539 
cases that were pending at the beginning of FY 2006. This increase in 
pending cases occurred despite the increase in the number of decisions 
issued of nearly 5,000 in 2006 over 2005 and an even greater number of 
decisions issued this year than in 2006. By the end of this September, 
we expect to have about 28,500 cases with a pending request for a Board 
hearing. Of these cases, approximately 8,000 are actually ready for a 
hearing. Our 126 Travel Boards in FY 2007 have sharply reduced the 
number of pending hearings from 1 year ago.
    Although we continue to operate below a required personnel level, 
our attorneys and judges are ahead of last year's pace in terms of 
productivity. I attribute this increased productivity to superb 
leadership in each of our Decision Teams and in our Administrative 
support division, an unparalleled inhouse training and mentoring 
program, and to the quality of our support staff and the line attorneys 
that draft complex, quality decisions in an accurate and timely manner.
    As you know, we have high expectations for our counsel and Veterans 
Law Judges. We ask each of our counsel to write more than three 
complete draft decisions a week, and each of our line Judges to review, 
modify as necessary, and sign an average of at least 19 decisions a 
week. Over the course of the year, the Board's fair share standards 
call for our attorneys to complete a total of 156 timely decisions of 
high quality, and for each of our line Judges to complete and sign 752 
decisions. We are also concentrating on quickly dispatching the final 
decisions to the applicant and his or her representative through 
improved administrative processing. In addition, each Judge is expected 
to complete at least 3 week-long Travel Board trips per year, in which 
they hear cases at one of the 57 ROs and at several satellite offices. 
An experienced staff counsel accompanies the Judges during these Travel 
Board trips to assist in the conducting of the hearings and to provide 
training and other requested assistance to the RO staff.
    Finally, I would like to mention a new initiative directed by 
Secretary Nicholson that will greatly assist our timely resolution of 
new appeals. The Expedited Claims Adjudication Initiative, briefed to 
the staffs of the House and Senate Veterans' Affairs Committees earlier 
this year, and to VSO representatives as well, will offer an expedited 
process to represented claimants who desire to shorten the time 
required to process their claims. At four selected Regional Office 
locations (Philadelphia, Nashville, St. Paul and Seattle), the VBA and 
the Board will provide a 2 year model to streamline the claims 
adjudication and appeals process system-wide. A veteran who elects to 
participate in this program will be required to waive time periods not 
required to address his or her claim, and in return, will be placed on 
a fast track for adjudication. The rapid disposition of these claims 
will reduce the backlog and thereby ultimately improve the overall 
timeliness of claims processing. In addition, the pilot program will 
provide useful information on the efficacy of revising timelines in 
current law and regulation to establish a fair, but streamlined, claims 
adjudication process. The regulations required to effect this program 
through their publication in the Federal Register have been drafted and 
are now under Departmental review.
    In conclusion, we will continue working to develop new and creative 
solutions to the challenges we face in order to fulfill our statutory 
mission to hold hearings and provide timely, high quality decisions to 
our Nation's veterans and their families.
    I am pleased to answer any questions you or your colleagues may 
have.

                                 

                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Mr. Robert Chisholm
National Organization of Veterans Advocates
P.O. Box 65876
Washington, DC 20035

Dear Mr. Chisholm:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                        Questions for the Record
 Hearing on Board of Veterans Appeals and the Appeals Management Center
       Subcommittee on Disability Assistance and Memorial Affairs
                           September 25, 2007
                              Mr. Chisholm
    1.  We all know how it is difficult to retain attorneys here in 
Washington, DC. Why couldn't we place the board into satellite offices 
that could look at cases regionally? There may not be as much of a 
problem finding attorneys in other parts of the country and we all know 
that the space would be cheaper than downtown Washington, DC. What are 
your thoughts on this idea?

[THERE WAS NO RESPONSE RECEIVED FROM MR. CHISHOLM.]

                                 

                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Mr. Bart Stichman
National Veterans Legal Services Program
1600 K Street, Suite 500
Washington, DC 20003

Dear Mr. Stichman:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                        Questions for the Record
 Hearing on Board of Veterans Appeals and the Appeals Management Center
       Subcommittee on Disability Assistance and Memorial Affairs
                           September 25, 2007
                              Mr. Stichman
    1.  We all know how it is difficult to retain attorneys here in 
Washington, DC. Why couldn't we place the board into satellite offices 
that could look at cases regionally? There may not be as much of a 
problem finding attorneys in other parts of the country and we all know 
that the space would be cheaper than downtown Washington, DC. What are 
your thoughts on this idea?

[THERE WAS NO RESPONSE RECEIVED FROM MR. STICHMAN.]
                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Mr. Carl Blake
National Legislative Director
Paralyzed Veterans of America
801 18th Street, NW
Washington, DC 20006

Dear Mr. Blake:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                                      Paralyzed Veterans of America
                                               Washington, DC 20006
                                                   October 11, 2007

Honorable Doug Lamborn
Ranking Member
House Committee on Veterans' Affairs
Subcommittee on Disability Assistance and Memorial Affairs
335 Cannon House Office Building
Washington, DC 20515

Dear Ranking Member Lamborn:

    On behalf of Paralyzed Veterans of America (PVA), I would like to 
thank you again for the opportunity to testify before the House 
Committee on Veterans' Affairs, Subcommittee on Disability Assistance 
and Memorial Affairs on Tuesday, September 25, 2007.
    Following the hearing, you submitted additional questions as it 
regards this program. The attached document provides PVA's response to 
your further inquiry about the Board of Veterans' Appeals.
    PVA looks forward to working with you and Chairman Hall to ensure 
that any proposed changes to the operations of the Board of Veterans' 
Appeals and the Appeals Management Center are reasonable and beneficial 
to veterans and the system. Thank you again.

            Sincerely,
                                                         Carl Blake
                                      National Legislative Director

    Question 1: We all know how it is difficult to retain attorneys 
here in Washington, DC. Why couldn't we place the Board into satellite 
offices that could look at cases regionally? There may not be as much 
of a problem finding attorneys in other parts of the country and we all 
know that the space would be cheaper than downtown Washington, DC. What 
are your thoughts on this idea?

    Answer: First, we completely disagree with the initial assertion of 
your question. We do not believe that veterans have a hard time finding 
lawyers. That is not to say that veterans who present cases with no 
merit do not have problems finding lawyers. In fact, the Veterans 
Consortium Pro Bono program located here in Washington does not have 
problems finding lawyers to represent veterans before the Court of 
Appeals for Veterans Claims. As the Pro Bono Program has continued in 
its outreach activities, the number of attorneys from around the 
country interested in representing veterans has increased. Referrals 
are available via the usual pathways, such as legal aid and State Bar 
Associations as well as via the internet.
    PVA has long opposed the decentralization of the Board of Veterans' 
Appeals (BVA) each time Congress has raised the question in the past. 
Furthermore, we still disagree with the idea. BVA was decentralized 
early in its history. But decentralization results in greater 
inconsistency. The 73rd Congress, in P.L. Number 2, enabled the 
President to establish special boards to review veterans' claims. 
President Roosevelt created the BVA in 1933 via Executive Order 6230. 
Congress established the Board as a statutory body by statute in 1946. 
By housing BVA in the same building and sharing the same resources, 
consistency is improved over a decentralized system.
    We also believe other problems might arise from decentralizing the 
Board. First, because the people at BVA are a group, over time they 
develop similarities in their interpretations of rules and similarity 
in their understanding of certain medical issues, military history, 
jargon, and the historical background of certain regulations and 
administrative issues; thereby increasing consistency by this group-
think. Several years ago, BVA noticed that its four sections (BVA is 
divided into four sections by geographic jurisdiction) tended to 
develop a group-think internally within each section leading to 
decisions that tended to depend more on the section making the decision 
than the law or the evidence. BVA then began rotating staff into and 
out of the sections in order to develop more overall consistency. If 
the Board was physically divided, the possibility of developing a 
regional group-think is worse and therefore overall inconsistency 
greatly increases once again.
    Second, if the BVA is located at regional offices (RO), mission 
creep becomes a factor. In other words, BVA staff begins to perform 
tasks that support the mission of the RO in addition to their own 
mission. A centralized Board prevents the VA offices from pulling BVA 
staff away from their primary responsibility. BVA was quoted as saying, 
``it was felt that such actions [i.e., consultations with others within 
VA] were not consistent with the legislated judicial detachment and 
autonomy of the Board.'' \1\ Interaction between BVA staff and RO staff 
inevitably promotes mutual inter-dependence and reduces that detachment 
and autonomy.
---------------------------------------------------------------------------
    \1\ BVA, 50th Anniversary Pamphlet (1983).
---------------------------------------------------------------------------
    Third, a decentralized BVA would create a loss of economy of scale. 
If BVA is divided into several physical locations, expenditures would 
increase in order to pay for redundant office space, utilities, 
equipment, support staff, mail processing, and security. VA would also 
have much greater travel expenses to pay for in order to conduct 
centralized training events or manage conferences. Decentralized 
structure is simply not the way to save money on operations. In fact, 
prior studies of VA operations, such as the W.R. Grace Commission in 
the 1980s, have recommended reducing the number of VA offices in order 
to make more efficient use of available resources.
    Fourth, attorneys may interact with VA at a variety of locations 
and levels. BVA hearings are routinely conducted via a videoconference 
at the office or medical facility nearest to the veteran with the 
Veteran Law Judge sitting in D.C. Claim files are routinely transferred 
to VA offices for attorneys to review and are copied upon request. 
Accelerating the effort to move VA to an electronic claim record would 
greatly reduce the relevancy of where BVA is physically located.
    We therefore recommend that as attorneys approach the veteran 
arena, they should utilize educational opportunities, such as the 
Veterans Consortium Pro Bono Program and the Annual Conference of the 
U.S. Court of Appeals for Veterans Claims to become familiar with this 
area of law. Furthermore, we recommend that attorneys review the 
resources available on the Internet such as the webpage operated by The 
National Association of Veterans Advocates (NOVA), including their chat 
room. In this way, the pool of available attorneys competent in this 
area of law may grow.

                                 

                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Mr. Steve Smithson
The American Legion
10608 L Street, NW
Washington, DC 20006

Dear Mr. Smithson:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                        Questions for the Record
Hearing on Board of Veterans' Appeals and the Appeals Management Center
       Subcommittee on Disability Assistance and Memorial Affairs
                           September 25, 2007
                              Mr. Smithson
    1.  We all know how it is difficult to retain attorneys here in 
Washington, DC. Why couldn't we place the Board into satellite offices 
that could look at cases regionally? There may not be as much of a 
problem finding attorneys in other parts of the country and we all know 
that space would be cheaper than downtown Washington, DC. What are your 
thoughts on this idea?

    Response: The American Legion is not aware of any specific problems 
the BVA is having with finding or retaining attorneys related to the 
location of the Board in Washington, DC. The Legion would, however, be 
happy to review any relevant data you have pertaining to this issue. 
The production pressure on BVA attorneys caused by the increasing 
number of appeals will be a constant no matter where the Board is 
located. There are both pros and cons to having the BVA located in 
Washington, DC, but it is the opinion of The American Legion that any 
disadvantage to having the BVA in Washington, DC, is outweighed by the 
advantage of having a centrally located BVA in proximity to VA Central 
Office. Additionally, having the BVA located in Washington, DC, creates 
a barrier between BVA and the VA regional offices, helping to establish 
the BVA as a separate entity independent of the regional offices. 
Moreover, there is nothing to suggest that creating satellite regional 
BVA offices would improve the quality of the BVA work product. Moving 
the BVA to the ``field'' closer to VA regional offices, however, could 
adversely impact its independent identity and cause an increased number 
of inconsistent BVA adjudications.

                                 

                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Mr. Eric A. Hilleman
Deputy Director
Legislative Affairs Office
Veterans of Foreign Wars of the United States
200 Maryland Ave, NE
Washington, DC 20002

Dear Mr. Hilleman:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                        Questions for the Record
Hearing on Board of Veterans' Appeals and the Appeals Management Center
       Subcommittee on Disability Assistance and Memorial Affairs
                           September 25, 2007
                            Eric A. Hilleman
Question

    We all know how it is difficult to retain attorneys here in 
Washington, DC. Why couldn't we place the board into satellite offices 
that could look at cases regionally? There may not be as much of a 
problem finding attorneys in other parts of the country and we all know 
that the space would be cheaper than downtown Washington, DC. What are 
your thoughts on this idea?
Response
    With 276 attorneys for every 10,000 residents \1\ the last thing 
Washington, DC has is a shortage of lawyers. The difficulty of 
recruiting and retaining qualified attorneys, if such difficulty 
exists, does not stem from the lack of attorneys but, rather, from the 
inadequacy of the pay and, probably more relevant, the nature of the 
work and extremely high caseloads.
---------------------------------------------------------------------------
    \1\ Avery Index; http:\\www.averyindex.com/lawyers_per_capita.php
---------------------------------------------------------------------------
    The idea of breaking up the BVA and sprinkling Veteran Law Judges, 
with supporting staff and clerical assistance, like flower seeds across 
the countryside has been around for years. Simply moving Board sections 
out of Washington will only ensure that Board sections have been moved 
out of Washington. The largest VA regional offices are currently 
located in St. Petersburg, FL, New York City, Houston, Chicago, Los 
Angeles and San Francisco. The cost of living in New York, Los Angeles 
and San Francisco is higher than it is here in Washington, while the 
number of available attorneys is less than 1/10th that of Washington, 
suggesting that competition in those cities would be more, not less, 
intense than it is here.
    While the cost of living in St. Petersburg, Houston and Chicago may 
be less than Washington, the competition for available lawyers would, 
in our view, remain problematic.
    Other problems would stem from the break-up of the BVA.

      Loss of economies of scale
        Clerical staff would increase
        Training of staff attorneys and support staff becomes 
more difficult and less efficient
        Training would become less uniform and more fragmented
        Increased difficulty in responding to staffing 
imbalances
        Travel expenses for Travel Board hearings could 
actually increase in some areas
      Depending on the location of the Boards, office space 
could cost more than Washington, DC
      Personal hearings would likely increase since travel to 
regionalized Boards would be less expensive for some appellants

    Why is the creation of a second AMC site away from Washington 
desirable when breaking up and relocating the BVA is not?
    The fundamental difference in these proposals lies in the source of 
the highly trained employees needed by VA to process either BVA appeals 
or AMC remands. In the case of the BVA, the source of employees is 
those admitted to practice law. As pointed out above, there are over 10 
times as many lawyers available in Washington, DC, as there are 
anywhere else.
    However, the Appeals Management Center requires trained and skilled 
Veterans Service Representatives with both adjudication and rating 
specialization. There is no source of trained VSR's in Washington. 
Consequently, every new VSR must be trained in a regional office 
somewhere far from Washington and enticed to move here. Even with the 
occasional relocation bonus, VA has found it extremely difficult to 
recruit VSR's for work in Washington. It is based on these facts that 
we propose the recreation of an AMC in a medium sized city where the 
cost of living was reasonable and VA would be a major, or at least 
competitive, employer. Those factors would allow VA to recruit more 
VSR's than they can today with the lure of an additional pay grade.
    The proposal to regionalize the BVA is an interesting concept. 
However, we do not believe that it would be any more effective in 
solving an attorney recruitment and retention problem. At the same 
time, we believe that additional problems would be created which would 
aggravate, not resolve, the number of cases pending at the BVA.
    We suggest that if recruitment of staff attorneys is a problem, 
then VA should use its authority to grant recruitment and retention 
bonuses, augmenting salaries by 10 or 15 percent.

                                 

                                     Committee on Veterans' Affairs
         Subcommittee on Disability Assistance and Memorial Affairs
                                                    Washington, DC.
                                                    October 1, 2007

Honorable James Terry
Chairman, Board of Veterans' Appeals
810 Vermont Ave, NW
Washington, DC 20430

Dear Chairman Terry:

    Thank you for testifying before the House Committee on Veterans' 
Affairs Subcommittee on Disability Assistance and Memorial Affairs 
hearing on the Board of Veterans' Appeals and the Appeals Management 
Center.
    I am submitting additional questions to be included in the hearing 
record. I would appreciate your response to the enclosed additional 
questions for the record by close of business October 15, 2007.
    Please restate the question in its entirety and please provide your 
answers consecutively on letter size paper, single spaced.
    Thank you for your consideration in this matter.

            Sincerely,
                                                       Doug Lamborn
                                          Ranking Republican Member

                                 ______
                                 

                        Questions for the Record
 Hearing on Board of Veterans Appeals and the Appeals Management Center
       Subcommittee on Disability Assistance and Memorial Affairs
                           September 25, 2007
                         Honorable James Terry
    Question 1: What type of training programs does the Board use for 
new employees? Also, what type of training exists for current employees 
to ensure their continued accuracy in decisions?

    Response: The Board of Veterans' Appeals (BVA) provides the 
following training on both legal and medical matters to all new staff 
counsel:

      Introduction to the Board of Veterans' Appeals (BVA 
101)--This introduces new employees to the structure, operations and 
policies of BVA. 2-hour course.
      Basic Veterans' Law (BVA 201)--This is an introduction to 
the law of the U.S. Court of Appeals for Veterans Claims and the 
relevant rulings of the U.S. Court of Appeals for the Federal Circuit. 
12-hour course.
      Computer Skills Training (CST)--This provides computer 
information and tips to enable more efficient drafting of decisions 
using BVA's computer system. 1-hour course.
      Global Training--This provides an overview of BVA's 
management and administration process. Attorneys have the opportunity 
to learn firsthand about the journey of a case file once it is received 
at the Board. 3-hour course.
      Mentoring--This is a 3-month period where the attorney is 
tutored on all aspects of decision preparation by a senior BVA counsel.
      Adjudication Academy--This is a 2-day offsite 
collaborative effort by the Veterans Health Administration (VHA), 
Veterans Benefit Administration (VBA) and the Office of General Counsel 
to provide new BVA attorneys an opportunity to learn about the role 
these administrations have in the adjudication process. This course is 
conducted approximately once a year in Baltimore.

    BVA's four decision teams schedule internal team training events 
for new attorney staff and summer interns on an ``as needed'' basis. 
During 2006 and 2007, the teams provided training on a wide variety of 
topics, including the Veterans Claims Assistance Act (VCM) and basic 
service connection concepts; increased ratings; quality reviews; 
handling of multi issues/complex cases; efficient handling of cases; 
career development; hearing loss; personal experiences of BVA veterans; 
research tools; a presentation by Disabled American Veterans national 
veterans service organization representatives; conducting BVA hearings; 
medical opinion requests; BVA rules of practice and procedure; BVA 
handbooks; and VA benefits overview.
    BVA also devotes a substantial amount of time and resources to 
providing training to our veterans law judges (VLJs) and staff counsel. 
Besides VA-wide periodic training on cyber security, the Privacy Act, 
the No FEAR Act, sexual harassment, and Federal ethics requirements, a 
wide variety of training is provided to enable BVA to produce high-
quality decisions in a timely manner. BVA has a full-time training 
coordinator who, in close coordination with BVA's Chief Counsel for 
Policy, is responsible for scheduling and organizing BVA training 
events, which usually average about twice a month. Training on various 
topics related to computer-assisted legal research also is periodically 
scheduled by BVA's librarian. Additionally, the BVA sends individually 
selected employees to management and leadership training courses 
provided by the Office of Personnel Management and the Federal 
Executive Institute.
    With respect to BVA training provided to VLJs and attorneys, it can 
be broken down into the following five categories: 1) critical skills 
training; 2) current issues and competency training; 3) specialized 
skills training; 4) leadership/management development training; and 5) 
mandatory training. Examples of training provided within each of these 
categories include:
Critical Skills Training
      Writing Training--Periodically provided to upgrade 
writing skills. At the beginning of 2006, BVA initiated a writing 
skills program entitled the ``4-Cs,'' short for clear, concise, 
coherent, and correct decision writing. This training addressed a 
number of matters, including the increasing length of BVA decisions 
due, in part, to long recitations of fact and boilerplate summaries of 
the law, and reasons or bases deficiencies in BVA decisions.
      Legal Research--Initial training is offered to new 
employees and product upgrade/enhancement training is offered on an 
ongoing basis to the entire attorney and VLJ staff concerning the use 
of computer-assisted legal research tools.
Current Issues and Competency Training
      Educational Seminars--Seminars of a medical and legal 
nature are offered monthly (approximately 10 per year) and range in 
length from 1-hour to an hour and a half. Participation is voluntary. 
Examples of some recent topics covered are: adjudicating Gulf War 
claims; rating residuals of gunshot wounds; adjudicating medical 
reimbursement claims; rating eye disorders; understanding military 
records and awards; adjudicating Section 1151 claims; adjudicating 
Section 1318 claims; aggravation of disabilities, rating disabilities 
of the spine, evaluation of lay evidence, presumptive service 
connection, and introduction to medical terminology.
      Grand Rounds--Periodic Grand Rounds training sessions are 
provided for all VLJs and staff counsel. Attendance is required. The 
purpose of these training sessions is to keep the legal staff current 
with continuing changes in the law, to address areas of weakness in BVA 
decision quality, and to address current ``hot'' issues.
Specialized Skills Training
      Income Verification Match--This is required for selected 
attorneys and VLJs who handle cases that include protected tax 
information.
Leadership/Management Development Training
      Office of Personnel Management
      Federal Executive Institute
      Leadership VA
      VA Learning University sponsored leadership training
Mandatory Training
      Privacy Policy
      Cyber Security Awareness
      Federal Employee Antidiscrimination and Retaliation Act 
(No FEAR)
      Prevention of Sexual Harassment
      Ethics

    Question 2: You stated in your testimony that on the last two days 
of the traveling board your staff attorneys give training and 
assistance to regional office staff. Is this training standardized and 
how is it administered?

    Response: With respect to BVA's participation in regional office 
training, BVA conducts training for regional office (RO) adjudication 
staff both during travel board visits and by way of videoconference. 
Over the past few years, we have conducted numerous such sessions of 
varying length on a variety of medical and legal subjects designed to 
reduce remands and improve quality.
    During travel board trips, the attorney staff who are sent to 
assist the VLJs, as well as some of the VLJs, meet with RO staff to 
answer questions, discuss shared areas of concern, and provide training 
when requested. Such interactions are mutually beneficial to both 
organizations in reducing remands and ensuring cases are fully and 
properly developed and processed.
    Prior to a travel board, the attorney assigned to the trip contacts 
the RO to determine possible formal training topics and to offer 
informal training and assistance. Based on the reports received from 
travel boards conducted during fiscal 2007, BVA attorneys have provided 
informal training to the RO staff during 116 of the 123 travel boards. 
Informal training consists of case reviews, determinations of adequacy 
of development, recent U.S. Court of Appeals for Veterans Claims (CAVC) 
cases, trends noticed in hearing cases, and tips to reduce avoidable 
remands. Informal training is usually provided on a one-on-one basis 
with rating veterans' service representatives, decision review 
officers, and adjudication managers. Formal training, on the other 
hand, was provided during 76 of the 116 trips, or 66 percent of the 
time. While training topics vary, the most common topics addressed by 
BVA staff this year were matters related to post traumatic stress 
disorder (PTSD) service connection claims, VCAA notification, when a VA 
examination is required, and the discussion of recent CAVC decisions. A 
complete list of the training topics addressed and at particular ROs is 
attached.
    For purposes of comparison, based on the reports received from 
travel boards conducted during fiscal 2006 that were BVA attorneys 
provided informal training during 109 of the 114 travel boards trips. 
With respect to formal training, this occurred during 62 of the 109 
trips, or 57 percent of the time. The most common training topics 
addressed were PTSD service connection claims, VCAA notification, 
discussion of recent CAVC decisions (Kent, Dingess, Haas), when a VA 
examination is needed, application of the presumptions of aggravation 
and soundness, and assignment of effective dates. A complete list of 
the training topics addressed and at which particular ROs is attached.
    Besides training conducted during travel board trips, BVA also 
provides training to the ROs by way of videoconference. This training 
is conducted by BVA's four decision teams to ROs located in that team's 
geographic region of the country. This type of training was conducted 
fairly frequently in the past, but less so in recent years. However, 
the BVA has recently started to see an upswing in the number of 
requests being received from RO staff to conduct this type of training. 
During fiscal 2006 and 2007, the following training has been conducted:


--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
July 2006                                             Decision tree for rating knee disabilities (New Orleans, Little Rock,
                                          Jackson, Atlanta, Montgomery, St. Petersburg, Nashville and San Juan)
----------------------------------------------------------------------------------------------------------------
July 2006                                                                                                      Local reasons for remand trends (Louisville)
----------------------------------------------------------------------------------------------------------------
August 2006                              New and material evidence, Kent VCAA notice, and clear and unmistakable
                                                                                              error. (Hartford)
----------------------------------------------------------------------------------------------------------------
September 2006                                                      Evaluating back disabilities (New Orleans, Little Rock, Jackson,
                                               Atlanta, Montgomery, St. Pete and San Juan) (Nashville--training
                                                                                                materials only)
----------------------------------------------------------------------------------------------------------------
September 2006                                      Medical examinations and opinions; rating knee disabilities
                                                                                                              (Louisville)
----------------------------------------------------------------------------------------------------------------
October 2006                             Adjudicating Nehmer claims (New Orleans, Jackson, St. Pete, Montgomery,
                                         Atlanta, and San Juan) (Jackson and Nashville--training materials only)
----------------------------------------------------------------------------------------------------------------
October 2006                                                                  Earlier effective dates (Houston)
----------------------------------------------------------------------------------------------------------------
November 2006                                VCAA duty to notify; duty to assist--obtaining medical and service
                                            records; due process issues; requesting VA examinations (San Diego)
----------------------------------------------------------------------------------------------------------------
December 2006                                                                       Questions & answers (Boise)
----------------------------------------------------------------------------------------------------------------
December 2006                                                                             Evaluating evidence (Louisville)
----------------------------------------------------------------------------------------------------------------
January 2007                             VA medical examinations and opinions (St. Pete, New Orleans, San Juan,
                                                  Montgomery, and Atlanta) (Nashville--training materials only)
----------------------------------------------------------------------------------------------------------------
January 2007                                    Special monthly compensation; competency and credibility of lay
                                           statements; VCAA duty to notify; local reasons for remand trends; VA
                                                                                    medical examinations (Salt Lake City)
----------------------------------------------------------------------------------------------------------------
February 2007                                                            VA medical examinations and opinions (Little Rock)
----------------------------------------------------------------------------------------------------------------
February 2007                                    Earlier effective dates; VA medical examinations and opinions;
                                              secondary service connection claims, including for alcohol abuse;
                                         service connection for ``tension type'' headaches; benefit of the doubt/
                                                                            reasonable doubt standard (Phoenix)
----------------------------------------------------------------------------------------------------------------
March 2007                               VA medical examinations and opinions (Jackson--awaiting delivery of new
                                                                                                     equipment)
----------------------------------------------------------------------------------------------------------------
March 2007                                       Rating skin disorders; periodontal disease; claims for service
                                         connection based on aggravation; adjudicating new and material evidence
                                                   claims; weighing non-medical evidence when rating mental and
                                          musculoskeletal disorders; VA medical examinations and opinions; duty
                                                           to assist/additional records requests (Ft. Harrison)
----------------------------------------------------------------------------------------------------------------
April/May 2007                                                  Weighing and evaluating evidence (New Orleans, Little Rock, Jackson,
                                                         Atlanta, Montgomery, St. Pete, Nashville and San Juan)
----------------------------------------------------------------------------------------------------------------
May 2007                                                                            New and material evidence (Louisville)
----------------------------------------------------------------------------------------------------------------
May 2007                                      Common reasons for remand; Haas v. Nicholson; when to obtain a VA
                                                examination; when to issue a supplemental statement of the case
                                                                                               (Seattle, Boise)
----------------------------------------------------------------------------------------------------------------
May/June 2007                            VA examinations; what is the proper way of requesting a VA examination/
                                         opinion; VA examinations--duty to assist for service connection claims;
                                         VA examinations--duty to assist for increased rating claims; discussion
                                                                                                          of McLendon v. Nicholson, 20 Vet. App. 79 (2006) (Newark, Boston,
                                             Buffalo, Providence, Columbia, Togus, Baltimore, Roanoke, Winston-
                                                 Salem, Huntington, New York, Pittsburgh, Hartford, Manchester)
----------------------------------------------------------------------------------------------------------------
June 2007                                 Aggravation of disabilities; presumption of soundness; presumption of
                                         aggravation; 38 C.F.R. 3.310; application of Allen v. Brown (Hartford,
                                                                  Columbia, Boston, Buffalo, Baltimore, Newark)
----------------------------------------------------------------------------------------------------------------
June 2007                                Common reasons for remand; McClendon v. Nicholson; development of PTSD/
                                                                                        sexual assault claims (Los Angeles, San Diego)
----------------------------------------------------------------------------------------------------------------
July 2007                                                    Rating gunshot wound residuals (Denver, San Diego)
----------------------------------------------------------------------------------------------------------------
August 2007                                   PTSD stressors for Iraq veterans; impact of Pentecost v. Principi
                                                (White River Junction, New York, Manchester, Hartford, Buffalo,
                                                                                  Philadelphia, Newark, Boston)
----------------------------------------------------------------------------------------------------------------
September 2007                                                                       Rating back disabilities (Louisville)
----------------------------------------------------------------------------------------------------------------
September 2007                                                            Rating gunshot wound residuals (Salt Lake City, Anchorage, Oakland,
                                                                                                    Sacramento)
----------------------------------------------------------------------------------------------------------------


    Finally, besides the training that is provided during travel board 
trips and by way of videoconference, BVA regularly responds to informal 
requests received from RO staff for our views and suggestions on a wide 
variety of case-related legal and medical Issues.

    Question 3: We all know how it is difficult to retain attorneys 
here in Washington, DC. Why couldn't we place the board into satellite 
offices that could look at cases regionally? There may not be as much 
of a problem finding attorneys in other parts of the country and we all 
know that space would be cheaper than downtown Washington, DC. What are 
your thoughts on this idea?

    Response: Our ability to obtain or retain attorneys has not been 
impaired by our location in Washington, DC. To the contrary, we believe 
our location in Washington, DC, enhances our ability to draw from an 
extremely well-qualified attorney applicant pool. Our recent efforts to 
fill attorney positions illustrate this point. When we advertised for 
30 attorney positions this summer, we received over 350 applications, 
most from highly qualified candidates. We were in the enviable position 
of being able to offer employment to only the most highly-qualified 
applicants.
    The question as to whether to regionalize BVA into satellite 
offices has been thoroughly considered in the past, most recently by 
the Government Accountability Office (GAO) in 2003. While the GAO did 
not issue a final report of this study, its research indicated that the 
difficulties associated with the decentralization process far outweigh 
the benefits of regionalization.
    Because BVA is centralized at a single office in Washington, DC, 
BVA:

      Recruits from a pool of highly qualified attorneys and 
administrative professionals, while retaining some of our most highly 
qualified employees, who would be unwilling or unable to relocate if 
regionalization were to occur;
      Instantly communicates and discusses important legal and 
administrative issues with our judges, counsel and administrative 
staff, ensuring consistency of decisionmaking and administrative 
processes, such as the mailing of decisions;
      Maintains collegiality of, and uniform and consistent 
training for, our attorneys and judges;
      Achieves economies of scale from centralized resources to 
realize the most efficient workload distribution, as well as the 
flexibility to immediately readjust work flow as necessary to achieve 
optimum performance;
      Achieves the most efficient and cost-effective mechanisms 
for case and hearing management, while avoiding the costs and risks 
associated with file transfers to remote locations;
      Achieves the most efficient and beneficial use of 
professional and administrative employees, as well as the best means to 
ensure uniform opportunities for employee development and training;
      Preserves our independence and integrity as a quasi-
judicial body, which would be compromised if we were co-located with 
the offices whose decisions we review on appeal.

    With respect to your concerns about the availability of affordable 
work space in Washington, DC, the Department has expanded BVA's 
allocation of office space in the Lafayette Building, where the BVA has 
been located for many years. The Department is considering a further 
expansion of space in the near future. In addition, BVA has maintained 
a highly successful Flexiplace program, which allows up to 88 employees 
to work at home for part of the week and to use shared space on the 
alternate days that they are in the office. This ``hoteling'' 
arrangement maximizes the use of existing space, improves employee 
morale, contributes to reducing the commuting burden in the local area, 
but still ensures the effective accomplishment of our mission.