[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]



 
                     EXAMINING QUALITY OF LIFE AND


                       ANCILLARY BENEFITS ISSUES

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


                                HEARING

                               before the

               SUBCOMMITTEE ON DISABILITY ASSISTANCE AND
                            MEMORIAL AFFAIRS

                                 of the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 23, 2009

                               __________

                           Serial No. 111-37

                               __________

       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     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

       SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS

                    JOHN J. HALL, New York, Chairman

DEBORAH L. HALVORSON, Illinois       DOUG LAMBORN, Colorado, Ranking
JOE DONNELLY, Indiana                JEFF MILLER, Florida
CIRO D. RODRIGUEZ, Texas             BRIAN P. BILBRAY, California
ANN KIRKPATRICK, Arizona

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 
further refined.


                            C O N T E N T S

                               __________

                             July 23, 2009

                                                                   Page
Examining Quality of Life and Ancillary Benefits Issues..........     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    34
Hon. Doug Lamborn, Ranking Republican Member, prepared statement 
  of.............................................................    35

                               WITNESSES

U.S. Department of Veterans Affairs, Bradley G. Mayes, Director, 
  Compensation and Pension Service, Veterans Benefits 
  Administration.................................................    26
    Prepared statement of Mr. Mayes..............................    66

                                 ______

Blinded Veterans Association, Thomas Zampieri, Ph.D., Director of 
  Government Relations...........................................     6
    Prepared statement of Dr. Zampieri...........................    40
Bristow, Lonnie, M.D., Chair, Committee on Medical Evaluation of 
  Veterans for Disability Benefits, Board on the Health of Select 
  Populations, Institute of Medicine, The National Academies.....    11
    Prepared statement of Dr. Bristow............................    44
Economic Systems Inc., Falls Church, VA, George Kettner, Ph.D., 
  President......................................................    13
    Prepared statement of Dr. Kettner............................    46
National Organization on Disability, Carol A. Glazer, President..    17
    Prepared statement of Ms. Glazer.............................    57
National Veterans Legal Services Program, Ronald B. Abrams, Joint 
  Executive Director.............................................     5
    Prepared statement of Mr. Abrams.............................    39
Paralyzed Veterans of America, Carl Blake, National Legislative 
  Director.......................................................     3
    Prepared statement of Mr. Blake..............................    35
Quality of Life Foundation, Woodbridge, VA, Kimberly D. Munoz, 
  Executive Director.............................................    15
    Prepared statement of Ms. Munoz..............................    54

                       SUBMISSIONS FOR THE RECORD

Sarah Wade, Chapel Hill, NC, statement...........................    70

                   MATERIAL SUBMITTED FOR THE RECORD

George Kettner, Ph.D., President, Economic Systems Inc., to Hon. 
  John J. Hall, Chairman, Subcommittee on Disability Assistance 
  and Memorial Affairs, Committee on Veterans' Affairs, letter 
  dated July 27, 2009, and attached Extension of Remarks.........    73
Bradley G. Mayes, Director, Compensation and Pension Service, 
  Veterans Benefits Administration, U.S. Department of Veterans 
  Affairs, Fast Letter 09-33, to Director, All VA Regional 
  Offices and Centers, regarding Special Monthly Compensation at 
  the Statutory Housebound Rate, dated July 22, 2009.............    74


        EXAMINING QUALITY OF LIFE AND ANCILLARY BENEFITS ISSUES

                              ----------                              


                        THURSDAY, JULY 23, 2009

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

    The Subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. John Hall 
[Chairman of the Subcommittee] presiding.

    Present: Representatives Hall and Lamborn.
    Mr. Hall. Good morning, ladies and gentlemen. The Veterans' 
Affairs Disability Assistance and Memorial Affairs Subcommittee 
hearing on Examining Ancillary Benefits and Veterans' Quality 
of Life (QOL) Issues will now come to order.
    I would ask that we all rise for the Pledge of Allegiance.
    [Pledge of Allegiance.]
    Mr. Hall. Thank you very much.
    I am going to defer my statement until after Congressman 
Lamborn, our Ranking Member, makes his because he has a double 
booking and needs to leave to take care of that business.
    So, Mr. Lamborn, you are recognized.
    Mr. Lamborn. Yes. Thank you, Mr. Chairman, for taking me 
out of order. And I will submit my statement for the record.
    I wish I could be in two places at once. This is a vital 
topic. But since I cannot, I am going to have to be here only 
momentarily so that we can have the quorum and start the 
meeting officially.
    I do look forward to hearing the written comments from each 
witness and I will be looking at those.
    Thank you and I know it will be a good hearing.
    [The prepared statement of Congressman Lamborn appears on 
p. 35.]

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Thank you, Mr. Lamborn.
    This Subcommittee has actively tackled many complex and 
complicated issues that have been encumbering the Veterans 
Benefits Administration (VBA) and its ability to properly 
compensate veterans who file disability claims.
    These issues have centered on U.S. Department of Veterans 
Affairs (VA) business processes and operations. Today's hearing 
will focus on the actual appropriateness of available benefits 
in meeting the needs of disabled veterans and their families.
    The expressed purpose of VA disability compensation as 
outlined in law (38 U.S.C. Sec. 1151) is based upon the average 
impairment of earning capacity. This concept dates back to the 
1921 rating schedule which had its roots in the then blossoming 
Workmen's Compensation Program.
    Then, the primary concern was to ensure that the disabled 
World War I veterans would not become a burden on their 
families or communities when they could no longer perform the 
laborious tasks most civilian occupations required at that 
time.
    Over the years, Congress has added several elements to the 
VA compensation package to assist disabled veterans in 
procuring shelter, clothing, automotive, employment, vocational 
rehabilitation, and in-home assistance.
    In its expansion of these benefits, Congress has attempted 
to meet disabled veterans' and their families' social and 
adaptive needs and not solely their economic needs.
    More recently, several commissions and institutions, a few 
of whose members we will hear from today, have studied the 
appropriateness of VA benefits, including a potential quality 
of life loss payment.
    They have identified significant challenges in developing 
an instrument or rating schedule that could fairly calculate 
compensation for the loss of quality of life.
    Much of what makes a life of quality is subjective and goes 
beyond fulfilling basic human needs or replacing impaired 
income.
    Furthermore, I realize that there is no amount of money 
that can replace a limb or peace of mind. Ensuring that 
veterans impaired by amputation, blindness, deafness, brain 
injury, paralysis, and emotional distress are afforded the 
necessary resources to lead productive, satisfying lives is the 
debt a grateful Nation owes these brave souls.
    VA has, in fact, attempted to recognize that in order to 
make some veterans whole, there is a need to provide additional 
compensation that accounts for noneconomic factors, including 
personal inconvenience, social inadaptability, and the 
profoundness of their disability.
    Part of the problem may be that the formula and criteria 
used for adjudicating VA ancillary benefits and special monthly 
compensation is complex and often confusing to the 
beneficiaries themselves. Oftentimes disabled veterans are 
unsure of this added benefit, which leads to an inability to 
predict or plan for their future based on their VA assistance.
    Without transparency, transitioning wounded warriors are at 
a severe disadvantage if they cannot count on and predict their 
VA benefits package. Having this knowledge could be a big help 
to these veterans and more transparency and outreach is 
definitely needed in the ancillary benefits area.
    I am eager to hear from today's witnesses, many of whom are 
experts in the complexities and paradigms for compensating 
military-related disabilities.
    I am also eager to hear from VA on its late-delivered VBA 
response to the Economic Systems (EconSys) quality of life, 
earnings loss, and transition payment study, which was mandated 
in section 213 of Public Law 110-389.
    Our veterans must be returned to their country, 
communities, and homes with the tools and resources to rebuild 
a life of quality.
    So as we go forward, I once again remind all of our 
panelists that your complete written statements have been made 
a part of the hearing record. Please limit your remarks to 5 
minutes so that we may have sufficient time to follow-up with 
questions once all of our witnesses have had the opportunity to 
testify.
    On our first panel, which I would call now to the table, is 
Mr. Carl Blake, National Legislative Director for Paralyzed 
Veterans of America (PVA); Mr. Ronald B. Abrams, Joint 
Executive Director for National Veterans Legal Services Program 
(NVLSP); and Mr. Thomas Zampieri, Ph.D., Director of Government 
Relations for Blinded Veterans Association (BVA).
    Welcome, Mr. Blake, Mr. Abrams, and Mr. Zampieri. It is 
good to see you all again. Thank you for coming to testify 
before us.
    Mr. Blake, you are now recognized for 5 minutes.
    [The prepared statement of Chairman Hall appears on p. 34.]

   STATEMENTS OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, 
    PARALYZED VETERANS OF AMERICA; RONALD B. ABRAMS, JOINT 
 EXECUTIVE DIRECTOR, NATIONAL VETERANS LEGAL SERVICES PROGRAM; 
 AND THOMAS ZAMPIERI, PH.D., DIRECTOR OF GOVERNMENT RELATIONS, 
                  BLINDED VETERANS ASSOCIATION

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman.
    Mr. Chairman, Members of the Subcommittee, on behalf of 
Paralyzed Veterans of America, I would like to thank you for 
the opportunity to testify today on what we consider a very 
important topic, particularly for PVA's membership, that being 
ancillary benefits and quality of life issues.
    PVA members represent one of the segments of the veteran 
population that benefit most from the many ancillary benefits 
provided by the VA. Without the provision of benefits such as 
special monthly compensation or SMC, specially adapted housing 
grant, and the clothing allowance, our members and other 
severely disabled veterans would experience a much lower 
quality of life and would in many cases be unable to live 
independently.
    Special monthly compensation represents payments for 
quality of life issues such as loss of an eye or limb, the 
inability to naturally control bowel and bladder function, or 
the need to rely on others for the activities of daily living 
like bathing or eating.
    To be clear, given the extreme nature of the disabilities 
incurred by most veterans in receipt of SMC, we do not believe 
that the impact on quality of life can be totally compensated 
for. However, SMC does at least offset some of the loss of 
quality of life.
    PVA believes that an increase in SMC benefits is essential 
for our veterans with severe disabilities. Many severely 
injured veterans do not have the means to function in an 
independent setting and need intensive care on a daily basis.
    To support our recommendation, we encourage the 
Subcommittee to review the recommendations of the Veterans' 
Disability Benefits Commission (VDBC) report.
    One of the most important SMC benefits to PVA is aid and 
attendance. PVA would also like to recommend that aid and 
attendance benefits be appropriately increased. Attendant care 
is very expensive and often the aid and attendance benefits 
provided to eligible veterans do not cover this cost.
    In accordance with the recommendations of the Independent 
Budget (IB), PVA also believes that there are some necessary 
improvements in the Service Disabled Veterans' Insurance (S-
DVI) and Veterans' Mortgage Life Insurance (VMLI) programs.
    We recently supported legislation considered by this 
Subcommittee, H.R. 2713, that would increase the maximum amount 
of protection from $10,000 to $100,000 and would increase the 
supplemental insurance for totally disabled veterans from 
$20,000 to $50,000.
    Ultimately, we would like to see the Subcommittee consider 
legislation that would increase S-DVI to the maximum benefit 
level provided by the Servicemembers' Group Life Insurance 
(SGLI) and Veterans' Group Life Insurance (VGLI) programs.
    The Independent Budget also recommends that VMLI, veterans 
mortgage life insurance, be increased from the current benefit 
of $90,000 to $150,000. The last time VMLI was increased was in 
1992. Since that time, housing costs have risen dramatically, 
but the VMLI benefit has not kept pace. As a result, many 
catastrophically disabled veterans have mortgages that exceed 
the maximum value of VMLI.
    Recent hearings have demonstrated how far behind the VBA is 
in using information technology in its claims adjudication 
process. While we believe that the entire claims process cannot 
be automated, there are many aspects and steps that certainly 
can.
    We have long complained to the VA that it makes no sense 
for severely disabled veterans to separately apply for the many 
ancillary benefits to which they are entitled. Their service-
connected rating immediately establishes eligibility for such 
benefits as the specially adapted housing grant, adapted 
automobile equipment, and education benefits. However, they 
still must file separate application forms to receive these 
benefits. This just makes no sense whatsoever.
    Mr. Chairman, one of the subjects that often generates a 
great deal of debate when discussing VA compensation benefits 
is the consideration of quality of life.
    PVA has expressed serious concerns in the past, 
particularly during the deliberations of the Veterans' 
Disability Benefits Commission and the Dole-Shalala Commission, 
with the assertion that the schedule for rating disabilities 
are meant to reflect the average economic impairment that a 
veteran faces.
    Disability compensation is, in fact, intended to do more 
than offset the economic loss created by a veteran's inability 
to obtain gainful employment. It also takes into consideration 
a lifetime of living with a disability and the every-day 
challenges associated with that disability. It reflects the 
fact that even if a veteran holds a job, when he or she goes 
home at the end of the day, that person is still disabled.
    There can be no question but that VA compensation includes 
a real and significant component that is provided as an 
attempted response to the impact of a disability on the 
disabled veteran's quality of life. And, yet, we would argue 
that compensation could never go too far in offsetting the 
impact that a veteran's severe disability has on his or her 
quality of life.
    PVA would once again like to thank you, Mr. Chairman, for 
allowing us to testify and I would be happy to answer any 
questions that you might have.
    [The prepared statement of Mr. Blake appears on p. 35.]
    Mr. Hall. Thank you, Mr. Blake.
    Mr. Abrams, you are now recognized for 5 minutes.

                 STATEMENT OF RONALD B. ABRAMS

    Mr. Abrams. Thank you, Mr. Chairman.
    NVLSP would like to focus on the quality of life increased 
payments under 38 U.S.C. Sec. 1114(s). Essentially SMC(S) is 
paid to veterans who have a total disability and have 
independent service-connected conditions that amount to 60 
percent or more.
    A recent decision by the U.S. Court of Appeal for Veterans 
Claims (CAVC), the veterans' court, called Bradley v. Peake [22 
Vet. App. 280 (2008)] reveals that the VA has unlawfully 
limited the impact of this section of the statute possibly as 
far back as 1960.
    NVLSP believes that while it is good to improve the law, it 
is also vitally important to make sure that the VA correctly 
adjudicates current claims.
    So we say that now VA, with the help of the veterans' 
service groups and Congress, should act quickly, promptly, 
efficiently to implement the Bradley decision.
    Currently a veteran with SMC(S) gets about $320 more a 
month than a veteran who has a total rating. That is because 
not only do they have one service-connected condition that 
would support 100 percent, they have other conditions that also 
impact their lives over and above the 100-percent rate.
    The problem is that the statute says that the rating is 
based on a single condition noted as total, which would include 
benefits that are paid because the one condition causes 
individual unemployability. However, the VA has limited this to 
only conditions that are 100 percent schedular. And they have 
been doing this for 49 years. That does not seem right.
    In Bradley, the court finally dealt with this issue. This 
was a compelling case. He was basically blown up in Vietnam. He 
suffered multiple shell fragment wounds from a booby trap. He 
is service-connected for 13 compensable scars and 10 separate 
muscle group injuries. He also gets service-connection for 
Post-traumatic stress disorder (PTSD) at 70 percent.
    The VA awarded him individual unemployability (IU) benefits 
in 1983. And in 1992, he was granted a 100-percent rating. It 
took the VA 13 ratings to get to that level over many years.
    The Court did a wonderful job on this case. First, they 
said that a veteran can get SMC(S) without a 100-percent 
schedular service-connected disability.
    Then the CAVC actually said that even if you have 100 
percent combined, if it would be better for the veteran to get 
IU based on one and then he had a separate combined 60 percent, 
they should pay him that because you get more money.
    And, finally, they said that the effective date of payment 
is when the evidence shows that the veteran would be entitled 
without a specific claim. This case is a home run and should 
have a major impact.
    What we need to do now is to encourage the VA to educate 
its regional offices (ROs) and to help the VA implement this. 
There are thousands of dollars for many, many veterans out 
there and this, of course, will improve their quality of life.
    Thank you very much.
    [The prepared statement of Mr. Abrams appears on p. 39.]
    Mr. Hall. Thank you, Mr. Abrams.
    Mr. Zampieri, you are now recognized.

              STATEMENT OF THOMAS ZAMPIERI, PH.D.

    Mr. Zampieri. Mr. Chairman, Ranking Member, and other 
Members of this Committee, we appreciate the opportunity to 
testify here before you today on behalf of the Blinded Veterans 
Association.
    BVA has joined with the veterans service organizations 
(VSOs) in awaiting action on recommendations provided by the 
Veterans' Disability Benefits Commission that would improve the 
benefits and the services for our Nation's wounded and disabled 
veterans.
    After reviewing the recent 7-month report issued by 
Economic Systems, however, BVA has some concerns about some of 
the recommendations on quality of life for veterans with 
service-connected sensory and other disabilities.
    We believe that the complex objective and subjective 
instruments for a new payment system will require careful 
consideration by Congress along with what is being presented 
here today.
    Quality of life measurements themselves are not only 
objective measures of activities of daily living, but the 
subjective concepts of pain levels, negative emotions, social 
difficulties, and if not very carefully considered, the latter 
could be easily excluded from any determinations of fair 
measurements in looking at the impact of quality of life 
compensation for our Nation's wounded.
    We have some concerns about some sections. One thing that 
alarmed us was a statement and some of the graphs that skin, 
ear, and eye body systems have the lowest level of quality of 
life loss for disabled veterans. I think and hope that you 
would also sort of ask what is that coming from.
    Mr. Chairman, as fellow veterans who have lost sensory 
function could all testify, the reactions to blindness or 
deafness are varied. Fear, overwhelming stress and anxiety, 
depression, anger, those are just a few of the typical 
responses to those sensory losses.
    Our degree of independence is dramatically diminished and 
our quality of life is completely disrupted and forever 
changed. Loss of vision is accompanied by the sudden loss of 
freedom to move about safely and independently. We must 
constantly learn new ways of coping with and managing our lives 
in the absence of vision or sensory losses in our world.
    There are amazing new technologies and assistive devices 
that have been developed, but those require continued updating 
and training. It is not as if someone gets one new technology 
device and that is the end of it.
    I also want to emphasize, and this is commonly found in 
almost any medical articles, if you look at sensory losses, the 
one that is the single largest sensory system for all of us is 
our vision. Seventy percent of our ability to perceive our 
environment comes from vision. So if an individual was blinded, 
70 percent of what they are able to tell about where they are, 
who they are is gone.
    The other major sensory system, of course, which is 
frequently affected in the improvised explosive device 
explosions from Iraq and Afghanistan, is hearing loss. The VDBC 
was faced with a really complex task that for 2 years required 
a very difficult analysis of a complex issue when it comes to 
quality of life. Along with other Federal agencies, State 
governments, and local governments, this is a difficult area.
    And I would like to point out that the VDBC said that no 
current compensation for the impact of disability on the 
quality of life currently exists within the current system.
    Many national surveys demonstrated in the past decade since 
the passage of the ``American Disabilities Act'' that there has 
actually been very little progress made in the employment rates 
of the disabled. Among several sources, one being the very 
respected Cornell University's Center on Disability Statistics' 
annual disability status report, which you can find online, 
data indicates that the country's disabled, 
noninstitutionalized population of working age adults between 
the ages of 21 and 64 still have significantly lower rates of 
employment, lower earnings, and lower household incomes across 
multiple studies as compared to their nondisabled American 
counterparts.
    The 2007 Census Bureau survey, for example, found that 60 
percent of disabled men between those ages with one disability 
were employed, but when looking at individuals with severe 
disabilities affecting daily functioning skills, that rate 
falls to 32 to 34 percent in multiple different studies despite 
improvement in transportation accessibility for those 
individuals with disability that affect their ability to do 
daily functions. Almost 30 percent of the disabled in this 
country still have problems with access to public 
transportation.
    The American communities survey in 2007 found individuals 
with sensory disabilities in that age group of a population 
with a median income of $22,000 less than the average 
households containing nondisabled members.
    And I have multiple other things in the testimony that I 
will let you look at rather than try and read through all of 
them.
    I would also like to point out, though, the National 
Council on Disabilities' March 2009 report reveals that the 
percentage of disabled Federal workers has actually steadily 
declined and that Washington, DC, U.S. Department of Labor has 
found that Federal employees with disabilities is actually at 
the lowest level in almost 20 years. For those who like to say 
that technology is making everything equal and so I have to 
argue with that.
    I have other things in here that unfortunately due to time 
constraints cannot go through all of them. I appreciate the 
ability to be able to testify here this morning in front of the 
Committee. Hopefully I will be able to answer some of your 
questions. Thank you.
    [The prepared statement of Dr. Zampieri appears on p. 40.]
    Mr. Hall. Thank you, Mr. Zampieri.
    I want to thank all of you for your service to our country 
and to our country's veterans.
    Mr. Zampieri, as you noted in your testimony, eye and ear 
injuries have been associated with Traumatic Brain Injury 
(TBI), with explosion of roadside bombs in Iraq and Afghanistan 
among other battlefields and theaters of combat.
    Do you feel that VA has done a sufficient job evaluating 
all the face and head trauma completely and accurately to 
compensate veterans and to provide them with all necessary 
ancillary benefits?
    Mr. Zampieri. Thank you for the question.
    I think it is actually a concern of ours and probably safe 
to say many of the other VSOs that individuals with Traumatic 
Brain Injuries (TBI) that have sensory associated symptoms have 
a very difficult time in getting their ratings because so many 
of those are subjective kind of complaints.
    You know, we frequently hear a lot about the problems with 
tinnitus, for example. Frequently TBI patients complain of 
photophobia, which is extreme sensitivity to light. And those 
are very difficult to rate, but those things can have quite an 
impact on the individual's ability to function and also their 
relationship socially and employment-wise.
    And so we are concerned about the way TBI assessments are 
done in regards to sensory losses. I know that the VA has put a 
lot of effort toward looking at new assessment methods, and 
congratulate them for, you know, recognizing this is a serious 
problem.
    Mr. Hall. In its report, EconSys made policy suggestions 
regarding new assistive technologies and disabled veterans who 
use them.
    Can technology sufficiently replace an actual ability that 
would negate the need to compensate the veteran for his or her 
loss of earning capacity? Are you aware of any new technologies 
that are around the corner and just becoming available that 
would substitute for one's natural vision? I am aware of some 
for hearing loss, but is there something similar for vision 
that you are aware of?
    Mr. Zampieri. Thank you for the question.
    Yes. Actually, and we are very supportive, and I do not 
want it to come out the wrong way here today, by the way, of 
VA's efforts at research and new technology. And we commend Dr. 
Kuppersmith for his leadership in research and development of 
new technologies.
    And, for example, the VA does work with the universities 
doing research on a brain port device, which holds some promise 
of being able to allow part of the brain, the occipital area 
that perceives and processes vision, to get input from a camera 
and then through, believe it or not, the tongue transmits 
images to the occipital area.
    But it is certainly in its early stages of research. And I 
think those individuals who have been involved in using it will 
say that it holds some hope, but it is not going to replace, 
you know, natural vision.
    And I think individuals with deafness would also say that 
the advances made surgically and with new devices for deafness, 
you know, are not going to equal what normal sensory input 
would be.
    Mr. Hall. Thank you. I would have to concur with your 
remarks about hearing loss.
    Also, the mental health community, both secular and 
religious meditation groups and teachers, and so on believe 
that. One of the reasons that they teach meditation in a 
darkened room is because 70 percent of the input, sensory to 
your brain is coming through your eyes, the average person's 
vision and ocular nerves. So, it is only natural then that the 
loss of that much input is a severe loss indeed.
    Mr. Abrams, do you have any further feedback on other SMC 
rates besides (S) and the usefulness of these benefits as a 
mechanism to compensate veterans for the loss of quality of 
life?
    Mr. Abrams. I am not sure I am following the question.
    Mr. Hall. I am asking if you have any feedback on the other 
SMC rates besides the (S)----
    Mr. Abrams. Yeah. I think that the Aide and Attendance 
(A&A) rate should be bumped up. It is too low. I personally 
have a family member in a home and it costs over $90,000 to 
$100,000 to put somebody into a home. And home care, if you 
need 24-hour care, is hugely expensive. Real A&A is too low. We 
need to improve that.
    Mr. Hall. Thank you for bringing to our attention the 
Bradley decision, which is certainly something that this 
Subcommittee and the full Committee will be looking at.
    Mr. Abrams. Thank you. That is important and we can help 
right now with that.
    Mr. Hall. We will be asking you for that help.
    Mr. Blake, has the PVA and its fellow Independent Budget 
organizations reviewed the EconSys study and its 
recommendations regarding quality of life compensation and what 
further impressions do you have of that?
    Mr. Blake. We have not as a group of organizations, but I 
would imagine as we develop the upcoming IB that it will be 
something of obvious consideration, particularly given the new 
focus on wanting to try to figure out a way to compensate for 
quality of life.
    The one thing I would suggest is that this is not an easy 
task and for four organizations, I think it has already been 
discussed here a little bit, trying to figure out a way to make 
recommendations on how to adjust quality of life, I am not sure 
that any of the four organizations could come to a universal 
agreement on the best way to do it because I think at the end 
of the day, it is more subjective than objective in trying to 
figure out a way to compensate for that.
    But I will say since I do not work chiefly on the benefits 
side of the IB that I would imagine that it would be one of the 
main things that they will look into, yes, sir.
    Mr. Hall. Thank you.
    Has the PVA studied the impact of in-home ventilator care 
and the costs associated with that care? Should there be an 
additional rate paid based on ventilator dependence?
    Mr. Blake. I cannot say that I am aware that we have 
studied it, Mr. Chairman, but I can certainly go back and ask 
some of the folks who represent our research folks and see if 
they have looked into this issue particularly.
    Mr. Hall. Thank you. That would be helpful.
    Should there be a partial A&A awarded for veterans who can 
perform some of the activities of daily living, but not all of 
them?
    Mr. Blake. A partial A&A, sir? I do not think there should 
be any partial benefit given period. I think the aid and 
attendance benefit is a benefit given in whole and that is it.
    Mr. Hall. Should there be a new SMC rate created for 
cognitive impairments such as for PTSD or TBI?
    Mr. Blake. I do not know if it would be a new rate or a way 
to reevaluate the current SMC schedule as it is developed and 
add that in there. Maybe it needs a new subsection of its own. 
I could not speak to that necessarily, sir.
    Mr. Hall. Thank you.
    How would the PVA recommend that a quality of life payment 
be made? Should it be inherent in a new rating schedule or 
should it be as an SMC?
    Mr. Blake. I do not know that that question has ever been 
put before our Board of Directors. I am not sure that we have 
ever considered the best way to do it. But I will take it back 
to my leadership and see what their thoughts on that question 
might be, sir.
    Mr. Hall. Would either Mr. Abrams or Mr. Zampieri like to 
comment on that question?
    Mr. Zampieri. Yes. Appreciate it.
    I would be concerned about having it too fragmented with 
the determination, you know, because then you make an already 
slow process even more complex for the individual veteran who 
is trying to figure out why they are making this decision in 
the service-connected, economic replacement type payments and 
then a separate payment for something else and then another 
payment for, you know.
    The last thing the VA needs I think at this point could 
safely say is something else that is going to add to the 
slowing down or cumulative effect of having to deal with all 
these various benefits decisions.
    Mr. Hall. Good point.
    Mr. Abrams.
    Mr. Abrams. I think that if it can be determined that 
somebody comes back from Iraq, Afghanistan, Vietnam and because 
they suffered a blow that cost them a percentage of their 
ability to think, they should have an SMC code for that. It is 
not any harder than the current SMC codes which some VA raters 
find hard. But it is not going to add any more to the 
complicated process.
    Mr. Hall. Well, thank you.
    I want to thank all three of you for your testimony and for 
your answers. I am looking forward, as we move forward, to 
speaking with you all again. So our first panel, you are now 
excused.
    We will invite in the changing of the guard our second 
panel to join us.
    Dr. Lonnie Bristow is the Chairman of the Committee on 
Medical Evaluation of Veterans for Disability Benefits, Board 
on the Health of Select Populations at the Institute of 
Medicine (IOM), the National Academies; Mr. George Kettner, 
Ph.D., President of Economic Systems, Inc.; Ms. Kimberly D. 
Munoz, Executive Director for the Quality of Life Foundation; 
accompanied by Michael Zeiders, President of the Quality of 
Life Foundation; and Ms. Carol A. Glazer, President of the 
National Organization on Disability (NOD).
    Thank you all for joining us today. I would remind you as 
always that your full written testimony is entered in the 
record and if you can limit yourselves to 5 minutes in oral 
testimony, then we will have time for questions.
    Dr. Bristow, you are now recognized for 5 minutes.

STATEMENTS OF LONNIE BRISTOW, M.D., CHAIR, COMMITTEE ON MEDICAL 
 EVALUATION OF VETERANS FOR DISABILITY BENEFITS, BOARD ON THE 
   HEALTH OF SELECT POPULATIONS, INSTITUTE OF MEDICINE, THE 
NATIONAL ACADEMIES; GEORGE KETTNER, PH.D., PRESIDENT, ECONOMIC 
 SYSTEMS INC., FALLS CHURCH, VA; KIMBERLY D. MUNOZ, EXECUTIVE 
     DIRECTOR, QUALITY OF LIFE FOUNDATION, WOODBRIDGE, VA; 
  ACCOMPANIED BY MICHAEL ZEIDERS, PRESIDENT, QUALITY OF LIFE 
  FOUNDATION, WOODBRIDGE, VA; AND CAROL A. GLAZER, PRESIDENT, 
              NATIONAL ORGANIZATION ON DISABILITY

               STATEMENT OF LONNIE BRISTOW, M.D.

    Dr. Bristow. Thank you. Good morning, Chairman Hall----
    Mr. Hall. Please push your button so that your microphone 
is on.
    Dr. Bristow. That helps.
    Mr. Hall. Yes. Thank you.
    Dr. Bristow. Good morning, Chairman Hall, Ranking Member 
Lamborn, and Members of the Subcommittee. I am Lonnie Bristow. 
I am a physician, a Navy veteran, a member of the Institute of 
Medicine, and a former President of the American Medical 
Association. And I am very pleased to appear before you again 
to testify about the improvement needed in the disability 
benefit system of the VA.
    I had the great pleasure and honor of Chairing the 
Institute of Medicine (IOM) Committee on Medical Evaluation of 
Veterans for Disability Compensation that was established at 
the request of the Veterans' Disability Benefits Commission.
    The Committee was asked to evaluate the VA's schedule for 
rating disabilities and related matters, including the medical 
criteria for ancillary benefits.
    My task today is to present to you the Committee's 
recommendations on improving ancillary benefits, which are in 
Chapter 6 of our 2007 report entitled, ``The 21st Century 
System for Evaluating Veterans for Disability Benefits.'' And I 
also intend to comment on our recommendations concerning 
quality of life, which is in Chapter 4 of our report.
    Specifically the IOM Committee was asked to comment on the 
appropriateness of medical criteria for five specific ancillary 
benefits, including vocational rehabilitation and employment 
(VR&E) services, automobile assistance, adapted housing grants, 
and clothing allowances.
    And in each case, the Committee was asked to consider from 
a medical viewpoint the appropriateness of the specific 
conditions that a veteran is required to have in order to 
receive these ancillary benefits.
    When we reviewed ancillary benefits, we found that they 
were created piecemeal over time. They were not designed as 
part of a comprehensive program of services and they are not 
systematically updated and, in some cases, not indexed for 
inflation. They are not based on an empirical analysis of 
veterans' actual needs or actual loss of quality of life. And 
except for vocational rehabilitation, there is no evaluation of 
their effectiveness in addressing veterans' actual needs or 
loss of quality of life.
    We also noted that for most benefits, the medical 
eligibility criteria require a very high degree of obvious 
anatomic impairment and that they are so specific that they may 
not include veterans with other impairments that hinder 
mobility, such as multiple sclerosis.
    I realize that this Committee does not have purview over 
vocational rehabilitation, but we concurred with the 
recommendation of a 2004 task force on VR&E that was appointed 
by VA, which suggested that VA should better coordinate its 
health, VR&E, and compensation programs in order to achieve a 
more individualized or veteran-centric approach to veteran 
services.
    The IOM Committee offered four recommendations of its own 
for improving ancillary benefits. The first was based on the 
lack of data on the need for, or the effectiveness of, 
ancillary benefits and, therefore, we recommended that VA 
should sponsor research on ancillary benefits and obtain input 
from veterans about their needs. Such research could include 
conducting intervention trials to determine the effectiveness 
of ancillary services in terms of increasing functional 
capacity and enhancing health-related quality of life.
    Second, since VA offers a number of services that might 
benefit a disabled veteran, we recommended that VA and the U.S. 
Department of Defense (DoD) should conduct a comprehensive, 
multidisciplinary medical, psychosocial, and vocational 
evaluation of each veteran applying for disability compensation 
at the time of service separation.
    Third, we found no medical basis for the current 12-year 
limitation on eligibility for vocational rehabilitation (VR) 
services. VR might be beneficial after 12 years because of 
medical advances or the development of new assistance devices 
or new types of work for which veterans with disabilities might 
then be trained.
    And, fourth, we were concerned about the low rate of 
participation in the Vocational Rehab Program and recommended 
that VA should develop and test incentive models that would 
promote vocational rehabilitation and return to gainful 
employment among those veterans for whom this is a realistic 
goal.
    Concerning loss of quality of life, our report recommended 
that it be measured directly. Since quality of life measurement 
appropriate for compensation by VA does not exist at this time, 
we recommended that VA take a series of steps.
    First, VA should develop a quality of life tool based on a 
lot of good work that has been done recently, some of it by 
VA's own researchers. In fact, VA already uses a quality of 
life measurement tool, the SF-36, but it is used in research on 
clinical outcomes, not compensation.
    So, second, VA should either modify that tool or choose 
another it might select to determine if veterans experience an 
average loss of quality of life for any specific disabilities 
which exceeds the average loss of earnings capacity as measured 
by the rating schedule.
    Third, if it turns out that veterans experience a serious 
loss of quality of life on average for a given condition that 
is not highly rated by the rating schedule, then the VA should 
compensate for that difference.
    In summary, in our report, the main points concerning 
ancillary benefits and quality of life are, first, VA should 
more systematically research the needs of disabled veterans and 
the effectiveness of its ancillary benefit programs in meeting 
those needs and make the needed revisions in these programs 
based on this research.
    Second, VA should assess the individual needs of disabled 
veterans at the time of separation from military service and 
coordinate the delivery of the services identified by that 
assessment.
    Third and last, VA should develop a tool to measure the 
quality of life of disabled veterans, determine the extent to 
which the rating schedule already accounts for loss of quality 
of life, and for those disabling conditions in which average 
loss of quality of life is worse than the rating schedule 
indicates, compensate for those differences.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Bristow appears on p. 44.]
    Mr. Hall. Thank you, Dr. Bristow.
    Dr. Kettner, you are now recognized for 5 minutes.

               STATEMENT OF GEORGE KETTNER, PH.D.

    Mr. Kettner. Mr. Chairman, thank you for the opportunity to 
appear before you today. I am the President of Economic 
Systems, Incorporated and served as the Project Director of a 
recent study of loss of earnings and loss of quality of life of 
veterans with service-connected disabilities.
    We compared veterans with service-connected disabilities to 
a match group of nonservice-connected veterans. Service-
connected means that the condition occurred during or was 
aggravated by military service. It does not require that the 
disability be work related or be caused by conditions in the 
work environment.
    We found that overall, actual earnings, plus disability 
compensation for veterans with service-connected disabilities, 
was 7 percent above the earnings of the respective comparison 
group without service-connected disabilities.
    On average, veterans rated 30 percent or less did not 
experience serious wage loss. Approximately 55 percent of 2.6 
million veterans receiving disability compensation are rated at 
30 percent or less.
    Veterans rated 40 to 90 percent ratings experience wage 
loss, but their VA disability compensation more than made up 
for the loss. For veterans rated at 100 percent, their earnings 
and disability compensation was 9 percent less than expected.
    We also found considerable differences in earnings loss 
across different diagnoses for a given rating level resulting 
in serious inequity in the disability payment system.
    Several of the most prevalent diagnostic codes are 
candidates for changes to the rating schedule because there is 
no earnings loss at the 10 percent or 20 percent rating levels. 
Examples include arthritis, hemorrhoids, tinnitus, and 
diabetes.
    We found that mental health disorders in general have a 
much more profound impact on employment and earnings than do 
physical disabilities. Adjustments to the rating criteria could 
overcome much of this disparity but not for those already rated 
100 percent unless the benefit amount for the 100-percent 
rating was increased as well.
    Veterans receiving disability compensation have on average 
3.3 disabilities that are rated. VA uses a certain look-up 
table for combining individual disability ratings into a 
combined degree of disability rating. The earliest known table 
dates from 1921 and little has changed since then.
    The formulas result in ratings that overcompensate veterans 
for loss of earning, particularly when combining multiple 
disabilities with low ratings.
    Veterans with a combined rating between 60 to 90 percent 
who are determined to be unemployable qualify for individual 
unemployability benefits or IU benefits. Veterans determined to 
be entitled to IU qualify for the same benefit payment amount 
as those rated at the 100-percent disability level.
    Individual unemployability has increased by almost 90 
percent since 2001 with PTSD cases making up one-half of new IU 
cases. Forty-four percent where veterans age 65 and older, age 
is clearly related to employment, but it is not considered in 
determining eligibility for IU. It appears that IU for veterans 
approaching or past retirement age is implicitly providing 
retirement income or recognition for loss of quality of life 
rather than for employment loss.
    Special monthly compensation is a series of awards for loss 
of limb, organ, or functional independence. SMCs are not 
awarded to compensate for average loss of earnings capacity. 
Instead they can be viewed as payments for loss of quality of 
life.
    The amount of SMC monthly payments above the regular 
schedule payment for the 100-percent rating ranges from about 
$600 to $1,900 for severely disabled veterans. SMC payments are 
generally not made for PTSD and other mental health conditions 
unless the veteran requires aid and attendance.
    Certain SMCs are paid to veterans for assistance with 
activities of daily living. For example, SMC(L) provides $618 
per month above the normal 100 percent amount and SMC(S) for 
housebound veterans provides $302 per month.
    Survey results indicate that the monthly cost of hiring 
assistance for caregiving ranges from about $500 to $11,000 
depending on how many hours of care are provided.
    A recent study estimated the lost wages and benefits of 
family caregivers of severely injured, active-duty 
servicemembers at $2,800 per month. The current amount of the 
SMCs for assistance is well below these estimated costs.
    The literature generally defines quality of life as an 
overall sense of well-being based on physical and psychological 
health, social relationships, and economic factors.
    We found that QOL loss occurred for veterans at all levels 
of disability. We also found that loss of quality of life 
increases as disability increases, but there is wide variation 
in loss of quality of life at each disability rating.
    Putting an economic value on quality of life is subjective 
and value laden. Hence, we develop different options for 
quality of life loss payments ranging from an average amount of 
$100 a month to about $1,000 a month depending on the benchmark 
for measuring loss of quality of life.
    Examples of benchmarks include veterans' self-assessment, 
societal views, awards made by foreign governments, SMC 
payments, and IU benefits for veterans over the age of 65.
    Before any quality of life benefit is implemented, we 
recommend that the current system for rating disabilities be 
adjusted to reflect actual loss of earnings to ensure an 
overall equitable system. Otherwise, we may be compounding the 
inequities that we have in the current system.
    Mr. Chairman, I thank you for the opportunity to appear 
before you today.
    [The prepared statement of Dr. Kettner appears on p. 46.]
    Mr. Hall. Thank you, Dr. Kettner.
    Ms. Munoz, you are now recognized for 5 minutes.

                 STATEMENT OF KIMBERLY D. MUNOZ

    Ms. Munoz. Thank you.
    Chairman Hall and distinguished Members of the 
Subcommittee, thank you for inviting the Quality of Life 
Foundation to testify today.
    As you know, the Veterans Affairs mission statement is 
based on the promise that President Lincoln made to America's 
Civil War veterans to not only care for them but also in the 
event of their death to ensure their widows and orphans were 
not forsaken.
    We assert that today's equivalent of America's Civil War 
widows and orphans includes the families of catastrophically 
injured veterans and that they also must not be forsaken. As 
such, benefits must reflect the reality that when a veteran is 
dependent on a family caregiver, their family becomes dependent 
on their benefits.
    As a nonprofit organization founded to develop, support, 
and implement strategies to improve the quality of life for 
those who face limiting barriers, we began researching the 
experiences of catastrophically wounded servicemember families 
in February of 2008. We published our findings in a report in 
April of 2009.
    During our research, we heard repeated stories of families' 
struggles to receive the benefits their veterans had earned. 
The degree of this struggle is reflected in the fact that for 
fiscal year 2007, 5 of the largest, most well-known VSOs 
reported $75 million in program expenses associated with VA 
claims assistance.
    It is apparent that VA must reduce the burdensome process 
and wait times associated with the receipt of benefits these 
families need to rebuild independent and quality lives.
    While timely processing is important, it cannot be achieved 
at the cost of accuracy. An accurate disability rating based on 
relevant eligibility criteria is the key to open doors to 
benefits these families desperately need. Special monthly 
compensation is one of those.
    This compensation is awarded in consideration of the impact 
disabilities have on the veteran's independent living function. 
However, current eligibility criteria fails to fully consider 
cognitive and psychological impairments that also diminish the 
veteran's ability to live independently.
    For example, a highly functioning veteran with 100 percent 
service-connected disability due to a stand-alone Traumatic 
Brain Injury who has been left with impaired cognitive, 
judgment, and short-term memory capabilities clearly cannot 
safely live independently. He requires oversight for activities 
like paying bills, cooking, driving, attending medical 
appointments, and taking medication.
    However, because he has no physical disability, he is 
eligible for just one category of special monthly compensation 
resulting in approximately an additional $600 a month.
    When a family member has left their job to provide that 
oversight for their veteran, $600 does not cover that financial 
burden.
    Simply stated, we believe that if a veteran's service-
connected disability requires a significant level of daily 
supervision and assistance, the VA must provide compensation to 
fully cover that caregiving expense.
    The specially adapted housing grant is another benefit with 
eligibility criteria based largely on physical impairments. The 
maximum grant is $60,000 and it is intended to only offset the 
cost to modify a home. The process is lengthy and as such 
prohibits modifications from being completed prior to the 
veteran's homecoming.
    These grants must be awarded in time to allow the 
homeowner, including parent caregivers, to provide a safe and 
accessible environment for the day the veteran arrives home. 
Additionally, the grants should cover the total cost of the 
modification.
    The VA provides health care to eligible veterans throughout 
the United States via their own facilities and in some 
instances through a fee-basis program. However, when VA 
facilities do not provide the best option for veterans and 
their families, the VA discourages access to private care.
    When veteran families choose to pursue health care via the 
fee-basis program, the VA should accommodate that choice by 
timely issuance of preauthorization and full and timely payment 
to non-VA medical providers.
    Family caregivers also require health care and many of 
them, especially parent caregivers, forfeit their own health 
insurance when they leave their job to provide daily care to 
their veteran. This loss of coverage results in a lower quality 
of life and potentially the inability to sustain caregiving for 
the veteran.
    The VA must provide health care insurance to those family 
members who have forfeited their own insurance to provide care 
to their veteran.
    In addition to health care, family caregivers require 
respite from the demands of 24/7 caregiving. However, respite 
eligibility criteria also does not fully consider cognitive and 
psychological impairments experienced by those with stand-alone 
PTSD or TBI.
    For those who do qualify for respite, the VA provides 30 
calendar days per year of in-home, 6 hours a day respite. 
Families who desire extended respite may place their loved one 
in a VA nursing home. Most families are reluctant to exchange 
the stress of moving a loved one into a nursing home for a much 
needed weekend vacation.
    We believe the VA should provide respite to family 
caregivers of veterans who require aid and attendance and 
should extend the current in-home respite benefit beyond a 6-
hour maximum to include overnight in-home care.
    Family caregivers often voice heartfelt concern regarding 
the day they become unable to fulfill caregiver 
responsibilities and are forced to place their loved one in a 
VA nursing home. The VA must invest in long-term, age 
appropriate residential care geared to meet the needs of this 
generation of traumatically injured veterans.
    In conclusion, the Quality of Life Foundation believes our 
country's response to the families of severely wounded veterans 
must be deserving of their response to their veteran's call of 
duty. We must provide compensation, medical care, and long-term 
support to allow severely wounded families to rebuild quality 
lives, to live with dignity in their homes, and to know that 
their sacrifices are appreciated and honored by a grateful 
Nation.
    The time to study this issue is past. These families are 
struggling to sustain caregiving with too few resources. They 
do not need nor want a handout. They simply ask for the tools 
required to take care of their veteran and their families. We 
urge Congress to pass legislation this session that increases 
support to family caregivers.
    That concludes my testimony and I look forward to answering 
any questions you may have.
    [The prepared statement of Ms. Munoz appears on p. 54.]
    Mr. Hall. Thank you, Ms. Munoz.
    Ms. Glazer, you are now recognized for 5 minutes.

                  STATEMENT OF CAROL A. GLAZER

    Ms. Glazer. Thank you, Mr. Chairman and Members of the 
Subcommittee.
    My name is Carol Glazer and I am the President of the 
National Organization on Disability or NOD. We are a 27-year-
old national nonprofit organization that has long worked to 
improve the quality of life for people with disabilities by 
advocating for their fullest inclusion in all aspects of life.
    We are well-known for our Harris polls, which measure 
quality of life indicators, including access to health care, 
transportation, employment, education, worship, and even 
political participation.
    And we commend the Subcommittee for looking at quality of 
life indicators besides earning capacity in determining 
disability ratings and ancillary benefits for our country's 
service-disabled veterans.
    Today I want to share with you what we are learning from 
the early phases of an Army wounded warrior career 
demonstration project, which is a privately funded, 4\1/2\ year 
demonstration conducted by NOD under a Memorandum of 
Understanding with the United States Army and its Army Wounded 
Warrior Program.
    My observations on quality of life issues for veterans are 
derived from scouting reports from the field, from focus groups 
over the course of a year with over 200 soldiers and family 
members, and through our first year of this demonstration that 
is operating in three sites, the Dallas Metroplex, the State of 
Colorado, and the State of North Carolina.
    In fact, just this morning, I returned from our Colorado 
site where I spoke with several officials at Fort Carson, 
veterans, family members, and the service providers who work 
with these veterans.
    Through our demonstration with the Army, our career 
specialists ensure that career services and related assistance 
are provided, in this case to over 200 soldiers and their 
family members. We link these soldiers with existing career 
services in their community and in some cases we provide direct 
services ourselves where such services are inadequate.
    We are demonstrating a model of intensive, proactive, long-
term career support in what will ultimately be a caseload of 
several hundred soldiers.
    The demonstration has a research component where we will 
analyze the results of our model, especially on outcomes 
related to education and work. And although this demonstration 
is related to education and employment, we believe that the 
service model and what we are learning from this demonstration 
is going to have applicability across a whole range of quality 
of life issues for veterans, especially those that are of 
concern to this Committee.
    I wanted to share with you a few of the lessons that we are 
learning from this early stage. Our demonstration has been in 
place for about a year with the U.S. Army.
    First observation, a fundamental mismatch. Many of the 
supports for veterans are constrained to a reactive service 
model placing the burden on veterans and their families to find 
and approach agencies. But we find that the most seriously 
injured soldiers, especially with cognitive injuries, are not 
really able to effectively access these services.
    The model we are testing involves proactive support, in 
which we actively reach out to veterans who are in our caseload 
immediately upon their transition home. We contact them at 
least once month either electronically or by phone and we see 
them at least twice a year, much more often at the outset of 
our work with them.
    Our surveys confirm that our veterans find this approach 
much more satisfying than those of many other services that are 
more reactive in nature.
    Second observation, the need to deal with both the veteran 
and the family member. As others have stated, the process of 
recovering from injury and coming home and coming to terms with 
disability is a very complex process that impacts the entire 
family. It is our belief that ancillary benefits and services 
must be available to veterans and family members.
    Third observation unaddressed mental health needs, as 
others have noted. More than half of the Army Wounded Warrior 
population, which is a group of veterans with a 50 percent or 
higher disability rating from the Army, suffers from a primary 
diagnosis of PTSD, often combined with Traumatic Brain Injury.
    It is not a criticism of the VA to say that the level of 
mental health services is simply at this point insufficient to 
meet the large and growing demand. We believe that the VA 
should supplement the direct services that it provides in 
mental health with help from many good, quality community and 
other based mental health services.
    Four, criminal charges. Several veterans' behavior 
associated with PTSD or TBI have resulted in their facing 
criminal charges--erratic driving, substance abuse, a whole 
range of other behaviors, some of them violent. Those serving 
veterans must intervene with the police, with the courts, and 
with prosecutors to request that notice be taken of a soldier's 
disability and considered as a mitigating factor in charges and 
sentencing.
    Five, personal and family financial management. Young 
veterans often have little experience in managing properly 
their family finances and they are in dire financial straits. 
There is clearly a need for continuing personal and family 
financial management, training, and guidance.
    Six, peer support mechanisms. Many veterans and families 
are isolated geographically, socially, and psychologically. Our 
career specialists employ peer support mechanisms with very, 
very good results. We encourage the VA to think about that type 
of an intervention as well.
    And then education and job skills, we are very heartened by 
the new GI benefit structure, but offer a yellow warning light 
that these benefits are now so rich in relation to other 
benefits that in many cases we believe they may skew decisions 
toward a 4-year college for many veterans that could benefit 
more appropriately from job training or community college 
credentials that are going to be needed to succeed in the labor 
market of today and tomorrow.
    Finally, the need for flexible work supports. The veterans 
and families we serve often have very low incomes and cannot 
pay for things like computers or work clothes or other types of 
improvements that will help them access the job market. To meet 
such needs, we provide small grants, flexible money from what 
we call work supports, but we would encourage the VA to 
consider that type of very, very flexible funding that can be 
administered very quickly in response to needs that arise.
    These are just a few of the observations we have drawn from 
our demonstration which is now only a year into our model in 
Dallas and in North Carolina, it is even younger. We provided 
more information to you about the demonstration in our written 
comments and we would be happy to provide even more or answer 
any questions you have about our model.
    Thanks for your invitation.
    [The prepared statement of Ms. Glazer appears on p. 57.]
    Mr. Hall. Thank you, Ms. Glazer.
    Dr. Bristow, in its recommendations on ancillary benefits, 
the IOM observed that VA had not surveyed veterans about the 
effectiveness of these benefits, so there was a serious lack of 
data to evaluate the medical criteria.
    Do you think conducting this research would be an important 
step before VA could further consider how it might compensate 
veterans for the loss of quality of life or to revise the SMC 
rates?
    Dr. Bristow. First of all, we cannot report on our 
Committee's assessment of SMC because that was not a part of 
our charge. I can give you a personal observation in a moment.
    But certainly on the issue of whether or not additional 
research should be done assessing from the veterans, listening 
to the veterans themselves as to what their needs are, this is 
essential in order to be able to judge the adequacy and 
effectiveness of the ancillary benefits program and in order to 
be able to subsequently go back and find out how well are these 
benefits actually meeting those needs and actually 
accomplishing the goal, which would be to increase functional 
capacity and to improve to the extent possible the veteran's 
mobility and employability.
    I would make a personal observation about SMC only to the 
extent that SMC as I have seen it seems to have a specific 
focus on anatomic loss. And as you have heard already, this 
virtually precludes its ability to be effective in use for 
conditions such as TBI and PTSD where the disability is largely 
neurogolical or psychiatric and not an anatomic or physical 
loss.
    And so it is terribly important that we actually assess 
from the veterans themselves as to what they need and how well 
these programs may or may not fit their needs.
    Mr. Hall. Thank you, Doctor.
    IOM also looked at various veterans' programs from several 
other countries.
    Would you say that any of them did a better job of 
compensating veterans for the loss of quality of life? Which 
models, if any, would you recommend and why?
    Dr. Bristow. Well, one of the best examples of how you can 
effectively and credibly evaluate quality of life and put it 
into a compensation model is seen in Canada. We noted that in 
Ontario, Canada, the city had a workers' compensation program 
that took a very unique approach to the fact that there is a 
need to compensate workers not only for their loss of work 
capability, earning capability but also for quality of life.
    They have 12,000 workers who are disabled. And what they 
did was they selected I think it was 76 disabling conditions 
such as blindness, such as the loss of a limb, such as stroke, 
things of that nature, and they took individuals who had those 
76 conditions and made 5 to 6 minute long videotapes in which 
they had a therapist question the individual as to how this 
disability impacted their lives and allowed the individuals to 
demonstrate how they perceive this impacted their lives, things 
such as trying to catch a bus, trying to take care of your 
laundry, daily services of caring for yourself.
    They then took those videos and they showed disabled 
workers four to six such videos in a 30-minute period of time, 
and asked them, how would you rate your preference for this 
condition, making sure that they did not show anyone a video of 
the condition they already had, instead always showing them 
some other conditions.
    The test subjects were then asked to rate each condition on 
a preference basis from 0 to 100, 0 being ``this would not 
bother me at all,'' on up to 100 being ``I would rather be dead 
than have this condition,'' and rates were assigned in this 
subjective fashion.
    They were able by this methodology to come up with a 
credible rating system in which the ``average person'' would be 
able to say if I had this condition, this is the impact it 
would have on my life, my perception of my will to live, so to 
speak.
    They then also were able to convert that system with those 
percentages to a monetary compensation. And this worked very 
effectively there.
    It is possible to do. It is possible to measure quality of 
life in a way that is credible and reproducible statistically 
and to actually convert that assessment into a monetary or 
compensation platform.
    The VA is close to that with the quality of life instrument 
that they are currently using. It would need to be modified. 
But were it to be modified to actually allow for preferences to 
be indicated, at the IOM we believe that this could serve as a 
vehicle for the actual measurements of quality of life that 
could be attributed to various conditions and then take a look 
to see whether or not that condition's quality of life 
assessment matches up reasonably well with what the current 
rating schedule is already giving to a veteran.
    If it matches up well, fine. But if there is a significant 
disparity between the veteran's perception of their quality of 
life given this condition as contrasted with what the rating 
schedule gives, then we believe that a third step is needed, 
which the VA should make some adjustment in its compensation 
award to that veteran based on the difference in quality of 
life that they are experiencing.
    Quality of life, Mr. Chairman, as I am sure you are aware, 
is terribly important.
    Mr. Hall. Thank you, Doctor.
    Dr. Kettner, there has been concern that the data that 
EconSys used to base its recommendations upon did not fully 
consider all of the veteran population, particularly VA's 
largest service-connected cohort, Vietnam veterans.
    Can you provide more insight into how you conducted your 
study and what you might have done differently if data prior to 
1980 were more readily available? How does your study take into 
account the demands of the baby boomer generation who are 
currently placing the greatest demand on VA?
    Mr. Kettner. Okay. Well, thank you for the question.
    Our study focused on veterans who were discharged from 
military service post-1980. We attempted to look at pre 1980 
data, but uncovered that the pre 1980 data was not adequate for 
purposes of our study. We could not get sufficient data on 
certain human capital characteristics and, therefore, we 
decided that the best approach to take would be to focus on the 
post-1980 group.
    This post-1980 group is also relevant from the point of 
view that if you are going to grandfather the current payments 
for veterans already in the system, you want to look forward to 
the future on how you would set forth payments for veterans 
entering the system in the future. Then we think it is 
appropriate from a methodological point of view to focus on the 
post-1980 veterans.
    [Dr. Kettner subsequently provided additional remarks in 
response to Mr. Hall's question, which appears on p. 73.]
    Mr. Hall. Thank you.
    The study also found that VA has 54 possible combinations 
of SMC codes, which apply different degrees of compensation.
    Are these combinations adequate to improve a 
catastrophically disabled veteran's quality of life or does the 
VA need to reassess the SMC awards that for the most part have 
been in place since the Civil War?
    Mr. Kettner. Okay. Well, the quick answer to your question 
would be by and large the SMCs are not adequate. We found 
overall that while with the regular schedule, there may be 
overcompensation, when it gets to the 100 percent rating level 
and the SMCs, generally speaking, there is undercompensation.
    In particular, you can view SMCs as expounding into two 
parts, one part for implicit quality of life payment and 
another part for the aid and attendance. We know that for aid 
and attendance, the SMCs are not adequate. They fall quite a 
bit short on that account.
    The SMC veterans are rated at 100 percent and we know from 
our earnings loss analysis that they are not adequately 
compensated for their loss of earnings.
    The component of quality of life is much more subjective, 
but in general, our own judgment would be that the SMC veterans 
need more attention and more compensation than the regular 
schedule veterans who are rated below 100 percent.
    Mr. Hall. You also noted that the rating schedule needs to 
be updated for mental disorders and PTSD especially. Veterans 
with mental disabilities are below income parity and the report 
suggests that the 10-percent rating begin at 30 percent and 
subsequent adjustments upward. However, that would still not 
solve the equity problem at the 100 percent.
    You also noted the lack of SMCs for mental disabilities. 
Could the addition of an SMC for mental disorders bring these 
veterans to parity?
    Mr. Kettner. That would certainly help, but the SMCs are 
intended not to replace loss earnings. So there is still that 
shortfall in replacing earnings loss for veterans at 100 
percent rating, including those that have PTSD.
    Mr. Hall. Thank you.
    Ms. Munoz, I understand from your report that families of 
severely wounded warriors deplete their savings and retirement 
accounts, go bankrupt, remortgage homes, lose jobs, along with 
other problems.
    What would you estimate the average family spends to meet 
the needs of their wounded warrior that the Government does not 
reimburse them for undertaking?
    Ms. Munoz. Well, it varies widely because some families 
have assistance to get the benefits that they need from VA and 
they have to use less out-of-pocket funds to get the services 
their veteran needs.
    Other families who may have not had the guidance from 
perhaps a VSO or who do not have the education in our country, 
maybe they have moved here from another country and they do not 
speak our language, it is hard for them to run through all the 
rules and regulations and applications. And so they have a 
difficult time accessing the benefits that they need.
    There was a study that was released by the Center for Naval 
Analysis (CNA) that estimated 19 months of lost income of 
around 2,000 some odd dollars, I think, for a total of $36,000 
average loss per family of catastrophically injured 
servicemembers.
    That is their income loss, which is not necessarily 
answering your question of how much do they spend out of pocket 
to get the services, but it is a figure that has been widely 
reported.
    Mr. Hall. Thank you.
    What additional factors do you think VA should specifically 
consider when it adjudicates aid and attendance or housebound 
rates?
    Ms. Munoz. One of the key questions is can the veteran keep 
themselves safe from the hazards of daily living. There are 
many other questions related to a body part function or a loss 
of a body part, but buried deep in there is can the veteran 
keep themselves safe from the hazards of daily living.
    For those who have Post-traumatic stress disorder and 
stand-alone TBI, I believe that that is a key to determining 
whether or not that veteran needs aid and attendance. The aid 
and attendance can also vary in terms of do you need physical 
aid and attendance or do you need oversight.
    So one package of aid and attendance does not meet the 
needs of every single veteran.
    Mr. Hall. It seems to me that a judgment about the safety 
of the veteran living independently is similar to a judgment 
that one would have to make about an Alzheimer's patient, for 
instance, and families that go through that difficult time when 
they realize that a stove or an electric socket is no longer a 
safe thing for this adult family member to be handling alone.
    Ms. Munoz. Some of the family members have suggested 
specially adapted equipment be included in the grants available 
for home modifications like stoves that automatically turn off 
after a certain amount of time or other appliances that 
consider short-term memory loss for some of the Traumatic Brain 
Injury veterans.
    Mr. Hall. And what else do you think, Ms. Munoz, could VA 
do to improve the quality of life of disabled veterans and 
their families?
    Ms. Munoz. It sounds simple, but I know it is very 
difficult, and that it makes it easier for families to get what 
they need. Any time you look at title 38 and try to determine, 
well, what is this veteran eligible for or how do I go about 
it, it is so hard to know who is eligible for what.
    One family caregiver told me the story of, you know, we 
thought we were eligible for respite care and then when we 
called, my son's rating was not high enough or the SMC code was 
not the right code. So they work very hard then to find out, 
well, how do I get that code. And that is a backward way to 
work a system.
    You need to find out what does that veteran need, much like 
you suggested, what is the need of that veteran and what is the 
need of that family so that they can live safely and live 
independently, not how do we get you pigeonholed into the right 
code so you get the services that that code offers.
    Mr. Hall. Thank you.
    Ms. Glazer, in the program that you operate with the Army, 
what kind of feedback have you had from soldiers and their 
families regarding their VA benefits?
    Ms. Glazer. We are serving soldiers in two ways. One is we 
are collecting data about the demographics and then all the way 
through from the services they get all the way through to their 
career, pursuing a job and then advancing in their career.
    We are also serving them by administering direct 
questionnaires that are done in person. What we hear is that 
among the services that they are accessing not only from the 
VA, from the Department of Labor, some of the other public 
agencies, as well as even some of the community supports that 
the services that we are providing them, they rank very, very 
highly, higher than the others.
    And we believe that is because it is such an intense, 
proactive model where we are actually going out and finding 
them and we are staying in touch with them and we are taking 
them by the hand when they go into a job interview or walking 
in with them. Once they get a job, we are staying with them and 
staying with the employer after they become employed.
    So in summary, we are finding that they do appreciate these 
services. They do not always feel that they have the 
wherewithal to go out and get them which is typically the way 
the VA process works. They benefit much more greatly from 
somebody going out and finding them.
    Mr. Hall. Does your organization work with all disabled 
people?
    Ms. Glazer. Yes, we do.
    Mr. Hall. How would you say that the VA compensation 
program compares to other programs? Are there other benefits 
that could be added to the VA package that would improve or 
enhance a disabled veteran's quality of life?
    Ms. Glazer. Well, if you just think about cash benefits and 
then medical benefits, their cash benefits are much richer for 
a veteran because a veteran might be getting Social Security 
disability income or even supplemental security income (SSI) in 
addition to the VA benefits that they are receiving. TRICARE 
and VA offer some of the best health care around.
    So I think in terms of comparing benefits for a civilian to 
benefits for somebody in the military, those benefits tend to 
be richer than for civilians.
    Having said that, the benefit system both on the civilian 
side as well as on the military side does tend to be skewed 
away from work very frequently. Work and career are a focus of 
NOD. And what you find is that when a veteran is getting a 
combination of disability pay, there could be veterans' 
benefits, just regular cash benefits. That same veteran might 
also be getting Social Security Disability Insurance. And then 
if you layer on top of that accessing the new GI Bill, which 
provides not only books and tuition but also a $1,400 a month 
housing allowance, that combination of benefits tends to be 
very, very, very rich.
    And, unfortunately, what we find is it often skews the 
decision away from work for a veteran who would otherwise 
become a productive, contributing member of their society and 
their community. And sometimes, frankly, it is irrational to 
make a decision to go back to work and forsake some of those 
cash benefits that you are receiving from a combination of the 
military and the civilian benefits that you are entitled to.
    Mr. Hall. Thank you.
    Incarcerated veterans have had their VA benefits reduced or 
terminated.
    Do you think that Veterans' Courts could help facilitate 
keeping more veterans involved in the VA system so veterans do 
not fall deeper into poverty or homelessness upon their 
release?
    Ms. Glazer. Yes, we do. We think it is a very important 
model that bears close scrutiny. A number of States are now 
adopting these courts. Not only do they divert a veteran out of 
the prison system and provide alternatives to incarceration, 
but often they have specially trained magistrates who really 
understand the mental health conditions that are driving many 
veterans to do things that they would not otherwise do, whether 
it is substance abuse or domestic violence or you name the kind 
of abhorrent behavior that is a result of mental health 
problems.
    And with specially trained magistrates who really 
understand--I just came back from Fort Carson. There is 
actually a two-star General retired who is now becoming a 
magistrate in the veterans' court in the State of Colorado 
which is, in fact, leading the Nation in veterans' courts.
    Besides having specially trained magistrates, they often 
have collocated on the site of the court a whole range of 
support services, whether it is housing or mental health 
services or places where you can go and, in fact, get your VA 
benefits. The concept of a veterans' court, we believe, has a 
lot of promise in keeping people out of the court system, out 
of the justice system, and more productively engaged.
    Mr. Hall. Last, other countries provide veterans receiving 
compensation with financial planning services and advisors.
    Is that something you think the VA should do when a veteran 
receives an initial award?
    Ms. Glazer. Absolutely. We find that a lot of these young 
men and women do not really know how to budget, how to plan for 
the future, how to save money.
    Those particularly who are getting Traumatic 
Servicemembers' and Veterans Group Life Insurance (TSGLI), 
which is a one-time only cash payment of $100,000 with a 100 
percent disability rating, what many of these young men and 
women do is they will go out and buy a house and mortgage to a 
level that they really cannot afford or they will go out and 
buy a fancy car. If they had a little bit of financial literacy 
support, that money would be used much more wisely, not only 
the TSGLI, but, of course, all the other benefits they are 
getting.
    Mr. Hall. Thank you, Ms. Glazer.
    Thank you to all of our panelists, Drs. Bristow and 
Kettner, and Ms. Munoz. Your testimony has been very helpful to 
us. We will now excuse you from your duty here and wish you a 
good day. Thank you again for your work.
    Our third panel is now invited to come to the witness 
table, Mr. Bradley G. Mayes, Director of Compensation and 
Pension Service for the Veterans Benefits Administration of the 
U.S. Department of Veterans Affairs; accompanied by Mr. Thomas 
Pamperin, Deputy Director of Policy and Procedures, 
Compensation and Pension Service for the VBA; and Mr. Richard 
Hipolit, Assistant General Counsel of the Office of General 
Counsel for the U.S. Department of Veterans Affairs.
    Gentlemen, welcome. It is always good to see you here and 
to hear what you are doing for our Nation's veterans. We know 
you are working hard to sort through these complex problems. 
Your written testimony as always is entered into the record, so 
feel free to use your 5 minutes however you choose.
    Mr. Mayes, you are now recognized.

   STATEMENT OF BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND 
    PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY THOMAS PAMPERIN, 
   DEPUTY DIRECTOR, POLICY AND PROCEDURES, COMPENSATION AND 
    PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; AND RICHARD HIPOLIT, ASSISTANT 
GENERAL COUNSEL, OFFICE OF GENERAL COUNSEL, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Mayes. Thank you, Mr. Chairman. Thank you for inviting 
me to speak today on the timely and important issues related to 
providing compensation for quality of life loss to our Nation's 
disabled veterans.
    Definitions of quality of life loss vary widely and may 
focus on aspects of an individual's physical and mental health 
or may address an individual's overall satisfaction associated 
with life in general.
    The Institute of Medicine traces the concept back to the 
Greek philosopher Aristotle's description of happiness. Then 
they go on to provide a definition that encompasses the 
cultural, psychological, physical, interpersonal, spiritual, 
financial, political, temporal, and philosophical dimensions of 
a person's life.
    A more succinct definition utilized by EconSys refers to an 
individual's overall sense of well-being based on physical and 
psychological health, social relationships, and economic 
factors.
    The most recent study of quality of life loss by EconSys 
titled, ``Study of Compensation Payments for Service-Connected 
Disabilities, Earnings and Quality of Life Loss Analysis,'' was 
released in September 2008.
    VA tasked EconSys with analyzing potential methods for 
incorporating a quality of life loss component into the current 
rating schedule and with estimating the cost for implementing 
these methods.
    The EconSys study proposed three options that could be 
utilized by VA. The first and simplest method would be to 
establish statutory quality of life loss payment rates based on 
combined degrees of disability. EconSys has estimated that 
additional annual program costs for implementing this method 
range from $10 billion to $30.7 billion.
    A second optional method proposed by EconSys would key 
quality of life loss payment amounts to the medical diagnostic 
code of the primary disability as well as to the combined 
percentage rate of disability. EconSys estimated that this 
method would result in annual program costs of $9 billion to 
$22.2 billion.
    A third option proposed by EconSys would involve an 
individual assessment of each veteran for quality of life loss 
by both a medical examiner and a claims adjudicator. Estimates 
for this method range from $10.5 billion to $25.7 billion.
    Implementing a disability rating system that compensates 
for quality of life loss would involve at least two major 
challenges for VA as we have heard today. The first would be to 
accurately and reliably determine whether and to what extent a 
disabled veteran suffers from quality of life loss. The second 
would be to establish equitable compensation payments for 
varying degrees of quality of life loss, which is arguably the 
more difficult of the two challenges.
    Most of the organizations that have provided input to VA on 
quality of life loss have stated that VA has a number of 
special benefits that implicitly if not expressly compensate 
for quality of life loss such as ancillary benefits, special 
monthly compensation, and total disability based on individual 
unemployability.
    Special monthly compensation and ancillary benefits are 
provided to veterans in addition to compensation paid on the 
basis of the schedular rating assigned to service-connected 
disabilities.
    The ancillary benefits to which these organizations refer 
are intended to provide assistance to veterans with special 
needs resulting from exceptional disabilities. They include 
assistance with purchasing of an automobile or other 
conveyance, obtaining the adaptive equipment necessary to 
ensure that a veteran can safely operate the vehicle, acquiring 
housing with special features, adapting a residence or 
acquiring an already adapted residence, and, finally, providing 
an annual clothing allowance.
    These benefits are described in more detail in my written 
statement which was submitted for the record.
    Through this testimony we are attempting to outline some of 
the issues and challenges that VA would face if authorized to 
provide quality of life loss compensation. If VA is to provide 
quality of life loss compensation consistent with the proposed 
options in the EconSys study, statutory changes would be 
required.
    Additional administrative costs for training VA personnel 
and reconfiguring VA computer systems, as well as the cost for 
providing additional benefits to veterans would be 
considerable. The implications for adopting such a policy are 
significant for VA.
    This testimony also illustrates how, in addition to 
compensation provided under the rating schedule. VA provides 
special monthly compensation, ancillary benefits, and extra 
schedular ratings to veterans with certain service-connected 
disabilities, which multiple studies have recognized as 
existing tools to promote the quality of life of veterans.
    As always, VA maintains its dedication to fairly and 
adequately serving disabled veterans who have sacrificed for 
our country.
    Mr. Chairman, this concludes my testimony and I would be 
pleased to answer any questions you or the Subcommittee might 
have on this very important subject.
    [The prepared statement of Mr. Mayes appears on p. 66.]
    Mr. Hall. Thank you, Mr. Mayes.
    Speaking for the Subcommittee, it appears that VA has 
basically not accepted, at this point, any of the options 
presented by the EconSys study. If that is the case, then what 
does the VA propose to do about loss of earnings, special 
monthly compensation, quality of life, and a transition 
payment? Is there an approach in the works?
    Mr. Mayes. The EconSys study, the Veterans' Disability 
Benefits Commission, and Institute of Medicine recommended that 
VA periodically review the current rating schedule to ensure 
that the schedule serves as an effective proxy for average lost 
earnings, which is the intent of our disability compensation 
program.
    We have done that four times in our history that I am aware 
of: in 1956 with the Bradley Commission, the ECVARS study in 
1971, the Center for Naval Analyses study that was done for the 
VDBC, and the EconSys study.
    Generally, CNA found that we were on par with average lost 
earnings. EconSys found that we were within, I believe, 2 
percentage points of average earnings in the 0 to 30 percent-
range of combined degree of disability and above par, in other 
words, earnings plus VA compensation were above par up to the 
100 percent rate. We were below par at the 100-percent rate.
    We have two recent studies that are somewhat different. One 
thing they both found was that for mental disorders, we are 
below par. So what are we doing?
    I believe we do need to take those recommendations to heart 
and institute a periodic validation of the schedule across 
diagnostic codes. Further, we are in the process of evaluating 
our criteria for setting the disability compensation rate for 
veterans suffering from mental disorders, including Post-
traumatic stress disorder.
    Those are a couple of things that we are doing right now 
that I believe both studies recommended.
    Mr. Hall. In your spare time? What did you think of Dr. 
Bristow's description of the Ontario evaluation system? Is that 
something you were aware of before?
    Mr. Mayes. We were aware of it. I believe that was 
described in the IOM's report, if my recollection serves me 
correctly.
    EconSys also came up with a construct for arriving at an 
amount to equate to certain levels of loss in quality of life. 
That construct was based on the average annual payout for loss 
in quality of life in Canada.
    Both studies took a look at that, and it certainly sounds 
like a reasonable approach. All studies that I am aware of have 
taken a look at a certain cohort of the population, in this 
case, disabled veterans, and tried to make a comparison between 
that cohort and the nondisabled veteran population. There are a 
number of ways of doing that.
    Mr. Hall. Thank you.
    You have already partially answered this question, I think, 
but veterans have complained that the application for A&A is 
very focused on ambulation and activities related to standing, 
walking, and balance, which for arm amputees or for brain 
injuries might not be applicable.
    When was the last time that the VA reviewed the A&A 
application and exam criteria? Has consideration been given to 
revising it's A&A criteria to give consideration to these other 
disabilities and levels of need?
    Mr. Mayes. Consideration has been given. We are considering 
revising the eligibility criteria for the higher level of aid 
and attendance. That would be aid and attendance at the R2 
level. The R2 level provides a monthly benefit amount of a 
little over $7,600.
    So the real issue, and it has been raised here today at 
this hearing, is how you reach veterans who have significant 
cognitive impairment, and we certainly are taking a close look 
at that.
    Do you, Dick or Tom, want to add anything to that?
    Mr. Hipolit. Yes. I think it is accurate that we are 
considering various approaches to how we might better serve 
those veterans through the aid and attendance allowance.
    Now, there are various levels of aid and attendance. Of 
course, we can pay aid and attendance under the (L) rate. That 
is a less generous benefit. But then for veterans who have more 
serious disabilities and also have requirements for aid and 
attendance at various levels, we can pay a greater benefit.
    And we are assessing whether there needs to be improvements 
in eligibility for the greater benefit for veterans with 
cognitive disabilities.
    Mr. Hall. Can a veteran, Mr. Hipolit, you can answer this 
if you like, can a veteran receive a partial A&A award if they 
can perform some activities of daily living but not all?
    Mr. Hipolit. There are basically fixed aid and attendance 
rates; there is not a half rate for aid and attendance. You 
have to meet that criteria for aid and attendance. There are 
various factors we consider. So we look at a total picture when 
we consider eligibility for aid and attendance.
    Mr. Hall. We also asked one of the earlier witnesses, and I 
do not want to add another level of complication to the system, 
but I am just curious if a veteran who can perform some 
essential activities but not all, if there was a usefulness or 
a rationale for a partial award for A&A.
    Mr. Pamperin. Congressman Hall, we would like to emphasize 
that we did relatively recently look at the TBI rating 
criteria, which had previously been limited to a 10-percent 
evaluation for subjective complaints only and published after 
two summits on TBI and a lot of comments from everybody over 
our proposed rule a new TBI regulation that does allow for a 
100-percent evaluation, which now gets you at least to the 
potential for the aid and attendance at the L level.
    Mr. Hall. Thank you.
    The VA notes that several studies dating back to 1956 have 
identified veterans with mental disabilities as being below 
income parity with their peers.
    Why has it taken this long for VA to address this disparity 
and what steps is the VBA taking to address this serious 
compensation discrepancy besides the review of the rating 
schedule for mental disorders? Can something be done more 
immediately for our veterans?
    Mr. Mayes. Mr. Chairman, with the conflicts in Iraq and 
Afghanistan, we were seeing veterans coming back suffering from 
Traumatic Brain Injury. We knew that our evaluation criteria 
and the rating schedule were not adequate to address the number 
of servicemembers that we were seeing coming back with 
disabilities.
    As Mr. Pamperin said, we undertook an effort to update and 
put in place a system to properly evaluate veterans suffering 
from these disorders.
    The way we went about that, I think, was very successful. 
We engaged the veterans' health community, Veterans Health 
Administration (VHA), DoD, and stakeholders from the private 
sector to learn about Traumatic Brain Injury and the 
classifications of the disorder. Then we incorporated that 
learning into what I think is a very meaningful regulation that 
is helping veterans. I am very proud of that occurring on our 
collective watch here.
    What we want to do is replicate that approach for mental 
health. The Institute of Medicine looked closely at PTSD. They 
did at least two studies, I believe, for the Veterans' 
Disability Benefits Commission. So we have information there. 
But we wanted to engage the medical community again to answer 
some critical questions for us so that when we write a new 
regulation serving as the proxy for lost earnings, we get it 
right.
    We are working with the VHA right now to host a summit 
similar to what we did with the TBI regulation, and we will 
invite those stakeholders to participate and help us learn. 
Then we will set about crafting a new regulation that I think 
will do a better job.
    You combine that with periodically validating the 
effectiveness of our regulations, the rating schedule, and I 
think we can begin to do a better job for veterans.
    Mr. Hall. Well, I appreciate that. And I know our veterans 
will as well.
    Some veterans have noted that they must go to a Veterans 
Affairs Medical Center to apply for the clothing allowance. For 
some retirees using TRICARE, this is an inconvenience.
    Why is the clothing allowance no longer adjudicated as an 
inferred benefit by the RO?
    Mr. Mayes. That was an attempt by us to make the process a 
little bit more streamlined. Veterans were going to medical 
centers for treatment. The medical centers were, for example, 
prescribing medications that would soil clothing, clothing that 
would then serve as the basis for entitlement for a clothing 
allowance award.
    Those applications were coming into VBA and to our VA 
Regional Offices, and then we were asking VHA to certify that 
the disability warranted the award of benefits.
    What we were trying to do was eliminate some hand-offs and 
allow VHA to make that award at the time that they are 
delivering the services.
    Mr. Hall. That makes sense in a lot of cases. I do not know 
whether some flexibility might be a good idea or not in the 
case of those veterans who are used to TRICARE, but just a 
thought.
    If EconSys has already mapped the ICD9 codes, wouldn't this 
standardization with other medical models, including DoD and 
private providers, make it easier for raters to match treatment 
records and diagnoses to claimed disabilities?
    Mr. Mayes. I do not know that it would make it easier for 
our decision makers. What it would have the potential to do is 
to allow us to do some data mining and compare our evaluations 
with, for example, information out there on treatment since the 
coding would be similar.
    Our decisionmakers, though, are required to review all of 
the evidence at the time they render a decision because we do 
not want to disadvantage a veteran by missing a piece of 
evidence. So we look at all of the medical evidence, whether 
that be treatment records, exam reports, or psychiatric 
treatment records. Then they are going to match that up against 
the schedule to determine the level of severity.
    It would allow us to look a little bit more after the fact 
once we have assigned the evaluations.
    Tom, do you want to add anything to that?
    Mr. Pamperin. The question has been raised a number of 
times about ICD9, and it is a very complex system of over 
10,000 codes. But we do see the merit in cross-referencing with 
ICD9. What we are proposing to do is to retain our current 
numbering system and add a new field for service-connected 
disability at the back end of what the ICD9 is that was 
assigned. That way, you can compare apples to apples in terms 
of doing research.
    But that would be, I think, far less difficult to do than 
to completely overhaul the rating schedule with a new numbering 
system, which then would drive major modifications to computer 
systems, whereas if you just put another field into the 
service-connected numbering system, I think you achieve the 
objective.
    Mr. Hall. Mr. Mayes, can you further explain how the VA 
would go about reviewing ancillary benefits to determine where 
additional benefits such as assistive devices may be 
appropriate to improve a veteran's quality of life? What do you 
envision a benefits package as such would look like?
    Mr. Mayes. I heard the previous panel, and the design 
initially for ancillary benefits I do not believe was to per se 
compensate for lost quality of life, but really to meet needs 
that were identified by veterans suffering from severe 
disabilities, for example, the clothing allowance and the 
automobile grant, the home adaptation grant.
    As those needs change, and I heard two panelists previously 
say this we need to evolve. An example would be veterans who 
are suffering from severe burn injuries; they are surviving 
today when they possibly did not survive in previous conflicts 
because of advances in health care. So we need to adjust.
    We have worked on modifying the eligibility criteria for 
the specially adapted housing grant to accommodate veterans 
suffering from severe burn injuries.
    Those are the kinds of things we need to do. I think we 
need to take a look at the automobile grant. It is currently 
$11,000. We are taking a look at that to see if that is meeting 
the needs of veterans to help offset the cost of the purchase 
of an automobile.
    We need to continually do that, and I am going to take that 
away from today's hearing.
    Mr. Hall. Thank you.
    Two more questions, Mr. Mayes, and I think we may actually 
have our first hearing that is not interrupted by a vote.
    Mr. Mayes. The one that went to about 8:30 that night----
    Mr. Hall. I am sorry.
    Mr. Mayes [continuing]. Will stick in my memory forever.
    Mr. Hall. Well, we all remember that one.
    Do you have a rough estimate at this point of the 
percentage of returning OEF/OIF veterans who are suffering from 
TBI?
    Mr. Mayes. Do you have that, Tom?
    Mr. Pamperin. We will get the exact number for you. But 
when we revised the TBI regulation, I believe the total number 
of people in the system from all wars who had a service-
connected diagnostic code was about 12,000.
    TBI is not in the top ten list of returning veterans filing 
claims for benefits. I cannot honestly say where it is, but we 
can easily get that number for you.
    Mr. Mayes. We will provide that for the record, Mr. 
Chairman.
    [The VA subsequently provided the following information:]

    L  Nine thousand two hundred sixteen living veterans 
discharged on or after September 11, 2001, are service-
connected for TBI. Based on Department of Defense data from May 
31, 2009, and VA records of veteran-reported Global War on 
Terror (GWOT) service through July 31, 2009, approximately 
1,135,000 living Veterans had GWOT service.

    Mr. Hall. Thank you.
    Has the VA considered revising its policies on the SMC(S) 
rate as suggested by Mr. Abrams in light of the Bradley v. 
Peake decision?
    Mr. Mayes. Interestingly enough, we sent policy guidance 
out yesterday on that. This is a case where the court 
interpreted a longstanding regulation interpreting a statutory 
requirement. The court held that our interpretation was overly 
restrictive. It is binding on VA, and we are going to 
administer the housebound benefit at the (S) rate per the 
court's decision.
    Dick, did you want to elaborate on that?
    Mr. Hipolit. Yes. I think that is correct. We have actually 
recognized in our regulation for some time that you could get 
the (S) rate for a single disability found to be totally 
disabling, based on individual unemployability plus an 
additional disability of 60 percent or more. That may not have 
been applied consistently across the board.
    We do recognize the court's decision. We are working to 
implement it. Guidance is going out now. We are also looking at 
whether we need to amend our regulations to further incorporate 
changes in our system.
    Mr. Hall. Could you supply this Subcommittee with a copy of 
the guidance that you just referred to that you sent out 
yesterday, please?
    Mr. Mayes. Sure.
    [The VA subsequently provided Fast Letter 09-33, to 
Director, All VA Regional Offices and Centers, regarding 
Special Monthly Compensation at the Statutory Housebound Rate, 
dated July 22, 2009, which appears on p. 74.]
    Mr. Hall. And we are also still curious to see the Booz 
Allen Hamilton report.
    Mr. Mayes. As soon as that is cleared, Mr. Chairman, we 
will get it over to the Hill.
    [The Booz Allen Hamilton report entitled, ``Veterans 
Benefits Administration Compensation and Pension Claims 
Development Cycle Study,'' dated June 5, 2009, is being 
retained in the Committee files.]
    Mr. Hall. Okay.
    Mr. Mayes. It is still in draft. I checked before I came 
over.
    Mr. Hall. Well, thank you very much. We are looking forward 
to that as well.
    Thank you for the work that you are doing.
    I would like to remind the Members that they have 5 
legislative days to revise and extend their remarks.
    Thank you for the work that you are doing. I know it is a 
terribly busy, complex time, and we here in Congress keep 
making more requests and adding to your workload and to VA's 
workload, which is already impressive and staggering. But, we 
are all pulling, I think, pulling the oars in the same 
direction and trying to better the care, treatment, and quality 
of life of our veterans who have served this country.
    So, thank you for your statements today, your insight, and 
your opinions.
    This hearing stands adjourned.
    [Whereupon, at 11:55 a.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
Good Morning Ladies and Gentleman:

    The Subcommittee on Disability Assistance and Memorial Affairs of 
the House Committee on Veterans' Affairs' hearing on, ``Examining the 
Ancillary Benefits and Veteran's Quality of Life Issues'' will now come 
to order.
    I ask that you please rise for the Pledge of Allegiance.
    This Subcommittee has actively tackled many complex and complicated 
issues that have been encumbering the Veterans Benefits 
Administration's ability to properly compensate veterans who file 
disability claims. These issues have majorly centered on VA business 
processes and operations. Today's hearing will focus on the actual 
appropriateness of available benefits in meeting the needs of disabled 
veterans and their families.
    The expressed purpose of VA disability compensation as outlined in 
38 United States Code Section 1155 is based upon the average impairment 
of earning capacity. This concept dates back to the 1921 Rating 
Schedule, which had its roots in the blossoming workman's compensation 
programs. Then, the primary concern was to ensure that disabled World 
War I veterans would not become a burden on their families or 
communities when they could no longer perform the laborious tasks most 
civilian occupations required at that time. Over the years, Congress 
has added several elements to the VA compensation package to assist 
disabled veterans procure shelter, clothing, automotive, employment, 
vocational rehabilitation and in-home assistance. In its expansion of 
these benefits, Congress has attempted to meet disabled veterans and 
their families' social and adaptive needs, and not solely their 
economic needs.
    In recent years, several commissions and institutions--many of 
whose members we will hear from today--have studied the appropriateness 
of VA benefits including a potential quality of life loss payment. They 
have identified significant challenges in developing an instrument or 
rating schedule that could fairly calculate compensation for the loss 
of quality of life. Much of what makes a life of quality is subjective 
and goes beyond fulfilling basic human needs or replacing impaired 
income. Furthermore, I realize that there is no amount of money that 
can replace a limb or peace of mind. Ensuring that veterans impaired by 
amputation, blindness, deafness, brain injury, paralysis, and emotional 
distress are afforded the necessary resources to lead productive, 
satisfying lives is the debt a grateful Nation owes these brave souls.
    VA has in fact attempted to recognize that in order to make some 
veterans whole, there is a need to provide additional compensation that 
accounts for non-economical factors, including personal inconvenience, 
social inadaptability and the profoundness of the disability. Part of 
the problem may be that the formula and criteria used for adjudicating 
VA ancillary benefits and special monthly compensation is complex and 
often confusing to the beneficiaries themselves. Often times, disabled 
veterans are unsure of this added benefit, which leads to an inability 
to predict or plan for their future based on their VA assistance. 
Without transparency, transitioning wounded warriors are at a severe 
disadvantage if they cannot count on and predict their VA benefits 
package. Having this knowledge could be a big help to these veterans 
and more transparency and outreach is definitely needed in the 
ancillary benefits area.
    I am eager to hear from today's witnesses many of whom are experts 
in the complexities and paradigms for compensating military related 
disabilities. I am also eager to hear from VA on its late-delivered VBA 
Response to the EconSys Quality of Life, Earnings Loss and Transition 
Payments study as mandated in Section 213 of P.L. 110-389. These 
veterans must be returned to their country, communities, and homes with 
the tools and resources to rebuild a life of quality.
    I now yield to Ranking Member Lamborn for his Opening Statement.

                                 
  Prepared Statement of Hon. Doug Lamborn, Ranking Republican Member,
       Subcommittee on Disability Assistance and Memorial Affairs
Thank you Mr. Chairman,

    I welcome our witnesses to this hearing to discuss the important 
issues of ancillary benefits and quality of life.
    It is a terrible tragedy when one of our Nation's servicemembers 
are severely injured, and no amount of compensation can ever make up 
for the immeasurable sacrifice they have made in defense of our 
country.
    It is these veterans with whom we should be most concerned, and 
every effort should be expended to ensure that they are able to lead 
lives that are as close to normal as possible.
    I am particularly concerned about veterans in need of Aid and 
Attendance.
    Much discussion has taken place recently with regard to family 
caretakers and what services should be available for them.
    In my opinion, care for severely disabled veterans is the sole 
responsibility of the government that sent them to war, and zero burden 
should be placed on veterans' family members.
    Obviously, many of our veterans' family members WANT to be there to 
care for their injured soldier, and that is wonderful if it is by 
choice, but it should never be out of necessity.
    Compensation paid to the severely injured servicemembers should be 
more than adequate enough to obtain services necessary to meet the 
needs of daily living.
    I look forward to our witnesses' testimony and working with Mr. 
Chairman Hall to address any shortcomings that might be revealed as a 
result of these proceedings.
    Thank you, I yield back.

                                 
         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 ancillary benefits provided by the 
Department of Veterans Affairs (VA) and how they impact the quality of 
life issues that veterans must deal with. PVA appreciates the efforts 
of this Subcommittee to address the varying needs of our veterans, 
particularly veterans with severe disabilities, such as spinal cord 
injury. We hope that addressing these particular issues will better 
benefit today's veterans and the veterans of tomorrow.
    PVA members represent one of the segments of the veteran population 
that benefit most from the many ancillary benefits provided by VA. 
Without the provision of benefits such as Special Monthly Compensation 
(SMC), the Specially Adapted Housing (SAH) grant, and the Clothing 
Allowance, our members, and other severely disabled veterans, would 
experience a much lower quality of life and would in many cases be 
unable to live independently. With these thoughts in mind, we will 
focus our statement on some of the key ancillary benefits that PVA 
members receive, improvements that might be made, and the relationship 
quality of life has to these benefits.
    Also, we would like to encourage the Subcommittee to review the 
final report of the Veterans' Disability Benefits Commission (VDBC) 
released in October 2007. The VDBC conducted one of the most thorough 
evaluations of ancillary benefits, as well as the entire VA claims 
process, ever completed. PVA tended to agree with many of the 
recommendations included in the VDBC report, particularly as it relates 
to improving ancillary benefits and addressing quality of life issues.
   Special Monthly Compensation (SMC) and Aid and Attendance Benefits
    Special Monthly Compensation represents payments for ``quality of 
life'' issues, such as the loss of an eye or limb, the inability to 
naturally control bowel and bladder function, the inability to achieve 
sexual satisfaction or the need to rely on others for the activities of 
daily life like bathing, or eating. To be clear, given the extreme 
nature of the disabilities incurred by most veterans in receipt of SMC, 
we do not believe that the impact on quality of life can be totally 
compensated for; however, SMC does at least offset some of the loss of 
quality of life.
    PVA believes that an increase in SMC benefits is essential for our 
veterans with severe disabilities. Many severely injured veterans do 
not have the means to function in an independent setting and need 
intensive care on a daily basis. Many veterans spend more on daily 
home-based care than they are receiving in SMC benefits. This can place 
a significant financial strain on these veterans and often results in 
them being forced to opt for institutionalization.
    To support our recommendation, we encourage the Subcommittee to 
review the recommendations of the VDBC report. As explained by the 
VDBC:

          Veterans with catastrophic disabilities and their families 
        face many challenges that make it harder for them to maintain a 
        reasonable standard of living and compete with their peers. SMC 
        adjustments help protect the health and welfare of severely 
        disabled, service-connected veterans and their families. 
        However, after considering the studies conducted by IOM 
        (Institute of Medicine) and CNAC (Center for Naval Analysis) 
        and other information, the Commission concluded that there are 
        some instances, such as Aid and Attendance, in which the level 
        of SMC is inadequate to offset the burden placed on veterans by 
        their disabilities.

    In the VDBC report, Recommendation 6.1 states that ``Congress 
should consider increasing special monthly compensation where 
appropriate to address the more profound impact on quality of life.'' 
PVA supported that recommendation then, and we continue to advocate for 
this important change.
    One of the most important SMC benefits to PVA is Aid and Attendance 
(A&A). PVA would like to recommend that Aid and Attendance benefits 
should be appropriately increased. Title 38 U.S.C. establishes 
eligibility for Aid and Attendance benefits. Furthermore, 38 CFR sets 
the conditions for receipt of Aid and Attendance benefits as follows: 
(1) they (the veteran) cannot keep themselves ordinarily clean and 
presentable, (2) they cannot dress and undress themselves, (3) they 
frequently need adjustment of special prosthetic or orthopedic 
appliances, which by reason of the particular disability cannot be done 
without aid, (4) they cannot feed themselves due to the loss of 
coordination of upper extremities or extreme weakness, (5) they cannot 
attend to the wants of nature, (6) they have physical or mental issues 
that prevent them from avoiding the hazards or dangers of daily life. 
Attendant care is very expensive and often the Aid and Attendance 
benefits provided to eligible veterans do not cover this cost.
    As an example, a particular PVA member who lives in Florida 
incurred a spinal cord injury while serving in Vietnam. He was shot 
through the neck and his spinal cord was severed at the C2/C3 level 
resulting in quadriplegia. In order to operate his power wheelchair, he 
has to use a ``sip-and-puff'' mechanism. Fortunately, his mother 
provided most of his attendant care to him throughout his adult life. A 
couple of years ago, his mother passed away, and he has no other 
immediate family to take care of him. He is now paying for a full-time 
attendant, but his cost for attendant care far exceeds the amount he 
receives as an SMC-Aid and Attendant beneficiary at the R2 compensation 
level (the highest rate available).
    Finally, PVA would like to suggest that the Veterans Benefits 
Administration (VBA) should develop experts who deal expressly in SMC 
benefits. The complex nature of this particular component of VA 
compensation can be overwhelming for many claims rating specialists who 
work secondarily on SMC. With in-house experts who deal specifically 
with SMC cases, the VA could more accurately and efficiently decide 
these claims. In order to promote this demonstrated need, PVA has 
prepared a Guide for Special Monthly Compensation (SMC) that has been 
adopted by the VA for use when training ratings specialists. This 
information has been included on the VA's intranet. The PVA Guide has 
also been distributed through VBA's Special Monthly Compensation 
training. We would also suggest that the claims process could likewise 
benefit from specialized staff members who deal strictly with radiation 
claims and claims of former prisoners of war.
   Specially Adapted Housing Grant and Adaptive Automobile Assistance
    In recent years, Congress has taken significant steps to improve 
the Specially Adapted Housing grant program. Unfortunately, less has 
been done to improve Adaptive Automobile assistance. These two benefits 
in particular are keys to a veteran living an independent life.
    PVA is pleased that Congress recently made significant improvements 
to the Specially Adaptive Housing benefits provided by the VA to 
severely disabled veterans. These changes were incorporated into P.L. 
110-289, the ``Housing and Economic Recovery Act of 2008.'' The new 
housing law makes an appropriate increase in the maximum dollar amount 
for the Specially Adaptive Housing (SAH) Grant. That amount is 
increased to $60,000. The last increase was in 2003, when it was 
increased to $50,000 from $48,000. Construction materials cost for 
single family homes in recent years has increased approximately 16 
percent (U.S. Bureau of Labor Statistics). The new law also makes an 
adjustment to the maximum amount each year based on the residential 
home cost-of-construction index. This needed increase was recommended 
in The Independent Budget, co-authored by Paralyzed Veterans of 
America, Disabled American Veterans, Veterans of Foreign Wars, and 
AMVETS.
    The law allows for the VA to pay for home improvements and 
structural alterations for members of the Armed Forces that incur a 
severe disability and who would otherwise qualify for the SAH grant as 
a veteran. In the past, active duty servicemembers had to be discharged 
from military service to apply for the SAH benefit. This new change in 
the law allows a servicemember who will not return to active duty 
because of a service-connected disability, to make the necessary 
alterations to their home while waiting for their final discharge. 
Additionally, the law allows an individual that qualifies for the home 
modification grant, to use that grant to modify the home of a family 
member while residing with that family member (known as Temporary 
Residence Adaptation). It is common for a servicemember that has 
suffered a traumatic injury to live with family members during their 
rehabilitation and a period afterward.
    Unfortunately, few eligible claimants have taken advantage of the 
Temporary Residence Adaptations (TRA) grant, which are limited to 
$16,000 and counts against the SAH allowance of $60,000. In a recent 
report, the Government Accountability Office (GAO Report GAO-09-637R 
June 15, 2009) found that only nine recipients have used the grant 
since the change in law and suggested that the low usage may be 
improved if the grant were a stand alone program. We believe Congress 
should consider this option.
    One of the common injuries associated with service in Operation 
Enduring Freedom and Operation Iraqi Freedom is severe burns. This 
change in law for the overall SAH program will allow individuals that 
have suffered severe burns to use the Specially Adaptive Housing Grant 
for necessary modifications in their home environment. These 
modifications could involve expensive air filter systems and electronic 
temperature controls for the home.
    We would encourage the Subcommittee to further examine some of the 
recommendations included in the FY 2010 Independent Budget regarding 
the adaptive housing benefits. Specifically, The Independent Budget 
calls for establishing a grant for adaptation of a second home when a 
veteran chooses to replace his or her current adapted home. The 
Independent Budget also calls for an increase in the grants for 
adaptation of homes for veterans living in family owned temporary 
residences from the current $14,000 to $28,000 for veterans with a 
total and permanent service-connected disability and from $2,000 to 
$5,000 for veterans with service-connected blindness.
    As previously mentioned, we are concerned that the automobile grant 
and adaptive automobile assistance has not kept pace with the current 
market. Currently, the automobile grant provides $11,000 toward the 
purchase of a new car for severely disabled veterans. However, in 2008, 
the average cost of a new car was $28,500. When the automobile grant 
was first created by Congress, it covered the full cost of a new 
vehicle. In 1946, the benefit covered 85 percent of the cost of a new 
vehicle; today the grant only covers 39 percent of the cost. The 
Independent Budget recommends that the grant be increased to 80 percent 
of the cost of a new vehicle ($22,800) and be indexed annually based on 
the rising cost of living.
                Service-Disabled Veterans' Insurance and
                   Veterans' Mortgage Life Insurance
    In accordance with the recommendations of The Independent Budget, 
PVA also believes that there are some necessary improvements in the 
Service-Disabled Veterans' Insurance (SDVI) and Veterans' Mortgage Life 
Insurance (VMLI). With regards to the SDVI benefit, The Independent 
Budget for FY 2010 recommended that the insurance benefit be increase 
from $10,000 to $50,000. However, we recently supported legislation--
H.R. 2713--considered by this Subcommittee that would increase the 
maximum amount of protection from $10,000 to $100,000, and would 
increase the supplemental insurance for totally disabled veterans from 
$20,000 to $50,000. Ultimately, we would like to see the Subcommittee 
consider legislation that would increase SDVI to the maximum benefit 
level provided by the Servicemembers' and Veterans' Group Life 
Insurance (SGLI/VGLI) programs. We also believe that the premium waiver 
for 100 percent total and permanent service-connected veterans should 
be automatic, rather than require an unnecessarily long application 
process for the waiver.
    The Independent Budget also recommends that VMLI be increased from 
the current benefit of $90,000 to $150,000. The last time VMLI was 
increased was in 1992. Since that time, housing costs have risen 
dramatically, but the VMLI benefit has not kept pace. As a result, many 
catastrophically disabled veterans have mortgages that exceed the 
maximum value of VMLI.
                    Expediting Provision of Benefits
    Recent hearings have demonstrated how far behind the VBA is in 
using information technology in its claims adjudication process. While 
we believe that the entire claims process cannot be automated, there 
are many aspects and steps that certainly can. We have long complained 
to the VA that it makes no sense for severely disabled veterans to 
separately apply for the many ancillary benefits to which they are 
entitled. Their service-connected rating immediately establishes 
eligibility for such benefits as the Specially Adapted Housing grant, 
adaptive automobile equipment, and education benefits. However, they 
still must file separate application forms to receive these benefits. 
That makes no sense whatsoever.
    Moreover, certain specific disabilities require an automatic rating 
under the disability ratings schedule. For example, it does not take a 
great deal of time and effort to adjudicate a below knee single-leg 
amputation. An advanced information technology system can determine a 
benefit award for just such an injury quickly. We believe that it is 
time for the VA to automate consideration of ancillary benefits and 
specific ratings disabilities that are generally automatic.
                            Quality of Life
    Mr. Chairman, one of the subjects that often generates a great deal 
of debate when discussing VA compensation benefits is the consideration 
of quality of life. PVA has expressed serious concerns in the past, 
particularly during the deliberations of the Veterans' Disability 
Benefits Commission and the Dole-Shalala Commission, with the assertion 
that the schedule for rating disabilities is meant to reflect the 
average economic impairment that a veteran faces. Disability 
compensation is in fact intended to do more than offset the economic 
loss created by a veteran's inability to obtain gainful employment. It 
also takes into consideration a lifetime of living with a disability 
and the every day challenges associated with that disability. It 
reflects the fact that even if a veteran holds a job, when he or she 
goes home at the end of the day, that person is still disabled.
    Seriously disabled veterans have the benefit of many adaptive 
technologies to assist with employment. But these technologies do not 
help them overcome the many challenges presented by other events and 
activities that unimpaired individuals can participate in. Most, if not 
all, spinal cord injured veterans no longer have the ability to 
conceive children with a loved one. They cannot perform normal bowel 
and bladder functions or bathe themselves. They cannot play ball with 
their children or carry them on their shoulders. Severely disabled 
veterans suffer from potential negative stereotypes due to disability 
in all aspects of their lives.
    There can be no question but that VA compensation includes a real 
and significant component that is provided as an attempted response to 
the impact of a disability on the disabled veteran's quality of life. 
And yet, we would argue that compensation could never go too far in 
offsetting the impact that a veteran's severe disability has on his or 
her quality of life.
    Mr. Chairman and Members of the Subcommittee, PVA would once again 
like to thank you for the opportunity to provide our views on ancillary 
benefits and quality of life issues. We look forward to working with 
you to improve these benefits.
    Thank you again. I would be happy to answer any questions that you 
might have.

                                 
   Prepared Statement of Ronald B. Abrams, 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 ancillary VA benefits and 
veterans' quality of life issues.
    NVLSP is a nonprofit veterans service organization founded in 1980. 
Since its founding, NVLSP has represented thousands of claimants before 
the Board of Veterans' Appeals and the Court of Appeals for Veterans 
Claims. 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.
    The VA, under 38 U.S.C. Sec. 1114 and 38 CFR Sec. 3.350 has a level 
of monetary benefits, described as Special Monthly Compensation (SMC). 
SMC benefits are paid in addition to the basic rates of compensation 
payable under the Schedule for Rating Disabilities. SMC is paid to 
compensate veterans for service-connected disabilities such as loss of 
use of a hand or a foot, impairment of the senses, loss of vision or 
hearing, and for combinations of severely disabling service-connected 
disabilities. While the basic rates of compensation are predicated on 
the average reduction in earning capacity, special monthly compensation 
benefits are based on noneconomic quality of life issues such as 
personal inconvenience, social inadaptability, or the profound nature 
of the disability.\1\
---------------------------------------------------------------------------
    \1\ VA Gen. Coun. Prec. 5-89 (Mar. 23, 1989).
---------------------------------------------------------------------------
    A recent decision by the United States Court of Appeals for 
Veterans Claims (CAVC or Court) reveals that the VA has unlawfully 
limited the impact of a section of 38 U.S.C. Sec. 1114. The Department 
of Veterans Affairs, the veterans service organizations and the 
Congress should act now to implement this CAVC decision.
    The statute involved, Section 1114(s), mandates increased benefits 
for veterans who are so unlucky as to have a service-connected 
disability rated as total, and suffer from additional service-connected 
disability or disabilities independently ratable at 60 percent or more. 
This benefit is usually called SMC(s).
    Currently, a veteran entitled to SMC(s) without dependents is paid 
$320 more per month than a veteran entitled to a total evaluation 
($2,993 as opposed to $2,673). The idea behind this benefit is that a 
veteran who has a service-connected condition that causes total 
disability and has significant other disabilities should be paid more 
than a veteran who just has the one disability.
    The problem is that for many years the VA implemented Section 
1114(s) with a regulation that unlawfully limited the beneficial impact 
of the statute. The regulation, 38 CFR Sec. 3.350(i)(1), requires a 
veteran to have one service-connected disability rated as 100 percent 
disabling to be considered for SMC(s) benefits. This regulation, 38 CFR 
Sec. 3.350(i)(1) states:

       [T]he special monthly compensation provided by 38 U.S.C. 1114(s) 
is payable where the veteran has a single service-connected disability 
rated as 100 percent and, has additional service-connected disability 
or disabilities independently ratable at 60 percent, separate and 
distinct from the 100 percent service-connected disability and 
involving different anatomical segments or bodily systems.

    The language of the statute, however, requires total disability 
based on a single condition--not a single disability that qualifies for 
a 100 percent schedular evaluation. In other regulations, the VA has 
acknowledged that a service-connected disability that causes impairment 
of mind or body which is sufficient to render it impossible for the 
average person to follow a substantially gainful occupation is a total 
disability. See 38 CFR Sec. Sec. 3.340(a), 4.15, 4.16(a).
    In Bradley v. Peake,\2\ the Court of Appeals for Veterans Claims 
(CAVC) finally dealt with this issue. This veteran sustained multiple 
shell fragment wounds from a booby trap in Vietnam. He is service-
connected for thirteen compensable scars and 10 separate muscle group 
injuries. He is also entitled to compensation benefits for Post-
traumatic stress disorder (PTSD).
---------------------------------------------------------------------------
    \2\ 22 Vet. App. 280, (2008).
---------------------------------------------------------------------------
    The veteran was granted total disability based on individual 
unemployability (TDIU) from March 25, 1983, until June 8, 1992, and 
then he was granted a 100 percent combined rating from June 8, 1992. 
Between 1971 and 2006, the VA made thirteen different adjudications to 
come to the above conclusions.
    The Board of Veterans' Appeals (BVA or Board) denied Mr. Bradley's 
claim for SMC(s) and he appealed that decision to the CAVC. The CAVC 
held that:

      Section 1114(s) does not limit ``a service-connected 
disability rated as total'' to only a schedular rating of 100 percent--
it includes a disability that would support the grant of TDIU.
      When a veteran has several service-connected conditions 
that combine to a 100 percent evaluation, if the veteran would be 
monetarily advantaged by a having just one service-connected condition 
support a total TDIU rating and the veteran has other service-connected 
conditions that combine to 60 percent, the VA is obligated to rate the 
case to maximize the benefits that can be paid to the veteran. This is 
true because under 38 CFR Sec. 3.103(a) the VA is obligated to render a 
decision which grants every benefit that can be supported in law.
      Because SMC benefits must be granted when a veteran 
becomes eligible without need for a separate claim,\3\ any effective 
date must be based on that point in time when the evidence first 
supported an award of SMC, which may be well before the veteran raised 
this issue. See 38 U.S.C. Sec. Sec. 5110(a), 1114(s); 38 CFR 
Sec. 3.400(o).
---------------------------------------------------------------------------
    \3\ Akles v. Derwinski, 1 Vet.App. 118, 121 (1991).

    The Bradley decision should have a major impact both on current 
claims and claims that have been previously adjudicated. Many severely 
disabled veterans should receive significant retroactive payments.
    The positive impact of Bradley will improve the quality of life for 
those veterans who are unfortunate enough to suffer from several severe 
service-connected disabilities. In addition, now the VA, upon request, 
will have to readjudicate Bradley type claims and pay increased 
benefits from the date the evidence first supported an award of SMC(s). 
We hope that the VA will take it upon itself to encourage its raters to 
review previous rating for these potential retroactive benefits.
    The Bradley decision gives the VA the opportunity to quickly 
improve the financial situation of many veterans. Therefore, we have 
contacted the VA and asked them to consider amending certain sections 
of Adjudication Procedures Manual M21-1 MR that may be interpreted as 
requiring a single schedular 100 percent rating as a requirement for 
SMC(s).\4\ In addition we have asked that the VA to re-rate cases that 
it recognizes as having the potential for increased benefits under the 
holding in Bradley.
---------------------------------------------------------------------------
    \4\ M21-1 MR Part IV, Subpart II, Chapter 2, par. 56a.
---------------------------------------------------------------------------
    That completes my testimony. I would be pleased to answer any 
questions the Members of the Subcommittee may have.

                                 
             Prepared Statement of Thomas Zampieri, Ph.D.,
     Director of Government Relations, Blinded Veterans Association
INTRODUCTION
Chairman Hall, Ranking Member Lamborn, and Members of the House 
Veterans' Affairs Subcommittee on Disability Assistance and Memorial 
Affairs:

    On behalf of the Blinded Veterans Association (BVA), thank you for 
this opportunity to present our testimony today regarding veterans' 
ancillary benefits and quality of life issues affecting them.
    BVA was founded in 1945 and Congressionally chartered in 1958 as 
the only Veterans Service Organization (VSO) exclusively dedicated to 
serving the needs of our Nation's blinded veterans and their families. 
The organization's governing body and members are proud of BVA's 
continuing advocacy of the important benefits and health care issues 
affecting them.
    BVA has joined with other VSOs in awaiting action on 
recommendations provided by the Veterans Disability Benefits Commission 
(VDBC) that would improve the benefits and services for our Nation's 
wounded. After reviewing the recent 7-month report issued by Economics 
Systems, Inc. (Econsys), however, BVA questions some of the 
recommendations on Quality of Life for veterans with service-connected 
sensory disabilities. As this Subcommittee is already aware, VDBC was 
created by Public Law 108-136. With the assistance of the Institute of 
Medicine and many other organizations, appointed commissioners spent 
more than 2 years reviewing extensively current VA benefits and 
compensation for disabled veterans. Its final report made clear that 
the current system required fundamental changes, one of which was the 
mechanism used in determining benefits affecting Quality of Life 
payments.
    BVA is concerned that Econsys presented this research in order to 
develop a Quality of Life measurement tool based on the 7-month time 
frame on reporting. We believe that the complex objective and 
subjective ``instruments'' for a new payment system will require more 
consideration by Congress than what is being presented here today. 
Quality of Life measurements themselves are not only objective measures 
of Activities of Daily Living (ADL), but the subjective concepts of 
pain levels, negative emotions, and social difficulties and if not 
carefully considered, the latter could easily be excluded from 
determinations of fair measurement in looking at the impact of Quality 
of Life compensation for service-connected disabilities. We strongly 
refute the statement on Page 22 of the Econsys report that ``the lowest 
level of Quality of Life loss for disabled veterans was for skin, ear, 
and eye body systems.'' We believe that Members of Congress would also 
question such a claim.
BLINDED VETERANS' QUALITY OF LIFE
    Mr. Chairman, as fellow veterans who have lost sensory function 
could all testify, the reactions to blindness and disability are 
varied. Fear, overwhelming stress and anxiety, depression, and anger 
are just some of the typical responses to the loss of vision. Our 
degree of independence is dramatically diminished and our quality of 
life completely disrupted and forever changed. Loss of vision is 
accompanied by the sudden loss of freedom to move around safely and 
independently. In order to overcome the limitations imposed by vision 
loss, it has been necessary for us to undergo the type of continuous 
and comprehensive rehabilitation that is always changing as we adapt to 
new challenges--and as the field of rehabilitation and technology 
evolve.
    We must constantly learn new ways of coping with and managing our 
lives in the absence of vision as these changes in our world bring with 
them the requirement for more training and education in new methods and 
techniques in order to optimize their relevance for us personally. It 
would be wrong to think that once a veteran has received some training 
that the support and current benefits rating system assistance needed 
is entirely sufficient. Impact on Quality of Life from the catastrophic 
loss incurred must be considered. Blinded veterans have been successful 
in adapting to adversity in large part through the support and 
assistance received from families and also through the benefits and 
services provided by VA Blind Rehabilitation Service programs and a 
variety of VA benefits. BVA found this statement in the Econsys report 
``That consensus on a definition of overall QoL still eludes many 
researchers. QoL is a multi-dimensional construct that is typically 
defined on the basis of the specific form of the research.''
    Please consider, Mr. Chairman, that the process of recovery from 
any tragic or traumatic event is characterized by a period of grieving 
followed by rehabilitation and restoration. Substantial changes are 
normally required as a result of such shattering events before a new 
and productive life can be discovered. Similar to the grief experienced 
by those who have experienced any type of catastrophic event, blinded 
veterans also must grieve their loss of vision. The late Father Thomas 
Carroll, a recognized expert in the field of blindness and 
rehabilitation after World War II, wrote that people who lose their 
vision must first grieve for the death of the sight itself. Grieving is 
a very individualized process that lacks definite time limits. Only as 
the grieving process ends is the individual ready to engage in 
rehabilitation. Perception plays the one major role in an individual's 
ability to live life. Although all five of our body's senses play a 
significant role, the visual system is critical to perception, 
providing more than 70 percent of human sensory awareness of everything 
we know, with hearing being another critical component of our sensory 
awareness. Considering that hearing losses and visual impairments are 
two common sensory losses that have also occurred from Improvised 
Explosive Devices (IED) in Iraq and Afghanistan, we cannot 
overemphasize the importance of assessing them carefully in the process 
of rating such sensory injuries common with Traumatic Brain Injuries.
    Vision also provides information about environmental properties. It 
allows individuals to act in relation to such properties. In other 
words, perceptions allow humans to experience their environment and 
their Quality of Life in order to live within it. Individuals perceive 
what is in their environment by a filtered process that occurs through 
a complex, neurological visual system. With various degrees of visual 
loss come greater difficulty to clearly adjust and see the environment, 
resulting in increased risk of injuries, loss of functional ability, 
and unemployment. Impairments range from losses in the visual field, 
visual acuity changes, loss of color vision, light sensitivity 
(photophobia), and loss of the ability to read and recognize facial 
expressions. Complete blindness is considered by VA to be a 
catastrophic loss of a body system in determining service-connected 
benefits.
CURRENT SYSTEM REVIEW
    VDBC was faced with a complex task that has confronted all levels 
of local, State, and Federal Government agencies trying to regulate 
disability ratings over many decades. Their comprehensive findings 
included the recommendation that VA should develop Quality of Life 
compensation. On February 26, 2008, before this Committee, VDBC 
Chairman Terry Scott testified that ``there has been an implied but 
unstated congressional intent to compensate disabled veterans for 
impairment of quality of life due to their service-connected 
disabilities.'' The attempt to determine the validity of the current 
rating and disability compensation systems for economic loss is 
appropriate but VDBC found ``no current compensation for the impact of 
disability on the quality of life.'' The Veterans Benefits 
Administration (VBA) does not adequately compensate a veteran who has 
suffered from a significant life-altering disability that impacts daily 
activity and functioning.
    Veterans who cannot be classified as permanent service-connected 
disabled should indeed be considered as such on the basis of Quality of 
Life. Assessments should be done on impact regarding their ability to 
perform daily activities. BVA feels strongly that the soldiers, airmen, 
sailors, or marines who have developed blindness or another 
catastrophic disability should all be rated and treated equitably and 
with the appropriate support needed in the processing of their claims, 
both for economic loss as well as Quality of Life losses. A system in 
which one severely disabled veteran receives a lower percentage of 
compensation for an injury than that of another veteran will be viewed 
as unfair and add to an already existing perception that the system is 
adversarial for some veterans.
    Many national surveys demonstrate that in the past decade, since 
the passage of the Americans with Disabilities Act, very little 
progress has been made in the employment rates of the disabled. Among 
several sources, one being the respected Cornell University Centers on 
Disability Statistics Annual Disability Status Report for FY 2007 
(www.disabilitystatistics.org), data indicate that the country's 
disabled non-institutionalized population of working adults age 21-64 
still have significantly lower rates of employment, lower earnings, and 
lower household income than the non-disabled when comparisons are made 
using several disability types. Examples of such research findings 
follow:

      The 2007 Census Bureau's survey found that 60.1 percent 
of disabled men between ages 21-64 and with one disability were 
employed. When reviewing data on those with a severe disability 
affecting daily functioning skills, the rate is only 32 percent.
      Despite improvements in transportation accessibility, 
levels of participation in social, cultural, and commercial activities 
have not increased measurably during the past decade and 30 percent of 
the disabled in rural regions of the country have no access to public 
transportation.
      The Survey of Income and Program Participation (SIPP) 
found that, in 2007, 24.7 percent of working age adults who were 
limited in their ability to work lived at or below the poverty level. 
Some 22.1 percent with a sensory disability lived at or below that 
level.
      Census Bureau American Community Survey (ACS) in 2007 
found that individuals with a sensory disability age 16-64 in the 
general population lived in households with a median income $22,600 
lower than that of average households containing non-disabled members.
      From FY 1996 to FY 2005, the total Federal workforce 
increased by more than 78,000 employees. The total represents a net 
increase of about 3 percent. During that same time period, the number 
of Federal employees with targeted disabilities decreased from about 
30,000 to approximately 25,000. The drop represents a net decrease of 
16 percent.
      The National Council on Disabilities' March 2009 Report 
reveals that the percentage of workers has declined steadily since 1994 
and is now at its lowest level in two decades. Even with ADA and other 
attempts to increase disability participation in the workforce, public 
discrimination and negative attitudes toward those with disabilities 
persist in the workforce environment.

    The claim has been made in recent times that emerging technology 
has made access to employment and independent living for the disabled 
easier than ever before. We believe evidence strongly suggests that 
this is not the case. According to National Council on Disability (NCD) 
Chairperson John R. Vaughn, the United States already has in place a 
string of Federal laws and regulations designed to guarantee various 
levels of access to telecommunications products and services. He states 
further that such service nevertheless leaves gaps in coverage and are 
rapidly becoming outdated as the analog technologies upon which they 
were premised are being substituted with technologies that are 
digitally and Internet-based. As Congress, the Federal Communications 
Commission, and other Federal or State agencies take on the daunting 
task of defining regulatory measures that will govern the deployment of 
these next generation communication technologies, Mr. Vaughn believes 
that they should include safeguards to ensure that individuals with 
disabilities not be left behind. Representative Ed Markey (D-MA-7) 
introduced H.R. 3101 to help individuals with sensory difficulties deal 
with problems of access to new technology. BVA cautions that while 
advances in technology for the blind help with some daily activities, 
they do not replace the overall losses in Quality of Life experienced 
while trying to perform all of life's routine but vitally important 
functions.
    Too many potential and actual accessibility barriers to new 
technologies already exist. Section 508 compliance has even been a 
problem for VA. Our blinded and visually impaired veterans working as 
Field Service Representatives, have, for example, had problems using 
the information technology system as it relates to benefits and filing 
claims. Inaccessible user interfaces on consumer equipment, lack of 
interoperable and reliable text transmissions, and obstacles to video 
and web programming all threaten the ability of individuals with 
functional limitations to gain equal access to these products and 
services. Legislative and regulatory actions are needed to eliminate 
such barriers and to safeguard future access to modern communications 
and information technologies and services, regardless of the form 
(text, video, or voice) and nature of the transmission media (i.e., 
Public Switched Telephone Network [PSTN]; Internet Protocol [IP]; 
wireless, cable, satellite, copper wire, fiber-optic network; dial-up 
or high speed) over which such information or communication travels. 
While technology may be constantly changing with the intent to benefit 
work environments universally, the results are not always equal or even 
similar. We request that this perspective be included when considering 
such complex issues as the catastrophically disabled veteran's 
individual Quality of Life compensation.
    Representatives Edolphus Towns (D-NY-10) and Cliff Stearns (R-FL-6) 
recently introduced The Pedestrian Safety Enhancement Act of 2009 (H.R. 
734) with 124 co-sponsors. The proposed act mirrors legislation 
introduced in the 110th Congress. The Pedestrian Safety Enhancement Act 
would require the Department of Transportation to research and 
ultimately set forth a minimum sound standard that must be met by 
hybrid and electric vehicles so that blind and other pedestrians may 
travel safely and independently in urban, rural, and residential 
environments. For the blind disabled, emerging new technology in many 
cases presents dangers in the pedestrian environment of crossing 
streets. This factor is definitely a Quality of Life factor for blinded 
veterans. BVA very much appreciates Mr. Stearns' leadership especially 
on this issue. BVA has also found complaints from the deaf and blind 
with warning systems failing during natural disasters and barriers to 
accessing shelters for the disabled in these disasters as examples of 
QoL fear for those seriously disabled.
CONCLUSIONS
    Mr. Chairman and Members of this Subcommittee, the Blinded Veterans 
Association would appreciate inclusion of the following issues in your 
list of changes as VA moves forward in attempting to compensate 
service-connected veterans suffering catastrophic injuries as result of 
their service to our Nation. It is essential that physical health, 
psychological health, social relationships, and economic situations be 
considered as these benefits changes occur.

    1.  The quality, timeliness, accuracy, and consistency of the 
disability rating system and scale should be improved to include 
Quality of Life for catastrophically disabled veterans as defined by 
VA. Both objective and subjective measurements should be included. 
Recommendations should consider factors such as education level of the 
disabled veteran and the impact of the veteran's injuries on the 
caregivers. In short, physical health, psychological well-being, social 
relationships, and economic situations are all essential aspects of 
Quality of Life that must be adequately included in a measurement tool.
    2.  Blinded veterans must experience a seamless transition from the 
DoD to the VA disability rating of benefits. Accomplishment of this 
objective requires that DoD and VA complete the integration of medical 
computer health records systems. It also requires that the continuum of 
health care and benefits processing be done efficiently--through a 
special office of compliance if necessary.
    3.  Benefits and services should be provided to collectively 
compensate for the negative consequences of service-connected 
disability on average earning capacity, the ability to engage in normal 
life activities, and Quality of Life. They should not establish a dual 
compensation system that further fragments the disability claims 
process.
    4.  The VDBC's ``Institute of Medicine 21st Century System for 
Evaluating Veterans for Disability Benefits'' and other studies have 
found that those with Post-traumatic stress disorder and Traumatic 
Brain Injury need new and updated scientific methods for determining 
benefits. This would involve an advisory Committee, which would include 
stakeholder representatives within VBA, to ensure transparency in this 
evolving process. Multiple reports reference problems for TBI and PTSD 
veterans not receiving benefits appropriate for their service connected 
injuries or mental health problems.

                                 
    Prepared Statement of Lonnie Bristow, M.D., Chair, Committee on
 Medical Evaluation of Veterans for Disability Benefits, Board on the 
                                 Health
  of Select Populations, Institute of Medicine, The National Academies
    Good morning, Chairman Hall, Ranking Member Lamborn, and Members of 
the Committee. My name is Lonnie Bristow. I am a physician and a Navy 
veteran. I am a member of the Institute of Medicine and have served as 
the president of the American Medical Association. I am pleased to 
appear before you again to testify about improving the disability 
benefits system of the Department of Veterans Affairs (VA).
    I had the great pleasure and honor of chairing the Institute of 
Medicine (IOM) Committee on Medical Evaluation of Veterans for 
Disability Compensation, which was established at the request of the 
Veterans' Disability Benefits Commission and funded by the Department 
of Veterans Affairs. The IOM was established in 1970 under the charter 
of the National Academy of Sciences to provide independent, objective 
advice to the Nation on improving health.
    The Committee I chaired, which reported in 2007, was asked to 
evaluate the VA Schedule for Rating Disabilities and related matters, 
including the medical criteria for ancillary benefits. My task today is 
to present to you the Committee's recommendations on improving 
ancillary benefits, which are in Chapter 6 of our report, A 21st 
Century System for Evaluating Veterans for Disability Benefits. I will 
also comment on our recommendation concerning quality of life, which is 
in Chapter 4 of the report.
                Medical Criteria for Ancillary Benefits
    The Veterans' Disability Benefits Commission asked the Committee to 
focus on the appropriateness of medical criteria for five specific 
ancillary benefits available to veterans being compensated for service-
connected disabilities. These were:

    1.  Vocational rehabilitation and employment (VR&E) services,
    2.  Automobile assistance and adaptive equipment,
    3.  Specially adapted housing grants,
    4.  Special housing adaptation grants, and
    5.  Clothing allowances.

    The Committee was asked to consider, from a medical viewpoint, the 
appropriateness of the specific conditions that a veteran is required 
to have in order to receive these ancillary benefits. For example, 
assistance in purchasing a specially adapted automobile or other 
vehicle requires

      loss, or permanent loss of use, of one or both feet; or
      loss, or permanent loss of use, of one or both hands; or
      permanent impairment of vision in both eyes with a 
central visual acuity of 20/20 or less in the better eye with 
corrective glasses, or central visual acuity of more that 20/200 if 
there is a field defect in which the peripheral field has contracted to 
such an extent that the widest diameter of visual field has an angular 
distance no greater than 20 degrees in the better eye.

    To qualify for assistance in purchasing a specially modified home, 
a veteran must have a permanent and total service-connected condition 
or conditions due to

      the loss or loss of use of both lower extremities, such 
as to preclude locomotion without the aid of braces, crutches, canes, 
or a wheelchair; or
      the loss or loss of use of both upper extremities, such 
as to preclude use of the arms at or above the elbows; or
      blindness in both eyes, having only light perception, 
plus loss or loss of use of one lower extremity, or
      the loss or loss of use of one lower extremity together 
with residuals of organic disease or injury, or the loss or loss of use 
of one upper extremity, which affects the functions of balance or 
propulsion as to preclude locomotion without the aid of braces, 
crutches, canes, or a wheelchair.

    These medical eligibility criteria are very specific and require a 
very high degree of impairment. They are so specific that they may not 
include veterans with somewhat different impairments that hinder 
mobility, such as multiple sclerosis.
                  Assessing Ancillary Benefit Criteria
    When the Committee reviewed ancillary benefits, we found that they 
were

      created piecemeal over time.
      not designed as part of a comprehensive program.
      not systematically updated and, in some cases, not 
indexed for inflation.
      not based on an empirical analysis of veterans' actual 
needs or loss of quality of life.
      not evaluated for their effectiveness in meeting 
veterans' needs or loss of quality of life (except for VR&E).

    In 2004, a VA-appointed task force on VR&E recommended that VA 
coordinate its health, VR&E, and compensation programs to achieve a 
broader, more integrated approach to assisting veterans move from 
military to civilian life. The task force suggested a more 
individualized approach including

      continuing and systematic medical examinations of 
veterans for better informed career and employment decisions;
      early, routine functional capacity assessments by 
vocational experts for both disability compensation and rehabilitation 
decisions; and
      a change from a sequential series of required steps to a 
more individualized sequence taking into consideration the veteran's 
education, vocational rehabilitation, and compensation needs.

    The Committee agreed with these recommendations--and the veteran-
centered concept of service delivery underlying them--and added some 
recommendations of its own.
          IOM Recommendations for Improving Ancillary Benefits
    The Committee offered four recommendations for improving ancillary 
benefits.

      The lack of data on the need for or effectiveness of 
ancillary benefits made it impossible for the Committee to assess the 
appropriateness of the medical criteria requirements. The eligibility 
requirements were not based on research relating needs to rating level 
or type of impairment, so it is possible that the benefits could be 
changed to serve veterans better or to address other needs. 
Accordingly, we recommended that ``VA should sponsor research on 
ancillary benefits and obtain input from veterans about their needs. 
Such research could include conducting intervention trials to determine 
the effectiveness of ancillary services in terms of increased 
functional capacity and enhanced health-related quality of life.''
      In addition to obtaining data on the mitigating effects 
of each type of benefit on functional limitations, work disability, and 
quality of life, a better approach to assessing the needs of individual 
veterans is needed. The Committee concluded that ``An assessment of 
health care and rehabilitation needs should be performed in conjunction 
with the assessment of compensation needs, so that the veteran will 
benefit from all services VA provides to help veterans with 
disabilities succeed in civilian life . . . The assessment should also 
include the need for education, vocational rehabilitation, and other VA 
ancillary services and benefits, which, together, could enhance a 
veteran's ability to succeed in civilian life.'' Specifically, we 
recommended that ``VA and the Department of Defense should conduct a 
comprehensive multidisciplinary medical, psychosocial, and vocational 
evaluation of each veteran applying for disability compensation at the 
time of service separation.''
      There is no medical basis for the current 12-year limit 
on eligibility for vocational rehabilitation services, although there 
may be administrative convenience or fiscal control reasons. Some 
employment and training needs may not adhere to a 12-year deadline. For 
example, emerging assistive and workplace technologies (e.g., 
computing) may provide training or retraining opportunities for 
veterans with disabilities through continuing education of various 
kinds. New types of work may also emerge for which veterans with 
disabilities could be trained. Advancements in medical knowledge and 
breakthroughs in medical technology also do not abide by a 12-year 
limit. The Committee recommended that ``The concept underlying the 
extant 12-year limitation for vocational rehabilitation for service-
connected veterans should be reviewed and, when appropriate, revised on 
the basis of current employment data, functional requirements, and 
individual vocational rehabilitation and medical needs.''
      Finally, the Committee was concerned about low rate of 
participation in the VR&E program. For example, in FY 2005, about 
40,000 veterans applied for VR&E services and were accepted. But 
160,000 veterans began receiving benefits for service-connected 
disabilities that year, and the pool of those potentially eligible from 
prior years is much larger. Also, in recent years, between a quarter 
and a third of the participants had not completed the program. We 
concluded that VA should explore ways to increase participation in this 
program, and we recommended that ``VA should develop and test incentive 
models that would promote vocational rehabilitation and return to 
gainful employment among veterans for whom this is a realistic goal.''
     IOM Recommendation on Compensating for Loss of Quality of Life
    The Committee did not view the ancillary benefits that it was asked 
to review as a form of compensation for loss of quality of life. We 
considered them as services to improve functional mobility and 
employability.
    Rather than consider if and to what degree that benefits such as 
adapted housing and automobiles, or Special Monthly Compensation, help 
to compensate for loss of quality of life, the Committee recommended 
that quality of life be measured directly. Then, if it is found that 
veterans experience an average loss of quality of life for a given 
disability that exceeds the average loss of earning capacity as 
measured by the Rating Schedule, we recommended that VA compensate for 
the additional loss.
    We noted that VA already uses a quality of life measurement tool, 
the SF-36, in research on clinical outcomes. We cited a quality-of-life 
methodology used on injured workers in Ontario, Canada, that found that 
impairment ratings systematically underpredicted the loss of quality of 
life that workers associated with certain disabilities. We said some 
additional work would have to be done by VA to adapt the SF-36 or 
Canadian or possibly some other quality of life tool for veterans' 
compensation purposes. If such a tool could be developed, and we 
believe that it could be, VA could use it to determine average quality 
of life of veterans with different disabilities, relative to 
nondisabled veterans. If it turns out that veterans experience a 
serious loss of quality of life for a condition that is not highly 
rated by the Rating Schedule, then VA should compensate for the 
disparity.
                              Conclusions
    In summary, the main points of our report A 21st Century System for 
Evaluating Veterans for Disability Benefits concerning ancillary 
benefits and quality of life are:

    1.  VA should more systematically research the needs of disabled 
veterans and the effectiveness of its ancillary benefit programs in 
meeting these needs and make needed revisions in these programs based 
on this research.
    2.  VA should assess the individual needs of disabled veterans at 
time of separation from military service and coordinate the delivery of 
the services identified in the assessment.
    3.  VA should develop a tool to measure the quality of life of 
disabled veterans, determine the extent to which the Rating Schedule 
already accounts for loss of quality of life, and--for disabling 
conditions in which average loss of quality of life is worse than the 
Rating Schedule indicates--compensate for the difference.

                                 
        Prepared Statement of George Kettner, Ph.D., President,
                Economic Systems Inc., Falls Church, VA
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to appear before you today to present my views on the 
effectiveness of ancillary benefits and ways that VA can improve the 
quality of life for disabled veterans. I present the major results of 
Economic Systems' Study of Compensation Payments for Service-Connected 
Disabilities completed last year for VA.
VA Disability Compensation Rating System
    The VA Disability Compensation Program provides monthly benefit 
payments to veterans who become disabled as a result of or coincident 
with their military service. Payments generally are authorized based on 
an evaluation of the disabling effects of veterans' service-connected 
physical and/or mental health impairments. Monthly payments are 
authorized in percentage increments from 10 percent ($117 in 2008) to 
100 percent ($2,527 in 2008). The process for determining ratings for 
disability compensation benefits uses the VA Schedule for Rating 
Disabilities (VASRD) to assign the level of severity of the 
disabilities.
    The VASRD contains over 700 diagnoses or disability conditions, 
each of which may have up to 11 levels of medical impairment. The 
lowest level of impairment starts at 0 percent then increases in 10 
percent increments up to a maximum of 100 percent. Disability 
compensation, as determined by the VASRD, is intended to replace 
average impairment in earnings capacity.
    Eligibility requires that a determination be made that the 
condition is a service-connected disability. Service-connected means 
that the condition occurred during or was aggravated by military 
service or, for chronic conditions, became evident within 1 year of 
discharge from the military. It does not require that the disability be 
work-related or be caused by conditions in the work environment. In 
this regard the VA Disability Compensation Program combines elements of 
both disability insurance voluntarily provided by employers and 
workers' compensation programs mandated by Government.
    Claimants with a combined rating between 60 to 90 percent who are 
determined to be unemployable solely as a result of service-connected 
conditions qualify for IU. Claimants determined to be entitled to IU 
qualify for the same benefit payment amount as those rated at the 100 
percent disability level. Conditions or circumstances that result in 
the claimant not being employable override the medical impairment 
rating. IU is similar to the Social Security Disability Insurance 
(SSDI) program in that both provide payments because the beneficiary is 
deemed to be unemployable.
    Special Monthly Compensation (SMC) is a benefit paid in addition to 
or instead of the VASRD-based benefits. Examples include: loss of or 
loss of use of organs, sensory functions, or limbs; disabilities that 
confine the veteran to his/her residence or result in the need for 
regular aid and attendance; a combination of severe disabilities that 
significantly affect mobility; and the existence of multiple, 
independent disabilities each rated at 50 percent or higher.
    We were asked by VA to address three major areas in our analysis: 
earnings loss resulting from service-connected disabilities, the impact 
of those disabilities on quality of life, and a possible transition 
benefit for veterans engaging in VA's vocational rehabilitation and 
employment program. In many ways, all three areas bear on this 
hearing's focus on ancillary benefits and quality of life. Some of our 
most significant findings relate to the following topics:

      Adequacy of Disability Compensation
      Disabilities Without Earnings Loss
      Additional Diagnostic Codes
      Earnings Loss for Veterans with Post-traumatic stress 
disorder (PTSD), Other Mental Health Disorders, and Traumatic Brain 
Injury (TBI)
      Methodology Used to Calculate Combined Degree of 
Disability
      Individual Unemployability Benefits
      Special Monthly Compensation
      Quality of Life Payment Options
      Transition Benefit Options.
Adequacy of Disability Compensation
    A crucial part of the loss of earnings analysis is determining the 
wages that the veteran would have received if he or she had not 
experienced a service-connected disability (SCD). The estimates of 
these potential earnings depend on tracking the actual earnings of 
individuals in a comparison group who did not have SCDs but who were 
otherwise matched to the disabled veterans on personal characteristics. 
The personal characteristics used to match the disabled veterans and 
the veterans without SCDs were age, gender, education at the time of 
entry into the service, and status as an officer or enlisted person 
when discharged from active duty. The analysis of loss of earnings was 
primarily based on comparisons of the earnings in 2006 of veterans with 
SCDs and without SCDs as provided to the study by the Social Security 
Administration.
    We found that overall, veterans with service-connected disabilities 
have earnings plus disability compensation 7 percent above their 
average expected earnings. The average was higher at each rating level 
except at the 100 percent rating level where the combined earnings and 
compensation was 9 percent less than expected. On average, veterans 
with a 30 percent or less combined disability rating did not experience 
serious wage loss. Approximately, 55 percent of 2.6 million veterans 
receiving disability compensation in 2007 were rated at 30 percent or 
less. Earnings losses for veterans with 40 percent to 90 percent 
combined rating did have wage losses, but their VA disability 
compensation more than made up the loss. In contrast, actual earnings 
losses plus disability compensation for veterans with 100 percent 
combined rating fall short of average expected earnings by about 9 
percent. In 2007, 9.1 percent of veterans receiving disability 
compensation had a combined rating of 100 percent, up from 7.5 percent 
in 2001.
    On the other hand, we found considerable differences in earnings 
loss across different diagnoses for a given rating level, resulting in 
serious inequity in the payment system. For example, for veterans with 
a 50 percent combined rating, the range was from no earnings losses for 
genitourinary or endocrine medical conditions to over 40 percent 
earnings losses for non-PTSD mental conditions. Veterans with PTSD, 
Other Mental Disorders, and infectious diseases experience greater 
earnings losses than veterans diagnosed with other medical conditions 
rated at the same level.
    One factor that is important to understanding the results of our 
earnings analysis is that it concentrates on veterans discharged since 
1980. Our results, therefore, differ from the previous study conducted 
by CNA Corporation for the Veterans' Disability Benefits Commission as 
that study included veterans discharged before 1980. Our study does not 
include veterans of World War II, Korea, and Vietnam (relatively few) 
because they are largely past or approaching retirement age and because 
data on their essential demographic and human capital characteristics 
are not available for analysis. We believe that this focus on more 
recent veterans is more appropriate for policy considerations for the 
future. More detailed discussion of the differences between our study 
and the study for VDBC is provided later.
Disabilities without Earnings Loss
    In addition to examining the broad comparisons cited above, our 
analysis identified several diagnostic codes that are candidates for 
changes to the Rating Schedule because the impact of these conditions 
on earnings is not commensurate with the level of the rating. In 
particular, for several of the most prevalent diagnostic conditions, 
there is no earnings loss at the 10 percent or 10 percent to 20 percent 
combined rating levels. Examples of these diagnoses include: arthritis; 
lumbosacral strain; arteriosclerotic heart disease; hemorrhoids; and 
diabetes mellitus. The 10 percent rating for these conditions could be 
adjusted to zero to reflect that no earnings loss occurs at this level 
for these conditions.
Additional Diagnostic Codes
    We were asked to identify diagnostic codes that could be added to 
the over 700 existing codes in the Rating Schedule. Analogous codes are 
currently used in 9 percent of all cases. By sampling 1,094 cases in 
which analogous codes were used, we identified 33 ICD-9 codes that were 
used often enough to warrant addition to the Rating Schedule. These 
include disturbance of skin sensation, mononeuritis of lower limb, and 
unspecified hearing loss.
PTSD, Other Mental Disorders, and TBI
    Our analysis and previous studies conducted by the Bradley 
Commission in 1956, the Economic Validation of the Rating Schedule in 
1972, and the Veterans' Disability Benefits Commission in 2007, are 
consistent in finding that mental health disorders in general have a 
much more profound impact on employment and earnings than do physical 
disabilities. We found that earnings loss for PTSD is 12 percent for 
veterans rated 10 percent and up to 92 percent for those rated 100 
percent. For other mental disorders, the earnings loss is 14 percent 
for those rated 10 percent and 96 percent for those rated 100 percent. 
Earnings loss for TBI rated 100 percent is similar at 91 percent.
    A policy option for consideration is to adjust the VA Schedule of 
Rating Disabilities to eliminate rating PTSD at 10 percent and use the 
rating criteria for 10 percent to rate 30 percent, 30 percent to 50 
percent, 50 percent to 70 percent, and combine the criteria for 70 
percent and 100 percent at 100 percent. We note that this will not 
eliminate the deficiency at 100 percent; these veterans will still be 
receiving less in disability compensation and earnings combined than 
their expected level of earnings. We also note that these changes, 
especially if also made for mental health disorders in general, would 
have a significant impact on the issue of Individual Unemployability 
(IU). Veterans whose primary diagnosis is PTSD made up 32 percent of IU 
cases on the rolls in 2007 and 47 percent of new IU cases during the 
period 2001-2007. Including PTSD with all mental disorders, 44 percent 
of IU cases on the rolls in 2007 were mental disorders and 58 percent 
of new IU cases from 2001-2007 had mental disorders. Since the criteria 
for rating mental disorders at 100 percent require veterans to be 
unemployable, it is not clear why veterans with mental disorders who 
are unemployable are not rated 100 percent instead of IU.
Methodology Used to Calculate Combined Degree of Disability
    VA has used certain formulas over the years to assign a Combined 
Degree of Disability (CDD) when veterans have more than one rated 
service-connected disability. Veterans receiving disability 
compensation have on average 3.3 disabilities that they are rated for. 
The earliest known formula dates from 1921 and has changed very little 
since then. The CDD determines the amount of the disability 
compensation payment. The table below provides examples of how various 
individual ratings are combined using the four formulas. The formulas 
do not take into account the types of disabilities being combined.


----------------------------------------------------------------------------------------------------------------
                  Rating Schedule                       1921          1930          1933        1945 to Present
----------------------------------------------------------------------------------------------------------------
Two 10% Ratings                                              19            19            20                  20
----------------------------------------------------------------------------------------------------------------
Three 10% Ratings                                            28            19            30                  30
----------------------------------------------------------------------------------------------------------------
Four 10% Ratings                                             37            19            30                  30
----------------------------------------------------------------------------------------------------------------
Five 10% Ratings                                             46            19            40                  40
----------------------------------------------------------------------------------------------------------------
One 30% and four 10%                                         58            58            50                  50
----------------------------------------------------------------------------------------------------------------
One 70% and four 10%                                         82            82            80                  80
----------------------------------------------------------------------------------------------------------------

    A claimant who has three disabilities with each disability rated at 
10 percent, receives a combined rating of 30 percent. A veteran with 
two service-connected disabilities, one rated 60 percent and one rated 
10 percent, receives compensation only at the 60-percent rate. The 
effect of combining additional ratings gives greater weight to multiple 
10 percent ratings at the low end of the scale. The effect of 
additional 10 percent ratings is diminished if the primary diagnosis 
has a high rating. Having multiple low ratings increases the payment 
dramatically for a veteran whose primary diagnosis has a low rating; it 
has a negligible or much smaller effect for veterans who have a single 
condition with a high rating such as 80 percent or more.
    In our analysis we found that actual earnings, on average, were 
higher for veterans with more disabilities at a given rating level such 
as 30 percent. This paradoxical result suggests that the rating for the 
first medical condition captures most of the impact of the veteran's 
overall medical conditions on his or her potential earnings. The 
ratings for the second, third, or additional medical conditions 
increase the CDD but the additional conditions do not further affect 
the veteran's earning capacity. The formula for combining disabilities 
results in ratings that over compensate veterans for lost earnings.
    An option to the current single lookup table is to replace it with 
tables that reflect specific combinations of different disabilities. 
The tables could be programmed for ease of use rather than manually 
applied as is the current practice.
    Medical science has established for many years that certain 
diseases are prevalent together, examples of which include PTSD and 
major depressive disorder, and diabetes and cardio-vascular diseases. 
It is quite likely that there are many diseases that are present 
together in individuals and that they cause a greater impact on the 
individual's earning capacity than would be the case with multiple 
unrelated minor ailments. Analysis of the impact of multiple diseases 
or disabilities would result in an enhanced approach to ratings for 
combinations of diagnoses.
Individual Unemployability Benefits
    The number of IU cases has grown from about 101 thousand in 
September 2001 to 190 thousand cases in September 2007, an increase of 
almost 90 percent. PTSD cases constituted about one-third of the IU 
cases in 2007 and one-half of new IU cases between 2001 and 2007. 
Forty-four percent of the IU cases in 2007 were for veterans age 65 and 
older; 64 percent for veterans age 55 and older.
    Although age is clearly related to employment, it is not considered 
in IU determinations. While IU is not intended for veterans who 
voluntarily withdraw from the labor market because of retirement, new 
awards are often made to veterans who are near or past normal 
retirement age for Social Security. In light of these circumstances it 
appears that IU determinations are made for veterans approaching or 
past retirement age based on providing retirement income or in 
recognition of loss of quality of life rather than for employment loss.
    IU determinations depend on decisions about substantially gainful 
employment. In order to further facilitate the decisionmaking process 
for IU determinations, a work-related set of disability measures would 
be worth assessing. Consideration of this could supplement the medical 
impairment criteria in the VASRD.
    An option for consideration would be for VA to adopt a patient-
centered, work disability measure for IU evaluations. As with the 
current IU evaluation, assessments would address the individual's work 
history but also consider other factors including motivation and 
interests. Work disability evaluations would include relevant measures 
of impairment, functional limitation, and disability. Particular care 
should be taken to include measures of physical, psychological, and 
cognitive function. Assessments would evaluate the individual in the 
context of his or her total environment.
Special Monthly Compensation
    SMCs are a series of awards for anatomical loss or loss of 
functional independence. These awards are evaluated outside of the 
Rating Schedule. SMCs are known by the letter designations K, L, M, N, 
O, P, R, and S. SMC K is the only award that can be made to veterans 
who are rated less than 100 percent and can be awarded one, two, or 
three times with each award $91 per month (2008 rates) in addition to 
the amount paid for the Combined Degree of Disability rating. As of 
December 1, 2007, there were 188,747 veterans receiving SMC K awards. 
SMCs other than K are paid instead of the amount payable for 100 
percent ratings, not in addition to the amount paid for 100 percent 
ratings. Since SMCs are not awarded with the intent of compensating for 
average loss of earnings capacity, they can be thought of as payments 
for the impact of disability on quality of life.
SMC for Assistance
    Four different SMCs can be paid to veterans for assistance: L, S, 
R1, and R2. SMC L can be awarded either for loss of or loss of use of 
limbs or organs or to veterans rated 100 percent without such loss if 
they are in need of regular Aid and Attendance; in other words, if they 
need assistance with activities of daily living. In 2007, 48 percent of 
13,928 veterans receiving SMC L were receiving that award because they 
needed assistance, rather than for loss of or loss of use of organs or 
limbs. SMC S can also be awarded to veterans rated 100 percent if they 
are housebound but do not meet the required level of assistance for SMC 
L. SMC R1 and R2 are awarded to catastrophically injured veterans, 
primarily to those with spinal cord injuries, who need the highest 
levels of assistance. The table below depicts the number of veterans 
receiving SMCs other than K and the amount of the award that is above 
the normal amount paid to veterans rated 100 percent without SMC. Thus, 
if a veteran receives SMC L for assistance, the veteran is receiving 
only $618 per month above the normal 100 percent amount; and a veteran 
receiving SMC S for housebound is receiving only $302 above the 100 
percent amount.
    In 2007, 45,773 veterans received SMC L, S, R1, or R2 for 
assistance and $30,506,362 above the amount paid for the 100 percent 
rating. This was an average of $660 per month.


                     Special Monthly Compensation Rates  Compared with Schedular 100% Rating
----------------------------------------------------------------------------------------------------------------
                                                                       Increased
               SMC Code                Veteran Alone    Amount for    Amount  for     Number of       Monthly
                                                       100% or O/P        SMC          Veterans       Benefit
----------------------------------------------------------------------------------------------------------------
Quality of Life
----------------------------------------------------------------------------------------------------------------
L                                         $3,145         $2,527           $618          5,355       $3,309,390
----------------------------------------------------------------------------------------------------------------
L\1/2\                                    $3,307         $2,527           $780          1,887       $1,471,860
----------------------------------------------------------------------------------------------------------------
M                                         $3,470         $2,527           $943          1,839       $1,734,177
----------------------------------------------------------------------------------------------------------------
M\1/2\                                    $3,709         $2,527         $1,182          1,650       $1,950,300
----------------------------------------------------------------------------------------------------------------
N                                         $3,948         $2,527         $1,421            477         $677,817
----------------------------------------------------------------------------------------------------------------
N\1/2\                                    $4,180         $2,527         $1,653            250         $413,250
----------------------------------------------------------------------------------------------------------------
O/P                                       $4,412         $2,527         $1,885          2,661       $5,015,985
----------------------------------------------------------------------------------------------------------------
  Total                                                                                14,119      $14,572,779
----------------------------------------------------------------------------------------------------------------
Assistance
----------------------------------------------------------------------------------------------------------------
L                                         $3,145         $2,527           $618          4,944       $3,055,392
----------------------------------------------------------------------------------------------------------------
L\1/2\                                    $3,307         $2,527           $780          1,742       $1,358,760
----------------------------------------------------------------------------------------------------------------
S                                         $2,829         $2,527           $302         31,361       $9,471,022
----------------------------------------------------------------------------------------------------------------
R1                                        $6,305         $4,412         $1,893          5,576      $10,555,368
----------------------------------------------------------------------------------------------------------------
R2                                        $7,232         $4,412         $2,820          2,151       $6,065,820
----------------------------------------------------------------------------------------------------------------
  Total                                                                                45,773      $30,506,362
----------------------------------------------------------------------------------------------------------------
Source: Department of Veterans Affairs, Special Monthly Compensation, 12/1/07

    Using the results of surveys conducted by the National Alliance for 
Caregiving and the American Association of Retired Persons and by the 
Veterans' Disability Benefits Commission, we estimated monthly costs of 
hiring assistance ranging from $520 for 8 hours of caregiving per week 
to $10,800 for full time, around the clock 24/7 care. The CNA Corp. 
issued a report for the Department of Defense in September 2008 on the 
average earnings and benefits loss of caregivers of seriously wounded, 
ill, and injured active duty servicemembers and estimated those losses 
as $33,500 annually or $2,800 per month. Regardless of which estimates 
are used, the current amount of the SMCs for assistance is well below 
either the cost of hiring such care or of the lost earnings and 
benefits of family caregivers.
Quality of Life Payment Options
    Our review of the literature led us to define quality of life (QOL) 
for veterans as an overall sense of well-being based on physical and 
psychological health, social relationships, and economic factors. Our 
in-depth analysis of the data from the Veterans' Disability Benefits 
Commission's survey of more than 21,000 disabled veterans found that 
QOL loss occurred for veterans at all levels of disability and all 40 
diagnostic codes for which sufficient responses were available. We also 
found that loss of QOL increases as disability increases, but it does 
not increase as sharply as disability does, and that there is wide 
variation in the loss of quality of life at each disability rating. QOL 
is an individualized perception, and people adjust to disability. About 
one-half of those individuals with severe disabilities report high 
degrees of life satisfaction.
    The quality of life loss analysis paralleled the earnings loss 
analysis in many regards. In particular, we found that veterans 
receiving Individual Unemployability benefits and those receiving SMC 
payments report mental and physical QOL loss significantly greater than 
for other service-connected veterans. Fewer severe disabilities are 
associated with a greater loss of quality of life than a greater number 
of less severe conditions at a given level of combined disability.
    Three broad options were presented to VA for implementing a QOL 
payment:

    1.  Statutory rates for QOL payments by combined degree of 
disability
    2.  Separate, empirically based normative rates for QOL loss
    3.  Individual clinical and rater assessments plus separate 
empirically-based rates for QOL loss.

    All three options would require periodic surveys to assess QOL 
impact. Option 3 would be the most complex and costly to implement and 
would require clinical and rater assessments each time a claim is 
filed. Options 1 and 2 would not be subject to veteran appeal if 
Congress approves the rate scale. However, before any QOL options are 
implemented, the criteria and benefits contained in the VA Schedule for 
Rating Disabilities should be adjusted to reflect actual lost earnings 
or average actual lost earnings, to ensure an overall equitable system.
    Payment rates for QOL would have to be set by policy or statute and 
placing an economic value on QOL would be subjective and value laden. 
Options that use empirical data are provided in our report as examples 
of how such rates could be established. The monthly amounts depicted in 
the options range from $99 to $974. Volume III of our report contains 
an extensive description of the findings of the QOL analysis and of the 
possible rationale or basis for setting the amounts.
    Foreign countries that award QOL payments link them closely to 
impairment and consider the circumstances of the individual veteran. 
QOL payments are considered the primary disability benefit and earnings 
loss payments are made only for actual earnings loss or a specified 
loss of earnings capacity. A veteran in Canada, for instance, must 
demonstrate inability to work in order to receive an earnings loss 
payment in addition to a QOL payment and must complete 3 years of 
vocational rehabilitation that results in unemployment before receiving 
ongoing earnings loss payments.
    VA could structure its disability benefits like the foreign 
programs so that they are based primarily on QOL. QOL could be inferred 
from impairment, or it could be measured directly, with earnings loss 
paid only when an actual earnings loss occurred. The systems used in 
both the United Kingdom (UK) and Canada pay QOL in lump sum payments 
and have several low rating levels for QOL payments. While making QOL 
payments in all 15 of its ratings, the UK system does not pay for 
earnings loss in the 4 lowest ratings of its 15-point rating scale. The 
Canadian schedule increases proportionally. In 2008, after the 10 
percent rating, each 5 percent rating increase in Canada has a payment 
increase of $12,909. The UK payments do not increase with a 
multiplicative constant. For instance, the highest payment is $565,000, 
the second highest payment is $399,000, the third highest is $228,000. 
The lowest pain and suffering payment in UK is $2,080. These payment 
schedules reflect society's view that severe disability merits very 
high QOL payments and low levels of disability merit recognition 
payments. These benchmarks suggest great flexibility for VA in 
establishing payment levels.
    Although our study focused on monetary compensation for QOL, the 
literature review and the analysis of the survey data indicates that 
greater QOL is supported by a strong family or social network and that 
employment is associated with a better quality of life. QOL of service-
connected veterans may be improved by programs aimed at family members 
to help them to understand and support the disabled veteran, through 
case management directed to the holistic needs of the veteran, and 
employment assistance programs.
    Our earnings analysis found that on average veterans' earnings plus 
disability compensation exceeds the expected earnings level by 7 
percent. There are exceptions such as for mental health and TBI and 
those rated 100 percent where earnings plus compensation is 
significantly less than expected earnings. Some SMC payments can be 
thought of as payment for QOL. Taken together, a judgment could be made 
that veterans are currently compensated for QOL.
Transition Benefit Options
    Disabled veterans face a number of living expenses during their 
transition to civilian life before and during their participation in 
the VA Vocational Rehabilitation and Employment (VR&E) Program.
    Providing transition assistance payments offset the foregone cost 
of earnings (time spent in rehabilitation and not working), which in 
turn increases the likelihood of entry and completion of 
rehabilitation. Providing transition assistance benefits to caregivers 
and family members could reduce the levels of stress and depression for 
veterans and caregivers, which in turn could raise the overall quality 
of life for both the patient and family members and caregivers. 
Providing and aligning financial incentives with successful completion 
of specific rehabilitation tasks could increase the likelihood that 
patients enter and successfully complete rehabilitation.
    In order to estimate what an appropriate level of transition 
benefit should be, we selected housing, food, and transportation 
expenses to comprise a core group of living expenses that one would 
expect a living expense benefit to cover. We also considered additional 
``menu items'' such as apparel and services, health care (for 
dependents of disabled veterans not rated 100 percent), personal care 
products and services, household operations, and child care. Based on 
statistical analysis of average living expenses, the core living 
expense option would be $1,898 for the veteran alone or $2,981 for a 
veteran with two dependents. This includes the average monthly housing 
allowance paid by DoD in the 11 most populous veteran population 
centers, the same rates that would be paid under the Chapter 33 
Education program. The payment for additional expenses would be $511 
for the veteran alone or $935 for a veteran with two dependents. A new 
transition benefit would be in lieu of the current subsistence 
allowance and precede start of permanent disability compensation 
benefit. The 2007 monthly subsistence allowance was $521 (no 
dependents) and $761 (two dependents).
    We identified several groups of veterans who could be eligible for 
such payments based on medical discharges, severity of disability, and 
time since discharge. The possible eligibility groups would range from 
a small group consisting of severely injured/ill who are medically 
discharged with ratings of 70 percent or higher who enter 
rehabilitation within 2 years of discharge, to a much larger group that 
would include all veterans currently eligible for VR&E. The most 
limited option would include 3,400 applicants per year and the most 
inclusive option would include approximately 29,000 each year.
Methodology Differences with the Previous Study
    As discussed previously, our methodology differed in significant 
ways from the approach taken by the CNA Corp. in 2007 for the Veterans' 
Disability Benefits Commission. Our study focused on service-connected 
and non service-connected veteran populations discharged since 1980. 
Data from the Defense Manpower Data Center is reliable for veterans 
discharged since that time and provides important demographic or human 
capital characteristics for individuals such as education level at time 
of entry into the military, gender, and officer or enlisted status. 
These characteristics can be used to ensure that the observed 
differences in earnings are due to the service-connected disabilities 
and not some demographic differences.
    The study for VDBC also used earnings data for non service-
connected veterans from the Current Population Survey (CPS) which were 
self reported, in comparison with the actual earnings of service-
connected veterans discharged prior to 1980. We conducted a thorough 
analysis of the CPS data and concluded that it was not reliable for 
this purpose for several reasons. Self-reported earnings are not as 
accurate as actual Social Security Administration data and the CPS 
sample has 50 percent fewer veterans than the general population. Post 
1980 veterans have better health, fewer limitations from disabilities, 
and higher rates of employment. Thus we focused on comparing earnings 
of veterans discharged since 1980. We obtained actual earnings data 
from the Social Security Administration on the entire population of 
1,062,809 service-connected disabled veterans discharged since 1980 and 
a demographically selected sample of 432,947 non service-connected 
veterans also discharged since 1980. These two populations were 
compared to determine the impact of service-connected disabilities on 
earnings. Actual earnings were compared, thus avoiding the use of 
survey data. A detailed explanation of why CPS data is not reliable for 
this comparison is provided in Volume III of our report. We believe 
that this comparison of veterans discharged since 1980 enables policy 
makers to focus more on veterans that VA rates today and will be rating 
in the future.
    Another difference between our analysis and the CNA analysis was 
that we conducted a more detailed analysis of rating levels using the 
entire range of rating levels (10 percent through 100 percent, in 10 
percent increments) while CNA used four groupings of ratings (10 
percent, 20-40 percent, 50-90 percent, and 100 percent). We did this so 
as to be able to analyze all ten rating levels individually. We also 
used individual diagnostic codes to the maximum extent possible within 
the restrictions on release of individual-level data. The over 700 
codes in the Rating Schedule were grouped into 240 similar diagnoses so 
as to avoid the possibility of individual veterans being identified. In 
contrast, the CNA study aggregated veterans into the 15 body systems 
with PTSD the only individually analyzed diagnosis. We also placed 
emphasis on analysis of veterans receiving Special Monthly Compensation 
and Individual Unemployability. Finally, we used 2006 earnings without 
estimating lifetime earnings while CNA used 2004 earnings to estimate 
lifetime earnings. We obtained annual earnings for veterans since 1951 
but time constraints prevented including this information in our 
analysis as we would have preferred.
Concluding Remarks
    In closing, our study completed last year provides a great deal of 
information on the adequacy of disability compensation and ways in 
which the program can be improved to better serve veterans. There are 
clear indications that overall the amount of compensation exceeds the 
average expected earnings loss yet it is inadequate for mental health 
and for those rated 100 percent. The methodology used to assign the 
overall combined degree of disability, and hence the amount of 
compensation paid, results in over compensating many veterans, 
especially at the lower rating levels. There are several diagnoses that 
either do not result in loss of earnings or the rating is higher than 
necessary. It could be concluded that quality of life is somewhat 
compensated by the amount compensation exceeds expected earnings loss 
and by some SMC payments. SMC payments for assistance are not equal to 
either the cost of hiring assistance or the lost earnings and benefits 
of family caregivers.
    While the findings cited in this testimony provide accurate and 
reliable information upon which to base policy decisions, the time 
frame for that study (7 months) did not permit a thorough analysis of 
certain aspects of the disability compensation program and of the 
inter-related nature of the findings. We would recommend that 
additional analyses be conducted. Restrictions intended to safeguard 
the privacy of individuals prevented the Social Security Administration 
from providing earnings at the individual veteran level. This meant 
that we could not analyze the impact on earnings of combinations or 
comorbidities of disabilities. We have discussed this issue with the 
Social Security Administration and believe a methodology could be used 
that safeguards the privacy of individuals yet enables such analysis.
    Additional demographic or human capital characteristics could be 
analyzed in future studies to ensure that the impact on earnings is not 
due to factors such as education level at discharge, military 
occupational series, or Armed Forces Qualification Test scores. Also, 
consideration of such factors as time in service, period of service, 
and timing of diagnosis could shed additional light on the impact of 
disability on earnings.
    In addition to analysis of earnings at the individual veteran 
level, earnings and quality of life results should be integrated so as 
to see the overall impact of disability on veterans. This could include 
assessing how comorbidities and the timing of the diagnoses as 
indicated by the date of original service-connected disability impact 
earnings and QOL. A technique called shadow pricing could also be used 
to measure the economic impact on quality of life.
    Mr. Chairman, I thank you for the opportunity to appear before you 
today and would welcome any questions you or the Subcommittee Members 
may have.
    Federal contracts relevant to the subject of this hearing: Study of 
Compensation Payments for Service-Connected Disabilities, February 
2008-September 2008, $3.2 million; Evaluation of VA's Vocational 
Rehabilitation and Employment Program, September 2008-September 2010 
(ongoing), $2.9 million. Both contracts are with the Department of 
Veterans Affairs.

                                 
      Prepared Statement of Kimberly D. Munoz, Executive Director,
               Quality of Life Foundation, Woodbridge, VA
    Chairman Hall, Ranking Member Lamborn and distinguished Members of 
the Subcommittee--thank you for inviting the Quality of Life Foundation 
to testify today regarding the quality of life impacts the Department 
of Veterans Affairs has on Veterans and their families. We offer our 
testimony as a loud and clear voice for the severely wounded family, 
who along with their veteran, faces lifelong physical, emotional, and 
financial challenges as a result of service to country.
    The Quality of Life Foundation does not receive grants or contracts 
from the Federal Government.
    We are a small not-for-profit organization with a mission to 
develop, support, and implement strategies that improve the quality of 
life for those who, through no fault of their own, face limiting 
barriers. Our first initiative was launched in February 2008 shortly 
after a chance meeting between our President, Michael Zeiders, and the 
spouse of a severely injured Marine. After hearing her compelling story 
of the challenges she and her family faced as she left her home, job 
and children behind to provide bedside care to her wounded Marine and 
then took the heavy responsibility of transitioning her family from an 
active duty military life to community-based living, Mr. Zeiders knew 
this family represented the very population his Foundation was formed 
to serve.
    As a result, he launched the Wounded Warrior Family Care Project 
and assigned staff to research the experiences of severely wounded 
servicemember families and the resources they rely on to help them 
recover from such a traumatic loss. Eight months of research culminated 
in the publication of the Wounded Warrior Family Care Report in April 
2009. The report clearly defined the population reviewed, their unique 
support needs, existing resources, and a comprehensive Model of Support 
from the moment the family is notified of their loved one's injury, 
through inpatient care, to after they transition to home-based care. 
Quality of Life shared the report with leaders of the Department of 
Defense, the Department of Veterans Affairs, other not-for-profit 
organizations (including veterans' service organizations), and the 
Senate and House Committees on Veterans Affairs. In fact, a copy was 
sent to every Member of this Subcommittee in April.
    The Veterans Affairs Mission Statement is based on a pledge 
President Lincoln made to America's Civil War Veterans during his 
second inaugural address--``To care for him who shall have borne the 
battle and for his widow and his orphan.'' This promise gave Civil War 
era military members peace of mind that in the event their lives were 
lost in the line of duty, and they were no longer able to provide for 
their families, that our country would step in to fill that void.
    Today's equivalent of America's Civil War widows and orphans 
includes families of catastrophically injured veterans who can no 
longer care for themselves nor provide for their families.
    As such, catastrophically injured veterans' benefits must reflect 
the reality that when a veteran is dependent on their family for his/
her daily living needs, that family's quality of life then becomes 
dependent on the veterans' benefits. Our country, in addition to 
providing care for severely disabled veterans, must also address the 
quality of life impact that veteran's injuries have on the family.
    During our research, we heard repeated stories of family caregivers 
struggling to learn about the compensations, services and programs 
provided by the VA, and which, if any, their veteran was eligible for. 
We also heard of many families applying for benefits, waiting months to 
receive a determination on their application, then submitting appeals 
before finally receiving the resources they desperately needed to 
provide daily care for their veteran.
    Their experiences are telling and highlighted by a quick analysis 
of IRS 990 data for FY 2007 of 5 of the largest, most well known 
Veterans' Service Organizations. That review revealed an aggregate 
annual program expense of over 75 million non-profit dollars to provide 
claims assistance to veterans.
    The VA must reduce the burdensome process and wait times associated 
with the receipt of benefits and services required by families who are 
striving to rebuild independent, quality lives after their veteran has 
endured catastrophic disability associated with his/her service-
connected injuries.
Disability Ratings
    While timely processing is important, it cannot be accomplished at 
the expense of accuracy. Assigning an accurate and timely initial 
determination regarding the veteran's disability rating is critical to 
the overall well-being of the veteran and family.
    The disability rating is the eligibility key required to open doors 
to additional, ancillary benefits required by families to rebuild 
quality lives after devastating injury.
    The following provides our comments regarding how some of the most 
critical ancillary benefits can be improved to increase the quality of 
life for severely wounded veterans and their families.
Special Monthly Compensation
    If the initial disability rating is accurate, most severely injured 
veterans will be awarded additional Special Monthly Compensation (SMC) 
in consideration of the impact physical disabilities have on their 
ability to function. However, for those whose disability is primarily 
cognitive or psychological [i.e., Traumatic Brain Injury (TBI) or Post-
traumatic stress disorder (PTSD)]--SMC fails to fully compensate for 
the requirement these veterans have for Aid and Attendance.
    Within SMC, there are 9 broad categories--7 of which are based 
solely on physical impairments (k,m,n,o,p,q,s), leaving only 2 
categories based on cognitive or psychological impairments (l,r). This 
method of coupling eligibility to a body part, does not fully consider 
the range of impact TBI or PTSD has on a veteran's ability to function 
independently and the resulting dependency on a family member (or hired 
help) to provide daily Aid and Attendance.
    For example, a veteran with a 100 percent service-connected 
disability rating for a stand-alone Traumatic Brain Injury who is 
highly functioning on a physical level (i.e., able to walk, talk, 
dress, and perform activities of daily living) but has impaired 
cognitive, judgment, short-term memory, and emotional-control 
capabilities; is eligible for just one category of SMC, SMC-L. This 
category allows an additional monthly compensation of approximately 
$650. When a family member has left their job to provide the Aid and 
Attendance required to keep this veteran safe from harm, or has hired 
an attendant to provide that oversight, $650 simply does not cover the 
additional financial burden borne by the family. The only other 
category which considers cognitive or psychological impairments is SMC-
R, a category that also requires extreme physical impairments.
    SMC must fully consider the complete range of impact TBI and PTSD 
have on the veterans' ability to function independently and safely. If 
a veteran's service-connected disability (physical, cognitive, or 
psychological) results in the inability to function safely and 
independently and thus requires a significant level of daily 
supervision and/or assistance, SMC must be awarded to cover the full 
expense required to provide the appropriate level of Aid and Attendance 
to the veteran.
Specially Adapted Housing Grants
    The Specially Adapted Housing Grant (SAH) also has eligibility 
criteria based primarily on physical impairments and is available to 
veterans with injuries that preclude them from locomotion.
    The application processing time for the SAH is lengthy and as a 
result, prohibits home modifications from being completed prior to the 
veteran's homecoming. Families who have spent months away from home to 
provide bedside care to their loved one should not return to an 
environment that does not meet the disabled veteran's needs.
    In addition, when grants are approved, the maximum allowable is 
$60,000--an amount used across the Nation, without any adjustment in 
consideration of regional cost of living factors. The grant is intended 
to offset the cost of the modification as opposed to covering the cost 
of the modification.
    Another hurdle faced by veterans who do not own their own home, but 
instead are living in the home of a family caregiver (i.e., a parent), 
is that they must acquire a fee simple interest in the home to be 
eligible for the SAH maximum grant. This creates another bureaucratic 
burden for already strapped family members.
    The grant is meant to offset the cost to modify a house to meet the 
veteran's new accessibility needs with no consideration to how that 
modification may affect the needs of other family members. For example, 
if a home is modified to enlarge a bathroom and bedroom to meet a 
disabled veteran's needs--and that modification results in the loss of 
a bedroom or bathroom from the rest of the family--the family bears a 
hardship.
    SAH grants must be awarded in time to allow the homeowner to modify 
the home to provide a safe and accessible environment for the veteran's 
arrival; must cover the total actual cost to modify the home; and the 
modification must be completed in a manner that meets the other 
residing family members' needs.
Health Care
Veteran Health Care
    The VA provides excellent health care to eligible veterans 
throughout the United States via their Veterans Integrated Service 
Networks (VISNs) and Fee-Basis Program, predominately through the 
VISNs. There are instances when VA facilities do not meet the needs of 
the veteran and their families--for example, a veteran may require a 
specialist to perform a certain surgery, or a private physical therapy 
clinic may be closer to the family home, or higher quality 
rehabilitation care may be available for a brain-injured veteran. In 
these instances, two hurdles exist for families to pursue the best 
approach for them. The first is that the VA strongly discourages 
families from pursuing medical care outside of the VA system and is 
hesitant to issue the required preauthorization for fee-basis care. The 
second is that some medical providers are unwilling to provide care to 
veterans for fear of insufficient payment from the VA Fee-Basis 
Program.
    The quality and ease of access to veteran health care affects the 
whole family. When the veteran and family desire to pursue care outside 
of the Veterans Affairs Health Administration to obtain higher quality 
care for the veteran and reduce the burden associated with obtaining 
care far from home, the VA should accommodate the veteran and their 
family by facilitating access to Fee-Basis services. In addition, VA 
must ensure they pay Fee-Basis medical providers in a full and timely 
manner.
Family Member Health Care
    Non-dependent family caregivers (i.e., a parent or a sibling) often 
forfeit employer-sponsored health coverage when they leave their job to 
provide daily care for their loved one. This loss of coverage often 
leads to diminished wellness and acute medical care, resulting in a 
lower quality of life and potentially the inability to sustain care 
giving for the veteran.
    The VA should provide health care insurance to those family members 
who have forfeited their health care insurance to provide care to their 
veteran.
Respite Care
    Respite care is intended to give family caregivers a break from the 
demands of 24/7/365 care giving. Similar to the eligibility criteria 
for Special Monthly Compensation, respite care eligibility does not 
fully consider non-physical impairments experienced by those veterans 
with stand-alone TBI or PTSD, and as such, precludes their families 
from receiving services associated with this benefit.
    The VA currently provides an annual respite benefit of up to 30 
calendar days. In-home respite care is available from VA-approved 
providers for up to 6 hours per day. A 6-hour respite, while better 
than nothing, is very brief considering the 24/7/365 responsibility of 
caregivers. Additionally, for families who desire overnight respite 
care (perhaps to allow for a vacation or to receive inpatient medical 
care), their only VA-provided option is to place their loved one in a 
VA-approved residential care facility. Most veterans and their families 
are extremely reluctant to utilize institutional care, strongly 
preferring the dignity of receiving care in the comfort of home, the 
security of familiar surroundings, and the receipt of one-on-one care. 
Families simply choose to forego respite care when institutional care 
is their only option.
    VA should provide respite care for all veterans who require a 
caregiver and should extend the current in-home respite benefit to 
include overnight care to allow veterans to stay in their own homes 
when family caregivers take the respite they need.
Long-Term Care Planning for Severely Disabled Veterans
    Family caregivers for severely disabled veterans face a daunting 
concern when it comes to planning for the day they are unable to 
provide the care their loved one needs. While severely disabled 
veterans are certainly eligible for VA-provided long-term care, 
existing facilities and staff are oriented more toward the care of 
chronic and age-related illnesses as opposed to the ``signature 
injuries'' (TBI and PTSD) of this generation of severely wounded 
veterans. Families need long-term care options that meet their loved 
ones needs.
    VA should invest in long-term, age-appropriate residential care 
that is geared to meet the needs of OEF/OIF traumatically injured 
veterans.
Beneficiary Travel
    VA currently pays eligible veterans 28\1/2\ cents per mile traveled 
to receive medical care and certain VA-required examinations. However, 
they deduct $15.54 per round trip (deductibles not to exceed $46.62 per 
month). Families of severely injured servicemembers are already 
strapped for time and money and should not be further burdened by fuel 
and auto maintenance expenses associated with long distance travel to 
VA facilities.
    VA should provide mileage reimbursement based on standard GSA rates 
and eliminate the deductible.
Conclusion
    The Quality of Life Foundation believes it is the moral and ethical 
obligation of our Nation, Government and private citizen alike, to care 
for veterans and families who, through service to country--have 
sacrificed for us all. The veteran certainly faces the most personal 
challenge, that of living every day with severe disabilities resulting 
from their wounds and must be provided with the very best medical, 
rehabilitative and long-term care to restore independence and quality 
to their lives. We must remember that their family members also face 
lifelong emotional, physical and financial challenges as a result of 
this traumatic injury.
    Our country's response to severely wounded families must be 
deserving of their sacrifices. We must provide compensations, medical 
care, and long-term supports to allow families to rebuild quality 
lives, to live comfortably and with dignity in their homes, and to be 
secure in the knowledge that their sacrifices are appreciated and 
honored by a grateful Nation.

                                 
                 Prepared Statement of Carol A. Glazer,
             President, National Organization on Disability
    Mr. Chairman, Members of the Committee: I am Carol Glazer, 
President of the National Organization on Disability, or NOD. I was 
pleased to accept your invitation to testify before your oversight 
hearing on ``Examining Ancillary Benefits and Veterans Quality of Life 
Issues.''
    NOD is a 27-year old national nonprofit organization that has long 
worked to improve the quality of life of people with disabilities by 
advocating their fullest inclusion in all aspects of life. We are one 
of only three so-called ``cross-disability'' organizations working to 
improve the quality of life for all of America's 54 million people with 
disabilities.
    Over our nearly 30-year history, we've worked with scores of 
communities across the country to help them improve the quality of life 
for their citizens with disabilities and honor those that do it well. 
The World Committee on Disability has honored countries that do the 
same with an award presented by the Secretary General of the United 
Nations.
    We're perhaps best known for our Harris polls, which have tracked 
various quality of life indicators through statistically valid sampling 
of 1,000 people with disabilities. For more than 20 years, the Harris 
Interactive firm's researchers have tracked everything from access to 
health care, to transportation, degree of optimism about the future, 
social interactions with friends and community, religious 
participation, and even voting.
    Needless to say, the gaps in these quality of life indicators 
between people with and without disabilities remain very wide, 
notwithstanding gains we've made through the ADA and other policy 
reforms in the last 10 to 20 years. Among these indicators, it should 
be no surprise that economic self sufficiency displays the greatest 
gap. People with disabilities suffer a poverty rate that is three times 
the national average and our Harris polls have reported a 67-percent 
rate of unemployment, a number that's remained virtually unchanged 
since the end of WWII.
    For this reason, the NOD board, led by our Chairman, former 
Secretary of Homeland Security Tom Ridge, has decided that for the next 
5 years NOD will devote the bulk of our resources to promoting economic 
self sufficiency among America's 33 million working-age people with 
disabilities. Within this focus, we are working on helping the most 
severely injured veterans returning from Iraq and Afghanistan become 
productive, contributing members of their communities by entering or 
resuming careers upon their transition home. (We have other programs in 
this arena, described in more detail in Attachment 1.)
    We highly commend your Subcommittee for taking an honest appraisal 
of the way in which ancillary benefits are adjudicated, disability 
ratings are determined, and the kinds of ancillary benefits that can 
help soldiers who've been injured in service of their country resume a 
high quality of life upon their transition home.
    Today, I want mainly to share with you what we are learning from 
the early phases of our Army Wounded Warrior Career Demonstration 
Project (AW2 Careers). While this demonstration is focusing on helping 
the most severely injured soldiers in the Army's AW2 Program access 
careers upon transitioning home, the model we are piloting has 
applicability to a broad range of services beyond those devoted to 
increasing economic self sufficiency. It is a model that deals not only 
with veterans but with their families. We strongly believe that the 
population of severely injured servicemembers, like the rest of the 
country's people with disabilities, faces a very complex recovery 
process that affects a family over a prolonged period and requires an 
array of services and supports for it to gain a semblance of a good 
quality of life.
    Our AW2 Careers Demonstration is an entirely privately funded 
initiative conducted by NOD under a Memorandum of Understanding with 
the U.S. Army and its Army Wounded Warrior Program. Today, NOD Career 
Specialists ensure that career services and other assistance are 
provided to over 150 soldiers, veterans, and their families\*\ in the 
Dallas Metroplex and the States of Colorado and North Carolina. We link 
soldiers/veterans and family members to existing career services in the 
community--or provide them directly ourselves where such services are 
inadequate.
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    \*\ We will henceforth mainly use ``veterans'' to represent all of 
those served by AW2 and AW2 Careers--Regular Army, Reserve, or National 
Guard soldiers who mainly veterans separated from active duty, though 
in some cases still on active duty or still in the Reserves or Naional 
Guard--and their family members.
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    I want to proceed directly to address the Subcommittee's interest 
in the benefits for and quality of life issues of our veterans. Let me 
stress that to understand fully what I will present it is important to 
know something about the nature of both the Army's Wounded Warrior 
Program and of the NOD AW2 Careers Demonstration. Brief descriptions of 
both (and of NOD) are in Attachment I and I urge those not familiar 
with these programs to read Attachment I before proceeding here. 
Finally, Attachment II is a one-page summary of AW2 Careers outcomes 
and progress to date, drawn from our evaluation records.
    My observations on the benefits and quality of life issues of our 
veterans are in the nature of ``scouting reports from the front,'' so 
to speak. They derive from a year of preparatory study (including focus 
groups with over 200 veterans), project design, project set up, and 
just over 1 year of the planned 3 years of field operations. Moreover, 
they are subject to confirmation by a comprehensive external evaluation 
that we have commissioned whose full results will be available at the 
end of March 2012.
    That caveat should be balanced against the fact that these 
observations derive from the considered judgments of the NOD Career 
Specialists now providing direct career services to our caseload of 
veterans as well as those of us in NOD management who have designed and 
now manage the project. All of us have considerable experience in 
disability, career development, employment and training, human 
services, and/or personnel services and issues.
    So, let me begin by noting that many of the most severely injured 
OEF/OIF veterans would have died in previous wars. Battlefield 
medicine, however, has advanced to the point that their lives endure 
but are frequently deeply impaired in both the physical and mental 
realms. Many observers still expect many of these veterans to live out 
lives in dependency, but we at AW2 and NOD strongly believe that most 
of these young men and women can become ``independent, contributing 
members of their communities.'' (the Army's admirable vision for its 
AW2 soldiers/veterans) by returning to school and some form of work. 
We, the Nation that placed these young men and women in harm's way, 
need to see this situation as an opportunity to learn ``what works'' to 
do that.
    This, indeed, is the purpose animating AW2 and NOD's AW2 Careers. 
It is important to note, however, that many of the challenges facing 
these veterans will not be surmounted quickly or easily. The effort 
must be long term in nature.

    1.  A Fundamental Mismatch: Seriously Injured Veterans and Reactive 
Agencies: Sometimes by design and more often from funding limitations, 
many of the government, and, indeed, private programs in place to help 
veterans returning from Iraq and Afghanistan are constrained to a 
reactive service model, only responding when a veteran seeks services 
and thus placing the burden on veterans to find and approach the 
agencies. But we find that the most seriously injured veterans with 
whom we work are not really able to effectively access services from 
reactive agencies.
         Many veterans, especially the most severely injured who often 
also suffer from cognitive disabilities, do not know the benefits to 
which they are entitled, which agencies offer them, and how to approach 
them.\**\ Further, many are isolated, geographically, socially, and/or 
psychologically. Their needs call for an entirely different service 
model--in our view along the lines of what we are testing in AW2 
Careers. That model is to actively reach out to the veterans and ensure 
their needs are being met. The terms NOD uses to describe our service 
model are ``pro-active, intensive, and prolonged case management 
relationships'' with the veterans being served. It is important to note 
that few, if any, other government agencies and or private veterans' 
service organizations can employ the service model adopted by AW2 and 
AW2 Careers.
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    \**\ The Army Career and Alumni Program (ACAP) briefing syllabi for 
soldiers departing active duty are comprehensive and thorough, but many 
veterans report that they didn't get these briefings or understand them 
or remember them. Some may have been diverted by their injuries--or 
simply young enough to not pay attention to seemingly remote matters 
until they become very proximate, back home.
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         When a soldier is going through the Army Board process leading 
to medical discharge--or shortly thereafter--that soldier, if s/he 
meets AW2 admission criteria regarding severity of injury, is, in 
effect, automatically enrolled as a ``member'' of AW2. His/her name is 
added to a caseload list of an Army Advocate (and later, where 
applicable, an NOD Career Specialist) serving the geographical region 
that soldier calls home. That Advocate and Career Specialist are 
charged with finding that soldier/veteran; establishing a close, 
supportive relationship; and ensuring s/he gets the benefits and 
services due her/him.
         In NOD's case, we require Career Specialists to contact 
``their'' veterans at least once a month, usually electronically (but 
including face-to-face meetings early on and, later, once every 6 
months, often by getting in their cars and going to see the veteran at 
home, where we get a much fuller picture of his/her situation). We do 
not sit in our offices and wait for a veteran to knock on our door.
         Further, we have early indicators and even some evidence that 
this service model is much better received by the veterans. 
Anecdotally, it is clear that the close NOD Career Specialist outreach 
relationships have lifted some veterans out of their isolation and 
immobility and started them re-engaging in both their lives and 
careers. These relationships have also resulted in spouses and children 
moving forward on career paths. This is reflected in early survey 
results, including the below veterans' ratings of satisfaction with 
``how helpful'' the services to date of various agencies have been:


------------------------------------------------------------------------
                                A Lot     Some    A Little   Not at All
------------------------------------------------------------------------
NOD Career Specialist             61%       30%        7%          2%
------------------------------------------------------------------------
AW2 Advocate                      56%       29%       14%          2%
------------------------------------------------------------------------
One Stop Center                   29%       29%       29%         14%
------------------------------------------------------------------------
Voc Rehab & Empt                  28%       48%       20%          4%
------------------------------------------------------------------------
ACAP                              16%       43%       39%         11%
------------------------------------------------------------------------
Other Agencies                     0%       67%       33%          0%
------------------------------------------------------------------------

         Finally, we acknowledge that the AW2/AW2 Careers service model 
is more expensive than office-based, reactive models. To this we 
respond that our final evaluation is likely to confirm our early 
operating judgment that this model works more effectively, certainly 
for this population of most severely wounded veterans. Moreover, a 
broadly based cost-benefit analysis should weigh direct program costs 
against the benefits of reduced dependency costs, increased tax 
revenues from veterans' earnings, reduced costs for shelters and 
imprisonment, more successful marriages and parenting, and the 
restoration of self-confidence from a veteran's again an ``independent, 
contributing member of his/her community.''
    2.  The Need to Deal with both the Veteran and the Family: The 
process of recovering from injury and coming to terms with disability 
is a complex process that is all consuming not only for the veteran but 
the entire family. Retired parents may have to become caregivers to a 
veteran. Spouses whose job it was to take care of the children and 
household find them-selves suddenly in the role of caregivers to the 
veteran and/or even family breadwinners. Children may have to come to 
grips with a parent they no longer recognize. Investing in support for 
spouses, parents of veterans, and veterans' children who are drawn into 
this process is, in our view, a necessary and cost effective investment 
that the VA must consider as it administers ancillary benefits. And 
these benefits must be as flexible as are many of the benefits 
available through VR and E.
    3.  Unaddressed Mental Health Needs: More than half the AW2 
population, including those in AW2 Careers, suffers from primary 
diagnoses of Post-traumatic stress disorder or Traumatic Brain Injury, 
with many having both, often along with other injuries. But the 
behavioral/mental health concerns do not stop there. Many veterans 
suffer depression or other mental health issues (including violent or 
suicidal ideations) that require appropriate mental health services 
(especially including marital/family counseling). But, we find that 
these needs are largely unaddressed and can impede career progress by 
contributing to veterans' dropping out of education or training or 
losing a job. It is not a criticism of the VA to say that despite its 
efforts to expand such services, it simply isn't able to adequately 
service these needs. Sometimes the veteran denies these needs; or finds 
the local VA has no or limited mental health services or they are not 
close enough; or does not like what they perceive as the VA's reliance 
on problematic medications (not uncommon in other populations using 
psychotropic medications), with only limited therapy. We feel that the 
VA should supplement its direct mental health services by mobilizing 
and applying mental health services from other local agencies that are 
anxious to be helpful to veterans but need to be recruited, supported, 
and trained to do so.
    4.  Criminal Charges: We have encountered several situations where 
some behaviors associated with PTSD/TBI have resulted in veterans 
facing criminal charges (e.g., erratic driving, substance abuse, 
violence, including family abuse, etc.). It is hard to help a veteran 
stay on a career path when s/he is in court or jail. We have examples 
of our Career Specialists intervening with police, prosecutors, or the 
courts to request that notice be taken of the soldier/veteran's 
disability and considered as a mitigating factor in charges or 
sentencing. This has sometimes resulted in remanding the soldier/
veteran to treatment rather than incarceration. There is need for all 
agencies serving this population to intervene in such circumstances, 
bringing these factors to the consideration of such local authorities. 
(Indeed, one of our Career Specialists has led the effort in his part 
of his State to create a ``Veterans Court'' to which criminal charges 
against soldiers or veterans are referred for disposition taking such 
factors into account.)
    5.  Personal/Family Financial Management: Young veterans often have 
little or no experience or knowledge of properly managing family 
finances, despite ACAP and other Army training thereon. Our Career 
Specialists frequently find veterans in dire financial straits 
requiring emergency advice, training, and assistance. There is clearly 
a need for continuing personal/family financial management training and 
guidance.
    6.  Peer Support Mechanisms: The fact that so many of our veterans/
families are isolated geographically, socially, and psychologically has 
led our Career Specialists to try various peer meetings and other peer 
supports, often with heartening results. Our sense is that this needs 
broader application.
    7.  Inadequate Education and Job Skills: We have not been surprised 
to find that many of our veterans lack the education credentials and 
job skills needed to succeed in the labor markets of today and the 
foreseeable future. Our response is to urge veterans to use the 
education and training benefits available to them to upgrade their 
credentials on either or both fronts. Many have responded positively. 
But others working with these veterans need to adopt the same emphasis.
    8.  The Need for Flexible Work Support Funds: The soldiers, 
veterans, and family members we serve frequently have very limited 
incomes. In addition, they face the need to spend modest amounts of 
money on things that can advance their career prospects--or impede them 
if such expenditures are not possible. These needs include things like 
tuition payments where Federal educational benefits are delayed and the 
veteran cannot afford payments up front. Or, books, work clothes, 
computer repairs or software, travel expenses for a job fair or 
interview, license or other work related fees, and more. To meet such 
needs, we provide small grants from our work support funds that can 
facilitate career progress.
Next Steps:
    As indicated above, our sense is that our model of services is 
highly promising and that its early indicators confirm this. But, we 
think we should take this developmental and testing phase further to 
generate firmer results, outcomes, and lessons.
    The present model of three sites over three operating years was 
devised three or so years ago, early in the then understandably chaotic 
period of our Nation becoming aware of the challenge and opportunity of 
responding to these severely wounded returning veterans--and of the 
initially chaotic and understaffed period of establishing the AW2 
program. The private sector then stepped forward, with an impressive, 
welcome, but still limited support of our demonstration program.
    Our sense, as experienced operators of demonstration projects, is 
that the present pilot project, while important as a source of early 
lessons, is nonetheless too limited. Three sites are too few; 3 years 
are too few. Far better in terms of both serving more people but more 
important in generating more reliable data to support lessons learned, 
would be more sites for more time. We feel that expanding our present 
three sites to 5 instead of 3 years would yield important dividends in 
lessons learned and confirmed. Moreover, expanding the number of sites 
would yield similar dividends. Hence, we argue for up to nine 
additional sites, or a dozen in all.
    Moreover, additional sites would allow clusters of sites to focus 
on potentially important themes. For instance, we would envision a 
cluster including concentrated mental health services; another 
including concerted advice to employers on both ways to accommodate the 
needs of disabled veterans in order to be productive and ways to 
``sculpt'' or structure job requirements to the same end; yet others 
emphasize peer group supports. Then, too, some or all of the additional 
sites should provide career services to the severely disabled veterans 
from all DoD uniformed services. To these ends, we seek Congressional 
and agency support as well as the continuation of private funding.
    Thank you for your invitation and attention.

                               __________
  Attachment I to Testimony of Carol A. Glazer: Brief descriptions of
        NOD, of the Army's Wounded Warrior Program (AW2), and of
                NOD's AW2 Careers Demonstration Project.
The National Organization on Disability
    The mission of the National Organization on Disability (NOD) is to 
expand the participation and contribution of America's 54 million men, 
women, and children with disabilities in all aspects of life. NOD was 
established in 1982 with the goal of inclusion for people with 
disabilities. It was a key player in the passage of the Americans with 
Disabilities Act (ADA) in 1990 and the placement of the statue of 
Franklin Delano Roosevelt in a wheelchair in the Nation's Capital.
    With offices in New York City and Washington, DC, NOD works 
nationally in partnership with international, national, and local 
organizations. NOD has earned respect for its work as an advocate, 
program developer, and provider of the field's most important research 
on the status of Americans with disabilities (the NOD/Harris Surveys). 
NOD provides direct services to clients only as a part of demonstration 
programs aimed at developing new approaches and scaling up those that 
work.
    NOD focuses on economic self-sufficiency for people with 
disabilities. Our most significant projects are AW2 Careers as 
described below and Start on Success (SOS), a student internship 
program that transitions young people with disabilities into the 
workforce and helps prepare special education students--especially from 
racial or ethnic minorities and low-income, urban families--for 
competitive employment.
    Despite a primary focus on education and employment, NOD remains 
vigorously involved in the wider range of concerns affecting people 
with disabilities, including those that arise at the moments of 
greatest vulnerability. NOD/Harris Surveys reveal that 56 percent of 
people with disabilities do not know whom to contact in the event of a 
disaster. NOD's Emergency Preparedness Initiative (EPI) promotes the 
inclusion of people with disabilities in emergency preparedness 
planning and response by participating in emergency planning exercises, 
hosting conferences and by providing information, technical assistance, 
and other resources to emergency planners, first responders, disability 
advocates, and people with disabilities.
    NOD is the only disability organization with credentialed personnel 
experienced in emergency management and disability issues.
The U.S. Army Wounded Warrior Program (AW2)
    At this writing, the U.S. Army Wounded Warrior (AW2) Program\***\ 
assists close to 5,000 of the most severely injured soldiers and 
veterans of the wars in Iraq/Afghanistan. To be ``in'' AW2, a soldier/
veteran must have one or more severe physical disabilities (e.g., 
burns, blindness, amputations, spinal cord injuries), often combined 
with Post-traumatic stress disorder (PTSD) and/or Traumatic Brain 
Injury (TBI).
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    \***\ Several years ago, then Secretary of Defense Donald Rumsfeld 
ordered all uniformed services to establish programs for severely 
wounded members that would aggressively facilitate their obtaining the 
services and benefits they need, including when medically separated 
from active duty. The Army's AW2 Program is the largest of these.
---------------------------------------------------------------------------
    Assistance is provided by a cadre of over 135 ``Advocates,'' Army 
employees or contractors who are stationed around the country with 
caseloads averaging 37. Advocates are counselors, advisors, navigators, 
case managers, and, yes, advocates with respect to the many and often 
confusing benefits and services available to and needed by such 
soldiers and veterans. The Advocates' mission is to pro-actively 
facilitate soldiers/veterans' receipt of the supports and services they 
need to become ``contributing members of their communities,'' the 
Army's admirable vision for those in the AW2 caseload. The Advocates 
are charged with staying engaged with veterans for ``as long as it 
takes.'' (Family members are also served.)
    A culminating step to this goal is sometimes for AW2 soldiers/
veterans to return to active duty, or, more commonly, to leave active 
duty and resume or enter civilian careers as veterans, where one of 
their options is to resume or enter civilian careers.
    But civilian career development is a specialized activity that the 
Army and its Advocates have little experience with and limited time to 
devote to. To develop and learn what approaches the Army could most 
effectively use to assist severely disabled AW2 soldiers and veterans 
to move forward on their career paths, the AW2 Program and the 
nonprofit NOD concluded a Memorandum of Understanding (MOU) in 2007 for 
a public/private collaboration under which NOD would assist AW2 in 
advancing the careers of the soldiers/veterans it serves (including 
their family members, as well).
    NOD's activities with AW2 under this MOU have had two major 
focuses: First, NOD drafted a Field Manual on Careers: Education, 
Training, and Work for the AW2 Advocates. This primer on career goals 
and services will shortly be promulgated to AW2 field staff as official 
guidance for their work on the careers front. Our major project is the 
AW2 Careers Demonstration Project, the focus of my testimony today. AW2 
Careers is a pilot project whose lessons are to be transferred to AW2 
both during the project and at its scheduled completion in 2012, when 
AW2 plans to assume full responsibility for career services and may 
conduct them in large part on the basis of the demonstration's 
experiences.
AW2 Careers
    NOD's AW2 Career Demonstration Program is a 4\1/2\-year\****\ pilot 
project (now just into its second full operating year) under which NOD 
has placed one or more NOD Career Specialists in three locations (the 
Dallas, Texas, Metroplex; Colorado Springs, serving the State of 
Colorado; and Fayetteville, serving the State of North Carolina), 
where, over a 3-year period, they team with the local Advocates, 
concentrating on career development for soldiers, veterans, and family 
members who are ready for such services.
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    \****\ This comprises several months for planning and start up, 
over 3\1/2\ years for site operations on a staggered startup basis, and 
several months to finalize the project's evaluation and promulgate its 
findings.
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Operational Model
    Like the Advocates, the Career Specialists employ a pro-active, 
intense, prolonged case management model helping the veterans think 
about and explore career options; obtain education, skill, aptitude, 
and interest assessments; devise resumes and career plans; acquire 
additional education and training; enter into work of various kinds 
(full- or part-time, paid or volunteer, for nonprofit, for-profit, or 
governmental employers--or self-employment as entrepreneurs or 
individual contributors); and advance in that work once so engaged. 
They do this by finding and linking veterans/families to relevant 
career services locally or providing the services themselves where 
local resources are inadequate.
    The AW2 career process is represented by the flow chart below, 
through all or some of which will move an AW2 veteran/family member. 
This is not necessarily a linear, forward only, process. Some veterans 
may backtrack to an earlier cell, to plan a different career or go to 
college, etc. Some may both work and go to school at the same time--or, 
may volunteer while working and/or in school. Career planning may be 
preparation for work or school and/or may occur while working or in 
school. Note, too, that Career Specialists ``stick with'' veterans 
after job placement for the full duration of the project.

[GRAPHIC] [TIFF OMITTED] 51876A.001


    A goal of a Career Specialist is to assist the veteran to move as 
far and as quickly through these cells as possible during the project's 
duration. Job placement is not the only criterion of success; equally 
important is motion forward. A closely linked goal is to learn ``what 
works'' to help the veteran move from step to step (see evaluation, 
below).
    Some veterans have already, on their own, entered school or at 
work, but many are in cell #1 and are our prime target population. They 
may be still in outpatient rehabilitation, still too injured to 
consider career steps at this time. Or, they may still be adjusting to 
the home environment and family situation; content to live on benefits 
at this time; discouraged from trying and not making progress; or just 
not ready or interested at this time. Many need time and encouragement 
to move forward.
    Others are dispersed across the other cells of the flow chart. 
Wherever they find the veterans, our Career Specialists find and 
establish relations with them, assess their needs, and assist them in 
moving forward. Attached is our most recent statistical status and 
progress report as of the end of June 2009.
    NOD has undertaken this Careers Demonstration mindful that it must 
utilize, not duplicate, other resources with the mission of assisting 
wounded veterans. In AW2 Careers local sites informal collaborators 
include the public agencies serving disabled veterans (Department of 
Labor and its VETS and ``Real Lifelines'' programs; the Veteran's 
Administration Vocational Rehabilitation and Employment offices; and 
the Social Security Administration offices); private nonprofit 
Veteran's Service Organizations (including Disabled American Veterans, 
VFW, Paralyzed Veteran's Association, AMVETS and American Legion) and a 
host of new voluntary organizations operating both nationally and 
locally, such as the Wounded Warrior Project and Yellow Ribbon Fund, 
that have formed since September 11th. The roster of such collaborators 
varies from site to site.
    In addition, NOD is collaborating with the nonprofit, foundation-
funded Give an Hour network, which stimulates local mental health 
providers to donate, gratis, an hour of mental health services per week 
to returning Iraq/Afghanistan veterans needing such services. Give an 
Hour advises both AW2 Advocates and NOD Career Specialists on how to 
make appropriate mental health interventions when needed, and assists 
in providing such services where appropriate.
Evaluation
    The Economic Mobility Corp. (Mobility), a nonprofit organization 
led by Mark Elliott, a workforce development specialist who helped 
design the program, is responsible for conducting the program 
evaluation. AW2 Careers' two main goals: 1) developing effective ways 
to help veterans achieve better employment and education outcomes; and 
2) using what we learn to inform the military and the helping 
professions and agencies about how best to assist such severely 
disabled veterans meet career goals.
    A final evaluation after the completion of Year 3 will report on: 
1) how effectively the program is implemented at each site; 2) the 
extent to which the initiative increases the level and quality of the 
employment and educational services that veterans and their families 
receive; 3) what employment and educational outcomes veterans/families 
achieve after receiving program services; and 4) what career supports 
or other factors were most helpful in generating such outcomes.
Funding
    NOD designed AW2 Careers to be privately funded (to enable quick 
actions devoid of bureaucratic impediments) with national funders 
supporting the national office's management, technical assistance, 
evaluation, and communication/promotional activities, and local funders 
supporting each site. At present, AW2 Careers is supported by 17 
national and local foundations and two private corporate donors. These 
funders (counting grants provided and renewals that are likely) support 
93 percent of the present 4\1/2\-year project budget of $4.6 million. 
NOD is seeking to fill the remaining gap through additional support 
from present and other potential funders.
      Attachment II: AW2 Careers Status Report as of June 30, 2009


------------------------------------------------------------------------
                                                TX     CO     NC    All
------------------------------------------------------------------------
Number of Soldiers/Veterans on the Careers       61     49     50    160
 Caseload as of June 30
------------------------------------------------------------------------
Current Status of Soldiers/Veterans
------------------------------------------------------------------------
Currently employed,\1\ in education or           37     29     21     87
 training and/or volunteering
------------------------------------------------------------------------
  Engaged in career planning                     32     22     20     74
------------------------------------------------------------------------
Still on active duty                              1      2      9     12
------------------------------------------------------------------------
  Engaged in career planning                      0      2      7      9
------------------------------------------------------------------------
Currently not on active duty, employed, in       16     16     20     52
 education/training or volunteering
------------------------------------------------------------------------
  Engaged in career planning                      8     12     17     37
------------------------------------------------------------------------
Status not confirmed (Soldier/Veteran not         7      2      0      9
 contacted or status not recorded)
------------------------------------------------------------------------
Outcomes Achieved After Receiving Services
------------------------------------------------------------------------
Soldiers/Veterans who ever achieved any          17     20      4     41
 outcome after receiving services \2\
------------------------------------------------------------------------
  Soldiers/Veterans who achieved any outcome      0      0      1      1
   in June 2009
------------------------------------------------------------------------
Soldiers/Veterans currently in an outcome        17     19      4     40
 achieved after receiving services
------------------------------------------------------------------------
Family members currently in an outcome            2      0      1      3
 achieved after receiving services
------------------------------------------------------------------------
Employment among Soldiers/Veterans
------------------------------------------------------------------------
Ever employed in a civilian job since on the     24     22     11     57
 caseload
------------------------------------------------------------------------
Currently employed in a civilian job \3\         20     19     11     50
------------------------------------------------------------------------
Ever obtained a civilian job after receiving      6     14      1     21
 services \4\
------------------------------------------------------------------------
  Obtained a civilian job in June 2009            0      0      1      1
------------------------------------------------------------------------
Currently in a civilian job obtained after        6     12      1     19
 receiving services
------------------------------------------------------------------------
Education Among Soldiers/Veterans
------------------------------------------------------------------------
Ever attended education/training since on        21     12     10     43
 the caseload
------------------------------------------------------------------------
Completed education or training                   0      1      0      1
------------------------------------------------------------------------
Currently attending education or training        19     10     10     39
------------------------------------------------------------------------
Ever started education/training after             8      6      2     16
 receiving services
------------------------------------------------------------------------
  Started education/training in June 2009         0      0      0      0
------------------------------------------------------------------------
Currently in education/training begun after       8      5      2     15
 receiving services
------------------------------------------------------------------------
Volunteering among Soldiers/Veterans
------------------------------------------------------------------------
Ever volunteered since on the caseload            9      6      6     21
------------------------------------------------------------------------
Currently in a volunteer activity                 9      6      5     20
------------------------------------------------------------------------
Ever started a volunteer activity after           5      3      1      9
 receiving services
------------------------------------------------------------------------
  Started a volunteer activity in June 2009       2      0      0      2
------------------------------------------------------------------------
Currently in a volunteer activity begun           5      3      1      9
 after receiving services
------------------------------------------------------------------------
Contact Since the Start of the Demonstration
 at Each Site
------------------------------------------------------------------------
Soldiers/Veterans ever contacted                 55     47     50    152
------------------------------------------------------------------------
Soldiers/Veterans who ever received a            53     40     48    141
 service or referral
------------------------------------------------------------------------
Soldiers/Veterans seen in person from            42     20     39    101
 December 2008 through June 2009 \5\
------------------------------------------------------------------------
Family members who ever received a service       24      0      6     30
 or referral
------------------------------------------------------------------------
Contact in June 2009
------------------------------------------------------------------------
Soldiers/Veterans contacted (service,            30      2     30     62
 referral or follow up)
------------------------------------------------------------------------
  Soldiers/Veterans who received a new           25      0     25     50
   service or referral
------------------------------------------------------------------------
  Soldiers/Veterans who had follow up or         24      2     10     36
   update contacts
------------------------------------------------------------------------
Soldiers/Veterans where contact attempted        14      1      4     19
 but not made
------------------------------------------------------------------------
Soldiers/Veterans seen in person                  3      1     14     18
------------------------------------------------------------------------
Family members who received a service,           24      0      5     29
 referral or follow up
------------------------------------------------------------------------
\1\ Includes civilian jobs only.
\2\ 5 Soldiers/Veterans achieved 2 outcomes: 4 are employed and in
  education; 1 is employed and volunteering.
\3\ Currently employed means the last employment assessment entered
  indicates that the Soldier/Veteran is employed. However, most
  assessments were entered months ago, and ``current'' does not indicate
  that the status was verified in the current month. The same applies to
  the education assessments and volunteer information.
\4\ The 20 Soldiers/Veterans have obtained a total of 23 jobs since
  receiving services.
\5\ December 2008 is when CSs started tracking whether contacts were in
  person, by phone or by email.


                                 
           Prepared Statement of Bradley G. Mayes, Director,
  Compensation and Pension Service, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs
    Mr. Chairman and Members of the Subcommittee, thank you for 
inviting me to speak today on the timely and important issues related 
to providing compensation for quality of life (QOL) loss to our 
Nation's disabled Veterans.
                     I. Quality of Life Loss Issues
Background
    Department of Veterans Affairs (VA) compensation for service-
connected disability is based on average lost earnings due to an injury 
or disease incurred in or aggravated by military service. Benefits are 
paid according to a rating assigned to a Veteran's disability based on 
the VA Schedule for Rating Disabilities. The statute at 38 U.S.C. 
Sec. 1155 states that ``ratings shall be based, as far as practicable, 
upon the average impairments of earning capacity.'' As a result, the VA 
rating schedule compensates Veterans for the average loss in income 
resulting from their service-connected disabilities. In recent years, 
this approach to compensation has been challenged as inadequate because 
it focuses only on earnings loss and not on the larger issue of QOL 
loss. VA has received input on the QOL loss issue from numerous sources 
and has sought to identify the implications of adopting a policy of 
compensating Veterans for QOL loss in conjunction with the current 
earnings loss compensation system. Those sources providing information 
and recommendations to VA have included: the President's Commission on 
Care for America's Returning Wounded Warriors (Dole-Shalala 
Commission); the Veterans' Disability Benefits Commission (Benefits 
Commission); the Center for Naval Analyses (CNA); the National Academy 
of Sciences' Institute of Medicine (IOM); and, most recently, Economic 
Systems, Incorporated (EconSys).
    Definitions of QOL loss vary and may focus on aspects of an 
individual's physical and mental health or may address the individual's 
overall satisfaction associated with life in general. The IOM traces 
the concept back to the Greek philosopher Aristotle's description of 
``happiness'' but the IOM's definition encompasses the cultural, 
psychological, physical, interpersonal, spiritual, financial, 
political, temporal, and philosophical dimensions of a person's life. A 
more succinct definition utilized by EconSys refers to an individual's 
overall sense of well-being based on physical and psychological health, 
social relationships, and economic factors.
Dole-Shalala Commission
    QOL loss was addressed in the 2007 Report of the President's 
Commission on Care for America's Returning Wounded Warriors, also 
referred to as the Dole-Shalala Commission. Although the report 
primarily focused on ways to assist severely wounded servicemembers 
returning from Iraq and Afghanistan, it recommended that Congress 
should restructure VA disability payments to include compensation for 
non-work-related effects of permanent physical and mental combat-
related injuries. According to the report, this would compensate a 
disabled Veteran for the inability to participate in favorite 
activities, social problems related to disfigurement or cognitive 
difficulties, and the need to spend a great deal of time performing 
activities of daily living. As a result of the report, VA contracted 
for a study on QOL loss with EconSys, which was completed in 2008.
    In terms of existing compensation, the EconSys study agrees with 
prior studies that earnings loss is on average at least fully 
compensated under the current system and in some cases overcompensated. 
However, studies agree that certain conditions such as mental health 
are undercompensated. Prior studies found that QOL loss does exist for 
service-disabled Veterans and recommended that VA examine possibilities 
for QOL compensation, acknowledging that implementation would be 
lengthy and have significant cost implications.
Veterans' Disability Benefits Commission
    The Benefits Commission was created by the National Defense 
Authorization Act of 2004 and produced a final report in 2007 that 
provided recommendations on a wide range of issues related to the 
claims process and the benefits award system. Among the issues 
addressed was QOL loss. The Benefits Commission incorporated 
information from the CNA and IOM studies into its final report, 
agreeing with these organizations that QOL loss exists among disabled 
Veterans. The Benefits Commission also supported the idea that VA 
should undertake studies to research and develop QOL measurement tools 
or scales and ways to determine the degree of loss of QOL on average 
resulting from disabling conditions listed in the rating schedule. 
However, it acknowledged that QOL loss assessment is relatively new and 
still at a formative stage, which indicates that implementation would 
be a long-term, experimental, and costly activity. In addition, it 
recognized special monthly compensation benefits and ancillary benefits 
as existing vehicles to assist with QOL loss among disabled Veterans.
Center for Naval Analyses
    A study on QOL loss among Veterans was conducted by CNA at the 
request of the Benefits Commission. It focused on whether the current 
VA benefits program compensates for QOL loss. A survey was conducted to 
determine whether QOL loss existed among disabled Veterans and whether 
parity existed between the amounts of VA compensation received by 
disabled Veterans and the average earned income of non-disabled 
Veterans. CNA determined that QOL loss does exist among disabled 
Veterans. CNA also found that VA generally compensated adequately for 
lost earnings and in some cases overcompensated, as with Veterans who 
enter the system at retirement age, which CNA stated implies a built-in 
QOL loss payment for these Veterans. However, CNA found that 
undercompensation occurred for younger Veterans with more severe 
disabilities and for Veterans with all categories of mental 
disabilities compared to physical disabilities. CNA also pointed out 
that those Veterans with mental disabilities showed the greatest QOL 
loss.
Institute of Medicine
    The Benefits Commission considered QOL loss findings documented in 
A 21st Century System for Evaluating Veterans for Disability Benefits, 
produced by IOM at the commission's request. This lengthy IOM review of 
the VA disability benefits process addressed QOL loss. A distinction 
was made by IOM between current VA compensation for a Veteran's work 
impairment and a compensation system based on ``functional 
limitations'' on usual life activities. IOM concluded that the 
Veterans' disability compensation program should compensate for: work 
disability, loss of ability to engage in usual life activities other 
than work, and QOL loss. IOM also recommended that VA develop a tool 
for measuring QOL loss validly and reliably in the Veteran population 
and develop a procedure for evaluating and rating the QOL loss among 
disabled Veterans.
Economic Systems, Incorporated
    The most recent study of QOL loss was produced by EconSys, titled 
Study of Compensation Payments for Service-Connected Disabilities, 
Volume III, Earnings and Quality of Life Loss Analysis, released in 
September 2008. VA tasked EconSys with analyzing potential methods for 
incorporating a QOL loss component into the current rating schedule and 
with estimating the costs for implementing these methods. The EconSys 
study proposed three options that could be utilized by VA.
    The first and simplest method would be to establish statutory QOL 
loss payment rates based on the combined degrees of disability. This 
method would ``piggy-back'' the QOL loss payment on top of the assigned 
disability evaluation under the current rating schedule. The amount of 
the payment would be determined by assigning a QOL score, ranging from 
-2 to 4, with 4 representing death and negative values representing an 
increase in the QOL of the Veteran. Although this method would be the 
easiest to administer because significant changes to the VA medical 
examination and rating process would not be necessary, it raises issues 
of fairness. EconSys found that the severity of QOL loss does not 
mirror the severity of earnings loss captured in the ratings schedule. 
Moreover, EconSys found that QOL loss varies greatly both by condition 
and by individual, meaning that different Veterans with the same 
disability rating or the same condition could vary widely in their QOL. 
Under this proposed method, a Veteran with minimal actual QOL loss 
could receive the same extra QOL loss payment as a Veteran with the 
same disability who has a severe actual QOL loss. EconSys has estimated 
that additional annual program costs for implementing this method range 
from $10 billion to $30.7 billion.
    A second optional method proposed by EconSys would key QOL loss 
payment amounts to the medical diagnostic code of the primary 
disability, as well as to the combined percentage rate of disability. 
This option anticipates that Congress would create a separate pay scale 
based on the Veteran's combined degree of disability and primary 
disability. This method would arguably produce more accurate QOL loss 
payments because two variables rather than one would be involved and 
previous studies have shown that some disabilities, such as mental 
disorders, are associated with greater actual QOL loss than others. 
However, implementing this would involve conducting large sample-size 
surveys to assess the average QOL loss for each of over 800 diagnostic 
codes and then factoring in the additional loss for each of the 10 
percent increments of the rating schedule up to 100 percent. No surveys 
like this have been conducted in the past as a means to assign a dollar 
value to QOL loss. Inherent in such surveys is the potential for 
inconsistency and inaccuracy because the data would involve Veterans' 
self-reported answers to subjective questions. Given the number of 
``diagnostic code-evaluation percentage'' combinations involved, a QOL 
loss scale developed under this method would be extremely complex and 
require extensive program and system modifications. In the event this 
method were implemented, it would likely be subject to the same issues 
of fairness as the first method. A Veteran with a low combined 
disability percentage rating may receive more total compensation than a 
Veteran with a high combined disability percentage rating because of a 
difference in the QOL loss value assigned to different diagnostic 
codes. Moreover, the disability identified as primary for existing 
compensation may not be the primary cause of a Veteran's QOL loss. 
EconSys has estimated that this method would result in annual program 
costs of $9 billion to $22.2 billion.
    A third option proposed by EconSys would involve an individual 
assessment of each Veteran for QOL loss by both a medical examiner and 
a claims adjudicator. It would also involve establishing separate 
rating tables for earnings loss and QOL loss and using these in 
combination with subjective information received from the Veteran about 
his or her QOL loss. This method would arguably allow for the most 
accurate assessment of QOL loss because of its individualized nature. 
However, it would require extensive training of VA personnel to 
administer and interpret QOL loss assessment tools and then apply them 
in the rating process. Once again, issues of subjectivity and fairness 
would likely be involved. EconSys has estimated that this method would 
result in annual administrative costs of approximately $71.5 million, 
in addition to program costs of $10.5 billion to $25.7 billion.
           II. Implementing Quality of Life Loss Compensation
VA Challenges
    Implementing a disability rating system that compensates for QOL 
loss would involve at least two major challenges for VA. The first 
would be to accurately and reliably determine whether, and to what 
extent, a disabled Veteran suffers from QOL loss. The second would be 
to establish equitable compensation payments for varying degrees of QOL 
loss. The first challenge has been addressed by other organizations and 
has led to the development of QOL loss assessment tools. The most well-
known of these is the RAND Corp.'s Short Form 36 Health Survey Version 
2 (SF-36) and Short Form 12 Health Survey (SF-12). These are survey 
questionnaires that measure physical functioning, role limitations due 
to physical health, bodily pain, general health perceptions, vitality, 
social functioning, role limitations due to emotional problems, and 
mental health. The questionnaires yield a score that is interpreted to 
measure QOL loss in relation to the non-disabled population.
    The CNA study conducted for the Benefits Commission utilized a 
survey instrument derived from the SF-36 and SF-12. The results showed 
that service-connected disabled Veterans were more likely to report QOL 
loss than non-disabled Veterans. However, CNA made it clear that the 
results were based on subjective self-reporting by Veterans and that, 
although survey instrument scoring showed a difference between disabled 
and non-disabled Veterans, the instruments were not able to show how 
much difference in QOL loss existed between the two groups. This is 
problematic for VA because the second challenge of assigning a dollar 
value for compensation purposes depends on distinguishing different 
degrees of QOL loss among disabled Veterans.
    As EconSys stated in its study, users of existing QOL loss 
assessment instruments seek to make comparisons of QOL loss between 
different groups or to measure improvements in QOL loss as a result of 
treatment interventions. However, they are not trying to attach a 
dollar value to differences in loss of QOL. Therefore, although the CNA 
study indicates a greater QOL loss among disabled Veterans compared to 
non-disabled Veterans, it does not provide VA with a means to measure 
the extent of differences and provide equitable compensation 
accordingly.
    The EconSys study, described above, provides options for 
implementing a compensation procedure for QOL loss among Veterans, but 
is not specific about how new assessment instruments would be 
developed. For example, in the second option offered by EconSys, part 
of the QOL loss payment would be tied to the medical diagnostic code 
that represents the disability which is service-connected. This is 
based on the assumption that certain medical disabilities generally 
produce greater QOL loss than others. To implement this, VA would be 
required to develop new survey instruments that target specific 
diagnostic codes. Surveys now in use, such as the SF-36 and SF-12, are 
generic and would be of little help. When developing any new survey 
instrument, the issue of minimizing subjectivity would always be 
present. Additionally, the EconSys study does not address a viable 
means to assign a dollar value to the different degrees of QOL loss 
that may be experienced by individual Veterans. This burden would 
remain with VA and Congress.
    VA would face many additional problems in the attempt to implement 
QOL loss compensation. Since a major goal of VA is successful treatment 
and rehabilitation for disabilities, it is likely that the mental and 
physical health of some Veterans would improve over time. On the other 
hand, a Veteran's circumstances may lead to an increase in QOL loss. 
Therefore, the issue of how to adjust compensation payments for changes 
in a Veteran's QOL loss over time would need to be dealt with.
    An additional concern presented by two of the EconSys options is 
the potential for appeals of Veterans' ratings. In options two and 
three, it is highly likely that Veterans with similar conditions of 
similar severity would receive different ratings and awards. This 
inconsistency introduces an equity issue that could lead to additional 
appeals and therefore a more frustrating process for Veterans.
Current VA Compensation
    Most of the organizations that have provided input to VA on QOL 
have stated that VA has a number of special benefits that implicitly, 
if not expressly, compensate for QOL loss, such as ancillary benefits, 
special monthly compensation, and total disability based on individual 
unemployability. Special monthly compensation and ancillary benefits 
are provided to Veterans in addition to compensation paid on the basis 
of the schedular rating assigned to service-connected disabilities.
    The ancillary benefits to which these organizations refer are 
intended to provide assistance to Veterans with special needs resulting 
from exceptional handicaps due to certain service-connected 
disabilities. Assistance with the purchase of an automobile or other 
conveyance, with obtaining the adaptive equipment necessary to ensure 
that the Veteran can safely operate the vehicle, is authorized by 38 
U.S.C. Sec. 3902. Eligible Veterans include those with service-
connected loss, or permanent loss of use, of one or both feet or one or 
both hands, and those with permanent significant visual impairment.
    Another ancillary benefit that provides assistance to Veterans and 
servicemembers with certain service-connected disabilities is 
assistance in acquiring housing with special features, which is 
authorized by 38 U.S.C. Sec. 2101(a). Eligible Veterans and 
servicemembers include those with permanent and total service-connected 
loss, or loss of use, of both lower extremities that precludes 
locomotion without the aid of a mechanical device; blindness in both 
eyes plus loss, or loss of use, of one lower extremity; loss, or loss 
of use, of one lower extremity plus residuals of organic disease or 
injury that precludes locomotion without the aid of a mechanical 
device; loss, or loss of use, of one lower and one upper extremity that 
precludes locomotion without the aid of a mechanical device; loss, or 
loss of use, of both upper extremities that precludes use of the arms 
at or above the elbows; or disability due to a severe burn injury. In 
addition, VA is authorized by 38 U.S.C. Sec. 2101(b) to provide 
assistance in adapting a residence or acquiring an already adapted 
residence to Veterans who are not eligible for assistance under 
Sec. 2101(a) and are entitled to compensation for a permanent and total 
service-connected disability due to blindness in both eyes; including 
anatomical loss, or loss of use, of both hands; or due to a severe burn 
injury.
    Additionally, a yearly clothing allowance is authorized by 38 
U.S.C. Sec. 1162 for a Veteran who, because of a service-connected 
disability, wears or uses a prosthetic or orthopedic appliance, 
including a wheelchair, which tends to wear out or tear the Veteran's 
clothing. A clothing allowance is also authorized when a physician 
prescribes medication for a service-connected skin condition that 
causes irreparable damage to a Veteran's outer garments.
    In addition to these ancillary benefits, VA is authorized by 38 
U.S.C. Sec. 1114 to provide special monthly compensation in addition to 
schedular disability compensation to Veterans with service-connected 
disabilities who are housebound, are in need of aid and attendance to 
accomplish daily living activities, have severe hearing loss or visual 
impairment, or have loss, or loss of use, of extremities or 
reproductive organs. In addition, VA is authorized to pay special 
monthly compensation to female Veterans for breast tissue loss.
    VA regulations authorize a rating of total disability based on 
individual unemployability if a Veteran is unable to obtain, or 
maintain, substantially gainful employment because of service-connected 
disabilities. This is an extra-schedular rating resulting in 
compensation paid at the 100-percent schedular rate for Veterans who 
have been awarded a single 60-percent or a combined 70-percent 
disability rating and are unable to work as a result of their service-
connected disability. The benefit is also available based on a VA 
administrative review, if the schedular requirements are not met.
                            III. Conclusion
    This testimony attempts to outline some of the issues and 
challenges that VA would face if authorized to provide QOL loss 
compensation. If VA is to provide QOL loss compensation consistent with 
the proposed options in the EconSys study, statutory changes would be 
required. Additional administrative costs for training VA personnel and 
reconfiguring VA computer systems, as well as the costs for providing 
additional benefits to Veterans, would be considerable. The 
implications for adopting such a policy are significant for VA. This 
testimony also illustrates how, in addition to compensation provided 
under the rating schedule, VA provides special monthly compensation, 
ancillary benefits, and extra-schedular ratings to Veterans with 
certain service-connected disabilities, which multiple studies have 
recognized as existing tools to promote the QOL of Veterans.
    As always, VA maintains its dedication to fairly and adequately 
serving the disabled Veterans who have sacrificed for our country.

                                 
                Statement of Sarah Wade, Chapel Hill, NC
    Chairman Hall, Ranking Member Lamborn, Members of the Subcommittee, 
thank you for allowing me the opportunity to provide testimony 
regarding quality of life and ancillary benefit issues. My name is 
Sarah Wade, wife of Army Sergeant (Retired) Ted Wade.
    My husband served first in Afghanistan, later Iraq, and on 
Valentine's Day 2004, his Humvee was hit by an Improvised Explosive 
Device (IED) on a mission in Mahmudiyah. Ted sustained a severe 
Traumatic Brain Injury (TBI), his arm was completely severed above the 
elbow, suffered a fractured leg, broken foot, shrapnel injuries, as 
well as other complications, and later would be diagnosed with Post-
traumatic stress disorder (PTSD). He remained in a coma for over 2\1/2\ 
months, and withdrawal of life support was considered, but miraculously 
he pulled through.
    After the battle for his life was won, the war for the necessary 
mix of benefits and services began, and continues today. Due to the 
severity of his brain injury, Ted is sometimes unable to fight for 
himself, so his struggle has become my own. I am consumed 24 hours a 
day assisting my husband with managing his special diet, preparing 
meals, providing transportation, enforcing medication management and 
other necessary routines, overseeing his medical care, checking his 
blood glucose level, administering injections of insulin because of 
blood sugar issues, or for hormone replacement therapy due to residual 
pituitary damage secondary to the brain trauma, and much more.
    These responsibilities have left no time for me to return to 
school, full-time employment, or have a life of my own, because this is 
more than one person can keep up with. Five-and-a-half years later, my 
schedule continues to be hectic and we still struggle to maintain a 
reasonable standard of living. Updating section 1114, Title 38, United 
States Code, to include impairment specific to Traumatic Brain Injury 
(TBI) would create a less restrictive option for providing more 
appropriate and individualized long-term supports, allowing the veteran 
reasonable access to the community, maximizing quality of life, and 
rehabilitation outcomes.
    The new schedule for rating Traumatic Brain Injury, which was 
updated last fall, is an enormous improvement for the mild to moderate 
range of TBI. It will allow veterans within this range of disability, 
deserving of a 100 percent rating, to be granted that decision. But, 
there were no changes made to special monthly compensation (sec. 1114), 
as VA felt ``the SMC regulations potentially apply in all cases and 
therefore need not be repeated,'' or as Mr. Tom Pamperin, Deputy 
Director of VA Compensation and Pension Service was quoted as saying in 
USA Today, ``Veterans who have suffered the most severe brain injuries 
will not receive much, if any, extra money because existing regulations 
provided adequate compensation in serious cases.'' However, the SMC 
regulations have not been updated to include impairment specific to 
TBI, and therefore, fail to address a group within the moderate to 
severe range, that are functioning individuals with serious 
disabilities and significant needs.
    My husband is not seeking monetary compensation for his loss, but 
the wherewithal for veterans with severe TBI to live in their own homes 
and communities as independently as possible. They have paid a high 
price, and if these veterans are not able to be fully independent, they 
should be self-managed as much as possible, and have choices. It is our 
belief these veterans who were severely injured while serving their 
country should be given the tools to live as normal a life as possible 
and integrate into their communities to the fullest extent that they 
are capable. And unfortunately, this does require additional financial 
resources.
    One of our concerns with special monthly compensation is the 
criteria for ``regular'' aid and attendance (A&A) at the ``L'' rate. 
The new schedule ``added a note defining `instrumental activities of 
daily living' as referring to activities other than self care that are 
needed for independent living, such as meal preparation, doing 
homework, and other chores, shopping, traveling, doing laundry, being 
responsible for one's own medication, and using the telephone.'' This 
is certainly an improvement and 3.352(a), the basic criteria for 
regular A&A, should be updated to include instrumental activities of 
daily living as a qualifying disability, as these activities require 
the regular assistance of another person.
    Some instrumental activities of daily living could potentially 
apply under the basic criteria for regular A&A, where it states, ``The 
following will be accorded consideration in determining the need for 
regular aid and attendance . . . incapacity, physical or mental which 
requires care or assistance on a regular basis to protect the claimant 
from hazards or dangers incident to his or her daily environment.'' 
However, meal preparation, homework, chores, shopping, traveling, or 
laundry, for example, may not be interpreted this way. A&A should be 
updated to include instrumental activities of daily living so these 
veterans may be eligible for compensation under section 1114(l), Title 
38, United States Code.
    The other major issue we have is that needing ``assistance on a 
regular basis to protect the claimant from hazards or dangers incident 
to his or her daily environment,'' does not qualify a veteran for the 
higher level aid and attendance allowance at the ``R1'' or ``R2'' rate. 
The regular ``L'' rate works out to only be an additional $21.50 a day. 
These are not adequate resources for someone who needs the assistance 
of another person most or all of the time. This may only be enough to 
provide 16 hours of support to the veteran each week, not including the 
cost of transportation or other expenses. Depending on schedule and 
fuel cost, a family in our situation could spend $1500.00 a year on 
gasoline to get to and from appointments. This does not include 
recreation, shopping, socialization or community reintegration that is 
so important to rehabilitation after a severe TBI. And Ted and I live 
in an urban area where he is able to walk to the grocery store, gym, 
and other activities, with the appropriate supervision. That is not the 
case for many veterans.
    The support services currently offered by VHA are not appropriate 
either and are too restrictive for someone who is active, self aware, 
and whose needs are largely non-medical. Someone like my husband needs 
supports and services that will allow him to continue to live and be 
cared for in his own home and community. My current respite options are 
to leave Ted in a VA extended care facility up to 30 days a year. He 
can go to an adult day care program or TBI group, though he feels this 
is belittling and will not go voluntarily. VA has offered to provide a 
home health aide that is unable to take him outside of the home, even 
though he does not need regular skilled care, and his needs are often 
outside of the home. The fee basis program, when pursued, will pay for 
an assisted living facility at a per diem higher than the additional 
money he receives monthly at the ``L'' rate. However, he would prefer 
to live at home, not in an institutional setting. Forcing Ted to be 
homebound or forcing him out of his community, in my opinion, is a 
serious quality of life concern. And it is also important to note that 
none of these options would help him achieve a higher level of 
functioning, independence, and will set back his recovery.
    Veterans with severe TBI need the option of supported living in 
their own homes and out in their own communities. The VHA options I 
have mentioned will allow Ted to merely exist, not truly live, or be 
included in society. These veterans need to be involved in decisions 
about their own lives, allowed to choose what, when and where they eat, 
where they live and shop, what they do with their time, what their 
needs are, how they are provided, who provides this support, and who is 
involved in their life. A higher level of aid and attendance would give 
them the same autonomy, dignity, flexibility, and quality of life 
afforded to veterans with physical disabilities. This would allow them 
to be spontaneous and obtain more appropriate, individualized, timely 
assistance, with less bureaucracy. It would also enable these veterans 
to achieve their maximum potential, becoming more capable, and as a 
result, may not require this level of benefit for life.
    Some veterans diagnosed with severe Traumatic Brain Injury only 
meet one of three criteria for the higher level aid and attendance 
rate. To qualify, one, the Veteran must be entitled to compensation 
under section 1114(o) of Title 38, United States Code, which is based 
on anatomical loss, or loss of use of extremities, some organs (not 
including the brain), hearing, or sight. Anatomical loss of part of the 
brain, loss of use of cognitive capability, such as loss of use of 
working memory, for example, does not apply. Two, they must be entitled 
to the regular aid and attendance allowance, or ``L'' rate described in 
3.352(a), which I mentioned above. Three, they must have a higher level 
of need for personal health care services provided on a daily basis in 
the home, described in 3.352(b), paragraph 2, and in the absence, would 
require hospitalization, nursing home care, or other residential 
institutional care.
    Though veterans with severe TBI may require 24-hour care, 
supervision for safety, or assistance with most, or all, higher level 
activities, they are not always provided a comparable level of 
compensation to a veteran with severe physical residuals. Though a 
veteran with a severe TBI may be able to perform some instrumental 
activities of daily living, they may require queuing or it may take 
much longer to complete these tasks than it would have pre-injury. 
These veterans not only need assistance with tasks they can no longer 
perform, but also someone to facilitate, or to accomplish ones they 
cannot keep up with. Without the aid of a family member with additional 
resources, although having no major physical disabilities, these 
veterans are not able to reside in their own homes, and therefore, will 
require residential care.
    A veteran who requires a greater amount of assistance, in the home 
or out in the community, medical or non-medical, should be considered 
for compensation under sections 1114(r)(1) and (r)(2), Title 38, United 
States Code. We believe all veterans should be given access to the 
community whenever medically possible, not homebound, and the criteria 
for the higher level special monthly compensation rates should be 
updated to allow that.
    Ted and I feel H.R. 3407, the Severely Injured Veterans Benefits 
Improvement Act of 2009, is a step in the right direction toward 
eliminating the disparity in benefits. We applaud Congressman Buyer, 
the Ranking Member of the House Committee on Veterans Affairs, along 
with Chairman Michaud and Ranking Member Brown of the Subcommittee on 
Health, for introducing this bill.
    It appears that the intent of H.R. 3407 is to move veterans with 
Traumatic Brain Injury up to the 1114(o) rate, which will then 
potentially qualify them for the ``R1'' or ``R2'' rate, if they meet 
the aid and attendance requirements. However, we are concerned that 
this may be too broad, if anyone who qualifies for SMC, and has a TBI, 
will automatically qualify for the ``O'' rate. For example, an above 
elbow amputee with a mild TBI, who is able to live independently, would 
be granted the same compensation as my husband, an above elbow amputee 
with a severe TBI, who requires the assistance of another person around 
the clock. An able-bodied veteran with a mild TBI would not be granted 
any SMC at all. We feel the language of the bill should be modified to 
compensate TBI by itself, according to the severity of consequences.
    In contrast, H.R. 3407 may be too narrow if the criteria for the 
higher level of aid and attendance is interpreted to only include 
veterans with a TBI that has caused physical limitations. We feel the 
bill should also include an amendment to 3.352(b), paragraph 2, to 
address cognitive or other neurological impairment, and assistance to 
protect the safety of the veteran from his or her environment. Without 
this higher level of support or supervision, the veteran with severe 
impairment (other than physical limitations), will also ``require 
hospitalization, nursing home care, or other residential institutional 
care.'' Preventing the veteran from being placed in institutional care 
appears to be the intent of the A&A benefit. Ted and I would like to 
see special monthly compensation updated to prevent this for all 
service-connected disabilities.
    My husband will continue to face significant challenges for the 
rest of his life, as a severe TBI is never static, but a progression of 
peaks and valleys. Veterans like Ted need support that will be around 
as long as the injuries they sustained in service to their country. 
Passing legislation to update section 1114, Title 38, United States 
Code, to address impairment specific to Traumatic Brain Injury, will 
restore a lot of freedoms he has lost since being wounded. Mr. 
Chairman, thank you again for the opportunity to share my story with 
you and please feel free to contact me if there are any questions you 
may have.
                   MATERIAL SUBMITTED FOR THE RECORD
                                               Economic Systems Inc
                                                   Falls Church, VA
                                                      July 27, 2009

Hon. John J. Hall
Chairman
Subcommittee on Disability Assistance
and Memorial Affairs
Committee on Veterans' Affairs
335 Cannon House Office Building
Washington, DC 20515

Dear Mr. Chairman:

    As requested, I would like to extend my remarks to your question 
regarding including Vietnam Era veterans in a future analysis of 
earning loss. My oral answer should be extended as indicated in the 
enclosed statement.
    Thank you for the opportunity to appear before your Subcommittee. 
If you have any further questions, please feel free to contact me.

            Sincerely,

                                              George Kettner, Ph.D.
                                                          President
Enclosure
                               __________
                          EXTENSION OF REMARKS
                         GEORGE KETTNER, Ph.D.
                    PRESIDENT, ECONOMIC SYSTEMS INC.
            BEFORE THE HOUSE COMMITTEE ON VETERANS' AFFAIRS
        SUBCOMMITTEE ON DISABILITY ASSISTANCE & MEMORIAL AFFAIRS
                             JULY 23, 2009
    Chairman Hall recognized that the 2008 EconSys study focused on 
veterans who were discharged from the military after 1980 which omitted 
a large segment of the veteran population, especially Vietnam Era 
veterans. He asked how the analysis could be done differently if data 
were readily available to include the baby boom generation that is 
placing the greatest demand on VA.
    Demographic and human capital data available from the Defense 
Management Data Center (DMDC) is not considered accurate on veterans 
discharged prior to 1980. Therefore, it is not possible to identify a 
sample of non service-connected veterans from DMDC data closely matched 
on human capital characteristics to serve as a comparison group in an 
analysis of the impact of disability on earnings. However, it could be 
possible to randomly select a sample of non service-connected veterans 
from either the DMDC data or from the VA Beneficiary Identification and 
Records Locator Subsystem (BIRLS) matched on a more limited set of 
known characteristics such as age, military rank, and date of 
discharge. This sample would lack key characteristics such as education 
level, military occupational series, and Armed Forces Qualification 
Test scores as are available on the post 1980 group and may not be as 
well matched to the service-connected veteran population. This 
limitation would need to be recognized.
    In addition, if more time were available for the analysis, more 
detailed analysis of the earnings data for veterans discharged prior to 
1980 and since 1980 could be completed, especially analysis of lifetime 
earnings. Social Security Administration retains annual earnings for 
individuals from 1951. These annual earnings were captured last year 
but there was not sufficient time to analyze that data.
    We note that of the estimated seven million living Vietnam Era 
veterans, 28.4 percent are age 65 or older; 44.6 percent are age 60 to 
64 and thus are nearing the normal retirement age. Thus, the earnings 
of Vietnam Era veterans are likely to be already diminishing or very 
limited already.
    For those veterans already service-connected, it is unlikely that 
benefits would be reduced in any way. We suggest that the focus of 
policy or statutory adjustments should be on future earnings and that 
the emphasis of future analysis should be on veterans discharged since 
1980, even if veterans discharged prior to 1980 are also analyzed.

                                 
                     DEPARTMENT OF VETERANS AFFAIRS
                    Veterans Benefits Administration
                         Washington, D.C. 20420

July 22, 2009

Director (00/21)
All VA Regional Offices and Centers
                                                                        
                                                In Reply Refer To: 211B
                                                                        
                                                Fast Letter 09-33

SUBJ: Special Monthly Compensation at the Statutory Housebound Rate

    This letter provides guidance for adjudicating claims involving 
entitlement to special monthly compensation (SMC) at the housebound 
rate based on a decision by the U.S. Court of Appeals for Veterans 
Claims (CAVC or Court) in Bradley v. Peake.
Background
    38 U.S.C. Sec. 1114(s) provides that SMC at the (s) rate will be 
granted if a veteran has a service-connected disability rated as total, 
and (1) has additional service-connected disability or disabilities 
independently ratable at 60 percent or more, or (2) is permanently 
housebound by reason of a service-connected disability or disabilities. 
VA's implementing regulation at 38 CFR Sec. 3.350(i) essentially 
mirrors the statutory language.
    Prior to the CAVC's decision in Bradley v. Peake, VA excluded a 
rating of total disability based on individual unemployability (TDIU) 
as a basis for a grant of SMC at the (s) rate. VA relied upon language 
in citing VAOPGCPREC 6-99, dated June 7, 1999, in which the General 
Counsel stated that a TDIU rating takes into account all of a veteran's 
service-connected disabilities and that considering a TDIU rating and a 
schedular rating in determining eligibility for SMC would conflict with 
the requirement for ``additional'' disability of 60 percent or more by 
counting the same disability twice.
    On November 26, 2008, the Court, in Bradley v. Peake, disagreed 
with VA's interpretation and held that the provisions of section 
1114(s) do not limit a ``service-connected disability rated as total'' 
to only a schedular 100 percent rating. The Court found the opinion too 
expansive because it was possible that there would be no duplicate 
counting of disabilities if a veteran was awarded TDIU based on a 
single disability and thereafter received disability ratings for other 
conditions.
    The Court's holding allows a TDIU rating to serve as the ``total'' 
service-connected disability, if the TDIU entitlement was solely 
predicated upon a single disability for the purpose of considering 
entitlement to SMC at the (s) rate.
    The Court held that the requirement for a single ``service-
connected disability rated as total'' cannot be satisfied by a 
combination of disabilities. Multiple service-connected disabilities 
that combine to 70 percent or more and establish entitlement to TDIU 
under 38 CFR Sec. 4.16(a) cannot be treated as a single ``service-
connected disability rated as total'' for purposes of entitlement to 
SMC at the (s) rate.
New Evidentiary Standard
    Based on the Court's decision in Bradley, entitlement to SMC at the 
(s) rate will now be granted for TDIU recipients if the TDIU evaluation 
was, or can be, predicated upon a single disability and (1) there 
exists additional disability or disabilities independently ratable at 
60 percent or more, or (2) the veteran is permanently housebound by 
reason of a service-connected disability or disabilities.
    For example, a veteran in receipt of TDIU based on a 70 percent 
evaluation for Post-traumatic stress disorder (PTSD) and other service-
connected disabilities consisting of a below-the-knee amputation, rated 
40 percent disabling; tinnitus, rated 10 percent disabling; and 
diabetes mellitus, rated 20 percent disabling, would be entitled to SMC 
at the (s) rate if it is determined that PTSD is the sole cause of the 
unemployability, as the other disabilities have a combined evaluation 
of 60 percent.
    It is important that, for purposes of section 1114(s)(1), no 
disability is considered twice to ensure that the prohibition against 
pyramiding contained in 38 CFR Sec. 4.14 is not violated when 
determining which disability results in TDIU entitlement and in 
determining which disability or disabilities satisfy the independent 60 
percent evaluation to award SMC at the (s) rate.
    However, for purposes of section 1114(s)(2), a disability may be 
considered in determining TDIU entitlement as well as in determining 
whether a veteran is permanently housebound as a result of service-
connected disability or disabilities because that provision does not 
specify ``additional service-connected disability or disabilities'' as 
in section 1114(s)(1).
    Accordingly, a determination for entitlement to SMC at the (s) rate 
must be made in all TDIU cases where potential entitlement to SMC (s) 
is reasonably raised by the evidence.
Current Status
    Regulations and M21-1MR, IV.ii.2.H.46.a will be revised to comply 
with the Court's decision. In the interim, the Court's holding will be 
applied to all pending and future claims.
    In applying the Court's holding, if the medical evidence is 
insufficient to render an adjudicative determination as to whether the 
veteran's TDIU entitlement solely originates from a single service-
connected disability, and there is potential entitlement to SMC at the 
(s) rate, the veteran should be scheduled for a VA examination to 
include an opinion as to the cause of unemployability.
Questions
    Questions concerning this fast letter and other issues related to 
this issue should be submitted to the VAVBAWAS/CO/21FL mailbox.

                                                   Bradley G. Mayes
                                                           Director
                                     Compensation & Pension Service