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




 
                           THE STATE OF THE 
                    VETERANS BENEFITS ADMINISTRATION

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

                                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

                             SECOND SESSION

                               __________

                             JUNE 15, 2010

                               __________

                           Serial No. 111-85

                               __________

       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

                               __________

                             June 15, 2010

                                                                   Page
The State of the Veterans Benefits Administration................     1

                           OPENING STATEMENTS

Chairman John J. Hall............................................     1
    Prepared statement of Chairman Hall..........................    39
Hon. Doug Lamborn, Ranking Republican Member.....................     3
    Prepared statement of Congressman Lamborn....................    40
Hon. Deborah L. Halvorson........................................     3

                               WITNESSES

Advisory Committee on Disability Compensation, Lieutenant General 
  Ronald R. Blanck, USA (Ret.), D.O., Member.....................     4
    Prepared statement of General Blanck.........................    40
U.S. Department of Veterans Affairs, Michael Walcoff, Acting 
  Under Secretary for Benefits, Veterans Benefits Administration.    26
    Prepared statement of Mr. Walcoff............................    66

                                 ______

American Federation of Government Employees, AFL-CIO, and AFGE 
  Veterans Affairs Council, Molly M. Ames, Rating Veterans 
  Service Representative, Veterans Benefits Administration 
  Regional Office, San Diego, CA.................................    18
    Prepared statement of Ms. Ames...............................    59
American Legion, Ian C. de Planque, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission..........................     9
    Prepared statement of Mr. de Planque.........................    50
Disabled American Veterans, Joseph A. Violante, National 
  Legislative Director...........................................     7
    Prepared statement of Mr. Violante...........................    46
Federal Bar Association, Carol Wild Scott, Chairman, Veterans Law 
  Section........................................................     5
    Prepared statement of Ms. Scott..............................    42
National Organization of Veterans' Advocates, Inc., Richard Paul 
  Cohen, Executive Director......................................    16
    Prepared statement of Mr. Cohen..............................    56
Veterans for Common Sense, Paul Sullivan, Executive Director.....    19
    Prepared statement of Mr. Sullivan...........................    62

                   MATERIAL SUBMITTED FOR THE RECORD

U.S. Department of Veterans Affairs report entitled, ``Electronic 
  Work Measurement Application Final Work Rate Standards,'' 
  Prepared for the Compensation and Pension Service, Veterans 
  Benefits Administration, by SRA International, Inc., dated July 
  15, 2004.......................................................    72


                           THE STATE OF THE 
                    VETERANS BENEFITS ADMINISTRATION

                              ----------                              


                         TUESDAY, JUNE 15, 2010

             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 2:05 p.m., in 
Room 340, Cannon House Office Building, Hon. John J. Hall 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Hall, Halvorson, Donnelly, 
Lamborn, and Bilbray.

               OPENING STATEMENT OF CHAIRMAN HALL

    Mr. Hall. Good afternoon. Would everybody, to begin our 
meeting, please rise for the Pledge of Allegiance.
    [Pledge of Allegiance.]
    Thank you. And welcome to the House Committee on Veterans' 
Affairs, the Subcommittee on Disability Assistance and Memorial 
Affairs.
    Our hearing today is on the state of the Veterans Benefits 
Administration (VBA). I welcome everybody and look forward to 
hearing from our panels. This hearing represents the seventh 
hearing that we have held this year, and the 15th for the 111th 
Congress, which we have conducted relating to problems plaguing 
the disability claims processing system. So oversight has been 
vigorous with significant activity on this front from 
stakeholders across the board.
    The system is still, however, in dire need of continuing 
reform. Today, there are over 546,000 compensation and pension 
(C&P) claims awaiting final processing, with a total inventory 
or backlog of over 1 million claims and appeals within the VBA 
pending a decision. VBA employs over 13,000 personnel in its 
compensation and pension operation, and this figure represents 
a staffing increase of 32 percent since Democrats became the 
majority party in 2007 in Congress.
    However, as we stated in the past, the problems plaguing 
VBA are not just workforce issues; they are leadership 
methodology, cultural and technology issues. That is why we 
passed the Veterans Benefits Modernization Act, H.R. 5892, 
which was included almost in its totality in Public Law 110-
389. As many of you in this room recall, with your help P.L. 
110-389 established a guided roadmap for VA to get us to where 
we are today--encouraged by the reform efforts that VA is 
making, but cautious to make sure that we are doing everything 
we can to help VA make those meaningful reformations of its 
claims processing system.
    There has been major progress since the passage of Public 
Law 110-389. For instance, very recently, today the VA adopted 
a shortened claims filing form as well as other easy forms like 
the fully developed claims forms for both compensation and 
pension claims. The inclusion of a checklist will increase 
compensation requests. You, the VA, have heeded the call of 
Congress as outlined in Public Law 110-389, and I applaud you, 
as I am sure other Members of this Subcommittee do, for your 
efforts to bring this to fruition.
    VA also has a number of claims processing related pilots 
underway, and I applaud your activity and proactivity in this 
area. I would like to caution, however, that we want to avoid 
action for the sake of action. We are committed to ensuring 
that the 30-plus ongoing pilots translate to real change for 
our veterans and for our survivors who are still languishing in 
the backlog.
    I think most stakeholders believe that a comprehensive 
overhaul is still in order, and I am encouraged that we seem to 
be on the right path to get there. We seem to have the right 
leader for this monumental task in Secretary Shinseki, who has 
both the vision and commitment, in my opinion, to get us to a 
more veteran-centered 21st Century system claims processing 
system.
    We all know about the myriad of problems plaguing the VBA's 
current system; the lack of adequate training; a 30- to 40-
percent error rate; a paper-based system; still an overemphasis 
on quality and underemphasis on quantity--or, I am sorry, an 
overemphasis on quantity over quality without putting enough 
emphasis on accountability, consistency, or accuracy.
    As I have said many times, and I know that many of you 
agree, as does Secretary Shinseki, we want a system that gets 
it right the first time, one that renders decisions in which 
our veterans and stakeholders can have 100 percent confidence.
    Currently we are not there, but as they say in the self-
help world, we are looking for progress, not perfection. None 
of us expect to get to perfection instantly, but we are, 
however, seeking progress. We are not here to blame anyone for 
where we are today. The claims backlog has been a decades-old 
problem that is coming to a head mostly because we are engaged 
currently in two wars, for which there was little planning for 
the veterans of those wars at the same time that our older 
veterans are aging and need more care.
    We want to focus on solutions. I expect to get a 
comprehensive update on where the VA is today, what it plans to 
do to meet its 2015 claims transformation target with its new 
Veterans Benefits Management and Veterans Relationship Manager 
Systems. We also want to know if and how these two systems 
interface with the Virtual Lifetime Electronic Records (VLER) 
Initiative announced by the President.
    Lastly, we look forward to hearing about the state of the 
VA's efforts to bring aboard a permanent Under Secretary for 
Benefits.
    I think we all have the same goal, which is to ensure that 
we have a world-class 21st Century claims processing system 
that helps our veterans, their families, and their survivors 
secure the benefits they deserve and that they have earned, 
without delay.
    With that, I look forward to the insightful testimony of 
our witnesses. I now will recognize Ranking Member Lamborn for 
his opening statement.
    [The prepared statement of Chairman Hall appears on p. 39.]

            OPENING STATEMENT OF CONGRESSMAN LAMBORN

    Mr. Lamborn. Thank you, Mr. Chairman. It has been about a 
year since we first convened as a Subcommittee to discuss VA's 
ongoing struggle to overcome the backlog of disability claims. 
Multiple hearings have been devoted to this topic and to the 
underlying need for VA to improve the timeliness and accuracy 
of its adjudication process.
    Now, anyone who has followed this Subcommittee's hearings 
over the past several years knows that I have long advocated 
for better use of information technology as a partial remedy to 
VA's problems. I am pleased that the virtual regional office 
(RO) concept I introduced in 2007 to modernize the claims 
process is being included in the Veterans Benefits Management 
System (VBMS). I hope that it and other integral parts of the 
VBMS will establish the framework needed to transform VA into a 
21st-Century benefits system.
    I look forward to hearing from our VA panel this afternoon 
for an update on the status of the pilot programs that are 
underway. And I would like to know how long will it be before 
they are implemented and how soon will they have a positive 
impact.
    While I understand that diligence is required when a 
foundation's pillars are being set, it is imperative that VA 
continues its progress with the utmost sense of urgency. 
Veterans are suffering as a result of the ever-increasing 
inventory of claims, and this is simply unacceptable. There was 
no hesitation on their part when it came to serving our Nation 
in a time of need, and they should not have to wait months and 
years to receive compensation for the injuries they incurred 
during service.
    Thank you, Mr. Chairman. And I yield back.
    [The prepared statement of Congressman Lamborn appears on 
p. 40.]
    Mr. Hall. Thank you Mr. Lamborn.
    I would remind all panelists that your complete written 
statements have been made a part of the hearing record. 
Please--oh, I am sorry, Mrs. Halvorson, would you like to make 
a statement?

         OPENING STATEMENT OF HON. DEBORAH L. HALVORSON

    Mrs. Halvorson. Sure. Thank you, Mr. Chairman.
    I would like to just thank and congratulate you on the 
intense meetings that we have had over the backlog. This is the 
number one complaint I get every time I go back home. I have a 
Veterans Advisory Committee that we get together, and once we 
get on the backlog issue we never get off of it. I think that 
it is true that this is a part of a bigger problem, and we need 
to continue to focus on it. We have to remember that it is not 
about activity, it is about results. We don't want to confuse 
the two. So just throwing more people after a broken system is 
not what we want to do. I am looking forward to continuing the 
effort. This is our mission and we have to see it through.
    Mr. Hall. Thank you, Mrs. Halvorson.
    Panelists, please remember that your written statements 
have been made a part of the hearing record so you can limit 
your remarks so that we may have sufficient time to follow up 
with questions.
    Will today's first panel please come and join us at the 
witness table. Dr. Ronald Blanck, a Member of the Advisory 
Committee on Disability Compensation at the U.S. Department of 
Veterans Affairs; Carol Wild Scott, Veterans Law Section (VLSL) 
of the Federal Bar Association; Joseph Violante, National 
Legislative Director of Disabled American Veterans (DAV); and 
Ian de Planque, Assistant Director, Veterans Affairs 
Rehabilitation Commission, the American Legion. Thank you all 
for joining us again, and welcome.
    Mr. Blanck, you are now recognized.

STATEMENTS OF LIEUTENANT GENERAL RONALD R. BLANCK, USA (RET.), 
 D.O., MEMBER, ADVISORY COMMITTEE ON DISABILITY COMPENSATION; 
 CAROL WILD SCOTT, CHAIRMAN, VETERANS LAW SECTION, FEDERAL BAR 
ASSOCIATION; JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, 
   DISABLED AMERICAN VETERANS; AND IAN C. DE PLANQUE, DEPUTY 
   DIRECTOR, VETERANS AFFAIRS AND REHABILITATION COMMISSION, 
                        AMERICAN LEGION

 STATEMENT OF LIEUTENANT GENERAL RONALD R. BLANCK, USA (RET.), 
                              D.O.

    Dr. Blanck. Thank you very much, Mr. Chairman. I would just 
like to summarize a few points from my witness statement.
    First of all, to note that I am here representing our 
Chairman, General Scott, who is farming in Texas and could not 
leave, and so he asked if I would represent him and the 
Committee. And it is a pleasure.
    You know what our Committee does. Our charter is in the 
statement. We have now met 19 times over a close to 2-year 
period, and forwarded an interim report with recommendations to 
the Secretary that addressed our efforts in July of 2009. We 
received a response from the Secretary in February of 2010, and 
if those copies aren't available, I do have them for you. The 
first you were provided; the second you may not have seen. And 
we are in the process of preparing a draft report for the 
Secretary and for Congress, as required, which will be 
available in October of this year, that will summarize the work 
that we have done, the recommendations we have, and the 
progress the VA has made.
    Our focus of course is in three areas. It is methodology 
for reviewing and updating the Veterans Administration Schedule 
for Rating Disabilities (VASRD); that is, the VA schedule for 
rating disabilities, because that is central to everything. And 
that if it is done properly, it will in and of itself reduce 
the backlog, reduce the appeals that add to the backlog and all 
of that.
    We are also looking at the transitioning of the 
servicemember from military to the VA.
    And finally, disability compensation for noneconomic loss, 
often referred to though not in any legislation that I have 
seen, as quality of life, which is now not very much a part of 
compensation.
    Where we are in the VASRD, of course, is that we have seen 
progress. The VA is taking this very, very seriously. And I 
have to acknowledge that standards for the diagnosis and 
evaluation of traumatic brain injury (TBI) have been 
established. There has been progress in reviewing the entire 
mental disability category, because the mental health 
disability seems to be the most problematic, given the 
difficulty of measuring it, and it matches least well with 
other disability of other body systems.
    Preliminary steps are also underway to review the 
musculoskeletal and the endocrine systems. Again, we are 
convinced that reviewing these body systems and updating the 
VASRD will pay great dividends.
    We have proposed a level of permanent staffing for both the 
VBA--the Veterans Benefit Administration--and the VHA--the 
Veterans Health Administration--to ensure that all 15 body 
systems are reviewed and updated as necessary in a timely way, 
a minimum of three per year so that all 15 would be reviewed in 
a 5-year period on a recurring basis.
    We have also proposed a priority among body systems that 
takes into account which are at greatest risk of inappropriate 
evaluations; problem prone, relative number of veterans and 
veterans' payments associated.
    The Secretary's response to all of our recommendations has 
been timely. The Secretary and his staff concur in general with 
most of our recommendations at least; however, he does not 
commit the--the agency has not committed to specific management 
procedures, staffing, or timeline for review and update. And in 
our full report in October, we will comment on this and see if 
we can work more closely and get some of the detail we feel is 
necessary. Now, the VA is working on these; we just don't have 
some of those details.
    We have also proposed a detailed procedure for review and 
updating the VASRD, which I have available. We believe that 
there will be two studies necessary as the rating, schedule for 
rating disabilities is reviewed. One is to validate the 
horizontal and vertical equity in the tables of disability, and 
the second is looking at the vocational rehabilitation program.
    We continue to review the quality-of-life issue using 
special monthly compensation (SMC) as a model. We are looking 
at transition issues, and I believe we are progressing on a 
broad front. The Committee has had excellent access to the 
Secretary, to the staff. We are very pleased with our working 
relationships with the VA and other organizations.
    That concludes my report, and I stand ready to take 
questions. Thank you very much.
    [The prepared statement of Dr. Blanck appears on p. 40.]
    Mr. Hall. Thank you, sir.
    And, Ms. Scott, you are now recognized.

                 STATEMENT OF CAROL WILD SCOTT

    Ms. Scott. Thank you. Good afternoon Chairman Hall, Ranking 
Member Lamborn and Members of the Subcommittee.
    I am pleased to provide this testimony on behalf of the 
Veterans Law Section of the Federal Bar Association. Indeed, 
the backlog is more symptomatic of a process out of control. 
For too many decades it has operated as if only the subordinate 
persons were in charge, each with an individual regional 
command operating day to day as the individual circumstances 
may dictate. This Secretary, more than any of his immediate 
predecessors, has the leadership skills to meet the challenge 
and at the same time gain the trust he must have from at least 
the two communities of the veterans and the VA itself.
    We continue to urge very serious consideration of the pod 
process of processing claims. Dividing the processors into 
discrete teams that incorporate all of the individual skills 
provides an opportunity for mentoring, on-the-job training, and 
provides also opportunity to develop specific areas.
    This is something that we would suggest they look at; that 
some teams within this process specialize in the things that 
seem to provide the greatest problems in training and 
continuing education--herbicide exposure, post-traumatic stress 
disorder (PTSD) and mental disabilities and neurological 
issues, TBIs. These are complex, involving many body systems, 
and people who are attuned and trained specifically in those 
areas would facilitate those claims.
    We also continue to encourage VBA to enhance the position 
of decision review officer as an immediate supervisory 
personnel over the claims processing teams within the pod 
structure, tested and certified, at least to pass the agent's 
exam; in this position would exercise quality review over the 
decisions for adequacy of development, as well as accuracy of 
decision making.
    We also recommend that this modality include a full-time 
training coordinator in each regional office monitoring on-site 
training needs and requirements, setting curricula consistent 
with those universal to the agency and ensuring that 
instruction and questions and answers are available to every 
employee.
    We also renew our encouragement of a treating physician 
rule. Regardless of whether treatment has been by VHA or 
private providers, nexus opinion and questions of the level of 
disability or the extent of impairment should be addressed to 
those providers. The traditional concept that a VHA physician 
is incompetent to provide a nexus opinion because the treating 
physician is inherently biased is inherently absurd.
    VLS continues to urge legislative amendment of 38 U.S.C. 
section 5904(c) to expand the availability of fee-based 
representation to veterans filing the initial claim with the 
VA. The regulations governing fee-based practice before the 
agency are the most restrictive of any Federal agency. 
Regardless of extensive self-regulation in State and Federal 
Court rules of ethic and conduct, the VA continues to regard 
attorneys with an unwarranted mistrust. The demographic has 
changed. Today's veteran has fought a highly technological war. 
This is the best-educated army in history. Men and women who 
have fought and survived significant horrors of today's 
battlefield deserve the dignity of determining for themselves 
whether they wish to represent themselves, be represented by an 
organizational veterans service organization (VSO), or retain 
professional counsel. This generation of veterans, like Vietnam 
veterans before them, has founded their own veterans 
organizations to address the issues inherent and the conflicts 
they experience. Just as the Vietnam veterans, they support 
fee-based representation before the agency, beginning at the 
point at which the claim is filed.
    The Veterans Law Section does not support other provisions 
of the Secretary's proposed legislation, including the 
imposition in sections 202 and 203 of jurisdictional time 
limits appeal within the agency. This is a somewhat cynical 
effort to eradicate the backlog by making it extremely 
difficult for a generation of veterans to perfect their claims 
and meet shortened filing deadlines, when over half of them are 
diagnosed with TBI, post-traumatic stress disorder (PTSD), or 
other mental disorders, all of which impair their ability to 
organize and respond to those deadlines.
    Neither do we support the proposal in section 206 that the 
board no longer be required to render decisions in which 
factual determinations are supported by adequate reasons and 
bases, but only that they be plausible. In conclusion, the 
Veterans Law Section thanks the Subcommittee for the 
opportunity and urges that it is the responsibility of all of 
us to ensure that the quality of life is met as humanly, as 
much as humanly possible.
    With now over 1 million pending claims, it matters not who 
represents whom or on whose shoulders the blame properly lies. 
The job must be done, and rather than ensure that each 
recommendation for revision or reform is nibbled into oblivion 
by the ducks of turf protection, it is time to recognize, as 
the cartoon strip character Pogo once did, we have met the 
enemy and he is us.
    Thank you for the opportunity to present these views on 
behalf of the Veterans Law Section of the Federal Bar 
Association. I will be happy to respond to any questions.
    [The prepared statement of Ms. Scott appears on p. 42.]
    Mr. Hall. Thank you, Ms. Scott. You have given us the quote 
of the day so far, ``the ducks of turf protection.''
    Mr. Violante.

                STATEMENT OF JOSEPH A. VIOLANTE

    Mr. Violante. Mr. Chairman, Members of the Subcommittee, 
thank you for holding today's important hearing on the state of 
the Veterans Benefits Administration. DAV has comprehensive 
recommendations on all their programs in our annual legislative 
agenda as well as in The Independent Budget, and we recommend 
those publications to the Subcommittee.
    Mr. Chairman, as you know, thousands of disabled veterans 
today face unacceptable delays and unjustified denials of their 
applications for VA benefits. As of June 5th, there were about 
550,000 pending claims for compensation and pension awaiting 
rating decisions. Almost 200,000 of these claims were waiting 
over 125 days. Worst, by VBA's own measurement, the accuracy of 
disability compensation rating decisions for the past year was 
just 83 percent, continuing a downward trend.
    However, despite these problems there are some reasons to 
be optimistic about VBA's prospects for improvement. Recently 
both VA and VBA leadership have acknowledged longstanding 
problems and looked for new solutions. VBA has over three-dozen 
new initiatives underway that may help transform the archaic 
paper-based claims processing system to a modern information 
technology (IT) centrist process. We believe VBA is headed down 
the right path; however, they will not succeed without 
effective leadership internally and strong oversight 
externally.
    Mr. Chairman, VBA must remain focused on getting claims 
decided right the first time, not just on reducing the backlog. 
After all, the backlog is not the problem, nor is it the cause 
of the problem, it is a symptom. Lowering the backlog does not 
guarantee that veterans will get all the benefits they have 
earned in a timely manner.
    To be successful, VBA must engage in a true partnership 
with VSOs. Last year, DAV alone helped a quarter of a million 
veterans and their families free of charge in their claims for 
VA benefits.
    DAV and other VSOs are not just interested observers in 
this process, we are active and essential components of the 
system itself. VBA must solicit and incorporate our input at 
the beginning of their transformation efforts, not just update 
us during implementation.
    VBA has launched dozens of new pilot programs at regional 
offices, almost entirely without input from VSOs, either 
nationally or locally. We believe this is a mistake for a 
number of reasons. Not only do VSOs bring vast experience and 
expertise about claims processing, but we hold power of 
attorney for hundreds of thousands of veterans and their 
families. When we help veterans prepare and submit claims, VBA 
spends less time and resources developing and adjudicating 
them. We urge VBA to integrate us into their planning for new 
initiatives from the beginning.
    Mr. Chairman, as VBA pilot programs have been rolled out, 
we have found some areas of concern in their implementation. 
For example, VBA recently rolled out the Fully Developed Claim, 
FDC, Program. And while we support this program, it requires 
changes to fully protect veterans rights. Unlike the normal 
claim process, under the FDC Program a veteran cannot file an 
informal claim. As a result, veterans have to choose between a 
quicker decision under FDC or an earlier effective date under 
the regular process. We have discussed this issue with VBA, and 
Congressman Joe Donnelley is prepared to introduce the 
legislation. We urge this Subcommittee to work with him to fix 
the problem.
    Most important to VBA's reform and modernization is the 
ongoing development of a new IT system, particularly the 
Veterans Benefits Management System, or VBMS. The final VBMS 
must have comprehensive and realtime quality control and must 
utilize intelligence of modern IT systems, which must include 
rule-based decision support. We are concerned that in a rush to 
meet self-imposed deadlines for rolling out VBMS, programmers 
may be under pressure to cut corners. We urge this Subcommittee 
to continue its aggressive oversight of VBA's IT projects.
    Mr. Chairman, in assessing the state of VBA, we do want to 
recognize the important steps that have been taken by VA, 
however, we firmly believe that VBA cannot be completely 
successful unless they truly seek a mutually beneficial 
partnership with the VSOs.
    Mr. Chairman, I want to commend you and this Subcommittee 
for all that you have done to help reform VBA in the claims 
processing system. I would be pleased to answer any questions. 
Thank you.
    [The prepared statement of Mr. Violante appears on p. 46.]
    Mrs. Halvorson [presiding.] Mr. de Planque, you are next. 
You are recognized for 5 minutes.

                 STATEMENT OF IAN C. DE PLANQUE

    Mr. de Planque. Thank you. Good afternoon, Members of the 
Subcommittee. On behalf of the American Legion I would like to 
thank you for the opportunity to provide testimony today.
    The VA is obviously in a very difficult position, but they 
have come forward and spoken of their problems. And the first 
step towards the solution is to admit that you have a problem. 
The recent aggressive stance taken by Secretary Shinseki of 
breaking the back of the backlog in this year and reducing the 
claims to a 98 percent claims rate and no claim over 125 days 
is admirable and aggressive and will be incredibly difficult to 
implement. It is an encouraging sign, but we cannot fully 
credit that sign as a movement forward without seeing the 
results as they come forward.
    One of the key components that has been a problem for VA is 
assessing the quality figure. The 98 percent is an admirable 
target; however, as was recently noted, 83 percent was the rate 
that VA is assessing themselves for last year, which is down 4 
percent from the previous year, 87 percent. The Office of the 
Inspector General (OIG) even stated that that was 10 percent 
higher than their internal figures. And when the American 
Legion had done claims visits and quality review visits to 
regional offices, we found that the number is actually closer 
to 60 to 70 percent accuracy rate.
    Why is this important? Because when you are processing 1 
million claims, 1 percent of error is 10,000 veterans. It is 
completely unacceptable. And VA must take steps to ensure that 
the quality is the driving force towards driving down their 
backlog. Approximately 50 percent of the cases that go before 
the Board of Veterans' Appeals (BVA) are remanded back, sent 
back into the system because they weren't done right the first 
time. This is a recursive loop that only keeps these claims in 
the system and will not reduce the backlog. Getting the claim 
done right the first time removes it from the backlog.
    VA has instituted a number of pilots which are very 
promising and are very helpful; however, without proper 
involvement from the ground floor with the service 
organizations, we have questions about the success of those 
pilots. Some of them, they have been very generous with the 
access, and we have been out to see their pilots in Little Rock 
and Providence and Pittsburgh recently, and have seen some very 
good signs.
    In Baltimore, where they were piloting a very important 
virtual regional office, despite mentioning in the Roundtable 
of this committee the importance of that program, they still 
were not able to get the VSOs or Congress involved in seeing 
these programs. We need to be involved while they are 
happening.
    With the recent programs in Pittsburgh, they are 
experimenting with things that have long been mentioned by the 
service committees creating templates for private physicians to 
alleviate some of the load on VA physicians and help get those 
exams done faster, providing public contact with the veterans 
to call and follow up to the notoriously confusing Veterans 
Claims Assistance Act (VCAA) letters.
    These are great steps forward and the initial indications 
are that the interaction with the veterans are leading to a 
better understanding of the claims process. The veteran service 
organizations have stepped forward and asked to be involved and 
asked to help with the contact with the veterans and facilitate 
this communication. And VA is slow to include us in the 
process.
    We are very heartened by the steps they are taking and that 
they are reaching out. We are having more meetings with VA to 
discuss the situation, to discuss the problems from an earlier 
stage in the development. But without full inclusion, the end 
users of the system, both VA and the VSOs and the veterans who 
use the system, won't have the full share of development in 
that system, and it will lead to a faulty system.
    It is difficult to give the VA a grade on the state of the 
VA at this point, other than incomplete at this time, because 
there are so many pilots that are in a state of flux that are 
going forward.
    The VBMS system shows tremendous promise. It is the first 
time that we are beginning to see where these pilots are 
leading into, and that it will be a truly integrated IT system 
that will actually capitalize on those electronic developments 
and use it to move the claims process forward to be more 
accurate, to be more timely, and to be more helpful. However, 
until we have seen these things implemented, it is difficult to 
see what the end result would be.
    We are optimistic, and we commend the Secretary and the 
Administration for the hard work that they are doing and for 
the open hands that they are putting out to the service 
organizations, but we are also mindful and cognizant of the 
fact that we have heard promises from VA in the past and they 
have not always followed through. And the promise to the 
American veterans is what is important.
    We thank you for the opportunity to comment, and we will be 
happy to answer any questions.
    [The prepared statement of Mr. de Planque appears on p. 
50.]
    Mrs. Halvorson. Thank you, Mr. de Planque.
    Before we ask questions I have a few of my own. So you are 
encouraged by the fact that you have heard that the VA wants to 
listen, they are including some new practices, and that they 
are going to reach out to work with you. Because you say that 
you want to get this done right the first time, which I think 
we all agree with, what do you do when the doctor doesn't 
provide what they need to, because we agree, we want this done 
right the first time, but we are worried that the doctor 
doesn't reply in a timely manner and they only have so many 
days to do it. We are trying to figure out how to get the 
doctor to reply more promptly. What would you suggest?
    Mr. de Planque. Are you speaking of putting some kind of 
restriction or pressures on the private doctors? Because the 
plus side of the templates that they are working on developing 
for private physicians is that they are very explicit about the 
information that is needed. VA examinations, compensation 
pension examinations, are different than what a normal 
practicing physician might do to treat a veteran, and 
therefore, they sometimes require different information.
    And so from a template standpoint, it is specifically 
asking for the information, so you are not going to have an 
inadequate exam returned that they don't have the information 
they need. As far as the timeliness factor of how you can 
pressure private physicians to respond to them on time, if it 
is a private physician, that would be an issue between the 
veteran and their physician.
    Mrs. Halvorson. Thank you. Mr. Lamborn, do you have any 
questions?
    Mr. Lamborn. Thank you, Madam Chairman.
    Just briefly. Dr. Blanck, can you tell us a little bit more 
about the Advisory Committee's work on the quality of life, and 
when can we expect the full extent of the findings to be made 
public?
    Mr. Blanck. We will have a report on that issue in our 
October full report. We are still in the throes of a lot of 
discussion. We are using the special compensation program as 
kind of a model, which takes the most severely injured 
servicemember, and even if because of whatever disability they 
have or whatever wound or injury they have, it only reaches a 
certain level of disability, they get additional compensation 
because of what that injury is. Bilateral amputations, for 
example, is one of the things. We think there is a place for 
this, but we think it will be relatively limited to those very 
severely injured. But anyway, that will be covered in our 
October report.
    Mr. Lamborn. Thank you. I yield back.
    Mrs. Halvorson. Thank you. Mr. Bilbray?
    Mr. Bilbray. Thank you, Madam Chair. I apologize for 
missing the first part of your testimony. I just had a death in 
the family, I am the executor of the will, and you know how 
that is. I think the oldest in the family should always do it.
    One of the things that I see inherent to our challenges 
here is the response time. And in the private sector one of the 
things that they have been able to do in 20 years is to really 
use technology. And I know we keep bringing this up as if it is 
the silver bullet, but if I can remind you of the success that 
we see almost in every community--some people may not like it--
of Sam Walton figuring out how to use data processing, bar 
coding, using smart technology to not only get a job done, but 
do it very cost effectively and build an empire--he built an 
empire basically off of knowing what inventory he had or didn't 
have, and knew where it was and how to manage it.
    I see that in a lot of ways as being essential if we are 
actually going to keep our promise to our veterans. Where are 
they, who are they, what do they need? And if you see the 
parallel, if Sam Walton could tell us where, you know, a 
commodity--and I won't even say the commodity because somebody 
will say I am comparing this to a veteran--but could tell you 
where the toothbrush was anywhere in his empire, doggone it, we 
should be able to tell the veteran where they are in the 
process and we should know where they are in the process.
    And so I think that in all fairness, we haven't been 
aggressive enough at looking at what do we need as tools to do 
the job that we are promising the veterans we will do down the 
line. And I think there is a lot of this base technology that 
is not being done. And I have seen it again and again. And I 
will just say we have been working a decade, trying to work out 
medical records, electronic medical records, and it seems like 
people look at this in isolation. But the fact is that 
technology, just as much as Sam Walton could know that you 
bought a toothbrush in Cleveland, he knows that he has to get a 
new replacement toothbrush shipped at the moment the purchase 
was made. As soon as somebody swiped that bar code, that 
information was out there and everybody knew it.
    The challenge that we have, Mr. Chairman, can we be as 
responsive to our veterans as Sam Walton was to his clientele? 
And that is--I would just ask you right there, that 
technology--let me just add into it. The bar code I see for our 
veterans is not just a number or a name; it may be biometrics, 
it may be that technology of going that far. But let me just 
open that up, just throw that one in the middle of the court, 
and in the spirit of the World Cup you can kick that ball 
around.
    Mr. Blanck. Well, I will take a shot at it first, if I may. 
I have been heavily involved in health IT. I was the Army 
Surgeon General, retired in 2000, and of course worked on those 
issues then, did it at a university, and now in this committee. 
And kudos to the VA for the work they have done, particularly 
in VHA, on their electronic medical record. I think it stands 
as a model in the integration that is going on with that of the 
military, gets at what you are trying to say. But the whole 
organization needs to have that automation put in place.
    My little piece is on the Advisory Board for Disability 
Compensation, so we are looking at the rating schedule for 
disabilities. And I spoke of the need to revise, update, and 
all of that. And the whole point of all of that is not to keep 
up with everything, it is also to standardize. How do you 
standardize so that the private mission, the VA physician, the 
military physician, all use the same automated form for the 
disability evaluation? And that has been a specific 
recommendation of ours that I know the VA is taking seriously, 
the VBA specifically, and it needs to be linked in then with 
that military and VHA health record; all of this centered 
around not records, but around the veteran. And the bar coding, 
and whatever measures you use there, is part of what will allow 
all of that to happen in a very standardized and efficient way 
as information is transported, as opposed to the old medical 
records you carry around in a wagon because they are so 
voluminous.
    Mr. Bilbray. To give you an example, let's say we talked 
about this. You can imagine the fact that although when someone 
files a claim or thinks they qualify, we should be able to have 
the capability, just as much as Sam Walton, to be able to go 
back and say on this date he received this and this, bam, bam, 
bam, we know exactly who it is. We are not asking the veteran 
to go back and find his file, have somebody dig it up. It 
should be able to be retrieved and should be able to be 
reviewed very quickly.
    I have seen the extraordinary difference that the Internal 
Revenue Service (IRS) has done by going to electronic filing, 
the effectiveness, the efficiency, the cost effectiveness, and 
how much more user-friendly it was than shoveling papers 
around. I yield back, Mr. Chairman.
    Mr. Hall [presiding.] Thank you, Mr. Bilbray. Mrs. 
Halvorson?
    Mrs. Halvorson. No.
    Mr. Hall. Dr. Blanck, you mentioned in your remarks that 
the Secretary agreed with the Commission's recommendations, and 
in some areas differed. Can you remember, account for us, some 
of the various differences?
    Mr. Blanck. Well, some of the areas in which, it wasn't so 
much that he differed but had to have legal review, had to look 
at the practicality of the recommendations. I do have a copy of 
his response with me, which I would be pleased to share with 
you.
    [The information was supplied to Mr. Hall and will be 
retained in the Committee files.]
    Mr. Hall. Thank you. The Advisory Committee researched that 
a new rating schedule should address the inconsistencies in 
mental versus physical disabilities, and also differences in 
age in onset of the disabilities. How would this change assist 
the VA in assessing and processing TBI, military sexual trauma 
(MST), PTSD and other complex injury claims?
    Mr. Blanck. Well, the problem with the VA we all have is in 
both being able to adequately and accurately assess and measure 
the TBI or psychological disorder to begin with, and then to 
assess its effect, because it changes day to day on earnings 
over a lifetime in which the disability might be based. The VA 
is coming up with some very innovative ways of trying to do 
that, using biomarkers, for example, magnetic resonance 
imaging, or computed tomography scans of the brain, volume 
studies of the brain, that kind of thing, to try to measure 
that.
    A lot of these things still have to be validated, but that 
is part of the process of putting this into place. I was able 
to attend a conference sponsored by the VBA on mental health, 
that whole area, but specifically looking at psychological 
injuries--PTSD, for example, post-traumatic stress disorder, 
and traumatic brain injury--where a lot of these injuries were 
discussed. I think progress was made, and the VA, I believe, 
has been very, very aggressive in trying to measure as best 
they can and come up with ways to accurately and reproducibly 
assess a veteran and come up with the disabilities.
    Mr. Hall. Thank you, Doctor.
    Ms. Scott, some stakeholders have suggested that veterans 
benefits administration claims processors have been over-
relying on the appeals process as ways of catching and cleaning 
up their errors. What are your thoughts on this? Do you think 
that happens? Is that an accurate assessment?
    Ms. Scott. I think that when it happens, at least according 
to most of the audits and the studies that have come out in the 
last couple of years, that to a great extent part of it is the 
way they measure the work product, work credits. And another is 
that they would rather pass along a difficult issue and let 
somebody else up the line worry about it.
    And I also think that a great deal has to do with training. 
There doesn't seem to be, from the reports on training, that 
there is any kind of standardization. The academy should be the 
focal point of the training for the entire agency. It should be 
the one thing with a director of training agencywide so that 
you have centralized--again, we emphasize vertical 
accountability for the training from the bottom up. That is why 
we recommended that you put--that they put training directors 
or coordinators in every regional office. That would provide a 
mechanism for ensuring that we don't have repeats of one office 
having one level of training and within that office the one-
size-fits-all, so that some people are bored silly and the 
other ones simply aren't getting what they need.
    Mr. Hall. I realize the treatment with the idea of a full-
time trainer in each RO and regularly scheduled instruction and 
question-and-answer opportunities for all the employees at that 
RO--I mean, especially as new rules come down, as they did 
today, or new paper applications come out, as they did today.
    Ms. Scott. Well, part of that is the medical issues with 
which we are now involved are so complex and they affect the 
quality of life to such an extent that evaluating these issues 
needs to have the kind of training that is basically what a 
paramedic gets. They need to know what those body systems are, 
how they work, and why they work the way they do. Because we 
are not just dealing with muscles and bones, we are dealing 
with complex issues; and having those training coordinators 
there that are themselves properly trained so that the error is 
not instructed and becomes cocooned in the agency is vitally 
important, which is why we said that.
    Mr. Bilbray. It sounds like another project for our medics.
    Mr. Hall. That is good. We don't have enough of them to 
worry about.
    Mr. Violante, if I may ask you, the American Legion and 
some other stakeholders suggest transferring the job of quality 
control assurance from within the VBA to an independent third 
party. It has been suggested such a move would ensure 
partiality and follow-up to ensure compliance. What is VBA's 
position on this proposal?
    Mr. Violante. Well, we certainly believe in quality 
control, and we don't believe there is any. Whether it is 
internal or external, we don't have a position but it needs to 
be there at each step of the process.
    In answer to your other question to Ms. Scott, I mean there 
is no incentive to do these cases right the first time. There 
is no accountability. And the incentive is to continue to put 
these cases out, whether they are right or wrong. And so the 
importance of quality review is essential to getting this done 
right the first time. And again, whether it is internal or 
external, we would just like to see some type of quality review 
at every step of the phase.
    Mr. Hall. Thank you.
    And Mr. de Planque, your testimony mentioned the 
Secretary's goal of transforming the VBA by 2015 to the point 
where the claims backlog can essentially be eliminated, and 
claims can be processed within 125 days at a 98 percent 
accuracy rate.
    Do you think these are realistic goals, and what resources 
would be needed to help the Secretary achieve those goals if 
they can be had?
    Mr. de Planque. In terms of whether or not they are 
realistic goals, that is a very, very difficult question. Is it 
achievable? America put a man on the Moon in a decade. If we 
are going to devote the resources and set something out as a 
mission, there is nothing that we can't accomplish.
    Now, whether or not those goals are possible, that is going 
to take--it is going to take a paradigm shift within VA. It is 
going to take a complete culture shift.
    To mention the idea of passing along the errors, we talked 
to people in the regional offices, and we do education for our 
service officers on recent court decisions and how those affect 
VA adjudication of cases. And our service officers very often 
will take these court cases to the VA and say, But in this 
court case they found that this applies, and so you can apply 
it there. And they are told by VA employees in regional 
offices, ``We don't deal with court cases, that is what the 
Board deals with.''
    Well, no, that is not what it deals with, it gets dealt 
with at the ground level. Now, VA's central offices put out the 
message that that is something that they want to change, but 
until that changes on the ground level they are not going to be 
able to achieve that level. And what they need to do is they 
need to transform the mind-set. And that is a top-down 
leadership and that is leadership all the way through. And 
whether or not they are saying that is the case, it needs to 
get through to the employees.
    This was mentioned by people in the employees' union, 
regardless of what they are saying, what is the perception 
among the employees? What do they believe is where the pressure 
from their job is coming from? As long as the employees believe 
that moving the cases is the most important thing to them, then 
they are not going to work towards the accuracy. When the 
employees believe that the accuracy is equally important, then 
they will be working on that and they can achieve a goal where 
they are at 98 percent accuracy and where they are getting the 
cases done on time. But that takes a culture shift and that 
takes deep-rooted traditions to be shifted.
    Mr. Bilbray. Mr. Chairman.
    Mr. Hall. Mr. Bilbray.
    Mr. Bilbray. There was a statement just made, and I think 
we really need to jump on this, is the perception by any 
Federal employee; but the perception that the court's rulings 
don't determine how we operate, is that the way? We are 
basically saying we are not--that isn't going to determine our 
procedure. If the courts rule this way, we don't----
    Mr. de Planque. Well, and that is, to be clear, that is the 
kind of reaction that you can get from an employee. It is not 
what VA is directing from their central office. They are not 
telling people the courts don't matter, but that is the reality 
of a day-to-day interaction in many cases.
    Mr. Bilbray. I think our attitude ought to be if the 
President and the Congress have to live by these court rulings, 
doggone it, all of us in government, even the Executive Branch, 
have to recognize this is part of the separation of powers. And 
it just concerns me if that is an attitude of our Federal 
employees, of any Federal employee, that what the courts rule 
doesn't--you know, I am not going to recognize or I am not 
going to let it affect my operations. I think maybe there is a 
measure of concern here we have that people think they are 
above the law, because that is what the courts are; they are 
defining what the law is, and I think it is a serious concern.
    Mr. Hall. Thank you, Mr. Bilbray. You are absolutely 
correct. And Mr. de Planque, thank you for bringing it up and 
voicing that observation, because we will make a note to ask 
the undersecretary about it when we get to our third panel.
    We just had a series of three votes called and, I am sorry, 
we always seem to get interrupted like this. But I want to 
thank the members of this panel for their testimony, and if we 
have any further questions we will send them to you in writing.
    And I will now excuse you for the rest of the day, ask for 
patience on the part of Panels 2 and 3. We will be back as 
quickly as we can from this series of votes, and the 
Subcommittee stands in recess.
    [Recess.]
    Mr. Hall. The Subcommittee will return to order.
    I would now ask our second panel of speakers to join us at 
the witness table, including Richard Paul Cohen, Executive 
Director of the National Organization for Veterans' Advocates 
(NOVA); Molly M. Ames, Rating Veterans Service Representative 
(RVSR), San Diego, California, Office 377, on behalf of the 
American Federation of Government Employees (AFGE); and Paul 
Sullivan, Executive Director for Veterans for Common Sense 
(VCS).
    Welcome.
    Mr. Sullivan will be with us shortly.
    Mr. Cohen, you are recognized. And, of course, your full 
statement has been entered into the record, so feel free to 
give a 5-minute summary.

STATEMENTS OF RICHARD PAUL COHEN, EXECUTIVE DIRECTOR, NATIONAL 
   ORGANIZATION OF VETERANS' ADVOCATES, INC.; MOLLY M. AMES, 
   RATING VETERANS SERVICE REPRESENTATIVE, VETERANS BENEFITS 
  ADMINISTRATION REGIONAL OFFICE, SAN DIEGO, CA, ON BEHALF OF 
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, AND AFGE 
    VETERANS AFFAIRS COUNCIL; AND PAUL SULLIVAN, EXECUTIVE 
              DIRECTOR, VETERANS FOR COMMON SENSE

                STATEMENT OF RICHARD PAUL COHEN

    Mr. Cohen. Thank you, Chairman Hall, and thank you to the 
Subcommittee for the opportunity for the National Organization 
of Veterans' Advocates to participate in this hearing.
    We have testified previously, on many occasions, about all 
the problems that the Veterans Benefits Administration has in 
adjudicating claims, all of which have been previously stated 
by this Committee and by the participants here.
    The biggest problem, however, has always been the culture 
of the VA and the perception among veterans and among those who 
work in the VA that the primary responsibility of the VA is to 
rout out fraudulent claims, move claims along, and generally to 
not be veteran-friendly, even though the Secretary of the VA, 
Secretary Shinseki, has for almost 6 months been going around 
the country talking about not only pilot projects but his 
vision for changing the culture of the VA.
    And we were very optimistic after hearing about the pilot 
projects and about the attempt to change the culture. But, very 
recently, we became aware of a memo and proposed legislation 
sent out by the Secretary on May 26, 2010. I hold it in my hand 
here.
    When you read through this proposal, and if you are someone 
who works in the veterans adjudication system, it is very 
apparent that the VA has now concluded that it cannot 
effectively decide the vast number of appeals that are out 
there. So the VA has decided to take itself out of the 
appellate system.
    And the way VA proposes to do this at the front end, it is 
to cut in half--or it wishes to have legislation to cut in half 
the time for a veteran to appeal--cut it from a year to 6 
months, even though the VA knows we are dealing with veterans 
now who have traumatic brain injury and PTSD who can't comply 
with time limits. They want to cut that time limit.
    They want to, for the first time, make the time to appeal 
to the Board of Veterans' Appeals jurisdictional. It has never 
been jurisdictional. It has always been subject to equitable 
tolling where a veteran misses the time limit. The VA says, 
this is not a problem because claims are simple. They say this 
in the request for legislation. Yet, when the VA complains 
about its inability to get it right the first time, the VA says 
claims are so complex.
    At the same time that the VA says that appeals are so 
simple that it will not hurt veterans to cut the appeal time 
and make the time to file jurisdictional, what they are 
attempting to do in this legislation is to make the appeal 
process more restrictive. They want to require a specific type 
of appeal to the VBA, a certain type of form, and, when it is 
not complied with, they want the appeal to be dismissed.
    At the back end of the appeals, the VA has realized that it 
is having trouble making good decisions. We know this because, 
of the decisions that the court makes, 70 percent of the merits 
decisions conclude that the BVA's decision was not 
substantially justified, which results in a court award of 
Equal Access to Justice Act (EAJA) fees at 70 percent of the 
merits decisions conclude that the BVA's decision was not 
substantially justified, which results in a court award of EAJA 
fees.
    The VA says, ``That has cost us $13 million. We need to do 
something about that.'' What the VA proposes is to change the 
rules for EAJA fees only with respect to veterans second-class 
citizens when compared with other groups of people who can get 
EAJA fees under title 38. The VA wants to make veterans 
different and say that a veteran can only get EAJA fees if he 
wins in the court.
    The other trouble is that the VA has been making decisions, 
which are supported by adequate reasons and bases so the VA 
wants eliminated the requirement of giving adequate reasons and 
bases to be. Then it would be sufficient if a decision has 
adequate justifications.
    The bottom line here is that we need Congress to hold the 
VA's feet to the fire and require them to be engaged in the 
administration of claims, and in the appeals process. This type 
of legislation, which is proposed by the VA, sends the wrong 
message to veterans and to those people who represent them. It 
is just wrong for the VA to abdicate and to essentially say 
that the VA is no longer going to be involved in doing appeals.
    And that is why NOVA does not feel optimistic about the 
pilot projects that are recommended by the VA. Because, unless 
the culture changes, unless the VA truly says they want to 
partner with veterans and their representatives and do it right 
the first time, then this whole thing is just an exercise in 
talking and will not accomplish anything.
    This type of legislation shows the true intent of the VA--
namely, to cook the books and make it look like they are doing 
the right thing, instead of doing the right thing for veterans.
    Thank you. I am willing to answer any questions you have.
    [The prepared statement of Mr. Cohen appears on p. 56.]
    Mr. Hall. Thank you, Mr. Cohen.
    Ms. Ames, you are now recognized.

                   STATEMENT OF MOLLY M. AMES

    Ms. Ames. Chairman Hall, Members of the Subcommittee, thank 
you for the opportunity to testify today on behalf of the 
American Federation of Government Employees and our VA Council. 
I started in the San Diego Regional Office 13 years ago as a 
claims assistant, worked up to the Veterans Service 
Representative (VSR) position, and, since 2008, I have worked 
as a Rating Specialist on the appeals team.
    I am a disabled American veteran. I served 11 years in the 
Navy. And I take to heart what we are told every day in VBA: 
that it is not a claim, it is a veteran. Therefore, it is very 
frustrating for me to watch VBA go from one quick fix to 
another without listening to the employees who are processing 
the claims.
    I strongly believe that once all the new hires get another 
2 years of training and experience, that we will see a 
significant reduction in the backlog. I have a number of 
suggestions to ensure that VBA makes the most of its expanded 
workforce to improve both productivity and accuracy.
    First and foremost, we have to fix our production 
standards. Our members are panicking over the new VSR 
standards. It is like trying to match apples with oranges. 
Under the new VSR standards, VSRs have to make their points 
even though they get no credit for any follow-up work. At the 
same time, the VSRs have to meet new timeliness standards, and 
they also have to run the workload management reports to show 
which cases are due for action, a very time-consuming task that 
management used to perform.
    To give you some perspective, one of the VSRs on my team 
now has to track 250 to 300 cases at one time for timeliness. 
If she misses three cases in a month, she will fail her 
standard and get put on a performance improvement plan, risking 
demotion or termination down the road.
    I am worried about the new RVSR performance standards that 
are in development. I already have to complete many tasks 
without credit. For example, I get no credit for writing 
medical opinions or for reviewing files that are not ready to 
rate, that have to be returned to the VSR. Right now, I use 
every minute of my work day to meet my 3.5 standard. I simply 
won't be able to manage if the new RVSR standards take away 
credit for even more of the functions I perform on a daily 
basis.
    Speaking of unrealistic standards, it is arbitrary and 
unfair to require employees working from home to produce more 
work than their colleagues based at the RO. In our office, only 
RVSRs are allowed to work from home, but at a very heavy cost. 
They have to complete 4.5 points a day, as compared to 3.5 in-
house. This makes no sense. I thought the Federal Government 
was promoting, not discouraging, flexiplace. I can tell you 
personally that I have always exceeded my current production 
standards, yet there is no way I would work from home under 
these higher standards.
    Isn't flexiplace the perfect solution to the space shortage 
at many ROs? Every seat in the San Diego Regional Office right 
now is full. We don't have space for employee training or 
testing of veterans for vocational rehabilitation. With all the 
new hires, veterans coming to our RO can't even find parking 
spaces. I hope the VA will reconsider its position on the RO 
flexiplace standards, just like they did for the Board of 
Veterans' Appeals 2 years ago.
    I am also very concerned about the training being given to 
new employees. When I became a VSR, it was standard practice to 
rotate employees to all different teams. Now, new employees at 
many ROs are rarely rotated. None of the temporary hires went 
to centralized training, and most of them were assigned to the 
education project for a year. Once they return to Compensation 
and Pension as permanent employees, they will need additional 
training to be able to adjudicate disability claims.
    Many of the coaches that run the teams also lack experience 
and subject-matter expertise. As a result, the work of new 
employees on many of these teams is being supervised by coaches 
with less than 3 years of experience.
    I would like to close by talking about the pilot projects 
and innovative initiatives. I have real concerns about the 3-
I's pilot in my office. Cases with three or fewer issues are 
being diverted to a special team to be rated, which means that 
the rest of the RVSRs have to maintain the same production as 
before, with more intense mixes of cases, all of which have at 
least four issues.
    I think the SMC calculator innovative initiative was very 
positive. It has really helped rating specialists to calculate 
special multi-compensation cases, which are very difficult.
    And although I don't have direct experience with the pod 
pilot, I believe it will help. On the appeals team that I work 
on, we have always worked as a pod, where claims assistants, 
VSRs, RVSRs, and ROs work closely together on a daily basis and 
quickly communicate the needs of the claim to each other.
    Thank you. I would be happy to answer any questions you 
have.
    [The prepared statement of Ms. Ames appears on p. 59.]
    Mr. Hall. Thank you.
    Mr. Sullivan.

                   STATEMENT OF PAUL SULLIVAN

    Mr. Sullivan. Thank you, Chairman Hall, Ranking Member 
Lamborn, and Members of the Subcommittee, for inviting Veterans 
for Common Sense to present our comments about the state of the 
Veterans Benefits Administration.
    With me today is Thomas Bandzul, our Associate Counsel. And 
also with me is my daughter Erin from high school, learning 
about how government works.
    Overall, Veterans for Common Sense describes the current 
status of VBA as ``mired in crisis.'' However, there are rays 
of hope on the horizon. I would like to add that we concur with 
the comments from NOVA. And I am disappointed to learn about 
some of the things that AFGE is raising, and I hope they will 
be followed up on.
    VBA's two major crises are worsening. The first crisis is 
the unacceptably high rate of claims processing decision 
errors, about 25 percent. We presented this chart to the 
Subcommittee staff, Mr. Chairman, and it is our review of eight 
recent VA Inspector General reports. And summarized, it came 
out to a 28 percent error rate. We were concerned that, in some 
offices, there were high error rates on some subjects and low 
error rates in others, and in a different office it would be 
reversed.
    The second crisis is the unreasonably long delays in 
processing new claims, now about 5 months. The two current wars 
have made the situation even worse.
    In August 2003, the Wall Street Journal reported on this, 
and they warned about the plight of Iraq and Afghanistan war 
veterans by highlighting veteran Jason Stiffler. According to 
the 2003 news article, the long-term estimate of Iraq and 
Afghanistan veterans' claims was only about 50,000. The reality 
is devastating. VBA has received 500,000 claims from Iraq and 
Afghanistan war veterans. Veterans for Common Sense estimates 
another 500,000 new claims from these veterans in the next 5 
years.
    Progress in reforming VBA begins by listening carefully and 
acting upon suggestions made by Congress, veterans, advocates, 
and staff. VBA is starting to do that, and we applaud that, yet 
much more needs to be done.
    I want to put this in perspective. Fixing VBA is often 
vital so our veterans can obtain health care benefits. Except 
for Iraq and Afghanistan, veterans who receive 5 years of free 
health care after discharge, an approved VBA claim is usually 
required before a veteran receives medical care.
    VBA's two crises remain in critical condition, we believe, 
because VBA remains leaderless. VBA has no permanent Under 
Secretary and no permanent Deputy Under Secretary. This is 
unacceptable for our veterans and VBA's hardworking staff. 
During a time of crisis, leadership and vision are essential to 
chart a responsible course and to be held accountable for 
meeting the agency's objectives. VCS urges VA Secretary 
Shinseki to fill VBA's vacant positions as quickly as possible 
with qualified veteran advocates who will continue his efforts 
to transform VBA.
    We strongly encourage VBA's soon-to-be-selected leaders to 
bring on board a team of dozens of subject-matter experts 
focused on two strategic goals. The first goal of the new VBA 
leaders should be to improve both the quality and timeliness of 
current claim decisions. The pilot programs are a good start. 
The second goal should be to develop and implement a long-range 
plan to overhaul VBA's information technology, training, 
regulations, and leadership, because, as Dr. Levin at VA said, 
the VBA's current system is unsustainable. I am paraphrasing 
his comment.
    VCS also wants Congress to review VBA's efforts to improve 
processing goals for veterans claims and to publish final PTSD 
claim processing regulations.
    A bright ray of hope on the horizon comes from Secretary 
Shinseki's promise to fix VA this year. The ray brightened when 
VA's Peter Levin confirmed VBA is broken and in need of urgent 
repair. Hope increased further when VA received approval for a 
six-page claim form. Congress is also pushing in the right 
direction to reform VBA.
    From our point of view, veterans will know VBA is improving 
when VBA has new leaders, VA's error rate is reduced, when 
claims are processed faster and more fairly, when Gulf War 
rules are improved, and when final PTSD regulations are 
published.
    In order to reach the long-term goal and transform VBA for 
the 21st Century, VCS asks Congress to pass a new law mandating 
the creation of an entirely new VBA system from the ground up. 
This would fulfill promises made to veterans by Shinseki and 
Levin. Any new law must set tough requirements for quality and 
timely decisions so our veterans don't wait for health care and 
benefits.
    Thank you. And I will be glad to answer any of your 
questions.
    [The prepared statement of Mr. Sullivan appears on p. 62.]
    Mr. Hall. Thank you, Mr. Sullivan.
    I would start by asking Mr. Sullivan and our other 
panelists also for their comments, if you care to offer your 
comments, on the announcement of the shortened form. We did not 
get the one-page that you were asking for, but we got it down 
to 10 pages, you know, from 23 pages to 10 pages, and then the 
EZ form for those veterans who believe they have the full 
documentation of their claim and don't need further 
development.
    Can you comment on that?
    Mr. Sullivan. Mr. Chairman, Veterans for Common Sense is 
very pleased that VA is listening to Congress and the 
legislation you all pushed through and the concerns of veterans 
groups for a shorter claim form. This is very good news.
    And it is especially good news for veterans with traumatic 
brain injury, other mental impairment, psychological problems, 
who often abandon a claim when they are presented with the 
longer form. I have seen it myself in person at VA facilities, 
and it is very disappointing to see veterans walk away when 
they are handed the stack of paper.
    I hope that this small step will send a message to 
veterans, VA staff, and the public that VA is listening and 
they are doing the right thing.
    Mr. Hall. Ms. Ames?
    Ms. Ames. It looks like a wonderful idea.
    Mr. Hall. Mr. Cohen?
    Mr. Cohen. Well, the problem I have in answering the 
question is, of course, lawyers are excluded from the initial 
part of the claim filing. Veterans are not permitted to hire 
lawyers until they file their first appeal.
    But NOVA has consistently compared the claim form that 
veterans are required to file in the VA with the claim form 
that most injured workers file in their States for workers' 
compensation benefits. The workers' compensation form is a one-
page form, which has a provision at the bottom for a treating 
doctor to say the condition is related to work.
    VA hasn't gotten to that point, but presumably this would 
be the first step, what they have done now is the first step in 
a process to get a form where the treating doctor can just say, 
``I have diagnosed the condition. It is connected to service. 
Let's go on to the extent of disability.''
    Mr. Hall. Thank you.
    Mr. Cohen, you suggest several points of decentralization 
of the VA and overhaul of its procedure for processing claims, 
a more user-friendly system, addressing the labor intensity of 
the current assembly-line approach.
    Can you weigh for us the balance of your concern with the 
convenience of the system and the efficiency of the process?
    Mr. Cohen. Well, it seems that the convenience and 
efficiency are tied together. Because if veterans would have a 
system where they could go into a local VA office to file their 
claim and actually speak to someone face-to-face and be 
interviewed in a meaningful interview, the claim process would 
start more efficiently, and the material that is gathered would 
be more efficient and more effective, and probably the decision 
making would be better.
    This, I understand, is one of the things that is being 
attempted in the pilot in Pittsburgh, to actually sit across 
the table from a veteran and get the information face-to-face. 
If it is done properly, the end product would necessarily have 
to be better.
    Mr. Hall. Thank you.
    And, Ms. Ames, you mentioned in your testimony the 
unwillingness of the VBA to proceed with regional and local 
labor management forums mandated by the White House Executive 
Order on labor management relationships.
    Please, could you explain to us the details of this 
Executive Order and how the VBA has failed to execute it.
    Ms. Ames. AFGE will have to get back with you.
    [The AFGE subsequently provided the following:]

                AFGE RESPONSE TO POST-HEARING REQUEST BY
   CHAIRMAN HALL FOR ADDITIONAL INFORMATION ABOUT VBA'S PROGRESS IN 
                        IMPLEMENTING E.O. 13522

          Thank you for the opportunity to elaborate on Executive Order 
        (E.O.) 13522 to implement Labor-Management Forums, and our 
        concerns about VBA's lack of progress in implementing forums.
    I. What E.O. 13522 Requires:
          The goal of E.O. 13522, issued by President Obama on December 
        9, 2009, is to ``establish a cooperative and productive form of 
        labor-management relations throughout the executive branch''. 
        The nonadversarial forums established by the E.O. are designed 
        to improve labor relations, productivity and effectiveness of 
        the Federal Government. More specifically:

          Predecisional Involvement: These forums, to be 
        established at the national, regional and local levels, are the 
        vehicles for ``predecisional involvement'' (PDI), i.e. 
        management and labor are supposed to jointly develop solutions 
        to workplace problems rather than management advising the union 
        of predetermined solutions and then bargaining over the impact 
        and implementation of these solutions.
          Pilot Projects for Bargaining over Permissive 
        Subjects: The E.O. requires that some pilot projects be 
        established in executive departments or agencies to evaluate 
        the impact of bargaining over permissive subjects set forth in 
        5 USC 7106(b) (1), i.e. numbers, types and grades of employees 
        or positions assigned to any organizational subdivision, work 
        project, or tour of duty or the technology, methods and means 
        of performing work.
    II. Status of VBA's efforts to implement E.O. 13522:
          Overall, VBA is making progress toward implementing the E.O., 
        including an agency-sponsored joint labor-management training 
        program and the pilot project discussed below. However as also 
        noted below, progress among different ROs is inconsistent. (We 
        note that VBA is making significantly more progress than the 
        Veterans Health Administration on implementation of the E.O.)

          Predecisional Involvement: Even in those ROs where 
        forums are in place, most managers are merely ``going through 
        the motions,'' and are not making a meaningful effort to 
        involve the union early to jointly develop solutions to agency 
        problems. For example:

                  Our members in Winston-Salem, NC report that 
                the labor-management forum being established at their 
                RO will lack decision making authority and its only 
                role will be to provide recommendations to the 
                Director. At the same time, management continues to 
                stonewall any real progress toward predecisional 
                involvement. Instead of jointly collaborating on needed 
                changes, management claims that providing information 
                about their intentions constitutes predecisional 
                involvement.
                  Similarly, members from the Reno, NV RO 
                report a virtual failure on management's part to 
                recognize the essence of predecisional involvement. 
                Rather, to their Director, predecisional involvement 
                ``seems to mean that he wants something, he mentions it 
                to the AFGE president and then he goes forward.'' 
                Management at this RO is not sharing information or 
                offering to discuss issues jointly, leaving no 
                opportunity for joint problem solving.
                  Members from the Little Rock RO have had a 
                more positive experience to date. They report that the 
                basic Forum was established pursuant to E.O. 13522 and 
                is meeting on issues that involve all employees. Labor 
                and management are working together to discuss all pros 
                and cons of the issues that come before them, and they 
                are making joint recommendations to the RO director. If 
                there are questions, the Director addresses those 
                issues directly with the Forum for clarification. In 
                the event issues arise to involve specific divisions, 
                i.e. Support Services and Vocational Rehabilitation, 
                union members serve as subject matter experts and 
                participate in the basic Forum until the problem is 
                resolved.

          Pilot on (b) (1) bargaining on permissive subjects: 
        We are pleased to report that VBA has agreed to implement a 
        pilot project to address the means, methods, and technology 
        used for certification of skill level by VR&E Counselors and 
        Counseling Psychologists. Several of our members will be 
        participating in a planning group to design this pilot. This 
        effort is in the very early stages. We will keep you apprised 
        of the status of this (b) (1) pilot.

          Please contact AFGE National VA Council Lobbyist Marilyn Park 
        at (202) 639-6456 if you have any additional questions. Thank 
        you.

    Mr. Hall. You briefly touched upon the telework policies--
``flexiplace'' you called it--across regional offices. Could 
you please elaborate on your point about how the policies are 
discriminatory?
    How do you think the decision was reached? What is the 
logic, in your opinion, behind requiring a higher productivity 
number if you work from home? And who exactly is hindered by 
this?
    Ms. Ames. The report that I read said that they came up 
with it because you have less distractions if you are working 
from home so that you should be able to produce more.
    Mr. Hall. They must have a different kind of home than I 
do.
    Ms. Ames. I am thinking the same thing.
    From 3.5, the points that I have to make now, to 4.5, that 
is making me produce at least five one- to seven-issue claims a 
day. That is a lot. Just for working from home.
    When working from home, you know, it alleviates a lot of 
the problems that we have. Our office is packed. There are no 
seats available, we have hired so many employees. The parking 
situation--just, you know, to keep people--at this point, 
people retire because they just get tired of being there. And 
if you would give them the option of working from home, you 
know, that might keep more of the people that have been there 
for a while that have the knowledge just to stay.
    Mr. Hall. Thank you.
    Mr. Sullivan, VCS points to the tidal wave of compensation 
claims, which is estimated to reach over 1 million, by some 
estimates is already over a million, counting appeals, as a 
significant challenge that further burdens the VBA's system, 
including new claims for Agent Orange (AO) and other herbicides 
used during the Vietnam War.
    Based on VBA's initiatives to address the backlog, do you 
believe that it could be on track to reach the 2015 goal in 
light of this increase in claims? Or do we need to take some 
further radical action to get there?
    Mr. Sullivan. Mr. Chairman, we want VBA to make the goal. 
But, at this time, I don't think the pilots and the scalability 
of the pilots are there for VBA to make that goal.
    We want to see them do it. We truly do. We want to work 
with them to make sure that they can fix this soon. But right 
now the pilot projects are just those, Mr. Chairman. They are 
one office. And we are not sure, because we don't have all the 
information available to us--and we would like it--to be able 
to say that VBA can quickly increase the size of the pilot 
programs so that they could be nationwide immediately.
    At this point, it looks like, as Mr. Cohen said, lots of 
action and we have been here before, but where is the progress? 
And I want to say that they can do it, but I just don't see it 
there yet, Mr. Chairman.
    Mr. Hall. And maybe you could answer, and Ms. Ames and Mr. 
Cohen also, just leave us with one--if you had to pick one 
recommendation for what VA should be doing for handling the 
claims processing, what would your top pick be?
    Ms. Ames. The performance standards, if they were fixed we 
would be able to more accurately count the amount of work that 
is done and get people so that they are not trying to make an 
unrealistic goal, and make it realistic and count the work that 
they are actually doing so that they can process claims and 
process them in a timely manner, process the oldest claims and 
if you are just asking for a number to be produced, people are 
going to make that number, no matter if they are using the 
oldest claims or the newest claims. And you want it to where 
they work all the claims in the order they come in. And I think 
if you had a more realistic work performance standard, that 
would happen.
    Mr. Hall. Mr. Cohen?
    Mr. Cohen. What is required is a paradigm shift. Instead of 
looking at the present culture and the present way that the VA 
looks at veterans, the VA needs to adopt the standard that is 
used in the criminal justice system. That is, there should be a 
presumption of entitlement.
    VA should regard a veteran with benevolence which is at 
least equal to that provided by the criminal justice system to 
an accused. VA should say, ``This person has filed a claim. 
This is a veteran.'' There should be a presumption that the 
veteran is entitled to the benefits, absent clear and 
convincing evidence to the contrary.
    That would move a vast number of claims that are being 
delayed by an inappropriate standard, the standard of the 
burden of proof being on the veteran to prove by a 
preponderance of evidence that the veteran is entitled to the 
benefits. A presumption of entitlement would change everything.
    Mr. Hall. Thank you.
    Mr. Sullivan.
    Mr. Sullivan. Mr. Chairman, if there was to be one 
priority, it would be forming a task force at the Secretary and 
Under Secretary level at VA to build a new VBA from the ground 
up.
    While all these pilot projects are going on, someone needs 
to set aside a team--veterans experts, VA experts, 
Congressional staff, private-sector experts, and, yes, some 
veterans--sit them in a room, and let's build a system that 
puts quality and veterans issues first. And I think we can do 
that at the same time while we are trying to repair the 
existing system so it can at least function.
    But the current system is unsustainable in the long term. 
And there are some very bright, hardworking new leaders at VA 
and VBA, and there is VBA staff here that would jump at the 
opportunity to do that. I say Congress should give them the 
room to build the system that they want that will do the right 
thing.
    Mr. Hall. Thank you, Mr. Sullivan and Ms. Ames and Mr. 
Cohen. Thank you for your service to our Nation and its 
veterans, and thanks for your patience while we were voting 
across the street.
    And this second panel is now excused. If we have any 
further questions, we will send them in writing to you.
    And we will now ask our third panel to join us: Michael 
Walcoff, Acting Under Secretary for Benefits, VBA, U.S. 
Department of Veterans Affairs; accompanied by Tom Pamperin, 
Associate Deputy Under Secretary for Policy and Programs; Diana 
Rubens, Associate Deputy Under Secretary for Field Operations; 
Mark A. Bologna, Director, Veterans Benefit Management System; 
and Peter L. Levin, Senior Advisor to the Secretary and Chief 
Technology Officer (CTO).
    Thank you so much for joining us. And your written 
statement is in the record.
    If you would bear with me for a moment, we will recess the 
Subcommittee for about 1 minute while I recognize the incoming 
Superintendent of West Point.
    [Recess.]
    Mr. Hall. The Subcommittee will come back to order.
    Secretary Walcoff, welcome. And you are now recognized for 
as much time as you need, sir.

   STATEMENT OF MICHAEL WALCOFF, ACTING UNDER SECRETARY FOR 
BENEFITS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; ACCOMPANIED BY TOM PAMPERIN, ASSOCIATE DEPUTY 
  UNDER SECRETARY FOR POLICY AND PROGRAM MANAGEMENT, VETERANS 
 BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
  DIANA M. RUBENS, ASSOCIATE DEPUTY UNDER SECRETARY FOR FIELD 
 OPERATIONS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT 
   OF VETERANS AFFAIRS; MARK A. BOLOGNA, DIRECTOR, VETERANS 
 BENEFITS MANAGEMENT SYSTEM, VETERANS BENEFITS ADMINISTRATION, 
U.S. DEPARTMENT OF VETERANS AFFAIRS; AND PETER L. LEVIN, SENIOR 
  ADVISOR TO THE SECRETARY AND CHIEF TECHNOLOGY OFFICER, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

    Mr. Walcoff. Thank you, sir.
    Chairman Hall, thank you for the opportunity to appear 
before you today to discuss the Department of Veterans Affairs 
disability compensation and pension programs.
    Accompanying me today are Diana Rubens, Associate Deputy 
Under Secretary for Field Operations; Tom Pamperin, Associate 
Deputy Under Secretary for Policy and Program Management; Mark 
Bologna, Director of the Veterans Benefits Management System 
Initiative; and Dr. Peter Levin, Senior Advisor to the 
Secretary and Chief Technology Officer.
    I want to point out that, to express VA's commitment to the 
``One VA'' effort to meet Secretary Shinseki's goals, we also 
have with us Philip Matkovsky, Deputy Chief Business Officer of 
the VHA; Martha Orr, who is the Executive Director of Quality 
Performance and Oversight in the Office of Information and 
Technology; and Donnie Hachey, who is the Chief Counsel for 
Operations at the Board of Veterans' Appeals.
    My testimony today will focus on the Secretary's goals to 
eliminate the claims backlog by 2015 with a 98 percent quality 
rate so as to ensure timely and accurate delivery of benefits 
and services to our veterans and their families.
    The entire VA leadership fully shares the concerns of the 
Subcommittee, Congress as a whole, the veterans service 
organizations, the larger veteran community, and the American 
public regarding the timeliness and accuracy of disability 
benefit claims processing. As you know, Secretary Shinseki set 
the critical goals of eliminating the disability claims backlog 
by 2015 so that no veteran has to wait more than 125 days for a 
quality decision.
    We are attacking the backlog through a focused, multi-
pronged approach. At its core, our approach relies on a 
changing culture, re-engineering current business processes, 
and developing our infrastructure with technology that supports 
a paperless claims environment.
    Our aggressive efforts are at the heart of our requirements 
for a large increase in our 2011 budget request for VBA. We 
greatly appreciate this Subcommittee's consideration and 
support of our fiscal year 2011 budget request as we continue 
this important work for our veterans.
    We understand the frustration of many veterans with the 
time it takes to reach a decision on their disability claims. 
Throughout VBA, we have rededicated ourselves to the mission of 
being veterans' advocates. This is a commitment which flows 
from the Secretary down to the VBA leadership and to our 
dedicated employees in the field.
    Before going further, let me provide you with an update on 
the current disability claims workload. Our pending claims 
inventory is rising due to the unprecedented volume of 
disability claims being filed. VBA experienced a 14.1 percent 
increase in annual claims received in 2009, while we project an 
increase of 13.1 percent and 11.3 percent in 2010 and 2011, 
respectively.
    This substantial growth is driven by a number of factors, 
including our successful outreach efforts, improved access to 
benefits, and the impact of a difficult economy. As a result, 
we now average over 97,000 new disability claims added to the 
inventory each month, and we project to receive nearly 1.2 
million disability claims this year.
    The projections I just mentioned do not take into account 
approximately 200,000 additional claims based on Secretary 
Shinseki's decision to establish presumptions for service 
connection for veterans exposed in service to certain 
herbicides, including Agent Orange, for three particular 
illnesses based on the latest evidence presented by the 
Institute of Medicine of an association between those illnesses 
and exposure to herbicides.
    We have a plan to re-adjudicate these decisions, as 
required under the court order in the U.S. District Court for 
the Northern District of California, case of Nehmer v.  U.S. 
Department of Veterans Affairs.
    VA is also soliciting private-sector input to design and 
develop an automated system for faster processing of new Agent 
Orange presumptive claims. We already have over 40,000 new 
claims and are receiving about 8,000 more per month.
    The need to better serve our veterans requires bold and 
comprehensive business changes to transform VBA into a high-
performing 21st-Century organization that provides the best 
services available to our Nation's veterans and their families.
    VA's transformation strategy for the claims process 
leverages the power of 21st-Century technologies applied to 
redesigned business processes. We are examining our current 
processes to be more streamlined and veteran-focused. We are 
also applying technology improvements to the new streamlined 
processes so that the overall service we provide is more 
efficient, timely, and accurate.
    We are harvesting the knowledge, energy, and expertise of 
our employees, VSOs, and the private and public sectors to 
bring to bear ideas to accomplish this claims process 
transformation. Our end goal is a smart, paperless, IT-driven 
system which empowers our VA employees and engages our 
veterans.
    While we work to develop this system, we are making 
immediate changes to improve our business process and 
simultaneously incorporating the best of those changes into our 
larger effort, our signature program, the Veterans Benefits 
Management System, VBMS. I will not go into details here, but I 
have outlined a specific plan in my written testimony of the 
many different improvement initiatives that are going on here 
at the VA.
    VA is also working closely with our stakeholders. We 
recently partnered with the U.S. Department of Defense (DoD) to 
create the eBenefits portal. The portal provides 
servicemembers, veterans, families, and care providers with a 
secure, single-sign-on process to online benefits information 
and related services, such as military personal records and the 
status of VA claims.
    Additionally, VA continues to meet with stakeholder groups 
to improve communication and to promote innovation, and has 
recently met separately with veterans service organizations, 
the American Federation of Government Employees, and various 
out-of-the-box thinkers to partner on ideas to meet Secretary 
Shinseki's challenge to eliminate the backlog and increase 
quality. We will continue to examine every new idea from our 
employees and stakeholders that may assist us in our mission.
    Secretary Shinseki's goal is to transform VA into an 
organization that is veterans-centric, results-driven, and 
forward-looking. At the same time, VA must deliver first-rate, 
timely health care benefits and other services to our Nation's 
veterans, families, and survivors. We are looking forward to 
working with Congress, VSOs, and other partners to meet our 
critical goals and the needs of the 21st-Century veterans and 
their families.
    Mr. Chairman, this concludes my testimony. I would be happy 
to respond to any questions that you may have.
    [The prepared statement of Mr. Walcoff appears on p. 66.]
    Mr. Hall. Thank you, Mr. Walcoff.
    So, how would you feel about having a taskforce to rebuild 
the VBA from the top down or bottom up, either way, and still 
processing all of those claims at the same time?
    Mr. Walcoff. Mr. Chairman, I believe that if you look at 
what we are doing under Secretary Shinseki's leadership, I 
believe it really is building a new VBA.
    It starts with the culture. There were a lot of things that 
I didn't agree with that were said on the previous panels, but 
that was one thing that I have some agreement with. I think we 
have to look at the culture of the organization and we have to 
start there. And a lot of the initiatives that we have in place 
right now are really aimed at changing the culture of our 
organization so that we are always veteran advocates.
    An example of that is our phone development initiative 
where, instead of just sending a veteran a letter and hoping 
that he understands it, we are following it up with a phone 
call where we can talk to him, go over the letter, and discuss 
with him what he needs to do to pursue his claim, and then 
offer any assistance that we can to help him with that claim.
    The advantage of that is that the veteran can begin 
immediately to put together whatever evidence he needs to 
process the claim or he can say to us, ``I don't have any more 
evidence,'' in which case we can waive the VCAA days that are 
required and immediately decide the claim. So I think that is 
an example of trying to change the culture of the organization.
    The second thing we are trying to do is change our business 
process, which is, to me, building a different organization, 
changing the way we actually process claims. It is very, very 
important that we do that as we go into, you know, some of the 
new technology that is going to be coming.
    There are many examples of how we are changing the actual 
process, and I will mention just one as an example. And I think 
this is one that you are familiar with. And that is that we are 
looking for claims that we can begin paying an interim payment 
while we are processing claims. That is something that I know 
we have had conversations about. And we have piloted that in 
our St. Petersburg office, and we believe that is something 
that we are going to be able to expand nationwide. That is 
changing our business process, and that is the kind of thing 
that we are doing under Secretary Shinseki's leadership.
    And then let me just finish with the technology, because I 
think that is what is going to make the biggest difference in 
our organization. We have talked a lot about it; the other 
panels have talked about it. But, to me, when you put culture, 
business process together with technology, you have a changed 
organization.
    Mr. Hall. Thank you.
    I know Mr. Bilbray wanted to ask you and he wanted me to 
ask you his question, which I think had to do with the court's 
decisions being either followed or adhered to or not by VBA 
staff at various levels.
    Mr. Walcoff. Yes, and I appreciate the opportunity to 
comment on that.
    The representative from the American Legion had pointed out 
that, in their visits to our offices, they often find that 
there are court decisions that our employees at the actual 
working level are not aware of and, therefore, have not 
implemented. And I will say that that is an ongoing challenge, 
to, as decisions are made, to get that information out from our 
headquarters to our 57 offices, through all the layers that we 
have.
    But Congressman Bilbray made the jump that our employees 
were intentionally not carrying out court orders. And I wanted 
to very vehemently deny that that happens. Our employees know 
that they are required to follow court decisions, and they do 
not put themselves above the law, and do follow them. We have 
to make sure that they are aware of those court decisions, but 
that is on management to get that information through. Our 
employees follow court decisions.
    Mr. Hall. Thank you.
    And could you quickly address the question that Ms. Ames 
raised about working from home, people having different work 
productivity standards?
    Mr. Walcoff. Sure. And we have had a lot of discussion 
about that. And we actually have a good number of employees, 
mostly rating specialists, who work at home. I don't remember 
the exact number, but I believe it is over 200 that actually 
work at home.
    And when they do work at home, they do have an additional 
case required in their performance standard. She was right 
about that. Now, the question is, why is that?
    Well, first of all, we believe that our organization works 
better best when we have our employees, our rating specialists 
and our VSRs who are responsible for developing the evidence, 
talking with each other and working together so that the VSR 
who is developing a claim can be communicating with the rating 
specialist to say, ``Is this what I need? Do I need to be 
getting anything else? Is this sufficient?'' That type of 
thing. So that on-site communication is extremely important. We 
lose that when the rating specialist is not in the office and 
working at home. So there is a real negative, in that sense. 
And I believe that is a significant negative.
    The other side of it is that, when they are at the office, 
there are disturbances. I mean, there is mentoring that has to 
be done by rating specialists. There are the interruptions that 
come from a VSR asking questions about--you know, the same 
questions that I just talked about. That interrupts the day of 
the rating specialists, making it more difficult to produce a 
certain number of cases.
    So our feeling is that, when the rating specialist is 
working at home, they don't have those disruptions. And I know 
that people say, ``Well, you haven't been to my house,'' but 
the truth is, if they are working at home, they shouldn't be 
working where there is a lot of noise and disturbance, because 
that is going to affect their ability to concentrate on the 
claim.
    So, assuming they are in a situation where they don't have 
those disturbances, and also considering the fact that we lose 
something by not having them in the office with that 
communication with the rating specialist, we believe the offset 
is to ask for that additional case. And we have many, many 
employees working at home who are meeting that standard.
    Mr. Hall. Some of that standard is intended to incentivize 
them to come into the office and work from the office rather 
than working from home?
    Mr. Walcoff. Well, I wouldn't say ``incentivize'' it that 
way. I think that we recognize that there is some value to 
having the program. The fact is that she was right, we do have 
real space issues as we have been hiring all the people that we 
have hired.
    But what we find is that we have a lot of employees who are 
willing to work at home and willing to take on the 
responsibility of the extra case because they feel that, when 
they are there undisturbed, they can easily produce that extra 
case.
    Mr. Hall. I worked from home this Friday, and I know that 
the guy will probably come to clean the gutters while I am 
there, the dogs will need to be let in and out, you know, 
various things will happen, but then I will try to get my work 
done.
    Mrs. Halvorson.
    Mrs. Halvorson. Thank you, Mr. Chairman.
    Thank you, all of you, for being here today.
    You know, I have been saying this since the day I was sworn 
in, since the day I came to the Veterans' Committee, that, you 
know, one size does not fit all. These are our heroes. These 
are people that have served our country. We have to start 
treating our heroes like people, not as numbers.
    And, you know, with some of the changes that I hear today, 
I feel a little better. And I really believe that we have to do 
a better job of reaching out to them and not sending out 
legalese that they can't understand, and then they have a 
letter that sits there because somehow they think maybe it is 
going to be easier to understand on the last day that they have 
to get you their information and it doesn't.
    Many of my constituents who fought in Vietnam and were 
exposed to Agent Orange and other herbicides have subsequently 
been diagnosed with the presumptive illnesses associated with 
that exposure. Now, unfortunately, many of these same veterans 
have not been aware that their illness was now presumptive and 
have gone without the care or compensation for quite some time. 
I personally have been working on a case of a veteran in my 
district who has suffered for 6 years with cancer before 
learning that his type of cancer is on the list of a 
presumptive disease.
    So what are we doing to make sure--and this is a two-part 
question--what are we doing, first of all, to make sure that 
veterans are aware of the illnesses that are now listed as 
presumptive? And, in this gentleman's case, he is upset that 
why isn't compensation now retroactive to the date that the 
veteran was diagnosed with this presumptive illness instead of 
the date that the claim was filed?
    So if we can answer those two, one being what are we doing 
to make sure the veteran knows now and doing outreach about 
these presumptive illnesses, and about his individual case, 
about the diagnosis versus the claim being filed.
    Mr. Walcoff. Let me take the first part of it, which is the 
outreach part.
    You know, we can have the greatest benefits in the world, 
but they are of no value if nobody knows about them. And I 
totally agree with you that it is our responsibility to do 
everything we can to make sure that veterans understand what it 
is that they are entitled to.
    And I will tell you that I think that we have been doing a 
lot of outreach. I think that part of the reason that our 
claims receipts have gone up as much as they have is because we 
have really focused on the importance of getting out there and 
getting the information out so that veterans know what they are 
entitled to.
    What I will do is--I don't have with me the numbers, but, 
we have back at the office information about how many briefings 
we do every year, how many veterans we actually talk with, how 
many service people that we talk with right before they get out 
under our Transition Assistance Program briefings.
    We do a lot of outreach. And I can't agree with you enough 
that that is the key. We absolutely have to--as much as we are 
doing, I think we have to do even more, because we have to make 
sure that that veteran, in your case, would have found out 6 
years ago or whatever that he could have applied for that 
benefit and been entitled.
    Unfortunately, as you said, the way the regulatory system 
works, he is not going to be entitled. And I am going to ask 
Tom to talk a little bit about the way that works.
    Mr. Pamperin. Yes, ma'am. The fundamental, foundational 
reason why it does not go back is because the statute says, the 
benefits will be payable from the date of receipt of a claim 
prescribed by the Secretary.
    Now, having said that, with presumptive disabilities, it is 
an established construct of both legislative and regulatory 
process that benefits are prospective. They are available from 
the date that the final regulation--particularly, for example, 
the Agent Orange presumption. The Agent Orange Act specifies 
that the benefits are payable as of the date of the final 
regulation.
    Now, if the veteran had previously applied, if we restrict 
this to Agent Orange-specific disabilities, under the Nehmer 
settlement we are obligated to identify, both from our VBA 
systems and we look in VHA systems, to identify people who may 
have been previously denied. And we review those on the 
Secretary's own initiative. And for those particular cases, we 
do go back to the date of the original claim.
    Any other presumptive disability outside of the Agent 
Orange arena, if the veteran had the disability on the date 
that the regulation becomes effective and they file a claim 
within a year of that regulation, we can go back to that year. 
If they file more than a year after, we can go back 1 year from 
the date of the claim.
    But, at its basis, the statute requires that a veteran file 
a claim for the benefit.
    Mrs. Halvorson. Thank you.
    Mr. Walcoff. Can I just add one thing? Yeah, back on the 
outreach thing again, one of the things we have done very 
recently, as a matter of fact since I have been acting, is we 
have established a new service, a new program in Central Office 
called the Benefits Assistance Service. And their primary 
function is outreach.
    Whereas previously outreach was done as part of the C&P 
program, as part of the Compensation and Pension Service, along 
with all of the other things that we have been talking about 
today, we created this separate organization because we wanted 
to give more focus to outreach. And I can tell you that I spoke 
with the Director of that service, Rob Reynolds, yesterday 
about having a study done to look at our outreach program to 
see how we can improve it.
    I just can't agree with you enough as to the basic question 
that you asked about making sure we get the word out as to what 
we have available for veterans. It is extremely important.
    Mrs. Halvorson. Because I have a caseworker in my office 
that does nothing but veterans cases. She goes to all the 
veterans organizations; she talks about what there is out 
there. And it is amazing that people call her and don't really 
know what is out there until she goes out there and talks about 
it. So, you know, to me, why have benefits if you don't tell 
people what is out there for them?
    And the other suggestion I can make, and I talked about 
this in my opening remarks, is it is very important that we 
keep morale up and that people love what they do or else they 
need to find another job. Because these are important people 
that we are taking care of.
    And I really want to express that we should not confuse 
activity with results. I know everybody is working hard. But 
let's get down to the bottom of actually getting things done, 
and not just confuse the fact that people are busy all the day.
    Thank you.
    Mr. Hall. Thank you, Mrs. Halvorson.
    Secretary Walcoff, what is the VA's timeline for rolling 
out its business transformation efforts?
    In light of your projections for how many cases are 
expected, the number that you have seen in the last year and 
the number that are currently awaiting processing, it seems to 
me that in order to break the back of the backlog, as we heard 
it referred to during our claims summit in March by Mr. Levin, 
we need to know what it's going to take to also get to the new 
bridge, to the new process.
    So I guess it is a multi-part question. What is the 
timeline? What is the plan for the old bridge--the current 
claims that are awaiting processing? And how will these changes 
be translated into greater accountability and accuracy and 
consistency?
    I am guessing that the IT piece has to be a huge part of 
it, because with the numbers you are dealing with, as you have 
said before and as Secretary Shinseki has said before, you 
can't catch up with this influx of new claims just by hiring 
more people. It is just not going to happen fast enough.
    So, as the Ranking Member has been saying for years and we 
have all been saying, I think we really need to move into the 
21st Century and the IT world in order to be able to really 
break the backlog.
    Would you like to answer that?
    Mr. Walcoff. Sure. Let me preface it by saying that I agree 
that just hiring more people is not the answer. Now, the 
additional people we are going to be able to hire are certainly 
going to help.
    But the real key, the actually breaking of the back, I 
believe, is going to be when we have that marriage of a change 
in our culture, the business process, and the technology.
    And, as much as VBMS--the date we have been using is 2012--
there are some other things that we are doing involving 
technology that I think are going to have a more immediate 
effect, and particularly with the influx of cases coming in for 
Agent Orange.
    Let me ask Mark and Peter to talk about that. Because I 
think that is something that is going to be happening 
relatively quickly that will absolutely have an effect on 
bringing the backlog down.
    Mark?
    Mr. Bologna. Thanks, Mike.
    Mr. Chairman, as Mike mentioned, the Under Secretary 
mentioned, the Agent Orange project--so we have solicited bids 
for proposal on that contract. We expect to award the contract 
to an outside vendor.
    I believe the date is July 2nd. That is to build an 
automated, an automated system to do development on the Agent 
Orange presumptive conditions, as well as the decision 
recommendation. We expect to have a preproduction version of 
that system in August, ready to roll out in the fall. That has 
a direct tie-in to the VBMS, to the Veterans Benefits 
Management System. We believe that it will come directly and 
tie into the platform that we are building. That is part of the 
methodology that we are using in fact, in developing the 
Veterans Benefits Management System, is a platform that is 
consistent with industry, is Web-based, is paperless, and is 
supported by technology so that when things like this, or other 
opportunities in the future come up, that they can put--fairly 
quickly lash into or supplant pieces of the system.
    So the Agent Orange is well underway. As I said, we expect 
to have an award shortly. I think you got to see a brief 
demonstration of the virtual regional office. That is complete. 
And so the result of that is a nearly 200-page document of 
business requirements that we are now working towards. That is 
essentially--that provided what you saw was the graphical user 
interface, if you will, that will become the front end of the 
VBMS system that the user will see. We have worked with 
stakeholders, including staffers of this Committee, as well as 
veteran service organizations and others to continue to get 
input on that as we move towards building the VBMS system.
    The first pilot of that will be in November of this year. 
The pilot of the VBMS--I don't want to confuse it with some of 
the other pilots--will have a wire frame of that at the end of 
July, which is a more fleshed-out version of what you saw, 
followed by a preproduction later in the fiscal year.
    Mr. Hall. Mr. Levin, would you like to elaborate further? 
While you are at it, would you elaborate on how much help it 
will be, given the incoming--the new claims for Operation Iraqi 
Freedom/Operation Enduring Freedom veterans, how much would it 
help you to have an immediate transfer of medical records from 
DoD?
    Mr. Levin. Mr. Chairman, thank you for the opportunity to 
speak with you today and to answer your questions. Let me 
provide a little bit of context to the answers that you have 
already heard from the Under Secretary and from my friend and 
colleague, Mark Bologna.
    And let me start a very, very brief version of the story, 
already back last fall, where we initiated this Web-enabled 
innovation initiative, this knowledge management system, that 
reached out to our employees, some 7,000 of them who 
participated in this effort, followed earlier this year, 
subsequent to the innovation initiative, with the so-called 
Louisville conference where we reached out to the RO 
leadership.
    So we have collected, between these two initiatives, 
thousands of ideas. Is that interesting in terms of breaking 
the backlog in a way that we can measure? No, not really. Is it 
profoundly important in this cultural transformation which you 
have heard about all afternoon? Absolutely, yes.
    So what we are trying to convey to our employees, to our 
stakeholders, to the VSOs, to the veterans, is this ability to 
outreach, this ability to listen, and frankly to pull in some 
of these ideas that are going to go all the way into the VBMS 
system.
    I want to say what Mark said in a slightly different way, 
and ask you to hold us accountable to the following 
deliverables. First of all, you know about the innovation 
initiatives. They are in the process of being implemented right 
now. You have heard about the VRO, probably ad nauseam. You 
don't need to hear about that anymore, you have seen it.
    So this coming July, in just 6 weeks or so, you will be 
able to see the true design of the paperless pilot, the so-
called wire-frame production--I am sorry, wire-frame design. In 
August we are going to have the Agent Orange preproduction. In 
September we are going to have the preproduction of the 
paperless pilot. In October we are going to have the AO 
production. In November we are going to have the paperless 
project end to end.
    I said it fast, but I wanted you to hear July, August, 
September, October and November. We are doing this in a very 
very systematic, very methodical way, and we are doing it in a 
way that we can measure, pull the data out, and make sure we 
are achieving our performance metric.
    To your question, sir, about our ability to--or the benefit 
that we would get from pulling some of the medical records out 
of DoD. Sir, you know the answer to this question already. It 
would be great, it would help us a lot. I don't want to, by any 
means, convey that this is an impediment to us right now.
    Mark and I and our colleagues have a lot to do. The VLER 
project is proceeding simultaneously. I have the extraordinary 
privilege and pleasure of being the CTO to VBA and also the CTO 
to the VLER project, so there is automatically a connection 
there. We are working very hard on making that dream a reality. 
And there will be good news on that front as well. Absolutely 
it will help cut down the backlog, absolutely it will make 
things go faster. But please, sir, we are focused on the Agent 
Orange and the wire-frame design at the moment, and that isn't 
necessarily being impeded by the VLER project.
    Mr. Hall. I just wanted to ask, first of all, Mr. 
Secretary, for your comments on how close you are or how doable 
it is to have a full-time trainer at each RO, as one of our 
earlier witnesses suggested, with regular instruction and 
question-and-answer opportunities, or is such a thing already 
happening in some of the ROs?
    Mr. Walcoff. We have a full-time, I believe--let me ask 
Diana to answer, Ms. Rubens to answer, because I was going to 
answer off the top of my head and she actually works with it 
every day, so let me ask her to do that.
    Ms. Rubens. Thanks, Mr. Walcoff.
    Mr. Chairman, thank you so much. In fact, we do have 
training coordinators in all of our regional offices, fully 
engaged in implementing the training plans as they have been, 
one, developed in an overarching way with the coordination with 
the C&P Service, but also at the local level identifying what 
training needs to be addressed. Just earlier this year, just 
last month actually, we had all of them together in Baltimore 
to work together on making sure they understood their role, 
their responsibilities, and working to strengthen that training 
program at the local level.
    Mr. Hall. Thank you. It is our understanding that the fast-
track contract has been contested. Is this the case? And if so, 
how would this affect the process?
    Mr. Walcoff. Dr. Levin will address that.
    Mr. Levin. Mr. Chairman, I by no means want to--don't want 
to prejudice any outcomes that you may be hearing about 
shortly. We have carefully reviewed that protest and have 
conveyed a very clear recommendation to the GAO about why we 
think we should be allowed to proceed forward. I expect to be 
hearing a more formal decision that we can convey to Congress 
very, very shortly.
    Mr. Hall. Mr. Secretary, could you tell us some of the 
specifics that you have learned from your pilots, particularly 
the telephone claims development medical questionnaires and 
interim ratings. And if VA already has the authority to issue 
interim ratings, should there be a pilot engaged to give 
veterans this benefit? Shouldn't it already be more widely 
used, or is it being more widely used than what we are hearing?
    Mr. Walcoff. Let me start with the interim ratings. In the 
context that we are talking about, we are talking about a 
situation, using as an example, an ischemic heart disease 
claim. Where a claim comes in, we know--we can determine 
eligibility very simply, because all you need to be eligible is 
proof that you have in-country service in Vietnam, and a 
diagnosis that you have the illness. So if you have those two 
things, then the only other issue left is to determine how 
serious is the disability, what rate should we pay?
    So that is a good example of a situation where in this 
context we would pay the compensable minimum to the veteran 
while we were doing the exam or whatever is involved with 
determining what the actual permanent rating would be. But the 
reason why that is a good example is because in that situation, 
you have everything you need to determine that the person is 
going to be getting at least something for that benefit. Okay. 
Now, not every situation fits that, and we have to go through 
and determine which conditions would be such that we would be 
able to make that determination.
    Now, another way that interim rating is often thought of, 
and I want to clarify that, is you file for five conditions, 
and we get the information back and we have two conditions 
that--all the evidence is back and we can rate the case and we 
can pay the full benefit. We want to make sure--and this is 
something that we should be doing nationally anyway--but we 
have reinforced it recently, and that is that instead of 
waiting for there to be all the evidence in on all five issues, 
and then rate the case and then pay the benefit, we are making 
sure that rating specialists will rate and pay for the two 
issues that they can while they are continuing to develop the 
other three. That, sir, is something that can be and should be 
done across the country.
    Mr. Hall. Thank you. And has the VA performed a time and 
motion study to ascertain how much time is actually required to 
perform tasks of different parts of the adjudicating claims? If 
so, when and would you provide any information that you have on 
that to the Subcommittee?
    Mr. Walcoff. I would have to go back and check when the 
last one that we did. It hasn't been recently, but I will go 
back and check when the last one happened.
    [The VA subsequently provided the following information:]

      The VA provided the 2004 Work Measurement Study entitled, 
``Electronic Work Measurement Application Final Work Rate 
Standards,'' dated July 15, 2004, which generated the results 
currently used by VBA. The report appears on p. 72. Some of the 
tables are being retained in the Committee files.

    Mr. Hall. Do you think the VA should expand its Systematic 
Technical Accuracy Review (STAR) review? Are there any efforts 
underway to do that, or is an independent third-party review 
necessary?
    Mr. Walcoff. Mr. Chairman, I share with you and all of the 
witnesses here the recognition of how important quality is. 
When we talk about eliminating the backlog, we have to be 
talking about that at the same time that we talk about the 98-
percent quality goal, which is an extremely difficult and 
challenging goal the Secretary has set for us.
    We have expanded our quality assurance program, our STAR 
unit in Nashville. There was a recent study done by the OIG 
which said, ``You broker a lot of work to other stations and 
yet you don't do separate quality reviews for that. You know, 
you need to expand your quality assurance to look at brokered 
work.'' We did that. We also added people to the STAR unit so 
that they could review a larger number of cases, so we 
recognize the importance of the quality assurance program.
    I do not believe that we need an independent organization 
to do review. The people that are doing the reviews in 
Nashville are not affiliated in any way with the regional 
offices that the cases are coming from. They don't work in that 
same organization, they work for a headquarters organization, 
which is very different from the field organizations. So I do 
believe that you get that neutral, objective review.
    And I want to add one other thing, and that is that, as I 
said, the Secretary set a goal for us of 98 percent quality. I 
believe we have great employees, and I believe our employees, 
as they get more experience, the quality will improve. We are 
currently at 83 percent. But I will tell you that it is going 
to be extremely difficult, using the current systems, for us to 
get to 98 percent quality. And that is why to me the real 
answer to the backlog and to the 98 percent quality is the 
technology.
    And that is when I turn to Mark and to Peter and say, get 
me a system, build me a system that will help our employees, 
that will guide them through when they are working a claim, so 
if they go to make an error it stops them and says, no, that is 
not the right answer. I believe we need a system like that to 
reach the 98 percent quality, and they are building it for me.
    Mr. Hall. I would tend to agree. And I would also agree 
with Mr. Cohen and with Chairman Filner of the full Committee 
that--and Secretary Shinseki--that presumption needs to be 
built into the system and repeated to personnel that the 
veteran is presumed to have a legitimate claim unless it is 
proven otherwise, since it is in our civil criminal justice 
system that you are innocent until proven guilty. Do you want 
to comment?
    Mr. Walcoff. I just wanted to mention that there is one 
thing that Mr. Cohen said that I don't agree with. And that is 
that we look at every case as if the veteran is trying to 
commit fraud on us. That is absolutely not true, absolutely not 
true.
    I believe that when veterans file a claim for a benefit, 
they honestly believe they are entitled to the benefit. It is 
not a question of trying to pull one over on us or anything 
like that. You know, they don't know what is included in the 
rating schedule, they don't know exactly what is required 
necessarily to be able to prove their condition. So that is the 
one thing I want to say.
    The second thing I want to say is that while I don't 
necessarily agree with some of the ideas in terms of just pay 
everybody and do an IRS audit-type of thing, I will tell you 
that we are very interested in talking to anybody who has any 
kinds of ideas. And we met very recently with Professor Bilmes, 
who is the one who first put that idea forward. We spent about 
8 hours with her last week, with the idea of listening, talking 
with her, and trying to get some ideas from her of things that 
we could do to try to improve the system. We are not going to 
agree on everything, but I thought it was very fruitful and we 
got a lot out of the meeting.
    Mr. Hall. I am glad to hear you had that meeting. That is 
certainly one of the ways of breaking the backlog. Could you 
please give us an update on outstanding efforts today for 
Public Law 110-389, such as substitution regulation and 
certification requirements for claims processing personnel and 
management?
    Mr. Walcoff. Tom, do you want to take that?
    Mr. Pamperin. Yes, sir. The substitution regulation, we 
have been working closely with General Counsel and the Board of 
Veterans' Appeals. We have provided some guidance to the field, 
limited guidance, in the absence of regulation that we think we 
can go forward based upon the statute itself. But it is a very 
complex situation with a lot of nuances in it, and people are 
working on that as one of the primary things. I realize it has 
been a while, but they are working on that one. We can get you 
more information.
    [The VA subsequently provided the following information:]

      Thirty-eight U.S.C. Sec. 5121A was created by Section 212 
of the Veterans' Benefits Improvement Act of 2008, Public Law 
110-389. This statute provides, in pertinent part, that where a 
claimant dies after October 10, 2008, an eligible survivor may, 
within a year of the original claimant's death, request to be 
substituted as the claimant for the purposes of processing a 
claim to its completion.
      To implement this statute, VBA has drafted a proposed 
rulemaking that allows eligible survivors to substitute for 
deceased original claimants. Under the proposed rulemaking, if 
the original claimant dies while his or her claim or appeal is 
pending, then a survivor eligible for accrued benefits, may, 
within 1 year after the death of the original claimant, request 
substitution. Where VA determines that substitution is 
appropriate, VA will notify the substitute claimant and 
continue to process the claim or appeal as if the original 
claimant had not died. After the proposed rulemaking goes 
through concurrence, VA will publish the proposed rulemaking in 
the Federal Register.
      In the interim, VA has taken actions to allow potential 
substitute claimants to preserve their substitution rights. In 
June of 2009, VA published VA Form 21-0847, Request for 
Substitution of Claimant Upon Death of Claimant. On August 10, 
2010, VA published Fast Letter 10-30 on the subject of 
Substitution of Party in Case of Claimant's Death (FL 10-30). 
FL 10-30 instructs regional offices that VA will accept 
requests for substitution and that the date for the request for 
substitution will be the date that the written request for 
substitution is received by VA.

    Mr. Hall. I thank you. I want to ask one final question. 
There is a vote that is almost down to zero across the street, 
so any further questions we will have to send you in writing. I 
know you will be glad to receive them.
    But I wanted to ask for an update, if you could, on the 
search for a permanent Under Secretary, and when he or she is 
appointed, if you could, to quote from one of our first 
panelists, ensure that recommendations for reform are not 
nibbled into oblivion by the ``ducks of turf protection,'' 
unquote.
    You don't have to answer that, sir. Thank you. At least not 
verbally. You can answer in writing if you wish. I thought I 
was a creative writer. We have to have some levity or this work 
would be too serious for all of us.
    I thank you for the work you are doing, thank other 
panelists as well, all of our panelists, for the sacrifices you 
made for our country and for our veterans, and thank you again 
for your testimony today. Give all Members 5 legislative days 
to revise and extend their testimony, and this hearing is 
adjourned.
    [Whereupon, at 5 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

          Prepared Statement of Hon. John J. Hall, Chairman, 
       Subcommittee on Disability Assistance and Memorial Affairs

    Good afternoon ladies and gentlemen. Would everyone please rise for 
the Pledge of Allegiance? Flags are located at the front and back of 
the room.
    I welcome everyone here for today's hearing entitled, ``The State 
of the Veterans Benefits Administration.'' This hearing represents the 
7th hearing this year and the 15th for the 111th Congress that this 
Committee has conducted relating to problems plaguing the disability 
claims processing system. While oversight has been vigorous with 
significant activity on this front from stakeholders across the Board, 
the system is still in need of comprehensive repair.
    Today, there are over 546,000 compensation and pension claims 
awaiting final processing and a complete inventory or backlog of over 1 
million total claims and appeals within the VBA pending a decision. VBA 
workforce of over 13,000 employed in its compensation and pension 
operation, this figure represents a staffing increase of 32 percent 
since Democrats assumed control of Congress in 2007. However, as we 
have stated in the past the problems plaguing VBA are not just 
workforce issues, they are leadership methodology, culture, & 
technology issue. That is why we passed the Veterans Benefits 
Modernization Act, H.R. 5892, which was included almost in its totality 
in Public Law 110-389. As many of you in this room recall, with your 
help, P.L. 110-389 established a guided roadmap for VA to get us to 
where we are today--encouraged by all of the reform efforts that VA is 
making but cautious to make sure we're doing everything we can to help 
VA make meaningful reformation of its claims processing system.
    However, we want to avoid action for the sake of action and make 
certain that the 30-plus pilots that the VBA has going, translate into 
real change for our veterans and survivors languishing in the backlog. 
I think that most stakeholders believe that a comprehensive overhaul 
still is in order and I am encouraged that we seem to be on the right 
path to get there. I think we have the right leader for this monumental 
task in Secretary Shinseki, who seems to have both the vision and the 
commitment to get us to a more Veteran-centered, 21st Century system 
claims processing system.
    We all know about the myriad of problems plaguing the VBA's current 
claims processing system--lack of adequate training, a 30-40 percent 
error rate, a paper-based system, outdated IT architecture, and work 
credit and management systems that overemphasizes quality over 
quantity, with not enough emphasis on, accountability, consistency or 
accuracy. As I have said many times and I know that many of you agree 
as does Secretary Shinseki, we want a system that gets it right the 
first time--one that renders decisions in which our veterans and 
stakeholders have 100 percent confidence. Currently that is not the 
case.
    However, we are not here to blame anyone for where we are today, 
because the claims backlog is a decades old problem that is coming to a 
head mostly because we are currently engaged in two wars for which 
there was little planning, at the same time that our older vets are 
aging and need more care. We want to focus on solutions. I expect to 
get a comprehensive update on where VA is today and what it plans to do 
to meet its 2015 claims transformation target with its new Veterans 
Benefits Management and Veterans Relationship Manager Systems. We also 
seek to learn if and how these two new systems interface with the 
Virtual Lifetime Electronic Records Initiative announced by Secretary 
Shinseki. Further, while recognizing the good work of VA's acting under 
secretary for Benefits, we look forward to learning about the status of 
VA's effort to bring aboard a permanent Under Secretary.
    I think we all have the same goal, which is to ensure that we have 
a world-class and modern claims processing system that helps our 
veterans, their families and survivors to secure the benefits they 
deserve and have earned without delay.
    With that, I look forward to the insightful testimony of our 
witnesses and to comments and questions from my colleagues on the 
Subcommittee. I now recognize 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,

    It's been nearly 1 year to the day since this Subcommittee convened 
to discuss VA's ongoing struggle to overcome the backlog of disability 
claims.
    Multiple hearings have been devoted to this topic and the 
underlying need for VA to improve the timeliness and accuracy of its 
adjudication process.
    Anyone who has followed this Subcommittee's hearings over the past 
several years knows that I have long advocated for better use of 
information technology as a partial remedy to VA's problems.
    I am pleased that the ``Virtual RO'' concept I introduced in 2007 
to modernize the claims process is being included in the Veterans 
Benefit Management System, and I hope that it and the other integral 
parts of the VBMS will establish the framework needed to transform VA 
into a 21st century benefits system.
    I look forward to hearing from our VA panel this afternoon, an 
update on the status of the pilot programs that are underway--how long 
will it be before they are implemented, and how soon will they have a 
positive impact?
    While I understand that diligence is required when a foundation's 
pillars are being set, it is imperative that VA continues its progress 
with the utmost sense of urgency.
    Veterans are suffering as a result of the ever increasing inventory 
of claims, and this is simply inexcusable.
    There was no hesitation on their part when it came to serving our 
Nation in a time of need, and they should not have to wait months and 
years to receive compensation for the injuries they incurred during 
service.

    Thank you Mr. Chairman, I yield back.

                                 
Prepared Statement of Lieutenant General Ronald R. Blanck, USA (Ret.), 
      D.O., Member, Advisory Committee on Disability Compensation

    Chairman Hall, Ranking Member Lamborn, and Members of the 
Subcommittee: It is my pleasure to appear before you today representing 
the Advisory Committee on Disability Compensation. The Committee is 
chartered by the Secretary of Veterans Affairs under the provisions of 
38 U.S.C. & 546 in compliance with P.L. 110-389 to advise the Secretary 
with respect to the maintenance and periodic readjustment of the VA 
Schedule for Rating Disabilities. Our charter is to ``(A)ssemble and 
review relevant information relating to the needs of veterans with 
disabilities; provide information relating to the character of 
disabilities arising from service in the Armed Forces; provide and on-
going assessment of the effectiveness of the VA's Schedule for Rating 
Disabilities; and provide on-going advice on the most appropriate means 
of responding to the needs of veterans relating to disability 
compensation in the future''.
    The Committee has met nineteen times and has forwarded an interim 
report to the Secretary that addressed our efforts as of July 7, 2009to 
date. (Copies of this interim report were furnished to majority and 
minority staff in both Houses of Congress.) The Secretary of Veterans 
Affairs responded to the interim report on February 23, 2010. (Copy 
provided for the Record). The Committee has prepared a draft report to 
fulfill the statutory requirement to submit a report by October 31, 
2010. (Copy provided for the Record.)
    Our focus is in three areas of disability compensation: 
Requirements and methodology for reviewing and updating the VASRD; 
adequacy and sequencing of transition compensation and procedures for 
servicemembers transitioning to veteran status with special emphasis on 
seriously ill or wounded servicemembers; and disability compensation 
for non-economic loss (often referred to as quality of life).
    Your letter of invitation asked me to present the Committee's views 
on the current Veterans Benefits Administration. I will focus on the 
current status of review and update of the VASRD.
    I begin by acknowledging the progress that has been made in 
reviewing and updating the VASRD. Standards for the diagnosis and 
evaluation of TBI have been established. There has been progress to 
date in reviewing the entire mental disability category with emphasis 
on PTSD. Preliminary steps are underway to review the musculoskeletal 
body system and the endocrine system
    The Committee remains convinced that an updated and clarified 
Rating Schedule is key to enabling examining, rating and reviewing 
officials to make a more accurate and timely assessment of a veteran's 
disability and its effect on his or her average earnings loss and that 
an updated and clarified Rating Schedule should improve first time 
accuracy and reduce the number of appeals and the backlog that appeals 
create. The updated Rating Schedule should address the recognized 
inconsistencies in mental versus physical disabilities and in 
differences in age at entry into the disability system.
    Recent studies by the Veterans Disability Benefits Commission, the 
Institute of Medicine, the General Accounting Office and others have 
consistently recommended a systematic review and update process for the 
VASRD. The Congress has repeatedly demanded the same. I believe that 
the case for such a review is made and that sufficient data currently 
exists to proceed with a review and update. The Committee recommended 
to the Secretary that the Deputy Secretary be tasked with oversight of 
the VASRD systematic review and update process to insure that the VBA, 
VHA and General Counsel are fully integrated into the process. We 
proposed a level of permanent staffing in both VBA and VHA to insure 
that all 15 body systems are reviewed and updated, as necessary, in a 
timely way. We believe that a minimum of three body systems can and 
should be reviewed and updated each year on a recurring basis. We 
proposed a priority among the body systems that takes into account the 
following: body systems that are at greatest risk of inappropriate 
evaluations; body systems are considered problem prone, and relative 
number of veterans and veterans' payments associated with each body 
system.
    The Secretary's response to the recommendations in our interim 
report concurs in general with most of our recommendations but does not 
commit to specific management procedures, staffing, or timeline for 
review and update.
    The Committee has proposed a detailed procedure for review and 
updating the VASRD. This procedure is an addendum to the report we are 
submitting in accordance with our statutory requirement. It may be 
overly prescriptive in nature, but it offers a standing procedure for 
reviewing and updating all body systems.
    The Committee foresees requirements for two studies. The first is 
to validate horizontal and vertical equity in the tables of disability. 
For example, prior studies have shown a disparity in earnings capacity 
between mental and physical disabilities at most levels. VA should 
conduct this study every three to 5 years. It can be done internally or 
by contract. The second study is an in depth study of the Vocational 
Rehabilitation Program. A contract study was begun last year but 
cancelled. Low participation rates and completion rates indicate need 
for a study to assess all programs and make recommendations for change. 
This study can also be done internally or by contract.
    Regarding disability compensation for non-economic loss, also 
referred to as quality of life, we are reviewing the Special Monthly 
Compensation program as a potential model for quality of life system 
and we are analyzing options for forms of compensation beyond a 
monetary stipend. One of our concerns is to avoid a compensation system 
for non-economic loss that encourages seeking increasingly higher 
levels of compensation. Our current view is that quality of life 
compensation should be limited to clearly defined and very serious 
disability.
    Regarding disability compensation related to transition from 
servicemember to veteran status, we are reviewing the many recent 
changes and improvements to the transition programs such as the recent 
caregiver legislation to determine if and where gaps in coverage and 
assistance may remain for veterans and families. We are also reviewing 
the Vocational Rehabilitation and Education program as it relates to 
transition for disabled veterans.
    In summary, our Committee's work is progressing on a broad front. 
The parameters of our charter offer us the opportunity to look at all 
aspects of disability compensation and we are doing so. The Committee 
has excellent access to the Secretary and his staff. The VA staff is 
responsive and helpful to the Committee's requests for information. It 
is our intent to offer interim reports to the Secretary semi-annually 
and to provide copies to the Veterans Committees of both Houses of 
Congress.
    Mr. Chairman, this concludes my statement. I welcome any comments 
or questions.

                                 
           Prepared Statement of Carol Wild Scott, Chairman,
             Veterans Law Section, Federal Bar Association

    Good Afternoon Chairman Hall, Ranking Member Lamborn and Members of 
the Subcommittee.
    Thank you for holding this important hearing on the state of 
Veterans Benefits Administration. I am pleased to provide this 
testimony on behalf of the Veterans Law Section of the Federal Bar 
Association. The FBA is the foremost national association of private 
and government lawyers engaged in the practice of law before the 
Federal courts and federal agencies. Sixteen thousand members belong to 
the Federal Bar Association. The Veterans Law Section of the Federal 
Bar Association is one of a dozen sections within the Association, 
organized by substantive areas of practice. The comments herein are 
exclusively those of the Veterans Law Section and do not necessarily 
reflect the views or official position of the entire Association.
    Numerous written submissions and hours of testimony have sought to 
find a solution to the state into which the Department of Veterans 
Affairs has fallen. The Claims Summit 12 weeks ago and the Hearing 
before this Committee five weeks ago all addressed the same issues--
what has gone wrong and how do we fix it? There are several facts which 
are inescapable. The mounting backlog is out of control. The backlog is 
symptomatic of a process out of control. The operative term is 
``control.'' The Veterans Law Section (VLA) and NOVA met with the 
Transition Team before Secretary Shinseki agreed to assume the 
monumental task of bringing the VA under control. Our two organizations 
stressed that the most important challenge of the Administration was 
gaining control through implementation of vertical accountability.
Vertical Accountability
    Since that time Secretary Shinseki has come on board and vowed to 
break the backlog and to turn the VA into a Veteran-friendly agency. 
There have been numerous studies and audits since that time. Not a 
single one of them has found in a single RO the seeds of perfection. 
Nor have any of them found strong internal lines of accountability that 
run from the Regional Office management level to the Secretary's desk. 
The VBA is the size of a small army. For too many decades it has 
operated as if the colonels were all in charge--each with an individual 
regional command that operates day-to-day as the individual 
circumstances may dictate.
    The regions between the 57 individual offices and that of the 
Secretary seem to be a bureaucratic no-man's land, with numerous 
intermediate positions that at the end of the day are wholly 
accountable to no one but themselves. This clearly must end. Report 
after report documents the fact that individual offices are extremely 
inventive in devising methods for making the figures look good when in 
reality they are not. They also uniformly note the need for greater 
oversight. Oversight begins at the Secretary's desk with the re-
arrangement of the bureaucracy of VA into an organization with a 
strong, vertically accountable chain of command. This, we firmly 
believe, is the greatest challenge. This Secretary, more than any of 
his immediate predecessors, has the leadership skills to meet the 
challenge and at the same time gain the trust he must have from at 
least two communities--the veterans and the VA itself.
Technology Challenges_When will we see a paperless VA?
    Technology and the challenge of transforming the paper-laden 
process of claim adjudication into a smoothly operating system in which 
all information is readily available seem insurmountable. We all heard 
during the Claims Summit and subsequently that while a great many prior 
attempts had been discarded as unworkable, there was great hope for a 
new effort in Baltimore. At the same time a plethora of working 
programs seem to exist for the purpose of tracking cases and quality 
oversight. Apparently they lack the capacity to talk to each other. 
Other organizations and agencies have managed to accomplish the 
transition. The CAVC initiated electronic filing by just doing it by a 
date certain. There were glitches at the beginning, but they were 
worked out. The IRS and Social Security have, in the last few years, 
accomplished this task with systems nearly as vast, but more vertically 
manageable. The Veterans Law Section of the Federal Bar Association 
believes that inasmuch as the VA must begin somewhere, that a pilot 
system should be set up in one office, preferably a smaller office, and 
begin to scan into an expandable, web-based system all claims filed in 
that office and follow through with the development of those claims in 
the same manner. As the information comes in on those claims it would 
be scanned into the system. As the problems are recognized and solved, 
the system can be integrated into another office. The point is, the 
only way to solve the problems posed by the current structure is 
through technology.
Process Management
    The Veterans Law Section continues to urge VBA to change the basic 
way in which the individual offices process claims. The POD project, a 
pilot program at the Little Rock Regional Office and described in the 
Booz Allen Hamilton Report, has not yet been audited for effectiveness 
and improvement. However, in terms of potential for processing the 
numerous complex claims with which the system is now significantly 
over-loaded, it shows the most promise. It is also, because of the 
internal structure, the best candidate for a starting point for digital 
claim processing.
    The POD process should integrate into discrete teams, each with 
representatives from five of the six currently identified ``teams'': 
Pre-determination, Rating, Post-determination, Public contact and 
Appeals. The number of team members from each ``specialty'' should be 
weighted according to workload--number of files with seven or less 
issues as the demarcation point and the relative experience of the team 
members in those specialties. As the individual office acquires added 
personnel, utilizing the team structure would provide opportunity for 
more concentrated OJT and mentoring. The most important aspect of this 
modality is the inculcation of ``ownership'' of the individual claim. 
There is less opportunity for inadequate records requests and medical 
VAEs. When questions arise, communication with the individual veteran, 
attorney or representative is encouraged. Interaction among team 
members should also improve employee morale, and ``humanize'' the 
veteran by providing him/her with an identity.
    VLS suggests as another variable the assignment claim development 
by issue areas specific to some identifiable types of claims. VAOIG 
inspections of several Regional Offices, reported from November 2009--
March 2010, identified multiple challenges in providing timely, 
accurate rating decisions, among which were consistent difficulties 
with PTSD, herbicide exposure and TBI. Establishing medically 
specialized teams to process claims related to these issues within the 
POD modality, rather than turning them into brokered files, makes 
sense. These are disabilities that usually involve several body 
systems. The medicine is complex and daunting, with distinct training 
issues. Providing concentrated instruction in areas in which there are 
inherently complex medical issues would decrease processing time by 
training triage members of each team to recognize the issue and hand 
the file off immediately to the specialty team, and thus putting it 
quickly into the proper queues.
    Similarly, the knowledge level in the medical specialty triage and 
pre-development team members would enhance the probability of 
recognizing those claims in which the reports and medical history 
submitted with the claim render it ready to rate or nearly so. To this 
end, VLS renews the encouragement of a treating physician rule. 
Regardless of whether treatment has been by VHA or private providers, 
nexus opinions and questions of the level of disability/extent of 
impairment should be addressed to those providers. The concept that a 
VHA physician is incompetent to provide a nexus opinion because the 
treating physician is inherently biased is inherently absurd. There is 
eminently more reliable information to be gained from the provider who 
has spent considerable time treating the veteran and to whom a digital 
copy of the c-file has been made available than from a contractor or 
VHA personnel who may or may not have actually seen the file and who 
spends at best 30 minutes (and usually only 10-15 minutes) with the 
veteran.
    Medical VAE requests would be properly generated with the 
appropriate questions sent to the provider, including designation of 
the professional level of knowledge required for an adequate exam. This 
would require improved communication between VBA and VHA managers to 
provide for the appropriate expertise as well as timeliness of the 
exams. (The DVA-OIG Audit of VA's Efforts To Provide Timely 
Compensation and Pension Medical Examinations, March 17, 2010, 
determined that ``VA has not established procedures to identify and 
monitor resources needed to conduct C&P medical exams and to ensure 
resources are appropriately planned for, allocated and strategically 
placed to meet the demand.'') Concurrently with improved coordination 
should be the elimination of such practices as assigning complex 
neurology or oncology issues to nurse practitioners.
    VLS continues to encourage VBA to enhance the position of Decision 
Review Officer as immediate supervisory personnel over the Claim 
Processing Teams within the POD structure. The DRO program was 
initially designed to limit the number of appeals to the Board by 
resolving the issues at the RO appeals level. Built into the program 
was the opportunity for hearing, paper review and/or dialogue with the 
veteran or representative. The process is susceptible to an expanded 
role. Each DRO, tested and certified to the position would then 
exercise quality review over the decisions rendered by the teams 
assigned to him for adequacy of development, as well as accuracy of the 
decisions. The DRO would provide mentoring for the RSVRs as part of the 
quality review. A cogent, intelligible rating decision should issue 
that clearly and straightforwardly sets out the issue, the reason for 
the decision and the options available to the veteran. Should the 
decision result in an NOD, the right to DRO review and a hearing should 
be clearly stated, as well as the instructions for filing a Form 9 and 
Substantive Appeal. (VLS continues to urge that the SOC be eliminated).
Training Issues
    The statistics from the Board and the CAVC give a strong indication 
that there are and will continue to be serious training issues in both 
the rating and appeals process. CAVC routinely remands 70-80 percent of 
the cases coming before it. Another 5 percent are reversed and then 
remanded. The Court agrees with the Board only 20-25 percent of the 
time, according to Judge Kasold's testimony of May 2009. In a system in 
which the Board has claimed an accuracy rate of in excess of 90 
percent, there is clearly a disconnect. Similarly, the Board, in FY 
2009 either remanded or allowed 61 percent of the 48,800 appeals in 
which they made decisions, thus finding that the Regional Office 
decision was correct in only 39 percent of the cases. This level of 
error is strongly suggestive of serious training deficiencies from the 
Benefits Academy to the continuing education which every rating 
employee is required to receive annually.
    VLS encourages VBA to re-examine the curriculum and the 
qualifications of the instructors at the Academy, with the result that 
specific protocols be in place for appointment as an instructor. We 
also urge that advances in adult education methodology and recruitment 
of experts and consultants external to VA be utilized. The statistics 
indicate that the instructional and training entities have become 
cocooned, such that too often errors are repeated through instruction. 
The Academy should be the focal point and resource for all instruction 
agency-wide with a Director directly accountable to VBA management.
    A complex array of disabilities affect the veteran population 
residual from Vietnam, the Gulf War, and OIF/OEF. Rating employees have 
expressed the need for instruction in TBIs, and a significant error 
rate has been found with PTSD and herbicide exposure. VBA must ensure 
that the medical instruction blocs meet the needs of the demographics 
of the veteran population. The medical issues of exposure to toxins 
from the Gulf War to the burn pits in Iraq must be included as these 
affect multiple body systems.
    VLS also recommends that the POD modality also include a full-time 
training coordinator in each Regional Office who monitors on site the 
training needs and requirements, sets a curriculum consistent with 
those universal to the agency, and ensures that instruction and Q&A are 
available to the individual employee. Additionally, on-site proficiency 
testing is then available for VSRs ready for promotion to RVSRs and 
RVSRs aspiring to the position of DRO. (The exam certifying the DRO 
should equate with the Agent's exam and re-certification should be 
required bi-annually to ensure currency with case law and regulatory 
changes.) On-site training should also include training in medical 
issues.
Attorney Representation
    VLS continues to urge legislative amendment of 38 U.S.C. Sect. 
5904(c) to expand the availability of fee based representation to 
veterans filing the initial claim with VA. We must remember that when 
the original fee limitation was imposed, the veteran was in nearly all 
instances marginally educated and lawyers were generally looked upon 
with disfavor. There was little licensing and few restrictions on 
practice or ethics. Even with WWII the average veteran was part of an 
agrarian demographic. The issue of attorney representation was not 
addressed The regulations governing fee-based practice before the 
agency are the most restrictive of any federal agency. Regardless of 
extensive self regulation and state and federal court rules of ethics 
and conduct, VA continues to regard attorneys with unwarranted 
mistrust.
    The demographic has changed. Today's veteran has fought a highly 
technological war. This is the best educated army in history. Men and 
women who have fought and survived the significant horrors of today's 
battlefield deserve the dignity of determining for themselves whether 
they wish to represent themselves, be represented by an organizational 
VSO or retain professional counsel. This generation of veterans, like 
the Vietnam veterans before them, has founded their own veterans' 
organizations to address the issues inherent in the conflicts they 
experienced. Just as the Vietnam veterans, they support fee-based 
representation before the Agency beginning at the point at which the 
claim is filed.
    The most recent annual report of the Chairman of the Board of 
Veterans' Appeals demonstrates the value of attorney representation to 
veterans, their families and survivors. The enactment of the Veterans 
Benefits, Health Care, and Information Technology Act of 2006, P.L. 
109-461, for the first time imparted to veterans the right to retain 
counsel should they wish to do so. In FY 2009, those claimants who had 
attorney representation at the BVA received a larger percentage of 
favorable results than did those without attorney representation and a 
larger percentage of favorable results than did those who were 
represented by VSOs.

----------------------------------------------------------------------------------------------------------------
                                                     FY 2009
-----------------------------------------------------------------------------------------------------------------
                                                            Allowed            Remanded        Positive Outcome
----------------------------------------------------------------------------------------------------------------
                   Representation                        No.        %        No.        %        No.        %
----------------------------------------------------------------------------------------------------------------
VSO's Overall                                             7,688     24.8     11,714     37.8     19,402     62.6
----------------------------------------------------------------------------------------------------------------
American Legion                                           2,100     23.5      3,469     38.8      5,569     62.3
----------------------------------------------------------------------------------------------------------------
Amvets                                                       65     25.6         91     35.8        156     61.4
----------------------------------------------------------------------------------------------------------------
DAV                                                       3,853     25.5      5,607     37.1      9,460     62.6
----------------------------------------------------------------------------------------------------------------
MOPH                                                        179     31.7        191     33.8        370     65.4
----------------------------------------------------------------------------------------------------------------
PVA                                                         118     28.7        156     38.0        274     66.6
----------------------------------------------------------------------------------------------------------------
VFW                                                       1,138     24.2      1,746     37.2      2,884     61.3
----------------------------------------------------------------------------------------------------------------
VVA                                                         235     23.8        454     46.0        689     69.8
----------------------------------------------------------------------------------------------------------------
State Svs. Org                                            1,975     24.1      2,802     34.2      4,777     58.3
----------------------------------------------------------------------------------------------------------------
Attorney                                                    853     22.7      1,743     46.4      2,596     69.0
----------------------------------------------------------------------------------------------------------------
Agents                                                       21     23.1         32     35.2         53     58.2
----------------------------------------------------------------------------------------------------------------
Other Rep                                                   304     28.1        357     33.1        661     61.2
----------------------------------------------------------------------------------------------------------------
No Rep                                                      886     18.7      1,554     32.9      2,440     51.6
----------------------------------------------------------------------------------------------------------------
Total                                                    11,727     24.0     18,202     37.3     29,929     61.3
----------------------------------------------------------------------------------------------------------------

    The Veterans Law Section strongly supports the repeal of the 
restriction on attorney representation. We further support the 
rejection by this Committee of the proposed legislation which the VA 
drafted and titled the ``Veterans Benefits Programs Improvement Act of 
2010.'' The proposed legislation is antithetical not only to according 
veterans the right to attorney representation in filing their claims 
for compensation, but also to any meaningful review of Agency decisions 
regarding those claims. Section 207 of the proposed legislation 
significantly limits the application of the Equal Access to Justice Act 
(``EAJA'') fees by limiting the veteran's payment of EAJA fees. Upon 
issuance of a CAVC decision remanding the case back to the Agency, and 
determination of the appellant to be the prevailing party with a 
substantially justified legal position, the appellant under this 
provision, would not receive the awarded fee. Only if the remand 
results, either before the Board or the RO in an ultimate award of 
monetary or other benefits would the EAJA fees ultimately be 
forthcoming. The Veterans Law Section submits that this provision will 
substantially limit attorney representation before the Court. 
Consequently this provision requires the closest scrutiny by both 
Congressional chambers.
    VLS does not support other provisions of the Secretary's proposed 
legislation, including the imposition in Sections 202 and 203 of 
jurisdictional time limits on appeals within the Agency. This is a 
somewhat cynical effort to eradicate the backlog by making it extremely 
difficult for a generation of veterans to perfect their claims and meet 
shortened filing deadlines--when over half of them are diagnosed with 
TBIs, PTSD or other mental disorder, all of which impair the ability to 
organize and respond to deadlines. Neither does VLS support the 
proposal in Section 206 that the Board no longer be required to render 
decisions in which factual determinations are supported by adequate 
reasons and bases, but such determination must only be ``plausible.''
    In conclusion, the Veterans Law Section thanks the Committee for 
the opportunity to share our views on some of the issues facing the VA 
and our veterans. We must take whatever measures are necessary to make 
whole the men and women who have put their lives on the line in order 
that we may have the luxury of this discussion. We owe them not only 
treatment of wounds seen and unseen but as much restoration of their 
quality of life as is humanly possible. With now over a million pending 
claims, it matters not who represents whom, or on whose shoulders the 
blame properly lies. The job must be done, and rather than ensure that 
each recommendation for revision or reform is nibbled into oblivion by 
the ducks of turf protection, it is time to recognize, as the cartoon 
strip character Pogo once did, that we have met the enemy and he is us.
    Thank you for the opportunity to present these views on behalf of 
the Veterans Law Section of the Federal Bar Association. I will be 
happy to respond to any questions you may have.

                                 
    Prepared Statement of Joseph A. Violante, National Legislative 
                  Director, Disabled American Veterans

    Mr. Chairman and Members of the Subcommittee:

    Thank you for holding today's important hearing on the State of the 
Veterans Benefits Administration (VBA) and for inviting me to provide 
testimony to the Subcommittee on behalf of the Disabled American 
Veterans (DAV). VBA provides an array of benefits to veterans, 
particularly disabled veterans, including disability compensation and 
pensions, vocational rehabilitation, education assistance, home loans, 
and insurance programs. DAV has comprehensive recommendations on how to 
improve all of these programs that can be found in our legislative 
agenda as well as in The Independent Budget, and we commend both of 
those publications to the Subcommittee.
    Our legislative priorities for the 111th Congress include the full 
phase-in of concurrent receipt, elimination of the SBP/DIC offset, and 
increases in the home and auto adaptive grant programs. We also believe 
that Congress and VBA must address the inequity that exists for 
disabled veterans receiving vocational rehabilitation benefits under 
Chapter 31 compared to the new education benefits created by the Post-
9/11 GI Bill under Chapter 33. We recommend that Congress authorize 
Vocational Rehabilitation (Chapter 31) participants to have dual 
eligibility so that they can receive the higher subsistence allowance 
offered under the Post-9/11 GI Bill (Chapter 33). This would prevent 
veterans from having to choose between a program that provides a 
greater financial benefit and one that focuses on their rehabilitation 
as they seek to support themselves and their families.
    However, for today's hearing focused on the State of the VBA, I 
would like to focus on their largest and most significant program: 
veterans disability compensation. For disabled veterans, receiving a 
timely and proper disability rating is the gateway to all of the VBA 
benefits to which they are entitled. As such, the problems that have 
plagued and continue to plague VBA in efficiently administering this 
program have correctly received the most attention from Congress and 
VSOs in recent years. In fact, this is the sixth Subcommittee hearing 
this year examining VBA's claims processing system and I want to 
applaud you for your continued vigilance on behalf of American's 3 
million disabled veterans, their families and survivors.
    A core mission of VBA is the provision of benefits to relieve the 
economic effects of injury, disease, or disability upon veterans and 
their families. For those benefits to effectively fulfill their 
intended purpose, VBA must promptly deliver them to veterans. The 
ability of disabled veterans to provide for themselves and their 
families often depends on these benefits. The need for benefits among 
disabled veterans and their dependents is usually urgent. While 
awaiting action by VBA, they and their families suffer hardships; 
protracted delays can lead to deprivation, bankruptcies, and 
homelessness. Disability benefits are critical, and providing for 
disabled veterans should always be a top priority of the government.
    VBA can promptly deliver benefits to entitled veterans only if it 
can process and adjudicate claims in a timely and accurate fashion. 
However, VBA has been unable to meet its claims workload or correct 
systemic deficiencies.
    Mr. Chairman, as you are acutely aware, thousands of disabled 
veterans today face unacceptable delays and unjustified denials of 
their applications for VA benefits, particularly disability 
compensation. As of June 5, 2010, there were 546,387 pending claims for 
disability compensation and pensions awaiting rating decisions by the 
VBA; 198,891 (35.9 percent) of the claims exceeded VBA's 125-day 
strategic goal.
    Worse, by VBA's own measurement the accuracy of disability 
compensation rating decisions for the 12-month period ending in March 
2010 was just 83 percent, continuing a downward trend for the past 
several years. What these statistics confirm is what DAV and others 
have known for some time: the process for approving veterans claims for 
disability compensation is broken. As a result, too many disabled 
veterans today are waiting too long for rating decisions that are too 
often wrong.
    However, despite the current problems at VBA, there are reasons to 
be optimistic about its chances for improvement. Over the past 6 
months, with mounting pressure from DAV and other veterans service 
organizations, there has been a welcome increase in attention from 
Congress and the Administration to these problems. Both VA and VBA 
leadership have been refreshingly forthcoming in acknowledging 
longstanding problems, and have provided candid assessments to this 
Subcommittee as well as the full Committee in other forums.
    These new attitudes by VBA, as well as a recent flurry of 
activities aimed at transforming the claims processing system are 
encouraging signs. We are pleased that Secretary Shinseki has made 
reform of the claims processing system a top priority, as evidenced by 
his oft-repeated goal of ``breaking the back of the backlog this 
year.'' We would, however, provide a caution and a caveat to this 
seemingly laudable goal.
    Mr. Chairman, like you, DAV remains frustrated by the large and 
growing backlog, or claims inventory as VBA calls it, and especially by 
their inability to bring it under control. However, it is essential to 
remember that the backlog is not the problem, nor is it the cause of 
the problem; rather it is a symptom, albeit a very serious one. It is 
analogous to a person with a very high fever; they may take aspirin to 
reduce the fever, but unless the underlying cause for the fever is 
addressed, the fever can return, increase and the patient's condition 
may worsen.
    For VBA, if leadership, management and employee incentives remain 
focused first and foremost on reducing the backlog, they may well 
achieve a smaller backlog, but that does not necessarily translate into 
veterans being better served. After all, adjudicating more benefit 
claims more quickly does not guarantee that veterans get the benefits 
they have earned through their service and sacrifice. More bad rating 
decisions done more quickly may lower the backlog--at least for a 
time--but that is certainly not reform or progress.
    To truly reform and transform the system, VBA must remain focused 
on the underlying problems causing the backlog: a lack of quality, 
accuracy and consistency in how VBA develops and adjudicates claims for 
benefits. So, whenever we hear the word ``backlog,'' or talk about 
``reducing the backlog,'' we want to first hear the words quality, 
accuracy and consistency.
    For these reasons, DAV has been working with a growing coalition of 
veterans and military organizations to build consensus on how best to 
reform the claims processing system, not just reduce the backlog. One 
of our first goals is redefining success from ``Reducing the Backlog'' 
to ``Getting It Done Right the First Time.'' We are confident that a 
system focused on quality, accuracy and consistency first, if properly 
built upon a modern IT infrastructure with optimized business 
processes, will lead to faster processing times and a lasting reduction 
and elimination of the backlog as a result.
    With that as our goal, we want to recognize the efforts that VBA 
has underway this year which include over three dozen initiatives 
designed to transform the claims processing system from today's archaic 
paper-based system to a modern, IT-centric process. As I said earlier, 
we are pleased that VBA has recognized the seriousness of the problems 
and reached out to the VSO community to inform us of their efforts and 
seek our input and support. We believe that VBA is headed down the 
right path; however, we remain concerned about whether they will get to 
the end without effective leadership and proper oversight by Congress.
    Unfortunately, today- nearly 1\1/2\ years into this 
Administration--there is still no Under Secretary for Benefits in 
place, or even nominated. No large organization can be expected to 
operate at peak efficiency, much less dramatically transform itself, 
without a chief executive in place to lead that change. The time is 
long overdue for a new Under Secretary to be named and we call on the 
Administration to swiftly do just that. VBA must also complete other 
pending management changes so that they have a permanent leadership 
team to provide stability as they modernize and optimize the claims 
processing system.
    Mr. Chairman, with 1.2 million members, all of whom are wartime 
disabled veterans, DAV is deeply invested in helping VBA succeed in 
reforming their system for evaluating and approving claims for 
disability compensation and other veterans benefits. Last year, our 240 
National Service Officers and 34 Transition Service Officers 
represented 250,000 veterans and their families--free of charge--in 
their claims for VA benefits, helping them receive $4.5 billion in new 
and retroactive benefits to which they were entitled under the law. 
Other VSOs provide similar services to hundreds of thousands more 
veterans, their families and survivors.
    I say all this so that the Subcommittee understands that VSOs are 
more than just knowledgeable and interested observers in the benefit 
claims process, we are an active and integral component of the system 
itself. So while we applaud VBA for their new openness and outreach to 
the VSO community, we are becoming increasingly concerned that they are 
not fully integrating us into their reform efforts from the beginning.
    Over the past year, VBA has launched dozens of new pilot programs 
at regional offices around the country. In most cases, the pilots were 
developed without any input from VSOs, either nationally or locally. 
This is a mistake for a number of reasons: not only do we bring vast 
experience and expertise about claims processing, but our local and 
national VSO service officers hold power of attorney (POA) for hundreds 
of thousands of veterans and their families. Moreover, we make VBA's 
job easier by helping veterans prepare and submit better claims, 
thereby requiring less time for VBA employees to develop and adjudicate 
the claims. We would urge VBA to integrate us into their planning for 
new initiatives and pilots from the beginning so that we can work 
together to reform this system for the benefit of all veterans.
    VBA currently has three dozen initiatives underway to help them 
modernize the claims approval process. Several of them, such as the 
pilots in Little Rock and Providence, as well as the Fully Developed 
Claim and Individual Claimant Checklist were Congressionally mandated 
in Public Law 110-389. Others, such as the Quick Pay Disabilities pilot 
in St. Petersburg, the Rapid Evaluation of Veterans' Claims pilot in 
Atlanta and the Case Management pilot in Pittsburgh were initiated by 
VBA regional offices with central office approval. VBA's Innovation 
Initiative also produced 10 winners developed and submitted from 
regional offices, eight of which are actively being implemented. There 
are also eight ``quick hit'' ideas that were developed at a Regional 
Directors Workshop this spring, including pilots testing phone 
development and a walk-in claims rating program. Many other ideas that 
DAV and others have been promoting, including the increased use of 
private medical evidence and interim ratings, are also currently being 
tested in the field.
    Although we believe that VBA is moving in the right direction, we 
do have concerns about how all of this experimentation will come 
together to optimize VBA's claims processing system. It is not enough 
just to test ideas through pilot programs or studies; there must be a 
coherent and coordinated plan to evaluate and integrate the results of 
all this experimentation. We urge this Subcommittee to maintain the 
aggressive oversight demonstrated throughout this Congress, and would 
offer a few comments on a couple of these programs.
    In the past month, VBA rolled out the Fully Developed Claim (FDC) 
program nationally. DAV has long advocated for exactly this type of 
program to eliminate time and resource-wasting over development. 
However, the recent directives implementing this program nationally 
require a couple of modifications to fully protect the rights of 
veterans. Under the normal claim processing system, a veteran can file 
an informal claim in order to protect the effective date for which they 
may be entitled to disability compensation; they are then provided up 
to 12 months to complete the application. However, if a veteran chooses 
to submit a claim under the FDC program, there is no mechanism to allow 
them to submit such an informal claim. As such, veterans would 
effectively lose the compensation due to them during the time they 
spent assembling their claim, forcing them to choose between a quicker 
decision under FDC or an earlier effective date under the regular 
process. This in turn would likely create a disincentive for filing 
claims under the FDC program, increasing VBA's workload. We have 
discussed this issue with VBA and Congressman Joe Donnelly and urge the 
Subcommittee to work with them to allow veterans to file informal 
claims protecting their effective dates in the FDC program.
    Another issue of concern in the FDC program relates to the waiver 
veterans must sign to allow VBA to move forward in processing their 
claim without having to send VCAA (``Veterans Claims Assistance Act'') 
notification letters. If VBA later determines that the claim filed as 
``fully developed'' no longer meets that criteria, they can exclude it 
from the FDC program and move it back into the regular claims 
processing queue. However, under the rules sent out by VBA, they would 
not then have a duty to then notify veterans of that change, nor inform 
them of their VCAA rights. While it make sense for veterans to waive 
VBA's requirement to perform some VCAA duties in exchange for quicker 
decisions under the FDC program, if the veteran no longer benefits from 
participation in that program, it is only logical that their full VCAA 
rights be restored.
    I would also like to share a concern about the implementation of 
the pilot program creating standardized templates for private medical 
evidence underway at the Pittsburgh RO. DAV strongly supports this 
initiative and believes it can play a significant role in helping to 
eliminate unnecessary and duplicative VHA exams, which result in the 
loss of time and resources for both VBA and veterans. VBA has 
historically taken a dim view of private medical evidence due to the 
possibility of fraud. While no one can provide a 100 percent guarantee 
against the possibility that some doctors, or even some veterans, may 
seek to submit falsified private medical evidence, that must not result 
in unnecessary obstacles to the receipt and use of private medical 
evidence in making rating decisions. Just as in any other application 
or submission to VA, or to any government agency, there exist methods 
to detect and punish such fraud. As they implement the private medical 
template pilot program in Pittsburgh, we encourage VBA to take a 
reasonable approach for receiving, accepting and evaluating private 
medical evidence without creating restrictive rules to unrealistically 
eliminate any possibility of fraud.
    In another new initiative, VBA is seeking to expand and encourage 
the use of its existing authority to assign interim ratings when there 
is sufficient evidence to establish a compensable service-connected 
condition for one or more contentions. The expanded use of interim 
ratings will more quickly provide many service-disabled veterans with 
financial support and access to VA health care and other benefits, 
while allowing further development of any remaining contentions in the 
normal development and adjudication process. DAV and other VSOs fully 
support this initiative and urge the Subcommittee to do all it can to 
encourage VBA to move in this direction.
    Perhaps most important to VBA's reform and modernization is the 
ongoing development of several new IT systems--particularly the 
Veterans Benefits Management System (VBMS) and the Veterans 
Relationship Manager (VRM) to manage work flow and provide greater 
access to veterans and VSOs. Over the past 6 months, VBA has 
accelerated the development of the VBMS, and just completed prototype 
development of what was called the Virtual Regional Office (VRO) 
located in Baltimore.
    While VBA provided several briefings to DAV and other VSOs on these 
IT programs, we are concerned that they have not sufficiently sought 
our input nor considered the role of our service officers during the 
development of the VBMS system. When they first unveiled their plans 
for the VBMS, we were assured that service organizations and service 
officers would be involved in helping to develop this system. 
Regrettably, despite these assurances and public invitations to observe 
and participate in the VRO phase of the VBMS development, the VRO in 
Baltimore was completed without any VSO observation, participation or 
input.
    VBA has since reached out to DAV and several other VSOs to report 
on their progress and solicit out comments and we appreciate this 
opportunity. However, it is imperative that input from VSOs is 
regularly and comprehensively integrated into the further development 
of the VBMS, as well as the VRM. As stated earlier, we not only have 
relevant expertise and perspectives that will benefit the development 
of these IT systems, we are also direct participants in the claims 
processing system and must be integrated into their planning. We would 
encourage VBA to develop regular and ongoing roles for VSO 
participation and input into future VBMS development.
    DAV is also concerned that in the rush to meet self-imposed, 
aggressive deadlines for piloting and rolling out the VBMS, VBA could 
end up with an insufficiently robust IT infrastructure. Despite the 
fact that a modern, paperless claims processing system is at least a 
decade overdue at VBA, it remains just as imperative today that they 
``get this done right the first time.'' For example, in recent 
discussions with VBA officials, we were told that rules-based decision 
support will not be a core component in developing the VBMS system, but 
that it will be a component to be added-on later, perhaps years later 
after the full national rollout. It has long been assumed by DAV and 
many others that the VBMS would be designed to take maximum advantage 
of the artificial intelligence offered by modern IT in order to provide 
decision support to VBA's claims adjudicators. We would urge this 
Subcommittee to further and fully explore this issue with VBA and 
suggest that it might be helpful to have an independent, outside, 
expert review of the VBMS system while it is still early in the 
development phase.
    We are also concerned about how VBA intends to handle legacy paper 
claims within the new VBMS environment. While VBA is committed to going 
all-paperless for every new claim submitted once the VBMS is up and 
running, it is not yet clear whether they also intend to convert all 
re-opened claims to paperless, digital files. DAV would be concerned if 
VBA were to develop a separate legacy system, and thus create two 
claims processing systems: one that is paperless for new claims and one 
using paper C-files for legacy claims. Given the volume of re-opened 
and appealed claims each year, VBA can expect legacy files to be re-
opened for decades to come. Would VBA employees have to learn and 
master two claims processing systems: one that is paperless and the 
other at least partially paper-based? Wouldn't this be detrimental to 
quality, accuracy and consistency? We would urge this Subcommittee to 
ensure that VBA builds the VBMS as an all-paperless program. The VBMS 
system must include as a core capacity the ability to convert all 
legacy claims to the new digital environment at its rollout.
    Finally, we remain concerned about whether the VBMS development is 
being driven primarily to speed processing or to ensure quality and 
accurate decisions. As we mentioned above, rules-based decision support 
is a key component of quality control. In addition, the VBMS must have 
comprehensive quality control built in, as well as sufficient business 
practices established, to ensure that there is real-time, in-process 
quality control, robust data collection and analysis and continuous 
process improvements. We urge this Subcommittee and Congress to 
continue providing VBA with sufficient resources as well as sufficient 
time to get this job done right, not just quickly.
    Mr. Chairman, in assessing the ``State of the VBA,'' we want to 
properly recognize the important steps they have been taken over the 
past year. VBA's new openness is encouraging; their candid assessment 
of the problems they face is refreshing; and their commitment to 
exploring new solutions is commendable. However, even with this 
promising start, much work remains to turn this promise into results.
    VBA has established an aggressive strategy and schedule for 
reforming the benefits claims processing system. In order to achieve 
lasting success, VA must first and foremost focus on quality and 
accuracy ahead of simply reducing the backlog. VBA must modernize their 
IT infrastructure and optimize business processes, which will require 
strong and effective leadership, something they cannot fully realize 
until there is a new Under Secretary in place. Finally, we firmly 
believe that VBA cannot be completely successful unless they truly seek 
and realize a mutually beneficial partnership with the VSO community.
    Mr. Chairman, we want to commend you and this Subcommittee for all 
that you have done to help reform VBA and the claims processing system. 
It will take your continued leadership over the next several years to 
ensure that the many promising initiatives underway finally result in a 
modern, transparent and effective system for delivering benefits to 
veterans in a timely manner.
    Thank you again for the opportunity to present DAV's testimony 
today and I would be pleased to answer any questions that the 
Subcommittee may have.

                                 
       Prepared Statement of Ian C. de Planque, Deputy Director,
    Veterans Affairs and Rehabilitation Commission, American Legion

    Mr. Chairman and Members of the Subcommittee:

    I appreciate this opportunity to express the views of the nearly 3 
million members of The American Legion on the current state of the 
Veterans Benefits Administration (VBA) of the Department of Veterans 
Affairs (VA). VBA stands at a crossroads in the transition from the 
20th century paper system of benefits and the 21st century electronic 
environment. This transformation occurs in the midst of a difficult 
environment, yet VA must maintain operations through this period 
without letting veterans slip through the cracks. The country is 
presently engaged in wartime operations in the Middle East and South-
Central Asia, and the after effects of these wars, as well as previous 
wars, are still being felt by great numbers of veterans. VBA has, to be 
fair, made many strides forward in recent history, but there are still 
many areas that must be addressed. Simply changing the tools without 
correction of longstanding institutional issues cannot be construed as 
effective. VA must continue to work to erase the errors of the past if 
a new model more beneficial to the men and women who have served this 
Nation is to be achieved.
    It is easy to note the areas in which VBA has been deficient not 
merely over the last few years, but as an institution for long periods 
of their operation. Many of these complaints are not new, but have been 
the focus of those devoted to advancing the cause of veterans' benefits 
for decades. VBA struggles with the quality of work and timeliness, not 
only in the adjudication of claims but also in the implementation of 
internal regulatory changes and those directed by Congress. 
Additionally, accuracy of the work produced suffers under the pressure 
to move the high volume of claims. Criticism has been justly leveled at 
VBA, and they have struggled to produce satisfactory answers. There are 
clearly areas for improvement.
    Secretary Shinseki has stated an admirable yet challenging goal for 
VA to achieve timeliness of no more than 125 days for any initial claim 
as well as an accuracy rating of 98 percent for those claims processed. 
This is no easy task, and VA must be mindful of the challenges faced in 
achieving such a task. VBA must address these factors if they are truly 
going to be able to meet these goals by the stated deadline of 2015.
QUALITY OF WORK
    On March 12, 2009 the VA's Office of the Inspector General (VAOIG) 
issued a report (Report No. 08-02073-96) entitled ``Audit of Veterans 
Benefits Administration Compensation Rating Accuracy and Consistency 
Reviews''. This report detailed numerous flaws in the current 
implementation of VA's internal STAR system of quality review and 
offered some key criticisms.
    Some of the more troubling findings included:

          VBA's STAR process did not effectively identify and report 
        errors in compensation claim rating decisions. VBA identified a 
        national compensation claim rating accuracy of 87 percent for 
        the 12-month period ending February 2008. We projected that VBA 
        officials understated the error rate by about 10 percent, which 
        equates to approximately 88,000 additional claims where 
        veterans' monthly benefits may be incorrect. In total, we 
        projected about 77 percent (approximately 679,000) of the 
        almost 882,000 claims completed were accurate for the 12-month 
        period ending February 2008. The 87 percent rate is not 
        comparable to the accuracy rate VBA reports in the Performance 
        and Accountability Report because that rate includes pension 
        claims. Further, this accuracy rate only included errors that 
        affected a veteran's benefits. STAR identifies, but does not 
        report, other errors related to the rating decision's 
        documentation, notification, and administration.

    To reiterate American Legion testimony on these findings, 203,000 
potentially incorrect claims is a troubling number. Further troubling 
is the inaccuracy of VA's system at reporting its own errors. Without 
external observation, such as this audit by VAOIG, such errors may 
never have come to light, and an accurate picture of the overall flaws 
in the disability system may never have been recorded.
    Furthermore:

          VBA officials planned to conduct 22 reviews in FY 2008 
        consisting of 20 grant/denial rate and 2 evaluation reviews. 
        However, they only initiated two grant/denial rate reviews and 
        these were not completed until December 2008. Furthermore, VBA 
        officials did not initiate either of the two planned evaluation 
        reviews to analyze and improve the consistency of disability 
        compensation ratings and to reduce the variances between 
        states.

    Even where problem areas or the potential for problem areas to 
develop are identified, VA is not following up on their own projected 
plans for analysis. Regardless of the potential of STAR, if it is not 
implemented as intended, it cannot hope to be an effective tool for 
correction. The exertion of outside pressure would seem essential to 
enforcing the application of the procedures in place.
    VAOIG concluded:

          Without an effective and reliable quality assurance program, 
        VBA leadership cannot adequately monitor performance to make 
        necessary program improvements and ensure veterans receive 
        accurate ratings. Further, without implementing an effective 
        rating consistency program, VBA officials cannot successfully 
        assess or prioritize the improvements needed for claim rating 
        consistency.

    In order to rectify the problems existing within STAR, The American 
Legion proposed that VA could make improvements by implementing a three 
step process for change.

    1.  Develop a system to compile the results nationwide of the 
errors found in STAR evaluations. When an error is discovered a record 
must be kept of that error. However, currently, there appears to be no 
systematic method to track these errors. This data could be critical to 
finding patterns, whether on an individual, on a Regional Office (RO) 
level, or nationally across the scope of VA operations. If this 
information is indeed gathered, it does not appear to be used in any 
fashion for analysis to detect trends which could indicate larger, 
systemic problems within VA. If this is coupled with data gathered on 
errors at the lower levels from the Board of Veterans Appeals (BVA) and 
the Appeals Management Center (AMC), VA would be in possession of an 
excellent tool to assess their quality overall with real details that 
would indicate the greatest problem areas.
           It is not enough to know what VA's accuracy rate is across 
the system. VA must also know where their greatest areas of concern are 
in order to determine the areas that could be addressed to provide the 
most efficient and effective use of resources to correct those 
problems.
    2.  Utilize the data and patterns gathered from the compilation 
system mentioned above to plan and implement a program of training. 
Adequate and effective training has been a key concern noted often in 
the system of VA adjudication of claims. This data would give the VA 
the tool they need to see where their employees need training most, and 
to craft an effective training schedule to maximize the training 
resources they have. Future training would not be generalized and rote 
as is currently the case, but would instead be targeted to fix the 
greatest problems. This would be a method to ensure that what training 
resources VA has would be used to the greatest possible effect.
    3.  Augment the STAR system for accuracy with outside oversight to 
ensure the effectiveness of the program. As mentioned above, one of the 
complaints about the current implementation of the system is a lack of 
means to determine if the errors highlighted have been followed up. 
Third party oversight offers the opportunity to provide impartial and 
critical follow up to ensure compliance. External oversight has long 
been an important component that The American Legion has advocated.

    The American Legion continues to advocate for the compilation of 
common errors from BVA and AMC remands and grants in the past. If 
errors are consistently made in the Regional Offices only to be 
corrected by VA later in the benefits process without feedback to the 
Regional Office, they will continue at the regional level where the 
initial errors are being made. This concept also applies to the 
systemic review nationwide of claims by STAR. If the error reporting of 
all three entities is combined, it would constitute an even more 
effective pool of data on deficient areas to enhance VA's understanding 
of their own inadequacies.
    If VBA is to achieve the secondary goal of Secretary Shinseki's 
bold vision for VA, that of 98 percent accuracy, it must start with 
dedicated oversight and diligent analysis of existing patterns of 
error.
TIMELINESS OF VA
    VBA struggles not only with reaching timeliness goals on their 
claims, but also with achieving timeliness on tasks such as mandated 
progress reports and the implementation of new regulations.
    The stated goal of 125 days for the completion of claims is an 
onerous task. The current average for the completion of new claims 
within VA stands at over 160 days. It is important to be mindful that 
this is not the top end of claims completion, but strictly an average 
time for processing. While improving their timeliness, VBA must ensure 
that in their haste to process these claims, they are not missing 
necessary details that contribute to an overall error rate estimated by 
VAOIG at nearly one quarter of all claims processed. The error rate on 
American Legion represented claims in Regional Offices is even higher. 
During Quality Review visits conducted by The American Legion which 
encompass a weeklong review of operations in Regional Offices, VBA's 
error rate often reaches a third of all claims evaluated.
    In short, VBA must aim to not only speed up their work, but make 
that work more accurate and more efficient. Currently, electronic tools 
in development to share records and move claims through processing will 
help with this task. It will be important to ensure that the developed 
electronic tools do not merely repeat the current system of processing 
claims, but take full advantage of the enhancements offered by 
processing in an electronic environment.
    Recent legislation passed by Congress directed VBA to increase the 
usage of measures already present to expedite claims such as the 
ability to grant interim ratings and to grant individual issues as the 
data supports it while deferring issues requiring more necessary 
development to later decisions. This addresses one of the problems 
inherent in the speed of processing. By granting partial amounts of a 
claim, VBA enables veterans to gain immediate access to the excellent 
health care available to treat their service connected disabilities and 
gives them at least partial access to funds to supplement their earning 
power diminished by these disabilities. VBA however, has been slow in 
implementing these types of ratings. It is hoped that the tools 
provided by new electronic measures will make the separation of these 
issues easier on VA and enable these ratings to go forward.
    All of the good intentions of VA and of Congress to improve the 
system for veterans are for naught if the measures are not implemented. 
In testimony regarding the implementation of Public Law 110-389, the 
Veterans' Benefits Improvement Act of 2008, VA acknowledged the many 
areas in which they were behind schedule in addressing needed studies 
and publishing final regulations to implement the changes in laws and 
procedures. Needed details on analysis of the work credit system, and a 
lack of implementation of a regulatory change meant to assist family 
members of a deceased veteran in prosecuting their claim are far behind 
the established deadlines.
    This does not address two glaring areas in which veterans are still 
experiencing substantial delays in the processing of their claims: 
changes to VA policy regarding the confirmation of Posttraumatic Stress 
Disorder (PTSD) stressors; and, the establishment of three new 
presumptive conditions related to the herbicide Agent Orange in 
Vietnam.
    Veterans' groups rightly praised VA for moving forward with a 
regulatory change in the confirmation of stressors for PTSD for 
veterans serving in combat zones. Notwithstanding that The American 
Legion expressed concerns with the proposed regulation's reliance 
solely on VA diagnoses of PTSD as opposed to private physicians because 
diagnoses by private physicians are acceptable for any other disorder 
on the rating schedule. Nevertheless, the overall anticipated impact of 
this regulatory change was lauded as a great step forward in helping 
veterans in need.
    Often one of the most difficult burdens in PTSD cases, on VA and 
veterans alike, is the confirmation of stressor incidents in combat 
zones, where record keeping is spotty at best and clear evidence can be 
difficult to unearth. Existing regulations regarding incidents in 
combat have long recognized the difficulties of keeping track of 
details. VA's proposed regulation will expand that definition for 
stressor incidents to the entire combat zone, which is important as the 
majority of servicemembers in theater do not have traditional combat 
occupations, yet still face many of the same hazards and threats. 
Without specific combat decorations, often unavailable to non-combat 
military occupational specialties, veterans face an uphill battle 
proving that the traumatic events happened.
    It is hard to see how VA can meet the new timeliness goal when VBA 
has to expend more time and resources to decide PTSD claims than almost 
every other type of claim. Development work on cases such as these can 
take many long months and, often enough, after these extensive efforts, 
VA ends up denying many claims that are truly meritorious simply 
because no evidence exists to corroborate the stressful events. The 
proposed regulation would help by greatly reducing unnecessary 
development and allowing VBA to move these cases more quickly to the 
decision phase. Generally, VA is required to publish a final regulation 
within 90 days from the publishing of a proposed regulation, yet many 
months have passed since this deadline and veterans are still waiting. 
VA must move with greater speed to meet the needs of the veterans.
    Perhaps more frustrating is the ongoing delays surrounding VA's 
addition of three new presumptive conditions associated with Agent 
Orange. Under the provisions provided for in the Agent Orange Act of 
1991, Secretary Shinseki announced last October that VA would add three 
new conditions: ischemic heart disease, Parkinson's disease, and B-cell 
leukemias to the presumptive list. Despite lengthy delays waiting for 
even a proposed regulation, in late March the proposed regulation was 
published in the Federal Register along with a notation of a decreased 
period for public comment recognizing the need to move forward with 
this important change. Even so, the normal deadline of 90 days is 
rapidly approaching, and will expire before the end of this month. 
There is little indication that this final regulation will meet this 
deadline, and veterans must once again wait for long denied justice.
    Every day the Legion fields dozens of calls from concerned veterans 
asking what progress is being made on the final implementation of these 
regulations. As must be the case with other veterans' organizations, 
the only answer we can give these veterans is that VA assures us that 
they are working on it, and we must wait and see.
    These delays cost veterans in unseen ways. While it is easy to say 
there will be no net impact as veterans will be ``back paid'' once VA 
finally adjudicates their claims, while they wait for service 
connection, they must also wait for health care for these conditions. 
The effects of heart disease and Parkinson's when untreated can be 
devastating. VA must act to move forward on this and grant these 
deserving veterans their claims with all due haste so they can receive 
the preventive health care they are entitled to. The time for delays 
has long since passed, and this must be a priority for resolution, with 
no more obstacles thrown in the way of these veterans.
AREAS OF PROMISE
    VBA should not be only criticized however. There are areas of 
progress that represent encouragement and hope that veterans are going 
to receive their benefits from a more functional system. Whether it is 
simple, internal changes to help certain Vietnam era Navy veterans by 
establishing a Brown Water Database, or a myriad of pilot programs and 
development of the electronic system for the next generation of claim 
processing, VA is moving forward. Not least of these changes is a 
renewed willingness to work with the front line soldiers in the battle 
for veterans' benefits, the Veterans Service Organizations (VSOs), who 
daily work to obtain deserved benefits for veterans.
    VA currently estimates approximately 38 ongoing pilot programs are 
aimed at understanding and improving operations in the benefits system. 
With so many irons in the fire, oversight and accountability is 
paramount. A tracking system to monitor lessons learned and provide 
transparent analysis of benefits of these pilots is important. 
Furthermore, VA must continue to involve the users of their systems, 
veterans and the service organizations who represent those veterans, in 
the early stages of these programs to identify areas of concern that 
might not otherwise be identified until far too late in the process to 
allow for easy correction.
    In Little Rock, Arkansas, VA ran a pilot examining changes to the 
current CPI model of processing claims. The pilot covered applications 
of Lean Six Sigma techniques from private sector businesses and working 
in team based, pod structures to facilitate better communications up 
and down the chain of claims processing. The American Legion believes 
that when VA workers see only the small, component parts of a claim, 
they lose sight of the whole picture. Without the perspective offered 
by the whole picture, the impact of simple procedural errors can be 
lost and yet with a more complete picture of the entire claims process 
an employee can better see the impact of the necessary actions in the 
claim.
    Indications gleaned from American Legion visits to this pilot were 
positive and we hope that beneficial lessons were learned.
    In Providence, Rhode Island, VBA has been working with a program 
where the office operates in an entirely electronic environment. Rather 
than shuffling through papers and books, the employees have access to 
all the necessary tools and information right on their computers, 
taking advantage of electronic options like enhanced search techniques 
and information sharing. This will be a key component in the operating 
environment VA envisions for their future business model. This is also 
a critical lesson that VA seems to be implementing. It is not enough to 
change the tools and continue to operate under old models. The old 
models carry with them inherent flaws. When new tools such as e-
processing are examined, VA is hopefully utilizing the unique 
capabilities those tools offer in a different manner than the 
traditional paper based models.
    In Pittsburgh, American Legion staff recently returned from an 
examination of several ongoing pilot programs. Chief among these 
programs was the Case Management Development Pilot. This pilot aims to 
improve public contact with the veteran. Communications from VA have 
traditionally been more frustrating than helpful for veterans. The 
Veterans Claims Assistance Act (VCAA) letters have long been noted as 
being nearly incomprehensible. Now, public contact teams from VA follow 
up by phone with veterans to ensure that the veterans understand what 
VA is asking for, and as important, that VA understands what veterans 
are stating and asking for. Putting a personal face on both the VA and 
the veteran is a two way street that helps both sides of the equation.
    VSOs such as The American Legion are eager to help VA with this 
public contact and ensure that the veteran also understands the claims 
from the point of view of an advocate as opposed to a neutral party 
such as VA. Furthermore, service officers of The American Legion and 
other organizations can help share the workload with VA. The ultimate 
goal is to help veterans and when VA and VSOs work in concert with each 
other, there is great benefit that can be provided to veterans. We have 
expressed concerns to VA regarding a greater role that VSOs could play 
in this program in contacting veterans, and we are hopeful that we can 
work to improve that relationship.
    These and other pilots have benefited from close involvement 
between VA and the front line users of the benefits system, the VSOs 
who represent veterans in their claims. With the exception of a recent 
electronic claim processing pilot in Baltimore, VA has worked to 
involve VSOs at an early level in the proceedings of pilots, which 
benefits both sides. Even VA itself has admitted to challenges faced by 
an increasingly inexperienced workforce. This is not meant to be a 
criticism. The benefits system can take many years to master, and yet 
if VA were not hiring new employees, we would face an even greater gap 
as the most experienced employees retired. It must be an ongoing 
process.
    However, many service officers have many years of experience, and 
have recognized critical failure and success points within the system 
during those years. A price cannot be placed on that kind of 
experience. When those insights are offered early on in the process, 
sometimes overlooked errors can be corrected early and not late in the 
process, saving time. Efficiency is what will help VA move forward. 
VSOs offer an extra set of eyes that can point out things that might 
otherwise be missed. These are systems that will be used by both VA and 
VSO alike, and designing them with both end users in mind will only 
benefit the greater end.
    All of these programs will ultimately feed into the Veterans 
Benefits Management System (VBMS) which will be the operating system of 
VA's future. While VBMS will not begin its first pilot until November 
of this year, many of the early indications are that this will be 
helpful to VA and veteran alike. While final details of the system are 
not available, it should hopefully include elements which will enhance 
file sharing electronically and make finding necessary information 
easier. Furthermore, the ability to electronically organize and display 
key information should speed processing time. The ability to separate 
issues and rapidly process those that are ready for decisions--while 
saving more difficult issues for more lengthy development--can lead to 
exactly the sort of time saving measures that get the benefits to the 
veterans in a more timely manner.
    Electronic measures cannot be seen as a cure all, though. 
Institutional attitudes that have placed a greater priority on ``moving 
widgets'' than recognizing the importance and impact of the claims on 
individual veterans' lives must be overcome. Though VA states that 
quality of work is an equal component to timeliness, the lack of 
transparency about accuracy statistics as compared to statistics of 
claims processed and timeliness belies this and must be improved. It 
does veterans no good to process claims more rapidly if they are still 
being processed poorly and with a lack of attention to detail. VA must 
be more forthcoming on how they intend to show their worker and 
management base that they are measuring them not solely on how many 
units they move per month, but on the fact that those claims are done 
without errors that will negatively impact veterans.
    The importance of eliminating errors cannot be underestimated. A 
veteran's only option to correct mistakes made by VA is to appeal the 
claim. When the public sees headlines about how a veteran is waiting 
years for their claim to be processed by VA this is almost always 
indicative of a claim that is working its way through the appeals 
process. Errors made at a Regional Office take years to correct, not 
hours. This can be changed with a greater attention to detail. Quick 
fixes, where VA acknowledges a procedural error that is costing a 
veteran benefits and corrects it on the spot, are fixes that not only 
save the veteran years of delays, they save the VA years of work. Get 
it done right the first time and there is no need to clog the system 
with second, third and fourth times.
CONCLUSIONS
    Because of the transformation that VBA is going through, there is 
great potential to move forward. Drawing on positive lessons learned, 
benefiting from creative and dedicated minds to change the architecture 
of the system to a more effective model, exploiting the opportunities 
presented by updated, modern technology, VBA has the potential to truly 
improve into a veterans' benefits system that veterans can rely on and 
trust. Provided VA maintains the present attitude of acknowledging 
mistakes and diligently working to correct them, as well as using 
individual initiative to creatively improve the process, there is hope 
that the mistakes of the past can be forgotten and that the system for 
tomorrow can be the great system that the veterans of America deserve.
    VBA will be most effective in this transformation if they continue 
to engage and work with all stakeholders in the claims process. It is 
not enough to examine their problems internally. There is good advice 
to be taken from lawmakers, such as those on this committee, who are 
dedicated to ensuring that veterans are getting the benefits that the 
government intends for them to receive; or the VSOs who work in the 
sometimes frustrating system every day and see firsthand the impact of 
those errors on veterans' lives. Perhaps most importantly, VA must 
strive to repair their image with the veterans themselves. Too much 
trust has been lost.
    Veterans must be able to look to their government to uphold its end 
of a bargain begun when a new recruit first swears the oath to uphold 
and defend the Constitution of the United States. In the military, a 
veteran learns the importance of ``having the back'' of their allies 
and comrades. VA must have the back of the veterans who have served. VA 
must work hard to win back this trust, damaged by years of perceptions 
of broken promises and an unfeeling bureaucracy that treats them like 
numbers and not people.
    To be fair, there have been promising steps forward by this 
Secretary and administration of VA to own up to their errors, to 
recognize where they are failing the veterans of this country and to 
accept the responsibility to repair the damaged trust and the damaged 
system. As the largest veterans' advocacy organization in the United 
States, The American Legion believes that this country is and should be 
capable of providing the best benefits to those who sacrifice so much 
for their country. We are encouraged by this movement forward by VA and 
look forward to a continued working relationship with them to ensure 
that momentum is not lost and that this transformation to a 21st 
Century system of benefits is truly a great leap forward for veterans.
    The American Legion stands ready to answer any questions of this 
Subcommittee and thanks you again for this opportunity to provide 
testimony on behalf of our members.

                                 
     Prepared Statement of Richard Paul Cohen, Executive Director,
           National Organization of Veterans' Advocates, Inc.

    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

    Thank you for the opportunity to present the views of the National 
Organization of Veterans' Advocates, Inc (``NOVA'') concerning the 
state of the Veterans Benefits Administration (``VBA'').
    NOVA is a not-for-profit Sec. 501(c)(6) educational organization 
incorporated in 1993. Its primary purpose and mission is dedicated to 
train and assist attorneys and non-attorney practitioners who represent 
veterans, surviving spouses, and dependents before the Department of 
Veterans Affairs (``VA''), the Court of Appeals for Veterans Claims 
(``CAVC''), and the United States Court of Appeals for the Federal 
Circuit (``Federal Circuit'').
    NOVA has written amicus briefs on behalf of claimants before the 
CAVC, the Federal Circuit and the Supreme Court of the United States of 
America. The CAVC recognized NOVA's work on behalf of veterans when it 
awarded the Hart T. Mankin Distinguished Service Award to NOVA in 2000. 
The positions stated in this testimony have been approved by NOVA's 
Board of Directors and represent the shared experiences of NOVA's 
members as well as my own eighteen-year experience representing 
claimants before the VBA.
                      THE VBA HAS OBVIOUS PROBLEMS
    NOVA's previous testimony and reports from the Department of 
Veterans Affairs Office of Inspector General have detailed the VBA's 
problems including:

    an antiquated and insecure paper file;

    inadequately trained employees;

    ineffective supervision;

    inadequate metrics leading to inability to determine whether work 
is performed correctly;

    work credit system which induces employees to rate claims which 
have not been properly developed;

    an institution which is more concerned with finding fraudulent 
claims than timely granting meritorious claims; and

    an institution which is so out of control that it takes years to 
promulgate needed regulations and which is incapable of effectively 
communicating policy to its employees.

    VBA, under pressure from Congress and from various stakeholders, 
has recently initiated pilot projects incorporating techniques intended 
to solve, in isolation, only one problem at a time. Still the veterans 
claims adjudication system limps along each month incorrectly deciding 
claims and thereby adding thousands of appeals to the system and adding 
to the frustrations of veterans and other claimants. During the past 
year, from May 15, 2009 to May 15, 2010, the VBA's Monday Morning 
Workload Reports show an 11 percent increase in pending appeals from 
171,716 to 190,778. http://www.vba.va.gov/REPORTS/mmwr/historical/2009/
index.asp; http://www.vba.va.gov/REPORTS/mmwr/index.asp.
    Apparently, as a result of the VBA's awareness that improperly 
developed claims lead to erroneous decisions and that, in the rating 
process, the most time is consumed by claim development, the VBA 
continues to try different plans to generate fully developed claims 
prior to rating. Remarkably, the VBA has never advocated for veterans 
to have the right to hire a lawyer, for pay, during the time that the 
claim is initially filed and developed to assist in the claim 
development.
    The most recent annual report of the Chairman of the Board of 
Veterans' Appeals shows the effect of having lawyer representation of 
veterans and their families, following enactment of the Veterans 
Benefits, Health Care, and Information Technology Act of 2006, P.L. 
109-461. In FY 2009, those claimants who had attorney representation at 
the BVA received a larger percentage of favorable results than did 
those without attorney representation and a larger percentage of 
favorable results than did those who were represented by VSOs.

----------------------------------------------------------------------------------------------------------------
                                                     FY 2009
-----------------------------------------------------------------------------------------------------------------
                                                            Allowed            Remanded        Positive Outcome
----------------------------------------------------------------------------------------------------------------
                   Representation                        No.        %        No.        %        No.        %
----------------------------------------------------------------------------------------------------------------
VSO's Overall                                             7,688     24.8     11,714     37.8     19,402     62.6
----------------------------------------------------------------------------------------------------------------
American Legion                                           2,100     23.5      3,469     38.8      5,569     62.3
----------------------------------------------------------------------------------------------------------------
Amvets                                                       65     25.6         91     35.8        156     61.4
----------------------------------------------------------------------------------------------------------------
DAV                                                       3,853     25.5      5,607     37.1      9,460     62.6
----------------------------------------------------------------------------------------------------------------
MOPH                                                        179     31.7        191     33.8        370     65.4
----------------------------------------------------------------------------------------------------------------
PVA                                                         118     28.7        156     38.0        274     66.6
----------------------------------------------------------------------------------------------------------------
VFW                                                       1,138     24.2      1,746     37.2      2,884     61.3
----------------------------------------------------------------------------------------------------------------
VVA                                                         235     23.8        454     46.0        689     69.8
----------------------------------------------------------------------------------------------------------------
State Svs. Org                                            1,975     24.1      2,802     34.2      4,777     58.3
----------------------------------------------------------------------------------------------------------------
Attorney                                                    853     22.7      1,743     46.4      2,596     69.0
----------------------------------------------------------------------------------------------------------------
Agents                                                       21     23.1         32     35.2         53     58.2
----------------------------------------------------------------------------------------------------------------
Other Rep                                                   304     28.1        357     33.1        661     61.2
----------------------------------------------------------------------------------------------------------------
No Rep                                                      886     18.7      1,554     32.9      2,440     51.6
----------------------------------------------------------------------------------------------------------------
Total                                                    11,727     24.0     18,202     37.3     29,929     61.3
----------------------------------------------------------------------------------------------------------------

    In addition, a recent law review article published in The Federal 
Circuit Bar Journal advances the proposition that denying veterans the 
right to hire a lawyer at the outset of a claim ``may cost a single 
veteran millions of dollars'' Benjamin W. Wright, ``The Potential 
Repercussions of Denying Disabled Veterans the Freedom to Hire an 
Attorney'', 19 FCBJ 433,435 (No. 3, 2009).
    Not only has the VA been disseminating mixed messages by 
recognizing the difficulty in developing claims yet not attempting to 
obtain attorney assistance in developing claims, but the VA, which 
asserts that it wants to assist veterans and put veterans first, is now 
requesting legislation which is harmful to veterans. Just a few weeks 
ago, the Secretary requested introduction of a bill which the VA 
drafted and titled the ``Veterans Benefits Programs Improvement Act of 
2010'' which will be harmful to veterans and the claims which they 
file. Among the provisions which have the potential to hurt veterans 
are those which would allow the VA to impose a stay on the adjudication 
of a claim without obtaining prior permission from any court, section 
201; cutting in half the time allotted for a veteran to file an appeal, 
section 202; eliminating the benefit of equitable tolling for the late 
filing of a BVA appeal and making the timely filing of such an appeal 
jurisdictional, section 203; eliminating the requirement that decisions 
by the BVA must be supported by adequate reasons and bases, section 
206; and radically changing the law of Equal Access to Justice Act 
(``EAJA'') fees by requiring a veteran to be awarded monetary or other 
benefits, in court or on remand by the RO, before the veteran is 
entitled to EAJA fees, section 207.

              SOLUTIONS REQUIRE AN ORGANIZATIONAL OVERHAUL

    During the Claim Summit, conducted by the House Committee on 
Veterans' Affairs on March 18, 2010, NOVA focused on three primary 
deficiencies which must be corrected by the VA, simultaneously, if the 
system is to be fixed. They are lack of a well defined business model 
and plan, lack of adequately trained staff and administrators to carry 
out the plan, and lack of accurate and reliable metrics to monitor 
performance.
    NOVA has also previously testified that there are too many levels 
of management in the VA's organizational chart which has led to 
institutional paralysis or the inability to act expeditiously and 
properly, and which has led to mixed messages coming out of the VA.
    In addition to the VBA's need for an effective business plan, 
adequate training and supervision, accurate metrics, and a streamlined 
organization, the VBA must become user friendly and must consider the 
needs and limitations of veterans in order to efficiently and 
accurately assist veterans. Veterans must be given all the help they 
need and desire in processing their claims, including the right to hire 
an attorney. Additional impediments should not be imposed such as 
shortening a veteran's time to appeal unfavorable ratings. The VA 
should not deprive veterans of a full explanation of the decisions made 
regarding their claims. Rather, the VA should operate under the 
assumption that veterans generally file meritorious claims which should 
be fully and quickly granted. Such a change in outlook would naturally 
lead to a triage system for claims management which would dramatically 
cut backlogs of initial claims and appeals.
    Veterans and their families must not be overburdened by useless 
paperwork and redundant, undecipherable requests for information. Ill 
and impaired veterans should not be required to initiate their claims 
with more than a simple, one page, claim form. They should be given 
face to face interviews and the right to participate in hearings and 
review claim files without the need to travel four or more hours to 
participate in the adjudication of their claims. Rather than the 
present system containing 57 Regional Offices which requires many 
veterans to travel large distances, a veteran friendly system would 
disperse most of the functions of the present Regional Offices to 
locations in or in close proximity of each VA Hospital, and Vet Center. 
Decentralizing the VA would allow, interviewing, form completion and 
evidence development, and hearings to be located close to the 
claimant's home, while centralized state offices would house the rating 
boards. Active veteran participation would tend to result in more 
complete and accurate claim development. Obviously, the previously 
discussed recommendation to decentralize the VA will not work without a 
20 first century veterans claim system which is paperless and which 
allows access by veterans and their representatives. Also, the VA will 
never deserve the confidence of our country and our veterans until the 
VA can demonstrate that claims files are tamper proof and safely 
stored. A somewhat analogous system has been utilized by the Social 
Security Administration which has a paperless file, which has multiple 
local offices dispersed throughout each state for taking applications, 
dispensing information and conducting interviews, and which has 
centralized offices for reviewing the evidence.
    A user friendly system would begin the claim development phase by 
clearly and precisely requesting specific documentation from the 
veteran, such as a necessary DD214 or current medical records. Rather 
than utilizing an assembly line approach with six teams performing 
separate tasks, an efficient system would utilize one decision unit to 
handle everything from reviewing the application for completeness in 
predetermination through gathering the evidence and producing rating 
decisions. It is crucial that the combined development/adjudication 
unit be directed to partnering with the claimant and the claimant's 
representative, if the claimant is represented, to fully understand and 
develop the claim. If additional information is necessary, the team 
should issue an understandable and case specific VCAA notice, prior to 
any rating decision, should assist with any additional development, and 
then should issue the rating decision. Because most of the delay in 
processing claims involves development, particularly waiting for and 
obtaining C&P exams,\1\ NOVA suggests that the VBA utilize 38 U.S.C. 
Sec. 5125(a) to forego obtaining an additional exam where the record 
already contains an exam sufficient for rating purposes which would 
result in a grant of the benefit requested.
---------------------------------------------------------------------------
    \1\  March 17, 2010, Report from the VA Office of Inspector 
General, ``Audit of VA's Efforts To Provide Timely Compensation and 
Pension Medical Examinations'' Report 09-02135107, pages i, 11; 
September 23, 2009, Report from the VA Office of Inspector General, 
``Audit of VA Regional Office Claims Processing Exceeding 365 Days'' 
Report 08-03156-227, pages iii, 4, 8, 9; Booz Allen Report, page 12.
---------------------------------------------------------------------------
    A user friendly system must grant veterans the same rights granted 
to all citizens, the option to hire a lawyer for assistance, if 
desired, from the very beginning of the proceedings. Presently, 
veterans who are notified of the possibility that their rating will be 
reduced are not permitted to hire an attorney, for a fee, to represent 
them even after they formally object to the notice of reduction. A 
veteran must wait until after his rating has actually been reduced to 
hire a lawyer, for a fee. Similarly, veterans who believe that an 
earlier denial was the result of clear and unmistakable error must 
prepare a request for revision without being allowed to hire a lawyer, 
for a fee. Not only should the veteran's right to chose to hire a 
lawyer be expanded, but after a lawyer or other representative is 
hired, neither the VBA nor the BVA should view the veteran's 
representative as having interests opposed to the VA's central mission 
of providing proper benefits to veterans and their families. Rather, 
the VA should partner with the claimant's representative and use 
informal conferences to speed claim development and to narrow the 
issues to be decided.
    Because the present rating system is difficult for veterans to 
understand and for rating boards to apply, the complexity of the Rating 
Schedule frequently leads to erroneous decisions. It is necessary for 
the VA to rework the entire Schedule for Rating Disabilities contained 
in 38 CFR Part 4 to simplify and update the ratings. Being mindful of 
the increasing number of veterans whose life is in shambles because of 
residuals of PTSD or TBI, in rewriting the Schedule for Rating 
Disabilities the VA should comply with the recommendation that ratings 
be designed to compensate veterans for loss of quality of life in 
addition to loss of earning capacity.
    To control the ever increasing backlog of claims, the VBA must 
adequately triage claims. Increased use of presumptions would eliminate 
the need for development of evidence regarding the incidents of 
military service for all those who were deployed to a war zone 
regardless of their military occupational specialty or place of 
assignment within the war zone. Thus, for example, anyone who was 
deployed to a war zone, whether during WWII, Korea, Vietnam, the Gulf 
War or the GWOT who is subsequently diagnosed with PTSD should have the 
sole inquiry, during the rating stage of their claim, concentrate on 
the severity of their symptoms. Anyone who is diagnosed with a medical 
condition while on active duty and who is presently being treated for 
that condition should not need to prove a medical nexus between the 
conditions. Also, veterans who are receiving Social Security Disability 
or Supplemental Security Income benefits based on conditions which are 
related to service should be presumed to be unemployable.
    Following an unfavorable rating decision, the claimant should only 
be required to file one request for an appeal instead of the present 
requirement to file both a notice of disagreement and a substantive 
appeal to the BVA. Thereafter, the claimant and his representative 
should have the right to submit further evidence or argument and to 
have a denovo review on the record, or a hearing by a Veterans Law 
Judge (VLJ) sitting in a BVA office close to the decentralized Regional 
Offices.
    Adequate training, supervision and accountability are essential to 
create a system which fulfills the mission to correctly decide all 
claims. This requires reworking the organizational chart to provide 
reporting and direct accountability from the Regional Offices to the 
Secretary. Presently, there are an excessive number of layers of 
executives in the system which impedes the flow of knowledge and which 
inhibits accountability. Files do not get lost, shredded or compromised 
in a modern business with direct accountability. Also, in a system with 
direct accountability poorly trained workers are not called upon to 
perform functions essential to the mission. It is essential that the 
pressures placed on rating specialists and VLJs to turn out decisions 
be replaced with a system which expects the right decision to be made 
at all levels of the process. Veterans require a system which does not 
issue a decision until the claim is fully developed, which involves a 
true partnership between the claimant and the VA, and which rewards 
prompt and correct decision making. NOVA's experience confirms the 
findings in the 2005 report of the Office of Inspector General that the 
present work credit system is providing a disincentive to properly 
deciding claims. It should be replaced. To complement new expectations 
of increased accuracy and accountability it is essential that VA 
employees be repeatedly and adequately trained and supervised. 
Additionally, the high rate of VLJ decisions which are returned by the 
CAVC to the BVA because of inadequate reasons and bases is unacceptable 
and contributes to the backlog and to the reputation of ``hamster 
wheel'' adjudications.
    In a system with adequate training and accountability VLJs do not 
write decisions which are affirmed only 20 percent of the time, on 
appeal to the court. To ensure efficient, convenient, timely and proper 
appellate review at the administrative level, the Board of Veterans' 
Appeals should be decentralized and dispersed within reasonable 
distances from the many Regional Offices. Not only should the VLJs be 
moved out of their fortress in Washington, D.C., but they must be 
reconfigured into a corps of truly independent and well trained Federal 
Administrative Law Judges.
    Appeal from the VLJ's decision should go to the CAVC and then to 
the Federal Circuit. NOVA recommends two changes to the operation of 
the court. First, the CAVC should be granted class action jurisdiction 
so as to be able to remedy situations which affect a broad class of 
veterans. Second, the CAVC should be required to resolve all issues 
which are reasonably raised, except for constitutional claims if the 
appeals can be resolved without reaching the constitutional claims.

                                 
      Prepared Statement of Molly M. Ames, Rating Veterans Service
   Representative, Veterans Benefits Administration Regional Office,
     San Diego, CA, on behalf of American Federation of Government 
         Employees, AFL-CIO, and AFGE Veterans Affairs Council

    Chairman Hall, Ranking Member Lamborn and Members of the 
Subcommittee:

    Thank you for the opportunity to share the perspective of the 
American Federation of Government Employees (AFGE) and the National 
Veterans Affairs Council (VA Council), the exclusive representatives of 
front line employees of the Veterans Benefits Administration (VBA).
    I have been employed with VBA since 1997. I currently serve as a 
Rating Specialist (RVSR) at VBA's San Diego Regional Office (RO). 
Previously, I worked as a Claims Assistant and Veterans Service 
Representative (VSR). AFGE and NVAC are extremely frustrated with VBA's 
extreme delay in implementing key provisions of P.L.110-389 that, if 
implemented properly, have the potential to significantly reduce the 
current inventory and ensure that more claims are processed correctly 
the first time. The following are our specific concerns and 
recommendations.
Listening to Front Line Employees and Their Representatives
    AFGE and NVAC greatly appreciated Chairman Hall's request for our 
views during the drafting of the P.L.110-389 and our views on 
implementation of the law at recent hearings. In contrast, VBA has 
largely excluded AFGE and NVAC from its efforts to implement provisions 
of this law that directly impact the ability of front line employees to 
do their jobs, including skills certification, training and the work 
credit system. We appreciate some recent efforts by VBA to solicit 
input from employees and their representatives and hope this is the 
start of a more inclusive atmosphere.
    AFGE and NVAC urge the Subcommittee to increase the frequency of 
its site visits to the ROs, to include opportunities for unfiltered 
discussions with employees and their representatives outside of the 
presence of management.
Addressing Hostile Work Environments
    Labor-management relations at many ROs have deteriorated 
significantly, resulting in a work environment that is more hostile now 
than under the prior Administration. Terminations of both experienced 
employees and newly trained employees are a routine occurrence. Local 
AFGE officers in a number of offices have been retaliated against for 
permissible union activity. Management recently singled out a VSR with 
valuable skills and experience and refused to allow her to join her 
colleagues in working overtime on the claims backlog simply because of 
her status as a local president with official time.
    The constant threat of termination places additional stress on a 
workforce that is struggling to comply with arbitrary increases in 
production requirements, despite mandatory overtime every weekend.
    It is equally discouraging that VBA is unwilling to proceed with 
regional and local labor management forums mandated by the December 
2009 White House Executive Order on labor-management forums. These 
forums offer a valuable opportunity for labor and management to work 
together on effective solutions to the claims backlog.
Quality Assurance
    Section 224 of P.L. 110-389 (Section 224) provides for a third 
party assessment of VBA's Quality Assurance program. The input of front 
line employees and their representatives will be an essential component 
of any such assessment. Pressured RO managers have resorted to a number 
of techniques for hiding the size of the backlog and the number of 
aging claims. Our members on the front lines see how these techniques 
are employed on a daily basis.
    Also, many managers lack sufficient experience and subject matter 
expertise to carry out quality assurance duties, leading to greater 
errors, which in turn lead to more appeals, remands and other delays.
    For example, at the San Diego RO, employees who have been rating 
cases less than 2 years are overseeing the work of new employees, and 
others with less than 2 years of experience are training new RVSRs. 
Given the enormous, recent growth in our workforce--from 150 to 500 
employees in a just a few years at the San Diego RO--a sufficient level 
of experience is no longer there.
    VBA should implement skills certification tests for quality 
assurance personnel, similar to those required under P.L. 110-389 for 
direct supervisors of claims processors. More generally, management's 
performance measures should include quality of training and compliance 
with training requirements
Skills Certification Testing for Managers
    We strongly support the requirement in the new law that managers 
pass the skills certification tests similar to those required of claims 
processing personnel. Our members regularly report that they are 
supervised by managers who have little or no experience performing the 
complex functions involved in processing disability claims, rendering 
their roles as mentors and trainers ineffective.
    Lack of management expertise also takes a toll on workplace morale. 
Front line employees facing intense production pressures have to answer 
to supervisors who have not experienced these demands firsthand.
    To date, front line employees and their representatives have had 
very limited involvement in the development and administration of 
skills certification tests, despite substantial evidence that the test 
does not properly measure needed skills and repeated incidence of 
testing problems.
    All managers, including higher levels management and those involved 
in quality assurance, should be required to pass supervisor skills 
certification tests.
Training: Shortcuts and Poor Quality Remain the Norm
    Our members report a wide range of deficiencies in the training 
provided at ROs. Most problematic: widespread training shortcuts for 
new and experienced employees. After new employees complete their 
initial classroom training, their on-the-job training at the RO is 
routinely cut short to rush them into production. It is also common for 
new employees to be kept at one station to maximize their short term 
productivity, thus depriving them of exposure to other skill areas that 
are needed for their long term productivity.
    At the San Diego RO, most of the temporary 1-year hires who have 
been converted to permanent C&P employees have only received in-house 
training and are not being rotated; the lack of initial training and 
exposure to other teams will deprive them of critical skills in the 
long term.
    Similarly, experienced employees are routinely deprived of their 
full 80 hours of annual mandatory training by pressured managers who 
have significant discretion as to how much training time is allowed. We 
receive regular reports of ``training by email'', where employees are 
permitted a fraction of the time that was officially allotted to learn 
a new concept, and deprived of the opportunity to learn face-to-face 
from experienced instructors.
    RVSRs on the Appeals Team, like myself, receive valuable training 
from the Board of Veterans Appeals by videoconference; it provides us 
with an opportunity to ask questions directly of Board attorneys and 
judges. Unfortunately, the RVSRs on the Rating Board do not have this 
opportunity and are only provided in-house training from coaches with 
minimal experience.
    Management performance measures should reflect the quality and 
thoroughness of training program. Also, VBA should be required to use a 
cadre of formally trained instructors from VA Central Office to conduct 
RO trainings.
Long Overdue Study of the Work Credit and Work Management Systems
    Despite its assertions over the years, VBA has never produced 
evidence of a comprehensive reliable time and motion study that would 
enable it properly assign work credits for different tasks in the 
claims process. Nor has VBA adjusted individual employee production 
standards to reflect the increasing complexity and difficulty of the 
claims process. As a result, employees are pressured to short cut those 
tasks that are undervalued, such as additional case development.
    As long as employees are subjected to arbitrary and unreasonable 
production standards, the claims development process will be flawed by 
inefficiency and incomplete claims development. The ultimate harm falls 
upon the veterans, who are deprived of full, fair, and timely 
consideration of their claims, and a growing backlog.
    The recently issued VSR standards have exacerbated this problem by 
eliminating credit for other routine, critical steps in the claims 
process. It seems that management is once again looking for a quick fix 
to bring down the backlog instead of properly training people and 
letting them do their jobs.
    More specifically, under the old standards, VSRs received work 
credit based on their performance in 60 criteria; under the new VSR 
rules, there are only 5 criteria. Most problematic is the complete loss 
of credit for follow-up development. The elimination of any credit for 
work beyond initial development will have a significant adverse impact 
on the claims processing system.
    Similarly, the current method in which VBA provides credit for RVSR 
work adversely affects timeliness and quality. More specifically, these 
standards fail to provide any credit for additional development or 
completion of VA examination requests, both of which may take an RVSR 
multiple hours of production time to complete. The lack of credit for 
additional development of completion of VA examination request often 
forces the RVSR to choose between serving the claimant's needs and 
meeting production standards.
    It is also problematic that local stations are permitted to 
increase production standards above national levels, creating 
inconsistencies and morale problems.
    New employees are also held to unrealistic standards. They are 
given only 90 days to reach a production standard following a period 
without any production requirements. Also, they are not given any 
deductible time to correct prior work. In contrast, the mentors who 
review their work for errors receive deductible time for their work.
    Implementation of a revised work credit system, customized for both 
new and experienced employees based on an independent, scientifically 
based study is urgently needed.
Counterproductive Telework Production Standards
    The White House and Office of Personnel Management have stepped up 
their commitment to flexible workplace arrangements for Federal 
employees. Yet, the VA--which continues to lag behind other Federal 
agencies in the use of flexiplace--maintains discriminatory, 
counterproductive telework policies across all its ROs. Last year, at 
our request, Congressman Frank Wolf asked Secretary Shinseki to offer 
telework to more claims processors, and to end the arbitrary, unfair 
practice of requiring higher production from work-at-home employees. 
Unfortunately, Secretary Shinseki refused to change course.
    VA's telework policies at the ROs make even less sense when so many 
ROs are facing severe space shortages. Every seat in the San Diego RO 
is full and more employees keep arriving. It is very difficult to get 
training rooms. We also do not have enough space for certification and 
vocational rehabilitation testing. It is nearly impossible to meet with 
all employees at the same time.
    It is equally confounding that former Secretary Peake was willing 
to drop a similar practice of higher production standards at the Board 
of Veterans Appeals. VA Shinseki should be doing even more to promote 
telework in light of current White House goals to increase the use of 
telework!
    All RO claims processing personnel with appropriate job duties 
should be offered the telework option. Work-at-home employees should be 
subject to the same production standards as their peers.
    Thank you for the opportunity to testify on behalf of AFGE and the 
National VA Council.

                                 
        Prepared Statement of Paul Sullivan, Executive Director,
                       Veterans for Common Sense

    Chairman Hall, Ranking Member Lamborn and Members of the 
Subcommittee, thank you for inviting Veterans for Common Sense (VCS) to 
present our comments about ``The State of the Veterans Benefits 
Administration'' (VBA).
    VCS appreciates the many hearings and round table discussions this 
Subcommittee has held in the past few years on this topic of vital 
interest to our veterans and families.
    We seek a broader relationship between VBA and VBA's many 
stakeholders. For example, we support additional hearings devoted to 
individual veterans offering their views about their challenges with 
VBA as well as their ideas for improving VBA. In another example, we 
support a greater dialog with the private sector to find innovative 
ideas to kick-start VBA into the 21st Century. All of this can easily 
be accomplished with a White House-Congressional-Veteran Advocate 
conference open to the public so we can cast a wide net for short-term 
and long-term solutions.
    Progress reforming VBA begins by listening to veterans and 
advocates. Allow us to begin today by stating our goal is to work 
closely with VBA so our veterans receive both prompt and high-quality 
health care and disability benefits. In many instances, an approved VBA 
claim is required before a veteran receives medical care.
    Our testimony contains four parts. Our first part highlights 
promising news about the current state of VBA. Our second part lists 
troubling challenges needing prompt attention. Our third part, from our 
Web site, www.FixVA.org, describes VBA's systemic problems. And our 
fourth part offers a few pragmatic and progressive VCS solutions for 
the consideration of Congress and VA leaders also posted at 
www.FixVA.org.
Part One: Recent Promising News About VBA
    On February 4, 2010, VCS listened to VA Secretary Eric Shinseki 
testify before Congress and announce that fixing VBA was his top 
priority for this year. We commend him for addressing this serious 
issue. VCS wants him and all of VBA to succeed, as this is in the best 
interest of our veterans and our families.
    On March 18, 2010, VCS listened as VA's top information technology 
advisor, Peter Levin, told Chairman Bob Filner and dozens of veterans' 
advocates, ``In my judgment, [VBA] cannot be fixed. We need to build a 
new [claims] system, and that is exactly what we are going to do.'' 
This admission of the scope and severity of VBA's crisis of poor 
quality combined with long delays was a critical first step toward 
reforming VBA.
    On May 7, 2010, VA announced VBA would contract to build a 
simplified processing system for Vietnam War veterans' claims for 
disabilities. Scientists linked exposure to Agent Orange (dioxin) 
poisoning in Southeast Asia to several serious health conditions. VCS 
supports VA's decision, and we will be monitoring this public-private 
effort.
    On June 2, 2010, the Office of Management and Budget approved VBA's 
new Form 21-526EZ, an express disability compensation claim. VCS hopes 
a new form may reduce the burdensome and frustrating 26-page claim 
obstacle course our veterans now face. We believe, when implemented, 
the new form may make it easier for veterans to file claims, easier for 
advocates to assist veterans, and easier for VBA staff to process 
accurate claims.
    On June 10, 2010, VCS reviewed briefing materials concerning VBA's 
pilot programs intended to improve claim processing quality and 
timeliness. Overall, VCS supports these endeavors, so long as they 
actually improve accuracy and speed. The pilots must also be scalable: 
meaning VBA must be able to apply the pilot (or successful parts of it) 
to the entire VBA system within a short time frame. VBA's pilots adopt 
a veteran-centered approach, and VCS salutes this culture change. VCS 
reserves judgment on the pilots until VBA releases final reports about 
the completed pilot programs.
Part Two: Troubling News About VBA
    While tackling some of VBA's systemic challenges, VBA continues to 
face serious obstacles stalling VA Secretary Shinseki's vision of 
transforming VBA.
    Leadership Vacancies. As of June 8, 2010, VBA remains leaderless. 
There is no permanent Under Secretary or Deputy Under Secretary. VCS 
urges VA Secretary Eric Shinseki to fill the positions as quickly as 
possible with qualified veteran advocates who will continue his efforts 
to transform VBA. We strongly encourage VBA's soon-to-be-selected 
leaders to bring on board a team of dozens of subject matter experts 
focused on two goals. The first goal should be to improve both the 
quality and timeliness of claim decisions. The second goal should be to 
develop and implement a long-range plan to overhaul VBA's information 
technology, training, regulations, and leadership.
    Unacceptably High Error Rate. VBA's error rate processing claims 
hovers at more than 25 percent, according to VA's Office of the 
Inspector General (OIG). Of particular concern are high error rates for 
PTSD and Agent Orange claims. We refer the Subcommittee to a hearing 
held earlier this month regarding VBA's inability to implement 
recommendations made by OIG and agreed to by VBA. VCS urges VA to 
institute total quality management controls as well as auditing to 
reduce the error rate. VCS has posted VA OIG audits at our program Web 
site, www.FixVA.org.
    Tidal Wave of Claims. VA estimates the number of claims flooding 
into VBA may reach one million this year, creating additional burdens 
on VBA to process more claims. VCS urges VBA to closely monitor claims 
filed, granted, and denied by period of service, gender, age, and 
condition in order to have a more robust picture of emerging trends. VA 
currently receives one million new claims each year, and the total of 
all pending claims, appeals, and other claim-related work is in excess 
of one million. Demand for VBA benefits may remain at a high rate for 
many years due to:

      Iraq and Afghanistan claims. The two wars already caused 
nearly 500,000 new claims, with 500,000 more expected in the next 5 
years.
      Vietnam War claims. Scientific evidence linking Agent 
Orange poisoning to medical conditions may result in hundreds of 
thousands of new claims.
      PTSD claims. Scientific evidence linking deployment to a 
war zone with PTSD may result in tens of thousands of new and re-opened 
claims.
      Gulf War claims. Scientific evidence linking toxic 
exposures during the 1991 war may result in tens of thousands of 
additional claims.
      Economic Recession. The economic recession and high 
unemployment causes some veterans to file more claims against VBA in 
order to obtain care.

    Education Benefits Debacle. VBA's failure to implement the Post-9/
11 GI Bill education benefits could have easily been prevented if VA, 
Congress, and veterans' groups cooperated on the design, construction, 
and implementation starting in 2007. If there was greater communication 
and cooperation among legislators, VA, and veteran stakeholders, then 
the crisis may have been mitigated or prevented.
    VA's Anti-Veteran Legislative Proposal. On May 25, 2010, VA sent a 
letter to Speaker of the House Nancy Pelosi containing draft 
legislation focusing on VBA. VCS objects to VA's efforts to restrict 
veterans' due process rights to retain counsel for claim appeals. VCS 
provided VA and Chairman Filner with a letter detailing some of our 
major objections.
    Unfinished Gulf War Issues. On May 3, 2010, VCS submitted comments 
regarding VA's draft Gulf War Veterans' Illness Task Force report. VCS 
awaits VA Secretary Shinseki's response to our comments, especially 
those about improving disability compensation benefits for Gulf War 
veterans. The 20th anniversary of the start of the conflict, now the 
longest in U.S. history, represents an opportunity for VA to conduct 
outreach for research, health care, and benefits for our Gulf War 
veterans.
    PTSD Claim Regulations. On October 14, 2009, VCS submitted comments 
regarding VA's proposed regulations granting a presumption of service 
connection for PTSD for veterans diagnosed with PTSD who deployed to a 
war zone. VCS supports VA Secretary Shinseki's bold initiative, and we 
hope VA publishes the final regulations soon so veterans may receive 
care and benefits. We urge VA to work transparently with veterans' 
advocates and Congress so we can monitor the implementation of the new 
regulations.
    Historical Pattern of Neglect. The press coverage about VBA remains 
unflattering, due in part to what appears to be a lack of media 
outreach by VBA. We hope this can change soon, with more news in the 
press about fewer VA errors and shorter wait times for veterans.

      On August 13, 2003, the Wall Street Journal reported on 
the tragic plight of Afghanistan War veteran Jason Stiffler. While 
deployed, Stiffler was injured and suffered psychological trauma, 
leading him to have both traumatic brain injury (TBI) and post 
traumatic stress disorder (PTSD). Nearly 7 years ago, the estimate of 
Iraq and Afghanistan claims was only 50,000. Today, VBA has received 
nearly 500,000 claims from current war veterans. Seven years ago, the 
number of claims sitting at the Board of Veterans appeals was just over 
100,000. Today, the Board has 200,000 pending appeals. VCS asks the 
Subcommittee to read the article: http://
www.veteransforcommonsense.org/index.php/veterans-category-articles/
1766-wall-street-journal.
      On June 7 and again on June 9, 2010, National Public 
Radio (NPR) aired two lengthy investigative reports about TBI. The two 
NPR articles describe significant problems for soldiers caused by the 
military due the lack of awareness, exams, and treatment for TBI. VCS 
urges VBA to be aware of the military's lack of exams and treatment 
when it comes to reviewing veterans' claims for TBI. VCS asks the 
Subcommittee to read the NPR articles.

        NPR Part One: http://www.veteransforcommonsense.org/index.php/
        whats-new/1754-npr.

        NPR Part Two: http://www.veteransforcommonsense.org/index.php/
        whats-new/1763-npr.
Conclusion for Parts One and Two
    While many challenges persist at VBA, significant progress toward 
reform is being made by VA Secretary Shinseki. However, simply 
recognizing a catastrophe exists and promising to transform VBA is not 
enough. VCS and our collective constituency want to see results. 
Measurable results will be observed when a new team is brought in to 
lead VBA with a broad mandate from Secretary Shinseki and President 
Obama. Results will be celebrated when VBA's error rate is reduced 
significantly, and claims are processed quickly (with an exception for 
serious cases with multiple conditions).
    In order to reach our long-term goal to transform VBA for the 21st 
Century, VCS asks Congress to pass a new law mandating the creation of 
an entirely new VBA system from the ground up. A new law should fund 
the creation of a new, streamlined VBA, based on VBA pilots. The new 
law and new VBA must set requirements for quality and timely decisions 
so our veterans don't wait for health care or benefit payments.
Part Three: VCS Identifies Nine Major Problems at VBA
    Parts three and four contain information from our new program Web 
site, www.FixVA.org. On Friday, April 9, 2010, Veterans for Common 
Sense held a press conference in San Diego, attended by the Honorable 
Bob Filner, Chairman of the House Veterans' Affairs Committee. At our 
new Web site, VCS listed the nine major problems in Part Three as well 
as the nine practical solutions shown in Part Four:

    1.  Stagnant System. For decades, leaders at VBA failed to upgrade 
VBA information technology, regulations, training, and oversight. This 
led to a backlog of one million claims (of all types), hundreds of 
thousands of appeals, and a high error rate. Veterans wait, on average, 
6 months for an initial claim decision from VBA. Veterans who appeal a 
VBA decision can wait an additional 4 or 5 years for a decision from 
the Board of Veterans Appeals (BVA). Instead of reforming VBA, leaders 
tinkered with a few rules, declared victory, and hoped Congress and 
veterans would walk away.
    2.  Different Locations. VBA leaders work at 1800 G Street, NW in a 
separate building a half-mile away from VA Secretary Eric Shinseki's 
headquarters at 810 Vermont Avenue, NW, in Washington, DC. Out of sight 
means out of mind when it comes to reforming VBA.
    3.  Obsolete Computers. VBA uses several different computer 
systems, some dating back decades. They don't work. Mail is stacked, 
claims are shredded, and claims are lost because VBA is not digitized. 
VBA's obsolete computers mean VBA leaders don't know why Guard and 
Reserve veterans from the Iraq and Afghanistan war are half as likely 
to file claims, yet twice as likely to have their claim denied. The 
current system computer is not friendly for VBA staff or for veterans.
    4.  26-Page VBA Application. VBA forces veterans to complete a 26-
page claim form. Imagine being a veteran with post traumatic stress 
disorder--PTSD--or traumatic brain injury--TBI--and trying to fill out 
VBA's complex, overwhelming, and burdensome paperwork all alone.
    5.  No Military Records. VBA doesn't have automatic access to 
computerized military service records and military medical records. 
That means VBA must request paper records one at a time for each 
veteran. VBA and military searches for paper records often take years 
and often are the root cause for denials for benefits and health care 
due to veterans' lack of evidence for their claim.
    6.  Two Separate Agencies. Except in a few locations, VBA and VHA 
don't share office space, and that means they might as well be on 
different continents. Most veterans file their VBA claims at a VHA 
medical facility, where there are few, if any VBA staff to review the 
claim, set up claim exams, or make claim decisions. VHA then mails the 
claim form to VBA. In some cases, veterans incorrectly confused a VBA 
claim denial as a VHA health care denial--with devastating 
consequences.
    7.  VBA Vacancies. VBA recently began advertising for new positions 
to process the tidal wave of claims. For example, in Waco, Texas, VBA 
is hiring 100 new claims processors.
    8.  Attorney Restrictions. Veterans are prohibited from hiring an 
attorney until after VBA has denied their claim. Enemy prisoners of war 
can have attorneys at Guantanamo, yet our veterans fight VBA alone.
    9.  VA Audits Prove Serious Problem Exists. In the past 7 months, 
more than 10 VA Office of the Inspector General (VA OIG) reports have 
found very serious systemic problems within VBA. Examples include 
unacceptably high VBA error rates at eight VBA regional offices. VBA's 
reports about the backlog of claims are incomplete and difficult to 
understand. A recent study also found VA remains unable to determine 
the full human and financial costs of the Iraq and Afghanistan wars. 
After nearly 9 years of war, that's unacceptable.
Part Four: VCS Offers Nine Practical and Progressive Solutions
    1.  New Leaders. The Under Secretary for Benefits position is 
vacant. VCS urges VA Secretary Eric Shinseki to hire new, pro-veteran 
leaders at VBA dedicated to fixing VBA within the next 2 years. The new 
leaders will also need additional support staff to oversee a massive 
overhaul of the beleaguered agency.
    2.  Move Leaders. VCS urges Secretary Shinseki to relocate VBA 
leaders from 1800 G Street in Washington to inside VA's national 
headquarters located at 810 Vermont Avenue, where they will be co-
located with his other VA leaders. This sends the signal to veterans, 
Congress, and the public that fixing VBA is a top priority.
    3.  Presumptive Conditions. VCS urges Secretary Shinseki to create 
an automated, veteran-friendly system that takes advantage of laws 
creating more presumptions in favor of the veterans, such as VA's new 
regulations expanding health care and disability benefits for Vietnam 
War veterans suffering serious and adverse medical problems associated 
with their exposure to Agent Orange poisoning. VA's goal should be to 
process claims in 1 month, not the current 5 to 6 months. Two examples 
under consideration now supported by VCS would streamline PTSD and Gulf 
War claims.
    4.  Single Page Claim Form. VCS urges Secretary Shinseki to adopt a 
one-page claim form to replace VBA's current 23-page form. This would 
cut burdensome red tape and remove a significant barrier, especially 
for veterans with mental health conditions and/or brain injuries. This 
will also make it easier for VBA employees to process claims. VHA 
currently uses a one-page health care enrollment form, and VBA should 
follow suit.
    5.  Joint DoD-VA Record. VCS urges Secretary Shinseki to work 
closely with Defense Secretary Robert Gates and begin using the new, 
robust lifetime electronic military medical record proposed by 
President Barack Obama. VCS urges the military to complete the 
mandatory pre- and post-deployment medical exams as part of the new 
record. This will end VBA's current lengthy practice of reconstructing 
medical records, a process that takes years and delays veterans' timely 
access to health care and benefits.
    6.  VBA Staff at VHA Facilities. VCS urges Secretary Shinseki to 
bring VBA to where our veterans are by restructuring VBA and placing 
VBA claims processing staff at VHA medical facilities to meet face-to-
face with veterans. Veterans hope and expect to see friendly VBA 
experts who can quickly and accurately process claim forms, set medical 
appointments, and decide veterans' claims. Completing a veteran's claim 
correctly the first time reduces appeals that clog up VBA.
    7.  Hire More Veterans. Veterans returning from Iraq and 
Afghanistan have an unemployment rate of nearly 15 percent, according 
to a recent CNN broadcast. VCS urges VA Secretary Shinseki to place 
personnel offices at military discharge locations so veterans have 
faster access to VA jobs, including VBA positions. We urge VA to hire 
veterans.
    8.  Veterans Need Attorneys. VCS urges Secretary Shinseki to work 
with Congress so our veterans can hire an attorney before they file a 
claim. This is especially vital for our veterans suffering from PTSD, 
TBI, or other mental health conditions. Completing a fully developed 
quality claim correctly the first time with expert legal advice reduces 
appeals that often clog up VBA for years.
    9.  Greater Transparency. VCS urges Secretary Shinseki to release 
more information about the agency's work as well as conduct more 
outreach to inform our veterans about their benefits. VCS urges the 
Secretary to hire the appropriate staff to conduct oversight so there 
is more accountability within the new VBA system, especially staff to 
oversee quality as a high priority. VCS also urges VA to begin 
tabulating the current cost of the wars as well as estimating the 
future costs of the war so VA is well positioned with staff and 
facilities to meet the increases in demand.
Conclusion
    VCS presents Congress with our bold agenda listing VBA's systemic 
challenges and pragmatic solutions.
    At the top of our list of critical VA actions: VA must fill top VBA 
leadership vacancies.
    VCS constantly encourages veterans to seek care and benefits from 
VA. VCS also advocates for systemic improvements so our veterans 
receive the prompt and high-quality medical care and benefits they 
earned.
    Our final message to VA and Congress is for VBA to work with 
veterans' advocates and focus on quality claim decisions, timely claim 
decisions, and improving VA's culture.

                                 
     Prepared Statement of Michael Walcoff, Acting Under Secretary
            for Benefits, Veterans Benefits Administration,
                  U.S. Department of Veterans Affairs

    Chairman Hall, Ranking Member Lamborn, and Members of the 
Subcommittee:

    Thank you for the opportunity to appear before you today to discuss 
the Department of Veterans Affairs (VA) disability compensation and 
pension programs. Accompanying me today are Ms. Diana Rubens, Associate 
Deputy Under Secretary for Field Operations; Mr. Tom Pamperin, 
Associate Deputy Under Secretary for Policy and Program Management; Mr. 
Mark Bologna, Director for the Veterans Benefits Management System 
(VBMS) initiative, and Dr. Peter L. Levin, Senior Advisor to the 
Secretary and Chief Technology Officer. My testimony will focus on the 
Secretary's goal to eliminate the claims backlog by 2015 so as to 
ensure timely and accurate delivery of benefits and services to our 
Veterans and their families.
Mission, Transformation Strategy and Goals
    Our mission at VA is to fulfill President Lincoln's promise--``To 
care for him who shall have borne the battle, and for his widow, and 
his orphan''--by serving and honoring the men and women who are 
American's Veterans. VA is also to transform into a 21st Century 
organization that is Veteran-centric, results-driven, and forward-
looking. This transformation is demanded by a new era, emerging 
technologies, the latest demographic realities, and renewed commitments 
to today's Veterans. To this end, VA must deliver first-rate and timely 
health care, benefits, and other services to our Nation's Veterans, 
families and survivors.
    Secretary Shinseki, the Veterans Benefits Administration (VBA), and 
the entire VA leadership fully share the concerns of this Subcommittee, 
Congress as a whole, the Veterans Service Organizations (VSOs), the 
larger Veteran community and the American public regarding the 
timeliness and accuracy of disability benefit claims processing. As you 
know, Secretary Shinseki has set the critical goals of eliminating the 
disability claims backlog by 2015 and of processing disability claims 
so no Veteran has to wait more than 125 days for a quality decision (98 
percent accuracy rate) on that claim. Achieving these goals is at the 
center of our work as we collaborate across the Department and with our 
partners in the Department of Defense to tackle this important 
objective for our Nation's Veterans.
    Under the leadership of Secretary Shinseki, we are attacking the 
claims process and backlog through a focused and multi-pronged 
approach. At its core, our approach relies on three pillars:

    1.  Culture: A culture change inside VA to one that is centered on 
accountability to and advocacy for our Veterans;
    2.  Reengineering business processes: Collaborating with internal 
and external stakeholders (employees, administrations and staff, 
Congress, VSOs, public and private entities) to constantly improve our 
claims process using best practices and ideas; and
    3.  Technology and infrastructure: Deploying leading edge, powerful 
21st century IT solutions to create a smart, paperless claims system 
which simplifies and improves claims processing for timely and accurate 
completion the first time.

    Transforming our disability claims processing system involves 
identifying short-term changes with immediate impact to streamline the 
way we currently do business, improving business processes, enabling 
practices which will best leverage technology, and hiring staff to 
bridge the gap until we fully implement our mid-range plan. We expect 
these transformational approaches to begin yielding performance 
improvements in 2011 and gain in significance beyond; nonetheless, it 
is important to mitigate the impact of the increased workload until 
that time.
    Our aggressive efforts are at the heart of our requirements for the 
large increase in our 2011 budget request for the VBA. The President's 
2011 budget request for VBA is $2.1 billion in discretionary funding, 
an increase of $460 million, or 27 percent, over the 2010 enacted level 
of $1.7 billion. The 2011 budget supports an increase of up to 4,048 
FTEs, including maintaining some of the temporary employees funded 
through the American Recovery and Reinvestment Act of 2009. 
Importantly, the budget also includes $145.3 million in information 
technology (IT) funds in 2011 to support the ongoing development of a 
21st Century smart, paperless claims processing system. We greatly 
appreciate this Subcommittee's consideration and support for our fiscal 
year (FY) 2011 budget request as we continue this important work for 
our Veterans.
    All of us working inside VA are well aware that from the outside, 
Congress and the VSOs are not yet seeing external results, but we are 
confident that that will change by the end of 2011.
    We recognize the frustration of many Veterans and our employees 
with the time it takes to reach a decision on Veterans' disability 
claims. Throughout VA we are rededicating ourselves to the mission of 
being advocates for our Veterans. This agency-wide commitment flows 
from the Secretary down to the VA leadership to our dedicated employees 
in the field. Our leadership team is deeply committed to improving our 
relationship with Veterans and other stakeholders, so that we are seen 
as their advocates and partners, no matter the circumstance. Before 
going further, let me provide an update on our current disability 
claims workload.
Current Workload
    Our pending claims inventory is rising due to the unprecedented 
volume of disability claims being filed. In 2009, for the first time, 
we received over one million claims during the course of a single year. 
The volume of claims received has increased from 578,773 in 2000 to 
1,013,712 in 2009 (a 75 percent increase). Original disability 
compensation claims with eight or more claimed issues increased from 
22,776 in 2001 to 67,175 in 2009 (nearly a 200 percent increase). Not 
only is VA receiving substantially more claims, but the claims have 
also increased in complexity. We expect this level of growth in the 
number of claims received to continue in 2010 and 2011. VBA experienced 
a 14.1 percent increase in annual claims received in 2009, while we 
projected an increase of 13.1 percent and 11.3 percent in 2010 and 
2011, respectively. This substantial growth is driven by a number of 
factors including our successful outreach efforts, which is a priority 
of the Secretary as well as this Subcommittee and Congress; improved 
access to benefits through initiatives such as the Disability 
Evaluation System, Quick Start, and Benefits Delivery at Discharge 
Programs; increased demand as a result of nearly 10 years at war; and 
the impact of a difficult economy prompting America's Veterans to 
pursue access to the benefits they earned during their military 
service. As a result, we now average over 97,000 new disability claims 
added to the inventory each month, and we project to receive an 
astounding nearly 1.2 million disability claims this year.
    The projections listed above do not take into account important 
decisions made by Secretary Shinseki over the last year. On October 13, 
2009, Secretary Shinseki announced his decision to establish 
presumptions of service-connection for Veterans exposed in service to 
certain herbicides, including Agent Orange, for three particular 
illnesses based on the latest evidence presented by the Institute of 
Medicine of an association between those illnesses and exposure to 
herbicides.
    Due to this policy change alone we expect the number of 
compensation and pension claims received to increase from 1,013,712 in 
2009 to 1,318,753 in 2011 (a 30 percent increase). Without the 
significant investment requested for staffing in the FY 2011 budget 
request, the inventory of claims pending would grow from 416,335 to 
1,018,343, and the average time to process a claim would increase from 
161 to 250 days. If Congress provides the funding requested in our 
budget, we will be able to increase production in order to lower the 
inventory to a projected level of 804,460 claims pending with an 
average processing time of 190 days. This Agent Orange decision, which 
is the right decision for our Veterans, will add to the disability 
claims inventory in the near term but with the aggressive actions VA is 
taking will not prevent us from achieving elimination of all backlog in 
2015.
    Through 2011, we expect over 186,000 claims related to the new 
presumptions, and we are dedicated to processing this near-term surge 
in claims as efficiently as possible. Included in the claims projected 
through 2011 are approximately 93,000 claims from Vietnam Veterans and 
survivors previously denied for these conditions. We have a plan to re-
adjudicate these decisions, as required under the court orders in the 
U.S. District Court for the Northern District of California case of 
Nehmer v.  U.S. Department of Veterans Affairs. VA is also soliciting 
private-sector input to design and develop an automated system for 
faster processing of new Agent Orange presumptive claims--we already 
have over 40,000 new claims and are receiving about 8,000 more per 
month.
    While the volume and complexity of claims have increased, so too 
has the overall production effort of our claims processing workforce. 
In 2009, the number of claims processed was 977,219, an increase of 8.6 
percent over the 2008 level of 899,863. The average time to process a 
rating-related claim was reduced from 179 to 161 days in 2009, an 
improvement of 11 percent. We recognize that these improvements are not 
enough. VA currently has approximately 508,000 pending disability 
claims, 35 percent of which have been pending for longer than our 
strategic target of 125 days, and are therefore considered to be part 
of VA's claims backlog. VBA continues to aggressively hire and train 
claims processing staff across the Nation, and we currently employ over 
11,600 full-time claims processors.
    Hiring more employees is not a sufficient solution. The need to 
better serve our Veterans requires bold and comprehensive business 
process changes to transform VBA and therefore VA into a high-
performing 21st century organization that provides the best services 
available to our Nation's Veterans, survivors, and their families.
Improvement Initiatives
    VA's transformation strategy for the claims process leverages the 
power of 21st century technologies applied to redesigned business 
processes. We are examining our current processes to be more 
streamlined and Veteran-focused. We are also applying technology 
improvements to the new streamlined processes so that the overall 
service we provide is more efficient, timely and accurate. We are 
harvesting the knowledge, energy, and expertise of our employees, VSOs, 
and the private and public sectors to bring to bear ideas to accomplish 
this claims process transformation.
    Our end goal is a smart, paperless, IT-driven system which empowers 
our VA employees and engages our Veterans. While we work to develop 
this system, we are making immediate changes to improve our business 
processes and simultaneously incorporating the best of those changes 
into the larger effort, our signature program, the Veterans Benefits 
Management System (VBMS). Our efforts are also synchronized and 
coordinated with VA's Virtual Lifetime Electronic Record and Veterans 
Relationship Management System programs.
    VA has developed a plan to ``break the back of the backlog'' which 
includes short, medium, and long term initiatives running in parallel 
and feeding into continuous improvement efforts.
Short Term Initiatives
    There are a number of claims process improvement initiatives in 
various stages of concept development or execution. Some of the 
initiatives are quickly implemented changes to build momentum and reach 
out to our Veterans. For example, in an effort to speed up our work and 
to connect with our Veteran-clients, VBA now requires staff to reach 
out and call Veterans more often during the claims process rather than 
to rely solely on written communication. VA is also currently working 
to develop over 60 new medical questionnaires to take the place of 
current VHA examination templates to improve rating efficiency.
    Another initiative is being conducted at our St. Petersburg 
Regional Office (RO) to identify and pay Veterans at the earliest point 
in time when claimed disabilities are substantiated by evidence we 
already have on record. In addition, four ROs are testing the concept 
of an ``Express Lane'' to expedite single-issue claims to improve 
overall processing efficiencies and service delivery. Yet another 
initiative will allow employees and Veterans to communicate regarding 
VA benefits using on-line live chat capabilities through the new portal 
called e-Benefits. All of the initiatives I have described and a number 
of others are being tracked for impact on timeliness and quality, and 
we will launch the successful initiatives nationally. For example, VA 
has initiated a new shorter application form--cutting the previous 23-
page form down to 12 pages. In many cases we expect to see significant 
improvement in Veteran satisfaction with the application process.
    On October 10, 2008, then-President Bush signed the Veterans' 
Benefits Improvement Act of 2008, Public Law 110-389. Members of this 
Subcommittee played an integral role in developing that legislation. 
Section 221(a) of the Act directed VA to carry out a 1-year pilot 
program to assess the feasibility and advisability of expeditiously 
processing fully developed compensation and pension claims within 90 
days after receipt of the claim. In 2009, 10 ROs implemented the fully 
developed claim program. VA has expanded this program for 
implementation at all ROs.
Mid to Long Term Initiatives
    The results of the short term efforts feed directly into our mid-
range high-impact technological solution, VBMS, to support paperless 
processing and an electronic management system to process claims from 
start to finish.
    To inform the components of VBMS and as a part of our overall 
strategy to eliminate the backlog, we have four main pilot initiatives 
underway that are integral to our overall transformation plan. Each 
pilot functions as a building block and test bed for the development of 
an efficient and flexible paperless claims process. The results of all 
four pilots will be incorporated into the nationwide deployment of the 
VBMS in 2012.
    The Little Rock Compensation Claims Processing Pilot began in July 
2009 following completion of the VBA Claims Development Study by Booz 
Allen Hamilton. The Little Rock pilot focused on a ``Lean Six Sigma'' 
approach to streamlining current processes and procedures. The Veterans 
Service Center converted from the VBA's existing claims processing 
model into new fully integrated claims processing teams or pods. The 
pilot concluded in May 2010, and VBA is evaluating the outcomes to 
determine next steps.
    The Business Transformation Lab (BTL) in Providence, RI, serves as 
a ``test ground'' for defining processes and testing functionality that 
will be incorporated into the development and deployment of VBMS. The 
primary purpose of the BTL is to utilize a structured approach to 
identify the most efficient way to process claims in an electronic 
environment incorporating current technology. As part of this process, 
the Providence RO is testing paperless claims processing using a small 
population of claims. The business process improvements identified by 
the BTL will be supported by technology enhancements and be integrated 
into VBMS.
    The Pittsburgh RO began the Case-Managed Development Pilot in 
January 2010. The purpose of the pilot is to identify opportunities to 
reduce the time required to request and receive evidence, providing 
direct assistance to Veterans in compiling the necessary documentation 
to support their claims throughout the claims process. A second 
important aspect of the pilot is to enhance relationships and 
partnerships with our Veteran-clients through personal communications. 
Goals of the pilot include more personalized service to Veterans and 
greater advocacy on their behalf; more accurate decisions; and a more 
transparent understanding of VA's claims process.
    The fourth pilot, the Virtual Regional Office (VRO), has already 
produced excellent results. The single and focused purpose of the VRO 
pilot was to deliver the specifications for an implementable, 
professional-grade technical front end ``dashboard'' of the new system. 
This dashboard will enable VBMS users to do their jobs more efficiently 
and effectively. Based on the role of that individual user, the 
dashboard will provide relevant information about a Veteran's claim 
that will enable faster and more accurate processing of claims. The 
specifications were not developed in a vacuum but rather side-by-side 
with VBA employees who gave input to the developers. The initial field 
use of dashboard capabilities is scheduled to begin in November 2010, 
and will be primarily focused on testing the software. Each iterative 
version of the dashboard will add improved functions and tools. In 
fiscal year 2012, we will begin nationwide deployment of the end-to-end 
paperless claims process and software platform, VBMS.
    As mentioned earlier, VBMS is a critical business transformation 
initiative supported by the latest technology, and designed to improve 
VBA's ability to deliver important benefits to our Veterans, their 
families and survivors. VBMS is a holistic solution that integrates 
both a business transformation strategy (BTS) and a web-based, 21st 
Century paperless claims processing system which will significantly 
reduce VBA's reliance on the receipt, movement, and storage of paper. 
By eliminating the dependence on paper, VBA will be best positioned to 
make better use of available resources, regardless of geographic 
location.
    As noted earlier, VBMS will also provide services to other critical 
initiatives underway at VA including the Veterans Relationship 
Management initiative (VRM) and the Virtual Lifetime Electronic Record 
(VLER). Data captured through VBMS will be used to provide information 
to Veterans through VRM on the status of their claims and to update 
VLER. Integration of the various initiatives will allow us to provide 
our Veterans with new ways of interacting with VA in ways that meet 
their needs and are convenient for them.
    We recognize that technology is not the sole solution for our 
claims-processing challenges; however, it is the hallmark of a forward-
looking organization and must be at the core of our efforts. Combined 
with a renewed commitment and focus toward increasing advocacy for our 
Veterans, the VBMS strategy combines a business transformation and re-
engineering effort with enhanced technologies, giving an overarching 
and clear vision for improving service delivery to our Nation's 
Veterans.
Partnerships
    VBA recently partnered with the Department of Defense (DoD) to 
create the eBenefits portal (www.ebenefits.va.gov). The portal provides 
Servicemembers, Veterans, families, and care providers with a secure, 
single sign-on process to on-line benefits information and related 
services (such as military personnel records and status of VA claims). 
Servicemembers can use this eBenefits account while on active duty and 
as Veterans following separation, allowing both DoD and VA to provide 
benefit updates and to deploy the right benefit information at the 
right time. Future eBenefits releases will provide additional self-
service capabilities that empower users to electronically communicate 
with VA and DoD about their benefits and services from anywhere at 
anytime.
    VBA continues to meet with stakeholders to improve communication 
and to promote innovation. On April 8, 2010, VBA met with several of 
the largest Veterans Service Organizations (VSOs) to partner on ideas 
to help eliminate the backlog and increase quality. In June 2010, 
several VSOs traveled to Pittsburgh and Providence to observe pilot 
operations. We continue to meet with the VSOs on a regular basis to 
collaborate and develop proposals that have potential to boost our 
overall strategy. On June 8, 2010, we met with ``out of the box'' 
thinkers from various organizations to brainstorm new ways to improve 
the services that we provide to our Veterans. On June 10, 2010, we also 
met with our union partners, the American Federation of Government 
Employees (AFGE), to develop strategies to improve client service and 
eliminate the backlog. We will continue to examine every new idea from 
our employees and stakeholders that may assist us in our mission.
Conclusion
    Secretary Shinseki's goal is to transform VA into an organization 
that is Veteran-centric, results-driven, and forward-looking. At the 
same time, VA must deliver first-rate and timely health care, benefits, 
and other services to our Nation's Veterans, families and survivors. 
Nothing less will do. All of VA is moving forward aggressively and 
comprehensively to transform our claims process through a focused and 
multi-pronged approach. At its core, our team approach relies on three 
pillars: Culture, Reengineering business processes, and Technology and 
infrastructure. We look forward to working with Congress, VSOs, and 
other partners to meet our critical goals and the needs of 21st Century 
Veterans and their families.
    Mr. Chairman, this concludes my testimony. I will be happy to 
respond to any questions from you or other Members of the Subcommittee.
                   MATERIAL SUBMITTED FOR THE RECORD

                  U.S. Department of Veterans Affairs
                Electronic Work Measurement Application
                       Final Work Rate Standards
                             Prepared for:
                    Compensation and Pension Service
                    Veterans Benefits Administration
                           1800 G Street, NW
                          Washington, DC 20006
                             July 15, 2004
                            Deliverable #12
                      Under Contract GS-35F-4594G
           Document Control Number--1804328-Part 2/FWRS v1.0

Prepared by:

SRA International, Inc.
2000 15th Street North
Arlington, VA 22201
                               __________

                            TABLE OF CONTENTS



1.                Introduction......................................  73
2.                Data Consolidation and Preparation................  73
3.                Computation Approach..............................  73
4.                Work Measurement Analysis Tool....................  75
4.1               Analysis Tool Contents............................  75
4.1.1             High-Level Results and Parameter Settings.........  75
4.1.2             Detailed Model Results............................  76
4.1.3             Data Extracts.....................................  76
4.1.4             Characteristics of Former-VSD Work................  77
4.1.5             Input Data........................................  77
4.2.              Recalculating Work Rate Standards.................  77
4.2.1             Adding and Removing Stations......................  78
4.2.2             Changing Loading Methods..........................  78
4.2.3             Recalculating Work Rate Standards.................  79
5.                Draft Work Rate Standards.........................  79
5.1               Number of Observations per RO.....................  79
5.2               Summary Work Rate Standards.......................  80






APPENDIX A: EXCEL ANALYSIS WORKBOOKS................................  82

LIST OF FIGURES

  Figure 4-1. Select Stations for WRS Computation...................  78
  Figure 4-2. Recalculate WRS Button................................  79
  Figure 4-3. Calculations Complete Indicator.......................  79

LIST OF TABLES

  Table 5-1. Number of Observations per RO--April 2004..............  80
  Table 5-2. Number of Observations per RO/PMC--February-May 2004...  80
  [Table 5-3. Direct Labor Work Rate Standards, Non-Rating--April
 2004, Table 5-4. Direct Labor Work Rate Standards, Rating--April
 2004, Table 5-5. Direct Labor Work Rate Standards, Non-Rating--Feb-
 May 2004, Table 5-6. Direct Labor Work Rate Standards, Rating--Feb-
 May 2004, Table 5-7. Work Rate Standards--Loading Method 1--April
 2004, Table 5-8. Work Rate Standards--Loading Method 2--April 2004,
 Table 5-9. Work Rate Standards--Loading Method 3--April 2004, Table
 5-10. Work Rate Standards--Loading Method 4--April 2004, Table 5-
 11. Work Rate Standards--Loading Method 5--April 2004, Table 5-12.
 Work Rate Standards--Loading Method 1--Feb-May 2004, Table 5-13.
 Work Rate Standards--Loading Method 2--Feb-May 2004, Table 5-14.
 Work Rate Standards--Loading Method 3--Feb-May 2004, Table 5-15.
 Work Rate Standards--Loading Method 4--Feb-May 2004, Table 5-16.
 Work Rate Standards--Loading Method 5--Feb-May 2004 are being
 retained in the Committees files.]


1. INTRODUCTION
    Compensation and Pension (C&P) Service periodically performs work 
measurement studies in which it gathers data from regional offices 
(ROs) regarding the distribution of time spent on work activities. The 
purpose of these studies is to develop work rate standards that express 
the amount of effort normally required to complete various kinds of 
work. Work measurement studies gather data using a ``self-observation'' 
technique in which employees are intermittently asked to record their 
current activity. The goal is to gather enough random observations to 
develop reliable estimates of how employees distribute their work 
effort among various activities and end products (EPs).
    C&P Service collected work measurement data at 15 ROs, including 
three colocated Pension Maintenance Centers (PMCs), during the month of 
April 2004 (approximately 22 working days). Additional data were 
collected at the three colocated ROs and PMCs during February, March, 
and May 2004 (approximately 84 days including April). The additional 
sampling months were intended to capture the seasonal fluctuation in 
work flow and composition at the PMCs. Because there is less monthly 
variation in work flow and composition for the ROs' Veterans Service 
Center (VSC) work, C&P indicated it was sufficient to survey VSCs for 
only 1 month. The data collection periods were consistent with the 
corresponding monthly periods for which data on staff hours and 
completed end products were reported from the Veterans Benefits 
Administration's (VBA) automated systems.
    The work measurement data were collected using the Electronic Work 
Measurement Application (EWMA) for computer users and paper forms for 
outbased employees and others who do not use a computer at work. At 
most stations, file clerks, work study, and Virtual VA employees did 
not participate in the study, but their hours on duty for the study 
period were incorporated into loading factors, which are applied to the 
direct labor work rate standards. Section 3 provides more information 
about loading factors used in the work rate standard computations.
    This report describes the work rate standard development 
methodology, presents a summary of the data analysis results, including 
national work rate standards, and provides instructions for recomputing 
the work rate standards using various loading methods. Two sets of work 
rate standards were developed--one based on the 15 ROs surveyed in 
April, and the other based on the three ROs/PMCs surveyed from February 
through May.
2. DATA CONSOLIDATION AND PREPARATION
    The data consolidation process involved the following steps:

    1.  All paper forms were batched and entered into the database of 
work measurement observations.
    2.  One file was created that included all data collected in April. 
Another file was created that included all data collected at the ROs 
with colocated PMCs during the months of February through May.
    3.  Various cross-tabulations were run against the two files to 
provide the underlying raw data that support the analysis described in 
the remainder of the report.
3. COMPUTATIONAL APPROACH
    This section describes the methodology for calculating work rate 
standards. All steps were applied to both the April file and the 
February through May file.

    1.  Unusable work measurement observations--those either indicating 
an activity choice of ``Lunch/Leave/Loaned Time/Not Part of Study'' or 
time-stamped outside the work measurement period--were discarded.
    2.  The proportions of time spent on each EP were estimated for 
each participating RO by dividing the observation count for a 
particular EP by the total observation count for the station. For 
example, at Atlanta, 918 out of 36,927 total observations fell under EP 
110 (performed by rating staff or for a rating activity).\1\ Using 
these data, an estimated 2.5 percent of overall work time was spent 
performing rating activities on EP 110.
---------------------------------------------------------------------------
    \1\ The following activities were considered part of rating time: 
Prepare Rating (1d), Prepare/Review SOC/SSOC (2c), Conduct Hearing 
(2g), DRO Review (2h), and Prepare Rating--Appeal (2i). The Develop 
Claim--Not by Telephone (1c), Development of Appeal (2b), and 
Certification (2e) activities were also considered part of rating time 
when they were conducted by Rating Veteran Service Representatives 
(RVSR) or Decision Review Officers (DRO).
---------------------------------------------------------------------------
    3.  The number of hours spent on each end product at each RO were 
computed by multiplying the time proportions from the previous step by 
the staffing hours for the station. The time proportions were 
aggregated into non-rating 
 !!! NOTICE MANUAL BREAK AND FAKE FTNTS TO ADD EQUATION TO 
FTNT 4 TEXT !!!  deg.
     and rating groupings for each EP. For example, Atlanta had a total 
of 34,824 staffing hours for the study period, an estimated 2.5 percent 
of which was spent performing rating activities on EP 110. Combining 
these figures, an estimated 866 hours were spent performing rating 
activities on EP 110.
    4.  The effort required to complete one unit of each type of work 
was estimated by dividing the hours spent on each EP (as estimated in 
the previous step) by the completed work count for the study period.\2\ 
Separate computations were performed for rating and non-rating time. 
For example, Atlanta completed 466 EP 110s during the study period. 
Dividing the estimated time spent working on these EPs (866 hours) by 
the completed work count yields a direct labor (unloaded) rating work 
rate standard of 1.86 hours per unit.
    5.  Loading factors were computed to account for time spent on 
certain activities not directly related to final EPs or for activities 
that do not correspond to a measured work count. The treatment of 
loading factors was determined based on C&P input. The loading factors 
are as follows:

          Allowances were computed as the proportion of total 
        non-leave observations spent on the following four activities: 
        Personal Needs (Activity Code 8a), Office Maintenance (8b), 
        Unavoidable Delay (8c), and Self-Development/Informal Training 
        (8d).
          Adjustments for administrative EPs 330, 400, 930, and 
        960 were computed by prorating the observations over the time 
        spent on all other adjudication EPs. Separate adjustments were 
        computed for non-rating and rating time.
          A loading factor was computed to account for time 
        spent on Estate Management (9f). Observations for Estate 
        Management were prorated over the time spent on all other 
        Fiduciary and Field Exam (F&FE) EPs (EPs 1000 through 1008 and 
        Activity Code 9c), excluding Special Field Exams (9d).\3\
          Observations for EP 689 (Gulf Environment) were 
        spread over EPs 010, 020, and 110. This adjustment was 
        necessary because there were no completed work counts for EP 
        689 during the study period, therefore precluding the 
        calculation of a work rate standard for this EP.
          The Files loading factor was computed as the 
        proportion of EP-related observations spent on Review Mail (7a) 
        and Maintain/Update Files (7b), as well as manually collected 
        Files and work study time. The Supervision loading factor was 
        computed as the proportion of EP-related observations spent on 
        Supervision/Management (8e) and Supervisory WIPP Reviews (8h).
          Virtual VA time was spread over the PMC EPs 050, 150, 
        154, 155, and 314.

    Section 4 provides information on these factors, including a 
discussion of different methods for including them in the work rate 
standard calculations.

    6.  The loading factors calculated in the previous step were 
applied to the direct labor standards.
    7.  A statistical control procedure identified and removed 
individual station averages that were inconsistent with those from the 
other stations participating in the study. Control limits were 
established that are three standard deviations above and below the 
national work rate standards and the standards for each participating 
station.\4\ If any stations fell outside the national control limits 
(i.e., the station's control limits did not overlap the national 
control limits), the station farthest outside these boundaries was 
removed, and both the national average and its control limits were 
recalculated. This process was repeated until all of the remaining 
stations were within the control limits. NOTE: Stations with a work 
rate standard of zero were the first ones removed in the control filter 
process.

    The work rate standards are reported as uncontrolled and controlled 
figures--that is, before and after the application of Step 7 in the 
computational process.

------------
    \2\ Using completed work counts for a brief study period can be 
problematic if many types of processes require several months to 
complete. This calculation makes the assumption that work units are 
completed in an even flow, and that the number completed during the 
study period is reflective of the number worked on during the period. 
This assumption is questionable for low volume, long or highly varied 
duration, or seasonal work.
    \3\ Special Field Exams are measured in hours spent and do not have 
a work rate standard.
    \4\ The control limits are based on the proportion of time spent on 
each EP, as determined in Steps 2 and 3. Treating this proportion as a 
binomial distribution, the standard deviation around the estimated 
value is:             where p is the estimated proportion of time, and 
n is the number of observations used in estimating the proportion. The 
standard deviation around the estimated time proportion is applied to 
the staffing hours and completed work counts to develop control limits 
for the filtering process.
[GRAPHIC] [TIFF OMITTED] T7029A.004

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TO FTNT 4 TEXT !!!  deg.4. WORK MEASUREMENT ANALYSIS TOOL
    Appendix A contains two Microsoft Excel workbooks--the first, 
WRSCP_April2004_Final.xls, contains all the calculations to derive the 
work rate standards and other statistical descriptions of the data 
gathered for the 15 ROs during the month of April; the second, WRS-PMC-
VSC_Feb-May2004_Final.xls, does the same for the data gathered for the 
three ROs with colocated PMCs during the months of February through 
May. The structure and content of the worksheets in both files follow 
the same pattern and are described in Section 4.1. Section 4.2 provides 
instructions for modifying or recalculating the work rate standards 
within the worksheets.
4.1 Analysis Tool Contents
    There are 30 worksheets in each workbook. The worksheets are 
organized into five major sections:

    1.  The first three sheets display the high-level final results of 
the model calculations and allow analysts to specify parameters used in 
recalculating the work rate standards.
    2.  The next four sheets display detailed results and control 
sheets for non-rating and rating standards. The model uses these sheets 
to display calculation results only; analysts should not modify the 
data on these sheets manually.
    3.  The next 11 sheets contain data extracts that are used to 
calculate work rate standards or to provide different views of the 
aggregated data.
    4.  The seven sheets that follow contain breakouts of the 
characteristics of former-VSD work.
    5.  The last five sheets in the workbook contain the raw inputs to 
the work measurement calculations.
    A more detailed description of each worksheet is provided in 
Sections 4.1.1 through 4.1.5.
4.1.1 High-Level Results and Parameter Settings
    The first three worksheets show the high-level results of the 
workbook calculations and provide the capability to adjust several key 
parameters used in computing the work rate standards. The sheets in 
this section are as follows:

      NationalWRS shows the final results of the work rate 
standards calculations. This sheet contains one key input to the 
calculation process--the selection of a method for adjusting for 
allowances and indirect time.\5\ The method is entered into cell K1. 
The five method choices are as follows:
---------------------------------------------------------------------------
    \5\ All methods include adjustments for Allowances, Administrative 
EPs, and Estate Management time (for F&FE). Methods 2 through 5 include 
adjustments for Virtual VA time across designated PMC EPs. See Section 
3, Computational Approach, for more details.

          Method 1: Rating and Non-Rating Rubrics; Allowances 
        loaded in both rubrics proportionately.
          Method 2: Rating and Non-Rating Rubrics; Allowances 
        loaded in both rubrics proportionately; Non-Rating also 
        includes Files spread proportionately.
          Method 3: Rating and Non-Rating Rubrics; Allowances 
        loaded in both rubrics proportionately; Non-Rating also 
        includes Files and Supervision spread proportionately.
          Method 4: Rating and Non-Rating Rubrics; Allowances 
        loaded in both rubrics proportionately; Rating also includes 
        Files spread proportionately; Non-Rating also includes Files 
        spread proportionately.
          Method 5: Rating and Non-Rating Rubrics; Allowances 
        loaded in both rubrics proportionately; Rating also includes 
        Files and Supervision spread proportionately; Non-Rating also 
        includes Files and Supervision spread proportionately.

    The remainder of the sheet provides a summary of the calculation 
results. Specifically:

          Columns B and C show the national uncontrolled non-
        rating and rating work rate standards.
          Columns D and E show the control-filtered non-rating 
        and rating work rate standards.
          Columns F and G show the non-rating and rating work 
        rate standards for selected ROs. In these results the work rate 
        standards are based on the stations the analyst has chosen for 
        inclusion, as indicated on the Selected Non-Rating and 
        Selected_Rating worksheets.
          Columns H and I identify the stations that were 
        removed during the control filtering process.

      Selected Non-Rating allows the analyst to choose which 
stations will be used in the non-rating work rate standards. The 
worksheet consists of a matrix with EPs as rows and RO numbers as 
columns. To select an RO for inclusion in the final standards for an 
EP, enter a 1 in the RO's column; enter a 0 to exclude it. The work 
rate standards for the hand-selected ROs can be seen in the last 
column, as well as on the NationalWRS worksheet.
      Selected_Rating allows the analyst to choose which 
stations will be used in the rating work rate standards. The worksheet 
consists of a matrix with EPs as rows and RO numbers as columns. To 
select an RO for inclusion in the final standards for an EP, enter a 1 
in the RO's column; enter a 0 to exclude it. The work rate standards 
for the hand-selected ROs can be seen in the last column, as well as on 
the NationalWRS worksheet.
4.1.2 Detailed Model Results
    Detailed results of final work rate standards calculations are 
shown on four worksheets:

      Loaded_RO_WRS_NR displays the fully loaded non-rating 
work rate standards for each end product and each RO.
      Loaded_RO_WRS_Rating displays the fully loaded rating 
work rate standards for each end product and each RO.
      NR_Control displays the ``control sheets'' for all non-
rating work rate standards. For each end product, this sheet retraces 
the filtering steps used to remove outlier stations and recalculate the 
controlled national standards.
      Rating_Control displays the ``control sheets'' for all 
rating work rate standards. For each end product, this sheet retraces 
the filtering steps used to remove outlier stations and recalculate the 
controlled national standards.
4.1.3 Data Extracts
    The workbook contains 11 worksheets that provide aggregations and 
structured breakouts of the raw input data for use in calculating work 
rate standards. The worksheets in this section are as follows:

      RO_WRS_NR shows the direct labor (unloaded) non-rating 
work rate standards for all final end products.
      RO_WRS_Rat shows the direct labor (unloaded) rating work 
rate standards for all final end products.
      Loading_Factors shows the derivation of loading factors 
that account for time spent on certain activities not related to final 
end products. These adjustment factors are computed by station and for 
the Nation as a whole.
      EP_by_Act shows a breakdown of the time spent on each 
activity for each adjudication end product.
      EP_by_Team shows a breakdown of the time spent by each 
team for each adjudication end product.
      Team_by_EP shows a breakdown of the time spent on each 
adjudication end product by each team.
      Hours_OtherWork shows the number of hours spent on each 
of the activities that are not used in loading factor computations and 
not related to final end products. These activities include those that 
fall under Indirect Labor, Other Measured Work, Outreach, Training, 
Unmeasured Work and Special Field Exams.
      RO_Counts shows the number of work measurement 
observations by regional office for all final end products. The 
observations for Federal and Court Account Audits are grouped together 
because only a single work count was provided for the two activities 
combined. Observations for Special Field Exams were omitted because 
Special Field Exams are measured hour for hour and do not have a work 
rate standard. The observations are grouped across activities.
      RO_Rating_Counts shows the number of rating work 
measurement observations by regional office for all final end products. 
Rating observations included only those recorded under the Prepare 
Rating (1d), Prepare/Review SOC/SSOC (2c), Conduct Hearing (2g), DRO 
Review (2h), or Prepare Rating -Appeal (2i) activities; or the Develop 
Claim--Not by Telephone (1c), Development of Appeal (2b), and 
Certification (2e) activities when conducted by RVSRs or DROs.
      RO_Non_Rating_Counts shows the number of non-rating work 
measurement observations by regional office for all final end products. 
These figures are computed as the total observations (from RO_Counts) 
minus the rating observations (from RO_Rating_Counts).
      RO_Counts_Team shows the number of work measurement 
observations by work team for all end products, including 
administrative EPs, Special Field Exams and Estate Management.
4.1.4 Characteristics of Former-VSD Work
    The workbook contains seven worksheets that provide detail on the 
attributes of former-VSD work.\6\ The worksheets show a percentage 
breakdown of the time spent on claim-related and non-claim-related 
work. For claim-related work, the worksheets provide a breakdown of the 
adjudication EPs to which the work was related. For non-claim-related 
work, the worksheets show a breakdown by major subject. All breakdowns 
are shown for each station participating in the study and for the 
Nation as a whole. Each worksheet contains data for a different end 
product. The worksheets are organized as follows:
---------------------------------------------------------------------------
    \6\ In all cases, the breakouts refer to the distribution of work 
time, not the distribution of EP counts. For example, the figures show 
that 42 percent of telephone interview time is spent on claim-related 
calls in the month of April. This does not mean that 42 percent of 
calls are claim-related, since such calls may take a different amount 
of time than other calls.

      Telephone_Calls provides detail about the composition of 
telephone interview work.
      Personal_At_Office provides detail about the composition 
of ``at-office'' personal interview work.
      Personal_Away provides detail about the composition of 
``away-from-office'' personal interview work.
      Personal_Patient provides detail about the composition of 
patient interview work.
      Controlled_Corr provides detail about the composition of 
controlled correspondence work.
      Non-Controlled_Corr provides detail about the composition 
of non-controlled correspondence work.
      PA&FOIA_Corr provides detail about the composition of 
Privacy Act/Freedom of Information Act (FOIA) correspondence work.
4.1.5 Input Data
    The five worksheets at the end of the notebook contain the inputs 
to the work measurement calculations. Specifically:

      WorkCounts contains the completed work count figures for 
each end product at each regional office.
      StaffHours contains the total staffing hours during the 
study period for each participating station. The hours are adjusted for 
overtime worked during the study, compensatory time earned, borrowed 
time, compensatory leave used, loaned time, holiday hours, annual 
leave, sick leave, authorized absence, and non-GOE hours in the study. 
The manually collected file clerk, work study, and Virtual VA hours 
listed were incorporated into the loading factors computation in the 
Loading_Factors worksheet.
      Obs_Data contains a complete breakout of all work 
measurement observations collected during the study. Observation counts 
are shown by activity and by end product (where applicable) for each 
participating regional office.
      Rating_Obs_Data contains a complete breakout of all 
rating work measurement observations collected during the study. 
Observation counts are shown by activity and by end product (where 
applicable) for each participating regional office. Rating observations 
included only those recorded under the Prepare Rating (1d), Prepare/
Review SOC/SSOC (2c), Conduct Hearing (2g), DRO Review (2h), or Prepare 
Rating -Appeal (2i) activities; or the Develop Claim--Not by Telephone 
(1c), Development of Appeal (2b), and Certification (2e) activities 
when conducted by RVSRs or DROs.
      Team_Obs_Data contains a complete breakout of all work 
measurement observations collected during the study. Observation counts 
are shown by activity and by end product (where applicable) for each 
work team.
4.2 Recalculating Work Rate Standards
    As explained in Section 4.1, the workbook displays three different 
``views'' of the final work rate standards: 1) uncontrolled standards 
that include all stations participating in the work measurement study; 
2) controlled standards that show the final results after outlier 
stations have been removed using the filtering process; and 3) 
``selected'' standards that show the results for a group of stations 
chosen in the analysis. The workbook contains worksheets to add and 
remove stations for the ``selected'' standards. The workbook also 
provides the capability to compute work rate standards under 
alternative loading methods. These two scenarios are described in 
Sections 4.2.1 and 4.2.2, respectively.
4.2.1 Adding and Removing Stations
    The Selected Non-Rating and Selected_Rating worksheets provide the 
capability for analysts to choose which stations will be included in 
the final work rate standards. These worksheets can be used as an 
alternative to the controlled or uncontrolled standards that the model 
also provides. Figure 4-1 shows a screenshot of the Selected_Rating 
worksheet. To use these sheets, enter 1 to include a station in the 
work rate standard calculation for a particular EP, and 0 to exclude 
it.
            Figure 4-1. Select Stations for WRS Computation
[GRAPHIC] [TIFF OMITTED] T7029A.001


4.2.2 Changing Loading Methods
    The general process for loading work rate standards is as follows:

      Allowances were computed as the proportion of total non-
leave observations spent on the following four activities: Personal 
Needs (Activity Code 8a), Office Maintenance (8b), Unavoidable Delay 
(8c), and Self-Development/Informal Training (8d).
      Adjustments for administrative EPs 330, 400, 930, and 960 
were computed by prorating the observations over the time spent on all 
other adjudication EPs. Separate adjustments were computed for rating 
and non-rating time.
      Estate Management (9f) observations were prorated over 
the time spent on all other Fiduciary and Field Exam (F&FE) EPs (EPs 
1000 through 1008 and Activity Code 9c), excluding Special Field Exams 
(9d).\7\
---------------------------------------------------------------------------
    \7\ Special Field Exams are measured in hours spent and do not have 
a work rate standard.
---------------------------------------------------------------------------
      Observations for EP 689 (Gulf Environment) were spread 
over EPs 010, 020 and 110. This adjustment was necessary because there 
were no completed work counts for EP 689 during the study period, 
therefore precluding the calculation of a work rate standard for this 
EP.

    The loading method described above is known as Method 1 and is the 
default in the workbook. The workbook provides the capability to use 
four other methods, as follows:

      Method 2: Same as Method 1, with Files activities spread 
proportionately over non-rating time; Virtual VA time is spread over 
non-rating PMC EPs.\8\
---------------------------------------------------------------------------
    \8\ PMC EPs include 050, 150, 154, 155 and 314.
---------------------------------------------------------------------------
      Method 3: Same as Method 1, with Files and Supervision 
activities spread proportionately over non-rating time; Virtual VA time 
is spread over non-rating PMC EPs.
      Method 4: Same as Method 1, with Files activities spread 
proportionately over both rating and non-rating time; Virtual VA time 
is spread over both non-rating and rating PMC EPs.
     Method 5: Same as Method 1, with Files and Supervision 
activities spread proportionately over both rating and non-rating time; 
Virtual VA time is spread over non-rating and rating PMC EPs.

    To change loading methods, enter the number of the desired method 
in cell K1 on the NationalWRS worksheet.
4.2.3 Recalculating Work Rate Standards
    To recalculate the work rate standards after changing parameters, 
press the ``Calculate Work Rate Standards'' button on the NationalWRS 
worksheet. The button is located underneath cell K1 and is shown in 
Figure 4-2.

                   Figure 4-2. Recalculate WRS Button

[GRAPHIC] [TIFF OMITTED] T7029A.002


    Depending on the processing speed of the computer, the calculation 
may take more than a minute to finish. The worksheet will display the 
message shown in Figure 4-3 when the calculation process is complete. 
Wait for this message before continuing with other operations in the 
workbook.

              Figure 4-3. Calculations Complete Indicator

[GRAPHIC] [TIFF OMITTED] T7029A.003


5. DRAFT WORK RATE STANDARDS
    This section summarizes the work measurement study data collected 
and presented in the worksheets in Appendix A, including a summary of 
the:

      Total number of observations per RO.
     Work rate standards.
5.1 Number of Observations per RO

    Tables 5-1 and 5-2 show the total number of observations recorded 
at each RO, broken down by observations collected from EWMA and paper 
forms, and abstracted from manually-collected file clerk, work study, 
and Virtual VA hours on duty.\9\ The tables also show the total non-
leave observations recorded at each RO (all observations excluding 
Activity Code 8q: Lunch/Leave/Loaned Time/Not Part of Study). Table 5-1 
presents the figures from the first file (15 ROs surveyed in April) and 
Table 5-2 presents the figures from the second file (three ROs/PMCs 
surveyed from February through May).
---------------------------------------------------------------------------
    \9\ Portions of file clerk, work study, and Virtual VA time were 
distributed to lunch, leave, breaks, and other related ``downtime'' 
activities (Activity Codes 8q and 8a-8d).
---------------------------------------------------------------------------
    Non-leave observations totaling 639,145 were recorded at all 15 ROs 
during the April study period. Approximately 6.3 percent of the total 
non-leave observations came from paper forms. Approximately 10.8 
percent of the total non-leave observations came from paper forms and 
file clerk, work study, and Virtual VA hours combined.

                              Table 5-1. Number of Observations per RO--April 2004
----------------------------------------------------------------------------------------------------------------
                                                     Paper Forms  Files/Work Study/                 Total Non-
                  RO                        EWMA                      Virtual VA        Total          Leave
----------------------------------------------------------------------------------------------------------------
Atlanta                                      35,377        2,082              2,400       39,859          36,927
----------------------------------------------------------------------------------------------------------------
Baltimore                                    24,857          592              1,416       26,865          25,001
----------------------------------------------------------------------------------------------------------------
Buffalo                                      27,629        2,652                  0       30,281          26,894
----------------------------------------------------------------------------------------------------------------
Denver                                       27,655        9,025              1,241       37,921          34,244
----------------------------------------------------------------------------------------------------------------
Jackson                                      31,985        2,020                391       34,396          31,633
----------------------------------------------------------------------------------------------------------------
Little Rock                                  26,187        4,176                623       30,986          28,950
----------------------------------------------------------------------------------------------------------------
Manchester                                    8,764          485                304        9,553           8,779
----------------------------------------------------------------------------------------------------------------
Milwaukee                                    61,606        1,619              3,750       66,975          61,925
----------------------------------------------------------------------------------------------------------------
Muskogee                                     55,904        3,510              2,800       62,214          57,558
----------------------------------------------------------------------------------------------------------------
Philadelphia                                 84,704        3,252              7,274       95,230          87,832
----------------------------------------------------------------------------------------------------------------
Reno                                         19,128            0              1,184       20,312          18,961
----------------------------------------------------------------------------------------------------------------
Roanoke                                      54,752        4,452              2,902       62,106          57,029
----------------------------------------------------------------------------------------------------------------
Seattle                                      46,892        5,799              1,136       53,827          49,154
----------------------------------------------------------------------------------------------------------------
St. Louis                                    53,040        3,474                394       56,908          52,472
----------------------------------------------------------------------------------------------------------------
St. Paul                                     60,556        1,407              4,810       66,773          61,786
----------------------------------------------------------------------------------------------------------------
Total                                       619,036       44,545             30,625      694,206         639,145
----------------------------------------------------------------------------------------------------------------

    Non-leave observations totaling 837,300 were recorded at all three 
ROs/PMCs during the February through May study period. Approximately 
2.9 percent of the total non-leave observations came from paper 
forms.\10\ Approximately 9.7 percent of the total non-leave 
observations came from paper forms and file clerk, work study, and 
Virtual VA hours combined.
---------------------------------------------------------------------------
    \10\ One envelope of May St. Paul paper forms was lost in the mail. 
Missing observations were accounted for by increasing the number of 
existing May paper observations proportionally based on the average 
daily observations from February through April.

                         Table 5-2. Number of Observations per RO/PMC--February-May 2004
----------------------------------------------------------------------------------------------------------------
                                                     Paper Forms  Files/Work Study/                 Total Non-
                  RO                        EWMA                      Virtual VA        Total          Leave
----------------------------------------------------------------------------------------------------------------
Milwaukee                                   249,889        6,853             14,689      271,431         251,691
----------------------------------------------------------------------------------------------------------------
Philadelphia                                333,966       13,068             27,435      374,469         345,074
----------------------------------------------------------------------------------------------------------------
St. Paul                                    236,912        5,095             19,006      261,013         240,535
----------------------------------------------------------------------------------------------------------------
Total                                       820,767       25,016             61,130      906,913         837,300
----------------------------------------------------------------------------------------------------------------

5.2 Summary Work Rate Standards
    Tables 5-3 and 5-4 show the direct labor (unloaded) work rate 
standards for each EP at each regional office for the first file (15 
ROs surveyed in April). Table 5-3 lists the non-rating work rate 
standards and Table 5-4 lists the rating work rate standards.
Table 5-3. Direct Labor Work Rate Standards, Non-Rating--April 2004 
        [Being retained in the Committee files]
Table 5-4. Direct Labor Work Rate Standards, Rating--April 2004 [Being 
        retained in the Committee files]

    Tables 5-5 and 5-6 show the direct labor (unloaded) work rate 
standards for each EP at each regional office for the second file 
(three ROs/PMCs surveyed from February through May). Table 5-5 lists 
the non-rating work rate standards, and Table 5-6 lists the rating work 
rate standards.
Table 5-5. Direct Labor Work Rate Standards, Non-Rating--Feb-May 2004 
        [Being retained in the Committee files]
Table 5-6. Direct Labor Work Rate Standards, Rating--Feb-May 2004 
        [Being retained in the Committee files]

    For the 15 ROs surveyed in April, Tables 5-7 through 5-11 show the 
work rate standards for each EP, reported both as uncontrolled and 
controlled figures--that is, before and after the application of Step 7 
in the Computational Approach--and using each of the five loading 
methods. For each EP, ROs with a work rate standard of zero were the 
first ones removed in the control filter process.
    NOTE: The unusually high non-rating work rate standard for Non-
Program field exams may be attributed to either incorrect user 
recording of work observations or to a very low number of completed 
work counts during April 2004. Work rate standard computations using 
low work counts are especially susceptible to error.
Table 5-7. Work Rate Standards--Loading Method 1--April 2004 [Being 
        retained in the Committee files]
Table 5-8. Work Rate Standards--Loading Method 2--April 2004 [Being 
        retained in the Committee files]
Table 5-9. Work Rate Standards--Loading Method 3--April 2004 [Being 
        retained in the Committee files]
Table 5-10. Work Rate Standards--Loading Method 4--April 2004 [Being 
        retained in the Committee files]
Table 5-11. Work Rate Standards--Loading Method 5--April 2004 [Being 
        retained in the Committee files]

    For the three ROs/PMCs surveyed from February through May, Tables 
5-12 through 5-16 show the work rate standards for each EP, reported 
both as uncontrolled and controlled figures--that is, before and after 
the application of Step 7 in the Computational Approach--and using each 
of the five loading methods. For each EP, ROs/PMCs with a work rate 
standard of zero were the first ones removed in the control filter 
process.
    NOTES: Both non-rating and rating national work rate standards for 
EP 010 \11\ for the three ROs/PMCs surveyed from February through May 
are markedly higher than those computed for the 15 ROs surveyed during 
April:
---------------------------------------------------------------------------
    \11\ The work rate standard for EP 010 includes observations 
recorded for EP 011.

      The higher non-rating work rate standard for the 4-month 
study period stems from a greater amount of time spent on EPs 010 and 
011 during February at Philadelphia and St. Paul, and a low number of 
completed work counts across all three stations. C&P hypothesizes that 
the return to normal work following the moratorium on particular EPs 
during Fall of 2003 may have affected the way work was done in the 
immediate months following the moratorium's removal.
      The higher rating work rate standard for the 4-month 
study period results from extremely high standards for Philadelphia. A 
disproportionately greater amount of time was spent on EPs 010 and 011 
at Philadelphia. Philadelphia spent more than four times longer on EP 
010s and more than 11 times longer on EP 011s than did St. Paul and 
Milwaukee, while the completed work counts produced at Philadelphia did 
not increase proportionally.\12\ C&P attributes this greater amount of 
rating time spent on EPs 010 and 011 to the existence of a Resource 
Center located at the Philadelphia RO.
---------------------------------------------------------------------------
    \12\ EP 011 can be the most time consuming as it contains more 
issues than EPs 010 and 110.
---------------------------------------------------------------------------
Table 5-12. Work Rate Standards--Loading Method 1--Feb-May 2004 [Being 
        retained in the Committee files]
Table 5-13. Work Rate Standards--Loading Method 2--Feb-May 2004 [Being 
        retained in the Committee files]
Table 5-14. Work Rate Standards--Loading Method 3--Feb-May 2004 [Being 
        retained in the Committee files]
Table 5-15. Work Rate Standards--Loading Method 4--Feb-May 2004 [Being 
        retained in the Committee files]
Table 5-16. Work Rate Standards--Loading Method 5--Feb-May 2004 [Being 
        retained in the Committee files]

                  APPENDIX A: EXCEL ANALYSIS WORKBOOKS
    (Two additional files are provided under separate cover.)