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Testimony: 

Before the Subcommittee on Disability Assistance and Memorial Affairs, 
Committee on Veterans' Affairs, House of Representatives: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 2:00 p.m. EDT:
Wednesday, March 24, 2010: 

Veterans' Disability Benefits: 

VA Has Improved Its Programs for Measuring Accuracy and Consistency, 
but Challenges Remain: 

Statement of Daniel Bertoni, Director: 
Education, Workforce, and Income Security: 

GAO-10-530T: 

GAO Highlights: 

Highlights of GAO-10-530T, a testimony before the Subcommittee on 
Disability Assistance and Memorial Affairs, Committee on Veterans’ 
Affairs, House of Representatives. 

Why GAO Did This Study: 

For years, in addition to experiencing challenges in making disability 
claims decisions more quickly and reducing its claims backlog, the 
Department of Veterans Affairs (VA) has faced challenges in improving 
the accuracy and consistency of its decisions. 

GAO was asked to discuss issues surrounding VA’s Systematic Technical 
Accuracy Review (STAR) program, a disability compensation and pension 
quality assurance program, and possible ways, if any, this program 
could be improved. 

This statement focuses on actions VA has taken; including those in 
response to past GAO recommendations, to (1) address identified 
weaknesses with STAR and (2) improve efforts to monitor the 
consistency of claims decisions. This statement is based on GAO’s 
prior work, which examined several aspects of STAR, as well as VA’s 
consistency review activities, and on updated information GAO obtained 
from VA on quality assurance issues that GAO and VA’s Office of 
Inspector General (OIG) have identified. GAO also reviewed VA’s OIG 
March 2009 report on STAR. 

What GAO Found: 

Over the past several years, GAO has identified several deficiencies 
with the Veterans Benefit Administration’s (VBA) STAR program, and 
although VBA has taken actions to address these issues, it continues 
to face challenges in improving claims accuracy. For example, GAO 
found that STAR reviewers lacked organizational independence, a basic 
internal control principle. In response to our finding, VA began 
utilizing organizationally independent reviewers that do not make 
claims decisions. GAO also found that sample sizes for pension claims 
were insufficient to provide assurance about decision accuracy. In 
response to GAO’s recommendation, in fiscal year 2009, VA began 
increasing the number of pension claims decisions it reviews annually 
at each of its offices that process pension decisions. VA has also 
taken a number of other steps to address weaknesses that VA’s OIG 
found in the STAR program, including (1) establishing minimum annual 
training requirements for reviewers and (2) requiring additional 
supervisory review of STAR reviewers’ work. Although it has made or 
has started making these improvements, VBA remains challenged to 
improve its decision accuracy for disability compensation decisions, 
and it has not met its stated accuracy goal of 90 percent. VBA’s 
performance has remained about the same over the past several fiscal 
years. 

In addition, VA has taken steps to address deficiencies that GAO and 
the VA’s OIG have identified with consistency reviews—assessments of 
the extent to which individual raters make consistent decisions on the 
same claims. For example, in prior work, GAO reported that VA did not 
conduct systematic studies of impairments that it had identified as 
having potentially inconsistent decisions. In response to GAO’s 
recommendation, in fiscal year 2008, VBA’s quality assurance staff 
began conducting studies to monitor the extent to which veterans with 
similar disabilities receive consistent ratings across regional 
offices and individual raters. However, last year, VA’s OIG reported 
that VA had not followed through on its plans to conduct such reviews. 
In response to this and other OIG findings and recommendations, VA 
took a number of actions, including developing an annual consistency 
review schedule and hiring additional quality assurance staff. 
However, VBA has only recently begun these programs to improve 
consistency, and it is too early to assess the effectiveness of their 
actions. 

What GAO Recommends: 

GAO is not making any new recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-10-530T] or key 
components. For more information, contact Daniel Bertoni at (202) 512-
7215 or bertonid@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to have the opportunity to comment on the Department of 
Veterans Affairs' (VA) efforts to improve the accuracy and consistency 
of its disability compensation and pension benefit decisions. As we 
and other organizations have reported over the last decade, VA's 
claims processing challenges are not limited to making decisions more 
quickly and reducing its claims backlog; but also includes improving 
the accuracy and consistency of its decisions. The number of veterans 
awaiting decisions could grow as service members returning from 
ongoing conflicts and aging veterans submit claims. According to VA, 
about 35 percent of veterans from ongoing hostilities file claims. It 
is important not only that decisions be timely, but also accurate. 
Accurate initial claims decisions can help ensure that VA is paying 
cash disability benefits to those entitled to such benefits and also 
help prevent lengthy appeals. Meanwhile, consistent decisions help 
ensure that comparable medical conditions of veterans are rated the 
same, regardless of which VA regional benefits office processes the 
claim. 

You asked us to discuss issues surrounding VA's disability 
compensation and pension quality assurance programs; particularly, the 
Systematic Technical Accuracy Review (STAR) program. My statement 
focuses on STAR, which deals with accuracy, and two other VA quality 
assurance activities that focus on consistency.[Footnote 1] More 
specifically, my remarks will focus on actions VA has taken to (1) 
address deficiencies identified with STAR and (2) improve efforts to 
monitor the consistency of claim decisions. This statement is based on 
our prior work, which examined several aspects of STAR, as well as 
VA's consistency review programs, and on updated information we 
obtained from VA on quality assurance vulnerabilities that we and VA's 
Office of Inspector General (OIG) have identified. We also reviewed VA 
OIG's March 2009 report on STAR and consistency reviews.[Footnote 2] 
Our work was conducted in accordance with generally accepted 
government auditing standards. Those standards require that we plan 
and perform the audit to obtain sufficient, appropriate evidence to 
provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

Through its disability compensation program, VA pays monthly benefits 
to veterans with service-connected disabilities.[Footnote 3] Under its 
disability pension program, VA pays monthly benefits to low-income 
veterans who have disabilities not related to their military service 
or are age 65 or older. VA also pays compensation to the survivors of 
certain veterans who had service-connected disabilities and of 
servicemembers who died while on active duty. 

Veterans and their survivors claim benefits at one of the Veterans 
Benefits Administration's (VBA) 57 regional offices. Once the claim is 
received, a service representative assists the veteran in gathering 
the relevant evidence to evaluate the claim. Such evidence includes 
the veteran's military service records, medical examinations, and 
treatment records from VA medical facilities and private medical 
service providers. Also, if necessary for reaching a decision on a 
claim, the regional office arranges for the veteran to receive a 
medical examination. Once all necessary evidence has been collected, a 
rating specialist evaluates the claim and determines whether the 
claimant is eligible for benefits. If so, the rating specialist 
assigns a percentage rating. Veterans with multiple disabilities 
receive a single composite rating. Since 2001, VBA has created 15 
resource centers that are staffed exclusively to process claims or 
appeals from backlogged regional offices. Most of these centers focus 
either on making rating decisions, or on developing the information 
needed to evaluate claims. 

In addition to the traditional claims process, any member of the armed 
forces who has seen active duty--including those in the National Guard 
or Reserves--is eligible to apply for VA disability benefits prior to 
leaving military service through VA's Benefits Delivery at Discharge 
(BDD) program or the related Quick Start program.[Footnote 4] In 2006, 
VA completed its consolidation of BDD rating activity into its Salt 
Lake City, Utah, and Winston-Salem, North Carolina, regional offices, 
to increase the consistency of BDD claims decisions. Also, under the 
Department of Defense (DOD)-VA disability evaluation system pilot 
program, servicemembers undergoing disability evaluations, if found 
medically unfit for duty, receive VA disability ratings. This rating 
covers both the unfitting conditions identified by the military 
service and conditions identified by the servicemember during the 
process. The rating is used by both DOD and VA to determine 
entitlement for disability benefits.[Footnote 5] 

Enacted in October 2008, the Veterans' Benefits Improvement Act of 
2008 required VA to contract for an independent, 3-year review of 
VBA's quality assurance program.[Footnote 6] This review is to 
include, among other items, assessments of the accuracy of disability 
ratings and their consistency across VA regional offices. VA 
contracted with the Institute for Defense Analyses (IDA) to conduct 
this study. According to VA, IDA will provide preliminary findings in 
the Summer of 2010, and VA is scheduled to report to the Congress in 
October 2011. 

STAR Program: 

Under the STAR program, which was implemented in fiscal year 1999, VBA 
selects a random sample of completed claims decisions each month from 
each of its regional offices to review for accuracy. STAR reviewers 
assess decision accuracy using a standard checklist. For decisions 
affecting benefit entitlement, this review includes an assessment of 
whether (1) all issues in the claim were addressed; (2) assistance was 
provided to the claimant, as required by the Veterans Claims 
Assistance Act of 2000; and (3) the benefit entitlement decision was 
correct. If a claim has any error, VBA counts the entire claim as 
incorrect for accuracy rate computation purposes. The STAR reviewer 
then returns the case file and the results of the review to the 
regional office that made the decision. If an error was found, the 
regional office is required to either correct it or request 
reconsideration of the error determination. VBA uses the national 
accuracy rate from STAR reviews of compensation entitlement decisions 
as one of its key claims processing performance measures. VA also uses 
STAR data to estimate improper compensation and pension benefit 
payments. 

Consistency Review Activities: 

One VA consistency review activity involves conducting studies of 
regional offices' decisions on specific conditions such as post- 
traumatic stress disorder where VBA found differences, such as in 
benefit grant rates, across regional offices through comparative 
statistical analysis. VBA uses the results of these reviews to 
identify root causes of inconsistencies and to target training. Under 
another VA consistency review activity, called inter-rater reliability 
reviews, VBA provides rating specialists a sample case file to assess 
how well raters from various regional offices agree on an eligibility 
determination when reviewing the same body of evidence. These reviews 
allow VBA officials to target a single rating issue and take remedial 
action to ensure the consistent application of policies and procedures 
nationally. 

VA Has Implemented Procedures to Address Deficiencies Identified with 
the STAR Program, but Continues to Face Challenges in Improving 
Accuracy: 

Over the past decade, VBA has taken several actions to improve its 
STAR program and to address deficiencies identified by both GAO and 
VA's OIG. For example, in March 1999, we found that STAR review staff 
lacked sufficient organizational independence because they were also 
responsible for making claims decisions and reported to regional 
office managers responsible for claims processing.[Footnote 7] In 
response to our findings, VBA took steps to address this by utilizing 
reviewers who do not process claims and who do not report to managers 
responsible for claims processing. More recently, in February 2008, we 
found that STAR was not sampling enough initial pension claims to 
ensure the accuracy of pension claims decisions.[Footnote 8] Because 
initial pension claims constituted only about 11 percent of the 
combined compensation and pension caseload subject to accuracy review, 
few were likely to be included in the STAR review sample. We 
recommended that VBA take steps to improve its quality assurance 
review of initial claims, which could include reviewing a larger 
sample of pension claims. According to VBA, it has addressed this 
issue by consolidating pension claims processing in its three Pension 
Management Centers[Footnote 9] and establishing a separate STAR sample 
for pension claims. During fiscal year 2009, VBA began reviewing more 
pension claim decisions and reported that, for fiscal year 2009, its 
pension entitlement accuracy was 95 percent, exceeding its goal. 

In a September 2008 report, we noted that VA lacked sufficient and 
specific performance measures for assessing the accuracy of decisions 
on BDD claims and recommended that VA consider options for separately 
estimating the accuracy of such claims decisions.[Footnote 10] VA 
conducted an analysis of the costs of sampling pre-discharge claims as 
part of STAR and concluded that the costs would outweigh possible, 
unquantifiable benefits. VA also noted that the two sites that rate 
BDD claims surpassed the national average in accuracy for claims 
overall.[Footnote 11] While generally responsive to our 
recommendation, VA's analysis did not specifically review the accuracy 
of BDD claims relative to traditional claims. Moreover, because BDD 
claims do not comprise all claims reviewed at the two rating sites, we 
continue to believe VA's analysis was not sufficient to estimate the 
relative accuracy of BDD claims at these sites. While we agree that 
the benefits of reviewing accuracy are difficult to measure, if VA had 
better information on the accuracy of BDD claims, VA could use such 
information to inform training and focus its monitoring efforts. In 
contrast, VA currently performs STAR reviews that target rating 
decisions made by its Baltimore and Seattle offices under the DOD-VA 
disability evaluation system pilot program. Such a targeted review 
could also be conducted for BDD claims. 

In its March 2009 report, VA's OIG also identified several 
deficiencies in the STAR program and recommended corrective actions. 
The OIG found that (1) regional offices did not always submit all 
requested sample cases for review, (2) reviewers did not evaluate all 
documentation in sample files, and (3) reviewers were not properly 
recording some errors. The OIG also found that VBA was not conducting 
STAR reviews of redistributed cases (for example, claims assigned to 
resource centers for rating). The OIG reviewed a sample of 
redistributed claims and found that 69 percent had accurate 
entitlement decisions, well below VBA's reported rate of 87 percent 
for the 12-month period ending in February 2008. Further, the OIG 
found that VBA did not have minimum training requirements for STAR 
reviewers. 

As of March 2010, VBA had taken actions to respond to all of the OIG's 
recommendations related to STAR, including (1) implementing procedures 
to follow up on cases not submitted by regional offices; (2) adding a 
mechanism to the STAR database to remind reviewers of key decision 
points; (3) requiring a second-level review of STAR reviewers' work; 
and (4) establishing a requirement that STAR reviewers receive 80 
hours of training per year. In addition, during fiscal year 2009, 
based in part on the OIG's recommendation, VBA also began monitoring 
the accuracy of claims decided by rating resource centers as it does 
for regional offices. As we noted in our January 2010 report, VBA has 
significantly expanded its practice of redistributing regional 
offices' disability claims workloads in recent years,[Footnote 12] and 
gathering timeliness and accuracy data on redistributed claims could 
help VBA assess the effectiveness of workload redistribution. 

In addition, as the Congress has provided more resources to VBA to 
increase compensation and pension staffing, VBA has devoted more 
resources to quality review. In fiscal year 2008, VBA more than 
doubled the size of the quality assurance staff, allowing it to 
increase the scope of quality assurance reviews. VA states that in the 
12-month period ending in May 2009, STAR staff reviewed over 14,000 
compensation and pension benefit entitlement decisions. 

Although VBA has taken steps to address deficiencies in the STAR 
program, the accuracy of its benefit entitlement decisions has not 
improved. The accuracy rate was 86 percent in fiscal year 2008 and 84 
percent in fiscal year 2009, well short of VBA's fiscal year 2009 goal 
of 90 percent.[Footnote 13] VA attributed this performance to the 
relatively large number of newly hired personnel conducting claims 
development work and a general lack of training and experience. Human 
capital challenges associated with providing the needed training and 
acquiring the experience these new claims processors need to become 
proficient at their jobs will likely continue in the near future. 
According to VBA officials, it can take 3 to 5 years for rating 
specialists to become proficient. 

VA Has Taken Actions to Strengthen Efforts to Monitor Consistency of 
Claims Decisions: 

VA has taken actions to address deficiencies identified with its 
consistency review programs, but it is still too early to determine 
whether these actions will be effective. In prior work, we reported 
that VBA did not systematically assess the consistency of decision 
making for any specific impairments included in veterans' disability 
claims. We noted that if rating data identified indications of 
decision inconsistency, VA should systematically study and determine 
the extent and causes of such inconsistencies and identify ways to 
reduce unacceptable levels of variations among regional offices. Based 
on our recommendation, VBA's quality assurance staff began conducting 
studies to monitor the extent to which veterans with similar 
disabilities receive consistent ratings across regional offices and 
individual raters.[Footnote 14] VBA began these studies in fiscal year 
2008. VBA identified 61 types of impairments for consistency review 
and conducted at least two inter-rater reliability reviews, which 
found significant error rates. 

In its March 2009 report, the OIG noted that, while VBA had developed 
an adequate rating consistency review plan, including metrics to 
monitor rating consistency and a method to identify variances in 
compensation claim ratings, it had not performed these reviews as 
scheduled. In fact, VBA had initiated only 2 of 22 planned consistency 
reviews in fiscal year 2008. The OIG reported that VBA had not 
conducted these reviews because STAR staffing resources were not 
sufficient to perform all of their assigned responsibilities and noted 
that VBA's quality review office had not staffed all of its authorized 
positions. In addition, the OIG found that inter-rater reliability 
reviews were not included in VBA's quality assurance plan. The OIG 
recommended that VBA (1) develop an annual rating consistency review 
schedule and complete all planned reviews as scheduled; (2) dedicate 
sufficient staff to conduct consistency reviews in order to complete 
planned workload and reviews; and (3) include inter-rater reliability 
reviews as a permanent component of its consistency review program. 

VBA reported that it has developed an annual consistency review 
schedule and is in the process of conducting scheduled fiscal year 
2010 reviews. As of January 2010, VBA also added six staff members to 
perform quality assurance reviews. Further, VBA incorporated inter- 
rater reliability reviews into its fiscal year 2009 quality assurance 
plan. Because VBA has only recently implemented these initiatives, it 
is too early to determine their impact on the consistency of claims 
decisions. 

Conclusion: 

Over the years, VA has been challenged in its efforts to ensure that 
veterans get the correct decisions on disability claims the first time 
they apply for them, regardless of where the claims are decided. 
Making accurate, consistent, and timely disability decisions is not 
easy, but it is important. Our veterans deserve timely service and 
accurate decisions regardless of where their claims for disability 
benefits are processed. To fulfill its commitment to quality service, 
it is imperative that VA continue to be vigilant in its quality 
assurance efforts, as this challenge will likely become even more 
difficult as aging veterans and veterans returning from ongoing 
conflicts add to VA's workload. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 
to respond to any questions you or Members of the Subcommittee may 
have at this time. 

GAO Contact and Staff Acknowledgments: 

[End of section] 

For further information about this testimony, please contact Daniel 
Bertoni at (202) 512-7215 or bertonid@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this testimony. In addition to the contact named 
above, key contributors to this statement include Shelia Drake, 
Jessica Orr, Martin Scire, and Greg Whitney. 

[End of section] 

Related GAO Products: 

Veterans' Disability Benefits: Further Evaluation of Ongoing 
Initiatives Could Help Identify Effective Approaches for Improving 
Claims Processing. [hyperlink, 
http://www.gao.gov/products/GAO-10-213]. Washington, D.C.: January 29, 
2010. 

Veterans' Disability Benefits: Preliminary Findings on Claims 
Processing Trends and Improvement Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-09-910T]. Washington, D.C.: July 29, 
2009. 

Military Disability System: Increased Supports for Servicemembers and 
Better Pilot Planning Could Improve the Disability Evaluation Process. 
[hyperlink, http://www.gao.gov/products/GAO-08-1137]. Washington, 
D.C.: September 24, 2008. 

Veterans' Disability Benefits: Better Accountability and Access Would 
Improve the Benefits Delivery at Discharge Program. [hyperlink, 
http://www.gao.gov/products/GAO-08-901]. Washington, D.C.: September 
9, 2008. 

Veterans' Benefits: Improved Management Would Enhance VA's Pension 
Program. [hyperlink, http://www.gao.gov/products/GAO-08-112]. 
Washington, D.C.: February 14, 2008. 

Veterans' Benefits: Further Changes in VBA's Field Office Structure 
Could Help Improve Disability Claims Processing. [hyperlink, 
http://www.gao.gov/products/GAO-06-149]. Washington, D.C.: December 9, 
2005. 

Veterans Benefits: VA Needs Plan for Assessing Consistency of 
Decisions. [hyperlink, http://www.gao.gov/products/GAO-05-99]. 
Washington, D.C.: November 19, 2004. 

VA Disability Benefits: Routine Monitoring of Disability Decisions 
Could Improve Consistency. [hyperlink, 
http://www.gao.gov/products/GAO-06-120T]. Washington, D.C.: October 
20, 2005. 

Veterans' Benefits: Improvements Needed in the Reporting and Use of 
Data on the Accuracy of Disability Claims Decisions. [hyperlink, 
http://www.gao.gov/products/GAO-03-1045]. Washington, D.C.: September 
30, 2003. 

Veterans' Benefits: Quality Assurance for Disability Claims and 
Appeals Processing Can Be Further Improved. [hyperlink, 
http://www.gao.gov/products/GAO-02-806]. Washington, D.C.: August 16, 
2002. 

Veterans' Benefits: Quality Assurance for Disability Claims 
Processing. [hyperlink, http://www.gao.gov/products/GAO-01-930R]. 
Washington, D.C.: August 23, 2001. 

Veterans' Benefits Claims: Further Improvements Needed in Claims- 
Processing Accuracy. [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-35]. Washington, D.C.: March 
1, 1999. 

[End of section] 

Footnotes: 

[1] These are (1) reviews of consistency of claims decisions across 
VA's Veterans Benefits Administration, which is responsible for 
administering VA's disability compensation and pension programs, by 
type of disabling condition; and (2) inter-rater reliability reviews, 
which examine the consistency of raters when evaluating the same 
condition based on a comparable body of evidence. 

[2] Office of Inspector General, Department of Veterans Affairs, Audit 
of Veterans Benefits Administration Compensation Accuracy and 
Consistency Reviews (Washington, D.C.: Mar. 12, 2009). 

[3] The amount of disability compensation depends largely on the 
severity of the disability, which VA measures in 10 percent increments 
on a scale of 0 percent to 100 percent. In 2010, basic monthly 
payments for veterans range from $123 for 10 percent disability to 
$2,673 for 100 percent disability. 

[4] In order to be eligible for the BDD program, servicemembers must 
meet several requirements, which include filing a VA claim 60 to 180 
days prior to an honorable discharge and completing a medical 
examination. Under BDD, the examination also serves as Department of 
Defense's separation physical examination. Quick Start is for those 
servicemembers-primarily members of the National Guard and Reserve--
who cannot meet the BDD timeframe. 

[5] For our review of the DOD-VA disability evaluation system pilot 
program, see GAO, Military Disability System: Increased Supports for 
Servicemembers and Better Pilot Planning Could Improve the Disability 
Evaluation Process, [hyperlink, 
http://www.gao.gov/products/GAO-08-1137] (Washington, D.C.: Sept. 24, 
2008). 

[6] Pub. L. No. 110-389, §224; 38 U.S.C. §7731(c). 

[7] GAO, Veterans' Benefits Claims: Further Improvements Needed in 
Claims-Processing Accuracy, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-35] (Washington, D.C.: Mar. 1, 
1999). 

[8] GAO, Veterans' Benefits: Improved Management Would Enhance VA's 
Pension Program, [hyperlink, http://www.gao.gov/products/GAO-08-112] 
(Washington, D.C.: Feb. 14, 2008). 

[9] The Pension Management Centers are located in St. Paul, Minnesota; 
Philadelphia, Pennsylvania; and Milwaukee, Wisconsin. 

[10] GAO, Veterans' Disability Benefits: Better Accountability and 
Access Would Improve the Benefits Delivery at Discharge Program, 
[hyperlink, http://www.gao.gov/products/GAO-08-901] (Washington, D.C.: 
Sept. 9, 2008). 

[11] BDD claims are rated at the regional offices in Winston-Salem, 
North Carolina, and Salt Lake City, Utah. 

[12] VBA refers to the practice of redistributing claims as 
"brokering." 

[13] This rating-related accuracy measure includes original and 
reopened claims for disability compensation and dependency and 
indemnity (survivor) compensation benefits. Reopened claims include 
cases where a veteran seeks a higher rating for a disability or seeks 
compensation for an additional condition. 

[14] GAO, Veterans' Benefits: Quality Assurance for Disability Claims 
and Appeals Processing Can Be Further Improved, [hyperlink, 
http://www.gao.gov/products/GAO-02-806] (Washington, D.C.: Aug. 16, 
2002). 

[End of section] 

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