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entitled 'Veterans' Disability Benefits: Further Evaluation of Ongoing 
Initiatives Could Help Identify Effective Approaches for Improving 
Claims Processing' which was released on January 29, 2010. 

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Report to the Committee on Veterans' Affairs, U.S. Senate: 

United States Government Accountability Office:
GAO: 

January 2010: 

Veterans' Disability Benefits: 

Further Evaluation of Ongoing Initiatives Could Help Identify 
Effective Approaches for Improving Claims Processing: 

GAO-10-213: 

GAO Highlights: 

Highlights of GAO-10-213, a report to the Committee on Veterans' 
Affairs, U.S. Senate. 

Why GAO Did This Study: 

For years, the disability compensation claims process has been the 
subject of concern and attention by the Department of Veterans Affairs 
(VA), Congress, and veteran service organizations (VSO), due in part 
to long waits for decisions and the large number of claims pending a 
decision. As GAO and other organizations have reported over the last 
decade, VA has also faced challenges in improving the accuracy and 
consistency of disability decisions. GAO was asked to examine 
(1) trends in VA’s disability compensation claims processing at the 
initial claims and appeals levels and (2) actions that VA has taken to 
improve its disability claims process. To do this, GAO reviewed and 
analyzed VA performance data, budget submissions, program documents, 
and external studies and interviewed VA officials and VSO 
representatives. 

What GAO Found: 

VA’s disability claims and appeals processing has improved in some 
aspects and worsened in others. In recent years, the number of claims 
completed annually by VA has increased but not by enough to keep pace 
with the increasing number of compensation claims received, resulting 
in more claims awaiting a decision. In addition, the average days that 
VA took to complete a claim—196 days in fiscal year 2008—has varied 
over time, but was about the same in fiscal years 2000 and 2008. 
Several factors have challenged claims processing improvements, such 
as the increase in the number and complexity of claims submitted to 
VA, laws, and regulatory changes. VA has reduced the number of pending 
appeals and improved the accuracy of some appellate work, but the time 
that it takes to resolve appeals has worsened in recent years. For 
example, in fiscal year 2008, VA took on average 776 days to process 
appeals; 78 days longer than in fiscal year 2004. One factor that has 
contributed to worsening appeals timeliness is the increase in the 
number of appeals received by VA. 

Figure: Pending Claims and Appeals, End of Fiscal Years 2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2000; 
Pending claims: 188; 
Pending appeals: 127. 

Fiscal year: 2001; 
Pending claims: 370; 
Pending appeals: 109. 

Fiscal year: 2002; 
Pending claims: 309; 
Pending appeals: 113. 

Fiscal year: 2003; 
Pending claims: 227; 
Pending appeals: 124. 

Fiscal year: 2004; 
Pending claims: 288; 
Pending appeals: 131. 

Fiscal year: 2005; 
Pending claims: 309; 
Pending appeals: 132. 

Fiscal year: 2006; 
Pending claims: 335; 
Pending appeals: 124. 

Fiscal year: 2007; 
Pending claims: 351; 
Pending appeals: 112. 

Fiscal year: 2008; 
Pending claims: 343; 
Pending appeals: 95. 

Sources: VA data (claims) and GAO analysis of VA data (appeals). 

[End of figure] 

VA has taken several steps to improve claims and appeals processing, 
but their impact is not yet known. VA has hired a significant number 
of disability claims staff to process disability workloads. VA’s 
Veterans Benefits Administration (VBA) has also expanded its practice 
of workload redistribution, which could improve the timeliness and 
quality of its decisions. VA is also testing new claims processing 
approaches—such as shortening response periods for certain claims and 
appeals through Expedited Claims Adjudication (ECA) and reorganizing 
its claims processing units. However, VBA has not established plans to 
evaluate the effect of some initiatives. In addition, VA has taken 
other steps to improve claims and appeals processing, such as 
expanding its quality assurance program; upgrading claims processing 
software; and moving toward paperless processing, which remains 
elusive in part due to technical challenges. 

What GAO Recommends: 

GAO recommends that the Secretary of Veterans Affairs direct (1) VBA 
to collect data on redistributed claims to help assess the effect of 
workload redistribution, (2) VBA and the Board of Veterans’ Appeals to 
establish a plan with criteria for assessing whether ECA should be 
widely implemented, and (3) VBA to develop a plan with criteria for 
assessing whether its pilot reorganization of claims processors should 
be expanded. VA agreed with the recommendations, and noted plans to 
address them. 

View [hyperlink, http://www.gao.gov/products/GAO-10-213] or key 
components. For more information, contact Daniel Bertoni at (202) 512-
7215 or bertonid@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

VA's Disability Claims and Appeals Processing Has Improved in Some 
Aspects and Worsened in Others: 

VA Has Taken Some Actions That Have the Potential to Improve Claims 
Processing, but Their Impact Is Not Yet Known: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the Department of Veterans Affairs: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: VBA's Compensation and Pension Service's Disability Claims 
Processing Teams: 

Figures: 

Figure 1: Overview of VA's Disability Claims and Appeals Processes: 

Figure 2: Compensation Claims Received and Completed, Fiscal Years 
2000-2008: 

Figure 3: Pending Compensation Claims, End of Fiscal Years 2000-2008: 

Figure 4: Average Days That Compensation Claims Were Pending, End of 
Fiscal Years 2000-2008: 

Figure 5: Average Days to Complete Compensation Claims, Fiscal Years 
2000-2008: 

Figure 6: Accuracy Rate of VBA Compensation Claims Decisions, Fiscal 
Years 2003-2008: 

Figure 7: Number of Pending Compensation Appeals, End of Fiscal Years 
2000-2008: 

Figure 8: Accuracy Rate of the Board's Compensation Appeals Decisions, 
Fiscal Years 2000-2008: 

Figure 9: Average Processing Time for Compensation Appeals, Fiscal 
Years 2000-2008: 

Figure 10: Number of Compensation Appeals Received, Fiscal Years 2000- 
2008: 

Abbreviations: 

ARRA: American Recovery and Reinvestment Act of 2009: 

DOD: Department of Defense: 

ECA: Expedited Claims Adjudication: 

STAR: Systematic Technical Accuracy Review: 

VA: Department of Veterans Affairs: 

VBA: Veterans Benefits Administration: 

VACOLS: Veterans Appeals Control and Locator System: 

VETSNET: Veterans Services Network: 

VSO: veteran service organization: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

January 29, 2010: 

The Honorable Daniel K. Akaka: 
Chairman: 
The Honorable Richard Burr: 
Ranking Member: 
Committee on Veterans' Affairs: 
United States Senate: 

The Department of Veterans Affairs' (VA) disability compensation 
program provides monetary support to veterans with disabling 
conditions that were incurred or aggravated during military service. 
In fiscal year 2008, VA paid $30.7 billion in benefits to nearly 3 
million veterans through the compensation program. For years, the 
disability compensation claims process has been the subject of concern 
and attention by VA, Congress, and veteran service organizations 
(VSO), due in large part to long waits for decisions and the large 
number of claims pending a decision. The number of veterans awaiting 
decisions about their eligibility for disability compensation could 
grow as servicemembers returning from ongoing conflicts and aging 
veterans submit claims. As GAO and other organizations have reported 
over the last decade, VA has faced challenges not only in decreasing 
the time it takes to decide veterans' claims, but also with improving 
the accuracy and consistency of disability decisions. 

At your request, we examined (1) trends in VA's disability 
compensation claims processing at the initial claims and appeals 
levels and (2) actions that VA has taken to improve its disability 
claims process. To identify trends in disability compensation claims 
processing, we examined workload and performance data from VA's 
Veterans Benefits Administration (VBA) and Board of Veterans' Appeals 
(Board). To identify VA's actions for improving the claims process, we 
analyzed staffing data; reviewed VA's budget submissions, VA's 
strategic plan, and other documents such as external studies and VA's 
Office of Inspector General reports; interviewed VA officials and VSO 
representatives; and examined ongoing initiatives and those 
initiatives that VA completed after fiscal year 2005. In addition, we 
visited four VBA regional offices and the Board to learn about ongoing 
initiatives. In selecting the regional offices--Chicago, Illinois; 
Seattle, Washington; Togus, Maine; and Winston-Salem, North Carolina--
we considered regional offices that would provide (1) insights about 
ongoing initiatives, such as pilots; (2) a mix of offices located in 
different geographic settings (e.g., urban and rural); and (3) a mix 
of offices that were above and below VBA's averages for select claims 
processing measures. We also reviewed relevant federal laws, 
regulations, and court decisions. Appendix I contains additional 
information about our scope and methodology. 

We conducted this performance audit from November 2008 through January 
2010 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 that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

VA pays monthly disability compensation to veterans with service- 
connected disabilities (i.e., injuries or diseases incurred or 
aggravated while on active military duty) according to the severity of 
the disability.[Footnote 1] VA also pays additional compensation for 
some dependents--spouses, children, and parents--of veterans.[Footnote 
2] In addition, VA's pension program pays benefits to low-income 
veterans who either are elderly or have disabilities unrelated to 
their military service.[Footnote 3] In fiscal year 2008, the 
disability compensation program represented 78 percent, or $30.7 
billion, of the cash benefits paid through VBA's Compensation and 
Pension Service. 

VA's disability compensation claims process starts when a veteran 
submits a claim to VBA (see figure 1). Upon reviewing the claim at 1 
of VBA's 57 regional offices, a service representative then assists 
the veteran in gathering the relevant evidence to evaluate the claim. 
[Footnote 4] Such evidence includes veterans' 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 a claim has all of 
the necessary evidence, a rating specialist evaluates the claim and 
determines whether the claimant is eligible for benefits.[Footnote 5] 
If so, the rating specialist assigns a percentage rating. Veterans 
with multiple disabilities receive a single composite rating. Veterans 
can reopen claims for additional benefits from VA if, for example, a 
service-connected disability worsens or arises in the future. If the 
veteran disagrees with the regional office's decision, he or she may 
submit a written notice of disagreement to the regional office. In 
response to such a notice, VBA reviews the case and provides the 
veteran with further written explanation of the decision if VBA does 
not grant all appealed issues. If the veteran still disagrees, he or 
she may appeal to the Board. Before transferring the appeal to the 
Board, VBA re-reviews the case and if any new information is obtained 
provides a new explanation of the decision to the veteran. The Board, 
whose members are attorneys experienced in veterans' law and in 
reviewing benefit claims, conducts a hearing if the veteran requests 
one, then grants or denies the appeal or returns the case to VBA to 
obtain additional evidence necessary to decide the veteran's claim. If 
the veteran is dissatisfied with the Board's decision, he or she may 
appeal to the U.S. Court of Appeals for Veterans Claims. 

Figure 1: Overview of VA's Disability Claims and Appeals Processes: 

[Refer to PDF for image: illustration] 

Claims Process: 

Veteran: 
Submits claim. 

Veterans Benefits Administration (VBA): 
Reviews claim; 
Obtains and helps gather evidence[A]; 
Rates claim; 
Processes decision and provides a written explanation (to Veteran). 

Appeals Process: 

Veteran: 
If dissatisfied, submits a notice of disagreement to VBA. 

VBA: 
Reviews claim and provides a written explanation of decision[B]. 

Veteran: 
If dissatisfied, appeals to the Board. 

VBA: 
Obtains and helps gather any needed evidence[A]; re-reviews case and 
writes new explanation of decision if additional evidence is 
obtained[B]; and certifies that appeal is ready for the Board. 

Board of Veterans’ Appeals (Board): 
Conducts a hearing if claimant requests; 
Grants or denies appeal, or; 
Remands case to VBA. 

Veteran: 
If dissatisfied, appeals to the U.S. Court of Appeals for Veterans 
Claims. 

Source: GAO analysis of VA procedures. 

[A] VA must make reasonable efforts to help a claimant obtain evidence 
that is necessary to substantiate a claim. 

[B] The explanation must include a summary of the evidence relating to 
the contested issue(s), a summary of the applicable laws and 
regulations, VBA's determination of each issue, and the rationale for 
such determinations. The process ends if VBA grants all appealed 
issues or if the veteran is satisfied with the explanation. 

[End of figure] 

To improve workload controls and the timeliness and accuracy of its 
decisions, in fiscal year 2002, VBA organized its claims processing 
staff by teams that perform distinct phases of the claims and appeals 
processes (see table 1). In moving toward this organizational 
structure, VBA sought to reduce the number of tasks a veteran service 
representative was expected to perform and thereby improve its 
performance. 

Table 1: VBA's Compensation and Pension Service's Disability Claims 
Processing Teams: 

Team: Triage Team; 
Summary of claims processing duties: Reviews claims and establishes 
the regional office's tracking procedures for all mail, as well as 
processes claims that only require a brief review to determine 
eligibility. 

Team: Pre-Determination Team; 
Summary of claims processing duties: Obtains and helps gather evidence 
for disability ratings, and prepares administrative decisions. 

Team: Rating Team; 
Summary of claims processing duties: Makes decisions on claims that 
require consideration of medical evidence. 

Team: Post-Determination Team; 
Summary of claims processing duties: Develops evidence for nonrating 
issues, processes benefit awards, and notifies veterans of rating 
decisions. 

Team: Public Contact Team; 
Summary of claims processing duties: Conducts personal interviews and 
handles telephone inquiries, including calls from veterans. 

Team: Appeals Team; 
Summary of claims processing duties: Handles requests for 
reconsideration of claims in cases where veterans have submitted a 
notice of disagreement. 

Source: VBA. 

Note: The Rating Team is made up of rating specialists; the Post- 
Determination and Public Contact teams are made up of veteran service 
representatives; and the Pre-Determination, Triage, and Appeals teams 
are made up of both rating specialists and veteran service 
representatives. 

[End of table] 

VA measures its performance related to compensation claims and appeals 
processing in various ways and considers the timeliness and quality of 
its decisions as key indicators. One way that VBA and the Board assess 
the timeliness of their work is using a joint measure that considers 
the average time it takes appeals to be resolved, regardless of 
whether they are resolved by VBA or the Board. In fiscal year 2009, 
VA's timeliness goal for resolving appeals was 675 days.[Footnote 6] 
In terms of quality, VBA and the Board each assess the accuracy of 
their decisions by reviewing randomly selected cases to determine the 
proportion that contain errors that could affect the benefits paid to 
the veteran. In fiscal year 2009, VBA and the Board had an accuracy 
rate goal of 98 percent and 94 percent, respectively.[Footnote 7] 

VA's Disability Claims and Appeals Processing Has Improved in Some 
Aspects and Worsened in Others: 

Over the past several years, the number of disability compensation 
claims has increased, and VA's performance in processing such claims 
has improved in some areas and worsened in others. During this time, 
VA has reduced the number of pending appeals and improved the accuracy 
of some appellate work, but in recent years, the time that it takes to 
resolve appeals has increased. 

VA Has Increased Its Output of Claims Decisions but Continues to 
Experience Some Challenges with Timeliness and Accuracy: 

From fiscal years 2000 to 2008, the number of claims completed 
annually by VA has increased but not by enough to keep pace with the 
increasing number of compensation claims it has received, and, as a 
result, the number of pending claims has grown. VA has substantially 
increased the number of claims it completes annually in recent years. 
In fiscal year 2008, VA completed about 729,000 claims, which was 
nearly 66 percent more than it completed in fiscal year 2000 (see 
figure 2).[Footnote 8] However, VA has also received significantly 
more claims in recent years. In fiscal year 2008, VA received about 
719,000 compensation claims, which was about 71 percent more than it 
received in fiscal year 2000. By the end of fiscal year 2008, pending 
claims--those awaiting a decision--had increased 83 percent over 
fiscal year 2000 levels, from about 188,000 to about 343,000 (see 
figure 3). Moreover, the number of claims awaiting a decision longer 
than 6 months increased about 50 percent, from about 52,000 to about 
78,000. 

Figure 2: Compensation Claims Received and Completed, Fiscal Years 
2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2000; 
Claims received: 421; 
Claims completed: 440. 

Fiscal year: 2001; 
Claims received: 531; 
Claims completed: 348. 

Fiscal year: 2002; 
Claims received: 579; 
Claims completed: 641. 

Fiscal year: 2003; 
Claims received: 601; 
Claims completed: 683. 

Fiscal year: 2004; 
Claims received: 632; 
Claims completed: 571. 

Fiscal year: 2005; 
Claims received: 649; 
Claims completed: 629. 

Fiscal year: 2006; 
Claims received: 654; 
Claims completed: 628. 

Fiscal year: 2007; 
Claims received: 678; 
Claims completed: 662. 

Fiscal year: 2008; 
Claims received: 719; 
Claims completed: 729. 

Source: VA data. 

[End of figure] 

Figure 3: Pending Compensation Claims, End of Fiscal Years 2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2000; 
Total pending: 188; 
Pending over 6 months: 52. 

Fiscal year: 2001; 
Total pending: 370; 
Pending over 6 months: 159. 

Fiscal year: 2002; 
Total pending: 309; 
Pending over 6 months: 114. 

Fiscal year: 2003; 
Total pending: 227; 
Pending over 6 months: 44. 

Fiscal year: 2004; 
Total pending: 288; 
Pending over 6 months: 64. 

Fiscal year: 2005; 
Total pending: 309; 
Pending over 6 months: 68. 

Fiscal year: 2006; 
Total pending: 335; 
Pending over 6 months: 78. 

Fiscal year: 2007; 
Total pending: 351; 
Pending over 6 months: 96. 

Fiscal year: 2008; 
Total pending: 343; 
Pending over 6 months: 78. 

Source: VA data. 

[End of figure] 

VA has also experienced mixed results in improving the timeliness of 
its claims decisions. Overall, the average days that claims were 
pending declined, but the average processing time needed to complete a 
claim did not improve.[Footnote 9] From fiscal years 2000 to 2008, the 
average number of days that claims were pending fluctuated. In fiscal 
year 2008, compensation claims were pending an average of 23 days less 
than the 146 days in fiscal year 2000 (see figure 4).[Footnote 10] 
While fiscal year 2008's average number of days pending was slightly 
longer than the average 115 days experienced in fiscal year 2003, it 
is a marked improvement over the 188 days that claims were pending in 
fiscal year 2001. VA has also reduced the percentage of claims that 
took more than 1 year to complete, from 22 percent in fiscal year 2002 
to 10 percent in fiscal year 2008. However, VA has made little 
progress in reducing average processing times. The average time that 
VA took to complete a claim fluctuated between fiscal years 2000 and 
2008, from a high of 246 days in fiscal year 2002 to a low of 181 days 
in fiscal years 2004 and 2005 (see figure 5). Since then, this average 
has increased, and in fiscal year 2008, VA took about the same amount 
of time--196 days--to complete a claim as it did in fiscal year 2000. 

[Refer to PDF for image] 

[End of figure] 

Figure 4: Average Days That Compensation Claims Were Pending, End of 
Fiscal Years 2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 146 days; 
Fiscal year 2001; 188 days; 
Fiscal year 2002: 181 days; 
Fiscal year 2003: 115 days; 
Fiscal year 2004: 122 days; 
Fiscal year 2005: 124 days; 
Fiscal year 2006: 132 days; 
Fiscal year 2007: 137 days; 
Fiscal year 2008: 123 days. 

Source: VA data. 

[End of figure] 

Figure 5: Average Days to Complete Compensation Claims, Fiscal Years 
2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 195 days; 
Fiscal year 2001; 202 days; 
Fiscal year 2002: 246 days; 
Fiscal year 2003: 197 days; 
Fiscal year 2004: 181 days; 
Fiscal year 2005: 181 days; 
Fiscal year 2006: 193 days; 
Fiscal year 2007: 200 days; 
Fiscal year 2008: 198 days. 

Source: VA data. 

[End of figure] 

In terms of quality, according to VA's assessments, the accuracy of 
compensation claims processing remained about the same during fiscal 
years 2003 through 2008.[Footnote 11] The percentage of compensation 
claims processed without errors that could affect benefits paid to 
veterans remained at 85 percent, varying slightly in the intervening 
years (see figure 6). 

Figure 6: Accuracy Rate of VBA Compensation Claims Decisions, Fiscal 
Years 2003-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2003: 85%; 
Fiscal year 2004: 85%; 
Fiscal year 2005: 83%; 
Fiscal year 2006: 88%; 
Fiscal year 2007: 87%; 
Fiscal year 2008: 85%. 

Source: VA data. 

[End of figure] 

One factor that has contributed to VA's lack of significant 
improvement in claims processing performance is the substantial 
increase in VA's disability workloads. VA attributes the increase in 
compensation claims to several sources, including the conflicts in 
Iraq and Afghanistan. According to VA, about 35 percent of veterans 
from ongoing hostilities file claims. In addition, VA cites the 
growing number of reopened claims from current disability benefit 
recipients--many of whom suffer from chronic progressive disabilities, 
such as diabetes--who submit claims for increased benefits as their 
conditions worsen or new conditions arise as they age. In fiscal year 
2008, VA received about 488,000 reopened claims for disability 
benefits, up 58 percent from about 309,000 in fiscal year 2000. In 
addition, VA attributes increased claims receipt to its enhanced 
outreach to servicemembers and veterans. VA reported that in fiscal 
year 2007, it provided benefits briefings to about 297,000 separating 
servicemembers, which was up from about 210,000 in fiscal year 2003. 

According to VA officials, federal laws, VA regulations, and court 
decisions have also adversely affected claims processing timeliness. 
These changes enable veterans to get the benefits they deserve. 
However, the changes expand benefit entitlement and add processing 
requirements that increase VA's workloads. In recent years, court 
decisions related to a 1991 law have created new presumptions of 
service-connected disabilities for many Vietnam veterans.[Footnote 12] 
In October 2009, VA announced that it was expanding the list of 
presumptive service-connected disabilities to include Parkinson's 
disease and two other conditions for Vietnam veterans.[Footnote 13] VA 
also anticipates an increase in claims stemming from an October 2008 
regulation change that affects how VA rates traumatic brain injuries. 
[Footnote 14] According to a VA official, a letter was sent to 
approximately 32,000 veterans notifying them that their rating for 
traumatic brain injury could potentially increase, even though their 
symptoms may not have changed. In addition to expanded benefit 
entitlement, a number of laws[Footnote 15] and court 
decisions[Footnote 16] related to VA's disability claims process have 
had implications for timely claims processing. For example, according 
to VA officials, the Veterans Claims Assistance Act of 2000 added more 
steps to the claims process, lengthening the time that it takes to 
develop and decide a claim.[Footnote 17] 

Another factor impacting VA's claims processing timeliness is the 
complexity of claims received. VA notes that it is receiving more 
claims for complex disabilities related to combat and deployments 
overseas, including those based on environmental and infectious 
disease risks and traumatic brain injuries. In addition, veterans 
cited more disabilities in their claims in recent years than they had 
in the past. The number of compensation claims VA decided with eight 
or more disabilities increased from 11 to 16 percent from fiscal years 
2006 to 2008. These claims can take longer to complete because each 
disability must be evaluated separately. 

VA Has Reduced the Number of Pending Appeals and Improved the Accuracy 
of Some Appellate Work, but Appeals Processing Timeliness Has Worsened 
in Recent Years: 

Since fiscal year 2000, the number of pending appeals has declined, 
and the accuracy of appeals processing has improved in some areas. VA 
has reduced the number of pending appeals by 25 percent, from about 
127,000 in fiscal year 2000 to about 95,000 in fiscal year 2008 (see 
figure 7).[Footnote 18] Over the same period, agency accuracy reviews 
indicate that 95 percent of the Board's decisions in fiscal year 2008 
were processed accurately compared with 86 percent in fiscal year 2000 
(see figure 8). Another indicator of the accuracy of appeals 
processing is the percentage of appeals that are remanded to VBA by 
the Board due to errors that could have been avoided.[Footnote 19] 
Examples of avoidable remands include VBA's failure to obtain 
identified private treatment records or to send letters to claimants 
indicating what evidence is necessary to substantiate the claim. One 
of VA's goals is to eliminate avoidable remands.[Footnote 20] Although 
VBA recently expanded accuracy reviews and the Board has provided 
training to VBA staff based on remand reason trends, the percentage of 
appeals with avoidable remands remained about 25 percent from fiscal 
years 2006 to 2008.[Footnote 21] 

Figure 7: Number of Pending Compensation Appeals, End of Fiscal Years 
2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 127,000; 
Fiscal year 2001; 109,000; 
Fiscal year 2002: 113,000 
Fiscal year 2003: 124,000; 
Fiscal year 2004: 131,000; 
Fiscal year 2005: 132,000; 
Fiscal year 2006: 124,000; 
Fiscal year 2007: 112,000; 
Fiscal year 2008: 95,000. 

Source: GAO analysis of VA data. 

[End of figure] 

Figure 8: Accuracy Rate of the Board's Compensation Appeals Decisions, 
Fiscal Years 2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 85%; 
Fiscal year 2001; 88%; 
Fiscal year 2002: 86%; 
Fiscal year 2003: 85%; 
Fiscal year 2004: 84%; 
Fiscal year 2005: 82%; 
Fiscal year 2006: 90%; 
Fiscal year 2007: 93%; 
Fiscal year 2008: 95%. 

Source: GAO analysis of VA data. 

[End of figure] 

Despite improvements in some aspects of appeals processing, the 
average time needed to resolve appeals has worsened in recent years, 
reversing prior improvements. In fiscal year 2008, the average 
processing time for compensation appeals was 776 days, or 
approximately 25 months, despite reaching lows of 656 days in fiscal 
year 2001 and 680 days in fiscal year 2005 (see figure 9). The 
majority of appeal processing time is spent developing the appeal 
prior to consideration by the Board. For example, appeals resolved in 
fiscal year 2008 remained at VBA for 502 days before being transferred 
to the Board.[Footnote 22] 

Figure 9: Average Processing Time for Compensation Appeals, Fiscal 
Years 2000-2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 769 days; 
Fiscal year 2001; 656 days; 
Fiscal year 2002: 835 days; 
Fiscal year 2003: 838 days; 
Fiscal year 2004: 698 days; 
Fiscal year 2005: 680 days; 
Fiscal year 2006: 719 days; 
Fiscal year 2007: 758 days; 
Fiscal year 2008: 776 days. 

Source: GAO analysis of VA data. 

[End of figure] 

Several factors have contributed to the worsening trend in appeals 
timeliness. First, the number of appeals that VA has received 
increased about 50 percent from approximately 24,000 in fiscal year 
2000 to about 36,000 in fiscal year 2008 (see figure 10). In addition, 
according to VA officials, each time appellants submit new evidence, 
VA must review and summarize the case for the appellant again, adding 
to the time that it takes to resolve the appeal. Furthermore, a 
veteran may submit multiple claims, and VBA does not forward an appeal 
to the Board until all of a veteran's pending claims are resolved, 
regardless of whether they relate to the appeal. This practice follows 
VBA's interpretation of a court decision to prevent delays in 
processing undecided claims.[Footnote 23] Therefore, a veteran's 
unrelated, pending claim could forestall final resolution of the 
appeal. Finally, according to VA officials, processing time is 
lengthened when appeals are remanded back to VBA by the Board. While 
some appeals are remanded due to procedural errors by VBA, many other 
appeals are remanded because of requirements often driven by recent 
court decisions or regulatory changes that occur after the appeal is 
sent to the Board. For example, a court decision in January 2008 
required VA to notify veterans seeking increased compensation for 
worsened conditions of the rating criteria that pertain to the claim. 
[Footnote 24] Until this decision was overturned in September 2009, it 
required the Board to remand--or VBA to hold back--any appeals until 
the claimants were notified.[Footnote 25] 

Figure 10: Number of Compensation Appeals Received, Fiscal Years 2000- 
2008: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2000: 24,000; 
Fiscal year 2001; 12,000; 
Fiscal year 2002: 17,000; 
Fiscal year 2003: 34,000; 
Fiscal year 2004: 41,000; 
Fiscal year 2005: 38,000; 
Fiscal year 2006: 38,000; 
Fiscal year 2007: 37,000; 
Fiscal year 2008: 36,000. 

Source: GAO analysis of VA data. 

[End of figure] 

VA Has Taken Some Actions That Have the Potential to Improve Claims 
Processing, but Their Impact Is Not Yet Known: 

VA has taken several steps to improve claims processing, including 
increasing claims processing staff, redistributing certain workloads, 
piloting alternative approaches to processing certain claims, and 
increasingly leveraging information technology to process claims. VA 
expects these actions to improve decision timeliness, quality, or 
both. However, the effects of these actions are not yet known, and VA 
lacks plans to assess certain actions. 

VA Has Increased Staffing, Redistributed Workloads, and Is Piloting 
New Approaches for Processing Certain Claims to Improve Timeliness, 
but Lacks Plans to Evaluate Some of These Actions: 

VA has taken several actions to improve decision timeliness at both 
the claim and appellate levels. For example, over the past few years, 
VA has hired a significant number of disability claims staff to 
process disability workloads. From fiscal years 2005 to 2009, VA 
increased VBA's claims processing staff by 57 percent, from 7,550 to 
11,868.[Footnote 26] This increase includes 417 staff that VBA hired 
in fiscal year 2009 using funds from the American Recovery and 
Reinvestment Act of 2009 (ARRA).[Footnote 27] Of the people hired 
using ARRA funds, about three-fourths are temporary employees who 
assist in developing disability claims and perform other 
administrative tasks to free experienced staff to complete more 
complex claims processing tasks. During the same period, VA increased 
the Board's staff by 20 percent, from 433 to 519, without using ARRA 
funds. 

We have reported that adding staff has the potential to improve VA's 
capacity to complete more claims, but an infusion of a large number of 
new staff will also likely pose human capital challenges for VA in the 
near term.[Footnote 28] VA has processed more claims and appeals 
decisions annually since hiring the additional staff; however, as it 
has acknowledged, individual staff productivity has decreased. 
Specifically, the number of rating-related claims processed per staff 
person declined from 101 in fiscal year 2005 to 88 in fiscal year 
2008. According to VA, this decline in productivity is attributable 
primarily to new staff who have not yet become fully proficient at 
processing claims and to the loss of experienced staff due to 
retirements. VA expects individual productivity to decline further 
before it improves, in part because of the challenge of training and 
integrating new staff.[Footnote 29] According to a VA official in 
charge of training, VA's goal is for newly hired veteran service 
representatives to be proficient in 18 months, and for newly hired 
rating specialists to be proficient in 2 years. However, according to 
VA officials, particularly for rating specialists, becoming proficient 
often takes longer--about 3 to 5 years--because of the complexity of 
the job, in part given the variety of cases and rating issues. 
Training new staff also reduces productivity in the near term because 
experienced staff must take time to train and mentor them and, 
therefore, may have less time to process their own claim workloads. 
According to a VBA training official, VBA has developed curricula that 
use practical application of key concepts to accelerate the learning 
curve for new staff. VA expects that the staff hired with ARRA funding 
will help increase the number of claims processed and reduce average 
processing times in 2010. However, even though their responsibilities 
are expected to be limited to less complex claims processing tasks, 
these additional staff could also pose human capital challenges in the 
near term while they are being trained and deployed. 

VBA has also expanded its practice of redistributing regional offices' 
disability workloads. Although this expansion could improve the 
timeliness of its decisions, VBA has not collected data to evaluate 
the effect of this practice. Since 2001, VBA has created 15 resource 
centers that are staffed exclusively to process claims or appeals from 
backlogged regional offices at distinct phases in the claims process. 
[Footnote 30] From 2001 to 2002, VBA created 9 resource centers to 
exclusively rate claims (rating centers) from other offices. Since 
2007, VBA has created 4 additional resource centers to exclusively 
develop claims (development centers) for rating. In 2009, VBA created 
2 more resource centers that focus exclusively on processing appealed 
claims (appeals centers) before they are sent to the Board. The 
development resource centers obtain information necessary for rating 
claims, while the appeals resource centers review appeals and provide 
written summaries of cases for the veterans. VBA determines the number 
of claims redistributed to each of the resource centers on the basis 
of the regional offices' and resource centers' changing workloads and 
capacities.[Footnote 31] Claims initially had to meet specific 
criteria to be eligible for redistribution, such as having seven or 
fewer disabilities. However, VBA relaxed these criteria in May 2008 to 
allow more claims to be redistributed. The number of claims 
redistributed for rating has increased from about 88,000 in fiscal 
year 2006 to about 140,000 in fiscal year 2008. 

While redistributing workloads is helpful, this practice can pose 
operational challenges. According to several VSO representatives, 
redistributing claims reduces VSOs' and VA's ability to monitor claims 
processing. Also, according to some resource center staff we 
interviewed, workload redistribution sometimes creates inefficiencies. 
For example, one rating resource center returned about 20 percent of 
the claims that it received during the first half of fiscal year 2009 
to the originating regional offices because the claims required 
further development before they could be rated. The resource centers 
provide written explanations for returned claims, so that regional 
offices can correct the errors and avoid them in the future. Despite 
such challenges, according to VBA officials, redistributing backlogged 
claims to resource centers improves average processing times because 
VBA can better leverage the ever-changing capacities of its offices. 
Although VBA tracks the number of claims processed--and recently 
started monitoring accuracy--by resource center, it does not track the 
average processing times of redistributed workloads. Therefore, VA 
cannot (1) compare the average processing times of redistributed 
versus nonredistributed claims and (2) assess the resource centers 
relative to key performance goals or the overall effect of expanded 
workload redistribution on claims processing. 

In addition to increasing staffing and redistributing workloads, VA is 
piloting several new approaches for processing certain claims to 
improve timeliness. For example, VA is implementing a pilot with the 
Department of Defense (DOD) to perform disability evaluations. Begun 
in November 2007, the joint DOD-VA pilot process applies to 
servicemembers navigating the military's disability evaluation system, 
which determines whether servicemembers are fit for duty or should be 
released from the military.[Footnote 32] In the pilot, VA completes 
disability ratings for servicemembers found to be unfit for duty. Key 
features of the pilot include a single physical examination conducted 
to VA standards, disability ratings prepared by VA for use by both DOD 
and VA in determining disability benefits, and additional outreach and 
case management provided by VA staff at DOD pilot locations to explain 
VA results and processes to servicemembers. The goals of the pilot are 
to increase transparency and reduce confusion about the disability 
evaluations conducted and, if military separation or retirement is 
necessary, to expedite VA disability compensation benefits upon 
discharge. If implemented widely, the pilot process could change the 
way in which many veterans first receive disability benefits from VA. 
[Footnote 33] According to DOD, preliminary pilot results suggest that 
the new process expedites delivery of VA benefits to servicemembers 
following discharge from the military. However, the number of claims 
affected by widespread implementation of the DOD-VA pilot process 
would probably be small compared with the total number of compensation 
claims processed by VA. In fiscal year 2008, the military's disability 
evaluation system caseload was approximately 20,000, while VA 
processed about 729,000 compensation claims that year.[Footnote 34] 

VA is also piloting another new approach to process certain 
compensation claims and appeals, but it has not yet established a plan 
to determine whether the pilot process is worthy of widespread 
implementation. In February 2009, VA launched a 2-year pilot called 
Expedited Claims Adjudication (ECA) in 4 regional offices. This pilot, 
a joint effort between VBA and the Board, is intended to accelerate 
the processing time of claims and appeals. Claimants who opt into the 
ECA pilot agree to respond to VA within time frames that are shorter 
than generally required. For example, participating claimants agree to 
submit any notice of disagreement with VBA's decision within 60 days 
as opposed to within 365 days under VA's normal requirements.[Footnote 
35] In return, the expectation is that claimants will receive 
decisions from VBA--and from the Board if the claimant appeals the 
decision--more quickly. VA is collecting data on the timeliness of ECA 
processing compared with that of non-ECA processing, but complete data 
are not yet available. VA officials said they intend to evaluate ECA 
before expanding the expedited process within the agency. However, it 
is unclear when and how VA will conduct such an evaluation because it 
has not yet established an evaluation plan with specific criteria and 
methods to help assess ECA's impact on non-ECA claims and appeals 
processing and on whether ECA is worthy of expansion. For example, it 
is unclear which timeliness metrics VA will use to help assess ECA, 
and the performance goals the new process must meet before being 
expanded. 

As required under the Veterans' Benefits Improvement Act of 2008, 
[Footnote 36] VA is also piloting an expedited claims process for 
claimants who submit "fully developed claims"[Footnote 37] and affirm 
that they do not intend to submit additional information to support 
their claims.[Footnote 38] In return, VA's goal is to process such 
claims within 90 days of receipt of the claim. VA is piloting this 
alternative process at 10 regional offices for at least 1 year, and 
the agency has hired a contractor to help assess the feasibility and 
advisability of continuing the pilot, and possibly deploying the 
process nationwide. Because certain types of claims--such as those 
from newer veterans--may naturally lend themselves to being fully 
developed and therefore may not be representative of all claims, the 
contractor will not merely compare the average processing times for 
fully developed claims with those of other claims. Instead, the 
contractor is working with VA to identify a sound and feasible 
methodology for evaluating this alternative claims process and is 
scheduled to provide VA with an evaluation of the pilot at the end of 
May 2010. 

VA Is Piloting a Reorganization and Has Implemented Quality Assurance 
and Technology-Related Initiatives That Could Improve Decision Quality 
and Timeliness in the Future: 

VA has taken several additional steps that could improve the quality 
and timeliness of its decisions for compensation claims. For example, 
in July 2009, VA began piloting at one regional office a 
reorganization of its claims processors into groups that are 
collectively responsible for gathering the evidence for a claim, 
rating the claim, and processing the decision. This structure is 
different from the current organization, which has distinct teams for 
each phase of the claims process. This reorganization is based on a 
recent recommendation from a consulting firm that studied VA's rating-
related claim development process.[Footnote 39] In addition to 
reducing claim folder movement and thus potentially reducing the 
average processing time, the reorganization is intended to increase 
claims processing staff's appreciation for how their work quality 
impacts other aspects of the process. Although some VA officials 
expressed skepticism that this reorganization would significantly 
improve the agency's performance in processing compensation claims, 
they also acknowledged its potential benefits. According to VA 
officials, VA plans to evaluate the pilot in May 2010, but it has not 
yet established specific criteria for expanding the reorganization to 
other locations. Similar to the ECA pilot, VA has not yet specified 
which metrics it will use to help assess the pilot, and the goals that 
the new process must meet before being expanded. 

VA has also expanded its capacity to measure claims and appeals 
processing quality, which it uses to help monitor performance and 
identify training opportunities for staff. For example, in fiscal year 
2008, VA doubled the number of staff working in VBA's quality 
measurement group from about 10 to 20 staff to improve its ability to 
assess the accuracy of claim decisions and appellate work. In fiscal 
year 2008, this group more than doubled the number of claims it 
reviews for accuracy from 10 to 21 cases per month, per regional 
office. In addition, in fiscal year 2009, based in part on a VA 
inspector general recommendation, VBA began monitoring the accuracy of 
claims decided by rating resource centers as it does for regional 
offices.[Footnote 40] Moreover, starting in fiscal year 2008, based in 
part on our prior recommendation,[Footnote 41] VBA's quality 
measurement group began conducting studies to monitor the extent to 
which veterans with a similar disability receive consistent ratings 
across regional offices. According to VA officials, VBA's quality 
measurement group conducted four consistency studies in fiscal year 
2008. VBA used these studies to identify training needs--such as how 
to verify a stressor for post-traumatic stress disorder--at specific 
regional offices. The group had planned to conduct additional 
consistency studies the following year, but because it doubled the 
number of case reviews and conducted ad hoc, focused reviews (e.g., of 
appellate work), it was not able to conduct further consistency 
studies. However, in fiscal year 2008, VBA's quality measurement group 
began testing the consistency of decisions made by claims processing 
staff at different locations on a hypothetical claim.[Footnote 42] The 
group conducted two of these consistency tests during fiscal years 
2008 and six tests in fiscal year 2009. VBA has used the results of 
these tests to help identify training needs related to rating certain 
disabilities, such as cardiovascular conditions. 

VA has also leveraged technology in recent years to improve claims 
processing. For example, VA has upgraded its claims processing 
software in phases to enhance its ability to track information about 
claims and reduce the need for duplicative data entry that could 
introduce errors. According to VA, a software upgrade in October 2007 
improved staff's ability to manage their workloads and more easily 
identify priority cases, such as those for veterans returning from the 
current conflicts in Iraq and Afghanistan, by electronically filtering 
and sorting pending claims. Other claims processing software upgrades 
have allowed VA to capture management information that is essential to 
conducting more robust analyses on claims processing performance. For 
example, the prior software system did not allow VA to electronically 
capture more than six conditions per claim. With its current claims 
processing software, VA captures information on the actual number of 
claimed conditions, which in turn allows VA to analyze claim 
development time by condition. 

Finally, VA has also begun processing certain compensation claims with 
less reliance on paper claim files, but widespread paperless 
processing remains elusive, in part because of technical challenges. 
As of October 2008, claims processing staff at two regional offices 
review scanned versions of all compensation claims filed by 
servicemembers 60 to 180 days before leaving the military, known as 
Benefits Delivery at Discharge claims.[Footnote 43] According to VA 
officials, this process is currently as efficient as paper-based 
processing, but may eventually be more efficient and enable further 
redistribution of case processing as regional offices' changing 
capacities and workloads require. In addition, in the spring of 2009, 
VA designated one of its regional offices to test emerging 
technologies and processes in a real setting to gauge their potential 
impact on the agency and its employees. For example, VA recently used 
this office to test the impact of claims processing staff using only 
electronic information as opposed to hard-copy reference materials to 
process claims. VA hopes to further test paperless claims processing. 
However, officials said that the current system's infrastructure 
cannot sustain the high volume of data needed to process paperless 
claims on a widespread basis. Even in processing Benefits Delivery at 
Discharge claims--which comprise a small fraction of total 
compensation claims--the system infrastructure used to process such 
claims occasionally malfunctions. Although VA has taken some steps to 
strengthen its claims processing system's infrastructure, technical 
challenges persist, especially given the volume of evidence generally 
received for claims and the piecemeal, paper-based fashion in which VA 
often receives the information. These factors challenge VA as it works 
toward having a fully paperless claims processing system by the end of 
2012. 

Conclusions: 

For years, VA's disability claims and appeals processes have received 
considerable attention as VA has struggled to process an increasing 
number of claims from both veterans of recent conflicts as well as 
aging veterans from prior conflicts. Although VA workload and 
performance data indicate that VA has made progress in improving some 
aspects of its disability claims and appeals processing over the past 
decade, VA continues to wrestle with ongoing challenges that may not 
be resolved in the near future. Specifically, significant increases in 
claims workloads, complicated by more conditions per claim and human 
capital challenges associated with training and integrating VA's large 
influx of new staff continue to contribute to lengthy processing times 
and a large pending claims inventory. 

VA has little or no control over some contributors to its increasing 
workload, but it has taken steps to address some internal 
inefficiencies and challenges that persist within its disability 
claims and appeals processes. Some of VA's key actions, including its 
expansion of workload redistribution to resource centers and separate 
pilots aimed at reducing processing times, have the potential to 
improve the claims and appeals processes. However, without fully 
evaluating these actions, VA will not have the necessary information 
to determine their effectiveness and whether VA should continue to 
invest its limited resources in them. For example, workload 
redistribution to resource centers has the potential to improve 
services to veterans, but without tracking the timeliness and accuracy 
of the decisions processed by these centers, VA will not be able to 
fully monitor the centers' performance and will lack key inputs for 
determining whether they yield positive returns on investment. As a 
result, VA could miss out on opportunities to either increase 
efficiencies by adding more resource centers, or to scale back 
workload redistribution if it is not having the desired effect. In 
addition, absent an evaluation plan or specific criteria for measuring 
the effect of its ECA and reorganization pilots, VA may not be able to 
determine whether they are successful or to make well-informed 
decisions about expanding them. Considering the challenges VA faces 
and will likely face in the future, it is important that VA make 
effective long-term decisions based on solid data to improve benefit 
delivery for veterans. 

Recommendations for Executive Action: 

We recommend that the Secretary of Veterans Affairs direct: 

1. VBA to collect data on redistributed claims for development, 
rating, and appellate work to help assess the timeliness and accuracy 
of resource centers' output and the effectiveness of workload 
redistribution. 

2. VBA and the Board to establish an evaluation plan for assessing the 
ECA pilot process and guiding any expansion decisions. Such a plan 
should include criteria for determining how much improvement should be 
achieved under the pilot on specific performance measures--such as 
average VBA and Board processing times--and include methods for how 
VBA and the Board will consider ECA's impact on non-ECA claims and 
appeals processing before implementing the process widely. 

3. VBA to establish a plan to evaluate its claims processing 
reorganization pilot and guide any expansion decisions. Such a plan 
should include criteria for determining how much improvement should be 
achieved in the pilot on specific performance measures--such as 
decision timeliness and accuracy--before the process is implemented 
throughout VBA. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to VA for review and comment. VA 
generally agreed with our conclusions and concurred with our 
recommendations. Its written comments are reproduced in appendix II. 

VA agreed with our recommendation that VBA collect data on 
redistributed claims and appellate work to help assess the timeliness 
and accuracy of resource centers' output and the effectiveness of 
workload redistribution. VA stated that, by March 2010, VBA plans to 
change a primary workload management tool to help collect timeliness 
data of redistributed work. Analyzing such timeliness data along with 
other factors, such as quality and cost, will be helpful in evaluating 
the effectiveness of workload redistribution. 

VA also agreed with our recommendation that VBA and the Board 
establish an evaluation plan for assessing the ECA pilot process, and 
stated that the Board will work with VBA to establish evaluation 
criteria and explore the potential impact of ECA on non-ECA claims and 
appeals processing. VA stated that the Board hopes to complete an 
evaluation of ECA and make recommendations regarding potentially 
expanding the pilot process or permanently incorporating successful 
aspects of it by the end of fiscal year 2010. We applaud VA's intent 
to evaluate the pilot and encourage VA to take steps to ensure that 
the evaluation design and criteria yield valid information for making 
decisions regarding expansion. 

Finally, VA agreed with our recommendation that VBA establish a plan 
to evaluate its claims processing reorganization pilot, and provided 
critical factors that VBA and a private consulting firm established to 
help assess and report on the pilot. Identifying these factors is an 
important start; however, we believe that VBA should also establish 
the minimum levels of performance improvement by factor that should be 
achieved before the pilot process is considered successful and worthy 
of expansion. 

We are sending copies of this report to the relevant congressional 
committees, the Secretary of Veterans Affairs, and other interested 
parties. The report is also available at no charge on GAO's Web site 
at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions concerning this report, 
please contact me 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 report. Staff members who made 
key contributions to this report are listed in appendix III. 

Signed by: 

Daniel Bertoni: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

The objectives of our review were to examine (1) trends in the 
Department of Veterans Affairs' (VA) disability compensation claims 
processing at the claims and appellate levels and (2) actions that VA 
has taken to improve its disability claims process. For both 
objectives, we focused our analysis on VA's processing of disability 
compensation for veterans as opposed to other types of benefits, such 
as pensions. 

To examine workload and performance trends, we analyzed compensation 
claims processing data from VA's Veterans Benefits Administration 
(VBA) and Board of Veterans' Appeals (Board). In addition, we 
interviewed VA officials familiar with the claims process and reviewed 
VA annual performance reports and other documents to understand data 
trends and related VA challenges and to corroborate our findings. 
Further information about our analysis of VA workload and performance 
data is provided in the following text. 

To identify actions that VA has taken to improve its disability 
compensation claims and appeals processing, we reviewed relevant VA 
testimony and key documents, such as VA strategic plans, and 
interviewed VA officials responsible for compensation claims and 
appeals processing. We focused on VA actions that are ongoing or those 
that VA completed after fiscal year 2005. To examine these actions, we 
analyzed VBA and Board staffing data; reviewed VA's budget 
submissions, internal processing guidance, and other documents such as 
external studies and VA's Office of Inspector General reports; and 
interviewed VA officials and veteran service organization 
representatives. In addition, we visited four VBA regional offices and 
the Board to learn about ongoing initiatives. In selecting the 
regional offices--Chicago, Illinois; Seattle, Washington; Togus, 
Maine; and Winston-Salem, North Carolina--we considered regional 
offices that would provide (1) insights about ongoing initiatives, 
such as pilots; (2) a mix of offices located in different geographic 
settings (e.g., urban and rural); and (3) a mix of offices that are 
above and below VBA's averages for select claims processing measures. 
We also reviewed relevant federal laws, regulations, and court 
decisions. 

We conducted this review from November 2008 to January 2010 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 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Analysis of VA Claims Workload and Performance Data: 

To analyze VA disability compensation claim workloads and processing 
timeliness, we obtained nationwide, summary-level workload and 
performance data by fiscal year from VA's Benefits Delivery Network 
and accompanying Distribution of Operational Resources (known as 
"DOOR") reports, and Veterans Services Network (VETSNET) system and 
accompanying VETSNET Operations Reports (known as "VOR"), and spoke 
with VA officials about these data and sources. We limited our 
analysis to the following three types of disability claims: (1) 
initial compensation claims with fewer than or equal to seven 
disabilities, (2) initial compensation claims with eight or more 
disabilities, and (3) reopened compensation claims. We analyzed data 
for fiscal years 2000 to 2008. To analyze pending claims trends, we 
considered the number of claims that were awaiting a decision on the 
last day of each fiscal year. To analyze and report other claim 
processing trends besides those for receipts--which are designated by 
fiscal year according to when VA received the claim--VA designated 
claims by fiscal year according to when the decisions occurred. To 
verify the reliability of summary-level workload and timeliness data 
from these systems, we obtained and analyzed record-level data from VA 
and spoke with VA officials about how the data are input. 

We were able to replicate all of the summary-level workload and 
timeliness data that VA provided. However, we questioned VA's method 
for calculating claim receipts. Therefore, we attempted to replicate 
claim receipt data using VA's method and our method. VA calculates 
monthly claim receipts by counting the total number of pending claim 
records at the end of a month; subtracting the number of pending claim 
records from the end of the previous month; and adding the number of 
completed claims during the month, regardless of when they originated. 
To calculate the annual number of claims received, VA then adds the 
monthly claim receipt counts. Our method for calculating annual claim 
receipts was to count the number of claims whose claim date was in a 
given year. We compared the results and found that the annual claim 
receipts data using our method were about 2 to 3 percent lower than 
the data replicated using VA's method. Ultimately, we decided to use 
the summary-level receipts data that VA provided because they were 
materially close to our counts and because we were able to replicate 
VA's summary-level data using its method. 

To analyze the quality of VA's disability compensation claims 
processing, we obtained annual, nationwide data from its Systematic 
Technical Accuracy Review (STAR) program and verified the reliability 
of the data. The STAR program audits a randomly selected sample of 
VBA's completed claims for accuracy. We limited our analysis to the 
following three types of disability claims: (1) initial compensation 
claims with fewer than or equal to seven disabilities, (2) initial 
compensation claims with eight or more disabilities, and (3) reopened 
compensation claims. To report consistent data, we analyzed fiscal 
years 2003 to 2008 because the STAR program changed its audit 
methodology in fiscal year 2002. To verify the reliability of STAR 
data, we spoke with VA officials responsible for overseeing the STAR 
system. We also relied on prior verification of STAR data.[Footnote 
44] Consistent with this prior verification, we found that the STAR 
data were reliable for reporting nationwide trends. 

Analysis of VA Appellate Workload and Performance Data: 

To analyze VA's disability compensation appellate workloads and 
processing performance, we obtained record-level appeals data 
extracted on April 2, 2009, from the Veterans Appeals Control and 
Locator System (VACOLS). We limited our analysis to rating-related 
disability compensation appeals, which we identified by speaking with 
Board officials about how rating-related disability compensation 
appeals are classified in VACOLS, then limiting the data accordingly. 
We further limited our analysis to original appeals as opposed to 
appeals that, for example, had been previously remanded by the Board. 
Using the record-level appeals data, we generated nationwide annual 
data for fiscal years 2000 to 2008.[Footnote 45] To analyze pending 
appeals trends, we considered the number of appeals that were awaiting 
a decision on the last day of each fiscal year. To analyze other 
appeals processing trends besides those for receipts--which we 
designated by fiscal year according to when VA received the appeal--we 
designated appeals by fiscal year according to when their resolution 
occurred. 

Our reporting of avoidable remands--which are appeals that the Board 
does not consider because of claims processing errors that occurred 
before VBA certified transferring the appeal to the Board--varies from 
calculations we received from VBA. For fiscal years 2006 to 2008, we 
calculated avoidable remand rates of 24.3 percent, 25.4 percent, and 
24.7 percent, respectively; whereas VBA reported avoidable remand 
rates of 23.7 percent, 17.9 percent, and 17.7 percent, respectively. 
Our analysis was limited to compensation appeals, whereas VBA included 
noncompensation-related appeals. In addition, the calculation methods 
differed. We calculated the avoidable remand rate as the number of 
avoidable remands on original appeals--which excludes appeals that 
were previously remanded by the Board--divided by the number of 
original appeals decided by the Board. VBA calculated the rate as the 
number of avoidable remands on original appeals, divided by the total 
number of appeals decided by the Board. We believe that VBA's method 
is misleading because appeals in the denominator are not restricted as 
they are in the numerator. 

To assess the reliability of record-level appeals data, we (1) 
interviewed Board officials about program and technical operations and 
(2) performed electronic testing to identify missing and potentially 
invalid data and to identify internal inconsistencies. We found that 
the data were reliable for our reporting purposes. 

[End of section] 

Appendix II: Comments from the Department of Veterans Affairs: 

Department of Veterans Affairs: 
Office of the Secretary: 

December 29, 2009: 

Daniel Bertoni: 
Director: 
Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Bertoni: 

The Department of Veterans Affairs (VA) has reviewed the Government 
Accountability Office's (GAO) draft report, Veterans Disability 
Benefits: Further Evaluation of Ongoing Initiatives Could Help 
Identify Effective Approaches for Improving Claims Processing (GA0-10-
213) and generally agrees with GAO's conclusions and concurs with 
GAO's recommendations to the Department. The enclosure specifically 
addresses each of GAO's recommendations. 

VA appreciates the opportunity to comment on your draft report. 

Sincerely, 

Signed by: 

John R. Gingrich: 
Chief of Staff: 

Enclosure: 

[End of letter] 

Enclosure: 

Department of Veterans Affairs (VA) Comments to Government 
Accountability Office (GAO) Draft Report: Veterans Disability 
Benefits; Further Evaluation of Ongoing Initiatives Could Help 
Identify Effective Approaches for Improving Claims Processing
(GA0-10-213): 

GAO Recommendations: We recommend that the Secretary for Veterans 
Affairs direct: 

Recommendation 1: VBA to collect data on redistributed claims for 
development, rating, and appellate work to help assess the timeliness 
and accuracy of resource centers' output and the effectiveness of 
workload distribution. 

VA Response: Concur. VBA's Systematic Technical Accuracy Review staff 
began collecting accuracy data on redistributed rating work in April 
2009. Additionally, VBA uses the VETSNET Operations Reports (VOR) as a 
primary tool for workload management. VBA is making changes to VOR to 
allow for improved tracking of brokered (redistributed) claims. VBA 
expects these changes to be available in VOR in March 2010. When these 
changes are made, VBA will have data to assess the timeliness of 
redistributed rating, development, and appellate work. VBA will then 
be able to conduct additional analyses regarding the effectiveness of 
workload redistribution. Target Completion Date: March 2010. 

Recommendation 2: VBA and the Board to establish an evaluation plan 
for assessing the Expedited Claims Adjudication (ECA) pilot process 
and guiding any expansion decisions. Such a plan should include 
criteria for determining how much improvement should be achieved under 
the pilot on specific performance measures—such as average VBA and 
Board processing times—and methods for how VBA and the Board will 
consider ECA's impact on non-ECA claims and appeals processing before 
implementing the process widely. 

VA Response: Concur. The Board will initiate a meeting with VBA in 
early 2010 to finalize a plan to evaluate the relative timeliness of 
ECA claims and appeals processing. The specific criteria for the 
success or failure of the pilot will be addressed at the initial 
evaluation meeting. The Board will work with VBA to establish 
evaluation criteria, actions, and responsibilities, and also to 
explore ECA's impact on non-ECA claims and appeals processing, if any. 
In identifying specific benchmarks for success, special attention will 
be paid to weighing the processing time saved for claimants with any 
potential administrative burdens on VA. Based on data obtained from 
the evaluation, the Board will make recommendations to the Secretary 
regarding the potential expansion of the pilot, or to permanently 
incorporate successful aspects of the pilot. The Board's goal is to 
have a formal evaluation complete, and recommendations to the 
Secretary, before the conclusion of fiscal year 2010. 

Recommendation 3: VBA to establish a plan to evaluate its claims 
processing reorganization pilot and guide any expansion decisions. 
Such a plan should include criteria for determining how much 
improvement should be achieved in the pilot on specific performance 
measures—such as decision timeliness and accuracy—before the process 
is implemented throughout VBA. 

VA Response: Concur. The VBA Compensation Claims Pilot in Little Rock, 
Arkansas began in July 2009, and is scheduled to run through May 2010. 
Using Lean Six Sigma principles and organizational behavioral changes, 
VBA is working with a private consulting firm to reengineer the paper-
based claims process. As part of the contract, the private consulting 
firm will report periodically on mutually agreed upon critical success 
factors, which were determined at the beginning of the pilot 
(Attachment A). In addition, VBA will receive a final report at the 
completion of the pilot, which will include an evaluation of the 
pilot, with clearly defined criteria to assess the pilot. This 
information will educate decisions for further implementation. In the 
meantime, periodic updates on the pilot are provided to VBA leadership 
so that gains achieved through the pilot can be exported to other 
regional offices. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov: 

Staff Acknowledgments: 

Shelia Drake, Assistant Director; Joel Green; Lisa McMillen; and Bryan 
Rogowski made significant contributions to this report. In addition, 
Walter Vance provided guidance on research methodology; Cynthia Grant 
and Christine San provided assistance with data analysis; Roger Thomas 
provided legal counsel; Jessica Orr helped with report preparation; 
and James Bennett provided assistance with graphics. 

[End of section] 

Related GAO Products: 

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' Benefits: Increased Focus on Evaluation and Accountability 
Would Enhance Training and Performance Management for Claims 
Processors. [hyperlink, http://www.gao.gov/products/GAO-08-561]. 
Washington, D.C.: May 27, 2008. 

Veterans Benefits Administration: Progress Made in Long-Term Effort to 
Replace Benefits Payment System, but Challenges Persist. [hyperlink, 
http://www.gao.gov/products/GAO-07-614]. Washington, D.C.: April 27, 
2007. 

Veterans' Disability Benefits: VA Can Improve Its Procedures for 
Obtaining Military Service Records. [hyperlink, 
http://www.gao.gov/products/GAO-07-98]. Washington, D.C.: December 12, 
2006. 

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' Disability Benefits: Claims Processing Challenges and 
Opportunities for Improvements. [hyperlink, 
http://www.gao.gov/products/GAO-06-283T]. Washington, D.C.: December 
7, 2005. 

VA Disability Benefits: Board of Veterans' Appeals Has Made 
Improvements in Quality Assurance, but Challenges Remain for VA in 
Assuring Consistency. [hyperlink, 
http://www.gao.gov/products/GAO-05-655T]. Washington, D.C.: May 5, 
2005. 

Veterans' Benefits: More Transparency Needed to Improve Oversight of 
VBA's Compensation and Pension Staffing Levels. [hyperlink, 
http://www.gao.gov/products/GAO-05-47]. Washington, D.C.: November 15, 
2004. 

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. 

High-Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/AO-03-119]. Washington, D.C.: January 2003. 

Veterans' Benefits: Claims Processing Timeliness Performance Measures 
Could Be Improved. [hyperlink, 
http://www.gao.gov/products/GAO-03-282]. Washington, D.C.: December 
19, 2002. 

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: VBA's Efforts to Implement the Veterans Claims 
Assistance Act Need Further Monitoring. [hyperlink, 
http://www.gao.gov/products/GAO-02-412]. Washington, D.C.: July 1, 
2002. 

Veterans Benefits Administration: Problems and Challenges Facing 
Disability Claims Processing. [hyperlink, 
http://www.gao.gov/products/GAO/T-HEHS/AIMD-00-146]. Washington, D.C.: 
May 18, 2000. 

[End of section] 

Footnotes: 

[1] VA's ratings are in 10 percent increments, from 0 to 100 percent. 
Generally, VA does not pay disability compensation for disabilities 
rated at 0 percent. As of November 2009, basic monthly payments ranged 
from $123 for 10 percent disability to $2,673 for 100 percent 
disability. 

[2] Additional compensation is available to qualifying dependents of 
veterans whose disability is rated 30 percent or higher as provided by 
38 U.S.C. § 1115. 

[3] VA also pays pensions to surviving spouses and unmarried children 
of deceased wartime veterans. In addition, VA pays dependency and 
indemnity compensation to some deceased veterans' spouses, children, 
and parents. 

[4] These representatives are known as "veteran service 
representatives," or "VSRs." 

[5] These specialists are known as "rating veteran service 
representatives," or "RVSRs." 

[6] This strategic goal includes compensation-and pension-related 
appeals. 

[7] These strategic goals are based on compensation-and pension-
related decisions. 

[8] These data exclude appellate work. The reported compensation 
claims data are comprised of the following three VBA categories: 
initial compensation claims with eight or more disabling conditions; 
initial compensation claims with seven or fewer disabling conditions; 
and reopened compensation claims, whereby a veteran submits a claim 
for additional benefits anytime after submitting the initial claim 
(e.g., if a new service-connected disability arises or a previously 
claimed disability worsens). 

[9] The average days pending is the average time that pending claims 
have been awaiting a decision at a point in time. VA calculates the 
average days pending for a fiscal year on the last day of the year. 
The average days to complete a claim is the average processing time of 
decisions reached during a specific period. 

[10] VA's fiscal year 2008 average days pending goal for compensation 
claims was 120 days. VA does not have a comparable goal for average 
days to complete compensation claims. However, VA's fiscal year 2008 
goal for average days to complete rating-related claims, including 
both compensation and pension claims, was 169 days. 

[11] VA changed how it calculates claims processing accuracy in fiscal 
year 2002. Therefore, to analyze and report consistent data, we 
considered accuracy data for compensation claims starting in fiscal 
year 2003. 

[12] See, for example, Haas v. Nicholson, 20 Vet. App. 257 (2006). The 
Agent Orange Act of 1991, Pub. L. No. 102-4, broadens the presumption 
of exposure to herbicides in Vietnam. See also, 38 C.F.R. § 3.309 
(diseases subject to a presumptive service connection). 

[13] The other conditions are B cell leukemias and ischemic heart 
disease. 

[14] 38 C.F.R. § 4.124a (73 Fed. Reg. 54693, Sept. 23, 2008). 

[15] Veterans Benefits Improvement Act of 2008, Pub. L. No. 110-389; 
Veterans Benefits Improvement Act of 2004, Pub. L. No.108-454; 
Veterans Benefits Act of 2003, Pub. L. No. 108-183; and Veterans 
Claims Assistance Act of 2000, Pub. L. No. 106-475. 

[16] See, for example, Haas v. Nicholson, 20 Vet. App. 257 (2006); 
Moody v. Principi, 360 F.3d 1306 (Fed. Cir. 2004); Szemraj v. 
Principi, 357 F.3d 1370 (Fed. Cir. 2004); and Disabled American 
Veterans v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 
2003). 

[17] Pub. L. No. 104-475. 

[18] We analyzed rating-related compensation appeals to the Board from 
VA's appeals database. 

[19] VBA includes appellate work in its accuracy assessments. However, 
because appellate work comprises a relatively small portion of the 
decisions assessed, we cannot reliably identify accuracy rates for 
appellate work from these assessments. 

[20] VA categorizes remands as "avoidable" when the reason for the 
remand occurred before VBA certified transferring the appeal to the 
Board. 

[21] We analyzed avoidable remand data from fiscal years 2006 to 2008 
because complete, reliable data were previously not available in VA's 
appeals database. See appendix I for information about avoidable 
remand calculations. 

[22] This average is based on appeals that VBA certified as being 
ready for the Board. All appeals do not reach this stage because 
appellants may resolve their appeals beforehand. 

[23] Ebert v. Brown, 4 Vet. App. 434 (1993). 

[24] Vazquez-Flores v. Peake, 22 Vet. App. 37 (2008), vacated Vazquez- 
Flores v. Shinseki, 580 F.3d 1270 (Fed. Cir. 2009). 

[25] See footnote 24. 

[26] These and other data in this paragraph are based on full-time- 
equivalent staffing. 

[27] Pub. L. No. 111-5. 

[28] GAO, Veterans' Disability Benefits: Claims Processing Challenges 
Persist, while VA Continues to Take Steps to Address Them, [hyperlink, 
http://www.gao.gov/products/GAO-08-473T] (Washington, D.C.: Feb. 14, 
2008). 

[29] As required under section 225 of the Veterans' Benefits 
Improvement Act of 2008 (Pub. L. No. 110-389), GAO is in the process 
of evaluating VA's training programs for claims processors. This 
evaluation builds on prior work in which we found that increased focus 
on evaluation and accountability would enhance training and 
performance management for claims processors. See GAO, Veterans' 
Benefits: Increased Focus on Evaluation and Accountability Would 
Enhance Training and Performance Management for Claims Processors, 
[hyperlink, http://www.gao.gov/products/GAO-08-561] (Washington, D.C.: 
May 27, 2008). 

[30] VA also redistributes workloads from backlogged regional offices 
to regional offices without resource centers but with more capacity to 
handle such workloads. VA refers to moving workloads--to either a 
resource center or another regional office--for processing as 
"brokering." 

[31] VBA determines the number of claims redistributed to rating and 
appeal resource centers on a monthly basis, and it determines the 
number of claims redistributed to development resource centers on a 
quarterly basis. 

[32] The military's disability evaluation system involves determining 
whether a servicemember "is unable to reasonably perform the duties of 
his or her office, grade, rank, or rating," taking into consideration 
the requirements of a servicemember's current specialty. 

[33] In September 2008, we reported that while DOD and VA had 
established measures for the disability evaluation system pilot's 
performance and a mechanism for tracking performances, they had not 
established criteria for determining whether the pilot was successful 
and should be expanded on a large scale. 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). 

[34] DOD conducts fewer disability evaluations than VA, in part, 
because there are fewer servicemembers than veterans. Currently, there 
are about 10 times more veterans than servicemembers. In addition, DOD 
only conducts disability evaluations for referred servicemembers whose 
medical conditions may prevent them from performing their military 
duties. VA conducts disability evaluations for veterans as claimed 
conditions arise or worsen. 

[35] Participating claimants may submit information after the 
abbreviated response periods, but in doing so their participation in 
ECA is canceled. VA would then process their claims or appeals using 
its normal procedures. 

[36] Pub. L. No. 110-389. 

[37] Fully developed claims are claims that do not require additional 
development by or assistance from VA other than scheduling a VA 
examination or obtaining records held by the federal government. 

[38] As with ECA, participating claimants may subsequently submit 
additional information; however, in doing so, their participation in 
the pilot is canceled. VA would then process their claims or appeals 
using its normal procedures. 

[39] Booz Allen Hamilton, Veterans Benefits Administration 
Compensation and Pension Claims Development Cycle Study, a report 
prepared for the Department of Veterans Affairs, Veterans Benefits 
Administration (June 5, 2009). 

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

[41] 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). 

[42] VA calls these tests "inter-rater reliability" studies. 

[43] In fiscal year 2009, VA received and began processing about 
25,000 Benefits Delivery at Discharge claims. 

[44] GAO, 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.: Dec. 9, 
2005). 

[45] We analyzed avoidable remand data from fiscal years 2006 to 2008 
because complete, reliable data were previously not available in 
VACOLS. 

[End of section] 

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