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House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.

    The committee met, pursuant to call, at 1:50 p.m., in room 334, Cannon House Office Building, Hon. Bob Stump (chairman of the committee) presiding.
    Present: Representatives Stump, Smith, Bilirakis, Spence, Everett, Buyer, Quinn, Bachus, Stearns, Moran, Cooksey, Hutchinson, Hayworth, LaHood, Evans, Kennedy, Filner, Gutierrez, Doyle, Mascara, Peterson, Reyes, Snyder, and Rodriguez.


    The CHAIRMAN. The committee will please come to order.
    The purpose of today's hearing is to take testimony on the findings and the recommendations of the Veterans' Claims Adjudication Commission, Public Law 103–446, established by the committee to evaluate the VA's claims adjudication system.
    There was good reason to establish this commission. Over the years claims processing has been a consistent flaw in the VA's relationship with veterans. Each year we hold oversight hearings on how VA is processing claims and hear a constant flow of complaints about every facet of VA's claims operation, including congressional caseworkers struggling with 30,000 constituent inquiries every year about problems with their VA benefits.
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    Check the hearing reports. In the VSO's own words, you will see that it is not just fixing the computer or making the employees do the right thing or eliminating hand-off or restructuring that is necessary. It is all of these and more.
    Veterans' service organizations tell us that they collectively spend over $50 million a year to assist veterans with their benefit claims, and we all, of course, applaud these veterans' service organizations for helping the veteran. Think what could be done with that money if these funds could be spent for scholarships, assisting the homeless, emergency family assistance, and the citizenship programs.
    Activities at the Board of Veterans' Appeals and the Court of Veterans Appeals will cost taxpayers about $47 million each year. That is $47 million that is not available to approve benefits or open new clinics.
    In my opinion, the commissioners have done a good job, and the veterans owe them a debt of gratitude. They were willing to look at the new ideas and not be bound by the past or by narrow biases.
    The Strategic Management Group, VA's most senior managers, and the work groups assigned to review the Commission agreed with the majority of the Commission's recommendations and found reasons to study some of the more controversial ones.
    Unfortunately, the Secretary has taken a much more reactionary approach, disagreeing with many of his own Strategic Management Group's positions. While he is entitled to his own views, it appears that he may be locked in the past.
    We intend to work with the service organizations and VA to draft several bills reflecting some of the recommendations of the Commission. We plan to introduce a bill to institute a limited lump sum compensation system that would be optional, not mandatory, for those static disabilities rated at 20 percent or less. These lump sum payments would be exempt from laws requiring offsets against military retirement pay, as well as DOD severance incentives. I am sure Mr. Bilirakis will like to hear that.
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    Second, we should consider a bill to make it mandatory for a claimant who disagrees with the VA decision to go before a local hearing officer who would be empowered to affirm, reverse, or remand a regional office decision. That is before it is sent up to Washington and takes all of that time.
    This bill will not change the functioning of the Court of Veterans Appeals.
    We should also study and consider suggestions relating to pension reform, C&P claims data forms, filing simplification, separation exams, and clarifying several legal concepts, like duty to assist.
    I would invite the VSOs to become part of the solution by offering suggestions on how to improve these bills. Years of stagnation have put veterans in a bind, and doing nothing is the worst we can do. It does not make any sense to waste time on hearings in which the service organizations merely list the VA's faults and provide no solutions.
    I hope we can work together just as we have on health care eligibility reform.
    I would now like to recognize Mr. Evans, the Ranking Member of the committee.


    Mr. EVANS. Thank you, Mr. Chairman.
    I also want to recognize the contributions that the Commission has made to our understanding of the VA's processing of claims.
    Some of the issues touched on by the report have generated considerable controversy in the veterans' community. While many of the recommendations of the Commission have been supported by the VA, several others have been rejected. I hope that the issues which have been raised will encourage all of us to think creatively about the problems which continue to arise in the handling of veterans' claims and to develop solutions which will improve the ability of the VA to serve veterans more effectively and efficiently.
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    Contrary to abundant rumors, I want to reassure the veterans' service organizations and the veterans of our country that our committee will not enact legislation without giving their views full consideration.
    I remain very concerned, however, about the findings in the report and the testimony we heard last week concerning continued problems with the quality of claims development and decisionmaking at the regional office level. Simply reducing the amount of time to adjudicate claims will not necessarily improve the quality of VA decisionmaking. Indeed, some information needed for proper development of the claim is not within the VA's control.
    The Commission's survey indicated it took an average of 210 days to process an original compensation claim from the date that the claim was received until a decision was reached. Much of this time was spent in the development of the claim.
    While technological advances may assist us in expediting the handling of claims, they will not produce a better outcome unless serious attention is paid to the quality of claims development in the adjudication process.
    I am especially concerned about repeated and continued reports of the VA's failure to notify veterans of the evidence needed to support their claim and to assist veterans in the development of their claims. So-called harmless errors in the development of a claim are not viewed as harmless by the veterans affected. They do not generate faith in the fairness of the system either.
    I appreciate the VA's willingness to implement many of the Commission's suggestions. I also expect the VA to address the issues of adjudication quality and accountability for decisions in a more effective manner than has been evidenced so far.
    As I said earlier, Mr. Chairman, I cannot stay for the hearing due to a previous commitment, but I do support the work of our committee in reviewing the Commission's recommendations.
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    The CHAIRMAN. Thank you, Mr. Evans.
    Any others care to make an opening statement?
    I am sorry. Did I overlook someone?


    Mr. GUTIERREZ. Very quickly I just want to echo the comments of the Ranking Member, Mr. Evans, and just to say, Mr. Chairman, if we could just do something to get a report because we are processing the claims in Chicago out over in Hines. They are going to move them to somewhere in Texas. There is going to be a move somewhere in Texas, and the computers have to be up, and you know, like a 1 percent error rate is huge. It is tens of thousands of veterans not getting their checks, and they still do not have the system in place, you know, this transfer. So in the year 2000 this has got to work. So we have got to practice this in 1999, and we are halfway through 1997.
    But, Mr. Chairman, if you could just do something to get us some answers in terms of making sure that computer system is on board, because if it is not, we are in deep trouble getting those claims out to everybody.
    The CHAIRMAN. Mr. Gutierrez, I believe Mr. Everett's committee is going to look into that, but thank you very much. He has left the room right now.
    Anyone else? Mr. Quinn.


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    Mr. QUINN. Mr. Chairman, thanks very much.
    I would like to associate myself with your remarks and the remarks of Mr. Evans. Now the committee, the department, and the VSOs, I think, have an historic opportunity to improve the system. As you know, Mr. Chairman, the subcommittee with Mr. Filner's leadership has begun a series of hearings on the various benefits programs that are implementing the Government Performance and Results Act. Many of the members are here today and Mr. Rodriguez joined us last week before he was officially a member of the committee, and we appreciate his interest, to find ways where Congress can work together to determine some of those outcomes and those ways in which we can help.
    The Results Act is designed to sort of force/influence, or encourage the agencies and the Congress to work together, and I think that that is where we are going to find any success that we have.
    I am very interested, as the entire subcommittee is, and grateful to you calling today's hearing.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Any others?
    Mr. BILIRAKIS. Yes, Mr. Chairman.
    The CHAIRMAN. Mr. Bilirakis.


    Mr. BILIRAKIS. I was going to withhold, but I guess maybe very, very briefly. I do have a full statement I would like to have put in the record.
    The CHAIRMAN. Without objection.
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    Mr. BILIRAKIS. Mr. Chairman, two Congresses ago I served as the Ranking Minority Member of the Compensation, Pension and Insurance Subcommittee, and Representative Slattery at the time was the chairman, and we really focused on this problem.
    We went downtown and spent an awful lot of time on it, and then, of course, our terms are only 2 years, and you move on, and then there are interruptions, and you said it very well when you referred to the fact that the veterans' service organizations spend millions of dollars and devote countless hours, and the post service officers who never get any credit put in so much more time, too, and yet progress does not seem to be made.
    It is just very hard, I think, for all of us, and we are all sort of doers or we would not be in Congress, to accept the fact that no matter what we do, it just does not seem to be helping all that much. I just hope we can come up with some sort of an imaginative way to maybe focus on this and not tie it into our terms or our time on the committee, but so that there will be a continuation of thinking, you know, rather than an interruption every darn time we change committees or we retire, whatever the case may be.
    I do not know. I wish I had the answer. We do not have the answer, but we keep looking for it.
    The CHAIRMAN. Perhaps we can find it.
    Mr. BILIRAKIS. Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, sir.
    Any others? (No response.)
    The CHAIRMAN. If not, Mr. William LaVere, a member of the Veterans' Claims Adjudication Commission, if you would care to come up, please.
    We are going to have votes this afternoon. We have five panels. We would like to expedite this as rapidly as possible. We are not trying to cut you off, but, sir, if you could limit your remarks to 5 minutes, it would be appreciated. Your entire statement will be included as part of the record, and if you care to introduce Mr. Kehrer or perhaps I might as well do it. Mr. Darryl Kehrer, the Executive Director of the Commission. We welcome both of you.
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    Mr. LaVere, you can proceed in any way you want.


    Mr. LAVERE. Could I have a brief opening statement?
    The CHAIRMAN. Please proceed.
    Mr. LAVERE. Good afternoon, Mr. Chairman and members of the committee.
    Mr. Chairman, I very much appreciate the opportunity to testify before the committee on behalf of the Veterans' Claims Adjudication Commission. Unfortunately, our Chairman, Mr. Melidosian, is out of the country and is unavailable to testify. Mr. Melidosian would very much want to be here, but his absence gives me the opportunity to say a few things about him that he would be too modest to say about himself.
    Our chairman is a remarkable man. This committee is well aware of his extensive background, but for me the experience of working closely with him was nothing less than a revelation. Over the course of the Commission's work, I was constantly amazed at the breadth and depth of the man's talents. His intellectual capabilities are unique, as are his managerial, leadership, and social skills.
    It all adds up to a rare combination of talents in one individual. I can assure you that all of our chairman's talents were needed to produce the Commission's report. He led us; he directed us; he kept us on track; and he single handedly fashioned the maximum cohesiveness from a diverse group.
    But perhaps most importantly, whatever new insights are in the report, and I believe there are many, are the products of his probing, insightful mind. I can honestly say of our chairman that rarely, if ever, has one person accomplished so much with so little.
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    As the spokesperson for the Commission, I would be remiss if I did not also pay public tribute to the work of the Commission's staff, adroitly led by its Executive Director. I wish that all those who are so quick to criticize our civil servants could have seen first hand how the staff accomplished a monumental job. They combined exceptional knowledge and abilities with extraordinary dedication and enthusiasm. It goes without saying that the Commission's report would not have been possible without them, and the Commission is deeply grateful for their efforts.
    The Commission's report has been out for 5 months, and I am sure that by now all interested parties have gone over it with a fine-toothed comb. Therefore, it would be superfluous for me to summarize it no matter how concisely.
    However, I would like to take this opportunity to make some general observations about the Commission's work. The report is the successor to a long series of reports about the VA system. I think that it contains a number of conclusions and recommendations that should be helpful to Congress and the VA in improving the claims processing system.
    However, as with other reports, while adoption of its recommendations will result in incremental improvements to the system, there is no magic bullet. What is perhaps unique about this report, however, is that it includes a wealth of new data that should provide new tools and new insights to those involved in ongoing efforts to improve the VA's claims processing system.
    The intent of the Commission was to examine the claims processing system as thoroughly as possible in order to develop the data that would enable the VA to better manage what it has been asked to do by Congress. If these data led to conclusions and recommendations the Commission could adopt unanimously or with a solid majority, so much the better.
    It is important to note, however, that the Commission was well aware of its limitations in terms of its expertise, time, and resources. This is the reason why much of the material in the report includes data and analyses in areas that were natural adjuncts to the Commission's basic inquiries, but which are unaccompanied by specific recommendations. Simply put, specific recommendations in these area were beyond the scope of the Commission to make and, in any event, would have been premature.
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    The Commission believes, however, that these data and analyses are a good starting point and that they will be valuable to Congress and the VA who do have the expertise, time, and resources to develop them fully. Only then will definitive recommendations in these areas be possible or appropriate.
    I also want to emphasize that the Commission had no preconceived agenda if for no other reason than it was too diverse in make-up to have one. The Commission developed original data for the purpose of getting an accurate picture of the extent and nature of the claims work load the VA is required to process. The data developed are neutral in the sense that they merely describe what is, but what is, of course, has great significance for managing current work loads and projecting future work loads.
    It is significant, for example, that repeat or reopened claims outnumber original compensation claims by a ratio of nearly three to one; that of the new accessions to the compensation rolls in 1995, veterans had an average of 2.7 disabilities; that only 16 diagnostic codes out of more than 700 accounted for almost 50 percent of those disabilities; and that 86 percent of the total number of disabilities were rated 0 or 10 percent.
    It is also significant that as the Commission's year 2015 model projections indicate, based on what now is, it is very unlikely that VA's claims workload will decrease in the future.
    During the course of the Commission's work, we frequently received comments to the effect that our task was difficult and unenviable. It was difficult to be sure, but our acknowledged limitations insulated us from the truly difficult tasks of actual strategic management and the policy and decisionmaking it entails.
    The Commission's report, however, is not without controversy as the dissents of individual commissioners to Commission findings, conclusions, and recommendations clearly demonstrate. Indeed, if it were, it would not be worth much, but in the end, I think the Commission's report represents a comprehensive piece of staff work that can be used by Congress and VA for the complex and difficult tasks of improving program, policy and decisionmaking, and strategically managing current and future claims workloads more effectively.
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    In conclusion, I would like to say that the Commission is gratified to learn that its report has already been put to use by the NAPA panel. On behalf of the Commission, I thank Chairman Socolar for his kind comments on the Commission's report.
    That concludes my statement, and I would be happy to answer questions if I can.

    [The prepared statement of Mr. LaVere appears on p. 36.]

    The CHAIRMAN. Thank you, Mr. LaVere. I am sure there will be some.
    I have a question. Let me ask you, in reviewing the testimony of some of the veterans' service organizations, the statements were made that the Commission may have exceeded its mandate. How would you respond to that?
    Mr. LAVERE. Well, I do not think we exceeded our mandate at all. I do not think we even approached the mandate that we were given by Congress, and the reason for that was primarily our lack of resources and the time.
    The other thing I think that is very important and that the chairman has emphasized so much in the past is that the make-up of the Commission was not a group of in-house experts. It was purposely designed to have a diversity of professions and views, and when you have this kind of diversity, people are going to ask very obvious questions, like what is really going into the system.
    I think the best example is probably with Mr. Merritt from the insurance industry, where as a routine matter they settle claims in an entirely different way than the VA system, and he would like to know if there were any characteristics that were different or any similar that you could use for an approach for an alternative type of payment system.
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    But the data that we developed is simply what was in the actual VA database, but it was in terms of more explicitly finding out who was in the system, why are they in the system, what can we expect in the future based on what is in there now.
    The CHAIRMAN. Thank you.
    Let me ask you one more question, and then I will yield. Were the report's examples regarding lump sum payments intended to recommended specific methods of payment or were they just merely food for thought?
    Mr. LAVERE. The latter, food for thought.
    The CHAIRMAN. Food for thought. No specific recommendations?
    Mr. LAVERE. No.
    The CHAIRMAN. I thank you, sir.
    Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman.
    The Commission devoted a significant amount of time to the analysis of repeat claims. What relationship, if any, did you identify between the repeat claims and VA's failure to advise claimants of the evidence necessary to decide a claim or the evidence a claimant may submit to assist the development of a claim?
    Was VA less likely to assist persons rated from 0 to 10 percent who file repeated claims?
    Mr. LAVERE. No, I do not think there was anything of that nature that we identified, but the distinction is the original compensation claims, at least the initiatives that are now underway with the separation medical examinations and the extended efforts to advise the separating veterans of their potential rights to VA benefits, that that part of the process we were very impressed with, with what was going on within the VA.
    Now if all of that work, you should have a completely adequate record to decide original compensation claims at the time the veteran is separated, but when you get into the reopened and repeat claims, there is not that kind of process just because of the very nature of it, that a veteran wants to have his case reopened or he is filing for an increased rating.
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    But in those kinds of situations, we think that there could be a much easier and rational way of developing a record that was focused on actually what had to be proven, and there, I think, is where the current process is somewhat deficient.
    But here, again, I think that the VA at this level is addressing this particular issue very well with the BPR. The Commission was very impressed with the direction that the BPR and the VA is going in that direction. I think it just has to if it works anywhere near according to plan result in better developed records more quickly.
    The CHAIRMAN. Pull the microphone just a little closer to you, please. I think the people in the back of the room may be having a little trouble hearing you.
    Mr. MASCARA. I have heard over the past 3 years the great strides that have been made in reducing the number of days it takes to adjudicate a claim, and I have heard all kinds of numbers, 165 to 100 to 200 and some to 160-something.
    In dealing recently with the claim for the Gulf War Syndrome or undiagnosed illnesses, I note the difference between what happened in Phoenix and what happened in Philadelphia, and Phoenix really performed well, and I am beginning to wonder whether or not the people who are in charge of those locations in the region or area, wherever it might be, that, on the one hand, Phoenix did well and Philadelphia did not. Are people trained, some kind of standard training, how to deal with employees who work for the VA who are adjudicating claims?
    I just get the sense that if the Director has some kind of mindset, and I read in your testimony Mr. LaVere where people are making claims that are 50 years old, that somehow because of the number of years that have gone by since the individual served in the United States military, that there is a mindset that we should not look at these very closely and we should not give them the same kinds of consideration that you would otherwise.
    Mr. LAVERE. So what is the— —
    Mr. MASCARA. Well, the question is: do you have standardized training? Is there less personnel today than there was years ago working on adjudicating claims?
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    Instead of all of us sitting here and being very kind to each other, someone should admit, well, we do not have enough people and that is the reason, or we do not do training. We do not standardize training or directors in these different regional offices who will counsel with the people who work for them who have the responsibility of providing adjudication for a claim.
    I am asking you what is going on out there. I have heard enough now over the past 2 years and 5 months I am beginning to wonder if we are all being very kind to each other and not really getting to the source of the problem.
    Do you need more people? Do you have less people now than you had 2 years ago or 5 years ago?
    Mr. LAVERE. Well, you know, I am not with the VA, but all I can give you in terms of the training and the quality of the adjudication is anecdotal evidence, and I personally was very impressed with the adjudication officer group. I thought they were very knowledgeable and very dedicated, and they were credible. They were very credible to me in terms of what they liked to do, what they could do, what direction they thought should be taken by the VA in the adjudication system.
    One thing that struck me is that I had been under the impression from prior budget matters and things of that nature that the experience of the adjudicators in the VA was a very short experience. A lot of employees, adjudicators, have retired, and they had not filled the gap with training.
    The adjudication officers dispelled me of that notion. They said that the adjudicators that they have now are better than they have been in a long, long time, and I also think that the VA has made great strides in terms of their training efforts. I do not in any way question their good faith.
    Now, why some regional offices perform better than others, that is something I just cannot address. Of course, that would be part of a strategic management focus.
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    The CHAIRMAN. Mr. Bilirakis.
    Mr. BILIRAKIS. Well, thank you, Mr. Chairman.
    I think we are all grateful for the report and for the time that you all put into it. It all helps, I suppose.
    In my opening statement, a portion I did not refer to in my oral remarks, I say that some of the service organizations express alarm, if you will, with some of your findings, and I guess I would ask the flat out question: did the Commission recommend in any way that veterans not be compensated for their service connected disabilities or that the pension system be abolished?
    Mr. LAVERE. No.
    Mr. BILIRAKIS. All right. Do you want to expand upon that? Why might they, the veterans' organizations, come to the conclusion that that is really what you meant or recommended?
    Mr. LAVERE. I have no idea.
    Mr. BILIRAKIS. Well, you talked about simplifying the pension system.
    Mr. LAVERE. Right. There are a series of options. I may say that that is so complicated that I do not know how in God's name we could have possibly had this kind of result. The Commission's inquiry in that area, of course, we had statements from the Social Security Administration with the SSI program.
    Mr. BILIRAKIS. Yes.
    Mr. LAVERE. And if there was some way that we could balance the two, if they were just duplicating various functions, why have the duplication?
    But as we got into it more and more and more, the differences were so great that there were only certain aspects that you could actually address, but in no instance had anyone even thought of eliminating them.
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    Mr. BILIRAKIS. Actually eliminating them.
    Mr. LAVERE. It just never entered anybody's mind. This was to see if it could be consolidated into a more functional delivery system.
    Mr. BILIRAKIS. You apparently tried to address in a pro and con manner the idea of lump sum payments at the lower disability levels. Do you want to expand upon that in any way whatsoever?
    Do you personally, based on your experience through all of this process, and I know that there are four pros and four cons listed here in your booklet, but do you personally think there might be merit to something like that?
    Of course, staff may have already gone through this, but that is a question that we will ask the veterans, too, when they come up.
    Mr. LAVERE. Personally I do. I think there would be considerable merit to it, and certainly as an option.
    Mr. BILIRAKIS. As an option?
    Mr. LAVERE. Yes.
    Mr. BILIRAKIS. Any way you look at it, it would be an option, would it not? I mean certainly not anything that is going to be forced upon the veteran?
    Mr. LAVERE. Right, right. I think when you start comparing what is in the system, and what was really truly startling to me is that the data on the 1995 accessions to the compensation rules, that 0 and 10 percents accounted for 86 percent of the disabilities. That is a massive portion of the adjudication case work.
    And the other aspect is the repeat claims, and the profile of an average claimant going before the VA is someone who has filed before, who is in benefit status. I think two-thirds are in receipt of compensation filing again. They are represented by a professional veterans' service organization. At the initial level it is 57 percent representation, and at the Board of Veterans' Appeals there is over 90 percent representation.
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    With that level of representation, competent representation, the development features just should not be that time consuming and that complicated. You should be able to know what is needed for this particular claim to establish exactly what they think they can establish and then work together with the VA to identify that evidence and then see who is in the best position to get it.
    And in my view that would pretty much take care of all the complex duty to assist issues that arise subsequently.
    Mr. BILIRAKIS. Well, let me ask you, sir. Somewhere in here you refer to empowering a corporate data collection and analysis focus. Can you describe very briefly, and my time is about up, why the VA might need the corporate database, the type of information interfaces it should have? In other words, what is the value of such a database? Why have you recommended it?
    Mr. LAVERE. Darryl, do you want to respond to that?
    Mr. KEHRER. Yes. The value, sir, I believe is the data would be data at the departmental level rather than data that is stovepiped, if you will, in each of the operating elements, such as the Board of Veterans' Appeals or the Veterans' Benefits Administration or the health side of the operation.
    For policy development and decisionmaking purposes, the Secretary needs departmental data, corporate data, and those data are much more holistic, if you will, than the data at the administration level
    Mr. BILIRAKIS. I see.
    Mr. KEHRER. And the Commission believes a corporate data here would promote more informed decisionmaking, as well.
    Mr. BILIRAKIS. I see. Thank you.
    Thank you, Mr. Chairman.
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    The CHAIRMAN. Mr. Rodriguez, would you have a question?
    Mr. RODRIGUEZ. No, Mr. Chairman.
    The CHAIRMAN. Mr. Quinn.
    Mr. QUINN. Thank you, Mr. Chairman.
    I had a couple of questions that you have answered already, sir. So I appreciate the question on the typical claimant. With the demographics that you have, you've outlined it as someone who is already in the process with a claim that has been made.
    But you have mentioned already two or three times just this afternoon, and it is mentioned in the report, this business of a repeat claim, and you then said just a few minutes ago in response to Mr. Bilirakis that there ought to be a simpler way once it is there and they are represented by competent folks from AVSO to cut down on all that goes with that.
    Can you take a minute to maybe offer a suggestion or two, given that that is where you find the typical claimant?
    Mr. LAVERE. Well, I think that the BPR is right on, and their whole approach is brand new. It is very, very welcome, and I wish the other agencies that adjudicate claims in large numbers would take the same approach and have the same commitment to actually implementing.
    But, you know, if I can speak frankly.
    Mr. QUINN. Yes, please.
    Mr. LAVERE. And this is my personal view, not the Commission's, which is that I do not like it personally when the claim system is taken away from the veteran and the veterans' service organization. The whole attitude of the paternalistic, the, well, you file and we will take care of you and you will get what you need, we will decide and we will keep you informed maybe, and certainly at the end of the process you will get a decision up or down.
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    Well, a claimant, and especially a claimant who is represented by an experienced veterans' service organization, it is his claim. It is not the VA's claim, and all he needs is to find out what he actually needs to prove, and then getting that should not be some complex issue.
    Mr. QUINN. But it is.
    Mr. LAVERE. Does it exist? Yes. Who has it? They do. Who is in the best position to get it? You do. You do. Go get it.
    Mr. QUINN. I see.
    Mr. LAVERE. And then if you have within the adjudication process a difference between what the VA says and what the veteran says concerning the adequacy of the record, that should not just be left hanging. That should be addressed in the decision issued by the VA.
    Mr. QUINN. Sure.
    Mr. LAVERE. This evidence as not obtained because it was not on point. It was not relevant or it was unobtainable or it was the veteran's obligation to get it, and then you would have the duty to assist issue focused within the adjudication system and the issue narrowed on appeal.
    Mr. QUINN. Which is what a real adjudicator should be doing anyway.
    Mr. LAVERE. Right, and the other aspect is that there already is a requirement, I believe, that veterans, when their claims are being denied, be informed as to where they have fallen short in terms of the evidence.
    Mr. QUINN. Are you concerned that that will result in more repeat claims?
    Mr. LAVERE. Oh, no.
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    Mr. QUINN. Okay.
    Mr. LAVERE. No, I think that that will take care of things at the beginning.
    Mr. QUINN. I agree.
    Mr. LAVERE. And they should not tell them only after they have issued the decision. They should tell them while the development process is underway.
    Mr. QUINN. Sure. Thank you very much.
    And in response to a question Mr. Mascara had earlier, as you know, Mr. Chairman, our Benefits Subcommittee has heard testimony and had a lengthy discussion with Ms. Moffitt last week about training, and we have invited the staff and members and the VSOs to participate in some of that training that will be going on. You are not able to answer, I know, because you are not part of the VA, but Mr. Mascara will get some information to you there where we can be helpful.
    Thank you for your frank response. I appreciate it.
    The CHAIRMAN. Mr. Bachus. Mr. Bachus.
    You do not have to.
    Mr. BACHUS. Oh, no. I did not hear you.
    The first question, the report to Congress appears to have 12 chapters, but the last three, there is nothing back here. Why is that?
    Mr. KEHRER. In that Extract, Mr. Bachus, the Commission apologizes. In the representation of the findings, sir, the very last chapter of the Commission's main volume, was inadvertently left off, the last chapter alone.
    Mr. BACHUS. How about the alternate views of commissioners, which is Chapter 11?
    Mr. KEHRER. Those were not intended, sir; the alternate views were not intended by the Commission to be in the Extract. The Extract was designed to summarize the substantive findings and recommendations.
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    Mr. BACHUS. You know, it just had it in the front here.
    Mr. KEHRER. Yes, sir. The Commission apologizes for that oversight.
    Mr. BACHUS. The Commission recommended that Congress define certain terms. How would this help? I mean, I agree with you that it would, but ''burden of proof,'' ''well grounded,'' and ''duty to assist''—there is no policy definition of that, nothing legal?
    Mr. LAVERE. I will be as brief about this as I can, but these issues constantly arise especially before Court of Veterans Appeals, and they are decided on a case-by-case basis, that in this particular case duty to assist was not afforded because the VA should have made more efforts to do this, that or the other thing.
    There is a whole theory of the well grounded claim, and I think as we explain in the report, but if you would take a look at just the bare language of the statute, it would be describing anything but a paternalistic system. The veteran is responsible for submitting a well grounded claim.
    Well, I would ask various adjudicators and people within different offices in the VA what is a well grounded claim in practices, and I got answers all over the lot. The most expansive was that an allegation that is not inherently incredible is sufficient to support a well grounded claim.
    Now, that may be, but all the Commission is saying is that if that is what Congress intends, they should so articulate that so there would be one basic definition that could be applied across the board and make things easier rather than reinventing the wheel with each case and trying to get the pertinent court decisions and the pertinent this and pertinent that.
    In Appendix 1, we give the examples of what an adjudicator at least theoretically would have to go through in virtually every case to determine if he was properly affording duty to assist. If we could have a consistent, simply stated rule, that would obviate.
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    And I might add that, you know, with the partnership agreement that we are talking about and the BPR, I think that most of these things will just take care of themselves within the ordinary cooperative process that would be going on.
    Mr. BACHUS. Has the Secretary attempted to give any direction in defining these terms?
    Mr. LAVERE. No. The direction is coming from the Court of Veterans Appeals.
    Mr. BACHUS. Okay.
    The CHAIRMAN. Thank you, Mr. Bachus.
    Dr. Cooksey.
    Dr. COOKSEY. Yes. Thank you, Mr. Chairman.
    Mr. Hutchinson and I would like to know what BPR is.
    Mr. LAVERE. Business process reengineering.
    Dr. COOKSEY. That sounds like a reengineered term. Thank you. (Laughter.)
    The CHAIRMAN. Are there other questions?
    Mr. Hutchinson. Excuse me.


    Mr. HUTCHINSON. Thank you, Mr. Chairman.
    I wanted to go back to one recommendation that the Commission made and which the Chairman made reference to in his opening remarks. That is the problem of repeat claims and then also the Chairman's indication that there might be some legislation that would address the lump sum payment for smaller disability claims.
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    I commend the Chairman for examining that. I think that is something that very much should be looked at, and I wanted to look at that from the standpoint that in Arkansas, the state that I am from, we have a worker's compensation system in which, you know, a claimant could voluntarily select a lump sum payment, and whenever he or she does that, then that claimant must waive any further claims in the future. They are forever barred. They are on their own. That is a final payment that they accept, and they acknowledge that they accept those risks.
    What is your thought in regard to that? If there is a lump some payment for a smaller percent disability case, say, less than 20 percent, would you recommend that the claimant be barred from ever reopening that claim?
    Mr. LAVERE. I would not make any recommendation on that, and the Commission has not made any kind of recommendation on that.
    Mr. HUTCHINSON. What is your suggestion for dealing with the problem of repeat claims?
    Mr. LAVERE. Well, let me begin by saying that repeat claims are not a problem per se. They are what exists. Three out of four claims that the VA adjudicates are claimants who are coming back, and they are perfectly entitled to come back.
    Mr. HUTCHINSON. I think there is a little problem there. I know that they have the right of the statute.
    Mr. LAVERE. Right, but there has to be some method of closure, and from very early on in our work, Mr. Merritt, the representative from the insurance industry, said there is no closure. The cases keep on going on and on and on, and what can we do about it?
    Here is what the insurance industry does about it.
    Mr. HUTCHINSON. Do you have a recommendation? Does the Commission recommend what to do about that problem?
    Mr. LAVERE. No. We do not think it was within our scope to make a recommendation, a specific recommendation on that.
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    Mr. HUTCHINSON. All right, but do you believe that it is a significant problem that should be addressed? The problem of repeat claims and the lack of finality?
    Mr. LAVERE. Yes, I do.
    Mr. HUTCHINSON. Do you have an opinion? I think you indicated you do not have an opinion about the proposal for a lump sum for smaller disability claimants.
    Mr. LAVERE. Well, I think it has merit.
    Mr. HUTCHINSON. I think that there was one statistic that 76 percent of the claims that are repeat claims already have a disability rating.
    Mr. LAVERE. Right. It is, I think, 67 percent are in benefit status. In other words, they have a rating of 10 percent or more.
    Mr. HUTCHINSON. You know, before coming to Congress, I was licensed to practice and still am, I guess, before the Court of Veterans Appeals. I have represented veterans. I have seen their heartache when they file a claim, it is processed, they go up as far as they can, it is rejected, they come back, they go to a veterans service officer and are told ''The only thing you can do is to file another claim.''
    So they file another claim because they have hope. They go through this process year after year after year after year, everyone always saying, ''File another claim,'' and I think that if it is a bad claim, they need to be told that.
    If they have a 10 percent disability and they want to increase that, if they had a lump sum option, that gives them an option and provides some finality. Does what I say make sense to you?
    Mr. LAVERE. Yes. If I can put it colloquially, what we try to do is set the table for the policy making and decisionmaking that has to be done by Congress and the VA, and so we wanted to provide as much data and analyses that would set these issues up to be debated, to be considered, to test how good they could be, what impact they would have on the system, and what drawbacks would they have for the system.
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    Mr. HUTCHINSON. There were some comments earlier that different statistics have been aired as to how long it takes for an adjudication officer to process a disability claim. Did your commission find exactly what the statistic is on that?
    Mr. LAVERE. Yes. We have the latest statistics in the report.
    Mr. HUTCHINSON. Do you know what it is?
    Mr. LAVERE. For the regional office?
    Mr. HUTCHINSON. Yes.
    Mr. LAVERE. What is it?
    Mr. KEHRER. At this time, 134 days, I believe.
    Mr. HUTCHINSON. One hundred thirty-four days, and then it goes up to the Board of Veterans' Appeals?
    Mr. KEHRER. Yes, sir, if the veteran elects to appeal, yes.
    Mr. HUTCHINSON. And how long is the average time before the Board of Veterans' Appeals before a decision is made?
    Mr. KEHRER. At the time of the publishing of the Commission's report, I believe the elapsed time was 650 to 700 days because of the backlog.
    Mr. HUTCHINSON. That is almost 2 years before the Board of Veterans' Appeals.
    Mr. KEHRER. Yes, sir.
    Mr. HUTCHINSON. And then you go to the Court of Veterans Appeals. What is the average time between the Board of Veterans' Appeals to the Court?
    Mr. KEHRER. That I do not know. I do not believe the Commission spoke to that. It is a fairly substantial amount of time, however, I believe.
    Mr. HUTCHINSON. Thank you very much.
    Thank you, Mr. Chairman.
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    The CHAIRMAN. Thank you, sir.
    Mr. Mascara.
    Mr. MASCARA. On page 10 of your statement in Paragraph 2, you indicate that there is a $50,000 cost, a minimum cost, associated with adjudicating a very easy claim. Could you explain that?
    Mr. LAVERE. That is the lifetime benefit that is involved. That is the lifetime benefit.
    Mr. MASCARA. Okay. Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, sir.
    We are at the end of our first panel. Do you have any questions?
    Mr. MORAN. I have no questions, Mr. Chairman.
    The CHAIRMAN. Any other discussion? (No response.)
    The CHAIRMAN. Gentlemen, thank you.
    We do have a vote right now. In fact, we have two votes, and it will be necessary for us to recess for at least 25 minutes. We will be back just as rapidly as possible.
    Mr. LAVERE. Are you through with my testimony?
    The CHAIRMAN. Yes, sir. Thank you very much.
    The CHAIRMAN. I apologize for the delay. The voting machine broke down, and I do not know whether anybody is coming back, but there is nobody here to object. We are supposed to have two people, I think, but as long as they are not here, we are going to go unless I hear somebody out there object.
    Panel number two: Dr. Lemons, if you care to introduce the people accompanying you, please feel free to do so, and your entire statement will be made a part of the record. If you can summarize, we would appreciate it, sir.
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    Dr. LEMONS. Thank you, Mr. Chairman.
    I am pleased to be here this afternoon to present the Secretary's position on the recommendations and findings of the Veterans' Claims Adjudication Commission.
    I am accompanied by Mr. Dennis Duffy, the Assistant Secretary for Policy and Planning; Ms. Kristine Moffitt, the Director of the Compensation and Pension Service; and Mr. Roger Bauer, the Acting Chairman of the Board of Veterans' Appeals.
    Before I begin my comments, let me convey the Deputy Secretary's regrets. Mr. Gober was personally looking forward to providing this testimony for you, but the last minute change in time of the hearing created a conflict for him with a prior commitment of long standing.
    I would like to offer my brief comments. I want to recognize the massive and complex task undertaken by the Veterans' Claims Adjudication Commission, and especially the efforts of Mr. Sedrick Melidosian, the chairman. We view their report as a genuinely helpful effort to assist us in improving services to veterans and their dependents.
    Mr. Chairman, you have before you a document which embodies the Department's review and analysis in response to the commissioners' work. As you can see, it is an extensive report and one which we are hopeful would be very useful to the entire committee.
    The CHAIRMAN. Thank you, sir.
    Dr. LEMONS. Our effort in this regard was to provide a detailed analysis on the part of our top managers and truly take a one-VA approach to this effort.
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    Four ''cross-cutting'' work groups comprised of top managers were formed to address groupings of the recommendations. Each group was chaired by an individual from an organization not having a principal interest in the work of the group's issues or not having a parochial interest in the issues that were developed.
    The SMG's efforts are represented by the work group reports, which assess the pros and cons of each Commission recommendation and suggest a Departmental position.
    The Secretary, I am pleased to say, by and large agreed with the analysis and recommendations of the SMG work group. He did take exception in a few cases where he felt that the recommended approach might diminish a veteran's well-earned rights.
    His exceptions he personally detailed in a Decision Paper provided at the beginning of the report.
    As you know, the Commission made quite a few recommendations or suggestions, 54 on our account; VA agreed with the Commission or is further studying 40 of the recommendations. The 14 on which we part company generally were opposed because they were found to be potentially adverse in their effect on veterans or because the VA's review found them to be unneeded or unnecessary.
    Among those on which VA's position is in disagreement with the Commission are those suggesting a need for Congressional action to clarify the purpose of the compensation in the pension programs, the recommendation that the Board of Veterans' Appeals be made strictly an appellate review body, and those that would close the evidentiary record early in the appellate stage or institute a shortened time limit for filing appeals.
    VA will benefit from the implementation of the many recommendations with which we are in agreement with the Commission. We are already actively engaged in efforts to review our various benefit programs to assure that their goals and outcomes complement each other. We will undertake the time and resource intensive effort to move the VA's adjudication rules and procedures from manuals into regulations and will further examine ways to simplify administration of our pension program and will work hard to improve our partnership with veterans' service organizations and claimants.
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    All of the 40 recommendations that we concurred in will be implemented. I can assure you that we have already begun in the effort to assure that this report does not become just another report collecting dust on someone's bookshelf.
    The Assistant Secretary for Policy and Planning has been charged by the Secretary with responsibility for overseeing the development of detailed implementation plans for each approved action and for monitoring their accomplishment. The Deputy Secretary will personally be involved and be provided with frequent status reports.
    We are just in the earliest stages of developing the departmental implementation plan, but we hope to have a final plan approved for the Deputy Secretary by the end of June. We will be most happy to share that plan with the committee when it is done.
    I am pleased with the testimony of Mr. LaVere and the endorsement of our efforts in regards to business process reengineering and our efforts within VBA to improve the process.
    I want to thank you for the opportunity to provide these comments. Mr. Duffy, Mr. Bauer, and Ms. Moffitt and I will be happy to respond to any questions that you or the committee may have.

    [The prepared statement of Department of Veterans Affairs appears on p. 43.]

    The CHAIRMAN. Thank you.
    We are encouraged by the Department's overall response to the Commission's report, and I do apologize again for keeping you.
    Mr. Mascara.
    Mr. MASCARA. I made it back.
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    The CHAIRMAN. Thank you for coming back.
    Mr. MASCARA. The Commission found that localized or situational measures alone cannot be expected to solve systemic problems. What steps or step is the VA taking today to improve the quality and consistency of adjudicating claims by different regional offices?
    Dr. LEMONS. I appreciate your perspective on that, and I would tell you that we also are of the belief that a systematic, organization-wide approach to process improvement is exactly what we need.
    We want to encourage the continuation of best practices and innovative approaches at the regional office level, but we would also agree that an overall systematic approach is what is needed. We have attempted to develop this business process reengineering specifically to deal with the direction and change in the nature of relationships with the department and the veterans and the veterans' representatives as a key element of that type of approach.
    Mr. MASCARA. I posed to the earlier panel the question of why Phoenix did a much better job than Philadelphia in handling the Gulf War Syndrome claims, and can we learn something from Phoenix that perhaps we can standardize throughout the VA and the regional offices or area offices?
    Dr. LEMONS. I would ask Ms. Moffitt to discuss the specifics about that issue, but also the broader issue about standardization of practices.
    Ms. MOFFITT. Yes, Mr. Mascara. As I mentioned the other day in our previous hearing, we have never looked at the grant rates. You know, you look at Phoenix as the best decision makers with regard to Persian Gulf claims. We have not looked at the grant rates.
    We are now undertaking a 100-case review to determine in grants what are the right decisions to be made, and to go one step further, we are substantively looking at overhauling the whole entire quality review system that we have. We are undertaking that in conjunction with being ready for GPRA standards as of the end of September, October 1st of 1997, to look at both quality at the national level, the local level, and where accountability should be assigned.
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    Mr. MASCARA. Would you admit then that perhaps the director at Philadelphia or the director at Phoenix maybe had a better mindset in working with the adjudicators? Is that part of the reason for the better performance?
    Ms. MOFFITT. As I offered you the other day, when we have done this 100-case review that will include grants, as well as, denials, I will be happy to furnish you with some sort of an analysis of the differences.
    Mr. MASCARA. Thanks, Ms. Moffitt.
    The CHAIRMAN. Doctor, we do have some questions by staff, but in the interest of time, if you would submit them for the record, we will furnish the questions to you for reply as quickly as possible.
    Dr. LEMONS. I would be happy to, Mr. Chairman.
    The CHAIRMAN. I appreciate it.
    And with that, I guess there are no more questions and we will not keep you any longer. Thank you very much to you and your panel for appearing.
    Dr. LEMONS. Thank you.
    The CHAIRMAN. Our next panel will be Mr. Milton Socolar, the Chairman of the National Academy of Public Administration. If you would care to come up, sir, with your people, we will move along.
    While you are getting ready, sir, your statement will be included in its entirety in the record. If you care to introduce those accompanying you, please do, and proceed in any way you see fit.

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    Mr. SOCOLAR. Thank you very much, Mr. Chairman.
    On my right is John Scully, who is the Project Director for the work of the academy panel, and on my left is Mike McLendon, who did the work for the panel in relation to the BPR Program and information technology.
    I am pleased to present my views regarding the Department of Veterans Affairs' response to recommendations of the Veterans' Claims Adjudication Commission made in its 1996 report to the Congress. Because the panel has not yet fully reviewed the draft findings and recommendations developed by the staff, I am addressing you today in my individual capacity as chair, and not on behalf of the academy panel members.
    The Commission report covered a wide-ranging examination of VBA compensation and pension program and made a number of specific recommendations for improving claims processing procedures. Let me say at the outset that I think the department did a good job of analyzing and responding meaningfully to all of the Commission recommendations.
    The Secretary and his strategic management group of top leaders concurred with most of the recommendations made. However, notwithstanding this high degree of concurrence, I have some concerns.
    First, let me address those recommendations with which the department did not concur. The department did not concur in the need for Congress to review the purpose of the compensation program. The department maintains that there is a consensus among Congress, the VA, and the veterans' community that the schedule as structured serves as an equitable basis for determining compensation for America's disabled veterans.
    Actually the academy panel concentrated on ways to improve management of the program as it is now legislatively constituted and did not explore this and other controversial policy issues that could have diverted its attention from improving administration.
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    Nevertheless, being aware that the rationale for determining benefits under the compensation program is the replacement on average of lost income and being aware of changed conditions in the job market and of advances made in medical technology, I have to say, speaking for myself, that I agree with the Commission recommendation. I strongly suspect, particularly in the case of many disabilities rated at the ten, 20, and 30 percent levels, that the correlation between compensation awarded and average income lost by reason of disability is tenuous at best.
    It is, therefore, appropriate in my view that notwithstanding long acceptance of the rating schedule as now applied, Congress should examine the fundamental rationale under which the compensation program is administered.
    The department, while recognizing that keeping the Congress informed is an essential responsibility that it has, did not concur with the Commission's recommendation that the GAO periodically review progress on implementation of the requirements for handling the computer year 2000 problem. Irrespective of the department's intentions to keep the committee fully advised, I think that the program risks are so great that it would be beneficial to have a periodic independent review and report to the Congress, and to the department as well, to help assure success of that effort. I am sure that the VA manager of information technology modernization would find such reviews and reports helpful.
    There are a number of other recommendations that the Commission made that the department does not concur in. Most of them relate to recommendations to explore data and provide analysis for a range of issues that the Veterans Benefits Administration should have been considering in its ongoing operations.
    The concern that the department raises is that reviewing and considering these kinds of issues have the potential for adverse effect on the veterans. The strategic management group, in assessing the Commission recommendations, often recognized the need for additional information and analysis and the need for developing better overall information and analysis capabilities.
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    One can scan the summary charts of the group's conclusions to note a high degree of concurrence with recommendations relating to the collection and analysis of data not previously considered by VA, but relevant to efficient program administration. In particular, the group agreed with the Commission's strong and explicit recommendations about the need to develop a capacity to conduct actuarial analysis. The group also agreed with the desirability of VBA involvement with other federal and state government agencies and with private insurers and medical associations that deal in disability determinations.
    Finally, the strategic management group recognized the merit of establishing a group at the department with high level VBA and VHA representation to develop and disseminate best rating examination practices.
    I think it is well accepted by many within, as well as outside of VA, that the department and VBA have been administering the compensation and pension program with a narrow, insular perspective. VBA has tended to address issues as they arise very much on an ad hoc basis and has not yet succeeded in realizing the more important of its articulated initiatives for improving service.
    Given the history of troubles that VBA has had in administering the compensation and pension program, it is important to appreciate that it will take considerably more than its recognition of the things needing to be done for VBA to achieve the desired improvement in its service to veterans.
    Recently VBA launched a new business process reengineering plan to dramatically improve the timeliness and the quality of its adjudication decisions by the year 2002, while achieving significant reductions in staff resources. Its plan has received positive reaction from Congress and veterans' service organizations, and the academy panel also believes that if implemented successfully BPR will have significant benefits.
    I am concerned, however, that the management deficiencies that have caused VBA's past inability to implement sustained performance improvements will continue to exist. These not only impair VBA's ability to remedy immediate problems in its BPR plan, but threaten the long-term success of the BPR service improvement goals. These same deficiencies threaten VBA's ability to implement vitally important efforts to meet its year 2000 computer requirements and improve the management of its computer modernization efforts.
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    The academy panel will provide detailed recommendations on developing the planning and management capacities necessary to overcome these deficiencies. VBA at present lacks the management capacities that would enable its leaders to define long-term direction and provide the resources to follow through. VBA leadership must establish these capacities—the capacity to plan, to integrate and execute complex program activities, information gathering and evaluation capacities to measure performance and hold responsible officials accountable for results, and the capacity to maintain an annual plan, implement, and review cycle to integrate all parts of the organization into a comprehensive operational effort to fulfill VBA goals.
    Despite progress since 1996, the potential for a cohesive, well functioning leadership team is uncertain. The VBA's strategic management committee is a step in the right direction, but up to now it lacks clear purpose, a long-term agenda for change, ability to integrate and oversee complex activities, and a clear vision of what strategic management means.
    Recent efforts to implement the Government Performance and Results Act are laudable, but insufficient. There are major gaps and short circuits to lines of accountability within the leadership team, a bias against developing a systematic corporate information capacity and a reactive decision averse culture in which senior executives are reluctant to take meaningful action against a failing member.
    VBA today is a closed organization that historically has avoided making full use of information for planning purposes from outside stakeholders, and this must change.
    Despite a few dissents, I think it is promising to see how receptive VA has been to the Veterans' Claims Adjudication Commission recommendations. A high degree of receptivity, together with other indications, such as recent establishment of the department's strategic management group and VBA's strategic management committee, suggest an awakening by VBA to the urgent need for management direction, control and discipline. I am sure that requirements of the Government Performance and Results Act have also served to move VA to a better understanding of its management deficiencies.
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    That completes the essence of my prepared statement. I and my colleagues will try to answer any questions that you or the other members of the committee might have.

    [The prepared statement of Mr. Socolar appears on p. 48.]

    The CHAIRMAN. Thank you, sir.
    Let me ask you just one very brief question, please. Can you tell me in your opinion what will be the single most important recommendation of your forthcoming report?
    Mr. SOCOLAR. Yes. I think that the single most important recommendation will be the need for VBA to develop a structure and the capacities to manage strategically, that is, to manage with discipline. VBA must learn to provide plans based on good analysis and that cover all the resources and efforts that need to be integrated. VBA has to develop the ability to review plan implementation against specific milestones to see what is happening, make revisions as necessary, and hold responsible officials accountable.
    Today I think it is fair to state that the VBA essentially administers the compensation and pension program without the kind of forward planning and analysis that good management calls for. If the VBA would develop this necessary capacities, a lot of the specific difficulties that it now has would eventually, with proper analysis and informed action, be overcome. Without that kind of discipline, I think we will see the same kinds of difficulties occurring over and over again.
    The CHAIRMAN. Thank you, sir.
    The gentleman from Pennsylvania, Mr. Mascara.
    Mr. MASCARA. At the present time, the Director of Compensation and Pension Programs does not have line authority over the regional offices, which makes the decisions concerning compensation and pension. In your opinion, is this a management deficiency which contributes to the lack of consistency in claims adjudication?
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    Mr. SOCOLAR. Well, I do not think that it is necessary that the C&P service should have line authority over regional offices. The C&P service should review field operations to develop an understanding of what is occurring in the various regional offices, understanding how one regional office operates as opposed to another regional office; do the analysis that would keep the Under Secretary informed as to the kinds of actions that he or she needs to take to keep the organization functioning smoothly.
    Fundamentally, C&P service should operate as a staff office to the Under Secretary and have his respect and—I cannot think of the word I am looking for—his confidence in the analysis and work that it does.
    But, no, I do not think it is a management deficiency that it does not have line authority.
    Mr. MASCARA. On page 2 of your statement, Paragraph 2, while you indicate that the Congress needs to continue to be informed and the VA has the responsibility to fulfill that, you disagree with the Commission's recommendation to have the General Accounting Office periodically conduct a review.
    Why? Why do you think the GAO should not?
    Mr. SOCOLAR. No, no. I am saying the contrary.
    Mr. MASCARA. It says, ''The department disagrees with the Commission.'' Okay. All right.
    Mr. SOCOLAR. No, I think it is good to have an independent review. I think it would be helpful to VBA, and I also think that self-reporting has certain problems associated with it. It often does not really dig into the kinds of problems that do need attention, even the best of intentions, and I think an independent review is helpful to overcome that.
    Mr. MASCARA. Why do you think the VA disagrees then?
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    Mr. SOCOLAR. Well, I think the VA is saying that it recognizes that it has the responsibility to keep the committee informed, and it certainly does. I cannot go any further than that.
    Mr. MASCARA. You think it has to be the VA though.
    Okay. Thank you.
    The CHAIRMAN. Mr. Socolar, thank you very much for you and your panel taking the time to be with us, and I think perhaps we do have a couple of questions we would submit to you for the record if you would answer them, please.
    Mr. SOCOLAR. We appreciate it.
    The CHAIRMAN. Thank you very much.
    Our next panel will be representatives from the veterans' service organizations: Mr. Crandell from AMVETS; Ms. Carol Rutherford from the American Legion; John McNeill from the Veterans of Foreign Wars; Rick Schultz, Vietnam Veterans of America; and Rick Surratt from the Disabled American Veterans. If you would come forward, please.
    We thank you for being here today, and we apologize for keeping you, and as you know, all of your statements will be printed in their entirety in the record. I am going to let you decide who wants to go first out there, the lady or whomever else. Just proceed as you wish. If you would try to summarize, we can get out of here maybe before we have to go vote again.
    Ms. RUTHERFORD. Okay, sir. Thank you.
    The CHAIRMAN. We do not want to cut you off, but thank you.


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    Ms. RUTHERFORD. Well, the American Legion does appreciate this opportunity to comment.
    The CHAIRMAN. If you would pull the microphone over just a little bit, please. It is hard to hear in the back of the room.
    Ms. RUTHERFORD. I think that is about it.
    The CHAIRMAN. All right.
    Ms. RUTHERFORD. I will sit like this.
    Okay. As I said, we do appreciate this opportunity to comment on this report.
    The Commission's final report we find is very wide ranging and extensively detailed, and we wish to compliment the Commission for its substantial efforts.
    Now, many of the VCAC findings and recommendations we do agree with. However, there are those with which we disagree, and included in this are the issues of lump sum payments, restriction of repeat claims and appeals, and examination of the VA's duty to assist.
    We note that much of the Commission's analysis proceeds on the assumption that the current backlogs in the regional offices in the Board of Veterans' Appeals are the unavoidable outcome of strategic management failures and the long-term transition to judicial review.
    In our opinion, the real underlying causes of VA's work load problems are the lack of quality decisionmaking, the lack of accountability by regional offices, and the unreliability of the current work load reporting and performance measurement system.
    The Commission's conclusion is that short of radical procedural and legal changes, further efforts by VA and Congress to reengineer the claims process are not going to be successful. Our primary concern is that many of the Commission's recommended cures to the current system are intended to benefit the bureaucracy by placing priority on efficiency and process rather than quality service to veterans.
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    These cures would take away our veterans' historical rights and benefits to resolve VA's fundamental management and budgetary problems. We feel this would be grossly unfair.
    Thank you.

    [The prepared statement of Ms. Rutherford appears at p. 53.]

    The CHAIRMAN. Thank you.
    Mr. MCNEILL. I will go next.
    The CHAIRMAN. Don't be bashful. Mr. McNeill.


    Mr. MCNEILL. Thank you, Mr. Chairman.
    Our keystone in evaluating and critiquing the Commission's report was simple. Will the recommendation lead to improvements in claims processing timeliness and quality?
    There are many solid recommendations in the report. In the written testimony, we make four points about it.
    First, the ones concerning VA strategic planning and medical examination issues are particularly important. We support strongly VBA's business process reengineering plan for the Compensation and Pension Service both as the primary means now to improve claims processing quality and, secondarily, to implement the Commission's recommendations on strategic planning.
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    On medical examination and medical evidence issues, we feel the one most important action the VA could presently make is to universally embrace and expand the Chicago regional office's initiative that ''out-bases'' adjudication and rating specialists in the West Side VA Medical Center to all of the VA medical centers that perform a large number of compensation examinations.
    Second, we believe that the good parts of the Commission's report are regrettably overwhelmed by the negative aspects. These occur mainly in Section V, the section on Process Design.
    For instance, we disagree that Congress and the Secretary of Veterans Affairs have been deficient in their policy making responsibilities. This point is rebutted just alone by the Veterans' Judicial Review Act of 1988. In our opinion, both Congress and the Secretary have been very thorough over the years in exercising their policy making responsibilities.
    However, even more disturbing to us is the assault on long-established principles of veterans' entitlements under the mistaken assumption that diluting certain important and benevolent principles will enhance claims processing efficiency. Concepts such as, quote, duty to inform, unquote, and finality will do nothing to improve claims processing timeliness and quality. Indeed, they will only serve as a disservice to veterans.
    Third, we feel it unneeded to further debate such radical and dangerous concepts as duty to inform, finality, closure, and elimination of de novo review at the Board of Veterans' Appeals.
    Our problem also with lump sum payments is that we believe that concept will in the long run actually add time to the adjudication of claims. The best answer to these concepts is basically coming from the rapid improvements the VA is presently making in processing veterans' claims.
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    We also cite in our written testimony figures that further support our argument that the VA is now capable of rendering quality, timely decisions even while complying with their present duty to assist and burden of proof responsibilities.
    It is our belief that there is no better time ever in the history of veterans' claims processing than the present for a veteran to receive a fair and just decision on his claim. Indeed, if BPR proves successful, the VA soon might be the epitome of government service to the people, and we believe Congress has played a significant role in that.
    Fourth and last, we support Secretary Brown's April 1997 decision paper as the best and correct way to implement the Commission's recommendations.
    At the end of our written testimony we make a plea for the Congress in the future to rely less on outside consultant studies and instead rely more on the excellent oversight of the type provided by Congressman Everett and his subcommittee in the last few years. There is more elaboration on this request of ours in the written testimony.
    Thank you, Mr. Chairman.

    [The prepared statement of Mr. McNeill appears on p. 61.]

    The CHAIRMAN. Thank you. Mr. Schultz.


    Mr. SCHULTZ. Thank you, Mr. Chairman.
    I will be brief. I know you are pressed for time, but I would like to say on behalf of the Vietnam Veterans of America, we do appreciate the opportunity to appear here today, and we do, as others, wish to compliment the Commission on putting together the report.
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    However, we, like the other organizations, do have some problems with some of their recommendations.
    Some of the things we have covered in our statement, and I will just briefly go over them, and then I would like to talk a little bit about some of the comments that were made here today.
    One is we believe the VA should get it right the first time. In fact, I think it goes without saying that getting it right the first time will go a long way towards relieving the backlog problem. We do not believe there should be a delimiting period for filing claims, and there should be no additional limits on finality of decisions for repeat claims. We are not in support of paying benefits in a lump sum, and the board should continue to provide final agency decisions. We believe that many of the changes recommended by the Commission would not be in the best interest of veterans.
    And of course, we have noted in our statement that we believe that veterans should be allowed to retain private attorneys at least after there has been a first final decision by the Department of Veterans Affairs.
    I would like to note also that Mr. LaVere in his comments did indicate that the BPR plan is the way to go. We certainly support that. We believe that the VA has done some good work there, and if implemented, it will really go a long way in solving some of these problems.
    I also note that the person from NAPA had indicated, too, that they are pleased the VA recognizes the problems. The question now is how do they solve them, and we certainly agree with NAPA on that issue.
    When Mr. LaVere talked about well grounded claims, that VA is all over the ball park and there is really no standard, well, there is a standard, and that has been defined by the court. So we believe that there are some standard in place, and I do believe if the VA is all over the ball park then that is an internal problem and not a legislative issue.
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    Also, as far as repeat claims, when they say there should be some method of closure, well, certainly there is, and claims are final unless someone can come up with new and material evidence, and we do not believe some of these, which we believe would be sort of Draconian solutions, are the way to go.
    And we certainly do appreciate your efforts, Mr. Stump. I note in your opening statement that obviously you are frustrated with the current VA system, and you would like to make sure that veterans receive compensation payments in a timely fashion. I assure you that VVA will work with you on those issues, and that is certainly what we want, too.
    Thank you.

    [The prepared statement of Mr. Schultz appears on p. 66.]

    The CHAIRMAN. Thank you. Mr. Crandell.


    Mr. CRANDELL. Mr. Chairman, AMVETS also appreciates this opportunity, and I personally am glad to be back in this chamber.
    We also have some problems with the report of the Adjudication Commission, and I think I can sum it up actually by talking about my own case just for a minute.
    When I was 24 I received a wound in the foot, a minor wound. By the time I left the service I was not limping anymore, in fact, had gone back to combat duty. I had no sense of having a disability whatsoever.
    Occasionally I had a slight pain. It was a little like a headache. It went away if I took aspirin. For a lot of years it did not get worse than that, and then gradually it was more frequent.
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    Ten years ago I was advised: file a claim. You are going to get arthritis. Good advice. I did not take it. I was busy.
    At the age of 54, last fall, I put in a claim for it because I am finally starting to have enough difficulty with it that it is a real bother. There are certain jobs that would require me to be on my feet a lot that really I could not do.
    I had great difficulty at that point because it was not until then I discovered that the records of that hospital never made it into my file. So I have had to track that down.
    Probably in a decade or so I will need to walk with a cane some of the time. If you had given me a lump sum when I got out at 25, it would not have been $5. It would not have done anything to recognize the slowness of the development of this kind of a problem.
    What does not fit the actuarial tables that strike the Commission members as so odd is that we are talking largely about war wounds. We are talking about injuries largely to young people who have those injuries develop over a very long time. It is not like the kinds of injuries that any other agency deals with, and for that reason lump sums do not work. Time limits do not work, and we really do need the Board of Veterans' Appeals to be able to make a final decision where there has been a mistake.
    Thank you very much.

    [The prepared statement of Mr. Crandell appears on p. 76.]

    The CHAIRMAN. Thank you, sir. Mr. Surratt.

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    Mr. SURRATT. Mr. Chairman, members of the committee, good afternoon.
    I am Rick Surratt with the Disabled American Veterans.
    The effects of judicial review are a major factor in the Commission's report, and I will address that here.
    Before Congress authorized judicial review, veterans were frustrated with VA decisionmaking. Although Congress expressed confidence in the administrative system, it also thought that judicial review would benefit veterans and assure justice.
    The DAV and many in the veterans' community also believed that the architecture of the system was sound, but we knew from years of experience that VA too often failed to follow the law or its own procedures. VA officials boasted about the liberality of its rules, but its adjudicators often ignored them in practice.
    I recall a time at one of our national conventions when the Chief Benefits Director had addressed our group and was responding to a pointed question from the floor about some practice from the VA at that time. The Chief Benefits Director felt compelled to add to her answer that VA always resolves reasonable doubt in favor of the veteran.
    Spontaneous laughter erupted from the two or 300 people in attendance at that seminar. They laughed, not because the statement was humorous in and of itself, but because that overworked line was so far from the truth it just naturally evoked laughter.
    The problem was not the law or procedures, but VA's failure to adhere to them, VA adjudicators and the Board of Veterans' Appeals conveniently ignored some of the rules beneficial to veterans and followed other unwritten rules that departed from the law.
    These irregularities were obviously not what Congress was applauding when it commended the VA claims process in its deliberations on the Veterans' Judicial Review Act. Congress was complimenting the system as it was designed to operate, not these practices.
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    This committee's own report on the Judicial Review Act included a full description of the claims and appellate processes. That description discussed in very positive terms the assistance VA gives to veterans and the ability of veterans to reopen their claims.
    The committee stated its intent that these and the other beneficial qualities of the existing system be maintained, and that no changes be made to the system unless they would enhance accuracy or fairness. The committee was stating that judicial review should in no way formalize or change the administrative claims process.
    Quite frankly, when the court began reviewing VA's decisions, it found plenty wrong with them. For the first time veterans had a way to enforce those longstanding beneficial provisions in VA law and regulations that VA had often not felt compelled to follow.
    The degree of the court's impact on VA was a measure of how far out of line VA's decisionmaking was at that time. The court did not cause VA's problems, however. It merely exposed them. When the court began enforcing veterans's rights, the veterans' community began to fear that the impact of the court's decisions would become an excuse to lessen veterans' rights to allow VA to maintain the status quo.
    When the Commission first began reviewing the situation, VA was still in a stage of denial and blamed the court for its problems. Perhaps this is partly responsible for some of the Commission's recommendations that would do exactly what we feared: paint the court as activist and intrusive into VA's proceedings and recommend lessening of veterans' rights to return the system to some sanity.
    Since the Commission first began to form its views, the mindset in VA's leadership has changed markedly, however. The VA no longer attempts to blame the court for all of its problems. VA now acknowledges that, in large part, claims backlogs and resulting long delays for veterans are the results of poor quality.
    VA is no longer passively resisting the realities of judicial review. It has a big job because from our perceptions regional office adjudicators have yet to awaken to the new reality and still hold to some of their old attitudes.
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    Nonetheless, VA has now embarked on the right course through its business process reengineering plan, and all early indications are that the current leadership in VBA is serious about making real improvements.
    Unfortunately, the Commission would have us do little to actually improve the system. The Commission would reduce VA's work load to accommodate its current level of inefficiency. Even worse, the Commission would accomplish this by reducing veterans' rights and eligibility through such things as time limits for filing claims, lump sum settlements, restrictions on appeals, and limits on appellate review.
    The sad irony of all of this would be that because the court is doing exactly what it was created to do, and because veterans finally have the means to enforce their rights, veterans will, as a result, lose those very rights they sought to enforce. This is why DAV so strongly urges you to reject in no uncertain terms the Commission's recommendations.
    Mr. Chairman, that concludes my statement, and I would be happy to answer any questions you may have.

    [The prepared statement of Mr. Surratt appears on p. 79.]

    The CHAIRMAN. Thank you, and I thank all of you for taking the time to be here. I want you to know that we appreciate what you have done for the members of your organizations, and we also appreciate the fact that you have been very willing to work with us in the past on eligibility reform. We have got some problems ahead of us coming up with the money—the shortfall in the way they are financing us this time on health care—making us go out and collect it. We may not be able to do that, and I do not know what the administration is going to do if we do not, but I know you have complaints about the Commission and the way things have been going, and we do too. But I think we all have to agree that there certainly is always room for improvement, and I think our answers, as well as yours, are doing what we can to expedite these things.
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    The time lapse in some of these claims in unreasonable, and we want to work with you. We would like for you to just come back down here and sit with us, share some ideas, and let's work right in this room and work out some of these problems. You certainly have the experience from your side, and we need your expertise, but we would like to have you also listen to us and some of the things that maybe we could be helpful in.
    We may have some questions later on for the record, but I want to thank you sincerely for all of the help you have been in the past, and thanks for being here today.
Mr. Mascara.
    Mr. MASCARA. Thank you, Mr. Chairman.
    You raised serious questions about the quality of adjudication at the regional office level. The quality assurance accuracy rate of 92 percent reported by VA is inconsistent with the high rates of remand and reversal by the Board of Appeals and the Court of Veterans Appeals. In your opinion has the VA narrowed the definition of error in its adjudication process to obtain a misleading accuracy rate?
    Mr. SURRATT. I do not believe the current accuracy measurement is correct, no. I do not believe it in itself is accurate, and as someone said earlier, you have to measure quality by several things and not necessarily those errors that in and of themselves would be outcome determinative.
    You have to measure whether or not due process was given. For example, the failure to afford due process may not have changed the outcome of the case, but nonetheless, it is such a serious error that that it should be cited as a mistake in quality, and I think VA's definition of quality is too narrow currently.
    Hopefully they will correct that. They are deliberating on it.
    Mr. CRANDELL. I would like to state that the Commission noted the large number of cases in which either a 0 percent or a 10 percent rating was given and seemed to treat that as a measure of how trivial the claims were. I think it has a lot to do also with how faulty the judgment is in these cases. I think a lot of these repeat claims are not that somebody says, ''Gee, I got ten percent. Maybe I should shoot for 20.'' What happens is that somebody really did not get a fair shake.
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    Mr. MCNEILL. I think that BPR goes a long way to doing that. I think the idea about the hearing officer and increasing the hearing officers is well-defined in BPR because they want to get to the pre-decisional hearing and they want to define the issues immediately. Everything in BPR is geared with dealing with the veteran face to face. That is the one criteria that make the hearing officer program so successful because that is the first time where the VA actually sits down with the veteran and says, ''Mr. Jones, what are you really talking about here? What do you really need? What are we missing on this point?''
    Shifting all of that forward I think will help tremendously in the idea of leading to quality decisions by adjudication personnel.
    Mr. MASCARA. Thank you, ladies and gentlemen.
    Thank you, Mr. Chairman.
    Mr. SURRATT. Mr. Chairman, may I make one final comment?
    The CHAIRMAN. Go ahead.
    Mr. SURRATT. I appreciate in your statement that you mentioned many of our complaints about the VA in the past. We have made many, but the fact that we were the critics that brought those problems to your attention, it should bear some credit that we are the ones that say that VA is on the right track. I mean, I do not believe we would be saying that if we did not believe it.
    The CHAIRMAN. Thank you, sir.
    Does anyone else care to make a closing statement? (No response.)
    The CHAIRMAN. You will be hearing from us, and we look forward to working with you, and I hope you do likewise.
    Thank you very much. The meeting stands adjourned.
    [Whereupon, at 4:14 p.m., the committee was adjourned, subject to the call of the chair.]
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