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DISABILITY COMPENSATION AND DIC

PROGRAM

TUESDAY, OCTOBER 27, 1981

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMPENSATION, PENSION AND INSURANCE,

COMMITTEE ON VETERANS' AFFAIRS,

Washington, D.C. The subcommittee met, pursuant to call, at 8:58 a.m., in room 340, Cannon House Office Building, Hon. Sam B. Hall, Jr., presiding.

Present: Representatives Hall, Montgomery, Wylie, and Hammerschmidt.

OPENING STATEMENT OF CHAIRMAN HALL Mr. HALL. Good morning, ladies and gentlemen. This committee will now come to order.

We are meeting this morning to hold an oversight hearing on the disability compensation and DIC program.

These are probably the most important programs of the Veterans Administration since they were created to meet the needs of our citizen soldiers who were disabled or who died from serviceconnected causes.

I especially want to welcome Mr. Woodall and Mr. Mars this morning. Mr. Woodall has recently been named as Director of Compensation and Pension Service replacing Charlie Peckarsky. Mr. Mars has been named as his deputy.

I understand, Mr. Woodall, you have not reported for full-time duty yet but will do so in the near future. After these hearings you may wish to reconsider. [Laughter.]

Seriously, I congratulate you both and I look forward to working with you and your fine staff.

We have asked Miss Starbuck to comment today on a number of important matters affecting the compensation program.

The committee is constantly considering new proposals and reviewing the current program, and after hearing from the Veterans' Administration we will hear from a number of witnesses from the service organizations.

Before I commence I would like to recognize Mr. Montgomery who is chairman of the Veterans Affairs Committee, and ask that distinguished gentleman from Mississippi if he has any remarks he would care to make at this time, and then I will recognize Mr. Wylie.

Mr. MONTGOMERY. Thank you, Mr. Chairman.

I appreciate being included in this subcommittee hearing this morning, and as you say, it is certainly important, the most important thing we have is to see that the service-connected veteran and their dependents are treated fairly, and I look forward to these hearings.

Mr. Hall. I recognize the gentleman, Mr. Wylie.
Mr. WYLIE. Thank you, Mr. Chairman.

I want to take this opportunity to welcome this distinguished panel this morning. The hearing is scheduled, according to the notice, to look into the administration of the compensation and pension program of the Veterans' Administration. This program involves an expenditure of some $12.7 billion this year, for this fiscal year. Obviously, we on this committee and, more specifically, the Congress, has a very special interest in this program.

I have had several inquiries I might say, Miss Starbuck, about the 11.2-percent increase in compensation which went into effect on October 1. Veterans called and said “I didn't see that in my check for October"-and I know there is an administrative detail that has to be worked out. I thought that you may want to comment on that.

I want to take this opportunity also to congratulate Mr. Max Woodall for his new assignment. I know it will be interesting and a challenge to him, and also to Herb Mars on his promotion. I congratulate both of you and I look forward to hearing from you this morning.

Thank you very much.

Mr. HALL. At this time we will hear from Miss Dorothy Starbuck.

STATEMENT OF DOROTHY L. STARBUCK, CHIEF BENEFITS DI

RECTOR, VETERANS' ADMINISTRATION, ACCOMPANIED BY
MAX WOODALL, DIRECTOR; HERBERT MARS, DEPUTY DIREC-
TOR, COMPENSATION AND PENSION SERVICE; AND NORMAN
PAULSON, ASSISTANT GENERAL COUNSEL
Miss STARBUCK. Thank you, Mr. Hall.

You have recognized both the gentlemen who are facing_new challenges today. I would like also to introduce Mr. Norman Paulson of General Counsel's Office, who continues to stand with both feet firm and help us with our problems in the compensation and pension program.

You have asked this morning that I discuss with you the implementation of the Former Prisoner of War Benefits Act, the effect that some of the vacancies in our high-level positions in the department have had; our review of unemployability cases, the timeliness of examinations and hospital reports which are so important in our adjudication processes, possible payments to beneficiaries who are deceased, the effects on our processes of the decision by the Federal district court with respect to radiation claims, and, you asked also that I discuss the staffing levels for 1982 and 1983 and the impact on our operations of the decision by the Office of Personnel Management to limit payment of salary increases to special rate cases.

With respect to the Former Prisoner of War Benefits Act, we are moving very quickly to implement this. The regulations with respect to this changed law have been drafted, have cleared through the General Counsel's Office, and are currently being prepared for submission to the Administrator for signature.

Following that, of course, they will go to OMB for approval and we would expect that within a month they would be about ready to go to print.

We have, however, in the interim issued a circular to the regional offices which explains all facets of the law, and in addition to that we are requesting that any cases in which ratings are accomplished with respect to former prisoners of war be furnished to central office for our review.

These ratings will provide information to the Department to present to the Advisory Committee on Former Prisoners of War.

We will make a very extensive outreach effort with respect to the former prisoners of war. We anticipate making contact with all of the service organizations and State directors of veterans' affairs, requesting their assistance in identifying among their members, or persons known to them former prisoners of war.

We do have in our records approximately 108,000 identified records of former prisoners of war.

We are preparing a new pamphlet which will explain all of the provisions of the law. This will be ready for distribution in Febru

ary 1982.

Our Public and Consumer Affairs Office, which is our information service, will be assisting us in the release of publications to the news media, radio and television.

Subsequent to the study of the former prisoners of war we have labeled every claims folder in the Veterans' Administration with a special POW label, both those that are in the regional office and those that are in the records processing center.

Additionally, the Department of Medicine and Surgery marked all clinical records, identified as pertaining to former prisoners of war with that same label.

As I mentioned, our beneficiary identification records locator system does identify former prisoners of war. We had previously identified them as having 179 days of internment or less. We are amending that to show the new law provision of 30 days or less. Also we expect to have an indicator in our master record at Hines, Ill., to show prisoner-of-war status in December.

This will make it easy particularly for hospital personnel who make input to the master record to identify former prisoners of

war.

We have about 40,000 claims folders on former prisoners of war at our records processing center. We are going to take a 10-percent sample of those cases and ask four of our regional offices to review them to determine the type of benefit claimed, the reason for disallowance of the claim, and we will make some attempt to locate the individual concerned. Depending on the results of that test, we will make a decision as to whether we will pull from the records processing center all former prisoner-of-war cases.

The Department of Medicine and Surgery, of course, has also moved ahead to advise all its personnel in the field on the provisions of this law.

Moving now to the review of unemployability cases: Both the members of the Veterans Affairs Committee and the Department have been concerned about the possibility of the loss of control over these cases and, in effect, the validity of the grants of service connection. As a result of both the review by the members of this committee and in response to a request from the committee, we provided for a review of unemployability cases. That review started in late 1980 and involved in excess of 68,000 cases.

As a result of the review we confirmed and continued over 42,000 of the cases. We changed from unemployability to a scheduler 100percent rate in 13,137 of the cases. We reestablished controls on unemployment in 8,900 of the cases, and reduced only 3,501 across the country.

The purpose of this review was not to develop amendments to the provisions for the granting of unemployability but to assure that all of those cases were properly adjudicated and that eligibility was confirmed.

We are, however, continuing our oversight of these cases and have instructed regional office personnel to submit to central office copies of all ratings in which both a grant of unemployability and a denial have been effected. This will enable us to continue our review of the rating activity on this.

Moving now to the key positions in the Department which have been vacant, I certainly was very pleased when Mr. Nimmo approved the promotion of both Max Woodall and Herb Mars. In addition to that, the Administrator has approved Dr. Stephen Lemons as the Director of Vocational Rehabilitation and Counseling and has approved the appointment of Lew Dollarhide to be the Director of Education Service, so right now we do have a full staff on board.

We have been without a Director and an Assistant Director in the Compensation and Pension Service for some time. My deputy, John Hagan, served very well as the Acting Director of that Service and there was no diminution in any of the services or any of the issuance of procedures and policies to our regional office during that time. It just meant that John had to work about twice as fast and hard as he normally would.

I think we are moving slowly toward some improvement in our receipt of examinations and hospital reports. We are getting excellent service in some parts of the country, not so good in some others, but in the overall, while the improvement is very small, it is, we think, significant and indicative of something that can be done.

At the end of August we had in excess of 28,000 examination and hospital reports outstanding but only 2,200 of these were more than 2 months old. We would like to see a shorter turnaround, a greater percentage sent to us in 30 days or less, but we feel that the Department of Medicine and Surgery is responding positively to us and we really have no quarrel with their services at this particular time.

With respect to possible payments to deceased beneficiaries the Inspector General has initiated action to conduct two computer matches and an audit of cases.

One-both involve the C. & P. master record-involves a match against an Illinois death case file, and the second is a match of the C. & P. master records against a file of death records that has been amassed by ATL Co., which is a private contractor in Silver Spring, Md.

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