The Committee met, pursuant to notice, at 2:02 p.m., in room SR-418, Russell Senate Office Building, Hon. Larry E. Craig (Chairman of the Committee) presiding.

Present: Senators Craig, Burr, Thune, Akaka, Rockefeller, Murray, Obama, and Salazar.

OPENING STATEMENT OF HON. LARRY CRAIG, U.S. SENATOR FROM IDAHO

Chairman CRAIG. Good afternoon, everyone, and welcome to the Senate Committee on Veterans' Affairs. We have entitled this hearing, "Battling the Backlog: Challenges Facing the VA Claims Adjudication and Appeal Process."

This afternoon, we will discuss the state of the Department of Veterans Affairs' claims adjudication and appeals system. It is through this system that separated service members must proceed in order to receive VA disability compensation for injuries sustained during military service.

Especially during the time of war, when we have thousands of wounded soldiers returning from the battlefield, it is essential that we ensure there is a system in place that will provide prompt and accurate decisions to those who have served, sacrificed, and suffered for our Nation.

Over the years, there has been significant concern about the backlog of claims in the VA system, the length of time claims remain pending; and the quality of the decisions being rendered. And in recent months, there have been serious questions raised by the press, members of Congress, my colleague who is a member of the Committee and has joined me, VA's Office of Inspector General, regarding the ability of this vast system to provide consistent decisions for veterans across the country.

Earlier this year, Secretary Nicholson testified before this Committee that, as a presidential initiative, improving the timeliness and accuracy of claims proceedings remains VA's top priority for VA's benefits program. And our Committee is also committed to ensuring that we continually strive to improve this system.

To that end, today we will discuss how well the current system is serving our Nation's veterans, what challenges the system is facing, and what steps can be and should be taken to ensure that, now and in the future, our veterans will not endure delays in receiving a fair resolution of their claims.

Joining us for this discussion we have on the first panel the Honorable Daniel Cooper, the Under Secretary for Benefits in the Department of Veterans' Affairs. Welcome, sir. He is accompanied by Ronald Garvin, the Acting Chairman for the Board of Veterans' Appeals. Welcome. And Robert Epley, Associate Deputy Under Secretary for Policy and Program Management for the Veterans Benefits Administration. Bob, welcome.

On our second panel, we will be pleased to have a very distinguished public servant, the Honorable Ken Kramer, who recently retired as the Chief Judge of the United States Court of Appeals for Veterans' Claims; and in a former life in which I first knew him, as a Congressman from Colorado.

We also are pleased to be joined on the second panel by Cynthia Bascetta, Director of Education, Workforce, and Income Security for the U.S. Government Accountability Office; Rick Surratt, the Deputy National Legislative Director for the Disabled American Veterans; and Robert Chisholm, former president, National Organization of Veterans Advocates.

Ladies and gentlemen, we welcome you all. Our Ranking Member has just arrived. While he is getting his house in order, I know that the Senator from Illinois has an appointment awaiting him, so I am going to turn to Senator Obama for his comments, and then we will come back to Senator Akaka, the Ranking Member of the Committee.

Senator.

OPENING STATEMENT OF HON. BARACK OBAMA,

U.S. SENATOR FROM ILLINOIS

Senator OBAMA. Thank you so much, Mr. Chairman. Thank you to my wonderful Ranking Member, for allowing me the prerogative of going quickly. I apologize in advance; I am going to have to leave in a few minutes, but will try to get back before the end of the hearing.

I want to thank Admiral Cooper and the other persons on the panel for your appearance and participation in this important hearing.

You know, when we call our armed forces to go into battle to defend this Nation, they don't tell us, "Not now; it is not a convenient time," or, "Call us back in a couple of months; we will be ready then." Instead, what they do is, they respond immediately, and go bravely into battle to fight for our democracy.

Their prompt response to their Nation's call to arms stands in stark contrast to how our Government seems to be dealing with these soldiers when they return home. When veterans ask for their earned benefits, and decide to appeal a decision, they are subject to, on average, a 3-year wait. In fact, some veterans are asked to wait more than a decade to have their claims fully adjudicated.

This doesn't sit right by me. I don't think it sits right by the American people. I know that Admiral Cooper has been working

diligently to try to improve the situation. But part of my specific and particular concern arises out of the fact that there also appear to be large discrepancies between benefits that are paid in various States.

Admiral Cooper, along with Secretary Nicholson, attended a town hall meeting in Illinois this past week to discuss what could be done to improve the variability in rating certain illnesses; particularly those like post-traumatic stress disorder, that may not have objective visible physical attributes.

And the reason I think I am very concerned about how we are moving forward is, number one, that in Illinois, Secretary Nicholson discussed the fact that we may need to look at claims from the past in which Illinois veterans seem to have been shortchanged. And I am going to be working with Admiral Cooper, Secretary Nicholson, and others, to try to figure out how we set that system up.

More broadly, it appears that the claims delays are worse in Illinois and in the Chicago regional office, than they are in other parts of the country. And finally, even where the national average is concerned, it appears to be far too high.

I think that we have a lot of work to do, both specifically to Illinois and across the Nation. We need to shorten the time that it takes to file and appeal a claim. I hope that we can create some standards that create consistency in the disposition of these claims at the end of them.

I have read the written testimony that is being presented. I will be very interested in figuring out how we on the Committee can be helpful to the VA in making significant progress in this area.

The last point that I would make, Mr. Chairman, is that one of the things that happened when Secretary Nicholson was at our town hall meeting in Illinois was an acknowledgement that some of the variability, and certainly some of the delay, had to do with what appears, at least from the IG's report, some under-staffing in some of these offices. When we had discussions during the budget debate about getting more money into the VA, there was a presentation made by the Secretary that in fact we had sufficient money to deal with these claims. Both things can't be true.

If, in fact, part of the problem has to do with the fact that the VA just doesn't have enough personnel to deal with this backlog and get the time for appeals down to the stated goals that have been established, then we have to have that reflected in our budget and that has to be part of the commitment that we make to our veterans.

I don't want to be criticizing a department that is understaffed for not operating as quickly as it should. On the other hand, I expect that department to be honest when it says that it is shortstaffed, so that we can get them the resources. And so, to the extent that Admiral Cooper will be touching on staffing issues as part of this whole conversation, I will consider that testimony with great interest. Thank you very much, Mr. Chairman.

Chairman CRAIG. Thank you, Senator.

And now let me turn to our Ranking Member, Senator Akaka. Dan.

OPENING STATEMENT OF HON. DANIEL K. AKAKA,
RANKING MEMBER, U.S. SENATOR FROM HAWAII

Senator AKAKA. Thank you very much, Mr. Chairman. I am so happy that we are having this hearing today and having the distinguished witnesses we have. And I am very pleased to welcome back to this Committee Admiral Cooper.

Mr. Epley, I understand that this will be your last time with us. And thank you so much for your service to our Nation's veterans. Former Chief Judge Kramer, I am very pleased that you have agreed to join us today to give us your special insight into the claims process and how it is working. And we hope to have you make suggestions for improvement.

I, additionally, want to thank the rest of the panel members in advance for testifying before us today. As we all know, the claims process is very important for our Nation's veterans. Áll veterans deserve no less-no less than quality workmanship done in a timely manner.

Those of you on the second panel have a unique perspective on claims processing, and I am happy that you are here to share it with us today. We plan to use this hearing as an opportunity; an opportunity to hear all angles of the issue.

This hearing will be broadly focused; hopefully, touching on major areas of concern in the VA claims process. The information gathered at this hearing will be used as a basis for more narrowlytailored hearings in the future.

Along with Chairman Craig, I look forward to building on what we learn today and in subsequent hearings. To date, in fiscal year 2005, 43 percent of the claims reaching the Board of Veterans' Appeals are remanded. These remands worry me because of the additional time it adds to the process. Today, I hope to hear about the causes of these remands, and possible ways to eliminate the errors at the regional office level that are causing the high remand rate. I also note to Admiral Cooper that your testimony states that delays in remand processing grew as a result of the resource demands of the total growing workload. Admiral Cooper, I would like to work with you to appropriately address this situation.

I want to thank the VA for the proactive steps it has made towards decreasing the delay in standardizing business processes through the creation of the appeals management center and the claims processing improvement model. However, we can all see that there is much more work to be done.

I want to make a few remarks about the recent VA Inspector General's report. The report states that it is statistically impossible for each State to have virtually identical average payments, and that there are numerous factors that affect payments by State. The report says the VA must determine, and I quote, "whether the magnitude of the variance from the highest average State payment to the lowest average State payment is within acceptable limits." I, for one, believe that it is not.

The Inspector General states that some reasons for the payment differential are timeliness pressures, greater experience, and training. These all seem to be personnel and staffing issues that could be fixed if the VA and Congress worked together to allocate the necessary resources.

Another factor stated in the report is subjectivity in PTSD claims ratings. While some disabilities such as PTSD are more prone to subjective rating decisions, such subjectivity adds to the inconsistent decisions. There must be common standards for rating PTSD to ensure fair treatment of our veterans, whether they live in New Mexico or Illinois. But these common standards should not overlook the varying degrees of disability caused by PTSD.

I am happy to know, Admiral Cooper, that you agreed with the review findings and recommendations of the report. I hope that you will periodically inform the Committee on the VA's progress in correcting the problems within claims processing.

Thank you. I look forward, Mr. Chairman, to hearing the testimony of our witnesses.

Chairman CRAIG. Senator Akaka, thank you very much.
Senator Rockefeller, any opening comments?

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, U.S. SENATOR FROM WEST VIRGINIA

Senator ROCKEFELLER. Mr. Chairman, thank you for having this hearing.

My West Virginia staff, which is a third of my total staff members, spends almost half their time on claims cases having to do with veterans. I will just say, I look forward to the testimony. I understand that there may be some interesting ideas coming out of the testimony. Thank you.

Chairman CRAIG. Thank you very much.
Senator Salazar, any opening comments?

OPENING STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM COLORADO

Senator SALAZAR. Thank you very much, Chairman Craig, and Ranking Member Akaka, and members of the Committee. And to all the witnesses, we look forward to your testimony.

I look forward, as well, to hearing from another Coloradan, former Congressman Ken Kramer, about his thoughts on how we might be able to improve this system.

This is only my fifth month here in Washington, D.C., so I am the number-100 Senator. But this Committee to me is one of the most important things that I work on here. And it is because in Colorado, as I travel around my State, I hear so much from the veterans in Colorado about delays in processing their claims. And like Senator Rockefeller spoke earlier, it is one of the areas that consumes a significant amount of the time in my office.

We can tell the story in the lives of veterans who approach us and tell us about the hardships that are being caused by delays in the processing of their claims, or we can look to the statistics. And when we look at the statistics, I understand we have 340,000 veterans that are waiting for their claims to be adjudicated at this time. And that is up 86,000 from October of 2003.

The average wait for a rating on debated claims jumped from 111 days to 119 days in that same period. And thousands of veterans have waited around as sometimes, from their point of view, they get passed around kind of like an administrative football.