STATUS OF THE COMPENSATION PROGRAM OF THE DEPARTMENT OF VETERANS BENEFITS, VETERANS' ADMINISTRATION THURSDAY, JUNE 14, 1984 HOUSE OF REPRESENTATIVES, PENSION AND INSURANCE, COMMITTEE ON VETERANS' AFFAIRS, Washington, DC. The subcommittee met, pursuant to notice, at 9:05 a.m., in room 334, Cannon House Office Building, Hon. Douglas Applegate (chairman of the subcommittee) presiding. Present: Representatives Applegate, Montgomery, Hammerschmidt, and Burton. OPENING STATEMENT OF CHAIRMAN APPLEGATE Mr. APPLEGATE. The subcommittee will come to order. This morning we meet to receive testimony on the status of the compensation program of the Department of Veterans Benefits. Each year we schedule an oversight hearing for this purpose so that we can receive a report from the Veterans' Administration which, of course, is extremely helpful to our committee. We need to know what is right with the program as well as what is wrong, and we like to hear what recommendations there are. We also will hear from a number of veterans organizations which have been invited and have accepted. This is their opportunity to tell us how they perceive the benefits program and how it's working. It is their chance to voice their criticisms and, if they want, sometimes praise, on how the VA is doing their job. One of the subjects that we are going to be discussing today is the program for former prisoners of war. The National Commander of the American Ex-Prisoners of War is here, with members of his staff, and we are glad to have him. We will be listening to him later. Another subject which will be mentioned is the possibility of restructuring the rates for widows receiving dependency and indemnity compensation. As you all know, payments are now based on the military pay grade of the serviceman. It has been suggested that while this principle may be relevant to in-service deaths, it has very little relationship to the rates which should be paid in post-service deaths. Last year, an effort was made by the DAV to secure a cost estimate of a proposal which would base DIC rates on the disability (1) evaluation assigned the veteran prior to his death. They felt that veterans who were totally disabled and unable to work and provide an estate for his survivors should receive the higher rate of death benefits. The Congressional Budget Office was unable to provide a cost estimate because of the lack of data in the VA computers. The Veterans' Administration has been working to get information together which would permit them to provide cost data on this type of proposal. I am told that field stations have submitted caseby-case information to central office and they will soon be able to respond to requests for this information. We will be hearing from the Veterans' Administration on this. As a matter of information, I am hopeful that next week the House will take up H.R. 5688, the Veterans' Compensation Amendments for fiscal year 1985. The bill, of course, is going to provide, hopefully, a 4.3 percent cost-of-living increase in compensation and DIC which, of course, will be effective December 1, 1984. Incidentally, I talked with the ranking minority member of the subcommittee, our colleague, Bob McEwen, and Bob has a commitment this morning and will not be able to attend. However, we do have the ranking minority member of the full committee with us, John Paul Hammerschmidt, who we will hear from at this time. STATEMENT OF HON. JOHN PAUL HAMMERSCHMIDT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS Mr. HAMMERSCHMIDT. Thank you, Mr. Chairman. I share my colleagues' views, that only through hearings such as these do we get the opportunity to view the continuing progress of the Veterans' Administration's compensation programs. I believe the Veterans' Administration is doing a capable and effective job in seeing to the needs of America's service-connected disabled veterans and to the widows and survivors of our veterans. Of course, we must not let up in our efforts to do more, and in that light, oversight hearings give us an opportunity to assess the VA's progress and assure a continued high level of performance. Mr. Chairman, I congratulate you on your continuing leadership and direction in your efforts to keep this most vital program on track, and I join with you in your efforts on behalf of this Nation's veterans. I am delighted to sit in with you on the subcommittee this morning. I regret that the ranking minority member of the subcommittee, Mr. McEwen had a serious conflict, but I ask unanimous consent to submit a statement in the record for him. Mr. APPLEGATE. Without objection. [The statement of Mr. McEwen follows:] STATEMENT OF HON. BOB MCEWEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO The hearing this morning will focus upon VA's compensation program for service connected disabled veterans and their survivors. This program has a very high priority with this committee and with the Congress. I congratulate you, Mr. Chairman, for scheduling this oversight session so that we might obtain an update on the program and learn firsthand how it is working. Mr. Chairman, every once in a while we hear comments about the costs that are related to the payment of compensation. It is true that the costs are high. But if we break them down to individual veterans, we get a much better picture. It is then that we see that a 100% disabled service connected veteran who is single receives $1,255 per month while those with lesser disabilities receive proportionately smaller amounts. I am sure you would agree, Mr. Chairman, that such sums of money are by no means extravagant expenditures by a government that prides itself on taking care of its disabled veterans. The same can be said of the dependency and indemnity compensation that is paid to widows of service connected veterans. For instance, the 445 dollars monthly that is currently paid to a private's survivor is indeed a modest amount, and certainly it is not concerned with unjust enrichment by its recipients. Mr. Chairman, you have indicated possible changes in this latter program and you have spoken to the pending increase of compensation payments. I associate myself with your remarks. I, too, hope that the DIC program can be made more equitable and that the Congress will act soon on another compensation increase commensurate with the increased cost of living. Mr. APPLEGATE. Thank you, Mr. Hammerschmidt. Our first witness today is Mr. John Hagan, Deputy Chief Benefits Director. Mr. Hagan, if you will come forward and introduce those who are with you. First, let me say that it is my understanding that Dorothy Starbuck, who usually comes before our panel and speaks, will not be here this morning because of a death in the family. We regret that and extend our deepest sympathies. Mr. HAGAN. Thank you, sir, and I will express your sympathies to her. STATEMENT OF JOHN W. HAGAN, JR., DEPUTY CHIEF BENEFITS DIRECTOR, VETERANS' ADMINISTRATION; ACCOMPANIED BY JAMES IANNUZZI, ASSOCIATE DIRECTOR FOR SYSTEM DESIGN AND INTEGRATION, OFFICE OF DATA MANAGEMENT AND TELECOMMUNICATIONS; HERBERT MARS, DEPUTY DIRECTOR, COMPENSATION AND PENSION SERVICE; MAX WOODALL, DIRECTOR OF COMPENSATION AND PENSION SERVICE; AND JACK THOMPSON, DEPUTY ASSISTANT GENERAL COUNSEL Mr. HAGAN. Good morning. Mr. Chairman and members of the subcommittee, I am pleased to appear before you this morning to discuss a variety of issues which impact on the Department of Veterans Benefits programs. I will especially deal with the areas of concern set forth in your invitation. This morning I have with me, on my right, Mr. Jim Iannuzzi, Associate Director for System Design and Integration, Office of Data Management and Telecommunications, and Mr. Herb Mars, Deputy Director of Compensation and Pension Service. On my left is Mr. Max Woodall, Director of the Compensation and Pension Service, and on my far left, Mr. Jack Thompson, Deputy Assistant General Counsel. First, I would like to discuss workload trends for the adjudication program. Workload in the Adjudication Division has been gradually decreasing since 1977. We expect this trend to continue through the 1980's. The only two compensation and pension areas in which we foresee slight increases are claims for burial and plot allowances and in our dependency and indemnity compensation program. In the Veterans' Educational Assistance Program, after a slight increase in fiscal year 1985, the workload will again decline, corre sponding to the decrease in the number of trainees in the chapter 34 program. The survivors and the dependents program will also have a slight decrease. Vocational and rehabilitation eligibility determinations and awards are expected to increase slightly through fiscal year 1986. Thereafter, a slight decline is expected. We have been working with the Advisory Committee on Former Prisoners of War. As mandated by Public Law 97-37, the committee's first formal report with its 21 recommendations was submitted to the Administrator in June 1983 and was subsequently transmitted to the Congress. These recommendations in the Advisory Committee's report, which could be handled administratively by the Department of Veterans' Benefits, were implemented as the committee's discussion brought out the areas of concern. In accordance with one recommendation, on December 12, 1983, we inaugurated a toll-free national telephone "hot line" for use by former POW's in requesting information or assistance in obtaining benefits. In response to another recommendation, we are developing a computer system for data collection and statistical report generation for POW claims and other special issues. Among the recommendations which we could not implement administratively was one which specified that dysthymic disorderalso known as depressive neurosis-should be added to the list of diseases that may be presumed to be service-connected. This recommendation was accomplished legislatively by the March 2, 1984, enactment of Public Law 98-223. We have worked closely with the Advisory Committee in all areas where administrative action could be taken in response to committee recommendations and our efforts in that regard will continue. You also requested further information about our annual income questionnaires. A total of 1,727,904 pension and parent DIC recipients were sent questionnaires this year. This figure includes the section 306 pension claimants over the age of 72 who in the past have been exempted from receiving the annual questionnaire. This group of exempt pensioners last received a questionnaire in the 1978-79 income questionnaire year. Approximately 100,000 benefit terminations due to income in excess of the statutory limit were processed during the 1983-84 questionnaire season. I anticipate that an additional 25,000 cases will be terminated when final AIQ actions are processed. During last September's oversight hearing we informed you of our plan to obtain income and dependency information this year from dependent parents in life and death compensation cases. Questionnaires will be sent and processed as a special project beginning this month. Currently, we have a study going on to measure our work and quality controls. The system currently used to measure the type and volume of work performed in our adjudication divisions has been in place for many years. It has been decided that it is time we took a fresh look at this area and have initiated the formal process to solicit bids from private consultants for an in-depth study. The closing date for the request was June 6, 1984. Work required under this request for proposal must be completed within 6 calen dar months after the award of the contract. We will closely monitor the progress of the contractor throughout the study and will carefully evaluate the final recommendations before any changes are made. We are also reviewing our statistical quality control program, including the method by which we validate the quality reviews done by the personnel in the adjudication divisions in the regional offices. Mr. Chairman, I only wish I was in a position to talk about recruiting, as you mentioned in your letter. The fact of the matter is that we have lost over 2,600 full-time employees in DVB in the last 4 years, and we are facing a loss of another 800 in the upcoming fiscal year. By a variety of measures, we have managed to stretch this reduced workforce far enough to accomplish our basic missions. It is becoming increasingly clear, however, that if we continue to reduce staffing without taking compensatory measures, the timeliness and quality of our service to veterans and their families will suffer. One of the means we have used to counteract the erosion of our manpower is to stress the importance of training. We have made a major effort in the training of our rating specialists who are responsible for disability evaluations. During 1983 and 1984 we held two sets of regional seminars which focused on important rating issues. At the end of the seminar, each participant returned to his or her regional office to teach fellow rating specialists the topics that had been presented at the seminar. We feel that through this training we have made great progress in improving the quality of rating decisions and ensuring the uniformity of rating actions. We have found in the past that the department derives many benefits from the annual conferences we hold for the chiefs of the various divisions within our regional offices. This year, we plan to tap an additional source of new ideas and viewpoints by holding a 2-day conference in September to provide our assistant adjudication officers with formal training in different aspects of their management and internal control responsibilities. Mr. Chairman, we have acquired or plan to acquire several pieces of computer equipment and computer software that significantly increases the power and efficiency of the TARGET system. However, rather than take time to describe these in detail, with your permission, I would like to submit for the record a short report which discusses these technical improvements. Mr. APPLEGATE. Without objection, it will be included.1 I would like to briefly outline changes in the TARGET system which impact directly on the process which takes place in the regional offices. The latter part of 1983 saw the implementation of accrued award processing and diary controls processing. In addition, the master record format for the compensation and pension payment system was expanded, giving us the capacity to retain data on multiple types of retirement income and the ability to indicate whether the reported amounts of income from Federal sources have been verified by the administrating agency. 'See p. 43. |