A number of factors contribute to these challenges,  such as an increase in the numbers and complexity of the claims veterans  are filing and the effects of recent laws and court decisions. The number of pending  claims increased by more than 50 percent from the end of fiscal year 2003  to the end of fiscal year 2007 to about 392,000. Similarly, while VA reduced the average number of days claims were  pending from a high of 182 days at the end of fiscal year 2001 to 111 days  at the end of fiscal year 2003, the average age of pending claims crept back  up to 132 days by the end of fiscal year 2007, as shown in figure 2. Further, a number of statutes and court decisions related to VA’s  disability claims process have affected VA’s ability to process claims in a  timely manner. For example, VA stated that the Veterans Claims  Assistance Act of 2000 significantly increased the length and complexity of  claims development by adding more steps to the process and lengthening  the time it takes to develop and decide a claim. VA Continues to Take Steps to Improve Claims Processing

VA is taking several steps to improve claims processing. In VA’s fiscal year 2009 budget justification, an increase in claims  processing staff was identified as essential to reducing the pending claims  inventory and improving timeliness. The fiscal year 2009 request would  fund 10,998 full-time equivalent employees working on compensation and  pension claims, and represents an increase of about 2,600 positions, or 32  percent over fiscal year 2007. GAO is currently  studying this pilot. VA also continues to face questions about its ability to ensure that  veterans receive consistent decisions across regional offices. Opportunities for Improvement May Lie in More Fundamental Reform

While VA is taking actions to address its claims processing challenges,  there are opportunities for more fundamental program reform such as  reexamining program design and the structure and division of labor among  field offices. In its October 2007 report, the Veterans’ Disability Benefits Commission  (VDBC)—established by Congress in 2003 to study the appropriateness of  VA disability benefits—also pointed out that VA’s eligibility criteria were  outdated and recommended that the VA Rating Schedule be reviewed and  updated. Opportunities  may lie in more fundamental reform. Veterans’ Disability Benefits: Claims Processing Challenges and  Opportunities for Improvements. Veterans Benefits: VA Needs Plan for Assessing Consistency of  Decisions. Department of Veterans Affairs: Key Management Challenges in Health  and Disability Programs.
Why GAO Did This Study

The Subcommittee on Disability Assistance and Memorial Affairs, House Veterans' Affairs Committee, asked GAO to present its views on the Department of Veterans Affairs' (VA) disability claims process. This statement discusses (1) claims processing challenges VA faces, (2) steps VA is taking to address these challenges, and (3) opportunities for more fundamental reform. GAO has reported and testified on this subject on numerous occasions. GAO's work has addressed VA's efforts to improve the timeliness and accuracy of decisions on claims, VA's efforts to reduce pending claims levels, and concerns about decisional consistency. This testimony is based on a body of past work, updated as appropriate to reflect the current workload and initiatives.

What GAO Found

Despite taking steps to improve its disability claims process, VA continues to face challenges, specifically in reducing the number of claims pending, speeding up the process of deciding claims, and improving accuracy and consistency of decisions across regional offices. For example, between fiscal years 2003 and 2007, the inventory of claims awaiting a decision by VA grew by more than 50 percent to a total of about 392,000, and the average number of days claims were pending increased by 3 weeks to 132 days. Further, GAO and VA's Inspector General have identified concerns about the consistency of decisions across regional offices. Factors affecting VA's claims-processing performance may include increases in the number and complexity of claims being filed and the potential impacts of laws and court decisions. VA continues to take steps to help improve claims-processing performance, including requesting funding for additional staff. The President's fiscal year 2009 budget request funds an increase of more than 2,600 additional full-time equivalent employees over fiscal year 2007 levels to process claims. Beyond the steps VA is taking to address its claims processing challenges, opportunities for significant performance improvement may lie in more fundamental reform of VA's disability compensation program. Such reforms could include reexamining program design such as updating the disability criteria to reflect the current state of science, medicine, technology, and labor market conditions. It could also include examining the structure and division of labor among field offices. Recent studies conducted by presidential and congressionally appointed commissions have recommended some fundamental changes, including updating VA's rating schedule, which provides the basis for decisions about eligibility for benefits.