In January 2003, we designated modernizing VA’s disability programs,  along with other federal disability programs, as high-risk. Problems in Claims Processing Continue

VA continues to experience problems processing veterans' disability  compensation and pension claims. These include large numbers of  pending claims and lengthy processing times. While VA made progress in  fiscal years 2002 and 2003 in reducing the size and age of its inventory of  pending claims, it has lost some ground since the end of fiscal year 2003. As shown in figure 1, pending claims increased by about one-third from  the end of fiscal year 2003 to the end of March 2005, from about 254,000 to  about 340,000. VA also faces continuing questions about its ability to ensure that veterans  receive consistent decisions—that is, comparable decisions on benefit  entitlement and rating percentage—regardless of the regional offices  making the decisions. The issue of decision-making consistency across VA  is not new. We concluded that VA needed to  systematically assess decision-making consistency to provide a foundation  for identifying acceptable levels of variation and to reduce variations  found to be unacceptable. Again, in November 2004, we highlighted the  need for VA to develop plans for studying consistency issues. Reacting to  these media reports, in December 2004, the Secretary instructed the  Inspector General to determine why average payments per veteran vary  widely from state to state. Factors That May Impede VA’s Ability to Improve Claims Processing Performance

Several factors may impede VA’s ability to make, and sustain, significant  improvements in its claims processing performance. Laws, Court Decisions, and Filing Behavior of Veterans Impact Workload and Performance

Recent history has shown that VA’s workload and performance is affected  by several factors, including the impacts of laws and court decisions  expanding veterans’ benefit entitlement and clarifying VA’s duty to assist  veterans in the claims process, and the filing behavior of veterans. These  factors have affected the number of claims VA received and decided. Ability to Improve Productivity May Affect Future Performance Improvements

In November 2004, we reported that to achieve its claims processing  performance goals in the face of increasing workloads and decreased  staffing levels, VA would have to rely on productivity improvements. Veterans’ Benefits: Improvements Needed in the Reporting and Use of  Data on the Accuracy of Disability Claims Decisions. Major Management Challenges and Program Risks: Department of  Veterans Affairs.
Why GAO Did This Study

The Chairman, Committee on Veterans' Affairs, U.S. Senate, asked GAO to testify on the current state of VA's disability claims process and factors that may impede VA's ability to improve performance. For years, the claims process has been the subject of concern and attention within VA and by the Congress and veterans service organizations. Many of their concerns have focused on long waits for decisions, large claims backlogs, and the accuracy of decisions. Our work and recent media reports of significant discrepancies in average disability payments from state to state have also highlighted concerns over the consistency of decision-making within VA. In January 2003, GAO designated federal disability programs, including VA's compensation and pension programs, as a high-risk area because of continuing challenges to improving the timeliness and consistency of its disability decisions, and the need to modernize programs.

What GAO Found

The Department of Veterans Affairs (VA) continues to experience problems processing veterans' disability compensation and pension claims. These include large numbers of pending claims and lengthy processing times. While VA made progress in fiscal years 2002 and 2003 in reducing the size and age of its inventory of pending claims, it has lost some ground since the end of fiscal year 2003. For example, pending claims increased by about one-third from the end of fiscal year 2003 to the end of March 2005. Meanwhile, VA faces continuing questions about its ability to ensure that veterans get consistent decisions across its 57 regional offices. GAO has highlighted the need for VA to study the consistency of decisions made by different regional offices, identify acceptable levels of decision-making variation, and reduce variations found to be unacceptable. Also, reacting to media reports of wide variations in average disability benefit payments from state to state, the Secretary of Veterans Affairs instructed VA's Inspector General in December 2004 to determine why these variations were occurring. Several factors may impede VA's ability to make significant improvements in its disability claims processing performance. Recent history has shown that VA's workload and performance is affected by factors such as the impacts of laws and court decisions affecting veterans' benefit entitlement and the claims process, and the filing behavior of veterans. These factors have affected the number of claims VA received and decided. Also, to achieve its claims processing performance goals in the face of increasing workloads without significant staffing increases, VA would have to rely on productivity improvements. GAO believes that fundamental reform might be necessary to achieve more dramatic gains in performance.