VA Continues to Face Challenges in Improving Its Claims Processing

Several factors are continuing to create challenges for VA’s claims  processing, despite its steps to improve performance. VA’s steps to improve  performance include requesting funding for additional staff and  undertaking initiatives to reduce appeal remands. VA’s inventory of pending claims and their average time pending has  increased significantly in the last 3 years, in part because of an increase in  the number of claims. The number of pending claims increased by almost  one-half from the end of fiscal year 2003 to the end of fiscal year 2006,  from about 254,000 to about 378,000. Rating-related  claims, including those filed by veterans of the Iraq and Afghanistan  conflicts, increased steadily from about 579,000 in fiscal year 2000 to about  806,000 in fiscal year 2006, an increase of about 39 percent. Moreover, according to VA, the complexity of claims is also increasing. Since 1999, several court decisions and laws related to VA’s  responsibilities to assist veterans in developing their benefit claims have  significantly affected VA’s ability to process claims in a timely manner. VA’s budget justification  provides information on actual and planned productivity, in terms of  claims decided per full-time equivalent employee. To resolve appeals faster, VA has been working to reduce the number of  appeals sent back by the Board of Veterans’ Appeals for further work such  as obtaining additional evidence and correcting procedural errors. 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 reform that could  dramatically improve decision making and processing. These include  reexamining program design, as well as the structure and division of labor  among field offices. This study would include estimates of the effects on the  size, cost, and management of VA’s disability programs and other relevant  VA programs and would identify any legislative actions needed to initiate  and fund such changes. Veterans’ Disability Benefits: VA Can Improve Its Procedures for Obtaining  Military Service Records. Department of Veterans Affairs: Key Management Challenges in Health  and Disability Programs. Veterans’ Benefits: Quality Assurance for Disability Claims and Appeals  Processing Can Be Further Improved.
Why GAO Did This Study

The Subcommittee on Disability Assistance and Memorial Affairs, House Veterans' Affairs Committee, asked GAO to discuss its recent work related to the Department of Veterans Affairs' (VA) disability claims and appeals processing. GAO has reported and testified on this subject on numerous occasions. GAO's work has addressed VA's efforts to improve the timeliness of decisions on claims and appeals and VA's efforts to reduce backlogs.

What GAO Found

VA continues to face challenges in improving service delivery to veterans, specifically speeding up the process of adjudication and appeal, and reducing the existing backlog of claims. For example, as of the end of fiscal year 2006, rating-related compensation claims were pending an average of 127 days, 16 days more than at the end of fiscal year 2003. During the same period, the inventory of rating-related claims grew by almost half, in part because of increased filing of claims, including those filed by veterans of the Iraq and Afghanistan conflicts. Meanwhile, appeals resolution remains a lengthy process, taking an average of 657 days in fiscal year 2006. However, several factors may limit VA's ability to make and sustain significant improvements in its claims-processing performance, including the potential impacts of laws and court decisions, continued increases in the number and complexity of claims being filed, and difficulties in obtaining the evidence needed to decide claims in a timely manner, such as military service records. VA is taking steps to address these problems. For example, the President's fiscal year 2008 budget requests an increase of over 450 full-time equivalent employees to process compensation claims. VA is also working to improve appeals timeliness by reducing appeals remanded for further work. While VA is taking actions to address its claims-processing challenges, opportunities for significant performance improvement may lie in more fundamental reform of VA's disability compensation program. This 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.