In January 2003, we designated modernizing VA’s disability programs,  along with other federal disability programs, as high-risk. VA Continues to Face Significant Challenges in Processing Disability Compensation Claims

VA continues to experience challenges 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 ground since the end of fiscal year 2003. As  shown in figure 1, pending claims increased by over one-third from the end  of fiscal year 2003 to the end of fiscal year 2005, from about 254,000 to  about 346,000. 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. In May 2000 testimony before the House Subcommittee on  Oversight and Investigations, Committee on Veterans’ Affairs, we  underscored the conclusion made by the National Academy of Public  Administration in 1997 that VA needed to study the consistency of  decisions made by different regional offices, identify the degree of  subjectivity expected for various medical issues, and then set consistency  standards for those issues. 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. Recent history has shown that VA’s claims processing workload and  performance are being affected by several factors, including the impacts of  laws and court decisions and the filing behavior of veterans. Opportunities for Improvement May Lie in More Fundamental Reform

While VA is taking a number of 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 and the context in which decisions  are made as well as the structure and division of labor among field offices. For example, in designating federal disability programs as high risk in  2003, GAO noted that VA’s and the Social Security Administration’s (SSA)  disability programs have not been updated to reflect the current state of  science, medicine, technology, and labor market conditions. In addition,  our work has shown that about one-third of newly compensated veterans  could be interested in receiving a lump sum payment, potentially saving  VA time and money associated with reopening cases over time. Moreover,  VA and other organizations have identified potential changes to field  operations that could enhance productivity and accuracy in processing  disability claims. For  example, advances in medicine and technology have reduced the severity  of some medical conditions and have allowed individuals to live with  greater independence and function in work settings. We also  recommended that VA study and report to the Congress on the effects that  a comprehensive consideration of medical treatment and assistive  technologies would have on its disability programs’ eligibility criteria and  benefits package. While reexamining claims processing challenges in a larger context may  be daunting, there are mechanisms for undertaking such an effort,  including the congressionally chartered commission currently studying  veterans’ disability benefits. Veterans’ Benefits: Improvements Needed in the Reporting and Use of  Data on the Accuracy of Disability Claims Decisions. Department of Veterans Affairs: Key Management Challenges in Health  and Disability Programs.
Why GAO Did This Study

The Chairman, Committee on Veterans' Affairs, U.S. House of Representatives, asked GAO to report on the claims processing challenges and opportunities facing the Department of Veterans Affairs (VA) disability compensation and pension program. For years, the claims process has been the subject of concern and attention within VA and by the Congress and veterans service organizations. Their concerns include long waits for decisions, large claims backlogs, and inaccurate decisions. Our work and 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, we 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. VA's outdated disability determination process does not reflect a current view of the relationship between impairments and work capacity. Advances in medicine and technology have allowed some individuals with disabilities to live more independently and work more effectively.

What GAO Found

The Department of Veterans Affairs continues to experience challenges processing veterans' disability compensation and pension claims including large numbers of pending claims and lengthy processing times. While VA made progress in fiscal years 2002 and 2003 reducing the size and age of its inventory of pending claims, it has lost ground since the end of fiscal year 2003. For example, pending claims increased by over one-third from the end of fiscal year 2003 to the end of fiscal year 2005. Meanwhile, VA faces continuing questions about its ability to ensure that veterans get consistent decisions across its 57 regional offices. GAO recommended in August 2002 that VA study the consistency of decisions made by different regional offices, identify acceptable levels of decision-making variation, and reduce variations found to be unacceptable. Several factors may impede VA's ability to significantly improve its claims processing performance. These include the potential impacts of laws, court decisions, and increases in the number and complexity of claims received. Opportunities for improvement may lie in more fundamental reform in the design and operation of disability compensation and pension claims programs. This would include reexamining program design and the context in which decisions are made as well as the structure and division of labor among field offices. For example, in recent years, GAO has found that VA and other federal disability programs have not been updated to reflect the current state of science, medicine, technology, and labor market conditions. The schedule on which disability decisions are made within VA, for example, is based primarily on estimates made in 1945 about the effect service-connected impairments have on the average individual's ability to perform jobs requiring manual or physical labor. In addition, our work has shown that about one-third of newly compensated veterans could be interested in receiving a lump sum payment, potentially saving VA time and money associated with reopening cases over time. In addition, VA and other organizations have identified potential changes to field operations that could enhance productivity and accuracy in processing disability claims. While reexamining claims processing challenges in a larger context may be daunting, there are mechanisms for undertaking such an effort, including the congressionally chartered commission currently studying veterans' disability benefits.