House Committee on Veterans' Affairs

Hearings » Examining the U.S. Department of Veterans Affairs' Claims Processing System

 . . . Law has reached its finest moments when it has freed man from the unlimited discretion of some ruler, some civil or military official, some bureaucrat. Where discretion is absolute, man has always suffered. At times it has been his property that has been invaded; at times, his privacy; at times, his liberty of movement; at times, his freedom of thought; at times, his life. Absolute discretion is a ruthless master. It is more destructive of freedom than any of man's other inventions.

Justice William O. Douglas in United States v. Wunderlich, 342 U.S. 98, 101 (1951).

1. Personal Background:

1. I have been representing individual veterans on service-connected disability and death and disability compensation claims and appeals for over 25 years, all on a pro bono basis.  I also acted as counsel for my mother and late father in the first case ever argued in the newly created Court of Veterans Appeals, since renamed the Court of Appeals for Veterans Claims) “CAVC”).  See Erspamer v. Derwinski, 1 Vet. App. 3 (1990).  In addition, I have represented veterans’ organizations and veterans in two major constitutional actions against the DVA (“VA”), each of which Morrison & Foerster has also handled pro bono, including the following:

1. National Association of Radiation Survivors, et al. v. Walters, Administrator of Veterans’ Affairs, et al., 589 F. Supp. 1302 (N.D. Cal. 1984); 473 U.S. 305 (1985); 111 F.R.D. 595 (N.D. Cal. 1986); 111 F.R.D. 543 (N.D. Cal. 1987); 782 F. Supp. 1392 (N.D. Cal. 1992); 994 F.2d 583 (1992); and
2. Veterans for Common Sense, et al. v. James B. Peake, M.D., Secretary of the Department of Veterans Affairs, et al., USDC-N. Cal. Case No. 07-3758-SC (filed July 23, 2007).  See www.veteransptsdclassaction.org (reproducing copies of complaint and other major pleadings and decisions).

2. Major Regional Office Problems:

1. The Hollowness of the VA’s Motto:  “For Him That Hath Borne the Battle . . .”  The VA’s motto is not only inscribed outside its headquarters here in Washington, D.C., but it also is widely publicized elsewhere.  The inconsistency between the VA’s motto and the positions or actions it adopts in court in cases brought by veterans is steeped in irony.  Instead of seeking to extol the contributions made by veterans and recognize veterans’ rights, in my experience the opposite has been true.  For example, the VA argues that disabled veterans do not possess an enforceable “entitlement” to any medical care, that all veterans’ benefits are “mere gratuities,” that the Secretary has total discretion whether or not to provide medical care, that veterans lack a 5th Amendment property interest in the receipt of disability or death compensation, or that the VA is insulated from court challenges by sovereign immunity, the outdated doctrine that “The King Can Do No Wrong.”  Given its stated mission, it is telling that the VA actually labors to urge courts to minimize or restrict the scope of veterans’ rights.

2. Perpetuation of Myths:  A series of characterizations about the adjudication process have received wide circulation for many years.  For example, Congress has frequently been told that the VA process is “non-adversarial,” that lawyers are unnecessary, and that the VA’s procedures are “informal.”  In my opinion, these characterizations have always been myths, but they are even more mythical in today’s world.  The Federal Circuit itself has recognized that the claims process has become adversarial.  See Bailey v. West, 160 F.3d 1360, 1365 (Fed. Cir. 1998) (“[S]ince the [VJRA] . . . it appears that the system has changed from a nonadversarial, ex parte, paternalistic system for adjudicating claims, to ones in which veterans . . . must satisfy formal legal requirements, often without the benefits of legal counsel, before they are entitled to administrative and judicial review.”)  As to informality, all too often it has been an opportunity for the VA to take shortcuts without the veteran’s knowledge or to “streamline,” and by that I mean ignore, the procedural rights of veterans.

3. Absence of Single Assignment of Claims:  One fundamental regional office problem is that the VA does not assign a person or persons to handle a particular veteran’s claim from “cradle to grave.”  Instead, the Service Center Manager (formerly called “Adjudication Officer”) of each office is listed on correspondence, and the actual decision-makers remain anonymous.  Thus, the veteran never has a specific name to contact, and no VA employee builds experience or expertise on a claim.  There also is no accountability and no incentive for the employees to develop and decide the case correctly. 

4. Antiquated Hard Copy System:  Congress should order the VA to scrap its antiquated hard copy claim file system and replace it with an up-to-date database where claim file information can be shared by users at both the VHA and VBA.  The hard copy system leads to delays, lost or misplaced files and enables misconduct to occur without any remedy or detection.  And Congress should force the VA to give a veteran web access to his claim file.

5. Time/Delay, Abandonment of Claims:  Delay has become an endemic feature of the VA adjudication system for decades, raising the venerated principle of jurisprudence that “Justice delayed is justice denied,” as reflected in the following table, prepared in July 2007:

Stage	Time	Source
1)      Initial Decision	196 days*	(Department of Veterans Affairs FY 2006 Performance and Accountability Report (2006) at 213)
2)     BVA Appeal	971 days	BVA Chairman’s Report at 16
3)      CAVC Appeal	1286 days:  120 days (notice of appeal) + 254 days (docketing, briefing) + 912 days (judicial consideration)	38 U.S.C. § 7266;Ct. Vet. App. R. 4(c), 10(a), 10(b), 11(a)(2), 31(a)(1), 31(a)(2), 31(a)(3); Testimony of Robert Chisholm[1]
4)     Federal Circuit	317 days	Review of Federal Circuit docket sheets re veterans’ appeals from CAVC[2]
5)     US Supreme Court	386 days	Review of Supreme Court docket sheets for 2005 term[3]
TOTAL:	3156 days (8.65 years)                          */Accuracy is questionable.

The number of claims pending at regional offices in recent years has accelerated rapidly, and the huge backlog is now reaching crisis proportions, as shown on the graph attached as Exhibit A.  Shockingly, there is no deadline for the VA to act on claims or to prepare documents needed for an appeal such as a “Statement of the Case”; ironically, the only deadlines apply to the veteran, who is often unrepresented.  As a result, veterans frequently trip up at the regional office level, resulting in a summary denial of a claim or appeal as reflected in the high percentage of appeals to the BVA and CAVC that are summarily denied on jurisdictional defect grounds, including failure to comply with time deadlines or legal doctrines such as waiver and subsumption.  The VA benefits from delays because some of the veterans die while their claim is pending, and survivors often do not pursue the claim further, and the VA does not award interest on any retroactive award, which is calculated at the historical rates, not current rates that reflect inflation. 

The claim abandonment rate at the regional office level is also very high, perhaps as high as 99%.  Thus, the appeal system is irrelevant for the vast majority of veterans because their claims never get that far.  In my opinion, many of the abandoned claims likely have at least some merit, and many veterans give up out of frustration.  The VA’s timeliness measures are unreliable because it often manipulates the numbers, e.g., by calculating from the wrong date or by artificially truncating a regional office decision into a number of parts to make the delay numbers look more palatable.  For example, the timeliness of medical care is calculated as the time between a request for an appointment and the date the appointment date is given, not the date the appointment occurs, which may stretch months in the future.  Congress needs to set minimum times for complete action at the regional office level in the absence of which a claim would be provisionally granted.  And it also needs to take a hard look at the BVA and the CAVC, which are experiencing unprecedented delays that only will get worse with time.  See Exh. B.

6. Excessive Remands — The Recycling or “Hamster Wheel” Problem:  If the VA makes a mistake at the regional office level, however egregious, no consequences attach to it.  Instead, the claim is “remanded” and the innocent party — the veteran — has to wait several years for the BVA or CAVC to order the VA to correct the mistake and start all over at the regional office.  Thus, it is the veteran that suffers.  The error rates reflected in the disposition of the appeals of VA regional offices are startlingly high, as reflected on the chart attached as Exhibit B.

7. Incentive Compensation System:  The design of the VA’s incentive compensation system is to give adjudicators a financial incentive to “game” the system at the veteran’s expense.  For example, shredding a medical examination report or another key piece of evidence can make a denial or remand decision easy to write.  The incentive compensation system operates under a “piece work” basis, making it more important to find ways to accomplish a task quickly rather than correctly.  Two BVA attorneys were indicted several years ago for doing exactly this in hundreds or potentially thousands of cases, and both plead guilty (Jill Rygwalski and Lawrence Gottfried).  The VA must do more to detect and correct internal abuses that have plagued the agency for many years.  I would recommend that incentive compensation for adjudicators and caregivers be primarily based on the results of veteran satisfaction surveys.

8. Need for Veterans Civil Rights Legislation — a “Veterans Bill of Rights:”  The veteran is procedurally handicapped at the regional office level by statutory or regulatory restrictions on his or her civil and procedural rights.  Unlike all other citizens, the veteran cannot retain a lawyer at his own expense, leaving him or her vulnerable to sharp practices, procedural missteps or abandonment.  The veteran cannot subpoena any VA employees to testify (e.g., the VA’s own doctor who concluded he was disabled or the anonymous medical person on the adjudication side who says he is not), and the veteran cannot subpoena documents or other witnesses to testify at a hearing (in most cases).  Our veterans deserve more than a watered-down version of mass justice.  The regional office stage is crucial because that is where the record is developed and upon which the appeal depends.  I also believe that it was a serious error for Congress to set up an Article I court to hear veterans appeals, the limited powers of which play a key role in circumscribing veterans’ civil rights.  It is time for Congress to restore the civil rights of veterans by passing a veterans’ Bill of Rights.  See Exh. C.

9. Remedies for Denial of Health Care:  One of the greatest weaknesses in the veterans’ benefits system at the regional level is that no meaningful or timely remedies exist for a veteran who is denied health care — no form, no established procedure.  Instead, the veteran’s complaint is handled under an informal VHA “directive” that does not have the force of law.  Thus, everything is left to fiat, and the veterans has no enforceable rights and no timely recourse.  The delays inherent in the informal procedure also make it ineffective.  This is contributing to the suicide epidemic amongst returning OIF/OEF veterans, amongst other frustrations that veteran’s experience.

10. Inability of Veterans Court to Enforce its Decisions at the Regional Office Level/Need for Expansion of Powers of Veterans Court:  One of the most serious defects in the VA system is the CAVC’s inability to force regional offices to obey the rule of law.  As former Chief Judge Frank Nebeker of the CAVC pointed out in his “State of the Court” speeches, the CAVC’s inability to force the regional offices to follow its decisions means that the regional offices can violate the CAVC’s decisions with impunity.  The CAVC also needs to be given the power to issue injunctions against the VA and to order relief under the Declaratory Judgments Act.  In addition, the Court should be ordered to adopt a class action procedure whereby relief can be extended beyond the individual veteran to encompass similarly situated veterans.  Finally, the lack of discovery at any stage of the adjudication process has to be addressed, as it hampers veterans’ ability to develop facts to support a claim and/or to challenge adverse evidence, and prevents the veteran from discovering misconduct.

11. The Unofficial Regulation Problem:  For many years the VA has adopted rules by way of “fast letters,” directives or other unofficial means on important issues that in effect may dictate the result in an individual case or entire category of cases.  Put differently, these unofficial rules prescribe substantive standards which properly should have been the subject of rulemaking, and an opportunity for judicial review.  This practice completely circumvents the judicial review process set up by Congress.  Most recently, the VA has set up a special review procedure at the Central Office for “extraordinary awards” made by regional offices that involves extra layers of review and delay and which discourages adjudicators from making retroactive awards.  History is rife with similar examples, such as the “second signature” requirement for PTSD grants (but not denials), the directive not to infer claims based upon individual unemployability, the “courtesy sign-off” system which defeated the whole purpose of having a three-member decision-making team, and a host of others.

12. Absence of Guaranteed VA Budget and Chronic Underfunding:  The VA has been chronically underfunded for years.  Pentagon Undersecretary for Personnel and Readiness David Chu’s interview in the Wall Street Journal on Jan. 25, 2005 is very revealing as to what has been driving the VA budget constriction — a desire to spend more money on armaments and less money on personnel.  The VA’s chronic underfunding creates a compulsion to ration health care and disability payments, and contributes to lengthy delays as well as to the hiring of marginally qualified workers or medical professionals.

13. Upgrade Quality of Personnel and Leadership:  The VA needs to upgrade the quality of its hiring.  My understanding is that many VA rating specialists have only a high school education and lack any medical training — meaning that unqualified persons are deciding the fates of our veterans.  This may help explain the high error rate and the great frustration felt by our veterans.  At the same time, reports have continued to surface about the VA’s use of unlicensed or unqualified medical personal to treat veterans.  The VA’s management problems are immense and so deeply entrenched that they warrant the hiring of a capable crisis management or turnaround executive to either head the agency or recommend how to address the huge problems that it faces.  Sinecures or political appointments do no one any good.

3. Conclusion.

One litmus test for the VA’s performance that is within the experience of each of you is the frequency with which you receive complaints from your constituents.  If the number of phone calls and e-mails I receive from veterans is any indication, the dissatisfaction levels are very high.  I leave you with one final quote from Marlow v. West, and ask you to consider whether this is the type of experience you want to subject our veterans to:

Although the dispositive law is all too clear, we are constrained to comment on Mrs. Marlow's twelve-year effort to get her veteran father's full benefits before he died.  The record is replete with examples of VA’s disingenuous refusal to acknowledge the specific nature of the claim for benefits under section 1114(o) and to deny what is manifestly obvious in the record and was clearly articulated in Mrs. Marlow’s communications to VA.  See, e.g., R. at 38-42, 182-202.  VA ultimately corrected Mr. Mokal’s ratings from the time of his discharge, but only after it was too late, as a matter of law, to pay him.  R. at 336-38.  This is a case that gives credence to those who don’t believe that VA is committed to the spirit expressed in the words of General Omar Bradley, the Administrator of Veterans’ Affairs from 1945 to 1947:  “We are dealing with veterans, not procedures; with their problems, not ours.”

Marlow v. West, Decision No. 98-113 (CAVC 1999).

Exhibit A

Exhibit B

Exhibit C
THE VETERANS BILL OF RIGHTS 

Preamble:  It is the intent of Congress to honor the service and personal sacrifices of veterans and their families by ensuring that they have fair and timely access to all the benefits to which they are entitled, including death and disability compensation, medical care, educational assistance, job training, housing and pensions (“VA Benefits”).  To this end,

1. Congress recognizes that all veterans have and have always had a Fifth Amendment property interest in the receipt of all VA Benefits. 
2. Veterans shall have an unfettered access to retain attorneys at their own expense, and the Fee Prohibition in 38 U.S.C. § 5904(c)(l) shall be abolished.
3. Veterans should have full rights to judicial review in Article III courts, and the Court of Appeals for Veterans Claims should be abolished, with a transition plan for implementation.
4. Veterans shall have the right to subpoena documents or records from all federal agencies, and all federal agencies shall treat veterans’ document or record requests expeditiously and shall produce all responsive documents within 60 days.
5. Veterans shall have the right to call any VA employees as witnesses at any regional office hearings related to veterans’ benefits, including treating physicians or other medical personnel and anyone else who has made any determination in connection with a claim.
6. Congress shall take all necessary measures to insure that the VA delivers on its commitments to provide health care to veterans, and the VA’s practice of denying care to veterans it classifies as having a low priority is disapproved.
7. The VA shall adopt remedies and procedures to timely address cases of alleged denial of or unreasonable delays in providing health care, including notice, an opportunity to call witnesses, and a hearing to any veteran contesting such denial, as well as an expedited procedure in cases of emergency.
8. The VA shall award interest at the federal rate on all retroactive awards of any form of death or disability compensation or pension.
9. Congress shall guarantee and appropriate all funds necessary to provide all veterans benefits in accordance with the VA’s budgets.

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[1] Past-President of National Organization of Veterans Advocates (Robert V. Chisholm, Statement Before the House Subcommittee on Disability Assistance and Memorial Affairs of the House Committee on Veterans’ Affairs (May 22, 2007)).

[2] Derived from hand review of all veteran appeals in Federal Circuit from October 1, 2005 to September 30, 2006 that resulted in decisions on the merits. 

[3] Derived from hand review of all signed Supreme Court decisions issued in the 2005 Term.