VA's disability claims backlog pushes 900,000

The Veterans Affairs Department faces a "staggering" backlog of 897,566 disability claims with more than 65 percent pending for more than 125 days, a problem compounded by an error rate of 16 percent, representatives of veterans' services organizations told lawmakers on the House Veterans Affairs Committee on Wednesday.

The department has seen a 48 percent increase in claims since 2008. Officials expect the backlog will grow to 1.2 million claims this year and another 50,000 will accrue in 2013 as veterans of the Afghanistan and Iraq wars flood the system, Veterans Affairs Secretary Eric Shinseki told the Senate Veterans Affairs Committee in March. He vowed to process all claims in fewer than 125 days with a 98 percent accuracy standard by 2015.

Jeffrey Hall, assistant national legislative director for Disabled American Veterans, an advocacy group, told House lawmakers Wednesday that "while the elimination of the backlog will be a welcome milestone, we must remember that eliminating the backlog is not necessarily the same goal as reforming the claims processing system, nor does it guarantee that veterans are better served."

James Wear, assistant director for veterans benefits policy for the group Veterans of Foreign Wars, testified that the high error rate and the poor quality of VA's rating decisions, which determine the financial benefits veterans receive, are a serious problem.

"Quality of decision-making is problematic . . . The national average [error rate] has remained nearly stationary at 16 percent for months," Wear said, adding the Veterans Benefits Administration's Baltimore regional office has the worst claims error rate in the country -- 29 percent, which is a slight improvement over its error rate of 33 percent just a few months ago.

Randall Fisher, the American Legion's service officer for Kentucky, told lawmakers that in order to improve the claims process, VA must make training a priority and hire more veterans whose experience would prove beneficial. Hall said due to budget constraints, VA has cut back on training, conducting it locally rather than using its national training academy.

"We have concerns that this change was made strictly for short-term financial considerations rather than to achieve the long-term goal of reforming the claims processing system," he said.

Rep. Bob Filner, D-Calif., the ranking member on the committee, said, "There's no shortcut of getting around the basics -- of having well-trained employees who are empowered with the right tools and the right systems to get the job done right the first time."

Shinseki promised earlier this month that VA will roll out its paperless Veterans Benefit Management System to 16 regional offices by September, with installation in all 56 regional offices in 2013. Hall said he was concerned budget constraints could impede the national rollout of VBMS, and urged the committee to provide full funding for the system. VA requested $92.3 million for VBMS in 2013, and spent a total of $343.6 million on the system in 2011 and 2012.

Even as it moves to a paperless claims system, Hall said VA still will face older paper claims and it has yet to determine when or how those would be converted to digital files. A majority of claims processed each year are for reopened or appealed claims, which can remain active for decades. "Until all legacy claims are converted to digital data files, VBA could be forced to continue paper processing for decades," Hall said.

Paul Sullivan, managing director for public affairs and veteran outreach at Bergmann & Moore LLC, a law firm based in Bethesda, Md., said veterans service organizations or lawyers representing veterans cannot gain access to VBMS, something he urged the committee to change.

On Monday, VA announced plans to streamline and speed up disability claims processing by segmenting claims so those that can be more easily rated can be moved quickly through the system; more complex claims would be handled by more experienced and skilled employees.

Rep. Jeff Miller, R-Fla., chairman of the House Veterans Affairs Committee, said VA's track record of making changes to its claims processing system has been "substandard." He added that VA needs to ensure that the much touted VBMS system is set up correctly and used efficiently.