VA Testimony of Joseph Thompson before Congress on June 10, 1999

United States Department of Veterans Affairs

STATEMENT OF
JOSEPH THOMPSON
UNDER SECRETARY FOR BENEFITS
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE
HOUSE COMMITTEE ON VETERANS' AFFAIRS
SUBCOMMITTEE ON BENEFITS

June 10, 1999

Mr. Chairman and Members of the Subcommittee, I am pleased to be here this morning to provide the views of the Department of Veterans Affairs (VA) on several bills that affect important programs for veterans and their dependents or survivors. Today’s agenda includes the following bills: H.R. 1765 (compensation cost-of-living adjustment); H.R. 605 (retirement for judges of the U.S. Court of Appeals for Veterans Claims (CAVC); H.R. 690 (presumptive service connection for bronchiolo-alveolar carcinoma suffered by a radiation-exposed veteran);

H.R. 708 (reinstatement of eligibility for certain benefits for remarried surviving spouses upon the termination of a remarriage by death or divorce);

H.R. 784 (dependency and indemnity compensation (DIC) for the surviving spouses of certain veterans who were former prisoners of war); and

H.R. 1214 (enhanced quality assurance program for the Veterans Benefits Administration). Accompanying me this morning are Ms. Nora Egan, Deputy Under Secretary for Management, and Mr. Bob Epley, Director of the Compensation and Pension Service.

H.R. 1765 – COMPENSATION COST-OF LIVING ADJUSTMENT

Mr. Chairman, the most important bill on today’s agenda is H.R. 1765. This bill would direct the Secretary of Veterans Affairs to increase administratively the rates of compensation for service-disabled veterans and of DIC for the survivors of veterans whose deaths are service related, effective December 1, 1999. On May 17, 1999, the Secretary of Veterans Affairs transmitted to Congress draft legislation proposing a cost-of-living adjustment (COLA) for compensation and DIC recipients at the same rate of increase as the COLA that will be provided under current law to veterans’ pension and Social Security recipients. We currently estimate that this year’s Social Security adjustment will be 2.4 percent. We believe this proposed COLA is necessary and appropriate in order to protect the affected benefits from the eroding effects of inflation. Therefore, we strongly support this bill.

We estimate enactment of the COLA would cost $293.3 million during FY 2000 and $4.97 billion over the period FYs 2000 – 2004. This increase is not subject to the pay-as-you-go (PAYGO) requirements of the Omnibus Budget Reconciliation Act of 1990 (OBRA).

H.R. 605 – IMPROVEMENTS IN COURT OF APPEALS FOR VETERANS CLAIMS RETIREMENT AND STAFFING

H.R. 605 is intended to make improvements relating to the judicial staffing of the U.S. Court of Appeals for Veterans Claims.

We support, in principle, the staggered-retirement authority proposed in section 7 of the bill, although we defer to the Office of Personnel Management regarding the mechanics for accomplishing it. We understand the 15-year terms of six judges of the seven-member court will expire in either 2004 or 2005. It makes sense from our perspective to stagger these judges’ authorized retirements over several years in order to minimize the operational disruptions that could result from their simultaneous departures.

VA also supports the principle that section 3 of the bill embodies which is to authorize the Chief Judge to recall retired judges as necessary to meet caseload demands. The Administration, however, objects to section 6 of the bill. Section 6 would require retired Court judges to forfeit their rights to retired pay for any period, plus one year, during which they represent a client making any veterans’ benefits claim against the United States. The Office of Personnel Management (OPM) recommends that section 6 should not apply to earned retirement benefits under the OPM-administered retirement systems under title 5, United States Code, as current law imposes this harsh penalty on Federal employment retirement beneficiaries only for certain national security-related violations like treason and sabotage and for spousal homicide. In addition, we understand that the Office of Government Ethics (OGE) believes that this provision is directed at controlling post-employment conduct and, as such, is not consistent with Executive branch post-employment policies, nor is it generally based upon Government ethics principles. Consequently, based upon the concerns of OPM and OGE, the Administration suggests that section 6 be stricken from the bill.

H.R. 690 – PRESUMPTION OF SERVICE CONNECTION FOR BRONCHIOLO - ALVEOLAR CARCINOMA FOR RADIATION-EXPOSED VETERANS

H.R. 690 would amend section 1112(c) of title 38, United States Code, to add bronchiolo-alveolar carcinoma to the list of diseases presumed to be service connected if suffered by a radiation-exposed veteran. VA opposes this bill. VA has never advocated presumptions of service connection for radiation-related claims. The extent of exposure to ionizing radiation experienced by atomic test participants and Hiroshima/Nagasaki occupation forces has been thoroughly studied, and the study results peer reviewed. The military services have documented that individual exposures were, for the most part, so low as to pose little health risk to most former members -- as dose-responses are currently understood from decades of observations of exposed populations, primarily the Japanese atomic-bomb survivors. We are aware that these data are not without their critics, but if the doses were significantly higher than reported to VA or the health risks much greater from the reported doses, the effects would be observable when sizable populations of exposed veterans have been studied. Yet, studies such as the 1996 Institute of Medicine’s "Mortality of Veteran Participants in the CROSSROADS Nuclear Test," which analyzed causes of death among 40,000 test participants, have not borne this out. The authors of that report determined that exposure to ionizing radiation did not contribute to increased mortality among this sizable study population.

We have concluded that, under the circumstances, blanket presumptions of service connection for cancers suffered by atomic veterans would be vastly over-inclusive, and that the better policy is to afford claimants case-by-case determinations based on the individual merits of their unique cases. If evidence ever comes to light suggesting this approach poses substantial risks of causing injustice to claimants, we would, of course, rethink our position.

H.R. 708 – REINSTATEMENT OF BENEFITS ELIGIBILITY FOR CERTAIN SURVIVING SPOUSES

H.R. 708 would, under certain circumstances, reinstate the eligibility of a veteran’s surviving spouse for certain VA benefits lost under current law upon the surviving spouse’s remarriage. Current 38 U.S.C. § 101(3), which defines the term "surviving spouse" for title 38 purposes, excludes a person who has remarried or (in cases not involving remarriage) has lived with another person and held himself or herself out openly to the public to be such other person’s spouse. However, current law (38 U.S.C. § 103(d)) provides that remarriage of a veteran’s surviving spouse shall not bar benefits to such person as a surviving spouse if the remarriage is void or has been annulled by a court of competent jurisdiction, unless the Secretary determines that the annulment was secured through fraud or collusion.

H.R. 708 would provide that remarriage of a veteran’s surviving spouse shall not bar the provision of specified benefits to the surviving spouse if the remarriage has been terminated by death or divorce, unless the Secretary determines the divorce was secured through fraud or collusion. There would also be no bar to such benefits to a veteran’s surviving spouse if the surviving spouse ceases living with another person and holding himself or herself out openly to the public as that person’s spouse. The first month of reinstated eligibility for the surviving spouse would be the month of the termination of the remarriage in the former case and the month of cessation of living together in the latter case.

These new provisions would apply to a surviving spouse’s eligibility for DIC under 38 U.S.C. § 1311, medical care for veterans’ survivors and dependents under 38 U.S.C. § 1713 (CHAMPVA), educational assistance under 38 U.S.C. ch. 35, and housing loans under 38 U.S.C. ch. 37. (Similar provisions were already enacted with respect to DIC by section 8207 of the Transportation Equity Act for the 21^st Century, Pub. L. No. 105-178, § 8207, 112 Stat. 107, 495 (1998).) We note, however, that a surviving spouse’s eligibility for educational assistance, even if reinstated under the provisions of H.R. 708, would still be subject to the limitation periods provided by 38 U.S.C. § 3512.

By authorizing reinstatement of DIC for these survivors, Congress last year determined that the Government’s special responsibility toward them resumes upon termination of their subsequent remarriages. Given that policy, we see no reason why other service-connected-death benefits available to surviving spouses should be denied them.

Our preliminary estimates indicate that providing these benefits to those survivors would cost $24 - 34 million over the period FYs 2000-2004, of which $300,000 is subject to PAYGO requirements and would require offsets. Since the CHAMPVA benefits would have to be provided within discretionary resources, VA would have to make trade-offs between provision of these benefits and other medical care programs during a time of limited resources.

H.R. 784 – DIC FOR SURVIVING SPOUSES OF CERTAIN FORMER PRISONERS OF WAR

H.R. 784 would amend 38 U.S.C. § 1318(b) to authorize the payment

of DIC to the surviving spouses of veterans dying after September 30, 1999, who were former prisoners of war, who were rated totally disabled for service-connected disability at the time of death, and who had been diagnosed as having a disease specified in 38 U.S.C. § 1112(b), which lists diseases that may be service connected on a presumptive basis when becoming manifest to a degree of disability of ten percent or more in a former prisoner of war.

The law currently provides for special presumptions in law and priority health-care eligibility for former prisoners of war in recognition of the unique hardships and privations they have endured. Most with 100% disabilities due to service-related injuries or diseases will die of those ailments, and their surviving spouses will qualify for DIC on that basis. By virtue of all they have endured for their Nation, the relatively few others with 100% disabilities are entitled to the assurance that, should their deaths be ruled nonservice-connected, their survivors will nevertheless be provided for. We thus support enactment of

H.R. 784.

Our preliminary estimates indicate that the one-year benefit cost associated with the enactment of H.R. 784 would be $764,769 for Fiscal Year 2000, and the cumulative benefit cost through Fiscal Year 2004 would be just over $10 million. This bill is subject to the PAYGO requirements of OBRA. We do not currently have offsets within other VA programs to pay for these provisions, in accordance with PAYGO rules.

H.R. 1214 – QUALITY ASSURANCE PROGRAM FOR VBA PROGRAM ELEMENTS

H.R. 1214 would require VA to carry out a quality assurance program in the Veterans Benefits Administration (VBA), either through a single quality assurance division in VBA or through separate quality assurance entities for each of VBA’s principal organizational elements. The bill would require the Under Secretary for Benefits, acting through the quality assurance "entities," to "perform and oversee" ongoing quality reviews of each principal organizational element’s functions.

The Secretary would be required to ensure two things with respect to the quality assurance program. First, the establishment and operation of any quality assurance "entity" must meet generally applicable governmental standards for independence and internal controls for the performance of quality reviews of Government performance and results. Second, the number of full-time VBA employees assigned to quality assurance functions under the bill’s provisions must be adequate to perform those functions.

H.R. 1214 would also require the Secretary to include in the annual report to Congress required by 38 U.S.C. § 529, a report on the quality assurance activities carried out under the bill’s provisions. Each such report would be required to include an appraisal of the quality of services provided by VBA, including the number of decisions reviewed, a summary of the findings on the decisions reviewed, the number of full-time equivalent employees assigned to quality assurance in each division or entity, specific documentation of compliance with the standards for independence and internal control for the performance of quality reviews, and actions taken to improve the quality of services provided and the results obtained. Each report would also be required to include information about the accuracy of decisions, including trends in that information.

The ultimate objective of H.R. 1214 appears to be to improve the quality of VBA’s service to veterans by improving the quality and accuracy of claim adjudications. Although we fully support this objective, we believe that the enactment of H.R. 1214 is unnecessary to achieve it. We believe that this objective can be achieved through quality control programs already extant in each of VBA’s principal organizational elements.

In October 1988, the Compensation and Pension (C&P) Service implemented a review process called the Systematic Technical Accuracy Review (STAR) program, which includes checks and balances to ensure objectivity of review. Reviews under this program are conducted by individuals recruited from C&P program staff based on their program experience and demonstrated expertise in the area being reviewed. From the review results, we identify error patterns and focus training where it is needed most.

A "feedback loop" promotes consistent, incremental, and continuous improvement in the quality of claims processing. Reviewers thoroughly write up cases to document errors and show what action would have been correct. The case write-ups are sent to the regional office where the case originated, where typically the errors and corrections are shown to the employee who made the errors. STAR staff issues periodic reports summarizing findings and trends, discussing examples of problems, and instructing how to address them. The reports are to be issued periodically to all adjudication employees. In addition, STAR staff communicates with training staff to help target training on problem areas.

The Education Service has an effective quality review system, as reflected by a November 1998 report by the Office of Inspector General. The report, entitled "Review of Education Service’s Quality Review System," made no recommendations to improve the system. It found that the Education Service had enhanced its oversight of compliance surveys and had guided Regional Processing Office staff to help them detect and prevent benefit fraud.

VBA’s Loan Guaranty Service has had a statistical quality control program for over thirty years. Regularly, field station supervisors randomly select completed cases and evaluate the work quality based on an established set of requirements. There is a second line of review, also based on random selection. The results of the statistical quality review provide a basis for any necessary corrective action.

The Vocational Rehabilitation and Counseling Service quality assurance program, instituted in fiscal year 1999, is a joint headquarters and field management team program and is supervised by headquarters management. It fosters an outcomes-oriented approach to service delivery and program management.

Finally, VBA’s Insurance Service’s current quality assurance program is used to identify areas where training efforts should be directed. In its Statistical Quality Control program, which covers ten separate entities, the Insurance Program Management staff reviews decisions and actions taken by Insurance Service operating divisions. Although both the operating divisions and Program Management staff are located in Philadelphia, their duties are sufficiently independent to meet governmental standards for program performance audits.

If H.R. 1214 were to require the establishment of quality review entities separate from VBA’s services, it could have several adverse effects. It could fragment accountability for maintaining program integrity by subjecting policy questions to resolution by reviewers who are separate from the affected service, rather than by the service which is responsible for its own program integrity. It could impair our ability to timely address demonstrated training needs. Activities necessary to create review entities separate from VBA services could delay the urgently needed pursuit of improvements. Staffing separate review entities with employees qualified to accurately review decisions would require removing the highest caliber employees from the program offices, where they are needed to better serve veterans.

We estimate that enactment of H.R. 1214 would result in annual costs of $1.5 million based on a need for 14 additional full-time employee equivalents, including nine positions at the GS-12 level and five positions at the GS-13 level. This estimate also includes relocation expenses for four positions.