STATEMENT OF JOSEPH THOMPSON
UNDER SECRETARY FOR BENEFITS
VETERANS BENEFITS ADMINISTRATION
DEPARTMENT OF VETERANS AFFAIRS
BEFORE THE HOUSE VETERANS AFFAIRS COMMITTEE
SUBCOMMITTEE ON BENEFITS
March 23, 2000
Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to testify today on the concept of well grounded claims and VA’s statutory duty to assist claimants in the VA claim process. My purpose today is to provide you with a chronology of our policy and procedures as they evolved in response to pertinent decisions of the Court of Appeals of Veterans Claims. I will also address our recent proposed rulemaking relevant to these issues. We believe our proposed revision to 38 C.F.R. § 3.159 strikes an appropriate balance between the obligations of claimants who seek VA benefits and the Government they honorably served. I will conclude by summarizing data we have gathered in an attempt to quantify the impact on timeliness and resources which would necessarily accompany any change in law that increases the administrative burden on VA in the claims process.
VA’s Historical Role in Assisting Claimants
Historically, VA has always assumed a policy of assisting claimants in gathering evidence to support their claims for VA benefits. This assistance has included requesting service records, medical records, and other pertinent documents from sources identified by the claimant. VA also has provided medical examinations, when appropriate, to diagnose or evaluate physical and mental conditions. The claims adjudication process inevitably involves some subjective judgment in evaluating the evidence in an individual case. While VA regional offices uniformly requested documentary evidence on virtually all claims, the extent to which a claim was more fully developed to include a VA examination, at times, differed among VA’s regional offices depending on the subjective determination of the claims examiner that a particular claim was not factually plausible. In such cases, often involving claims filed many years after discharge, a claimant was sometimes requested to provide additional information before an examination was scheduled and full development of the claim was undertaken.
It is the role of the Board of Veterans’ Appeals (BVA) to review these claims decisions. Notably, if a claim was denied and appealed to the BVA, development action could begin again upon the remand instructions of the BVA.
This VA claims process underwent increased scrutiny in the late 1970’s and 1980’s by veterans, service organizations, and members of Congress who expressed dissatisfaction with the way some of the regional offices were handling certain sensitive claims, such as those alleging injury due to Agent Orange and radiation exposure. There was a growing belief that veterans would benefit if their claims were subject to judicial review.
This belief led to the enactment of Public Law 100-687, the "Veterans’ Judicial Review Act of 1988." (VJRA) The Act created the United States Court of Appeals for Veterans Claims (CAVC) (formerly named the United States Court of Veterans Appeals) to provide for judicial review of BVA decisions. The Act also amended 38 U.S.C. section 5107(a) to codify matters previously addressed only in VA regulations. The statute was revised to state that it is a claimant’s burden to submit evidence to "well ground" a claim for VA benefits. It also codified VA’s duty to assist a claimant in developing facts pertinent to a claim:
Except when otherwise provided by the Secretary in accordance with the provisions of this title, a person who submits a claim for benefits under a law administered by the Secretary shall have the burden of submitting evidence sufficient to justify a belief by a fair and impartial individual that the claim is well grounded. The Secretary shall assist such a claimant in developing the facts pertinent to the claim."
The concepts of "well-grounded claims" and VA’s "duty to assist" derive from long-standing VA regulations in 38 C.F.R. §§ 3.102 and 3.103(a), respectively. These concepts were not expressly linked to one another in those regulations but the VJRA codified them and placed them together in successive sentences in what is now 38 U.S.C. section 5107(a). In interpreting section 5107(a), courts have found the sequence of those two sentences to be significant. As I will more fully explain, the CAVC, since 1990, has issued several decisions holding that the first sentence of section 5107(a) requires a claimant to submit evidence that his or her claim is well grounded, and that VA’s duty to assist "such a claimant" under the second sentence of the statute does not arise until the claimant has satisfied his or her initial burden. The United States Court of Appeals for the Federal Circuit affirmed that holding in Epps v. Gober, 126 F.3d 1464, 1468-69 (Fed. Cir. 1997). These decisions have directly affected the VA claims process.
Judicial expansion of the concept of a "well-grounded claim"
An understanding of the CAVC’s development of the well grounded claim concept is pivotal to understanding VA’s current policy on this issue.
Soon after its establishment, the CAVC began to issue decisions construing the meaning of section 5107, particularly the undefined term, "well grounded" claim. Gilbert v. Derwinski, 1 Vet.App. 49 (1990) was the court’s first notable decision on this issue. In Gilbert, the court held that the provisions of section 5107 establish "chronological obligations" in the VA claims process: the initial obligation rests with the claimant to submit a well grounded claim, which the court defined as a "facially valid" one. Once a claimant meets this initial statutory burden, VA is then obligated to "assist such a claimant in developing the facts pertinent to the claim." Id. at 55.
The court refined the concept of a "well grounded claim" that same year in Murphy v. Derwinski, 1 Vet.App. 78, 81 (1990):
Because a well grounded claim is neither defined by the statute nor the legislative history, it must be given a common sense construction. A well grounded claim is a plausible claim, one which is meritorious on its own or capable of substantiation. Such a claim need not be conclusive but only possible to satisfy the initial burden of section 5107(a)
The well grounded threshold is "rather low," and is "the only requirement needed to obtain the Secretary’s assistance." White v. Derwinski, 1 Vet.App. 519, 521 (1991). It is an objective threshold "which explores the likelihood of prevailing on the claim." The Court has held that while the evidence to make a claim well grounded need not be conclusive, the statutory scheme "requires more than just an allegation; a claimant must submit supporting evidence" that a claim is plausible. Tirpak v. Derwinski, 2 Vet.App. 609, 610 (1992).
In light of these decisions, VA Compensation and Pension Service revised provisions in its Adjudication Procedures Manual (M21-1, Part III, ¶1.03) to reflect the Court’s emphasis that it is the statutory burden of the claimant to submit evidence establishing entitlement to VA benefits, and restating the Murphy Court’s definition of a well grounded claim as a "plausible claim, meritorious on its own or capable of substantiation" -- a claim which need not be conclusive, only possible. Consistent with VA’s history of providing assistance to claimants, the procedures manual was also revised to state that upon the request of a claimant, VA should "make reasonable efforts to assist claimants in securing public documents and other evidence." No distinction was made between efforts required to make a claim well grounded versus development of a claim on its merits.
The concept of the well-grounded claim continued to evolve in King v. Brown, 5 Vet.App. 19 (1993), in which the Court equated the well grounded requirement to the well-pleaded complaint requirement applicable to civil actions under Federal Rule of Civil Procedure 8(a)(2). This civil rule requires a clear statement of the claim, the factual elements of which are presumed to be true, establishing potential entitlement to the relief sought. The Court explained that a claimant in the VA benefits system must, likewise, submit some evidence to establish potential entitlement to benefits, and that for the purpose of well grounding a claim, the evidence submitted will also be presumed to be true. This presumption includes statements submitted by the veteran which do not require independent verification for the well grounded claim requirement.
The presumption of truth, however, does not apply to statements asserting facts beyond the competence of the person making the assertion. Medical testimony offered by a lay person, for example, falls into this category. Accordingly, the Court concluded, "Where the determinative issue involves medical causation or a medical diagnosis, competent medical evidence to the effect that the claim is ‘plausible’ or ‘possible’ is required." Grottveit v. Brown, 5 Vet.App. 91, 93 (1993). Thus, as the result of Court decisions, the well grounded claim process grew to require the submission of medical evidence from a claimant who was seeking benefits for a medical condition claimed to be related to service. The lack of such medical evidence in the claim before it led the Grottveit Court to conclude that the claim "was not one on which relief could be granted; there was no claim to adjudicate on the merits."
The CAVC has also explained that statutory and regulatory presumptions, such as those relating to chronic diseases, combat veterans, or exposure to herbicides, would lessen the evidentiary showing necessary to make a claim well grounded.
The CAVC also issued decisions which addressed the practical effect of the concept of well grounded claims on the overall VA claims process. In Grivois v. Brown, 6 Vet.App. 136 (1994) CAVC stated that it is the duty of those adjudicators who first review a claim to apply the well grounded test "for it is their duty to avoid adjudicating implausible claims at the expense of delaying well-grounded ones." The CAVC noted that the statutory scheme recognizes that not all claims filed for VA benefits will be meritorious, and that section 5107(a) "reflects a policy that implausible claims should not consume the limited resources of the VA and force into even greater backlog and delay" those claims which are well grounded. The Court reproached VA for developing the not well-grounded claim before it: "We, thus, have a record which, despite the initial failure of appellant to present evidence of medical causality as to the claimed hearing loss and ‘nervous condition,’ reflects indulgence of that failure and a voluntary effort by the Secretary to supply the needed evidence." More significantly, the Court warned that "while no duty to assist arises absent a well-grounded claim, if the Secretary, as a matter of policy, volunteers assistance to establish well groundedness, grave questions of due process can arise if there is apparent disparate treatment between claimants in this regard." Id. at 140.
VA’s response to this case was to revise its procedures manual in January 1994 to acknowledge that although VA is not required to carry a not well grounded claim to full adjudication, its policy was to "liberally interpret" the term "well grounded." It instructed its field offices to fully develop claims before deciding whether they are well grounded, including requesting service medical records, VA and other government records, and private records identified by the claimant as relevant to the claim. VA’s policy was based on its understanding that although it may not do less than the statute requires, it was not prohibited from doing more than the statute requires.
In 1995, CAVC defined the specific requirements which would well ground a claim for service connection. In Caluza v. Brown 7 Vet.App. 498, 506 (1995), aff’d, 78 F.3d 604 (Fed.Cir. 1996), the court held that a well grounded claim for service connection requires: (1) a medical diagnosis of a current disability; (2) medical or lay evidence of in-service occurrence or aggravation of a disease or injury; and (3) medical evidence of a nexus or link between an in-service injury or disease and the current disability, and the United States Court of Appeals for the Federal Circuit affirmed that holding in Epps v. Gober, 126 F.3d 1464 (Fed.Cir. 1997), cert. denied, 118 S.Ct. 2348 (1998). These three elements correspond to the facts a claimant must show in order to establish entitlement to compensation under 38 U.S.C. § 1110.
Nonetheless, believing that the statute did not prohibit VA from volunteering assistance, the Director of the Compensation and Pension Service issued a policy letter to VA field offices in May 1996, summarizing the court decisions on well grounded claims, and reiterating that it was the policy of the Service to delay a decision on well groundedness until a claim had been fully developed.
We revised our procedures manual in August 1996 to reflect that policy, directing VA regional offices to ensure that all development was undertaken on claims which were "plausible on a factual basis." (M21-1, Part VI, ¶2.08). We continued to provide medical examinations of claimants and sought evidence to well ground the claim through the VA exam process. BVA, as well, remanded claims to obtain "nexus opinion" medical evidence, sometimes ordering VA examinations for this purpose when such evidence was required to well ground a claim.
Morton v. West
The decisions of CAVC predictably made the VA claims process more legalistic, and veterans’ representatives continually mounted challenges to the Court’s interpretation of the scope and timing of VA’s duty to assist and the well grounded claim requirement. Reminded of VA’s historical willingness to help claimants develop evidence on their claims, veterans’ advocates argued that VA’s "full development" manual provisions were actually substantive rules, conferring enforceable rights on claimants to full development of claims, even if they were not well grounded under the Court’s definition.
This issue was raised by the claimants in Carbino v. Gober, 10 Vet.App. 507 (1997) where CAVC noted that VA’s manual provisions "do not appear to be particularly well thought out regarding the status of a claimant and the duty to assist," but declined to examine the issue based on the belief that VA should first address it. Internally, VBA management extensively discussed these issues, reflecting on the increasing workload in its regional offices, and the increasing delay in processing times for all claims due to the full development of those claims which were not well grounded. The wisdom of using VBA funds and VHA resources on claims that have not met the evidence thresholds of section 5107(a) was also an issue, as was the Court’s questioning of VA’s authority to deviate from the duties in this statute in the order in which they are laid out. The fairness of VA’s current development and examination policies was placed squarely at issue.
VA was forced to confront these issues directly with CAVC’s decision in Morton v. West, 12 Vet.App. 477 (1999)decided on July 14, 1999. In Morton, the claimant argued that VA had created a blanket exception to the well-grounded claim requirement of section 5107(a). Citing VA’s internal procedures manual, the claimant argued that VA had obligated itself to fully develop all claims, regardless of whether they were well grounded. He asserted that those manual provisions were valid exercises of the Secretary’s authority to create exceptions under the "[e]xcept when otherwise provided" clause in the first sentence of section 5107(a).
The CAVC rejected those assertions for two reasons. First, it concluded that the manual provisions at issue were merely internal statements of policy or interpretation which could not be enforced against VA. Second, CAVC concluded that, if the manual provisions were interpreted as establishing a blanket exception to the statute, such an interpretation would be inconsistent with section 5107(a). Additionally, the Court reiterated its prior holding that section 5107 reflects a Congressional policy that implausible claims should not consume VA’s limited resources and force well-grounded claims into ever greater backlog and delay. The Court also criticized VA’s May 1996 policy directive to fully develop all claims before determining whether they are well grounded, observing that this directive was issued four months after the court’s decision in Grivois and was a blanket exception to 38 U.S.C. section 5107(a) and was also inconsistent with the statute. Morton, which is currently on appeal to the Federal Circuit, required the Compensation and Pension Service to respond with a formal change in its policy.
VA policy after Morton
In August 1999, I issued a letter informing each VA regional office that a number of provisions of our procedural manual were being rescinded as the result of the Morton decision. Thereafter, three veterans’ service organizations filed petitions in the Federal Circuit challenging that letter. The petitioners argue that, despite the CAVC’s finding that the manual provisions are invalid, VA could not rescind those provisions without adhering to notice-and-comment rulemaking procedures of the Administrative Procedures Act. That case is currently being stayed pending resolution of the Morton appeal.
The August 1999 Letter instructed our regional offices to follow this interim policy implementing the Morton decision pending proposed rulemaking:
(1) Review all claims, both pending and future, to determine whether they are well grounded prior to beginning development; (2) if a claim is not well grounded, send the claimant a letter informing him or her of the evidence required to well ground the claim, and provide 30 days for the submission of this evidence; (3) if not already of record, obtain any pertinent medical or service records in VA custody and review them to determine if they well ground the claim; (4) refrain from developing for any private treatment records and other non-VA documents or from scheduling a VA examination on claims which are not well grounded; and (5) at the end of 30 days, review any evidence of record to determine whether the claim is well grounded. If it is, develop further evidence to decide the merits of the claim. If it is not, deny it as not well grounded.
This policy represents a fundamental shift in the VA claims process. Based on our own review of regional office procedures as well as feedback we received from some service organizations, we believe that some regional offices have struggled to apply it in individual cases. We have sought to clarify any misunderstanding on the part of our regional offices as to how to implement the Morton decision by informal training sessions, with more formal training on claims development procedures once this policy is formalized by regulation.
Proposed Revision to 38 C.F.R. §3.159
On December 2, 1999, VA published a notice of proposed rulemaking for public comment concerning well-grounded claims and the duty to assist in volume 64 of the Federal Register at pages 67,528 to 67,534. Although the Morton decision indicates that VA cannot establish a blanket exception to section 5107(a) which would wholly swallow the statutory rule, VA does have the authority to establish reasonable, limited exceptions to the well-grounded claim requirement. Therefore, consistent with currently controlling judicial precedents, the proposed rule includes important exceptions to a general rule that claimants must present plausible claims before the Department’s duty to assist arises.
Our proposed rules would establish two types of exceptions. First, they would specify certain types of assistance which VA would provide in all claims, before it could deny a claim as not well grounded. Specifically, VA would obtain a veteran’s service medical records and any identified VA medical records in all cases. Further, if VA determines that a claim is not well grounded, it would be required to inform the claimant of the types of evidence necessary to make the claim well grounded and afford the claimant an opportunity to submit such evidence before rendering a final decision on the claim.
Second, the proposed rules would entirely exempt certain groups of claimants from the threshold requirement of submitting a well-grounded claim. Specifically VA would assist claimants, even if their claims are not well grounded, if (1) the claimant is seeking disability compensation and the claim was filed within one year of separation from service; (2) the claimant has been denied medical treatment within the past 12 months due to lack of funds; (3) the claimant is terminally ill; (4) the claimant submits competent evidence that he or she engaged in combat with the enemy and is experiencing symptoms of post-traumatic stress disorder (PTSD); or (5) the claimant submits competent evidence that he or she was the victim of a sexual assault and is experiencing symptoms of PTSD. We believe that the burden of producing evidence to well ground a claim may be especially onerous for these claimants.
In addition, although not specifically mentioned in the proposed rule, the well grounded claim requirement would not affect the exam requirement for prisoners of war contained in 38 C.F.R. § 3.326, nor would it alter the statutory and regulatory presumptions already in place which may relieve a claimant from having to establish one or more of the well grounded requirements under Caluza v. Brown.
This proposed rule would liberalize the policy implemented in August 1999 as a result of the Morton decision. While remaining within the confines of current law, the proposed rule would strike an appropriate balance between the obligations of claimants who seek federal benefits and the Government they honorably served. We hope that with input from the veteran community, we can develop a final rule that is both acceptable to veterans and is administratively feasible.
H.R. 3193 would require VA to assist all claimants for VA benefits in "developing information pertinent to a decision on the claim," and would specify that such assistance must be provided "before a decision on the claim is rendered." H.R. 3193 would also specify that VA’s duty to assist claimants would include the following: (1) requesting information from other Federal agencies as described in 38 U.S.C. § 5106; (2) informing the claimant of the information and evidence needed in order to fully develop the claim; (3) requesting information identified or referenced by the claimant if the claimant has executed a release of information authorizing VA to obtain the information; (4) informing the claimant if VA is unable to obtain pertinent evidence; (5) providing a medical examination for the purpose of determining the current disability of any veteran who is unable to afford medical care as determined under 38 U.S.C. § 1722(a); and (6) any other assistance VA considers necessary and appropriate to assure the proper development of the claim.
If enacted as proposed, H.R. 3193 would have an insignificant effect on entitlement costs. However, VA’s preliminary estimates of administrative costs for this legislation would be $7 million for 174 FTE in Fiscal Year 2000, and a five-year cost of $55 million.
We recommend that the Committee defer action on H.R. 3193 and any other measure concerning the duty to assist until VA has completed its ongoing rulemaking. We recognize that the issue of the proper allocation of responsibility between VA and claimants is one of continuing interest to the veteran community and to Congress, and our proposed rules have generated a broad range of comments and suggestions. We will carefully assess those comments and endeavor in our final rule to reach an accommodation that is acceptable to the veterans’ community and to Congress. Accordingly, we recommend that the Committee defer action on this issue until the ongoing rulemaking has been completed.
Effect on Claims Processing
Should Congress determine that the outcome of VA’s proposed rulemaking is unacceptable, and shift more of the evidentiary burden onto the Department as proposed in H.R. 3193, we ask that you consider the resource and timeliness issues which would necessarily accompany such a change in law.
In an effort to more fully understand the effect of developing not well grounded claims on the overall timeliness of claims processing, the Compensation and Pension Service conducted a nationwide sampling of claims in 1998. The purpose of this study was not only to learn if timeliness was adversely impacted by developing not well grounded claims, but also to gather statistics on whether full development of such claims resulted in eventual grants of benefits.
We reviewed a sample of 281 claim files which included original compensation, pension, and DIC claims, and supplemental claims such as claims for increased service connected compensation. Our review found that well grounded was not an issue in 34.2% of the claims which comprised appeals, claims for increased evaluation, Gulf War claims undergoing special handling, and other claims such as those raising competency and helpless child issues. It was also not an issue in 4.3% of the claims because the claims were statutorily barred for reasons such as the claimant’s status.
Well groundedness was a consideration in the remaining claims, 173 claims or 61.5% of the total sample. Over half of these were original claims for service connection. These 173 claims contained 450 separate issues.
Fifty seven of these claims or 32.9% of them were found to be well grounded upon initial consideration, under the criteria established by the Court in Caluza v. Brown. The average processing time for these well grounded claims was 132 days.
One hundred sixteen or 67% of the 173 claims were initially not well grounded. Nine of the 116 claims were denied as not well grounded without further development, while the remaining 107 claims or about 62% were developed to obtain evidence to well ground the claim. Most of these claims were fully developed in accordance with the former instructions in the VA Adjudication Procedures Manual, M21-1. However, only 16 of the 107 claims or roughly 15% of them, resulted in a grant of benefits, despite this development effort. Thirty-nine of them, or 36.4%, were still not well grounded even after we developed them, and 17 of them, or 14% were denied on the merits. Thirty-five of the claims contained issues some of which were denied and some were granted. More disconcerting is the fact that the average processing time for claims which were initially not well grounded but developed was approximately 200 days, about two months longer than the average processing time for initially well grounded claims.
This study indicated that in claims where well groundedness was an issue, two out of every three claims were not well grounded, and there was a significant amount of time in the claims adjudication process expended to develop them. Because a well-grounded claim is accompanied by evidence sufficient to justify a belief that the claim is plausible, including medical evidence, less development action is normally required.
The extended development time for claims that are not well grounded is caused, in part, by the additional development required; development of claims that are not well grounded routinely generates additional development because the evidence to support such claims is often scant if non-existent, causing multiple requests for this evidence to ensure ourselves that we have exhausted all reasonable attempts to find it. Thus, the least meritorious of the claims take up the most time and action on the part of VA. That represents a considerable expenditure of time and effort which is not only counterproductive, but creates false expectations in the minds of claimants, particularly those who have reported for VA examinations. The net outcome of this process is an overall degradation in the service provided to claimants who have submitted claims which are plausible.
VA has also estimated the exam costs which would be associated if full development of all original claims required VA examinations to obtain evidence of a claimant’s current condition or medical evidence of a nexus between the current condition and the claimed in-service event. VA projects that if we are required to examine the claimants in all of the original claims we project we will receive over the next five years, 949,030 claims, exam costs provided by VHA, alone, would be approximately $36 million per year. The cost of the examinations for these claims would eventually decrease as claimants understand and cooperate in the process of well grounding claims, and VA examinations are appropriately scheduled for these well grounded claims.
We have also estimated that full development of all claims regardless of whether they are well grounded would require 174 more full time employees to meet the increased development needs.
In summary, we believe that VA’s proposed regulation represents a reasonable sharing of responsibility in the claims process between the claimant and VA. The proposed regulation reflects the conclusion of the Veterans’ Claims Adjudication Commission, with which VA agrees, that a policy of providing unconditional assistance to all claimants would be a waste of time and resources.
However, we believe that claims that are not well grounded also merit our attention. We believe that VA should advise such claimants of the types of evidence they must submit in order to make their claims plausible under the Courts’ well grounded standard, so that those claims can be processed as timely and completely as claims which are well grounded. Realizing that there are exceptions to every general rule, VA’s proposed rulemaking incorporates reasonable exceptions to the well grounded claim requirement which address the primary concerns of the veteran community that there are claimants for whom the well grounded claim requirement would be especially onerous.