DEPUTY UNDER SECRETARY FOR BENEFITS
HOUSE COMMITTEE ON VETERANS' AFFAIRS
SUBCOMMITTEES ON DISABILITY & MEMORIAL AFFAIRS
OVERSIGHT & INVESTIGATIONS
March 3, 2009
Mr. Chairman and Members of the Committee, I appreciate the opportunity to appear before you today to discuss the critical issue of proper handling of veterans’ claims documents at Department of Veterans Affairs (VA) Regional Offices (ROs), as well as issues involving the proper date of claim for workload and performance tracking. I will also discuss recent changes to month-of-death payment processing.
I am accompanied by Ms. Diana Rubens, Associate Deputy Under Secretary for Field Operations, and Mr. Bradley Mayes, Director of the Compensation and Pension Service.
I would like to begin by outlining the sequence of events surrounding the discovery of some claims and other documents of evidentiary value in the shred bins of some of our ROs and the steps we have taken to address the situation and protect filing dates for veterans and other claimants whose documents may have been improperly shredded.
Audit by the Office of the Inspector General
On August 20, 2008, the VA Office of the Inspector General (OIG) initiated an audit of RO processing of mail that pertains to claims adjudication and general mailroom operations. During the OIG audit, which is still ongoing, the OIG examined the mail-handling activities and triage areas in four ROs: Detroit, St. Louis, Waco, and St. Petersburg. While on-site in Detroit in September, the OIG audit team identified claims-related mail and original supporting documents that were placed in “shred bins” at the ROs, an action that was clearly unauthorized and inappropriate. The OIG informed local officials of the documents and asked for clarification.
On October 14, 2008, the OIG briefed VA leadership on its preliminary findings concerning the improper shredding of claims-related mail and documents at the three ROs because they had not completed work at St. Petersburg. This was the OIG’s first contact with VA that specifically dealt with the shredding of claims-related mail and documents. In its review of these four offices, the OIG found 45 documents in shred bins that, if destroyed, could potentially affect a veteran’s or other claimant’s entitlement to benefits.
Immediate Actions In Response to the OIG Preliminary Report
On the same day Veterans Benefits Administration (VBA) leadership was briefed by the OIG, we immediately ordered all ROs, as well as the Appeals Management Center and the Records Management Center, to cease all shredding activities. All facility directors were instructed to relocate all shred bins and shredding equipment to offices occupied by VBA management officials and to review the contents of all shred bins.
The facility directors and their management teams inventoried all claims-related mail or original supporting documents found during this review. This effort identified 474 documents affecting benefit entitlement inappropriately placed in shred bins for disposal. These 474 documents and the 45 documents identified by the OIG were found at 41 of our 57 regional offices and centers, Appeals Management Center, and Records Management Center. No evidentiary documents were found in shred bins at the remaining 17 ROs. RO Directors certified in writing that no additional claims documents or copies of supporting claims documents were found among the materials in their shred bins.
Collectively, the Columbia, St. Louis, and Cleveland ROs were responsible for more than half of the documents found. Employees at two of the three offices were investigated by VA and OIG for mishandling Government documents. As a result of the investigation, an employee was removed from duty at the St. Louis RO on December 8, 2008, and an employee was removed from the Columbia RO on December 12.
All 474 documents found in shred bins were analyzed to determine appropriate action. The documents requiring action were placed under control and processed as a top priority by the RO. As of February 20, 2009, appropriate action on 415 of the 474 documents had been completed. Of the remaining 58 documents, 56 of the associated claims are currently under development and two are ready for decision.
8-Point Plan of Action
In an effort to ensure this situation does not occur again, VBA developed an 8-point plan of action to strengthen our policies and procedures to safeguard veterans’ paper records. In developing this plan, we worked closely with representatives of the six major veterans service organizations and received input from House Committee and Subcommittee staffs, as well as the staff of the Senate Veterans’ Affairs Committee. This action plan implements tighter controls to protect veterans’ applications and claims-related documents and ensures measures are in place to prevent future incidents of employees inappropriately discarding veterans’ paperwork.
1. Records Control Team
VBA created a Records Control Team to revise policies and procedures for the proper handling and shredding of documents. The Team convened the week of October 27, 2008, and provided a draft policy document on November 3, 2008. We continued to refine the policies, after receiving input from veterans service organizations and Congressional staffs through briefings conducted on three occasions. We finalized and implemented the new policies on November 14, 2008.
Even before we finalized our new policies, we provided special training to all VBA employees covering the proper handling and disposal of documents. All ROs certified to their Area Directors that all employees completed the training on November 3, 2008. Additionally, a separate training module on ethics was administered in December 2008 via a national broadcast featuring the Under Secretary for Benefits.
3. Records Management Officers
To strengthen oversight of our records management activities, our new policies establish a Records Management Officer position at every VBA facility. All facility shredding equipment and operations are now under the strict control of the facility Records Management Officer. Division Records Management Officers were also designated (as a collateral-duty assignment) to assist in carrying out the new policies and procedures. Standardized position descriptions for both positions were developed for nationwide implementation.
4. Two-Person Review of Documents to be Shredded
Employees are now directed to date and initial all duplicate claims-related documents that have been identified as requiring shredding. The document or documents (including the claims folder, if necessary to establish the appropriateness of the disposal action) must be forwarded to the employee’s Decision Review Management Officer for approval. This two-person review is required prior to the destruction of any claims-related document. Any documents deemed by the supervisor inappropriate for shredding will be returned to the employee for inclusion in the claims folder. If this occurs, the supervisor will ensure the employee immediately receives additional training.
5. Individual Employee Shredding Receptacles
Every employee has a separate receptacle to contain all papers deemed appropriate for shredding. These receptacles are subject to review by supervisory personnel and the facility Records Management Officer.
6. Systematic Analyses of Operations
All ROs and centers are now required to conduct regular systematic analyses of their records control procedures and activities, including their shredding procedures and controls.
Reviews of records management procedures, including checks of documents identified for shredding, have been integrated into RO oversight visits performed by all Headquarters program offices and area offices. ROs are subject to both announced and unannounced site visits.
8. Certification of Full Implementation Before Shredding Resumption
The moratorium on shredding was lifted on December 31, 2008, after all facility directors certified to their area directors that the new policies have been fully implemented.
Special Temporary Procedures for Missing Documents
We were greatly assisted by the veterans service organizations and Congressional staffs in developing special temporary claims handling procedures for veterans and claimants who assert VA did not process their claims because documents they previously submitted to VA to support a claim for benefits were shredded or otherwise improperly disposed. These special procedures for missing documents were officially released on November 14, 2008. Since November 14, 2008, there have been 335 instances of veterans or beneficiaries contacting VA to inquire about the status of their claims in relation to the shredding of VA documents.
The special procedures consist of three key components:
First, to assist claimants in establishing that an application or other claims document was previously submitted to VA, but was not properly acted upon by VA or retained in the veterans’ claim record, VA will process duplicate claims documents and set effective dates for granted claims as though the claim was received on the date asserted by the claimant. These special temporary procedures cover any missing documents originally submitted by a veteran or other claimant during the 18-month period immediately preceding the date VA ceased all shredding activities, or between April 14, 2007 and October 14, 2008.
Second, under these special procedures, VA will accept claims asserting previous submission of documents between April 14, 2007, and October 14, 2008, for one year (or from November 17, 2008, the date of public notice of temporary special claims handling procedures, to November 17, 2009).
Third, effective dates prior to April 14, 2007, will be established in accordance with the facts and credible corroborating evidence presented by a veteran, and applicable laws and regulations. Claimants asserting that documents filed before April 14, 2007, are missing will be asked to submit any available evidence supporting the previous submission, such as a date-stamped copy of their claim, a dated transmittal or cover sheet from their representative, or confirmation from a deliverer of mail. We will also take steps to determine whether VA possesses any documentation to support the previous submission.
Communicating Our Actions
I extend my sincere appreciation to the Senate and House Committee staffs and to the veterans service organizations for their input and counsel as we developed our action plan. We will need your continued support and that of the veterans service organizations as we work to ensure anyone potentially affected by this situation is assisted in filing a claim under these special procedures. At the time these new procedures were established, we placed information on our website and provided special training to all of our public contact employees. Our RO directors briefed local veterans service organization representatives and Congressional staffs, so that they could appropriately inform their members and constituents and refer anyone affected by this situation needing assistance.
Veterans who are concerned that VA may not have all of their information are being advised to contact VA on our toll-free number, 1-800-827-1000, or to send an inquiry through IRIS.VA.GOV. We electronically track documents for currently pending claims and can verify receipt of documents through our tracking system. If necessary, our representatives will review the veteran’s claims file to verify receipt of applications and supporting evidence.
Electronic Document Retention and Paperless Claims Processing
VBA is working in partnership with the Office of Information Technology to implement the Paperless Delivery of Veterans Benefits Initiative. The primary goal of the initiative is to improve service to veterans by transitioning our business model to be less reliant on the acquisition and storage of paper documents, and we are making good progress. As of August, all claims submitted through the Benefits Delivery at Discharge Program are processed in a paperless environment.
VA has contracted with Electronic Data Systems (EDS) to serve as the Lead Systems Integrator (LSI) for this effort. Fiscal Year 2010 is our target year for release of the initial hardware and software in support of the large-scale expansion of the paperless initiative. The EDS effort is designed to provide enhanced paperless claims processing capabilities across VA.
For example, these enhanced capabilities will allow veterans to submit benefit applications electronically and eliminate the need for VA to print the form for processing – there also exists the potential to submit supporting evidence for claims, further reducing the submission of paper to VA.
We are learning from others who have been successful in integrating paperless technologies. On January 14 and 23, 2009, we visited the Social Security Administration (SSA) and received a demonstration of their imaging capabilities. SSA has been very helpful in sharing information about their business process transformation. We also visited United Services Automobile Association (USAA) Headquarters in San Antonio. USAA’s use of today’s technologies has helped to form our vision of how we need to serve and communicate with today’s veterans. Control over all documentation is imperative, and while we recognize that paperless is not the panacea, the use of technology will allow VA to maintain electronic copies of documents, which cannot be shredded.
Mr. Chairman and members of the committee, you also requested a status on the proper date stamping of documents at ROs. I would first like to address the New York RO and the sequence of events that transpired. I would then like to discuss the actions taken by VBA to conduct a nationwide date-of-claim review.
VBA Site Visit Findings at the New York Regional Office
A C&P site survey team conducted a routine site visit at the New York RO during the week of July 14, 2008. During their visit, it was discovered that 16 of 20 claims had an incorrect date of claim established in the electronic claims tracking program. The New York RO was establishing claims using an unsupported date of claim that was within seven days of the date of claim rather than the actual date of receipt of the claim. As a result, the timeliness data for the New York RO was inaccurate. It is important to note that no veterans were impacted by these actions.
The then-Assistant Director of the RO met with the Under Secretary of Benefits to discuss the findings of the C&P site survey team. Subsequently, C&P staff members conducted an on-site review of a statistically valid sample of 390 rating-related pending claims to assess data integrity at the RO. Of the 390 cases reviewed, 220 had an incorrect date of claim, representing a 56.4 percent error rate.
Actions Taken as a Result of the Findings
The Eastern Area Director convened a group to review claims in other categories, specifically completed rating-related claims in FY 07 and FY 08 and pending non-rating claims. Of the 386 cases reviewed, 22.8 percent had errors in the date of claim established in the electronic claims tracking program. At the same time that the 386 case review was conducted, the Eastern Area Director convened an administrative investigative board (AIB) in the New York RO.
The AIB was tasked to conduct a thorough and comprehensive investigation onsite in New York. The AIB interviewed approximately 35 Veterans Service Center employees and supervisors with knowledge of or involvement in the date-of-claim discrepancies during the week of August 11, 2008. Based on the findings of the AIB, we took appropriate administrative action with six RO leaders involved with the inaccurate claim receipt dates.
Nationwide Date-of-Claim Review
As a result of the findings at the New York RO, the Office of Field Operations and C&P Service conducted a full date-of-claim review. Beginning in November 2008, the C&P Quality Assurance Staff added date-of-claim accuracy reviews to all STAR quality reviews. A comprehensive review of 385 claims from four ROs (St. Louis, Roanoke, Baltimore, and Seattle) was in December 2008.
Concurrent with C&P Service’s review of four ROs, the remaining 53 ROs received a list of 385 rating and non-rating completed claims on December 2, 2008. Each RO was given one week to review each claim and determine if the appropriate date of claim was applied. The purpose of the review was to determine if ROs are using the proper date of claim, and if not, reasons for using an incorrect date of claim. The review also required each RO to determine whether any use of an improper date of claim was to the advantage of the RO.
Measures Taken to Ensure Proper Application of the Date of Claim
The C&P Site Visit Staff will continue to conduct date-of-claim reviews during routine site visits. The OFO has worked with each Area Office to conduct additional unannounced site visits at ROs under their jurisdiction. Unannounced site visits will include a review of a sample of both pending and completed to ensure the integrity of the date of claim. The information documented from both C&P and Area Office site visits is provided to leadership at the RO level, as well as senior leadership in VBA. Based on the findings from on-going date-of-claim reviews, VBA will continue to provide training, guidance and reminders to the field on the importance of the proper date of claim.
The Office of the Inspector General also conducted an audit of date of claim accuracy at ROs. The report, released February 27, 2009, contained three recommendations to improve the accuracy of the dates of claim receipt, including establishing goals for receipt-date accuracy and strengthening controls to provide greater assurance of reliable claims processing times. We concurred with all three recommendations and are taking action to implement the recommendations.
Rebuilding Claims Folders
As long as VBA continues to establish and store paper claims folders, we will be vulnerable to misplacement or misfiling of records, damaged records, and occasionally losing files. VA has longstanding clear and specific guidelines covering lost folders and rebuilding folders. These procedures include step-by-step instructions of what needs to be completed and how those steps are documented. They are covered in VBA’s C&P Manual, M21-MR, Subpart ii, Chapter 4, Section D (Lost Folders). In this section, guidance is provided for lost folder searches, special requests for 24-hour searches and file number reconciliation and cancellation procedures.
Lost Folder Searches
In this section of the Manual, clear guidance is provided for:
General search procedures,
Missing claims folders and deceased veterans’ claims folders,
Missing Notice of Death Folders, commonly used in survivor claims, and Dependents’ Educational Assistance folders, and
What to do once a folder is located.
ROs are obligated to conduct an exhaustive search within their facilities before declaring a folder lost. The ROs coordinate with the Records Management Center to ensure that all appropriate facilities and divisions have searched for the record. When these searches are completed and responses properly documented, the RO is responsible for rebuilding the folder.
The process of rebuilding folders includes replicating all evidence available to VA. If there is evidence pertinent to a pending claim that VA does not have, all development must be done again in order to obtain that evidence. In addition, VA is required to notify the veteran and his/her representative of the lost folder and ask him/her to provide any documents pertinent to successful rebuilding of that folder.
If the original claims folder is subsequently located, the RO is obligated to combine the contents of both the claims folder and the rebuilt folder.
Month-of-Death Benefit for Surviving Spouses
Public Law No. 104-275 amended section 5310 of title 38, United States Code, to provide that a compensation or pension payment issued for the month of a veteran’s death shall be treated for all purposes as being payable to a surviving spouse. This change was effective for all deaths after December 31, 1996, unless the surviving spouse is granted death benefits. Due to problems implementing the change in law, some surviving spouses did not receive the veteran's compensation or pension benefit for the month of death.
Retroactive Month-of-Death Payments
VA is currently identifying surviving spouses who may be entitled to retroactive month-of-date payments. On December 29, 2008, VA made payments to 10,800 surviving spouses. Additional surviving spouses have been identified, and payments to those spouses were made last week. This process will continue as we identify additional beneficiaries due the retroactive benefit.
Changes to Month-of-Death Processing
Procedures are being revised to automatically issue the month-of-death benefit immediately on processing the notice of death where VA knows of a surviving spouse. No application is required to make payment. We expect to issue the new procedures later this month.
Our goal is to ensure accurate and consistent processing of all month of death benefits so that all deserving surviving spouses get the highest payment allowed for the month of death during their time of mourning.
Mr. Chairman, I have worked for VA for 35 years. During that time, I worked with many dedicated employees who devoted their careers to serving veterans. The events I discussed about in this testimony, particularly the shredding of documents, go totally against the responsibilities we have as public servants. Veterans have lost trust in VA. That loss of trust is understandable, and winning back that trust will not be easy. We are committed to doing whatever we can to accomplish this.
U.S. Department of Veterans Affairs - 810 Vermont Avenue, NW - Washington, DC 20420
Reviewed/Updated Date: November 10, 2009