Compensation Service

Thomas Murphy

Changing the Game:Disability Claims Process

2012

Changing the Game:Disability Claims Process

2012

Compensation ServiceVeterans Benefits Administration

Veterans Benefits AdministrationCompensation Service810 Vermont Avenue

Washington, DC 20420

Preface

On behalf of the Director, Compensation Service, it is an honor to submit this report, Changing theGame: Disability Claims Process 2012. The proposals contained in this report do not representcurrent claims processing policy. They are not to be acted upon unless instructed by VBA leadership.

In support of VA’s ongoing efforts to improve claims processing timeliness and accuracy, theseproposals are submitted by Compensation Service to VBA leadership as recommendations only.Such leadership may choose to act upon all, some, or none of these proposals. Further, VBAleadership may choose to pilot and/or amend any proposals as necessary.

The recommendations in this report seek to inspire VA leadership that with proper focus and studiousresearch on all mandates that drive our claims and appeals’ process, we can achieve the Secretary’sstrategic timeliness and accuracy targets. Further, we can achieve those targets while providing ourNation’s disabled Veterans with a benefits’ system that is simplified; streamlined; proactive; anddependable.

Internal objective: “To produce a leaner, more efficient claims process; one that is practical,reasonable, faster, and more accurate.” A key endeavor is to eliminate unnecessary steps from theprocess, especially those that add little to no value. These proposals also eliminate some long-standing practices and functions that are outdated, labor intensive, and do not directly benefitdisabled Veterans and their dependents.

VA has made several well-intentioned improvements to the claims process, but some result inadjudicators doing more work with less output and decreased quality. These proposals purposelyrequire adjudicators to do "less work"… with fewer steps to follow…. fewer functions to carry out….fewer letters to send… By doing less of what adds no value, we produce an improved and moreefficient claims process.

Key Quotes by Team Members: "We're not shuffling the cards…. we're changing the game. Let’snot apologize for offering bold, aggressive, or even controversial changes to the process when, infact, we're improving services to all Veterans and their dependents.”

A final analogy: “Instead of trying to figure out how to win the game with the same players… samerules…. same conditions, we're changing the game by making new rules and adding more players.The result—a winning season for all players! “

Table of Contents

Overview..............................................................................................................................................5

Acronyms ............................................................................................................................................6

Executive Report.................................................................................................................................8

1 Statutory ............................................................................................................................15

1.1 Automatic waiver of regional office jurisdiction when VA receives new evidence for anappeal that has been certified to the Board of Veterans Appeals .......................................15

1.2 Eliminate of certain types of apportionments ......................................................................191.3 Authorize service-connected death burial allowance when DIC is established under the

provisions of 38 U.S.C. § 1318 ...........................................................................................221.4 Amend 38 U.S.C. § 5103 to provide flexibility to VA on when and in what format to issue

the notice required by this section.......................................................................................241.5 Amend 38 U.S.C. § 5103A(b) to indicate that VA will assist a claimant in obtaining private

medical records when a claimant, on a form prescribed by the Secretary, requests suchassistance...........................................................................................................................32

1.6 Eliminate award reductions for certain Veterans that are hospitalized at VA expense, asstipulated in title 38 U.S.C. § 5503......................................................................................37

2 Regulatory .........................................................................................................................40

2.1 Eliminate appeal election letter by providing such notice in the decision award letter ratherthan post notice of disagreement ........................................................................................40

2.2 Convert the local appellate process into a single-flow system using the DRO program asthe model, thereby providing de novo review on all appeals...............................................43

2.3 Eliminate the discretion found in 38 C.F.R. § 3.326 when determining whether to acceptprivate evidence for rating purposes (examination by exception) .......................................47

2.4 Amend 38 C.F.R. § 3.159 to make clear that development will cease when VA can issue afavorable decision on the issue at hand..............................................................................50

2.5 Amend 38 C.F.R. § 3.156 to allow VA to reopen claims based upon the submission of newevidence, rather than new and material evidence, by modifying the definition of “material”as it relates to reopening previously denied claims.............................................................52

2.6 Amend VA’s apportionment regulations..............................................................................582.7 Amend 38 C.F.R. § 3.155(c) to mandate the use of VA Form 21-526EZ or alternate form.612.8 Streamline VA’s duty to notify claimants of information necessary to substantiate their

claims by attaching the required notice on VA Forms 21-526, 21-526B, 21-526EZ, 21-8940,21-527, 21-534, and 21-8640 .............................................................................................63

2.9 Amend 38 C.F.R. § 3.155 to infer and award benefits for certain claims, instead of invitingthe claim .............................................................................................................................66

2.10 Amend 38 C.F.R. § 3.159 to address instances when private providers refuse to honor VAForm 21-4142 .....................................................................................................................68

2.11 Amend 38 C.F.R. § 3.1600 (and other pertinent regulations) to streamline payment of burialclaims for surviving spouses ...............................................................................................72

3 M21 Manual or Other Policy/Procedures ........................................................................75

3.1 Intermediate ratings: reverse the current practice of prohibiting intermediate ratings that donot include at least one grant of benefits ............................................................................75

3.2 Allow VSRs to administratively award certain DIC awards and Dependents EducationalAssistance (DEA)................................................................................................................79

3.3 Amend M21-1MRI.1.C.6.d by reducing the initial 30-day waiting period for private recordsto 15 days, and by removing the current 10-day waiting period..........................................84

3.4 Modify VA Form 21-4142 ....................................................................................................873.5 VBA/VHA Joint Initiative to Increase Rating Efficiency .......................................................89

4 Training..............................................................................................................................91

4.1 Create a comprehensive training program designed to enforce the “exam by exception”mentality .............................................................................................................................91

4.2 Simplification of reasons and bases on VA Rating Decisions ...........................................100

5 VSO Program...................................................................................................................103

5.1 Create a project for cases not subject to VA’s duty to notify or its duty to assist byleveraging assistance from VSOs.....................................................................................103

6 Internal Compensation Service Issues .........................................................................106

6.1 Streamline the Agent Orange exposure confirmation process..........................................1066.2 Amend accuracy review procedures by adding a review element for claims processing

“timeliness” .......................................................................................................................1086.3 VA should require at least a quarterly meeting between the Policy and Quality Assurance

staff for discussion of common errors to ensure consistent guidance to the field .............110

Appendix 1: Section 1.1..................................................................................................................112

Appendix 2: Section 1.2..................................................................................................................115

Appendix 3: Section 1.3..................................................................................................................119

Appendix 4: Section 1.6..................................................................................................................122

Appendix 5: Cycle Impact Matrix...................................................................................................131

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Overview

Because of the unprecedented workload challenges faced by VA, these proposals seekto aggressively modify current VA practices that are outdated and/or inefficient. Thiswill result in improved performance outcomes and service to Veterans and their familymembers. These recommendations will reduce cycle times, increase processingcapacity, and decrease administrative costs.

Compensation Service employees with in-depth experience and expertise identifiedsubstantive changes that will serve to streamline and increase the efficiency of theclaims process. Many issues require legislative or regulatory changes. The table belowillustrates some of the key changes and their estimated impact on the claims processand the agency’s budget.

Issues Impact (Annually)

Sec. SubjectType ofchange

Improvementof timeliness(Approximate)

IncreasedCapacity(OpportunityCosts)

FTE Costequivalent Other

1.1 Waiver of ROjurisdiction

Statutory (HR1484)

AppealsResolution Time(1 year)

65,000 SOCs orratings

111 (RVSR or DRO)($11.8 M personalservices)

$500K in paper andpostage

1.2 Eliminate certainApportionments

Statutory -- 35,000 dev.actions

22 (VSR) ($1.5 Mpersonal services)

--

1.3 SC Death Burialfor DIC 1318

Statutory -- 3,253 RatingDecisions

(13 VSR, 5 RVSR)($1.1 M personalservices)

1.4 More flexibility onVCAA notices

Statutory ADC (7 to 10days) -- --

180,000 deferredratings

1.5 Engage claimantto obtain PTRs

Statutory ADC (30 to 40days) -- -- --

1.6 Eliminate HospitalAdjustments

Statutory -- 27,000 dev.actions

17(VSR) ($1.2 Mpersonal services)

--

2.1 Include AppealElection inDecision Package

Regulatory Appeals (60days)

150,000 CAactions

27 (CA) ($1.1 Mpersonal services)

$500K in paper andpostage

2.8 Attach VCAANotices to Forms

Manual ADC (10 days) 300,000 Devactions

300 (VSR) ($18.8 Mpersonal services)

$1.1 M in paper andpostage

4.2 Simplification ofRating Decisions

Manual -- 200,000Decisions

-- --

ADC (2 months) 203,000 RatingDecisions

116 DROs/ RVSRs 2.1 million inpaper, printing,

and postage

AppealsResolution Time

(14 mo)

362,000 +Development

Actions

352 + VSRs Eliminates 180,000Deferreds

27 CAs

Totals

60,000 SOCs150,000 CA

Actions

Total PersonalServices Cost -$35.5 million

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Acronyms

Acronym Description

ADC Average Days to Complete

AMC Appeals Management Center

ASPEN Advanced Sites, Planning and Engineering Network

BDN Benefits Delivery Network

BVA Board of Veterans Appeals (Board)

C&P Compensation and Pension Service

CAPRI Compensation and Pension Record Interchange

CAVC Court of Appeals for Veterans Claims

CFR Code of Federal Regulations (Code)CHAMPVA Civilian Health and Medical Program of the Department of Veterans

AffairsCOWC Committee on Waivers and Compromises

CPI Claims Process Improvement

DBQ Disability Benefits Questionnaire

DEA Dependents Educational Assistance

DIC Dependency and Indemnity Compensation

DoD Department of Defense

DRO Decision Review Officer

EP End Product

FDC Fully Developed Claim

FNOD First Notice of Death

FTE Full Time Employee

FY Fiscal Year

GOE General Operating Expenses

HHS Department of Health and Human Services

HIPPA Health Insurance Portability and Accountability Act

JSRRC Joint Services Records Research Center

M21-1MR Adjudication Procedure Manual

MAP-D Modern Award Processing Development

NOD Notice of Disagreement

OFO Office of Field Operations

OGC Office of General Counsel

ORM Office of Resource Management

P&T Permanent and Total

PA&I Office of Performance Analysis and Integrity

PMC Pension Management Center

PTF Patient Treatment File

PTSD Posttraumatic Stress Disorder

PTR Private treatment record

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Acronym Description

RBA Rating Board Automation

RO Regional Office

RTR Ready to rate

RVSR Rating Veterans Service Representative

SC Service-Connected

SMH Standard Man Hour

SOC Statement of the Case

SSOC Supplemental Statement of Case

STAR Systematic Technical Accuracy Review

USB Under Secretary for Benefits

USC United States Code

VA Department of Veterans Affairs

VACO Veterans Affairs Central Office

VACOLS Veterans Appeals Control and Location System

VAMC VA Medical Center

VARO Veterans Affairs Regional Office

VASRD Veterans Affairs Schedule for Rating Disabilities

VBA Veterans Benefits Administration

VBMS Veterans Benefits Management System

VCAA Veterans Claims Assistance Act of 2000

VHA Veterans Health Administration

VJRA Veterans’ Judicial Review Act

VOR VETSNET Operations Reports

VONAPP Veterans Online Application

VSO Veteran Service Organization

VSR Veterans Service Representative

VSSC VHA Support Service Center

WRS Work Rate Standard

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Executive Report

Statutory

First-instance Board jurisdiction

VA has requested that Congress amend 38 U.S.C. § 7104 to incorporate an automaticwaiver of RO jurisdiction for evidence received by the VA, to include the Board, with orafter submission of a substantive appeal to the Board, unless the appellant or his/herrepresentative expressly chooses not to waive such jurisdiction. A bill (H.R. 1484)passed the House and is currently in the Senate.

This proposal will dramatically improve appeals resolution time by over one year. VBAwill be able to redirect over 100 FTE to other critical appeals and/or rating workload byeliminating the need to complete over 60,000 SSOCs annually. Non-payroll (i.e., paperand postage) administrative cost equivalent could be approximately $500,000 the firstyear and up to $8.5 million for ten years.

Elimination of certain types of apportionments

VA requests that Congress amend 38 U.S.C. § 5307 to eliminate apportionments,specifically the apportionments authorized to a Veteran’s spouse, child, or parent whenthe Veteran is in a government hospital, and more importantly, those apportionmentsauthorized to a Veteran’s spouse when the spouse is not living with the Veteran. Thisproposal will eliminate a function that is complex, resource intensive, and subjective,and one best suited for family courts designed to resolve domestic issues.

This proposal will eliminate over 10,000 claims from the non-rating inventory, therebyallowing VBA to redirect approximately 22 FTE to other critical rating workload. TheGOE cost equivalent for 22 FTE is $1.5 million for the first year and $22.8 million overten years. This increased administrative efficiency will further result in the completion ofapproximately 30,000 additional VSR actions per year.

Amend SC burial for 1318 DIC

VA requests that Congress amend title 38 U.S.C. § 2307, to authorize the service-connected burial allowance when VA awards DIC under section 1318. This proposalwill increase claims processing efficiency at all ROs. The increased administrativeefficiency more than offsets the costs. The GOE cost equivalent is 18 FTE at $1 millionfor the first year and $16 million over 10 years, which exceeds the mandatory cost ofthis proposal of $7.3 million over ten years. Further, this will reduce the RVSR workloadby at least 6,505 decisions a year—VA could produce an additional 3,252 rating claimsper year.

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Amend 38 USC 5103

VA requests that Congress amend section 5103 to allow VA flexibility in deciding how tobest deliver the required VCAA notice. With more flexibility in how and when to issuenotices, VA will significantly reduce cycle times. For example, by attaching notices tothe claims applications, VA essentially initiates development before it receives a claim.This added flexibility will eliminate a very large number of VSR actions and will shortendevelopment time by at least 30 days in many of cases. VA defers at least 200,000cases per year due to inadequate/insufficient VCAA notice. This proposal couldeliminate 90 percent of this inefficiency as well as increase efficiency in other areas,such as significantly reduced appellate remands to inadequate/insufficient VCAA notice.

Amend 38 USC 5103A(b)

VA requests that Congress amend 38 U.S.C. § 5103A to provide VA authority toengage claimants in taking a more active role in claims development. This will allow VAto issue regulations with the intent to shorten the development time, which is currentlythe lengthiest cycle in the claims process. Empowering the claimant to take a moreactive role in the claims process will also result in better overall service to Veterans,thereby resulting in improved customer satisfaction.

The “average days awaiting evidence” at the end of April 2011 was 131 days. This onecycle (out of six) currently exceeds the 125-day strategic target for processing ratingclaims. A significant portion of this delay is due to development for private treatmentrecords. Through this proposal, VA can institute an aggressive but clear policyregarding procurement of records without causing harm to any Veteran.

Eliminate hospital reductions

VA requests that Congress amend 38 U.S.C. § 5503 to eliminate award reductions forcertain hospitalized Veterans. A cost-benefit analysis covering a 5-year period showedminimal benefits to the government. In fact, when considering the minimal financialbenefits of the program combined with the labor and opportunity costs of 17 FTE thatare required to process hospital reductions, the costs of the program outweigh thebenefits. Furthermore, VA should consider the practical and moral ramifications ofreducing benefits of some of our most disabled and/or needy Veterans.

Regulatory

Eliminate DRO election letter

This proposal will amend 38 C.F.R. § 3.2600 to provide DRO election rights with thedecision award letter. This will create a significant increase in claims efficiency in theappellate process by preventing appeal-team members from having to issue appealelection letters. VA estimates over 27 FTE are required to send out election letters onthe 170,000 NODs expected in FY 2011. The elimination of this extra step in the

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appeals process will reduce the appellate processing time by 60 days in each effectedappeal, and free up valuable resources for other critical appeals or claims processingfunctions.

Create a single-flow appellate process

VA will amend section 3.2600 to serve as the guiding regulation for a single-avenueappellate process. Under this proposal, ROs would execute a de novo review for allappeals received, which will result in more appeal resolutions earlier in the appealsprocess, as is contemplated by the authorizing statute at section 7105. The creation ofa single flow system will eliminate the current confusion experienced by the claimant ashe or she tries to determine which appeal route to take. By resolving more appealedcases locally and earlier in the appeals process, the number of total appeals proceedingto the Board will be significantly reduced.

Remove discretion at 38 C.F.R. § 3.326

VA will amend 38 C.F.R. § 3.326 to require VA to accept a private opinion orexamination report if VA determines that the report is otherwise adequate foradjudicating the claim. VA routinely requests medical examinations and/or opinions incases where the claimant has already submitted medical evidence that is adequate forrating purposes. VA claimants desiring to secure their own medical evidence, includinga fully informed medical opinion, are entitled by law to do so. If a claimant does secureadequate medical evidence, there is no need in practicality or in law for VA to seek itsown evidence. Amending section 3.326 will result in improved timeliness and increasedcustomer satisfaction.

Amend 38 C.F.R. § 3.159 regarding favorable awards

VA will amend 38 C.F.R. § 3.159 to make clear that when considering a claim for new orincreased benefits, and VA receives evidence that complies with the requirements setforth in the applicable section of the Rating Schedule and otherwise supports afavorable decision, no further development must be undertaken. Such an amendmentis consistent with the controlling statute, 38 U.S.C. § 5103A, precedent decisions of theCourt, and is in keeping with the non-adversarial, pro-claimant, Veteran-friendly, natureof VA’s benefits delivery system. It further conforms and solidifies changes requested inother sections of this report.

Amend 38 C.F.R. § 3.156 regarding New & Material evidence

This proposal will redefine the “material” component so that the threshold for reopeninga previously denied claim is lower than the current standard, thereby allowing VA toadjudicate more of these cases on their merits. From the original VCAA notice, to theadministrative and judicial appellate systems, the entire process of adjudicating newand material claims is inefficient and cumbersome. The complexity of these claims isdemonstrated by the pre-adjudication analysis and the required VCAA notice that VA

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must tailor to the reasons of the previous denial and the explanation of the type ofevidence sufficient to reopen the claim. This is arguably the most complex noticerequirement issued by ROs. This change will reduce the total number of decisionsrendered by VA and will simplify the claims process for Veterans.

Amend VA’s apportionment regulations

If Congress fails to enact the request to eliminate certain apportionments, then thisproposal will amend VA regulations so that set statutory amounts are apportioned. Thiswill authorize apportionments to the spouse and/or children at the statutory amountpayable for eligible dependents without making hardship or income determinations,thereby bypassing the complex and time-consuming dual due process proceduresnormally associated with these issues. This change will reduce the workload and theamount of time spent on investigating the validity of apportionment claims and willtherefore make the apportionment process more objective and fairer for all Veterans.

Amend 38 C.F.R. § 3.155(c) to mandate the use of VA Form 21-526EZ or alternateform

This proposal seeks to mandate the use of VA Form 21-526EZ or alternate forms thatVA uses for certain benefit claims. By mandating this form, (similar to the required 21-526), VA is able to better communicate and collect the pertinent information neededfrom claimants up front, thereby avoiding confusion as to what specific issue has beenclaimed and whether treatment has been received for the claimed issue. By mandatingthe use of this or other forms, VA can significantly reduce development time.

Amend 38 C.F.R. § 3.159 to place the section-5103 notice on VA forms

This proposal seeks to amend 38 C.F.R. § 3.159 to attach required VCAA notices to VAforms. VA’s adjudication procedures require VA to issue VCAA letters to claimantsnotifying them of information necessary to support their claims. By attaching VCAAnotices to forms, VA will experience major improvements in claims processingtimeliness and accuracy for all rating-related claims. This allows VA to essentiallyinitiate development before the claim is received by VA instead of when the claim isnearly 2 months old. This will shorten the overall development time by eliminatingVCAA letters and the required 30-day wait period in a large percentage of cases.Further, it will, eliminate at least 300,000 or more development actions that VSRs mustperform once VA receives a claim.

Amend 38 C.F.R. § 3.155 to infer and award benefits for certain claims, instead ofinviting the claim

VA proposes to amend 38 C.F.R. § 3.155 to expressly allow VA to infer and awardbenefits in specific circumstances. This would represent a reversal of the current policythat directs employees to “invite” claims for certain disabilities, (e.g., when a RVSRnotices a presumptive disability in a qualified Veteran’s record). This proposal would

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provide benefits to Veterans much faster and reduce incoming claims by as much as80,000 per year.

Addressing private medical provider refusal to honor VA Form 21-4142

This proposal will amend 38 C.F.R. § 3.159(c)(1) regarding VA’s policy when a providerrefuses to provide private records identified by a claimant on a VA Form 21-4142. VArequires this policy based on the frequency by which custodians refuse to honor VBA’smedical release form and the significant claims delays based on such refusal.Custodians refuse to honor VA’s release form because of a multitude of reasons toinclude, but not limited to: 1) they perceive the form lacks HIPPA compliance, 2) therequest is not on their own form, and 3) they believe the form does not conform tocertain State laws. In such examples described above, any future efforts to obtainrecords from providers would inevitably be unfruitful. Therefore, a clear policy toaddress instances when custodians refuse to honor VBA’s release form is needed.

Amend 38 C.F.R. 3.1600 to streamline burial claims

This proposal will amend 38 C.F.R. § 3.1600 and other pertinent regulations to allow VAto automate burial payments at a flat rate for surviving spouses. This payment wouldapply to nonservice and service connected burial allowances, and plot allowances.These amendments will streamline the burial claims process for a significant portion ofthe burial claims received by VA. More importantly, it will allow VA to improve the levelof service provided to surviving spouses who are entitled to burial benefits.

M21 Manual or Other Policy/Procedures

Reverse the practice regarding deferrals/denials

This proposal will reverse the current policy of RVSRs only issuing intermediate ratingsof one or more grants. Under current VA procedures, RVSRs grant benefits at theearliest possible point in the claims process. The proposal does not negate VA’s policyto expedite grants of benefits through intermediate ratings; instead, it merely refines thecurrent practice. Specifically, this would allow RVSRs to produce intermediate ratingsthat include denials only, as well as grants, as long as the evidence is sufficient todecide those issues. This new approach will ultimately diminish the time it takes tofinally address the remaining issues once the required development is complete.

Admin DIC awards

VA will implement internal changes to allow VSRs to administratively award certain DICbenefits that are currently awarded by a formal rating decision. This will free up moreRVSRs to focus on disability claims and enhance the overall efficiency of the claimsprocess. Procedural changes to M21-1MR and a national training initiative will berequired for implementation of this proposal.

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This 3-part proposal will eliminate nearly 30,000 referrals to the rating board per year,thereby allowing approximately 22 RVSRs to be redirected to other critical ratingworkload. This increased administrative efficiency will result in the completion of anadditional 15,000 disability rating claims per year nationally.

Reduce private treatment record development time

This proposal will modify waiting periods to allow 15 days, instead of 30, for a responseto VA’s initial request for private medical records. Further, this proposal would requireVA to send a second request after the initial 15 days, that VA will continue processingthe case as soon as the second request is sent rather than waiting for a specified periodof time (currently 10 days). Allowing VA to continue processing claims earlier is criticalto achieving the 125-day goal for rating-related claims.

Modify VA Form 21-4142

This proposal will modify VA Form 21-4142 to enhance the effectiveness of obtainingprivate medical evidence in support of disability claims. This form is useful in that itallows VA to obtain private medical evidence, but it has been the source of muchconfusion and claim processing delays.

The modification of VA Form 21-4142 will enhance VA’s ability to meet the timelinessstrategic target of 125 days. By improving the release form so that Veteransunderstand it better and by modifying the language to fully comply with HIPPArequirements, VBA reduces the time it takes to develop a significant number of claimsthat are otherwise lingering in the claims process.

VBA/VHA Joint Initiative to Increase Rating Efficiency

A joint initiative between VBA and VHA will increase rating efficiency by modifying thecontent of and better utilizing VA medical treatment reports in the rating process.Further, the value of VBA’s Disability Benefits Questionnaires will be maximized in therating process by requiring VA treating physicians to complete them periodically.

Training

Exam by exception

VA will create a nationwide training program designed to assist VSRs/RVSRs in usingsound judgment based on legal authority when to request claims-related VAexaminations and when no such examination is necessary.

Simplification of reasons and bases on VA Rating Decisions

This proposal will simplify and streamline VA rating decisions while increasing overallrating quality, productivity, and customer satisfaction. This is critical to VBA’s efforts to

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reduce the national inventory of rating-related claims, and improve rating timeliness andaccuracy. The goal of this initiative is to increase individual rating productivity by ½case per day per RVSR. This would result in the completion of approximately 200,000additional rating decisions per year. (2000 Raters X .5 = 1000 Ratings per day X 197(standard number of workdays per year) = 197,000 additional Ratings per year).

VSO Program

Project for Ready-to-Rate cases involving VSOs

Because of inherent limitations imposed by the CPI model of claims processing, VA hasnotable difficulty in establishing processes for employees involved in the earliest stagesof claims processing to identify claims that warrant an immediate favorable decision.VA should therefore enter into an agreement with VSOs to assist with such a project.By establishing a structured process with defined parameters targeted at specific typesof cases rather than a broad range of cases, VA can create an easy-to-manage processthat ensures success in leveraging VSO assistance.

Internal Compensation Service Issues

Streamline the Agent Orange exposure confirmation process

This proposal seeks to modify procedures in the M21-1MR to streamline the process ofverifying or confirming herbicide exposure when a Veteran claims a disability due toexposure to Agent Orange outside of Vietnam. Because ROs will be equipped with theknowledge and necessary tools to perform this function, it will eliminate the need for aformal request to VACO and thereby increase the overall claims processing efficiency.

Add a “timeliness” error measure

As a means to measure and ensure compliance with the proposals contained within thisclaims processing plan, we propose that a “timeliness” element be added to local andnational quality reviews. VA will list specific items as part of the checklist agenda, sothat timeliness errors are objective and clearly linked to the unnecessary delay of aclaim. Developing a new “timeliness” element is critical in VBA achieving the strategictarget of completing all rating claims in 125 days.

Quarterly meeting between the Policy and Quality Assurance staff

It is proposed that a meeting between the Policy and Quality Assurance Staff take placeon a quarterly basis. Although there is long history of collaboration between the variousstaffs within Compensation Service, a higher level of collaboration is needed betweenthese staffs to ensure consistency of guidance provided to field stations.

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1 Statutory

1.1 Automatic waiver of regional office jurisdiction when VA receives newevidence for an appeal that has been certified to the Board of VeteransAppeals

Introduction

VA has requested that Congress amend 38 U.S.C. § 7104 to incorporate an automaticwaiver of RO jurisdiction for any evidence received by the VA, to include the Board, withor after submission of a substantive appeal to the Board, unless the appellant or his/herrepresentative expressly chooses not to waive such jurisdiction. This request was partof the Secretary’s legislative package sent to Congress on May 26, 2010. Legislation iscurrently pending in Congress for this proposal. A bill (H.R. 1484) passed the Houseand is currently in the Senate.

This proposal could dramatically improve appeals resolution time by over one year. TheGOE cost equivalent could be over 100 FTE,1 thereby allowing VBA to redirect theseFTE to other critical appeals and/or rating workload. By eliminating the need tocomplete over 60,000 SSOCs annually, VBA can expect significant improvements inForm 9 pending timeliness (443 days at end of April 2011) since Appeals Teammembers can readily certify cases to BVA even when evidence submitted with or afterthe VA Form 9. Because of the increased capacity, the Notice of Disagreementinventory of 137,534 and NOD pending timeliness of 273 days (at end of April 2011)would also be positively affected by this proposal. Non-payroll (i.e., paper and postage)administrative cost equivalent could be approximately $500,000 the first year and up to$8.5 million for ten years. See Appendix 1 for a cost benefit analysis.

Background

If an appellant submits new evidence or information with, or following, the substantiveappeal, (or any time after the initial SOC while the appeal is active) such as recordsfrom recent medical treatment or evaluations, the local VA office prepares an SSOC,which is similar to the SOC, but addresses the new information or evidence submitted.VA must then give the appellant an additional 30 days to respond (with any additionalevidence, for example) following the issuance of an SSOC. If the appellant submitsother evidence, regardless of its content, VA must issue another SSOC and another 30days must pass before VA can send the appeal to the Board. In many cases, thisprocess is repeated multiple times before a case reaches the Board. In many of thosecases, appellants are simply unaware that they are preventing their appeal fromreaching the Board.

1GOE/Administrative Cost Equivalent: The amount of additional GOE funding or additional FTE

required to equal the efficiency realized by a proposal/recommendation.

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VAROs are not supposed to submit a case to the Board before they have rendered adecision on all evidence in the file. This restriction stems from 38 U.S.C. § 7104, whichhas been interpreted to mean that the Board is “primarily an appellate tribunal” and thatconsideration of additional evidence in the first instance would violate section 7104 anddenies an appellant “one review on appeal to the Secretary.” 38 U.S.C.A. § 7104(a)(West 2002 & Supp. 2007); see Disabled Am. Veterans v. Sec’y of Veterans Affairs, 327F.3d 1339, 1346 (Fed. Cir. 2003).

These procedures force ROs to repeatedly issue SSOCs in many cases, which merelylengthen the appeal, frustrates VA, and confuses appellants. The problem does not endthere. If an appellant submits new evidence once the case is at the Board, or if the ROsubmits a case to the Board with new evidence attached, the Board is prohibited fromrendering a decision on the case and is forced to remand the appeal (usually to theAMC), if for no other reason but for VA to issue an SSOC.

Notwithstanding the above, an appellant can choose to waive the RO’s jurisdiction ofevidence received by VA after a case has been certified to the Board by submitting awritten waiver of RO jurisdiction. In the case of an appeal before the VARO, this resultsin VA not having to issue an SSOC concerning the newly submitted evidence. In thecase of an appeal before the Board, it results in not requiring the Board to remand thecase solely to issue an SSOC.

Justification

The Board amended its regulations in 2004 so that it could solicit waivers directly fromappellants in those cases where an appellant or representative submits evidencewithout a waiver. 38 C.F.R. § 20.1304(c); see 69 Fed. Reg. 53,807 (Sep. 3, 2004).This has helped to avoid some unnecessary remands. Nonetheless, the Board stillremanded 2,190 cases in 2010 just to issue an SSOC. The frustrating reality of thissituation is that issuing an SSOC may only consume a few hours of work from anRVSR, but the case may nonetheless remain at the AMC for up to the next two yearswhile the VA completes that work.

Statistical data shows that appeals represent a significant amount of VA’s workload.For example, appellants filed 57,925 formal appeals (submission of VA Form 9) in FY2010 compared with 44,337 formal appeals in FY 2007. The BVA in turn issued 49,127decisions in FY 2010. These numbers are exclusive to appeals at the Board and do notinclude the substantial number of appeals processed by the appeals teams in VAROsand the AMC.

VBA actually issued 65,407 SSOCs in FY 2009. Because VA estimates that it mayreceive a total of 170,000 initial appeals in 2011, the number of SSOCs is sure toincrease equivalently. The 2009 number does not include cases wherein the appellantresponded to the Board’s initiation of a request for waiver of RO jurisdiction, therebyeliminating the requirement for a remand for VBA to issue an SSOC.

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The average number of days it took to resolve appeals, by either VBA or the Board, was657 days in FY 2006 and 886 days in FY 2010.2 This number, however, is deceptive, asit represents many appeals resolved at the RO level very early into the process. Theactual numbers show a less attractive picture. According the FY 2007 and 2010 Reportof the Chairman, Board of Veterans’ Appeals, a breakdown of processing time betweensteps in the appellate process is as follows:

Cycle Interval FY 2007 FY 2010 Responsible PartyNOD to receipt ofSOC

213 243 VARO

SOC to receipt ofVA Form 9

44 42 Appellant

VA Form 9 to cert atthe Board

531 609 VARO

Certified appeal toBoard decision

273 212 Board

Average RemandTime

493 VARO

Total – 1,061 days from NOD to Board decision in 2007 and 1,106 days in 2010—manyare much longer.

The function that should conceivably take the least amount of time actually took thelargest amount of time—receipt of VA Form 9 to certification to the Board. The reasonfor this lengthy time VA spends on a relatively simple task is in large part the result ofissuing multiple SSOCs.

Considerations

This change will drastically reduce the number of SSOCs issued by ROs, therebyallowing VA to redirect more personnel to other critical missions.

RO will be able to certify cases to the Board much faster than currently possible,thereby significantly reducing the total appellate period.

Considerable confusion on the part of appellants will be simplified by transferring theircases to the Board when they ask VA to do so. Many cases linger at ROs for months toyears while the appellant believes the Board already has possession of the case.

Appellants and/or their representatives will still be able to ask for RO considerationwhen they believe that new evidence may affect the outcome of the appeal. Therefore,no harm to claimants will occur.

2Note: Appeals resolution time is a joint BVA-VBA measure of time from receipt of notice of

disagreement by VBA to final decision by VBA or BVA. Remands are not considered to be final decisionsin this measure. Also not included are cases returned as a result of a remand by the U.S. Court ofAppeals for Veterans Claims.

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VA will reduce its administrative costs, i.e., paper and postage, by $500,000 the firstyear and by $8.5 million over 10 years.

The Board will reduce its remand rate by approximately 2,000 cases annually becausethey will have first instance jurisdiction over the evidence. Further, the personnel theycurrently use for soliciting RO jurisdiction waivers can be redirected to other criticalmissions.

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1.2 Eliminate of certain types of apportionments

Introduction

VA should seek for Congress to amend 38 U.S.C. § 5307 to eliminate certainapportionments, specifically the apportionments authorized to the Veteran’s spouse,child, or dependent parent when the Veteran is in a government hospital, and moreimportantly, those apportionments authorized to a Veteran’s spouse when the spousedoes not live with the Veteran.

This proposal will modernize VA’s apportionment policies and essentially eliminate afunction that is complex, resource intensive, and subjective, and one that is best suitedfor family courts that are designed to resolve these types of domestic issues.

This proposal will eliminate over 10,000 claims from the non-rating inventory, therebyallowing VBA to redirect approximately 22 FTE (required to complete apportionmentclaims nationally) to other critical rating workload. The GOE cost equivalent for 22 FTEis $1.5 million for the first year and $22.8 million over ten years. This increasedadministrative efficiency will further result in the completion of approximately 30,000additional VSR actions per year, (e.g., development of 30,000 rating claims). Non-rating ADC will also improve by eliminating apportionments since the ADC for thiscategory of claims is significantly higher than other non-rating claims. See Appendix 2for a cost benefit analysis.

Statutory Changes Required

VA should seek for Congress to amend 38 U.S.C. § 5307(a)(1) and (a)(2) to eliminatecertain apportionments of compensation or pension benefits to a Veteran’s spouse orchild and to amend 38 U.S.C. § 5313(b)(1) to conform to amendment of 38 U.S.C. §5307(a)(1) and (a)(2). VA seeks to repeal subsections (a)(1) and (a)(2) from 38 U.S.C.§ 5307. Subsection (a)(1) provides that a Veteran’s benefit payments may beapportioned to the Veteran’s spouse, child, or dependent parent when the Veteran ishospitalized in a government hospital. Subsection (a)(2) provides that all or part of aVeteran’s compensation or pension may be apportioned to a Veteran’s spouse or childas prescribed by the Secretary when the spouse does not live with the Veteran, or thechild(ren) are not in the custody of the Veteran. An amendment 38 U.S.C. § 5313(b)(1)is necessary to conform to the amendment of 38 U.S.C. § 5307(a)(1) and (a)(2) byreplacing the language “under the same terms and conditions as are provided undersection 5307 of this title” with “as prescribed by the Secretary.”

Background

Title 38 U.S.C. § 5307(a)(1) provides that a Veteran’s benefit payments may beapportioned to the Veteran’s spouse, child, or dependent parent when the Veteran ishospitalized in a government hospital. The origin of this provision indicates that

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Congress believed Veterans in hospitals were incapable of handling their affairs. Thisparagraph is obsolete and unnecessary. A fiduciary may be established for anyVeteran who is unable to manage his or her financial affairs due to a physical or mentalcondition. Because of these reasons, apportionments under the authority of paragraph(a)(1) are unnecessary and represent an out-dated policy. The advent of joint spousalbank accounts also makes this policy out of date.

38 U.S.C. § 5307(a)(2) provides that all or part of a Veteran’s compensation or pensionmay be apportioned to a Veteran’s spouse or child as prescribed by the Secretary whenthe spouse and child do not live with the Veteran. Developments in states’ laws placefamily courts in the best position to handle such disputes.

VA adjudicates apportionment claims by first gathering financial information from theVeteran receiving benefits and from the person claiming an apportionment. Thedecision-maker examines the financial information and decides the benefit amount, ifany, to apportion. If an apportionment is warranted, then the Veteran’s monthly benefitis reduced. The proper due process notice must also be provided to the beneficiaryprior to rendering the final decision. In the course of providing due process, VA mustafford the Veteran appellate rights. Appeals normally follow in cases wherein VAinvoluntarily apportions a Veteran’s benefits as a result of the apportionment claim.

Justification

The need for VA involvement in determining if and how much monetary support aVeteran pays to a spouse and/or child has greatly diminished over the years due to theprevalence of state family courts. Pursuant to a U.S. Supreme Court decision, statecourts may consider the amount of a Veteran’s disability compensation and order aVeteran to use his or her disability compensation to satisfy alimony or child supportobligations. See Rose v. Rose, 481 U.S. 619, 1987. Family courts and other variousservices that exist today are specially designed and better positioned to adjudicatethese types of domestic issues. Additionally, the enactment of various federal lawscurtails the need for VA involvement (e.g., Child Support Recovery Act of 1992 andDeadbeat Parent Punishment Act of 1998, both of which establish federal felonypenalties for the failure to pay child support).

Furthermore, this section of law places VA in the untenable position of considering theneeds of a Veteran secondary to those of the person who files a claim forapportionment, usually from an estranged spouse. Such a position is inapposite to VA’sstatutory mandate to provide Veterans with a pro-claimant, Veteran-friendly, non-adversarial framework. For example, VA may apportion a Veteran’s benefits despitehis/her ability to provide evidence of compliance with court-ordered child support oralimony if, through due process, the person claiming an apportionment of the Veteran’sbenefits can prove a need beyond that set by the court order. No law should require VAto arbitrate such a dispute.

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Because of existing family courts and various state and Federal provisions designed toresolve issues concerning spousal and child support, and due to the length of time,complexity, and subjectivity involved in processing apportionment claims, VA shouldseek to eliminate apportionment function described herein from the Compensation andPension program. This policy is out of date and is inapposite to VA’s statutory mandateto provide Veterans with a pro-claimant, Veteran-friendly, non-adversarial framework.By eliminating this function, VA will free up valuable resources to address VA’s risinginventory of disability claims.

Considerations

VA will no longer be seen as acting against the Veteran in cases of spousal disputes.State courts will have the jurisdiction that is rightfully theirs.

This proposal will eliminate over 10,000 of the most complex and time consuming VSRactions annually and approximately 500 Board decisions annually. Because it isestimated that the opportunity cost for 1 apportionment claim is 3 rating developmentactions, it is estimated that over 30,000 additional development actions could be takeneach year if apportionments are eliminated.

VA will still be able to apportion benefits where other needs arise, such as when aVeteran is incarcerated, or in the case of minor children. Furthermore, because of thenegative perception of apportionment cases, this proposal is expected to increasemorale in the Veterans Service Centers.

Comment from VA’s Office of General Counsel:

We note further that VA potentially may meet the objectives of thisproposal without legislation. Section 5307(a) gives VA wide discretionover the apportionments it authorizes, i.e., benefits “may” be apportioned“as may be prescribed by the Secretary.” We feel the Veterans BenefitsAdministration could, consistent with the statute, amend its regulations toprovide that VA will not make apportionments under § 5307(a)(1) and(a)(2). Although there would be a risk of judicial challenge to such aregulation, we believe there would be reasonable grounds for defending itas a justified exercise of VA’s discretion based on the considerationsoutlined in your proposal. Alternatively, VA could amend its regulations toprovide that it will grant apportionments in only very limited circumstances,such as cases involving extreme hardship or cases in which a state hasissued a support award.

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1.3 Authorize service-connected death burial allowance when DIC is establishedunder the provisions of 38 U.S.C. § 1318

Introduction

This proposal would amend 38 U.S.C. § 2307, to authorize the service-connected deathburial allowance when DIC is granted under section 1318 in the same manner as if theVeteran’s death were service-connected under the provisions of 38 U.S.C. § 1311.

This proposal will increase claims processing efficiency at ROs. Although there is aslight benefit entitlement costs associated with this proposal, the increasedadministrative efficiency more than offsets the costs. The GOE cost equivalent is 18FTE at $1 million for the first year and $16 million over 10 years, which exceeds themandatory cost of this proposal of only $7.3 million over ten years. Further, the RVSRworkload could be reduced by at least 6,505 decisions a year. By redirecting theseFTE, VBA would potentially produce an additional 3,252 rating claims per year.

If enacted, VA would implement a procedural change to allow VSRs to administrativelyaward DIC under section 1318 when applicable. Due to this proposed proceduralchange, issuing a formal DIC rating for cause of death in these instances would bemerely duplicative and therefore considered a moot issue. This proposal is closelyrelated and overlaps to some extent the proposal contained in section 3.2. SeeAppendix 3 for a cost benefit analysis.

OGC indicated that this proposal is legally sound and will accomplish its objectives.

Background

Title 38 U.S.C. § 2307 (38 C.F.R. § 3.1600(a)) states the following:

In any case in which a Veteran dies as the result of a service-connecteddisability or disabilities, the Secretary, upon the request of the survivors ofsuch Veteran, shall pay the burial and funeral expenses incurred inconnection with the death of the Veteran in an amount not exceeding thegreater of (1) $2,000, or (2) the amount authorized to be paid undersection 8134(a) of title 5 in the case of a Federal employee whose deathoccurs as the result of an injury sustained in the performance of duty.Funeral and burial benefits provided under this section shall be in lieu ofany benefits authorized under sections 2302 and 2303(a)(1) and (b) of thistitle.

Under 38 U.S.C. § 1318, VA is authorized to pay DIC to certain survivors of Veteranswhose death was not caused by service-connected disability (ies) in the same manneras if the death were service-connected, if a Veteran was in receipt of, or entitled to

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receive, disability compensation for a service-connected disability which was totallydisabling for certain specified time periods.

Entitlement to DIC under section 1318 does not, however, establish entitlement to thesame level of burial benefits as a Veteran who, under section 1311, dies because of aservice-connected disability. This amendment would authorize the burial allowance atthe “service connected death” rate when DIC is established under the provisions ofsection 1318.

Justification

In authorizing the burial allowance at the service connected death rate when DIC undersection 1318 is granted, VA is recognizing the significant impact of the Veteran’sservice-connected total disability in terms of level of severity, duration, and impairmentin the Veteran’s ability during his lifetime to provide for his or her family members. Theuniformity in benefit payment amounts for DIC under sections 1318 and 1310, bothcurrently $1,154 per month, demonstrates an equal level of recognition by thegovernment to these categories of beneficiaries. However, a perceived incongruousresult occurs when survivors of these two beneficiary categories receive differentamounts for reimbursement of burial and funeral expenses. Amending section 2307 toensure these two categories of survivors receive the same burial benefit amount is fair,equitable, and commensurate with the payment structure under the DIC program.

A significant factor in amending section 2307 is the increased efficiency realized in theclaims process. Currently, if a Veteran was permanently and totally disabled from aservice connected condition and his or her survivors are entitled to DIC 1318 benefits, aseparate decision regarding service connection for cause of death may be requiredwhen a claim for burial benefits is received. This requires multiple claims processingsteps to include potential development for evidence and an additional rating decision toresolve the service connection for death issue. By automatically granting burial benefitsat the service connected death rate when DIC 1318 is granted, VBA significantlyreduces administrative costs associated with the current process of adjudicating theissue of “service connection for death for burial purposes only.”

Considerations

The only cost associated with this proposal is a one-time $1,000 increased payment ofburial allowance for surviving spouses who would otherwise receive only nonservice-connected burial allowance but who would receive DIC anyway. In many of thesecases, the thousand-dollar difference will steadily decline because the nonservice-connected burial allowance is now indexed to increase periodically for Veterans who diein VA facility.

The foregoing action would ensure that qualified surviving spouses receive DIC muchfaster. It would also enable PMCs to redirect the personnel involved in those cases todecide complex DIC cases more efficiently.

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1.4 Amend 38 U.S.C. § 5103 to provide flexibility to VA on when and in whatformat to issue the notice required by this section

Introduction

VA should seek for Congress to amend section 5103 to allow VA flexibility in decidinghow to best deliver the required VCAA notice. A bill, H.R. 2383 is currently pending inthe House Committee of Veterans Affairs that would satisfy this request.

VA has numerous transformational efforts to reduce the claims backlog and improveclaims-processing efficiency while improving quality. Some of these includeenhancements to the eBenefits portal, VBMS, VONAPP, and the Expedited ClaimsProcess. To ensure success of these and other initiatives, Congress should amendsection 5103 to allow for more flexibility in its delivery of VCAA notices, therebyincreasing efficiency in the beginning stages of the claims process.

While another recommendation in this report seeks to add the notices required inaccordance with 5103 to many of VA’s most commonly used forms, enactment of thisrecommendation would ensure VA has the flexibility to adjust to any future change innotice delivery options without the potential for litigation.

With more flexibility in how and when to issue notices, VA will significantly reduce cycletimes by leveraging technology and other innovative ideas. For example, by attachingnotices to the claims applications, VA essentially initiates development before the claimis received in ROs. Once the claims folder is handled for the first time by a VSR, theVCAA notice obligation will be fulfilled, and other actions to move the claim along canbe readily taken. This added flexibility will eliminate a significant number of VSR actionsand will significantly shorten the overall development time by 30 days in a largepercentage of cases. Furthermore, the increased capacity generated by this and otherinitiatives will allow VSRs to handle the claims folder sooner (than the current 47 days).

We further recommend that VA seek to amend section 5103 so that there is norequirement for VA to issue VCAA notice when the same type of claimed issue issubsequently received during the pendency of an active claim. The first notice shouldsuffice.

Background

The VCAA, codified in part at section 5103, requires VA, upon receipt of a complete orsubstantially complete application for benefits, to notify the claimant of any informationnot previously provided to the Secretary that is necessary to substantiate the claim. Inaddition, VA is also obligated to explain to the claimant what evidence the claimant mustobtain and what evidence VA will attempt to obtain. 38 U.S.C. 5103(a) (as amended byPub. L. No. 106-475, 3).

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The Court interpreted section 5103 in Pelegrini v. Principi, that VA is required to informthe claimant:

(1) of the information and evidence not of record that is necessary to substantiatethe claim;

(2) of the information and evidence that VA will obtain;(3) of the information and evidence that the claimant must submit;3

(4) to provide any evidence in the claimant's possession that pertains to theclaim.

Pelegrini v. Principi, 17 Vet.App 412 (2004).4 The Court described the fourth part of thenotice in Pelegrini I—which it found was indicated in 38 C.F.R. 3.159(b)- as "give useverything you've got pertaining to your claim(s), or something to that effect." Pelegrini,17 Vet.App at 422. The "give us everything you've got" language was dropped fromPelegrini II; nonetheless, it describes in easy-to-understand language the fourth part ofthe notice requirement. VA General Counsel, in a February 2004 precedential opinion,held that the fourth element of Pelegrini was obiter dictum (not necessary to thedecision) and therefore not binding on VA. See VA Gen. Coun. Prec. 1-2004 at 7 (Feb.24, 2004). Notwithstanding the General Counsel's opinion, VA Regional Offices havebeen directed to advise claimants of the four Pelegrini elements in its VCAA notificationletters. See VA Fast Letter 04-04 (Mar. 12, 2004).

Regarding the timing of the notice requirement, the Court held that VA is required toprovide VCAA notification upon receipt of a complete or substantially completeapplication, before the RO makes an initial adverse decision on the claim. Pelegrini v.Principi, 18 Vet. App. 112, 119-121 (2004); Mayfield v. Nicholson, 444 F.3d 1328 (Fed.Cir. 2006) ("The purpose of the [VCAA] and the corresponding regulation is to requirethat VA provide affirmative notification to the claimant prior to the initial decision in thecase as to the evidence that is needed and who shall be responsible for providing it.”)

However, the Federal Circuit has held that this duty does not extend throughout theclaims process; instead, the VCAA requires only that VA give a claimant notice at theoutset of the claims process of the information and evidence necessary to substantiatethe claim. Wilson v. Mansfield, 506 F.3d 1055, 1062 (Fed. Cir. 2007). Thus, VA is notrequired to provide additional notice after a claim has been remanded to the RO or tothe Board. Id. at 1058-59; see Sanders v. Nicholson, 487 F.3d 881, 885 (Fed. Cir.

3 VA's regulations explain that information and evidence that a claimant would be required toprovide would include the identification of medical treatment providers and other information or evidencethat is in the claimant's control. See 38 C.F.R. 3.159(b),(c) (2008).

4 Shortly after the Pelegrini decision, VA filed a motion for reconsideration or motion for en bancreview, and a motion to stay the implementation of the case, challenging the Court's decision as to VCAAnotification. In June 2004, the Court granted VA's motion and withdrew its opinion in Pelegrini I, reissuingPelegrini II in its stead. The Court in Pelegrini II retained its prior holding regarding the applicability ofVCAA to claims already pending before VA, and the requirements of the notice’s content and timing.However, Pelegrini II provides discussion regarding the process when VA fails to provide the requirednotice.

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2007) ("Under the legal framework of the VCAA, there is generally no prerequisite toreceiving VA assistance; the VA is simply required to assist a claimant at the time thatclaimant files a claim for benefits.")

Section 5103 provides that information or evidence requested of a claimant must bereceived within one year from the date such notice is sent. 38 U.S.C. § 5103(b). Thisrequirement, added by the Veterans Benefits Act of 2003, Pub. L. 108-183, 701(b)(1),117 Stat. 2651, 2670 (Dec. 16, 2003), replaced an earlier provision stating that if theclaimant did not provide the information or evidence within the one-year period, "nobenefit may be paid or furnished by the reason of the claimant's application." 38 U.S.C.§ 5103(b) (removed by Pub. L. 108-183, 701(b)(1), 117 Stat. 2651, 2670 (Dec. 16,2003)). VA's regulation provides that if the claimant does not respond to the request"within 30 days," then VA may decide the claim prior to the expiration of the one-yearperiod based on the information and evidence present in the claims file. However, if theclaimant subsequently provides the information and evidence within one year of thedate of the request, then VA must “readjudicate the claim.” 38 C.F.R. § 3.159(b)(1)(2010).

This 30-day deadline was struck down in Paralyzed Veterans of Am. v. Sec'y ofVeterans Affairs, 345 F.3d 1334 (Fed. Cir. 2003). However, three months after thatCourt decision, 38 U.S.C. § 5103(b) was amended to authorize VA to decide a claim atany time before the expiration of the one year period. See Pub. L. No. 108-183, 701,117 Stat. 2651 (Dec. 16, 2003). Nonetheless, the Court has stated that it is misleadingand “ensures confusion and inefficiency, and is potentially prejudicial to a claimant'sstatutory one-year period for providing information” for a VCAA letter to state thatevidence must be submitted within 30 days of the date of the letter. George-Harvey v.Nicholson, 21 Vet.App. 334, 339 (2007).

After enactment of the VCAA, VA did not believe the notice requirement applied to"downstream" claims. In other words, that if (1) a claim for service connection of adisability is filed, (2) the VA provides notification in regards to substantiating the claimfor service connection, (3) service connection is granted, and (4) the claimant files anotice of disagreement regarding a "downstream" element (the effective date ordisability rating), VA was not required by VCAA to provide notice to the claimant aboutwhat evidence is necessary to substantiate the "down stream" claim regarding theeffective date or the evaluation. See VA Gen. Coun. Prec. 8-2003 (Dec. 22, 2003).

In Dingess, the Court held that VA's belief was correct in part and incorrect in part. VAwas correct that no additional notification is required after the claimant files a notice ofdisagreement in a "downstream" element. But before VA's initial decision on the claimfor service connection, a VCAA notice must, according to the Court, focus on theinformation and evidence not already of record that is necessary to substantiate each ofthe five elements of a disability compensation claim (i.e., Veteran status, a currentdisability, a connection between service and the disability, the degree of disability, andthe effective date of the disability). Dingess v. Nicholson, 19 Vet.App. 473 (2006), aff'dsub nom. Hartman v. Nicholson, 483 F.3d 1311 (Fed. Cir. 2007).

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Concerning the specificity of the VCAA notice given, the Court held in Locklear v.Nicholson that VCAA did not require VA to analyze the evidence already in itspossession. Specifically, the Court held that VA did not need to conduct a"predecisional adjudication," or in other words, analyze the evidence already in itspossession and inform the claimant that the evidence was insufficient to support anaward and that other evidence was required in order for the claimant to prevail.Nonetheless, the Court did note, "some cognitive review of the claim must be madeprior to providing the notice and that a generalized or boilerplate notice letter might notsuffice in some cases." Locklear v. Nicholson, 20 Vet.App. 410, 416 (2006) (citing Kentv. Nicholson, 20 Vet.App. 1, 10 (2006).

For example, in Hupp, the CAVC held that in a claim for dependency and indemnitycompensation benefits, the VCAA notice "must include (1) a statement of the conditions,if any, for which a veteran was service connected at the time of his or her death; (2) anexplanation of the evidence and information required to substantiate a DIC claim basedon a previously service-connected condition; and (3) an explanation of the evidence andinformation required to substantiate a DIC claim based on a condition not yet serviceconnected." Hupp v. Nicholson, 21 Vet.App. 342, 352-53 (2007).

Justification

The foregoing analysis illustrates some of the challenges VCAA has presented VA overthe decade since its enactment. Unfortunately, much, if not all, of the jurisprudence hasserved to complicate and unnecessarily delay the claims process and confuse Veteransand their dependents. The various court decisions rendered on VCAA haveunfortunately not made the process more flexible or efficient, nor have they added theappropriate substance to the claims process to benefit claimants.

One particular unintended consequence occurs when VA receives a subsequent claim(i.e., increased-rating claims or service-connection claims) while the same type of issuefrom a prior claim is pending before VA. This routinely occurs when a Veteran files amulti-issue claim, and a few months later while that claim is still pending, files anotherclaim or “adds an issue” to that pending claim wherein the issue added is the same typeof issue currently pending. In many of these cases, the subsequent claim can bedecided, or at least developed, along with the previously pending issues. However, thedevelopment and/or decision is extensively delayed in such cases because the VSRprovides “VCAA notice” to the Veteran regarding the subsequent claim. This delay isunacceptable and will be mitigated by this amendment.

Effect on Claims Process Timeliness: One of the leading cycle time indicators,“average days awaiting development” is 47.1 days for the nation’s pending inventory of802,219 rating claims (at the end of April 2011). The efficiencies gained through thisproposal and other similar VCAA enhancements in this plan can significantly reduce thetime it takes to initiate development from the 47 days to a much more reasonable time

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period. This front-end improvement to the claims process is paramount in VBA’s abilityto achieve the 125-day goal of completing rating claims.

A recent analysis from VBA’s Office of Strategic Planning indicate 44 percent of allrating cases are made “ready to rate” more than once. A key factor in 80 percent ofthose cases that were made RTR more than once was “incorrect VCAA notices.”Considering that VBA is on track to complete or receive approximately 1.1 million ratingclaims in FY 2011, approximately 44 percent, or 484,000 cases will be deferred out fromthe Rating Board for some reason. 80 percent, or 387,200 cases were deferredbecause of internal errors pertaining to VCAA notice, VA examinations, or the RatingDecision itself. A conservative estimate for the number of cases deferred due to VCAAnotice errors is 200,000 cases per year nationally. Because of VCAA proposedchanges, it is estimated that VBA can eliminate 90 percent, or 180,000 deferred ratingsper year, and thereby reduce on average 40 processing days from each of these180,000 claims. This will positively affect timeliness by at least 7 to 10 days nationallyand will significantly improve the quality of claims process.

VA does not believe the types of non-value added delays (described above) were everthe intent of Congress when it enacted the VCAA. We are therefore recommendingCongress amend section 5103 as indicated below. Specifically, subsection (a)(3) in therecommended changes to section 5103 would remedy this inefficiency. Such a changewill likely have a positive effect on, at a minimum, tens of thousands of cases. Such achange could easily shorten the overall processing time for the affected cases by 30 to60 days.

Congress attempted to solve part of this problem in the Veterans’ Benefits ImprovementAct of 2008. In pertinent part, title 38 U.S.C. § 5103 (as now amended) states thefollowing:

(a) Required information and evidence.--(1) Upon receipt of a complete orsubstantially complete application, the Secretary shall notify the claimant and theclaimant's representative, if any, of any information, and any medical or layevidence, not previously provided to the Secretary that is necessary tosubstantiate the claim. As part of that notice, the Secretary shall indicate whichportion of that information and evidence, if any, is to be provided by the claimantand which portion, if any, the Secretary, in accordance with section 5103A of thistitle and any other applicable provisions of law, will attempt to obtain on behalf ofthe claimant.

(2)(A) The Secretary shall prescribe in regulations requirements relating to thecontents of notice to be provided under this subsection.

(B) The regulations required by this paragraph--

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(i) shall specify different contents for notice based on whether the claimconcerned is an original claim, a claim for reopening a prior decision on aclaim, or a claim for an increase in benefits;

(ii) shall provide that the contents for such notice be appropriate to thetype of benefits or services sought under the claim;

(iii) shall specify for each type of claim for benefits the general informationand evidence required to substantiate the basic elements of such type ofclaim; and

(iv) shall specify the time period limitations required pursuant tosubsection (b).

38 U.S.C. § 5103 (as amended by, Pub. L. 110-389, Title I, § 101(a), Oct. 10, 2008, 122Stat. 4147).

When Congress amended this section of law, it left in place the previous language insubsection (a)(1) that states: “Upon receipt of a complete or substantially completeapplication, the Secretary shall notify the claimant and the claimant's representative, ifany, of any information, and any medical or lay evidence, not previously provided to theSecretary that is necessary to substantiate the claim.” This language presents the firstproblem with VA’s current notice requirement—it is not adaptable to change.

If VA currently operated its claims process under one completely, paperless system,then VA could issue an electronic notice letter at the instant a claimant submits anelectronic claim. Although VA is working to develop such processes, a completelypaperless system is still years away. VA therefore requires added flexibility in the law inorder to achieve an immediate solution.

For example, if notice requirements for the most common types of claims, (i.e.,compensation and increased-rating claims) could be attached to the form(s) required tofile such claims with VA, then the claim could move directly to a more advanced stageof development. Such claims’ movement could occur as soon as VA receives the claim.Another method VA could deploy with such flexibility is referring a claimant to a websitecontaining an electronic notice consisting of any or all section 5103 notices unless suchnotice requires “tailoring” to a specific claimant.

As previously mentioned, another obstructing aspect of VA’s notice requirements occursin sequential claims (i.e., when VA receives, for example, an increased-rating claim formultiple service-connected disabilities, and before VA completes processing such aclaim, subsequently receives another increased-rating claim on another service-connected disability). Although VA may be able to began developing the subsequentclaim immediately, or even render a decision on such claim when the initial issues areready for a decision, once VA discovers that VCAA notice has not been provided on thesubsequent claim, then processing the claim must usually stop in order for VA to issue

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the proper notice. Ironically, in the scenario listed, the notice provided by VA for theinitial increased-rating claim normally mirrors the notice issued in the subsequent claim.

This example should serve as the epitome of inefficiency. Nonetheless, based on theforegoing judicial history of the section 5103 notice, it becomes quite easy tounderstand how the notice requirements have come to hinder, rather than improve,VA’s ability to deliver efficient service to its clients.

In order for VA to gain the efficiencies described above, Congress should amendsection 5103 to read as follows:

(a) Required information and evidence.--(1) The Secretary shall provide noticeof the basic elements necessary to substantiate a claim in a manner mostefficient for the Secretary while preserving the effectiveness of the noticeprovided under this section. The manner in which the Secretary may choose todeliver such notice may include, but is not limited to: electronic methods,including email; standard notices attached to forms prescribed by the Secretaryfor specific purposes; and notices subsequent to claim submission. As part ofthe notice, the Secretary shall indicate which portion of information and evidence,if any, claimants are generally required to provide, and which portion, if any, theSecretary, in accordance with section 5103A of this title and any other applicableprovisions of law, will attempt to obtain on behalf of the claimant. No notice isrequired when the Secretary cannot discern the type of benefit sought by aclaimant.

(2)(A) The Secretary shall prescribe in regulations requirements relating to thecontents of notice to be provided under this subsection.

(B) The regulations required by this paragraph--

(i) shall specify different contents for notice based on whether the claimconcerned is an original claim, a claim for reopening a prior decision on aclaim, or a claim for an increase in benefits;

(ii) shall provide that the contents for such notice be appropriate to thetype of benefits or services sought under the claim;

(iii) shall specify for each type of claim for benefits the general informationand evidence required to substantiate the basic elements of such type ofclaim; and

(iv) shall specify the time period limitations required pursuant tosubsection (b).

(3) Nothing in this section will require the Secretary to provide notice forsubsequent claims filed during the pendency of another claim when the notice

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already provided for the pending claim provides notice of the information andevidence necessary to substantiate the subsequent claim.

(4) The requirements of this section will not apply to any claim or issue where theSecretary can award the benefit sought based on the evidence of record.

Considerations

The change to section 5103(a) will ensure that VA has the statutory authority to evolvewith the needs of the claims process without fear of no-value-added litigation that wouldonly be aimed at the manner of notice delivery rather than the contents of such notice.While Compensation Service is moving forward with changes to notice delivery asdiscussed in other sections of this initiative, there is, nonetheless, a slight risk oflitigation regarding those changes. The risks, however, are far outweighed by thebenefits. This change would eliminate those risks.

By allowing VA to standardize all notice delivery, i.e., electronically or otherwise, VA’snational claims accuracy rate would increase significantly because large portions ofbenefit entitlement errors are the result of inaccurate/inadequate notices. Boardremands would be reduced for the same reasons.

By not requiring additional notice on subsequent claims during the pendency of aprevious claim, as long as the notice for the subsequent claim would duplicate thenotice of the previous time, VA can significantly reduce overall claims processing timebecause such situations occur often and nearly always interrupts the work beingperformed to process the initial claim. Such delays are usually 30 days at a minimum.

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1.5 Amend 38 U.S.C. § 5103A(b) to indicate that VA will assist a claimant inobtaining private medical records when a claimant, on a form prescribed bythe Secretary, requests such assistance

Introduction

VA should seek a statutory amendment to section 5103A to provide VA authority toengage claimants in taking a more active role in claims development. This will allow VAto issue regulations to significantly shorten the development time, which is currently thelengthiest cycle in the claims process. Empowering the claimant to take a more activerole in the claims process will also result in better overall service to the Veteran, therebyresulting in improved customer satisfaction.

The “average days awaiting evidence” at the end of April 2011 (per NationalPerformance Dashboard) is 131 days. This one cycle (out of six) currently exceeds the125-day strategic target for processing rating claims. A significant portion of this delayis due to the development for private treatment records. Through the proposaldescribed herein, VA will institute an aggressive but clear policy regarding procurementof records while ensuring that Veterans are not harmed in any way. Sharingresponsibility with the claimant will assist VA in meeting its strategic target while helpingVeterans receive benefits faster.

Background

Although VA obtains private records for claimants, undue delays in the claims processarise out of statutory and regulatory requirements that often cause VA to futilely requestthe same private treatment records repeatedly, or requests ones already in VA’spossession. The pertinent section of VA’s “duty to assist” statute, 38 U.S.C. § 5103A(b)states:

(b) Assistance in obtaining records.--(1) As part of the assistance providedunder subsection (a), the Secretary shall make reasonable efforts to obtainrelevant records (including private records) that the claimant adequately identifiesto the Secretary and authorizes the Secretary to obtain.

(2) Whenever the Secretary, after making such reasonable efforts, is unable toobtain all of the relevant records sought, the Secretary shall notify the claimantthat the Secretary is unable to obtain records with respect to the claim. Such anotification shall—

(A) identify the records the Secretary is unable to obtain;

(B) briefly explain the efforts that the Secretary made to obtain thoserecords; and

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(C) describe any further action to be taken by the Secretary with respect tothe claim.

38 U.S.C. § 5103A(b) .

VA promulgated a regulation concerning the above statutory requirements that states:

Obtaining records not in the custody of a Federal department or agency. VA willmake reasonable efforts to obtain relevant records not in the custody of aFederal department or agency, to include records from State or localgovernments, private medical care providers, current or former employers, andother non-Federal governmental sources. Such reasonable efforts will generallyconsist of an initial request for the records and, if the records are not received, atleast one follow-up request. . . .

38 C.F.R. § 3.159(c)(1)(2010).

The foregoing regulation and its authorizing statute do not currently lend themselves tosuggesting that a claimant submit his/her own private records when it is easier forhim/her to do so, or when they would prefer to do so. In fact, in many cases, a claimantwill submit their own private records only for VA to send that claimant a VA Form 21-4142 so that VA can seek other records, if there are any, despite the fact that suchclaimant has not (1) identified other records for VA to obtain, and (2) authorized VA toobtain other records. These types of self-imposed delays are simply unnecessary.

Justification

VA claimants should be encouraged to participate in the development of their ownclaims to the extent possible. Apart from filling out an application, one of the easiestfunctions that claimant can perform happens to be the cause of some of the longestdelays in the claims process—obtaining private records. While this function cansometimes prove difficult for claimants who are elderly, severely disabled, orincompetent, most claimants can easily obtain their own private records. In fact, mostclaimants are conditioned by the military to procure their own records. Consequently,most Veterans prefer to do so to ensure VA receives the pertinent records.

Claimants often submit private records only to have VA undertake development for thesame records. Duplicative and/or futile development is routinely undertaken by ROsbecause it is not clear to the VSRs if the Veteran submitted records in their entirety or ifthere are other records that “might” be available. This triggers unnecessary and time-consuming development. Furthermore, the same claimants that submit their recordsoften submit a completed medical release form for the same records they sent VAbecause they are conditioned to fill out all paperwork. This confusion causes significantdelays in the claims process. Furthermore, these types of situations can feed otherwiseempty litigating positions during many judicial proceedings. Enactment of this

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recommendation would clarify an aspect of the VCAA development process that isfrustrating and confusing to VA’s claimants.

In accordance with the foregoing, consider a Veteran requesting an increased rating fora single service-connected disability wherein the Veteran has private treatment recordsrelevant to the claim. First, such factual information must be clearly indicated on thepertinent claims form. The claims form should instruct the Veteran to obtain the PTRsand submit them to VA with the application. It is important to understand that section5103A does not currently authorize, nor prohibit, VA from engaging a claimant in thismanner. The form should further instruct the Veteran that if he/she cannot submit thePTRs with the application, then VA must receive such records within 30 days. Thesame form, or other notification, should also clearly and in understandable languageinform the claimant that if he/she cannot or will not obtain PTRs, then VA will assist inobtaining the records if the Veteran properly authorizes VA to do so. Such instructionshould be clear that if a claimant does not require VA’s assistance in obtaining records,then such assistance should not be requested.

Another scenario is one where a Veteran does not have supporting PTRs, and thereforemay only need a current VA examination. Under the current process, such a Veterannormally undergoes the entire development process, despite that fact that he/she mayonly require a current VA examination. Therefore, changes to VA’s duty to notify/assistare necessary so that the Veteran may clearly indicate to VA whether he or she has hadprevious treatment for the claimed condition and whether he or she wants VA to assistin obtaining the records. This will prevent futile development in many cases.

There are other benefits to this type of legislative amendment when considered in thecontext of other suggestions contained herein. Whether a claimant files forcompensation because of disability, or an increase in the level of compensation, andcomplies with the above instructions, then VA can quickly determine if any additionaldevelopment is required in the case. In other words, if a Veteran submits an applicationfor benefits that includes supporting treatment records as noted above, and suchtreatment records are adequate for rating purposes, then no further action will berequired in the case—it will be ready for a decision within a few days, but no longer thana few weeks.

In order for VA to gain the efficiencies described above, Congress should amendsection 5103A(b) to read as follows:

(b) Assistance in obtaining private records.-- As part of the assistanceprovided under subsection (a), the Secretary shall make reasonable efforts toobtain private records relevant to the issue(s) before the Secretary when theclaimant requests the Secretary’s assistance in obtaining such records on anapplication for benefits (or form) prescribed by the Secretary.

(A) The Secretary shall prescribe regulations that (1) ensure VA’s duty to assistin obtaining records described in subsection (b)(1) remains available to

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claimants, while (2) encouraging claimants to play an active role in thedevelopment of their claims by submitting their own private medical records tothe Secretary when such actions will not burden the claimant.

(2) For the purposes of this subsection, a reasonable effort requires two requeststo the custodian of such records, unless response to the first request indicatesthat a second would be futile. Whenever the Secretary is unable to obtain all ofthe relevant records sought, the Secretary will notify the claimant that theSecretary is unable to obtain records with respect to the claim. Such anotification shall--

(A) identify the records the Secretary is unable to obtain;

(B) briefly explain the efforts that the Secretary has taken to obtain thoserecords; and

(C) explain that the Secretary will decide the claim based on the evidenceof record, but that such claim will be readjudicated if the claimant canobtain and submit such records within the one-year appellate period ifsuch records are relevant to the claim.

(3) The Secretary may discontinue assistance in obtaining records under thissubsection when the evidence of record supports a favorable decision on theissue before the Secretary.

(4) The claimant may waive requirements under this section.

Considerations

There may be a negative perception associated with this proposal, specifically that VAis not assisting Veterans as Congress intended in the VCAA. However, the amendmentto section 5103A(b) would, in no way, restrict or otherwise limit VA’s duty to assistVeterans in developing their claims. Rather, it would ensure that VA has the authority topromote a more active participation of Veterans in their claims. In turn, Veterans whochoose this more active role will experience a benefits system that is less confusing andmore efficient.

We are suggesting that VA undertake some of these changes through policy, asdiscussed elsewhere in this initiative. Nonetheless, having statutory authority for such ano-nonsense approach to claims processing benefits all stakeholders.

Discontinuing assistance when VA can issue a favorable decision is a practice arguablyallowed by law already, but one that is very underutilized. Providing express statutoryauthority will assist VA in solidifying such a practice.

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Veterans routinely submit their own records only to have VA ask for them again, or tohave VA forward release forms to the Veteran so that VA can ask for them again. Thishas proven as an area of considerable dissatisfaction among VA claimants. Theauthority provided for here would help VA to eliminate that dissatisfaction.

VA should consider eliminating the attachment of medical releases to VA formsbecause of the issues raised above. Clear instructions as to when VA requires medicalreleases and where forms can be accessed will sufficiently aid the claimant if privatemedical records are pertinent to the claim.

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1.6 Eliminate award reductions for certain Veterans that are hospitalized at VAexpense, as stipulated in title 38 U.S.C. § 5503

Introduction

VA should seek a statutory amendment to section 5503 to eliminate award reductionsfor certain hospitalized Veterans. Specifically, subsections (a), (b), and (c) of section5503 are proposed to be repealed.

The intent of the hospital adjustment program is to prevent duplication of benefitsprovided to Veterans who are hospitalized at government expenses. However, a cost-benefit analysis (See Appendix 4) covering a 5-year period showed minimal benefits tothe government. In fact, when considering the minimal financial benefits of the programcombined with the labor and opportunity costs of 17 FTE that are required to processhospital reductions, the costs of the program outweigh the benefits. Furthermore, whenconsidering the practical and moral ramifications of reducing benefits of some of ourmost disabled and/or needy Veterans, VA should eliminate adjustments to VAcompensation awards based on hospital, domiciliary, or nursing home admittances.

Background

Title 38 U.S.C. § 5503 stipulates that monthly payments to certain VA beneficiariesmust be reduced when they are hospitalized at VA expense for a specified period oftime. The main categories of Veterans affected by this law are: (1) Single Veteransreceiving pension, in which case the Veteran’s award is reduced to $90 per month atthe end of third full calendar month following the month of admission; and (2) Veterans(with or without dependents) receiving compensation with an Aid and Attendanceallowance, in which case the additional aid and attendance allowance will bediscontinued effective the last day of month following the month of admission. In orderto make the required adjustment, VA regional offices must obtain hospital reportsthrough the Compensation and Pension Record Interchange, screen the reports, andthen take the necessary actions to adjust beneficiaries’ awards.

On February 7, 2005, a VBA Hospital Adjustment Team was created to review theprocedures for processing claims that involve hospital adjustments and recommendneeded changes. A long-term recommendation from the team was to conduct acost/benefit analysis of the hospital adjustment program. This analysis was conducted,and at its conclusion, it was determined that the overall cost of administering theprogram outweighs any potential savings to the taxpayer. This has led to the proposalto eliminate award reductions for all compensation and pension-related hospitalizations,as stipulated in 38 U.S.C. § 5503, and 38 C.F.R. § 3.551 and 3.552.

Note: For the purposes of this proposal and in accordance with 38 C.F.R. § 3.551, theterm “hospitalization” means:

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(1) Hospital treatment in a Department of Veterans Affairs hospital or in anyhospital at Department of Veterans Affairs expense.

(2) Institutional, domiciliary or nursing home care in Department of VeteransAffairs institution or domiciliary or at Department of Veterans Affairs expense.

Justification

The benefits of administering VBA’s hospital adjustment program strictly from a financialpoint of view are minimal (See attached cost/benefit analysis at Appendix 4). The costof administering VBA’s hospital adjustment program in FY 03 exceeded the benefit by$409,660. In FY04 and FY05, benefit exceeded cost by $89,922 and $1,239,091,respectively. In FY06, cost exceeded benefits by $657,261, and FY07 benefitsexceeded costs by $287,892. The total financial benefit to the taxpayer over the 5-yearperiod was $549,984.

The cost of operating this program places a significant drain on VA resources. FromFY03 through FY07, the end products related to hospital adjustments (EPs 135, 293,320, and 600) represented approximately .6 percent of the total national compensationand pension workload.5 VA estimated that this workload required an average of 17Compensation and Pension FTE per year over the 5-year study period. This does notinclude labor required for processing of waiver requests, drop filing reports into claimsfolders, transferring claims folders, etc. By re-directing these man-hours, VBA willenhance our ability to provide more timely and accurate decisions on disabilitycompensation claims.

VA should also consider the moral ramifications of reducing awards for hospitalizedindividuals, who represent some of our most disabled and needy veterans. If thisproposal is accepted, it is true that VA will bear the full cost of care for veterans whilethey are hospitalized by continuing their monthly compensation or pension awards. It isalso true that these beneficiaries, when hospitalized, are still obligated to pay theirmortgages, car payments, utility bills, etc. With this in mind, many believe that hospitalreductions do not align with VA’s goal to “improve the quality of Veterans’ lives and thatof their families,” or “honor and serve Veterans.” Furthermore, the hardshipexperienced by Veterans when VA creates an overpayment on their award does notreflect VA’s core values of compassion, commitment, and excellence.

Considerations

By eliminating the hospital adjustment program, VBA would be able to redirect FTEresources (approximately 17 FTE per year) to better address the disability claimsinventory. As an example of the opportunity costs involved with 17 VSRs, nearly 17,000rating-related claims could be developed in a given year. This approximation is basedon a VSR developing 5 cases per day.

5National workload represents total number of claims received during the fiscal year; includes

rating, nonrating, eligibility, and ancillary claims.

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Although the hospital adjustment program was intended to save the government money,our analysis demonstrates minimal savings and benefits to the government. In fact,when considering all expenses and opportunity costs related to this program, thegovernment would actually benefit from eliminating the program altogether.

If this legislative proposal is not adopted, then the alternative proposal could be that therequired periods of time before adjustment be extended, thereby eliminating asignificant portion of the reviews and award reductions. For example, by extending theperiod for Aid and Attendance reduction to six or 12 months instead of the current one-month, VBA eliminates the need to adjust these awards except in cases where theVeteran’s condition warrants extended institutional care.

Potential budget implications for VHA: The statute indicates that amounts in excess ofthe $90 for pensioners shall be deposited in a revolving fund at the Department medicalfacility that is furnishing care for the Veteran. VBA is unaware of how these funds areallocated at the VHA facilities. VBA leadership should communicate with VHAleadership in regards to the potential consequences of termination of these transferredfunds.

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2 Regulatory

2.1 Eliminate appeal election letter by providing such notice in the decisionaward letter rather than post notice of disagreement

Introduction

This proposal would amend 38 C.F.R. § 3.2600 to provide DRO election rights with thedecision award letter. This will create a significant increase in claims efficiency in theappellate process by preventing appeal-team members from having to issue appealelection letters.

In FY 2010, VA received 150,475 NODs. By providing claimants with the appealelection rights in the decision notification package, VA can free up approximately 24.1FTE per year. The Board estimates that VA will receive 170,000 NODs in FY 2011,which will equate to 27.24 FTE. The elimination of this extra step in the appealsprocess will reduce the appellate processing time by 60 days in each effected appeal,and free up valuable resources for other critical appeals or claims processing functions

The Office of General Counsel reviewed this proposal and has not identified anystatutory impediments in its implementation. OGC agreed that the regulatoryamendment in § 3.2600 would be required.

Note: If section 2.2 is implemented, then this regulation change will be unnecessary.

Background

In the current appeals process, VA issues an appeal election letter to all claimants whosubmit an NOD. The letter provides an appellant with the opportunity to choose aspecial post-decision review by a decision review officer or traditional appeal process.

To begin the appeal process, an appellant files an NOD with the RO that issued thedecision. After filing a NOD, VA sends the appellant an appeal election form askinghim/her to choose between a traditional appellate-review process or a DRO review.DROs provide a de novo review of an appellant’s file, and can hold a personal hearingwith the appellant. DROs are authorized to grant contested benefits based on the sameevidence that was used in the initial Rating Decision. VA provides the appellant 60days to respond to the appeal election form. See 38 C.F.R. § 3.2600 (2009).

Once VA receives the appeal election form, an RVSR or DRO issues an SOCexplaining the reasons for continuing to deny the appellant’s claim. A VA Form 9, orsubstantive appeal form, is used to substantiate an appeal to the Board of VeteransAppeals and is attached to the SOC. The VA Form 9 must be filed within 60 days of the

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mailing of the SOC, or within one year from the date VA mailed its decision, whicheveris later.

Justification

This proposal will provide claimants the same appellate opportunity they currentlyreceive by including the critical portions of the current appeal election letter in thedecision notification package. Options regarding DRO reviews or traditional appealprocess would be clearly presented in the section of the notification letter that pertainsto Appeals. The notice will explain that any NODs submitted without electing a post-decision review process will automatically be reviewed under the traditional appealprocess—the same process followed in the current system if the appellant fails torespond to the appeal election letter.

This will save valuable FTE hours by preventing appeal-team members from having toissue significant numbers of appeal election letters. In FY 2010, VA received 150,475NODs. By providing a claimant with his or her appeal choice in the decision notificationpackage, VA can free up approximately 24.1 FTE per year. This preliminary analysisassumes that it takes 20 minutes to prepare and release the election letter (150,475 X20 min. = 50,158 hrs/ 2080 hrs (1 year) = 24.1 FTE). The Board estimates that VA willreceive 170,000 NODs in FY 2011, which will equate to 27.24 FTE. The elimination ofthis extra step in the appeals process will reduce the appellate processing time by 60days in each affected appeal, and free up valuable resources for other critical functions.

The requirements at 38 U.S.C. § 5104 (Decisions and Notices of Decisions) state, interalia, that when VA notifies a claimant of a decision, “[t]he notice shall include anexplanation of the procedure for obtaining review of the decision.” 38 U.S.C. § 5104(a).Therefore, VA already has the statutory authority to incorporate this recommendation bymodifying its regulation at 38 C.F.R. § 3.2600(b). The right to elect the traditionalappellate process or a post-decision review from a DRO is certainly part of the“procedure for obtaining review.” Only instructions at section 3.2600(b) mandate thatVA send an appellant the appeal election letter after submission of an NOD, followed bythe regulatory 60-day delay in processing the appeal.

VA’s notice statute at section 5104 does not mandate the administrative delay causedby the regulation at section 3.2600. Therefore, VA should amend section 3.2600(b)(including any conforming amendments, if necessary) to mandate that when VA issuesa decision notice, such notice will include the procedure for obtaining a post decisionreview by a DRO and/or a traditional appeal process.

Considerations

This change will more uniformly comply with the intent of the controlling statute.

The cost benefit analysis anticipates that the approximate 27 FTE VA will be able toredirect is comprised of claims’ assistants, when in reality, VSRs and DROs must also

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deal with DRO election letters at some regional offices. This change will therefore allowVA to redirect employee functions from appeals administrative duties to rating dutiesand other administrative duties that directly affect rating cycle times, (e.g., establishingcontrol of rating claims).

This regulation change would be a rule of agency procedure or practice, which, subjectto OMB’s agreement, could be issued without the lengthy requirements for publishing aproposed rule and soliciting public comment under the Administrative Procedure Act.

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2.2 Convert the local appellate process into a single-flow system using the DROprogram as the model, thereby providing de novo review on all appeals

Introduction

To implement this proposal, VA would amend section 3.2600 to serve as the guidingregulation for a single-avenue appellate process. There could be numerous benefits tosuch an amendment.

In all locally appealed cases VA could undertake proper development or review action,and following such action, resolve the disagreement by potentially granting the benefitsought, as contemplated by the authorizing statute at section 7105 without the claimanthaving to choose between two choices he/she poorly understands. VA would no longerbe required to explain the DRO election process to claimants; therefore, no unintendedharm could come to those who fail to understand such process. And most importantly,VA could resolve more appealed cases locally and earlier in the appeals process,thereby reducing the number of total appeals proceeding to the Board.

If implemented, this recommendation would subsume recommendation 2.1.

OGC has indicated this proposal reflects a defensible interpretation of 38 U.S.C. §7105(d)(1). No legal objections were raised by OGC.

Background

A claimant who files a timely NOD may, at the claimant's option, request that the ratingboard decision be reviewed by a DRO. The regulations governing the DRO procedureare found at 38 C.F.R. § 3.2600. The review is de novo (that is, the DRO provides anew and complete review without giving any deference to the fact that other ROpersonnel previously decided the claim). In addition to DROs, de novo review may beconducted by the VSCM at VA's discretion. 38 C.F.R. § 3.2600(a) (2010). SinceDecember 1997, DROs have been taking the place of hearing officers. See Review ofBenefit Claims Decisions, 66 Fed. Reg. 21,871, 21,872 (May 2, 2001). The DROprogram went from a pilot program to a permanent program in 2000. See VBA TrainingLetter 03-01, "Duties and Responsibilities of the [DRO]" (Jan. 21, 2003).

The DRO review process is not available unless the claimant has filed a timely NOD.The DRO review process is an optional review of an RO rating decision - a claimantdoes not have to elect a DRO review in order to appeal an RO decision to the BVA. If aclaimant does not want to seek a DRO review, he or she does not have to request it.Unfortunately, many claimants who could benefit from a DRO review early in theappellate process miss such an opportunity merely out of confusion.

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Under VA's regulations, a claimant has a limited period of time in which to request aDRO review. Upon receipt of the NOD, the RO will, before issuing an SOC, notify theclaimant in writing of his or her right to a DRO review. The claimant must then requestDRO review within 60 days after the date the VA mails the notice. This 60-day periodmay not be extended. It is important to note that if the claimant fails to request reviewunder this section not later than 60 days after the date VA mails the notice, VA willproceed with the traditional appellate process by issuing an SOC. 38 C.F.R. §3.2600(b) (2010).

If the claimant requests a DRO review, the DRO will issue a new decision afterconsidering all evidence of record and applicable laws, and without giving anydeference to the decision being reviewed. Furthermore, the DRO may conduct anyadditional development of evidence he or she considers necessary to resolve anyissues addressed in the NOD. The DRO may also hold an "informal conference" withthe claimant. The purpose of the informal conference is to clarify the issues theclaimant wishes to appeal, provide explanations, and identify additional sources ofpertinent evidence. The informal conference may be conducted by telephone,videoconference, or in person. Additionally, if the claimant requests it, the DRO willconduct a personal hearing. 38 C.F.R. §§ 3.2600(a) and (c)(2010).

VA’s regulation at section 3.2600 cites, inter alia, 38 U.S.C. § 7105 (Filing of notice ofdisagreement and appeal) as its statutory authority. The portion of the authorizingstatute pertinent to this discussion is found at subsection (d)(1), which states:

Where the claimant, or the claimant's representative, within the timespecified in this chapter [38 USCS 7101 et seq.], files a notice ofdisagreement with the decision of the agency of original jurisdiction, suchagency will take such development or review action as it deems properunder the provisions of regulations not inconsistent with this title. If suchaction does not resolve the disagreement either by granting the benefitsought or through withdrawal of the notice of disagreement, such agencyshall prepare a statement of the case.

38 U.S.C. § 7105(d)(1).

Justification

Although the Secretary has exercised his rulemaking authority to create the DROprogram, such a program is clearly not required by statute. In practical application,section 3.2600 administratively creates a “dual smoke stack” appellate stream—onethat is more administratively burdensome than that required or contemplated by theauthorizing statute. For example, VA received approximately 150,000 NODs inFY2010. Section 3.2600 requires VA to provide DRO election rights to thoseappellants, which is in itself an action required only by regulation, not by statute. Thenotice of such rights lengthens appeals by 60 days per case. Further, if a claimantchooses the traditional appellate process and does not submit evidence not considered

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in the original decision, then the RVSR processing that appeal lacks the authority toaward the claimant the benefits sough on appeal. The RVSR is instead instructed toissue an SOC.

This restriction is arguably at odds with subsection 7105(d)(1), which states in pertinentpart: “Where the claimant . . . files a notice of disagreement . . . [VA] will take suchdevelopment or review action as it deems proper . . .. If such action does not resolvethe disagreement [ ] by granting the benefit sought . . . [VA] shall prepare a statement ofthe case.” 38 U.S.C. § 7105(d)(1) (emphasis added). The statute clearly provides thata “review action” following submission of a timely NOD authorizes VA to “grant thebenefit sought.” However, VA’s implementing regulation only allows such actions if theclaimant elects a DRO review. This regulatory restriction is potentially harmful to VAclaimants who could otherwise benefit from a DRO review since in some circumstances,they are the only ones specifically authorized to implement the instruction contemplatedby the controlling statute. Failing to elect a DRO review within the 60-day windowrequired by VA’s regulation can harm other claimants who could also benefit from aDRO review.

In essence, section 7105 provides an avenue for local RO relief following submission ofan NOD, while section 3.2600 provides for two avenues, but where only one of thoseavenues provides for local RO relief as contemplated by section 7105. We believethere may soon be a remedy to this inefficient process.

VA’s proposal to provide the Board first-instance jurisdiction on evidence submitted by aclaimant with or subsequent to submission of a substantive appeal (see section 1.1) hasreceived overwhelming support from congressional and VSO stakeholders. If Congressenacts that proposal, an extensive workload (as much as 60,000 SSOCs in the firstyear) will be lifted from local appellate teams across the Nation. Therefore, if suchactions take place, rather than eliminate the DRO program, we propose that VA amendsection 3.2600 to make the DRO program encompass all appeals at the local level intoa single appellate stream, thereby eliminating the “traditional” appellate process.

In approximately 2007-2008, VBA attempted to propose such a rule change; however,senior leadership felt that ROs lacked the number of qualified personnel sufficient toconvert all RVSRs assigned to local appellate teams to DROs. In this scenario, such apersonnel shift would not be necessary because the roadblocks that prevented theprevious proposal from becoming a reality would be eliminated by the passage oflegislation reversing the Board’s first-instance jurisdiction.

Simply put, because of the vast reduction of the number of SSOCs VA would berequired to issue (and the need to issue separate DRO election letters), there would beno need for the “traditional” appellate process, nor would there be a need to maintainthe current RVSR staffs as part of local appellate teams. Appeals team RVSRs wouldbe reassigned back to the Rating Board. Some stations may need to slightly increasethe DRO staff, but such a slight increase in staff, if needed, should not require tappinginto unqualified personnel.

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Considerations

This recommendation will subsume the foregoing recommendation at section 2.1, butwill have all of the same benefits as that recommendation. However, this cannot likelybe submitted as an interim rule change.

VA will be able to redirect RVSRs on the local Appeals Teams back to the Rating Teamso that rating claims can be addressed.

All local appeals will receive a de novo review, which will resolve more appeals withoutthe need to submit such appeals to the Board. This will also shorten the overall appealsprocess while simultaneously shortening the initial decision-making process.

The appeals process will be simplified for all appellants.

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2.3 Eliminate the discretion found in 38 C.F.R. § 3.326 when determiningwhether to accept private evidence for rating purposes (examination byexception)

Introduction

VA should amend 38 U.S.C. § 5125’s corresponding regulation, 38 C.F.R. § 3.326, byadding new language that would require VA to accept a private opinion or examinationreport if VA determines that the report is adequate for rating purposes. The regulationchange would essentially change the “may” in paragraph (b) to “shall” or “must.”

In order to solidify other suggestions herein, VA should further amend section 3.326 tomake clear that when VA receives evidence (private or VA) that supports a favorabledecision on a service-connection or increased-rating claim, where such evidence meetsthe amended requirements of section 3.326, then all requirements contained in 38C.F.R. § 3.159 are satisfied.

OGC agreed that this proposal represents a defensible exercise of VA’s discretionaryauthority under 38 U.S.C. § 5125.

Background

Numerous developmental procedures in the VA claims’ process collectively add unduedelay. For example, rather than making timely decisions on compensation claims whenevidence development may be complete, VA routinely continues to develop claims.These actions feed public perception that VA would rather not grant a claimed benefitand simply continue to develop it instead.

The situation described above results in delayed development of claims and numerousappeals, which are followed by remands from the Board and/or the Court. In many ofthese cases, the evidence of record may support a favorable decision on the appellant’sbehalf yet the appeal is remanded nonetheless. These remands usually do nothing butperpetuate the hamster-wheel reputation of Veterans’ law. In fact, BVA remandsnumerous cases for no other reason but to obtain a VA medical opinion merely becausethe appellant submitted a private medical opinion. Identical actions routinely occurduring the initial stages of a claim as well. Such actions waste valuable VA resources.

Justification

VA essentially requests medical examinations and/or opinions in cases where theclaimant has already submitted evidence and/or opinions that are adequate for ratingpurposes. VA claimants desiring to secure their own medical evidence, including a fullyinformed medical opinion, are entitled by law to do so. If a claimant does secureadequate medical evidence, there is no need in practicality or in law for VA to seek itsown evidence.

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Congress enacted 38 U.S.C. § 5125 for the express purpose of eliminating the former38 C.F.R. § 3.157(b)(2) requirement that a private physician’s medical examinationreport be verified by an official VA examination report prior to an award of VA benefits.Section 5125 states:

For purposes of establishing any claim for benefits under chapter 11 or 15of this title, a report of a medical examination administered by a privatephysician that is provided by a claimant in support of a claim for benefitsunder that chapter may be accepted without a requirement forconfirmation by an examination by a physician employed by the VeteransHealth Administration if the report is sufficiently complete to be adequatefor the purpose of adjudicating such claim.

38 U.S.C. § 5125 (emphasis added). Therefore, Congress codified section 5125 toeliminate unnecessary delays in the adjudication of claims and to avoid costsassociated with unnecessary medical examinations. Notwithstanding the elimination of38 C.F.R. § 3.157, and the enactment of 38 U.S.C. § 5125, VA routinely refuses torender decisions in cases where the claimant secures a private medical examinationand/or medical opinion until a VA medical examination and/or medical opinion areobtained. Such actions delay decisions and prompt needless appeals.

When claimants submit private medical evidence that is adequate for rating purposes,VA should mandate that it must decide the case based on such evidence rather thandelaying the claim by requesting additional and unnecessary medical examinations andopinions from the agency. Such a mandate will preserve VA’s manpower andbudgetary resources; help reduce the claims backlog and prevent needless appeals;and most importantly, better serve disabled Veterans and their families.

Considerations

This proposal represents a significant cultural change and shift in the mindset of thosehandling disability claims. It is imperative that training and follow-up training beprovided to ensure adjudicators adhere to this policy.

As an accountability measure, this proposal, if implemented, may be followed by thedevelopment of a new STAR quality element for “timeliness.” For example, if adecision maker orders a VA examination unnecessarily when an adequate privatemedical report was of record, then a ”timeliness” error could be called by STAR.

VA will be able to issue favorable decisions immediately in a significant number ofclaims, thereby improving timeliness and, more importantly, improving customersatisfaction.

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The value of this proposal will only increase as the VASRD continues to be updated.For example, more private medical reports can potentially be used for rating purposesas the rating criteria is updated and modernized.

The claimant will not be harmed by this proposal, as VA will not be required to rate onany private medical evidence that is not adequate for rating purposes.

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2.4 Amend 38 C.F.R. § 3.159 to make clear that development will cease when VAcan issue a favorable decision on the issue at hand

Introduction

VA should amend pertinent sections of 3.159 to make clear that when considering aclaim for compensation, an increase in compensation, pension, or DIC, if VA receivesevidence that complies with the requirements set forth in the applicable section of theRating Schedule, and where evidence of record otherwise supports a favorable decisionon the issue at hand, no further development will be undertaken.

Such an amendment is consistent with the controlling statute, 38 U.S.C. § 5103A,precedent decisions of the Court, and is keeping with the non-adversarial, pro-claimant,Veteran-friendly, nature of VA’s benefits delivery system. It further conforms andsolidifies changes requested in section 2.3. Furthermore, in reviewing this proposal,VA’s OGC believed that an argument could be made that, once VA has sufficientevidence to grant the claimed benefit, the claim is substantiated, and thus VA maycease development on the ground that further development would not aid insubstantiating the claim.

VA’s OGC indicated that this proposal would likely have some positive impact on claimadjudication timeliness. Furthermore, OGC stated that no authority explicitly requiresVA to exhaustively develop every claim until it is certain no evidence supporting ahigher degree of disability or earlier effective date is available.

Background

Regulations already allow VA to cease further development when “service connection”can be awarded. 38 C.F.R. § 3.304(c) (stating that “[t]he development of evidence inconnection with claims for service connection will be accomplished when deemednecessary but it should not be undertaken when evidence present is sufficient for thisdetermination.”) The Court has held that this regulatory language “gives VA thediscretion to determine how much development is necessary for a determination ofservice connection to be made.” Shoffner v. Principi, 16 Vet.App. 208, 213 (2002)(emphasis added); see 38 U.S.C. § 7150(d)(1) (stating that “agency will take suchdevelopment or review action as it deems proper under the provisions of regulations notinconsistent with this title” once an appeal is filed).

There may be an expansive body of law that describes VA’s duty in providingcontemporaneous examinations in many cases; however, the duty does not extendwhen evidence of record is adequate for rating. See 38 C.F.R. § 3.326 (2010)(explaining VA’s authorization to provide examinations in original and increased-ratingclaims when evidence is otherwise not adequate for rating). These instructions applyequally to VA’s duty to notify. For example, VA’s duty to notify regulation specifies thatVA is only required to “notify” claimants of “information and medical or lay evidence that

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is necessary to substantiate the claim.” 38 C.F.R. § 3.159(b)(1)(2009). Claims ready torate wherein the benefit sought will be awarded are already substantiated.

Justification

This type of clarification of VA’s duty to assist regulation will improve timeliness acrossthe entire claims process by ending case development when VA can issue favorabledecisions. Further, such a clarification will give effect to the changes requested in thisinitiative, thereby helping to focus the mindsets and attitudes of VA employees to themission of providing benefits in a timelier manner.

Considerations

This change will further assist in shifting the culture of VBA to one that encourages finaldecisions at the earliest possible stage of development. VA continues development inmany cases when a favorable decision can be made based on evidence of recordbecause of a near universal belief that all potential development must be completebefore a decision can be rendered. While this may be true for many denials, it is nottrue for many cases where VA can award the benefit sought.

It will help reverse the attitudes of many stakeholders that VA “develops to deny” cases.

The new regulation will conform to other regulations and court interpretations thatalready encourage this very practice.

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2.5 Amend 38 C.F.R. § 3.156 to allow VA to reopen claims based upon thesubmission of new evidence, rather than new and material evidence, bymodifying the definition of “material” as it relates to reopening previouslydenied claims

Introduction

From the original VCAA notice, to the administrative and judicial appellate systems, theentire process of adjudicating new and material claims is inefficient and cumbersome.Therefore, this proposal will redefine the “material” component so that the threshold forreopening a previously denied claim is lower than the current standard, thereby allowingmore of these types of claims to be adjudicated on their merits.

The complexity of these claims is demonstrated by the pre-adjudication analysis and therequired VCAA notice that is tailored to the reason(s) of the previous denial and theexplanation of the type of evidence sufficient for to reopen the claim. This is arguablythe most complex notice requirement issued by ROs. The notice requirement itself isfurther complicated by the current claims processing model. Generally, RVSRspossess the skill necessary to determine the reasons for a previous denial and type ofevidence required to satisfy the “material” element so that the claim can be successfullyreopened. Yet, the current model allows non-rating employees to analyze the case andissue the notice letters.

A related recommendation as explained below is that VA issue administrative notices,along with an explanation of what constitutes “new and material,” when a claimantseeks to reopen a previous denied claim on the exact same evidence that waspresented with the previous denial. Such notices will not be subject to appeal.

Background

The Veterans’ Judicial Review Act, Public Law 100-687, enacted on November 18,1988, codified the previous regulatory provision regarding reopening claims based uponthe submission of new and material evidence. Section 5108 of title 38 of the UnitedStates Code provides:

If new and material evidence is presented or secured with respect to a claim thathas been disallowed, the Secretary shall reopen the claim and review the formerdisposition of the claim.

Former title 38 C.F.R. §§ 3.201 and 3.205, which related to the adjudication of claimsinvolving compensation or pension based upon new and material evidence presentedafter final disallowance, were published in the Federal Register on November 27, 1948,as part of the revision of all VA regulations. The preamble noted that the revision, whichwas subsequent to the original codification (of title 38 C.F.R.), effective June 1, 1938,“consists of all Veterans’ Administration material (except descriptions of organization

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and locations of field establishments) currently effective as of November 1, 1948.”Section 3.205 of this publication, entitled “What constitutes new and material evidence”showed the following:

Evidence which is solely cumulative or repetitious in character will notserve as the basis for reconsideration of the previous decision. Whenevidence relates to the same specific fact to which proof was beforeadduced of a like character it is cumulative but not when it relates to a newfact respecting the general question or point in issue. To constitutematerial evidence the facts offered must relate and go to the issue, orhave a legitimate and effective influence or bearing on the decision inissue.

A Federal Register publication dated February 24, 1961, shows that the provisionsrelating to new and material evidence were moved to section 3.156(a)-(g). Thedefinition of new and material evidence, exactly as shown above, appeared in section3.156(g). Provisions relating to the effective date of an award based upon new andmaterial evidence submitted either before or after the appeal period were in section3.400(q). See 26 F.R. 1561. A Federal Register publication dated December 1, 1962,shows that section 3.156 was amended to cancel paragraphs (a), (b), (c), (f) and (g).The provisions relating to the submission of new and material evidence submittedduring the appeal period remained as paragraph (a); paragraph (b) contained theprovisions relating to supplemental service department records. The provisioncontaining the definition of new and material evidence was deleted from the regulation.

Section 3.156 was substantially the same (that is, it consisted of two subsections,3.156(a) and 3.156(b)) at the time the VJRA was passed in 1988. As noted above, theVJRA codified the provisions relating to the submission of new and material evidence at38 U.S.C. § 5108. The legislative history surrounding the passage of the VJRA showsthat the codification of the provisions relating to reopening of claims was “not intendedto alter the treatment presently being afforded to claimants seeking to reopen theirclaims. The committee believes that codification of this right and authority is animportant safeguard to veterans”. H.R. Rep. 100-963, 1988 U.S.C.C.A.N. 5782, 5819.

After the passage of the VJRA, VA amended its regulation in 1990 to once again definethe term “new and material evidence”. Sections 156(a) and (b) were re-designated assections (b) and (c), and new section (a) was added as follows:

(a) New and material evidence means evidence not previously submittedto agency decision makers which bears directly and substantially upon thespecific matter under consideration, which is neither cumulative norredundant, and which by itself or in connection with evidence previouslyassembled is so significant that it must be considered in order to fairlydecide the merits of the claim.

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Effective August 29, 2001, VA again amended its definition of new and materialevidence in subsection 3.156(a) after the passage of Public Law 106-475, the Veteransclaims Assistance Act of 2000. See 66 FR 45620. The explanation in the preamble tothe final rule shows that VA changed the definition of new and material evidence todefine what actions it will take to assist a claimant in submitting evidence to reopen afinally denied claim. It was noted that in VA’s view, “it is helpful for the claimant tounderstand the nature of the evidence that will reopen a claim, in light of the fact that itwill now be easier for a claimant to reopen a claim because, unlike before, the claimantwill now have VA assistance in obtaining evidence that is potentially new and material.”The following definition was added as section 3.156(a):

(a) A claimant may reopen a finally adjudicated claim by submitting newand material evidence. New evidence means existing evidence notpreviously submitted to agency decision makers. Material evidencemeans existing evidence that, by itself or when considered with previousevidence of record, relates to an unestablished fact necessary tosubstantiate the claim. New and material evidence can be neithercumulative nor redundant of the evidence of records at the time of the lastprior final denial of the claim sought to be reopened, and must raise areasonable possibility of substantiating the claim.

Although in 2006 VA amended subsection 3.156(c) relating to service departmentrecords, there have been no substantial changes to 3.156(a) since the 2001amendment.

The fact that the VJRA codified “new and material” in section 5108 with the expressintent of “not altering the treatment presently afforded to claimants seeking to reopentheir claims”, indicates that only Congress could remove the requirement that evidencebe material. An argument can nonetheless be made that to remove the “material”component of new and material evidence would lessen the burden on claimants sincethen the only remaining requirement would be that the evidence be “not previouslyconsidered” by VA decision-makers.

VA’s reaction to the VJRA was to amend its regulation in order to make clear what kindof evidence is required to be both new and material. Following the VJRA, the Court ofAppeals for Veterans Claims weighed in, describing material evidence as that which isrelevant and probative of the issue at hand. See Wray v. Brown, 7 Vet. App. 488(1995); Morton v. Principi, 3 Vet. App. 508 (1992).

The 2001 regulatory amendment specifically describes each of the two requirements forreopening whereas prior regulatory definitions did not specifically define each term. Itappears that VA interpreted Congress’s intent in passing the VCAA was to, amongother things, make clear via regulation what type of evidence would assist claimants inreopening and possibly establishing a previously denied claim.

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Since Congress has expressly stated that “new and material” evidence must bepresented, it is likely that a regulatory amendment deleting the requirement that theevidence must be material would, upon judicial review, be found to exceed statutoryauthority. Although, it is equally as likely that such a regulatory amendment wouldliberalize rather than limit statutory criteria and therefore not exceed statutory authority.

Section 5108 constitutes a statutorily defined exception to finality of claim decisions,and Congress defined the scope of that exception by providing for reopening wherethere is new and material evidence. We risk violating congressional intent if we were toread one of the criteria out of the statute. Furthermore, elimination of the materialityrequirement in its entirety would permit a claimant to reopen a claim by submitting anynew evidence, regardless of whether it pertained to the claim for which reopening issought. This would require VA, essentially upon request, to revisit claims on the samefactual basis on which they were previously denied, which would tend to clog thesystem with endless reviews of matters already decided and conflict with thelongstanding prohibition on consideration of claims on the same factual basis on whichthey were previously denied claim. See 38 U.S.C. § 7104(b).

However, VA has latitude in how it defines the term “material” for purposes ofimplementing the statute. Congress has not defined that term, leaving it to VA to do so.Although the former Court of Veterans Appeals in Colvin v. Derwinski, 1 Vet. App. 171(1991), failed to give any deference to VA’s regulatory interpretation of the term andsought to impose its own definition, drawn from Social Security case law, Colvin wasoverruled by the Federal Circuit in Hodge v. West, 155 F.3d 1356 (Fed. Cir. 1998),which indicated that, under the Supreme Court’s precedent in Chevron, the Court wasrequired to defer to a reasonable interpretation of a statute in VA regulations. AlthoughVA revised 38 C.F.R. § 3.156(a) concerning new and material evidence in 2001 toincorporate language somewhat similar to that propounded by the Court of VeteransAppeals in Colvin, in light of Hodge and Chevron, VA may revise its definition to providea more liberal standard for reopening so long as it can articulate a reasonable basis fordoing so. For example, VA might define “material” as encompassing any evidence thatrelates to the claim at issue.

Justification

Redefining “material” to allow more claims to be decided on their merits may increaseclaims efficiency. From the original VCAA notice, to the administrative and judicialappellate systems, the entire process of adjudicating new and material issues isinefficient and cumbersome, and should be modified to reflect a more modern process.For example, at the beginning of the new and material claims process, VA’s noticerequirements under the VCAA require (1) notice tailored to the reason(s) of the previousdenial, and (2) an explanation of the type of evidence sufficient for reopening suchdenial. See Hupp v. Nicholson, 21 Vet.App. 342, 352-53 (2007); Locklear v. Nicholson,20 Vet.App. 410, 416 (2006) (citing Kent v. Nicholson, 20 Vet.App. 1, 10 (2006). Thiseffectively requires VA to perform a pre-adjudication analysis of the claim prior toissuing the required VCAA notice.

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The notice requirement itself is further complicated by the current claims processingmodel. Only RVSRs generally possess the skill necessary for determining the reasonsfor a previous denial and the type of evidence required to satisfy the “material” elementto successfully reopen the claim. Yet non-rating employees issue the notice letters. VAwould be able to standardize all notice letters for Veterans attempting to reopenpreviously denied claims and ensure that such notice is delivered by the time VAreceives a claim.

In many attempts to reopen previously denied claims, VA undertakes partialdevelopment per its duty to assist rules even before the claim is “reopened.” At thedecision stage, VA must review all of the old and new evidence to determine whetherthe new evidence, either by itself or in conjunction with the old evidence, may impactthe outcome of the claim. In all respects, this constitutes a merits-based decision.

When VA issues a decision that does not reopen a claim because the evidencesubmitted does not qualify as new and material, it receives NOD’s on many suchdecisions. For FY 2009 to 2010, VA received 5,183 NODs on cases denied whereevidence submitted was determined as not new and material. The majority of new andmaterial cases that are submitted to the Board on appeal are actually reopenedbecause the Board determines new evidence submitted by the claimant does satisfy thecorrect evidentiary threshold. Those cases are usually then remanded for VA toundertake any additional development, followed by a merits-based decision.

Because VA is essentially rendering a merits-based decision on all cases involving adetermination of whether “new” evidence is also “material,” this proposal will lower thethreshold for material to the point where any time VA receives new evidence (not aduplication of evidence), and such new evidence pertains to the previously deniedissue, VA will render a merits-based decision. This will significantly lower the number ofcases where a claim is not reopened due to evidence not being new and material.When such cases are further denied and appealed, the appeal will consider the meritsof the claim rather than merely considering whether evidence meets a subjectivethreshold only for the appellate body to decide that it does.

Despite such a lowered threshold for reopening a previously denied claim, manyclaimants will nonetheless continue attempting to reopen such claims on nothing morethan a statement supported by no medical or lay evidence, such as: “I wish to reopenmy claim for service connection for XXX disability.” In such cases, it is further proposedthat VA issue an administrative letter informing the claimant of the new, and much lowerevidentiary threshold, AND, that because his/her attempt at reopening a previous denialcontained NO medical or lay evidence that pertains to such denial, his/her claim is notreopened.

Finally, it is recommended that such administrative notice not constitute a decision opento appeal because the administrative notices (1) will not be a “rating decision,” becausethe case is literally not subject to reopening on NO additional evidence, and (2) this

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proposition is supported by 38 C.F.R. § 3.104. The previous denial, in cases where NOevidence is submitted in support of reopening such denial, constitutes a final andbinding agency decision and “shall not be subject to revision on the same factual basisexcept by a duly constituted appellate authorities or except as provided in 3.105 and3.2600 of this part.” 38 C.F.R. § 3.104(a)(2010). If a claimant attempts to reopen aprevious denial (with no additional medical or lay evidence) within the appellate periodof that denial, then the request to reopen should constitute disagreement of the originaldenial anyway. This will ensure the claimant is afforded a proper avenue to a merits-based review on appeal.

OGC did not object to providing no appellate rights in such cases; however, OGC didadvise that there would be certain litigation risks to such an approach. Furtherdiscussion would therefore be helpful.

Considerations

We expect no opposition from outside stakeholders, as it is difficult to view this proposalin any light other than Veteran-friendly.

Opponents of this change may argue that claimants could continue reopening theirclaims repeatedly; however, that is essentially the current reality. The difference is thatthe currently practice is more complex than the new proposed recommendation.

Following this change, no argument could be made that VA is required to “tailor” noticeletters to new and material claims. Although, changes to VA’s section 5103 noticemade by the Veterans Benefits Improvement Act of 2008 may already have eliminatedthe “tailored” notice requirement for new and material evidence claims.

No more appeals will be generated solely on the basis of a claimant having notsubmitted new and material evidence, just for that appeal to be granted and a merits-based decision be rendered at a later point. This should make the claims process moreefficient.

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2.6 Amend VA’s apportionment regulations

Introduction

If proposed legislation under section 1.2 of this initiative is not passed, then the proposaldescribed herein aims to amend certain apportionment regulations so that set statutoryamounts are paid. This proposal will authorize apportionments to the spouse and/orchildren at the statutory amount payable to the eligible dependents without makinghardship or income determinations, thereby bypassing the complex and time-consumingdual due process procedures normally associate with such issues. The proposedrevision will also provide consistency in the adjudication of apportionment claims andimprove the effectiveness of the adjudication process.

VA should revise 38 C.F.R. § 3.451 to authorize apportionments to the spouse and/orchildren at the statutory amount payable to eligible dependents without engaging in thecurrent procedural delays. This action is necessary to maintain consistency in theadjudication process and to make the process more efficient and less subjective. Thechanges will reduce the workload and the amount of time spent on investigating thevalidity of apportionment claims and will therefore make the apportionment processmore objective and fairer for the Veteran and claimant.

See cost benefit analysis for section 1.2. Although the recommendation in this proposalwould not result in the same amount of added efficiency as section 1.2 of this initiative,increased efficiency would nevertheless be realized.

Background

Apportionment of a Veteran’s Compensation: Regulations at 38 C.F.R. § 3.453 providethat compensation will be apportioned based on the factors governing specialapportionments in 38 C.F.R. § 3.451. VA should remove apportionment ofcompensation from the types of benefits that may be specially apportioned undersection 3.451 and amend current section 3.453 to provide a general rule that theamount of compensation that is apportioned to a Veteran’s dependent will be thestatutory amount payable to the Veteran for the eligible dependent.

We further propose that if there is more than one child, any amount payable for thechildren will be equally divided among the children. The only exception to this rulewould be that the apportionment amount for a child attending an approved educationalinstitution shall be the amount prescribed by 38 U.S.C. § 1115(1)(F). In doing this, wepropose to no longer make equity determinations regarding apportionments in claims forcompensation. Instead, VA should standardize the process of apportionment forcompensation by creating a bright-line rule that will provide the amount that VA pays tothe Veteran for a spouse, child, or dependent parent to be apportioned.

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The rates for apportionment of disability compensation generally will be equal to therates of additional compensation for dependents established under 38 U.S.C. § 1115.However, the apportioned amount payable to each child may not correspond preciselyto the statutory amounts payable for children. In accordance with 38 U.S.C. § 1115, theamount payable to a Veteran for one child is greater than the amount payable for eachchild in excess of one. We believe the apportionment amount to each similarly situatedchild should be the same. The proposed rule would therefore provide that, when thereis more than one child, the amount payable for such children under section 1115 will bedivided equally among the children.

The only exception we propose to this rule would be for any amount payable for a childwho is over 18 and attending an approved educational institution. In accordance with38 U.S.C. § 1115(1)(F), Congress authorized a higher payment for children over 18 whoare attending school. We propose that an apportionment to such child will be at thatstatutory rate and will not be distributed among other children. The current amountspayable for children under 38 U.S.C. § 1115 are available to the public on VA’s website.

Justification

VA spends an excessive amount of time and resources investigating income and otherfacts for purposes of making apportionment determinations in compensation cases.Implementing these proposed amendments would require far fewer VA resources,thereby freeing these resources to speed the adjudication of other claims, whilesimultaneously making the process more objective and transparent for Veterans andapportionees.

The proposed revisions would improve the efficiency and effectiveness of theadjudication process and would provide a consistent way to resolve apportionmentclaims throughout the various regional offices. Further, basing apportionment amountson the rates of payments for dependents authorized by statute is consistent with thepurpose of 38 U.S.C. § 1115, which indicates that a Veteran will be paid “additionalcompensation for dependents”. It is reasonable to believe that Congress intended thatthe Veteran would use the amount of the increase to support his or her dependents.

We further propose to amend section 3.453 to indicate that VA will not apportionbenefits under this section when a Veteran’s disability is rated less than 30 percent.The statute upon which the fixed amount to be apportioned would be based, does notallow VA to pay additional compensation for dependents to a Veteran who is rated lessthan 30 percent. As stated above, we intend that apportionment generally willcorrespond to amounts payable for dependents. Accordingly, we do not intend toapportion compensation where no payment is authorized for dependents. Further, ininstances where the veteran is rated less than 30-percent disabled, and thus receivesno additional amount for dependents, an apportionment would not permit payment of a“reasonable amount to any apportionee,” particularly if there is more than onedependent, and would be precluded by section 3.458. Therefore, we believe that it is

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consistent with the overall scheme of apportionments to not apportion compensationpaid to veterans rated less than 30-percent disabled.

Considerations

See section 1.2 for considerations.

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2.7 Amend 38 C.F.R. § 3.155(c) to mandate the use of VA Form 21-526EZ oralternate form

Introduction

This proposal seeks to mandate the use of the VA Form 21-526EZ. This form iscurrently used for reopened claims, claim for increases, and secondary serviceconnection claims. By mandating this form (in the same way VA mandates VA Form21-526), VA is able to better communicate and collect the pertinent information neededfrom claimants up front, thereby avoiding confusion as to the specific issue beingclaimed, whether treatment has been received, and whether assistance is in factneeded to obtain private medical records. When combined with proposal 2.8, whichproposes to attach required VCAA notices to certain benefits applications, the benefitsto the Veteran and to VBA are remarkable. By mandating the use of VA Form 21-526EZ, VA can significantly reduce development time.

Implementing this change will require a regulatory amendment to 38 C.F.R. §3.155(c),which currently suggests that an informal claim is all that is required for a reopened orincreased evaluation claim. In its review of this proposal, OGC agrees that VA has theauthority to mandate claims forms for these types of claims. Preliminary analysisindicates that removal of paragraph (c) of this section would satisfy this proposal. It isimportant to note that although VA would mandate the use of the VA Form 21-526EZ,claimants would still retain the right to file an informal claim as described in paragraph(a) of this section. In reviewing this initiative, the OGC has concluded that VA maymandate a particular form for reopened, secondary, and increased evaluation claims.

VA has the statutory authority to make VA Form 21-526EZ mandatory. The law statesthat “[a] specific claim in the form prescribed by the Secretary [ ] must be filed in orderfor benefits to be paid or furnished to any individual under the laws administered by theSecretary.” 38 U.S.C. § 5101(a) (emphasis added).

Justification

This proposal facilitates specificity and clarity of the claimed issue, whether the claimanthas been treated, and whether he or she wants assistance from VA to obtain privatemedical records.

When combined with proposal 2.8, which proposes to attach the required VCAA noticeto VA forms, the benefits to the Veteran and to VBA are noteworthy.

Compensation Service realizes there would be logistical challenges and a stakeholderadjustment period while transitioning to the mandated use of certain VA forms and awayfrom the many less-than-formal methods in which VA currently receives claims.However, with the proper communication and stewardship, such a transition could be

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well received by VA stakeholders, especially when the extent of claims processingimprovement and benefit to Veterans are understood.

Claims received on informal routes of communication, such as on a VA Form 21-4138,or from a claimant letter, would serve as an informal claim. Eventually, claim submittalson the proper form would become the status quo, especially with an aggressiveoutreach program. In the meantime, any informal claims should be controlled under anEP not in the rating bundle.

Considerations

By making minor modifications to forms and improving certain communication toclaimants in relation to those modifications, VA can realize significantly increasedefficiency to this otherwise cumbersome process.

Some logistical hurdles of mandating use of certain forms will be mitigated by the factthat private and VSO representatives represent a large portion of VA claimants.

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2.8 Streamline VA’s duty to notify claimants of information necessary tosubstantiate their claims by attaching the required notice on VA Forms 21-526, 21-526B, 21-526EZ, 21-8940, 21-527, 21-534, and 21-8640

Introduction

This proposal seeks to amend 38 C.F.R. § 3.159 to allow VA to attach required noticesto VA forms. VA’s Adjudication Procedures Manual generally requires adjudicators tosend a VCAA letter to the claimant notifying him or her of any information or evidencethat is necessary to support their claims. The proposal described herein seeks toamend VA’s current practice by attaching the required VCAA notices to VA forms thatare utilized by claimants to submit their respective disability or death claims. Byexpanding the notification process used by the Fully Developed Claim program, wherethe claimant completes and submits a FDC certification along with the appropriatedisability claim form, VA will experience major improvements in claims processingtimeliness and accuracy for all rating-related claims.

By attaching the VCAA notice to VA claim forms, VA will essentially initiate developmentbefore the claim is received in ROs instead of when the claim is nearly 2 months old.This will shorten the overall development time by eliminating VCAA letters and therequired 30-day wait period in a large percentage of cases.

In its review of this proposal, OGC indicated that amendment of section 3.159 to providenotice of VA’s legal interpretation would minimize litigation risks associated withadvanced notices. Further, OGC noted that H.R. 2383 will accomplish the desiredchange from this proposal.

Background

On November 9, 2000, Public Law 106-475, Veterans Claims Assistance Act, wasenacted, which redefined VA’s duty to assist claimants and mandated specific noticerequirements to the claimant. Based on this law, VA has established procedures thatrequire adjudicators to send VCAA letters to claimants upon receipt of a substantiallycomplete claim. The letter to the claimant notifies him or her of any evidence that isnecessary to substantiate their claim, including medical and lay evidence. The lettertells the claimant the information they must submit and information that VA will attemptto obtain on the claimant’s behalf. Also included in the notice letter is a VCAA NoticeResponse form on which the claimant may elect to have VA decide the claim as soonas possible if he or she has no additional evidence to submit.

While the duty to notify applies to all claims, VA has modified its normal VCAA noticeprocedures in certain cases, such as those claims submitted through the BenefitsDelivery at Discharge and, more recently, the FDC program. In these cases, VAensures the claimant receives the required notice at the time he or she actually files theclaim. To facilitate notice requirements, VA has introduced two new forms as part of the

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FDC program. To participate in the FDC program, Veterans complete and submit anFDC Certification and VA Form 21-526EZ, “Fully Developed Claim (Compensation),” fora compensation claim, or a VA Form 21-527EZ, “Fully Developed Claim (Pension),” fora pension claim. These abbreviated application forms already include the requirednotification to applicants of all information and evidence necessary to “substantiate”their claims.

Justification

Significant improvements in the quality of VA’s claims processing will be realized if thisproposal to attach VCAA notices to VA’s claims forms is implemented. One of the mostcommon errors noted during national quality reviews involve improper VCAA notices.Attaching notices to the applications and requiring certification from the claimant willfacilitate a more standardized and consistent practice of communication, therebyeliminating the need for an adjudicator to determine if a notice is required and/or whattype of language should be incorporated into a notice letter.

VBA can anticipate significant improvements in the speed of claims processing. Sharpreductions in the number of days it takes to complete development will be evident oncethe new procedure is well established in the Veteran community and once other VCAA-related improvements are implemented. Consider the current performance data tablebelow.

PA&I’s National Dashboard -- End of April 2011Pending

Inventory ofClaims

ControlTime

DevelopmentInitiation Time

DevelopmentTime

Total time from receiptof claim to Ready for

Decision802,219 10.5 days 47.1 days 131.3 days 188.9 days

By attaching the VCAA notice to VA claim forms, VA will essentially initiate developmentbefore the claim is received in the regional offices instead of when the claim is nearly 2months old (10.5 + 47.1 = 57.6 days). This will shorten the overall development time byeliminating VCAA letters and the subsequent 30-day wait period.

It is understood that many of pending claims would still require an initial developmentletter for some other reason, (i.e., special issue claim, private records, other claimsinformation needed, etc.). However, even if VA did not have to send out initialdevelopment letters for 30 percent of its incoming rating claims (estimated to be over 1million claims in FY 2011), this would equate to over 300,000 development actions thatcould be avoided, thereby significantly increasing work capacity and improvingdevelopment time nationally by over 10 days.

Considerations

Certain DIC claims and claims to reopen previously denied benefits arguably requiresomewhat of a notice tailored to the facts of the case. However, the newly proposedregulations on VA’s notification duties, as mandated by the Veterans Benefits

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Improvement Act of 2008, will allow VA to standardize the notice for these two types ofclaims, and all others as well. It is therefore imperative VA expedite final promulgationof the new notice regulations.

Some may question whether VA has authority to expand its practice of advanced noticelike that provided in the FDC program—our conclusion is that it does. VA has authorityunder 38 U.S.C. § 501 to implement its own program related to the adjudication ofVeterans’ benefits claims. 38 U.S.C. § 501(a)(4) (Secretary authorized to "prescribe allrules and regulations which are necessary or appropriate to carry out the lawsadministered by the Department and are consistent with those laws, including . . . themanner and form of adjudications”).

Although 38 U.S.C. § 5103(a)(1) requires VA to provide notice "[u]pon receipt of acomplete or substantially complete application," the Federal Circuit held that VCAArequires only generic notice provided sufficiently in advance of an initial VA decision toallow the claimant to assist in developing the claim. See Vasquez-Flores v. Shinseki,580 F.3d 1270, 1280-81 (Fed. Cir. 2009) (“notice described in [section] 5103(a) neednot be veteran specific”); Wilson v. Mansfield, 506 F.3d 1055, 1059 (Fed. Cir. 2007)(notice “must be given to the claimant sufficiently in advance of the initial RO decision toenable the claimant to develop his case. . . . In this way, section 5103(a) ‘ensure[s] thatthe claimant’s case is presented to the initial decisionmaker with whatever support isavailable.’”) citing Mayfield v. Nicholson, 444 F.3d 1328, 1333 (Fed. Cir. 2006).

In light of the forgoing, and assuming that the notice a claimant receives upon receipt ofan application by VA and the notice that a claimant receives in accordance with thisproposal are the same generic notice, we believe that such a process will implementsection 5103 consistent with Congress’ intent as interpreted by the Federal Circuit. Infact, with all things being equal, (i.e., standard notices), the advanced notice is actuallyfar better for claimants because it allows them to initially submit complete claims, avoidunnecessary delays, and reap the benefits of a more efficient claims process byeliminating confusing and often repeated VCAA notifications that frustrate and confuseclaimants.

Despite the above argument being on solid grounds, VA should consider amendingsection 3.159 to either provide legal notice of VA’s interpretation, in which casepublication of a final rule will suffice, or follow notice-and-comment procedures in arulemaking that thoroughly addresses the timing of VCAA notice. Then if challenged,VA will have the benefit of judicial deference regarding its own regulation.

VA’s OGC suggested that VBA establish a policy for identifying the date the advancednotice was sent for purposes of 38 U.S.C. § 5103(b)(1) and 38 C.F.R. §3.159(b), whichindicates the claimant has one year from the date of the notice to send in the evidence.It is suggested that the one-year period begin when VA has actually received theapplication for benefits. OGC also raised the issue of incorporating a certificationrequirement that the claimant must make stating that they acknowledge having receivedand read VA’s notice.

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2.9 Amend 38 C.F.R. § 3.155 to infer and award benefits for certain claims,instead of inviting the claim

Introduction

VA proposes to amend 38 C.F.R. § 3.155 to reverse the current policy of directingemployees to “invite” claims for certain disabilities. Rather, in specific circumstances,VA should infer and award the benefit based on the evidence of record. This wouldprovide benefits to Veterans much faster and reduce incoming claims by as much as80,000 per year.

OGC indicated it would be preferable to implement this policy through rulemakingbecause any such policy affects the scope of a “claim.”

Background

Raters are currently instructed as shown in M21-1MR IV.ii.2.A.1.a, and M21-1MRIII.iv.6.B.6.a, that they are restricted from inferring and granting claims. Rather, theyinvite claims, such as when they notice a presumptive disability in a qualified Veteran’srecord. VA normally receives formal claims that are invited by VA shortly thereafter.Once received, these claims are subject to all applicable law concerning notice and dutyto assist. This is despite the fact that VA has the authority to grant the condition atissue on its own initiative and immediately award the benefit, thereby avoiding thedelays caused by the development of the subsequently received claims.

Justification

While VA should invite many types of claims/issues noted in the record, there are issuesthat should not fall under this instruction. Presumptive and chronic disabilities noted inservice treatment records are two of the easiest types of issues for raters to infer andgrant as long as there is evidence on which to rate the disability.

Because VA has “received” no “claim” in these cases, the section-5103 notice and dutyto assist may not apply. In fact, if VA recognizes a benefit for which a Veteran qualifies,and awards that benefit, then section does not apply.

Conducting business in this manner is beneficial for all involved. Veterans receive abenefit based on a proactive approach, when the Veteran is unaware of entitlement. VAavoids the lengthy development process for the claim that it would otherwise “invite.”

Considerations

OGC noted that implementing regulations should be stated in discretionary, rather thanmandatory, terms in order to authorize VA personnel to grant benefits absent a specific

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claim when they discover a basis for doing so, without imposing on VA an affirmativerequirement.

This regulatory change should be promulgated along with initiative 2.8, which alsoproposes changes to 38 C.F.R. § 3.155. A separate subsection and a modification ofthe title should be considered in implementing this regulation change.

Approximately 120 raters were polled during the Inter-Rater Reliability Study in May2011 and asked how often they identified unclaimed chronic in-service or presumptivedisabilities, which warrant service connection, while processing other claims. Theresults were as follows: 55.8 percent stated once a month; 31.6 percent stated 5-10times per month; 3.3 percent stated 10-20 times per month; and, 4.1 percent statedover 20 times per month.

Noting some limitations in the study: 120 raters surveyed out of 2,882 RVSR/DROsequal approximately 95-percent confidence level and plus/minus 8.7 confidenceinterval. Therefore, while this study is statistically significant, there is a margin of errorthat we would prefer to be smaller. Unfortunately, the survey was interrupted before wecould poll more raters.

The foregoing percentages, when averaged nationwide, equal approximately 153,800cases where issues are identified that are either chronic in nature or presumptive. Wefurther realize there are other benefits that could be award based on other issues, but tokeep the data valid and conservative, we chose to limit the inquiry to these two types ofissues.

We then asked what actions raters take when they identify these issues. Raters solicitthe claim from the Veteran but do not continue the EP 61.6 percent of the time. Fivepercent stated they solicit a claim from the Veteran and continue the EP, for a total of66.6 percent soliciting a claim from the Veteran. This equates to VA solicitingapproximately 100,000 claims per year. If 80 percent respond with a claim, then 80,000cases must be processed through the normal claims process.

On the premise that these numbers hold true, VA could reduce its receipt of claims byup to 80,000 cases per year by reversing this inefficient process.

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2.10 Amend 38 C.F.R. § 3.159 to address instances when private providers refuseto honor VA Form 21-4142

Introduction

This proposal seeks to amend 38 C.F.R. § 3.159(c)(1) to add a provision that expresslystates VA’s policy when a provider refuses to provide VA private records identified by aclaimant on a VA Form 21-4142. This policy is needed based on the frequency bywhich custodians are refusing to honor VBA’s medical release form and the significantdelays that are associated with affected claims. Custodians refuse to honor VA’srelease form because of a multitude of reasons to include, but not limited to: 1) theyperceive the form lacks HIPPA compliance, 2) the request is not on their own form, and3) they believe the form does not conform to certain State laws. In such examplesdescribed above, any future efforts to obtain records from providers would inevitably beunfruitful. Therefore, a clear policy to address instances when custodians refuse tohonor VBA’s release form is needed.

In instances where providers refuse to honor an approved and properly filled outmedical release form, this proposal allows VA to communicate to the claimant that theprovider has refused to provide records and that he or she has 15 days to furnishrecords before VA makes a decision on their claim. OGC reviewed this proposal andagreed that an express provision in section 3.159(c)(1) be added to ensure defensibilityof our procedure. In implementing this proposal, changes to VA’s AdjudicationProcedure Manual will also be required.

Background

Currently, VA uses a completed VA Form 21-4142, Authorization and Consent toRelease Information to the Department of Veterans Affairs, to obtain confidentialmedical information from private providers6. This form is available through ModernAwards Processing and Development as well as the VA forms website.

When a claimant identifies private medical records in support of his or her claim butdoes not provide a medical release form, the RO will send the VA Form 21-4142 to theclaimant with its initial section 5103(a) notice7. Upon receipt of the completed form, VAthen requests the records directly from the provider or custodian.

A common problem encountered by ROs is that the provider or custodian refuses tohonor the VA Form 21-4142 or refuses to comply for other reasons. In a recent query,

6 The procedure manual currently refers to “non-VA providers.” See M21-1MR, III.iii.1.C.14.e.However, this proposal pertains to any non-Federal provider, including private and State providers. Weuse the term “private” for simplicity.

7 The Veterans Claims Assistance Act of 2000 (VCAA) amended 38 U.S.C. § 5103 as well asadding section 5103A. There is a growing element in Compensation Service that believes VA shouldrefer to the notice required under the applicable statute rather than to “VCAA notice.”

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OFO asked ROs to report the names and reasons providers gave for refusing to honorthe VAF 21-4142. There appear to be three major causes of lack of compliance withVA’s initial requests for records:

1) The information showed that 105 providers or custodians simply refuse toaccept any release of information other than their own.

2) Other providers or custodians state that VA Form 21-4142 does not conformto State law.

3) Other providers believe the VA Form 21-4142 does not comply with theHealth Insurance Portability and Accountability Act of 1996, Pub. L. 104-191.

Some providers or custodians also expect a fee for medical records. VA does not paysuch fees. See 38 C.F.R. § 3.159(c). Other providers require a “wet” signature and willnot honor a faxed or photocopied authorization form. This too slows down the claimsprocess and more significantly hinders VA’s efforts to automate development andclaims processing.

VCAA and 38 C.F.R. § 3.159(c)

The VCAA added 38 U.S.C. § 5103A, which provides that VA must make “reasonableefforts” to assist claimants in obtaining evidence necessary to establish their claims.The statute further states that VA is not required to assist if “no reasonable possibilityexists” that assistance would help to substantiate the claim.

Paragraph (b) of section 5103A addresses private medical records in particular andprovides that after VA has made such “reasonable efforts,” VA will notify the claimant ofthe records it has been unable to obtain and describe the efforts made to obtain them.

In promulgating its regulations implementing section 5103A, VA has further defined“reasonable efforts” to obtain private medical records at 38 C.F.R. § 3.159(c):

Reasonable efforts generally consist of an initial request and one follow-uprequest, unless follow-up would be futile.

However, if VA receives information showing that additional requests to the sameor a different provider could yield favorable results, then reasonable effortsinclude the original request and

one additional request to the original source; or an initial request and one follow-up request to the newly identified source.

Further, 38 C.F.R § 3.159(c)(1)(i) stresses that claimants must cooperate with VA’sreasonable efforts. The regulation states as follows (emphasis added):

The claimant must cooperate fully with VA’s reasonable efforts to obtainrelevant records from non-Federal agency or department custodians. Theclaimant must provide enough information to identify and locate the

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existing records, including the person, company, agency, or othercustodian holding the records; the approximate time frame covered by therecords; and, in the case of medical treatment records, the condition forwhich treatment was provided.

The regulation does not state any consequence for a claimant’s failure to provide thenecessary information; however, there is a strong implication that without theinformation, VA cannot reasonably request the records.

Recommendation: When providers or custodians refuse to honor VA’s initial request forrecords for reasons that would render follow-up requests futile, then VA will not berequired to make a follow-up request. Rather, VA will contact the claimant and allowhim or her 15 days to provide VA with the requested records. It would also becommunicated that after 15 days, VA could decide the claim.

VA should amend 38 C.F.R. § 3.159(c)(1) to indicate that a follow-up request is notrequired if a custodian refuses to honor an approved and properly filled out VA medicalrelease. A proposed method for amending section 3.159 is, as follows: Add at end ofthe second to last sentence of paragraph (1) after “futile”, “such as in cases where thecustodian refuses to honor an approved and properly filled out VA medical releaseform.”

A manual change that mirrors the above regulatory change will be required. It shallfurther include procedures to contact the claimant and allow him or her 15 days toprovide VA with the requested records, and that after 15 days, VA could decide theclaim.

Justification

Specifying this issue in the regulations is justified because of the frequent refusals bycustodians to honor VBA’s medical release form.

The development cycle time is the longest and most difficult to shorten (currently over 4months). VA must take aggressive actions to shorten this cycle time, which will assistVBA in meeting the timeliness strategic target of 125 days. This proposal represents anaggressive but also logical step in addressing development time delays.

VSRs are reluctant to cease development of a claim even when there is a strongindication that further development would be futile. By specifying instances inregulations, VA prevents such instances of over-development; particularly, futileattempts as such development.

Considerations

Although it could be argued that this recommendation may be viewed as potentiallynegative in relation to VA’s duty to assist claimants, the reality is that there must be

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logical stopping points to VA’s efforts to assist claimants especially when such effortswould be futile. Furthermore, this proposal must be considered with other VCAAenhancements contained herein, which are aimed at streamlining the VCAA processand enhancing the overall claims processing efficiency.

Because VA fails to receive many of these records initially, it then engages insometimes far more exhaustive efforts to obtain such records than was ever intendedby law. As a result, a Veteran’s claim can languish for several months because of theseefforts.

In many of these cases, VA may already have enough information to resolve theclaimed issue. However, these exhaustive and futile efforts prove to be harmful toVeterans because of the extended time on their claims.

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2.11 Amend 38 C.F.R. § 3.1600 (and other pertinent regulations) to streamlinepayment of burial claims for surviving spouses

Introduction

This proposal seeks to amend 38 C.F.R. § 3.1600 and other pertinent regulations toallow VA to automate burial payments at a flat rate for surviving spouses. This paymentwould apply to nonservice and service connected burial allowances, and plotallowances. These amendments will streamline the burial claims process for asignificant portion of the burial claims received by Regional Offices. More importantly, itwill allow VA to improve the level of service provided to surviving spouses who areentitled to burial benefits.

The two major changes from this proposal are, as follows:

1) All surviving spouses entitled to a burial allowance will receive the maximum(rather than “up to the maximum”) amount of burial and plot allowance, asspecified in 38 U.S.C. §§ 2302(a)(2)(B) and 2303(b)(2).

2) All surviving spouses will automatically receive all entitled burial allowanceswithout the need to submit an application. For example, a Veteran dies of aservice connected disability and a claim for DIC along with a death certificateis received in the regional office. A VSR verifies entitlement, completes anelectronic action similar to the Month of Death process, and the survivingspouse will automatically receive a burial allowance for $2,000.00. In thisinstance, no claim is required and no development actions are necessary.

Background

For service connected deaths: 38 U.S.C. § 2307 provides that the Secretary shall payburial and funeral expenses incurred in connection with the death of a Veteran in anamount not exceeding $2000. 38 C.F.R. § 1.600(a) mirrors the statutory language byproviding that an amount not to exceed the amount specified in 38 U.S.C. § 2307 maybe paid.

For nonservice connected deaths: 38 U.S.C. § 2302(a)(2)(B) provides that theSecretary may pay a sum not exceeding $300 to cover the burial and funeral expensesof the deceased Veteran. Section 2303(a)(2) provides that the Secretary shall pay asum not exceeding $300 as a plot or interment allowance. VA’s implementingregulations, 38 C.F.R. §§ 1.600(b) and (f), mirror the statutory language by stating thatpayable amounts for burial and plot allowances may not exceed the amounts specifiedin 38 U.S.C. §§ 2302 and 2303 respectively.

As noted in the above two paragraphs, the statute and regulation provides discretion toVA to pay up to a maximum amount of burial benefits. The current maximum rates thatare payable are, as follows:

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Burial Allowance: $300 Plot Allowance: $300 Service Connected Death Allowance: $2000

Effective October 1, 2011, the maximum rates payable will be increased, as follows:

Burial Allowances: $300 (however, a new rate of $700 applies to Veterans whodied while hospitalized by VA)

Plot Allowances: $700 (for all eligible Veterans) Service Connected Death Allowance: No change

Currently, Regional Offices must develop a significant number of burial claims when anapplication (VA Form 21-530) is received. The development consists mainly of VArequests for or clarification of the receipts that show the claimant made the burial/plotpayment in whole or in part. VA administers the payments once all evidence isassembled and eligibility is verified.

In FY 2010, VA processed 139,247 burial claims with the average days to complete of76 days8. Based on FY 2010 Annual Benefits Report, which indicated that the totalnumber of new DIC and Death Pension awards for surviving spouse in FY 2010 was67,471, VA concludes that at least this same number would be eligible for automatedburial payments. In fact, a significantly higher number would be eligible since manysurviving spouses not eligible for DIC or Death Pension would be eligible for burialbenefits.

Based on the above data, VA estimates that approximately 85,000 out of the 139,247FY 2010 burial cases would contain an established surviving spouse of record. Theestimated number of days required to process these 85,000 burial claims under the newautomated process for surviving spouses would be 7 days. This would positively affectthe overall timeliness of burial claims processing by 42 days from 76 days to 34 days.

Justification

Because the current burial allowances are not adequate to cover the full extent of burialexpenses in today’s economy, VA generally issues the maximum benefit amount whena burial claim is received, notwithstanding the fact that development was completed in asignificant number of the claims.

By streamlining and automating burial and plot payments for eligible surviving spouses,VA realizes a significant increase in the overall efficiency by which burial claims areprocessed. VA will avoid the lengthy process of controlling and developing claims forapproximately 60 percent of the 140,000 burial claims received in a year.

8 VETSNET Operational Report data obtained on August 9, 2011

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VA improves its service to eligible surviving spouses as they will receive faster deliveryof benefits and will not be required to fill out an application. Because the widow orwidower will receive benefits quickly, they can pay the funeral homes in a more timelyfashion and prevent incoming claims from funeral homes.

In these instances, funeral homes will no longer need to file a claim to VA and will beable to issue a single bill to the surviving spouse for the full expenses. It should benoted that under current circumstances, funeral homes generally must bill the widow orwidower even after receiving VA burial funds (since burial expenses exceed VA burialallowance amounts).

Considerations

Normal processing will continue for burial claims when no surviving spouse exists.

Automating payments in certain instances will not be possible. When transportationcosts apply, VA will still be required to determine the exact amount that can bereimbursed. Thus, the claim for reimbursement would be received either through astatement or application from the surviving spouse or funeral home.

Based on the plot allowance rules, (e.g., cannot be paid for those buried in nationalcemetery), VA will need to develop procedures to ensure this payment is properly paid.

This initiative is part of the overall thrust to enhance the delivery of benefits to survivingspouses. (See 1.3 and 3.2. Also, consider Month-of-Death benefits that were recentlyautomated).

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3 M21 Manual or Other Policy/Procedures

3.1 Intermediate ratings: reverse the current practice of prohibiting intermediateratings that do not include at least one grant of benefits

Introduction

This proposal would reverse the current policy that RVSRs only produce intermediateratings that include one or more grants. Under current VA procedures (based on M21-1MR, Part III.iv.6.A.1), RVSRs grant benefits at the earliest possible point in the claimsprocess. This procedure is critical in providing financial support to Veterans. Theproposals addressed the unintended consequences that occur because of issuingbenefits in this manner, (i.e., those benefits granted on an intermediate rating). Thisproposal does not negate VA’s policy to expedite benefits through intermediate ratings.Instead, it refines the practice while maximizing claims processing efficiency. OGCreviewed this recommendation and has no legal objection.

Specifically, VA should allow RVSRs to produce intermediate ratings that includedenials only, as well as grants, as long as the evidence is sufficient to decide thoseissues. VA should also establish a national policy to require that a claim be returned, ifpossible, to the RVSR who completed the intermediate rating. This will eliminateduplicate work required if an RVSR reviews a claims folder that was initially reviewed byanother RVSR prior to deferral. This approach will ultimately diminish the time it takes toaddress the remaining issues once the required development is complete.

The current policy prohibiting intermediate ratings that include only denials has createda significant inefficiency in Veterans Service Centers. RVSRs spend inordinateamounts of production time reviewing claims that ultimately must be deferred becausethe claim requires additional development. If the claim that must be deferred were asimple one-issue claim, then the impact of this practice would be minimal since theRVSR would only invest time reviewing a single issue. However, because of theincreasing number of issues per claim, raters are obligated to adjudicate several issuesto determine whether there is a benefit that can be granted even if the first issuereviewed cannot be rated. This proposal permits denials on intermediate ratings andprovides consistent work credits and claims assignment to RVSRs and will increaseefficiency while improving employee morale and rating accuracy in the Rating Board.

Background

The current practice of granting benefits at the earliest possible stage of the claimsprocess requires RVSRs to review every issue of the Veteran’s active claim. In thisreview process, RVSRs produce partial rating decisions when a benefit can be granted.If there are other claimed issues that cannot be granted because of incompletedevelopment, RVSRs must defer these issues and continue the active claim. RVSRs

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invest substantial amounts of time in these reviews only to discover in many cases thatno benefits can be awarded. This results in a deferral of all claimed issues becauseVA’s current policy prohibits intermediate ratings when no benefits can be granted.

Consider the following scenario:

RVSR reviews a claim consisting of nine issues. After adjudicating thefirst two issues as denials, the RVSR discovers that he or she cannot ratethe third issue because the associated VA examination was insufficientand must be returned to the examiner. In this case, the RVSR must stillreview the other six issues to determine if one or more can be granted. Ifno issues can be granted, all nine issues must be deferred until the oneissue is made ready to rate.

In the above example, the entire decision must be deferred despite the fact that theRVSR essentially adjudicated all issues of record to determine if a benefit could begranted. Since VA currently prohibits the release of intermediate ratings for denials, asignificant inefficiency results from this practice. Work completed on the case cannot beissued to the claimant, so the RVSR must discard the decision and re-adjudicate it laterin its entirety when the required evidence on the one issue insufficient development isreceived. The work cannot be preserved in RBA 2000 since the decisions are not final.

As an alternative, some RVSRs may save work in a separate format so that it can bepasted back into the RBA system at a later time, or may keep hand-written notes in thehope that the case is returned to them for final adjudication. Either of these describedalternatives is labor intensive and counterproductive, but unfortunately, they represent acommon scenario in Veteran Service Centers. There is also no guarantee that theclaim will be finally adjudicated by the same RVSR who completed the initial review.The amount of time spent on the initial review of the claim may be wasted, as anotherRVSR will end up adjudicating the claim when it is finally ready to rate. Again, theinefficiency described here is not created by VA’s policy of “granting at the earliest pointpossible,” but rather with the policy that “intermediate ratings must include at least onegrant of benefits.”

This practice is illogical for another reason. It is particularly illogical in light of the factthat while VA cannot issue intermediate ratings without at least one issue decidedfavorably, VA routinely issues decisions where no issues are decided favorably.

In addition, ROs do not have a consistent policy regarding work credit for intermediateratings. At ROs that do not provide any credit for deferrals or intermediate ratings,RVSRs are less motivated to complete cases requiring these types of decisions. Thesecases will fall to the bottom of the RVSR’s priority list, increasing processing timeunnecessarily. Allowing intermediate ratings on cases involving only denials increasesthe number of intermediate ratings an RVSR must complete. In order to mitigate theeffect of this on the RVSR’s production, and to maximize the increase in efficiency of

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this new procedure, a national policy for work credit and claims assignment should beestablished for intermediate ratings.

Justification

The unintended consequences associated with the well-intended practice of “granting atthe earliest possible point” can be mitigated if this recommendation is implemented.

There are many benefits to this suggestion. For example: It increases claimsprocessing efficiency in that it allows RVSRs’ time-consuming review of claims to resultin a decision being issued in almost all cases (to exclude claims where a full deferral isnecessary due to insufficient development or some other deficiency in the claimsprocessing). RVSRs would approach cases with a different philosophy because theirefforts would not be potentially wasted, (i.e., result in a deferred rating of all claimedissues).

This new approach will ultimately diminish the time it will take to finally address theremaining issues once the required development is complete. It would also increaseRating Board morale because raters would be receiving work credits that they do notcurrently receive. Currently, raters take a lesser work credit (i.e., for a deferral).

It increases rating accuracy. Raters will be less likely to rate on insufficient evidencesince they will be authorized to release partial ratings with denials and, as a result,receive the deserved work credit for completing those partial ratings.

Related Recommendation

Develop a national policy for work credit and claims assignment that promotesconsistency and incentives for RVSRs to process intermediate ratings.Compensation Service should work with OFO to ensure a fair and equitable system ofwork credit is developed and implemented in all regional offices. VA should alsoestablish a national policy to require that a claim be returned, if possible, to the RVSRwho completed the intermediate rating.

Considerations

There may be a perception that VA is rushing to deny claims or that VA is unjustifiablyissuing multi-issue decisions with, for example, one issue deferred with the rest denied.Such opposition is fallacious because it ignores the fact that VA would be issuing thedecision anyway on all issues had it not been for the one or more deferred issues.

This recommendation is more Veteran-friendly than the current practice because it morequickly issues a decision to the Veteran on many issues for which he/she may havebeen waiting for an extended period of time. The Veteran can then respond to suchdenials, if necessary, in a timelier manner.

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Considerable time currently wasted by this process will be used constructively followingthis change. Compensation Service polled approximately 120 RVSRs as part of theInter Rater Reliability Study in May 2011. When asked how many rating decisions theydeferred per month, 36 percent said between 5 and 10; 33 percent said between 10 and20, 9 percent said over 20; and, 5 percent said over 30. These figures equate to arough estimate of 25,000 to 30,000 deferred cases per month nationally, or about330,000 cases annually. (95-percent confidence level and plus/minus 8.7 confidenceinterval) However, an analysis by the Office of Strategic Planning indicated that 44percent of all cases are returned as ready to rate more than once, which equates toabout 485,000 cases based on 1.1 million decisions per year—a difference of 155,000cases, many of which are not rated because of this practice.

Ironically, 76 percent of those raters stated that the deferred case is either returned tothem some of the time or none of the time, thereby resulting in significant amounts ofwasted production time.

Approximately 75 percent either agreed or strongly agreed that the current practiceshould be changed.

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3.2 Allow VSRs to administratively award certain DIC awards and DependentsEducational Assistance (DEA)

Introduction

Expanding rating capacity is critical to VBA in its efforts to reduce the rating-relatedinventory. To this end, VA should implement internal procedural changes to allow VSRsto administratively award certain benefits that are currently awarded by a formal ratingdecision. This will free up more RVSRs to focus on disability claims and enhance theoverall efficiency of the claims process. There are no statutory or regulatoryimpediments to this proposal. Formal procedural changes to M21-1MR and a nationaltraining initiative will be required for implementation of this proposal. Enhancedsafeguards will also be implemented to prevent potential fraud.

The 3-part proposal described below will eliminate nearly 30,000 referrals to the ratingboard per year, thereby allowing approximately 22 RVSRs to be redirected to othercritical rating workload. This increased administrative efficiency will result in thecompletion of an additional 15,000 disability rating claims per year nationally.

This business change also provides an opportunity to automate certain DIC awards orDEA eligibility. This is similar to month-of-death payments that are generated whenFirst Notice of Deaths are processed.

Legal Analysis from Office of General Counsel

The Office of General Counsel provided a legal analysis of the three issues within thisproposal, and no legal objections were raised. OGC concluded that the manual may bechanged, as proposed, to implement the three issues below. The following excerpt isprovided by OGC:

The Under Secretary for Benefits [] has authority to designate thecategories of employees within VBA that will decide certain types ofclaims. This includes designating VSRs as authorized to decide DICclaims under section 1318. See 38 U.S.C. § 306(b) (providing that theUSB is responsible for the operations of VBA); 38 C.F.R. § 2.6(b)(1)(delegating to the USB “authority to act on all matters assigned to theVeterans Benefits Administration . . . and to authorize supervisory oradjudicative personnel within his/her jurisdiction to perform such functionsas may be assigned”); 38 C.F.R. § 3.100 (delegating to the USB andsupervisory or adjudicative personnel within VBA the authority “to makefindings and decisions under the applicable laws, regulations, precedents,and instructions, as to entitlement of claimants to benefits under all lawsadministered by the Department of Veterans Affairs governing thepayment of monetary benefits to veterans and their dependents, within thejurisdiction of Compensation and Pension Service”).

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Nothing in the statutes or regulations governing DIC precludes a VSRfrom making a decision as to DIC by directing that a specific entity such asa rating board or a particular official decide these claims. Compare, e.g.,38 C.F.R. § 4.16(b) (providing that “rating boards should submit to theDirector, Compensation and Pension Service, for extra-schedularconsideration all cases of veterans who are unemployable by reason ofservice-connected disabilities, but who fail to meet the percentagestandards set forth in paragraph (a) of this section”).

Before VBA amends or rescinds a procedure in the M21-1MR, it must bedetermined whether the current provision is a substantive rule rather thanmerely an internal procedure. In VAOPGCPREC 6-2000, we analyzedwhether certain provisions of the M21-1 Manual constituted regulationsbinding on VA. Summarizing the law regarding whether a manualprovision was equivalent to a substantive rule, we stated that “a provisionin a VA manual constitutes a substantive rule when the provision effects achange in law, affects individual rights and obligations, or narrowly limitsadministrative action.” Such a provision may create enforceable rights ina claimant. However, “[m]anual provisions that merely interpret a statuteor regulation or provide general guidance as to the procedures to be usedin the adjudication process do not create enforceable rights.”

The provisions in question do not change law or affect individual rightsand obligations such that they constitute a substantive rule binding on VA.Because the manual provisions governing the procedures for determiningentitlement to DIC under section 1318 are not a substantive rule, they maybe rescinded without notice and comment rulemaking.

For the reasons expressed above, we have no legal objection to thischange to the Manual.

Issue One: Implement a change to M21-1MR IV.iii.3.A.2.e to allow VSRs toaward DIC under 38 U.S.C. § 1318 (DIC 1318).

Under 38 U.S.C. § 1318, VA is authorized to pay DIC to certain survivors of Veteranswhose death was not caused by service-connected disability(ies) in the same manneras if the death were service-connected, if a Veteran was in receipt of, or entitled toreceive, disability compensation for a service-connected disability which was totallydisabling for certain specified time periods.

DIC under section 1318 is paid to a surviving spouse or children in the same manner asif the death were service-connected, if a veteran was in receipt of, or entitled to receive,compensation for a totally disabling SC disability:

1. For ten or more years immediately preceding death;

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2. Continuously for a period of not less than five years from the date of separationfrom service until death; or,

3. For a period of not less than one year immediately preceding death for a formerprisoner of war who died after September 30, 1999.

VA’s current practice requires all entitlement decisions regarding benefits under section1318 to be determined by the rating activity in a formal decision. Because therequirements for DIC 1318 are straightforward and require minimal judgment orevaluation by a decision maker, VA should implement a change to the above-statedmanual citation to allow VSRs to award DIC 1318.

In completing eligibility requests from the VHA Health Administration Center forpurposes of establishing entitlement to CHAMPVA, VSRs routinely review Veterans’records to determine if the Veterans had a permanent and total disability at the time ofdeath (Ref: M21-1MR IX.i.4.2.d). This is similar to the current reviews conducted by therating activity for purposes of establishing entitlement to DIC 1318.

Note: RVSRs will continue to adjudicate DIC 1318 denials and other cases that aremore complex in nature.

PA&I data revealed DIC 1318 entitlement was granted in 3,137 cases in FY 2010. Inaddition, 3,824 cases that were awarded DIC under 38 U.S.C. § 1311 due to serviceconnected death were identified as having a combined 100-percent disability of recordor entitled to Individual Unemployability at time of death for the required time undersection 1318. These 6,961 cases represent the potential number of cases that can beadministratively awarded by VSRs, thus avoiding initial referral to the Rating Board. Byauthorizing VSRs to adjudicate DIC under 1318 issue, the number of hand-offs isreduced, timeliness of benefits delivery is improved, and RVSRs can be redirected toother critical workload inventory.

By bypassing the rating activity for 6,961 DIC grants, and allowing administrative grants,VBA realizes increased claims processing efficiency. This will free up approximately 5full time RVSRs, thereby allowing VBA to redirect these individuals to address othercritical workload inventory. This increased administrative efficiency will result in thecompletion of approximately 3,480 additional rating disability claims per year nationally(DIC rating credit is .5 versus 1 for a disability rating claim).

Issue Two: Change to M21-1MR IV.iii.1.1.f to allow VSRs to award DIC under 38U.S.C. § 1311 in certain cases.

Current VA procedures require the rating activity to determine entitlement to DIC under38 U.S.C. § 1311. VA proposes to implement a procedural change to allow VSRs toadministratively grant DIC under section 1311 in cases where a service-connectedcondition is the principal cause of death of the Veteran as listed on a death certificate.

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38 C.F.R. § 3.312 provides that the death of a veteran will be considered as havingbeen due to a service-connected disability when the evidence establishes that suchdisability was either the principal or a contributory cause of death. This proposal willprovide VSRs authority to adjudicate DIC claims in which the service-connectedcondition(s) are clearly identified by the facts and circumstances of the Veteran’s death,as the primary cause of death. RVSRs will continue to adjudicate DIC cases where aservice-connected condition(s) is found to be a contributory cause of death.Furthermore, RVSRs must render all DIC denial decisions unless such decisions areadministratively denied under current practice, (i.e., dependency not established,service not verified, etc.).

The benefits of allowing VSRs to grant DIC under section 1311 outweigh the risks.RVSRs routinely grant service connection for cause of death on a primary basis byreviewing a single piece of evidence, (i.e., death certificate) and conducting a simpleanalysis of the facts of the case. With minimal training and oversight, VSRs canassume jurisdiction of these types of DIC claims.

PA&I data revealed DIC 1311 entitlement was granted in 28,433 claims in FY 2010.Although a breakdown of grants based on “primary” versus “contributory” cause ofdeath is not available at this time, Compensation Service estimates that 80 percent, or22,746 cases, were granted because a service-connected condition was identified asthe primary cause of the Veteran’s death.

By bypassing the rating activity in 22,746 DIC grants, and allowing administrativegrants, VBA realizes increased claims processing efficiency. This will free upapproximately 17 full time RVSRs, thereby allowing VBA to redirect these individuals toaddress other critical workload inventory. This increased administrative efficiency willresult in the completion of an additional 11,373 rating disability claims per yearnationally.

Issue Three: Change to M21-1MR IX.ii.2.1.c to allow VSRs to award DependentsEducational Assistance under 38 U.S.C. Ch. 35.

The current VA procedures require the rating activity to determine basic eligibility forDEA for a child, spouse, or surviving spouse(s). For the same reasons stated aboveunder issue one, VA proposes to implement a procedural change to allow VSRs toadministratively grant eligibility for DEA.

38 U.S.C. Chapter 35 requires:

Permanent and total service-connected disability (either a combinedevaluation of 100 percent or a total rating due to individual unemployability,both with no future examination);

Service connected death; or, Permanent and total service connected disability at the time of death.

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Under this proposal, a large percentage of the nearly 30,000 cases (noted under issues1 and 2) will no longer require an RVSR to adjudicate the DEA issue. An additionalnumber of cases will also no longer need to be referred to the Rating Board for adecision. This includes cases that require a formal rating decision for a finding of P&Tevaluation during the lifetime of a Veteran. The P&T requirement is needed forentitlement to DEA. No data is available on the number of cases referred to the RatingBoard to resolve a single DEA issue.

Considerations

Surviving spouses entitled to death benefits will receive such benefits much faster thanthe current process allows.

This proposal will primarily affect PMC stations, which will save valuable resources toredirect to other mission-critical priorities.

This business change also provides an opportunity to automate certain DIC awards andDEA eligibility upon the death of a Veteran. This is similar to month of death paymentsthat are generated when FNOD are processed.

Although this proposal shifts more work onto VSRs, it should be noted that theimplementation of other changes, (e.g., VCAA modifications) will effectively increase theprocessing capacity of the VSRs.

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3.3 Amend M21-1MRI.1.C.6.d by reducing the initial 30-day waiting period forprivate records to 15 days, and by removing the current 10-day waitingperiod

Introduction

VA proposes to amend M21-1MR.I.1.C.6.d, which pertains to waiting periods aftermaking requests for non-federal or private records. This proposal will modify waitingperiods to allow 15 days (instead of the current 30 days) for a response to VA’s initialrequest. It further proposes that VA will allow 15 days for a response to a follow-uprequest (instead of the current 10 days). VA will continue processing the claim, (i.e.,ordering examination, issuing interim rating, etc.) as soon as the second request is sent,which is consistent with the current procedure, as provided in M21-1MRI.1.C.6.d. VAwill not deny benefits on any claim until the second 15-day period has elapsed.

Reducing the waiting period and allowing regional offices to continue processing a claimas early as the 16th day after the initial records request is critical to achieving the 125-day goal for rating related claims. Because VA will continue to make follow-up requestafter the initial 15 days (either through a phone call or a second letter as provided inM21-1MR.I.1.C.6.c), the congressional intent that VA make repeated efforts to obtainrecords is followed. Furthermore, VA would still notify the Veteran upon issuance of asecond request of VA’s actions as well as that if evidence comes in within one year, theeffective date for an award of benefits can be established as of the original date ofclaim.

The Office of General Counsel reviewed this proposal and has not identified any currentstatutory or regulatory impediments. Based on OGC’s comments, the proposal hasbeen amended to emphasize that VA will not deny a claimed issue after a singlerequest for private records.

Background

As part of VA’s Duty to Assist statute at 38 U.S.C. § 5103A, Congress mandated thatVA “shall make reasonable efforts” to assist a VA claimant in obtaining relevant records.Congress did not elaborate on what constitutes “reasonable efforts” in terms of numbersof requests and waiting periods. VA implemented the law by promulgating regulationsin 38 C.F.R. § 3.159(c)(1) that indicates “reasonable efforts will generally consist of aninitial request for the records and, if the records are not received, at least one follow uprequest.” VA further published guidance regarding reasonable efforts in its AdjudicationProcedure Manual, to allow 30 days for a response to an initial request for records andan additional 10 days for a response to a follow-up request. Under the currentprocedures, the earliest VA can continue processing the claim when the initial requestproves unfruitful is after 40 days from the initial request.

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VA’s duty to assist, as described above, is contingent upon VA providing claimants aVCAA notification as described in 38 C.F.R. 3.159(b) prior to any requests or attemptsto obtain evidence. This VCAA notice also notifies the claimant that if evidence comesin within one year, the effective date for any award of benefits can be established as ofthe original date of claim.

The legislative history of Public Law 106-475, Veterans Claims Assistance Act, showsthe following in reference to what constitutes “reasonable efforts” to obtain evidence:

Proposed subsection (b) of the new section 5103 clarifies the Secretary’sobligation to assist a claimant in obtaining evidence that is relevant to aparticular claim. The requirement in section 5107 that the claimant hasthe burden of proving entitlement to benefits would not be changed by thislanguage. In using the term “reasonable efforts” to describe theSecretary’s obligation to assist in obtaining evidence, the Committeeexpects the Department to use a practical approach to assisting aclaimant in obtaining evidence. That is, if the claimant has adequatelyidentified the source of the evidence and has given whatever permission isrequired for the custodian to provide such evidence the Committeeexpects the Secretary to make repeated, but not necessarily exhaustive,efforts to obtain the evidence. In this regard, the Committee notes thatone effort to obtain evidence would be clearly inadequate and that fourefforts, except in an unusual case, would be exhaustive. Subsection (b)would also require the Secretary to provide notice to the claimant if theeffort to obtain evidence is unsuccessful and briefly explain theSecretary’s efforts to obtain such evidence, describe any further actions tobe taken by the Secretary, and allow the claimant a reasonableopportunity to obtain the evidence before the claim is decided.

H.R. Rep. 106-781, page 10

Justification

It is clear from the plain language of 38 U.S.C. § 5103A and its legislative history thatCongress envisioned more than one attempt to collect evidence unless a negativeresponse is received or a subsequent attempt would be futile. There is, however, nostatutory requirement to wait a certain amount of time before sending a second requestfor evidence. Given VA’s current processing delays, it is reasonable and practicaltherefore to make a second attempt to obtain evidence after 15 days rather 30 days.

Based on operational knowledge and experience, if a doctor’s office has not respondedto VA’s request for records within 15 days, they generally do not respond in 30 days.By making a second request to the custodian of the records through a phone call orletter after 15 days, the urgent need for the requested records will be more clearlyillustrated and more likely to produce positive results. It furthermore empowersadjudicators to take quicker actions on claims but yet does not harm the Veteran. This

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procedural change is paramount in VA’s ability to complete disability claims within 125days.

Section 5103A requires that if VA cannot obtain evidence, then the claimant must benotified of what efforts the Secretary made to obtain the records, and what furtheractions would be taken on the claim. Under this proposal, VA will send a simultaneousrequest to the claimant indicating that VA is making a second request for his or herrecords. In such notification, VA would also inform the claimant that his/her claim willcontinue to be processed without further delay, and that if the custodian of therequested records or the claimant provides VA with the records after a decision hasbeen made on the case, then VA will readjudicate the claim.

Considerations

As noted above, this proposed manual change allows VA to potentially improveprocessing time by 15 days, which is critical to VA’s success in achieving the strategictarget of “completing rating-related claims in 125 days.”

This proposal does not harm the claimant since VA will continue to make follow uprequests to the non-federal sources and notify claimants of such follow-up requests.Furthermore, no adverse actions would be taken on any issues after a single request forrecords.

It does not require a rulemaking or statutory change since the current law and regulationdoes not specify what constitutes “reasonable efforts” in terms of numbers of days towait between requests. It does not violate congressional intent, as VA will continue tomake “repeated” attempts for non-federal records either through a phone call or a 2nd

letter.

There is a potential argument that VA, due to the overwhelming number of claims beingreceived, will not be able to process the claim any faster based on this proposedchange. VA acknowledges that improvements in timeliness may not be immediatelyrealized based on this proposal alone. However, when combined with other claimsprocessing enhancements, (e.g., attaching VCAA notices to applications, ensuringclaimants do not fill out Releases for Medical Records if they are not needed or relevantto a claim, etc) VA is confident that processing capacity will significantly increase,thereby freeing up FTE to more quickly address initial and follow-up requests for non-federal records.

There is a potential perception of unfairness in that VA is only allowing a custodian 15days to supply records before we continue with a claim. VA understands thisperception, but it is a fallacy nonetheless. Private physician offices are unlikely torespond to a request after it is two weeks old. A reminder in two weeks, rather than onemonth will likely provide more timely responses.

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3.4 Modify VA Form 21-4142

Introduction

This proposal seeks to modify VA Form 21-4142 (release form) to enhance the overalleffectiveness by which VA assists claimants in obtaining pertinent private medicalevidence in support of disability claim. Although the release form is useful in that itallows the Veteran to receive assistance from VA in obtaining private medical evidence,it has also been the source of confusion and delay in the claims process. As explainedbelow, there are several issues that warrant modification of this form.

Background

Currently, VA uses a completed VA Form 21-4142, Authorization and Consent toRelease Information to the Department of Veterans Affairs, to obtain confidentialmedical information from private providers. This form is available through ModernAwards Processing and Development as well as the VA forms website.

Although the form is useful in that it relieves the burden of the claimant to obtain privatemedical evidence, it has also been the source of confusion and delays in the claimsprocess. Below are various concerns that warrant a careful review and modification ofthis critical form. Because the form has two critical audiences, the issues below arebroken out into 2 categories intended to make the form more Veteran and Custodian-friendly.

Veteran-Friendly Enhancements for the VA Form 21-4142:

Issue 1: Veterans are conditioned in the military to sign any and all forms;therefore they often complete and sign the VA Form 21-4142 when there is noneed to do so. This problem is demonstrated by instances wherein the Veteranattaches a release form to his or her actual private medical records that they aresubmitting. This leads VSRs to believe that there are additional records that theprivate physician did not provide; therefore an unnecessary attempt to obtainthese records is made by VA.

Solution: Make it clear on the form that YOU SHOULD NOT COMPLETE THISUNLESS YOU WANT VA TO OBTAIN PRIVATE MEDICAL RECORDS. IF YOUHAVE ALREADY PROVIDED THESE RECORDS OR INTEND TO OBTAINTHEM YOURSELF, THERE IS NO NEED TO FILL OUT THIS FORM. (Doing sowill lengthen your claim)

Issue 2: Irrelevant medical records are often sent to VA because the Veteranthinks he or she needs to request that any and all private medical records besent to VA.

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Solution: Make it clear on the release form that records only pertaining toclaimed condition need to be obtained by VA. Block 7C of the current form asksVeteran to identify conditions pertinent to his or her claim. It is recommendedthat the form be restructured to identify the condition for which they have claimedand for which they have received specific treatment. The form should moreclearly solicit PERTINENT MEDICAL RECORDS that the Veteran wishes VA toobtain in support of his or her claim.

Custodian-Friendly Enhancements for the VA Form 21-4142

Issue: Some providers or custodians believe that VBA’s release form is deficientin some respect. In a recent query, OFO asked ROs to report the names andreasons providers gave for refusing to honor the VAF 21-4142. Two of mostcommon responses pertained to providers not accepting the releases becausethey did not conform to State law or the provisions of the Health InsurancePortability and Accountability Act of 1996, Pub. L. 104-191.

Solution: OGC recently indicated that under the HIPPA Privacy Rule, a validauthorization must contain certain core elements and requirements including adescription of the information to be used or disclosed that identifies theinformation in a specific and meaningful fashion (45 C.F.R. Section 164.508(c)).OGC further stated that the VA Form 21-4142 does not appear to solicit orrequire such a description and the absence of this core element may render theform not compliant with HIPPA, and may be contributing to refusals of VArequests for claimant’s private records. To this end, it is recommended thatOGC’s Professional Staff Group IV review the form and providerecommendations that ensure HIPPA compliance.

Justification

The modification of VA Form 21-4142 will enhance VA’s ability to meet the timelinessstrategic target of 125 days. By improving the release form so that Veteransunderstand it better and by modifying the language to fully comply with HIPPArequirements, VBA reduces the time it takes to develop a significant number of claimsthat are otherwise lingering in the claims process. In fact, many of these types of casesare ready for a decision, but nonetheless are delayed because of the required follow-upactions that must be taken.

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3.5 VBA/VHA Joint Initiative to Increase Rating Efficiency

Introduction

This joint initiative between VBA and VHA will increase rating efficiency by modifyingthe content of and better utilizing VA medical treatment reports in the rating process,and by maximizing the value of Disability Benefits Questionnaires in the rating processby requiring VA treating physicians to periodically complete them.

Background

Regional offices routinely schedule VA examinations when processing rating-relatedclaims. Although claimants often present (or mention) medical evidence from VAphysicians when submitting claims for compensation, decision makers are rarely able touse the VA medical records without having to order additional VA examinations. Whilethe VA treatment records are of some value in determining effective dates andidentifying symptomatology, they generally are not sufficient to produce a final rating.For example, a Veteran may have been treated for the entire year for various serviceconnected orthopedic conditions. However, unless the VA treatment reports containrange of motion findings or statements relating to their functional loss, raters will not beable to rate on these reports. In this case, the Veteran must report for VAexamination(s) for the same condition for which he or she has received treatment.

Two-Part Proposal

Part One: Because of the specific medical findings needed to rate disabilities, VBAproposes that VHA treating physicians incorporate into their reports certain findings thatwould satisfy the rating criteria contained in the VASRD. No expensiveprocedures/tests will be arbitrarily ordered by the physicians unless medicallynecessary. For example, a nerve conduction test would not be ordered just so that itwould be on file in case the Veteran decides to file a claim. However, because certainfindings such as functional loss and range of motion measurements for a joint couldeasily be ascertained through routine visits, these types of findings would beincorporated into the treatment reports, thereby enhancing their overall value to therating process.

A pilot project is proposed that would pilot a single body system, such asmusculoskeletal. VBA would closely monitor the process to measure any increasedefficiency that may result.

Part Two: To maximize the value of the DBQs, it is proposed that VHA treatingphysicians complete DBQs on a periodic basis, which would then be available throughCAPRI. Rules and requirements would be established to determine the category ofVeterans and medical conditions that would warrant periodic DBQ completion.

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A pilot for a specified number and type of DBQs would be recommended to determinefeasibility of full implementation. The physician would not arbitrarily ordertests/procedures just so that he/she could complete the DBQ.

A cost/benefit analysis will be completed to determine feasibility of this initiative.

Justification

This 2-pronged proposal will promote greater rating efficiency by reducing the numberof VA examinations ordered by regional offices and thereby improving timeliness ofclaims processing.

It would also result in savings for VHA as significantly fewer C&P examinations wouldbe completed on a yearly basis.

VHA’s exam timeliness and VBA’s development time would improve since fewer C&Pexams would be ordered.

This proposal will improve service to our nation’s Veterans by preventing unnecessaryvisits to VA clinics and by providing them faster benefits and services.

Considerations

Because this initiative creates a cultural change in how VHA physicians treat theirpatients and document their reports, it is imperative that the top levels of leadership areengaged early in the process. The value of this proposal and benefits for both VBA andVHA are undeniable and should be presented clearly to leadership.

If this proposal is agreed upon, then a cost/benefit analysis should be completed.Various elements such as costs of C&P examinations, extra time in completingtreatment or progress reports, improvement in timeliness, etc. should be considered inthis analysis.

This initiative provides an opportunity to better utilize technology in the claims process.For example, by programming look-up functions in CAPRI or other web-basedapplications, raters could search Veteran records for critical rating criteria elements,(e.g., Range of Motion Measurements), thereby increasing overall rating efficiency.

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4 Training

4.1 Create a comprehensive training program designed to enforce the “exam byexception” mentality

Introduction

The following should form the basis of a nationwide training program designed to assistVSRs/RVSRs in using sound judgment based on legal authority when to request claims-related VA examinations. Evidence of record may be adequate for rating purposeseven though it may not be “current.” Many have asked, “When is evidence too old onwhich to rate?” This proposal’s objective is, in part, to finally answer that question.

A key factor in this debate is that the Court's case law requiring examinations has notbeen addressed in cases where the issue is a denial of service connection. Rather, theCourt's cases have historically addressed situations in which “service connection hasbeen established and the only issue is the current level of disability.”

The duty to conduct a contemporaneous examination is triggered when evidenceindicates a material change in a disability or that a current rating may be incorrect. Thatduty does not extend when evidence of record is adequate for rating. VA’s regulationspecifies that VA is only required to “notify” claimants of “information and medical or layevidence that is necessary to substantiate the claim.”

Other regulations allow VA to cease development when “service connection” can beawarded based on the evidence of record. In fact, the law “gives VA the discretion todetermine how much development is necessary for a determination of serviceconnection to be made.”

The legal framework below shows that awarding service connection for a disability withno current examination when the latest evidence adequate for rating is, for example,three to four-years old, is acceptable. Rating a case with no current examination,however, may be unacceptable when evidence indicates the severity of the disabilityhas worsened. Further, denying service connection without providing an examination,when one is necessary to decide a service connection claim is also unacceptable.

Background

Understanding VA’s Duty to Assist

The duties that VA must fulfill to aid Veterans with their compensation claims wereredefined and clarified by Congress in the Veterans Claims Assistance Act of 2000.Pub. L. No. 106-475, 114 Stat. 2096 (Nov. 9, 2000). The VCAA amended 38 U.S.C. §

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5103 and added a new statutory section, 38 U.S.C. § 5103A. These duties include, butare not limited to:

The duty to notify the claimant of any information and medical or lay evidencethat is necessary to substantiate the claim (38 U.S.C. § 5103(a); Dingess v.Nicholson, 19 Vet.App. 473 (2006); Sizemore v. Principi, 18 Vet.App. 264, 273-74 (2004));

the duty to notify the claimant of which information and evidence the claimantmust provide and which portion the Secretary will attempt to obtain (38 U.S.C. §5103(a); Charles v. Principi, 16 Vet.App. 370, 373-74 (2002); Quartuccio v.Principi, 16 Vet.App. 183, 187 (2002));

the duty to "make reasonable efforts to assist a claimant in obtaining evidencenecessary to substantiate" the claim (38 U.S.C. § 5103A(a)(1); see Washington(James A.) v. Nicholson, 19 Vet.App. 362, 370-71 (2005));

the duty to "make reasonable efforts to obtain relevant records (including privaterecords)" that the claimant identifies and authorizes the VA to obtain (38 U.S.C. §5103A(b));

the duty to obtain the claimant's service medical records, other military records,records of relevant VA medical treatment, and other relevant records held by theFederal government (38 U.S.C. § 5103A(c); see McGee v. Peake, 511 F.3d1352, 1357 (Fed. Cir. 2008)); and

the duty to provide a medical examination or obtain a medical opinion when oneis necessary to make a decision on the claim (38 U.S.C.S. 5103A(d); Kowalski v.Nicholson, 19 Vet.App. 171, 178 (2005)).

Before November 2000, when the VCAA was enacted, Veterans had to obtain amedical diagnosis of a current disability on their own. VA was generally not obligated tohelp them obtain this medical evidence. Some Veterans could not afford a privatedoctor, and were therefore placed in a no-win situation. They could not receivedisability compensation until they submitted a medical diagnosis of their currentdisability, they could not get VA to provide them with a free medical examination toobtain this diagnosis, and they could not obtain a medical diagnosis from a privatedoctor because they could not afford to pay for the private doctor.

As a result of the VCAA, most Veterans who file an original claim for disabilitycompensation do not need to obtain a medical diagnosis on their own. However, Wellsv. Principi, 326 F.3d 1381 (Fed. Cir. 2003) potentially calls this into question. VA isgenerally obligated to provide Veterans with a VA medical examination to diagnose thecurrent medical condition. Under section 5103A(d), VA is required to provide a medicalexamination or obtain a medical opinion when one "is necessary to make a decision onthe claim." An examination or opinion is considered necessary "if the evidence of

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record before the Secretary, taking into consideration all information and lay or medicalevidence:

(A) contains competent evidence that the claimant has a current disability, or persistentor recurrent symptoms of disability; and

(B) indicates that the disability or symptoms may be associated with the claimant'sactive military, naval or air service; but

(C) does not contains sufficient medical evidence for the Secretary to make a decisionon the claim."

38 U.S.C. § 5103A(d)(2).

There are, however, a few legitimate reasons for which VA may refuse to schedule amedical examination. First, VA can refuse if it believes that "no reasonable possibilityexists that such assistance would aid in substantiating the claim” 38 U.S.C. §5103A(a)(2). The exact parameters of this statutory standard are normally in litigationflux, but are being developed over time by VA and the Courts. Generally, if VA decidesafter obtaining the Veteran's military service personnel and treatment records andconsidering the Veteran's statements and other evidence in the record, that noprecipitating disease, injury, or event occurred during the Veteran's period of militaryservice that could have possibly led to the medical condition that is the subject of theclaim, then VA may conclude that no medical examination is necessary because theclaim could not be granted regardless of the diagnosis of the current disability.

The Court found in Duenas v. Principi, that a Veteran was not entitled to a VAexamination under 38 U.S.C. § 5103A because no reasonable possibility wassuggested by the record that the Veteran's poor vision and hearing loss were related toan event, injury, or disease in service. Duenas v. Principi, 18 Vet.App 512, 519 (2004),citing Paralyzed Veterans of Am. v. Sec'y of Veterans Affairs, 345 F.3d 1334, 1356(Fed. Cir. 2003). The Veteran had claimed hearing loss and poor vision, but neither hisstatements nor his service records suggested any relationship to service. In contrast,the Court remanded the Veteran's claim for a heart disability, finding that the Board didnot provide adequate reasons and bases to explain why no examination was requiredwhen a service medical record referenced heart symptoms. Id. at 518. The U.S. Courtof Appeals for the Federal Circuit, has held that a Veteran has to show some causalconnection between disability and service; disability alone is not enough.

Other instances where "no reasonable possibility" exists that a claim could besubstantiated include when a claimant lacks qualifying service, veteran status, or basiclegal eligibility for the benefit, or when a claim is inherently incredible or clearly lackingmerit. 38 C.F.R. § 3.159(d) (2010). A claim by a male Veteran for service connectionfor ovarian cancer is one example of the type of claim that falls into this category. VAcan also refuse to provide a medical examination if it finds there is already sufficientcompetent medical evidence in the record to make a decision on the claim. 38 U.S.C. §

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5103A(d)(2)(C); 38 C.F.R. § 3.159(c)(4); 38 C.F.R. § 3.304(c); Shoffner v. Principi, 16Vet.App. 208, 213 (2002); see 38 C.F.R. § 3.326.

Important Distinctions

The primary topic of this discussion pertains to the emphasized (underlined) portions ofthe foregoing analysis. VBA employees generally understand that claims can bedecided without a current VA examination in certain circumstances. Nonetheless,whether because of entrenched attitudes, the fear of potential errors (STAR errors), orsimply common misunderstandings of the exact narrow nature of the law, claimsprocessors rarely use these legal distinctions to their advantage.

A logical first step in understanding the proper narrow application of the law isseparating that application between original claims for compensation or pension(hereafter “original claim”) and increased-rating claims for disabilities, wherein VBA hasalready established service connection (hereafter “increased-rating claim”).9

Notwithstanding distinctions between these two types of claims, some fact-basedscenarios still mandate the law’s equal applicability in each type of claim.

Service Connection: The purpose of this instruction is to provide education to VBA fieldemployees explaining that not all benefit claims based on disability require current VAexaminations or VA examinations at all. This concept is more easily applied to originalclaims than increased-rating claims. Taken further, this concept is bilateral in nature.One side deals with evaluating whether current evidence is adequate for rating, and ifso, understanding that it is lawful to award benefits in original claims without a currentVA examination. The other side deals with a similar situation—where evidence is alsoadequate for rating, but not current, and that VA can award benefits without a currentexamination even in many of these circumstances.

Many will argue that adopting such a policy will violate VCAA in both circumstances.Those who would argue with this theory may also believe the Court already addressedthe issue several times. This, however, is a misconception. An important factor in thisdebate is that the Court's case law requiring an examination has not been applied incases where the issue is a denial of service connection. Rather, the Court's casesregarding the requirement of an examination “address situations in which serviceconnection has been established and [the] only issue [is] the current level ofdisability . . . .” Palczewski v. Nicholson, 21 Vet.App. 174, 182 (2007). In fact, VA hasdiscretion in deciding when additional development is necessary and suchdeterminations are reviewed under the “arbitrary, capricious, an abuse of discretion, orotherwise not in accordance with law” standard of review set forth in 38 U.S.C. §7261(a)(3)(A). See Shoffner v. Principi, 16 Vet.App. 208, 213 (2002).

9For the purpose of this instruction, the phrase “original claim” refers to a claim for compensation

for any disability not yet service connected, whether or not service connection is already established foranother disability.

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Moreover, regulations allow VA to cease further development when “service connection”can be awarded. 38 C.F.R. § 3.304(c) (stating that “[t]he development of evidence inconnection with claims for service connection will be accomplished when deemednecessary but it should not be undertaken when evidence present is sufficient for thisdetermination.”) The Court has held that this regulatory language “gives VA thediscretion to determine how much development is necessary for a determination ofservice connection to be made.” Id. at 213 (emphasis added); see 38 U.S.C. §7150(d)(1) (stating that “agency will take such development or review action as itdeems proper under the provisions of regulations not inconsistent with this title” once anappeal is filed).

There may be an expansive body of law that describes VA’s duty in providingcontemporaneous examinations in many cases; however, the duty simply does notextend when evidence of record is adequate for rating. See 38 C.F.R. § 3.326 (2010)(explaining VA’s authorization to provide examinations in original and increased-ratingclaims when evidence is otherwise not adequate for rating). These instructions applyequally to VA’s duty to notify. For example, VA’s duty to notify regulation specifies thatVA is only required to “notify” claimants of “information and medical or lay evidence thatis necessary to substantiate the claim.” 38 C.F.R. § 3.159(b)(1)(2009). Claims ready torate wherein the benefit sought will be awarded are already substantiated.

As mentioned earlier, the evidence of record may be adequate for rating purposes, eventhough it may not be completely up-to-date. Compensation Service has been askedmany times “when is evidence too old on which to rate?” Although there is no singleanswer to this question, it should be understood that the mere passage of time does notrequire VA to provide a new medical examination. Palczewski, 21 Vet.App. at 182.Safely and lawfully applying this concept will also depend on a close analysis of thefacts pertinent to a specific case. A record may contain medical evidence otherwiseadequate for rating; however, the evidence has aged. A claims processor would needto analyze the remaining evidence of record to determine whether any informationsuggests a material change in the condition at issue. The evidence reviewed would beany evidence in the file subsequent to the evidence already present and adequate for arating. If such evidence does suggest a material change, then a current examinationmay be necessary.

Increased-Rating Claims: VA’s duty to provide current examinations in increased-ratingclaims is more pronounced because (1) the very nature of the claim is one wherein aclaimant is alleging that his/her condition has grown worse in severity, and (2) theCourt’s jurisprudence is such that it has mostly focused on these claims whenaddressing this aspect of VCAA. VA can nonetheless render a favorable increased-rating decision with no current VA examination if the Veteran submits evidenceadequate for such a decision or the Veteran’s VA healthcare records support such adecision.

Essentially, the duty to conduct a contemporaneous examination is triggered when the“evidence indicates there has been a material change in a disability or that the current

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rating may be incorrect.” 38 C.F.R. § 3.327(a) (2010); see Snuffer v. Gober, 10Vet.App. 400, 403 (1997) (“[W]here the appellant complained of an increased hearingloss two years after his last audiology examination, VA should have scheduled theappellant for another examination.”); Francisco v. Brown, 7 Vet.App. 55, 57-58 (1994)(holding that “[w]here an increase in the disability rating is at issue, the present level ofdisability is of primary importance); Caffrey v. Brown, 6 Vet.App. 377, 381 (1994)(holding that, in a claim for an increased rating, the Board erred by relying on a 23-month-old examination where the appellant submitted evidence to indicate that therehad been a material change in his disability since that examination); Proscelle v.Derwinski, 2 Vet.App. 629 (1992) (remanding a claim because the record did notadequately reveal the current state of the claimant's service-connected disability).

The foregoing legal framework indicates that awarding service connection for a disabilitywith no current medical examination is acceptable, as long as one of the following isapplicable to the claim:

1. when the latest evidence adequate for rating is, for example, three to fouryears old, or2. when current evidence adequate for rating is not in the form of a C&Pexamination.

Likewise, it is equally acceptable to render increased-rating claim decisions in caseswhere the evidence is current and would result in an increased-rating award, despite thefact that such evidence is not in the form of a VA examination. However, rating such acase with no current examination may not be acceptable when medical or lay evidenceindicates the severity of the disability has worsened.

Foregoing VA’s Duty to Notify and Assist

When the VCAA amended section 5103 and added the new section 5103A, the twodistinct duties were (1) the duty to notify and (2) the duty to assist. The notificationduties include, but are not necessarily limited to: (1) the duty to notify a claimant of anyinformation necessary to complete a claim application; (2) the duty to notify the claimantof any information and medical or lay evidence that is necessary to substantiate theclaim; and (3) the duty to notify the claimant of which information and evidence theclaimant must provide and which portion the Secretary will attempt to obtain.

The plain language of the forgoing law clearly implies that VA’s duty to notify (1)attaches to an incomplete application, and (2) refers to a claim that lacks the necessaryinformation for a favorable decision. Therefore, it must follow that the law stands for theproposition that a “complete” application accompanied by medical or lay evidencesufficient for VA to render a decision, particularly a favorable decision, requires nosubstantiation and therefore no “notice.”

The duty to assist includes, but is necessarily limited to: (1) "make[ing] reasonableefforts to assist a claimant in obtaining evidence necessary to substantiate" the claim;

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(2) the duty to "make reasonable efforts to obtain relevant records (including privaterecords)" that the claimant identifies and authorizes VA to obtain; (3) the duty to obtainthe claimant's service treatment records, other military records, records of relevant VAmedical treatment, and other relevant records held by the Federal government; and (4),the duty to provide a medical examination or obtain a medical opinion when one isnecessary to make a decision on the claim.

Just as in the analysis of VA’s duty to “notify,” the plain language of the law concerningVA’s duty to “assist” is predicated on VA receiving a claim application that lacksinformation on which to render a favorable decision. It must again follow that the lawstands for the proposition that a “complete” application accompanied by medical or layevidence sufficient for VA to render a decision, particularly a favorable decision,requires no substantiation and, subsequently, VA has no duty to assist in the claim’sdevelopment process.

To further solidify the foregoing position, please note that Congress has stated this inthe legislative history pertaining to a 2008 amendment to section 5103. Pub. L. 110-389, Title I, § 101(a), Oct. 10, 2008, 122 Stat. 4147. This recent legislative historymakes clear that VA is not only allowed, but also encouraged to sua sponte waive allnotice and assistance under VCAA when VA determines that evidence of record issufficient to award all benefits sought. See Senate Report 110-449, 2008 U.S. CodeCong. and Adm. News, p. 1722, 1731 (stating, “The Committee emphasizes that VCAAnotices are required only in cases in which additional information or evidence is neededto substantiate the claim. If the information and evidence needed to substantiate theclaim is submitted with the application or contained in the claims file, no VCAA notice isrequired”).

Opposing Views

Opposing views to this analysis suggest that reducing the number of VA examinationsin lieu of relying on other evidence when rendering favorable decisions will result in anincreased number of BVA remands. This is not true. The primary goal of thisinstruction is to reduce the number of VA examinations for original claims when afavorable decision will otherwise result. If VA receives a notice of disagreement oncethis action has been taken, the logical and lawful course of action would be to provide acurrent VA examination.

In such cases where the appeal is not resolved, it may proceed to BVA with a currentVA examination of record. Rather than increase remands, this practice would likelydecrease the number of remands.

Other opponents may contend that such a practice in original claims would furtherviolate the law by not awarding the maximum potential benefit—that a “fully favorable”claim must factor in the highest possible rating for a particular disability. This is onlypartially true. As held in AB and Shoemaker, a Veteran contesting a rating or effectivedate is presumed to be seeking the maximum benefit available under the law. AB v.

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Brown, 6 Vet.App. 35, 38-39 (1993); Shoemaker V Derwinski, 3 Vet.App. 248, 253(1992). A claimant will generally be presumed to be seeking the maximum benefitallowed by law and regulation, and it follows that such a claim remains in controversywhere less than the maximum available benefit is awarded.

The Court adheres to a "case or controversy" limitation as to standing to appeal. Wherea claimant has filed an NOD based on an RO decision assigning a particular rating, asubsequent RO decision awarding a higher rating, but less than the maximum availablebenefit, thus does not abrogate the pending appeal. Furthermore, no new jurisdiction-conferring NOD may be filed as to that subsequent decision. See Hudson v. Principi, 3Vet.App. 467, 468 (1992). In the AB case, a Veteran's February 1988 NOD placed onappeal the issue of entitlement to a rating in excess of 10 percent for service-connectedPTSD. Pursuant to that appeal, BVA was required to consider entitlement with respectto all available disability ratings for PTSD. See 38 C.F.R. § 3.103(a); Shoemaker,supra. This logic cannot follow to original claims of service connection, or else when VAawarded any rating less than the maximum, the case would be said to remain incontroversy without VA ever receiving a timely NOD.

Justification

In the same context as other recommendations in this initiative, this section representsa significant shift in how VA approaches what is ultimately some of its largest functionsin claims processing. It is nonetheless not a shift requiring a major policy change, butrather one that utilizes, and in fact relies on, a much deeper understanding of the entirelegal framework that drives many of VA’s development and decision-making processes.

Mastering the level of legal understanding we are targeting, is unfortunately a verydifficult objective—we have no misperceptions on that subject. This difficulty is easilyillustrated by the diverse methods of claims development and decision-making appliedacross various field stations and individual field employees within a single station.

In many cases, adjudicators request VA examinations in cases only because claimantssubmit private treatment records, despite their adequacy for rating—others will not.Likewise, many request VA medical opinions only because the claimant submits aprivate medical opinion—others will not. In other cases, adjudicators request theclaimant complete a VA Form 4142 to obtain private treatment records only because theclaimant submitted private treatment records or a private medical opinion, despite thefact that the claimant neither “identified” nor “authorized” VA to obtain such records.The latter routinely occurs despite the fact that nothing in the record indicates additionalrecords exist. Even if there is such an indication, there is no legal requirement torequest such records unless the claimant authorizes and request that VA do so.

These and other adjudicative actions needlessly add weeks or months to an alreadylengthy process. Correcting, standardizing, and streamlining these diverse practiceswill not be easy. VA cannot, however, let such difficulty prevent the creation of a robustand intense training program designed to instill a masterful understanding of the law’s

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narrow application to varying fact-based scenarios as discussed herein. The potentiallevel of claims-process efficiency VA can achieve if such a program is successful issimply too valuable to the agency and every one of its stakeholders.

Considerations

Method of implementation: VA must create a nationwide, comprehensive, mandatorytraining program. The program must be complete with, but not limited to, an in-depthtraining course on the legal analysis of the material discussed herein; a syllabus;practice scenarios; and mandatory tests. The program should be applicable to VSRsand RVSRs. Furthermore, the Quality Review staff must successfully complete thetraining program.

VA must assure field employees that such a program is mandatory for the quality reviewstaff, and that the quality review staff will adhere to the instructions set forth in suchprogram. Without such assurance, this initiative has the potential of creating adistinction in policy without a difference in practice. Adjudicators must be empoweredwith the confidence to render the informed and educated judgments required by theseinstructions without the fear that application of such instructions will only result inaccusation of benefit entitlement errors, thereby resulting in reduced station accuracy.

Many proponents of this recommendation nonetheless state that the current CPI modelof claims’ processing would hinder successful outcome of this suggestion because non-rating personnel review and develop cases before rating personnel reviewing the case.There is considerable merit to this concern. Therefore, we suggest utilizing the BoozeAllen Leaning Processing model, or something similar to overcome this challenge.

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4.2 Simplification of reasons and bases on VA Rating Decisions

Introduction

This proposal intends to simplify and streamline VA rating decisions while increasingoverall rating quality, productivity, and customer satisfaction. This is critical to VBA’sefforts to reduce the national inventory of rating-related claims, and improve ratingtimeliness and accuracy. In general, rating decisions have unnecessarily increased inlength and complexity in part because of concerns related to local and/or nationalquality reviews and the influence of BVA and the courts. This proposal will utilize acomprehensive training program, through collaboration between all Compensation staffsand OFO, to streamline ratings by eliminating many of the self-imposed andunnecessary administrative burdens in the rating process and refocusing RVSRs on thenecessary elements of a rating. The intended outcome will be a cultural changeresulting in more efficient, accurate, and Veteran-friendly rating decisions.

The goal of this initiative is to increase individual rating productivity by ½ case per dayper RVSR. This would result in the completion of approximately 200,000 additionalrating decisions per year. (2000 Raters X .5 = 1000 Ratings per day X 197 (standardnumber of workdays per year) = 197,000 additional Ratings per year)

Background

The last initiative to address the issue of simplifying rating decisions was RatingRedesign, which was 10 years ago. The rating board has experienced significantturnover in the last decade and the overall experience level has declined. Ratingdecisions have significantly increased in length and complexity. Rating accuracy hasalso declined in recent years to the current 83 percent, far below the strategic target of98 percent. Raters are overly concerned about “BVA or STAR-proofing” ratings insteadof writing decisions for the customers.

The volume of text that is included in the reasons and bases section of an averagerating decision demonstrates the unnecessary administrative burden that is carried outby raters. Despite regulatory and statutory rules that require less of an explanation ofthe reasons and bases when awarding benefits, raters routinely include superfluous textthat adds little value to the decision. It is important that raters understand the distinctionbetween the reason and bases requirements of grants versus denials. See 38 U.S.C.§ § 5104(b),7105(d)(1); 38 C.F.R. §§ 3.103(b)(1) & (f).

There exists a clear distinction in the law governing VA’s required explanation whenissuing benefit grants versus denials. Further, there exists an additional distinctionwhen VA issues an SOC on appealed issues. The total statutory scheme outlines threediscrete levels of required explanatory detail. For example, the law governing“Decisions and Notices of Decisions” concerning favorable decisions states:

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In the case of a decision by the Secretary under section 511 of this title[38 USCS 511] affecting the provision of benefits to a claimant, theSecretary shall, on a timely basis, provide to the claimant (and to theclaimant's representative) notice of such decision. The notice shall includean explanation of the procedure for obtaining review of the decision.

The implication of 38 U.S.C. § 5104(a) and the plain language contained thereinunmistakably delineates its applicability to favorable decisions. Consider the followingsubsection from section 5104:

(b) In any case where the Secretary denies a benefit sought, the noticerequired by subsection (a) shall also include (1) a statement of thereasons for the decision, and (2) a summary of the evidence consideredby the Secretary.

The third distinction, concerning VA’s issuance of an SOC, is outlined in 38 U.S.C. §7105. The pertinent subsection states:

(d)(1) Where the claimant, or the claimant's representative, within the timespecified in this chapter, files a notice of disagreement with the decision ofthe agency of original jurisdiction, such agency will take such developmentor review action as it deems proper under the provisions of regulations notinconsistent with this title. If such action does not resolve thedisagreement either by granting the benefit sought or through withdrawalof the notice of disagreement, such agency shall prepare a statement ofthe case. A statement of the case shall include the following:

(A) A summary of the evidence in the case pertinent to the issue orissues with which disagreement has been expressed.(B) A citation to pertinent laws and regulations and a discussion ofhow such laws and regulations affect the agency's decision.(C) The decision on each issue and a summary of the reasons forsuch decision.

The practice of writing longer decisions has been cultivated over the last decade and isnow generally viewed as a well-accepted requirement. As such, the basic legalrequirement appears to have been lost in translation. The Court has issued numerousdecisions holding the VA to a strict, detailed standard of reasons and bases. However,a close analysis of the law reveals the Court’s actual target in such decisions is theBoard of Veterans’ Appeals, not initial decisions of an Agency of Original Jurisdiction(ROs). In issuing such decisions, the Court is not incorrect; rather, it is merelyupholding the law. The Board’s statutory mandate is that when issuing decisions,“[e]ach decision of the Board shall include—(1) a written statement of the Board'sfindings and conclusions, and the reasons or bases for those findings and conclusions,on all material issues of fact and law presented on the record . . . .” 38 U.S.C. §7104(d)(1).

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Any perception that such requirements are transferred to a decision by an agency oforiginal jurisdiction is simply misplaced. In fact, the Court has no such jurisdiction. See38 U.S.C. § 7252(a) (stating: “The Court of Appeals for Veterans Claim shall haveexclusive jurisdiction to review decisions of the Board of Veterans' Appeals.”).

Justification

This proposal will improve the quality, productivity levels, and overall efficiency of therating board. Training RVSRs to simplify and shorten ratings while adhering to allpertinent laws will also result in better service to Veterans and their family members.Rating decisions will be shorter, clearer, and more reader-friendly.

Although VACO has monitored the rating activity through the national accuracy program(STAR), there have been minimal efforts by VACO over the last 10 years to streamlinethe contents of rating decisions. Given the significant turnover of the rating board andthe influx of newer, less experienced RVSRs, it is imperative to re-establish the legalrequirements for rating decisions.

As part of this proposal, raters will learn how to better organize facts, weigh evidence,and articulate concise but legally sufficient reasons and bases in a reader-friendlymanner.

The changes from this proposal can be implemented rapidly through Veterans ServiceCenters without statutory or regulatory changes.

A clarification of the legal requirements for rating decisions is necessary given theabove legal references.

Considerations

The success of this initiative is contingent upon a significant mindset and culturalchange within Veterans Service Centers and all staffs within Compensation Service. Atthe core of this proposal is to change the mindset that “more” is better. In fact, thelonger Rating Decisions often masks the inadequacies of the rationale behind thedecisions. Writing less will force writers to be more concise, thereby increasing thevalue and meaning of the Rating Decisions.

Notwithstanding the above, taking this proposal too far may indeed have an equal, butopposite effect. This proposal should not be used as a proverbial magic bullet to reducethe RTR case inventory by essentially eliminating reasons and bases. Doing so maylikely subject VA to litigation that has the potential of erasing any realized gains.

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5 VSO Program

5.1 Create a project for cases not subject to VA’s duty to notify or its duty toassist by leveraging assistance from VSOs

Introduction

The recent legislative history pertaining to the latest amended version of 38 U.S.C. §5103 makes clear that VA is not only allowed, but encouraged to sua sponte waive allnotice and assistance under the VCAA when VA determines that evidence of record issufficient to award all benefits sought. See Senate Report 110-449, 2008 U.S. CodeCong. and Adm. News, p. 1722 (“The Committee emphasizes that VCAA notices arerequired only in cases in which additional information or evidence is needed tosubstantiate the claim. If the information and evidence needed to substantiate the claimis submitted with the application or contained in the claims file, no VCAA notice isrequired,”) 2008 WL 4149915, 9, 2008 U.S.C.C.A.N. 1722, 1731.

Because of inherent limitations imposed by the CPI model of claims processing, VA hasnotable difficulty in establishing processes for employees involved in the earliest stagesof the claims process to identify claims that warrant an immediate favorable decision.VA should therefore enter into a memorandum of understanding with VSOs thatmaintain space available in ROs to assist with such a project. By establishing astructured process with well-defined parameters, one targeted at specific types of casesrather than a broad range of cases, VA can create an easy-to-manage process thatensures success in leveraging VSO assistance. By limiting its scope, VA can prevent arepeat of past failures in similarly intended programs, such as TRIP I and II.

Background

The analysis used in the section titled, “Create a comprehensive training programdesigned to enforce the “exam by exception” mentality” is incorporated herein byreference. The proposition in that analysis serves to fully support the legality of thisproposal. Furthermore, when the new regulation is published based on the 2008amendment to section 5103, contained in Pub.L. 110-389, the new regulation will makeclear that that no notice, and by extension, no assistance, will be required whenrendering decisions on benefit claims that can be favorably decided on the evidence ofrecord.

A carefully planned project would be instrumental in expediting numerous types ofclaims wherein VA normally follows all VCAA requirements despite having evidencesufficient to award benefits. (E.g., certain claims under 38 C.F.R. §§ 3.22, 3.309, 3.312,3.350, 4.16, 4.28, 4.29, 4.30, etc.). This plan would only include specified types ofclaims as listed here. For each of these types of claims, or others VA may chose toinclude, VA will create a short checklist outlining the required information to associate

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with the claimant’s folder. If a claim is missing information outlined on the checklist, itwill not qualify for this project.

Rather than task trained RVSRs to review such cases for possible inclusion, wepropose to fully engage VSO employees within the respective RO to enable suchpersonnel to readily identify qualifying claims. For example, benefit claims underparagraph 29 and 30 generally require evidence in the file of the appropriate service-connected status of a disability and the proper hospital or surgical report. No otherevidence is necessary for a fully favorable decision on such a claim. Likewise, incertain DIC claims, the only requirements are evidence of a Veteran receivingcompensation at the 100-percent rate (for the specified period of time) and a deathcertificate, or evidence of a service-connected disability shown as the cause of death ona death certificate.

The checklist will be structured to ensure that if all items on the checklist are attached orincluded in the file, then an award of benefits will follow. The requested project isneither complex nor cost prohibitive. Standard decision language for the pre-selectedtypes of cases can be drafted so that the assigned rater need only input the claimant’sinformation in order to generate the applicable decision. Personnel assigned to thisproject should have higher performance standards.

The project will require that associated VSO employees act with diligence in recognizingapplicable claims affected by the pilot. When the appropriate evidence is brought totheir attention, whether through client mail, in-person interviews, phone calls, oroutreach programs, they must associate that mail with the respective claims file andpersonally deliver the file to the assigned RVSR.

The VSO will complete a short checklist to ensure the claim qualifies for an immediateaward of benefits. The checklist, evidence, and claims files will be hand delivered to theassigned RVSR, who will issue a decision within 10 working days or 14 calendar days.The assigned RVSR can be rotated every 30 days in order to prevent any adverselabor-management-relations issues.

Justification

Regional Office VSO employees and their associated workload will greatly benefit fromthis type of project, thereby providing sufficient motivation for full participation. Onceparticipation is guaranteed, VSOs and VA can enter into a memorandum ofunderstanding that will outline their expectation of VA and VA’s expectation of them.

Many stations have excellent relations with their local VSOs. This type of project willenhance such relations. Other stations have less than ideal relations; likewise, thisproject will serve to improve those relations as well. Essentially, success in such aproject is beneficial for VA, VSOs, and most importantly, Veterans and their dependentswe each serve.

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VSOs must understand the benefit to them and their clients. Essentially, success in thisproject will lessen the workload on VSOs despite the requirement for additional actionon their part. Many VSO offices are plagued with the same challenges as VA—aworkload that exceeds personnel available to effectively manage such workload.

This project will ensure that many VSO clients receive their benefits within a matter ofdays rather than months, depending on their active participation. This means lessrepeated phone calls (VSOs have a duty to return all calls within a specified timeframe),less personal interviews (many clients visit their representatives weekly or moreregarding the status of their claim), and less mail to process as the claim will need nofurther information submitted. Most importantly, VSOs will be able to provide a “service”to their clients, in certain cases, that they normally could not—rapid completion of theirclaims. This will gain the VSO more respect within the Veteran community.

Considerations

The foregoing “justification” should help to instill confidence in the “unconvinced” VAemployee that through the proper motivation, VA can provide VSOs a mechanism totruly assist VA in increasing efficiency in the claims process, while improving service tothe clients.

VA should meet with senior VSO leadership in order to solidify the details of thememorandum of understanding, and to reach a consensus on the types of claims thatshould be incorporated into the project.

It is important to note that many VSOs will file a Veteran’s application for benefits at theearliest stage in order to preserve the effective date in case an award of benefitsfollows. In these cases, the claim will not be ready to rate, and therefore could impactthis project. It is likely VSOs will not change this practice because doing so could harmtheir client and betray their fiduciary relationship with that client.

VA should therefore work with the VSO community, in regards to the claims affected bythis project, to file “informal claims” in such cases where possible, thereby preservingthe client’s effective date and preserving the VSO’s fiduciary relationship with theirclient. Such goal should be to file an informal claim where the VSO is certain theclaimant intends to provide evidence to the VSO at a later point that will qualify theclaim as a claim authorized for inclusion into this project.

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6 Internal Compensation Service Issues

6.1 Streamline the Agent Orange exposure confirmation process

Introduction

This proposal seeks to modify procedures in M21-1MR IV.ii.2.C.10.o to streamline theprocess of verifying or confirming herbicide (Agent Orange) exposure when a Veteranclaims a disability due to exposure to Agent Orange outside of Vietnam. Becauseregional offices will be equipped with the knowledge and necessary tools to perform thisfunction, it will eliminate the need for a formal request to VACO and thereby increasethe overall claims processing efficiency.

Background

According to current VA procedures, regional offices send requests to CompensationService to verify herbicide exposure outside of Vietnam. The Legislative and PolicyStaff then researches DoD information to determine if the alleged exposure can beconfirmed. If exposure is confirmed, then Compensation Service communicates this tothe RO, who will then determine if service connection is otherwise in order. If exposureis not confirmed, then RO is instructed to send formal request to JSRRC for verification.

The Legislative and Policy Staff is creating a webpage that details the use, testing orstorage of tactical herbicides in areas outside Vietnam. The site will be populated withofficial information obtained from DoD. Upon completion of this website, regional officestaffs can search the site directly for evidence of possible exposure when a Veteranclaims to have been exposed to Agent Orange outside of Vietnam. If there is noevidence of the use, testing, or storage in the area in which the Veteran claims to havebeen exposed, the RO will be directed (through the website and manual) to send therequest directly to the JSRRC. By eliminating any associated delays with the currentprocess and through repeated usage of the website by ROs, the new process will resultin faster decisions. Compensation Service will continue to maintain the Agent Orangemailbox at VAVBAWAS/CO/211/AGENTORANGE to address other questions or concerns.

Justification

This change allows decision makers to arrive at a faster decision on claims that requireverification of herbicide exposure outside of Vietnam by essentially eliminating an extrastep in the process, which generally takes approximately 15 days. The Legislative andPolicy Staff responded to over 450 requests in calendar year 2010. This requiredapproximately 675 staff hours (450 multiplied by 1.25 hours), which includes both fieldand VACO man-hours. By transferring this function to the ROs, it is estimated that over6700 days (450 multiplied by 15 days) of processing time will be saved for rating relatedend products.

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This change will also free up resources at Compensation Service, thereby allowingconsultants to focus on policy matters that will further enhance the claims process.

Considerations

The benefits of improving claims processing timeliness outweigh any associated riskswith this proposal.

Because of the well-organized and objective nature of the DoD information that will beavailable to RO employees, the transfer of this function to the ROs is reasonable and isconsidered to be low risk.

It is recommended that ROs implement this proposal in the most efficient manneraccording to the local needs of the office. For example, some ROs may delegate thisresponsibility to a subject matter expert(s), (e.g., Military Service Coordinator or JSRRCCoordinator) while other ROs may place responsibility on all decision makers.

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6.2 Amend accuracy review procedures by adding a review element for claimsprocessing “timeliness”

Introduction

As a means to measure and ensure compliance with the many proposals containedwithin this claims processing plan, it is proposed that a “timeliness” element be added tolocal and national quality reviews. Specific items will be listed as part of the checklistagenda, so that timeliness errors are objective and clearly linked to the unnecessarydelay of a claim.

Developing a new “timeliness” element is critical in VBA achieving the strategic target ofcompleting all rating claims in 125 days.

Background

Although timeliness is closely monitored at national and local levels, it is difficult tomeasure at the individual employee level. As noted in this plan, various laws and/orpolicy practices significantly contribute to the timeliness delays experienced in thecurrent claims process. The proposals contained within this plan are aimed ateliminating many of the unnecessary delays and complexities in the claims process.

In order to ensure compliance and effective implementation of these proposals, thedevelopment of a timeliness element for quality reviews is critical. This will also providethe proper framework for more meaningful Performance Standards for employees.

Examples of potential issues that would warrant a timeliness error include, but are notlimited to, the following:

Continuing to develop a case for a specific issue when VA can otherwiseissue a favorable decision on that same issue;

Ordering a VA examination when the evidence of record is sufficient todecide the case. (“examination by exception” approach);

Sending a medical release form to the Veteran when he or she hasindicated that they have not been treated by a private physician for theirclaimed issue; or,

Sending a redundant VCAA notice to the claimant.

Justification

Adding a timeliness element to local and national accuracy reviews will ensure thatemployees are more aware of their actions and how they affect the “Average Days toComplete” claims.

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It will promote compliance of policies and procedures that are geared to reducetimeliness.

It will promote faster processing of claims.

Considerations

This category would fall outside the current “benefit entitlement” category, and wouldtherefore serve as an independent measure of a regional office’s adherence to timelyclaims processing actions.

Creating a timeliness element will make a bold statement by VBA leadership thattimeliness is important and critical to VBA’s ability to become a world-class organization.

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6.3 VA should require at least a quarterly meeting between the Policy andQuality Assurance staff for discussion of common errors to ensureconsistent guidance to the field

Introduction

There is long history of collaboration between the various staffs within theCompensation Service (formerly Compensation and Pension Service) to ensure thatthere is consistency among staffs on guidance provided to the field. The results of thiscollaboration are sometimes provided to the field through fast letters, training letters,Compensation and Pension Bulletins and other such mechanisms. When guidance isprovided to the field, it is an assumption that upon concurrence, the guidance isdiscussed and disseminated among the staff members who must communicate with thefield offices either by answering questions, providing additional guidance or throughconducting quality reviews. This collaboration is largely successful; however, there isroom for improvement in the area of Policy and Quality Assurance collaboration.

Background

The STAR staff has relied on the Policy and Procedures staffs to ensure that theguidance used in calling benefit entitlement errors under M21-4, Manpower Control andUtilization in Adjudication, Chapter 3, Quality Assurance, are supported by statute,regulation or manual reference. The STAR program is rooted in this guidance in orderto support error calls and dedicated to the purpose of the Quality Assurance program,which is to ensure that the field offices are provided proper guidance for correctpayment of benefits. There have been several efforts to promote this collaborationbetween the Policy and Quality Assurance staffs, namely, a workgroup was formed insupport of the national Rating Quality call to provide guidance on questions submitted tothe Quality Assurance mailbox. This effort was laborious because of the numerousstaffs involved with the concurrence process.

Based on this history and the lengthy process to provide feedback to the field, it isproposed that the Policy and Quality Staff meet at least quarterly to discuss error calls,create a more robust mechanism to ensure consistency among staffs, and to provideassurance that guidance is provided to the field that will result in increased quality. Thisincreased and specific collaboration will provide a mechanism for the two staffs toreview and discuss error calls, determine if the guidance provided in the statute,regulation or manual requires clarification and assist both staffs in determining if thereare error calls made based on areas that need review and discussion. Thiscollaborative effort will also assist the Quality Assurance staff with internal training.

Justifications

The current cumulative accuracy rate (January 1, 2010 through February 28, 2011) isnow at 83%. There are several areas that have traditionally been areas of discussion

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among the staffs that include inadequacy and need for exams, use of the VA Form 21-4142s, Authorization and Consent to Release Information the Department of VeteransAffairs, rating on evidence of record that is more than a year old, etc., just to name afew. Regular meetings between the two staffs will allow discussion of these issuesrequiring Policy weigh-in and will allow quick discussion and resolution on many issuesthat traditionally has taken months to resolve.

Considerations

Quarterly meetings are proposed with the understanding that the frequency of themeetings should be changed as necessity dictates.

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Appendix 1: Section 1.1

First-Instance Jurisdiction of the Board

Cost Benefit Analysis:

Benefit Costs:

There is no mandatory or discretionary cost associated with this proposal.

GOE Cost Equivalent:

A significant cost equivalent in terms of 111 FTE is realized by amending 38 U.S.C. §7104 to incorporate an automatic waiver of RO jurisdiction for any evidence received bythe VA, to include the Board, after an appeal has been certified to the Board followingsubmission of a VA Form 9. In other words, it would require an increase in the GOEbudget sufficient enough to hire 111 FTE to perform the amount of work that thisproposal adds in efficiency. The cost equivalent associated with these FTE is $11.8million for the first year, $64.9 million for five years, and $143.3 million for ten years.Non-payroll administrative cost equivalent will be $495,000 for the first year, $3.1 millionfor five years, and $8.5 million for ten years.

Data Source: In determining the 111 FTE cost equivalent associated with thisproposal, C&P relied upon the following sources:

VOR Report for Completed 070 EP for FY 2009 Board of Veterans’ Appeals, Report of the Chairman, FY 2010 DRO Performance Plan

Summary of Methodology: We determined required FTE levels to processSupplemental Statement of Cases by pulling data for FY 2009. Once the number ofcompleted SSOCs was identified, we determined the work actions from ASPEN thatwere required to process such appeals. We then determined the number of FTEsrequired to complete the work actions associated with the SSOCs.

For purposes of this FTE cost equivalent estimate, we used VOR Completed Report,which showed completion of 65,407 EP 070s in FY 2009. EP 070s are taken whenSSOCs are released. This is considered to be a more accurate depiction of the SSOCworkload since the published PA&I reports (that show 54,552 SSOCs mailed in FY2009) do not account for cases where 6 or more SSOCs were sent (VACOLS onlystores up to 5 SSOCs).

Detailed Methodology: As the foundation for this analysis, we used current DROproduction standards and weighted actions from ASPEN rather than the normal budget

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formula, which relies upon Work Rate Standards. This method depicts the amount ofactual work required to complete claims and appeals actions.

Step-By-Step Process of Determining Required FTE Levels

1. We added up weighted actions that are required to complete a single SSOC.This equates to 1 weighted action. By multiplying 1 by 65,407 (number ofSSOCs completed in FY 2009), we determined the total number of weightedactions nationwide was 65,407.

2. We determined that it would take 21,802 days to process the 65,407 weightedactions represented by the nationwide SSOC workload that was completed. Wecalculated the number of processing days by dividing the weighted action totalsby 3, which is the “fully successful” performance production standard for aDecision Review Officer for an 8-hour day.

3. To determine the required number of FTE to complete inventory of SSOCs, wedivided the number of required processing days (21,802) by the standard numberof employee workdays per year (197). We determined that 111 FTE are requiredto process the SSOC workload. For the standard workday computation, we usedthe employee work hour number of 1576, which is the standard for C&P budgetformulations, and divided this number by 8 (number of hours in a standardworkday) to ascertain the 197 days. See table below.

Fiscal Year 2009 FTE Requirements for Completion of SSOCsWgt* Completed

SSOCs inFY 2009

TotalWgt.Actions

Employee(FullySuccessfulProductionStandard)

ProcessingDays(based onFS Perf.Standard)

AverageEmployeeWorkDays PerYear(1576/8)

EstimatedFTErequiredtoprocessSSOCinventory

CompletionandRelease ofSSOC

1 65,407 65,407DRO,GS-13 (3)

21,802 197 111 FTE

* Weight for apportionment actions from DRO Performance Standard

Assumptions

For the FTE computation, we simplified our estimate of work effort required to processSSOCs. Based on operational variables, (i.e., office size, structure of Appeals Teams,job duties, etc.), it was determined that a single weighted action performed by a DROwould approximate the work output of the action. We understand that RVSRs may alsobe completing SSOCs. However, this is offset by the fact that we did not factor in anyadministrative duties such as routing of claims folders or weighted action creditsassociated with the release of SSOC. We also did not account for the percentage ofSSOCs that would involve more than 7 issues, which are credited 2 weighted actions.

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We understand that some SSOCs will still be prepared by ROs since the proposed lawwill allow claimants to choose not to waive RO jurisdiction. Estimating this number isnot possible.

In terms of calculating work output, C&P assumes the above-described variables willoffset one another, and that the workload analysis contained herein provides anadequate picture of the SSOC workload and required FTE level.

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Appendix 2: Section 1.2

Elimination of Certain Apportionments

Cost Benefit Analysis

GOE Cost equivalent:

A significant cost equivalent in terms of FTE is realized by eliminating the apportionmentfunction from the C&P claims process. A GOE cost equivalent of approximately 22 FTEwill result from this proposal, meaning it would require an increase in the GOA budgetsufficient enough to hire an additional 22 FTE to perform the amount of work that thisproposal adds in efficiency.

Based on the potential caseload, FTE cost equivalent is are estimated to be nearly $23million over ten years.

FY Direct FTE Annual Salary2013 22 $1,516,8232014 22 $1,598,7402015 22 $1,683,3262016 22 $2,331,6612017 22 $2,378,2942018 22 $2,499,3832019 22 $2,549,3712020 22 $2,676,8192021 22 $2,730,3552022 22 $2,864,547VBA GOE Total $22,829,319

Methodology

Data Source

In determining the 22 FTE cost equivalent associated with elimination of certainapportionment decisions, C&P Service relied upon the following sources:

VOR Report for Completed Apportionment Claims for FY 2010; VOR Report for Completed Non-rating claims for FY 2010; VOR Report for Completed 130 EP claims for FY 2010; VACOLS Report of Apportionment Appeals Received for FY 2010; ASPEN Weighted Actions from FY 2010; Veterans Service Representative Performance Plan FY 2010.

Summary of Methodology

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We determined required FTE levels to process apportionment claims and appeals bypulling data for FY 2010. Once the number of apportionment completed claims andappeals receipts were identified, we determined the work actions from ASPEN that wererequired to process such claims. We then determined the number of FTEs required tocomplete the work actions associated with apportionment claims.

Detailed Methodology

As the foundation for this analysis, we used FY 2010 production standards andweighted actions from ASPEN rather than the normal budget formula, which relies uponWork Rate Standards. It was determined that the WRS for EP 130 (utilized forapportionment claims) does not accurately depict the amount of work required tocomplete apportionment claims. For example, the WRS of .92 used for processingapportionment claims is also used for adding a single dependent to a Veteran’s award.These two actions are drastically different in terms of work output. To furtherdemonstrate the increased work output for apportionment decisions, one needs toexamine timeliness data for completed apportionment claims for FY 2010. See Table 1below. The Average Days to Complete for the 10,870 completed apportionment claimsis 172.6 days. See month-by-month comparisons with the full inventory of non-ratingend products and 130 EPs, which includes a subset of apportionment claims. Asdemonstrated by the increased processing time (by 2 additional months over non-ratinginventory and 3 additional months over the entire 130 EP inventory), decidingapportionment claims requires significantly more resources.

TABLE 1

Average Days Processing for Fiscal Year 2010Month Non Rating EPs EP 130 Apportionments

09-Oct 110.2 86.8 184.1

09-Nov 109.6 86.2 162.2

09-Dec 106.7 86.1 185.9

10-Jan 110.3 86.3 170.1

10-Feb 86.6 81.1 173.8

10-Mar 92.3 77.6 169.8

10-Apr 106.1 73.6 172.1

10-May 117.5 76.7 171.410-Jun 126.7 83.4 171.6

10-Jul 137.9 89.9 173

10-Aug 124.6 85.7 162.310-Sep 126.8 88.8 175.6

Step-by-Step Process of Determining Required FTE Levels (See Tables 2 and 3 below)

4. We added up weighted actions from ASPEN that are required to complete asingle apportionment claim. This equated to 3.26 ASPEN points. By multiplying

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3.26 by 10,870 (number of claims completed in FY 2010), we determined thetotal number of weighted actions nationwide was 35,436.2.

5. We determined that it would take 4,067.9 days to process the 35,436.2 weightedactions represented by the nationwide apportionment caseload. We calculatedthe number of processing days by dividing the weighted action totals by the “fullysuccessful” performance standards for each classification of employee involvedin processing apportionment claims. For example, we determined that it wouldtake 1,301.8 processing days to complete the initial development of all FY10apportionment claims by multiplying the ASPEN credit for this function (1 point)by 10,870 and then dividing it by the GS-9 fully successful performance standardof 8.35 points. See table 2 below for breakdown by job function.

6. To determine the required number of FTE for each weighted action, we dividedthe number of required processing days by the standard number of employeeworkdays per year. In using the above example for the initial developmentfunction, we divided the 1,301.8 required processing days by 197 (standardnumber of employee workdays) to determine the 6.6 FTE requirement. For thiscomputation, we used the employee work hour number of 1576, which is thestandard for C&P budget formulations, and divided this number by 8 (number ofhours in a standard workday).

7. The same logic was followed to determine required FTE to process appeals.See Table 3 below.

TABLE 2Fiscal Year 2010 FTE Requirements for Apportionment Claims

Wgt*Action

Number**

CompletedApport.ClaimsFY10

TotalWgt.

Actions

Employee(Fully

SuccessfulProductionStandard)

ProcessingDays

(based onFS Perf.

Standard)

AverageEmployee

WorkDays Per

Year(1576/8)

EstimatedFTE

requiredto

completefunction

Establishmentof EP

.1 201 10,870 1087 Claims AsstGS-5 (8.35)

130.2 197 .7

Development 1 312 10,870 10,870 VSRGS-9 (8.35)

1301.8 197 6.6

Post-DAuthorizationof initial rates

.33 417 10,870 3,587.1 SVSRGS-11(10.5)

341.6 197 1.7

Post-DAuthorization

1.5 413 10,870 16,305 VSRGS-9 (8.35)

1952.7 197 9.9

Post-DAuthorizationof final award

.33 417 10,870 3,587.1 SVSRGS-11(10.5)

341.6 197 1.7

Total 3.26 NA 10,870 35,436.2 NA 4067.9 197 20.6 FTE

* Weight for apportionment actions from ASPEN for FY 2010** Action Numbers from apportionment actions from ASPEN for FY 2010

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TABLE 3Fiscal Year 2010 FTE Requirements for Apportionment Appeals

WgtActionNumber

Apport.AppealsRec’dFY 2010

TotalWgt

Employee(FullySuccessfulProductionStandard)

ProcessingDays(Wgt/ProdStandard)

AverageEmployeeWorkDays PerYear(1576/8)

EstimatedFTERequiredtoCompleteFunction

AppealRecordEstablished

.5 503 521 260.5 Claims AsstGS-5 (8.35)

31.2 197 .2

AppealsDevelopment

.75 504 521 390.8 Claims AsstGS-5 (8.35)

46.8 197 .2

AppealAction

1 201 521 521 DRO (3) 173.7 197 .9

ReleaseAppealDecision

.75 506 and508

521 390.8 VSR GS-9(8.35)

46.8 197 .2

Total 3 NA 521 1563.1 NA 298.5 197 1.5 FTE

Assumptions

Some completed claims used in this cost equivalent analysis may have erroneous“apportionment” claim labels due to user error. Similarly, there may have beenapportionment claims not counted in our analysis due to user error, (i.e., not selectingthe correct claim label).

Some apportionment claims required an inordinate amount of processing days. Forexample, there were 1,080 out of the 10,870 claims that took one year or more toprocess. The “average days to complete” for these 1,080 claims was 471 days(compared to 172.6 days for the overall apportionment inventory).

Some of the 10,870 apportionment claims could potentially represent apportionmentdecisions that are not subject to the proposed legislative change, (e.g., apportionmentsdue to incarceration). However, the number of such decisions not subject to the lawchange would be minimal.

For purposes of this cost equivalent analysis, C&P did not account for the down time(excused time from production time), movement of files, paper costs, and otheradministrative costs required in the processing of apportionment claims.

In terms of calculating work output, C&P assumes the above-described variables willoffset one another, and that the workload analysis contained herein provides anadequate picture of the apportionment workload.

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Appendix 3: Section 1.3

Service-Connected Burial Allowance for Sec. 1318 DIC recipients

Cost Benefit Analysis:

Estimated Benefits Cost:

Benefit cost is estimated to be $1.2 million during the first year, $5.1 million for fiveyears, and $7.3 million over ten years.

Benefits Cost Methodology:

According to the Office of Performance Analysis and Integrity, there were 2,584survivors under Section 1318 that were denied service-connected death allowance inFY 2010. This is approximately 0.75 percent of the total survivor compensationcaseload (343,039) in FY 2010 from the 2012 President’s Budget. This percentage(assuming it remains constant) is applied to the survivor caseload over ten years fromthe 2012 President’s Budget to calculate the number of survivors under section 1318that would qualify to receive the service-connected burial allowance. Obligations arecalculated by taking the difference of service-connected burial allowance and basicburial and plot allowance. Public Law 111-275 amends sections 2303 (a) and (b) toincrease burial and plot allowance from $300 to $700 for each benefit. In addition, theamendment also provides for annual increases based on the Consumer Price Index.The effects of Public Law 111-275 are reflected in this cost methodology.

Fiscal Year CaseloadObligations($ in 000's)

2013 2,982 1,222

2014 3,047 1,124

2015 3,118 1,035

2016 3,195 934

2017 3,278 826

5- Year Total 5,141

2018 3,365 709

2019 3,457 583

2020 3,554 447

2021 3,653 299

2022 3,705 154

10- Year Total 33,353 7,333

Estimated GOE cost equivalent:

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The total GOE cost equivalent for this proposal is $1.1 million for the first year, $6.9million for five years, and $16 million for ten years.

GOE Methodology:

Data Source: In determining the 18 FTE cost equivalent associated with this proposal,C&P Service relied upon the following sources:

Data provided to Compensation Service from Performance, Analysis, and Integrityon April 19, 2011 and April 22, 2011

RVSR Performance Plan VSR Performance Plan

Methodology: We determined FTE levels required to process adjudicative actionsrelating to the resolution of DIC under section 1318 and service-connected death casesin which the Veteran’s surviving spouse is otherwise entitled under section 1318. Thisnumber for FY 2010 was identified as 6,505.

As the foundation for this analysis, we used current VSR and RVSR productionstandards and weighted actions from ASPEN rather than the normal budget formula,which relies upon Work Rate Standards. This method depicts the amount of actualwork required to complete adjudicative actions to resolve the Service Connected Deathissue that will not be required if this proposal is adopted.

Step-By-Step Process of Determining Required FTE Levels

1. We added up weighted actions that are required to complete a DIC rating whenthe Veteran’s surviving spouse is otherwise entitled under section 1318, toinclude entitled to DIC under this section and section 1311. This equates to 2.5weighted actions. By multiplying the weighted actions by 6,505, we determinedthe total number of weighted actions nationwide was 16,262.5.

2. We determined that it would take 3,531.5 days to process the 16,262.5 weightedactions represented by the nationwide workload in FY 2010. We calculated thenumber of processing days by dividing the weighted action totals by the “fullysuccessful” performance production standard for VSRs and RVSRs for an 8-hourday. We used 5 weighted actions for VSR, GS 9, and 3.5 weighted actions forRVSR, GS 12.

3. To determine the required number of FTE to complete inventory of pertinent DICdecisions, we divided the number of required processing days (3,531.5) by thestandard number of employee workdays per year (197). We determined that 18FTE are required to process this workload. For the standard workdaycomputation, we used the employee work hour number of 1576, which is thestandard for C&P budget formulations, and divided this number by 8 (number ofhours in a standard workday) to ascertain the 197 days. See table below.

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Fiscal Year 2010 FTE Requirements for Completion of DIC Rating*Weight Number

of DICgrants inFY 2010in whichVeteranwas100% for10 years

TotalWgt.Actions

Employee(FullySuccessfulProductionStandard)

ProcessingDays(based onFS Perf.Standard)

AverageEmployeeWorkDays PerYear(1576/8)

EstimatedFTErequired toprocessworkload

Developmentof 140 EPClaim

1 6,505 6,505 VSR, GS-9(5)

1301 197 6.6

Making 140EP ready torate

1 6,505 6,505 VSR, GS-9(5)

1301 197 6.6

Rating of 140EP

.5 6,505 3,252.5 RVSR, GS-12 (3.5)

929.3 197 4.7

Total 2.5 6,505 16,262.5 NA 3,531.3 197 18 FTE

* Weight for actions from VSR and RVSR Performance Standard

Assumptions

We anticipate that no formal rating action will be required for the 6,505 cases that arespecific to the GOE cost equivalent estimate. VA will implement a procedural change toallow VSRs to administratively award DIC under section 1318 (and other ancillarybenefits such as Dependents Educational Assistance and CHAMPVA), whenapplicable. Due to this proposed procedural change, issuing a formal DIC rating forcause of death in these instances would be merely duplicative and therefore considereda moot issue.

Because the current $2,000 service connected death burial allowance will be authorizedunder DIC 1318 entitlement, there are no business or legal requirements to complete aformal rating decision to resolve a “service-connected death” issue.

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Appendix 4: Section 1.6

Elimination of Hospital Adjustments

Cost Benefit Analysis:

Benefit Costs: See Cost/Benefit Analysis below.

GOE Costs: We expect a decrease in workload of approximately one half of onepercent of the national compensation and pension workload. No increases in GOEcosts are expected as a result of this proposal.

Study Methodology Costs were identified and quantified in monetary terms Benefits were identified and quantified in monetary terms Costs and benefits compared and the difference between the two determined Other costs such as labor time of reviewing reports

Data and Sources

The parameters for the analysis are workload data EPs 135, 293, 320, and 600) forFY03 through FY07; FTEs and FTE costs (salaries) for FY03 through FY07; AccountReceivable and Waiver for FY03 through FY07; sample hospital adjustment data fromthe field; and hospital discharge data from FY03 through FY07.

Workload data were obtained from: the COIN DOOR 1001 Report, Analysis ofCompensation and Pension Workload; one-month workload sample data from theOakland and Buffalo ROs and the Philadelphia and St. Paul PMCs.

Numbers of nationwide hospital discharges were obtained from VHA Support ServiceCenter, who receives Patient Treatment Files containing veteran discharge data fromthe Austin Information Technology Center.

Accounts receivable and waiver data were obtained from the VA Debt ManagementCenter.

Cost Indicators

Hospital Adjustment Workload Costs

The first step in calculating workload cost is identifying EPs related to hospitalization.Four EPs (135, 293, 320, and 600) constitute the hospital adjustment workload.

EPs 135 and 320 account for most of the hospital adjustment workload.

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EP 135 applies to all reductions based on hospitalization (including nursing homeor domiciliary care at the VA expense) and subsequent resumptions based ondischarge from hospital.

EP 320 is applicable upon receipt of hospital or outpatient reports which havebeen properly referred for review and appropriate action concerning treatment fora service-connected disability (M21-4, Appendix C)

EPs 293 and 600 are overlapping and ancillary to EPs 135 and 320. EP 293, COWC decisions-issued following requests for waiver of indebtedness. EP 600 applies to due process notification of a proposed action.

Table 1Hospital Adjustment Workload Summaries for FY 03 through FY 07

FiscalYear

NationalWorkLoad *

EP135Workload

EP293WorkloadRelatedtoHosp.Adjust.

EP320Workload

Ratioof EP135thatResultsin EP600

EP 600WorkloadRelatedto EP135

Ratioof EP320RelatedtoHosp.Adjust.

EP 320WorkloadRelatedtoHosp.Adjust.

Ratioof EP320thatResultsin EP600

EP 600WorkloadRelatedto EP320

TotalHosp.Adjust.Workload(EPs135,293,320,and600)

TotalHosp.Adjust.Workload asa % ofNationalWorkload

03 2,127,428 4,981 53 6,899 0.90 4,483 0.30 2,070 0.05 103 11,690 0.5

04 2,253,191 5,438 419 7,256 0.90 4,594 0.30 2,177 0.05 109 12,737 0.6

05 2,145,471 6,983 907 7,488 0.90 6,285 0.30 2,246 0.05 112 16,533 0.8

06 2,183,365 6,144 92 7,071 0.90 5,530 0.30 2,121 0.05 106 13,993 0.6

07 2,313,267 5,195 486 6,290 0.90 4,676 0.30 1,887 0.05 94 12,244 0.5

Totals 11,022,722 28,741 1,957 35,004 0.90 25,568 0.30 10,501 0.05 524 67,197 0.6

* National workload represents total number of claims received during the fiscal year;includes rating, nonrating, eligibility, and ancillary claims; special reviews, (i.e. 680/690series EP) are not included in this number.

Formula: EP 600 workload related to EP 135 for each FY = 0.9 multiplied by EP 135workload. The assumption is that 90 percent of EP 135 will result in reduction ofbenefits, and the establishment of due process EP 600

Note: Because of data limitations, all assumptions in this section were made bysoliciting opinions from VARO and VACO subject matter experts.

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EP 320 workload related to hospital adjustment for each FY = 0.3 multiplied by EP 320workload. The assumption is that 70 percent of the EP 320 cases are claims forincrease and 30 percent are due to hospital adjustment.

EP 600 workload related to EP 320 for each FY = .05 multiplied by EP 320 workloadrelated to hospital adjustment. The assumption is that 5 percent of hospital adjustmentEP 320 will result in the establishment of EP 600.

Total Hospital Adjustment workload for each FY = EP 135 workload + EP 293 workloadrelated to hospital adjustment + EP 320 workload related to hospital adjustment + EP600 workload related to hospital adjustment.

Total Hospital Adjustment Workload as a percentage of Total National Workload foreach FY = Total Hospital Adjustment Workload for each FY divided by NationalWorkload for each FY multiplied by 100.

As Table 1 shows, in FY03, hospital adjustment workload consisted 0.5 percent of totalnational workload. In FY04, it increased to 0.6 percent. In FY05, it increased further to0.8 percent. In FY06 and FY07, it was calculated as 0.6 and 0.5 percent, respectively.For the period FY 03 through 07, the cumulative hospital adjustment workloadrepresented 0.6 percent of the total national workload.

Hospital Adjustment Full Time Employees Requirement:

RO and PMC employees process the hospital adjustment cases. The number ofemployees required for this workload is commensurate with the amount of workloadreceived. VBA standard methodology for calculating FTE need was applied, and theresult is shown in the table below.

Table 2

Hospital Adjustment Workload FTE Requirement (FY03 –FY07)

EP WRS SMH FY 03Workload

FY 04Workload

FY 05Workload

FY 06Workload

FY 07Workload

FY03TotalWorkloadManHours

FY04TotalWorkloadManHours

FY05TotalWorkloadManHours

FY06TotalWorkloadManHours

FY07TotalWorkloadManHours

FY03FTE

FY04FTE

FY05FTE

FY06FTE

FY07FTE

TotalFTE

135 1.32 1576 4,981 5,438 6,983 6,144 5,195 6,575 7,178 9,218 8,110 6,857 4.2 4.6 5.9 5.2 4.4 24.3

293 1.20 1576 53 419 907 486 64 503 1,088 .04 .3 .7 1.5

320 2.73 1576 2,070 2,177 2,246 2,121 1,887 5,651 5,943 6,132 5,790 5152 3.6 3.8 3.9 3.7 3.3 18.3

600 1.46 1576 4,586 4,703 6,397 4,770 6,696 6,866 9,340 4.3 4.4 5.9 24.2

Total 11,690 12,737 16,533 13,992 12,338 18,98520,92226,49522,23719,556 12.1 13.1 16.4 14.2 12.5 68.3

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Formula: FY EP Hospital Adjustment Total Workload Man Hours (purple) = FY EPWorkload multiplied by EP Work Rate Standard. FTE = FY EP Total Workload ManHours divided by Standard Man Hour.

EP 135 workload required 4.2 FTEs in FY03, 4.6 FTEs in FY04, 5.9 FTEs inFY05, 5.2 FTEs in FY06, and 4.4 FTEs in FY07;

EP 293 workload required less than 1 FTE for each FY 03, 04, 05, 06, and 07;

EP 320 workload required between 3 and 4 FTEs for each of the FYs 03,04, 05,06, and 07;

EP 600 workload required 4.3 FTEs in FY03, 4.4 FTEs in FY04, 5.9 FTEs inFY05, 5.2 FTEs in FY06, and 4.4 FTEs in FY07.

For the 5-year period FY03 through FY07, a total of approximately 68 FTEs (14 FTE peryear) processed the hospital adjustment workload.

Full Time Employee Costs

Having identified the number of FTEs required to process the hospital adjustmentworkload, the next step in the cost analysis is to compute their salaries.

The result of the computation is summarized in the table below.

Table 3

Hospital Adjustment Workload FTE Costs (FY03 – FY07)

FiscalYear

FTEs forEP 135Workload

FTEs forEP 293Workload

FTEs forEP 320Workload

FTEs forEP 600Workload

TotalFTEs

GS-Level of

FTEs

AnnualSalary ofFTE ($)

Total AnnualSalaries ($)

03 4.2 .04 3.6 4.3 12.1 9 45,383 549,134

04 4.6 .3 3.8 4.4 13.1 9 47,390 620,809

05 5.9 .7 3.9 5.9 16.4 9 49,145 805,978

06 5.2 .07 3.7 5.2 14.2 9 50,248 713,522

07 4.4 .4 3.3 4.4 12.5 9 51,157 639,463

Total 24.3 1.5 18.3 24.2 68.3 9 243,323 3,328,906

Note: GS-9, Step 5 represents the averaged salary scales (GS 7, 9, 10, and 11) ofhospital adjustment FTEs; Annual salary scale is based on OPM salary table.

Formula: Total Annual Salary = Total number of FTEs in FY multiplied by the AnnualSalary of FTEs.

$549,134 for 12.1 FTEs in FY03 $620,809 for 13.1 FTEs in FY04

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$805,978 for 16.4 FTEs in FY05 $713,522 for 14.2 FTEs in FY06 $639,463 for 12.5 FTEs in FY07

For FY03 through FY07, the calculated combined salary for 68.3 FTEs who processedhospital adjustment workload was $3.3 million ($665,781 per year).

Labor Costs of Running, Screening, and Reviewing Hospital Reports

Determining the labor time of running, screening, and reviewing hospital admissionreports at the national level is an important part of determining the overall cost of thisprogram. Because of the nature of these reviews, (i.e. many reports require no action),there is limited data at the national level that demonstrates the work output of thesereviews. Thus, two sources of data were generated and used for this study. First, asample of data was gathered at four regional offices during a one-month review inOctober 2005. Second, data regarding the number of hospital discharges nationwidewas obtained from VHA.

VHA Data

The numbers of hospital discharges were obtained from the VHA Support ServiceCenter. The VSSC regularly receives Patient Treatment Files containing veterandischarge data from the Austin Information Technology Center. The table below showsthe total number of hospital discharges nationally over a 5-year period. These totalsrepresent unique discharges. It is important to note that, for each discharge, one offollowing 8 codes is assigned to the veteran:

1. Service Connected greater than 10%2. Service Connected less than 10%3. Nonservice Connected + Service Connected greater than 10%4. Nonservice Connected + Pension + Service Connected less than 10%5. Nonservice Connected + Pension6. Nonservice Connected + Service Connected less than 10%7. Nonservice Connected (totals not used for study)8. Non-Veteran (totals not used for study)

For the purposes of this analysis, the totals from codes 1 through 6 were used since it isunlikely that regional office employees would review discharge reports from veteranswith code 7 and 8. The table below lists the total number of national hospital dischargesalong with the numbers from codes 1 through 6.

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Table 4

Total Numbers for Hospital Discharges (FY03 – FY07)

FiscalYear

Total # ofDischarges*

Code 1 Code 2 Code 3 Code 4 Code 5 Code 6

03 322,688 68,462 5,431 155,655 4,664 67,546 20,930

04 337,269 71,807 5,531 164,660 4,880 69,589 20,802

05 348,110 73,041 5,997 173,847 4,744 70,127 20,354

06 347,510 71,756 6,140 177,510 4,540 67,295 20,269

07 364,197 73,868 6,794 189,529 4,692 69,197 20,117

Total 1,719,774 358,934 29,893 861,201 23,520 343,754 102,472

* Represents numbers of veterans discharged with assigned codes 1 through 6 atVAMCs, VA Domicilaries, VA Nursing Homes, and Community Nursing Homes or Non-VA Hospitals at VA expense.

One-Month Field Study

A sample of data was gathered at four regional offices during a one-month review inOctober 2005. The purpose of this review was to determine the amount of effort spentin running, screening, and reviewing hospital admission and discharge reports. Oncethe data was collected from the Buffalo and Oakland Veteran Service Centers, and St.Paul and Philadelphia Pension Maintenance Centers, it was extrapolated to estimatenational statistics. Because of the relatively short time frame for the review, along withthe limited number of regional offices involved, the numbers reflected are consideredestimations.

Highlights from study from October 24, 2005 to November 14, 2005:

The sample regional offices spent a total of 14 hours of review time during thestudy period. This equates to 5,119 hours nationally to review compensation andpension hospital reports in FY05. (FY05 is used as base year)

A total of 1152 compensation and pension hospital reports were reviewed duringthe study period. This equates to 424,764 reports generated annually across thenation in FY05.

Only 3 percent of the total reports reviewed actually resulted in adjustmentactions while 97 percent required no action.

Based on the 5,119 hours of review time, the annual cost of running andscreening compensation and pension hospital reports was $120,543.

Note: Although the number of hospital reports estimated from the VBA field studyexceeds the number reported by the VHA Support Service Center by approximately 20percent, the numbers are not contradictory. It is common for multiple discharge reportsto be generated for the same veteran if he or she fits more than one of the categories

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listed in the Compensation and Pension Records Interchange. For example, multiplereports are generated for a veteran in receipt of nonservice-connected pension with aidand attendance, and who also has a service-connected condition. In this case, each ofthese reports requires review by a regional office employee to determine if adjustment isnecessary. The VHA data serves to support the VBA data.

To simplify the presentation of data from the field study, we have consolidated andplaced key data into a single table below. Again, the local data was obtained andextrapolated to arrive at the national numbers.

Table 5

Hospital Adjustment Data for Reviewing Reports (FY03 – FY07)FY Total # of

PensionReports

ReviewedBy the

PMCs (PerYear)

Total # ofComp.

ReportsReviewed

By the ROs(Per Year)

Total #Comp. And

PensionReports

Reviewedby Nation(Per Year)

Total Timein HoursSpent toReviewReports

by Nation(Per Year)

StandardMan

Hours ina Year

RequiredFTE (Per

Year)

AnnualSalary ofFTE ($)

TotalAnnualSalaries

FY03 39,336 381,444 420,780 5,080 1576 3.2 45,383 145,226

FY04 41,664 404,076 445,740 5,370 1576 3.4 47,390 161,126

FY05 39,672 384,756 424,428 5,119 1576 3.2 49,145 157,264

FY06 40,380 391,572 431,952 5,220 1576 3.3 50,248 165,818

FY07 42,072 414,876 456,948 5,531 1576 3.5 51,157 179,050

Totals 203,124 1,976,724 2,179,848 26,320 1576 16.648,704

(average)808,484

Formula: The following national workload trend factors were used to compute thenumbers of reports reviewed and total time spent for years FY 03, 04, 06, and 07. TheFY05 data is used as the base year. Workload trend factors were calculated using thenational workload figures from Table 1, which were obtained from COIN DOOR 1001Report, Analysis of Compensation and Pension Workload.

# of Reports Generated for FY04 = Total # of Reports Generated from FY05 multipliedby 1.0502 (national workload trend factor). National workload in FY04 was 5.02 percenthigher than FY05.

# of Reports Generated for FY03 = Total # of Reports Generated FY04 multiplied by.944 (national workload trend factor). National workload in FY03 was 5.58 percent lessthan FY04.

Total # Reports Generated for FY06 = Total # of Reports Generated FY05 multiplied by1.0177 (national workload trend factor). National workload increased from FY05 toFY06 by 1.77 percent.

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Total # of Reports Generated for FY07 = Total # of Reports Generated FY06 multipliedby 1.0595 (national workload trend factor). National workload increased from FY06 toFY07 by 5.95 percent.

In summary, it took an average of 5,264 man-hours per year at the national level to run,screen, and review the hospital admission/discharge reports. This required an averageof 3.3 FTE per year with an average salary of $48,665 over the 5-year study period. Asmentioned above, only 3 percent of the total reports reviewed actually resulted inadjustment actions while 97 percent required no action.

BENEFITS INDICATOR: Accounts Receivable as a Result of Hospital Adjustments

The only financial benefit or costs saving to the taxpayer that can be identified with theadministration of the hospital adjustment program are the Accounts Receivable or theoverpayment created. Accounts Receivable in this case is considered revenue(assuming they are collected). Both the Accounts Receivable and Waiver statistics arefrom hospital adjustment (transaction reason codes 35 and 36). Transaction reasoncode 35 is for hospital admission adjustment, while transaction reason code 36 is forhospital discharge adjustment.

Table 6

Summary of Accounts Receivable/ Waiver Data (FY03 – FY07)

FiscalYear

Number ofOriginalAccountsReceivable

Amount ofOriginalAccountsReceivable ($)

CurrentAmount ofAccountsReceivable ($)

Amount ofAccountsReceivableWaived ($)

AccountReceivablesWaived as a Ratioof OriginalAccountsReceivable

03 53 319,633.35 111,618.72 34,933.17 0.11

04 419 1,050,334.07 211,639.52 178,476.59 0.17

05 907 2,404,210.25 1,212,297.61 201,876.88 0.08

06 92 489,632.47 176,631.92 267,552.62 0.55

07 486 1,301,517.00 245,489.00 195,112.00 .15

Totals 1,957 5,565,327.14 1,957,676.77 877,951.26 0.16

Accounts Receivable and Waivers Source: VA Debt Management Center, St. Paul,Minnesota

Formula:Ratio of Waiver = Accounts Receivable Waived divided by Original AccountsReceivable

As Table 6 indicates, 16 percent of the original accounts receivable generated fromFY03 through FY07 were waived. However, according to the Debt ManagementCenter, and confirmed by the VBA Office of Resource Management, the amount of

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current accounts receivable include pending requests for waiver cases in whichdecisions have not been rendered. It also includes those decisions that have beenrendered but are under appeal. As a result, the amount waived will likely increase by anunknown amount.

In addition, the waiver figures represent only the amount of money waived, and notnecessarily the number of waiver cases granted. The Debt Management Center wasunable to audit the number of cases waived because the VBA Benefits DeliveryNetwork system retains only the most recent award transaction. Prior transitions arewritten over by later ones, so only the latest award actions are available for analysiswhile only fragments, if any, of an earlier transaction might remain intact. For example,a reduction due to hospitalization may have been later overwritten by a dependencyadjustment, or vise versa. Thus, the data is inherently limited.

Nonetheless, COWC statistics from VBA Office of Resource Management (Finance)show an average of 55 percentage of waiver requests were granted in FY03 throughFY07 at the national level.

COST BENEFIT MATRIX OF THE HOSPITAL ADJUSTMENT PROGRAM

Table 7

Summary of the financial cost and benefit associated with the hospital adjustmentprogram (FY03 – FY07)

FiscalYear Costs Benefits Variance +/-

Cost ofprocessinghospitaladjustmentEPs (Totalsalary)

Cost ofRunningandScreeningReports ($)

A/CsReceivableWaived ($) Total Costs ($)

A/CsReceivable($)

Benefitsminus Costs($)

03 549,134 145,226 34,933 729,293 319,633 -409,660

04 620,809 161,126 178,477 960,412 1,050,334 89,92205 805,978 157,264 201,877 1,165,119 2,404,210 1,239,091

06 713,522 165,818 267,553 1,146,893 489,632 -657,261

07 639,463 179,050 195,112 1,013,625 1,301,517 287,892

Totals $3,328,906 $808,484 $877,952 $5,015,342 $5,565,326 $549,984

Formula: Total Costs = FTE Salary for each FY + Cost of Running and ScreeningReports + Accounts Receivable Waived for each FY.

Benefits = Original Account Receivables for each FY (see Table 6) minus AccountReceivables Waived for each FY.

Variance = Benefits minus total costs (if variance is negative, that means total costsexceed benefits, and vice versa)

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Appendix 5: Cycle Impact Matrix

Changing the Game: Disability Claims Process 2012

Claims Cycle Accuracy

Proposal ControlTime

AwaitingDev

AwaitingEvidence

AwaitingDecision

AwaitingAward

AwaitingAuth

1.2 – Eliminate of certain types ofapportionments x x x x

1.3 – SC burial for 1318 DIC x x x x1.4 – Amend 38 USC 5103 x x x x1.5 – Amend 38 USC 5103A(b) x x x1.6 – Eliminate hospital reductions x x x2.2 – Single-flow appellate process x2.3 – Remove discretion at 38 C.F.R.§ 3.326 x x

2.4 – Amend 38 C.F.R. § 3.159regarding favorable awards x x

2.5 – Amend 38 C.F.R. § 3.156regarding New & Material evidence x x x

2.6 – Amend VA’s apportionmentregulations x x x x2.7 – Amend 38 C.F.R § 3.155(c) tomandate the use of VA Form 21-526B

x x x x

2.8 – Section-5103 notice on VAforms x x x x2.9 – Infer and award benefits forcertain claims, instead of inviting theclaim

x x x x x

2.11 – Amend 38 C.F.R. 3.1600 tostreamline burial claims x x x x x x3.1 – Reverse practice re:deferrals/denials x x

3.2 – Admin DIC awards x x x3.4 – Modify VA Form 21-4142 x4.1 – Exam by exception x x x x4.2 – Simplification of reasons andbases on VA Rating Decisions x

5.1 – Project for Ready-to-Ratecases involving VSOs x x x x

6.2 – Add a “timeliness” errormeasure x x x

6.3 – Quarterly meeting between thePolicy and Quality Assurance staff x

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Appeals Cycle

Proposal NODDRO

ElectionLetter

SOC F9Cert to

BVABVA

Decision

1.1 – First-instance Board jurisdiction x x1.2 – Eliminate of certain types ofapportionments x x x

1.4 – Amend 38 USC 5103 x

1.5 – Amend 38 USC 5103A(b) x

2.1 – Eliminate DRO election letter x x

2.2 – Single-flow appellate process x x x x

2.3 – Remove discretion at 38 C.F.R.§. 3.326 x x

2.4 – Amend 38 C.F.R. § 3.159regarding favorable awards x x

2.5 – Amend 38 C.F.R. § 3.156regarding New & Material evidence

x

2.6 – Amend VA’s apportionmentregulations x

2.7 – Amend 38 C.F.R § 3.155(c) tomandate the use of VA Form 21-526B x

2.8 – Section-5103 notice on VAforms x

4.1 – Exam by exception x x6.2 – Add a “timeliness” errormeasure x x x