STATEMENT OF JAMES P. TERRY
CHAIRMAN, BOARD OF VETERANS' APPEALS
BEFORE THE
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL
AFFAIRS,
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES

February 16, 2006

          Mr. Chairman, members of the Committee, and staff, I want to thank you for the opportunity to submit a statement for the record concerning the Fiscal Year 2007 budget request for the Board of Veterans’ Appeals (Board or BVA).  

          The Board’s mission, as set forth in section 7101(a) of Title 38, United States Code, is essentially unchanged since its establishment in 1933 – “to conduct hearings and consider and dispose of appeals properly before the Board in a timely manner.”  The Board renders a final decision on behalf of the Secretary on appeals of all questions of law and fact necessary to a decision by the Secretary under a law that affects the provision of VA benefits.  These appeals generally arise from decisions of VA regional offices, but also include those arising from certain decisions by VA medical centers.  Although the Board is an appellate body, it must consider all evidence and material in the record and applicable laws and regulations in each case it considers.  In addition to ruling on the merits of a claim, the Board may direct further development of the evidence and readjudication of the claims at issue by the originating agency if it is necessary to fairly consider the appeal.   

          The Board has jurisdiction over a wide variety of issues and matters, but the vast majority of appeals considered (about 96 percent) involve claims for disability compensation or death claims.  Examples of other types of claims that are addressed by the Board include fee basis medical care, waiver of recovery of overpayments, reimbursement for medical treatment expenses, education assistance benefits, vocational rehabilitation training, attorney fee matters, and insurance benefits.   

          Our objective is to produce well-reasoned, accurate, timely and fair appellate decisions in all the cases that come before us.  

          The Board operates under the administrative control and supervision of its Chairman.  I am assisted in this responsibility by our Vice Chairman, Senior Deputy Vice Chairman and four Deputy Vice Chairmen and eight Chief Veterans Law Judges.  We have 56 Veterans Law Judges (VLJs) who render decisions on appeals.  They are assisted by 240 staff counsel and other administrative, clerical and legal support staff.   

          The Board is organized into four Decision Teams with jurisdiction over appeals arising from regional offices in one of four geographical regions.  Each Decision Team includes a Deputy Vice Chairman, two Chief Judges, 11 line Judges, 2 Senior Counsel, and currently 60 Counsel and Associate Counsel.  Each line Judge has five or six attorneys assigned to him or her.  Counsel and Associate Counsel research and prepare decisions for review by the VLJs.  Our Office of Quality Review reviews a statistically significant sampling of the Board’s decisions for quality and legal correctness.  We had an accuracy rate of about 89 percent in FY 2005, as determined by the Board’s Quality Review process,  and are striving to improve accuracy through identifying areas of deficiency and providing appropriate training and guidance to our judges and counsel.    

          Each non-supervisory VLJ is expected to complete a minimum of 752 decisions per year as his or her “fair share” of the Board’s total workload, and conduct three one-week travel boards to regional offices.  In Fiscal Year 2005, staff counsel were required to draft at least 152 decisions per year as their “fair share.”  We plan to increase that requirement in the near future.  The Board decided 34,175 appeals in 2005.  All cases are decided in the order in which they are placed on the Board’s docket, unless advanced upon motion as a result of the appellant’s age, serious illness, severe financial hardship, or other good cause shown.

          When I testified before the House Committee on Veterans’ Affairs in December 2005, I contrasted our performance with that of past years, notably in 1994 and 1998.  This comparison is helpful in demonstrating where the Board has been, where we currently are, and where we are heading in the future, including challenges we face.  Like most other private and public organizations, we are producing more quality products with less resources by optimizing performance and management.  

          In Fiscal Year (FY) 1994, the Board issued 22,045 decisions with 442 full time equivalent employees (FTE) – or 50 decisions per FTE.  Our pending caseload stood at 47,148, and was on its way to 60,000.  Our measure of timeliness then used—average response time—was 781 days.  

          By FY 1998, we had significantly improved our timeliness and productivity.  With 491 authorized FTE, we held 4,875 hearings and issued 38,886 decisions – or 79 decisions per FTE.  Appeals resolution time—the time from the date a claimant files a Notice of Disagreement until he or she receives a final decision on appeal from either the agency of original jurisdiction (AOJ) or the Board—was 686 days.   

          In FY 2005 the Board issued 34,175 decisions with 434 FTE – or 79 decisions per FTE.  We also conducted 8,576 hearings, a substantial increase from 1998 and the highest number ever by the Board.  Appeals resolution time stood at 622 days.  Our cycle time—the time that it actually takes the Board itself to issue a decision after we receive the record on appeal—was 104 days.  This measure of timeliness excludes the time the case is with the service organization representative and the time the case remains at a field station prior to a requested Travel Board or Video conference hearing.   

          The Board’s most significant challenge for the future is to continue to improve our performance and processes to eliminate the growing backlog.  The FY 2007 budget level will enable us to do so as the chart below indicates:    

          The two most important goals to enable us to eliminate the growing backlog are reducing avoidable remands and increasing productivity.  In regard to remands, we know that veterans want timely and correct decisions with respect to their claims for benefits.  For the Board to do that, the record must contain all evidence necessary to decide the claim and show that all necessary procedural protections have been provided.  If the record does not meet these requirements, and the benefits sought cannot be granted, a remand for further development by the AOJ is necessary.   

          Remands significantly lengthen the amount of time it takes for a veteran to receive a final decision.  A remand adds about a year to the appellate process.  Remands delay not only the individual cases, but divert resources from deciding new appeals.  About 75 percent of cases remanded are returned to the Board, which increases our workload and further degrades timeliness.  In addition, because by law we must process the oldest cases first, processing of newer appeals is delayed when remanded appeals are returned to the Board for readjudication.  Hence, eliminating avoidable remands is a goal that will provide better service to veterans and their families and, ultimately, will contribute to diminishing the growing backlog.   

          We are working with the Veterans Benefit Administration (VBA), Office of General Counsel (OGC), and the Veterans Health Administration (VHA) to identify and track the root causes of remands in order to provide training that will eliminate avoidable remands.  Our training efforts have been considerable.  Several training sessions on remand avoidance have been held for all VLJs and staff counsel.  We also have held joint training sessions with VBA, including a national video broadcast, on avoidable remands and evidence development.  We have conducted numerous sessions on a variety of medical and legal subjects within our jurisdiction—all designed to reduce remands and improve quality.  Additionally, each of our Travel Boards has met with regional office personnel to answer questions and/or discuss shared areas of concern.  Finally, we are working with VHA and VBA on the Compensation and Pension Examination Project (CPEP), which, by improving the quality of VA compensation medical examinations, will reduce a major cause of remands.  

          The results so far are encouraging.  During 2005, 14,292 cases were returned to the Board for readjudication following completion of development actions directed by BVA remands.  There were 25,656 cases in remand status at the end of FY 2005, down from 31,645 at the end of FY 2004.  The Board’s remand rate for FY 2005 dropped to 38.6 percent, as compared to 56.8 percent in FY 2004.  In FY 2006, the remand rate thus far stands at 32.1 percent.  We expect further improvement once we begin reaching cases on our docket that have been subject to VBA’s efforts to avoid remands.   

          Another important challenge is to work with the 57 regional offices and the veterans service organizations to ensure Travel Boards are dispatched as soon as a sufficient number of cases are ready for hearing.  In 2005, in addition to 104 scheduled Travel Boards, trips to Waco, St. Petersburg, Columbia, Las Vegas and Manila were extended for an additional week due to the number of cases ready for hearing.  Similarly, unscheduled trips to Waco, St. Petersburg, Detroit, Honolulu, Phoenix and Cheyenne were added after the regional office provided notice that the docket was ready.   

          Although much has been done, we still have much to do in increasing productivity at the Board.  Within existing resources, and by way of incentives and sound management, we will continue to improve by:
   

            We believe these measures will reduce the backlog and shorten the time it takes for a veteran to receive a fair, well-reasoned Board decision.  Working together with VBA, we have reduced the time it takes for an appeal to be finally resolved at either the AOJ or Board levels from 686 days in FY 1998, to 622 days in FY 2005.  While the Board’s decision quality modestly improved to 89 percent in FY 2005, as determined by the Board’s Quality Review process,  this reflects the complexity involved in drafting more merits decisions, as opposed to remands.     Finally, the Board’s own timeliness—our cycle time—stands at a little over three months. 

          In order to accomplish the above goals, the Board is requesting for FY 2007 an average employment level of 444 full time employees (FTE) and $55,309,000 to support its operations.   We also plan to increase productivity by increasing the number of decisions per FTE from 79 (as in FY 1998 and FY 2005) to 81 in FY 2006 and FY 2007.   A summary of the Board’s request for FY 2007, as well as the budget numbers from FY 2005 and FY 2006, is contained in chart below:  

The 2005 obligations above contain $161,000 in non-personal services Information Technology (IT) costs.  Beginning in 2006, all of VA’s non-personal services IT funding is being budgeted within a separate IT account. 

          Additional supporting information for the FY 2007 budget request follows. 

Average Employment

          Executive, Management and Administrative Support:  This consists of all personnel in the Office of the Chairman, the Appellate Group, and the Management and Administration division.  General responsibilities include executive direction, development and implementation of Board policy, planning, direction of operations, and coordination of resources of the BVA to assure accomplishment of its mission.  Included in this group are personnel responsible for quality review program operations, attorney fee program matters, FOIA/Privacy Act matters, litigation support issues, regulatory and legislative matters, publications, and the Board’s Research Center operations.  Also included are personnel to maintain the docket; schedule hearings; and provide correspondence, mail and record management activities, information systems support, secretarial services, transcription, and other administrative support.  

          Decision Teams:  These are comprised of VLJs and staff counsel.  The VLJs consider all appeals properly before them, conduct hearings, evaluate evidence of record, and enter written decisions on issues presented on appeal.  Board counsel conduct research and prepare decisions for review and approval of members and perform records designation responsibilities relative to appeals filed with the Court of Appeals for Veterans Claims.  On cases requiring development, Board counsel are also responsible for preparing a remand decision setting out evidence to be obtained prior to entry of a decision.  

OBLIGATIONS

          Personal Services:  Personal services include base pay, cash awards, SES bonuses, overtime, terminal leave, and the government’s cost for regular benefits such as retirement, health benefits, life insurance, Medicare, travel subsidy, and child care subsidy.  BVA is prepared to effectively manage its operations and shift more of its funding to the direct support of our Nation’s veterans with 444 FTE in 2007- more than a 2.3 percent increase in manpower.  

          Travel:  These funds are used primarily for traveling VLJs to conduct formal hearings at field stations.  Other travel expenses include trips of the Chairman and other Board staff to participate in initiatives with VA appellate program implications, and to attend conferences and other meetings involving veterans’ affairs.  These funds are also used for travel in conjunction with executive development and other training.  The requested funds will also provide for Board attorneys to travel to regional offices to assist VLJs in preparing for hearings and provide other assistance as needed by the field staff.  Current practice was recently changed to send only one attorney, instead of two, on Travel Boards, except for trips to St. Petersburg and Waco.  This will result in a reduction of needed travel funds.   

          Transportation of Materials:  These funds cover shipping costs of recordings to the Board’s transcription unit in Wilkes-Barre, Pennsylvania, and pay for shipping claims folders and miscellaneous appeals documentation to and from VA regional offices, medical schools, VA medical centers, and other sources utilized to obtain outside medical opinions and other shipments relative to pending appeals.  

          Rents, Communications, and Utilities:  These funds cover the rental costs for telephone lines and miscellaneous office equipment.  

          Printing and Reproduction:  These funds are used to cover the cost of printing the forms, pamphlets, manuals, and other information necessary to accomplish the Board’s mission.  

          Other Services:  The Board uses contractual support for the BVA Research Center, and tuition costs for executive development, legal, medical, professional, and other training.  

          Supplies and Materials:  This budget object classification includes funds for general office supplies, operating supplies, office automation supplies, books, professional periodicals, and other reference materials for case-related research.

          Equipment:  These funds are used toward the acquisition and/or replacement of equipment, photocopiers, dictating equipment, transcription devices, and other office equipment in accordance with equipment acquisition and replacement schedules.  

          I want to assure you, Chairman Miller, and the other distinguished members of this subcommittee, that the Board will continue working to develop new and creative solutions to the challenges we face in order to fulfill our statutory mission to hold hearings and provide timely, high-quality decisions to our Nation’s veterans and their families. 

          I would be pleased to answer any written follow-up questions you or any other members of the subcommittee might have.