Summary

As of April 2007, about 26,000 service members had been injured as part of Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF), according to the Department of Defense (DOD). Those service members injured in the line of duty are eligible for military disability compensation. When they leave the military, they may also be eligible for compensation from the Department of Veterans Affairs (VA). In fiscal year 2005 alone, the Army, Navy, and Air Force evaluated over 23,000 military disability retirement cases and, in fiscal year 2004, over $1 billion in permanent and temporary military disability retirement benefits were paid to over 90,000 service members. Through the VA disability compensation and pension claims programs, about $34.5 billion in VA cash disability benefits went to more than 3.5 million veterans and their survivors in fiscal year 2006. On April 23, 2007, we briefed the Commission on the results of our recent studies of DOD and VA disability systems. This report presents the information we provided during that briefing.

In our 2006 report on the DOD military disability retirement system, we found the services were not achieving the DOD timeliness goals for processing disability cases and DOD was not monitoring achievement of these goals. Our analysis of Army data on military disability benefit decisions also suggests that outcomes for active duty and reserve component members of the military may not be consistent. More specifically, Army reservists judged unfit for duty were somewhat less likely to receive either permanent disability retirement or a lump sum disability payment than their active duty counterparts, although we were unable to take into account all factors that might have legitimately explained this difference. Despite the potential for inconsistent disability decisions within and across the services, neither DOD nor the services systematically evaluated the consistency of these decisions or compiled the data on the characteristics of service members needed to do so. Finally, we found that training for MEB and PEB disability evaluation staff designed to produce timely and consistent decisions was lacking. In recent years we have completed several reviews on various aspects of VA disability compensation that have led to a number of recommendations for improvements in the system. With regard to claims processing between fiscal years 2003 and 2006, the average number of days these claims were pending increased by 16 days, to an average of 127 days. At the same time, appeals resolution remained a lengthy process. In fiscal year 2006, it took an average of 657 days to resolve appeals. Moreover, the accuracy of VA compensation decisions was 88 percent in 2006, well short of its goal of 98 percent. Decisions affecting eligibility for military disability benefits and VA disability compensation have a significant impact on the future of service members dedicated to serving their country. Given the importance of these decisions and the complexity of evaluation processes and rules governing eligibility for these benefits, it is essential that DOD and VA take the necessary steps to ensure that decisions in these cases are accurate, consistent, and timely.