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“Examining VA Efforts to Decrease Delays in Veterans’ Disability Compensation Claims”

House Veterans Affairs Committee, Disability Assistance and Memorial Affairs Subcommittee Hearing

April 9, 2025 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• Mr. Kenneth Smith: Assistant Deputy Undersecretary Field Operations and Acting Executive Director Education Services, U.S. Department of Veterans Affairs, Veterans Benefits Administration

• Mr. James W. Smith: Deputy Executive Director Policy and Procedures Compensation Service, U.S. Department of Veterans Affairs, Veterans Benefits Administration

• Mr. Robert J. Orifici: Executive Director Benefits and Memorial Services, U.S. Department of Veterans Affairs, Office of Information and Technology

• Mr. James "Jim" R. Swartz: President, AFGE Local 2823, American Federation of Government Employees

Keywords mentioned:

• Disability compensation, overdevelopment, unnecessary exams, government waste, OIG review, training processors, National Work Queue (NWQ), avoidable deferrals, collective bargaining, employee morale

IN THEIR WORDS

OPENING STATEMENTS FROM THE SUBCOMMITTEE

• Chairman Morgan Luttrell stated that the VA cannot decide a veteran’s claim until all development is completed. He underlined that overdevelopment—taking unnecessary steps like ordering exams when sufficient evidence already exists—wastes time and resources. He criticized the practice of scheduling unnecessary exams, which delays decisions and sometimes leads to wrongful denials if veterans miss those appointments. The Chairman supported the Review Every Veterans Claim Act (H.R. 2137) as a solution to this problem and cited statistics showing government waste, such as $1.4 million spent on unnecessary exams over a six-month period. He urged the VA to implement better training, clearer guidance, and technology that notifies all claims processors involved in overdeveloped claims.

• Ranking Member Morgan McGarvey criticized the administration’s portrayal of VA employees as unproductive. He defended the dedication of VBA employees, especially those who are also veterans, and described the difficult conditions they work under, such as lack of training, arbitrary metrics, and low morale. The Ranking Member argued that recent moves to undermine collective bargaining agreements harm employee performance and ultimately veterans. He urged the VA Secretary to request an exemption from the executive order limiting union protections, asserting that unions improve training, retention, and service quality for veterans.

SUMMARY OF KEY POINTS

• Mr. Kenneth Smith reported that the VA has made significant efforts to improve efficiency in processing disability claims, especially through the National Work Queue (NWQ) and the Overdevelopment Reduction Taskforce. He outlined three key improvements: enhancing the exam scheduling assistant, updating training with interactive modules, and developing a real-time error-checking system in the Veterans Benefits Management System (VBMS). Mr. Smith stated that these changes have already reduced overdevelopment errors and avoidable deferrals and that further improvements, including predictive analytics for claims prioritization, are underway with completion expected in FY26. He affirmed the VA’s commitment to continuous improvement and high-quality service for veterans and their families.

• Mr. Jim Swartz called for the NWQ to keep claims within the same regional office to prevent delays and promote learning from errors. He criticized the current system for inefficiencies such as unnecessary deferrals, miscommunication between offices, and over-reliance on shuffling claims nationally. Mr. Swartz advocated for hands-on, basic training and updated curricula, particularly for the PACT Act, and argued that automatic case distribution should be improved to avoid idle time. He asked the Subcommittee to support union exemptions from the recent executive order, stating that collective bargaining rights are essential for retaining institutional knowledge and improving outcomes for veterans.

• Chairman Luttrell asked for a detailed update on improvements to the NWQ 2.0, specifically referencing first-touch efficiency and whether claims can be returned to the same claims processor. Mr. Kenneth Smith responded that the VA was developing new capabilities to provide direct, real-time feedback to employees when errors occur, before the claim returns to the queue. He also noted that training had been revamped, including mandatory workforce-wide sessions and better instruction on when to order exams to avoid overdevelopment.

• Chairman Luttrell then asked about reports from VA employees who said they did not have enough work. Mr. Kenneth Smith explained that there were 918,000 veterans awaiting claims decisions and suggested that the issue stemmed from mismatches in how work is assigned. He said the VA was working to allow employees to request claims proactively, while also tailoring assignments based on experience and training. He confirmed that the goal was to keep employees continuously supplied with appropriate cases and allow supervisors to oversee productivity.

• Ranking Member McGarvey questioned Mr. Swartz about the impact of the recent executive order on collective bargaining rights and whether the Secretary had requested an exemption for VBA employees. Mr. Swartz stated that to his knowledge, the Secretary had not submitted such a request. He clarified that union members cannot bargain for wages, promotions, or performance metrics and are prohibited by law from striking. He claimed that the union could play a critical role in identifying training needs and helping employees improve, particularly when they were afraid to go directly to supervisors.

• The Ranking Member then asked about the primary barriers preventing frontline employees from operating more effectively. Mr. Swartz identified inadequate training as the biggest issue and reiterated that unions could help by gathering feedback and advocating for needed instruction. He believed that removing collective bargaining rights could hurt morale and make employees less likely to voice concerns. 

• Ranking Member McGarvey asked the same question regarding employee input in technology and training development. Mr. Kenneth Smith replied that management typically developed these solutions before briefing the union. However, he noted that some union members were part of training teams and helped develop content. Mr. James Smith added that subject matter experts from the field, often labor representatives, also provided training and helped shape content based on their direct experience.

• Chairman Luttrell asked whether the Overdevelopment Reduction Task Force had been disbanded. Mr. Kenneth Smith said that the task force had completed its work at the end of July but that efforts were ongoing. He described continued collaboration with other VA departments to improve automation and processes.

• Chairman Luttrell followed up by asking whether the task force had accomplished its mission. Mr. Kenneth Smith confirmed that it had and said that the task force made over 50 manual updates and improved the exam scheduling assistant. He explained that the tool was currently standalone but would soon be integrated into the VA’s broader claims system.

• The Chairman asked what the VA was doing to reinforce the rules around when to schedule an exam. Mr. Kenneth Smith replied that training efforts hinged on exam requirements and were shaped by the task force’s recommendations. He added that these initiatives had already contributed to a 7% reduction in overdevelopment errors.

• Chairman Luttrell asked whether the VA had set a projection for claims processing this year and if they had broken any records. He then asked about the total number of outstanding claims and whether the VA might one day “run out of veterans.” Mr. Kenneth Smith reported that the VA had completed over one million claims earlier in the year than ever before and was running 8.5% ahead of last year’s pace. He projected that the VA would process more than 2.5 million claims in 2025. He also said that the VA was completing about 11,000 claims daily, helping to reduce the backlog.

• Chairman Luttrell opened the floor to the other witnesses for additional comments. Mr. James Smith highlighted improvements made based on feedback from subject matter experts, including smaller class sizes and a structured four-phase training process. Mr. Robert Orifici added that the VA was leveraging AI to improve claims accuracy and reduce deferrals, with several pilot programs underway to improve decision-making on the first touch.

• The Chairman closed by illustrating the evolving needs of younger generations of veterans and the imperative for the VA to continue improving. Ranking Member McGarvey echoed those sentiments and stressed bipartisan cooperation to ensure the best service for veterans. He then entered into the record a bipartisan letter condemning the rollback of collective bargaining rights and urging an exemption for VA employees.

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