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What Led Congress to Make a Major Change in the Appeals Process?

The Department of Veterans Affair’s fixation on solving the claims backlog problem that reached an apex in 2012, resulted in a disregard for a growing appeals backlog during that same period of time. The solution was the “Veterans Appeals and Modernization Act of 2017.”

The Claims Backlog Led Directly to a Backlog in Appeals

In order to understand why the new review system came about, we have to talk about the appeals backlog problem that produced it. This problem with appeals from unfavorable decisions piling up year after year is a direct result of the claims backlog that we discussed in in the section under compensation claims. In that section, we discussed how the number of applications for disability compensation, starting in 2008, continued growing each year even though the number of living veterans was declining. The department could not handle the load and by 2012 the Regional Offices had almost 900,000 claims that had been around for longer than a year. Some claimants were waiting years just for a decision. The department was not prepared for this ever-growing volume of undecided claims and beginning in 2010, VA was being pressured by Congress and veterans service organizations to do something about the problem.

You can see in the graph below the hump in the red graphics line that dramatically illustrates the increase in claims backlog that started about halfway through fiscal year 2010 and continued on through fiscal year 2012 until you see the graph line starting to decline due to VA taking charge and solving the problem.

Claims Submitted vs Claims Processed
Claims Received and Processed

We discussed in some detail in that previous module, the solution to the problem which was transitioning from a paper-based to a digital based claim process and designing a database to handle the conversion of all paper forms into PDF format. VA also began a year-to-year process of hiring and training new employees for claims handling. Also, a new claims processing model was developed to implement and manage the new paperless system. In 2010 a goal was set that no claim should go beyond 125 days without a decision.

Unfortunately, VA became so fixated on solving the claims backlog and meeting the 125 day processing goal, that they literally ignored a growing number of appeals from unfavorable decisions. They certainly knew that the number of appeals would grow, because they had hundreds of thousands of backlogged claims to decide and a certain percentage of those decisions would result in appeals. This on top of the appeals that would normally be generated by the system every year.

Claims Workload
Appeals Workload

Above are graphs from the claims workload and the subsequent appeals workload generated by those claims. You can see in 2012 that the number of appeals in backlog with the board of veterans appeals and the number of appeals decided was just about the same at around 45,000. By 2018, the appeals backlog had grown to around 166,000 appeals with the BVA and around 81,000 appeals decided by the BVA. At this point, there is a definite uptick in appeals decided from the previous year. This is because VA had decided to attack the problem and by 2018 VA had hired new appeals judges and was in the process of implementing new procedures within the BVA to expedite decisions. But this initiative did not solve the underlying problem which is not a failure of the board of veterans appeals to do its job. The failure was due to incompetency in the Regional Offices in the inefficient handling of appeals.

VA Did a Poor Job in Anticipating and Managing the Appeals Backlog

Here is an excerpt from a highly critical report concerning the appeals backlog from the office of Inspector General dated March 28, 2018.

“…Delays in appeals processing occurred because VBA leadership prioritized the backlog of disability claims over all other workloads, including appeals. In 2010, the then Secretary of VA defined the VA claims backlog as any disability claim over 125 days old, and VA set a goal to provide all veterans with decisions on their claims in no more than 125 days. As a result, despite being aware of challenges in the appeals process and anticipating that processing more claims would result in more appeals, VA dedicated resources disproportionately to process the claims backlog. VBA’s lack of priority in processing appeals delayed appellants receiving timely resolution of their appeals, which in some cases resulted in appellants waiting years to receive favorable decisions and compensation. These delays negatively affected appellants as some received significant additional payments. Delaying decisions also resulted in some appellants paying more of their benefits to accredited attorneys and agents who were entitled to a percentage of their post due benefits. Finally, appeals processing errors resulted in VBA losing control of some appeals, misrepresented VA’s reported statistics, and caused unnecessary delays in resolving appeals….”

The implication in this report is the department knew an appeals backlog was coming as early as 2010 and could have taken action to avoid the backlog possibly through new procedures or added manpower, but instead let the situation get out of hand. Reading between the lines, it appears that had management done its job, there would have been no need for the new legislation to change the entire system.

The Board of Veterans Appeals Failure to Handle the Backlog Is Not the Problem

Decisions pending with the Board of Veterans Appeals are only the tip of the iceberg. The appeals backlog reported by VA only represents those with The Board of Veterans Appeals (BVA). There are two or three times more pending appeals beyond those with the BVA. The failure is not due to the Board of Veterans Appeals. The failure is in the Regional Offices.

As of 2012, the number of appeals pending with the Board of Veterans Appeals was just about equal to the number of decisions made. (See the chart above) The BVA turned around about 45,000 appeals within that year with nothing adding to a backlog. By the end of fiscal year 2018 which is October 31 of that year, the number of appeals pending with the BVA was about 166,000 and they had only decided about 81,000 of them.

The official 166,000 pending actions at the end of fiscal year 2018 were only appeals that were being handled by the Board of Appeals. A larger number of appeals are in process in the Regional Offices waiting for certification for the Board or being handled after a decision or remand from the BVA to the appeals resource center or regional offices.

According to the citation from the inspector general's report, VA apparently lost track of these additional appeals in the Regional Offices and in the Appeals Resource Center at the home office in Washington DC and apparently has no idea how many there are. Estimates are that appeals with the BVA and in the Regional Offices could be anywhere from 400,000 to 600,000 in total. These unknown number of appeals are far more than what is actually reported.

2017 Board of Veterans Appeals report to Congress

The images above were taken from the 2017 Board of Veterans Appeals report to Congress. As of this date, the 2018 report was not yet available. It would be interesting to see if the amount of time for appeals with the Board is going down or is still going up. In 2017, the average amount of time that an appeal lingered with the Board of Appeals Was very close to 1 year. In our opinion, the board taking an average of one year to decide an appeal seems reasonable. It appears to us the problem with the appeals backlog does not rest with the Board. The problem is the Regional Offices and the Appeals Resource Center in the home office in Washington DC.

In 2017, the average processing time of an appeal from Notice Of Disagreement to remand back to the Regional Office and final disposition was almost exactly 6 years; broken down as follows

- In 2017, the average processing time of an appeal in the Regional Offices was 1,802 days or almost exactly 5 years
- In 2017, the average processing time of an appeal with the Board of Veterans Appeals was 568 days or almost exactly 1 year

Currently, the average processing time has gone up to around 7 years for an appeal

You also see from the chart above that the average amount of time for an appeal to be prepared for certification by the Regional Office and then to prepare a decision letter or in some cases further develop the claim after the appeal was sent by the Board back to the the ROs or the ARC was almost exactly 5 years. Somehow these appeals disappear into an administrative sinkhole. Many veterans service organizations and individuals who help veterans call this unbelievable 5 year delay from the Regional Offices the black hole of appeals. Literally the appeals disappear and no one knows what happens to them. It is incredible that it takes 5 years to accomplish the simple administrative tasks of certifying an appeal or preparing an award letter or a denial letter after the Board has made its decision. To take this much time is absurd. We are told that the average processing of an appeal has now gone up to seven years.

In a subsequent section we will discuss how VA finally decided to attack the appeals backlog problem by having Congress enact new legislation to supposedly streamline and improve the appeals process.

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