WASHINGTON, DC—The administration has requested a $125 billion budget for VA in FY 2011 to fuel what VA officials have called a systematic transformation of the department …one that could, they say, turn VA into the “model of governance” over the next four years. This transformation focuses on three critical concerns: better access to benefits and services; ending the downward spiral that can result in veteran homelessness; and reducing the disability backlog and wait times. However, VA Secretary Eric Shinseki admitted that, despite promises to decrease the backlog year-by-year, the problem will likely get worse before it gets better.

Backlog to Grow Before it Shrinks

Shinseki spoke before the House VA Committee last month, and explained that recent decisions on the distribution of service-connected disability benefits linked to Agent Orange could have a serious impact on the number of disability claims being filed. In October, VA announced that, based on an Institute of Medicine study, it would be establishing service-connection between Agent Orange exposure and B cell leukemias, Parkinson’s disease, and ischemic heart disease. This brought the number of presumed Agent Orange disease associations to 15. A presumed connection means that a veteran need only show that he or she served in Vietnam during the war and that they have the illness to receive disability benefits, dependent on what disability rating they are given. An estimated 2.6 million veterans serving in Vietnam were exposed to Agent Orange.

“We’re looking at ways to fast-track the Agent Orange decisions. All we need to know is to validate presence, validate the disease, and then adjudicate the extent to which the disease warrants a disability rating. Getting to that kind of focused decision-making, we can take these decisions and move them quickly,” Shinseki told legislators. “We compounded the [backlog] problem by making this decision on Agent Orange. It was the right decision. It was long overdue, [but] it could increase processing time. It will certainly increase the inventory,” Shinseki told legislators.”

VA officials also acknowledged that by making veterans generally more aware of what benefits they are entitled to and educating them about common service-connected illnesses can cause the claims coming in to grow in number and complexity. Looking at claims coming in 15 years ago, the average number of medical issues listed in the claim was between two and three. Now the average number is four, and the average for those coming in at discharge sites—those sites used by just-returned servicemembers—is 11. “When you have that many issues coming in on a claim, it does make it more complex,” explained Michael Walcoff, acting undersecretary for benefits. “Veterans are becoming more aware of what they’re potentially entitled to. I think our outreach is better. I think service organizations are doing a good job in working with them. And I don’t think that is necessarily a bad thing, but it does add to the complexity of the work.”

Shinseki estimates that despite the hiring of thousands of new claims adjudicators, the inventory will grow over the next couple years along with processing times, the average for which currently stands at 161 days per claim. “But by 2013, we’ll be back to where we are today at 161 days,” he declared. “At that point, the learning that comes out [from claims processing pilot programs], within a couple years we’ll expect to have eliminated the backlog. Although our incremental budgets talk about each year reducing the backlog, my plan is that by 2015 for that backlog to be zero.”

Some legislators were skeptical of that claim. “In a couple years, we may be back to where we are in terms of time when you took over? I don’t believe it,” stated Rep Bob Filner, D-CA, the committee chair. “You’re trying to use brute force to deal with this, and we know the training times and the attrition, and we end up treading water.”

Concerns Over Research, Inspector General Funding

Despite concern over perennial issues such as the claims backlog, legislators expressed little concern with the proposed budget. Of the total request, $60.3 billion is for discretionary resources. Fifty one and one half billion dollars (86%) would be slated for medical care. This is an increase of $4.1 billion (8.6%) over FY 2010 levels. In accordance with law passed last year, the proposed budget also includes $54.3 billion in advanced funding for medical care resources for FY 2012.

One point of contention was VA’s relatively modest increase in funding for medical and prosthetics research. The proposed budget funds VA research at $590 million compared to $581 million in FY 2010. Rep Victor Snyder, D-AZ, a family practice physician before coming to Congress and a champion for VA medical research during every budget cycle, questioned whether this increase even covered general inflation, much less the high inflation rate seen in medical research. “Your budget increase does not keep pace with the medical research inflation rate in real medical research dollars,” he flatly stated. “If I’m right, then it means that your researchers are going to have to lay off people or cut back on projects.”

Dr Gerald Cross, Acting Under Secretary for Health, told Snyder that he was unfamiliar with what exactly the inflation rate was in the field, but testified, “I believe that we’re moving forward with a research budget that meets the needs of veterans.” Filner commented that the committee has looked at this issue and that an increase in medical research funds is likely in whatever legislation comes out of the House.

Another area of concern—this one pointed out by Rep Steve Buyer, R-IN, the committee’s ranking Republican—was the small increase in funding for VA’s Office of the Inspector General. The proposed FY 2011 IG budget is a mere $367,000 over last year’s $109 million. “This happens every year,” Buyer noted. “We like IG. It’s a multiplier. When those ombudsman or the IG office [investigate something], they can upset people at times, but good things result from what they’re attempting to do.”

This year’s Independent Budget—the document compiled by the leading veteran service organizations giving their recommendations for VA funding—includes a request only slightly above that of the president’s budget. While the president’s proposal funds medical care at $51.5 billion, the Independent Budget would fund it at $52 billion.

“We believe this estimation validates the advanced projections the administration calculated last year and have carried over into this year,” declared Carl Blake, national legislative director for the Paralyzed Veterans of America. “We remain confident the administration is heading in a positive direction.”

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