  The American Veteran's On-Line News Magazine Click here to make VA Watchdog dot Org your homepage VA NEWS FLASH from Larry Scott at VA Watchdog dot Org -- 09-06-2008 |
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The American Veteran's On-Line News Magazine Click here to make VA Watchdog dot Org your homepage VA NEWS FLASH from Larry Scott at VA Watchdog dot Org -- 09-06-2008 |
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CLAIMS BACKLOG -- VBA has effectively managed hiring new employees and is progressing at integrating them into the claims processing workforce. But VAOIG could not conclude that the hiring initiative alone will result in eliminating claims backlog.
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search engine... click here... Full VAOIG report here... Executive Summary posted below:
------------------------- Executive Summary Introduction In 2007, with supplemental funding from Congress, the Veterans Benefits Administration (VBA) initiated an ambitious plan to increase its claims processing workforce by about 30 percent. The VA Office of Inspector General (OIG) conducted this audit to determine the impact of VBA’s hiring initiative on reducing the claims backlog. During the audit, we assessed the effectiveness and timeliness of VBA’s hiring process, VBA’s process for ensuring new employees are trained and supervised, and VBA’s overall progress at integrating new employees into the claims processing workforce. Ensuring sufficient staffing to meet the growth
in the number and complexity of veterans’ benefits claims has been a
significant challenge for VBA. Over the past 5 years, the number of claims
received each year has generally exceeded the number of claims
In his February 2008 testimony before the House Committee on Veterans’ Affairs, Subcommittee on Disability Assistance and Memorial Affairs, VBA’s Deputy Under Secretary for Benefits reported that VBA planned to hire 3,100 new full-time equivalent employees (FTE) by the end of FY 2008 and that VBA was also conducting ongoing recruitment to replace losses due to attrition. VBA allocated the 3,100 new FTE primarily to 4 VBA business lines—compensation and pension (C&P), education, vocational rehabilitation and employment (VR&E), and loan guaranty. The C&P business line received 2,834 FTE (or 91 percent) of the total allocation because C&P operations represent the largest portion of VBA’s workload. VBA also allocated some positions to other business lines because, according to VBA officials, when C&P workload increases, the workload in these other areas typically increases. From the beginning of FY 2007 to May 10, 2008, VBA had hired 2,456 C&P FTE, achieving about 87 percent of its goal of 2,834 FTE, and appeared to be on track for hiring the remaining 378 FTE by the end of FY 2008. Claims processing is the most significant portion of C&P business line’s workload, and C&P employees process two major types of claims: rating claims and non-rating claims. Disability compensation claims—commonly referred to as rating claims by VBA— require a trained rating specialist to evaluate medical evidence. Rating claims include original and re-opened disability compensation claims for service-connected diseases or injuries, original pension claims, and death compensation claims. The number of rating claims VBA received each year has grown steadily over the past 5 years, from 735,275 claims in FY 2003 to 838,141 claims received in FY 2007. Non-rating claims do not require rating decisions
and include dependency claims, income adjustments for pension claims, and
burial claims. The number of non-rating claims received has varied over
past 5 years, with 726,479 claims received in FY 2007. Results VBA has effectively managed its hiring initiative by implementing processes to ensure the timely hiring and training of new employees. VBA is also progressing at integrating new employees into the claims processing workforce, but the new FTE are not expected to have a positive impact on decreasing the claims inventory until at least the end of FY 2009, when they have completed 1–2 years of formal and on-the-job training. Furthermore, we could not conclude that the hiring initiative alone will result in eliminating VBA’s backlog because a number of other factors contribute to the backlog, and, according to VBA officials, some of these factors are outside of their control. VBA Has Effective Hiring Processes. VBA has implemented effective processes to ensure it hires a large number of employees in a relatively short period. Although VBA had not yet met its hiring goal as of May 2008, it increased its claims processing workforce by approximately 30 percent in 19 months, and it was on track to meet its hiring goal by September 30, 2008. We reviewed the hiring processes at three VA regional offices (VAROs) and determined that the average of 28 days from the closing of a job announcement to making a job offer was timely. We also found that new employees have adequate office space and IT support and that the attrition rate of new employees is not a significant factor in VBA achieving its FY 2008 hiring goal. VBA Implemented an Effective Process To Ensure Training, but Reviewing New Employees’ Work is a Challenge. VBA has implemented an effective process for ensuring new employees receive timely training. However, VBA officials reported that maintaining productivity while also ensuring reviews of the work completed by new employees has been a challenge. Until new employees become proficient at their assigned tasks, VBA requires senior claims processors to review 100 percent of their work. These 100 percent reviews leave less time for senior employees to process claims. The senior claims processors at the VAROs we visited told us that with the rapid influx of new employees, they now review the work of up to eight new claim processors. Prior to the hiring initiative, senior claim processors typically oversaw the work of less than three claim processors. VARO supervisors are reporting delays in processing claims, but productivity should increase as new employees increase their proficiency and VBA promotes and trains more senior claims processors. Integrating New Employees into VBA’s Workforce Can Help To Reduce the Claims Inventory. VBA has made good progress at integrating new employees into the claims processing workforce. In the short term, the large influx of new employees has resulted in a decrease in VBA’s overall productivity from an average of 176.8 claims processed per FTE in FY 2006 to a projection of 155.8 claims processed per FTE in FY 2008. This dip in productivity has also resulted in a moderate increase in VBA’s claims inventory since FY 2006, yet VBA officials are confident that by the end of FY 2009, as the new employees are trained, productivity will increase. Our analyses also support this—by the end of FY 2009, VBA should be able to process 9–16 percent more claims than in FY 2007, and begin to see a downward trend in the claims inventory. Furthermore, our analyses show that by the end of FY 2011, VBA could complete about 27 percent more claims than in FY 2007 and theoretically eliminate the inventory, including its backlog of older claims. However, we expect that VBA will always have an inventory because it cannot control the number of claims it receives or when they are received, and other factors can delay claims processing, such as delays in obtaining evidence from third parties. Also, our analyses assume that the number of claims received would not increase greatly due to court cases, legislative changes, or increased military engagement and would grow at an annual rate of 2 percent. VBA Needs to Redefine Rating Claims Backlog. We disagree with how VBA currently defines backlog of rating claims and think that VBA needs to define its rating claims backlog in a more meaningful, understandable way. (For this discussion, we did not assess non-rating claims backlog because this was addressed previously in the OIG’s Audit of Veterans Benefits Administration Non-Rating Claims Processing, Report Number 06-03537-69, dated February 7, 2008.) VBA defines rating claims backlog as its “actual inventory” minus its “normal running inventory.” VBA defines “actual inventory” as the number of rating claims awaiting decisions at any point in time and “normal running inventory” as the number of rating claims VBA expects to have if it is meeting its processing performance target. Because this approach is based on averages, it does not portray the full extent of the rating claims backlog. For example, on May 3, 2008, the actual number of claims in VBA’s inventory was 396,897 (that is, “actual inventory”). However, if VBA was meeting its FY 2008 performance target of 169 days to complete a claim, its inventory would have been 395,832 claims (that is, “normal running inventory”). Because VBA was not meeting its performance target, it calculated a backlog of 1,065 claims (actual inventory of 396,897 claims – normal running inventory of 395,832 claims). By comparison, our “aging methodology” shows VBA’s backlog to be 110,992. Our methodology defines backlog as all claims that exceed a target time period. To illustrate, if we use VBA’s FY 2008 performance target of 169 average days to complete a claim, the rating claims backlog as of May 3, 2008, would be 110,922 (the number of claims older than 169 days). However, because VBA’s 169-day performance target is based on the average length of time it actually takes to process claims, we could not conclude that this was an appropriate performance measure for backlog. Therefore, in redefining how it measures backlog, VBA needs to establish a target time period that is derived from an analytical assessment of how long it should take to process claims. Recommendations 1. We recommended that the Acting Under Secretary for Benefits adopt a new definition for measuring rating claims backlog as the number of claims that are older than a realistic target time period. 2. We recommended that the Acting Under Secretary for Benefits implement a plan to monitor and report backlog based on a new definition as described in Recommendation 1. ------------------------- -------------------------
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