For all the noble intentions that support the veterans benefits system, disability benefits are monetary, and money creates incentives. Accordingly, it would be naïve to look at the system without understanding these incentives. There are two aspects in particular to highlight: the incentives for attorneys and the incentives for veterans.
The first aspect is the incentives for attorneys. I have recently argued that the financial incentives for attorneys are problematic because they foster procedural bloat rather than encouraging attorneys to obtain the evidence necessary to resolve claims. The essential concern is that, for historical reasons, attorneys rarely become involved with claims until an appeal reaches the U.S. Court of Appeals for Veterans Claims (CAVC). At that point, the record is closed and the attorney can seek reversal only if the necessary record is in the record to support reversal. However, it almost never is. Veterans rarely have attorney assistance at the agency level, and, by the time a claim reaches the CAVC, repetitive reviews at the agency have filtered out most meritorious claims, and the court reviews agency fact finding deferentially. Therefore, it is simply improbable that a case will arrive at the CAVC when a denial was clearly erroneous based upon the available evidence.
As a result, attorneys have no choice except to argue that there was a procedural error that requires a remand. This leads to what I call “procedure whack-a-mole.” Once the courts accept an argument that a VA procedure is deficient, attorneys obtain hundreds or thousands of additional remands in cases with similar fact patterns in the pipeline until that procedure is fixed. However, by the time VA finds an acceptable fix, even more procedural “moles” have sprung up. The problem compounds itself because the increasing number of procedures leads to more interactions between rules and more complexity, which make it harder to develop and execute procedures, particularly when most of the adjudication staff at VA is composed of non-attorneys.
The net effect is easy to see. Going back to my analysis of the FY2008 data:
Prior to the VJRA, VA took an average of 106 days to adjudicate a claim for benefits. As of the fiscal year 2008, that time had risen to 183 days. Although that change is substantial, it is dwarfed by the increase in appellate processing time within the agency. Between the fiscal years 1991 and 2008, the average time to process an appeal has more than doubled from 462 days to almost three years. [I]t is increasingly likely that an agency appeal will lead to a remand and even more delay before a final decision is reached.
To be clear, the attorneys who advocate all the procedural arguments at the courts are fine people who have the best interest of veterans at heart. I know many of them and they all want the system to work better. (The great thing about veterans law is that nobody either inside or outside of VA enters veterans law because they do not like veterans and want to make them suffer. They all just have different perspectives on the problem they are trying to solve.) It is simply unfortunate that the financial model of judicial review (which I will discuss more in a future post) drives them toward time-consuming procedural arguments that perpetuate claims, rather than helping veterans obtain the evidence needed to bring resolution.
The second aspect affecting system is the financial incentives on veterans. Here I will refer you to Michael Waterstone, Returning Veterans and Disability Law, 85 Notre Dame L. Rev. 1081 (2010). The essential problem is that the system rates veterans on a scale from 0 to 100% disabled and, therefore, the only way to receive more money is to show that your medical conditions have gotten worse. Paying veterans to grow worse creates an incentive at odds with the ideal of rehabilitating disabled veterans and encouraging them to lead high-functioning lives. Of course, the veterans benefits system is not the only one that struggles to find a coherent way to support the disabled without creating unnecessary dependency. If you have not already heard it, I would recommend that you check out the recent episode of This American Life, entitled “Trends with Benefits.” The New York Times has also explained how the Social Security disability system makes it very difficult to get back into the workforce once a person starts accepting benefits. Accordingly, the problem is not unique, but it is still important. What can we do to structure benefits to not just provide for the minimum needs of veterans, but to help them thrive regardless of any service-related impairments that they may have acquired?
In the last decade, Great Britain has moved to a system that emphasizes lump sum payments with no ongoing need to demonstrate a continuing disability. This workers-compensation-style system has its advocates here as well, but for the moment, there does not appear to be any support among the veterans service organizations for this kind of radical reform. However, there is a tremendous opportunity if someone can design a system that makes the incentives for rehabilitation clearly outweigh the incentives to grow worse. There are a number of great articles waiting to be written here, and I certainly encourage new thinking in this area.