Colorado LSC initial cost estimate of $4.5 million for HCR 23-1002 (TDIU) was inaccurate

The Colorado LSC initial cost estimate of $4.5 million for TDIU was inaccurate
(see revised budget impact from LSC correction below, based on this analysis)

The Cost for Total Disability for Individual Unemployability (TDIU) Property Tax Exemption

Background:

1. TDIU is regulatory, not statutory. The key section of the regulation reads:

“Total disability ratings for compensation may be assigned, where the schedular rating is less than total, when the disabled person is, in the judgment of the rating agency, unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities. Provided that, if there is only one such disability, this disability shall be ratable at 60% or more, and that, if there are two or more disabilities, there shall be at least one disability ratable at 40% or more, and sufficient additional disability to bring the combined rating to 70% or more.” (38 CFR § 4.16a.)

2. TDIU benefits granted under the VA Rating Schedule are intended to compensate veterans for the average impairment in earning capacity that results from service-connected disease or injury. TDIU is a special additional benefit to address the truly unique disability picture of a veteran who is unemployable solely from service-connected disability, but for whom the application of the Rating Schedule does not fully reflect the veteran’s level of impairment. TDIU allows the veteran to receive compensation at a rate equivalent to that of a 100% schedular award.

3. VA pays basic compensation benefits to veterans incurring disabilities from injuries or diseases that were incurred or aggravated while on active military duty. VA rates the severity of all service-connected disabilities by using its Schedule for Rating Disabilities. The schedule lists a multitude of disabilities and assigns each disability a percentage rating, which is intended to represent an average earning impairment the veteran would experience in civilian occupations because of the disability. Veterans awarded service-connected disabilities are assigned single or combined (in case of multiple disabilities) ratings ranging from 0 to 100%, in increments of 10%, based on the rating schedule; this is known as a schedular rating. Diseases and injuries incurred or aggravated while on active duty are called service-connected disabilities. To avoid an unfair “one size fits all” disability evaluation, disability compensation can be increased to the full 100% level if VA determines that the veteran is factually unemployable (not able to engage in substantially gainful employment) based only on the service-connected disability exceeding in severity anticipated in the rating schedules. VA can assign a total disability rating of 100% to veterans who cannot perform substantial gainful employment because of service-connected disabilities, even though their schedular rating is significant but less than 100%...but is in fact totally disabling.

The cost estimate of $4.5 million if approved by the public is inaccurate. Several facts need to be considered that should reduce this significantly:

1. Most importantly, the GAO reports that 54% of TDIU veterans are age 65 or older, and thus already eligible for the senior property tax exemption if in their home ten years or more. Those TDIU veterans present no additional burden for the property tax exemption program. An unknown number of TDIU veterans under age 65 have partners over age 65 and thus otherwise eligible for the exemption.

2. 2847 Colorado TDIU veterans who are permanently and totally disabled from line-of-duty injuries are barred from the exemption. Colorado has 13589 VA 100% permanently and totally disabled veterans, 76% of whom are homeowners No VA data seems available to determine how many of these are “P&T (permanent and total)” to qualify for the current property tax exemption. VA reports the ratio of TDIU/100% veterans is about 45/100, and 46% of TDIU veterans are age 65 or younger. Thus, Colorado is ignoring the needs of 20% of our totally disabled homeowning vets under age 65. The exemption for TDIU veterans would be under $2 million annually.

3. Colorado seems unique among the states in distinguishing between VA 100% schedular and TDIU. Military.com rates Colorado, prizing ourself as “Veteran Friendly,” only as a mediocre 27th among the states offering veterans’ benefits.

4. 60%+ of TDIU veterans are in the World War II-Vietnam era. The age group 50-65 represents 28% of all TDIU recipients. Their participation in a property tax exemption program is just for a few years before aging into the senior exemption...they “age out” of any potential TDIU burden on the state.

According to the National Center for Veterans Analysis and Statistics, the total veteran

population is set to decline from 20.8 million in 2015 to 12.0 million by 2045; total annual change is -1.8

5. 27.2% of Colorado’s veteran households have an “extraordinarily high” burden of total income for housing. 6.9% of veterans live below the poverty line, although totally disabled veterans’ disability benefits are above that level unless family size is considered.

6. 35% of TDIU beneficiaries have mental health conditions as their major diagnosis (of which more than two-thirds are posttraumatic stress disorder [PTSD] diagnoses), followed by musculoskeletal conditions (29%), and cardiovascular conditions (13%.)

7. Of all Colorado veterans receiving disability compensation, 6% are rated as 100% permanently and totally disabled. 4.5% of Colorado’s total veteran population have a disability rating of TDIU.

8. It is absolutely incorrect to refer to this category of veterans as “individually

unemployed.” Rather, they are totally disabled veterans who, solely because of their military injuries or illnesses, have been carefully assessed by VA physicians, claims officials and vocational specialists as being totally and permanently disabled, unable to work above any marginal employment. The term “total disability for individual unemployability” should be used throughout, rather than “unemployed!” TDIU veterans aren’t unemployed; they have left active duty service physically unable to work, whereas VA-rated 100% disabled veterans are often able to continue useful employment, trained for other opportunities, other careers, and are encouraged to find work for obvious financial and mental health reasons. “Extraneous” factors, such as nonservice-connected disabilities, injuries occurring after military service, availability of work, or voluntary withdrawal from the market are not considered as factors for TDIU ratings.

Where the rating schedule is found to be inadequate to fairly compensate a veteran for the inability to be gainfully employed, Veteran Benefit Administration (the administrative portion of VA) may refer cases consideration of a TDIU rating on an “extrascheduler” basis

9. The US Department of Veterans Affairs has two categories of veterans assessed to be totally and permanently disabled due to their injuries or illnesses. There are no differences in their federal benefits or compensation.

a. VA “100% permanent and total schedular.” is a rating schedule which assigns a degree of total disability using a formula set by law ( 38 CFR 3.340, 38 CFR 3.341(a), and 38 CFR 4.16) for a full range of illnesses and/or injuries suffered by veterans while on active duty (or, for Reserve Components, while on active training status for when called to federal service.)

b. The second is TDIU, a unique program created in 1933 to “fill the gap” in situations where a veteran’s line-of-duty illnesses or injuries are far more serious and exceed the schedular provisions, or when the combination of the veteran’s active duty illness or injuries are at least 70% but when considered with with other, lesser military injuries or illness have made the veteran totally disabled. This involves separate medical and administrative assessments: one evaluating military-related disabilities and a second to consider whether those military disabilities alone make employment impossible. This leaves the TDIU veteran at a fixed disability compensation at the 100% level, never able to continue productive employment.

TDIU criteria for unemployability are quite similar to those used by the Social Security Administration to determine total disability, except TDIU is far more restrictive, being based solely on military line-of-duty injuries or illnesses. SSDI considers the broader picture, including all military and civilian issues to determine total disability. A veteran can be SSDI-eligible for overall disability yet unqualified for TDIU unless military disabilities make anything above-marginal employment impossible. Note that many veterans having between 10%-90% VA disability (neither 100% nor TDIU) but are qualified to receive SSDI. Between SSDI, VA 100% disability and TDIU, TDIU is the most serious and restrictive disability scheme.

Like SSDI, a TDIU veteran is monitored for their continuing total disability. Earned income, whether employed or self-employed, other than sheltered workshop or below-poverty level income is disqualifying. Such a situation would result in termination of federal TDIU and any related state benefits. This limit applies only to the veteran's earnings, and not to the veteran's unearned income or household income. Managing TDIU benefits involves not only assessing initial eligibility for benefits, but also ensuring beneficiaries’ ongoing eligibility by identifying those who are not in compliance with the earnings limit.

VA rating specialists initiate TDIU evaluations when a veteran or their VA physician submits an application for TDIU benefits or his or her application for compensation benefits contains clear evidence of unemployability. In all cases, before granting benefits, rating specialists must evaluate the impact that the veteran’s service-connected disability(ies) have on his or her ability to perform gainful employment, which for decision-making purposes is generally interpreted as employment that is more than “marginal employment.”

Marginal employment for a TDIU veteran may also be held to exist, on a case-by-case basis, for a veteran maintaining employment at a sheltered workshop or family business with annual earnings at or below the poverty threshold.

VA rating specialists are to rely on various sources of information for the evidence needed to support such a determination, including an employment and earnings history furnished by the claimant, basic employment information from the claimant’s employers (if any), and a medical exam report from Veterans Health Administration (the medical side of VA.) If the claimant had received vocational rehabilitation assistance from VA or disability benefits from SSA, the rating specialist might also seek information on these services or benefit decisions. Many veterans seeking TDIU benefits seek a vocational evaluation, offered by many states’ employment agencies to assess any remaining employability.

Quality of life reduction, a serious issue and often a factor in other disability compensation programs, is not assessed in VA issues. About 30% of totally disabled veterans receive assistance from family members with activities of daily life impairments, thus greatly reducing household income.

Wes Carter, Chair

The C-123 Veterans Association

Acting VA Secretary Seeks $18 Billion Extra to Solve Problems

Veterans Affairs Department officials want nearly $18 billion more in funding over the next three years to hire more clinicians, lease more space and cut down on wait times for medical appointments.

The money is also partly designed to serve as a down payment on rebuilding VA's reputation, proving to the public that with enough resources, the department can once again be a reliable asset for veterans seeking care.

In his first testimony on Capitol Hill, acting VA Secretary Sloan Gibson acknowledged to the Senate Veterans' Affairs Committee that VA today "has serious problems" that will take years to correct.

"We understand the problems we face. We own them. We are taking decisive action to begin to resolve them," Gibson said. "We can turn these challenges into the greatest opportunity for improvement in the history of the department."

Those challenges include nearly nonstop scandals over the past four months, including recent revelations about whistleblower retaliation and data manipulation in dozens of facilities.

But the overarching issue that forced the resignation of Gibson's predecessor — retired Army Gen. Eric Shinseki, who stepped down in May — was system wait time problems, covered up by administrators trying to protect performance bonuses.

As of July 3, more than 636,000 veterans — about 10 percent of VA's total appointment caseload — faced a wait of a month or more for medical appointments,

To fix that, Gibson wants to hire 10,000 clinicians in coming years and find more space for medical appointments through leases, VA facility improvements and new construction — moves that he said would provide not only a short-term fix but also a longer-term solution to the underlying resource issues.

"I know it sounds like huge numbers," he told lawmakers. "But [VA] historically has not managed to veterans' requirements, we've managed to budget numbers."

Congress is already considering an emergency VA reform bill that would boost funding by about $30 billion over the next three years, according to Congressional Budget Office estimates. But that measure would allot only $500 million to new hiring initiatives; the rest would be used to increase access to private care options for veterans having trouble accessing VA care.

The department already has seen dramatic jumps in funding over the last decade, adding about $100 billion to its base budget since fiscal 2004 and about $70 billion since fiscal 2008.

The additional funding request drew concerns from several senators, who questioned whether better management and use of existing resources would provide more results for veterans.

But Gibson insisted that addressing the fundamental problems behind the wait times will require more resources, and failing to back those plans "will mean that the wait times will get longer."

He also outlined a number of recent audits and policy updates to address the other scandals, and repeated his promise that VA whistleblowers will be protected — and those who retaliate against them will face punishment.

VA Budget Skyrockets Despite Federal Spending Cuts

Sep 09, 2013

Dayton Daily News

DAYTON -- The Department of Veterans Affairs spends more today in inflation adjusted dollars than it did after World War II and the Vietnam War, when millions of troops returned from the battlefield, according to federal budget figures.

By the next fiscal year, the VA budget is projected to rise 58 percent since 2009 to $152.7 billion, more than double the $70.9 billion spent in 2005, agency figures show.

At the Dayton VA, spending has risen to a projected $285.3 million this year compared to $131.2 million in 2001.

Two factors more than any others have driven health care costs higher at the Dayton VA Medical Center, officials said. Aging Vietnam veterans who have more health needs as they grow older, and the return home of thousands of veterans from the battlegrounds of Iraq and Afghanistan.

"It's the number of veterans returning from the war, but it's also the conditions they are returning with," said Dr. William J. Germann, Dayton VA chief of primary care service and a retired Air Force brigadier general. "There are a number of veterans coming back dysfunctional and as a result may not be able to hold a job."

Straining under the national debt, budget cutters have slashed billions in federal spending and ordered unpaid furloughs of hundreds of thousands of Department of Defense civilian employees, but the VA's spending has more than doubled in little more than a decade and keeps climbing.

"It's a tricky issue because you want to make sure we are keeping our compact with men and women who have served and been in harm's way ... but you also recognize we're not doing those men and women a service if we're not spending that money wisely," said Stephen C. Ellis, vice president of the non-partisan Taxpayers for Common Sense in Washington, D.C., and a former Coast Guard officer.

'Overwhelmed' with new claims

The more than 3 million veterans since the first Gulf War in 1991 who have entered the VA ranks have overwhelmed the system, said Dr. Chrisanne Gordon, a Marysville rehabilitative physician.

"I do feel the system is overwhelmed," Gordon said. "I would say overwhelmed and slow to respond."

She's worked with the Dayton VA to link Iraq and Afghanistan veterans to civilian medical centers. The mostly teaching hospitals have advanced technology to detect traumatic brain injury a normal MRI does not locate, she said.

"I really believe there needs to be collaborative effort between VA and the civilian medical community," she said. "My belief is in the civilian world we are more accountable and we react quicker."

The number of veterans and visits have climbed dramatically at the Dayton VA and community clinics in Springfield, Middletown, Lima and Richmond, Ind.

Both figures show why costs have jumped.

Five years ago, the VA treated 32,858 veterans who accounted for 360,946 visits at a cost of $588 per visit. Under Dayton VA projections, those numbers will rise to 36,691 veterans making 470,151 visits at a cost of $607 per visit.

"This has never happened before so the workload has increased exponentially," said Margaret I. Kruckemeyer, a retired Dayton VA nurse practitioner and former president of the Nurses Organization of the VA, a national advocacy group. "You are going to have issues and all of our people who have served their country especially in war zone, come back with scars. ... You never have a veteran with a pure problem. They have a multitude of problems, and that's costly."

Kruckemeyer said the nation has an obligation to meet the health care needs of veterans who risked their lives in combat.

"If we spend trillions of dollars to send our men and women who volunteer to do whatever Congress tells them to do on behalf of freedom, then they come back wounded and you can't see some of the scars, it just seems like there's a disparity," the former Army nurse said.

Her husband, William C. Kruckemeyer, was a helicopter pilot in Vietnam. Today, the Beavercreek couple said, he lives with the legacy of exposure to the herbicide Agent Orange, which was sprayed by U.S. troops throughout Vietnam.

His health has worsened because of auto-immune related conditions that have affected four major organs. Kruckemeyer, who uses a wheelchair, has had extensive treatments at the VA.

"I was fortunate enough to have my wife as my advocate so I could get in and move around" the VA health system, he said. " ... I could see where a fellow or a gal who has come back and has not had the benefit of somebody that knows the ropes and where to go and how to get there, that can be a real problem."

Christopher P. Wilson, of Bellbrook, is one of the new veterans who has come to the Dayton VA from the battlefield. The 27-year-old served as an Air Force machine gunner on a Humvee at Camp Bucca in Iraq where he lived through mortar and IED attacks.

Since the military police officer left the Air Force last November, he said he's sought treatment at the Dayton VA for PTSD, anxiety and depression. Before he left the Air Force, he was diagnosed with post-traumatic stress. But he had to wait a year for the VA to reach the same conclusion, he said.

"I went to the VA and the doctor basically told me without a diagnosis from them the military diagnosis means nothing," he said. Today, he receives counseling, but expressed frustration over the four months he said it took to schedule a medical appointment to change a prescription.

Like many other veterans, he's also waited months on a VA disability claim filed with the Veterans Benefits Administration regional office in Cleveland. The married father of two young children is enrolled in business college courses and looks for work.

"It puts a lot of stress on the family going just from being in the military and getting out to being on deployment to trying to find work," he said. "It would be nice to have the extra money. My wife is having to work now and I'm trying to find a job and juggle day care."

The homefront cost of war

Despite the rising costs for the VA, U.S. Sen. Sherrod Brown, D-Ohio, said spending on veterans' needs has bipartisan support in Congress.

More veterans today have arrived home with injuries that soldiers died from in past wars, they're receiving more costly and sophisticated care and the rise in veterans' claims for exposure to Agent Orange have pushed costs upward. But the expense is justified as long as the Veterans Benefits Administration makes progress to reduce a claims backlog, he said.

"I think (the cost) can be sustained because I think it needs to be," he said. "... We can't be penny wise pound foolish on this."

While much of the federal government hasn't escaped budget cuts, U.S. Sen. Rob Portman, R-Ohio, said the decision to exempt the VA from the budget sequester was "the right one."

"We need to have every VA employee on deck to serve our veterans," he said in a email in response.

Still, he said, while the priority on veterans' spending was justified, "some of this funding could be spent more efficiently. We need to focus on that as we work to solve the VA's challenges and that effort will only become more critical as the VA's budget continues to feel the pressure of our unsustainable debt and deficit."

U.S. Rep. Mike Turner, R-Dayton, voted against the sequester and also opposes imposing it on the VA. "Exempting the VA from the effects of sequestration is necessary to ensure veterans and their families continue to receive the services, care, and the assistance that they have earned and deserve," he said.

The Dayton VA has hired new staff, bought medical equipment, and expanded programs to treat returning veterans for post-traumatic stress disorder, traumatic brain injury and expand mental health care services, among other priorities. It opened a women's health care center to treat the fastest growing segment of veterans, according to Dayton VA Medical Director Glenn A. Costie.

The Dayton VA plans to open a new multi-million dollar magnetic resonance imaging (MRI) machine to meet demand. They've also focused on housing homeless veterans, another VA priority.

Rising costs peak

In 1947, two years after the end of World War II, the VA spent a post-war high of $87 billion, according to a Congressional Research Service report released last year. VA spending reached a post-Vietnam peak of $76.9 billion in 1976, the research service said. Both budgets were adjusted for inflation and compared to 2011 dollars.

This fiscal year, the VA will spend $138.5 billion. That number includes $66.4 billion in entitlements, such as disability pensions, and housing vouchers, and an expected $61 billion in discretionary spending on health care, among other areas.

"Spending on veterans' benefits and services has certainly grown at a much faster rate than other areas of the budget," Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments in Washington, D.C., said in an email. Congress sets veteran benefits based on formulas that don't require annual appropriations. "These benefits are an entitlement for the people who qualify, and the spending is essentially on autopilot. To change the level of spending, Congress would have to change the criteria for determining who qualifies and what benefits they will receive."

VA spending will keep rising, he predicted. "I don't think it is likely Congress will make substantial reforms in this area of the budget due to the political consequences involved," Harrison wrote. "No one wants to be seen turning their backs on veterans, especially as the military is winding down two protracted wars."

Kimberly Frisco, a Dayton VA spokeswoman, said the VA has a two-year budget, and the agency can't predict what might happen to spending after 2014.

VA accountability on spending

Even so, Congressional critics have demanded more accountability from the VA with the surge of cash.

The VA nationwide has been subjected to congressional criticism for lavish spending on conferences, bonuses given to some VA senior executives a congressional critic contended weren't linked to performance, and a persistent claims backlog that has bedeviled the Veterans Benefits Administration.

"VA doesn't have a money problem," said U.S. Rep. Jeff Miller, chairman of the House Veterans Affairs Committee, said in a statement to this newspaper. "It has a management problem. Whether it's funding, staffing, or information technology tools, Congress has given the VA everything it has asked for to overcome perennial challenges such as its mountain of backlogged disability benefits compensation claims. ... For its part, VA has failed to deliver the backlog results department officials have been promising for years."

Despite record VA spending on medical and mental health care, the agency has struggled to "curb the epidemic of veterans suicides and to stop the emerging pattern of preventable deaths and serious patient safety issues at VA medical centers around the country," Miller said.

"But perhaps there is no better illustration of VA's management failures than the department's ongoing executive bonus scandal which calls into question whether VA leaders even know the meaning of the word accountability," Miller said.

Miller's website pointed to a Dayton VA case involving unsanitary practices at the dental clinic, among other cases across the nation: Former Dayton VA Medical Center Director Guy B. Richardson collected an $11,874 bonus in 2010 while the center's dental clinic was under investigation for unsanitary practices by a former dentist over 18 years, the Dayton Daily News has reported.

Costie, who took over the position when Richardson departed to another VA job, said his bonus was tied to "clear metrics" and approved through "a chain of command" of higher-ranking managers who evaluated his performance. Costie was paid a total of $186,829, including a $10,380 bonus, through late August, according to data released under a Freedom of Information Act request.

The claims backlog has brought focused criticism from Congress, even as the agency has reported progress to reduce the problem.

VA spokeswoman Nicole Alberico noted the agency completed a "record-breaking" 1 million claims in each of the past three years, but the number received continues to exceed what's processed. The VA has a goal reduce the number of claims beyond 125 days to zero by 2015 with a 98 percent accuracy rate.

House Speaker John Boehner, R-West Chester Twp., said "more transparency and more accountability" is needed on the issue.

"While I applaud the renewed efforts to address disability claims in Ohio that have been pending more than two years, I have serious concerns that they will be just another Band-Aid covering the larger problem: the system, is broken and needs to be fixed," Boehner said.

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Department of Veteran Affairs Sequestration and the Military

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