Excerpts from Interview with Beth McCoy

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Excerpts from Interview with Beth McCoy

Beth McCoy, the assistant deputy undersecretary for field operations for the Veterans Benefits Administration, granted News21 reporter Mary Shinn a 30-minute telephone interview to answer questions about the findings of the New21 investigation. These are excerpts from that interview:

Beth McCoy: Hi, good afternoon, my name is Beth McCoy, I’m the assistant deputy undersecretary for field operations for Veterans Benefits Administration. Are we OK with sound? So thanks for giving me a few minutes here to kind of give you a background overview of where we’re headed today and what we have been working on the last few years. Overarching, it’s our VBA transformation plan, which really has three major components; it’s all sorts of change and transformation in the areas of people, process and technology. So as far as people, it’s the way that we train our folks, the way that we do quality reviews, the way that we organize them and the workflow within the regional offices. We have done a lot of retooling in that arena in the last couple of years.

As far as processes, we are streamlining from a lean six-sigma aspect of things we can do more efficiently and more effectively. Some of the, some of the notification letters we have simplified, so they are more understandable to our veterans and their families and their survivors. We’ve developed, another example, we’ve developed disability benefit questionnaires or what we call DBQs, and these are standardized formats that we use as far as collecting essential medical information that’s necessary to support decision making for rating decisions so these are what our VHA counterparts use to capture the data when they have an examination for a veteran and it’s very transparent. We have put these out on the website so that private physicians can use them as well to capture the same essential medical information that we need that our VHA examiners have historically provided. We have 81 of those DBQs, 71 of them are available to physicians in the private sector if they choose to complete them.

The other part, kind of the cornerstone, is our technology improvement, we’ve had improvements and real advances in technology as far as our customer service and our telephone call centers. We have also had advancements with our electronic claims processing environment that is supported through the Veterans Benefits Management System or VBMS.

So just as a backdrop to our conversation today, I wanted to point out that we have had a lot of change in just about every aspect in how we process claims in VBA and our employees have been on the airplane with us as we have been changing out parts. They have continued to be focused and committed to the mission and again we are on pace this year to complete a million claims for the fourth year in a row, so even though we have had just a lot of change and some change management that has gone along with that, it’s all with the idea of making us better. … We know veterans have had to wait too long and this is part of our process to get to the goal set by Secretary (Eric) Shinseki that no claim will be pending more than 125 days and that we’ll complete decisions with 98 percent accuracy in 2015. We’re on that path, we’re solidly in the middle of that path and we’re moving forward.

News21 Reporter Mary Shinn: Thank you for giving us that background information. Our main question sort of centers around how pushing so many claims so quickly might lead to more mistakes and less accuracy. Can you talk a little bit about any ways that you guys are working to ensure that that doesn’t happen?

McCoy: Sure, I would be happy to talk about that. There are a couple of different things that I would highlight that we’re using to ensure that we’re making high quality decisions, in addition to the high quantity of decisions. So one of the things that we’ve done in the last about 18 months, is we have deployed 600 quality review team members, who are helping our employees by taking a look at the decisions that they are making and the interim actions in the case.

They are taking a look at it in process, they are doing in-process reviews whereas historically we would wait until the case was all the way completed and we would do a quality assessment at the end. So, that was not the best model to give immediate feedback to employees, so that they could know what errors they were making or where they could improve and now they are able to get that feedback earlier in the process and more often in the process so that they can learn from that. We’ve also enhanced challenge training for our brand new employees. Essentially, we’ve gone from three- or four-week course model to an eight-week course model and we’ve built in a lot of hands-on claims folder claims processing into that model so that they can have a good solid foundation when they leave the challenge-training course. We’ve found they are producing about 150 percent of what their counterparts were under the old training system and the quality is higher as well. So those are the couple of things that we are doing as far as making sure we are maintaining a quality product.

I’ll just share some statistics to put it into perspective for you. In FY 12 our national rating accuracy was at about 83 percent, currently we’re just about 0.1 percent under 90 percent. So we’re at 89.9 claim level quality for all of VBA, so that’s been about a 6 percent increase in quality in a pretty short period of time.

Now, I wanted to point out when I say claim level quality if you have 10 or 20 issues in a case and you make an error on one those issues we were, we have historically called the whole case wrong. When our Undersecretary for Benefits Gen. Hickey came in she said that’s not really an accurate reflection of the amount of work employees are doing and the quality of work that employees are doing and the quality of decisions that veterans are receiving, so she challenged us in addition to tracking things on that claim level to also drill down and track it on the issue by issue level. So some of the most recent statistics I have so far on an issue basis, on an issue-by-issue quality accuracy view, through the end of June this year our quality was at 95.59 percent for issue based and just over the last three months it’s been at 96.41 percent. Again another view of that claim level our tougher standard for ourselves, just over the last three months, is already over 90 percent. So we’re definitely seeing in the data, in the numbers, that we are continuing our improvements in accuracy as well as making sure that we’re producing a high number of quality decisions for our veterans.

Shinn: So we wanted to ask you a little bit about the work credit system. You know you had a system in place up until Dec. 2012 that did not reward people for completing supplemental development, those follow-up phone calls, those follow-up letters. Can you talk about how that may have contributed to complex claims staying in the backlog?

McCoy: OK, we have changed our performance standards a number of times over the past few years. We had modification in 2010 and 2012. We’re at the table right now with our labor partners right now negotiating updated standards and we’re going to be doing that at a more frequent tempo because the amount of change that we have going on in the system is contributing to a change in the environment, so just about the time we finish coming up with a new set of standards we’re turning around and going right back to the table because the automation, the additional support we get from things like rating calculators, which are now built into the system which also contribute to quality and consistency of decisions. There’s a lot of change with the automation and the processing the way that we’re laid out in the regional offices, so things are changing very quickly and we’re struggling a bit to keep up with the pace of change as we update our performance standards.

For a time period we had a model where we were looking to build in encouragement to move it from one place to another down the lifecycle of the claim. So we were really focused on getting that claim initiated, initiating the development, sending that notification letter out to (veteran), and then getting it moved to the ready for decision phase.

So even though there was a time period, where we were not probably rewarding every single task that was being generated at each interval, overall we were recognizing the level of effort, the amount of work it took to get the cases moving downstream in the claims process. So I would respectfully disagree with you that that was the root of some of the reasons for our backlog, really it was the volume of work that was coming in, the number of cases coming in a difficult economy … I would say the rating receipts have continued to climb and again four years in a row, knock on wood, we are solidly on pace to do more than a million claims per year. So the fact that somebody is saying that we weren’t getting cases done, I don’t think that that bears out in the numbers.

Shinn: We also had some questions for you about bonuses on the regional office level. We saw that as the backlog was getting higher in 2011, there was an increased number of claims processors receiving bonuses at regional offices and it really didn’t seem like there was a real solid system in place for that at the regional office level. Could you tell us what systems are in place to manage that, those bonuses?

McCoy: Well, I would say that, in VBA, it’s the leadership’s responsibility to make sure that employees have all the right tools and training that they need. That’s why we have, we have started looking at that from our standpoint: What better training can we give to employees, what better feedback can we give them, through the quality review teams, what better tools can we give them in the way the work is segmented and divided into lanes, the way the work flows to them, the automations that’s built in, the calculators, the disability benefit questionnaires. These are all things that we have said our employees deserve the best tools that we can give them so that they have all the skill sets and all the resources to make the right decision, so we have spent a lot of time focused on that.

The fact that we have had a lot of work coming in, the fact that there were factors beyond folks’ control, that’s not on the employee, the employees have worked hard, as I mentioned their quality is increasing. This is the fourth year in a row that we going to produce more than a million claims. It’s very personal to our employees, more than half of our VBA employees are veterans themselves, they have direct family members who are veterans. Gen. Hickey goes out to town hall meetings and holds town hall meetings with employees. I’ve been there when she does it, raise your hand, how many are veterans, more than half the room raises their hands, how many have a direct family member a spouse, a brother or sister, a mother, father, and almost everybody else and then other extended family and it’s not long before everybody in the room is raising their hand. Even those who have not worn the uniform and have served in the military, they are serving veterans in this capacity working for VBA.

So to say, to say that bonuses aren’t warranted I think is a blanket statement, we have performance standards that we talked about a few minutes ago and there are many, many employees who are exceeding their minimum standards and they deserve to be recognized for that. If we, if employees accomplish just what was the minimum of their standard, we would, we would be in a bad way in VBA because we would never complete the amount of work that we’re doing right now. On top of that, we have our claims processors, since May, working mandatory overtime. It’s not something that we take too lightly because we know it has an impact on the health of the workforce and folks’ personal time but we have had that commitment from our employees and that’s another way that we’re making sure we do the right thing for veterans.

Shinn: Could you talk to us about, the VA did not include the appeals inventory in their plan to take down the backlog and I was hoping you could talk about if there was a plan to address the inventory of the appeals? And if you could provide us any updated numbers for the pending appeals. I know that it’s around a quarter of million on the Monday Morning Workload reports, but it’s been that way since May, so if you have any update on the numbers, and then if you were going to address the appeals inventory.

McCoy: OK. We’ll have to follow up with you to make sure we have the most recent stuff for you.

As far as the backlog, the definition of the backlog is we have our whole inventory of pending claims, Gen. Hickey and Secretary Shinseki are leading us in our effort to reduce the backlog and the backlog being defined as rating claims pending more than 125 days so in our transformation efforts and our goals that we’ve set for ourselves the backlog that we’re attacking, that we’re working on and focusing on, is rating claims, so these are claims for veterans that are waiting for a first decision. And as far as the appeals work, we have not directed our appeals resources, our appeals employees, away from appeals. During this time period they are still working appeals. There is always that temptation to say: “Oh, let’s put horsepower on getting rating claims done.” We recognize that appeals are an important part of the process as well, we’re moving some of the work from the regional offices to the appeals management center in Washington, D.C., we’re working with the Board of Veterans’ Appeals, we had some work groups that we’re working on streamlining finding some efficiencies in the way we do appeals so we have some on-going efforts there.

As far as appeals process itself, I would say, once we issue a decision on a rating claim, historically about 8 to 10 percent of folks have disagreed with that decision, so there’s an initial notice of disagreement that we receive. So we have some back and forth with the claimant on that. So of those 8 to 10 percent of the entire universe of decisions we make, of the 8 to 10 percent that initially disagreed, about 3 percent of those folks move on to file a formal appeal by submitting a VA Form 9. Once we have that formal appeal there’s really just about 1 percent, maybe about 1.5 percent of the decisions are returned and overturned by the Board of Veterans’ Appeals at the end of the day.

So when we have when have 780,000 veterans that are waiting for that first decision, that is where Secretary Shinseki has focused our efforts in this time period with the transformation efforts. So appeals is not off the table, we are still working appeals that we have not diminished the number of resources the number of personnel that have been working appeals, but we’re looking at streamlining efficiencies, effectiveness. We have some design work groups that are working on things like that.

Shinn: The VA is spending an awful lot of money on mandatory overtime. How was that determined to be the most effective way to reduce the backlog?

McCoy: You know, that’s a good question; we’ve had a number of folks ask that. I would tell you that because of the complexity of work we do and a lot of the legal ramifications of the decisions we make and the medical overlay it takes us a least a year to two years to fully train one of our claims processors to be fully productive. You’re not really a journeyman claims processor until the end of your second year. So because we have such an immediate need to reduce the inventory and eliminate the backlog by 2015, adding more claims processors was not the answer right now at this time. So, we have, we’re utilizing the skills and abilities of our already trained workforce, they are on the ground. We also have some places where we have limitations in terms of space and available equipment, so the idea of hiring more folks was not the immediate answer. We’re also looking at the efficiencies that are being built into the automated process, so that we’re learning along the way just what the full capability of the employee will be in the new environment tools and all the new systems.

So again the plan is that we will be able to accomplish more with our new system, our better technology, our better tools and that either the same number of employees can produce as much or more than they are now and frankly we believe we’ll be able to repurpose our employees to do some of the other things that have been on our wish list.

I will tell you that our productivity as a parting piece of a data point for you. In June we had our highest productivity month ever, it was about 110,000 claims in May it was the second highest at just about 109,000 claims. So it was really the most expeditious way to bring down the backlog, bring down the inventory and have the already trained workforce, do what they do so well.