B-229398, Jan 5, 1989

B-229398: Jan 5, 1989

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The common reference to the Veterans Administration's relationship with veterans as "paternalistic" is a description of the system embodied in existing law. One of the committees' main concerns is whether certain VA procedures violate the "due process" rights of veterans. You asked us to address the following issues: (1) whether the individual cases you have shown us indicate that VA's procedures deny due process to applicants for VA benefits. CONCLUSIONS IN BRIEF Whether the Constitution requires that applicants for VA benefits (as opposed to those already determined to be entitled to benefits) receive "due process" has not been settled. /1/ Even if applicants were entitled to due process.

B-229398, Jan 5, 1989

MISCELLANEOUS TOPICS - Federal Administrative/Legislative Matters - Administrative agencies - Veterans benefits - Administrative proceedings - Due process doctrine DIGEST: 1. The Veterans Administration's practices and procedures (38 C.F.R. Sec. 3.1O3 (1987)) for deciding claims for veterans' benefits provides for necessary due process protections. 2. The common reference to the Veterans Administration's relationship with veterans as "paternalistic" is a description of the system embodied in existing law. VA Claims Adjudication Process (File B-229398; Code 105335).

Evaluator, HRD - William J. Staab:

This responds to questions arising from your review of the Veterans Administration's (VA) claims adjudication process, which the Senate and House Committees on Veterans' Affairs requested. One of the committees' main concerns is whether certain VA procedures violate the "due process" rights of veterans, as guaranteed by the Fifth Amendment to the Constitution. In order to respond to the committees, you asked us to address the following issues: (1) whether the individual cases you have shown us indicate that VA's procedures deny due process to applicants for VA benefits, (2) what standards or criteria you should use in judging VA's actions and procedures, and (3) whether the common reference to VA's role vis-a-vis veterans as "paternalistic" has any legal significance.

CONCLUSIONS IN BRIEF

Whether the Constitution requires that applicants for VA benefits (as opposed to those already determined to be entitled to benefits) receive "due process" has not been settled. /1/ Even if applicants were entitled to due process, however, neither VA's procedures, nor its practices, as illustrated by sample cases you have provided, demonstrate a systematic denial of due process. VA's procedures and regulations do not manifest a substantial risk of erroneous deprivations or unintended forfeitures of veteran benefits, conditions which the Supreme Court has said must exist before it would hold any particular procedure unconstitutional.

As the Court has indicated, errors may occur in individual cases without requiring the conclusion that the system is constitutionally deficient in providing due process if the system as a whole sufficiently reduces the chance of reaching the wrong result. Thus, our conclusion that VA's claims adjudication process is constitutionally sound does not mean that it could not be improved.

regarding the criteria to assess the adequacy of due process in VA's claims adjudication procedure, VA's regulations set forth the current obligations of VA to provide procedural rights to claimants. See 38 C.F.R. Sec. 3.103 (1987). The constitutional requirement for due process establishes a minimum; that minimum is not absolute but varies with the circumstances; and in the VA claims program, the minimum appears to have been met. /2/

Therefore, the criterion for assessing VA's procedures is not whether they meet the constitutional requirements for due process, but whether protections for claimants should be increased above the existing level. This is essentially a policy question.

That is, more could be done to protect or enhance the ability of veterans to establish their claims. However, as the Supreme Court points out in Walters v. National Association of Radiation Survivors, 473 U.S. 305, 320- 21 (1985) (NARS II), there is a balance to be struck between the gains from additional procedural safeguards on the one hand and, on the other, the administrative burden which those safeguards may create: "The marginal gains from affording an additional procedural safeguard often may be outweighed by the societal cost of providing such a safeguard." discussed below, some enhancement of the safeguards for veterans may be possible with little or no additional burden.

Finally, VA's "paternalistic" relationship with veterans has no legal significance in the sense of representing specific requirements imposed upon VA. Neither the term "paternalistic," nor any variation thereof, is used in the statute or applicable regulations. The term merely describes the nature of VA's system, which is designed, by law and regulation, to protect veterans, and to be nonadversarial. Veterans receive procedural rights that claimants for other types of government benefits generally do not receive before other agencies or in the courts. although it is possible to provide veterans with additional procedural protection, furthering the spirit of paternalism, neither the statute nor regulation requires such additional safeguards.

A discussion of your findings and our analysis follows.

FINDINGS, ISSUES, AND OBSERVATIONS

One of your findings so far is that approximately 70 percent of denial notices sent by local VA offices, after an initial determination by VA not to grant benefits, lack information that may be helpful to a claimant in determining whether to appeal. A typical notice is limited to the following statement explaining the reasons for denial: "Your application for benefits has been denied because there has been no showing of service connection."

You point out that this statement does not give the claimant any information about the facts, evidence, or laws and regulations relied upon by the VA. The law requires such information to be provided only after the claimant formally files a "notice of disagreement" with the original determination and the matter is not resolved either by granting the benefits sought or withdrawal of the notice of disagreement. 38 U.S.C. Sec. 4005(d)(1). When these conditions have been satisfied, the claimant receives a "statement of the case" which must include a summary of the evidence, citations to laws and regulations, and the decision, including a summary of the reasons for it. The statement of the case provides the veteran with a basis to decide whether to appeal the decision to the Board of Veterans' Appeals.

You suggest that without a statement of the case or the equivalent information at the time of VA's initial denial of benefits, a veteran may be frustrated in making an informed decision whether to file a notice of disagreement. The initial decision notice informs the claimant of his right to appeal the decision if he believes it is not in accord with the law and facts on record. Making such a determination, however, may be difficult without knowing what facts and laws were actually relied upon by VA in making its decision. /3/ You question whether VA's limited notice is consistent with a claimant's rights to due process as guaranteed by the Fifth Amendment to the Constitution and, if not, how VA should change the notification process.

Second, you have observed a number of administrative problems in the processing of VA claims (e.g. premature denial of claims, delays, failure to review old cases) and you ask whether these present due process problems.

Third, if due process is not at issue, you would like guidance as to how your review should proceed.

Finally, although the VA claims adjudication process is often described as "paternalistic," you have discovered a number of practices which you do not consider paternalistic. You ask whether the concept of paternalism has any legal significance.

ANALYSIS

Due Process

A person may not be deprived of a property interest by the federal government "without due process of 1aw." U.S. Const. amend. V. Clearly, when a veteran has been determined to be entitled to benefits and those benefits are discontinued or reduced, he has been deprived of a property interest. NARS II, 473 U.S. 305, 320 n.8 ; Plato v. Roudebush, 397 F.Supp. 1295, 1308 (D. Md. 1975). In its simplest form, "due process" would guarantee to such a veteran "notice of the case against him and opportunity to meet it." Mathews v. Eldridqe, 424 U.S. 319, 348-9 (1976).

Whether the Constitution requires due process protections to be made available to veterans who are applying for benefits, the subject of your study, remains an open question. Because those applying for government benefits, including veterans seeking disability compensation, may in fact not qualify for the benefits they seek, the courts have held, with some exceptions, that such individuals have not yet been deprived of a property interest and, hence, are not entitled to due process. The Supreme Court noted in NARS II that it had not yet decided whether applicants for government benefits who meet the statutory qualifications for eligibility possess protected property interests. 473 U. S. at 320, n.8. (Some lower federal courts have held that applicants for various benefits are so protected. See, e.g., National Association of Radiation Survivors v. Walters, 589 F.Supp. 1302, 1312 (N.D. Cal. 1984) (NARS I); Ressler v. Pierce, 692 F.2d 1212, 1214-16 (9th Cir. 1982).) /4/

We cannot of course predict how the Supreme Court might decide the issue of whether due process applies to qualified applicants for veterans benefits. However the Court's decision in NARS II strongly suggests that, even if the due process guarantee were held to extend to veterans not yet entitled to benefits, the process would not be found deficient. addition, even if we assume that applicants for VA benefits are entitled to due process, your findings do not indicate any systematic denial of due process in the VA application procedure.

Due process is a flexible concept. What is sufficient due process in one situation may not be in another, and the test for what will suffice involves a balancing of the gains from providing additional procedural safeguards against the cost to society of doing so. NARS II, 473 U.S. at 320-321. These General principles are reflected in a four part test set out by the Supreme Court in Mathews, 424 U.S. at 335, which involves applying the following factors:

-- the private interest that will be affected by the official action,

-- the risk of an erroneous deprivation of the private interest through the procedures used,

-- the probable value of additional or substitute procedural safeguards, and

-- the government's interest in adhering to the existing system, in terms of the burden which a change would enact.

In the cases you are examining, the private interest the veteran's right to benefits for service-connected disability appears significant. Disabled veterans may be partially or entirely unable to work and a disability pension may be a veteran's sole means of support. Notwithstanding the significant interest at stake, the evidence you have collected and the case files we have examined do not suggest that initial decision notices, administrative problems, or any other aspect of the claims adjudication process necessarily results in or risks systematic erroneous deprivations or unintended forfeitures of VA benefits. Nor did we find that any cases we reviewed actually resulted in a wrongful denial of benefits.

VA's claims adjudication process has various protective measures that minimize the possibility of an erroneous deprivation or unintended forfeiture. These measures include:

-- providing a nonadversarial hearing upon the veteran's request at any time on any issue (no agency representative may appear in opposition) (38 C.F.R. Sec. 3.103, 19.157 (1987));

-- requiring all reasonable doubts to be decided in favor of the veteran (38 C.F.R. Sec. 3.102 (1987));

-- requiring VA assistance for a claimant in developing the facts pertinent to his claim (38 C.F.R. Sec. 3.103(a) (1987));

-- requiring all evidence offered by the claimant to be included in the record (38 C.F.R. Sec. 3.103(b) (1987)); and

-- permitting the veteran to review the record.

These and other protections lessen the likelihood of an incorrect result.

Despite these protections, the lower court in NARS I found that VA's claims adjudication system could risk the accurate processing of a veteran's claim. The court record showed that VA personnel rarely subpoena data on behalf of veterans, rarely request independent medical examinations, usually rely on veterans to produce evidence of service connected disability, average only 2.84 hours to process each claim, and are judged, in part, by how quickly they process each claim. 589 F.Supp. at 1320-21. /5/

The Supreme Court, aware of this evidence, was not persuaded that the VA procedures risked erroneous deprivations or that whatever risk did exist outweighed the government's interest in maintaining the system. To the contrary, the Court in NARS II found VA's claims adjudication process to be fair to claimants. The Court reviewed the process in detail and said that it did not seem burdensome and was designed to operate informally with a high degree of solicitude for claimants. The Court also said that the time limit for submitting a notice of disagreement was liberal. The Court concluded that even though its effect might be to deprive the veteran of a right to counsel, the $lO fee limitation for attorneys was not unconstitutional. 473 U.S. at 311, 334.

The Court explained that the process fashioned by Congress for handling veterans claims is entitled to considerable deference, because Congress is better equipped than the courts to collect the information necessary to develop a fair and workable system. 473 U.S. at 319-320, 330-331 n.12.

The Court was aware that erroneous deprivations or unintended forfeitures may occur. It noted, however, that the presence of errors does not alone suggest that the system needs to be changed: "We have recognized that the Due Process Clause does not require that "the procedures used to guard against an erroneous deprivation ... be so comprehensive as to preclude any possibility of error.', 473 U. S. at 320. The Court added that "the fundamental fairness of a particular procedure does not turn on the result obtained in any individual case,' but should be "judged by the generality of cases to which it applies, and therefore a process which is sufficient for the large majority of a group of claims is by constitutional definition sufficient for all of them." 473 U. S. at 321, 330. The VA process for handling claims, which is fundamentally similar for granting benefits or for reviewing benefits already granted, appears to provide sufficient protection to pass this due process test. Your major finding-- that initial decision notices generally lack important information-- may be significant from an administrative standpoint. /6/ As noted earlier, however, unless it can be shown that the process in some way substantially risks consistent and systematic errors, adversely affecting veterans' benefits, we cannot conclude that it is legally deficient. /7/ The case files you have asked us to examine are not, either individually or as a group, indicative of a system that is constitutionally flawed. The lack of information to the veteran does not prevent him from appealing and the appellate review is virtually automatic; he need only file a notice of disagreement which need be no more specific than the denial. Thus, the veteran arguably has nothing to lose by appealing and getting a review of his case at a higher level within VA. (Whether this procedure could be more efficient, from the standpoint of both VA and the veteran, is another question.)

We offer the same advice and analysis for those cases manifesting administrative failings which are not systemic, such as forgotten or delayed cases which may have led to or risked an occasional unintended forfeiture. Some of these cases are problematic, you believe, because they were delayed. That is, VA logged them into its system slightly beyond its self-imposed time goals. We do not believe this suggests a constitutional problem. Neither the statute nor regulations establish a time limit within which a case must be processed or logged in and, from the information you have given us, the delays generally do not seem to be unreasonable.

Although the VA has established its own time limits for certain processing functions, they are not legal requirements. This does not mean, however, that VA can prolong the process indefinitely. The Supreme Court has said that the length of the adjudication process is a factor to be considered when examining whether due process has been provided. lengthy adjudication process in itself is not indicative of a constitutional violation, unless it can be shown that it was unreasonably prolonged. Cleveland Board of Education v. Loudermill, 470 U.S. 532, 547 (1985).

The fact that VA does not always meet its own goals for initial processing of claims does not suggest to us that the process is unreasonably prolonged. In fact, other evidence suggests the contrary, i.e., that VA generally processes cases quickly. (The lower court in NARS I cited evidence showing that VA spent, on average, only 2.84 hours to process each claim and judged its personnel on how quickly they processed claims. 589 F.Supp. at 1320-1.) Even if we assume that the process was unreasonably prolonged in some cases, the problem does not appear to be systemic.

Judging the VA Claims Process

The general components of procedural due process are notice and hearing. Within those generalities, as the NARS II decision explains, whether due process in a given case is sufficient to meet the minimum for compliance with the Fifth Amendment depends on the circumstances of each situation. As NARS II also indicates, the VA's procedures seem to meet the minimum requirements. The decision implies that additional due process above the minimum, while desirable, should be balanced against the additional burden to the government, if any.

As a result, to support a recommendation for change, it would be necessary to show either (1) that the present procedure, while adequate in theory, is in practice yielding an unacceptably large number of erroneous results, (2) that due process can be increased for veterans without unduly increasing the government's burden of administering the program; or (3) that, despite an increase in burden, and despite the fact that legal requirements are being met, additional protections are needed to fulfill other policy objectives.

Using the second approach, we might, for example, suggest that VA offer more information than it does at present when it initially denies a claim, on the theory that well-informed claimants would be less likely to appeal. The burden to VA of this procedure would, if it works, be outweighed by the savings later from fewer appeals. Since this result is conjectural, however, this is the kind of thing you might wish to suggest be tried as an experiment.

Although we do not believe that your findings suggest a constitutional due process problem, we advise that you examine due process from a regulatory standpoint. VA has adopted regulations (38 C.F.R. Sec. 3.103 (1987)) that provide for due process protections for veterans applying for benefits. These protections include procedures traditionally thought to be part of a comprehensive due process system, several of which are discussed above. You can examine how VA complies with this regulation.

Paternalism

VA's relationship with veterans applying for benefits has been characterized as "paternalistic". The applicable law and regulations, however, do not use the term paternalistic. The term is a metaphor used to describe VA's system, which is designed by law and regulation to be protective of veterans and nonadversarial. Veterans receive procedural rights that claimants for other types of government benefits generally do not receive when adjudicating claims before other agencies or in the courts.

"Paternalism" is best thought of as a shorthand description of the system embodied in the existing law. Obviously, therefore, it is not logically possible to say that paternalism requires more than existing law provides, since paternalism means what existing law provides. On the other hand, this does not preclude us from saying, if the evidence to support the statement exists, that the existing law as implemented by VA should provide more protection for veterans.

Although it is possible to provide veterans with additional procedural protection, furthering the spirit of paternalism, neither the statute nor regulation requires such additional safeguards.

/1/ Currently, all claims for VA benefits are adjudicated through the VA with no opportunity for judicial review except for constitutional attacks on the operation of the claims systems. 38 U.S.C. Sec. 211 (a); Johnson v. Robinson, 415 U.S. 361 (1974). This will change sometime in 1989 as a result of the enactment of the Veterans' Administration Adjudication Procedure and Judicial Review Act (Public Law 100-687). Signed by the President on November 18, 1988, the Act will, for the first time, give veterans access to the federal courts to contest VA benefit denials on other than constitutional grounds.

/2/ It is possible that the VA procedures exceed the minimum. That is, VA might be able to lessen the procedural rights of claimants and still be held to have provided sufficient due process.

/3/ Claimants may avoid such problems by examining the record, which, as we understand, is permitted.

/4/ Except for NARS I, later reversed by the Supreme Court without resolving this issue, none of these cases specifically involved VA benefits. In any event, the lower court decisions would only be binding in the judicial district or circuit in which they were decided.

/5/ This evidence was submitted in NARS I to show that attorneys were a necessary part of the process and that the $10 fee limitation for veteran representatives unconstitutionally restricted veterans from procuring the services of an attorney.

/6/ For example, if the claimant had additional factual information about how his case was decided, the correction of obvious factual errors and wrongful denials could be expedited at the local level, thereby allowing the Board of Veterans' Appeals to decide only the more substantive cases.

/7/ If such evidence were available, we would also have to examine the other factors that are part of the "due process" analysis, i.e., the probable value of additional procedural safeguards and the government's interest in maintaining the current system.