Pentagon officials denied those who rate the disabilities would cheat service members but pledged to investigate. "I'm trying to make sense of this finding," said acting Army Secretary Pete Geren.
Meanwhile, two Democratic senators criticized the Department of Veterans Affairs, expressing concern that President Bush's nominee to be VA's undersecretary for health, Michael Kussman, was long aware of problems at Walter Reed Army Medical Center but didn't respond.
"The warning lights were flashing at Walter Reed years ago, but the Bush administration chose to ignore the problem and our injured service members paid the price," said Sen. Patty Murray, D-Wash.
Testimony to Congress on Thursday by retired Lt. Gen. James Terry Scott, chairman of the Veterans' Disability Benefits Commission, is the latest to document problems in a system under extra strain as thousands of service members return from Iraq and Afghanistan.
Scott suggested there could be an effort to keep costs down as the military rates the severity of soldiers' disabilities. He said the Pentagon "has strong incentive to assign ratings less than 30 percent" so the military won't have to pay disability benefits.
In a preliminary review of Pentagon and VA data, Scott's commission found the Army was much more likely than the other active forces to assign a disability rating of less than 30 percent, the typical cutoff to determine whether a person can get lifetime retirement payments and health care.
VA ratings tend to be higher, due to a separate system that gives consideration to whether injured veterans are afflicted with multiple disabilities.
"It is apparent that service members are not well-served," Scott said at an unusual joint hearing of the Senate Armed Services and Veterans Affairs committees.
His commission was formed in 2004 to study ways to improve the benefits system and is to issue a report later this year.
Separately, the VA came under fire by members of a Senate Appropriations subcommittee after reports that Kussman, now the acting undersecretary, and other top department officials knew of problems at Walter Reed as early as 2004.
At the time, Kussman co-chaired a task force on improving veterans care and produced a report in which Walter Reed patients — seriously wounded veterans of Iraq and Afghanistan — stated that they were "frustrated, confused, sometimes angry" about their experiences, according to Salon.com..
"It's troubling that that long ago there was a report somewhere that these issues were festering over there. Was it not shared with anybody at the VA at the time?" Murray asked.
"Oh no, we knew about it," Kussman replied.
Later, Sen. Barack Obama, D-Ill., sent a letter to Bush to express concerns about Kussman's nomination as permanent undersecretary for health. Obama asked that Bush direct VA Secretary Jim Nicholson to release briefings and reports pertaining to when the department first learned of problems at Walter Reed.
Nicholson, meanwhile, said a presidential task force he is heading to improve troop and veterans care was working vigorously and planned to issue recommendations next week.
One primary focus of his department, he said, has been to pare down the backlog of claims, which currently take an average of 177 days to process.
"This is too long," Nicholson said in written testimony to the Senate Appropriations panel. "We must and will reduce the pending inventory and shorten the time veterans must wait for decisions on their claims."
At the joint hearing of Armed Services and Veteran Affairs, lawmakers recounted stories from injured troops and veterans who described long waits, lost paperwork and subjective ratings as they moved from military hospitals to the VA's vast network of 1,400 clinics and treatment facilities.
In particular, critics contend the ratings are easily manipulated to limit disability payments and create undue confusion.
"This is not a new issue," said Sen. Carl Levin, D-Mich., who chairs the Senate Armed Services Committee. "Our nation has a moral obligation to provide quality health care. We as a nation are not meeting this."
"For ratings 30 percent or above, there is a cost to the Army," said Geren, but he disputed that officials would shortchange troops on benefits.
"We have found no evidence the officers and soldiers on the disability boards have been influenced, but that is certainly something we can look into," he said.
Sen. Larry Craig of Idaho, the top Republican on the Senate Veterans Affairs Committee, decried the poor coordination between the Pentagon and VA after years of warnings and recommendations by congressional committees and a presidential commission.
Geren defended efforts to improve care, saying he had confidence in a new leadership team installed after disclosures in February of shoddy outpatient treatment and bureaucratic red tape at Walter Reed Army Medical Center.
An independent review group appointed by Defense Secretary Robert Gates said this week that money woes and Pentagon neglect were to blame for many of the problems, concluding that "leadership at Walter Reed should have been aware of poor living conditions and administrative hurdles."
In recent weeks, the Army has added case managers, set up telephone hot lines and sought to reduce paperwork. It says it will take into account the findings of numerous investigations currently under way.