Military Update: The U.S. Court of Appeals for Veterans Claims has rejected with stunning speed a motion from the Department of Veterans Affairs that it be allowed to stop taking steps toward reimbursing hundreds of thousands of veterans, for the non-VA emergency care costs they have paid, until higher courts rule on VA’s appeal.
Warning of possible “accounting chaos” if payments must begin before appeals are exhausted, VA lawyers Friday filed a motion with the Veterans Claims court to stay the “precedential effect” of the court’s decision last year in Staab v. McDonald, now renamed Staab v Shulkin with a new VA Secretary in office.
VA should not have to continue to take complex and costly steps toward reimbursing these veterans or survivors for non-VA emergency healthcare claims, VA lawyers argued, because the Veterans Claims court decision is likely to be overturned, which would mean VA isn’t liable to pay a rising mountain of claims.
By Monday, however, the Veterans Claims court applied a rubber stamp of red ink to VA’s stay request, ruling “Motion Denied.” Judge Alan G. Lance Sr. signed the stamp on behalf of a three-judge panel.
“It’s the quickest judicial ruling I’ve ever seen,” chuckled Barton F. Stichman, one of three attorneys for the appellant, Richard W. Staab. Staab is an 84-year-old Air Force veteran who had to pay roughly $48,000 in unreimbursed medical expenses following emergency heart surgery in the private sector in 2010.
VA claim experts told Staab that because he was eligible for Medicare Part A, any additional out-of-pockets costs he incurred tied to non-VA emergency care were his responsibility. Under a 1999 law, VA only has covered outside emergency care if a veteran has no other healthcare coverage, which would include Medicare.
Staab sued, arguing that Congress changed that law in 2009 but that VA chose to ignore the change and continued to deny emergency care reimbursements to any veteran with alternative health care coverage.
Last April a three-judge panel on the U.S. Court of Appeals for Veterans Claims agreed with Staab, finding that VA, in rewriting regulations, ignored the “plain language” of the 2009 statute which Congress passed to protect VA-enrolled veterans from out-of-pocket costs when forced to use non-VA emergency care.
VA’s plea for reconsideration by a full panel of judges on the Veterans Claims court also was denied last summer. This month attorneys for VA and the Justice Department filed a fresh appeal brief with the U.S. Court of Appeals for the Federal Circuit, urging its judges to overturn the Veterans Claims decision.
They argue that Congress in 2009 did change language of one relevant provision of law, but it left another provision untouched, which VA appropriately used to continue to deny claims for reimbursement of non-VA emergency care.
In their motion to stay the effect of Staab until the decision is overturned or appeals are exhausted, VA attorneys told the lower court that the volume of claims affected is “indeed significant.” Since April 8, 2016, date of the Staab decision, VA has suspended consideration of 373,000 emergency care claims it previously would have denied. VA estimates reimbursements for such claims, filed in 2017 alone, would fall between $75 million and $273 million. Over five years, the added costs would fall between $394 million and $1.45 billion, and over 10 years the total could exceed $6.5 billion. Meanwhile, VA work toward paying the claims is proceeding.
“Policy program officials, revenue officials, rulemaking professionals, legal and other subject matter experts across the Department have already been directly involved in this undertaking and will continue until its completion,” wrote VA in its stay request. “Preliminary steps have been completed to craft the regulations and identify computer needs, and absent the grant of the stay, VA will need to proceed with costly software upgrades and continued investment in resources.”
Despite the “strong possibility” Staab will be reserved, VA argued, without a stay it will continue a “heavy and irreversible investment in rulemaking and implementing” the decision, using up resources that VA should be applying “to healthcare programs that would undisputedly benefit veterans now.”
VA has been fighting the Staab decision in Congress too. Sen. Mike Rounds (R-S.D.) revealed during the Feb. 1 confirmation hearing of Dr. David Shulkin to be the VA Secretary, that some senators schemed twice last year with VA to try to offer quietly, and to pass by unanimous consent, bills that would reverse the effect of Staab and modify the 2009 law on VA emergency care reimbursements.
Rounds referred to them as “hotline bills,” which he and other senators blocked. Rounds asked Shulkin his opinion of such back-door efforts.
“My opinion doesn’t matter because this is law,” Shulkin said. “The judges have ruled…I have instructed VA to start putting together [the] regulation that it’s going to take to be able to start paying these emergency room bills. Every day we delay, veterans are going to be put in the middle and that’s really unfair to them.”
But Rounds reminded Shulkin that the VA is appealing Staab and so its lawyers “continue to do battle on this.”
Shulkin agreed he should “clarify our position.” He said, “While VA is moving forward to start paying these bills” it also “does not believe that the court interpreted the statute correctly…and so we will see what happens. But in the meantime, I am not going to allow veterans to be put in the middle like we have been continuing to [do.] We are going to move forward and we will do it with speed to make sure we start paying these bills as soon as we possibly can.”
Rounds noted the costs involved, as much as $10 billion over 10 years, which will fall on veterans “if the VA doesn’t pay it. You don’t have the money in your budget. Are you prepared to ask Congress for appropriate funds,” he asked.
Shulkin expressed concern that Staab and 2009 law change is “a new interpretation of a benefit for veterans who have other health insurance” and need emergency care, in many cases for conditions that are not service-connected.
“If we do not get additional funds authorized, that money will come from the services we provide today to veterans, and they will have less health care,” Shulkin warned. “So, yes, we will…ask [Congress] to help support with additional funding this new benefit -- if it is not overturned on appeal from the Department of Justice.”
Staab’s attorney Stichman, who is joint executive director of the National Veterans Legal Services Program, said the court was right to reject VA’s stay request because its chances of winning on appeal actually are low. Also, more delay in paying claims would cause “irreparable harm” to elderly veterans.
“If they happen to die while the claim is on appeal then they’ll never see the money and the debt would pass on to the estate,” Stichman said.
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Tom Philpott has been breaking news for and about military people since 1977. After service in the Coast Guard, and 17 years as a reporter and senior editor with Army Times Publishing Company, Tom launched "Military Update," his syndicated weekly news column, in 1994. "Military Update" features timely news and analysis on issues affecting active duty members, reservists, retirees and their families.
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