VA to Make Billions of Dollars in Reimbursement Payments to Hundreds of Thousands of Veterans

WASHINGTON – On Monday,  the U.S. Court of Appeals for Veterans Claims (CAVC) ruled in a case styled Wolfe v. Wilkie, that VA’s 2018 reimbursement regulation violates the Emergency Care Fairness Act of 2010 (ECFA) that requires VA to reimburse veterans for the emergency medical expenses they incur at non-VA facilities that are not covered by the veteran’s private insurance.

The CAVC certified the case as a class action and ordered the VA to remedy its unlawful regulation by reimbursing veterans for all of their past and future out-of-pocket emergency medical expenses not covered by the veteran’s private insurance other than copayments.

The class action petition was filed on behalf of veterans Amanda Wolfe and Peter Boerschinger by the National Veterans Legal Services Program (NVLSP) and Sidley Austin LLP on a pro bono basis.

This ruling is the second time the CAVC struck down the VA regulation governing reimbursement of emergency medical expenses. Five years ago, NVLSP appealed to the CAVC on behalf of veteran Richard Staab after the VA declined to reimburse him for any of the $48,000 he incurred for emergency open heart surgery purely because Medicare covered part of the emergency care bill. In the CAVC’s 2016 landmark precedential decision in Staab v. Shulkin, it invalidated the VA regulation that prohibited reimbursement for any of the veteran’s emergency medical expenses merely because some, but not all of those expenses, were covered by the veteran’s insurance. The Court held in the Staab case that Congress intended in the ECFA for VA to step in as a “secondary payer” where other health care insurers cover only a portion of the cost of the veteran’s emergency treatment and the regulation violated this statute.

Yesterday’s ruling struck down the regulation that VA promulgated in 2018 to replace the regulation struck down by the CAVC in Staab.

Based on the VA’s past estimates, compliance with yesterday’s decision will require VA to pay from $1.8 billion to $6.5 billion in reimbursements to hundreds of thousands of veterans with reimbursement claims filed or pending during the period from 2016-2025.

“The Court’s decision rights a terrible injustice and its order ensures that veterans who were unjustly denied reimbursement for critical emergency treatment at non-VA facilities will finally be reimbursed,” said NVLSP Executive Director Bart Stichman. “It is a hard-won victory for hundreds of thousands of veterans, especially those like Mr. Staab, Ms. Wolfe and Mr. Boerschinger for whom reimbursement is long overdue.”

The Court was unequivocal in yesterday’s decision. “After Staab, VA adopted a new regulation . . . . exclude[ing] from reimbursement nearly every type of expense a veteran could have incurred if he or she had insurance covering [a portion of ] the . . . medical service at issue. So after Staab, VA adopted a regulation that functionally creates a world indistinguishable from the world Staab authoritatively held impermissible under the statute. . . . . It’s difficult to conceive how an agency could believe that adopting a regulation that mimics the result a Federal court held to be unlawful is somehow appropriate when the statute at issue has not changed. But there is more. Even after we decided Staab, . . . VA was affirmatively informing veterans that they were not entitled to reimbursement for non-VA emergency medical care if they had any insurance covering the service at issue. In other words, the Agency was telling veterans that the law was exactly opposite to what a Federal court had held the law to be.”

In its ruling, the CAVC explained why it granted the petition in the same order that it certified the class action: “given the unique circumstances surrounding this case, particularly the nature of the alleged injury and the need for prompt remedial action… resolving both matters in a single order is appropriate here.”

This is only the second time in the CAVC’s 30-year history that it has granted a class action. In June 2019, CAVC certified its first class action in Godsey v. Wilkie, also brought by NVLSP.

The petitioners – Amanda Wolfe & Peter Boerschinger

Plaintiff Amanda Wolfe is a veteran of the U.S. Coast Guard who served for six years, with postings in Washington and Michigan, as well as service during Hurricane Katrina response and recovery.

In September 2016 after becoming unexpectedly ill, Ms. Wolfe had to undergo an emergency appendectomy. Given her critical condition, Wolfe drove herself to the closest emergency room and had life-saving emergency surgery immediately. Unfortunately, the nearest VA hospital was at least three hours away. Wolfe recovered and filed a claim with the VA for reimbursement for $2,558.54. This represented the amount of her $22,348.25 hospital bill not covered by her employer-sponsored health insurance. Faced with the prospect of the hospital sending her unpaid bill to collections in fall 2016, Wolfe felt compelled to pay the bill with savings she had set aside for post-adoption expenses in 2016. The VA denied Wolfe’s claim for reimbursement in February 2018, one month after issuing its replacement regulation, because the remaining $2,558.54 was what Wolfe owed under her insurance policy for copayments, deductibles, and coinsurance.

Wolfe noted that had she not signed up for employer-sponsored health insurance, the VA would have paid the entire $22,348.25 hospital bill without trouble. She says the VA’s decision to place new obstacles to reimbursement deters veterans from getting other health insurance.

Plaintiff Peter Boerschinger, 79, is a veteran of the U.S. Navy who served for four years and was designated with a 30 percent disability. In April 2018, Boerschinger received emergency treatment for pneumonia and congestive heart failure from a non-VA provider in Michigan.

The VA hospital closest to him had closed their emergency room and directed patients to seek emergency treatment elsewhere. During his hospitalization, doctors attempted to transfer him to the VA hospital several times, but were told there was no room for him. He later submitted a claim to the VA for reimbursement of $1,340.00 associated with his emergency care that was not covered by his health insurance. He received a denial letter from the VA based solely on the grounds that he had other insurance coverage.

History

For nearly two years while the VA wrote a replacement regulation in an effort to comply with the Staab ruling, the VA put a freeze on hundreds of thousands of pending emergency care reimbursement claims from veterans. Ultimately, in January 2018, the VA issued a regulation to replace the one invalidated in Mr. Staab’s case, and began to resolve the backlog of reimbursement claims. But the replacement regulation created a new obstacle by forbidding the VA from reimbursing a veteran “for any copayment, deductible, coinsurance or similar payment” incurred during emergency treatment at non-VA hospitals.

According to the class action lawsuit filed at the CAVC in October 2018 by NVLSP on behalf of Ms. Amanda Wolfe (Wolfe v. Wilkie), the new regulation violates the ECFA because in contrast to the ECFA, which limits the scope of non-reimbursable expenses to copayments or “a similar payment,” the VA’s 2018 regulation added deductibles and co-insurance to the list of non-reimbursable expenses.

In its January 2019 filing, NVLSP amended the petition in Wolfe to add another class action lawsuit on behalf of petitioner, Peter E. Boerschinger, who sought to represent the tens of thousands of other veterans who, like him, received the inaccurate VA correspondence about the reimbursement criteria. As part of Mr. Boerschinger’s lawsuit, NVLSP also sought to compel the VA to provide corrected information to all veterans who received the inaccurate communications and to reinstate their reimbursement claims.

Background Information on the Wolfe and Boerschinger Lawsuits

• 04/01/2019 – In Response to NVLSP’s Class Action Lawsuit, VA Admits It Misled Tens of Thousands of Veterans
• 1/02/2019 – NVLSP Files Class Action Lawsuit Accusing VA of Disseminating False Information To Veterans
• 10/30/18 – The 8-Year Battle Continues: NVLSP Again Sues VA Over Continued Refusal To Comply With 2010 Statute

Background Information on the Staab Decision

• 01/17/2018 – VA Finalizes Rule Requiring Payment for Non-VA Emergency Claims Under NVLSP Court Victory in Staab
• 11/29/2017 – Video: Staab v. Shulkin – A Pivotal Case for Veterans
• 06/16/2017 – NVLSP Wins $2 Billion in Medical Care Benefits for Hundreds of Thousands of Veterans, Applauds VA Secretary’s Decision to Voluntarily Withdraw VA Appeal in Staab v. Shulkin
• 04/11/2016 – Court Rules That VA Has Shortchanged Veterans Since 2009 By Refusing to Reimburse Them for Emergency Medical Expenses Not Covered by Insurance

About NVLSP

The National Veterans Legal Services Program (NVLSP) is an independent, nonprofit veterans service organization that has served active-duty military personnel and veterans since 1981. NVLSP strives to ensure that our nation honors its commitment to its 22 million veterans and active-duty personnel by ensuring they have the benefits they have earned through their service to our country. NVLSP has represented veterans in lawsuits that compelled enforcement of the law where the VA or other military services denied benefits to veterans in violation of the law.

NVLSP’s success in these lawsuits has resulted in more than $5.2 billion dollars being awarded in disability, death and medical benefits to hundreds of thousands of veterans and their survivors. NVLSP offers training for attorneys and other advocates; connects veterans and active-duty personnel with pro bono legal help when seeking disability benefits; publishes the nation’s definitive guide on veteran benefits; and represents and litigates for veterans and their families before the VA, military discharge review agencies and federal courts. For more information go to www.nvlsp.org.