Citation Nr: 0403990 Decision Date: 02/11/04 Archive Date: 02/23/04 DOCKET NO. 03-07 524 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Buffalo, New York THE ISSUE 1. Entitlement to accrued improved pension benefits, based upon a report of unreimbursed medical expenses incurred prior to, but received after, the veteran's death. 2. Entitlement to an increased award of improved death pension benefits, based on unreimbursed medical expenses incurred prior to the date of claim. REPRESENTATION Appellant represented by: Blinded Veterans Association ATTORNEY FOR THE BOARD C. Crowley, Counsel INTRODUCTION The veteran served on active duty from July 1943 to February 1946, during World War II. His battles and campaigns included Northern France, Central Europe, Ardennes, Normandy, and Rhineland. His Decorations and Citations included the European African / Middle Eastern Service Medal, the Army Commendation Ribbon, and the World War II Victory Medal. The appellant is the veteran's widow. This case comes to the Board of Veterans' Appeals (Board) from decision dated July and October 2002 by the RO. This appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, D.C. VA will notify you if further action is required on your part. REMAND The appellant, the veteran's widow, claims that she is entitled to certain accrued benefits because the veteran did not receive an increase in pension benefits that would result from the deduction of certain medical expenses that were paid, in 2001, but that were not submitted on a "Eligibility Verification Report" (EVR) until after the veteran's death in April 2002. She also claims, in the event that these expenses cannot be used to increase the veteran's improved pension award, that she should be able to use them to reduce her own 2002 income for her separate entitlement to death pension. The basic premise underlying VA's improved pension program is that during any given month, a beneficiary's "Income for VA Purposes" (IVAP) plus VA pension benefits will establish a given level of income, called the Maximum Annual Pension Rate (MAPR). To make the program conform most closely to its basic theory, certain expenses paid by a beneficiary are taken into consideration when arriving at an IVAP. See M21- 1, Part IV, Chapter 16, Subchapter VI, 16.30. Under 38 C.F.R. § 3.272(g), "Unreimbursed Medical Expenses" may be used to reduce the IVAP, generally, if they are expenses paid on or after the date of entitlement to improved pension by the beneficiary, for himself or a relative who is a household member, for which he will receive no reimbursement, and the total of which exceeds 5 percent of the applicable MAPR. Allowable medical expenses are listed in "Addendum A" of M21-1, Part IV, Chapter 16. Normally, medical expenses are allowed as a deduction after the fact, based on the report of expenses actually paid. These are called "Nonrecurring Medical Expenses." M21-1, Pt. IV, Ch. 16, Sub. VI, 16.31 h; see also 38 C.F.R. § 3.271 (computation of income) and 38 C.F.R. § 3.272(g) (exclusions from income, medical expenses). However, certain medical expenses may be allowed prospectively, where reasonably predictable. Compare "M21- 1, Part IV, Authorization Procedures, Chapter 16, Income and Net Worth, Subchapter VI, Improved Pension-Medical Expenses, 16.30 d Criteria for Allowing Medical Expenses Prospectively" (recurring nursing home fees predictable) with VAOPGCPREC 12-94 ("recurring, predictable, and reasonably estimable" medical expenses include cases where veteran has ongoing medical condition, and amounts claimed after death could be estimated with a reasonable degree of certainty; ) and VAOPGCPREC 6-93 (while EVRs submitted after death not considered "evidence on file at death date," such EVRs can be used to verify grant based on "logical inferences" from claims file as to recurring expenses). When these recurring medical expenses are first allowed, a notification letter is sent to the claimant advising that failure to report a reduction in unreimbursed expenses or an increase in income will result in creation of an overpayment. In cases where the beneficiary fails to confirm the recurring expenses, a predetermination notice will be sent prior to the creation of the overpayment. M21-1, Pt. IV, Ch. 16, Sub. VI, 16.31 f. The expenses at issue in this case are expenses that the veteran paid for himself and his wife in 2001, and total approximately $7,411.00. Unfortunately, he was unable to submit his 2001 EVR prior to his death on April [redacted], 2002, and these expenses were then submitted by his family, after the date of his death. If he would have submitted them anytime from January 2002 to April 16, 2002, they could have been used to support a claim for an increase in the veteran's improved pension award, based on a reduction of his IVAP for 2001. However, this was understandably overlooked, due to his last illness. His widow, then, wishes to now make her own claim for accrued benefits, based on this 2001 "Eligibility Verification Report" (EVR), demonstrating expenses paid by the veteran in 2001, but submitted after his death in April [redacted], 2002. Generally, under 38 U.S.C.A. § 5121, periodic monetary benefits to which an individual was entitled at death under existing ratings or decisions, or those based on evidence in the file at date of death, and due and unpaid for a period not to exceed two years, shall, upon the death of such individual, be paid to certain listed individuals, in this case to the veteran's spouse. But see Veterans Benefits Act of 2003 (VBA of 2003), Pub. L. No. 108-183, § 104(a),(d), 117 Stat. 2651, 2656 (eliminated the two-year limitation on the payment of accrued benefits with respect to deaths occurring on or after the VBA of 2003's date of enactment (December 16, 2003)). Normally, in order to support a claim for accrued benefits, the veteran must have had a claim pending at the time of death for such benefits or else be entitled to them under an existing rating or decision. Jones v. West, 136 F.3d 1299 (Fed. Cir. 1998); see also Zevalkink v. Brown, 6 Vet. App. 483, 489-490 (1994), aff'd, 102 F.3d 1236 (Fed. Cir. 1996) (accrued-benefits claimant has right to "stand in shoes of veteran" and pursue his claim after his death). In this case, this situation could arise where a veteran had already filed his 2001 EVR prior to his April [redacted], 2002 death, but where VA might not have completed processing his claim; or where his claim had been granted in part, but where his date of death preceded the date of payment being received by him. In Jones, the Federal Circuit held that the surviving spouse's "accrued benefits claim is derivative of the veteran's claim" and so concluded that, absent unconsidered new and material evidence in the file as of the date of death, a surviving spouse could only receive accrued benefits based on "existing ratings and decisions" and could not reopen or reargue a claim. 136 F.3d 1299 (citing Zevalkink, 102 F.3d at 1241-42, in holding that Court of Appeals for Veterans Claims (CAVC) erred in concluding that widow could file accrued benefits claim by submitting after death evidence of valid marriage for purposes of adding herself as a dependent onto veteran's pension award when veteran had submitted such a claim prior to death, but later abandoned that claim, so that it was no longer a pending claim within appeal period). Here, there was no formal claim for increased pension based upon unreimbursed medical expenses pending at the time of the veteran's death. The widow has also not claimed that there was any "new and material" evidence on file as of the date of death, or that there exists any evidence that is in VA's constructive possession, so that it constitutes "evidence on file on date of death" even thought it is not yet of record. Hayes v. Brown, 4 Vet. App. 353, 360-61 (1993) (service department and certain VA medical records are considered constructively in claims file at the date of death, although they may not physically be in file until after that date). There was however, a determination adverse to the veteran made in March 2002. The RO informed the veteran that because it had received information that the veteran's income was greater than initially reported for 1998, an overpayment was created on his account, and effective May 2002, his pension benefits would be decreased to correct for this $610.00 overpayment. The veteran died on April [redacted], 2002, however. The record does not show that VA further attempted to recoup the overpayment. In May 2002, the 2001 EVR was submitted. In July 2002, the RO informed the appellant that because the veteran died prior to submitting his claim, the claim could not be considered. The RO also informed the appellant that if any outstanding checks were due and unpaid on the date of the veteran's death, that they would reconsider her accrued benefits claim. The appellant submitted her notice of disagreement (NOD) in July 2002. In August 2002, she was informed that she was awarded her own entitlement to death pension, with an additional amount due to her requiring the aid and attendance of another person, effective May 2002. Although the veteran died prior to the end of April 2002, she was also informed that she was awarded his rate of pension, $721, for the entire month of his death, with her rate of death pension, $693 effective from May 2002. The RO explained that her award included last expenses, in the amount of $6,420.00, and $648.00 in Medicare expenses. The appellant resubmitted the same 2001 EVR in September 2002, reporting only her medical expenses for the year 2001. The RO denied her claim for increased death pension, informing her that medical expenses for a period prior to her entitlement to death pension (May 2002) cannot be considered. Additionally, the Board notes, unreimbursed medical expenses are only deductible if paid by the claimant. These same expenses, although paid for the benefit of the appellant, and for her treatment, were previously claimed as expenses paid by the veteran. The appellant submitted her NOD to this decision in October 2002. In October 2002, the appellant was awarded $600 in nonservice-connected burial benefits. It is not clear if this amount was considered as part of, or separate from, the amount deducted as "last expenses" from the appellant's income when the RO prepared her IVAP in computing her own death pension award. The February 2003 statement of the case (SOC) only covers the issue of whether the 2001 medical expenses can be deducted from the widow's death pension award. Since she also seems to be appealing the issue of whether they can be applied to the veteran's improved pension award, so that accrued benefits are due and unpaid to her, an SOC should be sent to her on this issue as well. Manlincon v. West, 12 Vet. App. 238 (1999). The Board notes that the appellant's claim that expenses paid in 2001 should be used to reduce her countable income for improved death pension purposes requires remand and clarification as well. First, the Board notes that 38 C.F.R. § 3.272(h) states that expenses of the veteran's last illness, burials and just debts "which are paid during the calendar year following that in which the death occurred may be deducted from annual income for the 12-month annualization period in which they were paid or from annual income for any 12-month annualization period which begins during the calendar year of death, whichever is to the claimant's advantage. Otherwise, such expenses are deductible only for the 12-month annualization period in which they were paid." Section 3.272(h)(1) states that "amounts paid by a spouse before a veteran's death for expenses of the veteran's last illness will be deducted from the income of the surviving spouse. Section 3.272(h)(2) states in pertinent part that amounts paid by a surviving spouse for the veteran's just debts, expenses of last illness and burial will be deducted from the income of the surviving spouse. While the RO appears correct in its conclusion that expenses of the appellant paid prior to the effective date of her award of improved death pension cannot be reimbursed, it does not appear that the RO considered whether any of the expenses of the veteran listed on EVR filed in May 2002 would qualify as expenses of the "last illness." See M21-1, Part IV, Chapter 16, 16.32b; see also 38 C.F.R. § 3.272(h)(1). Additionally, it does not appear that the appellant was ever provided adequate notice under 38 U.S.C. § 5103 regarding her claim for a reduction of her countable income based on expenses of the veteran's last illness paid by her. On November 9, 2000, Congress revised VA's duties to notify and assist claimants with the passage of the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000). The VCAA is codified at 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, and 5107 (West 2002), and the implementing regulations are found at 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2003). The VCAA requires, in part, that VA notify the claimant and the claimant's representative of any information, and any medical or lay evidence, not previously provided to the Secretary that is necessary to substantiate the claims-where at least a substantially complete application has been submitted. As part of the notice, VA must specifically inform the claimant and the claimant's representative of which portion of the evidence is to be provided by the claimant and which part, if any, VA will attempt to obtain on behalf of the claimant. 38 U.S.C.A. § 5103(a). See Quartuccio v. Principi, 16 Vet. App. 183 (2002). In this case, the Board notes that the appellant claimed funeral and plot expenses in her original application, which the RO considered in awarding her benefits. However, she was never advised, in accordance with 38 U.S.C. § 5103, that expenses of the veteran's last illness and just debts might substantiate her claim. Specifically, the EVR submitted in May 2002 reported expenses for the period ending on December 31, 2001. There is no evidence that the appellant was advised that unreimbursed expenses of the veteran's last illness and just debts not previously reported, to include the period from December 31, 2001 to the veteran's death in April 2002 could help substantiate her claim for increased improved death pension. Additionally, it would also be helpful to the Board if the RO would note whether the $6,420.00 allowed in last expenses, as an offset to the appellant's income, in her August 2002 award (effective May 2002), accounted for the later $600 awarded her for the nonservice-connected burial benefit, in October 2002. See M21-1, Part IV, Chapter 16, 16.41 (30) (burial benefits not income, but if final expense deduction is awarded prior to burial benefit reimbursement for same expenses, award to be adjusted under 16.32). It would also be helpful if the RO would confirm whether the recoupment of the $610 overpayment made to the veteran was abandoned in April 2002, due to his death. Finally, it would also be helpful if the RO would note whether, if prospective medical expenses were to be allowed on the appellant's accrued benefits claim, whether this change would result in the amending of her award to her detriment, so that the rate of pension for the date of the veteran's death is corrected to zero dollars, per M21-1, instead of the $723 she initially received. M21-1, Pt. IV, Ch. 16, Sub. I, 16.05 b (1)(c); see also 38 C.F.R. § 3.31. Accordingly, this case is REMANDED for the following: 1. Send the appellant an SOC and Form 9 on the issue of whether the 2001 medical expenses, submitted in 2002, can be deducted from the veteran's improved pension award, so that accrued benefits are due and unpaid to her. Manlincon v. West, 12 Vet. App. 238 (1999). 2. Prior to making any further determination on the merits, ensure that all notification and development action required by the VCAA, its implementing VA regulations, and any other pertinent law is completed. 3. Please explain how the sum of $6,420.00, allowed in last expenses, was calculated. (For example, which amounts paid by the widow for the unreimbursed expenses of the veteran's last illness and burial as well as the veteran's just debts, were allowed. See 38 C.F.R. § 3.272(h)(1); M21-1, Part IV, Chapter 16, 16.32.) The RO should fully address whether any other expenses noted in the VA Forms 21-8416 received subsequent to the veteran's death, as well as any information obtained as a result of this remand, qualify as a last expense. Id. 4. Note whether the $6,420.00 allowed in last expenses, as an offset to the widow's income, in her August 2002 award (effective May 2002), double paid her when later allowing the $600 for the nonservice-connected burial benefit, in October 2002. See M21-1, Part IV, Chapter 16, 16.41 (30). 5. Please confirm if the recoupment of the $610 overpayment made to the veteran in 1998, which he was notified of in March 2002, was abandoned in April 2002, due to the death of the veteran. 6. Please note if prospective medical expenses were to be allowed on the widow's accrued benefits claim, whether this change in income would result in the amending of her award, so that the rate of pension for the date of the veteran's death is corrected to zero dollars, per M21-1, instead of the $723 she initially received, creating an overpayment. M21- 1, Pt. IV, Ch. 16, Sub. I, 16.05 b (1)(c); see also 38 C.F.R. § 3.31. 7. If the benefits sought on appeal remain denied, the appellant and the appellant's representative, if any, should be provided with a supplemental statement of the case (SSOC). An appropriate period of time should be allowed for response. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded to the regional office. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment by the RO. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See The Veterans' Benefits Improvements Act of 1994, Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994), 38 U.S.C.A. § 5101 (West 2002) (Historical and Statutory Notes). In addition, VBA's Adjudication Procedure Manual, M21-1, Part IV, directs the ROs to provide expeditious handling of all cases that have been remanded by the Board and the Court. See M21-1, Part IV, paras. 8.43 and 38.02. ____________________________________________ KATHY A. BANFIELD Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2003).