Citation Nr: 1740734 Decision Date: 09/19/17 Archive Date: 10/02/17 DOCKET NO. 14-34 132 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Entitlement to a higher monthly nonservice-connected death pension payment. REPRESENTATION Appellant represented by: Kenneth H. Dojaquez, Esq ATTORNEY FOR THE BOARD Jason A. Lyons, Counsel INTRODUCTION This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017). 38 U.S.C.A. § 7107(a)(2) (West 2014). The Veteran had active service from July 1942 to October 1945, including in combat in World War II. He died in August 2010. The appellant was appointed as the fiduciary for the Veteran's surviving spouse for the purpose of disbursing VA pension payments in May 2012. This matter comes before the Board of Veterans Appeals (Board) on appeal from a January 2013 administrative decision issued by the Department of Veterans Affairs (VA) Pension Management Center (PMC) in Philadelphia, Pennsylvania, which awarded a higher monthly non-service connected death pension payment to the Veteran's surviving spouse. The case was previously remanded in November 2014. Following completion of development requested therein, it has returned for further disposition. FINDINGS OF FACT 1. The Veteran's surviving spouse has been residing in an Independent Living Facility (ILF) since approximately September 2010. 2. There are sufficient grounds to duly and convincingly find that "custodial care," as a defined under VA regulations, was also accomplished through his arrangement, in which case the fees for the ILF arrangement are reimbursable medical expenses that count towards increasing pension entitlement. CONCLUSION OF LAW The criteria are met for a higher monthly nonservice-connected death pension payment, equivalent to corresponding MAPR for a claimant with no dependents, in receipt of aid and attendance. 38 U.S.C.A. § 1541 (West 2014); 38 C.F.R. §§ 3.23, 3.273 (2016). See also, pertinent provisions of VA Adjudication Manual, M21-1. REASONS AND BASES FOR FINDINGS AND CONCLUSION Applicable Law and Case Background Pursuant to VA law, a surviving spouse of a veteran who met the wartime service requirements will be paid the maximum rate of pension, reduced by the amount of her countable income. 38 U.S.C.A. § 1541 (West 2014); 38 C.F.R. §§ 3.23, 3.273 (2017). Payments of any kind, from any source, shall be counted as income during the 12-month annualization period in which received, unless specifically excluded. 38 C.F.R. §§ 3.271, 3.272. Unreimbursed medical expenses, which were paid within the twelve month annualization period regardless of when incurred, are excluded from annual countable income to the extent that the amount paid exceeds 5 percent of the maximum annual rate payable. 38 C.F.R. § 3.262. Nonrecurring income (income received on a one-time basis) will be counted, for pension purposes, for a full 12-month annualization period following receipt of the income. 38 C.F.R. § 3.271(a)(3). Exclusions from income do not include Social Security Administration (SSA) benefits. See generally, 38 C.F.R. § 3.272. Such income is therefore included as countable income. Entitlement exists if, among other things, the claimant's income is not in excess of the maximum annual pension rate (MAPR) specified by law. 38 U.S.C.A. § 1521(a). The MAPR payable is published in tabular form in Appendix B of Veterans Benefits Administration Manual M21-1, and is to be given the same force and effect as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. In this case, the surviving spouse's death pension claim included requested recognition of need for aid and attendance. Effective December 1, 2009, the MAPR for a surviving spouse receiving aid and attendance with no dependents was $9,696. Effective December 1, 2012, the MAPR for a surviving spouse receiving aid and attendance with no dependents was $13,362. Effective December 1, 2013, the MAPR was $13,563. Effective December 1, 2014, the MAPR was $13,719. Effective December 1, 2016, the MAPR was $13,836. In the matter at hand, previously, by a May 2004 RO rating decision, the Veteran's original claim for special monthly pension based on the need for aid and attendance was granted, effective April 21, 2004. Thereafter, the Veteran's surviving spouse filed a September 2010 formal claim for nonservice-connected death pension (upon a VA Form 21-534). The surviving spouse indicated upon that form, not then being domiciled specifically within a nursing home, and further not having applied for Medicaid. She indicated that she had access to $96,000 in cash and $20,000 in retirement funds; and further income of $840 in Social Security income monthly, and $100 in dividends and interest. For purposes of expenses, the surviving spouse paid monthly a $100 premium for Social Security; and $2,600 monthly for residence and treatment received within an living facility. In a September 2010 letter, the living facility where the surviving spouse resided indicated providing the following services: meals; transportation to medical appointments; emergency notification pull cords present in room; on-site staff always available; housekeeping and laundry. The residents of the facility it was indicated were able to contract on a third-party basis with other providers for such services as on-site home health care and therapy; and assistance with medications and other medical and personal hygiene needs A physician's statement that month indicated that the surviving spouse should be eligible for aid and attendance benefits, given pertinent diagnoses, these of dementia; anemia; hypothyroidism; osteopenia; depression; UTI. The claimant was indicated to be able to walk unaided, feed herself, bathe, sit up, and not be confined to a bed. The appellant was indicated to not be able to leave home without assistance. Nursing care was not indicated. The surviving spouse, by a September 2011 RO decision, was granted nonservice-connected pension effective August 1, 2010, for herself at the aid and attendance rate. Within the form Request for Details of Expenses filed March 2011, the surviving spouse indicated no dependents; monthly expenses of housing, $2,600; food, $300; clothing $150; utilities $200; home healthcare $300. Further indicated, was the estimated cost of medical expenses of approximately $10,000 annually, the surviving spouse's medical costs which reflected expenditures for "in-home healthcare," as well as prescription medication and routine medical appointments. Also, March 2011 record of contractual agreement with a healthcare provider for assistance with daily living (a different individual than the surviving spouse's daughter, who would later take on the similar role in 2015) indicated that for sum of $70 per week, services were provided of assistance with bathing, standing and sitting, dressing and undressing, and taking medication. Upon a September 2011 VA Form 21-0820b, Report of Nursing Home or Assisted Living Information, upon contact with the living facility where the surviving spouse now resided, it was indicated that this adult nursing residence was not Medicaid approved. The surviving spouse had not applied for Medicaid. The facility was not a state veterans home or VA contract facility. The patient was under immediate care. The surviving spouse was not a patient in a nursing home because of mental or physical incapacity. Further noted in the commentary section of that form, speaking with a facility manager, it was explained that this was an independent living facility that provided three meals, transportation to medical appointments, hand rails and pull cords on the bathroom/kitchen, 24 hour staff and security. A notation from the RO itself was that this particular type of facility was not normally accepted as a qualifying medical expense. A companion document from that month, further documenting contact with the living facility, indicated that this was independent living that provided three meals, transportation to medical appointments, hand rails and pull cords in bathroom/kitchen, 24-hour staff, security on door-after 9 pm. According to the facility manager, several other residents in the facility claimed it as a medical expense [unclear if this was limited to examples of VA medical cost reimbursement, or other agency], and they had other facilities nationwide that had similar qualifications for purpose of medical expense deductions or reimbursement. VA Form 21-5427, Corpus of Estate Determination, also filed that month, indicated as follows: assets in the form of bonds $20,000; bank deposit $96,000; total amount of estate $116,000. Monthly income was Social Security benefits of $887; dividend and interest income of approximately $8. Household expenses were $2,600 for shelter; $300 for food; $150 for clothing; $1,383 for medical expenses; $345 other expenses. Further indicated upon that report, looking at the surviving spouse's assets, these were not being protected for future generations. Instead her assets were not considered sufficient for her to survive for a reasonable period of time without VA benefits. By a September 2011 RO rating decision, there was granted for the benefit of the surviving spouse, entitlement to aid and attendance allowance effective August 1, 2010. By a notification letter, it was explained that the surviving spouse would receive the following monthly awarded benefits: $1,000 monthly effective from September 1, 2010; $1,056 from February 1, 2011; $481 from September 1, 2011; $527 from February 1, 2012. Further explained by notification letter was the basis for the award structure. For the period from September 1, 2010 through September 1, 2011, the appellant had received annual income in the amount of $10,885 (mostly obtained from Social Security retirement payments). There were family medical expenses in the amount of $2,978 and further last expenses of $7,753 following the Veteran's death, which reduced countable income to $670. For subsequent period (unspecified, presumably from September 1, 2011 to February 1, 2012), income was $10,630 annually. There were family medical expenses of $4,238, reducing countable income to $6,908. This adjustment was reflected in the drop off of total amount of pension awarded, down to $481 monthly for this time period. For period thereafter, since February 1, 2012, the calculation consisted of medical expenses of $4,798 (this including Medicare Part B premiums of $1,158, and caregiver fees in amount of $3,640). This reduced countable income to $6,348. In addition, the RO explained in its letter, the appellant's countable income could not be reduced in accordance with the amount that was expended for residence and treatment obtained at Haywood Estates, in the monthly amount of $2,600. As the RO indicated, that was because on contacting the facility where the appellant resided, the response had been it was an independent living facility. The RO further explained: "The only way we may count a facility like this is if they provide assistance with your daily activities of living and provide medical services. This facility does not provide any of those services and cannot therefore be counted as medical expenses. We were able to count the caregiver that does provide care for you in the facility from an outside company but not your room and board. If you have evidence that this not an independent living facility please submit it to the VA for review." Then in January 2013, the RO indicated in further correspondence and in response to the appellant's provided medical expense report, from December 1, 2012, the family medical expenses which had been paid in the amount of $1,198 thereby reduced the appellant's countable income to $12,037. For the time period since February 1, 2013, medical expenses were used of $1,258 which represented the amount of Medicare Part B premiums, this reduced countable income to $11,977. In its April 2013 correspondence, thereafter, the appellant's attorney provided extensive argumentation in support of the point that her assisted living costs indeed should be incorporated into the determination of reimbursable medical expenses, which then would reduce countable income. The argumentation was provided as follows: The VA erred in determining that [the appellant's] assisted living costs did not qualify as medical costs. These payments are medical costs and should be deducted from her income. The VA Adjudication Procedures Manual M21-1MR states that certain medical costs are deductible expenses for pension purposes. Under Part V Subpart III Ch. I Section G para 43h when a beneficiary is deemed by the VA to be entitled to Aid and Attendance and that person is maintained in a home assisted living facility or other institution because the individual needs to live in a protected environment, all unreimbursed fees paid to the institution for custodial care (room and board) and medical or nursing care are deductible expenses. Medical and nursing care is defined in paragraph 43d. Medical care as services such as administration of medicine and nursing care... services such as assisting with bathing dressing feeding oneself and other activities of daily living. The director of the Haywood Estates verified that his facility is an "Other Facility (Senior Living Facility Adult DayCare Family Care Group Home etc)." He also verified that [the appellant] was receiving meal preparation, transportation to health related appointments house cleaning, and assistance with emergencies. Essentially the facility provides services for daily activities which are defined by the M21-1 MR as nursing services. The charges are not reimbursed and the services are permanent. Therefore since [the appellant] is entitled to A&A and is in a facility that does not qualify as a nursing home she is entitled to deduct all fees paid to that facility. These deductions are permitted to be deducted going back to the original date of claim. The original claim was decided in a September 2011 rating decision. In August 2012, the VA received a statement from the director of the Haywood Estates outlining the service provided. Additionally, September 2012 the VA received medical expense evidence that prompted a rating decision on January 2013. Finally, the January 2013 rating decision references evidence received in December 2011. All of this evidence is new and material evidence and it was all received within one year of the September 2011 rating decision. The evidence is material because it verifies that certain expenses are medical and deductible. Thus under 38 C F R. §§ 3.156(b) and 3.400(q) when new and material evidence is submitted within the appeal period (within one-year of the rating decision) the effective date will be as though the former decision had not been rendered. The full amount of deduction is $2,735 per month total income for this period has never exceeded $12,000. Therefore, [the appellant] is entitled to the full pension amount from August 2010 to the present. An April 2013 Community or Facility Expense Statement indicated that the facility where the surviving spouse lived was not Medicaid eligible. The services received there were considered to be needed indefinitely. The services provided were: transportation to medical appointments; meal preparation and individual delivery if required; house cleaning services; supervisory staff on-site to respond to emergencies; staff assistance continually available for physiological or psychological emergencies. In November 2014, the Board remanded this case for purpose of obtaining complete information regarding the surviving spouse's continuing receipt of Social Security Administration benefits, in addition to an accounting of the Medicare Part B benefits due. An updated medical expense report from January 2015 indicated annual medical expenses for year 2013 of approximately $750. For year 2015 that amount was about $350. Prior medical expense forms had indicated expenses of about $1,600 in year 2010; $2,600 in year 2011; $10,700 in 2012 (to include that spent for assisted living). In another updated expense report, from September 2015, the surviving spouse indicated monthly expenses as follows: housing $771; food $300; clothing $100; utilities $250; rental insurance $20. Further indicated was the large or unusual hospital or medical expense of $10,400, this originating from the fact that the surviving spouse's daughter was paid the $200 per week to assist with daily activities and medical care. (The actual amount disbursed in furtherance of the latter arrangement was later clarified to be a lower amount.) By September 2015 correspondence, the appellant's attorney provided additional argumentation in support of the claim, indicating that apparently the appellant's savings account had already been depleted, pursuant to medical care. Moreover, according to the attorney, VA was erroneously utilizing a figure of $1,600 additional income received for purposes of calculating pension entitlement, when in fact this was a one-time disbursement received in year 2012, with no recurring disbursement. Further listed was as follows, the surviving spouse received SSA income, annually, for year 2012, $11,089; 2013, $11,218; 2014, $11,376; 2015, $11,568. Medicare premiums consisted of, for year 2012, $1,894; 2013, $2,062; 2014, $2,158. Medical expenses at Haywood Estates, were for year 2010, $13,675; 2011 through 2013, $32,820; 2014, $30,085. Also more recently indicated, the surviving spouse routinely paid various expenses to her daughter for aid and attendance as qualified medical expenses, and therefore under VA law reduced countable income. The basic care services provided included meal preparation; assistance with grooming, hygiene and shopping; dispensing of medications; remaining on call seven days a week (24/7) for medical emergencies; monitoring the appellant's physical and mental condition and nutritional needs on a regular basis; provide transport to healthcare providers. The services were to continue for the lifetime of the recipient. The appellant indicated having paid $200 monthly from April 2015 to the present. In all there was $2,800 paid in 2015 (this lower amount because the surviving spouse could not afford to pay costs for every week); $6,220 in 2016; $1,000 so far in 2017. There were financial records later provided documenting this arrangement, indicated to show electronic transfer of the funds to the surviving spouse's daughter's banking account. By November 2015 Supplemental Statement of Case (SSOC), the RO continued denial of the claim for higher level of nonservice-connected pension, further notating that while it was averred by documentation that the surviving spouse contracted with her daughter for daily life assistance, there were no payment records. Analysis of Claim for Increased Pension In determining nonservice-connected death pension entitlement, the primary theory raised is whether there are fully reimbursable medical expenses based on staying within the above-referenced assisted living facility. Another issue more recently identified, that concerning countable income in the first instance, will be briefly addressed further below. Preliminarily, the appellant and her attorney in this matter postulate the assisted living facility arrangement as being a reimbursable medical expense, regarding which there may be obtained reduction in countable income, thereby entailing an increase in amount of pension. For guidance, current applicable provisions of the VA Adjudication Procedure Manual, M21-1, are discussed. Pursuant to the Adjudication Manual, under V.iii.1.G.2.a (February 2, 2017) the unreimbursed medical expenses paid by a claimant (or by a Veteran's spouse for Veterans awards) may be used to reduce the claimant's countable income. This reduction must take into account a 5 percent deductible. See M21-1 Manual, V.iii.1.G.2.b. Common allowable medical expenses include: nursing services for medical care, including nurse's board paid by claimant. See M21-1, V.iii.1.G.2.c. For the purposes of the medical expense deduction, a nursing home is any facility that provides extended term inpatient medical care. See M21-1, V.iii.1.G.3.a. An Assisted Living Facility (ALF) means a facility designed to assist people who need help with daily activities. See M21-1, V.iii.1.G.3.b. An Independent Living Facility (ILF) means a facility where people can generally live independently, and may or may not need help with daily activities. See M21-1, V.iii.1.G.3.c. It is important to know the type of facility (nursing home, ALF, ILF, or other) for which a claimant is claiming medical expenses. If the situation is unclear, then the facility in question may be called. V.iii.1.G.3.d. If a claimant claims room and board expenses in an ILF or another facility that does not qualify as a nursing home or ALF, then custodial care must be reviewed. See M21-1, V.iii.1.G.3.e. Custodial care means regular supervision because a person with a physical, mental, developmental, or cognitive disorder requires care or assistance on a regular basis to be protected from hazards or dangers incident to his or her daily environment, or assistance with two or more activities of daily living (ADLs). Custodial care differs from skilled nursing care. Skilled nursing care is the provision of services and supplies that can only be given by or under the supervision of a skilled or licensed health professional. See Id. Under M21-1, V.iii.1.G.3.f., ADLs are basic self-care activities, consisting of: bathing or showering; dressing; eating; getting in or out of bed or a chair, etc. ADLs do not include Instrumental Activities of Daily Living (IADLs). IADLs are activities other than basic self-care that are needed for independent living. Examples of IADLs include shopping; food preparation; housekeeping; laundering; handling medication, and using the telephone. Moreover, pursuant to M21-1, V.iii.1.G.3.l ("Medical Expense Deduction for ALF Fees"), if a claimant or relative is maintained in an ALF because the person needs to live in a protected environment, all unreimbursed fees paid to the ALF for room-and-board, custodial care, and medical or nursing care are deductible expenses, as long as: (1) a licensed physician certifies that the person has a medical condition that makes such a level of care necessary, or (2) VA has determined the person is entitled to the A&A or housebound allowance. Moreover, under M21-1, V.iii.1.G.3.m, unreimbursed fees paid for room and board for pension claimants or relatives receiving custodial care in ILFs (or any other facility that is not a nursing home or assisted living facility) may be considered a deductible expense. It is required that a physician has determined that the individual in question needs to be within a protected environment. Reviewing the evidence pertinent to this question, the Board is mindful of the applicable law and regulations as set forth by the above detailed policies, and whereas there is some indication of substantial retained functional capacity of the surviving spouse in this matter, in all reasonable likelihood, a higher pension award is indeed warranted. The Board grants this claim, finding that whereas Haywood Estates is unequivocally an Independent Living Facility (ILF) by its own statement and Regional Office factual inquiry, nonetheless, the appellant very likely has and has had for several years a status of "custodial care" for VA purposes. Clearly, since 2011 the appellant has required in addition to her independent living arrangement the third-party assistance with various activities of daily living (barring a few years interval up until 2015, again, where there was no contractual arrangement for such services, per se). There have been at minimum, two different categories of ADLs assisted by a third-party provider, most recently through intervention an reasonably proven by limited financial arrangement with the appellant's daughter. Therefore, applying the standard as set forth in VA's policies, there is sufficient proof that the appellant's residence at Haywood Estates is Independent Living, which indeed it is. For the patently limited and specific purpose of additional pension benefits she may receive, however, and as the evidence at minimum corroborates there is clearly a dual medical purpose served her of "custodial" care. Therefore, the Board grants this claim. Indeed, the Board is under no obligation to apply VA's benefit of the doubt doctrine to a matter of pension entitlement, given absence of a compelling factual medical question, but all the same the Board has undertaken here to apply the pertinent VA manual provisions in a literal yet ultimately manner nominally favorable to consideration of appropriate recovery. Given further, that the inclusion of the appellant's ILF costs as a reimbursable medical expense is amounts to greater than monthly income under any reasonable calculation, the result is that the appellant may receive the maximum pension allowable by law, that specified by the MAPR rate for each year. The remaining questions involving determination of the precise amount of monthly income as determined by exact Social Security Administration benefits, and/or further reimbursable Medicare Part B expenses, become moot. The appeal is therefore granted as to the claim regarding the higher rate of pension. ORDER The claim for a higher monthly non-service connected death pension payment is granted, to the extent indicated herein. ____________________________________________ D. Martz Ames Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs