Citation Nr: 18149565 Decision Date: 11/09/18 Archive Date: 11/09/18 DOCKET NO. 16-15 786A DATE: November 9, 2018 ORDER Entitlement to payment or reimbursement of unauthorized medical expenses incurred during a non-VA hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015, is GRANTED (with the exception of any copayment or deductible or coinsurance owed by the Veteran, and with the exception of the amount already partially covered by his health insurance plan - Medicare Part A). FINDINGS OF FACT 1. The Veteran was hospitalized for a nonservice-connected diverticular GI bleed and atrial fibrillation at a private hospital – Flagler Hospital from September 13, 2015 through September 14, 2015. This constituted a “medical emergency” and a VA facility was not feasibly available at the time. 2. The Veteran has partial health insurance coverage - Medicare Part A. His Medicare Part A appears to have covered a portion of the medical expenses and costs for the Veteran’s private hospitalization from September 13, 2015 through September 14, 2015 for his diverticular GI bleed and atrial fibrillation. The Veteran does not have coverage under a health-plan contract that would fully extinguish his medical liability for the emergency hospitalization costs. The VA is the payer of last resort for these costs. CONCLUSION OF LAW The criteria are met for payment or reimbursement of unauthorized medical expenses incurred during a non-VA hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015. 38 U.S.C. § 1725, 5107 (2012); 38 C.F.R. §§ 17.1001, 17.1002, 17.1005 (2017); Staab v. McDonald, 28 Vet. App. 50 (2016). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran had active duty service in the U.S. Army from March 1968 to January 1971. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a December 2015 decision by the Department of Veterans Affairs (VA) North Florida / South Georgia Veteran’s Health System in Gainesville, Florida. This appeal was processed using both a paper-based claims file and an electronic Veterans Benefits Management System (VBMS). VA’s Duty to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), in part, describes VA’s duties to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (2012); Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, Pub. L. No. 112-154, §§ 504, 505, 126 Stat. 1165, 1191-93; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2017). In Beverly v. Nicholson, 19 Vet. App. 394, 403-04 (2005), although not explicitly stated, the U.S. Court of Appeals for Veterans Claims (Court) implied the VCAA is applicable to a Chapter 17 claim, but then held that the failure to comply with the VCAA notice requirements in that case constituted non-prejudicial error. To the extent the VCAA is applicable to the instant medical expense reimbursement claim, the Board has considered its provisions. However, in the decision below, the Board has granted the Veteran’s claim for payment or reimbursement of unauthorized medical expenses. The Veteran’s health insurance coverage through Medicare Part A, even in part, is not a bar to payment or reimbursement from VA. Therefore, the benefits sought on appeal have been granted in full. Accordingly, regardless of whether the notice and assistance requirements have been met with regard to this issue, no harm or prejudice to the Veteran has resulted. See, e.g., Bernard v. Brown, 4 Vet. App. 384 (1993); VAOPGCPREC 16-92. Medical Expense Reimbursement On Sunday, September 13, 2015, the Veteran was hospitalized at Flagler Hospital in St. Augustine, Florida, at around 8:39am. This is a private facility. The Veteran was hospitalized for complaints of rectal bleeding with sudden onset. He also had diarrhea. The symptoms were worsening that morning. An (EKG) showed atrial fibrillation as well. The diagnoses were recurrent diverticular bleeding, chronic atrial fibrillation, and acute blood loss anemia secondary to gastrointestinal bleeding. He also exhibited hypotension. He received “critical care” treatment. He remained hospitalized through the next day, September 14, 2015, at which time he was discharged. (The Veteran ended up returning to Flagler Hospital for further hospitalization on September 16, 2015 to September 18, 2015, for GI complications related to the earlier hospitalization, but these costs were covered by VA. In other words, they are not in dispute here). The Veteran is not service-connected for the diverticulitis or atrial fibrillation. Thus, there is no dispute that his private hospitalization was for a nonservice-connected disorder. The Veteran was 67 years of age at the time of the private hospitalization. The Veteran had health insurance through Medicare Part A at the time of his private hospitalization. See February 2018 VHA clinical tracking records. It appears his Medicare Part A health insurance covered some, but not all, of his private hospitalization expenses from September 13, 2015 through September 14, 2015. He has submitted an invoice listing the outstanding amount he owes of $1,260. The total cost of his private hospitalization was $12,465.30, but it appears much of this amount was adjusted or already paid. When a veteran receives treatment at a non-VA facility without prior authorization, such as the case here, there are two statutes that allow for claimants to be paid or reimbursed for the medical expenses incurred for that treatment, specifically 38 U.S.C. § 1728 and 38 U.S.C. § 1725. Application of either statute is generally dependent on whether the Veteran has an adjudicated service-connected disability. In the instant case, because the private hospitalization in question from September 13, 2015 through September 14, 2015, was rendered for a nonservice-connected disability, the Veteran is not eligible for payment or reimbursement of unauthorized medical expenses incurred at a non-VA facility for a service-connected disability under 38 U.S.C. § 1728(a). In fact, the Veteran is not service-connected for any disabilities by VA. There is also no evidence or allegation he is participating in a vocational rehabilitation program under 38 U.S.C. Chapter 31, or that he had a total disability permanent in nature resulting from service-connected disabilities, or that his nonservice-connected problems were associated with and aggravating service-connected disabilities, which in certain instances might have qualified him under 38 U.S.C. § 1728. See also 38 C.F.R. § 17.120(a). Consequently, the only possible route to entitlement to unreimbursed medical expenses in this case stems from 38 U.S.C. § 1725 – the Veterans Millennium Health Care and Benefits Act. Pursuant to the Veterans Millennium Health Care and Benefits Act, payment or reimbursement of non-VA emergency medical services for nonservice-connected disorders for Veterans without insurance is available if certain conditions are met. 38 U.S.C. § 1725 (2012); 38 C.F.R. §§ 17.1000-17.1008 (2017). The Veteran has requested reimbursement in full for his unauthorized medical expenses for his private hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015. It is undisputed this private hospitalization from September 13, 2015 through September 14, 2015, was rendered in a “medical emergency” of such a nature that a prudent layperson would have reasonably expected that delay in seeking immediate medical attention would have been hazardous to life or health. It is also undisputed the nearest VA facilities were not feasibly available on September 13, 2015. In addition, stabilization is not at issue because the Veteran was at Flagler Hospital for two days in critical condition. It would not have been prudent to transfer him to the VAMC in Gainesville, Florida. Moreover, it appears the Veteran has met nearly all of the substantive and administrative conditions for payment or reimbursement of nonservice-connected medical care listed under 38 C.F.R. § 17.1002(a)-(h) (2017). Notably, VA has never disputed that the Veteran’s non-VA hospitalization from September 13, 2015 through September 14, 2015 was for “emergency treatment.” See 38 U.S.C. § 1725(f)(1). However, the agency of original jurisdiction (AOJ) still denied the Veteran’s unauthorized medical expenses claim on appeal. The basis for the denial was that the Veteran had health insurance coverage through Medicare Part A, which provided partial coverage for some of the Veteran’s medical expenses associated with his private hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015. The VA determined that his health care plan contract with Medicare Part A covered a portion of his medical expenses. Thus, his Medicare Part A coverage was a bar to eligibility for reimbursement under 38 U.S.C. § 1725 and 38 C.F.R. § 17.1002(f) (2015). Upon review of the evidence, the Board finds that the requirements for payment or reimbursement of unauthorized medical expenses incurred during a non-VA hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015, under 38 U.S.C. § 1725, are met. The AOJ’s determination is reversed and the appeal is granted. Historically, VA has denied claims when a veteran had any health insurance coverage - even if that coverage only paid for a portion of a patient’s bills - based on language in VA’s regulations specifically indicating that to be eligible for repayment or reimbursement, the veteran must not have any coverage under a health plan contract (such as Medicare or from a private health insurance company) for reimbursement or payment, in whole or in part, for emergency treatment. See 38 C.F.R. § 17.1002(f) (2014). The term “health-plan contract” includes an insurance policy or contract or similar arrangement under which health services for individuals are provided or the expenses of such services are paid. 38 U.S.C. § 1725(f)(2)(A); 38 C.F.R. § 17.1001(a)(1). In other words, the Veteran’s health insurance through Medicare Part A, is one of the enumerated “health-plan contracts.” Thus, historically, even if a veteran’s health care plan covered only a small portion of his unauthorized medical expenses, the veteran was barred from payment or reimbursement from VA for the remaining medical expenses not covered by health insurance. However, in April 2016, the Court of Appeals for Veterans Claims (Court) issued a precedential decision in Staab v. McDonald, 28 Vet. App. 50, 55 (2016). In Staab, the Court specifically examined the language of 38 C.F.R. § 17.1002(f), and found the version of this regulation in effect at that time to be invalid, as being incongruous with the intention of the applicable statute - 38 U.S.C. § 1725. The Court found it clear from the plain language of 38 U.S.C. § 1725(b)(3)(B) that it was Congress’s intent to reimburse a veteran for that portion of expenses not covered by a health-plan contract, to include Medicare, when the amount covered by the third party was less than total. The Court determined that since the implementing regulation, 38 C.F.R. § 17.1002(f), did not execute the language of the statute or the intent of Congress, it is “invalid and will be set aside by the Court.” The Court noted that 38 C.F.R. § 17.1002(f) was “wholly inconsistent with” the plain meaning of § 1725 and Congressional intent that veterans be reimbursed for portion of their emergency medical costs that was not covered by a third-party insurer and for which they were otherwise personally liable. Id. Specifically, the applicable parts of the governing statute in the present case, 38 U.S.C. § 1725(b)(3)(B) and (C), state that a veteran is personally liable for emergency treatment if the veteran has no entitlement to care or services under a health-plan contract or has no other contractual or legal recourse against a third party that would, in whole, extinguish such liability to the provider. Simply stated, reimbursement is prohibited only if the health-plan contract wholly extinguishes the Veteran’s liability. In addition, the implementing VA regulation (38 C.F.R. § 17.1002(f)), was recently amended in January 2018 to reflect the Court’s holding in Staab. See 83 Fed. Reg. 974 (Jan. 9, 2018). In fact, VA amended 38 C.F.R. §§ 17.1002, 17.1003, and 17.1005 to expand eligibility for emergency treatment and / or emergency transportation to include veterans who receive partial payment from a health-plan contract, which includes this Veteran. Reimbursement remains prohibited only if the health-plan contract wholly extinguishes the Veteran’s liability. Under the amended version of 38 C.F.R. § 17.1002(f), payment or reimbursement under 38 U.S.C. 1725 for emergency treatment will be made if a Veteran does not have coverage under a health-plan contract that would fully extinguish the medical liability for the emergency treatment. The interim final rule became effective on January 9, 2018 and applies to all claims pending on or after April 8, 2016, which includes the Veteran’s particular claim. See 83 Fed. Reg. 974 (Jan. 9, 2018) (to be codified at 38 C.F.R. pt. 17). Therefore, the amended regulation allows for payment or reimbursement through VA for the balance of medical expenses that remains when a third-party payer would extinguish only part of a veteran’s liability. See also Pub. L. No. 111-1376, 123 Stat. 3495 (2010). The VA is the payer of last resort. As discussed above, the Veteran now meets all the eligibility requirements for repayment by VA of the medical expenses he incurred during a private hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015 for his diverticulitis and GI bleeding. The Court’s recent decision in Staab confirms that even though the Veteran had health insurance coverage through Medicare Part A, and such coverage paid for a portion (but not all) of his emergency care bill, he is not barred from payment or reimbursement of the balance of his hospital bills that remained unpaid after Medicare made its payment. Simply stated, partial coverage by a private health insurance company or by Medicare no longer renders a claimant ineligible for reimbursement under 38 U.S.C. § 1725. Accordingly, the Board finds that payment or reimbursement of unauthorized medical expenses incurred during a non-VA hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015, is warranted. 38 U.S.C. §§ 1725, 5107. In particular, VA should cover all the unreimbursed costs associated with the Veteran’s private hospitalization at Flagler Hospital from September 13, 2015 through September 14, 2015. However, on a side note, 38 U.S.C. § 1725(c)(4)(D) does provide for certain payment limitations by VA, and those payment limitations were not set aside by the Court in Staab. In this vein, 38 U.S.C. § 1725(c)(4)(D) states that reimbursement by VA will not be made “for any copayment or similar payment that the veteran owes the third party or for which the veteran is responsible under a health-plan contract.” In addition, the amended implementing regulation, 38 C.F.R. § 17.1005(a)(5), states that “VA will not reimburse a veteran under this section for any copayment, deductible, coinsurance, or similar payment that the veteran owes the third party or is obligated to pay under a health-plan contract.” See 83 Fed. Reg. 974 (Jan. 9, 2018) (to be codified at 38 C.F.R. pt. 17). Thus, to the extent the Veteran in the present case owed a copayment or deductible or coinsurance to his health care insurance plan (Medicare Part A), VA is barred by law and cannot reimburse the Veteran for these particular amounts owed. Stated another way, VA is prohibited from paying the Veteran’s copayment or coinsurance or deductible payments to Medicare for which the Veteran is responsible under his health-plan contract, for services provided during his private hospitalization with Flagler Hospital from September 13, 2015 through September 14, 2015. Finally, payment or reimbursement of such private medical expenses is generally limited to no more than 70 percent of the amount payable under the applicable Medicare fee schedule for the treatment in question. 38 C.F.R. § 17.1005(a). As such, when implementing the award in the present case, the VAMC should consider these limitations on payment or reimbursement. DAVID L. WIGHT Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD P.S. Rubin, Counsel