Citation Nr: 21072199 Decision Date: 12/03/21 Archive Date: 12/03/21 DOCKET NO. 13-28 519A DATE: December 3, 2021 ORDER The debt owed for prescription copayments from November 2011 through July 2013 of $315.49 is the proper calculation. A waiver of recovery of an overpayment for prescription copayments from November 2011 through July 2013 of $315.49 is granted. FINDINGS OF FACT 1. The debt owed for prescription copayments from November 2011 through July 2013 of $314.59 was properly calculated as the total debt owed for prescription copayments and is a valid debt. 2. A waiver of recovery of the overpayment of compensation and pension benefits in the amount of $315.49 is warranted based on the standard of equity and good conscience. CONCLUSIONS OF LAW 1. The debt of $314.59 for prescription copayments from November 2011 through July 2011 is the proper calculation and is a valid debt. 38 U.S.C. § 5302; 38 C.F.R. §§ 17.101, 17.102, 17.110. 2. The criteria for a waiver of recovery of the overpayment of compensation and pension benefits in the amount of $315.49 has been met. 38 U.S.C. § 5107, 5302; 38 C.F.R. §§ 1.963, 1.965. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active duty in the Army from September 1969 to September 1971. The appeal was previously before the Board of Veterans' Appeals (Board) in May 2015, at which time the Board determined that the Veteran was not copay-exempt, and that VA was required to charge him an $8.00 copayment for his prescription medication under its prescription billing policy (as revised on March 18, 2011). The Veteran filed a Motion for Reconsideration of this decision with the Board. This Motion for Reconsideration was denied. The Veteran appealed the decision to the United States Court of Appeals for Veterans Claims (Court), which affirmed the Board's decision. The Veteran testified in an October 2018 hearing before the undersigned. He stated that he continued to disagree with the Board's reasoning on VA's reimbursement agreement with private insurers. He also asserted that he was uncertain of the total debt owed and that regardless of the total debt amount, he requested a waiver. Subsequently, in August 2019, the Board remanded the appeal for further evidentiary development and readjudication. A supplemental statement of the case (SSOC) was issued by Mid-Atlantic Consolidated Patient Accounts Center (CPAC) in September 2020. Finally, the Veteran has requested an additional Board hearing. However, as the Veteran's claim for a waiver of debt owed has been granted, the hearing request is moot. Debt Validity The Veteran contests the validity of the debt for pharmacy copayments from November 2011 through July 2013. The issue of the validity of a debt is a threshold determination that must be made in a benefits overpayment debt collection matter. Schaper v. Derwinski, 1 Vet. App. 430 (1991). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C. § 5302; 38 C.F.R. § 1.962. In order for the Board to determine that an overpayment was not properly created, thereby invalidating the debt, the record must establish the Veteran was legally entitled to the benefits in question or if not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid compensation benefits. The evidence demonstrates that the Veteran was legally entitled to VA healthcare benefits and he has not challenged the entitlement. As determined by the Board and affirmed by the Court, the Veteran was not eligible for co-pay exempt status and VA was required to charge him a co-payment. Secondly, the Veteran has challenged his awareness of the debt. In fact, based on the Veteran's frequent correspondence and interaction with the appeals system for this claim, he was clearly aware of the existence of the debt owed and therefore, the overpayment cannot be considered an administrative error. Finally, the evidence includes an account profile listing the Veteran's pharmacy copayments from June 2011 to July 2013. Here, it is shown that the total debt owed and subsequently collected was $315.49, which is substantially consistent with the amount stated by Mid-Atlantic CPAC of $315.48 in the SSOC. The evidence shows that the debt is valid and was not created due to VA error. As such, the Board finds that the debt of $315.49 is valid. Waiver The Veteran seeks a waiver of debt owed for pharmacy copayments from November 2011 through July 2013. As stated above, the evidence shows that the creation of debt (in the sum of $315.49) was properly calculated and is a valid debt. Recovery of overpayment of any benefits made under laws administered by VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver, and recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. § 1.963(a). However, if there is an indication of fraud, misrepresentation, or bad faith in the creation of the overpayment, waiver of the overpayment is automatically precluded, and further analysis is not warranted. See 38 U.S.C. § 5302(a); 38 C.F.R. §§ 1.962, 1.963, 1.965. The Court of Appeals for Veterans Claims (Court) has defined bad faith as "a willful intention to seek an unfair advantage." Richards v. Brown, 9 Vet. App. 255, 257-58 (1996). The provisions of 38 C.F.R. § 1.965(b)(2) define bad faith as an unfair or deceptive dealing by one who seeks to gain thereby at another's expense. Thus, a debtor's conduct in connection with a debt arising from participation in a VA benefits/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the government. The standard of "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "equity and good conscience" means arriving at a fair decision between the obligor and the government. 38 C.F.R. § 1.965(a). In April 2013, the Committee on Waivers and Compromises (COWAC) denied the Veteran's waiver request, in part, because he refused to submit a completed VA Form 5655 and VA Form 21-4138, which are each required to adjudicate his claim. The Veteran has continued to refuse to submit these forms and adjudication cannot occur without them. Here, in the Board's view, the Veteran's refusal to acknowledge the debt incurred is not one based on a willful intent to seek an unfair advantage, but rather to a misguided understanding of the law, and an apparent refusal to accept the Board's prior decision, which was subsequently affirmed by the Court. In the end, recovering such a small monetary amount appears to be an exercise in futility and, given the number of years since the start of the appeal, any additional development or testimony on the matter is likely futile and is a poor use of resources. Therefore, while it is already well established that the debt was correctly created, the Board must arrive at a fair decision between the Veteran and VA by applying the standard of equity and good conscience, and therefore grants a waiver of debt owed, in the amount of $315.49, for pharmacy copayments incurred from November 2011 to July 2013. This represents a full grant of the appeal. The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303. B.T. KNOPE Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J. Lee