93 Decision Citation: BVA 93-08809 Y93 BOARD OF VETERANS' APPEALS WASHINGTON, D.C. 20420 DOCKET NO.: 92-08 579 ) DATE: ) ) ) ) ISSUES 1. Whether the veteran's improved pension benefits were properly reduced effective from December 1989, to include the issue of whether an overpayment was properly created. 2. Whether the date of the reduction of the veteran's improved pension benefits on January 1, 1991 due to excessive net worth was proper, to include the issue of whether an overpayment was properly created. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD Jeffrey A. Pisaro, Associate Counsel INTRODUCTION The veteran had active service from March 1951 to March 1953. The appellant is the veteran's conservator. This matter came before the Board on appeal from a September 1991 decision of the Wichita, Kansas, Regional Office's Committee on Waivers (hereinafter RO). The notice of disagreement was received in September 1991, the statement of the case was issued in January 1992, and the substantive appeal was received in February 1992. The case was received and docketed at the Board in June 1992. Written argument on appeal was submitted in July 1992 by the American Legion, which has represented the appellant throughout his appeal. CONTENTIONS OF APPELLANT ON APPEAL The appellant contends that the RO erred by determining that the veteran's improved pension benefits were properly reduced in December 1989 and by determining that the proper effective date for termination of benefits was January 1, 1991. It is asserted that the entire monthly amount paid to Green Acres, the facility where the veteran lives, should be deducted from countable income as a medical expense, and that the RO unilaterally delayed implementation of the termination date of benefits to July 1991, which should not be assessed against the appellant. DECISION OF THE BOARD In accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991), following review and consideration of all evidence and material of record in the veteran's claims file, and for the reasons and bases hereinafter set forth, it is the decision of the Board that the overpayments of the veteran's benefits between December 1989 and November 1990, and from January 1, 1991 to June 30, 1991 were due to sole VA error and the overpayments were not properly created. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the appellant's appeal has been obtained by the RO. 2. Claimant fully reported the fact that the veteran was living at a residential facility, without knowledge that the veteran's care did not qualify him for patient status. 3. Claimant reported the veteran's net worth in December 1990; the RO took no action until June 1991. 4. Claimant had no knowledge that the veteran was not entitled to benefits from January 1, 1991. CONCLUSIONS OF LAW 1. The overpayment of improved pension benefits from December 1, 1989 to November 30, 1990 was due to sole VA error and was not properly created. 38 U.S.C.A. §§ 5107, 5112(b)(10) (West 1991); 38 C.F.R. §§ 3.1(z), 3.272(g), 3.500(b)(2) (1992). 2. The delay in taking action in terminating improved pension benefits which created an overpayment from January 1, 1991 to June 30, 1991 was sole VA error and thus the overpayment was not properly created. 38 U.S.C.A. §§ 5107, 5112(b)(10) (West 1991); 38 C.F.R. § 3.500(b)(2) (1992). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The appellant's claims are well grounded within the meaning of 38 U.S.C.A. § 5107(a). That is, we find that he has presented claims which are plausible. We are also satisfied that all relevant facts have been properly developed, and that no further assistance is required to comply with the duty to assist under 38 U.S.C.A. § 5107(a). By rating action in June 1973, the veteran was granted non-service connected pension benefits; by rating action in September 1975, the veteran was determined to be incompetent effective from August 1975. The appellant is the veteran's guardian and conservator. By rating action in December 1983, it was determined that the veteran was entitled to special monthly pension benefits based on the need for regular aid and attendance. In a statement received in November 1982 from the co- administrator of Green Acres, it was indicated that the veteran had been a resident since August 1982. An October 1982 certificate of nursing home status from the co-administrator of Green Acres indicated that the facility was a nursing or convalescent home, and that the veteran had required nursing care since August 1982. A further statement from the co-administrator of Green Acres in December 1982 indicated that Green Acres was a licensed residential care facility, that the veteran needed supervision for meals, hygiene and medications, and that the facility had a registered nurse and licensed practical nurse on duty or call 24 hours a day. By amended award letter in February 1984, the conservator was informed that veteran had been granted pension benefits. By letter in March 1986, the RO notified the appellant that although a nursing home certificate had been submitted, the certificate indicated that the veteran was receiving residential not nursing home care for which some medical expenses may be deductible. A February 1989 report of contact between the RO and Green Acres showed that Green Acres was an approved nursing home and that the veteran received only residential care. The appellant submitted an eligibility verification report in December 1990, which reflected that $4,020 was paid to Green Acres for the period from December 1, 1989 to November 30, 1990. A corpus of estate determination in June 1991 established that the veteran's estate totalled $40,166, and that his monthly income exceeded expenses by almost $40 a month. By award letter in May 1991, the appellant was notified that an overpayment had been created for the period from December 1, 1989 to November 30, 1990. The basis for the overpayment was the fact that the entire $4,020 for expenses paid to Green Acres between December 1989 and November 1990 should not have been counted as medical expenses. In June 1991, the veteran was notified of a proposed termination of improved pension benefits, effective from January 1, 1991, due to excessive net worth. In August 1991, the veteran's pension benefits were terminated, beginning from January 1, 1991. There are two issues before us on appeal. As to the first issue, the appellant contends that the veteran's care at Green Acres constituted medical care so that the entire $4,020 should be deductable as medical expenses. 38 C.F.R. § 3.272(g) provides that there will be excluded from the amount of an individual's annual income any unreimbursed amounts which have been paid within the 12- month annualization period for medical expenses. The crux of the appellant's claim is that the veteran was receiving nursing home care at Green Acres, thereby allowing the entire monthly payment to that facility to be excluded from income under 38 C.F.R. § 3.272(g). 38 C.F.R. § 3.1(z) states that nursing home means any extended care facility which is licensed by a State to provide skilled or intermediate-level nursing care. M21-1, Part IV, 16.31(b)(1)(a) and (b) further clarifies this issue. It states that a medical expense deduction should be allowed for nursing home fees if a responsible official of the nursing home certifies that the disabled person is a patient (as opposed to a resident) of the nursing home. It states further that the definition of a "nursing home" for purposes of the medical expense deduction is not the same as the definition of nursing home set out in 38 C.F.R. § 3.1(z). A nursing home for purposes of the medical expense deduction is any facility which provides extended term inpatient medical care. In this case, the record contains multiple statements from Green Acres describing the nature of the services it offered and the type of care accorded to the veteran. Statements from Green Acres in March 1986 and February 1989 clearly demonstrated that the veteran was receiving residential and not patient care. As a result, medical deductions were allowable only for payments specifically made for medical expenses, as opposed to the entire monthly payment. Under applicable criteria, the effective date of a reduction or discontinuance of benefits by reason of an erroneous award based soley on administrative error or error in judgment shall be the date of last payment. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2). In order for the Board to determine that the overpayment was not properly created, it must be established that the action of the VA was the sole reason for the overpayment. On the December 1990 eligibility verification report, the appellant reported the entire $4,020 per year as medical expenses. Given the statutory nature of this deduction, and the distinctions accorded in M21, we find that the appellant's statements were reasonable, although mistaken. On the other hand, the RO had received clear and unequivocal evidence from Green Acres that the veteran was a resident, not a patient. The clear nature of the veteran's status at Green Acres, coupled with the length of time that he had been at that facility, leads us to believe that the RO should have immediately recognized that the entire $4,000 was not an allowable medical deduction; thus, the preponderance of the evidence weighs in favor of the conclusion that the overpayment of benefits between December 1989 and November 1990 was due to sole VA error. As the overpayment for the period in question was due solely to VA error, the effective date of termination must be the date of last payment, and there is no overpayment for this period which would be recoverable. Turning to issue number two, the appellant has conceded that the veteran's net worth was excessive and that improved pension benefits were properly terminated. What is contested, however, is the date of termination. The appellant informed the RO that the veteran's estate exceeded $40,000 and that monthly net income exceeded monthly net expenses on the December 1990 eligibility verification report. Nonetheless, the RO did not act on this information until June 1991, yet the date of termination was assessed from January 1, 1991. The appellant contends that the six month lag period was due solely to VA's dilatory processing. We agree. In fact, the record demonstrates no reason for the long delay between the submission of the eligibility verification report in December 1990 and the RO's action in June 1991. The applicable criteria as to the proper creation of the overpayment has been stated above under the provisions of 38 U.S.C.A. § 5112(b)(10) and 38 C.F.R. § 3.500(b)(2). In December 1990, the appellant had every reason to believe that all net worth considerations would be handled in a reasonable time frame. Thus, we conclude that the six month delay was sole VA error, and therefore, there is no overpayment subject to recovery ORDER As the overpayments of improved pension benefits for the periods from December 1989 to November 1990 and from January 1, 1991 to June 30, 1991 were not properly created, the appeal is granted. BOARD OF VETERANS' APPEALS WASHINGTON, D.C. 20420 D. W. DATLOW, M. D. I. S. SHERMAN C. W. SYMANSKI (Continued Next Page) NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C. § 7266 (1992), a decision of the Board of Veterans' Appeals granting less than the complete benefit, or benefits, sought on appeal is appealable to the United States Court of Veterans Appeals within 120 days from the date of mailing of notice of the decision, provided that a Notice of Disagreement concerning an issue which was before the Board was filed with the agency of original jurisdiction on or after November 18, 1988 (see § 402 of the Veterans' Judicial Review Act (Pub. L. 100-687)). The date which appears on the face of this decision constitutes the date of mailing and the copy of this decision which you have received is your notice of the action taken on your appeal by the Board of Veterans' Appeals.