In September 2016, a veteran (Wolfe) received emergency care at a non-VA facility. She incurred $22,348.25 in medical expenses. A claim was filed to her health insurer for reimbursement. The insurer processed the claim, paid its allowed amount, leaving a patient balance of $2,558.54, which represented the veteran’s liability for copayments and coinsurance. Wolfe then filed a claim to the VA for reimbursement of the $2,558.54. The VA denied her claim stating the balance was non-covered in accordance with 38 C.F.R. 17.1005(a)(5). After a series of appeals, the VA upheld its initial denial, prompting Wolfe to file her first petition with the US Court of Appeals for Veterans Claims on October 30, 2018.
The primary issue in the case was the validity of 38 C.F.R. 17.1005(a)(5), which stated the VA “will not reimburse a veteran for any copayments, deductibles, coinsurance, or similar payment that the veterans owes the third party or is obligated to pay under a health-plan contract.” Ultimately, the Court agreed with Wolfe and invalidated this regulation, holding it was contrary to the clear legislative intent of 38 U.S.C. 1725. Once the Court found this regulation to be invalid, it certified a class, and also ordered the VA to readjudicate reimbursement claims that were improperly denied based on CFR 17.1005(a)(5). The Court also ordered the VA to submit a plan within 45 days of the September 9, 2019 Order detailing how the VA would notify veterans of improperly denied claims and any misstatements of law that may have been communicated to a veteran.
On October 24, 2019, the VA submitted its “Plan” as part of a response to the Court’s September 9, 2019 Order. The parties disagreed on whether the VA had properly responded to the Court’s Order (among other things) and on January 24, 2020, the Court issued another Order requiring the VA to submit an update to the Court within 14 days “outlining the steps that have been taken to comply with the Court’s September 9, 2019, order, including whether any claims have been adjudicated in compliance with that order and, if not, a proposed timeline for when adjudication will begin.” This is important language, in that it infers the VA is the responsible party for reviewing all claims that may have been erroneously denied.
On February 7, 2020, the VA submitted its “update” to the Court. Under the plan, the VA is taking affirmative steps to adjudicate previously denied claims. The first payments were made on February 5, 2020. Amazingly, the VA has only devoted two managers and four claims processors to review these claims! As is typical with the VA, speed is still not a priority at this time.
There is one major question and that is who will the VA send payment to? The provider or the veteran? There seems to be uncertainty as to how this question will be answered and it is certainly conceivable that the party who actually filed the claim may not be the party that is ultimately directly reimbursed by the VA.
VA community care providers should closely monitor new developments in this case to ensure they receive the reimbursement they deserve for the affected claims.