[Federal Register Volume 66, Number 151 (Monday, August 6, 2001)]
[Proposed Rules]
[Pages 40942-40946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19476]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 19 and 20

RIN 2900-AK91


Board of Veterans' Appeals: Obtaining Evidence and Curing 
Procedural Defects Without Remanding

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs proposes to amend the 
Appeals Regulations and Rules of Practice of the Board of Veterans' 
Appeals (Board) to permit the Board to obtain evidence, clarify the 
evidence, cure a procedural defect, or perform any other action 
essential for a proper appellate decision in any appeal properly before 
it without having to remand the appeal to the agency of original 
jurisdiction. We also propose to allow the Board to consider additional 
evidence without having to refer the evidence to the agency of original 
jurisdiction for initial consideration and without having to obtain the 
appellant's waiver. By reducing the number of appeals remanded, VA 
intends to shorten appeal processing time and to reduce the backlog of 
claims awaiting decision.

DATES: Comments must be received on or before September 5, 2001.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1154, Washington, DC 20420. Fax comments to: 
(202) 273-9289. E-mail comments to: [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK91.'' All comments received will be available for public 
inspection in the Office Regulations Management, Room 1158, between 
8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Steven L. Keller, Acting Vice 
Chairman, Board of Veterans' Appeals ((202) 565-5978), or Michael J. 
Timinski, Attorney, Office of General Counsel ((202) 273-6327, 
Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 
20420.

SUPPLEMENTARY INFORMATION: The Board of Veterans' Appeals (Board) is 
the component of the Department of Veterans Affairs (VA) in Washington, 
DC, that decides appeals from denials of claims for veterans' benefits. 
An agency of original jurisdiction (AOJ), typically one of VA's 58 
regional offices, makes

[[Page 40943]]

the initial decision on a claim and subsequent decisions if VA receives 
additional evidence. A claimant who is dissatisfied with an AOJ's 
decision may appeal to the Board. After a claimant perfects an appeal 
to the Board, the AOJ certifies the appeal to the Board and transfers 
the record to the Board, so that the Board can decide the appeal.
    While considering an appeal, a Board member or panel sometimes 
discovers that more evidence is needed, that the current evidence must 
be clarified, or that a procedural defect must be cured for the appeal 
to be properly decided. Current regulations generally require the Board 
to remand such a case to the AOJ to perform the needed action. 
Specifically, current 38 CFR 19.9(a) requires the Board member or panel 
to remand the case to the AOJ ``[i]f further evidence or clarification 
of the evidence or correction of a procedural defect is essential for a 
proper appellate decision.'' However, Sec. 19.9(a) does not require a 
remand to clarify procedural matters before the Board, such as the 
appellant's choice of representative before the Board, the issues on 
appeal, and requests for hearings before the Board. In addition, the 
Board is currently permitted to obtain expert medical opinions in 
appropriate cases. See 38 U.S.C. 7109 (independent medical opinions); 
38 CFR 20.901(a) (opinions from the Veterans Health Administration); 38 
CFR 20.901(b) (opinions from the Armed Forces Institute of Pathology).
    When the Board remands a case for further development, the AOJ must 
undertake the action specified by the Board. 38 CFR 19.38. After 
completing that development, the AOJ must make another decision on the 
claim. Id. Unless the AOJ grants all the benefits sought or the appeal 
is withdrawn, the AOJ must issue a supplemental statement of the case, 
allow 60 days for response, and return the case to the Board for 
further appellate processing. 38 CFR 19.38, 20.302(c).
    There is another situation for which current regulations require a 
remand from the Board to the AOJ. In a number of cases, the appellant 
submits additional evidence while an appeal is pending before the 
Board. Under current regulations, the Board must allow the AOJ to 
consider the evidence first. Specifically, 38 CFR 20.1304(c) provides 
that, ``[a]ny pertinent evidence * * * accepted by the Board * * * must 
be referred to the [AOJ] for review and preparation of a Supplemental 
Statement of the Case unless this procedural right is waived by the 
appellant'' or the Board can grant the benefits sought on appeal to 
which the evidence relates. If the AOJ issues a supplemental statement 
of the case, it must also provide 60 days for response and return the 
case to the Board unless the appeal is withdrawn or resolved. 38 CFR 
19.38, 20.302(c). According to statistics maintained by VA's 
Compensation and Pension Service, as of March 31, 2001, the average 
case remains in remand status for 454 days, about 1\1/4\ years.
    VA proposes to change these procedures in two ways. First, we 
propose to amend 38 CFR 19.9 to permit the Board itself to obtain 
further evidence, clarify the evidence, correct any procedural defect, 
or perform any other action that is essential for a proper appellate 
decision, without having to remand the case to the AOJ. We intend the 
provision to encompass a broad range of actions, including, for 
example, consideration of an appeal under a change in law or a change 
in interpretation of law that has occurred while the claim or appeal 
has been pending and application of laws, interpretations, and 
precedents already existing but not applied by the AOJ. Under these 
amendments, the Board would be permitted to consider the claim without 
having to remand it to the AOJ for consideration of the matter in the 
first instance. The Board would still be permitted to remand a case 
needing further development, but would not be required to remand. As 
discussed further below, we propose procedures to assure that the 
appellant will be notified of what evidence is obtained or what law is 
being considered and have an opportunity to submit argument or 
additional evidence in rebuttal. See generally Sutton v. Brown, 9 Vet. 
App. 553, 564 (1996) (if Board intends to rely on new evidence, 
appellant has right to submit argument, comment, or additional 
evidence).
    Second, we propose to amend 38 CFR 20.1304 to allow the Board to 
consider evidence that it obtains or that is submitted to it, without 
having to refer the evidence to the AOJ for initial consideration in 
the absence of the appellant's waiver. Although we propose no change in 
the current deadline for submitting evidence to the Board, we do 
propose an exception to the requirement in current Sec. 20.1304(b) that 
good cause be shown for the Board to accept evidence after the 
deadline. Good cause would not be needed to submit evidence in response 
to notice provided by the Board that it has obtained additional 
evidence or that it intends to consider law not already considered by 
the AOJ.
    We propose these changes to reduce the number of cases remanded by 
the Board to AOJs. A reduction in the number of cases remanded could 
have two effects beneficial to claimants.
    First, it could shorten the time it takes VA to resolve an appeal. 
The Board would not have to transfer a case to an AOJ for initial 
consideration of evidence, to wait for AOJ processing to be completed, 
and to wait for the case to be transferred back to the Board. No longer 
would the Board have to delay appellate consideration while determining 
whether an appellant wants to waive initial consideration by the AOJ. 
Furthermore, in cases needing additional development, the time 
currently spent in transferring the case to the AOJ and back to the 
Board, as well as time spent by employees refamiliarizing themselves 
with the case following transfer, would be saved if the Board itself 
performed the actions needed to develop the case.
    Second, a reduction in the number of cases remanded to AOJs could 
eventually shorten claim processing time by helping VA to reduce its 
current backlog of claims. Currently, approximately 500,000 claims are 
awaiting decision in VA's regional offices. The recent enactment of the 
Veterans Claims Assistance Act of 2000, Public Law 106-475, 114 Stat. 
2096, has exacerbated the backlog. Besides requiring readjudication of 
claims not final on the date of enactment, the act provides for the 
readjudication of certain claims that had already been finally decided. 
Public Law 106-475, sec. 7, 114 Stat. at 2099. Moreover, due to the 
potential applicability of the act, the United States Court of Appeals 
for Veterans Claims has been remanding cases at an unprecedented rate. 
That court remanded 1,412 cases in fiscal year 1999. In contrast, it 
has already remanded some 1,223 cases during the first half of fiscal 
year 2001. The Board, in turn, has remanded many more cases to regional 
offices: 4,848 cases during the first half of fiscal year 2000, 
compared to 10,796 cases during the first half of fiscal year 2001.
    Having the Board develop cases itself rather than remand them will 
help relieve the immense workload pending at regional offices, giving 
them a chance to reduce the backlog. On average, the Board remands 
about 15,000 cases per year to the regional offices. Thus, this 
proposed rule could potentially prevent the backlog from increasing by 
15,000 cases each year. Once the backlog is reduced to a manageable 
size, case processing time will begin to fall.
    Under the proposed changes, some appellants will have at least one 
fewer chance for a decision by the AOJ. Because the Board would not 
have to

[[Page 40944]]

remand for development or AOJ consideration of additional evidence, in 
some cases these changes would eliminate an additional decision made by 
the AOJ. However, we believe this change would not be disadvantageous 
for claimants. The Board is fully capable of recognizing when the 
evidence establishes entitlement to a benefit and granting the benefit 
itself. Furthermore, ultimately all claimants will benefit from the 
shortened appeal processing time and reduced claim backlog.
    We are also proposing three additional changes to current 
regulations to accommodate these new procedures. First, we propose to 
amend 38 CFR 19.31, which currently requires that a supplemental 
statement of the case be furnished to an appellant if additional 
pertinent evidence is received after a statement of the case or the 
most recent supplemental statement of the case has been issued. Under 
the proposal, a new supplemental statement of the case will be required 
only if such evidence is received by the AOJ before it has certified 
the appeal and transferred the appellate record to the Board. A 
supplemental statement of the case will not be required if the Board 
obtains additional pertinent evidence on its own or if additional 
evidence is received by the AOJ after the appeal has been certified and 
transferred to the Board. We also propose to amend Sec. 19.31 to 
clarify that a supplemental statement of the case is not to be used to 
announce the AOJ's decision on an issue not previously addressed in a 
statement of the case or to respond to a notice of disagreement on a 
newly appealed issue that was not addressed in the statement of the 
case. We propose this change to help eliminate confusion on the part of 
appellants as to whether they must respond to a supplemental statement 
of the case.
    Second, we want to ensure that an appellant will receive adequate 
notice of new evidence obtained by the Board and adequate notice of law 
that the Board intends to consider but that has not already been 
considered by the AOJ. We also want an appellant to be able to respond 
to the additional evidence or law. To that end, we also propose to 
amend 38 CFR 20.903 to require the Board, if it either obtains 
pertinent evidence on its own or if it intends to consider law not 
already considered by the AOJ, to notify the appellant (and the 
appellant's representative) of the evidence or law and allow a 60-day 
period for response. This procedure would be similar to that in current 
Sec. 20.903, which applies when the Board obtains a legal or medical 
opinion in a case.
    Finally, we propose to amend 38 CFR 20.1304 to provide an exception 
to the current requirement in Sec. 20.1304(b) that good cause be shown 
for the Board to accept additional evidence more than 90 days after 
notice that the appeal has been certified and the record transferred to 
the Board. A motion demonstrating good cause would not be necessary to 
submit additional evidence in response to notice from the Board that it 
has obtained pertinent evidence pursuant to Sec. 19.9(b) or 
Sec. 19.37(b) or that it intends to rely on law not already considered 
by the AOJ. This reflects fundamental fairness and is consistent with 
court precedent. See Sutton v. Brown, above.

Proposed Effective Date

    We propose to have these amendments apply to appeals for which the 
notice of disagreement was filed on or after the effective date of 
these amendments and to appeals pending, whether at the Board of 
Veterans' Appeals, the United States Court of Appeals for Veterans 
Claims, or the United States Court of Appeals for the Federal Circuit, 
on the effective date of these amendments.

Comment Period

    Section 6(a)(1) of Executive Order 12866 indicates that, in most 
cases, a comment period for proposed regulations should be ``not less 
than 60 days.'' Nevertheless, for this rulemaking we have provided a 
comment period of 30 days, for the following reasons. This rulemaking 
primarily concerns rules of agency procedure or practice, which are not 
subject to the Administrative Procedure Act's general requirement of 
publication for notice and comment. Furthermore, prompt issuance of the 
proposed amendments is essential to one of VA's most important 
initiatives, improvement of the timeliness and efficiency of claims 
processing. The backlog of benefit claims awaiting adjudication has 
reached a critical stage and has been exacerbated by recent remands to 
ensure compliance with the Veterans Claims Assistance Act of 2000. 
Immediate action is needed to address this problem and ensure that 
needy veterans timely receive the benefits to which they are entitled. 
It is important for the final rule to be published expeditiously in 
order to begin to realize the benefits of the changes proposed.

Paperwork Reduction Act

    All collections under the Paperwork Reduction Act (44 U.S.C. 3501-
3520) referenced in this document have existing Office of Management 
and Budget approval. No changes are made in this document to those 
collections of information other than to the component in VA that 
collects this information. Under this proposal, the Board would collect 
some information that currently is collected by VA regional offices.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. This rule affects only individuals. Therefore, pursuant 
to 5 U.S.C. 605(b), this regulatory amendment is exempt from the 
initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

List of Subjects in 38 CFR Parts 19 and 20

    Administrative practice and procedure, Claims, Veterans.

    Approved: May 10, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.
    For the reasons stated in the preamble, VA proposes to amend 38 CFR 
parts 19 and 20 as follows:

PART 19--BOARD OF VETERANS' APPEALS: APPEALS REGULATIONS

    1. The authority citation for part 19 continues to read as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.

Subpart A--Operation of the Board of Veterans' Appeals

    2. Section 19.9 is revised to read as follows:


Sec. 19.9  Further development.

    (a) General. If further evidence, clarification of the evidence, 
correction of a procedural defect, or any other action is essential for 
a proper appellate decision, a Board Member or panel of Members may:
    (1) Remand the case to the agency of original jurisdiction, 
specifying the action to be undertaken; or
    (2) Direct Board personnel to undertake the action essential for a 
proper appellate decision.
    (b) Examples. A remand to the agency of original jurisdiction is 
not necessary:
    (1) To clarify a procedural matter before the Board, including the 
appellant's choice of representative before the Board, the issues on 
appeal,

[[Page 40945]]

and requests for a hearing before the Board; or
    (2) For the Board to consider an appeal in light of law, including 
but not limited to statute, regulation, or court decision, not already 
considered by the agency of original jurisdiction.
    (c) Scope. This section does not apply to:
    (1) The Board's request for an opinion under Rule 901 (Sec. 20.901 
of this chapter);
    (2) The Board's supplementation of the record with a recognized 
medical treatise; and
    (3) Matters over which the Board has original jurisdiction 
described in Rules 609 and 610 (Secs. 20.609 and 20.610 of this 
chapter).

(Authority: 38 U.S.C. 7102, 7103(c), 7104(a)).

    3. Section 19.31 is revised to read as follows:


Sec. 19.31  Supplemental statement of the case.

    (a) Purpose and limitations. A ``Supplemental Statement of the 
Case,'' so identified, is a document prepared by the agency of original 
jurisdiction to inform the appellant of any material changes in, or 
additions to, the information included in the Statement of the Case or 
any prior Supplemental Statement of the Case. In no case will a 
Supplemental Statement of the Case be used to announce decisions by the 
agency of original jurisdiction on issues not previously addressed in 
the Statement of the Case, or to respond to a notice of disagreement on 
newly appealed issues that were not addressed in the Statement of the 
Case. The agency of original jurisdiction will respond to notices of 
disagreement on newly appealed issues not addressed in the Statement of 
the Case using the procedures in Secs. 19.29 and 19.30 of this part 
(relating to statements of the case).
    (b) When furnished. The agency of original jurisdiction will 
furnish the appellant and his or her representative, if any, a 
Supplemental Statement of the Case if:
    (1) The agency of original jurisdiction receives additional 
pertinent evidence after a Statement of the Case or the most recent 
Supplemental Statement of the Case has been issued and before the 
appeal is certified to the Board of Veterans' Appeals and the appellate 
record is transferred to the Board;
    (2) A material defect in the Statement of the Case or a prior 
Supplemental statement of the Case is discovered; or
    (3) For any other reason the Statement of the Case or a prior 
Supplemental Statement of the Case is inadequate.
    (c) Pursuant to remand from the Board. The agency of original 
jurisdiction will issue a Supplemental Statement of the Case if, 
pursuant to a remand by the Board, it develops the evidence or cures a 
procedural defect, unless:
    (1) The only purpose of the remand is to assemble records 
previously considered by the agency of original jurisdiction and 
properly discussed in a prior Statement of the Case or Supplemental 
Statement of the Case; or
    (2) The Board specifies in the remand that a Supplemental Statement 
of the Case is not required.

(Authority: 38 U.S.C. 7105(d)).

PART 20--BOARD OF VETERANS' APPEALS: RULES OF PRACTICE

    4. The authority citation for part 20 continues to read as follows:

    Authority: 38 U.S.C. 501(a) and as noted in specific sections.

Subpart J--Action by the Board

    5. Section 20.903 is revised to read as follows:


Sec. 20.903  Rule 903. Notification of evidence secured and law to be 
considered by the Board and opportunity for response.

    (a) If the Board obtains a legal or medical opinion. If the Board 
requests an opinion pursuant to Rule 901 (Sec. 20.901 of this part), 
the Board will notify the appellant and his or her representative, if 
any. When the Board receives the opinion, it will furnish a copy of the 
opinion to the appellant's representative or, subject to the 
limitations provided in 38 U.S.C. 5701(b)(1), to the appellant if there 
is no representative. A period of 60 days from the date of mailing of a 
copy of the opinion will be allowed for response. The date of mailing 
will be presumed to be the same as the date of the letter or memorandum 
that accompanies the copy of the opinion for purposes of determining 
whether a response was timely filed.
    (b) If the Board obtains other evidence. If, pursuant to 
Sec. 19.9(b) or Sec. 19.37(b) of this part, the Board obtains pertinent 
evidence that was not submitted by the appellant or the appellant's 
representative, the Board will notify the appellant and his or her 
representative, if any, of the evidence obtained. A period of 60 days 
from the date of mailing of the notice will be allowed for response. 
The date of mailing will be presumed to be the same as the date of the 
letter or memorandum that accompanies the notice for purposes of 
determining whether a response was timely filed.
    (c) If the Board considers law not already considered by the agency 
of original jurisdiction. If the Board intends to consider law not 
already considered by the agency of original jurisdiction and such 
consideration could result in denial of the appeal, the Board will 
notify the appellant and his or her representative, if any, of its 
intent to do so and that such consideration in the first instance by 
the Board could result in denial of the appeal. The notice from the 
Board will contain a copy of, or reference to, the law to be 
considered. A period of 60 days from the date of mailing of the notice 
will be allowed for response. The date of mailing will be presumed to 
be the same as the date of the letter that accompanies the notice for 
purposes of determining whether a response was timely filed.

(Authority: 38 U.S.C. 7104(a), 7109(c)).

Subpart N--Miscellaneous

    6. Section 20.1304 is amended by:
    a. Revising the fifth sentence in paragraph (a);
    b. Revising paragraph (b);
    c. Removing paragraph (c); and
    d. Redesignating paragraph (d) as paragraph (c).
    The revisions read as follows:


Sec. 20.1304  Rule 1304. Request for change in representation, request 
for personal hearing, or submission of additional evidence following 
certification of an appeal to the Board of Veterans' Appeals.

    (a) * * * Any pertinent evidence submitted by the appellant or 
representative is subject to the requirements of paragraph (c) of this 
section if a simultaneously contested claim is involved.
    (b) Subsequent request for a change in representation, request for 
a personal hearing, or submission of additional evidence. (1) General 
rule. Subject to the exception in paragraph (b)(2) of this section, 
following the expiration of the period described in paragraph (a) of 
this section, the Board of Veterans' Appeals will not accept a request 
for a change in representation, a request for a personal hearing, or 
additional evidence except when the appellant demonstrates on motion 
that there was good cause for the delay. Examples of good cause 
include, but are not limited to, illness of the appellant or the 
representative which precluded action during the period; death of an 
individual representative; illness or incapacity of an individual 
representative which renders it impractical for an appellant to 
continue with him or her as representative; withdrawal of an individual 
representative; the discovery of evidence that was not available prior 
to

[[Page 40946]]

the expiration of the period; and delay in transfer of the appellate 
record to the Board which precluded timely action with respect to these 
matters. Such motions must be in writing and must include the name of 
the veteran; the name of the claimant or appellant if other than the 
veteran (e.g., a veteran's survivor, a guardian, or a fiduciary 
appointed to receive VA benefits on an individual's behalf); the 
applicable Department of Veterans Affairs file number; and an 
explanation of why the request for a change in representation, the 
request for a personal hearing, or the submission of additional 
evidence could not be accomplished in a timely manner. Such motions 
must be filed at the following address: Director, Administrative 
Service (014), Board of Veterans' Appeals, 810 Vermont Avenue, NW., 
Washington, DC 20420. Depending upon the ruling on the motion, action 
will be taken as follows:
    (i) Good cause not shown. If good cause is not shown, the request 
for a change in representation, the request for a personal hearing, or 
the additional evidence submitted will be referred to the agency of 
original jurisdiction upon completion of the Board's action on the 
pending appeal without action by the Board concerning the request or 
additional evidence. Any personal hearing granted as a result of a 
request so referred or any additional evidence so referred may be 
treated by that agency as the basis for a reopened claim, if 
appropriate. If the Board denied a benefit sought in the pending appeal 
and any evidence so referred which was received prior to the date of 
the Board's decision, or testimony presented at a hearing resulting 
from a request for a hearing so referred, together with the evidence 
already of record, is subsequently found to be the basis of an 
allowance of that benefit, the effective date of the award will be the 
same as if the benefit had been granted by the Board as a result of the 
appeal which was pending at the time that the hearing request or 
additional evidence was received.
    (ii) Good cause shown. If good cause is shown, the request for a 
change in representation or for a personal hearing will be honored. Any 
pertinent evidence submitted by the appellant or representative will be 
accepted, subject to the requirements of paragraph (c) of this section 
if a simultaneously contested claim is involved.
    (2) If the Board obtains evidence or considers law not considered 
by the agency of original jurisdiction. The motion described in 
paragraph (b)(1) of this section is not required to submit evidence in 
response to the notice described in paragraph (b) or (c) of Rule 903 
(paragraph (b) or (c) of Sec. 20.903 of this part).
* * * * *

(Authority: 38 U.S.C. 7104, 7105, 7105A).

[FR Doc. 01-19476 Filed 8-3-01; 8:45 am]
BILLING CODE 8320-01-P