[Federal Register Volume 67, Number 141 (Tuesday, July 23, 2002)]
[Proposed Rules]
[Pages 48078-48082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18573]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AK38


Enrollment--Provision of Hospital and Outpatient Care to Veterans

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: VA's medical regulations captioned ``Enrollment--Provision of 
Hospital and Outpatient Care to Veterans'' implement a national 
enrollment system to manage the delivery of inpatient hospital care and 
outpatient medical care. Veterans currently are eligible to be enrolled 
based on seven priority categories. We would add veterans awarded the 
Purple Heart to priority category 3 to implement new statutory 
requirements. We would delete the copayment provisions from priority 
category 4 to clarify statutory requirements. We propose to divide 
priority category 7 into two new priority categories (7 and 8) to 
implement new statutory requirements. We would use the current 
subpriorities for category 7 for these new categories. We propose to 
state principles for placing veterans in enrollment categories to help 
ensure clarity and fairness in making priority category determinations. 
Finally, we would change the VA officials who can make enrollment 
decisions and provide an additional address for sending a request for 
voluntary disenrollment.

[[Page 48079]]


DATES: Comments must be received on or before August 22, 2002.

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; or fax comments to 
(202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK38.'' All comments received will be available for public 
inspection in the Office of Regulations Management, Room 1158, between 
the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except 
holidays).

FOR FURTHER INFORMATION CONTACT: Amy Hertz, Office of Policy and 
Planning (105D), at (202) 273-8934 or Roscoe Butler, Chief Policy & 
Operations, Health Administration Service (10C3), at (202) 273-8302. 
These individuals are in the Veterans Health Administration of the 
Department of Veterans Affairs, and are located at 810 Vermont Avenue, 
NW, Washington, DC 20420.

SUPPLEMENTARY INFORMATION: Pursuant to the mandate of the Veterans' 
Health Care Eligibility Reform Act of 1996, VA established a national 
enrollment system to manage the delivery of inpatient hospital care and 
outpatient medical care (38 CFR 17.36). Starting October 1, 1998, most 
veterans were required to be enrolled in the VA health care system as a 
condition for receiving VA hospital and outpatient care, and the 
Secretary was required to make annual determinations as to which 
categories of veterans are eligible to enroll in the VA health care 
system.
    Currently, VA's enrollment regulations at 38 CFR 17.36 provide that 
veterans are eligible to be enrolled based on the following categories 
of priority:
    (1) Veterans with a singular or combined rating of 50 percent or 
greater based on one or more service-connected disabilities or 
unemployability.
    (2) Veterans with a singular or combined rating of 30 percent or 40 
percent based on one or more service-connected disabilities.
    (3) Veterans who are former prisoners of war; veterans with a 
singular or combined rating of 10 percent or 20 percent based on one or 
more service-connected disabilities; veterans who were discharged or 
released from active military service for a disability incurred or 
aggravated in the line of duty; veterans who receive disability 
compensation under 38 U.S.C. 1151; veterans whose entitlement to 
disability compensation is suspended pursuant to 38 U.S.C. 1151, but 
only to the extent that such veterans' continuing eligibility for 
hospital and outpatient care is provided for in the judgment or 
settlement described in 38 U.S.C. 1151; veterans whose entitlement to 
disability compensation is suspended because of the receipt of military 
retired pay; and veterans receiving compensation at the 10 percent 
rating level based on multiple noncompensable service-connected 
disabilities that clearly interfere with normal employability.
    (4) Veterans who receive increased pension based on their need for 
regular aid and attendance or by reason of being permanently housebound 
and other veterans who are determined to be catastrophically disabled 
by the Chief of Staff (or equivalent clinical official) at the VA 
facility where they were examined; except that a veteran who is 
catastrophically disabled and who must agree under 38 U.S.C. 1710 to 
pay to the United States a copayment as condition of receiving VA care, 
must agree to pay to the United States the applicable copayment to be 
enrolled in priority category 4.
    (5) Veterans not covered by paragraphs (1) through (4) of this 
section who are determined to be unable to defray the expenses of 
necessary care under 38 U.S.C. 1722(a).
    (6) Veterans of the Mexican border period or of World War I; 
veterans solely seeking care for a disorder associated with exposure to 
a toxic substance or radiation, for a disorder associated with service 
in the Southwest Asia theater of operations during the Gulf War, or for 
any illness associated with service in combat in a war after the Gulf 
War or during a period of hostility after November 11, 1998, as 
provided and limited in 38 U.S.C. 1710(e); and veterans with 0 percent 
service-connected disabilities who are nevertheless compensated, 
including veterans receiving compensation for inactive tuberculosis.
    (7) Veterans who agree to pay to the United States the applicable 
copayment determined under 38 U.S.C. 1710(f) and 1710(g). This category 
is further prioritized into the following subcategories:
    (i) Noncompensable zero percent service-connected veterans; and
    (ii) All other priority category 7 veterans.

Priority Category 3--Purple Heart

    The Veteran's Millennium Health Care and Benefits Act amended the 
priority categories to include veterans awarded the Purple Heart in 
priority category 3. Accordingly, we will change the regulations to 
implement this statutory change.

Priority Category 4--Catastrophically Disabled Veterans

    As noted above, the regulations exclude from priority category 4 
those catastrophically disabled veterans who were required under 38 
U.S.C. 1710 to agree to pay to the United States a copayment as a 
condition of receiving care and who had not made such an agreement. The 
statutory provision establishing the enrollment priority (38 U.S.C. 
1705) included catastrophically disabled veterans without regard to 
copayment requirements. Accordingly, we would delete the copayment 
provisions from priority category 4. However, as a condition of 
receiving care, the provisions of 38 U.S.C. 1710 require certain 
catastrophically disabled veterans to agree to make copayments. 
Accordingly, Sec. 17.36(a)(2) would be clarified to reflect that to be 
eligible for the medical benefits package a veteran must agree to make 
copayments if required by law to do so.

Priority Categories 7 and 8

    This document would replace priority category 7 with two new 
priority categories (7 and 8) and use the current subpriorities for 
category 7 for these new categories as follows:
    (7) Veterans who agree to pay to the United States the applicable 
copayment determined under 38 U.S.C. 1710(f) and 1710(g) if their 
income for the previous calendar year constitutes ``low income'' under 
the geographical income limits published by the U.S. Department of 
Housing and Urban Development for the fiscal year that ended on 
September 30 of the previous calendar year. For purposes of this 
paragraph, VA will determine the income of veterans (to include the 
income of their spouses and dependents) using the rules in Secs. 3.271, 
3.272, 3.273, and 3.276; and 38 U.S.C. 1521. After determining the 
veterans' income and the number of persons in the veterans' family 
(including only the spouse and dependent children), VA will compare 
their income with the current applicable ``low-income'' income limit 
for the public housing and section 8 programs in their area that the 
U.S. Department of Housing and Urban Development publishes pursuant to 
42 U.S.C. 1437a(b)(2). If the veteran's income is below the applicable 
``low-income'' income limit for the area in which the veteran resides, 
the veteran will be considered to have ``low income'' for purposes of 
this paragraph. To avoid a hardship to a veteran, VA may use the 
projected income for the current year of the veteran, spouse, and

[[Page 48080]]

dependent children if the projected income is below the ``low income'' 
income limit referenced above.
    This category is further prioritized into the following 
subcategories:
    (i) Noncompensable zero percent service-connected veterans; and
    (ii) All other priority category 7 veterans.
    (8) Veterans not included in priority category 4 or 7, who are 
eligible for care only if they agree to pay to the United States the 
applicable copayment determined under 38 U.S.C. 1710(f) and 1710(g). 
This category is further prioritized into the following subcategories:
    (i) Noncompensable zero percent service-connected veterans; and
    (ii) All other priority category 8 veterans.
    The new priority category 7 is required to implement section 202(a) 
of Public Law 107-135 that establishes a new priority category 7 which 
reads: ``Veterans described in section 1710(a)(3) of this title who are 
eligible for treatment as a low-income family under section 3(b) of the 
United States Housing Act of 1937 (42 U.S.C. 1437a(b)) for the area in 
which such veterans reside, regardless of whether such veterans are 
treated as single person families under paragraph (3)(A) of such 
section 3(b) or as families under paragraph (3)(B) of such section 
3(b).'' We have interpreted this provision to require that VA just use 
the income limits established by the Department of Housing and Urban 
Development to determine whether veterans are in priority category 7. 
To interpret this provision to require VA or HUD to determine veterans' 
income under the HUD methodology would result in many veterans having 
two different incomes for purposes of enrollment in the VA healthcare 
system: One based on the HUD methodology and the other based on VA's 
methodology. This interpretation is not supported by the legislative 
history of this provision and would be unreasonable, unsound, and 
unworkable. Instead, we propose using the same methodology used to 
determine income as used in determining whether veterans are unable to 
defray the cost of necessary care under 38 U.S.C. 1722. This requires 
using prior year income unless VA determines that using projected 
current year income would avoid a hardship to the veteran.
    The description of the new priority category 8 restates a provision 
in section 202(a) of Public Law 107-135. To be eligible for enrollment 
in priority category 8, veterans must agree to pay the applicable 
copayment, but they need not provide VA with income and asset 
information.
    We propose to sub-prioritize new categories 7 and 8 in the same 
manner as the current category 7, i.e., on the basis of whether the 
veterans have service-connected (noncompensable) disabilities. We 
continue to believe that veterans with a service-connected disability 
should have a higher priority than those without a service-connected 
disability.
    Consistent with this expansion of priority categories, we propose 
to amend the enrollment application provisions of Sec. 17.36(d)(1). 
Thus, applicants for placement in new priority category 8 would not be 
required to complete section II of VA Form 10-10EZ; however, applicants 
for new priority category 7 would be required to complete the entire 
form except for section IIE (i.e., information concerning a veteran's 
net worth). In our opinion, this is necessary to be consistent with our 
methodology for determining income in the same manner as currently used 
for applicants for placement in priority category 5, except that 
information concerning a veteran's net worth is not needed for 
applicants for new priority category 7.

Principles for Placement in Enrollment Categories

    We propose to establish the following principles for placement of 
veterans in priority categories:
     Veterans will be placed in priority categories whether or 
not the veterans in that category are eligible to be enrolled.
     A veteran will be placed in the highest priority category 
or categories for which the veteran qualifies.
     A veteran may be placed in only one priority category, 
except that a veteran placed in priority category 6 based on a 
specified disorder or illness will also be placed in priority category 
7 or 8 (if the veteran has previously agreed to pay the applicable 
copayment) for all matters not covered by priority category 6.
     A veteran who had been enrolled based on inclusion in 
priority category 5 and became no longer eligible for inclusion in that 
priority category due to failure to submit to VA a current VA Form 10-
10EZ will be changed automatically to enrollment based on inclusion in 
priority category 6 or 8, as applicable, (or more than one of these 
categories if the previous principle applies), and be considered 
continuously enrolled. To meet the criteria for priority category 5, a 
veteran must submit to VA required financial information in a current 
VA Form 10-10EZ. To be current, after VA has sent a form 10-10EZ to the 
veteran at the veteran's last known address, the veteran must return 
the completed form (including signature) to the address on the return 
envelope within 60 days from the date VA sent the form to the veteran.
     Veterans will be disenrolled, and reenrolled, in the order 
of the priority categories listed with veterans in priority category 1 
being the last to be disenrolled and the first to be reenrolled. 
Similarly, within priority categories 7 and 8, veterans will be 
disenrolled, and reenrolled, in the order of the priority subcategories 
listed with veterans in subcategory (i) being the last to be 
disenrolled and first to be reenrolled.
    The first principle clarifies that VA will place veterans in the 
priority category in which they belong even if the Secretary has 
announced that VA will not enroll veterans in that category under 
Sec. 17.36(c). This will permit veterans to dispute that placement and 
may facilitate veterans in this category obtaining VA care if the 
Secretary later decides to enroll veterans in that category. The second 
and fifth principles are consistent with 38 U.S.C. 1705(a) which 
requires VA to give priority to the categories in the order listed. The 
third principle is required by 38 U.S.C. 1710(a)(2)(F) and (e) which 
limits the eligibility for care given to certain veterans placed in 
priority category 6. We are proposing the fourth principle to 
facilitate the transfer of veterans from category 5 to category 6 or 8 
without disenrollment. The current regulations state that to remain in 
priority category 5, veterans are required yearly to submit information 
to VA establishing financial eligibility for such priority category. 
The regulations contained provisions for disenrolling veterans who had 
been in priority category 5 but who had failed to submit information 
establishing that they should remain in priority category 5. 
Disenrollment of such veterans could, during periods when VA must limit 
enrollments and re-enrollments, result in the loss of eligibility for 
VA care altogether. This was never intended for veterans who had 
previously signed a form 10-10EZ and thus agreed to pay applicable 
copayments. Accordingly, this document proposes to change the rule to 
provide that a veteran no longer eligible for priority category 5 would 
be automatically changed to enrollment based on inclusion in priority 
category 6, or 8, and be deemed as continuously enrolled if the 
enrollment decision allows for such priority categories to remain 
enrolled.

[[Page 48081]]

Decisionmaking Officials

    To reflect a title change, we would change ``Chief Network 
Officer'' to ``Deputy Under Secretary for Health for Operations and 
Management.'' Further, we would add ``Chief, Health Administration 
Service or equivalent official at a VA medical facility, or Director, 
Health Eligibility Center'' to the list of VA officials who can make 
decisions regarding the enrollment of individual veterans. In our 
opinion, this is necessary to give VA greater flexibility in 
administering the enrollment process. We would not change the 
regulation that provides that the Secretary will make the determination 
regarding which priority categories of veterans are eligible to be 
enrolled.

Miscellaneous

    An address is proposed to be added for veterans to send a request 
for voluntary disenrollment. Finally, we would remove a nonsubstantive, 
unnecessary bracketed phrase from paragraph 17.36(f).

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866. Executive Order 12866 provides that 
a proposed rule ``in most cases should include a comment period of not 
less than 60 days.'' This proposal provides for a 30-day comment 
period. This is necessary to allow for a final rule to be established 
in time to allow the VA Secretary to have as many options as possible 
concerning the provision of health care services to veterans in fiscal 
year 2003.

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 (RFA), 5 
U.S.C. 601-612. This amendment would not directly affect any small 
entities. Only individuals could be directly affected. Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this document are 64.005, 64.007, 64.008, 64.009, 64.010, 
64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 64.018, 64.019, 64.022, 
and 64.025.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs-health, Grant programs-veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Approved: May 15, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.
    For the reasons set out in the preamble, 38 CFR part 17 is proposed 
to be amended as set forth below:

PART 17--MEDICAL

    1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, 1721, unless otherwise noted.

    2. Section 17.36 is amended by:
    A. Removing ``Chief Network Officer'' wherever it appears and 
adding, in its place, ``Deputy Under Secretary for Health for 
Operations and Management or Chief, Health Administration Service or 
equivalent official at a VA medical facility, or Director, Health 
Eligibility Center''.
    B. Revising paragraphs (a)(2), (b)(4), and (b)(7).
    C. In paragraph (b)(3), removing ``prisoners of war;'' and adding, 
in its place, ``prisoners of war; veterans awarded the Purple Heart;''
    D. Adding a new paragraph (b)(8).
    E. Revising paragraph (d)(1); and redesignating paragraphs (d)(3) 
through (d)(5) as paragraphs (d)(4) through (d)(6), respectively.
    F. Adding a new paragraph (d)(3).
    G. Revising newly redesignated paragraphs (d)(5) introductory text; 
and (d)(5)(i).
    H. Removing ``Note to Paragraph (d)(1)''.
    I. In newly redesignated paragraph (d)(5)(iii), removing ``priority 
category 5;'' and adding, in its place, ``priority category 5 or 
priority category 7;''.
    J. In paragraph (f), removing ``[insert actual photocopy of VA Form 
10-10EZ]''.
    K. Revising the authority at the end of the section. The revisions 
and additions read as follows:


Sec. 17.36  Enrollment--provision of hospital and outpatient care to 
veterans.

    (a) * * *
    (2) Except as provided in paragraph (a)(3) of this section, a 
veteran enrolled under this section and who, if required by law to do 
so, has agreed to make any applicable copayment is eligible for VA 
hospital and outpatient care as provided in the ``medical benefits 
package'' set forth in Sec. 17.38.
* * * * *
    (b) * * *
    (4) Veterans who receive increased pension based on their need for 
regular aid and attendance or by reason of being permanently housebound 
and other veterans who are determined to be catastrophically disabled 
by the Chief of Staff (or equivalent clinical official) at the VA 
facility where they were examined.
* * * * *
    (7) Veterans who agree to pay to the United States the applicable 
copayment determined under 38 U.S.C. 1710(f) and 1710(g) if their 
income for the previous year constitutes ``low income'' under the 
geographical income limits established by the U.S. Department of 
Housing and Urban Development for the fiscal year that ended on 
September 30 of the previous calendar year. For purposes of this 
paragraph, VA will determine the income of veterans (to include the 
income of their spouses and dependents) using the rules in Secs. 3.271, 
3.272, 3.273, and 3.276 of this chapter. After determining the 
veterans' income and the number of persons in the veterans' family 
(including only the spouse and dependent children), VA will compare 
their income with the current applicable ``low-income'' income limit 
for the public housing and section 8 programs in their area that the 
U.S. Department of Housing and Urban Development publishes pursuant to 
42 U.S.C. 1437a(b)(2). If the veteran's income is below the applicable 
``low-income'' income limits for the area in which the veteran resides, 
the veteran will be considered to have ``low

[[Page 48082]]

income'' for purposes of this paragraph. To avoid a hardship to a 
veteran, VA may use the projected income for the current year of the 
veteran, spouse, and dependent children if the projected income is 
below the ``low income'' income limit referenced above. This category 
is further prioritized into the following subcategories:
    (i) Noncompensable zero percent service-connected veterans; and
    (ii) All other priority category 7 veterans.
    (8) Veterans not included in priority category 4 or 7, who are 
eligible for care only if they agree to pay to the United States the 
applicable copayment determined under 38 U.S.C. 1710(f) and 1710(g). 
This category is further prioritized into the following subcategories:
    (i) Noncompensable zero percent service-connected veterans; and
    (ii) All other priority category 8 veterans.
* * * * *
    (d) Enrollment and disenrollment process--(1) Application for 
enrollment. A veteran may apply to be enrolled in the VA healthcare 
system at any time. A veteran who wishes to be enrolled must apply by 
submitting a VA Form 10-10EZ to a VA medical facility. Veterans 
applying based on inclusion in priority categories 1, 2, 3, 6, and 8 do 
not need to complete section II, but must complete the rest of the 
form. Veterans applying based on inclusion in priority category 4 
because of their need for regular aid and attendance or by being 
permanently housebound need not complete section II, but must complete 
the rest of the form. Veterans applying based on inclusion in priority 
category 4 because they are catastrophically disabled need not complete 
section II, but must complete the rest of the form, if: They agree to 
pay to the United States the applicable copayment determined under 38 
U.S.C. 1710(f) and 1710(g); they are a veteran of the Mexican border 
period or of World War I or a veteran with a 0 percent service-
connected disability who is nevertheless compensated; their 
catastrophic disability is a disorder associated with exposure to a 
toxic substance or radiation, or with service in the Southwest Asia 
theater of operations during the Gulf War as provided in 38 U.S.C. 
1710(e); or their catastrophic disability is an illness associated with 
service in combat in a war after the Gulf War or during a period of 
hostility after November 11, 1998, as provided in 38 U.S.C. 1710(e). 
All other veterans applying based on inclusion in priority category 4 
because they are catastrophically disabled must complete the entire 
form. Veterans applying based on inclusion in priority category 5 must 
complete the entire form. Veterans applying based on inclusion in 
priority category 7 must complete the entire form except for section 
IIE. VA form 10-10EZ is set forth in paragraph (f) of this section and 
is available from VA medical facilities.
* * * * *
    (3) Placement in enrollment categories. (i) Veterans will be placed 
in priority categories whether or not veterans in that category are 
eligible to be enrolled.
    (ii) A veteran will be placed in the highest priority category or 
categories for which the veteran qualifies.
    (iii) A veteran may be placed in only one priority category, except 
that a veteran placed in priority category 6 based on a specified 
disorder or illness will also be placed in priority category 7 or 
priority category 8, as applicable, if the veteran has previously 
agreed to pay the applicable copayment, for all matters not covered by 
priority category 6.
    (iv) A veteran who had been enrolled based on inclusion in priority 
category 5 and became no longer eligible for inclusion in priority 
category 5 due to failure to submit to VA a current VA Form 10-10EZ 
will be changed automatically to enrollment based on inclusion in 
priority category 6 or 8 (or more than one of these categories if the 
previous principle applies), as applicable, and be considered 
continuously enrolled. To meet the criteria for priority category 5, a 
veteran must be eligible for priority category 5 based on the 
information submitted to VA in a current VA Form 10-10EZ. To be 
current, after VA has sent a form 10-10EZ to the veteran at the 
veteran's last known address, the veteran must return the completed 
form (including signature) to the address on the return envelope within 
60 days from the date VA sent the form to the veteran.
    (v) Veterans will be disenrolled, and reenrolled, in the order of 
the priority categories listed with veterans in priority category 1 
being the last to be disenrolled and the first to be reenrolled. 
Similarly, within priority categories 7 and 8, veterans will be 
disenrolled, and reenrolled, in the order of the priority subcategories 
listed with veterans in subcategory (i) being the last to be 
disenrolled and first to be reenrolled.
* * * * *
    (5) Disenrollment. A veteran enrolled in the VA health care system 
under paragraph (d)(2) or (d)(4) of this section will be disenrolled 
only if:
    (i) The veteran submits to a VA medical center or the VA Health 
Eligibility Center, 1644 Tullie Circle, Atlanta, Georgia 30329, a 
signed document stating that the veteran no longer wishes to be 
enrolled; or
* * * * *

    (Authority: 38 U.S.C 101, 501, 1521, 1701, 1705, 1710, 1721, 
1722)

[FR Doc. 02-18573 Filed 7-22-02; 8:45 am]
BILLING CODE 8320-01-P