[Federal Register Volume 68, Number 18 (Tuesday, January 28, 2003)]
[Proposed Rules]
[Pages 4132-4141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1834]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 3
RIN 2900-AL37
Effective Dates of Benefits for Disability or Death Caused by
Herbicide Exposure; Disposition of Unpaid Benefits After Death of
Beneficiary
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
adjudication regulations concerning certain awards of disability
compensation and dependency and indemnity compensation (DIC). Under the
proposed amendment, certain awards of disability compensation or DIC
made pursuant to liberalizing regulations concerning diseases
presumptively associated with herbicide exposure may be made effective
retroactive to the date of the claim or the date of a previously denied
claim, even if such date is earlier than the effective date of the
regulation establishing the presumption. The proposed rule also
provides that VA may pay to certain individuals any amounts a deceased
beneficiary was entitled to receive under the effective-date provisions
of this proposed rule, but which were not paid prior to the
beneficiary's death. This amendment appears necessary to reflect the
requirements of court orders in a class-action case.
[[Page 4133]]
DATES: Comments must be received on or before March 31, 2003.
ADDRESSES: Mail or hand deliver written comments to: Director, Office
of Regulatory Law (02D), Room 1154, 810 Vermont Ave., NW., 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-AL37.'' All comments received will
be available for public inspection in the Office of Regulatory Law,
Room 1158, between the hours of 8 a.m. and 4:30 p.m., Monday through
Friday (except holidays).
FOR FURTHER INFORMATION CONTACT: David Barrans, Staff Attorney (022),
Office of General Counsel, Department of Veterans Affairs, 810 Vermont
Avenue, NW., Washington, DC 20420, (202) 273-6332.
SUPPLEMENTARY INFORMATION: A series of court orders in the class-action
litigation in Nehmer v. United States Department of Veterans Affairs,
No. CV-86-6160 TEH (N.D. Cal.), requires VA to assign retroactive
effective dates for certain awards of disability compensation and DIC
in a manner not provided for in any existing statute or regulation. The
court orders require that, when VA awards disability compensation or
DIC pursuant to a regulatory presumption of service connection under
the Agent Orange Act of 1991, Pub. L. 102-4, VA must in certain cases
make the award effective retroactive to the date of the claimant's
application or the date of a previously-denied application, even if
such date is earlier than the effective date of the regulation
establishing the presumption. Current regulations, however, prohibit VA
from making a benefit award effective any earlier than the effective
date of the regulation establishing the presumption. Because the
conflict between current statutes and regulations and the Nehmer court
orders may create confusion, we propose to amend our regulations to
reflect the requirements of the Nehmer court orders.
In 1991, Congress enacted the Agent Orange Act of 1991, Pub. L.
102-4 (codified at 38 U.S.C. 1116 and in the notes to that section).
That Act established presumptions for chloracne, non-Hodgkins lymphoma,
and soft-tissue sarcoma. It further provided that VA would obtain
reports from the National Academy of Sciences (NAS) every two years for
a ten-year period, assessing the available scientific evidence
regarding the association between exposure to herbicides and the
development of diseases in humans. After receiving each report, VA must
determine whether there is a ``positive association'' between herbicide
exposure and any of the diseases discussed in the report. If a positive
association exists for any such disease, VA must issue regulations to
establish a presumption of service connection for that disease in
veterans exposed to herbicides during service. VA has established
presumptions of service connection for seven additional diseases or
categories of disease, which are listed in 38 CFR 3.309(e).
The Agent Orange Act of 1991 provides that regulations issued
pursuant to that act shall take effect on the date they are issued.
Under generally applicable effective-date rules in 38 U.S.C. 5110(g)
and 38 CFR 3.114, when VA awards benefits pursuant to a liberalizing
regulation, the award may not be made effective any earlier than the
effective date of the liberalizing regulation. Under those provisions,
awards based on presumptions of service connection established under
the Agent Orange Act of 1991 can be made effective no earlier than the
date VA issued the regulation authorizing the presumption.
However, the district court orders in the Nehmer litigation create
an exception to the generally applicable rules in 38 U.S.C. 5110(g) and
38 CFR 3.114, and require VA to assign retroactive effective dates for
certain awards of disability compensation and DIC that are based on
VA's regulations under the Agent Orange Act of 1991, Pub. L. 102-4.
This exception applies only to claims by members of the Nehmer class.
VA is required to comply with the district court's orders, which have
been affirmed by the United States Court of Appeals for the Ninth
Circuit to the extent they were appealed. Accordingly, we propose to
issue a regulation explaining the requirements established by those
orders to ensure timely and consistent adjudication under those orders
without further need for special instructions.
The Nehmer court orders also require that, if an individual was
entitled to retroactive benefits as a result of the court orders but
died prior to receiving such payment, VA must pay the entire amount of
such retroactive payments to the veteran's estate, without regard to
statutory limits on payment of benefits following a beneficiary's
death. Section 5121(a) of title 38, United States Code, provides that,
when VA benefits remain due and unpaid at the time of a beneficiary's
death, VA may pay to certain survivors only the portion of such
benefits that accrued during the two-year period preceding death.
Current VA regulations reflect the requirements of section 5121(a), and
contain no exception for cases covered by the Nehmer court orders.
Because the conflict between current regulations and the Nehmer court
orders may create confusion, we propose to amend our regulations to
reflect the requirements of the Nehmer court orders. Accordingly, we
propose to issue rules reflecting the limited exception to section
5121(a) established by the Nehmer court orders. This exception applies
only to certain benefits for members of the Nehmer class. As stated
above, the intent of this rule is to ensure timely and consistent
compliance with the court's orders without the need for further special
instructions.
The Nehmer Litigation
The Nehmer litigation was initiated in 1986 to challenge a VA
regulation, former 38 CFR 3.311a (which has since been rescinded) that
stated, among other things, that chloracne was the only disease shown
by sound medical and scientific evidence to be associated with
herbicide exposure. In 1987, the district court certified the case as a
class action on behalf of all Vietnam veterans and their survivors who
had been denied VA benefits for a condition allegedly associated with
herbicide exposure or who would be eligible to file a claim for such
benefits in the future. In an order issued on May 3, 1989, the court
invalidated the portion of the regulation providing that no condition
other than chloracne was associated with herbicide exposure and voided
all VA decisions denying benefit claims under that portion of the
regulation. Nehmer v. United States Veterans' Admin., 712 F. Supp. 1404
(N.D. Cal. 1989).
After Congress enacted the Agent Orange Act of 1991, Pub. L. 102-4,
VA and the plaintiff class in Nehmer entered into a stipulation to
address remedial issues resulting from the May 1989 order. The
stipulation provided that VA would not deny any claims of the Nehmer
class members until VA had acted on the first NAS report issued under
the Agent Orange Act of 1991, Pub. L. 102-4. The stipulation further
stated that, once VA issued regulations establishing a presumption of
service connection for any disease pursuant to the Act, VA would
readjudicate all claims for any such disease in which a prior denial
had been voided by the district court's May 3, 1989 order and would
adjudicate all similar claims filed after May 3, 1989. The stipulation
stated that, if benefits were granted upon readjudication of a claim
where a prior denial was voided, the effective date of the benefit
award would be the date VA received the claim underlying the
[[Page 4134]]
voided decision or the date the disability arose or the death occurred,
whichever was later. In claims filed after May 3, 1989, the stipulation
stated that the effective date of any benefits awarded would be the
date VA received the claim or the date the disability arose or the
death occurred, whichever was later. The district court incorporated
the stipulation in a final order.
On October 15, 1991, VA issued a regulation establishing a
presumption of service connection for soft-tissue sarcomas based on
herbicide exposure. On February 6, 1991, the Agent Orange Act of 1991,
Pub. L. 102-4, established statutory presumptions of service connection
for non-Hodgkin's lymphoma, soft-tissue sarcomas, and chloracne. In
June 1993, VA received the first NAS report under the Agent Orange Act
of 1991. Thereafter, VA issued regulations establishing presumptions of
service connection for four additional diseases (Hodgkin's disease,
February 3, 1994; porphyria cutanea tarda, February 3, 1994;
respiratory cancers, June 9, 1994; multiple myeloma, June 9, 1994). In
1994, VA began to readjudicate the claims where a prior denial had been
voided by the 1989 court order and to adjudicate claims filed
subsequent to that order. In cases where VA granted benefits upon such
readjudication or adjudication, it assigned effective dates as required
by the Nehmer stipulation and order, even though the effective dates in
many cases were earlier than the effective dates of the statute or
liberalizing regulations that authorized the awards.
In 1996, VA received the second NAS report under the Agent Orange
Act of 1991. Based on new information contained in that report, VA
issued regulations on November 7, 1996 establishing presumptions of
service connection for prostate cancer and acute and subacute
peripheral neuropathy. In 2001, based on new information in a later NAS
report, VA established a presumption of service connection for type 2
diabetes effective July 9, 2001.
In 2000, the parties to the Nehmer case disagreed as to whether the
retroactive-payment provisions of the Nehmer stipulation and order
applied to all eight diseases that were associated with herbicide
exposure at that time (type 2 diabetes had not yet been recognized) or
only to the seven diseases that were presumptively service connected
based on the Agent Orange Act of 1991, Pub. L. 102-4, and the first NAS
report under that statute. The plaintiffs argued that the stipulation
required VA to pay retroactive benefits for all diseases that are
service connected at any time under the Agent Orange Act of 1991, Pub.
L. 102-4. VA argued that the stipulation required retroactive payment
only for disease service connected based on the first NAS report, and
that the broader interpretation urged by the plaintiffs was contrary to
the Agent Orange Act of 1991, Pub. L. 102-4 and 38 U.S.C. 5110(g).
In a December 12, 2000 order, the district court held that the
stipulation and order required VA to give retroactive effect to all
regulations issued under the Agent Orange Act of 1991, Pub. L. 102-4.
VA appealed that order to the United States Court of Appeals for the
Ninth Circuit. On April 1, 2002, the Court of Appeals affirmed the
district court's order.
Purpose of This Rule
We propose to issue a new regulation, to be codified at 38 CFR
3.816, to explain the rules VA is required to apply as a result of the
court orders in the Nehmer case. Those rules are complex and are not
reflected in any current statute or regulation. Moreover, the public
may have difficulty accessing and understanding the court orders
establishing those rules. Accordingly, we believe a regulation
explaining the Nehmer rules is necessary to provide guidance to VA
personnel as well as to VA claimants and their representatives.
To the extent the rules required by the Nehmer court orders depart
from the generally-applicable rules in 38 U.S.C. 5110(g) and 5121(a),
they are judicially-created exceptions to those general rules. VA is
required to comply with the Nehmer court orders. In order to clarify
the basis for this regulation, we propose to state, in Sec. 3.816(a),
that these rules are required by the Nehmer court orders.
Definitions
The effective-date rules required by the Nehmer court orders apply
only to members of the plaintiff class certified by the district court
in that case. In a 1987 order, the district court ruled that the Nehmer
class would consist of all veterans and their survivors who have
applied for VA benefits for disability or death due to exposure in
service to an herbicide containing dioxin or who would become eligible
in the future to apply for such benefits. Accordingly, any Vietnam
veteran would potentially be a Nehmer class member, as would any
survivors of such veteran who would be eligible to apply for DIC. The
effective-date provisions of this rule would apply only to class
members entitled to disability compensation or DIC for disability or
death due to a disease associated with herbicide exposure. Accordingly,
for purposes of this rule, we propose to define a ``Nehmer class
member'' as a Vietnam veteran who has a covered herbicide disease, or a
surviving spouse, child, or parent of a deceased Vietnam veteran who
died from a covered herbicide disease.
The effective-date rules required by the Nehmer court orders apply
only to benefits for disability or death caused by a disease for which
VA has established a presumption of service connection under the Agent
Orange Act of 1991, Public Law 102-4. For purposes of this rule, we
propose to use the term ``covered herbicide disease'' and to define
that term to mean a disease for which the Secretary of Veterans Affairs
has established a presumption of service connection before October 1,
2002 pursuant to the Agent Orange Act of 1991, Public Law 102-4,
excluding chloracne. As explained below in this notice, the effective-
date rules of the Nehmer stipulation and court orders apply only to
diseases for which a presumption of service connection is established
under the authority granted by the Agent Orange Act of 1991, Public Law
102-4. Because the authority granted by that Act at the time the
stipulation was entered extended only until September 30, 2002, any
presumptions established after that date based on other legislative
grants of rule-making authority are not within the scope of the Nehmer
stipulation and court orders.
Although chloracne is a presumptive herbicide disease, we propose
to exclude it from the definition of covered herbicide disease for
purposes of this rule because claims and awards based on chloracne were
not affected by any of the Nehmer court orders. VA established a
presumption of service connection for chloracne effective September 25,
1985, and that presumption has remained in effect throughout the period
relevant to the Nehmer litigation. In its May 3, 1989, order, the
district court invalidated the portion of VA's regulation providing
that conditions other than chloracne were not shown to be associated
with herbicide exposure and it voided decisions made under that portion
of the regulation. The court left intact the provision establishing a
presumption of service connection for chloracne and did not void any
decisions involving chloracne. Moreover, the Nehmer stipulation and
order states that it applies to diseases service connected by VA ``in
the future'' under the Agent Orange Act of 1991, Public Law 102-4.
Because chloracne had been presumptively service connected since
[[Page 4135]]
1985, it was not affected by the stipulation and order.
Effective Date Rules
The effective-date rules stated in the proposed regulation reflect
paragraph 5 of the Nehmer stipulation and order. That paragraph states
separate rules governing the effective dates of awards granted upon
readjudication of a claim where a prior denial was voided by the May 3,
1989 Nehmer order and the effective dates of awards granted upon
adjudication of a claim filed after May 3, 1989.
With respect to the voided decisions, the stipulation and order
provides that the effective date of an award made upon readjudication
of the claim will be the later of the date the claim giving rise to the
voided decision was filed (provided that the basis of the award is the
same basis upon which the original claim was filed) or the date the
disability arose or the death occurred. The stipulation and order
states that the ``basis'' of the original claim refers to the disease
or condition required, under provisions of a VA procedural manual, to
be coded in the VA rating decision on the claim. The stipulation and
order further states that the provisions of 38 U.S.C. 5110(b)(1) and
(d)(1) will govern when applicable. Section 5110(b)(1) provides for a
disability compensation effective date corresponding to the day
following the veteran's release from service if the veteran's
application is received within one year of that date. Section
5110(d)(1) provides for a DIC effective date corresponding to the first
day of the month in which death occurred if the claimant's application
is received within one year from the date of death.
With respect to claims filed after May 3, 1989, the stipulation and
order provides that the effective date of benefits shall be the later
of the date VA received the claim asserting the basis upon which the
claim was granted or the date the disability arose or the death
occurred.
We propose to provide paragraphs separately explaining the
application of these rules to disability compensation awards and DIC
awards. In view of the complexity of the Nehmer rules, we believe this
level of detail will provide greater clarity.
Effective-Date Rules for Disability Compensation
1. Claims by Nehmer Class Members Denied Between September 25, 1985 and
May 3, 1989
Section 3.816(c)(1) states that, if a Nehmer class member is
entitled to disability compensation for a covered herbicide disease,
and VA previously denied service connection for the same disease in a
decision issued between September 25, 1985, the effective date of the
invalidated regulation, and May 3, 1989, the effective date will be the
later of the date VA received the claim on which the prior decision was
based or the date the disability arose. This rule governs cases where a
prior denial was voided by the district court's May 3, 1989 order. In
an order dated February 11, 1999, the district court in Nehmer held
that its 1989 order had voided claims rendered while former 38 CFR
3.311a(d) was in effect, provided that such claims denied compensation
for a disease that VA later recognized as being associated with
herbicide exposure. The court held that it is irrelevant whether the
prior claim alleged that the disease was caused by herbicide exposure
or whether the prior decision had referenced former Sec. 3.311a(d).
Accordingly, the only requirements for retroactive payment to a class
member under proposed Sec. 3.816(c)(1) would be that the decision have
been rendered between September 25, 1985 and May 3, 1989--the period
when former Sec. 3.311a(d) was in effect--and that the decision have
denied service connection for the same covered herbicide disease for
which compensation has now been awarded.
Paragraph 5 of the Nehmer stipulation and order provides that the
basis of the prior claim will be determined by reference to the
diseases or conditions coded in the prior rating decision as required
by provisions of a VA procedural manual. In accordance with the manual,
VA rating decisions on claims for disability compensation ordinarily
identify each claimed disease or injury by name and by a diagnostic
code found in VA's Schedule for Rating Disabilities, which is located
in 38 CFR part 4. There may be variations in both the terminology and
diagnostic codes assigned to a particular disease depending on various
aspects of the disease or associated conditions. For example,
disability due to cancer of the larynx may have been rated as either a
malignant neoplasm of the respiratory system (diagnostic code 6844) or
residuals of a laryngectomy (diagnostic code 6819). Similarly, soft-
tissue sarcomas may be described using different terminology or
different diagnostic codes depending upon the body part or system
primarily involved. Additionally, some diagnostic codes refer to broad
classes of disease that encompass both covered and non-covered
diseases. For example, diagnostic code 6819 (Neoplasms, malignant, any
specified part of respiratory system exclusive of skin growths) may
refer to either a covered disease (e.g., lung cancer) or a non-covered
disease (e.g., nasal cancer).
We do not intend that minor, immaterial variations in terminology
or diagnostic code would preclude application of the Nehmer rules.
However, it must be established that the prior decision involved the
same disease for which compensation has now been awarded, rather than a
distinct condition arguably bearing some relation to the compensable
disease because, for example, it involves the same body part or system.
Accordingly, we propose to state that a prior decision will be
construed as having denied compensation for the same disease if the
prior decision denied compensation for a disease that reasonably may be
construed as the same covered herbicide disease for which compensation
has been awarded. We further propose to state that minor variations in
the terminology used in the prior decision will not preclude a finding,
based on the record at the time of the prior decision, that the
decision denied service connection for the same covered herbicide
disease.
2. Claims by Nehmer Class Members Pending on May 3, 1989, or Filed
Between May 3, 1989 and the Effective Date of the Authorizing Statute
or Regulation
Proposed Sec. 3.816(c)(2) states that, if a class member is
entitled to compensation for a covered herbicide disease and the class
member's claim for compensation for that same disease was either
pending on May 3, 1989 or was received by VA between that date and the
effective date of the statute or regulation establishing a presumption
of service connection for the disease, the effective date of
compensation will be the later of the date VA received such claim or
the date the disability arose. The Nehmer stipulation and order refers
only to claims denied prior to May 3, 1989 and claims filed after that
date. It does not expressly provide effective dates for claims that
were filed prior to May 3, 1989 but not yet adjudicated by that date.
Notwithstanding this apparent oversight, we propose to treat such
claims in the same manner as claims filed after May 3, 1989, as no
decision on a claim pending on May 3, 1989, could have been voided by
the court order.
We propose to state that a claim will be considered a claim for
compensation for a particular covered herbicide disease if the
claimant's application and
[[Page 4136]]
other supporting statements and submissions may reasonably be viewed,
under the standards ordinarily governing compensation claims, as
indicating an intent to apply for compensation for the covered
herbicide disability. This will merely ensure that the generally
applicable provisions of statute and regulation governing claims will
apply in determining whether and at what date a particular claim was
filed for purposes of this rule.
3. Qualifying Claims by Nehmer Class Members Filed Within 1 Year After
Separation From Service
We propose to state in Sec. 3.816(c)(3) that, if a claim
referenced in paragraph (c)(1) or (c)(2) was received by VA within one
year after the date of the veteran's separation from service, the
effective date of compensation will be the day following such
separation. This would ensure that the principle stated in 38 U.S.C.
5110(b)(1) is applied, as required by the Nehmer stipulation and order.
We note that the stipulation and order requires VA to apply section
5110(b)(1) to awards made upon readjudication of claims where a prior
decision was voided by the court's 1989 order, but not to awards made
in claims pending on or filed after May 3, 1989. Nevertheless, we
propose to apply section 5110(b)(1) to claims pending on or filed after
May 3, 1989, in order to ensure that the generally applicable
provisions of that statute are applied in a consistent manner.
4. Other Claims
We propose to state in Sec. 3.816(c)(4) that, if the requirements
of paragraph (c)(1) or (c)(2) are not met, the effective date of the
award shall be determined in accordance with 38 CFR 3.114 and 3.400,
the provisions generally governing the effective dates of disability
compensation. The United States Court of Appeals for Veterans Claims
has held that the provisions of the Nehmer stipulation and order do not
apply where a prior claim was denied before September 25, 1985. See
Williams v. Principi, 15 Vet. App. 189 (2001) (en banc).
Similarly, the stipulation and order does not apply in cases where
the veteran's initial claim for a covered herbicide disease was filed
after the effective date of the regulations establishing a presumption
of service connection for that disease. Further, application of the
Nehmer stipulation to such cases would ordinarily be detrimental to
veterans. Under 38 CFR 3.114, when disability compensation is awarded
pursuant to a liberalizing regulation, the award may be made effective
up to one year prior to the date of the claim, but no earlier than the
effective date of the liberalizing regulation. In contrast, the Nehmer
stipulation and order generally does not permit payment for any period
prior to the date of the veteran's claim, except in the limited
circumstances described in 38 U.S.C. 5110(b)(1) and (d)(1) involving
claims filed within one year of the date of separation from service or
the date of death.
Dependency and Indemnity Compensation
1. Claims by Nehmer Class Members Denied Between September 25, 1985 and
May 3, 1989
Section 3.816(d)(1) states that, if a Nehmer class member is
entitled to DIC for death caused by a covered herbicide disease, and VA
previously denied DIC for the death in a decision issued between
September 25, 1985 and May 3, 1989, the effective date will be the
later of the date VA received the claim on which the prior decision was
based or the date the death occurred. This rule governs cases where a
prior denial was voided by the district court's May 3, 1989 order.
Because DIC claims do not require assignment of disability ratings,
decisions on DIC claims do not assign a diagnostic code corresponding
to VA's rating schedule and may not identify the disease causing death
with the same specificity necessary to decisions concerning disability
compensation. Moreover, because the cause of death is usually
established by the death certificate and medical records existing at
death, DIC claims filed at different times ordinarily will not involve
different conditions, as often occurs with respect to disability
compensation claims. Accordingly, rather than requiring a specific
finding that the prior denial of DIC expressly referenced the same
covered herbicide disease that provided the basis for the current DIC
award, we propose to require only that the prior decision issued
between September 25, 1985 and May 3, 1989, have denied DIC for the
same death.
2. Claims By Nehmer Class Members Pending on May 3, 1985 or Filed
Between May 3, 1989 and the Effective Date of the Authorizing Statute
or Regulation
Proposed Sec. 3.816(d)(2) states that, if the class member's claim
for DIC for the death was either pending on May 3, 1989 or was received
by VA between that date and the effective date of the statute or
regulation establishing a presumption of service connection for the
disease causing the death, the effective date of DIC will be the later
of the date VA received such claim or the date the death occurred. For
the reasons stated above with respect to disability compensation, we
propose to include claims filed before May 3, 1989, but still pending
on that date, even though the Nehmer stipulation and order does not
expressly provide for such claims.
The provisions of 38 U.S.C. 5101(b)(1) and 38 CFR 3.152(b)(1) state
that a claim by a surviving spouse or child for death pension shall be
considered a claim for DIC as well. We propose to reference this
requirement in the proposed rule. Further, for the same reasons stated
above with respect to disability compensation claims, we propose to
state that a claim will be considered a claim for DIC if the claimant's
application and other supporting statements and submissions may
reasonably be viewed, under the standards ordinarily governing DIC
claims, as indicating an intent to apply for DIC.
3. Qualifying Claims by Nehmer Class Members Filed Within 1 Year After
Date of Death
We propose to state in Sec. 3.816(d)(3) that, if a claim
referenced in paragraph (d)(1) or (d)(2) was received by VA within one
year after the date of the veteran's death, the effective date of DIC
will be the first day of the month of death. This would ensure that the
principle stated in 38 U.S.C. 5110(d)(1) is applied, as required by the
Nehmer stipulation and order. We note that the stipulation and order
requires VA to apply section 5110(d)(1) to awards made upon
readjudication of claims where a prior decision was voided by the
court's 1989 order, but not to awards made in claims pending on or
filed after May 3, 1989. Nevertheless, we propose to apply section
5110(d)(1) to claims pending on or filed after May 3, 1989, in order to
ensure that the generally applicable provisions of that statute are
applied in a consistent manner.
4. Other Claims
For the reasons stated above with respect to disability
compensation, we propose to state in Sec. 3.816(d)(4) that, if the
requirements of paragraph (d)(1) or (d)(2) are not met, the effective
date of DIC will be governed by 38 CFR 3.114 and 3.400.
Effect of Other Provisions
We propose to state in Sec. 3.816(e)(1) that, if the requirements
of paragraphs (c)(1) or (c)(2) or (d)(1) or (d)(2) are met, the
effective date of benefits will be determined as provided by this rule,
without regard to any contrary provision
[[Page 4137]]
in 38 U.S.C. 5110(g) or 38 CFR 3.114. As noted above, the effective-
date rules required by the Nehmer court create a limited exception to
that statute and regulation. In order to avoid confusion among VA
personnel, claimants, and claimants' representatives regarding the
effect of this exception, we believe it is necessary to state clearly
that the Nehmer rules shall be applied, when they are applicable,
without regard to 38 U.S.C. 5110(g) or 38 CFR 3.114.
We also propose to state that the effective-date provisions in this
rule will not apply if a statute or regulation other than 38 U.S.C.
5110(g) or 38 CFR 3.114 would bar a retroactive payment that would
otherwise be available under the Nehmer rules. For example, if a DIC
claimant did not qualify as a surviving spouse at the time of the prior
DIC claim, VA would lack authority to pay DIC to the claimant for
periods relevant to such claim, even if the claimant later attains the
status of a surviving spouse, based, for example, upon termination of
remarriage. The Nehmer court orders require VA to give retroactive
effect to its herbicide regulations, but do not purport to eradicate
statutory bars to benefits that would preclude payment even if the
herbicide regulations apply retroactively.
Proposed paragraph (e)(2) would explain the effect of section 505
of Public Law 104-275, which prohibits VA from making retroactive
payments in certain circumstances where a benefit award is based on
service in the Republic of Vietnam prior to August 5, 1964. Prior to
January 1, 1997, the presumptions of service connection for diseases
associated with herbicide exposure applied only to veterans who served
in the Republic of Vietnam during the Vietnam era, which was then
defined by statute and regulation to encompass the period beginning on
August 5, 1964 and ending on May 7, 1975. In 1996, Congress enacted
Public Law 104-275, section 505(b) of which extended those presumptions
to veterans who served in the Republic of Vietnam during the period
between January 9, 1962, and August 4, 1964. Congress specified, in
section 505(d) of Public Law 104-275, that the amendment would take
effect on January 1, 1997, and that ``[n]o benefit may be paid or
provided by reason of such amendments for any period before such
date.'' Accordingly, some claims may have been denied prior to January
1, 1997, because the claimants' service did not meet the then-existing
statutory requirement of service during the Vietnam era. Although some
such claimants may now be entitled to presumptive service connection
under the liberalizing 1996 statute, Congress has prohibited VA from
paying retroactive benefits based on the amendment made by Public Law
104-275.
We propose to state that the retroactive payment provisions of
these proposed rules do not apply if the veteran's Vietnam service
ended before August 5, 1964 and the class member's prior claim for
benefits was denied by VA before January 1, 1997. In such cases, the
denial was required by statute and VA is prohibited from paying
retroactive benefits based on the prior claim. We propose to state that
the effective date of any subsequent award in such cases will be
governed by 38 U.S.C. 5110(g). We further propose to state that, if a
veteran's Vietnam service ended before August 5, 1964 and the class
member's claim for benefits was pending on or was received by VA after
January 1, 1997, the effective date shall be the later of the effective
date provided for in the proposed rules or January 1, 1997. This would
conform to the requirement in Public Law 104-275 that VA may not pay
benefits in such cases for any period before January 1, 1997.
Payment of Benefits to Survivors of Deceased Beneficiaries
1. Requirements of the Nehmer Court Orders
In its December 12, 2000 order, the district court held that, when
a Nehmer class member entitled to retroactive benefits under the Nehmer
stipulation and order dies prior to receiving payment of such benefits,
VA must pay the full amount of such benefits to the class member's
estate. Under 38 U.S.C. 5121 and 38 CFR 3.1000, when any monetary
benefits remain due and unpaid at the time of a beneficiary's death, VA
may pay to certain individuals only the portion of such benefits that
accrued during the two-year period preceding death. Further, VA cannot
pay any such accrued benefits unless the appropriate payee files a
claim for accrued benefits within one year after the date of death.
However, the Nehmer court held that these restrictions do not apply to
payments of amounts payable pursuant to the Nehmer stipulation and
order. Rather, the court held that VA must pay the entire amount of
such retroactive payment to the class member's estate and must do so
without requiring a claim for accrued benefits.
2. Persons Eligible for Payments
In implementing the court's order, VA found that it was impractical
in most cases to pay retroactive benefits to a class member's estate.
Although VA claims files ordinarily contain information identifying
persons who would be eligible for accrued benefits under section 5121
of title 38, United States Code, they generally do not contain
information concerning the estates of veterans and other class members.
Further, in a substantial number of cases, entitlement to retroactive
payments under the Nehmer stipulation and order is established several
months or even years after the class member's death, at a time when the
decedent's estate would have been finally settled. In such cases, there
may be no existing estate to receive payment. Even if an estate exists,
paying benefits to the estate would arguably contravene the fundamental
purpose of the veterans' benefits laws to provide payments for the use
of the veteran and his or her family. Section 5121 provides that
accrued benefits shall be paid to the decedent's surviving spouse,
children, or dependent parents (in that line of succession), but does
not permit payment to a decedent's estate. Although this statute limits
the amount of accrued benefits payable, it clearly indicates that the
accrued benefits are intended for the use of the decedent's family
rather than the decedent's estate and creditors. If benefits were paid
to a decedent's estate, they would potentially be subject to claims of
creditors of the estate, with the possibility that the decedent's
family would obtain no benefit from such payments. This would
improperly deprive the decedent's family of the benefits expressly
authorized by section 5121(a) (to the extent the payment to the estate
encompassed benefits due and unpaid for the two-year period preceding
death), and would contravene the general purpose of veterans benefits
laws to provide benefits for the personal use of the veteran and his or
her family.
After consulting with representatives of the Nehmer class, VA
decided to issue payment directly to the persons who would have been
eligible to receive accrued benefits under 38 U.S.C. 5121(a) at the
time of the class member's death, rather than withholding all payment.
We believe this procedure is consistent with the purpose of the Nehmer
court orders and is more beneficial to class members, in view of the
impracticability of locating and paying estates and the possibility
that payments to estates may not inure to the benefit of the class
member's survivors. We also believe that this procedure ensures that
payments are made in the
[[Page 4138]]
manner most consistent with the language and purpose of existing law.
Consistent with this practice, we propose to state in paragraph
3.816(f)(1) that, if a Nehmer class member dies prior to receiving
payment of retroactive benefits due pursuant to the Nehmer stipulation
and order, VA will pay the full amount of such unpaid benefits directly
to the person or persons who would have been eligible to receive
accrued benefits under 38 U.S.C. 5121(a)(2)-(a)(4) at the time of the
class member's death (i.e., the class member's spouse, children (in
equal shares), or dependent parents (in equal shares), in that order of
preference). If no such survivors are in existence, VA would pay as
much of the unpaid retroactive benefits as necessary to reimburse the
person who bore the expense of the class member's last sickness and
burial, in the same manner as provided in 38 U.S.C. 5121(a)(5) for
accrued benefits.
Paragraph (f)(1) would further provide that a person's status as
the spouse, child, or dependent parent of the class member would be
determined as of the date of the class member's death, rather than the
date that payment is made under this rule. As noted above, some class
members may have died several months or years before payment can be
made under these rules. Due to the lapse of time, a person who
qualified as the class member's spouse or child on the date of the
class member's death may no longer meet the statutory or regulatory
definition of spouse or child, due to changes in their age or marital
status. For example, a ``child'' is generally defined in 38 U.S.C.
101(4)(A) to refer to an unmarried child who is (with certain
exceptions) under the age of eighteen years. A person who met this
definition on the date of a class member's death may have married or
attained the age of eighteen years before VA releases payment of unpaid
retroactive benefits due to the class member. Because the Nehmer court
orders were generally intended to correct past errors, we propose to
authorize payment to persons who would have been eligible for payment
as a spouse, child, or dependent parent on the date of the class
member's death, irrespective of subsequent changes in age or marital
status that would otherwise affect their entitlement to payment.
In view of language in the Nehmer court's order requiring payments
to estates, however, we believe it is necessary to seek an order from
that court clarifying or modifying its prior order to make clear that
VA may release payments in the manner proposed. Accordingly, we intend
to request such an order from the district court concurrently with the
publication of these proposed rules.
3. Inapplicability of Certain Accrued Benefit Requirements
As stated above, the district court indicated that the statutory
two-year limit on payment of accrued benefits and the statutory
requirement that a qualified payee or payees file a claim for accrued
benefits do not apply to payments of retroactive benefits due and
unpaid to a Nehmer class member at the time of death. Accordingly, we
propose to state, in paragraph (f)(2), that those requirements do not
apply. We further propose to state that, if a class member dies before
receiving payment of retroactive benefits due to him or her, VA will
pay the amount to the known payee(s) without requiring a claim. A
veteran's VA claim file will often contain information identifying the
surviving spouse, children, or parents of a class member. By clarifying
that VA will release payment based on such information without awaiting
communication from such survivors, this provision would permit
expeditious release of payments.
4. Identifying Payees
We propose to state, in paragraph (f)(3), that VA shall make
reasonable efforts to identify appropriate payees based on information
contained in the veteran's claims file. We propose to state that, if
further information is needed to determine whether an appropriate payee
exists, or whether there is any person having precedence equal to or
greater than a known survivor, VA will request such information from a
known survivor or the class member's authorized representative if the
claims file contains sufficient contact information. We also propose to
state that, before releasing payment to a known survivor, VA will
request information from the survivor concerning the possible existence
of other survivors with equal or greater priority for payment, unless
the circumstances clearly indicate that such a request is unnecessary.
For example, if the claims file contained the name and address of a
child of the deceased class member, VA would contact the child to
inquire whether there is a surviving spouse or any other children of
the class member in existence. In seeking to identify appropriate
payees, VA necessarily must rely on information in the claims file. VA
does not have the resources to conduct independent investigations of
estate issues.
We propose to state that, after making reasonable efforts to
identify the appropriate payee(s), if VA releases the full amount of
retroactive payments to a payee, VA generally may not thereafter pay
any portion of such benefits to any other individual, unless VA is able
to recover any payment previously released.
5. Prohibition On Duplicate Payments
We propose to state, in paragraph (f)(4), that, payment of benefits
pursuant to this rule shall bar a later claim by any individual for
payment of all or any part of such benefits as accrued benefits under
38 U.S.C. 5121 and 38 CFR 3.1000. The district court ordered VA to
release all retroactive amounts due a class member at the time of death
under the Nehmer stipulation and order. This would necessarily include
amounts that otherwise would be payable as accrued benefits under 38
U.S.C. 5121. Accordingly, once payment has been made pursuant to the
court's order, no retroactive benefits would remain for payment to any
person as accrued benefits. Inasmuch as this rule applies only to
retroactive benefits payable for a covered herbicide disease pursuant
to the 1991 stipulation and order, it would not preclude a survivor's
right to seek accrued benefits under section 5121 in the event a
deceased class member was entitled at death to benefits for conditions
other than a covered herbicide disease.
Awards Not Covered by the Nehmer Rules
We propose to state, in Sec. 3.816(g), that the provisions of this
rule do not apply to awards of disability compensation or DIC for
disability or death due to a disease for which the Secretary of
Veterans Affairs establishes a presumption of service connection after
September 30, 2002. The Nehmer stipulation and order applies to awards
based on diseases for which the Secretary establishes a presumption of
service connection pursuant to the Agent Orange Act of 1991, Public Law
102-4. The Act established a sunset date of September 30, 2002, for the
Secretary to establish such presumptions. Accordingly, the Nehmer
stipulation and order applies only to awards based on presumptions
established within the time frame specified in the Agent Orange Act of
1991, Public Law 102-4.
The Agent Orange Act of 1991, Public Law 102-4, added section 1116
to title 38, United States Code. Section 1116(b) authorized the
Secretary of Veterans Affairs to issue regulatory presumptions of
service connection for diseases associated with herbicide exposure.
Section 1116(e), as added by the Act, stated that section 1116(b) would
cease
[[Page 4139]]
to be effective 10 years after the first day of the fiscal year in
which the NAS transmitted its first report to VA. The first NAS report
was transmitted in June 1993, during the fiscal year that began on
October 1, 1992. Accordingly, under the Act, VA's authority to issue
regulatory presumptions as specified in section 1116(b) would have
expired on September 30, 2002.
In December 2001, Congress enacted the Veterans Education and
Benefits Expansion Act of 2001 (Benefits Expansion Act), Public Law
107-103, section 201(d) of which extended VA's authority under section
1116(b) through September 30, 2015. Pursuant to this statute, VA may
issue new regulations between October 1, 2002 and September 30, 2015
establishing additional presumptions of service connection for diseases
that are found to be associated with herbicide exposure based on
evidence contained in future NAS reports. Because presumptions
established pursuant to the authority of the Benefits Expansion Act
would be beyond the scope of the Nehmer stipulation and order, the
effective-date provisions of the stipulation and order, as stated in
this proposed rule, would not apply to claims based on diseases
service-connected pursuant to the Benefits Expansion Act of 2001.
Both the district court and the Court of Appeals for the Ninth
Circuit stated that the Nehmer stipulation and order applies only to
awards based on presumptions issued within the time period established
by the Agent Orange Act of 1991, Public Law 102-4. The district court
noted that the retroactive payment provisions of the stipulation and
order are ``expressly tied'' to the Agent Orange Act of 1991, Public
Law 102-4, and that ``the Stip. & Order is not therefore boundless.''
Nehmer v. United States Department of Veterans Affairs, No. CV-86-6160
TEH (N.D. Cal. Dec. 12, 2000). In a decision issued April 1, 2002, the
Ninth Circuit stated that, ``the district court was careful to
prescribe temporal limits on the effect of the consent decree, with
which we agree.'' Nehmer v. Veterans' Administration, 284 F.3d 1158,
1162 n.3. (9th Cir. 2002), reh'g denied.
In its December 12, 2000, order, the district court held that the
1991 stipulation and order must be interpreted in accordance with
general principles of contract law. It is well established that, unless
the parties provide otherwise, a contract is presumed to incorporate
the law that existed at the time the contract was made. See Norfolk &
Western Ry. Co. v. American Train Dispatchers' Ass'n, 499 U.S. 117,
129-30 (1991). A subsequent change in the law cannot retrospectively
alter the terms of the agreement. See Florida East Coast Ry. Co. v. CSX
Transportation, Inc., 42 F.3d 1125, 1129-30 (7th Cir. 1994).
Accordingly, the enactment of the Benefits Expansion Act of 2001 does
not alter the scope of the 1991 stipulation and order.
Because the Benefits Expansion Act of 2001, Public Law 107-103,
established rights and duties that did not exist under the Agent Orange
Act of 1991, Public Law 102-4, any regulations issued pursuant to the
authority of the Benefits Expansion Act of 2001 are beyond the express
scope of the Nehmer stipulation and order. Accordingly, the stipulation
and order provides no authority for VA to pay retroactive benefits
under such regulations in a manner contrary to the governing statutes
and regulations concerning the effective dates of awards. Proposed
paragraph 3.406(g) would reflect this fact. This provision would make
clear that awards based on regulations issued pursuant to the Benefits
Expansion Act of 2001 would be governed by the generally applicable
provisions governing the effective dates of benefit awards.
Executive Order 12866
This regulatory amendment has been reviewed by the Office of
Management and Budget under the provisions of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993.
Paperwork Reduction Act
This document contains no provisions constituting a collection of
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).
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.
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. The reason for this certification is that these
amendments would not directly affect any small entities. Only VA
beneficiaries and their survivors could be directly affected.
Therefore, pursuant to 5 U.S.C. 605(b), these amendments are exempt
from the initial and final regulatory flexibility analysis requirements
of sections 603 and 604.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance program numbers are
64.109, and 64.110.
List of Subjects in 38 CFR Part 3
Administrative practice and procedure, Claims, Disability benefits,
Herbicides, Veterans, Vietnam.
Approved: November 4, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.
For the reasons set forth in the preamble, 38 CFR part 3 is
proposed to be amended as follows:
PART 3--ADJUDICATION
Subpart A--Pension, Compensation, and Dependency and Indemnity
Compensation
1. The authority citation for part 3, subpart A continues to read
as follows:
Authority: 38 U.S.C. 501(a), unless otherwise noted.
2. Section 3.816 is added to read as follows:
Sec. 3.816 Awards under the Nehmer Court Orders for disability or
death caused by a condition presumptively associated with herbicide
exposure.
(a) Purpose. This section states effective-date rules required by
orders of a United States district court in the class-action case of
Nehmer v. United States Department of Veterans Affairs, No. CV-86-6160
TEH (N.D. Cal.).
(b) Definitions. For purposes of this section'
(1) Nehmer class member means:
(i) A Vietnam veteran who has a covered herbicide disease; or
(ii) A surviving spouse, child, or parent of a deceased Vietnam
veteran who died from a covered herbicide disease.
(2) Covered herbicide disease means a disease for which the
Secretary of Veterans Affairs has established a presumption of service
connection before October 1, 2002 pursuant to the Agent Orange Act of
1991, Public Law 102-4, other than chloracne. Those diseases are:
(i) Type 2 Diabetes (Also known as type II diabetes mellitus or
adult-onset diabetes).
(ii) Hodgkin's disease.
(iii) Multiple myeloma.
(iv) Non-Hodgkin's lymphoma.
[[Page 4140]]
(v) Acute and Subacute peripheral neuropathy.
(vi) Porphyria cutanea tarda.
(vii) Prostate cancer.
(viii) Respiratory cancers (cancer of the lung, bronchus, larynx,
or trachea).
(ix) Soft-tissue sarcoma (as defined in Sec. 3.309(e)).
(c) Effective date of disability compensation. If a Nehmer class
member is entitled to disability compensation for a covered herbicide
disease, the effective date of the award will be as follows:
(1) If VA denied compensation for the same covered herbicide
disease in a decision issued between September 25, 1985 and May 3,
1989, the effective date of the award will be the later of the date VA
received the claim on which the prior denial was based or the date the
disability arose, except as otherwise provided in paragraph (c)(3) of
this section. A prior decision will be construed as having denied
compensation for the same disease if the prior decision denied
compensation for a disease that reasonably may be construed as the same
covered herbicide disease for which compensation has been awarded.
Minor differences in the terminology used in the prior decision will
not preclude a finding, based on the record at the time of the prior
decision, that the prior decision denied compensation for the same
covered herbicide disease.
(2) If the class member's claim for disability compensation for the
covered herbicide disease was either pending before VA on May 3, 1989,
or was received by VA between that date and the effective date of the
statute or regulation establishing a presumption of service connection
for the covered disease, the effective date of the award will be the
later of the date such claim was received by VA or the date the
disability arose, except as otherwise provided in paragraph (c)(3) of
this section. A claim will be considered a claim for compensation for a
particular covered herbicide disease if the claimant's application and
other supporting statements and submissions may reasonably be viewed,
under the standards ordinarily governing compensation claims, as
indicating an intent to apply for compensation for the covered
herbicide disability.
(3) If the class member's claim referred to in paragraph (c)(1) or
(c)(2) of this section was received within one year from the date of
the class member's separation from service, the effective date of the
award shall be the day following the date of the class member's
separation from active service.
(4) If the requirements of paragraph (c)(1) or (c)(2) of this
section are not met, the effective date of the award shall be
determined in accordance with Sec. Sec. 3.114 and 3.400.
(d) Effective date of dependency and indemnity compensation (DIC).
If a Nehmer class member is entitled to DIC for a death due to a
covered herbicide disease, the effective date of the award will be as
follows:
(1) If VA denied DIC for the death in a decision issued between
September 25, 1985 and May 3, 1989, the effective date of the award
will be the later of the date VA received the claim on which such prior
denial was based or the date the death occurred, except as otherwise
provided in paragraph (d)(3) of this section.
(2) If the class member's claim for DIC for the death was either
pending before VA on May 3, 1989, or was received by VA between that
date and the effective date of the statute or regulation establishing a
presumption of service connection for the covered herbicide disease
that caused the death, the effective date of the award will be the
later of the date such claim was received by VA or the date the death
occurred, except as otherwise provided in paragraph (d)(3) of this
section. In accordance with Sec. 3.152(b)(1), a claim by a surviving
spouse or child for death pension will be considered a claim for DIC.
In all other cases, a claim will be considered a claim for DIC if the
claimant's application and other supporting statements and submissions
may reasonably be viewed, under the standards ordinarily governing DIC
claims, as indicating an intent to apply for DIC.
(3) If the class member's claim referred to in paragraph (d)(1) or
(d)(2) of this section was received within one year from the date of
the veteran's death, the effective date of the award shall be the first
day of the month in which the death occurred.
(4) If the requirements of paragraph (d)(1) or (d)(2) of this
section are not met, the effective date of the award shall be
determined in accordance with Sec. Sec. 3.114 and 3.400.
(e) Effect of other provisions affecting retroactive entitlement.--
(1) General. If the requirements specified in paragraphs (c)(1) or
(c)(2) or (d)(1) or (d)(2) of this section are satisfied, the effective
date shall be assigned as specified in those paragraphs, without regard
to the provisions in 38 U.S.C. 5110(g) or Sec. 3.114 prohibiting
payment for periods prior to the effective date of the statute or
regulation establishing a presumption of service connection for a
covered herbicide disease. However, the provisions of this section will
not apply if payment to a Nehmer class member based on a claim
described in paragraph (c) or (d) of this section is otherwise
prohibited by statute or regulation, as, for example, where a class
member did not qualify as a surviving spouse at the time of the prior
claim or denial.
(2) Claims Based on Service in the Republic of Vietnam Prior To
August 5, 1964. If a claim referred to in paragraph (c) or (d) of this
section was denied by VA prior to January 1, 1997, and the veteran's
service in the Republic of Vietnam ended before August 5, 1964, the
effective-date rules of this regulation do not apply. The effective
date of benefits in such cases shall be determined in accordance with
38 U.S.C. 5110. If a claim referred to in paragraph (c) or (d) of this
section was pending before VA on January 1, 1997, or was received by VA
after that date, and the veteran's service in the Republic of Vietnam
ended before August 5, 1964, the effective date shall be the later of
the date provided by paragraph (c) or (d) of this section or January 1,
1997.
(Authority: Pub. L. 104-275, sec. 505)
(f) Payment of Benefits to Survivors of Deceased Beneficiaries.--
(1) General. If a Nehmer class member entitled to retroactive benefits
pursuant to paragraphs (c)(1) through (c)(3) or (d)(1) through (d)(3)
of this section dies prior to receiving payment of any such benefits,
VA shall pay such unpaid retroactive benefits as follows:
(i) VA will pay the full amount of unpaid retroactive benefits to
the living person or persons who, at the time of the class member's
death, would have been eligible to receive payment of any accrued
benefits under 38 U.S.C. 5121(a)(2)-(a)(4). For purposes of this
paragraph, a person's status as the spouse, child, or dependent parent
of a veteran shall be determined as of the date of the class member's
death, irrespective of the person's age or marital status at the time
payment is made under this section. The determination shall be based on
evidence on file at the date of death. If the person or persons who
would have been eligible to receive accrued benefits at the time of the
class member's death are now deceased, VA shall pay the full amount of
unpaid retroactive benefits to the living person or persons who were
next in priority under 38 U.S.C. 5121(a)(2)-(a)(4) at the time of the
class member's death.
(ii) If there is no living person eligible for payment under
paragraph (f)(1)(i) of this section, VA will pay to the person who bore
the expense of the class member's last sickness and burial only
[[Page 4141]]
such portion of the unpaid retroactive benefits as is necessary to
reimburse the person for such expense.
(2) Inapplicability of certain accrued benefit requirements. The
provisions of 38 U.S.C. 5121(a) and Sec. 3.1000(a) limiting payment of
accrued benefits to amounts due and unpaid for a period not to exceed
two years do not apply to payments under this section. The provisions
of 38 U.S.C. 5121(c) and Sec. 3.1000(c) requiring survivors to file
claims for accrued benefits also do not apply to payments under this
section. When a Nehmer class member dies prior to receiving retroactive
payments under this section, VA will pay the amount to an identified
payee in accordance with paragraph (f)(1) of this section without
requiring an application from the payee. Prior to releasing such
payment, however, VA may ask the payee to provide further information
as specified in paragraph (f)(3) of this section.
(3) Identifying Payees. VA shall make reasonable efforts to
identify the appropriate payee(s) under paragraph (f)(1) of this
section based on information in the veteran's claims file. If further
information is needed to determine whether any appropriate payee exists
or whether there are any persons having equal or higher precedence than
a known prospective payee, VA will request such information from a
survivor or authorized representative if the claims file provides
sufficient contact information. Before releasing payment to an
identified payee, VA will ask the payee to state whether there are any
other survivors of the class member who may have equal or greater
entitlement to payment under this section, unless the circumstances
clearly indicate that such a request is unnecessary. If, following such
efforts, VA releases the full amount of unpaid benefits to a payee, VA
may not thereafter pay any portion of such benefits to any other
individual, unless VA is able to recover the payment previously
released.
(4) Bar to accrued benefit claims. Payment of benefits pursuant to
paragraph (f)(1) of this section shall bar a later claim by any
individual for payment of all or any part of such benefits as accrued
benefits under 38 U.S.C. 5121 and Sec. 3.1000.
(g) Awards covered by this section. This section applies only to
awards of disability compensation or DIC for disability or death caused
by a disease listed in paragraph (b)(2) of this section.
(Authority: 38 U.S.C. 501)
[FR Doc. 03-1834 Filed 1-27-03; 8:45 am]
BILLING CODE 8320-01-P