[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Proposed Rules]
[Pages 93649-93653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30509]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AP23


Special Monthly Compensation for Veterans With Traumatic Brain 
Injury

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Veterans Affairs (VA) seeks to amend its 
adjudication regulations to add an additional benefit for veterans with 
residuals of traumatic brain injury (TBI). This benefit was enacted by 
the Veterans' Benefits Act of 2010 and provides special monthly 
compensation for veterans with TBI who are in need of aid and 
attendance and, in the absence of such aid and attendance, would 
require hospitalization, nursing home care, or other residential 
institutional care. Prior to the law's enactment, veterans with TBI 
were not eligible for this benefit unless they had a separate service-
related disability that qualified under the law.

DATES: Comments must be received on or before February 21, 2017.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to Director, Regulation 
Policy and Management (00REG), Department of Veterans Affairs, 810 
Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202) 
273-9026. Comments should indicate that they are submitted in response 
to ``RIN 2900-AP23--Special Monthly Compensation for Veterans with 
Traumatic Brain Injury.'' Copies of comments received will be available 
for public inspection in the Office of Regulation Policy and 
Management, Room 1068, between the hours of 8:00 a.m. and 4:30 p.m., 
Monday through Friday (except holidays). Please call (202) 461-4902 for 
an appointment. (This is not a toll-free number.) In addition, during 
the comment period, comments may be viewed online through the Federal 
Docket Management System (FDMS) at www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Eric G. Mandle, Policy Analyst, 
Regulations Staff (211D), Compensation Service, Department of Veterans 
Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-9700. 
(This is not a toll-free telephone number.)

SUPPLEMENTARY INFORMATION: On October 13, 2010, the Veterans' Benefits 
Act of 2010, Public Law 111-275 (the Act) was signed into law. Section 
601 of the Act amends 38 U.S.C. 1114, adding subsection (t) to include 
special monthly compensation (SMC) for veterans who as the result of 
service-connected disability, are in need of regular aid and attendance 
for the residuals of traumatic brain injury (TBI), and in the absence 
of such regular aid and attendance would require hospitalization, 
nursing home care, or other residential institutional care. The law 
grants an additional monetary allowance for veterans with residuals of 
TBI who require this higher level of care but would not otherwise 
qualify for the benefit under 38 U.S.C. 1114(r)(2). The amendment 
became effective October 1, 2011.
    VA administers SMC benefits under 38 CFR 3.350. Additionally, 38 
CFR

[[Page 93650]]

3.352 provides the criteria to determine the need for aid and 
attendance and whether a claimant is permanently bedridden; 38 CFR 
3.552 requires adjustments of allowance for aid and attendance when a 
beneficiary is hospitalized. Internal guidance has been published since 
April 4, 2011, instructing VA offices engaged in claims adjudication on 
how to implement the new SMC provision, but a formal update to VA's 
adjudication regulations has not yet been published.

I. VA Interpretation of Public Law 111-275

    Under this proposed rule, VA will directly implement 38 U.S.C. 
1114(t), which states that an additional award of SMC is payable to a 
veteran who, as the result of service-connected disability, is in need 
of regular aid and attendance for the residuals of traumatic brain 
injury, is not eligible for additional compensation under 38 U.S.C. 
1114(r)(2), and in the absence of such regular aid and attendance would 
require hospitalization, nursing home care, or other residential 
institutional care. VA would also make clear that a veteran entitled to 
this benefit shall be paid during periods he or she is not hospitalized 
at United States Government expense as if receiving the amount equal to 
the compensation authorized under 38 U.S.C. 1114(o) or the maximum rate 
authorized under 38 U.S.C. 1114(p) and, in addition to such 
compensation, a monthly allowance equal to the rate described in 38 
U.S.C. 1114(r)(2).
    VA believes that there are two potential readings of the Act. Under 
the first, more restrictive reading, a veteran affected by section 
1114(t) would receive only the rate noted under 38 U.S.C. 1114(r)(2), 
e.g., $2,983, in addition to any other rate of special monthly 
compensation the individual in question might happen to qualify for. 
Reading the Act in this way, however, would result in benefits that are 
less than the amount to which other veterans requiring the same level 
of care not related to TBI would be entitled. This is because the 
predicate rates built into section 1114(r), such as the rate authorized 
by subsection (o), the maximum rate authorized under subsection (p), or 
the intermediate rate authorized under subsections (n) and (o), will 
not typically be met for veterans suffering from TBI, rather than the 
other conditions enumerated in section 1114.
    Under the second, more liberal interpretation of section 1114(t), 
VA would pay veterans who meet the criteria of section 1114(t) the full 
amount described by section 1114(r) (i.e., the rate authorized by 
subsection (o), which is also the maximum rate authorized under 
subsection (p), in addition to the allowance authorized by subsection 
(r)). The statutory language, viewed together with its purpose and 
legislative history, can be interpreted as establishing that Congress 
intended that veterans receiving the aid and attendance allowance 
authorized by subsection (r)(2) necessarily also qualify for the 
predicate rates described in subsection (r).
    VA finds that Congress' intent was to enact a law that pays 
veterans of this class an amount equal to the compensation authorized 
under section 1114(o) or the maximum rate authorized under section 
1114(p), plus the additional amount described under section 1114(r)(2). 
VA chose the rates permitted under section 1114(o) and (p) because 
those are the highest rates permitted under section 1114 and therefore 
would be the most favorable rates for this group of veterans requiring 
this higher level of care.
    Textually, subsection (r) generally preconditions receipt of the 
heightened aid and attendance allowance under either subsection (r)(1) 
or (r)(2) on receipt of one of the predicate rates identified in 
subsection (r), which include the rates specified in (o) and (p). 
Additionally, subsection (r) makes clear that a veteran is receiving 
that heightened allowance ``in addition to'' the special monthly 
compensation otherwise described in subsection (r). VA has long 
interpreted subsection (r) as reflecting the assumption that a veteran 
is necessarily in receipt of one of the predicate rates described in 
the body of subsection (r) whenever a veteran is in receipt of the 
heightened aid and attendance allowance under either subsection (r)(1) 
or (r)(2). This interpretation is reflected in VA's current 
regulations. See 38 CFR 3.352(b)(1) (higher level of aid and attendance 
authorized by 38 CFR 3.350(h) requires that the veteran be ``entitled 
to the compensation authorized under [subsection (o),] or the maximum 
rate of compensation authorized under [subsection (p)].'').
    In support of this interpretation, VA notes that 38 U.S.C. 
1114(r)(2) provides additional compensation to those veterans with 
certain service-connected disabilities who are in need of a higher 
level of care. The legislative history for section 601 of Public Law 
111-275 indicates that subsection (t) is intended to provide additional 
compensation to veterans with TBI who do not have those qualifying 
service-connected disabilities and therefore are not otherwise eligible 
for benefits under (r)(2), but still require a higher level of care 
comparable to what would otherwise be contemplated by the allowance 
provided by (r)(2). See S. Rep. No. 111-71, at 17 (2009) (discussing 
the intent to provide the ting (r)(2) rate of compensation as evidence 
of Congress' intent to pay (t) aid and attendance at the rate commonly 
received by veterans entitled to (r)(2) payments. If Congress intended 
subsection (t) to confer a freestanding allowance, it is 
counterintuitive that Congress would link the allowance to (r)(2) 
rather than simply declaring that any veteran in need of regular aid 
and attendance for the residuals of TBI should receive a specified 
dollar amount. Instead, Congress chose to match the existing rate and 
aid and attendance requirements described under (r)(2). In so doing, 
Congress emphasized that the overall impairment and need for care are 
the same for those with TBI as they are for those with certain service-
connected disabilities who require a higher level of aid and 
attendance. S. Rep. 111-71 at *18.
    VA's interpretation of section 1114(t) would mean that the rate 
authorized by section 1114(o) and (p) is the ``other compensation under 
this section'' referenced in section 1114(t) for purposes of all cases 
under that section. We acknowledge that this interpretation imports a 
specfic meaning to the term ``other compensation'' that is not apparent 
on the face of that term. We find that this interpretation is warranted 
because interpreting the phrase ``other compensation under this 
section'' to refer only to other compensation for which the veteran 
independently qualifies would defeat the purpose of the legislation. 
The legislative history noted that 38 U.S.C. 1114(l) prescribes the 
basic monthy compensation amount for veterans in need of aid and 
attendance due to their service-connected disabilities and that section 
1114(r)(2) prescribes an ``additional'' monthly amount payable for 
veterans in need of a higher level of care. S. Rep. 111-71 at *17. 
Congress thus recognized that the needs of veterans who qualify for the 
(r)(2) rate are met by payment of both a basic monthly SMC rate, which 
generally would be provided under subsections (l) through (p) of 
section 1114 and the heightened aid and attendance payment under 
(r)(2). Congress determined that legislation was needed to extend 
similar benefits to veterans with TBI because the provisions of section 
1114 generally focus on physical disabilities and locomotion rather 
than cognitive or

[[Page 93651]]

psychological impairments associated with TBI. S. Rep. 111-71 at *17-
18.
    For the reasons stated in the legislative history, cognitive 
disability due to TBI generally would not qualify for the basic monthly 
SMC rates prescribed in section 1114(l)-(p). As a result, if the term 
``other compensation under this section,'' as used in section 1114(t) 
were construed to mean compensation for which the veteran otherwise 
qualifies without regard to section 1114(t), a substantial part of the 
benefits contemplated by (r)(2)--i.e., the basic monthly SMC rate--
would be unavailable in most cases covered by section 1114(t). Such an 
interpretation would defeat the statute's clear purpose in that it 
would, based on section 1114's focus on physical disability, provide 
veterans covered by section 1114(t) with a monthly benefit well below 
the amount Congress has determined necessary to provide for the needs 
of veterans requiring a heightened level of care under (r)(2). 
Accordingly, we believe section 1114(t) is most properly construed to 
permit payment of both the ``additional'' amount specified in (r)(2) 
and the predicate SMC rate specified in section 1114(o) and (p).
    VA finds the language of the amended statute to be ambiguous, but 
has determined that Congress intended to provide veterans in need of 
aid and attendance due to TBI residuals the same level of compensation 
as veterans entitled to the section 1114(r)(2) rate. See Chevron, 
U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-844 
(1984) (if Congress has not addressed ``the precise question at 
issue,'' a court should defer to an administering agency's construction 
of the statute so long as it is a ``permissible'' construction). VA 
believes its interpretation is the most logical one because it is 
unlikely that Congress would wish to bestow a lesser benefit on 
veterans with TBI than is applicable to veterans with certain service-
connected disabilities that might otherwise qualify for the (r)(2) 
allowance, while simultaneously emphasizing that veterans with TBI may 
be in a functionally similar situation. This interpretation is also the 
most advantageous to veterans with TBI who require a higher level of 
care.

II. Regulatory Amendment Mechanics

    This rulemaking proposes to amend Sec.  3.350 by adding paragraph 
(j), proposes to amend Sec.  3.352 by adding a new paragraph (b)(2) and 
revising the authority citation, and proposes to amend Sec.  3.552(b) 
by adding a reference to 38 U.S.C. 1114(t) to paragraph (b)(2) and 
revising the authority citation. Proposed paragraph (j) will set forth 
the general criteria prescribed by 38 U.S.C. 1114(t). Paragraph (j) 
would reference Sec.  3.352 to provide guidance on determining the need 
for aid and attendance. Paragraph (j)(1) would provide that a veteran 
shall be entitled to the amount equal to the compensation authorized 
under 38 U.S.C. 1114(o) or the maximum rate authorized under 38 U.S.C. 
1114(p) and, in addition to such compensation, a monthly allowance 
equal to the rate described in 38 U.S.C. 1114(r)(2) during periods he 
or she is not hospitalized at United States Government expense.
    In addition, to ensure consistency with current Sec.  3.350(h), VA 
proposes to reference revised Sec.  3.552(b)(2) under proposed Sec.  
3.350(j)(1). Section 3.552(b)(2) requires VA to discontinue the aid and 
attendance benefit following hospitalization at government expense. 
Proposed Sec.  3.350(j)(2) would note that an allowance under proposed 
paragraph (j) would be paid in lieu of any allowance authorized by 38 
U.S.C. 1114(r)(1).
    Section 3.352 governs the criteria for determining the need for aid 
and attendance and what is ``permanently bedridden'' for VA disability 
compensation purposes. VA proposes to amend Sec.  3.352 to regulate 
entitlement to a higher level of aid and attendance allowance for 
residuals of TBI. Specifically, we propose to redesignate paragraphs 
(b)(2) through (b)(5) of Sec.  3.352 as (b)(3) through (b)(6). 
Paragraph (b)(1)(iii) and newly redesignated paragraph (b)(4) of this 
section reference (b)(2). As such, those paragraphs would also be 
revised to reflect that (b)(2) would become (b)(3).
    This rulemaking also proposes to add a new paragraph (b)(2) to 
Sec.  3.352 stating that a veteran is entitled to the higher level of 
aid and attendance allowance for residuals of TBI, as authorized by 
Sec.  3.350(j), in lieu of the regular aid and attendance allowance. 
Entitlement would be found when the veteran meets the requirements for 
entitlement to the regular aid and attendance allowance in paragraph 
(a) of the section and when the veteran needs a higher level of care 
(as defined in redesignated paragraph (b)(3) of the section) than is 
required to establish entitlement to the regular aid and attendance 
allowance, and in the absence of the provision of such higher level of 
care would require hospitalization, nursing home care, or other 
residential institutional care.
    As previously discussed, VA has determined that Congress intended 
38 U.S.C. 1114(t) to provide total compensation equal to the total rate 
paid after factoring total compensation paid in (r)(2) cases, who also 
receive payment under subsections (o) or (p). VA therefore proposes to 
apply the same definition of a higher level of care when determining 
entitlement under proposed Sec.  3.350(j) as VA applies under Sec.  
3.350(h). Specifically, VA proposes to require that veterans entitled 
to SMC under section 1114(t) establish entitlement to the regular aid 
and attendance allowance in paragraph (a) of Sec.  3.352, as well as 
establish a requirement for a higher level of care, where, in the 
absence of the higher level of care, the veteran would require 
hospitalization, nursing home care, or other residential institutional 
care. These requirements mirror the current requirements for 
entitlement under Sec.  3.350(h) and Sec.  3.352(b). We would clarify 
in Sec.  3.352(b)(2)(i) and (ii) that the need for this higher level of 
aid and attendance must be as a result of service-connected residuals 
of traumatic brain injury. This requirement is consistent with the 
statutory language which requires that the veteran ``as a result of 
service-connected disability, is in need of regular aid and attendance 
for the residuals of [TBI].'' While the statutory language could be 
read to allow entitlement to section 1114(t) compensation to those 
veterans with any service-connected disability that also suffer from 
TBI residuals, VA believes that the phrase ``as a result of'' indicates 
Congress intended that the need for a higher level of aid and 
attendance for TBI residuals to be due to a service-connected 
disability. Further, the legislative history is clear that Congress 
intended section 1114(t) compensation to be provided to those veterans 
suffering from service-connected residuals of TBI. See Chevron, supra; 
see S. Rep. No. 111-71, at 17 (2009) (discussing that the committee 
bill ``would allow veterans suffering from severe TBIs to receive the 
highest level of aid and attendance benefits from VA''). We would also 
amend the authority citation for Sec.  3.352(b) to add section 1114(t).
    Lastly, VA proposes to amend 38 CFR 3.552(b)(2). Section 3.552 
regulates adjustments of allowance for aid and attendance. 
Specifically, paragraph (b)(2) states that ``[w]hen a veteran is 
hospitalized at the expense of the United States Government, the 
additional aid and attendance allowance authorized by 38 U.S.C. 
1114(r)(1) or (2) will be discontinued . . .''. To ensure consistency 
in its regulations, and to implement the conforming amendment of the 
Act, VA is amending that paragraph to include 38 U.S.C. 1114(t). This 
amendment is supported by the

[[Page 93652]]

plain language of the statute, which states ``[s]ubject to section 
5503(c) of this title.'' Section 5503(c) of title 38 United States Code 
governs hospitalization of veterans and states, in effect, the rule we 
propose to establish here. We would also amend the authority citation 
for Sec.  3.552(b). The current authority citation cites 38 U.S.C. 
5503(e); however, the Veterans Education and Benefits Expansion Act of 
2001, Public Law 107-103, 204(a), 115 Stat. 990, amended section 5503 
by redesignating section 5503(e) as section 5503(c). Therefore, we 
would revise the authority citation to reflect the accurate legal 
authority as 38 U.S.C. 5503(c).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action'' requiring review by the Office of 
Management and Budget (OMB), unless OMB waives such review, as ``any 
regulatory action that is likely to result in a rule that may: (1) Have 
an annual effect on the economy of $100 million or more or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities; (2) 
Create a serious inconsistency or otherwise interfere with an action 
taken or planned by another agency; (3) Materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) Raise novel legal 
or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of this rulemaking and its impact analysis are available on VA's Web 
site at http://www.va.gov/orpm/, by following the link for ``VA 
Regulations Published From FY 2004 Through Fiscal Year to Date.''

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would 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 proposed rule would directly affect only 
individuals and would not directly affect small entities. Therefore, 
pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, requires 
that agencies prepare an assessment of anticipated costs and benefits 
before issuing any rule that may result in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more (adjusted annually for inflation) in 
any one year. This proposed rule would have no such effect on State, 
local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This proposed rule contains no provisions constituting a collection 
of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3521).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.109, Veterans Compensation for 
Service-Connected Disability.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on December 13, 2016, for publication.

    Dated: December 13, 2016.
Jeffrey Martin,
Office Program Manager, Office of Regulation Policy & Management, 
Office of the Secretary, Department of Veterans Affairs.
    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 3 as set forth below:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

0
1. The authority citation for part 3, subpart A continues to read as 
follows:

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

0
2. Amend Sec.  3.350 to add paragraph (j) to read as follows:


Sec.  3.350  Special monthly compensation ratings.

* * * * *
    (j) Special aid and attendance benefit for residuals of traumatic 
brain injury (38 U.S.C. 1114(t)). The special monthly compensation 
provided by 38 U.S.C. 1114(t) is payable to a veteran who, as the 
result of service-connected disability, is in need of regular aid and 
attendance for the residuals of traumatic brain injury, is not eligible 
for compensation under 38 U.S.C. 1114(r)(2), and in the absence of such 
regular aid and attendance would require hospitalization, nursing home 
care, or other residential institutional care. Determination of this 
need is subject to the criteria of Sec.  3.352.
    (1) A veteran described in this paragraph (j) shall be entitled to 
the amount equal to the compensation authorized under 38 U.S.C. 1114(o) 
or the maximum rate authorized under 38 U.S.C. 1114(p) and, in addition 
to such compensation, a monthly allowance equal to the rate described 
in 38 U.S.C. 1114(r)(2) during periods he or she is not hospitalized at 
United States Government expense. (See Sec.  3.552(b)(2) as to 
continuance following admission for hospitalization.)
    (2) An allowance authorized under 38 U.S.C. 1114(t) shall be paid 
in lieu of any allowance authorized by 38 U.S.C. 1114(r)(1).


(Authority: 38 U.S.C. 501, 38 U.S.C. 1114(t))


0
3. Amend Sec.  3.352 by:
0
a. Redesignating paragraphs (b)(2) through (b)(5) as (b)(3) through 
(b)(6);
0
b. In paragraph (b)(1)(iii), removing the phrase ``paragraph (b)(2)'' 
and in its place adding the phrase ``paragraph (b)(3)'';
0
c. Adding new paragraph (b)(2);

[[Page 93653]]

0
d. In redesignated paragraph (b)(4), removing the phrase ``paragraph 
(b)(2)'' and in its place adding the phrase ``paragraph (b)(3)''; and
0
e. In the authority citation at the end of paragraph (b), adding 
``1114(t)''.
    The addition and revision reads as follows:


Sec.  3.352  Criteria for determining need for aid and attendance and 
``permanently bedridden.''

* * * * *
    (b)(1) * * *
    (2) A veteran is entitled to the higher level aid and attendance 
allowance authorized by Sec.  3.350(j) in lieu of the regular aid and 
attendance allowance when all of the following conditions are met:
    (i) As a result of service-connected residuals of traumatic brain 
injury, the veteran meets the requirements for entitlement to the 
regular aid and attendance allowance in paragraph (a) of this section.
    (ii) As a result of service-connected residuals of traumatic brain 
injury, the veteran needs a ``higher level of care'' (as defined in 
paragraph (b)(3) of this section) than is required to establish 
entitlement to the regular aid and attendance allowance, and in the 
absence of the provision of such higher level of care the veteran would 
require hospitalization, nursing home care, or other residential 
institutional care.
     * * *

(Authority: 38 U.S.C. 501, 1114(r)(2), 1114(t))

* * * * *
0
4. Amend Sec.  3.552(b) by:
0
a. In paragraph (b)(2), adding the phrase ``or 38 U.S.C. 1114(t)'' 
after the phrase ``authorized by 38 U.S.C. 1114(r)(1) or (2)''; and
0
b. At the end of paragraph (b), revising the authority citation.
    The revision read as follows:


Sec.  3.552  Adjustment of allowance for aid and attendance.

* * * * *

(Authority: 38 U.S.C. 5503(c))

* * * * *
[FR Doc. 2016-30509 Filed 12-20-16; 8:45 am]
BILLING CODE 8320-01-P