[Federal Register Volume 87, Number 235 (Thursday, December 8, 2022)]
[Proposed Rules]
[Pages 75196-75199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26672]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 38

RIN 2900-AR36


Allowances for Caskets and Urns for Unclaimed Remains of Veterans

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to revise its 
regulation that governs the program that furnishes caskets and urns for 
the burial of remains of veterans with no known next-of-kin (NOK) where 
sufficient resources are not available for this purpose. First, VA 
proposes to implement the Charles Duncan Buried with Honor Act of 2016 
that expanded the casket and urn authority to apply to eligible veteran 
burials in State and Tribal cemeteries that received a VA cemetery 
grant. Further, VA proposes to issue flat-rate allowances for caskets 
and urns rather than calculate the average cost for those items on an 
annual basis. Using flat-rate allowances would promote consistency and 
efficiency in the administration of this program. Additionally, we 
propose an update to the casket specifications based on feedback from 
funeral directors and other funeral industry professionals. Finally, VA 
proposes to amend the regulation by eliminating the retroactive 
reimbursement provisions. This change would reflect the fact that these 
provisions are no longer needed because the relevant applicability 
period has passed.

DATES: Comments must be received by VA on or before February 6, 2023.

ADDRESSES: Comments must be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: https://www.regulations.gov. VA will not post on 
Regulations.gov public comments that make threats to individuals or 
institutions or suggest that the commenter will take actions to harm an 
individual. VA encourages individuals not to submit duplicative 
comments. We will post acceptable comments from multiple unique 
commenters even if the content is identical or nearly identical to 
other comments. Any public comment received after the comment period's 
closing date is considered late and will not be considered in the final 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Daniel Catron, Supervisory Program 
Analyst, National Cemetery Administration, Department of Veterans 
Affairs, 810 Vermont Avenue NW, Washington, DC 20420; 
[email protected], telephone: (314) 416-6324 (this is not a toll-
free number).

SUPPLEMENTARY INFORMATION:

Implementing Regulations for Statutory Program Expansion

    Section 2306(f) of title 38, United States Code (U.S.C.), 
authorizes VA to furnish a casket or urn for burial of the unclaimed 
remains of veterans for whom VA cannot identify the NOK and determines 
that sufficient resources for the furnishing of a casket or urn for 
burial are not available. In 2016, Congress authorized an expansion of 
the casket and urn program to include VA grant-funded State and Tribal 
veterans' cemeteries. Therefore, burial of an eligible veteran must 
take place in a VA national cemetery or a veterans' cemetery of a State 
or Tribal Organization for which VA has provided a grant under 38 
U.S.C. 2408. VA proposes to amend its regulations in 38 CFR 38.628 to 
reflect the expanded scope of the program. To implement this change, we 
propose to revise the introductory text of paragraph (a) and the text 
of paragraph (c)(1) of Sec.  38.628.

[[Page 75197]]

Flat-Rate Allowances

    Consistent with other VA burial-related benefits, VA proposes to 
pay flat-rate allowances to individuals or entities that purchase 
caskets and urns for burial of unclaimed remains of veterans who die 
without NOK and sufficient resources for burial. Under current Sec.  
38.628(a), VA will reimburse any individual or entity for the actual 
cost of a casket or urn purchased for an eligible veteran, and under 
Sec.  38.628(d), reimbursements will be capped by the average market 
cost for a 20-gauge metal casket or a durable urn during the fiscal 
year preceding the calendar year of the claim. In this proposed rule, 
VA would replace reimbursements based on actual costs capped by annual 
average market prices with flat-rate allowances that are based on 
historical payment averages.
    Since the inception of the casket and urn reimbursement program 
eight years ago, VA has received feedback from funeral homes expressing 
dissatisfaction with VA's annual calculations of the average market 
costs, which many have stated do not reflect what they normally charge 
private individuals and entities, because the calculations do not 
include commercial mark-ups for caskets or urns. VA appreciates this 
input. We note that the purpose of the casket and urn program is to 
offset costs for individuals and entities that bring eligible veterans 
to VA national and grant-funded cemeteries, and not to purchase caskets 
or urns from funeral homes at the same rates funeral homes would charge 
in connection with commercial funerals or to reimburse the full cost of 
caskets and urns that may far exceed the regulatory standards. In order 
to avoid confusion regarding the ``actual cost'' standard, VA clarified 
the regulation by requiring that actual costs be shown by invoices 
reflecting the purchase price of the casket or urn purchased by the 
individual or entity requesting reimbursement.
    Funeral homes have also expressed a lack of confidence in VA's 
annual average market cost calculations, given the wide variance in the 
maximum reimbursement rates from year to year. VA acknowledges the 
variations in the calculated maximum rates do not reflect actual 
variations in market costs over the same period, which have remained 
relatively static. Since the program began, the maximum reimbursement 
rate based on average market cost for a casket has fluctuated 96.8 
percent, with a high of $2,681 and a low of $1,362. The maximum 
reimbursement rate based on average market cost for an urn has been as 
high as $244 and as low as $120, producing a 103.3-percent variance.
    VA is also concerned that reimbursement at the purchase price as 
shown by an invoice has encouraged certain individuals and entities to 
attempt to inflate reimbursements. VA has frequently received invoices 
showing purchase prices equal to the year's maximum reimbursement rate. 
Because those rates were based on cost averages of market prices from 
the previous fiscal year, VA questioned the validity of those invoices. 
Actual fraud in these cases, however, is difficult to prove and costly 
for the government to prosecute.
    After VA clarified the regulatory standard requiring an invoice 
showing purchase prices and began challenging questionable invoices, 
however, program utilization decreased.
    In response to these issues, VA proposes to cease the annual 
calculation and payment of reimbursement rates that vary from year to 
year, which have created confusion and caused lack of confidence among 
those who participate in the program. VA believes those issues would be 
eliminated by the proposed payment of flat-rate allowances for eligible 
claims. This would be a more consistent and predictable method of 
offsetting the costs of caskets and urns purchased for the dignified 
interment of unclaimed veterans' remains.
    To effectuate the flat-rate allowances, VA proposes to amend Sec.  
38.628 to remove all references to ``reimburse'' and ``reimbursement'' 
and replace them with ``allowance''. These references would appear in 
the section heading of the regulation, the introductory text of 
paragraph (a), the introductory text of paragraph (c), and paragraph 
(d). We also propose to remove the text referring to actual cost in 
paragraph (a), and we propose to clarify in paragraph (a) that the 
amount of the allowances would be established in paragraph (d). As 
shown in proposed paragraph (e), VA would, on an annual basis, make 
cost-of-living adjustments for the flat-rate allowances using the 
Consumer Price Index, a methodology used in similar VA monetary 
allowances. Consistent with the Veterans Benefits Administration (VBA) 
cost increases for monetary allowances under 38 U.S.C. 2303, from June 
to June each year, the National Cemetery Administration (NCA) would 
apply the percentage increase (rounded to the nearest dollar) for 
caskets and urns. Use of VBA's cost-of-living increase analysis would 
promote consistency across VA benefit programs and ensure the casket 
and urn allowances meet current costs, to the extent practicable.
    For urns, VA proposes to use historical average payments made by 
VA, which were based on invoices showing the purchase prices of urns 
meeting the regulatory specifications. VA reviewed maximum 
reimbursement rates for urns applicable for calendar years 2015 ($172), 
2016 ($244), 2017 ($163), 2018 ($169), 2019 ($162), 2020 ($149), and 
2021 ($145), which equates to an average annual reimbursement cap of 
$172 during that period. VA also found that the average actual 
reimbursement rate during that period was $138, which was the same as 
the average actual cost, shown by invoices, for a total of 77 urn 
claims. This payment average based on invoice price is lower than the 
$172 average of annual reimbursement caps calculated from 2015 to 2021. 
We note that during that time frame, based on VA historical payment 
data, invoice prices for urns that met Sec.  38.628(c)(5)(ii) 
specifications did not have any significant increases or decreases. A 
flat rate allowance based on historical invoice payment data, which 
remained relatively static when compared to previously calculated 
maximum reimbursement rates based on market price cost averages that 
changed more significantly from year to year, is a more logical means 
of administering this benefit. Additionally, we believe this standard 
would encourage potential claimants to choose urns that meet the 
regulatory standards priced within the predictable and consistent flat-
rate reimbursement amount. Based on this information, we propose the 
flat-rate allowance in paragraph (d) for urns to be $138, which is 
reflective of the average VA reimbursement based on actual cost from 
2015 to 2021 for urns meeting regulatory specifications. And, as noted 
previously, VA would annually assess the allowance for cost-of-living 
increases.
    For caskets, VA proposes to revise the definition of a ``casket'' 
for allowance purposes in Sec.  38.628(c)(5)(i) by removing the 
requirement for a gasketed seal. Based on input from funeral homes and 
other funeral industry professionals, the gasketed seal is not 
necessary, except when remains are transported by air in pressurized 
settings. Most claimants present casketed remains for interment that 
are locally transported by land from funeral homes, rendering the 
gasketed seal unnecessary. Also, gasketed caskets are more costly than 
non-gasketed caskets that still serve the purpose of safely containing 
human remains.
    Similar to VA's analysis supporting the proposed flat-rate urn 
allowance, VA considered historical payment data for caskets that met 
regulatory

[[Page 75198]]

specifications for calendar years 2015 through 2021. The maximum 
reimbursement rates for gasketed caskets payable for claims from 2015 
to 2021 were as follows: $1,967, $2,421, $2,069, $2,131, $2,681, 
$1,903, and $1,984, which equate to an average annual reimbursement cap 
of $2,165 during that period. However, the average actual reimbursement 
rate was $1,426, which was the same as the average actual cost, shown 
by invoice, for a total of 1,912 casket claims. VA conducted market 
research for the proposed 20-gauge, metal, non-gasketed casket with 
external rails or swing arms costs for 2021, which showed an average 
market cost of $801, which was $227 less than the average market cost 
of $1,028 for comparable gasketed-seal caskets in 2021. VA would deduct 
the $227 average cost of a gasket from the $1,426 historical payment 
average for gasketed-seal caskets to calculate the proposed flat-rate 
allowance of $1,199. Elimination of the unnecessary expense of a 
gasketed casket for funeral homes and other purchasers of caskets for 
veteran burials would be a more cost-effective means of providing 
dignified burials of eligible unclaimed veterans' remains to be safely 
handled by cemetery employees. Additionally, use of the flat-rate 
allowance for caskets that are based on historical payment costs would 
be reflective of the average actual costs paid by claimants that bring 
unclaimed veterans to VA national and grant-funded cemeteries for 
burial. Although the historical payment data includes caskets allegedly 
priced at the maximum reimbursement rate, we do not believe that 
undermines our rationale for using this standard for calculating the 
casket flat-rate allowance because the casketprices at the maximum 
reimbursement rate were outliers and of questionable accuracy. We 
believe the revised flat-rate casket allowance would address expressed 
claimant concerns and impose practical internal controls for VA. For 
these reasons, VA proposes to adopt a flat-rate allowance for non-
gasketed caskets, which we would continue to require to be of metal 
construction and at least 20-gauge thickness, designed for containing 
human remains, and include external fixed rails or swing arm handles. 
The flat-rate casket allowance would also be assessed annually for 
cost-of-living increases.

Eliminate Retroactive Reimbursement Provision

    Finally, VA proposes to amend the regulation by eliminating the 
retroactive reimbursement provisions by removing paragraph (e) from 
Sec.  38.628. Current paragraph (e) allows for retroactive 
reimbursement for caskets or urns purchased before July 2, 2014, for 
burial of the remains of a veteran who died on or after January 10, 
2014, to be paid at the calendar year 2015 rates. This provision was 
included because the casket and urn authority took effect on January 
10, 2014, before the regulations were finalized on April 13, 2015. 
However, the paragraph is no longer necessary because the relevant time 
periods have passed. VA would pay the allowances that apply based on 
the date of claim for reimbursement.

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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

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, because the number of claims and the amounts involved 
are expected to be small. We estimate the average cost of a burial 
receptacle that meets regulatory specifications under this rule would 
be $1,199 for caskets and $138 for urns in 2023. We also estimate that 
the total number of allowances for 2023 would be 259 for caskets and 18 
for urns. Because the proposed rulemaking would provide for issuance of 
an allowance, the individual or entity purchasing the burial receptacle 
would only be entitled to recoup the allowance rate, regardless of the 
actual purchase price. The purpose of the casket and urn reimbursement 
is to help offset a claimant's cost for bringing unclaimed veterans' 
remains to burial in a VA national or grant-funded cemetery. Generally, 
because the allowance is calculated based on historical average 
payments from qualifying purchase prices, this would result in the 
individual or entity avoiding a significant financial loss or gain for 
having made the purchase.
    Therefore, pursuant to 5 U.S.C. 605(b), the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do 
not apply.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an 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

    Although this action contains provisions constituting collections 
of information at 38 CFR 38.628, under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3521), no new or revised 
collections of information are associated with this proposed rule. The 
information collection for 38 CFR 38.628 is currently approved by the 
Office of Management and Budget (OMB) and has been assigned OMB control 
number 2900-0799.

List of Subjects 38 CFR Part 38

    Administrative practice and procedure, Cemeteries, Claims, 
Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on November 30, 2022, 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.


Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
General Counsel, Department of Veterans Affairs.
    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 38 as set forth below:

[[Page 75199]]

PART 38--NATIONAL CEMETERIES OF THE DEPARTMENT OF VETERANS AFFAIRS

0
1. The authority citation for part 38 continues to read as follows:

    Authority:  38 U.S.C. 107, 501, 512, 2306, 2400, 2402, 2403, 
2404, 2407, 2408, 2411, 7105.

0
2. Amend Sec.  38.628 by revising the section heading, the introductory 
text of paragraphs (a) and (c), and paragraphs (c)(1), (c)(5)(i), (d), 
and (e) to read as follows:


Sec.  38.628  Allowance for caskets and urns for unclaimed remains of 
veterans.

    (a) VA will issue a flat-rate allowance, as established in 
paragraph (d) of this section, to any individual or entity for a casket 
or urn, purchased by the individual or entity for the burial in a 
national cemetery or in a veterans' cemetery of a State or Tribal 
Organization that has received a grant under 38 U.S.C. 2408, of an 
eligible deceased veteran for whom VA:
* * * * *
    (c) An individual or entity may request an allowance from VA under 
paragraph (a) of this section by completing and submitting VA Form 40-
10088 and supporting documentation, in accordance with the instructions 
on the form. Prior to approving issuance of an allowance, VA must find 
all of the following:
    (1) The veteran is eligible for burial in a VA national cemetery or 
in a veterans' cemetery of a State or Tribal Organization that has 
received a grant under 38 U.S.C. 2408;
* * * * *
    (5) * * *
    (i) Caskets must be of metal construction of at least 20-gauge 
thickness, designed for containing human remains, sufficient to contain 
the remains of the deceased veteran, and include external fixed rails 
or swing arm handles.
* * * * *
    (d) The allowance for a claim received in any calendar year under 
paragraph (a) of this section is $1,199.00 for a metal casket and 
$138.00 for an urn of durable material.
    (e) VA will make cost-of-living adjustments for the flat-rate 
casket and urn allowances using the Consumer Price Index (CPI). Each 
fiscal year, VA will provide a percentage increase (rounded to the 
nearest dollar) in the casket and urn flat-rate allowances equal to the 
percentage by which the CPI (all items, United States city average) for 
the 12-month period (June to June) preceding the beginning of the 
fiscal year for which the percentage increase is made exceeds the CPI 
for the 12-month period preceding the 12-month period described in this 
paragraph (e). VA will only make cost-of-living increases to the flat 
rate allowances when the CPI has increased.
* * * * *

(Authority: 38 U.S.C. 2306, 2402, 2411)

[FR Doc. 2022-26672 Filed 12-7-22; 8:45 am]
BILLING CODE 8320-01-P