[Federal Register Volume 88, Number 35 (Wednesday, February 22, 2023)]
[Rules and Regulations]
[Pages 10835-10842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03339]



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 Rules and Regulations
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  Federal Register / Vol. 88, No. 35 / Wednesday, February 22, 2023 / 
Rules and Regulations  

[[Page 10835]]



DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AQ08


Reimbursement for Emergency Treatment

AGENCY: Department of Veterans Affairs.

ACTION: Final rule with comments.

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

SUMMARY: The Department of Veterans Affairs (VA) is finalizing, with 
some changes, an interim final rule that amended its medical 
regulations concerning payment or reimbursement for emergency treatment 
for non-service-connected conditions at non-VA (community) facilities. 
This final rule responds to public comments received on the interim 
final rule and amends VA's emergency treatment regulations to authorize 
payment or reimbursement for coinsurance, temporarily waive the timely 
filing requirements for veterans affected by the interim final rule, 
and authorize payment or reimbursement for emergency transportation 
associated with emergency treatment when VA has paid for the emergency 
treatment using a separate authority. Because the change to Sec.  
17.1004 was not addressed in the Supplementary Information section of 
the interim final rule, VA believes the public should have an 
opportunity to comment on the change. Therefore, a 60-day comment 
period to address this single topic will be provided.

DATES: 
    Effective date: This final rule is effective April 24, 2023.
    Comment Date: Comments on VA temporarily waiving the timely filing 
requirement must be received on or before April 24, 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: http://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 
the 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: Joseph Duran, Director, Policy and 
Planning VHA Office of Integrated Veteran Care (16IVC), Veterans Health 
Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, 
Washington, DC 20420, (303-370-1637). (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: In an interim final rule published in the 
Federal Register (FR) on January 9, 2018, 83 FR 974, VA amended its 
medical regulations pursuant to a decision from the Court of Appeals 
for Veterans Claims (Veterans Court), Staab v. McDonald, 28 Vet. App. 
50 (2016), to authorize reimbursement for the costs of emergency 
treatment furnished in the community for a veteran's non-service-
connected condition when the veteran is eligible for partial payment of 
these costs under a health-plan contract.
    Among other changes made, the interim final rule clarified that VA 
would not pay or reimburse for a copayment, deductible, coinsurance, or 
similar payment owed by the veteran. 38 CFR 17.1005(a). In issuing the 
interim final rule, VA explained that VA is statutorily prohibited 
under section 1725(c)(4)(D) of title 38, United States Code (U.S.C.) 
from paying for or reimbursing a copayment or similar payment and VA 
interpreted ``similar payment'' to include both deductibles and 
coinsurance. 38 CFR 17.1005(a)(5); 83 FR 974 (January 9, 2018).
    VA provided a 60-day comment period, which ended on March 12, 2018. 
Twelve comments were received, which are described in detail in the 
following section of this discussion.
    Following the comment period, on March 17, 2022, the United States 
Court of Appeals for the Federal Circuit (Federal Circuit) issued a 
decision, Wolfe v. McDonough, No. 2020-1958, on issues relating to a 
Writ of Mandamus granted by the Veterans Court. This case involved a 
challenge to VA's interpretation of 38 U.S.C. 1725(c)(4)(D) (that is, 
VA's prohibition on paying for copayments, coinsurance, and deductibles 
under 38 CFR 17.1005(a)(5)). In its opinion, the Federal Circuit 
interpreted 38 U.S.C. 1725(c)(4)(D) to exclude payment by VA of 
deductibles, but not coinsurance, as it found that a deductible is a 
similar payment to a copayment, but coinsurance is not.
    However, the decision on the Wolfe appeal did not specifically 
invalidate or otherwise amend VA's regulations as they relate to the 
payment of coinsurance. Subsequent to the Wolfe decision, a petition 
for review was filed at the Federal Circuit on May 4, 2022. The 
petitioners in this case asked for the court to invalidate the portion 
of VA's regulation that prohibited payment of coinsurance. On October 
25, 2022, the Federal Circuit issued an order directing VA to amend its 
regulations within 120 days to allow for the payment of coinsurance. 
Kimmel v. Sec'y of Veterans Affs, No. 2022-1754, 2022 U.S. App. LEXIS 
29615 (Fed. Cir. Oct. 25, 2022).
    For the reasons below and consistent with the Wolfe decision and 
subsequent order related to the Kimmel petition, this rulemaking will 
make final the interim final rule (83 FR 974) with changes and will 
permit an additional comment period on the limited issue of the timely 
filing requirement.

Public Comments

    Twelve comments were received in response to the interim final 
rule. Several commenters expressed support for the rule. The remaining 
substantive comments are discussed in detail below.

Retroactivity

    In the interim final rule, we stated that judicial decisions 
invalidating a statute or regulation, or VA's interpretation of a 
statute or regulation, cannot affect prior final VA decisions, meaning 
decisions that were not timely appealed and have thus become final.

[[Page 10836]]

As such, VA stated it will not retroactively pay benefits for claims 
filed under Sec.  17.1002(f) that were finally decided before April 8, 
2016, the date of the Veterans Court's Staab decision. We received 
multiple comments stating that VA should apply the amendments made in 
the interim final rule retroactively to February 1, 2010, the date of 
enactment of the Expansion of Veteran Eligibility for Reimbursement 
Act, Public Law 111-137 (hereinafter referred to as the ``2010 Act'').
    One commenter stated that VA has the authority to consider these 
claims because section 1725 provides VA with broad authority to 
establish the claim and payment process. Another commenter stated that 
the Staab decision requires VA to provide reimbursement to veterans 
with claims pending on or after February 1, 2010, because the court 
stated that VA must re-adjudicate the appellant's claim, which was for 
reimbursement for treatment in December 2010. The commenter also stated 
that a judicial interpretation of a statute defines the meaning of the 
statute as of the date of enactment, not the date of the judicial 
decision. The commenter cited to the Federal Circuit's decision in 
Patrick v. Shinseki, 668 F.3d 1325, 1329 (Fed. Cir. 2011), to support 
that proposition.
    We also received three comments concerning the need for retroactive 
application of the Staab decision from members of the United States 
Congress. Two of the comments were nearly identical. One was from the 
United States House of Representatives Committee on Veterans' Affairs 
and one was from members of the United States Senate. The comments 
requested that the interim final rule include those veterans whose 
claims were decided between the date of enactment of the 2010 Act, 
February 1, 2010, and the date of the Staab decision, April 8, 2016, so 
that veterans can take full advantage of a benefit Congress intended 
for them to receive. The Secretary of Veterans Affairs responded to 
these two comments in letters sent to each member of Congress who 
signed the two comments. The letter stated that the Secretary shared 
the concern of the members of Congress about veterans who, prior to the 
Staab decision, had their claims for reimbursement denied on the sole 
grounds that their health-plan contracts had made partial payments for 
their emergency treatment, thereby leaving them with personal liability 
for the remaining costs of that treatment.
    Under 38 U.S.C. 7105(c), a decision of a VA agency of original 
jurisdiction (AOJ) that is not appealed in a timely manner is 
considered final and the claim may not thereafter be reopened or 
allowed ``except as provided by regulations not inconsistent with this 
title.'' Under 38 U.S.C. 7104(b), when a claim is disallowed by the 
Board of Veterans' Appeals (Board), it may not thereafter be reopened 
and allowed ``[e]xcept as provided in section 5108 of this title.'' To 
the extent these statutes may be construed to permit VA by regulation 
to create additional exceptions to the finality of AOJ decisions, but 
not Board decisions, we decline to exercise that authority here. Such a 
rule would depart significantly from the well-established principle, 
discussed below, that new judicial interpretations of a statute do not 
provide a basis for reopening final decisions, and it would create an 
unfair distinction among claimants based upon whether their last final 
decision was issued by an AOJ or the Board. Moreover, as explained 
below, other authorities provide a basis for addressing claims 
involving expenses incurred on or after February 1, 2010, in a manner 
we believe to be more equitable and consistent with established 
precedents.
    There are only two statutory exceptions to the rule of finality, 
new and material evidence and clear and unmistakable error, 38 U.S.C. 
5108, neither of which authorizes VA to proactively re-open and re-
adjudicate finally decided claims as a result of the Staab decision as 
suggested by the commenters. See 38 U.S.C. 5108, 5109A, and 7111; Cook 
v. Principi, 318 F.3d 1334, 1339 (Fed. Cir 2002). As these two 
exceptions relate to the lines of reasoning raised by the commenters 
above, we do not believe that the authority provided in section 1725 
authorizes VA to re-adjudicate the claims in a manner that is 
inconsistent with 38 U.S.C. 5108, 5109A, and 7111. In addition, we do 
not believe that the Staab decision requires VA to re-adjudicate all 
finally decided claims retroactive to the effective date of the law. 
Significantly, the court did not order VA to re-adjudicate all finally 
decided claims from the date of enactment; instead, the court vacated 
the Board's decision that denied Mr. Staab's individual claim and 
ordered VA to re-adjudicate Mr. Staab's individual claim, which was not 
finally decided because he filed a timely appeal. In order to 
adjudicate the claim and address the court's invalidation of Sec.  
17.1002(f), VA amended its payment regulations to establish a payment 
methodology for claims, like Mr. Staab's, that involve partial payment 
by a health-plan contract. The Staab decision did not address and does 
not govern VA's authority to apply the new methodology to claims that 
were finally decided prior to the decision.
    Further, in George v. McDonough, 142 S. Ct. 1953, the Court held 
that invalidation of a VA regulation after a veteran's benefits 
decision becomes final cannot support a claim for collateral relief 
based on clear and unmistakable error. Therefore, neither the Staab 
decision, nor later decisions in the Wolfe or Kimmel matters create a 
clear and unmistakable error that would allow for readjudication of 
already denied claims.
    However, when an intervening and substantive change in law occurs 
and creates a new basis for entitlement to a benefit (e.g., judicial 
interpretation and invalidation of a regulation results in expansion of 
entitlement to a benefit), VA may review a new claim based on the same 
facts as the finally decided claim. Spencer v. Brown, 17 F.3d 368, 372 
(Fed. Cir.) (1994). In this situation, individuals whose claims were 
finally decided prior to the change in law may submit new claims to be 
adjudicated under the revised standard. We therefore explained to the 
members of Congress that VA can reach claims that were finally decided 
prior to the Staab decision (on the sole grounds that partial payment 
would be, or had been, made under the veterans' health-plan contract), 
if the veterans or providers file new claims for the same benefits that 
were previously denied. VA further explained that we will adjudicate 
claims from providers or veterans who, due to their awareness of the 
former interpretation of the law (former Sec.  17.1002(f)), chose not 
to file claims because partial payment had been made or would be made 
under the veterans' health-plan contracts. The Secretary also informed 
the members of Congress that we would create a solution, through 
amendatory rulemaking, to avoid denial of these claims as untimely 
under the current filing deadlines specified in regulation. It was 
further explained that all providers or veterans seeking reimbursement 
under the revised regulation would be required to submit evidence 
showing the amount paid by their health insurance plan and the amount 
of the veteran's remaining liability. The reason for this requirement 
is explained below.
    The third Congressional comment (from the Senate Committee on 
Veterans' Affairs) stated that the timely filing requirement for these 
claims should be waived completely. The comment further stated that VA 
should proactively reach out to veterans whose

[[Page 10837]]

claims were denied under the previous regulations because making 
veterans refile their claims would be unduly burdensome and create a 
barrier to filing that will disproportionately impact veterans whom the 
comment described as already being vulnerable.
    VA agrees that it is necessary to provide the two groups of 
claimants described above with an opportunity to file new claims for 
payment or reimbursement of emergency treatment costs incurred in the 
community on or after February 1, 2010, up to April 8, 2016 (the date 
of the Staab decision), and to adjudicate these claims under the new 
legal standard, subject to the one-year filing deadline established in 
Sec.  17.1004(f), as revised by this final rule. To simply waive the 
timely filing requirement for these claims would be problematic, 
however, as it would prevent VA from being able to reliably forecast 
budgetary and other claims processing needs relative to these claims. 
Moreover, health insurance claims are generally processed in accordance 
with firm time limits established by the governing contracts, including 
those applicable to the carriers' appeals processes. Thus, the amounts 
paid under veterans' health-plan contracts have already been 
identified. Unless these records are no longer retained by the 
carriers, this historical information exists and can be requested. In 
the alternative, the veteran may have personal possession of these 
historical records. In either event, VA believes that a one-year filing 
deadline is reasonable and gives these claimants an adequate 
opportunity to seek payment or reimbursement for costs incurred during 
the covered time-period. VA will therefore not waive the timely filing 
requirement for claimants affected by the Staab decision.
    In order to address the concerns raised, and in response to 
comments that VA received on the IFR, VA will amend Sec.  17.1004 to 
afford veterans affected by the Staab decision an opportunity to file a 
new claim based on the change in law. Specifically, VA is amending 
Sec.  17.1004(f), which currently provides an exception to the timely 
filing requirements in Sec.  17.1004(d) for dates of service between 
July 19, 2001, and 90 days before May 21, 2012, if the claimant files a 
claim for reimbursement no later than one year after May 21, 2012. 
Because the time frame for the waiver in current Sec.  17.1004(f) has 
passed, we will amend this paragraph by removing the previous time 
frame for the waiver and, in its place, allow claimants to file a 
claim, notwithstanding paragraph (d) of this section, for reimbursement 
of costs of non-VA emergency treatment rendered on or after February 1, 
2010 and more than 90 days before February 22, 2023 for which partial 
payment was paid or payable under the veterans' health-plan contracts, 
provided the claimants file their claims for reimbursement no later 
than one year after February 22, 2023. This amendment will thus provide 
all claimants affected by the Staab decision, regardless of whether 
they previously filed claims for reimbursement, an opportunity to 
submit a claim for payment or reimbursement of the costs of non-VA 
emergency treatment they received on or after the effective date of the 
2010 Act.
    VA has additionally determined that anyone who had been potentially 
adversely affected by the issues raised in the Wolfe litigation, or the 
subsequent Kimmel petition, would fall within this waiver period. 
Therefore, they would also be able to seek adjudication of their claims 
under the new standard. To the extent the issues here are distinct from 
those raised by the Staab case, the inclusion within these timeframes 
will still allow for those issues to be addressed.
    As a matter of prudence, and because this precise change to Sec.  
17.1004 differs from the interim final rule, VA is inviting the public 
to comment on the change. Therefore, a 60-day comment period to address 
this single topic will be provided.

Copayments and Similar Payments

    Section 1725(c)(4)(D) prohibits VA from reimbursing a veteran for a 
copayment or similar payment that the veteran owes a third party or is 
responsible to pay under a health-plan contract. The interim final rule 
interpreted ``similar payment'' to include deductibles and coinsurance. 
We received multiple comments that coinsurance and deductibles are not 
``similar payments'' to copayments and should be removed from the list 
of payments for which VA will not provide reimbursement. Following the 
public comment period, the Federal Circuit's order regarding the Kimmel 
petition held that coinsurance was the type of payment envisioned by 
Congress that VA would pay or reimburse while deductibles were similar 
to copayments and therefore prohibited from payment or reimbursement 
pursuant to 38 U.S.C. 1725(c)(4)(D).
    Consistent with this decision, we are removing coinsurance from the 
list of prohibited payments in Sec.  17.1005(a)(5) but will not remove 
deductibles from that list.
    The following discussion specifically addresses the related 
comments we received during the public comment period on this issue.
    Commenters explained that a copayment, by definition, is 
distinguishable from other forms of cost-sharing, such as deductibles 
and coinsurance, and that copayments result in much lower liabilities 
than deductibles and coinsurance. The commenters stated that each term 
is a ``term of art'' with a specific, accepted, meaning and that the 
term copayment cannot be read to include these different obligations. 
One commenter defined copayment as the set dollar amount the patient 
pays for care after the deductible is paid, deductible as the amount an 
insured must pay each year before the insurance source pays its share, 
and coinsurance as the percent of costs the enrollee must pay. Another 
commenter similarly defined a copayment as a fixed, flat fee, amount 
paid by an insured for each particular covered health care service 
after paying any deductible, a deductible as a fixed amount an insured 
pays each year for eligible medical services or medicines before 
insurance will make any payment, and coinsurance as a portion of all 
the medical costs that an insured must pay of all costs subject to the 
coinsurance.
    In Wolfe v. McDonough, No. 2020-1958, Fed. Cir. (Mar. 17, 2022), 
the Federal Circuit indicated that copayments and deductibles were 
similar payments, as they are both fixed quantities which become known 
once insurance is purchased, while coinsurance is a variable quantity 
that becomes known after medical expenses are incurred. The Federal 
Circuit also found that the legislative history supports that 
deductibles were intentionally excluded from reimbursement as a similar 
payment but coinsurance was not. Later, in the response to the Kimmel 
petition, the Federal Circuit determined that coinsurance was the type 
of payment envisioned by Congress that VA would pay or reimburse while 
deductibles were similar to copayments and therefore prohibited from 
payment or reimbursement pursuant to 38 U.S.C. 1725(c)(4)(D).
    Several commenters stated that the rules of statutory construction 
require us to presume Congress meant what it said and that, in other 
statutory contexts, Congress has not used the specific term, copayment, 
to include other forms of cost-sharing. One commenter noted that they 
do not believe there is a Congressional reference to copayments that 
includes

[[Page 10838]]

coinsurance and deductibles. The commenters provided the following 
examples: 38 U.S.C. 1729(a)(3) uses ``deductible or copayment;'' under 
the essential health benefit limitations on cost-sharing, Congress 
refers to ``copayments and coinsurance;'' in establishing premium and 
cost sharing subsidies for low-income individuals, Congress made 
reference to copayment separately from coinsurance; and in the 
statutory authority for VA to require copayments for medications, the 
law referred to copayments and did not include coinsurance or 
deductibles. The commenters stated that had Congress intended 
deductibles or coinsurance be excluded from reimbursement, it would 
have used such language.
    To clarify, VA does not believe that Congress intended for the term 
``copayment'' in section 1725(c)(4)(D) to, by itself, encompass 
deductibles. Instead, VA believes it is the phrase ``or similar 
payment'' that is intended to include other forms of cost sharing, such 
as deductibles. VA agrees that we must presume Congress meant what it 
said, and in section 1725, Congress said ``copayment or similar 
payment.'' A statute must be interpreted, ``so that effect is given to 
all its provisions, so that no part will be inoperative or superfluous, 
void or insignificant.'' Corley v. United States, 556 U.S. 303, 304 
(2009). To find meaning in the phrase ``similar payment,'' VA must 
identify and consider other payments for which a veteran is responsible 
under a health plan contract. VA can find no payment more similar to a 
copayment than a deductible, which serves as a fixed-amount cost-
sharing measure to which the insured freely agrees to pay as a 
condition of insurance coverage. As noted in Wolfe, similar payments 
necessarily means that some payments that are not copayments are 
similar payments. The Federal Circuit found that deductibles were 
envisioned by Congress to be similar to copayments and thus prohibited 
from payment or reimbursement. The Federal Circuit looked at the 
legislative history for 38 U.S.C. 1725 and determined that it supports 
that Congress intentionally excluded deductibles from reimbursement as 
a similar payment.
    Another commenter stated that VA did not provide any legal 
authority to broaden the statutory language in section 1725(c)(4)(D) to 
include deductibles and coinsurance. We disagree. First, Congress 
explicitly gave VA broad authority to implement section 1725 in 
regulations prescribed by the Secretary. Specifically, section 
1725(c)(1)(B) provides that, ``The Secretary, in accordance with 
regulations prescribed by the Secretary, shall . . . delineate the 
circumstances under which such payments may be made . . . .'' Moreover, 
as crafted, the language of section 1725(c)(4)(D) plainly allows for 
other payments to be included within its scope, provided they are 
similar to the one named. As noted throughout this discussion, the 
Federal Circuit in Wolfe and Kimmel acknowledged that inclusion of the 
phrase ``similar payments'' in the statute necessarily means that some 
payments that are not copayments are similar payments. The Federal 
Circuit interpreted section 1725(c)(4)(D) and its legislative history 
to determine that a deductible is a similar payment to a copayment and 
thus excluded from payment or reimbursement. For these reasons, we 
believe that VA has authority to interpret the phrase ``or similar 
payment'' in paragraph (4)(D) of subsection (c).
    The commenters also stated that the legislative history and the 
Veterans Court's Staab decision provide that the purpose of the 2010 
Act was to make VA responsible for the cost (of the emergency 
treatment) exceeding the amount payable or paid by the third-party 
insurer, noting that a deductible or coinsurance amount is not payable 
or paid by the third-party insurer. VA agrees that part of the 
legislative history related to the 2010 Act and the Staab decision each 
reflect an expectation or understanding that the 2010 Act amendments 
effectively enable VA to pay the entire remainder owed to the emergency 
provider after partial payment is made or payable under the veteran's 
health-plan contract. However, even if this were intended, the 2010 Act 
did not accomplish this goal. The still relevant provisions of section 
1725(c) explicitly require VA to limit the amount of reimbursement 
available under section 1725. Indeed, the header for subsection (c) is 
``Limitations on reimbursement.'' To this end, section 1725(c)(1) 
directs VA to promulgate regulations that limit payment, to include 
establishing a maximum amount payable under section 1725. In addition, 
section 1725(c)(4)(D) expressly prohibits VA from reimbursing a veteran 
for any copayment or similar payment that the veteran owes the third 
party or for which the veteran is responsible under a health-plan 
contract. These, along with the other likewise intact provisions of 
subsection (c), reflect a continuing requirement to limit the budgetary 
impact of section 1725. If the drafters of the 2010 Act believed that 
VA's secondary payment would cover all of the eligible veterans' out-
of-pocket costs, we conclude that they failed to execute all the 
amendments needed to accomplish this, and the Federal Circuit confirmed 
this by its interpretation of the statute.
    Multiple commenters mentioned that the bar on reimbursement of 
deductibles and coinsurance acts as a disincentive to purchasing health 
insurance coverage. They suggest that the exclusion of veterans' out-
of-pocket (cost sharing) costs could result in veterans foregoing the 
purchase of health insurance, leaving VA with increased costs as their 
sole payer. One of the commenters stated that veterans will always have 
personal liability if they have Medicare Part B and the proposed change 
will do nothing to resolve the veteran's personal liability. The 
commenter further stated that it will encourage veterans to discontinue 
their Medicare Part B and recommends that the rule require veterans to 
have Medicare Part B.
    As discussed above, VA interprets ``similar payments'' to include 
deductibles; thus, VA does not have authority to reimburse these costs. 
As a matter of policy, VA interprets ``similar payments'' this way in 
order to avoid any conflict with the Federal Circuit. VA acknowledges 
that veterans who do not have health insurance would likely pay no out-
of-pocket costs while veterans who do have health insurance may have 
out-of-pocket costs resulting from their cost share obligations. 
Nonetheless, VA does not believe that this potential disparity will 
deter veterans from purchasing health insurance. Most veterans enrolled 
in the VA health care system have an additional type of health 
insurance coverage. It seems unlikely that they would forego their 
health insurance protection for all other medical conditions, which are 
likewise subject to their plan's deductible requirements, merely to 
avoid having to pay copayments and similar payments owed in connection 
with the receipt of non-VA emergency treatment. Again, these are cost 
shares that they freely agreed to pay in exchange for health insurance 
coverage independent of their VA benefits. Ultimately, whether to keep 
or obtain health insurance is a personal financial decision for 
veterans enrolled in VA's health care system to make based on their own 
needs, financial capability, and preferences.
    As it concerns veterans who are eligible for reimbursement under 
section 1725 and who also have coverage for emergency treatment under 
Medicare Part A, VA has no authority to require that they be enrolled 
in Medicare Part B as a condition of

[[Page 10839]]

payment or reimbursement under section 1725.
    Based on these comments and the Wolfe decision and Kimmel order, we 
are removing coinsurance from the list of prohibited payments in Sec.  
17.1005(a)(5) but will not remove deductibles from that list. We are 
also retaining the ``or similar payment'' qualifier on the end of the 
list to maintain the flexibility originally envisioned by Congress's 
initial inclusion of the phrase in section 1725. Retaining ``or similar 
payment'' allows VA to be flexible in the future, should some new type 
of health care cost sharing arise.

Payment Limitations

    Several commenters raised a concern that VA's payment limitation of 
70 percent of the Medicare fee schedule rate was too low. The 
commenters requested that VA amend the rule to pay the fair market 
value for the services rendered. One commenter explained that payment 
below the fair market value could jeopardize the financial viability of 
the emergency care safety net.
    To clarify, the scope of this rulemaking is to amend VA's 
regulations to comply with case law interpreting the scope of VA's 
reimbursement authority. Therefore, this rulemaking only affects 
reimbursement when the veteran has partial payment from a third party; 
it does not affect the amount VA will pay when the veteran has no other 
coverage, which is governed by a different provision of the payment 
regulation. When the veteran has partial payment for the emergency 
treatment expenses from a third party, VA is the secondary payer. Under 
the amended payment regulation, VA pays the lesser of: the amount for 
which the veteran is still personally liable after payment by a third 
party (including a health-plan contract); or 70 percent of the 
applicable Medicare fee schedule rate.
    For example, a veteran has an initial liability of $100 dollars. 70 
percent of the Medicare fee schedule is $70 and the veteran's health-
plan contract paid the provider 80 percent of the Medicare fee schedule 
rate ($80). If the veteran has remaining liability to the provider 
(other than a copayment, deductible or similar payment), then VA would 
still be able to pay up to $20 towards the veteran's remaining 
liability even after the payment of $80 from the health plan contract. 
Although VA can pay up to 70 percent of the Medicare fee schedule, 
which is $70, the veteran's remaining liability in this instance would 
only be $20 after deducting the health-plan contract's payment of $80 
from the $100 liability. As secondary payer, VA's maximum allowable 
amount is in addition to the amount already paid (or payable) by the 
health-plan contract. For this reason, VA believes that emergency 
treatment providers will ultimately receive at least fair market value 
for their services; consequently, this final rulemaking will not 
jeopardize the financial viability of emergency departments. VA does 
not make any changes to the rule based on these comments.
    Other commenters stated that the low reimbursement rate would 
encourage health care professionals to deny treatment to veterans for 
fear of inadequate reimbursement. All veterans affected by this 
rulemaking already have coverage for emergency treatment expenses under 
their health-plan contracts, with rates presumably negotiated (by the 
carriers and providers) to ensure adequate reimbursement. Again, VA is 
secondary payer to these contracts. The combined payment by the primary 
payer (health-plan contract) and VA for the same emergency treatment 
episode should thus provide adequate reimbursement, as discussed above.
    In addition, a Medicare-participating hospital with an emergency 
department that denies emergency care to an individual due to the 
individual's inability to pay would arguably violate the Emergency 
Medical Treatment and Active Labor Act (EMTALA), 42 U.S.C. 1395dd, as 
amended. Under EMTALA, if any individual (regardless of Medicare-
eligibility) seeks examination or treatment for a medical condition at 
a covered hospital, then the hospital must provide a screening 
examination to determine whether an emergency medical condition exists. 
If so, the hospital is, in general, required to furnish needed 
emergency treatment until the individual is stabilized and able to be 
transferred irrespective of the patient's ability to pay. For these 
reasons, we do not make any changes to the rule based on these 
comments.
    Another commenter stated that Congress did not intend for VA to set 
such a low rate and cited to a study that found that in-network 
emergency physician claims were paid at 297 percent of the Medicare 
rate and out-of-network emergency physicians charged an average of 798 
percent of the Medicare rate. The legislative history from when 38 
U.S.C. 1725 was originally enacted demonstrates that Congress intended 
for VA to set a rate that is lower than the Medicare fee schedule rate. 
The legislative history reads, ``The Committee thus envisions that VA 
would establish rates that are significantly below those paid under the 
Medicare or Medicaid system (or under 38 United States Code, section 
1728).'' House Report 106-237 (July 16, 1999). Therefore, VA believes 
that the rate it set is precisely what Congress envisioned, and we do 
not make any changes to the rule based on this comment.
    The commenter also noted that the interim final rule permits 
emergency providers to reject the payment amount, which would 
presumably leave the veteran fully responsible for the payment. Given 
the low rate, the commenter feared that these providers may reject the 
amount and seek full payment from the veteran. As noted above, VA has 
been paying 70 percent of the applicable Medicare fee schedule rate in 
instances when VA is the sole payer ever since the regulations were 
effective on May 29, 2000 (66 FR 36470) (unless, of course, the amount 
owed to the provider was less than 70 percent of the Medicare fee 
schedule rate, thereby requiring the lesser amount to be paid). Since 
that time, very few, if any, of VA's payments have been rejected, 
presumably because these debts would have otherwise been written off by 
the providers. Because emergency providers may view the new cohort of 
veterans covered by the court's decision as having the ability to self-
pay more than the VA allowable amount, we have devised a payment 
methodology to reduce the likelihood that the providers will reject VA 
payment. Emergency providers will be receiving greater than 70 percent 
of the Medicare fee schedule rate; again, they will receive a combined 
payment comprised of the third party's payment and VA's payment. At 
this time, and in the absence of compelling evidence requiring a 
changed approach, we decline to make any changes to the rule based on 
this comment.
    One commenter sought clarification on liability for cost-sharing. 
In particular, the commenter asked whether a veteran's cost sharing 
responsibilities are also extinguished if a health care provider 
accepts payment from VA for the emergency treatment. We clarify that 
some of the veteran's cost sharing obligations, such as a copayment or 
deductible, are not extinguished by VA payment. Those are contractual 
payment obligations, non-reimbursable by VA, that are owed by the 
veteran to the provider, consistent with the terms of the veteran's 
health-plan contract. We do note however, under this amended rule, VA 
will pay or reimburse for a veteran's coinsurance as part of its 
underlying payment for medical treatment. Therefore,

[[Page 10840]]

acceptance of payment from VA will extinguish any coinsurance 
responsibility on the part of the veteran. See 38 CFR 17.1005(a)(4). We 
do not make any changes to the rule based on this comment.

Miscellaneous

    One commenter requested that VA provide clarity on two provisions 
in the regulations. The first provision is the prudent layperson 
standard in 38 CFR 17.1002(b). The regulation provides that, in order 
to receive reimbursement, the veteran must have sought care for which a 
prudent layperson would have reasonably expected that delay in seeking 
immediate medical attention would have been hazardous to life or 
health. The commenter recommended that VA provide a list of services 
that would meet this standard to ensure that emergency treatment claims 
filed by veterans are not improperly rejected. The commenter suggested 
that VA adopt the list from the American College of Emergency 
Physicians. VA appreciates the commenter's suggestion, but the scope of 
the rulemaking is narrowly limited to amending VA's regulations to 
comply with the Staab and Wolfe decisions and the Kimmel order by 
permitting reimbursement when the veteran has partial payment from a 
health-plan contract. Therefore, this comment is beyond the scope of 
this rulemaking, and we do not make any edits based on the comment. 
However, VA will continue to monitor the program and consider whether 
additional rulemaking may be necessary in the future.
    The commenter also requested that VA amend the rule to 
affirmatively state that VA cannot deny a claim after a veteran passes 
away if the emergency medical treatment is furnished prior to the 
veteran's death. The commenter noted that the interim final rule states 
that reimbursement is not available if death occurs before emergency 
treatment is provided. We want to clarify that the interim final rule 
does not state that reimbursement is not available if death occurs 
before emergency treatment is provided. Instead, the interim final rule 
provides that VA can provide reimbursement for emergency transportation 
even if the veteran passes away before emergency treatment is rendered 
at the community hospital. While VA appreciates the suggestion, VA 
believes that the interim final rule, in conjunction with the 
explanation provided here, is sufficiently clear that reimbursement can 
be provided even if the veteran passes away. Therefore, we do not make 
any changes to the rule based on this comment.
    One commenter expressed a concern about whether and how VA informs 
a veteran when the veteran has an outstanding debt with a medical 
facility and the veteran's first notification comes in the form of a 
debt collection letter. The commenter explained that a veteran received 
a letter from a local hospital and it took four months to determine 
that there was no outstanding balance on the veteran's account and the 
letter was sent as a result of a bookkeeping error on the part of the 
hospital. Although VA is sympathetic to the veteran we note that this 
is scenario is not representative of most instances of reimbursement 
for emergency treatment. However, this rulemaking expands eligibility 
criteria for reimbursement for the costs of emergency treatment 
rendered by community emergency providers to veterans for their non-
service-connected conditions. Because the comment is beyond the scope 
of this rulemaking, we do not make any changes to the rule based on 
this comment.
    One commenter inquired as to why they were taken to a community 
hospital when a VA medical center was less than eight minutes away. The 
commenter received a bill for the transportation to the community 
hospital. The commenter also discussed the poor treatment rendered by 
the community hospital, as perceived by the commenter. To the extent 
that the commenter seeks reimbursement for the costs of transport to 
the community hospital, we invite the commenter to file an emergency 
transportation claim under section 1725 as implemented by 38 CFR 
17.1003 and 17.1004. But again, because this rulemaking only expands 
eligibility requirements for reimbursement of the costs of emergency 
treatment rendered by community hospitals for veterans' non-service-
connected conditions, this comment is beyond the scope of the 
rulemaking. No changes are made to the rule based on these comments.
    We also received one comment regarding Executive Order 13771. This 
rulemaking was not affected by Executive Order 13771. Therefore, this 
comment is beyond the scope of the rulemaking, and we do not make any 
changes to the rule based on the comment.

Changes to Sec.  17.1003

    While we did not receive any public comments on this issue we are 
amending Sec.  17.1003(a)(1) as a logical outgrowth of the interim 
final rule to add VA as a clarifying example of payor of emergency 
treatment which would not forestall eligibility for emergency 
transportation.
    In the interim final rule, we amended Sec.  17.1003 to add 
paragraph (a)(1) which provides that payment or reimbursement for 
ambulance services may be made if payment or reimbursement would have 
been authorized under 38 U.S.C. 1725 for emergency treatment had the 
veteran's personal liability for the emergency treatment not been fully 
extinguished by payment by a third party, including under a health-plan 
contract. VA amended Sec.  17.1003 in the interim final rule to address 
a long-standing tension in Sec.  17.1003 with VA's interpretation that 
emergency transportation is part of emergency treatment. VA has 
historically interpreted the phrase ``emergency treatment'' in section 
1725(f)(1) to include emergency transportation if the transportation is 
provided as part of the emergency medical treatment administered at the 
non-VA facility. However, Sec.  17.1003 did not allow VA to pay for the 
transportation if the liability for the emergency treatment had already 
been extinguished by a third party. The interim final rule explained 
that if VA's sole basis to deny a transportation claim is satisfaction 
by a third party of the related emergency treatment claim, even if that 
transportation claim meets all of the other requirements for 
reimbursement under 38 U.S.C. 1725, VA would be, in effect, treating 
the emergency transportation claim differently than the related 
emergency treatment claim. Therefore, in order to make Sec.  17.1003 
consistent with VA's interpretation that the emergency transportation 
is part of the claim for emergency treatment, VA amended Sec.  17.1003 
to ensure that payment or reimbursement for emergency transportation 
would not be prohibited on the sole basis that the emergency treatment 
claim was fully extinguished. While in the interim final rule VA only 
referenced liability being extinguished by a third party, VA believes 
that the public was sufficiently put on notice that the intended effect 
of the change was to ensure emergency transportation under Sec.  
17.1003 would not be prohibited on the sole basis that the emergency 
treatment was fully extinguished by another source.
    In this rulemaking we revise Sec.  17.1003(a)(1) by adding the 
phrase ``or by VA'' after health plan contract. This addition is 
necessary to ensure that, consistent with the interpretation discussed 
above, VA can pay or reimburse for emergency transportation under 
section 1725 even if VA

[[Page 10841]]

extinguishes the liability for the underlying emergency treatment using 
a different authority, such as under VA's Community Care Program at 38 
CFR 17.4020(c).
    Thus, we are revising Sec.  17.1003(a)(1) to make clear that a 
veteran may be reimbursed for ambulance services made for transporting 
a veteran to a facility if payment or reimbursement would have been 
authorized under section 1725 for emergency treatment had the veteran's 
personal liability for the emergency treatment not been fully 
extinguished by a third party, to include under a health plan contract, 
or by VA. Based on the rationale set forth in the Supplementary 
Information sections of the interim final rule and this final rule, VA 
is adopting as final the interim final rule with the changes stated in 
this final rule.

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 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 final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
612). This rule would not cause a significant economic impact on small 
entities since this exemption is limited to individual veterans who VA 
determines to be affected by the Stabb or Wolfe cases. Only individual 
veterans are effects by the virture of being able to submit claims for 
coinsurance reimbursement. Individuals are not the small entities, they 
cannot be broken out by appropriate size standard, number affected, and 
business revenue. 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. Although some eligible entities or providers that 
furnished emergency care and services to veterans under this authority 
may be considered small entities, there will be no significant adverse 
economic impact because this rule does not create a new payment 
obligation on such entities; it merely creates a new payment 
methodology for services already rendered.

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 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 final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This final rule involves a collection of information that is 
controlled by the requirements of the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501-3521). While there are no provisions associated with 
this rulemaking constituting a new collection of information, the 
changes to reimbursement may constitute substantive revisions to the 
existing collection of information. The Office of Management and Budget 
(OMB) previously approved a Paperwork Reduction Act (PRA) clearance for 
information collected pursuant to 38 U.S.C. 1725 under OMB control 
number 2900-0620, which expired on July 31, 2018. The collection of 
information is being processed for a reinstatement of the PRA clearance 
from OMB through a separate Federal Register notice (FRN) published in 
the Federal Register. The FRN will provide the public with an 
opportunity to comment on the information collection and any revisions 
for Payment or Reimbursement for Emergency Services for Nonservice-
Connected Conditions in Non-Department Facilities. A final FRN also 
will be published in the Federal Register when the collection of 
information is submitted to OMB for approval of the PRA clearance 
renewal.

Congressional Review Act

    Under the Congressional Review Act, this regulatory action may 
result in an annual effect on the economy of $100 million or more, 5 
U.S.C. 804(2), and so is subject to the 60-day delay in effective date 
under 5 U.S.C. 801(a)(3). In accordance with 5 U.S.C. 801(a)(1), VA 
will submit to the Comptroller General and to Congress a copy of this 
Regulation and the Regulatory Impact Analysis (RIA) associated with the 
Regulation.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Claims, Health care, Health 
facilities, Health professions, Health records, Reporting and 
recordkeeping requirements, Travel and transportation expenses, 
Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on December 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.

Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the interim final rule 
amending 38 CFR part 17, which was published at 83 FR 974 on January 9, 
2018, is adopted as final with the following changes:

PART 17--MEDICAL

0
1. The general authority citation for part 17 continues to read as 
follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.
* * * * *

0
2. Amend Sec.  17.1003 by revising paragraph (a)(1) to read as follows:


Sec.  17.1003  Emergency transportation.

    (a) * * *
    (1) The veteran's personal liability for the emergency treatment 
not been fully extinguished by payment by a third party, including 
under a health-plan contract, or by VA; or
* * * * *

0
3. Amend Sec.  17.1004 by revising paragraph (f) to read as follows:


Sec.  17.1004  Filing claims.

* * * * *
    (f) Notwithstanding paragraph (d) of this section, VA will provide 
retroactive payment or reimbursement for emergency treatment received 
by the veteran, on or after February 1, 2010 but more than 90 days 
before February 22, 2023, if the claimant was eligible for partial 
payment from a health-plan contract for the emergency treatment and the 
claimant files a claim for

[[Page 10842]]

reimbursement no later than 1 year after February 22, 2023.
* * * * *

0
4. Amend Sec.  17.1005 by revising paragraph (a)(5) to read as follows:


Sec.  17.1005  Payment limitations.

    (a) * * *
    (5) VA will not reimburse a veteran under this section for any 
copayment, deductible, or similar payment that the veteran owes the 
third party or is obligated to pay under a health-plan contract.
* * * * *
[FR Doc. 2023-03339 Filed 2-21-23; 8:45 am]
BILLING CODE 8320-01-P