[Federal Register Volume 89, Number 117 (Monday, June 17, 2024)]
[Rules and Regulations]
[Pages 51224-51234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13116]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP39


Adaptive Equipment Allowance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) amends its regulations 
governing the provision of a monetary allowance to certain veterans and 
eligible members of the Armed Forces who require adaptive equipment to 
operate an automobile or other conveyance. VA proposed establishing in 
regulation a VA Adaptive Equipment Schedule for Automobiles and Other 
Conveyances to calculate the amount of the monetary allowance for 
adaptive equipment based on industry standards and our experience 
administering this program. We adopt as final this proposed rule, with 
changes based on public comment. This rulemaking addresses 
reimbursement to eligible persons who have paid for adaptive

[[Page 51225]]

equipment and payments made by VA directly to registered adaptive 
equipment providers, but not the eligibility requirements to receive 
adaptive equipment.

DATES: The final rule is effective July 17, 2024.

FOR FURTHER INFORMATION CONTACT: Penny Nechanicky, National Program 
Director, Prosthetics Sensory Aids Service (10P4R), Department of 
Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 
461-0337 (This is not a toll-free number).

SUPPLEMENTARY INFORMATION: Section 3902(b) of Title 38, United States 
Code (U.S.C.) requires VA to provide eligible persons with ``the 
adaptive equipment deemed necessary to insure that the eligible person 
will be able to operate [an] automobile or other conveyance in a manner 
consistent with such person's own safety and the safety of others and 
so as to satisfy the applicable standards of licensure established by 
the State of such person's residency or other proper licensing 
authority.'' Under 38 U.S.C. 3901, eligible persons include veterans 
and active duty members of the Armed Forces who have been diagnosed 
with one or more specified disabilities. Under section 3901(2), 
adaptive equipment is defined to include, but is not limited to, power 
steering, power brakes, power window lifts, power seats, air 
conditioning, and other equipment necessary to help the eligible 
individual enter, exit, or operate the automobile or other conveyance. 
VA implements these statutory authorities through regulation at Title 
38 Code of Federal Regulations (CFR) sections 17.155-17.159. Because VA 
does not have the capacity to build or install adaptive equipment for 
automobiles or other conveyances, VA instead reimburses eligible 
persons or pays registered providers for the cost of the adaptive 
equipment. See 38 CFR 17.156.
    On March 12, 2020, VA proposed amending its regulations governing 
the provision of a monetary allowance to certain veterans and eligible 
members of the Armed Forces who require adaptive equipment to operate 
an automobile or other conveyance. Among other things, that proposed 
rule addressed establishing in regulation a VA Adaptive Equipment 
Schedule for Automobiles and Other Conveyances (Schedule) to calculate 
the amount of the monetary allowance for adaptive equipment based on 
industry standards and our experience administering this program, and 
reimbursement to eligible persons who have paid for adaptive equipment 
and payments made by VA directly to registered adaptive equipment 
providers.
    We provided a 60-day period in which interested members of the 
public could submit comments. The comment period closed May 11, 2020 
and we received four comments, two of which raised substantive issues. 
Based on these comments, we adopt as final this proposed rule, with 
changes based on public comment.


Sec.  17.157  Definitions.

    We proposed making minor revisions to the definition of ``adaptive 
equipment'' for purposes of readability and clarity. Adaptive equipment 
was defined to include ``any term specified by the Under Secretary for 
Health or designee.'' Because adaptive equipment is generally 
understood to refer to tangible pieces of equipment rather than words 
or terms, we proposed amending the definition to refer to any item. As 
amended the proposed definition stated, inter alia, that adaptive 
equipment means ``equipment which must be part of or added to a 
conveyance manufactured for sale to the general public to make it safe 
for use by the eligible person and enable that person and the 
conveyance to meet the applicable standards of licensure. Adaptive 
equipment includes any item specified by the Under Secretary for Health 
or designee as ordinarily necessary for any of the classes of losses or 
combination of such losses specified in 38 CFR 17.156, or as deemed 
necessary in an individual case for an eligible person.''
    One commenter requested clarification on whether ``any item'' 
includes both tangible and non-tangible (i.e., software and other 
electronic interface technologies) equipment, which are and will 
continue to be essential for the safe and functional operation of 
modified automobiles and adaptive equipment. The commenter recommended 
amending the definition of adaptive equipment to specifically address 
this issue. We agree with the comment to the extent that software and 
other electronic interface technologies are and may continue to be 
essential for the safe and functional operation of modified automobiles 
and adaptive equipment. However, we do not believe that adding 
modifying language such as ``tangible,'' ``non-tangible,'' or 
``intangible'' to the definition of ``adaptive equipment'' would 
provide the additional clarity that the commenter seeks. We believe 
those terms are too subjective, and further we do not know of 
standardized definitions or characterizations of those terms in 
National Highway Traffic System Administration (NHTSA) guidance or 
regulations. We do, however, amend the definition of ``adaptive 
equipment'' to specifically include language related to equipment being 
essential for the continued safety and functionality of a modified or 
altered automobile and adaptive equipment. We believe this will assist 
to capture software or other electronics-based equipment to ensure it 
is covered in the definition of ``adaptive equipment.''
    One commenter stated that the definition for adaptive equipment 
deviates from the statutory definition of that same term in 38 U.S.C. 
3901(2) and stated that VA should explain why the definitions are not 
the same. We first note that the definition of adaptive equipment found 
in Sec.  17.157 is essentially unchanged from when the rule first 
published in 1988 (53 FR 46608, Nov. 18, 1988). The only prior 
amendment to this section occurred in 1996, when the section was 
redesignated and a nonsubstantive change of job title from Chief 
Medical Director to Under Secretary for Health established. (61 FR 
21966, 21968, May 13, 1996). In the present proposed rule, we stated 
that we would change the phrase ``any term'' to ``any item'' for 
purposes of clarity. We do not agree with the statement that the 
regulation deviates from the statute. The statute at 38 U.S.C. 3901(2) 
does not define the term adaptive equipment per se but does provide 
examples of the types of equipment or modifications that may fall 
within the ambit of that term. Section 17.157 defines the term adaptive 
equipment, incorporates statutory language regarding what types of 
equipment may be included, and then addresses VA's authority to specify 
other items as ordinarily necessary for any of the classes of losses or 
combination of such losses specified in 38 CFR 17.156, or as deemed 
necessary in an individual case for an eligible person. We make no 
changes based on this comment.
    We proposed adopting several definitions found in the National 
Traffic and Motor Vehicle Safety Act (Pub. L. 89-563) as amended. We 
proposed defining the term ``manufacturer'' to mean the same as in 49 
U.S.C. 30102(a)(6). One commenter stated that the correct citation is 
to 49 U.S.C. 30102(a)(5). We disagree. While the definition of 
manufacturer was originally designated at 49 U.S.C. 30102(a)(5), it was 
redesignated as paragraph (a)(6) in Public Law 114-94, section 
24109(b)(2). We make no changes based on this comment.
    We proposed defining registered provider and unregistered provider. 
We

[[Page 51226]]

proposed defining a registered provider as a manufacturer, modifier, or 
alterer registered with the NHTSA's Modifiers Identification Database 
currently available at https://www.nhtsa.gov/apps/modifier/index.htm. 
Any manufacturer, modifier, or alterer who is not registered is 
considered an unregistered provider.
    The purpose of the NHTSA Modifiers Identification Database is to 
provide a running and cumulative listing of all individuals or entities 
that have sought identification as a vehicle modifier under the 
requirements of 49 CFR part 595. NHTSA does not approve or endorse any 
of the modifiers who have furnished information under part 595.
    One commenter stated that VA should reconsider its proposed 
reliance on NHTSA to ensure quality, as NHTSA's expertise in the 
adaptive equipment arena is focused on vehicle safety and not on the 
quality of adaptive equipment installation, replacement, or repair. The 
commenter stated that the data provided in the database is only as 
accurate as the information submitted by each modifier and is not 
verified or validated by NHTSA. Furthermore, the database is updated as 
new information is received but is not purged of those modifiers who 
may have over time changed names, addresses, or gone out of business. 
NHTSA does not assess the abilities of any of the listed modifiers to 
perform any requested or represented modification services. The 
commenter stated that VA's reliance on the Database as an indicator of 
vendor competence would be misplaced, misleading, and potentially 
dangerous. The commenter stated that the Database is not a listing of 
credible vendors proven to meet objective quality and safety criteria. 
The commenter also indicated that it believed a better source for 
identifying qualified modifiers would be reliance on membership in its 
organization.
    We do not agree. The purpose of the NHTSA Modifiers Identification 
Database is to provide a running and cumulative listing of all 
individuals and entities that have sought identification as a vehicle 
modifier under the requirements of 49 CFR part 595. We are using the 
database because registration is indicative of the provider 
acknowledging that it is cognizant of the relevant regulatory 
requirements. The database is available to the public for the purpose 
of identifying a modifier in a given geographical area. VA believes it 
is prudent to rely on a database, created by a sister Federal agency 
with subject matter expertise, that serves as a readily accessible 
resource for eligible persons seeking registered providers of adaptive 
equipment installation and repair.
    As noted by two commenters, registered providers can be reimbursed 
for labor costs while unregistered providers cannot. One commenter 
stated that VA should clearly state that in the regulation. This was 
stated in proposed 38 CFR 17.158(b)(3)(iii). We make no changes based 
on these comments.
    One commenter asked what manner or by what method VA intends to 
confirm that unregistered providers are not conducting or being 
reimbursed for activities intended to be performed exclusively by 
registered providers. We do not distinguish providers based on the 
activities they perform and do not possess the necessary knowledge or 
expertise to delineate identified activities related to adaptive 
equipment installation, repair, reinstallation, or replacement 
exclusively to registered or unregistered providers. As stated in 
proposed 38 CFR 17.158(b)(2)(ii), VA will reimburse eligible persons 
identified in 38 CFR 17.156(a) who have purchased adaptive equipment 
(e.g., installations, repairs, reinstallations, replacements) from 
unregistered providers. However, VA does not reimburse or pay 
unregistered providers for labor costs as mentioned in the foregoing 
paragraph. We make no changes based on this comment.
    One commenter expressed concern that there may be areas of the 
country where veterans with disabilities do not have access to 
registered providers, or perhaps they have a long-standing relationship 
with an unregistered provider. The commenter indicated VA should create 
limited exceptions to its rule regarding labor costs so that these 
veterans are not disadvantaged. The commenter noted that under the 
provisions of Public Law 114-256, Sec. 3(b)(8), where technically 
appropriate, VA is to allow veterans to receive vehicle modifications 
``at their residence or location of choice.'' We note that any provider 
of adaptive equipment may register with the NHTSA database regardless 
of location, in the United States or elsewhere. We make no changes 
based on this comment.


Sec.  17.158  Limitations on Assistance.

    We proposed amending paragraph (b) to state that VA will reimburse 
eligible persons or pay registered providers for adaptive equipment 
that VA determines is needed based on the information submitted and the 
Schedule. In addition to payment or reimbursement rates for specific 
types of adaptive equipment listed in the Schedule, VA would pay or 
reimburse for roadside service, waste disposal fees, and hourly labor 
rates listed in the Schedule, subject to this section. Payment or 
reimbursement rates would be based on the information submitted, the 
Schedule in effect on the date installation, reinstallation, 
replacement, or repair is complete and the characterization of the 
equipment as new, used, or unlisted.
    Proposed paragraph (b)(3) would establish how VA would use the 
Schedule for calculating the amount reimbursed to eligible persons or 
payments made to registered providers for labor costs. VA proposed 
creating a Schedule that would set national payment/reimbursement rates 
utilizing the high cost itemized in National Mobility Equipment Dealers 
Association's (NMEDA) Average Price Survey, which we stated was 
published annually. One commenter requested that VA correct the 
reference in the proposed rule to how often the NMEDA's Average Price 
Survey is published because that survey is conducted and published 
every other year. We thank the commenter for the correction and clarify 
that this was a misstatement in the proposed rule rather than a 
substantive misunderstanding; VA will use the most recently conducted 
and published survey. However, as this reference to how often the 
survey is published is not reflected in regulatory language, we make no 
changes based on this comment.
    In the preamble for the proposed rule we included an example of a 
Schedule, which was intended to provide the public an indication of 
what the Schedule would look like and the types of adaptive equipment 
that may be listed consistent with what is listed in NMEDA's Average 
Price Survey, and payment or reimbursement rates for adaptive equipment 
or other related services. We used data from the 2018 Average Price 
Survey to compile this example.
    One commenter stated that the Schedule as printed in the proposed 
regulation and the proposed definition at Sec.  17.157 departs from the 
statutory definition in 38 U.S.C. 3901, and that VA should explain its 
departure from the statutory language. As VA did not propose to define 
the term ``schedule,'' and given the remaining context of the comment, 
we assume the commenter was referring to the definition of ``adaptive 
equipment'' as proposed. We reiterate from our response above that the 
term ``adaptive equipment'' as proposed in Sec.  17.157 is consistent 
with the definition in 38 U.S.C. 3901(2). Further, the Schedule as 
printed in the proposed rule is not limited to items

[[Page 51227]]

specifically included in the statutory definition, although the 
equipment and services found in the sample Schedule are wholly within 
the definition of adaptive equipment found in the statute and 
implementing regulation. We make no changes based on this comment.
    One commenter stated that the Schedule published in the preamble 
for the proposed rule is based on data collected nearly two years ago. 
The commenter recommended that VA's proposed Schedule utilize the most 
current survey of this type.
    As we noted in our discussion of the proposed rule, the Schedule we 
included in the preamble is intended to be an example of what the final 
version would look like. We agree that the final Schedule published in 
conjunction with the final rule should be based on the most current 
data. VA believes there is some confusion on this issue created by a 
drafting error in proposed paragraph (b)(7) where we stated that ``VA 
will establish the Schedule for each fiscal year after September 30, 
2019 and publish that Schedule on a publicly accessible page on the 
www.prosthetics.va.gov website.'' The reference to September 30, 2019, 
is an artifact from an earlier internal VA draft of the proposed rule. 
We amend paragraph (b)(7) to state that VA will establish the Schedule 
on July 17, 2024 based on the most recent available data and each 
fiscal year thereafter, and publish that Schedule on a publicly 
accessible page on the www.prosthetics.va.gov website.
    In paragraph (b)(4) we proposed addressing payment or reimbursement 
for installation of new adaptive equipment, where paragraph (b)(4)(i) 
states that VA will pay the lesser of the amount for the new adaptive 
equipment listed in either a final itemized: (1) Invoice, (2) paid 
receipt, or (3) bill of sale for the purchase; or (4) the amount listed 
in the Schedule. One commenter asked whether paragraph (b)(4)(i)(4) 
permits a veteran to be reimbursed at the schedule rate if the price of 
certain adaptive equipment is not set out separately in the receipt of 
a new vehicle because such equipment has already been installed and 
included in the overall cost of the vehicle (such as air conditioning 
or power steering). We clarify that paragraph (b)(4)(i)(4) does provide 
that VA will reimburse at the schedule rate, which would address 
situations where the adaptive equipment is already installed on a new 
vehicle and the price of such equipment is not separately itemized as 
provided in paragraphs (b)(4)(i)(1) through (3).
    We make no changes based on this comment.
    Proposed paragraph (b)(4)(i) states that VA will pay the lesser of 
the amount for the new adaptive equipment listed in either a final 
itemized: (1) Invoice, (2) paid receipt, or (3) bill of sale for the 
purchase; or (4) the amount listed in the Schedule. One commenter 
stated that VA should place the Schedule reference first in this 
subsection, effectively making the Schedule the default assumption for 
reimbursement given modern invoicing requirements and dealer practices. 
Paragraph (b)(4)(i) is not intended as a hierarchical list. The 
Schedule amount is not the default preference as it relates to payment 
or reimbursement amounts. We make no change based on this comment.
    In paragraph (b)(5) we proposed addressing payment or reimbursement 
for installation and repair of used adaptive equipment. We proposed 
that for used adaptive equipment listed in the Schedule that is more 
than one (1) year old from the date of manufacture VA will depreciate 
it by twenty (20%) percent per year from the time the equipment was 
pre-installed or installed as new on an automobile or other conveyance 
to the time of its reinstallation for which reimbursement or payment is 
being sought for a period up to five (5) years. VA would reimburse an 
eligible person, who meets the requirements of (b)(2)(i) or (ii), or 
pay a registered provider who meets the requirements of (b)(2)(iii) the 
lesser of the amount of the adaptive equipment listed in the final 
itemized invoice, paid receipt, or bill of sale for the purchase or the 
amount listed in the Schedule reduced by twenty (20%) percent for each 
year from the time the equipment was pre-installed or installed on the 
automobile or other conveyance for a period up to five (5) years. We 
proposed that VA would reimburse or pay any labor costs consistent with 
paragraph (b)(3) of this section, but would not reimburse or pay labor 
costs for used equipment that is more than five (5) years old from the 
date of manufacture.
    One commenter argues that the proposed rule regarding depreciation 
is a drastic departure from current practice, and that VA has 
accelerated the depreciation schedule to the detriment of veterans with 
disabilities but has not explained its departure from its long-standing 
practice. The commenter references a VHA policy regarding reimbursement 
for adaptive equipment when used vehicles are purchased.
    The VHA policy the commenter references is VHA Handbook 1173.4 
Automobile Adaptive Equipment Program, which bases the reimbursement 
rate for prescribed adaptive equipment on a used vehicle on the age of 
the vehicle regardless of the age of the adaptive equipment. However, 
VHA determined that adaptive equipment depreciates at a faster rate 
than the vehicle itself and the functional lifespan of that equipment 
is five years. Because of the finite functional lifespan of adaptive 
equipment, VA does not recommend use of any specific adaptive equipment 
older than five years to ensure the continued safety and functionality 
of a modified automobile and adaptive equipment. VA's adoption of a 20% 
annual depreciation standard for reimbursement or payment for used 
adaptive equipment reflected in the proposed rule accounts for the 
five-year functional lifespan of the adaptive equipment which also 
aligns with eligible persons being entitled to new adaptive equipment 
at the end of a four-year period (in other words, every five years). We 
make no changes based on this comment, but do note that VHA Handbook 
1173.4 will be rescinded and replaced with updated guidance upon this 
final rule being effective. We note that VHA Handbook 1173.4, paragraph 
13 is similar to VBA's policy, VA Manual MP4, Part IV, Chapter 18, 
section 18A.03, which provides payment information for prescribed 
adaptive equipment on a used vehicle on the age of the vehicle 
regardless of the age of the adaptive equipment. We will work with VBA 
to harmonize its guidance with VHA policy and regulation following 
publication of this rulemaking.
    One commenter stated that the deprecation rule affects 
reimbursement for repair of adaptive equipment, and that decreasing the 
depreciation period is unreasonable and contradicts 38 U.S.C. 3902(c) 
which requires reimbursement for repair of adaptive equipment, with no 
restriction on the age of the equipment.
    We do not agree. Section 3902(c) begins with the language ``[i]n 
accordance with regulations that the Secretary shall prescribe,'' to 
further mandate, among other things, that VA repair adaptive equipment. 
This is discretionary language that provides VA authority to determine 
conditions related to that repair, to include establishing and 
modifying a depreciation period associated with reimbursements of 
repair of adaptive equipment. Paragraph (c) of 38 U.S.C. 3902 must also 
be read in conjunction, and harmonized, with other provisions of 
Chapter 39. VA must provide each eligible person the adaptive equipment 
deemed necessary to ensure that the

[[Page 51228]]

eligible person will be able to operate the automobile or other 
conveyance in a manner consistent with such person's own safety and the 
safety of others. See 38 U.S.C. 3902(b)(1). Adaptive equipment, like 
any other automotive component, experiences wear and tear after 
installation from normal use as well as any conditions specific to the 
environment in which it must operate. In addition, installed adaptive 
equipment has a finite service life which can be maintained or extended 
by component repair or replacement. However, service life is reset if 
the adaptive equipment is replaced, and VA believes that new adaptive 
equipment is less likely to require repair in order to maintain 
functionality at a level sufficient to ensure that an eligible person 
can operate the automobile or other conveyance in a manner consistent 
with such person's own safety and the safety of others. Further, 
repeated repair of older installed adaptive equipment rather than 
replacement deprives an eligible person of any medical benefit that 
could accrue from design changes or improvements that a manufacturer 
may incorporate into later models of that adaptive equipment. In 
addition, adaptive equipment incorporates relevant standards in place 
at the time of manufacture. By requiring replacement rather than repair 
of adaptive equipment older than five years VA can ensure, to the 
greatest extent practicable, that eligible persons have access to and 
use of adaptive equipment that is manufactured consistent with up to 
date quality standards. We make no changes based on this comment.
    In paragraph (b)(6) we proposed addressing payment or reimbursement 
for any adaptive equipment that does not appear on the Schedule but 
meets the definition of adaptive equipment in Sec.  17.157.
    One commenter stated that new technologies will be developed 
independently of VA's Schedule maintenance, and the regulations lack 
clear instructions for veterans who purchase a vehicle before the 
Schedule update occurs. The commenter believes that it may be confusing 
for veterans to have customized equipment lumped together with 
equipment that is likely to move onto the Schedule. The commenter 
provided examples of a vehicle manufacturers adding a feature that 
would qualify as adaptive equipment that becomes available for purchase 
starting January 1, and veterans purchasing the new equipment earlier. 
Specifically, the commenter raised the issue of equitable treatment. 
The commenter also expressed concern that veterans may delay vehicle 
purchases until the Schedule update is published to be sure their 
equipment will be included.
    For adaptive equipment that is not listed on the Schedule but meets 
the definition of adaptive equipment, VA will pay or reimburse the 
lesser of the cost of the adaptive equipment when equal to or less than 
what VA has paid for a similar item in the past or, when available, the 
commercially available price for a similar item. In many cases, VA will 
have paid for a similar item in the past, or VA will be able to compare 
the item to other items available commercially. If the price of a 
similar commercially available item is not available, or VA has not 
previously paid for a similar item, VA will pay or reimburse the billed 
charges. Authorizing payment of actual cost by obtaining the final 
invoice, paid receipt, or bill of sale for the purchase would provide 
VA with information that can be used in future revisions to the 
Schedule. We make no changes based on this comment.
    In proposed paragraph (b)(7) we addressed annual adjustments to the 
Schedule. We proposed that VA will increase the reimbursement amounts 
in the Schedule using the indices for two expenditure categories of the 
Consumer Price Index (CPI) for All Urban Consumers. The index for the 
expenditure category for ``motor vehicle parts and equipment'' will be 
used to calculate the increase in the reimbursement amounts for 
adaptive equipment on the Schedule, and the index for ``motor vehicle 
maintenance and repair'' will be used to calculate the increase in the 
reimbursement amounts for labor.
    One commenter stated that VA should not rely on CPI to update costs 
on the Schedule. The commenter stated that vehicular and adaptive 
equipment technologies are evolving and will continue to evolve, and 
the associated expenses must be accounted for if VA's Schedule is 
intended to be accurate and credible. The commenter stated that 
increasingly sophisticated automobile technology and newly developed 
adaptive equipment product prices may not be accurately reflected by a 
CPI-reliant update.
    We do not agree. VA believes that the two CPI expenditure 
categories will adequately reflect changes to both equipment and labor 
costs, and we have been unable to identify any other alternate 
categories that would better serve that purpose. We note that our usage 
of the CPI for all urban consumers as the basis for adjusting payment 
and reimbursement amounts for adaptive equipment listed on the Schedule 
is consistent with the statutory scheme found at 38 U.S.C. 3902(e) for 
annual adjustments for VA payments of the total purchase price of the 
automobile or other conveyance under paragraph (a) of that section. We 
make no changes based on this comment.

Miscellaneous

    One commenter requested that VA confirm that, consistent with the 
Veterans Mobility Safety Act of 2016 (Pub. L. 114-256), it will develop 
a comprehensive policy that covers quality standards for providers 
(both registered and unregistered) of automobile adaptive equipment 
services to eligible persons; consistently apply (to both registered 
and unregistered providers) those standards for safety and quality of 
both equipment and installation throughout VA; and provide for third-
party certification of both registered and unregistered providers. 
Another commenter requested confirmation that both evaluations and 
installation reviews will be addressed in subsequent VA rulemaking. The 
current rulemaking focuses on issues related to payment and 
reimbursement for the installation, repair, replacement, and 
reinstallation of new and used adaptive equipment. Quality and safety 
standards for adaptive equipment are outside the scope of this 
rulemaking. We make no changes based on these comments.
    Lastly, two commenters recommended that VA engage with relevant 
stakeholders on implementation of this rulemaking when it becomes 
final. We make no changes based on these comments, but do note that VA 
has made a longstanding commitment to internal and external 
stakeholders including eligible persons, veteran services 
organizations, industry representatives, and others, to engage in 
meaningful dialogue regarding VA's adaptive equipment program and seek 
input and advice on how best to serve our Nation's veterans. We 
reiterate from the proposed rule that VA conducted public hearings with 
NHTSA, industry representatives, manufacturers of adaptive equipment, 
and other entities with expertise in the installation, repair, 
replacement, and manufacturing of adaptive equipment or development of 
mobility accreditation standards for adaptive equipment in compliance 
with section 3 of Public Law 114-256. VA published a Federal Register 
Notice (FRN) requesting information and comments to assist in the 
development of the program required by the Act on February 2, 2017. See 
82 FR 9114. VA received numerous comments from adaptive equipment

[[Page 51229]]

manufacturers, providers, trade associations, and other interested 
external stakeholders. Additionally, VA met in person with several 
parties, including adaptive equipment manufacturers, alterers and 
modifiers; and adaptive equipment related associations who requested to 
meet with VA concerning their comments to the FRN.
    VA makes nonsubstantive changes to the last sentence of Sec.  
17.158(b) as proposed, which characterized ``low technology'' labor. 
These are editorial revisions that do not change meaning and that are 
consistent with the proposed characterization of ``high technology,'' 
where the last sentence of Sec.  17.158(b) now reads ``In Shop (low 
technology) means labor performed on or modification of adaptive 
equipment devices that do not meet the definition of High Technology.''
    Based on the rationale set forth in the proposed rule and in this 
document, VA adopts the proposed rule as final, with changes as noted 
above.

Executive Orders 12866 and 13563 and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
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 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Order 12866 of September 30, 
1993 (Regulatory Planning and Review), and Executive Order 13563 of 
January 18, 2011 (Improving Regulation and Regulatory Review). The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is not a significant regulatory action under Executive Order 
12866, as amended by Executive Order 14094. 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.
    In 38 CFR 17.157 as proposed we would define modifier to mean a 
motor vehicle repair business that modifies a motor vehicle to enable a 
person with a disability to operate, or ride as a passenger in, the 
motor vehicle, and would define alterer to mean the same as in 49 CFR 
567.3. Registered provider would also be defined to mean a 
manufacturer, modifier, or alterer registered with the Department of 
Transportation's National Highway Traffic Safety Administration (NHTSA) 
Modifiers Identification Database (``Database'') currently available at 
https://vpic.nhtsa.dot.gov/mid/home/ModifierSearch/. Any manufacturer, 
modifier, or alterer who is not registered would be considered an 
unregistered provider. The final rule establishes a national schedule 
for the maximum allowable reimbursement amounts for the listed adaptive 
equipment. The schedule also includes the maximum hourly labor rates 
for installation, repair, reinstallation, and replacement of this 
equipment and allowable fees that VA will pay for. It also establishes 
standards for applying for reimbursement or payment for items listed in 
this schedule and delineate limitations on VA's payment for adaptive 
equipment and related services.
    The database, accessed on February 15, 2024, lists a total of 1,252 
modifiers. Many modifiers reflected in the database have multiple 
listings, with some having more than 15 separate listings.
    In conducting this Regulatory Flexibility Act analysis, we looked 
to the estimated number of modifier respondents as analyzed as part of 
information collection estimates under the Paperwork Reduction Act for 
OMB Control Number 2900-0188 (as associated with VA's AAE program, and 
as has been submitted to OMB for review and approval), who are 
requesting payment from VA for adaptive equipment. We estimate the 
number of total respondents to this information collection to be 6,800 
annually, of which 6,250 would be eligible persons (veterans or 
servicemembers) and 550 would be the modifiers themselves. In analyzing 
the Regulatory Flexibility Act effect here, and based on our proposed 
definition of modifier, we will refer to these 550 as registered 
providers. The final rule also addresses unregistered providers. 
Unregistered providers are those that are not listed in the NHTSA 
database, and VA believes it is not possible to determine an accurate 
number for unregistered providers, some of which may be individuals 
rather than small entities. NHTSA has advised that it does not know the 
number of modifiers, alterers, or manufacturers of adaptive equipment 
that have not registered in the database. For purposes of this analysis 
we will assume 100 unregistered providers would provide services under 
this rule.
    The North American Industry Classification System (NAICS) is the 
standard used by Federal statistical agencies in classifying business 
establishments for the purpose of collecting, analyzing, and publishing 
statistical data related to the U.S. business economy. VA has 
identified three broad categories of NAICS codes that we believe 
encompass the term manufacturer from the proposed rule. We define that 
term to mean the same as that found at 49 U.S.C. 30102(a)(6), which 
includes a person manufacturing or assembling motor vehicles or motor 
vehicle equipment; or importing motor vehicles or motor vehicle 
equipment for resale. While the definition of manufacturer found at 49 
U.S.C. 30102(a)(6) is broad, including the manufacturing, assembly, or 
import of motor vehicles, the final rule focuses narrowly on 
reimbursement and payment for installation, replacement, or repair of 
adaptive equipment. Applying the relevant part of the statutory 
definition of manufacturer, the final rule focuses on a person 
manufacturing or assembling motor vehicle adaptive equipment, or the 
import of motor vehicle adaptive equipment for resale. We note here 
that major automobile manufacturers do not convert automobiles or vans 
for their disabled customers.
    NAICS Code 336390--Other Motor Vehicle Parts Manufacturing, 
comprises establishments primarily engaged in manufacturing and/or 
rebuilding motor vehicle parts and accessories (except motor vehicle 
gasoline engines and engine parts, motor vehicle electrical and 
electronic equipment, motor vehicle steering and suspension components, 
motor vehicle brake systems, motor vehicle transmissions and power 
train parts, motor vehicle seating and interior trim, and motor vehicle 
stampings). NAICS Code 339113, Surgical Appliance and Supplies 
Manufacturing, comprises establishments primarily engaged in 
manufacturing surgical appliances and supplies. Examples of products 
made by these establishments are orthopedic devices, prosthetic 
appliances, surgical dressings, crutches, surgical sutures, personal 
industrial

[[Page 51230]]

safety devices (except protective eyewear), hospital beds, and 
operating room tables. NAICS Code 423120--Motor Vehicle Supplies and 
New Parts Merchant Wholesalers comprises establishments primarily 
engaged in the merchant wholesale distribution of motor vehicle 
supplies, accessories, tools, and equipment; and new motor vehicle 
parts (except new tires and tubes).
    These three NAICS codes cover a broad range of manufacturers of 
either medical equipment or motor vehicle equipment, including 
manufacturers VA believes are subject to this final rule. While the 
categories are overinclusive we believe that analysis of the regulatory 
impact based on these codes will result in a reasonable approximation 
of costs or impact of the final rule on small entities engaged in the 
manufacture of adaptive equipment.
    Applying the small business standards promulgated in 13 CFR 
121.201, a small entity for NAICS Code 336390 is 1,000 employees or 
less; NAICS Code 339113 is 750 employees or less; and NAICS Code 423120 
is 200 employees or less. Data compiled by the US Census Bureau from 
the 2017 Statistics of U.S. Businesses (SUSB) found at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html 
reflects the following for the NAICS codes:

----------------------------------------------------------------------------------------------------------------
                                                    Enterprise                       Estimated       Estimated
                   NAICS code                       employment       Number of       receipts      receipts per
                                                       size            firms         ($1,000)      firm ($1,000)
----------------------------------------------------------------------------------------------------------------
336390..........................................          <1,000           3,050      37,926,230          12,435
336390..........................................          1,000+              99      40,676,330         410,872
339113..........................................            <750           4,343      17,141,123           3,947
339113..........................................            750+              37       5,086,564         137,475
423120..........................................            <200          14,510      52,776,110           3,637
423120..........................................            200+           8,495     200,217,265          23,569
----------------------------------------------------------------------------------------------------------------

    As noted, these NAICS codes are very broad, encompassing many 
aspects of either medical/surgical or automotive supplies. VA does not 
know with any degree of certainty the total number of these 
manufacturers who build, manufacture or import adaptive equipment. We 
have estimated that the number of modifiers who would be impacted by 
this final rule is 550. For purposes of this analysis we will assume 
that the final rule would affect 250 manufacturers of adaptive 
equipment that would qualify as a small entity. We believe this is most 
likely a high estimate.
    We have identified one six-digit NAISC code that would apply to 
modifiers. We propose to define alterer to mean the same as provided in 
49 CFR 567.3, and modifier to have a similar meaning as provided in 49 
CFR 595.6(a). NAICS 5 Digit Industry 81112 Automotive Body, Paint, 
Interior, and Glass Repair comprises establishments primarily engaged 
in providing one or more of the following: repairing or customizing 
automotive vehicles, such as passenger cars, trucks, and vans, and all 
trailer bodies and interiors; painting automotive vehicle and trailer 
bodies; replacing, repairing, and/or tinting automotive vehicle glass; 
and customizing automobile, truck, and van interiors for the physically 
disabled or other customers with special requirements. We believe NAICS 
Code 811121 Automotive Body, Paint and Interior Repair and Maintenance 
most closely reflects what VA, in this final rule, refers to as alterer 
or modifier. Applying the small business standards promulgated in 13 
CFR 121.201, a small entity for the NAICS Code series 811121 reflects 
that an entity with $9,000,000 in annual receipts is considered a small 
entity.

----------------------------------------------------------------------------------------------------------------
                                                                                     Estimated       Estimated
              NAICS code                  Enterprise employment      Number of       receipts      receipts per
                                                  size                 firms         ($1,000)      firm ($1,000)
----------------------------------------------------------------------------------------------------------------
811121................................  ALL.....................          32,696      38,296,468       1,171,289
----------------------------------------------------------------------------------------------------------------

    Data compiled by the US Census Bureau from the 2017 Statistics of 
U.S. Businesses (SUSB) found at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html reflects that most, if not all, of 
the 32,427 entities in NAICS Code 811121 would qualify as a small 
entity based on 13 CFR 121.201.
    As noted with manufacturers who may be affected by this final rule, 
NAICS Code 811121 is very broad, applying to 32,427 business entities. 
However, only a small percentage of those entities will be subject to 
the final rule as an alterer or modifier of adaptive equipment. We 
believe that this NAICS code is the appropriate code for any registered 
providers not already captured by the other three codes listed above as 
well as unregistered providers that would qualify as a business entity. 
We believe that number is accurate for purposes of determining whether 
this final rule will have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act.
    Title 38 CFR 17.158 addresses limitations on payment. Paragraph (b) 
would state that VA will reimburse or pay for adaptive equipment based 
on the information submitted and the VA Adaptive Equipment Schedule for 
Automobiles and Other Conveyances (Schedule). In addition to payment or 
reimbursement rates for specific types of adaptive equipment listed in 
the Schedule, VA will pay or reimburse labor costs, roadside service, 
and waste disposal fees consistent with the Schedule. Payment or 
reimbursement rates are based on the Schedule in effect on the date 
installation, reinstallation, replacement, or repair is complete. The 
Schedule establishes, inter alia, a national monetary limit on payment 
or reimbursement for adaptive equipment.
    The Schedule is based on results of the National Mobility Equipment 
and

[[Page 51231]]

Dealers Association (NMEDA) 2021 Auto Mobility Price Survey. Out of the 
334 NMEDA members who were invited to participate; 171 dealer members 
met the 100% completion rate. The survey results encompass 106 
individual items grouped into eight categories: vehicle conversions, 
driving aids, driving controls, mobility device securements, mobility 
device carriers, adaptive seating, steering & braking modifications, 
and miscellaneous services and equipment. Reported returns by region: 
North 21%, South 23%, West 25%, Midwest 29%, and Canada 2%.
    The example of the Schedule we publish in this final rulemaking 
reflects the high limit for prices reported by the 171 respondents to 
the survey. The high reported price limit for individual items 
reflected in the NMEDA survey is significantly higher than the low 
reported price in some instances. To highlight one example, for lowered 
floor conversions of mini vans, domestic powered side entry fold out 
conversions reported, the high price is $41,050; U.S National average 
is $37,692 and low price is $26,900. The survey results do not reflect 
variations in the type of specific categories of adaptive equipment 
that are included in these reported prices. Generally, there is a close 
correlation between average prices and high prices reported for the 
individual categories of adaptive equipment. Typically, South and 
Midwest regions reported lower prices than other regions. VA believes 
that the survey responses are a valid representation of regional costs 
and that the number of respondents in each region supports that 
conclusion.
    The final rule states that VA will reimburse eligible persons 
identified in 38 CFR 17.156(a) who have purchased adaptive equipment 
(e.g., installations, repairs, reinstallations, replacements) from 
registered providers. The eligible person must sign and submit to VA a 
completed VA Form 10-1394, an itemized estimate, and provide VA with 
either a final itemized invoice, paid receipt, or bill of sale for the 
purchase. VA may reimburse eligible persons identified in 38 CFR 
17.156(a) who have purchased adaptive equipment (e.g., installations, 
repairs, reinstallations, replacements) from unregistered providers. 
The eligible person must submit to VA a completed VA Form 10-1394 and a 
final itemized invoice, paid receipt, or bill of sale for the purchase. 
In addition, VA will pay registered providers for adaptive equipment 
(e.g., installations, repairs, reinstallations, replacements) furnished 
to eligible persons identified in 38 CFR 17.156(a). The eligible person 
or the registered provider must submit to VA a completed VA Form 10-
1394 and an itemized estimate prior to the completion of work. The 
eligible person or registered provider must provide VA with a final 
itemized invoice after the work is completed. See 38 CFR 
17.158(b)(2)(i) through (iii). Labor costs per hour for registered 
providers are reimbursed or paid based on the lesser amount of what is 
reflected in the Schedule, the estimate, or the final invoice. No 
payment for labor costs would be approved for pre-installed (i.e., 
original equipment manufacturer) equipment, or labor costs billed by an 
unregistered provider. See 38 CFR 17.158(b)(3).
    For installation of new adaptive equipment, VA would pay or 
reimburse the lesser of the amount for the new adaptive equipment 
listed in either a final itemized invoice, paid receipt, or bill of 
sale for the purchase, or the amount established in the Schedule. 38 
CFR 17.158(b)(4).
    VA will use two representative categories of adaptive equipment 
costs from the 2021 NMEDA Auto Mobility Price Survey to estimate 
economic impact on small entities: Domestic manual side entry in-floor 
conversion and exterior transfer seats. VA believes these categories 
are a reasonable representation of adaptive equipment costs. VA will 
likewise analyze retail hourly labor rates (in-shop and high-tech).

             Domestic Manual Side Entry In-Floor Conversion
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Average cost...................         $36,123
High cost......................          37,800  $1,677 above Average
                                                  cost.
Low cost.......................          24,695  $13,105 below High
                                                  cost, $11,428 below
                                                  Average.
------------------------------------------------------------------------


                         Exterior Transfer Seat
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Average cost...................         $11,142
High cost......................          11,545  $403 above Average.
Low cost.......................           7,500  $4,045 below High,
                                                  $10,392 below Average.
------------------------------------------------------------------------


                  Retail Labor Rates/Hr--In Shop Labor
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Average........................            $127
High...........................             145  $18 above Average.
Low............................              95  $50 below High, $32
                                                  below Average.
------------------------------------------------------------------------


                 Retail Labor Rates/Hr--High-Tech Labor
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Average........................            $139
High...........................             185  $46 above Average.
Low............................              85  $100 below High, $54
                                                  below Average.
------------------------------------------------------------------------

    As noted above, VA believes that approximately 6,250 eligible 
persons will apply for adaptive equipment payment or reimbursement 
annually. For purposes of this analysis we are assuming a total of 550 
registered providers and 100 unregistered providers will provide 
services under this final rule. We do not have accurate information 
readily available on regional distribution of either eligible persons, 
registered providers, or unregistered providers. We will assume for 
purposes of this analysis that adaptive equipment services for eligible

[[Page 51232]]

persons will be equally distributed between providers, as we believe an 
analysis based on actual distribution would not impact our conclusions. 
Rounding up to the whole person, each provider would provide services 
to 10 eligible persons.
    VA will reimburse or pay for adaptive equipment at the amount 
listed in either a final itemized invoice, paid receipt, or bill of 
sale for the purchase; or the amount listed in the Schedule, whichever 
is less. For domestic manual side entry in-floor conversions, assuming 
a provider billed at the Schedule amount, the provider would experience 
a net gain of $1,677 to $13,105 per transaction over invoicing at a 
different amount. Exterior transfer seat equipment costs vary from $403 
to $4,045 from the High cost per transaction. Labor costs per hour vary 
from $95 to $145 per hour for in shop labor, and $85 to $185 for high 
tech labor. We note that unregistered providers would not be eligible 
for payment for labor costs and would experience a loss of potential 
revenue as a result.
    Given the relatively small number of eligible persons, cost 
variations for provision of adaptive equipment, and the estimate of 
gross receipts for affected small entities in the identified NAICS 
codes, VA believes 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. 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 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

    Although this final rule contains provisions constituting a 
collection of information under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3521), there are no provisions 
associated with this rulemaking constituting any new collection of 
information or any revisions to the existing collection of information. 
The collection of information for 38 CFR 17.158 is currently approved 
by the Office of Management and Budget (OMB) and has been assigned OMB 
control number 2900-0188.

Congressional Review Act

    Pursuant to Subtitle E of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 
801 et seq.), the Office of Information and Regulatory Affairs 
designated this rule as not satisfying the criteria under 5 U.S.C. 
804(2).

List of Subjects in 38 CFR Part 17

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

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on June 7, 2024, 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 Department of Veterans 
Affairs amends 38 CFR part 17 as follows:

PART 17--MEDICAL

0
1. Amend the authority citation for part 17 by adding the following:

    Sections 17.156 and 17.157 are also issued under 38 U.S.C. 3901 
and 3902.
    Section 17.158 is also issued under 38 U.S.C. 3902 and 3903.


0
2. Amend Sec.  17.156 by:
0
a. Revising the introductory paragraph;
0
b. Revising paragraph (b); and
0
c. Removing the Authority citation at the end of the section.
    The additions and revisions read as follows:


Sec.  17.156  Eligibility for automobile adaptive equipment.

    Automobile adaptive equipment may be authorized if the Under 
Secretary for Health or designee determines that such equipment is 
deemed necessary to insure that the eligible person will be able to 
operate the automobile or other conveyance in a manner consistent with 
such person's safety and so as to satisfy the applicable standards of 
licensure established by the State of such person's residency or other 
proper licensing authority subject to the definitions and limitations 
in Sec. Sec.  17.157 and 17.158.
* * * * *
    (b) VA will reimburse or pay for adaptive equipment for automobiles 
and other conveyances subject to the requirements of 38 CFR 17.158(b).

0
3. Revise Sec.  17.157 to read as follows:


Sec.  17.157  Definitions.

    For the purposes of this part:
    Adaptive equipment means equipment which must be part of or added 
to a conveyance manufactured for sale to the general public to make it 
safe for use by the eligible person and enable that person and the 
conveyance to meet the applicable standards of licensure. Adaptive 
equipment includes any item specified by the Under Secretary for Health 
or designee as ordinarily necessary for any of the classes of losses or 
combination of such losses specified in 38 CFR 17.156, or as deemed 
necessary in an individual case for an eligible person for the 
continued safety and functionality of a modified automobile and 
adaptive equipment. Adaptive equipment includes, but is not limited to, 
a basic automatic transmission, power steering, power brakes, power 
window lifts, power seats, air-conditioning equipment when necessary 
for the health and safety of the veteran, and special equipment 
necessary to assist the eligible person into or out of the automobile 
or other conveyance, regardless of whether the automobile or other 
conveyance is to be operated by the eligible person or is to be 
operated for such person by another person; and any modification of the 
interior space of the automobile or other conveyance if needed because 
of the physical condition of such person in order for such person to 
enter or operate the vehicle.
    Altered vehicle means the same as in 49 CFR 567.3.
    Alterer means the same as in 49 CFR 567.3.
    Manufacturer means the same as in 49 U.S.C. 30102(a)(6).
    Modifier means a motor vehicle repair business that modifies a 
motor vehicle

[[Page 51233]]

to enable a person with a disability to operate, or ride as a passenger 
in, the motor vehicle. VA does not approve, endorse, or assess the 
abilities of any modifiers to perform any requested or represented 
modification services.
    Registered provider means a manufacturer, modifier, or alterer 
registered with the Department of Transportation's National Highway 
Traffic Safety Administration (NHTSA) Modifiers Identification Database 
currently available at https://www.nhtsa.gov/apps/modifier/index.htm. 
Any manufacturer, modifier, or alterer who is not registered is 
considered an unregistered provider.
    Roadside service means emergency roadside services provided to an 
eligible person performed in connection with the repair, 
reinstallation, or replacement of adaptive equipment already installed 
in the automobile or other conveyance. The term is limited solely to 
services provided to make the adaptive equipment operational and does 
not include mechanical repair of the engine or other vehicle systems, 
towing, providing essential fuels and fluids such as gasoline necessary 
to operate the vehicle, or providing locksmith services.
    VA Adaptive Equipment Schedule for Automobiles and Other 
Conveyances (``Schedule'') means the VA schedule that contains the 
maximum allowable reimbursement amounts for the listed adaptive 
equipment. The Schedule also includes the maximum hourly labor rates 
for installation, repair, reinstallation, and replacement of this 
equipment and allowable fees that VA will pay.

0
4. Revise Sec.  17.158 to read as follows:


Sec.  17.158  Limitations on assistance.

    (a) General. An eligible person will not be provided adaptive 
equipment for more than two automobiles or other conveyances at any one 
time or during any four-year period except when, due to circumstances 
beyond the control of such person, one of the automobiles or other 
conveyances for which adaptive equipment was provided during the 
applicable four-year period is no longer available for the use of such 
person.
    (1) Circumstances beyond the control of the eligible person are 
those where the automobile or other conveyance was lost due to fire, 
theft, accident, or court action; when repairs are so costly as to be 
prohibitive; or a different automobile or other conveyance is required 
due to a change in the eligible person's physical condition.
    (2) For purposes of paragraph (a)(1) of this section, an eligible 
person shall be deemed to have access to and use of an automobile or 
other conveyance for which the Department of Veterans Affairs has 
provided adaptive equipment if that eligible person has sold, given or 
transferred the automobile or other conveyance to a spouse, family 
member or other person residing in the same household as the eligible 
person; or to a business owned by the eligible person, spouse, family 
member or other person residing in the same household as the eligible 
person.
    (b) Basis for payment or reimbursement. VA will reimburse or pay 
for adaptive equipment that VA determines is needed in accordance with 
this section based on the information submitted and the VA Adaptive 
Equipment Schedule for Automobiles and Other Conveyances (Schedule). In 
addition to paying or reimbursing for specific types of adaptive 
equipment listed in the Schedule, VA will pay, or reimburse for 
roadside service, and waste disposal fees consistent with the Schedule. 
Determination of payment or reimbursement rates are based on the 
Schedule in effect on the date installation, reinstallation, 
replacement, or repair is complete. Schedule labor rates are classified 
as ``In Shop (low technology)'' or ``High Technology.'' High Technology 
means labor performed on or modification of adaptive equipment devices 
or systems that are capable of controlling vehicle functions or driving 
controls, and operate with a designed logic system, or interface or 
integrate with an electronic system of the vehicle. In Shop (low 
technology) means labor performed on or modification of adaptive 
equipment devices that do not meet the definition of High Technology.
    (1) Payments made for adaptive equipment that is authorized under 
this section shall constitute payment in full and shall extinguish the 
eligible person's liability to the registered provider. The registered 
provider may not impose any additional charge on the eligible person 
for any adaptive equipment that is authorized under this section and 
for which payment is made by VA.
    (2) This paragraph sets forth what must be submitted to VA in order 
for VA to reimburse or pay for adaptive equipment.
    (i) Reimbursement when services performed by registered providers. 
VA will reimburse eligible persons identified in 38 CFR 17.156(a) who 
have purchased adaptive equipment (e.g., installations, repairs, 
reinstallations, replacements) from registered providers. The eligible 
person must submit to VA a completed VA Form 10-1394, an itemized 
estimate, and provide VA with either a final itemized: (1) invoice, (2) 
paid receipt, or (3) bill of sale for the purchase.
    (ii) Reimbursement when services performed by unregistered 
providers. VA will reimburse eligible persons identified in 38 CFR 
17.156(a) who have purchased adaptive equipment (e.g., installations, 
repairs, reinstallations, replacements) from unregistered providers. 
The eligible person must submit to VA a completed VA Form 10-1394 and a 
final itemized (1) invoice, (2) paid receipt, or (3) bill of sale for 
the purchase.
    (iii) Payments to registered providers for adaptive equipment. VA 
will pay registered providers for adaptive equipment (e.g., 
installations, repairs, reinstallations, replacements) furnished to 
eligible persons identified in 38 CFR 17.156(a). The following must be 
submitted before VA will pay. The eligible person or the registered 
provider must sign and submit to VA a completed VA Form 10-1394 and an 
itemized estimate prior to the completion of work. The eligible person 
or registered provider must provide VA with a final itemized invoice 
after the work is completed.
    (iv) In the case of any installation, repair or replacement of 
adaptive equipment performed outside of the United States where an 
invoice, estimate, or bill of sale is calculated in a foreign currency, 
an application submitted under this paragraph must include the 
conversion rate from the foreign currency to U.S. dollars, and 
calculation of the invoice, estimate, or bill of sale amount in U.S. 
dollars.
    (3) VA will reimburse or pay labor costs as follows:
    (i) For any labor costs associated with the installation of 
adaptive equipment by a registered provider, VA will reimburse or pay 
the lesser of:
    (A) The relevant Schedule hourly labor rate, per paragraph (b) of 
this section, multiplied by the number of hours listed by the 
registered provider;
    (B) The labor costs included in the itemized estimate; or
    (C) The hourly labor rate provided by the registered provider in 
the final itemized invoice multiplied by the number of hours listed by 
the registered provider.
    (ii) VA does not reimburse or pay labor costs for pre-installed 
(i.e., original equipment manufacturer) equipment.
    (iii) VA does not reimburse or pay labor costs of unregistered 
providers.
    (4) New adaptive equipment. VA will reimburse an eligible person 
who meets the requirements of (b)(2)(i) or (ii) of this section, or pay 
a registered provider who meets the requirements of (b)(2)(iii)

[[Page 51234]]

of this section for new adaptive equipment (including equipment that 
has been installed or used for one year or less from the date of 
manufacture listed in the Schedule) as follows:
    (i) VA will pay the lesser of the amount for the new adaptive 
equipment listed in either a final itemized: (1) invoice, (2) paid 
receipt, or (3) bill of sale for the purchase; or (4) the amount listed 
in the Schedule.
    (ii) VA will reimburse or pay any labor costs consistent with 
paragraph (b)(3) of this section.
    (5) Used adaptive equipment. For used adaptive equipment listed in 
the Schedule that is more than one (1) year old from the date of 
manufacture:
    (i) VA will depreciate it by twenty (20%) percent per year from the 
time the equipment was pre-installed or installed as new on an 
automobile or other conveyance to the time of its reinstallation for 
which reimbursement or payment is being sought for a period up to five 
(5) years. VA will reimburse an eligible person, who meets the 
requirements of (b)(2)(i) or (ii) of this section, or pay a registered 
provider who meets the requirements of (b)(2)(iii) of this section the 
lesser of the amount of the adaptive equipment listed in the final 
itemized invoice, paid receipt, or bill of sale for the purchase or the 
amount listed in the Schedule reduced by twenty (20%) percent for each 
year from the time the equipment was pre-installed or installed on the 
automobile or other conveyance for a period up to five (5) years.
    (ii) VA will reimburse or pay any labor costs consistent with 
paragraph (b)(3) of this section, but will not reimburse or pay labor 
costs for used equipment that is more than five (5) years old from the 
date of manufacture.
    (6) Unlisted adaptive equipment. For adaptive equipment not listed 
in the Schedule but meeting the definition of adaptive equipment in 38 
CFR 17.157, VA will reimburse an eligible person who meets the 
requirements of (b)(2)(i) or (ii) of this section, or pay a registered 
provider who meets the requirements of (b)(2)(iii) of this section:
    (i) the lesser of the cost of the adaptive equipment when equal to 
or less than what VA has paid for a similar item in the past or, when 
available, the commercially available price for a similar item. If the 
price of a similar commercially available item is not available, or VA 
has not previously paid for a similar item, VA will pay or reimburse 
the billed charges.
    (ii) VA will reimburse or pay any labor costs consistent with 
paragraph (b)(3) of this section.
    (7) VA will establish the Schedule on July 17, 2024 based on the 
most recent available data and each fiscal year thereafter, and publish 
that Schedule on a publicly accessible page on the 
www.prosthetics.va.gov website. VA will increase the reimbursement 
amounts in the Schedule using the indices for two expenditure 
categories of the Consumer Price Index (CPI) for All Urban Consumers. 
The index for the expenditure category for ``motor vehicle parts and 
equipment'' will be used to calculate the increase in the reimbursement 
amounts for adaptive equipment on the Schedule, and the index for 
``motor vehicle maintenance and repair'' will be used to calculate the 
increase in the reimbursement amounts for labor. Such increases to the 
Schedule for adaptive equipment and labor will be equal to the 
percentage by which the respective index increased during the 12-month 
period ending with the last month for which CPI data is available. In 
the event that such index does not increase during such period, there 
will be no change to the Schedule for the reimbursement amounts for 
which the index is used to calculate increases. The amounts for the new 
fiscal year will be rounded up to the whole dollar amount.
    (c) Repair of used adaptive equipment. Reimbursement or payment for 
a repair to an item of used adaptive equipment may be provided for 
adaptive equipment installed on an automobile or other conveyance that 
meets the limitations of paragraph (a) of this section. VA will pay or 
reimburse labor costs associated with the repairs in accordance with 
paragraph (b)(3) of this section.
    (1) For repairs to used adaptive equipment, VA will reimburse the 
eligible person meeting the requirements of (b)(2)(i) or (ii) of this 
section as follows: the lesser of the amount of the adaptive equipment 
listed in either a final itemized: (1) invoice, (2) paid receipt, or 
(3) bill of sale for the purchase.
    (2) For repairs to used adaptive equipment, VA will reimburse a 
registered provider meeting the requirements of (b)(2)(iii) of this 
section as follows: the lesser of the amount of the adaptive equipment 
listed in the final itemized (1) invoice, (2) paid receipt, or (3) bill 
of sale for the purchase.


(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0188.)

[FR Doc. 2024-13116 Filed 6-14-24; 8:45 am]
BILLING CODE 8320-01-P