Vet­er­ans re­sume court fight over ‘non-VA emer­gency care’ costs

The Sun Herald (Sunday) - - Local - BY TOM PHILPOTT

Ear­lier this year the De­part­ment of Vet­er­ans Af­fairs ex­e­cuted a clever re­write of a reg­u­la­tion to avoid re­im­burs­ing hun­dreds of thou­sands of vet­er­ans for non-VA emer­gency health care costs that their own in­sur­ance plans failed to pay in full.

By in­sert­ing two words — “de­ductibles, coin­sur­ance” — into the re­vised rule, VA suc­cess­fully neu­tral­ized the im­pact of the 2016 Staab de­ci­sion from the U.S. Court of Ap­peals for Vet­er­ans Claims to save it­self more than $1 bil­lion.

That court held unan­i­mously in Staab that VA wrongly ig­nored the “plain lan­guage” of a 2010 statute in­tended to pro­tect vet­er­ans with health in­sur­ance from hav­ing to pay hefty out-of-pocket costs for out­side emer­gency care.

On Tues­day a new court bat­tle be­gan. The non­profit Na­tional Vet­er­ans Le­gal Ser­vices Pro­gram (NVLSP), which two years ago helped to de­feat VA on be­half of the same class of vet­er­ans with un­re­im­bursed emer­gency care ex­penses, filed a new class ac­tion law­suit with the same ap­pel­late court in Wash­ing­ton, D.C.

The NVLSP ar­gues that VA again is ig­nor­ing the in­tent of Congress and in­ter­pret­ing the law im­prop­erly to avoid re­im­burs­ing these vet­er­ans for emer­gency care costs that their own health in­sur­ance plans don’t cover.

“They’re try­ing to drive a Mack truck through the statu­tory lan­guage,” said Bar­ton F. Stich­man, NVLSP’s ex­ec­u­tive di­rec­tor and lead at­tor­ney in the law­suit. It was filed on be­half of Coast Guard vet­eran Amanda Jane Wolfe and thou­sands of other vet­er­ans who have seen their claims for nonVA emer­gency care costs de­nied since the VA in­terim reg­u­la­tion was re­leased last Jan­uary.

The law­suit asks the ap­pel­late court to in­val­i­date the reg­u­la­tion and or­der VA Sec­re­tary Robert Wilkie to re­im­burse vet­er­ans for “coin­sur­ance and de­ductible” pay­ments they in­curred from emer­gency med­i­cal treat­ment at non-VA hos­pi­tals.

The reg­u­la­tion “is a sub­terfuge to get around the Staab de­ci­sion,” Stich­man said in a phone in­ter­view. “The VA just doesn’t want to pay these re­im­burse­ments. I have heard their ex­cuse is Congress should pass [more] leg­is­la­tion ad­dress­ing this is­sue. There’s no re­quire­ment that Congress pass a statute twice. … That’s ridicu­lous.”

At stake for vet­er­ans and for tax­pay­ers is a lot of money. VA ini­tially es­ti­mated that if it com­plied with the Staab de­ci­sion, VA health costs would climb by $2.5 bil­lion in the first five years and by $10.6 bil­lion over a decade.

The new law­suit in­volves a dif­fer­ent le­gal ar­gu­ment than de­cided in Staab, Stich­man said. There the court found VA had dis­re­garded amended law and rel­e­vant leg­isla­tive his­tory to deny ex­pand­ing ben­e­fits.

The new law­suit chal­lenges how VA in­ter­prets the 2010 law, specif­i­cally how it de­fines what out- side emer­gency care costs VA is barred from re­im­burs­ing.

The law says vet­er­ans with in­sur­ance plans are re­spon­si­ble for “co­pay­ments and sim­i­lar pay­ments.” The VA reg­u­la­tion takes that phrase and ex­pands it to “co­pay­ments, de­ductibles, coin­sur­ance and sim­i­lar pay­ments.” The prac­ti­cal ef­fect, Stich­man said, is to re­quire vet­er­ans with in­sur­ance cov­er­age to re­main re­spon­si­ble for al­most any emer­gency care costs their in­sur­ance won’t cover.

VA’s in­ter­pre­ta­tion is “out­ra­geous,” Stich­man said. Pay­ments truly sim­i­lar to co­pay­ments would be fixed and mod­est. Yet “coin­sur­ance,” as de­fined by Medi­care and other health plans, are the “per­cent of costs that the en­rollee must pay.” That means what­ever a vet­eran’s own in­sur­ance plan won’t cover.

“I don’t know what the VA is pay­ing for” un­der the re­vised reg­u­la­tion, Stich­man said. For most vet­er­ans stuck with hefty emer­gency care costs, VA is pro­vid­ing lit­tle or no re­lief de­spite their le­gal vic­tory in the Staab de­ci­sion.

“That can’t be what Congress in­tended,” he said.

The named plain­tiff in the class ac­tion law­suit, Ms. Wolfe, needed an emer­gency ap­pen­dec­tomy in Septem­ber 2016. The near­est VA hos­pi­tal was three hours away so she drove to a nearby hos­pi­tal’s emer­gency room for “life-sav­ing surgery,” the law­suit says. Wolfe filed a re­im­burse­ment claim with VA for $2558, the amount her own in­sur­ance failed to cover from a to­tal bill of $22,348.

With the hos­pi­tal threat­en­ing to send her un­paid bill to col­lec­tions in fall 2016, the law­suit says, Wolfe used sav­ings in­tended for post-adop­tion ex­penses to pay the bal­ance. VA de­nied her claim in Fe­bru­ary 2018, one month af­ter is­su­ing its re­place­ment reg­u­la­tion. Since then, VA in­formed one se­na­tor, it has used the re­vised reg­u­la­tion to set­tle its en­tire back­log of Staab cases.

The num­ber of Staab­claims set­tled wasn’t im­me­di­ately avail­able. The law­suit notes that VA had es­ti­mated in a 2016 mo­tion to the ap­peals court, try­ing to stay the Staab rul­ing, that it would re­sult in more than 68 mil­lion re­im­burse­ment claims over the next 10-to-14year pe­riod.

VA pays out­side emer­gency care costs for vet­er­ans el­i­gi­ble for VA care if they have no other health in­sur­ance. But for many years the law re­quired VA to deny claims for non-VA emer­gency care if the vet­eran had al­ter­na­tive health in­sur­ance through an em­ployer or their spouse’s em­ployer or even through Medi­care.

Be­cause this quirky sit­u­a­tion left many thou­sands of vet­er­ans with large out-of-pocket costs, Congress mod­i­fied the statute six years ago. VA, how­ever, wrote im­ple­ment­ing reg­u­la­tions in 2012 that con­tin­ued to di­rect claim pro­ces­sors to deny re­im­burse­ment if vet­er­ans had in­sur­ance to cover part of their emer­gency costs.

The law­suit asks the ap­peals court to de­clare the Jan­uary reg­u­la­tion in­valid and to force VA to re-de­cide all Staab-re­lated re­im­burse­ment claims us­ing a “proper in­ter­pre­ta­tion of the law.”

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