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NVLSP Files Class Action Lawsuit Accusing VA of Disseminating False Information To Veterans

Released 1/2/19 | Tags: Class Actions, Court of Appeals for Veterans Claims, Veteran's Benefits

Class Action Lawsuit Accuses VA Of Disseminating False Information that Discourages Tens of Thousands of Veterans From Pursuing VA Reimbursement of Emergency Medical Expenses
NVLSP Asks Federal Court to Order VA to Send Corrections to All Veterans Wrongly Informed About the Reimbursement Entitlement Criteria and to Reinstate Their Claims


WASHINGTON – On New Year's Day, the National Veterans Legal Services Program (NVLSP) filed a class action lawsuit in the U.S. Court of Appeals for Veterans Claims (CAVC) accusing the U.S. Department of Veterans Affairs (VA) of sending false information throughout 2018 to tens of thousands of veterans who had applied for VA reimbursement of emergency medical expenses they incurred at non-VA facilities. The lawsuit, filed with the pro bono assistance of Sidley Austin LLP, asserts that the VA has a practice and policy of informing these veterans – falsely – that they cannot qualify for any reimbursement if they have partial coverage for their emergency medical expenses under a health plan contract. This VA representation is inaccurate, according to NVLSP, because it directly violates the binding decision issued by the CAVC in 2016 in Staab v. Shulkin, which invalidated a VA regulation because it prohibited reimbursement if the veteran had partial coverage under a health care plan.

This is the second time in three months that NVLSP has filed a class action lawsuit in the CAVC claiming that the VA has systematically – in violation of the Staab decision and the statute upon which that decision was based – mishandled tens of thousands of reimbursement claims.  On October 30, 2018, NVLSP filed a class action on behalf of veteran Amanda Wolfe and other veterans challenging the regulation adopted by the VA in January 2018. According to Ms. Wolfe’s lawsuit, that regulation violates the law because it prohibits reimbursement for those emergency medical expenses that the veteran must pay as a deductible or coinsurance payment under the veteran’s health care plan.  

In its New Year's filing, NVLSP represents petitioner, Peter E. Boerschinger, who seeks to represent the tens of thousands of other veterans who, like him, received the inaccurate VA correspondence about the reimbursement criteria. As part of Mr. Boerschinger’s lawsuit, NVLSP also seeks to compel the VA to provide corrected information to all veterans who received the inaccurate communications and to reinstate their reimbursement claims.

“By misinforming so many veterans of their eligibility for reimbursement of non-VA medical expenses, the VA is once again failing to live up to its obligations to those who served our country. The Staab decision in 2016 could not have been clearer. How VA officials could allow these false boilerplate letters to be sent to tens of thousands of veterans seeking reimbursement lies beyond my comprehension. This campaign is a systemic deception by the VA that must be stopped,” said NVLSP Executive Director Bart Stichman.
“The mere inclusion of the language advising veterans that they are not eligible for reimbursement if they have coverage through a third-party health plan obviously has a chilling effect. It discourages veterans from pursuing and appealing their claims, leaving them to have to bear the unnecessary burden of paying thousands of dollars in health care expenses,” said Stichman.

The petitioner – Peter Boerschinger
Plaintiff Peter Boerschinger, 79, is a veteran of the U.S. Navy who served for four years and was designated with a 30 percent disability. In April 2018, Boerschinger received emergency treatment for pneumonia and congestive heart failure from a non-VA provider in Michigan. The VA hospital closest to him had closed their emergency room and directed patients to seek emergency treatment elsewhere. During his hospitalization, doctors attempted to transfer him to the VA hospital several times, but were told there was no room for him. He later submitted a claim to the VA for reimbursement of $1,340.00 associated with his emergency care that was not covered by his health insurance. He received a denial letter from the VA based solely on the grounds that he had other insurance coverage. This determination is contrary to the law. He attempted to negotiate a reduction in payment with the non-VA medical facility, but was unsuccessful in that effort. He was forced to pay the full amount. Given that he is living on Social Security and in a fixed-income county home, this money represented a heavy sacrifice for him. "It is counterintuitive that the VA is promulgating information that creates a disincentive for veterans to obtain third-party health insurance. It also runs directly counter to the Staab case ruling,” said Stichman.

For NVLSP, this is the third time that it has filed suit over VA’s failure to comply with the Emergency Care Fairness Act of 2010 (ECFA). In the first landmark case filed in 2014, NVLSP represented veteran Richard Staab (Staab v. Shulkin) after the VA declined to reimburse him for any of the $48,000 he incurred for emergency open heart surgery purely because secondary insurance covered part of the emergency care bill. In this lawsuit, the CAVC nullified the VA regulation that prohibited reimbursement for any of the veteran’s emergency medical expenses merely because some, but not all of those expenses were covered by the veteran’s insurance. In a watershed and precedential ruling, the CAVC ruled in 2016 that Congress intended the VA to step in as a “secondary payer” where other health care insurers cover only a portion of the cost of the veteran’s emergency treatment and invalidated VA’s regulation.

For nearly two years while it wrote a replacement regulation in an effort to comply with the Staab ruling, the VA put a freeze on tens of thousands of emergency care reimbursement claims from veterans. Ultimately, in January 2018, the VA issued a regulation in lieu of the one invalidated in Mr. Staab’s case, and began to resolve the backlog of reimbursement claims. But the replacement regulation created a new obstacle by forbidding the VA from reimbursing a veteran “for any copayment, deductible, coinsurance or similar payment” incurred during emergency treatment at non-VA hospitals.

According to the second class action lawsuit filed at the CAVC in October 2018 by NVLSP on behalf of Ms. Amanda Wolfe  (Wolfe v. Wilkie), the new regulation violates the ECFA because in contrast to  the ECFA, which limits the scope of non-reimbursable expenses to copayments or “similar payments,” the VA’s 2018 regulations adds deductibles and co-insurance to the list of non-reimbursable expenses.
In September 2016 after becoming unexpectedly ill, Ms. Wolfe had to undergo an emergency appendectomy. Given her critical condition, Wolfe drove herself to the closest emergency room and had life-saving emergency surgery immediately. Unfortunately, the nearest VA hospital was at least three hours away. Wolfe recovered and filed a claim with the VA for reimbursement for $2,558.54. This represented the amount of her $22,348.25 hospital bill not covered by her employer-sponsored health insurance. Faced with the prospect of the hospital sending her unpaid bill to collections in fall 2016, Wolfe felt compelled to pay the bill with savings she had set aside for post-adoption expenses in 2016. The VA denied Wolfe’s claim for reimbursement in February 2018, one month after issuing its replacement regulation, because the remaining $2,558.54 was what Wolfe owed under her insurance policy for copayments, deductibles, and coinsurance. 

Far-reaching consequences for veterans
By the VA’s own original estimates, compliance with the milestone Staab ruling would result in approximately $2.5 billion in costs over a five-year period and $10.6 billion in costs over a 10-year period. The VA later lowered this figure noting because the VA decided not to reimburse cost sharing expenses. The new estimates were reduced to $1.5 billion for the five-year period and $6.5 billion for the ten-year period in emergency medical expenses over the next decade due to the Court’s ruling.
“The new math employed by the VA raises serious concerns about whether veterans will be left holding the bag on all or most of their medical expenses,” said Stichman. “This is no way to treat our brave men and women who selflessly defended our country.”
Background on Wolfe Case
10/30/18 - The 8-Year Battle Continues: NVLSP Again Sues VA Over Continued Refusal To Comply With 2010 Statute
Background Information on the Staab Decision
01/17/2018 –  VA Finalizes Rule Requiring Payment for Non-VA Emergency Claims Under NVLSP Court Victory in Staab
11/29/2017 – Video: Staab v. Shulkin – A Pivotal Case for Veterans
06/16/2017 – NVLSP Wins $2 Billion in Medical Care Benefits for Hundreds of Thousands of Veterans, Applauds VA Secretary’s Decision to Voluntarily Withdraw VA Appeal in Staab v. Shulkin
04/11/2016 – Court Rules That VA Has Shortchanged Veterans Since 2009 By Refusing to Reimburse Them for Emergency Medical Expenses Not Covered by Insurance

The National Veterans Legal Services Program (NVLSP) is an independent, nonprofit veterans service organization that has served active duty military personnel and veterans since 1980. NVLSP strives to ensure that our nation honors its commitment to its 22 million veterans and active duty personnel by ensuring they have the benefits they have earned through their service to our country. NVLSP offers training for attorneys and other advocates; connects veterans and active duty personnel with pro bono legal help when seeking disability benefits; publishes the nation's definitive guide on veteran benefits; and represents and litigates for veterans and their families before the VA, military discharge review agencies and federal courts. For more information go to www.nvlsp.org.
Media contacts:
For NVLSP: Patty Briotta, office 202-621-5698, cell 703-517-1796, patty@nvlsp.org
For NVLSP: Ami Neiberger-Miller, cell 703-887-4877, ami@steppingstoneLLC.com

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