Congress Enacts Enhanced Veterans Administration Authority Impacting Workers Compensation/Insurance

On September 28, 2016, The US Senate passed a continuing resolution (CR) to provide appropriation authority so that the federal government could pay its bills after September 30th. The President is expected to sign the CR. The legislation includes a number of permanent provisions including a provision that prohibits the Veterans Administration from paying for medical services for non-service-connected disabilities and requires that “accurate third-party reimbursement information” be reported. It also provides specific new authority for the VA to recover reasonable charges for such services from any person who does not make disclosure as required.

On the face of this language it is difficult to raise a concern as the VA should only be paying for medical services provided service connected disability. However, the administration of this new language could result in an administrative system in which the VA chooses to determine that any other coverage of medical services becomes primary instead of the VA. Who is responsible for the cost of medical treatment when the disability is due to co-morbidities? What amount of detail is required to be reported? Will the duty to report be extended to the “persons” that are responsible for workers’ compensation plans as well as the individuals who are themselves disabled?

Our experience with WC MSAs suggests that this new statutory language was inserted to expand the reach of the VA to shift costs to other disability and insurance plans. Should we expect that the VA will seek access to Section 111 reports maintained by CMS to identify entities with ongoing responsibility for medical and payments under workers’ compensation plans? What form will the new reporting requirements from “persons” take?

Section 211 of the CR as enacted provides

SEC. 211.

No funds of the Department of Veterans Affairs shall be available for hospital care, nursing home care, or medical services provided to any person under chapter 17 of title 38, United States Code, for a non-service-connected disability described in section 1729(a)(2) of such title, unless that person has disclosed to the Secretary of Veterans Affairs, in such form as the Secretary may require, current, accurate third-party reimbursement information for purposes of section 1729 of such title: Provided, That the Secretary may recover, in the same manner as any other debt due the United States, the reasonable charges for such care or services from any person who does not make such disclosure as required: Provided further, That any amounts so recovered for care or services provided in a prior fiscal year may be obligated by the Secretary during the fiscal year in which amounts are received.

UWC will add this provision to the growing list of federal authorities seeking to shift costs from federal programs to workers’ compensation and other insurance. We will monitor the VA as it releases its administrative interpretation and/or proposed rules to implement this new authority.

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