Date: October 5, 1995 [VAOPGCPREC 23-95]{.underline}

From: General Counsel (022)

Subj: Request for Opinion \-- Application of Estate Limitation to
Incompetent Veteran Receiving Rehabilitation Services \--

XXXXXXX, XXXXX X. XXX XXX XX XXXX

To: Director, Compensation & Pension Service (211C)

[QUESTION PRESENTED]{.underline}:

Under what circumstances do residential rehabilitation ser-vices
provided to a veteran in a private facility at Department of Veterans
Affairs (VA) expense constitute hos-pital treatment or institutional or
domiciliary care furnished by the United States for purposes of the
\$1,500 estate limitation of 38 U.S.C. § 5503(b)(1)(A) and 38 C.F.R. §
3.557(b)?

[COMMENTS]{.underline}:

1\. The question presented arose in the following context. In 1986, the
veteran was adjudicated incompetent and assign-ed a 100-percent
disability rating due to organic brain syndrome. Disability compensation
was terminated effective January 1, 1987, because the veteran was
hospitalized at a VA medical center, had no spouse or dependent child,
and had an estate which exceeded \$1,500. On August 10, 1992, VA
accepted a proposal from a private facility to provide the veteran at VA
expense with residential rehabilitative services. Services began on
August 17, 1992, and continued until August 17, 1994, when the veteran
was discharged. The program provided by the private facility involved
assess-ment, supervision, and rehabilitative training in a residential
environment as a means for the veteran to achieve abilities which would
permit some degree of independent living. Compensation at the
100-percent level was reestab-lished effective the date of discharge.
You wish to determine whether the services provided by the private
facility fall within the scope of laws limiting payment of benefits to
certain incompetent veterans receiving care at government expense.

2\. Section 5503(b)(1)(A) of title 38, United States Code, provides
that:

> In any case in which a veteran having neither spouse nor child is
> being furnished hospital treatment or institutional or domiciliary
> care without charge or otherwise by the United States, or any
> political subdivision thereof, is rated by the Secretary . . . as
> being incompetent, and the veteran\'s estate . . . equals or exceeds
> \$1,500, further payments of pension, compensation, or emer-gency
> officers\' retirement pay shall not be made until the estate is
> reduced to \$500.

Similarly, 38 C.F.R. § 3.557(b) provides that, where a veteran is rated
incompetent by VA, has neither spouse nor child, and is "hospitalized,
institutionalized or domiciled by the United States or any political
subdivision, with or without charge," and has an estate, derived from
any source, which equals or exceeds \$1,500, further payments of
pension, compensation, or emergency officer\'s retirement pay will not
be made until the estate is reduced to \$500. [^1]

3\. The applicability of the \$1,500 rule for the period of the
veteran's residence in the private facility turns pri-marily on whether,
under 38 U.S.C. § 5503(b)(1)(A), the veteran's participation in the
VA-funded rehabilitative program of independent living services must be
considered "hospital treatment or institutional or domiciliary care"
furnished by the United States. The General Counsel recent-ly issued an
opinion, VAOPGCPREC 2-95 (O.G.C. Prec. 2-95), which extensively
discussed the terms and history of section 5503(b)(1)(A) and
implementing regulations. That opinion held that the \$1,500 rule is
applicable to veterans hospi-talized in any hospital, including a
private facility, when care is provided at the expense of the United
States.

4\. Although VAOPGCPREC 2-95 dealt with hospital treatment only, the
rationale for that opinion applies as well to institutional and
domiciliary care. In particular, inter-pretation of the reference in
section 5503(b)(1)(A) to institutional or domiliciary care "furnished .
. . by the United States" to include care furnished at a private
facil-ity at government expense is consistent with the references in the
history of that provision to care "at public expense." S. Rep. No. 344,
86th Cong., 1st Sess. (1959), *reprinted in* 1959 U.S.C.C.A.N. 2048.
Further, chapter 17 of title 38, United States Code, authorizes the
Secretary of Veterans Affairs to "furnish" nursing home as well as
hos-pital care under contract with non-VA facilities. 38 U.S.C. §§
1710(a)(3), 1720. Moreover, VA's contemporaneous con-struction of
predecessor statutes to section 5503(b)(1)(A) as applying to care
furnished at VA or government expense applied to institutional and
domiciliary care in addition to hospital treatment. *See* Emergency
Interim Issue (EM) 27-12, para. D.4. (11-25-60); former 38 C.F.R. §
3.255 (1949); Administrator's Instruction No. 1, Section 1, Public Law
No. 662, 79th Congress, para. 4 (9-11-46). In any event, we cannot
attribute to Congress an intention to establish a different rule for
different types of services referred to in the same provision of a
statute.

5\. VAOPGCPREC 2-95 did not address whether rehabilitative programs such
as the one provided to the subject veteran constitute "hospital
treatment or institutional or domicil-iary care" for purposes of section
5503(b)(1)(A). Whether a particular rehabilitation program falls within
the applica-tion of the \$1,500 rule is a factual matter dependent upon
the specific nature of the services provided. Although we are not
prepared to offer an opinion as to how this, or any similar case, should
be adjudicated, we can provide guidance regarding the meaning of the
statutory and regulatory references to hospital treatment and
institutional and domicil-iary care. [^2]

6\. Congress may be presumed to intend that the terms it uses in
statutes will be given their commonly accepted meanings. *See,* *e.g.,*
2A Norman J. Singer, *Sutherland Statutory Construction* § 47.28 (5th
ed. 1992). With regard to "hospital treatment," [^3] the term "hospital"
is defined as "\[a\]n institution for the treatment and care of sick,
wounded, infirm, or aged persons," Black's Law Dictionary 737 (6th ed.
1990), or as "an institution or place where sick or injured persons are
given medical or surgical care." Webster's Third New International
Dictionary 1093 (1981). "Treatment" is described as "\[a\] broad term
covering all the steps taken to effect a cure of an injury or disease;
in-cluding examination and diagnosis as well as application of
remedies." Black's Law Dictionary 1502 (6th ed. 1990). The term is also
defined as "the action or manner of treating a patient medically or
surgically." Webster's Third New International Dictionary 2435 (1981).
Thus, the term "hos-pital treatment would generally connote medical or
surgical steps taken to provide relief to an individual from an in-jury
or disease, when those steps are taken in an institu-tion maintained for
the purpose of providing such care.

7\. With regard to "institutional care," the term "institution" is
defined as "\[a\]n establishment, especially one of an eleemosynary or
public character or one affecting a community." Black's Law Dictionary
800 (6th ed. 1990). The term "care," as used in this context, suggests
"supervision, management: responsibility for or attention to safety and
well-being . . . custody." Webster's Third New Interna-tional Dictionary
338 (1981). Accordingly, "institutional care" may be considered
supervision or management of an individual in the custody of an entity
of a charitable or public character.

8\. In the case of "domiciliary care," the term "domicile" refers to
"\[t\]hat place where a man has his true, fixed, and permanent home."
Black's Law Dictionary 484 (6th ed. 1990). In addition, the term
"domiciliary" has acquired a specific meaning as referring to "a rest
home for chronically ill or permanently disabled war veterans requiring
minimal medical attention." Webster's Third New International Dictionary
671 (1981). For purposes of chapter 17 of title 38, United States Code,
governing VA hospital, nursing home, domiciliary, and medical care, 38
U.S.C. § 1701(7) defines domiciliary care to include necessary medical
services and travel and incidental expenses. Thus, "domiciliary care"
may be considered supervision, management, or custody generally provided
or maintained on a permanent basis to chronically ill or permanently
disabled individuals, including a level of medical services consistent
with those generally associated with a domiciliary facility.

9\. A broad interpretation of the referenced terms is sug-gested by the
history and purpose of section 5503(b). In 1959, Congress enacted Pub.
L. No. 86-146, § 2, 73 Stat. 297, 298 (1959), broadening the \$1,500
rule to prohibit continued payment of veterans' benefits to incompetent
vet-erans without a spouse or children whose estates exceeded \$1,500
and who were "being furnished hospital treatment, institutional or
domiciliary care without charge or other-wise by the United States, or
any political subdivision thereof." Previously, the prohibition had only
applied to treatment or care provided by the Veterans' Administration.
The Senate Report on the bill that became Pub. L. No. 86-146 included
the following statement of purpose: "This bill is designed to prevent
gratuitous benefits for incompetent veterans receiving care at public
expense from accumulating in excessive amounts and passing upon the
death of the veteran to relatives having no claim against the Government
on ac-count of the veteran's military service." S. Rep. No. 344, 86th
Cong., 1st Sess. (1959), *reprinted in* 1959 U.S.C.C.A.N. 2048; *see
also* H.R. Rep. No. 303, 86th Cong., 1st Sess. (1959) (referring
generally to incompetent veterans without spouse or child "being cared
for at public expense"). Thus, the legislation appears to have been
aimed generally at a specified class of incompetent veterans "receiving
care at public expense."

10\. The Veterans' Administration's contemporaneous con-struction of
Pub. L. No. 86-146 reflects an understanding that the \$1,500 rule was
to be applied broadly. Emergency Interim Issue (EM) 27-12 (11-25-60),
issued by the Chief Benefits Director, established interim guidelines
for applying the \$1,500 rule of Pub. L. No. 86-146. Paragraph D.4. of
EM 27-12 stated that the "\[p\]rovisions of PL 86-146 apply to any case
where an incompetent veteran is confined *for any reason* at the expense
of the United States or a political subdivision thereof." (Emphasis
added.) *See also* VAOPGC 16-60 (10-10-60) (\$1,500 rule broad enough to
include confinement of an incompetent individual in a penal
institu-tion). [^4]

[HELD:]{.underline}

The provisions of 38 U.S.C. § 5503(b)(1)(A) and 38 C.F.R. § 3.557(b)
generally require withholding of compensation and pension payments from
incompetent veterans with estates in excess of \$1,500 who have neither
a spouse nor child and who are being furnished hospital treatment or
institutional or domiciliary care by the United States or any political
subdivision thereof. The terms of the statute and regulation encompass
services provided by a private facility at government expense.
Determination of whether the services pro-vided to a particular veteran
by a private facility fit any of the statutory categories of hospital
treatment or insti-tutional or domiciliary care requires an examination
of the veteran's files to determine the nature and purpose of the
services. With regard to hospital treatment, an assessment should be
made as to whether the facility may be considered an institution the
purpose of which is to provide medical and surgical care to sick,
injured, or infirm persons and whether the veteran received such care at
the institution. In the case of institutional care, a determination
should be made whether the facility may be considered a charitable or
public establishment which had custody of the veteran and which provided
supervision or management of the veteran, having assumed responsibility
for the veteran's well being. Finally, with respect to domiciliary care,
the same factors concerning custody and supervision would be relevant.
In addition, an assessment should be made concerning the permanence of
the veteran's residence at the facility and whether the medical services
provided the veteran were consistent with those generally associated
with a domiciliary facility.

Mary Lou Keener

[^1]: The limitation on payment of benefits established by section
    5503(b) and its implementing regulation, 38 C.F.R. § 3.557(b), is
    commonly referred to as "the 1,500 rule."

[^2]: ^?^ Section 3.551(a) of title 38, Code of Federal Regula-tions,
    states in pertinent part that "\[e\]xcept as otherwise indicated the
    terms "hospitalized" and "hospitalization" in 38 C.F.R. §§ 3.551
    through 3.559 mean: (1) Hospital treat-ment in a \[VA\] hospital or
    in any hospital at \[VA\] expense. (2) Institutional, domiciliary or
    nursing home care in a \[VA\] institution or domiciliary or at
    \[VA\] expense." Section 3.557(b)(3) distinguishes between
    "hospitalized," "institutionalized," and "domiciled," whereas 38
    C.F.R. § 3.551(a) includes institutional and domiciliary care within
    the general definition of "hospitalization." Other provisions
    governing application of the \$1,500 rule use the terms
    "hospitalized" or "hospitalization" without distin-guishing among
    hospital, institutional, or domiciliary care. *See* 38 C.F.R.
    §§ 3.557(d), 3.558(a), 3.559(a). The provi-sions referring only to
    "hospitalized" or "hospitalization" may be considered governed by
    the definition provided by section 3.551(a). To the extent section
    3.557(b)(3) lists separately the three types of care, that section
    may be considered to fall within the "\[e\]xcept as otherwise
    indicated" exception to section 3.551(a). In either case, the result
    is the same; the regulatory provisions governing application of the
    \$1,500 rule are made applicable to hos-pital, institutional, and
    domiciliary care.

[^3]: The controlling statute, 38 U.S.C. § 5503(b)(1)(A), pro-hibits
    benefit payments to certain incompetent veterans who are receiving
    "hospital treatment" at VA expense. VA's implementing regulation at
    38 C.F.R. § 3.557(b) uses the term "hospitalized" in describing the
    same prohibition. Since the regulation appears to be intended to
    track the statute, and could not validly depart from its
    requirements, we interpret the statutory and regulatory terms as
    referring to provision of the same services.

[^4]: Consistent with this broad interpretation, the General Counsel
    subsequently determined, in Undigested Opinion,

    8-24-83 (7-5 Domiciliary Care), that services provided

    under an individualized independent living program would be
    considered institutional care for purposes of what is now 38 U.S.C.
    § 5503(b)(1)(A).