974 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 

[FR Doc. 2018–00130 Filed 1–8–18; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 17 

RIN 2900–AQ08 

Reimbursement for Emergency 

Treatment 

AGENCY: Department of Veterans Affairs. 

ACTION: Interim final rule. 

SUMMARY: The Department of Veterans 

Affairs (VA) revises its regulations 

concerning payment or reimbursement 

for emergency treatment for non-serviceconnected conditions at non-VA 

facilities to implement the requirements 

of a recent court decision. Specifically, 

this rulemaking expands eligibility for 

payment or reimbursement to include 

veterans who receive partial payment 

from a health-plan contract for non-VA 

emergency treatment and establishes a 

corresponding reimbursement 

methodology. This rulemaking also 

expands the eligibility criteria for 

veterans to receive payment or 

reimbursement for emergency 

transportation associated with the 

emergency treatment, in order to ensure 

that veterans are adequately covered 

when emergency transportation is a 

necessary part of their non-VA 

emergency treatment. 

DATES:

Effective Date: This rule is effective 

on January 9, 2018. 

Comment Date: Comments must be 

received on or before March 12, 2018. 

ADDRESSES: Written comments may be 

submitted by email through http://

www.regulations.gov; by mail or handdelivery to Director, Regulations 

Management (00REG), Department of 

Veterans Affairs, 810 Vermont Avenue 

NW, Room 1063B, Washington, DC 

20420; or by fax to (202) 273–9026. 

(This is not a toll-free number.) 

Comments should indicate that they are 

submitted in response to ‘‘RIN 2900– 

AQ08, Reimbursement for Emergency 

Treatment.’’ Copies of comments 

received will be available for public 

inspection in the Office of Regulation 

Policy and Management, Room 1063B, 

between the hours of 8:00 a.m. and 4:30 

p.m. Monday through Friday (except 

holidays). Please call (202) 461–4902 for 

an appointment. (This is not a toll-free 

number.) In addition, during the 

comment period, comments may be 

viewed online through the Federal 

Docket Management System (FDMS) at 

http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Joseph Duran, Director, Policy and 

Planning VHA Office of Community 

Care (10D1A1), Veterans Health 

Administration, Department of Veterans 

Affairs, 810 Vermont Avenue NW, 

Washington, DC 20420, (303–370–1637). 

(This is not a toll-free number.) 

SUPPLEMENTARY INFORMATION: 38 U.S.C. 

1725 authorizes VA to reimburse 

veterans for the reasonable value of 

emergency treatment for non-service 

connected conditions furnished in a 

non-VA facility, if certain criteria are 

met. One requirement is that the veteran 

must be personally liable for the 

emergency treatment. As originally 

enacted in 1999, the statute provided 

that a veteran is personally liable if the 

veteran ‘‘has no entitlement to care or 

services under a health-plan contract,’’ 

and ‘‘no other contractual or legal 

recourse against a third party that 

would, in part or in whole, extinguish 

such liability to the provider.’’ 38 U.S.C. 

1725(b)(3)(B) and (C) (1999). VA 

interpreted that version of the statute as 

barring reimbursement for veterans with 

any coverage from either a health-plan 

contract or a third party because those 

veterans did not satisfy the requirement 

to have ‘‘no entitlement . . . under a 

health-plan contract’’ and ‘‘no other 

. . . recourse against a third party.’’ 

In addition, the 1999 version of the 

statute distinguished ‘‘health-plan 

contract’’ and ‘‘third party’’ by 

separately defining them. 38 U.S.C. 

1725(f)(2)–(3)(1999). 

On February 1, 2010, Congress 

enacted the Expansion of Veteran 

Eligibility for Reimbursement Act, 

Public Law 111–137 (2010 Act), which 

amended section 1725. The legislative 

history of the 2010 Act provided: 

The Committee has learned that under 

current law the VA does not pay for 

emergency treatment for non-service 

connected conditions in non-VA facilities if 

the veteran has third-party insurance that 

pays any portion of the costs associated with 

such emergency treatment. This situation can 

inadvertently arise if a veteran has minimal 

health insurance coverage through a statemandated automobile insurance policy. 

Consequently, if an emergency does occur, 

and the veteran has a policy containing such 

minimal coverage, the veteran may be 

responsible for essentially the full cost of 

emergency treatment. While some veterans 

are able to negotiate payment plans and debt 

forgiveness of a portion of their medical bills 

with the non-VA hospital where they 

received the emergency treatment, many 

veterans are without the financial resources 

to shoulder such a cost and are unaware that 

the VA would not be responsible for such 

emergency care. H.R. Rep. No. 111–55. 

The 2010 Act amended section 1725 

by striking the phrase ‘‘in part’’ from 

section 1725(b)(3)(C). It also removed 

state-mandated automobile insurance 

policies from the definition of ‘‘healthplan contract.’’ In chief, the effect of the 

2010 amendments is that partial 

payment from a third party is not a bar 

to reimbursement under section 1725, 

assuming all of the other eligibility 

criteria are met; the third-party payment 

is only a bar to reimbursement if it fully 

extinguishes the veteran’s personal 

liability. Thus, eligible veterans who 

receive only partial payment by the 

third party, including state-mandated 

automobile insurance, are eligible for 

VA payment or reimbursement of the 

unpaid portion of their emergency 

medical expenses, subject to the 

payment limitations added by that same 

law. 

VA amended its regulations to comply 

with the 2010 Act. Relevant to this 

rulemaking, VA revised 38 CFR 

17.1001(a)(5), 17.1002(g), and 17.1005(e) 

and (f). Section 17.1001(a)(5) was 

amended to remove state-mandated 

automobile insurance from the 

definition of ‘‘health-plan contract.’’ 

Section 17.1002(g) was amended to only 

prohibit reimbursement from VA if a 

third party extinguished the liability in 

whole, § 17.1005(e) was amended to 

establish a methodology to reimburse 

veterans when a third-party payment 

partially extinguished the veteran’s 

liability, and § 17.1005(f) was 

promulgated to implement the 

limitation in 38 U.S.C. 1725(c)(4)(D) that 

VA may not reimburse any deductible, 

copayment, or similar payment that 

veterans owe to third parties. However, 

because the 2010 Act did not amend 

section 1725(b)(3)(B), pertaining to 

health-plan contracts, VA did not 

amend its corresponding regulation at 

§ 17.1002(f) that bars reimbursement 

from VA if the veteran is entitled to 

either partial or full payment from a 

health-plan contract. Similarly, VA did 

not specify in § 17.1005(f) that it would 

not reimburse amounts for which the 

veteran is responsible under a healthplan contract because it was 

unnecessary to do so; consistent with 

VA’s interpretation of the 2010 Act, 

reimbursement or payment continued to 

be barred if the veteran had coverage 

under a health-plan contract. 

In Staab v. McDonald, 28 Vet. App. 

50 (2016), the U.S. Court of Appeals for 

Veterans Claims (the Court) reversed a 

Board of Veterans’ Appeals (the Board) 

decision denying a claim under section 

1725. The Board had applied 

§ 17.1002(f) to conclude that partial 

payment of the emergency treatment by 

the veteran’s health-plan contract barred 

VA reimbursement. On appeal, the 

veteran challenged § 17.1002(f) as 


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Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 975 

inconsistent with section 1725. The 

Court agreed, and in a precedential 

decision, held invalid and set aside 

§ 17.1002(f) and remanded the case. 

In so doing, the Court interpreted 

section 1725(b)(3)(B) to bar 

reimbursement only if a veteran’s 

health-plan contract would wholly 

extinguish the veteran’s liability. In 

other words, the Court interpreted the 

2010 amendments relating to payment 

by a third party to also apply to section 

1725(b)(3)(B) relating to payment by 

health-plan contracts. 

To reach this conclusion, the Court 

gave particular weight to sections 

1725(c)(4) and (f)(3), which, in the 

Court’s words, ‘‘more broadly include 

health-plan contracts, including 

Medicare, in the category of a ‘third 

party.’ ’’ In addition, the Court reasoned 

that its interpretation was consistent 

with the overall purpose of section 

1725, as amended, i.e., to permit 

reimbursement when a veteran is 

personally liable to the provider of 

emergency treatment for the costs of 

such care. The purpose of this 

rulemaking is to amend the pertinent 

VA regulations to comply with the 

holding of this Court decision. 

First, this interim final rule revises 38 

CFR 17.1002(f). Section 17.1002 

establishes the criteria that must be met 

for veterans to receive payment or 

reimbursement under 38 U.S.C. 1725 for 

emergency treatment for non-serviceconnected conditions at non-VA 

facilities. Specifically, current 

§ 17.1002(f) bars reimbursement unless 

the veteran has, ‘‘no coverage under a 

health-plan contract for payment or 

reimbursement, in whole or in part, for 

the emergency treatment.’’ This rule 

revises the regulation to state that a 

veteran may be eligible for payment or 

reimbursement as long as the veteran 

does not have coverage under a healthplan contract that will fully extinguish 

the veteran’s liability to the provider. 

This change reflects the Court’s 

interpretation that partial coverage for 

the emergency treatment under a 

veteran’s health-plan contract is not a 

bar to reimbursement under section 

1725. Reimbursement is only barred if 

coverage under the health-plan contract 

wholly extinguishes the veteran’s 

liability. We believe that this change 

comports with the holding of Staab. 

Because, in accordance with the Court’s 

decision, VA will now provide payment 

or reimbursement on claims involving 

partial payment by a health-plan 

contract, we also amend § 17.1005 to 

specifically clarify that VA does not 

have authority to reimburse copayments 

or similar payment the veteran owes 

under a health-plan contract. As noted, 

in implementing the 2010 Act, we did 

not address specifically VA’s authority 

to reimburse such amounts owed under 

a health-plan contract, because payment 

or reimbursement in that circumstance 

was wholly barred. We do so now, 

based on the Court’s decision in Staab 

that a veteran is eligible for payment or 

reimbursement when there is a partial 

payment by a health-plan contract, to 

make clear that the prohibition in 38 

U.S.C. 1725(c)(4)(D) (on VA reimbursing 

a veteran for any copayment or similar 

payment that the veteran owes a third 

party) applies to amounts owed by a 

veteran under a health-plan contract. 

To clarify the applicability of this 

regulation change, judicial decisions 

invalidating a statute or regulation, or 

VA’s interpretation of a statute or 

regulation, cannot affect prior final VA 

decisions. See, Jordan v. Nicholson, 401 

F.3d 1296 (Fed. Cir. 2005); Disabled 

American Veterans v. Gober, 234 F.3d 

682, 697–98 (Fed. Cir. 2000). Therefore, 

VA will not retroactively pay benefits 

for claims filed under § 17.1002(f) that 

were finally denied before April 8, 2016, 

the date of the Staab decision. In other 

words, VA can only apply the new 

§ 17.1002(f) to claims pending on or 

after April 8, 2016. We note that all 

claims under § 17.1002(f) involving 

partial payment from a health-plan 

contract pending on April 8, 2016, or 

filed on or after April 8, 2016, have been 

held in abeyance pending the 

publication of this interim final rule. 

Therefore, all such § 17.1002(f) claims 

will be processed using the regulatory 

revisions published in this rule. 

Second, this interim final rule revises 

38 CFR 17.1003 related to emergency 

transportation to be consistent with our 

interpretation that the exercise of VA’s 

authority under 38 U.S.C. 1725 should 

result in veterans’ liability to providers 

of emergency treatment being 

extinguished, except for deductibles, 

copayments, coinsurance, or other 

similar payments owed by the veteran 

for which VA is barred from 

reimbursing under 38 U.S.C. 

1725(c)(4)(D), as described above. 

Although section 1725 does not 

specifically authorize payment for 

emergency transportation, it authorizes 

payment for ‘‘emergency treatment’’ as 

defined in section 1725(f)(1). VA has 

interpreted the phrase ‘‘emergency 

treatment’’ in section 1725(f)(1) to 

include emergency transportation if the 

transportation is provided as part of the 

emergency medical treatment 

administered at the non-VA facility. 

Current § 17.1003 authorizes VA to 

provide payment or reimbursement 

under 38 U.S.C. 1725 for ambulance 

services (including air ambulance 

services) for transporting a veteran to a 

non-VA facility if certain criteria are 

met. We amend § 17.1003(a), (c), and (d) 

and create a new paragraph (e) for the 

following reasons. 

The current regulation states that VA 

will pay for emergency transportation if 

‘‘[p]ayment or reimbursement is 

authorized under 38 U.S.C. 1725 for 

emergency treatment provided at [a nonVA] facility (or payment or 

reimbursement could have been 

authorized under 38 U.S.C. 1725 for 

emergency treatment if death had not 

occurred before emergency treatment 

could be provided).’’ We have 

historically interpreted this paragraph to 

authorize reimbursement for emergency 

transportation only if VA approves and 

makes actual payment on the claim for 

the emergency treatment provided at the 

non-VA facility. The reason for this 

interpretation was that the emergency 

transportation was considered part of 

(not apart or distinct from) the claim for 

emergency treatment. If VA 

reimbursement was not authorized for 

the emergency treatment, 

reimbursement was not authorized 

separately for the emergency 

transportation (in other words, payment 

on the main treatment claim was 

essentially a condition precedent). 

Under current § 17.1003(a), this 

results in denials of claims for 

reimbursement for the costs of 

emergency transportation when a thirdparty payment satisfies the claim for 

emergency medical treatment, despite 

the transportation claim meeting the 

other criteria for reimbursement by VA 

under 38 U.S.C. 1725. So if the veteran 

does not have any remaining liability for 

the treatment provided at the non-VA 

facility due to satisfaction of the 

treatment claim by a third party, VA 

denies that veteran’s claim for 

reimbursement of the emergency 

treatment and, in turn, reimbursement is 

not be authorized for their emergency 

transportation. In practice then, 

application of VA’s existing regulations 

is in tension with VA’s view that 

emergency transportation is part of 

emergency treatment. If VA’s sole basis 

to deny a transportation claim is 

satisfaction by a third party of the 

related emergency treatment claim, even 

if that transportation claim meets all of 

the other requirements for 

reimbursement under 38 U.S.C. 1725, 

VA is, in effect, treating the emergency 

transportation claim differently than the 

related emergency treatment claim. 

To address this, we now revise 

§ 17.1003(a). As amended, § 17.1003(a) 

authorizes reimbursement for 

emergency transportation even if the 

veteran is ineligible to receive 


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976 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 

reimbursement or payment for the 

emergency treatment, if the reason for 

that ineligibility is that the veteran is 

not personally liable for the emergency 

treatment due to satisfaction of the 

treatment claim by a third party, 

including a health-plan contract. We 

note that the veteran is still required to 

be personally liable for the emergency 

transportation as established in 

paragraphs (b)–(e) of the regulation. For 

example, if a veteran has Medicare 

insurance and the Medicare payment 

fully extinguishes the veteran’s liability 

for the emergency treatment but does 

not cover the costs of emergency 

transportation, under the prior 

regulation, VA was not permitted to 

reimburse or pay for the emergency 

transportation because there was no 

remaining liability for the treatment. 

However, under the revised regulation, 

the veteran will be eligible to receive 

reimbursement or payment for the 

emergency transportation, aside from 

deductibles, copayments, or other 

similar payments owed by the veteran, 

as described above, assuming all the 

other eligibility criteria of that section 

are met. 

Therefore, we amend § 17.1003(a) by 

retaining the general criteria that 

payment or reimbursement must be 

authorized under section 1725 for 

emergency treatment provided at a nonVA facility, but we remove the 

parenthetical and instead list out the 

two exceptions for when payment does 

not have to be authorized in order for 

the veteran to be eligible for 

reimbursement: Paragraph (a)(1) says 

that payment does not have to be 

authorized for the emergency treatment 

if the veteran has no remaining liability 

for the emergency treatment because 

prior payment by non-VA, third party, 

sources extinguished the veteran’s 

liability, and paragraph (a)(2) contains 

the language in the current parenthetical 

that authorization is not required if 

death occurred prior to when the 

treatment could have been provided. 

While not directly compelled by the 

Court’s decision, this interim final rule 

also amends paragraphs (c) and (d) of 

§ 17.1003. These changes are 

necessitated by the Court’s holding 

when read in concert with VA’s 

longstanding unchanged regulatory 

interpretation that emergency 

transportation is an integral part of 

emergency treatment, as discussed 

above. Otherwise, current § 17.1003 

would operate in a manner that 

counteracts the changes to § 17.1002(f) 

made by this rulemaking. Paragraphs (c) 

and (d) are therefore revised to allow 

veterans to receive reimbursement or 

payment for emergency transportation 

even if they receive partial payment 

under a health-plan contract or from a 

third party for the emergency 

transportation. We revise paragraph (c) 

to state that a veteran may be eligible for 

payment or reimbursement if the 

veteran does not have coverage under a 

health-plan contract that will fully 

extinguish the veteran’s liability to the 

provider. Similarly, we revise paragraph 

(d) by stating that the veteran may be 

eligible if the veteran has no contractual 

or legal recourse against a third party 

that could reasonably be pursued for the 

purpose of fully extinguishing the 

veteran’s liability to the provider. 

We also amend § 17.1003 by creating 

a new paragraph (e). Paragraph (e) states 

separately the requirement that was 

formerly in paragraph (c) that to be 

eligible for reimbursement or payment 

for emergency transportation, the 

veteran cannot be eligible for 

reimbursement for emergency treatment 

under 38 U.S.C. 1728. This requirement 

was moved for clarity so that each 

distinct requirement is located in a 

separate paragraph. 

Third, this interim final rule revises 

§ 17.1005 pertaining to the payment 

methodologies and limitations used to 

calculate payment and reimbursement 

for claims filed under section 1725. 

Currently, § 17.1005(e) sets forth VA’s 

payment methodology when a veteran 

has contractual or legal recourse against 

a third party whose payment only 

partially extinguishes the veteran’s 

liability to the provider of emergency 

treatment. This provision was originally 

drafted to address only third party 

situations described in section 

1725(b)(2)(C), as interpreted before the 

Court decision. If VA applies the 

methodology in current § 17.1005(e) to 

claims involving partial payments under 

a health-plan contract, it is likely that 

partial payment under a veteran’s 

health-plan contract will exceed the 

maximum amount that VA can pay 

based on the current payment 

limitation. (Section 1725(c)(1) requires 

VA to establish the maximum amount 

that can be paid on claims under section 

1725(a); for eligible claims where a third 

party has already or will make partial 

payment, the law still requires the VA 

payment not to exceed that maximum 

amount.) For this reason, these veterans 

would in most cases be liable to the 

provider for the remaining charges. 

We underscore that the payment 

limitation in § 17.1005 was derived 

based on an understanding of how 

payers in the health care industry 

establish payment rates and then VA 

deliberately reduced the maximum 

payable amount to reflect Congress’ 

original purpose in enacting section 

1725(c)(1), ensuring that providers had 

incentive to seek other sources of 

payment before pursuing payment from 

the government. The limitation, which 

remains today, was not intended to 

apply to claims involving partial 

payments made under a health-plan 

contract because current § 17.1002(f) 

bars reimbursement in that 

circumstance. This is why partial 

payments made under a health-plan 

contract will exceed VA’s current 

maximum payment limitation and why 

applying the current maximum in all 

instances would result in VA not 

making payments in most cases where 

there is payment under a health-plan 

contract. Applying the current 

maximum in all cases would thus be at 

cross purposes with the other proposed 

amendments requiring VA to exercise 

its authority under 38 U.S.C. 1725 when 

there is partial payment by a health-plan 

contract. 

(This is not to say that this cannot, or 

has not, occurred in connection with 

claims involving partial payment by a 

third party other than a health-plan 

contract. In those cases, however, the 

amount of the partial payment typically 

does not exceed the amount that VA can 

pay under the statute and § 17.1005(e), 

e.g., partial payments made by statemandated automobile reparations 

insurance carriers, and so VA’s 

authorized payments generally succeed 

in extinguishing these veterans’ 

remaining personal liability to their 

providers. In cases where the third-party 

payment exceeded VA’s payment limits, 

VA believes that veterans with 

remaining liability simply declined to 

file claims with VA.) 

VA believes that claims properly 

authorized for payment or 

reimbursement under 38 U.S.C. 1725 

should invariably extinguish the 

veterans’ liability to the provider, aside 

from any deductibles, copayments, or 

other similar payments owed by the 

veteran to a third party or under a 

health-plan contract as required by law. 

This includes claims where partial 

payment is made by a third-party under 

a health-plan contract. This is why 

amending the methodology in 

§ 17.1005(e) to ensure VA can make a 

payment on claims involving partial 

payment under a health-plan contract is 

an essential logical outgrowth of the 

Court’s decision and consistent with the 

other amendments made by this 

rulemaking. Otherwise, this rulemaking 

will merely amend § 17.1002(f), in 

accordance with the Court decision, 

without providing an effective 

mechanism to ensure its complete, 

successful, timely, and practical 

application. As explained below, any 


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Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 977 

payment by VA, if accepted by the 

provider and not rejected and refunded 

within 30 days from the date of receipt, 

extinguishes the remainder of the 

veteran’s liability, thereby ensuring VA 

is responsible for the remainder of the 

veteran’s liability instead of the veteran. 

We revise paragraph (a) and remove 

paragraphs (e) and (f) so that paragraph 

(a) now addresses, in one place, all 

reimbursement and payment 

methodologies applicable to claims 

approved under section 1725. 

As revised, paragraph (a)(1) 

establishes the payment methodology to 

be used when VA is the sole payer on 

the claim. This includes situations 

when a veteran does not have coverage 

for the treatment under a health-plan 

contract and does not have any other 

legal or contractual recourse against a 

third party for payment of the 

emergency treatment expenses. 

Historically, this payment methodology 

was established in paragraph (a) and 

provided that VA would pay the lesser 

of the amount for which the veteran is 

personally liable or 70 percent of the 

amount under the applicable Medicare 

fee schedule rate, an amount that VA 

and Congress believed would ensure 

providers still had sufficient incentive 

to pursue reimbursement from other 

liable parties before seeking 

reimbursement from VA. This paragraph 

is revised merely to clarify that it is 

applicable when the veteran is the sole 

payer and is not eligible to receive 

partial payment from a third party, to 

include under a health-plan contract. 

Paragraph (a)(1) now states that where 

an eligible veteran has personal liability 

to a provider of emergency treatment 

and has no contractual or legal recourse 

against a third party, to include under 

a health-plan contract, VA will pay the 

lesser of the amount for which the 

veteran is personally liable or 70 

percent of the applicable Medicare fee 

schedule rate. 

New paragraph (a)(2) applies in cases 

where VA will be the secondary payer 

because the veteran is entitled to partial 

payment under a health-plan contract or 

has other legal or contractual recourse 

against a third party that results in 

partial payment of the emergency 

treatment costs. Paragraph (a)(2)(i) 

requires VA to pay according to the 

current methodology, which is the 

difference between the amount VA 

would have paid under paragraph (a)(1) 

for the cost of the emergency treatment 

and the amount paid or payable by the 

third party. However, that provision 

will apply only when the amount 

calculated under paragraph (a)(2)(i) is 

greater than zero, meaning that VA is 

authorized to make a payment to 

extinguish the veteran’s liability. If the 

payment amount calculated under 

paragraph (a)(2)(i) would be zero and 

the veteran has remaining liability to the 

provider, VA is adopting an alternative 

method to ensure we can make payment 

and extinguish each veteran’s personal 

liability. If the amount paid under 

paragraph (a)(2)(i) would be zero, 

therefore, the payment method in 

paragraph (a)(2)(ii) will apply. 

Paragraph (a)(2)(ii) requires VA to pay 

the lesser of the remainder of the 

veteran’s personal liability after 

payment is made by the third party (or 

health-plan contract) or 70 percent of 

the applicable Medicare fee schedule 

amount for the care provided. Similar to 

paragraph (a)(1), if the veteran’s 

remaining liability under paragraph 

(a)(2)(ii) is less than the 70 percent of 

the applicable Medicare fee schedule 

amount, VA’s payment will equal the 

amount of the veteran’s liability, and the 

veteran will have no personal liability 

for the treatment expenses. If the lesser 

amount is the applicable Medicare rate, 

VA will pay that rate, even if the 

amount billed by the provider is higher, 

and acceptance of the VA payment by 

the provider will extinguish the 

remainder of the veteran’s liability. This 

methodology sets an appropriate ‘‘cap’’ 

on VA’s payment to ensure providers 

have sufficient incentive to pursue the 

primary sources of payment while also 

ensuring that VA has an opportunity to 

make a payment which, if accepted by 

the provider, extinguishes the veteran’s 

liability. This is consistent with section 

1725(a)(1), which requires VA to 

reimburse a veteran for the reasonable 

value of the emergency treatment 

furnished to the veteran, and section 

1725(c)(1)(A), which requires VA to 

establish the maximum amount payable 

under subsection (a); the application of 

the Medicare fee schedule represents 

the Federal government’s standard for 

what constitutes appropriate payment 

amounts under the law. 

Paragraph (a)(3) establishes an 

alternative methodology to use when 

there is no applicable Medicare Fee 

Schedule rate for the emergency 

services provided. In such cases, we 

will use the amount already established 

in our own fee schedule, under 38 CFR 

17.56(a)(2)(i)(B). This is necessary to 

ensure that all potential emergency 

services are covered by this rule. 

Paragraph (a)(4) is similar to current 

paragraph (e)(3). It states that the 

provider will consider payments under 

this section as payment in full and 

extinguish the veteran’s liability to the 

provider. In other words, if the provider 

accepts and does not timely refund VA’s 

payment, under either paragraph (a)(1), 

(a)(2), or (a)(3), the provider must 

consider the payment as payment in full 

and the provider cannot submit 

additional charges to the veteran for 

payment. 38 U.S.C. 1725(c)(4)(C). In 

addition, paragraph (a)(4) includes a 

parenthetical that explains that neither 

the absence of a contract or agreement 

between the Secretary and the provider 

nor any provision of a contract, 

agreement, or assignment to the contrary 

shall operate to modify, limit, or negate 

the requirement in the paragraph. The 

ability of the provider to reject and 

refund VA payment within 30 days from 

the date of receipt and the parenthetical 

at the end of the paragraph are both 

included in order to clarify the rights 

and responsibilities under this 

paragraph which are established in 

section 1725(c)(3). 

Paragraph (a)(5) restates current 

paragraph (f), clarifying that VA will not 

reimburse a claimant under this section 

for any deductible, copayment, 

coinsurance, or similar payment that the 

veteran owes the third party or is 

obligated to pay under a health-plan 

contract. This is consistent with 38 

U.S.C. 1725(c)(4)(D), which, as noted 

above prohibits VA from reimbursing a 

veteran for any copayment or similar 

payment that the veteran owes a third 

party or for which the veteran is 

responsible under a health-plan 

contract. 

Effect of Rulemaking 

Title 38 of the Code of Federal 

Regulations, as revised by this interim 

final rulemaking, represents VA’s 

implementation of its legal authority on 

this subject. Other than future 

amendments to this regulation or 

governing statutes, no contrary guidance 

or procedures are authorized. All 

existing or subsequent VA guidance 

must be read to conform with this 

rulemaking if possible or, if not 

possible, such guidance is superseded 

by this rulemaking. 

Administrative Procedure Act 

In accordance with 5 U.S.C. 

553(b)(3)(B) and (d)(3), the Secretary of 

Veterans Affairs has concluded that 

there is good cause to publish this rule 

without prior opportunity for public 

comment and to publish this rule with 

an immediate effective date. As 

explained above, in a precedential 

decision, the Court invalidated 38 CFR 

17.1002(f), holding that partial payment 

from a health-plan contract was not a 

bar to reimbursement by VA for 

emergency treatment rendered for a 

non-service-connected condition at a 

non-VA facility. This means VA is 

required to process all pending, nonVerDate Sep<11>2014 14:57 Jan 08, 2018 Jkt 244001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\09JAR1.SGM 09JAR1

jstallworth on DSKBBY8HB2PROD with RULES
978 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 

final claims where veterans receive(d) 

partial payment from health-plan 

contracts, assuming all the other 

requirements of 38 U.S.C. 1725 are met. 

VA initially disagreed with the 

Court’s decision. It unsuccessfully 

sought reconsideration of the decision 

in 2016 and ultimately the Government 

appealed the Court decision to the U.S. 

Court of Appeals for the Federal Circuit 

(Court of Appeals). At the start of VA’s 

efforts to obtain reversal of the decision 

in 2016, VA necessarily starting holding 

in abeyance all affected claims. As of 

September 29, 2017, VA is holding 

almost 822,000. 

While the appeal was pending before 

the Court of Appeals, VA made the 

decision in 2017 to withdraw its appeal 

and to proceed with rulemaking and 

then the processing of claims being held 

in abeyance. The Government’s appeal 

unavoidably delayed processing of these 

claims, and the additional time 

associated with a public comment 

period would cause further delay, 

which VA believes would cause 

hardship to veterans and is contrary to 

the public interest. 

As explained above, VA’s current 

payment methodology would typically 

result in partial payments under healthplan contracts exceeding VA’s 

maximum allowable amount, leaving 

many, if not most, veterans’ still 

financially liable to their providers for 

the remaining costs of their emergency 

treatment. Merely revising § 17.1002(f) 

to implement the Court decision 

without, at the same time, amending the 

payment methodology to avoid this 

undesired result would, for all practical 

purposes, result in unsound, ineffective, 

incomplete rulemaking. We would 

provide the right to payment without 

the means by which to achieve the goal 

in practice. Public interest therefore 

compels concomitant revisions be made 

to the payment methodology. 

Similarly, as explained above, under 

current regulations, there are 

circumstances wherein VA must deny 

otherwise eligible claims for 

reimbursement solely because of 

satisfaction of the related treatment 

claim by a third-party payer. VA 

believes this is inconsistent with our 

interpretation of 38 U.S.C. 1725, 

particularly our view that emergency 

transportation is part and parcel of 

emergency treatment, and VA believes 

that failing to remedy that would be 

contrary to the public interest because it 

would also result in veterans receiving 

no reimbursement, causing financial 

hardship for veterans. 

During recent confirmation hearings 

for the Secretary of the Department, 

Senator Rounds expressed frustration 

that VA had not originally complied 

with the amendments to section 1725 

made by the Emergency Care Fairness 

Act (ECFA) (2010), and he criticized VA 

for waiting for 6 years until it received 

the adverse Court decision to change its 

interpretation of section 1725 to accord 

with the Congressional drafters original 

intent. See Congressional Record, 

November 30, 2016, pages S6609– 

S6610. As part of his comments, the 

Senator noted that most affected by 

VA’s failure to implement the ECFA 

amendments as originally intended (and 

confirmed by the Court decision) mostly 

affected elderly veterans, many of whom 

live on fixed incomes and have limited 

financial resources to pay medical bills. 

Id. He provided anecdotal evidence of 

veterans being pursued for payment of 

these expenses by collection agencies 

while these claims have been held in 

abeyance. Id. He also expressed 

additional concern that this situation 

may be playing into the high rate of 

veteran suicide among elderly veterans 

and so simply found VA’s holding of 

claims to be unacceptable. Id. In 

response, the Secretary assured the 

Senator, the Committee, and the general 

public at large that VA would act 

quickly to rectify this situation and get 

these claims processed. 

Even before this, in December 2016, 

Senator Rounds and 21 other Senators 

wrote the Department expressing these 

same concerns, with the additional 

concern that these veteran-claimants 

may not seek needed care in the future 

out of fear of incurring additional 

medical bills. 

In addition, the public record, e.g., 

articles by USA Today, Stars and 

Stripes, etc., Veterans Service 

Organizations, and social media, 

includes reports readily available on the 

internet about the Court decision as well 

as follow-up stories tracking VA’s 

actions. They convey a collective sense 

of concern for claimants who are still 

experiencing continued delays in 

getting their claims processed. 

For these reasons, good cause exists to 

publish this rule without prior 

opportunity for public comment and to 

publish this rule with an immediate 

effective date. Thus, the Secretary issues 

this rule as an interim final rule. VA 

will consider and address comments 

that are received within 60 days of the 

date this interim final rule is published 

in the Federal Register. 

Paperwork Reduction Act 

This interim final rule contains no 

provisions constituting a collection of 

information under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3521). 

Regulatory Flexibility Act 

The Secretary hereby certifies that the 

adoption of this interim 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. It will 

not directly affect any small entities as 

they are defined under the Act. 

Therefore, pursuant to 5 U.S.C. 605(b), 

this interim final rule will be exempt 

from the initial and final regulatory 

flexibility analysis requirements of 

sections 603 and 604. 

Executive Orders 12866, 13563, and 

13771 

Executive Orders 12866 and 13563 

direct 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 

12866 (Regulatory Planning and 

Review) defines a ‘‘significant 

regulatory action,’’ which requires 

review by the Office of Management and 

Budget (OMB), as ‘‘any regulatory action 

that is likely to result in a rule that may: 

(1) Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities; (2) Create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency; (3) Materially alter the 

budgetary impact of entitlements, 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) Raise novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in this Executive Order.’’ 

The economic, interagency, 

budgetary, legal, and policy 

implications of this regulatory action 

have been examined and OMB has 

determined to be an economically 

significant regulatory action because it 

will have an annual effect on the 

economy of $100 million or more. VA’s 

impact analysis can be found as a 

supporting document at http://

www.regulations.gov, usually within 48 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 979 

hours after the rulemaking document is 

published. Additionally, a copy of the 

rulemaking and its impact analysis are 

available on VA’s website at http://

www.va.gov/orpm by following the link 

for VA Regulations Published from FY 

2004 through FYTD. This rule is not 

subject to the requirements of E.O. 

13771 because this rule results in no 

more than de minimis costs. 

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 interim final rule will 

have no such effect on State, local, and 

tribal governments, or on the private 

sector. 

Catalog of Federal Domestic Assistance 

Numbers 

The Catalog of Federal Domestic 

Assistance numbers and titles for the 

programs affected by this document are 

64.005, Grants to States for Construction 

of State Home Facilities; 64.007, Blind 

Rehabilitation Centers; 64.008, Veterans 

Domiciliary Care; 64.009, Veterans 

Medical Care Benefits; 64.010, Veterans 

Nursing Home Care; 64.011, Veterans 

Dental Care; 64.012, Veterans 

Prescription Service; 64.013, Veterans 

Prosthetic Appliances; 64.014, Veterans 

State Domiciliary Care; 64.015, Veterans 

State Nursing Home Care; 64.016, 

Veterans State Hospital Care; 64.018, 

Sharing Specialized Medical Resources; 

64.019, Veterans Rehabilitation Alcohol 

and Drug Dependence; 64.022, Veterans 

Home Based Primary Care. 

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 

The Secretary of Veterans Affairs, or 

designee, approved this document 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. Gina 

S. Farrisee, Deputy Chief of Staff, 

Department of Veterans Affairs, 

approved this document on July 14, 

2017, for publication. 

Dated: January 4, 2018. 

Michael Shores, 

Director, Regulation Policy & Management, 

Office of the Secretary Department of 

Veterans Affairs. 

For the reasons set out in the 

preamble, VA amends 38 CFR part 17 as 

set forth below: 

PART 17—MEDICAL 

■ 1. The general authority citation for 

part 17 continues to read as follows: 

Authority: 38 U.S.C. 501, and as noted in 

specific sections. 

* * * * * 

■ 2. Amend § 17.1002 by revising 

paragraph (f) to read as follows: 

§ 17.1002 Substantive conditions for 

payment or reimbursement. 

* * * * * 

(f) The veteran does not have coverage 

under a health-plan contract that would 

fully extinguish the medical liability for 

the emergency treatment (this condition 

cannot be met if the veteran has 

coverage under a health-plan contract 

but payment is barred because of a 

failure by the veteran or the provider to 

comply with the provisions of that 

health-plan contract, e.g., failure to 

submit a bill or medical records within 

specified time limits, or failure to 

exhaust appeals of the denial of 

payment); 

* * * * * 

■ 3. Amend § 17.1003 by: 

■ a. Revising paragraphs (a), (c), and (d). 

■ b. Adding paragraph (e). 

The revisions and addition read as 

follows: 

§ 17.1003 Emergency transportation. 

* * * * * 

(a) Payment or reimbursement is 

authorized under 38 U.S.C. 1725 for 

emergency treatment provided at a nonVA facility, or payment or 

reimbursement would have been 

authorized under 38 U.S.C. 1725 for 

emergency treatment had: 

(1) The veteran’s personal liability for 

the emergency treatment not been fully 

extinguished by payment by a third 

party, including under a health-plan 

contract; or 

(2) Death had not occurred before 

emergency treatment could be provided; 

* * * * * 

(c) The veteran does not have 

coverage under a health-plan contract 

that would fully extinguish the medical 

liability for the emergency 

transportation (this condition is not met 

if the veteran has coverage under a 

health-plan contract but payment is 

barred because of a failure by the 

veteran or the provider to comply with 

the provisions of that health-plan 

contract); 

(d) If the condition for which the 

emergency transportation was furnished 

was caused by an accident or workrelated injury, the claimant has 

exhausted without success all claims 

and remedies reasonably available to the 

veteran or provider against a third party 

for payment of such transportation; and 

the veteran has no contractual or legal 

recourse against a third party that could 

reasonably be pursued for the purpose 

of fully extinguishing the veteran’s 

liability to the provider; and 

(e) If the veteran is not eligible for 

reimbursement for any emergency 

treatment expenses under 38 U.S.C. 

1728. 

* * * * * 

■ 4. Amend § 17.1005 by: 

■ a. Revising paragraph (a). 

■ b. Removing paragraph (e). 

■ c. Removing paragraph (f). 

The revisions read as follows: 

§ 17.1005 Payment limitations. 

(a) Payment or reimbursement for 

emergency treatment (including 

emergency transportation) under 38 

U.S.C. 1725 will be calculated as 

follows: 

(1) If an eligible veteran has personal 

liability to a provider of emergency 

treatment and no contractual or legal 

recourse against a third party, including 

under a health-plan contract, VA will 

pay the lesser of the amount for which 

the veteran is personally liable or 70 

percent of the applicable Medicare fee 

schedule amount for such treatment. 

(2) If an eligible veteran has personal 

liability to a provider of emergency 

treatment after payment by a third party, 

including under a health-plan contract, 

VA will pay: 

(i) The difference between the amount 

VA would have paid under paragraph 

(a)(1) of this section for the cost of the 

emergency treatment and the amount 

paid (or payable) by the third party, if 

that amount would be greater than zero, 

or; 

(ii) If applying paragraph (a)(2)(i) of 

this section would result in no payment 

by VA, the lesser of the veteran’s 

remaining personal liability after such 

third-party payment or 70 percent of the 

applicable Medicare fee schedule 

amount for such treatment. 


jstallworth on DSKBBY8HB2PROD with RULES
980 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Rules and Regulations 

(3) In the absence of a Medicare fee 

schedule rate for the emergency 

treatment, VA payment will be the 

lesser of the amount for which the 

veteran is personally liable or the 

amount calculated by the VA Fee 

Schedule in § 17.56 (a)(2)(i)(B). 

(4) Unless rejected and refunded by 

the provider within 30 days from the 

date of receipt, the provider will 

consider VA’s payment made under 

paragraphs (a)(1), (a)(2), or (a)(3) of this 

section as payment in full and 

extinguish the veteran’s liability to the 

provider. (Neither the absence of a 

contract or agreement between the 

Secretary and the provider nor any 

provision of a contract, agreement, or 

assignment to the contrary shall operate 

to modify, limit, or negate the 

requirement in the preceding sentence.) 

(5) VA will not reimburse a veteran 

under this section for any copayment, 

deductible, coinsurance, or similar 

payment that the veteran owes the third 

party or is obligated to pay under a 

health-plan contract. 

* * * * * 

[FR Doc. 2018–00232 Filed 1–8–18; 8:45 am] 

BILLING CODE 8320–01–P 

POSTAL SERVICE 

39 CFR Part 111 

eInduction Option, Seamless 

Acceptance Program, and Full-Service 

Automation Option, Verification 

Standards 

AGENCY: Postal ServiceTM. 

ACTION: Final rule. 

SUMMARY: The Postal Service is 

amending Mailing Standards of the 

United States Postal Service, Domestic 

Mail Manual (DMM®), to add 

verification standards for the eInduction 

Option, Seamless Acceptance Program, 

and Full-Service Automation Option. 

DATES: Effective: March 5, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Heather Dyer at (207) 482–7217, or 

Garry Rodriguez at (202) 268–7281. 

SUPPLEMENTARY INFORMATION: The Postal 

Service published a notice of proposed 

rulemaking on October 31, 2017, (82 FR 

50346–50348) to add the verification 

standards for the eInduction Option, 

Seamless Acceptance Program, and 

Full-Service Automation Option, which 

included a 30-day comment period. 

The Postal Service received 2 formal 

responses on the proposed rule, both of 

which included multiple comments. 

Comments From the First Responder 

Comment: When measuring 

compliance against the ‘‘active version 

of the Mail Direction File’’ during 

eInduction verifications, does a 30-day 

grace period apply? 

Response: Yes. The effective Mail 

Direction File (MDF) is distributed 

among the industry and PostalOne! 

applications at the beginning of each 

month to ensure valid container entry 

acceptance. Each effective MDF also 

observes a 30 day grace period allowing 

consumers to confirm mail prepared for 

the subsequent mailing period. For mail 

that is prepared in the current mailing 

period, the effective MDF will provide 

a source of valid entry facilities that will 

accept mail within the prepared mailing 

period. For mail that is prepared in the 

subsequent mailing period, the effective 

MDF’s grace period observations will 

provide a source of valid entry facilities 

that will accept mail with the prepared 

mailing period. At this time the USPS 

does not plan on changing any system 

processes with regards to logging errors 

for eInduction. If mailers believe that 

invalid errors are being logged they may 

be researched through the review 

process. 

Comment: The Postal Service should 

consider removing eInduction 

assessment on undocumented 

containers for mailers that do not 

participate in Seamless Acceptance. 

Response: At this time, the USPS does 

not plan on changing any system 

processes, including postage assessment 

for eInduction. If mailers believe that 

they have proof of payment for a 

container that received an 

undocumented error they may request a 

review. 

Comments From the Second Responder 

Comment: In reviewing the proposed 

DMM updates, there are several 

documents that are cross-referenced; 

these documents are not up to date. 

Response: The recommended changes 

to USPS Publication 685 have been 

noted and will be addressed through a 

separate forum. Changes to DMM 

Section 602.5.2 were published in the 

Address Quality Census Measurement 

and Assessment Process final rule of 

October 24, 2017 (82 FR 49123–49128), 

and take effect on January 21, 2018. The 

USPS is working to update ‘‘Publication 

804—Drop Shipment Procedures for 

Destination Entry’’ and ‘‘Guide for 

Streamlined Mail Acceptance for Letters 

and Flats Reporting.’’ 

Comment: We disagree with the 

method USPS has adopted to assess 

additional postage charged for logical 

mailers in the Full-Service Intelligent 

Mail program. Please explain why the 

method is not consistent across all 

Streamlined programs. 

Response: At this time the USPS does 

not plan on changing the Full-Service 

assessment process for logical mailings. 

If a mailer is able to provide 

documentation supporting a reduction 

in assessment due to evidence of 

physical mailings during the review 

process it will be taken into 

consideration. 

Comment: The Appeals Process 

outlined in the DMM Section 604.10.1.2 

does not appear to be consistent with 

the process outlined in Publication 685. 

Response: The Appeals Process for 

the eInduction, Full-Service, and 

Seamless Acceptance, programs are 

outlined in Section 6–3.3.3 PCSC 

Appeals of Publication 685. These 

programs are not covered by the 

timeline outlined in DMM Section 

604.10.1.2. Mailers should work with 

their assessment reviewer to discuss the 

findings of the review and what type of 

documentation will be needed to file an 

appeal. 

Comment: We have outlined the 

differences between the DMM and 

Publication 685; please utilize the same 

language for consistency. 

Response: For each difference noted, 

changes to the DMM sections were 

made when applicable and appropriate. 

The recommended changes to 

Publication 685 have been noted and 

will be addressed through a separate 

forum. 

In addition, the second responder had 

numerous comments that were 

determined to be beyond the scope of 

this final rule. The Postal Service will 

review and address these comments in 

a separate forum with the responder. 

The Postal Service is amending DMM 

sections 705.20, eInduction Option, 

705.22, Seamless Acceptance Program, 

and 705.23, Full-Service Automation 

Option, to add the applicable 

verification descriptions, error 

thresholds, and postage assessments, 

standards. These standards have been 

made available to the public via 

Publication 685, Publication for 

Streamlined Mail Acceptance for Letters 

and Flats, available at https://

postalpro.usps.com, which also 

contains additional information on the 

verification processes. 

List of Subjects in 39 CFR Part 111 

Administrative practice and 

procedure, Postal Service. 

The Postal Service adopts the 

following changes to Mailing Standards 

of the United States Postal Service, 

Domestic Mail Manual (DMM), 


jstallworth on DSKBBY8HB2PROD with RULES