VA Secretary David Shulkin, MD, is enacting rule changes that could impact Individual Unemployability claims for veterans who are severely disabled and unable to hold traditional employment after previously promising he would not do it.
Despite many promises, the Department of Veterans Affairs, and now Secretary Shulkin, looks to be eyeing cuts to Individual Unemployability benefits through Individual Disabilities regulations after scheming behind the scenes for four years to reduce benefits for severely disabled veterans at the direction of the Obama Administration.
According to VA in the Friday Federal Register publication:
VA had already proposed to clarify section 3.321(b)(1) as part of a regulation rewrite project in 2013; however, a subsequent decision by the Federal Circuit held that section 3.321(b)(1) required VA to consider the combined effects of two or more service-connected disabilities when determining extra-schedular evaluations. Johnson v. McDonald, 762 F.3d 1362, 1365-66 (Fed. Cir. 2014), rev’g 26 Vet. App. 237 (2013). This decision conflicts with VA’s longstanding interpretation of section 3.321(b)(1), and VA therefore decided to amend the regulation in a separate rulemaking to clarify its interpretation of the regulation.
Now, under the Trump Administration, the cuts by way of regulatory change as implemented, may make it much more difficult to qualify for Individual Unemployability benefits for some severely disabled veterans. Most will be unaffected.
Based on concerns from insiders, this is likely the first in a serious of a few steps Shulkin’s VA will take to cut veterans benefits including Individual Unemployability benefits.
Let me explain the behind the scenes and why I think veterans seeking Individual Unemployability benefits should be concerned.
Some Anonymous Insider Feedback
Many insiders were unaware this rule was published at all until they read about it here, on DisabledVeterans.org.
How is that for transparency? Traditional veteran organizations including The Big 6 did not know it was coming out, or if they did, they told no one. Reporters for the main stream media did not address it after a few days, either. The rule’s publication lacked the normal coordination and transparency of practically every other publication in the past, according to my contacts inside VA.
On the surface, the change also appears innocuous in that it facially addresses a change to 38 CFR 3.321(b) by abrogating the Federal Circuit’s opinion in Johnson – more on this in a second – but something is fishy.
Again, insiders under a condition of anonymity, indicate this regulatory change did not follow traditional policymaking, coordination, and consultation with those impacted. Few inside VA knew it was promulgated within Veterans Benefits Administration under Tom Murphy’s team that includes Rob Reynolds, Jamie Manaker, and Beth McCoy. This is an example of legacy Obama Team currently leading VBA prior to a political nomination of an Under Secretary by President Donald Trump.
Let’s see what other last decision Under Secretary Tom Murphy and his band of misfits will try to push through prior to being pushed out of power once VA names a nominee for Tom’s seat.
While some may believe this move is only a small move that could be used against veterans fighting for Total Disability Individual Unemployability (TDIU) benefits who need an extra-schedular rating, it is more likely a part of a broader initiative to attack these move vulnerable and most disabled veterans under the “wolf in sheep’s skin” approach.
Historically, it is highly irregular for a rule to be processed to only address one case. It calls into question how staff resources were being allocated without transparency. The second and third order consequences may actually be the driver this rule change to see how the public responds before gunning at TDIU directly.
However, another insider speculates the rule may have zero material effect and that few awards were based on the Johnson framework but instead caught up in appeals due to agency confusion since 2013. So, veterans seeking TDIU should not worry…
Let’s hope this insider is right.
But some concerns jump out right away about that line of reasoning including that many veterans benefit from extra-schedular consideration when seeking benefits.
First, Johnson was decided in 2013 during a regulatory rewrite as part of a broader scheme to reform VA regulations. Anytime you see anything about reform, you know the agency is looking to cut benefits. Now, the Johnson decision supposedly resulted in a fair amount of confusion and appeals because the regulation in question, 38 CFR 3.321(b) according to VA, was no longer being interpreted consistently with VA’s interpretation.
Second, VA is caught in an appeals backlog where the Board of Veterans Appeals is taking 3-5 years to process an appeal. That pushes the date of pending matters back to appeals filed 2013-2015. These pending matters will be mooted if not decided prior to January 8, 2018. How is that for fair?
Third, this rulemaking was promulgated without following standard coordination and transparency procedures. It also appears to be part of a broader initiative to restrict access to extra-schedular evaluations.
So, is this an insignificant change? If it is insignificant, why allocate hundreds of manhours to promulgate the rule change to begin with? Further, why does VA want to moot all pending claims under the existing interpretation of Johnson?
Or, did Johnson throw a monkey wrench in a series of regulatory reforms aimed at nixing benefits like Individual Unemployability, just like Shulkin as talked about since March 2017 and precisely what VA envisioned for the past 4 years?
VA Policies Span Decades And Presidents
This regulatory change is evidence that agency policy is driven by forces that span further and wider than eight years of any presidency. The Congressional Budget Office has been after Individual Unemployability cuts for a long time and their bosses are winning.
It is also further evidence that my insider source this spring was correct about VA initiating a sequence of benefits cuts while veteran organizations sit on the sideline without effectively obstructing the cuts as part of a backroom deal.
Who The Change May Affect
The severely disabled veterans who need to be nervous are those seeking Individual Unemployability benefits without at least one 60% rating who are also relying on an extra-schedular rating to get TDIU could be impacted. Other veterans relying on extra-schedular for the same when factoring in multiple ratings may also be affected.
Those with pending claims hung up in the appeals process will lose out if the pending matter is not resolved prior to January 8, 2018.
VA will screw severely disabled veterans of backpay and monthly compensation payments worth hundreds of millions if not billions in money. Many of these veterans will be forced to seeking help from already stretched local or state resources, instead.
Now, not all veterans seeking TDIU should be impacted by this rule change. It affects veterans relying on extra-schedular.
Nonetheless, VSOs are wary the rule change is part of a broader initiative to reverse benefits for severely disabled veterans.
Individual Unemployability Cuts To Benefits
For the past ten months, Shulkin floated a variety of cut ideas to the public freaking veterans out and confusing stakeholders about the agency’s intention.
It seemed like each month a new scheme would be floated to pay for one area of benefits by cutting benefits for at least some veterans who otherwise qualify for Individual Unemployability benefits. After enough of an outcry, Shulkin would issue a promise he would not cut Individual Unemployability benefits.
It looks like that this was all an act and veteran organizations went along for the ride.
If you carefully read the Federal Registry publication this past Friday, you will see VA intended to implement the cuts in 2013, but a lawsuit forced the agency to stop its scheme. In April 2016, VA initiated notice and comment to circumvent a decision from the US Court of Appeals for the Federal Circuit.
After a lot of pushback, Shulkin promised he would not reduce the benefits. However, those benefits proved hollow, and also support a report from an insider who told me VA curried a deal with major VSOs behind closed doors to stand by while the agency cuts benefits to numerous programs, apparently including Individual Unemployability.
On Friday, VA quietly published its final rulemaking that will severely impact veterans with pending Individual Unemployability claims or veterans relying on multiple ratings to qualify for extra-schedular consideration. (And by quite, I mean, as of the time of this writing, there was no other member of the news media writing about it other than me.)
Now, VA will only consider the impact of one disability when considering whether it will grant the special review.
For years, severely disabled veterans too disabled to work could avail to an extra-schedular rating when their various disabilities did not add up to 100% despite having the affect of being fully disabled. Veterans could rely on combined ratings to qualify. Now, a disabled veteran must have one singular 60% disability rating to qualify for consideration.
The move will effectively wipe out entitlement to benefits for many veterans fighting appeals who were lowballed on their initial disability severity. It will also wipe out eligibility for veterans caught in the appeals process who would previously have qualified but for VA being deleterious in adjudicating claims.
VA Wins By Keeping Its Backlog Huge
Apparently, by VA maintaining and then growing its backlog, VA will benefit by way of reducing overall compensation payouts for severely disabled veterans.
One thing I wonder is how is it so many millions of veterans put their faith in veteran organizations, and even support their leaders earning half a million a year from donors, and still these organizations are unable to stop the agency from preying on severely disabled veterans to save a buck. Well, maybe a few billion bucks.
But does VA really care about a few billion bucks?
VA has no problem paying billions for IT fixes that never work to their crony buddies. The only problem they have is when poor disabled veterans get the money to support themselves or their families.
DAV Said Rule Change Will Impact Some TDIU Claims
According to DAV’s comment during the notice and comment period:
DAV believes that this proposed amendment will have a negative effect on veterans seeking increased evaluations with unique disability pictures. Subsequent to the Federal Circuit decision in Johnson, the Board of Veterans Appeals has remanded hundreds of Veterans’ decision to contemplate the “collective impact” of the Veteran’s service-connected disabilities in assessing the disability picture. Those decisions remanded by the Board do not involve 38 C.F.R. § 4.16(b).
38 C.F.R. § 4.16(b) provides, “It is the established policy of the Department of Veterans Affairs that all veterans who are unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities shall be rated totally disabled. Therefore, rating boards should submit to the Director, Compensation Service, for extra-schedular consideration all cases of veterans who are unemployable by reason of service-connected disabilities, but who fail to meet the percentage standards set forth in paragraph (a) of this section. The rating board will include a full statement as to the veteran’s service-connected disabilities, employment history, educational and vocational attainment and all other factors having a bearing on the issue.”
The proposed amendment states that 38 C.F.R. § 4.16(b) is written to consider those cases with unique disability pictures. However, 38 C.F.R. § 4.16(b) only applies to extraschedular consideration for individual unemployability. It does not take into account the negative effect this change will have on those veterans’ disability pictures that would not be qualified or considered for individual unemployability. Under the current regulation as held by Johnson, the extra-schedular consideration will apply to the “collective impact” all serviceconnected disabilities. This proposed change will negate justice for those veterans who would not be considered for individual unemployability either on a schedular or extra-schedular basis. The proposed amendment falsely assumes that 38 C.F.R. § 4.16(b) is the catch-all for the collective impact of the entire disability picture. Thus, this proposed amendment will not afford justice and continue to live up to the ex parte nature of the DVA benefits system.
VA Says DAV’s Concern Not Relevant
In the publication, VA disputed the above concern:
One commenter stated that VA’s proposed regulation does not take into account veterans who do not qualify for consideration of entitlement to a rating of total disability based upon individual unemployability (TDIU) under 38 CFR 4.16(b). The commenter states that a veteran may be forced to drop out of the workforce and apply for TDIU as a result of extra-schedular evaluations based upon a single disability.
Section 3.321(b)(1) addresses a different issue than section 4.16(a) and (b) were written to address. Section 3.321(b)(1) provides an exception to reliance upon a particular rating contained in the rating schedule where the schedule is determined to be inadequate in a particular case and examines the rating issue from the perspective of the schedule in rating a veteran’s disability and provides adjustments to the schedule based on the veteran’s disability. Section 4.16, on the other hand, looks at the situation from the perspective of the unemployability of an individual veteran. Under section 4.16(a) and (b), the deciding official looks at the overall impairment of a veteran to determine whether the veteran is employable regardless of the particular disability rating or combination of disability ratings awarded. Thus, section 3.321(b)(1) focuses on the schedule’s failure to address the effect of a veteran’s particular disability and the latter focuses upon the veteran’s overall employability. Amending section 3.321(b)(1) based on this comment would also render section 4.16 superfluous because section 3.321(b)(1) could be the basis for a 100 percent extra-schedular rating which would be equivalent to a TDIU rating.
The matter is still unfolding, although some insiders indicate things do not look good. It is believed this move is one in a series of moves to go after TDIU benefits and other benefits. The publication last Friday was not widely known with no press, which is unusual. And VA insiders believe the move is part of a multi-faceted approach over many years to eroded veterans benefits the agency does not like awarding.