01-23552. Veterans Benefits and Health Care Improvement Act of 2000

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document amends various Department of Veterans Affairs (VA) regulations concerning the definition of the term “active military, naval, or air service”; the payment limitation based on the value of certain incompetent veterans' estates; the plot allowance for certain individuals buried in State veterans' cemeteries; and the limitation on payment of pension for certain recipients of Medicaid-covered nursing home care. The amendments are necessary to reflect statutory changes contained in the Veterans Benefits and Health Care Improvement Act of 2000.

DATES:

Effective Date: November 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Bob White, Team Leader, Plain Language Regulations Project, Veterans Benefits Administration, 810 Vermont Avenue, NW., Washington, DC 20420, telephone [phone]. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

Section 301 of the Veterans Benefits and Health Care Improvement Act of 2000 (the Act), Pub. L. No. 106-419, amended 38 U.S.C. 101(24), which defines the term “active military, naval, or air service” to also include periods of inactive duty training during which individuals become disabled or die from an acute myocardial infarction, a cardiac arrest, or a cerebrovascular accident that occurred during such training. Section 301 also amended 38 U.S.C. 106(d) to provide that if a person was disabled or died as a result of any of these three diseases having occurred while the person was proceeding directly to or returning directly from a period of active duty for training or inactive duty training, such person would be deemed to have been on active duty for training or inactive duty training, as the case may be. We have amended paragraphs (a) and (e) of 38 CFR 3.6 to reflect the new statutory requirements.

Section 304 of the Act amended 38 U.S.C. 5503(b)(1), which sets forth a limitation on the payment of benefits to certain incompetent veterans who are hospitalized or institutionalized at government expense, who have neither spouse nor child, and who have estates with values that equal or exceed a specified amount. Under prior law, benefits were discontinued when the value of such veterans' estates equaled or exceeded $1,500; payments could not be resumed until the value of those estates had been reduced to $500. Under section 304 of the Act, effective November 1, 2000, benefits may not be discontinued until the estate of an affected incompetent veteran equals or exceeds an amount equal to five times the rate of compensation payable under 38 U.S.C. 1114(j) (the rate payable to a totally disabled veteran with no dependents). Under the new provision, benefit payments discontinued because of the estate limitation may not be resumed until the veteran's estate has been reduced to one-half the amount of the new estate limitation.

Because the rate of compensation payable under 38 U.S.C. 1114(j) is generally increased on an annual basis to keep pace with inflation, VA would have to make annual regulatory amendments to ten different regulations if we were to simply insert new dollar amounts where the regulations currently specify $1,500 and $500. This would be extremely burdensome on VA and would invariably result in regulations that specify incorrect dollar amounts until amendments to reflect increases in those amounts made their way through the regulatory process.

To prevent this result, VA has amended 38 CFR 3.557(b) to describe the method required by section 304 of the Act for calculating the dollar values for the estates of incompetent veterans which will trigger discontinuance or resumption of benefit payments. Each time there is an increase in the rate of compensation payable under 38 U.S.C. 1114(j), VA will calculate the new dollar values for discontinuance and resumption and will publish those dollar values in the Notices section of the Federal Register. The new values will be effective on the same day that the increase in the section 1114(j) rate becomes effective. In this way VA will be spared the burden of annually amending numerous regulations, and the public will have access to both the calculation method and the actual dollar value calculated using that method.

In § 3.557(b) we are also deleting the introductory phrase “Effective December 1, 1959,”. That phrase has no relevance to current claims processing.

In addition to § 3.557 there are several other regulations referring to the estate values that trigger discontinuance or resumption of benefits for certain incompetent veterans, either in their titles, text or cross-references. We have amended these regulations to remove references to specific dollar amounts. Where amounts appeared in the regulatory text, we have replaced them with references to the amounts calculated under § 3.557(b). Where specific amounts appeared in titles or cross-references we have amended them to eliminate reference to a dollar amount. The affected regulations are §§ 3.353, 3.452, 3.501, 3.558, 3.559, 3.1007, 13.70, 13.71 and 13.108.

Section 333 of the Act amended 38 U.S.C. 2303(b)(1), which governs eligibility for the plot or interment allowance when a veteran is buried in a cemetery, or a section of a cemetery, that is owned by a State or by an agency or a political subdivision of a State. The allowance was previously payable only if the cemetery, or section of the cemetery, was used solely for the interment of persons who were eligible for burial in a national cemetery. Section 333 expanded eligibility to include cemeteries, or sections of cemeteries, that are also used for the interment of persons who were members of a reserve component of the Armed Forces not otherwise eligible for burial in a national cemetery or who were former members of such a reserve component not otherwise eligible for burial in a national cemetery who were discharged or released from service under conditions other than dishonorable. We have amended § 3.1604(d)(1)(ii) to reflect these expanded eligibility criteria. These criteria apply only to the burial of persons dying on or after November 1, 2000.

Section 402(e) of the Act extended, until September 30, 2008, the expiration date for 38 U.S.C. 5503(f), which governs the amount of pension payable to certain veterans and surviving spouses receiving Medicaid-covered nursing home care. That provision was due to expire on September 30, 2002. We have amended § 3.551(i) to reflect the statutory change.

This final rule reflects statutory requirements. Accordingly, there is a basis for dispensing with the prior notice and comment and delayed effective date provisions of 5 U.S.C. 552 and 553.

Paperwork Reduction Act

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Executive Order 12866

This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

Regulatory Flexibility Act

Because no notice of proposed rulemaking was required in connection with the adoption of this final rule, no regulatory flexibility analysis is required under the Regulatory Flexibility Act (5 U.S.C. 601-612). Even so, the Secretary hereby certifies that this 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. This final rule will not directly affect any small entities. Only VA beneficiaries are directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analyses requirement of sections 603 and 604.

(The Catalog of Federal Domestic Assistance program numbers are 64.101, 64.104, 64.105, 64.109, 64.110, and 64.127.)

List of Subjects

38 CFR Part 3

• Administrative practice and procedure
• Claims
• Disability benefits
• Health care
• Pensions
• Veterans
• Vietnam

38 CFR Part 13

• Surety bonds
• Trusts and trustees, and Veterans

Approved: May 21, 2001.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR parts 3 and 13 are amended as follows:

PART 3—ADJUDICATION

Subpart A—Pension, Compensation, and Dependency and Indemnity Compensation

1. The authority citation for part 3, subpart A continues to read as follows:

Authority: 38 U.S.C. 501(a), unless otherwise noted.

2. In § 3.6, paragraphs (a) and (e) are revised to read as follows:

§ 3.6

Duty periods.

(a) Active military, naval, and air service. This includes active duty, any period of active duty for training during which the individual concerned was disabled or died from a disease or injury incurred or aggravated in line of duty, and any period of inactive duty training during which the individual concerned was disabled or died from an injury incurred or aggravated in line of duty or from a covered disease which occurred during such training. For purposes of this section, the term “covered disease” is limited to—

(1) An acute myocardial infarction,

(2) A cardiac arrest, or

(3) A cerebrovascular accident.

(Authority: 38 U.S.C. 101(24))

* * * * *

(e) Travel status—training duty (disability or death from injury or covered disease). Any individual:

(1) Who, when authorized or required by competent authority, assumes an obligation to perform active duty for training or inactive duty training; and

(2) Who is disabled or dies from an injury or covered disease incurred while proceeding directly to or returning directly from such active duty for training or inactive duty training shall be deemed to have been on active duty for training or inactive duty training, as the case may be. The Department of Veterans Affairs will determine whether such individual was so authorized or required to perform such duty, and whether the individual was disabled or died from an injury or covered disease so incurred. In making such determinations, there shall be taken into consideration the hour on which the individual began to proceed or return; the hour on which the individual was scheduled to arrive for, or on which the individual ceased to perform, such duty; the method of travel performed; the itinerary; the manner in which the travel was performed; and the immediate cause of disability or death. Whenever any claim is filed alleging that the claimant is entitled to benefits by reason of this paragraph, the burden of proof shall be on the claimant.

(Authority: 38 U.S.C. 106(d))

§ 3.353

[Amended]

3. In § 3.353, paragraph (b)(1) is amended by removing “in excess of $1,500 (§ 3.557(b))” and adding, in its place, “that equals or exceeds the amount specified in § 3.557(b)(4)”.

4. The “CROSS REFERENCES” section immediately following § 3.452 is revised to read as follows:

§ 3.452

Veterans benefits apportionable.

* * * * *

Cross References: Institutional awards. See § 3.852. Disappearance of veteran. See § 3.656. Reduction because of hospitalization. See § 3.551. Penal institutions. See § 3.666. Incompetents; estate equals or exceeds statutory limit and institutionalized. See § 3.557.

§ 3.501

[Amended]

5. In § 3.501, paragraph (i)(7) is amended by removing “$1,500” each time it appears and adding, in its place, “the amount specified in § 3.557(b)(4)”.

§ 3.551

[Amended]

6. In § 3.551, paragraph (i) is amended by removing “2002” and adding, in its place, “2008”.

7. Section 3.557 is amended by:

A. Revising the section heading and paragraph (b).

B. In paragraph (d) removing “$1,500” and adding, in its place, “the amount specified in paragraph (b)(4) of this section”.

C. Revising The “CROSS REFERENCES” section immediately following § 3.557.

The revisions read as follows:

§ 3.557

Incompetents; estate equals or exceeds statutory limit and institutionalized.

* * * * *

(b) Where a veteran:

(1) Is rated incompetent by VA,

(2) Has neither spouse nor child,

(3) Is hospitalized, institutionalized or domiciled by the United States or any political subdivision, with or without charge, and

(4) Effective November 1, 2000, has an estate, derived from any source, which equals or exceeds an amount which is five times the rate of compensation specified in 38 U.S.C. 1114(j), further payments of pension, compensation or emergency officer's retirement pay will not be made, except as provided in paragraph (d) of this section, until the estate is reduced to one-half that amount. Whenever there is an increase in the rate of compensation payable under 38 U.S.C. 1114(j) for a veteran with a service-connected disability rated as total, effective on the date such increase becomes effective, the amount specified in paragraph (b)(4) shall be an amount equal to five times such increased rate of compensation. The dollar value of that increased amount, as well as the dollar value of one-half that amount, will be published in the Notices section of the Federal Register. If the veteran is hospitalized for observation and examination, the date treatment began is considered the date of admission.

* * * * *

Cross References: Veterans disability pension. See § 3.454(c). Reductions and discontinuances; general. See § 3.500. Reductions and discontinuances; veterans. See § 3.501. Amounts withheld or not paid incompetent veteran. See § 3.1007. Estate equals or exceeds statutory limit. See § 13.108 of this chapter. Determination of value of estate. See § 13.109 of this chapter.

8. In § 3.558, the section heading and paragraph (a) are revised to read as follows:

§ 3.558

Resumption and payment of withheld benefits; incompetents with estates that equaled or exceeded statutory limit.

(a) Where payment has been discontinued by reason of § 3.557(b), it will not be resumed during hospitalization except as provided in § 3.557(e) or paragraph (b) of this section until proper notice has been received showing the estate is reduced to one-half the amount specified in § 3.557(b)(4) or less. Payments will not be made for any period prior to the date on which the estate was reduced to one-half the amount specified in § 3.557(b)(4) or less.

(Authority: 38 U.S.C. 5503)

* * * * *

9. Section 3.559 is amended by:

A. Revising the section heading.

B. In paragraph (a), removing “$500” and adding, in its place, “one-half the amount specified in § 3.557(b)(4)”.

C. In paragraph (b), removing “is then $1,500 or more” and adding, in its place, “equals or exceeds the amount specified in § 3.557(b)(4)”.

The revision reads as follows:

§ 3.559

Resumption—where the estate equals or exceeds the statutory limit and includes chose in action.

* * * * *

§ 3.1007

[Amended]

10. Section 3.1007 is amended by removing “$1,500” and adding, in its place, “the amount specified in § 3.557(b)(4)”.

Subpart B—Burial Benefits

11. The authority citation for part 3, subpart B continues to read as follows:

Authority: 105 Stat. 386, 38 U.S.C. 501(a), 2302-2308, unless otherwise noted.

12. In § 3.1604, paragraph (d)(1)(ii) is revised to read as follows:

§ 3.1604

Payments from non-Department of Veterans Affairs sources.

* * * * *

(d) * * *

(1) * * *

(ii) The deceased veteran is buried in a cemetery or a section thereof which is used solely for the interment of persons who are eligible for burial in a national cemetery or who, with respect to persons dying on or after November 1, 2000, were at the time of death members of a reserve component of the Armed Forces not otherwise eligible for such burial or were former members of such a reserve component not otherwise eligible for such burial who were discharged or released from service under conditions other than dishonorable.

* * * * *

PART 13—VETERANS BENEFITS ADMINISTRATION, FIDUCIARY ACTIVITIES

13. The authority citation for part 13 continues to read as follows:

Authority: 72 Stat. 1114, 1232, as amended, 1237; 38 U.S.C. 501, 5502, 5503, 5711, unless otherwise noted.

§ 13.70

[Amended]

14. In § 13.70, paragraph (a)(2) is amended by removing “$1,500” and adding, in its place, “the amount specified in § 3.557(b)(4) of this chapter”.

§ 13.71

[Amended]

15. In § 13.71, paragraph (b) is amended by removing “$1,500” and adding, in its place, “the amount specified in § 3.557(b)(4) of this chapter”.

16. Section 13.108 is amended by:

A. Revising the section heading.

B. In paragraph (a), removing “$1,500” and adding, in its place, “the amount specified in § 3.557(b)(4) of this chapter”, and by removing “$500” and adding, in its place, “one-half the amount specified in § 3.557(b)(4) of this chapter”.

C. In paragraph (c), removing “exceeds $1,500” and adding, in its place, “equals or exceeds the amount specified in § 3.557(b)(4) of this chapter”.

The revision reads as follows:

§ 13.108

Estate equals or exceeds statutory limit; 38 U.S.C. 5503(b)(1).

* * * * *