01-19476. Board of Veterans' Appeals: Obtaining Evidence and Curing Procedural Defects Without Remanding

AGENCY:

Department of Veterans Affairs.

ACTION:

Proposed rule.

SUMMARY:

The Department of Veterans Affairs proposes to amend the Appeals Regulations and Rules of Practice of the Board of Veterans' Appeals (Board) to permit the Board to obtain evidence, clarify the evidence, cure a procedural defect, or perform any other action essential for a proper appellate decision in any appeal properly before it without having to remand the appeal to the agency of original jurisdiction. We also propose to allow the Board to consider additional evidence without having to refer the evidence to the agency of original jurisdiction for initial consideration and without having to obtain the appellant's waiver. By reducing the number of appeals remanded, VA intends to shorten appeal processing time and to reduce the backlog of claims awaiting decision.

DATES:

Comments must be received on or before September 5, 2001.

ADDRESSES:

Mail or hand-deliver written comments to: Director, Office of Regulations Management (02D), Department of Veterans Affairs, 810 Vermont Ave., NW., Room 1154, Washington, DC 20420. Fax comments to: [phone]. E-mail comments to: [e-mail]. Comments should indicate that they are submitted in response to “RIN 2900-AK91.” All comments received will be available for public inspection in the Office Regulations Management, Room 1158, between 8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT:

Steven L. Keller, Acting Vice Chairman, Board of Veterans' Appeals ([phone]), or Michael J. Timinski, Attorney, Office of General Counsel ([phone], Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420.

SUPPLEMENTARY INFORMATION:

The Board of Veterans' Appeals (Board) is the component of the Department of Veterans Affairs (VA) in Washington, DC, that decides appeals from denials of claims for veterans' benefits. An agency of original jurisdiction (AOJ), typically one of VA's 58 regional offices, makes the initial decision on a claim and subsequent decisions if VA receives additional evidence. A claimant who is dissatisfied with an AOJ's decision may appeal to the Board. After a claimant perfects an appeal to the Board, the AOJ certifies the appeal to the Board and transfers the record to the Board, so that the Board can decide the appeal.

While considering an appeal, a Board member or panel sometimes discovers that more evidence is needed, that the current evidence must be clarified, or that a procedural defect must be cured for the appeal to be properly decided. Current regulations generally require the Board to remand such a case to the AOJ to perform the needed action. Specifically, current 38 CFR 19.9(a) requires the Board member or panel to remand the case to the AOJ “[i]f further evidence or clarification of the evidence or correction of a procedural defect is essential for a proper appellate decision.” However, § 19.9(a) does not require a remand to clarify procedural matters before the Board, such as the appellant's choice of representative before the Board, the issues on appeal, and requests for hearings before the Board. In addition, the Board is currently permitted to obtain expert medical opinions in appropriate cases. See 38 U.S.C. 7109 (independent medical opinions); 38 CFR 20.901(a) (opinions from the Veterans Health Administration); 38 CFR 20.901(b) (opinions from the Armed Forces Institute of Pathology).

When the Board remands a case for further development, the AOJ must undertake the action specified by the Board. 38 CFR 19.38. After completing that development, the AOJ must make another decision on the claim. Id. Unless the AOJ grants all the benefits sought or the appeal is withdrawn, the AOJ must issue a supplemental statement of the case, allow 60 days for response, and return the case to the Board for further appellate processing. 38 CFR 19.38, 20.302(c).

There is another situation for which current regulations require a remand from the Board to the AOJ. In a number of cases, the appellant submits additional evidence while an appeal is pending before the Board. Under current regulations, the Board must allow the AOJ to consider the evidence first. Specifically, 38 CFR 20.1304(c) provides that, “[a]ny pertinent evidence * * * accepted by the Board * * * must be referred to the [AOJ] for review and preparation of a Supplemental Statement of the Case unless this procedural right is waived by the appellant” or the Board can grant the benefits sought on appeal to which the evidence relates. If the AOJ issues a supplemental statement of the case, it must also provide 60 days for response and return the case to the Board unless the appeal is withdrawn or resolved. 38 CFR 19.38, 20.302(c). According to statistics maintained by VA's Compensation and Pension Service, as of March 31, 2001, the average case remains in remand status for 454 days, about 11/4 years.

VA proposes to change these procedures in two ways. First, we propose to amend 38 CFR 19.9 to permit the Board itself to obtain further evidence, clarify the evidence, correct any procedural defect, or perform any other action that is essential for a proper appellate decision, without having to remand the case to the AOJ. We intend the provision to encompass a broad range of actions, including, for example, consideration of an appeal under a change in law or a change in interpretation of law that has occurred while the claim or appeal has been pending and application of laws, interpretations, and precedents already existing but not applied by the AOJ. Under these amendments, the Board would be permitted to consider the claim without having to remand it to the AOJ for consideration of the matter in the first instance. The Board would still be permitted to remand a case needing further development, but would not be required to remand. As discussed further below, we propose procedures to assure that the appellant will be notified of what evidence is obtained or what law is being considered and have an opportunity to submit argument or additional evidence in rebuttal. See generally Sutton v. Brown, 9 Vet. App. 553, 564 (1996) (if Board intends to rely on new evidence, appellant has right to submit argument, comment, or additional evidence).

Second, we propose to amend 38 CFR 20.1304 to allow the Board to consider evidence that it obtains or that is submitted to it, without having to refer the evidence to the AOJ for initial consideration in the absence of the appellant's waiver. Although we propose no change in the current deadline for submitting evidence to the Board, we do propose an exception to the requirement in current § 20.1304(b) that good cause be shown for the Board to accept evidence after the deadline. Good cause would not be needed to submit evidence in response to notice provided by the Board that it has obtained additional evidence or that it intends to consider law not already considered by the AOJ.

We propose these changes to reduce the number of cases remanded by the Board to AOJs. A reduction in the number of cases remanded could have two effects beneficial to claimants.

First, it could shorten the time it takes VA to resolve an appeal. The Board would not have to transfer a case to an AOJ for initial consideration of evidence, to wait for AOJ processing to be completed, and to wait for the case to be transferred back to the Board. No longer would the Board have to delay appellate consideration while determining whether an appellant wants to waive initial consideration by the AOJ. Furthermore, in cases needing additional development, the time currently spent in transferring the case to the AOJ and back to the Board, as well as time spent by employees refamiliarizing themselves with the case following transfer, would be saved if the Board itself performed the actions needed to develop the case.

Second, a reduction in the number of cases remanded to AOJs could eventually shorten claim processing time by helping VA to reduce its current backlog of claims. Currently, approximately 500,000 claims are awaiting decision in VA's regional offices. The recent enactment of the Veterans Claims Assistance Act of 2000, Public Law 106-475, 114 Stat. 2096, has exacerbated the backlog. Besides requiring readjudication of claims not final on the date of enactment, the act provides for the readjudication of certain claims that had already been finally decided. Public Law 106-475, sec. 7, 114 Stat. at 2099. Moreover, due to the potential applicability of the act, the United States Court of Appeals for Veterans Claims has been remanding cases at an unprecedented rate. That court remanded 1,412 cases in fiscal year 1999. In contrast, it has already remanded some 1,223 cases during the first half of fiscal year 2001. The Board, in turn, has remanded many more cases to regional offices: 4,848 cases during the first half of fiscal year 2000, compared to 10,796 cases during the first half of fiscal year 2001.

Having the Board develop cases itself rather than remand them will help relieve the immense workload pending at regional offices, giving them a chance to reduce the backlog. On average, the Board remands about 15,000 cases per year to the regional offices. Thus, this proposed rule could potentially prevent the backlog from increasing by 15,000 cases each year. Once the backlog is reduced to a manageable size, case processing time will begin to fall.

Under the proposed changes, some appellants will have at least one fewer chance for a decision by the AOJ. Because the Board would not have to remand for development or AOJ consideration of additional evidence, in some cases these changes would eliminate an additional decision made by the AOJ. However, we believe this change would not be disadvantageous for claimants. The Board is fully capable of recognizing when the evidence establishes entitlement to a benefit and granting the benefit itself. Furthermore, ultimately all claimants will benefit from the shortened appeal processing time and reduced claim backlog.

We are also proposing three additional changes to current regulations to accommodate these new procedures. First, we propose to amend 38 CFR 19.31, which currently requires that a supplemental statement of the case be furnished to an appellant if additional pertinent evidence is received after a statement of the case or the most recent supplemental statement of the case has been issued. Under the proposal, a new supplemental statement of the case will be required only if such evidence is received by the AOJ before it has certified the appeal and transferred the appellate record to the Board. A supplemental statement of the case will not be required if the Board obtains additional pertinent evidence on its own or if additional evidence is received by the AOJ after the appeal has been certified and transferred to the Board. We also propose to amend § 19.31 to clarify that a supplemental statement of the case is not to be used to announce the AOJ's decision on an issue not previously addressed in a statement of the case or to respond to a notice of disagreement on a newly appealed issue that was not addressed in the statement of the case. We propose this change to help eliminate confusion on the part of appellants as to whether they must respond to a supplemental statement of the case.

Second, we want to ensure that an appellant will receive adequate notice of new evidence obtained by the Board and adequate notice of law that the Board intends to consider but that has not already been considered by the AOJ. We also want an appellant to be able to respond to the additional evidence or law. To that end, we also propose to amend 38 CFR 20.903 to require the Board, if it either obtains pertinent evidence on its own or if it intends to consider law not already considered by the AOJ, to notify the appellant (and the appellant's representative) of the evidence or law and allow a 60-day period for response. This procedure would be similar to that in current § 20.903, which applies when the Board obtains a legal or medical opinion in a case.

Finally, we propose to amend 38 CFR 20.1304 to provide an exception to the current requirement in § 20.1304(b) that good cause be shown for the Board to accept additional evidence more than 90 days after notice that the appeal has been certified and the record transferred to the Board. A motion demonstrating good cause would not be necessary to submit additional evidence in response to notice from the Board that it has obtained pertinent evidence pursuant to § 19.9(b) or § 19.37(b) or that it intends to rely on law not already considered by the AOJ. This reflects fundamental fairness and is consistent with court precedent. See Sutton v. Brown, above.

Proposed Effective Date

We propose to have these amendments apply to appeals for which the notice of disagreement was filed on or after the effective date of these amendments and to appeals pending, whether at the Board of Veterans' Appeals, the United States Court of Appeals for Veterans Claims, or the United States Court of Appeals for the Federal Circuit, on the effective date of these amendments.

Comment Period

Section 6(a)(1) of Executive Order 12866 indicates that, in most cases, a comment period for proposed regulations should be “not less than 60 days.” Nevertheless, for this rulemaking we have provided a comment period of 30 days, for the following reasons. This rulemaking primarily concerns rules of agency procedure or practice, which are not subject to the Administrative Procedure Act's general requirement of publication for notice and comment. Furthermore, prompt issuance of the proposed amendments is essential to one of VA's most important initiatives, improvement of the timeliness and efficiency of claims processing. The backlog of benefit claims awaiting adjudication has reached a critical stage and has been exacerbated by recent remands to ensure compliance with the Veterans Claims Assistance Act of 2000. Immediate action is needed to address this problem and ensure that needy veterans timely receive the benefits to which they are entitled. It is important for the final rule to be published expeditiously in order to begin to realize the benefits of the changes proposed.

Paperwork Reduction Act

All collections under the Paperwork Reduction Act (44 U.S.C. 3501-3520) referenced in this document have existing Office of Management and Budget approval. No changes are made in this document to those collections of information other than to the component in VA that collects this information. Under this proposal, the Board would collect some information that currently is collected by VA regional offices.

Executive Order 12866

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

Regulatory Flexibility Act

The Secretary hereby certifies that this regulatory amendment 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. This rule affects only individuals. Therefore, pursuant to 5 U.S.C. 605(b), this regulatory amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

List of Subjects in 38 CFR Parts 19 and 20

• Administrative practice and procedure
• Claims
• Veterans

Approved: May 10, 2001.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons stated in the preamble, VA proposes to amend 38 CFR parts 19 and 20 as follows:

PART 19—BOARD OF VETERANS' APPEALS: APPEALS REGULATIONS

1. The authority citation for part 19 continues to read as follows:

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

Subpart A—Operation of the Board of Veterans' Appeals

2. Section 19.9 is revised to read as follows:

§ 19.9

Further development.

(a) General. If further evidence, clarification of the evidence, correction of a procedural defect, or any other action is essential for a proper appellate decision, a Board Member or panel of Members may:

(1) Remand the case to the agency of original jurisdiction, specifying the action to be undertaken; or

(2) Direct Board personnel to undertake the action essential for a proper appellate decision.

(b) Examples. A remand to the agency of original jurisdiction is not necessary:

(1) To clarify a procedural matter before the Board, including the appellant's choice of representative before the Board, the issues on appeal, and requests for a hearing before the Board; or

(2) For the Board to consider an appeal in light of law, including but not limited to statute, regulation, or court decision, not already considered by the agency of original jurisdiction.

(c) Scope. This section does not apply to:

(1) The Board's request for an opinion under Rule 901 (§ 20.901 of this chapter);

(2) The Board's supplementation of the record with a recognized medical treatise; and

(3) Matters over which the Board has original jurisdiction described in Rules 609 and 610 (§§ 20.609 and 20.610 of this chapter).

(Authority: 38 U.S.C. 7102, 7103(c), 7104(a)).

3. Section 19.31 is revised to read as follows:

§ 19.31

Supplemental statement of the case.

(a) Purpose and limitations. A “Supplemental Statement of the Case,” so identified, is a document prepared by the agency of original jurisdiction to inform the appellant of any material changes in, or additions to, the information included in the Statement of the Case or any prior Supplemental Statement of the Case. In no case will a Supplemental Statement of the Case be used to announce decisions by the agency of original jurisdiction on issues not previously addressed in the Statement of the Case, or to respond to a notice of disagreement on newly appealed issues that were not addressed in the Statement of the Case. The agency of original jurisdiction will respond to notices of disagreement on newly appealed issues not addressed in the Statement of the Case using the procedures in §§ 19.29 and 19.30 of this part (relating to statements of the case).

(b) When furnished. The agency of original jurisdiction will furnish the appellant and his or her representative, if any, a Supplemental Statement of the Case if:

(1) The agency of original jurisdiction receives additional pertinent evidence after a Statement of the Case or the most recent Supplemental Statement of the Case has been issued and before the appeal is certified to the Board of Veterans' Appeals and the appellate record is transferred to the Board;

(2) A material defect in the Statement of the Case or a prior Supplemental statement of the Case is discovered; or

(3) For any other reason the Statement of the Case or a prior Supplemental Statement of the Case is inadequate.

(c) Pursuant to remand from the Board. The agency of original jurisdiction will issue a Supplemental Statement of the Case if, pursuant to a remand by the Board, it develops the evidence or cures a procedural defect, unless:

(1) The only purpose of the remand is to assemble records previously considered by the agency of original jurisdiction and properly discussed in a prior Statement of the Case or Supplemental Statement of the Case; or

(2) The Board specifies in the remand that a Supplemental Statement of the Case is not required.

(Authority: 38 U.S.C. 7105(d)).

PART 20—BOARD OF VETERANS' APPEALS: RULES OF PRACTICE

4. The authority citation for part 20 continues to read as follows:

Authority: 38 U.S.C. 501(a) and as noted in specific sections.

Subpart J—Action by the Board

5. Section 20.903 is revised to read as follows:

§ 20.903

Rule 903. Notification of evidence secured and law to be considered by the Board and opportunity for response.

(a) If the Board obtains a legal or medical opinion. If the Board requests an opinion pursuant to Rule 901 (§ 20.901 of this part), the Board will notify the appellant and his or her representative, if any. When the Board receives the opinion, it will furnish a copy of the opinion to the appellant's representative or, subject to the limitations provided in 38 U.S.C. 5701(b)(1), to the appellant if there is no representative. A period of 60 days from the date of mailing of a copy of the opinion will be allowed for response. The date of mailing will be presumed to be the same as the date of the letter or memorandum that accompanies the copy of the opinion for purposes of determining whether a response was timely filed.

(b) If the Board obtains other evidence. If, pursuant to § 19.9(b) or § 19.37(b) of this part, the Board obtains pertinent evidence that was not submitted by the appellant or the appellant's representative, the Board will notify the appellant and his or her representative, if any, of the evidence obtained. A period of 60 days from the date of mailing of the notice will be allowed for response. The date of mailing will be presumed to be the same as the date of the letter or memorandum that accompanies the notice for purposes of determining whether a response was timely filed.

(c) If the Board considers law not already considered by the agency of original jurisdiction. If the Board intends to consider law not already considered by the agency of original jurisdiction and such consideration could result in denial of the appeal, the Board will notify the appellant and his or her representative, if any, of its intent to do so and that such consideration in the first instance by the Board could result in denial of the appeal. The notice from the Board will contain a copy of, or reference to, the law to be considered. A period of 60 days from the date of mailing of the notice will be allowed for response. The date of mailing will be presumed to be the same as the date of the letter that accompanies the notice for purposes of determining whether a response was timely filed.

(Authority: 38 U.S.C. 7104(a), 7109(c)).

Subpart N—Miscellaneous

6. Section 20.1304 is amended by:

a. Revising the fifth sentence in paragraph (a);

b. Revising paragraph (b);

c. Removing paragraph (c); and

d. Redesignating paragraph (d) as paragraph (c).

The revisions read as follows:

§ 20.1304

Rule 1304. Request for change in representation, request for personal hearing, or submission of additional evidence following certification of an appeal to the Board of Veterans' Appeals.

(a) * * * Any pertinent evidence submitted by the appellant or representative is subject to the requirements of paragraph (c) of this section if a simultaneously contested claim is involved.

(b) Subsequent request for a change in representation, request for a personal hearing, or submission of additional evidence. (1) General rule. Subject to the exception in paragraph (b)(2) of this section, following the expiration of the period described in paragraph (a) of this section, the Board of Veterans' Appeals will not accept a request for a change in representation, a request for a personal hearing, or additional evidence except when the appellant demonstrates on motion that there was good cause for the delay. Examples of good cause include, but are not limited to, illness of the appellant or the representative which precluded action during the period; death of an individual representative; illness or incapacity of an individual representative which renders it impractical for an appellant to continue with him or her as representative; withdrawal of an individual representative; the discovery of evidence that was not available prior to the expiration of the period; and delay in transfer of the appellate record to the Board which precluded timely action with respect to these matters. Such motions must be in writing and must include the name of the veteran; the name of the claimant or appellant if other than the veteran (e.g., a veteran's survivor, a guardian, or a fiduciary appointed to receive VA benefits on an individual's behalf); the applicable Department of Veterans Affairs file number; and an explanation of why the request for a change in representation, the request for a personal hearing, or the submission of additional evidence could not be accomplished in a timely manner. Such motions must be filed at the following address: Director, Administrative Service (014), Board of Veterans' Appeals, 810 Vermont Avenue, NW., Washington, DC 20420. Depending upon the ruling on the motion, action will be taken as follows:

(i) Good cause not shown. If good cause is not shown, the request for a change in representation, the request for a personal hearing, or the additional evidence submitted will be referred to the agency of original jurisdiction upon completion of the Board's action on the pending appeal without action by the Board concerning the request or additional evidence. Any personal hearing granted as a result of a request so referred or any additional evidence so referred may be treated by that agency as the basis for a reopened claim, if appropriate. If the Board denied a benefit sought in the pending appeal and any evidence so referred which was received prior to the date of the Board's decision, or testimony presented at a hearing resulting from a request for a hearing so referred, together with the evidence already of record, is subsequently found to be the basis of an allowance of that benefit, the effective date of the award will be the same as if the benefit had been granted by the Board as a result of the appeal which was pending at the time that the hearing request or additional evidence was received.

(ii) Good cause shown. If good cause is shown, the request for a change in representation or for a personal hearing will be honored. Any pertinent evidence submitted by the appellant or representative will be accepted, subject to the requirements of paragraph (c) of this section if a simultaneously contested claim is involved.

(2) If the Board obtains evidence or considers law not considered by the agency of original jurisdiction. The motion described in paragraph (b)(1) of this section is not required to submit evidence in response to the notice described in paragraph (b) or (c) of Rule 903 (paragraph (b) or (c) of § 20.903 of this part).

* * * * *

(Authority: 38 U.S.C. 7104, 7105, 7105A).