Enrollment-Provision of Hospital and Outpatient Care to Veterans

AGENCY:

Department of Veterans Affairs.

ACTION:

Proposed rule.

SUMMARY:

VA's medical regulations captioned “Enrollment—Provision of Hospital and Outpatient Care to Veterans” implement a national enrollment system to manage the delivery of inpatient hospital care and outpatient medical care. Veterans currently are eligible to be enrolled based on seven priority categories. We would add veterans awarded the Purple Heart to priority category 3 to implement new statutory requirements. We would delete the copayment provisions from priority category 4 to clarify statutory requirements. We propose to divide priority category 7 into two new priority categories (7 and 8) to implement new statutory requirements. We would use the current subpriorities for category 7 for these new categories. We propose to state principles for placing veterans in enrollment categories to help ensure clarity and fairness in making priority category determinations. Finally, we would change the VA officials who can make enrollment decisions and provide an additional address for sending a request for voluntary disenrollment.

DATES:

Comments must be received on or before August 22, 2002.

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; or fax comments to (202) 273-9289; or e-mail comments to OGCRegulations@mail.va.gov. Comments should indicate that they are submitted in response to “RIN 2900-AK38.” All comments received will be available for public inspection in the Office of Regulations Management, Room 1158, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT:

Amy Hertz, Office of Policy and Planning (105D), at (202) 273-8934 or Roscoe Butler, Chief Policy & Operations, Health Administration Service (10C3), at (202) 273-8302. These individuals are in the Veterans Health Administration of the Department of Veterans Affairs, and are located at 810 Vermont Avenue, NW, Washington, DC 20420.

SUPPLEMENTARY INFORMATION:

Pursuant to the mandate of the Veterans' Health Care Eligibility Reform Act of 1996, VA established a national enrollment system to manage the delivery of inpatient hospital care and outpatient medical care (38 CFR 17.36). Starting October 1, 1998, most veterans were required to be enrolled in the VA health care system as a condition for receiving VA hospital and outpatient care, and the Secretary was required to make annual determinations as to which categories of veterans are eligible to enroll in the VA health care system.

Currently, VA's enrollment regulations at 38 CFR 17.36 provide that veterans are eligible to be enrolled based on the following categories of priority:

(1) Veterans with a singular or combined rating of 50 percent or greater based on one or more service-connected disabilities or unemployability.

(2) Veterans with a singular or combined rating of 30 percent or 40 percent based on one or more service-connected disabilities.

(3) Veterans who are former prisoners of war; veterans with a singular or combined rating of 10 percent or 20 percent based on one or more service-connected disabilities; veterans who were discharged or released from active military service for a disability incurred or aggravated in the line of duty; veterans who receive disability compensation under 38 U.S.C. 1151; veterans whose entitlement to disability compensation is suspended pursuant to 38 U.S.C. 1151, but only to the extent that such veterans' continuing eligibility for hospital and outpatient care is provided for in the judgment or settlement described in 38 U.S.C. 1151; veterans whose entitlement to disability compensation is suspended because of the receipt of military retired pay; and veterans receiving compensation at the 10 percent rating level based on multiple noncompensable service-connected disabilities that clearly interfere with normal employability.

(4) Veterans who receive increased pension based on their need for regular aid and attendance or by reason of being permanently housebound and other veterans who are determined to be catastrophically disabled by the Chief of Staff (or equivalent clinical official) at the VA facility where they were examined; except that a veteran who is catastrophically disabled and who must agree under 38 U.S.C. 1710 to pay to the United States a copayment as condition of receiving VA care, must agree to pay to the United States the applicable copayment to be enrolled in priority category 4.

(5) Veterans not covered by paragraphs (1) through (4) of this section who are determined to be unable to defray the expenses of necessary care under 38 U.S.C. 1722(a).

(6) Veterans of the Mexican border period or of World War I; veterans solely seeking care for a disorder associated with exposure to a toxic substance or radiation, for a disorder associated with service in the Southwest Asia theater of operations during the Gulf War, or for any illness associated with service in combat in a war after the Gulf War or during a period of hostility after November 11, 1998, as provided and limited in 38 U.S.C. 1710(e); and veterans with 0 percent service-connected disabilities who are nevertheless compensated, including veterans receiving compensation for inactive tuberculosis.

(7) Veterans who agree to pay to the United States the applicable copayment determined under 38 U.S.C. 1710(f) and 1710(g). This category is further prioritized into the following subcategories:

(i) Noncompensable zero percent service-connected veterans; and

(ii) All other priority category 7 veterans.

Priority Category 3—Purple Heart

The Veteran's Millennium Health Care and Benefits Act amended the priority categories to include veterans awarded the Purple Heart in priority category 3. Accordingly, we will change the regulations to implement this statutory change.

Priority Category 4—Catastrophically Disabled Veterans

As noted above, the regulations exclude from priority category 4 those catastrophically disabled veterans who were required under 38 U.S.C. 1710 to agree to pay to the United States a copayment as a condition of receiving care and who had not made such an agreement. The statutory provision establishing the enrollment priority (38 U.S.C. 1705) included catastrophically disabled veterans without regard to copayment requirements. Accordingly, we would delete the copayment provisions from priority category 4. However, as a condition of receiving care, the provisions of 38 U.S.C. 1710 require certain catastrophically disabled veterans to agree to make copayments. Accordingly, § 17.36(a)(2) would be clarified to reflect that to be eligible for the medical benefits package a veteran must agree to make copayments if required by law to do so.

Priority Categories 7 and 8

This document would replace priority category 7 with two new priority categories (7 and 8) and use the current subpriorities for category 7 for these new categories as follows:

(7) Veterans who agree to pay to the United States the applicable copayment determined under 38 U.S.C. 1710(f) and 1710(g) if their income for the previous calendar year constitutes “low income” under the geographical income limits published by the U.S. Department of Housing and Urban Development for the fiscal year that ended on September 30 of the previous calendar year. For purposes of this paragraph, VA will determine the income of veterans (to include the income of their spouses and dependents) using the rules in §§ 3.271, 3.272, 3.273, and 3.276; and 38 U.S.C. 1521. After determining the veterans' income and the number of persons in the veterans' family (including only the spouse and dependent children), VA will compare their income with the current applicable “low-income” income limit for the public housing and section 8 programs in their area that the U.S. Department of Housing and Urban Development publishes pursuant to 42 U.S.C. 1437a(b)(2). If the veteran's income is below the applicable “low-income” income limit for the area in which the veteran resides, the veteran will be considered to have “low income” for purposes of this paragraph. To avoid a hardship to a veteran, VA may use the projected income for the current year of the veteran, spouse, and dependent children if the projected income is below the “low income” income limit referenced above.

This category is further prioritized into the following subcategories:

(i) Noncompensable zero percent service-connected veterans; and

(ii) All other priority category 7 veterans.

(8) Veterans not included in priority category 4 or 7, who are eligible for care only if they agree to pay to the United States the applicable copayment determined under 38 U.S.C. 1710(f) and 1710(g). This category is further prioritized into the following subcategories:

(i) Noncompensable zero percent service-connected veterans; and

(ii) All other priority category 8 veterans.

The new priority category 7 is required to implement section 202(a) of Public Law 107-135 that establishes a new priority category 7 which reads: “Veterans described in section 1710(a)(3) of this title who are eligible for treatment as a low-income family under section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) for the area in which such veterans reside, regardless of whether such veterans are treated as single person families under paragraph (3)(A) of such section 3(b) or as families under paragraph (3)(B) of such section 3(b).” We have interpreted this provision to require that VA just use the income limits established by the Department of Housing and Urban Development to determine whether veterans are in priority category 7. To interpret this provision to require VA or HUD to determine veterans' income under the HUD methodology would result in many veterans having two different incomes for purposes of enrollment in the VA healthcare system: One based on the HUD methodology and the other based on VA's methodology. This interpretation is not supported by the legislative history of this provision and would be unreasonable, unsound, and unworkable. Instead, we propose using the same methodology used to determine income as used in determining whether veterans are unable to defray the cost of necessary care under 38 U.S.C. 1722. This requires using prior year income unless VA determines that using projected current year income would avoid a hardship to the veteran.

The description of the new priority category 8 restates a provision in section 202(a) of Public Law 107-135. To be eligible for enrollment in priority category 8, veterans must agree to pay the applicable copayment, but they need not provide VA with income and asset information.

We propose to sub-prioritize new categories 7 and 8 in the same manner as the current category 7, i.e., on the basis of whether the veterans have service-connected (noncompensable) disabilities. We continue to believe that veterans with a service-connected disability should have a higher priority than those without a service-connected disability.

Consistent with this expansion of priority categories, we propose to amend the enrollment application provisions of § 17.36(d)(1). Thus, applicants for placement in new priority category 8 would not be required to complete section II of VA Form 10-10EZ; however, applicants for new priority category 7 would be required to complete the entire form except for section IIE (i.e., information concerning a veteran's net worth). In our opinion, this is necessary to be consistent with our methodology for determining income in the same manner as currently used for applicants for placement in priority category 5, except that information concerning a veteran's net worth is not needed for applicants for new priority category 7.

Principles for Placement in Enrollment Categories

We propose to establish the following principles for placement of veterans in priority categories:

• Veterans will be placed in priority categories whether or not the veterans in that category are eligible to be enrolled.
• A veteran will be placed in the highest priority category or categories for which the veteran qualifies.
• A veteran may be placed in only one priority category, except that a veteran placed in priority category 6 based on a specified disorder or illness will also be placed in priority category 7 or 8 (if the veteran has previously agreed to pay the applicable copayment) for all matters not covered by priority category 6.
• A veteran who had been enrolled based on inclusion in priority category 5 and became no longer eligible for inclusion in that priority category due to failure to submit to VA a current VA Form 10-10EZ will be changed automatically to enrollment based on inclusion in priority category 6 or 8, as applicable, (or more than one of these categories if the previous principle applies), and be considered continuously enrolled. To meet the criteria for priority category 5, a veteran must submit to VA required financial information in a current VA Form 10-10EZ. To be current, after VA has sent a form 10-10EZ to the veteran at the veteran's last known address, the veteran must return the completed form (including signature) to the address on the return envelope within 60 days from the date VA sent the form to the veteran.
• Veterans will be disenrolled, and reenrolled, in the order of the priority categories listed with veterans in priority category 1 being the last to be disenrolled and the first to be reenrolled. Similarly, within priority categories 7 and 8, veterans will be disenrolled, and reenrolled, in the order of the priority subcategories listed with veterans in subcategory (i) being the last to be disenrolled and first to be reenrolled.

The first principle clarifies that VA will place veterans in the priority category in which they belong even if the Secretary has announced that VA will not enroll veterans in that category under § 17.36(c). This will permit veterans to dispute that placement and may facilitate veterans in this category obtaining VA care if the Secretary later decides to enroll veterans in that category. The second and fifth principles are consistent with 38 U.S.C. 1705(a) which requires VA to give priority to the categories in the order listed. The third principle is required by 38 U.S.C. 1710(a)(2)(F) and (e) which limits the eligibility for care given to certain veterans placed in priority category 6. We are proposing the fourth principle to facilitate the transfer of veterans from category 5 to category 6 or 8 without disenrollment. The current regulations state that to remain in priority category 5, veterans are required yearly to submit information to VA establishing financial eligibility for such priority category. The regulations contained provisions for disenrolling veterans who had been in priority category 5 but who had failed to submit information establishing that they should remain in priority category 5. Disenrollment of such veterans could, during periods when VA must limit enrollments and re-enrollments, result in the loss of eligibility for VA care altogether. This was never intended for veterans who had previously signed a form 10-10EZ and thus agreed to pay applicable copayments. Accordingly, this document proposes to change the rule to provide that a veteran no longer eligible for priority category 5 would be automatically changed to enrollment based on inclusion in priority category 6, or 8, and be deemed as continuously enrolled if the enrollment decision allows for such priority categories to remain enrolled.

Decisionmaking Officials

To reflect a title change, we would change “Chief Network Officer” to “Deputy Under Secretary for Health for Operations and Management.” Further, we would add “Chief, Health Administration Service or equivalent official at a VA medical facility, or Director, Health Eligibility Center” to the list of VA officials who can make decisions regarding the enrollment of individual veterans. In our opinion, this is necessary to give VA greater flexibility in administering the enrollment process. We would not change the regulation that provides that the Secretary will make the determination regarding which priority categories of veterans are eligible to be enrolled.

Miscellaneous

An address is proposed to be added for veterans to send a request for voluntary disenrollment. Finally, we would remove a nonsubstantive, unnecessary bracketed phrase from paragraph 17.36(f).

Unfunded Mandates

The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in an expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any given year. This rule would have no consequential effect on State, local, or tribal governments.

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. Executive Order 12866 provides that a proposed rule “in most cases should include a comment period of not less than 60 days.” This proposal provides for a 30-day comment period. This is necessary to allow for a final rule to be established in time to allow the VA Secretary to have as many options as possible concerning the provision of health care services to veterans in fiscal year 2003.

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 (RFA), 5 U.S.C. 601-612. This amendment would not directly affect any small entities. Only individuals could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Numbers

The Catalog of Federal Domestic Assistance numbers for the programs affected by this document are 64.005, 64.007, 64.008, 64.009, 64.010, 64.011, 64.012, 64.013, 64.014, 64.015, 64.016, 64.018, 64.019, 64.022, and 64.025.

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

For the reasons set out in the preamble, 38 CFR part 17 is proposed to be amended as set forth below:

PART 17—MEDICAL

1. The authority citation for part 17 continues to read as follows:

Authority: 38 U.S.C. 501, 1721, unless otherwise noted.

2. Section 17.36 is amended by:

A. Removing “Chief Network Officer” wherever it appears and adding, in its place, “Deputy Under Secretary for Health for Operations and Management or Chief, Health Administration Service or equivalent official at a VA medical facility, or Director, Health Eligibility Center”.

B. Revising paragraphs (a)(2), (b)(4), and (b)(7).

C. In paragraph (b)(3), removing “prisoners of war;” and adding, in its place, “prisoners of war; veterans awarded the Purple Heart;”

D. Adding a new paragraph (b)(8).

E. Revising paragraph (d)(1); and redesignating paragraphs (d)(3) through (d)(5) as paragraphs (d)(4) through (d)(6), respectively.

F. Adding a new paragraph (d)(3).

G. Revising newly redesignated paragraphs (d)(5) introductory text; and (d)(5)(i).

H. Removing “Note to Paragraph (d)(1)”.

I. In newly redesignated paragraph (d)(5)(iii), removing “priority category 5;” and adding, in its place, “priority category 5 or priority category 7;”.

J. In paragraph (f), removing “[insert actual photocopy of VA Form 10-10EZ]''.

K. Revising the authority at the end of the section. The revisions and additions read as follows: