Adjudication; pensions, compensation, dependency, etc.: Benefits entitlement, written and oral information or statements affecting,

[Federal Register: April 20, 2001 (Volume 66, Number 77)]

[Proposed Rules]

[Page 20220-20223]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr20ap01-18]

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK25

Written and Oral Information or Statements Affecting Entitlement to Benefits

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

SUMMARY: This document proposes to amend the Department of Veterans Affairs (VA) adjudication regulations to eliminate the requirement that beneficiaries advise VA of changes affecting their entitlement to benefits in writing. This will allow VA to increase or decrease benefit payments based on information submitted orally or by e-mail, facsimile, or other electronic means and make it easier for beneficiaries to submit information that they must provide. We further propose to amend our notice requirements to allow VA to reduce or terminate benefit payments based on information reported orally without issuing a 60-day advance notice, but only under certain conditions that would ensure that claimants are not deprived of benefits without adequate notice. This would reduce the amounts of any overpayments created by these actions.

DATES: Comments must be received on or before June 19, 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; or fax comments to (202) 273-9289; or e-mail comments to OGCRegulation@mail.va.gov. Comments should indicate that they are submitted in response to ``RIN 2900-AK25.'' 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: Donald England, Chief, Policy and Regulations Staff (211A), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-7210 (This is not a toll- free number).

SUPPLEMENTARY INFORMATION: For compensation, pension and dependency and indemnity compensation (DIC) benefits administered by VA, individual factors such as income, marital status, the beneficiary's number of dependents, may affect the amount of the benefit that he or she receives or they may affect his or her right to receive the benefit. Beneficiaries must report changes in these factors to VA in a timely manner; certain current VA regulations require that they report such changes in writing. However, there are other means by which beneficiaries could report such changes, including telephone, facsimile, or e-mail, that would allow beneficiaries to advise VA of the changes more quickly and thereby enable VA to adjust benefit payments more quickly. Furthermore, the office of the VA Inspector General has recommended that we eliminate the requirement that such reports be in writing in order to reduce the amounts of the overpayments created when beneficiaries report changes that require VA to reduce or terminate their benefits. For these reasons, we propose to amend VA's adjudication regulations at 38 CFR 3.204(a)(1), 3.256(a) and 3.277(b) to delete the requirement that beneficiaries report such changes in writing.

If VA is to adopt these changes, clearly we must also develop safeguards, both for beneficiaries and for VA, to ensure that VA adjusts benefit payments based only on information provided by the beneficiary (or his or her fiduciary) and that the information provided is documented for VA records. We propose to address these issues by adding a new regulation at 38 CFR 3.217. We propose to specify in paragraph (a) of that new section, that unless specifically provided otherwise elsewhere in the regulations, the submission of information that affects entitlement via e-mail, facsimile, or other written electronic means will satisfy a requirement that such information be submitted in writing. This paragraph will also include a note to clarify that the new section applies only to how such information is submitted; it does not relieve the claimant of any other evidence

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requirements, such as a requirement to use a specific form, to provide specific information or evidence, or to provide a certified statement or a signature. Although VA cannot currently accept electronic signatures, we are exploring technology that may allow us to do so in the future.

We propose to authorize VA to take action affecting entitlement to benefits based on oral or written information provided by a beneficiary or his or her fiduciary in paragraph (b) of new section 3.217. When an individual submits information in writing or by facsimile or e-mail, clearly there is, or in the case of e-mail VA may clearly create, a written document detailing the information provided and the date VA received it. However, because there is no such automatic recording of information that is provided orally, we propose that VA may not take action based on oral information or statements unless the VA employee receiving the information takes specific actions during the conversation in which the information or statement is provided. We propose to require the VA employee to take the following actions:

(1) Identify himself or herself as a VA employee who is authorized to receive the information or statement;

(2) Verify the identity of the provider as either the beneficiary or his or her fiduciary by obtaining specific information about the veteran or beneficiary, such as Social Security number, date of birth, branch and/or dates of military service, or other information, that can be verified from the beneficiary's VA records; and

(3) Inform the provider that VA will use the information or statement to calculate benefit amounts.

We also propose to require the VA employee receiving the information to document all of the information or the statement received, as well as the steps taken to verify the identity of the provider, in the beneficiary's VA records. Just as importantly, we propose to require the VA employee to document in the beneficiary's VA records that he or she informed the provider that VA would use the information or statement to calculate benefit amounts.

VA regulations at 38 CFR 3.103(b) generally prohibit VA from reducing or terminating an award of compensation, pension or DIC without first notifying the beneficiary of the adverse action and allowing him or her 60 days in which to submit evidence showing that VA should not take the adverse action. There are specific exceptions to that rule in which VA may issue a notice of the adverse action at the same time it takes the action rather than wait 60 days before taking the action. One of those exceptions is when an adverse action is based solely on written, factual, unambiguous information regarding income, net worth, dependency or marital status provided to VA by the beneficiary or his or her fiduciary with knowledge or notice that VA will use the information to calculate benefits. We propose to revise Sec. 3.103(b) to allow VA to issue notice at the same time it takes adverse action, in lieu of the otherwise required 60-day advance notice, based on written or oral information as described above if the VA employee receiving the information met all of the requirements set out in proposed Sec. 3.217. The proposed rule also states that VA will restore retroactively benefits that were reduced or terminated based on oral information or statements if within 30 days of the date of the notification of adverse action the beneficiary or his or her fiduciary asserts that the adverse action was based upon information or statements that were inaccurate or upon information that was not provided by the beneficiary or his or her fiduciary. This will not preclude VA from taking subsequent action that adversely affects benefits.

Many beneficiaries report these changes to VA by telephone because it is more convenient or in hopes of keeping VA from issuing payments to which they know they are not entitled. They are frustrated when VA advises them that it will issue at least two additional benefit payments unless the beneficiary reports the same information in writing. Adopting the proposed change to Sec. 3.103(b) in conjunction with the proposed changes to Secs. 3.204, 3.256 and 3.277 and the addition of Sec. 3.217, will address the concerns of both beneficiaries, by allowing VA to take action on reported changes in a more timely and customer friendly fashion, and the Office of the Inspector General by reducing the amounts of overpayments created because of adverse actions. We believe the proposed provisions contain sufficient added safeguards to ensure that the information and statements used for decision making are accurate and that we accept oral information or statements only under conditions that meet due process requirements.

We also propose to make nonsubstantive changes for purposes of clarity.

Paperwork Reduction Act

Proposals regarding 38 CFR 3.256, and 3.277 would contain changes to collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Accordingly, under section 3507(d) of the Act, VA has submitted a copy of this rulemaking action to OMB for its review of the collections of information.

OMB assigns a control number for each collection of information it approves. VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Comments on the proposed collections of information should be submitted to the Office of Management and Budget, Attention: Desk Officer for the Department of Veterans Affairs, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies mailed or hand-delivered to: Director, Office of Regulations Management (02D), Department of Veterans Affairs, 810 Vermont Ave., NW, Room 1154, Washington, DC 20420. Comments should indicate that they are submitted in response to ``RIN 2900-AK25.''

Title: Eligibility Verification Reporting.

Summary of collection of information: Under the provisions of proposed Secs. 3.256 and 3.277 the modes for submitting evidence of changes in factors affecting entitlement to pension or dependency and indemnity compensation benefits would be expanded to include oral or electronic submissions. The current OMB information collection approval applies only to written, not oral or electronic, submissions of factual and unambiguous information that the beneficiary or his or her fiduciary is required to provide to VA to meet the reporting requirements of Secs. 3.256 and 3.277. A slight reduction in the current burden estimate is anticipated with likely respondents' use of these more customer-friendly modes of submitting evidence.

Description of the need for information and proposed use of information: This information would be needed for VA to determine whether adjustments in the rate of payment are necessary.

Description of likely respondents: Veterans and their dependents who receive compensation, pension or dependency and indemnity compensation benefits.

Estimated number of respondents: 372,209.

Estimated frequency of responses: 1.

Estimated total annual reporting and recordkeeping burden: 31,017 hours.

Estimated annual burden per collection: 5 minutes.

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The Department considers comments by the public on proposed collections of information in--

Evaluating whether the proposed collections of information are necessary for the proper performance of the functions of the Department, including whether the information will have practical utility;

Evaluating the accuracy of the Department's estimate of the burden of the proposed collections of information, including the validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the information to be collected; and

Minimizing the burden of the collections of information on those who are to respond, including responses through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

OMB is required to make a decision concerning the collections of information contained in this proposed rule between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication. This does not affect the deadline for the public to comment on the proposed rule.

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 (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.

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

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Disability benefits, Health care, Pensions, Radioactive materials, Veterans, Vietnam.

Approved: February 15, 2001. Anthony J. Principi, Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 3 is proposed to be amended as set forth below:

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. Section 3.103 is amended by:

   1. Revising paragraph (b)(2) heading and revising paragraphs (b)(3) introductory text and (b)(3)(i).

   2. Removing ``is'' from paragraphs (b)(3)(ii), (b)(3)(iv), (b)(3)(v) and (b)(3)(vi).

   3. Removing the comma at the end of paragraphs (b)(3)(ii), (b)(3)(iii) and (b)(3)(iv), and adding, in its place, a period.

   4. Removing ``, or'' at the end of paragraph (b)(3)(v) and adding, in its place, a period.

   5. Adding paragraph (b)(4).

   6. Revising the authority citation at the end of the section.

   The addition and revisions read as follows:

   Sec. 3.103 Procedural due process and appellate rights.

   * * * * *

   (b) * * *

   (2) Advance notice and opportunity for hearing.* * *

   (3) Exceptions. In lieu of advance notice and opportunity for a hearing, VA will send a written notice to the beneficiary or his or her fiduciary at the same time it takes an adverse action under the following circumstances:

   (i) An adverse action based solely on factual and unambiguous information or statements as to income, net worth, or dependency or marital status that the beneficiary or his or her fiduciary provided to VA in writing or orally (under the procedures set forth in Sec. 3.217(b)), with knowledge or notice that such information would be used to calculate benefit amounts. * * * * *

   (4) Restoration of benefits. VA will restore retroactively benefits that were reduced, terminated, or otherwise adversely affected based on oral information or statements if within 30 days of the date on which VA issues the notification of adverse action the beneficiary or his or her fiduciary asserts that the adverse action was based upon information or statements that were inaccurate or upon information that was not provided by the beneficiary or his or her fiduciary. This will not preclude VA from taking subsequent action that adversely affects benefits.

   (Authority: 38 U.S.C. 501, 1115, 1506, 5104)

3. In Sec. 3.204(a)(1), the word ``written'' is removed.

4. A new Sec. 3.217 is added preceding the undesignated centerheading ``Dependency, Income and Estate'':

   Sec. 3.217 Submission of statements or information affecting entitlement to benefits.

   (a) For purposes of this part, unless specifically provided otherwise, the submission of information or a statement that affects entitlement to benefits by e-mail, facsimile, or other written electronic means, will satisfy a requirement or authorization that the statement or information be submitted in writing.

   Note to Paragraph (a): Section 3.217(a) merely concerns the submission of information or a statement in writing. Other requirements specified in this part, such as a requirement to use a specific form, to provide specific information, to provide a signature, or to provide a certified statement, must still be met.

   (b) For purposes of this part, unless specifically provided otherwise, VA may take action affecting entitlement to benefits based on oral or written information or statements provided to VA by a beneficiary or his or her fiduciary. However, VA may not take action based on oral information or statements unless the VA employee receiving the information meets the following conditions:

   (1) During the conversation in which the information or statement is provided, the VA employee:

   (i) Identifies himself or herself as a VA employee who is authorized to receive the information or statement (these are VA employees authorized to take actions under Secs. 2.3 or 3.100 of this chapter);

   (ii) Verifies the identity of the provider as either the beneficiary or his or her fiduciary by obtaining specific information about the beneficiary that can be verified from the beneficiary's VA records, such as Social Security number, date of birth, branch of military service, dates of military service, or other information; and

   (iii) Informs the provider that the information or statement will be used for the purpose of calculating benefit amounts; and

   (2) During or following the conversation in which the information

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   or statement is provided, the VA employee documents in the beneficiary's VA records the specific information or statement provided, the date such information or statement was provided, the identity of the provider, the steps taken to verify the identity of the provider as being either the beneficiary or his or her fiduciary, and that he or she informed the provider that the information would be used for the purpose of calculating benefit amounts.

   (Authority: 38 U.S.C. 501, 1115, 1506, 5104)

5. Section Sec. 3.256(a) introductory text is amended by removing ``in writing''.

6. Section Sec. 3.277(b) introductory text is amended by removing ``in writing''.

   [FR Doc. 01-9643Filed4-19-01; 8:45 am]

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