Dermark v. McDonough, 19-2795

• Decision Date: 01 June 2021
• Docket Number: 19-2795
• Parties: Peter Van Dermark, Appellant, v. Denis McDonough, Secretary of Veterans Affairs, Appellee.
• Court: United States Court of Appeals For Veterans Claims

Peter Van Dermark, Appellant, v. Denis McDonough, Secretary of Veterans Affairs, Appellee.

No. 19-2795

United States Court of Appeals For Veterans Claims

June 1, 2021

Argued October 20, 2020

On Appeal from the Board of Veterans' Appeals

Luke D. Miller, of Salem, Oregon, for the appellant.

James R. Drysdale, with whom William A. Hudson, Jr., Acting General Counsel; Mary Ann Flynn, Chief Counsel; and Anna Whited Deputy Chief Counsel, were on the brief, all of Washington D.C., for the appellee.

John D. Niles, Barton F. Stichman, Chris Childs, and Emily Wexler were on the brief, all of Washington, D.C., for the National Veterans Legal Services Program and the Modern Military Association of America as amici curiae.

Before PIETSCH, GREENBERG, and TOTH, Judges.

TOTH JUDGE

Veteran Peter Van Dermark appeals a Board decision denying reimbursement for cardiac treatments at Bangkok Hospital in May 2016 and May 2018. He asserts that these were emergency treatments and that two statutes, 38 U.S.C. §§ 1725 and 1728, require VA to reimburse him for any money he personally expended for this care. The Board disagreed concluding that these statutes were not applicable outside the United States. Instead, it found that 38 U.S.C. § 1724 and relevant VA regulations governed and barred VA from furnishing-that is, paying for-cardiac treatment outside the United States because such a condition was not connected to service. Because we agree that section 1724 generally bars the Secretary from paying for emergency treatment abroad of a non-service-connected condition, the Court affirms the Board decision.

I. BACKGROUND

A. Law

This case concerns the interaction of three statutes within chapter 17 of title 38 of the U.S. Code: sections 1724, 1725, and 1728. We start with an overview of each.

1.

The first is 38 U.S.C. § 1724, entitled "Hospital care, medical services and nursing home care abroad." It is the only statutory provision that expressly addresses VA's healthcare obligations outside the United States. At present, it instructs that "the Secretary shall not furnish hospital or domiciliary care or medical services outside any State."^[1] 38 U.S.C. § 1724(a).

Subsections (b) and (c) of the statute create explicit exceptions to this prohibition. Under (b)(1), VA "may furnish" medical services and hospital care abroad to a U.S. citizen veteran "who is otherwise eligible to receive" them when necessary for treatment of a service-connected disability or as part of a rehabilitation program. Under (b)(2), the Secretary has discretion to furnish non-citizen veterans in the Philippines or Canada care and services for service-connected disabilities if he determines the care to be appropriate and feasible. Subsection (c) allows the Secretary, "[w]ithin the limits of those facilities of the Veterans Memorial Medical Center at Manila, Republic of the Philippines, for which the Secretary may contract," to "furnish necessary hospital care to a veteran for any non-service-connected disability if such veteran is unable to defray the expenses of necessary hospital care."

Finally, the statute allows the Secretary, "[w]ithin the limits of an outpatient clinic in the Republic of the Philippines that is under the direct jurisdiction of the Secretary," to "furnish a veteran who has a service-connected disability with such medical services as the Secretary determines to be needed." 38 U.S.C. § 1724(e).

VA implemented this statute by establishing the Foreign Medical Program (FMP) to "furnish hospital care and outpatient services to any veteran outside of the United States, without regard to the veteran's citizenship" if such care and services are "necessary for treatment of a service-connected disability, or any disability associated with and held to be aggravating a service-connected disability," or are "furnished to a veteran participating in a rehabilitation program under . . . chapter 31." 38 C.F.R. § 17.35(a)(1)-(2) (2020). Subsection (b) addresses the special circumstances regarding treatment in the Philippines. "Claims for payment or reimbursement for services not previously authorized by VA under this section are governed by §§ 17.123-17.127 and 17.129-17.132." 38 U.S.C. § 17.35(c).

2.

Next to be enacted, in 1973, was section 1728, which instructs the Secretary to "reimburse veterans eligible for hospital care or medical services . . . for the customary and usual charges of emergency treatment (including travel and incidental expenses under [certain terms and conditions])" when such emergency treatment was rendered outside the VA system for any of the following: (1) an "adjudicated" service-connected disability; (2) a non-service-connected disability "associated with and held to be aggravating a service-connected disability"; (3) any disability, if a veteran has a permanent total disability; or (4) any illness, injury, or dental condition of a veteran in a rehabilitation program where the care or treatment is necessary to facilitate entrance into or continuation of that program. 38 U.S.C. § 1728(a).

The implementing regulation, 38 C.F.R. § 17.120, reiterates these criteria without much elaboration except for (a)(3), with respect to which it provides: "For any disability of a veteran who has a total disability permanent in nature resulting from a service-connected disability (does not apply outside of the States, Territories, and possessions of the United States, the District of Columbia, and the Commonwealth of Puerto Rico)." 38 C.F.R. § 17.120(a)(3) (2020). Prior to its recodification in 1996, this regulation was located at 38 C.F.R. § 1780. See 61 Fed. Reg. 21, 965, 21, 968 (May 13, 1996). The parenthetical language was added in 1986 "to more accurately define the eligibility requirements for claims filed for VA payment of unauthorized medical services." 51 Fed. Reg. 8672, 8672 (Mar. 13, 1986).

Originally, section 1728 did not define "emergency treatment," see Pub. L. No. 93-82, Title I, § 106(a), 87 Stat. 179, 183 (Aug. 2, 1973), but Congress eventually assigned it the same meaning as it bore in the later-enacted section 1725. 38 U.S.C. § 1728(c). We turn to that final section now.

3.

Section 1725 was enacted in 1999 and addresses, in depth, the issue of VA's reimbursement for emergency treatments. It defines "emergency treatment" as "medical care or services furnished, in the judgment of the Secretary-"

(A)when Department or other Federal facilities are not feasibly available and an attempt to use them beforehand would not be reasonable;

(B)when such care or services are rendered in a medical emergency of such nature that a prudent layperson reasonably expects that delay in seeking immediate medical attention would be hazardous to life or health; and

(C)until-

(i) such time as the veteran can be transferred safely to a Department facility or other Federal facility and such facility is capable of accepting such transfer; or

(ii) such time as a Department facility or other Federal facility accepts such transfer if-

(I)at the time the veteran could have been transferred safely to a Department facility or other Federal facility, no Department facility or other Federal facility agreed to accept such transfer; and

(II) the non-Department facility in which such medical care or services was furnished made and documented reasonable attempts to transfer the veteran to a Department facility or other Federal facility.

38 U.S.C. 1725(f)(1).

When emergency treatment is at issue, the provision states that the Secretary "shall reimburse a veteran . . . for the reasonable value of emergency treatment furnished the veteran in a non-Department facility" if the veteran is "an active [VA] health-care participant" and is "personally liable" for the emergency treatment. § 1725(a)(1), (b)(1). An active health-care participant is a veteran who is "enrolled in the health care system established under section 1705(a) of title 38 or received VA healthcare under chapter 17 within the 24-month period preceding the emergency treatment.^[2] § 1725(b)(2).

B. Facts

Veteran Paul Van Dermark resides in Thailand. He served in the Navy from June 1963 until May 1967. Following service, he applied for disability compensation and was granted service connection for a right wrist and thumb disability, right shoulder capsulitis, bronchitis, and hemorrhoids. His combined schedular evaluation eventually reached 90% and he was assigned a total disability rating based on individual unemployability. He is not service connected for any heart-related condition.

In May 2016, Mr. Van Dermark started experiencing cardiac symptoms and underwent preliminary testing, which revealed an abdominal aortic aneurism. He contacted VA's FMP on May 5 to request reimbursement for medical bills he had already incurred and to inquire about his entitlement to reimbursement for a planned surgery. On May 14, he was informed that the FMP could not reimburse him because his treatments were not related to a service-connected disability. Mr. Van Dermark went ahead with his planned surgery and was hospitalized at Bangkok Hospital from May 22 to 26, 2016. The following month, VA personnel from the FMP formally denied his claim for reimbursement because the treatment he received was not related to a service-connected disability. When he disagreed, VA issued a Statement of the Case in October 2016 citing 38 U.S.C. § 1724 and its implementing regulation, 38 C.F.R. § 17.35, as the reasons for denial. He appealed to the Board, asserting that he was entitled to reimbursement under 38 U.S.C. § 1728(a)(3).

Meanwhile Mr. Van Dermark had renewed cardiac problems in 2018 and sought VA treatment. He flew to Guam on May 4, 2018, for testing and observation at the United States Naval Hospital. He was...