Wolfe v. McDonough

Decision Date17 March 2022
Docket Number2020-1958
Citation28 F.4th 1348
Parties Amanda Jane WOLFE, Peter Boerschinger, Claimants-Appellees v. Denis MCDONOUGH, Secretary of Veterans Affairs, Respondent-Appellant
CourtU.S. Court of Appeals — Federal Circuit

Sean Christopher Griffin, Sidley Austin LLP, Washington, DC, argued for claimants-appellees. Also represented by Mark Bruce Blocker, Kara L. McCall, Chicago, IL; Renee A. Burbank, Barton Frank Stichman, I, National Veterans Legal Services Program, Washington, DC.

Eric P. Bruskin, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for respondent-appellant. Also represented by Brian M. Boynton, Martin F. Hockey, Jr. ; Susan Blauert, Uduakabasi Henry, Jonathan Krisch, Office of General Counsel, United States Department of Veterans Affairs, Washington, DC.

Melanie L. Bostwick, Orrick, Herrington & Sutcliffe LLP, Washington, DC, for amici curiae The American Legion, Disabled American Veterans, Paralyzed Veterans of America, Veterans of Foreign Wars. Also represented by Benjamin Paul Chagnon; Elizabeth Moulton, Menlo Park, CA.

Jillian Berner, Veterans Legal Support Center and Clinic, School of Law, University of Illinois Chicago, Chicago, IL, for amicus curiae National Law School Veterans Clinic Consortium.

Michael B. Miller, Morrison & Foerster LLP, New York, NY, for amici curiae Erwin Chemerinsky, Heather Elliott, Richard D. Freer, Paul Ryan Gugliuzza, Helen Hershkoff, Andrew Stuart Pollis, Cassandra Burke Robertson, Adam Steinman, Howard M. Wasserman, Adam Zimmerman.

Before Dyk, Reyna, and Stoll, Circuit Judges.

Dyk, Circuit Judge.

This case involves the scope of the Department of Veterans Affairs' ("VA's") reimbursement of the cost of hospital visits to veterans enrolled in the VA health care system. The statute bars reimbursement for "any copayment or similar payment." 38 U.S.C. § 1725(c)(4)(D). The question is whether deductibles and coinsurance are encompassed within the term "similar payments."

The Secretary of the VA ("Secretary") appeals from a decision of the United States Court of Appeals for Veterans Claims ("Veterans Court") granting a petition for a writ of mandamus (1) invalidating a VA regulation prohibiting the reimbursement of deductibles and coinsurance for being within the category of "similar payments," (2) requiring the VA to readjudicate claims denied under the invalidated regulation, and (3) certifying a class of "[a]ll claimants whose claims for reimbursement of emergency medical expenses incurred at non-VA facilities VA has already denied or will deny, in whole or in part, on the ground that the expenses are part of the deductible or coinsurance payments for which the veteran was responsible," J.A. 28.

Because deductibles are excluded from reimbursement under the correct interpretation of the statute and other adequate remedies were available with respect to coinsurance, mandamus was inappropriate. We reverse.

BACKGROUND
I

The VA provides health care to nine million enrolled veterans through its Veterans Health Administration, the largest health care system in the country. Veterans Health Administration , U.S. Dep't of Veterans Affs., https://www.va.gov/health (last visited Feb. 22, 2022). Enrollment in the VA health care system is determined by statute. See 38 U.S.C. § 1705. For those who are enrolled, and subject to certain other criteria, the VA provides free hospital care. See 38 U.S.C. § 1710(a), (e) ; 38 C.F.R. § 17.108(d), (e). Enrolled veterans with other health care coverage, such as private insurance, Medicare, Medicaid, or TRICARE, may choose to use those sources of coverage to supplement their VA health care benefits. VA and Other Health Insurance , U.S. Dep't of Veterans Affs., https://www.va.gov/healthbenefits/resources/publications/hbco/hbco_va_other_insurance.asp (last visited Feb. 22, 2022). In emergencies, enrolled veterans are entitled to obtain medical care at the nearest hospital emergency department and to seek reimbursement from the VA for the cost of treatment, with some exceptions. Emergency Medical Care , U.S. Dep't of Veterans Affs., https://www.va.gov/COMMUNITYCARE/programs/veterans/Emergency_Care.asp (last visited Feb. 22, 2022).

Simple on its face, the implementation of this approach was complex. Before 1999, the VA had limited authority to pay for private, non-VA emergency care for veterans. In general, it could only reimburse for emergency treatment relating to a service-connected condition or disability. 38 U.S.C. §§ 1703(a)(3), 1728 (1999) ; see also H.R. Rep. No. 106–470, at 63 (1999) (Conf. Rep.). Congress expanded the VA's authority in 1999 by adding § 1725 to title 38 of the U.S. Code in the Veterans Millennium Health Care and Benefits Act. Pub. L. No. 106-117, § 111, 113 Stat. 1545, 1553 (1999) (effective May 29, 2000).

Section 1725 as originally enacted directed the VA to reimburse veterans enrolled in the VA healthcare system for "the reasonable value of emergency treatment furnished the veteran in a non-[VA] facility" if they, among other conditions, (1) had "no entitlement to care or services under a health-plan contract" ("the contract provision") and (2) had "no other contractual or legal recourse against a third party that would, in whole or in part, extinguish" liability to the provider ("the third-party provision"). § 1725(a)(1), (b)(3)(B)(C) (1999). These somewhat overlapping limitations reflected Congress's intent to contain "the significant potential cost" of reimbursement and ensure "that VA truly [is] a payer of last resort." H.R. Rep. No. 106-237, at 39 (1999). Congress expected VA to "act aggressively" to protect "scarce VA medical care funds" by "ascertain[ing] before authorizing any payment under this section that a veteran has no medical insurance whatsoever or any other medical coverage" and that "the veteran ... has exhausted all other possible claims and remedies reasonably available against a third party which may be liable for payment of the emergency care." Id. Section 1725 directed the Secretary to promulgate regulations to "establish the maximum amount payable" and "delineate the circumstances under which such payments may be made." § 1725(c)(1)(A)(B).

Under the provisions of the 1999 legislation, veterans with even minimal health insurance coverage, such as through a state-mandated automobile insurance policy, might wind up responsible for essentially the full cost of emergency treatment. H.R. Rep. No. 111-55, at 2–3 (2009). Congress addressed this problem in 2010 by revising § 1725 in the Emergency Care Fairness Act of 2010 ("ECFA"). Pub. L. No. 111-137, § 1, 123 Stat. 3495 (2010) (effective Feb. 1, 2010). The ECFA struck "or in part" from the third-party provision such that reimbursement was prohibited if the veteran had "other contract[ ] or legal recourse against a third party that would, in whole , extinguish" liability to the provider. § 1725(b)(3)(C) (emphasis added). The ECFA also added a new subsection to § 1725(c) with limitations on reimbursement, including a provision providing that "[t]he Secretary may not reimburse a veteran under this section for any copayment or similar payment that the veteran owes the third party or for which the veteran is responsible under a health-plan contract" ("the copayment provision"). § 1725(c)(4)(D).1

The statute does not define "copayment" or "similar payment," § 1725(f), but the parties agree that there are three cost-sharing mechanisms commonly used in the health insurance industry:

• A copayment is a "fixed amount that a patient pays to a healthcare provider according to the terms of the patient's health plan." Copayment , Black's Law Dictionary (11th ed. 2019).
• A deductible is "the portion of the loss to be borne by the insured before the insurer becomes liable for payment." Deductible , Black's Law Dictionary (11th ed. 2019).
"Coinsurance" is "health insurance in which the insured is required to pay a fixed percentage of the cost of medical expenses after the deductible has been paid and the insurer pays the remaining expenses." Coinsurance , Merriam-Webster, https://www.merriamwebster.com/dictionary/coinsurance (last visited Feb. 4, 2022).

After Congress passed the ECFA in 2010, the VA revised its regulations, differentiating between situations involving third-party liability and those involving healthplan contracts despite the seeming overlap between the two. It struck "or in part" from the regulation corresponding to the third-party provision, 38 C.F.R. § 17.1002(g), and added a regulation that the VA "will not reimburse a claimant ... for any deductible, copayment or similar payment that the veteran owes a third party," 38 C.F.R. § 17.1005(f). See Payment or Reimbursement for Emergency Services for Nonservice-Connected Conditions in Non-VA Facilities, 77 Fed. Reg. 23615, 23,615–16, 23,618 (Apr. 20, 2012). However, the VA did not change the contract provision in the regulation, which continued to state that reimbursement required "[t]he veteran has no coverage under a health-plan contract for payment or reimbursement, in whole or in part , for the emergency treatment." 38 C.F.R. § 17.1002(f) (2012) (emphasis added) ("the contract regulation"). The VA concluded that the ECFA did not alter the contract provision and that removing "or in part" from the corresponding regulation "would treat a veteran with some coverage under a health-plan contract in the same manner as one without coverage." Payment or Reimbursement, 77 Fed. Reg. at 23,616.

II

In Staab v. McDonald , 28 Vet. App. 50 (2016), the Veterans Court considered the statute, as amended in 2010 by the ECFA, and the 2012 regulations. There, a veteran incurred emergency expenses at a non-VA hospital and sought reimbursement for the portion not covered by Medicare. Id. at 52. The Board of Veterans' Appeals ("Board") denied his claim as a matter of law under the contract regulation because Medicare covered some, but not all, of the veteran's costs. Id....

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