VA Claims and Appeals Modernization

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 3, 8, 14, 19, 20, and 21

RIN 2900-AQ26

VA Claims and Appeals Modernization

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

The Department of Veterans Affairs (VA) amends its claims adjudication, appeals, and Rules of Practice of the Board of Veterans' Appeals (Board) regulations. In addition, this rule revises VA's regulations with respect to accreditation of attorneys, agents, and Veterans Service Organization (VSO) representatives; the standards of conduct for persons practicing before VA; and the rules governing fees for representation. This rulemaking implements the Veterans Appeals Improvement and Modernization Act of 2017 (AMA), which amended the procedures applicable to administrative review and appeal of VA decisions on claims for benefits, creating a new, modernized review system. Unless otherwise specified in this final rule, VA amends its regulations applicable to all claims processed under the new review system, which generally applies where an initial VA decision on a claim is provided on or after the effective date or where a claimant has elected to opt into the new review system under established procedures. For the reasons set forth in the proposed rule and in this final rule, VA is adopting the proposed rule as final, with minor changes, as explained below.

DATES:

This final rule is effective February 19, 2019.

FOR FURTHER INFORMATION CONTACT:

Veterans Benefits Administration information, parts 3, 8, and 21: Jennifer Williams, Senior Management and Program Analyst, Appeals Management Office, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 530-9124 (this is not a toll-free number). Regulation of legal representatives' information, parts 19 and 20: Rachel Sauter, Counsel for Legislation, Regulations, and Policy, Board of Veterans' Appeals. Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 632-5555 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

On August 10, 2018, VA published in the

Federal Register

(83 FR 39818) a proposed rule to implement Public Law (Pub. L.) 115-55, the AMA. The AMA and these implementing regulations provide much-needed comprehensive reform for the legacy administrative appeals process, to help ensure that claimants receive a timely decision on review where they disagree with a VA claims adjudication. The AMA review procedures and these regulations replace the current VA appeals process with a new review process that makes sense for veterans, their advocates, VA, and stakeholders.

The statutory requirements, which VA implements in these regulations, provide a claimant who is not fully satisfied with the result of any review lane additional options to seek further review while preserving an effective date for benefits based upon the original filing date of the claim. For example, a claimant could go straight from an initial agency of original jurisdiction decision on a claim to an appeal to the Board. If the Board decision was not favorable, the claimant has two further options. If the Board's decision helped the claimant understand the evidence needed to support the claim, then the claimant would have one year to submit new and relevant evidence to the agency of original jurisdiction in a supplemental claim. A claimant in this situation could instead appeal within 120 days of the Board decision to the Court of Appeals for Veterans Claims (CAVC) in accordance with CAVC rules and deadlines. Alternatively, a claimant could seek review of the initial decision by filing a supplemental claim or requesting a higher-level review in the agency of original jurisdiction, again, without any impact on the potential effective date for payment of benefits.

The differentiated lane framework required by statute and implemented in these regulations has many advantages. It provides a streamlined process that allows for early resolution of a claimant's appeal and the lane options allow claimants to tailor the process to meet their individual needs and control their VA experience. It also enhances claimants' rights by preserving the earliest possible effective date for an award of benefits, regardless of the option(s) they choose, as long as the claimant pursues review of a claim in any of the lanes within the established timeframes. By having a higher-level review lane within the claims process and a lane at the Board, both providing for review on only the record considered by the initial claims adjudicator, the new process provides a feedback mechanism for targeted training and improved quality in the agency of original jurisdiction.

To ensure that as many claimants as possible benefit from the streamlined features of the new process, the AMA and these regulations provide opportunities for claimants and appellants in the legacy system to take advantage of the new system. Some claimants who received a decision prior to the effective date of the law and thus had a legacy appeal pending, were able to participate in the new system by way of VA's Rapid Appeals Modernization Program (RAMP). Claimants who receive a Statement of the Case (SOC) or Supplemental Statement of the Case (SSOC) as part of a legacy appeal after the effective date of the law will also have an opportunity to opt-in to the new system.

Most of the regulatory amendments prescribed in this final rule are mandatory to comply with the law. Through careful collaboration with VA, VSOs, and other stakeholders, in enacting the AMA, Congress provided a highly detailed statutory framework for claims and appeals processing. VA is unable to alter amendments that directly implement mandatory statutory provisions. In addition to implementing mandatory requirements, VA prescribes a few interpretive or gap-filling amendments to the regulations, which are not specifically mandated by the AMA, but that VA believes are in line with the law's goals to streamline and modernize the claims and appeals process. These amendments reduce unnecessary regulations, modernize processes, and improve services for claimants.

Interested persons were invited to submit comments to the proposed rule on or before October 9, 2018, and 29 comments were received. Those comments have been addressed according to topic in the discussion below. This final rule contains amendments to parts 3, 8, 14, 19, 20, and 21, as described in detail below.

Part 3—Adjudication

VA amends the regulations in 38 CFR part 3 as described in the section-by-section supplementary information below. These regulations govern the adjudication of claims for VA monetary benefits (

e.g.,

compensation, pension, dependency and indemnity compensation, and burial benefits), which are administered by the VBA. These amendments apply to claims processed in the modernized review system as described in § 3.2400.

A. Comments Concerning § 3.1—Definitions

Public Law 115-55, section 2(a), defines “supplemental claim” as “a claim for benefits under laws administered by the Secretary filed by a

claimant who had previously filed a claim for the same or similar benefits on the same or similar basis.” Although it is possible to read this language as implicating both claims filed as a disagreement with a prior decision, and claims submitted due to a worsening of a condition, this dual interpretation would not be consistent with other sections of the statute. Namely, Public Law 115-55 also revised 38 U.S.C. 5108, which requires the Secretary to “readjudicate” a claim where “new and relevant evidence is presented or secured with respect to a supplemental claim.” When both sections are read together, it becomes clear that the intent of the law was to make supplemental claims only applicable to situations where a claimant disagrees with a previous VA decision and seeks review and readjudication. Accordingly, as noted in VA's proposed regulation, VA proposed to clarify in regulation the definition of supplemental claim. VA added to the definition of “claim” in § 3.1(p) of the proposed rule definitions of “supplemental claim,” “initial claim,” and “claim for increase.”

VA received six comments regarding definitions listed in § 3.1(p). Concerns centered around the definitions of initial claim (§ 3.1(p)(1)), claim for increase (§ 3.1(p)(1)(iii)), claim (§ 3.1(p)(2)), and supplemental claim (§ 3.1(p)(2)). Several comments addressed concerns regarding the use of the term “written communication” in some definitions while other areas of the proposed rule referenced “written or electronic” communication. VA agrees with the need for clarification regarding electronic communication and revises § 3.1(p) to reflect a claim as both a written or electronic communication properly submitted on an application form prescribed by the Secretary.

Several comments raised concerns that a claim for increase was included as a type of initial claim and argued it is more appropriately considered a supplemental claim. VA includes claim for increase in the definition of an initial claim to clarify to claimants that a claim for increase is based on a change or worsening in condition or circumstance since a prior VA decision and not based on disagreement with that decision. Accordingly, VA revises proposed § 3.1(p)(1)(iii) to reflect a claim for increase as a change or worsening in condition or circumstance since a prior VA decision. One comment also expressed concern that “the VA may sometimes be overbroad in requiring supplemental claims where a veteran has not had a decision on a specific issue or disability previously.” VA agrees there may be confusion regarding the definition of a supplemental claim and revised § 3.2501 to clarify that a supplemental claim is based upon a disagreement with a prior VA decision.

VA revises the definition of “initial claim” in § 3.1(p)(1), to provide clarity concerning the term “original claim” in response to comments. Commenters expressed confusion between the terms “original” and “initial” based on dictionary definitions, which treat them interchangeably. VA's revisions to § 3.1(p)(1) explain that an original claim is the first initial claim.

One commenter expressed a belief that the terms “issue” and “claim” are used interchangeably in sections of the proposed rule but defined differently. It is clear from § 3.151(c) that the term “issue” refers to a distinct determination of entitlement to a benefit, such as a determination of entitlement to service-connected disability compensation for a particular disability. A claim is a request for review of one or more issues. If a claim includes only one issue then the terms may appear to be used interchangeably. Accordingly, VA revises § 3.1(p) to include a reference to § 3.151(c), which defines issues within a claim.

B. Comments Concerning § 3.103—Procedural Due Process and Other Rights

VA received eleven comments regarding procedural due process concerns as referenced in § 3.103.

Two commenters expressed concern that the use of the phrase “when applicable” in § 3.103(b)(1) is too broad and open to interpretation. VA agrees that the term is vague and revises § 3.103(b)(1) to refer the reader to subsection (d), which explains the availability of a hearing.

Another commenter expressed concern with the removal of language in § 3.103(c)(2) regarding visual examinations during hearings. These types of visual examinations are obsolete as veterans and VA can now utilize several other methods to add visual examination findings into the record. Claimants may use Disability Benefits Questionnaires (DBQs) that any physician may complete to document visual findings. VA may also assist claimants through the scheduling of contract examinations which support VA's disability evaluation process and make obtaining examinations easier and more efficient by bypassing the requirement to formally schedule one with a VA provider. Accordingly, VA does not make any changes to § 3.103(c)(2) based upon the comment.

Several comments raised concerns regarding § 3.103(c)(2),

Treatment of evidence received after notice of a decision.

The concerns centered around the desire for VA to notify claimants in writing each time VA does not consider evidence received after notice of a decision, when the record is closed. The commenters are correct that VA does not intend to notify a claimant every time the claimant submits evidence during a period when the record is closed. Rather, the initial notice of decision provided to the claimant will explain the review options, the associated evidentiary rules, and the procedures to follow to obtain VA consideration of new evidence. In addition, VA will, in accordance with the AMA and § 3.103(f), provide information to the claimant in the initial decision as to evidence that was considered, and any subsequent review decision, based on a closed record, will inform the claimant generally if VA received evidence that was not considered. Finally, decision notices will provide to claimants instructions for how to obtain or access the actual evidence used in making the decision (the complete record on which the decision was based).

VA takes seriously its obligation to administer its process in a claimant-friendly way, and accordingly provides multiple means for claimants to obtain information on what evidence VA has received and the date of receipt to determine if it was submitted when the evidentiary record was open or closed. Most fundamentally, claimants are able to request a copy of their own claims files. Additionally, accredited representatives are eligible to receive access to the Veterans Benefits Management System, which enables them to see what is in the file at any time. And a claimant can visit the VBA Regional Office to view their claims file in a reading room.

Accordingly, to the extent a claimant is unsure whether a given piece of evidence was considered the claimant can check the review decision to see whether it indicates whether there was any evidence that was not considered. If so, the claimant can check the summary of evidence in the initial decision notice. VA expects this to resolve the matter in most instances. However, to the extent that the claimant needs access to the entire record on which a decision is based, the decision notice will describe that procedure. Finally, whenever the claimant is uncertain, the claimant can submit the evidence in question again as part of a supplemental claim. If this is done within one year, there will be no loss of effective date. If

the evidence was not considered in the prior claim and is relevant, it would be considered in adjudicating the supplemental claim. (As explained in the proposed rule, even if the claimant did not submit with the supplemental claim relevant evidence previously submitted out of time, VA would be obligated to consider it.) The law does not require VA to list evidence not considered because it was received after notice of a decision, or during some other period when the evidentiary record was closed. Before the AMA, 38 U.S.C. 5104 required VA to provide certain information only in cases where VA denied a benefit sought: (1) A statement of reasons for the decision; and (2) a summary of the evidence considered by the Secretary. 38 U.S.C. 5104(b) (2016). In the AMA, Congress directly addressed the information requirements for decision notices in a high level of detail. All decision notices, regardless of whether or not they deny a benefit sought, must now include seven specified data elements. 38 U.S.C. 5104(b)(1)-(7). This includes “a summary of the evidence considered by the Secretary[.]” 38 U.S.C. 5104(b)(2). This extensive list of required data elements does not include identification of evidence not considered. It is clear that Congress directly considered the requirements for decision notices, altered the applicable legal requirements in ways generally favorable to claimants, and declined to add a requirement to identify and discuss evidence not considered.

Beyond the fact that the law does not require VA to provide notice of evidence not considered, VA declines to discretionarily impose such a requirement through regulation. From VA's perspective, the closing of the evidentiary record is one of the foundational features of the AMA, and one of its most valuable in terms of enabling VA, over time, to process claims and appeals more efficiently. Requiring VA to notify claimants each time evidence is submitted out of time or list or summarize such evidence individually in review decisions would dilute much of the administrative value of having a closed record following the initial decision. Providing this notice would require VA personnel to review and identify or summarize (if, for example, the evidence is not dated) late-flowing evidence when preparing the decision notice. Such a procedure would unavoidably require “by hand” review and processing of evidence by VBA adjudicators, similar to the review required for simply considering the evidence for decisional purposes. In this scenario, VA would be spending its limited adjudicative resources reading and processing documents that are not part of the record and cannot be the basis for a decision.

Apart from the work of reading and summarizing extra-record evidence, imposing this requirement would also carry a significant cost in terms of generating procedural complexity. A regulatory requirement that VA identify or summarize certain evidence would, of necessity, need to be enforceable on appeal in order to be meaningful. (Such a notice requirement would technically be distinct from the argument on appeal that certain evidence was excluded from the record in error, which is an appellate argument that is certainly possible under this final rule.) Accordingly, the argument that VA failed to provide legally adequate notice or description of what evidence was not considered would become a feature of the appellate system. This would be problematic for two reasons. First, it invites appellate activity centered on procedure rather than the substance of veterans' claims. Second, and worse, it creates the specter of argument over the proper discussion of non-record evidence. Evidence that is nominally not part of the record of the decision on appeal would necessarily become central to such an appellate argument. At that point, the evidence would, for all intents and purposes, be part of the record, even though the premise of the argument would necessarily be that the evidence was validly excluded.

We acknowledge that proposed § 20.801(b)(3), which we here confirm as final, will require the Board to provide “[a] general statement” that evidence received while the record was closed was not considered. This provision, governing Board practice, is consonant with VA's decision not to impose a requirement on VBA to list or summarize untimely evidence. This provision is necessary to comply with 38 U.S.C. 7104(d)(2), which is specific to Board decisions. That provision only requires a broad statement that untimely evidence was received and not considered, rather than any meaningful engagement with that evidence, such as a listing or summary.

VA recognizes that some individual claimants might prefer that VA either provide notification each time it receives evidence submitted out of time or list such evidence specifically in decision notices. However, in balancing efficiency considerations in line with the expressed goal of Congress to reduce VA backlogs and processing times, VA has chosen the alternative procedures discussed above to provide claimants with information they need to effectively prosecute their claims without prejudice to their ability to have all relevant evidence considered prior to a final adjudication. Accordingly, VA does not make any changes to § 3.103(c)(2) based upon these comments. As the precise procedures for providing such notice may change based on technological systems, as well as other resources, VA will continue to address this matter through internal procedural guidance consistent with the law and regulations.

Multiple commenters recommended that additional information be included in decision notices beyond what is required in § 3.103(f). Suggestions include the compensation rating decision codesheet, information on expected improvement in disability, and full identification of specific evidence not considered (which we discuss above). Current VA procedures require the inclusion of any expected reexaminations due to expected improvement or worsening of a disability consistent with current § 3.327 and, in many instances, allow for the inclusion of the codesheet with compensation rating decision notices. VA has a requirement under § 3.103(f)(7) to explain how to obtain or access evidence used in making the decision. One method authorized representatives may use to access evidence is to request access to the claimant's electronic claims folder. Accordingly, VA does not make any changes to § 3.103(f) based upon these comments.

A commenter noted that the “new § 3.103 does not require VA to describe evidence in its possession that it did not review”, raising a hypothetical situation in which a claimant was treated for conditions at a VA facility the day prior to the decision being rendered on their higher-level review. This is a constructive receipt argument that VA was in possession of the records from the day prior and therefore cannot appropriately adjudicate a higher-level review without those records, while at the same time arguing this is not “new evidence” used in support of a supplemental claim because the records were in general custody of VA at the time.

VA makes minor adjustments to the rule as proposed to clarify the parameters in this area. 38 CFR 3.103(c)(2),

Treatment of evidence received after notice of a decision,

now clearly explains what may be included in the record for adjudication. It states, “The evidentiary record for a claim before the agency of original jurisdiction closes when VA issues notice of a

decision on the claim. The agency of original jurisdiction will not consider, or take any other action on evidence submitted by a claimant, associated with the claims file, or constructively received by VA as described in § 3.103(c)(2)(iii), after notice of decision on a claim, and such evidence will not be considered part of the record at the time of any decision by the agency of original jurisdiction, except” in two specific circumstances relating to the submission of a supplemental or initial claim or identification of a duty to assist error.

Additionally, § 3.103(f)(2) identifies the requirement to provide a summary of the evidence considered in notification of decisions. This provides the claimant a clear understanding of what was considered and is consistent with the definitions of evidence reviewable under a higher-level review or supplemental claim. Under these definitions, the evidence raised in the hypothetical situation would be considered new evidence available to be used by the claimant in a supplemental claim. To the extent the commenter means that evidence created by VA shortly before the record closes but not associated with the claims record or identified to adjudicators in any way should be treated as constructively part of the record pursuant to

Bell

v.

Derwinski,

2 Vet. App. 611 (1992), we note that documents created while the record is closed do not become part of the record by virtue of the doctrine of constructive receipt. At the same time, if a document created while the record was open is identified on direct appeal as having been constructively received at a time when the record was open (

e.g.,

the Board or a higher-level reviewer become aware of a document within the scope of

Bell

), the record can be corrected, including in similar fashion to a duty to assist error. However, in order for a

Bell

error to cause the record to be augmented in this way, the document in question must actually satisfy the law of constructive receipt in the VA context. Case law construing

Bell

makes clear that the mere existence of a record is not sufficient to establish constructive receipt for adjudicative purposes. Rather, VBA adjudicators must have sufficient indication that a given record exists and sufficient information to locate it, even though they do not have actual custody of it, in order to trigger the doctrine of constructive receipt in the VA claims adjudication context.

See Turner

v.

Shulkin,

29 Vet. App. 207, 217-219 (2018). We have explicitly incorporated this concept into the final rule at 38 CFR 3.103(c)(2)(iii). In terms of the level of VBA awareness necessary to trigger

Bell

in this context, we import a familiar standard from the duty to assist context, which is referenced in

Turner. Turner

noted that 38 U.S.C. 5103A(c)(1)(B) requires VA to obtain records of relevant medical treatment or examination of the claimant at VA health care facilities or at VA expense, “if the claimant furnishes information sufficient to locate those records.”

Turner,

29 Vet. App. at 218. There is no reason why the doctrine of constructive receipt should be broader than VA's duty to obtain records for the claim. While the duty to assist does not apply following the closure of the record, it does apply during the initial claim process when any document that could be the basis of a constructive receipt issue would have to be created. Accordingly, we provide in § 3.103(c)(2)(iii) that VBA must have had knowledge of the document in question “through information furnished by the claimant sufficient to locate those records.” Further, we note that to the extent a document potentially within the scope of that provision is discovered after a claim stream has lapsed, the fact that a document was arguably constructively part of the record before adjudicators in the prior decision would not preclude that document as the basis for a supplemental claim if it was not, in fact, considered. A

Bell

error on the part of VA is not a basis to deprive the veteran of his or her right to file a supplemental claim. Accordingly,

Bell

and the ongoing creation of medical treatment records is not a mechanism for preventing the adjudicative record from closing to the extent the law permits and requires it to do so, but at the same time, does not preclude the filing of supplemental claims. These definitions provide a clearer delineation of what is and is not part of the evidentiary record of a particular claim, as compared to the continuous open record of the legacy system. Further, through the decision notice on the initial claim, the claimant is provided a summary of pertinent evidence that was developed as part of VA's duty to assist. When submitting a request for ahigher-level review, the claimant has notice that the evidentiary record will consist of the same information identified in the initial claim decision. Any additional evidence the claimant wishes to be considered would warrant their submission of a supplemental claim request.

C. Comments Concerning § 3.104—Binding Nature of Decisions

VA received eight comments regarding the binding nature of favorable findings. The AMA added a new section, 38 U.S.C. 5104A, providing that any findings favorable to the claimant will be binding on all subsequent adjudicators within VA, unless “clear and convincing evidence” is shown to the contrary to rebut the favorable findings. These comments expressed concern over the lack of definition of “clear and convincing,” as well as the evidentiary standard specified in the law being a lower evidentiary standard than currently exists and less favorable to claimants.

The CAVC in

Fagan

v.

West,

13 Vet. App. 48, 55 (1999), clarified that the “clear and convincing” evidentiary standard of proof is an intermediate standard between preponderance of the evidence and beyond a reasonable doubt. VA notes that the clear and convincing evidence standard is a lesser standard than that required for a Veteran or claimant to correct a VA error that was not in their favor, which requires evidence of a clear and unmistakable error (CUE) (see 38 U.S.C. 5109A(a) and 7111(a)). While 38 U.S.C. 5104A states that VA must meet a “clear and convincing” evidentiary standard prior to overturning a favorable finding, nothing in the statute prohibits VA from administratively adopting a higher evidentiary standard to protect favorable findings on a claimant's behalf.

VA agrees with the commenters, as a matter of policy, regarding the wisdom of setting a higher standard applicable to overturning favorable findings as it is claimant-friendly and will reduce the number of cases where claimants feel VA is adopting an adversarial approach to their claim because VA has overturned a favorable finding. Accordingly, VA revises § 3.104(c) to require clear and unmistakable evidence to rebut a favorable finding. The clear and unmistakable standard applicable to rebuttal is similar to the definition of CUE found in § 3.105(a)(1)(i) and 38 CFR 20.1403(a) that applies to finally adjudicated issues. However, application of the clear and unmistakable standard for rebuttal of a favorable finding is legally distinct because, for instance, it is limited to the scope of the favorable finding itself and does not require a further determination that the outcome of the benefit adjudication would undebatably change. The clear and unmistakable rebuttal standard may be satisfied by a finding that the evidentiary record as a

whole completely lacks any plausible support for the favorable finding.

VA discussed in the proposed rule that no changes are necessary to § 3.105(c) through (h), which govern severance of service connection and reduction in evaluations, and that the standards and procedures set forth in those paragraphs will continue to apply without change. VA received no comments on this issue, and VA's position in this regard has not changed as a result of the choice in the final rule to apply the higher CUE standard to rebuttal of favorable findings.

D. Comments Concerning § 3.105—Revision of Decisions

Two comments expressed concern with the language in proposed § 3.105(a)(1)(iv), entitled

Change in interpretation,

providing that a clear and unmistakable error does not include the otherwise correct application of a statute or regulation where, subsequent to the decision being challenged, there has been a change in the interpretation of the statute or regulation. As explained in the preamble to the proposed rule, this revision to § 3.105(a) is for the purpose of conforming the regulations applicable to CUE in finally adjudicated decisions of the agency of original jurisdiction with existing regulations applicable to CUE in finally adjudicated Board decisions. Accordingly, § 3.105(a)(1)(iv) tracks the language in existing 38 CFR 20.1403(e).

VA does not agree with the commenters' assertion that these provisions are contrary to established caselaw. The Federal Circuit explicitly rejected the premise of retroactive application of judicial interpretations of law in the CUE context in

Jordan

v.

Nicholson,

401 F.3d 1296 (Fed. Cir. 2005), and

Disabled Am. Veterans (DAV)

v.

Gober,

234 F.3d 682, 698 (Fed. Cir. 2000). In

DAV,

the Federal Circuit specifically upheld 38 CFR 20.1403(e).

Id.

In

Jordan,

the court explained that “[t]he Supreme Court has repeatedly denied attempts to reopen final decisions in the face of new judicial pronouncements or decisions.”

Jordan,

401 F.3d at 1299;

see Reynoldsville Casket Co.

v.

Hyde,

514 U.S. 749, 758 (1995) (“New legal principles, even when applied retroactively, do not apply to cases already closed.”).

VA does not agree with the argument by commenters that these cases were overruled by

Patrick

v.

Shinseki,

668 F.3d 1325 (Fed. Cir. 2011), which was a decision regarding whether a prior position of the government was substantially justified in assessing whether an award of attorney fees was due. Further, to the extent there is any irreconcilable tension between

DAV

and

Jordan

on the one hand and

Patrick

on the other, it is well-established that the earlier decisions control for precedential purposes.

Newell Companies, Inc.

v.

Kenney Mfg. Co.,

864 F.2d 757, 765 (Fed. Cir. 1988) (“Where there is a direct conflict the precedential decision is the first.”). Similarly, it is not possible for one panel of the Federal Circuit Court to have directly overruled a prior panel.

Sacco

v.

Dep't of Justice,

317 F.3d 1384, 1386 (Fed. Cir. 2003) (“[a] panel of [the Federal Circuit] is bound by prior precedential decisions unless and until overturned

en banc.”

). VA therefore makes no change to the regulation based on the comments.

One of these commenters recommends the creation of a form specifically for use in applying for review of a CUE. VA agrees there is merit in this recommendation, will review possible options, and may decide to implement a form for this specific use, consistent with the Paperwork Reduction Act. However, the current process for claiming and contesting a CUE should be followed in the absence of such a form. Should VA determine such a form is not necessary, the current process will remain in place.

E. Comments Concerning § 3.151—Claims for Disability Benefits

The AMA added 38 U.S.C. 5104C, which outlines the available review options following a decision by the agency of original jurisdiction. VA proposed to add § 3.2500 and revise § 3.151 consistent with the statute to provide that a claimant may request one of the three review options under § 3.2500 (higher-level review, supplemental claim, or appeal to the Board) for each issue decided by VA, consistent with 38 U.S.C. 5104C. A claimant would not be limited to choosing the same review option for each issue for a decision that adjudicated multiple issues.

One commenter believed that the terms “issue” and “claim” are used interchangeably in sections of the proposed rule but defined differently. It is clear from § 3.151(c) that the term “issue” refers to a distinct determination of entitlement to a benefit, such as a determination of entitlement to service-connected disability compensation for a particular disability. A “claim” is a request for review of one or more issues. If a claim includes only one issue then the terms may appear to be used interchangeably. VA agrees with the commenter's suggestion that clarification is necessary and revised § 3.1(p) to include a reference to § 3.151(c), which defines issues within a claim.

F. Comments Concerning § 3.155—How To File a Claim

While the AMA does not specifically address how to file a claim, or the concept of intent to file as it relates to supplemental claims, it is necessary for VA to create a framework for this process. Currently, 38 U.S.C. 501(a) and 5104C(a)(2)(D) place the authority to develop policy in this area on the Secretary.

One comment expressed concern that § 3.155(b),

Intent to file,

does not apply to supplemental claims and recommends recision of this limitation. However, 38 U.S.C. 5110 of the new statutory framework provides that a claimant can maintain the potential effective date of a potential benefits award by submitting a request for review under any of the three new lanes within one year of the date of the decision with which the claimant disagrees. Consistent with this requirement, the intent to file provisions of § 3.155(b) do not apply to supplemental claims because the statute prescribes a one-year filing period in order to protect the effective date for payment of benefits. The commenters recommendation would allow for the submission of a supplemental claim beyond the one-year period. For these reasons, VA will not make any changes to § 3.155 based on the commenter's recommendation.

G. Comments Concerning § 3.156—New Evidence

One commenter expressed concern with the definition of new evidence meaning evidence not yet “submitted to” VA and recommended clarification that new evidence is evidence not yet “considered by” VA. The commenter suggested this change to ensure that evidence qualifies as “new” for purposes of a supplemental claim, where that evidence was associated with the claims file when the record was closed and therefore was not previously considered by a VA adjudicator. VA agrees that clarification along these lines is necessary but has revised the regulatory language in different manner. Instead of the change recommended by the commentator, VA has replaced “not previously submitted to agency adjudicators” in the definition of new evidence with “not previously part of the actual record before agency adjudicators.” This change will accomplish the same goal, with the additional benefit, through use of the phrase “actual record,” of clarifying that new evidence may include evidence

deemed constructively received as of a date falling within a period when the record was open, if that evidence had never been part of the record on which a prior adjudication of the issue in question was based.

Other commenters disagreed with the change in title for § 3.156(b), from “

Pending claim”

to “

Pending legacy claims not under the modernized review system,

” resulting in the non-applicability of current § 3.156(b) in the modernized system. The commenter asserted that VA had not provided a sufficient explanation for this choice.

Section 3.156(b) provides generally that new and material evidence received while a claim is pending before VA must be considered as filed in connection with the pending claim, including evidence received after an initial decision is rendered and during the period available to file an appeal. One practical effect of this provision is that qualifying evidence received during the appeal period automatically requires VA to readjudicate the claim and issue a new decision. Such a requirement would be inconsistent with the structure of the new system. First, new 38 U.S.C. 5104B(d) and revised 38 U.S.C. 7113 mandate specific periods when the record is closed to new evidence, including during the period following an initial VA decision. Second, new 38 U.S.C. 5104C and revised 38 U.S.C. 5108 require a claimant who seeks VA readjudication based on new and relevant evidence to either file a supplemental claim with the agency of original jurisdiction or file a Notice of Disagreement and select a Board docket allowing the submission of new evidence. Defining and limiting the avenues available to a claimant for submission of new evidence during the claim stream is a primary feature of the AMA, which was designed, in part, to “streamline VA's appeal process” and “help ensure that the process is both timely and fair.” H. Rep. No. 115-135 at 5 (2017). Third, new 38 U.S.C. 5104C provides claimants with a choice of review options following receipt of an adverse initial VA decision—file for a higher-level review within the Veterans Benefits Administration (VBA), file a supplemental claim with new and relevant evidence for readjudication by the VBA, or file a notice of appeal to the Board. If VA were to automatically place the claim on a track for readjudication by the VBA upon receipt of new evidence, that action would effectively preempt the claimant's choice.

Therefore, because § 3.156(b) requires automatic readjudication upon the receipt of new evidence during the one-year appeal period, it is clearly inconsistent with the statutory design of the new system. Nevertheless, excluding § 3.156(b) from the regulations governing new system claims does not adversely impact a claimant's right to obtain a VA readjudication on new and relevant evidence. It simply means that claimants must submit such evidence though the channels established by the AMA. Furthermore, automatic readjudication of claims is not mandated by 38 U.S.C. 5103, even though the implementing regulation for that provision, § 3.159(b), provides for automatic readjudication of legacy claims upon VA receipt during the appeal period of new evidence substantiating the claim. 38 U.S.C. 5103(a)(1) requires VA to provide claimants, prior to an initial decision, with notice of information and evidence necessary to substantiate a claim. Section 5103(b)(1) requires the claimant to provide such evidence within one year of the date of the notice, but states in paragraph (b)(3) that VA is not prohibited from making the initial decision on a claim prior to the expiration of the one year. Consistent with these provisions, VA's implementing regulations for legacy claims provide that if a claimant does not respond to the notice within 30 days, VA may decide the claim prior to the expiration of the one-year period.

See

38 CFR 3.159(b)(1). If VA does so and the claimant subsequently provides information or evidence substantiating the claim before the end of the one-year period, the regulations provide that “VA must readjudicate the claim.”

Id.

However, the regulatory procedure of automatically readjudicating the claim in these circumstances was not required by section 5103. Rather, when the key features of current 38 U.S.C. 5103 were enacted in 2000 and 2003 (in the Veterans Claims Assistance Act of 2000 (VCAA) and the Veterans Benefts Improvement Act of 2003 (VBIA of 2003), VA had a long-standing practice, as set forth in § 3.156(b), of automatically readjudicating a claim upon the receipt of additional evidence from a claimant—not just within the year following issuance of the 5103(a) notice, but within the longer one-year period beginning with the issuance of the initial decision. Following enactment of the VCAA, VA indicated that it would simply chose to maintain this practice. 66 FR 45,620, 45623 (Aug. 29, 2001) (final rule). VA viewed the essence of 5103(b) not as requiring automatic readjudication, but as “essentially an effective date provision governing the earliest date from which benefits may be paid if a claimant submits requested information and evidence.”

Id.

VA recognized that the longer period for submission of new evidence provided in § 3.156(b) might be in tension with the bar to awarding benefits in section 5103(b)(1) where supporting evidence was not received within a year of the VA notice,

id.,

but that bar was removed in the VBIA of 2003 and Congress substituted the requirement that the substantiating evidence “must be received by the Secretary within one year of the notice date.” 149 Cong Rec H 11,705, (Nov. 20, 2003). At the same time, Congress added section 5103(b)(3), providing that VA is not prohibited from adjudicating a claim prior to the expiration of the one-year period following section 5103 notice. Congress explained, consistent with the view that section 5103(b) was essentially an effective date preservation provision, that the statutory changes were designed to promote the streamlined adjudication of claims, while ensuring that claimants had two essential rights: (1) The opportunity, following an initial decision, to submit substantiating information or evidence for VA readjudication within the one-year period, and (2) in such cases, maintenance of the effective date associated with the filing of the claim. 108 S. Rpt. 169 at 15 (“In such cases, the one-year time period would still enable a claimant to submit the requested information or evidence and if benefits are granted on readjudication, assign an effective date of award as if VA had not made the initial decision.”);

see also

149 Cong Rec H 11,705, 11,720 (Nov. 20, 2003) (Explanatory Statement of the House and Senate Committees, indicating that the House accepted the provisions from the Senate Bill in this regard).

The new system under the AMA affords claimants these essential rights, as claimants are entitled to a VA readjudication based on new and relevant evidence submitted within the one-year appeal period, while their effective date is protected. Rather than providing for an automatic readjudication, however, claimants must submit the new evidence in connection with a choice of review options. The claimant may file either a supplemental claim pursuant to § 3.2501 or a Notice of Disagreement with the Board indicating selection of a docket allowing for the submission of additional evidence. If either filing is completed within the one-year period under the AMA to maintain continuous pursuit of the claim (generally one year from the date of issuance of the initial decision), the claimant will not lose the

effective date associated with the filing of the claim. The availability of readjudication based on new evidence under the AMA therefore fulfils the essential purpose of section 5103(b) as an effective date provision governing the earliest date from which benefits may be paid if a claimant submits requested information and evidence following an initial adjudication.

Nothing in 38 U.S.C. 5103 or caselaw interpreting it requires VA to automatically readjudicate a claim or precludes orderly procedural requirements for the submission of new evidence following an initial decision. Similarly, there is no indication in the relevant legislative history that Congress understood itself to be creating such a requirement. Therefore, the AMA is not inconsistent with section 5103(b) and section 5103 does not require VA to create a special exception to the claim processing rules set forth in the new law.

To the extent that section 5103(b) could be viewed as potentially conflicting with the AMA by providing an unrestricted right to submit evidence and receive readjudication for up to one year following the VCAA notice, notwithstanding the timing of any intervening VA decision, it would be VA's duty to resolve the conflict for operational purposes. Therefore, regardless of whether one adopts the view that section 5103(b) provides such a right, VA interprets section 5103(b) and the AMA together to provide that evidence may be submitted in the one-year period established by section 5103(b), including following a VA decision, but must be submitted through the channels provided in the AMA when VA has issued an initial decision. VA believes that allowing submission of new evidence only through the channels provided in the AMA gives the maximum possible effect to both statutory provisions bearing on the issue and safeguards a claimant's essential statutory rights. Further, as a matter of policy, creating a year-long exception to the structure of the AMA would introduce complexity and confusion to the new claims processing rules, both for VA adjudicators and claimants, and would substantially undermine the goal of the AMA to streamline the VA appeals system and allow VA to resolve appeals more quickly.

Consistent with this discussion, VA eliminates § 3.156(b) for modernized system claims and makes conforming amendments to § 3.159, as discussed below, to require that new and relevant evidence, to the extent that it is submitted following a VA decision but within the year established in section 5103(b), must be submitted to VA through the channels established by the new law.

H. Comments Concerning § 3.159—Department of Veterans Affairs Assistance in Developing Claims

The definition of a substantially complete application in 3.159 has been amended to add the requirement that a supplemental claim application include or identify potentially new evidence and that a higher-level review request identify the date of the decision for which review is sought. VA's duty to assist is reinstated when a substantially complete initial claim or supplemental claim is filed or when a claim is returned to correct a “duty to assist” error in a prior decision as required by 38 U.S.C 5103A(f), as amended by the AMA.

One commenter is concerned with the term “potentially new evidence” as used in §§ 3.159(a)(3)(vii) and in 3.160(a)(6). In this context, “potentially new evidence” references evidence that may be new and relevant to the claim, thereby providing some potential basis for a supplemental claim. As adjudicated in the supplemental claim process, evidence submitted or identified by a claimant may be found to be duplicative, not relevant, or otherwise not new. If this is the case, the adjudicator then must issue a decision indicating that there is not sufficient evidence to readjudicate the claim. If the evidence is found to be new and relevant, the claim must be readjudicated. This identification of “potentially new evidence” is consistent with § 3.2501. For the above reasons, VA make no changes to § 3.159 based upon the comment.

However, VA is making technical amendments to § 3.159 in the final rule necessary to conform with the procedural requirements of the AMA. Specifically, paragraph (b)(4) is added and paragraph (b)(1) is amended to clarify, consistent with new section 5104C, that submission of new evidence following an initial VA decision must be accomplished either by filing a supplemental claim on a form prescribed by the Secretary or by filing a Notice of Disagreement with the Board on a form prescribed by the Secretary and selecting a review option allowing for the submission of new evidence. As explained above in the prior section, VA views these amendments as consistent with section 5103.

I. Comments Concerning § 3.160—Status of Claims

While the AMA does not specifically address status of claims, the law did, however, replace “a claim for reopening a prior decision on a claim, or a claim for increase of benefits” with “supplemental claim” in section 5103(a). Further, section 5104C(a)(2)(D) places the authority to develop policy in this area on the Secretary.

Claimants may request review of VA's decision by submitting a supplemental claim after a decision by the agency of original jurisdiction, the Board, or the CAVC. VA proposed revising § 3.160(e) to reflect the requirement that as of the applicability date of the new law, VA will no longer accept requests to “reopen” claims and a claimant must file a supplemental claim under § 3.2501 to seek review of a finally adjudicated claim for a previously disallowed benefit.

One commenter contends that those who have filed their claims in the legacy system have the right to have those claims adjudicated in the legacy system and VA cannot force them into the modernized system outside of the statutorily prescribed opt-in periods citing that the courts have held a claimant has the right to demand the benefit of the laws in existence at the time the claim was filed and any new laws that come into existence during that claim's pendency that are more favorable to the claimant, absent a specific indication that the change in law was intended to be retroactive. VA agrees with the commenter in part; however, VA did not propose to apply a new law that is less advantageous to the claimant. By requiring the filing of a supplemental claim, VA will no longer require claimants to identify new and material evidence to reopen a finally adjudicated claim. VA will now allow the submission of evidence that is “new and relevant”, which Congress has indicated is a lesser standard and reduces the claimant's burden. In addition, this change in filing requirement does not change VA's review of the claim and application of the laws in effect at the time the claim was originally decided when readjudicating the claim. What VA intends, by allowing claimants with legacy claims to file under the supplemental claim framework, is to reduce claimants' filing burden while still maintaining all requirements for review of the decision based on all applicable laws and regulations whether in existence at the time of prior decision or now. For these reasons, no changes are made based on this comment.

J. Comments Concerning § 3.328—Independent Medical Opinions

The AMA repealed 38 U.S.C. 7109, which authorized the Board to obtain

independent medical opinions (IMOs). This repeal removed the ability for the Board to request IMOs. Under 38 U.S.C. 5103A(f)(2) and 5109(d), as added by the AMA, the Board will, when deemed necessary, direct the agency of original jurisdiction to obtain an IMO. VA proposed to amend § 3.328 to include a requirement that VBA process IMO instructions received from the Board.

One commenter requested clarification on the definition of “director of the Service” in § 3.328(c). Previous language referenced approval to be “granted only upon a determination by the Compensation Service or the Pension and Fiduciary Service”. The change to “director of the Service” in § 3.328(c)(1)(i) is necessary because the modernized system affects all VA administrations and is not limited to the Veterans Benefits Administration's Compensation Service and Pension and Fiduciary Service. To address the commenter's concern, VA is adding language to clarify the meaning of “director of the Service”.

Another commenter requested clarity on the use of the word “obscurity” and the phrase “such controversy in the medical community at large” in proposed § 3.328(c)(1)(i) and recommended a revision to reflect the language of the statute. VA agrees that the regulation should track the language of the statute and revised § 3.328(c)(1)(i) accordingly.

K. Comments Concerning § 3.2400—Applicability of Modernized Review System

The AMA provides direction on the applicability of the modernized review system. Accordingly, § 3.2400 defines which claims are processed under the modernized review system and which clams are processed under the legacy appeals system. § 3.2400 also clarifies that the new review system will generally apply to initial decisions provided on or after the effective date denying requests to revise a decision by the agency of original jurisdiction based on CUE.

One commenter interpreted proposed § 3.2400, specifically the provision proscribing supplemental claims based upon CUE, as somehow limiting CUE claims generally. However, § 3.2400 clarifies that the new review system will generally apply to initial decisions issued on or after the effective date of this final rule, to include decisions denying requests to revise a decision by the agency of original jurisdiction based upon CUE. Although such requests are not “claims” subject to the AMA because the requester is not pursuing a claim for benefits pursuant to part II or III of Title 38 of the U.S. Code,

Livesay

v.

Principi,

15 Vet. App. 165, 178-179 (2001), it is VA's policy to allow the requestor to elect review of such decisions in the higher-level review lane or through an appeal to the Board. Revision of a decision based upon CUE cannot be requested in a supplemental claim because CUE must be based upon the facts and law that existed at the time of the prior decision, not new and relevant evidence. For these reasons, VA does not make any changes based upon the comment.

Another comment expressed concern that character of discharge determinations are not expressly addressed in § 3.2400. While character of discharge determinations could be reviewed under the modernized review process, the AMA does not specifically implicate or change any existing law regarding character of discharge determinations. Accordingly, no changes are made based on this comment.

L. Comments Concerning § 3.2500—Review of Decisions

In the legacy appeals process, claimants who are dissatisfied with the initial decision on their claim are given only one avenue to seek review of that decision. The new system created by the AMA allows claimants to choose from several different review options. Congress added 38 U.S.C. 5104C to provide claimants with streamlined, early resolution options within the agency of original jurisdiction or in an appeal directly to the Board. VA proposed to add § 3.2500 to implement the new decision review options and set forth the rules that apply to those options under section 5104C. In line with the statutory requirements, VA proposed to allow a claimant to file for one of the three review options upon receipt of a decision by the agency of original jurisdiction on an initial claim. Under § 3.2500(b), a claimant will be able to elect a different review option for each issue adjudicated in the decision. It is clear from § 3.151(c) that the term “issue” refers to a distinct determination of entitlement to a benefit, such as a determination of entitlement to service-connected disability compensation for a particular disability. An “issue” is distinct from a “claim” in that a claim may contain one or more issues.

Several commenters expressed concern over § 3.2500(b), which provides that a claimant may not elect to have the same issue reviewed concurrently under different review options, consistent with section 5104C(a)(2)(A). Some of these comments were specific to the concurrent election of a different review lane while an appeal is simultaneously being reviewed by a federal court. In general, it is inefficient and raises potential conflicts for the same issue to be reviewed concurrently by two different processes (

e.g.,

concurrent review in multiple review lanes or in a review lane and at a court). These different review lanes may come to different conclusions. This final rule establishes a process for a potentially different conclusion in a lane than in a previous lane. It is inefficient and confusing for those conclusions to be reached separate from each other without the benefit of the other review's conclusions. The appropriate method for a claimant to seek a different conclusion is to allow for a decision to be made, then seek another appropriate review option to address any additional evidence, difference of opinion, or perceived error in the prior conclusion. VA also notes that concurrent review of a matter by a lower level review lane and a federal court is prevented as a matter of law, due to VA's lack of jurisdiction to review a matter pending before a higher-level authority. Accordingly, no changes are made to § 3.2500(b) based on these comments.

One commenter expressed a belief that the proposed rule limits the options for a claimant to appeal downstream issues to reviewing them all in a single lane. The example offered by the commenter was a case in which the Board grants service connection for a left knee condition, but the claimant disagrees with the effective date and percentage of disability assigned by the Board, and the claimant must choose one lane for adjudication for each of these issues, even though the effective date issue might be better resolved in a higher-level review and the evaluation might be better resolved in a supplemental claim. The proposed rule did not specifically address downstream issues, which are those that necessarily arise from a decision on one element of a claim. Ratings and effective dates, using the commenter's example, are separate issues that may arise from a Board grant of service connection.

VA recognizes that a claimant might sometimes want to seek review of each downstream issue in a different lane. However, as VA discussed in the preamble to the proposed rule, allowing a claim to be splintered into several pieces for review, each potentially subject to different evidentiary rules and timelines, would render the new review system administratively unworkable, risk self-contradictory decision-making by VA, and undermine Congressional

intent to streamline the review process and reduce adjudication times. Although problems would not necessarily arise in every instance, from the standpoint of administering an entire system that produces timely adjudications for all claimants, VA must attempt to achieve a balance between more flexibility for individual claimants and administrative efficiency that benefits all veterans. Based on extensive experience administering a claims adjudication system, and considering that one of the express goals of the AMA is to improve the effciency of VA claims and appeals processing and reduce overall wait times, VA will not allow claimants to choose different review lanes for downstream issues. Rather, each separate benefit entitlement sought by a claimant is considered an issue as defined in § 3.351(c) and cannot be split into different review lanes for purposes of admistrative review. VA makes no regulatory changes based on the comment.

Some commenters suggested that the regulatory provision indicating review options following a Board decision should include reference to the option to file a notice of appeal with the U.S. Court of Appeals for Veterans Claims (CAVC). VA agrees and revises § 3.2500(c)(3) accordingly. Other commenters suggested that proposed § 3.2500(c)(4) should track the statutory language providing that the one-year period for continuous pursuit begins upon issuance of a CAVC decision, rather than a CAVC judgment. VA agrees and revises the language in § 3.2500(c)(4) accordingly.

Proposed § 3.2500(d) implements section 5104C(a)(2), providing that the Secretary may, as the Secretary considers appropriate, implement a policy for claimants to switch between the different review options. A claimant or the claimant's duly appointed representative may, for example, wish to withdraw a request for higher-level review or a supplemental claim at any time prior to VA issuing notice of decision. VA proposed in § 3.2500(d) that a claimant may, if the withdrawal takes place within the one-year period following notice of the decision being reviewed, timely elect another review option to continuously pursue the claim and preserve the potential effective date for payment of benefits.

Two commenters expressed concern that section 5104C(a)(2) does not impose a time limit on selecting additional review options upon withdrawal. However, section 5104C(a)(2)(D) places the discretion to develop policy in this area with the Secretary of Veterans Affairs. Under the AMA (sections 5104B, 5104C, 5110, and 7105), and in order to ensure efficiency, consistency, and timeliness, option election periods are consistently one year from the date of the decision with which the claimant disagrees. A withdrawal and election of a new option must necessarily also be based on the date of that decision. For example, a claimant receives an unfavorable decision and requests a higher-level review. Sometime during the year following the claim decision, but before the higher-level review request has been adjudicated, the claimant decides to change to the supplemental claim lane. The supplemental claim must be filed within that same year from the last decision date. As long as a claimant submits a supplemental claim within the same one-year period that follows the relevant decision, VA will consider this to be a continuously pursued claim and continue to base the effective date of an award of benefits on the filing date of the initial claim. This benefits the claimant by ensuring there are clearer periods of time associated with processing an action and definitive decision points in the process on which to better determine if further action is desired while protecting the effective date. Accordingly, no changes are made to § 3.2500 based on these comments.

Concern was expressed regarding lane changes after the one-year period described above, but before a decision review request has been adjudicated. VA understands the concern regarding withdrawing from one lane in favor of another, particularly if the one-year period has expired. Accordingly, VA will consider requests to extend the one-year period for claimants in one review lane to switch to the supplemental claim lane through the above-described procedure without loss of the current effective date. Such requests will be considered on a case-by-case basis for good cause shown under § 3.109(b). Section 3.109(b) generally allows for requests to extend time limits within which claimants are required to act based on good cause, and allows such requests to be made after the relevant time period has expired subject to specified procedural requirements. The only lane into which a claimant may switch after the one-year period has expired is the supplemental claim lane based on new and relevant evidence, regardless of whether a good cause exception is allowed for purposes of maintaining continuous pursuit of the claim.

VA makes changes in § 3.2500(e) in accordance with the above discussion in response to the comment.

VA also makes technical changes to § 3.2500(d), including adding the requirement that withdrawal of a supplemental claim or a request for a higher-level review must be in writing or through electronic submission in a manner prescribed by the Secretary and must be filed with the agency of original jurisdiction. These changes are required for orderly administrative processing and to provide useful information to claimants.

M. Comments Concerning § 3.2501—Supplemental Claims

VA received multiple comments requesting clarification about electronic submissions in § 3.2501. These comments correctly identify that § 3.2501 states that applications may be made “in writing” and says nothing about electronic submissions. VA agrees on the need for clarification regarding electronic submissions. Accordingly, VA revises § 3.2501 to clarify that a claimant or their authorized representative may submit supplemental claims in writing or electronically, consistent with § 3.160(a). Additionally, clarity is added regarding new and relevant evidence that may be in custody of the VA when reasonably identified by the claimant consistent with revisions in § 3.103(c)(2). The definition of new and relevant evidence in § 3.2501(a)(1) is revised in a similar manner to the revision of § 3.156 regarding evidence not previously “considered by” agency adjudicators.

N. Comments Concerning § 3.2502—Returns by Higher-Level Adjudicator or Remand by the Board of Veterans' Appeals

Several commenters expressed confusion over the inclusion of the term “adjudication activity.” VA agrees that our use of this term in the proposed rule was confusing. Accordingly, VA revises § 3.2502 to use the term “agency of original jurisdiction” throughout the final rule. Similarly, commenters requested further clarity on what it means to “take immediate action to expedite readjudication.” The AMA amended 38 U.S.C. 5109B to state, “The Secretary shall take such actions as may be necessary to provide for the expeditious treatment by the Veterans Benefits Administration of any claim that is returned by a higher-level adjudicator under section 5104B of this title or remanded by the Board of Veterans' Appeals.” VA agrees that clarification is necessary and revises § 3.2502 to more closely mirror the statutory language. The statute does not further define what is meant by

“expeditious,” leaving timely treatment of claims to the Secretary. Clearly, Congress intended that VA would process these claims as expeditiously as possible depending upon available resources. VA will similarly not further define “expeditious” in the rule to provide the Secretary the discretion to direct expeditious processing of actions through allocation of available resources, appropriate prioritization of workload, and issuance of procedures.

O. Comments Concerning § 3.2601—Higher-Level Review

The higher-level review consists of a closed evidentiary record and does not allow for the submission of new evidence or a hearing. While the closed evidentiary record does not allow for submission of new evidence, VA proposes to provide claimants and/or their representatives with an opportunity to point out any specific errors in the case as part of the higher-level review. The sole purpose of an informal conference is to provide a claimant or his or her representative with an opportunity to talk with the higher-level adjudicator so that the claimant and/or his or her authorized representative can identify errors of fact or law in the prior decision. To comply with the statutory requirement of a closed evidentiary record, VA would not allow claimants or representatives to supplement the evidentiary record during the informal conference through the submission of new evidence or introduction of facts not present at the time of the prior decision.

Several commenters expressed concern over the term “good cause” in § 3.2601(e) as it relates to VA's ability to conduct the higher-level review at the office which rendered the initial decision when desired by the claimant. VA agrees that clarity is needed. Accordingly, language is added for clarification regarding situations in which the VA may not be able to conduct the higher-level review at the office which rendered the initial decision.

P. Comments Concerning General Timeliness

VA received several comments recommending timelines and goals related to timeliness be included in the rule. VA is committed to the purpose of appeals modernization, which is to provide fair, efficient, and more timely resolution of cases in which a claimant disagrees with a VA decision. Though VA intends to maintain a 125-day average goal for completion of higher-level reviews and supplemental claims, the statute does not require a specific goal and the Secretary must retain the authority and responsibility to monitor and prioritize workload, allocate resources appropriately, and establish appropriate procedures to best meet priorities established by any given change in administration or policy. Regulating a specific goal eliminates the judgement and decision-making authority of the Secretary and reduces the ability to adapt to change appropriately. Goals and timelines for timely completion of VA processes will be established and monitored through VA procedures and policy. For these reasons, no changes are made based on these comments.

Q. Comments Outside the Scope of the Rule

One commenter suggested using non-VA staff, physicians, or case managers at non-VA facilities to be trained in the claims and appeals process in order to fulfill the duty to assist responsibility, stating this would shorten the claims and appeals process. This comment is outside the scope of the proposed rule because it relates to the specific methods in which VA accomplishes the training and management of the law and regulations. Therefore, no change is made based on this comment.

Another comment concerned denial rates under the Rapid Appeals Modernization Program (RAMP). This comment is outside the scope of the proposed rule, therefore, no change is made based on this comment.

Part 8—National Life Insurance Program

Based on comments received relative to part 3, language in § 8.30 is adjusted to be standardized with the language used in Part 3 in reference to favorable findings, supplemental claims, and higher-level reviews.

Part 14—Legal Services, General Counsel, and Miscellaneous Claims

For the reasons set forth in the proposed rule and in this final rule, VA is adopting the proposed amendments to 38 CFR part 14 as final, with minor changes, as explained in the section-by-section supplementary information below. These regulations govern recognition of veterans service organizations (VSO); accreditation of attorneys, agents, and VSO representatives; representation of claimants before VA, including the rules of conduct applicable while providing claims assistance; and fees charged by attorneys and agents for representation.

R. Comment Concerning § 14.631—Powers of Attorney; Disclosure of Claimant Information

VA proposed only one change to current § 14.631, to update a reference in paragraph (c) from 38 CFR 20.608 to 38 CFR 20.6 to reflect proposed revisions to the Board of Veterans' Appeals' (Board) Rules of Practice. Nevertheless, VA received one comment, from a VA-recognized VSO, asking VA to clarify how claimants may change representation and what their “continuing obligations” might be, and specifically asking for clarification as to how a claimant would change representation from an attorney to a veterans service organization. Although the commenter asked this question in regard to the organization's clients, the comment pertains to other scenarios as well, including when a claimant changes representation from one attorney or agent to another attorney or agent or from an attorney or agent to proceeding without representation.

As a starting point, unless an appeal is before the Board, the claimant may discharge the attorney or agent at any time and for any reason. A claimant may do so by informing VA of the revocation or by filing a new power of attorney. Attorneys, agents, and VSOs are also permitted to withdraw from representation while the case is before the agency of original jurisdiction (AOJ) so long as the withdrawal would not adversely impact the claimant's interests or if there is good cause for the withdrawal such as if the claimant pursues a course of action that the representative believes to be fraudulent and is being furthered through the representative's representation on the claim. Current § 14.631 identifies the effect of withdrawal from representation and the effect of a revocation of a power of attorney. Withdrawal before the Board, proposed § 20.6, sets forth a different procedure and, in some circumstances, a higher standard that must be met before a representative is permitted to withdraw. Upon withdrawing from representation, the representative must generally return all of the claimant's property to the claimant.

Under § 14.631(f)(1), receipt of a new power of attorney by VA generally revokes existing powers of attorney. Under § 14.631(f)(2), however, an agent or attorney may limit the scope of his or her representation to a particular claim by describing the limitation on VA Form 21-22a. If a VA Form 21-22a, which limits the scope of representation to a particular claim, is submitted, after a VA Form 21-22 or VA Form 21-22a

that did not, then the, organization or individual with a prior unlimited power of attorney would retain representation for all claims before VA with the exception of the particular claim indicated on the new VA Form 21-22a with the limited scope. Conversely, under § 14.631(f)(1), if VA receives a new VA Form 21-22 or VA Form 21-22a, which contains no limitations in scope, it would revoke an existing power of attorney even if the initial VA Form 21-22a indicated that it was limited in its scope to a particular claim. VA will make no further changes to § 14.631 based on this comment.

As to the claimant's continuing obligations to the attorney or agent pertaining to fees, this aspect of the comment will be discussed further below with regard to § 14.636.

S. Comment Concerning § 14.632—Standards of Conduct for Persons Providing Representation Before the Department

In § 14.632(c)(6), VA proposed to amend the current regulation which provides, “An individual providing representation on a particular claim under § 14.630, representative, agent, or attorney shall not . . . [s]olicit, receive, or enter into agreements for gifts related to

representation provided before an agency of original jurisdiction has issued a decision on a claim or claims and a Notice of Disagreement has been filed with respect to that decision.”

(Emphasis added.) VA proposed new language that would state, “An individual providing representation on a particular claim under § 14.630, representative, agent, or attorney shall not . . . [s]olicit, receive, or enter into agreements for gifts related to

services for which a fee could not lawfully be charged.”

(Emphasis added.) One commenter supported the premise of the provision because it would discourage unethical charging of fees disguised as gifts, but the commenter urged VA to clarify that VA does not intend to include de minimis gifts within the prohibition. The commenter noted that veterans or their families may want to send small tokens of gratitude to advocates.

VA has not changed the language from the proposed rule. Section 14.632(c)(6), as well as other provisions such as current § 14.628(d)(2)(i) (essentially prohibiting recognized organizations and their accredited representatives from charging or accepting a “fee or gratuity for service to a claimant”), implement statutory prohibitions or limitations on the charging of fees, such as those contained in 38 U.S.C. 5902(b)(1)(A) and 5904(c)(1). VA appreciates the commenter's support for preventing unethical behavior and recognizes that

most

accredited practitioners would not attempt to circumvent statutory or regulatory prohibitions on charging fees through the acceptance of gifts. But, unfortunately, based on VA's experience monitoring the conduct of accredited individuals and addressing complaints received regarding the receipt of gifts and donations, VA does not believe that exceptions to the rule should be recognized because doing so could open the door to potential abuses. Indeed, to be clear, VA believes that, in circumstances in which a fee would be unlawful, a prudent practitioner would return any gift to the donor to avoid the appearance of a violation of the standards of conduct in § 14.632. VA declines to alter the proposed language or otherwise offer the clarification or exception for de minimis gifts requested by the commenter. To assuage the commenter's concerns, VA notes that the prohibition in § 14.632(c)(6) does not extend to accepting de minimis gifts under circumstances where a fee could be charged by the agent or attorney, but cautions that if the gift is determined not to be de minimis it could prevent the attorney or agent from directly collecting a fee from VA out of the claimant's past-due benefits (where a fee may be charged but must be contingent on whether the matter is resolved in a manner favorable to the claimant and may not exceed 20 percent of the total amount of the past-due benefits awarded). Acceptance of such a “gift” in addition to the amount to be paid directly from past due benefits could cause the fee charged to exceed 20 percent of past due benefits. VA notes that in many jurisdictions the appropriateness of accepting of a gift under circumstances when a fee could be charged would still be governed by a version of Rule 1.8(c) of the American Bar Association's Model Rules of Professional Conduct—which generally prohibits attorneys from soliciting substantial gifts from clients—and by extension, current § 14.632(d), which provides that an accredited attorney is bound by “the rules of professional conduct of any jurisdiction in which the attorney is licensed to practice law.”

T. Comments Concerning § 14.636—Payment of Fees for Representation by Agents and Attorneys in Proceedings Before Agencies of Original Jurisdiction and Before the Board of Veterans' Appeals

VA proposed multiple changes to § 14.636. VA did not receive comments on all the proposed changes and will only address here those pertinent to the comments. One commenter objected to language in proposed § 14.636 that was proposed to reflect how Public Law 115-55 changes the starting point at which fees for representation may be charged. The commenter specifically objected to the phrase “if notice of the decision on a claim or claims was issued on or after the effective date of the modernized review system as provided in § 19.2(a)” in proposed § 14.636(c)(1)(ii) and the phrase “a Notice of Disagreement has been filed with respect to that decision on or after June 20, 2007” in both proposed § 14.636(c)(2)(i) and (c)(2)(ii). The commenter also objected to all of proposed § 14.636(c)(3), which states the limitations on whether an attorney or agent can charge a fee in cases in which a Notice of Disagreement was filed on or before June 19, 2007.

As VA explained in the preamble to the proposed rule, current 38 U.S.C. 5904(c)(1) directs that agents and attorneys may be paid for services provided after a Notice of Disagreement is filed in a case. VA proposed language in § 14.636(c) to implement the change in section 2(n) of Public Law 115-55 that fees may be charged upon VA's issuance of notice of an initial decision on a claim. The commenter correctly recognizes that the proposed regulation describes “multi-level predicates” for when it is permissible for attorneys and agents to charge fees. The basis for this structure is the fact that Congress has shifted the delimiting event for when fees may be charged by agents and attorneys three times, most recently with the passage of Public Law 115-55. When Congress has done so, VA has structured § 14.636 and its predecessor, former 38 CFR 20.609, to reflect the statutory amendments to 38 U.S.C. 5904 and its predecessor, former 38 U.S.C. 3404, using the effective dates of the Public Laws. VA's structure of proposed § 14.636 only continues this structure. This is best reflected by proposed § 14.636(c)(3), which is

identical

in language to current § 14.636(c)(2), having been renumbered from (c)(2) to (c)(3) because proposed subparagraph (c)(1) has been added to the regulation address fees under the modernized appeal system.

But the commenter asserts that such a structure for the regulation is “not supported by the plain language of the statute.” The commenter explains that 38 U.S.C. 5904(c)(1), as amended by Public Law 115-55, will state, in pertinent part, the limit on fees as, “a fee may not be charged, allowed, or paid for services of agents and attorneys with respect to services provided before the

date on which a claimant is provided notice of the agency of original jurisdiction's initial decision under section 5104 of this title with respect to the case.” So, the commenter reasons, the only limitation supported by the plain language of the amended statutory section is that the claimant has been provided notice of the AOJ's initial decision under 38 U.S.C. 5104 regardless of when it was issued or if a Notice of Disagreement or Board decision followed.

The commenter urges a reading of Public Law 115-55—essentially as a retroactive repeal of prior versions of sec. 5904(c)(1) rather than a prospective amendment—which would impermissibly ignore part of the statute. Although VA referred specifically to section 2(n) of Public Law 115-55 in the preamble to explain the basis for proposed § 14.636, the structure provided in the regulation also encompasses section 2(x) of Public Law 115-55, which states that the amendments made by the public law only apply to claims for which a notice of decision is provided by the AOJ on or after the effective date of the new review system. In addition to ignoring sec. 2(x), the expansion of the language in sec. 2(n) urged by the commenter is unrelated to the primary aim of Public Law 115-55—to amend, going forward, the procedures applicable to administrative review and appeal of VA decisions on claims for benefits in order to create a new, modernized review system. Accordingly, VA declines to change the structure of the proposed rule based on this comment. However, in reviewing the proposed rule in light of the comment, VA did discover a gap between the language for proposed paragraphs 14.636(c)(1)(ii) and (c)(2)(ii), regarding when agents and attorneys may charge fees for representation provided with respect to a request for revision of a decision of an AOJ under 38 U.S.C. 5109A or the Board under 38 U.S.C. 7111 based on clear and unmistakable error.

This gap was created by VA's mistaken reference, in proposed § 14.636(c)(2)(ii), to the notice of the decision on the request for revision rather than the notice of the decision that is being challenged based on clear and unmistakable error. By requiring the notice of decision on the request for revision to be issued

before

the effective date of the modernized review system, it created a gap involving circumstances in which the request for revision of a prior decision based on clear and unmistakable error is filed after the effective date of the modernized review system but challenges the decision that was issued prior to the modernized review system and for which a Notice of Disagreement had been filed after June 20, 2007. The proposed language would have meant that agents and attorneys could not charge fees under these circumstances until after VA had issued a decision on the request for revision. Despite the proposed language indicating otherwise, VA had intended to permit agents and attorneys to charge fees for representation provided with respect to a request for revision of a decision of an agency of original jurisdiction under 38 U.S.C. 5109A or the Board of Veterans' Appeals under 38 U.S.C. 7111 based on clear and unmistakable error if notice of the challenged decision was issued before the effective date of the modernized review system; a Notice of Disagreement was filed with respect to the challenged decision on or after June 20, 2007; and the agent or attorney has complied with the power of attorney requirements in § 14.631 and the fee agreement requirements in § 14.636(g). VA has revised the amendatory language to address this unintended gap so that an attorney or agent may charge a fee in these circumstances regardless of whether VA has already issued a decision on the request for revision.

Further, VA has also revised § 14.636(c)(1)(ii) to clarify that an attorney or agent may charge a fee for representation provided on a request to revise a decision based on clear and unmistakable error if the notice of the decision being challenged based on clear and unmistakable error was issued after the modernized review system. Additionally, VA has added language in § 14.636(c)(1)(i) to clarify that, in requests for revision based on clear and unmistakable error that are not otherwise addressed in § 14.636(c)(1)(ii) or (c)(2)(ii) (

e.g.,

requests challenging decisions issued before June 20, 2007), a decision on the request for revision will be considered the initial decision for purposes of allowing fees to be charged for representation.

The same commenter recommended that VA define the term “case” as used in 38 U.S.C. 5904(c)(1), as amended by Public Law 115-55, to include all requests by a specific individual for a specific monetary benefit (

e.g.,

compensation, pension, or dependency or indemnity compensation) within a single case. Under the interpretation suggested by the commenter, once an individual receives an initial decision with respect to a specific type of benefit, fees could be charged for any subsequent services provided with respect to the same type of “benefit,” even if the services related to a claim with an entirely different basis (

e.g.,

an initial decision with respect to compensation for hearing loss would permit fees to be charged with respect to the veteran's subsequent application for compensation based on service connection for a mental disorder). VA disagrees with commenter because such a rule would untie the term “case” from the initial decision by the AOJ. The commenter's proposal would have the effect of permitting agents and attorneys to charge fees to file claims, except the very first claim filed under a specific benefit program. If Congress had intended such a result, it could have accomplished it by repealing or replacing the “with respect to the case” language in its entirety. Congress did not, and, therefore, VA will not interpret the amended statute in a manner that would essentially achieve that result in the absence of any indication that this was Congress' intent.

As to the more general aspect of the commenter's suggestion that VA should expressly define the term “case,” at this time, VA does not believe that it is necessary to expressly define the term in regulation to explain under what circumstances an agent or attorney may charge fees. Rather, in proposed § 14.636(c), VA continues to explain the term for the purpose of fees in the context of a “claim” and maintains the general position that VA must be allowed to decide a matter before paid representation is available.

See

73 FR 29852, 29868 (May 22, 2008) (the final rule shifting, pursuant to Public Law 109-461, the delimiting point for the restriction of fees to the Notice of Disagreement with respect to the case). VA recognizes that the term “claim” has different meanings in different contexts other than attorney's fees, so to clarify the application of the rule VA has provided guidance in proposed § 14.636(c) on three of the more nuanced circumstances relating to fees: Supplemental claims, claims for increase in a rate of disability, and requests for revision of a prior decision based on clear and unmistakable error. VA believes that the proposed § 14.636(c) provided sufficient guidance as to when, and under what circumstances, a fee may be charged, but has opted to revise the language to clarify VA's current position.

In a similar regard, three commenters objected to language in proposed § 14.636(c)(1) that specifies the circumstances in which an AOJ's decision adjudicating a supplemental claim will be considered the initial decision on a claim. Specifically, VA had proposed adding a sentence to § 14.636(c) stating, “For purposes of this

paragraph (c)(1)(i), a decision by an AOJ adjudicating a supplemental claim will be considered the initial decision on a claim unless that decision was made while the claimant continuously pursued the claim by filing any of the following, either alone or in succession: A request for higher-level review, on or before one year after the date on which the AOJ issued a decision; a supplemental claim, on or before one year after the date on which the AOJ issued a decision; a Notice of Disagreement, on or before one year after the date on which the AOJ issued a decision; a supplemental claim, on or before one year after the date on which the Board issued a decision; or a supplemental claim, on or before one year after the date on which the Court of Appeals for Veterans Claims issued a decision.” The commenters advocated for an interpretation that would allow for agents and attorneys to receive fees for representation on all supplemental claims regardless of whether they are being continuously pursued by the claimant. One commenter expressed a belief that, based on information conveyed to the commenter by a director of a VSO, the non-inclusion of all supplemental claims within the case restriction in the proposed regulation is contrary to the negotiations between VA and its stakeholders. Ultimately, he characterizes the proposed language as “a[n impermissible] denial of professional services to veterans.”

It is VA's position that the regulatory text is consistent with the language of the amended statute, and to explain VA's interpretation of the statute it is helpful to consider the legislative history of the statutory restrictions on attorney's fees. Since 1988, Congress has restricted fees on VA appeals by: (1) Prohibiting fees prior to a specific event in the appeal proceeding, and (2) permitting reasonable fees thereafter. VA views the language proposed in § 14.636(c) as being consistent with that scheme. Originally, in 1988, under Public Law 100-687, the Veterans Judicial Review Act, the delimiting point was a decision by the Board, which was the decision that was appealable to the Veterans Court. Then, under Public Law 109-461, the Veterans Benefits, Health Care, and Information Technology Act of 2006, Congress shifted the delimiting point to the Notice of Disagreement, the threshold requirement to receiving a Board decision. Under Public Law 115-55, the delimiting point will shift again, from the Notice of Disagreement to the notice of the initial decision by an AOJ.

As to how VA views Public Law 115-55 in relation to the prior scheme, VA interprets the amendment of section 5904(c) by sec. 2(n) of Public Law 115-55 as merely a means to allow paid representation with respect to the claimant's expanded options for seeking review of an initial decision on a claim. As noted above, prior to Public Law 115-55, to obtain direct review of an AOJ decision, a claimant had to file a Notice of Disagreement. Thus, the filing a Notice of Disagreement was the logical entry point for ensuring that paid representation was available with respect to review of AOJ decisions. However, pursuant to Public Law 115-55, direct review of an AOJ decision may be obtained without filing a Notice of Disagreement. It may be obtained by choosing from three differentiated lanes—filing a Notice of Disagreement, filing a request for higher-level review, and filing a supplemental claim. As a result, to permit paid representation regardless of the form of review, Congress necessarily had to shift the entry point for paid representation to the AOJ decision itself. VA does not view the amendment as altering the general premise that “VA must have an opportunity to decide a matter before paid representation is available.”

See

73 FR 29852, 29868 (May 22, 2008) (the final rule shifting, pursuant to Public Law 109-461, the delimiting point for the restriction of fees). To the extent that there is any variation from this general rule when it comes to evidence submitted shortly after the AOJ's decision, it is explained below.

VA has set forth in § 14.636(c)(1)(i) the circumstances when an attorney or agent may charge a claimant for services in response to an adverse AOJ decision—after the initial decision on the claim. The proposed language referring to when “an agency of original jurisdiction adjudicating a supplemental claim will be considered the initial decision” was intended to distinguish an initial decision by an AOJ from review actions made by the same entity while the claimant continuously pursued the matter. VA carefully chose the “continuously pursued” language included in the proposed rule. Pursuant to Public Law 115-55, Congress shifted from a single-option appellate system to a multi-option appellate system involving the following three options: a supplemental claim, higher level review by the AOJ, and appeal to the Board. In addition to alternatives for pursuing appeals, the new system allows claimants to pursue appellate options in succession, each relating back to the same AOJ decision for effective date purposes.

VA acknowledges that this approach treats supplemental claims differently based on whether they were filed within one year of a prior decision. If a supplemental claim is filed within one year of a prior decision, the supplemental claim relates back to the claim that gave rise to the earlier claim. As a result, the relevant time period with respect to the supplemental claim overlaps the time period considered in the earlier decision and is considered a continuation of that claim. A supplemental claim filed more than one year after a prior decision, on the other hand, is distinct from the prior decision because it does not overlap with the timeframe considered in the prior decision, and, thus, is the beginning of a new claim for the purposes of assigning an effective date and a new claim—or a new case—for the purpose of determining when attorney fees may be charged. The distinction between the submission of evidence on an AOJ decision for which the review has not expired and the submission of evidence after a AOJ decision has been finally adjudicated, is not a new concept. Pursuant to current 38 CFR 3.156(b), new and material evidence received after an AOJ decision but prior to the expiration date of the appeal period, or prior to the appellate decision if a timely appeal was filed, has long since been considered to have been filed in connection with the initial claims proceeding. In contrast, pursuant to 38 CFR 3.156(a), a finally adjudicated claim could be reopened but the new proceeding would not be treated as a continuation of the prior claim.

Furthermore, unlike supplemental claims that are filed more than one year after an AOJ decision or a Board decision, VA does not have a duty to notify the claimant who files a supplemental claim while continuously pursuing the matter of the information or evidence necessary to substantiate the claim in accordance with 38 U.S.C. 5103.

See

Public Law 115-55, section 2(b). The exclusion of this pro-claimant obligation also favors treating a continuously pursued supplemental claim as part of the matter stemming from the AOJ's initial decision. In contrast, the fact that VA still does have this obligation with respect to supplemental claims filed when the claimant has not continuously pursued the matter only bolsters the conclusion that VA should again be permitted to decide the matter prior to the need for paid representation.

VA has revised proposed § 14.636(c) to clarify VA's position regarding supplemental claims, claims for increase in a rate of disability and requests for revision based on clear and unmistakable error, but has not made

any substantive changes to VA's position.

Finally, turning back to the commenter who asked VA about a claimant's “continuing obligations” to a former attorney or agent, VA is amending § 14.636(e) and (f) based on this comment to help clarify a claimant's continuing obligations with regard to fees. Simply because a claimant has discharged an attorney or agent, or the attorney or agent has withdrawn from representation does not eliminate the attorney or agent's right to compensation. But the standard for evaluating a reasonable fee does change. In the typical case, in which an attorney or agent has a contingent fee agreement that does not exceed 20-percent and provides continuous representation from the date of the agreement through the date of the decision awarding benefits, the fee called for in the fee agreement is presumed to be reasonable in the absence of clear and convincing evidence to the contrary. 38 U.S.C. 5904(a)(5); 38 CFR 14.636(f);

see also Scates

v.

Principi,

282 F.3d 1362, 1365 (Fed. Cir. 2002) (explaining that even if a fee agreement provides for a fee of 20 percent of past-due benefits awarded, implicit in that arrangement is the understanding that the attorney or agent's right to receive the full fee called for in the fee agreement only arises if the attorney or agent continues as the veteran's representative until the case is successfully completed). In contrast, if the attorney or agent's representation of the claimant ends before the date of the decision awarding benefits, the attorney or agent may still be eligible to receive a fee, but the full amount of the fee stated in the agreement generally does not represent a reasonable fee for that attorney or agent. Rather a reasonable fee for a discharged agent or attorney would be limited to the amount of the “fee that fairly and accurately reflects [the attorney or agent's] contribution to and responsibility for the benefits awarded.”

Scates,

282 F.3d at 1366.

Accordingly, VA is amending paragraph (f) of § 14.636 by revising the caption to “Presumptions and discharge,” amending the current language to specify that the presumption that a fee of 20 percent of any past-due benefits awarded is reasonable applies “if the agent or attorney provided representation that continued through the date of the decision awarding benefits,” and adding a new paragraph (f)(2). Paragraph (f)(2) will explain that a reasonable fee for an agent or attorney who is discharged by the claimant or withdraws from representation before the date of the decision awarding benefits is one that fairly and accurately reflects his or her contribution to and responsibility for the benefits awarded and that the amount of the fee is informed by an examination of the factors in § 14.636(e). VA has also amended paragraph (e) of § 14.636, which lists factors considered in determining whether a fee is reasonable, to add as a factor, when applicable, “the reasons why an agent or attorney was discharged or withdrew from representation before the date of the decision awarding benefits.”

See Scates,

282 F.3d at 1368.

Beyond these regulatory changes, it is important to remember that VA's Office of General Counsel does not initiate review of the reasonableness of fees in every case. However, this does not mean that a claimant who is unhappy with the representation provided by his or her agent or attorney, or former agent or attorney, is without protection and/or potential recourse. First, pursuant to VA's standards of conduct in 38 CFR 14.632, attorneys and agents are prohibited from charging, soliciting, or receiving fees that are clearly unreasonable, and, if an attorney or agent who is found to have violated this standard of conduct, the attorney or agent would risk losing his or her accreditation to represent claimants before VA. Second, if a claimant believes that the total amount of the fee charged, solicited or received by the attorney or agent was not earned, the claimant may initiate his or her own motion for VA's Office of General Counsel to review of the fee.

See

38 CFR 14.636(i) (explaining how a claimant initiates a motion requesting a reasonableness review).

Parts 19 and 20—Board of Veterans' Appeals

VA amends the regulations in 38 CFR parts 19 and 20 as described in the section-by-section supplementary information below. These regulations govern appeals and rules of practice for the Board of Veterans' Appeals.

A. Comments Concerning § 19.2—Appellant's Election for Review of a Legacy Appeal in the Modernized System

Proposed 38 CFR 19.2(d) discussed the manners in which appellants with claims or appeals pending in the legacy system may elect to have their claims or appeals adjudicated in the modernized review system. One commenter requested clarification regarding the effect of the phrase “pursuant to the Secretary's authorization to participate in a test program” in 38 CFR 19.2(d)(3), given that 38 CFR 19.2(d)(1) also addresses election into a test program; specifically, the Rapid Appeals Modernization Program (RAMP). The commenter did not suggest any changes.

Section 4(a) of the AMA of 2017 authorizes VA to conduct test programs to evaluate the assumptions used to develop a plan for processing legacy appeals and supporting the new appeals system. Although RAMP is one such program, CFR 19.2(d)(3) acknowledges the more general authority to conduct test programs that was granted by Section 4(a) of the Appeals Modernization Act. That authority was used to conduct the Board's Early Applicability of Appeals Modernization (BEAAM), a small-scale research program conducted to assess preliminary data about veterans' choices and experiences in the modernized review system. VA makes no changes based on this comment.

B. Comments Concerning § 19.30—Furnishing the Statement of the Case and Instructions for Filing a Substantive Appeal; and § 19.31—Supplemental Statement of the Case

One commenter expressed concern regarding the notice provided to claimants in statements of the case. The commenter remarked that VA should provide adequate notice to enable a veteran to make a fully informed decision as to which review option is most appropriate. However, the commenter did not suggest a specific regulatory change. As an initial matter, VA notes that statements of the case and supplemental statements of the case are not contemplated under the Appeals Modernization Act framework, but will be provided in legacy claims. To that end, VA agrees that the notice provided with statements of the case and supplemental statements of the case must contain adequate information as to the claimant's opportunity to opt into the new system pursuant to section 2, paragraph (x)(5) of the AMA. In order to clarify this procedure, VA has amended 38 CFR 3.2400(c)(2) and 19.2(d)(2) to provide that elections to opt into the new system must be made on a form prescribed by the Secretary.

C. Comments Concerning § 19.35—Certification of Appeals

One commenter noted that while proposing to remove the requirement for VA Form 8 contained in § 19.35, VA indicated in the preamble that certification for legacy appeals will be accomplished “by other means.” This commenter asked for clarification of what these other means will entail. VA is not changing the process by which appeals are certified to the Board, VA is merely no longer requiring the

prescribed use of the VA Form 8. Veterans and representatives will still receive a letter indicating their appeal has been transferred to the Board and will still be able to determine the status of their appeal by checking their claims file.

Another commenter expressed concern that the administrative delay of certification may impact the evidentiary timelines under the Appeals Modernization Act. Under the Appeals Modernization Act, an appeal is under the Board's jurisdiction once a valid Notice of Disagreement is filed. Therefore, it is the filing of the Notice of Disagreement, not certification, that will determine the evidentiary timeline. Certification is not consistent with the design of the Appeals Modernization Act. VA makes no changes based on these comments.

D. Comments Concerning § 20.3—Definitions

A commenter expressed concern that the elimination of the phrase “argument and/or” from the definition contained in 38 CFR 20.3(h) could be interpreted as a means to limit or eliminate arguments from accredited representatives at a Board hearing. VA directs the commenter to § 20.700(b), which states, “The purpose of a hearing is to receive argument and testimony relevant and material to the appellate issue or issues.” VA assures the commenter that the change to § 20.3(h) does not, and was not intended to, limit arguments from representatives. Rather, the change was merely to eliminate redundant language that is already contained in § 20.700(b). VA will continue to accept argument from accredited representatives at a Board hearing. VA makes no changes based on this comment.

E. Comments Concerning

Former

§ 20.102—Delegations of Authority—Rules of Practice; § 20.108—Delegation of Authority to Chairman and Vice Chairman, Board of Veterans' Appeals; and § 20.109—Delegation of Authority to Vice Chairman, Deputy Vice Chairmen, or Members of the Board

Two commenters expressed concern that the proposed deletion of § 20.102 means the delegation of authority rule of practice is being removed from the Board of Veterans' Appeals. VA assures these commenters that the delegation of authority described remains in §§ 20.108 and 20.109. The proposed deletion of § 20.102 is merely to eliminate redundant language. Therefore, VA makes no changes based on this comment.

F. Comments Concerning § 20.104—Jurisdiction of the Board

A commenter expressed concern that VA proposed deleting the following language from § 20.104, “In its decisions, the Board is bound by applicable statutes, the regulations of the Department of Veterans Affairs and precedent opinions of the General Counsel of the Department of Veterans Affairs.” This commenter felt the removal of this language suggested the Board would no longer be bound by precedential opinions of the General Counsel. VA assures the commenter that the change to § 20.104 does not, and was not intended to, suggest the Board is not bound by precedential opinions of the General Counsel. Rather, this change was merely to eliminate redundant language that is already contained in § 20.105. VA makes no changes based on this comment.

G. Comments Concerning § 20.105—Criteria Governing Disposition of Appeals

A commenter suggested VA take this rulemaking to modify 38 CFR 20.105 to clarify the precedential or persuasive value of manual provisions. As explained in § 20.105, “The Board is not bound by Department manuals, circulars, or similar administrative issues.” VA makes no changes based on this comment.

H. Comments Concerning § 20.202—Notice of Disagreement

VA received serveral comments concerning § 20.202, and will therefore address these comments by topic, as follows.

1. Comments Concerning § 20.202(a)—“Specific Determination”

Commenters remarked that the term “specific determination” as used in § 20.202(a) should be defined. An additional commenter also asked if a veteran could indicate they were appealing “all issues.” The language “specific determination” was included in the statute. However, VA agrees that it would be useful to further define this term in the regulation. VA therefore amends § 20.202(a) to require identification of the decision and the specific issue or issues therein with which the claimant disagrees. The amended language references the definition of issue in 38 CFR 3.151(c). This change will better inform claimants of the scope of the identification requirement and aligns it with other AMA implementation definitions.

The Notice of Disagreement needs to contain sufficient information for VA to determine the issue and adjudication with which the veteran disagrees. The design of the new Notice of Disagreement form prompts the veteran to provide the issue and the date of decision with which the veteran is disagreeing. Additionally, § 20.202 notes that “[t]he Board will construe such arguments in a liberal manner for purposes of determining whether they raise issues on appeal.” This language protects the rights of a veteran who, for example, incorrectly identifies the date of the agency of original jurisdiction decision, but does provide enough information that VA is able to identify the issue and decision on appeal. Determination of whether an adequate Notice of Disagreement was filed falls within the Board's jurisdiction. 38 U.S.C. 7105(b)(1)(C). As the proposed rule makes clear, the Board will construe Notices of Disagreement in a liberal manner for purposes of determining whether they raise issues on appeal. Finally, if the Board receives an unclear Notice of Disagreement on the form prescribed by the Secretary and the Board cannot identify which denied issue or issues the claimant wants to appeal, or which option the claimant intends to select, the Board will seek clarification of the Notice of Disagreement before dismissing the appeal. Therefore, VA makes no changes based on this comment.

2. Comments Concerning § 20.202(b)(3)—Submission of Evidence in Conjunction With Notice of Disagreement

Two commenters noted that 38 CFR 20.202 provides time limits on the veteran's opportunity to submit additional evidence or modify the Notice of Disagreement to elect a different evidentiary lane, starting from the date that the Board receives the Notice of Disagreement. The commenters expressed concern that VA does not provide adequate notice as to when it received the Notice of Disagreement and therefore the veteran will not be able to calculate the relevant deadlines. VA has carefully considered this comment and has determined that no changes to the regulatory amendments are required. It is currently the Board's practice to notify veterans and representatives when an appeal has been received and docketed at the Board. As the precise procedures for providing such notice may change based on technological systems, as well as other resources, VA will continue to address this matter through internal procedural guidance consistent with the law and regulations. VA makes no changes based on this comment.

3. Comments Concerning § 20.202(c)—Policies on Modifying the Notice of Disagreement and Changing Dockets

Several commenters expressed concern with the policies on modifying the Notice of Disagreement and switching dockets in §§ 20.202(c) and 20.800(a)(2). Under § 20.202(c), a veteran may request a different evidentiary docket than the one selected on the Notice of Disagreement, as long as the request is made within one year of the notice of the agency of original jurisdiction decision, or within 30 days of receipt of the Notice of Disagreement, whichever is later. This policy accounts for the common situation in which a veteran files the Notice of Disagreement at the end of the one-year period, and does not retain representation until after the Notice of Disagreement is filed. The policy reflected in the proposed rule provided an additional 30 days after the filing of the Notice of Disagreement so that the representative has an opportunity to recommend that the veteran modify the initial choice of an evidentiary record. However, if a veteran has already submitted evidence or testified at a Board hearing, the request will be denied. If a veteran requests to switch into the docket allowing submission of additional evidence, he or she will have 90 days to submit additional evidence. The 90-day window will begin on the day that VA issues a letter notifying the veteran that the request to switch dockets has been granted. Veterans who request to switch dockets will retain their original docket date, based upon VA's receipt of the Notice of Disagreement. Therefore, there is no “penalty” for switching dockets.

Two commenters asserted that the one-year period referenced in § 20.202(c) is not authorized by statute and recommended a more liberal policy. VA does not agree with the statement that the policy developed by VA is not authorized by the statute. The amendments to 38 U.S.C. 7107(e) authorize the Secretary to “develop and implement a policy allowing an appellant to move the appellant's case from one docket to another docket.” The statute places no restrictions on the agency's discretion to impose a time limitation in such policy. Congress acknowledged this fact in H. Rept. 115-135, noting that, “H.R. 2288 does not mandate that VA allow veterans to switch from one option to another. It is expected that the Secretary will use their discretion to develop policies that are in the best interest of veterans.”

Turning to a commenter's suggestion that veterans should have unlimited time in which to switch dockets, VA does not view this policy as consistent with the design of the new system. Allowing the veteran unlimited time to modify their Notice of Disagreement would create an unfair result for other veterans. VA has established a 365-day average processing time goal for appeals in the direct review docket. VA may not be able to meet this commitment if some veterans are able to enter the direct docket ahead of other veterans who have been waiting on that docket. VA is also committed to transparency, including providing veterans with accurate data about average processing time on all three dockets. In the new system, veterans have many choices to tailor their experience to best suit their individual needs, and this data will inform their choices. Allowing some veterans to switch dockets at any time in the process will make it difficult for VA to provide accurate data to all veterans, effectively taking away their ability to choose the best path. Moreover, the primary goal of the Appeals Modernization Act is to create a better, more efficient claims and appeals system that works for veterans. In the current legacy system, appellants may add evidence, request a hearing, or withdraw a hearing request at any time. Allowing appellants to switch lanes at any time would mimic this feature of the legacy system and preclude the efficiencies built into the new system, and would thus be contrary to Congress' intent.

To that end, the Congressional Budget Office (CBO) determined that section 2 of the AMA, directing VA to implement the new process to handle appeals of claims for veterans' benefits, would be cost neutral. CBO noted that, “the current system allows for repeated revisions and resubmissions of claims . . .” resulting in wait times of three to six years and a backlog of approximately 470,000 claims. CBO further noted that the “proposed changes are intended to significantly streamline the appeal process, which would allow appeals to be finalized in a shorter period of time and require the efforts of fewer employees . . . [E]fficiencies of the new system would allow the agency to continue processing legacy appeals under the current system, very gradually reducing the existing backlog, without the need for additional employees.”

Several commenters have suggested that the policy deprives veterans of some of the options available in the new appeals system, because they may not understand the ramifications of their initial review lane choice. In particular, one commenter suggested that a veteran who has been waiting for a long time in the hearing docket should be able to move to the direct docket. Another commenter expressed concern with the policy disallowing a change in dockets if the veteran had already submitted evidence with the Notice of Disagreement. The commenter suggested that VA should consider allowing veterans who had already submitted evidence to subsequently request a hearing. The commenter expressed that this change would not provide an unfair advantage to the veteran, but would allow a veteran whose circumstances had changed to request a hearing before the Board.

The Appeals Modernization Act provides several new choices for veterans seeking review of a VA decision. VA encourages veterans to seek the advice of their authorized representative, if any, as soon as possible when determining which option best suits their individual circumstances and to consider published average wait times associated with each option. VA understands that circumstances may change to the extent that a different option is preferable to the one initially chosen. As noted above, however, VA has carefully balanced the needs of a veteran wishing to switch dockets against the needs of all the other veterans waiting for the Board to decide their appeals. The proposed policy provides an opportunity for a veteran to switch dockets without creating an unfair disadvantage to other veterans who wish to continue with their initial choice, but might experience longer wait times as a result of others switching dockets.

Nevertheless, VA recognizes that exceptional circumstances may sometimes warrant extensions of the time period to switch dockets on an individual basis. Accordingly, VA amends § 20.203 to add paragraph (c), which provides that the time limit for filing a Notice of Disagreement or a request to modify a Notice of Disagreement may be extended if the Board grants the appellant's motion for good cause. Examples of good cause may include serious illness or injury of the appellant or representative, or the appellant's inability to access mail services due to homelessness, overseas deployment, or other reasons. Examples that would not constitute good cause include change in representation, change in preference of a review option at the agency of original jurisdiction or among the Board review options, difficulty in obtaining evidence, or discovery of new evidence during a period in which the duty to assist does not apply.

In addition to the above, another commenter stated that knowing wait time predictions (which is linked with timeliness goals) is important at the time the initial rating decisions are made under the new system so that claimants can make an informed decision about which Board docket to choose in a Notice of Disagreement. VA will be publishing wait times pursuant to the law, but this is not a reason for any regulation change.

VA does make a change to § 20.202(c) in response to comments on a related

Federal Register

notice. Because the Notice of Disagreement form is not a new information collection, but a revised information collection under OMB control number 2900-0674, it was not published with the proposed rulemaking. Rather, notice of the proposed changes to 2900-0674 was published in the

Federal Register

on August 23, 2018, pursuant to the Paperwork Reduction Act. 83 FR 42769. One commenter suggested changes to the Notice of Disagreement for the purpose of clarifying the procedures for modifying the Notice of Disagreement. The commenter recommended that VA use a standard form for Notice of Disagreement modifications. VA agrees with the commenter, and in order to address the commenter's concerns, VA has amended the procedures described in § 20.202(c) to state that requests to modify a Notice of Disagreement for the purpose of selecting a different review option must be made by filing a new Notice of Disagreement form.

Several commenters remarked that the policy does not provide enough time to change the initial election in the event that the veteran does not retain representation until after the Notice of Disagreement is filed. This concern was originally addressed in the policy by providing an additional 30 days following receipt of the Notice of Disagreement. Moreover, the Appeals Modernization Act has shifted important decision points for veterans seeking review of a VA decision to earlier in the process. Under the new system, the expert advice of representatives will, in many cases, be beneficial to veterans as soon as possible following VA's initial decision on their claim. Veterans may wish to rely on a representative to assist them in choosing the review option that best suits their needs. However, VA acknowledges that some veterans will not retain representation until after they file a request for review. In light of the commenter's concerns, VA has amended the policy in § 20.202(c)(2) to provide an additional 60 days following receipt of the Notice of Disagreement, instead of 30. VA hopes that this additional time will assist veterans' representatives in better serving their clients.

4. Comments Concerning § 20.202(d) and (e)—Use of Non-Standard Form

Under proposed § 20.202(d), the Board will not accept a Notice of Disagreement “submitted in any format other than the form prescribed by the Secretary, including on a different VA form.” Section 20.202(e) provides that the filing of an alternate form or other communication will not extend, toll, or otherwise delay the time limit for filing a Notice of Disagreement, as provided in § 20.203(b). Several commenters requested that the Board provide notice if it rejects a communication under the circumstances described in § 20.202(d) and (e). As an initial matter, the statute requires that Notices of Disagreement are filed on a standard form. VA implemented standardized forms procedures in 2014. See Standard Claims and Appeals Forms, 79 FR 57660 (Sept. 25, 2014). This 2014 rule amended VA's adjudication and appeal regulations to require that all claims and appeals originate on standard VA forms. Therefore, claimants should be aware that VA will not accept Notices of Disagreement submitted in any format other than the form prescribed by the Secretary. VA is developing procedures for notifying claimants when a communication cannot be accepted as a Notice of Disagreement. As the precise procedures for providing such notice may change based on technological systems, as well as other resources, VA will continue to address this matter through internal procedural guidance consistent with the law and regulations. Moreover, VA has a longstanding practice of providing the status of an appeal or communication upon request. VA makes no changes based on this comment.

5. Comments Concerning § 20.202(f) and (g)—Clarification of Notice of Disagreement

One commenter remarked that a Notice of Disagreement could be rejected by the Board after the Board requested clarification because the clarification was received one year after the agency of original jurisdiction decision. This concern is addressed in §§ 20.202(f) and 20.202(g). If within one year after mailing an adverse decision (or 60 days for simultaneously contested claims), the Board receives an unclear Notice of Disagreement completed on the form prescribed by the Secretary, then the Board will contact the claimant to request clarification of the claimant's intent. The claimant must respond to the Board's request for clarification on or before the later of 60 days after the date of the Board's clarification request or one year after the date of mailing of notice of the adverse decision being appealed (60 days for simultaneously contested claims). VA will follow the provisions of §§ 20.202(f) and 20.202(g), as well as the statute, 38 U.S.C. 7105(b)(1)(C), which provides that questions as to timeliness or adequacy of the Notice of Disagreement shall be decided by the Board.

An additional commenter requested that VA provide a period longer than 60 days for clarification of a Notice of Disagreement and provide good cause exception to the rule. The proposed rule providing 60 days for clarification is based on the current regulation § 19.26, which provides 60 days for clarification of an unclear Notice of Disagreement received under the current system. We are not aware of hardship resulting from the current rule. Therefore, VA makes no changes based on these comments.

The same commenter wanted to know how the Board will contact veterans to request clarification. VA will contact veterans via oral, written, or other means. The commenter did not put forth a specific recommendation; therefore, VA makes no changes based on this comment.

I. Comments Concerning § 20.203—Place and Time Filing Notice of Disagreement

One commenter suggested that, when a veteran selects either the Supplemental Claim or Higher-Level Review options, the one-year time limit to file a Notice of Disagreement must be tolled. The commenter is mistaken as to this aspect of the new system framework. Pursuant to the AMA, a veteran may choose to file a Notice of Disagreement within the one-year period following an initial agency of original jurisdiction decision on a claim, a decision on a Supplemental Claim, or a decision on a Higher-Level Review. Such filing will protect the effective date for any granted benefit. VA makes no changes based on this comment.

Commenters remarked that § 20.203(b) uses the term “determination” as it relates to the requirement of filing a Notice of Disagreement whereas the term “decision” is used in section §§ 3.103, 3.104, and 3.2500. VA proposed the term “determination” in § 20.203(b) as this is the term used in the Appeals Modernization Act to describe the determination with which the claimant disagrees. However, VA agrees with the commenters' concerns that use of “determination” will lead to confusion,

and therefore amends § 20.203(b) to instead use the term “decision”. This change does not alter the requirement in § 20.202(a) to identify to specific decision and issue or issues therein with which the claimant disagrees.

A commenter questioned whether Notices of Disagreement or other communications can be digitally submitted to the Board through Direct Mail Upload or electronically submitted through a VA Regional Office and still be considered as received by the Board. The commenter expressed concern that these provisions encourage the use of the paper mail versus the use of electronic/digital submissions. Additionally, the commenter suggested that the Board's mailing address should be reflected on standard forms but not the regulations.

Pursuant to 38 U.S.C. 7105(b)(2)(C), notices of disagreement shall be filed with the Board. Therefore, notices of disagreement may not be filed with a VA Regional Office. As to the commenter's suggestion that the Board's mailing address should not be contained in regulation, the Board is statutorily required to receive notices of disagreement and motions directly from parties. It has been VA's longstanding policy to inform the public and settle in law the mailing address to which those submissions must be sent. VA makes no changes based on this comment.

A commenter expressed concern regarding VA's procedures for mailing notice to representatives, and in particular the provisions of proposed 38 CFR 20.203(b), regarding timeliness of a Notice of Disagreement. The commenter asserted that the 90-day evidence window for cases described in § 20.302 should begin on the date that the appellant is notified of VA's receipt of the Notice of Disagreement, rather than on the date of VA's receipt of the Notice of Disagreement. Pursuant to 38 U.S.C. 7113(c)(2), however, the evidentiary record for such cases shall include evidence submitted “within 90 days following receipt of the Notice of Disagreement.” Accordingly, VA will follow the statute and will make no changes based on this comment.

The same commenter disagreed with the agency's presumption, pursuant to § 20.203(b), that notice of a VA decision was mailed on the date of the letter. The commenter contended that VA correspondence to representatives is often postmarked after the date of the letter. The commenter submitted several letters and postmarked envelopes from VA to individual veterans in support of this argument. Pursuant to 38 U.S.C. 7105(b)(1)(C), questions as to timeliness or adequacy of the Notice of Disagreement shall be decided by the Board, which is consistent with the fact that the presumption of regularity is rebuttable. We further note that the possibility that the presumption might be rebutted in a non-trivial number of cases does not establish that it is inappropriate in a system the size of VA's claims system, which receives and sends millions and millions of pieces of mail each year. Finally, operational issues of the type mentioned by the commenter are more appropriately addressed at the sub-regulatory policy level.

Commenters raised concerns that VA would not extend the filing deadline for requests for review of a decision. Accordingly, VA amends § 20.203 to add paragraph (c), which provides that the time limit for filing a Notice of Disagreement or a request to modify a Notice of Disagreement may be extended if the Board grants the appellant's motion for good cause. Examples of good cause may include serious illness or injury of the appellant or representative, or the appellant's inability to access mail services due to homelessness, overseas deployment, or other reasons. Examples that would not constitute good cause include change in representation, change in preference of a review option at the agency of original jurisdiction or among the Board review options, difficulty in obtaining evidence, or discovery of new evidence during a period in which the duty to assist does not apply.

Additionally, VA corrects a technical error in the title of § 20.203, amending “Place and time filing Notice of Disagreement” to read Place and time of filing Notice of Disagreement”.

J. Comments Concerning § 20.205—Withdrawal of Appeal

One commenter remarked that VA should include clarifying language regarding withdrawal of appeals to ensure that VA only withdraws claims when that is the veteran's intention. Initially, VA notes that this is outside the scope of the Appeals Modernization Act. However, VA is still bound by the caselaw governing adequate withdrawals of claims and appeals. Nothing in the Appeals Modernization Act limits this governing caselaw. VA makes no changes based on this comment.

One commenter remarked that § 20.205(c) is outside the scope of the Appeals Modernization Act. Section 20.205(c) provides that the withdrawal of an appeal does not preclude the filing of a new Notice of Disagreement, a request for higher-level review, or a supplemental claim as to any issue withdrawn provided such filing would be timely if the withdrawn appeal had never been filed. The commenter states that there is no justification for VA to require the refiling to be done within the initial one year period once a timely Notice of Disagreement has been submitted. The Appeals Modernization Act also provides the Secretary the authority to develop and implement a policy for claimants who wish to withdraw their Notice of Disagreement. The Appeals Modernization Act clearly provides the claimant one year to seek review of the agency of original jurisdiction determination. Therefore, this time period is incorporated into § 20.205(c). Accordingly, § 20.205(c) is not outside the scope of the Appeals Modernization Act, and VA makes no changes based on this comment.

Commenters suggest that VA should allow a claimant to withdraw an appeal at the Board in order to file a supplemental claim with VBA prior to receiving a Board decision. The Appeals Modernization Act specifically states that for “purposes of determining the effective date of an award . . . the date of application shall be considered the date of the filing of the initial application for a benefit if the claim is continuously pursued by filing . . . A supplemental claim . . . on or before the date that is one year after the date on which the Board of Veterans' Appeals issues a

decision”

38 U.S.C. 5110(a)(2)(D) (emphasis added). Accordingly, the preservation of the effective date provisions of the Appeals Modernization Act generally would not apply to a claimant who withdraws an appeal at the Board and files a supplemental claim with VBA prior to receiving a Board decision if more than one year has passed since the agency of original jurisdiction determination. However, the agency of original jurisdiction may consider a request for extension of the one-year period in which to file a supplemental claim in these circumstances while maintaining continuous pursuit of the claim (see,

e.g.,

§ 3.2500(e)(2)). Accordingly, VA makes no changes to this section based on these comments.

K. Comments Concerning Part 20, Subpart D—Evidentiary Record

One commenter requested clarification regarding how VA will adjudicate increased rating claims. The evidentiary record before the Board is defined by the Appeals Modernization Act. The Appeals Modernization Act did not change the substantive case law governing increased rating claims. Accordingly, VA makes no change to the regulations based on this comment.

One commenter suggested that evidence submitted to (or constructively received by) the agency of original jurisdiction after a supplemental claim is adjudicated should be later reviewable by the Board when an Notice of Disagreement is filed, even if the veteran selects the Board lane precluding submission of new evidence. This is contrary to the statutory design of the system. Statutory section 7113 provides that the record before the Board consists of the record before the agency of original jurisdiction at the time that the supplemental claim was adjudicated. This rule is clearly mirrored in § 20.301.

If a veteran wants to have VA consider evidence not received by VA when the record before the agency of original jurisdiction was open, the available options are to (a) file another supplemental claim with new and relevant evidence or (b) file a Notice of Disagreement, select a Board lane allowing submission of new evidence, and submit the evidence during the applicable 90-day window as provided in §§ 20.302 and 20.303. Therefore, VA makes no changes based on these comments.

The regulations as proposed require the Board to notify a veteran in a Board decision if the Board did not consider evidence that had been submitted outside the allowed time period. One commenter asserted that the regulations should require the Board to additionally notify the veteran at the time such evidence is received by the Board. The commenter asserted that waiting to provide such notice until issuance of the Board decision creates needless confusion and delay. As we discuss above in the context of VBA decisions, VA does not have resources available to quickly identify evidence submissions as untimely and provide notice to the veteran. VA must prioritize processes which increase efficiency and reduce average processing times, so that the new system as a whole will be successful. As the Federal Circuit has stated, “VA possesses a duty not only to individual claimants, but to the effective functioning of the veterans compensation system as a whole. Moreover, because the VA possesses limited resources, these dual obligations may sometimes compel it to make necessary tradeoffs.”

Veterans Justice Grp, LLC

v.

Sec'y of Veterans Affairs,

818 F.3d 1336, 1351, 1352, 1354 (Fed. Cir. 2016). However, VA will take the comment under consideration, and will explore the possibility of developing additional procedures for identification of untimely evidence in the future to the extent technological and other resources lessen the associated administrative burden. VA further notes that there are already procedures in place to inform veterans of the applicable evidence submission periods and the consequences of untimely evidence submission. When veterans receive notice of their initial decisions, they are informed of their available review options and the periods during which they may submit evidence based on the options they select. Furthermore, as the commenter acknowledged, if evidence is received untimely from a veteran, he or she is informed of that fact when a Board decision is issued, pursuant to proposed 38 CFR 20.801(b)(3). A veteran may resubmit the evidence with a supplemental claim within one year of the Board's decision and preserve the effective date associated with his or her appeal to the Board. VA makes no changes based on this comment.

Under 38 CFR 20.302(a), when a Board hearing is requested in the Notice of Disagreement, the Board's decision will include consideration of testimony and evidence submitted by the appellant or his or her representative at the hearing and within 90 days following the hearing. Under 38 CFR 20.303(b), when a Board hearing is not requested, but the veteran elects to submit additional evidence, the Board's decision will include consideration of evidence submitted with the Notice of Disagreement and within 90 days following receipt of the Notice of Disagreement. Several commenters expressed concern or confusion regarding these proposed evidence submission periods.

Specifically, one commenter expressed concern that veterans who submit evidence prior to a hearing will not be notified that such evidence may not be considered by the Board unless it is resubmitted during the 90-day period following the hearing. The commenter suggested that the Board advise the appellant on the types of actions available and that the evidence needs to be presented at the hearing to be considered by the Board. Additionally, the commenter expressed appreciation for the discretionary provisions contained in § 20.302(b) and (c), which allows for a 90-day evidence submission period even when a hearing request is withdrawn or the appellant does not appear for a scheduled hearing.

When veterans receive notice of their initial decisions, they are informed of their available review options and the periods during which they may submit evidence based on the options they select. Pursuant to § 20.705(b), a Veterans Law Judge presiding over a hearing may find it appropriate to discuss applicable evidence submission rules and how those rules apply to an individual veteran's circumstances. Furthermore, if evidence is received untimely from a veteran, he or she will be informed of that fact (and the options available to have that evidence reviewed) when a Board decision is issued, pursuant to section 7104(d)(2) as implemented in proposed 38 CFR 20.801(b)(3). In light of the statutory direction to provide notice in the Board decision and the procedures already in place in the proposed regulations to inform veterans of the applicable evidence submission periods and consequences of untimely evidence submission, VA makes no changes based on this comment.

One commenter asserted generally that limiting veterans' ability to submit evidence to certain time periods represented a shortcoming in the new system. Another commenter stated that the 90-day evidence submission window was concerning regarding FOIA requests, specifically, since FOIA procedures take time to complete. Finally, another commenter suggested that representatives do not have an opportunity to review the claims file, compile relevant evidence, and submit argument in support of the veteran's appeal prior to issuance of a Board direct review decision, and that a reasonable time period for submission of a written statement addressing relevant evidence and argument must be written into the regulations. Although the modernized review system confines evidence submission to certain periods, the statute and proposed regulations do not—apart from creating a faster review process—restrict a representative's ability to submit argument. The design of the system favors advocacy early in the appeals process because this is the most efficient way to reach a comprehensive and speedy decision. VA is confident that veterans' advocates will be able to meet this expectation. VA made no changes based on these comments.

Another commenter, in addressing proposed 38 CFR 20.302 and 20.303, expressed concern that those regulations created a timeframe, between the agency of original jurisdiction's initial decision and the Board hearing, or the agency of original jurisdiction's initial decision and submission of a Notice of Disagreement, during which a veteran could introduce evidence into the record that would not be considered by the Board. The commenter recommended that VA include provisions allowing for submission of evidence during those periods, in part because the commenter interpreted the

provisions for evidence submission in 38 CFR 20.302 and 20.303 as inconsistent with each other.

The proposed time periods for evidence submission included in 38 CFR 20.302 and 20.303 are not inconsistent with each other. Rather, they represent two separate review options defined by the statute. For each option, the statute clearly specifies what evidence is included in the record before the Board based on when the evidence is submitted. Because the proposed regulations track the plain language of the statute, no changes will be made in response to the comment. VA notes that, should a veteran submit evidence untimely, he or she generally may resubmit the evidence with a supplemental claim within one year of the Board's decision and preserve the effective date associated with the appeal to the Board. VA makes no changes based on these comments.

Finally, two commenters' discussions reflected general confusion regarding the timeline for submitting additional evidence under 38 CFR 20.303(b), where the veteran elects in the Notice of Disagreement to submit additional evidence without a Board hearing. One commenter asked if a veteran had a total of 150 days to submit additional evidence following the initial decision—60 days after the initial decision and 90 days after submission of the Notice of Disagreement. Another commenter remarked that claimants only have 60 days to appeal to the Board, which is not enough time to compile relevant evidence. VA initially notes that the commenters are mistaken that veterans only have 60 days to appeal to the Board—this deadline only applies to simultaneously contested claims. In other cases, the veteran has one year from the date of notice of a VA decision to appeal to the Board. However, if the evidence submission option is chosen (but no hearing), the veteran may submit evidence with the Notice of Disagreement and then has a total of 90 days, starting on the day the Notice of Disagreement is received, to submit additional evidence for consideration by the Board. Evidence submitted before or after this 90-day window will not be considered by the Board. The commenters did not suggest specific amendments; therefore, VA makes no changes based on these comments.

L. Comments Concerning § 20.600—Applicability

One commenter stated that the regulations concerning hearings on appeal did not clearly identify which rules pertain to legacy appeals and referenced the applicability provision at § 20.600(b). The commenter suggested generally that, to avoid confusion, VA provide more clarity in this area. The commenter did not make a specific suggestion for change. VA has attempted in the regulation to be as clear as possible regarding which regulations apply to legacy claims and which apply to claims in the modernized review system. For this reason, and because the commenter did not make a specific suggestion for change, VA made no changes based on the comment.

M. Comments Concerning § 20.602—When a Hearing Before the Board of Veterans' Appeals May Be Requested in a Legacy Appeal; Procedure for Requesting a Change in Method of Hearing; and § 20.703—When a Hearing Before the Board of Veterans' Appeals May Be Requested; Procedure for Requesting a Change in Method of Hearing

Proposed 38 CFR 20.602 and 20.703 describe how the Board will determine the method of a requested hearing in the legacy and modernized review systems, respectively. One commenter asserted that the Board should continue to allow veterans to select from among available hearing options, rather than the Board making the initial selection based on the earliest practical date and allowing the veteran one request for a change in hearing method. Amendments to hearing regulations for legacy and new system appeals are necessary in light of the Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits Improvement Act of 2016, Public Law 114-315. Section 102 of Public Law 114-315, by amending 38 U.S.C. 7107, directs the Board, upon request for a hearing, to determine what type of hearing it will provide an appellant, while affording the appellant the opportunity to request an alternative type of hearing once the Board makes its initial determination. Proposed 38 CFR 20.602 and 20.703 are necessary to comply with Public Law 114-315; therefore, VA makes no changes to the regulations based on this comment.

Another commenter asserted that the hearing method determinations proposed in 38 CFR 20.602 and 20.703 would only be effective if the veteran could choose his or her preferred method. The commenter requested an explanation as to how the Board planned to determine the method of hearing after such a preference was expressed. In accordance with revised section 7107 and the regulations as proposed, if a veteran requests a different hearing method than the one initially assigned by VA, the veteran's request will be honored. However, VA will only honor one such request. As the commenter did not suggest an amendment, VA makes no changes based on this comment.

N. Comments Concerning 20.700—General

One commenter suggested VA retain the option for veterans to submit electronic records of oral argument to the Board of Veterans' Appeals in lieu of participating in a formal hearing. The commenter stated that submitting oral argument would be easier for some veterans, including those who live in a rural area, since it may be difficult for those veterans to travel to the nearest VA facility for a formal hearing. VA proposed removing the provisions to allow for submission of oral recording in light of the benefits of in-person testimony, as well as the ability to submit argument through other means when testifying at an in-person hearing is not practical or desired. Veterans are able to request a video hearing before a Veterans Law Judge, which benefits rural veterans. Veterans are also able to submit photographs and other visual evidence during an appropriate evidentiary window. Finally, veterans and their representatives are able to submit written argument, including an informal hearing presentation.

Section 504 of the Rehabilitation Act requires Federal agencies to provide individuals with disabilities meaningful access to programs, activities and facilities. Section 794(a) of title 29, United States Code, states that “[n]o otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity conducted by any Executive agency.” VA regulations implementing the Rehabilitation Act are found at 38 CFR part 15. VA is prohibited from “[d]eny[ing] a qualified individual with handicaps an opportunity to participate in or benefit from the aid, benefit, or service.” 38 CFR 15.130(b)(1)(i). Also, VA is required to “furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency.” 38 CFR 15.160(a)(1). The term “[a]uxiliary aids means services or devices that enable persons with impaired sensory, manual or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs for activities conducted by the agency.” 38 CFR 15.103.

VA's proposed amendments to 38 CFR 20.700 do not indicate any intent by the Department to forego its obligations under the Rehabilitation Act and implementing regulations. VA did not propose any amendments to 38 CFR part 15. Rather, as required by the Rehabilitation Act and implementing regulations, if an individual has a disability that prevents or limits his or her ability to submit a written argument to the Board or attend a hearing at a VA facility and informs the Board that he or she needs an accommodation that will enable submission of an argument, the Board will make every effort to meet that need, including accepting an oral argument on audio cassette. However, given the fact that 38 CFR part 15 governs Department efforts to ensure that individuals with disabilities can participate in all VA programs and that no one has submitted an oral argument on audio cassette to the Board in recent years, we do not believe it is necessary to maintain the reference to submission of oral argument on outdated technology in the new rule. VA notes that, prior to the changes 38 CFR 20.700 that we proposed and here confirm as final, paragraph (d) of that section made submission of argument by audio cassette available whenever an appellant “cannot, or does not wish to” appear. That provision made submission of argument by audio cassette much more broadly available than is necessary to comply with the Rehabilitation Act. Accordingly, the elimination of this provision does not create any tension with VA's continued compliance with its regulations implementing the Rehabilitation Act.

The commenter also states that VA should consider the efficiencies to the adjudication process of submission of recordings in lieu of formal hearings. VA strongly disagrees. Any such efficiencies are greatly outweighed by the benefits of an in-person hearing, the purpose of which is to elicit relevant and material testimony, assess the credibility of witnesses, resolve disputed issues of fact, and pose follow-up questions to witnesses and representatives. 38 CFR 20.700(b).

As for the suggestion that argument submitted on an audio cassette would be “attractive to the schedules” of clinics and their clients, VA points out that, under § 20.704(a)(1) and (c), Board hearings are “scheduled at the convenience of appellants and their representatives with consideration of the travel distance involved,” and a written request to reschedule a hearing “may be made at any time up to two weeks prior to the scheduled date of the hearing if good cause is shown.”

VA therefore makes no changes based on these comments.

O. Comments Concerning § 20.705—Functions of the Presiding Member

Three commenters stated that § 20.705(b)(7), allowing Veterans Law Judges to reject evidence presented during a hearing on the basis of irrelevance, contradicts the pro-veteran nature of Veterans' law. The commenter requested that it be removed, asserting that veterans should be permitted to submit whatever evidence they wish into the record and that the Judge would be free to assess the evidence's probative value. Paragraph (b)(7) states that it is the duty of the presiding member to exclude documentary evidence, testimony, and/or argument which is not relevant or material to the issue or issues being considered or which is unduly repetitious. Paragraph (b)(7) may not be used to exclude evidence that is relevant to the issue or issues on appeal. The commenter is correct that veterans may submit evidence and/or testimony into the record, and that the function of the presiding Member is to assess the evidence's probative value. Rather, the purpose of paragraph (b)(7) is to allow the presiding Member to focus hearing testimony on the issue or issues on appeal.

Another commenter expressed concern that VA is seeking to abrogate

Bryant

v.

Shinseki,

23 Vet.App. 488 (2010) by including paragraph (b)(7). These regulations do not and do not intend to limit the holding of

Bryant.

This regulation will assist in providing a focused, directed hearing which will be as assistive as possible to the veteran in substantiating the claim consistent with

Bryant.

However, based on the commenters' concerns, VA will amend § 20.705(b)(7) to state that the duties of the presiding Member include “determining whether documentary evidence, testimony, and/or argument is relevant or material to the issue or issues being considered and not unduly repetitious”. This amendment makes clear that VA will not exclude any evidence, but rather, will assist the veteran in focusing on evidence that helps to establish the elements of the claim. For example, if the VA decision on appeal contained a binding favorable finding as to the veteran's current diagnosis, the presiding Member may instruct the veteran that no further testimony or other evidence is needed as to the current diagnosis, as that element of the claim has already been established.

P. Comments Concerning § 20.714—Correction of Hearing Transcipts

A commenter addressed 38 CFR 20.714, which requires a veteran to seek correction of the hearing transcript within 30 days “after the date that the transcript is mailed” to the appellant. The commenter explains that this requirement is not accompanied with an assurance that a copy of the transcript will be provided to the veteran (unless requested) and points out that the veteran will not know to ask for the transcript or seek correction within such a limited timeframe unless the Board notifies him or her. Under § 20.712, if the appellant or representative requests a copy of the written transcript in accordance with § 1.577, the Board will furnish one copy to the appellant or representative. It would be unnecessary and wasteful to provide written transcripts where they are not requested; instead the veteran is given the choice to request a transcript. As stated, upon request, the transcript will be provided. VA has made no changes based on these comments.

Q. Comments Concerning § 20.715—Loss of Hearing Tapes Or Transcripts—Motion for New Hearing

In proposing § 20.715, the title read: “Loss of hearing recordings or transcripts—motion for new hearing.” The inclusion of the word “motion” in the title was an error. Motions are no longer required, as the content of the rule makes clear. This final rule revises “motion” to read “request”.

In regard to § 20.715(a)(2), one commenter stated that a veteran would be unfairly disadvantaged in the event that a recording is lost through no fault of his or her own, and suggested that affording the opportunity to submit argument and evidence within 60 days would be more equitable than only giving the veteran 30 days to respond to a letter asking whether a new hearing was requested.

This rule eliminates the prior requirement that a motion for a new hearing be made by the veteran prior to VA offering a new hearing. This formality proved unnecessary in practice because VA often offered a new hearing without a motion. VA has proposed limiting the time period to 30 days in the interest of expediting the case. It is intuitive that a veteran who had recently appeared for a hearing would be responsive to an offered choice. Giving the veteran a choice in the face of a lost or destroyed recording is consistent with the general theme of the Appeals Modernization Act. Regarding the commenter's suggestion

that VA offer a third option—an additional 60 days to submit evidence or argument in lieu of a new hearing, this is not necessary as this option already exists. The veteran has 90 days following the Board hearing in which to submit evidence and may submit argument at any time prior to the Board decision. Accordingly, the veteran would have already had an opportunity to submit evidence and argument. VA has made no changes in response to this comment.

R. Comments Concerning § 20.800—Order of Consideration of Appeals

One commenter expressed concern that the proposed 38 CFR 20.800 removes the authority of the Chairman of the Board of Veterans' Appeals to expedite (advance on docket) cases on his or her own motion. The commenter is mistaken, as § 20.800 maintains the authority of the Chairman to advance cases on the docket on the Chairman's own motion. (“A case may be advanced on the docket to which it is assigned on the motion of the Chairman . . .”)

Several commenters raised concerns regarding claims in which the veteran chooses to appeal to the Board again following a Board remand and readjudication by the agency of original jurisdiction. Commenters suggested that such appeals must be automatically returned to the Board after the readjudication, and the original docket date restored. Automatically returning appeals to the Board without the veteran's affirmative election would be inconsistent with the AMA. This facet of the current regulatory system means that veterans seeking further review are forced to return to the Board by default, regardless of whether this is their choice, or the most advantageous option. At the same time, the Board is compelled to expend limited resources on cases where the claimant may no longer disagree with VA's decision, delaying adjudication of new appeals.

In contrast, the AMA provides veterans with review choices whenever a VA decision is issued, without regard to whether the decision follows a remand from the Board. A veteran whose case is returned by the Board for readjudication has the same options as a veteran seeking review for the first time. In many instances, one of the agency of original jurisdiction lanes will be a better review option for a veteran whose case is adjudicated following remand, rather than an appeal to the Board. VA makes no changes based on this comment.

S. Comments Concerning § 20.801—The Decision

Multiple commenters asserted that the general statement required under proposed 38 CFR 20.801(b)(3) will not adequately inform veterans of the evidence that was not considered in a Board decision due to untimely submission. The commenters recommended that the Board decision include a more detailed description of the evidence that was not considered, to include noting the date unconsidered evidence was submitted. One of those commenters also asserted that the proposed regulations did not create an avenue for informing a veteran what recourse he or she has when evidence is not considered by VA. The law requires that each decision will contain a general statement indicating whether evidence submitted while the record was closed was not considered, and notice of the options available to have such evidence considered.

See

AMA section 2(w)(2)(C). The information in the decision should be the avenue for the pertinent information the veteran requires to prevail on the claim. As the precise procedures for providing more detailed notice may change based on technological systems, as well as other resources, VA will continue to address this matter through internal procedural guidance consistent with the law and regulations. VA made no changes based on these comments.

T. Commen

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