Department of Veterans Affairs.
Final rule.
The Department of Veterans Affairs (VA) is amending its regulations governing the accreditation of representatives of claimants for veterans' benefits. As amended, the regulations require service organizations to recertify the qualifications of their accredited representatives every 5 years, and to notify VA when requesting cancellation of a representative's accreditation based upon misconduct or lack of competence, or if a representative resigns to avoid cancellation of accreditation for misconduct or lack of competence. They also clarify that VA's authority to cancel accreditation includes the authority to suspend accreditation. The purpose of these amendments is to ensure that claimants for veterans' benefits have responsible, qualified representation in the preparation, presentation, and prosecution of claims.
Michael G. Daugherty, Staff Attorney, Office of the General Counsel (022G2), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273–6315. This is not a toll-free number.
In a document published in the
After the notice of proposed rulemaking was published, Public Law 109–461 was enacted. Section 101 of Public Law 109–461, the Veterans Benefits, Health Care, and Information Technology Act of 2006, amends chapter 59 of title 38, United States Code, governing the recognition of individuals for the preparation, presentation, and prosecution of claims for benefits before VA. The amendments to chapter 59, among other things, require VA to: (1) Regulate the qualifications and standards of conduct applicable to accredited agents and attorneys; (2) annually collect information about accredited agents' and attorneys' standing to practice or appear before any court, bar, or Federal or State agency; (3) add to the list of grounds for suspension or exclusion of agents or attorneys from further practice before VA; and (4) subject veterans service organization representatives and individuals recognized for a particular claim to suspension and exclusion from further practice before VA on the same grounds as apply to agents and attorneys.
Section 101 of Public Law 109–461 also amends the fee provisions in chapter 59. Prior to the amendments, section 5904(c)(1) proscribed the charging of fees by agents and attorneys for services provided before a first final Board of Veterans' Appeals (Board) decision in a case. Under the amendments, accredited agents and attorneys may charge fees for representational services provided after the claimant files a notice of disagreement in a case, and may receive fees for representation directly from VA out of past-due benefits paid to claimants.
These various amendments, viewed together, indicate to us that Congress intends VA to treat agents and attorneys in the same manner for purposes of accreditation, suspension or cancellation of accreditation, and payment of fees. To properly implement the provisions of Public Law 109–461, VA will withdraw the provisions of the notice of proposed rulemaking relating to the accreditation of claims agents and will revisit the issue in a later rulemaking.
Based on the rationale described in this document and in the notice of proposed rulemaking, VA adopts the proposed rule as revised in this document.
Five commenters expressed overall support for the concept of periodic recertification of service organization representatives. One of these commenters, a national veterans service organization, while supporting the proposed rule, expressed concern with its ability to recertify hundreds of accredited representatives in a timely manner after VA publishes a final rule. The commenter asked for a 6-month grace period following the effective date of the regulation to achieve initial compliance and asked for a 4-month grace period for each subsequent recertification of an accredited representative. VA acknowledges that many service organizations, by virtue of the size of their operations, will face administrative challenges in recertifying representatives accredited by VA more than 5 years before the effective date of this rule. To address this issue, the rule is being made effective 90 days after the date of publication in the
The delayed effective date and phased initial compliance dates will permit organizations to make conforming changes to their procedures and phase-in the recertification requirements over a 15-month period. We believe that these accommodations are sufficient to avoid undue burdens on recognized organizations. Thereafter, VA intends that organizations will recertify their accredited representatives before the expiration of each 5-year certification period. Accordingly, we will not make further changes based on these comments.
One commenter, a national veterans service organization, requested clarification about proposed § 14.629(a). Specifically, the organization asked whether VA's amendment would require accredited service organization representatives “to take a written examination administered by VA every 5 years as a prerequisite for recertification” as proposed for agents in § 14.629(b)(2). The organization does not support such a requirement for its accredited representatives. Another commenter, a State veterans service organization, expressed similar concern that the rule would impose a new testing requirement for representatives.
It is not VA's intention to impose a new testing requirement for recertification of accredited representatives of service organizations under this rule. Section 14.629(a)
One commenter, a State veterans service organization, objected to the testing requirements in VA's accreditation regulations. However, the successful completion of an examination exists as a requirement for the initial accreditation of claims agents and the initial accreditation of county veterans' service officers recommended by a recognized State organization, not for service organization representatives in general. For the reasons discussed above relating to the enactment of Public Law 109–461, VA will withdraw the proposed amendments requiring periodic recertification of claims agents and will revisit the issue in a later rulemaking.
One commenter, a national veterans service organization, suggested that VA “better define the circumstances under which accreditation can be suspended” and “describe the maximum length of a suspension and the mechanism for obtaining reinstatement.” We agree.
Section 5904(b) permits VA to suspend or exclude agents and attorneys from practice before VA. VA has interpreted section 5902 and its predecessor, 38 U.S.C. 3402, as similarly authorizing the suspension or exclusion of accredited representatives of recognized service organizations.
Concerning the circumstances under which a representative may be suspended, VA believes that further clarification is unnecessary. The plain language of section 5904(b) authorizes VA to suspend or exclude from further practice before VA agents or attorneys found incompetent or to have engaged in misconduct. Congress' recent amendment of section 5902 in Public Law 109–461 codifies VA's longstanding interpretation of section 5902 by providing VA with authority to suspend the accreditation of representatives or exclude them from further practice before VA on the same grounds as apply to agents and attorneys. VA's decision to suspend or cancel an individual's accreditation will be based on the facts and circumstances of the particular case, with suspension being appropriate in cases involving extenuating circumstances or less egregious conduct not warranting permanent cancellation of accreditation.
Two commenters disagreed with the proposed requirement for an organization to inform VA of the reasons for requesting cancellation of a representative's accreditation under 38 CFR 14.633(a) when the request is due to the representative's misconduct or lack of competence or because the representative resigned to avoid cancellation of accreditation based upon misconduct or lack of competence.
One commenter, a national service organization, expressed concern that the proposed requirement would create an adversarial relationship between the employer service organization and employee representative and that it would create “a potential ethical conflict in situations where the representative is also represented by the organization to which he or she is accredited.” According to this organization, “[p]roviding the VA with information that may potentially adversely impact the representative's entitlement to VA benefits is in direct conflict with the organization's obligation as the individual's representative.” We disagree.
Under the law governing recognition, service organizations have a legal duty to assist VA in ensuring the competent representation of claimants before The Department. Section 5902(a) of title 38, United States Code, authorizes VA to recognize organizations for the limited purpose of ensuring competent representation of veterans in the preparation, presentation, and prosecution of claims for VA benefits.
Under current § 14.633(c) and (d), cancellation of accreditation is mandatory if the General Counsel finds that a representative engaged in misconduct or that a representative's performance before the Department demonstrates a lack of the degree of competence necessary to adequately prepare, present, and prosecute claims. However, under current § 14.633(a), service organizations may request cancellation of a representative's accreditation without informing VA of the reason for the request. The amendments to § 14.633(a), which
The practice of cross-accreditation is defined in 38 CFR 14.627(i) as “accreditation based on the status of a representative as an accredited and functioning representative of another organization.” Although cross-accreditation enhances claimants' opportunities for representation, it may conceal a representative's misconduct or incompetence absent the amendments to § 14.633(a) in this rule. Consider the situation where a representative, accredited by several organizations, is discharged for an offense at one organization that, if proven, would clearly lead to cancellation of accreditation by VA. If the organization does not report the reason for the discharge to VA when requesting cancellation of the representative's accreditation, the individual's accreditations through other organizations remain valid and the representative may continue to provide representation through those organizations. As a result, an individual who engages in unlawful, unethical or unprofessional acts or is incompetent may continue to represent veterans.
An additional rationale for the amendment requiring notification is the situation where a representative ends his or her affiliation with the organization in order to avoid cancellation of accreditation based on misconduct and then applies for accreditation through another organization that has no knowledge of the misconduct. In this case, without knowledge of the previous misconduct, VA would likely accredit the representative through the new organization based upon the new organization's unknowing certification. Certainly, if a representative engages in misconduct or provides incompetent representation at one organization, VA should not accredit the individual through another organization. This rule, which requires organizations to notify VA of the reason for requesting cancellation of a representative's accreditation if that reason involves misconduct or incompetence, closes these gaps and better ensures the competent representation of claimants. VA believes that these benefits greatly outweigh any potential effect on the employer/employee relationship between organizations and their representatives.
Regarding the commenter's concern about a potential adverse impact on a veteran's benefit entitlements by virtue of the obligation to inform VA of misconduct or incompetence, the service organizations' duty to inform provides VA with the information necessary to investigate misconduct and incompetence and ensure competent representation of claimants. It is not clear how information about a representative's misconduct or incompetence could adversely affect his or her own entitlement to VA benefits, unless the information relates to a scheme of fraud in obtaining benefits. Although an organization's primary purpose is to serve veterans, clearly this obligation does not include concealing fraud against the United States.
Recent changes in the law governing representation reinforce the obligation of service organizations to report a representative's misconduct or incompetence to VA. As discussed earlier, Public Law 109–461 amended 38 U.S.C. 5904(a) to require VA to regulate the qualifications and standards of conduct applicable to accredited agents and attorneys. Amended section 5902(b)(2) subjects veterans service organization representatives to suspension and exclusion from further practice before VA on the same grounds as apply to agents and attorneys. VA's statutory obligation to regulate the standards of conduct of accredited representatives as reflected in amendments to chapter 59 requires that organizations fulfill the reporting obligations described in § 14.633(a). In May 2007, we published in the
The commenter also expressed concern about the disclosure of disaccreditation information providing a basis for claimants to seek readjudication of numerous claims. However, VA decisions are final absent reopening based on new and material evidence or a finding of clear and unmistakable error (CUE) in a prior regional office or Board of Veterans' Appeals (Board) decision.
The commenter suggested that “very few individuals would be brought to the attention of the VA” for misconduct or incompetence because it is likely those individuals would resign before any allegations of misconduct or incompetence were ever substantiated. The situation described by the organization is foreseeable under current § 14.633(a) and under the amendments made by this rule. While VA recognizes that individuals may resign before any incompetence or misconduct is substantiated as a means to avoid a formal inquiry, this does not mean that VA should forego any effort to improve the quality of representation in cases where an organization has determined that misconduct or incompetence is sufficient to request cancellation of VA accreditation. With the rule in effect, the organization will be required to inform VA that a request to cancel accreditation under § 14.633(a) is based upon misconduct, incompetence, or resignation to avoid cancellation of accreditation for misconduct or incompetence. Upon receipt of such information, when appropriate, VA will initiate the procedures under 38 CFR 14.633(e) to determine whether the representative should be barred from further representation of VA claimants. As a result, VA, in cooperation with service organizations, will seek to ensure the competent representation of claimants.
Another commenter, a State organization, expressed disagreement with the proposed requirement to notify VA in cases of cancellation of accreditation for misconduct “unless [VA] assumes all potential civil liability for the accrediting organizations.” The organization expressed concern that it might incur civil liability as a result of a lawsuit brought by a representative after it provides accreditation cancellation information to VA.
VA cannot guarantee immunity from civil suit, nor can it underwrite an organization's potential liability resulting from civil suit. While VA acknowledges the potential for civil liability in a defamation action under state law for disclosure of employment-related information, this is a risk incurred by all employers in providing information about former employees to current or potential employers. The sole purpose of the requirement that service organizations disclose the reason for requesting cancellation of a representative's accreditation is to
Most States have statutory or common law provisions that establish truth as a defense in defamation actions and protect certain communications as privileged. Communication of accreditation cancellation information to VA by a service organization, without malice, and within accepted limits, would generally be privileged and thus not likely to result in liability for defamation damages. Even in the absence of a privilege, the publication of a true statement by a service organization to VA would not lead to liability for defamation.
This document contains provisions constituting collections of information at 38 CFR 14.629(a), 14.629(b), and 14.633(a) under the Paperwork Reduction Act (44 U.S.C. 3501–3521). The Office of Management and Budget (OMB) has approved these collections and has assigned OMB control number 2900–0018.
The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C 601–602). This rule will affect the 87 veterans service organizations recognized by VA to represent benefit claimants. However, the rule would not have a significant economic impact on these organizations because it would only impose certification requirements the costs of which would not be significant. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from the final regulatory flexibility analysis requirements of section 604.
Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. VA has examined the economic, legal, and policy implications of this final rule and has concluded that it is a significant regulatory action under Executive Order 12866 because it raises novel policy issues.
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any year. This final rule would have no such effect on State, local, and tribal governments, or on the private sector.
There are no Federal Domestic Assistance programs associated with this final rule.
Administrative practice and procedure, Claims, Courts, Foreign relations, Government employees, Lawyers, Legal services, Organizations and functions (Government agencies), Reporting and recordkeeping requirements, Surety bonds, Trusts and trustees, Veterans.
5 U.S.C. 301; 28 U.S.C. 2671–2680; 38 U.S.C. 501(a), 512, 515, 5502, 5902–5905; 28 CFR part 14, appendix to part 14, unless otherwise noted.
(a)
The revisions and addition read as follows:
(a) Accreditation may be suspended or canceled at the request of an agent, attorney, representative, or organization. When an organization requests suspension or cancellation of the accreditation of a representative due to misconduct or lack of competence on the part of the representative or because the representative resigned to avoid suspension or cancellation of accreditation for misconduct or lack of competence, the organization shall inform VA of the reason for the request for suspension or cancellation and the facts and circumstances surrounding any incident that led to the request.
(e) * * *
(2) * * *
(i) As to representatives, suspend accreditation immediately and notify the representative and the representative's organization of the interim suspension and of an intent to cancel or continue suspension of accreditation. The notice to the representative will also state the reasons for the interim suspension and impending cancellation or continuation of suspension, and inform the representative of a right to request a hearing on the matter or to submit additional evidence within 10 working days following receipt of such notice. Such time may be extended for a reasonable period upon a showing of sufficient cause.
(g) The General Counsel may suspend the accreditation of a representative, agent, or attorney, under paragraphs (b), (c), or (d) of this section, for a definite period or until the conditions for reinstatement specified by the General Counsel are satisfied. The General Counsel shall reinstate an individual's accreditation at the end of the suspension period or upon verification that the individual has satisfied the conditions for reinstatement.