Citation Nr: 0006812 Decision Date: 03/14/00 Archive Date: 03/17/00 DOCKET NO. 96-52 010 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Waco, Texas THE ISSUE Entitlement to accrued pension benefits based on unreimbursed medical expenses payable following the death of the veteran in an amount greater than $3,024.00. REPRESENTATION Appellant represented by: Texas Veterans Commission ATTORNEY FOR THE BOARD Heather J. Harter, Counsel REMAND The veteran served on active duty from December 1942 to October 1945. He died in April 1995. The appellant is his widow. During the pendency of this appeal, the appellant moved from Arkansas to Texas. Thus, although the Little Rock, Arkansas, RO initially had jurisdiction over her claim, responsibility for the claim now resides with the Waco, Texas, RO. Upon the death of a veteran, periodic monetary benefits to which he was entitled at death under existing ratings or decisions, or those based on evidence in the file at the date of death, and unpaid for a period not to exceed two years prior to death may be paid to his spouse. 38 U.S.C.A. § 5121 (West 1991 & Supp. 1999); 38 C.F.R. § 3.1000 (1999). At the time of the veteran's death, the law had provided for the payment of accrued benefits reflecting the period of a single year prior to the veteran's death. However, effective October 9, 1996, during the pendency of this appeal, the statute concerning payment of accrued benefits was amended to extend from one year to two years the period during which due and unpaid periodic monetary benefits could accrue and thereafter be paid to an eligible claimant. 38 U.S.C.A. § 5121 (West 1991 & Supp. 1997). 62 FR 35421, 35423, (1997). The law requires that in order for a spouse to be entitled to accrued benefits, the veteran must have had a claim pending at the time of his death or else be entitled to the benefits under an existing rating or decision. Jones v. West, 136 F. 3d. 1296 (Fed. Cir. 1998), cert denied, 525 U.S. 834 (1998). In the instant case, the appellant's claim for accrued pension benefits for the period in question stems from a June 1987 RO rating decision that granted the veteran's claim for nonservice-connected pension benefits in conjunction with a second rating decision in March 1994 which found that the veteran's disabilities rendered him housebound and held that the veteran was entitled to special monthly pension benefits on account of being housebound. Pension benefits are paid to veterans of a period of war who are unemployable due to nonservice-connected disability and who meet statutory income criteria, for the purpose of providing for basic necessities of life. Governing law and regulation provide for certain expenses, such as medical expenses, to be excluded from total income for the purpose of calculating entitlement to pension benefits. Unreimbursed medical expenses will be excluded when all of the following requirements are met: (i) They were or will be paid by a veteran or spouse for medical expenses of the veteran, spouse, children, parents and other relatives for whom there is a moral or legal obligation of support; (ii) They were or will be incurred on behalf of a person who is a member or a constructive member of the veteran's or spouse's household; and (iii) They were or will be in excess of 5 percent of the applicable maximum annual pension rate or rates for the veteran (including increased pension for family members but excluding increased pension because of need for aid and attendance or being housebound) as in effect during the 12- month annualization period in which the medical expenses were paid. 38 U.S.C.A. § 1503 (West 1991 & Supp. 1999); 38 C.F.R. § 3.272(g) (1999). A review of the evidence of record reflects that after the veteran was initially awarded pension benefits in June 1987, he and the appellant filed yearly pension eligibility verification reports, including an accounting of their unreimbursed medical expenses. These reports were utilized by the RO in calculating the veteran's VA pension benefit payments. Effective in September 1993, the rate of pension payable was increased due to the award of housebound pension benefits. A March 1994 notice shows that the couple's unreimbursed medical expenses were considered in the calculation of the pension benefits payable through December 1993. According to the notice, the figure of $3,679, representing continuing medical expenses was utilized from October 1993 until the veteran's death in April 1995. When the appellant submitted her application for accrued benefits following her husband's death, she documented additional medical expenses totaling $3,024 for the year prior to his death (April 1, 1994 through March 31, 1995). The RO used this amount to further reduce the income upon which the veteran's pension benefit was based and concomitantly increased the amount of pension benefit payable. This sum of money was then paid to the appellant, as accrued benefits. A paid-and-due audit furnished to the appellant in May 1999 reflects this adjustment. As set forth above, the law pertaining to accrued benefits was amended during the pendency of this appeal. Effective October 9, 1996, the statute concerning payment of accrued benefits was amended to extend the period during which due and unpaid periodic monetary benefits could accrue and thereafter be paid to an eligible claimant from one year to two years. 38 U.S.C.A. § 5121 (West 1991 & Supp. 1999). 62 FR 35421, 35423 (1997). The RO, however, calculated the appellant's entitlement to accrued benefits for one year prior to the veteran's death only. Because the appellant's claim for accrued benefits has remained open since April 1995, she is entitled to application of the law which is most favorable to her. See Karnas v. Derwinski, 1 Vet. App. 308, 311 (1991). For a relatively brief period of time, but effective during the pendency of this appeal, a United States Court of Appeals for Veterans Claims (Court) precedent prohibited the application of a rating regulation prior to its enactment. See Rhodan v. West, 12 Vet. App. 55 (consolidated with Haywood v. West, No. 97-25) (1998), vacated, Haywood v. West, No. 99-7056, slip op. (Fed. Cir. Oct. 28, 1999). This holding was subsequently vacated by the United States Court of Appeals for the Federal Circuit (Federal Circuit) and remanded to the Court for re- adjudication. Thus, currently, the Karnas rule, as cited above, is in force and must be adhered to by the Board. The Board therefore concludes that under the liberalized version of the law, the appellant is entitled to any accrued benefits which were due but unpaid during the two years previous to the veteran's death. As the RO has carefully calculated the accrued benefits due to the appellant for one year prior to the veteran's death, and as a review of the RO's calculation reveals it to be accurate, no further accrued benefits are due from this time period. However, the RO has not addressed whether any accrued benefits from the year prior to that, between April 1, 1993, and March, 31, 1994, may be payable to the appellant. Thus, upon remand, the appellant should be requested to provide information regarding any additional unreimbursed medical expenses paid by herself and the veteran between April 1, 1993, and March, 31, 1994. (As noted above, the figure of $3,679, representing continuing medical expenses of the veteran and the appellant, was already utilized to reduce the income calculation for VA benefits purposes from October 1993.) The RO may then utilize this information to calculate whether any additional accrued benefits may be payable to the appellant. To ensure that the VA has met its duty to assist the appellant in developing the facts pertinent to the claim and to ensure full compliance with due process requirements, the case is REMANDED to the RO for the following development: 1. The appellant should be provided the opportunity to submit a Medical Expense Report reflecting all unreimbursed medical expenses paid by herself and the veteran between April 1, 1993, and March, 31, 1994. 2. After the development requested above has been completed, the RO should again review the record, calculating whether accrued benefits are payable to the appellant for the period between April 1, 1993, and March, 31, 1994. If the benefit sought on appeal remains denied, the appellant and her representative should be furnished a supplemental statement of the case and given the opportunity to respond. Thereafter, the case should be returned to the Board, if in order. The Board intimates no opinion as to the ultimate outcome of this case. The appellant need take no action until so notified. The appellant has the right to submit additional evidence and argument on the matter the Board has remanded to the regional office. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment by the RO. The law requires that all claims that are remanded by the Board or by the Court for additional development or other appropriate action must be handled in an expeditious manner. See The Veterans' Benefits Improvements Act of 1994, Pub. L. No. 103-446, § 302, 108 Stat. 4645, 4658 (1994), 38 U.S.C.A. § 5101 (West Supp. 1999) (Historical and Statutory Notes). In addition, VBA's Adjudication Procedure Manual, M21-1, Part IV, directs the ROs to provide expeditious handling of all cases that have been remanded by the Board and the Court. See M21-1, Part IV, paras. 8.44-8.45 and 38.02-38.03. V. L. Jordan Member, Board of Veterans' Appeals