Bonds: Any formal claim for one benefit can raise an informal claim for another (applies to claims filed before Mar. 24, 2015)

Bonds v. McDonough, 35 Vet.App. 355 (2022)

HELD: A formal claim for compensation under 38 U.S.C. § 1151 CAN ALSO SERVE AS A CLAIM FOR COMPENSATION UNDER 38 u.s.c. § 1110 under the regulation in effect prior to March 24, 2015.

Summary: Veteran filed a VA Form 21-526 explicitly requesting service connection under 38 U.S.C. § 1151 for a leg amputation that he claimed was caused by VA’s inadequate care of his wound. He argued that he was diabetic and should have received extra care. The record showed that he was diagnosed with diabetes (a listed chronic condition under 38 C.F.R. § 3.309(a)) within a year of separation from service.

The Court held that VA has a duty to liberally construe claim forms - and because the veteran’s claim under § 1151 was received when the regulations allowed for informal claims, VA was required to identify all explicitly- and implicitly-raised claims. Even if a request for benefits under § 1151 cannot encompass a claim for § 1110 benefits, it can raise a separate, informal claim for § 1110 benefits.

Hatfield: Informed consent, 38 U.S.C. § 1151

Hatfield v. McDonough, docket no. 19-7165 (Mar. 8, 2021)

HELD: In McNair v. Shinseki, 25 Vet.App. 98, 100 (2011), the Court held that “deviations from the informed consent requirements of 38 C.F.R. § 17.32 are minor and immaterial if a reasonable person in similar circumstances would have proceeded with the medical treatment even if informed of the foreseeable risk.” The issue addressed by the Court here was whether this exception to the informed-consent requirement applies where VA obtains no consent. The Court held that “McNair applies only when VA has attempted to obtain informed consent but obtains consent that contains some defect.” It does not apply where VA does not obtain any consent at all. The Court reversed the Board’s decision and granted benefits.

SUMMARY: Veteran was treated for Hodgkin’s disease with radiation therapy at VA facility. There was no evidence of informed consent in his medical records. The radiation eliminated the Hodgkin’s disease, but caused severe pulmonary complications that resulted in his death. His wife applied for DIC and death pension benefits under 38 U.S.C. § 1151 and was repeatedly denied. The present appeal arises from a 2010 request to reopen. After eight Board decisions and two appeals to the Court, the Court finally ended her “long march through the VA system.”

The Court explained the requirements for establishing service connection under § 1151 (additional, qualifying disability; actual causation; proximate causation – carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault, or event not reasonably foreseeable.” In this case, there was no dispute that there was an additional, qualifying disability (pulmonary complications) that were actually caused by VA treatment (radiation). The only disputed element was regarding proximate cause.

To establish proximate cause (carelessness, etc.), claimant must show either (1) VA failed to exercise the degree of care expected of a reasonable health care provider OR (2) VA provided the treatment without obtaining informed consent. 38 C.F.R. § 3.361(d)(1). Informed consent must meet the requirements of 38 C.F.R. § 17.32 – but “minor deviations” that are “immaterial under the circumstances of the case” will not defeat a finding of informed consent.” 38 C.F.R. § 3.361(d)(1)(ii).

In this case, the Board determined that informed consent can be established EITHER (1) through evidence of a document signed by the patient or representative showing that the practitioner explained the procedure, its benefits, and risks OR (2) by showing that a reasonable person would have proceeding with the treatment even if informed of the risks. This is a misstatement of the McNair rule – and is contrary to the plain language of § 3.361 and 17.32, which do not contemplate the “reasonable person” alternative exception to establishing informed consent where there is no evidence of any consent at all.

McNair’s “reasonable person” alternative provides an exception to defective consent – when the defect is a “minor deviation” from 17.32’s requirements. It does not provide an alternative to a finding of informed consent. In McNair, there was evidence of an attempt to obtain informed consent – but it was defective in that it did not provide information of a specific potential risk. The McNair Court held that “VA’s failure to inform a patient about a potential adverse effect did not defeat a finding of informed consent if a reasonable person faced with similar circumstances would have proceeded with the treatment.” Here, the Court held that “McNair does not apply when there is no attempt to obtain consent (as opposed to where defective consent has been obtained).”

Here, the Board made a factual finding that there was no evidence of informed consent in the record – yet attempted to use the McNair rule to excuse the wholesale lack of consent as a “minor deviation.” The Court found that this “would effectively make a finding of a lack of informed consent meaningless because the reasonable person standard from McNair could excuse any failure to document informed consent in almost every situation.” Because the Board made the necessary factual findings – including that there was no attempt to obtain consent – and because it erred in applying the McNair rule to this case – the Court reversed the Board’s decision and remanded for the Board to assign the correct effective date for the award of benefits.

Burkhart: Recipient of DIC based on service connection under 38 U.S.C. § 1151 is not entitled to home loan guaranty benefits

Burkhart v. Wilkie, docket no. 2019-1667 (Fed. Cir. August 21, 2020)

HELD: “[C]hapter 37 home loan guaranty benefits are available only to, as relevant here, ‘the surviving spouse of any veteran … who died from a service-connected disability’” – and this does not extend to veterans who are service connected under 38 U.S.C. § 1151. 

SUMMARY: Veteran’s surviving spouse received dependents’ benefits (DIC) under 38 U.S.C. § 1151 because the veteran died while in VA’s care. The widow sought a certificate of eligibility (COE) for a VA home loan in 2007, but she never finalized a loan. In 2013, she requested a new COE and was denied because her late husband had no service-connected conditions during his lifetime – and home loan guaranty benefits under Chapter 37 are only available to the surviving spouse of a veteran who died from a service-connected condition. 

She appealed to the CAVC, and the Court held that she was not eligible for a home loan guaranty under the plain language and legislative history of 38 U.S.C. §§ 1151 and 3701. The Court held that 38 U.S.C. § 3721 – the “incontestability provision” – “applies only to the relationship between the Government and lending institutions …, not the Government and COE recipients.” Finally, the Court denied her requests for equitable relief, finding that to grant such relief “would expand the scope of [its] jurisdiction.” 

She appealed to the Federal Circuit, which upheld the CAVC’s opinion on all three points. 

Burkhart: DIC, 38 U.S.C. § 1151, & VA home loan guaranty

Burkhart v. Wilkie, docket no. 16-1334 (Jan. 3, 2019)

HELD: Surviving spouse of veteran whose death was service connected under 38 U.S.C. § 1151 and who is thus entitled to DIC benefits is not entitled to home loan guaranty benefits under Ch. 37. 

SUMMARY: Surviving spouse was granted dependency and indemnity compensation (DIC) after her husband’s death was deemed service connected under 38 U.S.C. § 1151. She sought and obtained a certificate of eligibility (COE) for a VA home loan in 2007, but never entered into a loan agreement. In 2013, she again requested an eligibility determination for a loan guaranty and was informed that she was not eligible and that the 2007 COE was issue in error. 

On appeal, the Court reviewed the relevant statutory provisions and determined that she was not eligible under the plain language or the legislative history of 38 U.S.C. § 1151 or Ch. 37. The Court also determined that the “incontestability” provision of 38 U.S.C. § 3721 applies to the relationship between the government and lending institutions – not between the government and those who are eligible for a loan guaranty. Finally, the Court addressed the appellant’s arguments regarding the Court’s ability to provide relief based on its equitable powers. The Court acknowledged that while it has equitable authority, “that authority is constrained by the jurisdiction Congress conferred on the Court.” The Court discussed the four equitable principles argued by the appellant – injunctive relief, equitable estoppel, laches, and waiver – and determined that none were available in this case as a form of relief. 

FULL DECISION

Ollis: 38 U.S.C. § 1151, REFERRAL FOR NON-VA TREATMENT

Ollis v. Shulkin, docket no. 2016-1315 (Fed. Cir. May 26, 2017)

HELD: “[W]hen recovery is predicated on a referral theory involving an unforeseeable event under § 1151(a)(1)(B), § 1151(a)(1) requires that VA medical care proximately cause the medical treatment or care … during which the unforeseeable event occurred.” In other words, in cases where a disability results from an unforeseeable event due to a medical procedure performed by a non-VA doctor or in a non-VA facility, the question of causation for § 1151 purposes is whether the medical procedure itself “was a remote consequence of VA treatment.”

SUMMARY: Veteran Paul Ollis filed a claim for service connection under 38 U.S.C. § 1151 for disabilities that resulted from a medical procedure (mini-MAZE) that was allegedly recommended by his VA doctor, but performed by a private doctor in a non-VA facility. Although Mr. Ollis’s VA doctor had recommended the mini-MAZE procedure, his private doctor referred him to the physician who actually performed the procedure. Mr. Ollis asserted that his phrenic nerve was damaged during the procedure, causing paralysis of the diaphragm that resulted in shortness of breath and decreased lung function.  

The VA regional office and the Board of Veterans’ Appeals denied service connection for these disabilities under § 1151, and the Veterans Court affirmed. In its decision, the Court noted that the procedure was performed by a non-VA doctor in a non-VA facility, and that there was no contractual relationship between VA and the doctor. The Court also determined that there was “no due process right to notice that referral to a private doctor could affect benefits under § 1151(a).”

On appeal, the Federal Circuit first discussed the history of 38 U.S.C. § 1151, which provides benefits for nonservice-connected conditions to veterans with disabilities resulting from VA medical care. The statute requires that the injury was “caused by” VA care and that the “proximate cause” was “carelessness, negligence, lack of proper skill, error in judgment, or similar instances of fault on the part of the [VA] . . . [or] an event not reasonably foreseeable.” The relevant question addressed by the Court was “how to construe the statutory requirements of § 1151 when the disability-causing event occurred during a medical procedure not performed by a VA doctor or in a VA facility,” which the Court labelled “referral situations.”

The Court examined the two alternative “proximate causation” requirements – the negligence requirement (§ 1151(a)(1)(A)) and the “event not reasonably foreseeable” requirement (§ 1151(a)(1)(B)).

The standard for proving negligence under § 1151(a)(1)(A) is similar to the standard in medical malpractice cases: “It requires that VA medical care actually cause the claimant’s disability . . . and that, in providing such care, VA’s failure ‘to exercise the degree of care that would be expected of a reasonable health care provider proximately caused the disability.’” This proximate cause requirement “incorporates traditional tort law notions of proximate cause,” which “defines its scope in terms of foreseeability, extending only to those foreseeable risks created by the negligent conduct.”

The Veterans Court rejected Mr. Ollis’s argument that VA was at fault for negligently referring him to a particular doctor because there was no proximate cause between VA negligence and the injury – and the Federal Circuit saw no legal error in the Court’s analysis on this point. However, the Federal Circuit found that the Veterans Court did not address the remaining question of whether Mr. Ollis’s VA doctors were negligent under § 1151(a)(1)(A) for recommending the mini-MAZE procedure in the first place.

In examining the alternative proximate cause requirement under § 1151(a)(1)(B), the Federal Circuit noted that a theory under this provision in a referral situation requires the interpretation of the statutory terms “not reasonably foreseeable,” “proximate cause of the disability or death,” and “caused by.” The Court stated that “not reasonably foreseeable” is an event that “‘a reasonable health care provider would not have considered to be an ordinary risk of the treatment provided’ and not ‘the type of risk that a reasonable health care provider would have disclosed in connection with . . . informed consent,’” quoting 38 C.F.R. § 3.361(d)(2). The Federal Circuit stated that the Veterans Court did not address this requirement.

In order to satisfy this alternative “proximate cause” requirement, the “veteran need only show that the disability or death was proximately caused by the unforeseeable event, and a showing of fault is not required.” The Federal Circuit provided an example of “a situation in which an unforeseeable event is not the proximate cause of a disability” – i.e., “if phrenic nerve severance would not foreseeably cause shortness of breath or decreased lung function.” The Federal Circuit stated that it was clear in this case that “an unforeseeable event such as phrenic nerve severance can be the proximate cause of the disability,” and thus satisfy the proximate cause requirement of § 1151. The Veterans Court also did not address this requirement.

The Federal Circuit stated, however, that even if Mr. Ollis satisfied the “unforeseeable event” requirement of § 1151(a)(1)(B), he would still need to satisfy the “caused by” language of § 1151(a)(1). The Court stated that “[b]y definition a claimant cannot show that an injury that is unforeseeable was proximately caused by VA medical care,” but the Court added that “it seems quite clear that Congress intended some concept of remoteness to be inherent in the cause requirement of § 1151(a)(1)” – and that this “remoteness requirement is the same as the traditional proximate cause requirement but without fault and applicable to a limited sequence of events.” In other words, this is a “lesser proximate cause requirement.” In this case, “only the performance of the mini-MAZE procedure and not the nerve severance or the resulting shortness of breath and decreased lung function must be proximately caused by VA medical treatment to satisfy the cause requirement of § 1151(a)(1).”

The Court remanded the case to the CAVC to address the question of “whether VA medical care proximately caused the mini-MAZE procedure,” and summarized its holding on this point as follows:

[W]hen recovery is predicated on a referral theory involving an unforeseeable event under § 1151(a)(1)(B), § 1151(a)(1) requires that VA medical care proximately cause the medical treatment or care (here, the mini-MAZE procedure) during which the unforeseeable event occurred (here, the severance of the phrenic nerve). Section 1151(a)(1)(B) further requires that the unforeseeable event – phrenic nerve damage – proximately cause the disability. As such, the chain of causation has two components (neither of which requires fault) – i.e., proximate cause between VA medical care and the treatment, and proximate cause between the unforeseeable event and the disability.

(emphasis added). The Federal Circuit identified the CAVC’s legal errors as framing the question as (1) whether Mr. Ollis’s disability was a remote consequence of VA treatment, and (2) whether VA treatment caused Mr. Ollis to use a particular private doctor – when the relevant question was whether the VA treatment proximately caused Mr. Ollis to undergo the mini-MAZE procedure.

Mr. Ollis also argued that VA violated his due process rights by failing to inform him that referral to a private facility for the mini-MAZE procedure “could extinguish his eligibility for benefits under § 1151(a).” The Federal Circuit rejected this argument and held that “[t]here is no due process right to notice regarding conditions that might in the future affect an individual veteran’s right to monetary benefits … before the veteran incurs an injury or applies for such benefits.”

Advocacy note: This second holding is important to keep in mind, particularly with VA’s and veterans’ increasing reliance on non-VA doctors through the Choice program. Since VA is under no legal obligation to inform veterans that they may lose eligibility for § 1151 benefits if something goes wrong when they use a private provider, advocates should inform their clients of this.

FULL DECISION