Office of the General Counsel
B-271810.8
June 6, 1996
The Honorable Alan K. Simpson Chairman The Honorable John D.
Rockefeller IV Ranking Minority Member Committee on Veterans'
Affairs United States Senate
The Honorable Bob Stump Chairman The Honorable G.V. Montgomery
Ranking Minority Member Committee on Veterans' Affairs House of
Representatives
Subject: Compensation for Disability Resulting from
Hospitalization, Treatment, Examination, or Vocational
Rehabilitation
Pursuant to section 801(a)(2)(A) of title 5, United States Code,
this is our report on a major rule promulgated by the Department of
Veterans Affairs (VA), entitled "Compensation for Disability
Resulting from Hospitalization, Treatment, Examination, or
Vocational Rehabilitation" (RIN: 2900-AH44). We received the rule
on May 21, 1996. It was published in the Federal Register as a
final rule on May 23, 1996. 61 Fed. Reg. 25787.
This rule adopts, with minor, nonsubstantive changes, an interim
rule amending VA adjudication regulations concerning compensation
for disability or death resulting from VA hospitalization, medical
or surgical treatment, or examination. Before the interim rule,
establishing entitlement to compensation for adverse results of
medical or surgical treatment required that VA be at fault or that
an accident occur. The interim rule, to conform the regulations to
a recent United States Supreme Court decision (Brown v. Gardner,
115 S.Ct. 552 (1994)), deleted the fault-or-accident requirement
and instead provided that compensation is payable for all but those
injuries that are the certain, or very nearly certain, result of
properly administered medical treatment to which a veteran
consented. (For example, if a veteran had
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consented to the amputation of a gangrenous leg, VA would not
compensate him for the loss of a limb.)
Enclosed is our assessment of the VA's compliance with the
procedural steps required by section 801(a)(1)(B)(i) through (iv)
of title 5 with respect to the rule. Our review indicates that VA
complied with the applicable requirements.
If you have any questions about this report, please contact
Kathleen E. Wannisky, Associate General Counsel for Operations, at
(202) 512-8326. The official responsible for GAO evaluation work
relating to the Department of Veterans Affairs is David P. Baine,
Director, Health Care Delivery and Quality Issues. Mr. Baine can be
reached at (202) 512-7101.
Robert P. Murphy General Counsel
Enclosure
cc: Mr. Thomas O. Gessel Director, Office of Regulations
Management Department of Veterans Affairs
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ENCLOSURE
ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY THE DEPARTMENT OF VETERANS AFFAIRS ENTITLED "COMPENSATION
FOR DISABILITY RESULTING FROM HOSPITALIZATION, TREATMENT,
EXAMINATION, OR VOCATIONAL REHABILITATION" (RIN: 2900-AH44)
(i) Cost-benefit analysis
As part of its implementation of Executive Order 12866, the
Department of Veterans Affairs (VA) prepared a cost and budgetary
analysis. The estimated cost to the government (and benefit to
veterans disabled as a result of VA hospitalization, medical or
surgical treatment) is $166.5 million during fiscal year 1996,
$244.7 million during fiscal year 1997, $327 million during fiscal
year 1998, $413.6 million during fiscal year 1999, and $504.3
million during fiscal year 2000. The estimated 5-year benefit cost
is $1,656,100,000. A copy of that analysis was provided to the
U.S. General Accounting Office when the final rule was submitted
on May 21, 1996.
(ii) Agency actions relevant to the Regulatory Flexibility Act,
5 U.S.C. §§ 603-605, 607 and 609
Pursuant to section 605(b) of the Act, VA certified in the
preamble to the interim rule (60 Fed. Reg. 14222, 14223 (March 16,
1995)) that the rule would not have a significant economic impact
on a substantial number of small entities as they are defined in
the Regulatory Flexibility Act. Therefore, it was not required to
prepare an initial or final regulatory flexibility analysis under
sections 603 and 604 of the Act. For the same reason, sections 607
and 609 are inapplicable.
According to a VA official, VA's section 605(b) certification
was not provided separately to the Small Business Administration
(SBA) Chief Counsel for Advocacy. Rather, in accordance with VA's
practice, publication of the certification in the Federal Register
was treated as providing notice to SBA. An SBA official has
confirmed that some agencies follow this practice without objection
from SBA.
(iii) Agency actions relevant to sections 202-205 of the
Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532-1535
According to VA, this rulemaking action does not impose unfunded
mandates under the Unfunded Mandates Reform Act of 1995.
(iv) Other relevant information or requirements under Acts and
Executive orders
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Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
Although the Act, 5 U.S.C. § 553(b)(A), does not require
agencies to give general notice of a proposed rulemaking when
issuing an interpretive rule1 such as this, VA promulgated this
rule through the general notice of proposed rulemaking procedures
of the Act, 5 U.S.C. § 553. VA afforded interested parties the
opportunity to comment on the interim rule. The preamble to the
final rule evaluated and responded to the comments received.
Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520
This rule contains no information collection requirements
subject to the Act.
Statutory authorization for the rule
38 U.S.C. § 1151 provides for the payment of disability or
dependency and indemnity compensation for additional disability or
death resulting from an injury or aggravation of an injury suffered
as the result of VA hospitalization, medical or surgical treatment,
examination, or pursuit of a course of vocational rehabilitation
under 38 U.S.C. ch. 31.
Executive Order No. 12866
Based on its economic impact, the rule was determined by the
Office of Management and Budget to be a "significant regulatory
action" within the meaning of Executive Order No. 12866. VA
supplied to the Office of Information and Regulatory Affairs a
planned regulatory action document that described the reason for
the amendment to existing VA regulations and also assessed the
costs and budgetary impact of the rule. According to VA, the Office
of Information and Regulatory Affairs reviewed the rule at the
final stage and suggested no changes.
Executive Order No. 12899
According to a VA official, relevant portions of Executive Order
No. 12899, Civil Justice Reform, were considered in issuing this
final rule. Our review of both the interim and final rules and
accompanying documentation suggests that appropriate consideration
was given to this Executive Order.
1This rule amends VA's regulations regarding the award of
compensation for disability resulting from hospitalization,
treatment, examination, or vocational rehabilitation to reflect the
Supreme Court's interpretation of 38 U.S.C. § 1151 as stated in
Brown v. Gardner, 115 S.Ct. 552 (1994).
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Section 3(b)(2)(B) requires agencies to make every reasonable
effort to ensure that the regulation specifies in clear language
the effect on existing Federal law or regulation. VA clearly
indicated in both the interim rule and the final rule the
amendments to the previous adjudication regulations necessitated by
the Supreme Court decision in Brown, 115 S.Ct. 552 (1994).
Section 3(b)(2)(C) requires agencies to provide a clear legal
standard rather than a general standard. VA adopted the standard
for determining a veteran's right to compensation contained in
Brown, 115 S.Ct. at 555, and incorporated it into the final rule in
what appears to be a clear and unambiguous manner.
Section 3(b)(2)(D) requires agencies to specify in clear
language the retroactive effect, if any, given to the regulation.
In the preamble to the interim rule, VA clearly states that the
effective date of the rule is November 25, 1991, the date of the
Court of Veterans Appeals decision that invalidated the former
regulations. In the preamble to the final rule, VA responded to
comments submitted on the interim rule, including comments
concerning the effective date. After discussing the comments, VA
again stated that the effective date of the rule would be November
25, 1991.
Finally, section 3(b)(2)(F) requires agencies to define key
terms in their regulations. The regulation includes a definition of
the term "necessary consequences," a key element to be considered
in determining a veteran's eligibility for compensation under this
rule.
VA did not identify any other statute or executive order
imposing procedural requirements relevant to the rule.
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