Opinions / Panel Activity

In March, the Federal Circuit issued its opinion in Wolfe v. McDonough, a case we have been following because it attracted an amicus brief. In this case, the Secretary of Veterans Affairs asked the Federal Circuit to reverse the Court of Appeals for Veterans Claims, which “granted a petition for a writ of mandamus filed by Wolfe on behalf of a class of claimants to invalidate 38 C.F.R. § 17.1005(a)(5) and require [the Department of Veterans Affairs] to readjudicate and grant claims for reimbursement of coinsurance and deductibles.” In a unanimous opinion authored by Judge Dyk and joined by Judges Reyna and Stoll, the Federal Circuit reversed the judgment of the Court of Appeals for Veterans Claims. Here is our opinion summary.

Judge Dyk described the facts of the case:

Enrolled veterans with other health care coverage, such as private insurance, Medicare, Medicaid, or TRICARE, may choose to use those sources of coverage to supplement their VA health care benefits. . . . In emergencies, enrolled veterans are entitled to obtain medical care at the nearest hospital emergency department and to seek reimbursement from the VA for the cost of treatment, with some exceptions. . . . Under the provisions of the 1999 legislation, veterans with even minimal health insurance coverage, such as through a state-mandated automobile insurance policy, might wind up responsible for essentially the full cost of emergency treatment. Congress addressed this problem in 2010 by revising § 1725 in the Emergency Care Fairness Act of 2010 (“ECFA”). . . .

In Staab v. McDonald, 28 Vet. App. 50 (2016), the Veterans Court considered the statute, as amended in 2010 by the ECFA, and the 2012 regulations . . . . But interpreting the language and legislative history of the ECFA, the Veterans Court found that “Congress intended that veterans be reimbursed [aside from copayments] for the portion of their emergency medical costs that is not covered by a third party insurer and for which they are otherwise personally liable.” Following Staab, the VA revised the contract regulation to allow reimbursement when a veteran “does not have coverage under a health-plan contract that would fully extinguish the medical liability for the emergency treatment.” At the same time, the VA added coinsurance to deductibles and copayments as payments that would not be reimbursed.

In September 2016, Amanda Wolfe, who was enrolled in VA health care, obtained emergency treatment at a nonVA health care facility, incurring expenses of $22,348.25. Her employer-sponsored healthcare contract covered most of the expenses, but she was responsible for a copayment of $202.93 and coinsurance of $2,354.41. The VA denied reimbursement of these expenses in February 2018 because “patient responsibility (deductible, coinsurance, co-payment) [is] not covered.” In July 2018, Ms. Wolfe filed a Notice of Disagreement (“NOD”), a predicate to an appeal to the Board of Veterans’ Appeals. In October 2018, rather than await the outcome of her appeal, Ms. Wolfe filed a mandamus petition at the Veterans Court seeking class relief invalidating the similar payments regulation and ordering “the Secretary to reimburse veterans for coinsurance and deductibles . . . incurred by veterans in seeking emergency medical treatment at a non-VA hospital[] and . . . not covered by the veteran’s health insurance carrier.” In September 2019, a three-judge panel of the Veterans Court certified Ms. Wolfe’s requested class and granted her petition. On the merits, a majority of the panel determined (1) that the similar payments regulation was inconsistent with the Staab decision’s interpretation of § 1725, and (2) that deductibles and coinsurance are not similar to copayments. . . . The majority further determined that Ms. Wolfe lacked adequate alternative remedies because “disputing the regulation’s validity within the administrative appeals process amounts to ‘a useless act’ and would be futile because the Board doesn’t have jurisdiction to invalidate the regulation.” . . . The Secretary appeals.

Judge Dyk began the Federal Circuit’s analysis by “first consider[ing] whether, under the correct interpretation of § 1725(c)(4)(D), Ms. Wolfe ha[d] a ‘clear and indisputable’ right.” He noted that the statute provides that “the ‘Secretary may not reimburse a veteran under this section for any copayment or similar payment.’” Here, he determined, “Ms. Wolfe’s right turns on whether deductibles and coinsurance are ‘similar payments’ to copayments under the statute.” The Federal Circuit found that “the correct reading of the statute is one in which a deductible is a ‘similar payment’ to a copayment, but coinsurance is not.” The court reached this conclusion because “coinsurance is the very type of partial coverage that Congress did not wish to exclude from reimbursement.” Moreover, the court found that this “interpretation gives meaning to all terms and provisions in the statute and is also consistent with the plain meaning of the terms.” In addition, the court pointed out that the “legislative history, though sparse, also supports a reading that deductibles were intentionally excluded from reimbursement as a ‘similar payment,’ but coinsurance was not.” As a result, the court found “there is a ‘clear and indisputable’ right to relief with respect to coinsurance but not deductibles.”

The Federal Circuit then turned to “the question whether mandamus was available with respect to coinsurance.” The court noted how “[i]t is well established that mandamus is unavailable when there is an adequate remedy by appeal.” Critically, in this case, the court continued, “Ms. Wolfe had options for appeal that were adequate remedies.” One option, according to the court, included “her administrative appeal at the VA,” that was available while “she petitioned for the writ.” As a result, the court determined “that mandamus was inappropriate.”

Finally, the court concluded that it did not need to and did not “reach the issue of class certification,” because the “the petitioner did not have a clear and indisputable right with respect to deductibles and had other adequate legal remedies by appeal.”

As a result of its analysis, the Federal Circuit “reverse[d] the Veterans Court’s grant of the petition for a writ of mandamus.”