Dec. 6 – For-profit consultants across the country make millions each year by charging military veterans for help filing their disability claims with the U.S. Department of Veterans Affairs.
This practice exists in a legal loophole: It is illegal under federal law for companies not accredited by the VA to charge veterans fees for helping them file their disability claims, but there is no criminal penalty for doing so. breaking the law. Recent efforts to regulate this profit-oriented shadow industry have stalled in Congress.
As some state lawmakers seek to close the loophole by introducing bills to curtail the practice, they are up against their legislative colleagues and a group of industry leaders with a stable of lobbyists who want the loophole closed law at the state level is being closed.
Three states — Maine, New Jersey and New York — have passed laws in the past year cracking down on for-profit consultants. Similar bills were introduced in 17 other states.
Meanwhile, Louisiana passed a law that the for-profit industry is hailing as a victory; it allows companies to charge up to $12,500 in fees for a task that veteran service organizations like The American Legion will perform for free.
The problem is that veterans are pitted against each other.
“When we have organizations and companies like this one that claim sharks that prey on our veterans and take away their hard-earned benefits and profit from it, there is something empirically wrong with that,” said Missouri Republican state Rep. Dave Griffith. , a former Green Beret in the U.S. Army’s 8th Special Forces Group.
Griffith introduced a bill earlier this year that would impose criminal penalties on those who receive compensation for helping a veteran apply for benefits. The bill died in committee, but Griffith has reintroduced it for the upcoming legislative session.
“What worries me even more,” says Griffith, who served in Vietnam, “is that many of these organizations are run by veterans.”
The for-profit consulting industry argues that veterans should have the freedom to hire whomever they want to help them navigate the VA’s arduous, glitchy application process. According to VA data, disability claims currently take an average of four to five months to resolve, although some languish for a year or more.
Some veterans have reported that the cost is worth it — and have chided the government for not doing better marketing campaigns directly to vets about how to get their benefits.
The companies charging exorbitant fees, industry representatives say, are just a few bad apples.
“The key for us is having transparent disclosures, processes and fees so veterans can make informed decisions,” said Peter O’Rourke, president of the National Association for Veteran Rights, a newly formed trade association for the claims consulting industry. O’Rourke, a veteran of the U.S. Navy and U.S. Air Force, previously served as acting secretary of Veterans Affairs during the Trump administration before being forced out in 2018.
O’Rourke estimated that he and his team have been to 38 states to testify at committee hearings and speak to lawmakers.
“There is a better way to do business, and we need to have more of that discussion, rather than going back in time and criminalizing what the marketplace has been able to offer veterans,” he said.
Promises and profits
The urgency on all sides of the issue follows Congress’ passage two years ago of the PACT Act, the largest expansion of veterans benefits in generations. It provides disability-related benefits to veterans suffering the effects of Agent Orange, toxic incinerators in recent wars and other toxic exposures in recent decades. Under the law, millions more veterans could qualify for assistance.
That increased funding represents a potential benefit for private consultants who promise to help military veterans access it — for a price.
Veterans with service-related disabilities, from cancer to asthma to depression, can apply for monthly government benefits. Their checks can range from $500 to more than $4,000 per month, depending on the severity of the disability and other factors such as the number of dependents.
But getting approval takes months. The claims process — slow and fraught with problems, according to veterans and the VA’s own data — requires a lengthy application and detailed medical documentation.
Enter the private claims consultant. For a fee or a reduction in a veteran’s future disability benefits — often five times what the veteran will receive from the VA, amounting to thousands of dollars — the consulting firm promises to help smooth the process and maximize the veteran’s disability check.
“Veterans often face delays at the VA, and I understand why there is a desire to get results. But these companies sometimes engage in exploitative practices and take away many of your benefits,” said Democratic Florida Rep. Anna V. Eskamani. She worked with Republican state Rep. Michelle Salzman, an Army veteran, to introduce a claim shark bill during the most recent legislative session. The bill was defeated in committee, but Eskamani said they plan to continue talking to veterans and will introduce a similar bill next session.
Since January, Republican and Democratic lawmakers in at least seventeen states — from Rhode Island to Mississippi to California — have introduced bills to ban or restrict private claims consultants from profiting from veterans.
Most are based on the federal GUARD Act, currently stalled in Congress, which would impose fines on unaccredited counselors who charge veterans to file claims. Organizations such as the Veterans of Foreign Wars and The American Legion are outspoken supporters of the GUARD Act and similar state efforts to rein in for-profit consultants.
Last year, New Jersey became the first state to make it illegal for anyone without VA accreditation to sue a veteran for help filing a disability claim. Maine and New York soon followed.
The VA grants accreditation to attorneys, veterans service organizations and other claims professionals who meet certain requirements, such as a background check and a written exam. Organizations such as the VFW and The American Legion offer their services for free, although attorneys and agents may charge fees to assist with some claims, including appeals.
When we have organizations and companies like these claiming sharks that prey on our veterans, taking away their hard-earned benefits and turning a profit, then there is something empirically wrong with that. – Republican Missouri State Representative Dave Griffith
Griffith, the Missouri lawmaker, modeled his bill after New Jersey law. When he first started researching the problem, he said he didn’t like what he saw. Often, he said, companies will charge a fee for their services equal to five times the increase in the veteran’s monthly benefit.
For example, a new veteran approved for 100% disability will receive approximately $3,800 per month from the VA. For help filing that claim, a consulting firm may charge a one-time fee of approximately $19,000.
In some cases, Griffith says, counselors can pocket as much as $30,000 through tactics such as holding a claim for months before filing it so they can benefit from the substantial back pay the VA ultimately awards to the veteran.
Criticism and counter-reaction
O’Rourke said his group supports a number of legal guardrails at the federal or state level to protect veterans from exploitation, such as placing certain limits around compensation or requiring transparency in contract agreements. But, he said, private counseling should be freely available because the VA and its current accreditation process have not kept pace with veterans’ needs.
“We are seeing, after two decades of war, a strain on our social infrastructure when it comes to how we care for veterans,” he said, noting that the VA’s claims and appeals processes are decades old, complex and cumbersome . navigate, even with accredited groups offering assistance. “Veterans are asking to enter a system that takes up a lot of their time and causes frustration… Veterans are going to try to find solutions to that.”
Groups including the VFW have been outspoken opponents of for-profit consulting firms, urging lawmakers to take action and wage public relations battles against the industry. For-profit companies have been investigated by media and officials in Texas and Louisiana, among others, for potentially illegal practices.
Last year, the VA issued a fraud alert, warning veterans to avoid consultants who are not accredited.
But the industry is pushing back. One of the largest for-profit consulting firms spent more than $800,000 last year and $780,000 this year on federal lobbying efforts, according to data collected by the nonprofit OpenSecrets. That included pushing for a bill that would make the legal loophole permanent. At the state level, representatives from some of the industry’s biggest players are showing up at statehouses across the country to speak out against bills.
“Last year I was very close to passing my bill,” Griffith said. But claims consulting firms have hired a lobbyist in Missouri, he said. ‘They lobbied [House] speaker’s office and he postponed the bill.”
During a committee hearing, Missouri lawmakers heard opposition to the bill from O’Rourke, who also testified against Eskamani and Salzman’s bill in Florida.
“I was amazed at the amount of money they are willing to spend to keep things as they are,” said Eskamani, who said she did not expect such a concerted effort to pass a bill in the first committee. meeting.
In June, Louisiana quietly passed a law allowing unregulated companies to profit from assisting veterans with their disability claims, although capping consulting fees at $12,500. Republican Gov. Jeff Landry allowed the bill to become law without his signature. It was a sea change for Landry: When he was attorney general, he worked to shut down the types of consulting firms that the law now explicitly allows.
Similar bills were introduced this year in Arizona, Georgia, Hawaii and Kentucky, but were not passed.
Last month, members of the Alabama Department of State Veterans Affairs Legislative Committee voted to work with state lawmakers on a bill that would ban claims consultants from profiting from veterans. The issue will likely come up again next year in state legislative sessions across the country.
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