Government Relations Report Updated VA 1394 Procedures

GOVERNMENT RELATIONS REPORT

Updated VA 1394 Procedures: What You Need to Know

By Amy Schoppman

NMEDA DIRECTOR OF GOVERNMENT RELATIONS & PUBLIC POLICY

Earlier this year, I woke up in

a North Little Rock Hampton

Inn. Such an occurrence would normally be considered a bad thing, but in this instance, I was filled with neither regret nor dread. In fact, I was feeling rather satisfied with myself given that I’d driven nearly 1,000 miles in 1.5 days and was about to whip up a few of those adorable mini waffles in the criminally underrated free breakfast area before continuing my road trip from Florida to New Mexico. To further reveal how low maintenance I can be, I was also legitimately excited to spend the better part of that morning on a call with VA Central Office (VACO) and the Veterans Benefits Administration (VBA).

We had much to discuss, namely the confounding “approved but not eligible” situations that had been cropping up over the past year or so. Some background: since 2020, NMEDA has witnessed a sharp increase in dealer reports of VA denying Auto Adaptive Equipment (AAE) benefit payments due to a previously eligible service-connected veteran being deemed ineligible to receive such benefits based on an updated VBA rating decision. For the member cases in question, the updated eligibility determinations typically occurred around the time the veteran engaged the mobility dealer for services. In most of these cases, neither the veterans nor the dealers were promptly notified of the veteran’s eligibility change, so dealers proceeded with vehicle modifications entirely—I was eager to discuss the challenge with NMEDA’s contacts at VACO and VBA. After providing an overview of the frequency and duration of these cases, as well as a few strongly worded testimonials from dealers and veterans, VA staff agreed that they would reexamine the agency’s approach to confirming a veteran’s eligibility in an effort to

It turns out that there was a pretty straightforward answer to ‘why was this happening?’: VA did not have any mechanism “ for communication between VHA and VBA regarding changes in a veteran’s eligibility.”

and deliveries only to be ultimately denied payment for the authorized work. VA’s proposed “resolutions” for such cases were unappealing at best: the dealer was directed to repossess the vehicle, convince the veteran to return the vehicle, or file an equitable relief claim and hope for the best.

Knowing that there had to be better options for resolution—or, ideally, some method for preventing these “approved but not eligible” cases identify why this was happening and how it could be remedied.

It turns out that there was a pretty straightforward answer to “why was this happening?”: VA did not have any mechanism for communication between VHA and VBA regarding changes in a veteran’s eligibility. VHA was relying on VA Form 21-4502 to validate a veteran’s eligibility, but a subsequent rating decision

would supersede the information on the 4502, and this element of the agency’s process was resulting in these rejected and unpaid AAE claims. Once this process flaw was identified, an interim solution was developed. So, let’s break down the updated 10-1394 procedures, which were officially communicated to Prosthetics Representatives nationwide in midMay:

• Part I will continue to be completed by the veteran and reviewed by PSAS.

• Part II will now involve a verification of 4502 eligibility that must be confirmed by the Chief of Prosthetics, Assistant Chief of Prosthetics, or Supervisory

Prosthetic Representative. • The status of the veteran’s AAE eligibility – approved, rescinded, terminated – is validated at this stage and the process will continue (or not) as appropriate.

• Part III is to be completed by the Prosthetic Representative approving the AAE. • Note that the same endorser cannot sign in Part II and Part III.

• Once modifications have been completed and the applicant has certified Part IV, PSAS will submit all documentation to VBA for payment processing.

Dealers should note that Parts I, II, and III of the 1394 must be completed and signed before modifications begin and the vehicle is released to the veteran. If you walk away from this article having understood only one thing, please let it be that a signed quote is not a legally binding document which obligates payment; VA’s position is that the agency will not be held responsible for any payments if a signed quote is substituted for a completed and signed VA Form 101394. While securing prior approval for all work may not seem ideal, an even less ideal outcome would involve

your company going unpaid for work that was furnished to an ineligible veteran.

Based on the many conversations I’ve had with dealers regarding this updated policy, readers may be asking themselves any number of (reasonable) questions, including:

Is this policy update why I experienced delays at my VA(s) in April/May?

Probably. VACO’s effort to investigate this issue and update its policy required a temporary pause in approvals. Complicating that effort

were multiple mixed messages and fuzzy timelines being communicated to vendors and staff in the field. While the roll-out wasn’t as smooth as envisioned (when are they ever?), dealers should rest assured that some of the more outlandish rumors

If you are experiencing delays due to the 1394 process changes, please contact me so I can share your experiences and data with VACO “

and VBA.”

GOVERNMENT RELATIONS REPORT (continued)

circulating—namely that all AAE payments were on indefinite hold, that all AAE approvals were indefinitely suspended, and that VA Prosthetics might shut down entirely—were (and continue to be) false. The actual 1394 policy update was clarified to VA field employees in mid-May and, at this point, should be in practice nationwide.

Is this policy update permanent?

No, not currently. VA may more

permanently adopt this interim procedure, but that will depend on vendor and veteran feedback and outcomes (more on that below).

I’ve noticed that VA has begun to institute new evaluation requirements (e.g., evaluations for passengers, evaluations for veterans on a second or third vehicle) – is this related to the updated 1394 procedures?

No, they are two separate issues. VA efforts to update the agency’s AAE evaluation procedures has been in the works for some time now and, as of this writing, has not been finalized. While some dealers may have noticed a shift in evaluation requirements around the same time the 1394

update, any evaluation procedure changes you may have experienced are not an outgrowth of the 1394 situation.

As most dealers are no doubt aware, relationships with Prosthetics Representatives are critical and this policy tweak underscores “

the importance of maintaining and developing a functional rapport with VA personnel.”

Will this policy update delay vehicle delivery to veterans?

It shouldn’t. An adjustment period was expected but I have been informed that, in the 6+ weeks since this interim policy was communicated to VA field staff, flow processes have been developed to minimize approval delays. If you are experiencing delays due to the 1394 process changes, please contact me so I can share your experiences and data with VACO and VBA.

How can I best navigate the updated procedure?

Talk to your Prosthetics Representative(s)! These individuals are best equipped to provide insight into the process, guidance for navigating the updated procedures most efficiently, and tips for minimizing potential delays and maximizing assurance that the VA will in fact pay you for the work you perform. As most dealers are no doubt aware, relationships with Prosthetics Representatives are critical and this policy tweak underscores the importance of maintaining and developing a functional rapport with VA personnel.

I’ll also reiterate my previous call to contact me with feedback on your experiences with the updated procedures. There will be future opportunities to refine VA’s updated approach to 1394 submissions, and it’s important that your input be included.