VA Beneficiary Debt Collection Improvement Act

I 117TH CONGRESS 1ST SESSION H. R. 2935 To amend title 38, United States Code, to improve the processing of veterans benefits by the Departments of Veterans Affairs, to limit the authority of the Secretary of Veterans Affairs to recover overpayments made by the Department and other amounts owed by individuals to the United States, to improve due process accorded individuals with respect to such recovery, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 30, 2021 Mr. PAPPAS (for himself and Mr. NEHLS) introduced the following bill; which was referred to the Committee on Veterans’ Affairs A BILL To amend title 38, United States Code, to improve the processing of veterans benefits by the Departments of Veterans Affairs, to limit the authority of the Secretary of Veterans Affairs to recover overpayments made by the Department and other amounts owed by individuals to the United States, to improve due process accorded individuals with respect to such recovery, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 2 •HR 2935 IH SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘VA Beneficiary Debt Collection Improvement Act’’. 3 (b) TABLE OF CONTENTS.—The table of contents for 4 this Act is as follows: 5 Sec. 1. Short title; table of contents. Sec. 2. Prohibition of debt arising from overpayment due to delay in processing by the Department of Veterans Affairs. Sec. 3. Prohibition on Department of Veterans Affairs interest and administra- tive cost charges for debts relating to certain benefits pro- grams. Sec. 4. Extension of window to request relief from recovery of debt arising under laws administered by the Secretary of Veterans Affairs. Sec. 5. Reforms relating to recovery by Department of Veterans Affairs of amounts owed by individuals to the United States. SEC. 2. PROHIBITION OF DEBT ARISING FROM OVERPAY- 6 MENT DUE TO DELAY IN PROCESSING BY THE 7 DEPARTMENT OF VETERANS AFFAIRS. 8 (a) BAR TO RECOVERY.— 9 (1) IN GENERAL.—Chapter 53 of title 38, 10 United States Code, is amended by inserting after 11 section 5302A the following new section: 12 ‘‘§ 5302B. Prohibition of debt arising from overpay- 13 ment due to delay in processing 14 ‘‘(a) LIMITATION.—(1) Except as provided in para- 15 graph (2), no individual may incur a debt to the United 16 States that— 17 ‘‘(A) arises from the participation of the indi- 18 vidual in a program or benefit administered by the 19 Under Secretary for Benefits; and 20 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 3 •HR 2935 IH ‘‘(B) is attributable to the failure of an em- 1 ployee or official of the Department to process infor- 2 mation provided by or on behalf of that individual 3 within applicable timeliness standards established by 4 the Secretary. 5 ‘‘(2) Nothing in this section shall be construed to af- 6 fect the penal and forfeiture provisions for fiduciaries set 7 forth in chapter 61 of this title. 8 ‘‘(b) NOTICE.—(1) If the Secretary determines that 9 the Secretary has made an overpayment to an individual, 10 the Secretary shall provide notice to the individual of the 11 overpayment. 12 ‘‘(2) Notice under paragraph (1) shall include a de- 13 tailed explanation of the right of the individual— 14 ‘‘(A) to dispute the overpayment, including a 15 detailed explanation of the process by which to dis- 16 pute the overpayment; or 17 ‘‘(B) to request a waiver of indebtedness. 18 ‘‘(c) DELAY ON COLLECTION.—(1) Subject to para- 19 graph (2), the Secretary may not take any action under 20 section 3711 of title 31 regarding an overpayment de- 21 scribed in a notice under subsection (b) of this section 22 until the date that is 90 days after the date the Secretary 23 issues such notice. 24 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 4 •HR 2935 IH ‘‘(2) The Secretary may take action under section 1 3711 of title 31 regarding an overpayment described in 2 a notice under subsection (b) of this section before the 3 date that is 90 days after the date the Secretary issues 4 such notice if the Secretary determines that delaying such 5 action is— 6 ‘‘(A) likely to make repayment of such overpay- 7 ment more difficult for an individual; 8 ‘‘(B) likely to cause an unpaid debt to be re- 9 ferred to the Treasury Offset Program; or 10 ‘‘(C) not in the best interest of the individual.’’. 11 (2) CLERICAL AMENDMENT.—The table of sec- 12 tions at the beginning of such chapter is amended 13 by inserting after the item relating to section 5302A 14 the following new item: 15 ‘‘5302B. Prohibition of debt arising from overpayment due to delay in proc- essing.’’. (3) DEADLINE.—The Secretary of Veterans Af- 16 fairs shall prescribe regulations to establish stand- 17 ards under section 5302B(a)(2) of such title, as 18 added by subsection (a), not later than 180 days 19 after the date of the enactment of this Act. 20 (b) PLAN FOR IMPROVED NOTIFICATION AND COM- 21 MUNICATION OF DEBTS.— 22 (1) IN GENERAL.—Not later than 180 days 23 after the date of the enactment of this Act, and one 24 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 5 •HR 2935 IH year thereafter, the Secretary of Veterans Affairs 1 shall submit to Congress a report on the improve- 2 ment of the notification of and communication with 3 individuals who receive overpayments made by the 4 Secretary. 5 (2) CONTENTS.—Each report under paragraph 6 (1) shall include each of the following: 7 (A) The plan of the Secretary to carry out 8 each of the following: 9 (i) The development and implementa- 10 tion of a mechanism by which individuals 11 enrolled in the patient enrollment system 12 under section 1705 of title 38, United 13 States Code, may view their monthly pa- 14 tient medical statements electronically. 15 (ii) The development and implementa- 16 tion of a mechanism by which individuals 17 eligible for benefits under the laws admin- 18 istered by the Secretary may receive elec- 19 tronic correspondence relating to debt and 20 overpayment information. 21 (iii) The development and implemen- 22 tation, by not later than October 1, 2022, 23 of a mechanism by which individuals eligi- 24 ble for benefits under the laws adminis- 25 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 6 •HR 2935 IH tered by the Secretary may access informa- 1 tion related to Department of Veterans Af- 2 fairs debt electronically. 3 (iv) The improvement and clarification 4 of Department communications relating to 5 overpayments and debt collection, including 6 letters and electronic correspondence and 7 including information relating to the most 8 common reasons individuals eligible for 9 benefits under the laws administered by 10 the Secretary incur debts to the United 11 States and the process for requesting a 12 waiver of such debt. The Secretary shall 13 develop such improvements and clarifica- 14 tions in consultation with veterans service 15 organizations, labor organizations that rep- 16 resent employees of the Department, and 17 other relevant nongovernmental organiza- 18 tions. 19 (B) A description of the current efforts 20 and plans for improving the accuracy of pay- 21 ments to individuals entitled to benefits under 22 the laws administered by the Secretary, includ- 23 ing specific data matching agreements. 24 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 7 •HR 2935 IH (C) A description of steps to be taken to 1 improve the identification of underpayments to 2 such individuals and to improve Department 3 procedures and policies to ensure that such in- 4 dividuals who are underpaid receive adequate 5 compensation payments. 6 (D) A list of actions completed, implemen- 7 tation steps, and timetables for each require- 8 ment described in subparagraphs (A) through 9 (C). 10 (E) A description of any new legislative 11 authority required to complete any such re- 12 quirement. 13 SEC. 3. PROHIBITION ON DEPARTMENT OF VETERANS AF- 14 FAIRS INTEREST AND ADMINISTRATIVE COST 15 CHARGES FOR DEBTS RELATING TO CERTAIN 16 BENEFITS PROGRAMS. 17 (a) IN GENERAL.—Section 5315(a)(1) of title 38, 18 United States Code, is amended— 19 (1) by striking ‘‘other than a loan’’ and all that 20 follows through the semicolon and inserting ‘‘other 21 than—’’; and 22 (2) by adding at the end the following new sub- 23 paragraphs: 24 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 8 •HR 2935 IH ‘‘(A) a loan, loan-guaranty, or loan-insur- 1 ance program; 2 ‘‘(B) a disability compensation program; 3 ‘‘(C) a pension program; or 4 ‘‘(D) an educational assistance program.’’. 5 (b) EFFECTIVE DATE.—The amendments made by 6 subsection (a) shall apply with respect to an indebtedness 7 that occurs on or after the date of the enactment of this 8 Act. 9 SEC. 4. EXTENSION OF WINDOW TO REQUEST RELIEF FROM 10 RECOVERY OF DEBT ARISING UNDER LAWS 11 ADMINISTERED BY THE SECRETARY OF VET- 12 ERANS AFFAIRS. 13 Section 5302(a) of title 38, United States Code, is 14 amended by striking ‘‘180 days’’ and inserting ‘‘one year’’. 15 SEC. 5. REFORMS RELATING TO RECOVERY BY DEPART- 16 MENT OF VETERANS AFFAIRS OF AMOUNTS 17 OWED BY INDIVIDUALS TO THE UNITED 18 STATES. 19 (a) LIMITATION ON INDEBTEDNESS OFFSETS.—Sub- 20 section (a) of section 5314 of title 38, United States Code, 21 is amended— 22 (1) by inserting ‘‘(1)’’ before ‘‘Subject to’’; and 23 (2) by adding at the end the following new 24 paragraph: 25 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 9 •HR 2935 IH ‘‘(2) The Secretary may not make a deduction under 1 paragraph (1) while the existence or amount of such in- 2 debtedness is disputed under section 5314A of this title.’’. 3 (b) ADMINISTRATIVE PROCESS FOR DISPUTE OF EX- 4 ISTENCE OR AMOUNT OF INDEBTEDNESS.— 5 (1) ESTABLISHMENT.—Chapter 53 of title 38, 6 United States Code, is amended by inserting after 7 section 5314 the following new section: 8 ‘‘§ 5314A. Dispute of indebtedness 9 ‘‘(a) ESTABLISHMENT.—The Secretary shall pre- 10 scribe regulations that establish an administrative process 11 for the dispute of the existence or amount of an indebted- 12 ness described in section 5314(a)(1) of this title (without 13 regard to whether the Secretary has made a deduction 14 under such section regarding such indebtedness). 15 ‘‘(b) STANDARDS.—The process under subsection (a) 16 shall be efficient, effective, and equitable. 17 ‘‘(c) TIMELINESS.—The Secretary shall ensure that 18 each dispute under subsection (a) proceeds in accordance 19 with standards for timeliness prescribed by the Secretary 20 under this section. 21 ‘‘(d) LIMITATION.—The Secretary may not submit to 22 any debt collector (as defined in section 803 of the Fair 23 Debt Collection Practices Act (15 U.S.C. 1692a)) any dis- 24 pute pending under this section. 25 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 10 •HR 2935 IH ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec- 1 tion shall be construed to modify the procedures for seek- 2 ing review of a decision of the agency of original jurisdic- 3 tion described in section 5104C(a)(1) of this title.’’. 4 (2) EXISTING ADMINISTRATIVE PROCESS.—The 5 Secretary of Veterans Affairs shall carry out section 6 5314A of such title, as added by paragraph (1), by 7 improving the administrative process of the Depart- 8 ment of Veterans Affairs for the dispute of the exist- 9 ing or amount of an indebtedness that was in effect 10 on the day before the date of the enactment of this 11 Act. 12 (3) IMPROVEMENTS TO DEPARTMENT WEBSITE 13 AND NOTICES.—In carrying out paragraph (2), the 14 Secretary shall— 15 (A) improve the website of the Depart- 16 ment; and 17 (B) ensure that such website and written 18 notices sent to a person about indebtedness de- 19 scribed in section 5314(a) of title 38, United 20 States Code, contain all information a person 21 needs to dispute such an indebtedness, includ- 22 ing a description of— 23 VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS 11 •HR 2935 IH (i) the specific actions the person will 1 need to take in order to dispute the indebt- 2 edness; 3 (ii) the documentation that will be re- 4 quired for the dispute; and 5 (iii) how the documentation is to be 6 submitted. 7 (4) CLERICAL AMENDMENT.—The table of sec- 8 tions at the beginning of such chapter is amended 9 by inserting after the item relating to section 5314 10 the following new item: 11 ‘‘5314A. Dispute of indebtedness.’’. (c) LIMITATION ON AUTHORITY TO RECOVER 12 DEBTS.—Section 5302(a) of title 38, United States Code, 13 is amended— 14 (1) by inserting ‘‘(1)’’ before ‘‘There’’; and 15 (2) by adding at the end the following new 16 paragraph: 17 ‘‘(2) The Secretary may not seek to recover an in- 18 debtedness described in paragraph (1) if the Secretary de- 19 termines that the cost to the Department to recover such 20 indebtedness, as determined when the debt is established, 21 would exceed the amount of the indebtedness.’’. 22 Æ VerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H2935.IH H2935 dlhill on DSK120RN23PROD with BILLS