Lawmakers force Gov. Landry’s hand on veterans disability proposal he previously opposed

A bill sits on Gov. Jeff Landry’s desk that has supporters and detractors among disabled military veterans. The supporters say the measure will help ease a backlog of veteran benefits claims, while the detractors say it will allow bad actors to exploit those who served and sacrificed. 

Proponents say Senate Bill 159, sponsored by Sen. Stewart Cathey, R-Monroe, received final passage Monday in the House in an 87-9 vote with no debate or discussion and now awaits the governor’s consideration.

Cathey’s bill deals with a complex and often misunderstood issue involving the filing of military veteran disability benefits and loopholes in federal law that have created an unregulated industry making a windfall off of “claims consulting” — a practice that is technically illegal but difficult to enforce. 

Cathey’s proposal, in short, would attempt to legalize non-accredited claims consulting but puts a $12,500 cap on the consulting fees a company can charge a veteran per claim. 

The Louisiana Legislature was considering an opposing measure, House Bill 979 by Rep. Dodie Horton, R-Haughton, to penalize the practice unless consultants agreed to be accredited. Although Horton’s bill received unanimous support in the House and from all major veteran service organizations, a group of senators on the Committee on Judiciary B sidelined the proposal Tuesday. 

“We would want a veteran to make sure they get every benefit they’re due through every avenue possible,” committee Chairman Mike Reese, R-Leesville, said. 

Reese’s view is common among lawmakers and others who believe the non-accredited claims consulting industry offers some kind of alternate pathway for veterans who want to pay for such a service to avoid bureaucracy. Yet the option has resulted in some veterans being exploited or misled by those consultants. Previous reporting by the Illuminator explored the issue in-depth. 

Claims consultants flourish unregulated

When military members leave the service, they might be entitled to a monthly cash benefit from the U.S. Department of Veterans Affairs (VA) for any service-connected disabilities. To receive them, they have to fill out paperwork and submit medical records and other related information to support their claim.

To accommodate veterans through the process, the VA offers accreditation to private claims agents, lawyers, and members of veteran service organizations such as the American Legion and Veterans of Foreign Wars (VFW), as well as anyone else who wants to assist veterans in filing their disability claims. This accreditation involves a background check and a written exam to ensure they can properly assist veterans with claims and represent them in appeals. 

Search the internet for “VA claims consulting,” and it will generate virtually endless listings for websites offering claims services for veterans and their dependents to obtain disability benefits or apply for an increase to their benefits. 

Many of these companies do not have VA accreditation and are not staffed with lawyers, accountants or other credentialed professionals. Critics say the consulting services amount to telling veterans how to fill out VA forms, for which they often charge a fee or take a percentage of the disability payment. Before the claims consulting industry came into existence, veterans never had to pay money just to apply for their benefits, but many veterans don’t know this and are not aware of even their most basic rights to such benefits. 

During Tuesday’s committee hearing on Horton’s bill, Sen. Jean-Paul Coussan, R-Lafayette, shared a story about his grandfather, who was wounded during World War II and didn’t apply for an increase to his disability benefit until much later in life. 

“It took him decades because he didn’t even know that he could apply for a higher rating,” the senator said.

Coussan, an attorney, also believes non-accredited consultants or paid claims agents can offer some kind of express service or alternate pathway to VA benefits. He said he once got a call from a client who offered to pay him to “get to the front of the line” with their VA claim. 

“There are veterans that need this that would be willing to pay more,” he said. 

Louisiana’s VA leader weighs in

The suggestion that a veteran can pay a private consultant, or anyone else for that matter, to somehow speed up a disability claim or avoid the bureaucratic backlog at the VA is false, according to veterans’ advocates and the Louisiana Department of Veterans Affairs. All disability claims go through the same path at the VA regardless of who fills out the forms. The unaccredited consultants don’t have any special tools or elite access that could get a veteran to the front of the line, they said. 

“Everyone submitting a claim to the federal VA has to follow the same process,” LDVA spokesperson Brandee Patrick said. “… For those who don’t want to deal with bureaucracy, because that’s another argument, vets can still go a non-governmental route by hiring a private lawyer who’s accredited by the VA.”

Lawmakers ponder whether consultants for veteran benefits should see big profits

The claims consulting industry has become particularly lucrative since President Joe Biden enacted the largest expansion of veteran benefits since World War II. The industry has few barriers to entry and requires little capital investment. 

Charlton Meginley, secretary of the Louisiana Department of Veterans Affairs, said the companies have deliberately avoided seeking accreditation because doing so would subject them to the same set of rules as the accredited claims agents and private lawyers. Once a person becomes accredited, they can no longer charge high fees just for helping veterans fill out initial claims forms. They would instead have to work on appeals and more complicated matters that accredited agents handle.

The VA has tried for several years to educate veterans about their rights and push back against the non-accredited industry, but its hands are tied. It is currently against federal law for non-accredited, non-attorney agents to assist anyone in the preparation, presentation or filing of claims on behalf of veterans. But in 2006, for reasons unclear, Congress removed the penalties that once existed under the law.

Battle stalls at national level

Both Cathey’s and Horton’s bills are derived from legislation pending in Congress: the Governing Unaccredited Representatives Defrauding VA Benefits Act or GUARD Act; and its countermeasure, the Preserving Lawful Utilization of Services Act or PLUS Act. 

Dysfunction on Capitol Hill has grounded both proposals and prompted lobbyists to take the debate to state legislatures. Two of the largest claims consulting companies, Veterans Guardian and Veteran Benefits Guide, joined forces in the effort by forming the National Association for Veteran Rights (NAVR) to lobby on their behalf.

At the helm of the NAVR is Peter O’Rourke, the former VA secretary from the Trump administration. 

He pushed back on arguments that his companies do little more than tell veterans how to fill out paperwork. He said they offer “claims assistance,” which can involve compiling the right kinds of medical records to ensure a claim is approved, though he did admit there’s no such thing as a speedy alternative to the VA claims process. 

“Yes, we can’t make a claim go any faster … but your claim is done very accurately,” O’Rourke told the committee.

Veterans Guardian and Veteran Benefits Guide have spent approximately $1.76 million and $960,000, respectively, on lobbying for this single issue, according to the political finance website OpenSecrets.org. Those amounts do not include lobbying expenses at the state level.  

Landry faces decision

If Gov. Landry signs Cathey’s bill, Louisiana would be the only state to have enacted such a law. It would also mark a reversal of Landry’s previous stance on the issue. Prior to his election as governor, Landry investigated and shut down non-accredited claims consultants while serving as attorney general. 

Also, last August, he was among 44 state attorneys general who signed a letter urging Congress to oppose the federal version of Cathey’s bill and instead expressed support for its countermeasure. 

Horton pointed this out, saying the legislation puts the issue “in the lap of the governor to see if he stands by this letter that he signed onto in 2023.”

The governor’s office has not responded to a question about his stance on the two proposals.

Mike Figlioli, the VFW’s national director, told the Illuminator he was disappointed to hear about the Legislature’s decision to support Cathey’s bill over Horton’s and urged Gov. Landry to veto it.

“It will be interesting to see if the governor vetoes this legislation that is unconstitutional,” Figlioli said. “The PLUS act should be renamed the ‘Please Let Us Steal’ Act because that is what the Louisiana Legislature is allowing these unaccredited bad actors to do.”

However, O’Rourke told the committee Horton’s bill would deny veterans the right to choose how they want to file their claims, and Sen. Reese agreed it would “close out” available avenues for veterans to obtain their benefits. 

In response, Horton pointed to a critical nuance she said many people overlook when debating this issue.  

“We don’t want to close anything out,” she said. “We just want them to be accredited.” 

Several lawmakers have compared the claims consultants to private third-party tax prep services charging to file returns with forms and websites the Internal Revenue Service offers at no cost, but there are several discrepancies with the analogy. 

H&R Block and other third-party tax preparers must be registered with the Internal Revenue Service and have a Preparer Tax Identification Number (PTIN), which the agency issues. When filing someone’s tax return, the preparer signs their name and includes their ID number on the IRS forms, attesting to the accuracy and integrity of the claim. 

Unlike an unaccredited claims consultant, a third-party tax preparer puts their name on the line and takes responsibility for their client’s tax return in the same way an accredited American Legion representative, private lawyer or third-party claims agent would do with a VA claim. Unaccredited consultants don’t put their names on any VA forms. They essentially work in secret because the VA has no indication if a veteran has even hired a consultant unless a complaint is filed.

Time for Horton’s bill to advance from the Senate committee is running out. Its members will likely meet once more before the legislative session must end by June 3.