For-Profit Claims Agent Targets VA Safeguards in New Lawsuit

A company that charges veterans to prepare disability claims is asking a federal court to declare VA's safeguards don't apply to them.

PatriotClaims LLC, doing business as VetClaims.ai, and Marine Corps veteran Joseph Johnson sued VA Secretary Doug Collins in the Northern District of Texas on Oct. 14, seeking to prevent the VA from applying accreditation requirements and restrictions on initial-claim fees to the company's services. Several companies operating under a similar business model stand to gain legitimacy if the court sides with VetClaims in the suit.

VetClaims charges a flat $1,250 fee, with a refund and an additional $500 payment if the claim does not increase the veteran's benefits. Per the lawsuit, the company argues its services fall outside federal laws governing claims agents and attorneys because veterans retain responsibility for signing and submitting their own claims, describing its work as providing "records organization, condition-identification education, analytic assistance, and veteran-controlled document-preparation technology."

The existing restrictions violate First and Fifth Amendment rights, the suit claims. The company also challenges VA's interpretation and administration of its accreditation rules under the Administrative Procedure Act.

Here's why the lawsuit matters to veterans and why MOAA supports legislation that would restore criminal penalties to those charging unauthorized fees for claims assistance.

What the Regulations Say

Accreditation requirements extend to preparing a claim, not simply communicating with the department or submitting paperwork, according to published VA guidance. General information about benefits differs from individualized assistance with a particular veteran's claim.

That distinction matters. A veteran's signature on an application does not resolve whether someone else performed services requiring accreditation.

The VA also states that only accredited attorneys and claims agents may charge for claims assistance, and only after an initial decision and compliance with applicable requirements.

Company's Own Description Raises Key Question

The VetClaims complaint draws a sharp distinction between preparing a veteran's claim and acting as the veteran's representative. But the company's description of its services raises questions about whether that distinction holds.

In the complaint, the company acknowledges that, for a flat $1,250 fee, its unaccredited specialists discuss veterans' health conditions and potential service-related events, and help "prepare claim documentation." It also describes advising veterans on identifying disabilities and compensable conditions, understanding evidentiary requirements, and compiling materials for submission.

VetClaims goes on to argue that these activities fall outside challenged statues because the company does not act as the veteran's agent or attorney before the VA because the veteran retains responsibility for signing and submitting their claim following VetClaim's work. But VA's published guidance directly addresses this distinction: Preparing a claim includes consulting with a claimant about a contemplated claim, gathering supporting evidence on the claimant's behalf, and completing forms for submission. This individualized assistance can require accreditation even when the advisor does not submit the application.

[FROM VA.MIL: Accreditation, Discipline, and Fees Program]

Litigation involving another company assisting veterans with VA claims offers a relevant comparison. In a May ruling, a North Carolina judge rejected arguments by Veterans Guardian that the company's lack of a power of attorney and veterans' responsibility for submitting their own applications exempted its claims preparation activities from federal accreditation requirements.

VetClaims acknowledged providing services that fall within VA's stated interpretation of regulated claims assistance while asking the court to reject that interpretation or find the restrictions unconstitutional. That position raises a fundamental accountability question: Why should a company performing these services be exempt from the safeguards established to protect the veterans receiving them?

Access, Accountability Must Advance Together

The VetClaims complaint also argues that without access to compensated advisors, veterans risk forfeiting their rights to benefits. That assertion overlooks the distinction between access to assistance and permission to charge for it.

Veterans can receive free claims assistance from accredited representatives, and accredited attorneys and claims agents may charge for qualifying services after an initial VA decision, subject to applicable requirements. Barriers to timely, effective assistance deserve attention, but they do not establish that veterans must pay an unaccredited company to preserve their rights or that removing oversight would better protect those rights.

[NEED CLAIMS HELP? Find Accredited Agents at VA.gov]

The VetClaims complaint notes that federal law provides no criminal penalty for an unaccredited person charging fees for claims assistance — an enforcement gap Congress created by repealing those penalties in 2006 and has allowed to persist, enabling the industry to expand. It's time for Congress to close the gap.

The Path Forward

Veterans frustrated by complicated claims procedures deserve timely, effective assistance. Improving that assistance should include clearer VA communications, stronger support for accredited representatives, and meaningful oversight of those handling veterans' claims.

MOAA supports the GUARD VA Benefits Act, which would restore criminal penalties for charging unauthorized fees for claims assistance.

Private lawsuits can provide an avenue for accountability, but veterans should not have to shoulder the burden of enforcing protections Congress established for their benefit.

Distributed by Newsbank, inc.