Lawmakers ponder whether consultants for veteran benefits should see big profits

Louisiana lawmakers are considering whether they should allow non-accredited consultants profit off of VA claims for disabled military veterans. (Photo credit: Wes Muller/Louisiana Illuminator)

Should private companies be allowed to assist disabled veterans while taking a cut of their benefit payments in exchange? Louisiana lawmakers are weighing that question as they consider two competing bills on veteran benefits that drew lengthy debate at a committee hearing Wednesday.

House Bill 496, sponsored by Rep. Dodie Horton, R-Haughton, cleared the House Judiciary Committee with unanimous support and is headed to the chamber floor for consideration. Shortly thereafter, Senate Bill 159, sponsored by Sen. Stewart Cathey, R-Monroe, advanced from the same committee with a 9-3 vote.

Both 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 indefinitely. Horton and Cathey and their supporters each claim they want to protect disabled veterans from unscrupulous actors in a shady and questionably legal industry that has made a windfall off of Department of Veterans Affairs (VA) benefits in recent years. 

But the differences between their bills are vast. Only Horton’s proposal, based on the GUARD Act, would impose criminal penalties on non-accredited companies trying to profit off of veterans’ disabilities through “claims consulting” schemes. The VA offers accreditation to claims agents, lawyers and others that involves a background check and a written exam to ensure they can properly assist veterans with claims and represent them in appeals.

Cathey’s bill, modeled after the PLUS Act bill, would attempt to legalize the non-accredited consulting practice and establish a maximum consulting fee of $12,500. 

Search the internet for “VA claims consulting,” and it will generate listings for hundreds of websites offering consulting or claims handling for veterans and their dependents to obtain disability benefits or benefit increases. Critics say the consulting services amount to telling veterans how to fill out VA forms, and for that they often charge a fee or take a percentage of the disability payments. 

Most of these companies do not have VA accreditation and are not staffed with lawyers, accountants or other credentialed professionals. Many are only a few years old and were formed after Congress passed the PACT Act in 2022 that approved billions in additional benefits for veterans exposed to hazards such as burn pits and Agent Orange.

Some veterans might not realize if consultants aren’t affiliated with Veterans Affairs or know that such services are available for free from VA-accredited law firms, agents and organizations such as the American Legion, Veterans of Foreign Wars (VFW) and Disabled American Veterans (DAV), among others. Those groups employ thousands of staffers who provide claims preparation work for free. In Louisiana, the VFW has accredited service officers in every parish.

‘Predatory and unethical’

Three of the largest non-accredited companies are Veterans Guardian, the National Association of Veterans Rights (NAVR) and Veteran Benefits Guide. Each sent an executive to Baton Rouge to testify at Wednesday’s legislative committee hearing.

They explained they typically charge a one-time fee equal to five times the monthly increase of a disability payment. For example, a new veteran rated for 100% disability would receive a monthly benefit of about $4,000 from the Department of Veterans Affairs and would then owe the consulting company approximately $20,000, though Veterans Guardian says it offers discounts if the fee is paid in a lump sum.

Paul Hermann, a disabled veteran and the adjutant of Louisiana’s DAV chapter, said that is an unfair amount to charge just for filling out paperwork. 

“Why do you pay somebody to fill out a piece of paper?” Hermann said. “You shouldn’t. You earned your money. You earned your disabilities in the VA. I shouldn’t have to give anybody a penny of that money.”

Veterans Affairs contends this practice amounts to illegal exploitation and profiteering. About 40% of complaints to the VA’s legal office in 2022 were about non-accredited claims consultants, according to an August 2023 news report in Military.com.

Horton’s bill to shut down the practice has overwhelming support from veterans, the VA, the American Legion, VFW, Disabled American Veterans and other groups. Dozens of veteran advocates attended Wednesday’s hearing in support of her proposal and in opposition to Cathey’s. 

Tensions were thick at the hearing. VA officials and veteran advocates referred to the unaccredited consultants as “claim sharks” and accused them of exploiting disabled veterans.

“These unaccredited disability claim consultants who are not subject to the VA standards strategically advertise their services to avoid regulatory oversight and … may engage in predatory and unethical practices targeting veterans and potentially robbing them of their VA disability compensation benefits,” Louisiana VA Secretary Charlton Meginley told the committee.

The Guard Act, the federal version of Horton’s bill, also has wide bipartisan support and the backing of 44 state attorneys general who memorialized it in a Aug. 9 letter that included the signature of Gov. Jeff Landry, who was Louisiana’s attorney general at the time.

Illegality in question

On the other side of the issue are business owners who argue they provide legitimate consulting services, and that their veteran customers are happily paying to learn how to fill out VA forms. Their supporters include U.S. Sen. John Kennedy, R-Louisiana, who co-authored the PLUS Act bill. 

It is already against federal law for non-accredited non-attorney agents to assist anyone in the preparation, presentation or filing of claims on behalf of veterans. The VA has been sending cease-and-desist letters to the companies and trying to take other legal action against them, but in 2006 Congress removed the penalties for violating that law. 

Since then, officials at the state level have stepped in, including in Louisiana. In 2021, Landry, as attorney general, shut down a non-accredited claims consulting operation called VetAttend, accusing the company of exploiting veterans by helping them fill out VA forms and then taking a cut of their veteran benefits.

The consultants say what they’re doing isn’t illegal because they’re not physically preparing the claims but merely telling veterans how to fill out the forms. 

Peter O’Rourke, former VA secretary in the Trump administration, is now an executive with the National Association of Veterans Rights (NAVR), one of the companies the VA has been trying to close. He told the committee businesses like his provide an alternative to help veterans navigate what has become a complex process at an agency that has a growing backlog of disability claims.

Mark Christensen, a former high-ranking officer in the U.S. Army and now an executive at Veterans Guardian, told lawmakers his company is a paid alternative to the free services. 

“Unfortunately, the VA disability process is bureaucratic and difficult to navigate and presents challenges to most veterans,” Christensen said.

‘The motive for this, it’s financial’

The suggestion that a veteran can pay a private consultant to somehow speed up a disability claim or avoid the bureaucratic backlog at the VA is false, according to veterans’ advocates who testified Wednesday. All disability claims go through the same path at the VA regardless of who is filling 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. 

Only accredited claims agents have access to the VA’s files and can look up a veteran’s claim status and service record and communicate directly with the VA — administrative advantages the non-accredited consultants don’t have. 

Charlie Aucoin, national vice commander of the American Legion and a lifelong Louisiana resident, said veterans already have numerous options for hiring private agents or firms that are VA-accredited to help them with claims.

“Let me tell you that there are few insults that are more offensive than to take advantage of veterans and their families under false pretenses,” Aucoin said. “We know it’s immoral to exploit any veteran filing for VA benefits … As it now stands, nothing stops and deters profiteers from overcharging and taking advantage of veterans. That has to end.”

Aucoin and other veterans pointed out that nothing stops consulting companies from obtaining VA accreditation. Mike Figlioli, deputy director of the VFW National Veterans Service, said accreditation is quick and easy. He told lawmakers he gets 400 to 500 people accredited every year. 

NAVR and other consulting companies have deliberately not sought accreditation because doing so would end their profit windfall, according to Figlioli. Once a company becomes accredited, it falls under federal oversight and can no longer charge fees just for helping veterans fill out forms. They would instead have to work on appeals and more complicated matters in order to make money, he said. 

“As to the motive for this, it’s financial,” Figlioli said.

Under questioning from the committee members, O’Rourke said his company employs no lawyers, medical practitioners or other such professionals. When Rep. Robby Carter, D-Amite, questioned the legality of the company providing what could be considered legal advice, O’Rourke said his company doesn’t officially advocate for any of its veteran customers.

“We don’t represent the veteran to the department,” O’Rourke said. “We don’t stand between the veteran and the Department of Veterans Affairs … We don’t expose ourselves to the VA. We’re working with the veteran. The veteran chooses to hire us.”

Taking a cut

O’Rourke said his company and several others like it are veteran-owned. 

But critics point out that many of those veteran owners are former high-ranking officers with much more education and experience than the majority of their customers who come from the lower enlisted ranks.

Generally, to serve as a commissioned officer in the military, one must have at least a bachelor’s degree. The larger majority of the armed forces are the enlisted ranks, which require a high school diploma or its equivalent. 

Companies might also be taking advantage of a lack of awareness among veterans who don’t realize they don’t have to pay someone to receive their VA benefits, according to critics. 

“Why do I need to pay someone when I can go have that same service done free?” VFW member Ray Bass told the committee.

Cathey, who is a proponent of the unaccredited consultants, is also a major in the U.S. Army Reserve.

One veteran, Milford Monroe, testified in support of Veterans Guardian, saying the company helped him increase his disability rating to 80%, up from the 30% that he said the DAV had secured for him for ailments caused by asbestos exposure. The VA raised his monthly payments from roughly $600 to $2,000, he said. In exchange, Monroe paid Veterans Guardian an $8,000 fee.

“The DAV got me another 30% on the asbestos,” Monroe said, “but they weren’t going any further with it. Veterans Guardian got me bumped up to 80% with the depression caused by the asbestos … So yeah, I didn’t want to give them that $8,000, but they earned it and I paid them. That was my agreement.”

Monroe said he didn’t find out until about four years ago that he could even qualify for VA disability benefits for his ailments. He told lawmakers they should focus on eliminating the need for companies such as Veterans Guardian. 

“Spend a little bit of my tax money with a marketing campaign in the state of Louisiana, telling veterans the illnesses that may have been caused by their military service and where to go to find out,” he said. 

Tax return comparison iffy

One of the biggest arguments made in defense of claims consultants is that they give veterans a choice between a paid service and a free service. Christensen, the Veterans Guardian executive, compared the business model of his company and other unaccredited consulting firms to private third-party tax prep services charging to file returns with forms and websites that the Internal Revenue Service offers at no cost. 

“We would equate it the same way as if somebody could use IRS.gov to do their taxes, but plenty of people use H&R Block,” he said. 

Cathey repeated this same comparison during his closing argument on his bill, but there are some 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 American Legion rep, a private lawyer or some other VA-accredited agent would do with their client’s disability claim. 

As O’Rourke told the committee, his and other unaccredited claims companies don’t “expose” themselves to the VA. They essentially work in the background without signing anything or placing their names on any forms, so the VA has no indication if a veteran has even hired a consultant unless a complaint is filed.

The American Legion and VFW don’t oppose the existence of third-party claims agents. Rather, they oppose the existence of unaccredited ones. The groups said the NAVR and other companies should obtain VA approval and be subject to the same rules and oversight as the thousands of other third parties that have been working claims for decades. 

Meginley said the Legislature shouldn’t help out-of-state companies take a cut out of the taxpayer-funded benefit payments going to Louisiana’s disabled veterans and the spouses and children of deceased service members.

Both bills are headed to the House floor for consideration, but Rep. Carter pointed out that their contradictory nature would not allow both to become law, so either lawmakers or the governor will have to decide which one to enact. 

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