H.R. 3834, Protecting Veteran’s Claims Option Act

Bill Summary

H.R. 3843 would require the Board of Veterans Appeals (BVA) to accept additional evidence from claimants when the Court of Appeals for Veterans’ Claims (CAVC) remands certain appeals for veterans’ benefits. BVA is a component of the Department of Veterans Affairs (VA) that hears appeals on matters affecting VA benefits. Further, the bill would prohibit VA from rejecting appeals of claims for veterans’ benefits solely because the appellant does not submit new or relevant evidence. Finally, the bill would extend the reduction of pension payments for veterans and survivors who reside in Medicaid nursing homes.

Estimated Federal Cost

The estimated budgetary effects of HR 3834 are shown in Table 1. The costs of the legislation fall within budget functions 550 (health) and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 3834 will be enacted early in fiscal year 2026 and that outlays will follow historical patterns for affected programs.

Direct Spending

Provisions of H.R. 3834 would affect direct spending by requiring BVA to consider additional evidence in appeals for veterans’ benefits, which CBO estimates would result in an increase in the number of people receiving disability compensation from VA.[1] It also would reduce pension payments to veterans and survivors who reside in Medicaid nursing homes. In addition, the bill would require BVA to hear certain appeals, which would increase that agency’s workload. (That provision also would affect spending subject to appropriation.)

CBO estimates that, in total, enacting the bill would reduce net direct spending by $39 million over the 2026- 2035 period (see Table 2).

Additional Evidence. H.R. 3834 would allow claimants to submit additional evidence when appealing certain decisions. Claimants can appeal to the Court of Appeals for Veterans Claims (CAVC) if BVA denies an initial appeal of a VA decision that denies a claim. Each year, CAVC remands about 7,250 appeals back to BVA. In many cases, CAVC directs BVA to reconsider its evaluation of the original evidence submitted in the claim. Under current law, appellants generally are not permitted to submit additional evidence to BVA when it considers a remanded case. Under the bill, appellants in such cases may submit additional evidence to support their claims within 90 days.

CBO estimates that, under the bill, about 1,000 veterans each year would submit additional evidence related to claims for disability compensation to BVA, and that about 100 would have their claims decided in their favor.Using information about the disability ratings of appellants, CBO estimates that about 25 veterans would newly receive disability compensation each year at an average annual amount of $16,000. CBO estimates that the remaining 75 veterans would have their disability rating increased and receive an additional $18,800 per year. In total, considering additional evidence during appeals would increase direct spending by $101 million over the 2026-2035 period, CBO estimates.

Pensions and Medicaid. Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires November 30, 2031. Section 3 would extend that reduction for 38 months, through January 30, 2035. CBO estimates that extending that requirement would reduce VA benefits by about $10 million per month. (Those benefits are paid from mandatory appropriations and are therefore considered direct spending.) As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by about $6 million per month. Thus, enacting section 3 would reduce net direct spending by $148 million over the 2026-2035 period.

Claims Workload. As discussed below under the heading “Provisions that Affect Spending Subject to Appropriation and Direct Spending,” CBO estimates that BVA’s workload would increase as a result of the bill’s requirement to hear each appeal on the merits of the claim, even if new and relevant evidence is not submitted. Some of the cost of that additional workload would be paid from the Toxic Exposures Fund, a mandatory appropriation. Direct spending for that requirement would total $8 million, CBO estimates.

Provisions that Affect Spending Subject to Appropriation and Direct Spending

H.R. 3834 would require BVA to consider an appeal for VA benefits in cases where the appellant does not submit new evidence to support the claim. Under current law, applicants for VA benefits who receive an unfavorable decision on their initial claim from the VA may appeal by filing a supplemental claim in which they submit additional evidence to VA to support their appeal. The submitted evidence must be considered new and relevant; otherwise, VA denies the appeal. Claimants may then appeal the decision directly to BVA. However, BVA typically also denies appeals in cases where a claim lacks new and relevant evidence.

The bill would require BVA to consider an appeal on the merits of the claim, regardless of whether new and relevant evidence is submitted. CBO anticipates that requiring BVA to consider such appeals would not affect the outcomes because claims would include the same information that resulted in the initial decision. However, considering those appeals would increase BVA’s workload. Using information on the number of claims that are denied for lack of new and relevant evidence, CBO estimates the additional workload would be equivalent to that of 50 full-time attorneys. Those attorneys would receive an average total compensation of about $250,000, for a total cost of $26 million over the 2026-2035 budget window, CBO estimates.

CBO expects that some of the costs of implementing the bill would be paid from the Toxic Exposures Fund (TEF) established by Public Law 117-168, the Honoring our PACT Act. The TEF is a mandatory appropriation that VA uses to pay for health care, disability claims processing, medical research, and IT modernization that benefit veterans who were exposed to environmental hazards. Additional spending from the TEF would occur if legislation increases the costs of similar activities that benefit veterans with such exposure. Thus, in addition to increasing spending subject to appropriation, enacting the bill would increase amounts paid from the TEF, which are classified as direct spending.

CBO projects that the proportion of costs paid by the TEF will grow over time based on the amount of formerly discretionary appropriations that CBO expects will be provided through the mandatory appropriation as specified in the Honoring our PACT Act.[2] CBO estimates that over the 2026-2035 period, implementing the bill would increase spending subject to appropriation by $18 million and direct spending by $8 million.

Uncertainty

CBO’s estimate of the bill’s costs is subject to uncertainty about the number of veterans whose appeals would be adjudicated in their favor because they were able to submit additional evidence to the Board of Veterans Appeals. Costs could differ if the number of veterans who become eligible for benefits is greater or less than CBO estimates.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 3834 would not increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2036.

CBO estimates that enacting H.R. 3834 would not increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2036.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Federal Costs: Logan Smith

Mandates: Brandon Lever

Estimate Reviewed By

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald 
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis