On October 26, 2012, David McLenachen, Director of the Pension and Fiduciary Division, Department of Veterans Affairs (VA), issued Fast Letter 12-23. Described as a clarification of VA policy, this fast letter actually substantially tightened the eligibility criteria for veterans and others residing in senior or independent living facilities who apply for needs-based VA pension benefits with aid and attendance or housebound supplements and wish to include the cost of room and board in the facility as unreimbursed medical expenses in calculating the VA benefit amount. Specifically, under the new guidelines the cost of room and board in senior or independent living facilities can be included as an unreimbursed medical expense only in the following two (2) situations:

1. If the facility provides custodial care to the resident.  The VA considers a facility to provide custodial care if it assists a resident with two or more activities of daily living (ADLs). As defined in VA regulations, ADLs are “basic self-care and includes bathing or showering, dressing, eating, getting in or out of bed or a chair, and using the toilet.” 38 C.F.R. § 4.124a note 3; or,
2. If the resident’s physician states in writing that the resident must reside in that facility because custodial care has been prescribed by the physician which will be provided by a third-party provider.

Many residents of senior or independent living facilities receive assistance with Instrumental Activities of Daily Living (IADLs).  VA regulations define IADLs as “activities other than self-care that are needed for independent living, such as meal preparation, doing housework and other chores, shopping, traveling, doing laundry, being responsible for one’s own medications, and using a telephone.” 38 C.F.R. § 4.124a note 3. Under the new guidelines, the cost of room and board in facilities that provide only IADLs to a resident are not includible as unreimbursed medical expenses in calculating the VA benefit amount.

These procedures apply to all original claims pending on or filed after the date of the fast letter, and to all claimants who were receiving VA pension benefits with aid and attendance or housebound supplements prior to the date of the letter but relocate to a new senior or independent living facility after the letter was issued. It does not appear that the new guidelines apply to applicants residing in nursing homes or assisted living facilities.

My take away is that this change will make it more difficult (impossible?) for the room and board costs incurred by residents of senior and independent living facilities to be used as an unreimbursed medical expense for VA purposes.

Fast Letter 12-23 is attached here.