Louisiana enacts law to let consultants profit off disabled veterans’ benefit claims

A group of military veterans gathers at the Louisiana State Capitol on May 20, 2024, for an awards ceremony and to oppose a bill by Sen. Stewart Cathey that lawmakers passed. (Photo credit: Wes Muller/Louisiana Illuminator)

Louisiana has quietly enacted a law that allows unregulated companies to profit off the benefit claims of disabled American veterans.

Republican Gov. Jeff Landry allowed Senate Bill 159 to become law by default by refusing to sign or veto it. He’s attempting to walk a political tightrope between the bill’s Trump-adjacent corporate sponsors and its many opponents, including the governor’s own Veterans Affairs secretary and a long list of veteran service organizations such as the American Legion, Veterans of Foreign Wars (VFW) and Disabled American Veterans (DAV).

As attorney general, Landry himself cracked down on the types of businesses the new law will help. It took effect Tuesday.

The proposal, sponsored by Sen. Stewart Cathey, R-Monroe, deals with the often misunderstood process of filing for military veteran disability benefits. Loopholes in federal law have created an unregulated industry that makes a windfall from “claims consulting,” a practice illegal under federal law but difficult to enforce.

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 forms and submit medical records and other related information to support their claim.

The VA offers accreditation to anyone who wants to assist veterans in filing their disability claims. Getting the accreditation involves a background check and a written exam to ensure the applicant can navigate the claims system and represent veterans in appeals.

Under federal law, it is illegal for anyone without VA accreditation to provide claims assistance to a veteran, and it is illegal to charge veterans for such assistance. About 40% of complaints to the VA’s legal office in 2022 were about non-accredited claims consultants, according to an August 2023 report from Military.com.

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A cursory internet search for “VA claims consulting” will generate virtually endless listings for non-accredited companies offering claims assistance for obtaining disability benefits or applying for an increase in benefits.

Cathey’s bill contradicts federal law by permitting unaccredited consultants to charge up to $12,500 for telling veterans how to fill out their disability forms.

Unbeknownst to many veterans, such services are free and available from numerous sources that have VA accreditation, including private claims agents, lawyers and groups such as the American Legion and VFW.

Cathey’s legislation was derived from a federal proposal sponsored by U.S. Sen. John Kennedy, R-Louisiana, but congressional gridlock grounded the bill, prompting its backers to take versions of it to state legislatures. So far, Louisiana is the only state to have approved one.

The driving forces behind the legislation are two unaccredited claims companies, Veterans Guardian and Veteran Benefits Guide. They have joined forces under a lobbying group called National Association of Veterans Rights. NAVR’s leader and chief lobbyist is Peter O’Rourke, the VA secretary from the Trump administration.

“This landmark law safeguards Louisiana’s veterans from exploitation, ensures transparency in VA disability benefit assistance, upholds their autonomy while providing essential protections, and reinforces their right to choose,” O’Rourke said in an email Thursday.

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

Veteran service organizations have branded the companies as “claim sharks” and profiteers. A report in the Texas Tribune uncovered one scheme involving a consulting company that pushed veterans to claim medical conditions they didn’t actually have and paying referral fees to certain telemedicine providers that help with diagnostics. One client reported being charged $10,000 for “coaching” services that amounted to being told to watch six hours of pre-recorded videos.

Still, some veterans have expressed gratitude for the unaccredited consultants, saying they were able to secure benefit increases that other claims agents couldn’t get or wouldn’t ask for, according to previous reporting in the Illuminator .

O’Rourke has tried to distance his companies from what he says are the bad actors in the industry. He refutes allegations of profiteering, saying his company helps ease the backlog of VA claims and provides veterans with the choice of paying for assistance.

According to the VA, the backlog of claims was around 270,000 as of June 1 and has been steadily declining after reaching over 400,000 last year. Backlogs include claims pending more than 125 days. The decade high occurred in 2013 reaching over 600,000 claims but fell by roughly a third within six months. The most recent spike came from a huge influx of applications following the passage of the 2022 PACT Act — the largest expansion of veteran benefits since World War II.

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The notion that a veteran can pay a consultant, or anyone else for that matter, to somehow speed up a disability claim or avoid the bureaucratic logjam at the VA is false, according to veterans’ advocates and the Louisiana VA. All 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 to move a veteran to the front of the line, they said.

Louisiana VA Secretary Charlton Meginley had lobbied fervently against Cathey’s legislation, saying the consultants 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 — or any fees — just for helping veterans fill out initial claims forms. They would instead have to work on appeals and more complicated matters in order to earn a commission.

“Our mission is to serve those who served, connecting them to the benefits they have earned in service to our country,” Brandee Patrick, Meginley’s spokesperson, said in an email Thursday. “Louisiana veterans have access to numerous free services to take advantage of when applying for benefits, including LDVA’s federal VA-accredited veterans assistance counselors located in parish veterans service offices throughout our state.”

The governor’s decision to let the bill become law is a stark reversal of his previous stance on the issue. Prior to becoming governor, Landry investigated and shut down unaccredited claims consultants while serving as attorney general. He accused Baton Rouge-based VetAttend Professional Services of exploiting veterans by helping them fill out VA forms and then taking a cut of their benefits.

Landry was also one of 44 state attorneys general who signed a letter urging Congress to support the countermeasure to Kennedy’s bill and reinstate penalties to unaccredited claims consultants.

The governor’s office did not respond to a request for comment for this report.

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