DEPARTMENT OF VETERANS AFFAIRS

8320-01

38 CFR Part 17
RIN 2900-AP39
Adaptive Equipment Allowance
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.

SUMMARY: The Department of Veterans Affairs (VA) amends its regulations
governing the provision of a monetary allowance to certain veterans and eligible
members of the Armed Forces who require adaptive equipment to operate an
automobile or other conveyance. VA proposed establishing in regulation a VA Adaptive
Equipment Schedule for Automobiles and Other Conveyances to calculate the amount
of the monetary allowance for adaptive equipment based on industry standards and our
experience administering this program. We adopt as final this proposed rule, with
changes based on public comment. This rulemaking addresses reimbursement to
eligible persons who have paid for adaptive equipment and payments made by VA
directly to registered adaptive equipment providers, but not the eligibility requirements to
receive adaptive equipment.

DATES: The final rule is effective [Insert date 30 days after date of publication in
the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT: Penny Nechanicky, National Program
Director, Prosthetics Sensory Aids Service (10P4R), Department of Veterans Affairs,
810 Vermont Avenue, N.W., Washington, DC 20420, (202) 461-0337 (This is not a tollfree number).

SUPPLEMENTARY INFORMATION: Section 3902(b) of Title 38, United States Code
(U.S.C.) requires VA to provide eligible persons with “the adaptive equipment deemed
necessary to insure that the eligible person will be able to operate [an] automobile or
other conveyance in a manner consistent with such person’s own safety and the safety
of others and so as to satisfy the applicable standards of licensure established by the
State of such person’s residency or other proper licensing authority.” Under 38 U.S.C.
3901, eligible persons include veterans and active duty members of the Armed Forces
who have been diagnosed with one or more specified disabilities. Under section
3901(2), adaptive equipment is defined to include, but is not limited to, power steering,
power brakes, power window lifts, power seats, air conditioning, and other equipment
necessary to help the eligible individual enter, exit, or operate the automobile or other
conveyance. VA implements these statutory authorities through regulation at Title 38
Code of Federal Regulations (CFR) sections 17.155–17.159. Because VA does not
have the capacity to build or install adaptive equipment for automobiles or other
conveyances, VA instead reimburses eligible persons or pays registered providers for
the cost of the adaptive equipment. See 38 CFR 17.156.
On March 12, 2020, VA proposed amending its regulations governing the
provision of a monetary allowance to certain veterans and eligible members of the
Armed Forces who require adaptive equipment to operate an automobile or other
conveyance. Among other things, that proposed rule addressed establishing in

regulation a VA Adaptive Equipment Schedule for Automobiles and Other Conveyances
(Schedule) to calculate the amount of the monetary allowance for adaptive equipment
based on industry standards and our experience administering this program, and
reimbursement to eligible persons who have paid for adaptive equipment and payments
made by VA directly to registered adaptive equipment providers.
We provided a 60-day period in which interested members of the public could
submit comments. The comment period closed May 11, 2020 and we received four
comments, two of which raised substantive issues. Based on these comments, we
adopt as final this proposed rule, with changes based on public comment.

§ 17.157 Definitions.
We proposed making minor revisions to the definition of “adaptive equipment” for
purposes of readability and clarity. Adaptive equipment was defined to include “any
term specified by the Under Secretary for Health or designee.” Because adaptive
equipment is generally understood to refer to tangible pieces of equipment rather than
words or terms, we proposed amending the definition to refer to any item. As amended
the proposed definition stated, inter alia, that adaptive equipment means “equipment
which must be part of or added to a conveyance manufactured for sale to the general
public to make it safe for use by the eligible person and enable that person and the
conveyance to meet the applicable standards of licensure. Adaptive equipment
includes any item specified by the Under Secretary for Health or designee as ordinarily
necessary for any of the classes of losses or combination of such losses specified in 38
CFR 17.156, or as deemed necessary in an individual case for an eligible person.”
One commenter requested clarification on whether “any item” includes both
tangible and non-tangible (i.e., software and other electronic interface technologies)

equipment, which are and will continue to be essential for the safe and functional
operation of modified automobiles and adaptive equipment. The commenter
recommended amending the definition of adaptive equipment to specifically address
this issue. We agree with the comment to the extent that software and other electronic
interface technologies are and may continue to be essential for the safe and functional
operation of modified automobiles and adaptive equipment. However, we do not
believe that adding modifying language such as “tangible,” “non-tangible,” or “intangible”
to the definition of “adaptive equipment” would provide the additional clarity that the
commenter seeks. We believe those terms are too subjective, and further we do not
know of standardized definitions or characterizations of those terms in National Highway
Traffic System Administration (NHTSA)guidance or regulations. We do, however,
amend the definition of “adaptive equipment” to specifically include language related to
equipment being essential for the continued safety and functionality of a modified or
altered automobile and adaptive equipment. We believe this will assist to capture
software or other electronics-based equipment to ensure it is covered in the definition of
“adaptive equipment.”
One commenter stated that the definition for adaptive equipment deviates from
the statutory definition of that same term in 38 U.S.C. 3901(2) and stated that VA should
explain why the definitions are not the same. We first note that the definition of adaptive
equipment found in § 17.157 is essentially unchanged from when the rule first published
in 1988 (53 FR 46608, Nov. 18, 1988). The only prior amendment to this section
occurred in 1996, when the section was redesignated and a nonsubstantive change of
job title from Chief Medical Director to Under Secretary for Health established. (61 FR
21966, 21968, May 13, 1996). In the present proposed rule, we stated that we would
change the phrase “any term” to “any item” for purposes of clarity. We do not agree
with the statement that the regulation deviates from the statute. The statute at 38

U.S.C. 3901(2) does not define the term adaptive equipment per se but does provide
examples of the types of equipment or modifications that may fall within the ambit of
that term. Section 17.157 defines the term adaptive equipment, incorporates statutory
language regarding what types of equipment may be included, and then addresses VA’s
authority to specify other items as ordinarily necessary for any of the classes of losses
or combination of such losses specified in 38 CFR 17.156, or as deemed necessary in
an individual case for an eligible person. We make no changes based on this comment.
We proposed adopting several definitions found in the National Traffic and Motor
Vehicle Safety Act (Pub. L. 89-563) as amended. We proposed defining the term
“manufacturer” to mean the same as in 49 U.S.C. 30102(a)(6). One commenter stated
that the correct citation is to 49 U.S.C. 30102(a)(5). We disagree. While the definition
of manufacturer was originally designated at 49 U.S.C. 30102(a)(5), it was redesignated
as paragraph (a)(6) in Pub. L. 114-94, section 24109(b)(2). We make no changes
based on this comment.
We proposed defining registered provider and unregistered provider. We
proposed defining a registered provider as a manufacturer, modifier, or alterer
registered with the NHTSA’s Modifiers Identification Database currently available at
https://www.nhtsa.gov/apps/modifier/index.htm. Any manufacturer, modifier, or alterer
who is not registered is considered an unregistered provider.
The purpose of the NHTSA Modifiers Identification Database is to provide a
running and cumulative listing of all individuals or entities that have sought identification
as a vehicle modifier under the requirements of 49 CFR part 595. NHTSA does not
approve or endorse any of the modifiers who have furnished information under part 595.
One commenter stated that VA should reconsider its proposed reliance on
NHTSA to ensure quality, as NHTSA’s expertise in the adaptive equipment arena is
focused on vehicle safety and not on the quality of adaptive equipment installation,

replacement, or repair. The commenter stated that the data provided in the database is
only as accurate as the information submitted by each modifier and is not verified or
validated by NHTSA. Furthermore, the database is updated as new information is
received but is not purged of those modifiers who may have over time changed names,
addresses, or gone out of business. NHTSA does not assess the abilities of any of the
listed modifiers to perform any requested or represented modification services. The
commenter stated that VA’s reliance on the Database as an indicator of vendor
competence would be misplaced, misleading, and potentially dangerous. The
commenter stated that the Database is not a listing of credible vendors proven to meet
objective quality and safety criteria. The commenter also indicated that it believed a
better source for identifying qualified modifiers would be reliance on membership in its
organization.
We do not agree. The purpose of the NHTSA Modifiers Identification Database
is to provide a running and cumulative listing of all individuals and entities that have
sought identification as a vehicle modifier under the requirements of 49 CFR part 595.
We are using the database because registration is indicative of the provider
acknowledging that it is cognizant of the relevant regulatory requirements. The
database is available to the public for the purpose of identifying a modifier in a given
geographical area. VA believes it is prudent to rely on a database, created by a sister
Federal agency with subject matter expertise, that serves as a readily accessible
resource for eligible persons seeking registered providers of adaptive equipment
installation and repair.
As noted by two commenters, registered providers can be reimbursed for labor
costs while unregistered providers cannot. One commenter stated that VA should
clearly state that in the regulation. This was stated in proposed 38 CFR
17.158(b)(3)(iii). We make no changes based on these comments.

One commenter asked what manner or by what method VA intends to confirm
that unregistered providers are not conducting or being reimbursed for activities
intended to be performed exclusively by registered providers. We do not distinguish
providers based on the activities they perform and do not possess the necessary
knowledge or expertise to delineate identified activities related to adaptive equipment
installation ,repair, reinstallation, or replacement exclusively to registered or
unregistered providers. As stated in proposed 38 CFR 17.158(b)(2)(ii), VA will
reimburse eligible persons identified in 38 CFR 17.156(a) who have purchased adaptive
equipment (e.g., installations, repairs, reinstallations, replacements) from unregistered
providers. However, VA does not reimburse or pay unregistered providers for labor
costs as mentioned in the foregoing paragraph. We make no changes based on this
comment.
One commenter expressed concern that there may be areas of the country
where veterans with disabilities do not have access to registered providers, or perhaps
they have a long-standing relationship with an unregistered provider. The commenter
indicated VA should create limited exceptions to its rule regarding labor costs so that
these veterans are not disadvantaged. The commenter noted that under the provisions
of Pub. L. 114-256, Sec. 3(b)(8), where technically appropriate, VA is to allow veterans
to receive vehicle modifications “at their residence or location of choice.” We note that
any provider of adaptive equipment may register with the NHTSA database regardless
of location, in the United States or elsewhere. We make no changes based on this
comment.

§ 17.158 Limitations on assistance.

We proposed amending paragraph (b) to state that VA will reimburse eligible
persons or pay registered providers for adaptive equipment that VA determines is
needed based on the information submitted and the Schedule. In addition to payment
or reimbursement rates for specific types of adaptive equipment listed in the Schedule,
VA would pay or reimburse for roadside service, waste disposal fees, and hourly labor
rates listed in the Schedule, subject to this section. Payment or reimbursement rates
would be based on the information submitted, the Schedule in effect on the date
installation, reinstallation, replacement, or repair is complete and the characterization of
the equipment as new, used, or unlisted.
Proposed paragraph (b)(3) would establish how VA would use the Schedule for
calculating the amount reimbursed to eligible persons or payments made to registered
providers for labor costs. VA proposed creating a Schedule that would set national
payment/reimbursement rates utilizing the high cost itemized in National Mobility
Equipment Dealers Association’s (NMEDA) Average Price Survey, which we stated was
published annually. One commenter requested that VA correct the reference in the
proposed rule to how often the NMEDA’s Average Price Survey is published because
that survey is conducted and published every other year. We thank the commenter for
the correction and clarify that this was a misstatement in the proposed rule rather than a
substantive misunderstanding; VA will use the most recently conducted and published
survey. However, as this reference to how often the survey is published is not reflected
in regulatory language, we make no changes based on this comment.
In the preamble for the proposed rule we included an example of a Schedule,
which was intended to provide the public an indication of what the Schedule would look
like and the types of adaptive equipment that may be listed consistent with what is listed
in NMEDA’s Average Price Survey, and payment or reimbursement rates for adaptive

equipment or other related services. We used data from the 2018 Average Price
Survey to compile this example.
One commenter stated that the Schedule as printed in the proposed regulation
and the proposed definition at § 17.157 departs from the statutory definition in 38 U.S.C.
3901, and that VA should explain its departure from the statutory language. As VA did
not propose to define the term “schedule,” and given the remaining context of the
comment, we assume the commenter was referring to the definition of “adaptive
equipment” as proposed. We reiterate from our response above that the term “adaptive
equipment” as proposed in § 17.157 is consistent with the definition in 38 U.S.C.
3901(2). Further, the Schedule as printed in the proposed rule is not limited to items
specifically included in the statutory definition ,although the equipment and services
found in the sample Schedule are wholly within the definition of adaptive equipment
found in the statute and implementing regulation. We make no changes based on this
comment.
One commenter stated that the Schedule published in the preamble for the
proposed rule is based on data collected nearly two years ago. The commenter
recommended that VA’s proposed Schedule utilize the most current survey of this type.
As we noted in our discussion of the proposed rule, the Schedule we included in
the preamble is intended to be an example of what the final version would look like. We
agree that the final Schedule published in conjunction with the final rule should be
based on the most current data. VA believes there is some confusion on this issue
created by a drafting error in proposed paragraph (b)(7) where we stated that “VA will
establish the Schedule for each fiscal year after September 30, 2019 and publish that
Schedule on a publicly accessible page on the www.prosthetics.va.gov website.” The
reference to September 30, 2019, is an artifact from an earlier internal VA draft of the

proposed rule. We amend paragraph (b)(7) to state that VA will establish the Schedule
on [Insert date 30 days after date of publication in the FEDERAL REGISTER]
based on the most recent available data and each fiscal year thereafter, and publish
that Schedule on a publicly accessible page on the www.prosthetics.va.gov website.
In paragraph (b)(4) we proposed addressing payment or reimbursement for
installation of new adaptive equipment, where paragraph (b)(4)(i) states that VA will pay
the lesser of the amount for the new adaptive equipment listed in either a final itemized:
(1) Invoice, (2) paid receipt, or (3) bill of sale for the purchase; or (4) the amount listed in
the Schedule. One commenter asked whether paragraph (b)(4)(i)(4) permits a veteran
to be reimbursed at the schedule rate if the price of certain adaptive equipment is not
set out separately in the receipt of a new vehicle because such equipment has already
been installed and included in the overall cost of the vehicle (such as air conditioning or
power steering).

We clarify that paragraph (b)(4)(i)(4) does provide that VA will

reimburse at the schedule rate, which would address situations where the adaptive
equipment is already installed on a new vehicle and the price of such equipment is not
separately itemized as provided in paragraphs (b)(4)(i)(1) through (3).
We make no changes based on this comment.
Proposed paragraph (b)(4)(i) states that VA will pay the lesser of the amount for
the new adaptive equipment listed in either a final itemized: (1) Invoice, (2) paid receipt,
or (3) bill of sale for the purchase; or (4) the amount listed in the Schedule. One
commenter stated that VA should place the Schedule reference first in this subsection,
effectively making the Schedule the default assumption for reimbursement given
modern invoicing requirements and dealer practices. Paragraph (b)(4)(i) is not intended
as a hierarchical list. The Schedule amount is not the default preference as it relates to
payment or reimbursement amounts. We make no change based on this comment.

In paragraph (b)(5) we proposed addressing payment or reimbursement for
installation and repair of used adaptive equipment. We proposed that for used adaptive
equipment listed in the Schedule that is more than one (1) year old from the date of
manufacture VA will depreciate it by twenty (20%) percent per year from the time the
equipment was pre-installed or installed as new on an automobile or other conveyance
to the time of its reinstallation for which reimbursement or payment is being sought for a
period up to five (5) years. VA would reimburse an eligible person, who meets the
requirements of (b)(2)(i) or (ii), or pay a registered provider who meets the requirements
of (b)(2)(iii) the lesser of the amount of the adaptive equipment listed in the final
itemized invoice, paid receipt, or bill of sale for the purchase or the amount listed in the
Schedule reduced by twenty (20%) percent for each year from the time the equipment
was pre-installed or installed on the automobile or other conveyance for a period up to
five (5) years. We proposed that VA would reimburse or pay any labor costs consistent
with paragraph (b)(3) of this section, but would not reimburse or pay labor costs for
used equipment that is more than five (5) years old from the date of manufacture.
One commenter argues that the proposed rule regarding depreciation is a drastic
departure from current practice, and that VA has accelerated the depreciation schedule
to the detriment of veterans with disabilities but has not explained its departure from its
long-standing practice. The commenter references a VHA policy regarding
reimbursement for adaptive equipment when used vehicles are purchased.

The VHA policy the commenter references is VHA Handbook 1173.4 Automobile
Adaptive Equipment Program, which bases the reimbursement rate for prescribed
adaptive equipment on a used vehicle on the age of the vehicle regardless of the age of
the adaptive equipment. However, VHA determined that adaptive equipment

depreciates at a faster rate than the vehicle itself and the functional lifespan of that
equipment is five years. Because of the finite functional lifespan of adaptive equipment,
VA does not recommend use of any specific adaptive equipment older than five years to
ensure the continued safety and functionality of a modified automobile and adaptive
equipment. VA’s adoption of a 20% annual depreciation standard for reimbursement or
payment for used adaptive equipment reflected in the proposed rule accounts for the
five-year functional lifespan of the adaptive equipment which also aligns with eligible
persons being entitled to new adaptive equipment at the end of a four-year period (in
other words, every five years). We make no changes based on this comment, but do
note that VHA Handbook 1173.4 will be rescinded and replaced with updated guidance
upon this final rule being effective. We note that VHA Handbook 1173.4, paragraph 13
is similar to VBA’s policy, VA Manual MP4, Part IV, Chapter 18, section 18A.03, which
provides payment information for prescribed adaptive equipment on a used vehicle on
the age of the vehicle regardless of the age of the adaptive equipment. We will work
with VBA to harmonize its guidance with VHA policy and regulation following publication
of this rulemaking.

One commenter stated that the deprecation rule affects reimbursement for repair
of adaptive equipment, and that decreasing the depreciation period is unreasonable and
contradicts 38 U.S.C. 3902(c) which requires reimbursement for repair of adaptive
equipment, with no restriction on the age of the equipment.
We do not agree. Section 3902(c) begins with the language “[i]n accordance
with regulations that the Secretary shall prescribe,” to further mandate, among other
things, that VA repair adaptive equipment. This is discretionary language that provides
VA authority to determine conditions related to that repair, to include establishing and

modifying a depreciation period associated with reimbursements of repair of adaptive
equipment. Paragraph (c) of 38 U.S.C. 3902 must also be read in conjunction, and
harmonized, with other provisions of Chapter 39. VA must provide each eligible person
the adaptive equipment deemed necessary to ensure that the eligible person will be
able to operate the automobile or other conveyance in a manner consistent with such
person’s own safety and the safety of others. See 38 U.S.C. 3902(b)(1). Adaptive
equipment, like any other automotive component, experiences wear and tear after
installation from normal use as well as any conditions specific to the environment in
which it must operate. In addition, installed adaptive equipment has a finite service life
which can be maintained or extended by component repair or replacement. However,
service life is reset if the adaptive equipment is replaced, and VA believes that new
adaptive equipment is less likely to require repair in order to maintain functionality at a
level sufficient to ensure that an eligible person can operate the automobile or other
conveyance in a manner consistent with such person’s own safety and the safety of
others. Further, repeated repair of older installed adaptive equipment rather than
replacement deprives an eligible person of any medical benefit that could accrue from
design changes or improvements that a manufacturer may incorporate into later models
of that adaptive equipment. In addition, adaptive equipment incorporates relevant
standards in place at the time of manufacture. By requiring replacement rather than
repair of adaptive equipment older than five years VA can ensure, to the greatest extent
practicable, that eligible persons have access to and use of adaptive equipment that is
manufactured consistent with up to date quality standards. We make no changes
based on this comment.
In paragraph (b)(6) we proposed addressing payment or reimbursement for any
adaptive equipment that does not appear on the Schedule but meets the definition of
adaptive equipment in § 17.157.

One commenter stated that new technologies will be developed independently of
VA’s Schedule maintenance, and the regulations lack clear instructions for veterans
who purchase a vehicle before the Schedule update occurs. The commenter believes
that it may be confusing for veterans to have customized equipment lumped together
with equipment that is likely to move onto the Schedule. The commenter provided
examples of a vehicle manufacturers adding a feature that would qualify as adaptive
equipment that becomes available for purchase starting January 1, and veterans
purchasing the new equipment earlier. Specifically, the commenter raised the issue of
equitable treatment. The commenter also expressed concern that veterans may delay
vehicle purchases until the Schedule update is published to be sure their equipment will
be included.
For adaptive equipment that is not listed on the Schedule but meets the definition
of adaptive equipment, VA will pay or reimburse the lesser of the cost of the adaptive
equipment when equal to or less than what VA has paid for a similar item in the past or,
when available, the commercially available price for a similar item. In many cases, VA
will have paid for a similar item in the past, or VA will be able to compare the item to
other items available commercially. If the price of a similar commercially available item
is not available, or VA has not previously paid for a similar item, VA will pay or
reimburse the billed charges. Authorizing payment of actual cost by obtaining the final
invoice, paid receipt, or bill of sale for the purchase would provide VA with information
that can be used in future revisions to the Schedule. We make no changes based on
this comment.
In proposed paragraph (b)(7) we addressed annual adjustments to the Schedule.
We proposed that VA will increase the reimbursement amounts in the Schedule using
the indices for two expenditure categories of the Consumer Price Index (CPI) for All
Urban Consumers. The index for the expenditure category for “motor vehicle parts and

equipment” will be used to calculate the increase in the reimbursement amounts for
adaptive equipment on the Schedule, and the index for “motor vehicle maintenance and
repair” will be used to calculate the increase in the reimbursement amounts for labor.
One commenter stated that VA should not rely on CPI to update costs on the
Schedule. The commenter stated that vehicular and adaptive equipment technologies
are evolving and will continue to evolve, and the associated expenses must be
accounted for if VA’s Schedule is intended to be accurate and credible. The commenter
stated that increasingly sophisticated automobile technology and newly developed
adaptive equipment product prices may not be accurately reflected by a CPI-reliant
update.
We do not agree. VA believes that the two CPI expenditure categories will
adequately reflect changes to both equipment and labor costs, and we have been
unable to identify any other alternate categories that would better serve that purpose.
We note that our usage of the CPI for all urban consumers as the basis for adjusting
payment and reimbursement amounts for adaptive equipment listed on the Schedule is
consistent with the statutory scheme found at 38 U.S.C. 3902(e) for annual adjustments
for VA payments of the total purchase price of the automobile or other conveyance
under paragraph (a) of that section. We make no changes based on this comment.

Miscellaneous.
One commenter requested that VA confirm that, consistent with the Veterans
Mobility Safety Act of 2016 (Pub. L. 114-256), it will develop a comprehensive policy
that covers quality standards for providers (both registered and unregistered) of
automobile adaptive equipment services to eligible persons; consistently apply (to both
registered and unregistered providers) those standards for safety and quality of both

equipment and installation throughout VA; and provide for third-party certification of both
registered and unregistered providers. Another commenter requested confirmation that
both evaluations and installation reviews will be addressed in subsequent VA
rulemaking. The current rulemaking focuses on issues related to payment and
reimbursement for the installation, repair, replacement, and reinstallation of new and
used adaptive equipment. Quality and safety standards for adaptive equipment are
outside the scope of this rulemaking. We make no changes based on these comments.
Lastly, two commenters recommended that VA engage with relevant
stakeholders on implementation of this rulemaking when it becomes final. We make no
changes based on these comments, but do note that VA has made a longstanding
commitment to internal and external stakeholders including eligible persons, veteran
services organizations, industry representatives, and others, to engage in meaningful
dialogue regarding VA’s adaptive equipment program and seek input and advice on
how best to serve our Nation’s veterans. We reiterate from the proposed rule that VA
conducted public hearings with NHTSA, industry representatives, manufacturers of
adaptive equipment, and other entities with expertise in the installation, repair,
replacement, and manufacturing of adaptive equipment or development of mobility
accreditation standards for adaptive equipment in compliance with section 3 of Public
Law 114-256. VA published a Federal Register Notice (FRN) requesting information
and comments to assist in the development of the program required by the Act on
February 2, 2017. See 82 FR 9114. VA received numerous comments from adaptive
equipment manufacturers, providers, trade associations, and other interested external
stakeholders. Additionally, VA met in person with several parties, including adaptive
equipment manufacturers, alterers and modifiers; and adaptive equipment related
associations who requested to meet with VA concerning their comments to the FRN.

VA makes nonsubstantive changes to the last sentence of § 17.158(b) as
proposed, which characterized “low technology” labor. These are editorial revisions that
do not change meaning and that are consistent with the proposed characterization of
“high technology,” where the last sentence of § 17.158(b) now reads “In Shop (low
technology) means labor performed on or modification of adaptive equipment devices
that do not meet the definition of High Technology.”
Based on the rationale set forth in the proposed rule and in this document, VA
adopts the proposed rule as final, with changes as noted above.

Executive Orders 12866 and 13563 and 14094
Executive Order 12866 (Regulatory Planning and Review) directs agencies to
assess the costs and benefits of available regulatory alternatives and, when regulation
is necessary, to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects, and other
advantages; distributive impacts; and equity). Executive Order 13563 (Improving
Regulation and Regulatory Review) emphasizes the importance of quantifying both
costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 14094 (Executive Order on Modernizing Regulatory Review)
supplements and reaffirms the principles, structures, and definitions governing
contemporary regulatory review established in Executive Order 12866 of September 30,
1993 (Regulatory Planning and Review), and Executive Order 13563 of January 18,
2011 (Improving Regulation and Regulatory Review). The Office of Information and
Regulatory Affairs has determined that this rulemaking is not a significant regulatory
action under Executive Order 12866, as amended by Executive Order 14094. The

Regulatory Impact Analysis associated with this rulemaking can be found as a
supporting document at www.regulations.gov.

Regulatory Flexibility Act
The Secretary hereby certifies that this final rule will not have a significant
economic impact on a substantial number of small entities as they are defined in the
Regulatory Flexibility Act, 5 U.S.C. 601-612.
In 38 CFR 17.157 as proposed we would define modifier to mean a motor vehicle
repair business that modifies a motor vehicle to enable a person with a disability to
operate, or ride as a passenger in, the motor vehicle, and would define alterer to mean
the same as in 49 CFR 567.3. Registered provider would also be defined to mean a
manufacturer, modifier, or alterer registered with the Department of Transportation’s
National Highway Traffic Safety Administration (NHTSA) Modifiers Identification
Database (“Database”) currently available at
https://vpic.nhtsa.dot.gov/mid/home/ModifierSearch/. Any manufacturer, modifier, or
alterer who is not registered would be considered an unregistered provider. The final
rule establishes a national schedule for the maximum allowable reimbursement
amounts for the listed adaptive equipment. The schedule also includes the maximum
hourly labor rates for installation, repair, reinstallation, and replacement of this
equipment and allowable fees that VA will pay for. It also establishes standards for
applying for reimbursement or payment for items listed in this schedule and delineate
limitations on VA’s payment for adaptive equipment and related services.
The database, accessed on February 15, 2024, lists a total of 1,252 modifiers.
Many modifiers reflected in the database have multiple listings, with some having more
than 15 separate listings.

In conducting this Regulatory Flexibility Act analysis, we looked to the estimated
number of modifier respondents as analyzed as part of information collection estimates
under the Paperwork Reduction Act for OMB Control Number 2900-0188 (as associated
with VA’s AAE program, and as has been submitted to OMB for review and approval),
who are requesting payment from VA for adaptive equipment. We estimate the number
of total respondents to this information collection to be 6,800 annually, of which 6,250
would be eligible persons (veterans or servicemembers) and 550 would be the modifiers
themselves. In analyzing the Regulatory Flexibility Act effect here, and based on our
proposed definition of modifier, we will refer to these 550 as registered providers. The
final rule also addresses unregistered providers. Unregistered providers are those that
are not listed in the NHTSA database, and VA believes it is not possible to determine an
accurate number for unregistered providers, some of which may be individuals rather
than small entities. NHTSA has advised that it does not know the number of modifiers,
alterers, or manufacturers of adaptive equipment that have not registered in the
database. For purposes of this analysis we will assume 100 unregistered providers
would provide services under this rule.
The North American Industry Classification System (NAICS) is the standard used
by Federal statistical agencies in classifying business establishments for the purpose of
collecting, analyzing, and publishing statistical data related to the U.S. business
economy. VA has identified three broad categories of NAICS codes that we believe
encompass the term manufacturer from the proposed rule. We define that term to
mean the same as that found at 49 U.S.C. 30102(a)(6), which includes a person
manufacturing or assembling motor vehicles or motor vehicle equipment; or importing
motor vehicles or motor vehicle equipment for resale. While the definition of
manufacturer found at 49 U.S.C. 30102(a)(6) is broad, including the manufacturing,
assembly, or import of motor vehicles, the final rule focuses narrowly on reimbursement

and payment for installation, replacement, or repair of adaptive equipment. Applying
the relevant part of the statutory definition of manufacturer, the final rule focuses on a
person manufacturing or assembling motor vehicle adaptive equipment, or the import of
motor vehicle adaptive equipment for resale. We note here that major automobile
manufacturers do not convert automobiles or vans for their disabled customers.
NAICS Code 336390 - Other Motor Vehicle Parts Manufacturing, comprises
establishments primarily engaged in manufacturing and/or rebuilding motor vehicle
parts and accessories (except motor vehicle gasoline engines and engine parts, motor
vehicle electrical and electronic equipment, motor vehicle steering and suspension
components, motor vehicle brake systems, motor vehicle transmissions and power train
parts, motor vehicle seating and interior trim, and motor vehicle stampings). NAICS
Code 339113, Surgical Appliance and Supplies Manufacturing, comprises
establishments primarily engaged in manufacturing surgical appliances and supplies.
Examples of products made by these establishments are orthopedic devices, prosthetic
appliances, surgical dressings, crutches, surgical sutures, personal industrial safety
devices (except protective eyewear), hospital beds, and operating room tables. NAICS
Code 423120 - Motor Vehicle Supplies and New Parts Merchant Wholesalers
comprises establishments primarily engaged in the merchant wholesale distribution of
motor vehicle supplies, accessories, tools, and equipment; and new motor vehicle parts
(except new tires and tubes).
These three NAICS codes cover a broad range of manufacturers of either
medical equipment or motor vehicle equipment, including manufacturers VA believes
are subject to this final rule. While the categories are overinclusive we believe that
analysis of the regulatory impact based on these codes will result in a reasonable
approximation of costs or impact of the final rule on small entities engaged in the
manufacture of adaptive equipment.

Applying the small business standards promulgated in 13 CFR 121.201, a small
entity for NAICS Code 336390 is 1,000 employees or less; NAICS Code 339113 is 750
employees or less; and NAICS Code 423120 is 200 employees or less. Data compiled
by the US Census Bureau from the 2017 Statistics of U.S. Businesses (SUSB) found at
https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html reflects the
following for the NAICS codes:
NAICS Enterprise
Code Employment
Size
336390
< 1000

Number of
Firms

Estimated Receipts
($1,000)

Estimated receipts
per firm ($1,000)

37,926,230

12,435

1000+

40,676,330

410,872

< 750

4,343

17,141,123

3,947

750+

5,086,564

137,475

< 200

52,776,110

3,637

200+

200,217,265

23,569

As noted, these NAICS codes are very broad, encompassing many aspects of
either medical/surgical or automotive supplies. VA does not know with any degree of
certainty the total number of these manufacturers who build, manufacture or import
adaptive equipment. We have estimated that the number of modifiers who would be
impacted by this final rule is 550. For purposes of this analysis we will assume that the
final rule would affect 250 manufacturers of adaptive equipment that would qualify as a
small entity. We believe this is most likely a high estimate.
We have identified one six-digit NAISC code that would apply to modifiers. We
propose to define alterer to mean the same as provided in 49 CFR 567.3, and modifier
to have a similar meaning as provided in 49 CFR 595.6(a). NAICS 5 Digit Industry
81112 Automotive Body, Paint, Interior, and Glass Repair comprises establishments

primarily engaged in providing one or more of the following: repairing or customizing
automotive vehicles, such as passenger cars, trucks, and vans, and all trailer bodies
and interiors; painting automotive vehicle and trailer bodies; replacing, repairing, and/or
tinting automotive vehicle glass; and customizing automobile, truck, and van interiors for
the physically disabled or other customers with special requirements. We believe
NAICS Code 811121 Automotive Body, Paint and Interior Repair and Maintenance most
closely reflects what VA, in this final rule, refers to as alterer or modifier. Applying the
small business standards promulgated in 13 CFR 121.201, a small entity for the NAICS
Code series 811121 reflects that an entity with $9,000,000 in annual receipts is
considered a small entity.
NAICS Code

Enterprise
Employment
Size
ALL

Number of
Firms
32,696

Estimated
Receipts
($1,000)
38,296,468

Estimated
receipts per
firm
($1,000)
1,171,289

Data compiled by the US Census Bureau from the 2017 Statistics of U.S. Businesses
(SUSB) found at https://www.census.gov/data/tables/2017/econ/susb/2017-susbannual.html reflects that most, if not all, of the 32,427 entities in NAICS Code 811121
would qualify as a small entity based on 13 CFR 121.201.
As noted with manufacturers who may be affected by this final rule, NAICS Code
811121 is very broad, applying to 32,427 business entities. However, only a small
percentage of those entities will be subject to the final rule as an alterer or modifier of
adaptive equipment. We believe that this NAICS code is the appropriate code for any
registered providers not already captured by the other three codes listed above as well
as unregistered providers that would qualify as a business entity. We believe that
number is accurate for purposes of determining whether this final rule will have a

significant economic impact on a substantial number of small entities as they are
defined in the Regulatory Flexibility Act.
Title 38 CFR 17.158 addresses limitations on payment. Paragraph (b) would
state that VA will reimburse or pay for adaptive equipment based on the information
submitted and the VA Adaptive Equipment Schedule for Automobiles and Other
Conveyances (Schedule). In addition to payment or reimbursement rates for specific
types of adaptive equipment listed in the Schedule, VA will pay or reimburse labor
costs, roadside service, and waste disposal fees consistent with the Schedule.
Payment or reimbursement rates are based on the Schedule in effect on the date
installation, reinstallation, replacement, or repair is complete. The Schedule
establishes, inter alia, a national monetary limit on payment or reimbursement for
adaptive equipment.
The Schedule is based on results of the National Mobility Equipment and Dealers
Association (NMEDA) 2021 Auto Mobility Price Survey. Out of the 334 NMEDA
members who were invited to participate; 171 dealer members met the 100%
completion rate. The survey results encompass 106 individual items grouped into eight
categories: vehicle conversions, driving aids, driving controls, mobility device
securements, mobility device carriers, adaptive seating, steering & braking
modifications, and miscellaneous services and equipment. Reported returns by region:
North 21%, South 23%, West 25%, Midwest 29%, and Canada 2%.
The example of the Schedule we publish in this final rulemaking reflects the high limit
for prices reported by the 171 respondents to the survey. The high reported price limit
for individual items reflected in the NMEDA survey is significantly higher than the low
reported price in some instances. To highlight one example, for lowered floor
conversions of mini vans, domestic powered side entry fold out conversions reported,
the high price is $41,050; U.S National average is $37,692 and low price is $26,900.

The survey results do not reflect variations in the type of specific categories of adaptive
equipment that are included in these reported prices. Generally, there is a close
correlation between average prices and high prices reported for the individual
categories of adaptive equipment. Typically, South and Midwest regions reported lower
prices than other regions. VA believes that the survey responses are a valid
representation of regional costs and that the number of respondents in each region
supports that conclusion.
The final rule states that VA will reimburse eligible persons identified in 38 CFR
17.156(a) who have purchased adaptive equipment (e.g., installations, repairs,
reinstallations, replacements) from registered providers. The eligible person must sign
and submit to VA a completed VA Form 10-1394, an itemized estimate, and provide VA
with either a final itemized invoice, paid receipt, or bill of sale for the purchase. VA may
reimburse eligible persons identified in 38 CFR 17.156(a) who have purchased adaptive
equipment (e.g., installations, repairs, reinstallations, replacements) from unregistered
providers. The eligible person must submit to VA a completed VA Form 10-1394 and a
final itemized invoice, paid receipt, or bill of sale for the purchase. In addition, VA will
pay registered providers for adaptive equipment (e.g., installations, repairs,
reinstallations, replacements) furnished to eligible persons identified in 38 CFR
17.156(a). The eligible person or the registered provider must submit to VA a
completed VA Form 10-1394 and an itemized estimate prior to the completion of work.
The eligible person or registered provider must provide VA with a final itemized invoice
after the work is completed. See 38 CFR 17.158(b)(2)(i) through (iii). Labor costs per
hour for registered providers are reimbursed or paid based on the lesser amount of
what is reflected in the Schedule, the estimate, or the final invoice. No payment for
labor costs would be approved for pre-installed (i.e., original equipment manufacturer)
equipment, or labor costs billed by an unregistered provider. See 38 CFR 17.158(b)(3).

For installation of new adaptive equipment, VA would pay or reimburse the lesser
of the amount for the new adaptive equipment listed in either a final itemized invoice,
paid receipt, or bill of sale for the purchase, or the amount established in the Schedule.
38 CFR 17.158(b)(4).
VA will use two representative categories of adaptive equipment costs from the
2021 NMEDA Auto Mobility Price Survey to estimate economic impact on small entities:
Domestic manual side entry in-floor conversion and exterior transfer seats.. VA
believes these categories are a reasonable representation of adaptive equipment costs.
VA will likewise analyze retail hourly labor rates(in-shop and high-tech).

Domestic Manual Side Entry In-Floor Conversion
Average cost

$36,123

High cost

$37,800

$1,677 above Average
cost

Low cost

$24,695

$13,105 below High cost,
$11,428 below Average

Exterior Transfer Seat
Average cost

$11,142

High cost

$11,545

$403 above Average

Low cost

$7,500

$4,045 below High,
$10,392 below Average

Retail Labor Rates/Hr – In shop labor
Average

$127

High

$145

$18 above Average

Low

$95

$50 below High, $32 below
Average

Retail Labor Rates/Hr – High-tech labor
Average

$139

High

$185

$46 above Average

Low

$85

$100 below High, $54
below Average

As noted above, VA believes that approximately 6,250 eligible persons will apply
for adaptive equipment payment or reimbursement annually. For purposes of this
analysis we are assuming a total of 550 registered providers and 100 unregistered
providers will provide services under this final rule. We do not have accurate
information readily available on regional distribution of either eligible persons, registered
providers, or unregistered providers. We will assume for purposes of this analysis that
adaptive equipment services for eligible persons will be equally distributed between
providers, as we believe an analysis based on actual distribution would not impact our
conclusions. Rounding up to the whole person, each provider would provide services to
10 eligible persons.
VA will reimburse or pay for adaptive equipment at the amount listed in either a
final itemized invoice, paid receipt, or bill of sale for the purchase; or the amount listed
in the Schedule, whichever is less. For domestic manual side entry in-floor
conversions, assuming a provider billed at the Schedule amount, the provider would
experience a net gain of $1,677 to $13,105 per transaction over invoicing at a different
amount. Exterior transfer seat equipment costs vary from $403 to $4,045 from the High

cost per transaction. Labor costs per hour vary from $95 to $145 per hour for in shop
labor, and $85 to $185 for high tech labor. We note that unregistered providers would
not be eligible for payment for labor costs and would experience a loss of potential
revenue as a result.
Given the relatively small number of eligible persons, cost variations for provision
of adaptive equipment, and the estimate of gross receipts for affected small entities in
the identified NAICS codes, VA believes that this final rule will not have a significant
economic impact on a substantial number of small entities as they are defined in the
Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, pursuant to 5 U.S.C. 605(b),
the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604
do not apply.

Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that
agencies prepare an assessment of anticipated costs and benefits before issuing any
rule that may result in the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more (adjusted annually for
inflation) in any one year. This final rule will have no such effect on State, local, and
tribal governments, or on the private sector.

Paperwork Reduction Act
Although this final rule contains provisions constituting a collection of information
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521),
there are no provisions associated with this rulemaking constituting any new collection

of information or any revisions to the existing collection of information. The collection of
information for 38 CFR 17.158 is currently approved by the Office of Management and
Budget (OMB) and has been assigned OMB control number 2900-0188.

Congressional Review Act
Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness
Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 et seq.), the Office
of Information and Regulatory Affairs designated this rule as not satisfying the criteria
under 5 U.S.C. 804(2).

List of Subjects in 38 CFR part 17
Administrative practice and procedure, Alcohol abuse, Alcoholism, Claims, Day
care, Dental health, Drug abuse, Foreign relations, Government contracts, Grant
programs-health, Grant programs-veterans, Health care, Health facilities, Health
professions, Health records, Homeless, Medical and dental schools, Medical devices,
Medical research, Mental health programs, Nursing homes, Philippines, Reporting and
recordkeeping requirements, Scholarships and fellowships, Travel and transportation
expenses, Veterans.

Signing Authority
Denis McDonough, Secretary of Veterans Affairs, approved this document on
June 7, 2024, and authorized the undersigned to sign and submit the document to the

Office of the Federal Register for publication electronically as an official document of the
Department of Veterans Affairs.
Consuela Benjamin,
Regulations Development Coordinator,
Office of Regulation Policy & Management,
Office of General Counsel,
Department of Veterans Affairs.

For the reasons stated in the preamble, the Department of Veterans Affairs
amends 38 CFR Part 17 as follows:

PART 17 – Medical
1. Amend the authority citation for part 17 by adding the following:
Sections 17.156 and 17.157 are also issued under 38 U.S.C. 3901 and 3902.
Section 17.158 is also issued under 38 U.S.C. 3902 and 3903.

2. Amend § 17.156 by:
a. Revising the introductory paragraph;
b. Revising paragraph (b); and
c. Removing the Authority citation at the end of the section.
The additions and revisions read as follows:

§17.156 Eligibility for automobile adaptive equipment.
Automobile adaptive equipment may be authorized if the Under Secretary for
Health or designee determines that such equipment is deemed necessary to insure that
the eligible person will be able to operate the automobile or other conveyance in a
manner consistent with such person's safety and so as to satisfy the applicable
standards of licensure established by the State of such person's residency or other
proper licensing authority subject to the definitions and limitations in §§ 17.157 and
17.158.

* * * * *
(b) VA will reimburse or pay for adaptive equipment for automobiles and other
conveyances subject to the requirements of 38 CFR 17.158(b).

3. Revise § 17.157 to read as follows:

§ 17.157 Definitions.
For the purposes of this part:
Adaptive equipment means equipment which must be part of or added to a
conveyance manufactured for sale to the general public to make it safe for use by the
eligible person and enable that person and the conveyance to meet the applicable
standards of licensure. Adaptive equipment includes any item specified by the Under
Secretary for Health or designee as ordinarily necessary for any of the classes of losses
or combination of such losses specified in 38 CFR 17.156, or as deemed necessary in
an individual case for an eligible person for the continued safety and functionality of a
modified automobile and adaptive equipment. Adaptive equipment includes, but is not
limited to, a basic automatic transmission, power steering, power brakes, power window
lifts, power seats, air-conditioning equipment when necessary for the health and safety
of the veteran, and special equipment necessary to assist the eligible person into or out
of the automobile or other conveyance, regardless of whether the automobile or other
conveyance is to be operated by the eligible person or is to be operated for such person
by another person; and any modification of the interior space of the automobile or other
conveyance if needed because of the physical condition of such person in order for
such person to enter or operate the vehicle.
Altered vehicle means the same as in 49 CFR 567.3.

Alterer means the same as in 49 CFR 567.3
Manufacturer means the same as in 49 U.S.C. 30102(a)(6).
Modifier means a motor vehicle repair business that modifies a motor vehicle to
enable a person with a disability to operate, or ride as a passenger in, the motor vehicle.
VA does not approve, endorse, or assess the abilities of any modifiers to perform any
requested or represented modification services.
Registered provider means a manufacturer, modifier, or alterer registered with
the Department of Transportation’s National Highway Traffic Safety Administration
(NHTSA) Modifiers Identification Database currently available at
https://www.nhtsa.gov/apps/modifier/index.htm. Any manufacturer, modifier, or alterer
who is not registered is considered an unregistered provider.
Roadside service means emergency roadside services provided to an eligible
person performed in connection with the repair, reinstallation, or replacement of
adaptive equipment already installed in the automobile or other conveyance. The term
is limited solely to services provided to make the adaptive equipment operational and
does not include mechanical repair of the engine or other vehicle systems, towing,
providing essential fuels and fluids such as gasoline necessary to operate the vehicle,
or providing locksmith services.
VA Adaptive Equipment Schedule for Automobiles and Other Conveyances
(“Schedule”) means the VA schedule that contains the maximum allowable
reimbursement amounts for the listed adaptive equipment. The Schedule also includes
the maximum hourly labor rates for installation, repair, reinstallation, and replacement of
this equipment and allowable fees that VA will pay.

4. Revise § 17.158 to read as follows:

§ 17.158 Limitations on assistance.
(a) General. An eligible person will not be provided adaptive equipment for more
than two automobiles or other conveyances at any one time or during any four-year
period except when, due to circumstances beyond the control of such person, one of
the automobiles or other conveyances for which adaptive equipment was provided
during the applicable four-year period is no longer available for the use of such person.
(1) Circumstances beyond the control of the eligible person are those where the
automobile or other conveyance was lost due to fire, theft, accident, or court action;
when repairs are so costly as to be prohibitive; or a different automobile or other
conveyance is required due to a change in the eligible person's physical condition.
(2) For purposes of paragraph (a)(1) of this section, an eligible person shall be
deemed to have access to and use of an automobile or other conveyance for which the
Department of Veterans Affairs has provided adaptive equipment if that eligible person
has sold, given or transferred the automobile or other conveyance to a spouse, family
member or other person residing in the same household as the eligible person; or to a
business owned by the eligible person, spouse, family member or other person residing
in the same household as the eligible person.
(b) Basis for payment or reimbursement. VA will reimburse or pay for adaptive
equipment that VA determines is needed in accordance with this section based on the
information submitted and the VA Adaptive Equipment Schedule for Automobiles and
Other Conveyances (Schedule). In addition to paying or reimbursing for specific types
of adaptive equipment listed in the Schedule, VA will pay, or reimburse for roadside
service, and waste disposal fees consistent with the Schedule. Determination of
payment or reimbursement rates are based on the Schedule in effect on the date
installation, reinstallation, replacement, or repair is complete. Schedule labor rates are

classified as “In Shop (low technology)” or “High Technology.” High Technology means
labor performed on or modification of adaptive equipment devices or systems that are
capable of controlling vehicle functions or driving controls, and operate with a designed
logic system, or interface or integrate with an electronic system of the vehicle. In Shop
(low technology) means labor performed on or modification of adaptive equipment
devices that do not meet the definition of High Technology.
(1) Payments made for adaptive equipment that is authorized under this section
shall constitute payment in full and shall extinguish the eligible person’s liability to the
registered provider. The registered provider may not impose any additional charge on
the eligible person for any adaptive equipment that is authorized under this section and
for which payment is made by VA.
(2) This paragraph sets forth what must be submitted to VA in order for VA to
reimburse or pay for adaptive equipment.
(i) Reimbursement when services performed by registered providers. VA will
reimburse eligible persons identified in 38 CFR 17.156(a) who have purchased adaptive
equipment (e.g., installations, repairs, reinstallations, replacements) from registered
providers. The eligible person must submit to VA a completed VA Form 10-1394, an
itemized estimate, and provide VA with either a final itemized: (1) invoice, (2) paid
receipt, or (3) bill of sale for the purchase.
(ii) Reimbursement when services performed by unregistered providers. VA will
reimburse eligible persons identified in 38 CFR 17.156(a) who have purchased adaptive
equipment (e.g., installations, repairs, reinstallations, replacements) from unregistered
providers. The eligible person must submit to VA a completed VA Form 10-1394 and a
final itemized (1) invoice, (2) paid receipt, or (3) bill of sale for the purchase.
(iii) Payments to registered providers for adaptive equipment. VA will pay
registered providers for adaptive equipment (e.g., installations, repairs, reinstallations,

replacements) furnished to eligible persons identified in 38 CFR 17.156(a). The
following must be submitted before VA will pay. The eligible person or the registered
provider must sign and submit to VA a completed VA Form 10-1394 and an itemized
estimate prior to the completion of work. The eligible person or registered provider must
provide VA with a final itemized invoice after the work is completed.
(iv) In the case of any installation, repair or replacement of adaptive equipment
performed outside of the United States where an invoice, estimate, or bill of sale is
calculated in a foreign currency, an application submitted under this paragraph must
include the conversion rate from the foreign currency to U.S. dollars, and calculation of
the invoice, estimate, or bill of sale amount in U.S. dollars.
(3) VA will reimburse or pay labor costs as follows:
(i) For any labor costs associated with the installation of adaptive equipment by
a registered provider, VA will reimburse or pay the lesser of:
(A) The relevant Schedule hourly labor rate, per paragraph (b) of this section,
multiplied by the number of hours listed by the registered provider;
(B) The labor costs included in the itemized estimate; or
(C) The hourly labor rate provided by the registered provider in the final itemized
invoice multiplied by the number of hours listed by the registered provider.
(ii) VA does not reimburse or pay labor costs for pre-installed (i.e., original
equipment manufacturer) equipment.
(iii) VA does not reimburse or pay labor costs of unregistered providers.
(4) New adaptive equipment. VA will reimburse an eligible person who meets the
requirements of (b)(2)(i) or (ii) of this section, or pay a registered provider who meets
the requirements of (b)(2)(iii) of this section for new adaptive equipment (including
equipment that has been installed or used for one year or less from the date of
manufacture listed in the Schedule) as follows:

(i) VA will pay the lesser of the amount for the new adaptive equipment listed in
either a final itemized: (1) invoice, (2) paid receipt, or (3) bill of sale for the purchase; or
(4) the amount listed in the Schedule.
(ii) VA will reimburse or pay any labor costs consistent with paragraph (b)(3) of
this section.
(5) Used adaptive equipment. For used adaptive equipment listed in the
Schedule that is more than one (1) year old from the date of manufacture:
(i) VA will depreciate it by twenty (20%) percent per year from the time the
equipment was pre-installed or installed as new on an automobile or other conveyance
to the time of its reinstallation for which reimbursement or payment is being sought for a
period up to five (5) years. VA will reimburse an eligible person, who meets the
requirements of (b)(2)(i) or (ii) of this section, or pay a registered provider who meets
the requirements of (b)(2)(iii) of this section the lesser of the amount of the adaptive
equipment listed in the final itemized invoice, paid receipt, or bill of sale for the purchase
or the amount listed in the Schedule reduced by twenty (20%) percent for each year
from the time the equipment was pre-installed or installed on the automobile or other
conveyance for a period up to five (5) years.
(ii) VA will reimburse or pay any labor costs consistent with paragraph (b)(3) of
this section, but will not reimburse or pay labor costs for used equipment that is more
than five (5) years old from the date of manufacture.
(6) Unlisted adaptive equipment. For adaptive equipment not listed in the
Schedule but meeting the definition of adaptive equipment in 38 CFR 17.157, VA will
reimburse an eligible person who meets the requirements of (b)(2)(i) or (ii) of this
section, or pay a registered provider who meets the requirements of (b)(2)(iii) of this
section:

(i) the lesser of the cost of the adaptive equipment when equal to or less than
what VA has paid for a similar item in the past or, when available, the commercially
available price for a similar item. If the price of a similar commercially available item is
not available, or VA has not previously paid for a similar item, VA will pay or reimburse
the billed charges.
(ii) VA will reimburse or pay any labor costs consistent with paragraph (b)(3) of
this section.
(7) VA will establish the Schedule on [Insert date 30 days after date of
publication in the FEDERAL REGISTER] based on the most recent available data and
each fiscal year thereafter, and publish that Schedule on a publicly accessible page on
the www.prosthetics.va.gov website.VA will increase the reimbursement amounts in the
Schedule using the indices for two expenditure categories of the Consumer Price Index
(CPI) for All Urban Consumers. The index for the expenditure category for “motor
vehicle parts and equipment” will be used to calculate the increase in the
reimbursement amounts for adaptive equipment on the Schedule, and the index for
“motor vehicle maintenance and repair” will be used to calculate the increase in the
reimbursement amounts for labor. Such increases to the Schedule for adaptive
equipment and labor will be equal to the percentage by which the respective index
increased during the 12-month period ending with the last month for which CPI data is
available. In the event that such index does not increase during such period, there will
be no change to the Schedule for the reimbursement amounts for which the index is
used to calculate increases. The amounts for the new fiscal year will be rounded up to
the whole dollar amount.
(c) Repair of used adaptive equipment. Reimbursement or payment for a repair
to an item of used adaptive equipment may be provided for adaptive equipment
installed on an automobile or other conveyance that meets the limitations of paragraph

(a) of this section. VA will pay or reimburse labor costs associated with the repairs in
accordance with paragraph (b)(3) of this section.
(1) For repairs to used adaptive equipment, VA will reimburse the eligible person
meeting the requirements of (b)(2)(i) or (ii) of this section as follows: the lesser of the
amount of the adaptive equipment listed in either a final itemized: (1) invoice, (2) paid
receipt, or (3) bill of sale for the purchase.
(2) For repairs to used adaptive equipment, VA will reimburse a registered
provider meeting the requirements of (b)(2)(iii) of this section as follows: the lesser of
the amount of the adaptive equipment listed in the final itemized (1) invoice, (2) paid
receipt, or (3) bill of sale for the purchase.
(The Office of Management and Budget has approved the information collection
requirements in this section under control number 2900-0188.)

[FR Doc. 2024-13116 Filed: 6/14/2024 8:45 am; Publication Date: 6/17/2024]