When Navy veteran Melissa Washington wanted to reapply for an increase in her disability benefits, she selected a for-profit firm — Veteran Benefits Guide — to cut down on the paperwork and preparation she’d have to do herself.

“I knew a lot of people who had already been through the process, and I wanted to try for myself,” said Washington, who runs the Women Veterans Alliance in Sacramento, Calif. “It was all laid out clearly: the fees, the procedures. They helped me get up to a 100% rating, and it was all very professional.”

The 51-year-old, who has been out of the service for almost 30 years, said the process cost her a few hundred dollars and just a few months of waiting. She said she will recommend the process to friends and clients interested in getting help with their claims

Veterans advocates say it’s illegal.

“These for-profit companies have never even tried to play by the rules,” said Ryan Gallucci, executive director of the Veterans of Foreign Wars national headquarters. “These are predatory consulting agreements that can be perpetual and nonsensical. Companies are spending millions on advertising their services to veterans even as we see lawsuits piling up against them.

“I don’t know how any of them can legitimately say their service is a real value to veterans.”

The legality surrounding firms that provide assistance in preparing veterans’ disability paperwork has been an issue in the veteran community for years. But the problems are coming into new focus now with last year’s passage of the Promise to Address Comprehensive Toxics Act (better known as the PACT Act), which massively expanded eligibility for disability payouts for former military members exposed to burn pit smoke and other toxins during their time in service.

The legislation led to record levels of claims filed and benefits awarded. VA leaders said they received more than 2.4 million applications in fiscal year 2023, up 39% from the previous year. The department paid out $163 billion in benefits, also an all-time high.

With so much money at stake, lawmakers have long been wary of outside consultants taking in money meant to compensate veterans for military injuries. But industry executives have portrayed their work as a necessary option for the increasingly complicated benefits system, one where tens of thousands of veterans are left waiting for months for needed financial assistance.

On Nov. 1, a coalition of those for-profit companies launched a new effort — the National Association for Veterans Rights — to promote “ethical and transparent business practices among companies engaging with the service-disabled veteran community.”

The goal is to improve the reputation of the industry and establish best practices for how those companies operate, with an eye toward gaining the blessing of federal regulators for their work.

At the same time, critics are hoping to stamp out the firms completely, adopting legislation that will all but eliminate their ability to operate. On Tuesday, officials from VFW, Disabled American Veterans, the Tragedy Assistance Program for Survivors and more are planning a press conference attacking “claim sharks that offer high-priced assistance and suspect medical advice ... without following the well-established professional and ethical standards of VA accreditation.”

VA leaders discourage the use of for-profit firms in disability filings but so far have not directly entered the debate. Veterans are left wondering how best to access thousands of dollars a month in financial aid for successfully navigating VA’s disability claims system.

It’s money that can mean the difference between financial distress and peace of mind, but only if they receive it.

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Legal limbo

In press conferences and outreach events, VA leaders frequently remind veterans that they do not need to pay anyone to file a disability claim. Veterans service organizations like the Veterans of Foreign Wars and the American Legion employ thousands of staffers who provide claims preparation work for free, as do a network of state and county veterans offices.

But Peter O’Rourke, head of the newly formed NAVR, said those options aren’t enough to keep up with the growing demand for claims work. The number of backlogged first-time disability claims (cases waiting more than four months for processing) has doubled in the last year, and now sits at more than 300,000.

“Yes, there are free services,” said O’Rourke, who served as VA chief of staff and acting VA Secretary under former President Donald Trump. “But we’re still seeing high levels of inventory. So we need to have other approaches to this problem.

“If veterans are happy with the free services available, that’s great for them. But this is a complex process. Veterans should have the opportunity to choose the service that fits best what they want to get accomplished.”

By law, companies that are not accredited by the VA cannot file a benefits claim on a veteran’s behalf or charge them for work related to filing such an application. Accredited firms can charge veterans for assistance in limited situations, and those fees are capped.

For-profit claims companies instead charge consulting fees for work generally related to preparing to file the disability paperwork, and leave individual veterans to actually submit the final applications on their own.

O’Rourke compared it to a spouse or friend helping a veteran submit a claim, except in this case they are professional experts at navigating the VA systems.

Except, unlike a family member, the companies charge for those services. Gallucci said that’s a blatant violation of the law.

Before 2006, federal prosecutors cracked down on the practice heavily. But that year, lawmakers removed penalties for indirectly charging fees from veterans for VA claims assistance, without actually legalizing the practice.

The result has been almost two decades of legal limbo, with advocates crying foul and for-profit firms operating at the margins of the claims process without directly engaging in it.

In testimony before the House Veterans’ Affairs Committee in April 2022, VA Deputy General Counsel Richard Hipolit said the department sends out hundreds of letters annually to companies in violation of the rules.

“More often than not, we receive no response to our letter or a response indicating that they do not intend to cease their practices, because there are no criminal penalties under federal law,” he said.

Bipartisan legislation introduced in Congress earlier this year would change that. The Governing Unaccredited Representatives Defrauding VA Benefits Act (dubbed the GUARD Act) would reinstate criminal penalties for companies that charge fees for unsanctioned claims work. The proposal is backed by VFW, the American Legion, Disabled American Veterans, Paralyzed Veterans of America and a host of other veterans groups.

“For too long, heinous actors have taken advantage of and preyed upon veterans in need of assistance, without consequences, and this practice must end,” Rep. Brian Fitzpatrick, R-Pa. and one of the bill’s sponsors, said in a statement when the bill was introduced in February. “Individuals who attempt to cheat our veterans out of these benefits must be held accountable.”

For-profit firms have called the measure a threat to their existence and veterans’ choice. The proposal has been stalled in Congress for months.

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Cleaning up their act?

Because of the indirect nature of their work, the scope of the for-profit industry in the benefits workload remains unclear.

Officials from Veteran Benefits Guide, based in Las Vegas, say they have handled more than 35,000 cases since the company’s founding in 2015, resulting in “a combined increase of $5.5 billion in lifetime benefits” for clients. Veterans Guardian, based in North Carolina, said it has handled about 25,000 in the last year alone.

Trajector Medical in 2021 reported $58 million in revenue from its veterans services division, up 35% from the previous year.

Army veteran Preston Stewart contacted Trajector earlier this year to restart a failed claim from back in 2021. The 38-year-old had worked with a veterans service organization on that filing, but it ended up “a mess.”

Stewart had conversations with the company over a few weeks but opted to cancel his contract after growing dissatisfied with their services. He contacted VFW instead, and had his claim approved a few months later, with no money owed to anyone for the work.

Or so he thought. A few weeks after getting his disability rating from VA officials, Trajector representatives began emailing, texting and calling him almost daily, claiming that their contract was never closed and insisting he owes them thousands of dollars.

“All of this work was done entirely by VFW. They never saw any communications I had with Trajector,” he said. “But now Trajector still thinks they’re somehow entitled to my disability checks.”

Officials from Trajector did not respond to requests for comment for this story. O’Rourke said problems like those experienced by Stewart show the need to clean up the industry, not shut it all down.

NAVR has outlined certification standards for members that they hope will help establish best practices for the industry. They include up-front disclosures to veterans that free services are also available for claims filing, employee background checks, transparent contact rules, fees based on successful increases in claims payouts, and “internal employment policies consistent with a high ethical standard of operations.”

Members of the association are pledging not only to hold themselves to those expectations, but also to hold their competitors accountable as well.

“If you’re in this industry and you’re paying attention, you’ve likely noticed that we are taking on more negative publicity than ever before,” said Michael Licari, chief legal officer of Veteran Benefits Guide. “The bad actors are negatively impacting all of the companies that are doing really good work to help veterans. Because of that, we’re not just going to sit on our hands and do nothing.

“It’s important that we create a system that ensures accountability and transparency throughout the industry. The good actors need to be allowed to serve veterans, but bad actors need to be held accountable.”

O’Rourke said the goal is to gain some level of acceptance and recognition from VA in coming years, even if convincing veterans groups of their sincerity remains a difficult goal.

Veterans must navigate a lenghty bureaucratic process to see if they qualify for disability benefits related to their injuries from their military service. (Leo Shane III/Staff)

Waiting on VA’s endorsement

Chanin Nuntavong, executive director of the American Legion, said those steps may be a good start, but aren’t enough to fix the industry’s reputation.

He is more open than his advocate peers to the idea of for-profit companies eventually being accepted as part of the benefits claims community, but only after they meet the same strict accreditation standards that service organizations and other claims officials must meet.

“We know veterans are upset because they’re waiting for compensation and benefits, and it’s taking too long,” he said. “There’s just not enough time for our people to do it.

“So if an individual wants to go to a private organization for help, they should be able to do so. But I do believe these organizations should be accredited through VA — and punishable by law — if they don’t meet the right standards.”

So far, VA hasn’t opened up to the idea of bringing them in at all.

One of VA Secretary Denis McDonough’s mantras in speeches before veterans groups throughout the summer was “you don’t need to pay anyone to file a disability claim,” a statement that was met with applause from organization leadership time and time again.

The department in September launched a new online page — www.va.gov/vsafe — dedicated to warning veterans about how to protect themselves from “claims sharks or unaccredited service representatives … taking thousands of dollars from veterans for services that should be free or lower costs.”

McDonough told Military Times that he is aware of the industry’s efforts to enact reforms, but doesn’t see direct engagement as something the department needs to prioritize now.

“We have highly trained service officers associated with every county in the country, we have great veterans service organizations who are there to work for veterans not motivated by a profit motive or anything else,” he said.

“We’ve set a goal to have more vets getting care and getting benefits from us. One of the ways we do that is by making sure all claims are handled in a high-quality way and expeditiously.”

Shortly after the introduction of the GUARD Act last spring, a separate bipartisan group of House lawmakers introduced the PLUS Act for Veterans, legislation that would require VA to incorporate some for-profit benefits firms into the VA accreditation system.

“We must ensure that every veteran has the right to seek whatever private help they deem necessary when navigating their VA assistance,” Rep. Jack Bergman, R-Mich., said in a statement following the May introduction. “Whether they seek assistance in applying through their local VSO, a private business, or any other means, every veteran should get the VA benefits they deserve without fear of being ripped off.”

Industry executives have voiced support for the PLUS Act. Veterans groups have largely dismissed it. Like the GUARD Act, it has stalled in Congress in recent months.

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The fight ahead

Earlier this month, Congress unanimously passed the Wounded Warrior Access Act, a bill that requires clearer communication with veterans regarding their pending claims files. It also requires the VA to provide warnings to veterans about using unaccredited companies for claims help, and to create an easier process for reporting scammers.

President Joe Biden signed the measure into law on Nov. 13. It may be the only significant action on the issue adopted this year, given the large volume of appropriations work still ahead for lawmakers.

Both NAVR and veteran organizations have events planned later this month to lay out their cases to the public. For-profit companies have been using advertisements and opinion pieces to promote their work in a host of military websites and publications, including Military Times.

In a statement released Nov. 8, VFW National Commander Duane Sarmiento called the new trade association an attempt “to normalize and legitimize their financial exploitation” of veterans.

“The bottom line is this: Predatory claim shark companies are engaging in illegal activities,” he said. “There is no gray area here, no matter how much money they want to throw at it. Their latest collusion is a desperate attempt to avoid accountability.”

Association officials said their fight is one of “working relentlessly to preserve veterans’ rights.” They expect their membership to grow significantly in the coming months.

Neither Washington nor Stewart said they’re completely sure what other veterans should take from their claims experiences.

Washington said that while her claim was handled professionally, she also feels that better standards need to be put in place to make sure scammers can’t take advantage of confused veterans. Stewart said he may have ended up with the same positive result in his claim if he had stuck with a for-profit company, and probably would not have been overly upset at having to pay a reasonable fee for that work.

“I have friends that went through paying for claims help who found good companies and had good experiences,” Stewart said. “And if someone hadn’t shown me that I could get the same thing for free, I probably would have thought the only way to do it was to hand over some money.”

Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.

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