(Tribune News Service) — When Dylan Anderson left the Marine Corps in 2017, he knew little about the health benefits then available to him. He didn’t think he needed them anyway.

Then his back seized up. He’d slammed into a wooden beam during a training exercise and fallen about 10 feet, something that didn’t seem a big deal at the time. But a few years later, while working his IT job from his Denver home, the pain sprouted.

At times, it was so bad that he could only work while flat on his back in bed — if he could work at all. Insomnia set in, too.

That’s when a buddy told him about Veteran Benefits Guide. It’s a for-profit company that’s part of a burgeoning — and, critics charge, pseudo-legal — industry that helps veterans file disability claims with the federal Department of Veterans Affairs, often in exchange for thousands of dollars.

Nearly a year after he first reached out to the company, Anderson now owes VBG roughly $2,000, he said, after it filed what he described as a “shotgun” blast of claims to the VA and then stopped returning his phone calls. He’s now sharply critical of the company and the broader industry, adding his voice to a national debate over how to regulate a lucrative service that some veterans groups insist shouldn’t be allowed to exist at all.

That debate unfolded earlier this year in the Colorado legislature, where opposing bills backed by industry groups and their critics in the veteran community both died. A third proposal, which will still allow the companies to operate here but caps the fees they can charge, advanced and passed, with the initially begrudging support of the Veterans of Foreign Wars.

Now its backers are hoping to bring the model to Congress, where a similar debate has taken shape. At the federal level, the companies have proposed a higher ceiling on what they can charge.

“It’s difficult for me to look at this private market and not just see a bunch of vultures that are trying to steal money from, essentially, the government. They’re essentially trying to steal veterans’ benefits from veterans,” Anderson said.

The industry says it fills a critical role for veterans, arguing that while free assistance is available from counties and groups like the VFW, many veterans have too few free options. The system is complicated, and for veterans willing to pay, the companies say, they help maximize the monthly checks that veterans can receive for injuries approved by the VA.

“VBG guides veterans through the process of compiling their disability benefits claim,” Patrick Holmes, Veteran Benefits Guide’s director of communications and marketing, wrote in an email. “Our case managers are highly trained and understand what’s required to get an accurate disability rating. We never charge anything up front; clients only pay if they receive a favorable decision.”

Federal law omission allows industry

Anderson’s first check from the VA — which included months of backpay — was for roughly $10,000. His bill from VBG was nearly $3,000, which he refused to pay, he said, because the company didn’t help him prepare for his VA appointments. He also accused the company of charging him for “scraping” his medical record for any ailment that could secure a payment. Asked about Anderson’s case, Holmes said in an email that the company had a 90% success rate after helping more than 45,000 veterans and that it had received “thousands of five-star reviews.”

The company eventually agreed to drop $1,000 from his bill, Anderson said.

“If there was a chance I could control where a meteor would land,” Anderson said earlier this month, “I would know exactly where I would put it.”

As Anderson contemplated meteors, the national debate about regulating the benefits companies came to Colorado.

The industry is legal only by federal omission: It’s illegal to charge veterans to file claims for them with the VA, but Congress removed the criminal penalty from that law in 2006, allowing the industry to blossom.

The companies typically charge based on a multiplier of the new benefits a veteran receives. Veterans are given a disability rating by the VA that determines their monthly benefits, and some companies take five times that amount as their fee. Anderson was rated to receive more than $750 a month, for instance, bringing VBG’s initial fee to around $3,000, he said.

Lawmakers in other states — and in Washington — have debated proposals backed by the industry, which seek to cap their fees at $12,500 for helping boost veterans’ benefits, and from veterans groups, which want the industry to stop the practice altogether. Some of the companies have faced lawsuits and investigations, and at least three states have passed laws banning or restricting the industry. Louisiana passed a law backed by the companies that institutes a $12,500 cap.

A microcosm of that debate played out in Colorado this year. Lawmakers debated the industry’s preferred bill and a bill to ban the companies outright. Both bills died in committee, but they compromised through Senate Bill 282.

The bill, backed by a bipartisan group of lawmakers who are military veterans, still allows the companies to operate. But it caps their fees at 25% of a veteran’s new benefits — or $9,200, whichever is less.

The bill passed the legislature in early May and was signed into law June 3.

“There’s a fight about this nationally, and I’m really proud of (Senate Bill) 282 because we are the first state that has been able to find a middle ground on this issue,” Sen. Matt Ball, a Denver Democrat who sponsored the bill, said at the bill’s signing ceremony.

Goal: to keep industry from being ‘predatory’

In interviews, Ball and Armagost both said SB-282 was an acknowledgement that the industry was needed, even if groups like the VFW — and veterans like Anderson — are sharply critical of it. Every county has a veterans service officer who helps veterans for free, and groups like the VFW also have accredited staff. But industry officials told lawmakers that there were more than 2,400 Colorado veterans for each free service officer.

“There’s a free market. If somebody can run a business successfully that’s actually looking to take care of veterans, veterans should have the opportunity to have those benefits,” said Armagost, of Berthoud. As for the companies, the new law “helps keep them in those guardrails so that in the future or otherwise … it doesn’t turn into something where maybe it is predatory.”

Lawmakers’ acknowledgement of the industry’s importance didn’t stop the companies from opposing the bill during its legislative journey. Industry representatives argued that the fee cap would put them out of business.

But Ball now hopes SB-282 will serve as a model nationally. He’s set to travel to Washington this month to meet with veterans groups opposed to the industry. A bill in the U.S. House — and backed by the benefits companies — has nudged forward. It’s similar to one of the Colorado bills that died last session; it would have allowed companies to charge up to $12,500.

Ball said it wasn’t easy getting the VFW to support legislation that kept the industry in place. Steve Kjonaas, the legislative director for the group’s Colorado chapter, has no love for the companies, which he calls “claims sharks.”

They don’t help veterans get access to benefits any faster, he said. The VA processes claims at the same speed regardless of who files them, and free options don’t cost veterans thousands of dollars in the meantime.

At the same time, industry-backed regulations that allow for higher fees have gained ground elsewhere. The VFW’s preferred option — of reinstituting the penalties that make the practice illegal — has faltered at a federal level. So Kjonaas took Ball’s idea of the SB-282-shaped compromise back to national leaders in D.C.

“We still don’t like it,” he said. “We absolutely do want the penalties back in. … But we realize that’s going to be just about the most impossible thing to activate.”

Kjonaas said the language in SB-282 was being drafted into federal legislation that would hopefully be introduced in the U.S. Senate and serve as a counterweight to the proposal backed by the benefits companies.

For its part, the industry is not thrilled with the compromise that is Colorado law.

Holmes, from Veteran Benefits Guide, said the bill would “make it impossible for honorable companies like VBG to continue serving veterans in Colorado.”

Veterans “are telling you they want access to private companies to assist in their disability claims, and they’re OK paying the fee model that exists,” Mark Christensen, from another firm called Veterans Guardian, told lawmakers during his committee testimony.

Anderson, the Colorado veteran, disagreed. He said he wanted the industry gone and that he’d had success working with free benefits assistance since his experience with Veteran Benefits Guide. He plans to file an appeal to get additional assistance for breathing troubles that he suspects were caused by exposure to burn pits in the Philippines.

Still, he said, SB-282 was a start.

“I want a full ban,” Anderson said. “But also, if you just make it so difficult for them to really run a business and make a profit off of (veterans), then that’s fine, too.”

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