Veterans’ advocates and VFW clash over fee caps as committee advances SB 608

The Committee on Public Safety advanced Senate Bill 608, a measure regulating persons receiving compensation for providing advice or assistance on veterans’ benefits. The hearing featured sharply contrasting testimony on whether a statutory fee cap and related language are consistent with federal law.

Jamie Shaddell, testifying for the Veterans of Foreign Wars Department of Hawaii, said the VFW respectfully requested amending the bill to an HD 1 to remove language it said conflicts with federal law and cited a Louisiana federal court’s decision finding similar fee-cap language preempted. Shaddell urged questions about accreditation and liability, asking "are you accredited? Who's responsible if you file a fraudulent claim?" and said parts of the SD1 appeared to be preempted by federal law.

Ryan Scalmanini, director of quality and VA compliance for Veteran Benefits Guide, testified in support as amended, describing a widely used $12.05 fee cap and saying fee caps are moving through other states and federal processes. Several veterans who testified in support said they had used third-party companies to help navigate claims and that those services helped them obtain needed benefits more quickly.

During extensive questioning, members asked whether there was data showing increased fraud when third parties assist claims. Witnesses cited GAO and OIG work finding misleading behavior by some agents but said they found no sweeping evidence of increased fraud; the VFW maintained the Louisiana court ruling showed aspects of the fee cap had been preempted and predicted litigation if the bill passed as written.

In the decision session the chair moved to pass SB 608 SD 2 with amendments (including adding protections recommended by Aloha Independent Living Hawaii). The committee adopted the chair’s recommendation and deferred the effective date to allow technical fixes and further referrals.