TOPEKA -- The Kansas House passed a bill backed by unaccredited for-profit claims consultants that would place restrictions on how much they can charge veterans for disability claims assistance -- a service already provided for free by accredited organizations.
Some states have banned for-profit services because federal law says only accredited services -- which are always free, like Veterans Service Organizations and the American Legion -- can help file claims.
While these for-profit service providers may violate federal law, there are no criminal penalties attached, which creates a legal loophole.
Other states have passed less-intense regulations that allow the for-profit service providers to continue with some guardrails. The Kansas bill falls into this category and was requested for introduction by for-profit service group Veteran Benefit Guide.
Four Democrats, including two veterans, proposed amendments to the bill: to only allow accredited service providers to file claims; to ensure veterans only pay for a for-profit service if it directly helped secure their benefits; or to cap the amount that veterans can be charged.
Rep. Rick James, a Republican veteran from La Cygne, opposed all of the Democrats' amendments during debate Tuesday. None of them passed.
"We've kind of alluded that veterans are slow or stupid or something," James said. "That's exactly what we've done!"
"Hey! Representative, please don't impugn motives," said Rep. Kyle Hoffman, a Republican from Coldwater who presided over the debate.
"Yes, chair. Veterans are smart. They know what they're getting into," James said.
James said he has used both the for-profit services and free accredited options to file his claims and appreciates having the choice.
House Bill 2214 would limit compensation for these groups to a one-time payment of five times the monthly increase in benefits they help a veteran obtain.
"It's for veterans, and they should have a choice," James said.
Opponents -- most of them veterans -- who testified Feb. 3 before the House Veterans and Military Committee told legislators some of these for-profit services are "claim sharks" that have charged veterans tens of thousands of dollars to file claims that should be free.
"HB 2214 would allow claim sharks to present inside Kansas, take advantage of our veterans," said David Kennedy, a veterans service officer. "Our job is to protect veterans from such people and look out for their welfare."
Opponents pointed to federal law and asked legislators to ban for-profit services rather than rein them in.
Typically, committees hear from proponents of a bill first, then opponents. James, who chairs the committee, had the opponents go first. Jim Karleskint was a Republican House representative for three years and now lobbies for the Veterans of Foreign Wars. Karleskint thought James' decision was strange and showed bias.
"I've been in 100 committee meetings. This is the first time I've ever seen opponents go before proponents," Karleskint said in an interview.
James wouldn't comment for this story. When asked if he'd listen to questions then decide, he responded: "I don't really care."
Most proponents represented for-profit services. Three of them have received a warning letter from the U.S. Department of Veterans Affairs that their service may be breaking federal law, but all three remain active -- including Veteran Benefits Guide, the group that requested the bill's introduction.
Veterans Guardian has received two warning letters. William Taylor from Veterans Guardian was the first proponent to testify. The business has faced a flurry of lawsuits -- with one whistleblower accusing the firm of manipulating claims, which it denied. The case is still active.
Veterans Guardian has spent more than $2 million on lobbying at the federal level.
At the end of Taylor's testimony, James showed a receipt from when he used Veterans Guardian in 2022, before he was a state representative. James said it took less than 90 days to get every document prepared, and he was glad to have the choice. He used a different service, REE Medical -- who has also received a warning letter -- another year, and said he was impressed by both private services.
"Both experiences were great, so when I hear these talks that there's a bunch of people out there just taking advantage of poor innocent people that are veterans, I just simply don't believe that," James said. "That's my opinion, and that's what I'll stick by."
Taylor said for-profit services are often staffed and founded by veterans who have navigated the claims process themselves. Taylor and other proponents said the system is overburdened and takes too long.
Taylor retired after a 23-year military career and founded Veterans Guardian. He told the committee despite his senior rank and access to support, filing his claims was still a burden.
"I now know that my experience, while difficult, was still far better than what many veterans face," Taylor said. "That realization is what led to the founding of Veterans Guardian. If navigating this system was challenging for me, it was clear that countless other veterans -- particularly those without time, advocacy, or access -- were being left behind."
Taylor said many of the bill's elements -- such as no initial or refundable fees, and prohibiting direct solicitation and misleading advertising -- are common sense for his service. He said the bill would allow veterans not to be preyed on by claim sharks while preserving their ability to choose.
The committee passed the bill Feb. 12 along party lines.
"This is one bill I lost sleep over," said Rep. Dan Goddard, a Republican from Parsons. "I still believe that the first step for a veteran is to go to the VSO office, and I think I would recommend that VSOs have a very thorough briefing on the options that are available. The only reason that I will vote for this bill is because it offers a choice, but it has to be an informed choice that is made by the veteran."
Part of the bill requires veterans who use a for-profit service to sign a waiver acknowledging they are choosing to pay for help that is available elsewhere for free.
Louisiana passed a similar bill to the one working its way through the Kansas Legislature. Three days after the House Veterans and Military Committee heard testimony about the Kansas version, a federal court struck down Louisiana's law. The judge said it violates the supremacy clause that federal law trumps state law, and that the waiver was unconstitutional under the First Amendment.
Rep. Mari-Lynn Poskin, a Democrat from Leawood, questioned James -- the most vocal proponent of the bill -- on the House floor.
"Do you know if anybody has consulted with the Kansas attorney general about what we might face in terms of lawsuits?" Poskin asked.
"We have not," James responded.
"OK, and you're not an attorney. So I'm worried a bit still about the whole legalese part of all of this," Poskin said.
"And I think we're just fine with that; the way it reads and the way we all understand it is based on that law in Louisiana; we are fine," James responded.
Poskin asked how the legislation wouldn't violate the First Amendment when using language like the bill struck down in Louisiana.
"It doesn't violate anything. And I don't -- "
"Well," Poskin interjected. "We don't know until there's a lawsuit."
James left and declined to answer more questions from Poskin.
Each Democrat who proposed an amendment brought up the same point: For-profit services wouldn't be needed if the Statehouse gave more funding to accredited groups that guide veterans through claims.
Rep. Sydney Carlin, a Democrat from Manhattan, proposed the amendment to only allow accredited services to help file claims. Rep. Pam Curtis, a Democrat from Kansas City, questioned Carlin about her proposal.
Curtis: "Is this service provided in another way that does not cost veterans?"
Carlin: "Yes."
Curtis: "And would that service perhaps be advanced if we provided additional funding?"
Carlin: "Amen, sister."
The House passed the bill by an 81-43 vote Wednesday, with a handful of Republicans joining Democrats in voting no.