UNITED STATES COURT OF VETERANS APPEALS

No. 94-0021

Michael Shipwash, Appellant,

v\.

Jesse Brown,

Secretary of Veterans Affairs, Appellee.

On Appeal from the Board of Veterans\' Appeals

(Decided May 10, 1995)

N. Albert Bacharach, Jr., was on the brief for the appellant.

Mary Lou Keener, General Counsel; Norman G. Cooper, Assistant General
Counsel; Adrienne Koerber, Deputy Assistant General Counsel; and John C.
Winkfield were on the brief for the appellee.

Before MANKIN, HOLDAWAY, and STEINBERG, Judges.

STEINBERG, Judge: The appellant, veteran Michael S. Shipwash, appeals a
September 20, 1993, decision of the Board of Veterans\' Appeals (BVA or
Board) denying an increased rating for residuals of an injury to the
right little finger. Record (R.) at 5. Both parties filed briefs. For
the reasons that follow, the Court will affirm in part and vacate in
part the decision of the Board and remand a matter for readjudication
consistent with this opinion.

I. Background

The veteran served on active duty in the U.S. Army from November 1988 to
October 1991. R. at 15. His July 1988 entrance medical examination
report indicated \"normal\" for \"upper extremities\". R. at 19. A
January 1990 Service Medical Record (SMR) indicated that the veteran was
to have two weeks of sick leave following recent surgery on the right
hand. R. at 61. April 1990 SMRs indicate that the veteran, while
stationed in Germany, had fallen from a bicycle and sprained his right
wrist. R. at 66, 69. An x-ray of the wrist was negative for any obvious
fracture. R. at 65-66. In June 1990, he fell and fractured his left
wrist, and received outpatient treatment and therapy until October 1990.
R. at 71-73, 91, 97.

In November 1990, while still stationed in Germany, the veteran
fractured his right little finger when his hand was caught between a
truck and a loading ramp. 108-09. He had surgery to reduce the fracture
on November 24, 1990. R. at 108. A January 1991 SMR reported that he
could not \"bend or straighten his right little finger \[and\] continues
to have physical therapy without any relief\". R. at 117. A February 1,
1991, orthopedic consultation report indicated \"virtually no motion at
PIP joint\" (\"PIP joint\" is an abbreviation of \"proximal
interphalangeal joint\", which refers to the first finger joint past the
knuckle, Dorland\'s Illustrated Medical Dictionary 846, 1270, 1375 (27th
ed. 1988) \[hereinafter Dorland\'s\]), and noted that a \"pin appears to
be blocking joint flexion\". R. at 119. A surgical procedure was
performed on February 6, 1991, in an attempt to improve movement in the
veteran\'s finger, but the plate and pins in the finger could not be
removed because of incomplete healing of the fracture. R. at 121, 123.
The plate was removed from the finger in an operation in June 1991. R.
at 140. A September 1991 SMR indicated that he had flexion contracture
of the right little finger because of delayed healing of the fracture
and protrusion into the finger joint of a pin that had been holding the
plate in place. R. at 154-55.

In October 1991, the veteran filed with a Department of Veterans Affairs
(VA) regional office (RO) an application for compensation or pension
for, inter alia, \"laceration of right small finger\". R. at 158-61. A
December 1991 VARO decision awarded service connection for laceration
and fracture of the right little finger, rated 0% disabling, pursuant to
38 C.F.R. § 4.71a, Diagnostic Code (DC) 5227 (1994). R. at 163. The RO
decision also granted service connection for a back condition, rated 0%
disabling, and stated that it had considered 38 C.F.R. § 3.324 (1994),
but did not feel that a combined 10% rating was indicated. The veteran
filed a February 1992 Notice of Disagreement and June 1992 VA Form 1-9,
Appeal to the BVA. R. at 169, 184.

On August 24, 1992, the veteran testified under oath at a hearing that
his finger was fixed in a position of 90-degree flexion and that his
\"doctors told \[him\] it would never straighten again\". R. at 190. He
stated that he would be at a disadvantage in his future career because
shaking hands was awkward and he could no longer type 70 words per
minute; that he was affected in his ability to participate in sports;
that the finger was constantly sore and that when \"it comes in contact
with something the pain is intense\"; that the deformity was
embarrassing and \"bothers me psychologically\"; and that he could not
make a fist. R. at 191-92. He asserted that movement in the middle joint
of the finger was impossible, and stated: \"I don\'t even consider it a
finger because I can\'t use it.\" R. at 192. The hearing officer, in an
August 24, 1992, decision, affirmed the 0% rating because \"there is no
involvement of the metacarpophalangeal joint and motion is possible to
within two inches of the transverse fold of the palm\" and ankylosis was
thus \"favorable\". R. at 196. (The \"metacarpophalangeal joint\" is the
knuckle, Dorland\'s at 1014, 1270. \"Ankylosis\" is immobility and
consolidation of a joint due to disease, injury, or surgical procedure,
Dorland\'s at 91.)

On March 22, 1993, the Board remanded the veteran\'s claim to the RO for
a VA examination to determine the nature and extent of his
right-little-finger disability, including scars and the cause of any
pain. R. at 214-15. The veteran received an April 1993 examination which
diagnosed the scars as \"not significantly tender upon palpation.\" R.
at 221. An orthopedic examination that same month recorded that he had
\"fairly good strength in grasping objects and picking up heavy things,
but . . . markedly decreased dexterity secondary to the position of his
finger\"; that when he flexed his fingers down into his palm the tip of
the right little finger was approximately one inch away from the median
transverse volar of the palm; that the PIP joint was immobile and the
DIP joint had \"only 10 \[degrees of\] passive r\[ange\] o\[f\]
m\[otion\]\"; and that the veteran had reported to the physician that he
had lost one job because of his finger injury. R. at 222-23. (The
\"volar\" is the flexor surface of the forearm, wrist, or hand,
Dorland\'s at 1847. \"DIP joint\" is an abbreviation for \"distal
interphalangeal joint\", which is the finger joint farthest from the
knuckle, Dorland\'s at 499, 846, 1270.) The orthopedic diagnosis was
\"\[r\]ight 5th finger PIP joint contracture secondary to the patient\'s
open proximal phalanx fracture which was suffered in 1990.\" R. at 223.
A VA x-ray examination report stated: \"Flexed position of the fifth
finger, associated with some lateral deviation at the level of the
metacarpophalangeal joint.\" R. at 224 (emphasis added). Neither
examination report dealt with the cause of the veteran\'s asserted pain.

In June 1993, the RO denied an increased rating for residuals of a
right-little-finger fracture, stating that schedular requirements for a
compensable (greater than 0%) rating were not met and that the RO had
considered and rejected the application of an extraschedular rating
under 38 C.F.R. § 3.321(b)(1) (1994). R. at 227-29. The veteran
responded with a letter in which he stated that he could not throw a
football, use a typewriter efficiently, run his hand through his hair,
or put his hand in his pocket, and that \"I have even lost a job because
of this disability.\" R. at 238.

The Board, in the September 20, 1993, decision here on appeal, denied an
increased rating for residuals of an injury to the veteran\'s right
little finger. The Board stated that the ankylosis of that finger was
properly rated as 0% because it was \"favorable\" under DC 5227, and
that a 10% rating for superficial scars was not warranted under DCs 7803
and 7804. R. at 5, 7-8.

II\. Analysis

A. Generally Applicable Law

Section 5107(a) of title 38, U.S. Code, provides in pertinent part:
\"\[A\] person who submits a claim for benefits under a law administered
by the Secretary shall have the burden of submitting evidence sufficient
to justify a belief by a fair and impartial individual that the claim is
well grounded.\" The Court has defined a well-grounded claim as follows:
\"A well\[-\]grounded claim is a plausible claim, one which is
meritorious on its own or capable of substantiation. Such a claim need
not be conclusive but only possible to satisfy the initial burden of
\[section 5107(a)\].\" Murphy v. Derwinski, 1 Vet.App. 78, 81 (1990). In
addition, the Court held in Tirpak v. Derwinski, 2 Vet.App. 609, 611
(1992) (quoting section 5107(a)), that to be well grounded a claim must
be accompanied by supportive evidence and that such evidence \"must
\'justify a belief by a fair and impartial individual\' that the claim
is plausible.\" Where the determinative issue involves either medical
etiology or a medical diagnosis, competent medical evidence is required
to fulfill the well-grounded-claim requirement of section 5107(a); where
the determinative issue does not require medical expertise (such as the
recounting of symptoms), lay testimony may suffice by itself. See Lathan
v. Brown, 7 Vet.App. 359, 365 (1995) (citing Grottveit v. Brown, 5
Vet.App. 91, 93 (1993)); see also Magana v. Brown, 7 Vet.App. 224, 227
(1994); Espiritu v. Derwinski, 2 Vet.App. 492, 494-95 (1992).

The truthfulness of evidence is presumed in determining whether a claim
is well grounded. See Robinette v. Brown, 8 Vet.App. 69, 75-76 (1995);
King v. Brown, 5 Vet.App. 19, 21 (1993). The threshold of plausibility
to make a claim well grounded is considerably lower than the threshold
for new and material evidence to justify reopening a claim. See Lathan,
supra (citing Robinette, supra). A Board determination whether a claim
is well grounded is a conclusion of law subject to de novo review by the
Court under 38 U.S.C. § 7261(a)(1). See Grivois v. Brown, 6 Vet.App.
136, 139 (1994); Grottveit, supra.

Pursuant to 38 U.S.C. § 5107(a), once a claimant has submitted a
well-grounded claim, the Secretary is required to assist that claimant
in developing the facts pertinent to the claim. See 38 C.F.R. § 3.159
(1994); Littke v. Derwinski, 1 Vet.App. 90, 91-92 (1990). Where the
record does not adequately reveal the current state of a veteran\'s
disability and the claim is well grounded, the fulfillment of the
statutory duty to assist requires a thorough and contemporaneous medical
examination. See Suttmann v. Brown, 5 Vet.App. 127, 138 (1993); Green
(Victor) v. Derwinski, 1 Vet.App. 121, 124 (1991). \"If a diagnosis is
not supported by the findings on the examination report or if the report
does not contain sufficient detail, it is incumbent upon the rating
board to return the report as inadequate for evaluation purposes.\" 38
C.F.R. § 4.2 (1994); see also Schafrath v. Derwinski, 1 Vet.App. 589,
595 (1991).

The BVA is required to provide a written statement of the reasons or
bases for its findings and conclusions on all material issues of fact
and law presented on the record; the statement must be adequate to
enable a claimant to understand the precise basis for the Board\'s
decision, as well as to facilitate review in this Court. See 38 U.S.C. §
7104(d)(1); Masors v. Derwinski, 2 Vet.App. 181, 188 (1992); Gilbert v.
Derwinski, 1 Vet.App. 49, 56-57 (1990). To comply with this requirement,
the Board\'s statement of reasons or bases must account for the evidence
which it finds to be persuasive or unpersuasive, analyze the credibility
and probative value of all material evidence submitted by or on behalf
of a claimant, and provide the reasons for its rejection of any such
evidence. See Gabrielson v. Brown, 7 Vet.App. 36, 40 (1994); Abernathy
v. Principi, 3 Vet.App. 461, 465 (1992); Simon v. Derwinski, 2 Vet.App.
621, 622 (1992); Hatlestad v. Derwinski, 1 Vet.App. 164, 169 (1991);
Gilbert, supra. Moreover, the Board may not rely on its own
unsubstantiated medical conclusions to reject expert medical evidence in
the record; rather, the Board may reject a claimant\'s medical evidence
only on the basis of other independent medical evidence. See Thurber v.
Brown, 5 Vet.App. 119, 122 (1993); Hatlestad v. Derwinski, 3 Vet.App.
213, 217 (1992); Colvin v. Derwinski, 1 Vet.App. 171, 175 (1991).

Disability ratings are to be based, as far as practicable, \"upon the
average impairments of earning capacity resulting from such injuries in
civil occupations.\" 38 U.S.C. § 1155; 38 C.F.R. § 4.1 (1994). The
determination of the level of disability due to service-connected
ankylosis of an individual finger other than the thumb, index, or middle
finger is made under 38 C.F.R. § 4.71a, DC 5227 (under the heading
\"Ankylosis of Individual fingers\"), which states that ankylosis of the
ring or little finger will be rated at 0%. A \"Note\" following DCs 5224
through 5227 states: \"Extremely unfavorable ankylosis will be rated as
amputation under \[DCs\] 5152 through 5156.\" The diagnostic code for
\"Little finger, amputation of\" (DC 5156) provides for a 20% rating
when more than one-half of the metacarpal bone has been resected, and
for a 10% rating without metacarpal resection.

The following material \[which material is hereinafter referred to as
the \"Ankylosis Preambles\"\] appears in the Schedule for Rating
Disabilities before DCs 5216 through 5219 (\"Multiple Fingers:
Unfavorable Ankylosis\") as well as before DCs 5220 through 5223
(\"Multiple Fingers: Favorable Ankylosis\"):

In classifying the severity of ankylosis and limitation of motion of
single digits and combinations of digits the following rules will be
observed:

\(1\) Ankylosis of both the metacarpophalangeal and proximal
interphalangeal joints, with either joint in extension or in extreme
flexion, will be rated as amputation.

\(2\) Ankylosis of both the metacarpophalangeal and proximal
interphalangeal joints, even though each is individually in favorable
position, will be rated as unfavorable ankylosis.

\(3\) With only one joint of a digit ankylosed or limited in its motion,
the determination will be made on the basis of whether motion is
possible to within 2 inches (5.1 cms.) of the median transverse fold of
the palm; when so possible, the rating will be for favorable ankylosis,
otherwise unfavorable.

38 C.F.R. § 4.71a (emphasis added). The determination of the level of
disability due to scarring is made under 38 C.F.R. § 4.118, DCs 7800
through 7805 (1994). DC 7803 provides for a 10% rating for scars that
are \"superficial, poorly nourished, with repeated ulceration\". DC 7804
provides for a 10% rating for scars that are \"superficial, tender and
painful on objective demonstration\". See Catalig v. Derwinski, 3
Vet.App. 116, 117-18 (1992) (BVA correctly denied a 10% rating pursuant
to DC 7804 where medical evidence demonstrated that scar was healed and
was not tender).

Section 3.321(b)(1) of title 38, Code of Federal Regulations, provides
the following as to the exceptional case where schedular ratings are
inadequate:

To accord justice . . . to the exceptional case where the schedular
evaluations are found to be inadequate, the Chief Benefits Director or
the Director, Compensation and Pension Service, upon field station
submission, is authorized to approve on the basis of the criteria set
forth in this paragraph an extra-schedular evaluation commensurate with
the average earning capacity impairment due exclusively to the
service-connected disability or disabilities. The governing norm in
these exceptional cases is: A finding that the case presents such an
exceptional or unusual disability picture with such related factors as
marked interference with employment or frequent periods of
hospitalization as to render impractical the application of the regular
schedular standards.

38 C.F.R. § 3.321(b)(1) (1994). In Fisher (Raymond) v. Principi, 4
Vet.App. 57, 60 (1993), the Court held that where circumstances are
presented that the Director of VA\'s Compensation and Pension Service
might consider exceptional or unusual, the RO must specifically
adjudicate the issue of whether referral to the Director is indicated;
if the case is not referred in such a situation, the BVA must address
the nonreferral on appeal and give an appropriate statement of reasons
or bases for its decision on the nonreferral question.

Where an appellant has not been harmed by an error in a Board
determination, the error is not prejudicial. See 38 U.S.C. § 7261(b)
(\"In making the determinations under subsection (a) of this section,
the Court shall take due account of the rule of prejudicial error\");
Yabut v. Brown, 6 Vet.App. 79, 83 (1993); Godwin v. Derwinski, 1
Vet.App. 419, 427 (1991).

B. Application of Law to Facts

1\. Well-grounded claim: The posture of the case is that the veteran has
been awarded service connection for a disability with a 0% rating and
has appealed that original rating. The Court has previously held that a
claim for an increased rating for a disability is generally well
grounded when an appellant indicates that the severity of the disability
has increased. See Proscelle v. Derwinski, 2 Vet.App. 629, 631-32
(1992). Although the veteran in the instant case does seek an increased
rating, this case differs from Proscelle because the appellant is
appealing the original assignment of a disability rating, not pursuing
an increased rating after a rating has been initially established by a
final VA decision. The initial assignment of a rating following the
award of service connection is part of the original claim. See West v.
Brown, 7 Vet.App. 329, 332 (1995) (en banc) (\"successful claimant has
not had his case fully adjudicated until there is a decision as to all
essential elements, i.e., status, disability, service connection,
rating, and when in question, effective date\"). In light of the above,
the Court holds that when a claimant is awarded service connection for a
disability and subsequently appeals the RO\'s initial assignment of a
rating for that disability the claim continues to be well grounded as
long as the rating schedule provides for a higher rating and the claim
remains open.

2\. Ankylosis: Pursuant to the Note following DC 5227 regarding
individual fingers, disability of the little finger will be rated at 0%
unless ankylosis of the finger is \"extremely unfavorable\", in which
case it will be rated as amputation under DC 5156. The veteran argues
that his right-little-finger disability should be rated under DC 5156 as
amputation of the finger. A 10% rating is provided under DC 5156 for
amputation where, as here, the metacarpal bone has not been resected.

As the Court has previously observed: \"Neither the format of the code
pertaining to finger injuries nor its interpretive notes are a model of
clarity.\" Hill v. Principi, 3 Vet.App. 540, 541 (1992). The discussion
that follows should illustrate that the rating schedule relating to
finger disabilities could benefit greatly from Secretarial review,
synthesis, and revision.

\"Extremely unfavorable ankylosis\" of a finger is not defined in the
rating schedule for the purposes of DCs 5224 through 5227, relating to
individual fingers. (A definition of \"extremely unfavorable ankylosis\"
does appear in note (a), following DC 5219, but that definition appears
to be limited to DCs 5216 through 5219, which come under the heading
\"Multiple Fingers: Unfavorable Ankylosis\" and all of which (not
including the Ankylosis Preambles) are written in terms of more than one
finger, see, e.g., references to \"the fingers\", \"flexion of tips\",
and \"amputations\" of \"fingers\", in (a), (b), and (c), respectively.)
When a term (in this case, \"extremely\" in \"extremely unfavorable
ankylosis\" in the Note following DCs 5224 through 5227) is not defined
in a statute or regulation, it should be given its ordinary meaning. See
Ardestani v. INS, 502 U.S. 129, 136 (1991) (\"the legislative purpose is
expressed by the ordinary meaning of the words used\") (quoting American
Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982)); Perrin v. United
States, 444 U.S. 37, 42 (1979) (\"fundamental canon of statutory
construction is that, unless otherwise defined, words will be
interpreted as taking their ordinary, contemporary, common meaning\").
\"Congress need not enact a dictionary each time it passes a law. That
the language at issue here \[\"extremely\"\] is not expressly defined in
the \[statute\] does not render ambiguous the plain words used.\" Jones
(McArthur) and Karnas v. Brown, 41 F.3d 634, 639 (Fed. Cir. 1994); see
also Davis v. Brown, 7 Vet.App. 298, 301 (1994) (using dictionary
definition of \"mail\"). \"Extremely\" is the adverbial form of the
adjective \"extreme\", which means \"in or to the greatest degree\".
Webster\'s New World Dictionary 482 (3d ed. 1988). \"Extremely\"
unfavorable ankylosis is thus ankylosis of a greater degree of severity
than mere unfavorable ankylosis.

The Ankylosis Preambles (see part II.A. supra) establish \"rules \[to\]
be observed\" in \"classifying the severity of ankylosis\" of fingers.
Although, as noted in part II.A., the identical Ankylosis Preambles
precede DCs 5216 through 5219 and DCs 5220 through 5223, both relating
to multiple fingers, they do not appear with DCs 5224 through 5227,
relating to ankylosis of individual fingers. However, the Ankylosis
Preambles state that their definitional rules will be used to classify
the severity of ankylosis of \"single digits and combinations of
digits\", and thus the Ankylosis Preambles, by their express terms, do
apply to DCs 5224 through 5227 as well. See Hill, supra.

Although not defining \"extremely unfavorable ankylosis\", the Ankylosis
Preambles do define \"favorable ankylosis\", \"unfavorable ankylosis\",
and ankylosis \"rated as amputation\". \"Unfavorable ankylosis\" is
defined in the Ankylosis Preambles above the definition for
\"favorable\" ankylosis and below the definition for ankylosis \"rated
as amputation\".

As stated earlier in this subpart, the Note following DCs 5224 through
5227 provides that \"extremely unfavorable ankylosis\" is to be \"rated
as amputation\" under DCs 5152 through 5156 (\"Single Finger
Amputations\"). The term \"rated as amputation\" is given different
meanings in different parts of the rating schedule (see, e.g., note (a)
following DC 5219, discussed above). However, it is clear that the term
\"extremely unfavorable ankylosis\" in the Note following DCs 5224
through 5227 is ankylosis which is severe enough to be \"rated as
amputation\" pursuant to the Ankylosis Preambles, because those
Preambles explicitly apply to DC 5227 and because \"rated as
amputation\" is the only classification in those Preambles of greater
severity than \"unfavorable ankylosis\".

The September 1993 BVA decision stated that the veteran\'s little-finger
ankylosis \"does not involve the metacarpophalangeal joint\". R. at 7.
If, in fact, the ankylosis of the veteran\'s little finger does not
involve the metacarpophalangeal joint, then the ankylosis of his finger
cannot be \"extremely unfavorable\". However, there is no medical
evidence of record expressly stating that the metacarpophalangeal joint
of the right little finger is not involved. Furthermore, the March 1993
VA x-ray examination report accompanying the VA orthopedic examination
stated that the flexion of the little finger was \"associated with some
lateral deviation at the level of the metacarpophalangeal joint\". R. at
224. In its statement of reasons or bases for the September 20, 1993,
decision, the Board did not address this aspect of the March 1993 x-ray
report; nor did the Board point to any medical evidence stating that the
metacarpophalangeal joint was not involved. Thus, the Board\'s statement
that the metacarpophalangeal joint was \"not involve\[d\]\" was a
medical conclusion by the Board, not one supported in the medical
evidence of record. See Colvin, supra.

The Board further concluded that the veteran\'s little-finger ankylosis
should be rated as \"favorable\" because \"motion is possible \[in that
finger\] to within approximately 1 inch of the median transverse fold of
the palm\". R. at 7. The Ankylosis Preambles provide that when only
\"one joint of a digit is ankylosed\", the determination will be made on
the basis of whether \"motion is possible to within 2 inches\" of the
median transverse fold of the palm; when so possible, the rating will be
for favorable ankylosis. As noted in the preceding paragraph, the
medical evidence of record does not appear to support the Board\'s
conclusion that the metacarpophalangeal joint was \"not involve\[d\]\";
however, even if the Board had been correct in concluding on the basis
of the available evidence that the metacarpophalangeal joint was not
involved, the veteran\'s little-finger ankylosis still could not be
rated as \"favorable\" because \"motion\" was not possible to within 2
inches of his palm. The medical evidence indicates that the veteran\'s
finger is fixed in a bent position and that the PIP joint is completely
immobile. R. at 223. Therefore, although the fingertip might be less
than 2 inches away from the veteran\'s palm, the medical evidence does
not indicate that \"motion\" of the PIP joint to within 2 inches of the
palm is possible.

Item (1) in the Ankylosis Preambles provides that ankylosis \"of single
digits and combinations of digits\" will be rated as amputation when
there is \"\[a\]nkylosis of both the metacarpophalangeal and \[PIP\]
joints, with either joint in extension or in extreme flexion\". 38
C.F.R. § 4.71a, DCs 5216-23 (note) (1994) (emphasis added). \"Extremely
unfavorable ankylosis\" (which we have held means the same thing as
ankylosis \"rated as amputation\" pursuant to the Ankylosis Preambles)
thus requires, in addition to ankylosis of both the metacarpophalangeal
and PIP joints, that one of the ankylosed joints be either \"in
extension or in extreme flexion\". The term \"extreme flexion\" is not
defined for the fingers, although \"flexion\" for the knee is defined as
extremely unfavorable when it is at an angle of 45 degrees or more (DC
5256), and ankylosis of the ankle receives a maximum rating when plantar
flexion is greater than 40 degrees (DC 5270). If it were obvious that
neither the metacarpophalangeal joint nor the PIP joint of the
veteran\'s right little finger was in \"extreme flexion\", then the
inadequacy of the record regarding possible involvement of the
metacarpophalangeal joint might not be prejudicial error pursuant to 38
U.S.C. § 7261(b). However, given the criteria regarding flexion in other
diagnostic codes, it is not obvious that the 90-degree fixed flexion of
the PIP joint of the veteran\'s right little finger is not \"extreme
flexion\". Therefore, the inadequate assessment in the VA examinations
regarding the involvement of the metacarpophalangeal joint, and the
Board\'s permitting that assessment to stand, cannot be considered
nonprejudicial error. See Yabut and Godwin, both supra.

In summary and in view of the above discussion, the Court holds that the
record was inadequately developed, in light of VA\'s duty to assist
under 38 U.S.C. § 5107(a), because of the lack of medical evidence on
the issue of ankylosis of the metacarpophalangeal joint of the
veteran\'s right little finger, and that the Board\'s statement of
reasons or bases in the September 20, 1993, decision was inadequate
because it did not address the March 1993 x-ray report that indicated
\"some\" involvement of the metacarpophalangeal joint. R. at 224. On
remand, VA should obtain a VA medical examination expressing an expert
opinion on whether the metacarpophalangeal joint of the right little
finger is ankylosed to any degree. See 38 C.F.R. § 20.901 (1994);
Suttmann and Green, both supra. If ankylosis of the metacarpophalangeal
joint is present, then VA must determine whether either the
metacarpophalangeal or the PIP joint is \"in extension or in extreme
flexion\". In its decision on remand, the Board must include an adequate
statement of reasons or bases, including discussion of all material
evidence and all material issues of fact and law presented on the
record; that statement must be adequate to enable a claimant to
understand the precise basis for the Board\'s decision, as well as to
facilitate review in this Court if the BVA decision is appealed here.
See 38 U.S.C. § 7104(d)(1); Gabrielson, Masors, and Gilbert, all supra.

3\. Scars: The September 20, 1993, BVA decision denied a 10% rating
pursuant to DCs 7803 and 7804 for scars. As noted above in part II.A.,
DC 7803 in 38 C.F.R. § 4.118 provides for a 10% rating for scars that
are \"superficial, poorly nourished, with repeated ulceration\", and DC
7804 provides for a 10% rating for scars that are \"superficial,
tender\[,\] and painful on objective demonstration\". There is no
indication in the record that the right-little-finger scars ever
ulcerated. The veteran, in his 1992 hearing, testified under oath that
the finger was painful when it came in contact with something; however,
DC 7804 requires objective demonstration of a tender and painful scar,
and the April 1993 VA medical examination report diagnosed the
right-little-finger scars as \"not significantly tender upon
palpation.\" R. at 221. Therefore, the Court holds that there was a
plausible basis in the record for the Board\'s determination that the
criteria for a 10% rating under DC 7803 or 7804 were not met and that
the noncompensable rating thus cannot be held to be clearly erroneous.
See Catalig and Gilbert, both supra.

4\. Extraschedular consideration: The veteran, in his August 1992 sworn
testimony, averred that he had lost one job because of his injured
finger and that the injury would harm his career prospects. R. at
191-92. The RO, in its June 1993 decision, stated that it had considered
referral for extraschedular consideration pursuant to 38 C.F.R. §
3.321(b)(1), but that the case was \"not considered so unusual or
exceptional as to warrant its application.\" R. at 229. The Board, in
the decision here on appeal, did not state whether it had reviewed the
RO determination that referral for extraschedular evaluation was not
appropriate. According to Fisher, supra, the BVA must address referral
under § 3.321(b)(1) only where circumstances are presented which the
Director of VA\'s Compensation and Pension Service might consider
exceptional or unusual. In this case, there was no evidence of \"an
exceptional or unusual disability picture with such related factors as
marked interference with employment or frequent periods of
hospitalization as to render impractical the application of the regular
schedular standards\", and thus the Board was not required to discuss
the possible application of § 3.321(b)(1).

III\. Conclusion

The Court affirms the September 20, 1993, BVA decision in part insofar
as issues 3 and 4 above, but vacates the decision in part and remands
the matter of an increased (compensable) right-little-finger rating for
expeditious further development and readjudication, on the basis of all
applicable law and regulation, and issuance of a readjudicated decision
supported by an adequate statement of reasons or bases \-- all
consistent with this opinion and in accordance with section 302 of the
Veterans\' Benefits Improvements Act, Pub. L. No. 103-446, § 302, 108
Stat. 4645, 4658 (1994) (requiring Secretary to ensure \"expeditious
treatment\" for claims \"remanded\" by BVA or the Court); the February
16, 1995, Memorandum from J. Gary Hickman, Director, Compensation and
Pension Service to Director, VA Regional Offices, Bond v. Brown, U.S.
Vet. App. No. 93-146 (notifying RO Directors of \"Priority Handling of
Remanded Appeals by the Court of Veterans Appeals or the \[Board\]\" and
requiring that \"\[a\]djudication management \[ \] ensure that all
Court/BVA remanded cases are properly and timely handled upon
receipt\"); and VA Adjudication Procedure Manual, M21-1, Part IV, paras.
38.02, 38.03 (providing for BVA and ROs to follow flagging procedure to
afford \"\[s\]pecial handling . . . for all cases remanded by the
Court\"). See 38 U.S.C. §§ 1310, 5107(a), 7104(d)(1), 7261; 38 C.F.R. §
4.71a; Fletcher v. Derwinski, 1 Vet.App. 394, 397 (1991). \"On remand,
the \[claimant\] will be free to submit additional evidence and
argument\" on the remanded claim. Quarles v. Derwinski, 3 Vet.App. 129,
141 (1992). A final decision by the Board following the remand herein
ordered will constitute a new decision which, if adverse, may be
appealed to this Court only upon the filing of a new Notice of Appeal
with the Court not later than 120 days after the date on which notice of
the new Board final decision is mailed to the appellant.

AFFIRMED IN PART; VACATED AND REMANDED IN PART.