*Note: Pursuant to 38 U.S.C. § 4067(d)(2) (1988),*

*this decision will become the decision of the*

*Court thirty days from the date hereof.*

**UNITED STATES COURT OF VETERANS APPEALS**

No. 90-162

[Ernest D. Lehman, Appellant,]{.smallcaps}

[v.]{.smallcaps}

[Edward J. Derwinski,]{.smallcaps}

[Secretary of Veterans Affairs, Appellee.]{.smallcaps}

On Appeal from the Board of Veterans\' Appeals

(Argued December 12, 1990 Decided July 1, 1991)

*Rick Surratt* (non-attorney practitioner), with whom *Edward R. Heath,
Sr.,* was on the brief, for appellant.

*John D. Lindsay, Jr.,* with whom *Raoul L. Carroll*, General Counsel,
*Barry M. Tapp,* Assistant General Counsel, and *Pamela L. Wood,* Deputy
Assistant General Counsel, were on the brief, for appellee.

Before FARLEY, IVERS and STEINBERG, *Associate Judges*.

IVERS, *Associate Judge*: Appellant, Ernest D. Lehman, appeals from a
Board of Veterans\' Appeals (BVA) decision which affirmed a 1988 rating
decision which reduces his rating for post-traumatic stress disorder
(PTSD) from 50 percent to 30 percent. *Ernest D. Lehman,* loc. no.
933225 (BVA Nov. 7, 1989). For reasons stated herein, we reverse the
BVA\'s decision and direct that the 50-percent rating be reinstated
retroactive to November 1, 1988.

***Background***

Appellant served in Vietnam from January 1969 to March 1970. He was
first assigned as an ammunition truck driver. His convoy was frequently
exposed to snipers and mines and was often required to travel through
villages at high rates of speed. In May 1969, appellant was assigned to
the 25th Infantry Division at Cu Chi where his duties primarily involved
night ambushes.

In July 1969, appellant, along with other members of his unit, was
wounded by a command-detonated mine consisting of a booby-trapped
105-mm. Howitzer round. Appellant received severe lacerations to his
right shoulder and jaw and was hospitalized for five weeks. He was the
only member of his unit who was able to return to duty. R. at 136. Upon
his return, appellant was assigned as a company supply clerk. He now
alleges that a \"nervous and anxious\" feeling began to develop at that
time. *Id.* He was then transferred to an artillery unit and was
assigned as a bunker sergeant. His duties there required a \"top
secret\" security clearance. R. at 137.

Appellant returned from Vietnam in March 1970 but his discharge was
delayed for a month due to treatment for hyper-alertness. R. at 137.
Between 1970 and 1974, he floated from job to job and began to show a
pattern of quitting jobs due to an inability to get along with people.
However, appellant eventually received training for machine shop work
and was then able to obtain a position as an assembly line operator.
*Id.*

Appellant was married in 1977 and divorced approximately three and one
half years later. Following the divorce, he began to experience extreme
feelings of loneliness, PTSD-related flashbacks, nightmares, periods of
rage and extreme anger and more significant problems with anxiety. He
also began to drink heavily. R. at 138.

Appellant was voluntarily admitted to a psychiatric unit at a private
hospital on October 29, 1983, because he felt confused and had
difficulty functioning. R. at 41. Medical records indicate that he was
previously hospitalized for alcoholism in July 1983. During his October
1983 hospitalization, he was diagnosed as having dysthymia (morbid
anxiety and depression marked by obsession), atypical anxiety disorder,
history of alcohol dependence, occupational problems, chronic PTSD and
interpersonal problems. R. at 45. He underwent psychotherapy and
psychopharmacotherapy while hospitalized. He was discharged on December
13, 1983 and given a prescription for Xanax, a psychotropic prescription
drug used to treat schizophrenia. R. at 45. Lehman was readmitted to the
same hospital in February 1984 (R. at 46-51), September 1984 (R. at
52-57), May 1985 (R. at 58-61, 66, 69-70), July 1985 (R. at 62-65,
67-68), August 1985 (R. at 71-75), May 1986 (R. at 76-87) and July 1986
(R. at 88-102), complaining each time that he felt \"out of control\"
and unable to function. Each time, his symptoms were attributed to PTSD.

In October 1984, appellant made a claim for service connection for his
psychiatric condition. (This claim was an amendment to an original claim
for disability compensation, which is not the subject of this appeal,
filed on November 2, 1983.) On appeal to the BVA, he submitted thorough
documentation of his hospitalization and treatment for his psychiatric
condition. The BVA requested that the Veterans\' Administration (now
Department of Veterans Affairs)(VA) Director of Mental Health and
Behavioral Sciences Service (Director) provide a reconciliation of
diagnoses. The Director found that appellant was subjected to
\"significant and life threatening stressors\" while in Vietnam, R. at
106, that the diagnosis of PTSD was supported by the evidence of record
and that appellant\'s psychiatric disorder had its onset during service.
R. at 105. The Director concluded that appellant suffered from delayed,
chronic PTSD, atypical anxiety disorder and that his alcohol abuse had
improved. R. at 105. The BVA concurred with the Director\'s findings and
granted the appellant\'s claim for service connection for PTSD, relating
back to November 2, 1983, with a disability rating of 50 percent. R. at
121.

Appellant was re-examined by a VA psychiatrist in May 1988. That
physician found that appellant was suffering from a very mild form of
PTSD and classified him as having an Axis II personality disorder. Based
on this examination, appellant\'s rating for PTSD was reduced to 30
percent, effective on November 1, 1988. He appealed the reduction to the
BVA. In support of his claim, appellant submitted additional medical
records from recent hospitalizations and a letter from his treating
psychologist, William E. Calvert, Ph.D., which assessed his condition as
\"particularly severe\". R. at 132-39. The rating board, by decision
dated February 1, 1989, confirmed the 30-percent rating.

Appellant appealed to the BVA and submitted a letter detailing his
problems with the 1987 VA exam and his day-to-day difficulty in dealing
with life. Additionally, appellant\'s treating psychologist submitted a
current evaluation of his psychiatric condition and included information
regarding appellant\'s substantial lost time and wages resulting from
his PTSD. R. at 158-60.

The BVA denied appellant\'s claim. It found that his PTSD produced no
more than \"a definite industrial impairment, as contemplated by the
present thirty percent rating.\" *Ernest D. Lehman,* loc. no. 933225, at
7 (BVA Nov. 27, 1989). Appellant filed a timely Notice of Appeal. This
Court has jurisdiction to hear the appeal pursuant to 38 U.S.C. § 4052
(1988).

***Analysis***

Appellant argues that the BVA failed to follow several regulatory
provisions when it decided his claim. Because of the complex nature of
PTSD cases, and because this Court has yet to address, in an in-depth
manner, the process for evaluating claims for service connection for
PTSD, the application of several of the regulatory provisions cited by
appellant merits its own discussion.

Initially, appellant argues that the BVA failed to evaluate his case
under 38 C.F.R. § 3.344 (1990) (stabilization of disability
evaluations). Paragraph (a) of that section provides, in pertinent part,
that:

> \[r\]atings on account of diseases subject to temporary or episodic
> improvement, e.g., manic depressive or other psychotic reaction . . .
> will not be reduced on any one examination, except in those instances
> where all the evidence of record clearly warrants the conclusion that
> sustained improvement has been demonstrated.

Thus, appellant contends that under this regulation, his rating cannot
be reduced after one examination because the evidence submitted does not
show a sustained improvement in his condition. In response, the VA
argues that § 3.344 is inapplicable here because that regulation is
applicable only to ratings which have been in effect for at least five
years. Br. at 2. *See* 38 C.F.R. § 3.344(c). Paragraph (c) of § 3.344
states that \"\[t\]he provisions of paragraphs (a) and (b) of this
section apply to ratings which have continued for long periods at the
same level (5 years or more). They do not apply to disabilities which
have not become stabilized and are likely to improve.\" The use of
parentheses suggests that the five year time frame is merely a
guideline, not a mandate; the regulation is devoid of any language which
could be construed as intended to establish an inflexible mandatory
minimum time period. That is an even more appropriate interpretation in
this case where appellant\'s rating has been in existence, even if the
Secretary\'s argument is accepted, for four years and either 363 or 364
days. Surely the drafters of § 3.344 did not intend that the time period
suggested\--\"(5 years or more)\"\-- be strictly applied. In fact, in
appellant\'s case, the gap can be closed by counting days rather than
years and taking into account leap years in 1984 and 1988.

Even if the regulation was so narrowly construed as to require that the
rating be in effect for five years or more, it appears that the
disability for which appellant receives compensation was in existence
for five years. During oral argument, it was brought to the Court\'s
attention that, although the veteran was hospitalized for PTSD on
October 29, 1983, his 100-percent rating for hospitalization was only
retroactive to November 2, 1983. R. at 122. Since the VA has granted the
veteran service connection for PTSD retroactive to his first period of
hospitalization, the effective date should have been October 29, 1983,
the date on which the veteran was first hospitalized. *See* 38 C.F.R. §
4.29 (1990) (Ratings for service-connected disabilities requiring
hospital treatment or observation.) Therefore, we find that appellant\'s
rating had \"continued for \[a\] long period\[\] \[of time\] at the same
level\" when the reduced rating became effective on November 1, 1988. 38
C.F.R. § 3.344(c). It should also be noted that the 1988 VA medical
report (R. at 123), the August 1988 rating decision (R. at 127) and the
Statement of the Case (R. at 142) erroneously state that the
appellant\'s PTSD rating had only been in effect since July 1, 1986.

The VA\'s argument that § 3.344 does not apply because appellant\'s
condition had never been diagnosed as \"unlikely to improve\"
contradicts the evidence of record. Br. at 21. The record is replete
with discharge summaries which indicate that appellant\'s condition upon
discharge was barely functional and that he would need continued
treatment on an outpatient basis to maintain a minimal level of
capacity. More importantly, neither the 1988 evaluation nor the BVA
decision discuss or contain evidence of an improvement in appellant\'s
condition as required by § 3.344. If the 1988 examination raised some
question regarding a change in prognosis or the possibility of
improvement, a more appropriate course of action would be to continue
the rating pending re-examination at a later date. *See* 38 C.F.R. §
3.344(b).

Appellant further alleges that the VA failed to follow proper procedures
for rating disabilities as set forth in 38 C.F.R. §§ 4.1, 4.2 (1990).
Section 4.1 states that \"it is thus essential, both in the examination
and in the evaluation of disability, that each disability be reviewed in
relation to its history.\" A review of the 1988 VA medical examination
reveals a brief recitation of appellant\'s psychiatric history. However,
there is nothing in that report which would indicate that his
psychiatric history, current treatment and therapy, and medical
diagnoses were factors in the evaluation process. In fact, the report
does not even mention the 1986 evaluation by the VA Director of Mental
Health and Behavioral Sciences Service. Despite these omissions, the BVA
found that the report was satisfactory.

Section 4.2 also provides guidance for assessing conflicting medical
reports. It states, in pertinent part, that:

> \[i\]t is the responsibility of the rating specialist to interpret
> reports of examination in light of the whole recorded history,
> reconciling the various reports into a consistent picture so that the
> current rating may accurately reflect the elements of disability
> present.

In this case, the 1988 report differs drastically from all other reports
of record in that the examiner concluded that appellant suffered mainly
from an Axis II personality disorder and only a very mild form of PTSD.
Yet, again, neither the rating board nor the BVA sought to reconcile the
1988 report with appellant\'s previous medical and psychiatric history,
with the 1986 report from the VA Director of Mental Health and
Behavioral Sciences Service which reconciled previous conflicting
reports in favor of the veteran, or with the reports from his treating
psychologist regarding his current status and treatment.

Appellant also alleges that the VA failed to apply 38 C.F.R. § 4.130
(1990) (evaluation of psychiatric disability). That section states that
\"two of the most important determinants of disability are time lost
from gainful work and decrease in work efficiency.\" In his report
submitted to the BVA, appellant\'s treating psychologist stated that
Lehman was currently having \"significant difficulty\" with his
employment. Appellant earned \$13.00 per hour, when he worked, but had
only earned \$13,000 in 1988, approximately half of which was \"sick
pay\". Had he been able to work the entire year, he would have earned
approximately \$28-30,000. The psychologist also noted that appellant\'s
PTSD caused him great difficulty in maintaining regular and steady
employment, that he was on probation and that he faced the possibility
of being discharged. R. at 158.

However, the BVA failed to address this evidence in the \"Discussion and
Evaluation\" section of its opinion. Furthermore, there is no evidence
in the record of an attempt by the VA, at any level, to obtain
appellant\'s employment records. *See Littke v. Derwinski,* U.S. Vet.
App. No. 89-68 (Dec. 6, 1990). The BVA merely concluded that \"the
overall picture of the veteran\'s PTSD at this time shows that it
produces a definite industrial impairment, as contemplated by the
present 30-percent rating. The criteria for a higher rating for this
disorder have not been met.\" *Ernest D. Lehman,* loc. no. 933225, at 7
(BVA Nov. 27, 1989). Under *Gilbert v. Derwinski*, U.S. Vet. App. No.
89-53, slip. op. at 12 (Oct. 12, 1990), \"a bare conclusory statement,
without both supporting analysis and explanation . . . is not in
compliance with statutory requirements.\" This deficiency is made even
more glaring by the fact that it was the treating psychologist who
commented upon the employment difficulties resulting from the
claimant\'s psychiatric condition. While it is not necessary to the
result in this case for us to find that the comments made by
appellant\'s treating psychologist be given \"extra weight\", we note
that a number of other federal courts have so found. *See, e.g.,
Schisler v. Heckler,* 787 F.2d 76, 85 (2d Cir. 1986); *Crum v.
Sullivan,* 921 F.2d 642, 644-45 (6th Cir. 1990).

***Conclusion***

We find that the reduction of appellant\'s rating was arbitrary and
capricious, particularly in light of the absence of an adequate
statement of reasons or bases required by *Gilbert*. *See* 38 U.S.C. §
4061(a)(3)(A) (1988). We further find that the reduction of appellant\'s
rating, on the basis of one inaccurate and incomplete medical report,
was made without observance of 38 C.F.R §§ 3.344, 4.1, 4.2, 4.130. 38
U.S.C. § 4061(a)(3)(D). Therefore, the BVA decision of November 27,
1989, is reversed and it is ordered that appellant\'s disability rating
of 50 percent be reinstated, retroactive to November 1, 1988.

*It is so Ordered.*