United States Government Accountability Office

GAO Testimony 

before the Subcommittee on Military 

Personnel, Committee on Armed Services, 

House of Representatives 

MILITARY DISABILITY 

EVALUATION 

Ensuring Consistent and 

Timely Outcomes for 

Reserve and Active Duty 

Service Members 

Statement of Robert E. Robertson, Director, Education, 

Workforce, and Income Security Issues 

For Release on Delivery

Expected at 9:00 a.m. EDT

Thursday, April 6, 2006

 

GAO-06-561T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2006

MILITARY DISABILITY EVALUATION

Ensuring Consistent and Timely 

Outcomes for Reserve and Active Duty 

Service Members 

Highlights of GAO-06-561T, a testimony to 

the Subcommittee on Military Personnel, 

House Committee on Armed Services 

The House Subcommittee on 

Military Personnel asked GAO to 

discuss the results of its recent

study on the Military Disability

Evaluation System. In this study,

GAO determined (1) how current 

DOD policies and guidance for 

disability determinations compare

for the Army, Navy, and Air Force,

and what policies are specific to 

reserve component members of the 

military; (2) what oversight and 

quality control mechanisms are in 

place at DOD and these three

services of the military to ensure

consistent and timely disability

decisions for active and reserve 

component members As shown in

figure 1,; and (3) how disability

decisions, ratings, and processing 

times compare for active and 

reserve component members of the 

Army, the largest branch of the 

service, and what factors might 

explain any differences. 

What GAO Recommends

In this report, GAO recommended 

that the Secretary of Defense take

certain steps to improve DOD 

oversight of the military disability 

evaluation system, including 

evaluating the appropriateness of

timeliness standards for case 

processing, and assessing the 

adequacy of training for disability 

evaluation staff. 

The Secretary concurred and 

indicated that our

recommendations would be

implemented. 

In March 2006, GAO reported that policies and guidance for military 

disability determinations differ somewhat among the Army, Navy, and Air 

Force. DOD has explicitly given the services the responsibility to set up their 

own processes for certain aspects of the disability evaluation system and has

given them latitude in how they go about this. As a result, each service 

implements its system somewhat differently. Further, the laws that govern 

military disability and the policies that the Department of Defense (DOD) 

and the services have developed to implement these laws have led reservists 

to have different experiences in the disability system compared to active 

duty members. For example, because they are not on active duty at all times,

it takes longer for reservists to accrue the 20 years of service that may be 

needed to earn monthly disability retirement benefits. 

While DOD has issued policies and guidance to promote consistent and 

timely disability decisions for active duty and reserve disability cases, DOD 

is not monitoring compliance. To encourage consistent decision-making,

DOD requires all services to use multiple reviewers to evaluate disability 

cases. Furthermore, federal law requires that they use a standardized 

disability rating system to classify the severity of the medical impairment. In 

addition, DOD periodically convenes the Disability Advisory Council, 

comprised of DOD and service officials, to review and update disability 

policy and to discuss current issues. However, neither DOD nor the services 

systematically determine the consistency of disability decision-making. DOD 

has issued timeliness goals for processing disability cases, but is not 

collecting information to determine compliance. Finally, the consistency 

and timeliness of decisions depend, in part, on the training that disability 

staff receive. However, DOD is not exercising oversight over training for 

staff in the disability system. 

While GAO’s review of the military disability evaluation system’s policies 

and oversight covered the three services, GAO examined Army data on 

disability ratings and benefit decisions from 2001 to 2005. After controlling 

for many of the differences between reserve and active duty soldiers, GAO 

found that among soldiers who received disability ratings, the ratings of 

reservists were comparable to those of active duty soldiers with similar 

conditions. GAO’s analyses of the military disability benefit decisions for the 

soldiers who were determined to be unfit for duty were less definitive, but 

suggest that Army reservists were less likely to receive permanent disability 

retirement or lump sum disability severance pay than their active duty 

counterparts. However, data on possible reasons for this difference, such as 

whether the condition existed prior to service, were not available for our 

analysis. GAO did not compare processing times for Army reserve and active 

duty cases because we found that Army’s data needed to calculate 

processing times were unreliable. However, Army statistics based on this 

data indicate that from fiscal year 2001 through 2005, reservists’ cases took 

longer to process than active duty cases. 

www.gao.gov/cgi-bin/getrpt?GAO-06-561T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robert E. 

Robertson at (202) 512-7215 or 

robertsonr@gao.gov. 
Military Disability Evaluation

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to present the results of our work in response to 

this committee’s mandate to review the Department of Defense (DOD) 

disability evaluation system, in particular how the system ensures that 

decisions in reserve and active duty cases are consistent and timely. Under 

certain circumstances, both active duty and reserve component members 

of the military are entitled to receive compensation for service-incurred or

-aggravated injuries or illnesses that render them unfit for continued 

military service. According to DOD regulations, a primary goal of the 

military disability evaluation system is to ensure consistent and timely 

decisions for active duty and reserve component members. 

Over the past 5 years, nearly half a million reserve component members 

across all services have been mobilized to augment active duty military 

forces in conflicts and peacekeeping missions worldwide.1

 In total, the 

Army, Navy, and Air Force evaluated 23,316 disability cases in fiscal year 

2005. One in four of these was a reservist’s case. Because reserve 

component members represent a substantial proportion of the mobilized 

military force, it is incumbent on DOD and the military to ensure that 

disability decisions made in their cases are consistent with those made in 

the cases of active duty members, and as timely. 

The information I’m providing today is based on work we reported on 

March 31, 2006, which was completed in accordance with generally 

accepted government auditing standards.2

 I will be discussing (1) how 

current DOD policies and guidance for disability determinations compare 

for the Army, Navy, and Air Force, and what policies are specific to 

reserve component members of the military; (2) what oversight and quality 

control mechanisms are in place at DOD and these three services to 

ensure consistent and timely disability decisions for active and reserve 

component members; and (3) how disability decisions, ratings and 

processing times compare for active and reserve component members of 

the Army, the largest branch of the military, and what factors might 

explain any differences.

 1

In this testimony, the word “reservist” refers to a reserve component member. 

2

GAO, Military Disability System: Improved Oversight Needed to Ensure Consistent and

Timely Outcomes for Reserve and Active Duty Service Members, GAO-06-362 

(Washington, D.C.: Mar. 31, 2006). 

Page 1 GAO-06-561T 
Military Disability Evaluation

In summary, GAO found that DOD has explicitly given the services the 

responsibility to set up their own processes for certain aspects of the 

disability evaluation system and has given them latitude in how they go 

about this. As a result, each service implements its system somewhat 

differently. Further, the laws that govern military disability and DOD and 

service policies implementing these laws have led reservists to have 

different experiences in the disability system compared to active duty 

members. While DOD has issued policies and guidance to promote 

consistent and timely disability decisions for active duty and reserve 

disability cases, DOD is not monitoring compliance, and neither DOD nor 

the services systematically determine the consistency of disability decision 

making. With regard to ensuring the timeliness of disability case 

processing, DOD has issued processing time goals but is not collecting 

information to determine compliance. Our own statistical analysis found 

that Army reservists received similar disability ratings as their active duty 

counterparts, but reservists may be less likely to receive military disability 

benefits than their active duty counterparts. Data available from the Army 

were not reliable enough for our analysis. However, Army statistics 

indicate that from 2001 through 2005 reservists’ cases took longer to 

process than active duty soldiers’ cases. 

Page 2 GAO-06-561T 
Service members who become physically unfit to perform military duties 

due to service-incurred or -aggravated injuries or illnesses may receive 

military disability compensation under certain conditions. Each of the 

services administers its own disability evaluation process. According to 

DOD regulations, the process should include a medical evaluation board 

(MEB), a physical evaluation board (PEB), an appellate review process, 

and a final disposition. Each service member who goes through the system

should be assigned a Physical Evaluation Board Liaison Officer (PEBLO) 

to help the service member navigate the system and prepare documents 

for the PEB. 

Background 

There are a number of steps in the disability evaluation process and 

several factors play a role in the decisions that are made at each step. 

See fig. 1. 

Page 3 GAO-06-561T Military Disability Evaluation
Military Disability Evaluation

Figure 1: Decisions Made During the Military Disability Evaluation Process 

Dispositions:

Disability benefits

entitled to

Member

with

medically 

limiting

injury/

condition

What is the 

disability rating 

(injury/condition’s

severity)?

Does the 

member meet 

retention

standard?

Is the member 

fit for duty?

Is the disability 

compensable? No No Yes

Placed on the 

Temporary Disability 

Retired List (TDRL)

Placed on 

Permanent Disability 

Retirement

(Separated with 

monthly disability 

retirement benefits)

Separated with 

lump sum disability 

severance

Separated 

without 

benefits

Return 

to 

duty

Source: DOD documents.

Medical Evaluation Board

(MEB) Decision

Physical Evaluation Board

(PEB) Decisions

0-20%

Member’s 

years of

active duty

or equivalent 

service

Based on

· Medical evidence

 and

· DOD/service

 regulations

Yes

< 20 years

Yes Yes No

Based on

· Medical evidence,

· Member’s injury/

 condition

· Occupational

 specialty

· Performance

Based on

· Line of duty

 determination

· For injury/condition

 existing prior to

 service—whether

 member has at

 least 8 years of

 active duty service

Based on

· Medical evidence

 and

· VA “Schedule for

 Rating Disabilities”

 guidance

· DOD rating

 guidance

Disability

is stable

30% or

higher

≥ 20 years

No

The disability evaluation process has four possible outcomes. A service 

member can be 

1. Found fit for duty; 

2. Separated from the service without benefits—service members whose 

disabilities were incurred while not on duty or as a result of intentional 

misconduct are discharged from the service without disability benefits; 

3. Separated from the service with lump sum disability severance pay; or 

Page 4 GAO-06-561T 
Military Disability Evaluation

4. Retired from the service with permanent monthly disability benefits or 

placed on the temporary disability retirement list (TDRL). 

The disability evaluation process begins at a military treatment facility 

(MTF) when a physician medically evaluates a service member’s injury or 

condition to determine if the service member meets the military’s 

retention standards, and prepares a narrative summary describing the 

findings. This process is referred to as a medical evaluation board (MEB). 

Service members who meet retention standards are returned to duty. 

Those who do not are referred to the physical evaluation board (PEB). 

The first step in the PEB stage of the process is the informal PEB—an 

administrative review of the case file without the presence of the service 

member. To arrive at its findings and recommendations regarding 

eligibility for disability benefits, the PEB determines if service members 

are fit for duty and their injuries or conditions are compensable, and what 

disability rating their injuries or conditions should be assigned. The PEB 

also considers the stability of the condition in cases eligible for monthly 

disability retirement benefits. Service members with conditions that might 

improve or worsen are placed on TDRL and reevaluated by the PEB at 

least every 18 months to determine if their condition has stabilized. Those 

who continue to be unfit for duty after 5 years on TDRL are separated 

from the military with monthly retirement benefits, discharged with 

severance pay, or discharged without benefits, depending on their 

condition and years of service. 

Service members have the opportunity to review the informal PEB’s 

findings and may request a formal hearing with the PEB. However, only 

those found unfit are guaranteed a formal hearing. If service members 

disagree with a formal PEB’s findings and recommendations, they can, 

under certain circumstances, appeal to the reviewing authority of the PEB. 

Once the service member either agrees with the PEB’s findings and 

recommendations or exhausts all available appeals, the reviewing 

authority issues the final disposition in the case. 

DOD Policies and 

Guidance Allow the 

Services to Implement the 

Disability Evaluation 

System Differently

DOD explicitly gives the services responsibility for administering the 

military disability evaluation system. While DOD regulations establish 

some parameters and guidelines for this system, the services have 

considerable latitude in how they interpret them. Consequently, across the 

services there are differences in MEB and PEB procedures and the use of 

counselors to help service members navigate the system. 

Page 5 GAO-06-561T 
Military Disability Evaluation

With regard to the MEB, the medical evaluation of a service member’s 

ability to meet military retention standards, the Air Force convenes an 

actual board of physicians who meet regularly and vote on whether 

service members meet retention standards. In contrast, the Army and Navy 

MEBs are informal procedures during which case files are separately 

reviewed by board members. Each branch of the service has established 

PEB to determine whether service members who do not meet medical 

retention standards are entitled to disability compensation. Makeup of the 

board differs by service. The Army allows the same individuals to sit on 

both the informal and formal PEB in the same case. The Air Force allows 

this only under certain circumstances. The Navy has no written policy on

the matter, and one Navy PEB official indicated that the same individuals 

often served on both informal and formal PEBs in a case. 

DOD regulations require that each service assign a Physical Evaluation 

Board Liaison Officer to service members whose disability cases are being 

evaluated. According to these regulations, PEBLOs are expected to 

counsel these service members on their rights, the effects of MEB and 

PEB decisions, and available disability benefits. Each service employs 

PEBLO counselors in accordance with these rules, but has placed them 

under different commands, begins the counseling process at different 

points in the disability evaluation process, and provides PEBLOS with 

different levels of training. 

DOD and the Services 

Have Established Policies 

That Result in Different 

Experiences with the 

Disability System for 

Reservists 

Due to the part-time nature of reserve service, some laws governing 

military disability compensation result in different experiences with the 

disability system for reservists. Under the law, to receive monthly 

disability retirement benefits, a service member determined unfit for duty 

must have at least 20 years of active duty service or a disability rated at

least 30 percent. Because reservists are not on duty at all times, it takes 

longer for them to accrue the 20 years of service needed to qualify for 

monthly disability retirement benefits when their disability rating is less 

than 30 percent. 

Part-time status also makes it more difficult for reservists with preexisting 

conditions to be covered by the 8-year rule and therefore eligible for 

disability compensation of any kind. By law, service members determined 

to be unfit for duty are automatically eligible for disability compensation if 

they have at least 8 years of active duty service, even if their conditions 

existed prior to entry into the military or were not aggravated by their 

military service. However, this entitlement only applies to reservists when 

they are on ordered active duty of more than 30 days at the time their case 

Page 6 GAO-06-561T 
Military Disability Evaluation

is before a PEB. For reservists, accruing these 8 years can be more 

difficult than for active duty service members. 

Officials reported that commanders and others responsible for completing 

line of duty determinations were often uncertain as to when line of duty 

determinations were necessary for reservists and active duty members. 

Moreover, these officials noted that in some cases, the necessary line of 

duty determinations were not made, resulting in delays for service 

members. For example, Air Force officials we spoke with had different 

impressions as to whether line of duty determinations were always 

required for reservists, even though Air Force regulations state they are. 

Officials from the Army and Army National Guard similarly offered 

different perspectives on the need for line of duty determinations for 

reservists. 

Questions About Line of 

Duty Determinations 

Army Reservists Often Are 

Not Returned Home for 

Medical Treatment 

In the Army, deployed active duty soldiers return to their unit for service 

in a back up capacity when they are injured or ill and require medical 

treatment. Mobilized injured or ill Army reservists have no similar unit to 

return to. Consequently, their mobilization orders are often suspended; 

they are retained on active duty in “medical holdover status” and often 

assigned to a medical retention processing unit while they receive medical 

treatment. While in medical holdover status, reservists may live on base, at 

a military treatment facility, at home or at other locations. After their 

mobilization orders expire, they can elect to continue on active duty 

through a program such as medical retention processing, which allows 

them to continue receiving pay and benefits. According to the Army, about 

26,000 reservists entered medical holdover status between 2003 and 2005.

Unlike most injured active duty soldiers, reservists in medical holdover 

generally must live away from their families while receiving medical 

treatment. In certain cases reservists in medical holdover may receive 

treatment and recuperate at home. The Army’s Community Based Health 

Care Organizations (CBHCO) provide medical and case management for 

these reservists. As of December 2005, about 35 percent of the reservists in 

medical holdover were being cared for in the CBHCO program. In order to 

be assigned to this program, reservists must meet a number of criteria. For 

example, reservists must live in communities where they can get 

appropriate care, and they must also be reliable in keeping medical 

appointments. 

Page 7 GAO-06-561T 
To help ensure consistent decision making in disability cases, all services 

must use a common rating schedule, multiple reviews are required, and a 

disability advisory council was created to oversee administration of the 

system. The law requires all services to assign ratings to disabilities based 

on a common schedule—the Department of Veterans Affairs Schedule for 

Rating Disabilities (VASRD). The VASRD is a descriptive list of medical 

conditions associated with disability ratings. DOD regulations require each 

service to review service members’ case files multiple times during the 

disability evaluation process by a number of officials with different roles. 

Military officials also regard the appeals process required by DOD as 

helping to ensure the consistency of disability evaluation decision making.

According to DOD officials, primary oversight of the disability evaluation 

system currently rests with the DOD Disability Advisory Council. The 

council is composed of officials from each of the three services’ disability 

agency; DOD health affairs, reserve affairs, and personnel officials; and 

representatives from the Department of Veterans Affairs. According to 

DOD officials, the council serves as a forum to discuss issues such as 

changing rules and increasing coordination among the services. The 

council generally does not formally report on its activities and 

accomplishments to higher officials in the DOD chain of command nor 

has it met on a regular basis during the last year.

Several Features of the 

Disability Evaluation 

System Are Intended to 

Help Ensure Consistent 

Decision Making 

Lack of Oversight by DOD 

and the Services Provides 

Little Assurance Decisions 

Are Consistent 

Despite this policy guidance and the presence of the disability council, 

both DOD and the three services lack quality assurance mechanisms to 

ensure that decisions are consistent. Given that one of the primary goals of 

the disability system is that disability evaluations take place in a consistent 

manner, collecting and analyzing the service member’s final disability 

determinations are critical for ensuring that decisions are consistent. DOD 

regulations recognize this and require that the agency establish necessary

reporting requirements to monitor and assess the performance of the 

disability system and compliance with relevant DOD regulations. Yet DOD 

does not collect and analyze information from the services on the final 

disability determinations and personal characteristics of service members 

going through the disability system. 

Page 8 GAO-06-561T Military Disability Evaluation
To help ensure timely disability decisions, DOD regulations indicate that 

MEBs should normally be completed in 30 days or less; PEBs should 

normally be completed in 40 days or less. DOD does not regularly collect 

available data from the services on their MEB and PEB processing times, 

however, so it does not monitor compliance with its goals. 

The Army and Navy generally use the data they compile on their disability 

cases to track the timeliness of both MEB and PEB decisions. The Air 

Force only tracks processing times for PEB cases because it has no 

centralized database containing information from all its MEB cases. Data 

reported by the services show disability case processing time goals are not 

being met. Some of the military officials we spoke with believe this is 

because the goals themselves are unrealistic, particularly when 

addendums to the MEB’s findings are required, such as in orthopedic or 

psychiatric cases requiring certain medical tests. 

The usefulness of data of disability case processing times may also be 

undermined by confusion among military officials and data entry staff 

regarding when the disability evaluation process begins. According to 

DOD, the process begins on the date a physician dictates the narrative 

summary for an MEB. When we compared original Army PEB case files to

Army electronic data from both its MEB and PEB databases, for example, 

we found that the date entered in the electronic file was often not the date 

on the narrative summary. When we asked about these errors, Army 

officials said that increased training of data entry staff would help resolve 

this problem. Navy officials also noted that there was some confusion 

about when case processing begins if additional medical information is 

needed to make a disability decision for a service member. 

DOD Has Instituted 

Timeliness Goals for 

Processing Disability 

Cases but Does Not 

Oversee Compliance 

with Them 

DOD’s Delegation of 

Training to the Services 

and Staff Turnover Present 

Additional Challenges for 

the Disability System 

According to DOD regulations, the Assistant Secretary of Defense for 

Health Affairs is given explicit instructions to develop and maintain a 

training program for MEB and PEB staff. When we spoke with officials 

from the Office of Health Affairs, however, they indicated they were 

unaware that they had the responsibility to develop such a training 

program. In addition, despite high turnover among military disability 

evaluation staff, the services do not have a system to ensure that all staff 

are properly trained. This turnover stems, in part, from the military 

requirement that personnel rotate to different positions in order to be 

promoted. Military officials told us that depending on the positions 

involved, some staff remain in their positions from 1 to 6 years, with most 

remaining about 3 years. This turnover and the resulting loss of 

institutional knowledge require that the services systematically track who 

Page 9 GAO-06-561T Military Disability Evaluation
Military Disability Evaluation

has been properly trained. However, all of the services lack data systems 

that would allow them to do so, an issue that was highlighted in a recent 

RAND report.3

Our analyses of Army data from calendar years 2001 to 2005 indicated that

after taking into account many of the differences between reserve and

active duty soldiers, Army reservists and their active duty counterparts 

received similar disability ratings. The results of our analyses of military 

disability benefit decisions for soldiers suggest that Army reservists with 

impairments that made them unfit for duty were less likely to receive

either permanent disability retirement or lump sum disability severance 

pay than their active duty counterparts. The results of our analysis of 

benefits are less definitive than those from our analysis of ratings, 

however, because data on all possible reasons for the difference in receipt 

of benefits, such as years of service and whether the condition existed 

prior to service, were not available for our analysis. 

Some Inconsistencies 

May Exist in Disability 

Decisions for Army 

Reserve and Active Duty 

Service Members 

Poor Quality Data 

Precluded GAO Analysis, 

but the Army Reports 

Reservists’ Cases Can 

Take Longer to Process 

We did not conduct our own statistical analysis to determine if processing 

times for Army reserve and active duty soldiers’ cases were comparable. 

The electronic data needed to calculate these times were unreliable, so not 

of sufficient quality to warrant their use in our analysis. Nonetheless, the 

statistics the Army provided on PEB disability case processing times 

indicate that reservists’ cases reviewed between fiscal years 2001 and 2005 

took consistently longer than those of active duty soldiers. Over half 

(54 percent) of reserve soldiers’ cases took longer than 90 days, while over 

one-third (35 percent) of active duty soldiers’ cases exceeded 90 days. 

According to Army officials, there are a number of possible explanations 

for the differences in processing times in reservist and active duty cases. 

In reservists’ cases, the MEB often must request medical records from 

private medical practitioners, which can cause considerable delays in the

process. In addition, the personnel documents for reservists are stored in

facilities around the United States, and may take longer to retrieve than 

records for active duty soldiers. 

 3

 Cheryl Y. Marcum, Robert M. Emmerichs, Jennifer S. Sloan, and Harry J. Thie, Methods 

and Actions for Improving Performance of the Department of Defense Disability 

Evaluation System. MR-1228-OSD (Santa Monica, California: the Rand Corporation, 2002). 

Page 10 GAO-06-561T 
Decisions affecting eligibility for military disability benefits have a 

significant impact on the future of service members dedicated to serving 

their country. Given the importance of these decisions and the complexity

of the evaluation process and rules governing eligibility for benefits, it is 

essential that the services take adequate steps to ensure that decisions in 

reserve and active duty cases are consistent and timely. It is also 

incumbent on DOD to adequately oversee administration of its disability 

evaluation system and the fairness of the system’s outcomes for both 

reserve and active duty members of the military across all the services. 

Conclusions 

DOD is not adequately monitoring disability evaluation outcomes in 

reserve and active duty disability cases. The services are not

systematically evaluating the consistency and timeliness of disability 

decisions, or compiling reliable data on all aspects of the system needed to

statistically analyze disability evaluation outcomes. With regard to the 

timeliness of disability case processing, military officials recognize that 

not all disability cases are processed within the time frames set by DOD 

and that reservist cases take longer to process than those of active duty 

members. They have suggested that the goals may not be appropriate in 

many cases. If timeliness goals do not reflect appropriate processing 

times, they may not be a useful program management tool. Finally, while 

the consistency and timeliness of decisions depend on the adequate 

training and experience of all those involved in evaluating disability cases, 

we found that DOD had little assurance that staff at all levels in the 

process are properly trained. 

Based on these findings and conclusions, we recommended in our recent

report that the Secretary of Defense take certain steps to improve DOD 

oversight of the military disability system, including evaluating the 

appropriateness of timeliness standards for case processing and assessing 

the adequacy of training for disability evaluation staff. The Secretary 

concurred with our recommendations and indicated our recommendations 

would be implemented. 

Mr. Chairman, this concludes my remarks. I would be happy to answer any 

questions you or the other members of the committee may have. 

Page 11 GAO-06-561T Military Disability Evaluation
Military Disability Evaluation

Robert E. Robertson (202)512-7215 or robertsonr@gao.gov

The following individuals have made major contributions to this 

statement— Jason Barnosky, Erin Godtland, Scott Heacock, Anna Kelley,

and Clarita Mrena. 

GAO Contact 

Staff 

Acknowledgments 

130566 Page 12 GAO-06-561T 
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