Disability Evaluation of Military Servicemembers
Released: 2010-01-27T00:00:00

Introduction

On February 18, 2007, the Washington Post published the first in a series of articles describing problems with outpatient medical care and other services provided at the Walter Reed Army Medical Center (WRAMC). WRAMC, a Department of Defense (DOD) facility in Washington, DC, is one of several Military Treatment Facilities (MTFs) providing medical care to injured servicemembers returning from combat theaters in Afghanistan and Iraq in support of Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF).

Intense media scrutiny followed the Washington Post series. News reports have, in general, observed that medical care provided to returning servicemembers is good or excellent, but noted evidence of problems with infrastructure and cleanliness in both DOD and Department of Veterans Affairs (VA) facilities. In addition, reported problems have included complex administrative systems, delays and errors in DOD's processing of retirement and other benefits for those servicemembers who separate from the armed forces, the transitioning of eligible servicemembers to veteran status, and VA's processing of veterans' benefits. Reports have also mentioned understaffing and inadequate training of case workers who assist servicemembers and veterans with benefits processing and other aspects of their return to civilian life. Some reports have, however, been problematic in their descriptions of the respective roles of DOD and VA in providing health care and other benefits to injured servicemembers, or in their descriptions of the health care and other benefits systems in the two departments.

Reports have spotlighted problems faced by some returning injured OEF/OIF servicemembers. However, DOD and VA do not apply their disability evaluations differently to OEF/OIF servicemembers than to other servicemembers and veterans. Also, less than half of each department's disability evaluation caseloads involve OEF/OIF personnel. Nonetheless, the added number of OEF/OIF cases and, in particular, their complexity, do appear to have strained the capacity of the disability evaluation systems in the two departments.

Some news reports and other sources have asserted that the DOD underrates disability. In both the DOD and VA systems, disability ratings range from zero (least severe) to 100% (most severe), in increments of 10%. Generally, if an injured servicemember has served in the military less than 20 years, a DOD disability rating of 20% or less entitles the servicemember to a single lump-sum severance payment and no additional military benefits, while a rating of 30% or greater may, subject to certain other conditions, make the individual eligible for certain lifelong military benefits such as retirement pay and health insurance for the servicemember and his or her family. Hence, in most cases, a disability rating of 30% or greater yields a more favorable benefits package for the servicemember, and a higher and longer-term cost for the department. For veterans under the VA system, in comparison, a service-connected disability rating of 10% or more provides a monthly disability compensation payment whereas a disability rating of 30% or more provides additional disability compensation for a spouse and dependents. (The amount of monthly disability compensation depends on the disability percentage rating.) In addition, unlike the DOD disability evaluation, VA disability ratings may, over time, be revised as a veteran files a claim (or claims) for changes in disability status related to prior military service.

This report describes disability evaluation in general, including evaluations used by DOD and VA, as well as civilian evaluations used by the Social Security Administration and by workers' compensation programs. Next, the DOD and VA disability rating processes are described, respectively, in greater detail. This report emphasizes the disability evaluation systems at DOD and VA, with illustrative comparisons made to civilian systems when appropriate.

Overview of Disability Evaluation

There are significant differences between the disability evaluations performed by the DOD, the VA, the Social Security Administration (SSA), and workers' compensation programs (WC). There are differences in process and, more importantly, fundamental differences in the basis for evaluation in each of the systems. This may result in different rating outcomes from each system, which can affect the financial condition of the disabled applicant and the future costs incurred by the benefits provider. A brief overview and comparison of the four systems is provided below. More detailed descriptions of the DOD and VA systems are presented later in this report.

Some have proposed combining or linking different disability evaluation programs to improve outcomes or other problems with program performance. (For example, proposals to consolidate the DOD and VA disability systems, or to have the VA conduct disability evaluations of DOD personnel, are discussed in the " DOD/VA Disability Evaluation System Pilot " section of this report.) However, attempts to combine or link existing disability evaluation systems may be difficult and may not be desirable, given the different purposes of each system.

The Government Accountability Office (GAO) has designated as high-risk the federal disability programs at SSA and VA, which rate disability based on civilian employability. GAO says that these systems are based upon outmoded concepts of disability, and fail to optimize opportunities that would allow disabled beneficiaries to return to productive work.

Department of Defense Disability Evaluation

The DOD disability evaluation is focused on the effect of any disabling condition on the performance of the servicemember ' s duties in the military. The evaluation can be viewed as a two-step process. The first step is to determine if the applicant (servicemember) is fit for military duty. The second step, for applicants found to be unfit, is the rating of service-connected disability.

Several factors are taken into account to determine a servicemember's fitness for duty, including

whether or not the servicemember can perform his or her required duties (based on office, grade, rank, or rating); whether or not the servicemember is medically prevented from taking the required physical fitness test; the impact on deployability of the servicemember and his or her unit; and whether or not an alternative job specialty for the servicemember is feasible.

If a servicemember is found unfit for duty, the servicemember can be placed on the Temporary Disability Retired List (TDRL, which requires a reevaluation in the future), or permanently released from military service. Prior to release, DOD examines those service-connected physical impairments that rendered the soldier unfit, and provides a disability rating. For soldiers with multiple diagnosed physical impairments, each is potentially ratable, provided that DOD finds each physical impairment to be separately unfitting. DOD and VA use the same rating table, the Veterans Affairs Schedule for Rating Disabilities (often referred to as VASRD or SRD, described in the Text Box below) to determine the disability percentage. This disability percentage is one factor used to determine if the servicemember receives a lump-sum payment upon discharge (based on a rating of 20% or lower), or an annual pension and possibly other lifelong benefits (based on a rating of 30% or higher).

Once the ratings determination is made and accepted by the servicemember, no further changes to the evaluation, percentage rating, lump-sum payment, or pension are made in the future. The military disability evaluation process does not look at the individual servicemember's current, future, or potential earnings or earnings capacity in evaluating disability.

Department of Veterans Affairs Disability Evaluation

The VA evaluates a qualified individual ' s disability based on the likely prognosis—the progression of severity of the disability over time—and the effect of the disability on employability within the civilian job market. A qualified individual is generally a former servicemember with active-duty service in the military who has been discharged under conditions other than dishonorable. The DOD's central consideration in disability evaluation, namely, fitness for military duty, is not relevant for the VA's evaluation.

The VA evaluates all medical conditions or illnesses that the veteran (the former servicemember) incurred during military service, and preexisting medical conditions or illnesses that were aggravated by military service. The resulting disability percentage rating (based on the VASRD) determines the level of monthly disability compensation, eligibility for other benefits and also plays a role in determining the veteran's position in the priority system for VA medical care. To receive disability compensation, an individual must be rated at least 10% disabled. In contrast to the DOD system, the veteran can be reevaluated if new or newly recognized medical conditions or illnesses occur and are determined to have been caused or aggravated by military service. A veteran may, upon reevaluation, receive a different percentage ranking than he or she received initially. (Though such a reevaluation may yield a disability payment that is a larger or smaller, the former outcome is much more common.)

Social Security Administration Disability Evaluation9

The SSA evaluates individuals to determine their eligibility for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) benefits. SSDI benefits are available to persons with disabilities who are below the retirement age and who have paid into the Social Security system through payroll taxes, while SSI benefits are available to children and adults with disabilities who have limited assets and income. To qualify for either SSDI or SSI benefits based on disability, a person must have a medically determinable impairment that is expected to last at least one year or result in death, and that renders the person unable to perform his or her previous work or any other work that exists in significant numbers in the national economy.

There are no percentage ratings or partial disability determinations for SSDI or SSI benefits. SSDI benefit amounts are based on an individual's career earnings covered by Social Security. All SSI recipients receive the same basic monthly federal benefit; this benefit is reduced by any earned or unearned income the recipient receives in a month, and is augmented by any supplement paid by the recipient's state.

Workers' Compensation Disability Evaluation12

WC is an employer-provided benefit. Generally, an employer, under state laws, must purchase WC insurance to provide medical care and compensation for the work-related injuries or illnesses of employees. In general, WC provides, subject to limitations in state laws, medical coverage and payments for lost wages. State laws specify a percentage of the worker's usual wage (66⅔%, in most cases) to be paid during periods of work-related total, but not necessarily permanent, disability. In addition, for all work injuries, the employer is responsible for full payment of all necessary medical treatment until the point of "maximum medical improvement" is reached. Various forms of cost control (e.g., utilization review) may be used, and disputes can be referred to an administrative proceeding conducted by the state labor department or equivalent agency.

Medical evaluations for WC may be done by the employee's personal physician or one specified by the insurance carrier, with disputed results again appealable to a state agency. As noted, total disability is compensated by a percentage of lost wages for as long as the disability persists (though with some time limits or reductions in amount at retirement age in some states). The various jurisdictions evaluate partial disability in many different ways, which have been classified by some analysts into three basic models:

Impairment rating: An assessment is made of the worker's proportionate loss of general physical and/or mental functioning compared to a hypothetical "whole person." Loss of earning capacity: An estimate is made of the maximum level of earnings the worker can attain in his or her present condition compared to his or her previous earnings. This takes into account education, age, state of the local job market and other particulars of the case. Actual wage loss: Post-injury earnings are subtracted from the pre-injury rate of earnings. However, additional criteria are usually applied in order to assure that the loss of earnings is fully caused by the injury.

Most jurisdictions also make distinctions among types of injury. For example, there may be benefit limitations applied to mental injury versus physical injury, or occupational disease versus traumatic injury. Most states also list specific types of injuries (called "scheduled" injuries)—usually loss of body parts or functions such as vision or hearing—and specify a standardized benefit. For example, loss of an arm could be compensated by six years of payment at two-thirds of one's normal wage.

State governments, insurers and employers generally place a high priority on return to work , whether it is to the original job, a light duty assignment, or with a new employer. This strategy is usually the most cost-effective, and, arguably, preferred by most workers. Accordingly, vocational rehabilitation is included in all WC systems and, indeed, a worker may lose his or her WC payments if not participating in a prescribed rehabilitation program.

In addition to WC, some employers offer private disability insurance to cover disabilities that may not be caused by work injuries. Under these policies, the employee makes premium payments (the employer may or may not contribute to the premiums) for insurance to provide a replacement for lost income in the event of an injury or illness that prevents him or her from working.

The DOD Physical Disability Evaluation System

Initial Medical Treatment of Injured Servicemembers

In general, when a solider is injured on the battlefield, such as in the OEF/OIF conflict theaters, he or she is stabilized in theater by a combat medic/lifesaver and then moved to a battalion aid station. If the servicemember has serious injuries, he or she is transferred to a forward surgical team to be stabilized, and then moved to a combat support hospital and further stabilized for a period of about two days. If the servicemember needs more specialized care, he or she is evacuated from OEF/OIF conflict theaters and brought to Landstuhl Regional Medical Center (LRMC) in Germany for treatment. Most patients arrive at LRMC 12 to 48 hours after injury. In general, servicemembers remain in Germany for a period of about four to five days. Length of stay at in-theater medical facilities is determined by the stability of the patient and the availability of medical evacuation aircraft.

After further stabilization at LRMC, seriously injured soldiers are evacuated to the United States. They arrive at an Echelon V (highest level of care) Military Treatment Facility (MTF), such as WRAMC, or the National Naval Medical Center (NNMC) in Bethesda, MD. Catastrophic burn patients are flown to the Brooke Army Medical Center (BAMC) at Fort Sam Houston, TX. BAMC has also established a specialized amputee rehabilitation center.

Injured servicemembers remain hospitalized as inpatients as long as required for optimal medical care and treatment. When hospitalization is no longer required and the patient is ambulatory, the servicemember may transition to outpatient status. Depending on the severity of the servicemember's injuries, lengths of stay in inpatient and/or outpatient facilities may be considerable, lasting months or sometimes years. Nonetheless, the individual remains a member of the military—not a veteran—unless or until he or she separates from military service. Generally, servicemembers do not undergo medical assessments for disability evaluation until it is felt that the progression of their medical condition has reached a plateau. Until this occurs, active-duty servicemembers whose injury or illness prevents them from working in their assigned unit during recovery and rehabilitation are placed on "Medical Hold" status.

Steps in the Disability Evaluation Process

Overview

The DOD has well-established criteria for the medical qualifications and physical aptitude of those desiring to enlist or be appointed in the military. For servicemembers who become potentially unfit for further service due to injury or disease, DOD has a process to evaluate their fitness for retention in the Armed Forces. DOD has granted the Army, Navy and Air Force some latitude in tailoring disability processes to their specific requirements. The determination of fitness is individualized and based, in addition to medical criteria, upon a soldier's ability to perform the duties of his or her primary military occupation speciality (MOS) or officer speciality at a minimum level of competence, taking into consideration rank and current duty position. Consequently, two servicemembers with comparable medical conditions, but different MOSs, may receive different fitness determinations if the medical condition affects duty requirements in different ways .

In general, if a military commander or physician determines that an active or reserve military servicemember may be physically unfit for return to duty, the servicemember is referred to a Medical Evaluation Board (MEB). If the MEB finds that the individual does not meet medical fitness standards, the case will be referred to a Physical Evaluation Board (PEB). The PEB's role is to determine whether a soldier can reasonably perform his or her military duties, and if not, to determine the severity of the soldier's physical or mental disability and rate it accordingly. The disability rating determines if the soldier is retained in the service, separated with or without separation pay, permanently retired, or placed on the Temporary Disability Retired List (TDRL). (These outcomes are discussed in greater detail later in this report.) The PEB process incorporates informal, formal, and appeals procedures. Throughout the process, military personnel must be provided with trained counselors to advise and assist. The steps in this process—MEB, PEB, and appeal—are referred to as the Physical Disability Evaluation System (PDES), which is diagramed in Figure 1 . Each branch of the Armed Forces oversees its own PDES processes and procedures.

Medical Evaluation Board

The MEB, usually composed of two to three physicians, is conducted to first document the medical status and duty limitations of servicemembers referred to it. The board reviews medical information and the determination of whether an injury is service-connected. MEBs may be formal or informal, and may permit appeals based on service guidelines. Importantly, the MEB does not make a conclusion of unfitness, recommend a disability percentage rating, or make a determination regarding separation or retention in the service. MEB results are forwarded to the PEB for disability rating and retention or separation decisions.

Physical Evaluation Board

The PEB is usually composed of both physicians and officers within the servicemember's chain of command. PEBs can also be conducted on a formal or informal basis. The informal PEB is used if the servicemember has not requested a personal appearance and only a documentary review is required. The formal PEB is required when the servicemember has requested a personal appearance before the board, with or without legal representation or other advisory assistance.

Using the medical assessment provided by the MEB, the PEB first determines whether the servicemember meets medical standards for retention in the service. The determination has a presumption of fitness. That is, the servicemember is presumed to have been fit until the injury or illness occurred. This is because the servicemember was examined prior to entering the service, and periodically afterward, including prior to deployment. If a servicemember is deemed unfit for duty, the PEB determines if the disability is service-connected and assigns a disability rating based on fitness for military service. Formal PEBs require a written record that is made available to the servicemember, and servicemembers can appeal the findings and recommendations of the PEB. Final results are forwarded to appropriate personnel authorities for final approval, as delegated by the secretary of the respective service branch.

Assistance to Servicemembers During Disability Evaluation

DOD provides trained counselors for servicemembers being evaluated in the disability process to assist with the MEB, PEB, and other required processes. These individuals are commonly referred to as Physical Evaluation Board Liaison Officers, or PEBLOs. However, the GAO has noted inconsistencies among the military services (Army, Air Force, and Navy) in when the PEBLOs entered the disability process and the adequacy of their training. Assistance is also available from new programs established by DOD and the services to support severely disabled OIF/OEF servicemembers.

Outcomes of the DOD Disability Process

For the injured servicemember, there are five potential outcomes from the disability process. These are described below. For those who are separated as a result of a disability, benefits provided will vary depending on years of service, a determination of whether the disability is service-connected, and the percentage disability rating. Servicemembers with less than 20 years of service who are separated with disability ratings of 30% or greater may be eligible for lifelong benefits, including retirement pay and health insurance for the servicemember and his or her family. Servicemembers separated with disability ratings of 20% or less do not receive lifelong benefits, but instead receive a single lump-sum severance payment.

The possible outcomes of the military disability process are as follows:

1. Retained

Servicemembers may be found fit for duty and retained. In some cases, based on the physical limitations resulting from an illness or injury, a servicemember may be reclassified into a different job category.

2. Placed on Temporary Disability Retired List

Servicemembers who are found unfit but whose condition is unstable (i.e., the condition may improve or worsen over time) may be placed on the TDRL for a maximum of five years. While on the TDRL, periodic reexaminations are required (normally every 18 months). Based on the reexaminations and a determination of stable condition, the retiree could be found fit for duty, could have his or her disability rating lowered and be separated with severance pay, or could be permanently retired. While on the TDRL, servicemembers receive monthly retired pay (not to exceed 50% of base pay), and are eligible for all retiree benefits and programs, but are not required to perform any military duties.

3. Separated from Service with No Benefits

Disability benefits are not available if the injury or illness was incurred while not on duty (i.e., is not service-connected), or as a result of willful misconduct.

4. Separated with Severance Pay

Eligibility for this outcome is based on a finding of unfitness and a disability rating of less than 30%. The amount of severance pay is determined by multiplying the monthly basic pay at the time of discharge by twice the number of years of active service. The maximum payment is two years of basic pay.

5. Permanently Retired with Physical Disability Benefits

Servicemembers who are determined to be physically unfit and have a disability rating of 30% or greater generally will be retired, even though they may have less than 20 years of active duty. The disability retirement pay calculation differs somewhat from the normal longevity retirement calculation. It is computed by multiplying the basic pay of the retired grade by the greater of the percentage of the disability, or 2.5% multiplied by the number of years of service. The maximum benefit under either computation cannot currently exceed 75% of basic pay.

Retired servicemembers with service-connected disabilities may also be eligible for VA disability compensation. Until recently, military retired pay was offset by any VA compensation received. However, the FY2004 National Defense Authorization Act now allows some military retirees to receive both VA and military retirement compensation, if the individual was retired with more than 20 years of service. Generally, military retired pay is taxable. Exceptions are (1) if the disability pay is for combat-related injuries or (2) if the servicemember was in the military, or so obligated, on September 24, 1975.

Issues of Timely and Consistent Processing

The goal of DOD disability policy is that the physical disability evaluation process will be conducted in a "consistent and timely manner." However, DOD has given the services the latitude to set up their own processes, so inconsistencies would appear to be inevitable. While standards or common schedules such as the VASRD are used, these may be subject to interpretation and/or misapplication.

DOD has also established timeliness standards for case initiation and processing. All servicemembers must be referred for evaluation within one year of the diagnosis of their condition if they are unable to return to duty. In addition, DOD allows 30 days to complete the MEB process and 40 days to complete the PEB process. GAO has found that DOD has not monitored compliance by the services with DOD directives on disability evaluation, or exercised oversight over the training of disability program staff. The Army Inspector General, in a recent inspection of the Army disability system, found that the Army was not meeting the DOD timeliness standards.

DOD/VA Disability Evaluation System Pilot

Section 1612 of the National Defense Authorization Act for Fiscal Year 2008 ( P.L. 110-181 ) required DOD and VA to report to Congress on the feasibility and advisability of consolidating the disability evaluation systems of the military departments and the disability evaluation system of the VA into a single disability evaluation system. Section 1644 of the same law authorized the Secretary of Defense to establish and conduct disability evaluation pilot programs.

In November 2007, DOD and VA entered in an agreement to initiate a joint Disability Evaluation System (DES) pilot program in the Washington, DC, National Capital Region to achieve a more streamlined disability evaluation and compensation process. A desired outcome was to close the gap that often occurred between separation from active duty and receipt of VA benefits and compensation. Under the pilot, the VA performs one medical exam that meets the needs of DOD in determining fitness for continued military service and also provides the basis for the VA to rate the servicemember's disabilities if he/she has been determined to be unfit by his/her service PEB. The VA determined disability rating, for the specifically military unfitting conditions, is used by DOD as the basis for determining eligibility for military retirement benefits. The DES pilot program involves a single rating system, which is the VA's scheduled disability system, and that is used throughout the process. Under the pilot program, the only thing DOD decides is whether a servicemember can remain on active duty. If so, the servicemember is put back on active duty. If not, the servicemember will go through the VA disability evaluation process.

In January 2009, DOD modified the pilot to include an expedited DES process The Secretary of Defense established a voluntary program that will expedite a servicemember through the DES. The expedited process applies to servicemembers whose conditions are designated as "catastrophic" and whose injuries were incurred in the line of duty as a direct result of armed conflict. A catastrophic injury or illness is a permanent, severely disabling injury, disorder, or disease that compromises the ability to carry out the activities of daily living to such a degree that a servicemember or veteran requires personal or mechanical assistance to leave home or bed, or requires constant supervision to avoid physical harm to self or others. Servicemembers who participate in the expedited process will be rated by DOD at a combined rating of 100%, and the VA will identify the full range of benefits, compensation and specialty care offered by the VA.

As of November 2009, approximately 5,431 servicemembers have participated in the pilot since November 2007. The pilot program is currently available at selected sites. In November 2009, DOD medical facilities at Fort Benning, GA; Fort Bragg, NC; Fort Hood, TX; Fort Lewis, WA; Fort Riley, KS; and Portsmouth Naval Medical Center, VA, were added to the 27 other military facilities taking part in the pilot. The pilot program is generally viewed as a success and it appears that it will eventually cover all of DOD. An interim evaluation was provided to Congress in November 2008, found that "preliminary indications are favorable."

SSA Outreach to Veterans34

Requirements for SSA disability programs differ significantly from those for DOD and VA, however, some veterans may still be eligible for additional financial assistance through DI and—to a lesser extent—SSI. To ensure servicemembers and veterans are aware of and apply for civilian financial assistance, SSA has partnered with DOD and VA to provide benefit information to individuals that have been injured or fallen ill while on active duty since 2001, also called wounded warriors. This population is primarily composed of servicemembers returning from the combat theaters of OIF and OEF.

GAO recently conducted a study detailing the outcome of these collaborative efforts and early results show promise. As of December 2008, approximately 7,600 wounded warriors had been approved for SSA benefits, out of at least 16,000 applicants. SSA has additionally made inroads on educating wounded warriors on SSA benefit options by establishing a website and distributing literature specifically tailored to them. With assistance from DOD and VA, SSA has also facilitated expedited processing by requiring offices to give priority to wounded warrior claims.

However, outreach efforts to wounded warriors have met with significant challenges, for example:

The effects and late-onset of some combat injuries including Traumatic Brain Injury (TBI) and Post-Traumatic Stress Disorder (PTSD) can cause a delay in a individual's ability or inclination to file for benefits. As a result, some servicemembers may forgo benefits due to period restrictions for retroactive payments in the DI program. A lack of consistent coordination between VA and SSA can lead to the spread of misinformation among veterans already hesitant to seek assistance. SSA attempts to expedite processing of wounded warrior claims are sometimes hampered by weeks and months-long delays in receiving servicemembers' paper-based medical records from DOD.

GAO proposed several recommendations to SSA, DOD, and VA outlining approaches to improve wounded warriors' access to SSA benefits. A review of these proposals are currently in process and entail: (1) a SSA legislative proposal to amend the retroactive benefit period for wounded warriors; (2) targeted outreach to particular sub-populations of wounded warriors; and (3) streamlining medical record transfers from DOD to SSA.

VA Disability Evaluation

In general, once DOD separates a servicemember from active military service, the servicemember becomes eligible to obtain various benefits administered by the VA. This section of the report provides information about the veterans disability evaluation process.

The veterans disability evaluation process begins with application for veterans' disability compensation payments. The VA disability rating determines the level of monthly disability compensation payments available to the veteran and his or her spouse and children. In addition, the priority system for veterans' health care services is based in part on the VA disability rating.

An application for disability compensation requires information related to the veteran's military service and medical condition. A veteran must have been in active service and be discharged under conditions other than dishonorable. The veteran must also have a current medical condition that is service-connected (i.e., in general, incurred as a result of, or aggravated by, active service).

For servicemembers who have been recently discharged from the military, the VA has access to DOD discharge data to determine veteran status, as well as access to military medical records. However, a veteran making an initial claim for disability compensation some years after discharge, or making a claim for an additional disability some time after an initial disability rating, may encounter more problems in providing the required documentation. For example, a veteran filing a claim for a disability 15 years after service may need to contact, or have the VA contact, several physicians who have treated the veteran for the medical condition over the period (15 years) since the veteran was discharged from the military. In addition, a veteran out of the military for a number of years may have to rely on the VA or DOD to conduct a search of stored paper documents for the needed discharge or medical documentation.

Once all of the documentation needed for the application is complete, a veteran may undergo a compensation and pension examination at a VA facility at the veteran's convenience (some examinations are done under contract outside of VA facilities). The compensation and pension examination is not a complete examination of all body systems and is not focused on diagnosis and treatment. The focus of the examination is the body system(s) covered by the veteran's claim for disability or pension and is designed to provide information specific to determining a disability rating. The information gathered during the examination is then reviewed by a ratings specialist using the Veterans Affairs Schedule for Rating Disabilities (VASRD) to determine the disability rating for the veteran. The VA ratings are done in increments of 10%, with a scale of 0% to 100%. The finding is then reviewed by a different rating specialist as a means of confirming the rating. A letter is sent to the veteran explaining the rating and the basis for the rating. The veteran has the right to appeal a rating determination.

The veteran's disability evaluation is based on the impact of the disability on civilian employability. The VASRD rating can be viewed as a measure of the average impact on civilian employment of the disability. However, the evaluation does not take into account a veteran's current earnings or potential future earnings in determining disability payments. The evaluation may take into account the individual unemployability of a veteran if the veteran claims that he or she cannot work as a result of the disability, or if the disability is of such a nature that there is a presumption of unemployability. The payment levels are established in law based on the disability percentage and whether the veteran has a spouse or dependents. An additional payment can be made, if needed, for aid and attendance.

Problems have been noted with the veterans disability evaluation process. Because the evaluation is done at the local level, the VA Inspector General has noted that there are unwarranted geographic variations in disability ratings. Also, GAO has recommended that the department do more monitoring with respect to the process, particularly of the regional medical centers reports, to ensure consistency in disability determinations.

The VA's claims process also has a large number of pending entitlement claims (at the end of 2008, there were 481,751 claims pending for compensation and pension benefits). Currently OIF/OEF servicemembers, particularly those recuperating in MTFs, are the VA's first priority in claims processing. The number of claims has increased significantly over the last decade, and the VA attributes the increase in claims to several factors, including (1) the large size of the military's active-duty force; (2) the aging of the veteran population; and (3) increases in the number and complexity of conditions claimed. The department has also expanded outreach efforts that have contributed to the increase in claims.

The Veterans' Benefits Improvements Act of 2008 ( P.L. 110-389 ) established an Advisory Committee on Disability Compensation within the VA. The Advisory Committee is responsible for advising the Secretary of the VA on revisions to the VASRD, including the effectiveness of the VASRD and providing advice to the Secretary on meeting the on-going needs of veterans for disability compensation in the future. The advisory committee has 18 members, and must provide biennial reports to the Secretary beginning no later than October 31, 2010, with copies to Congress within 90 days.

Appendix. Definitions of U.S. Military Servicemembers and Veterans48

Members of the U.S. Military Service

Federal statutes define various components of, and types of service in, the United States military—for those currently serving and for those discharged or released from service. This section provides a list of relevant definitions. Different services and benefits provided by the federal government (such as medical, educational, and financial) may be available to the servicemembers based upon the type of military service that the servicemembers provide or have provided.

Armed Forces

The term "armed forces" means the Army, Navy, Air Force, Marine Corps, and the Coast Guard.

Reserve Components

National Guard

"National Guard" means the Army National Guard and the Air National Guard.

Army National Guard

The term "Army National Guard" means that part of the organized militia of several states and territories, active and inactive, that is a land force, is trained and has its officers appointed under Article 1, § 8, cl. 16 of the Constitution, and is supported by federal funds and federally recognized. The Army National Guard is a state rather than a federal entity.

Army National Guard of the United States

The term "Army National Guard of the United States" means the reserve component of the Army, all of whose members are members of the Army National Guard.

Air National Guard

The term "Air National Guard" means that part of the organized militia of the several states and territories, active and inactive, that is an air force, is trained and has its officers appointed under Article 1, § 8, cl. 16 of the Constitution, and is supported by federal funds and federally recognized. The Air National Guard is a state rather than a federal entity.

Air National Guard of the United States

The term "Air National Guard of the United States" means the reserve component of the Air Force, all of whose members are members of the Air National Guard.

Reserve

The term "reserve," with respect to an enlistment, appointment, grade, or office, means enlistment, appointment, grade, or office held as a reserve of one of the armed forces.

Reserve Active-Status List

The term "reserve active-status list" means a single list for the Army, Navy, Air Force, or Marine Corps, respectively, that contains the names of all officers of that armed force except warrant officers who are in an active status in a reserve component and are not on an active-duty list.

Duty Status

Active Duty

The term "active duty" means full-time duty in the active military service of the United States. It includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.

Active Duty for a Period of More than 30 Days

The term "active duty for a period of more than 30 days" means active duty under a call or order that does not specify a period of 30 days or less.

Active Service

The term "active service" means service on active duty or full-time National Guard duty.

Active Status

The term "active status" means the status of a member of reserve component who is not in the inactive Army National Guard or inactive Air National Guard, on an inactive status list, or in the Retired Reserve.

Other Duty Status Definitions

Federal statutes define other duty statuses: " full-time National Guard duty ," " active Guard and Reserve Duty ," and " inactive-duty training ."

Discharge from the Miliary: Classification and Status

The servicemember usually leaves the United States military service at the time of his or her discharge or release from military service. At that time, the servicemember's status changes, and his or her eligibility for various benefits and services may change.

Concept of "Veteran"

Not all discharged service members are considered " veterans " for the purposes of Veterans Affairs benefits and programs. It should also be considered that services and benefits provided to a servicemember during his or her military service may not be available after his or her discharge.

To be eligible for most VA benefits, it is necessary for the discharged servicemember to be classified as a "veteran," or in some circumstances, the survivor or the dependent of a veteran. It should also be considered that available benefits may vary for "veterans" and for fully retired members of the armed services.

Definition of "Veteran"

Within the context of the VA, a "veteran" is defined as a "person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable." The VA largely bases its determination of veteran status upon military department service records.

In addition to the member's service records, other factors affect his or her classification as a "veteran," and may affect future benefits. These include discharge criteria , a requirement of " active military, naval or air service ," whether the military service was during time of war , and the length of duty requirement .

After it has been proven that the discharged servicemember meets these criteria, he or she is considered to be a "veteran" who may be eligible for certain benefits relating to health care, education, and other services provided by the VA.