The VA must compare the
evidence it relied on in its most recent decision to continue the 100 percent
evaluation with the evidence it intends to rely upon to reduce the 100 percent
evaluation.437 In Karnas v. Derwinski,438 the CAVC ruled that if there has been
no improvement at all since the date of the last examination continuing the 100
percent rating, a reduction is prohibited. In deciding whether there has been
improvement in the veteran's condition, the CAVC has held that the VA may look
at both medical and nonmedical evidence to determine whether a veteran's
condition has materially improved.439
**Advocacy Tip** In some
instances, the evidence reveals some improvement in the service-connected
disability. If this is the case, advocates are advised to compare the most
recent evidence with the earlier evidence used to continue or establish the 100
percent evaluation. If feasible, the advocate should argue that there has been
no improvement. Alternatively, the advocate should argue that even though there
has been some improvement in the service-connected condition, this is not
significant enough to constitute "material improvement" because some improvement
does not constitute "material improvement."
The regulations also
preclude a reduction unless the improvement was attained "under the ordinary
conditions of life, i.e., while working or actively seeking work."440 A private
medical opinion stating that the claimant has not medically improved since the
100 percent evaluation was assigned or continued can be crucial in these cases.
A common tactical advocacy error is to argue that the severity of the veteran's
service-connected condition still meets the definition of 100 percent in the
rating schedule. However, as stated earlier, the issue is not what percentage
evaluation the current symptomatology warrants but whether the service-connected
condition has materially improved. Therefore, advocates should refer to the
rating schedule but not rely on it exclusively.
Even if the VA is justified
in reducing a total rating after applying the rating reduction rules described
above, an additional rule applies that may result in the preservation of the
veteran's entitlement to benefits at the total rating level. If the VA
determines that a reduction in a total schedular rating (100 percent) is
warranted, but the record reflects that the veteran is unable to engage in
substantial gainful employment by virtue of his or her service-connected
disability, the veteran must be awarded a total (100 percent) rating based on
the individual unemployability (IU) provisions of 38 C.F.R. § 4.16.441
Moreover, once a veteran is in receipt of benefits at the total rating level
based on IU, the VA may not reduce the benefits unless "clear and convincing
evidence" establishes that the veteran is capable of "actual employability."442
432. See Dofflemyer, 2 Vet.
App. at 280 ("There is no question that a disability rating may be reduced;
however, the circumstances under which rating reductions can occur are
specifically limited and carefully circumscribed by regulations promulgated by
433. See Hayes v. Brown, 9
Vet. App. 67, 73 (1996); Kitchens v. Brown, 7 Vet. App. 320, 325 (1995); Brown
v. Brown, 5 Vet. App. 413, 421 (1993).
434. See Dofflemyer v.
Derwinski, 2 Vet. App. 277, 279-80 (1992) ("The BVA incorrectly phrased the
issue in terms of whether appellant was entitled to an increased rating; in fact
and in law, the issue presented to the BVA, and to this Court, is not whether
the veteran was entitled to an increase but whether the reduction of appellant's
rating from 100% to 10% was proper."); Peyton v. Derwinski, 1 Vet. App. 282, 286
(1991) ("This is a rating reduction case, not a rating increase case").
435. 38 C.F.R. § 3.343(a)
436.38 C.F.R. § 3.343(a)
(2002). Temporary 100% ratings are not subject to the general rule established
by 38 C.F.R. § 3.343(a) that reductions of a total rating be based on "material
improvement." See 38 C.F.R. §§ 4.28, 4.29, 4.30 (2002) (regulations governing
prestabilization ratings and total ratings assigned because the veteran is
hospitalized or convalescing).
437. See Ternus v. Brown, 6
Vet. App. 370, 376 (1994); Dofflemyer, 2 Vet. App. at 280; Hohol v. Derwinski, 2
Vet. App. 169, 173 (1992).
438.1 Vet. App. 308 (1991).
439. Faust v. West, 13 Vet.
App. 342, 349-50 (2000).
440. 38 C.F.R. § 3.343(a)
(2002); see Ternus, 6 Vet. App. at 376; Dofflemyer, 2 Vet. App. at 280; Hohol, 2
Vet. App. at 173; Karnas, 1 Vet. App. at 308.
441. Hohol, 2 Vet. App.
169, 173 (1992); Gleicher v. Derwinski, 2 Vet. App. 26, 28 (1991); Karnas, 1
Vet. App. at 311; see also Manual M21-1, Part VI, ¶ 9.03(l).
442. 38 C.F.R. § 3.343(c)
(2002). See Faust, 13 Vet. App. at 356. In that case, the CAVC held that
evidence that indicates that a veteran is engaged in substantial gainful
employment establishes that the veteran is capable of "actual employability."
Id. The Court then adopted a definition for the term substantial gainful
employment for the purposes of determining whether the veteran was capable of
"actual employability." The Court concluded that substantial gainful employment
must be employment that is more than marginal. The Court determined that
substantial gainful employment is "[an occupation] that provides annual income
that exceeds the poverty threshold for one person, irrespective of the number of
hours or days that the veteran actually works and without regard to the
veteran's earned annual income prior to his having being awarded a 100% rating
based on individual unemployability." Id.; Olson v. Brown, 5 Vet. App. 430, 434
5.9.3 The Requirement of
Sustained Improvement to Reduce a Rating Level That Has Been in Effect for Five
or More Years
Any rating evaluation that
has "stabilized," that is, "continued for [a] long period at the same level (5
years or more),"443 whether it is at the 10 percent or 100 percent level, may
not be reduced unless all the evidence of record shows sustained improvement in
Because 38 C.F.R. §
3.344(a) requires that "all the evidence of record" must support the conclusion
that sustained improvement in the disability has occurred, the VA cannot view
the single examination upon which the reduction is proposed "in isolation from
the rest of the record."445 In other words, the entire medical history of the
disability must always be considered in conjunction with any rating examination
upon which a reduction is proposed.446 In Schafrath v. Derwinski, the court
explained the purpose of this rule as follows:
These requirements for
evaluation of the complete medical history of the claimant's condition operate
to protect claimants against adverse decisions based on a single, incomplete or
inaccurate report and to enable VA to make a more precise evaluation of the
level of the disability and of any changes in the condition. These
considerations are especially strong in a ratings reduction case.447
It is precisely because a
disability is stabilized that the VA must take care when proposing to reduce the
rating evaluation assigned to it. Because "such disabilities are considered
‘stabilized,' . . . the regulation thus requires a high degree of accuracy in
decisions reducing those ratings."448
There are several other
rules the VA must follow before reducing a rating that has been in effect for
five years or more. The VA must review "the entire record of examinations and
the medical-industrial history . . . to ascertain whether the recent examination
[which the VA is relying upon to reduce the rating] is full and complete."449
Any examination that is less full and complete than that on which payments were
authorized or continued, may not be used as a basis of reduction.450 If the
disability is subject to temporary and episodic improvement, it will not be
reduced on any one examination, except in those circumstances in which all the
evidence of record "clearly warrants the conclusion that sustained improvement
has been demonstrated."451 Even though material improvement in the physical or
mental condition is clearly demonstrated, the VA "will [ consider] whether the
evidence makes it reasonably certain that the improvement will be maintained
under the ordinary conditions of life."452
443. 38 C.F.R. § 3.344(c)
444. Id. § 3.344(a).
445. Schafrath v.
Derwinski, 1 Vet. App. 589, 594 (1991).
446. Id.; see also Brown, 5
Vet. App. at 421.
449. Brown, 5 Vet. App. at
419 (citing 38 C.F.R. § 3.344(a)).
450. 38 C.F.R. § 3.344(a);
see also Brown, 5 Vet. App. at 419.
451. 38 C.F.R. § 3.344(a);
see also Brown, 5 Vet. App. at 419.
452. 38 C.F.R. § 3.344(a);
see also Brown, 5 Vet. App. at 419
5.9.4 Rating Reduction in
Unprotected Cases (Cases Involving Disabilities Where the Veteran Does Not Have
Either a Total Disability or a Disability Rating That Has Been in Effect for
Five Years or More)
Although the protections
discussed above in Sections 5.9.2 and 5.9.3 are limited to total (100%)
disabilities and disabilities where the rating has been in effect for five years
or more,453 the advocate may still wish to argue that other VA regulations and
substantive rules protect a disability rating from being reduced. In Faust v.
West,454 the CAVC made clear that the VA is required to comply with several
general VA regulations regardless of the rating level or the length of time that
the rating has been in effect. For example:
proposed reduction must be based upon review of the entire history of the
· The VA must
determine whether there has been an actual change in the disability;
improvement must reflect an improvement in the veteran's ability to function
under the ordinary conditions of life and work; and
reports reflecting any such change must be based on thorough examinations.
**Advocacy Tip** The
following argument includes boilerplate language that an advocate may wish to
use in such a case.
VA regulations impose a
duty on the VA to make an explicit finding that the preponderance of evidence
shows that there has been improvement in any disability rating that the VA
proposes to reduce. Specifically, 38 C.F.R. § 4.1 (2002) states that "[i]t is .
. . essential, both in the examination and in the evaluation of the disability,
that each disability be viewed in relation to its history." Similarly, 38
C.F.R. § 4.2 (2002) establishes 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." These
provisions impose a clear requirement that VA rating reductions, as with all VA
rating decisions, be based upon review of the entire history of the veteran's
disability. . . . Furthermore, 38 C.F.R. 4.13 (2002) provides: "When any change
in evaluation is to be made, the rating agency should assure itself that there
has been an actual change in the condition, for better or worse, and not merely
a difference in the thoroughness of the examination or in use of descriptive
Pursuant to these
provisions, it is obvious that in any rating-reduction case, the RO and BVA are
required to ascertain, based upon review of the entire recorded history of the
condition, whether the evidence reflects an actual change in the disability and
whether the examination reports reflecting such change are based upon thorough
Thus, the VA is required to
review the entire evidence of record and to determine and make an explicit
finding as to whether the evidence shows that there is an actual improvement in
a veteran's disability since the last rating decision which either granted or
continued the disability rating before the VA may reduce the disability rating.
In addition to these VA
regulations, the Manual M21-1, Part VI, paras. 9.03(a) and (f) requires the VA
to make findings that the evidence demonstrates improvement before a rating
reduction is made. It states the following:
Reasons And Bases. An
examination which is the basis for reduction must be as thorough as the
examination which established the current rating. Cite the symptoms and the
findings demonstrating improvement in the context of the whole recorded history
and evidence of improved ability to function under the ordinary conditions of
life and work.. [sic] In psychiatric cases, outline social and economic
adjustments along with the other evidence warranting the reduced evaluation. . .
Thus, the Manual M21-1 also
requires a finding of improvement before a reduction is made in an ongoing
disability rating. Therefore, the VA may not lawfully reduce a disability rating
unless it addresses whether the condition has actually improved since the time
it was either granted or continued.
453. See Smith (Raymond L.)
v. Brown, 5 Vet. App. 335, 339 (1993).
454. 13 Vet. App. 342, 349
455. Brown (Kevin), 5 Vet.
App. at 420-21. See also Lehman, 1 Vet. App. at 342-43 (finding that the Board
violated 38 C.F.R. §§ 4.1, 4.2 where the Board relied upon one medical report
which drastically differed from all other evidence of record without reconciling
5.9.5 Protection against
Reductions Based on Revision of the Schedule for Rating Disabilities
The VA is required by
statute to readjust the Schedule for Rating Disabilities "from time to time . .
. in accordance with experience."456 However, this statute also requires that
"in no event shall such a readjustment . . . cause a veteran's disability rating
in effect on the effective date of the readjustment to be reduced unless an
improvement in the veteran's disability is shown to have occurred."457
The VA's application of
this requirement, made binding by a precedent opinion of the VA general counsel,
is that it must continue to apply the old rating criteria to a veteran's
disability if application of new rating criteria would cause the veteran's
rating level to be reduced.458 Therefore, if an examination reveals any
improvement in a veteran's condition, and application of the new rating criteria
would result in a reduction in the veteran's disability rating, before reducing
the rating the VA must also apply and consider the old rating criteria. If
application of the old rating criteria would not result in a reduction of the
rating, the rating may not be reduced.459 However, the VA General Counsel has
held that "when an improvement in a disability sufficient to warrant a reduction
under the old criteria occurs. . . the new rating criteria should be applied.
The new criteria should be applied, even in cases where their application will
result in a rating reduction greater than would result from application of the
old rating criteria."460
456. 38 U.S.C.S. § 1155.
458.VA Gen. Coun. Prec.
19-92 (September 29, 1992).
459.Id. at 5.
5.9.6 The Remedy for
Violation of the Rules Regulating Reductions in Disability Ratings Is
Reinstatement of the Rating
A reduction of a veteran's
rating generally may not be valid if the VA fails to comply with the rating
reduction rules described above. The CAVC has held that rating reductions made
"without observance of law" require reinstatement of the rating.461 The court
reasons that the original reduction decision in such cases is "void" from the
start (void ab initio) because of the VA's failure to follow the requirements
that control rating reductions.462 Because the veteran "should not be subjected
to the effects of an unlawful rating reduction," such a "reduction must be
vacated and the prior rating restored."463 However, in Faust v. West,464 the
Court recently affirmed a rating reduction in a case even though the Court found
that the BVA had reduced the veteran's 100 percent disability rating for a
psychiatric condition without applying pertinent regulations. The Court reasoned
that the BVA's failure to explicitly discuss relevant rating reduction
regulations was harmless error because the Board's decision contained findings
that essentially met the criteria of the regulations and there was overwhelming
evidence to indicate that the veteran's disability rating was properly
461. See Greyzck v. West,
12 Vet. App. 288, 292 (1999); Kitchens v. Brown, 7 Vet. App. 320, 325 (1995);
Murincsak v. Derwinski, 2 Vet. App. 363, 369 (1992); Schafrath, 1 Vet. App. at
596 (1991); Dofflemyer, 2 Vet. App. at 282; Hohol, 2 Vet. App. at 173;
Schafrath, 1 Vet. App. at 595-96; Lehman, 1 Vet. App. at 342.
462. Dofflemyer, 2 Vet.
App. at 282; Schafrath, 1 Vet. App. at 596.
463. Schafrath, 1 Vet. App.
at 596; see also Hayes, 9 Vet. App. at 73; Kitchens, 7 Vet. App. at 325; Brown,
5 Vet. App. at 422.
464. 13 Vet. App. 342
465. Id. at 352-53.
5.9.7 The Process by Which
Running Awards of Compensation Are Reduced or Terminated
Special due process
protections apply in cases where the VA proposes to reduce or terminate running
awards of disability compensation. First, a claimant facing such a reduction or
termination must be given prior notice of the proposed adverse action.466 The
notice must be specific enough to satisfy the regular notice of decision
requirements.467 Moreover, the claimant must then be given at least sixty days
after the notice within which to "submit evidence for the purpose of showing
that the adverse action should not be taken."468 If the claimant does not submit
evidence within the sixty-day period, a final rating decision will be
prepared.469 The veteran is notified of the final rating decision and the award
of benefits will be reduced or discontinued.470 A new 60-day period begins from
the date of the final decision. The reduction or severance goes into effect on
the last day of the month on which the new 60-day period expires.471
There are a few important
exceptions to the prereduction or predetermination notice requirement.472
According to a precedent opinion of the VA general counsel, the VA is not
obligated to comply with the advance notice requirements set out at 38 C.F.R. §
3.105(e) when proposing to reduce a compensation award if the actual amount of
compensation paid is not reduced as a result of the proposed rating
reduction.473 In addition, if the claimant provides oral or written statements
or information that are factual, and contain unambiguous information about
income, net worth, dependency, or marital status with knowledge or notice that
the information would be used to calculate benefits, no prior notice is
required.474 Instead, the VA must only give contemporaneous notice of the
reduction or termination.475 Also, contemporaneous, rather than prior, notice of
an adverse decision is permitted if evidence "reasonably indicates that a
claimant is deceased."476
protection in cases where the VA proposes a reduction or termination of a
running award of compensation is the claimant's right to a predetermination
hearing.477 The hearing must be requested within thirty days from the date of
the notice of the proposed adverse action.478 The regulation providing for the
predetermination hearing specifies that the "hearing will be conducted by VA
personnel who did not participate in the proposed adverse action."479 If a
claimant requests a hearing within the thirty-day period, the proposed decision
will not be implemented, if at all, until after the hearing takes place and the
VA considers the evidence presented or developed as a result of the hearing and
issues "a final determination concerning the proposed action."480
A benefit of asking for a
hearing within the thirty-day period is that implementation of any reduction or
termination of benefits is delayed. In compensation cases, the adverse action
will never be implemented until at least sixty days after notice of the final
action is sent to the claimant.481 Thus, a claimant requesting a hearing can buy
at least two months of benefits at the level in effect at the time of the
**Advocacy Tip** Claimants
faced with a proposed reduction or termination of a running award of
compensation should always ask for a hearing within thirty days of the date of
the notice of the proposed decision. This request will work to prevent
implementation of the reduction or termination for the longest possible period,
because the adverse action will not be final until after the hearing.
The Veterans Claims
Assistance Act of 2000 (VCAA or Act), which was signed into law on November 9,
2000, should impact the type of notice that is sent to claimants when the VA
proposes to reduce the veteran's disability. The VCAA requires the VA to notify
all claimants and their representatives of "any information, and any medical or
lay evidence, not previously provided to the Secretary that is necessary to
substantiate the claim." In addition, the VA is required to explain to the
claimant what evidence the claimant must obtain and what evidence the VA will
attempt to obtain. Therefore, when the VA proposes to reduce a disability
rating, the notice required by the VCAA should include advice as to the type of
evidence both medical and lay evidence that the veteran should submit to avoid a
reduction in the disability rating.
466. 38 C.F.R. §§
3.103(b)(2), 3.105(e) (2002); see also Manual M21-1, Part VI, chapter 9 (due
process procedures for reductions and severance of service connection).
467. 38 U.S.C.S. § 5104;
38 C.F.R. § 3.103(b)(2) (2002).
468. Id. See also 38 C.F.R.
§§ 3.103(b)(2), 3.105(d),(f) (2002).
469. 38 C.F.R. §§ 3.105(d),
471. Id. §§ 3.105(d)(e).
472. Id. § 3.103(b)(3).
473. VA Gen. Coun. Prec.
71-91 (November 7, 1991). In the particular case that produced this VA general
counsel opinion, the claimant's compensation payment at the 100 percent level
was unaffected even though his rating for residuals of gunshot wounds was
reduced from 20 percent to 0 percent. This result occurred because another of
the claimant's disability ratings was increased from 70 percent to 100 percent,
thus leaving the overall amount of compensation paid to him unaffected.
474. VA regulations specify
the procedures that the VA is to follow when it receives oral information from a
claimant. See 38 C.F.R. § 3.217(b)(2002). The VA may not take action based on
oral information or statements unless the VA employee receiving the information
follows certain procedures. For example, during the conversation with the
claimant, the VA employee must identify himself or herself to the claimant as a
VA employee who is authorized to take the action. The VA employee must verify
the identity of the claimant by obtaining information that can be verified from
the claimant's VA records such as social security number, date of birth, branch
of military service, or dates of military service. 38 C.F.R. §§ 3.217(b)(1)(i)
and (ii)(2002). The VA employee must inform the claimant that the information or
statement will be used for calculating benefits. 38 C.F.R. §
3.217(b)(1)(iii)(2002). Finally, the VA employee must document the conversation
in the claimant's VA records by recording the specific information or statement
that was provided, the date that statement or information was provided, the
identity of the claimant or person who provided the information, the steps taken
to verify the identity of the claimant, and that the VA employee advised the
claimant that the information would be used for purposes of calculating benefit
amounts. 38 C.F.R. § 3.217(b)(2)(2002).
475. 38 C.F.R. §
476. Id. §
477. Id. § 3.105(i).
481. Id. § 3.105(h)(2)(i).