Order Code RL33991
Disability Evaluation of Military Servicemembers
May 7, 2007
Christine Scott, Sidath Viranga Panangala, and Sarah A. Lister
Domestic Social Policy Division
Charles A. Henning
Foreign Affairs, Defense, and Trade Division

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Disability Evaluation of Military Servicemembers
Summary
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). The series noted, among other
things, concerns about the processes used to evaluate disability in injured military
servicemembers. Both the Department of Defense (DOD) and the Department of
Veterans Affairs (VA) conduct disability evaluations and assign disability ratings to
servicemembers or veterans under their respective authorities. An individual’s
disability rating, from either department, affects the scope of pay and benefits for
which he or she is eligible, and the cost to the respective department of providing
such benefits.
There are significant differences between the disability evaluations performed
by DOD and VA, as well as civilian disability evaluations conducted by the Social
Security Administration (SSA) and workers’ compensation programs. Most notably,
the DOD disability evaluation is focused on the effect of any disabling condition on
the performance of the servicemember’s duties in the military, while the other three
systems evaluate an individual’s prospects for gainful employment in the civilian
economy.
Congress has followed recent news reports with interest, and several legislative
initiatives are under consideration. For example, H.R. 1538, the Wounded Warrior
Assistance Act of 2007, passed unanimously in the House on March 28, 2007. The
bill includes numerous provisions to improve or streamline medical care and benefits
processing for returning injured servicemembers.
This report is intended as a primer to describe disability evaluation in general,
including evaluations used by DOD and VA, as well as civilian evaluations used by
the SSA and by workers’ compensation programs. Next, the DOD and VA disability
rating processes are described, respectively, in greater detail. Finally, recent
congressional and executive actions and recommendations regarding DOD and VA
disability evaluations are described. This report emphasizes the disability evaluation
systems at DOD and VA, with illustrative comparisons made to civilian systems
when appropriate. It will be updated as warranted.

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Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of Disability Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Department of Defense (DOD) Disability Evaluation . . . . . . . . . . . . . . . . . . 4
Department of Veterans Affairs (VA) Disability Evaluation . . . . . . . . . . . . . 5
Social Security Administration (SSA) Disability Evaluation . . . . . . . . . . . . 6
Workers’ Compensation (WC) Disability Evaluation . . . . . . . . . . . . . . . . . . 6
The DOD Physical Disability Evaluation System . . . . . . . . . . . . . . . . . . . . . . . . . 8
Initial Medical Treatment of Injured Servicemembers . . . . . . . . . . . . . . . . . 8
Steps in the Disability Evaluation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Medical Evaluation Board (MEB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Physical Evaluation Board (PEB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Assistance to Servicemembers During Disability Evaluation . . . . . . . 11
Outcomes of the DOD Disability Process . . . . . . . . . . . . . . . . . . . . . . 11
Issues of Timely and Consistent Processing . . . . . . . . . . . . . . . . . . . . 13
VA Disability Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Recent Congressional and Executive Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Appendix. Definitions of U.S. Military Servicemembers and Veterans . . . . . . . 18
Members of the U.S. Military Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Armed Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Reserve Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Duty Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Discharge from the Miliary: Classification and Status . . . . . . . . . . . . . . . . 20
Concept of “Veteran” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Definition of “Veteran” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
List of Figures
Figure 1. Steps in the DOD Physical Disability Evaluation System . . . . . . . . . . 10

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Disability Evaluation of
Military Servicemembers
Background
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).1 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 Iraq and Afghanistan 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.2
Recent 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,
1 Dana Priest and Anne Hull, “Soldiers Face Neglect, Frustration at Army’s Top Medical
Facility,” Washington Post, February 18, 2007.
2 Among other discrepancies, several news reports mistakenly referred to soldiers at
WRAMC as “veterans.” For example, on February 20, 2007, The Seattle Times reprinted
the second article in The Washington Post series, describing conditions at Mologne House
on the WRAMC campus, under the headline “Injured Vets Now Battle for Benefits.” See
the first of two text boxes in this report for a definition of “veteran.”

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in particular, their complexity, do appear to have strained the capacity of the
disability evaluation systems in the two departments.3
When Is a Discharged Servicemember Classified as
a “Veteran” for the Purposes of VA Benefits?
Not all discharged servicemembers are considered “veterans” for the purposes of
Veterans Administration (VA) benefits and programs. In order 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 of a veteran.
Federal statutes define “veteran” 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.” [38 U.S.C. § 101(2); 38 C.F.R. § 3.1(d)].
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
factors include:
Discharge criteria: (38 U.S.C. § 101(2); 38 C.F.R. § 3.1(d)).
Active military, naval or air service: (38 U.S.C. § 101(2); 38 C.F.R. § 3.1(d)).
Whether the service was during “time of war:” (38 U.S.C. § 101(6)-(11); 38 C.F.R. § 3.2).
Length of duty requirement: (38 U.S.C. § 101(6)-(11); 38 C.F.R. § 3.2).
After it has been proved that the discharged servicemember meets these criteria,
he or she is considered to be a “veteran,” and may be eligible for certain benefits
relating to health care, education, and other services provided by the VA.
See the Appendix for definitions of U.S. military servicemembers and veterans.
(Information provided by Douglas Reid Weimer, Legislative Attorney, American
Law Division, CRS.)
3 In the DOD, 11% of disability evaluations involve personnel injured in war, while 89% are
career servicemembers transitioning to retirement. See the testimony of Gordon R. England,
Deputy Secretary of Defense, before a joint hearing of the Senate Committees on Armed
Forces and Veterans’ Affairs on the DOD and VA disability rating systems and the
transition of servicemembers from the DOD to veteran status, April 12, 2007, at
[http://armed-services.senate.gov/e_witnesslist.cfm?id=2690]. In the VA, 54% of all claims
are claims reopened for worsening of chronic conditions. See the testimony of Ronald R.
Aument, Deputy Under Secretary for Benefits, Department of Veterans Affairs, U.S.
Congress, House Committee on Veterans Affairs, Hearing on the Impact of OEF/OIF on the
VA Claims Process, Statement, March 13, 2007, at [http://www.va.gov/OCA/testimony/
hvac/sdama/070313RA.asp].

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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 20% or greater provides eligibility for
vocational rehabilitation benefits, and of 30% or greater, eligibility for additional
disability compensation for spouse and dependents. (The amount depends on the
disability percentage.) Unlike the DOD disability evaluation, VA ratings may be
subject to periodic reevaluation.
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. Finally,
recent congressional and executive branch actions and recommendations regarding
military disability evaluation are described. 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 final
section of this report, “Recent Congressional and Executive Actions.”) 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.

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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.4
Department of Defense (DOD) 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 Retired Disability List (TRDL, 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.5 DOD and VA use the same rating table, the
Veterans Administration 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 service
member 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.
4 Government Accountability Office (GAO), “Modernizing Federal Disability Programs,”
in High Risk Series: An Update, GAO-07-310, p. 83, January 31, 2007.
5 Each individual condition must, independently of the others, result in unfitness for duty.

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The Veterans Administration Schedule for Rating Disabilities
(VASRD)
A schedule of ratings was first attempted (and soon abandoned) in 1924, with
ratings in 1% increments. Two editions of a ratings schedule were published in
1933, with different levels or grades of disability (the first had 25%, 50%, 75%,
and 100%, while the second had 10 grades from 10% to 100%). The current basic
schedule is the 1945 Schedule for Rating Disabilities, which was reprinted in
1957. When several laws related to veterans were combined in 1958 by P.L.
85-857, which created the Veterans Administration, the Administrator was given
the authority to develop a schedule of ratings for disability, and to periodically
update the schedule based on experience. The VASRD last underwent a thorough
review and revision for all body systems in the early 1990s (revisions for 11 of the
15 body systems were finalized as of April 2007).
The VASRD is contained in 38 C.F.R. Chapter 1, Part 4. While some sections are
descriptive of the injury and the ratings, others are schedules. For example, for
removal of ribs (diagnostic code 5297), the scheduled rating percentage is as
follows:
! More than six: 50%
! Five or six: 40%
! Three or four: 30%
! Two: 20%

! One, or resection of two or more ribs without regeneration:
10%
Department of Veterans Affairs (VA) 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.6 The
DOD’s central consideration in disability evaluation, i.e., 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.7 The resulting disability
percentage rating (based on the VASRD) determines the level of disability benefits
6 For more information on eligibility, see CRS Report RL33113, Veterans Affairs: Basic
Eligibility for Disability Benefit Programs, by Douglas Reid Weimer.
7 For more information on the disability process, see CRS Report RL33323, Veterans
Affairs: Benefits for Service-Connected Disabilities, by Douglas Reid Weimer.

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received by the veteran, and also plays a role in determining the veteran’s position
in the priority system for VA medical care. In order to receive disability
compensation, an individual must be rated at least 10% disabled.8 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 (SSA) Disability Evaluation9
The Social Security Administration (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.10 In order 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.11
Workers’ Compensation (WC) Disability Evaluation12
Workers’ compensation (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 (66 and two-
8 A veteran can receive a 0% rating for a service-connected disability.
9 This section was prepared by Scott Szymendera, Analyst in Social Security, Domestic
Social Policy Division, CRS.
10 For more information on the SSDI and SSI programs, see CRS Report RL32279, Primer
on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental
Security Income (SSI), by Scott Szymendera.
11 For 2007, the monthly federal SSI benefit is $623 for an individual and $934 for a couple;
44 states and the District of Columbia offer a state supplement to some SSI benefits.
12 This section was prepared by Edward Rappaport, Analyst in Industry Economics and
Finance, Domestic Social Policy Division, CRS.

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thirds percent, in most cases) to be paid during periods of work-related total, but not
necessarily permanent, disability.13 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.14 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.15
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.
13 Workers compensation payments are tax-exempt.
14 Maximal medical improvement is the greatest degree of cure likely to be achieved with
further medical services.
15 Reville, Robert T. et al., An Evaluation of California’s Permanent Disability Rating
System, Appendix A, Santa Monica CA, RAND Corp, Institute for Civil Justice, 2005, at
[http://www.rand.org/pubs/monographs/2005/RAND_MG258.pdf].

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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.16
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.17 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, Maryland. Catastrophic burn patients are flown to the Brooke
Army Medical Center (BAMC) at Fort Sam Houston, Texas. 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
16 In five states (CA, HI, NJ, NY, RI) and Puerto Rico, employers are required to provide a
non-work-related disability benefit, in most cases covering up to a half-year or year of
disability.
17 Joachim J. Tenuta, “From the Battlefields to the States: The Road to Recovery. The Role
of Landstuhl Regional Medical Center in US Military Casualty Care,” Journal of the
American Academy of Orthopedic Surgeons, vol. 14, (2006), S45-S47.

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working in their assigned unit during recovery and rehabilitation are placed on
“Medical Hold” status.18
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.19 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.20 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.
18 See, for example, Army regulation 40-400, “Medical Services: Patient Administration.”
Reserve component personnel who have an illness or injury that prevents their deployment
or return to duty with their unit are placed on “medical holdover” status.
19 Department of Defense Directive 6130.3, Physical Standards for Appointment, Enlistment
and Induction, May 2, 1994.
20 Department of Defense Directive 1332.18, Separation or Retirement for Physical
Disability, November 4, 1996 (certified current as of December 1, 2003), at [http://www.
dtic.mil/whs/directives/corres/pdf/133218p.pdf].

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Figure 1. Steps in the DOD Physical
Disability Evaluation System
Note: The DOD Physical Disability Evaluation System also includes an appeals process, not depicted
in this figure.
Source: Adapted from GAO, Military Disability System: Improved Oversight Needed to Ensure
Consistent and Timely Outcomes for Reserve and Active Duty Service Members, GAO-06-362, p. 7,
March 31, 2006, derived from DOD documents.
Medical Evaluation Board (MEB). 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 Physical Evaluation Board (PEB) for disability
rating and retention or separation decisions.

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Physical Evaluation Board (PEB). 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 recently 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.21 Assistance is also available from new programs
established by DOD and the services to support severely disabled OIF/OEF
servicemembers.22
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.
21 GAO, Military Disability System: Improved Oversight Needed to Ensure Consistent and
Timely Outcomes for Reserve and Active Duty Service Members, GAO-06-362, March 31,
2006.
22 See CRS Report RS22366, Military Support to the Severely Disabled: Overview of
Service Programs, by Charles A. Henning.

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CRS-12
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 (TDRL).
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.23
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.24
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.
23 See CRS Report RL33449, Military Retirement, Concurrent Receipt, and Related Major
Legislative Issues, by Charles A. Henning.
24 Ibid.

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CRS-13
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.”25 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.26 The Army Inspector General, in a recent inspection of
the Army disability system, found that the Army was not meeting the DOD
timeliness standards.27
VA Disability Evaluation
In general, once DOD separates a servicemember from active military service,28
the servicemember becomes eligible to obtain various benefits administered by the
VA.29 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
25 DOD Instruction 1332.38, Physical Disability Evaluation, July 10, 2006.
26 GAO, Military Disability System: Improved Oversight Needed to Ensure Consistent and
Timely Outcomes for Reserve and Active Duty Service Members, GAO-06-362, March 31,
2006.
27 U.S. Army, “Army Inspector General Details Findings on Soldier Disability System,”
press release with link to full report, March 12, 2007, at [http://www.army.mil/news/
jumparchive/newsreleases/].
28 A veteran (former servicemember) has received a DD 214 (Certificate of Release or
Discharge from Active Duty) form.
29 See CRS Report RL33985, Veterans’ Benefits: Issues in the 110th Congress, by Carol
D. Davis, Shannon S. Loane, Meredith Peterson, Christine Scott, Charmaine Mercer, Libby
Perl, and Douglas Reid Weimer.

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CRS-14
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).30
For servicemembers who have been 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
documentation.
Once all of the documentation needed for the application is complete, a veteran
may be asked to undergo a medical examination at a VA facility at the veteran’s
convenience (a small number of examinations are done under contract outside of VA
facilities). This is common for veterans not receiving medical treatment at VA or
DOD medical facilities. The information gathered during the medical examination
is then reviewed by a ratings specialist using the Veterans Administration 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%.31 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.32
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
30 Lower-income wartime veterans who are elderly or have a nonservice-connected disability
may apply for a VA pension. The pension benefits are offset by income from other sources.
31 For more detail on the VA disability process, see CRS Report RL33323, Veterans Affairs:
Benefits for Service-Connected Disabilities, by Douglas Reid Weimer.
32 For information on the appeal process, see CRS Report RL33704, Veterans Affairs: The
Appeals Process for Veterans’ Claims, by Douglas Reid Weimer.

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CRS-15
that there are unwarranted geographic variations in disability ratings.33 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.34
The VA’s claims process also has a large backlog. Currently OIF/OEF
servicemembers, particularly those recuperating in MTFs, are the VA’s first priority
in claims processing.35 This may extend the processing time for claims by other
veterans. The size of the claims backlog is related to the increase in the number of
claims. According to the VA, the number of disability claims has increased from
578,773 in FY2000 to 806,382 in FY2006. The department 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.36
Recent Congressional and Executive Actions
Congress has followed recent news reports with interest, and several legislative
initiatives are under consideration. For example, H.R. 1538, the Wounded Warrior
Assistance Act of 2007, passed unanimously in the House on March 28, 2007. The
bill includes numerous provisions to improve or streamline medical care and benefits
processing for returning injured servicemembers. Several provisions address
disability evaluation. These include (1) a requirement that DOD standardize training
and caseload limits for staff who are involved in its disability evaluation system;37
(2) assurance of the availability of medical personnel to advise servicemembers who
are undergoing DOD disability evaluation; (3) criteria to clarify certain aspects of the
DOD disability evaluation; and (4) a joint DOD/VA study and report to Congress on
the disability evaluation systems used by each department, recommendations for
improvement, and the feasibility of consolidating the two systems.
33 Department of Veterans Affairs, Office of Inspector General, Review of State Variances
in VA Disability Compensation Payments, Report No. 05-00765-137, May 19, 2005.
34 Government Accountability Office, VA Disability Benefits, Routine Monitoring of
Disability Decisions Could Improve Consistency, GAO-06-120T, October 20, 2005.
35 Under the VA Benefits Delivery at Discharge program, the VA begins processing
servicemembers’ claims prior to separation from the military. See the statement of Daniel.
L. Cooper, Under Secretary for Benefits, Department of Veterans Affairs, before the Senate
Committee on Veterans’ Affairs, hearing on VA Claims Adjudication Process, March 7,
2007.
36 U.S. Congress, House Committee on Veterans Affairs, Hearing on the Impact of OEF/OIF
on the VA Claims Process, Statement of Ronald R. Aument, Deputy Under Secretary for
Benefits, Department of Veterans Affairs, March 13, 2007, at [http://www.va.gov/OCA/
testimony/hvac/sdama/070313RA.asp].
37 Currently, each of the services specifies its own training requirements.

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The Veterans’ Disability Benefits Commission, established by Congress in
2004, is charged with, among other things, evaluating the DOD and VA disability
evaluation and compensation systems.38 The commission anticipates issuing its final
report on October 1, 2007. Following the Washington Post series, the commission’s
Chairman, Retired Lieutenant General James Terry Scott, testified before Congress
regarding preliminary findings of the commission’s work. He noted that he was
testifying as an individual and not on behalf of the commission, and that the
commission had not reached conclusions at that time.39 Scott’s testimony included
preliminary data on outcomes of DOD and VA disability ratings, as well as
preliminary analyses of variations in ratings between services within DOD and
between DOD and VA ratings. Scott posited possible explanations for variations,
noting that the DOD services and the VA each tailor their disability evaluation
standards to different missions, and, consequently, comparability of ratings is not
necessarily expected. Scott also testified that the DOD has an incentive to assign
disability ratings at less than 30% because they avoid lifetime payment of benefits,
and made a number of recommendations, including a long-term realignment of
responsibilities in which the VA is responsible for rating the disability of injured
servicemembers.
In response to the news stories about WRAMC and other problems experienced
by returning servicemembers, Secretary of Defense Robert Gates formed an
Independent Review Group (IRG), established as a subcommittee of the Defense
Health Board, to review and, within 45 days, report upon and provide
recommendations regarding any critical shortcomings and opportunities to improve
rehabilitative care, administrative processes, and the quality of life of patients.40 The
IRG issued its final report on April 12, 2007.41 The report commented on the
complexity of the DOD Physical Disability Evaluation System and the widespread
perception that it is unfair to service personnel. The IRG recommended, among other
things, a statutory remedy that would, for all personnel, place DOD in charge of
fitness-for-duty determinations and VA in charge of disability assessments.42 On
May 2, 2005, Secretary Gates announced the formation of an internal oversight
38 The National Defense Authorization Act for FY2004, P.L. 108-136, 38 U.S.C. §1101 note.
See [http://www.vetscommission.org/index.asp].
39 Statement of Lieutenant General James Terry Scott, USA (Ret.), Chairman, Veterans’
Disability Benefits Commission, before a joint hearing of the Senate Committees on Armed
Forces and Veterans’ Affairs on the DOD and VA disability rating systems and the
transition of servicemembers from the DOD to veteran status, April 12, 2007, at
[http://armed-services.senate.gov/statemnt/2007/April/Scott%2004-12-07.pdf].
40 See [http://www.ha.osd.mil/DHB/default.cfm]. Secretary Gates also established a DOD
website to provide a centralized location for news articles pertaining to health care problems
at WRAMC. See [http://www.defenselink.mil/home/features/2007/walter_reed/].
41 Independent Review Group on Rehabilitative Care and Administrative Processes at Walter
Reed Army Medical Center and National Naval Medical Center, Rebuilding the Trust, April
2007, at [http://www.ha.osd.mil/dhb/recommendations/2007/IRG-Report-Final.pdf].
42 Ibid, pp. 28-34.

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CRS-17
committee, chaired by Deputy Defense Secretary Gordon England, that will ensure
that recommendations of the Independent Review Group are implemented.43
On March 6, 2007, President George W. Bush directed VA Secretary Jim
Nicholson to establish an interagency task force on returning servicemembers to
examine the range of federal services available to these individuals, gaps in those
services, and possible corrective actions. The Task Force report was submitted to the
President on April 19, 2007.44 Among other recommendations, the Task Force
advised the development of a joint DOD/VA disability evaluation process.
Also on March 6, 2007, the President issued an executive order establishing the
President’s Commission on Care for America’s Returning Wounded Warriors.45 The
commission is charged, among other things, with evaluating the coordination,
management, and adequacy of disability benefits provided to returning injured
servicemembers by federal agencies, as well as by the private sector. The President
named former Senator Bob Dole and former Department of Health and Human
Services Secretary Donna Shalala to cochair the Commission.
On March 12, 2007, the U.S. Army Inspector General provided congressional
committees with a report on the Army Physical Disability Evaluation System,
detailing findings of military medical and personnel policies, procedures, and
services for injured soldiers.46 The inspection — which was requested by the
Secretary of the Army in April 2006 — found that policies varied between VA,
DOD, and Army regulations; that training for personnel assisting soldiers was not
standardized; and that current information-management databases were inadequate.
The report also noted that cases are often more complicated than in the past because
of the types of combat injuries soldiers now sustain, and found that because of this
and an increased patient volume, the Army currently does not meet its own
case-processing time standards or those of the DOD.
43 Fred W. Baker III, “Gates Puts Punch Behind Fixing Wounded Warrior Care,” American
Forces Press Service, May 2, 2007, at [http://www.defenselink.mil/news/newsarticle.aspx?
id=33033].
44 U.S. Department of Veterans Affairs, “Task Force Report to the President on Returning
Global War on Terror Heroes,” April 2007, at [http://www1.va.gov/taskforce/].
45 White House, “Executive Order: Establishing a Commission on Care for America’s
Returning Wounded Warriors and a Task Force on Returning Global War on Terror
Heroes,” press release, March 6, 2007.
46 U.S. Army, “Army Inspector General Details Findings on Soldier Disability System,”
press release with link to full report, March 12, 2007, at [http://www.army.mil/news/
jumparchive/newsreleases/].

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CRS-18
Appendix. Definitions of U.S. Military
Servicemembers and Veterans47
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.48
Reserve Components.49
National Guard. “National Guard” means the Army National Guard and the
Air National Guard.50
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.51
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.52 The Air
National Guard is a state rather than a federal entity.
47 Appendix prepared by Douglas Reid Weimer, Legislative Attorney, American Law
Division, CRS.
48 10 U.S.C. § 101(a)(4).
49 Ibid., § 101(c).
50 Ibid., § 101(c)(1).
51 Ibid., § 101(c)(3).
52 Ibid., § 101(c)(4).

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CRS-19
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.53
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.54
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.55
Duty Status.
Active Duty. The term “active duty” means full-time duty in the active
military service of the United States.56 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.57
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.58
Active Service. The term “active service” means service on active duty or
full-time National Guard duty.59
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.60
53 Ibid., § 101(c)(5).
54 Ibid., § 101(c)(6).
55 Ibid., § 101(c)(7).
56 Ibid., § 101(d)(1).
57 Full-time national guard duty is considered state service rather than federal service.
58 10 U.S.C. § 101(d)(2).
59 Ibid., § 101(d)(3).
60 Ibid., § 101(d)(4).

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Other Duty Status Definitions. Federal statutes define other duty statuses:
“full-time National Guard duty,”61 “active Guard and Reserve Duty,”62 and “inactive-
duty training.”63
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 Administration 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.
In order 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.”64
The VA largely bases its determination of veteran status upon military department
service records.65
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,66 a requirement of “active military, naval or air service,”67 whether the
military service was during time of war,68 and the length of duty requirement.69
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.
61 Ibid., § 101(d)(5). See note 11.
62 Ibid., § 101(d)(6).
63 Ibid., § 101(d)(7).
64 38 U.S.C. § 101(2); 38 C.F.R. § 3.1(d).
65 See CRS Report RL33113, Veterans Affairs: Basic Eligibility for Disability Benefit
Programs, at 2-3, by Douglas Reid Weimer.
66 Ibid., at 3-4.
67 Ibid., at 4-6. See 38 U.S.C. § 101(2); 38 C.F.R. § 3.1(d).
68 Ibid., at 6-7. See 38 U.S.C. § 101 (6)-(11); 38 C.F.R. § 3.2.
69 Ibid., at 7.

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