4
The Rating Schedule

This chapter reviews the Department of Veterans Affairs’ (VA’s) Schedule for Rating Disabilities (Rating Schedule) and makes recommendations for improving its effectiveness as the basis for compensating for service-connected disabilities. It is judged specifically for its ability to compensate for impairments in earning capacity and impacts on quality of life, as well as disability more generally. The processes for applying the Rating Schedule are addressed in Chapter 5. This chapter describes how the Rating Schedule came about and its substantive medical content, as well as how it is managed organizationally, including how revisions are made to it. The committee also reviews the currency of medical knowledge represented in the Rating Schedule and makes recommendations for improving the medical basis of the Rating Schedule and keeping it up to date.

The first part of this chapter describes the long and complex history and development of the Rating Schedule into the current century. It should be noted that, although the practice of providing pensions for veterans with disabilities began in the English colonies in North America, the first national pension law in the United States was adopted by the Continental Congress on August 26, 1776. A number of amendments, consolidations, and veterans acts followed, leading up to the current Rating Schedule used in the determination of eligibility for disability compensation.

The second part of this chapter delves into a detailed description of the Rating Schedule as it currently exists and discusses the numerous aspects of its maintenance and updating to serve the expanded purposes of veterans disability compensation recommended in Chapter 3.



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A 21st Century System for Evaluating Veterans for Disability Benefits 4 The Rating Schedule This chapter reviews the Department of Veterans Affairs’ (VA’s) Schedule for Rating Disabilities (Rating Schedule) and makes recommendations for improving its effectiveness as the basis for compensating for service-connected disabilities. It is judged specifically for its ability to compensate for impairments in earning capacity and impacts on quality of life, as well as disability more generally. The processes for applying the Rating Schedule are addressed in Chapter 5. This chapter describes how the Rating Schedule came about and its substantive medical content, as well as how it is managed organizationally, including how revisions are made to it. The committee also reviews the currency of medical knowledge represented in the Rating Schedule and makes recommendations for improving the medical basis of the Rating Schedule and keeping it up to date. The first part of this chapter describes the long and complex history and development of the Rating Schedule into the current century. It should be noted that, although the practice of providing pensions for veterans with disabilities began in the English colonies in North America, the first national pension law in the United States was adopted by the Continental Congress on August 26, 1776. A number of amendments, consolidations, and veterans acts followed, leading up to the current Rating Schedule used in the determination of eligibility for disability compensation. The second part of this chapter delves into a detailed description of the Rating Schedule as it currently exists and discusses the numerous aspects of its maintenance and updating to serve the expanded purposes of veterans disability compensation recommended in Chapter 3.

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A 21st Century System for Evaluating Veterans for Disability Benefits HISTORY There has never been any question but that it is the Government’s duty and responsibility to provide, and to provide generously, for those who, while or as a result of serving their country in time of war, suffered disease or injury which resulted in their being unable to support themselves—in other words, those with service-connected disability. It has been accepted that the Government should compensate them in accordance with their disability…. Criticism of Government’s actions in this area of veterans’ benefits has been as much that the compensation paid these beneficiaries has been too small as that it has been too large (President’s Commission, 1956b:65). The English set a precedent for providing benefits to men disabled in the military service (President’s Commission, 1956b:5). Another precedent was set in 1636, when the Plymouth Colony enacted the first law in the English colonies in North America, which provided money to veterans who acquired disabilities as a result of battles with Pequot Indians (VA, 2007a). Other colonies followed this example. The Continental Congress passed the new country’s first pension law in 1776 to encourage enlistments and curtail desertions (VA, 2007a,b). Compensation for service-connected disability at “half pay for life or during disability” was provided “to every officer, soldier, or sailor losing a limb in any engagement or being so disabled in the service of the United States as to render him incapable of earning a livelihood,” and those partially disabled from getting a livelihood were promised proportionate relief (President’s Commission, 1956b:5). Because the Continental Congress lacked the authority or the money to make the pension payment, it was left to the individual states to make the payments. At most, only 3,000 Revolutionary War veterans drew any pension because the obligation was met differently by the individual states (VA, 2007a). The impact of the Revolutionary War was important because awarding the pensions to these veterans set a precedent for later wars. Another key development was the recognition of the political importance of the veterans, although no formal organization among veterans for political purposes would come about until later. The most important development “was the establishment of the idea that the Government owed it to the veterans to protect them against indigency in their old age and also owed a debt of gratitude to all veterans which should be paid in the form of pensions” (President’s Commission, 1956b:9). Basic benefits for veterans remained unchanged for 35 years following the end of the Revolutionary War (President’s Commission, 1956b:7). The U.S. Constitution was ratified and the first federal pension legislation was

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A 21st Century System for Evaluating Veterans for Disability Benefits passed in1789. The payment of benefits to veterans was assumed by the first Congress, and the Continental Congress pension law was continued. In 1802, the Secretary of War requested the U.S. Attorney General to interpret military pension law: … the connexion [sic] between the inflicting agent and consequent disability need not always be so direct and instantaneous. It will be enough if it be derivative, and the disability be plainly, though remotely, the incident and the result of the military profession … such are the changes and uncertainties of the military life … that the seeds of disease, which finally prostrate the constitution, may have been hidden as they were sown, and thus be in danger of not being recognized as first causes of disability in a meritorious claim.1 By 1808, the Bureau of Pensions under the Secretary of War administered all veterans programs. In 1811, the federal government authorized the first domiciliary and medical facility for veterans (VA, 2007a,b). The War of 1812 and the Mexican War, which intervened between the Revolutionary and the Civil Wars, did not reflect significant developments regarding the nature or scope of veterans benefits; compensation for service-connected disability was provided for veterans of these wars at their onset (President’s Commission, 1956b:10).Veterans and dependents of the War of 1812 were included through subsequent laws, and benefits to dependents and survivors were extended as well. By 1816, there were 2,200 pensioners, and in that year Congress raised allowances for all veterans with disabilities and granted half-pay pensions for five years (and later for a longer time period) to widows and orphans of soldiers of the War of 1812 to acknowledge the growing cost of living and a Treasury surplus (VA, 2007a,b).2 As a result of the surplus, President Monroe suggested in December 1817 that provision be made for the surviving Revolutionary War veterans; he anticipated that the cost would be minimal because there were so few of them remaining. Impassioned arguments urging this expression of gratitude of the country for these veterans prevailed although there was a lack of unanimity expressed by a minority in both houses of Congress as to the proper approach that should be taken to compensating them. For example, Senator William Smith, South Carolina, condemned the measure because he felt it was based on good feelings and sentiment, which he did not believe to be appropriate guides to a legislator. He pointed out that veterans of the War of 1812 would be the next to have as good a claim to such pensions, and 1 Opinion of Richard Rush (U.S. Attorney General), April 15, 1815. See 1 Op. Att’y Gen. 181 (1815). 2 The compensation for a private was raised from $5 to $8 a month, and for officers of the lower ranks by $2 or $3 a month (3 Stat. L., 296). In 1816, 1,757 disabled officers and men of the Revolutionary War were receiving compensation (President’s Commission, 1956a:7).

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A 21st Century System for Evaluating Veterans for Disability Benefits predicted that this measure’s precedent would be regretted later (President’s Commission, 1956b:7-8).3 The Revolutionary War Pension Act of 1818 (3 Stat. L., 410) transferred administration of pensions to the Secretary of War (under the War Department), replacing the service pension programs run by a few states. Veterans who had served at least nine months in the Continental Army and who were also “in reduced circumstances” received lifetime pensions at half-pay of the rank held during the Revolutionary War. It was anticipated that the program would be “brief” and “inexpensive,” an expression of gratitude and an act of charity for the benefit of indigent veterans who would otherwise be put in the humiliating position of having to search for evidence or produce surgeons’ certificates. According to this legislation, every person who had served in the war and was in need of assistance would receive a fixed pension for life, at a rate of $20 a month for officers and $8 a month for enlisted men. Prior to this time, pensions were granted only to veterans with disabilities (VA, 2007a). There was an immediate rush of applications and efforts to prove need where none existed, perhaps indicating a sense of entitlement regardless of need (President’s Commission, 1956b:8). From 1816 to 1820, the number of pensioners increased from 2,200 to 17,730 and the cost of pensions rose from $120,000 to $1.4 million (VA, 2007a). The act was amended in 1820 because the original program was found to be “long, costly, and divisive.” The program was converted to a hybrid of pension and poor-law provisions, and all recipients were suspended from the rolls pending proof of poverty. Claimants ages 65 and older were allowed the maximum rate only for senility. There were about 80,000 war veterans at the time of the 1861 Civil War. By the end of the war in 1865, 1.9 million Union forces veterans were added to the rolls.4 Disability payments based on rank and degree of disability were provided by the General Pension Act of 1862 (12 Stat. L., 566) (the General Law), and it “applied to the Civil War and to any or all future wars in which the United Sates might be engaged” (President’s Commission, 1956b:13). Some changes in detail were made, and more liberal benefit provisions for widows, children, and dependent relatives came about, but it continued the same provisions and philosophy: The claimant must show that his disability was the result of his military service, or, if it did not arise until after his separation from service, he must show that it arose from causes which could be directly traced to injuries 3 For debates on the measure, see Annals of Congress, 15th Cong., 1st Sess., 1, pp. 130–159. 4 Congress pardoned Confederate service members and extended benefits for the first time in 1958, to the single remaining Confederate survivor.

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A 21st Century System for Evaluating Veterans for Disability Benefits received or diseases contracted while in the military service (President’s Commission, 1956b:14). With this act, included for the first time, was compensation for diseases (e.g., tuberculosis) incurred while in service (VA, 2007a). The rise in importance of veterans groups developed during the Civil War: The Civil War was fought under conditions well calculated to impress upon veterans their political power and importance as a group. During the war there was continuous jockeying for political power. Each time an important election was held large numbers of soldiers were furloughed to come home and vote. Particularly was this true in the election of 1864. The importance placed upon the soldier vote in this election was impressed upon the Army and helped lay the groundwork for the later emergence of the Grand Army of the Republic as a potent political force. Since the Republicans were in power, their party became the one which made efforts to save the Union by defeating the rebels; the Democrats, because they were the opposition party, became largely identified with the Copperheads. Service in the Armed Forces also became extremely important politically for candidates for national office for many years after the war (President’s Commission, 1956b:11). After the Civil War, veterans groups (e.g., the Grand Army of the Republic representing Union Veterans of the Civil War) organized to seek increased benefits (VA, 2007a): … the post-Civil War period was the first one when veterans had been organized for the purpose of exerting political pressure in favor of higher benefits for veterans…. The Civil War group was the forerunner of a whole series of veterans’ organizations which have been formed along similar lines for the purpose of representing veterans with an organized voice (President’s Commission, 1956b:12). In 1866, to address the needs of the large number of veterans with disabilities, Congress authorized the National Asylum for Disabled Volunteer Soldiers, which in 1873 was called the National Home for Disabled Volunteer Soldiers. The 1873 Consolidation Act revised pension legislation, basing payment on the degree of disability rather than on service rank (VA, 2007a). The act came about because the laws had become so complex and conflicting, leading to the need for codification (President’s Commission, 1956b:21). The Arrears Act was passed in 1879, and it applied to claims filed prior to 1880. Its expense was unanticipated, and it generated an influx of applications. It was precipitated by the 1873 consolidation; payment of arrears of compensation to veterans or dependents of veterans who had not

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A 21st Century System for Evaluating Veterans for Disability Benefits applied for compensation until after the five years specified by the law had elapsed was at issue: For the individual who had applied within 5 years, the compensation commenced at the death or discharge of the person on whose account the compensation was granted; for anyone who did not apply within 5 years, the compensation commenced with the filing of the last evidence necessary to complete the claim. It was contended that this discriminated unfairly against the person who tried to get along without compensation and on that account delayed the filing of his application (President’s Commission, 1956b:21). Until 1890, Civil War pensions were granted only to servicemen discharged because of illness or disability as a result of military service. However, that year the scope of eligibility was substantially broadened, and pensions were provided to veterans incapable of manual labor. By 1893, the number of veterans receiving pensions increased from 489,000 to 996,000, while the expenditures for the program doubled. There were no new pension laws after the Spanish-American War (1898)5 or after the Philippine Insurrection (1899 to 1901) (VA, 2007a). With the passage of the Sherwood Act of 1912, all veterans were awarded pensions, whereas in the 19th century, recipients had been limited by a similar law to veterans of the Revolutionary War. Under the Sherwood Act, veterans from the Mexican War and Union veterans of the Civil War could receive pensions automatically at age 62 even if they were not sick or disabled. The record shows that of the 429,354 Civil War veterans on pension rolls in 1914, 52,572 qualified on the basis of disability (VA, 2007a). Military factors clearly led to developments in pension policies prior to World War I; however, the poor medical care and service received by soldiers in all wars prior to World War I may have been a more significant factor: Disease became a part of the disability picture, killing more men and probably disabling more men than did the bullets of the enemy. These disabilities due to disease, however, were very difficult to establish service connection for, and brought about much of the demand for pensions, particularly following the Civil War and the Spanish-American War. Confused and incomplete records of all kinds gave rise to much difficulty in establishing the facts of service and the facts of medical records on the basis of which to establish service connection of disabilities. During this entire period there were no general social welfare programs of any kind in existence for either the entire population or for special groups within the general population. The ruling thought pattern seems to have been that the individual should be responsible for providing for his own 5 The military conditions were significant, however, in that pension demands increased.

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A 21st Century System for Evaluating Veterans for Disability Benefits welfare without aid from the Government or from any other organization. Aid given to individuals was provided by private charity. There was no protection against such hazards as losing one’s job because of disability, because of old age, or for any other reason. Veterans’ pensions, especially those for Civil War Veterans, provided a comprehensive plan of security for eligible veterans against the hazards resulting in loss of income or in death (President’s Commission, 1956b:24). Prior to World War I, the War Risk Insurance Act of 1914 (40 Stat., 398–411) was passed to insure American ships and their cargoes. In 1917, after the war began, benefits legislation reflected readjustment and rehabilitation. It is estimated that 4.7 million Americans fought in this war, which left 116,000 dead and 204,000 wounded. The War Risk Insurance Act Amendments of 1917 were enacted to provide insurance against loss of life, personal injury, or capture by the enemy of personnel on board American merchant ships (VA, 2007b). Government-subsidized life insurance for veterans with an option for dependent death or disability coverage was provided. Under the act, a dependent’s pension in case of death or disability was approved, as well as a $60 discharge allowance at war’s end in recognition of service rendered. Other provisions included the authority to establish courses for rehabilitation and vocational training for veterans with dismemberment, sight, hearing, and other permanent disabilities, with eligibility established retroactively to April 6, 1917, when the United States entered World War I. Veterans injured in service were retrained for new jobs. An average earnings impairment disability rating schedule was introduced and, for the first time, service-connected “aggravation” of preexisting conditions applied (Gosoroski, 1997). Section 302 of the War Risk Insurance Act of October 6, 1917, provided the following: A schedule of ratings of reductions in earning capacity from specific injuries or combinations of injuries of a permanent nature shall be adopted and applied by the bureau. Ratings may be as high as one hundred per centum. The ratings shall be based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations and not upon the impairment in earning capacity in each individual case, so that there shall be no reduction in the rate of compensation for individual success in overcoming the handicap of permanent injury. The bureau shall from time to time readjust this schedule of ratings in accordance with actual experience (cited by Paul Ising, retired VA executive, in a written communication provided to the committee). The Act of June 25, 1918, further amended the War Risk Insurance Act of 1914 (Ch. 104, part 10, 40 Stat. 609, 611). It stated that in determining disability entitlement individuals having active service in the military

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A 21st Century System for Evaluating Veterans for Disability Benefits “shall be held and taken to have been in sound condition when examined, accepted, and enrolled in service.” The Vocational Rehabilitation Act of 1918 authorized the establishment of the Federal Board for Vocational Education, an independent agency. Any honorably discharged veteran of World War I was made eligible for vocational rehabilitation training; those unable to undertake gainful occupation were also eligible for a special maintenance allowance (VA, 2007b). In 1921, during the administration of President Harding, a committee investigating the administration of the laws pertaining to veterans recommended that … there should be created a Veterans’ Service Administration, an independent agency to which should be transferred the Bureau of War Risk Insurance, the Rehabilitation Division of the Federal Board for Vocational Education, and such part of the Public Health Service as was necessary in dealing with the beneficiaries of the Bureau of War Risk Insurance and the Rehabilitation Division (Secretary of the Treasury, 1921). Further, the committee recommended that the Secretary of the Treasury be empowered to consolidate veterans benefits under the Bureau of War Risk Insurance except for hospital and medical care. These recommendations led to the passage of P.L. No. 47 (67th Cong.) in 1921, under which the administration of all laws pertaining to World War I veterans was concentrated (President’s Commission, 1956b:30). The Veterans Bureau was established and the first codified Schedule for Rating Disabilities was drafted that same year. In debate on July 20, 1921, Senator Walsh argued: It is very apparent to me that this wave of tuberculosis and nervous and mental disease that has taken such a deadly hold and grip of late upon our ex-service men must have been contracted in the service. I feel, therefore, that we ought not continue this requirement of endless affidavits, necessarily involving long delay, in demonstrating the fact that their illness is of service origin. The delays resulting from this affidavit requirement have often resulted in men dying before they ever got their compensation. The 1921 Rating Schedule amended the presumption of soundness to exclude defects, disorders, or infirmities recorded at the inception of active service. It also provided for presumption of service connection for tuberculosis and neuropsychiatric conditions,6 and for creation of local rating boards around the country instead of a single rating board in Washington, D.C. (VBA, 2005). 6 These are the first presumptions and were made on a floor amendment to a bill for the then Bureau of Pensions, the precursor organization to the Veterans Administration.

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A 21st Century System for Evaluating Veterans for Disability Benefits The World War Veterans’ Act of 1924 required a new Rating Schedule, which was created and placed into operation January 1, 1926. Known as the 1925 Rating Schedule, it had evaluation percentages in increments of 1 percent. On the positive side, unlike the 1945 Rating Schedule presently in effect, it did not require an increase of 10 percent for each upward adjustment. On the negative side, the scale required arbitrary discrimination to determine the difference between one or two percentage points. This schedule provided a disability rating based on assumptions about the skills and functions needed for specific occupations. For example, a veteran with a disability resulting from an ocular disorder would receive a higher disability evaluation if the individual worked as an accountant as opposed to a laborer with the same disability. Put differently, good eyesight was considered to be more important to a veteran who worked with written materials and numbers than to a veteran who performed manual tasks. This kind of determination provided the original rationale for including an occupational specialist on the rating board. This act consolidated, codified, and liberalized the regulations and made significant changes in benefits; however, it was not definitive. It extended the presumption of service connection for tuberculosis and neuropsychiatric diseases to January 1, 1925, and added paralysis agitans, encephalitis lethargica, and amoebic dysentery to the presumptive list, which if they appeared before January 1, 1925, were presumed to be service connected (President’s Commission, 1956b:33). The next major liberalization occurred in 1926, with the establishment of a statutory tuberculosis award of not less than $50 a month for any ex-service person shown to have had a tuberculous disease of a compensable degree who had reached complete arrest of the disease; 43,719 veterans were receiving this benefit by June 30, 1932 (President’s Commission, 1956b:33). In 1930, P.L. No. 522 (71st Cong.) was passed to grant aid in the form of a pension to needy, disabled World War I veterans with other than service-connected disabilities, with payments ranging from $12 to $40 a month depending on the degree of disability; within a little over two years, 440,954 veterans were receiving pensions. This law was passed when the United States was going into the Depression and no Treasury surplus was available to pay for it (President’s Commission, 1956b:33–34). The Economy Act of March 30, 1933 (P.L. No. 2, 73rd Cong.), which eliminated payments to all veterans without service-connected disabilities except those who were totally disabled and could meet an income test (President’s Commission, 1956b:39), authorized the next version of the Rating Schedule. The 1933 Rating Schedule eliminated evaluations in increments of 1 percent and substituted multiples of 10 percent. It also eliminated the

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A 21st Century System for Evaluating Veterans for Disability Benefits difference between temporary and permanent evaluations.7 Additionally, it provided for the bilateral anatomical loss (e.g., two eyes, two feet, two hands, or any combination thereof) factor as it is used today. Further, the 1933 Rating Schedule eliminated the occupational variance and substituted the concept of average impairment in civilian occupational earnings capacity resulting from certain diseases and injuries. Historically, the War Risk Insurance Act of 1917 had called for implementing a Rating Schedule to be based on “the average impairment in earning capacity” caused by a disability. Average impairment was to be based on average loss of earnings for all occupations performing manual labor. Legislation in 1924 provided that the Rating Schedule should still be based on the concept of average impairment with the recognition of the effects of the disability on the preservice occupation of the veteran. However, this 1933 legislation led to reverting back to “average impairment of earnings capacity” (Economic Systems Inc., 2004b). The advent of the Economy Act brought Executive orders into the system of veterans benefits: The Economy Act of 1933 cancelled all previously established benefits for veterans of wars since 1898 and substituted instead a system of veterans’ benefits established by Executive order. The new system drastically curtailed all benefits, reduced pension payments to those with total disability, sharply reduced the payments going to those with service-connected disabilities, removed many cases for the rolls altogether, and cut down sharply on the benefits. Some liberalizations were made in the Executive orders during the following 2-year period, and by the end of 2 years, former laws, with the exception of that one granting disability pensions to veterans with non-service-connected disabilities, were substantially reenacted. Pensions continued to be limited to those suffering from total disability (President’s Commission, 1956b:45). The 1945 Rating Schedule became effective April 1, 1946, and formed the basis for the current schedule. This schedule raised the percentages of disability for some impairments and lowered them for others. It also provided for a review of all ratings under the 1925 and 1933 Rating Schedules. Under the 1945 Rating Schedule, a higher evaluation was assigned when possible, but “protection” of a higher rating under the prior Rating Schedule was not provided. (Protection in this context means that a disability rating would not be reduced solely on the basis of the application of the new Rating Schedule. However, a rating could be reduced if 7 Legislation in 1919 established temporary and permanent disability compensation rates, payable based on the degree of reduction in earning capacity resulting from the disability (Economic Systems Inc., 2004a).

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A 21st Century System for Evaluating Veterans for Disability Benefits medical evidence establishes that the disability being evaluated has actually improved.) In the 1925 and 1933 Rating Schedules, if the application of the new schedule resulted in a reduction in the rating, the disability rating under the prior Rating Schedule was retained in a protected status. Thus, the assigned rating could only increase. Under the 1945 Rating Schedule, however, the assigned rating could decrease. According to a July 1954 General Accounting Office (GAO) report: The disability ratings provided in the rating schedules are not based on an actual determination of the effect of the various disabilities on the average earning capacity of individuals in civil occupations. The Chairman of the VA Rating Schedule Board, in a statement dated January 21, 1952, regarding various aspects of the disability rating problems … indicated that the 1945 schedule is an outgrowth of other rating schedules which had been in use at various times from 1921 to April 1, 1946. He stated that the disability ratings provided in the 1921 schedule were not calculated on statistical or economic data regarding the average reduction in earning capacities from any disability because such data were not available, and that they undoubtedly represented the opinions of the physicians who had developed the schedules as to the effect of the various disabilities upon the earning capacity of the average man. He also stated that the disability percentage ratings provided in the 1945 schedule are based on very little calculations but that they represent the consensus of informed opinion of experienced rating personnel, for the most part physicians, and reflect many compromises of their views (as cited in President’s Commission, 1956a:33). Currently, VA uses the 1945 Rating Schedule and its medical criteria with some revisions to evaluate veterans for disability compensation. THE CURRENT RATING SCHEDULE Body Systems and Rating Disability The current Rating Schedule assigns a percentage of disability, called a rating, based mostly on the severity of the veteran’s medical impairment or diagnosis. The underlying assumption of this system of rating is that degree of disability is the equivalent or reasonably similar to percentage of impairment. The differences between impairment and disability, and the need to broaden the rating system to take account of dimensions of disability beyond impairment, were discussed in Chapter 3. As discussed in Chapter 3, although the purpose of the current Rating Schedule is to determine the extent to which impairment reduces earning capacity (work disability), the operational basis for these ratings is an evaluation of the severity of impairments resulting from the service-

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A 21st Century System for Evaluating Veterans for Disability Benefits The medical advisory committee might be renamed the disability advisory committee, in recognition of the broadened basis for compensation. Phase 2 The next step would be to investigate the relationship between the ratings and average earnings to see the extent to which the Rating Schedule as revised is meeting vertical and horizontal equity criteria (Recommendation 4-2). This would build on the analyses being conducted by the CNA Corporation, but use samples large enough to study the most prevalent conditions being rated. In fiscal years 2004–2006, for example, 38 conditions were the basis for at least 10,000 claims a year, including defective hearing, tinnitus, PTSD, lumbosacral or cervical strain, diabetes mellitus, hypertension, impairments of the leg, limitation of flexion of leg, limitation of motion of the ankle, and impairment of knee (other than ankylosis, degenerative arthritis of the spine, migraine, and arteriosclerotic heart disease). These 38 conditions accounted for 66 percent of the compensation rating decisions during 2004–2006. Conditions that are most often rated at 100 percent, if not already included on the basis of overall prevalence, also might be included, such as brain trauma. Based on the results of the analysis of the relationship between the ratings and average earnings, VA could adjust the criteria to increase vertical and horizontal equity (Recommendation 4-4). Phase 3 Next, to implement Recommendation 4-5, VA should develop a set of functional measures (e.g., ADLs, IADLs) and specific performance measures, such as time to ambulate a certain distance, or ability to do specific work-related tasks in both physical domains (e.g., climbing stairs or gripping) and cognitive domains (e.g., communicating or coordinating with other people). After the measures are validated in the disability compensation population, VA would conduct a study of functional capacity among applicants to see how well the revised Rating Schedule compensates for loss of functional capacity. There may be a correlation between the rating levels based on impairment and degree of functional limitations (i.e., the higher the rating, the more functional capacity is limited). If the correlation is not high or does not exist, VA should develop a mechanism to compensate for loss of function that exceeds degree of impairment. Functional criteria could be included in the Rating Schedule or it could be rated separately with compensation based on the higher of the two ratings (see Appendix E for a diagram of a possible process for assessing impairment

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A 21st Century System for Evaluating Veterans for Disability Benefits and functional disability). The use of such a mechanism should be thoroughly tested for reliability and validity in pilot studies and experiments. A side benefit of functional assessment, if performed by interdisciplinary teams whose members are trained to assess function (e.g., physical, occupational, and other therapists; rehabilitation physicians and nurses; and vocational rehabilitation [VR] counselors), is that it would provide a basis for determining a veteran’s needs for ancillary services (discussed in Chapter 6). In addition, VA could use the results of disability evaluations in making decisions on individual unemployability, particularly if a VR counselor or other vocational specialist is involved in the multidisciplinary assessment (see Chapter 7). Phase 4 Quality-of-life assessment is relatively new and still at a formative stage, which makes implementation of Recommendation 4-6 more long-term and experimental. Health-related quality-of-life (HRQOL) instruments are the most developed and validated. VHA already uses a psychometric HRQOL instrument, the SF-36, to assess the effectiveness of medical interventions, and it has been adapted and validated for the population of veterans receiving care in an ambulatory setting (SF-36V). Preference-based HRQOL instruments are less well developed but have the potential to be more useful in a compensation system, because the results can be quantified and located on an interval scale (the SF-36V does not, for example, provide a summary score). VA should begin a program of empirical research and development to determine the QOL effects of service-connected injuries and diseases. The goal would be to find out whether a global HRQOL instrument could reliably and validly measure the QOL of disabled veterans and be the basis for compensating its loss. A preference-based HRQOL measure would also have to place values on losses about which veterans and the remainder of the community agree, so that compensation based on HRQOL losses would be acceptable to both groups. While it is not clear, based on the current status of the science, that it is possible to measure HRQOL with a significant degree of accuracy, the committee believes there is a good chance this goal can be achieved and, because of its importance, should be attempted.13 13 VA should be cognizant of the Patient-Reported Outcomes Measurement Information System (PROMIS), an effort by the National Institutes of Health (NIH) “to develop ways to measure patient-reported symptoms, such as pain and fatigue, and aspects of health-related quality of life across a wide variety of chronic diseases and conditions.” The aim is to produce well-validated measures of HRQOL that will increase the quality and comparability of clinical research results (NIH, 2007).

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A 21st Century System for Evaluating Veterans for Disability Benefits If a reliable quality-of-life instrument can be validated, VA should ascertain the degree to which the Rating Schedule, as revised in phases 1-3 (above) accounts for loss of QOL (i.e., the higher the rating, the greater the loss in QOL). If the Rating Schedule does not do a good job of compensating for severe loss in QOL, VA should develop a mechanism for doing so. REFERENCES APA (American Psychiatric Association). 1994. Diagnostic and statistical manual of mental disorders, 4th ed. Washington, DC: APA. APA. 2002. A research agenda for DSM-V, edited by D. J. Kupfer, M. B. First, and D. A. Regier. Washington, DC: APA. http://www.appi.org/pdf/kupfer_2292.pdf (accessed April 27, 2007). Berkowitz, M., and J. F. Burton, Jr. 1987. Permanent disability benefits in workers’ compensation. Kalamazoo, MI: W. E. Upjohn Institute for Employment Research. Economic Systems Inc. 2004a. VA Disability Compensation Program: Legislative history. Washington, DC: VA Office of Policy, Planning, and Preparedness. http://www.va.gov/op3/docs/Disability_Comp_Legislative_Histor_Lit_Review.pdf (accessed December 28, 2006). Economic Systems Inc. 2004b. VA Disability Compensation Program: Literature review. Washington, DC: VA Office of Policy, Planning, and Preparedness. http://www1.va.gov/op3/docs/Final_Report-LiteratureReview.pdf (accessed December 28, 2006). Endicott, J., R. Spitzer, J. L. Fleiss, and J. Cohen. 1976. The global assessment scale. Archives of General Psychiatry 33:766–771. GAO (General Accounting Office). 2002. SSA and VA disability programs: Re-examination of disability criteria needed to help ensure program integrity. Report GAO-02-597. Washington, DC: GAO. Goldman, H. H., A. E. Skodol, and T. R. Lave. 1992. Revising axis V for DSM-IV: A review of measures of social functioning. American Journal of Psychiatry 149:1148–1156. Gosoroski, D. M. 1997. Brotherhood of the damned: Doughboys return from the world war. VFW Magazine. http://www.worldwar1.com/dbc/vetsorg.htm (accessed April 26, 2007). Greenberg, G. A., and R. A. Rosenheck. 2007. Compensation of veterans with psychiatric or substance abuse disorders and employment and earnings. Military Medicine 172:162–168. IDA (Institute for Defense Analyses). 2007. Support to the Department of Veterans Affairs. http://www.ida.org/researchareas/resourceandsupportanalyses/acquisition%20planning%20and%20resource%20management.php (accessed May 22, 2007). Narrow, W. E. 2006. Presentation to the IOM Committee on Medical Evaluation of Veterans for Disability Compensation, Washington, DC, September 21. National Commission on State Workmen’s Compensation Laws. 1972. Report of the National Commission on State Workmen’s Compensation Laws. Washington, DC: Author. http://www.workerscompresources.com/National_Commission_Report/national_commission_report.htm (accessed February 28, 2007). NIH (National Institutes of Health). 2007. What is PROMIS? Overview. http://www.nihpromis.org/what_is_promise/default.asp (accessed May 29, 2007). Pincus, H. A., C. Kennedy, S. J. Simmens, H. H. Goldman, P. Sirovatka, and S. S. Sharfstein. 1991. Determining disability due to mental impairment: APA’s evaluation of Social Security Administration guidelines. American Journal of Psychiatry 148(8):1037–1043.

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A 21st Century System for Evaluating Veterans for Disability Benefits President’s Commission (The President’s [Bradley] Commission on Veterans’ Pensions). 1956a. The administration of veterans’ benefits: A study of the interrelationship of organization and policy. Staff Report No. V1, June 19. House Committee Print No. 244, 84th Cong., 2nd Sess. Washington, DC: Government Printing Office. President’s Commission. 1956b. The historical development of veterans’ benefits in the United States. Staff Report No. 1, May 9. House Committee Print No. 244, 84th Cong., 2nd Sess. Washington, DC: Government Printing Office. President’s Commission. 1956c. The Veterans’ Administration disability rating schedule: Historical development and medical appraisal. Staff Report No. 8, Part B, July 18. House Committee Print No. 244, 84th Cong., 2nd Sess. Washington, DC: Government Printing Office. Secretary of the Treasury. 1921. Annual report, Pp. 96–100, as cited in The President’s Commission on Veterans’ Pensions (1956). Sinclair, S., and J. F. Burton, Jr. 1995. Development of a schedule for compensation of noneconomic loss: Quality-of-life values vs. clinical impairment ratings. In Research in Canadian Workers’ Compensation, edited by T. Thomason and R. P. Chaykowski. Kingston, ON: IRC Press of Queen’s University. VA (Department of Veterans Affairs). 2002. Best practice manual for posttraumatic stress disorder (PTSD) compensation and pension examinations. Washington, DC: VA. http://www.avapl.org/pub/PTSD%20Manual%20final%206.pdf (accessed June 22, 2007). VA. 2005. Review of state variances in VA disability compensation payments. Report No. 05-00765-137. Washington, DC: Office of Inspector General, VA. http://www.va.gov/oig/52/reports/2005/VAOIG-05-00765-137.pdf (accessed May 22, 2007). VA. 2007a. History of the Department of Veterans Affairs. Part 1. http://www.va.gov/opa/feature/history/history1.asp (accessed March 9, 2007). VA. 2007b. History – VA history. http://www.va.gov/about_va/vahistory.asp (accessed March 9, 2007). VBA (Veterans Benefits Administration). 2004. Trainee workbook for basic ratings—Prerequisite training. VBA Training & Performance and Support System (accessed March 2006 from VA Intranet). VBA. 2005. General policy in rating: Student guide. Washington, DC: VA (accessed March 2006 from VA Intranet). VBA. 2006. Claims recognition: Student guide. Washington, DC: VA (accessed March 2006 from VA Intranet). WHO (World Health Organization). 2001. International classification of functioning, disability and health: ICF. Geneva: WHO.

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A 21st Century System for Evaluating Veterans for Disability Benefits APPENDIX TABLE 4-1 Summary of Key Revisions to Diagnostic Codes Since 1945 Body System Revisions Musculoskeletal E91 was published as proposed 68 FR 6998, Feb. 11, 2003. This proposed rule was withdrawn at 69 FR 22757, Apr. 27, 2004. It would have been the first comprehensive revision since 1945. Nonetheless, some codes have been revised. The diagnostic code for atrophic rheumatoid arthritis (5002) was revised at 70 FR 75399, Dec. 20, 2005. The diagnostic code for degenerative hypertrophic arthritis or osteoarthritis (5003) was revised at 68 FR 51454, Aug. 27, 2003. The diagnostic codes for prosthetic implants (5051, 5052, 5053, 5054, 5055, and 5056) were revised at 43 FR 45348, Oct. 2, 1978. The diagnostic code for fibromyalgia (5025) was revised at 64 FR 32410, June 17, 1999. Four codes for anatomical losses were revoked at 41 FR 11291, Mar. 18, 1976, while two codes for loss of use of hands and feet (5104 and 5105) were revised. Terminology was updated for a number of multiple finger amputations diagnostic codes (5127, 5128, 5130, 5131, 5132, 5135, 5136, 5138, 5139, 5141, 5143, 5146, 5149, and 5150) at 67 FR 48784, July 26, 2002. A substantive revision was made to the diagnostic code for the amputation of two digits (the ring and little fingers) of one hand (5151). Terminology was updated for a single finger amputation code (5154) at 67 FR 48784, July 26, 2002. At 43 FR 45348, Oct. 2, 1978, one diagnostic code for amputation of lower extremity (5166) was revised, while another (5174) was revoked. For the elbow and forearm diagnostic codes, impairment of ulna (5211) and impairment of radius (5212) were revised at 43 FR 45348, Oct. 2, 1978. The diagnostic code for ankylosis of the wrist (5214) was revised at 43 FR 45348, Oct. 2, 1978. The ankylosis section was revised at 67 FR 48784, July 26, 2002, affecting multiple digits: unfavorable ankylosis (5216–5219), multiple digits; favorable ankylosis (5220–5223); ankylosis of individual digits (5224–5227); and limitation of motion of individual digits (5228–5230). The spine section underwent a major revision at 68 FR 51454, Aug. 27, 2003, with the creation of a number of new diagnostic codes under which previous codes were subsumed. Diagnostic codes 5285–5295 were therefore deleted. The section on shortening of the lower extremity (5275) was revised at 43 FR 45348, Oct. 2, 1978. The muscle injuries section underwent a major revision at 62 FR 30235, June 3, 1997, affecting diagnostic codes 5301–5329.

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Organs of Special Sense NPRM 64 FR 25246, May 11, 1999, which would be a body system revision, is anticipated to become a final rule in October 2006. Some revisions have been made since the 1970s. The diagnostic code for unilateral or bilateral ptosis (6019) was revised at 43 FR 45348, Oct. 2, 1978. The diagnostic code for aphakia (6029) was revised at 43 FR 45348, Oct. 2, 1978. Table V: Ratings of Central Visual Acuity Impairment was revised at 53 FR 50955, Dec. 19, 1988. Diagnostic codes in this section were revised: anatomical loss of both eyes (6061) at 41 FR 11291, Mar. 18, 1976; and 6063–6079 for defective visual acuity at 43 FR 45348, Oct. 2, 1978. Impairment of field vision (6080) was revised at 43 FR 45348, Oct. 2, 1978, while pathological, unilateral scotoma (6081) was revised at 41 FR 11291, Mar. 18. 1976. Diplopia (6090) was revised at 53 FR 30261, Aug. 11, 1988. The section on diseases of the ear was revised at 64 FR 25202, May 11, 1999, including changes in all diagnostic codes except otosclerosis (6202), which was revised at 59 FR 17295, Apr. 12, 1994, when the code for otitis interna (6203) was deleted. Recurrent tinnitus (6260) was revised at 68 FR 25822, May 14, 2003. In the section for other sense organs, the diagnostic codes for sense of smell (6275) and sense of taste (6276) were revised at 64 FR 25202, May 11, 1999. Diagnostic codes 6277–6297 had been removed at 52 FR 44117, Nov. 18, 1987. Infectious Diseases, Immune Disorders, and Nutritional Deficiencies (formerly Systemic Diseases) The entire body system was revised at 61 FR 39873, July 31, 1996. Prior to that, the diagnostic codes for AIDS-related complex (6352) and HIV antibody positive (6353) were removed at 57 FR 10134, Mar. 24, 1992, and it was indicated that they would be rated under the diagnostic code for HIV-related illness (6351). The diagnostic code for HIV-related illness (6351) was further revised at 61 FR 39873, July 31, 1996. Respiratory The entire body system was revised at 61 FR 46720, Sept. 5, 1996. Diagnostic codes 6707–6710 and 6725–6728 under diseases of the lung and pleura—tuberculosis was removed. Diagnostic codes 6800–6809 (bacterial infections of the lung) and 6810–6818 (restrictive lung diseases) were removed and replaced by new diagnostic codes 6822–6824 and 6840–6847, respectively. 71 FR 52457, Sept. 6, 2006, made substantive revisions to the “Guidelines for the Application of Evaluation Criteria for Certain Respiratory and Cardiovascular Conditions; Evaluation of Hypertension with Heart Disease.”

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Cardiovascular The entire body system was revised at 62 FR 65207, Dec. 11, 1997. Diagnostic codes 7010–7014 were removed, and the conditions moved to codes 7010 or 7011 for evaluation purposes. The diagnostic code for arteriosclerosis (7100) was also removed, and the condition’s manifestations were indicated to be rated under the body system they affect. Section 4.104 was amended at 63 FR 37778, July 14, 1998, by revising the diagnostic code for cold injury residuals (7122). 71 FR 52457, Sept. 6, 2006, made substantive revisions to the “Guidelines for the Application of Evaluation Criteria for Certain Respiratory and Cardiovascular Conditions; Evaluation of Hypertension with Heart Disease.” Digestive Some revisions have been made since the 1970s. The diagnostic code for ventral postoperative hernia (7339) was revised and the code for wounds (7341) was removed at 41 FR 11291, Mar. 18, 1976. The code for vagotomy (7348) was addressed, but no specific revision was made. Section 4.112 was revised at 66 FR 29486, May 31, 2001, addressing weight. The diagnostic codes for residuals of injury to the liver (7311) and cirrhosis of the liver (7312) were revised at 66 FR 29486, May 31, 2001, and residuals of abscess of the liver (7313) was removed because the condition is now considered treatable. Diagnostic codes 7343–7345, 7351, and 7354 were revised at 66 FR 29486, May 31, 2001. Genitourinary The entire body system was revised at 59 FR 2523, Jan. 18, 1994. New diagnostic codes 7532–7542 were added. The diagnostic code for pyelitis (7503) was removed because the term is no longer used and the condition is included under diagnostic code 7504. The diagnostic code for cystitis, interstitial (Hunner), submucous or elusive ulcer (7513) was removed, and included under diagnostic code 7512. The diagnostic code for tuberculosis of the bladder (7514) was removed because it is now uncommon and ratings for nonpulmonary tuberculosis are prescribed by sections 4.88b and 4.89. The diagnostic code for resection or removal of the prostate gland (7526) was removed, included under code 7527, and residuals are evaluated according to the severity of the individual disability. Section 4.115b, nephritis, was revised at both 59 FR 14566, Mar. 29, 1994, and 59 FR 46338, Sept. 8, 1994. Raters were instructed to review the diagnostic codes for deformity of the penis with loss of erectile power (7522), complete testis atrophy (7523), and testis removal (7524) for entitlement to special monthly compensation at 59 FR 46338, Sept. 8, 1994.

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Gynecological Conditions and Disorders of the Breast The entire body system was revised at 60 FR 19851, Apr. 21, 1995. New diagnostic codes for benign neoplasms of the gynecological system or breast (7628) and endometriosis (7629) were added. Section 4.116 was amended and included the revised diagnostic code for surgery of the breast (7626) at 67 FR 6872, Feb. 14, 2002. Hemic and Lymphatic The entire body system was revised at 60 FR 49225, Sept. 22, 1995. A new diagnostic code for aplastic anemia (7716) was added. The diagnostic codes for secondary anemia (7701) and secondary adenitis (7713) were removed because they are symptoms of other, more specific diseases. The diagnostic codes for axillary (7711) and inguinal (7712) tuberculous adenitis were removed and included under the diagnostic code for active or inactive tuberculous adenitis (7710). Skin The entire body system was revised at 67 FR 49590, July 31, 2002. New diagnostic codes 7820–7833 were added. The diagnostic codes for pinta (7810) and verruga peruana (7812) were removed because they are so unusual as to no longer warrant a separate category; if these do occur, they may be rated under the diagnostic code for infections of the skin not listed elsewhere (7820). The preamble was corrected at 67 FR 62889, Oct. 9, 2002. NPRM 67 FR 65915, Oct. 29, 2002, proposed to revise section 4.118 and the diagnostic codes for disfigurement and scars (7800– 7804), except for the code for other scars (7805). The final rule for this proposal was anticipated in Dec. 2006; however, the NPRM was withdrawn on Dec. 29 (71 FR 78391). Endocrine The entire body system was revised at 61 FR 20400, May 7, 1996. New diagnostic codes 7916–7919 were added. The diagnostic code for hyperadrenia (7910) was removed at 61 FR 20400, May 7, 1996, because it is so rare among service persons.

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Neurological Conditions and Convulsive Disorders Some revisions have been made since the 1970s. Section 4.124a was amended at 43 FR 45348, Oct. 2, 1978, to reflect the addition of the diagnostic code for the brain, malignant new growths (8002), and at that time a note was added to the code. A note was added to the diagnostic code for malignant new growths of the spinal cord (8021) at 43 FR 45348, Oct. 2, 1978. Final rule corrections were made at 54 FR 49754, Dec. 1, 1989, diseases of the peripheral nerves, to correct previously published information for diagnostic codes 8520–8530, 8620–8630, and 8720–8730, because the table was inadvertently misrepresented. An incorrect word was corrected for the diagnostic code paralysis of posterior tibial nerve (8525) at 55 FR 154, Jan. 3, 1990. The diagnostic code for soft-tissue sarcoma (8540) was addressed at 56 FR 51651, Oct. 15, 1991, which described service connection based on exposure to herbicides containing dioxin. Correcting amendments were made at 57 FR 24363, June 9, 1992, to reinstate diagnostic codes 8510–8730, which had been inadvertently omitted at 54 FR 49754, Dec. 1, 1989.

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Mental Disorders The entire body system was revised at 71 FR 52695, Oct. 8, 1996. There were extensive revisions in the preamble section and in the diagnostic codes throughout this body system, including new categories, new codes, removed codes, and the incorporation of conditions from removed codes into existing or new codes. DSM-IV was the basis for many of the revisions made. In the schizophrenia and other psychotic disorders category, diagnostic codes 9200, 9206, 9207, and 9209 were removed. In the delirium, dementia, and amnestic and other cognitive disorders category, new diagnostic codes for dementia (9326) and organic mental disorder (9327) were added. Diagnostic codes 9302, 9303, 9306, 9307, 9308, 9309, 9311, 9315, 9322, 9324, and 9325 were removed. A category for anxiety disorders was added, under which new diagnostic codes for panic disorder and/or agoraphobia (9412) and anxiety disorder not otherwise specified (9413) were added. Diagnostic codes 9401, 9402, 9405, 9408, and 9409 were removed. A category of dissociative disorders was added, under which a diagnostic code for dissociative amnesia, fugue, and identity disorder (9416) and depersonalization disorder (9417) were added. A category for somatoform disorders was added. Former codes 9402 and 9409 were moved into the new diagnostic codes for pain disorder (9422), conversion disorder (9424), and hypochondriasis (9425). A new code for undifferentiated somatoform disorder (9423) was also added. A category for mood disorders was added, and the diagnostic codes for bipolar disorder (9432, previously 9206), dysthymic disorder (9433, previously 9405), and major depressive disorder (9434, pulled from codes 9207, 9209, and 9405) were placed in this category. New diagnostic codes for cyclothymic disorder (9431) and mood disorder not otherwise specified (9435) were added. A category for chronic adjustment disorder, and a new code for the disorder (9440) were added. The category of psychophysiologic skin reaction was removed, including diagnostic codes 9500–9511 based on DSM-IV guidelines that preclude the need for a separate code and evaluation criteria for this disorder. A category for eating disorders was added, with new diagnostic codes for anorexia nervosa (9520) and bulimia nervosa (9521). NPRM 67 FR 63352, Oct. 11, 2002, “A Definition of Psychosis for Certain VA Purposes,” was anticipated to become final in August 2006, but has not yet been issued.

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A 21st Century System for Evaluating Veterans for Disability Benefits Body System Revisions Dental and Oral Conditions The entire body system was revised at 59 FR 2529, Jan. 18, 1994. New diagnostic codes for loss of more than half of the maxilla (9914), loss of half or less of the maxilla (9915), and malunion or nonunion of the maxilla (9916) were added. The previous diagnostic code for loss of whole or part of substance, nonunion, or malunion of the maxilla (9910) was removed because of the addition of the new codes. The conditions of carious teeth, treatable; missing teeth, replaceable; dento-alveolar abscess; pyorrhea alveolaris; and Vincent’s stomatitis were determined to be nondisabling conditions; the new section 4.149 served as a replacement to address these conditions. Section 4.149, “Rating Diseases of the Teeth and Gums,” was revised at 62 FR 8201, Feb. 24, 1997.