Section A - General Authorization and Claimant Notification Issues - Updated 9/8/09

Chapter 3 - Authorization Issues and Claimant Notification

Overview


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In this Section
This section contains the following topics:   ''' '''
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1.   Locations of Information Pertaining to General Authorization and Claimant Notification Issues
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Introduction
This topic contains information on the locations of information pertaining to general authorization and claimant notification issues, including
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 ·      the award and denial process

 ·      due process

 ·      effective dates for new awards and increases

 ·      compensation for an adult helpless child

 ·      Special Monthly Compensation (SMC), and

 ·      potential entitlement to vocational rehabilitation. 
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Change Date
September 29, 2006 
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a.   Award and Denial Process
<p class="MsoBlockText">For more information on the award and denial process, see M21-1MR, Part III, Subpart v, 2. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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b.   Due Process
<p class="MsoBlockText">For general information on due process, see M21-1MR, Part I, 2.A. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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c.   Effective Dates for New Awards and Increases
<p class="MsoBlockText">For information on effective dates for new awards and increases, see
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      38 U.S.C. 5110

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      38 CFR 3.157

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      38 CFR 3.400, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      38 CFR 3.401. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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d.   Compensation for an Adult Helpless Child
<p class="MsoBlockText">For information on compensation for an adult helpless child, see M21-1MR, Part III, Subpart iii, 7.3 (TBD) or M21-1, Part IV, 15.04. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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e.   SMC
<p class="MsoBlockText">For information on Special Monthly Compensation (SMC), see
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      M21-1MR, Part IV, Subpart ii, 2.H, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      M21-1MR, Part IV, Subpart ii, 2.I. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 1. Locations of Information Pertaining to General Authorization and Claimant Notification Issues, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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f.   Potential Entitlement to Vocational Rehabilitation
<p class="MsoBlockText">For information on notifying veterans of potential entitlement to vocational rehabilitation under 38 U.S.C. Chapter 31, see M21-1MR, Part IX, Subpart i, 1.A.6. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt"> '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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2.   Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection
<p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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Introduction
<p class="MsoBlockText">This topic contains information on adverse action resulting from clear and unmistakable error (CUE) or severance of service connection, including
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      rating activity action to reduce an evaluation based on CUE

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      who has authority to sign the rating decision

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the location of relevant information pertaining to this topic

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      withdrawing a proposal to reduce an evaluation under 38 CFR 3.105(a)

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the jurisdiction of the rating activity over severance of service connection

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the jurisdiction of the authorization activity over severance of service connection

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the responsibility of the Veterans Service Center Manager (VSCM)

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      due process periods and effective dates

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the process to sever service connection after VSCM approval

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      what to include in the notice of proposed adverse action

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the effective dates in a decision to sever service connection

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the action to take on a rating decision to sever service connection under 38 CFR 3.105(a), and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      notification of Chapter 31 Vocational Rehabilitation and Employment (VR&E) and Veterans Health Administration (VHA). <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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Change Date
<p class="MsoBlockText">September 8, 2009 <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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a.   Rating Activity Action to Reduce an Evaluation Based on CUE
<p class="MsoBlockText">When the reduction or discontinuance of a veteran’s compensation results from a finding of clear and unmistakable error (CUE) in the determination of the disability evaluation, the rating activity prepares a rating that
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      proposes the change

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      cites all the material facts and justification for the proposed action, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      includes the

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     legend “PROPOSAL TO REDUCE UNDER 38 CFR 3.105(a) and 3.105(e)”

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     proposed evaluation of the disability in question, and

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     proposed combined evaluation, if applicable.

<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For the regulation governing CUE, see 38 CFR 3.105(a). <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">   Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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b.   Who Has Authority to Sign the Rating Decision
<p class="MsoBlockText">The rating decision proposing reduction or discontinuance of benefits under 38 CFR 3.105(a) must be signed by the Veterans Service Center Manager (VSCM) or a supervisory designee no lower than coach.
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<p class="MsoBlockText">

<p class="MsoBlockText"> The final rating decision does not require the signature or approval of the VSCM or VSCM-designee unless new evidence has been received since the proposed decision was approved. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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c.   Location of Pertinent Information
<p class="MsoBlockText">Use the information in M21-1MR, Part IV, Subpart ii, 3.A.3 when
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      determining the effective date

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      considering

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     the submission of evidence, and

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     hearing requests, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      notifying the veteran. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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d.   Withdrawing a Proposal to Reduce an Evaluation Based on CUE
<p class="MsoBlockText">The actions required to withdraw a proposal to reduce an evaluation resulting from CUE depend upon who withdraws the proposal.
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<p class="MsoBlockText">

<p class="MsoBlockText">Use the information below to determine the action to take to withdraw a proposal to reduce an evaluation under 38 CFR 3.105(a). <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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e.   Jurisdiction of Rating Activity Over Severance of Service Connection
<p class="MsoBlockText">As indicated in M21-1MR, Part III, Subpart iv, 8.E.17, the rating activity typically initiates action to sever service connection. However, authorization activity may do so in certain circumstances per M21-1MR, Part IV, Subpart ii, 3.A.2.f.
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<p class="MsoBlockText">

<p class="MsoBlockText">The rating activity may reverse a previous award of service connection under 38 CFR 3.105(d) if it finds that service connection was awarded based on CUE. This means that the original grant had no plausible basis in the law or particular facts of the case. The error must be undebatable and not a mere difference in judgment between decision-makers. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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f.   Jurisdiction of the Authorization Activity Over Severance of Service Connection
<p class="MsoBlockText">The authorization activity
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      initiates action to sever service connection if a CUE was made in a decision concerning

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     character of discharge

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     line of duty, or

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     willful misconduct, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      refers the case to the rating activity for appropriate action under M21-1MR, Part III, Subpart iv, 8.E.18.

<p class="MsoBlockText">

<p class="MsoBlockText">Note:   Take action as shown in M21-1MR, Part III, Subpart iv, 8.E.17 even if severance of service connection would not result in a reduction or termination of benefits.

<p class="MsoBlockText">

<p class="MsoBlockText">References:   For more information on decisions concerning

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      character of discharge, see M21-1MR, Part III, Subpart v, 1.B

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      line of duty, see M21-1MR, Part III, Subpart v, 1.D,   and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      willful misconduct, see M21-1MR, Part III, Subpart v, 1.D. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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g.   Responsibility of the VSCM
<p class="MsoBlockText">As indicated in M21-1MR, Part III, Subpart iv, 8.E.17, the VSCM must approve any proposal to sever service connection.
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<p class="MsoBlockText">

<p class="MsoBlockText">Important:   Do not inform the veteran or veteran’s power of attorney (POA) of a proposed severance before it is approved by the VSCM. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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h.   Due Process Periods and Effective Dates
<p class="MsoBlockText">Department of Veterans Affairs (VA) is required to provide the veteran 60 days
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      to respond to the notice of proposed reduction or discontinuance of benefits (referred to as the “due process” period), and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      after a final decision is made and final notice is sent before effectuating the reduction or discontinuance. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
 * }

<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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i.   Process to Sever Service Connection After VSCM Approval
<p class="MsoBlockText">The table below describes the process to sever service connection after VSCM approval. <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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 * }

<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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j.   Information to Include in the Notice of Proposed Adverse Action
<p class="MsoBlockText">After the VSCM approves a proposal to sever service connection, notify the veteran by a locally-generated letter of the proposed adverse action. The letter must
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      thoroughly explain the

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      proposed action

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      reason for it, and

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      proposed effective date per M21-1MR, Part IV, Subpart ii, 3.A.2.k

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      contain statements concerning the veteran’s rights to

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      present evidence

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      request a hearing, and

<p class="BulletText2" style="mso-list:l0 level1 lfo1"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      have representation

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      advise the veteran that the present payment will continue during the time allowed for him/her to exercise those rights

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      include information concerning possible pension entitlement if the evidence shows such entitlement may exist, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      request any dependency, employment, and income information considered necessary. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
 * }

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k.   Effective Dates in a Decision to Sever Service Connection
<p class="MsoBlockText">The effective date on a decision to sever service connection is the first day of the month following 60 days from the notice of the final rating action.
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<p class="MsoBlockText">

<p class="MsoBlockText" style="mso-list:skip">The effective date for severance is the last day of the month following 60 days from the date of final notice to the veteran.

<p class="MsoBlockText" style="mso-list:skip">

<p class="MsoBlockText">Example:   Given a final reduction notification date of April 22, then

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      60 days following that date is June 22, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the first day of the next month is July 1. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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l.   Action to Take on a Rating Decision to Sever Service Connection Under 38 CFR 3.105(a)
<p class="MsoBlockText">Use the table below to determine what action to take if the service connection is finally severed.
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<p class="MsoBlockText">

<p class="MsoBlockText">Note:   The table below contains instructions for processing awards in the Benefits Delivery Network (BDN). For information on processing awards in the Veterans Service Network (VETSNET), see the VETSNET User Guide.

<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For a list of reason codes to use in an amended award to reduce or discontinue payments, see M21-1, Part I, Appendix C, Table F. <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

<p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''

<p class="MapTitleContinued"> 2. Adverse Action Resulting From Clear and Unmistakable Error or Severance of Service Connection, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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m.   Notification of VR&E and VHA
<p class="MsoBlockText">Send a copy of the notice of proposed adverse action to the
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      Vocational Rehabilitation and Employment (VR&E) activity for appropriate action, if evidence indicates the veteran receives training under 38 U.S.C. Chapter 31, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      Chief, Medical Administration Service or equivalent, at the clinic servicing the regional office (RO) for updating treatment eligibility records, as a change in the veteran’s status may affect his/her eligibility for treatment.

<p class="MsoBlockText">

<p class="MsoBlockText">If the veteran is hospitalized at VA expense, see AMIE User Guide for instructions. Send the hospital a completed VA Form 21-653, Notice of Change in Status of Beneficiary Receiving Hospital or Domiciliary Care.

<p class="MsoBlockText">

<p class="MsoBlockText">Important:   Reduction of an SC evaluation or severance of service connection may affect entitlement under another VA program. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt"> '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
 * }

3.   Reductions in Disability Evaluations Under 38 CFR 3.105(e)
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Introduction
<p class="MsoBlockText">This topic contains information on reductions in disability evaluations, including
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      what determines the appropriate award action

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      when 38 CFR 3.105(e) applies

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      initial rating activity action

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      when 38 CFR 3.105(e) does not apply

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the correct notification action for proposed reductions

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      initial notification

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the action taken if the veteran files a notice of disagreement (NOD) before the final decision is made

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the action taken based on the response from the veteran

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      withdrawing a proposal to reduce an evaluation under 38 CFR 3.105(e)

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the action taken on final ratings prepared under 38 CFR 3.105(e)

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      providing notification to the veteran

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      handling evidence received after the final rating is prepared, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      providing notification to adjust military retired pay. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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Change Date
<p class="MsoBlockText">September 8, 2009 <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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a.   What Determines the Appropriate Award Action
<p class="MsoBlockText">Rating decisions govern the type of award action, if any, taken by authorization.
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<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For information explaining rating procedures for reducing a previously assigned evaluation, see

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      M21-1MR, Part III, Subpart iv, 8.B

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      M21-1MR, Part III, Subpart iv, 8.C, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      M21-1MR, Part III, Subpart iv, 8.D. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
 * }

<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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b.   When 38 CFR 3.105(e) Applies
<p class="MsoBlockText" style="mso-list:skip">38 CFR 3.105(e) and the information in this topic apply only to reductions in compensation in running awards when a reduction or discontinuance of compensation results from
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<p class="MsoBlockText" style="mso-list:skip">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the reduction in the evaluation of an SC disability, or

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      loss of entitlement to a total rating based on individual unemployability.

<p class="MsoBlockText">

<p class="MsoBlockText">Example:   If one or more disability evaluations is increased or service connection is granted for a new disability, but the combined evaluation is reduced because of a reduction in the evaluation of another disability, then

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      award the increase from the applicable effective date, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      apply the provisions of 38 CFR 3.105(e) to propose reduction of the combined evaluation.

<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For more information on notification requirements for reduced evaluations, see Steltzel v. Mansfield, No. 2007-7109 (2007). <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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c.   Initial Rating Activity Action
<p class="MsoBlockText" style="mso-list:skip">The rating activity prepares a rating decision proposing changes in the evaluation(s) assigned to SC disabilities resulting in the reduction or discontinuance of benefits. This rating decision sets forth all material facts and reasons for the action.
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<p class="MsoBlockText" style="mso-list:skip">

<p class="MsoBlockText">The legend in the rating decision “PROPOSAL TO REDUCE EVALUATION(S)–38 CFR 3.105(e)” identifies the proposed evaluation and (if applicable) the proposed combined evaluation. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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d.   When 38 CFR 3.105(e) Does Not Apply
<p class="MsoBlockText">Use the table below to determine when 38 CFR 3.105(e) does not apply and the appropriate action in three different situations. <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">   Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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e.   Correct Notification Action for Proposed Reductions or Discontinuances
<p class="MsoBlockText">Use the table below to determine the correct notification action for proposed reductions or discontinuances.
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<p class="MsoBlockText"> <p class="MsoNormal"> <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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f.   Initial Notification
<p class="MsoBlockText">Send a cover letter with the rating decision to the veteran at the latest address of record informing him/her of the
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      proposed action and giving detailed reasons for the action

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      60-day period in which he/she may present new evidence as to why the proposed action should not be taken, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      proposed date of the reduction which is the last day of the month, 60 days after the veteran is notified of the final rating decision.

<p class="MsoBlockText">

<p class="MsoBlockText">Note:   Do not include language about minimizing the overpayment, because no overpayment will be created by the award action.

<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For information on how apportionments may be affected by reductions under 38 CFR 3.105(e), see M21-1MR, Part III, Subpart v, 3. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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g.   Action Taken If a Veteran Files an NOD Before a Final Decision Is Made
<p class="MsoBlockText">Proposals may not be appealed. Only final actions may be appealed.
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<p class="MsoBlockText">

<p class="MsoBlockText">If a veteran files a notice of disagreement (NOD) before a final decision is made, explain in a letter that only final actions, not proposed actions, may be appealed. If the NOD is received during the last 10 days of the 60-day due process period, explain this in the final notice rather than sending a separate letter.

<p class="MsoBlockText">

<p class="MsoBlockText">Important:   If the veteran submits supporting evidence with an NOD, refer the evidence to the rating activity. There is no need to explain the NOD is premature until the rating activity makes a decision on the new evidence. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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h.   Action Taken Based on the Response From the Veteran
<p class="MsoBlockText" style="mso-list:skip">Use the information below to determine the action to take based on the veteran’s response to the notice of proposed action. <p class="MsoNormal" style="mso-list:skip"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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i.   Withdrawing a Proposal to Reduce an Evaluation Under 38 CFR 3.105(e)
<p class="MsoBlockText">The actions required to withdraw a proposal to reduce an evaluation depend upon who withdraws the proposal.
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<p class="MsoBlockText">

<p class="MsoBlockText">Use the information below to determine the action to take to withdraw a proposal to reduce an evaluation under 38 CFR 3.105(e). <p class="MsoNormal"> <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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j.   Action Taken on Final Ratings Prepared Under 38 CFR 3.105(e)
<p class="MsoBlockText">Use the information below to determine the actions to take on final ratings prepared under 38 CFR 3.105(e).
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<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For a list of reason codes to use in an amended award to reduce or discontinue payments, see M21-1, Part I, Appendix C, Table F. <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

<p class="MsoNormal"> <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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k.   Providing Notification to the Veteran
<p class="MsoBlockText">When the rating activity makes the final decision
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      send the beneficiary written notice, even if the proposed action is not taken

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      clearly explain the

<p class="BulletText2" style="mso-list:l0 level1 lfo2"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      decision

<p class="BulletText2" style="mso-list:l0 level1 lfo2"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      effective date, and

<p class="BulletText2" style="mso-list:l0 level1 lfo2"><span style="font-size:10.0pt;font-family:Symbol;mso-fareast-font-family:Symbol;  mso-bidi-font-family:Symbol"> -      reason for the decision

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      provide procedural and appellate rights, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      send a copy of the letter to the VR&E activity for appropriate action if evidence indicates that the veteran is receiving training under 38 U.S.C. Chapter 31. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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l.   Handling Evidence Received After Final Rating Prepared
<p class="MsoBlockText">Use the table below to determine what steps to take if evidence is received after the final rating is prepared but prior to the effective date of reduction. <p class="MsoNormal"> <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 3. Reductions in Disability Evaluations Under 38 CFR 3.105(e), Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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m.   Providing Notification to Adjust Military Retired Pay
<p class="MsoBlockText">If the veteran waived all, or a portion of, military retired pay to receive disability compensation, the military retired pay is adjusted or resumed accordingly by the retired pay center upon receipt of the data exchange transaction generated by the award action.
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<p class="MsoBlockText">

<p class="MsoBlockText">Note:   Using special law (SL) code 06 in the award automatically generates a notice to the retired pay center. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt"> '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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4.   Awards Under Graduated Tuberculosis (TB) Ratings
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Introduction
<p class="MsoBlockText">This topic contains information on awards under graduated tuberculosis (TB) ratings, including
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the repeal of graduated ratings for inactive TB

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the definition of graduated rating

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      handling ratings involving a reduced evaluation for inactive TB

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      the action to take when the graduation reaches 0 percent, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      notification of Department of Veterans Affairs (VA) outpatient clinics. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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Change Date
<p class="MsoBlockText">September 29, 2006 <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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a.   Repeal of Graduated Ratings for Inactive TB
<p class="MsoBlockText">Public Law (PL) 90-493 repealed sections 38 U.S.C. 314(q) and 38 U.S.C. 356 that provided graduated ratings for inactive tuberculosis (TB).
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<p class="MsoBlockText">

<p class="MsoBlockText">Important:   The repealed sections still apply to any veteran who was receiving, or entitled to receive, compensation for TB on August 19, 1968, under 38 CFR 3.959. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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b.   Definition:   Graduated Rating
<p class="MsoBlockText">A graduated rating is a gradual reduction in a disability evaluation for a disease that has moved from the active to the inactive stage. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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c.   Handling Ratings Involving a Reduced Evaluation for Inactive TB
<p class="MsoBlockText">If a rating decision reduces a veteran’s evaluation for SC TB because it is inactive
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      prepare an amended award to input the

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     two-year, 100-percent evaluation, and

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     graduated or residual evaluations assigned for the future

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      use the first day of the current month for the first entry of current award data, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      inform the veteran of the award action and that the 100-percent evaluation may be reduced at an earlier date if he/she fails to

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     report for an examination scheduled by the Department of Veterans Affairs (VA), and/or

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     follow the prescribed treatment. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">   Continued on next page '''<span style="font-size:16.0pt; mso-bidi-font-size:10.0pt;font-family:"Arial","sans-serif";mso-fareast-font-family: "Times New Roman";mso-bidi-font-family:"Times New Roman";mso-ansi-language: EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA"> '''
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<p class="MapTitleContinued"> 4. Awards Under Graduated Tuberculosis (TB) Ratings, Continued <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">

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d.   Action to Take When the Graduation Reaches 0 Percent
<p class="MsoBlockText">The monthly rate reduces to $67 (or $54 for the peacetime era (PTE) rate if prior to July 1, 1973) on the effective date of graduation to the 0 percent evaluation. Use
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      SMC code 36 in the rating data on the 301 screen with the 0 percent evaluation effective date, and

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      reason code 34 for the award line on the 403 screen.

<p class="MsoBlockText">

<p class="MsoBlockText">If other noncompensable disabilities exist, notify the veteran that when the evaluation reduces to 0 percent, he/she may submit evidence from a private physician to show that the tuberculosis warrants a compensable evaluation.

<p class="MsoBlockText">

<p class="MsoBlockText">Rationale:   VA cannot grant compensation in lieu of the protected amount unless the disabilities combine to provide an evaluation of at least 10 percent. <p class="ContinuedOnNextPa" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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e.   Notification of VA Outpatient Clinics
<p class="MsoBlockText">If a veteran is granted the
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<p class="MsoBlockText">

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      two-year, 100-percent evaluation for inactive TB, notify the Chief, Medical Administration Services or equivalent, of the outpatient clinic responsible for the veteran’s follow-up care, or

<p class="BulletText1" style="mso-list:l2 level1 lfo3"> ·      one-year, 100-percent evaluation for inactive TB, then

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     send the outpatient clinic responsible for the veteran’s follow-up care a copy of the rating initially granting service connection for TB, and

<p class="BulletText2" style="mso-list:l1 level1 lfo4"> -     do not send any other notice to the Chief, Medical Administration Services, of the outpatient clinic responsible for the veteran’s follow-up care.

<p class="MsoBlockText">

<p class="MsoBlockText">Reference:   For more information on TB, see M21-1MR, Part III, Subpart iv, 4.D.17. <p class="BlockLine" style="margin-left:0in;mso-border-between:.75pt solid windowtext; mso-padding-between:1.0pt">
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