Citation Nr: 0737810 Decision Date: 11/30/07 Archive Date: 12/06/07 DOCKET NO. 03-33 383 ) DATE ) MERGED APPEAL ) ) On appeal from the Department of Veterans Affairs Regional Office in Cleveland, Ohio THE ISSUES 1. Entitlement to restoration of service connection for Hepatitis C. 2. Entitlement to a compensable evaluation for Hepatitis C, on appeal from the initial grant of service connection, for the period from February 28, 2002, to July 31, 2002. REPRESENTATION Appellant represented by: Michael J. Mooney, Attorney ATTORNEY FOR THE BOARD Elizabeth Jalley, Associate Counsel INTRODUCTION The veteran served on active duty from April 1976 to May 1978. This matter comes before the Board of Veterans' Appeals (Board) as a merged appeal from October 2002 and February 2006 rating decisions of the Regional Office (RO) of the Department of Veterans Affairs (VA) in Cleveland, Ohio. In October 2002, the RO granted service connection for Hepatitis C. An initial noncompensable rating was assigned from February 28, 2002, to July 31, 2002, and a 100 percent rating was assigned effective August 1, 2002. The veteran appealed the assignment of a noncompensable rating for the period ending on July 31, 2002; he perfected this appeal in October 2003. The February 2006 rating decision severed the veteran's service connection for Hepatitis C. effective June 1, 2006. The veteran perfected an appeal of this issue in June 2006. In April 2005, the Board remanded the claim of entitlement to an initial compensable rating for Hepatitis C for additional development, and the case was returned for further appellate review. In May 2007, both of the claims that are currently before the Board were remanded so that the veteran could be scheduled for a personal hearing. In August 2007, the veteran submitted a written notice stating that he did not want a hearing and requesting that his appeal be returned to the Board. The Board therefore considers the hearing request withdrawn. See 38 C.F.R. § 20.704(e) (2007). Both claims have been returned to the Board for further appellate review. FINDINGS OF FACT 1. The veteran was granted service connection for Hepatitis C by rating decision in October 2002 because the competent evidence of record had indicated that the veteran's Hepatitis C was directly related to military service. 2. A February 2006 rating decision severed service connection for Hepatitis C. 3. The granting of service connection for Hepatitis C was not clearly and unmistakably erroneous. 4. During the period from February 28, 2002, to July 31, 2002, the veteran's Hepatitis C was manifested by daily fatigue, dietary restrictions, and hepatomegaly. CONCLUSIONS OF LAW 1. The severance of the award of service connection for Hepatitis C was improper. 38 U.S.C.A. §§ 105(a), 1131, 5109A, 7111 (West 2002); 38 C.F.R. §§ 3.1 (n), 3.105, 3.301, 3.303 (2007). 2. Criteria for an initial evaluation of 40 percent for Hepatitis C have been met. 38 U.S.C.A. §§ 1155, 5107 (West 2002); 38 C.F.R. § 4.114, Diagnostic Code 7354 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Duty to Notify and Assist Pursuant to the Veterans Claims Assistance Act of 2000 (VCAA), VA has a duty to notify claimants for VA benefits of information necessary to submit in order to complete and support a claim and has a duty to assist claimants in the development of evidence. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2006); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2007). However, as the disposition herein reached is favorable to the veteran to the extent indicated, the need to discuss VA's efforts to comply with the VCAA and implementing regulations at this juncture is obviated. Lastly, during the pendency of this appeal, the Court issued a decision in the consolidated appeal of Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006), which held that the VCAA notice requirements apply to all five elements of a service connection claim, including the rating and effective date of an award. These requirements have been inferred to apply to increased rating claims as well. For the reasons described below, an increased rating is being granted and an effective date will ultimately be assigned. As such, there is no prejudice to the veteran with respect to any notice deficiencies related to the rating or effective date. See Bernard v. Brown, 4 Vet. App. 384 (1993); Sutton v. Brown, 9 Vet. App. 553 (1996); see also 38 C.F.R. § 20.1102 (harmless error); Sanders v. Nicholson, No. 06-7001 (Fed. Cir. May 16, 2007); Simmons v. Nicholson, No. 06-7092 (Fed. Cir. May 16, 2007). Restoration of Service Connection Once service connection has been granted, it can be severed only upon the Secretary's showing that the final rating decision granting service connection was clearly and unmistakably erroneous, and only after certain procedural safeguards have been met. 38 C.F.R. § 3.105(d); see also Daniels v. Gober, 10 Vet. App. 474, 478 (1997); Graves v. Brown, 6 Vet. App. 166 (1994). Specifically, when severance of service connection is warranted, a rating proposing severance will be prepared setting forth all material facts and reasons. The veteran will be notified at his or her latest address of record of the contemplated action and furnished detailed reasons therefore and will be given 60 days for the presentation of additional evidence to show that service connection should be maintained. 38 C.F.R. §§ 3.103(b)(2), 3.105(d); see Baughman v. Derwinski, 1 Vet. App. 563, 566 (1991). The Court has held that 38 C.F.R. § 3.105(d) places the same burden of proof on VA when it seeks to sever service connection as 38 C.F.R. § 3.105(a) places upon a claimant seeking to have an unfavorable previous determination overturned. See Baughman, supra. Clear and unmistakable (CUE) is defined as "a very specific and rare kind of 'error.' It is the kind of error, of fact or of law, that when called to the attention of later reviewers compels the conclusion, to which reasonable minds could not differ, that the result would have been manifestly different but for the error." Fugo v. Brown, 6 Vet. App. 40, 43 (1993). To determine whether CUE was present under 38 C.F.R. § 3.105(a) in a prior determination, (1) either (a) the correct facts, as they were known at the time, were not before the adjudicator (i.e., more than a simple disagreement as to how the facts were weighed or evaluated) or (b) the statutory or regulatory provisions extant at the time were incorrectly applied; (2) the error must be undebatable and of the sort which, had it not been made, would have manifestly changed the outcome at the time it was made; (3) and a determination that there was clear and unmistakable error must be based on the record and law that existed at the time of the prior adjudication in question. Damrel v. Brown, 6 Vet. App. 242, 245 (1994); Russell v. Principi, 3 Vet. App. 310, 313-14 (1992) (en banc). However, it has been held that although the same standards apply in a determination of CUE error in a final decision under section 3.105(a) and a determination as to whether a decision granting service connection was the product of CUE for the purpose of severing service connection under section 3.105(d), section 3.105(d) does not limit the reviewable evidence to that which was before the RO in making its initial service connection award. Daniels, 10 Vet. App. at 480. The Court reasoned that because 38 C.F.R. § 3.105(d) specifically states that "[a] change in diagnosis may be accepted as a basis for severance," the regulation clearly contemplates the consideration of evidence acquired after the original granting of service connection. Thus, "[i]f the Court were to conclude that ... a service-connection award can be terminated pursuant to § 3.105(d) only on the basis of the law and record as it existed at the time of the award thereof, VA would be placed in the impossible situation of being forever bound to a prior determination regardless of changes in the law or later developments in the factual record." Id. Upon review, with regard to the issuance of the proposed rating decision and notice of severance, it appears that VA has complied with relevant due process considerations with respect to the reduction, and the veteran has not contended otherwise. See 38 C.F.R. § 3.105(d). Service connection may be established for disability resulting from personal injury suffered or disease contracted in line of duty in the active military, naval, or air service. 38 U.S.C.A. §§ 1110, 1131; 38 C.F.R. § 3.303(a). If a condition noted during service is not shown to be chronic, then generally, a showing of continuity of symptoms after service is required for service connection. 38 C.F.R. § 3.303(b). Service connection may also be granted for a disease first diagnosed after service when all of the evidence establishes that the disease was incurred in service. 38 C.F.R. § 3.303(d). To prevail on the issue of service connection there must be (1) medical evidence of a current disability; (2) medical evidence, or in certain circumstances, lay evidence of in-service incurrence or aggravation of a disease or injury; and (3) evidence of a nexus between the in-service injury or disease and the current disability. Hickson v. West, 12 Vet. App. 247, 253 (1999). Direct service connection may be granted only when a disability was incurred or aggravated in line of duty, and not the result of the veteran's own willful misconduct; or, for claims filed after October 31, 1990, in which disability did not result from the abuse of alcohol or drugs. 38 U.S.C.A. § 105(a), 38 C.F.R. § 3.301(a). For compensation purposes, the residuals of venereal disease are not to be considered the result of willful misconduct. 38 U.S.C.A. § 105(a); 38 C.F.R. § 3.301(c)(1). Risk factors for hepatitis C include intravenous (IV) drug use, blood transfusions before 1992, hemodialysis, intranasal cocaine use, high-risk sexual activity, accidental exposure while a health care worker, and various kinds of percutaneous exposure such as tattoos, body piercing, acupuncture with non-sterile needles, shared toothbrushes or razor blades. VBA letter 211B (98-110) November 30, 1998. In an October 2002 rating decision, the veteran was granted service connection for Hepatitis C based on an October 2002 VA examination report stating that it is likely that the veteran's current chronic active hepatitis is the same hepatitis that was first manifested during his military service. The veteran was assigned a 100 percent disability rating, effective August 1, 2002, and a noncompensable rating from February 28, 2002, to July 31, 2002. The July 2002 and October 2002 examination reports, prepared by the same examiner, noted that the veteran's service medical records reflect he was diagnosed with hepatitis during service. The examiner noted the following risk factors: the veteran admitted to having no tattoos; he admitted to having sexual relations with a prostitute while stationed in Germany; he claimed that he had a blood transfusion for a severe scalp laceration early in 1977; he stated that he had no history of intravenous drug use before being diagnosed with Hepatitis C, but that he has done intravenous drugs since the diagnosis; he had a history of polysubstance abuse. The October 2002 report notes that the veteran's service medical records show he was treated for a scalp laceration, but there was no mention of a blood transfusion. The examiner also noted other documentation of illicit drug use and a history of 50- 75 sexual partners during his lifetime. The examiner further stated that a significant portion of the veteran's promiscuity and drug use occurred during service. In April 2004, the RO issued a rating decision proposing to sever the veteran's service connection based on willful misconduct. This rating decision states that service connection had initially been granted based on the alleged in-service transfusion required for treating a scalp laceration. Review of the veteran's service medical records, however, failed to show that the veteran underwent a blood transfusion for this laceration. The rating decision notes that the July 2002 VA examination report lists the veteran's risk factors as IV drug abuse, sexual relations with prostitutes while stationed in Germany, and history of polysubstance abuse. The rating decision states that the veteran admitted to using IV drugs both prior to and following the diagnosis of Hepatitis C. Service connection was severed in February 2006, effective June 1, 2006. As stated above, the first step in demonstrating clear and unmistakable error clear and unmistakable error requires that either (a) the correct facts, as they were known at the time, were not before the adjudicator; or (b) the statutory or regulatory provisions extant at the time were incorrectly applied. The RO has alleged a specific error of fact in this case, which the Board will consider, as well as any applicable errors of law. The RO has alleged an error of fact, VA's failure to recognize that the veteran's service medical records did not indicate he had a blood transfusion in service, as its basis for severing service connection. The Board notes that the veteran's service medical records were on file at the time of the October 2002 rating decision. A November 1976 record reflects the veteran's scalp laceration was cleansed and sutured, but no mention is made of a blood transfusion. It is unclear, however, that the veteran was granted service connection in October 2002 based on the assumption that he had received a blood transfusion in service. No mention of a blood transfusion is made in the October 2002 rating decision. This inconsistency was specifically pointed out to the RO in the October 2002 VA examination report. It therefore appears that considering severance on this basis amounts to little more than a reconsideration of how the evidence was originally weighed. Mere disagreement as to how the facts were weighed or evaluated cannot form the basis of a claim of clear and unmistakable error. Luallen v. Brown, 8 Vet. App. 92 (1995). Therefore, the Board does not believe that the alleged error of fact is a legitimate basis for clear and unmistakable error. However, the Board does believe that an error of law has been committed in this case. While it is clear that service connection for Hepatitis C was based on finding of nexus, there is no indication that the RO even contemplated the question of willful misconduct. See 38 U.S.C.A. § 105; 38 C.F.R. § 3.301. The October 2002 rating decision discusses none of the veteran's risk factors, and his past drug use is not even mentioned or rejected as the likely cause of his Hepatitis C. A majority of the discussion in the October 2002 rating decision involves evaluating the severity of the veteran's symptoms and assigning an appropriate disability rating, not in determining the cause of the veteran's disability. The Board, therefore, believes that the RO failed to consider 38 U.S.C.A. § 105 and 38 C.F.R. § 3.301, the provisions relating to willful misconduct, in granting service connection for Hepatitis C; this constitutes an error of law that must be further addressed. The Board must next consider whether the alleged error in law, that is, the failure to consider whether the veteran's Hepatitis C was incurred due to his own willful misconduct, was an undebatable error that, had it not have been made, would have manifestly changed the outcome of this claim. The Board will therefore consider whether it is indisputable that the veteran's Hepatitis C can be attributed to willful misconduct. The veteran's service medical record reflect that he was treated for drug abuse while he was in service. At various times, the veteran has disputed whether he used intravenous drugs prior to contracting Hepatitis C. Even assuming that the veteran was a habitual user of intravenous drugs prior to contracting Hepatitis C, however, the veteran's remaining risk factors render the Board incapable of concluding that the veteran "undebatably" contracted Hepatitis C from intravenous drug use. Specifically, the Board notes that the veteran admitted having sex with a prostitute while in Germany, and the October 2002 VA examination report indicates the veteran was promiscuous while in service. As noted above, the residuals of venereal disease are not considered to be due to willful misconduct. See 38 U.S.C.A. § 105; 38 C.F.R. § 3.301. From the competent evidence of record, it does not appear indisputable that the veteran contracted Hepatitis C through drug use and not through unprotected sex. A clear and unmistakable error must be undebatable and one where reasonable minds could only conclude that the original rating decision was fatally flawed at the time it was made. After a review of the record, the Board concludes that the October 2002 rating decision was not clearly and unmistakably erroneous. Accordingly, restoration of service connection for Hepatitis C is warranted. 38 U.S.C.A. §§ 1110, 5103, 5107; 38 C.F.R. § 3.105. Increased Rating Having determined that the veteran is entitled to service connection for Hepatitis C, the Board now turns to the issue of whether the veteran should receive a compensable rating for this disability from February 28, 2002, the date from which service connection became effective, to July 31, 2002, the day before the veteran's disability rating increased to 100 percent. Disability evaluations are determined by comparing a veteran's present symptomatology with criteria set forth in the VA's Schedule for Rating Disabilities, which assigns ratings based on the average impairment of earning capacity resulting from a service-connected disability. 38 U.S.C.A. § 1155; 38 C.F.R. Part 4 (2007). An evaluation of the level of disability present also includes consideration of the functional impairment of the appellant's ability to engage in ordinary activities, including employment. 38 C.F.R. § 4.10 (2007). The governing regulations provide that the higher of two evaluations will be assigned if the disability more closely approximates the criteria for that rating. Otherwise, the lower rating is assigned. 38 C.F.R. § 4.7 (2007). The veteran's entire history is reviewed when making disability evaluations. See generally 38 C.F.R. 4.1; Schafrath v. Derwinski, 1 Vet. App. 589 (1995). When an initial rating award is at issue, as is the case here, a practice known as "staged" ratings may apply. That is, at the time of an initial rating, separate ratings can be assigned for separate periods of time based on the facts found. Fenderson v. West, 12 Vet. App. 119 (1999). The veteran's hepatitis C is rated as noncompensably disabling under 38 C.F.R. § 4.114, Diagnostic Code 7354, hepatitis C (or non-A, non-B hepatitis). A noncompensable disability rating applies to nonsymptomatic hepatitis C. Diagnostic Code 7354 provides for a 10 percent disability rating with intermittent fatigue, malaise, and anorexia, or; incapacitating episodes (with symptoms such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain) having a total duration of at lease one week, but less than two weeks, during the past 12- month period. A 20 percent disability rating is warranted with symptomatology of daily fatigue, malaise, and anorexia (without weight loss or hepatomegaly), requiring dietary restriction or continuous medication, or; incapacitating episodes (with symptoms such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain) having a total duration of at least two weeks, but less than four weeks, during the past 12-month period. A 40 percent disability rating is warranted with symptomatology of daily fatigue, malaise, and anorexia, with minor weight loss and hepatomegaly, or; incapacitating episodes (with symptoms such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain) having a total duration of at least four weeks, but less than six weeks, during the past 12-month period. A 60 percent disability rating is warranted with symptomatology of daily fatigue, malaise, and anorexia, with substantial weight loss (or other indication of malnutrition), and hepatomegaly, or; incapacitating episodes (with symptoms such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain) having a total duration of at least six weeks during the past 12-month period, but not occurring constantly. A 100 percent disability rating is warranted with symptomatology of serologic evidence of hepatitis C infection and the following signs and symptoms due to hepatitis C infection: near-constant debilitating symptoms (such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain). Note (1): Evaluate sequelae, such as cirrhosis or malignancy of the liver, under an appropriate diagnostic code, but do not use the same signs and symptoms as the basis for evaluation under DC 7354 and under a diagnostic code for sequelae. See (§ 4.14). 38 C.F.R. § 4.114 (2007), Diagnostic Code 7354. Note (2): For purposes of evaluating conditions under diagnostic code 7354, "incapacitating episode" means a period of acute signs and symptoms severe enough to require bed rest and treatment by a physician. 38 C.F.R. § 4.114 (2007), Diagnostic Code 7354. For purposes of evaluating conditions in § 4.114, the term "substantial weight loss" means a loss of greater than 20 percent of the individual's baseline weight, sustained for three months or longer; and the term "minor weight loss" means a weight loss of 10 to 20 percent of the individual's baseline weight, sustained for three months or longer. The term "inability to gain weight" means that there has been substantial weight loss with inability to regain it despite appropriate therapy. "Baseline weight" means the average weight for the two-year period preceding onset of the disease. 38 C.F.R. § 4.112 (2007). In the case at hand, VA medical records and the July 2002 VA examination report support awarding a 40 percent disability rating for the entire period that is currently on appeal. VA medical records from throughout this period reflect complaints of fatigue and increasing right upper quadrant pain. A January 2002 medical record specifically notes an enlarged, tender liver and assesses hepatomegaly. The veteran's fatigue is noted to be significant enough to interfere with activities of daily living. A February 2002 notation states that the veteran denied anorexia. Another February 2002 medical record notes that the veteran was educated about the importance of living a healthy lifestyle in connection with his hepatitis C, and he is counseled about having a healthy diet elsewhere. The July 2002 VA examination report states that the veteran has not required hospitalization for his liver condition. It indicates that the veteran has had mild right upper quadrant tenderness and a liver span at 14 centimeters by percussions. When applied to the rating criteria for hepatitis C, the veteran's symptoms warrant a disability rating of 40 percent for the entire period on appeal. As noted above, Diagnostic Code 7354 assigns a 40 percent disability rating for hepatitis C with symptomatology of daily fatigue, malaise, and anorexia, with minor weight loss and hepatomegaly. The veteran's medical records reflect hepatomegaly and fatigue on a daily basis. While anorexia is not found, the Board believes that the veteran's symptoms most closely approximate those that are listed under the 40 percent rating because, in addition to satisfying the 20 percent rating criteria, including being on a restricted diet, the presence of hepatomegaly warrants the higher, 40 percent, disability rating. The Board has considered whether a disability rating of 60 percent or higher would be more appropriate. However, in the absence of substantial weight loss, the Board does not believe that the 60 percent rating is warranted. Furthermore, the Board notes that the veteran's records do not reflect the types of incapacitating episodes that would warrant evaluation based on the duration of incapacitating episodes. Therefore, the Board believes that the 40 percent disability rating is most appropriate for the period from February 28, 2002, to July 31, 2002. The evidence in this case fails to show marked interference with employment due to hepatitis C beyond that contemplated in the assigned rating, and the veteran has never been hospitalized for this disability. Therefore, in the absence of evidence of an exceptional disability picture, referral for consideration of an extraschedular evaluation is not warranted. See 38 C.F.R. § 3.321 (2007). ORDER Service connection for hepatitis C is restored subject to the law and regulations governing the payment of monetary benefits. A 40 percent rating, but no higher, is granted for the veteran's service-connected hepatitis C for the period from February 28, 2002, to July 31, 2002, subject to the laws and regulations governing the payment of monetary benefits. ____________________________________________ F. JUDGE FLOWERS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs