Citation Nr: 1323074 Decision Date: 07/19/13 Archive Date: 07/24/13 DOCKET NO. 08-07 980 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Pittsburgh, Pennsylvania THE ISSUES 1. Whether the recoupment of severance pay by withholding VA disability compensation benefits was proper. 2. Entitlement to higher initial ratings for the components of the Veteran's right knee disability, assigned a single 10 percent rating from August 4, 2005, to August 4, 2009, and ratings of 30 percent, 20 percent and 10 percent from August 5, 2009. 3. Entitlement to service connection for psychiatric disability. ATTORNEY FOR THE BOARD S. M. Marcus, Counsel INTRODUCTION The Veteran served on active duty from October 1984 to September 1991. This appeal is before the Board of Veterans' Appeals (Board) from a June 2007 administrative decision and a June 2007 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Phoenix, Arizona. Jurisdiction over the case was subsequently transferred to the RO in Pittsburgh, Pennsylvania. The Veteran's service connected right knee disability was originally assigned a single 10 percent rating in the June 2007 rating decision. In a January 2010 rating decision, the Veteran's right knee disability was assigned ratings of 30 percent, 20 percent, and 10 percent, effective August 5, 2009. This did not satisfy the Veteran's appeal. The Veteran requested a hearing before the Board on his January 2008 substantive appeal form. A hearing was scheduled in March 2013, but the Veteran failed to appear for the hearing without explanation. He has not requested that the hearing be rescheduled. Therefore, his request for a Board hearing is deemed withdrawn. The issue of entitlement to service connection for psychiatric disability is addressed in the REMAND that follows the ORDER section of this decision. FINDINGS OF FACT 1. The Veteran received separation pay in the amount of $4,902.66 upon his discharge from service in November 1991; the amount of $3,554.43 was deducted from his VA compensation benefits. 2. Throughout the period of the claim, the Veteran's right knee disability has been manifested by chronic severe pain, severe weakness, and severe lateral instability. CONCLUSIONS OF LAW 1. The recoupment of severance pay by withholding the Veteran's VA disability compensation was proper. 10 U.S.C.A. §§ 1174, 1212 (West 2002 & Supp. 2012); 38 C.F.R. § 3.700 (2012). 2. The criteria for initial ratings of 60 percent and 30 percent, but no higher, for all components of the Veteran's right knee disability have been met. 38 U.S.C.A. § 1155 (West 2002); 38 C.F.R. §§ 3.321, 4.1, 4.2, 4.14, 4.40, 4.45, 4.71a, Diagnostic Codes (DCs) 5055, 5257 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), codified in pertinent part at 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2012), and the pertinent implementing regulation, codified at 38 C.F.R. § 3.159 (2012), provide that VA will assist a claimant in obtaining evidence necessary to substantiate a claim but is not required to provide assistance to a claimant if there is no reasonable possibility that such assistance would aid in substantiating the claim. They also require VA to notify the claimant and the claimant's representative, if any, of any information, and any medical or lay evidence, not previously provided to the Secretary that is necessary to substantiate the claim. As part of the notice, VA is to specifically inform the claimant and the claimant's representative, if any, of which portion, if any, of the evidence is to be provided by the claimant and which part, if any, VA will attempt to obtain on behalf of the claimant. The Board also notes the United States Court of Appeals for Veterans Claims (Court) has held that the plain language of 38 U.S.C.A. § 5103(a) (West 2002), requires that notice to a claimant pursuant to the VCAA be provided 'at the time' that or 'immediately after' VA receives a complete or substantially complete application for VA-administered benefits. Pelegrini v. Principi, 18 Vet. App. 112, 119 (2004). The timing requirement enunciated in Pelegrini applies equally to the initial-disability-rating and effective-date elements of a service-connection claim. Dingess v. Nicholson, 19 Vet. App. 473 (2006). With regard to the recoupment issue, the pertinent facts in this case are not in dispute and the law is dispositive. Consequently, there is no additional evidence that could be obtained to substantiate the claim, and no further action is required to comply with the VCAA or the implementing regulation. See Manning v. Principi, 16 Vet. App. 534, 542 (2002); VAOPGCPREC 5-2004 (June 23, 2004). With regard to the rating claim on appeal, the record reflects that the Veteran was provided all required notice in letters sent in November 2005 and February 2006, prior to the rating decision on appeal. The Board also concludes VA's duty to assist has been satisfied. The Veteran's service treatment records and VA medical records are of record. The Veteran has not identified any outstanding, existing records that could be obtained to support the claim. The Board is also unaware of any such evidence. The record also reflects that the Veteran was provided VA examinations in 2007 and 2009. The report of the 2009 VA examination provides all information required to properly rate the components of the Veteran's right knee disability. Accordingly, the Board will address the merits of the claims. Recoupment of Severance Pay Legal Criteria The recoupment of a veteran's separation pay from his or her VA disability compensation is required by 10 U.S.C.A. § 1174(h)(2), which states that a member who has received separation pay under this section, or severance pay or readjustment pay under any other provision of law, based on service in the armed forces shall not be deprived, by reason of his receipt of such separation pay, severance pay, or readjustment pay, of any disability compensation to which he or she is entitled under the laws administered by VA, but there shall be deducted from that disability compensation an amount equal to the total amount of separation pay, severance pay, and readjustment pay received. The implementing regulation, 38 C.F.R. § 3.700(a)(5)(i), provides that, "[w]here entitlement to disability compensation was established on or after September 15, 1981, a Veteran who has received separation pay may receive disability compensation for disability incurred in or aggravated by service prior to the date of the receipt of separation pay subject to recoupment of the separation pay. Where payment of separation pay or special separation benefits under section 1174a was made after September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits less the amount of Federal income tax withheld from such pay." 38 C.F.R. § 3.700(a)(5)(i). An opinion of the VA General Counsel, VAOGCPREC 14-92, concluded that, "[i]n accordance with the provisions of 10 U.S.C.A. § 1174 and 38 C.F.R. § 3.700, VA disability compensation should be offset to recoup the amount of special separation benefits received by a former member of the armed forces." See also VAOGCPREC 12-96. VAOGCPREC 12-96 held that 10 U.S.C.A. § 1174(h)(2) requires that VA recoup from a Veteran's VA disability compensation the amount of "nondisability severance pay " received by the Veteran under section 631 of Pub. L. No. 96-513. Analysis The Veteran was separated from active service in September 1991. His DD Form 214 indicates that he received separation pay in the amount of $4,902.66. The Veteran filed a claim seeking VA compensation in August 2005. In a June 2007 rating decision, service connection and a 10 percent rating were granted for a right knee disability, effective August 4, 2005. In June 2007, VA informed the Veteran of the June 2007 rating decision, and that VA was withholding benefits equal to the amount of separation pay received minus the amount of Federal income tax withheld for a total of $3,554.43. The recoupment of an amount equivalent to the Veteran's separation pay from his VA disability compensation is required by Congress under 10 U.S.C.A. § 11174(h)(2). The Board finds that the law, as written by Congress and implemented by VA regulation, has been correctly applied in this case. The recoupment of the VA compensation in the amount of separation pay received by withholding in monthly allotments payments of disability compensation benefits, is required by law. Accordingly, this claim must be denied. Higher Initial Ratings Legal Criteria Disability evaluations are determined by the application of a schedule of ratings that is based on average impairment of earning capacity. 38 U.S.C.A. § 1155. Percentage evaluations are determined by comparing the manifestations of a particular disorder with the requirements contained in the VA's Schedule for Rating Disabilities (Rating Schedule), 38 C.F.R. Part 4. The percentage ratings contained in the Rating Schedule represent, as far as can practically be determined, the average impairment in earning capacity resulting from such disease or injury and their residual conditions in civilian occupations. 38 U.S.C.A. § 1155; 38 C.F.R. § 4.1. Where there is a question as to which of two evaluations shall be applied, the higher evaluation will be assigned if the disability picture more nearly approximates the criteria required for that rating. Otherwise, the lower rating will be assigned. 38 C.F.R. § 4.7. Traumatic arthritis is rated as degenerative arthritis. 38 C.F.R. § 4.71a, Diagnostic Code 5010. Degenerative arthritis established by X-ray findings will be rated on the basis of limitation of motion under the appropriate diagnostic code(s) for the specific joint(s) involved. 38 C.F.R. § 4.71a, Diagnostic Code 5003. Ankylosis of a knee warrants a 30 percent evaluation if it is at a favorable angle in full extension, or in slight flexion between 0 and 10 degrees. Ankylosis of a knee warrants a 40 percent evaluation if it is in flexion between 10 and 20 degrees or a 50 percent evaluation if it is in flexion between 20 and 45 degrees. Extremely unfavorable ankylosis of a knee at an angle of 45 degrees or more warrants a 60 percent evaluation. 38 C.F.R. § 4.71a, Diagnostic Code 5256. Knee impairment with recurrent subluxation or lateral instability warrants a 10 percent evaluation if it is slight, a 20 percent evaluation if it is moderate or a 30 percent evaluation if it is severe. 38 C.F.R. § 4.71a, Diagnostic Code 5257. Dislocated semilunar cartilage with frequent episodes of "locking," pain, and effusion into the joint warrants a 20 percent rating. 38 C.F.R. § 4.71a, Diagnostic Code 5258. Flexion of the leg limited to 60 degrees warrants a noncompensable rating, flexion limited to 45 degrees warrants a 10 percent rating, flexion limited to 30 degrees warrants a 20 percent rating, and flexion limited to 15 degrees warrants a 30 percent rating. 38 C.F.R. § 4.71a, Diagnostic Code 5260. Extension limited to 5 degrees warrants a noncompensable rating, extension limited to 10 degrees warrants a 10 percent rating, extension limited to 15 degrees warrants a 20 percent rating, extension limited to 20 degrees warrants a 30 percent rating, extension limited to 30 degrees warrants a 40 percent rating, and extension limited to 45 degrees warrants a 50 percent rating. 38 C.F.R. § 4.71a, Diagnostic Code 5261. Flexion of the knee to 140 degrees is considered full and extension to 0 degrees is considered full. See 38 C.F.R. § 4.71, Plate II. The evaluation of the same disability under various diagnoses is to be avoided. 38 C.F.R. § 4.14. 38 C.F.R. § 4.14 does not preclude the assignment of separate evaluations for separate and distinct symptomatology where none of the symptomatology justifying an evaluation under one diagnostic code is duplicative of or overlapping with the symptomatology justifying an evaluation under another diagnostic code. Esteban v. Brown, 6 Vet. App. 259, 262 (1994). VA's General Counsel has held that a claimant who has arthritis and instability of a knee may be rated separately under Diagnostic Codes 5003 and 5257, while cautioning that any such separate rating must be based on additional disabling symptomatology. VAOPGCPREC 23-97 (July 1997); VAOPGCPREC 9-98, (August, 1998). Moreover, the General Counsel has also held that separate ratings may be assigned for disability of the same joint under Diagnostic Codes 5260 (for limitation of flexion) and 5261 (for limitation of extension). VAOGCPREC 9-2004 (September, 2004). When an unlisted condition is encountered it will be permissible to rate under a closely related disease or injury in which not only the functions affected, but the anatomical localization and symptomatology are closely analogous. 38 C.F.R. § 4.20. Following the prosthetic replacement of the knee joint, a 100 percent rating will be assigned for one year. Thereafter, a 60 percent rating is warranted if there are chronic residuals consisting of severe painful motion or weakness in the affected extremity. With intermediate degrees of residual weakness, pain or limitation of motion, rate by analogy to Diagnostic Code 5256, 5261, or 5262, with a minimum rating of 30 percent. 38 C.F.R. § 4.71a, Diagnostic Code 5055. The combined rating for disabilities of an extremity shall not exceed the rating for the amputation at the elected level, were amputation to be performed. 38 C.F.R. § 4.63. Except as otherwise provided by law, a claimant has the responsibility to present and support a claim for benefits under laws administered by the Secretary. The Secretary shall consider all information and lay and medical evidence of record in a case before the Secretary with respect to benefits under laws administered by the Secretary. When there is an approximate balance of positive and negative evidence regarding any issue material to the determination of a matter, the Secretary shall give the benefit of the doubt to the claimant. 38 U.S.C.A. § 5107 (West 2002); 38 C.F.R. §§ 3.102, 4.3 (2012); see also Gilbert v. Derwinski, 1 Vet. App. 49, 53 (1990). To deny a claim on its merits, the evidence must preponderate against the claim. Alemany v. Brown, 9 Vet. App. 518, 519 (1996), citing Gilbert, 1 Vet. App. at 54. Factual Background and Analysis In accordance with 38 C.F.R. §§ 4.1, 4.2, 4.41, 4.42 (2012) and Schafrath v. Derwinski, 1 Vet. App. 589 (1991), the Board has reviewed all evidence of record pertaining to the history of the service-connected disability. The Board has found nothing in the historical record which would lead to the conclusion that the current evidence of record is not adequate for rating purposes. Moreover, the Board is of the opinion that this case presents no evidentiary considerations which would warrant an exposition of remote clinical histories and findings pertaining to this disability. The Veteran was initially afforded a VA examination in May 2007. He complained of pain, flare-ups multiple times a week, swelling, giving out two to three times a week, occasionally falling down (most recently two days prior), and weakness. The examiner noted the Veteran used a right knee brace, but otherwise used no other assistive devices. The examination disclosed an antalgic gait, pitting edema, barely visible scars, stable ligaments, no effusion, no crepitation, and no fatigability. Range of motion testing revealed normal extension (to 0 degrees) to 58 degrees flexion with pain. The Veteran was diagnosed with "mild" patella-femoral degenerative changes, but the examiner found "moderately severe to severe" functional impairment due mainly to chronic pain, but also with minimal weakness and some incoordination and limp. The Veteran submitted a statement immediately after this examination indicating his right knee disability was more severe than the examiner stated. For one, the Veteran explained he uses a motorized wheeled vehicle or personal wheelchair while grocery shopping or doing any sort of chore requiring prolonged standing or walking. The Veteran explained he wears his knee brace all the time due to ongoing instability and, in fact, was prescribed disability license plates by his primary care doctor. Although the 2007 VA examiner indicated the claims folder was reviewed, the findings were inconsistent with the Veteran's statements and, indeed, were contradictory in and of themselves. On the one hand, the examiner found significant functional impairment and severe chronic pain. On the other hand, the examiner found no change in range of motion on repetition despite the functional impairments noted and ultimately diagnosed the Veteran with a "mild" right knee disability. In light of the confusing findings and the Veteran's statements, the Veteran was afforded a new VA examination in November 2009. At that time the Veteran complained of constant pain and could barely walk or move his knee in any direction. The examiner noted the Veteran was hardly able to enter the office building. His walking, sitting, and overall functionality were severely limited. Certain movements, such as kneeling or squatting, were described as "impossible." In contrast to the 2007 VA examiner, the 2009 examiner noted that the Veteran's right knee disability had distinctly changed and worsened into a condition involving the entire right knee. Under normal circumstances, the examiner indicated the Veteran would need surgery, to include medial meniscus repair. Due to the Veteran's weight (he weighed over 300 pounds) and other non-service related disorders, the Veteran would need long-term preoperative preparation and care. On examination, the Veteran's right knee exhibited "severe" weakness, "permanent" stiffness, and "permanent" swelling. The examiner noted that the Veteran wears braces on his knees because of ongoing instability, frequent locking, and fatigability. The examiner also noted that the Veteran uses a cane daily and has a full-time sedentary job. Range of motion testing showed extension limited to 20 degrees and flexion limited to 30 degrees, taking into account functional impairment. Although the 2007 and 2009 findings are drastically different, in light of the Veteran's consistently reported symptoms throughout time, and the inherent inconsistencies in the 2007 VA examination report, the Board concludes the Veteran's right knee disability was likely manifested by consistent symptomatology throughout the period of the claim. In the Board's judgment, the evidence satisfactorily establishes that the disability has been manifested by severe pain and weakness, which warrant a rating of 60 percent by analogy under Diagnostic Code 5055, and by severe lateral instability, which warrants a separate 30 percent rating under Diagnostic Code 5257. The Board notes that the impairment contemplated by Diagnostic Code 5055 is not separate and distinct from that contemplated by Diagnostic Codes 5258 to 5261. Moreover, if the disability were rated on the basis of limitation of motion or ankylosis rather than under Diagnostic Code 5055, the rating or combined rating would not be higher than 60 percent. The Board also notes for the record that the increased ratings granted herein are subject to the amputation rule, set forth above. The Board has also considered whether the case should be referred to the Director of the VA Compensation and Pension Service for extra-schedular consideration under 38 C.F.R. § 3.321(a) (2012). In determining whether a case should be referred for extra-schedular consideration, the Board must compare the level of severity and the symptomatology of the claimant's disability with the established criteria provided in the rating schedule for disability. If the criteria reasonably describe the claimant's disability level and symptomatology, then the disability picture is contemplated by the rating schedule, the assigned evaluation is therefore adequate, and no referral for extra-schedular consideration is required. See Thun v. Peake, 22 Vet. App. 111, 115 (2008). As discussed above, the evidence shows that the manifestations of the Veteran's right knee disability are contemplated by the schedular criteria. Therefore, referral of this claim for extra-schedular consideration is not required. ORDER The Board having determined that the recoupment of separation pay was proper, the benefit sought on appeal is denied. Entitlement to initial ratings of 60 percent and 30 percent, for the components of the Veteran's right knee disability is granted throughout the initial rating period, subject to the amputation rule and the criteria applicable to the payment of monetary benefits. REMAND A June 2007 rating decision, in pertinent part, reconsidered a prior denial of service connection for psychiatric disability but denied the claim. The Veteran submitted a notice of disagreement with this decision in July 2007. The RO has not provided the veteran with a statement of the case in response to this notice of disagreement. Because the notice of disagreement placed the issue in appellate status, the matter must be remanded for the originating agency to issue a statement of the case. See Manlincon v. West, 12 Vet. App. 238, 240-41 (1999). Accordingly, this case is REMANDED to the RO or the Appeals Management Center (AMC), in Washington, D.C., for the following actions: Provide the Veteran with a statement of the case on the issue of entitlement to service connection for psychiatric disability and inform him of the requirements to perfect an appeal with respect to this new issue. If the Veteran perfects an appeal with respect to this issue, the RO or the AMC should ensure that all indicated development is completed before the case is returned to the Board for further appellate action. By this remand, the Board intimates no opinion as to any final outcome warranted. The Veteran need take no action until he is otherwise notified, but he may furnish additional evidence and/or argument during the appropriate time frame. See Kutscherousky v. West, 12 Vet. App. 369 (1999). This REMAND must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board or the Court for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012). _________________________________________________ Shane A. Durkin Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs