Citation Nr: 1339325 Decision Date: 11/29/13 Archive Date: 12/13/13 DOCKET NO. 13-04 673 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Manchester, New Hampshire THE ISSUES 1. Entitlement to a rating in excess of 40 percent for hepatitis C. 2. Entitlement to service connection for the cause of the Veteran's death. 3. Entitlement to a compensable rating for chronic dermatophytosis, for the purposes of accrued benefits. 4. Entitlement to service connection for a lung disability, to include as secondary to service-connected hepatitis C, for the purposes of accrued benefits. 5. Entitlement to a total disability rating due to individual employability resulting from service-connected disability (TDIU), for the purposes of accrued benefits. WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD M. Riley, Counsel INTRODUCTION The Veteran served on active duty from August 1966 to May 1969 and from June 1971 to October 1975. The Veteran died in June 2010 and the appellant is his widow. This case comes before the Board of Veterans' Appeals (Board) on appeal from an April 2009 rating decision issued by the Department of Veterans Affairs (VA) Regional Office (RO) in Manchester, New Hampshire, which denied the Veteran's claim for a rating in excess of 40 percent for hepatitis C. The appeal also arises from an April 2011 rating decision issued by the Manchester RO denying the appellant's claims for various death benefits, including Dependency and Indemnity Compensation (DIC) (as service connection for the cause of the Veteran's death under 38 U.S.C.A. § 1310). There is some confusion in the record as to the issues properly on appeal. First, with respect to the claim for an increased rating for hepatitis C, the Veteran initially filed his claim for an increased rating in March 2009 and was granted an increased 40 percent evaluation in an April 2009 rating decision. The Veteran initiated an appeal in April 2009 regarding the evaluation assigned his hepatitis C and the appeal was still pending at the time of his death in June 2010. The Board finds that the appellant in this case has properly substituted for the Veteran in accordance with the Veterans' Benefits Improvement Act of 2008, Pub. L. No. 110-389, § 212, 122 Stat. 4145, 4151 (2008) (creating a new 38 U.S.C. § 5121A allowing substitution in the case of the death of a claimant who dies on or after October 10, 2008). Under this statute, an eligible person may process any pending claims to completion following the death of a veteran. Such request must be filed not later than one year after the date of the Veteran's death and, as provided for in this new provision, a person eligible for this substitution will include "a living person who would be eligible to receive accrued benefits due to the claimant under section 5121(a) of this title . . . ." Id; 38 U.S.C.A. § 5121A (West 2002). The appellant's July 2010 claim for death benefits (received within a year of the Veteran's death) was interpreted by the RO to include a request for substitution for the claims under appeal at the time of the Veteran's death. Thus, the claim for entitlement to a rating in excess of 40 percent for hepatitis C is properly before the Board with the appellant substituting for the deceased Veteran. The Board also finds that the claim for entitlement to service connection for the cause of the Veteran's death is on appeal. The January 2011 rating decision on appeal denied the claim and the appellant's June 2011 notice of disagreement (NOD) clearly expressed disagreement with the denial. Although the first page of the February 2012 statement of the case (SOC) only listed a claim for accrued benefits, the SOC included specific discussion of the regulations governing service connection for the cause of the Veteran's death and included analysis and discussion of the claim. Therefore, the February 2012 SOC addressed the claim for entitlement to service connection for the cause of the Veteran's death and the appeal was perfected by the appellant's June 2012 substantive appeal. It is therefore properly before the Board at this time. Additionally, claims for a compensable rating for dermatophytosis, service connection for a lung disability, and entitlement to TDIU are currently on appeal for the purposes of accrued benefits. The Veteran filed these claims in June 2009 and they were not finally adjudicated by VA on or before the date of his death. The appellant's July 2010 claim for DIC is deemed to include a claim for accrued benefits. 38 C.F.R. § 3.152 (2013); 38 C.F.R. § 3.1000(c). Although the January 2011 rating decision did not specifically address the claim for accrued benefits, the rating decision serves as an implicit denial of the appellant's claims for accrued benefits. See Deshotel v. Nicholson, 457 F. 3d 1258 (Fed. Cir. 2006) (if the record shows the existence of an unadjudicated claim, raised along with an adjudicated claim, and the RO's decision acts (favorably or unfavorably) on one of the claims, but fails to specifically address the other claim, the second claim is deemed denied). The claims for accrued benefits were also specifically addressed by the RO in the February 2012 SOC and the appellant perfected the appeals with the June 2012 substantive appeal. As a final matter, the Board notes a distinction between the appellant's claim for an increased rating for hepatitis C based on substitution and the claims for accrued benefits. Claims for accrued benefits are limited to consideration of the existing ratings, decisions, and evidence in the claims file at the time of the veteran's death; additional evidentiary development is generally not appropriate. See 38 C.F.R. § 3.1000(a). In contrast, in a claim for substitution, the appeal continues and additional evidence may be added to the record after the veteran's death. The issues of entitlement to service connection for the cause of the Veteran's death and the claims for accrued benefits are addressed in the REMAND portion of the decision below and are REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. FINDING OF FACT The Veteran's hepatitis C most nearly approximates moderate to severe necrosis with early cirrhosis throughout the claims period; it manifested symptoms of daily fatigue, nausea, vomiting, and hepatomegaly without incapacitating episodes. CONCLUSION OF LAW The criteria for a rating in excess of 40 percent for hepatitis C are not met. 38 U.S.C.A. §§ 5121A, 1155 (West 2002); 38 C.F.R. §§ 4.1, 4.2, 4.3, 4.7, 4.114, Diagnostic Code 7354 (2013). REASONS AND BASES FOR FINDING AND CONCLUSION Service connection for hepatitis C was granted in a March 2000 rating decision with an initial 30 percent evaluation assigned effective August 20, 1999. An increased 40 percent evaluation was granted in the April 2009 rating decision on appeal effective February 19, 2009. The Veteran initiated an appeal regarding the disability rating assigned the service-connected hepatitis C, but died in June 2010 before the appeal was perfected and came to the Board. However, as noted above, the appellant has substituted for the Veteran in the current claim for an increased rating in accordance with the Veterans' Benefits Improvement Act of 2008, Pub. L. No. 110-389, § 212, 122 Stat. 4145, 4151 (2008) and the claim is properly before the Board. 38 U.S.C.A. § 5121A (West 2002). Disability evaluations are determined by comparing a Veteran's present symptomatology with criteria set forth in VA's Schedule for Rating Disabilities (Rating Schedule), which is based on average impairment in earning capacity. 38 U.S.C.A. § 1155; 38 C.F.R. Part 4. When a question arises as to which of two ratings apply under a particular diagnostic code, the higher evaluation is assigned if the disability more closely approximates the criteria for the higher rating. 38 C.F.R. § 4.7. After careful consideration of the evidence, any reasonable doubt remaining is resolved in favor of the Veteran. 38 C.F.R. § 4.3. The Veteran's entire history is reviewed when making disability ratings. See generally 38 C.F.R. 4.1; Schafrath v. Derwinski, 1 Vet. App. 589 (1995). Where entitlement to compensation has already been established and an increase in the disability rating is at issue, the present level of disability is of primary concern. Although a rating specialist is directed to review the recorded history of a disability in order to make a more accurate evaluation, see 38 C.F.R. § 4.2, the regulations do not give past medical reports precedence over current findings. Francisco v. Brown, 7 Vet. App. 55 (1994). Staged ratings are, however, appropriate for an increased rating claim when the factual findings show distinct time periods where the service-connected disability exhibits symptoms that would warrant different ratings. The relevant focus for adjudicating an increased rating claim is on the evidence concerning the state of the disability from the time period one year before the claim was filed until VA makes a final decision on the claim. Hart v. Mansfield, 21 Vet. App. 505 (2007). The Veteran's hepatitis C is rated as 40 percent disabling under Diagnostic Code 7354 for non-A and non-B hepatitis C. Hepatitis C with 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, is rated 40 percent disabling. Hepatitis C with 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, is rated 60 percent disabling. Hepatitis C with near-constant debilitating symptoms (such as fatigue, malaise, nausea, vomiting, anorexia, arthralgia, and right upper quadrant pain), is rated 100 percent disabling. 38 C.F.R. § 4.114. Note (1) to Diagnostic Code 7354 provides that sequelae, such as cirrhosis or malignancy of the liver, is to be rated under an appropriate diagnostic code, but not to use the same signs and symptoms as the basis for a rating under Diagnostic Code 7354 and under a diagnostic code for sequelae. (See 38 C.F.R. § 4.14). Note (2) provides that, for purposes of rating 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. After review of the evidence, the Board finds that the Veteran's hepatitis C most nearly approximates the criteria associated with the current 40 percent evaluation throughout the entire claims period. The service-connected hepatitis C manifested progression of liver disease to early cirrhosis and symptoms of fatigue and some nausea and vomiting during the claims period, but these symptoms are contemplated by the currently assigned 40 percent rating under Diagnostic Code 7354. In October 2008, laboratory tests demonstrated slightly increased abnormal liver functioning compared to testing in June 2008. The Veteran's private physician recommended a liver biopsy sometime in the next six months and noted that the Veteran's lung issues (chronic obstructive pulmonary disease (COPD) and interstitial fibrosis) were a more pressing concern. In February 2009, a liver biopsy showed moderate to severe piecemeal necrosis and cirrhosis. A letter containing the results of the biopsy characterized the findings as a "mild progression in the liver scarring to the level of early cirrhosis." Laboratory testing performed in March 2009 also showed a slight elevation in the Veteran's liver function tests. A year later, in March 2010, the Veteran's liver function tests were again elevated, though his doctor noted that the levels were similar to prior elevations. Thus, objective testing establishes that the Veteran experienced abnormal liver function and hepatitis C that mildly worsened during the claims period to the level of early cirrhosis. The record also shows that the Veteran's hepatitis C manifested symptoms such as daily fatigue, nausea, and an enlarged liver beginning in February 2009. Prior to this date, the Veteran denied experiencing symptoms of hepatitis C during consultations with his primary care physician and gastroenterologist. After the February 2009 liver biopsy, he began to complain regularly of fatigue, though the Board notes that he was also diagnosed with sleep apnea following a private sleep study in March 2009. In any event, the Veteran consistently reported experiencing fatigue in connection with his hepatitis C along with nausea and vomiting from April 2009. The March 2009 VA examiner also found that the Veteran's liver was enlarged and firm upon physical examination in March 2009. These symptoms and findings are all contemplated by the currently assigned 40 percent evaluation under Diagnostic Code 7354. While symptoms including fatigue and nausea are associated with the service-connected hepatitis C, private records of medical treatment also demonstrate that the Veteran experienced severe symptoms of other disabilities during this period that account for his decrease in function and overall health. An October 2008 chest X-ray showed interstitial lung densities, and the Veteran underwent a resection of a portion of the right upper lung lobe. He manifested a severe cough and lung infection that resulted in difficulties sleeping and breathing and was thought by his cardiothoracic physician as the partial cause of his fatigue and nausea. Additionally, while the Veteran lost weight during the claims period, the weight loss was purposeful and due to his participation in the Weight Watchers program. It was not indicative of malnutrition or anorexia due to hepatitis C. The March 2009 VA examiner also specifically found that the Veteran did not experience any incapacitating episodes in the last 12 months due to hepatitis C. His medical records document a decrease in function during this period, but these findings were related to dyspnea due to the Veteran's lung disabilities. The Board has considered whether a separate rating is warranted for the Veteran's cirrhosis due to hepatitis C. As noted above, Note (1) to Diagnostic Code 7354 provides that cirrhosis of the liver should be separately rated under the appropriate diagnostic code as long as rating is not based on the same signs and symptoms used to rate the underlying hepatitis C under Diagnostic Code 7354. (See 38 C.F.R. § 4.14). In this case, the Veteran was diagnosed with early cirrhosis and none of the evidence indicates any symptomatology associated with cirrhosis that is separate and distinct from that attributed to hepatitis C. Therefore, a separate rating for cirrhosis is not appropriate. 38 C.F.R. § 4.14; Esteban v. Brown, 6 Vet. App. 259, 261 (1994). The Board has also considered the statements of the Veteran and the appellant contending that an increased evaluation is warranted for hepatitis C due to a worsening of the disability. It is clear that the Veteran's hepatitis C manifested a progression of symptoms during the claims period, but his private physician characterized the progression as mild resulting only in findings of early cirrhosis and abnormal liver function consistent with previous testing. The Board finds that the medical evidence in this case is more persuasive than the lay statements of the Veteran and appellant concerning the actual severity of the Veteran's hepatitis C. The Veteran and the appellant are competent to report their lay observations of symptoms, but the objective medical evidence clearly indicates that the Veteran's severe symptoms and functional effects in the period prior to his death were due to various lung conditions. His hepatitis C manifested fatigue, nausea, vomiting, and hepatomegaly, but the weight of the evidence is against a finding of incapacitating episodes due to hepatitis C, symptoms of anorexia, substantial weight loss or other indication of malnutrition, or near-constant debilitating symptoms. Thus, the Veteran's hepatitis C is contemplated by the currently assigned 40 percent rating and an increased schedular evaluation is not warranted. In exceptional cases an extraschedular rating may be provided. 38 C.F.R. § 3.321. The Court of Appeals for Veterans Claims (Court) has set out a three-part test, based on the language of 38 C.F.R. § 3.321(b)(1), for determining whether a veteran is entitled to an extra-schedular rating: (1) the established schedular criteria must be inadequate to describe the severity and symptoms of the claimant's disability; (2) the case must present other indicia of an exceptional or unusual disability picture, such as marked interference with employment or frequent periods of hospitalization; and (3) the award of an extra-schedular disability rating must be in the interest of justice. Thun v. Peake, 22 Vet. App. 111 (2008), aff'd, Thun v. Shinseki, 572 F.3d 1366 (Fed. Cir. 2009). The Board finds that the rating criteria contemplate the Veteran's hepatitis C. The disability manifested symptoms such as abnormal liver function, fatigue, and nausea. These manifestations are contemplated in the rating criteria. The rating criteria are therefore adequate to evaluate the Veteran's disability and referral for consideration of extraschedular rating is not warranted. Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (Nov. 9, 2000) (codified at 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2002)) defined VA's duties to notify and assist a veteran in the substantiation of a claim. VA regulations for the implementation of the VCAA were codified as amended at 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2013). VA must inform the claimant of any information and evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; (3) and that the claimant is expected to provide. Pelegrini v. Principi (Pelegrini II), 18 Vet. App. 112, 120-21 (2004), see 38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b). In this case, notice fulfilling the requirements of 38 C.F.R. § 3.159(b) was furnished to the Veteran in a March 2009 letter. The Veteran also received notice regarding the disability-rating and effective-date elements of the claim in the March 2009 letter. See Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006). Although this notice was provided to the Veteran prior to his death and not the appellant, the appellant has substituted herself as the claimant in this appeal under 38 U.S.C.A. § 5121A (West 2002) and is therefore deemed to have received the notice issued to the Veteran. VA is also required to make reasonable efforts to help a claimant obtain evidence necessary to substantiate a claim. 38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159(c), (d). This "duty to assist" contemplates that VA will help a claimant obtain records relevant to a claim, whether or not the records are in Federal custody, and that VA will provide a medical examination or obtain an opinion when necessary to make a decision on the claim. 38 C.F.R. § 3.159(c)(4). VA has obtained records of treatment reported by the Veteran and the appellant, including service treatment records, records of VA treatment, private medical records, and records from the Social Security Administration (SSA). Additionally, the Veteran was provided a proper VA examination in March 2009 to determine the severity of his hepatitis C. For the reasons set forth above, the Board finds that VA has complied with the VCAA's notification and assistance requirements. ORDER Entitlement to a rating in excess of 40 percent for hepatitis C is denied. REMAND The Board finds that additional development is necessary before a decision may be rendered with respect to the other claims on appeal. The Court has held that 38 U.S.C.A. § 5103(a) requires that compliant VCAA notice, in the context of DIC claims, requires (1) a statement of the conditions, if any, for which a veteran was service-connected at the time of his or her death; (2) an explanation of the evidence and information required to substantiate a DIC claim based on a previously service-connected condition; and (3) an explanation of the evidence and information required to substantiate a DIC claim based on a condition not yet service-connected. Hupp v. Nicholson, 21 Vet. App. 342 (2007). The appellant was provided a September 2010 notice letter addressing the claims for entitlement to DIC and accrued benefits. Unfortunately, the letter mistakenly informed the appellant that the Veteran was service-connected for pulmonary fibrosis at the time of his death. The letter also did not provide notice to the appellant of the Veteran's other service-connected disabilities. Remand is therefore required to ensure the appellant receives the appropriate notice under Hupp. Accordingly, the case is REMANDED for the following action: 1. Provide the appellant with appropriate notice, including (1) a statement of the conditions for which the Veteran was service connected at the time of his death; (2) an explanation of the evidence and information required to substantiate a death benefits claim based on a previously service-connected condition; and (3) an explanation of the evidence and information required to substantiate a death benefits claim based on a condition not yet service connected. 2. If additional relevant evidence is received from the appellant, readjudicate the claims on appeal. If the benefits sought on appeal are not fully granted, issue a SSOC before returning the case to the Board, if otherwise in order. The appellant has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2013). ______________________________________________ MILO H. HAWLEY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs