Citation Nr: 21062483 Decision Date: 10/07/21 Archive Date: 10/07/21 DOCKET NO. 17-44 247 DATE: October 7, 2021 ORDER From July 3, 2015 to January 25, 2018, a total disability based upon individual unemployability (TDIU) is granted. From July 3, 2015 to January 25, 2018, entitlement to special monthly compensation (SMC) based upon housebound status is granted. REMANDED Entitlement to a rating greater than 60 percent for post-operative cystic acne of the chest, back, neck and face is remanded. REFERRED The issue of entitlement to a clothing allowance under 38 C.F.R. § 3.810 was raised due to the Veteran's treatment for his cystic acne, and it is referred to the Agency of Original Jurisdiction (AOJ) for adjudication. FINDINGS OF FACT 1. From July 3, 2015 to January 25, 2018, the Veteran's service-connected disabilities prevented him from securing or following a substantially gainful occupation. 2. The Veteran's TDIU is based on the collective impact of his service-connected disabilities. 3. The TDIU could have been awarded based solely on his cystic acne. 4. As of July 3, 2015, the Veteran had a TDIU which could have been based solely on his cystic acne, and he had additional service-connected disabilities independently ratable at 60 percent or more. CONCLUSIONS OF LAW 1. From July 3, 2015 to January 25, 2018, the criteria for entitlement to a TDIU are approximated. 38 U.S.C. §§ 1155, 5103, 5103A, 5107; 38 C.F.R. §§ 3.102, 3.159, 3.340, 3.341, 4.1, 4.3, 4.16, 4.19, 4.25. 2. From July 3, 2015, the criteria for SMC at the statutory housebound rate have been met. 38 U.S.C. §§ 1114(s), 5101, 5103, 5103A, 5107; 38 C.F.R. § 3.350. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active service from August 1969 to December 1973. This matter comes before the Board of Veterans' appeals (Board) on appeal from a March 2014 rating decision of an AOJ of the Department of Veterans Affairs (VA). The Veteran testified before the undersigned in March 2021. A transcript of the hearing has been associated with the record. Issue 1: Entitlement to a total disability based upon individual unemployability (TDIU) prior to January 26, 2018 TDIU Background Law The VA regulation defining eligibility for a TDIU is 38 C.F.R. § 4.16. This regulation, however, does not define the procedure by which a Veteran may claim a TDIU. Instead, VA practice and case law have defined two ways formal and informal. A formal claim exists when VA receives a VA Form 21-8940. An informal claim, in contrast, is created pursuant to Rice v. Shinseki, 22 Vet. App. 447 (2009). Rice holds that a claim for a TDIU is part of any open rating issue (initial or increased) when unemployability is expressly raised by a veteran or reasonably raised by the record during the rating appeal, and it attaches for the entire rating period. A TDIU may be assigned when the disabled person is, in the judgment of the rating agency, unable to secure or follow a substantially gainful occupation because of service-connected disabilities. 38 C.F.R. § 4.16(a). If there is only one such disability, it must be rated at 60 percent or more; if there are two or more disabilities, at least one disability must be rated at 40 percent or more, with sufficient additional disability to bring the combined rating to 70 percent or more. 38 C.F.R. § 4.16(a). For the above purpose of one 60 percent disability, or one 40 percent disability in combination, the following will be considered as one disability: (1) disabilities of one or both upper extremities, or of one or both lower extremities, including the bilateral factor, if applicable, (2) disabilities resulting from common etiology or a single accident, (3) disabilities affecting a single body system, e.g. orthopedic, digestive, respiratory, cardiovascular-renal, neuropsychiatric, (4) multiple injuries incurred in action, or (5) multiple disabilities incurred as a prisoner of war. 38 C.F.R. § 4.16(a). In 2019, the U.S. Court of Appeals for Veterans Claims (CAVC), issued Ray v. Wilkie, 31 Vet. App. 58 (2019). Ray held that "substantially gainful employment," in the TDIU context, contains economic and noneconomic components; the economic component means "an occupation earning more than marginal income (outside of a protected environment) as determined by the U.S. Department of Commerce as the poverty threshold for one person," while the noneconomic component requires consideration of a veteran's ability to secure or follow that type of employment. The CAVC also provided guidance as to the meaning of a veteran's ability to "secure and follow" such employment, noting that attention must be given to: the veteran's occupational history, education, skill, and training; whether the veteran has the physical ability to perform occupational activities; and whether the veteran has the mental ability to perform occupational activities. A single service-connected disability rated 100 percent disabling generally renders a TDIU evaluation moot, as no additional benefit would typically flow to the Veteran by substituting a TDIU evaluation for a single service-connected disability rated 100-percent disabling. Similarly, a combined evaluation of 100 percent may also render a TDIU evaluation moot when no additional benefit may be derived. However, when additional benefit may be derived from a grant of entitlement to TDIU, such as when TDIU is warranted for a single disability and entitlement to SMC based on housebound status will be an ancillary benefit, then TDIU is not moot. Merits The Veteran, on January 26, 2018, submitted a VA Form 21-8940, "Application for Increased Compensation Based on Unemployability." Before the AOJ ruled on eligibility, the Board, in April 2019, took jurisdiction of the issue pursuant to Rice. At that time, the Board dismissed entitlement to a TDIU from January 26, 2018 because it found that the issue was moot. Specifically, the Board took this action because the AOJ, in a May 2018 rating decision, had awarded the Veteran a 100 percent rating for his PTSD and SMC based upon housebound status as of January 26, 2018. However, the Board found entitlement to a TDIU prior to January 26, 2018 remained on appeal. Therefore, it remanded this issue to the AOJ to issue a Statement of the Case (SOC) because the AOJ had failed to issue an SOC for the Veteran's appeal of the increased rating for his cystic acne, which the Board addressed above. The AOJ, in turn, issued the SOC in September 2020, and the Veteran perfected an appeal. In the Veteran's TDIU application, he listed multiple disabilities that prevent him from substantially gainful employment. Accordingly, the Board will evaluate the claim through this framework. Because the Board took jurisdiction of the TDIU issue pursuant to Rice, it must consider the Veteran's disability picture as of September 7, 2011, the date of the Veteran's increased rating claim for cystic acne. Notwithstanding this, the Veteran, in his TDIU application, stated that his service-connected disabilities prohibited him from substantially gainful employment as of July 3, 2015. Given the preceding paragraph and this date, the Board needs only analyze the Veteran's disability picture from July 3, 2015 to January 25, 2018. Within this 2.5-year window, the Veteran's disability picture did not change. During this time, he had three service-connected disabilities: 1) PTSD, which was 70 percent disabling; 2) cystic acne, which was 60 percent disabling; and 3) tinnitus, which was 10 percent disabling. From July 3, 2015 to January 25, 2018, the Veteran had a combined rating of 90 percent, with at least one disability rated as 40 percent or more disabling. Therefore, he has met the schedular percentage requirement for consideration of a TDIU under 38 C.F.R. § 4.16(a). Accordingly, the remaining question is whether the Veteran was unable to secure or follow a substantially gainful occupation because of his service-connected disabilities. The undersigned notes the Veteran, as reported in his January 2018 TDIU application, graduated from high school, and had two years of college. He served in the U.S. Navy from August 1969 to December 1973. Then, as relevant here, in the five years preceding his application, he noted that he worked "security." Prior to that, he noted that he owned a construction company. The evidence regarding employability during the relevant time window includes several VA examinations, as well as the Veteran's March 2021 testimony and a private skin examination. For PTSD, the May 2015 and February 2018 VA examinations are instructive. In May 2015, while the examiner did not discuss the impact of the Veteran's disability on employment in detail, he noted "this veteran presents with a tough guy façade; however, close beneath the surface is a very depressed and angry veteran whose life had been riddled with significant depression, symptoms indicative of a long-standing PTSD condition as well as Panic Disorder." By February 2018, the Veteran's disability had worsened. In fact, the AOJ used the February 2018 examination to support its 100 percent rating for PTSD as of January 26, 2018. At a minimum, these examination reports reflect the impact the Veteran's 70 percent rating had upon his activities of daily living, to include in an employment context. For the cystic ance, in a September 2016 Disability Benefits Questionnaire (DBQ) a private medical professional noted it impacted the Veteran's ability to work because "he has to continuously leave jobs and get surgeries for the acne." Additionally, in the February 2018 VA skin examination, the examiner noted "the impact of the skin condition on the claimant's ability to work is painful scarring and disfigurements that causes pain with lifting due to the location of the cyst. He also has pain when he [is] sweating or wearing certain clothes. He states the scarring burns once the cysts are excised." During a November 2016 VA contracted examination, the examiner noted the Veteran's cystic acne impacts the Veteran's ability to work in and around certain climates due to increased acne outbreaks with oozing; in addition, the Veteran explained that he had to wear loose clothing due to painful scars. At the hearing, the Veteran testified, competently and credibly, upon the collective impact of his disabilities. A holistic view of the Veteran's disability picture, when combined with his work history and education, is revealing. First, the Veteran has limited education or professional training beyond high school, which assuredly reduces his employment prospects. Second, the Veteran, for the decade preceding the time window in question, served as a manual laborer. Physical demands, to include prolonged standing and walking as well as strenuous labor involving repetitive lifting, carrying, or climbing, define this occupation. Third, the 2016 private DBQ, and November 2016 and 2018 VA examination highlight the physical limitations his cystic acne imposes. Fourth, the February 2018 VA PTSD examination and the March 2021 testimony demonstrate how the Veteran's limited education pronounced psychiatric symptoms, when combined with his physical limitations, prevent him from maintaining an appropriate level of productivity and pace for competitive employment. Based on the foregoing, and resolving reasonable doubt in the Veteran's favor, the undersigned finds the Veteran warrants a TDIU from July 3, 2015 to January 25, 2018. The evidence shows the Veteran is incapable of prolonged standing and sitting. These physical limitations, when combined with his limited education, history of manual labor, and the impact of his psychiatric disorder, hinder employment. Indeed, the Board finds that it is at least as likely as not that he would be unable to utilize his obtained skills in a manual labor context due to the serious, combined effects of his three service-connected disabilities. Therefore, the Board grants a TDIU from July 3, 2015 to January 25, 2018. Issue 2: Entitlement to an effective date earlier than January 26, 2018, for special monthly compensation (SMC) based upon housebound status In Bradley v. Peake, the U.S. Court of Appeals for Veterans Claims held that, although no additional disability compensation may be paid when a total schedular disability rating is already in effect, a separate award of a TDIU predicated on a single disability may form the basis for an award of special monthly compensation. See Bradley v. Peake, 22 Vet. App. 280 (2008). Additionally, an award of SMC at the housebound rate may be awarded if the Veteran has a service-connected disability rated as total and has additional service-connected disability or disabilities independently ratable at 60 percent or more. 38 U.S.C. § 1114(s)(1). The Board notes that the AOJ, in a June 2019 rating decision, awarded the Veteran SMC at the housebound rate from January 26, 2018. While the Veteran did not appeal the effective date the AOJ assigned, the Board nevertheless has jurisdiction of it. Indeed, SMC benefits "are to be accorded when a veteran becomes eligible, without need for a separate claim." Bradley v. Peake, 22 Vet. App. 280, 294 (2008) (citing Akles v. Derwinski, 1 Vet. App. 118, 121 (1991)). In other words, SMC is not "a wholly different benefit" but an issue within a claim for an increased or higher initial disability evaluation, as here, vis-à-vis the cystic acne rating appeal. In fact, VA has long treated SMC as an "ancillary benefit" or "inferred issue," meaning that adjudicators must consider a claimant's entitlement to it even where it was "not specifically placed at issue by the claimant." Akles v. Derwinski, 1 Vet. App. 118, 121 (1991). Above, the Board granted the Veteran a TDIU from July 3, 2015 to January 25, 2018 based upon the collective impact of his service-connected disabilities. This, however, is not dispositive of the SMC issue. In Buie v. Shinseki, 24 Vet. App. 242 (2011), the U.S. Court of Appeals for Veterans Claims explained that the proper question is whether a TDIU may be predicated on a single service-connected disability, not whether it was awarded based on a single service-connected disability. Thus, the Board must engage in this theoretical analysis from July 3, 2015 to January 25, 2018. Within this 2.5-year window, VA rated his cystic acne as 60 percent disabling. Therefore, he would have met the schedular percentage requirement for consideration of a TDIU under 38 C.F.R. § 4.16(a). Accordingly, the remaining question is whether the Veteran would have been unable to secure or follow a substantially gainful occupation because of his cystic acne. The Board will not repeat its TDIU analysis here. It established above how the cystic acne impacts the Veteran's activities of daily living in an employment context. Based on that analysis, the Board finds it could have awarded the Veteran a TDIU based solely on his cystic acne. The severe limitations his cystic acne imposed markedly hindered his ability to secure and follow a substantially gainful occupation. However, this does not end the Board's analysis. Having made this finding, the next question is when, if ever, during the July 3, 2015 to January 25, 2018 window the Veteran had additional service-connected disability or disabilities independently ratable at 60 percent or more. The answer is simple the entire window. As noted above, VA rated the Veteran's PTSD as 70 percent disabling during this 2.5-year timeframe. Given the preceding analysis, the Board will award SMC based upon housebound status as of July 3, 2015. REASONS FOR REMAND The Veteran claimed an increased rating for his cystic acne on September 7, 2011. The AOJ denied his claim in September 2013. He submitted additional evidence within one year of this denial, and the AOJ readjudicated the claim in March 2014. It denied the Veteran an increased rating, and he appealed. As his appeal was pending, the AOJ increased his rating to 60 percent disabling, effective September 7, 2011. Sixty percent is the maximum schedular rating available under Diagnostic Code 7806, which VA uses to rate the Veteran's disability. Because VA has awarded the Veteran the maximum schedular rating for the appeal period and because of his March 2021 testimony, the undersigned construes the Veteran to be seeking an extraschedular rating. The Board is precluded from assigning an extraschedular rating in the first instance. Kuppamala v. McDonald, 27 Vet. App. 447 (2015). To warrant referral for extraschedular consideration, a disability must be so exceptional or unusual that it renders application of the regular schedular ratings impractical. 38 C.F.R. § 3.321(b)(1). The first question is whether the schedular rating criteria adequately contemplate the veteran's disability picture. If the schedular evaluation does not contemplate the level of disability and symptomatology shown and is found inadequate, then the second inquiry is whether the exceptional disability picture exhibits other related factors, such as marked interference with employment or frequent periods of hospitalization. See Thun v. Peake, 22 Vet. App. 111 (2008). Extraschedular consideration is not applicable to claims that are evaluated properly but ultimately denied under the schedular ratings; rather, it applies only after conventional rating tools prove inadequate to evaluate a veteran's symptomatology in the first place due to its exceptional nature. Long v. Wilkie, 33 Vet. App. 167 (2020). The first Thun element compares a claimant's symptoms to the rating criteria, while the second addresses the resulting effects of those symptoms. Thus, the first and second Thun elements, although interrelated, involve separate and distinct analyses. Yancy v. McDonald, 27 Vet. App. 484, 495 (2016). If a veteran's disability picture meets the second inquiry, then the third step is to refer the case to the Director of Compensation Service (DCS) to determine whether an extraschedular rating is warranted. See Thun, 22 Vet. App. 111. Therefore, the question before the Board at this point is "whether there is sufficient evidence to substantiate a reasonable possibility that 'application of the regular schedular standards' is impractical because the disability is 'exceptional or unusual...with such related factors as marked interference with employment or frequent periods of hospitalization.'" Smiddy v. Wilkie, 32 Vet. App. 350, 358 (2020) (quoting 38 C.F.R. § 3.321(b)); see also Ray v. Wilkie, 31 Vet. App. 58, 67 (2019). Here, the Veteran testified about four symptoms of his cystic acne scars, itching, psychiatric impact, and odor that the undersigned will analyze. For scars, VA service connected the Veteran's "cystic acnes, chest, back, neck, ears, and face, postoperative" in August 1978. The August 1978 rating decision discusses "multiple small surgical scars," and the Veteran has continued to have outpatient procedures to treat the disability since 1978. As noted above, VA rates this disability under 38 C.F.R. § 4.118, Diagnostic Code 7806. Assigning a rating for the Veteran's cystic acne under Diagnostic Code 7806 and a separate rating based on the residual scarring it causes would result in the pyramiding of benefits, thereby violating 38 C.F.R. § 4.14. Therefore, his scars, which are already contemplated in his 60 percent rating, would not satisfy the first prong of Thun. For the itching, Long provides guidance. Specifically, Diagnostic Codes generally contemplate those symptoms "commonly associated" with the disability they were designed to evaluate. See Long at 174. The Board may draw reasonable inferences about the ability of rating criteria to evaluate the full extent of a veteran's disability picture. Id. If a symptom is commonly associated with the problem/illness the diagnostic code was designed to rate, it is arguably contemplated by the Diagnostic Code. Internet medical sources discuss itching as being "commonly associated" with cystic acne. Therefore, this symptom cannot serve as the basis for extraschedular consideration. As for the psychiatric symptoms, in September 2011, the Veteran claimed his depression was due to his cystic acne. The AOJ developed the claim. In an August 2012 VA examination, the examiner diagnosed three psychiatric disorders posttraumatic stress disorder (PTSD), depression, and panic disorder. He noted the "depression worsened since medical problems." Nevertheless, the AOJ granted service connection for PTSD, but it denied service connection for depression and panic disorder, in March 2013. Two years later, and without explanation, the AOJ recharacterized the disability as "PTSD with major depressive disorder and panic disorder." Because VA is compensating the Veteran for these symptoms separately from his cystic acne, they cannot serve as the basis for extraschedular consideration. For the odor, the Board finds that it creates functional impairment the schedular rating does not compensate. Specifically, the Veteran testified that the odor is "horrible," thus making it uncomfortable and embarrassing to be around people, so much so that he steers away from them. As discussed above, the Board has determined the Veteran's cystic acne impacts the Veteran's activities of daily living in an employment context. Based on the foregoing, the Board finds there is sufficient evidence to substantiate a reasonable possibility that application of the regular schedular standards is impractical because the disability is exceptional or unusual with marked interference with employment. As such, the Board finds referral to the DCS for extraschedular consideration is warranted. The matters are REMANDED for the following action: 1. Refer the issue of an extraschedular rating for the Veteran's cystic acne to the DCS pursuant to 38 C.F.R. § 3.321(b). Tiffany Dawson Veterans Law Judge Board of Veterans' Appeals Attorney for the Board M. Sopko, Counsel The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.