Citation Nr: 22044809 Decision Date: 08/08/22 Archive Date: 08/08/22 DOCKET NO. 12-02 740A DATE: August 8, 2022 ORDER A disability rating higher than 10 percent for service-connected residuals of a pilonidal cyst on an extraschedular basis is denied. Entitlement to a total disability rating based on individual unemployability due to service-connected disabilities (TDIU) is denied. FINDINGS OF FACT 1. The functional effects of the Veteran's pilonidal cyst residuals are contemplated by the rating criteria and are not manifested by factors such as a marked interference with employment or frequent periods of hospitalization. 2. The Veteran's single service-connected disability does not preclude substantially gainful employment. CONCLUSIONS OF LAW 1. The criteria for entitlement to an extraschedular rating for residuals of a pilonidal cyst are not met. 38 U.S.C. §§ 1155, 5107(b); 38 C.F.R. §§ 3.321(b)(1), 4.71a, Diagnostic Code (DC) 5299-5298. 2. The criteria for entitlement to TDIU are not met. 38 U.S.C. §§ 1155, 5107(b), 5110; 38 C.F.R. §§ 3.321 (b)(1), 3.340, 3.341, 4.16. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran had active military service from June 1971 to January 1975. In January 2017, he testified via video conference before the Board of Veterans' Appeals (Board). A transcript of the hearing is of record. In March 2019, the Board remanded the claims for additional development. In May 2021, the Board denied a disability rating higher than 10 percent for pilonidal cyst residuals on an extraschedular basis and entitlement to TDIU, which the Veteran appealed to the United States Court of Appeals for Veterans Claims (Court). In April 2022, the Court issued an order that vacated the Board decision and remanded the claim for compliance with a Joint Motion for Remand (JMR). Increased Rating Claim on an Extraschedular Basis The Veteran is seeking an increased evaluation for his pilonidal cyst residuals on an extraschedular basis. Generally, disability ratings are determined by evaluating the extent to which a veteran's service-connected disability adversely affects his or her ability to function under the ordinary conditions of daily life, including employment, by comparing his or her symptomatology with the criteria set forth in VA's Rating Schedule. 38 U.S.C. § 1155; 38 C.F.R. § 4.1. Ordinarily, the VA Rating Schedule will apply unless the case presents such an exceptional or unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization that would render impractical the application of the regular schedular standards. See 38 C.F.R. § 3.321(b)(1); see also Fisher v. Principi, 4 Vet. App. 57, 60 (1993). The Court has set out a sequential three-step analysis, based on the language of 38 C.F.R. § 3.321 (b)(1), to determine whether to refer a case for extraschedular consideration. Thun v. Peake, 22 Vet. App. 111 (2008). If (1) the schedular criteria do not contemplate the claimant's level of disability and symptomatology, and (2) the disability picture exhibits other related factors such as marked interference with employment or frequent periods of hospitalization, then (3) the case must be referred to an authorized official to determine whether an extraschedular rating is warranted. Id. When the Board finds that an extraschedular rating may be warranted based on the above factors, it cannot grant an extraschedular rating in the first instance. Anderson v. Shinseki, 23 Vet. App. 423, 428-429 (2009). Rather, it must remand the claim for referral to the Director of Compensation Service. In March 2019, the Board found that the evidence raised the reasonable possibility that one or more of the Thun factors may be met such that referral for extraschedular consideration was warranted. In December 2020, the Director issued an advisory opinion finding that an extraschedular rating was not warranted. The Board is not bound by this determination and shall conduct a de novo review of the claim to determine whether an extraschedular rating is warranted. See Wages v. McDonald, 27 Vet. App. 233, 236 (2015) (holding that the Board conducts de novo review of the Director's decision denying extraschedular consideration). See also Kuppamala v. McDonald, 27 Vet. App. 443, 458 (2015) (the Board reviews the entirety of the Director's decision de novo and is thus authorized to assign an extraschedular rating when appropriate). That said the Board does find the Director's opinion to be persuasive and consistent with the findings set forth herein. The Board notes that a referral for consideration of an extraschedular rating under 38 C.F.R. § 3.321(b) does not mean the claim will succeed on the merits. The standard for referral is necessarily "based on a[n] evidentiary threshold that is lower than that for the decision to award an extraschedular rating." Ray v. Wilkie, 31 Vet. App. 58, 62 (2019). However as was identified by the parties in the April 2022 JMR, because the Board previously found that referral for extraschedular consideration was warranted, it must now "explain its reasoning when a factual finding made at the referral stage comes out differently at the review stage" in accordance with Smiddy v. Wilkie, 32 Vet. App. 350 (2020). The question at the "referral stage" 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, 32 Vet. App. at 358 (quoting 38 C.F.R. § 3.321(b)). The Board's referral in 2019 was based on the Veteran's testimony and evidence suggesting that he had undergone an inordinate number of surgeries/medical procedures related to his pilonidal cyst disability during the appeal period. This finding did not involve a weighing of the favorable and unfavorable evidence to make a final determination on entitlement to an extraschedular rating. Therefore, the Board had not made a determination on whether the evidence actually supported a finding that the Veteran is entitled to an extraschedular rating for his pilonidal cyst disability. However, the question now before the Board at the "review stage" is whether the application of the schedular standards to the Veteran's pilonidal cyst disability actually is impractical and the disability caused marked interference with employment or frequent hospitalization such that a extraschedular rating is warranted under 38 C.F.R. § 3.321(b). The Veteran is currently in receipt of a 10 percent schedular rating under DC 5298 for partial or completed removal of the coccyx with painful residuals, which is the highest evaluation assigned. See 38 C.F.R. § 4.71(a). At his January 2017 hearing, he described a history of lower back pain, following a pilonidal cyst operation in 1973, that has progressively worsened since service. He also testified that he has had 18 surgeries for recurring pilonidal cysts, most recently in December 2016. He testified that the recurring cyst causes pain, swelling and difficulty walking and that he has to go the hospital for a procedure where medical personnel "cut it and drain it, patch it." Medical records between 1977 and 2020 confirm the Veteran received periodic treatment for recurrent pilonidal cysts and perianal/perirectal abscesses including several incision and drainage (I&D) procedures. Although a number of the pilonidal cyst recurrences are well outside the appeal period, which began in 2009, they are still useful to review as they provide some context with respect to the level of impairment caused by the Veteran's disability and are instructive for that purpose. In April 1979, he was evaluated for a possible recurrence of the pilonidal cyst but an I&D procedure was not performed at that time. See VA Progress Notes dated April 25, 1979 and private medical records from J.L. Bland, M.D. dated April24, 1979. The Veteran was evaluated in July 1980, for persistent pain and soreness in the area of the pilonidal cyst and occasional inflammation and drainage from the site of the cyst. The symptoms were treated conservatively with sitz baths and a donut cushion. Examination revealed a healed surgical scar over the coccyx and considerable tenderness over the area, but the coccyx was otherwise stable. There were no masses noted and no evidence of a recurrent cyst at that time. The examiner noted a previous X-ray of the lumbar spine showed a slight scoliotic curve and spina bifida occulta. See VA Consultation Sheet and VA Rating Examination, dated July 2, 1980. The next relevant entry is dated in March 1996, when the Veteran was evaluated for chronic low back pain. He reported a history of pain in the coccygeal area since pilonidal cyst since 1973 with three recurrences since then. He also reported a history of a car accident in 1994 with increased back pain. Examination revealed a scar at the coccygeal area with no soft tissue thickening or tenderness. There was loss of lumbar lordosis and mild decreased range of motion. The examiner determined that the chronic low back pain was unrelated to the tailbone or pilonidal cyst but rather was consistent with iliopsoas tightness. See VA Medical Certificate, dated March 4, 1996. Private outpatient records show the Veteran underwent I&D procedures for recurrent pilonidal cysts in March 1998 and April 2005. See clinical records from University Hospital Medical Center and University Health Care System. The remaining records, which are pertinent to the current appeal period, show cyst recurrences in October 2009 and September 2010 that were treated conservatively with antibiotic ointment, Epsom soaks, and a donut cushion. See VA treatment records from Aiken Community Based Outpatient Clinic and Augusta Uptown VA Medical Center. There no further documented cyst recurrences after 2010, including in December 2016, when the Veteran underwent a procedure for a left groin abcess unrelated to his service-connected pilonidal cyst. In August 2017, the Veteran underwent VA examination to address his back pain complaints. The examiner noted a diagnosis of spinal stenosis as well as the Veteran's in-service history marsupialization (excision and drainage) of a pilonidal cyst (located on the lower spine at the cleft of the buttocks). Following the examination and review of the file, the examiner concluded there was no evidence to support that any increased pain or disability was related to excision of the pilonidal cyst. See also VA Addendum Medical Opinion dated April 16, 2018. As noted above, in the December 2020, Advisory Opinion, the Director determined that available medical evidence did not support an extra-schedular evaluation for pilonidal cyst. It was explained that while records indicated tenderness in the area of the pilonidal cyst removal, the coccyx itself was stable. Instead, the records showed an additional lumbosacral spine condition unrelated to the pilonidal cyst that results in back pain. The records also show that a higher evaluation was not warranted based on the scarring from the excision of the pilonidal cyst. The evidence of record showed a well-healed surgical scar at the excision site that was neither unstable nor painful. The Director also noted recent treatment showed that excision of a thyroglossal duct cyst at the right neck, also referred to in treatment records as an epidermal inclusion cyst, was unrelated to the pilonidal cyst. The Board has reviewed the record and finds that it does not show that the Veteran's disability picture is so exceptional or unusual that an increased rating on an extraschedular basis is warranted. The manifestations of the Veteran's pilonidal cyst disability are fully contemplated by the schedular rating criteria. He does not argue, and the evidence does not suggest, that his disability manifests in symptoms other than pain. In other words, the painful residuals identified by the Veteran have been specifically contemplated by the criteria for the 10 percent rating that he is already receiving. Collectively the opinions of record indicate that the Veteran's chronic back pain is unrelated to his pilonidal cyst, but rather is associated with additional non service-connected lumbar spine conditions. See March 1996 VA Medical Certificate; the April 2018 VA Addendum Opinion; and the December 2020 Director Advisory Opinion. To the extent the Veteran may have pain at the base of his spine that cannot be distinguished from lumbar spine pain, such symptomatology is compensated under DC 5298 with the assignment of a 10 percent rating for painful residuals. Nevertheless, even assuming that the Veteran's pilonidal cyst symptoms are not fully contemplated in the rating criteria, his disability picture does not exhibit other factors such as marked interference with employment or frequent periods of hospitalization. Insofar as the Veteran did undergo treatment for recurrences of the pilonidal cysts, there is no indication that 18 surgeries/medical procedures were performed during the course of the appeal. In fact, of the seven documented pilonidal cyst recurrences less than half required a I&D procedure none of which were performed during the appeal period. As noted above the Board's referral in 2019 was based on evidence suggesting that the Veteran's pilonidal cyst disability required frequent periods of hospitalization for surgeries/medical procedures. However, after a more thorough review of the evidence, the Board finds that the nonsurgical treatment for recurrent pilonidal cysts in 2009 and 2010 does not constitute frequent hospitalization. The Veteran's pilonidal cyst disability also does not cause marked interference with employment. The standard for demonstrating "marked" impairment in employment is a relatively high bar to meet, and there is no indication from the record that the pilonidal cysts are the sole reason that his occupation ended. In fact, the Veteran testified that his pilonidal cyst was only part of the reason that he was no longer working and that a significant slowdown in business was a factor and that a nonservice connected heart condition also played a role. The Board does not dispute the Veteran's contentions that his service-connected disability has caused some interference with his employment as an auto tech, but interference alone is not tantamount to concluding there has been marked interference with employment, meaning above and beyond that contemplated by the assigned 10 percent rating. Based on the foregoing, the Board finds that application of the schedular standard is practical, and the Veteran's pilonidal cyst disability does not cause marked interference with employment or frequent hospitalization at any time during the period on appeal. Accordingly, the evidence is persuasively against the claim and there is no reasonable doubt to be resolved. See 38 U.S.C. § 5107(b); 38 C.F.R. § 3.102; Lynch v. McDonough, 21 F.4th 776 (Fed. Cir. 2021). TDIU The Veteran is seeking a TDIU. In this regard, the Board notes that, generally, total disability will be considered to exist when there is present any impairment of mind or body that is sufficient to render it impossible for the average person to follow a substantially gainful occupation. 38 C.F.R. § 3.340. Total disability ratings are authorized for any disability or combination of disabilities for which the Schedule for Rating Disabilities prescribes a 100 percent disability evaluation, or, with less disability, if certain criteria are met. Id. Where the schedular rating is less than total, a total disability rating for compensation purposes may be assigned when the disabled person is unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities, provided that, if there is only one such disability, this disability shall be ratable at 60 percent or more, or if there are two or more disabilities, there shall be at least one ratable at 40 percent or more, and sufficient additional disability to bring the combined rating to 70 percent or more. 38 C.F.R. §§ 3.340, 3.341, 4.16(a). In exceptional circumstances, where a veteran does not meet the aforementioned percentage requirements, a total rating may nonetheless be assigned upon a showing that the individual is unable to obtain or retain substantially gainful employment. 38 C.F.R. § 4.16(b). However, the Board has no authority to assign a TDIU rating under 4.16(b) in the first instance and may only refer the claim to the Director of Compensation Services for extra-schedular consideration. Bowling v. Principi, 15 Vet. App. 1 (2001). In his January 2017 testimony, the Veteran asserted that chronic back pain from his service-connected pilonidal cyst disability prevents him from seeking and/or maintaining employment, but also because of his two heart attacks. He also testified that he had stopped working because business was slow and that he might only work two or three days as week as there wasn't much work. The Veteran is currently service connected for pilonidal cyst disability, rated as 10 percent disabling. This is his only service-connected disability. Since the schedular rating for a single service-connected disability must be at least 60 percent, the Veteran does not meet the minimum percentage rating required for consideration of assignment of TDIU. 38 C.F.R. § 4.16(a). As such, the Board will consider whether referral for extraschedular consideration under 38 C.F.R. § 4.16(b) is warranted. The record reflects that the Veteran was previously employed as a diesel mechanic. See December 2016 VA Primary Care Physician Note. There are no specific details about his duties and no indication that the employment was considered marginal. However, of some significance is the March 1996 VA opinion in which the examiner concludes that the Veteran's chronic low back pain was unrelated to the service-connected pilonidal cyst disability. Also of record is the April 2018 VA opinion in which the examiner concludes that there is no evidence to support that there is increased pain or disability related to excision of pilonidal cyst. Finally in a December 2020 advisory opinion, the Director concludes that the Veteran's chronic back pain is related to additional non-service-connected lumbar spine conditions not directly related to the pilonidal cyst disability. In this case the evidence of record does not support the claim that the Veteran's service-connected pilonidal cyst disability is sufficient to produce unemployability so as to warrant referral for extraschedular consideration. This disability is not significantly disabling from an industrial standpoint and the associated symptomatology is appropriately compensated for by the assigned 10 percent schedular rating. A disability rating in itself is recognition that the impairment makes it difficult to obtain or keep employment. The ultimate question is whether the claimant is capable of performing the physical and mental acts required by employment, not whether he or she can find employment. See Van Hoose v. Brown, 4 Vet. App. 361, 363 (1993). Thus, the sole fact that a claimant is unemployed or has difficulty obtaining employment is insufficient to establish entitlement to TDIU. Although the compensable schedular rating implies some degree of interference with employment, the evidence does not show that the pilonidal cyst disability prevents employment. Moreover, the Veteran specifically indicated that his pilonidal cyst disability was not the sole reason that employment ended but that non service-connected heart problems played a large part in his functional impairment. There is also no indication that his service-connected disability prevents the mental acts required to obtain or maintain a substantially gainful occupation. The schedular disability rating criteria are intended to compensate for average impairments in earning capacity resulting from service-connected disability in civil occupations. 38 U.S.C. § 1155. Loss of industrial capacity is the principal factor in assigning schedular disability ratings. Generally, the degrees of disability specified are considered adequate to compensate for considerable loss of working time from exacerbations or illnesses proportionate to the severity of the several grades of disability. See 38 C.F.R. §§ 3.321(a), 3.340, 4.1; Moyer v. Derwinski, 2 Vet. App. 289, 293 (1992). Therefore, to the extent that the pilonidal cyst disability causes some impairment to the Veteran's earning capacity he has been compensated by VA for such impairment with the 10 percent rating. Because the evidence is persuasively against finding that the Veteran is unemployable due solely to his service-connected pilonidal cyst disability, referral for an extraschedular evaluation is not warranted under 38 C.F.R. § 4.16(b) and there is no reasonable doubt to be resolved. 38 U.S.C. § 5107(b); 38 C.F.R. § 3.102; Lynch, 21 F.4th 776. Thomas H. O'Shay Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J.R. Bryant 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.