Claim for Additional Variable Incentive Pay

A Public Health Service (PHS) officer appealed a Claims Group denial of his claim for additional variable incentive pay (VIP) in connection with a period of active duty with PHS. Shortly after being called to active duty, the officer began residency training at the PHS hospital in Seattle through a program conducted in affiliation with a local university. He completed the training program 4 years later and signed a VIP agreement authorized under applicable legislation to remain on active duty for 2 years. PHS determined that the officer's 4-year residency included 45 months of extramural training at the university and concluded that he had incurred a 2-year active duty obligation as a result of that training. Therefore, he was entitled to VIP at a lower rate than he would have otherwise received. The officer contended that he did not incur an active duty obligation as a result of the training since it was strictly intramural and that he should be entitled to the higher rate. Under applicable legislation, an officer serving on an active duty obligation resulting from a medical education program leading to appointment or designation as a medical officer shall be paid at the lower VIP rate for each year of the active duty agreement. PHS regulations prescribe that training received in a non-PHS facility shall be classified as extramural training, thereby giving rise to an active duty obligation and a reduced entitlement to VIP. GAO held that, under the regulations, the officer's instruction in other than a PHS facility must be considered as extramural training. Accordingly, the action of the Claims Group was sustained.