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Testimony before the Subcommittee on Military Personnel, Committee on 
Armed Services, House of Representatives: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 9:00 a.m. EDT: 

Thursday, April 6, 2006: 

Military Disability Evaluation: 

Ensuring Consistent and Timely Outcomes for Reserve and Active Duty 
Service Members: 

Statement of Robert E. Robertson, Director, Education, Workforce, and 
Income Security Issues: 

GAO-06-561T: 

GAO Highlights: 

Highlights of GAO-06-561T, a testimony to the Subcommittee on Military 
Personnel, House Committee on Armed Services: 

Why GAO Did This Study: 

The House Subcommittee on Military Personnel asked GAO to discuss the 
results of its recent study on the Military Disability Evaluation 
System. In this study, GAO determined (1) how current DOD policies and 
guidance for disability determinations compare for the Army, Navy, and 
Air Force, and what policies are specific to reserve component members 
of the military; (2) what oversight and quality control mechanisms are 
in place at DOD and these three services of the military to ensure 
consistent and timely disability decisions for active and reserve 
component members; and (3) how disability decisions, ratings, and 
processing times compare for active and reserve component members of 
the Army, the largest branch of the service, and what factors might 
explain any differences. 

What GAO Found: 

In March 2006, GAO reported that policies and guidance for military 
disability determinations differ somewhat among the Army, Navy, and Air 
Force. DOD has explicitly given the services the responsibility to set 
up their own processes for certain aspects of the disability evaluation 
system and has given them latitude in how they go about this. As a 
result, each service implements its system somewhat differently. 
Further, the laws that govern military disability and the policies that 
the Department of Defense (DOD) and the services have developed to 
implement these laws have led reservists to have different experiences 
in the disability system compared to active duty members. For example, 
because they are not on active duty at all times, it takes longer for 
reservists to accrue the 20 years of service that may be needed to earn 
monthly disability retirement benefits. 

While DOD has issued policies and guidance to promote consistent and 
timely disability decisions for active duty and reserve disability 
cases, DOD is not monitoring compliance. To encourage consistent 
decision-making, DOD requires all services to use multiple reviewers to 
evaluate disability cases. Furthermore, federal law requires that they 
use a standardized disability rating system to classify the severity of 
the medical impairment. In addition, DOD periodically convenes the 
Disability Advisory Council, comprised of DOD and service officials, to 
review and update disability policy and to discuss current issues. 
However, neither DOD nor the services systematically determine the 
consistency of disability decision-making. DOD has issued timeliness 
goals for processing disability cases, but is not collecting 
information to determine compliance. Finally, the consistency and 
timeliness of decisions depend, in part, on the training that 
disability staff receive. However, DOD is not exercising oversight over 
training for staff in the disability system. 

While GAO’s review of the military disability evaluation system’s 
policies and oversight covered the three services, GAO examined Army 
data on disability ratings and benefit decisions from 2001 to 2005. 
After controlling for many of the differences between reserve and 
active duty soldiers, GAO found that among soldiers who received 
disability ratings, the ratings of reservists were comparable to those 
of active duty soldiers with similar conditions. GAO’s analyses of the 
military disability benefit decisions for the soldiers who were 
determined to be unfit for duty were less definitive, but suggest that 
Army reservists were less likely to receive permanent disability 
retirement or lump sum disability severance pay than their active duty 
counterparts. However, data on possible reasons for this difference, 
such as whether the condition existed prior to service, were not 
available for our analysis. GAO did not compare processing times for 
Army reserve and active duty cases because we found that Army’s data 
needed to calculate processing times were unreliable. However, Army 
statistics based on this data indicate that from fiscal year 2001 
through 2005, reservists’ cases took longer to process than active duty 
cases. 

What GAO Recommends: 

In this report, GAO recommended that the Secretary of Defense take 
certain steps to improve DOD oversight of the military disability 
evaluation system, including evaluating the appropriateness of 
timeliness standards for case processing, and assessing the adequacy of 
training for disability evaluation staff. 

The Secretary concurred and indicated that our recommendations would be 
implemented. 

www.gao.gov/cgi-bin/getrpt?GAO-06-561T. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robert E. Robertson at 
(202) 512-7215 or robertsonr@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to present the results of our work in 
response to this committee's mandate to review the Department of 
Defense (DOD) disability evaluation system, in particular how the 
system ensures that decisions in reserve and active duty cases are 
consistent and timely. Under certain circumstances, both active duty 
and reserve component members of the military are entitled to receive 
compensation for service-incurred or -aggravated injuries or illnesses 
that render them unfit for continued military service. According to DOD 
regulations, a primary goal of the military disability evaluation 
system is to ensure consistent and timely decisions for active duty and 
reserve component members. 

Over the past 5 years, nearly half a million reserve component members 
across all services have been mobilized to augment active duty military 
forces in conflicts and peacekeeping missions worldwide.[Footnote 1] In 
total, the Army, Navy, and Air Force evaluated 23,316 disability cases 
in fiscal year 2005. One in four of these was a reservist's case. 
Because reserve component members represent a substantial proportion of 
the mobilized military force, it is incumbent on DOD and the military 
to ensure that disability decisions made in their cases are consistent 
with those made in the cases of active duty members, and as timely. 

The information I'm providing today is based on work we reported on 
March 31, 2006, which was completed in accordance with generally 
accepted government auditing standards.[Footnote 2] I will be 
discussing (1) how current DOD policies and guidance for disability 
determinations compare for the Army, Navy, and Air Force, and what 
policies are specific to reserve component members of the military; (2) 
what oversight and quality control mechanisms are in place at DOD and 
these three services to ensure consistent and timely disability 
decisions for active and reserve component members; and (3) how 
disability decisions, ratings and processing times compare for active 
and reserve component members of the Army, the largest branch of the 
military, and what factors might explain any differences. 

In summary, GAO found that DOD has explicitly given the services the 
responsibility to set up their own processes for certain aspects of the 
disability evaluation system and has given them latitude in how they go 
about this. As a result, each service implements its system somewhat 
differently. Further, the laws that govern military disability and DOD 
and service policies implementing these laws have led reservists to 
have different experiences in the disability system compared to active 
duty members. While DOD has issued policies and guidance to promote 
consistent and timely disability decisions for active duty and reserve 
disability cases, DOD is not monitoring compliance, and neither DOD nor 
the services systematically determine the consistency of disability 
decision making. With regard to ensuring the timeliness of disability 
case processing, DOD has issued processing time goals but is not 
collecting information to determine compliance. Our own statistical 
analysis found that Army reservists received similar disability ratings 
as their active duty counterparts, but reservists may be less likely to 
receive military disability benefits than their active duty 
counterparts. Data available from the Army were not reliable enough for 
our analysis. However, Army statistics indicate that from 2001 through 
2005 reservists' cases took longer to process than active duty 
soldiers' cases. 

Background: 

Service members who become physically unfit to perform military duties 
due to service-incurred or -aggravated injuries or illnesses may 
receive military disability compensation under certain conditions. Each 
of the services administers its own disability evaluation process. 
According to DOD regulations, the process should include a medical 
evaluation board (MEB), a physical evaluation board (PEB), an appellate 
review process, and a final disposition. Each service member who goes 
through the system should be assigned a Physical Evaluation Board 
Liaison Officer (PEBLO) to help the service member navigate the system 
and prepare documents for the PEB. 

There are a number of steps in the disability evaluation process and 
several factors play a role in the decisions that are made at each 
step. See fig. 1. 

Figure 1: Decisions Made During the Military Disability Evaluation 
Process: 

[See PDF for image] 

[End of figure] 

The disability evaluation process has four possible outcomes. A service 
member can be: 

1. Found fit for duty; 

2. Separated from the service without benefits--service members whose 
disabilities were incurred while not on duty or as a result of 
intentional misconduct are discharged from the service without 
disability benefits; 

3. Separated from the service with lump sum disability severance pay; 
or: 

4. Retired from the service with permanent monthly disability benefits 
or placed on the temporary disability retirement list (TDRL). 

The disability evaluation process begins at a military treatment 
facility (MTF) when a physician medically evaluates a service member's 
injury or condition to determine if the service member meets the 
military's retention standards, and prepares a narrative summary 
describing the findings. This process is referred to as a medical 
evaluation board (MEB). Service members who meet retention standards 
are returned to duty. Those who do not are referred to the physical 
evaluation board (PEB). 

The first step in the PEB stage of the process is the informal PEB--an 
administrative review of the case file without the presence of the 
service member. To arrive at its findings and recommendations regarding 
eligibility for disability benefits, the PEB determines if service 
members are fit for duty and their injuries or conditions are 
compensable, and what disability rating their injuries or conditions 
should be assigned. The PEB also considers the stability of the 
condition in cases eligible for monthly disability retirement benefits. 
Service members with conditions that might improve or worsen are placed 
on TDRL and reevaluated by the PEB at least every 18 months to 
determine if their condition has stabilized. Those who continue to be 
unfit for duty after 5 years on TDRL are separated from the military 
with monthly retirement benefits, discharged with severance pay, or 
discharged without benefits, depending on their condition and years of 
service. 

Service members have the opportunity to review the informal PEB's 
findings and may request a formal hearing with the PEB. However, only 
those found unfit are guaranteed a formal hearing. If service members 
disagree with a formal PEB's findings and recommendations, they can, 
under certain circumstances, appeal to the reviewing authority of the 
PEB. Once the service member either agrees with the PEB's findings and 
recommendations or exhausts all available appeals, the reviewing 
authority issues the final disposition in the case. 

DOD Policies and Guidance Allow the Services to Implement the 
Disability Evaluation System Differently: 

DOD explicitly gives the services responsibility for administering the 
military disability evaluation system. While DOD regulations establish 
some parameters and guidelines for this system, the services have 
considerable latitude in how they interpret them. Consequently, across 
the services there are differences in MEB and PEB procedures and the 
use of counselors to help service members navigate the system. 

With regard to the MEB, the medical evaluation of a service member's 
ability to meet military retention standards, the Air Force convenes an 
actual board of physicians who meet regularly and vote on whether 
service members meet retention standards. In contrast, the Army and 
Navy MEBs are informal procedures during which case files are 
separately reviewed by board members. Each branch of the service has 
established PEB to determine whether service members who do not meet 
medical retention standards are entitled to disability compensation. 
Makeup of the board differs by service. The Army allows the same 
individuals to sit on both the informal and formal PEB in the same 
case. The Air Force allows this only under certain circumstances. The 
Navy has no written policy on the matter, and one Navy PEB official 
indicated that the same individuals often served on both informal and 
formal PEBs in a case. 

DOD regulations require that each service assign a Physical Evaluation 
Board Liaison Officer to service members whose disability cases are 
being evaluated. According to these regulations, PEBLOs are expected to 
counsel these service members on their rights, the effects of MEB and 
PEB decisions, and available disability benefits. Each service employs 
PEBLO counselors in accordance with these rules, but has placed them 
under different commands, begins the counseling process at different 
points in the disability evaluation process, and provides PEBLOS with 
different levels of training. 

DOD and the Services Have Established Policies That Result in Different 
Experiences with the Disability System for Reservists: 

Due to the part-time nature of reserve service, some laws governing 
military disability compensation result in different experiences with 
the disability system for reservists. Under the law, to receive monthly 
disability retirement benefits, a service member determined unfit for 
duty must have at least 20 years of active duty service or a disability 
rated at least 30 percent. Because reservists are not on duty at all 
times, it takes longer for them to accrue the 20 years of service 
needed to qualify for monthly disability retirement benefits when their 
disability rating is less than 30 percent. 

Part-time status also makes it more difficult for reservists with 
preexisting conditions to be covered by the 8-year rule and therefore 
eligible for disability compensation of any kind. By law, service 
members determined to be unfit for duty are automatically eligible for 
disability compensation if they have at least 8 years of active duty 
service, even if their conditions existed prior to entry into the 
military or were not aggravated by their military service. However, 
this entitlement only applies to reservists when they are on ordered 
active duty of more than 30 days at the time their case is before a 
PEB. For reservists, accruing these 8 years can be more difficult than 
for active duty service members. 

Questions About Line of Duty Determinations: 

Officials reported that commanders and others responsible for 
completing line of duty determinations were often uncertain as to when 
line of duty determinations were necessary for reservists and active 
duty members. Moreover, these officials noted that in some cases, the 
necessary line of duty determinations were not made, resulting in 
delays for service members. For example, Air Force officials we spoke 
with had different impressions as to whether line of duty 
determinations were always required for reservists, even though Air 
Force regulations state they are. Officials from the Army and Army 
National Guard similarly offered different perspectives on the need for 
line of duty determinations for reservists. 

Army Reservists Often Are Not Returned Home for Medical Treatment: 

In the Army, deployed active duty soldiers return to their unit for 
service in a back up capacity when they are injured or ill and require 
medical treatment. Mobilized injured or ill Army reservists have no 
similar unit to return to. Consequently, their mobilization orders are 
often suspended; they are retained on active duty in "medical holdover 
status" and often assigned to a medical retention processing unit while 
they receive medical treatment. While in medical holdover status, 
reservists may live on base, at a military treatment facility, at home 
or at other locations. After their mobilization orders expire, they can 
elect to continue on active duty through a program such as medical 
retention processing, which allows them to continue receiving pay and 
benefits. According to the Army, about 26,000 reservists entered 
medical holdover status between 2003 and 2005. 

Unlike most injured active duty soldiers, reservists in medical 
holdover generally must live away from their families while receiving 
medical treatment. In certain cases reservists in medical holdover may 
receive treatment and recuperate at home. The Army's Community Based 
Health Care Organizations (CBHCO) provide medical and case management 
for these reservists. As of December 2005, about 35 percent of the 
reservists in medical holdover were being cared for in the CBHCO 
program. In order to be assigned to this program, reservists must meet 
a number of criteria. For example, reservists must live in communities 
where they can get appropriate care, and they must also be reliable in 
keeping medical appointments. 

Several Features of the Disability Evaluation System Are Intended to 
Help Ensure Consistent Decision Making: 

To help ensure consistent decision making in disability cases, all 
services must use a common rating schedule, multiple reviews are 
required, and a disability advisory council was created to oversee 
administration of the system. The law requires all services to assign 
ratings to disabilities based on a common schedule--the Department of 
Veterans Affairs Schedule for Rating Disabilities (VASRD). The VASRD is 
a descriptive list of medical conditions associated with disability 
ratings. DOD regulations require each service to review service 
members' case files multiple times during the disability evaluation 
process by a number of officials with different roles. Military 
officials also regard the appeals process required by DOD as helping to 
ensure the consistency of disability evaluation decision making. 

According to DOD officials, primary oversight of the disability 
evaluation system currently rests with the DOD Disability Advisory 
Council. The council is composed of officials from each of the three 
services' disability agency; DOD health affairs, reserve affairs, and 
personnel officials; and representatives from the Department of 
Veterans Affairs. According to DOD officials, the council serves as a 
forum to discuss issues such as changing rules and increasing 
coordination among the services. The council generally does not 
formally report on its activities and accomplishments to higher 
officials in the DOD chain of command nor has it met on a regular basis 
during the last year. 

Lack of Oversight by DOD and the Services Provides Little Assurance 
Decisions Are Consistent: 

Despite this policy guidance and the presence of the disability 
council, both DOD and the three services lack quality assurance 
mechanisms to ensure that decisions are consistent. Given that one of 
the primary goals of the disability system is that disability 
evaluations take place in a consistent manner, collecting and analyzing 
the service member's final disability determinations are critical for 
ensuring that decisions are consistent. DOD regulations recognize this 
and require that the agency establish necessary reporting requirements 
to monitor and assess the performance of the disability system and 
compliance with relevant DOD regulations. Yet DOD does not collect and 
analyze information from the services on the final disability 
determinations and personal characteristics of service members going 
through the disability system. 

DOD Has Instituted Timeliness Goals for Processing Disability Cases but 
Does Not Oversee Compliance with Them: 

To help ensure timely disability decisions, DOD regulations indicate 
that MEBs should normally be completed in 30 days or less; PEBs should 
normally be completed in 40 days or less. DOD does not regularly 
collect available data from the services on their MEB and PEB 
processing times, however, so it does not monitor compliance with its 
goals. 

The Army and Navy generally use the data they compile on their 
disability cases to track the timeliness of both MEB and PEB decisions. 
The Air Force only tracks processing times for PEB cases because it has 
no centralized database containing information from all its MEB cases. 
Data reported by the services show disability case processing time 
goals are not being met. Some of the military officials we spoke with 
believe this is because the goals themselves are unrealistic, 
particularly when addendums to the MEB's findings are required, such as 
in orthopedic or psychiatric cases requiring certain medical tests. 

The usefulness of data of disability case processing times may also be 
undermined by confusion among military officials and data entry staff 
regarding when the disability evaluation process begins. According to 
DOD, the process begins on the date a physician dictates the narrative 
summary for an MEB. When we compared original Army PEB case files to 
Army electronic data from both its MEB and PEB databases, for example, 
we found that the date entered in the electronic file was often not the 
date on the narrative summary. When we asked about these errors, Army 
officials said that increased training of data entry staff would help 
resolve this problem. Navy officials also noted that there was some 
confusion about when case processing begins if additional medical 
information is needed to make a disability decision for a service 
member. 

DOD's Delegation of Training to the Services and Staff Turnover Present 
Additional Challenges for the Disability System: 

According to DOD regulations, the Assistant Secretary of Defense for 
Health Affairs is given explicit instructions to develop and maintain a 
training program for MEB and PEB staff. When we spoke with officials 
from the Office of Health Affairs, however, they indicated they were 
unaware that they had the responsibility to develop such a training 
program. In addition, despite high turnover among military disability 
evaluation staff, the services do not have a system to ensure that all 
staff are properly trained. This turnover stems, in part, from the 
military requirement that personnel rotate to different positions in 
order to be promoted. Military officials told us that depending on the 
positions involved, some staff remain in their positions from 1 to 6 
years, with most remaining about 3 years. This turnover and the 
resulting loss of institutional knowledge require that the services 
systematically track who has been properly trained. However, all of the 
services lack data systems that would allow them to do so, an issue 
that was highlighted in a recent RAND report.[Footnote 3] 

Some Inconsistencies May Exist in Disability Decisions for Army Reserve 
and Active Duty Service Members: 

Our analyses of Army data from calendar years 2001 to 2005 indicated 
that after taking into account many of the differences between reserve 
and active duty soldiers, Army reservists and their active duty 
counterparts received similar disability ratings. The results of our 
analyses of military disability benefit decisions for soldiers suggest 
that Army reservists with impairments that made them unfit for duty 
were less likely to receive either permanent disability retirement or 
lump sum disability severance pay than their active duty counterparts. 
The results of our analysis of benefits are less definitive than those 
from our analysis of ratings, however, because data on all possible 
reasons for the difference in receipt of benefits, such as years of 
service and whether the condition existed prior to service, were not 
available for our analysis. 

Poor Quality Data Precluded GAO Analysis, but the Army Reports 
Reservists' Cases Can Take Longer to Process: 

We did not conduct our own statistical analysis to determine if 
processing times for Army reserve and active duty soldiers' cases were 
comparable. The electronic data needed to calculate these times were 
unreliable, so not of sufficient quality to warrant their use in our 
analysis. Nonetheless, the statistics the Army provided on PEB 
disability case processing times indicate that reservists' cases 
reviewed between fiscal years 2001 and 2005 took consistently longer 
than those of active duty soldiers. Over half (54 percent) of reserve 
soldiers' cases took longer than 90 days, while over one-third (35 
percent) of active duty soldiers' cases exceeded 90 days. 

According to Army officials, there are a number of possible 
explanations for the differences in processing times in reservist and 
active duty cases. In reservists' cases, the MEB often must request 
medical records from private medical practitioners, which can cause 
considerable delays in the process. In addition, the personnel 
documents for reservists are stored in facilities around the United 
States, and may take longer to retrieve than records for active duty 
soldiers. 

Conclusions: 

Decisions affecting eligibility for military disability benefits have a 
significant impact on the future of service members dedicated to 
serving their country. Given the importance of these decisions and the 
complexity of the evaluation process and rules governing eligibility 
for benefits, it is essential that the services take adequate steps to 
ensure that decisions in reserve and active duty cases are consistent 
and timely. It is also incumbent on DOD to adequately oversee 
administration of its disability evaluation system and the fairness of 
the system's outcomes for both reserve and active duty members of the 
military across all the services. 

DOD is not adequately monitoring disability evaluation outcomes in 
reserve and active duty disability cases. The services are not 
systematically evaluating the consistency and timeliness of disability 
decisions, or compiling reliable data on all aspects of the system 
needed to statistically analyze disability evaluation outcomes. With 
regard to the timeliness of disability case processing, military 
officials recognize that not all disability cases are processed within 
the time frames set by DOD and that reservist cases take longer to 
process than those of active duty members. They have suggested that the 
goals may not be appropriate in many cases. If timeliness goals do not 
reflect appropriate processing times, they may not be a useful program 
management tool. Finally, while the consistency and timeliness of 
decisions depend on the adequate training and experience of all those 
involved in evaluating disability cases, we found that DOD had little 
assurance that staff at all levels in the process are properly trained. 

Based on these findings and conclusions, we recommended in our recent 
report that the Secretary of Defense take certain steps to improve DOD 
oversight of the military disability system, including evaluating the 
appropriateness of timeliness standards for case processing and 
assessing the adequacy of training for disability evaluation staff. The 
Secretary concurred with our recommendations and indicated our 
recommendations would be implemented. 

Mr. Chairman, this concludes my remarks. I would be happy to answer any 
questions you or the other members of the committee may have. 

GAO Contact: 

Robert E. Robertson (202)512-7215 or robertsonr@gao.gov: 

Staff Acknowledgments: 

The following individuals have made major contributions to this 
statement--Jason Barnosky, Erin Godtland, Scott Heacock, Anna Kelley, 
and Clarita Mrena. 

FOOTNOTES 

[1] In this testimony, the word "reservist" refers to a reserve 
component member. 

[2] GAO, Military Disability System: Improved Oversight Needed to 
Ensure Consistent and Timely Outcomes for Reserve and Active Duty 
Service Members, GAO-06-362 (Washington, D.C.: Mar. 31, 2006). 

[3] Cheryl Y. Marcum, Robert M. Emmerichs, Jennifer S. Sloan, and Harry 
J. Thie, Methods and Actions for Improving Performance of the 
Department of Defense Disability Evaluation System. MR-1228-OSD (Santa 
Monica, Californi[A]: the Rand Corporation, 2002).