The Court vacated and remanded because the Board gave inadequate reasons or bases, failed to consider functional loss and pain in a back-rating claim, did not properly analyze unemployability, and did not fully develop relevant treatment records. The case matters for its early and influential articulation of VA’s explanation and development duties.

The appellant sought increased ratings for a generalized anxiety disorder and residuals of an intervertebral disc syndrome, as well as a total disability rating based on individual unemployability. The Court reviewed a Board decision that relied heavily on limited examination findings and concluded that the evidence did not support higher ratings or unemployability. The Court held that the Board failed to provide adequate reasons or bases for rejecting the claim for an increased psychiatric rating, failed to address pain and functional loss relevant to the back disorder under 38 C.F.R. § 4.40, and improperly relied on its own medical judgment rather than independent medical evidence. The Court also held that the Board did not adequately analyze unemployability, including the combined effects of the service-connected disabilities and the meaning of substantially gainful employment. In addition, the Court found that VA had not fully developed relevant treatment records and that the Board failed to consider whether the appellant was entitled to non-service-connected pension. The decision was vacated and remanded for further development and reconsideration.

The Court reversed and remanded because the Board failed to provide adequate reasons or bases for denying a PTSD rating above 50 percent, including no explanation for why the veteran did not meet the 70-percent criteria. The decision reinforces that the Board must explain changes in factual findings and cannot rely on unexplained conclusory characterizations.

The veteran served in Korea and had a long psychiatric history before being diagnosed with PTSD. After VA initially granted a 30 percent evaluation, the rating was increased to 50 percent. When the veteran later sought an increased rating, the record contained conflicting evidence about diagnosis and severity, including a VA examiner who questioned PTSD but still described severe vocational and social impairment, and a treating VA physician who stated that the symptoms severely affected family functioning and employment. The Board denied a rating above 50 percent, characterizing the disability as causing only considerable social and industrial impairment.

The Court reversed and remanded. It held that the Board's decision did not comply with 38 U.S.C. § 7104(d)(1) because it failed to explain why the veteran was not entitled to the 70 percent evaluation under the revised PTSD rating criteria. The Court also noted that the Board gave no adequate explanation for changing the industrial impairment characterization from severe to considerable, particularly in light of the prior Board decision and the evidentiary record. The Court emphasized that the Board must identify the evidence it finds persuasive or unpersuasive and provide a critical, reasoned analysis—not a conclusory restatement of the result. The practical effect is that the Board must directly address the higher rating criteria and explain any factual recharacterization of severity with record-based reasoning.

The Court held that the Board erred by relying on an inadequate examination that failed to address the functional impact of pain and by improperly assigning an extraschedular rating in the first instance rather than referring the issue under 38 C.F.R. § 3.321(b)(1). The case became a foundational decision governing extraschedular referral procedures and the Board’s jurisdictional limitations in extraschedular adjudication.

The veteran appealed a Board decision involving a service-connected mandible fracture with temporomandibular joint pain. The Board denied a higher schedular rating but granted an additional 10 percent extraschedular evaluation based on marked interference with employment. The Board also declined to reopen claims involving hearing loss and tinnitus.

The Court first addressed the adequacy of the medical examination used to evaluate the jaw condition. The record contained repeated evidence of severe pain, difficulty chewing, sleep impairment, and occupational limitations. However, the VA examination failed to discuss whether pain resulted in functional or masticatory loss under 38 C.F.R. §§ 4.40 and 4.45. The Court held that the examination was inadequate because it did not evaluate the functional impact of pain, frustrating judicial review and violating VA’s duty to assist.

The Court then addressed extraschedular consideration under 38 C.F.R. § 3.321(b)(1). The Board had directly awarded an extraschedular rating without first referring the issue to the Director of Compensation and Pension Service or the Under Secretary for Benefits. The Court held that the Board lacked authority to assign an extraschedular rating in the first instance because the regulation delegated that authority specifically to designated VA officials. The Board could consider whether referral was warranted, but it could not independently assign the extraschedular evaluation.

The Court further explained that the Board failed to properly consider whether the veteran had notice and opportunity to present evidence regarding extraschedular consideration under Bernard v. Brown. Nevertheless, because the Board’s error resulted in the award of additional benefits rather than a denial, the Court found no prejudicial harm to the veteran from the improperly assigned extraschedular rating itself.

Finally, the Court addressed reopening standards for hearing loss and tinnitus claims. The Court discussed the distinction between competent medical evidence and opinions based solely on a claimant’s previously rejected history. Applying Justus, Reonal, and related reopening cases, the Court upheld the Board’s refusal to reopen the claims because the newly submitted medical evidence relied on a factual premise previously rejected by the Board.

In Francisco v. Brown, the Court held that when a veteran seeks an increased disability evaluation, the present level of disability is generally the primary focus of the analysis. The decision explained that although the veteran’s medical history must still be reviewed, the most relevant evidence in an increased-rating claim typically concerns the current severity of the condition. Francisco became a foundational case governing evaluation of increased-rating claims and the evidentiary focus placed on current disability manifestations.

The case stated that in an increased-rating claim the present level of disability is generally the primary concern, subject to later cases allowing staged ratings. In Francisco v. Brown, the Court clarified an important principle governing traditional increased-rating claims: when entitlement to compensation has already been established and the veteran seeks a higher evaluation, the present level of disability is generally the primary concern.

The veteran sought an increased rating for residuals of a gunshot wound involving the left shoulder and muscle group III following shoulder arthroplasty surgery. The record contained earlier evidence showing severe weakness and limited motion, including a 1988 examination documenting almost no muscle strength in the upper arm. However, more recent 1992 examinations reflected improved function following the arthroplasty procedure.

The Court held that the Board properly relied on the more recent medical findings because increased-rating claims focus primarily on the current severity of the disability rather than historical symptom levels. The Court explained that although VA must review the recorded history of a disability under 38 C.F.R. § 4.2, the regulations do not give older medical reports precedence over current findings.

The Court also reaffirmed that where the evidence does not adequately reveal the current state of a service-connected disability, VA’s duty to assist requires a contemporaneous medical examination.

Francisco became one of the foundational cases distinguishing traditional increased-rating claims from initial-rating appeals later addressed in Fenderson v. West.

The Federal Circuit held that § 4.59 does not create a freestanding right to a 10 percent rating for any painful joint condition; it operates only in conjunction with the applicable diagnostic code. Because Diagnostic Code 5230 provides a noncompensable rating for limitation of motion of the ring or little finger, the veteran was not entitled to a compensable award based solely on pain.

Jeanine Frazier, acting as substituted appellant for her deceased father, sought accrued benefits based on the contention that his right fourth- and fifth-finger disability should have been rated compensably because the fingers were painful after a service-connected injury. The VA granted service connection and assigned a noncompensable rating under Diagnostic Code 5230, which provides a zero percent rating for limitation of motion of the ring or little finger. She argued that 38 C.F.R. § 4.59 required at least the minimum compensable rating for any painful joint condition and urged the court to treat the regulation as a freestanding entitlement to a 10 percent rating. The Federal Circuit rejected that position, explaining that § 4.59 must be read in conjunction with the applicable diagnostic code and that the regulation does not authorize compensation under diagnostic codes that do not apply to the disability at issue. The court relied on the structure and purpose of the rating schedule, the Secretary’s consistent interpretation, and the Veterans Court’s prior decision in Sowers v. McDonald. The court also rejected the broader statutory argument that VA may not assign a zero percent rating, noting that veterans statutes and regulations expressly recognize noncompensable service-connected disabilities.

The Court held that the Board errs when it relies on Global Assessment of Functioning (GAF) scores to assign psychiatric ratings in cases governed by DSM-5, because VA formally abandoned GAF scores when it adopted DSM-5. The decision clarified that psychiatric evaluations must focus on the actual severity, frequency, and functional impact of symptoms rather than numerical GAF scoring.

The veteran appealed the Board’s denial of a higher rating for PTSD and entitlement to TDIU. One of the central issues involved the Board’s reliance on GAF scores contained in the medical evidence. VA had already adopted DSM-5 for applicable claims, and DSM-5 eliminated the use of GAF scores due to concerns regarding their conceptual reliability and clinical usefulness.

The Court held that the Board should not rely on GAF scores when evaluating psychiatric disabilities in DSM-5 cases. Although historical GAF evidence may still appear in records, the Court explained that the Board cannot treat those scores as substantive rating benchmarks after VA abandoned the scale. Instead, the analysis must focus on the veteran’s actual psychiatric symptoms, occupational impairment, social impairment, and overall functional limitations.

The Court also discussed extraschedular referral analysis and emphasized the importance of considering the collective functional impact of symptoms rather than mechanically relying on isolated evidence or numerical scoring tools.

In Hart v. Mansfield, the Court held that staged ratings may be assigned in claims for increased disability evaluations when the evidence demonstrates distinct periods of varying symptom severity during the appeal period. The decision extended the staged-rating principles established in Fenderson v. West beyond initial-rating claims and clarified that VA must consider whether different ratings are warranted for separate periods based on the facts found. Hart became a foundational case governing staged ratings in increased-rating appeals.

The case extended staged ratings to increased-rating claims, not just original ratings. In Hart v. Mansfield, the Court extended the concept of staged ratings beyond initial-rating appeals and held that staged ratings also apply in traditional increased-rating claims when the evidence shows distinct periods of different disability severity during the appeal period.

The veteran sought an increased rating for a service-connected left-knee disability rated under Diagnostic Code 5257 for instability. During the appeal period, conflicting medical evidence emerged regarding the severity of the knee condition. A private physician documented anterior cruciate ligament laxity and instability in 2001 and 2002, while later VA examinations in 2005 found no instability.

The Board denied an increased rating by focusing primarily on the most recent VA examination findings and concluding that no current instability existed. The Court held that the Board failed to adequately consider whether the earlier medical evidence supported a higher staged rating during part of the appeal period.

The Court explained that increased-rating claims may involve multiple distinct levels of disability over time and that VA must evaluate the disability throughout the entire relevant appeal period — generally from one year before the claim was filed until final adjudication.

The Court also emphasized that resolving conflicting medical evidence and determining whether the disability actually improved or merely fluctuated are factual determinations that must be adequately addressed by the Board with proper reasons or bases.

Hart became the foundational staged-rating case for increased-rating claims and significantly expanded the practical impact of Fenderson v. West.

The Court held that VA must obtain and consider Social Security Administration (SSA) disability records when put on notice that such records may be relevant to the veteran’s claim. The Court further held that the Board may not reject favorable private medical evidence without providing adequate reasons and bases supported by independent medical evidence.

Hayes v. Brown involved multiple service-connection, increased-rating, and rating-reduction issues arising from disabilities suffered by a former prisoner of war. The decision became particularly important for:
• SSA-record development,
• evaluation of private medical opinions,
• rating-reduction analysis,
• and adequacy of medical evidence.

The veteran sought:
• increased ratings for frozen feet and thrombophlebitis,
• restoration of a compensable pulmonary embolus rating,
• and service connection for degenerative arthritis and gastrointestinal disability.

The record contained significant favorable evidence from the veteran’s treating physician, Dr. Lynn, who described:
• severe venous disease,
• persistent symptoms,
• occupational limitations,
• and the continuing need for compression treatment and activity restriction.

The veteran also testified that he had been awarded Social Security disability benefits. However, VA failed to obtain the underlying SSA records before adjudicating the claims.

The Court emphasized that:
• once VA is placed on notice that relevant SSA records exist,
• VA must attempt to obtain those records as part of the duty to assist.

Relying on:
• Murincsak,
• Collier,
• and related precedent,

the Court explained that SSA findings and underlying medical evidence may contain highly relevant evidence concerning employability and disability severity.

The Court also criticized the Board for:
• inadequately addressing favorable private medical evidence,
• relying upon incomplete VA examinations,
• and failing to provide adequate reasons and bases for rejecting Dr. Lynn’s conclusions.

Importantly, the Court reaffirmed that:
• the Board may not substitute its own medical judgment for independent medical evidence,
• and rejection of favorable medical opinions requires an adequate evidentiary basis.

The Court further addressed:
• rating reductions under Kitchens,
• adequacy of examinations under 38 C.F.R. § 4.2,
• and VA’s obligation to obtain complete medical evidence before reducing ratings.

The Court:
• affirmed portions of the Board decision,
• vacated and remanded others,
• and reversed the pulmonary-embolus reduction because VA failed to properly apply the governing reduction standards.

The Court held that when VA grants service connection for a disability, that grant necessarily includes recognition that the veteran has a current disability at the time of the award. VA may not later sever service connection merely because subsequent evidence calls the original diagnosis into question unless VA satisfies the regulatory requirements governing severance.

Hedgepeth v. Wilkie addressed the relationship between service connection, current disability requirements, changing medical diagnoses, and severance principles. The case clarified the legal significance of a prior grant of service connection and the limitations on VA’s ability to later revisit that determination outside the severance framework.

The veteran was granted service connection for PTSD based on medical evidence diagnosing PTSD and linking the condition to service. Years later, VA examiners questioned whether the veteran actually met the diagnostic criteria for PTSD and instead attributed the symptoms to other psychiatric conditions. Rather than formally severing service connection, VA reduced the evaluation to noncompensable based on the conclusion that the veteran no longer had PTSD.

The Board upheld the reduction, reasoning that the veteran lacked a current PTSD diagnosis during the appeal period.

On appeal, the Court rejected that reasoning. The Court explained that a valid grant of service connection necessarily establishes that the veteran had a current disability at the time service connection was awarded. Once service connection is granted, VA cannot effectively revisit or nullify that finding indirectly through a rating reduction analysis without complying with the severance procedures contained in 38 C.F.R. § 3.105(d).

The Court distinguished between:

• disagreement over diagnosis,
• changes in symptom presentation,
• and the formal legal process required to sever service connection.

Importantly, the Court emphasized that:

• a later medical disagreement with the original diagnosis does not automatically extinguish service connection,
• and VA may not treat the disability as though it never existed without satisfying the heightened severance standard.

The Court also discussed the “current disability” requirement in veterans law and clarified that the existence of a disability supporting an earlier service-connection award remains legally significant throughout the rating process.

Because the Board improperly treated the matter as an ordinary increased-rating analysis rather than recognizing the legal consequences of the prior service-connection grant, the Court vacated and remanded the decision.

Hedgepeth became an important case involving:

• severance principles,
• changing diagnoses,
• current disability analysis,
• and the legal effect of prior service-connection awards.

The Court held that a physician’s second statement was not new and material because it was cumulative and did not link hearing loss to service, but it reversed the Board’s noncompensable finger rating because DC 5226, read with its notes, authorized a 10% evaluation for favorable middle-finger ankylosis.

The appellant appealed a Board decision that refused to reopen a hearing-loss claim and denied a compensable rating for a service-connected right middle finger disability. On reopening, the Court applied the then-governing new-and-material-evidence standard and concluded that Dr. Hunt’s second statement was essentially cumulative of his earlier statement because it added only that treatment occurred shortly after service, without linking any treatment to hearing loss or otherwise creating a reasonable possibility of changing the outcome. The Court therefore affirmed the Board’s refusal to reopen the hearing-loss claim.

On the rating issue, the Court focused on the wording of 38 C.F.R. § 4.71a, DC 5226, and the accompanying notes. The Board had effectively required evidence that ankylosis or limitation of motion prevented flexion to within two inches of the palm before a compensable rating could be assigned. The Court read the regulation differently, explaining that if the finger could flex to within two inches of the palm, the condition was favorable ankylosis and DC 5226 provided a 10% evaluation. Because the record showed the veteran could reach his palm, albeit with difficulty, the Court reversed and remanded for a compensable rating consistent with the regulation’s plain language. The case matters because it illustrates both the strictness of reopening requirements and the necessity of applying rating criteria as written rather than adding unstated restrictions.

The Court affirmed a Board denial of a PTSD rating above 30 percent because the Board’s severity determination had a plausible evidentiary basis and satisfied Gilbert’s reasons-or-bases requirement. The case is a reminder that disability-rating disputes are reviewed for clear error, not de novo reweighing.

The appellant sought an increased PTSD rating from 30 percent to 50 percent, arguing that his symptoms and occupational limitations showed considerable social and industrial impairment. The Board found that although he experienced depression, flashbacks, isolation, and paranoia, he remained employed full-time and did not show the level of impairment required for a 50 percent evaluation. On appeal, the Court treated the Board’s severity determination as a factual finding subject to clear-error review and held that the record provided a plausible basis for the Board’s conclusion. The Court also rejected the attempt to use other Board decisions as precedential authority, explaining that prior Board decisions are nonprecedential and may be considered only to the extent they reasonably relate to the case. The decision matters because it confirms the deferential review applied to rating findings and underscores the limited value of relying on unrelated Board decisions in appellate advocacy.

The Court reversed the Board’s denial of service connection for myofascial pain syndrome because the record contained in-service diagnoses of fibromyalgia/myofascial pain syndrome and no plausible basis to find the condition was not manifested in service. It vacated and remanded the depression claim for failure to address secondary service connection and related presumptions, and affirmed the right-hand rating denial.

Brian D. Hoag appealed a Board decision denying service connection for myofascial pain syndrome, service connection for depression, and an increased rating for residuals of a right-hand injury. The Court reviewed extensive service treatment and post-service evidence showing repeated complaints of widespread pain, in-service diagnoses of fibromyalgia, myofascial pain syndrome, musculoskeletal pain syndrome, and related musculoskeletal findings. On the myofascial pain syndrome issue, the Court held that the Board’s finding that the condition was not manifested in service had no plausible basis in the record. Because the evidence included multiple in-service diagnoses and a post-service VA examiner’s observations, the Court reversed and ordered service connection to be awarded, with a rating to be assigned on remand. For depression, the Court agreed that the Board had not adequately addressed secondary service connection and instructed the Board to consider direct service connection, the presumption of soundness, and aggravation if the condition preexisted service. On the right-hand rating issue, the Court found no clear error and held that the Board’s reasons or bases were adequate, so it affirmed.

The Court reversed a reduction of a 100% PTSD rating to 70% because VA did not show material improvement under the ordinary conditions of life. The Court also held that the Board erred by failing to consider former 38 C.F.R. § 4.16(c) where the veteran’s service-connected mental disorder precluded substantially gainful employment.

The veteran served in Vietnam and was awarded a 100% rating for PTSD after examinations reflected severe psychiatric symptoms and unemployability. VA later reduced the rating to 70% based on a 1988 examination that described the condition as mild to moderate, but the Court concluded that the Board’s finding of material improvement was clearly erroneous because the reduction was not supported when the entire record was considered and there was no evidence of improvement under the ordinary conditions of life. The Court emphasized that 38 C.F.R. § 3.343(a) requires more than a single examination showing some improvement; VA must evaluate whether the improvement occurred while the veteran was working or actively seeking work, and the record instead showed continued unemployability and ongoing treatment. The Court also held that the Board committed legal error by failing to consider former 38 C.F.R. § 4.16(c), because the veteran’s only compensable service-connected disability was a mental disorder rated at 70% and the evidence indicated that it prevented substantially gainful employment. The Court reversed and remanded with instructions to restore the 100% rating retroactive to the date of reduction.

The Federal Circuit held that Diagnostic Code 5055 covers partial knee replacements and reversed the Veterans Court’s contrary interpretation. The court rejected Auer deference to the VA’s late-arising interpretation and applied the pro-veteran rule of Brown v. Gardner to resolve textual ambiguity in the veteran’s favor.

The veteran underwent partial knee replacement surgery after an in-service knee injury and later sought compensation under 38 C.F.R. § 4.71a, Diagnostic Code 5055. The Board and Veterans Court concluded that DC 5055 applied only to total knee replacements, not partial replacements, and the Veterans Court also remanded separate knee-rating issues. On appeal, the Federal Circuit first held that it had jurisdiction because the DC 5055 issue was a discrete and separable claim from the remanded rating issues. On the merits, the court concluded that DC 5055 does not unambiguously exclude partial knee replacements, that the Secretary’s interpretation was not entitled to Auer deference given conflicting agency treatment and the timing of the clarification, and that any remaining interpretive doubt had to be resolved in the veteran’s favor under Brown v. Gardner. The court reversed the Veterans Court on the DC 5055 issue and remanded for further proceedings consistent with its opinion.

The Court held that Jones requires VA to discount beneficial medication effects when rating musculoskeletal disabilities under diagnostic codes that do not contemplate medication, including the back and ankle codes at issue here. Because the Board failed to do so, and also failed to address favorable treatment records, the Court set aside the rating denials and remanded.

Veteran Carlton Ingram appealed a Board decision denying a rating above 20% for a back disability and above 10% for a left ankle disability. The case centered on whether the Board was required, under Jones v. Shinseki, to discount the beneficial effects of medication when evaluating musculoskeletal disabilities under diagnostic codes that do not reference medication. The Secretary argued that Jackson, and the musculoskeletal regulations governing functional loss and flare-ups, displaced or made Jones unnecessary in this context.

The Court rejected that position. It reaffirmed that Jones and McCarroll remain good law and held that Jones applies when the relevant diagnostic code does not contemplate medication, including musculoskeletal ratings under DCs 5237 and 5271. The Court reasoned that flare-up and functional-loss regulations do not already account for medication effects, and that the Board must consider whether medication improved range of motion or reduced flare frequency and by how much. The Board also erred by failing to address favorable VA treatment records showing flexion of 30 degrees or less. The Court therefore set aside the denied rating portions and remanded for readjudication.

In Johnson v. Brown, the Court addressed the application of Diagnostic Code 5257 for knee instability and clarified that the diagnostic code is not based on limitation of motion. The decision explained that the functional-loss provisions of 38 C.F.R. §§ 4.40 and 4.45 do not apply in the same manner to Diagnostic Code 5257 because the code evaluates recurrent subluxation and lateral instability rather than restricted motion. Johnson became a foundational case governing interpretation of orthopedic diagnostic codes and the limits of functional-loss analysis in instability ratings.

The case emphasized that VA must apply the actual rating criteria as written and explain how the veteran's symptoms fit the chosen rating level. In Johnson v. Brown, the Court clarified how 38 C.F.R. §§ 4.40 and 4.45 apply to musculoskeletal rating claims and distinguished diagnostic codes based on limitation of motion from those based on instability or subluxation.

The veteran appealed ratings involving residuals of a pelvic stress fracture and recurrent subluxation of the left knee. For the pelvic condition, the Board denied a higher rating under Diagnostic Codes 5294 and 5295 without adequately addressing painful motion, functional loss, muscle spasm, limitation of motion, and the applicability of §§ 4.40, 4.45, and 4.67.

The Court held that the Board failed to properly analyze whether the veteran’s pain and functional impairment warranted a higher evaluation. The Court emphasized that functional loss due to pain must be adequately addressed and that painful motion can equate to additional limitation of function under DeLuca principles.

However, regarding the knee disability rated under Diagnostic Code 5257 for recurrent subluxation or lateral instability, the Court clarified that §§ 4.40 and 4.45 do not apply because DC 5257 is not predicated on limitation of range of motion.

The Court further found that the Board improperly denied a compensable rating for the knee despite uncontroverted medical evidence diagnosing “mild, recurrent” subluxation. Because the only permissible view of the evidence supported at least a 10% rating under DC 5257, the Court reversed the Board’s denial and ordered the award of a compensable evaluation.

Johnson became a foundational case involving functional loss analysis, painful motion, instability ratings, and the proper application of §§ 4.40 and 4.45 within musculoskeletal claims.

In Nohr v. McDonald, the Court addressed the Board’s obligation to adequately explain its reliance on medical evidence and supporting medical literature when adjudicating VA disability claims. The decision emphasized that the Board must critically evaluate the adequacy, rationale, and evidentiary foundation of medical opinions rather than relying on conclusory references to medical sources. Nohr became an important case governing reasons-and-bases requirements and evaluation of medical evidence in VA adjudication.

The case held that extraschedular analysis may consider the collective impact of multiple service-connected disabilities in appropriate cases. In Johnson v. McDonald, the Federal Circuit held that VA must consider the collective impact of a veteran’s multiple service-connected disabilities when determining whether referral for extraschedular consideration under 38 C.F.R. § 3.321(b)(1) is warranted.

The veteran sought extraschedular consideration based on the combined effects of multiple service-connected disabilities, including rheumatic heart disease and bilateral knee disabilities. The Board and the Veterans Court denied referral, concluding that extraschedular consideration under § 3.321(b)(1) applied only to individual disabilities evaluated separately.

The Federal Circuit rejected that interpretation. The Court held that the plain language of § 3.321(b)(1) unambiguously permits extraschedular referral based on the combined effects of multiple service-connected disabilities when the schedular evaluations fail to adequately capture the veteran’s overall disability picture.

The Court emphasized that the regulation repeatedly uses plural language such as:

• “schedular evaluations,”
• “disability or disabilities,”
• and “exceptional or unusual disability picture.”

The Federal Circuit explained that limiting extraschedular analysis to each disability individually ignores the compounding and interacting effects of multiple disabilities that together may create an exceptional disability picture inadequately represented by the rating schedule.

The Court further clarified that extraschedular consideration under § 3.321(b)(1) serves a different purpose than TDIU under 38 C.F.R. § 4.16. TDIU addresses total unemployability, while extraschedular referral addresses exceptional disability pictures that may fall short of total unemployability but still are not adequately contemplated by the schedular criteria.

Johnson became one of the foundational extraschedular referral cases governing combined-effects analysis in veterans law.

The Federal Circuit held that DC 7806 distinguishes systemic therapy from topical therapy, and topical corticosteroid use is not automatically systemic therapy. Whether a topical treatment qualifies depends on its actual effect on the body, not merely the medication’s corticosteroid content.

The veteran sought a higher rating for a skin condition under DC 7806 based on his use of topical corticosteroid creams. The Board had found that his condition affected less than 5 percent of the body and that his topical treatment did not constitute systemic therapy. The Veterans Court reversed, reasoning that the diagnostic code’s reference to corticosteroids unambiguously included topical corticosteroid use as systemic therapy.

The Federal Circuit reversed. It held that DC 7806 uses “systemic therapy” and “topical therapy” as distinct concepts, and that the code’s reference to corticosteroids does not erase that distinction. Reading the diagnostic code as a whole, and relying on ordinary medical definitions, the court concluded that systemic therapy means treatment affecting the body as a whole, while topical therapy is localized treatment to the area where applied. The court further explained that a topical corticosteroid may sometimes have systemic effects depending on the facts, but it is not systemic merely because it is a corticosteroid cream. Because the veteran did not challenge the Board’s factual findings that his treatment was localized and not systemic, the court reversed and remanded for reinstatement of the Board’s decision.

The Court held that when a law or regulation changes during the pendency of a claim, the version most favorable to the veteran applies unless there is clear contrary authority. Applying that rule, the Court reversed a rating reduction and restored a 100% schizophrenia rating because the Board also failed to apply the controlling stabilization and unemployability regulations.

The appellant sought restoration of a 100-percent service-connected rating for schizophrenia after VA reduced the evaluation to 70 percent based largely on a single reexamination. The Court held that the Board committed reversible error in finding material improvement where the record did not show any meaningful change between the examinations used to support the prior 100-percent award and the later reduction. The Court also held that 38 C.F.R. § 4.16(c), which became effective during the pendency of the appeal, applied to the claim because it was the version of law most favorable to the veteran and there was no contrary congressional or regulatory directive. Because the record showed that the veteran had not worked for years and his only compensable service-connected disability was a mental disorder rated at 70 percent, the Board should have considered whether § 4.16(c) compelled a 100-percent schedular evaluation. The Court further discussed 38 C.F.R. § 3.344(a), emphasizing that psychiatric ratings generally may not be reduced on the basis of one examination unless the evidence shows sustained improvement under the ordinary conditions of life. The Court reversed and remanded with instructions to restore the 100-percent rating retroactive to the effective date of reduction.

The Court held that extraschedular analysis under 38 C.F.R. § 3.321(b)(1) must focus on symptoms and functional impairment not adequately contemplated by the rating schedule, and that the availability of TDIU does not automatically eliminate the need to consider extraschedular referral. The decision clarified that VA must meaningfully analyze the veteran’s actual disability picture rather than rely on conclusory findings.

The veteran appealed the Board’s denial of extraschedular referral for multiple service-connected disabilities, including hearing loss and tinnitus. The Board concluded that referral was unnecessary because the veteran’s symptoms were contemplated by the schedular rating criteria and because TDIU was available to address occupational impairment.

The Court found errors in the Board’s analysis. It clarified that the existence of TDIU does not categorically bar extraschedular consideration because extraschedular ratings and TDIU address different concepts. TDIU concerns unemployability, while extraschedular consideration addresses whether the rating schedule adequately contemplates the veteran’s disability picture.

The Court emphasized that the Board must carefully analyze the actual symptoms and resulting functional impairment caused by service-connected disabilities. The Board may not simply state that the rating criteria contemplate the disability without explaining how the veteran’s particular manifestations are addressed by the schedule.

The decision also reinforced that extraschedular analysis must remain symptom-focused and evidence-based rather than relying on generalized assumptions about the adequacy of schedular ratings.