[Federal Register Volume 66, Number 168 (Wednesday, August 29, 2001)]
[Rules and Regulations]
[Pages 45620-45632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21802]



[[Page 45620]]

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK69


Duty To Assist

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs (VA) 
adjudication regulations to implement the provisions of the Veterans 
Claims Assistance Act of 2000 (the VCAA), which was effective on 
November 9, 2000. The intended effect of this regulation is to 
establish clear guidelines consistent with the intent of Congress 
regarding the timing and the scope of assistance VA will provide to a 
claimant who files a substantially complete application for VA benefits 
or who attempts to reopen a previously denied claim.

DATES: Effective Date: This rule is effective November 9, 2000, except 
for the amendment to 38 CFR 3.156(a), which is effective August 29, 
2001.
    Applicability Dates: Except for the amendment to 38 CFR 3.156(a), 
the second sentence of 38 CFR 3.159(c), and 38 CFR 3.159(c)(4)(iii), 
the provisions of this final rule apply to any claim for benefits 
received by VA on or after November 9, 2000, as well as to any claim 
filed before that date but not decided by VA as of that date. The 
amendment to 38 CFR 3.156(a), the second sentence of 38 CFR 3.159(c), 
and 38 CFR 3.159(c)(4)(iii) apply to any claim to reopen a finally 
decided claim received on or after August 29, 2001.

FOR FURTHER INFORMATION CONTACT: Janice Jacobs, Lead Consultant, 
Strategy Development Staff, Compensation and Pension Service, Veterans 
Benefits Administration, 810 Vermont Avenue, NW, Washington, DC 20420, 
telephone (202) 273-7223.

SUPPLEMENTARY INFORMATION: In the Veterans Claims Assistance Act of 
2000, Pub. L. 106-475 (the VCAA), Congress amended sections 5102 and 
5103 of Title 38, United States Code, and added new sections 5100 and 
5103A, establishing new duties for VA in the claims development and 
adjudication process. Congress also amended section 5107 by deleting 
the concept of a ``well-grounded claim'' previously contained in that 
section, while retaining the claimant's responsibility to present and 
support a claim for benefits. In section 5103A(f) Congress stated that 
nothing in section 5103A was to be construed to require VA to reopen a 
claim that has been disallowed except when new and material evidence is 
presented or secured as described in section 5108.
    In the Federal Register of April 4, 2001 (66 FR 17834), VA 
published a proposal to amend 38 CFR 3.159 to implement the VCAA. 
Interested persons were invited to submit comments on or before May 4, 
2001. We received comments from various organizations and individuals, 
including the American Legion and the National Veterans Legal Services 
Program (jointly submitted); Paralyzed Veterans of America; Vietnam 
Veterans of America; Disabled American Veterans; National Organization 
of Veterans Advocates, Inc.; State of Florida Department of Veterans' 
Affairs; the National Veterans Organization of America, Inc.; and other 
interested persons.

Definitions

    Competent Medical Evidence and Competent Lay Evidence. We proposed 
to define ``competent medical evidence'' in Sec. 3.159(a)(1) to mean 
evidence provided by a person who, through education, training, or 
experience, is qualified to offer medical diagnoses, statements or 
opinions. We proposed that the term would include statements conveying 
sound medical principles found in medical treatises, medical and 
scientific articles, and research reports or analyses. We proposed to 
define ``competent lay evidence'' in Sec. 3.159(a)(2) to mean evidence 
not requiring that the person offering it have specialized education, 
training, or experience. We proposed that lay evidence be competent if 
offered by someone who has knowledge of facts or circumstances and 
conveys matters that can be described by a lay person. Accordingly, 
while a lay person would not be competent or qualified to offer medical 
opinions or to diagnose a medical condition, a claimant or other lay 
person would be competent to describe symptoms of disability 
experienced or observed in him/herself or others. These definitions are 
consistent with those discussed in the legislative history of the VCAA, 
146 Cong. Rec. H9915 (daily ed. Oct. 17, 2000) (explanatory statement 
on H.R. 4864, as amended), and reflect existing case law governing the 
VA claims adjudication process.
    One commenter stated that we should delete these definitions as 
unnecessary. Other commenters objected to defining these terms by 
regulation, stating that to do so may lead VA adjudicators to reject 
evidence preliminarily at the development stage, or to become ``mired 
in technical assessments of the competency of the evidence.'' 
Consideration of the competency of the evidence is a necessary step 
inherent in the adjudication process and one with which VA adjudicators 
are already familiar. In our view, defining these terms fosters a 
consistent application of these concepts in the adjudication process, 
and ensures that a claimant is likewise aware of the types and nature 
of evidence that will help substantiate a claim. Therefore, we have 
retained these definitions in the regulatory language.
    Two of these same commenters stated, alternatively, that because an 
assessment of the competency of the evidence should always be a part of 
VA's decision-making process, the inclusion of the word ``competent'' 
in the regulatory definition was therefore redundant. As previously 
stated, we believe there is value in including this definition in the 
regulatory language so that the claimant understands how this term, 
used by Congress in the VCAA and discussed in the legislative history 
of the Act, is applied to the evidence received by VA in support of a 
claim.
    Another commenter suggested that we revise the definition to state 
that competent lay or medical evidence must also be ``credible.'' The 
VCAA refers to competent evidence in the context of determining when a 
VA medical examination or medical opinion is necessary. It does not 
require that the evidence also be credible. Moreover, credibility is 
what a VA decisionmaker determines in weighing the competent evidence 
of record. It is not a requirement to be met in order for evidence to 
be considered competent. Therefore, we have made no change to the 
proposed regulatory language based on this comment.
    With particular respect to the proposed definition of ``competent 
medical evidence,'' one commenter thought the inclusion of medical 
treatises and other similar authoritative medical writings resulted in 
an overly broad definition that would lead VA decisionmakers to misuse 
these materials by relying on them to deny a claim. However, VA 
intentionally broadened this definition to encompass these materials 
for the benefit of the claimant who may want to submit such materials, 
which are commonly found on the Internet or from other sources, in 
support of a claim. VA adjudicators have always had access to 
authoritative medical writings, such as Dorland's Medical Dictionary 
and the Merck Manual, as aids in deciding claims. In fact, 38 CFR 
4.130, the schedule of ratings for mental disorders, specifically 
incorporates the American Psychiatric Association's Diagnostic and 
Statistical

[[Page 45621]]

Manual of Mental Disorders, Fourth Edition, (DSM IV) and refers to its 
use as the basis for the schedule's nomenclature and diagnostic 
criteria. In our view, both VA and the claimant benefit from the 
claimant's awareness that ``competent medical evidence'' includes such 
materials and that he or she may rely upon them to support a claim. 
Therefore, no change to the regulatory language has been made based on 
this comment.
    Regarding the proposed definition of competent lay evidence 
specifically, one commenter suggested that the regulation should 
provide that VA would accept any lay statement as credible unless 
rebutted by affirmative evidence. This suggestion reflects the manner 
in which VA treated lay evidence on the issue of service incurrence in 
determining whether a claim was well grounded. In pre-VCAA procedures, 
lay evidence was generally accepted as credible for the purpose of 
meeting the evidentiary threshold well-grounded-claim requirement of 
showing that there was some evidence of an event, injury, or disease in 
service. Nonetheless, when a well-grounded claim was considered on its 
merits, VA claim procedures required that the decisionmaker consider 
all the evidence of record, assigning appropriate weight to both the 
lay and medical evidence. We note, as well, that if VA were to accept 
any claimant's statement as true on its face to establish the existence 
of an in-service event, injury or disease, without considering the 
veteran's service records and other evidence, this practice would 
conflict with the intent of 38 U.S.C. 1154(b). Under section 1154(b), 
in the case of a combat veteran, VA must accept satisfactory lay 
evidence of service incurrence or aggravation of an injury or disease 
alleged to have been incurred or aggravated in combat service, if such 
lay evidence is consistent with the circumstances, conditions, or 
hardships of this combat service even if there is no official record of 
such incurrence or aggravation. To permit every claimant, whether or 
not he or she served in combat, and whether or not the claimed injury 
is combat-related, to be able to establish in-service incurrence or 
aggravation based on the claimant's lay statement alone would nullify 
the meaning of section 1154(b). For all of these reasons, we have made 
no change to the regulatory language based on these comments.
    Another commenter wanted us to make clear that lay evidence 
includes statements from the claimant. Not every claimant is a lay 
person, however; claims for benefits are also filed by physicians and 
nurses and their statements might qualify as competent medical 
evidence. Therefore, we have not made the change to the proposed 
regulatory language suggested by this comment.
    One commenter stated that the regulation should indicate that lay 
evidence may be considered as partially competent so that a VA 
decisionmaker will not disregard a lay statement in its entirety if it 
should also happen to contain a medical opinion which would not be 
considered competent medical evidence. We decline to make any change in 
the proposed regulatory language based on this comment because VA 
decisionmakers are already obligated to consider all the evidence of 
record, both lay and medical, when deciding a claim. This would require 
VA adjudicators to consider those portions of the lay evidence 
submitted that are competent. Amending the regulation as suggested by 
this comment would result in an unnecessary redundancy.
    Substantially Complete Application. We proposed to define a 
``substantially complete application'' for benefits in Sec. 3.159(a)(3) 
as one that contains the claimant's name; his or her relationship to 
the veteran, if applicable; service information, if applicable; the 
benefit claimed and any medical conditions on which it is based; and 
the claimant's signature. If applicable, as in claims for nonservice-
connected disability or death pension, and parents' dependency and 
indemnity compensation, we proposed that a substantially complete 
application must also include a statement of income. This information 
is generally sufficient for VA to identify the benefit claimed, and 
determine whether the claimant is potentially eligible for it. This is 
basic information VA needs in order to inform a claimant of the types 
of information and evidence that would be required to substantiate a 
claim.
    One commenter suggested that we clarify the requirement of 
``service information'' to state, instead, ``sufficient service 
information for the VA to verify the duration and character of the 
claimed service, if applicable.'' This commenter stated that such a 
change would reflect VA's duty to assist the claimant in verifying 
service lest the language of the regulation be interpreted to mean that 
the claimant has the sole responsibility of establishing qualifying 
service. This is a reasonable suggestion and reflects current VA 
procedure. Therefore, the proposed regulatory definition of a 
``substantially complete application'' in Sec. 3.159(a)(3) has been 
changed to require ``sufficient information for VA to verify the 
claimed service, if applicable.''
    Another commenter objected to the proposed requirement that a 
substantially complete application identify the benefit sought, on the 
grounds that it should be VA's burden to determine all the benefits to 
which a claimant is entitled. Under section 5107(a), it is the 
claimant's responsibility to present and support a claim for benefits. 
Requiring a claimant to identify the benefit sought is a necessary 
prerequisite for VA to inform a claimant of the information and 
evidence necessary to substantiate the claim for that benefit. 
Therefore, no change to the proposed regulatory language has been made 
based on this comment.
    Another commenter indicated that the current application form, VA 
Form 21-526, Veteran's Application for Compensation or Pension, is too 
long, and that instead of defining ``substantially complete 
application,'' VA should revise VA Form 21-526. This form is designed 
to elicit more information than is required to file a substantially 
complete application for benefits. However, if it was completed in its 
entirety by the claimant, the information on the form would enable VA 
to immediately begin development of the claim because it requests the 
identity of all relevant evidence including medical treatment records. 
VA would not then be required to send a letter to the claimant seeking 
to identify relevant records as it must do if the claimant submits only 
the minimal information necessary to file a substantially complete 
application. This same commenter noted that the requirement in the 
regulation for the signature of the claimant is at odds with the new 
Veterans On-Line Application Process (VONAPP), a recent initiative of 
VA, in which the agency accepts applications from claimants via the 
Internet. Currently, VA still requires a signature from the claimant in 
conjunction with such applications, although it is working 
cooperatively with other agencies on establishing secure on-line 
signature procedures. Therefore, we have not deleted this definition 
per this commenter's suggestion.
    Event In Service. We proposed to define the term ``event'' in 
Sec. 3.159(a)(4) to mean a ``potentially harmful occurrence,'' such as 
would be associated with a particular duty assignment or place of duty 
because there are circumstances in service other than an injury or 
disease that, under 38 U.S.C. 1110, could meet the criteria of an 
``incurrence'' in service for

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establishing entitlement to service-connected compensation benefits. 
Nonetheless, some commenters asserted that the definition could be used 
to winnow out claims when, in the opinion of the VA decisionmaker, the 
in-service event is not perceived as ``potentially harmful.'' One 
commenter stated that any occurrence in service could be seen as 
``potentially harmful.''
    We agree that many events in service could be seen as potentially 
harmful, and that the assessment of whether an event in service was 
harmful is necessarily a retrospective one. The definition of ``event'' 
was intended to be expansive and liberal, not limiting. As reflected in 
the Supplementary Information accompanying the proposed rule, we 
believed the term could encompass such ``events'' as exposure to 
environmental hazards as well as such activities as parachute jumping 
or being a forward observer, although these events did not result in a 
specific injury or disease or aggravation of a pre-existing condition 
while in service. In our view, it is helpful for a claimant to 
understand that actual treatment in service for a medical condition is 
not an absolute requirement to establish service connection, and we see 
utility in defining this term for the claimant. To ensure its expansive 
interpretation, we have revised the proposed regulatory language to 
state: ``For purposes of paragraph (c)(4)(i), `event' means `one or 
more incidents associated with places, types, and circumstances of 
service giving rise to disability.' '' This definition is derived from 
the language of section 1154(a) which provides that in claims for 
service-connected compensation, consideration will be given to the 
``places, types, and circumstances of such veteran's service as shown 
by such veteran's service record, the official history of each 
organization in which such veteran served, such veteran's medical 
records, and all pertinent medical and lay evidence . . .'' This 
definition would permit a VA decisionmaker to consider any number of 
events, including exposures to environmental hazards as an event in 
service that could have led to the claimed disability for which the 
veteran seeks compensation.
    Information. Some questions have been raised about the meaning of 
the term ``information,'' which appears in the VCAA with respect to the 
information necessary to complete an application and the information 
and evidence necessary to substantiate a claim. Although the VCAA 
itself does not define the term, its legislative history gives guidance 
as to what Congress intended the term to mean. The history suggests 
that Congress was referring to non-evidentiary facts that are necessary 
to complete an application or to substantiate claim. See 146 Cong. Rec. 
H9914, H9914 (daily ed. Oct. 17, 2000) (identifying Social Security 
number and addresses as types of ``information'' necessary to 
substantiate a claim). We have defined the term accordingly in 
Sec. 3.159(a)(5).

VA's Duty To Notify Claimants of Necessary Information or Evidence 
To Substantiate a Claim

    We proposed in Sec. 3.159(b)(1) that, if VA receives an application 
for benefits that is substantially complete, VA would notify the 
claimant of the information and medical or lay evidence required to 
substantiate the claim. As explained in the Supplementary Information, 
it is clear from the legislative history of the VCAA that Congress 
intended the notice to inform the claimant of the type of medical 
evidence required, such as diagnoses or opinions as well as the type of 
lay evidence that could be used to substantiate the claim. We further 
proposed that the notice would also inform the claimant which 
information and evidence the claimant is to provide and which 
information and evidence VA will attempt to obtain on the claimant's 
behalf. This proposed regulatory language mirrored the provisions in 
section 5103A.
    We received a comment stating that the regulation should require 
VA, at the point in time when any evidence has been received in a claim 
for compensation benefits, to determine whether that evidence satisfies 
a necessary element of the claim and so advise the claimant. We decline 
to revise the regulation to accommodate this suggestion; such a 
regulatory requirement would necessitate multiple reviews of a single 
claim and is administratively unworkable. It would, moreover, increase 
the time it takes to decide a single claim, contributing to the backlog 
of claims that await processing. The intent of Congress, as indicated 
in the plain language of the VCAA and in the legislative history, is 
that VA advise a claimant as to the evidence and information necessary 
to substantiate a claim once VA receives a substantially complete 
application. There is no indication that Congress intended that VA 
review each claim and advise the claimant every time any evidence 
relevant to it is received. When a decision is reached on a claim, the 
rating decision document will cite all relevant evidence obtained and 
considered, as well as any relevant evidence not obtained or 
considered. That rating decision document is shared with the claimant 
as part of our notification procedures.
    Some commenters stated that the regulation should provide for 
multiple notices to claimants of the information and evidence required 
to be submitted by them. We have made no change based on this 
suggestion because multiple notices would also be administratively 
unworkable. Development of evidence is a shared responsibility, with 
the claimant having the responsibility to present and support a claim 
for benefits. 38 U.S.C. 5107(a). If VA provides a clear and 
understandable notice to the claimant of what information and evidence 
is necessary to substantiate the claim, and what portion of that 
information and evidence VA will try to obtain, and what portion the 
claimant is required to provide, we believe we have satisfied our 
statutory duty. The notice will also provide the claimant with a phone 
number to reach the VA employees actually handling the claim, and the 
claimant can easily contact VA if he or she has additional concerns or 
questions.
    Other commenters stated that this regulatory provision should state 
in more specific detail what will be required to be contained in every 
notice to the claimant on what is needed to establish entitlement for 
an individual claim. It is neither reasonable nor administratively 
feasible to require by regulation the level of specificity advocated by 
these commenters. The statutory notice required by the VCAA occurs at 
an early point in the claims process when the claimant often has not 
yet identified the evidence and information relevant to the claim, and 
VA does not yet know what kinds of specific evidence to try to obtain 
on behalf of the claimant. Without knowing what this evidence is, VA 
cannot advise the claimant as to whose responsibility it will be to 
obtain it. VA attempts to be as specific as it can in these notices. 
However, the content of VA's notice to the claimant depends on the 
amount of information and evidence VA already has regarding an 
individual claim, and cannot precisely be defined by regulation. 
Therefore, we have made no change to the proposed regulatory language 
based on these comments.
    Another commenter stated that the regulation should specifically 
state that the notice required under section 5103(a) will be sent to 
the claimant before a decision on the claim has been made. We agree and 
have changed the language of Sec. 3.159(b)(1) to state that VA will 
send the required statutory notice ``When VA receives a complete or

[[Page 45623]]

substantially complete application for benefits,'' rather than ``If VA 
receives'' this application.
    One commenter stated that the regulation should require VA to tell 
the claimant a date certain for the submission of requested information 
and evidence. It has always been VA's practice to advise the claimant 
that he or she has one year to submit requested information or 
evidence, although it was requesting that the claimant submit the 
information or evidence within a shorter period of time. This procedure 
enables VA to take action on the claim as quickly as possible. There 
are no plans to change this procedure; VA will continue to advise a 
claimant that he or she has one year to submit requested evidence, as 
indicated in Sec. 3.159(b)(1) of the regulation. Additionally, we have 
not revised the proposed regulatory language to reflect the period of 
time in which VA will request that the claimant submit the requested 
information or evidence, because VA would like to retain the 
flexibility to vary the time frame it currently specifies if in the 
future it is appropriate to do so.
    One commenter stated that the regulation should provide that if VA 
receives evidence that is inadequate to substantiate the claim, VA 
should contact the claimant and give him or her the opportunity to 
correct the inadequacy or bolster the evidence. In our view, the 
regulatory language ensures that, with the claimant's cooperation, VA 
will have all the evidence relevant to the claim before it at the time 
a decision is made on the claim. Whether all of this relevant evidence 
is sufficient to substantiate the claim is a determination that is not 
made until the claim is adjudicated. If all relevant evidence was 
obtained and considered but it is insufficient to establish 
entitlement, VA issues a rating decision that informs the claimant of 
the reason(s) why entitlement was not established. The claimant has the 
opportunity to appeal the decision if it is unfavorable, which gives 
the claimant the opportunity to present additional evidence to support 
the appeal. This procedure is consistent with long-standing 
adjudication practice which was not altered by the VCAA. Therefore, no 
change to the regulatory language has been made based on this comment.
    Mirroring the statutory language in section 5103(b), we proposed in 
Sec. 3.159(b)(1) that, if VA does not receive the information and 
evidence requested from the claimant within one year of the date of the 
notice to the claimant, VA cannot pay or provide any benefits based on 
that application. We proposed that VA would give a claimant a 
reasonable period of time to respond to the request for information or 
evidence, and if the claimant fails to respond, VA may decide the claim 
based on all the information and evidence of record. Some decisions 
would be grants of benefits while some decisions would be denials of 
benefits. We stated at Sec. 3.159(b) that if the claimant subsequently 
submitted the requested information or evidence within one year of the 
date of VA's request for it, VA would make another decision. We note 
that if such new information or evidence warrants a VA examination or 
further development, VA would take whatever action is necessary to 
reconsider the claim on this new information or evidence.
    A number of commenters objected to this proposed provision for 
various reasons. Some commenters felt that VA's failure to wait one 
full year for a claimant to respond to a request for information or 
evidence would discourage claimants from submitting the requested 
evidence. This is speculation that VA's long-standing claims process 
does not corroborate. In our experience, claimants are generally 
cooperative with VA's efforts to help them substantiate their claims, 
and respond to VA requests for information as quickly as possible, and 
usually within the suggested time frame for doing so.
    Other commenters interpreted section 5103(b) to provide that VA is 
prohibited from deciding a claim without waiting for one full year for 
information or evidence requested from the claimant. We believe such an 
interpretation is unreasonable and would clearly contravene the intent 
of the VCAA. Section 5103(b) is essentially an effective date provision 
governing the earliest date from which benefits may be paid if a 
claimant submits requested information and evidence. If interpreted as 
preventing VA from taking award action until the one year period 
expired, VA would be unable to grant a benefit when the claimant has 
not responded to a request for information or evidence, even though VA 
has obtained evidence establishing that the claimant is entitled to 
that benefit. Moreover, the procedure as proposed is identical to the 
manner in which VA had adjudicated claims for many years prior to the 
VCAA and Morton v. West, 12 Vet. App. 477 (1999), remanded sub nom. 
Morton v. Gober, 243 F.3d 557 (Fed. Cir. 2000), opinion withdrawn and 
appeal dismissed, 14 Vet. App. 174, the court decision that led to the 
passage of the VCAA. It is a procedure familiar to veterans' service 
organizations and other veterans' advocates. Moreover, it is a 
procedure that is responsive to the interests of Congress as well as 
veterans' advocates in improving the timeliness of VA claims 
processing. It is our experience that once evidence is not received in 
response to a request for it, extending the time period does not 
improve the chances of receiving it. Therefore, no change to the 
proposed regulatory language has been made based on these comments.
    However, we have made one change from the proposed rule. Rather 
than allowing VA to proceed to decide a claim if the claimant has not 
responded ``within a reasonable period of time'' to a request for 
information or evidence or a request for any pertinent evidence in the 
claimant's possession, the final rule will allow VA to proceed to 
decide the claim if the claimant has not responded ``within 30 days'' 
of such requests. Specifying the period in which a claimant may respond 
before VA may decide the claim allows every claimant to know in advance 
the minimum time he or she will have to respond to VA's request. This 
rule will not require VA to decide a claim 30 days after its request if 
the claimant has not responded. It will merely allow VA to proceed on 
the claim. Furthermore, a claimant need not necessarily provide the 
evidence and information necessary to substantiate the claim within 30 
days. A claimant would, however, be required to ``respond'' in some 
fashion to VA's request in order to have VA delay further action on the 
claim to give the claimant time to procure and submit the requested 
information and evidence. Such a response could merely request VA to 
wait beyond the 30-day period while the claimant attempts to gather 
evidence.
    One commenter stated that VA should decide a claim without waiting 
for one year only if the claimant has fully responded to the request 
for information or evidence, or if VA is granting the claim. We agree 
that if VA can grant the claim based on the evidence of record it has 
obtained without the information or evidence requested from the 
claimant, it should do so as quickly as possible, and this regulation 
is consistent with such action. To clarify that this evidence may 
include VA medical examinations or opinions, we have revised the 
regulatory language at Sec. 3.159(b)(1) to state that VA's decision on 
the claim would be based on all ``information and evidence contained in 
the file, including information and evidence it has obtained on behalf 
of the claimant and any VA medical examinations or medical opinions.''
    However, nothing in the VCAA expressly requires that VA keep a 
claim

[[Page 45624]]

pending when the claimant has failed to respond to requests for 
information or evidence within 30 days. The duty to assist is not 
``always a one-way street'; the claimant cannot passively wait for VA's 
assistance in circumstances where he or she may or should have 
information that is essential to obtaining supporting evidence. Zarycki 
v. Brown, 6 Vet. App. 91 (1993); Wamhoff v. Brown, 8 Vet. App. 517 
(1996). Nonetheless, in cases where the claimant has failed to respond, 
VA's case management system encourages personal phone contacts with the 
claimant during which the veterans service center representative can 
obtain by phone the information requested of the claimant. The case 
management process also ensures that VA does not take any action on a 
claim without first informing the claimant of what it needs to decide 
the claim, and this assurance is reflected in the regulatory language 
at Sec. 3.159(b)(1).
    Even in cases where a claimant fails to respond to VA's request for 
information and evidence, and the claim is denied based on the other 
evidence of record, the claimant still has another one year after the 
notification of the denial to appeal the denial of the claim. At that 
time, he or she has another opportunity to submit the requested 
evidence or new evidence. In addition, the claimant has a right to two 
de novo reviews of the claim, one by a Decision Review Officer and 
another by the Board of Veterans' Appeals. In our view, the claimant 
suffers no prejudice from this long-standing practice of deciding a 
claim based on the evidence of record when the claimant has failed to 
timely respond to requests for information or evidence. Therefore, we 
have maintained the proposed language codifying this procedure. 
However, we have revised the proposed language to clarify that the one-
year deadline applies to both the information and evidence necessary to 
substantiate the claim and that the claimant is to provide, as well as 
to the evidence in the claimant's possession that pertains to the 
claim.
    A comment from one service organization stated that this regulation 
failed to recognize that under Sec. 3.156(b) and Sec. 20.1304(b), 
evidence submitted in connection with an appeal will be considered in 
connection with the claim on appeal even if it was not received within 
one year of the date VA requested it. We recognize that there is a 
potential conflict between Secs. 3.156(b) and 20.1304(b) and section 
5103(b)(1) and proposed Sec. 3.159(b)(1). A possible technical 
amendment to section 5103(b)(1), which would eliminate the potential 
conflict, is being considered. If the amendment does not materialize, 
VA will have to address the implications section 5103(b)(1) has for 
Secs. 3.156(b) and 20.1304(b).
    One commenter stated that if VA decides a claim less than one year 
from the time it requests information or evidence from a claimant, the 
claimant may confuse the one-year time period in which to submit 
requested information or evidence with the one year time period allowed 
by statute for the claimant to file an appeal. See 38 U.S.C. 7105. The 
one-year time periods are mandated by statute, and VA cannot alter them 
by regulation. Therefore, no change to the regulatory language has been 
made based on this comment.
    Several commenters argued for a ``good cause'' exception for 
extending the statutory one year time period for a claimant to submit 
requested information or evidence, to accommodate claimants who are 
``seriously disabled,'' mentally incompetent or who have other 
hardships caused by poverty, lack of access to transportation, or 
remoteness of domicile. Two commenters cited the difficulty experienced 
by claimants who try to obtain service medical records to submit to VA 
as the basis for a good cause exception. We have made no change to the 
proposed regulatory language to accommodate such an exception. There is 
no statutory authority permitting VA to create such an exception. 
Section 5103(b)(1) states that if VA does not receive the information 
or evidence to be provided by a claimant ``within one year from the 
date of such notification, no benefit may be paid or furnished'' based 
on that application. The statutory scheme created by Congress places 
significant duties on VA to obtain the evidence relevant to a claim. 
However, the VCAA reiterated that it is the claimant's duty to present 
and support a claim for benefits, including the duty to submit 
information and evidence as designated by VA in its statutory notice to 
the claimant. Clearly, Congress envisioned one year to be an adequate 
amount of time for the claimant to cooperate with VA's efforts by 
submitting requested information or evidence. This information or 
evidence would include such things as a stressor statement in a claim 
for compensation for PTSD, or the name and address of treating 
physicians. We also note in response to the commenters who cited the 
difficulty of obtaining service medical records that in a compensation 
claim it is the responsibility of VA rather than the claimant to obtain 
those records if they are relevant to the claim and maintained or held 
by a governmental entity.

Duty To Inform a Claimant When An Application Is Incomplete

    We proposed in Sec. 3.159(b)(2) that, if VA receives an incomplete 
application in which the claimant has failed to provide the minimal 
information required to permit VA to begin development of the claim, we 
would defer assistance until the claimant substantially completed the 
application. This provision is plainly consistent with section 
5103A(a)(3). Nevertheless, several commenters objected to this proposed 
language, reflecting a misunderstanding that VA would deny claims 
contained in an incomplete application. As the regulatory language 
clearly reflects, VA will defer assistance on incomplete applications, 
not deny them. Therefore, no change to the regulatory language based on 
these comments has been made.

General Rule; VA's Duty To Assist a Claimant in Obtaining Evidence

    We proposed in Sec. 3.159(c)(1) that VA will make reasonable 
efforts to help a claimant obtain relevant records from non-Federal-
agency sources including records from private medical care providers, 
current or former employers, and other non-Federal government sources. 
We also proposed to retain the prior language of Sec. 3.159 providing 
that VA will not pay any fees charged by a custodian of the records.
    One commenter stated that VA should request congressional 
authorization to pay for costs associated with obtaining private 
medical records, a suggestion that is beyond the scope of this 
rulemaking. Other commenters stated that VA should budget funds to pay 
for private medical records, also an issue that is beyond the scope 
herein. Two commenters stated that VA should make an exception and pay 
for private records for claimants who are destitute or mentally 
incompetent. Because VA has no statutory authority to expend funds in 
this manner, we cannot create the exceptions suggested by these 
comments.
    Consistent with the language of section 5103A(b)(1), we proposed in 
paragraphs (1)(i) and (2)(i) of Sec. 3.159(c) that the claimant must 
adequately identify any Federal and non-Federal records, providing 
enough information to enable VA to request them. We proposed that the 
claimant should identify the custodian of the records, the approximate 
time frame covered by them, and in the case of medical treatment 
records, the condition for which treatment was provided. One

[[Page 45625]]

commenter stated that to require a claimant to identify the custodian 
of the records would be ``unduly burdensome.'' One commenter cited the 
difficulty this may present for claimants with memory problems. This 
commenter stated that the claimant should be required to give VA only 
enough information to allow VA to pursue retrieval of the records. We 
agree that VA needs only enough information to try to retrieve the 
record, but believe that the identity of the custodian of the record is 
critical and reasonable information to request of the claimant. It 
would be very impractical and inefficient for VA to try to obtain 
records without knowing who has them. Therefore, no change to the 
proposed regulatory language requiring the claimant to identify who has 
custody of the records has been made based on this comment.
    One commenter objected to the language of the regulation at 
Sec. 3.159(c)(1)(i), (c)(2)(i), and (c)(3) that provides that a 
claimant's failure to adequately identify existing records ``may result 
in a denial of the benefit sought.'' In this commenter's view, this 
language would encourage adjudicators ``to think in terms of denial of 
the claim'' particularly because of the regulatory authority in 
Sec. 3.159(b)(1) providing that VA may decide a claim on the evidence 
of record if a claimant fails to timely respond to a request for 
information or evidence. Although this proposed regulatory language 
reflects a procedure that has been in place for many years, long before 
the well-grounded claim process, we have deleted those sentences in 
Sec. 3.159(c)(1)(i) and (ii), (c)(2)(i) and (ii), (c)(3), and (e)(2) 
because they are unnecessary and state the obvious.
    We also proposed that VA will assist claimants by requesting 
relevant records in the custody of a Federal agency or department. One 
commenter stressed that VA should limit such requests to only relevant 
records. The proposed language already contained such a limitation, and 
we decline to make any changes to the regulatory language that would 
result in a redundancy. The same commenter suggested that VA should 
limit the number of requests it makes for Federal records. However, 
such a suggestion directly contravenes the express language of section 
5103A(b)(3), requiring VA to continue to attempt to obtain these 
records unless it is reasonably certain that they do not exist or until 
further efforts to obtain them would be futile. Therefore, we have made 
no change to the proposed rule to limit these efforts to a specific 
number of attempts. One commenter suggested that VA should define the 
word ``futile'' by regulation. However, the proposed regulatory 
language at Sec. 3.159(c)(2) gave examples of circumstances in which VA 
may conclude that further efforts would be futile and in our view there 
is no need to further define such circumstances.
    One commenter stated that the regulation should contain a ``good 
faith extension'' of the one-year time period to secure Federal 
records; however, there is no such one year time period in the VCAA and 
the inclusion of a good faith exception is unnecessary because VA is 
obligated to make repeated efforts to secure Federal records, which is 
tantamount to ``good faith efforts.''

VA's Duty To Notify a Claimant of Its Inability to Obtain Records

    When VA is unable to obtain relevant records after making 
reasonable efforts to do so, section 5103A(b)(2) requires VA to (1) 
notify the claimant that it is unable to obtain relevant records, (2) 
identify the records it cannot obtain, (3) briefly explain the efforts 
it made to obtain them, and (4) describe any further action VA will 
take with respect to the claim. In the case of requests for non-Federal 
agency or department records, we proposed in Sec. 3.159(e)(1) that VA 
would provide the claimant with written or oral notice of its inability 
to obtain them at the time it makes its final request for them. In the 
case of requests for non-Federal agency or department records, VA 
proposed that it would provide oral or written notice after VA is 
reasonably certain that the records do not exist or that further 
efforts to try to obtain them would be futile.
    We received several comments objecting to the proposal to provide 
oral notice to claimants when VA is unable to obtain records as 
proposed in Sec. 3.159(e). Some commenters stated that a message 
conveyed orally is more subject to misunderstanding by a claimant than 
a message conveyed by letter, and suggested that claimants prefer 
contact by letter. However, in VA's 2000 Survey of Veterans' 
Satisfaction with the VA Compensation and Pension Claims Process, 43.0 
percent of respondents who were contacted by phone about their claim 
indicated they were ``very satisfied `` with the claims process. Only 
28.3 percent of the respondents who were not contacted by phone stated 
that they were ``very satisfied'' with the process. In response to 
another survey question, 31.8 percent of the respondents stated that 
they preferred phone contact with VA during the claims process whereas 
only 15.9 percent stated they preferred mail contact. We believe these 
data support VA's decision to increase use of the phone to expedite the 
claims process; not only is it practical, but claimants prefer it. In 
our experience, phone contacts facilitate cooperation between VA and 
the claimant and afford claimants the opportunity to ask questions 
about their claims, including the status of VA's efforts to obtain 
relevant records. While not all claimants are available by phone during 
normal business hours, VA has found that when phone communications are 
successful, claim processing is expedited, benefiting both VA and the 
claimant. Ultimately, however, the decision on whether to communicate 
with a claimant by phone, letter, or other means such as e-mail or 
facsimile is based on the availability of the claimant and the 
resources of the VA regional office handling the claim. This regulatory 
language is intended to ensure the flexibility needed for efficient, 
modern claims processing.
    Moreover, nothing in the VCAA precludes oral notice. In fact, the 
legislative history of the VCAA shows that Congress sought to 
accommodate VA's plans to expand its options for communicating with 
claimants beyond the written letter format. The legislative history of 
the VCAA shows that Congress intentionally removed the words ``in 
person or in writing'' from former 38 U.S.C. 5102 with respect to the 
notice VA must give a claimant when the claimant has not submitted a 
substantially complete application. 146 Cong. Rec. H9913, H9914 (daily 
ed. Oct 17, 2000) (explanatory statement on H.R. 4864, as amended). The 
removal of this language was intended to ``permit veterans and VA to 
use current and future modes of communication.'' Thus, VA's proposal to 
use oral communication is consistent with congressional intent.
    Other commenters objected to the proposal to provide oral notice 
because they perceived there would be no written documentation of this 
notice. However, VA does make a record of such oral contacts. VA's case 
management system uses a Claims Automated Processing System (CAPS), a 
sophisticated electronic development and notice tracking system. Any 
written or oral contact with a claimant is documented by date and 
subject matter of the communication. Alternatively, when appropriate, 
VA standard procedure requires that oral conversations with a claimant 
be memorialized in writing, a procedure from which VA has no intention 
to deviate. See Veterans Benefits Administration's Adjudication

[[Page 45626]]

Procedures Manual M21-1, Part III, para.11.17. Therefore we have added 
a provision to Sec. 3.159(e) to require VA to make a record of any oral 
notice conveyed to the claimant.
    One commenter stated that the regulation should provide that if VA 
learns that a requested medical record no longer exists, after making 
reasonable efforts to obtain it, the claimant's lay evidence should be 
accepted as credible evidence in its place. Because a claimant, if a 
lay person, is not competent to provide medical evidence, we decline to 
make the change suggested by this comment.

Medical Examinations and Medical Opinions at VA Expense

    Under section 5103A(d)(1), VA must provide a medical examination or 
obtain a medical opinion in compensation claims ``when such an 
examination or opinion is necessary to make a decision on the claim.'' 
Section 5103A(d)(2) provides that an examination or opinion is 
``necessary'' if the evidence of record, considering all the 
information and lay or medical evidence, including statements of the 
claimant: (1) Contains competent evidence that the claimant has a 
current disability or persistent or recurrent symptoms of disability; 
and (2) indicates that the disability or symptoms may be associated 
with the claimant's military service; but (3) does not contain 
sufficient medical evidence to decide the claim.
    We proposed to implement section 5103A(d)(2) by providing in 
Sec. 3.159(c)(4)(i) that, in claims for disability compensation, VA 
would provide an examination or obtain a medical opinion if, after 
completing its duty to assist a claimant in obtaining records from 
Federal agency and non-Federal agency sources, the evidence of record 
does not contain sufficient competent medical evidence to decide the 
claim, but: (1) Contains competent lay or medical evidence of a current 
diagnosed disability or of persistent or recurrent symptoms of 
disability; (2) establishes that the veteran suffered an event, injury 
or disease in service; and (3) indicates that the claimed disability or 
symptoms may be associated with the established event, injury or 
disease in service or another service-connected disability.
    Several commenters objected to the similarity between the proposed 
regulatory criteria for determining when a VA examination or opinion is 
necessary and the former well-grounded-claim requirements. Although the 
VCAA eliminated the need to establish a well-grounded claim to be 
entitled to VA assistance, section 5103A(d)(2) specifies when an 
examination or medical opinion will be considered necessary. Our 
regulatory criteria are derived from the corresponding statutory 
criteria at section 5103A(d)(2). Any similarity between our regulatory 
criteria and the former well-grounded-claim requirements is due to the 
similarity between the statutory criteria and the former well-grounded-
claim requirements. Therefore, no change was made to the proposed 
regulatory language based on these comments.
    One commenter stated that this regulatory language should expressly 
state that lay testimony may be considered when determining if a 
medical examination or medical opinion is necessary to decide the 
claim. Because the term ``evidence'' in the proposed regulatory 
language at Sec. 3.159(c)(4) encompasses lay testimony, we decline to 
make the change suggested by this comment. Another commenter stated 
that the ``information'' of record should also be considered in 
determining whether a medical examination or medical opinion was 
necessary. Accordingly, we have added the term ``information'' to the 
proposed regulatory language in Sec. 3.159(c)(4)(i) to state, ``A 
medical examination or medical opinion is necessary if the information 
or evidence of record does not contain sufficient competent medical 
evidence to decide the claim.''
    Another commenter suggested a change in the proposed regulatory 
language at Sec. 3.159(c)(4) to state that VA must provide an 
examination or obtain a medical opinion where the ``evidence is 
inconclusive to establish service connection.'' However, the language 
of section 5103A(d)(2)(C) specifies that an examination or medical 
opinion is necessary when the record does not contain sufficient 
medical evidence. If the evidence lacking to establish service 
incurrence cannot be supplied by a VA examination or medical opinion, 
then providing an examination or obtaining an opinion would not benefit 
the claim. Therefore, no change to the proposed regulatory language was 
made based on this comment.
    Several commenters objected to the proposed language requiring that 
the evidence of record establish that there was an event, injury or 
disease in service--the incurrence or aggravation element for service 
connection. In summary, these commenters felt that this criterion was 
too burdensome, and that this determination should be postponed until 
after a VA examination has been provided or a medical opinion obtained. 
Whether there was an injury or disease in service, or an event leading 
to injury or disease, is a finding of fact made by the VA 
decisionmaker. In our view, it is unreasonable to require a claimant to 
report for an unnecessary VA examination or to ask a medical expert to 
review the record when the evidence that would result (the examination 
report or medical opinion) would not be competent evidence of the 
incurrence or aggravation of a disease or injury in service. In such 
cases, there is no reasonable possibility that the examination would 
aid in substantiating the claim because it cannot provide the missing 
evidence. In the case of medical opinion evidence, for instance, a 
doctor cannot link a current condition to an injury or disease in 
service unless that injury or disease is shown to have existed. The 
evidence on this issue is independent of the VA examination or medical 
opinion. Therefore, no change has been made to the regulatory language 
to delete the criterion that the evidence establish an injury or 
disease in service or an event leading to injury or disease.
    One commenter stated that even where there is no evidence of an 
event, injury or disease in service, a VA examination could establish 
the incurrence of an injury in some claims. The commenter offered as an 
example the case of a claim for compensation for a bone or muscle 
injury, for which a doctor could offer the opinion that a currently 
diagnosed arthritis is consistent with the veteran's statements 
describing a fall in service. However, this doctor's opinion would 
address the nexus, or relationship, between the current disability of 
arthritis and the claimed injury in service; it would not establish the 
underlying predicate issue, that is, whether the veteran, in fact, had 
a fall in service. This same commenter further stated that for 
disabilities that are presumed under law to have been incurred or 
aggravated in service based on their manifestation during a specified 
period after service, a physician's opinion could link the disability 
to reported symptoms occurring during the presumptive period, thus 
establishing the existence of the condition within the presumptive 
period. VA agrees that, under those circumstances, a medical opinion 
could link the claimed presumptive disability to symptoms shown by 
other evidence to have occurred during a presumptive period. However, a 
medical opinion given after the presumptive period could not itself 
establish the presence of symptoms in the presumptive period. Section 
3.307(c) ``Prohibition of certain presumptions'' prevents VA from

[[Page 45627]]

accepting a physician's opinion that a presumptive condition was 
present and manifest to a compensable degree during an applicable 
presumptive period based merely on the advanced stage of the current 
disability without other evidence of the condition during service or 
the presumptive period. Therefore, there would be no use in providing 
an examination or obtaining an opinion in the absence of any evidence 
of symptoms during the presumptive period.
    Another commenter stated that the Supplementary Information 
accompanying the proposed rule assumed that only contemporaneous 
records such as service medical records could establish an in-service 
incurrence of a disability, in disregard of the evidentiary value of 
lay testimony. We have revised the proposed regulatory language to 
clarify that lay evidence can also be considered in establishing that 
an event, injury or disease occurred in service. Under 
Sec. 3.159(c)(4), VA will review the ``information and lay and medical 
evidence of record'' to determine if an examination or medical opinion 
is necessary to decide the claim.
    One commenter stated that in claims for secondary service 
connection, (for a disability caused or aggravated by a service-
connected condition), where the primary condition is a presumptive one, 
there will be no evidence of an ``event, injury or disease'' in service 
that will meet the regulatory requirement. Since the proposed 
regulatory language specifically provided for examinations or medical 
opinions for secondary service connection conditions in 
Sec. 3.159(c)(4)(i)(C), we have made no change based on this comment.
    We received several comments on the requirement that the evidence 
of record ``indicate[ ]'' that the claimed disability or symptoms ``may 
be associated'' with service. Notably, neither Congress nor VA in its 
proposed rule, required either competent evidence or medical evidence 
of such an association as a prerequisite to a VA examination or medical 
opinion. VA proposed to require only an indication by the evidence of 
record. Nonetheless, some commenters misconstrued the proposed language 
to require more. Other commenters expressed the opinion that this 
regulatory language would require that the veteran ``establish'' that 
an in-service event caused his or her current disability. However, 
neither the proposed regulatory language nor the Supplementary 
Information stated that the claimant must provide such evidence. In our 
view, the VCAA's term, ``indicates,'' is a clear signal of Congress' 
intent that the evidentiary record need not definitively establish such 
an association or ``nexus'' between current disability and service; 
rather, the mere indication of such a possible association based on all 
the information and evidence of record would dictate the necessity of a 
VA medical examination or opinion to clarify this evidentiary point. 
Because the regulatory language proposed is consistent with this 
interpretation, we made no change to the regulation based on these 
comments.
    In Sec. 3.159(c)(4)(ii), we stated circumstances in which such an 
association with service may be shown, including continuity of symptoms 
after discharge from service, post-service treatment for a condition, 
or other possible association with service. Two commenters stated that 
the examples should not include ``evidence showing continuity of 
symptoms of a disability since the veteran's release from active duty'' 
because it is unnecessary in light of the continuity provisions of 
Sec. 3.303(b). We agree, and have deleted this language from the final 
rule.
    Another commenter stated that symptoms of a presumptive condition 
occurring during a presumptive period should satisfy the statutory 
criteria that the evidence show that the current condition ``may be 
associated'' with service. We agree that evidence of symptoms of a 
presumptive condition manifested to a compensable degree during a 
presumptive period would be evidence that a claimed presumptive 
condition may be associated with service. In such cases, a VA 
examination may be necessary to determine the degree of disability 
caused by the presumptive condition. When the record shows evidence of 
symptoms of a condition that may or may not be a presumptive one during 
an applicable presumptive period, a VA medical examination or medical 
opinion would be necessary because the medical evidence is insufficient 
to determine if the symptoms are consistent with the currently 
diagnosed condition.
    We have revised the regulatory language at Sec. 3.159(c)(4)(i)(B) 
to state that VA will consider a medical examination or opinion 
necessary when the evidence of record does not contain sufficient 
competent medical evidence to decide the claim, but contains competent 
lay or medical evidence of a current diagnosed disability or persistent 
or recurrent symptoms of disability, and establishes that the veteran 
suffered an event, injury or disease in service, or has a disease or 
symptoms of a disease manifested during an applicable presumptive 
period.
    Finally, one commenter stated that the regulation should expressly 
state that a medical examination is not necessary when sufficient 
medical evidence has been submitted to decide the claim. We have made 
no change to the regulation based on this comment. The regulation 
states circumstances in which VA will be required to provide a VA 
medical examination or obtain a medical opinion. VA may certainly 
schedule examinations in circumstances other than those set forth in 
this regulation; section 5103(g) states that VA may provide more 
assistance than required by statute. This regulation sets the floor, 
not the ceiling for VA assistance in providing medical examinations or 
obtaining medical opinions.

Circumstances Where VA Will Refrain From or Discontinue Providing 
Assistance

    Section 5103A(a)(2) states that VA has no duty to assist a claimant 
if or when there is no reasonable possibility that VA assistance would 
help substantiate the claim. We proposed to implement that statutory 
provision in Sec. 3.159(d) by stating that VA will refrain from or 
discontinue providing assistance when there is no reasonable 
possibility that its assistance would substantiate a claim. We proposed 
three examples of circumstances in which VA will refrain from providing 
assistance: (1) When a claimant applies for a benefit for which he or 
she is not legally eligible; (2) when a claimant asserts a claim that 
is inherently incredible or clearly lacks merit; and (3) when a 
claimant claims a benefit to which the claimant is not entitled as a 
matter of law. In some cases, VA's determination that there is no 
reasonable possibility of VA assistance substantiating the claim may be 
made on the face of a substantially complete application. In other 
cases, the futility of further assistance may not become apparent until 
some assistance has been given. Therefore, we proposed that VA will 
``discontinue'' assistance when the evidence obtained indicates that 
there is no reasonable possibility that further assistance would 
substantiate the claim.
    One commenter stated that there is no reason to define the 
statutory phrase, ``no reasonable possibility.'' We disagree. The term 
is subject to varying interpretations, and it benefits both the 
claimant and VA if VA defines the term and sets a standard.
    One commenter objected to the first circumstance described, stating 
that it should be VA's duty to help the

[[Page 45628]]

claimant establish legal eligibility for a benefit if eligibility is 
not clear on the face of the application. As noted previously, we have 
amended the definition of a ``substantially complete application'' to 
indicate that it contains enough information for VA to verify service 
and character of discharge, which VA would need to determine 
eligibility. However, no amount of VA assistance can provide 
eligibility for a benefit to a claimant who is in fact ineligible. 
Therefore, we retain our proposed rule that VA will refrain from 
assisting to obtain evidence if the information on a substantially 
complete application indicates no reasonable possibility that VA 
assistance will substantiate the claim because the claimant is not 
legally eligible for the benefit.
    We also received comments to the proposed second circumstance, that 
is, when a claim is inherently incredible or clearly lacks merit. Some 
commenters felt that VA would use this provision as a pretext to refuse 
assistance for potentially meritorious claims. VA will not do that. 
Some commenters stated that certain mentally disabled claimants might 
assert claims that would seem ``inherently incredible'' when in 
actuality these assertions may be manifestations of their mental 
illness. The VCAA requires VA to notify a claimant of the information 
and evidence necessary to substantiate a claim in all claims for which 
a substantially complete application has been submitted, regardless of 
whether VA is going to assist in obtaining evidence. If a VA 
decisionmaker determines that a claim is inherently incredible, the 
decisionmaker can request that the claimant submit information or 
evidence as provided by section 5103(a) and Sec. 3.159(b)(1) that would 
lead VA to conclude that it should provide assistance to substantiate 
the claim. Moreover, the proposed rule would not preclude a claimant 
from submitting information and evidence that might lead VA to change 
its determination that there is no reasonable possibility that VA 
assistance will help substantiate the claim.
    Other commenters felt that ``clearly lacks merit'' was too vague a 
term to be of useful guidance for either VA or a claimant. Others 
stated objections to the term ``inherently incredible.'' We have 
retained both terms in the final rule because they are not mutually 
exclusive and cover different circumstances. It may not be clear that a 
claim clearly lacks merit until VA has requested and received records 
relevant to the claim, whereas it may be appropriate to conclude that a 
claim is inherently incredible on its face based merely on the facts 
asserted in the claim or after certain development. On this same issue, 
one service organization commented that we should consider a standard 
by which VA would provide assistance, ``unless it can affirmatively 
determine that a medical expert could not find any association under 
current medical or scientific knowledge.'' As a substitute for 
``inherently incredible'' claims, we find merit in this suggestion, but 
believe that the standard, as phrased, may be construed to permit the 
VA adjudicator to apply his or her own unsubstantiated medical opinion. 
Because this is contrary to long-standing veterans' law principles, we 
have not revised the final regulatory language based on this comment.
    One commenter stated that the third circumstance, ``no entitlement 
under the law'' should be deleted, asserting that VA may develop such 
claims and come up with evidence supporting entitlement under a new 
legal theory. We decline to make the change in the proposed regulatory 
language as suggested because this circumstance encompasses claims for 
which there is no legal entitlement under any theory, such as claims 
for compensation for a congenital or developmental condition.

Reopened Claims and New and Material Evidence

    The VCAA states that nothing in section 5103A ``shall be construed 
to require the Secretary to reopen a claim that has been disallowed 
except when new and material evidence is presented or secured.'' On the 
other hand, section 5103(g) provides that nothing in section 5103A 
precludes VA from providing such other assistance as the Secretary 
considers appropriate. Accordingly, we proposed to provide limited 
assistance to claimants trying to reopen finally decided claims.
    VA proposed that it would request any existing records from Federal 
agencies or non-Federal agency sources, if reasonably identified by the 
claimant, in order to assist the claimant to reopen his or her claim. 
In our view, such assistance is appropriate because it could be 
accomplished with minimal effort and expense, although it would be a 
change from pre-VCAA procedures. These procedures arose from case law 
that required a claimant to first submit new and material evidence 
sufficient to reopen a claim before VA could assist in developing 
additional evidence to substantiate it.
    Given section 5103A(f)'s express preservation of the finality of VA 
decisions, we proposed, however, to provide less assistance in attempts 
to reopen final previously disallowed claims than for original claims 
for compensation. We proposed that VA would not provide an examination 
or obtain a medical opinion to create new evidence that may or may not 
be material, given the substantial time, effort and expense involved in 
the VA examination and medical opinion process. Some commenters 
objected to this proposal on the grounds that it would disadvantage 
persons whose previous claims were denied not on the merits but on the 
basis that they were not well grounded, because many of these claimants 
may not have had their claims fully developed. However, claimants whose 
prior claims were denied as not well grounded would not be 
disadvantaged, since a claim that was previously denied as not well 
grounded should be easy to reopen compared to a claim denied on the 
merits. If a claim was denied as not well grounded, it was denied 
because of a lack of evidence relating to a fact necessary to establish 
a claim. For example, a claim may have been denied as not well grounded 
because there was no competent evidence that a veteran has a current 
disability. If there were any competent evidence that the veteran did 
have a current disability, that evidence would constitute new and 
material evidence, which would reopen the claim.
    Some commenters stated that VA should also provide a VA examination 
or medical opinion to develop evidence to reopen a claim. This 
regulation presumes that a claim that was finally decided on the merits 
had been fully developed by VA, including a VA examination or medical 
opinion where necessary, because under the provisions of prior section 
5107(a), VA had a duty to assist a claimant who filed a well-grounded 
claim. In our view, it is more than fair that VA impose some limit on 
the expenditure of its finite resources in subsequent efforts to assist 
a claimant substantiate a claim after it has once made reasonable 
efforts to assist and the evidence failed to substantiate the claim. 
Nevertheless, we have revised the proposed language of 
Sec. 3.159(c)(4)(iii) to clarify that VA will consider providing an 
examination or obtaining a medical opinion only if new and material 
evidence is already presented or secured.
    We also proposed to change the definition of ``new and material 
evidence'' in conjunction with VA's proposal in Sec. 3.159 to define 
what actions it will take to assist a claimant in submitting evidence 
to reopen a finally denied claim. Several commenters objected to the 
proposed

[[Page 45629]]

change in definition on the grounds that the VCAA did not address this 
issue. However, in our view, it is helpful for the claimant to 
understand the nature of the evidence that will reopen a claim, in 
light of the fact that it will now be easier for a claimant to reopen a 
claim because, unlike before, the claimant now will have VA assistance 
in obtaining evidence that is potentially new and material. Therefore, 
we have not withdrawn the proposed revision to Sec. 3.156 based on 
these comments.
    We proposed to redefine ``material'' evidence to mean ``existing 
evidence that relates specifically to the reason why the claim was last 
denied.'' Many commenters felt this language was too restrictive. We 
agree, and therefore have revised the final regulatory language at 
Sec. 3.156(a) in a manner that more accurately conveys the meaning 
intended, to state that ``Material evidence means existing evidence 
that . . . relates to an unestablished fact necessary to substantiate 
the claim.''
    One commenter objected to the proposed definition because it did 
not provide that VA would review any evidence submitted as new and 
material ``in connection with evidence previously assembled.'' This 
commenter stated that this omission may negatively impact claims where 
all the evidence of record may lead to a different conclusion on the 
issue of whether new and material evidence had been submitted, than 
does one piece of evidence in isolation. We agree and have changed the 
regulatory language to state that ``Material evidence means existing 
evidence that, by itself or when considered with previous evidence of 
record, relates to an unestablished fact necessary to substantiate the 
claim.''
    We also proposed that new and material evidence ``must raise a 
reasonable possibility of substantiating the claim,'' a requirement to 
which several commenters objected. With respect to other claims for 
benefits, the VCAA provides that VA assistance is required unless there 
is no reasonable possibility that this assistance would aid in 
substantiating the claim. We believe it is fair and reasonable to apply 
the same standard--that there be a reasonable possibility that VA 
assistance would help substantiate the claim--in determining whether a 
claim has been reopened, triggering VA's full duty to assist by 
providing a VA examination or obtaining a medical opinion. Therefore, 
we have made no change to the proposed regulatory language based on 
these comments.
    One commenter stated that the regulation should be revised to state 
specifically that new and material evidence could also be evidence that 
supports a different legal theory for entitlement. However, VA 
adjudicators are required to ``grant[] every benefit that can be 
supported in law,'' under Sec. 3.103(a) which includes considering all 
possible legal theories of entitlement in deciding a claim. The same 
standard would apply in considering all legal theories applicable to 
reopening a claim. Therefore, we have made no change to the regulatory 
language based on this comment.

Additional Comments and Administrative Procedure Act

    One commenter stated that VA should consider extending the comment 
period for another 30 days. We decline to do so. We are unaware of any 
comments other than those submitted and reviewed in this document. 
These comments were extensive and detailed. We have attempted to 
analyze these comments as quickly as possible to expedite the 
development of this final rule. As noted in the Supplementary 
Information accompanying the proposed rule, the United States Court of 
Appeals for Veterans Claims has concluded that the Secretary's 
authority to implement the VCAA could be usurped by the court's 
issuance of decisions as to the applicability of the VCAA, and as a 
consequence, judicial review of Board of Veterans' Appeals decisions on 
claims affected by the VCAA is nearing a standstill. Clearly, it is 
necessary to issue the final rule rather than extend the comment period 
another 30 days. Further, for these reasons, we have found good cause 
for not applying the delayed effective date provisions of 5 U.S.C. 553.
    Another commenter suggested that we expressly incorporate the 
``benefit of the doubt'' rule in Sec. 3.159. However, since Sec. 3.102 
already addresses this issue, and is not in conflict with Sec. 3.159, 
we decline to change the regulation as suggested.

Scope and Applicability

    As indicated by the proposal that these regulations be contained in 
38 CFR part 3, this final rule applies only to claims for benefits that 
are governed by part 3. These benefits include compensation, pension, 
dependency and indemnity compensation, burial benefits, monetary 
benefits ancillary to those benefits, and special benefits.
    These amendments are effective November 9, 2000, except for the 
amendment to 38 CFR 3.156(b), which is effective August 29, 2001. 
Except for the amendment to 38 CFR 3.156(a), the second sentence of 38 
CFR 3.159(c), and 38 CFR 3.159(c)(4)(iii), the provisions of this rule 
merely implement the VCAA and do not provide any rights other than 
those provided by the VCAA. Therefore, we will apply those provisions 
to any claim for benefits received by VA on or after November 9, 2000, 
the VCAA's enactment date, as well as to any claim filed before that 
date but not decided by VA as of that date.
    The second sentence of Sec. 3.159(c) and Sec. 3.159(c)(4)(iii), 
which relate to the assistance VA will provide to a claimant trying to 
reopen a finally decided claim, provide rights in addition to those 
provided by the VCAA. Authority to provide such additional assistance 
is provided by 38 U.S.C. 5103A(g), which provides that nothing in 
section 5103A shall be construed to preclude VA from providing such 
other assistance to a claimant in substantiating a claim as VA 
considers appropriate. Because we have no authority to make these 
provisions retroactively effective, they are applicable on the date of 
this final rule's publication. Accordingly, we will apply the second 
sentence of Sec. 3.159(c), Sec. 3.159(c)(4)(iii), and the amendment to 
38 CFR 3.156(a), to any claim for benefits received by VA on or after 
August 29, 2001. We note that any future exercises by the Secretary of 
the discretionary authority granted by 38 U.S.C. 5103A(g) will be 
accomplished through rules published in accordance with Administrative 
Procedure Act rulemaking procedures.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires (in section 202) that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any given year. This amendment will have no 
consequential effect on State, local, or tribal governments.

Executive Order 12866

    This final rule has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Paperwork Reduction Act

    All collections of information under the Paperwork Reduction Act 
(44 U.S.C. 3501-3520) referenced in this final rule have existing OMB 
approval as forms. No changes are made in this final rule to those 
collections of information.

Regulatory Flexibility Act

    The Secretary hereby certifies that the adoption of these 
amendments will not have a significant economic impact on a substantial 
number of small entities as

[[Page 45630]]

they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. 
This action would not directly affect any small entities. Only 
individuals could be directly affected. Therefore, pursuant to 5 U.S.C. 
605(b), these amendments are exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

    The Catalog of Federal Domestic Assistance program numbers are 
64.100, 64.101, 64.104, 64.105, 64.106, 64.109, and 64.110.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Health care, Pensions, Veterans, Vietnam.

    Approved: July 30, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 3 is amended 
as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

    1. The authority citation for part 3, subpart A continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.


Sec. 3.102  [Amended]

    2. In Sec. 3.102, the fifth sentence is amended by removing 
``evidence; the claimant is required to submit evidence sufficient to 
justify a belief in a fair and impartial mind that the claim is well 
grounded.'' and adding, in its place, ``evidence.''.

    3. Section 3.156(a) and its authority citation are revised to read 
as follows:


Sec. 3.156  New and material evidence.

    (a) A claimant may reopen a finally adjudicated claim by submitting 
new and material evidence. New evidence means existing evidence not 
previously submitted to agency decisionmakers. Material evidence means 
existing evidence that, by itself or when considered with previous 
evidence of record, relates to an unestablished fact necessary to 
substantiate the claim. New and material evidence can be neither 
cumulative nor redundant of the evidence of record at the time of the 
last prior final denial of the claim sought to be reopened, and must 
raise a reasonable possibility of substantiating the claim.

(Authority: 38 U.S.C. 501, 5103A(f), 5108)
* * * * *

    4. Section 3.159 is revised to read as follows:


Sec. 3.159  Department of Veterans Affairs assistance in developing 
claims.

    (a) Definitions. For purposes of this section, the following 
definitions apply:
    (1) Competent medical evidence means evidence provided by a person 
who is qualified through education, training, or experience to offer 
medical diagnoses, statements, or opinions. Competent medical evidence 
may also mean statements conveying sound medical principles found in 
medical treatises. It would also include statements contained in 
authoritative writings such as medical and scientific articles and 
research reports or analyses.
    (2) Competent lay evidence means any evidence not requiring that 
the proponent have specialized education, training, or experience. Lay 
evidence is competent if it is provided by a person who has knowledge 
of facts or circumstances and conveys matters that can be observed and 
described by a lay person.
    (3) Substantially complete application means an application 
containing the claimant's name; his or her relationship to the veteran, 
if applicable; sufficient service information for VA to verify the 
claimed service, if applicable; the benefit claimed and any medical 
condition(s) on which it is based; the claimant's signature; and in 
claims for nonservice-connected disability or death pension and 
parents' dependency and indemnity compensation, a statement of income.
    (4) For purposes of paragraph (c)(4)(i) of this section, event 
means one or more incidents associated with places, types, and 
circumstances of service giving rise to disability.
    (5) Information means non-evidentiary facts, such as the claimant's 
Social Security number or address; the name and military unit of a 
person who served with the veteran; or the name and address of a 
medical care provider who may have evidence pertinent to the claim.
    (b) VA's duty to notify claimants of necessary information or 
evidence. (1) When VA receives a complete or substantially complete 
application for benefits, it will notify the claimant of any 
information and medical or lay evidence that is necessary to 
substantiate the claim. VA will inform the claimant which information 
and evidence, if any, that the claimant is to provide to VA and which 
information and evidence, if any, that VA will attempt to obtain on 
behalf of the claimant. VA will also request that the claimant provide 
any evidence in the claimant's possession that pertains to the claim. 
If VA does not receive the necessary information and evidence requested 
from the claimant within one year of the date of the notice, VA cannot 
pay or provide any benefits based on that application. If the claimant 
has not responded to the request within 30 days, VA may decide the 
claim prior to the expiration of the one-year period based on all the 
information and evidence contained in the file, including information 
and evidence it has obtained on behalf of the claimant and any VA 
medical examinations or medical opinions. If VA does so, however, and 
the claimant subsequently provides the information and evidence within 
one year of the date of the request, VA must readjudicate the claim.

(Authority: 38 U.S.C. 5103)

    (2) If VA receives an incomplete application for benefits, it will 
notify the claimant of the information necessary to complete the 
application and will defer assistance until the claimant submits this 
information.

(Authority: 38 U.S.C. 5102(b), 5103A(3))

    (c) VA's duty to assist claimants in obtaining evidence. Upon 
receipt of a substantially complete application for benefits, VA will 
make reasonable efforts to help a claimant obtain evidence necessary to 
substantiate the claim. In addition, VA will give the assistance 
described in paragraphs (c)(1), (c)(2), and (c)(3) to an individual 
attempting to reopen a finally decided claim. VA will not pay any fees 
charged by a custodian to provide records requested.
    (1) Obtaining records not in the custody of a Federal department or 
agency. VA will make reasonable efforts to obtain relevant records not 
in the custody of a Federal department or agency, to include records 
from State or local governments, private medical care providers, 
current or former employers, and other non-Federal governmental 
sources. Such reasonable efforts will generally consist of an initial 
request for the records and, if the records are not received, at least 
one follow-up request. A follow-up request is not required if a 
response to the initial request indicates that the records sought do 
not exist or that a follow-up request for the records would be futile. 
If VA receives information showing that subsequent requests to this or 
another custodian could result in obtaining the records sought, then 
reasonable efforts will include an initial request and, if the records 
are not received, at least one follow-up request to the new source or

[[Page 45631]]

an additional request to the original source.
    (i) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from non-Federal agency or department 
custodians. The claimant must provide enough information to identify 
and locate the existing records, including the person, company, agency, 
or other custodian holding the records; the approximate time frame 
covered by the records; and, in the case of medical treatment records, 
the condition for which treatment was provided.
    (ii) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the person, company, agency, 
or other custodian holding the records.

(Authority: 38 U.S.C. 5103A(b))

    (2) Obtaining records in the custody of a Federal department or 
agency. VA will make as many requests as are necessary to obtain 
relevant records from a Federal department or agency. These records 
include but are not limited to military records, including service 
medical records; medical and other records from VA medical facilities; 
records from non-VA facilities providing examination or treatment at VA 
expense; and records from other Federal agencies, such as the Social 
Security Administration. VA will end its efforts to obtain records from 
a Federal department or agency only if VA concludes that the records 
sought do not exist or that further efforts to obtain those records 
would be futile. Cases in which VA may conclude that no further efforts 
are required include those in which the Federal department or agency 
advises VA that the requested records do not exist or the custodian 
does not have them.
    (i) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from Federal agency or department 
custodians. If requested by VA, the claimant must provide enough 
information to identify and locate the existing records, including the 
custodian or agency holding the records; the approximate time frame 
covered by the records; and, in the case of medical treatment records, 
the condition for which treatment was provided. In the case of records 
requested to corroborate a claimed stressful event in service, the 
claimant must provide information sufficient for the records custodian 
to conduct a search of the corroborative records.
    (ii) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the custodian or agency 
holding the records.

(Authority: 38 U.S.C. 5103A(b))

    (3) Obtaining records in compensation claims. In a claim for 
disability compensation, VA will make efforts to obtain the claimant's 
service medical records, if relevant to the claim; other relevant 
records pertaining to the claimant's active military, naval or air 
service that are held or maintained by a governmental entity; VA 
medical records or records of examination or treatment at non-VA 
facilities authorized by VA; and any other relevant records held by any 
Federal department or agency. The claimant must provide enough 
information to identify and locate the existing records including the 
custodian or agency holding the records; the approximate time frame 
covered by the records; and, in the case of medical treatment records, 
the condition for which treatment was provided.

(Authority: 38 U.S.C. 5103A(c))

    (4) Providing medical examinations or obtaining medical opinions. 
(i) In a claim for disability compensation, VA will provide a medical 
examination or obtain a medical opinion based upon a review of the 
evidence of record if VA determines it is necessary to decide the 
claim. A medical examination or medical opinion is necessary if the 
information and evidence of record does not contain sufficient 
competent medical evidence to decide the claim, but:
    (A) Contains competent lay or medical evidence of a current 
diagnosed disability or persistent or recurrent symptoms of disability;
    (B) Establishes that the veteran suffered an event, injury or 
disease in service, or has a disease or symptoms of a disease listed in 
Sec. 3.309, Sec. 3.313, Sec. 3.316, and Sec. 3.317 manifesting during 
an applicable presumptive period provided the claimant has the required 
service or triggering event to qualify for that presumption; and
    (C) Indicates that the claimed disability or symptoms may be 
associated with the established event, injury, or disease in service or 
with another service-connected disability.
    (ii) Paragraph (4)(i)(C) could be satisfied by competent evidence 
showing post-service treatment for a condition, or other possible 
association with military service.
    (iii) Paragraph (c)(4) applies to a claim to reopen a finally 
adjudicated claim only if new and material evidence is presented or 
secured.

(Authority: 38 U.S.C. 5103A(d))

    (d) Circumstances where VA will refrain from or discontinue 
providing assistance. VA will refrain from providing assistance in 
obtaining evidence for a claim if the substantially complete 
application for benefits indicates that there is no reasonable 
possibility that any assistance VA would provide to the claimant would 
substantiate the claim. VA will discontinue providing assistance in 
obtaining evidence for a claim if the evidence obtained indicates that 
there is no reasonable possibility that further assistance would 
substantiate the claim. Circumstances in which VA will refrain from or 
discontinue providing assistance in obtaining evidence include, but are 
not limited to:
    (1) The claimant's ineligibility for the benefit sought because of 
lack of qualifying service, lack of veteran status, or other lack of 
legal eligibility;
    (2) Claims that are inherently incredible or clearly lack merit; 
and
    (3) An application requesting a benefit to which the claimant is 
not entitled as a matter of law.

(Authority: 38 U.S.C. 5103A(a)(2))

    (e) Duty to notify claimant of inability to obtain records. (1) If 
VA makes reasonable efforts to obtain relevant non-Federal records but 
is unable to obtain them, or after continued efforts to obtain Federal 
records concludes that it is reasonably certain they do not exist or 
further efforts to obtain them would be futile, VA will provide the 
claimant with oral or written notice of that fact. VA will make a 
record of any oral notice conveyed to the claimant. For non-Federal 
records requests, VA may provide the notice at the same time it makes 
its final attempt to obtain the relevant records. In either case, the 
notice must contain the following information:
    (i) The identity of the records VA was unable to obtain;
    (ii) An explanation of the efforts VA made to obtain the records;
    (iii) A description of any further action VA will take regarding 
the claim, including, but not limited to, notice that VA will decide 
the claim based on the evidence of record unless the claimant submits 
the records VA was unable to obtain; and
    (iv) A notice that the claimant is ultimately responsible for 
providing the evidence.
    (2) If VA becomes aware of the existence of relevant records before 
deciding the claim, VA will notify the claimant of the records and 
request that the claimant provide a release for the records. If the 
claimant does not provide any necessary release of the relevant records 
that VA is unable to obtain, VA

[[Page 45632]]

will request that the claimant obtain the records and provide them to 
VA.

(Authority: 38 U.S.C. 5103A(b)(2))

    (f) For the purpose of the notice requirements in paragraphs (b) 
and (e) of this section, notice to the claimant means notice to the 
claimant or his or her fiduciary, if any, as well as to his or her 
representative, if any.

(Authority: 38 U.S.C. 5102(b), 5103(a))

Sec. 3.326  [Amended]

    5. In Sec. 3.326(a), the first sentence is amended by removing 
``well-grounded''.
[FR Doc. 01-21802 Filed 8-28-01; 8:45 am]
BILLING CODE 8320-01-P