[Federal Register Volume 88, Number 72 (Friday, April 14, 2023)]
[Rules and Regulations]
[Pages 22914-22917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07426]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 4

RIN 2900-AR51


Exceptions to Applying the Bilateral Factor in VA Disability 
Calculations

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is issuing this 
interim final

[[Page 22915]]

rule to amend the regulation governing the bilateral factor for 
diseases and injuries of both arms, both legs, or paired skeletal 
muscles. More specifically, this interim final rule will allow VA 
adjudicators to exclude certain disabilities that would be calculated 
using the bilateral factor to determine the combined evaluation if, by 
their exclusion, a higher combined evaluation can be achieved.

DATES: 
    Effective date: This interim final rule is effective April 16, 
2023.
    Comment date: Comments must be received on or before June 13, 2023.

ADDRESSES: Comments must be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: https://www.regulations.gov. VA will not post on 
Regulations.gov public comments that make threats to individuals or 
institutions or suggest that the commenter will take actions to harm 
the individual. VA encourages individuals not to submit duplicative 
comments. We will post acceptable comments from multiple unique 
commenters even if the content is identical or nearly identical to 
other comments. Any public comment received after the comment period's 
closing date is considered late and will not be considered in the final 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Olumayowa Famakinwa, Chief, VA 
Schedule for Rating Disabilities (VASRD) Implementation Staff (218B), 
Compensation Service (21C), Department of Veterans Affairs, 810 Vermont 
Avenue NW, Washington, DC 20420, (202) 461-9700. (This is not a toll-
free telephone number.)

SUPPLEMENTARY INFORMATION:

I. The Need for Updating Bilateral Factor Policy

    VA conducted claims data analysis and determined that, in very 
limited circumstances, an unintended negative impact can result based 
on VA's ``bilateral factor'' calculation, which is applied when 
disabilities involving paired extremities are service connected. 
Specifically, adding an extremity to a veteran's total combined (100 
percent) evaluation in some cases can result in a less favorable 90 
percent evaluation. To remedy this unintended negative impact, VA is 
amending its regulation regarding the bilateral factor to ensure 
affected veterans receive the appropriate level of compensation that 
their disabilities warrant.

A. How Combined Evaluations Are Calculated

    By statute, VA assigns a combined evaluation for all service-
connected disabilities using a schedule of 10 grades--10 percent, 20 
percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent, 80 
percent, 90 percent and 100 percent (sometimes referred to as 
``total''). See 38 U.S.C. 1155. This combined evaluation serves as the 
basis for a veteran's monthly compensation. Id. Instructions for 
combining evaluations for multiple service-connected disabilities are 
found in 38 CFR 4.25. Specifically, Sec.  4.25 states that combinations 
must be done by order of severity (larger numbers first, smaller 
numbers last) and that, for example, ``a person having a 60 percent 
disability is considered 40 percent efficient. Proceeding from this 40 
percent efficiency, the effect of a further 30 percent disability is to 
leave only 70 percent of the efficiency remaining after consideration 
of the first disability, or 28 percent efficiency altogether. The 
individual is thus 72 percent disabled[.]''
    Paragraph (a) of 38 CFR 4.25 further states that ``[t]his combined 
value will then be converted to the nearest number divisible by 10, and 
combined values ending in 5 will be adjusted upward.'' Therefore, the 
individual who is 72 percent disabled in the example would receive a 70 
percent combined evaluation. This paragraph also provides instructions 
for combining more than two disabilities. Using the example of 
combining disabilities evaluated at 60 percent, 40 percent and 20 
percent, the result is 80.8 percent; however, because the combination 
result is a decimal, it is converted to a whole number, and decimals of 
.5 or higher are adjusted upward. The result is an 81 percent 
evaluation that is converted to the nearest degree divisible by 10, or 
80 percent.

B. How the Bilateral Factor Is Applied

    Section 4.26 of title 38, CFR, provides that when a partial 
disability results from disease or injury of both arms, or of both 
legs, or of paired skeletal muscles, the ratings for the disabilities 
of the right and left sides will be combined as usual, and 10 percent 
of this value will be added (i.e., not combined) before proceeding with 
further combinations, or converting to degree of disability. The 
bilateral factor will be applied to such bilateral disabilities before 
other combinations are carried out and the rating for such disabilities 
including the bilateral factor in Sec.  4.26 will be treated as 1 
disability for the purpose of arranging in order of severity and for 
all further combinations.

C. How the Bilateral Factor Lowers Evaluations in Isolated Cases

    The bilateral factor calculation does two things: (1) it combines 
bilateral disability evaluations together and (2) adds 10 percent of 
that total value to those combined bilateral disabilities, with a 
potential to increase the overall combined evaluation. However, the 
closer the combined evaluation approaches 100 percent, the smaller the 
effect of the additional disability on the combined rating, and, in 
limited cases, the bilateral factor yields a lower evaluation than if 
it were not applied to some or all of a particular veteran's bilateral 
disability evaluations.
    An example of this is when there are multiple disabilities that 
combine to 93 percent, plus two other 10-percent evaluations. Applying 
the bilateral factor, 10 and 10 first combine to 19, and 1.9 
(representing 10 percent of 19) is added (not combined) to the 19, 
resulting in 20.9. This is rounded to 21 (the nearest whole number) and 
combined with 93 percent. 93 percent and 21 percent combine to 94.47, 
which is rounded to 94 and then adjusted downward to a final combined 
rating of 90 percent. However, if the bilateral factor is not applied, 
93 and 10 combine to 93.7, which is rounded to 94, then 94 and 10 
combine to 94.6, which is rounded to 95. This is then adjusted upward 
to a final combined rating of 100 percent. Thus, in this example, not 
applying the bilateral factor results in a greater benefit to the 
veteran.
    This effect can also be observed when combining 92 percent and 31 
percent, where 31 percent is the result of two bilateral disabilities 
at 20 percent and 10 percent, compared to combining 92 percent with 20 
percent and 10 percent separately. Applying the bilateral factor, 92 
percent and 31 percent combine to 94.48, which is rounded to 94 and 
then adjusted downward to a final combined rating of 90 percent. If the 
bilateral factor is not applied, 92 percent and 20 percent combine to 
93.6, which is rounded to 94, and 94 percent and 10 percent combine to 
94.6, which is rounded to 95. This is then adjusted upward to a final 
combined rating of 100 percent.

[[Page 22916]]

II. The Solution

    VA considered several solutions to arrive at one that resolves this 
issue without creating new ones. First, it is important to note that 
the bilateral factor increases combined evaluations in many cases or at 
least results in the same evaluation that could be obtained without it 
in almost every case. It is only at the low 90-percent level where it 
may reduce a combined evaluation; therefore, VA determined that simply 
eliminating the bilateral factor regulation would not be beneficial to 
veterans. VA also rejected other potential solutions that would have 
revised combination results less than 90 percent, as those would have 
overcorrected for the problem.
    Instead, VA determined that the most appropriate solution is simply 
to allow disabilities that affect extremities but also cause the 
bilateral factor calculation to lower the combined evaluation to be 
excluded from the bilateral factor calculation. VA will make the 
necessary system changes so that when a combined evaluation equals 90 
percent and the bilateral factor has been applied, VA's claims 
processing system will perform calculations to determine if a 100 
percent rating can be achieved if a bilateral disability or multiple 
bilateral disabilities are excluded. If so, the system will assign a 
100 percent combined evaluation.
    To implement this change, VA is adding an exception to the 
requirement in 38 CFR 4.26 that all bilateral disabilities must be 
combined as usual and 10 percent of the combined value added before 
proceeding with further combinations or converting to degree of 
disability. The exception will allow VA to avoid applying the bilateral 
factor calculation for a given bilateral disability or disabilities if 
excluding that disability or disabilities will allow for a higher 
combined evaluation when combined separately.

III. Converting Cases Based on VA's Own Initiative

    This rulemaking, to amend Sec.  4.26 to enable a veteran to receive 
an increased evaluation, is considered a liberalizing VA issue within 
the meaning of 38 U.S.C. 5110(g) and 38 CFR 3.114 because it would 
result in higher ratings for impacted veterans than would currently 
result under Sec.  4.26. Section 3.114 also provides authority for VA 
to review claims on its own initiative after a liberalizing VA issue 
has become effective. In this well-defined, limited situation, VA can 
identify all veterans who would benefit from the application of this 
bilateral factor exception. Therefore, VA will adjust all the affected 
combined evaluations running on the effective date of this rulemaking 
without requiring a claim from affected veterans or their authorized 
representatives. VA will also provide notice of this adjustment to 
affected veterans and their representatives in accordance with 38 
U.S.C. 5104. Advance notice is not required because it would have no 
adverse impact on the affected veterans. Finally, the provisions of 38 
U.S.C. 5110(g) and 38 CFR 3.114 will apply if a veteran requests a 
review based on this liberalizing issue. Under those provisions, the 
effective date of an increased evaluation based on this liberalizing VA 
issue may be authorized from the effective date of this issue if the 
claim is received within one year of that date. If the claim is 
received more than one year from the effective date of this 
liberalizing VA issue, then the effective date of the increased 
evaluation may be authorized for a period of one year prior to the date 
the claim is received.

IV. Regulatory Amendments

    For the reasons discussed above, VA is amending 38 CFR 4.26 as 
follows:
    VA is amending the introductory paragraph by adding ``Except as 
provided in paragraph (d) of this section,'' to the first sentence and 
replacing ``10's'' with ``10 percent evaluations'' in the penultimate 
sentence.
    VA is adding new paragraph (d) to provide the exception to the 
application of the bilateral factor.

Administrative Procedure Act

    The Secretary of Veterans Affairs finds that there is good cause, 
under the provisions of 5 U.S.C. 553(b)(B), that advance notice and 
opportunity for public comment is contrary to the public interest, 
particularly to veterans with bilateral disability evaluations. This 
interim final rule enables VA to provide higher evaluations for a 
number of veterans that will entitle them to additional benefits from 
VA and other Federal and state government agencies.
    It would have been contrary to the public interest to provide 
opportunity for prior notice and comment for this rulemaking because a 
delay in implementation would have required VA rating officials to 
continue to apply the bilateral factor even where it results in a lower 
rating for impacted veterans. Moreover, this rule will not negatively 
impact any veterans but rather will only serve to provide higher 
ratings where feasible. Lastly, a delay in implementation would have 
denied veterans timely access to benefits based on the appropriate 
combined rating warranted by their disabilities.
    For the same reasons, VA finds that there is good cause under 5 
U.S.C. 553(d)(3) to make this rule effective upon the date of 
publication.
    For the above reasons, VA is issuing this rule as an interim final 
rule with immediate effect. However, VA will consider and address 
comments that are received within 60 days of the date this interim 
final rule is published in the Federal Register.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable 
to this rulemaking because notice of proposed rulemaking is not 
required. 5 U.S.C. 601(2), 603(a), 604(a).

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This interim final rule will have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    This interim final rule contains no provisions constituting a 
collection of information under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3521).

[[Page 22917]]

Congressional Review Act

    Pursuant to Congressional Review Act) (5 U.S.C. 801 et seq.), the 
Office of Information and Regulatory Affairs designated this rule as 
not a major rule, as defined by 5 U.S.C. 804(2).

List of Subjects in 38 CFR Part 4

    Disability benefits.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on June 6, 2022, and authorized the undersigned to sign and 
submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA amends 38 CFR part 4 as 
set forth below:

PART 4--SCHEDULE FOR RATING DISABILITIES

0
1. The authority citation for part 4 continues to read as follows:

    Authority:  38 U.S.C. 1155, unless otherwise noted.


0
2. Amend Sec.  4.26 by:
0
a. Revising the introductory text;
0
b. Adding headings to paragraphs (a) through (c); and
0
c. Adding paragraph (d).
    The revision and additions read as follows:


Sec.  4.26  Bilateral factor.

    Except as provided in paragraph (d) of this section, when a partial 
disability results from disease or injury of both arms, or of both 
legs, or of paired skeletal muscles, the ratings for the disabilities 
of the right and left sides will be combined as usual, and 10 percent 
of this value will be added (i.e., not combined) before proceeding with 
further combinations, or converting to degree of disability. The 
bilateral factor will be applied to such bilateral disabilities before 
other combinations are carried out and the rating for such disabilities 
including the bilateral factor in this section will be treated as one 
disability for the purpose of arranging in order of severity and for 
all further combinations. For example, with disabilities evaluated at 
60 percent, 20 percent, 10 percent and 10 percent (with the two 10 
percent evaluations being bilateral disabilities), the order of 
severity would be 60, 21 and 20. The 60 and 21 combine to 68 percent 
and the 68 and 20 combine to 74 percent, converted to 70 percent as the 
final degree of disability.
    (a) Definitions. * * *
    (b) Procedure for four affected extremities. * * *
    (c) Applicability. * * *
    (d) Exception. In cases where the combined evaluation is lower than 
what could be achieved by not including one or more bilateral 
disabilities in the bilateral factor calculation, those bilateral 
disabilities will be removed from the bilateral factor calculation and 
combined separately, to achieve the combined evaluation most favorable 
to the veteran.

[FR Doc. 2023-07426 Filed 4-13-23; 8:45 am]
BILLING CODE 8320-01-P