[Federal Register Volume 91, Number 31 (Tuesday, February 17, 2026)]
[Rules and Regulations]
[Pages 7118-7120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-03068]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 4
RIN 2900-AS49
Evaluative Rating: Impact of Medication
AGENCY: Department of Veterans Affairs.
ACTION: Interim final rule.
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SUMMARY: The Department of Veterans Affairs (VA) amends 38 CFR 4.10
within the VA Schedule for Rating Disabilities (VASRD). This amendment
clarifies VA's longstanding interpretation of Sec. 4.10 and, in doing
so, amends the text to correct judicial interpretations that VA has
concluded misconstrue the role of medication and treatment in
evaluating functional impairment. Specifically, this amendment
clarifies that veterans should be compensated for the actual level of
functional impairment they experience and, therefore, that the
ameliorative effects of medication should not be estimated or
discounted when evaluating the severity of a veteran's disability at
the time of the disability examination. This regulation is needed
immediately to minimize the negative impact of an erroneous line of
cases culminating in the recent decision of Ingram v. Collins, 38 Vet.
App. 130 (2025), which could be applied broadly to over 500 separate
diagnostic codes, requiring re-adjudications of over 350,000 currently
pending claims. This in turn would overburden VA's claims adjudicatory
capacity. In addition, Ingram requires VA to retrain all of its medical
examiners and adjudicators to make assessments and decisions based not
on the evidence before them but instead based on what they hypothesize
the evidence would show if a veteran's disability were left untreated.
For these and other reasons explained below, this regulation is
critical to the integrity of the VA disability claims system.
DATES: This interim final rule is effective February 17, 2026.
Comments must be received on or before April 20, 2026.
ADDRESSES: You may submit comments through www.regulations.gov under
RIN 2900-AS49. That website includes a plain-language summary of this
rulemaking. Instructions for accessing agency documents, submitting
comments, and viewing the rulemaking docket are available on
www.regulations.gov under ``FAQ.''
FOR FURTHER INFORMATION CONTACT: Ethan Kalett, Executive Director,
Office of Regulatory Oversight and Management, (202) 461-9700.
SUPPLEMENTARY INFORMATION: This amendment clarifies VA's longstanding
interpretation of Sec. 4.10 and, in doing so, amends the text to
correct judicial interpretations that VA has concluded misconstrue the
role of medication and treatment in evaluating functional impairment.
This interim final rule thus reaffirms the proper understanding of VA
policy related to the evaluation and compensation of a veteran's
disability. Congress directed that veterans be compensated for
``disability'' that results when service causes or aggravates an injury
or disease. 38 U.S.C. 1110. To capture the effects of disability, the
rating schedule is ``based, as far as practicable, upon the average
impairments of earning capacity resulting from such injuries in civil
occupations.'' 38 U.S.C. 1155. This means that VA must determine how
the disability impacts the veteran's ability to earn wages.
In effectuating these statutes, VA regulations have long focused on
the actual level of disability experienced by a veteran. The VASRD,
which is located in 38 CFR part 4, contains criteria for specific
disabilities and general rules governing the assignment of ratings.
Under 38 CFR 4.1, disability ratings are intended to ``represent as far
as can practicably be determined the average impairment in earning
capacity resulting from'' a service-connected disability based on
``accurate and fully descriptive medical examinations'' that emphasize
``limitation of activity imposed by the disabling condition.'' Section
4.1 requires that the rating assigned be based on the disability
presented to the examiner and recognizes that future reevaluations may
be required based on changes to the veteran's condition. The need for
the examiner to make findings based on the actual condition of the
veteran is re-emphasized in Sec. 4.10, which ``imposes upon the
medical examiner the responsibility of furnishing, in addition to the
etiological, anatomical, pathological, laboratory and prognostic data
required for ordinary medical classification, full description of the
effects of disability upon the person's ordinary activity.'' Section
4.10 further directs attention to the body's ability ``to function
under the ordinary conditions of daily life.'' Similarly, Sec. 4.2
instructs claim processors to present ``a consistent picture so that
the current rating may accurately reflect the elements of disability
present . . . . considered from the point of view of the veteran
working or seeking work.'' Consistent with these authorities, the U.S.
Court of Appeals for the Federal Circuit has observed that the VASRD is
designed to compensate for ``the actual level of the earning impairment
on the veteran.'' Nat'l Org. of Veterans' Advocs., Inc. v. Sec'y of
Veterans Affs., 927 F.3d 1263, 1264 (Fed. Cir. 2019) (emphasis added).
None of these authorities are phrased in the hypothetical, or
contemplate that rating a disability should require supposition.
Rather, they consistently direct VA personnel to evaluate the
disability as it actually exists, in the conditions of the veteran's
daily life. This simple, straightforward conclusion is required on the
face of longstanding regulatory authorities and consonant with the
phrasing of 38 U.S.C. 1155 itself. The Ingram court erred by converting
large portions of the VA disability rating system into an exercise in
prognostication. This error must be corrected as quickly as possible to
ensure the continued proper functioning of the disability rating
system. Despite these legal and practical imperatives to base
evaluations on the evidence of actual functional impairment, on March
12, 2025, the U.S. Court of Appeals for Veterans Claims (CAVC)
determined in Ingram that, for the purposes of evaluating
musculoskeletal conditions, examiners should not consider the evidence
of disability before them. Ingram, 38 Vet. App. at 138. Rather, the
court held that VA must estimate what level of functional impairment a
disability might present if the veteran were not taking medication that
ameliorated the effects of a service-connected disability. Id. at 135-
38. Ingram further held that, if the record does not disclose a
disability's ``baseline severity''--in which the effects of medication
in lessening functional impairment are discounted--adjudicators must
return the claim for VA to obtain that contrafactual information. Id.
at 137-39.
[[Page 7119]]
The Ingram decision is the latest and most disruptive in a line of
CAVC cases that have ignored the purpose of disability ratings and VA's
longstanding historical practices and policies in assigning such
ratings. In Jones v. Shinseki, 26 Vet. App. 56 (2012), the CAVC held
that, when the rating criteria of a specific diagnostic code does not
contemplate the effects of medication on a veteran's disability, the
Board of Veterans' Appeals (Board) errs by denying a higher rating on
the basis of the ameliorative effects of medication. Id. at 63. The
CAVC reasoned that, by not excluding the effects of medication, the
Board was effectively treating responsiveness to medication as a rating
criterion that could have been, but was not, specified in the relevant
diagnostic code. Id. at 61-62. The CAVC deemed this a deliberate policy
decision by VA, since some diagnostic codes explicitly contemplate the
effects of medication as a relevant rating criterion, though most
diagnostic codes do not. Id. at 62. The CAVC rejected VA's argument
that rating principles grounded in regulatory text clearly contemplate
compensating veterans for their actual level of disability, whether or
not that level is lessened by medication. Id. at 62-63.
The CAVC took another step in McCarroll v. McDonald, 28 Vet. App.
267 (2016) (en banc). There, the CAVC concluded that the Jones rule did
not apply in the case because the specific diagnostic code at issue
contemplated the effects of medication when assigning a rating. Id. at
273. However, in the course of concluding that the Jones rule was
inapplicable, the CAVC in McCarroll for the first time stated that the
rule required the Board ``to discount the ameliorative effects of
medication'' when assigning a rating. Id. at 271. Jones itself did not
use the word ``discount'' in the rating context.
In Ingram, the Board denied ratings for a veteran's service-
connected musculoskeletal disabilities under diagnostic codes based on
limitation of motion. 38 Vet. App. at 132-35. On appeal, the CAVC
rejected VA's arguments to distinguish or limit Jones and concluded
that the Board erred when it did not ``discuss and discount[ ] the
beneficial effects of medication used to treat the veteran's
disabilities.'' Id. at 139.
But as noted above, 38 CFR 4.10 codifies VA's policy for evaluating
functional impairment and states, in part, that the basis of an
evaluation is the veteran's ability to function under the ordinary
conditions of daily life, and the medical examiner should provide a
description of the effects of the disability upon the veteran's
ordinary activity. VA's governing regulations thus already focus on
functional impairment and a veteran's actual level of disability as it
presently manifests in everyday life--which necessarily requires the
examiner to consider the disability severity level without estimating
or discounting the effect of current medication on the disability. If
medication or other treatment lessens the functional impairment a
disability causes and thereby improves a veteran's earning capacity,
that is the proper disability level for which the veteran should be
compensated. Moreover, contrary to the imperative to assign ratings
based on available evidence, the CAVC's caselaw ``invites medical
speculation in trying to guess what a veteran's symptoms might be
without the medication.'' McCarroll, 28 Vet. App. at 279 (Kasold, J.,
concurring in part). Thus, the Jones rule, as interpreted and extended
by Ingram, contravenes central principles of the VASRD's rating scheme.
In addition to contravening governing rating principles, this line
of CAVC cases is based on a mistaken premise of regulatory
interpretation. In Jones, the CAVC concluded that, because (on its
reading) some diagnostic codes explicitly contemplate the ameliorative
effects of medication as a relevant rating criterion while most
diagnostic codes do not, assigning a rating based on ameliorative
effects under a diagnostic code that does not contemplate that
criterion would be inserting language into the diagnostic code that VA
deliberately chose to omit. Id. at 62. But the CAVC misunderstood the
role that medication plays as a rating criterion in the VASRD.
``[A]lthough some diagnostic codes mention the fact of medication usage
as a rating criterion, none require the affirmative use of information
about the `ameliorative effects' of the medication in evaluations.''
McCarroll, 28 Vet. App. at 278 (Kasold, J., concurring in part)
(emphasis added). ``Otherwise stated, nothing in the rating schedule
warrants subtracting whatever positive influences medication has on'' a
veteran's disability. Id. at 277.
As a general rule, an agency ``remains free to amend or clarify
those regulations'' it believes have been misconstrued by a court.
Nat'l Org. of Veterans' Advocs., Inc. v. Sec'y of Veterans Affs., 260
F.3d 1365, 1374 n.9 (Fed. Cir. 2001). Consistent with this precept, the
CAVC has emphasized that, because the Jones rule is based on the CAVC's
interpretation of the VASRD, VA can abrogate that interpretation
through corrective rulemaking. Jones, 26 Vet. App. at 63; Ingram v.
Collins, No. 23-1798, 2025 WL 1442991, at *2 (Vet. App. May 20, 2025)
(Falvey, J., concurring in the denial of en banc review). Immediate
correction is now crucial because, following Ingram, it is clear that
``Jones's rule that the Board can't insert new criteria into the
diagnostic code when it decides a case has been twisted to now require
that the Board affirmatively discount medication for diagnostic codes
that don't say anything about medication.'' Ingram, 2025 WL 1442991, at
*1.
Therefore, VA will add the following two sentences to 38 CFR 4.10:
``To ensure that disability evaluations are based on the actual level
of functional impairment under the ordinary conditions of daily life,
the medical examiner will not estimate or discount improvements to the
disability due to the effects of medication or treatment, whether or
not medication or treatment is included within specific rating
criteria. If medication or treatment lowers the level of disability,
the rating will be based on that lowered disability level.''
While VA believes this is already the correct construction of
current regulations, this change will make more explicit in regulation
VA's longstanding policy and practice to include, among other factors,
the ameliorative effects of medication when conducting disability
evaluations. Without this change, VA could be required to specifically
ascertain and then discount the ameliorative effects of medication on
certain disabilities and then assign a disability rating based on the
level of disability a veteran would suffer if not for that medication.
This is an unquantifiable, hypothetical, and unwarranted standard that
would compensate veterans for a level of disability they are not
actually experiencing. By explicitly stating in regulation that
disability evaluations consider the ameliorative effects of medication,
VA will ensure that its historic principles for rating disabilities
remain intact, thereby leading to consistent results for veterans in
accordance with statutory and regulatory schemes and preventing
systemic disruptions.
Administrative Procedure Act
The Secretary of Veterans Affairs finds that there is good cause
under 5 U.S.C. 553(b)(B) to publish this interim final rule because
providing advance notice and prior opportunity for public comment is
impracticable and contrary to the public interest. This rulemaking
simply makes explicit longstanding VA policy and practice in rating and
adjudicating disability benefits. It is
[[Page 7120]]
impracticable because Ingram creates the immediate risk of significant
disruption systemwide and delays in the adjudication and award of
benefits. Specifically, if VA does not issue this interim final rule,
the erroneous interpretation announced by Ingram will (1) generate
considerable administrative costs, (2) create systemic delays in the
adjudication system, (3) burden VA adjudicators and examiners, and (4)
cause an overall increase in compensation expenditures based on a
disability level that veterans are not actually experiencing. Issuing
this interim final rule without delay is in the public interest because
it will prevent a significant negative impact on veterans awaiting
claim decisions from VA.
For these same reasons, the Secretary finds that there is also good
cause under 5 U.S.C. 553(d)(3) to make this rule effective upon the
date of publication.
Thus, 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.
Congressional Review Act
The Office of Information and Regulatory Affairs has determined
that this regulatory action is a major rule under the Congressional
Review Act (5 U.S.C. 804(2)) because it is likely to result in an
annual effect on the economy of $100 million or more. Although this
regulatory action is a major rule under 5 U.S.C. 804(2), the Secretary
of Veterans Affairs finds that good cause exists under the provisions
of 5 U.S.C. 808(2) to forgo the 60-day delayed effective date under 5
U.S.C. 801 and make this rule effective immediately and prior to end of
the full Congressional review period. If this rule is not made
effective upon publication, there is potential for significant
disruption and delay to the award of benefits, as detailed above.
Because of these burdens, further notice and public procedure would be
impracticable and contrary to the public interest. 5 U.S.C. 808(2).
Accordingly, the Secretary finds that there is good cause to publish
this final rule with an operative and effective date of February 17,
2026. In accordance with 5 U.S.C. 801(a)(1), VA will submit to the
Comptroller General and to Congress a copy of the regulation and impact
analysis.
Executive Orders 12866, 13563, and 14192
VA examined the impact of this rulemaking as required by Executive
Order 12866 (Sept. 30, 1993) and Executive Order 13563 (Jan. 18, 2011),
which direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits. The Office of
Information and Regulatory Affairs has determined that this rulemaking
is an economically significant regulatory action under section 3(f)(1)
of Executive Order 12866. VA also examined the impact of this
rulemaking as required by Executive Order 14192 (Jan. 30, 2025), which
directs agencies to ensure that the cost of planned regulations is
responsibly managed and controlled through a rigorous regulatory
budgeting process. The Office of Information and Regulatory Affairs has
determined that this interim final rule is a deregulatory action under
Executive Order 14192. 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
This interim final rule will not 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.
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. 3501-3520).
List of Subjects in 38 CFR Part 4
Disability benefits, Pensions, Veterans.
Signing Authority
Douglas A. Collins, Secretary of Veterans Affairs, approved this
document on February 11, 2026 and authorized the undersigned to sign
and submit to the Office of the Federal Register for publication
electronically as an official document of the Department of Veterans
Affairs.
Nicole R. Cherry,
Alternate Federal Register Liaison Officer, Department of Veterans
Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs amends 38 CFR part 4 as set forth below:
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1. The authority citation for part 4 continues to read as follows:
Authority: 38 U.S.C. 1155, unless otherwise noted.
PART 4--SCHEDULE FOR RATING DISABILITIES
Subpart A--General Policy in Rating
0
2. Revise Sec. 4.10 to read as follows:
Sec. 4.10 Functional impairment.
The basis of disability evaluations is the ability of the body as a
whole, or of the psyche, or of a system or organ of the body to
function under the ordinary conditions of daily life including
employment. To ensure that disability evaluations are based on the
actual level of functional impairment under the ordinary conditions of
daily life, the medical examiner will not estimate or discount
improvements to the disability due to the effects of medication or
treatment, whether or not medication or treatment is included within
specific rating criteria. If medication or other treatment lowers the
level of disability, the rating will be based on that lowered
disability level. Whether the upper or lower extremities, the back or
abdominal wall, the eyes or ears, or the cardiovascular, digestive, or
other system, or psyche are affected, evaluations are based upon lack
of usefulness, of these parts or systems, especially in self-support.
This imposes upon the medical examiner the responsibility of
furnishing, in addition to the etiological, anatomical, pathological,
laboratory and prognostic data required for ordinary medical
classification, full description of the effects of disability upon the
person's ordinary activity. In this connection, it will be remembered
that a person may be too disabled to engage in employment although he
or she is up and about and fairly comfortable at home or upon limited
activity.
[FR Doc. 2026-03068 Filed 2-13-26; 8:45 am]
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