Unfit but Unrated: A Major IDES Gap

The Integrated Disability Evaluation System (“IDES”) is supposed to coordinate the Department of Defense (“DoD”) and Department of Veterans Affairs (“VA”) disability systems before a Service member leaves the military. The military determines whether a medical condition makes the member unfit for continued service. VA ordinarily assigns the disability percentage for each condition the Physical Evaluation Board (“PEB”) determines is unfitting. DoD then uses those VA percentages to determine whether the member will be separated with disability severance pay or medically retired.

The Current System has a Hidden Procedural Gap

IDES provides a specific method for challenging a VA rating percentage that is too low. It does not provide an equivalent pre-separation mechanism when VA makes a more fundamental decision and refuses to rate an unfitting condition at all because VA concludes that the condition is not service connected.

That distinction matters because DoD policy expressly recognizes that this situation can occur. In fact, DoD Instruction 1332.18 directly tells the PEB what to do when VA refuses to rate an unfitting condition: the PEB must rate the condition itself under the Veterans Affairs Schedule for Rating Disabilities (“VASRD”). DoDI 1332.18, § 8.1(d)(4).

The DoD side of the system therefore has a solution. The VA side does not.

IDES Normally Relies on VA to Supply the Rating

Under the IDES, DoD and VA perform different functions. The PEB decides fitness. If a condition prevents the Service member from reasonably performing the duties of office, grade, rank, or rating, the PEB may find that condition unfitting. Once the PEB finds a condition both unfitting and compensable, the VASRD governs the disability percentage.

DoDI 1332.18 requires the Military Departments to assign disability ratings based on 38 C.F.R. Part 4 and prohibits them from departing from the VASRD except under narrowly defined circumstances. DoDI 1332.18, § 8.1(a)-(b). In an ordinary IDES case, however, the PEB does not calculate the percentage itself. DoDI 1332.18 provides that the PEB will apply the ratings supplied by VA for the conditions it finds unfitting. DoDI 1332.18, § 8.1(d)(3).

That division of labor is one of the central purposes of IDES: one disability examination and rating process feeding both the military and VA systems.

The problem arises when VA does not supply a rating.

A VARR Can Correct a Bad Percentage

The IDES contains a built-in procedure when VA rates the unfitting condition but assigns a percentage the Service member believes is incorrect.

That procedure is the VA Rating Reconsideration (“VARR”). DoDM 1332.18, Volume 1 requires the Military Departments to provide IDES Service members an opportunity to seek reconsideration of VA’s proposed disability ratings for unfitting conditions before separation. DoDM 1332.18, Vol. 1, § 2.2(u). The process is meaningful because it occurs while the member is still in IDES. If VA assigns 10 percent to an unfitting condition but the medical evidence and VASRD support 30 percent, the member does not necessarily have to leave the military first and then attack the rating through the ordinary VA appellate system.

Instead, the Service member can request reconsideration while the disability case remains pending. DoDM 1332.18 further directs the VA decision review officer to consider new documentation or other information when new medical evidence exists or when the member identifies sufficient justification, including an error, warranting reconsideration. DoDM 1332.18, Vol. 1, § 4.12(c)(3).

That is a valuable safeguard, but it is a safeguard directed at a rating determination only.

A Service-Connection Denial Creates a Different Problem

The more difficult situation occurs when VA decides the condition is not service connected and therefore provides no rating at all. This is not simply a disagreement over whether a condition should receive 10 percent, 30 percent, or 60 percent. The VA is instead saying, in effect: this condition is not compensable by VA, so we are not going to assign a percentage.

That distinction can be particularly important for Reserve Component Service members. The military may possess an approved line-of-duty determination establishing that a disease or injury was incurred or aggravated during qualifying military duty. The condition may later become severe enough that the PEB finds it unfitting.

The VA can nevertheless conduct its own service-connection analysis and reach a different conclusion. The result can therefore look like this:

That is precisely the situation DoDI 1332.18 anticipates.

DoDI 1332.18 Gives the PEB a Direct Solution

DoDI 1332.18 could hardly be clearer about the military consequence of a VA refusal to rate. Section 8.1 first provides that the VASRD is used to determine the disability percentage for each unfitting condition. It then explains that VA ratings ordinarily establish the DoD rating in IDES. Immediately after that rule, the Instruction states:

“In the IDES process, the PEB will use the VASRD to rate an unfitting condition the VA refuses to rate.”

DoDI 1332.18, § 8.1(d)(4).

That provision is enormously important. It means a VA refusal to rate does not automatically convert the military condition into a zero-percent disability. Nor does it necessarily prevent the condition from producing disability retirement. Instead, once the military has properly determined that the condition is unfitting and compensable under the military disability rules, the PEB must perform the rating function VA declined to perform. For example, assume the PEB determines that a Soldier’s cardiomyopathy is unfitting and compensable. VA nevertheless concludes that the cardiomyopathy is not service connected and assigns no percentage.

DoDI 1332.18 directs the PEB to apply the VASRD itself. If the proper VASRD evaluation is 60 percent, the PEB can use that percentage to determine the Soldier’s military disability disposition even though VA has denied compensation for the same condition. The Soldier could therefore leave IDES medically retired for cardiomyopathy while VA continues to deny service connection for cardiomyopathy.

That sounds contradictory. Legally, however, it can occur because the two agencies are making determinations under different statutory systems.

The VARR Does Not Clearly Solve the Service-Connection Problem

The difficulty is that DoDM 1332.18 describes rating reconsideration in terms of reconsidering VA’s proposed ratings for unfitting conditions. The Manual requires the Military Department to assist the member in requesting reconsideration of proposed VA disability ratings. It likewise directs the PEBLO, when applicable, to help prepare a request asking the Disability Rating Activity Site to reconsider “the proposed VA disability ratings of unfitting conditions.” And the Manual explains that subsequent appeals of VA ratings ordinarily occur after the member becomes a veteran and receives the formal rating decision.

That structure works when the dispute is over the percentage. It does not establish an equally clear IDES reconsideration procedure for a threshold VA service-connection denial. In other words, the regulations expressly tell the military what to do if VA refuses to rate. They do not create a comparably explicit pre-separation procedure requiring VA to reconsider why it refused to rate.

That is the procedural gap.

The Current System Can Produce Two Different Outcomes for the Same Condition

The practical consequence is that a Service member may have to litigate the same medical condition in two different systems. On the DoD side, counsel may need to establish that the condition is compensable, unfitting, and entitled to an appropriate VASRD percentage despite VA’s refusal to rate it. On the VA side, however, the member may have to pursue the separate VA decision-review system to establish service connection. Those two disputes involve overlapping evidence but different legal questions.

The DoD dispute concerns military disability compensation and disposition. The VA dispute concerns entitlement to veterans disability compensation. As a result, a successful DoD case does not necessarily cure the VA denial. Likewise, the VA denial does not necessarily defeat the DoD disability case. That distinction is critical.

IDES Should Have a Service-Connection Reconsideration Procedure

The most logical reform would be a narrow pre-separation reconsideration mechanism for cases in which VA refuses to rate a condition that the PEB has determined is unfitting.

The procedure would not require VA to accept every military line-of-duty determination as binding. Alternatively, it could require expedited VA review when three things occur: the Military Department has determined that the condition is compensable under Chapter 61, the PEB has determined that the condition is unfitting, and VA has refused to rate the condition because of a service-connection determination.

The Service member could then submit the evidence directly relevant to the dispute, including duty orders, line-of-duty findings, service treatment records, medical nexus evidence, Reserve Component duty-status documentation, and evidence of in-service aggravation.

That would extend the logic of the existing VARR to the more fundamental problem. After all, the IDES already allows reconsideration when VA assigns the wrong percentage. There is a strong procedural reason to provide an equivalent mechanism when VA assigns no percentage at all.

What Service Members Should Do Under the Current Rules

Until such a procedure exists, Service members facing this problem should protect the DoD and VA portions of the case separately.

First, the military case should not be surrendered merely because VA denied service connection. DoDI 1332.18 expressly directs the PEB to use the VASRD when VA refuses to rate an unfitting condition. DoDI 1332.18, § 8.1(d)(4). Counsel should therefore ensure the PEB addresses compensability, applies the correct diagnostic code, and assigns the VASRD percentage supported by the evidence.

Second, the VA denial must be addressed through the appropriate VA review mechanism. The precise strategy will depend on the reason for the denial and whether the record requires additional duty-status evidence, medical nexus evidence, or correction of an adjudicative error.

Most importantly, Service members should understand that VA’s refusal to rate an unfitting condition does not end the military disability analysis. The DoD anticipated this exact problem.. Its own governing instruction gives the PEB the authority, and the obligation, to rate the condition itself.

How Joel Pettit Law Can Help

Joel Pettit Law represents Service members in complex IDES cases where the DoD and VA portions of the disability system do not line up.

When VA refuses to rate a condition that the military considers unfitting, the case requires careful separation of several different legal questions: whether the condition is compensable under Chapter 61, whether it renders the member unfit for continued service, what VASRD percentage applies, why VA denied service connection, and what procedural vehicle exists to challenge each determination.

Joel Pettit Law can evaluate the MEB and PEB record, line-of-duty evidence, duty-status documentation, medical evidence, VA proposed decision, and applicable VASRD criteria to determine whether the PEB must independently rate the condition under DoDI 1332.18, § 8.1(d)(4).

The firm can also help ensure that a VA denial is not mistakenly treated as controlling the military disability case. Where necessary, that includes developing the argument that the PEB must independently apply the VASRD while the Service member separately preserves the appropriate avenue for challenging VA’s service-connection determination.

These cases should be treated as coordinated disability litigation rather than a single rating dispute. The objective is to protect the Service member’s military disability entitlement while also preventing an erroneous VA determination from becoming a long-term compensation problem.