Happy Veterans Day to all you cool dudes out there (dudettes included for PC’s sake). VA’s OIG sends their “thank you for your service” this year in grand fashion. Apparently, can’t pay you for those GSW scars unless there is objective evidence of pain. That rule is not in the rating schedule. Not to mention there is no such thing. VA is still trying to put it there. Big shocker, I know.
Pay up, you malingering sucker
On October 21, 2026, the VA Office of Inspector General published a report with a title nobody wants to read twice: Review of Accuracy of Claims Processors’ Disability Evaluation Decisions for Painful Scars, Report No. 25-03303-266. It runs 36 pages. The first example in it is this:
Read what actually happened there. The man said his scar hurt. A medical professional listened to him, believed him enough to write “aching pain” into the medical history section of the examination report, and signed it. no reason to doubt him. A rater at the VA read the file and paid him the minimum compensable rate.
The only thing missing is a mark in a different box on the same form, the box where the examiner records whether the scar is tender when pressed. Nobody says the Veteran lied. Nobody says the scar does not hurt. Nobody re-examined him. The finding is that his pain was documented in the wrong part of the paperwork, and so the money has to come back, so says OIG.
$6,900.00, “because VBA had not yet taken corrective action.” The report says that like it is a problem.
What rule was even supposedly broken?
Here is the entire legal authority for rating a painful scar. It is Diagnostic Code 7804 in 38 C.F.R. § 4.118, and you can read all of it in about twenty seconds.
20 percent — Three or four scars that are unstable or painful
10 percent — One or two scars that are unstable or painful
Three notes follow it. Note (1) defines an unstable scar as one with frequent loss of the covering of skin. Note (2) says to add ten percent if a scar is both unstable and painful. Note (3) says a scar rated under one of the neighboring codes can also be rated under 7804.
That is the whole kit and caboodle. Count the times the regulation says “objective.” Count the times it says “tender to touch,” or “on examination,” or “confirmed by a medical professional,” or anything else about what kind of proof a Veteran has to produce.
Zero. None. Nadda. The code asks one question, is the scar painful? It does not say who gets to answer.
Where does it come from, where does it go, cotton eye joe
So where does the rule come from that cost this man $6,900? The OIG report tells you, and to its credit it does not hide it. The requirement is in VA’s Adjudication Procedures Manual — the M21-1, the internal handbook VA writes for itself.
And then:
A Veteran’s account of his own body is not enough. That sentence is not from Congress. It is not from the rating schedule. It is from a manual that VA wrote, revised, and can revise again on a Tuesday or twice today if they want.
The report also records something worth sitting with. The OIG team went to the regional office in Houston in December 2025 and to New Orleans in January 2026, and interviewed 26 managers and staff, 20 of them claims processors. What did the people doing the work say? That the form confuses them. The OIG agreed, it found the scars questionnaire “does not clearly define objective versus subjective evidence.”
So, VA built a form that does not explain the distinction, trained raters against a manual provision that turns on the distinction and then counted how many of them got it wrong. Government work at its peak.
The ink that fell off the paper
Now the part that ought to end the argument.
Diagnostic Code 7804 used to say exactly what VA now insists it still means. VA’s own account of the history, from its own rulemaking:
- From 1946, the code read: “Scars, superficial, tender and painful on objective demonstration.”
- From 2002, it read: “Scars, superficial, painful on examination.”
- From October 23, 2008, it has read: “Scar(s), unstable or painful.”
Twice the regulation carried language requiring the pain to be demonstrated or examined. Twice that language was removed. The second time was eighteen years ago.
VA’s position is that this changed nothing. In its own words, “the removal of ‘on examination’ from the title was not intended to change the substantive rating criteria so as to eliminate the requirement of objective evidence,” and “since its inclusion in the VASRD, VA has always required objective evidence of pain to assign a compensable evaluation using this DC.”
Perhaps. But that is a claim about what somebody meant, not about what the regulation says. A Veteran reading the rating schedule in 2026, or a rating specialist in Houston, or a Veterans Law Judge, finds a code that asks whether the scar is painful and three notes that say nothing about proof. The intent is in VA’s head. The text is what the rest of us have to live by. And we know when the shoe is on the other food, the VA knows what it says and means what it says.
VA noticed, too
Which brings us to the document the Inspector General’s report never mentions.
On September 29, 2025, VA published a proposed rule in the Federal Register, RIN 2900-AS37, signed by the Secretary on September 24. Its title: Objective Evidence of Pain for Painful Scars Under DC 7804. 90 Fed. Reg. 46542. What it proposes is one sentence:
You do not propose to add a sentence that is already there.
VA’s stated reason for adding it is that “it is now apparent that an added note re-confirming this longstanding requirement would provide more clarity to veterans and rating personnel.” That is an admission dressed up as housekeeping. The requirement needs to be written down because, as written, it isn’t.
The comment period closed on November 28, 2025. As this is published, that proposal is still a proposal. Pull up Diagnostic Code 7804 today and you will find Notes (1), (2) and (3). There is no Note (4).
So hold the dates next to each other. The OIG reviewed decisions VA made between June 1, 2024 and May 31, 2025. VA proposed to write down the rule in September 2025, i.e., after every one of those decisions had already been made. And the rule still is not final in November 2026.
The Inspector General graded 11 months of work against a sentence that did not exist then and does not exist now.
17,900 “errors”
The math of the report is worth laying out, because the numbers are what will be quoted.
The OIG reviewed a sample of 130 decisions — 70 grants of service connection, 60 increases — and projected the results across everything VA decided in that period. About 538,000 Veterans were receiving compensation for painful scars as of July 2026.
- An estimated 15,400 grants contained errors, about 36 percent.
- An estimated 2,400 increases contained errors, about 58 percent.
- Together, about 17,900 decisions with at least one error — a 38 percent error rate.
- At least 920 of those produced at least $5.6 million in overpayments, which the OIG books as “questioned costs.”
- The OIG “did not find any errors that resulted in underpayments.” Not one.
That last line deserves a moment. In a sample of 130 files, across two categories of decision, in a system this complicated, every single error ran in the Veteran’s favor. Either VA is incapable of underpaying anyone for a painful scar, or nobody went looking in that direction.
The largest single error category, 7,400 of them, is “lack of objective evidence of a painful scar.” That is the keloid scar on the ear, 7,400 times over.
And when VA briefed back, the OIG tested again, 30 more decisions from January 2026, a 43 percent error rate. The report treats the higher number as vindication.
There is one more exchange in there that tells you what this is. Among the errors the OIG charged, VBA pushed back on two. One of them was a case where VBA had done what a Board of Veterans’ Appeals decision ordered it to do. VBA said the Board’s decision was binding on it. The OIG’s answer was that VBA should have used its internal process to challenge the Board instead. Uh, that is not how things work.
Think about what is being recommended. A Veteran wins at the Board. The regional office implements the win, as the law tells it to. And the Inspector General’s position is that implementing it was an error, and that the office should have gone back and contested the Veteran’s own favorable decision. The things they say outloud.
Two truths and a lie
Set the OIG report beside VA’s proposed rule and something breaks.
The proposed rule, describing the same objective-evidence requirement, says this about its effect:
“The changes implemented through this rulemaking will not impact benefit payments or the administration of benefits.”
Zero. No change to what anybody gets paid. That is VA’s formal, published position, filed under the Secretary’s signature.
The Inspector General’s report, applying that same requirement to 11 months of decisions, arrives at $5.6 million in overpayments from fewer than a thousand files, with a projected 17,900 bad decisions behind them and an instruction to go recover the money.
Both documents are the VA. They were published five weeks apart. They cannot both be right. Either the requirement changes nothing about benefit payments, in which case there is nothing to claw back, or it moves millions of dollars, in which case VA’s regulatory filing understated its effect to the public and to the people who were invited to comment on it.
Nobody has to resolve that contradiction, of course. The money comes off the Veteran’s check either way.
What does “objective” even mean?
The question underneath all of this is the one that should have been asked at the start. What does objective evidence of pain even mean?
Pain is not like a fracture. There is no film that shows it, no blood test, no instrument that measures it from outside the person feeling it. Every clinical scale ever built for pain ends up asking the patient. The scars questionnaire itself has a section for the Veteran’s account of his pain. VA collects it, records it, and then the manual says it does not count.
The Veterans Court has had to wrestle with this, and what it said is useful even though it said it about a different diagnostic code. In Petitti v. McDonald, 27 Vet. App. 415 (2015), the issue was painful motion under 38 C.F.R. § 4.59 and Diagnostic Code 5002, and the Court held that objective evidence of painful motion was required there. But it then had to say what “objective” means, and its answer was not the one VA’s manual assumes.
The Court defined objective as “perceptible to persons other than an affected individual.” It held that “lay statements or evidence may also be included within the umbrella of ‘objectively confirmed’ evidence.” It accepted sworn statements from the Veteran and his daughter. And it held that the Board had erred by concluding that painful motion “may be established only by an examiner’s findings on range-of-motion tests,” calling that conclusion clearly erroneous. Petitti, 27 Vet. App. at 427–29.
To be fair about it: the Court also said a Veteran’s own testimony, standing alone, was not enough under that code, there had to be confirmation from somebody other than the claimant. That is a real limit addressed in a different context, but it is telling.
But notice how far that still is from where VA has ended up on scars. “Objective” does not mean clinical. It does not mean a physician with a glove. It means perceptible to someone else. A wife who watches her husband flinch when the seatbelt crosses the scar has perceived it. A supervisor who has seen him stop mid-shift has perceived it. Under the manual VA is enforcing, none of that exists. Only one thing exists: whether an examiner, in a twenty-minute appointment, pressed on the right spot and then recorded it in the right field.
And when the examiner doesn’t, the answer is not “get another examination.” The answer, per this report, is a bill.
But, again, the word objective ain’t even in the rating schedule for scars.
For you caregivers readin’ this
One week after the scars report, on October 28, 2026, the OIG published its Audit of Caregiver Support Program Appeals Processes, Report No. 25-01406-224. It is about a different program, but is the same story told from the other end.
The Program of Comprehensive Assistance for Family Caregivers pays a stipend to the family member who keeps a seriously injured Veteran at home instead of in an institution. When VA says no, or cuts the stipend, or throws a family out of the program, the Veteran and caregiver can appeal. I do lots of these caregiver appeals, and for that very reason, don’t fool with these other appeal routes. Straight to the BVA we go when I handle PCAFC. Clinical appeals take a month but have less than a 13 percent success rate. Different story for another time.
Here is how long that takes.
Higher-level reviews: about 444 days. Supplemental claims: about 404 days.
Clinical appeals, over a comparable period: about 36 days.
416 days against 36. And the grant rates run backwards from what you would expect: about 3 percent of higher-level reviews and 4 percent of supplemental claims were granted, against about 12 percent of first-level clinical appeals. The lane that takes more than a year is the lane that says no more often.
The OIG found the program has set no timeliness goals at all for the AMA options, the way it has for clinical appeals. In July 2026 there was a backlog of 703 decision reviews waiting to be worked, some filed as far back as October 2025. None of these wait times are published anywhere a Veteran could find them, which means a family choosing between appeal routes is choosing blind.
And then the detail that will cost somebody real money:
That is the whole ballgame in a caregiver case and VA does not explain it. Miss the year, and even if you eventually win, the back pay starts from the wrong day.
We have written about this before. Lindsey had been denied under the caregiver program and had called about ten attorneys before anyone would take it. His wife was the one keeping him home. The denial was eventually beaten and the effective date put back where it belonged. That took years, and it took a fight over precisely the kind of date this report says VA is not bothering to explain.
416 days is not a statistic in a house where somebody needs help getting to the bathroom. It is the stretch a wife works unpaid while the file sits. Bills keep piling up because she quit work to keep her war hero at home.
$38 and some change
The third document in this stack is the OIG’s Semiannual Report to Congress, Issue 96, covering April through September 2026. It is how the office reports its own worth, and it does so in a single figure.
That is the scoreboard. And the $5.6 million from painful scars is a line on it.
We are not against oversight. VA needs auditing, badly, and this office does work that nobody else does. The same report covers fraud against Veterans’ fiduciary accounts, and that is worth every hour spent on it. The problem is narrow, though. When an oversight body measures itself in dollars recovered, the errors it is built to find are the ones where a Veteran was paid. There is no return on investment in discovering that 17,900 people were underpaid. The report says it found zero of those, and nothing in its methodology was designed to.
So, the ledger ends up looking like this. A man’s scar hurts. He says so. A clinician writes it down. A rating specialist believes him. And eighteen years after VA deleted the words “on objective demonstration” from the regulation, thirteen months after VA proposed putting a version of them back, and with that proposal still unfinished, an auditor reads the file and finds $6,900 the government should never have paid him.
The rule he broke is not written down yet. Just the debt notice VA is going to stick him with.
Happy Veterans Day, OIG style.
Godspeed.
Documents below. All three are public reports of the VA Office of Inspector General. The proposed rule discussed above is at 90 Fed. Reg. 46542 (Sept. 29, 2025), RIN 2900-AS37.
The complete file
VA Office of Inspector General, Review of Accuracy of Claims Processors’ Disability Evaluation Decisions for Painful Scars, Report No. 25-03303-266, October 21, 2026. Example 1 and the error tables are at pages 5–7. 36 pages.
DownloadVA Office of Inspector General, Audit of Caregiver Support Program Appeals Processes, Report No. 25-01406-224, October 28, 2026. The 416-day finding and the effective-date warning are at pages i–ii and 6–8. 38 pages.
DownloadVA Office of Inspector General, Semiannual Report to Congress, Issue 96, covering April 1 through September 30, 2026. The return-on-investment figure is in the Inspector General’s opening message. 96 pages.
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