Johnson v. Shulkin, 862 F.3d 1351 (Fed. Cir. July 14, 2017)

HELD: When rating skin conditions, “the use of topical corticosteroids does not automatically mean systemic therapy because DC 7806 distinguishes between systemic and topical therapy.” 862 F.3d at 1335 (emphasis in original).

SUMMARY: Under 38 C.F.R. § 4.118, Diagnostic Code (DC) 7806, a skin condition is rated based on the percentage of the body or exposed area affected by the condition or the frequency and type of therapeutic treatment (topical or systemic).

Veteran Paul Johnson was rated 10% for his service-connected skin condition and appealed for a higher rating. He treated this condition with “constant or near-constant corticosteroids and other topical medications.” The Board denied a higher rating because the condition did not affect a higher percentage of his body and, while it did require “constant or near-constant” use of topical corticosteroids, this was not considered “systemic therapy.”

The Court of Appeals for Veterans Claims (CAVC) reversed the Board’s decision, holding that the plain language of the diagnostic code requires that the phrase “systemic therapy . . . includes the use of corticosteroids without any limitation to such use being oral or parenteral as opposed to topical.”

The Federal Circuit reversed, finding that the CAVC “gave an overly broad reading of the term ‘systemic therapy’ in DC 7806 that encompasses any and all forms of topical corticosteroid treatment.” The Court held that “[t]he structure and content of DC 7806 make clear that it contemplates two types of therapy, ‘systemic therapy’ and ‘topical therapy’” and that it distinguishes between the two. Systemic therapy “means ‘treatment pertaining to or affecting the body as a whole,’ whereas topical therapy means ‘treatment pertaining to a particular surface area.’”

The Court noted that topical treatment could potentially be administered on a large enough scale that it would effectively meet the definition of “systemic.” However, that was not the case with Mr. Johnson – and the Court stated that the “mere possibility that the use of a topical corticosteroid could amount to systemic therapy in some cases does not mean all applications of topical corticosteroids mean systemic therapy.” The Court added that the alternative method of rating under DC 7806 (based on the amount of skin affected) further supports the distinction between topical and systemic.