WASHINGTON — The Army is shortchanging troops on their disability retirement ratings to hold down costs, according to veterans advocates, lawyers and service members.

The number of people approved for permanent or temporary disability retirement in the Navy, Marine Corps and Air Force has stayed relatively stable since 2001.

But in the Army — in the midst of a war — the number of soldiers approved for permanent disability retirement has plunged by more than two-thirds, from 642 in 2001 to 209 in 2005, according to a Government Accountability Office report last year.

That decline has come even as the number of soldiers wounded or injured in Iraq has soared above 15,000.

Meanwhile, the number placed on temporary disability retirement has increased more than fourfold, from 165 in 2001 to 837 in 2005.

After 18 months, troops on temporary disability are re-evaluated and either returned to duty, rated for separation or permanent disability retirement, or sent back to temporary disability for another 18 months — up to five years. Along with paying them reduced wages during that time, the eventual re-evaluation often leads to downward revisions in their disability ratings — and lower disability payments.

"It's a bureaucratic game to preserve the budget, and it's having an adverse effect on service members," said Ron Smith, deputy general counsel for Disabled American Veterans.

The Army denies there is any intentional effort to save money by avoiding approvals for permanent disability status.

"It really is a fair process," said Col. Andy Buchanan, deputy commander of the Army's Physical Disability Agency. "It's wide open. We have nothing to hide."

Pentagon officials said troops have ample opportunity to appeal any decisions they deem unfair.

But the Rand Corp. think tank has said the system is "unduly" complicated.

FEW APPEAL RATING

Counselors who advise troops often have insufficient training or experience, critics say.

Service members assume that after months in a war zone, the military will look out for them. Many troops being evaluated for possible disability retirement accept the first rating they are offered. Few appeal, which might get them more benefits.

Those who try to navigate the process beyond their initial evaluation — including hundreds of combat veterans in limbo at Walter Reed Army Medical Center in Washington — face long waits, lost paperwork and months or even years away from home as they try to complete the process.

If they receive a disability rating of above 30 percent, they receive disability retirement pay and medical benefits. Those rated under 30 percent receive severance pay and no benefits.

Many eventually give up and take their chances with the Department of Veterans Affairs, which may give a higher rating for the same disability.

But under the separate disability payment systems of the Defense Department and the VA, a higher VA rating does not necessarily translate into more money — and forgoing military disability retirement also means giving up lifetime commissary and exchange privileges, military healthcare and other benefits.

IRAQ INJURIES

In May 2003, Army Cpl. Richard Twohig was thrown from an armored personnel carrier in Iraq. The 82nd Airborne Division paratrooper landed on his head, said his lawyer, Mark Waple, of Fayetteville, N.C.

Twohig suffers headaches at least once a week that last up to 14 hours, as well as short-term memory loss.

"This is well substantiated by his doctors — Army medical doctors," Waple said.

But his physical evaluation board rated him only 10 percent disabled for another injury because he had no substantive proof the headaches were a result of the accident, even though regulations call for evaluation boards to give troops the benefit of the doubt in such instances.

"I believe it is budget-related," Waple said. "I believe that there is a feeling the service member should turn to the VA for both their healthcare and their veterans benefits."

Twohig can't work because of the disabling headaches, and even if he receives VA benefits, his family has lost its medical insurance.

If a physical evaluation board rules injuries are not related to service or were pre-existing conditions, troops are not eligible for VA benefits, either.

BASED ON EVIDENCE

Waple said he has about a dozen cases out of Fort Bragg, N.C., similar to Twohig's.

Buchanan said he gives medical evaluation board adjudicators one instruction: "Do the right thing."

Adjudicators "are committed to ensuring all disability decisions are made fairly and accurately and based on the evidence in the soldier's medical record," Buchanan said. "We have never received any guidance, official or otherwise, from anywhere within DoD to limit findings for budgetary or other reasons.

"There is absolutely no attempt on the part of the Army or this agency to deny soldiers any disability benefits or to push them off on the VA."

Pentagon spokesman Marine Maj. Stewart Upton said the disability retirement process is being looked at and soldiers have plenty of opportunity to appeal.

"Service members are afforded due process to ensure their cases and concerns can be fairly considered whichever direction they choose," he said. "Service members also have rights of appeal at specific points in the process should they disagree with their rating."