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It started in December 2004 when the Chicago Sun-Times ran a series of articles highlighting variations among states' veterans disability compensation payments. The report showed that New Mexico had the highest compensation payments and Illinois the lowest. Rep. Lane Evans (D-Ill.) and other Illinois members of Congress sent a letter to VA Secretary Nicholson calling for a review. Subsequently, the Secretary asked for the Office of the Inspector General (OIG) to report on the differences.

In May 2005 the resultant OIG report noted that a review of 2,100 PTSD compensation cases found that in approximately 600 cases the compensation payment outcomes differed as a result of the stressor verification requirements varying from state to state. Members of Congress used the results of this OIG report as the basis for claiming "fraud" among PTSD claims, especially those involving Vietnam veterans.

Secretary Nicholson then issued notice that there would be a review of 72,000 PTSD claims awarded at 100 percent disability from 1999-2005. But after pressure from veterans' groups (including VVA) and Sen. Patty Murray's (D-Wash.) amendment to halt the review passed the Senate 98-0, the VA Secretary announced cancellation of the review last November 10.

However, just six days later, another PTSD review was announced in a press release issued by Sen. Larry Craig (R-Idaho), the chair of the Senate Committee on Veterans' Affairs. This time neither the Secretary nor the VA announced the review. Sen. Craig's press release stated that the VHA had contracted with the Institute of Medicine (IOM) to conduct a new review of PTSD diagnosis, treatment, and compensation for approximately $1.4 million. According to a subsequent VA "fact sheet," the IOM will form two committees to conduct its review. One committee will "review the literature of various treatment modalities (including pharmacotherapy and psychotherapy)." This phase is expected to be completed in 12 months.