Brave and the Bold

https://www.gpo.gov/fdsys/granule/CFR-2011-title38-vol1/CFR-2011-title38-vol1-sec3-157
I just scrolled down the page and clicked onto the link.

Vync, I believe VA may be right in this case.  The first sentence of the information you posted from 38 CFR excludes 5243 if it is evaluated under the Formula for Rating Intervertebral Disc Syndrome Based on Incapacitating Episodes):
This is from M21-1 
 
Change Date

 

January 11, 2016

III.iv.4.A.3.a.  Evaluating Manifestations of Spine Diseases and Injuries

 

Evaluate diseases and injuries of the spine based on the criteria listed in the 38 CFR 4.71a, General Rating Formula for Diseases and Injuries of the Spine (General Rating Formula).  Under this criteria, evaluate conditions based on chronic orthopedic manifestations (for example, painful muscle spasm or LOM) and any associated neurological manifestations (for example, footdrop, muscle atrophy, or sensory loss) by assigning separate evaluations for the orthopedic and neurological manifestations.

Evaluate IVDS under 38 CFR 4.71a, DC 5243, either based on the General Rating Formula or the Formula for Rating IVDS Based on Incapacitating Episodes (Incapacitating Episode Formula), whichever formula results in the higher evaluation when all disabilities are combined under 38 CFR 4.25.

Variations of diagnostic terminology exist for IVDS.  When used in the clinical setting, the following terminology is consistent with the general designation ofIVDS:

·         slipped or herniated disc

·         ruptured disc

·         prolapsed disc

·         bulging or protruded disc

·         degenerative disc disease

·         sciatica

·         discogenic pain syndrome

·         herniated nucleus pulposus, and

·         pinched nerve.

Notes: 

·         When an SC thoracolumbar disability is present and objective neurological abnormalities or radiculopathy are diagnosed but the medical evidence does not identify a specific nerve root, rate the lower extremity radiculopathy under the sciatic nerve, 38 CFR 4.124a, DC 8520.

·         If an evaluation is assigned based on incapacitating episodes, a separate evaluation may not be assigned for LOM, radiculopathy, or any other associated objective neurological abnormality as it would constitute pyramiding.

·          Apply the previous provisions of 38 CFR 3.157 (b) (prior to March 24, 2015) when determining the effective date for neurological abnormalities of the spine that are identified by requisite records prior to March 24, 2015.


 
III.iv.4.A.3.c.  Example of Evaluating IVDS

 

Situation: A Veteran’s IVDS is being evaluated.

·         LOM warrants a 20-percent evaluation based under the general rating formula

·         mild radiculopathy of the left lower extremity warrants a 10-percent  evaluation as a neurological complication, and

·         medical evidence shows incapacitating episodes requiring bedrest prescribed by a physician of four weeks duration over the past 12 months which would result in a 40-percent evaluation based on the incapacitating episode formula.

Result:  Assign a 40-percent evaluation based on incapacitating episodes. 

Explanation:

·         Evaluating IVDS using incapacitating episodes results in the highest evaluation.

·         Since incapacitating episodes are used to evaluate IVDS, the associated LOM and neurological signs and symptoms will not be assigned a separate evaluation. 

References:  For additional information on

·         evaluating spinal conditions, see M21-1, Part III, Subpart iv, 4.A.3.a, and

·         determining whether evidence is sufficient to evaluate based on incapacitating episodes of IVDS, see M21-1, Part III, Subpart iv, 4.A.3.b. 

It's currently a proposal, right? You can't NOD a proposed rating because it isn't final. You should immediately request a hearing (within 30 days of the proposal notice) to discuss the issue. Requesting a hearing will freeze the evaluation right where it is for the time being. If, however, VA goes ahead and reduces the overall percentage from 70% to 60% it will cause a debt for payment made following 60 days after the proposed rating date (which would be 10% of each payment in this case).
example: Proposed rating on May 1, 2016. VA generates a suspense of 65 days (5 days provides time for mail processing). Reduction would occur in July, but would actually be reflected on the August 1 payment. If you request a hearing that is scheduled in early August then everything is frozen until the hearing happens. If that hearing doesn't prompt VA to reverse and they rate the same then it would be effective in July still (60-65 days following the  proposed date) which would result in an overpayment for the August 1st check that was already received by the time of the hearing. If the hearing is scheduled in late August then it could result in an overpayment of 2 months at the 10% rate because the September payment might have already processed as well.
If you request a hearing outside of 30 days of the proposal then VA will still reduce. If the hearing is successful then it would be restored over the months that the reduction was effective.
Requesting a hearing to freeze things and presenting the evidence could help out. It could also backfire if the rater is not interested in hearing what you are saying.
It's confusing, but it sounds as if a hearing is what you need to do.

In my opinion, I believe you are correct. 5243 says nothing like what is mentioned in the VA letter.
Not only does the regulation state they must "evaluate any objective neurologic abnormalities separately under an appropriate diagnostic code", but it also says to use whichever criteria (general vs. IVDS) that yields a higher rating.
If I received a letter like that, I would NOD the hell out of it. Include the current spine rating table and specifically quote what you need to prove them wrong. I would make it as clear as possible and at an 8th grade reading level (obviously someone over there is having trouble reading).
 
While you are at it, here are a couple of other factors to also consider:
If you are no longer employed, you might also consider filing for IU per the 60% IVDS rating.
Regardless of whether or not you are employed, don't forget about any other common secondary conditions such as depression, ED, and any other disabilities that are created due to side effects of medication used to treat your spine/radiculopathy.