The medical diagnosis of psychosis has been around for a long time in VA parlance. For instance, prior to the most recent

38 CFR 3.384 defines psychosis as:

…any of the following disorders listed in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) (see § 4.125 for availability information):

(a) Brief Psychotic Disorder;

(b) Delusional Disorder;

(c) Psychotic Disorder Due to Another Medical Condition;

(d) Other Specified Schizophrenia Spectrum and Other Psychotic Disorder;

(e) Schizoaffective Disorder;

(f) Schizophrenia;

(g) Schizophreniform Disorder; and

(h) Substance/Medication-Induced Psychotic Disorder.

So basically, the VA defines psychosis pretty much the same as the American Psychiatric Association.

Psychosis is important in VA because if you are diagnosed with psychosis within two years of the end of a war period (except for Persian Gulf) and within two years of discharge, then you are eligible for mental health treatment at the VA even if you are not service-connected for a mental condition under 38 USC 1702.

Additionally, psychosis (or insanity) is also a mitigating factor if your discharge was under other than honorable service (or dishonorable) and therefore have a chance of getting your discharge upgraded if insanity was a factor that led to your other than honorable (or dishonorable) discharge.

You will also notice that substance abuse is included in the definition above. So even though you would never get paid compensation for substance abuse under current VA law, you are able to get treatment for it under 38 USC 1702.

Note: If you are a Vet of the Persian Gulf War period, you qualify for treatment under 1702 if you are diagnosed with any mental condition (that isn’t a developmental/personality disorder) if diagnosed within two years of discharge.