Yep, that's pretty fucked up. Unfortunately it's standard fare for the military. It seems to be an inherent problem with having a huge bureaucracy (gah I
hate having to look up the spelling of that fucking word
every single time I use it 
) with rigid regulations, but I've never understood why they don't streamline their procedures to give utmost priority and consideration to wounded vets. It's pretty evil that they would let someone who lost half of his arm get ground up in red tape.