This article examines the disability compensation programs and health care system of the Department of Veterans Affairs (VA) from the perspective of therapeutic jurisprudence scholarship. VA psychiatric patients have unambiguous financial incentives to endlessly litigate disability claims, to seek lengthy hospitalization rather than outpatient treatment, and to be ill, disabled, and unemployed. These countertherapeutic incentives reward incapacitation, encourage perceiving one-self as sick, diminish personal responsibility, taint treatment relationships, and lead to disparaging perceptions of VA patients. In addition, such perceptions produce moral dilemmas that arise from mutual distrust and frustration when patients and caregivers have antagonistic goals for the clinical encounter. Changes in disability determination procedures, compensation levels, and patterns of payment for treatment could give VA patients and caregivers a "healthier" health care system that encourages personal responsibility and promotes respectful attitudes toward patients. In the absence of such changes, an awareness of countertherapeutic financial incentives can help clinicians distinguish between psychopathological behavior and the pursuit of a rational income strategy, and can help practitioners recognize that apparently deceitful or litigious behavior represents a reasonable response to the economic contingencies that VA patients face.