I can speak to the process as a whole.
The organization to which you refer is the directorate of military career administration. When a person goes through treatment, at the end of that treatment the medical officer assigns a medical category. When that medical category has changed from what the person had previously, medical recommendations are made. The doctor sends that up to the directorate of medical policy in the surgeon general's office.
Based on national standards, that directorate looks at the condition, at what the limitations are that are assigned to the individual, and then they send to the directorate of military career administration a medical recommendation as to whether that person can pursue military service.
At that point, with both the chain of command's and the individual's comments, the directorate of military career administration examines all of the evidence before it and renders a decision as to whether the person may or may not be retained.