Sgt. John Russell was transferred from Kuwait to a federal medical center in North Carolina for psychiatric evaluation ahead of his court martial.
The Army said in a written statement that Russell was unable to assist in the preparation of his defense and faced about four months of further evaluation.
Russell is charged with walking into the clinic at Baghdad's Camp Liberty in May and firing on the personnel inside.
Stars and Stripes said Thursday the incident led to an investigation of how the Army addresses mental-health issues at the brigade and battalion level.