In our opinion, both of these goals are being met. As of April, we have completed readjudication on 4,966 cases. We awarded additional grants of service connection in 683 cases, 157 of those for undiagnosed illnesses.

The overall grant rate for service connection for undiagnosed illnesses has risen from 5 percent to 7 percent. We believe that this increase is due to more complete development for lay evidence and more thorough analysis of the lay evidence together with medical evidence.

On April 29, 1997, we published an interim final rule to implement the Secretary's decision to expand the presumptive period for undiagnosed illnesses through December 31, 2001. Because of this change, we have begun a further review of claims that were denied because of the two year presumptive period.

We expect a significant number of additional grants for undiagnosed illnesses. In December 1992, VBA consolidated the adjudication of Persian Gulf environmental hazard claims in the Louisville regional office.

Because of the unexpected high volume of cases, we redistributed them to four Area Processing Offices in October 1994. We also consolidated the undiagnosed illness claims in these four stations.

The purpose of the consolidation was to concentrate expertise in rating the complex issues and dedicate the resources to expeditious claims processing. However, the additional work imposed on these four stations has had an adverse impact on the other areas of their claims processing.

While they have given priority to Persian Gulf cases, a large amount, if not all, of their routine rating work has been transferred to other stations for processing. The percentage of claims pending over 6 months at the Area Processing Offices during the first 6 months of fiscal year 1997 shows a higher rate of increase over 1996 than has been seen nationally.

Therefore, in order to maintain overall claims processing efficiency, the Secretary just last night approved our recommendation that Persian Gulf claims be redistributed to the regional office of jurisdiction.

In making this decision, the Secretary took into account the views of the veterans, the veterans' service organizations, and members of Congress who had expressed concerns about the specialization of Persian Gulf claims.

We will now initiate this redistribution and will instruct the regional offices to stop sending Persian Gulf claims to the Area Processing Offices while we plan the implementation. We will schedule training to assist the regional offices in processing these claims.

These training sessions will focus on our experiences in developing and rating these cases that we have gained over the last 2 years. We believe that a transition from the Area Processing Offices to the regional offices will provide the customer-focused service that our veterans are asking for and will not adversely affect the quality improvements we have seen or the accuracy in updating our date base.

Lastly, with regard to tobacco-related claims, as our General Counsel interprets the current law, direct service connection may be established for disability or death resulting from tobacco use

during active service even if the disability or death did not occur until after service and after the expiration of any applicable presumptive period.

We have about 4,250 such claims pending adjudication.

In the 1990 Budget Reconciliation Act, Congress prohibited compensation for disabilities resulting from the abuse of alcohol or drugs. This action enhanced the integrity of our compensation program. In the same spirit, VA recently submitted proposed legislation to prohibit service connection due to tobacco use in service.

However, it would not preclude service connection where the disease or injury appeared or was aggravated during active service or during the applicable presumptive period.

Mr. Chairman, this concludes my statement. I will be happy to answer any questions.

[The prepared statement of Ms. Moffitt appears on p. 61.] Mr. QUINN. Thank you very much, Ms. Moffitt.

We appreciate the fact that the ranking member of the full committee, Congressman Lane Evans, has joined us here this morning and wonder if Mr. Evans might have some opening remarks or comments to make at this time before we begin any questioning. Lane.

Mr. EVANS. Thank you, Mr. Chairman. I'd just like to submit them for the record.

Mr. QUINN. Without objection, so ordered.

Mr. EVANS. Thank you.

[The prepared statement of Congressman Evans appears on p. 46.]

Mr. QUINN. Now we've got three areas that we're dealing with, so we're going to try to limit questions.

Thanks for being brief, Ms. Moffitt. We appreciate that. There's probably some questions certainly that will be generated.

I'd like to go to the Results Act portion first. You've talked about for 1998 some claims processing goals of being about 92 percent accurate and you talked about processing them in 106 days. We also know that there's been some cutbacks or at least some rearranging of staff at the same time.

Can you talk for a minute or two about-first of all, when you talk about a 92 percent accuracy rate and about processing claims in 106 days or so for 1998, what has it been the last couple of years? Is that an increase? And the larger question, how do you propose to do that with less people?

Ms. MOFFITT. With regard to the accuracy, we plan to measure accuracy in 1998 in a different way than we have done historically. If you for the future, we will take the number of cases processed correctly divided by the universe of cases reviewed to determine the accuracy rate.

If you apply that math retroactively to the statistics we already have on hand and say well what is your accuracy rate right now, it is about 90 to 91 percent. So when we look to the future, we are hoping to improve our accuracy to 92 percent for 1998.

With regard to the 106 days for timeliness, right now we stand at overall average of 133 days for original disability compensation claims. We expect over the next 18 months to drive that down to 106 days if at all possible.

You asked how we will do that in the face of possibly some reductions in the work force. We are looking at overtime to assist in bringing that down, as well as some initiatives that we have under way that will assist us in doing a faster job of adjudicating original disability compensation claims.

Notably, we are going to contract exams to the private sector and plan to do that initially at military bases where veterans are being discharged so that we can get an examination as well as a rating decision within a day or so of the time a service person is being discharged.

That will help to improve our overall average time to complete. Mr. QUINN. And you haven't done contracting out of this type before?

Ms. MOFFITT. No, sir.

Mr. QUINN. Will you be comfortable-are you comfortable with the process of selecting those folks that will help you at regional places?

Ms. MOFFITT. We have completed our statement of work. We have not gone on the street yet to find who those contractors will be. But I think that we have provided a very detailed plan of how that will occur.

Mr. QUINN. Okay. Thanks very much. I have some questions on the other part of your testimony, but I think we'll give the other members a chance.

Mr. Filner.

Mr. FILNER. Thank you, Mr. Quinn.

Ms. Moffitt, you know we have worked together both in San Diego and in Washington, and I think you know I have the highest regard for you. Given that background, I was, let me just say, very disappointed in your testimony and let me tell you why.

It seems to me that a number-and I'm going to read some of them to you. A number of criticisms of the way the system has operated up until this point have been made and are, I think, well known. And it doesn't look like you are recognizing these issues and dealing with them in a frank and open and honest way.

If there are mistakes that were made, let's deal with them, admit them, and correct them. If these criticisms are not valid, let's deal with those. But you're acting as if nobody has been concerned or nobody has brought up problems with this thing from a human perspective and dealing with these very real issues of people's life and death matters.

And I want to get it out of the bureaucratic language and this passive tense and this passive voice, and I want to talk about people; the people you serve and the people who work for you. People are either doing their job right or not. They are either doing it well or not.

If they are making mistakes, somebody is responsible. And I get from the testimony on this whole Persian Gulf War from, you know, past hearings that we've had before the full committee in this everything is-well, it happened or, you know, the processthere's no individuals ever responsible for anything it seems in dealing with these issues.

Let me just tell you some of the things-I'm new in this area. And let me tell you the things that I have heard or know about.

And it just doesn't seem that you are dealing with these in any honest way.

Veterans have not been informed as to the evidence needed to support their claims. The VA has not requested evidence concerning the continuity of symptoms. Since the presumptive period was originally only 2 years and many veterans did not obtain a medical evaluation until after that time period, they were denied because the presumptive period was not long enough for them to get to the date of the first evaluation.

And then the VA did not ask the veterans to submit lay evidence concerning the onset date of symptoms. In most cases, the VA examiner did not ask or record the date symptoms began. And since the veteran was not informed of the need to identify an onset date, they didn't do so.

They were not notified by the VA of the change in the law allowing lay evidence and nonmedical indicators such as time lost from work that could be submitted as evidence of an undiagnosed condition so they didn't submit such information.

The VA rating board did not request nonmedical evidence of undiagnosed conditions. The Persian Gulf registry was not used to assist in the development of claims. Although four specialized rating centers were established, no standard adjudication practices were developed and provided.

Irregularities were noted with violation of the VA's duty to assist traditional due process requirements in basing medical conclusions on medical evidence. The only staff which received special training in the adjudication of Gulf War claims was the staff of the Phoenix processing office.

I can go on. There's a list that has been-we've compiled based on both specific documentation and specific testimony, and it's as if this doesn't exist.

I need you and the VA and the people to address this stuff in very specific ways and tell us what's being done to make sure that this treatment of our veterans does not continue and find-and if they're responsible people or processes, deal with them in an open way.

I mean, I just-let's talk with some emotion and some humanity as opposed to this bureaucratic language which doesn't get to the heart of it and doesn't show how we are concerned, the veterans themselves are concerned, and I'm sure the people who work for you are concerned.

But let's get some emotion into this and correct the problems and take some responsibility for it.

Ms. MOFFITT. Mr. Filner, I think in recognition of many of the problems that you listed there, that we did note that errors had been made and we took responsibility by asking for a readjudication of nearly 11,000 cases.

We said that mistakes had been made in that the rating specialists and those people developing the claims were not fully aware of the uniqueness of this new legislation in that lay evidence needed to be fully developed and considered in the rating decision.

And so that readjudication of 11,000 cases was in recognition of the errors that had been made.

Mr. FILNER. Well, how did that happen? I mean, it sounds like a systemic-it doesn't sound like a mistake; it sounds like a systemic underestimation of the problem, a systemic casualness about the problem, a systemic-there's something going on wrong when you have that-if you're saying there are that many problems.

Wouldn't you say that there's a serious situation here? I mean, who is responsible for that? I mean, is there are there people involved that made wrong decisions? How did the system break down with that kind of problem?

And again, everything isn't as passive-you know, well there were 11,867 or whatever errors. Who made the decision that led to that? How did we get to that situation? Because if you don't fix responsibility and if you don't take responsibility, why will these 11,000 be proven any-be fixed any better than the first time around?

Ms. MOFFITT. The readjudication of 11,000 cases was mandated by Jack Ross who was the acting Compensation and Pension Service Director at the time. As of November 1996, I take full responsibility for the actions with regard to Persian Gulf adjudications in the field.

Mr. FILNER. Let me my time is up, but I want to come back. Kris, you're not getting at what I'm trying to answer, and I'll try to rephrase it in a way that maybe you can come to grips with it. Mr. QUINN. Thank you, Mr. Filner.

Mr. Hayworth.

Mr. HAYWORTH. I thank the Chairman and Ms. Moffitt. Let me follow up on the comments of the ranking member in this regard. Because even as he mentioned some of the training being provided in Phoenix, I can offer cases to you and direct contact with many constituents that remain very concerned about Persian Gulf Syndrome.

And with the help and leadership of our colleague on this committee, Mr. Buyer of Indiana, we held a forum in October of last year where many of these people came forward. It is in that light then that I need to ask, even in the midst of the readjudication of some 11,000 cases, are we seeing Persian Gulf vets still filing initial claims for undiagnosed illnesses?

Ms. MOFFITT. Yes, sir; we are.

Mr. HAYWORTH. Has the rate of that application declined or increased or remained steady?

Ms. MOFFITT. It has remained fairly constant.

Mr. HAYWORTH. Again, to follow up on my colleague from California's concerns, granted that even as you stand to take responsibility-and I don't mean to put words in the mouth of my colleague from California who is quite articulate and can speak for himself.

But to prevent future problems like this and to come to grips with the problems that we have today, and even mindful of time constraints here, as you assess the situation which you inherited, as you assess the discrepancies, the inconsistencies of treatmentas the Chairman said in his opening statement, the fact that it just seems that for many sectors we have not gotten the full story on this syndrome.

What do you believe could have been done differently from the outset that would have avoided the problems we're seeing now?