Prepared Statement By Kenneth S. Apfel Commissioner Of Social
Security
Before The House Committee On Ways And Means Subcommittee On
Social Security
Subject - Information Technology Enhancements
July
29, 1999 Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to testify about the Social Security
Administration's (SSA) progress on implementing information technology
initiatives. These initiatives are critically important when we consider
that our ability to manage our workloads now--and in the future--rests on
our ability to use technology extensively and effectively, and I am proud
of SSA's achievements in this area.
It is clear technology has been, and will continue to be indispensable
to SSA's success in achieving the goals set forth in the Agency Strategic
Plan. The success of goals such as the ability to deliver
customer-responsive, world class service, to make SSA program management
the best in the business, with zero tolerance for fraud and abuse, and to
be an employer that values and invests in each employee, is directly
linked to SSA's ability to apply advances in technology. As you yourself
have noted, Mr. Chairman, computers will play a critical role in our
ability to process benefit applications, pay benefits timely, and guard
against fraud.
From 1992 through 1999, SSA has spent $4.3 billion on information
technology to support its programs. These costs include funds spent from
the Information Technology Systems budget, the automation investment fund,
and salaries and expenses of information technology personnel. My
testimony today will focus on how we have invested those resources and
what benefits have been returned as a result of those investments. The
areas I will discuss today are: SSA's preparedness for the Year 2000;
automation of our disability processes; a project to provide our employees
with workstations with the capability to process claims and respond to
customer inquiries (also known as the Intelligent Workstation/Local Area
Network or IWS/LAN project);and issuance of Social Security Statements
(formerly known as Personal Earnings and Benefit Estimate Statements, or
PEBES).
Year 2000
Preparing for the change of century date--from 1999 to 2000--is one of
the biggest challenges ever to face the technology industry. At SSA our
national computer center maintains and operates hundreds of
mission-critical systems supported by over 35 million lines of in- house
computer code, as well as hundreds of commercial off-the-shelf vendor
products that had to be reviewed and changed where necessary to ensure
that January 2000 payments will be made correctly and on time to the
nearly 50 million Social Security and Supplemental Security Income (SSI)
beneficiaries who could be affected by the Year 2000 (or Y2K) changeover.
I want to thank the Subcommittee for holding this hearing and for your
efforts in making the public aware of SSA's progress to make sure that we
will pay benefits timely and that SSA's system will function as it should.
As I testified before the Ways and Means Committee in February, SSA's
benefit payment system is Year 2000 compliant. As we like to say, "We are
Y2K OK." We have worked closely with the Treasury Department, Federal
Reserve, and the Postal Service to ensure that Social Security and
Supplemental Security Income (SSI) checks and direct deposit payments for
January will be paid on time. Since October 1998, payments for both Social
Security and SSI programs have been made with Year 2000-compliant systems
at both SSA and Treasury.
We worked with the State Disability Determination Services (DDS) to
make sure that the 55 State DDSs that have automated systems to support
the disability determinationprocess are Year 2000 compliant. I am happy to
report that as of January 1999 all of the State DDS systems are Year 2000
compliant, tested, and implemented.
We recognize that it is not enough for SSA to be Year 2000 compliant if
our trading partners are not ready. We have worked very closely with all
of our trading partners. I am pleased to report that all outgoing data
exchanges are Year 2000 compliant and implemented. All but three of our
incoming data exchanges are compliant and implemented. The remaining three
are in testing and will be implemented in early August 1999.
We have worked hard to make sure that all of our mission critical
systems are Year 2000 compliant, and now we are taking steps to make sure
that we do not introduce possible date defects into these systems.
Whenever a system that has been Year 2000 certified is changed due to
legislation or other requirements, we are recertifying the system to make
sure it is still Year 2000 compliant. In addition, beginning this month we
have instituted a moratorium on installation of commercial off-the-shelf
software and mainframe products, and we will impose a similar moratorium
in September for discretionary changes to our own software. The
moratoriums will be in place through March 2000.
We have developed a detailed strategy that comprises the comprehensive
set of actions that will be executed during the last days of 1999 and the
first days of 2000. The strategy also includes the activities leading up
to the critical century rollover date, such as identification of key
personnel involved, preparation of facilities checklists, establishment of
the Y2K command center, a schedule for testing all systems over the
weekend, and other activities. Implementation of the strategy will ensure,
to the extent possible, that SSA's facilities and systems will be fully
operational on January 3, 2000--the firstbusiness day of the new century.
That is, service to the public and our trading partners will continue
without interruption due to the change of century date.
Finally, we recognize that our system depends on infrastructure
services, such as the power grid or the telecommunications industry and
third parties, which are beyond our control. In March 1998, SSA completed
its Y2K Business Continuity and Contingency Plan, which is updated
quarterly. The plan identifies potential risks to Agency business
processes, ways to mitigate each risk, and strategies to ensure continuity
of operations.
As part of the plan, we have in place local plans for each of our field
offices, teleservice centers, processing centers, hearings offices, and
State DDSs. We have also developed contingency plans for benefit payment
and delivery. We continue to work closely with the Treasury Department and
the Federal Reserve to identify any Year 2000 issues that might affect
direct deposit payments. While we have not identified any so far, ira
problem should occur in January, the Treasury Department will quickly
issue a replacement Social Security check, and SSA offices will provide
emergency payment services to beneficiaries with critical needs. I do not
consider Social Security's job done until timely and correct benefits are
in the hands of all of our beneficiaries.
I know that we are all concerned about ensuring that all beneficiaries
are paid on time, but I want to be sure to urge you to resist proposals to
make the January 2000 Social Security benefit payment in December 1999.
After a thorough review of the pros and cons of making payments early, the
Administration determined that such action is not necessary given the
readiness of agency payment systems and business continuity and
contingency plans.We believe that there are risks associated with making
payments early.
Such actions could easily be interpreted by the public as an indicator
of the government's inability to make automated payments in January 2000.
Such a signal could prove disastrous if citizens decide to withdraw their
currency in anticipation of a disruption in benefits or other payments, or
try to cancel electronic payments and revert to check payments. At this
point, the damage that could result from public overreaction could be far
more serious than technology risks resulting from potential Year 2000
problems. Moreover, providing early payments in December could require the
government and industry to make additional programming changes to account
for the payments with the requisite testing of those systems and would
raise a number of difficult tax policy issues if there were a move to
extend early payments of other transactions in the public or private
sector beyond simply Social Security payments.
IWS/LAN Project
As a part of our strategic goal of delivering customer-responsive,
world class service and our strategy for providing employees ready access
to the information they need to serve the public as described in SSA's
Strategic Plan, SSA initiated the IWS/LAN project. As you know, Mr.
Chairman, the Strategic Plan paints a broad picture of SSA's future, as
well as our means and strategies to achieve our long-range goals. SSA's
business approach to providing world-class service while workloads grow
relies on business process and information technology improvements, such
as IWS/LAN. This technology is key to our business strategy because it
provides employees with state-of-the-art tools to serve the public and it
opens up exciting new possibilities for doing business with our customers
in the future.This project establishes a national computer network
including desktop computer workstations for all SSA and DDS employees
supported by appropriate communications and software systems. This
technology is critical in taking claims efficiently and providing online
service to national 800-number callers. This project also reflects SSA's
conviction that employees deserve a professional environment in which they
can readily access information enabling them to increase productivity and
to provide better service to the public. SSA's strategic goal--to be an
employer that values and invests in each employee, relies in part on
providing such tools and training needed for high quality performance.
In 1995, at the time Social Security became an independent agency, one
of our first undertakings was the implementation and distribution of this
new computer equipment. SSA has accomplished what many said could not be
done. I am happy to report that we have successfully installed more than
75,000 workstations and 1,742 local area networks in SSA and State DDS
offices throughout the country. To achieve this, we installed the new
equipment in 75 offices per month, which was a major undertaking, as all
installations had to be done on the weekends. I am particularly proud that
these installations were accomplished without any disruption to our
ability to serve the public.
SSA is currently in the process of acquiring an additional 6,900
workstations and 275 local area networks to complete the installation for
all employees. This project is one of the largest information technology
initiatives ever undertaken in the Federal government.
The IWS/LAN project provides the enabling infrastructure for many of
the technologybased initiatives that SSA is implementing. It provides a
standardized platform and architecture that now exists throughout SSA and
the DDSs and our hearings and appeals offices, which I described earlier.
In addition, the accomplishments of IWS/LAN pave the way for our ability
to provide service electronically and exploit emerging technologies to
improve service to SSA's customers.
Our redesigned title II system is a major investment that has enabled
us to do our job more efficiently. That technology has allowed us to
improve the services we provide, as well as the manner in which we provide
those services. When the public comes in to file a claim for Social
Security or Supplemental Security Income benefits, their claims are now
processed faster and with greater accuracy than ever before. We are able
to handle more than 70 million telephone calls per year to our 800 number
by using automated responses to our customers, as well as by using
technology that allows our employees to quickly locate necessary
information. Our streamlined process for reporting W-2s allows us to
provide more timely and accurate feedback to our nation's employers.
Finally, we are now making use of the Internet to provide our customers
with a wide range of SSA services. And, we are in the process of
converting our processing centers from paperbound processing to paperless,
electronic processing, which will make these offices more efficient, less
costly to operate and will provide better services.
Automation of Disability Process
In 1992, SSA began an ambitious software development project, the
Reengineered Disability System (RDS), to provide an automated disability
case processing system. The primary goal of RDS was to improve service to
our disability clients, by reducing processing time and providing a
framework for more consistent and uniform disability decisions.Our initial
plan was to develop a single system that would support all the SSA
components involved in the disability process. That includes our
nationwide network of field offices, the 55 State DDSs and our hearings
and appeals offices. We developed a prototype system and implemented it in
the pilot SSA field offices in Virginia and the Federal DDS in our
Baltimore headquarters. While we achieved some success in the pilot, we
ran into significant performance problems.
Because of these performance problems, we felt it would be prudent to
obtain an independent evaluation of our pilot system. We delayed further
pilot implementation and contracted with Booz-Allen and Hamilton to
evaluate the RDS process and recommend options for proceeding.
Based on the contractor's recommendations, we are changing the way we
will deploy automation to the disability process. Rather than replace all
of the existing DDS systems with one central system, we will build on the
strengths of the existing software systems in the DDSs, and link them
electronically to an automated field office disability system, based on
the RDS system we piloted in the Virginia offices. We are now calling this
approach eDIB.
RDS was a very large initiative that required a substantial early
investment to build the hardware and software infrastructure needed to
support the prototype system. From 1992 through 1999, SSA invested a total
of $4.3 billion in information technology investments; we spent a little
over $71 million on this project. Roughly, one half of this $71 million
investment continues to be applicable to the new strategy recommended by
the independent review. Included in this is the automated system which
will be used in SSAfield offices to strengthen the disability application
process and enhance its cost effectiveness. The remaining half is the
price we have paid to learn a number of valuable lessons in how to manage
the risks associated with deploying this type of technology throughout SSA
and the 55 DDSs.
Our new strategy will focus on working with the DDSs to build on their
systems, providing more flexibility in the process and recognizing
differences in case processing among the States. As with our successes
with IWS/LAN and Y2K, SSA needs to continue to strive to apply advances in
information technology to improve our disability claims process, and to do
so in a way that manages the risk inherent in any technology improvements.
Mr. Chairman, let me illustrate the reason why we must automate the
current disability claims process. If you were to walk into one of our
offices today to file a disability claim, the SSA representative would
complete a paper questionnaire to document information about your
disability. The form includes doctors' names and addresses, medications
you take, tests you have had performed, documentation of your daily
activities, and other detailed medical information. Depending on your
individual circumstances, the form might need to be supplemented by
additional information concerning your vocational history. Once this was
completed, we would need to assemble the folder and mail the information
to the State DDS.
Compare that with the improvements an automated process would provide
us and which will be facilitated by the software I mentioned earlier in my
testimony. All of the information needed for the claims application will
be entered electronically by the SSA interviewer using the work station
and transmitted electronically to the State DDS. Wewill eliminate the
mailing time delays. We will reduce the need to recontact the disability
applicant because the system would assure that all questions are answered
and readable. Information technology will give us a quicker, more
efficient process and provide much better customer service.
An important facet of the new disability process revolves around our
efforts in working with the medical community to use advanced technology
to efficiently obtain an exchange of medical evidence. As you know,
difficulties in obtaining medical records have a critical impact on our
ability to make timely and accurate decisions on disability claims.
Our efforts in this area are focused on enabling providers to
electronically transmit medical evidence quickly and securely. The ability
to receive this evidence electronically will facilitate a number of steps
during the disability process resulting in significant customer service
improvements.
Technology improvements will also be invaluable as we work to improve
the hearings process, which is a key performance indicator of our
strategic plan goal to provide customer-responsive, world-class service.
Our hearings office improvements initiative relies on enhanced automation
and management data collection and analysis. This will facilitate the
monitoring and tracking of case processing and development steps;
facilitate the transfer of case-related information; help ensure the
completeness of case development and analysis; and increase the efficiency
of highly variable labor- intensive functions such as scheduling.
SSA and its State partners remain committed to the common goal of
providing automation to improve the processing of disability claims. We
plan to follow a strategy that will manage the risks involved in this
initiative. By making incremental changes, bycarefully developing and
evaluating our prototypes before they are put into production, and by
making modest investments that build on our existing infrastructure, I am
confident we will be able to significantly improve the way we manage the
disability claims process.
Social Security Statements
One of SSA's basic responsibilities to the public is to help Americans
understand Social Security and its importance to them and their families.
As part of our public education efforts, SSA has been issuing earnings and
benefit estimate statements to the public since 1988. And, as I mentioned
at the beginning of my testimony, our Strategic Plan identifies
strengthening public understanding of our Social Security programs as one
of our five Agency Strategic goals.
So far, more than 37 million people have requested and received
earnings and benefit statements--formerly known as Personal Earnings and
Benefit Estimate Statements (PEBES). In amendments to the Social Security
Act in 1989 and 1990, Congress provided that SSA was to phase-in issuing
PEBES by issuing them to all workers aged 60 or over in FY 1995; in FY
1996 through FY 1999 to individuals who reach age 60 in those years; and
annually to all covered workers aged 25 and older beginning in FY 2000. In
addition to the PEBES mailing required by law, SSA sent PEBES to
increasingly younger individuals in advance of the schedule in the law.
SSA sent a PEBES to workers aged 40 and older--about 73 million
people--between September 1995 and March 1999.The statements we will begin
to mail in October--the largest customized mailing ever undertaken by the
federal government--will be our newly-designed Social Security Statement
which, like its PEBES predecessor, provides estimates of Social Security
retirement, disability, and survivors benefits that workers and their
families could be eligible to receive now and in the future. The automatic
mailings will take place at a rate of about half a million Statements per
business day, with about 10 million issued each month. Workers can expect
to receive their Statement each year about three months before their
birthday.
SSA's computer based recordkeeping and information technology
improvements will allow us to produce and mail the statements for about 56
cents each This is a considerable achievement when we consider that, when
we began issuing PEBES in 1988, there were private vendors producing their
own version of benefit estimate statements for individuals and charging
them a fee of $10 or more.
SSA redesigned the PEBES format and language to make it easier to read
and understand. We tested four prototypes with focus groups in three
different age groups (ages 25-35, 36-50, and over 50). Additional public
input was obtained through a mail survey of 16,000 randomly selected
individuals from the same age groups. Focus group and mail survey
participants alike overwhelmingly found the redesigned statement an
improvement over PEBES.
I am pleased to report that the results of a recent Gallup survey,
undertaken at SSA's request, revealed that individuals who had received a
statement had a significantly increased basic understanding of Social
Security. The survey also found that the individuals responding had an
increased understanding of some important basic featuresof Social
Security. This relationship validates the performance measures we use to
track our progress in meeting our "Public Understanding" strategic goal:
we track both the increasing number of PEBES we send to the public and the
increasing public knowledge about our programs.
The information in the Statement provides workers with an easy way to
determine whether their earnings (or self-employment income) are
accurately posted on their Social Security record. This is important
because the amount of a worker's future benefits will be based on his or
her earnings record. The Statement tells how to correct inaccurately
posted earnings.
We encourage workers to use the Statement to plan for their financial
future. Workers can use the Statement to better plan for their financial
needs when they retire, or if they become disabled or die and leave
survivors.
Conclusion
As I said at the beginning, Mr. Chairman, SSA's ability to use
technology and make systems improvements will be critical to our success
as an Agency, given the workloads we will face. I am proud to report that
SSA was one of only two Government agencies to receive an A grade in
management of information technology from the Government Performance
Project from the Alan K. Campbell Public Affairs Institute of Syracuse
University's Maxwell School of Citizenship and Public Affairs.Use of
technology has already enabled SSA to improve significantly the service it
provides to the American people, and I would like to cite a few examples
to illustrate this point:
- In 1982, it took 6 weeks for a person to receive a Social Security
card from SSA. Now it takes 5 days.
- In 1982, it took 39 months to post annual wage reports to workers'
earnings records. Now, this task is completed in 6 months.
- In 1982, it took four years to perform annual recomputations for
beneficiaries entitled to higher benefits. Now this is done in 6 months.
- In 1982, SSA needed three weeks of computer processing time to
calculate annual cost-of-living increases. Now, this done in 24 hours.
- In 1982, it took 15 days to issue an emergency replacement payment.
This is done now in 5 days.
I am pleased with these achievements, but I believe that SSA can do
better. In time, we believe the investments in automation technology that
SSA has made in recent years will be vitally important in enabling SSA to
manage the increasing workloads it will experience in coming years.
As we look to the future, access to data will be vitally important to
SSA's future plans to improve program integrity. For this purpose, the
Administration supports the House-passed bipartisan "Foster Care
Independence Act of 1999" (H.R. 1802), which includes provisions for data
matches, and I would like to commend the Committee, Mr. Chairman, for your
efforts on this bill. H.R. 1802 expands the pool of data available for
making SSI eligibility and payment determinations by requiring frequent
SSA matches with the Health Care Financing Administration and by
facilitating electronic exchanges of information from financial
institutions about financial assets owned by SSI applicants and
beneficiaries. It is data matches, such as these, that will help SSA
continuously guard the integrity of our programs.
Throughout its almost 65-year history, Social Security has made a
difference in the lives of Americans, and we have a responsibility to be
careful stewards of our programs both now and as we move into the 21 st
century. As demonstrated in our Agency Strategic Plan, we have ambitious
goals, and I am proud of those computer systems achievements which will
provide the framework for us to achieve them. I look forward to working
closely with the members of this Subcommittee in that spirit on these
important endeavors, and would be happy to answer any questions you might
have.
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