<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:93734.wais]
SOCIAL SECURITY ADMINISTRATION SERVICE DELIVERY BUDGET PLAN
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JULY 24, 2003
__________
Serial No. 108-37
__________
Printed for the use of the Committee on Ways and Means
97-734 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM MCCRERY, Louisiana JIM MCDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
JERRY WELLER, Illinois MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
SCOTT MCINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON SOCIAL SECURITY
E. CLAY SHAW, JR., Florida, Chairman
SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia BENJAMIN L. CARDIN, Maryland
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri XAVIER BECERRA, California
RON LEWIS, Kentucky STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of July 17, 2003 announcing the hearing................. 1
WITNESSES
Social Security Administration, Hon. Jo Anne B. Barnhart,
Commissioner................................................... 6
U.S. General Accounting Office, Robert E. Robertson, Director,
Education, Workforce, and Income Security Issues............... 37
U.S. General Accounting Office, Linda D. Koontz, Director,
Information Management Issues.................................. 50
______
Consortium for Citizens with Disabilities, Work Incentives
Implementation Task Force, and Paralyzed Veterans of America,
Susan Prokop................................................... 62
SUBMISSIONS FOR THE RECORD
National Association of Disability Examiners, Madison, WI,
Theresa Klubertanz, statement and attachments.................. 90
National Council of Social Security Administration Field
Operations Locals, and American Federation of Government
Employees, Social Security General Committee, Witold
Skwierczynski, statement....................................... 96
Social Security Administration, Office of Hearings and Appeals,
and National Treasury Employees Union, James A. Hill, statement 102
Tubbs Jones, Hon. Stephanie, a Representative in Congress from
the State of Ohio, statement................................... 105
SOCIAL SECURITY ADMINISTRATION SERVICE DELIVERY BUDGET PLAN
----------
THURSDAY, JULY 24, 2003
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:00 a.m., in
room B-318, Rayburn House Office Building, Hon. E. Clay Shaw,
Jr. (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
July 17, 2003
SS-4
Hearing on Social Security Administration Service Delivery Budget Plan
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on the Social Security
Administration's (SSA) Service Delivery Budget Plan. The hearing will
take place on Thursday, July 24, 2003, in room B-318 of the Rayburn
House Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only.
Also, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee or for inclusion in the printed record of the hearing.
BACKGROUND:
The SSA Service Delivery Budget Plan is a 5-year plan submitted to
the Office of Management and Budget with the Agency's fiscal year 2004
request. Integrated with the 5-year Strategic Plan, the plan provides a
comprehensive framework to address the challenges facing the Agency,
and improve public service. For fiscal year 2004, the President's
Budget requests $8.5 billion for administrative expenses of the SSA, an
increase of 8.2 percent from last year. These funds will be used to
deliver almost $525 billion in benefits for the following programs:
Old-Age and Survivors Insurance, Disability Insurance (DI), and
Supplemental Security Income (SSI).
The Service Delivery Budget Plan calls for the SSA's 63,000
employees nationwide to continue to provide a high level of service to
Americans by paying benefits to more than 50 million people each month,
processing more than 5 million claims for benefits, issuing 16 million
new and replacement Social Security cards, posting 265 million earnings
items to workers' earnings records, and handling 54 million phone
calls. These core workloads continue to grow each year and will
increase significantly with the aging of the baby boom generation.
In addition to keeping up with growing core workloads, the Agency
faces several other major challenges including:
Improving the DI and SSI Disability Claims Process. These
programs face tremendous backlogs to the point where the SSA
estimates that individuals who pursue their disability claim
through all levels of Agency appeal wait an average of 1,153
days for a final decision. The Service Delivery Budget Plan
aims to eliminate backlogs altogether and also includes the
Commissioner's plans to move to an electronic disability
folder. Use of an electronic folder would help to reduce
backlogs by eliminating time spent locating, mailing, and
organizing paper folders as a disability case moves through the
system. In addition, the Service Delivery Budget Plan calls for
the Commissioner to provide additional recommendations this
year to improve the timeliness and accuracy of the disability
process.
Furthering Implementation of the Ticket to Work Program. The
Service Delivery Budget Plan supports activities authorized by
the Ticket to Work and Work Incentives Improvement Act of 1999
(P.L. 106-170) with the goal of increasing the number of
persons with disabilities who work.
Improving Payment Accuracy. The Service Delivery Budget Plan
reaffirms the SSA's commitment to protecting the integrity of
the trust funds and the general fund by avoiding erroneous
payments, combating fraud, and seeking efficiencies. The
President's Budget request supports this commitment by
earmarking not less than $1.4 billion for continuing disability
reviews and overpayment actions.
Combating Social Security Number Misuse. The Service Delivery
Budget Plan provides for the strengthening of enumeration
policy and procedures to prevent those with criminal intent
from obtaining and using Social Security numbers and cards.
In announcing the hearing, Chairman Shaw stated, ``Each payday,
America's workers send a portion of their hard-earned wages to Social
Security. In return, they are promised income protection for themselves
and their families in the event of retirement, disability, or death.
Workers rightly expect and deserve a responsive SSA. This hearing will
highlight the amount of investment needed to effectively run the Agency
and expected returns.''
FOCUS OF THE HEARING:
The Subcommittee will examine the key challenges facing the SSA,
and how the Agency's Service Delivery Budget Plan addresses those
challenges.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to
(202) 225-2610, by the close of business, Thursday, August 7, 2003.
Those filing written statements who wish to have their statements
distributed to the press and interested public at the hearing should
deliver their 200 copies to the Subcommittee on Social Security in room
B-316 Rayburn House Office Building, in an open and searchable package
48 hours before the hearing. The U.S. Capitol Police will refuse
sealed-packaged deliveries to all House Office Buildings.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to
(202) 225-2610, in WordPerfect or MS Word format and MUST NOT exceed a
total of 10 pages including attachments. Witnesses are advised that the
Committee will rely on electronic submissions for printing the official
hearing record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. Any statements must include a list of all clients, persons, or
organizations on whose behalf the witness appears. A supplemental sheet
must accompany each statement listing the name, company, address,
telephone and fax numbers of each witness.
Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
accommodation needs in general (including availability of Committee
materials in alternative formats) may be directed to the Committee as
noted above.
<F-dash>
Chairman SHAW. Good morning. We're in good moods today,
having been up until about 3:00 a.m. this morning, so be
patient with all of us. Today our Subcommittee welcomes once
again the Commissioner of Social Security, Jo Anne Barnhart, to
review the agency's Service Delivery Budget Plan. This plan is
a welcomed result of the Commissioner's comprehensive review of
the Social Security Administration (SSA). The 5-year Service
Delivery Budget Plan was submitted to the Office of Management
and Budget (OMB) with the agency's fiscal year 2004 budget
request. Integrated with the 5-year strategic plan, the Service
Delivery Budget Plan provides a framework to address the
challenges facing the SSA and to improve public service. In
fiscal year 2004, the agency expects to process more than 5
million claims for benefits, issue 16 million new and
replacement Social Security cards, process 265 million earnings
items for workers' earnings records, answer 54 million
telephone calls, and pay monthly benefits to more than 50
million people. You did volunteer for this job, didn't you? To
date, the 77,000 employees of the SSA and State disability
determination services have worked to process these growing
workloads expeditiously and with care. The agency's continued
commitment to providing a high level of service is evidenced
through the Service Delivery Budget Plan. Social Security's
disability programs pose a great challenge. Backlogs have
reached the point where individuals who pursue their disability
claims through all level of agency appeal wait for their final
decision an average of 1,153 days. That is over 3 years. We all
agree, this is quite unacceptable.
As summarized in this Service Delivery Budget Plan, the
Commissioner plans to improve service provided to individuals
with disabilities by eliminating the backlog at all initial and
appeals levels by the end of fiscal year 2008. This will reduce
the average processing time from the said 1,153 days to about
700 days for individuals going through all appellate levels. A
key to achieving these goals is the Accelerated Electronic
Disability (AeDib) Initiative which moves the agency from a
paper folder to an electronic disability folder by as early as
January 2004. Other challenges addressed in the Service
Delivery Budget Plan include improving program stewardship by
eliminating billions of dollars in erroneous program payments,
strengthening the integrity of the Social Security Number, and
continued implementation of the Ticket to Work Program. The
President's commitment to the SSA is clear. His request for
$8.5 billion for agency expenses reflects an increase of 8.2
percent from last year, among the highest increases, for all
Federal agencies; but for the SSA to implement this much-needed
program improvement, Congress must enact the President's budget
request. Today, we will also hear from the U.S. General
Accounting Office (GAO), which will provide its perspective on
the agency's progress in accelerating the Electronic Disability
Initiative and on the importance of continuing disability
reviews. Last, we will hear from Susan Prokop of the Social
Security Task Force of the Consortium of Citizens with
Disabilities. She will comment on program improvements needed
to ensure a fair and timely process so that individuals with
disabilities receive the benefits that they desperately need.
Each payday our Nation's workers send a portion of their hard-
earned wages to Social Security in return for future promised
benefits. Today we will learn how their investment will be used
to provide the responsive service they rightly expect and
deserve. Ms. Barnhart, welcome once again to the Committee. We
will, of course, as you know, have your full statement made a
part of the record. At this point, we will hear from Mr.
Pomeroy.
[The opening statement of Chairman Shaw follows:]
Opening Statement of the Honorable E. Clay Shaw, Jr., Chairman, and a
Representative in Congress from the State of Florida
Good morning. Today our Subcommittee welcomes the Commissioner of
Social Security, Jo Anne Barnhart, to review the agency's Service
Delivery Budget Plan. This Plan is a welcome result of the
Commissioner's comprehensive review of the Social Security
Administration.
The five-year Service Delivery Budget Plan was submitted to the
Office of Management and Budget with the agency's fiscal year 2004
budget request. Integrated with the 5-year Strategic Plan, the Service
Delivery Budget Plan provides a framework to address the challenges
facing the Social Security Administration and to improve public
service.
In fiscal year 2004, the agency expects to: process more than 5
million claims for benefits; issue 16 million new and replacement
Social Security cards; process 265 million earnings items for workers'
earnings records; answer 54 million phone calls; and pay monthly
benefits to more than 50 million people.
To date, the 77,000 employees of the Social Security Administration
and State Disability Determination Services have worked to process
these growing workloads expeditiously and with care. The agency's
continuing commitment to providing a high level of service is evidenced
through the Service Delivery Budget Plan.
Social Security's disability programs pose great challenges.
Backlogs have reached the point where individuals who pursue their
disability claim through all levels of agency appeal wait for their
final decision an average of 1,153 days--that's over 3 years. We all
agree this is unacceptable.
As summarized in the Service Delivery Budget Plan, the Commissioner
plans to improve service provided to individuals with disabilities by
eliminating backlogs at all initial and appeals levels by the end of
fiscal year 2008. This will reduce the average processing time from
1,153 days to about 700 days. A key to achieving these goals is the
accelerated electronic disability initiative, which moves the agency
from a paper folder to an electronic disability folder by as early as
January 2004.
Other challenges addressed in the Service Delivery Budget Plan
include improving program stewardship by eliminating billions of
dollars in erroneous program payments, strengthening the integrity of
the Social Security number, and continued implementation of the Ticket
to Work program.
The President's commitment to the Social Security Administration is
clear. His request for $8.5 billion for agency expenses reflects an
increase of 8.2 percent from last year, among the highest increase for
all Federal agencies. But for the Social Security Administration to
implement these much needed program improvements, Congress must enact
the President's Budget request.
Today, we will also hear from the General Accounting Office, who
will provide its perspective on the agency's progress in accelerating
the electronic disability initiative and on the importance of
Continuing Disability Reviews.
Lastly, we will hear from Susan Prokop of the Social Security Task
Force of the Consortium of Citizens with disabilities. She will comment
on program improvements needed to ensure a fair and timely process so
that individuals with disabilities receive the benefits they so
desperately need.
Each payday, our nation's workers send a portion of their hard-
earned wages to Social Security in return for future promised benefits.
Today we will learn how their investment will be used to provide the
responsive service they rightly expect and deserve.
<F-dash>
Mr. POMEROY. Mr. Chairman, thank you. I make these comments
on behalf of myself and our Ranking Member, Mr. Matsui. I thank
you, Mr. Chairman, for the series of hearings you have
conducted as Chairman, helping us understand the administrative
complexities and difficulties they face in terms of making this
program work. It certainly has impressed upon me the critical
need for adequate resources of the SSA. I also want to join you
in commending Commissioner Barnhart for her 5-year Service
Delivery Budget Plan targeted at getting rid of the disability
backlog. It is, as you mentioned, absolutely unconscionable
that we are having severely disabled workers wait months to
years before receiving benefits. I congratulate the
Commissioner because getting that 8 percent funding increase
through the OMB in the fiscal year 2004 budget was an
extraordinary accomplishment. We have seen a lot of
disappointed agency heads that have come out the OMB process
short of what they thought they needed, and whether or not you
got exactly what you were shooting for, this is a substantial
budget commitment by the Administration. Unfortunately, often
Congress is trying to add back to avoid disruption of services.
This is a case where Congress is dropping the ball, cutting
$168 million from the Commissioner's request in the
appropriations mark. These funds are desperately needed if we
are going to continue to reduce the waiting time for disability
applicants and keep ahead of the growing workloads. As I have
learned through the Chairman's hearings, I am concerned about
where we are going in terms of the impending retirement of the
baby-boomers.
In addition, with adequate funding, the whole workforce
adequacy in terms of do we have enough people to get the job
done has been a real question that has been made clear through
the series of hearings. You put forward 1,300 new positions in
your budget. I believe it is absolutely essential, we are
blowing up some big bureaucracy, we are trying to bring this
back to what we need in order to do the task the agency has
been assigned. We have a choice. We can increase staff,
increase capacity to handle the workload; or we have people
that qualify for benefits who need the benefits, deserve the
benefits, not getting the benefits because they are lost in the
adjudication backlog. I appreciate also that you have looked at
your business processes and are always trying to eke out that
greater level of efficiency. I am pleased to see that is a
component of your budget plan. We have got to work in
partnership, Congress, and you as Commissioner, everyone in the
administration of the Social Security program, including the
disability component of the program, and so we will certainly
work to try to get that additional funding as this bill
continues to go through the appropriations process. I look
forward to your testimony and the testimony of the next panel.
Thank you again, Mr. Chairman, for convening this hearing.
Chairman SHAW. Thank you. Ms. Barnhart.
STATEMENT OF THE HONORABLE JO ANNE B. BARNHART, COMMISSIONER,
SOCIAL SECURITY ADMINISTRATION
Ms. BARNHART. Thank you, Mr. Chairman, and Members of the
Subcommittee. Thank you very much for inviting me today to have
this opportunity to discuss the SSA's initiatives to improve
our service delivery, as well as the challenges that continue
to face our programs. When I appeared before this Committee as
the new Commissioner of the SSA, I outlined my priorities for
the agency, what we call the four S's inside the agency:
stewardship, solvency, staff, and service. As you have
discussed, SSA's Service Delivery Budget Plan establishes
ambitious, but I believe attainable, goals to faithfully serve
the American people. As you know, the plan was developed in
large part based upon the analysis that we did during our
comprehensive review of the disability determination process.
As you have both said, with adequate resources, as provided for
in the President's fiscal year 2004 budget, SSA can accomplish
the service delivery plan which is keeping up with growing core
workloads, eliminating backlogs, processing special workloads,
making service and stewardship investments to build a
technology infrastructure for the 21st century, and maintaining
program integrity through dedicated funding for that purpose. I
would like to take this opportunity to thank you, Mr. Chairman,
Mr. Matsui in his absence, and the other Members of the
Subcommittee for your help, advice, and support during the past
year. I thank you, not only on behalf of myself, but all of the
men and women of the SSA who are striving daily to provide the
kind of service that every claimant, every beneficiary, every
member of the American public expects and deserves.
After 20 months on this job, I want Members to know that I
continue to be impressed by the dedication of the employees of
the SSA. Mr. Chairman, I would like to go on record at this
point to say, when I discuss SSA employees, I consider this a
collective term, and it includes not only our Federal Social
Security employees, but also the State disability determination
service workers who work providing service, making disability
determinations, and conducting Continuing Disability Reviews
(CDRs) throughout this country. Our Disability Determination
Services (DDSs) are an integral part of the SSA team, and I
want to make sure that their efforts are recognized, too, as we
move ahead. Because of the hard work of our employees, last
year we received a 5-percent increase in productivity. It was
actually 5.2 percent. For anyone who has ever tried to increase
productivity in a large organization, they would tell you that
is a pretty remarkable productivity increase in 1 year. From
the removal of the Social Security Income (SSI) program from
GAO's high-risk list to scoring a green on the President's
management agenda, to lowering the average time that it takes
to get a decision on an appeal of a hearing decision by 157
days as of May 2003, the people of SSA are working hard to meet
their responsibilities as good public stewards. The average
processing time for an initial disability decision is down,
initial claims pending are fewer, despite an increase in
receipts that we experienced in fiscal year 2002 and continue
to experience this year, and I am pleased to say that we are
completely caught up with transcription and copying of cases,
which enables us to transmit case materials to the Federal
courts in a timely manner. The agency has received numerous
awards recognizing our leadership in computer security,
financial management, and ethics programs.
I believe our progress over this past year is significant.
Yet I realize, and all of the employees of SSA realize, we
still have a lot of work to do to get where we would like to
be. The third and final phase of the Ticket to Work Program
will roll out this fall, and at this point we have not achieved
the hopes that we hoped for, but we remain optimistic about the
program's potential. I know the Chairman has particular
concerns related to employment networks. I assure you I have
the same concerns, and I and the staff are working to address
those concerns regarding employment networks, and make the
process more user-friendly. We have taken steps to strengthen
the integrity of our enumeration process, and we are on
schedule to begin rolling out our electronic disability system.
We are also continuing our service delivery assessment.
Currently our service delivery team is examining operational
workloads that are other than disability claims. Last year, I
spoke about disability claims, this year the assessment is
continuing into other operational workloads, and that is no
small task as the charts to my left show. You have paper
handouts of this, Mr. Chairman. For the audience, I wanted them
to see what we are talking about.
[The information follows:]
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Performance Indicators and FYTD Performance
------------------------------------------------------------------------
Through May FY
Performance Indicator 2003
------------------------------------------------------------------------
Initial disability claims processed 1,677,146
------------------------------------------------------------------------
Hearings processed 364,174
------------------------------------------------------------------------
RSI claims processed 2,212,397
------------------------------------------------------------------------
800 number calls handled 35,800,000
------------------------------------------------------------------------
SSI non-disability redeterminations 1,637,192
------------------------------------------------------------------------
Periodic CDRs processed 954,084
------------------------------------------------------------------------
Annual earnings items processed 219,158,793
------------------------------------------------------------------------
SSN requests processed 11,553,535
------------------------------------------------------------------------
Initial disability claims average processing time (in 99.2
days)
------------------------------------------------------------------------
Hearings average processing time (in days) 341
------------------------------------------------------------------------
Decisions on appeals of hearings average processing 319
time (in days)
------------------------------------------------------------------------
Initial disability claims pending 574,073
------------------------------------------------------------------------
Hearings pending 572,928
------------------------------------------------------------------------
Performance Indicator Comparison 2001-2003
------------------------------------------------------------------------
FY 2003
Performance Indicator FY 2001 FY 2002 Goal
------------------------------------------------------------------------
Initial disability claims 2,166,623 2,376,572 2,498,000
processed
------------------------------------------------------------------------
Hearings processed 465,228 532,106 602,000
------------------------------------------------------------------------
RSI claims processed 3,092,743 3,265,473 3,229,000
------------------------------------------------------------------------
800 number calls handled 59,300,000 51,800,000 55,000,000
------------------------------------------------------------------------
SSI non-disability 2,315,856 2,311,499 2,455,000
redeterminations
------------------------------------------------------------------------
Periodic CDRs processed 1,762,517 1,586,091 1,129,000
------------------------------------------------------------------------
Annual earnings items processed 274,427,394 266,777,009 260,000,000
------------------------------------------------------------------------
SSN requests processed 18,179,115 17,679,490 16,000,000
------------------------------------------------------------------------
Initial disability claims average 106.1 104.0 104
processing time (in days)
------------------------------------------------------------------------
Hearings average processing time 308 336 352
(in days)
------------------------------------------------------------------------
Decisions on appeals of hearings 447 412 300
average processing time (in
days)
------------------------------------------------------------------------
Initial disability claims pending 578,524 592,692 593,000
------------------------------------------------------------------------
Hearings pending 435,904 500,757 587,000
------------------------------------------------------------------------
Performance Indicator Comparison 2001-2003
------------------------------------------------------------------------
Performance FY 2003 Through May
Indicator FY 2001 FY 2002 Goal FY 2003
------------------------------------------------------------------------
Initial disability 2,166,623 2,376,572 2,498,000 1,677,146
claims processed
------------------------------------------------------------------------
Hearings processed 465,228 532,106 602,000 364,174
------------------------------------------------------------------------
RSI claims processed 3,092,743 3,265,473 3,229,000 2,212,397
------------------------------------------------------------------------
800 number calls 59,300,000 51,800,000 55,000,000 35,800,000
handled
------------------------------------------------------------------------
SSI non-disability 2,315,856 2,311,499 2,455,000 1,637,192
redeterminations
------------------------------------------------------------------------
Periodic CDRs 1,762,517 1,586,091 1,129,000 954,084
processed
------------------------------------------------------------------------
Annual earnings 274,427,394 266,777,009 260,000,000 219,158,793
items processed
------------------------------------------------------------------------
SSN requests 18,179,115 17,679,490 16,000,000 11,553,535
processed
------------------------------------------------------------------------
Initial disability 106.1 104.0 104 99.2
claims average
processing time (in
days)
------------------------------------------------------------------------
Hearings average 308 336 352 341
processing time (in
days)
------------------------------------------------------------------------
Decisions on appeals 447 412 300 319
of hearings average
processing time (in
days)
------------------------------------------------------------------------
Initial disability 578,524 592,692 593,000 574,073
claims pending
------------------------------------------------------------------------
Hearings pending 435,904 500,757 587,000 572,928
------------------------------------------------------------------------
<F-dash>
These charts list 282 operational actions, separate
actions, that are currently being analyzed. The differences
between our previous assessment of the disability process,
which was a step-by-step analysis of a linear process, and
looking at the nondisability claim workload is enormous.
Operational workloads, as you can see, are not linear. They are
individual, isolated, diverse processes that are done,
hundreds, thousands, and in many cases, millions of times a
year. The list of actions that you see there today consist
primarily of what we call post-entitlements actions, actions
that need to be taken after someone is determined for a benefit
of one kind or another at Social Security. They are not all
post-entitlement actions. The workload on the chart comprises
45 percent of the work in the field offices and almost 100
percent of the work done in our processing centers. As you can
imagine, with a list of 282 items, there is a tremendous range
and complexity of these workloads. It can be something as
simple as an address change, or something more difficult and
complex like redeveloping a SSI recipient's income and
resources. Our employees deal with this diverse workload,
changing gears, moving from one thing to another, handling
multiple, multiple demands, every single day.
I believe the assessment of these actions--just as our
analysis of the disability process has helped us do a better
job of targeting improvements in disability, the assessment of
these actions can allow us a way to figure out how to better
manage these workloads. In some cases, it may make sense to
combine certain kinds of workloads with certain employees. I do
not know. We have not reached those conclusions yet, but that
is the kind of thing that we are looking at in the next phase
of our service delivery assessment. In an agency that touches
over 95 percent of the people in this country at some point in
their lives, we know what we do on a daily basis is important
and we know how we do it is important. We know that the folders
at our desks represent real people and the work we do has a
direct effect on their lives, and for that reason I join the
men and women of Social Security in pledging to you that we
will continue to work to meet our goals and do our very best to
the meet the challenges of the agency. Again, I appreciate your
holding this hearing. I would like to thank you again for your
support and the support of the entire Subcommittee, and I look
forward to continuing what I consider to be our excellent
working relationship. I would be happy to answer any questions
you or other Members might have.
[The prepared statement of Ms. Barnhart follows:]
Statement of the Honorable Jo Anne B. Barnhart, Commissioner, Social
Security Administration
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me today to discuss the Social Security
Administration's (SSA) initiatives to improve service delivery in the
Social Security and Supplemental Security Income (SSI) programs.
Although it hardly seems possible, it has been more than a year since I
appeared before you as a new Commissioner, and I appreciate the
opportunity to share with you some of our accomplishments in improving
service delivery and discuss how we're addressing the challenges that
face us.
Before I begin, however, I would like to thank you, Mr. Chairman,
Mr. Matsui, and the other members of this Subcommittee, for your help,
advice, and support during the past year. Your support has been vital
in helping us to develop a plan that will improve service and
stewardship. I thank you not only on behalf of myself, but also on
behalf of the men and women of SSA, who strive daily to provide the
kind of service that every claimant, beneficiary, and member of the
public expects and deserves.
Commitment to Service
SSA faces great challenges in providing that service, and as I told
you last year, those challenges are my priorities for action. I remain
committed to meeting the objectives of:
<bullet> Giving the American people the service they deserve;
<bullet> Improving program integrity through sound financial
stewardship;
<bullet> Ensuring the program's financial solvency for future
generations; and
<bullet> Maintaining the quality staff SSA needs to provide the
service and stewardship.
The people of America, who fund the Social Security program through
their payroll tax contributions, and fund SSI through their income tax
payments, expect and deserve well-managed programs providing accurate
payments that safeguard their trust. With adequate planning and
resources, SSA can prepare for the baby boomers by addressing current
backlogs, building a technology infrastructure for the 21st century,
and continuing to develop what I believe to be the best workforce in
government.
Last year, I appeared before you to discuss the many challenges
facing the agency. And I have to tell you today that we still face many
challenges. But, before I discuss the challenges, I'd like to talk
about some of our accomplishments:
<INF><all></INF> In FY 02, it took an average of 412 days to get a
decision on a hearing appeal. In May, that time had dropped to 255
days.
<INF><all></INF> The average processing time for an initial
decision dropped from 106.1 days in 2001 to 99.2 days this year.
<INF><all></INF> At the end of FY 2002, there were 593,000 initial
claims pending. Now there are 18,000 fewer despite an increase in
receipts. We had expected that level to rise to 695,000.
Let me give you another example of the concrete results we've seen.
We must specially prepare cases that are filed in the Federal District
Courts. Because of processing delays, some of our attorneys were being
held in contempt of court. More importantly, claimants couldn't proceed
with their appeals. Our preparation time for these cases has decreased
from 120 days in January 2003 to 29 days for June.
A major part of the problem was the large backlog in hearings case
files waiting for transcription. As of April 14 this year, we were
totally caught up with transcription and copying of cases, and have
processes in place to ensure that we do not allow new backlogs to
accumulate. I recently received a letter from Guy A. Lewis, Director of
the Executive Office for U.S. Attorneys in the U.S. Department of
Justice, recognizing our improvements in this area. Mr. Lewis applauded
our efforts to improve our litigation support and timely transmission
of case materials, which has resulted in a marked decrease in the
number of extensions sought in Social Security cases.
Service Delivery Plan
I am proud of our accomplishments. But, we still have a long way to
go.
The service delivery plan SSA developed last year was in large part
based on a comprehensive analysis of every step in the disability
determination process, an analysis that had never been done before. The
plan outlined very specific, ambitious goals over a five-year period:
<INF><all></INF> Keeping up with growing core workloads;
<INF><all></INF> Processing special workloads;
<INF><all></INF> Working down backlogs;
<INF><all></INF> Maintaining program integrity through dedicated
funding; and
<INF><all></INF> Preparing for the future through service and
stewardship investments.
We're making a start this year, and the increase in the President's
budget request for FY 2004 puts us firmly on the path to meet these
goals.
I am continuing with our service delivery assessment. The current
phase entails thoroughly examining operational workloads other than
disability claims. The difference between disability claims and our
operational workloads is significant. The disability workload analysis
yielded a 25-foot chart mapping out the process. Lengthy as it is, the
disability determination process is linear. But the operational
workloads are many diverse processes. There are 282 other operational
actions, and each of these is done hundreds, thousands and even tens of
millions of times each year.
The list of the activities consists primarily of post-entitlement
actions that comprise virtually the entire workload in SSA's Processing
Centers and at least 45% of the work in field offices. This workload is
comparable to the initial claims workload in terms of time spent on
task. And there is a tremendous range in the complexity of these
workloads. Our dedicated employees have to deal with this range and
variety every day--doing a simple change of address in minutes and then
perhaps spending hours completely redeveloping a Supplemental Security
Income (SSI) recipient's income and resources. We are conducting our
service delivery assessment to develop and implement changes to best
manage this complex and varied workload. These changes will include
both small and incremental improvements as well as changes that are
broader in scope. Collectively, they will help us eliminate backlogs
and improve timeliness and efficiency.
I'd like to turn now to a discussion of some of the areas where we
continue to face challenges.
Improve Disability Process
As I said when I appeared before you last year, there is no single
change that will reduce the time it takes to process disability claims
to an acceptable level. More efficient processing will require many
improvements to achieve the level of service that the public expects
and deserves.
We've already taken a number of short-term actions to reduce the
delays in the hearings process. These include:
<bullet> Including ALJs in early screening for on-the-record
decisions;
<bullet> Creating a law clerk (Attorney Intern) position;
<bullet> Deploying speech recognition technology to hearing
offices;
<bullet> Ending the practice of rotating hearing office
technicians among different positions;
<bullet> Contracting out copying and assembly of case files;
<bullet> Using scanning technology to track and retrieve folders;
<bullet> And as I mentioned earlier eliminating the tape
transcription backlog;
<bullet> And eliminating delays in presenting cases to the U.S.
District Courts.
We are in the process of implementing two other initiatives:
<bullet> Allowing ALJs to issue decisions from the bench
immediately after a hearing; and
<bullet> Expanding video teleconference hearings.
And we are preparing to implement an initiative to digitally record
hearings.
I'd like to give a couple of examples of the effects of some of
these changes. In June 2003, the processing time for cases where a
hearing decision was drafted using speech recognition software was 25
days less than the processing time for other case dispositions in that
month. And using scanning technology in the Office of Appellate
Operations' MegaSite to control incoming folders reduced the processing
time for coding and filing a tub of cases from 4= hours to 30 to 45
minutes.
Reducing Backlogs
It is clear that to significantly improve disability processing
times we must reduce backlogs so that a manageable and appropriate
number of cases are in the pipeline at each stage of appeal. The delays
in the process fall into two basic categories--those that occur because
there is no one available to move the case to the next step, and those
that occur because of delays built into the system. The funding
included in the President's budget for FY 2004 would put us on a path
to eliminate the backlogs through additional staff resources as well as
the means to streamline the process through technological improvements.
As you know, Mr. Chairman, SSA has also been hampered in our
efforts to speed up the appeals process by our inability to hire new
administrative law judges (ALJs). I want to thank you and the other
members of this subcommittee for your efforts in this area. Had it not
been for your efforts to allow us to hire an additional 126 ALJs in
September 2001, our hearing backlogs would be far worse than they are
now. It is our hope that our ability to hire ALJs will be restored
soon.
Accelerating the Electronic Disability Initiative (AeDib)
One major barrier to improving efficiency in the disability
determination process is SSA's continuing reliance on paper folders--
folders that must be located, organized and mailed at every step of the
process. We are well into implementation of the accelerated electronic
disability process, or AeDib. AeDib is a major initiative to move all
SSA components involved in disability claims adjudication or review to
an electronic business process through the use of an electronic
disability folder. This will help eliminate lost folders and repetitive
data entry, because the electronic information can be viewed and used
by other case processing systems in the medical determination and
appeals process.
We will begin rolling out the new electronic process nationally in
January. Next week, we will begin a pilot project in the Raleigh, N.C.
DDS. Pilots also are scheduled to begin in Illinois in August and
California in October. We have already been conducting training at all
three sites. We also are working with the medical community to obtain
universal acceptance of an electronic version of our authorization to
release medical records. This support is crucial if we are to obtain
full advantage of both the automated request for data and the
electronic receipt of medical evidence.
Improvements to the Disability Determination Process
When I appeared before you last year, I told you that we would be
developing longer term proposals for improving the disability
determination process. These would require regulatory or administrative
action. I know that the members of this Subcommittee are awaiting these
proposals, and I hope to be able to present them to you very soon.
Return to Work
The Ticket to Work program to help disability recipients return to
work has been implemented in two-thirds of the states, and we will
begin the third and final phase this fall. We are optimistic about the
program's potential. But, I must tell you that we have not yet achieved
the results we had hoped for. This is not unexpected--any new program
of this magnitude is evolutionary and is likely to encounter
difficulties in the early stages. We are looking at ways to address
some of these difficulties.
For example, we have received feedback from employment networks
(ENs) describing their difficulties in obtaining evidence of work and
earnings after a beneficiary is no longer receiving Federal disability
cash benefits. Based on that feedback, we have developed a new process
for paying employment networks (ENs) that significantly relieves ENs
from the burdens associated with collecting pay stubs.
We also are working with other Federal agencies to promote these
programs that support the employment of people with disabilities.
We have a long way to go. Based on our experience, we will be
making adjustments and modifications as necessary.
Mr. Chairman, the Ticket to Work program would not exist were it
not for the support of you and the other Subcommittee members. I want
to assure you that I remain committed to making the program work
effectively.
The Men and Women of SSA
I started my testimony by telling you some of the things we've
achieved in the past year. We have an excellent workforce, and we could
not have done as much as we have if the men and women of SSA were not
so dedicated to public service. Since I became Commissioner, I've
visited 49 of our local field offices, teleservice centers, hearings
offices and program service centers, and am halfway through a second
set of annual visits to each of our 10 regional offices.
During each visit, I make it a point to meet with employees to get
their perspective and ideas, communicate my vision for the agency, and
make clear my expectations. Each time I have this opportunity, I am
impressed with the talent in our workforce and moved by their
commitment to serving the American people.
Most recently, I've had a series of meetings with all of the
managers in headquarters and as many of the managers from our field
facilities as possible. As part of our plan to handle the agency's
retirement wave, we are engaged in development programs at all levels
of management. These programs will help maintain the leadership
necessary to meet the challenges of the 21st century.
The dedication and commitment of SSA's workforce including, the
state DDS agencies, enabled the agency to achieve a 5% increase in
productivity in 2002, processing thousands more claims than expected.
This put us in a much better position at the beginning of this current
fiscal year, and has helped compensate for funding below the
President's FY 03 budget request.
Even though we have not had the resources to fund the Special
Disability Workload this year, we've made a good start in addressing
the workload. But as the President's FY04 budget provides for having
additional resources to devote to the task, this will allow us to
complete processing these cases much faster than it would otherwise
take.
I have taken steps to shift resources from headquarters to the
front lines, transferring nearly 300 staff positions to direct service
positions and I will continue to redirect additional staff to front
line positions. We also will continue to look for ways to use our
resources more effectively.
But, I must tell you that there are very real consequences when we
have reduced resource levels. For example, while we have kept our
commitment to keep up with initial disability claims this year, to do
that, we had to cut back on the number of continuing disability
reviews--CDRs--which we will conduct this year. Are CDRs important?
Yes, they are, but I had to make a choice. And, with the resources in
the President's 2004 budget request, we can get CDRs back on track next
year.
I've referred several times to the President's 2004 budget request.
I think it's important to note that the size of the increase in
administrative funding included in the budget reflects not only the
President's commitment to ensuring that SSA is able to provide quality
service to the American people, but also his confidence in the agency's
ability to meet its service goals. We earned that confidence through
the hard work and dedication of the men and women of Social Security.
Backed by our quality workforce and sufficient resources, we will
be able to provide the level of service the American people deserve.
The President's FY 2004 budget request would give us 2,275 more work
years which would fund--1,000 more employees in the field, 300 more in
DDS offices, and significantly more overtime for both the field and the
DDS's.
Before I close, I'd like to take just a moment to tell you about
some of our other successes during the past year.
Strengthening the Enumeration Process
The terrorist attacks of September 11, 2001 reinforced the need for
a concerted long-term effort to address Social Security Number (SSN)
misuse and identity theft. We have taken many steps to strengthen our
capability to prevent those with criminal intent from getting SSN
cards.
We have greatly reduced the number of non-work SSNs provided to
non-citizens who are not authorized to work but who need SSNs to
receive drivers' licenses. We are working on a regulation to end
issuance of non-work numbers for that purpose.
Beginning June 1, 2002, SSA began verifying birth records with the
issuing agency for all U.S. born SSN applicants age one or older.
(Under former rules, we verified birth records for all applicants age
18 and older.)
We are expanding our pilot online SSN verification system for
employers from the original 9 employers to 100 employers. This system
holds great promise, but, as you would expect, we are proceeding
carefully to ensure that the system is secure as well as user friendly.
SSA now only assigns SSNs to non-citizens if their documents have
been verified with the Bureau of Citizenship and Immigration Services
(BCIS). Under a new Enumeration at Entry (EaE), SSA assigns SSNs and
issues SSN cards based on data collected by the Department of State
(DoS) as part of the process of entry into the U.S. for non-citizens
admitted as ``immigrants.'' (Non-citizens admitted as immigrants are
authorized to work in the U.S.) All consular sites now have the
software for this process.
We also opened a Social Security Card Center in Brooklyn NY in
October, 2002. The Center represents a joint effort of SSA, SSA's
Office of the Inspector General and BCIS to strengthen SSN application
procedures. As of June 2003, the Center has successfully served over
80,000 visitors.
e-Government
SSA has made great strides in the area of e-Government. The number
of wage reports filed electronically instead of through paper W-2 forms
has increased from 68.5 million to 125 million over a period of 2
years. I've already described our progress in moving to an electronic
disability determination process.
Expanding e-Government is one of the five areas included in the
President's Management Agenda. SSA is the lead agency for the federal
government's ``e-Vital'' project. This new e-Government project will
reduce the cost and time it takes to verify birth and death
information. At the E-Gov 2003 Conference and Exposition last month,
SSA received the Pioneer Award in the area of e-Government for the e-
Vital program.
SSA also is providing and encouraging the use of more services on
the internet. Of course, internet services will not replace the in-
person and telephone service for which SSA is so widely known. But it
will provide an alternative for the increasing numbers of Americans who
are doing business via the internet.
Getting to Green
In addition, the Office of Management and Budget has recognized
SSA's work on the five elements of the President's Management Agenda
(PMA). In the most recent PMA scorecard, issued this month, OMB
upgraded our financial management current status from ``yellow'' to
``green.'' SSA also was rated ``green'' in all 5 PMA ``progress''
categories.
Recognition of SSA's Accomplishments
SSI Off High Risk List
The SSI program was put on GAO's ``high risk'' list in 1997. Thanks
to a great deal of work by SSA staff, under the leadership of Deputy
Commissioner James B. Lockhart III, SSA developed and implemented a
corrective action plan to address the problems that led to the ``high
risk'' designation. As you know, GAO removed SSI from the list this
year. But I can assure you that we are continuing to implement the
corrective action plan's ongoing initiatives designed to better manage
SSI and maintain explicit executive accountability for results.
SSA's efforts have been recognized by a number of other groups. We
recently received the 2003 Outstanding Ethics Program Award from the
U.S. Office of Government Ethics.
For the second time in three years, the Social Security
Administration's (SSA's) computer security efforts earned the top grade
for all Federal agencies in an annual Congressional report card. This
report card is issued by the House Government Reform Subcommittee on
Government Efficiency, Financial Management and Intergovernmental
Relations.
SSA has received unqualified opinions on its financial statements
since 1994, an ``A'' in financial management in 2002 from the Federal
Performance Project, and the highest financial management grade, a
``B'', on the 2001 report card from the House Government Reform
Subcommittee on Efficiency, Financial Management and Intergovernmental
Relations. We have also received the AGA Certificate for Excellence in
Accountability Reporting (CEAR) for the past five years.
SSA executives have received individual awards from the Association
of Government Accountants, the Joint Financial Management Improvement
Program, the General Services Administration, the American Society for
Public Administration, and the National Academy of Public
Administration.
Conclusion
In summary, Mr. Chairman, SSA is a great agency. It's gratifying to
see our work recognized by others, and even more gratifying to witness
the progress we've made in the past year towards meeting our goals.
But we know we have a long way to go.
Social Security is so important for so many people's lives that we
must continue to work to provide better service: I have talked a lot
about progress we've made, positive trends, and improved numbers, but I
and everyone at SSA understand that every claim, every benefit payment
represents an individual. Therefore;
<INF><all></INF> As long as one person has to wait 1,100 days to
have a disability claim move through the entire appeals process, we
won't be satisfied;
<INF><all></INF> As long as even one person's case is delayed
because we've lost a folder, we aren't going to be satisfied; and
<INF><all></INF> As long as even one person's benefit amount is
wrong, we won't be satisfied.
I join the men and women of Social Security in pledging to you that
we will pursue our goals of service, stewardship, solvency and
staffing. In the past year, we've built the foundation. The service
delivery plan, with its specific goals and milestones, gives us the
blueprint we need to meet the challenges of the 21st century.
In closing, I would like to thank this Subcommittee again for your
continuing help and support. I look forward to continuing our wonderful
working relationship, and I will be happy to answer any questions you
may have.
<F-dash>
Chairman SHAW. In my opening statement, I said that the
average time to process claims was 1,153 days. My question--is
this an accurate figure? In a typical clear-cut case of SSI,
how long does it take to process that claim?
Ms. BARNHART. In a typical clear-cut case, Mr. Chairman,
our DDSs, I am pleased to say, are making determinations in
99.2 days, as of last month. That is 40 percent, roughly, of
all applicants approved at the DDS stage.
Chairman SHAW. That means the toughest cases are going way
beyond 3 years?
Ms. BARNHART. Absolutely. You are absolutely right. That is
one of the problems with an average. One of the things I often
point out is if you are the person--very few cases are average.
It is just that average is the best measure, giving a general
idea of progress. The charts that I provide show the trend
lines. You are absolutely right, in some cases they are going
well beyond the 3 years. Even though it is a relatively small
portion of cases, if you look at it from a numbers point of
view, it is not a large number, but if you are that person or a
member of that person's family, and you are waiting the 6 or 7
years I have heard about to have your situation resolved,
obviously it can have a very devastating effect.
Chairman SHAW. I know you cannot give this information off
the top of your head, but could you break it down as to how
many cases are decided the first 100 days and how many are
decided the second 100 days. If 90 percent of your cases are
decided within 100 days, which is approximately 3 months--which
is too long, but at least that is certainly better than 3
years--if that 90 percent of your caseload is decided within
that time, then there has to be something terrible happening to
the other cases in order to get that average up to 3 years.
Ms. BARNHART. That is one of the things that I am proudest
of at the agency, where the agency has made great strides, the
appeals council. Once an administrative law judge makes a
decision, if the claimant doesn't agree with the decision and
chooses to appeal it, they appeal to the appeals council. When
I became Commissioner, it took 447 days, on average, to get a
case through the appeals council. As of May 2003, we were at
280 days. Our goal for this fiscal year is to be at 300 days.
We are averaging 319 days for the year so far. We have been
gaining ground every month, and we believe we are going to make
300 days, and maybe below. That is a reduction of 147 days, if
we make that 300-days goal. If you look at where we were last
year in terms of service, we have changed it for people. Today
it is an even larger difference.
Chairman SHAW. Let me correct the record. Staff just put a
note in front of me saying that 40 percent of cases are allowed
at the first step. Which cases are dropped at that period? When
someone comes in, and you say no, do they go on their way?
Ms. BARNHART. Absolutely. We do have what we call the
waterfall chart, and I would be happy to provide that for the
record. We have the typical version that the agency uses, and
then we have the version that I created because I didn't think
the typical version was easy to understand. So, I will send
both. It shows the diminished number of cases going forward at
each step, and percentage of cases.
Chairman SHAW. That would be helpful. Also give us an
indication of how many of those cases at certain points, say
beyond 3 years, end up being found favorable to the client. I
would assume in some cases it would mean that at the hearing
level the initial decision was reversed and the applicant is
paid disability benefits.
[The information follows:]
In fiscal year (FY) 2001, 75% of all disability claims were finally
decided at the initial level, with an average processing time of 106
days. In FY 2002, 79% of all disability claims were finally decided at
the initial level with an average processing time of 104 days. The
attached charts depict this information graphically for FY 2002.
(Percentages derived from the two charts may differ due to rounding.)
It is important to remember that the figure of 1153 days is an average
only for claims that go through all four levels of our decisionmaking
process, after three separate appeals, and includes the periods allowed
to claimants before they have to file an appeal. Around 95% of all
disability claims receive a final decision before this last
administrative step.
As shown on the accompanying FY 2002 waterfall chart, 72% of those
cases that did go through all four levels of our decisionmaking and
appeal process were denied or dismissed, and 25% were remanded for the
administrative law judge to take another look. Only 3% were allowed at
this last step.
FLOW OF CASES THROUGH THE DISABILITY PROCESS
Fiscal Year 2002 Data
In FY 2002, most allowances were made at the initial level (38 out
of 55 that are allowed overall for every 100 cases). Only about 5 cases
out of 100 go beyond the administrative hearings level, and less than 1
per 100 are pursued in Federal court.
[GRAPHIC] [TIFF OMITTED] T3734N.001
[GRAPHIC] [TIFF OMITTED] T3734O.001
<F-dash>
Ms. BARNHART. You are making another important point, and
that is the longer it takes to get through the process, the
more likely it is that the circumstances of the individual
could change if they have a deteriorating condition. It may
well be that the decision initially made to deny was a correct
one under the law and regulations, but if it is 5 or 6 years
later, we are talking about a different person.
Chairman SHAW. Who would buy disability insurance if they
thought that it was going to take 3 to 5 years to get the
relief they need? Wage earners do not have any choice other
than to pay into Social Security, which is, in part, a
disability program. Mr. Pomeroy.
Mr. POMEROY. Commissioner, your testimony reveals an
urgency that you feel to get these administrative processes
working as well as possible and backlogs down as much as
possible. I commend you for that. It also reflects a real focus
on management. There is no silver bullet to working these
backlogs down. You just have to evaluate what you are doing and
reevaluate the priorities and bring your resources to tasks and
try to work better. I commend you. It is very impressive
testimony. You mentioned the reduction in the determination of
claims, and yet that is achieved in a very difficult
environment relative to your ability to hire additional
administrative law judges. Can you give us some information
where that is at today? This government-wide freeze on hiring,
how does that work for an agency?
Ms. BARNHART. I am glad you asked me that question. If you
asked me yesterday, it would be a different answer than today.
I got a phone call from my general counsel after I arrived
here this morning, that the U.S. Circuit Court of Appeals has
ruled in favor of the U.S. Office of Personnel Management and
they will begin working that register, and we should be able to
begin hiring administrative law judges within 6 months on the
outside. That is very important.
Mr. POMEROY. That is a big deal.
Ms. BARNHART. That is a big deal.
Mr. POMEROY. Mr. Chairman, things happen when you convene
these hearings.
Ms. BARNHART. We have been frozen over 2 years--almost 3
years. Let me take an opportunity--that is one place this
Subcommittee was extremely helpful to the agency. As I was
coming into the agency in the fall of 2001, Members on this
Subcommittee worked very hard to get the U.S. Merit Systems
Protection Board to lift the stay so we were able to hire 126
judges. Had we not hired those judges 2 years ago, we would be
in much worse shape than we are now. This is a huge plus for us
that this decision has been made.
Mr. POMEROY. How many have you lost by attrition?
Ms. BARNHART. We lose about 65 a year, and I asked for the
number for last year. In 2002, 33 were due to retirements, 14
were due to going to other jobs, and 4 were due to judges
accepting administrative law judge positions in other Federal
agencies. The typical factors one would think of, the four
going to other Federal agencies is the sort of raiding that
goes on because we have the largest corps of administrative law
judges.
Mr. POMEROY. You have more administrative law judges than
any other agency in government, so when there is a freeze on
new administrative law judges, people poach yours?
Ms. BARNHART. That is exactly right.
Mr. POMEROY. I have this vivid picture in my mind of how
management deals with the hiring freeze, and you need everyone
you have, and you are chasing them down the hall like the
little boy at the end of the movie Shane, ``Don't go, don't
go.'' Now you don't have to do that.
Ms. BARNHART. Exactly.
Mr. POMEROY. How many do you think within a year you might
add back to your staff?
Ms. BARNHART. Right now we have over a thousand
administrative law judges. I believe we have 1,065
administrative law judges; but at any given point in time that
translates into about 960 who are available. We do not count
the managers, the regional chief judges. Also we have a certain
number of judges that are on special assignments and working on
task forces and those kinds of things. We have about 960 or so
that are actually available each day. By my calculations, the
way that I have looked at this is to say if I would really like
to eliminate this growing hearing backlog that we have, and
look at getting it under control in the next 2 years and
eliminating it under 5 years, I have calculated I need 200 more
administrative law judges; and then there are the associated
positions that go with those. In the President's budget, with
the additional workers we have there, if the hearings get
transferred to Medicare eventually--and we are working on a
memorandum of understanding to accomplish that, we in the
President's budget--we get to keep those work years. They
actually left those for us to use to redirect other disability
workloads.
Mr. POMEROY. So, if Congress funds the Administration's
request, which is going to take some fund restoration on the
Senate side, holding that number in conference, but if we get
that done, you will be able to make some real progress?
Ms. BARNHART. That's correct. Not only would we have 1,300
additional work years to put in the field, and I would put
1,000 in our field offices and 300 in the DDSs, I would also be
able to redirect approximately 350 workyears that are currently
used for Medicare hearings to other SSA workloads. If we get
the full funding level, I still would have these additional
workyears for disability because the OMB and the President did
not take the funds for Medicare hearings. That is a very
important point for us because typically if a function moves so
do the funds--but there is a great appreciation and commitment
to getting this disability backlog down. I want to mention
there are approximately 1,000 additional workyears I would use
for increased overtime provided in the President's budget. It
is critically important for us. It would make a huge
difference.
Mr. POMEROY. Thank you.
Chairman SHAW. Mr. Cardin.
Mr. CARDIN. Thank you, Mr. Chairman. This Committee has
consistently supported additional administrative support for
your agency. We have had problems with the Committee on
Appropriations and the Committee on the Budget, but over the
years, on a bipartisan basis, we have believed that you need
the resources necessary to do the job that you have been
mentioning today. I also particularly appreciate you mentioning
the dedication of the workforce. I have an opportunity to visit
frequently, and you have a very dedicated group of public
servants, and I think sometimes they are not really as
appreciated as much as they should be for the hard work that
they do under very difficult circumstances. My question is that
the U.S. Department of Labor-U.S. Department of Health and
Human Services appropriation bill that passed was $165 million
less than the Administration requested, and I certainly hope
that Mr. Pomeroy is correct that we will see some restoration
of that as it moves through the process, but I think it is
important for this Committee to know what would happen if that
budget becomes law.
Ms. BARNHART. If that budget becomes law--I will give some
examples. I imagined that somebody would ask that question
today. It translates into performing 300,000 less initial
claims decisions in disability, or 150,000 less disability
hearings a year. It is significant in terms of very real
workloads. Instead of just under 600,000 disability claims
pending at the end of 2004, we would actually have almost a
million pending. That is what it means. Or, it means that,
instead of having somewhere around 500,000 hearings pending, we
would have roughly 750,000 hearings pending. I can provide the
precise numbers for the record. It is very significant in real
terms.
[The information follows:]
In passing its version of the FY 2004 Departments of Labor, Health
and Human Services, and Education, and Related Agencies appropriation
bill, the House of Representatives reduced the President's budget
request for the Social Security Administration's (SSA) Limitation on
Administrative Expenses (LAE) by $168.2 million. The following examples
are illustrative of the magnitude of the impact of this reduction on
our operations, should it be enacted into law.
<bullet> If applied to initial disability claims, a reduction of
$168.2 million would result in 300,000 fewer claims processed in FY
2004 and therefore an increase in claims pending at end of year. Thus,
at the end of FY 2004, SSA would have 893,000 initial disability claims
pending in the Disability Determination Services, as opposed to 593,000
projected in the President's budget.
<bullet> If applied to hearing workloads, a reduction of $168.2
million would result in 150,000 fewer hearings processed in FY 2004 and
therefore an increase in hearings pending at the end of the year. Thus,
at the end of FY 2004, SSA would have 707,000 SSA hearings pending in
the Office of Hearings and Appeals, as opposed to 557,000 projected in
the President's budget.
<F-dash>
In addition, as I am sure Members of this Committee are
aware, due to the cutback that we had this year, the last-
minute across-the-board cutback that all government agencies
experienced and the absorption of the higher pay raise that we
were not counting on having to cover, we had a reduction of
approximately $80 million this year. What that necessitated was
my making a choice between our CDR workload and our commitment
to conduct disability reviews or processing initial claims. I
made a decision that we were going to do both, but put more
emphasis on processing claims and not let the level of pending
claims grow. Which meant that we were going to do about 200,000
less CDRs than we would like to do. If the $168 million
reduction in funding continues, if we are not able to restore
those funds as the appropriation bill moves through the
process, it means we will not be able to get back on track with
CDRs as quickly as we would like. We would not be able to start
getting back on track. I know this is very important to this
Committee. We had a 7-year plan. We worked and got current with
CDRs. We were not interested in getting back in the hole on
CDRs for the long term. I was doing this as a 1-year situation.
Mr. CARDIN. First, if you increase the disability
determinations, number of cases pending by two-thirds, Mr.
Chairman, I would think that we should let the Committee on
Appropriations know they should increase our budget so we can
put additional caseworkers on in our offices, because we are
going to get a lot more complaints. That is one impact if we do
not restore those funds. Second, I have been on this Committee
long enough to know about the CDR issue, and this is a good
government issue, an issue to make sure that the people who are
entitled get the money. It has been an issue for this Committee
for a long, long period of time. It has been difficult to get
started, and I regret we have had this additional problem
because of resources. It just does not make any sense for us
not to give you the resources that you need in this area to
implement this plan so we have a system that is fair to the
people who really need the help. Thank you, Mr. Chairman.
Chairman SHAW. Thank you. Mr. Hayworth.
Mr. HAYWORTH. Mr. Chairman, thank you. I was going to begin
with a word of praise for the gentleman from North Dakota. I
thought his rendition of the final scene of Shane was
remarkable this morning. With rumors abounding about Jack
Valenti leaving the Motion Picture Association--North Dakota
meets Hollywood, that could be interesting. Not that I
necessarily suggest a change of occupation for my friend from
North Dakota. Commissioner Barnhart, we weren't in a movie, but
it was kind of like Hope and Crosby, On the Road to Tempe,
Arizona, within the last 18 months, if memory serves. Your
visit to Arizona was very much appreciated, as my State was one
of the first States to roll out the Ticket to Work Program. We
have a lot of folks who strongly support the program and
obviously want it to be a success. In your testimony you talk
about a new process for paying employment networks that will
relieve those networks from the burdens associated with
collecting pay stubs. That concern has been brought to my
attention by several of my local employment network providers,
so I am very interested in what you have been doing on this
issue. Could you please elaborate on what the new process is?
Ms. BARNHART. Yes. Specifically, the problem for the
employment networks has been the requirement that they must
provide pay stubs during the beneficiaries' and the
participants' ongoing participation in the labor force and
employment. This is a real issue for the employment networks
because it requires the individual to send them a copy of the
pay stub and then to get it into us, and I guess it is very
time-consuming from an administrative perspective. We looked at
the situation, and what we have come up with is the following.
It will require the employment network to submit one pay stub
at the time the individual goes to work, and then on an going
basis to certify that they know the person is still working. We
will then, through the records we get in terms of wage reports
that are posted every year to people's Social Security numbers,
take the responsibility for reconciling the fact that funds
were paid that actually match what the employment network said.
We are still working out the in-house process, but we are going
to start it, and that way we can do it really through
automation. I think we can use the automated information that
we get and take a great burden off the employment networks.
Quite frankly, this has been a disincentive for employment
networks to enroll in the program. It is my understanding that
as we are trying to market and get more organizations to become
employment networks, they are being told don't do it because
this is a huge administrative burden and look at what you will
be getting into. So, I am trying to remove the disincentive
from participation.
Mr. HAYWORTH. That will help reassure a lot of my folks. I
appreciate you updating us on that. One concern of many
beneficiaries about returning to work is that if they report
their earnings to the SSA, the agency may not accurately keep
track of them, thus leading to overpayments. This fear of
having to repay potentially hundreds or thousands of dollars in
overpayments is a real concern that prevents many individuals
with disabilities from taking that step to return to work.
Again, I would be interested, Commissioner--what steps is the
agency taking to improve how it tracks earning reports and to
reduce incidents of overpayments?
Ms. BARNHART. That has been a huge issue in the agency.
Quite frankly, the lag time between individuals willingly
reporting income that they are earning and it getting posted
into their accounts so we know we need to make adjustments in
benefits--and it does result in these enormous overpayments,
sometimes after a year or 2, and the individual is required to
pay that back through overpayment collection efforts unless we
grant a waiver. I would say that the major factor contributing
to that delay has been a need for additional resources, because
that workload that you have just described is on that list.
That is one of those 282 items that is competing with 281 other
things to get done. I am not saying that it is more important
because it does have a higher priority than many items there,
but for employees who are attempting to get the job done when
there are not enough hours in the day, everything cannot be a
priority. I am not making excuses, but simply explaining. I
think it has been a workload issue for the agency. We are
making it a priority. We are starting to make strides in that
area. I have to tell you, if we do not get the President's
budget request and we are not able to hire 1,300 more people
and have 1,000 more hours in overtime beyond that, it is going
to be difficult for us to get current. That is going to be
looked at in this continuing assessment to figure out how best
to handle that workload. I have asked, is that a workload that
we can do in a centralized fashion? Can we have all those go
one place and somebody just enters them in one place? We are
looking at different ways to handle that.
Mr. HAYWORTH. Commissioner Barnhart, I salute your
enthusiasm, your energy, and your sense of purpose you bring to
your job; thank you very much for your testimony today.
Ms. BARNHART. Thank you. If I may say, our first three
Ticket to Work employees were three individuals from Arizona.
Mr. HAYWORTH. Yes, ma'am, we are very proud of the folks,
and had a chance to visit and follow up with them. The program
is working, and we want to keep it. Work is what it is all
about.
Chairman SHAW. Thank you, Mr. Hayworth. For the record, the
cut that you are concerned about is in the House-passed U.S.
Department of Health and Human Services appropriations bill,
but the Senate Committee-reported bill fully funds the SSA. So,
the cut is all subject to being replenished at this particular
point. Mr. Becerra.
Mr. BECERRA. Thank you, Mr. Chairman. I think the
Chairman's remarks are very important because one side of
Congress has fully funded the President's request and your
request, and hopefully we can get to that point as well in the
House where we will reinstate those $168 million that have been
requested. Commissioner Barnhart, thank you very much. You have
always been very incisive and your folks have been very
responsive in responding to our concerns. I thank you and all
of the folks who work at the SSA. Sometimes we forget to say
thank you. The volume of work you do is tremendous. If people
knew exactly how many cases you have to deal with, and we are
talking about folks who really do depend on this assistance, if
we do not say thank you enough, we do think it. Give me a sense
of what your timeframe is and when we and the advocacy groups
can expect to hear from you on these reforms that you are
continuing to implement. I know you are going to be submitting
something in the fall?
Ms. BARNHART. My hope and intent is to actually brief your
staffs in the very near future. I would like to say a couple of
things if I may. I intend to have a very open process when I
present my recommendations for reforming the process. It is
going to be very important to have all parties involved in the
process from start to finish. That includes the DDSs, our
staff, our field staff, our administrative law judges, our
quality review people, the efficacy community--all interested
parties involved. I intend to do briefings for all those
groups, and also allow time for them to come in and present
their reaction to the proposal. I will start, of course, with
this Committee in Congress, to do that. As I am looking at
these reforms, and as I say, I am very close to being able to
provide the information to you. The driving factor for me is
making the right decision as early in the process as possible.
That is the overriding goal. I like to have a goal when I
start--the theme, the idea. What we are working toward is the
right decision as early in the process as possible, to make
sure, first of all, that people who are obviously disabled get
benefits and are not part of the group waiting for the 1,153
days--and hopefully nobody is waiting 1,153 days. An example of
that would be an action that I am taking right now to change
the regulations related to individuals with Amyotrophic Lateral
Sclerosis (ALS), basically to change our listing to say that
individuals who have ALS, if they cannot work and if they have
a doctor who says that they have ALS, they will be found and
determined disabled at the initial stage of the process as
opposed to having to go all of the way through it, and we will
not be getting into functional capacity issues. That is one of
the goals of my reform.
Mr. BECERRA. Commissioner--and I don't mean to cut you off,
and I would like to hear and have in writing some of those
different reforms--but my time is going to expire if I don't
get a couple of my questions out. If I could ask you about the
electronic disability folder, I know we are going to hear
testimony from the GAO that says we should be cautious in how
we proceed. I think most of us agree that automation does make
us more productive, and we want to help make sure that whatever
automation that we institute within SSA, that it gets us toward
the goal of accelerating the process of completing these
claims. The GAO will point out some concerns that we may be
moving too quickly to send this system nationally for
electronic filing, and I wonder if you can give us your
comments.
Ms. BARNHART. I am very committed to rolling out electronic
disability as soon as possible. When I came into the agency,
electronic disability was on a 7-year plan, and I said we
cannot wait 7 years. When we look at the 1,153 days, it would
be irresponsible to wait 7 years. I said if resources were not
an issue, how long would it take? They said, 23 months. That is
the process that we are working on. It is not that electronic
disability just started being developed a year and a half ago;
they were already doing it. It is simply that I made the
commitment that we would provide the resources and make it a
priority within the agency. I said when I took this job that I
didn't take it to manage the status quo. Clearly as we look
ahead to the future, there are two approaches. One is to
continue doing what we are doing and wait until we have a
system that has been tested for several years and is all tied
up with a bow and delivered. If we do that, then you will be
talking to the next Commissioner of Social Security about why
we do not have an electronic disability program.
Mr. BECERRA. You will make sure that you include the
advocacy groups when going through the process of implementing
the electronic filing program?
Ms. BARNHART. One of the things that I need to make clear
is that we have what I consider a very reasoned rollout
schedule. If I can take just a moment to address that, we are
starting a pilot in North Carolina next week; we are starting a
pilot in Illinois in August; and in California, just outside of
Sacramento, in October. The point of those pilots is a very
specific focus, to test our document management architecture,
which means the scanning of records that will go into the
electronic folder. The rollout of electronic disability
actually is scheduled to begin next January, and we are going
to start in one region, the Atlanta region. We are going to do
one or two States at a time, and we are not going to bring
additional States on until we have worked out the issues.
Anytime you implement a system, there are going to be problems
and issues and glitches. I am trying to structure this so that
they will be manageable so we will hit all of the potential
issues we possibly can hit in our first region rollout. It is a
condensed area; we can have a system SWAT team on the ground to
go out and respond to those issues. We are working very closely
with our DDSs in providing training. I was not aware of GAO's
concerns until I got a fax last night. They had a conference
call with people on my staff informing them what their concerns
were related to the AeDib, so I have not had a chance to look
at it in any great detail. I assure you I will review those
concerns. The one point I want to get across is I think we are
not in a position where we can afford to make a decision to do
nothing. I think our decision is a reasoned, ``yes, there is
some risk,'' but in an agency that touches 95 percent of
Americans, that issues 50 million benefits a year, to the tune
of $450 billion each month, there is risk in everything we do,
every time we walk into our offices and sit down at our desk. I
think this is a calculated risk. I have very talented and
knowledgeable people that have been working for years to begin
this process. I think everybody in the agency is excited about
it. The DDSs have some issues, and we are trying to work
through those. I have made myself personally available and have
set up a system where the head of the National Council of
Disability Determination Directors (NCDDD) has direct access to
someone in my front office, my senior adviser, who is head of
the service delivery budget team. We are trying to make this a
real team effort. I think everyone understands how important it
is for us for the future.
Mr. BECERRA. Thank you.
Chairman SHAW. Mr. Ryan.
Mr. RYAN. Ms. Barnhart, I am from Wisconsin so you probably
now know who I am. We have some real problems. We continue to
see these news articles illustrating the real problems in
certain Social Security offices. Most recently, we learned of
1,400 cases yet to be docketed or entered into the computer
system for case tracking; 700 pieces of incoming mail that had
not been placed in the appropriate case file. Just a few days
ago we were reading about the Chicago regional office where I
think the number is 1,200 cases where you had contractors who
were hired to organize the files were throwing away critical
claimant documents in the recycling bin and then were still
processing these cases. A lot of those people come from
Wisconsin. A lot of those people come from Illinois, all of the
areas the Chicago region tracks. My question is: one, what is
going on? Number two, are we just scratching the surface here?
Is it just 1,200 people who had their claimant pieces of
information thrown away? Were these people denied disability
claims? Were they denied disability claims because of the
missing information? Are we violating people's privacy rights
when we allow these workers to take home this sensitive
information to work on them in their homes without any kinds of
control? My fear is that just this one incident of 1,200 people
may be a sign of a fact that this is systematic. It is a lot
more than 1,200 people where, for one reason or another, you
have contractors throwing away information that is critical to
determining the validity of people's claims or not, whether or
not you have workers taking this sensitive information home,
violating privacy rights. I worry that this one article that we
got from the Chicago regional office last week and a series of
articles that we have gotten about the Milwaukee office are
just the tip of the iceberg. You have a letter from me and our
delegation. It is a fairly lengthy letter, and I will not go
into all of the points that we include in that letter, but I
would appreciate your comments.
Ms. BARNHART. I have the letter, and I am familiar with it.
Let me say first of all, I appreciate your passion and anger
about the situation. What happened in Milwaukee in relation to
the contractors that were performing case files for us was
nothing short of outrageous. Those contracts were immediately
suspended upon learning of it, and I terminated the contracts
once I was able to follow the law in terms of being able to
document the problems and the nonperformance. Actually, I asked
our inspector general to look into that to see if there are any
fraud issues. We are taking action to stop the contract and we
may be taking action against the contractor, whatever we are
legally allowed to do. There were 1,200 cases total, and I have
read all of the press articles several times. One of the things
that has not come out in the press articles is that the
discovery of the 1,200 files where documents were put in the
recycling bin, as well as the incidents that were reported, the
deficiencies in the management of the Milwaukee hearing office,
what did not come out is that we are the ones that found it
out. In every case it was described as an audit. It was not an
outside audit looking at what we were doing, uncovering
something; it was the SSA employees looking, doing checks, to
make sure we are providing the kind of service that we need to
provide. I appreciate having this opportunity to get that on
the record. We are policing ourselves, and I think we deserve
some credit for that. Am I happy that we found the situations
that we found in the management of the Milwaukee hearing office
and the nonperformance and malperformance on the part of
contractors? Absolutely not. I made sure we responded in both
cases. In the Milwaukee hearing office, we sent a team of 35
individuals, 7 on a team for weeks at a time to go in, and we
immediately corrected the issues, the association of the 1,400
documents and getting those files up to speed. We are
absolutely up to date. We are conducting unannounced spot
checks in that office now. I have made a commitment to you and
other members of the delegation that I am going to do a
thorough review of the office on the 1-year anniversary from
our office.
Mr. RYAN. We need your involvement. Originally it was the
Chicago regional office was going to oversee the Milwaukee
office, and now we see all these problems in the Chicago
office.
Ms. BARNHART. You have my involvement and commitment that
we are going to fix the situation. Just yesterday I had a
notice put out to people in the agency indicating that Martin
Gerry, my Deputy Commissioner for Disability and Income
Security Policy, will now have direct supervisory
responsibility for overseeing the Milwaukee hearing operation.
That ensures that there is only one step between that office
and me in terms of knowing what is going on. In terms of the
1,200 cases--there are 1,200 cases the contractors worked.
There were two contractors.
Mr. RYAN. Right.
Ms. BARNHART. There were 1,200 cases that they actually
worked. We don't know at this point, in all candor, if they put
documents for all 1,200 cases in the recycling bin or not. We
are going back looking at every single case. I was just having
a meeting a few days ago on the notices that we are going to
send out to every single claimant, every folder that they
touched.
Mr. RYAN. You are going to contact them?
Ms. BARNHART. Yes, twice. We are going to contact them and
tell them, first of all, if they had a claim moving through at
that time, they need to go back, if they had a hearing, and
make sure that they were satisfied with the result. If not, we
are going to provide an additional hearing opportunity.
Mr. RYAN. Give them an opportunity to re-file the record?
Ms. BARNHART. Absolutely. Anyone who had a hearing and was
denied, we are going to contact them and let them know. We are
assuming that people who had a hearing and were allowed, are
not going to be interested in being contacted. They are going
to be in the initial mailing, saying there may have been a
problem with your folder, but we are not going to contact them
as a result of the decision that they got. I am determined that
we are going to make sure that no claimant is injured as a
result of the outrageous situation that occurred there. As I
say, we have taken steps, we have fired, ended the contract. We
are going to pursue whatever legal action we can. I do want to
say this: that we had quality measures in place. We are going
to reevaluate them. We thought we had good quality measures in
place. The employees of the Milwaukee office as well as the
employees of the regional office are very upset, and they are
just as determined and dedicated. Most of the ideas of how we
fix this problem are coming from them.
Mr. RYAN. You obviously do not have good quality measures
in place, because this happened. We have all this evidence
about shredding of documents and these things. My big concern
is, is it more than 1,200? It is my understanding that it is
1,200 because Social Security employees found these documents
in the recycling bin. Did they throw them away in other trash
bins, and is it 2,500? We do not know the answer to these
questions.
Ms. BARNHART. The information I have is the contractor only
was given 1,200 cases, so the universe for the contractors of
potential cases is 1,200.
Mr. RYAN. Did you have other contractors doing other cases?
Ms. BARNHART. We had some individual contractors but they
were former Social Security employees who were working under
individual contracts. We do quality checks on them as well, but
we haven't had problems there. These were larger contractors.
Mr. RYAN. What about people taking sensitive documents home
with them?
Ms. BARNHART. The reason that was allowed is because we
have, in our bargaining agreement, the ability--it was
negotiated before they came to the agency--the ability for
employees to take folders home. In my personal opinion? I am
not sure that ever should have been allowed. Yet it was. It was
negotiated with the union. It is something, quite frankly, that
I intend to revisit when the union contract is up for renewal.
In the meantime since these individuals are going to be
performing the same responsibilities, the same job as our
employees were, they have to sign agreements of confidentiality
and so forth. So, the determination was made that since they
were doing the same job as the employees who take work home,
because we have employees who take folders home and work at
home as well, that we would do it. Based on this situation, I
said, no longer. We are no longer going to allow contract
workers to take any folders home. As I say, I am going to be
revisiting the whole issue of anybody taking official documents
out of a government office once we renegotiate our contract.
Mr. RYAN. I look forward to seeing your response to all the
other questions in writing as soon as possible. Thank you.
Chairman SHAW. Thank you, Mr. Ryan. There are a couple
other things, the GAO recently added Social Security disability
programs to their high-risk list, based upon what they referred
to as outdated concepts of disability. What is an example of an
outdated concept of disability? What is being done to remove
the disability programs from GAO's high-risk list?
Ms. BARNHART. I think that is a really important point, Mr.
Chairman. In fact, when GAO decided to take that action, I met
with the Comptroller General, with David Walker, precisely to
discuss that issue. He indicated that he was really looking
more in terms of all Federal disability programs. So, the high-
risk list--not only did our disability program move on the
high-risk list, but so did the Veterans Administration and
other disability-related issue programs in the Federal
government. As the Comptroller General explained it to me--and
I do think that there is definitely a point to be made here--we
operate in an environment now that is very different than when
the disability law was originally passed. When disability
benefits first came into being, quite frankly, there was very
little expectation that people with disabilities would go to
work or would want to work. That is--the Americans With
Disabilities Act (P.L. 101-336), I think we celebrate the 10th
anniversary this week, changed all that. It changed it in terms
of the minds of the people with disabilities as well as
employers and people in society. So, I think what the GAO was
suggesting is that within that context, within that framework
that we are operating now, sort of a dynamic time in
disability, we need to relook at how we have constructed our
programs, how we define disability, the kinds of benefits we
offer. It was stressed to me by the Comptroller General that we
were not being placed on the high-risk list as a result of
management. This was not a high-risk management situation like
SSI had been for us. It was really more a wake-up call for the
entire Federal government to say you really need to look at how
your disability programs are structured as you are moving into
the future with people of my generation, the boomers moving
into the disability-prone years particularly.
Chairman SHAW. Speaking of your generation, the baby
boomers, we also have a situation which we looked into a couple
years ago--I don't think we have revisited it in probably 2 or
3 years, the situation is the aging of the Social Security
staff itself. I know that many professions have a problem with
aging. I know in the teaching profession there is a problem.
What are we doing in order to get a better cross-section in age
of the Social Security workers to ensure that when we do have
the baby boomers coming into the program, the agency will be
adequately staffed. This is to say, a little scary.
Ms. BARNHART. It is a very important issue for us. We
anticipate we are going to lose 3,500 people a year for the
next 10 years due to retirements. The average age of the Social
Security employee is 47. The average age of our recruits when I
came into the agency was 36. Last year it was 34. So, we are
actually recruiting some younger people in the agency. We are
working really hard to do that. We completely revamped our
recruitment display materials pitch that we are taking out to
colleges and universities. We are making a real effort to bring
in young people through the Outstanding Scholars Program. I
think we are really being very successful in getting some of
the best and brightest young people coming out of colleges.
Chairman SHAW. Does the agency still have an early
retirement program?
Ms. BARNHART. We have had an active early retirement
program for years at Social Security. I have continued that
practice, absolutely. The one thing I have not done is buyouts,
because I didn't really think that we needed to do buyouts. We
had enough people participating in early out. Frankly, buyouts
cost money, and I have been trying to take every spare penny
and direct it toward additional resources. Yes, we do early
outs. In fact, the use of early outs is what has really
flattened the retirement wave. If we had not allowed early outs
in the last several years in the agency we would have lost a
huge number of people at one time. I call it the retirement
tsunami, this giant wave. As it is, 3,500 people a year is
manageable in terms of recruiting.
Chairman SHAW. Okay. Commissioner Barnhart, thank you so
much for spending this time with us. We always learn a lot. It
is always a treat to have you come and visit with us, exchange
views and ideas, and answer questions of the Congress. Thank
you very much.
Ms. BARNHART. Thank you, Mr. Chairman. I just want to say I
always enjoy coming before the Committee. I enjoy the
discussions we have. I appreciate your support. Many nice
comments were made today--I want to thank all Members of the
Subcommittee for those.
Chairman SHAW. You certainly have support on both sides of
the aisle, I am glad to say. In the atmosphere that is
presently hovering over the Congress, this is a breath of fresh
air. Thank you.
Ms. BARNHART. Thank you, Mr. Chairman.
Chairman SHAW. We now are going to combine the next two
panels. We have Robert E. Robertson who is the Director of
Education and Workforce and Income Security Issues, at the GAO.
We have Linda D. Koontz who is the Director of Information
Management Issues, at the GAO, and we have Susan Prokop, who is
a member of the Task Force on Social Security, Consortium for
Citizens With Disabilities. Again, as with the previous
witness, your full statement will become a part of the record.
We would ask each of you to summarize as you see fit. Also, I
have a request to insert an opening statement into the record
by a Member unable to be here. So, without objection, any
Member of this Committee may insert an opening statement. Mr.
Robertson.
STATEMENT OF ROBERT E. ROBERTSON, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING
OFFICE
Mr. ROBERTSON. Good morning. Do we have a live mike here? I
think we do. It is great to be here this morning to talk about
our examination of SSA's continuing disability review process.
As you are all aware, medical conditions can and do change over
time, and SSA uses these particular reviews to determine
whether or not beneficiaries continue to remain eligible for
the benefits they are receiving. If SSA, for example, finds
that the medical conditions have improved then they are able to
take actions to cease benefits to those individuals. So, it
goes without saying that these particular reviews are a very
important part of SSA's efforts to ensure program integrity,
and it is important that they conduct these reviews in a timely
and efficient manner. What I am going to do is just briefly
summarize four points based on the work that we just completed,
and then I will be ready to answer questions at the appropriate
time. I better put my glasses on as a concession to age here.
First, while SSA recently has worked its way out of a large
backlog of CDRs, in part through targeted funding, it faces a
possibility of yet another backlog in 2003 and beyond. More
specifically, in 1996 the Congress reacted to an enormous
backlog of 4.3 million CDRs by authorizing specific funds to
conduct these reviews over a 7-year period. By 2002, which was
the end of the targeted period of funding, SSA reported that it
was current on its reviews. However, with the expiration of
targeted funds, SSA is at risk of generating another backlog
starting in 2003. One of the factors hampering SSA's ability to
conduct all planned CDRs for this fiscal year was its decision
to reduce the number of reviews it processed pending fiscal
year 2003 funding decisions. This is something the Commissioner
mentioned earlier this morning. Other factors related to the
workload capacity is lower priority given to processing CDRs
relative to processing initial claims. In the coming years, a
CDR backlog could grow due to an expected increase in the
number of initial claims, as well as potential difficulties
with replacing disability examiners who leave through
retirement or attrition. Again, some things that we talked
about earlier this morning.
The second point I would like to make is a very simple and
short point, but I think it is an important one. You got a
sense of that through the Commissioner's testimony earlier
today, and that is that the SSA does take the CDR process very
seriously. It has, for example, refined its statistical
formulas for determining what review method to use, a costly
full medical review or a relatively inexpensive mailer. It has
done a number of other things to increase the cost
effectiveness of the CDR processes; so it does take it
seriously. My third point is that there are opportunities to
further improve the cost effectiveness of the CDR process. For
example, SSA's process for deciding when beneficiaries should
undergo a CDR is not based on a systematic quantitative
evaluation of available information. As a result, some CDRs may
not be performed at the optimal time. Additionally, SSA's
process for determining which method to use in conducting a
CDR--a mailer or full medical review--is not always based on
the best available information. For example, SSA requires a
full medical review for all beneficiaries who, upon entering
the program, are expected to medically improve even if the
current information on certain of those beneficiaries indicates
that improvement is unlikely and that CDR would be better
handled through a much less expensive mailer. Finally, while
the exact magnitude of the problem is unknown, many of the
State DDSs reported that missing or incomplete data hinders
their ability to determine whether medical improvement has
occurred. This, of course, makes it difficult to cease benefits
to individuals who no longer meet eligible standards.
My fourth and final point, which is more of an observation
than anything else, has to do with the relationship of the CDR
process to the Ticket to Work Program, a program that this
Subcommittee is very familiar with. My observation is this: SSA
delays the issuance of tickets to those beneficiaries expected
to medically improve based on the rationale that they will
regain their capacity to work without SSA assistance. However,
this rationale is not very well supported by actual program
experience. In fact, the majority of these beneficiaries are
not found to have medically improved upon the completion of a
CDR. Now, the consequences of this are that some the
beneficiaries who might benefit from return-to-work assistance
have to wait up to 3 years to access services to the ticket
program. The SSA has acknowledged the need to reexamine this
policy and is in the process of doing so. In reexamining the
policy, SSA will have to consider alternatives to better
balance the agency's program stewardship and return-to-work
goals. That concludes my summary statement. I will be happy to
answer questions at the appropriate time. Actually, I should
have mentioned at the outset, that my statement is based on a
report that we have done for you, Mr. Chairman, and it is going
to be released today. A little bit of marketing at the end
here. Thank you.
[The prepared statement of Mr. Robertson follows:]
Statement of Robert E. Robertson, Director, Education, Workforce, and
Income Security Issues, U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss SSA's continuing
disability review (CDR) process. The Disability Insurance (DI) and
Supplemental Security Income (SSI) programs are the largest federal
income programs for disabled individuals, paying about $86 billion to
about 10 million disabled beneficiaries in 2002. These programs have
been growing in recent years and are poised to grow further as the baby
boom generation ages. To help ensure that only eligible beneficiaries
remain on the rolls, the Social Security Administration (SSA) is
required by law to conduct CDRs for all DI beneficiaries and some SSI
disability recipients to determine whether they continue to meet the
disability requirements of the law. In addition, to assist
beneficiaries who want to return to work and leave the disability
rolls, SSA began implementing the Ticket to Work and Self-Sufficiency
Program in 2002. Under this program, beneficiaries are issued a
``ticket,'' or voucher, which they can use to obtain vocational
rehabilitation, employment, or other return-to-work services from an
approved provider of their choice.
Both the CDR process and the ticket program are key aspects of
SSA's effort to improve its service to the public. SSA's Fiscal Year
2004 Service Delivery Budget Plan highlights the importance of CDRs in
achieving the agency's program stewardship objective of improving
payment accuracy in its disability programs. In particular, the plan
discusses the cost-effectiveness of CDRs and the need to keep current
with the CDR workload. The plan also notes SSA's efforts to fully
implement the ticket to work program in order to achieve its objective
of increasing the number of people with disabilities who obtain
employment.
My testimony today focuses on the results of our recently completed
review of SSA's CDR process and of the relationship of this process to
determinations of beneficiary eligibility for assistance under the
ticket program. (In a report issued today,<SUP>[1]</SUP> we discuss the
results of our review in greater detail and provide several
recommendations to the Commissioner of SSA for improving CDR cost-
effectiveness.) More specifically, this testimony discusses: (1) the
impact that expiration of targeted funding for CDR processing could
have on SSA's ability to remain current with the CDR caseload, and the
level of funding that would be needed over the next 5 years to keep the
workload current; (2) opportunities that exist for SSA to improve the
cost-effectiveness of the CDR process; and (3) whether SSA's rationale
for delaying return-to-work and vocational services under the ticket
program for beneficiaries who are expected to medically improve is
supported by program experience. To examine these issues, we reviewed
SSA documents, including the agency's budget request and estimates of
the cost and savings from conducting CDRs. Also, we surveyed 52
Disability Determination Services (DDS) <SUP>[2]</SUP> directors to
assess the potential effect of the expiration of CDR-targeted funding
on DDS operations. Moreover, we analyzed SSA data on CDR outcomes,
reviewed SSA-contracted studies of the CDR process, examined
legislation, regulations, and SSA policy guidance related to CDRs and
the ticket program, and interviewed SSA officials.
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\[1]\ U.S. General Accounting Office, Social Security Disability:
Reviews of Beneficiaries' Disability Status Require Continued Attention
to Achieve Timeliness and Cost-Effectiveness, GAO-03-662 (Washington,
D.C.: July 24, 2003).
\[2]\ SSA contracts with state DDS agencies to determine whether
applicants are disabled.
---------------------------------------------------------------------------
In summary, with the expiration of CDR-targeted funds at the end of
fiscal year 2002, SSA is at risk of generating another CDR backlog. As
of March 2003, SSA was on track to complete about 200,000 less CDRs
than needed to keep its workload current. The expected shortfall is
attributable to several factors, including SSA's decision to reduce the
number of CDRs it processed pending fiscal year 2003 funding decisions.
Based on SSA's cost and workload projections, it would cost a total of
about $4 billion or more over the next 5 years to complete its CDR
workload. Other factors that could affect SSA's ability to keep current
with its CDR workload include DDS staffing difficulties and the lower
priority given to CDRs relative to initial claims. If another large CDR
backlog is generated, SSA is at risk of foregoing cost savings and
compromising the integrity of its disability programs.
While SSA has taken a number of actions over the past decade to
significantly improve the cost-effectiveness of the CDR process,
opportunities remain for SSA to better use information in deciding when
beneficiaries should undergo a CDR and which method to use in
conducting a CDR--a mailed-out questionnaire (``mailer'') or a full
medical review. For example, SSA has not fully studied and pursued the
use of medical treatment data on beneficiaries available from the
Medicare and Medicaid programs despite the potential of these data to
improve SSA's decisions regarding whether to use a mailer or full
medical review to complete a CDR. Also, SSA continues to be hampered in
its CDR decisions by missing or incomplete information on
beneficiaries' case history.
In addition, SSA's rationale for delaying issuance of a ticket to
beneficiaries expected to medically improve, based on the premise that
they will regain their capacity to return to work without SSA
assistance, is not well-supported by program experience. As a result,
some beneficiaries who might otherwise benefit from potentially
valuable return-to-work assistance have to wait up to 3 years to access
services through the ticket program. As SSA reexamines this policy, it
will need to consider alternatives that better balance the agency's
program stewardship and return-to-work goals.
Background
The DI and SSI programs are the two largest federal programs
providing cash assistance to people with disabilities.<SUP>[3]</SUP> In
addition to cash assistance, DI beneficiaries receive Medicare coverage
after they have received cash benefits for 24 months, and in most
cases, receipt of cash benefits makes SSI beneficiaries eligible for
Medicaid benefits. In 2002, SSA paid about $60 billion to 5.5 million
disabled workers.<SUP>[4]</SUP> In addition, about 5.5 million people
with disabilities received about $26 billion in federal SSI cash
benefits.<SUP>[5]</SUP>
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\[3]\ The DI and SSI programs use the same statutory definition of
disability. To meet the definition of disability under these programs,
an individual must have a medically determinable physical or mental
impairment that (1) has lasted or is expected to last at least 1 year
or to result in death and (2) prevents the individual from engaging in
substantial gainful activity (SGA). Individuals are considered to be
engaged in SGA if they have countable earnings above a certain dollar
level. For 2003, SSA considers countable earnings above $800 a month to
be substantial gainful activity for persons who are not blind and above
$1,330 a month for persons who are blind.
\[4]\ Included among these 5.5 million beneficiaries are about 1.2
million beneficiaries who were dually eligible for SSI benefits because
of the low level of their income and resources. In 2002, the DI program
also paid about $6 billion in cash benefits to about 1.7 million
spouses and children of disabled workers.
\[5]\ About 3.9 million of these individuals were working age
adults aged 18 to 64.
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CDR Process
At the time beneficiaries enter the DI or SSI programs, DDSs
determine when beneficiaries will be due for CDRs on the basis of their
potential for medical improvement. Based on SSA regulations, DDSs
classify individuals into one of three medical improvement categories,
called ``diary categories:'' ``medical improvement expected'' (MIE),
``medical improvement possible'' (MIP), or ``medical improvement not
expected'' (MINE). Based on the diary categories, DDSs select a ``diary
date'' for each beneficiary, which is the date that the beneficiary is
scheduled to have a CDR. The diary date is generally within 6 to 18
months if the beneficiary is classified as MIE; <SUP>[6]</SUP> once
every 3 years if classified as MIP; and once every 5 to 7 years if
classified as MINE. Upon completion of a CDR, DDSs reassess the medical
improvement potential of beneficiaries who remain eligible for benefits
to determine the most appropriate medical improvement category and time
frame for conducting the next CDR. Beneficiaries classified as MIE are
not eligible to receive Ticket to Work services until either the
completion of their first CDR, or until they have received benefits for
3 years.
---------------------------------------------------------------------------
\[6]\ Although SSA's policy guidance indicates that CDRs for MIE
beneficiaries should generally be scheduled at intervals of 6 to 18
months, the guidance provides DDS personnel with flexibility to
establish a diary date for any time period between 6 and 36 months.
---------------------------------------------------------------------------
While SSA uses diary categories to determine the timing of CDRs, it
has developed another method, called profiling, to determine the most
cost-effective method of conducting a CDR. Profiling involves the
application of statistical formulas that use data on beneficiary
characteristics contained in SSA's computerized records--such as age,
impairment type, length of time on disability rolls, previous CDR
activity, and reported earnings--to predict the likelihood of medical
improvement and, therefore, of benefit cessation. Through its profiling
formulas, SSA assigns a ``score'' to beneficiaries indicating whether
there is a high, medium, or low likelihood of medical improvement. In
general, beneficiaries with a high score are referred for full medical
reviews--an in-depth assessment of a beneficiaries' medical and
vocational status--while beneficiaries with lower scores are, at least
initially, sent a questionnaire, known as a ``mailer.'' <SUP>[7]</SUP>
The mailer consists of a short list of questions asking beneficiaries
to report information on their medical conditions, treatments, and work
activities. If beneficiaries' responses to a mailer indicate possible
improvement in medical condition or vocational status, SSA may refer
these individuals for a full medical review. However, in most cases,
SSA decides that a full medical review is not warranted and that
benefits should be continued.
---------------------------------------------------------------------------
\[7]\ While SSA uses mailers primarily for beneficiaries with low
profile scores, the agency has recently expanded its use of mailers to
some beneficiaries with medium and high profile scores.
---------------------------------------------------------------------------
In contrast to mailers, full medical reviews are labor intensive
and expensive. These reviews generally involve an interview of
beneficiaries at SSA field offices, a review of beneficiaries' medical
records by DDS personnel, and, if necessary, medical or psychological
examinations with consulting physicians outside the DDS.<SUP>[8]</SUP>
---------------------------------------------------------------------------
\[8]\ SSA field offices perform the initial processing of CDRs to
determine if beneficiaries meet nonmedical requirements. They then
transfer the cases to DDSs for medical determinations.
---------------------------------------------------------------------------
CDR Backlog
As of fiscal year 1996, about 4.3 million CDRs were due or overdue.
In response, the Congress, in the Contract with America Advancement Act
of 1996 (Pub. L. No. 104-121), authorized a total of about $4.1 billion
to fund a 7-year plan to eliminate the CDR backlog. In addition, the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(Pub. L. No. 104-193) required SSA to conduct CDRs on several
beneficiary groups, such as low birth weight babies and authorized an
additional $250 million for CDRs in fiscal years 1997 and 1998. The
actual amount appropriated during the 7-year period, about $3.68
billion, was less than the amount authorized in 1996.
SSA reported to the Congress in its fiscal year 2000 CDR report
that in that year, the agency became current with the backlog of CDRs
for all DI beneficiaries. SSA officials indicated to us that although
they are in the midst of preparing the final statistics for its fiscal
year 2002 CDR report, it became current with the backlog of CDRs for
all SSI beneficiaries by the end of fiscal year 2002.
CDR Cost-Effectiveness
Since first implementing the profiling and mailer processes in the
early 1990s, SSA has continued its efforts to improve the cost-
effectiveness of the CDR process. Most notably, SSA has refined the
statistical formulas used in profiling to identify which method--mailer
or full medical review--should be used to conduct the CDR. According to
SSA officials and studies of the profiling process, these improvements
have led to some beneficiaries receiving a mailer who otherwise would
have received a full medical review, thereby allowing SSA to reduce the
overall cost of the CDR process. Conversely, by improving SSA's ability
to identify beneficiaries who are likely to medically improve, these
refinements have also helped the agency better ensure that it is
conducting full medical reviews--and ceasing benefits--when
appropriate.<SUP>[9]</SUP> In addition to improvements in its profiling
process, SSA has also implemented other CDR process improvements such
as introducing an automated review of mailers.
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\[9]\ According to SSA's study of its profiling model, the agency's
recent improvements in statistical profiling have resulted in hundreds
of millions of dollars in annual savings from being better able to
identify and cease the benefits of individuals who have a relatively
high likelihood of medical improvement.
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End of Targeted Funding and Other Issues Could Contribute to Another
Backlog, Threatening Cost Savings
In the midst of its first year following the cessation of CDR-
targeted funds, SSA appears to be developing another CDR backlog. By
the end of fiscal year 2003, on the basis of SSA's current projections,
the agency will likely face a backlog of 200,000 CDRs. SSA attributes
the mounting backlog to the management decisions it made at the
beginning of the fiscal year during budget deliberations, as well as
the need to process a larger than expected workload of initial
disability applications. SSA has estimated that it will need a total of
about $4 billion to process its projected CDR workload over the next 5
years, although an updated estimate, expected to be available later
this year, will likely show a higher cost as the disability rolls
continue to expand. Aside from funding issues, DDSs reported that
challenges associated with processing initial disability applications
and maintaining enough disability examiners could jeopardize their
ability to stay current with the CDR workload over the next few years.
If another large CDR backlog is generated, SSA is at risk of foregoing
cost-savings, thereby compromising the integrity of its disability
programs.
CDR Backlog Likely to Reemerge
At the end of March 2003--six months after the expiration of
separate authorized CDR funding--SSA was on a pace to generate a CDR
backlog by the end of the current fiscal year. In its fiscal year 2003
budget justification, SSA indicated that it needed to process about
1.38 million CDRs during fiscal year 2003 to stay current with its CDR
workload. Yet, SSA expects to process a total of 1.18 million CDRs, if
not more, by the end of the fiscal year.<SUP>[10]</SUP> By the end of
March 2003--the midpoint of the fiscal year--SSA had processed about
539,000 CDRs. To reach the 1.18 million end-year revised total, SSA
will need to process CDRs during the second half of the fiscal year at
a pace similar to that achieved during the first 6 months of the fiscal
year.<SUP>[11]</SUP> Nevertheless, while it appears that SSA should be
able to achieve this outcome, by the end of fiscal year 2003, it will
have accumulated a backlog of 200,000 CDRs. However, according to SSA
officials, most of the backlogged claims will consist of SSI adult
CDRs, which lead to lower long-term savings than DI CDRs and do not
have the same stringent statutory requirements that apply to DI CDRs.
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\[10]\ On May 14, 2003, SSA released its revised final performance
plan for fiscal year 2003. The plan projects that SSA will process
1,129,000 CDRs during fiscal year 2003. SSA also expects to process an
additional 20,000 CDRs initiated for reasons other than maturation of
the scheduled diary date (e.g., a third party reports that the
individual may no longer be disabled).
\[11]\ SSA indicated that 710,000 CDRs had been processed nearing
the end of April 2003. This year-to-date completion rate positions SSA
to complete all 1.18 million CDRs.
---------------------------------------------------------------------------
SSA officials attributed the delay in obtaining a fiscal year 2003
budget as the main factor in hampering their ability to conduct all of
the planned CDRs for the fiscal year.<SUP>[12]</SUP> Because of
concerns that the fiscal year 2003 appropriations would not support CDR
activity at the fiscal year 2002 level, SSA reduced the number of CDRs
it sent to DDS officials for processing as well as froze DDS hiring and
overtime pay. SSA officials recognize that a hiring freeze can have a
longer-term impact because it disrupts the normal replacement of
disability examiners lost through attrition. SSA officials explained
that disability examiners generally do not increase overall
productivity when first hired and could, in fact, initially decrease
productivity because experienced examiners may devote some of their
time to training these new examiners. SSA officials noted that it
generally takes 1 to 2 years before disability examiners become
proficient.
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\[12]\ The federal government had operated under a series of
continuing resolutions from the beginning of the fiscal year through
February 20, 2003. A continuing resolution is legislation that may be
enacted to provide budget authority for agencies to continue in
operation when the Congress and the President have not completed action
on appropriations by the beginning of the fiscal year.
---------------------------------------------------------------------------
SSA's management strategy to cut back on the number of CDRs it
processed during the delays in the fiscal year 2003 budget process
reflects the agency's higher priority for processing of initial
applications for disability benefits. Specifically, while SSA cut back
on the number of CDRs, no similar action was reported with DI and SSI
initial eligibility decision making. SSA officials indicated that the
application rate for disability benefits increased during the beginning
months of fiscal year 2003, further affecting its ability to stay
current with CDRs. SSA officials told us that although SSA sets a goal
to process all CDRs and initial applications, initial eligibility
decisions are given highest priority due to political pressure for
getting disability benefits to people in a timely manner. DDSs,
likewise, place a greater priority on processing initial applications.
Three-fourths (75 percent) of directors said processing initial
disability claims were a top priority relative to CDRs, whereas far
fewer directors (23 percent) said that processing initial claims and
CDRs were equal priorities.
SSA has recently proposed an approach to avoid this competition
between CDRs and initial claims. In SSA's fiscal year 2004 budget
request, the Commissioner requested that almost $1.5 billion be
earmarked for three activities that could provide a return on
investment--CDRs, SSI nondisability redeterminations,<SUP>[13]</SUP>
and overpayment workloads. While we did not review the sufficiency of
the level of this request, the earmarking of funds for activities such
as CDRs could help SSA keep current with these activities. For example,
if the number of initial applications for disability benefits continues
to increase over the next several years, holding apart the necessary
funds for CDRs could be a prudent measure.
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\[13]\ To determine whether beneficiaries remain financially
eligible for SSI benefits after the initial assessment, SSA conducts
nondisability redeterminations to verify eligibility factors such as
income, resources, and living arrangements. Beneficiaries are reviewed
at least once every 6 years, but reviews may be more frequent if SSA
determines that changes in eligibility are likely.
---------------------------------------------------------------------------
SSA has indicated in its annual CDR reports, as well as in its
performance and accountability report, that its ability to complete all
CDRs as they become due in the future is dependent upon adequate
funding. In 2000, SSA estimated that a total of about $4 billion was
needed to process the CDR workload during the 5-year period between
fiscal year 2004 and 2008 (see table 1). SSA based these ``rough
estimates'' on cost and workload projections available at that time.
SSA expects to release updated workload and cost projections in the
summer of 2003. The updated numbers for the fiscal year 2004 to 2008
period will likely be higher than the past estimate for this time
period because of the recent growth in the disability rolls.
Table 1: Estimated CDR Activities, Fiscal Year 2004-08
------------------------------------------------------------------------
CDRs to be
processed during CDR expenses Cessations a (in
Fiscal year year (in (dollars in thousands)
thousands) millions)
------------------------------------------------------------------------
2004 1,637 $716 61
------------------------------------------------------------------------
2005 1,682 $729 59
------------------------------------------------------------------------
2006 1,632 $787 61
------------------------------------------------------------------------
2007 1,769 $896 65
------------------------------------------------------------------------
2008 1,793 $857 62
------------------------------------------------------------------------
Source: SSA's Office of the Chief Actuary, May 2000 estimates.
a Estimated ultimate cessations after all appeals.
DDS Directors Expressed Concerns about Their Ability to Meet Future CDR
Workload
Several of the issues that have contributed to the pending fiscal
year 2003 CDR backlog will also appear, in the views of DDS directors,
in the future. First, nearly all directors expect the number of initial
disability claims to exceed those in the past. Most DDS directors have
a strategy in place to deal with this rising initial claims workload,
but all expect increased initial claims to negatively affect their
ability to process their CDR workload (see table 2). Second, most
directors expect to experience difficulties in maintaining an adequate
level of staffing, caused by many examiners leaving and difficulties
finding replacements. Most DDSs who anticipate facing these staffing
challenges reported that they have strategies in place to manage them.
Nevertheless, nearly all believe that these staffing issues will
negatively impact their ability to stay current with their expected CDR
workloads.
Table 2: DDS Directors' Reported Likelihood, If Any, of Experiencing an
Event That Jeopardizes Meeting CDR Workload During Fiscal Year 2004 and
2005
------------------------------------------------------------------------
Numbers in percent
-------------------------------------------------------------------------
Not at all Somewhat
Event likely likely Very likely
------------------------------------------------------------------------
Higher number of initial 2 35 63
disability claims than in past
(n=51)
------------------------------------------------------------------------
State budget shortfalls causing 25 29 47
constraints (e.g., personnel
restrictions) (n=49)
------------------------------------------------------------------------
Difficulties hiring disability 28 31 41
examiners (n=51)
------------------------------------------------------------------------
High turnover of disability 35 51 14
examiners due to reasons other
than retirement (n=51)
------------------------------------------------------------------------
Large number of disability 39 39 22
examiner retirements (n=51)
------------------------------------------------------------------------
Source: GAO survey of DDS directors, February 2003.
Cost Savings and Program Integrity Could Be Jeopardized If CDR Backlog
Grows Again
To the extent that funding, staffing, and other issues limit SSA's
ability to process its CDR workload, the full realization of CDR cost
savings could be in jeopardy. SSA maintains that the return on
investment from CDR activities is high. In fact, SSA's most recent
annual CDR report to the Congress summarizes its average CDR cost-
effectiveness during fiscal year 1996 to 2000 at about $11 returned for
every $1 spent on CDRs.<SUP>[14]</SUP> SSA has noted, however, that
such rates of return are unlikely to be maintained because as SSA works
down the backlog and beneficiaries come up for their second and third
CDRs, the agency does not expect as many cessations and, therefore, the
cost-benefit ratio could decline. Nevertheless, since the Congress'
provision of dedicated CDR funding starting in fiscal year 1996, SSA
has reported completing millions of CDRs that will lead to long-term
savings ranging from about $2 billion to $5.2 billion.<SUP>[15]</SUP>
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\[14]\ SSA calculated its annual cost-effectiveness ratios by
dividing the estimated present value of total lifetime benefits saved
with respect to CDR cessations (including Old Age, Survivors, and
Disability Insurance, SSI, Medicare, and Medicaid savings) by the
dollar amount spent on periodic CDRs in a given year. SSA points out
that the ratios should be considered an approximation because, for
example, costs do not include the costs of appeals processed after the
end of a given year. However, SSA officials also noted that the
administrative costs for CDRs in a given year include the costs of
appeals of CDR cessations in prior years which are processed in that
year.
\[15]\ Although we did not independently verify these savings
estimates, we discussed how SSA made its calculations and believe its
approach is reasonable. To estimate long-term savings, SSA calculated
the value of the reduction in both cash and medical insurance coverage
that otherwise would have been provided to individuals whose benefits
were ceased following the completion of a CDR. SSA factored in the
effect of appealed cases: SSA did not count savings from those
beneficiaries who were initially found ineligible for continued
benefits but whose cessations were later successfully appealed.
Moreover, SSA officials told us that to estimate savings over 10 years,
they took into account the likelihood that some individuals whose
benefits were ceased through a CDR would likely have left the
disability rolls through death, retirement, and other reasons
pertaining to eligibility.
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In addition to a favorable return on investment, SSA's CDR
activities help protect DI and SSI program integrity. Keeping current
with the CDR workload can help build and retain public confidence that
only qualified individuals are receiving disability benefits. In
addition, it helps protect the programs' fiscal integrity and allows
SSA to meet its financial stewardship responsibilities. To the extent
the agency falls behind in conducting CDRs, a CDR backlog undermines
these positive outcomes.
Further Opportunities Exist for SSA to Improve CDR Cost-Effectiveness
While SSA has taken a number of actions over the past decade to
significantly improve the cost-effectiveness of the CDR process,
opportunities remain for SSA to better use program information in CDR
decision making. While DDS personnel study available information on
beneficiaries to decide when they should undergo a CDR, they do not
conduct a systematic analysis of this information. As a result, CDRs
may not be conducted at the optimal time. Also, SSA's process for
determining what method to use for a CDR--mailer or full medical
review--is not always based on the best information available. In
addition, SSA has not fully studied and pursued the use of medical
treatment data on beneficiaries available from the Medicare and
Medicaid programs despite the potential of these data to improve SSA's
selection of the most appropriate CDR method. Finally, SSA continues to
be hampered in its CDR decisions by missing or incomplete information
on beneficiaries' case history, which may prevent SSA from ceasing
benefits for some individuals who no longer meet eligibility standards.
Decisions on Timing of CDRs Are Not Based on Systematic Analysis of
Available Information
While DDS personnel review available information on beneficiaries
to establish a diary date indicating when beneficiaries should undergo
a CDR, they do not conduct a systematic analysis of this information.
Diary decisions are inherently complex because DDS personnel must
assess a beneficiary's likelihood of medical improvement and how such
medical improvement will affect that person's ability to work. Based on
these judgments, beneficiaries are placed in a diary category
indicating either that medical improvement is ``expected,''
``possible,'' or ``not expected.'' DDS personnel then assign a diary
date that corresponds with the diary category; the more likely a
beneficiary is to medically improve, the earlier the diary date.
Although SSA has established guidance for DDS personnel on diary
date decisions, SSA officials told us that, ultimately, such decisions
are difficult to make and are based on the judgment of the DDS staff.
An SSA contracted study of the diary process found that this process is
often subjective and that the setting of diary categories and dates is
``almost an afterthought'' once the case file is developed and a
disability determination has been made. SSA's study identified
shortcomings in the diary date process. For example, most beneficiaries
assigned to the diary category indicating they are expected to
medically improve are not found to have improved when a CDR is
conducted. Our analysis of SSA data indicates that between 1998 and
2002, only about 5 percent of beneficiaries in the MIE category
<SUP>[16]</SUP> were found to have medically improved to the point of
being able to work again.
---------------------------------------------------------------------------
\[16]\ This figure includes all MIE beneficiaries--those who have
already undergone a CDR as well as those who have not yet had a CDR.
---------------------------------------------------------------------------
SSA's diary process study indicated that diary predictions of
medical improvement could be substantially improved through the use of
statistical modeling techniques similar to those used in the CDR
profiling process that SSA uses to determine whether a mailer or a full
medical review is needed. The study noted that this systematic,
quantitative approach to assigning diary categories and dates would
likely enhance disability program efficiency by reducing the number of
CDRs that do not result in benefit cessation.<SUP>[17]</SUP> Another
benefit derived from a more systematic approach to diary
categorization, according to SSA's study, is improved integrity of the
diary process resulting from more timely CDRs and from actual medical
improvement rates that more closely correlate with the diary categories
that SSA assigns to beneficiaries. For example, SSA's study indicates
that the actual medical improvement rate for beneficiaries assigned to
the MIE diary category would increase to about 29 percent under this
improved process.
---------------------------------------------------------------------------
\[17]\ The study recommended that DDSs continue to assign diary
categories because this process is useful for indicating the severity
of an impairment. The statistical formula would then factor in this DDS
diary category in developing an ultimate diary determination.
---------------------------------------------------------------------------
SSA officials told us that, in response to the diary study
recommendations, the agency has begun to revise its diary process to
introduce a more systematic approach to selecting a CDR date. In
particular, SSA is developing a process that will use beneficiary data
collected at the time of benefit application, such as impairment type
and age, in a statistical formula to help determine when a CDR should
be conducted. While this change is likely to result in some
improvements in the timing of CDRs, the fundamental diary
categorization process used by DDSs will remain the same. Despite the
study's findings and recommendations, SSA officials told us that they
will not replace SSA's current process for assigning diary categories
with a statistical process because of what they believe would be
significant costs involved in changing this system across DDSs.
However, SSA's study acknowledged the potential cost of implementing a
new process in DDSs, and instead recommended that a revised diary
process be centrally administered in order to avoid such high costs.
The officials also said that such fundamental changes in the diary
process would require a change in regulations.
SSA's Process for Determining CDR Method Not Always Based on Best
Information Available
SSA's process for determining what method to use for a CDR is not
always based on the best information available. In the 1990s, SSA
introduced a system that develops a ``profile score'' for each
beneficiary, which indicates the beneficiary's likelihood for medical
improvement based on a statistical analysis of beneficiary data. The
purpose of the profile score is to allow SSA to determine whether it is
more cost-effective to send a mailer or to conduct a full medical
review. SSA's own contracted studies indicate that profiling results
provide the best available indication of whether a beneficiary is
likely to medically improve. Nevertheless, for some beneficiaries, SSA
continues to use the diary category that was judgmentally assigned by
DDS personnel as the basis for their decision about whether to senda
mailer or conduct a full medical review.
SSA requires a full medical review for all beneficiaries whose
diary category indicates that medical improvement is expected (MIE) and
who have not yet undergone a CDR.<SUP>[18]</SUP> This is the case even
when the profile score indicates that improvement is unlikely. In
fiscal year 2002, about 14 percent of beneficiaries in the MIE diary
category were assigned to the ``low'' profile category, which indicates
that medical improvement is not likely. SSA officials acknowledged that
their policy requiring full medical reviews for all beneficiaries in
this diary category departs from their usual practice of using mailers
for beneficiaries in the low profile category, but they believe that
this policy is reasonable given that these beneficiaries are more
likely to medically improve than those assigned to other diary
categories. However, SSA's data from 1998 to 2002 shows that most
beneficiaries in this category--about 94 percent--do not medically
improve to the point of being able to work.
---------------------------------------------------------------------------
\[18]\ SSA applies a different process for MIE beneficiaries who
have undergone one or more CDRs. These beneficiaries may receive a
mailer if their CDR profile score indicates that they have a low
likelihood of medical improvement. However, most beneficiaries assigned
to the MIE category have not yet undergone a CDR; in fiscal year 2002,
about 88 percent of all beneficiaries in this diary category had not
had a CDR. When referring to MIE beneficiaries in the remainder of our
discussion in this section, we are describing only those beneficiaries
who have not yet had a CDR.
---------------------------------------------------------------------------
For other CDR cases, SSA may require that a mailer be sent even
when the profile score indicates that conducting a full medical review
would be most cost-effective. Specifically, SSA's policy is to send a
mailer to all beneficiaries who were assigned a diary category that
indicates medical improvement is not expected (MINE),<SUP>[19]</SUP>
even if the profile score indicates a relatively high likelihood of
medical improvement.<SUP>[20]</SUP> Whether or not these beneficiaries
subsequently receive a full medical review will be based on the results
of their mailer. SSA officials said that MINE beneficiaries with a high
profile score are more likely to receive a full medical review based on
their mailer responses because SSA conducts a more stringent review of
their mailer responses.<SUP>[21]</SUP> However, it is not clear that
sending mailers to beneficiaries in the high profile category is the
most cost-effective approach. SSA studies of the mailer process have
indicated that, while this process is effective, it does not provide
the same assurance as full medical reviews that medical improvement
will be identified. As a result, the use of mailers for beneficiaries
whose profile scores indicate a high likelihood of improvement could
result in SSA identifying fewer benefit cessations.<SUP>[22]</SUP>
---------------------------------------------------------------------------
\[19]\ SSA officials told us that while it is their intention to do
mailers for all MINE beneficiaries, they may be unable in some years to
send mailers to all of these beneficiaries if their overall funding for
mailers is insufficient.
\[20]\ In addition to sending mailers to high profile beneficiaries
in the MINE diary category, SSA has recently begun to send mailers to
some high profile beneficiaries in the MIP diary category.
\[21]\ SSA also sends mailers to medium profile beneficiaries in
the MINE diary category. However, SSA has some evidence from its
profiling studies indicating that issuing mailers to medium profile
beneficiaries is likely to be cost-effective. No similar evidence
exists regarding high profile beneficiaries.
\[22]\ Although a relatively small proportion of beneficiaries have
their benefits ceased based on a CDR, the savings from these benefit
cessations are substantial, as noted earlier in this testimony.
---------------------------------------------------------------------------
SSA Has Not Fully Studied and Pursued the Use of Medical Treatment Data
from Medicare and Medicaid
SSA has not fully studied and pursued the use of medical treatment
data on beneficiaries available from the Medicare and Medicaid programs
despite the potential of these data to improve SSA's decisions
regarding whether to use a mailer or full medical review to complete a
CDR. In 2000, an SSA contracted study found that the use of Medicare
data from the Center for Medicare and Medicaid Services (CMS)--such as
data on hospital admissions and medical treatments--resulted in a
significant improvement in SSA's ability to assess potential medical
improvement through CDR profiling. Based on these results, SSA, in
fiscal year 2003, implemented a process that uses CMS Medicare data in
CDR profiling to determine if DI beneficiaries who are initially
identified as candidates to receive a full medical review should
instead receive mailers.<SUP>[23]</SUP> SSA expects that this will
result in administrative savings due to the reduced number of full
medical reviews the agency must conduct. SSA has also initiated a study
to assess whether CMS Medicaid data can be used in the same way to
decide if SSI beneficiaries, scheduled to receive full medical reviews,
could instead be sent mailers.
---------------------------------------------------------------------------
\[23]\ SSA is using CMS Medicare data to reassess the prospects of
medical improvement for beneficiaries who, based on their initial CDR
profiling results, are considered to have a high or medium likelihood
of medical improvement. Typically, SSA would conduct full medical
reviews for these beneficiaries. However, SSA's reassessment may
indicate that some of these beneficiaries instead have a low likelihood
of medical improvement and therefore should receive mailers.
---------------------------------------------------------------------------
But SSA's efforts to obtain and use CMS Medicare or Medicaid data
are incomplete because the data will only be used to reclassify full
medical reviews to mailers but not to reclassify mailers to full
medical reviews. SSA officials told us that they have no plans to
pursue this additional use of the data because they believe their
current profiling system is sufficient for identifying beneficiaries
who have a low likelihood of medical improvement. While they agreed
that the CMS data could potentially be useful for reclassifying mailers
to full medical reviews, they noted that they would need to first study
this particular use of the data and would need to develop another
interagency agreement with CMS to authorize and obtain data for this
purpose. Also, they said that any action to reclassify mailers to full
medical reviews would require SSA to publish a Federal Register notice
describing this action.
SSA could potentially achieve substantial program savings from
conducting additional full medical reviews in cases where CMS data
indicate that beneficiaries originally identified as mailer candidates
have a relatively high likelihood of medical improvement. Using CMS
Medicare data for this purpose would be consistent with the results of
an SSA study that recommended that these data be used whenever it
improves the agency's ability to accurately predict medical
improvement. For example, the study noted that the CMS data would be
useful for enhancing SSA's profiling of beneficiaries with mental
impairments, including those with a low likelihood of medical
improvement for whom SSA would usually send a mailer. To the extent
that CMS data improves SSA's ability to identify beneficiaries for full
medical review, the program savings from reduced lifetime benefit
payments to those beneficiaries whose benefits are ceased could easily
exceed any increased administrative costs resulting from additional
full medical reviews.
Missing or Incomplete Case Folders May Result in Fewer Benefit
Cessations
SSA continues to be hampered in its CDR decisions by missing or
incomplete information on beneficiaries' case history, which may
prevent SSA from ceasing benefits for some individuals who no longer
qualify for benefits. To cease benefits based on a CDR, SSA must
determine if the beneficiary has improved by comparing information
about the beneficiary's current condition to information from the
agency's previous decision regarding the beneficiary's medical
condition. This previous decision and the evidence supporting it are
recorded by SSA and maintained in case folders that are usually stored
in SSA records storage facilities. However, in conducting CDRs, DDSs
sometimes have difficulty retrieving the case folders or the key
medical evidence that is maintained in these folders.
Without the information contained in case folders, DDSs cannot
establish a comparison and, therefore, cannot determine if medical
improvement has occurred. As a result, SSA is legally required to keep
the beneficiary on the disability rolls even though the beneficiary may
have been judged to no longer qualify for benefits had the DDS been
able to establish a comparison. SSA's inability to cease benefits in
cases where folders are missing or incomplete could result in a
substantial cost to the federal government arising from continued
payments of benefits--cash and medical--to people who no longer meet
eligibility standards.<SUP>[24]</SUP>
---------------------------------------------------------------------------
\[24]\ Missing or incomplete case folders may also result in
additional administrative costs to the extent that SSA and DDS
personnel spend time attempting to locate or reconstruct missing
information.
---------------------------------------------------------------------------
Our discussions with SSA officials, survey of DDSs, and review of
SSA studies indicate that missing or incomplete folders present an
obstacle to effective processing of CDRs. However, evidence on the
extent of this problem is mixed. In responding to our survey on CDRs,
about 72 percent of DDSs informed us that missing or incomplete
information from case folders negatively impacted the quality or timing
of CDR decisions to a moderate or great extent. Recent SSA studies have
also identified problems with missing or incomplete case folders. For
example, a study contracted by SSA identified problems with disability
case folder management, such as misrouted or missing folders, and
recommended that SSA ``analyze the reasons for missing folders and
provide recommendations for process and systems improvements.''
SSA headquarters officials we spoke with said that SSA has examined
the incidence of missing or incomplete case folders and found that the
problem is not as significant as claimed by DDSs. For example, in
fiscal year 2000, SSA investigated allegations of substantial numbers
of missing case folders in two DDSs. SSA officials told us that they
were able to locate many of the folders that had been reported as
missing. The officials attribute the discrepancy between their findings
and the allegations of DDSs, in part, to staff shortages and workload
pressures at field offices, which result in a failure of these offices
to take further steps to look for folders. However, our survey of DDSs
indicates that regardless of SSA's ability to locate many case folders
upon further investigation, DDSs are still having difficulty obtaining
the information they need to make CDR decisions.
In a 2002 memorandum to SSA's Inspector General, the SSA
Commissioner acknowledged that missing or incomplete case folders are a
problem in the CDR process, but noted that the problem had been
overstated. The memorandum cited data indicating a lost folder rate of
about 0.5 percent for DI CDRs and about 3 percent for SSI
CDRs.<SUP>[25]</SUP> The Commissioner also said that SSA had taken a
number of actions in recent years to reduce the incidence of lost
folders, such as issuance of additional guidance and training on this
issue. In addition, the Commissioner noted that the agency was
committed to building a system of electronic folders <SUP>[26]</SUP>
that will ``virtually eliminate the incidences of lost folders.'' While
electronic folders may be a key initiative in resolving SSA's problems
with missing or incomplete case folders, SSA does not plan to fully
implement this system until mid-2005.<SUP>[27]</SUP> In addition, these
electronic folders will be established only for new disability cases;
cases established prior to implementation of electronic folders will
remain in a paper format. Therefore, problems in handling these older
case folders will likely continue.
---------------------------------------------------------------------------
\[25]\ Data are based on CDRs conducted from 1997 to 2001.
\[26]\ SSA is currently developing a Disability Electronic Folder
(EF) which, when completed, will be the repository of all information
used in the disability process and should eventually replace the paper
folders. As a result, processing components should not have to rely on
a paper folder to take adjudicative actions. The EF is planned to be
linked to all existing and future systems that support the disability
case process. Information will be captured electronically during the
case intake process and transmitted to the EF. Documentation and forms
received from external sources (e.g., claimants, medical providers,
third parties, etc.) will be converted to an electronic format (e.g.,
scanning and imaging) and added to the EF. Electronic documents
received from medical providers will be indexed and added to the EF.
\[27]\ SSA plans to begin rollout of electronic disability folders
in January 2004 and plans to achieve national implementation over an
18-month period.
---------------------------------------------------------------------------
SSA's Rationale for Postponing Return-to-Work Services to Some
Beneficiaries Is Not Well-Supported by Program Experience
SSA's rationale for postponing issuance of a ticket to
beneficiaries expected to medically improve--those who are assigned an
MIE diary category--is not well-supported by program experience. In
issuing regulations implementing the ticket act, SSA decided to
postpone issuance of tickets to MIE beneficiaries who have not yet had
a CDR based on the premise that these beneficiaries could be expected
to regain their capacity to work without SSA assistance.<SUP>[28]</SUP>
However, our analysis of SSA data indicates that the vast majority of
MIE beneficiaries in the DI and SSI programs--about 94 percent--are not
found to have medically improved upon completion of a CDR. As a result,
some beneficiaries who might otherwise benefit from potentially
valuable return-to-work assistance must wait up to 3 years to access
services through the ticket program.<SUP>[29]</SUP>
---------------------------------------------------------------------------
\[28]\ The Ticket to Work Act gave the SSA Commissioner authority
to determine which disabled beneficiaries would be eligible to
participate in the ticket program.
\[29]\ SSA's policy on ticket eligibility states that any MIE
beneficiary who has been on the disability rolls for at least 3 years
will be eligible for a ticket, even if they have not yet had a CDR.
---------------------------------------------------------------------------
Some disability advocacy groups and SSA's own Ticket to Work and
Work Incentives Advisory Panel have questioned SSA's policy of delaying
the issuance of tickets to MIE beneficiaries. In particular, they have
commented that delaying tickets to all MIE beneficiaries when only a
small proportion of these beneficiaries return to work underscores the
inherent weakness of relying upon the MIE category as a basis for
granting access to ticket services. In our prior work examining DI and
SSI return-to-work policies, we noted that delays in the provision of
vocational rehabilitation services can diminish the effectiveness of
such return-to-work efforts.<SUP>[30]</SUP> Delaying services to some
disability beneficiaries, therefore, undermines SSA's recent efforts to
increase its emphasis on helping these beneficiaries return to work.
---------------------------------------------------------------------------
\[30]\ U.S. General Accounting Office, SSA Disability: Program
Redesign Necessary to Encourage Return to Work, GAO/HEHS-96-62
(Washington, D.C.: Apr. 24, 1996).
---------------------------------------------------------------------------
SSA officials told us that they are examining the current policy of
issuing tickets to MIE beneficiaries to identify possible alternatives
but they are not sure when this assessment will be
completed.<SUP>[31]</SUP> However, they noted that their policy of
limiting ticket issuance reflects congressional interests in striking
an appropriate balance between program stewardship and encouraging
return to work. Moreover, they explained that reversing the current
policy would be costly. SSA's actuaries have estimated that issuing
tickets to all MIE beneficiaries would cost an additional $822 million
over 10 years because the ticket law prohibits SSA from conducting CDRs
on beneficiaries who are using a ticket. Therefore, SSA would continue
to pay DI and SSI benefits to some beneficiaries who might have
otherwise had their benefits terminated.
---------------------------------------------------------------------------
\[31]\ In May 2003, SSA announced in the Federal Register (Social
Security Administration: Semiannual Regulatory Agenda, 68 Fed. Reg.
31,240, May 27, 2003) that its long-term plans include a proposal to
revise its rules to allow the immediate issuance of tickets to MIE
beneficiaries. However, SSA's Associate Commissioner responsible for
reviewing the ticket policy for MIEs told us that SSA has not made a
final decision regarding any changes to the current policy and that the
agency's review has not been completed.
---------------------------------------------------------------------------
The drawbacks of SSA's current policy of postponing issuance of
tickets to MIE beneficiaries and the potential costs associated with an
alternative policy that would allow immediate issuance of tickets to
these beneficiaries highlights the need for SSA, as part of its policy
reexamination, to consider other policy alternatives that might better
balance the agency's program stewardship and return-to-work objectives.
While we did not conduct an in-depth assessment of potential
alternatives to SSA's current policy,<SUP>[32]</SUP> our review of the
CDR program and ticket provisions indicate that other options may exist
that would achieve a better balance among SSA's program objectives. For
example, SSA could develop a better means of identifying beneficiaries
who are expected to medically improve. Earlier in this testimony, we
noted that an SSA-contracted study of the diary process recommended
implementation of an improved system that, among other things, would
better identify MIE beneficiaries through statistical modeling of diary
decisions. One effect of such improved identification, according to the
study, would be to substantially reduce the proportion of beneficiaries
with an MIE diary category. For instance, the study found that although
SSA, over the past decade, has assigned the MIE diary category to about
9 percent of DI beneficiaries, a statistically-based diary process
would result in about 3 percent of DI beneficiaries being assigned to
the MIE category. This would potentially minimize the number of
beneficiaries initially denied tickets and may also provide more
assurance, within and outside SSA, that such beneficiaries can truly be
expected to improve.
---------------------------------------------------------------------------
\[32]\ Given the recent implementation of the ticket program,
insufficient data were available during the period of our review to
conduct the analysis necessary to fully evaluate such options.
---------------------------------------------------------------------------
SSA might also consider an option that provides for the issuance of
tickets to all MIE beneficiaries while allowing CDRs to be conducted as
scheduled for these beneficiaries. This policy would require a
legislative change because, as we noted earlier, the Ticket to Work Act
currently prohibits SSA from conducting a CDR while a person is using a
ticket.<SUP>[33]</SUP> While the ticket program's prohibition on CDRs
for ticket users was intended to remove a potential disincentive for
beneficiaries to return to work, MIE beneficiaries currently get
neither a ticket nor protection from a CDR. A policy allowing CDRs to
be conducted on these beneficiaries while they use a ticket would at
least give these beneficiaries immediate access to return-to-work
services offered under the ticket program. In addition, SSA will still
be able to achieve the cost savings that are derived from CDRs for
beneficiaries that it considers most likely to medically improve.
---------------------------------------------------------------------------
\[33]\ However, the prohibition on CDRs for all other ticket users
could remain in effect.
---------------------------------------------------------------------------
Conclusions
CDRs are a vital component of SSA's efforts to strengthen the
integrity of its disability programs, an objective that will only
increase in importance as the disability rolls continue to grow in the
years ahead. As such, it is important that SSA pursue and implement
initiatives to prevent the recurrence of CDR backlogs. SSA's recent
proposal for targeted funding of program activities, including CDRs,
that provide a return on investment as well as efforts to further
improve the cost-effectiveness of the CDR process could positively
contribute to SSA's efforts to improve service delivery. As SSA pursues
such initiatives, it should also examine options for better balancing
its need to conduct CDRs with its responsibility for providing return-
to-work assistance under the ticket to work program to beneficiaries
who are expected to medically improve.
Mr. Chairman, this concludes my prepared statement. I will be happy
to respond to any questions you or other Members of the Subcommittee
may have.
GAO Contacts and Staff Acknowledgements
For information regarding this testimony, please contact Robert E.
Robertson, Director, or Shelia Drake, Assistant Director, Education,
Workforce, and Income Security at (202) 512-7215. Individuals making
contributions to this testimony include Brett S. Fallavollita, Mark
Trapani, Melinda L. Cordero, and Corinna A. Nicolaou.
<F-dash>
Chairman SHAW. Ms. Koontz.
STATEMENT OF LINDA D. KOONTZ, DIRECTOR, INFORMATION MANAGEMENT
ISSUES, U.S. GENERAL ACCOUNTING OFFICE
Ms. KOONTZ. Mr. Chairman, Members of the Subcommittee, I am
pleased to be here to participate in your hearing on the SSA's
service delivery capability. My testimony focuses on a critical
aspect of SSA's overall goal, its ongoing initiative to achieve
an electronic disability claims process. As you know, one of
SSA's most vital obligations is paying cash benefits to
disabled individuals under the Disability Insurance and SSI
Programs. In 2002, the agency paid approximately $86 billion to
about 10 million disabled beneficiaries. Yet, over the years,
it has been increasingly difficult for SSA to ensure an
acceptable level of service, both in terms of quality and
timeliness. During testimony before this Subcommittee in May
2002, the Commissioner voiced concerns about the length of time
that the current disability process can take and promised
immediate improvements. Among these improvements, she announced
plans to accelerate SSA's initiative to develop an electronic
disability claims process by late January 2004 rather than late
2005, as originally planned. The SSA's refocused project is
known as the AeDib Initiative. At your request, we are
currently assessing the strategy for automating the electronic
disability claims process. My testimony will discuss our key
observations to date regarding the initiative including the
accelerated approach, the risks associated with this approach,
and consultation with and support from key stakeholders. We
plan to discuss more fully the results of our ongoing review in
a subsequent report to you.
The SSA's goals of achieving an electronic disability
claims process represents an important positive direction
toward more efficient delivery of disability payments to an
increasing beneficiary population. In undertaking this
initiative, SSA's immediate focus is on developing the
capability to allow claimant information and large amounts of
medical images files and other documents that are currently
maintained in paper folders to be stored in electronic folders,
and then accessed, viewed, and shared by the disability
processing offices. Since announcing the accelerated
initiative, SSA has made progress toward attaining this
capability, including implementing initial automated claims
intake functions in its field offices. Nonetheless, substantial
work remains. The most crucial of which is developing document
management and scanning and imaging capabilities that are
fundamental to establishing the electronic folder. The SSA's
current strategy, however, involves risks that could jeopardize
its successful transition to an electronic disability system. A
pilot test that would determine whether technology supporting
the electronic folder will work as intended is not expected to
be completed until late December at least, just one month
before SSA plans to be begin implementing the electronic folder
in the disability offices, leaving the agency little time to
incorporate test results. The agency also does not currently
plan to perform end-to-end testing to demonstrate prior to
national implementation how successfully the multiple
components will operate together to electronically process
disability claims. Further adding to the system's vulnerability
is that SSA has not yet performed a comprehensive assessment to
identify and establish strategies for mitigating project risks
that could result in cost schedule and performance shortfalls.
Finally, SSA has not yet successfully resolved certain
concerns among key disability stakeholders regarding the
accelerated strategy. The SSA officials maintain that they have
involved stakeholders in developing the system. They are
including them in working groups and steering Committee
meetings. However, State disability determination officials, in
particular, have significant concerns about how the system is
being developed and implemented, and do not believe that their
offices have been effectively involved with SSA in making key
decisions about the initiative. They further question whether
the strategy will effectively support their business processes.
The SSA's consultations with the medical community have also
thus far been limited, and their representatives have concern
about electronically submitting evidence for disability
determinations. Until SSA can assure itself and stakeholders
the concerns have been effectively considered and addressed,
the agency risks not having full acceptance and use of this
delivery tool. To summarize, in moving forward on an electronic
disability process, SSA has undertaken a very positive and very
necessary endeavor, and we commend the Commissioner's
determination and proactive pursuit of this service delivery
enhancement. Nonetheless, SSA's accelerated strategy may
involve risks of delivering a system that may not sufficiently
meet its needs. Given the importance of this project, it is
essential that the agency satisfy itself that the electronic
disability initiative will perform as intended before it is
deployed nationwide. We will continue to monitor progress on
this initiative as part of our ongoing review. That concludes
my statement. I would be happy to answer questions at the
appropriate time.
[The prepared statement of Ms. Koontz follows:]
Statement of Linda D. Koontz, Director, Information Management Issues,
U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to participate in your continuing
dialogue on the Social Security Administration's (SSA) service-delivery
capability. My testimony focuses on a critical aspect of SSA's overall
goal--its ongoing initiative to achieve an electronic disability claims
process. As you know, one of SSA's most vital obligations is paying
cash benefits to disabled individuals under the Disability Insurance
and Supplemental Security Income programs. In 2002, the agency paid
approximately $86 billion to about 10 million disabled beneficiaries.
Yet, over the years, it has become an increasing challenge for SSA to
ensure an acceptable level of service--both in terms of quality and
timeliness. This past January, in fact, we reported SSA's disability
programs as high-risk.<SUP>[1]</SUP>
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\[1]\ U.S. General Accounting Office, Major Management Challenges
and Program Risks: Social Security Administration, GAO-03-117
(Washington, D.C.: January 2003).
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During testimony before this Subcommittee in May 2002, the
Commissioner of Social Security voiced concerns about the length of
time that the current disability process can take, and promised
immediate improvements. Among these improvements, she announced plans
to accelerate SSA's initiative to develop an electronic disability
claims process by late January 2004 rather than late 2005 as initially
planned. SSA's refocused project is known as the accelerated electronic
disability initiative--AeDib.
At your request, we are currently reviewing AeDib to assess SSA's
strategy for developing the electronic disability claims process. My
testimony will discuss our key observations to date regarding the
initiative, including SSA's (1)accelerated approach for and progress
toward completing the electronic disability system, (2) actions for
ensuring the system's successful operations and protection against
risks, and (3) consultation with and support from key stakeholders. We
plan to discuss more fully the results of our ongoing review in a
subsequent report to you.
In conducting this work, we analyzed relevant documentation
describing SSA's plans and strategies for developing and implementing
the AeDib system and its progress in doing so. We reviewed technical
documents pertaining to the system development and interviewed
appropriate SSA officials to determine the extent to which the agency
has followed its software development guidance. We supplemented our
analysis with interviews of SSA officials in the Offices of disability
Programs, Operations, Systems, and Hearings and Appeals. In addition,
we visited SSA field offices in Delaware and Texas to observe
disability claims intake operations and obtain staff perspectives on
the AeDib project. We also conducted site visits at the Delaware, New
York, Texas, and Wisconsin Disability Determination Services (DDS)
offices to observe disability system pilot tests and discuss these
offices' involvement in planning and implementing AeDib. Further, we
surveyed staff in six other DDS offices, and interviewed
representatives of state and SSA employees and the medical community.
These included the National Council of Disability Determination
Directors, the American Federation of Government Employees, and the
American Health Information Management Association. We performed our
work to date in accordance with generally accepted government auditing
standards, from December 2002 through July of this year.
RESULTS IN BRIEF
SSA's goal of achieving an electronic disability claims process
represents an important, positive direction toward more efficient
delivery of disability payments to an increasing beneficiary
population. In undertaking AeDib, SSA's immediate focus is on
developing the capability to allow claimant information and large
volumes of medical images, files, and other documents that are
currently maintained in paper folders to be stored in electronic
folders, and then accessed, viewed, and shared by the disability
processing offices. Since announcing the accelerated initiative in May
2002, SSA has made progress toward attaining this capability, including
implementing initial automated claims-intake functions in its field
offices. Nonetheless, substantial work remains--the most crucial of
which is developing document management and scanning and imaging
capabilities that are fundamental to achieving the electronic folder.
SSA's current strategy, however, involves risks that could
jeopardize its successful transition to an electronic disability
process. A pilot test that would determine whether technology
supporting the electronic folder will work as intended, is not expected
to be completed until at least December--just 1 month before SSA plans
to begin implementing the electronic folder to the disability offices--
leaving the agency little time to incorporate test results. The agency
also does not currently plan to perform end-to-end testing to
demonstrate, prior to the national implementation, how successfully the
multiple components will operate together to electronically process
disability claims. Adding to the system's vulnerability is that SSA has
not yet performed a comprehensive assessment to identify and establish
strategies for mitigating project risks that could result in cost,
schedule, and performance shortfalls.
Finally, SSA has not yet successfully resolved certain concerns
among key disability stakeholders regarding the AeDib strategy. SSA
officials maintain that they have involved stakeholders in developing
AeDib through including them in working groups and steering committee
meetings. However, state DDSs in particular, have significant concerns
about how the system is being developed and implemented, and do not
believe that their offices have been effectively involved with SSA in
making key decisions about the initiative; they question whether this
strategy will effectively support their business processes. Further,
although physicians and other providers of medical evidence are
critical to the disability process, SSA's consultations with the
medical community have thus far been limited and their representatives
have concerns about electronically submitting evidence for disability
determinations. Until SSA can ensure itself and all stakeholders that
the concerns have been effectively considered and addressed--and the
stakeholders view themselves as fully engaged in the initiative--the
agency risks not having full acceptance and use of this vital service-
delivery tool.
BACKGROUND
The Disability Insurance and Supplemental Security Income programs
are the nation's largest providers of federal income assistance to
disabled individuals, with SSA making payments of approximately $86
billion to about 10 million beneficiaries in 2002. The process through
which SSA approves or denies disability benefits is complex and
involves multiple partners at both the state and federal levels in
determining a claimant's eligibility. Within SSA, these include its
1,300 field offices, which serve as the initial point of contact for
individuals applying for benefits, and the Office of Hearings and
Appeals, which, at the request of claimants, reconsiders SSA's
decisions when benefits are denied.
SSA also depends on 54 state Disability Determination Services
(DDS) offices to help process claims under its disability insurance
programs.<SUP>[2]</SUP> State DDSs provide crucial support to the
initial disability claims process--one that accounts for most of SSA's
workload--through their role in determining an individual's medical
eligibility for disability benefits. DDSs make decisions regarding
disability claims in accordance with federal regulations and policies;
the federal government reimburses 100 percent of all DDS costs in
making disability determination decisions. Physicians and other members
of the medical community support the DDSs by providing the medical
evidence to evaluate disability claims.
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\[2]\ DDSs are located in all 50 states, the District of Columbia,
Guam, Puerto Rico, and the Virgin Islands.
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The process begins when individuals apply for disability benefits
at an SSA field office, where determinations are made about whether
they meet nonmedical criteria for eligibility. The field office then
forwards the applications to the appropriate state DDS, where a
disability examiner collects the necessary medical evidence to make the
initial determination of whether the applicant meets the definition of
disability. Once the applicant's medical eligibility is determined, the
DDS forwards this decision to SSA for final processing.
Claimants who are initially denied benefits can ask to have the DDS
reconsider its denial. If the decision remains unfavorable, the
claimant can request a hearing before a federal administrative law
judge at an SSA hearings office, and, if still dissatisfied, can
request a review by SSA's Appeals Council. Upon exhausting these
administrative remedies the individual may file a complaint in federal
district court. Each level of appeal, if undertaken, involves multi-
step procedures for the collection of evidence, information review, and
decision making. Many individuals who appeal SSA's initial decision
will wait a year or longer--perhaps up to 3 years--for a final
decision.
To address concerns regarding the program's efficiency, in 1992 SSA
initiated a plan to redesign the disability claims process, emphasizing
the use of automation to achieve an electronic (paperless) processing
capability. The automation project started in 1992 as the Modernized
Disability System, and was redesignated the Reengineered Disability
System (RDS) in 1994. RDS was to automate the entire disability claims
process--from the initial claims intake in the field office to the
gathering and evaluation of medical evidence at the state DDSs, to
payment execution in the field office or processing center, and
including the handling of appeals at the hearings offices. However, our
prior work noted that SSA had encountered problems with RDS during its
initial pilot testing.<SUP>[3]</SUP> For example, systems officials had
stated that, using RDS, the reported productivity of claims
representatives in the SSA field offices dropped. They noted that
before the installation of RDS, each field office claims representative
processed approximately five case interviews per day. After RDS was
installed, each claims representative could process only about three
cases per day. As a result, following an evaluation by a contractor,
SSA suspended RDS in 1999 after approximately 7 years and more than $71
million reportedly spent on the initiative.
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\[3]\ U.S. General Accounting Office, Social Security
Administration: Technical and Performance Challenges Threaten Progress
of Modernization, GAO/AIMD-98-136 (Washington, D.C.: June 19, 1998).
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In August 2000 SSA issued a management plan with a renewed call for
developing an electronic disability system by the end of 2005. The
strategy was to incorporate three components: an electronic disability
intake process that would include (1) a subset of the existing RDS
software, (2) the existing DDS claims process, and (3) a new system for
the Office of Hearings and Appeals. The management plan also provided
for several pilot projects to test the viability and performance of
each project component. SSA's work on this effort occurred through the
spring of 2002, at which time the Commissioner announced that she had
begun an accelerated initiative to more quickly automate the disability
claims process. The agency anticipated that, with technologically
advanced disability processing offices, it could potentially realize
benefits of more than $1 billion, at an estimated cost of approximately
$900 million, over the 10-year life of the accelerated initiative.
AeDib's STRATEGY CALLS FOR DEVELOPING AND INTEGRATING MULTIPLE
DISABILITY SYSTEM PROJECTS
In undertaking AeDib, SSA has embarked on a major initiative
consisting of multiple projects that are intended to move all partners
in its disability claims adjudication and review to an electronic
business process. SSA envisions that AeDib will allow its disability
components to stop relying on paper folders to process claims and to
develop new business processes using legacy systems and information
contained in an electronic folder to move and process all of its work.
In so doing, SSA anticipates that AeDib will enable disability
components to achieve processing efficiencies, improve data
completeness, reduce keying errors, and save time and money.
The AeDib strategy focuses on developing the capability for
claimant information and large volumes of medical images, files, and
other documents that are currently maintained in paper folders to be
stored in electronic folders, and then accessed, viewed, and shared by
the disability processing offices. SSA is undertaking five key projects
to support the strategy:
<bullet> An Electronic Disability Collect System to provide the
capability for SSA field offices to electronically capture information
about the claimant's disability and collect this structured data in an
electronic folder for use by the disability processing offices;
<bullet> A Document Management Architecture that will provide a
data repository and scanning and imaging capabilities to allow claimant
information and medical evidence to be captured, stored, indexed, and
shared electronically between the disability processing offices;
<bullet> Internet applications that will provide the capability to
obtain disability claims and medical information from the public via
the Internet;
<bullet> DDS systems migration and electronic folder interface
that will migrate and enhance the existing case processing systems to
allow the state disability determination services offices to operate on
a common platform and prepare their legacy systems to share information
in the electronic folder; and
<bullet> A Case Processing and Management System for the Office of
Hearings and Appeals that will interface with the electronic folder and
enable its staff to track, manage, and complete case-related tasks
electronically.
According to SSA, the Electronic Disability Collect System and the
Document Management Architecture are the two fundamental elements
needed to achieve the electronic disability folder. By late January
2004, SSA plans to have developed these two components. It also expects
to have completed five Internet disability applications, enhanced the
DDS legacy systems, and developed the software that will allow existing
SSA and DDS systems to interface with the electronic folder. However,
SSA will not yet have implemented the scanning and imaging capabilities
and the interface software to enable each disability processing office
to access and use the data contained in the electronic folder. SSA
officials explained that, at the end of next January, the agency plans
to begin an 18-month rollout period, in which it will implement the
scanning and imaging capabilities and establish the necessary
interfaces. SSA has drafted but not yet finalized the implementation
strategy for the rollout.
SSA Has Completed Important AeDib Tasks, But Much Work Remains
SSA has performed several important project tasks since beginning
the accelerated initiative in 2002. For example, it has implemented
limited claims-intake functionality as part of the Electronic
Disability Collect System, and begun additional upgrades of this
software. In addition, it has developed two Internet applications for
on-line forms to aid claimants in filing for disability benefits and
services. Further, to support electronic disability processing, SSA is
in the process of migrating and upgrading hardware and case processing
software to allow all of the 54 state DDSs to operate on a common
platform,<SUP>[4]</SUP> and has begun developing software to enable the
DDS systems to interface with the electronic folder. SSA has also
performed some initial tasks for the Document Management Architecture,
including developing a system prototype, establishing requirements for
the scanning capability, and drafting a management plan and training
strategy.
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\[4]\ Thirty of the 54 state DDSs previously operated on a platform
consisting of Wang hardware and iLevy disability processing software.
SSA is now moving all DDSs to an IBM series platform in an attempt to
achieve consistency among all DDS systems in processing disability
claims.
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Nonetheless, the agency still has a significant amount of work to
accomplish to achieve the electronic disability folder by the end of
next January. While substantial work remains for each of the AeDib
components, primary among SSA's outstanding tasks is completing the
Document Management Architecture's development, testing, and
installation at the agency's National Computer Center. Table 1
illustrates SSA's progress through last June in accomplishing tasks
included in the AeDib initiative, along with the many critical actions
still required to develop and implement the electronic disability
processing capability.
Table 1: Status of Tasks Involved in Developing the AeDib
----------------------------------------------------------------------------------------------------------------
Key tasks to be
Tasks completed as of Tasks to be completed Planned January 2004 completed during 18-
AeDib component June 30, 2003 by January 30, 2004 project status month national rollout
(2/2004-7/2005)
----------------------------------------------------------------------------------------------------------------
Electronic Developed EDCS release Develop electronic EDCS software v.6 None reported
Disability 4.2.3. folder interface operational in all
Collection Developed EDCS release requirements for SSA field offices. It
System (EDCS) 5.0. AeDib legacy systems. will automate the
Developed EDCS release Develop software for disability interview
5.1. version 6.X. process. Data will be
Drafted training Complete design and propagated to EDCS
strategy. legacy system support and/or the electronic
for v6.0. folder from SSA
<bullet> Complete mainframe systems and
validation for V.6.01. disability Internet
<bullet> Compete applications.
validation for V6.02.
<bullet> Complete
design, legacy system
support, and
integration and
environmental testing
for V6.1.
<bullet> Validate
software.
<bullet> Conduct
integration and
environmental testing.
<bullet> Release
software to
production.
Train users...........
----------------------------------------------------------------------------------------------------------------
Document Developed document Develop procurement DMA infrastructure Ensure site
Management imaging and strategies. established in the preparation for DMA
Architecture management system Conduct performance SSA National Computer Roll out DMA
(DMA) prototype. engineering and Center. infrastructure (e.g.,
Provided technical tuning. casual scanning
training to DMA staff. Conduct validation.... equipment, object
Developed management Conduct integration repository servers,
approach and plan. and environmental scanning and imaging
Developed DMA testing. servers, and fax
requirements. Install pilots........ servers)
Acquired AeDib pilot Conduct pilot testing. Conduct process
infrastructure. Evaluate pilot results evaluation
Drafted training Address any pilot
strategy. issues.
Setup production
environment.
Procure AeDib
infrastructure.
Establish object
management system.
Contract with
outsourced scanning
vendors for national
scanning support.
Finalize training
strategy.
----------------------------------------------------------------------------------------------------------------
Internet Developed and released Complete Internet form Public will have None reported
disability into production 3820 (child). Internet access to
applications Internet form 3368 <bullet> Validation... disability
(disability report). <bullet> Integration applications a.
Developed and released testing. <bullet> i3368
into production <bullet> Pre-release (disability report).
Internet form 827 tasks. <bullet> i827
(authorization to Complete Internet form (authorization to
release information). 3369 (work history). release information).
Drafted training <bullet> Construction <bullet> i3820 (child)
strategy. including hardware, <bullet> i3369 (work
capacity management, history).
security support <bullet> i3441
activities. (appeals).
<bullet> Software Data will be
development. automatically
<bullet> Software generated to EDCS
validation. from the i3368
<bullet> Integration (disability report),
testing. i3820 (child), i3369
<bullet> Pre-release (work history), and
tasks. i3441 (appeals)..
Complete Internet form
3441 (appeals).
<bullet> Construction
including hardware,
capacity management,
security support
activities.
<bullet> Software
development.
<bullet> Validation...
<bullet> Integration
testing.
<bullet> Pre-release
tasks.
----------------------------------------------------------------------------------------------------------------
DDS AS/400 Contracted for AS/400 Complete migration of Enhanced legacy Install DMA
migration and migration and iLevy software. systems prepared to infrastructure based
electronic electronic folder Complete procurement interface with on rollout schedule
folder interface. of IBM AS/400 electronic folder. and strategy
interface Installed AS/400 upgrades. Complete changes to
hardware. Complete IBM install New York and Nebraska
Provided core AS/400 upgrades. legacy systems to
training. Complete AS/400 interface with
Drafted training training. electronic folder
strategy. Install print servers.
Complete software
changes to support
electronic folder
interface.
Conduct process
evaluation.
----------------------------------------------------------------------------------------------------------------
Hearings and Documented business Complete post-demo CPMS stand-alone Complete development
appeals Case process description. requirements. software without of CPMS management
Processing Developed software Conduct system management information
Management development plan. validation. information functionality
System (CPMS) Developed pre- Conduct integration functionality and Roll out CPMS software
demorequirements. and environmental prepared to interface to hearings and
Drafted training testing. with electronic appeals sites
strategy. Establish CPMS folder. starting in March
software for pilot. 2004
Conduct pilot training Conduct training
Conduct pilot......... Install DMA
Begin pilot evaluation infrastructure
Begin to address any
pilot issues.
Finalize training
strategy.
----------------------------------------------------------------------------------------------------------------
a SSA reported that Disability Internet form i454 (Continuing Disability Review) is being revised and will not
be available by January 2004.
Source: GAO analysis of SSA AeDib project documentation.
As the table reflects, SSA's electronic disability claims process
hinges on accomplishing numerous critical tasks by the end of January
2004. In discussing the overall progress of the initiative, SSA
officials in the Offices of Systems and Disability Programs acknowledge
that the agency will be severely challenged to accomplish all of the
tasks planned for completion by the end of January. Nonetheless, they
believe that SSA will meet the targeted project completion dates,
stating that the agency has conducted the necessary analyses to ensure
that the accelerated schedule can accommodate the project's scope.
RISKS IN DEVELOPING THE ELECTRONIC DISABILITY SYSTEM INCREASE AeDib's
OVERALL VULNERABILITY
Beyond meeting an ambitious project implementation schedule, SSA
must ensure that the system it delivers successfully meets key business
and technical requirements for reliably exchanging data among
disability processing components and is protected from errors and
vulnerabilities that can disrupt service. Accomplishing this
necessitates that SSA conduct complete and thorough testing to provide
reasonable assurance that systems perform as intended. These include
tests and evaluations of pilot projects to obtain data on a system's
functional performance and end-to-end tests to ensure that the
interrelated systems will operate together effectively. In addition,
the success of the system will depend on the agency identifying and
mitigating critical project risks.
SSA plans to rely on pilot tests and evaluations to help guide
business and technical decisions about the electronic disability
folder, including critical decisions regarding the document management
technology. For example, SSA stated that the Document Management
Architecture pilots will be used to test electronic folder interface
requirements and DDS site configurations for AeDib national
implementation. In addition, the pilots are expected to test the
business process and work flow associated with incorporating the
Document Management Architecture. SSA has stated that this information
is crucial for determining whether the technology selected for the
Document Management Architecture will adequately support the electronic
folder.
However, SSA may not be able to make timely and fully informed
decisions about the system based on the pilot test results. The pilot
tests were to begin this month, and some of the test results upon which
decisions are to be based are not expected to be available until the
end of December at the earliest,<SUP>[5]</SUP> leaving little time to
incorporate the results into the system that is to be implemented by
late January. Further, even when completed, the pilot tests will
provide only limited information about the electronic folder's
functionality. SSA stated that they will not test certain essential
aspects of the folder usage, such as the DDS's disability determination
function. Thus, whether SSA will have timely and complete information
needed to make decisions that are essential to developing and
implementing the electronic disability folder is questionable.
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\[5]\ SSA plans to conduct the pilot tests at three state DDS
sites--North Carolina, Illinois, and California--beginning this month.
It plans to complete the tests in December.
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In addition, given the technological complexity of the AeDib
project, the need for end-to-end testing is substantial. Our prior work
has noted the need for such testing to ensure that interrelated systems
that collectively support a core business area or function will work as
intended in a true operational environment.<SUP>[6]</SUP> End-to-end
testing evaluates both the functionality and performance of all systems
components, enhancing an organization's ability to trust the system's
reliability. SSA's development and use of new electronic tools to
integrate an electronic folder with its own and DDS legacy systems,
along with Web-based applications and the new Document Management
Architecture, elevates the importance of ensuring that all parts will
work together as intended.
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\[6]\ U.S. General Accounting Office, Year 2000 Computing Crisis:
FAA Is Making Progress But Important Challenges Remain, GAO/T-AIMD/
RCED-99-118 (Washington, D.C.: March 15, 1999).
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However, the agency currently has not completed a test and
evaluation strategy to conduct end-to-end testing to demonstrate,
before deployment, that these systems will operate together
successfully. They added that conducting end-to-end testing would
require delaying system implementation to allow the time needed for a
claim to be tested as it moved through all of the disability
components--a process that could take up to 6 months to complete.
However, determining that all AeDib components can correctly process
disability claims when integrated is vital to SSA's knowing whether the
electronic disability system can perform as intended.
Compounding AeDib's vulnerability is that SSA has not yet
undertaken a comprehensive assessment of project risks to identify
facts and circumstances that increase the probability of failing to
meet project commitments, and taking steps to prevent this from
occurring. Best practices and federal guidance <SUP>[7]</SUP> advocate
risk management. To be effective, risk management activities should be
(1) based on documented policies and procedures and (2) executed
according to a written plan that provides for identifying and
prioritizing risks, developing and implementing appropriate risk
mitigation strategies, and tracking and reporting on progress in
implementing the strategies. By doing so, potential problems can be
avoided before they manifest themselves into cost, schedule and
performance shortfalls.
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\[7]\ See, for example, Software Acquisition Capability Maturity
Model <SUP>SM</SUP> (CMU/SEI-99-TR-002, April 1999); OMB Circular A-130
(November 30, 2000).
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SSA has developed a risk management plan to guide the
identification and mitigation of risks, and based on that plan, has
developed a high-level risk assessment of program and project risks.
The high-level assessment, which SSA issued last February, identified
35 risks that the agency described as general in nature and addressing
only overall program management issues related to the project's costs,
schedule, and hardware and software. For example, one of the high-level
risks stated that the overall availability of the Document Management
Architecture might not meet service-level commitments. The related
mitigation strategy stated that the agency should continue to
investigate various approaches to ensure the system's availability.
SSA has acknowledged the potential for greater risks given the
electronic case processing and technological capability required for
AeDib. Further, in response to our inquiries, its officials stated that
the agency would conduct and document a comprehensive assessment of
project risks by June 30 of this year. The officials added that AeDib
project managers would be given ultimate responsibility for ensuring
that appropriate risk-mitigation strategies existed and that SSA had
tasked a contractor to work with the managers to identify specific
risks associated with each system component. However, at this time, SSA
is still without a comprehensive assessment of risks that could affect
the project. Until it has a sound analysis and mitigation strategy for
AeDib, SSA will not be in a position to cost-effectively plan for and
prevent circumstances that could impede a successful project outcome.
UNRESOLVED STAKEHOLDER CONCERNS COULD UNDERMINE AeDib's SUCCESS
Integral to AeDib's success are disability process stakeholders
that SSA relies on to fulfill the program's mission, including state
disability determination officials and medical providers. As primary
partners in the disability determination process, stakeholders can
offer valuable and much-needed insight regarding existing work
processes and information technology needs, and their stake and
participation in the systems development initiative is essential for
ensuring its acceptance and use. In assessing lessons learned from
SSA's earlier attempt to implement the failed Reengineered Disability
System, Booz-Allen and Hamilton recommended that SSA at all times keep
key stakeholders involved in its process to develop an electronic
disability processing capability.
SSA disability program and systems officials told us that the
agency has involved its various stakeholders in developing AeDib. They
stated that the agency has entered into memorandums of understanding
for data sharing with state DDSs, established work groups comprising
DDS representatives to obtain advice on development activities, and
included these stakeholders in steering committee meetings to keep them
informed of the project's status. In addition, SSA stated, it has met
with representatives of major medical professional associations to seek
their support for SSA's requests for releases of medical evidence.
However, officials that we contacted in nine of the ten DDS offices
stated that their concerns were not adequately heard and considered in
the decision-making process for the development of AeDib, despite the
critical and extensive role that states play in making disability
determinations. Because of this limited involvement, the National
Council of Disability Determination Directors, which represents the
DDSs, stated that they were concerned that SSA may be pursuing an
automated disability strategy that could negatively affect business
operations by creating delays in the ability to make decisions on
disability cases. The DDS representatives stated that SSA has not
articulated a clear and cohesive vision of how the disability
components will work to achieve the AeDib goal and that decisions about
AeDib were being made without considering their perspectives. They
explained, for example, that SSA's decision to use a scanning and
imaging vendor to whom medical providers would have to submit evidence
would introduce an additional step into the disability process, and
might result in DDSs' not being able to effectively manage the critical
information that they need to make disability determinations. Further,
they have questions about how in the disability process evidence will
be electronically stored, noting that SSA has proposed, but not yet
decided among, three possible scenarios for establishing repositories
to house medical evidence.
Last March, the National Council of Disability Determination
Directors made three suggestions to SSA aimed at allowing the DDSs to
have greater responsibility for this aspect of the disability business
process. Among their proposals was that DDSs (1) be allowed to manage
the contractors who will be responsible for scanning and imaging all
records received from medical providers; (2) have the choice of
receiving electronic medical evidence at a repository maintained at
their sites rather than at remote, centralized locations; and (3) be
allowed to test the possibility of scanning records after, rather than
before, the DDS adjudicates a claim. According to the council, this
latter approach would ensure that the DDSs could make timely and
accurate disability determinations, while also allowing SSA the time to
perfect the electronic business process and transition to the initial
case process. As of last week, however, SSA had not responded. For its
part, SSA stated that it is reviewing, but has not yet taken a position
on, the council's proposals.
SSA's consultation with the medical community (physicians and other
sources of medical evidence used to evaluate disability claims) also
has been limited. These stakeholders are critical, as they represent
the basic source of most of the information that states use to evaluate
an individual's disability. One of the key savings that SSA anticipates
from AeDib is based on physicians and other medical sources
electronically transmitting or faxing medical evidence that is now
mailed to the DDSs. SSA has estimated that as much as 30 percent of all
medical evidence could be faxed or electronically received from these
providers, with the majority of it being faxed. In speaking with
American Health Information Management Association officials in Georgia
and Wisconsin, however, they expressed concern about the possibility
that SSA will want medical providers to fax evidence. They cited the
voluminous nature of much of the medical evidence that they send to the
DDSs, and believe that faxing it would be too costly and not secure.
Our review to date has not assessed the validity of the concerns
expressed by the stakeholders, or SSA's responses to them. Nonetheless,
as long as such concerns exist, SSA must be diligent in pursuing a
mutually agreed-upon understanding with its stakeholders about its
vision and plan of action being pursued. SSA's success in implementing
AeDib depends heavily on resolving all outstanding issues and concerns
that could affect the use and, ultimately, the outcome of the intended
electronic capability. Without stakeholders' full and effective
involvement in AeDib's planning and development, SSA cannot be assured
that the system will satisfy critical disability process requirements
and be used as intended to achieve desired processing efficiencies and
improved delivery of services to beneficiaries.
To summarize, Mr. Chairman, in moving toward an electronic
disability process, SSA has undertaken a positive and very necessary
endeavor. Having the means to more effectively and efficiently provide
disability benefits and services is essential to meeting the needs of a
rapidly aging and disabled population, and we applaud the
Commissioner's determination and proactive pursuit of this service-
delivery enhancement.
Nonetheless, SSA's accelerated strategy may involve risks of
delivering a system that will not sufficiently address its needs. The
execution of critical pilot tests that are not scheduled for completion
until December or later, coupled with the lack of planned end-to-end
testing and a comprehensive assessment of risks, may prevent SSA from
delivering an information technology capability based on sound and
informed decision making. Moreover, uncertainties about the successful
outcome of this project are exacerbated by concerns that key
stakeholders in the disability process continue to have. Given the
importance of this project to SSA's future service-delivery capability,
it is essential that the agency satisfy itself that AeDib will perform
as intended with minimal risk before it is deployed nationwide. We will
continue to monitor SSA's progress on this initiative as part of our
ongoing review.
This concludes my statement. I would be happy to respond to any
questions that you or other members of the Subcommittee may have at
this time.
GAO CONTACTS AND STAFF ACKNOWLEDGMENTS
For information regarding this testimony, please contact Linda D.
Koontz, Director, or Valerie Melvin, Assistant Director, Information
Management Issues at (202) 512-6240. Other individuals making key
contributions to this testimony include Michael Alexander, Tonia D.
Brown, Derrick Dicoi, and Mary J. Dorsey.
<F-dash>
Chairman SHAW. Thank you. Ms. Prokop.
STATEMENT OF SUSAN PROKOP, ASSOCIATE ADVOCACY DIRECTOR,
PARALYZED VETERANS OF AMERICA, CO-CHAIR, WORK INCENTIVES
IMPLEMENTATION TASK FORCE, AND MEMBER, SOCIAL SECURITY TASK
FORCE, CONSORTIUM FOR CITIZENS WITH DISABILITIES
Ms. PROKOP. Chairman Shaw, Mr. Matsui in absentia, Members
of the Subcommittee, for the Social Security Task Force and
Task Force on Work Incentives Implementation of the Consortium
for Citizens with Disabilities, I thank you for this
opportunity to testify on the SSA's Service Delivery Budget
Plan. To meet current and future beneficiary needs, we urge
commitment of resources and personnel to resolve the waiting
times and make the claims process work better for people with
disabilities. The Commissioner's Service Delivery Budget Plan
shows her commitment to resolving the major issues in service
delivery. We urge your support for the Service Delivery Plan
budget. Adequate staffing levels are critical for SSA to
address the increasing responsibilities it will confront in the
coming decades. For some time, the Social Security Task Force
has voiced concern over long-term down sizing of the SSA
workforce which has been reduced by more than 20 percent from
1985 levels. As important as sufficient number of staff are for
proper service delivery, equally important is the need for
adequately trained staff. Regrettably, field staff are not
always familiar with SSA's operational and management
information systems innovations. When field offices fail to use
the tools at their disposal to advise and assist beneficiaries,
it is the beneficiaries that ultimately suffer.
You have heard from us many times on the continuing
problems of overpayments to Title II and Title XVI
beneficiaries. Overpayments represent a significant barrier to
beneficiaries' ability to take advantage of SSA's work
incentives. A major improvement in service delivery would be
for SSA to establish a reliable, timely method of collecting
and recording information about a worker's earnings. We
appreciate the inclusion in H.R. 743 of a requirement that SSA
provide a receipt to the beneficiary whenever a change in
earnings or work status is reported. To avoid overpayments
altogether, we are further encouraged by the agency's other
efforts to improve recording of earnings reports. We support
removing SSA's administrative budget, like its program budget,
from any overall limits in discretionary spending. Your
Subcommittee has had a longstanding interest in this issue and
understands the many benefits that would derive from such a
move. With regard to the disability backlog and process
changes, we urge commitment of resources and personnel to
resolve the exorbitant waiting times and make the claims
process work better for people with disabilities. Mr. Pomeroy
used the term unconscionable, and we agree that it is
unconscionable that thousands of vulnerable people should have
to wait on average 3 years for the agency to make a final
decision on their benefits. We strongly support efforts to
reduce unnecessary delays for claimants and to make the process
more efficient so long as any changes do not effect the
fairness of the process to determine a claimant's entitlement
to benefits.
Since any changes to this process will have a major effect
on people with disabilities, the Commissioner should engage in
extensive discussions with disability community advocates in
order to ensure that goals are achieved without unintended
harmful consequences. We commend Commissioner Barnhart for her
strong commitment to improving the technology used in the
disability determination process. Many problems can be
addressed with improved technology, such as her initiatives for
an electronic disability folder, the AeDib, digital recording
of hearings and video teleconferencing of hearings. Finally, I
would just like to add a word of thanks for the Commissioner's
comments about the employment networks and pay stubs. I think
that will be a major help to encouraging providers to come into
the Ticket to Work Program. I would also echo the GAO's
comments about CDRs and medical improvement expected (MIE), and
the denial of tickets to people in that status, that is
something we have been interested in for a long time. On behalf
of the Consortium for Citizens with Disabilities Task Forces on
Social Security, and Work Incentive's Implementation, I thank
the Chairman and the Members of the Subcommittee for the
opportunity to testify. Look forward to any questions you may
have. Thank you.
[The prepared statement of Ms. Prokop follows:]
Statement of Susan Prokop, Associate Advocacy Director, Paralyzed
Veterans of America, Co-Chair, Work Incentives Implementation Task
Force, and Member, Social Security Task Force, Consortium for Citizens
with Disabilities
Chairman Shaw, Representative Matsui, and Members of the
Subcommittee, I thank you for this opportunity to testify regarding the
Social Security Administration's Service Delivery Budget Plan.
I am an Associate Advocacy Director at Paralyzed Veterans of
America. I am testifying here today in my role as a co-chair of the
Work Incentives Implementation Task Force and a member of the Social
Security Task Force of the Consortium for Citizens with Disabilities.
CCD is a working coalition of national consumer, advocacy, provider,
and professional organizations working together with and on behalf of
the 54 million children and adults with disabilities and their families
living in the United States. The CCD Social Security and Work
Incentives Implementation Task Forces focus on disability policy issues
in the Title XVI Supplemental Security Income program and the Title II
disability programs.
PROVIDE SSA WITH ADEQUATE RESOURCES TO
MEET CURRENT AND FUTURE NEEDS
We urge commitment of resources and personnel to resolve the
waiting times and make the process work better for people with
disabilities. SSA must be provided with the resources to fully meet its
administrative responsibilities. To improve delays, better develop
cases, and implement technological advances, SSA requires adequate
staffing and resources. The Commissioner's Service Delivery Budget Plan
shows her commitment to resolving the major issues in service delivery.
We urge your support for the budget for the service delivery plan.
We are concerned about SSA's readiness to deal with the impending
increase in its workload. SSA workloads are projected to begin
increasing rapidly within the next decade as the baby boom generation
begins to reach its peak disability years just prior to reaching early
retirement age beginning in 2008. In addition, the SSA workforce is
also aging and will begin to lose significant numbers of staff,
including senior and leadership staff. About 3,000 employees are
expected to retire per year from 2007 through 2009. SSA is also taking
on new or more complex responsibilities such as providing increased
rehabilitation and employment services for people with disabilities,
completing and maintaining an appropriate schedule of continuing
disability reviews and other eligibility reviews, and new approaches to
prevent fraud and abuse. In addition, the new efforts to assist people
with disabilities to go to work, through the Ticket to Work and Work
Incentives Improvement Act of 1999 (TTWWIIA), require new and expanded
approaches for SSA interaction with beneficiaries.
Adequate staffing levels are critical for these and other efforts
to be successful, especially given the coming disability and retirement
years of baby boomers. Despite these increasing responsibilities, SSA
staff has been reduced by more than 20 percent from 1985 levels. The
CCD Social Security Task Force has voiced concern for some time over
the continued long-term downsizing of the SSA workforce.
As important sufficient numbers of staff are for proper service
delivery, equally important is the need for adequately trained staff.
Our task forces have been made aware that, while SSA may be making
strides toward improving operations, including improvements to their
management information systems, it seems that staffers in the field are
not familiar with long awaited improvements such as the Modernized
Return to Work (MRTW) program. The MRTW effectively ties together a
number of SSA databases to allow accurate information regarding a
beneficiary's record, including paid work activity following receipt of
benefits. Use of this automated system is essential for effective
benefits planning since Benefits Planning Assistance and Outreach
(BPAO) counselors rely on the information of a Benefits Planning Query
(BPQY) when advising beneficiaries about their options for returning to
work. However, according to several reports, some SSA offices do not
use the BPQY. Instead, they may enter the information about the
person's work history manually, a process that results in considerable
delay and contributes significantly to unnecessary overpayments.
The committee has heard from us many times on the continuing
problem of overpayments to beneficiaries in both Title II and Title
XVI. Overpayments represent a major barrier to beneficiaries' ability
to take advantage of TWWIIA. Chronic overpayments to beneficiaries
result from significant delays in, and sometimes complete failure of,
SSA personnel recording earnings reports for working beneficiaries.
Part of the problem may be that SSA workers do not get any credit for
these tasks in their work evaluations. In addition, there is not a
well-defined process for beneficiaries to use in reporting earnings.
Even when beneficiaries are conscientious in reporting their earnings,
overpayments still occur over significant periods of time. When that
happens, beneficiaries are not equipped to know whether the benefit
amount they are receiving is correct or whether SSA has made an error
or failed to record earnings. Over time, overpayments build and it is
not unusual for beneficiaries to be told by SSA to pay back tens of
thousands of dollars. Beneficiaries are so fearful of overpayments and
the inadequate notices from SSA that go with them that the Ticket
program and other work incentives could fail.
A major improvement in service delivery would be for SSA to
establish a reliable, efficient, beneficiary-friendly method of
collecting and recording, in a timely manner, information regarding a
worker's earnings. In addition, SSA must adjust benefits in a timely
manner. CCD has further recommended that Congress require SSA to
forgive overpayments if the beneficiary is not notified within a
reasonable period of time. We appreciate the inclusion in the Social
Security Protection Act of 2003, H.R. 743, of a requirement that SSA
provide a receipt to the beneficiary whenever a change in earnings or
work status is reported. This could go a long way in helping to resolve
some of the problems with earnings reports. We understand that SSA has
begun other efforts to improve recording of beneficiary earnings
reports. We are encouraged by this and urge continued dedication of
resources to resolve this problem.
We support removing SSA's administrative budget, like its program
budget, from any overall limits in discretionary spending. Your
Committee has had a long-standing interest in this issue. Removal of
the limitation on administrative expenses (LAE) from the limit set on
discretionary spending through the budget process would remove SSA from
competition with other health, education, and human needs programs for
limited funds. It would allow for growth that is necessary to meet the
needs of the coming baby-boomer retirement years (including the
retirement of SSA and state DDS personnel); continue the efforts to
improve the processing time for initial applications and appeals;
continue the efforts to ensure integrity in the program through CDRs
and other redeterminations; and allow for replacement of staff in a
timely manner to allow for adequate training and mentoring.
DISABILITY BACKLOG AND PROCESS CHANGES
The backlog of cases waiting for ALJ and Appeals Council decisions
is unacceptably long. People with severe disabilities who by definition
have limited earnings from work are often forced to wait years for a
final decision from the time of application through the final Appeals
Council decision. This is damaging not only to the individual with a
disability and his/her family, but also to the public perception of and
integrity of the program.
Bringing the waiting times down in these two areas must be a high
priority. We urge commitment of resources and personnel to resolve the
exorbitant waiting times and make the process work better for people
with disabilities. First, SSA must be provided with the resources to
fully meet its administrative responsibilities. As noted earlier in
this testimony, this requires that SSA's Limitation on Administrative
Expenses budget authority be removed from the domestic discretionary
spending category.
Recently, a number of proposals to change the disability
determination process have been put forward and we await announcement
of the Commissioner's plan for change. We strongly support efforts to
reduce unnecessary delays for claimants and to make the process more
efficient, so long as they do not affect the fairness of the process to
determine a claimant's entitlement to benefits. While the need to issue
decisions more expeditiously is well documented, this is not the only
consideration. Any proposals for change must balance efforts to improve
the process with ensuring fairness and protecting the rights of people
with disabilities.
In addition, since any changes to the disability determination
process are likely to have a major effect on people with disabilities,
we believe that the Commissioner should engage in extensive discussions
with representatives of people with disabilities in order to ensure
that goals are achieved without unintended harmful consequences. The
CCD Task Forces are willing to work with the Commissioner toward this
end.
In previous testimony before this Subcommittee, we have described
the following features as part of ensuring a full and fair process:
1. The right to a full and fair hearing before an Administrative
Law Judge. The key aspect of the adjudication process for a claimant is
the right to a full and fair hearing by an Administrative Law Judge
(ALJ), who is an independent decision-maker, providing impartial fact-
finding and adjudication. The ALJ asks questions of and takes testimony
from the claimant, may develop evidence when necessary, and applies the
law and agency policy to the facts of the case. Claimants have the
right to present new evidence in person to the ALJ and to receive a
decision from the ALJ that is based on all available evidence. This
should be preserved.
2. Keeping the record open for new evidence. Many recent proposals
to change the disability determination process recommend that the
record be closed to new evidence either after the DDS decision or, at
least, after the ALJ level. In the past, both Congress and SSA have
recognized that such proposals are neither beneficial to claimants nor
administratively efficient for the agency.
We strongly support the submission of evidence as early as
possible. The benefit is obvious: the earlier a claim is adequately
developed, the sooner it can be approved and the sooner payment can
begin. However, there are a number of reasons why closing the record is
not beneficial to claimants including: (1) possible worsening of the
medical condition which forms the basis of the claim; (2) the fact that
the ability to submit evidence is not always in the claimant's or
representative's control, e.g., providers delay sending evidence; and
(3) the need to keep the process informal. Early submission of evidence
also is necessary under current law, which limits the ability to submit
evidence and have it considered at the Appeals Council (must be ``new
and material'' and relate to pre-ALJ decision period) and federal court
(record closed; remand possible if evidence ``new and material'' and
``good cause'' for failure to submit earlier).
Filing a new application is not a viable option because it
does not improve the process and may in fact severely jeopardize, if
not permanently foreclose, eligibility for benefits. A claimant should
not be required to file a new application merely to have new evidence
considered where it is relevant to the prior claim. If such a rule were
established, SSA would need to handle more applications, unnecessarily
clogging the front end of the process.
3. Representing the agency at the ALJ level. We do not support
efforts to have SSA represented at the ALJ hearing because past
experience shows that it does not result in better decision-making and
reducing delays, but instead injects an adversarial element and a level
of formality and technicality in a system meant to be informal and
nonadversarial. In the 1980's, SSA tested, and abandoned, a pilot
project to have the agency represented. It was terminated following
Congressional criticism and a judicial finding that it was
unconstitutional and violated the Social Security Act. In the end, the
pilot did not enhance the integrity of the administrative process.
4. Retain review by the Appeals Council. We oppose the elimination
of a claimant's right to request review by the Appeals Council. The
Appeals Council currently provides relief to nearly one-fourth of the
claimants who request review of ALJ denials, either through outright
reversal or remand back to the ALJ. Review by the Appeals Council, when
it is able to operate properly and in a timely manner, provides
claimants, and SSA, with effective review of ALJ decisions. Given the
low percentage of appeals to federal court, it appears that claimants
largely accept decisions by the Appeals Council as the final
adjudication of their claims. As a result, the Appeals Council acts as
the initial screen for ALJ denials, a position for which the district
courts are not equipped, given their other responsibilities.
5. Access to judicial review in the federal court system. We
believe that both individual claimants and the system as a whole
benefit from the federal courts deciding Social Security cases. Over
the years, the federal courts have played a critical role in protecting
the rights of claimants. The system is well-served by regular, and not
specialized, federal judges who hear a wide variety of federal cases
and have a broad background against which to measure the reasonableness
of SSA's practices.
We urge Commissioner Barnhart to take these concerns into account
in efforts to reduce the backlog in disability cases. In our experience
with the Social Security Administration, we have learned that there is
great value in working together to address problems and concerns before
they reach crisis proportions. We have continued this approach with SSA
under Commissioner Barnhart's leadership and hope that she will be
willing to discuss proposals for change with the disability community
before they are implemented.
Technological improvements. Commissioner Barnhart has made a strong
commitment to improve the technology used in the disability
determination process. We fully support the Commissioner in this
effort, as we believe that much of the delay in the system could be
rectified with improved technology. Several initiatives have been
announced recently that could not only reduce delays, but also provide
better service to the public and not require fundamental changes to the
process, e.g., the electronic disability folder, ``eDIB''; digital
recording of hearings; and video teleconferencing of hearings.
GAO'S DESIGNATION OF THE DISABILITY PROGRAMS
AS ``HIGH RISK'' IS MISPLACED
Earlier this year, the General Accounting Office designated the
Social Security disability programs as ``high risk,'' in part, based on
the agency's reliance on ``outdated'' disability criteria. In an August
2002 report on the disability program, the GAO faults SSA for not
automatically evaluating individuals applying for benefits under
corrected conditions, leading to its ``belief that the programs
themselves have not been fully updated to reflect scientific advances,
because interventions that could enhance individuals' productive
capacities are not, by design, factored into the disability decision-
making process.''
While medical and technological advances are making it increasingly
possible for some individuals, despite severe disabilities, to be
successful in the work place, we should be very cautious when
contemplating any changes to disability criteria, whether statutory or
regulatory, based on such advances. Medical and technological advances
have had a powerful impact on the lives of some fortunately placed
individuals with disabilities and, recognizing this, Congress worked
with the disability community to develop policies and reduce barriers
to employment for persons with disabilities. We thank you, Chairman
Shaw, Mr. Matsui, and all the Members of the Subcommittee for your
leadership in passing the landmark Ticket-to-Work and Work Incentives
Improvement Act of 1999. However, these medical and technological
advances are clearly not universally or uniformly available to all who
need them.
Therefore, it would be wrong to base eligibility for disability
benefits using the assumption that medical or technological advances
would be available to mitigate the functional impact of a disability.
In fact, many of the services and supports people with significant
disabilities need to work, such as personal assistances services,
prescription medications, or durable medical equipment, are available
to them only through Medicare and Medicaid. As you know, a primary way
people with disabilities access Medicare and Medicaid is through the
Title II and SSI disability programs.
Obviously, it is impossible at this time to ensure that all the
technology, medications, and support services necessary are available
to all people with every type of disability. Until that point comes, we
have several recommendations.
First, as mentioned above, when considering any changes in
disability eligibility criteria, whether to the statutory definition,
the five-step disability determination process, or the listings,
Congress and the Social Security Administration should not assume that
mitigating supports are available.
Second, the definition of substantial gainful activity (SGA) must
be addressed. Granted the SGA level is now indexed for inflation.
However, the base, now $800 per month, should be re-examined in
relation to what it defines: substantial gainful activity. If $800 per
month is all a person is able to earn, we find it hard to call that
amount either ``substantial'' or ``gainful.'' In this economy, you
cannot pay rent or utilities and buy food for a month at that level of
earnings. The issue may lie with the implementation of the SGA
standard, rather than the concept of SGA. Further, there is a different
SGA level for non-blind persons with disabilities than for blind
individuals. We support raising the SGA level for non-blind disabled
individuals to the same level as for those who are blind.
Finally, the federal disability programs were created assuming that
people with disabilities would remain unable to work throughout their
lives. This static view of disability meant that little thought was
given to what might happen if people returned to work after receiving
benefits. Consequently, in Title II disability programs, the same
requirements must be met to stay on the program as it took to qualify.
This has the perverse effect of forcing people to diminish their work.
For example, under the Title II disability rules a person can earn
only $800 a month. Earning even one dollar above that amount (after the
nine-month trial work period) means a person loses every dime of their
disability cash assistance. For example, a person could have a monthly
Title II disability benefit of $700 and a monthly paycheck of $791. But
if they receive a two dollar and fifty cent a week raise, fifty extra
cents a day or ten dollars a month, they lose all of their $700 monthly
SSDI check. Clearly, it is not a very attractive trade-off. This policy
is known in the disability community as the cash-cliff.
A far more reasonable approach to earnings is found in the SSI
program where a person loses one dollar in benefits for every two
dollars they earn. The latest data from SSA indicate that from 1987 to
2001 the number of working SSI beneficiaries doubled. It should come as
no surprise that while one-fifth of working SSI beneficiaries earn
above the SGA level, there is hardly anyone in the DI program going
over the SGA. This is in spite of the fact that SSI beneficiaries
typically have weaker employment records, are typically less well
educated, and are far poorer than their DI counterparts. The SSDI
policy appears to encourage individuals to work but penalize them for
advancing to a point where they could financially consider moving off
of SSDI. Additionally disconcerting are SSI asset restrictions,
creating circumstances where work is rewarded but accumulation of even
a small amount of savings is penalized. This is a policy that appears
to ensure that people on SSI will remain an economic underclass.
We have long advocated for a sliding scale cash benefit offset for
beneficiaries in the Title II disability programs who work and
loosening restrictions on assets for working people with disabilities
on SSI. We again urge Congress to remove these barriers to work. We
recognize that SSA is required to study a benefit offset in Title II.
Until such a policy is enacted, a disconnect will remain between the
definition of disability and desire of beneficiaries to work to their
fullest potential.
______
On behalf of the CCD Task Forces on Social Security and Work
Incentives Implementation, I thank the Chairman and the Members of the
Subcommittee for the opportunity to testify and I look forward to any
questions you may have.
ON BEHALF OF:
American Congress of Community Supports and Employment Services
American Council of the Blind
American Network of Community Options and Resources
American Psychiatric Association
Goodwill Industries Inc.
International Association of Psychosocial Rehabilitation Services
National Association of Developmental Disabilities Councils
National Association of Protection and Advocacy Systems
National Law Center on Homelessness and Poverty
National Multiple Sclerosis Society
National Organization of Social Security Claimants' Representatives
NISH
Paralyzed Veterans of America
The Arc of the United States
Title II Community AIDS National Network
United Cerebral Palsy
<F-dash>
Chairman SHAW. Thank you. I would like to direct the
question here to Mr. Robertson and Ms. Koontz with regard to
the cause of delays experienced by disability applicants. Now,
we have heard an awful lot about the lack of electronic files
to move these things along. That, obviously, is being addressed
by the Commissioner. We look forward to some great results. How
hard or overworked or underworked are the administrative law
judges that are hearing these cases? Are they working shorter
days or longer days than they should? Is there a problem with
regard to the workload undertaken by the judges?
Mr. ROBERTSON. Well, I will try to field that question.
Basically, there is a big problem with processing claims at
hearing offices. We talked earlier this morning about some
relief in terms of hiring additional administrative law judges
to help mitigate some of those processing problems. So, while
that is a problem, hopefully, there are some actions to address
it.
Chairman SHAW. Yet you haven't answered my question.
Mr. ROBERTSON. Oh, I will try again.
Chairman SHAW. My question is, are the judges overworked or
not working hard enough?
Mr. ROBERTSON. I can't answer that question.
Chairman SHAW. Ms. Koontz, can you address that? That is
something that I think we ought to really find out about. Are
we utilizing the assets that we have to the full extent?
Because the judges have a great deal of latitude as to setting
the pace of their workload. I think this is something that we
should look at and see if some of the problems in the
disability insurance program are because SSA is underutilizing
some of these assets, human assets, that we have in the line.
Mr. Robertson, you mentioned, you said something, and I hope I
misunderstood you. Did you say that it takes 3 years for
somebody--yeah, 3 years to get in the Ticket to Work Program?
Mr. ROBERTSON. This goes back----
Chairman SHAW. What in God's name is wrong with that? That
is a great program. If somebody has a job offer and they want
to go to work, they have got to wait 3 years? The job is gone.
Mr. ROBERTSON. This goes back to the point that we were
discussing earlier about the MIEs. The people that are put in
the category of MIE are deferred Tickets to Work. The rationale
being that those people would be expected to improve on their
own without the ticket assistance. The problem is that many of
those people, upward of 95 percent of them, actually don't
improve by the first CDR. As a result, you have this big group
of people who don't have access to the ticket that could help
them get back to work. The 3-year period basically is a
combination of scheduling and conducting the CDR. The people in
the MIE category are scheduled for a CDR, I believe within an
18-month timeframe; then there is the time to actually conduct
the CDR.
Chairman SHAW. What is the process here? I am disabled. I
am unable to pursue my general line of work, but I do find a
niche where I think I might be able to succeed. Congress passed
the Ticket to Work so somebody could go ahead and venture out
into the workforce, knowing that they had that safety net that
if it didn't work out, they could come back into the program
without a long delay and that certain benefits would continue
even as they were trying to work. We passed the bill mainly for
the most courageous people who are on SSI that really want to
do something and get out and make something of themselves. Now,
that person comes in, regardless of whether medical improvement
is expected, we just want to be able to say, okay fine, you can
go. If it doesn't work out, come on back, and we will put you
back on the program. Now, is that taking 3 years?
Mr. ROBERTSON. Yes, that can take 3 years.
Chairman SHAW. Why in God's name would we take 3 years to
tell somebody they can work? I think this Committee needs to
have a hearing on that, because one of the proudest
accomplishments that I think we have had on this Subcommittee
since I have been Chairman, is the Ticket to Work. It can't
possibly work if there is a 3-year delay in hiring.
Mr. ROBERTSON. If I can just elaborate on that a little bit
to give you some of the circumstances that make this a little
more complicated than we have been talking about. Number one,
we are talking about one of three groups of people. We are
talking about those who are classified as MIE. Those people, as
I said earlier, aren't given a ticket or are delayed given a
ticket under the assumption that they will improve without
assistance and get back into the workforce. As I said, there is
a problem with categorizing those people because there is a
large number of people, large percentage of those people, who
actually don't improve. Some people have said the way you solve
that problem and get the ticket to them quickly, is to just say
okay give everybody a ticket--give all those people in that
category a ticket. Here's the slight rub with doing that: If
you are actively working on a ticket, you can't have a CDR. So,
basically, there is a program integrity problem if you did it
that way--gave everybody a ticket in the MIE category. There
are some other options that possibly could be used that would,
as you are indicating, get tickets to people earlier and get
tickets to the right people earlier. That would be a couple
things. Number one, if you were better able to categorize
MIEs--and we would be pushing a better categorization through
the use of a more analytical, quantitative analysis of a
person's condition at the time they come into the program--if
you better categorize those people initially, you basically
increase the number of people who are not in the MIE category
and they would have access to tickets. Things would be better
for them. That is one part of the potential action you could
take. The other thing you could do, either in addition or in
combination with this would be to--and this would probably
require a law change--in essence say, okay, we are going to
give the people in MIE category tickets, but we are not going
to exempt them from CDRs. So, those are a couple of the options
that might better get tickets to a larger number of people more
quickly. I should note that SSA is taking a hard look at this
policy right now to see what it can do to address the problems
that we have been talking about.
Chairman SHAW. Well, I think for the Ticket to Work Program
to be really successful or to accomplish its full potential, we
have got to develop a better way of doing this. You know, go
into a grocery store and you have an express line if you have
10 or less items. Well, if somebody has fewer complications,
why can't we have an express line so that they can get into the
Ticket to Work Program and into the workforce. I would guess
that most people who want to get into the Ticket to Work
already have a pretty good idea of where they are going to go
to work. If 3 years passes, nobody can project whether that job
is even going to be there.
Mr. ROBERTSON. Right. I agree. I want to make sure that I
emphasize the up to 3-year waiting period. We are talking about
some people in the MIE category, not the other categories.
Okay?
Chairman SHAW. What about the other categories?
Mr. ROBERTSON. I am sure it is much shorter than that. I
don't know what the time is.
Chairman SHAW. How short. Does anybody know?
Mr. ROBERTSON. Immediate access.
Chairman SHAW. So, what I am talking about is already in
place?
Mr. ROBERTSON. For the non-MIEs.
Chairman SHAW. All right. Fine. Mr. Pomeroy.
Mr. POMEROY. Goes to show what a good idea it was anyway,
Mr. Chairman. I am interested in this AeDib Initiative.
Technology has significantly increased productivity in our
country, it has made wonderful changes. Same time, there has
been an awful lot of money spent, expensive consultants hired,
elaborate systems built that at the end of the day didn't work.
The thing has got to be field tested and demonstrated what
works in real life, as opposed to some kind of academic
technological success that really isn't of value to the people
using the system if we are making a net contribution to this
thing. Ms. Koontz, your testimony seems to indicate it is a
well-intentioned effort, it is moving along, but a lot of
questions as to actual viability have yet to be answered. Is
that the essence of what you are telling us?
Ms. KOONTZ. I think that would be correct. The questions
about viability will be answered by things like the upcoming
pilot test that they are doing of the technology that supports
the electronic folder. That is very important. Our caution
there is that there be enough time to incorporate those results
into the system that they plan to deploy over an 18-month
period to the various offices across the country. In addition,
we make a point also about end-to-end testing.
Mr. POMEROY. Do you think on that point--and I certainly
don't fault the administration of SSA, I mean they have got
some ambitious goals, and we are asking them to have ambitious
goals in terms of improving service delivery, this is a major
strategy to do it--do you think that they are presuming success
in the pilots without just running the pilot demonstrations and
then calmly evaluating it before--without a presumption almost
of success and ultimate implementation system wide?
Ms. KOONTZ. I don't think I am in a position to presume to
know what their assumptions are about going forward.
Mr. POMEROY. As you speak about short timeframes, it would
almost give that impression anyway.
Ms. KOONTZ. It may, but I don't think we are trying to make
that definite a statement about that particular effort. I think
our concern is that SSA stick with the proven kinds of
techniques that we know from our past work, are most likely to
result in success.
Mr. POMEROY. What are they?
Ms. KOONTZ. Based on our work so far, that would be the
pilot testing. It is a good technique. They need to make sure
that the results are incorporated into the system. They do not
plan to do end-to-end testing, which is to say, how do the
various components, when you put them together, work? This is
very important in terms of knowing whether the system is going
to work. We would like to see that happen before deployment is
started.
Mr. POMEROY. End-to-end testing presently is not part of
what?
Ms. KOONTZ. Is not currently planned.
Mr. POMEROY. Now, what will they--what part of end-to-end
testing are they leaving off?
Ms. KOONTZ. My understanding is they are testing the
individual components, which is good, but a test to put the
components together and see if they operate together
effectively, that part is not yet planned.
Mr. POMEROY. Would it significantly delay the process to
put that part together? Is the other end not quite developed
yet?
Ms. KOONTZ. What SSA has told us is that, first of all,
their final testing strategy is not yet in place. They haven't
finalized that. On the other hand, they did note to us that
they said end-to-end testing would delay implementation by, I
think, 6 months in order to see a case go through the whole
system, in order to do that test. That is where we stand right
now, based on our ongoing work.
Mr. POMEROY. I wish we had the Commissioner still at the
table, we could have a little back and forth on their
rationale. I don't have enough to presume that that is an
inappropriate conclusion. I don't know enough to presume it is
an inappropriate conclusion, but obviously, this does lend
weight to the thought that maybe the timeline for
implementation is a little shorter than it ought to be to fully
evaluate this new technology. End-to-end would seem to me to be
an obvious--an essential component of the testing strategy. We
certainly don't want something that somewhere along the line
falls short of producing a conclusion on a file and ultimate
resolution. That is not going to work. On the other hand, they
may have perfectly legitimate rationale for why timelines
within the system won't allow end-to-end without a delay that
really isn't related to underlying system performance. Well, I
am going to--I will pursue this with SSA. I am pleased to hear
that it is in formative stages. Maybe if we prod them in this
way, unless they have very good reasons not to do end-to-end.
Thank you, Mr. Chairman. I yield back.
Chairman SHAW. Mr. Becerra.
Mr. BECERRA. Thank you, Mr. Chairman. Ms. Koontz, let me
follow up with that a bit. In your report, you also mentioned
that you heard back from some State representatives, who deal
with disability claims--that they had not been sufficiently
consulted by SSA in the process of establishing this electronic
processing system for the disability claims. To your knowledge
has that been resolved, that lack of participation or notice to
the regional State representatives?
Ms. KOONTZ. My understanding is that this condition still
exists but, when we did talk about SSA officials yesterday,
they indicated that they were going to do more to talk
particularly to the State DDS officials and provide them
additional details on how AeDib is supposed to operate in the
future.
Mr. BECERRA. Commissioner Barnhart seemed very optimistic
about the system, and I hope she is right because it would help
us process the claims. Do you believe that SSA has taken
sufficient notice from GAO and its report that indeed it should
try to resolve this issue of trying to provide additional input
or notice to the State representatives? Also, on the issue of
having some end testing in place to try to check to see if this
is actually going to be a system that works--do you get that
sense that they picked up on that and are responding to your
concerns?
Ms. KOONTZ. We had the discussion, one of many discussions,
just yesterday with SSA officials in preparation for the
hearing. They would probably tell you that they don't think
that the concerns of the DDS State officials are as great a
problem as we think that it is. We think it is quite
significant. On the other hand, they were also saying, well,
yes, we are going to do more to communicate with the State, the
State people, and we are going to try to articulate a better
overall vision of what we are going to do and provide more
detail. So, in that sense, I would have to say that I think
they are responsive to the concern at this point.
Mr. BECERRA. They have at least been put on notice. We
don't want to have to come back here, and say we told you so.
Certainly, GAO doesn't want to come back and say that. So, you
will have continued discussions with them on this?
Ms. KOONTZ. Yes, on this and a number of other issues.
Mr. BECERRA. Ms. Prokop, a couple quick questions. Speaking
on behalf of the disability community, or as an advocate for
the disability community, give me a sense if your level--if you
are satisfied by the level of inclusion by the advocacy
organizations within the SSA's reform process? Have you been
included enough, do you feel like you all have been able to
participate and give your input into this reform process under
way by the Administration?
Ms. PROKOP. We have generally found Social Security among
the more welcoming of agencies for disability community input
in a variety of facets. So, I think my colleagues on the task
force would generally agree with that impression that I have.
Mr. BECERRA. If there are any areas that you would like to
provide more input, this is a great chance to let us know so we
can advocate on your behalf, as well as to work with SSA, to
make sure that your input is taken by the SSA.
Ms. PROKOP. Well, I think one of the things I know that a
number of my colleagues on the Social Security Task Force would
probably want me to emphasize, and it is outlined in our
statement, is the fairness of the disability claims process. We
have outlined, in our written statement, a number of steps that
we believe are important to ensuring fairness of that process
with regards to administrative law judges and keeping the
record open. I would certainly hope that the Subcommittee would
key into some of those pieces that we think are important.
Mr. BECERRA. You had a chance to talk to the SSA about
those concerns that you have had?
Ms. PROKOP. I believe that we have, yes.
Mr. BECERRA. Those are ongoing discussions? I suspect that
they have heard--this is something you have expressed in the
past, so it is not something new. So, hopefully, you will
continue to have that dialog with SSA on that particular point.
Let me ask you with regard to one of those concerns that you
mentioned in your written testimony, the adjudication process.
There is some talk of perhaps instituting a preliminary
adjudication process that would be outside of a part from the
regular process involving administrative law judges. So, that
you could have a preliminary decision that wouldn't be issued
by an administrative law judge but by someone who would
obviously be trained to be able to cast some decisions. This
would probably help us try to move certain cases along that
seem fairly clear one way or the other. Your thoughts ongoing
in a direction of providing some type of preliminary
adjudication without an administrative law judge performing
that adjudication.
Ms. PROKOP. Well, I would defer to some of my task force
colleagues who are a little more familiar with the legal
processes of the whole disability claims determination process.
I do know there is a strong interest among members of our task
force in making sure that there is as much information at the
up front part of the process as opposed to having to draw out
the whole claims process. If the claimants know what it is they
are supposed to provide the adjudicators at the outset, and are
given time to collect that information and get it in at the
beginning, it seems to us to make the process a lot shorter and
a lot easier and a lot fairer. If there are particular details
about this issue that I am missing, I would like to take that
back to my colleagues who have a greater handle on details
about this process and perhaps we can supply that for the
record.
Mr. BECERRA. Let me ask that you do so. In fact, on any of
the points that you raised because there were some important
points that is you raised in your written testimony that,
obviously in 5 minutes, you couldn't elaborate on within 5
minutes of oral testimony. If you do provide us with some
guidance, especially on your concerns with regard to some of
these potential reforms, especially in regards to, for example
the adjudication processing expanded to include a non-
administrative law judge setting. An administrative law judge--
some will say sometimes these judges aren't adequately trained,
don't make great decisions. At least we know they have gone
through enough training to be adjudicators. I know there is
always that concern expressed in trying to accelerate the
process that sometimes we put in place systems and individuals
who aren't equipped to handle some of these claims. You are
making perhaps not life and death decisions, but close to it on
occasion. I know that someone would not want to find that they
have received short shrift of their claim by someone who wasn't
fully trained to adjudicate these things. I would be interested
to hear your thoughts. Because we do have to try to find a way
to accelerate the process to remove the backlog. If you don't
mind having some of the advocacy groups respond in writing to
some of the concerns that you outlined generally in your
statement.
Ms. PROKOP. We would be happy to do that.
Mr. BECERRA. Thank you all for your testimony.
Chairman SHAW. I thank these witnesses, too. We very much
appreciate your taking the time to come up and to share your
knowledge with this Committee. It is important that as the
Committee of jurisdiction we stay in close touch with what is
happening. I want to plan, after the break, hearings on several
things. I think we need to take a closer look at the Ticket to
Work Program to be sure that the program is working the way
that we want it to. I also want to look into the workload that
judges have--how hard they are working. I am sure that we will
probably find that there are some who are very aggressive and
working very hard, and some who aren't carrying their load. Yet
that will be for a future hearing to determine. It is important
that we see that the system we have is working and that it is
accomplishing what the Congress intended it to do. Our
constituents expect that for the money that they pay in, not
voluntarily but by law, into the Social Security system, the
program will work. Thank you very much, and thanks to the
Members for being here. We are adjourned.
[Whereupon, at 11:44 a.m., the hearing was adjourned.]
[Questions submitted from Chairman Shaw to the Honorable
Barnhart, Mr. Robertson, Ms. Koontz, and Ms. Prokop, and their
responses follow:]
Questions from Chairman E. Clay Shaw, Jr. to the Honorable Jo Anne B.
Barnhart
Question: To meet the objectives in the Service Delivery Budget
Plan, productivity at the Social Security Administration (SSA) must
improve an average of 2 percent each year. The Service Delivery Budget
Plan calls the productivity goals ``optimistic.'' Can you explain why
the productivity goal is optimistic and how the agency will improve
productivity by an average of 2 percent or more a year?
Answer: The Social Security Administration's (SSA) Service Delivery
Budget (SDB) Plan includes initiatives that are expected to produce
workyear savings, enabling us to process work more efficiently. The
workyear savings mean increased productivity--i.e., the same level of
work processed with fewer workyears. From Fiscal Year (FY) 2004 through
FY 2008, the period covered by SSA's multi-year SDB Plan, our goal is
to achieve an average of at least 2 percent per year improvement in
productivity. Workyear savings are budgeted for specific automation
initiatives and other process changes, and activities are underway
throughout the Agency that will add savings and help us reach our
productivity improvement goal.
Although SSA realized an impressive 5-percent increase in
productivity in FY 2002, largely through the efforts of its dedicated
employees, we cannot expect that experience to continue every year. In
FY 2001, productivity decreased when compared to FY 2000. It is
unrealistic to expect productivity improvement to continue at the FY
2002 rate--it is more reasonable to assume that over time, we will have
a modest annual increase in productivity with some increases and
decreases depending on specific workloads processed and initiatives
implemented. Although we consider an annual average of 2 percent per
year sustainable, systems changes and other enhancements are critical
factors in making this happen.
In recent years, SSA has achieved substantial productivity gains
from automation. While further advances in automation are key to SSA's
productivity improvement goal of 2 percent per year highlighted in our
SDB Plan, actual productivity improvements will depend on how quickly
we can achieve efficiencies. Additional workyears also can be needed
for training and other startup costs associated with implementation of
new initiatives.
Systems enhancements to our Title II and Title XVI programs will
produce savings over the course of the SDB Plan. A major Agency
initiative in the SDB Plan is the Accelerated Electronic Disability
Process (AeDib), which will move all components involved in disability
claims adjudication and review to an electronic business process
through use of an electronic disability folder. We will begin national
rollout of AeDib in January 2004 in the Atlanta Region, which includes
the States of Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, and Tennessee. This project is a major factor
in making the disability process more efficient and faster and
contributes to our savings estimates for FY 2005 through FY 2008.
The FY 2004 budget provides employees with the support needed to
continue their efforts through improvements in automation and other
investments that will enable them to process increasing workloads more
efficiently.
Question: For fiscal year 2003, the SSA expects to save 334 work
years by increasing automation of the toll-free 800 telephone service.
Then, between 2004 and 2008, the agency expects to save another 1,935
hours by automating the phone line, an additional 387 hours per year.
With all of this automation will it be possible to reach a live SSA
employee by phone in 2009?
Answer: Although a significant number of calls to the 800-number
are completely automated, agent service will remain available for all
callers to SSA's toll-free national 800-number.
The annual workyear savings displayed in the SDB Plan for this
initiative represent savings in each fiscal year as compared to FY 2001
experience. Total annual savings for this 800-number automation
initiative (387 workyears) are expected to be fully realized in FY
2004. In FY 2003, the initiative already will have achieved savings of
334 workyears when compared to FY 2001. For FY 2004, we estimate that
an additional 53 workyears of savings would be realized over FY 2003
experience, for a total of 387 workyears. We expect to maintain this
level of annual workyear savings for 800-number automation for FY 2005
through FY 2008. There are no additional savings over FY 2001
experience beyond FY 2004.
These savings represent improvements to the process. For example,
major savings were achieved with the move to next available agent
technology. This new call routing technology treats all incoming calls
as a single queue, routing them directly to agents not currently
handling a call, rather than to separate queues at each teleservice
center. Further, it enables callers to request a Spanish speaking
agent, making efficient use of SSA's Spanish language capabilities
nationwide.
Continuing efforts to increase automation services and improve on
our current processes will make it easier for callers to reach a live
agent. Our public surveys indicate that many callers prefer using
automation and are satisfied with the service. Certain simple, high
volume workloads (e.g., requests for Social Security number
applications, replacement Medicare cards, and so forth.) are ideally
suited for automation and do not require handling by an agent. Having
these issues handled by automation will free up agents to answer calls
from individuals who either need or prefer to speak to an agent.
Question: Other aggressive productivity improvements include 1,850
hours in work year savings (from fiscal year 2003 to fiscal year 2008)
by redesign of Title II. Can you explain in greater detail how the
redesign will improve productivity?
Answer: Title II Redesign is an ongoing automation initiative with
periodicnew software releases that eliminate or reduce manual efforts
required to process work. The initiative focuses on retiring older
software program systems in the Processing Centers that require
extensive manual work on postentitlement actions.
The annual workyear savings displayed in the SDB Plan for this
initiative represent savings in each fiscal year as compared to FY 2001
experience. Total annual savings for this initiative (407 workyears)
are expected to be fully realized in FY 2005. In FY 2003, the
initiative will have achieved savings of 36 workyears when compared to
FY 2001. For FY 2004 and FY 2005, we projected that additional
incremental savings would be realized to achieve full year savings of
407 workyears on an annual basis by FY 2005. We expect to maintain this
level of productivity attributable to Title II Redesign for FY 2006
through FY 2008.
The FY 2004 Title II Redesign plan includes automation enhancements
on activities such as:
<bullet> Replacing older software systems that generate manual
actions with automated processes;
<bullet> Automating calculations, release of payments, and notices
for about 25,000 Benefit Rate Increase actions;
<bullet> Automating calculations, release of payments and notices,
and recording fees collected for about 180,000 attorney fee actions
annually;
<bullet> Automating the release of approximately 60,000 Spanish
language notices regarding special payments; and,
<bullet> Enhancing software to allow more Workers' Compensation
actions to be processed in field offices while simultaneously reducing
the amount of time it takes to process those actions.
The following provides additional technical detail about this
initiative:
Title II Redesign is a multi-stage, multi-year initiative that is
an umbrella for a variety of enhancements to Title II Claims and Post
Entitlement workload processing. Title II Redesign provides a
standardized input format for all Agency transactions. This will lead
to ``one stop shopping'' at the beneficiary's first point of contact
with the Agency. Title II Redesign allows for increased automation and
online processing. This decreases the number of exceptions or actions
that require additional work by staff. In addition, multiple
transactions are now processed in the same day. Title II Redesign
expands automation by reducing manual tasks, eliminates redundant data
entry, and improves the quality of data stored in SSA master records.
It is through these improvements that the Agency realizes improved
productivity.
Specific examples of efficiencies and productivity improvements
achieved through Redesign to date include:
<bullet> Workers' compensation reports are processed in field
offices utilizing improved front-end systems that eliminate the need
for most Processing Center actions. This allows the Field Offices to
complete processing at the first point of contact.
<bullet> Processing efficiencies were increased and have resulted
in 99.52 percent of actions updating to the Master Beneficiary Record.
Redesign releases to be implemented in FY2004 will provide
productivity improvements in work associated with student reports, many
reported status changes, and most termination and suspension events.
Enhancements to the online processes, including online editing, will
result in more work completed in the field in less time, with less
service delivery delays, and fewer exceptions to be worked in the
processing centers. By continuing the Agency investment in the Redesign
process, more efficient and productive whole case processing will be
achieved. We will also enhance month-to-month accounting and provide
for a more centralized accounting functionality for our business
processes.
Question: If these productivity gains fail to materialize, what
will be the impact on the agency's operations?
Answer: Achieving the productivity savings reflected in the SDB
Plan is vital to the success of this multi-year plan. If gains from
SSA's productivity initiatives fail to materialize, the Agency would
require additional workyear resources to process the budgeted
workloads.
However, we are committed to achieving the productivity gains
reflected in our SDB Plan. With adequate resources, including funding
in FY 2004 at the level requested in the President's budget, we fully
expect we will be able to achieve our productivity goals.
Question: A solid quality management system should produce the
comprehensive program information that policy makers need to guide
disability policy and procedures and to ensure accuracy and consistency
in all levels of decisionmaking. Inconsistency of decisions among
decisionmakers has been highlighted as a key challenge facing the
agency. You have been exploring ways to implement a new quality
management system. Can you tell us about the status of this system and
your plans for the future?
Answer: The Disability Insurance program is our major program
challenge, both in terms of the volume of work that we handle each year
and the challenge to make the right decisions in a timely manner. Major
changes are underway to improve the overall efficiency of the
disability program, even as we expect our workloads to grow
significantly over the coming years. A critical piece in improving the
way we do business is ensuring that our quality process is aligned with
our new business process.
In April 2002, I formed the Quality Management Workgroup under the
leadership of one of SSA's Senior Managers to stress the importance of
quality throughout the organization. The group was tasked with
developing a proposal on what quality should look like for each of the
Agency's business processes, i.e., claims, post-entitlement actions,
informing the public, enumeration, earnings and all support activities.
To ensure that the emphasis on quality continued, I made this group a
permanent staff under the leadership of the Chief Strategic Officer.
The initial task of this staff was to define the elements of
quality for the Agency. The Agency-level definition of quality in SSA
means providing service that meets the needs of the people, balancing
accuracy, timeliness, productivity, cost and service. The Quality
Management staff works with the components to ensure that these
elements of quality are integrated into our policies, processes, and
systems.
Additionally, to keep our employees focused on quality and to share
operational workload practices, the Quality Matters report is published
regularly on the SSA Intranet and made available to the approximately
80,000 SSA/DDS employees. For example, the May edition of the report
was a special edition that highlighted the Agency's efforts in the
disability area and featured information about the Accelerated
Electronic Disability process, efficiencies in obtaining medical
evidence, the Ticket to Work Program, and so forth.
To further address systemic quality issues, I have engaged an
independent contractor to review the entire quality process, beginning
with the Disability Insurance program. The contractor will examine what
we do now and develop practical recommendations for improvements. A key
factor in this effort is securing input from SSA and DDS employees on
how the current quality process works. Beginning August 19, selected
employees across the nation are completing a survey to provide
valuable, first-hand information on the disability process. These
responses will be used to help the independent contractor document our
current process and develop short and long-term recommendations. These
recommendations for improvements, coupled with the program changes that
we are developing, are expected to result in improved quality service
to our citizens and increased stewardship of the disability program.
Question: At a recent Subcommittee hearing, the U.S. General
Accounting Office (GAO) demonstrated how some of its agents were able
to obtain Social Security numbers (SSNs) for a child under age 1 using
fraudulent documents. The GAO proved that failure to verify birth
certificates for these babies with the appropriate state or local
agency is a serious vulnerability in the SSN issuance process. Have you
re-evaluated this policy? If yes, what have you concluded?
Answer: Over 90 percent of all original SSNs are issued via the
Enumeration at Birth (EaB) program in which parents of newborns elect
to receive an SSN for their newborn as part of the birth registration
process. Information is sent directly from the hospital to the State
Bureau of Vital Records and then to SSA. The EaB process is highly
secure. For those who elect not to utilize EaB, and who are over the
age of 1 at the time of application for a SSN, we verify the birth
certificate presented in support of the application with the custodian
of the record.
We have not yet instituted a similar policy of collateral
verification for children under age 1 because we have been concerned
about the significant disadvantages that will be experienced by
citizens; such a policy could result in long delays in SSN issuance.
Some State agencies require as many as 19 weeks after birth before they
are able to record a birth and before they would be in a position to
verify a birth certificate. The ability to file income tax forms on a
timely basis may be impacted if parents are not able to obtain an SSN
for a young child in a timely fashion.
However, in part because of the issues raised by GAO, we are
working in partnership with the National Association for Public Health
Statistics and Information Systems (NAPHSIS) to study the potential for
fraud in this population, and to determine the best way to address it.
We will evaluate the results of the study to determine whether a change
in policy is warranted.
Question: The GAO also said that according to current procedures,
the agency could issue up to 52 replacement Social Security cards per
year to individuals. Also, they said the evidence requirements for U.S.
citizens seeking replacement SSN cards were less stringent--they could
use documents like church membership cards or health insurance cards to
obtain a replacement card. Are you planning to address these issues?
How?
Answer: SSA shares concerns about the issuance of replacement SSN
cards. It is currently possible to issue up to 52 replacement cards to
an individual annually because systems controls allow the issuance of
an SSN card after 7 days of a previous request. However, our data
indicate that most people request three or fewer SSN replacement cards
per year. During a recent sampling of replacement SSN cards issued
during a 1 year period, we found that only about 1.5 percent of all
replacement cards were issued to people who requested 3 or more cards,
and less than 0.3 of 1 percent of replacement cards were issued to
people who requested more than three cards.
We are looking into setting limits on the number of replacement
cards an individual can get per year, and in a lifetime, to help close
this potential opportunity for SSN misuse, and would be interested in
your reaction to this idea.
Regarding concerns about the evidence requirements for citizens
requesting replacement cards, SSA applies the same standards for
evidence of identity for individuals (citizens or noncitizens) seeking
replacement cards as it does for individuals seeking original SSNs. We
require that, in order to be used as evidence of identity, the document
must have been established at a later time and for a different purpose
than the birth record and be of recent issuance to establish the
individual's continued existence. Furthermore, SSA interviewers ask
applicants to provide documents that show the person's name and
biographical information that the reviewer can compare with the data on
the Application for a Social Security Card-Form SS-5 (e.g., the
person's name, as well as age, date of birth, or parents' names) and/or
physical information that the reviewer can compare with the applicant
(e.g., physical description, photographic identification).
Question: The GAO recently demonstrated how some of its agents were
able to obtain driver's licenses using the SSNs of deceased
individuals, even in states that verify SSNs with the Social Security
Administration by sending a ``batch'' of SSNs to the agency
electronically. The GAO said that while the SSA verifies whether a SSN
belongs to a dead person if the state uses the agency's online
verification system, it does not if the state uses the ``batch''
system. Furthermore, the GAO reported that there is a backlog of states
wanting to use the online SSN verification system, and some states were
told to scale back their use because they were overloading the system.
What are you doing to address these issues?
Answer: We agree that unrestricted death information should be
provided as part of batch SSN verification, and we are reviewing this
change; however, we must prioritize this request in our systems
development plans before any work can be scheduled and completed.
The backlog of States wishing to use the online system has been
addressed. In April 2003, AAMVA and SSA implemented an improved process
for managing and responding to online verification requests. Three new
States have been added to the online verification system since that
date, and six more States are in various stages of testing with AAMVA
and SSA. Additional States have signed agreements with SSA that will
permit them to begin the online verification process. Prior to the
improvement, we were processing 15,000 to 20,000 transactions a day.
Currently, we are processing 30,000 to 40,000 verification requests a
day from the States. Approximately 93 percent of all of those
transactions are verified by SSA in less than 1 second. AAMVA has
renewed its efforts with the States to educate them about the
improvements and to assist them in accessing this service.
Concerning the success of agents obtaining a false driver's
license, we are investigating the sequence of events with the GAO test
cases. It may be that the State employee simply did not attempt to use
the service. If the undercover GAO agent left the MVA office with a
Drivers License, the batch routine interface may not be an issue, as
the driver license personnel would not have received the verification
response prior to issuing the license.
Question: While there is still much room for progress, your
commitment to tightening controls on SSN issuance is clear--for
example, the pilot projects to prevent fraud in issuance of SSNs to
non-citizens and the verification of birth records for individuals over
age 1. However, is your commitment to insuring the integrity of SSNs
getting through to field staff? The GAO reported that field offices are
not always following procedure in visually examining documents to
determine if they are genuine or fake, especially with respect to
immigration documents. Could you explain why this is happening and what
you are doing to ensure your commitment to SSN integrity reaches all
levels of the agency?
Answer: We appreciate the House Social Security Subcommittee
acknowledging SSA's commitment to increasing the security aspects of
our Social Security number workload. In the last 2 years, SSA has taken
the following steps to improve the accuracy of the non-citizen
enumeration workload:
<bullet> Collateral (third party) verification of all applications
for new or replacement Social Security cards by non citizens.
<bullet> Development of a software program that interfaces with
the Department of Homeland Security (DHS) Systematic Alien Verification
Entitlement System (SAVE) to monitor the accuracy of documents
submitted by non citizens.
<bullet> Distribution of information prepared by DHS which assists
SSA field office employees in recognizing counterfeit documents.
<bullet> Quality reviews and/or training on the SSN workload
conducted by all SSA regional offices for SSA field office employees.
SSA field office employees visually inspect documents for
counterfeit detection and have been instructed to use all methods
available to them to determine if documents that have been submitted as
evidence are valid. This includes using the black light. In the case of
immigration documents, field office employees are instructed to query
the DHS' SAVE system. If the documents cannot be verified using the
automated process, they must send a paper verification request to DHS.
Use of the black light in these situations could possibly identify rare
instances of an applicant who has illegally obtained a valid document,
assumed another person's identity, and then pasted on his/her own
picture on the document. We will remind our employees of the need to do
a visual black light inspection of the documents as well as verifying
them with the issuing agency.
However, we believe the integrity of the assignment of an SSN is
much more enhanced by our field office employees not merely relying on
visual inspection of a document to determine whether it is fraudulent,
but by verification of the document with the issuing agency.
Question: You have mentioned that because of the reduced resource
levels for fiscal year 2003, the agency had to cut back on the number
of continuing disability reviews that it will conduct this year. These
reviews are important, as they ensure only those who continue to be
disabled stay on the rolls and also generate trust fund savings--$9 for
every $1 invested. According to the GAO, this decision will result in a
backlog of about 200,000 reviews by the end of the fiscal year. If the
agency receives the President's budget request, will you be able to
eliminate this backlog? In the budget request, the President asked for
``earmarked'' funds for these reviews. Why is this earmarking
important? Is there a need for us to address this legislatively, as we
have in the past?
Answer: In FY 2003, SSA is focusing on keeping up with claims
workloads so that the number of disability claims pending does not
grow. We began this year under a continuing resolution and operated for
4 months at last year's level. In addition, we are absorbing an across-
the-board rescission of .65 percent and a higher-than-budgeted pay
raise. Consequently, we will not be able to process all Continuing
Disability Reviews (CDRs) necessary to remain current. Nevertheless, we
continue to process as many CDRs as possible after keeping up with
initial claims receipts.
SSA's plans call for sufficient resources in future budget requests
to become current with CDR workloads. The FY 2004 President's budget
request, which was developed before final congressional action on FY
2003 appropriations, enables SSA to remain current with CDRs that come
due during FY 2004. We anticipate that the backlog from FY 2003 will be
fully eliminated in FY 2005, provided that we receive adequate funding.
The discretionary funding cap adjustments for CDRs authorized by
Congress for fiscal years 1996 through 2002 were crucial to realizing
currency for both the Title II and Title XVI disability review programs
at the close of FY 2002.
The President's budget proposed to extend the Budget Enforcement
Act controls that expired in 2002, and requested that Congress impose
statutory caps on discretionary spending for FY 2004 and FY 2005. In
addition, the President's budget supports a cap adjustment of $1.446
billion in FY 2004 and $1.473 in FY 2005 for SSA program integrity
activities, including CDRs. This cap adjustment would ensure adequate
funding for fiscal years 2004 and 2005 to maintain currency with CDRs
and process other cost-effective program integrity work, thereby
enabling SSA to meet both its stewardship responsibilities and overall
service demands.
As you know, Congress addressed discretionary spending caps in its
FY 2004 budget resolution. The President's cap adjustment proposal for
SSA was not included. Therefore, SSA's primary concern for FY 2004 is
receiving full funding of the President's budget request, which is
vital to our ability to meet our responsibilities for both service and
stewardship.
When final data are available, we believe the fiscal year 2003
continuing disability reviews (CDR) backlog will be less than the
200,000 cited by GAO, due to SSA's efforts to keep the CDR workload as
current as possible. If the Agency receives the President's budget
request, it will greatly enhance our ability to address this backlog.
Based on the data now available, we plan to be current in FY 2005, but
we will use available resources to achieve CDR currency as quickly as
possible.
Earmarking funds to do CDRs would enable SSA and the disability
determination services to process the necessary CDRs each fiscal year
so CDR currency can again be met as soon as possible and continue to be
met each year thereafter. However, designating CDR funding without
providing sufficient funding to process all SSA workloads, causes
workload backlogs in other areas. For example, SSA had ``designated CDR
funding'' for several years and it allowed SSA to alleviate a large
backlog of CDRs and achieve currency. At the same time, SSA was not
provided enough funding to process all of its other workloads and
initial disability claims pendings increased from just under 400,000 at
the end of FY 1997 to over 592,000 at the end of FY 2002.
Question: GAO testified on their findings regarding the agency's
continuing disability review process. They suggest the process could be
improved by potentially pursuing Medicare and Medicaid treatment data.
Do you plan on taking further steps to streamline and improve the
process?
Answer: SSA currently is using Medicare data to identify Title II
beneficiaries to receive a CDR mailer, rather than a full medical
review. And, SSA is studying the use of Medicaid data to identify more
Title XVI recipients who could receive a CDR mailer, rather than a full
medical review.
In a recent GAO Report (GAO-03-662) ``Social Security Disability
Review of Beneficiaries Disability Status Require Continuing Attention
to Achieve Timeliness and Cost-Effectiveness'' (Audit #12002037), GAO
recommended that SSA should study the use of Medicare and Medicaid data
for the purpose of deciding whether to use a full medical review in
conducting a CDR for beneficiaries who would otherwise receive a CDR
mailer. If this is found to be cost effective, GAO said SSA should
incorporate Medicare and Medicaid data into its CDR process for this
purpose. SSA agrees with this recommendation and plans to conduct a
feasibility study to determine whether Medicare and Medicaid data can
be useful to change the status of those CDR cases identified for the
CDR mailer process to full medical reviews.
Question: The bipartisan Social Security Advisory Board and other
non-government surveys have found that the public does not always
understand the services that the agency offers, the benefits it
provides, or the financing of the system. As the population ages and
baby boomers begin retiring, more and more people will have a vested
interest in understanding the program, including the requirements for
certain benefits. I understand that the Agency has taken steps to
improve the public's understanding of the program, and increasing the
public's understanding is among one of the agency's strategic
objectives. What specifically has the agency done to increase the
public's understanding of the program, has it been successful, and what
are the future plans?
Answer: Social Security considers educating the American public
about the current program, its benefits and financing, including the
financial challenges it faces in the future, to be one of the core
missions of the Agency. As a result, we undertake many activities to
accomplish this task. For example:
<bullet> Each year, approximately 140 million workers receive
their own Social Security Statement. In addition to providing a
worker's earnings record, and estimates of future benefits, the
Statement explains the financial problems the program faces in the
future. The language is very specific, explaining that unless there is
action to address the Social Security shortfall ``by 2042, there will
be enough money to pay only about 73 cents for each dollar of scheduled
benefits.''
<bullet> Social Security's website (socialsecurity.gov) contains a
wealth of information about the current program and its future. In
April 2003 we completed a redesign of the website in order to make it
more user-friendly and accessible to the public. The redesign was
developed with the input and assistance of focus and advocacy groups
and is 508 compliant. In FY 2003, SSA received 30.1 million visits to
the website. Of the 30.1 million visits, 14.4 million reviewed the
``frequently asked questions,'' 5.4 million used the ``field office
locator'' function, and 2.2 million made use of the ``SSA Benefit
Planner.'' In addition to these activities the public also made use of
the website's Benefit Eligibility Screening Tool and the Internet
Social Security Benefit Application. The public also used the website
to forward SSA email inquiries, request Social Security Statements,
Medicare Replacement Cards, Replacement 1099s, Benefit Verifications
and subscribed to SSA's ENews monthly newsletter.
<bullet> Social Security produces over 100 publications, including
brochures and fact sheets, that describe the benefits available,
financing and services available. These products are available through
our network of field offices, through our national toll-free telephone
number and through our website.
<bullet> Through a network of local offices across the country,
Social Security employs the skills of 1,300 field office managers, and
over 100 full-time public affairs specialists to educate Americans on
the Social Security program. Each year, working in their local
communities, these professionals deliver thousands of speeches, write
numerous newspaper articles, and participate in countless radio and
television interviews where they discuss all aspects of Social
Security, including benefits provided through the program, financing
and services we provide.
<bullet> Our Office of External Affairs works closely with other
Federal, State, and local government agencies, as well as organizations
in the private sector, to educate them on the benefits, available
services and financing issues so they, in turn, can share that
information with their members and colleagues.
We also have periodic surveys, conducted by the Gallup
Organization, that measure the effectiveness of our efforts to
strengthen public understanding of Social Security. Based on the
results of those surveys, our informational products and services are
designed to ensure that our educational initiatives are reaching the
right audiences.
<F-dash>
Questions from Chairman E. Clay Shaw, Jr. to Mr. Robert E. Robertson
Question: For the fiscal year 2004 budget, the President requested
that almost $1.5 billion be earmarked for continuing disability
reviews, Supplemental Security Income non-disability redeterminations,
and overpayment workloads. However, neither the House nor the Senate
earmarks these funds in the appropriations bills. What is the
consequence of disregarding the President's request to earmark these
funds? Is it possible that the backlogs for Continuing Disability
Reviews will increase next year if the funds are not earmarked?
Answer: Without targeted funding for continuing disability reviews
(CDR), SSA is more likely to develop a CDR backlog. We noted in our
testimony that, as of the end of March 2003--only 6 months after the
expiration of the separate authorized CDR funding that had allowed SSA
to eliminate its previous backlog--SSA was already on pace to generate
another CDR backlog. We also noted that targeted funding for CDRs could
increase SSA's chances of staying current with the CDR workload because
this workload would not have to compete internally for funding with the
initial determination workload. More specifically, our work indicated
that both SSA and DDSs assign a higher priority to the processing of
initial eligibility decisions than to the completion of CDRs.
Therefore, if the number of initial applications for disability
benefits continues to increase, as SSA projects, SSA is likely to shift
discretionary funds from CDRs to initial determinations, which could
result in an increasing CDR backlog.
Question: In your testimony you state that the SSA has not fully
studied and pursued the use of medical treatment data on beneficiaries
available from the Medicare and Medicaid programs. How easy would it be
for SSA to access medical data from the Center for Medicare and
Medicaid Services? Does accessing the data raise issues of medical
privacy?
Answer: SSA has already demonstrated its ability to obtain medical
treatment data from the Center for Medicare and Medicaid Services
(CMS), albeit, for a limited purpose. In addition, during our review,
SSA officials did not indicate that there would be any unusual
obstacles or issues--including medical privacy issues--preventing them
from establishing or expanding their access to and use of CMS Medicare
and Medicaid medical treatment data for purposes of improved CDR
profiling. As we stated in our testimony, SSA has already implemented a
process that uses Medicare data from CMS to improve the accuracy of its
CDR profiling process. However, as we also noted, SSA had chosen to
limit its use of Medicare data. Specifically, SSA is using Medicare
data to determine if DI beneficiaries who are initially identified as
candidates to receive a full medical review should instead receive
mailers. In addition, SSA had initiated a study to assess whether CMS
Medicaid data could be used in the same way to decide if SSI
beneficiaries, scheduled to receive full medical reviews, could instead
be sent mailers. But SSA had not studied or pursued any efforts to use
CMS Medicare or Medicaid data to reclassify mailers to full medical
reviews, despite the potential usefulness of using the data for this
purpose. We believe accessing additional medical treatment data from
CMS would be feasible and would not be prohibited by medical privacy
issues. In fact, SSA agreed with our recommendation (in our report,
Social Security Disability: Reviews of Beneficiaries' Disability Status
Require Continued Attention to Achieve Timeliness and Cost-
Effectiveness, GAO-03-662, July 24, 2003) that the agency study the
more comprehensive use of these data for CDR profiling and, if found to
be cost-effective, incorporate such data into its CDR process.
<F-dash>
Questions from Chairman E. Clay Shaw, Jr. to Ms. Linda Koontz
Question: The Social Security Administration (SSA) has indicated
that the agency could potentially save $1 billion, at an estimated cost
of approximately $900 million, by implementing an electronic disability
folder. In your opinion, does the $900 million cost of this project
appear to be a reasonable estimate? Is the $1 billion in savings a
reasonable estimate? Is there a possibility that the cost of the
project could balloon?
Answer: Our work to date on SSA's February 2003 cost-benefit
analysis raises concerns that SSA may have underestimated its
accelerated electronic disability (AeDib) system costs. For example,
the cost-benefit analysis did not fully consider the costs associated
with certain critical information technology infrastructure elements
supporting the nationwide rollout, such as scanning and imaging by the
outsourced vendor, telecommunications, disaster recovery, and on-site
retention and destruction of source documents, such as medical records.
Because SSA has not yet fully estimated these costs, we are unclear
about their magnitude.
We are also concerned that the corresponding benefits cited in
SSA's cost-benefit analysis may be overstated. Specifically, our review
found that certain assumptions used in the analysis could be too
optimistic. For example, SSA estimated benefits based on an assumption
that state Disability Determination Services (DDS) would receive 30
percent of all medical evidence in electronic form by 2004. However,
state DDS officials with whom we spoke contend that their offices
currently receive about 11 percent or less of medical evidence
electronically, and disagree with the 30-percent assumption.
As to whether the costs of AeDib could balloon, the possibility of
cost increases exists for any project the size and magnitude of AeDib.
As mentioned previously, the existing estimates do not include certain
costs, such as some costs for outsourced scanning and imaging and the
cost of disaster recovery. Including these could add to SSA's overall
cost estimate. Our work analyzing the costs and benefits of AeDib is
ongoing; the final results will be included in our report to be issued
to you later this year.
Question: According to your testimony, the SSA has developed a risk
management plan, but is still without a comprehensive assessment of
risk that could affect the electronic disability folder. Can you
explain the difference between a risk management plan and a
comprehensive assessment of risks? How does their risk management plan
fall short of what GAO recommends? Why is this plan so important?
Answer: A risk management plan provides guidance to project
management teams and requires them to proactively identify facts and
circumstances that could increase the probability of failing to meet
project commitments, and take steps to prevent this from
occurring.<SUP>[1]</SUP> A comprehensive assessment of risks, which is
completed according to the risk management plan, is the process of
identifying risks with a high probability and cost of failure, and
developing strategies for mitigating those risks.<SUP>[2]</SUP>
---------------------------------------------------------------------------
\[1]\ U.S. General Accounting Office, Information Technology:
Greater Use of Best Practices Can Reduce Risks in Acquiring Defense
Health Care System, GAO-02-345 (Washington, D.C.: September 26, 2002).
\[2]\ Social Security Administration, SSA AeDib Risk Management
Plan, Version 2.01 (Baltimore, MD, January 21, 2003).
---------------------------------------------------------------------------
Based on our work to date, we do not have concerns about SSA's risk
management plan, which was developed in accordance with our own and
Office of Management and Budget (OMB) guidance. However, as mentioned
in our testimony, we were concerned that SSA had not completed a
subsequent comprehensive risk assessment. SSA officials agreed with the
need for a comprehensive risk assessment, and since our testimony, the
agency has provided us with detailed risk assessments for four of the
five AeDib projects--the Electronic Disability Collect System, the
Document Management Architecture, a DDS systems migration and
electronic folder interface, and Internet disability applications. SSA
has not yet provided us with a timeframe for completing the remaining
risk assessment for its Hearings and Appeals case processing management
system.
A risk management plan is an essential tool used to guide the
development of a comprehensive assessment of risks and mitigation
strategies. A comprehensive risk assessment is equally critical. Both
tools can help SSA avoid potential problems before they manifest
themselves in cost, schedule, and performance shortfalls.
Question: The GAO has identified a number of areas where the SSA
could improve. For instance, the agency needs to develop risk
assessment tools and could take additional measures to involve key
stakeholders in the systems development process. Is there any
indication that the SSA is acting on your recommendations?
Answer: SSA has acknowledged our concerns relative to the areas of
improvement we identified in our testimony, and has taken some action
to address them. However, more work remains to fully address these
issues.
Specifically, we expressed the need for SSA to perform a
comprehensive risk assessment to identify project risks and establish
mitigation strategies for them. As noted in our response to question 2,
SSA recently provided us with detailed risk assessments for four of the
five AeDib projects, but has not yet provided a detailed assessment of
risks for its remaining project.
We also commented on the need for SSA to perform end-to-end testing
prior to implementation, to ensure that the system it is developing
will perform as intended. To date, SSA has not yet finalized its test
and evaluation strategy. Therefore, it is unclear whether SSA intends
to include end-to-end testing.
Finally, we commented on the need for SSA to resolve stakeholder
concerns to ensure program acceptance and use, and take additional
steps to consult with the medical community. SSA acknowledged the
importance of ensuring sound relations with stakeholders and the need
to take additional actions, where necessary, to ensure that all
stakeholder concerns have been adequately addressed. SSA also stated
that additional steps would be taken to keep stakeholders involved in
the initiative, and that plans were being made for a meeting with state
DDS representatives to discuss the AeDib Initiative. However, SSA has
not yet provided us with a copy of its communications plan for dealing
with stakeholder issues, including its plans for consultation with the
medical community.
As part of our ongoing work, we will continue to monitor SSA's
progress in addressing these issues.
Question: The SSA has worked 11 years now to implement an
electronic disability folder. The automation project started in 1992 as
the Modernized Disability System (later renamed the Reengineered
Disability System). After this project failed in 1999, the SSA
immediately began work on the accelerated electronic disability
initiative. Why is this project so difficult for the agency to
complete? Has the SSA learned from its mistakes along the way?
Answer: Software development is one of the riskiest areas of
systems development.<SUP>[3]</SUP> We have reported that SSA's software
development efforts have been problematic and plagued with delays
because SSA has not consistently followed sound practices in developing
systems designed to automate its disability claims process; thus, it
has experienced numerous software development problems over the past 11
years. For example, in September 1996 we reported that software
development problems had delayed the scheduled implementation of the
Reengineered Disability System (RDS) by more than 2
years.<SUP>[4]</SUP> An assessment of the development activity revealed
a number of factors as having contributed to that delay, including (1)
using programmers with insufficient experience, (2) using software
development tools that did not perform effectively, and (3)
establishing initial software development schedules that were too
optimistic. We reported again, in June 1998, that SSA had encountered
performance problems during its RDS pilot tests.<SUP>[5]</SUP> In
response to these performance problems, SSA delayed its plans for
expanding the pilot to other offices, and obtained a contractor to
independently evaluate and recommend options for proceeding with the
initiative.
---------------------------------------------------------------------------
\[3]\ U.S. General Accounting Office, Social Security
Administration: Information Technology Challenges Facing the
Commissioner, GAO/T-AIMD-98-109 (Washington, D.C.: March 12, 1998).
\[4]\ U.S. General Accounting Office, Social Security
Administration: Effective Leadership Needed to Meet Daunting
Challenges, GAO/HEHS-96-196 (Washington, D.C.: September 12, 1996).
\[5]\ U.S. General Accounting Office, Social Security
Administration: Technical and Performance Challenges Threaten Progress
of Modernization, GAO/AIMD-98-136 (Washington, D.C.: June 19, 1998).
---------------------------------------------------------------------------
SSA's contractor reported that RDS software had defects that would
diminish the case-processing rate at DDS sites, and that SSA had not
been timely in addressing software defects. For example, 90 software
problems identified by SSA staff remained unresolved for more than 120
days. As a result, the contractor recommended that SSA discontinue the
RDS initiative and focus on an alternative solution involving the use
of an electronic folder to replace the paper-based case folder in the
disability determination process.
In another example, we reported in August 2001 on weaknesses
regarding SSA's adherence to key software development procedures for
several projects, including its electronic disability
system.<SUP>[6]</SUP> We noted that SSA did not consistently adhere to
its software development procedures in the areas of requirements
management, software project planning, software quality assurance, and
software configuration management.
---------------------------------------------------------------------------
\[6]\ U.S. General Accounting Office, Information Technology
Management: Social Security Administration Practices Can Be Improved,
GAO-01-961 (Washington, D.C.: August 21, 2001).
---------------------------------------------------------------------------
In our ongoing review, we have found that SSA has taken important
steps to mitigate past software development problems. It has generally
addressed its contractor's recommendations aimed at automating its
disability claims process, and has generally been applying key software
process improvement practices to its development of AeDib projects,
such as developing plans to manage the projects, tracking and
overseeing the initiatives to measure progress, performing quality
assurance reviews to determine that the project is complying with its
policies and procedures, and performing configuration management
activities. While continually applying these software development
practices is no guarantee of AeDib success, these practices
nevertheless should improve SSA's capability to develop high-quality
software in support of AeDib, thereby avoiding mistakes experienced in
the past.
Agency Comments and Our Evaluation
The Commissioner of Social Security's provided comments on a draft
of this correspondence, which are reproduced in full as the attachment.
In her comments, the Commissioner offered clarifications to our
responses to questions 1 through 3.
Regarding question 1, the Commissioner said that we were incorrect
in stating that SSA's cost-benefit analysis had not considered all
costs of certain critical IT infrastructure elements supporting the
nationwide AeDib rollout, and that, in fact, SSA had included the costs
of scanning and imaging by the outside vendor in its estimates.
We have revised our response to clarify that SSA's cost-benefit
analysis considered some, but not all, of the key cost elements that
could affect the initiative. SSA's February 2003 cost-benefit analysis
noted, for example, that the agency had not considered as part of its
scanning and imaging functions, the keying in of indexing information
(for case folder identification) by the outsourced scanning vendor,
although this is deemed critical to the implementation of SSA's
document management capability. Further, during our review, SSA
officials told us that certain costs associated with the scanning and
imaging functions were not expected to be identified until the agency
performed its pilot tests (now ongoing) for its document management
architecture.
The Commissioner added that other AeDib-related costs associated
with telecommunications, disaster recovery, and on-site retention and
destruction of source documents should more appropriately be accounted
for as part of the agency's ongoing operations, and therefore were
covered in the agency's regular infrastructure costs, rather than the
AeDib cost estimates. However, we disagree. OMB guidance states that
cost-benefit analyses should include comprehensive estimates of all
direct and indirect costs associated with a project.<SUP>[7]</SUP> As
such, a sound cost-benefit analysis for AeDib will depend on SSA's
fully considering the project-related costs for these critical elements
supporting the development, operation, and maintenance of the
electronic disability system.
---------------------------------------------------------------------------
\[7]\ Office of Management and Budget Circular No. A-94 Revised
(Transmittal Memo No. 64), Guidelines and Discount Rates for Benefit-
Cost Analysis of Federal Programs, October 29, 1992.
---------------------------------------------------------------------------
Further, the Commissioner expressed concern about the example that
we provided in noting that SSA's estimate of AeDib benefits could be
overstated. Based on our interviews with SSA and state DDS
representatives, our response highlighted the possibility that AeDib
benefits could be overstated because of differences in SSA's and the
DDSs' assumptions about the extent that medical evidence may be
received electronically. We are continuing to assess SSA's cost-benefit
analysis as part of our ongoing review.
In commenting on our response to question 2, the Commissioner
stated that SSA had expected to receive draft risk assessments by June
30, 2003, and either planned to or already had shared some of its risk
assessments with us. We have revised our response to reflect that SSA
recently provided us with detailed risk assessments for four of the
five AeDib projects.
Finally, regarding question 3, the Commissioner stated that SSA had
provided us with information concerning stakeholder issues and the
agency's plans for consulting with the medical community. She further
noted that outreach to the medical community was occurring. We are
encouraged that SSA is taking steps to ensure productive communications
with its key stakeholders and the medical community, and look forward
to reviewing documented evidence of the agency's actions. To date,
however, we have not received the additional information on SSA's plans
for addressing stakeholder issues or consulting with the medical
community, that the Commissioner mentions in her letter.
______
In responding to these questions, we relied on past work and our
ongoing review of SSA's efforts to automate its disability claims
process. We discussed our assessment of the cost-benefit analysis with
SSA's Office of Disability Programs, Office of Systems, and Office of
the Chief Information Officer, and with the supporting contractor and
key stakeholders. We reviewed and analyzed the most recent agency
documents associated with SSA's risk management efforts. We also
discussed with officials in the Office of Disability Programs SSA's
efforts to develop a strategy for resolving stakeholder concerns, as
well as a more aggressive approach for consultation with the medical
community. Finally, we reviewed and analyzed SSA's software process
improvement documentation, as well as past assessments of the agency's
failed attempts to automate its disability claims process to determine
lessons learned, and whether SSA is avoiding past software development
problems. We conducted our work in accordance with generally accepted
government auditing standards, during August 2003.
<F-dash>
Social Security Administration
Baltimore, Maryland 21235
September 3, 2003
Ms. Linda D. Koontz
Director, Information Management Issues
United States General Accounting Office
441 G Street N.W.
Washington, D.C. 20548
Dear Ms. Koontz:
This responds to your letter dated August 27, 2003, requesting our
comments on your proposed correspondence entitled Social Security
Administration: Subcommittee Questions Concerning Efforts to Automate
the Disability Claims Process (GAO-03-1113R). I appreciate the
opportunity to review and comment on the correspondence before it is
issued. We have the following comments and clarifications on your
proposed responses to questions 1 through 3.
Question 1
In your draft note to Congressman Shaw you indicate that in the
February 2003 cost-benefit analysis (CBA) the Social Security
Administration (SSA) ``. . . did not consider all costs of certain
critical information technology infrastructure elements supporting the
nationwide rollout, such as scanning and imaging by the outsource
vendor, telecommunications, disaster recovery and on-site retention and
destruction of source documents, such as medical records.'' This
statement is incorrect, since we did in fact include the costs of
scanning and imaging by the outsource vendor in the estimated costs for
the accelerated electronic disability system (AeDib). Pages 8 and 9 of
the CBA (Version 3.1 dated February 3, 2003) list these costs among the
significant cost impacts for AeDib, with a pie chart showing outsource
scanning costs as 14 percent of the total life cycle costs. We consider
the other costs to be part of our ongoing operations, rather than
specifically related to AeDib, and these costs are more appropriately
covered in our regular infrastructure costs.
Your draft response also indicates that the benefits of AeDib may
have been overestimated because the State Disability Determination
Services (DDS) you contacted disagree with the estimate that 30 percent
of all medical evidence will be received in electronic form by 2004.
During the fall of 2002, we held several discussions with the DDS
Systems Committee and the National Council of Disability Determination
Directors leadership relative to business process and technological
issues. One of the central topics of these discussions was how to
gather information that would assist in building the electronic medical
evidence (EME) estimates. We derived the 30 percent estimate based on
these discussions and information received from the DDS community. This
is a national estimate for fiscal year 2004, and we would expect that
this level would vary from location to location. Included in the 30
percent estimate is medical evidence received through both direct
electronic submissions as well as through fax submittals.
Question 2
As stated in your draft note, we have provided the comprehensive
risk assessments for two of the five parts of AeDib. We had advised
General Accounting Office (GAO) staff that we were to receive the draft
risk assessments from our contractor by June 30, 2003. We then needed
to conduct an internal review of these documents. We shared two
additional risk assessments with you on August 28, 2003. The last one
will be sent after we complete our internal review.
Question 3
Our comments on Question 2 also apply to the response to Question
3. Additionally, we recently provided GAO staff with information
regarding stakeholder issues and our plans for consultation with the
medical community. Our senior executive leadership meets weekly to
address AeDib issues, including those raised by all entities, internal
as well as external.
Additionally, our outreach to the medical community is handled
through our public affairs and professional relations personnel in the
DDSs and in SSA's central office, Regional Offices, and Field Offices.
The issues of EME and processing disability claims in an electronic
environment are being institutionalized throughout SSA. They have been
a part of, and will continue to be included in, our contacts and
communication vehicles that are already in place, including
communication plans. Furthermore, I have undertaken special efforts to
communicate with the major medical associations by holding and
personally chairing a series of meetings to address their issues. In
addition, my staff has had a series of productive meetings with staff
at the Department of Health and Human Services on these issues.
If I may be of further assistance, please do not hesitate to
contact me or have your staff contact Mr. Robert M. Wilson, Deputy
Commissioner for Legislation and Congressional Affairs, at (202) 358-
6030.
Sincerely,
Jo Anne B. Barnhart
Commissioner
<F-dash>
Questions from Chairman E. Clay Shaw, Jr. to Ms. Susan Prokop
Question: The Social Security Administration (SSA) often delays or
fails to record earnings reports from Disability Insurance and
Supplemental Security Income beneficiaries. When the SSA finally does
record the earnings and adjust the benefit checks accordingly, the
beneficiary often owes hundreds of dollars from the overpayments, even
though he or she properly reported the earnings long ago. The fear that
SSA will not adjust the benefit checks correctly and on time prevents
many individuals from participating in the Ticket to Work Program. Has
this problem improved at all in the last year? What steps should the
SSA take to correct this problem? What other barriers are stopping
individuals from participating in the Ticket to Work Program?
Answer: You and your colleagues on the subcommittee long ago
identified the issue of posting of earnings reports and overpayments as
a significant barrier for beneficiaries wishing to return to the
workforce. The Consortium for Citizens with Disabilities (CCD) Task
Forces on Social Security and Work Incentives Implementation were
pleased to support HR 743 which contains provisions requiring SSA to
issue a receipt when a beneficiary reports a change in status or
earnings. At the very least, this would give a beneficiary documented
proof that he or she attempted to provide SSA with timely information
about changes in his or her earnings status. We hope that the Senate
might act on this legislation as soon as possible to advance the many
positive reforms contained in that measure.
Mention was made at a recent vocational rehabilitation agency (VRA)
training conference on the Ticket that many state VR agencies use
unemployment insurance data from the Department of Labor to confirm
beneficiary employment and earnings. VRAs are able to obtain this data
without expecting the beneficiaries to report to them. Why cannot SSA
gain access to that information for purposes of wage data reporting
without imposing that responsibility on the beneficiary? This may not
end completely the problem of overpayments but it might be faster than
the current system which relies on overburdened SSA staff to enter the
earnings reports by hand.
In the final Ticket rule, SSA says that statutory requirements
force the agency to collect overpayments from beneficiaries because
they cannot pay both an employment network (EN) and a beneficiary. Once
again, this seems to place the burden solely on the beneficiary and may
pit the beneficiary against the provider. Once an employment network
reports to MAXIMUS that a beneficiary has reached the substantial
gainful activity (SGA) level, that action is supposed to serve as
notice to SSA to stop benefits payments and pay the EN. SSA ought to be
able to configure its data management systems to avoid paying
inordinate amounts of benefits once this benchmark has been reached.
Perhaps employment networks could arrange to escrow beneficiary
benefits payments once the beneficiary reaches SGA so that, when SSA
requests payback of the benefits, the funds will be awaiting return.
Finally, benefits planning organizations, protection and advocacy
agencies and other groups from which beneficiaries seek information
about the Ticket should be more explicit about the need for
beneficiaries to escrow any money received from SSA after they go above
SGA. Beneficiaries should be able to prepare if they know from the
outset that SSA will be slow in terminating their benefits but will
come back later to collect the overpayments from them.
With regard to other barriers stopping individuals from
participating in the Ticket--the ``cash cliff' remains a significant
impediment to returning to work for those on SSDI. We regret that SSA
has yet to institute the pilot study of a 1-for-2 offset in SSDI as
mandated by P.L. 106-170.
Another difficulty beneficiaries may face in using the Ticket is
the lack of choice in vocational rehabilitation provider. Almost 90
percent of Tickets assigned as of July 2003 have been assigned to state
VRAs. Part of this may stem from beneficiaries' familiarity with the VR
system and the fact that many assignments were from beneficiaries
already in the VR ``pipeline'' when the Ticket became effective in
their states. However, numerous reports and conferences have documented
the reluctance of many providers to participate in the Ticket due to
concerns over the administrative burdens of the program, the employment
network payment system that makes it impractical to serve those with
significant disabilities and misgivings over competing with state
agencies with whom they hold contracts. This undermines a central tenet
of the Ticket program--choice in vocational rehabilitation provider.
Furthermore, as mandated by law, many VR agencies have had to adopt
limits on the beneficiaries they can serve due to vastly inadequate
resources and increased demand. While most SSDI and SSI recipients will
meet VR ``order of selection'' policies, some states have had to adopt
such restrictive eligibility criteria that some Social Security
beneficiaries do not qualify for services. If the VR agency is the only
Ticket provider in such states, beneficiaries are frozen out of a
chance to use their Ticket. Obviously, questions about the VR program
fall under the jurisdiction of another committee. However, it might be
informative for your Subcommittee and the Subcommittee on 21st Century
Competitiveness to hold a joint hearing on Ticket-VR issues.
Question: Can you provide us with suggestions for research or pilot
programs the SSA could undertake to identify weaknesses in the
disability programs that may need legislative or policy changes?
Answer: As noted previously, SSA should move forward with the 1-
for-2 pilot since the cash cliff is a serious weakness in the SSDI
program. It might also be useful to look at asset tests and limits in
SSI that undermine peoples' ability to go to work and acquire savings
for the future. Another emerging concern is the upper age limit
contained in P.L. 106-170 that could result in working people with
disabilities losing their Medicaid buy-in eligibility when they reach
age 65. As the Social Security normal retirement age continues to
increase to 67, policymakers should be reviewing how this may affect
those taking advantage of the Ticket to Work and Work Incentives
Improvement Act (TTVVWIIA).
It is increasingly evident that numerous Federal disability
programs across a multiplicity of agencies affect beneficiaries'
ability to work in a variety of ways. Income limits for programs under
the Department of Housing and Urban Development may penalize working
people with disabilities. There is ongoing confusion about the ability
of childhood disability beneficiaries or DACs to take advantage of
TTVWVIIA without severing ties to their critically needed DAC benefits.
Veterans' vocational rehabilitation programs are unable to serve
veterans on SSDI with a Ticket, thereby limiting choice of provider to
those beneficiaries. The General Accounting Office (GAO) should be
asked to examine Federal disability programs and how their policies
pertaining to income, assets and other eligibility criteria affect
Social Security disability beneficiaries who want to work.
Question: We all know that the SSA has made numerous attempts at
instituting and streamlining the disability claims and determination
processes, and yet none have really been that successful. Can you
provide your thoughts on what the SSA needs to do to devise and
implement a successful program, so that our constituents can get
through this process in a reasonable amount of time?
Answer: Many recent proposals to change the disability claims
process have focused on the back end of the process, without addressing
necessary changes to the front end. We believe that significant
improvements would be accomplished if better development of evidence
occurred earlier in the process.
The key to a successful disability determination process is having
an adequate documentation base and properly evaluating the
documentation that is obtained. Unless claims are better developed at
earlier levels, the procedural changes will not improve the disability
determination process. Unfortunately, very often the files of denied
claimants show that inadequate development was done at the initial and
reconsideration levels. Until this lack of evidentiary development is
addressed, the correct decision on the claim cannot be made. Claimants
are denied not because the evidence establishes that the person is not
disabled, but because the limited evidence gathered cannot establish
that the person is disabled.
A properly developed file is usually before the administrative law
judge because the claimant's representative has obtained evidence or
because the administrative law judge has developed it. Not
surprisingly, different evidentiary records at different levels can
easily produce different results on the issue of disability. To address
this, the agency needs to emphasize the full development of the record
at the beginning of the claim.
We support full development of the record at the beginning of the
claim so that the correct decision can be made at the earliest point
possible. Claimants should be encouraged to submit evidence as early as
possible. However, the fact that early submission of evidence does not
occur more frequently is usually due to reasons beyond the claimant's
control.
Our recommendations to improve the development process include the
following:
<bullet> SSA should explain to the claimant, at the beginning of
the process, what evidence is important and necessary.
<bullet> DDSs need to obtain necessary and relevant evidence.
Representatives often are able to obtain better medical information
because they use letters and forms that ask questions relevant to the
disability determination process. DDS forms usually ask for general
medical information (diagnoses, findings, and so forth.) without
tailoring questions to the Social Security disability standard. The
same effort should be made with nonphysician sources (e.g., therapists,
social workers) who see the claimant more frequently than the treating
doctor and have a more thorough knowledge of the limitations caused by
the claimant's impairments.
<bullet> Improve treatment source response rates to requests for
records, including more appropriate reimbursement rates for medical
records and reports.
<bullet> Provide better explanations to medical providers, in
particular treating sources, about the disability standard and ask for
evidence relevant to the standard.
We commend the Commissioner for moving forward to develop the
electronic disability folder, ``eDIB,'' as soon as practicable in light
of available resources. This would reduce delay caused by moving and
handing-off folders, allowing for immediate access by whichever
component of SSA or DDS is working on the claim. The electronic folder
also would reduce the occurrence of files that are lost or difficult to
locate, a problem that leads to delays at all levels.
While strongly supporting development of eDIB, we urge the
Commissioner to ensure that the electronic folder contains complete
copies of the paper records, rather than summaries or otherwise reduced
copies, and that claimants are able to submit evidence in any format,
including paper records.
We also support other technological improvements by the
Commissioner including digital recording of hearings and the use of
video teleconferencing at administrative law judge hearings.
Another initiative that already has proven to reduce delays is
elimination of the reconsideration level. Over the past few years, SSA
has been testing elimination of the reconsideration level in ten
``prototype states'' [AL, AK, CA, CO, LA, MI, MO, NH, NY, PA]. Until
last year, the testing also included a pre-initial decision interview,
known as a ``claimant conference.'' Preliminary results of the testing
showed that claims were awarded earlier in the process; that accuracy
was comparable to non-prototype cases; and that denied claims move to
the next level sooner. While elimination of the reconsideration level
was scheduled to be implemented nationwide in 2002, SSA deferred taking
action pending further analysis.
We advocate the value of providing claimants with a face-to-face
meeting with the decisionmaker before the initial decision is made.
When the Commissioner announced that the conference would be
eliminated, she stated that SSA would encourage early and ongoing
contacts with claimants during the development process. As discussed
above, these are goals that we strongly endorse. Many claimants'
representatives and others would like to participate earlier in the
process since they are able to assist the disability examiners in
obtaining medical evidence and focusing the issues.
Over the last few years, claimants' representatives have raised
numerous, critical concerns about the current state of affairs in
hearing offices around the country.
Specific recommendations were presented to SSA in 2002 which
representatives believe would make the hearing process more efficient,
including: (1) creating the same claims folder earlier in the process;
(2) reinstating senior attorney authority to issue decisions in certain
cases (discussed more fully below in response to question 4); (3)
identifying a ``point'' person who is available to ensure that the case
is ready for hearing; (4) a better mechanism for review of requests for
on-the-record decisions; (5) single requests for information; and (6)
advance notice of hearings so that submission of evidence can be
targeted.
Last year, the Commissioner announced an initial series of
initiatives to improve the hearings and appeals process. We are
generally supportive of these initiatives so long as they do not impair
the claimant's right to a full and fair hearing. These initiatives
include: early screening and analysis of cases, including possible on-
the-record decisions; short form favorable decisions; bench decisions;
expansion of videoconference hearings; and digital recording of
hearings.
Question: Please comment on including some kind of preliminary,
non-administrative law judge adjudication in the disability appeals
process.
Answer: As discussed in my written statement, we strongly believe
that claimants for disability benefits should retain the right to a de
novo hearing before an administrative law judge. This right is central
to the fairness of the adjudication process, since it guarantees the
opportunity for a full and fair administrative hearing by an
independent decisionmaker who provides impartial fact-finding and
adjudication, free from agency coercion or influence.
However, we support the use of non-administrative law judges in one
decisionmaking situation that could assist administrative law judges:
when a fully favorable decision can be issued, without the need for a
hearing, i.e., an ``on the record'' decision.
There is precedent for this limited use of non-administrative law
judge decisionmakers at the hearing level. In the nineties, as an
initiative to reduce the backlog of cases at hearings offices, OHA
senior staff attorneys were given the authority to issue fully
favorable decisions in cases that could be decided without a hearing.
At the time, this program was well-received by claimants' advocates
because it offered an opportunity to present a case and obtain a
favorable result in an efficient and prompt manner.
This program did not impair the claimant's right to a hearing
before an administrative law judge. Procedurally, notice of the wholly
favorable decision was sent to the claimant who, if he or she made the
request, could still proceed with a hearing before an administrative
law judge. If the senior staff attorney could not issue a wholly
favorable decision on the record, the case was sent to the
administrative law judge who then held a hearing.
Of most importance, thousands of claimants benefited from this
program. While the program existed, it helped to reduce the backlog by
issuing approximately 200,000 decisions. Unfortunately, the initiative
was phased out in 2000.
<F-dash>
[Submissions for the record follow:]
Statement of Theresa Klubertanz, National Association of Disability
Examiners, Madison, Wisconsin
Chairman Shaw, Representative Matsui, and members of the
Subcommittee, thank you for this opportunity to present the viewpoint
of the National Association of Disability Examiners (NADE) on the
Social Security Administration Service Delivery Budget Plan. We
appreciate the Subcommittee's vigilant oversight of the Social Security
program and your willingness to obtain input from our Association and
others with expertise, experience, and understanding of the issues
facing the Social Security and Supplemental Security Income (SSI)
disability programs.
NADE is a professional association whose purpose is to promote the
art and science of disability evaluation. Our members, whether they
work in the state Disability Determination Service (DDS) agencies, the
Social Security Field Offices, SSA Headquarters, OHA offices or in the
private sector, are deeply concerned about the integrity and efficiency
of the Social Security and SSI disability programs. Simply stated, we
believe that those who are entitled to disability benefits under the
law should receive them; those who are not, should not. We also believe
decisions should be reached in a timely, efficient and equitable
manner. The Commissioners' Strategic Plan, with its emphasis on
service, stewardship, solvency and staff, provides an excellent
blueprint for achieving those goals.
SERVICE
NADE's Proposal for a New Disability Process (a copy of which has
been shared with the Subcommittee previously and is included again with
this testimony) supports SSA's Strategic Goal to ``make the right
decision as early in the disability process as possible.'' The DDSs,
through their initial and reconsideration decisions, constitute the
first two levels in the disability claims process. SSA's statistics
show that the allowance and denial accuracy rates for the DDSs far
exceed 90%. It is clear, then, that in the vast majority of cases, the
DDSs are making the ``right'' decision and are making that decision
very early in the process. Sometimes, however, the ``right'' decision
is ``No.'' Many witnesses who have appeared before this Subcommittee
have attempted to mislead the public into believing that, unless a
claim is allowed, it is not the ``right'' decision. This is not true
and it is not fair to the thousands of DDS employees throughout the
country who struggle daily to ensure that the decisions they make on
each claim is the ``right'' decision. It must be acknowledged that some
claims are filed for disability benefits that have no merit and many
others are filed by individuals who do have significant physical and/or
mental impairments but nevertheless do not meet Social Security's
strict definition of disability. For these cases, the ``right''
decision is to deny the claim. For those individuals who do have severe
physical and/or mental impairments that meet Social Security's strict
definition of disability, it is important that these claims be allowed
as early in the process as possible. The statistical data show that the
DDSs make the ``right'' decision in the vast majority of claims and
they make these decisions very early in the process.
Because there are several appeal levels, however, and because the
record remains open throughout the appeals process, each subsequent
disability adjudicative component is presented with a different case
and the ``right'' decision for that case may be different than for the
original case or even the case at the previous appeal level. Thus, the
decision made by each adjudicative component can still be ``accurate''
even though it may reverse a previous component's decision. NADE's plan
for a new disability claims process proposes to close the record after
the DDS reconsideration decision and limit subsequent appeals to
matters of law. This would not adversely affect claimants or restrict
their appeal rights but would instead significantly shorten the appeals
process while ensuring that the DDS decision was made in compliance
with the law and regulations set forth in the statutes. The NADE
proposal also reduces the amount of time claimants must wait for a
``final'' decision and significantly reduces the administrative costs
connected with the tremendously long appeals process.
In order to make the right decision as early in the process as
possible SSA must ensure that the DDSs have sufficient resources,
including staffing and funding. We agree with the General Accounting
Office that ``SSA's goal of achieving an electronic disability claims
process represents an important, positive direction toward more
efficient delivery of disability payments. . . .'' However, while
technology can be expected to reduce hand-offs, eliminate mail time and
provide other efficiencies, technology cannot stem the dramatic growth
in workloads. Neither can technology replace the highly skilled and
trained adjudicator who evaluates the claim and determines an
individual's medical eligibility for disability benefits in accordance
with federal rules and regulations. We agree with the Commissioner
that, ``The attributes of service that define quality include accuracy,
productivity, cost, timeliness and service satisfaction.'' However,
accuracy must never be sacrificed to productivity, cost or timeliness.
It is not fair to the claimant who is erroneously denied benefits and
it is not fair to the taxpayer who must pay the costs associated with
an erroneous decision to allow benefits.
There is continued concern that the disability program is not fair.
Disability applicants allowed under Title II are required to complete a
five month waiting period before being eligible for benefit payments
while disability applicants allowed under Title XVI are not.
Underpinning the entire disability program is the need for public
confidence in the process. A program that was designed to offer
compassionate support to American citizens at the time when it is most
needed has come to be perceived as offering only frustration and
emotional distress to people and families who are already hurting.
Claimants who file for benefits under Title II, and whose claims are
allowed, are not eligible for monthly payments for five full months
after the onset of the disabling impairment. During this interval, many
claimants and their families are seriously affected economically and
emotionally. NADE continues to believe that Congress should act to
eliminate, or at least reduce, this five-month waiting period.
Hand-in-hand with the elimination of the five month waiting period,
consideration needs to be given to elimination of the twenty-four (24)
month Medicare waiting period. Two disability groups currently do not
have to serve this waiting period--those with chronic renal diseases
and those with amyotrophic lateral sclerosis (ALS), commonly known as
Lou Gehrig's Disease. This is inherently unfair. Most SSDI
beneficiaries have serious health problems, low incomes and limited
access to health insurance. Eliminating the Medicare waiting period
would address the insurance needs of a high-risk, high-need population
and provide financial relief and access to health care services at a
time when health care needs are especially pressing and few
alternatives exist. Technological improvements in health care and early
intervention of needed medical services could provide increased
rehabilitation successes and greater employment opportunities for
people with disabilities. NADE believes that the twenty-four (24) month
Medicare waiting period should be eliminated for all Title II
disability beneficiaries.
Another area undermining public confidence in the program and
causing inherent unfairness is SSA's continued reliance on a grossly
outdated Dictionary of Occupational Titles (DOT) and the requirement to
develop a claimant's vocational history for the 15 year period
preceding the onset of their disability. These two factors are
increasingly unfair as they do not acknowledge the rapidly changing
technology present in most occupational fields today and this reduces
the ability of the DDSs to render decisions that accurately reflect
current vocational practices.
STEWARDSHIP
Continuing Disability Reviews (CDRs) are not only cost effective,
saving approximately $9 for each $1 invested, they play an important
role in any return to work incentive. An individual who knows his or
her claim will be reviewed at the appropriate time is more likely to
explore vocational options. Unfortunately, with the increase in initial
claims and the loss of targeted funds specifically designated to handle
this workload, CDRs are likely to be delayed. For that reason, NADE
strongly supports SSA's FY'04 budget request for earmarked funds to be
used for CDRs, SSI nondisability redeterminations and overpayment
workloads.
NADE believes that the role of federal quality assurance reviews is
to provide clear, consistent and nationally uniform feedback on
interpreting federal disability law. For that reason we have long
advocated equal reviews of allowed and denied claims at all levels in
the adjudication process. We are concerned that SSA's FY 2004 Budget
Request proposes to extend the pre-effectuation review provisions to
SSI adult disability and blindness cases. We do not feel that increased
review of DDS allowances, without a corresponding increased review of
appealed claims, represents an effective use of scarce resources. We
question the statement that, ``Pre-effectuation review yields
significant ongoing program savings, well in excess of the resources
required to conduct the reviews.'' We are not aware of any recent study
that evaluated the end result of claims appealed to the Administrative
Law Judge level that were initially allowed by the DDS but later denied
after the claim was returned by the federal quality review component.
Anecdotal evidence suggests that many of these claims are eventually
allowed during the appeals process. We believe that the resources
required to provide for increased pre-effectuation reviews would be
better spent at the beginning of the process by ensuring that quality
information, necessary to make the correct decision, is obtained from
the initial interview and throughout the disability decision-making
process.
There is an enormous backlog of cases that involve SSI
beneficiaries who have sufficient work credits to qualify for benefits
under the SSDI program. To ensure fair and equitable treatment for
these individuals and to ensure that they receive all benefits due to
them, special funding should be earmarked for both the SSA Field
Offices and the State DDSs in order to complete the processing of this
special disability workload. Failure to do so will delay the decisions
to these individuals even more than currently is the case.
SOLVENCY
Many of the ideas and issues we have presented in this testimony
would strengthen the solvency of the trust funds managed by the Social
Security Administration. Ensuring an ongoing CDR process and
implementing the proposal NADE submitted for a new disability claims
process would, we believe, aid tremendously in the effort to strengthen
the solvency of the trust fund managed by SSA, safeguard those funds
and ensure their distribution only to those who actually qualify to
receive them under federal law.
NADE firmly believes that an enhanced, ongoing and joint training
program for all components could ensure consistency of decisions
between adjudicative components and also ensure the decisional accuracy
of those decisions. SSA's Inspector General declared in previous
testimony before this Subcommittee that the well trained disability
examiner is SSA's most effective tool in combating fraud and abuse,
thereby strengthening the solvency of the trust funds.
NADE supports the need for a Social Security Court to bring
consistency and uniformity to the disability program. Current
disability policy is fragmented and applied differently across the
country due to differing Court decisions in different court
jurisdictions throughout the country. To maintain solvency, a Social
Security Court is needed to ensure national uniformity in the
application and administration of the complex rules and regulations
required in disability decision making.
NADE supports greater efforts and stronger initiatives that are
designed to return beneficiaries to the workforce when their disabling
condition has improved. Vocational rehabilitation and employment
services should be readily available to claimants and comprehensive,
affordable health care coverage is needed to allow disability
beneficiaries to receive needed medical services to enhance their
vocational profile to return to work.
NADE supports strengthening SSA's efforts to combat fraud and we
support expansion of the Cooperative Disability Investigation (CDI)
units that have proven to have a positive and very significant
financial impact on the disability program.
STAFF
NADE strongly supports the Commissioner's goal ``To strategically
manage and align staff to support SSA's mission.'' The state DDSs must
have the necessary resources to hire and retain highly skilled, highly
performing, and highly motivated staff. This will be a major challenge.
Disability examiners must have a thorough understanding of the medical,
vocational and administrative/technical issues involved in disability
evaluation and be flexible in adapting to ever changing rules and
regulations and changes in business processes. It is widely
acknowledged that it takes at least two years for a disability examiner
to become proficient in the performance of their job duties. However,
the learning and training cannot stop there. On-going job training and
job enrichment opportunities are needed to ensure that disability
examiners maintain the highly skilled work set needed for this
increasingly complex disability evaluation process. Unfortunately, a
vast number of the disability examiners in the DDSs now have less than
two years of experience. This lack of experience and insufficient,
ongoing professional training can severely erode the ability of many
examiners to stay abreast of changing technology and development
practices. This can have a tremendous impact on the public's confidence
in the ability of SSA to render fair and timely decisions.
NADE has long supported the ``One SSA'' concept and we welcome the
President's Management Agenda Human Capital initiative to ``Promote a
knowledge-sharing culture, openness, and continuous learning and
improvement.'' Working together to strengthen the federal-state
partnership, SSA's Field Offices, Central Office, Regional Offices and
the DDSs can manage the growing disability workload and meet the goals
of the President's Management Agenda and the Government Performance and
Results Act.
SUMMARY
Maintaining program integrity and ensuring public confidence is a
vital part of effective public administration and a major factor in
determining the public's view of its government. Ensuring that the
right decision is made as early in the process as possible is a noble
goal but one that can only be attained if we recognize that the
``right'' decision can be either ``yes'' or ``no'' and will also
require adequate staffing at all levels of the adjudicative process and
an examination of the complex rules and regulations under which the
adjudicative components operate. The incidence and prevalence of
disability is currently projected to grow significantly and the Social
Security Administration must provide more direction in the development
of pragmatic policies that improve public service, enhance its
stewardship role, strengthen the solvency of its public trust and
provide for staffing that can make such policies enforceable. SSA must
recognize that more direct guidance is needed from its top levels of
management and SSA should be given the congressional support necessary
to make the appropriate changes that will recommit the Agency to its
primary purposes of stewardship and service. To truly improve service
and stewardship, NADE supports the removal of SSA's administrative
budget from the domestic discretionary spending caps. Congress would
continue to retain oversight authority but SSA would not have to
compete with other programs for limited funds that restrict SSA's
ability to meet the increasing needs for its services. SSA touches the
lives of over 95 percent of the American public in some fashion and it
is critically important that the American public can rely on the
quality of service and the accuracy of decisions provided by the Social
Security Administration.
______
NADE Proposal for New Disability Claims Process
1. Intake of new disability claims at the Social Security Field
Office would not be significantly altered from the current practice
with the following exceptions:
a. Greater emphasis would be placed on the inclusion of detailed
observations from the claims representative.
b. The claimant would be provided with a clear explanation of the
definition of disability by the claims representative. The definition
would also appear on the signed application.
c. SSA's web site should clearly indicate that this is a complex
process that would be better served if the claimant filed the
application in person at the Field Office.
d. Quality review of the Field Office product would be added to
demonstrate SSA's commitment to build quality into the finished product
from the very beginning of the claims process.
e. SSA's outreach activities would combine education with public
relations. The Agency's PR campaign would remind potential claimants of
the definition of disability with the same degree of enthusiasm as the
Agency's efforts to encourage the filing of claims.
f. Greater emphasis would be placed on claimant responsibility.
2. DDS receipts the new claim and assigns the claim to a
disability examiner. The Disability Examiners initiates contact with
the claimant to:
a. The Disability Examiner will verify alleged impairments, medical
sources and other information contained on the SSA-3368.
b. The Disability Examiner will provide a clear explanation of the
process and determine if additional information will be needed.
c. The Disability Examiner will inform the claimant of any need to
complete additional forms, such as Activities of Daily Living
questionnaires.
3. Expand the Single Decision Maker (SDM) concept to:
a. Include more claim types
b. Allow more disability examiners to become
c. SDMs Standardize national training program for all components of
the disability process
d. Establish uniform criteria for becoming SDMs
e. Standardize performance expectations for all components of the
disability process
4. If the initial claim is denied by the DDS, the denial decision
will include an appeal request with the denial notice that the claimant
may complete and return to the DDS.
a. The requirement for a clear written explanation of the initial
denial will remain a major part of the adjudicative process.
b. Process Unification rulings should be reexamined and, if
necessary, modified to clarify how the initial disability examiners
should address credibility and other issues.
c. Claimant responsibility will be increased in the new process
5. The denied claim will be housed in the DDS for the duration of
the period of time the claimant has to file an appeal. During this
period of time, claims could be electronically imaged (with adequate
resources--this would further the electronic file concept).
6. The appeal of the initial denial will be presented to the DDS.
Upon receipt of the request for an appeal, the claim will be assigned
to a new disability examiner. Under this proposal:
a. This appeal step would include sufficient personal contact to
satisfy the need for due process.
b. The appeal decision, if denied, would include a Medical
Consultant's signature.
c. The decision would include findings of fact.
d. There would be a provision to include an automatic remand to DDS
on appeals for denials based on failure to cooperate.
7. The record should be closed at the conclusion of this appeal
(including allowing sufficient time for explanatory process before the
record closes).
8. Appeal to the Administrative Law Judge must be restricted to
questions of law rather than de novo review of the claim.
a. The DDS decision needs to have a representative included in the
hearing to defend the decision.
b. There must be an opportunity to remand to DDS but such remand
procedures must be carefully monitored to prevent abuse and remands
should only occur for the purpose of correcting obvious errors.
9. There needs to be a Social Security Court to serve as the
appeal from OHA decisions.
a. The Social Security Court will serve as the final level of
appeal.
b. The Social Security Court will provide quality review of ALJ
decision.
c. The Appeals Council would be eliminated, limiting the total
number of appeal steps within SSA to three. Appeals beyond the ALJ
level would be presented to the Social Security Court.
d. The Social Security court would be restricted to rendering only a
legal decision based on the application of the law.
This proposal is submitted to SSA following the unanimous vote of
NADE's Board of Directors on February 23, 2002 to endorse this design
for a new disability claims process.
______
Explanation of New Disability Claims Process Proposed by NADE
NADE considered various alternatives to the current disability
claims process before deciding on this process as representing the hope
for a claims process that truly provided good customer service while
protecting the trust funds against abuse. It was our intent to develop
a vision for what the total program should look like and not just the
DDS piece of the puzzle. We believe in the concept of ``One SSA'' and
our proposal is submitted based on the belief that all components
within the disability program should be united in the commitment to
providing good customer service at an affordable price. Quality
claimant service and lowered administrative costs should dictate the
structure of the new disability program.
The critical elements identified in the NADE proposal are:
<bullet> The expansion of the Single Decision Maker concept to all
DDSs and expanding the class of claims for which the SDM is able to
provide the decision without medical or psychological consultant input.
Continuing Disability Review cases (CDR's) and some childhood and
mental cases can easily be processed by SDMs.
<bullet> More early contact with the claimant by the DDS to
explain the process and to make the process more customer friendly. The
Disability Examiner is able to obtain all necessary information while
clarifying allegations, work history, and treatment sources. The
claimant is educated about the process so they know what to expect.
<bullet> Housing the initial claim folder on denied claims in the
DDS pending receipt of an appeal of that denial. This will effectively
eliminate significant shipping costs incurred in transporting claims
from the DDS to the Field Office and then back to the DDS. Costs of
storage in the DDSs would be significantly less than the postal fees
incurred by SSA in the current process. Housing the claims at the DDS
instead of the Field Offices could save as much as $20 per claim in
shipping costs. It will also reduce processing time by eliminating a
hand-off.
<bullet> Closing the record after the appeal decision is rendered.
NADE believes that closing the record prior to any subsequent ALJ
hearing is critical to generating consistency, providing good customer
service, restoring public confidence and reducing the costs of the
disability program. Without it, there will continue to be two programs,
one primarily medical and one primarily legal, with two completely
different outcomes. We are unclear as to the degree of personal contact
that would be required to satisfy the due process requirement at this
appeal level and would defer to SSA the decision as to how much contact
is needed and how the requirement could be met. Is a face-to-face
hearing necessary or can a phone interview suffice? Even the former,
conducted in the DDS, would be substantially less costly than the
current hearing before the ALJ. The DDS hearing would allow the
claimant to receive a much more timely hearing than the current process
allows. NADE also believes that the role of attorneys and other
claimant representatives would be significantly diminished as the
opportunity for reversal of the DDS decision would be lowered
substantially. The DDS hearing would be an informal hearing, lessening
the impact attorneys have at this level.
<bullet> NADE believes that the current 60 day period granted to
claimants to file an appeal should be reexamined in light of modern
communication and greater ability of claimants to file appeals more
quickly. Reducing the time allowed to file an appeal would produce cost
savings to the program and aid the claimant in obtaining a final
decision much more quickly.
The additional costs incurred by the DDSs in this new process would
be paid for from monies reallocated from OHA and from the cost savings
created by less folder movement between the DDSs and the Field Offices.
Political decisions will have to be made to reallocate these funds and
these decisions will not be popular. Because of turf guarding by the
various components within SSA and a general unwillingness to accept
change, NADE believes that the victim in past efforts to develop a
comprehensive disability claims process has been the claimant. The
question must be asked, ``Who do we serve, ourselves or the claimant?''
NADE envisions a claims process that would reinforce the medical
decision made by the DDS and limit the OHA legal decision to addressing
only points of law. NADE believes this proposal would produce a high
level of consistency for the disability decisions rendered by the DDSs
while significantly reducing the opportunities for OHA to reverse DDS
decisions. This would help restore public confidence in the system,
provide good service to the claimant and reflect good stewardship since
the entire process should prove to be less costly than prototype or the
traditional process. The decision as to whether a claimant is disabled
would rightfully remain primarily a medically based decision. Claimants
who appeal the DDS decision to an ALJ would be entitled to hire legal
counsel if they wish. SSA would have an official representative at any
such hearing to define the merits of the DDS decision. Unless the law
was incorrectly applied, the DDS decision would be affirmed. Any appeal
of the ALJ decision would be made to the Social Security Court and
either side could appeal.
The proposal is predicated on the assumption that sufficient
staffing and resources would be made available to the DDSs. It is also
predicated on the need for SSA to clearly define the elements that will
satisfy the process unification initiatives. It is critical that SSA
should provide clarification of what steps must be followed and provide
the funds necessary or modify these rulings in accordance with
practical experience.
The current prototype experiment was begun in ten states nearly
four (4) years ago. Although this process has since been modified and
the claimant conference portion of this experiment abandoned, it still
continues in force for those states affected. Clearly, an exit strategy
for those states involved in this experiment must be developed quickly
and a new disability claims process put into place nationwide that will
avoid the ongoing necessity of SSA having to operate two distinctly
different disability programs. Significant training and reallocation of
resources will be needed. Therefore, it is imperative that decisions
are made as soon as possible as to what course of action is deemed
acceptable.
Thank you.
<F-dash>
Statement of Witold Skwierczynski, American Federation of Government
Employees, Social Security General Committee, and National Council of
Social Security Administration Field Operations Locals
Chairman Shaw, Ranking Member Matsui, and members of the Social
Security Subcommittee, I respectfully submit this statement regarding
Social Security's Service Delivery Budget and the challenges the Agency
faces to improve the disability claims process, further implement the
Ticket to Work Program, protect the integrity of the Trust Fund, and
combat Social Security number misuse. As a representative of AFGE
Social Security General Committee and President of the National Council
of SSA Field Operations Locals, I speak on behalf of approximately
50,000 Social Security Administration (SSA) employees in over 1300
facilities. These employees work in Field Offices, Offices of Hearings
& Appeals, Program Service Centers, Teleservice Centers, Regional
Offices of Quality Assurance, and other facilities throughout the
country where retirement and disability benefit applications and appeal
requests are received, processed, and reviewed.
SSA employees are absolutely dedicated to providing the highest
quality of service to the public in a compassionate manner. The
employees AFGE represents are committed to serving in an Agency
responsive to the workers and beneficiaries of our communities. While
SSA's workloads continue to increase steadily, human resources in the
Agency have been facing a crisis for many years. This is the result of
severe downsizing within the Agency. Staff loses have been
disproportionately higher in positions that provide direct public
service. The proposed Service Delivery Budget for FY 04 incorporates
1,000 new immediate hires for field offices, payment centers,
teleservice centers and hearings offices and represents an 8%
administrative increase. These additional positions will be utilized
almost exclusively to process the Special Title II Disability
workloads. AFGE is certainly supportive of this increase; however, far
greater resources are required in order for SSA's workers to meet the
challenges that face the Agency.
Improving the DI and SSI Disability Claims Process:
The Agency Strategic Plan and Service Delivery Budget call for an
elimination of the current tremendous disability backlogs and
conversion to an electronic disability folder (EDCS). SSA is also
preparing additional recommendations to improve the timeliness and
accuracy of the disability process. In the past, observers such as the
SSA Advisory Board were critical of the uneven allowance rate, which
depend on a claimant's state of residence. Profit motivated companies
have become an increasing problem in SSA. These companies have taken
over some claims taking functions that have traditionally been viewed
as inherently governmental. Such transfer of work has often resulted in
poor service and occasionally in outright fraud and criminal activity.
Solving these problems is a daunting task. A multifaceted response
is required. Certainly Congress must supply adequate budgetary
resources to enable SSA to process the anticipated increases in
disability workloads.
However, during the Disability Redesign initiative of 1994-2001, at
a cost in excess of $100 million, the single pilot which was most
successful in improving the process by reducing processing times,
providing greater customer satisfaction and maintaining quality was the
Disability Claims Manager (DCM) pilot, a three-year test which measured
the capability of one person to adjudicate both the technical and
medical factors of entitlement. The Agency dismantled the project in
June 2001. On behalf of AFGE, I have previously submitted both oral and
written testimony highlighting the significant reductions in processing
time and increases in claimant satisfaction with the DCM process as
documented in SSA's DCM evaluation. The DCM was designed as a test of
one stop service for SSA disability claimants. The current bifurcated
process requires a decision on technical entitlement factors by an SSA
employee and the medical decision certification by each states'
disability determination service (DDS). This procedure is cumbersome
and guarantees delays due to constant hand-offs. The DCM combined the
split decision-making process by successfully cross-training state and
federal employees, so that one employee could render both decisions.
This eliminates superfluous hand-offs.
The DCM pilot was the essence of good government. The processing
time was cut by one-half, from 120 days to 62 days for an initial
disability claim, solving the biggest problem for SSA in initial
disability claims. The public was extremely satisfied as were the
employees at 83%. Productivity improved and the cost was neutral.
Although SSA contended in its final report that the DCM was too
expensive, the data indicated that during the last few months of the
DCM test, the cost was equal to the current process.
The House Ways and Means Subcommittee has repeatedly urged SSA to
take steps to streamline the disability process. Claimants suffer from
unnecessary delays due to bureaucratic obstacles in processing their
earned disability benefits. Every claimant is faced with an average 4-
month initial claims process despite the proven success of the DCM
pilot showing that initial disability claims can be processed in 2
months when the process is consolidated. The first step to reforming
the disability claims process is the resurrection of the DCM.
The House Ways and Means Subcommittee should insist that SSA resume
the DCM as the first step to streamline the disability claims process.
The Subcommittee should also examine and convert any legal barriers to
making the DCM the universal methodology for processing initial
disability claims. I strongly urge the Subcommittee, Congress and the
Administration to reconsider an incremental approach toward phasing in
the DCM concept in SSA. Rather than appropriate funds such as the $24
million that SSA is spending on contractors who will attempt to obtain
disability applications from the homeless, Congress and SSA should be
appropriating sufficient resources to reestablish the DCM position and,
consequently, solve the initial disability claims problems for the
homeless and all other disability applicants
Electronic Disability Folder (EDCS):
While the concept of instituting an electronic medical folder may
produce benefits to accuracy and timeliness at some future point, this
comes at a huge immediate cost to both employees in field offices and
in overall service to the public. The technology and the EDCS program
are not at a point where its use is viable to employees, yet employees
are mandated to enter even totally completed paper ``self-help''
medical forms into the EDCS program.
AFGE recently conducted an extensive survey of employees using this
system, and found that 62% of the respondents said the process added 45
minutes or longer to the interview, 75% of respondents thought
claimants were waiting longer in reception and 80% of respondents said
appointments were frequently or sometimes delayed or missed because of
EDCS. 75% of employees are missing contractually guaranteed breaks and/
or lunches due to the extremely long interviews. Increased backlogs of
work were reported universally in mostly post-entitlement areas, such
as SSI redeterminations, medical and work CDRs, overpayments, and
workers' compensation calculations, as well as returning phone calls to
the public. Additionally, workers in field offices estimated that 20%-
40% more staff was needed in offices solely because of the EDCS
process. AFGE urges that SSA take a step back from the implementation
pace and improve the end user viability of the EDCS program.
Furthering Implementation of the Ticket to Work Program:
AFGE has repeatedly stated that, in order to comply with the
legislative mandate of providing accessible and responsive work
incentives specialists and to provide complete, accurate and timely
service to the disabled beneficiary trying to return to work, a
dedicated employee is needed to service each office. The success of
TWWIIA is dependent on this.
To be most effective this specialist should be locally based in the
community field office environment and able to work with and develop
relationships with local organizations and groups. This person should
also be a single point of contact for the public. The program will not
work if Disability beneficiaries are shuttled between multiple
employees and multiple Agencies in their efforts to return to work. We
have seen this successful model in the Employment Support
Representative (ESR). SSA's own pilot evaluation of the ESR concludes
that it is the successful model that provides disability beneficiaries
with the comprehensive services necessary to provide them with the
opportunity to return to the workforce. We have thoroughly highlighted
in our prior statements the successes of the ESR in providing service
to the community, to the beneficiaries, to their fellow office staffs,
and in processing the work issue CDRs. We have addressed the potential
to save hundreds of millions of Trust Fund dollars by processing cases
timely and avoiding large overpayments.
The Agency has decided to discontinue the successful ESR pilot, and
to implement an Area Work Incentives Coordinator position (AWIC). These
AWICs, essentially one serving each of 52 Area offices, would be
dedicated to coordinating outreach activities with advocacy groups,
overseeing Ticket to Work functions and workloads, and overseeing
Return to Work (RTW) workloads in many offices through out the service
area. While this is an acknowledgement on the part of the Agency of the
need to focus some measure of importance on RTW activities, it is the
Union's understanding that the AWICs would not interface with claimants
nor work on their cases, except in rare situations. Therefore, it is
AFGE's view that this position is not a work incentives specialist as
intended by the requirement in Section 121 of the Ticket legislation.
The legislation mandates that SSA establish an accessible and
responsive corps of work incentives specialists. The specialists are
supposed to be accessible and responsive to the beneficiaries. Even if
AWICs were given more responsibilities dealing directly with disability
beneficiaries, the few positions that SSA is willing to allocate to
this effort does not address Congress' legislative mandate that SSA
establish work incentive specialists who can promote the Ticket to Work
program to the community and assist and encourage disability
beneficiaries' efforts to return to the labor force.
Another key piece of SSA's strategy to improve service in return to
work issues is to utilize Work Incentives Liaisons (WILs) at the field
office level. There are currently more than 1200 employees designated
as WILs. To date, the WILs encumber a wide variety of bargaining unit
and non-bargaining unit positions. The WIL duties are a collateral
designation, and WILs in many offices are not the employees who
actually process the work issue CDRs, work reports, posting of wages,
Plans for Achieving Self Support, and other work incentives functions.
The Agency plans to change the WIL to make it a uniform GS 12
Technical Expert (TE) performing these duties, instead of using a
variety of different positions. However, because of the severe resource
shortages in offices, the lack of prioritization of this workload, and
absent workload adjustments, AFGE believes this will not lead to
improvement in addressing RTW workloads or in serving as a work
incentives specialist for the public. TEs are already the
responsibility of processing ``difficult claims''. Adding return to
work responsibilities to TEs only exacerbates SSA's ability to process
such work. It will not assist in achieving the goal of establishing a
core of work incentive specialists.
Return to Work provisions are highly specialized, requiring the
accurate application of many complex and even seemingly contradictory
incentives, particularly in concurrent SSDI/SSI cases. Processing these
cases correctly and timely has a major life impact on the beneficiary,
in addition to effecting a successful transition to work activity.
Overpayments to beneficiaries resulting from delays in processing cases
are not merely onerous, but can cause irreversible setbacks to
beneficiaries. There is no coherent, clear procedure enabling claimants
to report the correct events to the right person, absent a dedicated
specialist, such as an ESR, who guides the beneficiary throughout the
return to work process.
AFGE is opposed to the Agency initiative to fund the Navigator
position in the DOL. Available resources should be used within SSA to
dedicate to TWWIIA mandated requirements. SSA argues that despite the
success of the ESR, it does not have the resources to dedicate
employees to this priority. However, SSA has found the resources to
provide DOL with half the funding for Navigator positions. Initially
80-100 positions will be established in DOL. SSA plans to eventually
increase the initial allotment to 1600 Navigators. The Union believes
the Navigator will actually create confusion for beneficiaries and
further fragment the process of obtaining accurate, personalized
information on return to work. This position adds no value to SSA's
obligation to comply with the legislative mandate of providing
accessible and responsive work incentives specialists, and, instead,
shifts limited resources from SSA to DOL. The Subcommittee should urge
SSA to request the necessary resources to fully fund a rollout of the
ESR position in all SSA Field Offices.
No employee in SSA's scheme will fulfill the Congressional intent
of Section 121 of the ``Ticket to Work'' legislation and create the
best opportunities for insuring that disability beneficiaries have the
opportunity to return to work. SSA's complex approach of AWICS, WILs
and Navigators is a prescription for confusion and failure.
Integrity of the Trust Fund:
The Service Delivery Budget calls for spending $1.5 billion to
process 1.6 million medical improvement continuing disability reviews.
In processing the medical issue CDRs, SSA contends that for every
dollar spent, seven to twelve dollars in benefits are saved. The cost
savings are greater for ``work'' CDRs since the cost of medical
decision-making is eliminated, and the cessation rate on work issues is
higher. AFGE estimates cost savings approaching $30 to the Trust Fund,
for every dollar spent. Overpayments on these backlogged work issue
CDRs can reach hundreds of thousands of dollars for an office, and
employees have encountered overpayments on individual records reaching
$100,000!
Unfortunately, the Union is unaware of any statistical data
regarding the numbers of work CDRs processed, the number pending, and
the cessation rate due to work activity. SSA should be required to
maintain and produce such data.
Allocating the resources to fund a specialist in each office is a
perfect example of applying stewardship responsibilities effectively
and investing resources in a high cost: benefit manner. Furthermore,
the drain on office resources used for processing overpayments,
waivers, and personal conferences would be greatly reduced. Full
implementation of a work incentives specialist at the field office
level should have a significant positive impact on the Trust Fund
balance and consequently extend the solvency of the Fund. It would be
foolish not to support a position that leads to this result.
Social Security Number Misuse:
Accuracy on the part of the SSA employees processing requests for
Social Security numbers is greater than those of the agency charged
with safeguarding immigration records. In SSA, we process 6 million
Social Security Number requests annually. According to SSA's OIG, less
than 1.6% of Social Security Number requests have been issued with
false INS documents. That figure was based on FY2000 statistics.
However, since FY2000, SSA has implemented new systems enhancements and
policies that require all INS documents of foreign-born applicants to
be verified by INS before the issuance of a Social Security number. The
Union believes that these measures have further safeguarded the privacy
and integrity of the SSN records.
AFGE has previously submitted testimony stating that,
unfortunately, SSA has also implemented initiatives that we believe are
harmful to the integrity of all SSA records leaving every American
vulnerable to attack by terrorists, international criminals, and an
increasing number of identity thieves.
In May 2002, the Union became aware that the Agency implemented a
program that allowed employers to gain access to SSN records of their
newly hired employees via the Internet. This program has been approved
by OMB for 630 major employers and may be soon expanding. According to
approved procedures, SSA business partners and companies are nominated
by SSA's Senior Financial Executive under the Deputy Commissioner
Finance Assessment and Management, then approved by SSA's Commissioner.
The Union believes that employer access to SSN records will result
in misuse, fraud and abuse of individual privacy. On the issue of
privacy, if the employer can obtain this information about an
individual, anyone with an EIN may gain access to personal information.
The gatekeeper of SSN records thus becomes the employer and its
employees authorized access to ``verify'' Social Security records.
Additionally, the Union has learned that employers are not required
to provide the same identifying information that wage earners must
disclose to obtain access to their own records. This information
includes ones date of birth, place of birth and mother's maiden name.
Thus, SSN records of someone with a similar or same name may be
provided to the employer, making it easier for someone to use another
person's SSN. Therefore, the employer would further compromise the
integrity of SSN records.
SSA has developed an alert system to determine if employers may be
verifying an excess of SSN records. If an employer requests
verification on more than 200 percent of the number of W-2s processed
in the preceding tax year, an alert will be issued. The Union strongly
believes that this ``alert'' system is a facade to provide concerned
parties with a false sense of security of individual privacy. Although
SSA's own reports indicate that one employer has already exceeded its
number of employees by more than 500%, SSA has failed to conduct an
audit.
Furthermore, SSA has not developed or communicated a written policy
to hold companies legally liable for misuse of employer access of SSN
records.
It is the Union's understanding that SSA plans to expand other
services and/or records to employers in the future. OMB must give
approval to SSA to expand the number of employers who can gain access
to SSN records. We strongly believe that Congress should urge the OMB
to rescind this program to insure integrity of SSN records and
individual privacy.
In June, 2002 SSA implemented a new procedure requiring
verification of birth records for all U.S.-born applicants age 1 or
older requesting an original Social Security number and for anyone
requesting to change a date of birth on the Numident Record. The
estimated yearly cost of verifying birth records for just those
individuals seeking an original SSN is approximately $1 million. SSA's
own managers questioned the wisdom of implementing this policy given
the low percentage of fraudulent birth certificates presented to the
Agency. Mandatory verification of all birth records instead of just
those that are suspect is a gross waste of Trust Fund dollars.
Another new initiative is lowering the mandatory in-person
interview for an original SSN from age 18 to age 12. In addition, new
required questions have been developed for interviewers to ask and the
new policy states the questions are to be directed to the child, not
the parent. AFGE questions the legal authority of the Administration in
directly questioning children aged 12-17 on topics that they are
unlikely to provide correct information (i.e., investments, bank
accounts and other financial instruments which would require an SSN),
and the value of the answers obtained from them.
SSA has implemented an Enumeration Center as a pilot in the
Brooklyn, NY area. SSA field office employees, SSA's OIG and INS
employees staff this Enumeration Center. All requests for Social
Security cards will be handled at the Enumeration Center, rather than
an SSA field office. This means that if someone walks into a SSA field
office to apply for a SSN, the SSA employee who normally would help the
applicant will have to refer him or her to the Enumeration Center for
assistance. This would include referring clients who have other
business at an SSA field office. If an individual, for example, files a
claim and requests a replacement Social Security card, they must go to
both their local office and the Enumeration Center to obtain service.
AFGE opposes the concept of Enumeration Centers. SSA's field
offices have always been full-service facilities. The taxpayer deserves
full-service and one stop shopping. To refer SSN applicants to an
Enumeration Center that may be miles away, will create barriers and
greatly inconvenience folks who rely on public transportation or have
physical disabilities. The Union does not oppose the continuation of
the Brooklyn Enumeration Center as a pilot. However, expansion of this
initiative would require many SSA claimants to travel to 2 different
sites for SSA service. This definitely constitutes poor public service.
Office Closings:
For many years the Social Security Administration has pledged to
provide the public with broad access to the Agency. Such access
includes face-to-face service, telephone service, and, recently,
Internet access. This pledge is fundamental to SSA's mission which is
to provide the aged, disabled, survivors and the impoverished with
convenient options to interact with the Agency. The key element to this
pledge is to provide community-based service to the public.
Recent developments regarding office closings bring into question
SSA's intention to fulfill this pledge. The Agency has either closed or
announced its intention to close a number of offices. The union
strongly objects to this Agency policy to remove the option of face-to-
face service from thousands of SSA claimants and beneficiaries.
Earlier this year Chicago Regional Commissioner James F. Martin
issued a memorandum encouraging managers to review their office
structure for the purpose of identifying candidates for
``consolidation''. He indicates in the memorandum that previous Service
Delivery Assessments (SDAs) have resulted in maintaining the status
quo. However, he encourages managers to strongly consider office
``consolidations'' in future SDAs. The only rationale that he posits
for this change in emphasis is the cost of security guards and office
space. Although he asserts that there is no quota for office closings,
union officials have informed me that each Area Director in the region
is expected to close at least one office.
Other regions have also been actively engaged in closing offices.
The Union has received reports from Boston, New York, and San Francisco
regions regarding offices that have either closed or are targeted for
closing. Some are in urban/suburban areas (e.g. Brookline MA, Euclid
OH, and Medina OH); others are in rural areas many miles from another
office (e.g. Iron Mountain MI and Cairo IL). Sometimes employees view
such closings with relief since the targeted offices have suffered for
years from SSA's failure to provide adequate staffing for these
facilities.
It appears that the increased emphasis to close field offices is
not based on any service delivery assessment, but rather is an attempt
to save money by reducing levels of service to the public. Certainly
administrative costs are an issue to consider when analyzing the level
of service to provide to the public. However, it is difficult to
understand how the Agency can condone removing community based offices
from some cities while at the same time spending $97 million for a new,
renovated Operations Building in headquarters.
The Agency has a sordid history regarding office closings. The
Grace Commission report issued during the Reagan Administration
recommended that SSA reconfigure its office structure and close all but
430 offices. In response SSA secretly formulated plans to consider
closing all field offices with less than 25 employees. When the Union
learned of these plans and released them to the press, the adverse
public reaction was so intense that SSA abandoned its office closing
agenda. Legislation was introduced in both the House and the Senate
that would have required a moratorium on all office closings. In
addition, the legislation would have required stringent advance
reporting requirements to Congress justifying every proposed office
closing after the moratorium expired. SSA received significant
unfavorable press coverage regarding its office closing initiatives
until the Agency decided to abandon the effort
Since that time SSA has reduced the staff of field offices to such
a degree that most offices are under the 25 employee threshold. Now, it
appears that the next Agency step is to close offices that have
diminished in size rather than provide them with adequate staffing so
that the employees can do their job properly. This has occurred despite
the fact that the public continues to demand the availability of the
face-to-face service option.
The recently issued SSA Strategic Plan for 2003-2008 contains the
strategic goal: To deliver high-quality, citizen centered service. This
goal entails the continuation of SSA's traditional in-person and
telephone service. The Plan specifically states that it is an Agency
goal to provide a choice of ways to access service. Closing offices
violates this strategic mandate. Such actions diminish the public's
access to SSA services. Such actions especially adversely effect the
vulnerable population that is the core of SSA's clientele: the aged,
disabled, children and the impoverished.
The Union opposes the efforts by SSA to close field offices. The
Union urges the Subcommittee to enact legislation requiring that SSA
place an immediate moratorium on these closings. Such legislation
should provide that an independent Congressional study be conducted of
all SSA plans to consolidate, close or restructure it's field office
alignment. This study should analyze the effect that office closings
have on the promptness and accessibility in providing SSA services to
those citizens who choose to conduct their business face to face. The
union, also, has serious concerns regarding the adverse impact these
office closings have on SSA workers.
Conclusion:
The challenges SSA faces to improve the disability claims process,
further implement Ticket to Work Program, protect the integrity of the
Trust Fund, and combat Social Security number misuse in light of
resource shortages have been exacerbated as the Agency and employees
grapple with Electronic Disability Collection System (EDCS)
implementation and the Special Title II Disability (ST2DW) workload.
Over two years ago, prior to the emergence of these two initiatives,
both AFGE and the National Council of Social Security Management
Association (NCSSMA) estimated shortages of approximately 5000
employees in order to adequately provide public service, maintain staff
expertise, and process work in field offices. Resource shortages are
growing more critical every year. The employees we represent live with
the daily stress in their offices of trying to provide good service and
process their important workloads lacking adequate staff. This
subcommittee should take a serious look at the actual resource
requirements of SSA. Continuing failure to provide necessary staff will
result in further deterioration of service to SSA's constituents.
In summary, AFGE supports the following actions:
1. Support the proposed 1000 FTE increase in the FY 04
appropriations service delivery budget.
2. The Union in conjunction with the NCSSMA supports additional
funding for 5000 FTEs to adequately provide public service, maintain
staff expertise and process work in field offices.
3. Resurrect the Disability Claims Manager (DCM) concept and
eliminate the legislative barriers that prevent full implementation of
the DCM.
4. SSA should step back from its EDCS implementation schedule.
SSA should analyze the FTE impact of full EDCS implementation and
either request additional staff or shift staffing resources to field
offices due to the increased interviewing time needed to process
disability claims in the internet-based environment.
5. Congress should fully fund the nationwide rollout of the ESR
position in all SSA field offices to insure the fulfillment of the
Congressional intent pursuant to Section 121 of the Ticket to Work
legislation.
6. SSA should be required to report to Congress periodically the
number of Continuing Disability Reviews (CDR) processed, the number
pending and the cessation rate due to work activity.
7. Congress should rescind the program that allows employer
access to social security number (SSN) records of prospective
employees.
8. Congress should prohibit mandatory verification of all birth
records for individuals who are age 1 or older due to the cost and the
low incidence of fraud.
9. SSA should rescind the mandatory face-to-face interview
requirements for children applying for SSN between the ages of 12
through 17.
10. SSA should halt any future establishment of Enumerations
Centers, which require the public to visit multiple SSA offices rather
than one full service office.
11. Congress should immediately place a moratorium on field office
closings. Congress should require an independent study of such proposed
closings. Such a study should assess the impact of proposed office
closings on the promptness and accessibilities of providing face-to-
face service to the public.
Thank you once again for the opportunity to submit this statement.
<F-dash>
Statement of James A. Hill, Office of Hearings and Appeals, Social
Security Administration, and Chapter 224, National Treasury Employees
Union
My name is James Hill. I have been employed as an Attorney-Adviser
by the Office of Hearings and Appeals for over 20 years. I am also the
President of Chapter 224 of the National Treasury Employees Union
(NTEU) that represents Attorney-Advisers and other staff members in
approximately 110 OHA Hearing and Regional Offices across the United
States. I thank the Subcommittee for allowing me to submit testimony
regarding the challenges and opportunities facing Social Security
disability programs today.
Disability adjudication at SSA has a long and troubled history.
Primarily as a result of the Senior Attorney Program, the crisis of the
mid-1990s was successfully resolved. Subsequent events, including
termination of that program and the ill-advised Hearing Process
Improvement Plan (HPI) have created even a greater crisis. The
situation is clearly out of hand, and SSA seems to be at a loss as how
to regain control. Its history of prematurely implementing high profile
but fundamentally unsound ``magic bullets'' such as Re-engineering, the
Disability Process Redesign (DPR), the Modified Disability System, the
Redesigned Disability System, and the Hearing Process Improvement
initiative have all failed miserably. The newest ``Great Hope'' is the
Accelerated E-DIB (AeDib) Initiative. While some aspects of this
program will undoubtedly succeed, its centerpiece, the ``electronic
folder'' represents a risk far greater than any previously undertaken.
NTEU concurs with the testimony of Linda D. Koontz, Director,
Information Management Issues of the Government Accounting Office. The
risks of proceeding with full-scale implementation without adequate
testing should be well known to SSA. The Disability Process Redesign
and the disastrous HPI both suffered from inadequate, or in the case of
HPI, nearly absent testing. NTEU is also concerned about SSA's
inability to convince key stakeholders of the viability of AeDib. While
Ms. Koontz' testimony primarily dealt with the State Agency's views, an
even greater problem may exist at the hearing office level.
GAO contends, and rightly so, that former SSA initiatives such as
DPR and HPI suffered from a lack of ``buy-in'' by key stakeholders
including SSA and OHA employees. I regret to inform you that the lack
of ``buy-in'' by OHA employees (including managers at all levels)
regarding the electronic folder surpasses even the level evidenced
before the introduction of HPI.
It is important that this Subcommittee understand the nature of
employee skepticism. It does not emanate from a reluctance to face
changes. It is not the result of obstructionism. It does not indicate a
lack of desire to change or improve the process. The lack of buy-in is
the result of a belief that the proposed initiative will not meet
operational necessities at the site where work is actually being
performed. Employees at OHA have frequently been subjected to programs
designed by individuals who do not understand the details or nature of
the work at the operational level. In short, the planned initiatives
have been and continue to be unrealistic. Given the past record of
highly touted but unsuccessful initiatives, it would be understandable
that resistance to Accelerated E-DIB would be based on skepticism
engendered by history. That is not the case. OHA employees understand
the process improvement that could result from electronic files, but
they are also aware of the operational difficulties for which no
solutions have been advanced.
On June 19, 2003, SSA presented an IVT Program designed to begin
the training process for the introduction of AeDib. Most of the
components of that program are relatively uncontroversial, and did not
generate a great deal of concern. However, the prospect of the
electronic folder raised a number of issues, and specific questions, to
which the Agency spokespersons admitted they had no answers.
Unfortunately, some of the questions dealt with core operational issues
at the hearing office level. An ALJ noted that currently at the
administrative hearing, the ALJ has a file, the Medical Expert has a
file, the Vocational Expert has a file and the claimant and/or his/her
representative has a file. This facilitates the consideration of
specific medical and other evidence. How would this be done with an
electronic folder? Would paper copies be made for each participant?
Would each participant be provided with a personal computer or would a
large computer screen viewable by everyone in the hearing room be
provided? The answer was discouraging. It was clear that the question
of how hearings would be conducted with electronic folders had not been
seriously considered.
Currently, decisions are drafted on personal computers. A decision
writer asked how could that be accomplished while viewing the evidence
simultaneously on the same computer screen. Displaying the evidence
already involves splitting the screen into several segments leaving no
room for the text of the decision being drafted. Would two computer
screens be provided? The response was again discouraging. We were
informed it was unlikely that two computers would be provided to
decision writers. The matter of drafting decisions with the electronic
folder has not yet been considered. The responder then noted that this
did not seem to be a problem at the DDS test site. The responder's lack
of understanding of the difference between the minimal and sometimes
nearly non-existent rationale provided by DDS adjudicators and the
formal ALJ decision which must withstand Federal Court scrutiny further
emphasized the lack of operational knowledge of those directing the
implementation of the electronic folder.
The lack of answers to these questions does not engender
confidence. The effect of the inability to adequately answer questions
which deal with the fundamental operations in a hearing office is
devastating. Despite the potential of the electronic folder to
significantly improve operations, until fundamental operational
questions are resolved, implementation is premature. Buy-in by
employees (and managers) will not occur until those operational
problems are actually solved.
The Backlog at OHA Hearing Offices
The history of OHA's success or lack thereof in dealing with the
disability caseload at the hearing office level is demonstrated by the
following chart. The period when the backlog declined is
contemporaneous with the Senior Attorney Program.
[GRAPHIC] [TIFF OMITTED] T3734P.001
The backlog has risen to record levels leading to a decline in
service to the public that is unconscionable. While there are a number
of factors (many inflicted by unknowledgeable SSA officials
implementing counterproductive initiatives) contributing to the abysmal
performance of OHA hearing offices, the most fundamental problem at the
OHA hearing level remains the lack of a sufficient number of
adjudicators. SSA must quickly recognize that current initiatives are
inadequate and move quickly to augment them by reinstituting the Senior
Attorney Program.
The lack of sufficient decision makers must be addressed on both a
short term and long term basis. The answer is not hiring vast numbers
of ALJs as was acknowledged last year by Deputy Commissioner Gerry in
his testimony before this Subcommittee. Hiring the number of ALJs
needed to efficiently adjudicate the entire OHA workload is cost
prohibitive, and operationally unnecessary. Many of the cases that come
to OHA do not require the participation of an ALJ in the adjudicatory
process. Many cases come to OHA that with minimal evidentiary
development demonstrate that the claimant is disabled. These cases
could be resolved almost immediately, if the proper adjudicatory
mechanism was available. During the disability crisis of the 1990's,
SSA created the Senior Attorney Program to deal with these kinds of
cases. That program produced nearly 220,000 favorable decisions while
permitting ALJs to direct their attention to the cases that required
ALJ adjudication. The net result was the cases pending at OHA fell from
over 550,000 to 311,000 by the end of FY 1999. ALJs should remain the
backbone of the OHA adjudication process, but SSA should immediately
reinstitute the Senior Attorney Program and investigate the feasibility
of utilizing other attorney adjudicators such as a magistrate/hearing
officer position to assist the ALJs in adjudicating the OHA caseload.
Last year GAO issued a report which in part emphasized the success
of the Senior Attorney Program. The Senior Attorney Program involved
OHA's experienced attorneys reviewing and developing cases upon their
arrival at the hearing office and issuing fully favorable On-The-Record
(OTR) decisions in cases that did not require a hearing. The GAO
recommendations clearly contemplated a return to the Senior Attorney
Program.
However, SSA did not see fit to follow that advice. The result was
a continued increase of the backlog at OHA hearing offices as
demonstrated by the following chart.
[GRAPHIC] [TIFF OMITTED] T3734Q.001
While recognizing the value of early screening of cases by the
decision maker, it has instructed its ALJs to perform that role. The
problem is that having ALJs perform the time consuming task of
reviewing unpulled cases, significantly reduces the time ALJs can spend
conducting hearings and deciding those cases in which a hearing is
required. While the Senior Attorney Program produced cases in addition
to those produced by ALJs, the current token ALJ screening program only
redirects ALJ time. It does not increase the number of decision makers
and will not significantly increase the total number of dispositions.
The inefficiency of the ALJ review program can be seen in the
monthly statistics released by OHA. During the period including
February 2003 through June 2003 over 250,000 claimants filed appeals to
OHA. OHA's Monthly Activity Report indicates that ALJs reviewed only
25,713 of these files resulting in 6,474 OTR decisions. That ratio of
OTR decision to ALJ reviews, approximately 25%, is the same ratio
evidenced by the original Senior Attorney Program. The inefficiency of
this program is apparent when one considers the number of OTR decisions
made. The Senior Attorney Program produced 40,000-50,000 decisions a
year while the annualized rate for the current token ALJ screening
program is a mere 15,538 decisions at the cost of fewer ALJ non-OTR
decisions.
OHA is well aware of the relative inefficiency of the ALJ screening
initiative. In response OHA sent a directive to hearing offices
requiring inclusion of the screening activities done by current
Attorney Advisers in the ALJ statistics, thereby, OHA hopes, improving
the appearance of this inherently inefficient process. Instead of
trying to obfuscate the facts, OHA should move aggressively to increase
it adjudicatory capacity within the bounds of fiscal restraint.
Recommendations
NTEU makes the following recommendations for action necessary to
ensure that the Office of Hearings and Appeals delivers the quality of
service demanded by the American people currently and in the future:
1. SSA should adopt a more reasonable timeframe for the
introduction of the electronic folder.
2. SSA should involve its stakeholders more intimately in the
design process to ensure that the electronic folder enhances the
conduct of fundamental operational functions.
3. SSA should conduct extensive full process testing before the
implementation of the electronic folder on a national basis.
4. All qualified OHA Attorney Advisers should be converted to
Senior Attorney decision makers and given the authority to issue fully
favorable on-the-record decisions. These Senior Attorney decision
makers would review all cases coming into the hearing office as well as
providing decision writing support for the ALJs.
5. SSA should establish a workgroup to examine the implementation
of additional attorney decision makers, such as a magistrate/hearing
officer position that would work in conjunction with the ALJs in
adjudicating the ever-growing disability workload that faces SSA.
<F-dash>
Statement of the Honorable Stephanie Tubbs Jones, a Representative in
Congress from the State of Ohio
Mr. Chairman, my dear colleagues, Commissioner Jo Anne Barnhart,
Bob Robertson, Linda Koontz and Susan Prokop, please accept my
apologies for being absent this morning. I am currently addressing the
House floor to express my opposition to the Chile & Singapore Free
Trade Agreements.
However, I will follow up with all of you to address specific
concerns I have regarding the Social Security Administration's (SSA's)
plan to address the outstanding backlog problems with disability claims
processing, and the SSA's budget request.
I'd like to commend Commissioner Barnhart and her staff for their
hard work in developing a 5-year Service Delivery Budget Plan.
I am pleased to see that the Commissioner's budget includes 1,300
new positions, and I hope that these new positions are filled in a way
that represents all Americans. I look forward to working with the
Social Security Administration to resolve the many challenges the
Social Security Administration faces. Again, please excuse my absence,
and I thank you for appearing before the Social Security Subcommittee
today.
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