Report to Agency Officials

United States General Accounting Office

GAO

August 2002 SSA AND VA

DISABILITY

PROGRAMS

Re-Examination of

Disability Criteria

Needed to Help

Ensure Program

Integrity

GAO-02-597
Page i GAO-02-597 Re-Examining Disability Criteria

Letter 1

Results in Brief 2

Background 4

SSA Provides Benefits to People Found to Be Work Disabled 6

Disability Criteria Not Fully Updated to Reflect Scientific Advances 14

Disability Criteria Not Updated to Reflect Labor Market Changes 23

Incorporating Scientific Advances and Labor Market Changes into

Disability Criteria Has Several Implications 26

Conclusions 29

Recommendations for Executive Action 30

Agency Comments and Our Response 31

Appendix I Comments from the Social Security Administration 36

Appendix II Comments from the Department of Veterans Affairs 40

GAO Comments 46

Appendix III Five-Step Sequential Evaluation Process for

Determining DI and SSI Eligibility 48

Appendix IV GAO Contacts and Staff Acknowledgments 50

GAO Contacts 50

Staff Acknowledgments 50

Tables

Table 1: Progress of SSA’s Current Efforts to Update Medical

Listings 17

Table 2: Types of Changes Made (or Proposed) to SSA’s Medical

Listings during Current Update 20

Table 3: Types of Changes Made (or Proposed) to VA’s Schedule

for Rating Disabilities during Current Update 21

Contents
Page ii GAO-02-597 Re-Examining Disability Criteria

Figures

Figure 1: DI, SSI, and VA Cash Payments to Adults with

Disabilities, 1991-2001 5

Figure 2: Percentage Distribution of DI Disabled Workers by

Impairment Categories, 2000 7

Figure 3: Percentage Distribution of SSI Adult Disabled Recipients

by Impairment Categories, 2000 8

Figure 4: Percentage Distribution of Veterans Receiving Disability

Compensation by Impairment Categories, 2000 11

Figure 5: Time Frame of VA’s Efforts to Update the Schedule for

Rating Disabilities 19

Abbreviations

DI Disability Insurance

DOT Dictionary of Occupational Titles

O*NET Occupational Information Network

SGA substantial gainful activity

SSA Social Security Administration

SSI Supplemental Security Income

VA Department of Veterans Affairs
Page 1 GAO-02-597 Re-Examining Disability Criteria

August 9, 2002

The Honorable Jo Anne B. Barnhart

Commissioner of Social Security Administration

The Honorable Anthony J. Principi

Secretary of Veterans Affairs

The three largest federal disability programs providing cash assistance,

which are administered by the Social Security Administration (SSA) and

the Department of Veterans Affairs (VA), in 2001 collectively provided

$89.7 billion in cash benefits to approximately 10.2 million adults with a

physical or mental condition that reduced their earning capacity. With

such an extensive cash outlay and such a large beneficiary population, it is

important to use updated scientific, workforce, and economic information

to evaluate claims for disability benefits. Over time, progress in the fields

of medicine and technology has provided a better understanding of how

disease and injury affect the ability to work. Likewise, changes in the labor

market have affected the skills needed to perform work and the settings in

which work occurs. Together, scientific advances and labor market

changes redefine the extent that physical or mental conditions affect the

ability of people with disabilities to work. If federal disability programs do

not update scientific and labor market information used in assessing

program eligibility, they risk overestimating the limiting nature of some

disabilities while underestimating others. Moreover, not keeping abreast

of this information puts federal programs at risk of undermining their

efforts to help some persons with disabilities achieve economic

independence or work to their full potential.

Although the three largest federal disability programs differ in their

underlying purpose, they face a similar underlying challenge. SSA

administers both the Disability Insurance (DI) program and the

Supplemental Security Income (SSI) program. DI provides benefits to

workers with severe long-term disabilities who have enough work history

to be insured for coverage under the program. SSI provides benefits to

disabled, blind, or aged individuals with low income and limited resources,

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-597 Re-Examining Disability Criteria

regardless of their work histories.1 VA, meanwhile, compensates veterans

for their physical or mental conditions that are service connected.2

 Despite

these differences in the populations they serve and basic rules of

eligibility, these programs share the similar task of making complex and

difficult decisions about individuals with impairments and their ability to

work in today’s environment. Beneficiaries served by these programs also

have links to rehabilitation services to help them prepare for, find, and

maintain employment.

In the past, we and others have reported the DI, SSI, and VA programs as

being out-of-step with medical and technological advances and changes in

the workforce and the economy. In this report, we review the extent to

which DI, SSI, and VA’s disability criteria have been updated based on

(1) scientific advances, including medical and technological innovations;

and (2) labor market changes, including the growth in service- and

knowledge-based industries over manufacturing-based industries. We also

discuss implications of incorporating these advances and changes into the

programs. To address these issues and to consider their implications on

the design of these federal disability programs, we reviewed agency

documents, SSA’s advisory board reports, our prior reports, and other

literature. In addition, we interviewed agency officials and several experts

in the field. We conducted our work between June 2001 and July 2002 in

accordance with generally accepted government auditing standards.

The DI, SSI, and VA disability criteria have not been fully updated to

reflect medical and technological advances. About 12 years ago, both SSA

and VA began reviewing relevant medical advances and updating the

criteria they use to evaluate claims. However, both agencies are taking

years to revise the medical criteria and, consequently, the lengthy time

frames could undermine the very purpose of an update. Moreover,

 1

 References to the SSI program throughout this report refer to disabled or blind, not aged,

recipients who are of working age. SSI benefits are also available to children with

disabilities, although SSA uses a different definition of disability for children than for

adults.

2

 In addition, VA provides a disability pension to certain veterans who are permanently and

totally disabled by non-service-connected impairments and served during a wartime period.

Under the Veterans Education and Benefits Expansion Act of 2001, enacted on

December 27, 2001, veterans who are 65 years of age or older do not have to be

permanently and totally disabled to become eligible for pension benefits, as long as they

meet the other requirements for income and military service.

Results in Brief
Page 3 GAO-02-597 Re-Examining Disability Criteria

because of the limited role of treatment in the statutory and regulatory

design of these programs, the updates have not fully captured the benefits

afforded by advances in treatment. That is, agencies generally factor in the

effects of treatment only when an applicant has received or, for SSA, has

also been prescribed treatment. For example, the effects that medication

to control severe mental illness may have on an applicant’s ability to work

are not automatically factored into agencies’ disability decision making. As

a result, people applying for benefits are not necessarily evaluated at their

fullest potential for work in their corrected condition. Likewise, efforts to

update programs’ criteria have not incorporated innovations in assistive

technologies—such as advanced prosthetics and wheelchairs—because of

similar program design issues.

Also, the disability criteria used by DI, SSI, and VA programs to determine

who has a disability have not incorporated labor market changes.

Programs continue to use outdated information about the types and

demands of jobs in the economy in determining the impact that

impairments have on individuals’ earning capacity. SSA uses an outdated

database—last updated in 1991—for information on the types and

demands of occupations in the national economy. The agency is working

on identifying a replacement database but this undertaking could take

years to complete. VA, meanwhile, has not updated its estimates of the

effect that impairments have on earning capacity to reflect today’s labor

market. Its last update was made in 1945. Moreover, without a current

understanding of the impact of physical and mental conditions on earnings

given labor market changes, VA and SSA may be overcompensating some

individuals while denying or undercompensating other individuals because

of outdated information on earning capacity.

In order to incorporate scientific advances and labor market changes into

the DI, SSI, and VA programs, some steps can be taken within the existing

program design and some would require more fundamental change.

Within the context of the programs’ current statutory and regulatory

framework, agencies will need to continue their medical updates and

vigorously expand their efforts to more closely examine labor market

changes. At a more fundamental level, SSA and VA could consider changes

to the disability criteria that would revisit the programs’ basic orientation.

As part of this effort, agencies would consider the implications of

assessing individuals under corrected conditions for maximizing their

employment in a knowledge- and service-based economy. Moreover, under

this scenario, agencies could place a greater emphasis on assisting

individuals find the appropriate employment assistance and obtain

employment. Reorienting programs in this direction would align them with
Page 4 GAO-02-597 Re-Examining Disability Criteria

broader social changes that focus on building and supporting the work

capacities of people with disabilities. To this end, approaches taken from

private disability insurers and other countries offer useful insights. This

shift, however, would raise a number of significant policy issues that have

not yet been fully explored. For example, are there certain circumstances

when programs would require a beneficiary to accept interventions to

enhance work capacities as a precondition for benefits? Likewise, would

the cost of providing treatment and assistive technologies in the disability

programs be higher than cash expenditures paid over the long-term?

In light of the outmoded criteria, this report contains recommendations

that agencies use their annual performance plans to help ensure they place

greater priority on updating their disability criteria within the context of

the programs’ current design. This report also recommends that SSA and

VA study the broader implications of how scientific advances and labor

market changes could affect the programs’ eligibility criteria and benefits

package. Appendix I contains SSA’s comments on the draft of our report

while VA’s comments on the draft are shown in appendix II.

The DI, SSI, and VA programs are three separate federal disability

programs that differ in their underlying intent, populations they serve, and

the specific approach used by SSA and VA to assess disability. Yet, each

program provides financial assistance to individuals with a reduced

capacity to work due to a physical or mental impairment. Program

beneficiaries also have a connection to vocational assistance that can help

program beneficiaries minimize the economic loss resulting from their

disabilities.

Background
Page 5 GAO-02-597 Re-Examining Disability Criteria

All three programs have experienced growth in recent years. The amount

of cash benefits paid to program beneficiaries has increased over the past

10 years (see fig. 1). In 2001, DI provided $54.2 billion in cash benefits to

5.3 million disabled workers, SSI provided $19.0 billion in federal cash

benefits to 3.7 million disabled and blind individuals age 18-64, and VA

provided $16.5 billion in disability compensation benefits to about 2.3

million veterans.3

 Since 1991, the cash benefits for these programs

increased by 69 percent, 55 percent, and 32 percent, respectively (adjusted

for inflation). In addition, since 1991 the number of DI, SSI, and VA

beneficiaries grew by 65 percent, 53 percent, and 6 percent, respectively.

Figure 1: DI, SSI, and VA Cash Payments to Adults with Disabilities, 1991-2001

Source: GAO analysis of SSA and VA data.

 3

 These figures do not include cash benefits awarded to other eligible groups, such as

disabled widow(er)s and disabled adult children of disabled workers (DI) and children

with disabilities (SSI). Included among the 5.3 million DI beneficiaries are about 1.1 million

beneficiaries who were dually eligible for SSI disability benefits because of the low level of

their income and resources. DI and SSI data are based on 2001 calendar year while VA data

are based on 2001 fiscal year.

Programs Have Grown in

Recent Years
Page 6 GAO-02-597 Re-Examining Disability Criteria

The size of the programs could grow in the years ahead. In fact, DI and SSI

are expected to grow significantly over the next decade. By 2010, SSA

expects worker applications for DI to increase by as much as 32 percent

over 2000 levels. In 2000, VA predicted that while the number of veterans

receiving disability benefits will decrease approximately 18 percent over

the next 10 years, the caseload will decline annually by less than 1 percent

during this time period. VA explained that veterans will likely incur more

disabilities than the past because, for example, veterans of the allvolunteer force are older at time of discharge with longer periods of

service, and also because better outreach and access makes veterans more

aware of benefits to which they are entitled. Moreover, VA’s estimate of

the number of veterans assumed the United States would not be engaged

in any major global or regional conflict. The recent war on terrorism,

however, could affect VA’s future projections on the size of the disabled

veterans population.

SSA provides disability benefits to people found to be work disabled under

the DI or SSI program. Established in 1956, DI is an insurance program

that provides benefits to workers who are unable to work because of

severe long-term disability. In 2000, the most common impairments among

DI’s disabled workers were mental disorders and musculoskeletal

conditions (see fig. 2). These two conditions also were the fastest growing

conditions since 1986, increasing by 7 and 5 percentage points,

respectively.

SSA Provides Benefits

to People Found to Be

Work Disabled
Page 7 GAO-02-597 Re-Examining Disability Criteria

Figure 2: Percentage Distribution of DI Disabled Workers by Impairment Categories,

2000

Source: Annual Statistical Supplement to the Social Security Bulletin, 2001.

Workers who have worked long enough and recently enough are insured

for coverage under the DI program. DI beneficiaries receive cash

assistance and, after a 24-month waiting period, Medicare coverage. Once

found eligible for benefits, disabled workers continue to receive benefits

until they die, return to work and earn more than allowed by program

rules, are found to have medically improved to the point of having the

ability to work, or reach full retirement age (when disability benefits

convert to retirement benefits). To help ensure that only eligible

beneficiaries remain on the rolls, SSA is required by law to conduct

continuing disability reviews for all DI beneficiaries to determine whether

they continue to meet the disability requirements of the law.

SSI, created in 1972, is an income assistance program that provides cash

benefits for disabled, blind, or aged individuals who have low income and

limited resources. In 2000, the most common impairments among the

group of SSI blind and disabled adults age 18-64 were mental disorders

and mental retardation (see fig. 3). Mental disorders was the fastest

growing condition among this population since 1986, increasing by

9 percentage points.

27% Mental disorders

5%

Mental retardation

10%

Nervous system and

sense organs 11%

•

Circulatory system

23%

•

Musculoskeletal system

24%

•

Other

•

•

•
Page 8 GAO-02-597 Re-Examining Disability Criteria

Figure 3: Percentage Distribution of SSI Adult Disabled Recipients by Impairment

Categories, 2000

Source: Annual Statistical Supplement to the Social Security Bulletin, 2001.

Unlike the DI program, SSI has no prior work requirement. In most cases,

SSI eligibility makes recipients eligible for Medicaid benefits. SSI benefits

terminate for the same reasons as DI benefits, although SSI benefits also

terminate when a recipient no longer meets SSI income and resource

requirements (SSI benefits do not convert to retirement benefits when the

individual reaches full retirement age). The law requires that continuing

disability reviews be conducted for some SSI recipients for continuing

eligibility.

The Social Security Act’s definition of disability under DI and SSI is the

same: 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

35% Mental disorders

24% • Mental retardation

8%

Nervous system and

sense organs

6%

Circulatory system

10%

Musculoskeletal system

17%

•

Other

• •

•

•
Page 9 GAO-02-597 Re-Examining Disability Criteria

gainful activity (SGA).4 Moreover, the definition specifies that for a person

to be determined to be disabled, the impairment must be of such severity

that the person not only is unable to do his or her previous work but,

considering his or her age, education, and work experience, is unable to

do any other kind of substantial work that exists in the national economy.

(See app. III for a more complete description of SSA’s five-step process to

determine DI and SSI eligibility.)

While not expressly required by law to update the criteria used in the

disability determination process, SSA has stated that it would update them

to reflect current medical criteria and terminology. Over the years, SSA

has periodically ensured that the medical information and the structure of

its Listing of Impairments—which describe impairments that are

presumed by the agency to be severe enough to prevent a person from

doing substantial gainful activity—were both acceptable for program

purposes and consistent with current medical thinking. The last general

update to the Listing of Impairments (also known as the Medical

Listings) occurred in 1985, at which time expiration dates ranging from 3

to 8 years were inserted for individual body systems to ensure the agency

periodically reviews and if necessary, updates the Medical Listings.

The statutes establishing the DI and SSI programs presume that disability,

for program eligibility, is long-term and based on an either-or decision.

That is, a person is either capable or incapable of engaging in substantial

gainful work. However, the Social Security Act allows beneficiaries to use

a “ticket” issued by the Commissioner of SSA to obtain free employment

services, vocational rehabilitation services, or other services to find

employment.5

 Also, Congress has established various work incentives

intended to safeguard cash and health benefits while a beneficiary tries to

 4

 Regulations currently define SGA for both the DI and SSI programs as employment that

produces countable earnings of more than $780 a month for nonblind disabled individuals.

The SGA level is indexed to the annual wage index. The SGA level for DI blind individuals,

set by statute and also indexed to the annual wage index, is currently defined as monthly

countable earnings that average more than $1,300.

5

 The Ticket to Work and Work Incentives Improvement Act of 1999 (Public Law 106-170)

was signed into law in December 1999. In February 2002, SSA began sending tickets to

beneficiaries living in the 13 states chosen for the first round of implementation. SSA

regulations require that to be eligible to receive a ticket, a beneficiary must, among other

factors, have a permanent medical condition or a condition for which medical

improvement is possible but cannot be predicted (a beneficiary whose impairment is

expected to improve is not eligible to receive a ticket unless the individual has undergone

at least one continuing disability review). Participation in the ticket program is voluntary.
Page 10 GAO-02-597 Re-Examining Disability Criteria

return to work.6 Despite these provisions, few DI and SSI beneficiaries

have left the rolls to return to work,7

 although the ticket program may have

an impact on future rates. The either-or process produces a strong

incentive for applicants to establish their inability to work to qualify for

benefits, and work-related supports and services (including health

coverage) are offered only after individuals have completed the eligibility

process. Yet our past work found that DI beneficiaries believe that health

interventions—such as medical procedures, medications, physical therapy,

and psychotherapy—are primary factors in assisting them to work.8

VA’s disability program compensates veterans for the average loss in

earning capacity in civilian occupations that results from injuries or

conditions incurred or aggravated during military service.9

 In 2000, the

most common impairment category among all disabled veterans was

illness and injury to bones and joints (see fig. 4). This impairment

category also experienced the fastest growth among the disabled veteran

population since 1986, increasing by 6 percentage points.

 6

 For example, the DI work incentives provide for a trial work period in which a beneficiary

may earn any amount for 9 months within a 60-month period and still receive full cash

benefits. The SSI work incentives, among other features, allow beneficiaries to earn more

than the SGA level and retain part of a cash benefit.

7

 U.S. General Accounting Office, Social Security: Disability Programs Lag in Promoting

Return to Work, GAO/HEHS-97-46 (Washington, D.C.: Mar. 17, 1997).

8

 U.S. General Accounting Office, Social Security Disability Insurance: Multiple Factors

Affect Beneficiaries’ Ability to Return to Work, GAO/HEHS-98-39 (Washington, D.C.:

Jan. 12, 1998).

9

 Veterans’ Benefits, 38 U.S.C. §§ 1110 and 1155.

VA Provides Benefits to

Veterans Found to Have

Reduced Earning Capacity
Page 11 GAO-02-597 Re-Examining Disability Criteria

Figure 4: Percentage Distribution of Veterans Receiving Disability Compensation by

Impairment Categories, 2000

Note: Percentages do not add to 100 percent due to rounding.

Source: VA’s Compensation and Pension Master File.

VA’s program is similar to the DI and SSI programs in that all three

programs provide cash benefits to persons whose physical or mental

impairments have been deemed to reduce their ability to earn a living.10

However, VA relies upon an average reduction in earning capacity across a

group of individuals with a similar condition rather than the actual

reduction for an individual veteran applying for benefits. As a result, a

veteran with a disability is entitled to disability cash benefits whether or

not employed and regardless of the amount earned. The cash benefit level

 10 We met with several veterans service organizations to discuss the issues in this report.

These organizations stated that they believe disability compensation benefits, in addition to

representing payment for economic loss, also represent compensation for noneconomic

loss due to an injury or illness as well as service to the country.

39% • Bones and joints

21% • Mental health

•

6%

Muscle injuries

•

5%

Digestive system

•

8%

Heart diseases

22%

•

Other
Page 12 GAO-02-597 Re-Examining Disability Criteria

is based on the “percentage evaluation,” commonly called the disability

rating, that represents the average loss in earning capacity associated with

the severity of physical and mental conditions. VA uses its Schedule for

Rating Disabilities to determine which disability rating to assign to a

veteran’s particular condition. Ratings for individual diagnoses in the

schedule range from 011 percent to 100 percent.12 For example, VA

presumes that the loss of a foot as a result of military service results in a

40 percent impairment in earning capacity, on average, among veterans

with this injury. All veterans who lose a foot as a result of military service,

therefore, are entitled to a 40 percent disability rating. Unlike the DI and

SSI programs, the law does not specifically require VA to conduct

continuing disability reviews to determine whether veterans continue to

meet the disability requirements of the law.

The Schedule for Rating Disabilities was first developed in 1919 and had

its last major revision in 1945. Two major studies have been conducted

since the implementation of the 1945 version of the schedule to determine

whether the schedule constitutes an adequate basis for compensating

veterans with service-connected conditions. One was conducted by a

presidential commission in the mid-1950s and a second by VA in the late

1960s. Both concluded, for various reasons, that at least some disability

ratings in the schedule did not accurately reflect the average impairment

in earning capacity among disabled veterans and needed to be adjusted.

The law states that VA shall, from time to time, readjust the schedule

based upon experience. Keeping the schedule current is important

because cash benefits are based on the schedule. We previously reported,

however, that VA’s rating schedule that was being used in the late 1980s

had not been adjusted to incorporate the results of many recent medical

advances, and as a result, some veterans may be undercompensated and

others may be overcompensated for their service-connected disability.13

 11 A veteran can receive a 0 percent noncompensable rating that may be increased to a

compensable rating of 10 percent or more if the veteran’s condition worsens. A 0 percent

rating generally means that VA has determined that a veteran has a condition that can be

classified as service-connected; however, it is not severe enough to qualify for monetary

compensation on the basis of the medical criteria specified in the schedule.

12 Congress sets the specific benefit amount for each of the disability ratings. Congress

typically adjusts the benefit amount each year. In 2002, the basic monthly amount for

veterans without dependents ranged from $103 for conditions assigned a rating of 10

percent to $2,163 for conditions assigned a rating of 100 percent.

13 U.S. General Accounting Office, Need to Update Medical Criteria Used in VA’s

Disability Rating Schedule, GAO/HRD-89-28 (Washington, D.C.: Dec. 29, 1988).
Page 13 GAO-02-597 Re-Examining Disability Criteria

Further, we recommended that VA (1) prepare a plan for a comprehensive

review of the rating schedule and, based on the results, revise medical

criteria accordingly and (2) implement a procedure for systematically

reviewing the rating schedule to keep it updated.

Veterans with a service-connected disability rated at 20 percent or higher

who are found by VA to have an employment handicap can receive

rehabilitation services. Eligible veterans can receive vocational

counseling, training, job search assistance, and supportive rehabilitation

services. In addition, VA offers veterans a medical benefits package that

provides a full range of outpatient and inpatient services, including

primary and specialty care as well as drugs.

Recent scientific advances in medicine and assistive technology and

changes in the nature of work and the types of jobs in our national

economy have generally enhanced the potential for people with disabilities

to perform work-related activities. Advances in medicine have afforded

the scientific community a deeper understanding of and ability to treat

disease and injury. Medical advancements in treatment (such as organ

transplantations), therapy, and rehabilitation have reduced the severity of

some medical conditions and have allowed individuals to live with greater

independence and function in settings such as the workplace. Also,

assistive technologies—such as advanced wheelchair design, a new

generation of prosthetic devices, and voice recognition systems—afford

greater capabilities for some people with disabilities than were available in

the past.

At the same time, the nature of work has changed in recent decades as the

national economy has moved away from manufacturing-based jobs to

service- and knowledge-based employment. In the 1960s, earning capacity

became more related to a worker’s skills and training than to his or her

ability to perform physical labor. Following World War II and the Korean

Conflict, advancements in technology, including computers and automated

equipment, reduced the need for physical labor. The goods-producing

sector’s share of the economy—mining, construction, and

manufacturing—declined from about 44 percent in 1945 to about

18 percent in 2000. The service-producing industry’s share, on the other

hand—such areas as wholesale and retail trade; transportation and public

utilities; federal, state and local government; and finance, insurance, and

real estate—increased from about 57 percent in 1945 to about 72 percent

in 2000.

Advances in Medicine and

Technology, Labor Market

Changes, and Social

Changes Have Affected

Work-Related Capabilities

of People with Disabilities
Page 14 GAO-02-597 Re-Examining Disability Criteria

Although certain jobs in the service economy continue to be physically

demanding—a cashier in a fast food restaurant might be expected to stand

for most of his or her shift—other service- and knowledge-based jobs can

allow greater participation for persons with physical limitations. In

addition, telecommuting and part-time work provide other options for

persons with disabilities. However, some labor market trends—such as an

increasing pace of change in office environments and the need for

adaptability—can pose particular challenges for some persons, such as

those with severe mental illness and learning disabilities. Moreover, other

trends—such as downsizing and the growth in contingent workers—can

limit job security and benefits, like health insurance, that most persons

with disabilities require for participation in the labor force. Whether these

changes make it easier or more difficult for a person with a disability to

work appears to depend very much on the individual’s impairment and

other characteristics, according to experts.

Social change has promoted the goals of greater inclusion of and

participation by people with disabilities in the mainstream of society,

including adults at work. For instance, over the past 2 decades, people

with disabilities have sought to remove environmental barriers that

impede them from fully participating in their communities. Moreover, the

Americans with Disabilities Act supports the full participation of people

with disabilities in society and fosters the expectation that people with

disabilities can work and have the right to work. The Americans with

Disabilities Act prohibits employers from discriminating against qualified

individuals with disabilities and requires employers to make reasonable

workplace accommodations unless it would impose an undue hardship on

the business.

The disability criteria used by the DI, SSI, and VA disability programs to

help determine who is qualified to receive benefits have not been fully

updated to reflect scientific advances. Both SSA and VA are currently in

the midst of a process that began around the early 1990s to update the

medical criteria they use to make eligibility decisions, but the progress is

slow. The updates include dropping or adding conditions that qualify one

for benefits, modifying criteria needed to establish the presence and

severity of certain medical conditions, and wording changes for

clarification and guidance in making decisions. Agencies report that they

made some of these changes due to medical advances in treatment that

have reduced the severity and occurrence of some medical conditions.

Nevertheless, the statutory and regulatory design of these programs limits

the role of treatment in determining who is disabled. Therefore, treatment

advances, by definition, have not been folded into the updates. Moreover,

Disability Criteria Not

Fully Updated to

Reflect Scientific

Advances
Page 15 GAO-02-597 Re-Examining Disability Criteria

because of the statutory design of these programs, the role of assistive

technologies is not recognized in making disability decisions.

Consequently, the updates have not fully incorporated innovations in this

field, such as advanced prosthetics and wheelchair designs.

SSA’s current effort to update the disability criteria began in the early

1990s. To conduct the current update, SSA gathers feedback on relevant

medical issues from state officials who help the agency make disability

decisions. In addition, SSA has in-house expertise to help the agency keep

abreast of the medical field and identify aspects of the medical criteria that

need to be changed. SSA staff develop the proposed changes and forward

them for internal, including legal and financial, review. Next, SSA

publishes the proposed changes in the Federal Register and solicits

comments from the public for 60 days. SSA considers the public

comments, makes necessary adjustments, and publishes the final changes

in the Federal Register.

Between 1991 and 1993, SSA published for public comment the changes it

was proposing to make to 7 of the 14 body systems in its Medical

Listings.

14 By 1994, the proposed changes to 5 of these 7 body systems

were finalized, although SSA told us that changes to 2 systems were

relatively minor. SSA’s efforts to update the Medical Listings were

curtailed in the mid-1990s due to staff shortages, competing priorities, and

lack of adequate research on disability issues. Since the mid-1990s, we,

SSA’s Office of the Inspector General, and the Social Security Advisory

Board have expressed concern that SSA was not updating the Medical

Listings regularly but simply extending the expiration dates that were

originally developed by SSA so as to ensure that it would conduct the

updates. In fact, the Office of the Inspector General15 recommended that

SSA develop a performance measure of its update activities for inclusion

in SSA’s annual performance plan.16 SSA did not agree with the

recommendation, responding that revisions to the Medical Listings are

 14 Our analysis excludes SSA’s changes to the childhood-related Medical Listings.

15 Office of the Inspector General, Social Security Administration, Status of the Social

Security Administration’s Updates to the Medical Listing, A-01-99-21009 (Washington,

D.C., 2000).

16 The Government Performance and Results Act of 1993, Public Law 103-62, requires SSA

to develop performance indicators that assess the relevant service levels and outcomes of

each program activity.

Slow Process to Update

Medical Criteria

Jeopardizes Progress

Already Made
Page 16 GAO-02-597 Re-Examining Disability Criteria

subject to some factors not fully in their control (e.g., progression of

scientific advances, input from experts and the public, and shifting

congressional priorities), which can affect timing and prioritization of

effort. In our view, these uncertainties—in addition to the size and costs

of the programs—in fact elevate the need for establishing a time frame to

ground SSA in its efforts and help keep the agency on track. Moreover,

SSA is allowed to revise performance measures in its annual plans.17

SSA resumed updating the Medical Listings in 1998. Since then, SSA has

taken some positive steps in updating portions of the medical criteria it

uses to make eligibility decisions, although progress is slow. As of early

2002, SSA has published the final updated criteria for 1 of the 9 remaining

body systems not updated in the early 1990s (musculoskeletal) and a

portion of a second body system (mental disorders). SSA also plans to

update again the 5 body systems that were updated in the early 1990s. In

addition, SSA has asked the public to comment on proposed changes for

several other body systems. During the course of our work, SSA initially

indicated to us that the agency planned to publish proposed changes for

all body systems by 2002 and submit changes to the Office of Management

and Budget for final clearance by 2003. Recently, the new administration

at SSA (a new commissioner was confirmed in November 2001) reviewed

the schedule and timing for the revisions. The results of this review

pushed back the completion date for publishing proposed changes for all

remaining body systems to the end of 2003.18 The revised schedule, as of

May 2002, is shown in table 1.

 17 Agencies are permitted to revise the performance targets in their performance plans—

based upon congressional action, the occurrence of unanticipated exigencies,

consideration of actual performance data from the prior year, and other reasons—under

the Government Performance and Results Act of 1993 as implemented by OMB Circular

No. A-11, Part 2: Preparation and Submission of Strategic Plans, Annual Performance

Plans, and Annual Program Performance Reports (Washington, D.C., 2000).

18 Social Security Administration, “Semiannual Unified Regulatory Agenda,” Federal

Register 67, no. 92 (13 May 2002): 34016 – 34038.
Page 17 GAO-02-597 Re-Examining Disability Criteria

Table 1: Progress of SSA’s Current Efforts to Update Medical Listings

Action Body system Date of current update Date of previous update

Updates finalized

Mental disorders (partial system update) 2000 1985

Musculoskeletal 2002 1985

Updates in process Proposed changes published

for comment in the Federal

Register

Hemic and lymphatic Nov. 2001 1985

Malignant neoplastic diseases Nov. 2001 1985

Digestive Nov. 2001 1985

Skin Dec. 2001 1979

Plan to submit proposed

changes to OMB

Multiple body systems Oct. 2002 1993

Genitourinary Nov. 2002 1985

Cardiovascular Dec. 2002 1994

Endocrine Jan. 2003 1993

Respiratory Jan. 2003 1993

Special senses and speech Mar. 2003 1985

Neurological Aug. 2003 1985

Immune Sept. 2003 1993

Mental disorders (remaining portion) Nov. 2003 1985

Source: GAO Analysis of SSA documents.

SSA’s slow progress in completing the updates could undermine the

purpose of incorporating medical advances into its medical criteria. For

example, the criteria for musculoskeletal conditions—a common

impairment among persons entering DI—were updated in 1985. Then, in

1991, SSA began developing new criteria and published its proposed

changes in 1993 but did not finalize the changes until 2002; therefore,

changes made to the musculoskeletal criteria in 2002 were essentially

based on SSA’s review of the field in the early 1990s. SSA officials told us

that in finalizing the criteria, they reviewed the changes identified in the

early 1990s and found that little had taken place since then to warrant

changes to the proposed criteria. However, given the advancements in

medical science since 1991, it may be difficult for SSA to be certain that all

applicable medical advancements are in fact included in the most recent

update. Similarly, we are concerned about the time frames for completing

the full update on the criteria for another major impairment category—

mental disorders. While SSA finalized in 2000 a portion of the changes for

mental disorders first proposed in 1991, the agency deferred action on the
Page 18 GAO-02-597 Re-Examining Disability Criteria

remaining portion pending further review. SSA recently announced plans

to publish these proposed changes by November 2003.

Keeping to a set schedule and making necessary updates could help SSA

minimize the use of outmoded criteria in a large number of disability

decisions. For example, SSA used the criteria for musculoskeletal

conditions that were developed in 1985 until 2001. This means that in the

year prior to the update—2000—SSA allowed 222,750 adults to enter the

DI or SSI program on the basis of medical criteria that were 15 years old.

VA has made more progress than SSA in updating the medical criteria used

to evaluate its disability claims, but overall the process is slow. In 1989, VA

hired a contractor to bring together practicing physicians to review and

develop updated criteria for several of the body systems contained in the

Schedule for Rating Disabilities. The practicing physicians, who were

organized by teams according to specific body systems, were tasked with

proposing changes that were consistent with modern medical practice and

stated in a manner that could be easily interpreted by rating personnel.

The results of the teams’ efforts were reviewed by VA in-house staff. After

making necessary adjustments, the proposed changes were forwarded to

various VA offices for review. Proposed changes were published in the

Federal Register and opened for a 60-day comment period. As of March

2002, VA had finalized the criteria for 11 of 16 body systems. VA is

currently reviewing the remaining body systems.

VA has generally taken more than 5 years to complete the update for each

body system (see fig. 5). VA has not yet completed updating the medical

criteria for several important body systems. For example, criteria used for

evaluating orthopedic impairments were last updated in 1986. Yet the

number of veterans with a disabling orthopedic condition has risen

significantly in the past decade, outpacing the number of veterans

receiving benefits under any other single disability group. Therefore,

veterans with an orthopedic impairment who applied for VA disability

benefits since 1996 were evaluated with medical criteria that were at least

10 years old.
Page 19 GAO-02-597 Re-Examining Disability Criteria

Figure 5: Time Frame of VA’s Efforts to Update the Schedule for Rating Disabilities

a

VA has not published an advance notice or proposed criteria. Further action is pending following the

completion of updates for disc disease.

Source: GAO analysis of VA data.

We found two factors contributing to the amount of time to update VA’s

medical criteria. First, the review given to the proposed changes is lengthy.

VA’s legal counsel as well as other entities within VA, such as the Veterans

Health Administration, Office of Congressional and Legislative Affairs, and

Office of Inspector General, review all proposed changes to the Schedule

Year

16 Body systems Time to update 

Advance notice of proposed rule making published in Federal Register

Proposed criteria published in Federal Register 

Final criteria published in Federal Register

Not finished

In process

 

1

2

3

Genitourinary 

Oral/dental 

Hemic/lymphatic 

Gynecological and breast 

Endocrine 

Systemic 

Respiratory 

Mental disorders 

Cardiovascular 

Ear and other sense organs 

Muscle injuries 

Orthopedics 

 – Disc disease 

 – Digit ankylosis 

 – Spine* 

Eye 

Skin 

Neurologic 

Digestive 

 – Liver disabilites 

4 years, 5 months 

2 years, 1 month 

4 years, 4 months 

4 years, 8 months 

6 years, 3 months 

5 years, 6 months 

5 years, 8 months 

5 years, 4 months 

7 years, 10 months 

8 years

6 years, 7 months 

NF 

NF 

NF 

NF 

NF 

NF 

9 months 

'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 23

1 23

12 3

12 3

12 3

12 3

1 2

1 3 2

1

1 2

2

2

3

12 3

2

2 3

1 23

1 2 3

1

1

1

Legend

NF
Page 20 GAO-02-597 Re-Examining Disability Criteria

for Rating Disabilities. The Office of Management and Budget also

reviews the changes. This entire review process can take up to 3 years.

Second, the number of staff assigned to coordinate the updates at VA also

contributes to the lengthy time to complete the updates. For example, one

staff person is assigned less than half time to coordinate the update

efforts.

VA does not have a well-defined plan to conduct the next round of medical

updates. Although VA provided us with a statement acknowledging the

need to re-review the medical criteria in the future, it had neither a

strategy nor time frame for completing the task.

SSA has made various types of changes to the Medical Listings thus far.

As shown in table 2, these changes, including the proposed changes

released to the public for comment, add or delete qualifying conditions;

modify the criteria for certain physical or mental conditions; and clarify

and provide additional guidance in making disability decisions. In addition,

SSA has made a number of editorial changes.

Table 2: Types of Changes Made (or Proposed) to SSA’s Medical Listings during Current Update

Type of change Examples Rationales

Revise qualifying

conditions

Remove peptic ulcer.a

Add inflammatory bowel disease by combining two

existing conditions already listed: chronic

ulcerative and regional enteritis.

Advances in medical and surgical management have

reduced severity.

Reflect advances in medical terminology.

Revise evaluation and

diagnostic criteria

Expand the types of allowable imaging

techniques.

Reduce from three to two in the number of

difficulties that must be demonstrated to meet the

listings for a personality disorder.b

The Medical Listings previously referred to x-ray

evidence. With advancements in imaging techniques,

SSA will also accept evidence from, for example,

computerized axial tomography (CAT) scan and

magnetic resonance imaging (MRI) techniques.

Specific rationale not mentioned.

Clarify and provide

additional guidance

Remove discussion on distinction between

primary and secondary digestive disorders

resulting in weight loss and malnutrition.

Expand guidance about musculoskeletal

“deformity.”

Distinction not necessary to adjudicate disability claim.

Clarify that the term refers to joint deformity due to any

cause.

Agencies Have Changed

Several Aspects of

Disability Criteria
Page 21 GAO-02-597 Re-Examining Disability Criteria

a

A condition removed from the Medical Listings means that SSA no longer presumes the condition to

be severe enough to ordinarily prevent an individual from engaging in substantial gainful activities.

However, an individual with a condition removed from the Medical Listing could still be found eligible

under other considerations in the evaluation process as described in appendix III.

b

The criteria for a personality disorder are met when (a) the individual has certain behaviors defined in

the Medical Listings and (b) those behaviors result in at least two of the following: (1) marked

restriction of activities in daily living; (2) marked difficulties in maintaining social functioning;

(3) marked difficulties in maintaining concentration, persistence, or pace; or (4) repeated episodes of

decompensation (as specified in the Medical Listings).

Source: GAO analysis of SSA publications appearing in Federal Register.

In recognition of medical advances, VA has also made several types of

changes to its Schedule for Rating Disabilities during the current update.

As shown in table 3, the types of changes have been quite similar to

changes made by SSA. Revisions generally consist of (1) adding, deleting,

and reorganizing medical conditions in the Schedule for Rating

Disabilities; (2) revising the criteria for certain qualifying conditions; and

(3) wording changes for clarification or reflection of current medical

terminology. VA also has made a number of editorial changes.

Table 3: Types of Changes Made (or Proposed) to VA’s Schedule for Rating Disabilities during Current Update

Type of change Examples Rationales

Revise schedule Add pneumoconiosis as a qualifying disease

under interstitial lung diseases.

Create new category for “schizophrenia and

other psychotic disorders.”

Allows for a more complete representation of this

disease category.

New category is in accordance with terminology

used in the standard medical texts.

Revise criteria Evaluation of anemia should include clinical

findings and not be based solely on

hemoglobin levels.

Under certain conditions, varicose veins

developed after leaving the service can be

considered as service-connected.

Provides a more accurate measure.

Specific rationale not mentioned.

Wording change for clarification

or reflection of current medical

terminology

Replace “frequent” with “twice per year” when

assessing frequency of surgical therapies for

recurring stone formation in the ureter.

Change “new growth” to “neoplasm.”

Standardizes the term for more precise

evaluations.

Improve technical accuracy.

Source: GAO analysis of VA publications appearing in the Federal Register.
Page 22 GAO-02-597 Re-Examining Disability Criteria

Program design issues have limited the extent that advances in medicine

and technology have been incorporated into the DI, SSI, and VA’s disability

decision making. SSA has indicated that the updates are being made in

recognition of medical advances in treatment and technology, and we

found examples in SSA’s publications in the Federal Register of this

occurring. Our methodology for this study, however, does not allow us to

determine the extent of SSA’s efforts to incorporate medical advances into

the Medical Listings. Nevertheless, the design of these programs limits

the role of treatment in deciding who is disabled. SSA’s regulations require

that in order to receive benefits, claimants must follow treatment

prescribed by the individual’s physician if the treatment can restore his or

her ability to work.19 The implication of this regulation is that if an

individual is not prescribed treatment, SSA does not consider the possible

effects of treatment in the disability decision, even if the treatment could

make the difference between being able and not being able to work.

Moreover, the programs do not require individuals to receive

nonprescribed treatment before or during the time they are assessed for

eligibility. Thus, treatments that can help restore functioning to persons

with certain impairments may not be factored into the disability decision

for some applicants. This limited role of treatment means, by definition,

the updates have not fully captured the benefits that treatments can

provide to persons with certain impairments. For example, medications to

control severe mental illness, arthritis treatments to slow or stop joint

damage, total hip replacements for severely injured hips, and drugs and

physical therapies to possibly improve the symptoms associated with

multiple sclerosis are not automatically factored into SSA’s decision

making for determining the extent that impairments affect people’s ability

to work. Additionally, this limited approach to treatment raises an equity

issue: Applicants whose treatment allows them to work could be denied

benefits while applicants with the same condition who have not been

prescribed treatment could be allowed benefits.

While some of VA’s changes to the Schedule for Rating Disabilities reflect

advances in medicine, the changes have generally not incorporated the

potential benefits of treatment. While treatment can improve an

individual’s ability to function in the workplace, the program is not

designed to factor in the potential benefits of treatment when evaluating a

 19 SSA does not consider the effects of treatment that has been prescribed but not received

under certain circumstances, such as when the treatment is contrary to the established

teaching and tenets of the individual’s religion.

Design Issues Have

Limited the Incorporation

of Treatment, Corrective

Medical Devices, and

Assistive Technologies

into Criteria
Page 23 GAO-02-597 Re-Examining Disability Criteria

veteran’s service-connected disability. That is, veterans applying for

disability benefits—much like, for example, workers applying for DI

benefits—are not required to undergo treatment before or after they are

given a disability rating. Moreover, the VA program does not, unlike DI and

SSI, factor in the potential effect of prescribed treatment on an applicants’

abilities.

As with treatment, the benefits of innovations in assistive technologies—

such as advanced prosthetics and wheelchair designs—have not been fully

incorporated into DI, SSI, and VA disability criteria because the statutory

design of these programs does not recognize these advances in disability

decision making. That is, programs are not designed to assess an

applicant’s ability to work under corrected conditions. Conceivably, using

innovations such as a prosthetic device could reduce the limiting nature of

an applicant’s impairment and could also reduce, if programs were

designed differently, eligibility for or the amount of cash benefits. And

some technologies may not involve sophisticated electronics. For

example, a factory worker with a back impairment who works on an

assembly line could benefit from an ergonomic stool or chair and matting

that would cushion the floor and reduce fatigue. According to VA,

technological advances, such as voice recognition devices—which can

help people who do not have the use of their hands to interact with a

computer—are not considered during the rating process to determine the

extent to which technology could improve a veteran’s earning capacity.

The disability criteria used by DI, SSI, and VA programs for determining

who is disabled have not incorporated labor market changes. In

determining the effect that impairments have on individuals’ earning

capacity, programs continue to use outdated information about the types

and demands of jobs in the economy. Given the nature of today’s

economy, which offers varied opportunities for work, agencies’ use of

outdated information raises questions about the validity of disability

decisions.

Disability Criteria Not

Updated to Reflect

Labor Market

Changes
Page 24 GAO-02-597 Re-Examining Disability Criteria

For an applicant who does not have an impairment that SSA presumes is

severe enough ordinarily to prevent an individual from engaging in

substantial gainful activity, SSA evaluates whether the individual is able to

work despite his or her limitations.20 Individuals who are unable to

perform their previous work and other work in the national economy are

awarded benefits. SSA relies upon the Department of Labor’s Dictionary of

Occupational Titles (DOT) as its primary database to make this

determination; however, Labor has not updated DOT since 1991 and does

not plan to do so. Since 1993, Labor has been working on a replacement

for the DOT called the Occupational Information Network (O*NET). It

contains information on about 970 occupational categories, while DOT

had 13,000 occupational titles.

Labor and SSA officials recognize that O*NET cannot be used in its

current form in the DI and SSI disability determination process. The

O*NET, for example, does not contain SSA-needed information on the

amount of lifting or mental demands associated with particular jobs. The

agencies have discussed ways that O*NET might be modified or

supplemental information collected to meet SSA’s needs, but no definitive

solution has been identified. SSA officials have indicated that an entirely

new occupational database could be needed to meet SSA’s needs, but such

an effort could take many years to develop, validate, and implement.

Meanwhile, as new jobs and job requirements evolve in the national

economy, SSA’s reliance upon an outdated database further distances the

agency from the current market place.

The percentage ratings used in VA’s Schedule for Rating Disabilities are

still primarily based on physicians’ and lawyers’ estimates made in 1945

about the effects that service-connected impairments have on the average

individual’s ability to perform jobs requiring manual or physical labor.

Although VA is revising the Schedule for Rating Disabilities’ medical

criteria, the estimates of how impairments affect veterans’ earnings have

generally not been reexamined. As a result, changes in the nature of work

that have occurred in the past 57 years—which potentially affect the

extent to which disabilities limit one’s earning capacity—are overlooked

 20 SSA refers to this level of ability to work despite physical and mental limitations as a

residual functional capacity. Specifically, SSA evaluates whether the applicant has an

impairment that prevents him or her from performing previous work or considering his or

her age, education, and work experience, performing any other kind of substantial work

that exists in the national economy.

SSA Relies upon Outdated

Labor Market Information

to Assess Impact of

Impairments on Capacity

to Perform Work

VA Relies upon Outdated

Information in Estimating

Economic Loss Resulting

from Physical and Mental

Impairments
Page 25 GAO-02-597 Re-Examining Disability Criteria

by the program’s criteria. For example, in an increasingly knowledgebased economy, one could consider whether earning capacity is still

reduced, on average, by 40 percent for loss of a foot.

VA recognizes that there have been significant changes in the nature of

work, but does not believe that these changes need to be reflected in the

disability ratings. One official noted that a disability rating is essentially an

indication of medical severity: the more severe the medical condition, then

the higher the rating. Moreover, it was stated, changes in the nature of

work are captured in the types of vocational rehabilitation services offered

to veterans (e.g., veterans could receive computer skills training). Finally,

the official noted that disability compensation should not be adjusted if an

individual veteran is able to work despite a disabling condition.

In the past, we suggested to Congress that it may wish to consider

directing VA to determine whether VA ratings correspond to veterans’

average loss in earning capacity and adjust disability ratings accordingly.21

VA responded to us that the schedule, as constructed, represents a

consensus among Congress, VA, and the veteran community, and that the

ratings generally represent an equitable method to determine disability

compensation. In conducting the work for our present assignment, VA told

us that they believe the consensus remains and the ratings continue to

generally represent an equitable approach. We continue to believe,

however, that changes in the nature of work afford some veterans with a

disability the opportunity to become more fully employed and that the

current estimates of the average reduction in earning capacity should be

reviewed. Further, we believe that updating disability criteria is consistent

with the law.

 21 U.S. General Accounting Office, VA Disability Compensation: Disability Ratings May

Not Reflect Veterans’ Economic Losses, GAO/HEHS-97-9 (Washington, D.C.: Jan. 7, 1997).
Page 26 GAO-02-597 Re-Examining Disability Criteria

Incorporating scientific advances and labor market changes into DI, SSI,

and VA programs can occur within the existing program design and at a

more fundamental level. Within the context of the programs’ existing

statutory and regulatory design, agencies will need to continue updating

the criteria they use to determine which applicants have physical and

mental conditions that limit their ability to work. As we noted above,

agencies began this type of update in the early 1990s, although their efforts

have focused much more on the medical portion than labor market issues.

In addition to continuing their medical updates, SSA and VA need to

vigorously expand their efforts to more closely examine labor market

changes. SSA’s results could yield updated information they use to make

decisions about whether or not applicants have the ability to perform their

past work or any work that exists in the national economy. VA’s results

could yield updates to the average loss in earning capacity resulting from

service-connected injuries and conditions.

More fundamentally, SSA and VA could consider the impact that scientific

advances and labor market changes have on the programs’ basic

orientation. Whereas programs currently are grounded in assessing and

providing benefits based on incapacities, fully incorporating the scientific

and labor market issues we highlight in this report implies that agencies

would assess individuals with physical and mental conditions under

corrected conditions for employment in an economy increasingly different

from that which existed when these programs were first designed.

Factoring medical and technological advances more fully into the DI, SSI,

and VA programs implies that some if not many applicants would receive

up-front assistance—including help in finding and maintaining

employment—to help agencies evaluate individuals under their fullest

potential to work. In fact, the types of beneficiaries who currently might

have benefited from such assistance but have not received either timely

medical or vocational assistance (for example, DI beneficiaries during the

24-month wait period for Medicare benefits) could get a package of upfront service under a new approach. Moreover, reorienting programs in

this direction is consistent with increased expectations of people with

disabilities and the integration of people with disabilities into the

workplace, as reflected in the Americans with Disabilities Act. However,

for people with disabilities who do not have a realistic or practical work

option, long-term cash support is likely the best option.

In reexamining the fundamental concepts underlying the design of the DI,

SSI, and VA programs, approaches used by other disability programs may

offer some valuable insights. For example, our prior review of three

private disability insurers shows that they have fundamentally reoriented

Incorporating

Scientific Advances

and Labor Market

Changes into

Disability Criteria Has

Several Implications
Page 27 GAO-02-597 Re-Examining Disability Criteria

their disability systems toward building the productive capacities of

people with disabilities, while not jeopardizing the availability of cash

benefits for people who are not able to return to the labor force. 22 These

systems have accomplished this reorientation while using a definition of

disability that is similar to that used by SSA’s disability programs.23

However, it is too early to fully measure the effect of these changes. In

these private disability systems, the disability eligibility assessment

process evaluates a person’s potential to work and assists those with work

potential to return to the labor force. This process of identifying and

providing services intended to enhance a person’s productive capacity

occurs early after disability onset and continues periodically throughout

the duration of the claim. In contrast, SSA’s eligibility assessment process

encourages applicants to concentrate on their incapacities, and return-towork assistance occurs, if at all, only after an often lengthy process of

determining eligibility for benefits. SSA’s process focuses on deciding who

is impaired sufficiently to be eligible for cash payments, rather than on

identifying and providing the services and supports necessary for making a

transition to work for those who can. While cash payments are important

to individuals, the advances and changes discussed in this report suggest

the option to shift the disability programs’ priorities to focus more on

work.

We recognize that re-examining the programs at the broader level raises a

number of significant policy issues, including the following:

• Program design and benefits offered. Agencies would need to

consider the impact on program design, including fundamental issues

of basic eligibility structure and benefits and services provided. Would

the definition of disability change? To what extent would programs

 22 U.S. General Accounting Office, SSA Disability: Other Programs May Provide Lessons

for Improving Return-to-Work Efforts, GAO-01-153 (Washington, D.C.: Jan. 12, 2001). This

report also addresses the reorientation of the social insurance systems of Sweden and The

Netherlands toward a return-to-work focus. In addition, this report addresses the German

social insurance system, which has had a long-standing focus on the goal of rehabilitation

before pension.

23 In general, for the three private insurers that we studied, claimants are initially

considered eligible for disability benefits when, because of injury or sickness, they are

limited in performing the essential duties of their own occupation and they earn less than

60 to 80 percent of their predisability earnings, depending upon the particular insurer. After

2 years, this definition generally shifts from an inability to perform one’s own occupation to

an inability to perform any occupation for which the claimant is qualified by education,

training, or experience. It is this latter definition that is most comparable to the definition

used by SSA.
Page 28 GAO-02-597 Re-Examining Disability Criteria

require some beneficiaries to accept assistance to enhance work

capacities as a precondition for benefits versus relying upon work

incentives, time-limited benefits, or other means to encourage

individuals to maximize their capacity to work? Would persons whose

work potential is significantly increased due to medical and

technological assistance receive the same cash benefits that are

currently provided? Would criteria need to be established to identify

persons whose severity presumes a basis for permanent cash benefits?

Would program recipients with earned income above a certain level

still be eligible for no-cost assistance or do they begin to help pay for

the support? To change program design, what can be done through the

regulatory process and what requires legislative action?

• Accessibility. Agencies would need to address the accessibility of

medical and technological advances for program beneficiaries. Are new

mechanisms needed to provide sufficient access to needed services? In

the case of DI and SSI, what is the impact on the ties with the Medicare

and Medicaid programs? For VA, accessibility issues may not be as

critical because of existing links to health and vocational rehabilitation

benefits provided by VA.

• Cost. Agencies would need to address cost implications, including the

issue of who will pay for the medical and assistive technologies (will

beneficiaries be required to defray costs?). For example, would the

cost of providing treatment and assistive technologies in the disability

programs be higher than cash expenditures paid over the long-term?

The cost to provide medical and technological treatment could be quite

high for some program recipients, although much less for others.

Moreover, net costs would need to be considered, as some

expenditures could be offset with cost savings by paying reduced

benefits.

• Integration with other program components. Agencies would need

to address how to integrate a new emphasis on medical and

technological assistance when making disability determinations with

the health care and vocational assistance already currently available to

program beneficiaries. Notably, VA’s program components of cash

assistance, vocational rehabilitation, and medical care may uniquely

position the agency to develop an integrated model and evaluate the

results. During our work, VA officials pointed out that vocational

rehabilitation services are already available to veterans to help them

return to work and that such services include incorporating the

advances and changes addressed in this report. Yet, the restorative

benefits of medical, technological, or vocational interventions are not
Page 29 GAO-02-597 Re-Examining Disability Criteria

considered when VA makes an initial assessment of the economic

losses that result from a condition or injury. With a limited amount of

program funding, integrating these program components may help VA

to equitably distribute program funds among veterans with disabilities.

Agencies’ research efforts could help address these broader policy issues.

In fact, SSA is beginning to conduct a number of studies that recognize

that medical advances and social changes require the disability programs

to evolve. SSA’s 2002 annual performance plan contains a strategic

objective to promote policy change based on research, evaluation, and

analysis. SSA has funded a project to design a study that would assess the

extent to which the Medical Listings are a valid measure of disability, and

began work to design a study for SSA to identify the most salient job

demands in comparison to applicants’ residual functional capacity.

Additionally, SSA is sponsoring the National Study of Health and Activity,

a project intended to enable SSA to estimate how many adults live in the

United States who meet the definition of disability used by SSA and to

better understand the relationship between disability, work, health care,

and community. Also, SSA has funded a study to examine the impact and

cost of assistive technology on employment of persons with spinal cord

injuries and the associated costs. Finally, SSA had planned to conduct a

demonstration project to determine the impact of medicine and therapy on

beneficiaries with mood disorders such as major depressive disorder and

bipolar disorder in returning them to work. The project was partly in

response to evidence found by SSA that some beneficiaries with mood

disorders had not received promising treatment. SSA has placed the

project on hold while it reconsiders the purpose of the project.

Such research projects could provide important insight into ways that

medical and technological advances can help persons with disabilities

work and live independently. The research could also begin to provide

important information about the cost and outcomes of program changes

that bring up-front help to individuals receiving or applying for disability

benefits. Nevertheless, individually, these studies do not directly or

systematically address many of the implications of factoring in medical

advances and assistive technologies more fully into the DI and SSI

programs.

Given the large size of the DI, SSI, and VA programs, it is incumbent that

they remain current with medical advances and the changes in the

demands and opportunities in the world of work. Updating disability

criteria within existing program structures is prudent, not only as a means

Conclusions
Page 30 GAO-02-597 Re-Examining Disability Criteria

to best ensure program integrity, but also for agencies to meet their

fiduciary responsibilities for public funds. We recognize the challenge to

updating disability criteria. Yet we have concerns that while agencies are

making some progress, their commitment to this effort appears to be

inconsistent with the stakes involved: medical updates have been slow and

there are few written strategies for performing timely updates in the years

ahead. Moreover, these agencies have done little to better take into

consideration the implications of labor force changes on the ability of

persons with disabilities to earn a living. To the extent that SSA and VA do

not update criteria used to reach disability decisions, they cannot ensure

their disability decisions are valid.

Updating the disability criteria within the context of current program

design will not fully capture the work-enhancing opportunities afforded by

recent scientific advances and labor market changes. That is, current

program design does not assess individuals under corrected conditions. To

fully capture these advances and changes, policymakers would need to

comprehensively re-examine some fundamental aspects of the DI, SSI, and

VA programs, including the type, timing, and conditions of providing

assistance to persons with physical and mental conditions. Such an

examination is a complex but increasingly important undertaking. Indeed,

Congress’ approach to these issues could be quite different given the

unique characteristics of each program. But nevertheless, without a

comprehensive analysis about alternatives and their impacts, it is likely

that little progress will be made.

To further advance the discussion of issues raised in this report, we

recommend that the Commissioner of Social Security take the following

actions:

• Use SSA’s annual performance plan to delineate strategies for and

progress in periodically updating the Medical Listings and labor

market data used in its disability determination process.

• Study and report to Congress the effect that a comprehensive

consideration of medical treatment and assistive technologies would

have on the DI and SSI programs’ eligibility criteria and benefit

package. The analysis should estimate the effects on the size, cost, and

management of these and other relevant programs and identify the

legislative action, if any, necessary to initiate and fund such change.

Recommendations for

Executive Action
Page 31 GAO-02-597 Re-Examining Disability Criteria

To further advance the discussion of issues raised in this report, we

recommend that the Secretary of Veterans Affairs take the following

actions:

• Use VA’s annual performance plan to delineate strategies for and

progress in periodically updating the Schedule for Rating Disabilities

and labor market data used in its disability determination process.

• Study and report to Congress the effect that a comprehensive

consideration of medical treatment and assistive technologies would

have on the VA disability programs’ eligibility criteria and benefit

package. The analysis should estimate the effects on the size, cost, and

management of the program and other relevant VA programs and

identify the legislative action, if any, necessary to initiate and fund such

change.

We sent a draft of this report to SSA, VA, and the Department of Labor for

comments. SSA and VA submitted comments to us, which are reproduced,

respectively, in appendixes I and II. Our responses to their comments

appear below. In addition, technical comments and clarifications from

these two agencies were incorporated as appropriate.

SSA concurred with our recommendation to use its annual performance

plan to delineate strategies for, and progress in, periodically updating the

Medical Listings and labor market data used in its disability

determination process, and it cited the strategic objective in its 2003

performance plan to promote policy changes that take account of

changing needs based on medical, technological, demographic, job

market, and societal trends. However, the performance goals associated

with this objective do not refer specifically to updating either the Listings

or labor market data. We believe such specific measurable goals are

needed in light of the many years that have passed since DI and SSI

disability criteria have been fully updated.

In addition, SSA provided several other comments on our findings

concerning the agency’s efforts to update the disability criteria. First, SSA

mentioned it is unable to determine why our report concludes that the DI

and SSI updates do not reflect medical advances, citing their published

commitment to do so and our recognition in the report of the agency’s

efforts to incorporate some medical updates into the Listings. We do not

dispute SSA’s contention, which is similar to a point also made by VA, that

the agency considers the effects of treatment, medication, and assistive

technologies in some if not many updates to the Listings. However, the

issues we raise are at a more fundamental level. Our report specifically

Agency Comments

and Our Response

SSA’s Comments and Our

Response
Page 32 GAO-02-597 Re-Examining Disability Criteria

states that, under the statutory and regulatory design of these programs,

SSA does not automatically evaluate individuals applying for benefits

under corrected conditions. Thus, it is our 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. Second, SSA commented that the DOT, even though it has not

been revised since 1991, remains the most complete and up-to-date source

of comprehensive occupational information. While characterizing the

database in this manner may be technically accurate, the database was

generally recognized as outdated by SSA and Labor officials we

interviewed, and we note that Labor does not plan to update the database.

Similarly, SSA commented that creating a new database on jobs in today’s

economy for DI and SSI decision making is only one alternative (and, as

SSA notes, an unlikely and undesirable one). In our view, absent a

significant change in the decision-making process, SSA has only a few

options: it will need to either modify the database that Labor developed to

replace the DOT, modify the DOT, or develop a new database. Each

option could require substantial effort, and regardless of which approach

the agency selects, it will need to update the job-related information it

uses.

Regarding our recommendation that SSA study and report to Congress the

effect that a comprehensive consideration of medical treatment and

assistive technologies would have on DI and SSI’s eligibility criteria and

benefit package, SSA again states that it already considers in its Listings

the effect that new medical treatment and assistive technologies would

have on these two disability programs. Moreover, it states, the agency is

not reluctant to promulgate regulatory changes or to suggest any

legislative changes it considers appropriate as the need for change arises.

We do not agree that SSA currently meets our recommendation. Our

recommendation underscores the need to move beyond updating the

disability decision-making process within the existing program design.

Instead, SSA needs to make a more systematic study of options that would

maximize an individual’s work potential by focusing on early and

appropriate supports and interventions that take advantage of the

advances and changes we identify in this report. As we note in the report,

SSA has several research studies that could provide useful information in

consideration of the larger design issues. Yet these studies do not directly

or systematically address many of the implications of factoring in medical

advances and assistive technologies more fully into the DI and SSI

programs. The agency needs to lay out a master plan to systematically

explore these larger policy and design issues.
Page 33 GAO-02-597 Re-Examining Disability Criteria

VA did not concur with our recommendation to use its annual

performance plan to delineate strategies for and progress of periodically

updating the Schedule for Rating Disabilities and labor market data used

in its disability determination process. VA stated that developing

timetables for future updates to the Schedule for Rating Disabilities is

inappropriate while its initial review is ongoing. We continue to believe

that VA needs to include measurable goals about how and when it will

complete the current round of medically-focused updates as well as future

updates. VA should incorporate this information into its plan because

portions of the Schedule for Rating Disabilities still remain to be updated

and the agency has taken years to update individual body systems. In

addition, VA should now begin to develop strategies for the next round of

updates because portions of the Schedule for Rating Disabilities updated

during the current round were completed about 8 years ago and were

based on expert input collected about 12 years ago. As such, it is

important to begin planning for the next cycle of review. VA’s annual

performance plan can help the agency hold itself accountable for ensuring

that disability ratings are based on current information.

VA also did not concur with our recommendation to use its annual

performance plan to discuss strategies and progress on updating the

Schedule for Rating Disabilities because the agency does not plan to

initiate an economic validation study or a revision of the Schedule for

Rating Disabilities based on economic factors. The agency stated that

prior attempts to change the Schedule for Rating Disabilities by

conducting an economic validation were met with dissatisfaction among

Congress, the veteran community, and VA. Moreover, VA noted that it

believes the Schedule for Rating Disabilities is medically based;

represents a consensus among Congress, VA and the veteran community;

and has been a valid basis for equitably compensating America’s veterans

for many years. We do not disagree that validating the Schedule for

Rating Disabilities could lead to significant if not controversial changes,

and the Schedule for Rating Disabilities does have a medical component

and has been used as a basis for disability compensation for years.

However, our analysis of the extent to which the VA—as well as DI and

SSI—disability criteria were updated was grounded in the current law that

authorizes this program. The law states that veterans are entitled to

compensation for the average reduction in earning capacity for injuries

incurred or aggravated while in service. Because earning capacity is

clearly linked to the types and demands of jobs in the economy, and given

that the economy has changed over time, updating the Schedule for Rating

Disabilities based on labor market changes is sound administrative policy.

Moreover, the concept of disability has changed significantly since the

economic data assumptions in the Schedule for Rating Disabilities were

VA’s Comments and Our

Response
Page 34 GAO-02-597 Re-Examining Disability Criteria

last updated in 1945, further supporting the need to keep current with

workforce requirements and opportunities.

In addition, VA did not agree with our finding that VA disability criteria

have not been fully updated based on medical advances, noting that

disabilities are commonly evaluated based on disabling effects while on

treatment. We do not dispute VA’s contention that it recognizes the effects

of treatment, medication, and assistive technologies that have been

received by veterans in some, if not many, of its disability ratings. Much

like our response to a similar comment made by SSA, our conclusion is

based on the overall design of the program rather than on whether specific

ratings have been updated to reflect treatment options. VA does not

automatically evaluate a veteran’s average reduction in earning capacity

under corrected conditions when making a decision about benefit

eligibility and as such, a veteran not receiving a medical intervention or

assistive technology that could increase work capacity is not evaluated

according to his or her potential or actual capacity to work. Again,

although VA’s current approach is consistent with program design, it also

downplays the role that medical and technological advances can play in

helping enhance work capacity. Consequently, we conclude that the

program is not fully aligned with medical and technological advances.

Finally, VA did not concur with our recommendation that it study and

report to Congress the effect that such a comprehensive consideration of

medical treatment and assistive technologies would have on the program.

VA believes moving in this direction would present a radical change from

the current program, and the agency raised questions about whether

Congress and the veteran community would support the idea. We believe

that our society is very different from the times when VA and SSA

disability programs were first designed. In addition to scientific advances

and economic changes, expectations for people with disabilities are

different. We believe more information is needed about the effects of a

fuller consideration of these advances and changes on the program. VA

should systematically study the implications of such changes and provide

the results to Congress to facilitate future decision making.

Copies of this report are being sent to appropriate congressional

committees and other interested parties. The report is also available at no

charge on the GAO Web site at http://www.gao.gov. If you have any
Page 35 GAO-02-597 Re-Examining Disability Criteria

questions about this report, please contact me at (202) 512-9889. Other

contacts and staff acknowledgments are listed in appendix IV.

Robert E. Robertson, Director

Education, Workforce, and

 Income Security Issues
Appendix I: Comments from the Social

Security Administration

Page 36 GAO-02-597 Re-Examining Disability Criteria

Appendix I: Comments from the Social

Security Administration

Note: GAO incorporated

technical comments, as

appropriate.
Appendix I: Comments from the Social

Security Administration

Page 37 GAO-02-597 Re-Examining Disability Criteria

Now on pp. 14 and 15.
Appendix I: Comments from the Social

Security Administration

Page 38 GAO-02-597 Re-Examining Disability Criteria

Now on p. 26.

Now on p. 22.
Appendix I: Comments from the Social

Security Administration

Page 39 GAO-02-597 Re-Examining Disability Criteria

Now on p. 24.

Now on p. 24.

Now on p. 8.
Appendix II: Comments from the Department

of Veterans Affairs

Page 40 GAO-02-597 Re-Examining Disability Criteria

Appendix II: Comments from the Department

of Veterans Affairs

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.
Appendix II: Comments from the Department

of Veterans Affairs

Page 41 GAO-02-597 Re-Examining Disability Criteria

See comment 1.
Appendix II: Comments from the Department

of Veterans Affairs

Page 42 GAO-02-597 Re-Examining Disability Criteria

See comment 2.
Appendix II: Comments from the Department

of Veterans Affairs

Page 43 GAO-02-597 Re-Examining Disability Criteria

Now on p. 25.

See comment 4.

See comment 3.
Appendix II: Comments from the Department

of Veterans Affairs

Page 44 GAO-02-597 Re-Examining Disability Criteria

See comment 6.

See comment 5.
Appendix II: Comments from the Department

of Veterans Affairs

Page 45 GAO-02-597 Re-Examining Disability Criteria

See comment 2.
Appendix II: Comments from the Department

of Veterans Affairs

Page 46 GAO-02-597 Re-Examining Disability Criteria

1. VA cites the 1955 President’s Commission on Veterans’ Pensions

(commonly called the Bradley Commission) as support that VA’s

disability ratings represent noneconomic factors, such as pain and

suffering, in addition to average loss of earnings. However, as we

reported in 1997,1 “the Commission’s overall recommendation with

regard to the Schedule was that it should be revised thoroughly on the

basis of factual data to ensure that it reflects veterans’ average

reduction in earning capacity, as required by law. The Commission

stated that the basic purpose of the program is economic maintenance

and, therefore, it is appropriate to compare periodically the average

earnings of the working population and the earnings of disabled

veterans...” Even if the ratings are intended to reflect noneconomic

factors, this does not negate the need for updating the schedule due to

changes in the labor market. The extent to which, if at all, disability

compensation reflects noneconomic factors is a policy issue which lies

beyond the scope of this report.

2. We recognize that veterans who are paid disability benefits can also be

receiving various types of treatment and assistance. Our

recommendation reflects the need for more information on the

implications of integrating the effects of treatment and assistance into

the disability determination process, including the process to

determine (1) the impact of physical and mental conditions on

earnings and (2) the appropriate type and timing of benefits—such as

cash, medical, and vocational assistance—to minimize the reduction of

earnings associated with the disabilities.

3. We recognize that the link between medical impairments and the

ability to work is complex and difficult to measure and can be affected

by other factors like social support and individual motivation. Yet the

VA program, by legislative design, compensates for loss in earning

capacity that results from injuries or medical conditions. Thus, we

believe, it is important to maintain good data on the skills and

demands in the labor market to provide the best estimate of loss in

earning capacity that is reasonably associated with particular injuries

and conditions. In our 1997 report, we lay out options for the design

and methodology for estimating loss in earnings among veterans with

disabilities.2

 But VA’s comment underscores the larger point we are

making: Past assumptions that underlie these programs are

 1

 See GAO/HEHS-97-9, p.15.

2

 See GAO/HEHS-97-9.

GAO Comments
Appendix II: Comments from the Department

of Veterans Affairs

Page 47 GAO-02-597 Re-Examining Disability Criteria

increasingly outmoded as the confluence of scientific, economic, and

social forces are redefining the relationship between impairments and

abilities. Additional information on how programs can take advantage

of this change will help Congress make better-informed decisions on

disability policy.

4. We recognize that veterans can work and still receive disability

compensation benefits. In fact, at the beginning of fiscal year 2002,

two-thirds of veterans had a rating at 30 percent or less, implying that

many veterans receiving disability compensation are working.

Moreover, we recognize that VA’s use of an “average” reduction in

earnings capacity implies that some veterans rated at 100 percent are

employed, including those without an actual reduction in earnings. See

comment 1 for our response to VA’s point that benefits may be

partially compensated on noneconomic factors.

5. See the third paragraph of our response to VA comments in the body of

the letter (p. 33).

6. As we report in 1997, VA conducted the Economic Validation of the

Rating Schedule (ECVARS) in the 1960s in response to the Bradley

Commission recommendations and recurring criticisms that ratings in

the schedule were not accurate. This study was designed to estimate

the average loss in earning capacity among disabled veterans by

calculating the difference between the earnings of disabled veterans,

by condition, and the earnings of nondisabled veterans, controlling for

age, education, and region of residence. On the basis of the results, VA

concluded that of the approximately 700 diagnostic codes reviewed,

the ratings for 330 overestimated veterans’ average loss in earnings

due to their conditions, and about 75 underestimated the average loss

among veterans.
Appendix III: Five-Step Sequential Evaluation

Process for Determining DI and SSI Eligibility

Page 48 GAO-02-597 Re-Examining Disability Criteria

To determine whether an applicant qualifies for DI or SSI disability

benefits, SSA uses a five-step sequential evaluation process. In the first

step, an SSA field office determines if an applicant is working at the level

of substantial gainful activity and whether he or she meets the applicable

nonmedical eligibility requirements (for example, residency, citizenship,

Social Security insured status for DI, and income and resources for SSI).

An applicant who is found to be not working or working but earning less

than the substantial gainful activity level (minus allowable exclusions),

and who meets the nonmedical eligibility requirements, has his or her case

forwarded to a state Disability Determination Service (DDS) office.

Applicants who do not meet these requirements, regardless of medical

condition, are denied benefits. DDS offices gather medical, vocational, and

other necessary evidence to determine if applicants are disabled under the

Social Security law.

In step two, the DDS office determines if the applicant has an impairment

or combination of impairments that is severe and could be expected to last

at least 12 months. According to SSA standards, a severe impairment is

one that significantly limits an applicant’s ability to do “basic work

activities,” such as standing, walking, speaking, understanding, and

carrying out simple instructions; using judgment; responding appropriately

to supervision; and dealing with change. The DDS office collects all

necessary medical evidence, either from those who have treated the

applicant or, if that information is insufficient, from an examination

conducted by an independent source. Applicants with severe impairments

that are expected to last at least 12 months proceed to the third step in the

disability determination process; applicants without such impairments are

denied benefits.

At step three, the DDS office compares the applicant’s condition with the

Listing of Impairments (the Medical Listings) developed by SSA. The

Medical Listings describe medical conditions that, according to SSA, are

severe enough ordinarily to prevent an individual from engaging in

substantial gainful activity. An applicant whose impairment is cited in the

Medical Listings or whose impairment is equally as severe or more severe

than those impairments in the Medical Listings and who is not engaging in

substantial gainful activity is found to be disabled and awarded benefits.

An applicant whose impairment is not cited in the Medical Listings or

whose impairment is less severe than those cited in the Medical Listings

is evaluated further to determine whether he or she has vocational

limitations that, when combined with the medical impairment(s), prevent

work.

Appendix III: Five-Step Sequential Evaluation

Process for Determining DI and SSI

Eligibility
Appendix III: Five-Step Sequential Evaluation

Process for Determining DI and SSI Eligibility

Page 49 GAO-02-597 Re-Examining Disability Criteria

In step four, the DDS office uses its physician’s assessment of the

applicant’s residual functional capacity to determine whether the

applicant can still perform work he or she has done in the past. For

physical impairments, residual functional capacity is expressed in certain

demands of work activity (for example, ability to walk, lift, carry, push,

pull, and so forth); for mental impairments, residual functional capacity is

expressed in psychological terms (for example, whether a person can

follow instructions and handle stress). If the DDS office finds that a

claimant can perform work done in the past, benefits are denied.

In the fifth and last step, the DDS office determines if an applicant who

cannot perform work done in the past can do other work that exists in the

national economy.1

 Using SSA guidelines, the DDS considers the

applicant’s age, education, vocational skills, and residual functional

capacity to determine what other work, if any, the applicant can perform.

Unless the DDS office concludes that the applicant can perform work that

exists in the national economy, benefits are allowed. At any point in the

sequential evaluation process, an examiner can deny benefits for reasons

relating to insufficient documentation or lack of cooperation by the

applicant. Such reasons can include an applicant’s failure to (1) provide

medical or vocational evidence deemed necessary for a determination by

the examiner, (2) submit to a consultive examination that the examiner

believes is necessary to provide evidence, or (3) follow a prescribed

treatment for an impairment. Benefits are also denied if the applicant asks

the DDS to discontinue processing the case.

 1

 By definition, work in the national economy must be available in a significant amount in

the region where the applicant lives or in several regions of the country. It is

inconsequential whether (1) such work exists in the applicant’s immediate area, (2) job

vacancies exist, or (3) the applicant would actually be hired.
Appendix IV: GAO Contacts and Staff

Acknowledgments

Page 50 GAO-02-597 Re-Examining Disability Criteria

Kay E. Brown, Assistant Director (202) 512-3674

Brett S. Fallavollita, Analyst-in-Charge (202) 512-8507

The following people also made important contributions to this report:

William A. McKelligott, Barbara W. Alsip, and Daniel A. Schwimer.

Appendix IV: GAO Contacts and Staff

Acknowledgments

GAO Contacts

Staff

Acknowledgments

(130050)
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