United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Human Resources, Committee on

Ways and Means, House of

Representatives

May 1998 SUPPLEMENTAL

SECURITY INCOME

SSA Needs a Uniform

Standard for Assessing

Childhood Disability

GAO/HEHS-98-123

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-279558 

May 6, 1998

The Honorable E. Clay Shaw

Chairman, Subcommittee on Human Resources

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

In 1997, almost 900,000 children younger than 18 received about $5 billion

in Supplemental Security Income (SSI) benefits. The Personal

Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L.

104-193), commonly referred to as welfare reform, made eligibility for

childhood SSI benefits more restrictive.1

 In February 1997, the Social

Security Administration (SSA) published regulations to implement the new

definition of disability for the SSI children’s program set forth in the

welfare reform law. Under the more restrictive standard, a child’s

impairment generally must result in marked limitations in two areas of

functioning or an extreme limitation in one area. Previously, a child could

be found eligible if his or her impairment resulted in one marked and one

moderate limitation or three moderate limitations.

In September 1997, we reported that SSA’s regulations establishing a new

severity standard are consistent with the law and are well supported.2

Since then, we have been monitoring SSA’s adjudication of cases under the

new regulations for 288,000 children whose eligibility was subject to

review against the new standard as well as for about 370,000 new

applicants. You asked us to expand on our early findings regarding SSA’s

implementation of the new eligibility standard, which we reported to you

and the Chairman of the Social Security Subcommittee in a joint hearing

on March 12, 1998.3

Results in Brief SSA has made considerable progress in implementing the welfare reform

changes in eligibility for SSI children. It has taken important steps to

1

Sec. 232 of P.L. 104-193 mandates that we report to the Congress by January 1, 1999, on (1) the effect

of the legislative changes on the SSI program and (2) the extra expenses incurred by families of

children receiving SSI who are not covered by other public programs. This report is based on our work

to date under the first mandated study.

2

Supplemental Security Income: Review of SSA Regulations Governing Children’s Eligibility for the

Program (GAO/HEHS-97-220R, Sept. 16, 1997).

3

SSA’s Management Challenges: Strong Leadership Needed to Turn Plans Into Timely, Meaningful

Action (GAO/T-HEHS-98-113, Mar. 12, 1998).

Page 1 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

safeguard fairness by identifying children whose benefits may have been

terminated inappropriately and establishing remedial action to rereview

their cases. However, because SSA’s medical listings reflect multiple levels

of severity, SSA also needs to expedite updating and modifying its medical

listings to ensure that all children are assessed against a uniform severity

standard. The need to revise the listings is a long-standing problem that we

reported 3 years ago. Moreover, SSA needs to take concerted action to

follow through on its plan for monitoring and continually improving the

quality of decisions regarding children. Consistent with our legislative

mandate, we will continue to focus our work on SSA’s efforts to provide

reasonable assurance that it can administer the program consistently and

improve the accuracy of childhood disability decisions.

Background The Congress made the eligibility criteria for children to receive SSI more

restrictive in order to help ensure that only needy children with severe

disabilities are eligible for benefits. From the end of 1989 through 1996, the

number of children younger than 18 receiving SSI had more than tripled,

from 265,000 to 955,000. This growth occurred after SSA initiated outreach

efforts and issued two sets of regulations that made the eligibility criteria

for children less restrictive, particularly for children with mental

impairments.4

One regulatory change, issued in December 1990, revised and expanded

SSA’s medical listings for childhood mental impairments by adding such

impairments as attention deficit hyperactivity disorder and incorporating

functional criteria into the listings. Examples of such functional criteria

include standards for assessing a child’s social skills; cognition and

communication skills; and the ability to concentrate, keep pace, and

persist at tasks at hand. The medical listings are regulations containing

examples of medical conditions, including both physical and mental

impairments, that are so severe that disability can be presumed for anyone

who is not performing substantial gainful activity and who has an

impairment that “meets” the criteria—medical signs and symptoms and

laboratory findings—of the listing. Since the listings cannot include every

possible impairment or combination of impairments a person can have,

SSA’s rules also provide that an impairment or combination of impairments

can “equal” or be “equivalent to” the severity of a listing. There are

separate listings for adults and children. The childhood listings are used

first in evaluating childhood claims. If the child’s impairment does not

4

Social Security: Rapid Rise in Children on SSI Disability Rolls Follows New Regulations

(GAO/HEHS-94-225, Sept. 9, 1994).

Page 2 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

meet or equal the severity of a childhood listing, the adult listings are

considered.

The second regulatory change, issued in February 1991 in response to the

Sullivan v. Zebley Supreme Court decision, added two new bases for

finding children eligible for benefits, both of which required an assessment

of a child’s ability to function: functional equivalence, which was set at

“listing level” severity, and an individualized functional assessment (IFA),

which was set at a lower threshold of severity.

Functional equivalence is based on the principle that it is the functional

limitations resulting from an impairment that make the child disabled,

regardless of the particular medical cause. It was added as a basis for

eligibility in response to the Supreme Court’s determination in the Zebley

case that SSA’s medical listing of impairments—which had been the only

basis for eligibility—was incomplete. Under functional equivalence, a child

could be found eligible for benefits if the child’s impairment limited his or

her functional ability to the same degree as described in a listed

impairment. Functional equivalence is particularly appropriate for

assessing children with combinations of physical and mental impairments.

The IFA allowed children whose impairments were less severe than listing

level to be found eligible if their impairments were severe enough to

substantially limit their ability to act and behave in age-appropriate ways.

A child was generally found eligible under the IFA if his or her impairment

resulted in moderate functional limitations in three areas of functioning or

a marked limitation in one area and a moderate limitation in another area.5

In 1995, we reported that the subjectivity of the IFA called into question

SSA’s ability to ensure reasonable consistency in administering the SSI

program, particularly for children with behavioral and learning disorders.

We suggested that the Congress consider eliminating the IFA and directing

SSA to revise its medical listings.6

5

Under the IFA, areas of functioning were assessed on the basis of children’s ages. Social,

communication, cognition, and motor skills were assessed for children of all ages. Responsiveness to

stimuli was assessed in children under age 1; personal and behavioral skills were assessed for children

aged 1 and older; the ability to concentrate, persist at tasks at hand, and keep pace was assessed for

children aged 3 and older.

6

Social Security: New Functional Assessments for Children Raise Eligibility Questions

(GAO/HEHS-95-66, Mar. 10, 1995.)

Page 3 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

Welfare Reform

Restricts Childhood

Eligibility for SSI

Benefits

Several welfare reform provisions enacted in August 1996 made the

eligibility criteria for disabled children more restrictive: (1) childhood

disability was redefined from an impairment comparable to one that

would prevent an adult from working to an impairment that results in

“marked and severe functional limitations,” (2) the IFA was eliminated as a

basis for determining eligibility for children, and (3) maladaptive behavior

was removed from consideration when assessing a child’s personal or

behavioral functioning. Thus, such behavior would be considered only

once—in the assessment of that child’s social functioning—when

determining whether the child had a mental impairment severe enough to

meet or equal the medical listings. The law also required SSA to

redetermine the eligibility of children on the rolls who might not meet the

new eligibility criteria because they received benefits on the basis of the

IFA or maladaptive behavior.

Fewer Children Are

Affected by the Law Than

Was Earlier Estimated

Earlier legislative proposals under consideration in 1995 might have

removed from the rolls as few as 45,000 to as many as 190,000 children,

according to Congressional Budget Office (CBO) estimates. After the

welfare reform legislation was enacted in August 1996 but before SSA

issued its regulations, CBO estimated that about 170,000 children on the

rolls would no longer be eligible for benefits. After SSA issued its

regulations in February 1997, CBO and SSA estimates of children who would

be removed from the rolls were very close—131,000 and 135,000,

respectively.

SSA identified 288,000 children as potentially affected by the changes in the

eligibility criteria because they had been awarded benefits on the basis of

the IFA or maladaptive behavior. Through January 31, 1998, SSA reviewed

the eligibility of 271,489 of the 288,000 children. Of these, 137,090

(50.5 percent) were found eligible to continue to receive benefits and

134,399 (49.5 percent) were found ineligible. Because the number of

children deemed ineligible does not yet reflect the results of all appeals,

we do not yet know the final outcome on all these cases. Children initially

deemed by a disability determination service to be ineligible have 60 days

to request reconsideration of their case. If they continue to receive an

unfavorable result, they can appeal to an SSA administrative law judge and,

finally, to federal court. Recipients can elect to continue receiving benefit

payments during the appeal process. Factoring in appeals and experience

in conducting redeterminations so far, SSA now estimates that 100,000

children will be removed from the rolls as a result of the redeterminations.

Page 4 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

SSA’s Review Identified

Implementation Problems

and Initiated Corrective

Actions

In December 1997, SSA issued a report on its “top-to-bottom” review of the

implementation of the new regulations to address concerns that children

may have had their benefits terminated unfairly.7 SSA found problems with

the adjudication of claims for which mental retardation was the primary

impairment as well as potential procedural weaknesses relating to

notification of appeal rights and termination of benefits for failure to

cooperate with SSA requests for information needed to redetermine

eligibility.

To remedy these problems, SSA intends to rereview all children whose

benefits were terminated or denied on the basis of mental retardation. SSA

conducted training in March 1998 to clarify how these claims should be

adjudicated. Also, all cases terminated because families did not cooperate

with SSA in processing the claim, such as by failing to provide requested

medical information or to take the child for a consultative examination,

will be rereviewed. SSA found that in two-thirds of these terminations, all

the required contacts had not been made or had not been documented in

the file. Finally, families of children whose benefits were terminated but

did not appeal are being given an additional 60-day period in which to

appeal their terminations. Notices of this right as well as the right to

continue to receive benefits while the appeal is pending were sent out in

February 1998.

Regulations Generally

Set Severity at Two

Marked or One

Extreme Limitation

To implement the new law, SSA issued interim final regulations establishing

a new severity standard in February 1997, which we found to be consistent

with the law.8

 The regulations define an impairment that results in

“marked and severe functional limitations” as one that meets or medically

or functionally equals one of SSA’s medical listings.9

 For a child to be

determined eligible for benefits under this new and stricter standard of

severity, the child’s impairment must generally result in marked functional

limitations in two areas of functioning or an extreme limitation in one

7

For more information, see SSA, Social Security: Review of SSA’s Implementation of the New SSI

Childhood Disability Legislation (Baltimore, Md.: 1997).

8

In light of the congressional mandate to issue regulations needed to carry out the new statutory

provisions as expeditiously as possible, SSA determined that there was good cause to waive the notice

of proposed rulemaking procedures. Instead, in accordance with the Administrative Procedure Act,

SSA issued interim final regulations with a request for public comments. SSA stated that it would issue

revised rules if necessary.

9

Previously, the IFA afforded children whose impairments were not severe enough to meet or equal

SSA’s listings an additional basis on which to qualify for benefits. The IFA, which was set at a lower

severity standard than the listings, was analogous to the test of residual functional capacity for adults

whose impairments are not of listing level severity. Now, unlike adults, children can qualify only under

the listings.

Page 5 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

area. SSA also eliminated the IFA and removed the duplicate consideration

of maladaptive behavior from the mental disorders listings.

In developing its regulations, SSA concluded that the Congress meant to

establish a stricter standard of severity than “one marked, one moderate”

limitation, for several reasons. The Congress eliminated the “comparable

severity” standard of disability and the IFA, which was created for

evaluating impairments less severe than those in the medical listings. A

“one marked, one moderate” standard of severity would have retained one

of the standards under which children were found eligible under the IFA,

which SSA stated would violate the law. Finally, SSA interpreted the

conference report to mean that the Congress intended the listings to be the

last step in the disability determination process for children.

Some Children With Less

Severe Disabilities Still

Receive Benefits

Although SSA articulated the “two marked or one extreme” severity

standard in its regulations, it did not modify its existing listings to

specifically incorporate functional criteria that would reflect both the new

definition of childhood disability and advances in medicine and science.

For example, because of advances in treatment, some impairments no

longer have as severe an effect on a child’s ability to function as they once

did. As a result, some listings are set below the “two marked or one

extreme” threshold of severity, and cases are being adjudicated at this less

severe level as well as at the “two marked or one extreme” severity level.

SSA has identified 28 listings that are most likely to enable children whose

impairments result in fewer than two marked functional limitations or one

extreme functional limitation to be awarded benefits. Our review shows

that such less severe listings can serve as the basis for awards even though

SSA rejected the “one marked, one moderate” level of severity in

interpreting the “marked and severe” functional limitations required by the

welfare reform law. Children who meet or medically equal these less

severe listings qualify for benefits under the regulations. At the same time,

SSA told us that the regulations prohibit the less severe listings from being

used to determine functional equivalence. In March 1997, SSA stated that it

planned to issue a Social Security ruling to clarify that only listings at the

“two marked or one extreme” level were to be used in determining

functional equivalence, but SSA has not yet issued such a ruling. In the

absence of such clarification, some adjudicators may be using less severe

listings in making functional equivalence determinations. Reviewers in

SSA’s Office of Program and Integrity Reviews have told us, however, that

they would consider this an error.

Page 6 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

SSA has not identified how many children may have been awarded benefits

on the basis of these less severe listings. SSA told us that unreliable coding

of the listings used to determine eligibility makes it difficult to quantify the

extent of this problem. We do know, however, that some of the listings

below the “two marked or one extreme” threshold are for prevalent

impairments, including two of six listings for the most common

impairment—mental retardation—and three listings for cerebral palsy, one

for epilepsy, and one for asthma. Other listings below the “two marked or

one extreme” threshold include one listing for juvenile rheumatoid

arthritis, one for juvenile diabetes, and two for diabetes insipidus. SSA has

not established a schedule for updating and modifying its listings.

SSA Is Taking Steps to

Improve the Quality of

Decisions on Children

SSA’s quality assurance statistics on childhood cases show uneven

accuracy rates across the states. Although nationally the accuracy rate for

decisions on new childhood cases and redeterminations exceeds SSA’s

standard of 90.6 percent, many states fall below the standard. Specifically,

for decisions made on new childhood cases from June 1997 through

January 1998, 4 states fell below the 90.6-percent accuracy standard for

awards, and 10 states fell below the standard for denials. For

redeterminations, 10 states fell below the standard for continuances, and

10 states fell below the standard for cessations. Most of the errors have

been in the documentation; that is, there was some deficiency in the

evidence that formed the basis for the determination. In these cases,

proper documentation of the case could substantiate or reverse the

decision.

Given the significant changes in adjudicating cases on the basis of the new

regulations, these statistics are not surprising. Moreover, childhood cases

historically have been among the more difficult cases to adjudicate. We

would expect SSA to be monitoring the decisions; identifying areas of

difficulty for adjudicators; and providing additional clarification, guidance,

and training to improve the accuracy of decisions. In fact, this is exactly

what SSA has been doing, although its training schedule was delayed

slightly.

Further, on February 18, 1998, SSA issued a memorandum detailing a new

quality review plan for childhood disability cases to ensure correct and

consistent application of the new regulations. The plan includes special

initiatives to ensure the quality of cases readjudicated in response to the

top-to-bottom review, as well as initiatives to improve SSA’s ongoing quality

assurance reviews on childhood cases. For the first time, SSA will be

Page 7 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

drawing separate samples of new childhood claims and continuing

disability reviews. This should allow SSA to provide more timely feedback

and policy clarifications on the problems unique to adjudication of

childhood claims. SSA also will be measuring the performance of its quality

reviewers to ensure that they are accurately and consistently identifying

errors. Under this effort, SSA plans to increase its sample of reviewed cases

from 1,600 to 6,000 annually.

Conclusions SSA has made substantial progress in implementing the new childhood

definition of disability through its rapid redetermination of most of these

cases, its action to ensure that the redetermination process is fair, and its

ongoing review of the implementation of the new regulations. However,

we remain concerned about how accurately and consistently the disability

determination process is working for children. Specifically, because some

of SSA’s listings of impairments require less than “two marked or one

extreme” limitation to qualify for benefits, SSA adjudicators are not

assessing all children against a uniform severity standard. This is because

SSA has neither updated its listings to reflect advances in medicine and

science nor modified them to reflect a single standard of severity, despite

its authority to do so. Moreover, we noted the need to revise the listings 3

years ago. SSA also needs to continue its efforts to improve decisionmaking

for childhood cases to better ensure that adjudicators apply the new

eligibility criteria accurately and consistently.

Recommendation to

the Commissioner of

Social Security

In view of the fact that many of SSA’s medical listings for children are

outdated and allow eligibility to be based upon multiple standards of

severity, we recommend that the Commissioner act immediately to update

and modify its medical listings to incorporate advances in medicine and

science and to reflect a uniform standard of severity.

Agency Comments We provided a draft of this letter to SSA for review and comment. SSA

officials agreed that SSA should periodically update its listings and stated

that it is developing a schedule to accomplish this. The agency stated that

it must consult with medical experts to ensure that the listings reflect

state-of-the-art medical practice and estimates that it will take several

years to complete the revision. However, the agency did not address the

need for the listings to reflect a uniform severity standard.

Page 8 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
B-279558 

SSA also made some technical comments, which we incorporated where

appropriate.

We are providing copies of this report to the Commissioner of Social

Security and other congressional committees with an interest in this

matter. We will also make copies available to others upon request. Please

contact me on (202) 512-7215 if you have any questions about this report.

Other major contributors are Cynthia Bascetta, Ellen Habenicht, Carol

Petersen, and Daniel Schwimer.

Sincerely yours,

Cynthia M. Fagnoni

Director, Income Security Issues

Page 9 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
Page 10 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
Page 11 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
Related GAO Products

SSA’s Management Challenges: Strong Leadership Needed to Turn Plans

Into Timely, Meaningful Action (GAO/T-HEHS-98-113, Mar. 12, 1998).

Supplemental Security Income: Review of SSA Regulations Governing

Children’s Eligibility for the Program (GAO/HEHS-97-220R, Sept. 16, 1997).

Children Receiving SSI by State (GAO/HEHS-96-144R, May 15, 1996).

SSA Initiatives to Identify Coaching (GAO/HEHS-96-96R, Mar. 5, 1996).

Supplemental Security Income: Growth and Changes in Recipient

Population Call for Reexamining Program (GAO/HEHS-95-137, July 7, 1995).

Social Security: New Functional Assessments for Children Raise Eligibility

Questions (GAO/HEHS-95-66, Mar. 10, 1995).

Social Security: Federal Disability Programs Face Major Issues

(GAO/T-HEHS-95-97, Mar. 2, 1995).

Supplemental Security Income: Recent Growth in the Rolls Raises

Fundamental Program Concerns (GAO/T-HEHS-95-67, Jan. 27, 1995).

Social Security: Rapid Rise in Children on SSI Disability Rolls Follows New

Regulations (GAO/HEHS-94-225, Sept. 9, 1994).

(207034) Page 12 GAO/HEHS-98-123 SSI Childhood Eligibility Standard
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100