United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Social Security, Committee on Ways

and Means, House of Representatives

November 1996 APPEALED

DISABILITY CLAIMS

Despite SSA’s Efforts, It

Will Not Reach Backlog

Reduction Goal

G O A

years

1921 - 1996

GAO/HEHS-97-28

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-274842 

November 21, 1996

The Honorable Jim Bunning

Chairman, Subcommittee on Social Security

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

Americans who are denied benefits under the two largest federal programs

providing disability benefits may appeal to the Social Security

Administration’s (SSA) Office of Hearings and Appeals (OHA). This office

hears appeals of denied benefit claims under both of these federal

programs: Disability Insurance (DI) and Supplemental Security Income

(SSI). In the last decade, the number of disability cases appealed to OHA has

increased by about 140 percent. Although SSA has tried to manage this

increased caseload, between 1985 and 1995 its inventory of appealed cases

increased from about 107,000 to almost 548,000. The processing delays

resulting from this increase have created hardships for disability

claimants, who often wait more than a year for a final decision on their

appeal. SSA initiated its Short-Term Disability Plan (STDP) in

November 1994 to reduce the number of appealed cases awaiting a

decision at OHA to a manageable level by December 1996.

Given your interest in improving the disability claims process and

reducing the number of appealed cases whose decisions are significantly

delayed, you asked us to report on OHA’s (1) progress in meeting STDP’s

backlog reduction and case processing goals and (2) current allowance

rate for appealed cases compared with pre-STDP levels.1

 You also asked us

to report on the accuracy of decisions made under STDP, which, as

discussed with your office, we cannot do at this time because SSA is just

now evaluating STDP’s decision accuracy. After SSA completes its

evaluation, we will review the results.

We developed information for this report by analyzing data on OHA

workload, backlog, processing time, and allowance rate levels; examining

SSA documents on STDP activities; and interviewing OHA headquarters

officials responsible for developing and implementing STDP as well as

officials of other SSA offices. Because of the focus of our review, we did

not see the need to verify the accuracy of the data provided by SSA. Our

1

OHA reports its allowance rate as the percentage of appealed cases approved for payment.

Page 1 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

audit work was conducted from May 1996 through September 1996 in

accordance with generally accepted government auditing standards.2

Results in Brief Although OHA has made progress in the past 8 months in reducing its

inventory of appealed cases, SSA will not reach its goal of reducing this

backlog to 375,000 by December 1996. SSA attributes its difficulties to

start-up delays, overly optimistic projections of the number of appealed

cases that would be processed, and an additional 37,500 appealed cases

above what the agency expected during fiscal year 1995. SSA’s analysis

shows that 22 months into STDP, activities under the plan’s key

initiatives—expanded regional screening and prehearing conferencing

activities—allowed OHA to dispose of about 66,500 more cases than it

would have had STDP not been implemented. Despite OHA’s increased

productivity, as of August 1996 its backlog of appealed cases was

515,009—about 3 percent higher than at STDP’s inception in

November 1994.

Some SSA and OHA officials had expressed concern to us that STDP’s

aggressive goals could result in inappropriate benefit awards for some

claimants and that STDP’s initiatives could increase OHA’s allowance rate.

SSA’s statistics show just the opposite. Since the plan was initiated, the

allowance rate—which includes expanded screening unit and prehearing

conferencing decisions—has decreased from about 75 percent in fiscal

year 1994 to about 69 percent through the third quarter of fiscal year 1996.

SSA has not, however, completed any analysis of the accuracy of STDP

decisions or clearly established to what extent, if any, STDP has affected

OHA’s allowance rate. Should SSA’s analysis confirm the accuracy of STDP

decisions, it would demonstrate STDP’s continuing value to SSA in helping to

reduce OHA backlogs.

Background The DI program provides monthly cash benefits to insured, severely

disabled workers; the SSI program provides monthly cash payments to

aged, blind, or disabled people whose income and resources fall below a

certain threshold. Claimants under either program file an application for

disability benefits with one of SSA’s more than 1,300 field offices.

Applications, along with supporting medical evidence, are then forwarded

to state disability determination service (DDS) offices, which make the

initial medical determination of eligibility in accordance with SSA’s policies

2

Our report, Social Security Disability: Backlog Reduction Efforts Under Way; Significant Challenges

Remain (GAO/HEHS-96-87, July 11, 1996), discusses SSA’s progress through February 1996.

Page 2 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

and procedures. Claimants DDS examiners find ineligible have the right to

appeal the decision to OHA, where cases are heard by administrative law

judges (ALJ).

A steadily increasing number of appeals has caused workload pressures

and processing delays for OHA. Between 1985 and 1995, appeals increased

more than 140 percent, and the number of appealed cases awaiting an OHA

decision grew from about 107,000 to almost 548,000. During this period,

average processing time for cases appealed to OHA—measured from the

date a claimant files a request for a hearing to when a decision is issued—

increased 110 percent, from 167 days to 350 days. In addition, “aged”

appealed cases (those taking 270 days or more for a decision) increased

from 5 percent of pending appealed cases to 39 percent during the same

period.

SSA has a long-term strategy—its Plan for a New Disability Claim

Process—designed to address systemic problems contributing to

inefficiencies in its disability programs and significantly reduce the time

claimants must wait to receive a decision on their claim. STDP is SSA’s

ongoing effort to achieve some reduction in OHA’s backlog of appealed

cases.

SSA began STDP in November 1994 to address the backlog crisis from an

agencywide perspective and establish specific goals and time frames for

reducing backlogs. STDP includes 19 temporary initiatives to expedite the

disability determination process and reduce OHA’s backlog from 488,000

appealed cases in October 1994 to 375,000 by December 1996.3 SSA set its

backlog target to equal one and one-half times the number of appealed

cases that, in OHA’s opinion, constitutes an appropriate workload for its

ALJs and staff—about 250,000 appealed cases. According to OHA, the

375,000 target does not relate to any processing time or waiting time goal—

it simply is a target that SSA believed was achievable at STDP’s inception.

STDP’s Expanded Regional

Screening and Prehearing

Conferencing Initiatives

To reach its aggressive backlog reduction goal, STDP relies heavily on a

temporary reallocation of agency resources and process changes to reduce

the number of appealed cases requiring an ALJ hearing. Although STDP has

19 temporary initiatives, OHA expects that its major effect will come

primarily from expanding two pre-STDP initiatives to expedite the

processing of appealed cases. These two initiatives—regional screening

3

In this report, OHA’s backlog includes cases that OHA’s staff and ALJs are working on as well as those

on which no action has been taken.

Page 3 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

unit and prehearing conferencing activities—were designed to target for

review specific kinds of appealed cases that are likely to result in ALJs’

approving the claim for payment (referred to as “allowance”). These

reviews can result in possible allowance without the more costly and

time-consuming process of an ALJ hearing.

Before STDP’s implementation, SSA had established screening units in each

region to help alleviate OHA’s backlog. Screening unit examiners, who were

not OHA staff, reviewed certain appealed cases to determine if the evidence

in the case file was sufficient to permit an allowance, eliminating the need

for a hearing. SSA selected most cases for review by screening unit staff by

using computer-generated case profiles to identify potentially incorrect

claim denials by DDS staff. SSA officials believe that such profiling of

appealed cases minimizes the risk of incorrect allowances.

Under STDP, SSA expanded screening unit activities by assigning OHA

attorneys to help examiners in all of SSA’s regional screening units to

identify more appealed cases that could be allowed earlier in the process.

According to SSA, the opportunity for screening unit examiners to discuss

issues with OHA attorneys gave the examiners more insight into the

adjudication process and enabled the examiners and attorneys, where

appropriate, to recommend allowance in more cases.

SSA’s pre-STDP efforts to reduce the backlog of appealed cases also

included implementing a prehearing conferencing process. The purpose of

prehearing conferencing was to shorten processing time for appealed

cases by assigning experienced OHA attorneys to review and identify

appealed cases that potentially could be allowed without a formal ALJ

hearing. While screening unit activities focused on reviewing evidence

already in the case file, prehearing conferencing enabled attorneys to

review evidence in the case file, confer with claimant representatives,

conduct limited case development, and draft decisions to be reviewed and

approved by ALJs.

Under STDP’s expanded prehearing conferencing initiative, OHA’s senior

attorneys have been given quasi-judicial powers or the authority to issue

allowance decisions without an ALJ’s involvement or approval. Under the

initiative, OHA attorneys are to extensively develop the case record, which

includes obtaining medical and vocational evidence, conducting

conferences with claimant representatives as well as medical and

vocational experts, and issuing allowance decisions. If they cannot allow

the claim on the basis of their review of the evidence, the case is

Page 4 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

scheduled for an ALJ hearing. As in the screening unit initiative, SSA relied

on computer-generated case profiles to select cases to be processed under

this effort. Cases were selected on the basis of their likelihood to be

allowed on the record by an ALJ.

4

STDP is scheduled to be phased out in December 1996. Although OHA has

proposed that SSA extend expanded screening unit activities through

December 1997, as of September 1996 SSA had made no final decision on

this. Expanded prehearing conferencing, however, will remain active until

June 30, 1997, when regulatory authority for senior attorneys to allow

appealed cases expires. In fiscal year 1997, SSA expects to implement

certain features from its ongoing efforts to redesign the disability claims

process. One of the features being tested is a new decision-making

position to help expedite appealed claims through the process. Like

activities under STDP’s expanded screening unit and prehearing

conferencing initiatives, this position will enable someone other than an

ALJ to review and allow some appealed cases, eliminating the need for an

ALJ hearing.

STDP’s Backlog Goal

Will Not Be Reached

SSA acknowledges that it will not reach STDP’s goal of reducing the backlog

of appealed cases to 375,000 by December 1996. In fact, OHA’s backlog of

about 515,000 appealed cases as of August 1996—about 22 months into

STDP—was 3 percent higher than the backlog of about 500,000 that existed

at the plan’s inception.

Although SSA will not reach STDP’s backlog reduction goal, the agency

believes that the plan has helped to reduce the growth in the backlog of

appealed cases awaiting a decision. Since peaking at about 552,000 in

December 1995, OHA’s backlog decreased steadily by an average of about

4,600 appealed cases per month through August 1996 or by about 37,000

total appealed cases. As shown in figure 1, OHA’s backlog decreased during

each of the last two fiscal quarters of 1996. As of August 31, 1996, the

backlog was 515,009 appealed cases.

4

On-the-record allowances, those appealed cases that can be allowed without further development, do

not require an ALJ hearing.

Page 5 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

Figure 1: OHA’s Backlog Has Begun to Decrease

 

9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96

460

480

500

520

540

560

480

510

530

548 548

552

539

524

Quarter Ending

Inventory of Appealed Cases (000)

OHA’s current projections indicate that its backlog of appealed cases will

be approximately 498,000 at the end of calendar year 1996 or about

123,000 above STDP’s target. OHA is relying on increased productivity from

its ALJs and attorneys to increase its ability to dispose of cases and

facilitate reaching this revised target.

Backlog Reduction Efforts

Hindered by a Shortfall in

STDP Allowances and an

Increase in Appealed Cases

According to OHA, its inability to reach STDP’s backlog reduction goal is due

to start-up delays, overly optimistic projections on the number of appealed

cases that could be processed, and an unexpected increase in the number

of appealed cases. Figure 2 illustrates the disparity between the number of

appealed cases OHA expected to allow under STDP through December 1996

and the actual number that have been allowed through August 1996—22

months since the plan was initiated.

Page 6 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

Figure 2: STDP’s Key Initiatives Have

Not Reached Goals 

Prehearing

Conferencing Screening Units

0

50,000

100,000

150,000

200,000

250,000

STDP Initiatives

Case Allowances

224,000

76,000

Actual

Projected

Start-up delays associated with prehearing conferencing—the initiative

expected to have the greatest impact on reducing OHA’s backlog of

appealed cases—have hindered SSA’s ability to reach STDP’s goals. To

implement this initiative, SSA had to seek a regulatory change to give about

600 OHA senior and supervisory staff attorneys the authority to decide

certain appealed cases that were formerly limited to ALJ jurisdiction.

However, the process of obtaining regulatory change and defining the

specific duties and responsibilities these attorneys would have under STDP

was lengthy, and implementation did not begin until July 1995—or about 6

months after the projected start-up date.

Page 7 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

Overly optimistic allowance projections for STDP’s expanded prehearing

conferencing and screening unit initiatives also contributed to OHA’s

inability to reach the plan’s backlog reduction goal. SSA initially projected

that expanded prehearing conferencing would result in 224,000 allowances

by senior attorneys through the 2-year period ending December 1996.

However, as of August 31, 1996—or about 22 months into STDP—these

attorneys had allowed only 55,363 appealed cases or about 25 percent of

the projected total.5

 The aggressive projections for this initiative were

based on the results of the prehearing conferencing pilot, which OHA

conducted before STDP’s implementation, and the assumption that the use

of profiling to select cases would result in a higher rate of cases that could

be allowed without a hearing.

On the basis of the prehearing conferencing pilot, which was conducted at

19 hearing offices that agreed to participate, OHA estimated that senior

attorneys would be able to allow approximately 75 percent of the appealed

cases selected for their review. However, data show that between

August 1995 and August 1996 senior attorneys allowed only about

24 percent of the appealed cases reviewed under STDP. According to SSA,

the lower allowance rate is primarily due to senior attorneys’ not

conducting prehearing conferences with claimants as frequently as

anticipated as well as not sufficiently developing evidence necessary to

complete a claimant’s case record. To increase the number of allowances

under this initiative, OHA has directed its hearing offices to ensure that all

senior attorneys receive training to better familiarize themselves with

OHA’s case development process. In addition, through directives and a

series of conference calls with all its hearing offices, OHA has provided its

senior attorneys with specific guidance that includes the kind of evidence

that would adequately support an allowance decision.

Like STDP’s prehearing conferencing initiative, expanded regional

screening has not reached STDP’s allowance goals. Before STDP, screening

units were expected to allow about 20,000 appealed cases annually. With

STDP’s introduction of OHA attorneys to the process, SSA expected to allow

38,000 appealed cases annually or 76,000 over the 2 years the initiative was

to be in place. In the 22 months since STDP was initiated, however,

screening units had allowed a total of 26,022 appealed cases or about

34 percent of the projected total as of August 31, 1996.

5

Between May and July 1995, 4,385 appealed cases were allowed under STDP’s prehearing

conferencing initiative. Although we have included those cases in the total number of appealed cases

allowed under this initiative, SSA does not have data on the number of cases that senior attorneys

reviewed during this period. Consequently, we cannot include these cases when determining the

allowance rate for this initiative.

Page 8 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

SSA expected that under STDP, regional screening units would allow 76,000

appealed cases or about 15 percent of those selected for review. To reach

the initiative’s target of 76,000 allowances, screening units would have had

to review a total of about 507,000 cases. Since STDP’s inception in

November 1994, however, screening units had reviewed only about

258,000 cases as of August 31, 1996. According to SSA, the shortfall in the

number of appealed cases processed by screening units is mainly due to

SSA’s reassignment of some screening unit staff to other duties.

Finally, an unexpected increase in the number of appeals also hindered

OHA’s efforts to reduce its backlog to STDP’s goal. During fiscal year 1995,

OHA received approximately 37,500 more appealed cases than it had

initially projected for the year. According to OHA’s staff management

officer, this unanticipated workload was due primarily to an increased

number of cases processed by DDS staff.

Although Goals Have Not

Been Reached, STDP Has

Enhanced OHA’s Ability to

Process Its Workload

STDP has enhanced OHA’s ability to dispose of appealed cases, helped

decrease the agency’s decision-writing backlog, and reduced processing

time for some appealed cases. OHA estimates that as of August 31, 1996,

STDP had resulted in a net increase of about 66,500 dispositions. This

estimate is based on time savings associated with appealed cases allowed

under STDP’s expanded screening unit and prehearing conferencing

initiatives.6

 To determine the net increase in dispositions attributable to

STDP, OHA estimated the amount of ALJ time that could be saved through

activities implemented under the plan’s two key initiatives and converted

these time savings into the number of additional cases that could be

disposed of by ALJs in that amount of time.

OHA’s estimate that the number of dispositions through August 1996

increased by about 66,500 as a result of STDP is consistent with our

estimate. On the basis of our analysis of ALJ productivity before STDP, had

SSA not implemented the plan, OHA would have disposed of about 68,000

fewer cases between the beginning of fiscal year 1995 and August 1996.7

STDP has also helped to reduce the number of appealed cases awaiting a

written decision. To increase OHA’s decision-writing capacity, staff from

6

OHA estimates that, on average, each case disposed of under STDP’s expanded screening unit and

prehearing conferencing initiatives results in saving 1.5 hours of ALJ time; each prehearing

conferencing case referred to an ALJ for a hearing results in a time savings of 1 hour. OHA estimates

that, on average, ALJs spend about 3.8 hours per disposition.

7

Our analysis assumes that the ALJ disposition rate would have remained constant at 44 dispositions

per month—the average for the fiscal year preceding STDP’s implementation.

Page 9 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

various SSA offices were temporarily detailed to OHA under STDP. Efforts

made under STDP helped reduce the decision-writing backlog from 40,567

decisions—its level at STDP’s inception—to 20,293 as of August 31, 1996, or

by about 50 percent.8

Finally, STDP has significantly reduced processing times for appealed cases

allowed under its expanded screening unit and prehearing conferencing

initiatives. On average, processing times for screening unit examiners’

decisions have averaged 39 days; processing times for senior attorneys’

prehearing conferencing decisions have averaged 121 days. These

processing times are substantially shorter than the average monthly

processing time of 264 days for similar cases decided by ALJs from

May 1995 through May 1996.

OHA’s Allowance Rate

Has Decreased Under

STDP

Some SSA and OHA officials had expressed concern to us that STDP’s

aggressive processing goals could result in inappropriate benefit awards

for some disability claimants and that STDP’s initiatives could cause OHA’s

allowance rate to increase. However, the percent of appealed cases

allowed by OHA since STDP’s inception has notably decreased. The

allowance rate has decreased from about 75 percent in fiscal year 1994—

the fiscal year preceding STDP’s implementation—to about 69 percent

through the third quarter of fiscal year 1996.9

 This allowance rate reflects

cases decided by ALJs as well as those decided by screening unit staff and

senior attorneys under STDP. As figure 3 shows, except for the third quarter

of fiscal year 1996, the allowance rate has decreased during every quarter

since the beginning of 1995. SSA has not completed any analyses of factors

contributing to this decrease, however.

8

According to OHA, the appropriate caseload for its decision writers is about 15,000 cases.

9

The allowance rate of 69 percent reflects only cases in which a decision was rendered. Its calculation

does not consider cases that were dismissed. If dismissed cases were included in the calculation, the

allowance rate would be about 60 percent. An ALJ may dismiss an appealed case for several reasons,

including a claimant’s failure to appear at a hearing without “good cause,” an ALJ’s determination that

a claimant has no right to a hearing, or the death of the claimant.

Page 10 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

Figure 3: OHA’s Allowance Rate Has Decreased Under STDP

 

9/94 12/94 3/95 6/95 9/95 12/95 3/96 6/96

66

68

70

72

74

76

78

75.7 75.7

73.3 73.1

71.3

69.7

67.4

68.8

Quarter Ending

Percent of Appealed Cases Allowed

Conclusions STDP is SSA’s effort to achieve some reduction in what has been OHA’s

growing backlog of appealed cases. Recent processing trends show that

STDP has helped the agency reduce the backlog, which has decreased

steadily in the past 8 months. In addition, concerns that STDP could result

in inappropriate allowances and that OHA’s allowance rate could increase

have not been substantiated.

Recommendation to

the Commissioner of

the Social Security

Administration

SSA is evaluating the accuracy of the decisions made under STDP to help

determine the advisability of continuing with the plan. Because STDP has

shown that it can help reduce the backlog of appealed cases, we

recommend that—if SSA determines that accurate decisions are being

made—the Commissioner of the Social Security Administration extend

STDP until the agency institutes a permanent process that ensures the

timely and expeditious disposition of appeals.

Page 11 GAO/HEHS-97-28 Appealed Disability Claims Backlog
B-274842 

Agency Comments

and Our Evaluation

In commenting on a draft of this report, SSA agreed with our conclusions

and recommendation on the conditions for extending STDP. The agency

stated that it recently found the accuracy of screening unit allowances to

be acceptable and has decided to extend the initiative beyond the original

December 1996 expiration date. The agency also stated that it is reviewing

the accuracy of prehearing conferencing allowances and will soon decide

whether to extend that initiative. We also received technical comments

from SSA, which we incorporated where appropriate. SSA’s comments are

reprinted in appendix I.

We are providing copies of this report to the Director of the Office of

Management and Budget and the Commissioner of the Social Security

Administration. We will also make copies available to others upon request.

Major contributors to this report are listed in appendix II. If you have any

questions concerning this report or need additional information, please

call me on (202) 512-7215.

Sincerely yours,

Jane L. Ross

Director, Income Security Issues

Page 12 GAO/HEHS-97-28 Appealed Disability Claims Backlog
Page 13 GAO/HEHS-97-28 Appealed Disability Claims Backlog
Contents

Letter 1

Appendix I 

Comments From the

Social Security

Administration

16

Appendix II 

Major Contributors to

This Report

17

Figures Figure 1: OHA’s Backlog Has Begun to Decrease 6

Figure 2: STDP’s Key Initiatives Have Not Reached Goals 7

Figure 3: OHA’s Allowance Rate Has Decreased Under STDP 11

Abbreviations

ALJ administrative law judge

DDS disability determination service

DI Disability Insurance

OHA Office of Hearings and Appeals

SSA Social Security Administration

SSI Supplemental Security Income

STDP Short-Term Disability Plan

Page 14 GAO/HEHS-97-28 Appealed Disability Claims Backlog
Page 15 GAO/HEHS-97-28 Appealed Disability Claims Backlog
Appendix I 

Comments From the Social Security

Administration

Page 16 GAO/HEHS-97-28 Appealed Disability Claims Backlog
Appendix II 

Major Contributors to This Report

Michael T. Blair, Jr., Assistant Director, (404) 679-1944

Carlos J. Evora, Evaluator-in-Charge, (404) 679-1845

(106904) Page 17 GAO/HEHS-97-28 Appealed Disability Claims Backlog
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