Report to the Chairman, Subcommittee 

on Social Security, Committee on Ways 

and Means, House of Representatives 

United States General Accounting Office 

GAO 

July 2003 SOCIAL SECURITY 

DISABILITY 

Reviews of 

Beneficiaries’ 

Disability Status 

Require Continued 

Attention to Achieve 

Timeliness and CostEffectiveness 

GAO-03-662 
SSA will likely face a backlog of about 200,000 continuing disability review 

(CDR) cases by the end of fiscal year 2003. SSA officials attribute the 

pending backlog to its decision to reduce the number of cases reviewed as a 

result of the delay in obtaining fiscal year 2003 funding. In addition, the 

pending backlog resulted from putting more emphasis on initial applications 

over CDRs. To ensure CDRs receive adequate attention, SSA has requested 

some fiscal year 2004 funds be “earmarked” for these reviews. Given SSA’s 

ability to eliminate its previous CDR backlog using targeted funds, this 

maneuver could help SSA. Over the next 5 years, SSA has estimated that 8.5 

million CDRs, costing about $4 billion, are needed to stay current. If SSA 

generates another backlog, cost savings and program integrity may be 

compromised by paying benefits to disability beneficiaries who are no longer 

eligible to receive them. 

SSA is not making the best use of available information when conducting its 

CDRs, leaving opportunities for improvement. First, SSA’s decisions on the 

timing of CDRs are not based on systematic analysis of available 

information. Second, SSA’s process for determining which CDR method to 

use is not always based on the best available information. For example, SSA 

requires an in-depth review for all beneficiaries who, upon entering the 

program, are expected to medically improve even if current information on 

certain of those beneficiaries indicates that improvement is unlikely and that 

the review would be better handled through a shorter, less expensive 

method. Third, SSA has not fully pursued medical treatment data available 

from the Medicare and Medicaid programs despite their potential to improve 

SSA’s decisions regarding which review method to use. Fourth, SSA’s CDRs 

continue to be hampered by missing or incomplete information on 

beneficiaries’ case history. 

SSA delays the provision of new return-to-work benefits to beneficiaries 

expected to medically improve based on the assumption that such 

beneficiaries are least likely to need them. However, according to SSA 

data, about 94 percent of such beneficiaries are not found to have 

medically improved upon completion of a disability review. As a result, 

some individuals who might benefit from return-to-work services are 

initially denied access to them. SSA is reviewing this policy and while 

doing so, will need to consider how to best balance its financial 

stewardship and return-to-work goals. 

The Social Security Administration 

(SSA) has had difficulty in 

conducting timely reviews of 

beneficiaries’ cases to ensure they 

are still eligible for disability 

benefits. SSA has been taking 

steps to improve the costeffectiveness of its review process. 

SSA has linked the review process 

to eligibility for a new benefit that 

provides return-to-work services. 

This report looks at SSA’s ability to 

stay current with future reviews, 

identifies potential improvements 

to the review process, and assesses 

the review process–return-to-work 

link. 

GAO recommends that the 

Commissioner of SSA 

• pursue a more comprehensive, 

data-driven approach to the 

method it uses to decide when 

to assess individuals for ongoing eligibility; 

• rely more readily on current 

assessments of beneficiary 

information rather than on 

assessments made at time of 

program entry when deciding 

which review method to use; 

and 

• study, and incorporate if costeffective, the more 

comprehensive use of 

Medicare/Medicaid data into 

SSA’s decisions about the 

review method to use. 

In its comments on a draft of this 

report, SSA generally agreed with 

GAO’s recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-03-662.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robert E. 

Robertson at (202) 512-7215 or 

RobertsonR@gao.gov. 

Highlights of GAO-03-662, a report to the 

Chairman, Subcommittee on Social 

Security, Committee on Ways and Means, 

House of Representatives 

July 2003

SOCIAL SECURITY DISABILITY 

Reviews of Beneficiaries' Disability 

Status Require Continued Attention to 

Achieve Timeliness and CostEffectiveness 
Page i GAO-03-662 Social Security Disability 

Letter 1

Results in Brief 3

Background 5

End of Targeted Funding and Other Issues Could Contribute to 

Another Backlog, Threatening Cost Savings 10

Further Opportunities Exist for SSA to Improve CDR CostEffectiveness 17

SSA’s Rationale for Postponing Return-to-Work Services to Some 

Beneficiaries Is Not Well-Supported by Program Experience 24

Conclusions 27

Recommendations to the Commissioner of SSA 28

Agency Comments and Our Evaluation 29

Appendix I Scope and Methodology 32 

Appendix II Comments from the Social Security Administration 34 

Appendix III GAO Contacts and Staff Acknowledgments 38 

GAO Contacts 38

Staff Acknowledgments 38

Tables 

Table 1: Estimated CDR Activities, Fiscal Years 2004-08 13

Table 2: DDS Directors’ Reported Likelihood, If Any, of 

Experiencing an Event That Jeopardizes Meeting CDR 

Workload During Fiscal Years 2004 and 2005 14

Table 3: Extent That DDSs Have a Strategy to Manage Anticipated 

Events and Likelihood That Events Will Have Negative 

Impact on Workload Processing During Fiscal Year 2004 

and 2005 15

Table 4: Summary of SSA’s CDR Activities During Special Funding 

Period, Fiscal Years 1996-2002 16

Contents 
Page ii GAO-03-662 Social Security Disability 

Abbreviations 

CDR continuing disability reviews 

CMS Center for Medicare and Medicaid Services 

DDS Disability Determination Services 

DI Disability Insurance 

EF Disability Electronic Folder 

MIE medical improvement expected 

MINE medical improvement not expected 

MIP medical improvement possible 

SGA substantial gainful activity 

SSA Social Security Administration 

SSI Supplemental Security Income 

This is a work of the U.S. Government and is not subject to copyright protection in the 

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permission from GAO. It may contain copyrighted graphics, images or other materials. 

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copyrighted materials separately from GAO’s product. 
Page 1 GAO-03-662 Social Security Disability 

July 24, 2003 

The Honorable E. Clay Shaw, Jr. 

Chairman, Subcommittee on Social Security 

Committee on Ways and Means 

House of Representatives 

Dear Mr. Chairman: 

The Disability Insurance (DI) and Supplemental Security Income (SSI) 

programs are the largest federal income programs for disabled individuals, 

paying about $86 billion to about 10 million disabled beneficiaries in 2002. 

These programs have been growing in recent years and are poised to grow 

further as the baby boom generation ages. To help ensure that only eligible 

beneficiaries remain on the rolls, the Social Security Administration (SSA) 

is required by law to conduct continuing disability reviews (CDR) for all 

DI beneficiaries and some SSI disability recipients to determine whether 

they continue to meet the disability requirements of the law. In addition, to 

assist beneficiaries who want to return to work and leave the disability 

rolls, SSA began implementing the Ticket to Work and Self-Sufficiency 

Program in 2002. Under this program, beneficiaries are issued a “ticket,” or 

voucher, which they can use to obtain vocational rehabilitation, 

employment, or other return-to-work services from an approved provider 

of their choice. 

Through much of the 1980s and 1990s, the Congress and GAO, among 

others, emphasized the importance of CDRs for maintaining DI and SSI 

program integrity and, consequently, the critical need for SSA to conduct 

CDRs when they are due and in a cost-effective manner. However, SSA 

had difficulty completing all required CDRs when they were due, which 

resulted in the development of an enormous backlog of 4.3 million cases. 

In 1996, the Congress, in response to these difficulties, authorized funding 

United States General Accounting Office 

Washington, DC 20548 
Page 2 GAO-03-662 Social Security Disability 

targeted exclusively for CDRs from fiscal year 1996 through 2002 to 

eliminate the CDR backlog and conduct new CDRs as they became due.1

At the time beneficiaries enter the DI or SSI programs or continue their 

benefits following a CDR, state-based Disability Determination Services 

(DDS) determine beneficiaries’ due date for a CDR based on their 

potential for medical improvement. Beneficiaries classified as “medical 

improvement expected” are generally scheduled for a CDR within 6 to 

18 months, beneficiaries classified as “medical improvement possible” are 

scheduled once every 3 years, and beneficiaries classified as “medical 

improvement not expected” are scheduled once every 5 to 7 years. Once 

the date for a review arrives, SSA compiles information such as age, length 

of time on the rolls, and qualifying medical condition to determine if it 

would be cost-effective to complete the CDR based on information 

reported by the beneficiary on a mailed-out questionnaire (“mailer”). In 

instances where SSA determines it is best to examine the beneficiary in 

person, SSA sends the beneficiaries’ case file to the DDS for a full medical 

review. 

To reduce work disincentives and address some beneficiaries’ fear that 

any work activity could result in the termination of their benefits through 

a CDR, the Ticket to Work and Self-Sufficiency Program prohibits SSA 

from conducting CDRs for beneficiaries who are using a ticket. However, 

SSA has decided that it will not issue a ticket to beneficiaries who are 

expected to medically improve until their first CDR is completed. SSA 

believes these beneficiaries do not require assistance to return to work. 

But some disability advocates and policy experts believe that beneficiaries 

expected to medically improve could benefit from early ticket services 

and, therefore, should not be subject to restrictions on ticket issuance. 

 1

The Balanced Budget and Emergency Deficit Control Act of 1985, as amended, established 

statutory limits on federal government spending for fiscal year 1991 through 2002. The act 

created, among other provisions, annual adjustable dollar limits (spending caps) on 

discretionary spending funded through the regular appropriations process. The act, as 

amended, also required that SSA’s discretionary spending caps that existed through fiscal 

year 2002 be adjusted upward to account for appropriations targeted for CDRs. The 

Contract with America Advancement Act of 1996 authorized about $4.1 billion to be paid 

from the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust 

Fund to process CDRs in fiscal year 1996 through 2002. Hereafter, in this report, we refer to 

this funding mechanism authorized by the Balanced Budget and Emergency Deficit Control 

Act of 1985 as “CDR-targeted funding.” 
Page 3 GAO-03-662 Social Security Disability 

Given the importance of CDRs in ensuring program integrity and 

determining beneficiary eligibility for assistance under the ticket program, 

the Chairman of the Subcommittee on Social Security, House Committee 

on Ways and Means requested that we review the CDR process. In 

response, this report discusses: (1) what impact the expiration of targeted 

funding for CDR processing would have on SSA’s ability to remain current 

with the CDR caseload, and what level of funding would be needed over 

the next 5 years to keep the workload current; (2) what opportunities exist 

for SSA to improve the cost-effectiveness of the CDR process; and 

(3) whether SSA’s rationale for delaying return-to-work and vocational 

services under the ticket program for beneficiaries who are expected to 

medically improve is adequately supported by program experience. To 

answer these questions, we reviewed SSA documents, including the 

agency’s budget request and estimates of the cost and savings from 

conducting CDRs. Also, we surveyed 52 DDS directors to assess the 

potential effect of the expiration of CDR-targeted funding on DDS 

operations. Moreover, we analyzed SSA data on CDR outcomes, reviewed 

SSA-contracted studies of the CDR process, examined legislation, 

regulations, and SSA policy guidance related to CDRs and the ticket 

program, and interviewed SSA officials. We performed our work in 

accordance with generally accepted government auditing standards 

between August 2002 and May 2003. See appendix I for a more detailed 

description of our scope and methodology. 

With the expiration of CDR-targeted funds at the end of fiscal year 

2002, SSA is at risk of generating another CDR backlog; based on SSA’s 

cost and workload projections, it would cost a total of about $4 billion or 

more over the next 5 years to complete its CDR workload. However, most 

of the backlog expected to appear by the end of fiscal year 2003 will likely 

consist of SSI CDRs and, according to SSA officials, this makes the 

backlog less problematic than if it consisted mostly of DI cases. The 

expected shortfall is attributable to several factors. One factor was SSA’s 

decision to reduce the number of CDRs it processed pending fiscal year 

2003 funding decisions. Other factors relate to workload capacity and the 

lower priority given to CDRs relative to initial claims. In the years ahead, a 

CDR backlog could grow due to an expected increase in the number of 

initial claims as well as DDS’ potential difficulty with replacing the 

disability examiners who leave through retirement or attrition. If another 

large CDR backlog is generated, SSA is at risk of foregoing cost savings 

and compromising the integrity of its disability programs by paying 

benefits to disability beneficiaries who are no longer eligible to receive 

them. 

Results in Brief 
Page 4 GAO-03-662 Social Security Disability 

While SSA has taken a number of actions over the past decade to 

significantly improve the cost-effectiveness of the CDR process, 

opportunities remain for SSA to better use information in CDR decision 

making. In particular, SSA’s process for deciding when beneficiaries 

should undergo a CDR is not based on systematic analysis of available 

information, and likely results in some CDRs not being conducted at the 

optimal time. Also, SSA’s process for determining which method to use in 

conducting a CDR—mailer or full medical review—is not always based on 

the best available information. For example, SSA requires a full medical 

review for all beneficiaries who, upon entering the program, are expected 

to medically improve even if current information on certain of those 

beneficiaries indicates that improvement is unlikely and that the CDR 

would be better handled through a much less expensive mailer. In 

addition, SSA has not fully studied and pursued the use of medical 

treatment data on beneficiaries available from the Medicare and Medicaid 

programs despite the potential of these data to improve SSA’s decisions 

regarding whether to use a mailer or full medical review to complete a 

CDR. Finally, SSA continues to be hampered in its CDR decisions by 

missing or incomplete information on beneficiaries’ case history. While 

the exact magnitude of this problem is unknown, 72 percent of DDSs 

reported that missing or incomplete information hinders their ability to 

determine whether medical improvement has occurred, thereby making it 

difficult for SSA to cease benefits for some individuals who no longer meet 

eligibility standards. 

SSA’s rationale for delaying issuance of a ticket to beneficiaries expected 

to medically improve, based on the premise that they will regain their 

capacity to return to work without SSA assistance, is not well-supported 

by program experience. The majority of these beneficiaries—about 

94 percent—are not found to have medically improved upon completion of 

a CDR. As a result, some beneficiaries who might otherwise benefit from 

potentially valuable return-to-work assistance have to wait up to 3 years to 

access services through the ticket program. SSA has acknowledged the 

need to reexamine this policy, and agency officials have informed us that 

they are in the process of doing so. As SSA reexamines this policy, it will 

need to consider alternatives that better balance the agency’s program 

stewardship and return-to-work goals. 

This report contains recommendations for further improving the costeffectiveness of SSA’s CDR process. In its comments on a draft of this 

report, SSA agreed with our recommendations and said that our review 

represents a comprehensive and accurate assessment of SSA’s 

accomplishments in improving the CDR process as well as opportunities 
Page 5 GAO-03-662 Social Security Disability 

to improve the process. SSA also provided a number of technical 

comments, which we incorporated where appropriate. 

The DI and SSI programs are the two largest federal programs providing 

cash assistance to people with disabilities. Established in 1956, DI is an 

insurance program that provides monthly cash benefits to workers who 

are unable to work because of severe long-term disability. Workers who 

have worked long enough and recently enough are insured for coverage 

under the DI program. In addition to cash assistance, DI beneficiaries 

receive Medicare coverage after they have received cash benefits for 

24 months. In 2002, SSA paid about $60 billion to 5.5 million disabled 

workers, with average monthly cash benefits amounting to $834 per 

person.2

 DI cash benefits are paid from the Federal Disability Insurance 

Trust Fund.3

SSI, created in 1972, is a means-tested income assistance program that 

provides a financial safety net for disabled, blind, or aged individuals who 

have low income and limited resources. Unlike the DI program, SSI has no 

prior work requirement and no waiting period for cash or medical 

benefits. Eligible SSI applicants generally begin receiving cash benefits 

immediately upon entitlement and, in most cases, receipt of cash benefits 

makes them eligible for Medicaid benefits. In 2002, about 5.5 million 

people with disabilities received SSI benefits.4

 In the same year, federal SSI 

cash benefits paid to SSI beneficiaries with disabilities equaled $26 billion, 

 2

Included among these 5.5 million beneficiaries are about 1.2 million beneficiaries who 

were dually eligible for SSI benefits because of the low level of their income and resources. 

In 2002, the DI program also paid about $6 billion in cash benefits to about 1.7 million 

spouses and children of disabled workers. 

3

Most disabled Social Security beneficiaries are disabled insured workers who receive 

benefits through the DI program based on their own earnings record. However, as of 2002, 

about 952,000 Social Security disability beneficiaries were disabled surviving spouses and 

disabled adult children who qualified for disability benefits based on the earnings record of 

an insured spouse or parent. Many of these disabled surviving spouses and adult children 

receive their disability benefits through the Social Security Old-Age and Survivors 

Insurance (OASI) program, not the DI program. OASI disability benefits for disabled 

surviving spouses and disabled adult children are paid from the Old-Age and Survivors 

Trust Fund. To receive OASI disability benefits, surviving spouses and adult children must 

meet the DI program’s disability criteria, and they are also subject to the requirement for 

CDRs. For simplicity, our report refers to all disabled Social Security beneficiaries (in both 

DI and OASI) as “DI beneficiaries.” 

4

About 3.9 million of these individuals were working age adults aged 18 to 64. 

Background 
Page 6 GAO-03-662 Social Security Disability 

and average monthly federal SSI cash benefits amounted to about $398 per 

person. SSI cash benefits are paid from general tax revenues. 

The DI and SSI programs use the same statutory definition of disability. To 

meet the definition of disability under these programs, an individual must 

have a medically determinable physical or mental impairment that (1) has 

lasted or is expected to last at least 1 year or to result in death and 

(2) prevents the individual from engaging in substantial gainful activity 

(SGA). Individuals are considered to be engaged in SGA if they have 

countable earnings above a certain dollar level.5

 Moreover, 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. 

SSA contracts with state DDS agencies to determine whether applicants 

are disabled. 

To help ensure that only eligible beneficiaries remain on the rolls, SSA is 

required by law to conduct CDRs for all DI beneficiaries and some SSI 

disability recipients to determine whether they continue to meet the 

disability requirements of the law. In 1980, because of concerns about the 

effectiveness of the CDR process and growing disability rolls, the 

Congress enacted a law requiring that CDRs be conducted at least once 

every 3 years for all DI beneficiaries whose disabilities are not considered 

permanent and at intervals determined appropriate by SSA for DI 

beneficiaries whose impairments are considered permanent. SSA issued 

regulations in 1986 stating its policy of conducting CDRs for SSI disability 

beneficiaries with the same frequency as it conducts CDRs for DI 

beneficiaries. In 1994, the Congress established the first statutory 

requirement for SSI CDRs, requiring that CDRs be conducted for a 

relatively small proportion of SSI beneficiaries. Welfare reform legislation 

enacted in August 1996 focused on CDRs for SSI children.6

 This legislation 

required that SSA (1) conduct CDRs at least once every 3 years for SSI 

children under age 18 if their impairments are not considered permanent 

and for infants during their first year of life if they are receiving SSI 

benefits due to low birth weight and (2) review the cases of all SSI 

 5

For 2003, SSA considers countable earnings above $800 a month to be substantial gainful 

activity for persons who are not blind and above $1,330 a month for persons who are blind. 

6

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. L. No. 

104-193). 
Page 7 GAO-03-662 Social Security Disability 

children beginning on their 18th birthdays to determine whether they are 

eligible for disability benefits under adult disability criteria. The 

redeterminations for 18-year-olds are considered part of the CDR 

workload. 

At the time beneficiaries enter the DI or SSI programs, DDSs determine 

when beneficiaries will be due for CDRs on the basis of their potential for 

medical improvement. Based on SSA regulations, DDSs classify 

individuals into one of three medical improvement categories, called 

“diary categories”: “medical improvement expected” (MIE), “medical 

improvement possible” (MIP), or “medical improvement not expected” 

(MINE). Based on the diary categories, DDSs select a “diary date” for each 

beneficiary, which is the date that the beneficiary is scheduled to have a 

CDR. The diary date is generally within 6 to 18 months if the beneficiary is 

classified as MIE;7

 once every 3 years if classified as MIP; and once every 

5 to 7 years if classified as MINE. Upon completion of a CDR, DDSs 

reassess the medical improvement potential of beneficiaries who remain 

eligible for benefits to determine the most appropriate medical 

improvement category and time frame for conducting the next CDR. 

Beneficiaries classified as MIE are not eligible to receive Ticket to Work 

services until either the completion of their first CDR, or until they have 

received benefits for 3 years. 

While SSA uses diary categories to determine the timing of CDRs, it has 

developed another method, called profiling, to determine the most costeffective method of conducting a CDR. Profiling involves the application 

of statistical formulas that use data on beneficiary characteristics 

contained in SSA’s computerized records—such as age, impairment type, 

length of time on disability rolls, previous CDR activity, and reported 

earnings—to predict the likelihood of medical improvement and, 

therefore, of benefit cessation. For example, SSA found that the longer an 

individual is on the disability rolls, the less likely he or she is to have 

benefits terminated. In addition, once an individual undergoes a CDR, the 

chance that a new CDR will result in benefit termination is reduced 

substantially. Reported earnings, on the other hand, greatly increase the 

likelihood of termination. 

 7

Although SSA’s policy guidance indicates that CDRs for MIE beneficiaries should generally 

be scheduled at intervals of 6 to 18 months, the guidance provides DDS personnel with 

flexibility to establish a diary date for any time period between 6 and 36 months. 

CDR Process 
Page 8 GAO-03-662 Social Security Disability 

Through its profiling formulas, SSA assigns a “score” to beneficiaries 

indicating whether there is a high, medium, or low likelihood of medical 

improvement. In general, beneficiaries with a high score are referred for 

full medical reviews—an in-depth assessment of a beneficiaries’ medical 

and vocational status—while beneficiaries with lower scores are, at least 

initially, sent a questionnaire, known as a “mailer.”8

 The mailer consists of 

a short list of questions asking beneficiaries to report information on their 

medical conditions, treatments, and work activities. If beneficiaries’ 

responses to a mailer indicate possible improvement in medical condition 

or vocational status, SSA may refer these individuals for a full medical 

review. However, in most cases, SSA decides that a full medical review is 

not warranted and that benefits should be continued. 

In contrast to mailers, full medical reviews are labor intensive and 

expensive. These reviews generally involve the following steps: (1) SSA 

headquarters personnel determine that a CDR is due and notify the SSA 

processing center; (2) personnel at the processing center locate the 

beneficiary’s file and send it to the appropriate SSA field office; (3) field 

office personnel contact the beneficiary, conduct a lengthy interview, and 

send the file to the appropriate DDS; (4) the DDS requests medical records 

from the beneficiary’s physicians and other medical sources and, if these 

sources cannot provide sufficient evidence, schedules medical or 

psychological examinations with consulting physicians outside the DDS; 

and (5) a DDS team, consisting of a disability examiner and a physician or 

psychologist, determines whether the beneficiary continues to meet SSA 

disability criteria. 

As of fiscal year 1996, about 4.3 million CDRs were due or overdue. In 

response, SSA and the Congress focused on providing funding to conduct 

overdue CDRs and new CDRs as they became due. SSA developed a plan 

for a 7-year initiative to conduct about 8.2 million CDRs during fiscal years 

1996 through 2002. In the Contract with America Advancement Act of 

1996 (Pub. L. No. 104-121), the Congress authorized a total of about 

$4.1 billion to fund the 7-year CDR plan.9

 In addition, The Personal 

 8

While SSA uses mailers primarily for beneficiaries with low profile scores, the agency has 

recently expanded its use of mailers to some beneficiaries with medium and high profile 

scores. 

9

The act also required that SSA report to the Congress annually for fiscal years 1996 - 2002 

on its CDR activities, including the estimated savings resulting from CDRs. 

CDR Backlog 
Page 9 GAO-03-662 Social Security Disability 

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

No. 104-193) required SSA to conduct CDRs on several beneficiary groups, 

such as low birth weight babies and authorized an additional $250 million 

for CDRs in fiscal years 1997 and 1998. The actual amount appropriated 

during the 7-year period, about $3.68 billion, was less than the amount 

authorized in 1996. 

SSA reported to the Congress in its fiscal year 2000 CDR report that in that 

year, the agency became current with the backlog of CDRs for all DI 

beneficiaries. SSA officials indicated to us that although they are in the 

midst of preparing the final statistics for its fiscal year 2002 CDR report, it 

became current with the backlog of CDRs for all SSI beneficiaries by the 

end of fiscal year 2002. 

Since first implementing the profiling and mailer processes in the early 

1990s, SSA has continued its efforts to improve the cost-effectiveness of 

the CDR process. Most notably, SSA has refined the statistical formulas 

used in profiling to identify which method—mailer or full medical 

review—should be used to conduct the CDR. According to SSA officials 

and studies of the profiling process, these improvements have led to some 

beneficiaries receiving a mailer who otherwise would have received a full 

medical review, thereby allowing SSA to reduce the overall cost of the 

CDR process. Conversely, by improving SSA’s ability to identify 

beneficiaries who are likely to medically improve, these refinements have 

also helped the agency better ensure that it is conducting full medical 

reviews—and ceasing benefits—when appropriate.10 In addition to 

improvements in its profiling process, SSA has also implemented other 

CDR process improvements such as introducing an automated review of 

mailers. 

 10According to SSA’s study of its profiling model, the agency’s recent improvements in 

statistical profiling have resulted in hundreds of millions of dollars in annual savings from 

being better able to identify and cease the benefits of individuals who have a relatively high 

likelihood of medical improvement. 

CDR Cost-Effectiveness 
Page 10 GAO-03-662 Social Security Disability 

In the midst of its first year following the cessation of CDR-targeted funds, 

SSA appears to be developing another CDR backlog; the agency estimates 

it will cost several billion dollars in total over the next 5 years to keep its 

workload current. By the end of fiscal year 2003, on the basis of SSA’s 

current projections, the agency will likely face a backlog of 200,000 CDRs, 

though the characteristics of the backlog may mitigate its negative effects. 

SSA attributes the mounting backlog to the management decisions it made 

at the beginning of the fiscal year during budget deliberations, as well as 

the need to process a larger than expected workload of initial disability 

applications. SSA has estimated that it will need a total of about $4 billion 

to process its projected CDR workload over the next 5 years. However, 

SSA’s updated estimate, expected to be available later this year, will likely 

show a higher cost as the disability rolls continue to expand. Aside from 

funding issues, DDSs reported that challenges associated with processing 

initial disability applications and maintaining enough disability examiners 

could jeopardize their ability to stay current with the CDR workload over 

the next few years. If another large CDR backlog is generated, SSA is at 

risk of foregoing cost-savings, thereby compromising the integrity of its 

disability programs as a result of paying benefits to disability beneficiaries 

who are no longer eligible to receive them. 

At the end of March 2003—six months after the expiration of separate 

authorized CDR funding—SSA was on a pace to generate a CDR backlog 

by the end of the current fiscal year. However, most of the backlogged 

claims will consist of SSI CDRs, which may make the backlog less 

problematic than it otherwise would have been because, among other 

reasons, SSI CDRs have lower long-term savings than DI CDRs. In its fiscal 

year 2003 budget justification, SSA indicated that it needed to process 

about 1.38 million CDRs during fiscal year 2003 to stay current with its 

CDR workload. Yet, SSA expects to process a total of 1.18 million CDRs, if 

not more, by the end of the fiscal year.11 By the end of March 2003—the 

midpoint of the fiscal year—SSA had processed about 539,000 CDRs. To 

reach the 1.18 million end-year revised total, SSA will need to process 

CDRs during the second half of the fiscal year at a pace similar to that 

 11On May 14, 2003, SSA released its revised final performance plan for fiscal year 

2003. The plan projects that SSA will process 1,129,000 CDRs during fiscal year 2003. SSA 

also expects to process an additional 20,000 CDRs initiated for reasons other than 

maturation of the scheduled diary date (e.g., a third party reports that the individual may 

no longer be disabled). 

End of Targeted 

Funding and Other 

Issues Could 

Contribute to Another 

Backlog, Threatening 

Cost Savings 

CDR Backlog Likely to 

Reemerge, Though Its 

Characteristics May 

Minimize Negative Effects 
Page 11 GAO-03-662 Social Security Disability 

achieved during the first 6 months of the fiscal year.12 Nevertheless, while 

it appears that SSA should be able to achieve this outcome, by the end of 

fiscal year 2003, it will have accumulated a backlog of 200,000 CDRs. 

SSA officials attributed the delay in obtaining a fiscal year 2003 budget as 

the main factor in hampering their ability to conduct all of the planned 

CDRs for the fiscal year.13 Because of the uncertainty surrounding the 

agency’s funding level, SSA reduced the number of CDRs it sent to DDS 

officials for processing as well as froze DDS hiring and overtime pay. SSA 

officials told us that they took these actions because they were concerned 

that the fiscal year 2003 appropriations would not support CDR activity at 

the fiscal year 2002 level. SSA officials recognize that a hiring freeze can 

have a longer-term impact because it disrupts the normal replacement of 

disability examiners lost through attrition. SSA officials explained that 

disability examiners generally do not increase overall productivity when 

first hired. In fact, new disability examiners could initially decrease 

productivity because experienced examiners may devote some of their 

time to training these new examiners. SSA officials noted that it generally 

takes 1 to 2 years before disability examiners become proficient. 

SSA’s management strategy to cut back on the number of CDRs it 

processed during the delays to the extended fiscal year 2003 budget 

process reflects the agency’s higher priority for processing of initial 

applications for disability benefits. Specifically, while SSA cut back on the 

number of CDRs, no similar action was reported with DI and SSI initial 

eligibility decision making. SSA officials indicated that the application rate 

for disability benefits increased during the beginning months of fiscal year 

2003, further affecting its ability to stay current with CDRs. SSA officials 

told us that although SSA sets a goal to process all CDRs and initial 

applications, initial eligibility decisions are given the highest priority. 

Officials said that, due to political pressure, getting disability benefits to 

people in a timely manner is emphasized over reviewing whether current 

beneficiaries remain eligible for benefits. DDSs, likewise, place a greater 

priority on processing initial applications. Three-fourths (75 percent) of 

 12SSA indicated that 710,000 CDRs had been processed nearing the end of April 2003. This 

year-to-date completion rate positions SSA to complete all 1.18 million CDRs. 

13The federal government had operated under a series of continuing resolutions from the 

beginning of the fiscal year through February 20, 2003. A continuing resolution is legislation 

that may be enacted to provide budget authority for agencies to continue in operation 

when the Congress and the President have not completed action on appropriations by the 

beginning of the fiscal year. 
Page 12 GAO-03-662 Social Security Disability 

directors said processing initial disability claims were a top priority 

relative to CDRs, whereas far fewer directors (23 percent) said that 

processing initial claims and CDRs were equal priorities. 

SSA has recently proposed an approach to avoid this competition between 

CDRs and initial claims. Specifically, in SSA’s fiscal year 2004 budget 

request, the Commissioner requested that almost $1.5 billion be earmarked 

for three activities that could provide a return on investment—CDRs, SSI 

nondisability redeterminations,14 and overpayment workloads. While we 

did not review the sufficiency of the level of this request, the earmarking 

of funds for activities such as CDRs could help SSA keep current with 

these activities. For example, if the number of initial applications for 

disability benefits continues to increase over the next several years, 

holding apart the necessary funds for CDRs could be a prudent measure. 

SSA has indicated in its annual CDR reports, as well as in its performance 

and accountability report, that its ability to complete all CDRs as they 

become due in the future is dependent upon adequate funding. In 

2000, SSA estimated that a total of about $4 billion was needed to process 

the CDR workload during the 5-year period between fiscal year 2004 and 

2008 (see table 1). SSA based these “rough estimates” on cost and 

workload projections available at that time. SSA expects to release 

updated workload and cost projections in the summer of 2003. While the 

estimates made in 2000 are not inconsistent with recent years’ authorized 

CDR funding levels, they rely upon assumptions that may change in the 

years ahead. For instance, the updated numbers for the fiscal year 2004 to 

2008 period will likely be higher than the past estimate for this time period 

because of the recent growth in the disability rolls. 

 14To determine whether beneficiaries remain financially eligible for SSI benefits after the 

initial assessment, SSA conducts nondisability redeterminations to verify eligibility factors 

such as income, resources, and living arrangements. Beneficiaries are reviewed at least 

once every 6 years, but reviews may be more frequent if SSA determines that changes in 

eligibility are likely. 
Page 13 GAO-03-662 Social Security Disability 

Table 1: Estimated CDR Activities, Fiscal Years 2004-08 

Fiscal year 

CDRs to be 

processed during

year (in thousands)

CDR expenses 

(dollars in millions) 

Cessationsa

(in thousands)

2004 1,637 $716 61

2005 1,682 $729 59

2006 1,632 $787 61

2007 1,769 $896 65

2008 1,793 $857 62

Source: SSA’s Office of the Chief Actuary, May 2000 estimates. 

a

Estimated ultimate cessations after all appeals. 

Despite the likely reemergence of a CDR backlog, the characteristics of 

the backlog may mitigate its negative consequences. During fiscal year 

2003, SSA has focused on DI CDRs. SSA officials cite four reasons for this: 

(1) cessations of beneficiaries receiving DI benefits lead to higher savings 

than cessations of recipients receiving SSI benefits, (2) SSA desires to 

protect the DI trust fund, (3) legislation sets out a clearer mandate to 

complete CDRs on beneficiaries receiving DI benefits than for adult 

beneficiaries receiving SSI benefits, and (4) external auditors cite SSA for 

noncompliance with the law when SSA does not complete the required 

CDRs for DI beneficiaries. 

As a result, most of the backlog that is expected to reemerge by the end of 

fiscal year 2003 will likely consist of SSI CDRs and, according to SSA 

officials, this makes the backlog less problematic than if the backlog 

consisted of mostly DI cases. SSA maintains that not only do SSI adult 

CDRs result in lower long-term savings, but also the legislative mandate 

for conducting SSI CDRs is less prescriptive. Therefore, the negative 

effects of falling behind on SSI CDRs are less severe. 

Several of the issues that have contributed to the pending fiscal year 

2003 CDR backlog will also appear, in the views of DDS directors, in the 

future. First, nearly all directors expect to process a higher number of 

initial disability claims than in the past. Most DDS directors have a 

strategy in place to deal with this rising initial claims workload, but still 

expect increased initial claims to negatively affect their ability to process 

their CDR workload. Second, most directors expect to experience 

difficulties in maintaining an adequate level of staffing, caused by many 

examiners leaving and difficulties finding replacements. Most DDSs who 

anticipate facing these staffing challenges reported that they have 

DDS Directors Expressed 

Concerns about Their 

Ability to Meet Future 

CDR Workload 
Page 14 GAO-03-662 Social Security Disability 

strategies in place to manage them. Nevertheless, nearly all believe that 

these staffing issues will negatively impact their ability to stay current with 

their expected CDR workloads. Tables 2 and 3 provide more specific 

results. 

Table 2: DDS Directors’ Reported Likelihood, If Any, of Experiencing an Event That 

Jeopardizes Meeting CDR Workload During Fiscal Years 2004 and 2005 

Numbers in percent 

Event 

Not at all 

likely 

Somewhat 

likely

Very 

likely

Higher number of initial disability claims than in 

past (n=51) 2 35 63

State budget shortfalls causing constraints (e.g., 

personnel restrictions) (n=49) 25 29 47

Difficulties hiring disability 

examiners (n=51) 28 31 41

High turnover of disability examiners due to 

reasons other than retirement (n=51) 35 51 14

Large number of disability examiner retirements 

(n=51) 39 39 22

Source: GAO survey of DDS directors, February 2003. 
Page 15 GAO-03-662 Social Security Disability 

Table 3: Extent That DDSs Have a Strategy to Manage Anticipated Events and Likelihood That Events Will Have Negative 

Impact on Workload Processing During Fiscal Year 2004 and 2005 

 

Likelihood event will reportedly have a negative

impact on staying current with projected CDR 

workloads in fiscal year 2004 and 2005, even with

a strategy (in percentage) 

Event 

Percentage of DDSs 

anticipating event that 

have a strategy 

currently in place

Not at all likely 

or not sure 

Somewhat likely

or very likely

Higher number of initial disability claims than 

in past (n=50) 78 8 92

State budget shortfalls causing constraints 

(e.g., personnel restrictions) (n=37) 57 17a

 83a

Difficulties hiring disability 

Examiners (n=37) 70 8 92

High turnover of disability examiners due to 

reasons other than retirement (n=33) 79 3 97

Large number of disability examiner 

retirements (n=31) 81 3 97

Source: GAO survey of DDS directors, February 2003. 

a

Percentage based on 35 responses (2 of the 37 DDS directors did not indicate a response about the 

likelihood of the event having a negative impact on CDR workload). 

To the extent that funding, staffing, and other issues limit SSA’s ability to 

process its CDR workload, the full realization of CDR cost savings could 

be in jeopardy. SSA maintains that the return on investment from CDR 

activities is high. In fact, SSA’s most recent annual CDR report to the 

Congress summarizes its average CDR cost-effectiveness during fiscal year 

1996 to 2000 at about $11 returned for every $1 spent on CDRs.15 SSA has 

noted, however, that such rates of return are unlikely to be maintained 

because as SSA works down the backlog and beneficiaries come up for 

their second and third CDRs, the agency does not expect as many 

cessations and, therefore, the cost-benefit ratio could decline. 

 15SSA calculated its annual cost-effectiveness ratios by dividing the estimated present value 

of total lifetime benefits saved with respect to CDR cessations (including Old-Age, 

Survivors, and Disability Insurance, SSI, Medicare, and Medicaid savings) by the dollar 

amount spent on periodic CDRs in a given year. SSA points out that the ratios should be 

considered an approximation because, for example, costs do not include the costs of 

appeals processed after the end of a given year. However, SSA officials also noted that the 

administrative costs for CDRs in a given year include the costs of appeals of CDR 

cessations in prior years which are processed in that year. 

Cost Savings and Program 

Integrity Could Be 

Jeopardized If CDR 

Backlog Grows Again 
Page 16 GAO-03-662 Social Security Disability 

Since the Congress’ provision of dedicated CDR funding starting in fiscal 

year 1996, SSA has reported completing millions of CDRs that resulted in 

substantial long-term savings. Table 4 shows the number of CDRs 

processed annually between fiscal year 1996 and 2001, which ranged from 

about 500,000 to over 1.8 million. SSA has reported that these annual CDRs 

will lead to long-term savings ranging from about $2 billion to $5.2 billion.16

Table 4: Summary of SSA’s CDR Activities During Special Funding Period, Fiscal 

Years 1996-2002 

Fiscal year 

Number of 

CDRs 

processed

Estimated 

cessationsa

 

CDR Costs 

(dollars in 

millions)

10-year 

estimated 

savingsb

(dollars in 

millions)

1996 498,400 26,500 $208 $2,040

1997 690,478 49,700 $330 $3,555

1998 1,391,889 70,300 $462 $4,435

1999 1,703,414 87,300 $547 $5,185

2000 1,836,510 76,000 $609 $5,060

2001 1,730,572 63,600 $603 $4,245 

2002 SSA expects to report these data to the Congress in fall, 2003 

Source: SSA’s annual CDR reports submitted to the Congress, fiscal year 1996-2001. The law that authorized dedicated CDR funding 

for SSA between fiscal year 1996 and 2002 (Pub. L. No. 104-121) required SSA to report to Congress for each of those fiscal years 

specific information such as the amount spent on CDRs and the estimated savings that would result from the cessation of benefits. 

a

Estimated ultimate cessations after all appeals. 

b

Estimates of the reductions in benefit payments for the following programs: the Old-Age, Survivors, 

and Disability Insurance program; the SSI program; the two Medicare programs, Hospital Insurance 

and Supplemental Medical Insurance; and the Medicaid program. 

In addition to a favorable return on investment, SSA’s CDR activities help 

protect DI and SSI program integrity. Keeping current with the CDR 

workload can help build and retain public confidence that only qualified 

 16Although we did not independently verify these savings estimates, we discussed how SSA 

made its calculations and believe its approach is reasonable. To estimate long-term savings, 

SSA calculated the value of the reduction in both cash and medical insurance coverage that 

otherwise would have been provided to individuals whose benefits were ceased following 

the completion of a CDR. SSA factored in the effect of appealed cases: SSA did not count 

savings from those beneficiaries who were initially found ineligible for continued benefits 

but whose cessations were later successfully appealed. Moreover, SSA officials told us that 

to estimate savings over 10 years, they took into account the likelihood that some 

individuals whose benefits were ceased through a CDR would likely have left the disability 

rolls through death, retirement, and other reasons pertaining to eligibility. 
Page 17 GAO-03-662 Social Security Disability 

individuals are receiving disability benefits. In addition, it helps protect the 

programs’ fiscal integrity and allows SSA to meet its financial stewardship 

responsibilities. To the extent the agency falls behind in conducting CDRs, 

a CDR backlog undermines these positive outcomes. 

While SSA has taken a number of actions over the past decade to 

significantly improve the cost-effectiveness of the CDR process, 

opportunities remain for SSA to better use program information in CDR 

decision making. While DDS personnel study available information on 

beneficiaries to decide when they should undergo a CDR, they do not 

conduct a systematic analysis of this information. As a result, CDRs may 

not be conducted at the optimal time. Also, SSA’s process for determining 

what method to use for a CDR—mailer or full medical review—is not 

always based on the best information available. In addition, SSA has not 

fully studied and pursued the use of medical treatment data on 

beneficiaries available from the Medicare and Medicaid programs despite 

the potential of these data to improve SSA’s selection of the most 

appropriate CDR method. Finally, SSA continues to be hampered in its 

CDR decisions by missing or incomplete information on beneficiaries’ case 

history, which may prevent SSA from ceasing benefits for some individuals 

who no longer meet eligibility standards. 

While DDS personnel review available information on beneficiaries to 

establish a diary date indicating when beneficiaries should undergo a CDR, 

they do not conduct a systematic analysis of this information. Diary 

decisions are inherently complex because DDS personnel must assess a 

beneficiary’s likelihood of medical improvement and how such medical 

improvement will affect that person’s ability to work. Based on these 

judgments, beneficiaries are placed in a diary category indicating either 

that medical improvement is “expected,” “possible,” or “not expected.” 

DDS personnel then assign a diary date that corresponds with the diary 

category; the more likely a beneficiary is to medically improve, the earlier 

the diary date. 

Although SSA has established guidance for DDS personnel on diary date 

decisions, SSA officials told us that, ultimately, such decisions are difficult 

to make and are based on the judgment of the DDS staff. An SSA 

contracted study of the diary process found that this process is often 

subjective and that the setting of diary categories and dates is “almost an 

afterthought” once the case file is developed and a disability determination 

has been made. SSA’s study identified shortcomings in the diary date 

process. For example, most beneficiaries assigned to the diary category 

Further Opportunities 

Exist for SSA to 

Improve CDR CostEffectiveness 

Decisions on Timing of 

CDRs Are Not Based on 

Systematic Analysis of 

Available Information 
Page 18 GAO-03-662 Social Security Disability 

indicating they are expected to medically improve are not found to have 

improved when a CDR is conducted. Our analysis of SSA data indicates 

that between 1998 and 2002, only about 5 percent of beneficiaries in the 

MIE category17 were found to have medically improved to the point of 

being able to work again. 

SSA’s diary process study indicated that diary predictions of medical 

improvement could be substantially improved through the use of 

statistical modeling techniques similar to those used in the CDR profiling 

process that SSA uses to determine whether a mailer or a full medical 

review is needed. The study noted that this systematic, quantitative 

approach to assigning diary categories and dates would likely enhance 

disability program efficiency by reducing the number of CDRs that do not 

result in benefit cessation.18 Another benefit derived from a more 

systematic approach to diary categorization, according to SSA’s study, is 

improved integrity of the diary process. Such integrity improvements will 

result from more timely CDRs and from actual medical improvement rates 

that more closely correlate with the diary categories that SSA assigns to 

beneficiaries. For example, SSA’s study indicates that the actual medical 

improvement rate for beneficiaries assigned to the MIE diary category 

would increase to about 29 percent under this improved process. 

SSA officials told us that, in response to the diary study recommendations, 

the agency has begun to revise its diary process to introduce a more 

systematic approach to selecting a CDR date. In particular, SSA is 

developing a process that will use beneficiary data collected at the time of 

benefit application, such as impairment type and age, in a statistical 

formula to help determine when a CDR should be conducted. While this 

change is likely to result in some improvements in the timing of CDRs, the 

fundamental diary categorization process used by DDSs will remain the 

same. Despite the study’s findings and recommendations, SSA officials 

told us that they will not replace SSA’s current process for assigning diary 

categories with a statistical process because of what they believe would be 

significant costs involved in changing this system across DDSs. However, 

SSA’s study acknowledged the potential cost of implementing a new 

 17This figure includes all MIE beneficiaries—those who have already undergone a CDR as 

well as those who have not yet had a CDR. 

18The study recommended that DDSs continue to assign diary categories because this 

process is useful for indicating the severity of an impairment. The statistical formula would 

then factor in this DDS diary category in developing an ultimate diary determination. 
Page 19 GAO-03-662 Social Security Disability 

process in DDSs, and instead recommended that a revised diary process 

be centrally administered in order to avoid such high costs. The officials 

also said that such fundamental changes in the diary process would 

require a change in regulations. 

SSA’s process for determining what method to use for a CDR is not always 

based on the best information available. In the 1990s, SSA introduced a 

system that develops a “profile score” for each beneficiary. The profile 

score indicates the beneficiary’s likelihood for medical improvement 

based on a statistical analysis of beneficiary data. The purpose of the 

profile score is to allow SSA to determine whether it is more cost-effective 

to send a mailer or to conduct a full medical review. SSA’s own contracted 

studies indicate that profiling results provide the best available indication 

of whether a beneficiary is likely to medically improve. Nevertheless, for 

some beneficiaries, SSA continues to use the diary category that was 

judgmentally assigned by DDS personnel as the basis for their decision 

about whether to send a mailer or conduct a full medical review. 

SSA requires a full medical review for all beneficiaries whose diary 

category indicates that medical improvement is expected (MIE) and who 

have not yet undergone a CDR.19 This is the case even when the profile 

score indicates that improvement is unlikely. In fiscal year 2002, about 

14 percent of beneficiaries in the MIE diary category were assigned to the 

“low” profile category, which indicates that medical improvement is not 

likely. SSA officials acknowledged that their policy requiring full medical 

reviews for all beneficiaries in this diary category departs from their usual 

practice of using mailers for beneficiaries in the low profile category, but 

they believe that this policy is reasonable given that these beneficiaries are 

more likely to medically improve than those assigned to other diary 

categories. However, SSA’s data from 1998 to 2002 shows that most 

beneficiaries in this category—about 94 percent—do not medically 

improve to the point of being able to work. 

 19SSA applies a different process for MIE beneficiaries who have undergone one or more 

CDRs. These beneficiaries may receive a mailer if their CDR profile score indicates that 

they have a low likelihood of medical improvement. However, most beneficiaries assigned 

to the MIE category have not yet undergone a CDR; in fiscal year 2002, about 88 percent of 

all beneficiaries in this diary category had not had a CDR. When referring to MIE 

beneficiaries in the remainder of our discussion in this section, we are describing only 

those beneficiaries who have not yet had a CDR. 

SSA’s Process for 

Determining CDR Method 

Not Always Based on Best 

Information Available 
Page 20 GAO-03-662 Social Security Disability 

For other CDR cases, SSA may require that a mailer be sent even when the 

profile score indicates that conducting a full medical review would be 

most cost-effective. Specifically, SSA’s policy is to send a mailer to all 

beneficiaries who were assigned a diary category that indicates medical 

improvement is not expected (MINE),20 even if the profile score indicates a 

relatively high likelihood of medical improvement.21 Whether or not these 

beneficiaries subsequently receive a full medical review will be based on 

the results of their mailer. SSA officials said that MINE beneficiaries with a 

high profile score are more likely to receive a full medical review based on 

their mailer responses because SSA conducts a more stringent review of 

their mailer responses.22 However, it is not clear that sending mailers to 

beneficiaries in the high profile category is the most cost-effective 

approach. SSA studies of the mailer process have indicated that, while this 

process is effective, it does not provide the same assurance as full medical 

reviews that medical improvement will be identified. As a result, the use of 

mailers for beneficiaries whose profile scores indicate a high likelihood of 

improvement could result in SSA identifying fewer benefit cessations.23

SSA has not fully studied and pursued the use of medical treatment data 

on beneficiaries available from the Medicare and Medicaid programs 

despite the potential of these data to improve SSA’s decisions regarding 

whether to use a mailer or full medical review to complete a CDR. In 

2000, an SSA contracted study found that the use of Medicare data from 

the Center for Medicare and Medicaid Services (CMS)—such as data on 

hospital admissions and medical treatments—resulted in a significant 

improvement in SSA’s ability to assess potential medical improvement 

through CDR profiling. Based on these results, SSA, in fiscal year 2003, 

 20SSA officials told us that while it is their intention to do mailers for all MINE 

beneficiaries, they may be unable in some years to send mailers to all of these beneficiaries 

if their overall funding for mailers is insufficient. 

21In addition to sending mailers to high profile beneficiaries in the MINE diary category, 

SSA has recently begun to send mailers to some high profile beneficiaries in the MIP diary 

category. 

22SSA also sends mailers to medium profile beneficiaries in the MINE diary category. 

However, SSA has some evidence from its profiling studies indicating that issuing mailers 

to medium profile beneficiaries is likely to be cost-effective. No similar evidence exists 

regarding high profile beneficiaries. 

23Although a relatively small proportion of beneficiaries have their benefits ceased based 

on a CDR, the savings from these benefit cessations are substantial, as noted earlier in this 

report. 

SSA Has Not Fully Studied 

and Pursued the Use of 

Medical Treatment Data 

from Medicare and 

Medicaid 
Page 21 GAO-03-662 Social Security Disability 

implemented a process that uses CMS Medicare data in CDR profiling to 

determine if DI beneficiaries who are initially identified as candidates to 

receive a full medical review should instead receive mailers.24 SSA expects 

that this will result in administrative savings due to the reduced number of 

full medical reviews the agency must conduct. SSA has also initiated a 

study to assess whether CMS Medicaid data can be used in the same way 

to decide if SSI beneficiaries, scheduled to receive full medical reviews, 

could instead be sent mailers. 

But SSA’s efforts to obtain and use CMS Medicare or Medicaid data are 

incomplete because the data will only be used to reclassify full medical 

reviews to mailers but not to reclassify mailers to full medical reviews. 

SSA officials told us that they have no plans to pursue this additional use 

of the data because they believe their current profiling system is sufficient 

for identifying beneficiaries who have a low likelihood of medical 

improvement. While they agreed that the CMS data could potentially be 

useful for reclassifying mailers to full medical reviews, they noted that 

they would need to first study this particular use of the data and would 

need to develop another interagency agreement with CMS to authorize and 

obtain data for this purpose. Also, they said that any action to reclassify 

mailers to full medical reviews would require SSA to publish a Federal 

Register notice describing this action. 

SSA could potentially achieve substantial program savings from 

conducting additional full medical reviews in cases where CMS data 

indicate that beneficiaries originally identified as mailer candidates have a 

relatively high likelihood of medical improvement. Using CMS Medicare 

data for this purpose would be consistent with the results of an SSA study 

that recommended that these data be used whenever it improves the 

agency’s ability to accurately predict medical improvement. For example, 

the study noted that the CMS data would be useful for enhancing SSA’s 

profiling of beneficiaries with mental impairments, including those with a 

low likelihood of medical improvement for whom SSA would usually send 

a mailer. To the extent that CMS data improves SSA’s ability to identify 

beneficiaries for full medical review, the program savings from reduced 

 24SSA is using CMS Medicare data to reassess the prospects of medical improvement for 

beneficiaries who, based on their initial CDR profiling results, are considered to have a 

high or medium likelihood of medical improvement. Typically, SSA would conduct full 

medical reviews for these beneficiaries. However, SSA’s reassessment may indicate that 

some of these beneficiaries instead have a low likelihood of medical improvement and 

therefore should receive mailers. 
Page 22 GAO-03-662 Social Security Disability 

lifetime benefit payments to those beneficiaries whose benefits are ceased 

could easily exceed any increased administrative costs resulting from 

additional full medical reviews. 

SSA continues to be hampered in its CDR decisions by missing or 

incomplete information on beneficiaries’ case history, which may prevent 

SSA from ceasing benefits for some individuals who no longer qualify for 

benefits. To cease benefits based on a CDR, SSA must determine if the 

beneficiary has improved by comparing information about the 

beneficiary’s current condition to information from the agency’s previous 

decision regarding the beneficiary’s medical condition. This previous 

decision and the evidence supporting it are recorded by SSA and 

maintained in case folders that are usually stored in SSA records storage 

facilities. However, in conducting CDRs, DDSs sometimes have difficulty 

retrieving the case folders or the key medical evidence that is maintained 

in these folders. 

Without the information contained in case folders, DDSs cannot establish 

a comparison and, therefore, cannot determine if medical improvement 

has occurred. As a result, SSA is legally required to keep the beneficiary on 

the disability rolls even though the beneficiary may have been judged to no 

longer qualify for benefits had the DDS been able to establish a 

comparison. SSA’s inability to cease benefits in cases where folders are 

missing or incomplete could result in a substantial cost to the federal 

government arising from continued payments of benefits—cash and 

medical—to people who no longer meet eligibility standards.25

Our discussions with SSA officials, survey of DDSs, and review of SSA 

studies indicate that missing or incomplete folders present an obstacle to 

effective processing of CDRs. However, evidence on the extent of this 

problem is mixed. In responding to our survey on CDRs, about 72 percent 

of DDSs informed us that missing or incomplete information from case 

folders negatively impacted the quality or timing of CDR decisions to a 

moderate or great extent. An August 2002 study of missing or incomplete 

folders conducted by SSA’s Office of the Inspector General reported that 

DDSs, as well as other SSA components such as field offices, complained 

 25Missing or incomplete case folders may also result in additional administrative costs to 

the extent that SSA and DDS personnel spend time attempting to locate or reconstruct 

missing information. 

Missing or Incomplete 

Case Folders May Result in 

Fewer Benefit Cessations 
Page 23 GAO-03-662 Social Security Disability 

that a large proportion of cases were missing information.26 This study 

found that case folder retrieval is a significant problem for SSA. Among 

the problems identified were untimely receipt of case folders, nonreceipt 

of requested folders, and folders provided without necessary medical 

evidence. The report questioned SSA’s oversight of folder inventory and 

retrieval processes and recommended that SSA take various actions, such 

as independent quality assurance reviews, to improve management of case 

folders. A study contracted by SSA also identified problems with disability 

case folder management, such as misrouted or missing folders. The study 

noted that “inefficient folder management increases administrative and 

program costs and risks data integrity” and recommended that SSA 

“analyze the reasons for missing folders and provide recommendations for 

process and systems improvements.” 

SSA headquarters officials we spoke with said that SSA has examined the 

incidence of missing or incomplete case folders and found that the 

problem is not as significant as claimed by DDSs. For example, in fiscal 

year 2000, SSA investigated allegations of substantial numbers of missing 

case folders in two DDSs. SSA officials told us that they were able to 

locate many of the folders that had been reported as missing. The officials 

attribute the discrepancy between their findings and the allegations of 

DDSs, in part, to staff shortages and workload pressures at field offices, 

which result in a failure of these offices to take further steps to look for 

folders. However, our survey of DDSs indicates that regardless of SSA’s 

ability to locate many case folders upon further investigation, DDSs are 

still having difficulty obtaining the information they need to make CDR 

decisions. 

In a 2002 memorandum to SSA’s Inspector General, the SSA Commissioner 

acknowledged that missing or incomplete case folders are a problem in 

the CDR process, but noted that the problem had been overstated. The 

memorandum cited data indicating a lost folder rate of about 0.5 percent 

for DI CDRs and about 3 percent for SSI CDRs.27 The Commissioner also 

said that SSA had taken a number of actions in recent years to reduce the 

incidence of lost folders, such as issuance of additional guidance and 

training on this issue. In addition, the Commissioner noted that the agency 

 26Office of the Inspector General, Social Security Administration, Case Folder Storage and 

Retrieval at the Social Security Administration’s Megasite Records Center, A-04-99-62006 

(Washington, D.C., 2002). 

27Data are based on CDRs conducted from 1997 to 2001. 
Page 24 GAO-03-662 Social Security Disability 

was committed to building a system of electronic folders28 that will 

“virtually eliminate the incidences of lost folders.” While electronic folders 

may be a key initiative in resolving SSA’s problems with missing or 

incomplete case folders, SSA does not plan to fully implement this system 

until mid-2005.29 In addition, these electronic folders will be established 

only for new disability cases; cases established prior to implementation of 

electronic folders will remain in a paper format. Therefore, problems in 

handling these older case folders will likely continue. 

SSA’s rationale for postponing issuance of a ticket to beneficiaries 

expected to medically improve—those who are assigned an MIE diary 

category—is not well-supported by program experience. In issuing 

regulations implementing the ticket act, SSA decided to postpone issuance 

of tickets to MIE beneficiaries who have not yet had a CDR based on the 

premise that these beneficiaries could be expected to regain their capacity 

to work without SSA assistance.30 However, our analysis of SSA data 

indicates that the vast majority of MIE beneficiaries in the DI and SSI 

programs—about 94 percent—are not found to have medically improved 

upon completion of a CDR. As a result, some beneficiaries who might 

otherwise benefit from potentially valuable return-to-work assistance must 

wait up to 3 years to access services through the ticket program.31

Some disability advocacy groups and SSA’s own Ticket to Work and Work 

Incentives Advisory Panel have questioned SSA’s policy of delaying the 

 28SSA is currently developing a Disability Electronic Folder (EF) which, when completed, 

will be the repository of all information used in the disability process and should eventually 

replace the paper folders. As a result, processing components should not have to rely on a 

paper folder to take adjudicative actions. The EF is planned to be linked to all existing and 

future systems that support the disability case process. Information will be captured 

electronically during the case intake process and transmitted to the EF. Documentation 

and forms received from external sources (e.g., claimants, medical providers, third parties, 

etc.) will be converted to an electronic format (e.g., scanning and imaging) and added to 

the EF. Electronic documents received from medical providers will be indexed and added 

to the EF. 

29SSA plans to begin rollout of electronic disability folders in January 2004 and plans to 

achieve national implementation over an 18-month period. 

30The Ticket to Work Act gave the SSA Commissioner authority to determine which 

disabled beneficiaries would be eligible to participate in the ticket program. 

31SSA’s policy on ticket eligibility states that any MIE beneficiary who has been on the 

disability rolls for at least 3 years will be eligible for a ticket, even if they have not yet had a 

CDR. 

SSA’s Rationale for 

Postponing Return-toWork Services to 

Some Beneficiaries Is 

Not Well-Supported 

by Program 

Experience 
Page 25 GAO-03-662 Social Security Disability 

issuance of tickets to MIE beneficiaries. In particular, they have 

commented that delaying tickets to all MIE beneficiaries when only a 

small proportion of these beneficiaries return to work underscores the 

inherent weakness of relying upon the MIE category as a basis for granting 

access to ticket services. Furthermore, the ticket panel cited research 

indicating that the sooner a person with recent work history receives 

employment services, the more likely the person will be to return to work. 

In our prior work examining DI and SSI return-to-work policies, we also 

noted that delays in the provision of vocational rehabilitation services can 

diminish the effectiveness of such return-to-work efforts.32 Delaying 

services to some disability beneficiaries, therefore, undermines SSA’s 

recent efforts to increase its emphasis on helping these beneficiaries 

return to work. 

In publishing its final regulations implementing the ticket program,33 SSA 

wrote that many commenters on the draft regulations had indicated that 

the agency should provide tickets to all beneficiaries, regardless of their 

diary category. The commenters also referred to the MIE diary category as 

an “administrative convenience” that is “not a sufficiently precise tool to 

deny beneficiaries immediate access to a ticket.” In responding to these 

comments, SSA wrote that use of the MIE category to identify which 

beneficiaries should receive tickets “is the most administratively feasible 

approach currently available to us.” SSA acknowledged that it might be 

possible to improve the system for identifying such beneficiaries and 

wrote that it planned to conduct an evaluation to identify possible 

improvements. 

SSA officials told us that they are examining the current policy of issuing 

tickets to MIE beneficiaries to identify possible alternatives but they are 

not sure when this assessment will be completed.34 However, they noted 

that their policy of limiting ticket issuance reflects congressional interests 

in striking an appropriate balance between program stewardship and 

 32U.S. General Accounting Office, SSA Disability: Program Redesign Necessary to 

Encourage Return to Work, GAO/HEHS-96-62 (Washington, D.C.: Apr. 24, 1996). 

3366 Fed. Reg. 67370, Dec. 28, 2001. 

34In May 2003, SSA announced in the Federal Register (Social Security Administration: 

Semiannual Regulatory Agenda, 68 Fed. Reg. 31240, May 27, 2003) that its long-term plans 

include a proposal to revise its rules to allow the immediate issuance of tickets to MIE 

beneficiaries. However, SSA’s Associate Commissioner responsible for reviewing the ticket 

policy for MIEs told us that SSA has not made a final decision regarding any changes to the 

current policy and that the agency’s review has not been completed. 
Page 26 GAO-03-662 Social Security Disability 

encouraging return to work. Moreover, they explained that reversing the 

current policy would be costly. SSA’s actuaries have estimated that issuing 

tickets to all MIE beneficiaries would cost an additional $822 million over 

10 years because the ticket law prohibits SSA from conducting CDRs on 

beneficiaries who are using a ticket. Therefore, SSA would continue to pay 

DI and SSI benefits to some beneficiaries who might have otherwise had 

their benefits terminated. 

The drawbacks of SSA’s current policy of postponing issuance of tickets to 

MIE beneficiaries and the potential costs associated with an alternative 

policy that would allow immediate issuance of tickets to these 

beneficiaries highlights the need for SSA, as part of its policy 

reexamination, to consider other policy alternatives that might better 

balance the agency’s program stewardship and return-to-work objectives. 

While we did not conduct an in-depth assessment of potential alternatives 

to SSA’s current policy,35 our review of the CDR program and ticket 

provisions indicate that other options may exist that would achieve a 

better balance among SSA’s program objectives. For example, SSA could 

develop a better means of identifying beneficiaries who are expected to 

medically improve. Earlier in this report, we noted that an SSA-contracted 

study of the diary process recommended implementation of an improved 

system that, among other things, would better identify MIE beneficiaries 

through statistical modeling of diary decisions. One effect of such 

improved identification, according to the study, would be to substantially 

reduce the proportion of beneficiaries with an MIE diary category. For 

instance, the study found that although SSA, over the past decade, has 

assigned the MIE diary category to about 9 percent of DI beneficiaries, a 

statistically-based diary process would result in about 3 percent of DI 

beneficiaries being assigned to the MIE category. This would potentially 

minimize the number of beneficiaries initially denied tickets and may also 

provide more assurance, within and outside SSA, that such beneficiaries 

can truly be expected to improve. 

SSA might also consider an option that provides for the issuance of tickets 

to all MIE beneficiaries while allowing CDRs to be conducted as scheduled 

for these beneficiaries. This policy would require a legislative change 

because, as we noted earlier, the Ticket to Work Act currently prohibits 

 35Given the recent implementation of the ticket program, insufficient data were available 

during the period of our review to conduct the analysis necessary to fully evaluate such 

alternatives. 
Page 27 GAO-03-662 Social Security Disability 

SSA from conducting a CDR while a person is using a ticket.36 While the 

ticket program’s prohibition on CDRs for ticket users was intended to 

remove a potential disincentive for beneficiaries to return to work, MIE 

beneficiaries currently get neither a ticket nor protection from a CDR. A 

policy allowing CDRs to be conducted on these beneficiaries while they 

use a ticket would at least give these beneficiaries immediate access to 

return-to-work services offered under the ticket program. In addition, SSA 

would still be able to achieve the cost savings that are derived from CDRs 

for beneficiaries that it considers most likely to medically improve. 

Failure to cost effectively process CDRs as they become due could 

negatively affect DI and SSI program integrity. SSA and DDSs are to be 

commended for bringing the CDR workload current as of the end of 

2002. SSA is also to be commended for the improvements it has made in 

the CDR process. However, a confluence of events, such as the expiration 

of targeted CDR funding and an increase in initial applications, is 

increasing the chances of a CDR backlog recurring, which could result in 

SSA paying out billions of dollars in the long term to beneficiaries who no 

longer qualify for benefits. In its fiscal year 2004 budget request, SSA has 

asked the Congress for targeted funding for several program activities, 

including CDRs, that provide a return on investment. If approved, the 

targeted funding could increase SSA’s chances of staying current with its 

CDR workload because this workload would not have to compete 

internally for funding with the initial determination workload. 

While SSA has taken a number of steps to improve the CDR process, it has 

not taken advantage of other opportunities that could further improve the 

cost-effectiveness of this process and its ability to stay current. In 

particular, although a more systematic and quantitative process for 

assigning diary categories and dates would likely improve the timing of 

CDRs, SSA does not intend to make comprehensive revisions to the diary 

process based on this more rigorous approach. In addition, despite SSA’s 

reliance on profiling formulas to improve the agency’s ability to predict 

medical improvement and benefit cessation, SSA is ignoring or not giving 

full consideration to information from these formulas in its decisions to 

conduct mailers or full medical reviews for some beneficiaries. Also, 

although SSA acknowledges that medical treatment data from Medicare 

and, possibly, Medicaid improve the agency’s ability to determine when a 

 36However, the prohibition on CDRs for all other ticket users could remain in effect. 

Conclusions 
Page 28 GAO-03-662 Social Security Disability 

mailer should be used, it does not see a need to consider the use of these 

data to help determine when a full medical review might be preferable. 

Furthermore, despite long-standing concerns, SSA has not fully addressed 

the problem of missing or incomplete case folders, which limits SSA’s 

ability to achieve cost savings through the CDR process. 

Finally, SSA’s initial assessments of which beneficiaries are most likely to 

improve are not very accurate and, therefore, may not be the most 

appropriate criteria to use for delaying beneficiary access to a ticket for 

return-to-work services. The ticket program is relatively new so little 

program information is available for SSA to draw upon in reexamining its 

current policy on ticket access for beneficiaries most likely to improve. 

SSA has the challenge of developing a policy that will make return-to-work 

assistance available to beneficiaries at the appropriate time while 

providing adequate mechanisms for ensuring program integrity. 

To further improve the cost-effectiveness of the CDR process, we 

recommend that the Commissioner of SSA take the following actions: 

• Pursue more comprehensive enhancements of the CDR diary process—

beyond those already being considered—to ensure that the full benefits of 

a more systematic, quantitative approach to diary setting are attained. 

Among such key enhancements would be the use of a statistical approach 

to determine diary categories. Given the significant implications of such 

changes for the DI and SSI programs, SSA could consider pilot testing the 

revised diary process before fully implementing it. 

• Given the cost-effectiveness of conducting mailers in cases where there is 

a low likelihood for benefit cessation, revise SSA’s policy to allow mailers 

to be sent whenever appropriate—as indicated by the profiling scores—to 

beneficiaries with a diary category indicating that they are expected to 

medically improve. For beneficiaries assigned to a diary category 

indicating that they are not expected to medically improve, SSA should 

conduct a thorough analysis of its current policy, which allows mailers to 

be used for all of these beneficiaries regardless of their profile scores. 

SSA’s analysis should evaluate the overall cost-effectiveness of this policy, 

taking into account both the potential reduction in administrative costs 

from conducting fewer full medical reviews and the potential increase in 

benefit payments from reduced cessations. If this analysis indicates that 

the current policy results in higher overall costs for SSA’s disability 

programs, SSA should revise the policy to make it consistent with the 

agency’s general profiling approach—which prescribes the use of full 

Recommendations to 

the Commissioner of 

SSA 
Page 29 GAO-03-662 Social Security Disability 

medical reviews in cases where profiling indicates that a beneficiary has a 

relatively high likelihood of medical improvement. 

• Study the use of Medicare and Medicaid data for the purpose of deciding 

whether to use a full medical review in conducting a CDR for beneficiaries 

who would otherwise receive a mailer. If found to be cost-effective, SSA 

should incorporate Medicare and Medicaid data into its CDR process for 

this purpose. 

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

recommendations. SSA noted that our review represents a comprehensive 

and accurate assessment of SSA’s accomplishments in improving the CDR 

process as well as opportunities to improve the process. While agreeing 

with each of our recommendations, SSA supplied additional information 

describing its current or planned actions and the basis for such actions. 

With regard to our recommendation that SSA pursue more comprehensive 

enhancements of its diary process, SSA said that it is currently studying 

recommendations made by its contractor regarding the establishment of a 

statistically-based diary process and that SSA staff will be meeting in the 

near future to explore implementation options. However, SSA noted it has 

not yet made a decision regarding implementation. 

Regarding our recommendation that SSA revise its policies for 

determining what method to use for a CDR—mailer or full medical 

review—SSA said that while it generally agreed with our recommendation, 

it believes we were overly harsh in stating that it is not making the best 

use of available information. SSA noted that its policy for allowing mailers 

to be used for all MINE beneficiaries supplements information produced 

through profiling, thereby improving the process for selecting a CDR 

method. SSA said that this policy is based on evaluation and analysis of 

several thousand similar cases and noted that it will verify the costeffectiveness of this policy through its ongoing integrity reviews. We 

continue to believe that any departure from SSA’s analytically-based 

process for using profiling scores to select a CDR method should be based 

on sound analysis indicating that an alternative process would result in 

improved cost-effectiveness. We, therefore, are encouraged by SSA’s plans 

to evaluate the cost-effectiveness of its current policy. However, it is not 

Agency Comments 

and Our Evaluation 
Page 30 GAO-03-662 Social Security Disability 

clear that SSA’s integrity reviews37 will be adequate for assessing the costeffectiveness of the agency’s mailer policy for MINE beneficiaries due to 

the potential limitations of these reviews. For example, an SSA-contracted 

study identified several problems with the integrity reviews that SSA 

conducts for beneficiaries in the low profile category, such as the drawing 

of integrity samples that are not consistently representative of the mailer 

population. To the extent that such problems remain unresolved, SSA may 

need to develop an alternative means of evaluating its mailer policy for 

MINE beneficiaries. 

With regard to our recommendation on the use of Medicare and Medicaid 

data for deciding whether to use a full medical review for beneficiaries 

who would have otherwise received a mailer, SSA said that it intends to 

contract for such a study in fiscal year 2004 if funding is available. SSA 

noted that if the concept is found to be feasible, it will develop a pilot for 

this approach. 

SSA also provided additional comments intended to update or clarify some 

information we provide in this report. In particular, SSA noted that, due to 

its efforts to keep as current as possible, it believes its CDR backlog by the 

end of fiscal year 2003 will be significantly less than the potential backlog 

of 200,000 CDRs that we cited. While there is always a certain degree of 

imprecision associated with any projection, our backlog figure is based on 

the best information that was available during our review. We developed 

our potential backlog figure based on extensive discussions with SSA 

officials and reviews of SSA’s CDR workload and budget projections. SSA 

did not provide us with any revised official estimates or analyses that 

would have led us to revise the CDR backlog figure we report. 

In addition, SSA said that our report implies that it does not take seriously 

the shortfall in completing CDRs for the SSI program. SSA is apparently 

referring to our discussion of the CDR backlog where we note that most of 

the backlog that is expected to develop by the end of fiscal year 2003 will 

consist of SSI CDRs, which may make the backlog less problematic than it 

otherwise would have been because, among other reasons, SSI CDR 

cessations have lower long-term savings than DI CDR cessations. We did 

not intend to imply that SSA does not take the SSI backlog seriously. 

 37Each year, SSA conducts integrity reviews in which it selects samples of beneficiaries to 

whom mailers were sent and sends these cases to DDSs for full medical reviews. The 

results of these full medical reviews are intended to provide a basis for assessing the 

reliability of using results from profiling formulas to identify appropriate mailer recipients. 
Page 31 GAO-03-662 Social Security Disability 

Rather, we included this information to more accurately characterize the 

nature of the potential backlog because that could provide important 

insights as to how to deal with it. 

Finally, SSA said that although our survey of DDS directors indicates that 

attrition among disability examiners is an issue for DDSs, SSA and DDSs 

are accustomed to dealing with such issues and DDSs are still able to 

complete their workloads. Although we are aware that DDSs regularly 

confront multiple challenges to completing their disability program 

workloads, we cannot ignore the clear implications of DDS directors’ 

answers to our survey questions. Given that a clear majority of DDS 

directors indicated that disability examiner attrition is somewhat or very 

likely to jeopardize their ability to complete their CDR workload, we 

believe that it is important for us to identify this issue as a potentially 

significant factor in the possible development of a CDR backlog in the 

years ahead. 

SSA’s comments appear in appendix II. SSA also provided additional 

technical comments that we have incorporated in the report, as 

appropriate. 

Copies of this report are being sent to the Commissioner of SSA, 

appropriate congressional committees, and other interested parties. The 

report is also available at no charge on GAO’s Web site at 

http://www.gao.gov. If you have any questions about this report, please 

contact me at (202) 512-7215. Other contacts and staff acknowledgments 

are listed in appendix III. 

Sincerely yours, 

Robert E. Robertson 

Director, Education, Workforce, 

 and Income Security Issues 
Appendix I: Scope and Methodology 

Page 32 GAO-03-662 Social Security Disability 

To evaluate the impact of the expiration of separate funding for continuing 

disability review (CDR) processing and the level of funding needed to 

remain current with the CDR caseload, we interviewed Social Security 

Administration (SSA) officials from the Office of Budget, the Office of the 

Chief Actuary, the Office of Disability and Income Security Programs at 

SSA headquarters in Baltimore. We also reviewed SSA documents, 

including the agency’s budget request and estimates of the cost and 

savings from conducting CDRs. In addition, we surveyed Disability 

Determination Services (DDS) directors to assess the potential effect of 

the expiration of special CDR funding on DDS operations. To develop the 

survey, we identified information that would help us address the research 

questions. We generated specific survey items by reviewing SSA CDR 

reports submitted annually to the Congress and drawing upon interviews 

we conducted early in the assignment with SSA officials and the National 

Association of Disability Examiners. We validated our survey instrument 

by obtaining feedback from SSA officials and pretesting it with several 

current DDS directors. 

In consultation with SSA, we excluded 2 of the 54 DDSs from our survey 

as well as the federal DDS. The two DDSs excluded were Guam and South 

Carolina’s DDS serving persons who are blind–both relatively small DDSs 

that are run by one person. We excluded the federal DDS because 

responses from this site might skew results as the site (1) is a federal 

entity and as such it is “different” than other DDSs, (2) is used to process 

the overflow of CDRs, and (3) serves as SSA’s test unit. The remaining 

52 DDSs (essentially 1 for each of the 50 states, plus the District of 

Columbia and Puerto Rico) comprised the study universe. All 52 of these 

DDSs responded to our survey. 

To assess the opportunities for SSA to improve CDR cost-effectiveness 

and to examine SSA’s rationale for delaying return-to-work services to 

some beneficiaries under the ticket to work program, we interviewed SSA 

officials from the Office of Disability and Income Security Programs and 

the Office of the Chief Actuary at SSA headquarters in Baltimore. We also 

reviewed legislation, regulations, and SSA policy guidance related to the 

CDR and the ticket programs. In addition, we examined various studies 

and reports on the CDR and ticket to work programs, including reports 

from SSA’s Office of the Inspector General and a wide range of contractorproduced reports analyzing the cost-effectiveness of the CDR process. 

Finally, we analyzed data from SSA on the number of adult DI and SSI 

beneficiaries, aged 19-64, assigned to various CDR diary and profiling 

categories and the CDR outcomes—cessation or continuance—for these 

beneficiaries. These data were derived from SSA administrative data sets 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 33 GAO-03-662 Social Security Disability 

used by the agency to select cases for review and to track the results of 

CDRs. We did not independently verify these data, but based on 

comparison to SSA’s previously published data, and discussion of minor 

discrepancies with SSA officials, we determined that they were sufficiently 

reliable for our purposes. We performed our work in accordance with 

generally accepted government auditing standards between August 

2002 and May 2003. 
Appendix II: Comments from the Social Security Administration 

Page 34 GAO-03-662 Social Security Disability 

Appendix II: Comments from the Social 

Security Administration 
Appendix II: Comments from the Social Security Administration 

Page 35 GAO-03-662 Social Security Disability 
Appendix II: Comments from the Social Security Administration 

Page 36 GAO-03-662 Social Security Disability 
Appendix II: Comments from the Social Security Administration 

Page 37 GAO-03-662 Social Security Disability 
Appendix III: GAO Contacts and Staff 

Acknowledgments 

Page 38 GAO-03-662 Social Security Disability 

Shelia D. Drake, Assistant Director (202) 512-7172 

Brett S. Fallavollita, Analyst-in-Charge (202) 512-8507 

The following individuals also made important contributions to this report: 

Mark Trapani, Melinda L. Cordero, and Corinna A. Nicolaou. 

Appendix III: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Staff 

Acknowledgments 

(130194) 
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