United States General Accounting Office

GAO Report to the Chairman, Special

Committee on Aging, U.S. Senate

July 1996 SSA DISABILITY

Return-to-Work

Strategies From Other

Systems May Improve

Federal Programs

G O A

years

1921 - 1996

GAO/HEHS-96-133

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-261785 

July 11, 1996

The Honorable William S. Cohen

Chairman

Special Committee on Aging

United States Senate

Dear Mr. Chairman:

This report responds to your request that we identify (1) key practices used in the private sector

to return disabled workers to the workplace and (2) examples of how other countries

implement return-to-work strategies for people with disabilities. Such information could assist

the Congress and the Social Security Administration as they explore ways to improve the

success of federal disability programs in returning people with disabilities to the workplace.

We will send copies of this report to the Commissioner of Social Security, the Secretary of

Education, the Secretary of Health and Human Services, and other interested parties. We will

also make copies available to others upon request.

Please contact me on (202) 512-7215 if you or your staff have any questions concerning this

report. Other GAO contacts and contributors to this report are listed in appendix VI.

Sincerely yours,

Jane L. Ross

Director, Income Security Issues
Executive Summary

The Social Security Administration (SSA) operates the Disability Insurance

(DI) and Supplemental Security Income (SSI) programs—the nation’s two

largest federal programs providing cash benefits to people with

disabilities. SSA data show that between 1985 and 1994, the number of

working-age people in these disability programs increased 59 percent,

from 4 million to 6.3 million. Such growth has raised concerns that are

compounded by the fact that less than half of 1 percent of DI beneficiaries

ever leave the disability rolls by returning to work. In a recent report, GAO

recommended that SSA place more emphasis on return-to-work efforts.1 If

an additional 1 percent of the 6.3 million beneficiaries were to leave SSA’s

disability rolls by returning to work, lifetime cash benefits would be

reduced by an estimated $2.9 billion.2

The magnitude of disability costs in the workplace has caused growing

concern in the private sector as well. As a result, businesses have begun

developing strategies to control costs by intervening early and

emphasizing measures to return people to work. By helping disabled

workers return to the workplace, businesses are able to reduce costs such

as disability benefit payments and disability insurance premiums. Also,

social insurance programs in other countries focus on return to work and

have implemented practices similar to those in the U.S. private sector.

The Chairman of the Senate Special Committee on Aging asked GAO to

report on ways to improve SSA’s return-to-work efforts. To develop this

information, GAO identified (1) key practices used in the U.S. private sector

to return disabled workers to the workplace and (2) examples of how

other countries implement return-to-work strategies for people with

disabilities (see chs. 2, 3, and 4). GAO surveyed individuals in the private

sector generally recognized as leaders in developing disability

management programs that focus on return-to-work efforts. GAO also did

an extensive review of the literature on disability management in the

private sector and on disability programs in other countries. To develop

further information from other countries, GAO interviewed officials in

Germany and Sweden because the disability programs in these countries

have return-to-work policies and practices that have been identified by the

U.S. private sector and other experts as being key to disability

management.

1

See SSA Disability: Program Redesign Necessary to Encourage Return to Work (GAO/HEHS-96-62,

Apr. 24, 1996). See also Disability Insurance: Broader Management Focus Needed to Better Control

Caseload (GAO/T-HEHS-95-164, May 23, 1995).

2

GAO estimate based upon SSA actuarial estimates.

Page 2 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

Background Working-age adults with disabilities may obtain cash benefits and

return-to-work services from a number of public and private programs.

After the onset of a disabling condition, a worker with a temporary work

incapacity may receive short-term cash benefits from an employer, private

insurer, or workers’ compensation program. When individuals cannot

return to work, their last resort is long-term cash benefits provided by

workers’ compensation, private disability insurance, and/or DI. For people

with disabilities who have low income and limited assets, long-term cash

benefits are available through SSI, regardless of their participation in the

labor force.

DI provides cash benefits to people with disabilities if they are covered

under Social Security and SSA determines they are unable to work at

gainful levels. After receiving DI benefits for 24 months, they become

eligible for Medicare. According to SSA data, in 1994, about 3.96 million

working-age people (aged 18 to 64) received DI benefits, which totaled

about $33.7 billion. Included in the 3.96 million DI beneficiaries are 671,000

people who also received SSI disability benefits because of their low

income and resources. SSI provides cash benefits for disabled, blind, and

aged individuals whose income and resources are below a specified

amount, and in most cases, SSI beneficiaries are eligible for Medicaid

coverage. In 1994, about 2.36 million blind and disabled working-age

people received SSI benefits only (and no DI benefits). Federal SSI benefits

paid to blind and disabled people in 1994 totaled $18.9 billion.3

To be considered disabled by either program, a person must be unable to

engage in substantial gainful activity because of any medically

determinable physical or mental impairment that can be expected to result

in death or that has lasted or can be expected to last 12 months or longer.

Once a person is on the disability rolls, the individual continues to receive

benefits until he or she dies, converts to Social Security retirement

benefits at age 65, or is determined by SSA to no longer meet the earnings

or medical eligibility requirements.

GAO’s April report documented weaknesses in the design and

implementation of DI and SSI program components that have limited SSA’s

ability to identify and expand beneficiaries’ productive capacities to

enable them to return to work. Eligibility requirements and the disability

determination process give applicants the incentive to focus on their

inabilities, not their abilities; beneficiaries receive little encouragement to

3

The $18.9 billion consists of SSI payments to blind and disabled individuals, regardless of age, and to

people eligible for both SSI and DI payments.

Page 3 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

use rehabilitation services; and work incentives offered by the programs

are difficult to understand and do not overcome the financial risk of

returning to work for many beneficiaries.

Results in Brief Return-to-work strategies and practices may hold the potential for

improving federal disability programs by helping people with disabilities

return to productive activity in the workplace and at the same time reduce

program costs. GAO’s analysis of practices advocated and implemented by

the private sector in the United States and by social insurance programs in

Germany and Sweden revealed three common strategies in the design of

their return-to-work programs:

• Intervene as soon as possible after an actual or potentially disabling event

to promote and facilitate return to work.

• Identify and provide necessary return-to-work assistance and manage

cases to achieve return-to-work goals.

• Structure cash and medical benefits to encourage people with disabilities

to return to work.

Disability managers emphasize that these return-to-work strategies are not

independent of each other but work most effectively when integrated into

a comprehensive return-to-work program. They spend money on

return-to-work efforts because they believe these efforts are sound

investments that reduce disability-related costs.

In comparison with the workers served by private sector programs, many

people with disabilities served by SSA have little or no work history or

current job skills. SSA also serves a population with a wide range of

disabilities that often may be more severe than the disabilities of the

average person served by private sector programs. Thus, SSA may face

greater difficulty in returning some of its clients to the workplace.

However, the experiences of Germany and Sweden show that

return-to-work strategies are applicable to a broad and diverse population

with a wide range of work histories, job skills, and disabilities. Although

SSA faces constraints in applying these strategies, there are opportunities

to better identify and provide the assistance that could enable more of

SSA’s clients to return to work. Even relatively small gains in

return-to-work successes offer the potential for significant savings in

program outlays.

Page 4 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

Principal Findings

Intervene Early to

Facilitate Return to Work

Advocates of early intervention believe that the longer an individual stays

away from work, the less likely the individual is to return to work.

Whether a person returns to work depends greatly on his or her personal

motivation. Long absences from the workplace are believed to lead to a

disability mindset—a condition of discouragement in which disabled

workers, believing they will not be able to return to work, lose the

motivation to try. Studies show that only one in two newly disabled

workers who remain out on disability 5 months or more will ever return to

work.

GAO’s work shows that to encourage disabled workers and help them

maintain motivation to work, return-to-work goals must be addressed

from the onset of an emerging disability; return-to-work services, including

medical and vocational rehabilitation services, should be provided at the

earliest appropriate time; and employers should maintain communication

with workers who are hospitalized or recovering at home.

Setting return-to-work goals soon after the onset of disability and

providing timely rehabilitation services are believed to be critical in

encouraging disabled workers to return to the workplace as soon as

possible. Contacting a hospitalized worker soon after an injury or illness

and then continuing to communicate with the worker recovering at home,

for instance, helps reassure the worker there is a job to return to and that

the employer is concerned about his or her recovery.

Rather than intervening early to facilitate return to work, the priority in

the DI and SSI programs is to determine the eligibility of applicants to

receive cash benefits, not to assess their return-to-work potential.

Furthermore, return-to-work potential generally is addressed, if at all, only

after benefits are awarded at the end of an often lengthy application

process.

Identify and Provide

Necessary Return-to-Work

Services and Manage Cases

By definition, disability management embodies a proactive approach to

controlling disability costs while helping disabled employees return to

work. This approach seeks to avoid unnecessary expenditures while

investing in services tailored to individual circumstances that help achieve

return-to-work goals for disabled workers. To do this, disability managers

Page 5 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

strive to provide appropriate return-to-work services, closely manage

cases when appropriate, provide transitional work opportunities, and

coordinate with medical service providers.

In an effort to provide appropriate services, disability managers GAO

interviewed strive to identify the individuals who are likely to be able to

return to work and then identify the specific services that are needed to

prepare each of those individuals. These disability managers believe that

each person should be functionally evaluated after his or her medical

condition stabilizes to assess potential for returning to work.

When appropriate, the disability managers GAO surveyed use case

management techniques to coordinate the identification, evaluation, and

delivery of disability-related services to individuals deemed to need such

services to return to work. Transitional work allows workers with

disabilities to ease back into the workplace in jobs that are less physically

or mentally demanding than their regular jobs.

Disability experts also stress the need to ensure that physicians and other

medical service providers understand the essential job functions of the

disabled worker. Without this understanding, the worker’s return to work

could be delayed unnecessarily. Also, if an employer is willing to provide

transitional work opportunities or other job accommodations, the treating

physician must be aware of and understand these accommodations.

SSA, however, does not focus on identifying services that could enable

individuals to return to the workplace. It does not functionally evaluate

most beneficiaries; instead, SSA relies predominantly on matching an

individual’s medical symptoms, signs, and diagnostic results to a listing of

impairments presumed to prevent work. Moreover, SSA’s contacts with

physicians are aimed at gathering medical evidence to determine work

incapacity, not functional ability and return-to-work potential.

Provide Incentives to

Engage in Return-to-Work

Efforts

Disability managers believe that a program’s incentive structure can affect

a disabled worker’s decision on whether to attempt to return to work. The

level of cash benefits paid to disabled workers can affect their attitude

toward returning to work because, if disability benefits are too generous,

they can create a disincentive for participating in return-to-work efforts.

Disability managers also believe that retention of employer-sponsored

medical benefits provides an incentive to return to work. Returning to

Page 6 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

work is the way that disabled workers in the private sector can best

ensure that they retain employer-sponsored medical benefits.

Although the structure of benefits plays a role in return-to-work decisions,

disability managers emphasized that well-structured incentives are not

sufficient in themselves to ensure a successful return-to-work program.

Incentives must be integrated with other return-to-work practices.

Disability managers also generally advocated including a contractual

requirement for cooperation with a return-to-work plan as a condition of

eligibility for benefits. They believe such a requirement helps motivate an

individual with a disability to try to return to work.

In contrast, the current design of cash and medical benefits in the DI and

SSI programs often presents more hindrances than incentives when

beneficiaries consider returning to work. The structure of cash benefits

can make it financially advantageous to remain on the disability rolls, and

studies report that DI and SSI beneficiaries fear losing their premium-free

Medicare or Medicaid benefits if they return to work.

Recommendation to

the Commissioner of

SSA

In line with placing greater emphasis on return to work, GAO recommends

that the Commissioner develop a comprehensive return-to-work strategy

that integrates, as appropriate, earlier intervention, earlier identification

and provision of necessary return-to-work assistance for applicants and

beneficiaries, and changes in the structure of cash and medical benefits.

The Commissioner should also identify legislative changes needed to

implement such a program.

Agency Comments In commenting on a draft of this report, SSA agreed much can be learned

from the return-to-work practices of the U.S. private sector and disability

programs in Germany and Sweden. SSA cited several initiatives, such as

expanding the pool of vocational rehabilitation service providers, as

evidence that it places a high priority on return to work. However, GAO

believes these steps, while in the right direction, do not constitute the

fundamental redirection of goals and practices necessary to move the

disability programs to a much greater emphasis on return to work. For

example, increasing the number of vocational rehabilitation providers

does not address the concern of earlier intervention.

SSA affirmed its interest in determining whether return-to-work strategies

from other systems could be useful in the agency’s attempts to improve

Page 7 GAO/HEHS-96-133 Return-to-Work Strategies
Executive Summary

return-to-work outcomes. SSA emphasized that for such efforts to be

fruitful, all players in the complex network of federal disability policy

development and program execution would need to be involved. GAO

agrees but believes SSA, as primary manager of the federal disability

programs and as the entity with fiduciary responsibility for the trust funds,

must take the lead in forging the partnerships and cooperation that will be

needed in these redesign efforts.

Page 8 GAO/HEHS-96-133 Return-to-Work Strategies
Page 9 GAO/HEHS-96-133 Return-to-Work Strategies
Contents

Executive Summary 2

Chapter 1 

Introduction

12

Magnitude of Disability Costs Has Turned Private Sector’s

Attention to Improving Return-to-Work Programs

13

SSA’s Return-to-Work Efforts Have Been Static 14

Private Sector Programs for Disabled Workers 20

Disability Programs in Germany and Sweden 22

Objectives, Scope, and Methodology 25

Chapter 2 

Early Intervention

Critical to Return to

Work

28

Address Return-to-Work Goals Early 29

Provide Return-to-Work Services at the Earliest Appropriate

Time

31

Maintain Communication With Disabled Workers 33

Chapter 3 

Identifying and

Providing

Return-to-Work

Services Effectively

35

Assess Return-to-Work Potential and Services Needed 35

Offer Transitional Work Opportunities 38

Use Case Management Techniques When Appropriate 40

Ensure That Medical Service Providers Understand Essential Job

Functions

41

Chapter 4 

Work Incentives

Facilitate Return to

Work

43

Structure Cash Benefits to Provide Return-to-Work Incentive 43

Maintain Medical Benefits for Disabled Employees Who Return to

Work

46

Require Cooperation With Return-to-Work Efforts 47

Chapter 5 

Conclusions,

Recommendation, and

Agency Comments

48

Recommendation to the Commissioner of SSA 49

Agency Comments 50

Appendixes Appendix I: Organizations Contacted During GAO’s Review of

U.S. Private Sector Disability Management Practices

52

Appendix II: Survey on Disability Management Practices 56

Page 10 GAO/HEHS-96-133 Return-to-Work Strategies
Contents

Appendix III: People and Organizations Contacted During GAO’s

Review of Social Insurance Disability Programs in Germany and

Sweden

64

Appendix IV: Five-Step Sequential Evaluation Process for

Determining DI and SSI Disability

68

Appendix V: Comments From the Social Security Administration

and Our Evaluation

70

Appendix VI: Major Contributors to This Report 78

Bibliography 79

Related GAO Products 88

Tables Table 2.1: Key Early Intervention Practices 28

Table 3.1: Key Practices in Identifying and Providing

Return-to-Work Services

35

Table 4.1: Key Practices for Providing Incentives to Return to

Work

43

Abbreviations

ADA Americans With Disabilities Act

CDR continuing disability review

DDS Disability Determination Service

DI Disability Insurance

HHS Department of Health and Human Services

RFC residual functional capacity

SGA substantial gainful activity

SSA Social Security Administration

SSI Supplemental Security Income

WBGH Washington Business Group on Health

Page 11 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

The Social Security Administration (SSA) operates the Disability Insurance

(DI) and Supplemental Security Income (SSI) programs—the nation’s two

largest federal programs providing cash benefits to people with

disabilities. From 1985 through 1994, the number of working-age DI and SSI

beneficiaries (aged 18 to 64) increased 59 percent, from 4.0 million to

6.3 million, and cash benefits (adjusted for inflation) increased 66 percent.4

This magnitude of growth has caused concerns that are compounded by

the fact that less than half of 1 percent of DI beneficiaries ever leave the

rolls by returning to work.

In our recent study of SSA’s disability programs, we reported that despite

the magnitude of program growth, SSA has not improved its emphasis and

efforts in returning disability beneficiaries to the workplace.5

 By contrast,

the private sector, in response to growth in disability, has begun

developing and implementing strategies to improve return-to-work

programs for disabled workers. Moreover, the emphasis on return to work

is not limited to the private sector in the United States—disability

programs financed by social insurance systems in other countries also

focus on return to work and have implemented practices similar to those

in the U.S. private sector.

This report focuses on identifying return-to-work practices in the private

sector and other countries that may hold lessons for improving SSA’s

return-to-work efforts. Improving SSA’s return-to-work efforts has

important implications not only for the individuals who can return to

productive activity in the workplace, but also for controlling the costs of

federal disability programs. SSA estimates that lifetime cash benefit

payments are reduced by about $60,000 when a DI beneficiary leaves the

rolls by returning to work and by about $30,000 when an SSI disability

beneficiary leaves the rolls by returning to work.6

4

According to SSA data, from 1985 through 1994, the number of working-age disabled beneficiaries

grew from 2.7 million to almost 4.0 million in the DI program and from 1.3 million to almost 2.4 million

in the SSI program. Furthermore, DI beneficiaries who also qualified for SSI benefits increased from

324,000 to 671,000. To avoid duplicative counting, such people are included in the DI data but not in

the SSI data. In 1994, working-age DI beneficiaries received $33.7 billion in DI payments; blind and

disabled beneficiaries (including those of all ages and those dually eligible for SSI and DI) received

$18.9 billion in federal SSI payments.

5

See SSA Disability: Program Redesign Necessary to Encourage Return to Work (GAO/HEHS-96-62,

Apr. 24, 1996). See also Disability Insurance: Broader Management Focus Needed to Better Control

Caseload (GAO/T-HEHS-95-164, May 23, 1995).

6

The estimated savings, provided by SSA’s actuarial staff, are based on fiscal year 1994 data and

represent the discounted present value of the cash benefits that would have been paid over a lifetime if

the individual had not left the disability rolls by returning to work.

Page 12 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

In comparison with the workers served by private sector programs, many

people with disabilities served by SSA have little or no work history or

current job skills. SSA also serves a population with a wide range of

disabilities that often may be more severe than the disabilities of the

average person served by private sector programs. For example, many

workers served by private sector programs have short-term disabilities,

which SSA’s programs do not cover. SSA serves people with long-term

disabilities, many of whom have not been successful in returning to work

through private sector programs. Thus, SSA may face greater difficulty in

returning some of its clients to the workplace.

However, the experiences of Germany and Sweden show that

return-to-work strategies are applicable to a population with a wide range

of work histories, job skills, and disabilities. Moreover, even relatively

small gains in return-to-work successes offer the potential for significant

savings in program outlays. For example, if an additional 1 percent of the

6.3 million beneficiaries were to leave SSA’s disability rolls by returning to

work, lifetime cash benefits would be reduced by an estimated $2.9 billion.7

Magnitude of

Disability Costs Has

Turned Private

Sector’s Attention to

Improving

Return-to-Work

Programs

The magnitude of disability costs has caused growing concern in the

private sector. Some disability-related costs borne by the private sector

are more obvious than others. The most apparent costs include insurance

premiums, cash benefits, rehabilitation benefits, and medical benefits paid

through workers’ compensation and employer-sponsored disability

insurance programs. Workers’ compensation laws require employers to

bear the cost of disabilities caused by an individual’s job, and some

employers offer short-term or long-term insurance or both for disabilities

not caused by the individual’s job. However, in addition to the costs of

such programs, there may be other, less obvious costs such as payments to

employees who must work overtime, the added expense of training and

using temporary workers, and retraining disabled employees when they

return to work. Taking such costs into account, studies have estimated

that the employer’s full cost of disability ranges from 6 to 12 percent of

payroll.8

7

GAO estimate based upon SSA actuarial estimates.

8

UNUM, Disability Management: Costs and Solutions (Portland, Me.: UNUM Corporation, July 1994), 

p. 23; and Phillip L. Polakoff and John S. Tortarolo, “The Future of Disability Management Is ...

Integration,” Washington Business Group on Health, 1994 National Disability Management Conference

(Washington, D.C.: WBGH, 1994), p. 2.

Page 13 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

At one time, the common business practice was to encourage someone

with a disability to leave the workforce. In recent years, however, concern

has grown about the effect of disability on costs, productivity,

competitiveness, and employee and customer relations. As a result, the

private sector has begun to develop and implement strategies for helping

disabled workers return to work as quickly as possible.9

 These efforts

include intervening as soon as possible after a disabling event occurs,

helping the worker set return-to-work goals, providing the services the

worker needs to return to work, and offering incentives that encourage

return to work. Similar approaches have also been implemented in the

social insurance disability programs of other countries.

To develop information on private sector return-to-work practices for this

report, we surveyed 21 people from the private sector recognized for their

involvement in developing disability management programs that focus on

return to work. As well as working to develop return-to-work programs

within their own companies, all 21 have been actively involved in efforts

by the Washington Business Group on Health or the Health Insurance

Association of America to develop and promote such programs.10 As a

group, these 21 individuals represented extensive experience in managing

disability under workers’ compensation and disability insurance programs.

We conducted in-depth interviews with five respondents to supplement

the survey responses. (See app. I for a list of individuals contacted during

our review.)

SSA’s Return-to-Work

Efforts Have Been

Static

Technological, medical, and societal changes have increased the potential

for more people with disabilities to work, and some SSA data indicate that

as many as 3 out of 10 persons on the disability rolls may be good

candidates for return to work. However, few beneficiaries ever leave the

rolls by returning to work. For example, less than half of 1 percent of the

beneficiaries have left the DI program annually during the last several years

because they returned to work, according to SSA data.

9

Private sector disability managers also place great emphasis on efforts to prevent disabilities.

Implementing safety and prevention programs requires direct access to workers and their workplace.

While employers have such access, SSA does not; therefore, our report focuses on return-to-work

efforts.

10The Washington Business Group on Health (WBGH) is a nonprofit organization of nearly 200

employers from all major segments of U.S. industry. In 1990, with funding from the U.S. Department of

Education’s National Institute on Disability and Rehabilitation Research, WBGH established the

Institute for Rehabilitation and Disability Management. WBGH also sponsors an annual national

disability management conference.

Page 14 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

As we recently reported, SSA focuses little attention on returning

beneficiaries to the workplace. SSA’s capacity to identify and assist in

expanding beneficiaries’ productive capacities have been limited by

weaknesses in the design and implementation of the DI and SSI programs.

SSA does not have a system for functionally evaluating each individual’s

return-to-work potential and identifying the return-to-work services

needed by those who have the potential to return to the workplace.

Instead, SSA’s primary focus is on processing disability applications to

determine whether applicants meet disability criteria and then paying

benefits to those found eligible.

DI and SSI Program

Structure

The DI and SSI programs pay disability benefits to people who have

long-term disabilities. To be eligible for benefits, an adult must have a

medically determinable physical or mental impairment that (1) is expected

to last at least 1 year or result in death and (2) prevents the individual from

engaging in substantial gainful activity. Regulations currently define

substantial gainful activity as work that produces countable earnings of

more than $500 a month for disabled individuals and $960 a month for

individuals who are blind. Furthermore, to qualify, an individual not only

must be unable to do his or her previous work, but—considering age,

education, and work experience—the individual also must be unable to do

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

Although both programs use the same definition of disability, they differ in

important ways. Established under title II of the Social Security Act, DI is

an insurance program funded by payroll taxes paid by workers and their

employers into a Social Security trust fund.11 Similar to private long-term

disability insurance programs, the DI program is for workers who have lost

their source of income because of long-term disability. To be insured

under DI, an individual must have worked for certain minimum periods

with a specified minimum level of earnings in jobs covered by Social

Security. Reflecting the program’s long-term disability character, DI

benefits generally cannot begin until 5 months after the onset of disability.

Medicare coverage is provided to beneficiaries 24 months after entitlement

to DI cash benefits commences.

By contrast, the SSI program, established under title XVI of the Social

Security Act, is not an insurance program and has no prior work

requirements. Financed from general tax revenues, SSI is a means-tested

11Federal Insurance Contribution Act payroll taxes are allocated among the Disability Insurance Trust

Fund, Old Age and Survivors Trust Fund, and the Medicare Trust Fund.

Page 15 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

income assistance program for disabled, blind, or aged individuals who

have low income and limited resources, regardless of work history.12

Unlike the DI program in which benefits generally cannot begin until 5

months after disability onset, SSI benefits begin immediately upon

entitlement. In most cases, SSI entitlement makes an individual eligible for

Medicaid benefits.

Because the SSI program is a means-tested income assistance program

with no work history requirements, many of the beneficiaries it serves may

have different characteristics than those served by private sector

programs. By definition, individuals qualify for employer-sponsored

disability benefits because they were employed at the time they became

disabled. They therefore have recent work histories and current job skills

when they apply for benefits. In contrast, many SSI applicants have little or

no recent work history or current job skills. An SSA study in 1994 found

that 42 percent of SSI applicants reported leaving their last job more than

12 months before applying for benefits, and another 27 percent said they

did not know when they left their last job.13

When individuals apply for DI or SSI disability benefits, SSA relies on state

Disability Determination Services, agencies that are funded by SSA, to

determine the medical eligibility of applicants. If found disabled, the

beneficiary receives benefits until he or she dies, converts to Social

Security retirement at age 65, or is determined by SSA to be no longer

eligible for benefits because of earnings or medical improvement. The law

requires SSA to conduct a continuing disability review (CDR) at least once

every 3 years to redetermine the eligibility of DI beneficiaries if medical

improvement is possible or expected.14,15 Otherwise, SSA is required to

schedule a CDR at least once every 7 years.

12General revenues include taxes, customs duties, and miscellaneous receipts collected by the federal

government that are not earmarked by law for a specific purpose.

13See U.S. Department of Health and Human Services (HHS), Social Security Administration, Results of

1994 Two-Day Field Office Survey of Disability Applicants, agency correspondence S5H, Mar. 22, 1994.

In this study, Social Security field offices surveyed applicants for disability benefits on 2 days during

1994. Field office staff administered the survey after completion of the initial claims interview.

14For a more complete discussion of SSA’s performance in completing CDRs, see GAO/T-HEHS-95-164,

May 23, 1995.

15The Social Security Independence and Program Improvements Act of 1994 (P.L. 103-296) directed

SSA to perform a minimum number of CDRs for SSI beneficiaries. As now required, SSA plans to

conduct 100,000 CDRs on SSI adults and on one-third of SSI children turning age 18 for each of the 3

fiscal years beginning in 1996.

Page 16 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

Redesign of SSA’s

Disability Programs

Needed to Encourage

Return to Work

SSA’s process for determining disability generally does not directly assess

each applicant’s functional capacity to work.16 The Social Security Act

defines disability in terms of the existence of physical or mental

impairments that are demonstrable by medically acceptable clinical and

laboratory diagnostic techniques. In implementing the act through its

regulations, SSA has developed a Listing of Impairments (generally referred

to as “the listings”) identifying some medical conditions that are presumed

to be sufficient in themselves to preclude individuals from engaging in

substantial gainful employment.17 The presumed link between inability to

work and presence of such medical conditions establishes the basis for

SSA’s award of disability benefits.

According to SSA, the medical conditions identified in the listings serve as

proxies for functional evaluations because such impairments are

presumed to be severe enough to impose functional restrictions sufficient

to preclude any substantial gainful activity. According to SSA data, about

70 percent of new awardees are found to be eligible because their

conditions meet or equal listed impairments that serve as proxies for

functional assessments of ability to work. Only the remaining 30 percent of

new awardees are eligible because they have been further evaluated on the

basis of separately developed nonmedical factors, including residual

functional capacity, age, education, and vocational skills.

Relevant studies, however, indicate that the scientific link between

medical condition and work incapacity is weak. While it is reasonable to

expect that some medical impairments will completely prevent individuals

from engaging in any minimal work activity (for example, those who are

quadriplegic with profound mental retardation), it is less clear that some

other impairments that qualify individuals for disability benefits

completely prevent individuals from engaging in any substantial gainful

activity (for example, those who are missing both feet). Moreover, while

most medical impairments may have some influence over the extent to

which an individual is capable of engaging in gainful activity, other

factors—vocational, psychological, economic, environmental, and

motivational—are often considered to be more important determinants of

work capacity.

16App. IV describes the eligibility determination process in more detail.

17SSA has reported that “some, but not all, of the Listings consider functional consequences of an

impairment ...” and that “functional considerations vary significantly among the Listings.” See HHS,

SSA, Plan for a New Disability Claim Process, SSA Pub. No. 01-0005 (Sept. 1994), p. 11. In addition,

according to SSA, the reliability of the listings has not been rigorously evaluated.

Page 17 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

Beyond the issue of whether SSA’s eligibility determination process

adequately assesses work capacity, the process itself diverts the

applicant’s attention from the possibility of returning to work. Instead, the

process focuses the applicant’s attention on proving that he or she is

unable to work. From the moment an individual applies for disability

benefits, SSA’s eligibility determination process (which can take from a

minimum of several months to 18 months or longer for individuals who

initially are denied and appeal) focuses on proving or disproving that the

individual meets SSA’s disability definition, not on assessing how the

individual could be helped to return to work.

The eligibility determination process itself may erode motivation to work.

By the time applicants are approved to receive benefits, they have been

through a lengthy process that requires them to prove an inability to work;

they have testified about their disabilities before program officials and the

health care community; family and friends may have helped to

demonstrate their work incapacity; and being out of the workforce may

have eroded their marketability. These factors are believed to reduce

receptivity to any efforts aimed at returning to work.

The Social Security Act states that people applying for disability benefits

should be promptly referred to state vocational rehabilitation agencies for

services to maximize the number of such individuals who could return to

productive activity. The Rehabilitation Act of 1973, as amended, authorizes

the Department of Education’s vocational rehabilitation program, which

provides federal funds to a network of state vocational rehabilitation

agencies, to operate the country’s public vocational rehabilitation

program. The federal share of funding for these services is about

80 percent; the states pay the balance.

Under current procedures, the Disability Determination Service in each

state decides whether to refer DI and SSI applicants to state vocational

rehabilitation agencies, which in turn decide whether to offer them

services such as guidance, counseling, and job placement, as well as

therapy and training. In practice, the Disability Determination Services

refer, on average, only about 8 percent of DI and SSI beneficiaries to state

vocational rehabilitation agencies, and we have estimated that less than

10 percent of those referred actually were accepted as clients.18 In total,

these state agencies have little impact on DI and SSI, successfully

18See Social Security: Little Success Achieved in Rehabilitating Disabled Beneficiaries

(GAO/HRD-88-11, Dec. 7, 1987).

Page 18 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

rehabilitating only about 1 out of every 1,000 beneficiaries, on average,

each year.

State vocational rehabilitation agencies may be cautious about accepting

DI beneficiaries because SSA does not contribute to the cost of services

these agencies provide unless a beneficiary successfully returns to work.19

For payment purposes, SSA defines success as returning to work for 9

continuous months with earnings at the substantial gainful activity level;

whereas, state vocational rehabilitation agencies, on the basis of

Rehabilitation Services Administration regulations, define success for all

other clients as placing the individual in suitable employment, paid or

unpaid, for 60 days. In early 1996, SSA began collecting information on the

number of referrals from Disability Determination Services that the state

vocational rehabilitation agencies accept. This step is the starting point of

the SSA’s implementation of new regulations allowing it to use vocational

rehabilitation service providers other than state agencies.

Whether beneficiaries receive vocational rehabilitation services when such

services would be most effective is also an issue. SSA does not have access

to disabled workers until they come to SSA to apply for benefits. SSA survey

results indicate that nearly half of DI and SSI applicants with work histories

have not worked for more than 6 months immediately before applying to

SSA for disability benefits. But even after they apply, vocational

rehabilitation services can be delayed for long periods because, generally,

SSA does not refer anyone for those services until he or she has been

approved as a beneficiary—a process that can take several months and

may take 18 months or longer.

DI and SSI disability beneficiaries may not view returning to work as an

attractive option because, by doing so, they risk losing the security of a

guaranteed monthly income and medical coverage. To reduce this risk, the

Congress has established incentive provisions to safeguard cash and

medical benefits while a beneficiary tries to return to work. However,

because of weaknesses in design and implementation, these incentives

have not encouraged many beneficiaries to attempt to return to work. The

work incentives do not appear sufficient to overcome the prospect of a

drop in income for many who face low-wage employment or to allay the

fear of losing medical coverage and possibly other federal and state

assistance.

19Through 1981, SSA allocated funds to state vocational rehabilitation agencies to finance services

provided to beneficiaries regardless of rehabilitation outcome. According to SSA, success rates were

not much higher under this system than under the current reimbursement program.

Page 19 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

Private Sector

Programs for Disabled

Workers

Private sector businesses underwrite all or part of two primary disability

benefit programs for disabled workers: workers’ compensation programs

and employer-sponsored disability insurance plans. Growing concerns

about the magnitude of disability costs have prompted many in the private

sector to turn their attention to developing approaches to manage

disability. Advocates of disability management stress the need to develop

an integrated approach to manage all types of disability cases, including

workers’ compensation and employer-sponsored disability insurance.

Workers’ Compensation

Programs

Workers’ compensation programs are designed to provide medical care

and cash benefits to replace lost earnings when workers are injured or

become ill in connection with their jobs. Each state has enacted its own

workers’ compensation requirements for people employed in that state. As

of 1992, workers’ compensation laws covered about 88 percent of the

nation’s wage and salary workers.20 Only in New Hampshire does the state

law cover all jobs.21

Workers’ compensation programs are financed almost exclusively by

employers and are based on the principle that the cost of work-related

accidents is a business expense. Most states permit employers to carry

insurance against work accidents with commercial insurance companies

or to qualify as self-insurers by giving proof of financial ability to carry

their own risk. States also may impose requirements that affect how

employers and insurers manage workers’ compensation cases. For

example, some states require that employers and insurers offer specified

rehabilitation services, leaving disability managers with no discretion in

deciding whether the services are needed.

A large majority of compensation cases involve temporary total disability,

which means the worker is unable to work while recovering from an injury

but is expected to recover fully. When it is determined that the worker is

permanently and totally disabled for any type of gainful employment, then

permanent total disability benefits are payable. Both temporary and

permanent total disability are usually compensated at the same rate, which

is usually calculated as a percentage of weekly earnings—most commonly

two-thirds of earnings. All programs, however, place dollar maximums on

weekly benefits payable.

20This figure of 88 percent includes federal workers’ compensation laws that cover federal government

employees, longshore and harbor workers, and coal miners with “black lung” disease.

21Among the workers not covered by other states’ programs, the most common are those in domestic

service, agricultural employment, and casual labor.

Page 20 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

When people receiving workers’ compensation benefits also qualify for DI

benefits, SSA generally reduces their DI benefits by the amount of cash

benefits they receive under workers’ compensation. But the number of

people with reduced DI benefits is relatively small—in 1992, about 103,000

out of about 3.2 million DI beneficiaries had their DI benefits reduced by

the amount of their workers’ compensation benefits, according to the

National Academy of Social Insurance.

Employer-Sponsored

Disability Insurance Plans

While workers’ compensation replaces income lost because of

work-related injuries and illnesses, some employers sponsor disability

insurance plans that replace income lost because of other injuries and

illnesses. These plans can provide short-term or long-term disability

coverage or both. Employers who sponsor disability insurance plans either

self-insure or use commercial insurers to provide coverage.

Short-Term Disability

Insurance

About 44 percent of all private employees have some type of short-term

disability insurance that is provided and paid for, at least in part, by

employers, according to National Academy of Social Insurance estimates

based on Department of Labor data. Five states—California, Hawaii, New

Jersey, New York, and Rhode Island—have mandatory temporary

disability insurance programs that are financed by employers and/or

employees. These programs typically pay 50 percent of prior pay for 26 to

52 weeks when workers cannot perform regular or customary work

because of a physical or mental condition.

Employers may purchase sickness and accident insurance from

commercial insurers or they may self-insure. Under short-term disability

insurance, disability generally is defined as the inability to perform one’s

own occupation, and generally benefit payments begin only a few days

after the disability begins. Benefits usually last for up to 6 months and

typically replace about 50 percent of the worker’s prior earnings.

Long-Term Disability Insurance About 25 percent of all private employees have some type of private

long-term disability insurance that is paid for, at least in part, by

employers, according to National Academy of Social Insurance estimates

based on Department of Labor data. Private long-term disability benefits

usually do not begin until about 3 to 6 months after the onset of disability,

or after short-term disability benefits are exhausted. The benefits usually

are designed to replace a specified percentage of predisability

earnings—most commonly 60 percent. Although long-term plans may

initially pay benefits based on the recipient’s inability to perform his or her

Page 21 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

own occupation, after 2 years they generally pay benefits only if the

individual is unable to perform any occupation.

Private employees who have no employer-sponsored long-term disability

insurance generally must look to SSA’s DI program as their primary source

of disability assistance.22 Although some individuals may purchase their

own individual disability insurance coverage, most individuals rely on the

DI program for long-term disability benefits and medical coverage. The DI

program is the safety net for people who are unable to work and have no

other source of benefits or assistance in returning to work.

Almost all private long-term disability insurance benefits are coordinated

with DI benefits; that is, private benefits are reduced dollar for dollar by

the amount of DI benefits. The rationale for reducing private benefits is to

provide an incentive to return to work by paying only the targeted partial

replacement of earnings. Also, reducing private benefits dollar for dollar

against DI benefits can lower disability insurance premiums. As a result, it

is common for private plans to require claimants to apply for DI benefits.

Disability Programs in

Germany and Sweden

The disability programs financed by the social insurance systems in

Germany and Sweden employ policies and practices that have been

identified by the U.S. private sector and other experts as being key to

disability management. Programs in both Germany and Sweden offer an

array of services, assistance, and incentives to help people with disabilities

remain at or return to work. Germany has a long-standing tradition of

emphasizing rehabilitation over granting permanent disability benefits

(more commonly referred to as pensions), and Sweden has only recently

adopted an emphasis on returning people with disabilities to work.

Disability Programs in

Germany Emphasize

Rehabilitation Over

Pensions

German laws and policies stress the goal of “rehabilitation over pension.”

This means that cash benefits are awarded only after it is determined that

a person’s earning capacity cannot be restored by rehabilitation or other

interventions. Under German social law, rehabilitation is an entitlement

for people with physical or mental disabilities and for those threatened by

such disabilities.

In Germany, disability pensions, rehabilitation, and other forms of

return-to-work assistance are provided by a complex system of pension,

22Besides long-term disability insurance, some individuals may work for employers who have pension

and retirement plans that provide disability benefits.

Page 22 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

employment, accident, and health (often referred to as sickness) insurance

funds.23 For people with disabilities that resulted from work-related

accidents or occupational diseases, accident insurance finances disability

pensions as well as medical and vocational rehabilitation. Although most

non-work-related disability pensions are paid by the pension insurance

funds, most of the return-to-work assistance provided to people with

disabilities is financed by employment insurance. However, to reduce the

number of people requiring permanent disability benefits, the pension

insurance funds pay for medical and vocational rehabilitation for

individuals meeting certain work requirements.24 For those who have not

worked, employment assistance is available from public social assistance

and the employment office.

All disability pension applicants are considered for rehabilitation and for

return to work. Those who are able to work in their former or similar

occupations and earn at least half of the average income in that profession

are not eligible for any pension, regardless of the disabling condition. If

successful rehabilitation seems unlikely, or fails, the pension insurance

funds may grant a full or partial pension on either a permanent or

temporary basis to a person with reduced earnings capacity caused by a

disability.

Most disability pensions awarded in Germany are full and permanent. Full

or “total disability” pensions are granted to people who can no longer

engage in gainful employment. Partial or “occupational disability”

pensions may be awarded to people who, for health reasons, can only earn

less than half of the amount earned by a healthy person in the same or

comparable occupation. A temporary “fixed-term” pension—either full or

partial—may be awarded if there are reasonable grounds to believe that

the reduced earnings capacity can be remedied within a foreseeable

period.

23Regulated by law, the organizations that administer these compulsory social insurance funds are

autonomous bodies in that they are managed by employer and employee representatives. Because

responsibility for rehabilitation is shared by the different social insurance funds and programs,

standardization of benefits and interagency coordination have been mandated by law. The Federal

Rehabilitation Council—composed of representatives of the various social insurances and

programs—was founded to help coordinate the different insurance funds in lieu of government

control. The Ministry of Labor and Social Affairs influences policy and provides general supervision.

24To receive vocational rehabilitation from the pension insurance funds, individuals must have been in

covered employment or activity before their disabling conditions, and must have contributed to the

pension insurance fund for at least 15 years; have contributed for 3 of the last 5 years and would

receive a pension because of reduced working capacity; or have already received medical

rehabilitation financed by the pension funds. People who do not meet the work requirements of the

pension insurance funds and who have disabling conditions that are not work-related receive

return-to-work assistance through the employment office, which administers the employment

insurance funds.

Page 23 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

Disability Program in

Sweden Now Emphasizes

Return-to-Work Goal

The goal of Swedish disability policy is to provide people with disabilities

the same opportunity as others for earning a living and participating in

community life. Programs for assisting people with disabilities operate

within the broader structure of the country’s universal social insurance

system—providing protection against sickness, work injury, disability, old

age, and unemployment—and its health and employment programs.25

Social insurance offices in Sweden are responsible for awarding disability

benefits (or pensions) and, since 1992, for leading rehabilitation efforts.26

To facilitate rehabilitation, the social insurance offices have been

allocated special funds for purchasing return-to-work services and

assistance from either public or private sources.27

Decision-making in Sweden’s social insurance system starts with the

identification of individuals who may need rehabilitation or other forms of

employment assistance to return to work. If, however, an individual is

deemed unlikely to return to work, or if rehabilitation is unsuccessful,

then a disability pension may be granted.

Disability pensions are based on reduced work capacity, not the presence

of a particular illness or injury. Under Swedish law, permanent or

temporary disability pensions can be awarded to individuals between the

ages of 16 and 64 and who because of illness or other reductions in

physical or mental performance cannot support themselves by

employment. If work capacity is permanently reduced by at least

25 percent, Swedish nationals may receive a basic disability pension,

regardless of work history.

Full, three-quarters, half, or one-quarter basic pensions may be granted to

individuals with disabilities, depending upon the extent to which work

capacity is reduced.28 In addition to a basic pension, an individual with a

work history may also receive a supplementary pension based on

25The Swedish social insurance system also includes parental insurance, child allowances, and

maintenance advances.

26Disability pensions are centrally administered and regulated by the National Social Insurance Board

in Sweden; local and regional social insurance offices carry out day-to-day program operations and

decision-making. The National Social Insurance Board is an independent governmental authority

under the jurisdiction of the Ministry of Health and Social Affairs.

27Return-to-work assistance in Sweden is also financed by the labor market authorities.

28A full disability pension from the basic pension scheme is the same as a full old-age pension.

Page 24 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

employment time and earnings. Sweden also grants temporary disability

pensions if the reduction in work capacity is not considered permanent.29

A variety of other cash benefits may also be awarded in Sweden. Sickness

benefits may be paid indefinitely to individuals with reduced work

capacity. Pension supplements are available to those receiving only the

basic pension or who have a low supplementary pension. Disability

allowances provide compensation for extra costs that people incur from

their disabilities. And rehabilitation allowances cover loss of earnings and

certain kinds of expenditures for people participating in vocational

rehabilitation.

Objectives, Scope,

and Methodology

The Chairman of the Senate Special Committee on Aging asked us to

report on ways to improve SSA’s return-to-work efforts. To develop this

information, we (1) identified key practices used by U.S. private sector

companies to return disabled workers to the workplace and (2) obtained

examples of how other countries’ social insurance programs approach

returning people with disabilities to work (discussed in chs. 2, 3, and 4).

U.S. Private Sector To develop the information on the private sector in this report, we

interviewed officials of selected employers, insurers, and other

organizations known for their leadership in disability management (see

app. I). We reviewed documents they provided, and we also performed an

extensive review of literature on disability management.

In addition, through a mail survey, we obtained the views of 21 disability

managers from companies or other organizations that are leaders in

developing disability management programs.30 As a group, these 21

individuals represented extensive experience in managing disability under

workers’ compensation and disability insurance programs. Of the 21

individuals, 8 had managed only disability insurance cases; 4 had managed

only workers’ compensation cases; and 9 had managed both. We did not

verify that the information reported in the responses to our survey was

factually accurate, but we conducted extensive interviews with five

respondents to supplement the survey responses.

29The temporary pension is granted if the disability, while not permanent, is expected to continue for a

considerable period—generally, a minimum of 1 year.

30We sent the survey instrument to disability managers of 26 companies, and 21 responded.

Page 25 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

Our survey instrument presented the respondents with a list of disability

management practices and asked whether their current programs

incorporated each practice. We then instructed them to assume they were

designing a model disability management program and asked them to

assess how important they believed each practice would be in their model

program. We asked them to assess the importance of each practice on a

scale of 1 to 5, with 1 equaling “not important” and 5 equaling “very

important,” regardless of whether their current programs incorporated

that practice.

Appendix II presents the survey instrument as well as data on how many

respondents said their companies had incorporated each disability

management practice in their programs. It also shows the mean rating of

the importance that the respondents placed on including each practice in a

model disability management program. The results of our survey represent

the views of the disability managers who responded and should not be

considered necessarily representative of the views of other disability

managers. However, as we intended, the results illustrate what “leading

edge” companies believe is important.

In addition, we obtained comments from disability managers of 15

companies on a summary of our analysis of private sector return-to-work

practices. We asked them to assess the accuracy, completeness,

objectivity, and soundness of our analysis. In general, they agreed with all

aspects of our analysis, and we made only minor technical changes to this

information based on their comments. A bibliography of the literature we

used in our analysis of private sector disability management and a list of

related GAO products are at the end of this report.

While many in the private sector believe that their proactive

return-to-work efforts have resulted in net dollar savings, there have been

no rigorous studies that present conclusive data on the cost-effectiveness

of disability management, particularly with respect to the extent to which

specific components of return-to-work programs may be responsible for

cost savings.

Germany and Sweden To obtain examples of how other countries’ social insurance programs

approach returning people with disabilities to work, we did an extensive

review of the literature on disability programs in other countries. To

develop further information on return-to-work approaches in other

countries, we interviewed a number of program officials and other experts

Page 26 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 1 

Introduction

on disability programs in Germany and Sweden, and reviewed the

documents they provided. For each country, we obtained information on

(1) program goals, benefits, and incentives; (2) early intervention efforts;

(3) the type of return-to-work measures and services offered as well as

how the assistance is provided and funded; (4) the eligibility

decision-making process; and (5) how cases are managed when

return-to-work services are provided. Appendix III lists the people we

interviewed in Germany and Sweden.

We selected disability programs in Germany and Sweden for review

because (1) both countries have political structures and standards of

living, including the use of technology, similar to those in the United

States, and (2) their disability programs have policies and practices that

have been identified by the U.S. private sector and other experts as being

key to disability management: early intervention and an emphasis on

return to work through the provision and management of services,

incentives, and rehabilitation.

As with disability management programs in the U.S. private sector, social

insurance programs in Germany and Sweden spend money on

return-to-work efforts to reduce disability costs. However, in general,

rigorous studies demonstrating the cost-effectiveness of programs in

Germany and Sweden do not exist. Where appropriate, we discuss the few

studies that have examined outcomes of certain practices.

We did not independently verify the accuracy of the data used in this

report. Except for this, our work was performed in accordance with

generally accepted government auditing standards between February 1995

and March 1996.

Page 27 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

Respondents to our private sector survey generally indicated they believe

that early intervention is of paramount importance in returning disabled

workers to the workplace. Early intervention involves the initiation of

stay-at-work or return-to-work efforts as soon as possible after a disabling,

or potentially disabling, event occurs. The respondents to our survey

stressed the importance of several early intervention practices in their

return-to-work programs (see table 2.1).31

Table 2.1: Key Early Intervention

Practices Intervene early

Practice 1 Address return-to-work goals from the beginning of an emerging

disability

Practice 2 Provide return-to-work services at the earliest appropriate time

Practice 3 Maintain communication with workers who are hospitalized or

recovering at home

Disability management literature supports the respondents’ focus on early

intervention, emphasizing that the longer an individual remains away from

work because of a disabling condition, the less likely it is that the

individual will ever return to work. One study emphasized that the timing

of intervention is not a question of months, but of days or even hours after

a disabling event occurs.32,33 The literature emphasizes that disability

cannot be explained solely by a person’s medical condition and that the

decision to return to work depends greatly on the disabled worker’s

personal motivation.

In this view, long absences from the workplace because of disability can

lead to a disability mind-set—a condition of discouragement in which

disabled workers, believing they will not be able to return to work, lose

the motivation to try. Studies have shown that only one in two newly

disabled workers who remain out on disability 5 months or more will ever

return to work.34 According to one study, a key to disability management

31Survey respondents we interviewed said that good return-to-work practices apply to all types of

disabilities. The effectiveness of any given practice is independent of whether disabilities arise from

work-related or non-work-related injuries or illnesses.

32H. Allan Hunt, Rochelle V. Habeck, Patricia Owens, and others, “Disability and Work: Lessons From

the Private Sector,” paper prepared for the Disability, Work, and Cash Benefits Conference, sponsored

by the National Academy of Social Insurance and the National Institute for Disability and

Rehabilitation Research, Santa Monica, Calif., Dec. 8-10, 1994, p. 32.

33SSA cannot intervene at such an early stage because it does not have access to disabled workers until

they come to SSA to apply for benefits, which can be many months after the onset of disability.

34Sheila H. Akabas, Lauren B. Gates, Donald E. Galvin, and others, Disability Management: A Complete

System to Reduce Costs, Increase Productivity, Meet Employee Needs, and Ensure Legal Compliance

(New York: American Management Association, 1992), p. 11.

Page 28 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

success is the immediate creation, or maintenance, of the expectation that

an individual has the potential to work and will return to work.35

Address

Return-to-Work Goals

Early

Of the 21 respondents to our private sector survey, 18 stated they address

return-to-work goals from the beginning of an emerging disability. When

we asked the respondents to rate the importance of including this practice

in a model disability management program, they gave goal-setting a high

mean rating of 4.7 (on a scale of 1 to 5, with 1 equaling “not important” and

5 equaling “very important”).36 By contrast, return-to-work goals for SSA’s

disability beneficiaries are not addressed, if at all, until the eligibility

determination process is completed, which takes a minimum of several

months and can take 18 months or longer for individuals who are initially

denied benefits and appeal.

Addressing return-to-work goals early requires that injuries and illnesses

be reported quickly to disability managers. One workers’ compensation

program manager, for example, told us that her company encourages

reporting of injuries and illnesses within 24 hours. To encourage such

prompt reporting, one of the company’s divisions has a policy of not

charging any disability expenses to the manager’s profit and loss center if

the injury or illness is reported within 24 hours. Another company

instructs employees to report claims for all absences of more than 7 days

to the company’s disability management team. We were told that a team

then begins the process of developing a return-to-work plan in

consultation with the employee and his or her treating physician rather

than waiting until the employee is regarded as disabled.

Some respondents said they use disability duration guidelines as a tool for

evaluating the expected length of an individual’s absence from work

because of illness or injury. Such guidelines commonly are commercially

produced compilations of medical data on the characteristic duration of

different types of disabilities according to diagnoses, symptoms, and

occupational factors. For employers or insurers with large databases,

duration guidelines can reflect actual experience in combination with

medical and vocational research. The employer or insurer can use this

information to work with the disabled individual and his or her physician

to set a target date for return to work.

35Hunt, Habeck, Owens, and others, p. 32.

36Respondents were asked to rate the importance of 32 practices. Their mean ratings of the importance

of these practices ranged from 2.1 to 4.9. Eighteen of the 32 practices had mean ratings of 4.1 or

higher. See app. II for a list of the practices and their mean ratings.

Page 29 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

In Germany and Sweden, laws and policies require that an individual’s

return-to-work potential be assessed soon after the onset of a disabling

condition. Consequently, people with disabilities are generally considered

for rehabilitation and return to work at relatively early stages in their

contacts with the social insurance offices. In Germany, the health

insurance funds generally inquire about the appropriateness of

rehabilitation for individuals drawing sickness benefits more than 10

weeks. In addition, vocational counselors often discuss rehabilitation and

return-to-work plans with work accident or occupational illness victims

while they are still in the hospital. And everyone applying for a disability

pension in Germany is considered by the pension insurance funds for

rehabilitation and return to work before being determined eligible for

permanent benefits.37

Under Swedish laws and policies, both the private and public sectors are

responsible for the early identification of candidates for rehabilitation and

return to work. Since 1992, employers have been responsible for

investigating whether employees who receive sickness benefits for 4

weeks or who are absent from work frequently because of illness need

some type of rehabilitation. Employers are also responsible for arranging

for a rehabilitation examination and reporting this to the social insurance

office.

When employers disregard their responsibilities, Sweden’s social

insurance offices arrange for the examination and start planning

rehabilitation for the disabled workers.38 Because the social insurance

offices monitor sickness benefits, they are able to identify who may need

rehabilitation or other forms of employment assistance. After someone has

received sickness benefits for about 4 weeks (28 to 30 days), a social

insurance office begins the process of assessing whether the person will

need vocational rehabilitation to return to work.39

37Germany’s employment offices also play a significant role in identifying the vocational rehabilitation

needs of individuals who are no longer employed and come to the employment offices seeking work.

Of those receiving vocational assistance in 1992 in Germany, about 82 percent were provided services

through the employment offices.

38Social insurance offices in Sweden have no mechanisms or sanctions to force employers to comply

with their rehabilitation responsibilities. According to social insurance office surveys, employers do

not arrange for rehabilitation examinations in about 40 to 50 percent of the cases.

39In Sweden, doctors are responsible for determining whether medical rehabilitation is necessary.

Page 30 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

Provide

Return-to-Work

Services at the

Earliest Appropriate

Time

Consistent with the early intervention emphasis, most respondents to our

survey stated they believe it is important to provide rehabilitation services

from the onset of disability. Such services, which are intended to restore

an individual’s health, functional capacities, or ability to engage in useful

and constructive activity, fall into two basic categories: medical and

vocational. Medical rehabilitation involves physical and mental care

services, while vocational rehabilitation includes services such as

vocational assessment, labor market surveys, developing alternative work

plans, retraining, and assistance with job-seeking skills. Vocational

rehabilitation focuses primarily on helping individuals with disabilities

enter a different job or career.

The respondents to our survey tended to view medical rehabilitation as

having more priority than vocational rehabilitation during the early stages

of a disability. Of the 21 respondents, 18 said they provide medical

rehabilitation services from the onset of disabilities, but only 12 said they

provide vocational services from onset. Similarly, in rating the importance

of rehabilitation services in a model disability management program, the

respondents’ mean rating for providing medical services from onset was

4.3, compared with a mean rating of 3.7 for providing vocational services

from onset.

The respondents’ preference for medical before vocational rehabilitation

services in the early stages of disability is not surprising. All 21

respondents to our survey said that their initial goal is to return the worker

to the same job he or she was doing before the disabling event. During

follow-up interviews, several respondents stated that workers who have

potential to return to their old jobs generally need only medical services to

go back to work, but it is important that these medical services be

provided as early as possible. When it appears the worker will be unable to

return to the same job, disability managers turn to vocational services,

which focus more on assisting the disabled employee to enter a different

job or career.

Most individuals who apply to SSA for disability benefits are not working,

but SSA’s focus is not on returning them to work. The agency’s efforts

instead focus on determining their eligibility for cash benefits. Assessment

for vocational rehabilitation services to enable return to work occurs, if at

all, after the eligibility determination process is completed, which, as

mentioned before, sometimes takes 18 months or longer.

Page 31 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

In Germany and Sweden, laws and policies emphasize providing

return-to-work services and assistance at the earliest appropriate time.

Similar to the private sector in this country, a guiding principle of

Germany’s social insurance system is that intervention should occur at the

earliest possible stage of disability to minimize the degree and effects of

the disability. Intervention often begins when the treating physician, one

of the insurance agencies, or the employer urges a person receiving

sickness benefits to apply for medical rehabilitation.40 Ability and capacity

to work are assessed at this time. Following medical rehabilitation, in

cases where it is warranted, the person will be referred to vocational

rehabilitation or other types of return-to-work services and assistance.41

Disability pensions are not awarded until it has been determined that the

person’s earning capacity cannot be restored through rehabilitation.

In Sweden, as mentioned before, employers are responsible for the early

identification of workers who need rehabilitation and for taking early

intervention steps. Employers often fail to do this, however, and the social

insurance offices, which closely monitor the use of sickness benefits,

intervene. After someone has received sickness benefits for about 4

weeks, the social insurance office collects information from the person’s

doctor or employer to determine whether vocational rehabilitation will be

needed for return to work.42 The goal of the social insurance office is to

make this decision within the next 2 weeks. If such assistance is

warranted, the social insurance office may purchase vocational

rehabilitation and related employment services. If after receiving such

services, the person does not return to work and still has the disabling

condition, he or she can continue to receive sickness benefits. After 12 to

13 months of receiving these benefits, a decision is made to grant the

person either a permanent disability pension or a temporary pension and

possibly more vocational services.

An official at the National Social Insurance Board in Sweden has

concluded early intervention pays for itself. His study found that early

screening and contact with clients and employers, greater attention to

diagnoses, and close cooperation among the social insurance offices and

40Except for work injury claimants, rehabilitation in Germany cannot begin without the individual

applying for it.

41Before someone is referred to vocational rehabilitation in Germany, a physician ascertains whether

the person could return to the original job or to a different job—through transfer, retraining,

workplace accommodations, or assistive devices—with the same employer.

42As noted, doctors in Sweden are responsible for determining whether medical rehabilitation is

necessary.

Page 32 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

the medical and vocational rehabilitation providers reduced social

insurance costs by returning people to the workplace sooner. The study

noted that the reduction in sick leave and the probable accompanying

increase in days worked was more than sufficient to pay for the increased

administrative costs. This same official told us that just by intervening

with phone calls at the 14th day of someone receiving sickness benefits

saves the social insurance offices money.

Maintain

Communication With

Disabled Workers

To help maintain motivation to return to work, respondents to our survey

indicated they believe it is important to establish early contact and to stay

in touch with disabled workers. Of the 21 respondents to our survey, 19

stated they maintained communication with workers who are hospitalized

or recovering at home. When asked to rate the importance of including

this type of communication in a model disability management program,

the respondents gave it a mean rating of 4.7.

Contacting a worker soon after an injury or illness and then continuing to

communicate with the worker is important because the worker needs to

be reassured there is a job to return to and that the employer is concerned

about his or her recovery. Such reassurances can help maintain motivation

to return to work. One disability manager stated that her company

contacts workers within 24 hours of a reported illness or injury and

recontacts them every 2 weeks by telephone. Another stated her

company’s case managers are required to contact workers at least once a

week.

The person responsible for maintaining communication varied from

company to company. One respondent said in her company a registered

nurse case manager contacts hospitalized workers before they return

home, and the case manager maintains contact until the disabled worker

returns to full duty. She said the first week after an injury is a window of

opportunity that is critical to minimizing a worker’s time lost from work.

In other instances, one company uses a disability management vendor to

maintain contact, and another stresses that the worker’s supervisor

maintain contact. Depending on whether a company is self-insured or

insured by a commercial carrier, contacts with disabled workers may also

be maintained by insurance company personnel.

By contrast, SSA’s contacts with disability applicants are limited to efforts

to obtain the evidence needed to determine eligibility for cash benefits.

Rather than encourage the applicant to return to work, these contacts

Page 33 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 2 

Early Intervention Critical to Return to

Work

probably serve only to strengthen the applicant’s resolve to prove he or

she is disabled.

In both Germany and Sweden, insurance offices contact individuals

receiving sickness benefits to determine whether they will be able to

return to work without intervention or whether they will need some type

of assistance to do so. As mentioned, workers in Germany who draw

sickness benefits longer than 10 weeks are generally contacted by the

health insurance funds or their employer to inquire about the

appropriateness of rehabilitation measures. In Sweden, social insurance

offices telephone workers after they have received sickness benefits for 14

days to determine what, if anything, needs to be done to get them back to

work.

Page 34 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

Not only must rehabilitation services be provided at the earliest

appropriate time, but disability managers need to ensure that the services

are appropriate for each individual. The respondents to our survey

generally told us they attempt to provide return-to-work assistance that is

tailored to the individual and that they manage disability cases with a view

toward achieving return-to-work goals. This approach seeks to avoid

unnecessary expenditures while investing in cost-effective techniques for

achieving return-to-work goals for disabled workers. Respondents to our

survey told us they employ several key practices in identifying and

providing appropriate services and managing their return-to-work

programs (see table 3.1).

Table 3.1: Key Practices in Identifying

and Providing Return-to-Work

Services

Identifying and providing services effectively

Practice 1 Assess the individual’s return-to-work potential and needs

Practice 2 Offer transitional work opportunities that enable disabled workers

to ease back into the workplace

Practice 3 Use case management techniques when appropriate to help

disabled workers return to work

Practice 4 Ensure that medical service providers understand the essential job

functions of the disabled worker

Assess

Return-to-Work

Potential and Services

Needed

Of the 21 respondents to our survey, 20 stated that they assess

return-to-work potential early in the process. As some respondents

emphasized, return-to-work potential is not determined merely by a

medical diagnosis showing the presence of an impairment but, rather, by

functionally evaluating each individual’s capacity to work after his or her

medical condition has stabilized. When we asked the respondents to rate

the importance of including early assessment of return-to-work potential

in a model disability management program, they gave it a mean rating of

4.8 on a scale of 1 to 5.

By contrast, SSA’s process for determining disability generally does not

directly assess each applicant’s functional capacity to work. Instead, as

mentioned before, SSA’s evaluation process presumes that certain medical

conditions are in themselves sufficient to preclude work. SSA enumerates

such medical conditions in its Listing of Impairments.43 These listings

serve as proxies for functional evaluations, identifying impairments that

are presumed to impose functional restrictions sufficient to preclude any

43As mentioned, SSA has reported that “some, but not all, of the Listings consider functional

consequences of an impairment ...” and that “functional considerations vary significantly among the

Listings.” See Plan for a New Disability Claim Process, p. 11.

Page 35 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

gainful activity. About 70 percent of new awardees are eligible because

their conditions meet or equal listed impairments that are presumed to be

disabling. Only the remaining 30 percent of new awardees are eligible

because they have been further evaluated on the basis of separately

developed nonmedical factors, including residual functional capacity, age,

education, and vocational skills.

Fifteen of the 21 respondents to our survey also stated their

return-to-work programs attempt to provide services at the earliest

appropriate time. In rating the importance of including vocational services

in a model disability management program, the respondents gave this

practice a mean rating of 4.4. However, 12 respondents said that as part of

their effort to provide appropriate services, they provide these services

only to individuals who are deemed likely to return to work.44 The

motivation for this approach is to avoid investing funds in vocational

services when the risk is high that a disabled worker will not return to

work even after receiving vocational services.45

Some companies have begun developing profiles of characteristics that

help them identify the disabled workers who are most likely to benefit

from vocational rehabilitation services and return to work. For example,

two insurers we contacted had studied thousands of long-term disability

cases and developed profiles that include, among other factors, age,

gender, marital status, whether the disability was caused by accident or

illness, whether the disability occurred on the job, and type of disability.

Using such a profile, one insurer categorizes each long-term disabled

worker in one of three groups: (1) those who are unlikely to return to

work regardless of whether they receive vocational rehabilitation services,

(2) those who are likely to return to work but do not need rehabilitation

services to do so, and (3) those who are likely to return to work but need

rehabilitation services to do so. The company focuses its attention on

individuals in the third group because they have the greatest potential for

cost-effective use of rehabilitation resources. This approach results in a

relatively small proportion of beneficiaries receiving rehabilitation

44In some states, workers’ compensation laws require that specified vocational rehabilitation services

be offered to all workers with occupational disabilities, regardless of whether disability managers

believe the services should be provided.

45Many DI beneficiaries may be more severely impaired than the average beneficiary in

employer-sponsored, long-term disability insurance programs. In the private sector, many companies

require that claimants file for DI when they apply for private long-term disability benefits. Some of

these individuals return to work through the companies’ return-to-work programs, but those whose

conditions are too severe to succeed in returning to work will likely become DI beneficiaries.

Page 36 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

services. Officials of insurance companies we contacted estimated that

about 3 to 7 percent of their long-term disability beneficiaries receive

vocational rehabilitation services.

These companies expect to save more than they spend on their investment

in rehabilitation services. For example, one insurance company reported

that for every dollar spent on rehabilitation, it had saved an average of $10

in long-term disability reserves and expected the savings ratio to increase

as the company gained experience in identifying the people most likely to

benefit from rehabilitation services.46 Another insurance company

reported average savings of $35 in long-term disability reserves for every

dollar spent on rehabilitation services.

In Germany and Sweden, return-to-work services and assistance are fairly

extensive and tailored to meet individual needs. An individual may receive

a combination of different benefits and services, such as medical or

vocational rehabilitation, employment or social assistance, as well as cash

assistance while applying for or participating in rehabilitation.

As noted in chapter 1, rehabilitation is an entitlement in Germany.

Vocational assistance measures include assistance in retaining or

obtaining a job (including grants to the employer); assistance in selecting

an occupation (including work trials or sheltered workshops); basic

training and retraining to prepare for an occupation (including basic

education necessary to attend more advanced training courses);

workplace adaptations; and wage subsidies for employees who are

difficult to place. The duration of vocational assistance varies greatly and

can last as long as 2 years for basic training or retraining programs. The

person’s aptitude, inclinations, and former occupations are taken into

account as well as labor market conditions when accepting an individual

into a vocational retraining program.

Providing appropriate return-to-work assistance to people with disabilities

is viewed as a cost-effective investment in Germany. Officials we

interviewed noted that placement rates for individuals who completed

vocational retraining have been fairly high, although there are no

quantitative data documenting overall cost-effectiveness. Surveys in

Germany have found that about 80 percent of former trainees were

working one year after completing their vocational retraining, and these

results have remained steady over a number of years for a wide range of

46This insurance company defined disability reserves as amounts accrued on an actuarial basis to pay

future long-term disability benefits.

Page 37 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

occupations.47 However, some retraining centers have waiting lists in

certain vocational areas. For example, we were told that a Frankfurt

retraining center had a 1- to 2-year waiting list for those to be retrained as

office workers.

Swedish laws and policies that address people with disabilities as well as

the country’s generous package of noncash benefits and services are

aimed at helping individuals remain at or go back to work. To make the

workplace accessible, employers by law must adapt working conditions,

including the organization of work, to suit the needs of those with

functional impairments. Government subsidies may be disbursed to

employers who adapt their workplaces to the special needs of a person

with a functional disability, install technical aids, or engage a personal

assistant for a worker with a disability. In addition, under a law that took

effect January 1, 1994, people who have severe functional disabilities and

who need help with certain daily activities are entitled to personal

assistance.48

In Sweden, people with disabilities have, like others, the right to

assistance from the regular employment office in finding employment.

Employment assistance measures include assessment of working capacity,

occupational rehabilitation, vocational guidance, subsidized employment,

sheltered employment, on-the-job training, and probationary employment

at companies that agree to such arrangements. Rehabilitation is not meant

to be a lengthy process, but rather a short, intensive period of medical,

social, and work-related training to help the individual to return to work as

soon as possible.

Offer Transitional

Work Opportunities

All but one of the 21 respondents to our survey said they offer transitional

work opportunities to help disabled workers ease back into the

workplace. Transitional work (also known as modified work or light duty)

involves changing the work environment to allow an employee who has

been disabled to return to work at a job that is less physically or mentally

demanding than his or her previous assignment. When asked to rate the

importance of including transitional work opportunities in a model

disability management program, the respondents gave it a mean rating 

of 4.8.

47Data we were able to obtain did not indicate the placement rate by severity of the disability. In

addition, we were told that placement rates at some retraining centers have decreased in the last few

years because of a faltering economy.

48Obtaining assistance under the Act Concerning Support and Service for Persons with Certain

Functional Impairments is not dependent upon returning to work.

Page 38 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

Workplace modifications that provide transitional work opportunities may

include job restructuring, assistive devices, workstation modifications,

reduced hours, or reassignment to another job. For example, one

respondent said that reducing the worker’s hours is typically her

company’s first approach. Another said that in her company’s restaurant

operations, employees are cross-trained so they can exchange positions or

shift tasks if one of them, for instance, is experiencing back problems.

The Americans With Disabilities Act (ADA) requires an employer with 15 or

more employees to make “reasonable accommodations” for the known

disability of an applicant or employee unless doing so would impose an

“undue hardship” on the employer. A reasonable accommodation could

include reassigning an employee to another job.

Three insurance companies stated that although not obligated to do so

under ADA, they had paid for workplace modifications for disabled

beneficiaries formerly employed by firms that provided disability coverage

through these insurance companies. The insurance companies viewed

these expenditures as cost-effective investments because benefit

payments to these beneficiaries were reduced or eliminated after the

beneficiaries returned to work. One of these insurance companies often

contracts to spend up to $2,000 on workplace modifications on behalf of a

disabled beneficiary. In some circumstances, however, the company has

spent more than $2,000 on modifications to help an individual return to

work. By contrast, SSA does not promote the provision of job

accommodations that could enable an individual to return to work.49

In both Germany and Sweden, transitional work opportunities may be

arranged for people with disabilities. Such transitional work may be

considered for people with disabilities who can return to work part-time

and gradually increase their daily work hours until they reach their

maximum work capacity. In Germany, such a gradual return to the original

job is a formalized process known as stepwise reintegration, and it is

implemented under the guidance of the treating physician and the

company’s doctor.50 In Sweden, transitional opportunities include the

adaptation of working conditions to suit the needs of people with

49However, SSA does not preclude state vocational rehabilitation agencies from pursuing job

accommodations for the beneficiaries they serve.

50Stepwise reintegration in Germany also involves a written contract between the employer and the

person attempting the gradual return to work. The contract must state, among other things, the

beginning and end dates for the stepwise process, the timing of the various reintegration steps, and the

salary the worker will receive at the various steps.

Page 39 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

functional impairments, trial work, on-the-job training, and part-time work

leading to full-time work.

Use Case

Management

Techniques When

Appropriate

Most respondents to our survey (20 of 21) said they use disability case

management techniques, when appropriate, to help disabled workers

return to work. When asked to rate the importance of including case

management in a model disability management program, respondents to

our questionnaire gave it a mean rating of 4.5. By contrast, under current

procedures, SSA does not assess which cases may warrant case

management.51

Although disability case management may be defined and implemented

differently by different companies, it generally can encompass identifying,

evaluating, and coordinating the delivery of return-to-work services,

including social, health care, and rehabilitation services. The case manager

may do such things as help the individual understand or obtain transitional

work opportunities or assist in talking with the individual’s doctor about

treatment and recovery.

Although most respondents believe case management is important, they

have implemented it in different ways. For example, some respondents

employ their own staff of case managers, but others rely on the staffs of

their disability insurers or third-party administrators. Furthermore,

respondents differed in how they assign case managers. One self-insured

employer, for example, assigns someone from its disability management

team to act as case manager on every disability case, regardless of

whether the case involves workers’ compensation or short-term or

long-term disability insurance. But in another instance, a disability

insurance company determines on a case-by-case basis whether the case is

complex enough to warrant a case manager.

Disability managers we contacted told us their case managers typically

have caseloads of no more than 50 disabled workers. When workers are

determined to have rehabilitation potential, case managers continue to

manage their cases for extended periods, for example, up to 2 years.

In Germany, two national officials we interviewed stated that the accident

insurance program (similar to workers’ compensation in the United

51Although SSA generally does not use case management, SSA’s Project NetWork demonstration has

been studying the use of four case management models. See SSA’s Rehabilitation Programs

(GAO/HEHS-95-253R, Sept. 7, 1995). For beneficiaries served by state vocational rehabilitation

agencies, agency personnel determine whether any case management is provided.

Page 40 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

States) is viewed as being more effective than the pension insurance office

in returning people with disabilities to work. The program is more

successful, in part, because it assigns individual advisers (or case

managers) soon after the onset of a disabling condition.

Ensure That Medical

Service Providers

Understand Essential

Job Functions

Almost all respondents to our survey (19 of 21) said they attempt to ensure

that medical providers understand the disabled worker’s essential job

functions because the treating physician’s decision to release the worker

affects the timing of the worker’s return to the workplace. When asked to

rate the importance of this practice in a model disability management

program, the respondents gave it a mean rating of 4.6. By contrast, SSA

generally contacts treating physicians only to request medical information

needed to determine whether applicants meet disability eligibility criteria.

In the view of private sector disability managers, it is important not only

that the physician understand the disabled worker’s essential job

functions, but also that the physician understand the impact of any

transitional work opportunities or other job accommodations that the

employer is willing to provide. Otherwise, the physician may not release

the individual to return to work until he or she can function at

predisability levels. As some disability managers told us, actions taken to

ensure that medical providers understand the essential job functions and

focus on return-to-work issues should be viewed as part of the early

intervention strategy.

At one of the respondents’ companies, for example, a supervisor

accompanied employees with occupational injuries on the first visit to a

physician. And at some respondents’ organizations, case managers

communicate with treating physicians to make sure the physicians

understand the essential job functions of disabled workers. Others said

they try to direct disabled workers to physicians who are familiar with

their companies’ operations. Several respondents said their companies

sometimes provide treating physicians with videotapes of the actual job

functions that would be expected of disabled workers. Also, to provide

physicians with general familiarity about the jobs performed by workers,

two respondents said their companies take physicians on tours of

company facilities.

Some disability managers told us they have concerns about the degree to

which the medical community focuses on return-to-work issues. They

believe physicians should proactively address the question of return to

Page 41 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 3 

Identifying and Providing Return-to-Work

Services Effectively

work with injured and ill workers. However, in their view, medical training

in the United States does not sufficiently emphasize the desirability of

disabled workers’ returning to work at the earliest appropriate time. As a

result, these disability managers believe physicians generally give

insufficient priority to return-to-work issues.

Most respondents to our survey believed that return-to-work efforts are

enhanced by organized systems of care.52 An organized system of care

gives companies greater opportunity to educate physicians in the

requirements of jobs performed by the companies’ workers. As well as

focusing on care, health care providers in an organized system of care can

collaborate with employers on setting return-to-work expectations for

members who become disabled. Of the 21 respondents, only 8 said they

currently use an organized system of care as part of the strategy for

returning disabled workers to the workplace. However, when asked to

rate the importance of including an organized system of care in a model

disability management program, 16 of the 21 respondents gave it a rating

of 4 or 5.

In Germany, physician education plays an important role in the

rehabilitation and return-to-work process. The Federal Rehabilitation

Council issues guidelines for doctors to follow during the rehabilitation

process. Among other things, the guidelines describe the duties of the

doctor while his or her patient is undergoing rehabilitation (medical and

vocational) and they inform the doctor about the various rehabilitation

centers and specialized equipment that is available. Moreover, the

guidelines stress the importance of working closely with employment

office officials so that a disabled worker may keep a job or find a new one,

depending on the person’s residual functional capacities.

52An organized system of care is a group or network of health care providers that integrates the

financing and delivery of a full continuum of care for its enrolled population and is held clinically and

fiscally accountable for the outcomes and health status of its members.

Page 42 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 4 

Work Incentives Facilitate Return to Work

Respondents to our survey generally told us they believe it is important

that the cash and medical benefits structure provide incentives for

disabled workers to return to work. However, as some respondents

emphasized, such work incentives by themselves are not sufficient to

make a return-to-work program successful. Incentives must be part of an

integrated strategy that includes effective early intervention and the

identification, provision, and management of return-to-work services. The

respondents to our survey indicated several key practices in providing

work incentives (see table 4.1).

Table 4.1: Key Practices for Providing

Incentives to Return to Work Use appropriate incentives

Practice 1 Structure cash benefits to encourage disabled workers to rejoin

the workforce

Practice 2 Maintain medical benefits for disabled workers who return to work

Practice 3 Include a contractual provision that can require the disabled

worker to cooperate with return-to-work efforts

As we reported recently, work incentives available to DI and SSI

beneficiaries do not appear sufficient to make returning to work an

attractive option. By returning to work, they risk losing the security of a

guaranteed monthly income and medical coverage. Weaknesses in the

design and implementation of the work incentives have made these

provisions ineffective in overcoming the prospect of a drop in income for

many who face low-wage employment or to allay the fear of losing medical

coverage.

Structure Cash

Benefits to Provide

Return-to-Work

Incentive

When asked to rate how important it would be for a model program to

include a cash benefit structure that encourages return-to-work, the

respondents gave this practice a relatively high mean rating of 4.4;

however, only 14 of the 21 respondents said that their current cash

benefits structure actually provides an incentive to return to work. The

following are examples of how some respondents’ companies structure

cash benefits to make returning to work more financially attractive than

remaining away from work:

• While away from work, the disabled worker receives disability benefits

equivalent to 60 percent of predisability earnings. If the individual returns

to work, his or her earnings are supplemented by an incentive benefit

amount so that total income can be considerably higher than the disability

benefits the worker was receiving. The worker continues to receive an

Page 43 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 4 

Work Incentives Facilitate Return to Work

incentive benefit until his or her earnings reach 80 percent of predisability

earnings.

• If a disabled worker returns to work, he or she continues to receive

unreduced disability benefits for 1 year, unless the total of earnings and

benefits would be greater than the individual’s predisability earnings. After

1 year, the worker continues to receive disability benefits, but these

benefits are reduced by an amount equal to 70 percent of the worker’s

earnings.

• Disabled workers are allowed a trial work period, usually 6 months, during

which long-term disability benefits can be reinstated without reapplication

if the worker cannot remain at work.

• If a disabled worker returns to work, he or she can receive up to $350 per

month for each family member to cover family care expenses. Under

certain conditions, an insurance company will reimburse a claimant for

moving expenses incurred in relocating to take a job.

As mentioned, the respondents indicated they believe it is highly important

to structure cash benefits to provide an incentive to return to work;

however, we noted that their mean rating for this practice was slightly

lower than the mean ratings they gave to other return-to-work practices

they considered important, such as maintaining communication, setting

return-to-work expectations as early as possible, ensuring that medical

service providers understand essential job functions, and providing

transitional work opportunities. This highlights, as some respondents

commented, that although financial incentives are important, a successful

return-to-work program must effectively integrate financial incentives with

other important practices.

Disability management literature supports the view that the cash benefits

structure can affect the disabled worker’s attitude toward returning to

productive activity in the workplace. Short-term disability insurance

generally replaces 40 to 70 percent of earnings for periods ranging from 30

days to 6 months; whereas, long-term disability insurance usually replaces

about 60 percent of prior earnings, with maximum limits on monthly

benefits, for periods that can extend to retirement or longer. Studies show

that if disability benefits are too generous, the benefits can create a

disincentive for participating in return-to-work efforts. For example,

studies of workers’ compensation programs have concluded that the larger

the percentage of original wages that is paid to disabled workers, the more

difficult it is to bring them back to work.53

53Akabas, Gates, Galvin, and others, p. 11.

Page 44 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 4 

Work Incentives Facilitate Return to Work

In Germany, we found that the social insurance programs offer financial

incentives to encourage individuals with disabilities to participate in

rehabilitation programs and return to work. As mentioned before,

individuals who are considered good candidates for rehabilitation are not

awarded disability pensions. Instead, to encourage participation in

rehabilitation, they can receive a cash benefit that is greater than

unemployment or welfare allowances. Depending on individual

circumstances, expenses for room and board, household assistance, travel,

and other expenses incurred while undergoing medical or vocational

rehabilitation may also be covered.54 However, one official we interviewed

stated that economic incentives are limited. In his view, the key to

encouraging return to work is the individual’s motivation and positive

perspective, and the disability program’s processes must be designed to

reinforce that motivation. Germany’s process is designed to identify

individuals who are good candidates for rehabilitation before they are

awarded disability pensions.

In Sweden, individuals with return-to-work potential may be awarded only

a temporary disability pension. This time-limited benefit is awarded if the

individual’s reduced work capacity is not considered permanent but is

expected to continue for a significant period (as a rule, a minimum of 1

year). To encourage such individuals to participate in vocational

rehabilitation, Sweden provides a rehabilitation allowance, which includes

a benefit to cover loss of earnings, and a special grant to cover certain

kinds of expenses connected with rehabilitation.

Because Sweden’s permanent disability pensions replace a high

proportion of income, some workers may consider it more attractive to

avoid rehabilitation and try to obtain a permanent pension. Currently,

permanent disability pensions replace 65 to 70 percent of income for

individuals who receive both a basic and a supplementary pension on the

basis of having a work history. Supplemental, collective bargaining

agreements add another 10 to 20 percent to the earnings replacement.

54There are limits to these benefits. For example, an individual cannot decline a job and return to

training without a valid medical reason (for instance, a progressive or different illness), as determined

by the financing insurance agency.

Page 45 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 4 

Work Incentives Facilitate Return to Work

Maintain Medical

Benefits for Disabled

Employees Who

Return to Work

Discussions of SSA’s return-to-work efforts often emphasize that

beneficiaries are reluctant to return to work because they fear losing their

premium-free Medicare or Medicaid benefits. By contrast, in the private

sector, medical benefits provide an incentive to return to work because it

is by returning to work that disabled workers can be most assured of

retaining these benefits. Respondents to our survey, when asked to rate

the importance of including continuation of medical benefits in a model

disability management program, gave this practice a mean rating of 4.1.

In the private sector, disabled workers jeopardize their medical benefits by

remaining away from work because employers eventually may terminate

their employment. If terminated, such individuals may no longer be

enrolled in the employer-sponsored health plan. If they later go back to

work with a new employer, the new employer may not offer

employer-sponsored medical benefits, or the employee may be excluded

from coverage because of preexisting conditions.55 These possibilities give

a disabled worker an incentive to return to a job with his or her old

employer. In contrast, in the DI and SSI programs, beneficiaries face the

loss of premium-free Medicare or Medicaid benefits if they return to work,

and moreover, the job they get may not offer medical benefits or may not

provide coverage because of preexisting conditions. This discourages DI

and SSI beneficiaries from returning to the workplace.

DI beneficiaries who return to work can receive premium-free Medicare

benefits for 39 months following a trial work period; however, to retain

coverage thereafter, they must pay the same monthly cost as uninsured

retired beneficiaries. SSI beneficiaries can continue receiving Medicaid

coverage after their earnings become too high to allow a cash benefit, but

coverage ends when their earnings reach a higher threshold amount that

varies from state to state. For example, the threshold amount in 1994 was

$17,480 in Pennsylvania and $22,268 in California.

In Germany and Sweden, loss or retention of health care insurance is not

an issue in a worker’s decision on whether to participate in rehabilitation

or attempt returning to work. The individual will continue to belong to the

compulsory insurance system that provides sickness and disability

protection.

55Under the Consolidated Omnibus Budget Reconciliation Act of 1986, a terminated employee may, at

his or her own expense, maintain the medical coverage formerly provided under the

employer-sponsored group plan for a specified period.

Page 46 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 4 

Work Incentives Facilitate Return to Work

Require Cooperation

With Return-to-Work

Efforts

Only 12 of the 21 respondents to our survey said their organizations have

contractual provisions that can require disabled employees to cooperate in

return-to-work efforts as a condition of eligibility for disability insurance

benefits. When asked to rate the importance of including this requirement

in a model disability management program, however, the respondents gave

it a mean rating of 4.1. This relatively high rating is consistent with one

study that found that return-to-work efforts cannot be nurtured in an

environment in which, among other things, participation in a vocational

rehabilitation program is entirely voluntary.

Some respondents stated that the ability to require cooperation as a

condition of eligibility for benefits is important because it can help

motivate an individual with a disability to try to return to work. At the

same time, however, some respondents cautioned that such a requirement

must be invoked carefully because a company could spend money on

return-to-work efforts for individuals who participate because they feel

compelled but ultimately do not return to work because of a basic lack of

motivation. The Social Security Act provides for withholding benefits if a

beneficiary refuses without good cause to accept rehabilitation services.

In Germany and Sweden, individuals may also be denied benefits for not

participating in or cooperating with rehabilitation when it is recommended

by one of the insurance offices. For example, the pension insurance funds

in Germany can deny an individual rehabilitation benefits or a disability

pension if they do not participate in or sufficiently cooperate with the

recommended rehabilitation program. Similarly, if someone refuses to

participate in training because that person would rather receive an

unemployment benefit than undergo rehabilitation, the employment office

can stop his or her benefits.56 The social insurance offices in Sweden may

also revoke benefits, including pension benefits, for those who refuse to

participate in vocational rehabilitation. We do not have information on the

extent to which these provisions are actually invoked in Germany and

Sweden.

56Benefits are initially stopped for 3 months. If the individual still refuses to participate, the office can

stop the benefits for another 3 months. After that, benefits may be stopped for 3 years.

Page 47 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 5 

Conclusions, Recommendation, and Agency

Comments

Disability managers we surveyed spend money on return-to-work efforts

because they believe such efforts are good investments that reduce

disability-related costs. Social insurance programs in Germany and

Sweden also spend money on return-to-work efforts to reduce disability

costs, and their goals stress the importance of work in integrating people

with disabilities into the broader social community.

Improving the success of SSA’s return-to-work efforts offers great potential

for reducing federal disability program costs while helping people with

disabilities return to productive activity in the workplace. If an additional

1 percent of the 6.3 million DI and SSI working-age beneficiaries were to

leave the disability rolls by returning to work, lifetime cash benefits would

be reduced by an estimated $2.9 billion.57 With such large potential

savings, return-to-work services could be viewed as investments rather

than as program outlays.

In our current study of return-to-work practices, we identified three basic

strategies employed in the U.S. private sector as well as in social insurance

programs in Germany and Sweden. These strategies, which must be

integrated to form a comprehensive return-to-work program, are as

follows:

• Provide services and assistance sooner rather than later to promote and

facilitate return to work.

• Identify and provide necessary return-to-work assistance and manage

cases to achieve goals.

• Structure cash and medical benefits to encourage return to work.

Lessons from the private sector and other countries’ social insurance

programs argue for SSA placing greater priority on assessing return-to-work

potential soon after individuals come to SSA and apply for disability

benefits. Currently, when an individual comes to SSA and applies for DI or

SSI benefits, SSA’s priority is to determine eligibility for cash benefits. The

need for medical and vocational rehabilitation is not addressed until after

applicants have been approved to receive cash benefits, which can take up

to 18 months or longer from the time an application is filed.

In conjunction with making an early assessment of return-to-work

potential, SSA needs to place greater priority on identifying and providing,

at the earliest appropriate time, the medical and vocational rehabilitation

services needed to return to work. Currently, SSA bases 70 percent of its

57GAO estimate based upon SSA actuarial estimates.

Page 48 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 5 

Conclusions, Recommendation, and Agency

Comments

awards on whether an individual’s medical symptoms, signs, and

diagnostic results match SSA’s Listing of Impairments that are presumed to

prevent work. It does not evaluate whether these people could return to

work if given appropriate assistance. To improve return-to-work outcomes

and to identify the services needed, SSA needs to place greater emphasis on

functionally evaluating work capacity.

Under the current legislative design, SSA provides vocational rehabilitation

services too late in the process. In addition, neither DI nor SSI applicants

are eligible for medical rehabilitation benefits under Medicare or

Medicaid, respectively, until they are approved for cash benefits through

the lengthy eligibility determination process. And, in the DI program, the

provision of medical rehabilitation is further delayed because Medicare

eligibility does not begin until 24 months after applicants are approved to

receive cash benefits.58

Finally, cash and medical benefits need to encourage beneficiaries to

return to work. The current design of cash and medical benefits in the DI

and SSI programs often presents more hindrances than incentives when

beneficiaries consider returning to work. The structure of cash benefits

can make it financially advantageous to remain on the disability rolls, and

studies report that DI and SSI beneficiaries fear losing their premium-free

Medicare or Medicaid benefits if they return to work.

The experiences of the social insurance programs in Germany and Sweden

show that the utility of return-to-work strategies is not confined to the

private sector. Although SSA faces constraints in applying these strategies,

we believe steps should be taken earlier to better identify and provide

appropriate return-to-work assistance to those who could return to work.

Even relatively small gains in return-to-work successes offer the potential

for significant savings in program outlays.

Recommendation to

the Commissioner of

SSA

Our recent report, SSA Disability: Program Redesign Necessary to

Encourage Return to Work, recommended that the Commissioner of SSA

place greater priority on return to work, including designing a more

effective means to identify and expand beneficiaries’ work capacities and

better implementation of existing return-to-work mechanisms. In line with

placing greater emphasis on return to work, we recommend that the

Commissioner develop a comprehensive return-to-work strategy that

58State vocational rehabilitation agencies may provide medical rehabilitation benefits to beneficiaries

they serve and be reimbursed for these costs if beneficiaries return to work.

Page 49 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 5 

Conclusions, Recommendation, and Agency

Comments

integrates, as appropriate, earlier intervention, earlier identification and

provision of necessary return-to-work assistance for applicants and

beneficiaries, and changes in the structure of cash and medical benefits.

The Commissioner should also identify legislative changes needed to

implement such a program.

Agency Comments In commenting on a draft of this report, SSA agreed much can be learned

from the return-to-work practices of the U.S. private sector and disability

programs in Germany and Sweden. SSA stated that it is already placing a

high priority on return to work and cited a number of actions SSA has taken

to implement its return-to-work initiative, such as expanding the pool of

vocational rehabilitation service providers. Although these actions are in

the right direction, we believe they do not constitute the fundamental

redirection of goals and practices necessary to move the DI and SSI

programs to a much greater emphasis on return to work. For example,

increasing the number of vocational rehabilitation providers does not

address the concern of earlier intervention. Fundamental redesign is

needed because SSA’s disability programs are designed to be cash benefits

programs, not return-to-work programs.

Consistent with our recommendation that SSA should identify legislative

changes needed to implement a return-to-work program, SSA noted that the

law does not provide for, or even allow, many of the return-to-work

strategies discussed in our report. Within this context, however, SSA

affirmed that it is interested in determining whether the return-to-work

practices of other systems could be useful in SSA’s attempts to improve the

return-to-work rate of its disability beneficiaries. SSA emphasized that, for

such efforts to be fruitful, all players in the complex network of federal

disability policy development and program execution would need to be

involved, including several federal departments and agencies, state

disability and rehabilitation programs, private sector providers, insurance

representatives, and employer/union groups as well as the numerous

congressional committees that have roles in the development of legislation

or in budget approval for the kinds of solutions described in our report.

We agree that it is important for all relevant parties to be involved in

policy development and program execution. However, as the primary

manager of multibillion-dollar programs and as the entity with fiduciary

responsibility for the trust funds, SSA must take the lead in forging the

partnerships and cooperation that will be needed in redesigning the

federal disability programs. SSA also made a number of technical

Page 50 GAO/HEHS-96-133 Return-to-Work Strategies
Chapter 5 

Conclusions, Recommendation, and Agency

Comments

comments, which we incorporated where appropriate. Appendix V

contains the full text of SSA’s comments and our evaluation.

Page 51 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix I 

Organizations Contacted During GAO’s

Review of U.S. Private Sector Disability

Management Practices

American Airlines, Inc./AMR Corporation

Lynn Swaim

Manager, Workers’ Compensation

Sondra Napier

Senior Analyst, Workers’ Compensation

American Rehabilitation Association

Tony Young

Director, Residential Services and Community Supports

Bausch & Lomb, Inc.

Kevin E. Flint

Director, Benefits Finance

Burlington Industries

Don Beusse

Director, Health and Safety Services

Chrysler Corporation

Kathleen Neal

Staff Specialist, Benefit Services

Corporate Group Insurance

John D. Wilson

Manager, Benefits Services

Commission on Accreditation of Rehabilitation Facilities

Dr. Donald Galvin

President and Chief Executive Officer

Digital Equipment Corporation

Karen Nelson

U.S. Disability Program Manager

Page 52 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix I 

Organizations Contacted During GAO’s

Review of U.S. Private Sector Disability

Management Practices

DuPont Company

David B. Helms

Senior Consultant, Health Care

Federal Express

Janna Rogers

Benefits Advisor, Benefit Planning Analysis

Fortis Benefits Insurance Company

John Althoff

Rehabilitation Manager

General Electric Company

Shelly Wolff

Corporate Health Care, Disability Program Lead

HHRC Inc.

Marcia Carruthers

Director of Disability Management

(also serves as Executive Director,

Disability Management Employer Coalition, Inc.)

IBM Human Resources, USA

Ted Richards

Manager, Benefit Programs

Andrea M. Epps

Program Manager, Benefit Programs

John Hancock Mutual Life Insurance Company

Richard Quebec

Product and Network Services

Page 53 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix I 

Organizations Contacted During GAO’s

Review of U.S. Private Sector Disability

Management Practices

L.L. Bean

Ted Rooney

Manager, Employee Health Management

Marriott International, Inc.

Rachel Ebert

Director, Occupational Health Services

Northwestern National Life

Mark C. Taylor

Senior Rehabilitation Case Manager, Disability Management Services

Owens-Corning Fiberglas Corporation

Amy Ahrens

Integrated Health Services Leader

Pepsico

Ellen Abisch

Manager, Workers’ Compensation

Polaroid Corporation

Richard J. Williams

Senior Corporate Benefits Administrator

Proctor & Gamble

James Palmer

Associate Director for Employee Benefits, Human Resources

Don Freeland

Senior Manager

Page 54 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix I 

Organizations Contacted During GAO’s

Review of U.S. Private Sector Disability

Management Practices

Southern California Edison

Suzanne Mercure

Benefits Administration Manager

John Stimson

Manager, Disability Management

Texas Instruments

Susan M. Nelson

Health Promotion and Benefits Manager

The Principal Financial Group

Catherine Bennett

Assistant Director

(also serves as Chair, Rehabilitation Subcommittee, Health Insurance

Association of America)

The Burns Group, Inc.

John Burns, President and Chief Executive Officer

UNUM Life Insurance Company of America

Patricia M. Owens

President, Integrated Disability Management

Washington Business Group on Health

Kathleen Kirchner

Director, Institute for Rehabilitation and Disability Management

Wells Fargo Bank

Bruce Flynn

Manager, Disability Management

Page 55 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

This appendix presents the survey instrument that we used to obtain

information from 21 people in the U.S. private sector generally recognized

for their leadership in developing return-to-work programs. The first page

of the survey instrument provided respondents with instructions for

completing the survey, and the second page defined some of the terms in

the survey instrument.

The remainder of the survey instrument listed various disability

management practices. For each practice, we have inserted the number of

respondents who answered “yes” or “no” when asked whether their

current programs currently incorporated the practice. For some practices,

not all respondents answered the question; therefore, the number of

responses is less than 21 in some instances. Also, for each practice, we

have inserted the mean rating that respondents gave when asked for their

assessment of how important it is to include that practice in a model

disability management program.59

59On the fifth page of the survey instrument, we did not provide any results data for practice number 9,

“Pay private VR providers for every client served.” Based on follow-up discussions with several

respondents to our survey, we found that the wording of this practice was not sufficiently clear to

ensure that accurate responses were elicited.

Page 56 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

IMPORTANT NOTES ABOUT THIS QUESTIONNAIRE

We have classified our list of disability management practices

according to two basic goals: (1) curbing the flow of workers

into long-term disability programs and (2) returning disabled

beneficiaries to the workplace. For each disability management

practice, we ask whether your current program incorporates that

practice.

Also, as you think about each disability management practice in

our list, we ask you to consider the following question: If you

were designing a model disability management program, how

important do you believe it would be to include that practice in

your model program?

Please assume that no constraints would be placed on the design

of your model program. We recognize that legal requirements for

Workers’ Compensation programs can vary from state to state and

that the scope and organization of disability management can vary

from company to company. However, assume you were starting with

a clean sheet of paper to design a model program for managing all

types of disability cases.

If you believe our list omits any important practices, space is

provided for you to pencil them in. Also, on page 2, we define

several terms that appear in the questionnaire.

Please provide the following information about the person who

completes the questionnaire:

Company/organization

Your name

Position

Telephone number

Which type(s) of disability cases do you manage? (Check all that

apply)

(4) 1. Workers’ Compensation

(8) 2. Disability Insurance

(9) 3. Other (specify [both workers’ compensation disability

insurance cases])

Page 57 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

DEFINITION OF TERMS1

Disability case management--A systematic approach to identifying,

evaluating, and coordinating the delivery of disability-related

services to individuals; the objective is to improve return-towork outcomes for employees who become disabled and financial

results for employers.2

Employee Assistance Program (EAP)--Employer-sponsored program

designed to help employees whose job performance is being

adversely affected by personal problems. May involve wellness

and prevention efforts, counseling, and control of specific

conditions (e.g., alcoholism or smoking). Some employers use

EAPs to address the psychological aspects of disabling injuries

or illnesses.

Organized system of care (OSC)--A group or network of health care

providers that integrates the financing and delivery of a full

continuum of care for its enrolled population and is held

clinically and fiscally accountable for the outcomes and health

status of its members. OSCs focus on prevention as well as care

and collaborate with employers on setting return-to-work

expectations for members who become disabled.

Transitional work--Changes in the work environment to allow an

employee who has been disabled to return to work at a job that is

less physically or mentally demanding than his or her previous

assignment; modifications may include job restructuring;

assistive devices, workstation modifications; reduced hours, or

reassignment to another job. Also known as modified work or

light duty.

Wellness program--Any of a range of employer-sponsored activities

designed to increase employees’ overall quality of life, prevent

accidents and ill health, and reduce the associated costs. May

include programs for fitness, smoking cessation, nutrition and

weight management, stress management, blood pressure screening,

health risk appraisals, etc.

1

Definitions are taken from The Language of Managed

Disability: A Glossary of Terms. 1995. Published by William M.

Mercer, Incorporated, and Metropolitan Life Insurance Company in

cooperation with the Washington Business Group on Health.

2

Disability-related services can include a range of social,

health care, and rehabilitation services.

Page 58 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

Disability Management Practices for Curbing

the Flow of Workers into Long-Term Disability Programs

GOAL: CURB THE FLOW OF WORKERS

INTO LONG-TERM DISABILITY PROGRAMS

Practice

Does your

current

program

incorporate

this

practice?

How important is it to

include this practice in a

model disability

management program?

1 = Not important

5 = Very important

(Circle one choice)

1. Employ safety and prevention strategies

to avoid disabilities.

Yes No

(21 (0)

12345

(Mean rating = 4.8)

2. Track illnesses and injuries to provide

data needed to develop safety and

prevention efforts.

Yes No

(20) (1)

12345

(Mean rating = 4.7)

3. Offer wellness programs. Yes No

(19) (2)

12345

(Mean rating = 3.9)

4. Offer an Employee Assistance Program. Yes No

(20) (1)

12345

(Mean rating = 3.9)

5. Maintain communication (by telephone

or in-person) with workers who are

hospitalized or recovering at home.

Yes No

(19) (1)

12345

(Mean rating = 4.7)

6. Modify jobs to enable impaired workers

to remain on the job.

Yes No

(20) (1)

12345

(Mean rating = 4.9)

7. Train supervisors in disability

management concepts and practices.

Yes No

(14) (6)

12345

(Mean rating = 4.5)

8. Make appropriate medical rehabilitation

services available from the onset of

impairments that could cause disability.

Yes No

(18) (3)

12345

(Mean rating = 4.3)

9. Assure that medical service providers

understand the essential job functions of the

impaired worker.

Yes No

(18) (2)

12345

(Mean rating = 4.6)

Page 59 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

GOAL: CURB THE FLOW OF WORKERS

INTO LONG-TERM DISABILITY PROGRAMS

Practice

Does your

current

program

incorporate

this

practice?

How important is it to

include this practice in a

model disability

management program?

1 = Not important

5 = Very important

(Circle one choice)

10. Make appropriate vocational

rehabilitation (VR) services available from

the onset of impairments that could lead to

disability.

Yes No

(12) (8)

12345

(Mean rating = 3.7)

11. Address return-to-work goals from the

beginning of an emerging disability.

Yes No

(18) (2)

12345

(Mean rating = 4.7)

12. (In the spaces below, write in any

practices you believe need to be added.)

Yes No 12345

13. Yes No 12345

14. Yes No 12345

Page 60 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

Disability Management Practices

for Returning Disabled Beneficiaries to the Workplace

GOAL: RETURN DISABLED BENEFICIARIES TO THE WORKPLACE

Practice

Does your

current

program

incorporate

this

practice?

How important is it to

include this practice in a

model disability

management program?

1 = Not important

5 = Very important

(Circle one choice)

1. Assess return-to-work potential early in

the process.

Yes No

(20) (1)

12345

(Mean rating = 4.8)

2. Use persons with appropriate

skills/training to assess return-to-work

potential.

Yes No

(20) (1)

12345

(Mean rating = 4.3)

3. Assess return-to-work potential by

comparing beneficiary’s characteristics with

a profile of the characteristics of persons

who are likely to return to work.

Yes No

(7) (14)

12345

(Mean rating = 2.7)

4. Assure that medical service providers

understand the essential job functions of the

disabled worker.

Yes No

(19) (2)

12345

(Mean rating = 4.6)

5. Provide VR services only to those who

must have such services to return to work.

Yes No

(13) (7)

12345

(Mean rating = 3.6)

6. Offer VR services only to those who are

deemed likely to return to work.

Yes No

(12) (9)

12345

(Mean rating = 3.8)

7. Provide appropriate VR services at the

earliest appropriate time.

Yes No

(15) (6)

12345

(Mean rating = 4.4)

8. Offer appropriate VR services at a later

time to beneficiaries who initially did not

participate in a return-to-work plan.

Yes No

(15) (6)

12345

(Mean rating = 3.4)

9. Pay private VR providers for every client

served. (See footnote 59 above)

Yes No 12345

10. Use case management techniques

when appropriate to help beneficiaries

return to work.

Yes No

(20) (1)

12345

(Mean rating = 4.5)

11. Use case managers when appropriate

to provide VR services.

Yes No

(15) (6)

12345

(Mean rating = 3.4)

Page 61 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

GOAL: RETURN DISABLED BENEFICIARIES TO THE WORKPLACE

Practice

Does your

current

program

incorporate

this

practice?

How important is it to

include this practice in a

model disability

management program?

1 = Not important

5 = Very important

(Circle one choice)

12. Allow beneficiaries to choose their own

VR service providers.

Yes No

(7) (14)

12345

(Mean rating = 2.1)

13. Include a contractual provision that can

require the beneficiary to cooperate with

return-to-work efforts.

Yes No

(12) (9)

12345

(Mean rating = 4.1)

14. Return the disabled worker, if possible,

to the same job with the same employer.

Yes No

(21) (0)

12345

(Mean rating = 4.5)

15. Offer transitional work opportunities that

enable the disabled worker to ease back

into the workplace.

Yes No

(20) (1)

12345

(Mean rating = 4.8)

16. Offer a cash benefit structure that gives

beneficiaries an incentive to rejoin the

workforce.

Yes No

(14) (7)

12345

(Mean rating = 4.4)

17. Beneficiaries maintain their medical

benefits by returning to work.

Yes No

(16) (5)

12345

(Mean rating = 4.1)

18. Place time limits on benefits for certain

impairments.

Yes No

(13) (8)

12345

(Mean rating = 3.3)

19. The insurer in some instances pays for

job accommodations to facilitate return to

work.

Yes No

(14) (6)

12345

(Mean rating = 3.6)

20. The insurer in some instances

subsidizes a beneficiary’s wages to facilitate

return to work.

Yes No

(15) (5)

12345

(Mean rating = 3.6)

Page 62 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix II 

Survey on Disability Management Practices

GOAL: RETURN DISABLED BENEFICIARIES TO THE WORKPLACE

Practice

Does your

current

program

incorporate

this

practice?

How important is it to

include this practice in a

model disability

management program?

1 = Not important

5 = Very important

(Circle one choice)

21. Use an organized system of care

(OSC) as part of the strategy for returning

disabled workers to the workplace.

Yes No

(8) (13)

12345

(Mean rating = 3.9)

22. (In the spaces below, write in any

practices you believe need to be added.)

Yes No 12345

23. Yes No 12345

24. Yes No 12345

Page 63 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix III 

People and Organizations Contacted During

GAO’s Review of Social Insurance Disability

Programs in Germany and Sweden

Germany Dr. Rolf Bödege, Chief Administrator

Vocational Retraining Center—Frankfurt am Main

Bad Vilbel

Dr. Rainer G. Diehl, Leading Physician, Rehabilitation Department

Dr. Gunter Möbert, Psychiatrist, Rehabilitation Department

Jacob Brähler, Department Chief, Insurance and Pension Department

Petra Lee, Section Chief, Insurance and Pension Department

Regional Pension Office—Hessen

Frankfurt am Main

Dr. Ulrich Gehrke

Federal Rehabilitation Council

Frankfurt am Main

Dr. Harmut Haines, Ministry Advisor

Federal Ministry for Labor and Social Affairs

Bonn

Dr. Michael Nagy, Managing Director

Vocational Training Center Heidelberg

Heidelberg

Anke Paul, Advisor, Placement and Counseling

Regional Employment Office Hessen

Frankfurt am Main

Gisela Scherer, Rehabilitation Section Chief

Employment Office

Frankfurt am Main

Dr. Michael F. Schuntermann, Department of Rehabilitation Science

Uwe Rehfeld, Statistician

Federation of German Pension Insurance Carriers

Frankfurt am Main

Sweden Patsy Büchmann

U.S. Embassy

Labor Section

Stockholm

Page 64 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix III 

People and Organizations Contacted During

GAO’s Review of Social Insurance Disability

Programs in Germany and Sweden

Dr. Edward Palmer, Head of Research Section

Rolf Westin, Head of Division for Rehabilitation and Disability Pension

Kristina Bengtsson, Rehabilitation Advisor

Peter Jusélius, Legal Advisor

Hannelotte Kindlund, Head of Statistical Division

Tommy Edlund, Statistics Analyst

National Social Insurance Board

Stockholm

Birgitta Magnusson, First Secretary, Disability Issues

Liso Sergo

Ministry of Health and Social Affairs

Stockholm

Lars Hultstrand, Secretary of the Social Committee

Standing Committee on Social Affairs

Parliament

Stockholm

Inger Lenas, Officer, Social Policy Issues

The Swedish Trade Union Confederation

Stockholm

Inga-Britt Lagerlöf, Deputy Assistant Under-Secretary

Anna Odhner, Section Head

Ministry of Labor

Stockholm

Leif Alm, Assistant Manager

Bertil Andersson

Samhall AB

Tullinge

Lisbeth Lidbom, Program Manager for Vocational Rehabilitation and

Handicap Issues

National Labor Market Board

Solna

Christina Ebbeskog, Swedish Confederation of Salaried Employees

Stockholm

Page 65 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix III 

People and Organizations Contacted During

GAO’s Review of Social Insurance Disability

Programs in Germany and Sweden

Eva Lundin, Secretary for Disability Issues

Stockholm Social Services

Stockholm

Birgitta Rydberg, County Councillor

Stockholm County Council

Stockholm

Eva Sandborg, International Advisor

Office of the Disability Ombudsman

Stockholm

Nils Eklund, Senior Auditor

The Swedish National Audit Office

Stockholm

Hans Galvér 

Helena Paulsson

Employability Institute

Uppsala

Håkan Eriksson

Working Life Services

Uppsala

Jan Åke Brorson, Secretary to the Committee

The Committee for a New Structure for Sickness and Occupational Injury

Insurance

Ministry of Health and Social Affairs

Stockholm

Gunilla Sahlin, Advisor on Education, Training, and Disability Policy

Dr. Eric Jannerfeldt

Swedish Employers’ Confederation

Stockholm

Christer Johansson

The Swedish National Society for Persons with Mental Handicap

Stockholm

Page 66 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix III 

People and Organizations Contacted During

GAO’s Review of Social Insurance Disability

Programs in Germany and Sweden

Anita Pettersson, Employment Officer

Annelie Österberg, Vocational Guidance Officer

Employment Office

Stockholm

Dr. Anders Gidlöf, Institute for Futures Studies

Stockholm

Ann-Kristin Olsson, Rehabilitation Counselor

Social Insurance Office

Stockholm

Page 67 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix IV 

Five-Step Sequential Evaluation Process for

Determining DI and SSI Disability

To determine whether an applicant qualifies for DI and SSI disability

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

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

substantial gainful activity (SGA) and whether he or she meets the

applicable nonmedical eligibility requirements (Social Security insured

status, income and resources, residency, and citizenship, for example).60

An applicant found to be not working or working but earning less than SGA

(minus allowable exclusions) and who meets the nonmedical eligibility

requirements has his or her case, including medical and vocational

evidence, forwarded to a Disability Determination Service (DDS) office.

Applicants who do not meet these requirements, regardless of medical

condition, are denied benefits.

DDS offices gather medical and any additional vocational or other

necessary evidence to determine if applicants are disabled under the

Social Security law. In step two, the DDS office determines if the applicant

has an impairment or combination of impairments that is severe and could

be expected to last at least 12 months. According to SSA standards, a

severe impairment is one that significantly limits an applicant’s ability to

do “basic work activities,” such as standing, walking, speaking,

understanding and carrying out simple instructions, using judgment,

responding appropriately to supervision and dealing with change. The DDS

office collects all necessary medical evidence, either from those who have

treated the applicant or, if that information is insufficient, from an

examination conducted by an independent source. Applicants with severe

impairments that are expected to last at least 12 months proceed to the

third step in the disability determination process; applicants without such

impairments are denied benefits.

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

Listing of Impairments (referred to as “the listings”) developed by SSA. The

listings contain over 150 categories of medical conditions (such as the loss

of both feet or an IQ score below 60) that, according to SSA, are severe

enough ordinarily to prevent an individual from engaging in SGA. An

applicant whose impairment is cited in the listings or whose impairment is

equally as severe or more severe than those in the listings and who is not

engaging in SGA is found disabled and awarded benefits. An applicant

whose impairment is not cited in the listings or is not of equal or greater

60To be eligible for DI benefits, individuals must have worked long enough and recently enough under

Social Security. To be eligible for SSI benefits, individuals must not have countable monthly income

(earned and unearned income as defined by the SSI program, minus allowable exclusions) higher than

the federal benefit rate, or countable real and personal property (including cash) worth more than

$2,000.

Page 68 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix IV 

Five-Step Sequential Evaluation Process for

Determining DI and SSI Disability

severity is evaluated further to determine whether he or she can perform

past work or other work.

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

applicant’s residual functional capacity (RFC) to determine whether the

applicant can still perform the functional demands of work he or she has

done in the past. For physical impairments, an RFC is expressed in certain

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

pull, and so forth); for mental impairments, an RFC is expressed in

psychological terms (for example, whether a person can follow

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

perform work done in the past, benefits are denied.

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

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

national economy.61 Using SSA guidelines, the DDS considers the applicant’s

age, education, work experience, and RFC to determine what other work, if

any, the applicant can perform. Unless the DDS office concludes that the

applicant can perform work that exists in the national economy, benefits

are allowed.

At any point in the sequential evaluation process, an examiner can deny

benefits for reasons relating to insufficient documentation or to lack of

cooperation by the applicant. Such reasons can include an applicant’s

failure to (1) provide medical or vocational evidence deemed necessary

for a determination by the examiner, (2) submit to a consultive

examination that the examiner believes is necessary to provide evidence,

or (3) follow a prescribed treatment for an impairment. Benefits are also

denied if the applicant asks DDS to discontinue processing the case.

61By definition, work in the national economy must exist in significant numbers in the region where the

applicant lives or in several regions of the country. It is inconsequential whether (1) such work exists

in the applicant’s immediate area, (2) job vacancies exist, or (3) the applicant would actually be hired.

Page 69 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 70 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

See comment 1.

Page 71 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

Page 72 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

See comment 2.

See comment 3.

See comment 4.

Page 73 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

See comment 5.

Now on pp. 17 and 35.

See comment 6.

Now on p. 49.

Page 74 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

The following are GAO’s comments on the Social Security Administration’s

letter dated June 6, 1996.

GAO Comments 1. We recognize that SSA has taken actions that exemplify concern for

helping more DI and SSI beneficiaries gain independence by returning to

work. The Commissioner stated that SSA is already placing a high priority

on return to work and cited a number of actions SSA has taken to

implement its return-to-work initiative. Although these actions are in the

right direction, we believe the steps SSA has taken do not constitute the

fundamental redirection of goals and practices necessary to move the DI

and SSI programs to a much greater emphasis on return to work.

Fundamental redesign is needed because the DI and SSI programs are

designed, as the Commissioner acknowledges in her comments, to be cash

benefits programs, not return-to-work programs.

Without a fundamental redirection of the programs, SSA’s primary focus

will continue to be on determining whether individuals are unable to work

and then, after declaring them unable to work, considering whether to

refer them to a vocational rehabilitation provider to help them return to

work. This approach does not permit earlier points of intervention that

disability managers in the private sector and in the social insurance

programs in Germany and Sweden believe are critical in maximizing

return-to-work success.

2. Our report acknowledges the fundamental differences between SSA’s

disability programs and the disability programs we analyzed in the U.S.

private sector and in Germany and Sweden. Our report also acknowledges

that implementing the return-to-work strategies of these other systems will

require new legislation, and therefore, we recommend that the

Commissioner identify legislative changes needed to implement a

comprehensive return-to-work program.

3. Our report acknowledges that implementing practices from other

systems may not have the same impact in SSA’s programs because of

differences in the populations served and other fundamental factors.

Because even small gains in return-to-work success can result in large

reductions in program costs, however, we believe the application of the

return-to-work strategies in our report warrants strong consideration.

4. We agree with SSA that, to ensure the success of a newly designed

return-to-work program incorporating the strategies presented in our

Page 75 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

report, all relevant parties need to be involved in policy development and

program execution. However, we believe that SSA, as the primary manager

of these multibillion-dollar programs and as the entity with fiduciary

responsibility for the trust funds, must take the lead in forging the

partnerships and cooperation that will be necessary in redesigning the

programs to place greater priority on return to work.

5. Since SSA stated in its comments that the Listing of Impairments serves

as a proxy for a functional evaluation, we disagree with SSA’s assertion that

our report is misleading in its discussion of SSA’s process for determining

disability and its general lack of focus on the applicant’s functional

capacity to work. Our report points out that most beneficiaries are

awarded benefits on the basis of whether they have an impairment that

meets or equals a medical condition found in SSA’s Listing of Impairments.

In such cases, the determination process does not directly assess the

individual’s capacity to work but instead focuses on establishing whether

the individual has a specific medical condition. SSA argued that the listings

consider the functional consequences of listed impairments and it is

presumed that if a person’s impairment meets or equals a listed

impairment, his or her condition imposes functional restrictions sufficient

to preclude any gainful activity. We believe these arguments demonstrate

our point—that using the listings to determine eligibility does not provide

a direct assessment of an individual’s actual capacity to work but instead

results in a presumption that a person cannot work based on the existence

of certain medical conditions. Also, we note that SSA has reported

previously that “some, but not all, of the Listings consider functional

consequences of an impairment . . .” and that “functional considerations

vary significantly among the Listings.” See HHS, Plan for a New Disability

Claim Process, SSA Pub. No. 01-0005 (Washington, D.C.: HHS, SSA, Sept.

1994), p. 11. Our report was revised to clarify language describing SSA’s

process for determining disability and the Listing of Impairments (see pp.

17 and 35).

6. We believe the report acknowledges the existence of several constraints

that SSA faces in placing greater emphasis on return to work. On page 13,

we note that the population SSA serves may include many individuals who

are more severely impaired, have less work history, or fewer current job

skills than clients the private sector serves. On page 15, we acknowledge

the legislative basis for the DI and SSI programs, and accordingly, we

recommend that the Commissioner should identify legislative changes

needed to implement changes to the disability programs. As SSA comments

note, we acknowledge the lack of rigorous studies that present conclusive

Page 76 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix V 

Comments From the Social Security

Administration and Our Evaluation

data on the cost-effectiveness of disability management. (See pp. 26 and

27.) For this reason, our recommendation that the Commissioner develop

a return-to-work strategy did not specify exactly which practices were to

be included or how they were to be implemented. Rather, we

recommended that such a plan integrate, as appropriate, the strategies

discussed in our report. We believe the development of such a plan will

require SSA to assess the costs and benefits of a variety of return-to-work

practices, and from this assessment, SSA will be able to determine which

practices are cost-effective and should be included.

SSA also made a number of technical comments, which we incorporated

where appropriate.

Page 77 GAO/HEHS-96-133 Return-to-Work Strategies
Appendix VI 

Major Contributors to This Report

Cynthia A. Bascetta, Assistant Director, (202) 512-7207

Ira B. Spears, Evaluator-in-Charge

Carol Dawn Petersen, Senior Economist

Michele Grgich, Senior Evaluator

Kenneth F. Daniell, Evaluator

Page 78 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Akabas, Sheila H., Lauren B. Gates, and Donald E. Galvin. Disability

Management: A Complete System to Reduce Costs, Increase Productivity,

Meet Employee Needs, and Ensure Legal Compliance. New York:

American Management Association, 1992.

Berkowitz, Monroe. Improving the Return to Work of Social Security

Disability Beneficiaries. Washington, D.C.: National Academy of Social

Insurance, Dec. 9, 1994.

Blackorby, Jose, and Mary Wagner. Postschool Outcomes for Youth With

Disabilities Receiving SSI and SSDI: Findings From the National

Longitudinal Transition Study. Menlo Park, Calif.: SRI International,

Oct. 17, 1994.

Bureau of National Affairs, Inc. The Americans With Disabilities Act; A

Practical and Legal Guide to Impact, Enforcement, and Compliance.

Washington, D.C.: Bureau of National Affairs, Inc., 1990.

Chirikos, Thomas N. “The Economics of Employment,” The Americans

With Disabilities Act: From Policy to Practice, ed. Jane West. New York:

Milbank Memorial Fund, 1991.

Collignon, Fredrick C. “The Role of Reasonable Accommodation in

Employing Disabled Persons in Private Industry,” Disability and the Labor

Market, Economic Problems, Policies, and Programs, eds. Monroe

Berkowitz and M. Anne Hill. Ithaca, N.Y.: ILR Press, Cornell University,

1986.

Covaleski, John M. “Rehabilitating Margins in Workers’ Compensation.”

Best’s Review, Vol. 95, No. 5 (1994), p. 54.

Cox, Brian. “Companies Debate Best Way to Handle Rehab Services.”

National Underwriter (Life & Health/Financial Services), No. 29 (1994), 

p. 14.

_____. “Scale Quantifies Efficacy of Rehab for Claimants.” National

Underwriter (Property & Casualty/Risk & Benefits), No. 35 (1994), p. 21.

Davidson, Craig J. “Vocational Rehabilitation Services in Workers’

Compensation Programs: Evaluating Research Model Effectiveness.”

Benefits Quarterly, Vol. 10, No. 4 (1994), pp. 49-57.

Page 79 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Dean, David H., and Robert C. Dolan. “Assessing the Role of Vocational

Rehabilitation in Disability Policy.” Journal of Policy Analysis and

Management, Vol. 10, No. 4 (1991), pp. 568-87.

Fletcher, Meg. “Broader Disability Programs Bring Multitude of Benefits.”

Business Insurance, Oct. 1994, pp. 3, 10, 12.

_____. “Network Helps Employers Help Workers.” Business Insurance,

Oct. 1994, p. 12.

Foster, Tracie. “The Evolution of Managed Disability.” Employee Benefit

Plan Review, Jan. 1994, pp. 30-33.

Galvin, Donald E., David Dean, and Kathleen A. Kirchner. “Applying

State-of-the-Art Disability Management to Social Security Beneficiaries.”

Washington, D.C.: Final report by Washington Business Group on Health,

Sept. 30, 1991.

George, John. “Liberty Mutual Moves Into Outpatient Rehab Facilities.”

Philadelphia Business Journal, Vol. 13, No. 46, Sec. 1 (1995), p. 5.

Harrington, Karen, and Jodi Starkman-Mendelsohn. “Accident Benefits:

Shortening the Long of It.” Canadian Underwriter, Vol. 61, No. 10 (1994), 

p. 62.

Hearne, Paul G. “Employment Strategies for People with Disabilities: A

Prescription for Change,” The Americans with Disabilities Act: From

Policy to Practice, ed. Jane West. New York: Milbank Memorial Fund,

1991.

Hennessey, John C., and L. Scott Muller. “Work Efforts of Disabled-Worker

Beneficiaries: Preliminary Findings From the New Beneficiary Followup

Survey.” Social Security Bulletin, Vol. 57, No. 3 (1994), pp. 42-43.

Hester, Edward J. “Development of a Rehabilitation Strategy for Fortis

Benefits Insurance Company’s Group Long-Term Disability Claimants.”

Synopsis of report. Kansas City, Mo.: Fortis Benefits Insurance Company,

Mar. 1994.

Page 80 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Himmelstein, Jay, and Kathleen Rest. Workers’ Compensation and Health

Care Reform: Is There a Need for Federal Action? (Issue Brief, 

No. 650) Washington, D.C.: The George Washington University, National

Health Policy Forum, 1994.

Hunt, H. Allan, Rochelle V. Habeck, Patricia Owens, and others. “Disability

and Work: Lessons From the Private Sector.” Paper prepared for the

Disability, Work, and Cash Benefits Conference, sponsored by the

National Academy of Social Insurance and the National Institute on

Disability and Rehabilitation Research, Santa Monica, Calif.: Dec. 8-10,

1994.

Johnson, William G., John F. Burton, Jr., Lisa Thornquist, and others. “Why

Does Workers’ Compensation Pay More for Health Care?” Benefits

Quarterly, Vol. 9, No. 4 (1993), pp. 22-31.

Juliff, Ronald J., and Phillip L. Polakoff. “An Integrated Approach to

Disability Management.” Risk Management, Vol. 41, No. 4 (1994), pp. 91-97.

Keppel, Allison. “Managing Disability in the Workplace; An Expansive

Approach.” LIMRA’s MarketFacts, July/August 1992, pp. 22-26.

Koco, Linda. “Mrs. Smith Went Back to Work, Thanks to Rehab/Managed

Care Scores Points in Group Disability Insurance.” National Underwriter

(Life & Health/Financial Services), No. 22 (1994), pp. 11, 14.

Kuhn, Leslie. “Recovery and Return.” Small Business Reports, Aug. 1994,

pp. 15-19.

Lee, Barbara A., and Karen A. Newman. “Employer Responses to

Disability: Preliminary Evidence and a Research Agenda.” Employee

Responsibilities and Rights Journal, Vol. 8, No. 3 (1995), pp. 209-29.

Leonard, Jonathan S. “Labor Supply Incentives and Disincentives for

Disabled Persons,” Disability and the Labor Market, Economic Problems,

Policies, and Programs, eds. Monroe Berkowitz and M. Anne Hill. Ithaca,

N.Y.: ILR Press, Cornell University, 1986.

Masengarb, Linda. “Formulating an In-House Disability Management

Program.” Employment Relations Today, Autumn 1994, pp. 307-17.

Meyer, Bruce D., W. Kip Viscusi, and David L. Durbin. “Workers’

Compensation and Injury Duration: Evidence From a Natural

Page 81 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Experiment.” NBER Working Papers Series, Working Paper No. 3494.

Cambridge, Mass.: National Bureau of Economic Research, Oct. 1990.

Mulcahy, Colleen. “Disability Rehab Programs Really Pay Off: Study.”

National Underwriter (Life & Health/Financial Services), Apr. 25, 1994, 

p. 2.

National Academy of Social Insurance. Rethinking Disability Policy: The

Role of Income, Health Care, Rehabilitation and Related Services in

Fostering Independence. Preliminary Status Report of the Disability Policy

Panel. Washington, D.C.: National Academy of Social Insurance, Mar. 1994.

Polakoff, Phillip L. and John S. Tortarolo. “The Future of Disability

Management Is . . . . Integration.” Washington Business Group on Health,

1994 National Disability Management Conference. Washington, D.C.: WBGH,

1994, tab 9.

Rathburn, Alice, and Jeff Seeman. “Identifying and Measuring Key

Characteristics of Disability Rehabilitation Candidates.” Employment

Relations Today, Autumn 1994, pp. 319-28.

Rupp, Kalman, Stephen H. Bell, and Leo A. McManus. “Design of the

Project NetWork Return-to-Work Experiment for People With

Disabilities.” Report for Social Security Bulletin, Mar. 28, 1994.

Schlossman, Sy. “Statement of Sy Schlossman, Interim President, the

American Rehabilitation Association, Before the Committee on Finance,

United States Senate, for the Record of the Hearing on Social Security

Disability Programs, March 22, 1995.” Summary of Testimony. Washington,

D.C.: American Rehabilitation Association, 1995.

Smith, S.L. “Owens-Corning: Insulating Against High Disability Costs.”

Occupational Hazards, July 1994, pp. 33-36.

Stoll, Michael L. “Complete Cost Containment.” Business Insurance, 

Vol. 28, No. 48, (1994), p. 15.

“Temporary Alternate Duty Programs Succeed at Returning Disabled

Employees to Work.” Employee Benefit Plan Review, Vol. 49, No. 7 (1995),

pp. 16-17.

Page 82 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Tweed, Vera. “Simple Answers to a Complex Problem.” Business & Health,

Vol. 12, No. 10 (1994), pp. 57-60.

Weaver, Carolyn L., ed. Disability and Work: Incentives, Rights, and

Opportunities. Washington, D.C.: The AEI Press, 1991.

_____. “Privatizing Vocational Rehabilitation, Options for Increasing

Individual Choice and Enhancing Competition.” Journal of Disability

Policy Studies, Vol. 5, No. 1 (1994), pp. 53-76.

Wojcik, Joanne. “Return-to-Work Plan’s Allure: Works Better and Costs

Less.” Business Insurance, Oct. 17, 1994, pp. 3-4, 6.

UNUM. Disability Management: Costs and Solutions. Portland, Me.: UNUM

Corporation, July 1994.

U.S. Department of Health and Human Services, Social Security

Administration. Annual Statistical Supplement to the Social Security

Bulletin, 1994, 1995.

_____. “Developing a World-Class Employment Strategy for People With

Disabilities.” Briefing for Commissioner Chater and Principal Deputy

Commissioner Thompson. Aug. 5, 1994.

_____. 1992-1994 Interim Report of Demonstration Activities Under Public

Law 96-265, Section 505 (a) (as Amended) and Related Activities.

Washington, D.C.: Nov. 1994.

_____. Disability Process Redesign: Next Steps in Implementation. SSA Pub.

No. 01-006, Nov. 1994.

_____. Final Report and Recommendations From the SSA/RSA Joint Task

Force on Vocational Rehabilitation Referrals. SSA/VR Administrative Letter

No. 94-5. Joint Vocational Rehabilitation Referral Task Force. Apr. 1994.

_____. Plan for a New Disability Claim Process. SSA Pub. No. 01-0005, Sept.

1994.

_____. Results of 1994 Two-Day Field Office Survey of Disability

Applicants. Agency correspondence S5H, Mar. 22, 1994.

Page 83 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

_____. “Rethinking Disability Policy: The Role of Income, Health Care,

Rehabilitation, and Related Services in Fostering Independence.” Social

Security Bulletin, Vol. 57, No. 2 (1994), pp. 56-62.

Page 84 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Page 85 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Page 86 GAO/HEHS-96-133 Return-to-Work Strategies
Bibliography

Page 87 GAO/HEHS-96-133 Return-to-Work Strategies
Related GAO Products

SSA Disability: Program Redesign Necessary to Encourage Return to Work

(GAO/HEHS-96-62, Apr. 24, 1996).

PASS Program: SSA Work Incentive for Disabled Beneficiaries Poorly

Managed (GAO/HEHS-96-51, Feb. 28, 1996).

SSA’s Rehabilitation Programs (GAO/HEHS-95-253R, Sept. 7, 1995).

Social Security Disability: Management Action and Program Redesign

Needed to Address Long-Standing Problems (GAO/T-HEHS-95-233, Aug. 3,

1995).

OHA Backlogs (GAO/HEHS-95-228R, July 28, 1995).

Supplemental Security Income: Growth and Changes in Recipient

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

Disability Insurance: Broader Management Focus Needed to Better

Control Caseload (GAO/T-HEHS-95-164, May 23, 1995).

Supplemental Security Income: Recipient Population Has Changed as

Caseloads Have Burgeoned (GAO/T-HEHS-95-120, Mar. 27, 1995).

Social Security: Federal Disability Programs Face Major Issues

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

Supplemental Security Income: Recent Growth in the Rolls Raises

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

Social Security: Continuing Disability Review Process Improved, But More

Targeted Reviews Needed (GAO/T-HEHS-94-121, Mar. 10, 1994).

Social Security: Disability Rolls Keep Growing, While Explanations

Remain Elusive (GAO/HEHS-94-34, Feb. 8, 1994).

Vocational Rehabilitation: Evidence for Federal Program’s Effectiveness Is

Mixed (GAO/PEMD-93-19, Aug. 27, 1993).

Vocational Rehabilitation Program: Client Characteristics, Services

Received, and Employment Outcomes (GAO/T-PEMD-92-3, Nov. 12, 1991).

(106502) Page 88 GAO/HEHS-96-133 Return-to-Work Strategies
Ordering Information

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

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

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

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

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

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

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

U.S. General Accounting Office

Washington, DC

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

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

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

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

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

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

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

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

info@www.gao.gov

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

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100