Social Security Disability: Commissioner Proposes Strategy to Improve the Claims Process, but Faces Implementation Challenges
Published: 2004-03-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Delivering high-quality service to the public in the form of fair, timely, and consistent eligibility decisions for disability benefits is one of SSA's most pressing challenges. This testimony discusses (1) the difficulties SSA faces managing disability claims processing; (2) the outmoded concepts of SSA's disability program; and (3) the Commissioner's strategy for improving the disability process and the challenges it faces.
section_title: What GAO Found
paragraphs: SSA is at a crossroads in its efforts to improve and reorient its disability determination process. Although SSA has made some gains in the short term in improving the timeliness of its decisions, we found that SSA's disability decisions continue to take a long time to process. Despite some recent progress in improving the timeliness of disability decision-making, individuals who initially are denied disability benefits and who appeal still have to wait almost an additional year before a final hearing decision is made. In addition, evidence suggests that inconsistencies continue to exist between decisions made at the initial level and those made at the hearings level. Also, SSA's disability programs are grounded in an outdated concept of disability that has not kept up with medical advances and economic and social changes that have redefined the relationship between impairment and the ability to work. Furthermore, employment assistance that could allow claimants to stay in the workforce or return to work--and thus to potentially remain off the disability rolls--is not offered through DI or SSI until after a claimant has gone through a lengthy determination process and has proven his or her inability to work. Further, the Commissioner has developed a strategy to improve the disability determination process, including the timeliness and consistency of decisions. While this strategy appears promising, we believe that several key challenges have the potential to hinder its progress, including risks to successfully implementing a new electronic disability folder and automated case processing systems; human capital problems, such as high turnover, recruiting difficulties, and gaps in key knowledge and skills among disability examiners; and an expected dramatic growth in workload.

section_title: Letter
paragraphs: Thank you for inviting me here today to discuss one of the Social Security  Administration’s (SSA) most pressing challenges—delivering high-quality  service to the public in the form of fair, timely, and consistent eligibility  decisions for disability benefits. SSA administers two of the largest federal  disability programs, Disability Insurance (DI) and Supplemental Security  Income (SSI). In calendar year 2003, SSA paid over $85 billion in cash  benefits to about 8.6 million beneficiaries (ages 18 to 64) with disabilities.  In addition, SSA has spent more than $100 million since the first half of the  1990s to address long-standing challenges concerning the timeliness,  accuracy, and consistency of its disability decisions.  However, continuing  difficulties with claims processing—together with a program design that is  out of synch with technological and medical advances that have increased  the potential for some people with disabilities to work—led us in 2003 to  designate modernizing federal disability programs, including DI and SSI, as  a high-risk area urgently needing attention and transformation.
Today, I will discuss some of the difficulties SSA is experiencing in its  disability determination process and challenges the agency is facing as it  attempts to address these issues. The information I am providing today is  based primarily on work we have conducted over the last several years.
In summary, we believe that SSA is at a crossroads in its efforts to improve  and reorient its disability determination process. SSA continues to  experience lengthy processing times for disability decisions and  inconsistencies in these decisions. In addition, SSA’s disability programs  are grounded in an outdated concept of disability that has not kept up with  medical advances and economic and social changes that have redefined  the relationship between impairment and the ability to work. To address  these concerns, the Commissioner has developed a strategy to improve the  disability determination process. While this strategy appears promising,  we believe that several key challenges have the potential to hinder its  progress, including risks to successfully implementing a new electronic  disability folder and automated case processing systems; human capital  problems, such as high turnover, recruiting difficulties, and gaps in key  knowledge and skills among disability examiners; and an expected  dramatic growth in workload.
subsections: section_title: Background
paragraphs: To be considered eligible for benefits for either SSI or DI as an adult, a  person must be unable to perform any substantial gainful activity by  reason of a medically determinable physical or mental impairment that is  expected to result in death or that has lasted or can be expected to last for  a continuous period of at least 12 months. Work activity is generally  considered to be substantial and gainful if the person’s earnings exceed a  particular level established by statute and regulations.
The process of determining eligibility for SSA disability benefits is  complex, fragmented, and expensive. The current decision-making  process involves an initial decision and up to three levels of administrative  appeals if the claimant is dissatisfied with the decision. The claimant starts  the process by filing an application either online, by phone or mail, or in  person at any of SSA’s 1,300 field offices. If the claimant meets the non- medical eligibility criteria, the field office staff forwards the claim to one  of the 54 federally-funded, but primarily state-run Disability Determination  Service (DDS) offices. DDS staff—generally a team composed of disability  examiners and medical consultants—obtains and reviews medical and  other evidence as needed to assess whether the claimant satisfies program  requirements, and makes the initial disability determination. If the  claimant is not satisfied with the decision, the claimant may ask the DDS  to reconsider its finding. If the claimant is dissatisfied with the  reconsideration, the claimant may request a hearing before one of SSA’s  federal administrative law judges in an SSA hearing office. If the claimant  is still dissatisfied with the decision, the claimant may request a review by  SSA’s Appeals Council. The complex and demanding nature of this  process is reflected in the relatively high cost of administering the DI and  SSI programs. Although SSI and DI program benefits account for less than  20 percent of the total benefit payments made by SSA, they consume  nearly 55 percent of the annual administrative resources.
section_title: SSA Faces Difficulties Managing Disability Claims Processing
paragraphs: SSA has experienced difficulty managing its complex disability  determination process, and consequently faces problems in ensuring the  timeliness, accuracy, and consistency of its disability decisions. Although  SSA has made some gains in the short term in improving the timeliness of  its decisions, the Commissioner has noted that it still has “a long way to  go.” Over the past 5 years, SSA has slightly reduced the average time it  takes to obtain a decision on an initial claim from 105 days in fiscal year  1999 to 97 days in fiscal year 2003, and significantly reduced the average  time it takes the Appeals Council to consider an appeal of a hearing  decision from 458 to 294 days over the same period. However, the average  time it takes to receive a decision at the hearings level has increased by  almost a month over the same period, from 316 days to 344 days.  According to SSA’s strategic plan, these delays place a significant burden  on applicants and their families and an enormous drain on agency  resources.
Lengthy processing times have contributed to a large number of pending  claims at both the initial and hearings levels. While the number of initial  disability claims pending has risen more than 25 percent over the last 5  years, from about 458,000 in fiscal year 1999 to about 582,000 in fiscal year  2003, the number of pending hearings has increased almost 90 percent  over the same time period, from about 312,000 to over 591,000. Some  cases that are in the queue for a decision have been pending for a long  time. For example, of the 499,000 cases pending in June 2002 at the  hearings level, about 346,000 (69 percent) were over 120 days old, 167,000  (33 percent) were over 270 days old, and 88,500 (18 percent) were over 365  days old.
In addition to the timely processing of claims, SSA has also had difficulty  ensuring that decisions regarding a claimant’s eligibility for disability  benefits are accurate and consistent across all levels of the decision- making process. For example, the Social Security Advisory Board has  reported wide variances in rates of allowances and denials among DDSs,  which may indicate that DDSs may be applying SSA standards and  guidelines differently. In fiscal year 2000, the percentage of DI applicants  whose claims were allowed by a DDS ranged from a high of 65 percent in  New Hampshire to a low of 31 percent in Texas, with a national average of  45 percent. In addition, the high percentage of claimants awarded  benefits upon appeal may indicate that adjudicators at the hearings level  may be arriving at different decisions on similar cases compared to the  DDSs. In fiscal year 2000, about 40 percent of the applicants whose cases  were denied at the initial level appealed, and about two-thirds of those  who appealed were awarded benefits. Awards granted on appeal happen  in part because decision-makers at the initial level use a different  approach to evaluate claims and make decisions than those at the  appellate level. In addition, the decision-makers at the appeals level may  reach a different decision because the evidence in the case differs from  that reviewed by the DDS. We are currently reviewing SSA’s efforts to  assess consistency of decision-making between the initial and the hearings  levels.
Moreover, in 2003, we reported on possible racial disparities in SSA’s  disability decision-making at the hearings level from 1997 to 2000 between  white and African-American claimants not represented by attorneys.  Specifically, among claimants without attorneys, African-American  claimants were significantly less likely to be awarded benefits than white  claimants. We also found that other factors—including the claimant’s sex  and income and the presence of a translator at a hearing—had a  statistically significant influence on the likelihood of benefits being  allowed.
section_title: SSA’s Disability Programs Currently Grounded in Outmoded Concepts
paragraphs: In addition to difficulties with the timeliness, accuracy, and consistency of  its decision-making process, SSA’s disability programs face the more  fundamental challenge of being mired in concepts from the past. SSA’s  disability programs remain grounded in an approach that equates  impairment with an inability to work despite medical advances and  economic and social changes that have redefined the relationship between  impairment and the ability to work. Unlike some private sector disability  insurers and social insurance systems in other countries, SSA does not  incorporate into its initial or continuing eligibility assessment process an  evaluation of what is needed for an individual to return to work. In  addition, employment assistance that could allow claimants to stay in the  workforce or return to work—and thus potentially to remain off the  disability rolls—is not offered through DI or SSI until after a claimant has  gone through a lengthy determination process and has proven his or her  inability to work. Because applicants are either unemployed or only  marginally connected to the labor force when they apply for benefits, and  remain so during the eligibility determination process, their skills, work  habits, and motivation to work are likely to deteriorate during this long  wait.
section_title: Commissioner’s New Strategy for Improving the Disability Determination Process Appears Promising, but Faces Several Challenges
paragraphs: In SSA’s most recent attempt to improve its determination process, the  Commissioner, in September 2003, set forth a strategy to improve the  timeliness and accuracy of disability decisions and foster return to work at  all stages of the decision-making process.  SSA’s Commissioner has  acknowledged that the time it now takes to process disability claims is  unacceptable. The Commissioner has also recognized that going through  such a lengthy process to receive benefits would discourage individuals  from attempting to work. To speed decisions for some claimants, the  Commissioner plans to initiate an expedited decision for claimants with  more easily identifiable disabilities, such as aggressive cancers. Under this  new approach, expedited claims would be handled by special units located  primarily in SSA’s regional offices. Disability examiners employed by the  DDSs to help decide eligibility for disability benefits would be responsible  for evaluating the more complex claims. To increase decisional accuracy,  among other approaches, the strategy will require DDS examiners to  develop more complete documentation of their disability determinations,  including explaining the basis for their decisions. The strategy also  envisions replacing the current SSA quality control system with a quality  review that is intended to provide greater opportunity for identifying  problem areas and implementing corrective actions and related training.
The Commissioner has predicated the success of her claims process  improvement strategy on enhanced automation. In 2000, SSA issued a plan  to develop an electronic disability folder and automated case processing  systems. According to SSA, the technological investments will result in  more complete case files and the associated reduction of many hours in  processing claims. SSA also projects that the new electronic process will  result in significantly reduced costs related to locating, mailing, and  storing paper files. SSA is accelerating the transition to its automated  claims process, known as AeDib, which will link together the DDSs, SSA’s  field offices, and its Office of Hearings and Appeals. According to the  Commissioner, the successful implementation of the automated system is  essential for improving the disability process.
Beyond steps to improve the accuracy and timeliness of disability  determinations, the Commissioner’s strategy is also consistent with our  1996 recommendations to develop a comprehensive plan that fosters  return to work at all stages of the disability process and integrates as  appropriate: 1) earlier intervention in returning workers with disabilities  to the workplace, 2) identifying and providing return-to-work services  tailored to individual circumstances, and 3) structuring cash and medical  benefits to encourage return to work. The Commissioner has proposed a  series of demonstrations that would provide assistance to applicants to  enhance their productive capacities, thus potentially reducing the need for  long-term benefits for some. The demonstrations include early  interventions to provide benefits and employment supports to some DI  applicants, and temporary allowances to provide immediate, but short- term, cash and medical benefits to applicants who are highly likely to  benefit from aggressive medical care. In addition, demonstrations will  provide health insurance coverage to certain applicants throughout the  disability determination process.
While the Commissioner’s proposed approaches for improving the  disability determination process appear promising, challenges, including  automation, human capital, and workload growth, have the potential to  hinder its success.
Automation. We have expressed concerns about AeDib, which could  affect successful implementation of the Commissioner’s strategy. Our  recent work noted that SSA had begun its national rollout of this system  based on limited pilot testing and without ensuring that all critical  problems identified in its pilot testing had been resolved. Further, SSA  did not plan to conduct end-to-end testing to evaluate the performance of  the system’s interrelated components. SSA has maintained that its pilot  tests will be sufficient for evaluating the system; however, without  ensuring that critical problems have been resolved and conducting end-to- end testing, SSA lacks assurance that the interrelated electronic disability  system components will work together successfully.
Additionally, while SSA has established processes and procedures to guide  its software development, the agency could not provide evidence that it  was consistently applying these procedures to the AeDib initiative.  Further, while SSA had identified AeDib system and security risks, it had  not finalized mitigation strategies. As a result, the agency may not be  positioned to effectively prevent circumstances that could impede AeDib’s  success. To help improve the potential for AeDib’s success, we have made  a number of recommendations to SSA, including that the agency resolve  all critical problems identified, conduct end-to-end testing, ensure user  concurrence on software validation and systems certifications, and finalize  AeDib risk mitigation strategies.
Key human capital challenges. We have also expressed concerns about  a number of issues surrounding human capital at the DDSs that could  adversely affect the Commissioner’s strategy. The more than 6,500  disability examiners in the DDSs who help make initial decisions about  eligibility for disability benefits are key to the accuracy and timeliness of  its disability determinations. The critical role played by the DDS  examiners will likely be even more challenging in the future if the DDSs  are responsible for adjudicating only the more complex claims, as  envisioned by the Commissioner. Yet, we recently found that the DDSs  face challenges in retaining examiners and enhancing their expertise.
High examiner turnover. According to the results of our survey of 52  DDSs, over half of all DDS directors said that examiner turnover was  too high. We also found that examiner turnover was about twice that of  federal employees performing similar work. Nearly two-thirds of all  directors reported that turnover had decreased overall staff skill levels  and increased examiner caseloads, and over one-half of all directors  said that turnover had increased DDS claims-processing times and  backlogs. Two-thirds of all DDS directors cited stressful workloads and  noncompetitive salaries as major factors that contributed to turnover.
Difficulties recruiting staff. More than three-quarters of all DDS  directors reported difficulties in recruiting and hiring enough people  who could become successful examiners. Of these directors, more than  three-quarters reported that such difficulties contributed to decreased  accuracy in disability decisions or to increases in job stress, claims- processing times, examiner caseload levels, backlogs, and turnover.  More than half of all directors reported that state-imposed  compensation limits contributed to these hiring difficulties, and more  than a third of all directors attributed hiring difficulties to other state  restrictions, such as hiring freezes.
Gaps in key knowledge and skill areas. Nearly one-half of all DDS  directors said that at least a quarter of their examiners need additional  training in areas critical to disability decision-making, such as assessing  symptoms and credibility of medical information, weighing medical  opinions, and analyzing a person’s ability to function. Over half of all  directors cited factors related to high workload levels as obstacles to  examiners receiving additional training.
Lack of uniform staff standards. SSA has not used its authority to  establish uniform human capital standards, such as minimum  qualifications for examiners. Currently, requirements for new examiner  hires vary substantially among the states. Over one-third of all DDSs  can hire new examiners with either a high school diploma or less.
Despite the workforce challenges facing them, a majority of DDSs do not  conduct long-term, comprehensive workforce planning. Moreover, SSA’s  workforce efforts have not sufficiently addressed current and future DDS  human capital challenges. SSA does not link its strategic objectives to a  workforce plan that covers the very people who are essential to  accomplishing those objectives. While acknowledging the difficulties SSA  faces as a federal agency in addressing human capital issues in DDSs that  report to 50 state governments, we have recommended that SSA take  several steps to address DDS workforce challenges to help ensure that  SSA has the workforce with the skills necessary for the Commissioner’s  strategy to be successful. These include developing a nationwide strategic  workforce plan addressing issues such as turnover in the DDS workforce,  gaps between current and required examiner skills, and qualifications for  examiners.
Future workload growth. According to SSA’s strategic plan, the most  significant external factor affecting SSA’s ability to improve service to  disability applicants is the expected dramatic growth in the number of  applications needing to be processed. Between 2002 and 2012, SSA  expects the DI rolls to grow by 35 percent, with applications rising as baby  boomers enter their disability-prone years. Over the same period, more  modest growth is expected in the SSI rolls. SSA estimates that, between  2002 and 2012, the number of SSI recipients with disabilities will rise by  about 16 percent.
The challenges SSA faces in keeping up with its workload have already  forced agency officials to reduce efforts in some areas. For example, the  Commissioner explained that in order to avoid increasing the time  disability applicants have to wait for a decision, she chose to focus on  processing new claims rather than keeping current with reviewing  beneficiaries’ cases to ensure they are still eligible for disability benefits,  called Continuing Disability Reviews (CDRs). In fiscal year 2003, SSA did  not keep current with the projected CDR caseload. The Commissioner  says that this situation will continue in fiscal year 2004, despite the  potential savings of $10 for every $1 invested in conducting CDRs.  However, in reducing the focus on CDRs, not only is SSA forgoing cost  savings, but the agency is also compromising the integrity of its disability  programs by potentially paying benefits to disability beneficiaries who are  no longer eligible to receive them.
In closing, as stated earlier, SSA is at a crossroads and faces a number of  challenges in its efforts to improve and reorient its disability determination  process.  Mr. Chairman, this concludes my statement. I would be pleased  to answer any questions that you or other members of the subcommittee  may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information regarding this testimony, please contact Robert E.  Robertson, Director, Education, Workforce, and Income Security at (202)  512-7215, or Shelia Drake, Assistant Director, at (202) 512-7172. Michael  Alexander, Barbara Bordelon, Kay Brown, Beverly Crawford, Marissa  Jones, Valerie Melvin, Angela Miles, and Carol Dawn Petersen made key  contributions to prior work covered by this testimony.
section_title: Related GAO Products
paragraphs: Electronic Disability Claims Processing: SSA Needs to Address Risks  Associated With Its Accelerated Systems Development Strategy. GAO-04- 466. Washington, D.C.: March 2004.
Social Security Administration: Strategic Workforce Planning Needed to  Address Human Capital Challenges Facing the Disability Determination  Services. GAO-04-121. Washington, D.C.: January 27, 2004.
SSA Disability Decision Making: Additional Steps Needed to Ensure  Accuracy and Fairness of Decisions at the Hearings Level. GAO-04-14.  Washington, D.C.: November 12, 2003.
High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 1,  2003.
Major Management Challenges and Program Risks: Social Security  Administration. GAO-03-117. Washington, D.C.: January 2003.
Social Security Disability: Disappointing Results From SSA’s Efforts to  Improve the Disability Claims Process Warrant Immediate Attention.  GAO-02-322. Washington, D.C.: February 2002.
Social Security Disability: Efforts to Improve Claims Process Have  Fallen Short and Further Action is Needed. GAO-02-826T. Washington,  D.C.: June 11, 2002.
SSA Disability: Other Programs May Provide Lessons for Improving  Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.
SSA Disability Redesign: Actions Needed to Enhance Future Progress.  GAO/HEHS-99-25. Washington, D.C.: March 12, 1999.
Social Security Disability: SSA Must Hold Itself Accountable for  Continued Improvement in Decision-making. GAO/HEHS-97-102,  Washington, D.C.: August 12, 1997.
SSA Disability: Return-to-Work Strategies from Other Systems May  Improve Federal Programs. GAO/HEHS-96-133. Washington, D.C.: July 11,  1996.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.