Social Security Disability: Disappointing Results from SSA's Efforts to Improve the Disability Claims Process Warrant Immediate Attention
Published: 2002-02-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The number of people applying for benefits from the Social Security Administration's (SSA) two disability programs grew dramatically during the 1990s. As a result, the Disability Insurance and Supplemental Security Programs began to experience huge backlogs of undecided claims. SSA has spent $39 million during the past seven years on various initiatives to help it better manage its caseloads and ensure high-quality service. SSA spent another $71 million to develop an automated disability claims process. This report reviews the status and outcomes of five initiatives intended to improve SSA's disability claims process.
section_title: What GAO Found
paragraphs: GAO found that the results of the initiatives have been disappointing.

section_title: Letter
paragraphs: During the 1990’s, the Social Security Administration (SSA) experienced a dramatic growth in the number of people applying for benefits from its two disability programs, Disability Insurance (DI) and Supplemental Security Income (SSI), which resulted in huge backlogs of undecided claims. Managing its caseloads and delivering high-quality service to the public in the form of fair, consistent, and timely eligibility decisions in the face of resource constraints became one of SSA’s most challenging problems. To address this problem, SSA in the mid-1990’s developed a long-term strategy to redesign its disability claims process. In the last 7 years, SSA has spent more than $39 million revising its strategy and testing and implementing initiatives designed to improve the timeliness, accuracy, and consistency of its disability decisions and to make the process more efficient and easier for claimants to understand. It spent an additional $71 million during these years to develop an automated disability claims process intended to provide support for efforts to redesign the disability claims process.
Because of your concern about the long-standing problems in SSA’s disability claims process, you asked us to review and report on the status of and results achieved to date from five initiatives to improve SSA’s disability claims process. Two of SSA’s initiatives—the Disability Claim Manager and the Prototype—attempt to improve the initial claims process. SSA’s current disability claims process begins when an individual contacts one of SSA’s field offices to apply for benefits. After the application is complete, a field office claims representative forwards it to a state agency known as the disability determination service (DDS). At the DDS,  disability examiners and medical consultants review the available medical  evidence and determine whether the claimant is disabled. If the DDS  denies the claim, the claimant can appeal to have the DDS reconsider its  initial denial. The Disability Claim Manager initiative attempts to make the  initial part of the claims process more user friendly for claimants by  creating a new position to explain the disability process and program  requirements and to serve as claimants’ primary point of contact on their  claims. The manager performs the duties of both SSA field office claims  representatives and state DDS disability examiners. The second initiative,  the Prototype, attempts to ensure that all legitimate claims are approved  as early in the process as possible by making substantial changes to the  way the DDS processes initial claims. The Prototype requires disability  examiners to more thoroughly document and explain the basis for their  decisions and it gives them greater decisional authority for certain claims.  The Prototype also eliminates the DDS reconsideration step.
Two more initiatives—the Hearings Process Improvement and the Appeals  Council Process Improvement initiatives—change the processes for  handling appeals of claims denied by the DDS. Under the current process,  if the DDS denies a claim, the claimant can request a hearing before an  administrative law judge (ALJ) at an SSA hearings office. If the claim is  denied at this hearing, the claimant may appeal to the next and final  administrative review level in SSA, the Appeals Council. Both initiatives  are designed to speed the decisions made by each of these units by  introducing more efficient ways to handle appeals and to thereby reduce  their backlogs of appealed claims. The fifth initiative, Quality Assurance,  seeks to develop an approach to improve the method SSA uses to ensure  the accuracy of its disability decisions. Quality Assurance affects the  entire disability process.
To examine these initiatives, we interviewed individuals from SSA and  state DDSs responsible for planning and implementing these initiatives  and reviewed documents they provided. We also interviewed SSA  employees and union representatives affected by these changes. We did  our work in accordance with generally accepted government auditing  standards between May and December 2001.
subsections: section_title: Background
paragraphs: DI and SSI provide cash benefits to people with long-term disabilities.  While the definition of disability and the process for determining disability  are the same for both programs, the programs were initially designed to  serve different populations. The DI program, enacted in 1954, provides  monthly cash benefits to disabled workers—and their dependents or  survivors—whose employment history qualifies them for disability  insurance. These benefits are financed through payroll taxes paid by  workers and their employers and by the self-employed. In fiscal year 2001,  more than 6 million individuals received more than $59 billion in DI  benefits. SSI, on the other hand, was enacted in 1972 as an income  assistance program for aged, blind, or disabled individuals whose income  and resources fall below a certain threshold. SSI payments are financed  from general tax revenues, and SSI beneficiaries are usually poorer than  DI beneficiaries. In 2001, more than 6 million individuals received almost  $28 billion in SSI benefits.
The process to obtain SSA disability benefits is complex and fragmented;  multiple organizations are involved in determining whether a claimant is  eligible for benefits. The current process consists of an initial decision and  up to three levels of administrative appeals if the claimant is dissatisfied  with SSA’s decision. Each level of appeal involves multistep procedures  for evidence collection, review, and decision-making. Figure 1 shows the  process, parts of which are required by law.
The disability claims process begins when a claimant applies for disability  benefits, generally at one of SSA’s 1,300 field offices across the country,  where a claims representative determines whether the claimant meets  financial and other program eligibility criteria; they also obtain  information about the claimant’s impairments, including sources of  medical and vocational information. If the claimant meets the financial  and other program eligibility criteria, the claims representative forwards  the claim to the federally funded but state-administered DDS in the state  where the claimant lives. DDS staff obtain evidence about the claimant’s  impairment, and a team consisting of a specially trained disability  examiner and an agency medical consultant reviews the medical and  vocational evidence and determines whether the claimant is disabled. The  claimant is notified of the medical decision, and the claim is returned to  the field office for payment processing or file retention. This completes the  initial claims process.
Claimants who are initially denied benefits can ask to have the DDS  reconsider its initial denial. If the decision at this reconsideration level  remains unfavorable, the claimant can request a hearing before a federal  ALJ at an SSA hearings office, and, if still dissatisfied, the claimant can  request a review by SSA’s Appeals Council. Upon exhausting these  administrative remedies, the individual may file a complaint in federal  district court. Given its complexity, the disability claims process can be  confusing, frustrating, and lengthy for claimants. Many individuals who  appeal SSA’s initial decision will wait a year or longer for a final decision  on their benefit claims.
The claims process can also result in inconsistent assessments of whether  claimants are disabled; specifically, the DDS may deny a claim that is later  allowed upon appeal. Over the years, as many as three-fourths of all  claimants denied at the DDS reconsideration level filed an appeal and, of  these, about two-thirds or more received favorable decisions at the  hearings level. Program rules—such as claimants’ ability to submit  additional evidence and to allege new impairments upon appeal—and the  worsening of some claimants’ condition over time can explain some but  not all of the overturned cases. In some cases, the inconsistency may be  due to inaccurate decisions. SSA believes that DDSs generally make more  errors on denials than on awards, while ALJs generally make more errors  on awards than on denials.
To address these concerns, SSA in 1994 set forth an ambitious plan to  redesign the disability claims process. The overall purpose of the redesign  was to ensure that decisions are made quickly, ensure that the disability claims process is efficient, award legitimate claims as early in the process as possible, ensure that the process is user friendly for claimants and those who provide employees with a satisfying work environment.
The 1994 plan represented SSA’s first effort to significantly revise its  procedures for deciding disability claims since the DI program began in  the 1950’s. In April 1994, we testified that the redesign proposal was SSA’s  first valid attempt to address major fundamental changes needed to  realistically cope with the disability claims workload. We cautioned SSA,  however, that many difficult implementation problems would need to be  addressed. These included new staffing and training demands,  development and installation of technology enhancements, and  confrontation with entrenched cultural barriers to change.
Since 1994, SSA has made several adjustments to its redesign plan, some  of them in response to concerns we expressed over the years about SSA’s  lack of progress. In 1996, we reported that SSA’s original 6-year plan was  overly ambitious. At that time, SSA had made little progress toward  meeting its goals, lacked demonstrable results, and faced difficulties  obtaining and keeping the support of some stakeholders, including federal  employees and state DDS managers and employees. SSA then issued a  scaled-back redesign plan in 1997 focusing on testing and implementing  eight key initiatives—each representing a major change to the system—  within 9 years instead of the original 6 years. In 1999, we again reported  that SSA had made little progress; despite being scaled back, the effort  proved too large to keep on track. We recommended that the agency  further focus its efforts on the most promising initiatives, including those  that would improve the quality and consistency of its disability decisions  and test promising concepts at only a few sites before moving to large- scale testing or implementation. SSA again revised its plans in 1999 and  2001. These plans reflect the agency’s commitment to (1) further test  ways to streamline the claims process, (2) take additional steps to enhance  the quality and consistency of decisions, and (3) introduce new initiatives  that focus on the appeals process. This report focuses on five initiatives  found in SSA’s latest revisions.
During this same period, the Social Security Advisory Board also raised  concerns about some of SSA’s proposed process changes and about the  amount of time and resources the agency had invested in changes that  resulted in minimal gains. More importantly, the Board raised concerns  about certain systemic problems that can undermine the overall  effectiveness of SSA’s claims process, which by extension can also  undermine the effectiveness of SSA’s redesign efforts. The Board found  that SSA’s fragmented disability administrative structure, created nearly 50  years ago, is ill-equipped to handle today’s workload. The Board focused  on a number of areas, including  the lack of clarity in SSA’s relationship with the states and the resulting  variation among states in areas such as salary, hiring requirements, and  the quality of decisions, and an outdated hearing process fraught with tension and poor  communication between SSA and the ALJs.
The Board recommended, among other things, that SSA (1) work to  strengthen the current federal-state relationship in the near-term and  revisit its overall relationship with the states, (2) assert its authority to  require states to follow specific federal guidelines, (3) take steps to  improve SSA’s relationship with its ALJs while also clarifying SSA’s  authority to take steps to improve the timelines and consistency of ALJ  disability decisions, (4) consider whether the agency should be  represented at disability hearings (it currently is not), (5) consider closing  the case record after the ALJ hearing, and (6) revisit the need for changes  in the current provisions for judicial review by federal courts. Most of  these changes are linked to significant structural reforms or the need to  clarify management’s authority, and some may require legislative changes.  The Board’s recommendations are different from the largely procedural or  process changes that often typify SSA’s redesign efforts.
section_title: Disability Claim Manager Test Results Do Not Support Implementation
paragraphs: SSA tested the Disability Claim Manager position in 36 locations in 15  states from November 1999 through November 2000. In June 2001, SSA  ended the initiative. SSA concluded that the test results were not  compelling enough to support implementing the disability claim manager  position. While the test resulted in several benefits, such as improved  customer and employee satisfaction and quicker claims processing, the  increased costs of the initiative and other concerns convinced SSA not to  proceed with the initiative.
The Disability Claim Manager initiative was designed to make the claims  process more user friendly and efficient by eliminating steps resulting  from numerous employees handling discrete parts of the claim. It did so by  having one person—the disability claim manager—serve as the primary  point of contact for claimants until initial decisions were made on their  claims. The managers were responsible for explaining the disability  process and program requirements to the claimants and for processing  both the medical and nonmedical aspects of their claims, responsibilities  normally divided between SSA’s field office claims representatives and  state DDS disability examiners. Both SSA and DDS employees served as  disability claim managers during the test, and each manager performed  both claims representative and disability examiner functions.
In October 2001, SSA issued its final report evaluating the initiative. SSA  found the results of the initiative to be mixed. On the positive side, SSA  concluded that those SSA and DDS employees who participated in the test  could master the expanded responsibilities required of the disability claim  manager position, and the initiative appears to have met its goal of making  the claims process more user friendly and efficient without compromising  the accuracy of decisions. Specifically, SSA found that the initiative  resulted in the following benefits:
Greater customer satisfaction. Claimants served by disability claim  managers reported greater satisfaction than claimants served under the  traditional process. While customer satisfaction was comparable  among awarded claimants—94 percent served by disability claim  managers reported they were satisfied with SSA’s service, compared  with 91 percent of those served under the traditional process—the  difference in customer satisfaction was greater for denied claimants.  More than two-thirds (68 percent) of denied claimants served by  disability claim managers reported overall satisfaction with SSA’s  service, compared with just over half (55 percent) of denied claimants  served under the traditional process.
Faster claims processing. Disability claim managers processed DI  claims an average of 10 days faster and SSI claims an average of 6 days  faster than similar claims processed under the traditional process.
Comparable accuracy. The test showed that the accuracy of decisions  made by disability claim managers was comparable to the accuracy of  decisions made by others on similar claims.
Improved employee satisfaction. Serving as a disability claim manager  improved the job satisfaction of more than 80 percent of employees  serving in that role. Employees cited several factors for their job  satisfaction, namely, their increased control over the claim, their  greater interaction with the claimant, their enhanced job knowledge,  and their ability to provide better customer service. Federal employees  also cited their increased pay as a factor in their increased job  satisfaction.
The Disability Claim Manager initiative provided additional benefits as  well, such as improving understanding between SSA and DDS employees,  according to SSA’s evaluation of the initiative. Training each organization’s  staff in the others’ functions not only helped to identify training needs, but  it also improved communication between the two organizations and  increased their awareness of, and appreciation for, the other.
SSA also assessed the initiative’s impact on the percentage of claimants  awarded benefits, productivity, and costs. While the test results on award  rates and productivity were inconclusive, the test results on costs showed  that the Disability Claim Manager initiative substantially raised costs.  Specifically, SSA found the initiative had the following results:
Higher claims processing costs. SSA estimated that claims processing  costs were 7 percent to 21 percent higher under the Disability Claim  Manager initiative than under the traditional process. The costs for  salaries and for obtaining medical evidence, including consultative  examinations performed by DDS-paid physicians or psychologists,  were higher under the Disability Claim Manager initiative than under  the traditional process. Because of these higher costs, SSA concluded  that claims processing costs would continue to be higher under the  initiative even if productivity—the amount of claims processed per  staff year—improved.
Substantial start-up and maintenance costs. In addition to the higher  claims processing costs, SSA experienced substantial start up costs to  train SSA and DDS employees to function as disability claim managers  and to develop an infrastructure to support the new claims process.  SSA also determined that it would cost more to maintain the staff skills  and the infrastructure required by the Disability Claim Manager  initiative. SSA did not quantify the initiative’s start-up and extra  maintenance costs.
SSA’s evaluation concluded that the benefits of implementing the  Disability Claim Manager initiative were not compelling enough to warrant  its implementation. The primary consideration in reaching this conclusion  was that the initiative would require major resource investments in higher  operational costs, training, and infrastructure. But other factors also  played a part. For example, SSA officials were concerned about the  initiative’s effect on the long-standing relationship between SSA and the  DDSs. Implementing the Disability Claim Manager initiative beyond the  test would require legislation and regulatory changes to permit federal  employees to determine medical eligibility and to permit state employees  to determine nonmedical eligibility. The significant pay disparities  between the federal and state employees performing the same functions as  Disability Claim Managers also would need to be addressed. Because SSA  employees who served as Disability Claim Managers received temporary  promotions, they were generally paid at a higher rate than their DDS  counterparts, only some of whom received promotions during the test.  SSA officials were also concerned about the agency’s lack of progress in  developing an automated disability claims process, which was expected to  support the Disability Claim Manager initiative. According to SSA, such a  system is still years away.
section_title: Prototype Results Are Promising, But Impact on Public Service and Costs is a Major Concern
paragraphs: The Prototype was implemented in October 1999 in DDSs in 10 states and  will continue to operate in these states in its current form no later than  June 2002. The participating DDSs process 25 percent of all initial  disability claims. Preliminary results, which are based on DDS decisions,  indicate that claimants receive benefits earlier from DDSs operating under  the Prototype; DDSs operating under the Prototype award as many  claimants at the initial level as other DDSs operating under the traditional  process award at the initial and reconsideration levels combined, without  compromising the overall accuracy of their decisions. In addition, because  the Prototype eliminates the reconsideration step of the appeals process,  appeals of claims denied under the Prototype reach hearing offices  quicker than claims denied under the traditional process. However,  according to SSA, many more denied claimants would appeal to ALJs  under the Prototype than under the traditional process. More appeals  would result in additional claimants waiting significantly longer for final  agency decisions on their claims and would increase workload pressures  on SSA hearings offices, which are already experiencing considerable case  backlogs. It would also result in higher administrative costs under the  Prototype than under the traditional process. More appeals would also  result in more awards from ALJs and overall and higher benefit costs  under the Prototype than under the traditional process.
Because of this, SSA acknowledged in December 2001 that it would not  extend the Prototype to additional states in its current form. During the  next several months, SSA plans to re-examine the Prototype to determine  what revisions are necessary to decrease overall processing time and  reduce its impact on costs before proceeding further.
The Prototype’s objective is to improve the disability claims process by  ensuring that legitimate claims are awarded as early in the decision  process as possible, thereby improving the fairness, consistency, and  timeliness of SSA’s disability claims process. Toward that end, the  Prototype initiative changes the way DDSs process disability claims, with  the expectation that the changes would reduce the number of awards  made at the ALJ level. The Prototype makes the following changes in the  way DDSs determine disability. The Prototype:
Grants greater decision-making authority to disability examiners. The  disability examiner has the authority to decide when and how to use  medical consultants’ expertise in some cases. The disability examiner  is allowed to independently decide claimants’ eligibility for benefits  without the medical consultant certifying the decision unless the law  mandates otherwise. This change contrasts with the traditional  process, in which the medical consultant signs off on all decisions. The  new process is intended to maximize agency resources by focusing the  attention of medical consultants on those claims for which their  professional training and expertise is most needed.
Requires enhanced documentation and explanation of decisions in the  claims file. The disability examiner is required to develop evidence on  claims more thoroughly and to better explain how the disability  decision was made. This improvement is intended to enhance the  quality of DDS decisions. This improvement also is intended to  enhance the consistency between DDS and ALJ decisions by making  the DDS explanation more useful to ALJs when claimants appeal DDS  decisions to deny benefits.
Adds a claimant conference. If the existing evidence in the claimant’s  file would not support a fully favorable decision, the disability decision- maker is required to offer the claimant an opportunity to submit  additional evidence and to have a personal interview with the decision- maker before a decision is made.
Eliminates DDS reconsideration. The reconsideration step in the  administrative appeal process is eliminated. This streamlines the  disability claims process by allowing dissatisfied claimants the  opportunity to appeal directly to an ALJ.
Claimant conferences are not offered in cases where the claimant has moved and cannot  be located, refuses to cooperate, or other similar situations. through March 2000; the sample of comparison group claims was selected  from applications filed from December 1999 through February 2000.
In July 2001, SSA issued an interim report describing preliminary results as  of May 18, 2001. As of that date, initial DDS decisions had been completed  on virtually all Prototype and comparison group claims; reconsideration  decisions had been completed on 95 percent of comparison group claims  for which reconsideration had been requested so far; and ALJ hearing  decisions had been completed for less than half of the Prototype and  comparison group claims appealed so far. More requests for  reconsideration were still expected, as were more requests for hearings,  especially for the comparison group. SSA cautions that the claims that  have completed processing do not have the same characteristics as those  that take longer to be processed; therefore, final results cannot be fairly  projected. Also, because these results are preliminary, SSA has not yet  completed its analysis to determine whether the differences between the  Prototype DDSs and comparison group DDSs are statistically significant.Thus, it is too early to reach final conclusions about the impact of the  Prototype. However, as shown in the following section, preliminary results  are somewhat promising.
Claims awarded earlier in the process. Under the Prototype, DDSs are  awarding more claims earlier than under the traditional process. DDSs  operating under the Prototype awarded benefits to 40.4 percent of  initial claimants, while DDSs operating under the traditional process  awarded benefits to 35.8 percent of initial claimants and to 39.8 percent  of claimants at the initial and reconsideration levels combined. Thus,  the Prototype awarded benefits to slightly more claimants in one step  than the traditional process awarded in two. SSA estimates that under  the Prototype, claimants received awards about 135 days sooner than  claimants awarded benefits at reconsideration under the traditional  process.
Comparable accuracy. The accuracy of decisions made on initial claims  by DDSs operating under the Prototype was comparable to the  accuracy of decisions made by the comparison DDSs operating under  the traditional process, despite the fact that only DDSs operating under  the Prototype had to learn new procedures. While the accuracy rate  on awarded claims was slightly lower in DDSs operating under the  Prototype than in the comparison group of DDSs operating under the  traditional process (96.6 percent vs. 97.1 percent), the accuracy rate on  denied claims—on which DDSs have historically made more errors  than on awards—was slightly higher under the Prototype (92.4 percent  vs. 91.9 percent). The overall accuracy rate (awards and denials  combined) was also slightly higher under the Prototype (94.1 percent  vs. 93.8 percent).
Initial claim decisions take longer; some final decisions may be quicker.  As shown in table 1, overall it takes an average of 14 days longer for  DDSs to process an initial claim decision under the Prototype (100 days  vs. 86 days) than under the traditional process. Most of this increase  appears due to the addition of the claimant conference under the  Prototype, which is not part of the traditional process. This is  evidenced by the fact that processing time for initial claims was about  the same for awards under the traditional process and under the  Prototype when no claimant conference was held (79 days vs. 80 days).  Adding the claimant conference to the initial DDS decision process  affords claimants who would otherwise be denied benefits an  opportunity to present additional evidence and to have a personal  interview with the decision-maker before a decision is made on their  initial claims. The information presented during the conference can  convince the DDS to award benefits or to reaffirm the denial.  Moreover, the conference can help to improve the quality and quantity  of evidence contained in the file, which can be useful if the case is  appealed to an ALJ.
Table 1 compares the number of days it takes DDSs to process initial  claims under the Prototype vs. the traditional process.
While initial claim decisions take longer under the Prototype, final  decisions on appealed claims may take less time. Specifically, when the  claimant conference results in a decision to deny benefits, eliminating  reconsideration should enable claimants who appeal their denials under  the Prototype to receive quicker decisions on their appeals than those  claimants who appeal their denials under the traditional process. Even  though it takes about 20 days longer to process initial decisions on denied  claims under the Prototype (110 days vs. 90 days), eliminating the DDS  reconsideration step of the appeals process results in appeals reaching  ALJs about 70 days quicker than they would under the traditional process,  according to SSA.
When the claimant conference results in a decision to award benefits,  claimants receive benefits sooner than they would have under the  traditional process. As table 1 shows, when a claimant conference is held,  DDSs operating under the Prototype take 55 days longer than comparison  DDSs operating under the traditional process to make initial award  decisions (134 days minus 79 days). However, under the traditional  process—with no claimant conference—these claimants would have been  denied benefits; the earliest they could receive an award decision under  the traditional process would be after reconsideration. Because the  reconsideration decision would take about 135 days, according to SSA, the  claimant receives an award decision and his or her benefits about 80 days  quicker under the Prototype (the 135 days saved by forgoing  reconsideration minus the 55 days added for processing claims when a  claimant conference is held). Under the Prototype, about 3 out of 100  claimant conferences result in awards, according to SSA.
Despite these promising results, the Prototype’s impact on customer  service and costs has become a major concern to SSA. Since the interim  report was issued, more claims have been processed through the ALJ  level, and these results have convinced SSA that both administrative and  benefit costs would be substantially higher under the Prototype if the  initiative were expanded to other states in its current form. Although the  rate of awards at the ALJ level is lower under the Prototype than under the  traditional process, SSA estimates that about 100,000 more denied  claimants would appeal to the ALJ level under the Prototype. Because of  this, additional claimants would wait significantly longer for final agency  decisions on their claims. This would further increase workload pressures  on SSA hearings offices, which are already experiencing considerable case  backlogs. The additional appeals are also expected to result in more  awards from ALJs and overall under the Prototype than under the  traditional process. SSA told us in December 2001 that the agency would  not expand the Prototype to additional states in its current form. Instead,  it published a notice in the Federal Register on December 28, 2001,  extending the Prototype in the existing 10 states for no longer than 6  months. During the upcoming months, SSA will determine what revisions  it can make to the Prototype to decrease overall processing time and to  reduce its impact on costs before proceeding further.
section_title: Hearings Process Improvement Initiative Implemented Nationwide; Desired Benefits Were Not Achieved
paragraphs: The Hearings Process Improvement initiative has been implemented and is  currently operating in all 138 hearing offices. The initiative was  implemented in hearing offices in phases, without a test, and was  operational nationwide by November 2000. The initiative has not reduced  the time required to process a claim; rather, processing has slowed  considerably. In addition, the backlog of cases waiting to be processed has  increased and is rapidly approaching crisis levels.
The Hearings Process Improvement initiative was intended to improve  customer service by reducing the time it takes to get a decision on an  appealed claim. To reach this end, the initiative introduced changes  designed to ensure efficient case processing. This was to be accomplished  by increasing the level of analysis and screening done on a case before it is  scheduled for a hearing with an ALJ. In addition, the initiative reorganized  hearing office staff into small groups, called “processing groups,” to ensure  better accountability and control in the handling of each claim. Finally,  SSA was to launch automated functions that would facilitate the  monitoring of cases through the hearings process. These changes were  expected to reduce the time it takes to process cases. In addition, the  changes were expected to improve employee job satisfaction and foster a  cooperative work environment.
SSA intended to split its 138 hearing offices into three groups to  implement the initiative in one group at a time so that the required  changes did not occur in all hearing offices simultaneously. Phase one  included over one-quarter of all hearing offices; these offices fully  implemented the initiative between January and April 2000. Phases two  and three, comprising the remaining hearing offices, were scheduled to  begin in October 2000 and January 2001, respectively. However, phase  three was implemented early, in anticipation of expected workload  increases, at the same time as phase two in October 2000. As a result, all  hearing offices had implemented the initiative by November 2000.
The results of the Hearings Process Improvement initiative have been  disappointing for SSA. The initiative has not reduced the time it takes to  approve or deny an appealed case. Rather, the initiative has added 18 days  to the time required for a decision in an appealed claim. In September  2001, after the initiative was implemented, processing time in hearings  offices was 336 days, up from 318 days in September 1999. As a result of  this increase, the initiative failed to achieve its fiscal year 2001 processing  time goal of 208 days. Processing time in phase one hearing offices is not  better than phase two and three hearing offices.
In addition, the number of appealed cases processed has decreased since  the initiative’s implementation. In fiscal year 1999, 597,000 cases were  decided; in fiscal year 2001, this number had decreased 22.1 percent to  465,228 cases. Fewer cases being decided has led to a growth in the  backlog of cases pending a decision. Before the initiative was  implemented, 311,958 cases were pending a decision in September 1999.  Two years later, in September 2001, the number of appealed cases pending  a decision had increased 39.7 percent to 435,904. During this time, the  number of cases received by hearing offices had increased by only 5.7  percent. Therefore, increased workload could be, at most, only a small  part of the explanation for the growth in backlog.
The failure of the Hearings Process Improvement initiative is, in part, the  result of attempts to implement large-scale changes too quickly without  resolving known problems. Problems—process delays, poorly timed and  insufficient staff training, and the absence of important automated  functions—that surfaced during phase one of implementation were not  resolved before additional phases were implemented. Instead, the pace of  implementation was accelerated when phases two and three were  implemented simultaneously.
The Hearing Process Improvement initiative experienced the first  problem, process delays, during phase one of implementation. The  organization of case evidence (referred to as “case pulling”) slowed and as  a result reduced the number of case files ready for ALJ review. A decrease  in the number of case files for ALJs to review consequently reduced the  number of cases that could be scheduled for a hearing and decided upon.  This case-pulling backlog was due to changes in staff responsibilities and  promotions that were a result of the initiative. These changes created a  void of experienced staff to organize and prepare case files for ALJ review.  Managers in hearing offices that implemented the initiative during phase  one recommended to phase two and three hearing offices that they  prepare extra cases for ALJs prior to implementing the initiative. Despite  this feedback, SSA management did not ensure that extra cases were  prepared for ALJs. Consequently, ALJs in phases two and three hearing  offices also had too few cases prepared for their review when the initiative  was implemented.
A second problem, poorly timed and insufficient staff training, contributed  to process delays. While over 2,000 individuals were trained for new  responsibilities given to them as a result of the Hearings Process  Improvement initiative, much of this training was poorly timed and was  provided too early or too late. For example, some employees waited up to  5 months after the initiative was implemented to receive training. In  addition, many employees indicated that the training was ineffective and  did not prepare them for their new responsibilities, according to SSA’s  Office of Workforce Analysis. These training-related problems were not  resolved before implementation continued.
Finally, problems encountered during the initiative’s implementation were  exacerbated by the fact that the automated functions necessary to support  initiative changes never materialized. Enhanced automated functions  could have facilitated the tracking and monitoring of cases and the  transfer of case-related data. However, these functions that would have  facilitated faster processing of cases were not available as designed,  although they had been included in the initiative’s plan. Again, SSA  management failed to resolve this problem before continuing to implement  the initiative.
Hearing offices’ performance may also have been affected by a poor  relationship between SSA and the ALJs. In January 2001, the Social  Security Advisory Board recommended that SSA improve its relationship  with the ALJs by changing its relationship from one of confrontation to  cooperation. A poor relationship between SSA and the ALJs may have  contributed to a lack of stakeholder support for the Hearings Process  Improvement initiative. Among ALJs there was mixed support for the  initiative. Many ALJs indicated that the ALJ union was organized in 1999 in  response to the perception that SSA excluded them in the formation of the  Hearings Process Improvement initiative. However, SSA officials  disagreed with this assertion and said that ALJs were included during the  formation of the initiative.
Finally, the difficulties SSA is experiencing under the Hearings Process  Improvement initiative may also have been made worse by a freeze on ALJ  hiring. Since April 1999, this hiring freeze has prevented SSA from hiring  new ALJs to replace those who have retired. However, the hiring freeze  was temporarily lifted, thereby allowing SSA to hire 126 ALJs in  September 2001. The freeze is still in effect and may impact hearing  offices’ future performance.
In an attempt to address its problems in implementing the Hearings  Process Improvement initiative, SSA management in March 2001 allowed  hearing offices to modify elements of the initiative in hopes of facilitating  and speeding case processing. For example, instead of cases being  handled exclusively within the smaller processing group, SSA allowed  them to be handled by individuals outside of the group. This undercut the  rationale behind the processing groups, which was to heighten  accountability. In addition, with the intention of allowing more cases to  reach ALJs, hearing offices were allowed to reduce the level of screening  and analysis prescribed by the initiative before cases go to the ALJs. These  modifications contradict some of the original objectives of the initiative. In  addition, these modifications make it difficult to tell if the concepts in the  initiative as designed can ever be effective because it has not been  implemented as intended. SSA is currently evaluating the Hearing Process  Improvement initiative to determine what lessons can be learned and what  changes need to be made.
Despite these modifications, case processing has slowed and contributed  to the backlog. SSA’s current backlog is reminiscent of a crisis-level  backlog in the mid 1990’s, which led to the introduction of 19 temporary  initiatives designed to reduce OHA’s backlog of appealed cases. These  temporary initiatives introduced new procedures and reallocated staff.  Among the most long-standing of these initiatives was the Senior Attorney  Program. Under this program, selected attorneys reviewed claims to  identify those cases in which the evidence already in the case file  supported a fully favorable decision. Senior Attorneys had the authority to  approve these claims without ALJ involvement. The Senior Attorney  Program took effect in fiscal year 1995 and was phased out in 2000. During  its existence, the program succeeded in reducing the backlog of pending  disability cases at the hearing level by issuing some 200,000 hearing-level  decisions. However, findings on the accuracy of Senior Attorney decisions  are mixed. One study concluded that the quality of decisions made by  Senior Attorneys generally increased over the period of the initiative,  though falling short of the quality of decisions made by the ALJs. A  second study indicates that the quality of decisions made by Senior  Attorneys is comparable to those made by the ALJs. SSA management  has expressed concern that the Senior Attorney Program is a poor  allocation of resources as it diverts attorneys from processing more  difficult cases in order to process the easier cases.
Finally, SSA faces several challenges that may exacerbate the current  backlog problem. First, recent legislative changes may increase  workloads, according to SSA officials. Certain Medicare coverage  revisions may increase hearing office workloads by introducing a new type  of case for ALJs to review. This new type of case requires ALJs to review  determinations of whether or not a particular item or service will be  covered by Medicare. SSA officials said that this new workload presents  many challenges for OHA because ALJs will be reviewing policy instead of  individual cases and conducting adversarial hearings. Originally expected  to take effect in October 2001, review of this new type of case has been  delayed until regulations are issued. SSA officials hope to isolate the  impact of this new caseload to a separate hearing office unit. Second,  future revisions to the Medicare appeals process may also increase hearing  offices’ workload by broadening the circumstances under which Medicare  cases can be appealed, as well as decreasing the amount of time OHA has  to make a decision, according to SSA officials. These revisions to the  Medicare appeals process will take effect October 2002. Finally, and  perhaps most significantly, SSA is facing a workload increase as the baby  boom generation reaches its disability prone years, making it all the more  vital to resolve this backlog of appealed cases awaiting a decision.
section_title: Appeals Council Process Improvement Initiative Moving in the Right Direction, But Has Not Met Goals
paragraphs: The Appeals Council Process Improvement initiative was implemented in  fiscal year 2000. The initiative introduced new strategies for processing  cases at the Appeals Council with the intent of improving customer service  by reducing processing times and pending caseloads. SSA developed six  new strategies by which to accomplish this, only two of which are  permanent. The four temporary strategies included efforts to add staff  resources from other units. However, the focus of the initiative is currently  on the two permanent strategies. These two new strategies require staff  members to screen for cases eligible for quick action and encourage staff  members to discuss difficult cases with adjudicators before preparing  more time-consuming written analyses.
The Appeals Council Process Improvement initiative has reduced both the  time required to process a case and the backlog of cases awaiting review.  However, the results on both fall short of goals. Processing time in the  Appeals Council was reduced from 458 days (fiscal year 1999) to 447 days  (fiscal year 2001), still falling short of the fiscal year 2001 goal of 285 days.  The backlog of cases awaiting review was reduced from 144,500 (fiscal  year 1999) to 95,400 (fiscal year 2001) but falls short of the fiscal year 2001  goal of 51,100 cases.
According to SSA officials, the impact of the initiative was limited by a  number of factors. First, the initiative originally included the temporary  addition of outside staff to help process cases. This additional support,  however, did not fulfill expectations and has been discontinued. In  addition, SSA officials indicated that the initiative’s impact was limited by  automation problems and policy changes. For example, data storage and  retrieval problems, as well as an inefficient and error-prone case tracking  system, caused process delays. Also, recent policy changes modified how  appealed cases are processed when the claimant has filed a subsequent  application. According to SSA officials, these policy changes raise  complicated adjudicative issues that require more time to resolve.However, SSA management has taken action to resolve these problems,  which SSA officials believe should enhance future progress.
section_title: SSA Has Not Developed a Comprehensive Quality Assurance System
paragraphs: SSA’s original plan to redesign the disability claims process issued in 1994  called for SSA to undertake a parallel effort to revamp its existing quality  assurance system. Progress to date, however, has been limited to a  contractor’s assessment of SSA’s existing quality assurance practices. This  assessment was completed in March 2001. SSA subsequently established  an executive work group to consider what action to take in response to  the contractor report.
Accurate disability decisions are an essential element of good public  service, and SSA has in place several quality review systems to measure  the accuracy of disability decisions made by DDSs and ALJs. At the same  time, SSA has long recognized the limitations of its existing quality  assurance processes and expressed the desire to improve these processes.  In its several revisions to the 1994 redesign plan, SSA continued to voice  the need to develop a more comprehensive quality assurance system  focused on building in quality as disability decisions are made and  improving quality reviews after decisions are made. In its latest disability  management plan, issued in January 2001, SSA stated that its quality  assurance system needed to more effectively promote uniform and  consistent disability decisions across all geographic and adjudicative  levels. We have also recognized that these systems are limited and need to  be improved.
Yet, SSA has made very little progress in developing such a system, at least  in part due to considerable disagreement among internal and external  stakeholders on how to accomplish this difficult objective. As a first step,  SSA contracted with an independent consulting firm with expertise in  designing and developing effective quality assurance systems to assess  SSA’s quality assurance practices used in the disability claims process. In  March 2001, the consulting firm issued its final report.
The consulting firm’s report concluded that SSA could only achieve its  quality objectives for the disability program by adopting a broad, modern  view of quality management. While SSA’s existing quality assurance  practices focus on identifying errors, the broader concept of quality  management encompasses all of the efforts of an organization to produce  quality products. The consulting firm outlined seven requirements of a  “best-practice” quality management system and concluded that SSA’s  existing system is “substantially deficient” in the extent to which it  satisfies each of the requirements. A best practice quality management  system for SSA’s disability claims process would develop a clear operational definition of quality with multiple  dimensions, such as accuracy, timeliness, efficiency, customer service,  and due process; develop and support performance measures that are closely tied to the  definition of quality; support a quality focused culture—that is, employees and management  rather than just the designated quality department must be responsible  for quality. Managers in every component must champion the common  quality objective; provide information that can be used to improve the  disability decision-making process and disability policy; provide employees with the resources to produce quality outcomes and  service and value employees for their contribution to success; ensure that the disability programs are national programs. This should  include a measurement system that can identify variation and a  systematic effort to address variation when it is identified; support statutory and regulatory requirements. This goes beyond  measuring performance as required by statute to providing information  that can address congressional concerns, assist in the analysis of  proposed legislation, and support the monitoring and evaluation of its  implementation.
SSA agreed that it is appropriate and necessary for the agency to go  forward toward transforming the existing quality assurance program into a  broader quality management model. The agency established an executive  work group to decide a future course of action.
section_title: Conclusions
paragraphs: Since 1994, SSA has introduced a wide range of initiatives in an effort to  redesign its disability claims process. In spite of the significant resources  SSA has dedicated to improving the disability claims process, the overall  results—including the results from the five initiatives that are the subject  of this report—have been disappointing. We recognize that implementing  sweeping changes such as those envisioned by these initiatives can be  difficult to accomplish successfully, given the challenge of overcoming an  organization’s natural resistance to change. But the factors that led SSA to  attempt the redesign—increasing disability workloads in the face of  resource constraints—continue to exist today and will likely worsen when  SSA experiences a surge in applications as more baby boomers reach their  disability-prone years.
Today, SSA management faces crucial decisions on how to proceed on a  number of these initiatives. We agree that SSA should not implement the  Disability Claim Manager at this time, given its high costs and the other  practical barriers to implementation at this time. We also agree that the  Appeals Council Process Improvement initiative should continue, but with  increased management focus and commitment to achieve the initiative’s  performance goals. Deciding the future course of action on each of the  remaining three initiatives presents a challenge to SSA. For example, in  the next several months, SSA will face a decision on how to proceed with  the Prototype initiative. Preliminary results indicate that this initiative has  the potential to achieve its objective of significantly reducing the time it  takes for claimants to receive final decisions from SSA on their claims—  first, by awarding more legitimate claims at the initial DDS level and  second, by moving denied claims to the ALJ quicker. However, if the  Prototype is expanded nationwide in its current form, both benefit and  administrative costs will increase. SSA faces the challenge of finding a way  to retain the Prototype’s most positive elements while also reducing its  impact on costs.
We are most concerned about the failure of the Hearings Process  Improvement initiative to achieve its goals. Hearing office backlogs are  fast approaching the crisis levels of the mid-1990’s. At that time, SSA took  a series of actions that, at least in the short term, reduced the backlog.  However, SSA has yet to take actions to successfully address the current  problem on either a short-term or long-term basis. As a result, the problem  will likely worsen. We also are concerned about SSA’s lack of progress in  developing a comprehensive quality assurance system. SSA’s progress has  been slow, despite the agency’s long-term recognition that such a system is  needed. Without such a system, it is difficult for SSA to ensure the  integrity of SSA’s disability claims process.
Finally, given the limited overall success that SSA has experienced in  implementing initiatives to improve its disability claims process over the  last 7 years, it may be time for the agency to step back and reassess the  scope of its basic approach. SSA’s past and current focus on changing the  steps and procedures of the process and adjusting the duties of its  decision-makers has not been effective to date. A new analysis of the  fundamental issues impeding progress may help SSA identify areas for  future action. Such an analysis might include careful consideration of the  areas previously identified by the Social Security Advisory Board, such as  the fragmentation and structural problems in SSA’s overall disability  service delivery system.
section_title: Recommendations
paragraphs: To best ensure that SSA’s disability decision-making process initiatives  improve customer service by providing more timely and accurate  processing of claims, we recommend that SSA take the following actions:  Implement short-term strategies to immediately reduce the backlog of  appealed cases in the Office of Hearings and Appeals. These strategies  could be based on those that were successfully employed to address  similar problems in the mid-1990’s.
Develop a long-range strategy for a more permanent solution to the  backlog and efficiency problems at the Office of Hearings and Appeals.  This strategy should include lessons learned from the Hearings Process  Improvement initiative, the use of limited pilot tests before  implementing additional changes nationwide, and consideration of  some of the fundamental, structural problems as identified by the  Social Security Advisory Board.
Develop an action plan for implementing a more comprehensive and  sophisticated Quality Assurance Program. This plan should include  among other things implementation milestones and estimated resource  needs.
section_title: Agency Comments
paragraphs: SSA agreed with our report’s observations and recommendations. The  agency commented that our recommendations support programmatic  changes under discussion and provide SSA with the necessary latitude to  implement them. With regard to specific recommendations, SSA agreed  that it is critical for SSA to reduce the backlogs at OHA and stated that it  plans to examine its past experiences with prior initiatives and activities to  help develop both short-term and long-term strategies to address the  problem. A major focus of its long-term strategy will be to redirect  significant resources, within budget limitations, to developing and  enhancing technology to support the disability case process at OHA and  the Appeals Council. While we agree with SSA’s efforts to improve its  technological support of the disability case process, we believe that  technology improvements alone will not sufficiently address the problems  at OHA. The agency will also need to focus on addressing the more  fundamental management issues and structural problems that contributed  to the backlog of appeals at OHA and the Appeals Council.
SSA also agreed with our recommendation that it should develop an action  plan for implementing a more comprehensive and sophisticated Quality  Assurance Program. The Commissioner charged the executive workgroup  with defining the components of quality performance and developing  specific pilots that would test several of the Quality Assurance redesign  options being considered. SSA stated that action plans, implementation  milestones, and resource needs for these pilots are currently being drafted.
In addition to its comments on our recommendations, SSA also made  technical comments on our draft report, which we have incorporated  when appropriate. One particular technical comment made by SSA that we  did not incorporate warrants explanation. We compare the results on the  accuracy of decisions made under the Prototype with those made by the  comparison group operating under the traditional process. SSA suggested  that we also compare performance over time--that is, before and after  implementation. While adding this comparison would slightly alter the  relative difference between the Prototype and comparison groups of  DDSs, the end result as described in our report remains the same.  Prototype DDSs performed better overall and on denied claims but less  well on awards.
We are sending copies of this report to the Commissioner of the Social  Security Administration and other interested parties. We will also make  copies available to others on request. If you or your staff have any  questions about this report, please contact me on (202) 512-7215 or Kay  Brown at (202) 512-3674. Key contributors to this report were Ellen  Habenicht, Angela Miles, and Corinna Nicolaou.