Social Security Disability: SSA Must Hold Itself Accountable for Continued Improvement in Decision-making
Published: 1997-08-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO reviewed the Social Security Administration's (SSA) decisionmaking process for disability determinations and efforts to improve the process, focusing on: (1) factors that contribute to differences between disability determination services' (DDS) and administrative law judges' (ALJ) decisions; and (2) SSA's actions to make decisions in initial and appealed cases more consistent.
section_title: What GAO Found
paragraphs: GAO noted that: (1) ALJs made nearly 30 percent of all awards in 1996; (2) because two-thirds of all cases appealed to ALJs have resulted in awards, questions have arisen about the fairness, integrity, and cost of SSA disability programs; (3) differences in assessing applicants' functional capacity and procedural factors, as well as weaknesses in quality assurance, contribute to inconsistent decisions; (4) ALJs are far more likely than DDSs to find claimants unable to work on the basis of their functional capacity; (5) this outcome has occurred even when ALJ and DDS adjudicators review the same evidence for the same case; (6) most notably, DDS adjudicators tend to rely on medical evidence such as the results of laboratory test; ALJs tend to rely more on symptoms such as pain and fatigue; (7) DDS and ALJ decisionmaking practices and procedures also contribute to inconsistent results because they limit the usefulness of DDS evaluations as bases for ALJ decisions; (8) in addition, SSA procedures often lead to substantial differences between the evidentiary records examined by DDS and ALJs; (9) specifically, ALJs may examine new evidence submitted by a claimant and hear a claimant testify; (10) as a result, even with a well-explained DDS decision, ALJs could reach a different decision because the evidence in the case differs from that reviewed by the DDS; (11) SSA has not used its quality review systems to identify and reconcile differences in approach and procedures used by DDSs and ALJs; (12) the quality review systems for the initial level and appeals levels of the decisionmaking process merely reflect the differences between the levels; they do not help produce more consistent decisions; (13) although SSA has not managed the decisionmaking process well in the past, its current process unification initiatives, when fully implemented, could significantly help to produce more consistent decisions; (14) competing workload pressures at all adjudication levels could, however, jeopardize SSA's efforts; (15) as a result, SSA, in consultation with the Congress, will need to sort through its many priorities and be more accountable for meeting its deadlines and establishing explicit measures to assess its progress in reducing inconsistency; and (16) this may include, for example, setting a goal, under the Government Performance and Results Act, to foster consistency in results, set quantitative measures, and report on its progress in shifting the proportion of cases awarded from the ALJ to the DDS level.

section_title: Letter
paragraphs: This report, prepared at your request, evaluates the Social Security Administration’s decision-making process for disability determinations and assesses its efforts to improve the process.
As agreed with your office, we are sending copies of this report to the Commissioner of the Social Security Administration and the Director of the Office of Management and Budget. We will also make copies available to others on request.
If you have any questions about this report, please call me at (202) 512-7215. Other major contributors to this report are listed in appendix IV.
subsections: section_title: Introduction
paragraphs: The Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs are the two largest federal programs providing cash payments to people with long-term disabilities. The DI program, authorized in 1956 under title II of the Social Security Act, provides monthly cash insurance benefits to insured, severely disabled workers. The SSI program, authorized in 1972 under title XVI, provides monthly cash payments to aged, blind, or disabled people whose income and resources fall below a certain threshold. About 2.5 million people apply to the Social Security Administration (SSA) each year for disability benefits.
Between 1985 and 1995, the number of DI beneficiaries increased about 53 percent to about 5.0 million, and the number of working-age SSI recipients increased 81 percent to 2.4 million. In 1995, SSA distributed about $61 billion to these and other disability beneficiaries and spent $3 billion on program administration, which accounted for more than half of SSA’s total administrative expenses.
Both the DI and SSI programs are administered by SSA and state disability determination services (DDS), which determine benefit eligibility. DDSs award benefits to about 35 percent of applicants. Denied applicants may appeal to an administrative law judge (ALJ) in SSA’s Office of Hearings and Appeals (OHA). About a third of all applicants found not disabled by DDSs appeal to an ALJ, and almost two-thirds of claimants who appeal to an ALJ are subsequently found disabled.
Cases appealed to ALJs add considerably to SSA’s administrative expense and increase the time claimants must wait for a decision. The average initial DDS decision in DI cases costs about $540, while a hearing can cost an additional $1,200. In addition, appeals can add an average of 378 days to the length of time that an applicant must wait for a final decision. Moreover, because ALJs award a high percentage of appealed cases that have already been denied twice by the DDS, the integrity of the process is called into question.
subsections: section_title: Claimants May Pursue Several Levels of Appeal
paragraphs: Claimants apply for DI and SSI disability benefits in SSA field offices, which forward these applications, along with any supporting medical evidence, to the appropriate state DDS. A DDS adjudication team, consisting of a disability examiner and a medical or psychological consultant, makes the initial decision on each claim. If the DDS denies a claim, the claimant may ask for reconsideration. For the reconsideration review, a new team of DDS adjudicators makes an independent decision on the basis of its own evaluation of all the evidence, including any new evidence the claimant might submit.
If, after reconsideration, a DDS denies benefits, the claimant may pursue several levels of appeal (see table 1.1) and may introduce new evidence at almost every level. First, the claimant has the right to request a hearing before an ALJ. Before the hearing, the ALJ may obtain further medical evidence, for example, from the claimant’s own physician or by hiring a consultative physician to examine the claimant. The hearing before the ALJ is the first time that a claimant has an opportunity for a face-to-face meeting with an adjudicator. SSA hearings are informal and nonadversarial; SSA does not challenge a claimant’s case.
The claimant and witnesses—who may include medical or vocational experts—testify at the hearing. The ALJ asks about the issues, receives relevant documents into evidence, and allows the claimant or the claimant’s representative to present arguments and examine witnesses. If necessary, the ALJ may further update the evidence after the hearing. When this is completed, the ALJ assesses the effects of the claimant’s medical impairment on capacity to function at work. The ALJ then issues a decision based on his or her assessment of the evidence in the case and is generally authorized to do so without seeking input from a medical professional.
If an ALJ denies an appealed claim, the claimant may request that SSA’s Appeals Council review the case. The Appeals Council may deny or dismiss the request, or it may grant the request and either remand the case to the ALJ for further action or issue a new decision. The Appeals Council’s decision, or the decision of the ALJ if the Appeals Council denies or dismisses the request for review, becomes SSA’s final decision. After a claimant has exhausted all SSA administrative remedies, the claimant has further appeal rights within the federal court system, up to and including the Supreme Court.
Overall, about 49 percent of all applicants receive benefits, most (71 percent) from initial or reconsideration decisions made at the DDS level. About 22 percent of all applicants appeal their cases to ALJs; about two-thirds of all claimants whose claims are denied at the DDS reconsideration level appeal to an ALJ. Overall, about 29 percent of all claims in 1996 were awarded on appeal. Figure 1.1 shows an overview of the disability decision-making appeals process.
section_title: ALJ Procedures Foster Independent Decision-making
paragraphs: ALJs at SSA conduct de novo (or “afresh”) hearings; in other words, they may consider or develop new evidence, and they are not bound by DDS decisions. In addition, the Administrative Procedure Act (APA) protects ALJs’ independence by exempting them from certain management controls.
Although ALJs are SSA employees and generally subject to the civil service laws, the APA protects these staffs’ independence by restricting the extent to which management controls them. For example, ALJ pay is determined by the Office of Personnel Management independently of SSA recommendations or ratings, and ALJs are not subject to statutory performance appraisal requirements. Such safeguards help ensure that ALJ judgments are independent and that ALJs would not be paid, promoted, or discharged arbitrarily or for political reasons by an agency.
ALJs operate under rules that differ from those of appellate courts. After a DDS denial is appealed, an ALJ at SSA holds a de novo hearing, entitling the claimant to have all factual issues determined anew by the ALJ. In contrast, appellate courts generally review the findings of lower courts and only consider whether those courts made errors of law or procedure.
Under the ALJ de novo process, the claimant receives a full in-person hearing from an adjudicator who is fully authorized to hear every aspect of the case. The ALJ hearing is the first time a new claimant is guaranteed the right to testify before an adjudicator.
As SSA employees, ALJs make decisions for the Commissioner and are subject to agency rules and regulations that they must apply in holding hearings and making decisions. Review by the Appeals Council ensures that ALJ decisions follow SSA regulations and rulings. If the Council concludes that the ALJ has not followed agency rules and regulations, the Council can reverse the ALJ decision on its own or send the case back to the ALJ for further action.
Although the ALJ’s review and analysis of an appealed denial must include the case file materials developed by the DDS, the ALJ makes new factual determinations. For example, even though a DDS concludes that an individual can perform work, the ALJ is free to conclude that the individual cannot.
section_title: Differences in Decision Results Are Long-standing
paragraphs: The differences between DDS and ALJ results are a long-standing problem contributing to the growth in OHA backlogs and increased case-processing time, according to our 1996 report on SSA’s efforts to reduce backlogs in appealed decisions. Our review of over 40 internal and external studies of the disability determination and appeals process, several of which were completed more than 20 years ago, led us to this conclusion. In the early 1990s, as part of its efforts to develop a number of strategic priority goals, SSA reviewed many of the same studies and identified inconsistent decisions as a critical issue affecting SSA’s ability to improve its service to the public.
Inconsistent decisions have been evident in program data for many years. For example, since 1986, DDS award rates have ranged from 31 to 43 percent, whereas ALJ award rates have ranged from 60 to 75 percent. As shown in figure 1.2, ALJ awards, as a percentage of total awards, have ranged from 17 percent in 1986 to 29 percent in 1996.
Concerns about comparatively high ALJ award rates are not new. Although many hypotheses for inconsistent decisions have been discussed, explanations for the high rate of ALJ awards have been inadequate or unavailable. In early 1979, congressional hearings focused on high ALJ award rates, and, in 1980, the Congress passed legislation aimed at promoting greater consistency and accuracy of ALJ decision-making. This legislation required SSA to establish a system of reviewing ALJ decisions to ensure that they comply with laws, regulations, and SSA rulings. In January 1982, SSA submitted to the Congress the results of a study on progress made in reviewing ALJ decisions, including the possible causes for ALJ reversals.
Soon after SSA started to perform the quality reviews required by legislation, the Association of ALJs filed suit in federal court. The lawsuit challenged SSA’s plans to target these reviews to judges with high award rates on the grounds that such reviews threatened ALJs’ decision-making independence. The court never ruled on this issue because SSA decided to rescind targeted reviews. ALJ award rates fell temporarily from 62 percent in 1981 to 55 percent in 1983 when SSA was performing its targeted reviews, although other factors could explain the decline. When targeted reviews ended in 1984, however, ALJ award rates started to increase again and have remained at high levels ever since.
section_title: Decision-making Process Yields Much Inconsistency Between DDSs and ALJs
paragraphs: Not only do award rates between DDSs and ALJs differ, but the rates also differ by impairment type and other factors. For example, although DDS award rates vary by impairment, ALJ award rates are high regardless of the type of impairment. As shown in table 1.2, DDS award rates ranged from 11 percent for back impairments to 54 percent for mental retardation. In contrast, ALJ award rates averaged 77 percent for all impairment types with a smaller variation among impairment types.
When age is considered in addition to impairment type, decisions can vary even more widely. Table 1.3 illustrates, for example, how widely DDSs and ALJs can diverge when age is considered in back impairment cases.
section_title: Recent SSA Efforts to Reduce Inconsistency
paragraphs: SSA has long known about its inconsistent decisions and the problems they pose for the disability programs and the agency. SSA has studied the problem and taken several steps to address factors known to contribute to inconsistency between DDS and ALJ adjudicators. In May 1992, SSA’s Commissioner approved a study of the appeals process, later called the Disability Hearings Quality Review Process (DHQRP). This study analyzed the reasons for high ALJ award rates. SSA has issued two reports based on this study, which is ongoing.
Realizing that the inconsistency between DDS and ALJ decisions and the length and complexity of the decision-making process compromised the integrity of disability determinations, SSA began redesigning the process in 1993. In late 1994, it released its Plan for a New Disability Claim Process— commonly referred to as the “redesign plan”—which represents the agency’s long-term strategy for addressing the systemic problems contributing to inefficiencies in its disability processes. To direct the redesign effort, SSA created a management team assisted by top SSA management, various task teams, and state and federal employees involved with disability determinations.
To address inconsistent decisions as a part of redesign, the agency established a process unification task team. This team included a diverse group of 29 SSA and DDS employees who, in addition to their own expertise, sought information from other sources and reviewed data from SSA’s DHQRP study of the appeals process. In November 1995, the task team issued its final report. SSA established an intercomponent group to develop specific actions to support consistent disability decisions and a senior executive group to enforce needed changes. In July 1996, the SSA Commissioner approved the group’s recommendations for several initiatives designed to reduce inconsistent decisions by DDSs and ALJs.
subsections: section_title: SSA Faces Several Competing Workloads
paragraphs: In addition to SSA’s recent efforts to address inconsistent DDS and ALJ decisions, the agency faces significantly increasing workloads at all levels of adjudication. In particular, several congressional mandates will compete for time and resources with process unification efforts. For example, the Social Security Independence and Program Improvements Act of 1994 and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 require hundreds of thousands more continuing disability reviews (CDR) to ensure that beneficiaries are still eligible for benefits. By law, SSA must conduct CDRs for at least 100,000 more SSI beneficiaries annually through fiscal year 1998. In 1996, the Congress increased CDR requirements for children on SSI, requiring CDRs at least every 3 years for children under age 18 who are likely to improve and for all low birth weight babies in the first year of life. In addition, SSA is required to redetermine, using criteria for adults, the eligibility of all 18-year-olds on SSI beginning on their 18th birthdays and to readjudicate 332,000 childhood disability cases by August 1997. Finally, thousands of noncitizens and drug addicts and alcoholics could appeal their benefit terminations, further increasing SSA’s workload.
section_title: SSA Includes Performance Goals for Disability in Its Government Performance and Results Act Plan
paragraphs: The Government Performance and Results Act (the Results Act) of 1993 requires federal agencies to be more accountable for the results of their efforts and their stewardship of taxpayer dollars. The Results Act shifts the focus of federal agencies from traditional concerns, such as staffing and activity levels, to results. Specifically, the act directs agencies to consult with the Congress and obtain the views of other stakeholders and to clearly define their missions. It also requires them to establish long-term strategic goals as well as annual goals linked to the strategic goals. Agencies must then measure their performance toward these goals and report to the President and the Congress on their progress.
The Results Act’s initial implementation involves about 70 pilot tests during fiscal years 1994 through 1996 to provide agencies with experience in meeting its requirements before governmentwide implementation in the fall of 1997. As a pilot agency, SSA submitted its fiscal year 1996 annual performance plan to the Office of Management and Budget in May 1995. Specifically, the plan includes the strategic goals of (1) rebuilding confidence in Social Security, (2) providing world-class service, and (3) creating a supportive environment for SSA employees. It also includes a broad range of measures for disability and appeals-related performance outputs and outcomes.
section_title: Objectives, Scope, and Methodology
paragraphs: In 1995 testimony before the Subcommittee on Social Security, House Committee on Ways and Means, we reported on the timeliness and consistency of DDS and ALJ disability determinations. After our testimony, the Chairman asked us to examine the differences between DDS and ALJ decisions in more detail. Specifically, we agreed to (1) ascertain the factors contributing to inconsistent decisions by DDSs and ALJs and (2) identify SSA’s efforts to address inconsistent decisions. We reported our preliminary findings in testimony earlier this year.
To respond to the first objective, we divided the possible contributing factors into three types: (1) factors related to differences in RFC assessments made by DDSs and ALJs, (2) procedural factors that contribute to differences in decisions, and (3) use of quality reviews to manage the process.
In conducting our review, we examined existing studies, SSA’s regulations and program operations memoranda, and court cases related to the disability programs. We also obtained and analyzed program and statistical data; see appendix I for details. In addition, we interviewed DDS and SSA officials, including ALJs and OHA staff. We also attended SSA’s nationwide process unification training.
We performed our review at SSA headquarters in Baltimore, Maryland; OHA headquarters in Falls Church, Virginia; and at SSA and DDS offices in Atlanta, Boston, and Denver. We conducted our review between October 1995 and June 1997 in accordance with generally accepted government auditing standards except that we did not verify agency data.
section_title: Disability Decision-making: A Complex Process Requiring Much Judgment
paragraphs: SSA requires that DDS and ALJ adjudicators follow a standard approach— called the sequential evaluation process—for making disability determinations. Although standard, the process requires adjudicators to make several complex judgments. For example, if adjudicators cannot allow the claim on the basis of medical evidence only, they must make judgments on whether claimants can perform prior or other work available in the national economy despite their disabling conditions. Such determinations may involve not only residual functional capacity (RFC) assessments, but consideration of these assessments along with the claimant’s age, education, and skill levels.
To reduce the amount of judgment involved, SSA has developed medical- vocational rules. In general, the older, less educated, and less skilled the claimant, the more likely these rules will direct the adjudicator to award benefits. For claimants with functional and vocational profiles that do not fit the rules, however, adjudicator decision-making is less prescribed. In addition, before making any decision, adjudicators must decide how much weight to give to various sources of evidence and evaluate the reasonableness and consistency of any allegations the claimant makes about pain or other symptoms.
subsections: section_title: DDSs and ALJs Use a Standard Approach, the Sequential Evaluation Process
paragraphs: To determine whether applicants meet the Social Security Act’s definition of disability, SSA regulations provide DDS and ALJ adjudicators with a sequential evaluation process (see table 2.1). Although the process provides a standard approach, determining disability requires a number of complex judgments.
For people 18 or older, the act defines disability under the DI and SSI programs as the inability to engage in substantial gainful activity by reason of a severe physical or mental impairment that is medically determinable and has lasted or is expected to last at least 1 year or result in death.Moreover, the impairment must be of such severity that a person not only is unable to do past relevant work, but, considering age, education, and work experience, is also unable to engage in any substantial work available in the national economy.
Applicants are denied benefits at step 1 if they are engaged in substantial gainful activity. At step 2, adjudicators further screen applicants by assessing whether they have a severe impairment, defined by the regulations as an impairment that has more than a minimal effect on the applicant’s ability to perform basic work tasks. For those whose impairments have more than a minimal effect on ability to work, adjudicators then begin determining whether the applicant’s impairments are severe enough to qualify for disability benefits.
subsections: section_title: Does the Applicant Qualify Under SSA’s Listing of Impairments?
paragraphs: In step 3 of the sequential evaluation process, adjudicators compare the applicant’s medical condition with medical criteria found in SSA’s Listing of Impairments—referred to as “the medical listings”—which are published in SSA’s regulations. The listings delineate over 150 categories of medical conditions (physical and mental) that, according to SSA, are presumed to be severe enough to ordinarily prevent an individual from engaging in any gainful activity. For example, corrected vision of 20/200 or less, amputation of both hands, or an intelligence quotient of 59 or less would ordinarily qualify an individual for benefits.
An applicant may automatically qualify for benefits if the adjudicator concludes that the laboratory findings, medical signs, and symptoms of one of the applicant’s impairments meet the specific criteria for medical severity cited in the listings for that impairment and the applicant is not engaging in substantial gainful activity. If an applicant’s medical condition does not meet the listed criteria or if the impairment is not listed, then the adjudicator must determine whether the applicant’s impairment is the medical equivalent of one in the listings.
The medical severity criteria for listed mental impairments are generally more subjective than those for physical impairments. For most mental impairments in the listings, many of the severity criteria are defined by functional limitations. Determining whether a mental impairment meets or equals the listed criteria often requires subjective evaluations about (1) restrictions of daily activities; (2) difficulties in maintaining social functioning; (3) deficiencies in concentration, persistence, or pace that result in failure to complete tasks in a timely manner; and (4) episodes of deterioration in work settings that cause the individual to withdraw or have exacerbated signs and symptoms. For example, adjudicators must decide whether the impairment has any impact at all on activities of daily living or on social functioning, and, if so, rate the impact as slight, moderate, marked, or extreme.
By contrast, the listed criteria for physical impairments generally are more objective, relating to medical diagnosis and prognosis, rather than the assessment of functional limitations in the mental listings. Determining whether the medical findings for a physical impairment meet or equal these criteria is a matter of documentation and is often more a question of medical fact than opinion. In some instances, however, the criteria for physical impairments also require that adjudicators assess functional limitations. For example, for applicants with human immunodeficiency virus, adjudicators assess their symptoms or signs, such as fatigue, fever, malaise, weight loss, pain, and night sweats as well as their subsequent effect on activities of daily living and social functioning. For musculoskeletal and other impairments, adjudicators assess the importance of pain in causing functional loss when it is associated with relevant abnormal signs and laboratory findings. Adjudicators must also carefully determine that the reported examination findings are consistent with the applicant’s daily activities.
section_title: Can the Applicant Perform Past Relevant Work?
paragraphs: When medical evidence does not show that an applicant’s condition meets or equals the severity criteria in the listings, adjudicators must determine whether the applicant can perform past work. To do this, adjudicators use judgment when they assess an applicant’s RFC—that is, what an applicant can still do, despite physical and mental limitations, in a regular full-time work setting.
To assess RFC, adjudicators must consider all relevant medical and nonmedical evidence, such as statements of lay witnesses about an individual’s symptoms. In considering medical evidence, adjudicators must evaluate medical source opinions and judge the weight to be given to each opinion. Adjudicators also often evaluate issues involving pain or other symptoms and judge whether the applicant’s impairment could reasonably be expected to produce the applicant’s symptoms.
Assessing physical RFC requires adjudicators to judge individuals’ ability to physically exert themselves in activities such as sitting, standing, walking, lifting, carrying, pushing, and pulling. Adjudicators also assess the effect of the individual’s physical impairment on manipulative or postural functions such as reaching, handling, stooping, or crouching. Assessing mental RFC requires adjudicators to judge the individual’s functional abilities such as understanding, remembering, carrying out instructions, and responding appropriately to supervision, coworkers, and work pressures.
After assessing an applicant’s RFC, the adjudicator compares it with the demands of the applicant’s prior work. The adjudicator either concludes that the applicant can perform his or her prior work and denies the claim or proceeds to the last step (step 5) in the sequential evaluation process.
section_title: Can the Applicant Perform Other Work in the National Economy?
paragraphs: At step 5, adjudicators evaluate whether applicants unable to perform their previous work can do other jobs that exist in significant numbers in the national economy. If the adjudicator concludes that an applicant can perform other work, the claim is denied. Again, adjudicators must apply judgment to determine whether an applicant can perform other work in the national economy, depending on whether the applicant’s limitations are exertional or nonexertional.
An applicant has exertional limitations when his or her impairment limits the ability to perform the physical strength demands of work. For this evaluation, SSA places a claimant into one of five categories of physical exertion—sedentary, light, medium, heavy, and very heavy—with sedentary work requiring the least physical exertion of the five levels (see table 2.2). On the basis of an applicant’s RFC, adjudicators must judge which of the five exertional categories is the most physically demanding work the individual can perform. For an applicant whose maximum physical ability matches one of the five exertional categories of work, SSA provides medical-vocational rules that direct the adjudicator’s decision on the basis of the claimant’s age, education, and skill levels of prior work experience.
Table 2.3 shows how the medical-vocational rules direct decisions for people aged 50 or older who are limited to sedentary work.
In general, the older a person is, the more likely SSA’s medical-vocational rules direct adjudicators to award benefits. For example, under the rules for those whose maximum physical capacity limits them to performing sedentary work, applicants aged 50 or older qualify for benefits under four of the scenarios shown in table 2.3. Those aged 45 through 49, however, qualify under only one scenario; applicants aged 18 through 44 qualify under no scenario (see table 2.4).
Although SSA’s medical-vocational rules reduce the degree of judgment that adjudicators must use in many cases, SSA has no rules to direct adjudicators’ decisions for other cases. These include cases in which (1) the applicant’s maximum strength capability does not match any of the five exertional levels or (2) the applicant’s primary limitations are nonexertional (or unrelated to the physical strength demands required for sitting, standing, walking, lifting, carrying, pushing, and pulling). In such cases, the medical-vocational rules can provide a guide for evaluating an applicant’s ability to do other work, but the regulations instruct adjudicators to base their decisions on the principles in the appropriate sections of the regulations, giving consideration to the medical-vocational rules for specific case situations. For example, an applicant may be restricted to unskilled sedentary jobs because of a severe cardiovascular impairment. If a permanent injury of the right hand also limits the applicant to only those sedentary jobs that do not require bilateral manual dexterity, then the applicant’s work capacity is limited to less than the full range of sedentary work. The ability to do less than the full range of sedentary work is not one of the five exertional levels defined in SSA’s regulations; therefore, no medical-vocational rules would direct the adjudicator’s decision.
On the basis of Department of Labor data, SSA estimates that approximately 200 unskilled occupations exist, each representing many jobs that can be performed by people whose limitations restrict them to the full range of sedentary work. But, if an applicant is limited to less than the full range of sedentary work, the adjudicator must determine the extent to which the exertional and nonexertional limitations reduce the occupational base of jobs, considering the applicant’s age, education, and work experience, including any transferable skills or education providing for direct entry into skilled work. The mere inability to perform all sedentary unskilled jobs is not sufficient basis for a finding of disability. The applicant still may be able to do a wide range of unskilled sedentary work.
section_title: Adjudicators Must Weigh Evidence and Reasonableness of Symptom Allegations
paragraphs: Before making any decision, an adjudicator must assess the amount of weight to give to the various sources of evidence and evaluate the reasonableness and consistency of any allegations from applicants about pain or other symptoms.
To provide a basis for determining disability, the adjudicator must gather existing medical evidence, which includes (1) opinions of physicians or psychologists who have had an ongoing treatment relationship with the applicant and (2) hospitals, clinics, and other medical sources that have treated or evaluated the applicant but not on an ongoing basis. In addition, adjudicators may develop new medical evidence obtained from consulting sources. Medical evidence includes (1) medical history; (2) clinical findings, such as the results of physical or mental status examinations; (3) laboratory findings, such as blood pressure and X rays; (4) statement of the diagnosis of the disease or injury based on its signs and symptoms; and (5) treatment prescribed and prognosis. Medical evidence also includes statements from treating physicians or other medical sources describing work-related activities, such as sitting, standing, walking, and lifting, that the applicant can still do despite his or her impairments. In the case of mental impairments, statements should describe the applicant’s ability to understand, carry out, and remember instructions and respond appropriately to supervision, coworkers, and work pressures. In making a decision, an adjudicator must assess how much weight to give to each medical source’s statement of opinion. Table 2.5 describes the factors to be considered in weighing opinions.
Adjudicators also must evaluate whether an applicant’s impairment could reasonably be expected to produce the reported symptoms—such as pain, fatigue, shortness of breath, weakness, and nervousness. This requires the adjudicator to assess the extent to which an individual’s symptoms are consistent with (1) the objective medical evidence (medical signs and laboratory findings); (2) evidence, such as statements from the applicant, medical sources, family, friends, or employers about the applicant’s medical history, diagnosis, prescribed treatment, activities of daily living, and efforts to work; (3) information from social welfare agencies, nonmedical sources, and other practitioners, such as chiropractors and audiologists; and (4) any other evidence of the applicant’s impairment’s effect on his or her ability to work.
If the adjudicator concludes that the impairment could reasonably be expected to produce the reported symptoms, the adjudicator must then evaluate the intensity and persistence of the symptoms to determine how the symptoms limit the applicant’s ability to work. In making such an evaluation, adjudicators look for objective medical evidence obtained through clinical and laboratory diagnostic techniques, such as evidence of reduced joint motion, muscle spasm, sensory deficit, or motor disruption. However, adjudicators cannot reject an applicant’s statements about the intensity and persistence of pain or other symptoms or about the effect of these symptoms on the ability to work solely because the available objective medical evidence does not substantiate the applicant’s statements. Because symptoms reported by the applicant sometimes suggest a more severe impairment than can be shown by objective medical evidence alone, adjudicators must carefully consider any other information provided by the applicant, treating sources, or other people about the applicant’s pain or other symptoms. Following are the factors that adjudicators must consider in assessing pain and other symptoms: activities of daily living; location, direction, frequency, and intensity of the pain or other symptoms; precipitating and aggravating factors; type, dosage, effectiveness, and side effects of any medication the applicant takes or has taken to alleviate pain/symptoms; treatment, other than medication, the applicant is receiving or has received for relief of pain or other symptoms; any measures the applicant uses or has used to relieve pain or other symptoms, such as lying flat on back, standing for 15 or 20 minutes every hour, and sleeping on a board; and other factors concerning the applicant’s functional limitations and restrictions due to pain or other symptoms.
section_title: DDSs and ALJs Differ Most When Assessing Residual Functional Capacity
paragraphs: SSA studies show that DDS and ALJ decisions most often differ because adjudicators make different conclusions about applicants’ ability to function in the workplace. At the DDS and ALJ levels, two different types of professional staff perform residual functional capacity (RFC) assessments. At the DDS, medical staff perform the assessments; at the ALJ level, the ALJ performs them. ALJs may seek the advice of medical experts, but they do so infrequently. Study results also suggest that DDSs and ALJs differ in their assessments of the opinions of applicants’ own physicians.
SSA has conducted studies of the differences between DDS and ALJ decisions and has identified key issues. To improve consistency of decisions, the agency has recently published policy clarifications, conducted training for all disability adjudicators, and is now starting to evaluate the impact of this training. SSA also plans to develop a single presentation of policy to be used by both DDSs and ALJs.
subsections: section_title: Most ALJ Awards Result From RFC Assessments That Differ From Those of DDSs
paragraphs: Differing DDS and ALJ assessments of a claimant’s capacity to function in the workplace are the primary reason for most ALJ awards. Under the sequential evaluation process, almost all DDS denial decisions appealed to ALJs include an RFC assessment. On appeal, ALJs also follow the same sequential evaluation process and assess the claimant’s functional ability in most awards they make. Both the ongoing Disability Hearings Quality Review Process (DHQRP) study and a study conducted by SSA in 1982 note the importance of differences in assessing RFC. (See app. II for more details on these studies’ results.)
Decisions in cases involving physical impairments clearly reflected differences in assessing RFC. Table 3.1 presents data from SSA’s DHQRP study on physical impairment cases in which ALJs made awards on the basis of RFC assessments. The table compares the ALJ decisions with those of reviewers who used the DDS approach and examined the written evidence available to the ALJ. These data indicate that ALJs are significantly more likely than DDS medical consultants to find that applicants have very limited work capacity.
In the view of awarding ALJs, 66 percent of the cases merited a “less than the full range of sedentary work” assessment—a classification that often leads to an award. In contrast, the medical consultants who performed the RFC assessment using the DDS approach found that less than 6 percent of cases merited this classification. The DDS and ALJ adjudicators also differed in the other classifications.
In addition, high ALJ award rates for claimants with mental impairments often reflect different assessments of functional limitations. Even ALJ mental impairment awards based on the listings reflect these differences because most such listings require adjudicators to assess functional limitations in addition to determining the claimant’s medical condition.
A study known as the Bellmon Report, which controlled for differences in evidence, also found that differing RFCs played a role in differing DDS and ALJ decisions. This study found that DDS and ALJ adjudicators reached different results even when presented with the same evidence. As part of the study, two groups of reviewers looked at selected cases. One group reviewed the cases as ALJs would, and the other reviewed the cases as DDSs would. Reviewers using the ALJ approach concluded that 48 percent of the cases should have received awards; reviewers using the DDS approach concluded that only 13 percent of those same cases should have received awards.
section_title: DDSs and ALJs Differ in Their Decision-making Approaches
paragraphs: We identified specific differences in DDSs’ and ALJs’ approach to their decisions. First, medical staff have different roles at the two levels. In addition, DDSs and ALJs respond differently to (1) the opinions of claimants’ physicians and (2) claimants’ statements about symptoms such as pain.
subsections: section_title: DDSs and ALJs Use Medical Expertise Differently
paragraphs: Medical experts play different roles in the DDS and ALJ decision-making approaches. At the DDS, medical or psychological consultants assess RFC of applicants. In contrast, ALJs may consult with medical experts but have sole authority to make the RFC finding. ALJs sought the advice of medical experts in only 8 percent of cases resulting in awards, according to our analysis.
Both the Bellmon and DHQRP studies compared RFC assessments made by SSA medical staff using the DDS approach with those made by awarding ALJs. According to both studies, medical staff tended to find that claimants had higher capacities to function in the workplace than the ALJs found.
section_title: DDSs and ALJs Seem to Differ in Their Reliance on Treating Physicians’ Opinions
paragraphs: Under SSA regulations, adjudicators must consider the opinions of treating physicians who have an ongoing treatment relationship with the claimant. Such an opinion might include, for example, a statement that a claimant “cannot stand or walk for more than two hours total in a day.” In the disability determination, adjudicators must give controlling weight to these treating source opinions provided they are (1) well supported by medically acceptable clinical and laboratory diagnostic techniques and (2) consistent with the other substantial evidence in the record. A treating physician’s statement, however, that a claimant is “disabled” or “unable to work” does not bind adjudicators.
Treating physicians’ opinions, however, seem to influence DDSs and ALJs differently. The DHQRP study found that the treating physician’s report was one of the five most frequent reasons for ALJ awards. This implies that ALJs tended to give controlling weight to the treating physician’s opinion, while DDS adjudicators were more likely to focus on assessing that opinion in conjunction with other medical evidence in the case file.
section_title: Reports of Symptoms and Claimants’ Credibility Also Affect Differences, but Extent Is Unknown
paragraphs: A second factor contributing to differing DDS and ALJ decisions is the impact of symptoms (for example, pain, fatigue, or shortness of breath) reported by the claimant but not identifiable in laboratory tests or confirmable by medical observation. Like the opinions of the claimant’s own physician, assessment of symptoms is important in the disability decision. Adjudicators must assess symptoms by determining (1) whether the medically determinable impairments could reasonably be expected to produce such symptoms and (2) the intensity, persistence, and functionally limiting effects of the symptoms. According to SSA, adjudicators must assess the claimant’s credibility on the basis of the entire case record to make a determination about these symptoms’ effects. DDSs generally make such assessments on the basis of the case file (for example, statements made by applicants on the application or reports from medical sources that record applicants’ comments). ALJs have additional evidence because they have the opportunity to consider the claimant’s testimony in a hearing. Moreover, claimant credibility has a significant impact on ALJ decisions.
The DHQRP study identified the credibility of the claimant and claimants’ allegations about pain as two of the top five reasons for an ALJ allowance decision. The impact of these reasons on DDS decisions is more difficult to assess. However, during the DHQRP study, reviewers using the DDS approach listened to tapes of claimant testimony in a small sample of 50 cases. The study concluded that claimant testimony had no or minimal impact on those adjudicators.
section_title: Effect of Differences in Policy Documents Difficult to Assess
paragraphs: SSA adjudicators use two different sets of documents as criteria for disability decisions, which some believe contributes to inconsistent decisions. DDS adjudicators must follow a detailed set of policy guidelines, called the Program Operations Manual System (POMS). The POMS for disability contains detailed interpretations of laws, regulations, and rulings as well as procedural instructions on deciding cases. ALJs, on the other hand, rely directly on the laws, regulations, and Social Security Rulings (SSR) for guidance in making disability decisions. The latter documents are generally shorter and much less prescriptive than the POMS.
This difference in policy documents, along with the difference in decisions between the DDSs and ALJs has led to the belief by some that there are two standards—or at least two different interpretations of policy. A 1994 Inspector General survey of DDS and ALJ opinion found that the DDSs’ strict application of POMS—as opposed to the ALJs’ direct application of disability law and regulations—was considered to have a strong effect on allowance rates by over half of those surveyed. Similarly, the Bellmon Report stated that, “SSA has long recognized that the standards and procedures governing decisions by DDSs and ALJs are not entirely consistent.”
The type and extent of these differences have proven difficult to quantify, however. For example, the Bellmon Report identified significant differences in DDS and ALJ decisions based on impairments considered not severe. The study then identified differences in the regulations and POMS on this issue. The study concluded, however, that the two written standards, “while different, (were) not widely divergent.” As such, it remains unclear whether the differences derive from the standards or from their differing application. Nevertheless, although their relative impact has not been quantified, policy differences cannot be discounted as a potential reason for inconsistent decisions.
section_title: SSA Is Taking Actions to Improve Consistency of Decisions
paragraphs: SSA has taken or planned several initiatives to make disability decisions more consistent. In July 1996, SSA issued nine SSRs to address several of the factors we identified as contributing to inconsistent decisions. For example, one of the new rulings reminds ALJs that they must obtain expert medical opinion in certain types of cases. Another ruling clarifies when adjudicators must give the opinion of a treating physician special consideration. A third ruling states that an RFC of less than the full range of sedentary work is expected to be relatively rare. SSA also plans to issue a regulation to provide additional guidance on assessing RFC for both DDSs and ALJs, specifically clarifying when a less-than-sedentary classification is appropriate.
In addition, partly on the basis of the nine rulings, SSA completed nationwide process unification training between July 10, 1996, and February 26, 1997. SSA officials pointed out that this training was the first time that the agency had brought together DDS and ALJ staff to share their views. The training represented a major effort—15,000 adjudicators and quality reviewers received 2 full days of training, coordinated by facilitators in SSA headquarters using a broadcast system. SSA has also started to evaluate the impact of the new rulings and training by collecting data before and after the new rulings and training.
Furthermore, SSA recently compared the policy language in the POMS with disability law, regulations, and SSRs and concluded that no substantive differences in policy existed. SSA did find some differences in wording and detail, however, that could lead to a perception of differences. To address this matter, SSA plans to develop a single policy presentation to be used by both DDSs and ALJs. To this end, the agency is using exactly the same words in any new regulation, ruling, and POMS publication. It has already done this, for example, for the SSRs on which the process unification training was based. SSA eventually plans to have all adjudication policy in the form of regulations or SSRs so that they are binding on ALJs as well as DDS adjudicators.
In the longer term, SSA also plans under redesign to develop new, more valid, and reliable functional assessment/evaluation instruments relevant to today’s work environment. Because current differences in RFC assessments are the main reason for inconsistent decisions, however, SSA should proceed cautiously and test any new decision-making methods to determine their effect on consistency as well as on award rates before widespread implementation.
section_title: DDS Evaluations of Limited Use to ALJs
paragraphs: ALJs often cannot fully understand how DDS denial decisions have been made because DDS written evaluations provide neither clear explanations nor justifications for the findings and conclusions reached. Therefore, the evaluations often do not lay a solid foundation for subsequent appeals. For instance, the basis of the DDS’ residual functional capacity (RFC) assessment is often unclear, leaving the ALJ without full understanding of the reasoning that led to the DDS denial. Furthermore, explanations of how the DDS considered evidence that ALJs might later rely on, such as the opinions of the claimants’ own physicians, may often be missing from the case file or are not fully developed. As a result, ALJs often cannot rely on the evaluations as developed by the DDSs.
SSA has plans to change the process to improve the documentation of DDS evaluations so they can better serve as a foundation for ALJ decisions. These plans include requiring clear DDS explanations of the reasoning used to support reconsideration denials and improving development of evidence at the DDS. SSA also plans to return a selected number of cases involving new evidence from the ALJ level to DDSs for their reconsideration. Together, these changes in procedures will better serve as a foundation for appeals, improving the consistency of DDS and ALJ decisions.
subsections: section_title: DDS Medical Consultants Often Inadequately Explain RFC Assessments
paragraphs: As discussed in chapter 3, inconsistent decisions between DDSs and ALJs are due mainly to differences in RFC assessments. Studies show that DDS medical consultants often inadequately explain their conclusions, including those about an applicant’s RFC. Such explanations, if improved, could be more useful in ALJ decision-making. In fact, SSA’s policy is that an ALJ, when making an RFC assessment, must consider the opinion of the DDS medical consultant.
To this end, SSA requires DDS medical consultants to record explanations of their reasoning. In particular, the agency asks medical consultants to fully describe how they used the medical evidence to draw their conclusions about an applicant’s RFC. RFC forms and procedures require that medical consultants discuss in writing how the medical evidence in the case file supports or refutes an applicant’s allegations of pain or other symptoms. Finally, the RFC forms also require medical consultants to explain how conflicts among treating physician opinion and other medical evidence in the case file were resolved.
Disability Hearings Quality Review Process (DHQRP) data, however, indicate that existing SSA procedures do not ensure that DDS decisions are well documented. Specifically, procedures require the disability examiner to prepare supplementary explanations when the resolution of key issues is not well documented elsewhere in the case file. The DHQRP study of appealed reconsideration denials found that in about half the cases that hinged on complex issues—such as conflicts with the treating physician’s opinion, assessment of RFC, and weighing of allegations regarding pain or other symptoms—DDS documentation failed to explain how these issues were resolved. The insufficient documentation of the underlying medical analyses limited their usefulness during the appeal process.
section_title: ALJ Awards Are Often Based on Information Not Available to DDSs
paragraphs: Although ALJs use the medical evidence assembled by DDSs, they often base their decisions on additional documentary or testimonial evidence. This both contributes to inconsistent decisions and makes it difficult to reconcile those differences. Procedures at the hearings level, such as longer time frames for evidentiary development and permitting the introduction of new information, result in the availability of new documentary evidence for appeal cases. In addition, testimony during the face-to-face hearing and the opportunity it provides for further assessing the claimant’s credibility provide new information not in DDS case files.
subsections: section_title: Additional Medical Evidence Results in ALJ Awards
paragraphs: SSA studies show that in many instances introducing additional documentary evidence at the hearing level results in an ALJ’s awarding benefits. DHQRP data show that about three-quarters of the appealed cases sampled contained new evidence. The study estimated that 27 percent of the hearing awards hinged on additional evidence, resulting in an assessment of a more severe impairment or a more restrictive RFC. In addition, the Bellmon Report found that when new evidence was removed from the case file, the ALJ award rate decreased from 46 to 31 percent. This study also found that approximately three-quarters of new documentary evidence was medical in nature rather than, for example, statements of friends and associates.
One reason that appeals cases have additional evidence is that ALJ procedures allow for more time to be spent on evidence development. Although SSA regulations stipulate that “every reasonable effort” be made to obtain necessary evidence, DDS guidelines state that evidence should generally be gathered within 30 calendar days. ALJ guidelines, however, provide a time frame for evidence gathering that is almost twice as long and can be extended if necessary.
In addition, ALJs responding to an Inspector General (IG) survey believed that DDSs often fail to adequately develop evidence to show the true nature and extent of an applicant’s disability. The ALJs attributed some of this to a lack of adequate resources at the DDSs and pressures to dispose of cases.Also, surveyed ALJs said that DDS problems with developing evidence, particularly medical evidence, contribute to their reversals of DDS denials. In an earlier survey we conducted of DDS administrators, almost two-thirds responded that workload and staffing pressures had affected the accuracy of denial decisions. Seven DDS administrators (14 percent) said the harmful effect on the accuracy of denial decisions was great or very great.
Finally, the presence of attorneys or others who represent the claimant’s interests may also result in the presentation of new evidence during an appeal. Because attorneys are generally paid only when decisions favor their clients, they are motivated to find and present additional evidence. Although few claimants hire attorneys or other representatives at the DDS level, DHQRP data showed that representatives attended 81 percent of ALJ hearings.
section_title: Claimant Testimony Appears to Result in ALJ Awards
paragraphs: With few exceptions, ALJ hearings present a claimant’s first opportunity for face-to-face contact with a disability adjudicator. Studies show that face- to-face encounters with claimants appear to account for a significant number of ALJ reversals. Specifically, in the DHQRP study, reviewing ALJs believed that a favorable assessment of the claimant’s credibility is a factor in 34 percent of sampled hearing allowances. Although DDSs and ALJs also assess credibility from case file information, testimony received at a hearing appears to especially influence ALJs when assessing the credibility of a claimant’s subjective allegations such as the effect of pain on functioning.
The IG’s 1994 report showed that nearly 60 percent of ALJs surveyed believed that the claimant’s appearance before an ALJ strongly affects awards; 90 percent believed it has a moderate to strong effect. Furthermore, the Bellmon Report found that the ALJ award rate decreased by about 17 percentage points when evidence from the claimant’s record of testimony was removed from the case file.
section_title: New Impairment Claims Also Result in ALJ Awards
paragraphs: Because claimants may offer new documentary and testimonial evidence at an ALJ hearing, they can also change their impairment type or add a new, secondary impairment, which also affects consistency of DDS and ALJ decisions. Moreover, in about 10 percent of cases appealed to the ALJ level, claimants switch the basis of their primary impairment from a physical claim to a mental claim. Under current procedures, the DDS lacks the opportunity to routinely consider these switched claims, then incorporate this consideration in their analysis, thus providing the ALJ with a basis for confirming or rejecting the new impairment claim.
section_title: Effect of Other Factors Does Not Appear Major or Is More Difficult to Substantiate
paragraphs: In addition to inadequately explained RFC assessments and new evidence submitted on appeal, we examined other factors that could affect inconsistent decisions. We could not attribute any significant effect, however, to other factors, such as worsening condition of claimants and the lack of government representation at hearings.
subsections: section_title: Claimant’s Worsening Condition Does Not Appear to Be a Major Contributor
paragraphs: Because claimants must often wait several months—on average almost a year—for an ALJ hearing, it seems reasonable to conclude that some ALJ awards could be explained by the claimants’ condition deteriorating during that time. Worsening conditions, however, are not a major contributor to ALJ awards, according to our examination of program data. About 93 percent of ALJ awards had onset dates—dates on which the ALJ had determined the individual had become disabled—that preceded the DDS decision, suggesting that the ALJ had decided the individual had been disabled when the DDS denied the case. If worsening conditions were a major factor contributing to ALJs awarding benefits, we might expect to see ALJ-determined onset dates coming after the date of the final DDS denial. Because such onset dates are relatively rare, however, little basis seems to exist for concluding that worsening conditions influence many ALJ awards. Moreover, neither the Bellmon Report nor the DHQRP study discussed worsening conditions as a key factor influencing ALJ awards.
An ALJ award based on a worsening condition may have also followed a DDS denial based on the assumption that a claimant’s impairment would improve within 12 months (individuals are not disabled if their impairment is expected to last less than 1 year), SSA officials noted. If expected improvement did not, in fact, occur, then the ALJ award would have correctly been based on the original alleged date of onset. About 10 percent of ALJ awards are made to individuals whose claim the DDS had denied on the basis of the duration requirement, according to our analysis of program data. This 10 percent, however, represents a maximum amount because available program data did not allow us to isolate the impact of other factors—such as new information introduced at the ALJ level—which could have been the main reason for the ALJ award.
section_title: Lack of Government Representation at Hearings Not Fully Evaluated
paragraphs: Although the ALJ is expected to consider SSA’s interests during the hearing, the agency is not formally represented. The presence of a government attorney or other advocate to represent SSA at hearings has been discussed over the years as a way of improving the ALJ hearing process. Although claimants have the right to representation, SSA relies on the ALJ to fully document the case, considering the claimant’s as well as the government’s best interests.
In the early 1980s, SSA initiated a pilot project at selected hearing offices to test the effect of SSA representation at hearings. At a 1985 congressional hearing, SSA released preliminary information from the pilot that suggested that ALJ awards made in error could be cut by 50 percent if SSA were represented at appeal hearings. Acting under a July 1986 court injunction, however, SSA halted the pilot project. The court concluded that the entire notion of SSA representation, as implemented, violated procedural due process. In May 1987, SSA decided to end the project, stating that the administrative resources committed to it could be better used elsewhere. As a result, the preliminary results were never verified, and a final report was never issued.
section_title: SSA’s Planned Improvements in Procedures
paragraphs: SSA plans to take several actions so that DDS and ALJ procedures better ensure decision-making consistency, including requiring more detailed DDS rationales, returning selected appealed cases to the DDS for consideration of new evidence introduced at ALJ hearings, and using a “predecision interview” by a disability examiner.
To improve explanations of DDS decisions, SSA plans to require more detailed DDS rationales. New guidelines for all reconsideration denials are to require DDS adjudicators to write rationales explaining how they made their decisions, especially how the medical consultants assessed RFC, treating physician opinion, pain, and other factors. On the basis of feedback from the process unification training, SSA plans further instructions and training for the DDSs on the bases for their decisions and where in the case files this information should go. SSA issued a ruling in July 1996 clarifying that ALJs consider the findings of fact made by DDS medical and psychological consultants as expert opinion evidence of nonexamining sources and plans to issue a regulation to further clarify the weight given by ALJs to the DDS medical consultants’ opinions.
To ensure that DDSs have an opportunity to review all relevant evidence before an ALJ hearing, SSA plans to return selected appealed cases to the DDS for consideration of new documentary evidence introduced at ALJ hearings. This would avoid the need for a more costly and time-consuming ALJ decision in cases where the DDS would award benefits. If the DDS cannot allow the returned claim, however, the DDS medical consultant must provide a revised assessment of the case’s medical facts. SSA plans to implement this project in May 1997, at which time it would begin selecting about 100,000 of the roughly 500,000 appealed cases per year for such claims. Moreover, SSA’s decision to limit such claims to about 100,000 cases may need to be reassessed in light of the possible benefits that could accrue from this initiative.
SSA also plans to test the use of a “predecision interview” by a disability examiner with the claimant before denying a claim. This interview would provide an opportunity for the DDS to routinely obtain and consider testimonial evidence. It would also allow the DDS the chance to better ensure that claimants understand how decisions about their cases are made and what evidence might be relevant. This could improve the claimants’ ability to provide complete and relevant information and make all relevant disability claims earlier in the disability determination process.
section_title: Quality Reviews Do Not Focus on Inconsistency Between DDS and ALJ Decisions
paragraphs: SSA could use its ongoing quality reviews to better focus on differences in DDSs’ and ALJs’ assessments of functional capacity and of procedures to improve its management of the decision-making process and reduce inconsistent decisions between DDSs and ALJs. Current quality reviews, however, focus on the DDS and ALJ decision-making processes in isolation from one another and do not reconcile differences between them. In addition, to better manage the process and reduce inconsistencies, SSA also needs a quality review system that focuses on the overall process and provides feedback to all adjudicators on factors that cause differences in decisions. SSA has data and mechanisms in place that it could use to begin integrating its quality reviews and to provide feedback to DDSs and ALJs. In the longer term, SSA plans to systematically review decision-making at all levels through a new quality review system.
subsections: section_title: Quality Reviews Not Designed to Address Differences
paragraphs: SSA has several quality review systems that review disability DDS and ALJ decisions. As shown in table 4.1, each of the reviews has a different purpose. None was developed to identify and remedy the factors that contribute to differences in DDS and ALJ decisions.
At the DDS level, staff who report to SSA’s Office of Program and Integrity Reviews (OPIR) perform a quality assurance review to promote the accuracy and consistency of DDS determinations. The review uses continuous random samples of completed award and denial actions. On the basis of errors found during this review, SSA computes accuracy rates for each DDS, which it compares with performance standards. DDSs that fall below standards for two consecutive quarters are subject to increased SSA oversight and may be removed from making disability decisions. In addition, DDS staff also perform a pre-effectuation review or PER (that is, a review before benefits payments are paid) of awards to protect the solvency of the DI trust fund. Under this review, staff review 50 percent of DI awards (not SSI-only cases) to prevent payment of erroneous awards.
At the ALJ level, quality review heavily focuses on the review of claims denied by ALJs and appealed to SSA’s Appeals Council. Claimants whose claims are denied by an ALJ and want to appeal the denial must apply to the Appeals Council before bringing their claim to a federal court. The purpose of this final agency review is to ensure that the case file fully supports the ALJ denial decision before possible court appeal by the claimant. On the basis of this review, the Appeals Council may, among other things, reverse the denial decision or remand the case to the ALJ for further action. In addition, like the PER at the DDS level, the Appeals Council performs a PER of ALJ awards. Unlike the 50-percent sample used for the PER, however, this Appeals Council review samples only a portion of DI-only awards totaling about 3 percent of all ALJ DI awards to people under age 59.
subsections: section_title: Review of Awards and Denials Is Imbalanced, but Effect on Decision Bias Not Evident
paragraphs: As shown in table 4.1, DDS reviews emphasize awards; the ALJ reviews, however, emphasize denials. This may inappropriately give DDSs an incentive to deny claims and ALJs an incentive to award claims in both instances to avoid scrutiny by quality reviewers. Available evidence, however, does not support this conclusion.
Before SSA instituted the PER of DDS award determinations in fiscal year 1981, national accuracy rates were generally higher for initial denials than for awards. After the PER was instituted, this situation reversed. By 1983, award rates were more likely to be accurate than denial rates. This trend may suggest that instituting the review caused a decline in the accuracy of denials, while increasing the accuracy of awards. Other factors could have influenced these accuracy trends, however, including workload pressures and program changes. In addition, the difference between the denial and award accuracy rates is slight. In fiscal year 1996, the denial accuracy rate was only 2.9 percentage points lower than the award accuracy rate.
Moreover, data from the DHQRP study suggest that the evidence supports ALJ awards and denials equally. As part of that study, reviewing ALJs assessed 3,000 ALJ awards and 3,000 denials and found virtually the same support rates for both types of cases: 81 percent of awards and 82 percent of denials were supported by substantial evidence.
section_title: Current Quality Reviews Mirror Differences in Approach and Procedures
paragraphs: How DDS and ALJ quality reviews operate reflects the differences in how decisions are made at the two levels. First, quality reviewers use the same decision-making approach as those they are reviewing. Therefore, they sustain the differences in approach discussed earlier rather than reconcile them. For example, the Appeals Council, mirroring the approach of the ALJs, infrequently consults with medical experts. Second, DDS reviews do not examine the possible impact at the ALJ level of weaknesses in evidence or the explanation of the decision. As a result, SSA misses the opportunity to use quality reviews to strengthen procedures so that DDS decisions better serve as a basis for ALJ consideration.
subsections: section_title: Differences in Approach Not Identified and Reconciled
paragraphs: The staff and approach used in SSA’s quality reviews of DDS decisions mirror those used in the DDS process. SSA review teams, composed of disability examiners and physician consultants, assess the quality of DDS decisions using the same policies and procedures that DDSs use in making their decisions. For example, when review staff examine a DDS decision, a physician consultant on the team has final authority regarding the correctness of the residual functional capacity (RFC) assessment made by the DDS medical consultant.
Likewise, SSA’s Office of Hearings and Appeals (OHA) staff perform ALJ reviews in a manner that mirrors the ALJ process. Staff at OHA screen decisions for conformance with the same standards and procedures used by ALJs, then refer cases that merit further review to the Appeals Council, which consists of attorneys. Similar to ALJs, Appeals Council reviewers have sole authority for assessing a claimant’s RFC, and they seek medical input infrequently. The Appeals Council’s medical staff and contract physicians consulted in about 17 percent of the cases reviewed by the Appeals Council, according to our analysis of available SSA data.
In addition, although SSA’s Office of Disability is responsible for promulgating a uniform decision-making policy, management control of reviews is split between OPIR, which reports to the Deputy Commissioner for Finance, Assessment, and Management, and the Appeals Council, which reports through OHA to another Deputy Commissioner. The two review groups have not routinely met to identify and resolve issues related to inconsistent decisions.
section_title: Quality Reviews Do Not Ensure That DDS Decision Builds a Solid Foundation for ALJ Decision
paragraphs: SSA’s quality reviewers examine the evidence gathered by the DDS to determine if the end result complies with SSA regulations and guidelines. Although SSA’s reviewers assess the adequacy of the DDS’s explanation of the initial decision, the reviewers consider the DDS to have made an accurate decision whether it is well explained or not. If a DDS medical consultant fails to adequately explain the basis for the RFC assessment— but nonetheless the decision appears correct and based on adequate evidence—the reviewers do not charge DDS with an error affecting its performance accuracy.
This approach focuses on performance accuracy; it does not provide DDSs with routine, systematic feedback on inadequate RFC explanations because SSA does not return cases to DDSs for correction solely because RFC explanations are inadequate. Instead, if reviewers return a case to a DDS because of other types of errors, such as inadequate evidence to support the decision, the returned case would include comments on inadequate RFC explanations by DDS medical consultants, according to SSA officials. Otherwise, the only way that reviewers might provide feedback on inadequate RFC explanations is during periodic visits to DDSs. Consequently, SSA lacks a routine, systematic mechanism for giving DDSs timely information on the adequacy of their RFC explanations.
Likewise, Appeals Council reviews have not emphasized ALJs’ consideration of DDS medical consultants’ opinions. First, the Appeals Council samples few ALJ awards for review. Such reviews could identify differences between the DDS medical consultant’s opinion and the ALJ view. Second, even if the Appeals Council might want to consider the views of DDS medical consultants, the lack of explanation gives the Council little to review.
In addition, SSA’s quality reviews of DDSs’ performance accuracy do not focus on weaknesses in DDS evidence gathering from the standpoint of whether the evidence could later contribute to ALJ reversals. Instead, reviewers of DDS decisions focus on whether the evidence in the file supports the DDS’s own decision. They do not consider whether gaps in evidence may become significant in a later appeal. For example, if the file indicates that the claimant has a treating physician, but the treating physician’s report is missing from the file, quality reviewers do not automatically cite this as a performance accuracy error. Instead, they determine whether the totality of evidence in the file supports the DDS’s decision. If the decision is supported adequately—despite the missing evidence—the reviewers do not charge the DDS with a performance accuracy error, though this lack of evidence could become significant at the ALJ level. Although the DDS decision may be technically accurate, it may also be vulnerable to reversal on appeal, a factor that the current quality assurance system does not consider in assessing the overall quality of DDS decisions.
In keeping with procedures, DDS reviewers also determine whether the DDS has made a reasonable effort to obtain the evidence. In assessing the reasonableness of the effort, however, the DDS reviewers again do not focus on the potential impact of the missing information if the case were to be appealed. Such a focus would be necessary for both identifying and reconciling differences in decisions.
section_title: SSA Has Plans to Improve Quality Reviews
paragraphs: SSA has taken or planned several actions to reduce decisional inconsistency, including addressing factors that we identified as important contributors to the inconsistency. First, the agency has started to systematically gather information on this subject. In 1992, SSA established the Disability Hearings and Quality Review Process (DHQRP), which collects data on ALJ decisions and on the DDS reconsideration denial decisions that preceded them. DHQRP provides a data-driven foundation to identify inconsistency issues and focus on strategies for resolution. According to quality reviewers, SSA has continued this process and anticipates issuing more reports in the future.
In addition, SSA is completing work on a notice of proposed rulemaking, with a target issue date of August 1997 for a final regulation to establish the basis for reviewing ALJ awards, which would require ALJs to take corrective action on remand orders from the Appeals Council before benefits are paid. As envisioned, disability examiners and physician consultants as well as reviewing judges will review ALJ awards. In November 1996, SSA began an initial start-up period for this effort and after the regulation is issued plans to target about 10,000 cases for review during the first year.
Unlike existing quality reviews, the new process aims to identify and reconcile factors that contribute to differences between DDS and ALJ decisions. When the reviewers find ALJ awards they believe are unsupported, they send these cases to the Appeals Council. If the Appeals Council disagrees with the conclusions of the quality reviewers, the case is referred to a panel of SSA disability adjudicators from various SSA units. This review process can reveal significant policy issues because the panel will receive cases in which the reviewing Appeals Council judge disagrees with the reviewing examiner and medical consultant. On the basis of issues identified, SSA could issue new or clarified policies or provide adjudicators with additional training. In addition, SSA’s process unification effort calls for returning certain cases to the DDS when new evidence is provided at the hearing level.
In the longer term, SSA envisions instituting a new quality review system that will systematically review decision-making at all levels. One focus of the new system is making the right decision the first time. SSA estimates this new system will help reduce the percentage of awards made by ALJs, while increasing the percentage made by DDSs. Under SSA’s model, when this redesign is fully implemented, the percentage of all awards made by ALJs would decline from around 29 to 17 percent, and the percentage made by DDSs would increase from 71 to 83 percent. The agency has not explicitly established this as a goal, however.
section_title: Conclusions, Recommendations, Agency Comments, and Our Evaluation
subsections: section_title: Conclusions
paragraphs: Inconsistent decisions between DDSs and ALJs are a long-standing problem for SSA management with implications for the fairness, integrity, and costs of both the decision-making process and the program overall. The award rate of appeals raises questions about the fairness of the process because many claimants are awarded benefits only after a lengthy appeal. Moreover, persistent inconsistencies between the two levels can undermine confidence in the integrity of the decision-making process. Furthermore, the later the case is finally decided in the appeals process, the more expensive it is to adjudicate.
SSA can make more progress than it has in the past by unifying the decision-making process at both the DDS and ALJ levels. Meanwhile, reducing inconsistent decisions will be limited to some extent by factors inherent in the program. Disability decisions are inherently complex and require adjudicators to exercise judgment on a range of issues. As a result, expectations about the level of agreement possible in such a program should acknowledge this reality. Moreover, the process involves large numbers of decisionmakers with more than 15,000 adjudicators, quality reviewers, and others, including over 1,000 ALJs, making these complex decisions nationwide.
SSA has developed process unification initiatives that, if implemented, could significantly improve the consistency of decisions. Competing workloads at all levels of adjudication, however, could jeopardize progress in this important area. SSA should capitalize on the momentum it has recently gained and give consistency of decisions the sustained attention it requires as an essential part of redesign. For example, the agency has ongoing data gathering and review mechanisms in place that could produce real progress in this area. SSA has not established explicit outcome-oriented goals or measures, however, to assess its progress in achieving consistent decisions. We believe the strategic planning process required under the Government Performance and Results Act can be a useful vehicle to help focus management attention on the results SSA hopes to achieve through process unification and to monitor its progress toward reaching these results. In this context, SSA needs to establish performance goals to measure its progress in shifting the proportion of cases awarded from the ALJ to the DDS level. SSA could then monitor its progress and make corrections if its actions do not achieve the desired results. Using quantifiable performance goals to measure results would place a high priority on this issue and bolster public confidence in SSA’s commitment to achieve more consistency in DDS and ALJ decision-making.
Under process unification, SSA plans to ensure that the DDS decisions are better explained and thus more useful to ALJs. Workload pressures at the DDSs, however, may make full and thoughtful explanations of their decisions difficult. SSA will need to consider ways to reduce these pressures if the agency’s plans are to be effective. At the ALJ level, SSA’s plans to return cases to the DDSs are important, given the significance of new evidence as a possible reason for awards. SSA’s decision to limit such returns to about 20 percent of cases, however, could reduce the effectiveness of this initiative.
In addition, SSA plans to improve its quality reviews but could move more quickly to implement these plans. Historically, SSA has never had a unified system of quality reviews, despite studies documenting inconsistent decisions. Specifically, in 1982, the Bellmon Report identified problems in the consistency of less-than-sedentary residual functional capacity (RFC) assessments, and the Disability Hearings Quality Review Process (DHQRP) reinforced this finding in 1994. However, SSA has not effectively used its quality reviews to focus on this problem or taken action to resolve it. Similarly, DHQRP identified problems with DDS rationales, but no systematic feedback has been provided on this issue. The DHQRP results give SSA an adequate foundation and an ongoing review mechanism to begin unifying quality reviews between the DDSs and ALJs without further delay. SSA could, for example, use the DHQRP findings on less-than-sedentary awards to sharpen and focus current Appeals Council reviews. The agency could also focus on the adequacy of DDS decision explanations in its unified quality review program.
We are also concerned that, without adequate planning and evaluation, some redesign initiatives could have unintended consequences. For example, under redesign, SSA intends to develop new, more valid, and reliable functional assessment/evaluation instruments that are relevant to today’s work environment. The agency intends to rely heavily on these instruments in decision-making. But, because differences in RFC assessments are the main reason for ALJ awards, SSA should proceed cautiously. As such, it should test any new decision methods to determine their effects on consistency as well as on award rates before widespread implementation.
section_title: Recommendations
paragraphs: SSA is beginning to implement initiatives to reduce inconsistent decisions between DDSs and ALJs, realizing that the lengthy and complicated decision-making process and inconsistent decisions between adjudicative levels compromise the integrity of disability determinations. We support these initiatives and recommend that SSA take immediate steps and be accountable for ensuring that they are implemented as quickly as feasible. For example, using available quality assurance systems, SSA should move quickly ahead to improve feedback to adjudicators at all levels. In addition, to better ensure that adjudicators review the same record, the agency should increase the number of cases it plans to return to DDSs when new evidence is submitted on appeal.
In addition, we recommend that, given the magnitude and seriousness of the problem, the Commissioner should, under the Results Act, articulate the process unification results that the agency hopes to achieve and establish a performance goal by which it could measure and report its progress in shifting the proportion of cases awarded from the ALJ to the DDS level.
section_title: SSA’s Comments and Our Evaluation
paragraphs: SSA officials generally agreed with the conclusions and recommendations in this report and stated that the report would be useful to SSA in its efforts to reduce inconsistent decisions between DDSs and ALJs. SSA agreed with our recommendation that the agency take immediate steps and be accountable for ensuring that its process unification initiatives are implemented as quickly as feasible.
Regarding our other recommendation, SSA said that the goal of making a greater proportion of awards at the DDS level and fewer on appeal was laudable and would promote good customer service. But SSA disagreed about taking steps to be accountable for attaining this goal. Agency officials believed that the natural outcome of SSA’s process unification initiatives would effect an increase in DDS awards and a decrease in ALJ awards. Because process unification is the linchpin of the disability determination process, however, not just disability redesign, we continue to believe that SSA needs to establish a performance goal for achieving process unification and that the Results Act is the appropriate mechanism to do this.
SSA took exception to our remarks suggesting that its proposal for a new decision methodology could exacerbate inconsistent decisions. We do not agree. Under redesign, SSA plans to reduce medical determinations to a relatively small number of claims, while expanding the functional component of the decision-making process. Because it is unlikely that the new decision methodology will eliminate all adjudicator judgment needed in making functional determinations, we continue to believe that SSA should proceed cautiously and test any new decision methods to determine their effects on consistency as well as award rates. In its comments, SSA stated that it is committed to using research results to dictate which, if any, changes will be made in the decision methodology. We support this commitment.
The full text of SSA’s comments and our response appear in appendix III. In addition, SSA provided technical comments, which we incorporated in the report as appropriate.