Social Security Disability Programs: SSA Could Take Steps to Improve Its Assessment of Continued Eligibility
Published: 2014-04-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: SSA administers DI and SSI, two disability programs that provided $189 billion in cash benefits to eligible adults and children in 2012. Both the numbers of DI and SSI recipients, as well as program costs, have grown in recent years and are poised to grow further in the future. Both the initial determination of an individual's medical eligibility at the time of application and CDRs after benefits have been granted are key to ensuring the integrity of these programs. CDRs also provide a check on program growth in a time of constrained federal resources. Since 1984, federal law has generally required SSA to find substantial evidence demonstrating medical improvement during a CDR before ceasing a recipient's benefits—known as the medical improvement standard.
In this statement, GAO describes (1) SSA's efforts to monitor DI and SSI beneficiaries' continued eligibility, and (2) factors associated with the medical improvement standard that affect these efforts. This testimony is primarily based on GAO products related to these issues from 2006 and 2012. GAO also updated selected information related to SSA's CDR backlog, budget requests, and guidance for assessing medical improvement as of 2014.
section_title: What GAO Found
paragraphs: The Social Security Administration (SSA) reported in January 2014 that it is behind schedule in assessing the continued eligibility of recipients in its two disability programs, Disability Insurance (DI) and Supplemental Security Income (SSI),and has accumulated a backlog of 1.3 million continuing disability reviews (CDRs). From fiscal years 2000 to 2011, the numbers of adult and child CDRs conducted fell about 70 percent. Children make up about one fifth of all SSI recipients, and GAO reported in 2012 that many of their CDRs were overdue. For example, more than 24,000 CDRs for children with mental impairments were overdue by 6 or more years, including over 6,000 CDRs for children who were expected to medically improve within 6 to 18 months of their initial determination. GAO also identified several cases which exceeded their scheduled review date by 13 years or more. When CDRs are not conducted as scheduled, the potential for improper payments increases as some recipients receive benefits for which they are no longer eligible. In September 2011, SSA's Office of the Inspector General estimated that SSA had paid about $1.4 billion in SSI benefits to children who should have not received them. SSA attributes delays in performing CDRs to resource limitations and other factors; SSA also generally gives lower priority to conducting CDRs for children receiving SSI. In 2012, GAO recommended that SSA eliminate the existing CDR backlog for children with impairments who are likely to improve, and regularly conduct reviews for this group. While SSA generally agreed with GAO's recommendation, the CDR backlog remains.
During CDRs, disability recipients that SSA determines to have improved medically may be removed from the program; however, several factors may hinder SSA's ability to make this determination. In 2006, GAO reported that 1.4 percent of people who left the disability programs did so because SSA found that they had improved medically. At that time, GAO identified several factors that hindered SSA's ability to assess whether DI and SSI recipients met the medical improvement standard. These included: (1) limitations in SSA guidance for applying the standard; (2) inadequate documentation of prior disability determinations; (3) failure to abide with the requirement that CDR decisions be made on a neutral basis—without a presumption that the recipient remained disabled; and (4) the judgmental nature of the process for assessing medical improvement. Since 2006, SSA has taken some steps to address these issues; however, the agency has not fully clarified policies for assessing medical improvement, as GAO recommended.
section_title: What GAO Recommends
paragraphs: GAO is not making any new recommendations at this time.

section_title: Letter
paragraphs: I am pleased to discuss our prior work on the Social Security  Administration’s (SSA) efforts to assess Disability Insurance (DI) and  Supplemental Security Income (SSI) recipients’ continued medical  eligibility for benefits. In 2012, these disability programs provided $189  billion in cash benefits to 10.9 million DI recipients and 8 million SSI  recipients, including adults and children. Both the numbers of DI and SSI  recipients, as well as program costs, have grown in recent years, and  both are poised to grow further in the future because of economic and  population changes. Federal law, as well as SSA’s regulations and  guidance, prescribe policies and procedures intended to ensure that only  those eligible to receive benefits do so. Both the initial determination of an  individual’s medical eligibility at the time of application and assessments  conducted after benefits have been granted are key to ensuring the  integrity of these programs. Assessments of continued eligibility provide  an important check on program growth by removing ineligible recipients  from the rolls, even while new applicants are added. If these reviews are  not conducted in sufficient numbers, the agency will continue to struggle  to contain growth in benefit payments, placing added burden on already  strained federal resources. Over the years, the Congress has taken  actions to add requirements related to SSA’s review of recipients’  continued medical eligibility for benefits. For example, beginning in 1982,  federal law required SSA to conduct certain continuing disability reviews  (CDRs) for this purpose, and since 1984, federal law has generally  required SSA to find substantial evidence demonstrating medical  improvement before ceasing a recipient’s benefits—known as the medical  improvement standard.
My remarks today are based on our prior work that found several factors  hindered SSA’s efforts to assess disability program recipients’ continued  medical eligibility for benefits. I will discuss (1) SSA’s efforts to monitor DI  and SSI recipients’ continued eligibility, and (2) factors associated with  the medical improvement standard that affect these efforts. This  information was drawn primarily from two reports we issued in 2006 and  2012, as well as a review of SSA’s current related data we performed in  March and April 2014. Specifically, we updated selected information  related to SSA’s CDR backlog, budget requests, and guidance for  assessing medical improvement as of 2014. For our prior reports, we  reviewed relevant federal law, regulations, and guidance; interviewed  SSA officials; and also relied on a variety of additional methodologies. For  example, for our 2006 report on the medical improvement standard, we  surveyed all 55 state directors responsible for disability determination  services (DDS), and for our 2012 report on children receiving SSI  benefits, we conducted site visits to 9 SSA field offices and 11 state DDS  offices and reviewed SSA’s data on CDRs conducted from fiscal years  2000 to 2011. We conducted our work in accordance with generally  accepted government auditing standards. Those standards require that  we plan and perform the audit to obtain sufficient, appropriate evidence to  provide a reasonable basis for our findings and conclusions based on our  audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our audit  objectives.
subsections: section_title: Background
paragraphs: SSA administers two disability programs that provide monthly cash  benefits to eligible individuals: DI, enacted in 1956, and SSI, enacted in  1972. DI provides monthly cash benefits to eligible workers unable to  work because of a long-term disability and who have paid into the Social  Security Trust Fund, whereas SSI provides monthly cash benefits to  people with disabilities on the basis of need, regardless of whether they  have paid into the Social Security Trust Fund. In order to be eligible for DI  or SSI benefits based on a disability, an individual must meet the  definition of disability for these programs—that is, they must have a  medically determinable physical or mental impairment that (1) prevents  the individual from engaging in any substantial gainful activity and (2) has  lasted or is expected to last at least 1 year or result in death.
The disability determination process is the same for DI and SSI  applicants. An SSA field office determines that an applicant has met  SSA’s nonmedical eligibility requirements for disability benefits, and then  the applicant’s claim is sent to the state DDS for an initial review of the  claimant’s medical eligibility. After assembling all medical and vocational  information for the claim, a DDS examiner, in consultation with  appropriate medical staff, determines whether the claimant meets the  requirements of the law for having a disability. Claimants who are  dissatisfied with the initial DDS determination may choose to pursue  several levels of appeal, including: a “reconsideration” of the claim,  conducted by DDS personnel who were not involved in the original  decision; a hearing before an administrative law judge (ALJ); and a  review of the claim by the Appeals Council, which is comprised of  administrative appeals judges and appeals officers. Final SSA decisions  are also subject to review in federal district court.
If SSA determines that an individual is disabled, the agency is required to  conduct periodic CDRs to ensure that only recipients who remain  disabled continue to receive benefits. These reviews assess whether  individuals are still eligible for benefits based on several criteria, including  their current medical condition and ability to work. DDS staff generally  establish the timeframe for when SSA should conduct a CDR on the basis  of the expected likelihood of a recipient’s medical improvement. However,  SSA also uses a profiling model to score and prioritize CDRs if funding is  not available to conduct all scheduled CDRs.
In response to prior concerns that some recipients were being arbitrarily  removed from the disability programs via the CDR process, Congress  passed the Social Security Disability Benefits Reform Act of 1984, which,  among other things, established a medical improvement standard. Under  this standard, SSA may only discontinue benefits for an individual if it   finds substantial evidence demonstrating both that a beneficiary’s medical  condition has improved and that the individual is able to engage in  substantial gainful activity. If SSA determines that these conditions have  not been met in the course of conducting a CDR, the recipient may  continue to receive benefits until the individual receives a subsequent  CDR (which potentially could result in a discontinuation of benefits), dies,  or transitions to Social Security retirement benefits.
section_title: SSA Has a Backlog of More Than 1 Million DI and SSI Benefit Eligibility Reviews
paragraphs: SSA reported in January 2014 that it is behind schedule in assessing the  continued eligibility of DI and SSI recipients and has accumulated a  backlog of 1.3 million CDRs. In recent years, SSA has cited resource  limitations and a greater emphasis on processing initial claims and  requests for hearings appeals as reasons for the decrease in the number  of CDRs conducted. From fiscal years 2000 to 2011, the number of adult  CDRs fell from more than 580,000 to about 180,000 (69 percent) and  the number of childhood CDRs fell from more than 150,000 to about  45,000 (70 percent), according to our analysis of SSA data (see fig. 1).  More specifically, CDRs for children under age 18 with mental  impairments—a group that comprises a growing majority of all child SSI  recipients—declined from more than 84,000 to about 16,000 (an 80  percent decrease).
Children make up about one fifth of all SSI recipients, and we reported in  2012 that a large proportion of their CDRs were overdue. For example,  CDRs for about one half of all child recipients with mental impairments  (435,000) were overdue, according to our analysis of SSA data in 2012.  Of these recipients, about 344,000 (79 percent) had exceeded the  scheduled date by at least a year, with about 205,000 (47 percent)  exceeding their date by 3 years, and about 24,000 (6 percent) exceeding  the scheduled date by 6 years. We also identified several cases which  exceeded their scheduled date by 13 years or more. Of the 24,000  childhood CDRs pending 6 years or more, we found that about 70 percent  (over 17,000) were for children who had been categorized as “medical  improvement possible” at initial determination, while 25 percent (over  6,000) of these pending CDRs were for those children deemed medically  expected to improve within 6 to 18 months of their initial determination  (see fig. 2). Of these cases, we identified nine recipients who were  expected to medically improve, but whose CDR had been pending for 13  years or more. Reviews of children who are expected to medically  improve are more productive than reviews of children who are not  expected to medically improve because they have a greater likelihood of  benefit cessation and thus yield higher cost savings over time.
When CDRs are not conducted as scheduled, the potential for improper  payments may increase as some recipients can receive benefits for which  they are no longer eligible. In September 2011, SSA’s Office of the  Inspector General estimated that SSA had paid about $1.4 billion in SSI  benefits to approximately 513,000 recipients under age 18 who should  have not received them—some of whom were pending reviews for 5 or  more years. The Inspector General estimated that SSA will continue to  make improper payments of approximately $461.6 million annually until  these reviews are completed. Furthermore, in its May 2012 CDR report,  SSA estimated a program savings of $9.30 for every $1 invested in  conducting CDRs and projected that those CDRs conducted for adult DI  and SSI recipients and for child SSI recipients combined in fiscal year  2010 would have saved federal programs the present value of estimated  lifetime benefits of $3.5 billion.
For several reasons, SSA has placed a higher priority on conducting  CDRs for DI recipients, although children’s SSI benefits are more likely to  be ceased after review. According to SSA officials, when CDR funding is  less than what is needed to conduct all CDRs at the scheduled intervals,  the agency has historically given priority to performing reviews considered  to be the most cost-effective, as well as staying current with DI CDRs and  performing two specific statutorily required SSI reviews. SSA officials  told us that it is more cost effective to conduct adult DI CDRs than  childhood SSI CDRs, because ceasing benefits for a young adult DI  recipient may potentially represent decades of saved benefits. For SSI,  statutorily required age 18 redeterminations are cost effective for the  same reason. Additionally, because DI benefit payments are, on average,  almost twice as much as SSI childhood payments, CDRs of adult DI  cases generally produce greater lifetime savings, according to SSA  officials. However, SSA reported that it ceased about 12 percent of all  adult DI claims that received a CDR. In comparison, our analysis of SSA’s  data showed that 32 percent of child SSI claims that received a CDR  were ceased in fiscal year 2011. For example, of those childhood CDRs  conducted for children under age 18 with mental impairments, SSA  ceased benefits for about 28 percent on average in fiscal year 2011, with  personality disorders and speech and language delay having the highest  cessation rates, 39 and 38 percent, respectively. Despite these high  cessation rates, SSA and state DDS officials have acknowledged that the  agency has not conducted reviews for child recipients in a timely manner,  and in some cases, they have not conducted childhood CDRs prior to a  child’s age 18 redetermination.
In our 2012 report, we recommended that SSA eliminate the existing  CDR backlog of cases for children with impairments who are likely to  improve and, on an ongoing basis, conduct CDRs at least every 3 years  for all children with impairments who are likely to improve, as resources  are made available for these purposes. SSA generally agreed that it  should complete more CDRs for SSI children but emphasized that it is  constrained by limited funding and competing DI and SSI workloads.  Moving forward, one of the major objectives in SSA’s Fiscal Year 2013- 2016 Strategic Plan is to “increase efforts to accurately pay benefits,”  and the Plan indicates that SSA intends to conduct more CDRs, as  funding is available. In addition, as part of the President’s fiscal year 2014  budget request, SSA asked for $1.227 billion to create a new Program  Integrity Administrative Expenses account that the agency says would  establish a more reliable stream of mandatory program integrity funding.  While additional funding may help address the CDR backlog, we continue  to have concerns about the agency’s ability to manage limited funds in a  manner that adequately balances its public service priorities with its  stewardship responsibility. Because SSA has noted that it considers SSI  childhood CDRs to be a lower priority than other CDRs, it is unclear  whether the agency will use new increases in funding to review children  most likely to medically improve—reviews that could yield a high return on  investment.
section_title: Several Factors Associated with the Medical Improvement Standard Have Challenged the Assessment of Recipients’ Continued Eligibility
paragraphs: During CDRs, disability recipients that SSA determines have improved  medically may cease receiving benefits; however, several factors may  hinder SSA’s ability to make this determination. In 2006, our analysis of  SSA data showed that 1.4 percent of all the people who left DI and SSI  between fiscal years 1999 and 2005 did so because SSA found that they  had improved medically; however, more recipients left for other reasons,  including conversion to regular Social Security retirement benefits or  death. At that time, we identified a number of factors that challenged  SSA’s ability to assess DI and SSI recipients using the medical  improvement standard.
Guidance limitations—Limitations in the SSA guidance then in effect  for applying the medical improvement standard may have resulted in  inconsistent disability decisions. Specifically, in 2006, SSA guidance  on CDRs instructed examiners to disregard “minor” changes in a  recipient’s condition without defining what constituted a minor change.
In addition, when assessing whether improvements in recipients’  medical conditions were related to their ability to work, the SSA  guidance instructed examiners to ensure a “reasonable relationship”  between the amount of improvement and the increase in the ability to  perform basic work activities. However, at that time, the guidance did  not require a specific amount of increase in functioning to better guide  examiners in their decision making.
Inadequate documentation—If a prior disability determination was  inadequately documented, it can be challenging for the disability  examiner to demonstrate medical improvement in a CDR. Because  the prior decision is the starting point for conducting a CDR and  examiners are required to find evidence of medical improvement since  that last decision in order to cease benefits, inadequate  documentation of evidence in prior decisions may make it difficult to  assess medical improvement. In our 2006 survey, some DDS  directors commented that cases decided on appeal were the most  likely to lack adequate documentation. Several officials reported that  guidance in effect at that time instructed ALJs to include enough  information to make their decisions legally sufficient, but there was no  specific instruction to include all of the evidence that would be needed  to assess medical improvement as part of a future CDR.
Presumed disability—According to our 2006 survey, a majority of  DDSs incorrectly presumed that a recipient had a disability when the  CDR was being conducted, which may have made it more difficult for  examiners to determine if a recipient had improved medically. We  reported that this practice is contrary to the law as well as SSA  regulations and policy, which require that CDR decisions be made on  a “neutral basis.”
Reliance on judgment—The judgmental nature of the process for  assessing medical improvement likely hinders its reliability. For  example, one examiner may determine that a recipient has improved  medically and discontinue benefits, while another examiner may  determine that medical improvement has not been shown and will  continue the individual’s benefits. Furthermore, we previously found  that the amount of judgment involved in the decision-making process  increases when the process involves certain types of impairments,  such as psychological impairments, which are more difficult to assess  than other impairments, such as physical impairments.
These issues have implications for the consistency and fairness of SSA’s  medical improvement decision-making process, and in 2006, we  recommended that SSA clarify policies for assessing medical  improvement. Since then, SSA has taken some steps that may help  address the issues we raised but has not fully implemented the actions  we recommended. In 2009, SSA began implementing an electronic  claims analysis tool for use during initial disability determinations to (a)  document a disability adjudicator’s detailed analysis and rationale for  either allowing or denying a claim, and (b) ensure that all relevant SSA  policies are considered during the disability adjudication process. In  addition, SSA reported in February 2013 that it was developing a tool to  help hearing offices standardize and document the hearing decision  process and outcome. However, SSA’s guidance for assessing medical  improvement may continue to present challenges when applying the  standard. As of April 2014, the guidance does not provide any specific  measures for what constitutes a “minor” change in medical  improvement, and it instructs examiners to exercise judgment in  deciding how much of a change justifies an increase in the ability to  work.
Chairman Lankford, Ranking Member Speier, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: If you or your staff have any questions about this testimony, please  contact me at (202) 512-7215. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. GAO staff who made key contributions to this testimony  include James Bennett, Holly Dye, Rachel Frisk, Isabella Johnson,  Kristen Jones, Sheila McCoy, and Walter Vance.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.