Social Security Disability: Reviews of Beneficiaries' Disability Status Require Continued Attention to Achieve Timeliness and Cost-Effectiveness
Published: 2003-07-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Social Security Administration (SSA) has had difficulty in conducting timely reviews of beneficiaries' cases to ensure they are still eligible for disability benefits. SSA has been taking steps to improve the cost-effectiveness of its review process. SSA has linked the review process to eligibility for a new benefit that provides return-to-work services. This report looks at SSA's ability to stay current with future reviews, identifies potential improvements to the review process, and assesses the review process--return-to-work link.
section_title: What GAO Found
paragraphs: SSA will likely face a backlog of about 200,000 continuing disability review (CDR) cases by the end of fiscal year 2003. SSA officials attribute the pending backlog to its decision to reduce the number of cases reviewed as a result of the delay in obtaining fiscal year 2003 funding. In addition, the pending backlog resulted from putting more emphasis on initial applications over CDRs. To ensure CDRs receive adequate attention, SSA has requested some fiscal year 2004 funds be "earmarked" for these reviews. Given SSA's ability to eliminate its previous CDR backlog using targeted funds, this maneuver could help SSA. Over the next 5 years, SSA has estimated that 8.5 million CDRs, costing about $4 billion, are needed to stay current. If SSA generates another backlog, cost savings and program integrity may be compromised by paying benefits to disability beneficiaries who are no longer eligible to receive them. SSA is not making the best use of available information when conducting its CDRs, leaving opportunities for improvement. First, SSA's decisions on the timing of CDRs are not based on systematic analysis of available information. Second, SSA's process for determining which CDR method to use is not always based on the best available information. For example, SSA requires an in-depth review for all beneficiaries who, upon entering the program, are expected to medically improve even if current information on certain of those beneficiaries indicates that improvement is unlikely and that the review would be better handled through a shorter, less expensive method. Third, SSA has not fully pursued medical treatment data available from the Medicare and Medicaid programs despite their potential to improve SSA's decisions regarding which review method to use. Fourth, SSA's CDRs continue to be hampered by missing or incomplete information on beneficiaries' case history. SSA delays the provision of new return-to-work benefits to beneficiaries expected to medically improve based on the assumption that such beneficiaries are least likely to need them. However, according to SSA data, about 94 percent of such beneficiaries are not found to have medically improved upon completion of a disability review. As a result, some individuals who might benefit from return-to-work services are initially denied access to them. SSA is reviewing this policy and while doing so, will need to consider how to best balance its financial stewardship and return-to-work goals.

section_title: Letter
paragraphs: The Disability Insurance (DI) and Supplemental Security Income (SSI)  programs are the largest federal income programs for disabled individuals,  paying about $86 billion to about 10 million disabled beneficiaries in 2002.  These programs have been growing in recent years and are poised to grow  further as the baby boom generation ages. To help ensure that only eligible  beneficiaries remain on the rolls, the Social Security Administration (SSA)  is required by law to conduct continuing disability reviews (CDR) for all  DI beneficiaries and some SSI disability recipients to determine whether  they continue to meet the disability requirements of the law. In addition, to  assist beneficiaries who want to return to work and leave the disability  rolls, SSA began implementing the Ticket to Work and Self-Sufficiency  Program in 2002. Under this program, beneficiaries are issued a “ticket,” or  voucher, which they can use to obtain vocational rehabilitation,  employment, or other return-to-work services from an approved provider  of their choice.
Through much of the 1980s and 1990s, the Congress and GAO, among  others, emphasized the importance of CDRs for maintaining DI and SSI  program integrity and, consequently, the critical need for SSA to conduct  CDRs when they are due and in a cost-effective manner. However, SSA  had difficulty completing all required CDRs when they were due, which  resulted in the development of an enormous backlog of 4.3 million cases.  In 1996, the Congress, in response to these difficulties, authorized funding  targeted exclusively for CDRs from fiscal year 1996 through 2002 to  eliminate the CDR backlog and conduct new CDRs as they became due.
At the time beneficiaries enter the DI or SSI programs or continue their  benefits following a CDR, state-based Disability Determination Services  (DDS) determine beneficiaries’ due date for a CDR based on their  potential for medical improvement. Beneficiaries classified as “medical  improvement expected” are generally scheduled for a CDR within 6 to   18 months, beneficiaries classified as “medical improvement possible” are  scheduled once every 3 years, and beneficiaries classified as “medical  improvement not expected” are scheduled once every 5 to 7 years. Once  the date for a review arrives, SSA compiles information such as age, length  of time on the rolls, and qualifying medical condition to determine if it  would be cost-effective to complete the CDR based on information  reported by the beneficiary on a mailed-out questionnaire (“mailer”). In  instances where SSA determines it is best to examine the beneficiary in  person, SSA sends the beneficiaries’ case file to the DDS for a full medical  review.
To reduce work disincentives and address some beneficiaries’ fear that  any work activity could result in the termination of their benefits through  a CDR, the Ticket to Work and Self-Sufficiency Program prohibits SSA  from conducting CDRs for beneficiaries who are using a ticket. However,  SSA has decided that it will not issue a ticket to beneficiaries who are  expected to medically improve until their first CDR is completed. SSA  believes these beneficiaries do not require assistance to return to work.  But some disability advocates and policy experts believe that beneficiaries  expected to medically improve could benefit from early ticket services  and, therefore, should not be subject to restrictions on ticket issuance.
Given the importance of CDRs in ensuring program integrity and  determining beneficiary eligibility for assistance under the ticket program,  the Chairman of the Subcommittee on Social Security, House Committee  on Ways and Means requested that we review the CDR process. In  response, this report discusses: (1) what impact the expiration of targeted  funding for CDR processing would have on SSA’s ability to remain current  with the CDR caseload, and what level of funding would be needed over  the next 5 years to keep the workload current; (2) what opportunities exist  for SSA to improve the cost-effectiveness of the CDR process; and   (3) whether SSA’s rationale for delaying return-to-work and vocational  services under the ticket program for beneficiaries who are expected to  medically improve is adequately supported by program experience. To  answer these questions, we reviewed SSA documents, including the  agency’s budget request and estimates of the cost and savings from  conducting CDRs. Also, we surveyed 52 DDS directors to assess the  potential effect of the expiration of CDR-targeted funding on DDS  operations. Moreover, we analyzed SSA data on CDR outcomes, reviewed  SSA-contracted studies of the CDR process, examined legislation,  regulations, and SSA policy guidance related to CDRs and the ticket  program, and interviewed SSA officials. We performed our work in  accordance with generally accepted government auditing standards  between August 2002 and May 2003. See appendix I for a more detailed  description of our scope and methodology.
subsections: section_title: Background
paragraphs: The DI and SSI programs are the two largest federal programs providing  cash assistance to people with disabilities. Established in 1956, DI is an  insurance program that provides monthly cash benefits to workers who  are unable to work because of severe long-term disability. Workers who  have worked long enough and recently enough are insured for coverage  under the DI program. In addition to cash assistance, DI beneficiaries  receive Medicare coverage after they have received cash benefits for   24 months. In 2002, SSA paid about $60 billion to 5.5 million disabled  workers, with average monthly cash benefits amounting to $834 per  person. DI cash benefits are paid from the Federal Disability Insurance  Trust Fund.
SSI, created in 1972, is a means-tested income assistance program that  provides a financial safety net for disabled, blind, or aged individuals who  have low income and limited resources. Unlike the DI program, SSI has no  prior work requirement and no waiting period for cash or medical  benefits. Eligible SSI applicants generally begin receiving cash benefits  immediately upon entitlement and, in most cases, receipt of cash benefits  makes them eligible for Medicaid benefits. In 2002, about 5.5 million  people with disabilities received SSI benefits. In the same year, federal SSI  cash benefits paid to SSI beneficiaries with disabilities equaled $26 billion,  and average monthly federal SSI cash benefits amounted to about $398 per  person. SSI cash benefits are paid from general tax revenues.
The DI and SSI programs use the same statutory definition of disability. To  meet the definition of disability under these programs, an individual must  have a medically determinable physical or mental impairment that (1) has  lasted or is expected to last at least 1 year or to result in death and   (2) prevents the individual from engaging in substantial gainful activity  (SGA). Individuals are considered to be engaged in SGA if they have  countable earnings above a certain dollar level. Moreover, for a person to  be determined to be disabled, the impairment must be of such severity that  the person not only is unable to do his or her previous work but,  considering his or her age, education, and work experience, is unable to  do any other kind of substantial work that exists in the national economy.  SSA contracts with state DDS agencies to determine whether applicants  are disabled.
To help ensure that only eligible beneficiaries remain on the rolls, SSA is  required by law to conduct CDRs for all DI beneficiaries and some SSI  disability recipients to determine whether they continue to meet the  disability requirements of the law. In 1980, because of concerns about the  effectiveness of the CDR process and growing disability rolls, the  Congress enacted a law requiring that CDRs be conducted at least once  every 3 years for all DI beneficiaries whose disabilities are not considered  permanent and at intervals determined appropriate by SSA for DI  beneficiaries whose impairments are considered permanent. SSA issued  regulations in 1986 stating its policy of conducting CDRs for SSI disability  beneficiaries with the same frequency as it conducts CDRs for DI  beneficiaries. In 1994, the Congress established the first statutory  requirement for SSI CDRs, requiring that CDRs be conducted for a  relatively small proportion of SSI beneficiaries. Welfare reform legislation  enacted in August 1996 focused on CDRs for SSI children. This legislation  required that SSA (1) conduct CDRs at least once every 3 years for SSI  children under age 18 if their impairments are not considered permanent  and for infants during their first year of life if they are receiving SSI  benefits due to low birth weight and (2) review the cases of all SSI  children beginning on their 18th birthdays to determine whether they are  eligible for disability benefits under adult disability criteria. The  redeterminations for 18-year-olds are considered part of the CDR  workload.
subsections: section_title: CDR Process
paragraphs: At the time beneficiaries enter the DI or SSI programs, DDSs determine  when beneficiaries will be due for CDRs on the basis of their potential for  medical improvement. Based on SSA regulations, DDSs classify  individuals into one of three medical improvement categories, called  “diary categories”: “medical improvement expected” (MIE), “medical  improvement possible” (MIP), or “medical improvement not expected”  (MINE). Based on the diary categories, DDSs select a “diary date” for each  beneficiary, which is the date that the beneficiary is scheduled to have a  CDR. The diary date is generally within 6 to 18 months if the beneficiary is  classified as MIE; once every 3 years if classified as MIP; and once every   5 to 7 years if classified as MINE. Upon completion of a CDR, DDSs  reassess the medical improvement potential of beneficiaries who remain  eligible for benefits to determine the most appropriate medical  improvement category and time frame for conducting the next CDR.  Beneficiaries classified as MIE are not eligible to receive Ticket to Work  services until either the completion of their first CDR, or until they have  received benefits for 3 years.
While SSA uses diary categories to determine the timing of CDRs, it has  developed another method, called profiling, to determine the most cost- effective method of conducting a CDR. Profiling involves the application  of statistical formulas that use data on beneficiary characteristics  contained in SSA’s computerized records—such as age, impairment type,  length of time on disability rolls, previous CDR activity, and reported  earnings—to predict the likelihood of medical improvement and,  therefore, of benefit cessation. For example, SSA found that the longer an  individual is on the disability rolls, the less likely he or she is to have  benefits terminated. In addition, once an individual undergoes a CDR, the  chance that a new CDR will result in benefit termination is reduced  substantially. Reported earnings, on the other hand, greatly increase the  likelihood of termination.
Through its profiling formulas, SSA assigns a “score” to beneficiaries  indicating whether there is a high, medium, or low likelihood of medical  improvement. In general, beneficiaries with a high score are referred for  full medical reviews—an in-depth assessment of a beneficiaries’ medical  and vocational status—while beneficiaries with lower scores are, at least  initially, sent a questionnaire, known as a “mailer.” The mailer consists of  a short list of questions asking beneficiaries to report information on their  medical conditions, treatments, and work activities. If beneficiaries’  responses to a mailer indicate possible improvement in medical condition  or vocational status, SSA may refer these individuals for a full medical  review. However, in most cases, SSA decides that a full medical review is  not warranted and that benefits should be continued.
In contrast to mailers, full medical reviews are labor intensive and  expensive. These reviews generally involve the following steps: (1) SSA  headquarters personnel determine that a CDR is due and notify the SSA  processing center; (2) personnel at the processing center locate the  beneficiary’s file and send it to the appropriate SSA field office; (3) field  office personnel contact the beneficiary, conduct a lengthy interview, and  send the file to the appropriate DDS; (4) the DDS requests medical records  from the beneficiary’s physicians and other medical sources and, if these  sources cannot provide sufficient evidence, schedules medical or  psychological examinations with consulting physicians outside the DDS;  and (5) a DDS team, consisting of a disability examiner and a physician or  psychologist, determines whether the beneficiary continues to meet SSA  disability criteria.
section_title: CDR Backlog
paragraphs: As of fiscal year 1996, about 4.3 million CDRs were due or overdue. In  response, SSA and the Congress focused on providing funding to conduct  overdue CDRs and new CDRs as they became due. SSA developed a plan  for a 7-year initiative to conduct about 8.2 million CDRs during fiscal years  1996 through 2002. In the Contract with America Advancement Act of   1996 (Pub. L. No. 104-121), the Congress authorized a total of about   $4.1 billion to fund the 7-year CDR plan. In addition, The Personal  Responsibility and Work Opportunity Reconciliation Act of 1996 (Pub. L.  No. 104-193) required SSA to conduct CDRs on several beneficiary groups,  such as low birth weight babies and authorized an additional $250 million  for CDRs in fiscal years 1997 and 1998. The actual amount appropriated  during the 7-year period, about $3.68 billion, was less than the amount  authorized in 1996.
SSA reported to the Congress in its fiscal year 2000 CDR report that in that  year, the agency became current with the backlog of CDRs for all DI  beneficiaries. SSA officials indicated to us that although they are in the  midst of preparing the final statistics for its fiscal year 2002 CDR report, it  became current with the backlog of CDRs for all SSI beneficiaries by the  end of fiscal year 2002.
section_title: CDR Cost-Effectiveness
paragraphs: Since first implementing the profiling and mailer processes in the early  1990s, SSA has continued its efforts to improve the cost-effectiveness of  the CDR process. Most notably, SSA has refined the statistical formulas  used in profiling to identify which method—mailer or full medical  review—should be used to conduct the CDR. According to SSA officials  and studies of the profiling process, these improvements have led to some  beneficiaries receiving a mailer who otherwise would have received a full  medical review, thereby allowing SSA to reduce the overall cost of the  CDR process. Conversely, by improving SSA’s ability to identify  beneficiaries who are likely to medically improve, these refinements have  also helped the agency better ensure that it is conducting full medical  reviews—and ceasing benefits—when appropriate. In addition to  improvements in its profiling process, SSA has also implemented other  CDR process improvements such as introducing an automated review of  mailers.
section_title: End of Targeted Funding and Other Issues Could Contribute to Another Backlog, Threatening Cost Savings
paragraphs: In the midst of its first year following the cessation of CDR-targeted funds,  SSA appears to be developing another CDR backlog; the agency estimates  it will cost several billion dollars in total over the next 5 years to keep its  workload current. By the end of fiscal year 2003, on the basis of SSA’s  current projections, the agency will likely face a backlog of 200,000 CDRs,  though the characteristics of the backlog may mitigate its negative effects.  SSA attributes the mounting backlog to the management decisions it made  at the beginning of the fiscal year during budget deliberations, as well as  the need to process a larger than expected workload of initial disability  applications. SSA has estimated that it will need a total of about $4 billion  to process its projected CDR workload over the next 5 years. However,  SSA’s updated estimate, expected to be available later this year, will likely  show a higher cost as the disability rolls continue to expand. Aside from  funding issues, DDSs reported that challenges associated with processing  initial disability applications and maintaining enough disability examiners  could jeopardize their ability to stay current with the CDR workload over  the next few years. If another large CDR backlog is generated, SSA is at  risk of foregoing cost-savings, thereby compromising the integrity of its  disability programs as a result of paying benefits to disability beneficiaries  who are no longer eligible to receive them.
subsections: section_title: CDR Backlog Likely to Reemerge, Though Its Characteristics May Minimize Negative Effects
paragraphs: At the end of March 2003—six months after the expiration of separate  authorized CDR funding—SSA was on a pace to generate a CDR backlog  by the end of the current fiscal year. However, most of the backlogged  claims will consist of SSI CDRs, which may make the backlog less  problematic than it otherwise would have been because, among other  reasons, SSI CDRs have lower long-term savings than DI CDRs. In its fiscal  year 2003 budget justification, SSA indicated that it needed to process  about 1.38 million CDRs during fiscal year 2003 to stay current with its  CDR workload. Yet, SSA expects to process a total of 1.18 million CDRs, if  not more, by the end of the fiscal year. By the end of March 2003—the  midpoint of the fiscal year—SSA had processed about 539,000 CDRs. To  reach the 1.18 million end-year revised total, SSA will need to process  CDRs during the second half of the fiscal year at a pace similar to that  achieved during the first 6 months of the fiscal year. Nevertheless, while  it appears that SSA should be able to achieve this outcome, by the end of  fiscal year 2003, it will have accumulated a backlog of 200,000 CDRs.
SSA officials attributed the delay in obtaining a fiscal year 2003 budget as  the main factor in hampering their ability to conduct all of the planned  CDRs for the fiscal year. Because of the uncertainty surrounding the  agency’s funding level, SSA reduced the number of CDRs it sent to DDS  officials for processing as well as froze DDS hiring and overtime pay. SSA  officials told us that they took these actions because they were concerned  that the fiscal year 2003 appropriations would not support CDR activity at  the fiscal year 2002 level. SSA officials recognize that a hiring freeze can  have a longer-term impact because it disrupts the normal replacement of  disability examiners lost through attrition. SSA officials explained that  disability examiners generally do not increase overall productivity when  first hired. In fact, new disability examiners could initially decrease  productivity because experienced examiners may devote some of their  time to training these new examiners. SSA officials noted that it generally  takes 1 to 2 years before disability examiners become proficient.
SSA’s management strategy to cut back on the number of CDRs it  processed during the delays to the extended fiscal year 2003 budget  process reflects the agency’s higher priority for processing of initial  applications for disability benefits. Specifically, while SSA cut back on the  number of CDRs, no similar action was reported with DI and SSI initial  eligibility decision making. SSA officials indicated that the application rate  for disability benefits increased during the beginning months of fiscal year  2003, further affecting its ability to stay current with CDRs. SSA officials  told us that although SSA sets a goal to process all CDRs and initial  applications, initial eligibility decisions are given the highest priority.  Officials said that, due to political pressure, getting disability benefits to  people in a timely manner is emphasized over reviewing whether current  beneficiaries remain eligible for benefits. DDSs, likewise, place a greater  priority on processing initial applications. Three-fourths (75 percent) of  directors said processing initial disability claims were a top priority  relative to CDRs, whereas far fewer directors (23 percent) said that  processing initial claims and CDRs were equal priorities.
SSA has recently proposed an approach to avoid this competition between  CDRs and initial claims. Specifically, in SSA’s fiscal year 2004 budget  request, the Commissioner requested that almost $1.5 billion be earmarked  for three activities that could provide a return on investment—CDRs, SSI  nondisability redeterminations, and overpayment workloads. While we  did not review the sufficiency of the level of this request, the earmarking  of funds for activities such as CDRs could help SSA keep current with  these activities. For example, if the number of initial applications for  disability benefits continues to increase over the next several years,  holding apart the necessary funds for CDRs could be a prudent measure.
SSA has indicated in its annual CDR reports, as well as in its performance  and accountability report, that its ability to complete all CDRs as they  become due in the future is dependent upon adequate funding. In   2000, SSA estimated that a total of about $4 billion was needed to process  the CDR workload during the 5-year period between fiscal year 2004 and  2008 (see table 1). SSA based these “rough estimates” on cost and  workload projections available at that time. SSA expects to release  updated workload and cost projections in the summer of 2003. While the  estimates made in 2000 are not inconsistent with recent years’ authorized  CDR funding levels, they rely upon assumptions that may change in the  years ahead. For instance, the updated numbers for the fiscal year 2004 to  2008 period will likely be higher than the past estimate for this time period  because of the recent growth in the disability rolls.
Despite the likely reemergence of a CDR backlog, the characteristics of  the backlog may mitigate its negative consequences. During fiscal year  2003, SSA has focused on DI CDRs. SSA officials cite four reasons for this:  (1) cessations of beneficiaries receiving DI benefits lead to higher savings  than cessations of recipients receiving SSI benefits, (2) SSA desires to  protect the DI trust fund, (3) legislation sets out a clearer mandate to  complete CDRs on beneficiaries receiving DI benefits than for adult  beneficiaries receiving SSI benefits, and (4) external auditors cite SSA for  noncompliance with the law when SSA does not complete the required  CDRs for DI beneficiaries.
As a result, most of the backlog that is expected to reemerge by the end of  fiscal year 2003 will likely consist of SSI CDRs and, according to SSA  officials, this makes the backlog less problematic than if the backlog  consisted of mostly DI cases. SSA maintains that not only do SSI adult  CDRs result in lower long-term savings, but also the legislative mandate  for conducting SSI CDRs is less prescriptive. Therefore, the negative  effects of falling behind on SSI CDRs are less severe.
section_title: DDS Directors Expressed Concerns about Their Ability to Meet Future CDR Workload
paragraphs: Several of the issues that have contributed to the pending fiscal year   2003 CDR backlog will also appear, in the views of DDS directors, in the  future. First, nearly all directors expect to process a higher number of  initial disability claims than in the past. Most DDS directors have a  strategy in place to deal with this rising initial claims workload, but still  expect increased initial claims to negatively affect their ability to process  their CDR workload. Second, most directors expect to experience  difficulties in maintaining an adequate level of staffing, caused by many  examiners leaving and difficulties finding replacements. Most DDSs who  anticipate facing these staffing challenges reported that they have  strategies in place to manage them. Nevertheless, nearly all believe that  these staffing issues will negatively impact their ability to stay current with  their expected CDR workloads. Tables 2 and 3 provide more specific  results.
section_title: Cost Savings and Program Integrity Could Be Jeopardized If CDR Backlog Grows Again
paragraphs: To the extent that funding, staffing, and other issues limit SSA’s ability to  process its CDR workload, the full realization of CDR cost savings could  be in jeopardy. SSA maintains that the return on investment from CDR  activities is high. In fact, SSA’s most recent annual CDR report to the  Congress summarizes its average CDR cost-effectiveness during fiscal year  1996 to 2000 at about $11 returned for every $1 spent on CDRs. SSA has  noted, however, that such rates of return are unlikely to be maintained  because as SSA works down the backlog and beneficiaries come up for  their second and third CDRs, the agency does not expect as many  cessations and, therefore, the cost-benefit ratio could decline.
Since the Congress’ provision of dedicated CDR funding starting in fiscal  year 1996, SSA has reported completing millions of CDRs that resulted in  substantial long-term savings. Table 4 shows the number of CDRs  processed annually between fiscal year 1996 and 2001, which ranged from  about 500,000 to over 1.8 million. SSA has reported that these annual CDRs  will lead to long-term savings ranging from about $2 billion to $5.2 billion.
In addition to a favorable return on investment, SSA’s CDR activities help  protect DI and SSI program integrity. Keeping current with the CDR  workload can help build and retain public confidence that only qualified  individuals are receiving disability benefits. In addition, it helps protect the  programs’ fiscal integrity and allows SSA to meet its financial stewardship  responsibilities. To the extent the agency falls behind in conducting CDRs,  a CDR backlog undermines these positive outcomes.
section_title: Further Opportunities Exist for SSA to Improve CDR Cost- Effectiveness
paragraphs: While SSA has taken a number of actions over the past decade to  significantly improve the cost-effectiveness of the CDR process,  opportunities remain for SSA to better use program information in CDR  decision making. While DDS personnel study available information on  beneficiaries to decide when they should undergo a CDR, they do not  conduct a systematic analysis of this information. As a result, CDRs may  not be conducted at the optimal time. Also, SSA’s process for determining  what method to use for a CDR—mailer or full medical review—is not  always based on the best information available. In addition, SSA has not  fully studied and pursued the use of medical treatment data on  beneficiaries available from the Medicare and Medicaid programs despite  the potential of these data to improve SSA’s selection of the most  appropriate CDR method. Finally, SSA continues to be hampered in its  CDR decisions by missing or incomplete information on beneficiaries’ case  history, which may prevent SSA from ceasing benefits for some individuals  who no longer meet eligibility standards.
subsections: section_title: Decisions on Timing of CDRs Are Not Based on Systematic Analysis of Available Information
paragraphs: While DDS personnel review available information on beneficiaries to  establish a diary date indicating when beneficiaries should undergo a CDR,  they do not conduct a systematic analysis of this information. Diary  decisions are inherently complex because DDS personnel must assess a  beneficiary’s likelihood of medical improvement and how such medical  improvement will affect that person’s ability to work. Based on these  judgments, beneficiaries are placed in a diary category indicating either  that medical improvement is “expected,” “possible,” or “not expected.”  DDS personnel then assign a diary date that corresponds with the diary  category; the more likely a beneficiary is to medically improve, the earlier  the diary date.
Although SSA has established guidance for DDS personnel on diary date  decisions, SSA officials told us that, ultimately, such decisions are difficult  to make and are based on the judgment of the DDS staff. An SSA  contracted study of the diary process found that this process is often  subjective and that the setting of diary categories and dates is “almost an  afterthought” once the case file is developed and a disability determination  has been made. SSA’s study identified shortcomings in the diary date  process. For example, most beneficiaries assigned to the diary category  indicating they are expected to medically improve are not found to have  improved when a CDR is conducted. Our analysis of SSA data indicates  that between 1998 and 2002, only about 5 percent of beneficiaries in the  MIE category were found to have medically improved to the point of  being able to work again.
SSA’s diary process study indicated that diary predictions of medical  improvement could be substantially improved through the use of  statistical modeling techniques similar to those used in the CDR profiling  process that SSA uses to determine whether a mailer or a full medical  review is needed. The study noted that this systematic, quantitative  approach to assigning diary categories and dates would likely enhance  disability program efficiency by reducing the number of CDRs that do not  result in benefit cessation. Another benefit derived from a more  systematic approach to diary categorization, according to SSA’s study, is  improved integrity of the diary process. Such integrity improvements will  result from more timely CDRs and from actual medical improvement rates  that more closely correlate with the diary categories that SSA assigns to  beneficiaries. For example, SSA’s study indicates that the actual medical  improvement rate for beneficiaries assigned to the MIE diary category  would increase to about 29 percent under this improved process.
SSA officials told us that, in response to the diary study recommendations,  the agency has begun to revise its diary process to introduce a more  systematic approach to selecting a CDR date. In particular, SSA is  developing a process that will use beneficiary data collected at the time of  benefit application, such as impairment type and age, in a statistical  formula to help determine when a CDR should be conducted. While this  change is likely to result in some improvements in the timing of CDRs, the  fundamental diary categorization process used by DDSs will remain the  same. Despite the study’s findings and recommendations, SSA officials  told us that they will not replace SSA’s current process for assigning diary  categories with a statistical process because of what they believe would be  significant costs involved in changing this system across DDSs. However,  SSA’s study acknowledged the potential cost of implementing a new  process in DDSs, and instead recommended that a revised diary process  be centrally administered in order to avoid such high costs. The officials  also said that such fundamental changes in the diary process would  require a change in regulations.
section_title: SSA’s Process for Determining CDR Method Not Always Based on Best Information Available
paragraphs: SSA’s process for determining what method to use for a CDR is not always  based on the best information available. In the 1990s, SSA introduced a  system that develops a “profile score” for each beneficiary. The profile  score indicates the beneficiary’s likelihood for medical improvement  based on a statistical analysis of beneficiary data. The purpose of the  profile score is to allow SSA to determine whether it is more cost-effective  to send a mailer or to conduct a full medical review. SSA’s own contracted  studies indicate that profiling results provide the best available indication  of whether a beneficiary is likely to medically improve. Nevertheless, for  some beneficiaries, SSA continues to use the diary category that was  judgmentally assigned by DDS personnel as the basis for their decision  about whether to send a mailer or conduct a full medical review.
SSA requires a full medical review for all beneficiaries whose diary  category indicates that medical improvement is expected (MIE) and who  have not yet undergone a CDR. This is the case even when the profile  score indicates that improvement is unlikely. In fiscal year 2002, about   14 percent of beneficiaries in the MIE diary category were assigned to the  “low” profile category, which indicates that medical improvement is not  likely. SSA officials acknowledged that their policy requiring full medical  reviews for all beneficiaries in this diary category departs from their usual  practice of using mailers for beneficiaries in the low profile category, but  they believe that this policy is reasonable given that these beneficiaries are  more likely to medically improve than those assigned to other diary  categories. However, SSA’s data from 1998 to 2002 shows that most  beneficiaries in this category—about 94 percent—do not medically  improve to the point of being able to work.
For other CDR cases, SSA may require that a mailer be sent even when the  profile score indicates that conducting a full medical review would be  most cost-effective. Specifically, SSA’s policy is to send a mailer to all  beneficiaries who were assigned a diary category that indicates medical  improvement is not expected (MINE), even if the profile score indicates a  relatively high likelihood of medical improvement. Whether or not these  beneficiaries subsequently receive a full medical review will be based on  the results of their mailer. SSA officials said that MINE beneficiaries with a  high profile score are more likely to receive a full medical review based on  their mailer responses because SSA conducts a more stringent review of  their mailer responses. However, it is not clear that sending mailers to  beneficiaries in the high profile category is the most cost-effective  approach. SSA studies of the mailer process have indicated that, while this  process is effective, it does not provide the same assurance as full medical  reviews that medical improvement will be identified. As a result, the use of  mailers for beneficiaries whose profile scores indicate a high likelihood of  improvement could result in SSA identifying fewer benefit cessations.
section_title: SSA Has Not Fully Studied and Pursued the Use of Medical Treatment Data from Medicare and Medicaid
paragraphs: SSA has not fully studied and pursued the use of medical treatment data  on beneficiaries available from the Medicare and Medicaid programs  despite the potential of these data to improve SSA’s decisions regarding  whether to use a mailer or full medical review to complete a CDR. In   2000, an SSA contracted study found that the use of Medicare data from  the Center for Medicare and Medicaid Services (CMS)—such as data on  hospital admissions and medical treatments—resulted in a significant  improvement in SSA’s ability to assess potential medical improvement  through CDR profiling. Based on these results, SSA, in fiscal year 2003,  implemented a process that uses CMS Medicare data in CDR profiling to  determine if DI beneficiaries who are initially identified as candidates to  receive a full medical review should instead receive mailers. SSA expects  that this will result in administrative savings due to the reduced number of  full medical reviews the agency must conduct. SSA has also initiated a  study to assess whether CMS Medicaid data can be used in the same way  to decide if SSI beneficiaries, scheduled to receive full medical reviews,  could instead be sent mailers.
But SSA’s efforts to obtain and use CMS Medicare or Medicaid data are  incomplete because the data will only be used to reclassify full medical  reviews to mailers but not to reclassify mailers to full medical reviews.  SSA officials told us that they have no plans to pursue this additional use  of the data because they believe their current profiling system is sufficient  for identifying beneficiaries who have a low likelihood of medical  improvement. While they agreed that the CMS data could potentially be  useful for reclassifying mailers to full medical reviews, they noted that  they would need to first study this particular use of the data and would  need to develop another interagency agreement with CMS to authorize and  obtain data for this purpose. Also, they said that any action to reclassify  mailers to full medical reviews would require SSA to publish a Federal  Register notice describing this action.
SSA could potentially achieve substantial program savings from  conducting additional full medical reviews in cases where CMS data  indicate that beneficiaries originally identified as mailer candidates have a  relatively high likelihood of medical improvement. Using CMS Medicare  data for this purpose would be consistent with the results of an SSA study  that recommended that these data be used whenever it improves the  agency’s ability to accurately predict medical improvement. For example,  the study noted that the CMS data would be useful for enhancing SSA’s  profiling of beneficiaries with mental impairments, including those with a  low likelihood of medical improvement for whom SSA would usually send  a mailer. To the extent that CMS data improves SSA’s ability to identify  beneficiaries for full medical review, the program savings from reduced  lifetime benefit payments to those beneficiaries whose benefits are ceased  could easily exceed any increased administrative costs resulting from  additional full medical reviews.
section_title: Missing or Incomplete Case Folders May Result in Fewer Benefit Cessations
paragraphs: SSA continues to be hampered in its CDR decisions by missing or  incomplete information on beneficiaries’ case history, which may prevent  SSA from ceasing benefits for some individuals who no longer qualify for  benefits. To cease benefits based on a CDR, SSA must determine if the  beneficiary has improved by comparing information about the  beneficiary’s current condition to information from the agency’s previous  decision regarding the beneficiary’s medical condition. This previous  decision and the evidence supporting it are recorded by SSA and  maintained in case folders that are usually stored in SSA records storage  facilities. However, in conducting CDRs, DDSs sometimes have difficulty  retrieving the case folders or the key medical evidence that is maintained  in these folders.
Without the information contained in case folders, DDSs cannot establish  a comparison and, therefore, cannot determine if medical improvement  has occurred. As a result, SSA is legally required to keep the beneficiary on  the disability rolls even though the beneficiary may have been judged to no  longer qualify for benefits had the DDS been able to establish a  comparison. SSA’s inability to cease benefits in cases where folders are  missing or incomplete could result in a substantial cost to the federal  government arising from continued payments of benefits—cash and  medical—to people who no longer meet eligibility standards.
Our discussions with SSA officials, survey of DDSs, and review of SSA  studies indicate that missing or incomplete folders present an obstacle to  effective processing of CDRs. However, evidence on the extent of this  problem is mixed. In responding to our survey on CDRs, about 72 percent  of DDSs informed us that missing or incomplete information from case  folders negatively impacted the quality or timing of CDR decisions to a  moderate or great extent. An August 2002 study of missing or incomplete  folders conducted by SSA’s Office of the Inspector General reported that  DDSs, as well as other SSA components such as field offices, complained  that a large proportion of cases were missing information. This study  found that case folder retrieval is a significant problem for SSA. Among  the problems identified were untimely receipt of case folders, nonreceipt  of requested folders, and folders provided without necessary medical  evidence. The report questioned SSA’s oversight of folder inventory and  retrieval processes and recommended that SSA take various actions, such  as independent quality assurance reviews, to improve management of case  folders. A study contracted by SSA also identified problems with disability  case folder management, such as misrouted or missing folders. The study  noted that “inefficient folder management increases administrative and  program costs and risks data integrity” and recommended that SSA  “analyze the reasons for missing folders and provide recommendations for  process and systems improvements.”
SSA headquarters officials we spoke with said that SSA has examined the  incidence of missing or incomplete case folders and found that the  problem is not as significant as claimed by DDSs. For example, in fiscal  year 2000, SSA investigated allegations of substantial numbers of missing  case folders in two DDSs. SSA officials told us that they were able to  locate many of the folders that had been reported as missing. The officials  attribute the discrepancy between their findings and the allegations of  DDSs, in part, to staff shortages and workload pressures at field offices,  which result in a failure of these offices to take further steps to look for  folders. However, our survey of DDSs indicates that regardless of SSA’s  ability to locate many case folders upon further investigation, DDSs are  still having difficulty obtaining the information they need to make CDR  decisions.
In a 2002 memorandum to SSA’s Inspector General, the SSA Commissioner  acknowledged that missing or incomplete case folders are a problem in  the CDR process, but noted that the problem had been overstated. The  memorandum cited data indicating a lost folder rate of about 0.5 percent  for DI CDRs and about 3 percent for SSI CDRs. The Commissioner also  said that SSA had taken a number of actions in recent years to reduce the  incidence of lost folders, such as issuance of additional guidance and  training on this issue. In addition, the Commissioner noted that the agency  was committed to building a system of electronic folders that will  “virtually eliminate the incidences of lost folders.” While electronic folders  may be a key initiative in resolving SSA’s problems with missing or  incomplete case folders, SSA does not plan to fully implement this system  until mid-2005. In addition, these electronic folders will be established  only for new disability cases; cases established prior to implementation of  electronic folders will remain in a paper format. Therefore, problems in  handling these older case folders will likely continue.
section_title: SSA’s Rationale for Postponing Return-to- Work Services to Some Beneficiaries Is Not Well-Supported by Program Experience
paragraphs: SSA’s rationale for postponing issuance of a ticket to beneficiaries  expected to medically improve—those who are assigned an MIE diary  category—is not well-supported by program experience. In issuing  regulations implementing the ticket act, SSA decided to postpone issuance  of tickets to MIE beneficiaries who have not yet had a CDR based on the  premise that these beneficiaries could be expected to regain their capacity  to work without SSA assistance. However, our analysis of SSA data  indicates that the vast majority of MIE beneficiaries in the DI and SSI  programs—about 94 percent—are not found to have medically improved  upon completion of a CDR. As a result, some beneficiaries who might  otherwise benefit from potentially valuable return-to-work assistance must  wait up to 3 years to access services through the ticket program.
Some disability advocacy groups and SSA’s own Ticket to Work and Work  Incentives Advisory Panel have questioned SSA’s policy of delaying the  issuance of tickets to MIE beneficiaries. In particular, they have  commented that delaying tickets to all MIE beneficiaries when only a  small proportion of these beneficiaries return to work underscores the  inherent weakness of relying upon the MIE category as a basis for granting  access to ticket services. Furthermore, the ticket panel cited research  indicating that the sooner a person with recent work history receives  employment services, the more likely the person will be to return to work.  In our prior work examining DI and SSI return-to-work policies, we also  noted that delays in the provision of vocational rehabilitation services can  diminish the effectiveness of such return-to-work efforts. Delaying  services to some disability beneficiaries, therefore, undermines SSA’s  recent efforts to increase its emphasis on helping these beneficiaries  return to work.
In publishing its final regulations implementing the ticket program, SSA  wrote that many commenters on the draft regulations had indicated that  the agency should provide tickets to all beneficiaries, regardless of their  diary category. The commenters also referred to the MIE diary category as  an “administrative convenience” that is “not a sufficiently precise tool to  deny beneficiaries immediate access to a ticket.” In responding to these  comments, SSA wrote that use of the MIE category to identify which  beneficiaries should receive tickets “is the most administratively feasible  approach currently available to us.” SSA acknowledged that it might be  possible to improve the system for identifying such beneficiaries and  wrote that it planned to conduct an evaluation to identify possible  improvements.
SSA officials told us that they are examining the current policy of issuing  tickets to MIE beneficiaries to identify possible alternatives but they are  not sure when this assessment will be completed. However, they noted  that their policy of limiting ticket issuance reflects congressional interests  in striking an appropriate balance between program stewardship and  encouraging return to work. Moreover, they explained that reversing the  current policy would be costly. SSA’s actuaries have estimated that issuing  tickets to all MIE beneficiaries would cost an additional $822 million over  10 years because the ticket law prohibits SSA from conducting CDRs on  beneficiaries who are using a ticket. Therefore, SSA would continue to pay  DI and SSI benefits to some beneficiaries who might have otherwise had  their benefits terminated.
The drawbacks of SSA’s current policy of postponing issuance of tickets to  MIE beneficiaries and the potential costs associated with an alternative  policy that would allow immediate issuance of tickets to these  beneficiaries highlights the need for SSA, as part of its policy  reexamination, to consider other policy alternatives that might better  balance the agency’s program stewardship and return-to-work objectives.  While we did not conduct an in-depth assessment of potential alternatives  to SSA’s current policy, our review of the CDR program and ticket  provisions indicate that other options may exist that would achieve a  better balance among SSA’s program objectives. For example, SSA could  develop a better means of identifying beneficiaries who are expected to  medically improve. Earlier in this report, we noted that an SSA-contracted  study of the diary process recommended implementation of an improved  system that, among other things, would better identify MIE beneficiaries  through statistical modeling of diary decisions. One effect of such  improved identification, according to the study, would be to substantially  reduce the proportion of beneficiaries with an MIE diary category. For  instance, the study found that although SSA, over the past decade, has  assigned the MIE diary category to about 9 percent of DI beneficiaries, a  statistically-based diary process would result in about 3 percent of DI  beneficiaries being assigned to the MIE category. This would potentially  minimize the number of beneficiaries initially denied tickets and may also  provide more assurance, within and outside SSA, that such beneficiaries  can truly be expected to improve.
SSA might also consider an option that provides for the issuance of tickets  to all MIE beneficiaries while allowing CDRs to be conducted as scheduled  for these beneficiaries. This policy would require a legislative change  because, as we noted earlier, the Ticket to Work Act currently prohibits  SSA from conducting a CDR while a person is using a ticket. While the  ticket program’s prohibition on CDRs for ticket users was intended to  remove a potential disincentive for beneficiaries to return to work, MIE  beneficiaries currently get neither a ticket nor protection from a CDR. A  policy allowing CDRs to be conducted on these beneficiaries while they  use a ticket would at least give these beneficiaries immediate access to  return-to-work services offered under the ticket program. In addition, SSA  would still be able to achieve the cost savings that are derived from CDRs  for beneficiaries that it considers most likely to medically improve.
section_title: Conclusions
paragraphs: Failure to cost effectively process CDRs as they become due could  negatively affect DI and SSI program integrity. SSA and DDSs are to be  commended for bringing the CDR workload current as of the end of   2002. SSA is also to be commended for the improvements it has made in  the CDR process. However, a confluence of events, such as the expiration  of targeted CDR funding and an increase in initial applications, is  increasing the chances of a CDR backlog recurring, which could result in  SSA paying out billions of dollars in the long term to beneficiaries who no  longer qualify for benefits. In its fiscal year 2004 budget request, SSA has  asked the Congress for targeted funding for several program activities,  including CDRs, that provide a return on investment. If approved, the  targeted funding could increase SSA’s chances of staying current with its  CDR workload because this workload would not have to compete  internally for funding with the initial determination workload.
While SSA has taken a number of steps to improve the CDR process, it has  not taken advantage of other opportunities that could further improve the  cost-effectiveness of this process and its ability to stay current. In  particular, although a more systematic and quantitative process for  assigning diary categories and dates would likely improve the timing of  CDRs, SSA does not intend to make comprehensive revisions to the diary  process based on this more rigorous approach. In addition, despite SSA’s  reliance on profiling formulas to improve the agency’s ability to predict  medical improvement and benefit cessation, SSA is ignoring or not giving  full consideration to information from these formulas in its decisions to  conduct mailers or full medical reviews for some beneficiaries. Also,  although SSA acknowledges that medical treatment data from Medicare  and, possibly, Medicaid improve the agency’s ability to determine when a  mailer should be used, it does not see a need to consider the use of these  data to help determine when a full medical review might be preferable.  Furthermore, despite long-standing concerns, SSA has not fully addressed  the problem of missing or incomplete case folders, which limits SSA’s  ability to achieve cost savings through the CDR process.
Finally, SSA’s initial assessments of which beneficiaries are most likely to  improve are not very accurate and, therefore, may not be the most  appropriate criteria to use for delaying beneficiary access to a ticket for  return-to-work services. The ticket program is relatively new so little  program information is available for SSA to draw upon in reexamining its  current policy on ticket access for beneficiaries most likely to improve.  SSA has the challenge of developing a policy that will make return-to-work  assistance available to beneficiaries at the appropriate time while  providing adequate mechanisms for ensuring program integrity.
section_title: Recommendations to the Commissioner of SSA
paragraphs: To further improve the cost-effectiveness of the CDR process, we  recommend that the Commissioner of SSA take the following actions:    Pursue more comprehensive enhancements of the CDR diary process— beyond those already being considered—to ensure that the full benefits of  a more systematic, quantitative approach to diary setting are attained.  Among such key enhancements would be the use of a statistical approach  to determine diary categories. Given the significant implications of such  changes for the DI and SSI programs, SSA could consider pilot testing the  revised diary process before fully implementing it.
Given the cost-effectiveness of conducting mailers in cases where there is  a low likelihood for benefit cessation, revise SSA’s policy to allow mailers  to be sent whenever appropriate—as indicated by the profiling scores—to  beneficiaries with a diary category indicating that they are expected to  medically improve. For beneficiaries assigned to a diary category  indicating that they are not expected to medically improve, SSA should  conduct a thorough analysis of its current policy, which allows mailers to  be used for all of these beneficiaries regardless of their profile scores.  SSA’s analysis should evaluate the overall cost-effectiveness of this policy,  taking into account both the potential reduction in administrative costs  from conducting fewer full medical reviews and the potential increase in  benefit payments from reduced cessations. If this analysis indicates that  the current policy results in higher overall costs for SSA’s disability  programs, SSA should revise the policy to make it consistent with the  agency’s general profiling approach—which prescribes the use of full  medical reviews in cases where profiling indicates that a beneficiary has a  relatively high likelihood of medical improvement.
Study the use of Medicare and Medicaid data for the purpose of deciding  whether to use a full medical review in conducting a CDR for beneficiaries  who would otherwise receive a mailer. If found to be cost-effective, SSA  should incorporate Medicare and Medicaid data into its CDR process for  this purpose.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, SSA agreed with our  recommendations.  SSA noted that our review represents a comprehensive  and accurate assessment of SSA’s accomplishments in improving the CDR  process as well as opportunities to improve the process. While agreeing  with each of our recommendations, SSA supplied additional information  describing its current or planned actions and the basis for such actions.
With regard to our recommendation that SSA pursue more comprehensive  enhancements of its diary process, SSA said that it is currently studying  recommendations made by its contractor regarding the establishment of a  statistically-based diary process and that SSA staff will be meeting in the  near future to explore implementation options. However, SSA noted it has  not yet made a decision regarding implementation.
Regarding our recommendation that SSA revise its policies for  determining what method to use for a CDR—mailer or full medical  review—SSA said that while it generally agreed with our recommendation,  it believes we were overly harsh in stating that it is not making the best  use of available information. SSA noted that its policy for allowing mailers  to be used for all MINE beneficiaries supplements information produced  through profiling, thereby improving the process for selecting a CDR  method. SSA said that this policy is based on evaluation and analysis of  several thousand similar cases and noted that it will verify the cost- effectiveness of this policy through its ongoing integrity reviews. We  continue to believe that any departure from SSA’s analytically-based  process for using profiling scores to select a CDR method should be based  on sound analysis indicating that an alternative process would result in  improved cost-effectiveness. We, therefore, are encouraged by SSA’s plans  to evaluate the cost-effectiveness of its current policy. However, it is not  clear that SSA’s integrity reviews will be adequate for assessing the cost- effectiveness of the agency’s mailer policy for MINE beneficiaries due to  the potential limitations of these reviews. For example, an SSA-contracted  study identified several problems with the integrity reviews that SSA  conducts for beneficiaries in the low profile category, such as the drawing  of integrity samples that are not consistently representative of the mailer  population. To the extent that such problems remain unresolved, SSA may  need to develop an alternative means of evaluating its mailer policy for  MINE beneficiaries.
With regard to our recommendation on the use of Medicare and Medicaid  data for deciding whether to use a full medical review for beneficiaries  who would have otherwise received a mailer, SSA said that it intends to  contract for such a study in fiscal year 2004 if funding is available. SSA  noted that if the concept is found to be feasible, it will develop a pilot for  this approach.
SSA also provided additional comments intended to update or clarify some  information we provide in this report. In particular, SSA noted that, due to  its efforts to keep as current as possible, it believes its CDR backlog by the  end of fiscal year 2003 will be significantly less than the potential backlog  of 200,000 CDRs that we cited. While there is always a certain degree of  imprecision associated with any projection, our backlog figure is based on  the best information that was available during our review. We developed  our potential backlog figure based on extensive discussions with SSA  officials and reviews of SSA’s CDR workload and budget projections. SSA  did not provide us with any revised official estimates or analyses that  would have led us to revise the CDR backlog figure we report.
In addition, SSA said that our report implies that it does not take seriously  the shortfall in completing CDRs for the SSI program. SSA is apparently  referring to our discussion of the CDR backlog where we note that most of  the backlog that is expected to develop by the end of fiscal year 2003 will  consist of SSI CDRs, which may make the backlog less problematic than it  otherwise would have been because, among other reasons, SSI CDR  cessations have lower long-term savings than DI CDR cessations. We did  not intend to imply that SSA does not take the SSI backlog seriously.
Rather, we included this information to more accurately characterize the  nature of the potential backlog because that could provide important  insights as to how to deal with it.
Finally, SSA said that although our survey of DDS directors indicates that  attrition among disability examiners is an issue for DDSs, SSA and DDSs  are accustomed to dealing with such issues and DDSs are still able to  complete their workloads. Although we are aware that DDSs regularly  confront multiple challenges to completing their disability program  workloads, we cannot ignore the clear implications of DDS directors’  answers to our survey questions. Given that a clear majority of DDS  directors indicated that disability examiner attrition is somewhat or very  likely to jeopardize their ability to complete their CDR workload, we  believe that it is important for us to identify this issue as a potentially  significant factor in the possible development of a CDR backlog in the  years ahead.
SSA’s comments appear in appendix II. SSA also provided additional  technical comments that we have incorporated in the report, as  appropriate.
Copies of this report are being sent to the Commissioner of SSA,  appropriate congressional committees, and other interested parties. The  report is also available at no charge on GAO’s Web site at  http://www.gao.gov. If you have any questions about this report, please  contact me at (202) 512-7215. Other contacts and staff acknowledgments  are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To evaluate the impact of the expiration of separate funding for continuing  disability review (CDR) processing and the level of funding needed to  remain current with the CDR caseload, we interviewed Social Security  Administration (SSA) officials from the Office of Budget, the Office of the  Chief Actuary, the Office of Disability and Income Security Programs at  SSA headquarters in Baltimore. We also reviewed SSA documents,  including the agency’s budget request and estimates of the cost and  savings from conducting CDRs. In addition, we surveyed Disability  Determination Services (DDS) directors to assess the potential effect of  the expiration of special CDR funding on DDS operations. To develop the  survey, we identified information that would help us address the research  questions. We generated specific survey items by reviewing SSA CDR  reports submitted annually to the Congress and drawing upon interviews  we conducted early in the assignment with SSA officials and the National  Association of Disability Examiners. We validated our survey instrument  by obtaining feedback from SSA officials and pretesting it with several  current DDS directors.
In consultation with SSA, we excluded 2 of the 54 DDSs from our survey  as well as the federal DDS. The two DDSs excluded were Guam and South  Carolina’s DDS serving persons who are blind–both relatively small DDSs  that are run by one person. We excluded the federal DDS because  responses from this site might skew results as the site (1) is a federal  entity and as such it is “different” than other DDSs, (2) is used to process  the overflow of CDRs, and (3) serves as SSA’s test unit. The remaining   52 DDSs (essentially 1 for each of the 50 states, plus the District of  Columbia and Puerto Rico) comprised the study universe. All 52 of these  DDSs responded to our survey.
To assess the opportunities for SSA to improve CDR cost-effectiveness  and to examine SSA’s rationale for delaying return-to-work services to  some beneficiaries under the ticket to work program, we interviewed SSA  officials from the Office of Disability and Income Security Programs and  the Office of the Chief Actuary at SSA headquarters in Baltimore. We also  reviewed legislation, regulations, and SSA policy guidance related to the  CDR and the ticket programs. In addition, we examined various studies  and reports on the CDR and ticket to work programs, including reports  from SSA’s Office of the Inspector General and a wide range of contractor- produced reports analyzing the cost-effectiveness of the CDR process.  Finally, we analyzed data from SSA on the number of adult DI and SSI  beneficiaries, aged 19-64, assigned to various CDR diary and profiling  categories and the CDR outcomes—cessation or continuance—for these  beneficiaries. These data were derived from SSA administrative data sets  used by the agency to select cases for review and to track the results of  CDRs. We did not independently verify these data, but based on  comparison to SSA’s previously published data, and discussion of minor  discrepancies with SSA officials, we determined that they were sufficiently  reliable for our purposes. We performed our work in accordance with  generally accepted government auditing standards between August   2002 and May 2003.
section_title: Appendix II: Comments from the Social Security Administration
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: The following individuals also made important contributions to this report:  Mark Trapani, Melinda L. Cordero, and Corinna A. Nicolaou.