Electronic Disability Claims Processing: Social Security Administration's Accelerated Strategy Faces Significant Risks
Published: 2003-07-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Providing benefits to disabled individuals is one of the Social Security Administration's (SSA) most important service delivery obligations--touching the lives of about 10 million individuals. In recent years, however, providing this benefit in a timely and efficient manner has become an increasing challenge for the agency. This past January, in fact, GAO designated SSA's disability programs as highrisk. Following a prior unsuccessful attempt, the agency is now in the midst of a major initiative to automate its disability claims functions, taking advantage of technology to improve this service. Seeking immediate program improvements, SSA is using an accelerated approach--called AeDib--to develop an electronic disability claims processing system. At the request of the Subcommittee on Social Security, House Committee on Ways and Means, GAO is currently assessing the strategy that underlies SSA's latest initiative to develop the electronic disability system. For this testimony, GAO was asked to discuss its key observations to date regarding the AeDib initiative, including strategy, risks, and stakeholder involvement. GAO plans to discuss more fully the results of this continuing review in a subsequent report
section_title: What GAO Found
paragraphs: SSA's goal to establish a more efficient, paperless disability claims processing system is important, and one that could benefit millions. To achieve this goal, SSA's immediate focus is on developing an electronic folder to store claimant information and large volumes of medical images, files, and other documents that are currently maintained in paper folders, and then make this information accessible to all entities involved in disability determinations. SSA's accelerated strategy calls for development of this capability by January 2004 rather than in 2005, as originally planned. Since accelerating this effort, SSA has performed important tasks toward establishing this initial electronic capability. Nonetheless, it has substantial work to accomplish in order to develop the technologically complex electronic folder and begin implementation by late next January. While responsive to the agency's need for an operational system as soon as possible, SSA's accelerated strategy involves risks. For example, pilot tests that are to provide important information about the electronic folder's performance are not expected until late December--just 1 month before its planned implementation. In addition, a strategy for end-to-end testing to demonstrate that the individual components will work together reliably has not been completed. Further increasing the system's vulnerability is that SSA has not yet comprehensively assessed project risks. Unless addressed, these factors could ultimately derail the initiative. While SSA has taken steps to involve key stakeholders in the systems development process, officials in state Disability Determination Services offices that we contacted expressed concerns that they had only limited involvement in the development effort. They stated that their concerns were not adequately heard and considered in the decision-making process. Unless SSA addresses these issues, it cannot be assured of stakeholder agreement with and full use of the system.

section_title: Letter
paragraphs: I am pleased to be here today to participate in your continuing dialogue on  the Social Security Administration’s (SSA) service-delivery capability. My  testimony focuses on a critical aspect of SSA’s overall goal—its ongoing  initiative to achieve an electronic disability claims process. As you know,  one of SSA’s most vital obligations is paying cash benefits to disabled  individuals under the Disability Insurance and Supplemental Security  Income programs. In 2002, the agency paid approximately $86 billion to  about 10 million disabled beneficiaries. Yet, over the years, it has become  an increasing challenge for SSA to ensure an acceptable level of service— both in terms of quality and timeliness. This past January, in fact, we  reported SSA’s disability programs as high-risk.
During testimony before this Subcommittee in May 2002, the  Commissioner of Social Security voiced concerns about the length of time  that the current disability process can take, and promised immediate  improvements. Among these improvements, she announced plans to  accelerate SSA’s initiative to develop an electronic disability claims process  by late January 2004 rather than late 2005 as initially planned. SSA’s  refocused project is known as the accelerated electronic disability  initiative—AeDib.
At your request, we are currently reviewing AeDib to assess SSA’s strategy  for developing the electronic disability claims process. My testimony will  discuss our key observations to date regarding the initiative, including  SSA’s (1) accelerated approach for and progress toward completing the  electronic disability system, (2) actions for ensuring the system’s  successful operations and protection against risks, and (3) consultation  with and support from key stakeholders. We plan to discuss more fully the  results of our ongoing review in a subsequent report to you.
In conducting this work, we analyzed relevant documentation describing  SSA’s plans and strategies for developing and implementing the AeDib  system and its progress in doing so. We reviewed technical documents  pertaining to the system development and interviewed appropriate SSA  officials to determine the extent to which the agency has followed its  software development guidance. We supplemented our analysis with  interviews of SSA officials in the Offices of Disability Programs,  Operations, Systems, and Hearings and Appeals. In addition, we visited SSA  field offices in Delaware and Texas to observe disability claims intake  operations and obtain staff perspectives on the AeDib project. We also  conducted site visits at the Delaware, New York, Texas, and Wisconsin  Disability Determination Services (DDS) offices to observe disability  system pilot tests and discuss these offices’ involvement in planning and  implementing AeDib. Further, we surveyed staff in six other DDS offices,  and interviewed representatives of state and SSA employees and the  medical community. These included the National Council of Disability  Determination Directors, the American Federation of Government  Employees, and the American Health Information Management  Association. We performed our work to date in accordance with generally  accepted government auditing standards, from December 2002 through  July of this year.
subsections: section_title: Background
paragraphs: The Disability Insurance and Supplemental Security Income programs are  the nation’s largest providers of federal income assistance to disabled  individuals, with SSA making payments of approximately $86 billion to  about 10 million beneficiaries in 2002. The process through which SSA  approves or denies disability benefits is complex and involves multiple  partners at both the state and federal levels in determining a claimant’s  eligibility. Within SSA, these include its 1,300 field offices, which serve as  the initial point of contact for individuals applying for benefits, and the  Office of Hearings and Appeals, which, at the request of claimants,  reconsiders SSA’s decisions when benefits are denied.
SSA also depends on 54 state Disability Determination Services (DDS)  offices to help process claims under its disability insurance programs.  State DDSs provide crucial support to the initial disability claims process— one that accounts for most of SSA’s workload—through their role in  determining an individual’s medical eligibility for disability benefits. DDSs  make decisions regarding disability claims in accordance with federal  regulations and policies; the federal government reimburses 100 percent of  all DDS costs in making disability determination decisions. Physicians and  other members of the medical community support the DDSs by providing  the medical evidence to evaluate disability claims.
The process begins when individuals apply for disability benefits at an SSA  field office, where determinations are made about whether they meet  nonmedical criteria for eligibility. The field office then forwards the  applications to the appropriate state DDS, where a disability examiner  collects the necessary medical evidence to make the initial determination  of whether the applicant meets the definition of disability. Once the  applicant’s medical eligibility is determined, the DDS forwards this  decision to SSA for final processing.
Claimants who are initially denied benefits can ask to have the DDS  reconsider its denial. If the decision remains unfavorable, the claimant can  request a hearing before a federal administrative law judge at an SSA  hearings office, and, if still dissatisfied, can request a review by SSA’s  Appeals Council. Upon exhausting these administrative remedies, the  individual may file a complaint in federal district court. Each level of  appeal, if undertaken, involves multi-step procedures for the collection of  evidence, information review, and decision making. Many individuals who  appeal SSA’s initial decision will wait a year or longer—perhaps up to 3  years—for a final decision.
To address concerns regarding the program’s efficiency, in 1992 SSA  initiated a plan to redesign the disability claims process, emphasizing the  use of automation to achieve an electronic (paperless) processing  capability. The automation project started in 1992 as the Modernized  Disability System, and was redesignated the Reengineered Disability  System (RDS) in 1994. RDS was to automate the entire disability claims  process—from the initial claims intake in the field office to the gathering  and evaluation of medical evidence at the state DDSs, to payment  execution in the field office or processing center, and including the  handling of appeals at the hearings offices. However, our prior work noted  that SSA had encountered problems with RDS during its initial pilot testing.  For example, systems officials had stated that, using RDS, the  reported productivity of claims representatives in the SSA field offices  dropped.  They noted that before the installation of RDS, each field office  claims representative processed approximately five case interviews per  day.  After RDS was installed, each claims representative could process  only about three cases per day.  As a result, following an evaluation by a  contractor, SSA suspended RDS in 1999 after approximately 7 years and  more than $71 million reportedly spent on the initiative.
In August 2000 SSA issued a management plan with a renewed call for  developing an electronic disability system by the end of 2005. The strategy  was to incorporate three components: an electronic disability intake  process that would include (1) a subset of the existing RDS software, (2)  the existing DDS claims process, and (3) a new system for the Office of  Hearings and Appeals. The management plan also provided for several pilot  projects to test the viability and performance of each project component.   SSA’s work on this effort occurred through the spring of 2002, at which time  the Commissioner announced that she had begun an accelerated initiative  to more quickly automate the disability claims process.  The agency  anticipated that, with technologically advanced disability processing  offices, it could potentially realize benefits of more than $1 billion, at an  estimated cost of approximately $900 million, over the 10-year life of the  accelerated initiative.
section_title: AeDib’s Strategy Calls For Developing and Integrating Multiple Disability System Projects
paragraphs: In undertaking AeDib, SSA has embarked on a major initiative consisting of  multiple projects that are intended to move all partners in its disability  claims adjudication and review to an electronic business process. SSA  envisions that AeDib will allow its disability components to stop relying on  paper folders to process claims and to develop new business processes  using legacy systems and information contained in an electronic folder to  move and process all of its work. In so doing, SSA anticipates that AeDib  will enable disability components to achieve processing efficiencies,  improve data completeness, reduce keying errors, and save time and  money.
The AeDib strategy focuses on developing the capability for claimant  information and large volumes of medical images, files, and other  documents that are currently maintained in paper folders to be stored in  electronic folders, and then accessed, viewed, and shared by the disability  processing offices.  SSA is undertaking five key projects to support the  strategy:   An Electronic Disability Collect System to provide the capability for SSA  field offices to electronically capture information about the claimant’s  disability and collect this structured data in an electronic folder for use  by the disability processing offices;  A Document Management Architecture that will provide a data  repository and scanning and imaging capabilities to allow claimant  information and medical evidence to be captured, stored, indexed, and  shared electronically between the disability processing offices.
Internet applications that will provide the capability to obtain disability  claims and medical information from the public via the Internet.
A DDS systems migration and electronic folder interface that will  migrate and enhance the existing case processing systems to allow the  state disability determination services offices to operate on a common  platform and prepare their legacy systems to share information in the  electronic folder; and   A Case Processing and Management System for the Office of Hearings  and Appeals that will interface with the electronic folder and enable its  staff to track, manage, and complete case-related tasks electronically.
According to SSA, the Electronic Disability Collect System and the  Document Management Architecture are the two fundamental elements  needed to achieve the electronic disability folder.  By late January 2004,  SSA plans to have developed these two components. It also expects to have  completed five Internet disability applications, enhanced the DDS legacy  systems, and developed the software that will allow existing SSA and DDS  systems to interface with the electronic folder. However, SSA will not yet  have implemented the scanning and imaging capabilities and the interface  software to enable each disability processing office to access and use the  data contained in the electronic folder. SSA officials explained that, at the  end of next January, the agency plans to begin an 18-month rollout period,  in which it will implement the scanning and imaging capabilities and  establish the necessary interfaces. SSA has drafted but not yet finalized the  implementation strategy for the rollout.
section_title: SSA Has Completed Important AeDib Tasks, But Much Work Remains
paragraphs: SSA has performed several important project tasks since beginning the  accelerated initiative in 2002. For example, it has implemented limited  claims-intake functionality as part of the Electronic Disability Collect  System, and begun additional upgrades of this software. In addition, it has  developed two Internet applications for on-line forms to aid claimants in  filing for disability benefits and services. Further, to support electronic  disability processing, SSA is in the process of migrating and upgrading  hardware and case processing software to allow all of the 54 state DDSs to  operate on a common platform, and has begun developing software to  enable the DDS systems to interface with the electronic folder. SSA has  also performed some initial tasks for the Document Management  Architecture, including developing a system prototype, establishing  requirements for the scanning capability, and drafting a management plan  and training strategy.
Nonetheless, the agency still has a significant amount of work to  accomplish to achieve the electronic disability folder by the end of next  January. While substantial work remains for each of the AeDib  components, primary among SSA’s outstanding tasks is completing the  Document Management Architecture’s development, testing, and  installation at the agency’s National Computer Center. Table 1 illustrates  SSA’s progress through last June in accomplishing tasks included in the  AeDib initiative, along with the many critical actions still required to  develop and implement the electronic disability processing capability.
As the table reflects, SSA’s electronic disability claims process hinges on  accomplishing numerous critical tasks by the end of January 2004. In  discussing the overall progress of the initiative, SSA officials in the Offices  of Systems and Disability Programs acknowledge that the agency will be  severely challenged to accomplish all of the tasks planned for completion  by the end of January. Nonetheless, they believe that SSA will meet the  targeted project completion dates, stating that the agency has conducted  the necessary analyses to ensure that the accelerated schedule can  accommodate the project’s scope.
section_title: Risks in Developing the Electronic Disability System Increase AeDib’s Overall Vulnerability
paragraphs: Beyond meeting an ambitious project implementation schedule, SSA must  ensure that the system it delivers successfully meets key business and  technical requirements for reliably exchanging data among disability  processing components and is protected from errors and vulnerabilities  that can disrupt service. Accomplishing this necessitates that SSA conduct  complete and thorough testing to provide reasonable assurance that  systems perform as intended. These include tests and evaluations of pilot  projects to obtain data on a system’s functional performance and end-to- end tests to ensure that the interrelated systems will operate together  effectively. In addition, the success of the system will depend on the agency  identifying and mitigating critical project risks.
SSA plans to rely on pilot tests and evaluations to help guide business and  technical decisions about the electronic disability folder, including critical  decisions regarding the document management technology. For example,  SSA stated that the Document Management Architecture pilots will be used  to test electronic folder interface requirements and DDS site configurations  for AeDib national implementation.  In addition, the pilots are expected to  test the business process and work flow associated with incorporating the  Document Management Architecture. SSA has stated that this information  is crucial for determining whether the technology selected for the  Document Management Architecture will adequately support the electronic  folder.
However, SSA may not be able to make timely and fully informed decisions  about the system based on the pilot test results. The pilot tests were to  begin this month, and some of the test results upon which decisions are to  be based are not expected to be available until the end of December at the  earliest, leaving little time to incorporate the results into the system that is  to be implemented by late January. Further, even when completed, the pilot  tests will provide only limited information about the electronic folder’s  functionality. SSA stated that they will not test certain essential aspects of  the folder usage, such as the DDS’s disability determination function. Thus,  whether SSA will have timely and complete information needed to make  decisions that are essential to developing and implementing the electronic  disability folder is questionable.
In addition, given the technological complexity of the AeDib project, the  need for end-to-end testing is substantial. Our prior work has noted the  need for such testing to ensure that interrelated systems that collectively  support a core business area or function will work as intended in a true  operational environment. End-to-end testing evaluates both the  functionality and performance of all systems components, enhancing an  organization’s ability to trust the system’s reliability. SSA’s development and  use of new electronic tools to integrate an electronic folder with its own  and DDS legacy systems, along with Web-based applications and the new  Document Management Architecture, elevates the importance of ensuring  that all parts will work together as intended.
However, the agency currently has not completed a test and evaluation  strategy to conduct end-to-end testing to demonstrate, before deployment,  that these systems will operate together successfully. They added that  conducting end-to-end testing would require delaying system  implementation to allow the time needed for a claim to be tested as it  moved through all of the disability components—a process that could take  up to 6 months to complete. However, determining that all AeDib  components can correctly process disability claims when integrated is vital  to SSA’s knowing whether the electronic disability system can perform as  intended.
Compounding AeDib’s vulnerability is that SSA has not yet undertaken a  comprehensive assessment of project risks to identify facts and  circumstances that increase the probability of failing to meet project  commitments, and taking steps to prevent this from occurring. Best  practices and federal guidance advocate risk management.  To be  effective, risk management activities should be (1) based on documented  policies and procedures and (2) executed according to a written plan that  provides for identifying and prioritizing risks, developing and implementing  appropriate risk mitigation strategies, and tracking and reporting on  progress in implementing the strategies.  By doing so, potential problems  can be avoided before they manifest themselves into cost, schedule and  performance shortfalls.
SSA has developed a risk management plan to guide the identification and  mitigation of risks, and based on that plan, has developed a high-level risk  assessment of program and project risks. The high-level assessment, which  SSA issued last February, identified 35 risks that the agency described as  general in nature and addressing only overall program management issues  related to the project’s costs, schedule, and hardware and software. For  example, one of the high-level risks stated that the overall availability of the  Document Management Architecture might not meet service-level  commitments.  The related mitigation strategy stated that the agency  should continue to investigate various approaches to ensure the system’s  availability.
SSA has acknowledged the potential for greater risks given the electronic  case processing and technological capability required for AeDib. Further, in  response to our inquiries, its officials stated that the agency would conduct  and document a comprehensive assessment of project risks by June 30 of  this year. The officials added that AeDib project managers would be given  ultimate responsibility for ensuring that appropriate risk-mitigation  strategies existed and that SSA had tasked a contractor to work with the  managers to identify specific risks associated with each system  component.  However, at this time, SSA is still without a comprehensive  assessment of risks that could affect the project. Until it has a sound  analysis and mitigation strategy for AeDib, SSA will not be in a position to  cost-effectively plan for and prevent circumstances that could impede a  successful project outcome.
section_title: Unresolved Stakeholder Concerns Could Undermine AeDib’s Success
paragraphs: Integral to AeDib’s success are disability process stakeholders that SSA  relies on to fulfill the program’s mission, including state disability  determination officials and medical providers. As primary partners in the  disability determination process, stakeholders can offer valuable and  much-needed insight regarding existing work processes and information  technology needs, and their stake and participation in the systems  development initiative is essential for ensuring its acceptance and use. In  assessing lessons learned from SSA’s earlier attempt to implement the  failed Reengineered Disability System, Booz-Allen and Hamilton  recommended that SSA at all times keep key stakeholders involved in its  process to develop an electronic disability processing capability.
SSA disability program and systems officials told us that the agency has  involved its various stakeholders in developing AeDib.  They stated that the  agency has entered into memorandums of understanding for data sharing  with state DDSs, established work groups comprising DDS representatives  to obtain advice on development activities, and included these  stakeholders in steering committee meetings to keep them informed of the  project’s status.  In addition, SSA stated, it has met with representatives of  major medical professional associations to seek their support for SSA’s  requests for releases of medical evidence.
However, officials that we contacted in nine of the ten DDS offices stated  that their concerns were not adequately heard and considered in the  decision-making process for the development of AeDib, despite the critical  and extensive role that states play in making disability determinations.  Because of this limited involvement, the National Council of Disability  Determination Directors, which represents the DDSs, stated that they were  concerned that SSA may be pursuing an automated disability strategy that  could negatively affect business operations by creating delays in the ability  to make decisions on disability cases. The DDS representatives stated that  SSA has not articulated a clear and cohesive vision of how the disability  components will work to achieve the AeDib goal and that decisions about  AeDib were being made without considering their perspectives. They  explained, for example, that SSA’s decision to use a scanning and imaging  vendor to whom medical providers would have to submit evidence would  introduce an additional step into the disability process, and might result in  DDSs’ not being able to effectively manage the critical information that  they need to make disability determinations. Further, they have questions  about how in the disability process evidence will be electronically stored,  noting that SSA has proposed, but not yet decided among, three possible  scenarios for establishing repositories to house medical evidence.
Last March, the National Council of Disability Determination Directors  made three suggestions to SSA aimed at allowing the DDSs to have greater  responsibility for this aspect of the disability business process. Among  their proposals was that DDSs (1) be allowed to manage the contractors  who will be responsible for scanning and imaging all records received from  medical providers; (2) have the choice of receiving electronic medical  evidence at a repository maintained at their sites rather than at remote,  centralized locations; and (3) be allowed to test the possibility of scanning  records after, rather than before, the DDS adjudicates a claim. According to  the council, this latter approach would ensure that the DDSs could make  timely and accurate disability determinations, while also allowing SSA the  time to perfect the electronic business process and transition to the initial  case process. As of last week, however, SSA had not responded. For its  part, SSA stated that it is reviewing, but has not yet taken a position on, the  council’s proposals.
SSA’s consultation with the medical community (physicians and other  sources of medical evidence used to evaluate disability claims) also has  been limited. These stakeholders are critical, as they represent the basic  source of most of the information that states use to evaluate an individual’s  disability. One of the key savings that SSA anticipates from AeDib is based  on physicians and other medical sources electronically transmitting or  faxing medical evidence that is now mailed to the DDSs. SSA has estimated  that as much as 30 percent of all medical evidence could be faxed or  electronically received from these providers, with the majority of it being  faxed. In speaking with American Health Information Management  Association officials in Georgia and Wisconsin, however, they expressed  concern about the possibility that SSA will want medical providers to fax  evidence. They cited the voluminous nature of much of the medical  evidence that they send to the DDSs, and believe that faxing it would be too  costly and not secure.
Our review to date has not assessed the validity of the concerns expressed  by the stakeholders, or SSA’s responses to them. Nonetheless, as long as  such concerns exist, SSA must be diligent in pursuing a mutually agreed- upon understanding with its stakeholders about its vision and plan of  action being pursued. SSA’s success in implementing AeDib depends  heavily on resolving all outstanding issues and concerns that could affect  the use and, ultimately, the outcome of the intended electronic capability.  Without stakeholders’ full and effective involvement in AeDib’s planning  and development, SSA cannot be assured that the system will satisfy  critical disability process requirements and be used as intended to achieve  desired processing efficiencies and improved delivery of services to  beneficiaries.
To summarize, Mr. Chairman, in moving toward an electronic disability  process, SSA has undertaken a positive and very necessary endeavor.  Having the means to more effectively and efficiently provide disability  benefits and services is essential to meeting the needs of a rapidly aging  and disabled population, and we applaud the Commissioner’s  determination and proactive pursuit of this service-delivery enhancement.
Nonetheless, SSA’s accelerated strategy may involve risks of delivering a  system that will not sufficiently address its needs. The execution of critical  pilot tests that are not scheduled for completion until December or later,  coupled with the lack of planned end-to-end testing and a comprehensive  assessment of risks, may prevent SSA from delivering an information  technology capability based on sound and informed decision making.  Moreover, uncertainties about the successful outcome of this project are  exacerbated by concerns that key stakeholders in the disability process  continue to have. Given the importance of this project to SSA’s future  service-delivery capability, it is essential that the agency satisfy itself that  AeDib will perform as intended with minimal risk before it is deployed  nationwide. We will continue to monitor SSA’s progress on this initiative as  part of our ongoing review.
This concludes my statement. I would be happy to respond to any  questions that you or other members of the Subcommittee may have at this  time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: For information regarding this testimony, please contact Linda D. Koontz,  Director, or Valerie Melvin, Assistant Director, Information Management  Issues at (202) 512-6240. Other individuals making key contributions to this  testimony include Michael Alexander, Tonia D. Brown, Derrick Dicoi, and  Mary J. Dorsey.
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