Social Security Disability: Participation in the Ticket to Work Program Has Increased, but More Oversight Needed
Published: 2011-09-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses the Social Security Administration's (SSA) Ticket to Work and Self-Sufficiency Program (Ticket program). Created by law in 1999, the Ticket program was intended to assist disability beneficiaries in obtaining and retaining employment, and potentially bring about significant savings to the Disability Insurance Trust Fund by reducing or eliminating their benefits. Under the program, SSA provides each eligible beneficiary (ticket holder) with a ticket to obtain services from SSA-approved public or private providers, referred to as employment networks (EN), or from traditional state vocational rehabilitation agencies (VR). When the Ticket program was created, it was estimated that it had the potential to provide significant savings to the Social Security Trust Funds and Treasury. However, our prior work and the work of SSA's Office of the Inspector General and others has questioned the viability of the program due to low participation and costs that are not offset by beneficiaries returning to work and reducing dependency on benefits. In an effort to address these concerns, SSA revised its regulations in 2008 to attract more ticket holders and ENs. This testimony summarizes our report issued in May and focuses on (1) how participation of ticket holders and employment networks in the Ticket program has changed over time, (2) what is known about the range of service approaches used by employment networks, and (3) the policies and processes SSA has to evaluate employment networks and ticket holders to ensure program integrity and effectiveness.
section_title: What GAO Found
paragraphs: In summary, we found that more ticket holders and ENs are participating in the Ticket program since SSA revised its regulations in 2008, but the overall participation rate remains low. SSA has not yet studied whether the 2008 changes have enabled more ticket holders to obtain employment and exit the benefit rolls. The number of ENs approved to serve ticket holders has increased; however, many ENs are not actively participating, and ticket payments have remained concentrated with only 20 ENs. These ENs provide a range of services, including assistance with job search and retention. But since the 2008 changes in regulations, an increasing number have used service approaches targeting ticket holders who are already working or ready to work, including simply passing back a portion of the payment from SSA. Finally, we found SSA lacks adequate management tools for evaluating ENs and ticket holders to ensure program integrity and effectiveness. For instance, SSA has not developed performance measures for contracted ENs to assess their success in helping assigned ticket holders obtain and retain employment and reduce dependence on disability benefits. Without such measures, we found multiple ENs communicating to ticket holders how to work part time and keep full disability benefits indefinitely, despite the fact that the ultimate goal of the program is to reduce dependence on benefits. In addition, ticket holders who show timely progress toward self-supporting employment are generally exempt from medical continuing disability reviews (CDRs) conducted to determine continued eligibility for benefits. However, SSA has not consistently monitored or enforced the requirements for timely progress and, therefore, ticket holders in the program have been exempt from CDRs for years regardless of whether they show progress in the program. Lack of systematic monitoring of timely progress has both program integrity and cost implications, such as the potential for ineligible beneficiaries to continue receiving benefits. In our May report, we made four recommendations to address these issues and enhance program oversight. SSA has already implemented one of these recommendations, developing performance measures for ENs, and has reported it is moving forward to implement another to track EN service approaches and assess their consistency with program goals. We will continue to monitor the agency's implementation of the other recommendations.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Social Security  Administration’s (SSA) Ticket to Work and Self-Sufficiency  Program (Ticket program). Created by law in 1999, the Ticket  program was intended to assist disability beneficiaries in  obtaining and retaining employment, and potentially bring about  significant savings to the Disability Insurance Trust Fund by  reducing or eliminating their benefits. Under the program, SSA  provides each eligible beneficiary (ticket holder) with a ticket to  obtain services from SSA-approved public or private providers,  referred to as employment networks (EN), or from traditional  state vocational rehabilitation agencies (VR). When the Ticket  program was created, it was estimated that it had the potential  to provide significant savings to the Social Security Trust Funds  and Treasury. However, our prior work and the work of SSA’s  Office of the Inspector General and others has questioned the  viability of the program due to low participation and costs that  are not offset by beneficiaries returning to work and reducing  dependency on benefits. In an effort to address these concerns,  SSA revised its regulations in 2008 to attract more ticket  holders and ENs.
My testimony summarizes our report issued in May and focuses  on (1) how participation of ticket holders and employment  networks in the Ticket program has changed over time, (2) what  is known about the range of service approaches used by  employment networks, and (3) the policies and processes SSA  has to evaluate employment networks and ticket holders to  ensure program integrity and effectiveness. To conduct this  work, we analyzed SSA data on ticket holder and EN  participation, and reviewed SSA policies and procedures for the  program, and relevant federal laws and regulations. We also  interviewed representatives of 25 ENs, including 20 ENs among  those with the largest payments in fiscal years 2007 and 2009,  as well as disability advocacy organization and SSA officials. In  addition, an investigator from our Forensic Audits and  Investigative Service team contacted selected ENs, posing as a  fictitious employer or relative of a ticket holder to test for  potential vulnerabilities in program management and oversight.  A more detailed explanation of our methodology is available in  our full report. Our work was performed in accordance with  generally accepted government auditing standards.
In summary, we found that more ticket holders and ENs are  participating in the Ticket program since SSA revised its  regulations in 2008, but the overall participation rate remains  low. SSA has not yet studied whether the 2008 changes have  enabled more ticket holders to obtain employment and exit the  benefit rolls. The number of ENs approved to serve ticket  holders has increased; however, many ENs are not actively  participating, and ticket payments have remained concentrated  with only 20 ENs. These ENs provide a range of services,  including assistance with job search and retention. But since the  2008 changes in regulations, an increasing number have used  service approaches targeting ticket holders who are already  working or ready to work, including simply passing back a  portion of the payment from SSA. Finally, we found SSA lacks  adequate management tools for evaluating ENs and ticket  holders to ensure program integrity and effectiveness. For  instance, SSA has not developed performance measures for  contracted ENs to assess their success in helping assigned ticket  holders obtain and retain employment and reduce dependence  on disability benefits. Without such measures, we found multiple  ENs communicating to ticket holders how to work part time and  keep full disability benefits indefinitely, despite the fact that the  ultimate goal of the program is to reduce dependence on  benefits. In addition, ticket holders who show timely progress  toward self-supporting employment are generally exempt from  medical continuing disability reviews (CDRs) conducted to  determine continued eligibility for benefits. However, SSA has  not consistently monitored or enforced the requirements for  timely progress and, therefore, ticket holders in the program  have been exempt from CDRs for years regardless of whether  they show progress in the program. Lack of systematic  monitoring of timely progress has both program integrity and  cost implications, such as the potential for ineligible  beneficiaries to continue receiving benefits. In our May report,  we made four recommendations to address these issues and  enhance program oversight. SSA has already implemented one  of these recommendations, developing performance measures  for ENs, and has reported it is moving forward to implement  another to track EN service approaches and assess their  consistency with program goals. We will continue to monitor the  agency’s implementation of the other recommendations.
subsections: section_title: Background
paragraphs: To be eligible for Disability Insurance (DI) or Supplemental  Security Income (SSI) benefits, an individual generally must  have a medically determined physical or mental impairment that  (1) has lasted or is expected to last at least 1 year or result in  death and (2) prevents the individual from engaging in  substantial gainful activity (SGA). Once an individual is  receiving benefits, CDRs are periodically conducted by SSA to  determine if the individual has medically improved to the point  of being able to work and is no longer eligible for benefits.
When an individual becomes eligible for DI or SSI benefits, SSA  mails a ticket to them. Generally, DI and SSI beneficiaries from  18 to 64 years old are eligible ticket holders and may choose  whether or not to use their tickets, and with which service  providers. Likewise, SSA-approved ENs can decide whether to  serve an individual ticket holder. Ticket holders who assign their  tickets and demonstrate “timely progress” toward self- supporting employment, such as by fulfilling minimum earnings  or education requirements to be reviewed regularly, are  exempted from medical CDRs. This provision provides an  incentive for individuals to assign their tickets who otherwise  might not attempt to work out of fear that a medical CDR would  cause them to lose benefit eligibility. The ticket holder’s ticket  becomes “assigned” once the ticket holder and EN decide to  work together and submit an individual work plan describing the  services the EN will provide. A ticket holder can unassign the  ticket from the EN at any time, sometimes switching to a  different EN. When the ticket holder has sufficient earnings, the  EN becomes eligible for payments from SSA. The EN can  choose from two payment options: (1) milestone-outcome  payments that begin when the ticket holder achieves a specified  level of earnings and continue for a specified time after the  ticket holder no longer receives benefits due to earnings, or (2)  outcome-only payments that do not begin until the ticket holder  is entirely off benefits.
Due to low participation rates by both ticket holders and ENs,  SSA revised the Ticket program regulations in 2008. The  changes lowered the ticket holder earnings threshold that  triggers payments to ENs. Previously, ENs were not eligible for  SSA payment until a ticket holder had earnings at the SGA level  or above. Now there is a first phase of four $1,275 payments  over a ticket holder’s first 9 months working at the trial work  level, which is below SGA and, in many cases, equates to part- time work. The EN is also eligible for a second phase of smaller  monthly payments when a ticket holder has earnings above the  SGA level, and a third and final phase of payments (the  outcome phase) once a ticket holder is earning above SGA and  no longer receives disability benefits. Another key change made  in 2008 was to explicitly allow ENs to use milestone or outcome  payments to make payments directly to ticket holders.
section_title: More Ticket Holders and Employment Networks Participating, but Participation Rate Remains Low
paragraphs: Ticket holders assigning their tickets to ENs increased from  about 22,000 in fiscal year 2007, before the changes to program  regulations, to more than 49,000 as of July 2010. Despite the  increase in numbers, those assigning their tickets to ENs  represented less than 1 percent of the approximately 12.1  million eligible ticket holders as of July 2010. Representatives  of the private company SSA contracts with to conduct outreach  told us that while they are beginning to place more emphasis on  increasing ticket holder participation, their earlier recruitment  efforts prioritized increasing the supply of ENs. According to EN  representatives, ticket holder participation remains low due, in  part, to a lack of understanding and awareness of the program.  Some disability rights advocates and EN representatives said a  fear of losing benefits may also deter eligible ticket holders from  participating in the program, especially DI beneficiaries who,  after a 9-month trial work period, face an immediate cessation  of benefits in a given month when earnings exceed SGA.
Although the number of ticket holders assigning their tickets has  increased since the 2008 changes, the extent to which more  ticket holders are returning to work and exiting the benefit rolls  is unknown. The law requires SSA to conduct ongoing  independent evaluations of ticket holders’ employment  outcomes, and SSA has tentative plans to study exits from the  benefit rolls under the revised program regulations. Whether  or not ticket holders are able to leave the rolls has implications  for the program’s cost-effectiveness and ultimately, its long- term viability. In preliminary research examining the program  prior to the 2008 regulatory changes, Mathematica found more  exits from the rolls would be needed to offset existing  operational costs.
In our May report, we recommended that SSA prioritize and  carry through with a study of participating ticket holders’ exits  from the rolls and the agency noted it has plans to study the  effects of the 2008 changes on the Ticket program. However,  prioritizing and carrying through with their plans will be  important going forward to determine the extent to which ticket  holders actually exit the rolls due to long-term employment.  Without it, an accurate and complete assessment of the Ticket  program’s effectiveness cannot be made.
Although an increasing number of ENs are participating in the  Ticket program since the 2008 changes in regulations, many  ENs are not actively participating and SSA ticket payments have  remained concentrated with only 20 ENs. The number of ENs  contracted by SSA increased from 1,514 in fiscal year 2007 to  1,603 as of July 2010. During this time, ENs accepting at least  one ticket also increased from 752 to 1,086. The majority of EN  representatives we interviewed said the regulatory changes  provided greater incentive for participation because ENs can  now receive payments for ticket holders with earnings earlier  than before as well as for ticket holders with part-time earnings.
ENs receiving ticket payments from SSA more than doubled,  from 206 in fiscal year 2007 to 460 as of July 2010. Total  payments to ENs grew substantially, from $3.8 million in fiscal  year 2007 to $13 million as of July 2010. Yet 20 ENs, or less  than 2 percent of the total number accepting tickets in fiscal  year 2009, have received more than 70 percent of SSA’s ticket  payments in recent years. Reasons why EN participation is not  broader may be partly attributable to costs. Even though SSA  officials said the 2008 regulatory changes were intended to  address the costs associated with providing initial services,  several EN representatives told us that financing the upfront  costs of providing services can be challenging, and some said  providing resource-intensive services, such as career and  personal counseling, could limit profitability.
section_title: Employment Networks Vary in Service Approaches, but Increasingly Focus on the Employed or Ready to Work
paragraphs: Those ENs receiving some of the largest payment amounts from  SSA provide a range of services, including assistance with job  search and retention. But since the 2008 changes in regulations,  an increasing number of ENs used service approaches targeting  ticket holders who are already working or do not need  assistance in obtaining employment. For example, since the  2008 regulatory changes, which explicitly allowed ENs to pay  ticket holders, an increasing number of ENs shared SSA ticket  payments with ticket holders who have sufficient earnings to  qualify the EN for payment. This “shared payment” approach  allows the EN to readily claim ticket payments while providing  no direct services because the ticket holder is already working  or able to find a job without assistance. This service approach  accounted for an increasing proportion of total ticket payments  made by SSA. In fiscal year 2007, 1 of the 20 ENs among  those with the largest payment amounts used this approach and  received about $787,000 in SSA payments, or one-fifth of all  payments to ENs. In fiscal year 2009, 3 of the 20 ENs among  those with the largest payment amounts used this approach and  received over $4 million, or nearly one-third of all payments to  ENs. Two of these ENs simply pass back 75 percent of SSA’s  ticket payment to ticket holders and retain 25 percent for  themselves; and the third offers ticket holders $500 every 3  months.
Some disability rights advocates and EN representatives said  that since program rules do not allow ticket holders to serve as  their own ENs, this approach allows them to receive a Ticket  program payment for their efforts to find a job on their own.  Some EN representatives also said the payment may help a  ticket holder meet needed work-related expenses such as  transportation, clothing, and child care, increasing the likelihood  he or she will keep a job. However, some disability rights  advocates and EN representatives said this approach only works  for ticket holders who can find employment on their own, and  raises questions about the value these ENs add to the program.  For example, one disability rights advocate said that it would be  preferable for SSA to give the ticket holder the entire payment  directly, rather than paying an EN a portion of the ticket  payment to serve as a middleman. Additionally, the  representatives told us ticket holders may need support after  finding employment, such as counseling or help with a  disability-related relapse, but choose an EN using the shared- payment approach because they are enticed by the financial  incentive and do not anticipate future difficulties. Further,  according to one EN representative, because these ENs do not  provide a vocational assessment of strengths, weaknesses, and  aptitude, ticket holders may end up in a job that is a poor fit,  affecting their ability to retain it and, ultimately, reduce  dependency on benefits.
Long-term outcomes of ticket holders receiving shared  payments compared to those receiving support services is  unknown, because SSA does not assess the relative outcomes of  ticket holders based on services received. A senior SSA official  said that the program must balance the demands it places on  ENs to provide services with incentives for them to participate,  and that Congress’ intent was to provide ticket holders with a  choice of services. However, the official acknowledged some  concerns about the shared payment approach because the  program was not intended to provide a wage subsidy nor assist  those who can find employment on their own, but to provide  tangible employment-related services to those who can benefit  most. After reviewing the draft of our May report, the agency  posted new requirements that ENs provide a minimum level of  services and periodically assess ticket holders’ need for  additional services.
SSA also does not compile data on the shared payment  approach or any other service provision trends to inform its  management and oversight of the program, or to tailor its  guidance to ENs. For example, although SSA compiles  information on certain types of service providers, such as  mental health providers, as part of its efforts to recruit specific  providers, it does not obtain comprehensive information on  services provided by all ENs. Moreover, while service providers  applying to become ENs must indicate which services they  intend to provide in a checklist on the application form, and  approved ENs must update this information on their annual  periodic outcome report to SSA, the checklist does not include  shared payments. In our May report we recommended that SSA  adopt a strategy for compiling and using data on trends in EN  service provision to determine whether service approaches, such  as sharing SSA ticket payments with ticket holders, are  consistent with program goals of helping ticket holders find and  retain employment and reduce dependency on benefits. SSA  agreed with our recommendation and officials said they will take  steps to identify EN service approaches and assess their  consistency with program goals.
section_title: SSA Lacks Adequate Management Tools for Evaluating Employment Networks and Ticket Holders to Ensure Program Integrity and Effectiveness
paragraphs: SSA has not developed EN performance measures to assess  their success in helping assigned ticket holders obtain and retain  employment and reduce dependence on disability benefits.  Without performance measures, SSA is unable to systematically  evaluate EN performance, and ultimately determine whether  ENs should be allowed to remain in the program. The Ticket law  directs SSA to develop performance measures for quality  assurance in the provision of services by ENs, and gives SSA the  authority to terminate EN contracts for inadequate  performance. Internal control standards for the federal  government also stress the use of performance measures for  proper stewardship of and accountability for government  resources, and for achieving effective and efficient program  results.
Lack of performance measures may send the wrong message to  ENs, whose staff may be unclear about program goals and send  mixed messages to ticket holders about expected outcomes. Of  the 25 ENs we interviewed, representatives of 15 said SSA had  not adequately articulated performance expectations for serving  ticket holders. SSA’s EN handbook does state the ultimate goal  of the program is to reduce dependence and, whenever  possible, eliminate reliance on benefits. Yet, an EN, which had  the fourth-largest payment amount from SSA in fiscal year  2009, stated in its last three annual periodic outcome reports  that 100 percent of its ticket holders placed in jobs had earnings  of less than $10,000 per year—equating to less than the SGA  level, if earnings were accrued regularly over the course of 12  months. In fact, this EN’s recorded phone message states that  DI ticket holders can work part time indefinitely without  reducing SSA benefits, and its Web site says most of its  positions are designed so ticket holders stay below income  thresholds for benefit cutoff. With assistance from our  investigative staff, we found multiple ENs among those with the  largest payment amounts communicating through their Web  sites, recorded phone messages, or in our discussions with  representatives that as long as DI ticket holders’ earnings stay  below the SGA level, they can keep full disability benefits (see  Fig. 1 for excerpts of calls our investigative staff made to ENs  posing as the brother of a ticket holder to learn about the Ticket  program and the services provided by the ENs). While full-time  employment may be unattainable for certain ticket holders and  one key program official told us that part-time employment is  acceptable under the 2008 regulations, the official said it should  be a starting point, not an end goal. Nonetheless, our review  indicates some ticket holders are being coached by ENs,  including some of those with the largest payment amounts, to  work only part time so as not to jeopardize their benefits.
Near the conclusion of our audit work, SSA officials told us that  they were considering future updates to address EN  performance expectations. We recommended that SSA move  forward to develop EN performance measures consistent with  the requirements of the Ticket law. SSA agreed with this  recommendation and published performance measures that  SSA intends to enforce when data are available in early 2012.
SSA also has not consistently monitored or enforced the timely  progress of ticket holders who assign their tickets to ENs and  VRs in order to assess whether they should continue to be  exempt from medical CDRs—a key tool for assessing continuing  eligibility for benefits. While timely progress by ticket holders is  a regulatory requirement, in 2005, SSA instituted a  moratorium on enforcing this requirement and essentially  suspended the reviews of timely progress for several years.  However, SSA has acknowledged in the preamble to its program  regulations and in a 2005 internal memo the importance of  reviewing timely progress to ensure ticket holders who have  medically improved and no longer meet SSA’s disability  requirements do not receive benefits and its disability programs  do not incur unwarranted costs. Further, without reviews of  timely progress, representatives of some ENs we interviewed  said some ticket holders “park” their tickets to get the CDR  exemption, for example, by assigning their ticket with no  interest in obtaining EN services or reducing their dependence  on benefits. Resuming timely progress reviews, they said, would  be a positive motivator for ticket holders to engage in EN  services essential to obtaining and retaining employment and,  ultimately, reducing dependence on benefits.
During the course of our review, in November 2010,  representatives of the Ticket program manager (a private  company contracted to conduct much of the day-to-day  operations, including timely progress reviews) reported they  began limited resumption of timely progress reviews, mailing  out requests for information on timely progress (the first step in  the review process) to roughly 4,900 of the 19,000 ticket  holders, or about 26 percent, due for review in November 2010.  Given that at the time of our review SSA estimated between  13,000 to 22,000 ticket holders will be due for timely progress  reviews each month during the first year of resumption, there is  potential for a significant backlog in such reviews. Further, SSA  and program manager representatives told us they will rely on  ticket holder and EN self-reported information to assess  progress and determine who will continue to receive a CDR  exemption, and that they do not intend to independently verify  this information against employment records or education  documentation. In our past work, we have found that reliance  on self-reported information alone can lead to overpayments of  SSA benefits.
Accordingly, we recommended that SSA develop a strategy to  both ensure that progress reviews of ticket holders are  completed promptly and ensure the accuracy of information  received. Since our report was issued, SSA has reported they  are reducing the backlog of reviews. In addition, SSA has stated  that the agency will review a random sample of beneficiaries’  cases to check the accuracy and reliability of information  compiled when making timely progress review decisions. We  welcome such reviews, but continue to be concerned that SSA  may not have reliable information on the front end to make  timely progress determinations. Given that these reviews are  intended as a key integrity tool—to ensure exemptions from  CDRs for beneficiaries are appropriate—we continue to believe  that SSA needs a more strategic approach to ensure promptness  and accuracy.
Chairmen, Ranking Members, and Members of the  Subcommittees, this concludes my prepared statement. I would  be happy to answer any questions that you may have at this  time.
section_title: Acknowledgements
paragraphs: For further information regarding this testimony, please contact  Daniel Bertoni at (202) 512-7215 or bertonid@gao.gov. In  addition, contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of  this statement. Individuals who made key contributions to this  testimony are Jeremy Cox, Cady Panetta, and Kristen Jones.  Other staff who contributed includes Susan Aschoff, James  Bennett, Paul Desaulniers, Luann Moy, Margeaux Randolph,  Wesley Sholtes, Vanessa Taylor, and Craig Winslow.
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