Social Security Disability: Improvements Needed to Continuing Disability Review Process
Published: 1996-10-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO provided information on how to improve the Social Security Administration's (SSA) continuing disability reviews (CDR) process for Disability Insurance (DI) and Supplemental Security Income (SSI) beneficiaries, focusing on: (1) the number and characteristics of individuals who are due for CDR; (2) how SSA selects individuals for and conducts CDR; (3) whether available resources are adequate for conducting required CDR; and (4) potential options for improving the CDR process.
section_title: What GAO Found
paragraphs: GAO found that: (1) about 4.3 million DI and SSI beneficiaries are due or overdue for CDR in fiscal year 1996; (2) SSA selects beneficiaries for CDR on the basis of the likelihood that their benefits will be terminated; (3) SSA plans to improve its CDR selection process by obtaining Medicare and Medicaid data and mailing questionnaires to beneficiaries' physicians; (4) funding for CDR could exceed $4 billion by 2002; (5) SSA must incorporate additional CDR required by legislation into the agency's workload and conduct CDR for beneficiaries whose CDR were previously done at the agency's discretion; (6) SSA should conduct CDR on a random sample of beneficiaries normally excluded from the selection process to improve program integrity; (7) SSA proposal for time-limited benefits may increase the agency's workload when beneficiaries who are terminated from the program reapply for benefits; (8) the formula used by SSA to select beneficiaries for CDR excludes approximately half of those who are due or overdue for CDR; and (9) SSA could utilize CDR to strengthen its return-to-work initiatives.

section_title: Letter
paragraphs: In recent years, the Social Security Administration (SSA) has had difficulty ensuring that people receiving disability benefits under the Disability Insurance (DI) program are eligible for benefits. SSA is required by law to conduct periodic examinations, called continuing disability reviews (CDR), to determine whether a beneficiary has medically improved to the extent that the person is no longer considered disabled. SSA is also authorized to conduct CDRs on individuals receiving disability benefits under the Supplemental Security Income (SSI) program, and recent legislation requires CDRs for some who receive SSI benefits. Together, the programs pay about $60 billion annually to 9 million disabled beneficiaries; an additional 1.6 million nondisabled dependents of DI beneficiaries also receive benefits.
Programs of this magnitude require sound management to ensure that funds are being spent as the Congress intended and to achieve the most effective use of resources. Such management includes (1) monitoring the disability status of all beneficiaries to help ensure program integrity and (2) helping as many beneficiaries as possible to become self-sufficient by determining their vocational rehabilitation (VR) service needs and providing them assistance to enter or reenter the workforce. The amounts in cash and medical benefits that beneficiaries can receive by age 65 average about $113,000 for SSI beneficiaries and about $225,000 for DI beneficiaries.
Concerned about SSA’s ability to conduct all the CDRs required by law, you asked us to provide information on how to improve the CDR process. We were also asked by the Chairman, Subcommittee on Social Security, House Committee on Ways and Means, to provide information about the backlog of cases due for CDRs under the DI program. As agreed with your office, we are providing the same information to you and the Chairman, Subcommittee on Social Security, in separate reports. Both reports also include information about cases scheduled for CDRs under the SSI program. Specifically, we are providing information on (1) the number and characteristics of individuals who are due for CDRs, (2) how SSA selects individuals for and conducts CDRs, (3) whether available resources are adequate for conducting required CDRs, and (4) what potential options exist for improving the CDR process. In addition, in a forthcoming report on SSA’s review of SSI recipients’ disability status, we discuss SSA’s strategy for meeting new legislative requirements for CDRs under the SSI program.
To develop this information, we interviewed SSA and state disability determination services officials and members of the National Academy of Social Insurance (NASI) disability policy panel. We analyzed extracts from the SSA Master Beneficiary Record (MBR) and Supplemental Security Income Record Description (SSIRD) databases and electronic files provided by the Office of Disability, which contained information on beneficiaries who were due or overdue for a CDR in fiscal year 1996. We also reviewed applicable laws and regulations and relevant SSA documents, including procedures, guidance, work plans, budgets, and CDR costs. We reviewed reports and papers by others, including the NASI disability policy panel and its members. Furthermore, we reviewed the process SSA uses in determining which beneficiaries should receive a CDR and the composition of the formulas that process uses to estimate the likelihood of benefit termination for beneficiaries. We also analyzed the electronic databases as provided to us by SSA officials but did not evaluate the validity of the databases or the SSA formulas used to estimate the likelihood of benefit termination. Our scope and methodology are discussed further in appendix I.
subsections: section_title: Background
paragraphs: The DI and SSI programs are the two largest federal programs providing assistance to people with disabilities. DI is the nation’s primary source of income replacement for workers with disabilities who have paid Social Security taxes and are entitled to benefits. The DI program also pays benefits to disabled dependents of disabled, retired, or deceased workers—disabled adult children and disabled widows and widowers. SSI provides assistance to disabled people who have a limited or no work history and whose income and resources are below specified amounts.State disability determination service (DDS) agencies, which are funded by SSA, decide whether individuals applying for DI or SSI benefits are disabled.
Federal laws specify those who must receive CDRs. The 1980 amendments to the Social Security Act require that SSA review at least every 3 years the status of DI beneficiaries whose disabilities are not permanent to determine their continuing eligibility for benefits. The law does not specify the frequency of the required reviews for beneficiaries with permanent disabilities. The Social Security Independence and Program Improvements Act of 1994 requires that SSA conduct CDRs on one-third of the SSI beneficiaries who reach age 18 and a minimum of 100,000 additional SSI beneficiaries annually in fiscal years 1996 through 1998. The 1996 amendments to the Social Security Act require that SSA conduct CDRs (1) at least every 3 years for children under age 18 who are likely to improve or, at the option of the Commissioner, who are unlikely to improve and (2) on low-birth-weight babies within their first year of life. The 1996 legislation also requires disability eligibility redeterminations, instead of CDRs, for all 18-year-olds beginning on their 18th birthdays, using adult criteria for disability.
State DDS agencies set the frequency of CDRs for each beneficiary according to his or her outlook for medical improvement, which is determined on the basis of impairment and age. Beneficiaries expected to improve medically, classified as “medical improvement expected” (MIE), are scheduled for review at 6- to 18-month intervals; beneficiaries classified as medical improvement possible (MIP) are scheduled for review at least once every 3 years; and those classified as medical improvement not expected (MINE) are scheduled for review once every 5 to 7 years.
For almost a decade, because of budget and staffing reductions and competing priorities, SSA has been unable to conduct all the DI CDRs required by the Social Security Act. Moreover, the agency has conducted relatively few elective SSI CDRs. (See tables III.1 and III.2 for numbers of previous CDRs conducted and CDR funding.) In 1996, the Congress authorized about $3 billion for CDRs for fiscal years 1996 through 2002. In addition, SSA plans to earmark over $1 billion in its administrative budget for CDRs during that same time period.
section_title: DI and SSI Beneficiaries Due for CDRs Have Similar Characteristics
paragraphs: The DI and SSI programs have about 4.3 million beneficiaries due or overdue for a CDR in fiscal year 1996. About 2.5 million of these reviews are required by law, including about 2.4 million DI CDRs and 118,000 SSI CDRs. SSA is authorized, but not required by law, to conduct the remaining CDRs.
As shown in table 1, about half of all beneficiaries are awaiting CDRs, the largest category of which is disabled workers receiving DI benefits.
SSA calculated a smaller number of CDRs due or overdue of about 1.4 million DI beneficiaries and 1.6 million SSI beneficiaries. It excluded from its calculation DI worker beneficiaries aged 59 and older, disabled widows and widowers and disabled adult children of DI worker beneficiaries, and SSI beneficiaries aged 59 and older. SSA officials acknowledged that CDRs are required for all of the DI beneficiaries it has excluded, but stated that, because of the backlog, the agency is focusing its attention on the portions of the CDR population that it estimates are more cost-effective to review.
In general, DI worker beneficiaries and adult SSI beneficiaries in the backlog have similar characteristics, and SSA estimates a low likelihood of benefit termination as a result of medical improvement. On average, workers receiving DI and adult SSI beneficiaries have been receiving benefits for over 9 years and their predominant disability is mental disorders. While both are middle-aged, the average SSI adult beneficiary is about 9 years younger than the average DI worker beneficiary. In addition, the average estimated likelihood of benefit termination for DI and SSI MIE and MIP beneficiaries under age 60 is less than 5 percent. More data on DI and SSI characteristics are provided in tables IV.1 through IV.12.
section_title: SSA Only Conducts CDRs on Beneficiaries It Considers Cost-Effective to Review
paragraphs: SSA uses two types of CDRs, a full medical CDR and a mailer CDR, to review beneficiaries’ status. The full medical CDR process is labor-intensive and generally involves (1) one of 1,300 SSA field offices to determine whether the beneficiary is engaged in any substantial gainful activity (SGA) and (2) one of 54 state DDS agencies to determine whether the beneficiary continues to be disabled, a step that frequently involves examination of the beneficiary by at least one medical doctor. Beginning in 1993, questionnaires—called mailer CDRs—replaced full medical CDRs for some beneficiaries to increase the cost-effectiveness of the CDR process.
SSA also developed statistical formulas for estimating the likelihood of medical improvement and subsequent benefit termination based on computerized beneficiary information such as age, impairment, length of time on the disability rolls, and date of last CDR. For beneficiaries for whom application of the formulas indicates a relatively low likelihood of benefit termination, SSA uses a mailer CDR; when the formula application indicates a relatively high likelihood of benefit termination, SSA uses a full medical CDR. For those who receive mailer CDRs, SSA takes an additional step to determine whether responses to a mailer CDR, when combined with data used in the formulas, indicate that medical improvement may have occurred; in this small number of cases, the beneficiary is also given a full medical CDR. Individuals who have responded to a mailer CDR and are found to be still disabled are not referred for full medical CDRs, and SSA sets a future CDR date. Currently, SSA estimates that the average cost of a full medical CDR is about $1,000, while the average cost of a mailer CDR is between about $25 and $50. (See app. II for more details on the steps in the CDR process.)
subsections: section_title: SSA Primarily Selects Beneficiaries for CDRs on the Basis of the Likelihood Their Benefits Will Be Terminated
paragraphs: SSA does not include in its selection process all DI and SSI beneficiaries. SSA limits its selection process to those beneficiary categories it considers cost-effective to review on the basis of their potential for medical improvement. Approximately one-half of the DI and SSI beneficiaries currently due for CDRs are included in SSA’s process for estimating the likelihood of benefit termination through the use of statistical formulas; these estimates are the basis of selection for CDRs. Adult beneficiaries that SSA includes in its selection process are DI worker and SSI beneficiaries under age 59 who have been classified as MIEs or MIPs. SSA currently excludes MINE beneficiaries, beneficiaries aged 59 and older, and disabled adult children and disabled widows and widowers of DI worker beneficiaries from its estimation process because it considers these categories not cost-effective to review. While SSA considers some SSI child beneficiaries cost-effective to review, children are currently selected for CDRs without the use of formulas to estimate the likelihood of benefit termination. (See fig. 1 and table III.4.)
The development and use of formulas reflect SSA’s effort to make the CDR process more cost-effective by using the estimates to identify beneficiaries who should receive a mailer CDR and those who should receive a full medical CDR. However, SSA acknowledges that the formulas are not useful for estimating the likelihood of benefit termination for most beneficiaries in this process. The formulas are primarily useful for identifying beneficiaries who SSA estimates are most or least likely to have their benefits terminated from a CDR. For individuals who fall in the middle category—which constitutes the majority of beneficiaries included in the estimation process—the formulas provide less accurate estimates, according to SSA. At this time, SSA does not select for CDRs any beneficiaries from this middle group because it is unable to determine whether a mailer or a full medical CDR is most appropriate for these beneficiaries. According to SSA, if it conducted mailer CDRs on the middle group, this would likely result in more beneficiaries being subsequently referred for full medical CDRs than the agency can accommodate in its budget. Similarly, if it conducted full medical CDRs on the middle group, it would be using a higher-cost process than SSA believes is necessary for some in this group. (See fig. 2 and table III.5.) Consequently, SSA selects a portion of the beneficiaries with the highest and lowest estimated likelihood of benefit termination for full medical and mailer CDRs, respectively.
SSA has not developed statistical formulas to use in selecting SSI child and 18-year-old beneficiaries for CDRs. According to SSA, it selected low-birth-weight babies for CDRs of children for fiscal year 1996 because historically about 40 percent of this category have benefits terminated as a result of a CDR. Selecting low-birth-weight babies for CDRs is also consistent with CDR requirements that take effect in fiscal year 1997.
For 18-year-old SSI beneficiaries in fiscal year 1996, SSA selected a judgmental sample classified as either MIE or MIP who had characteristics associated with a high likelihood of benefit termination. For fiscal year 1996, all reviews of child and 18-year-old SSI beneficiaries are to be full medical CDRs.
section_title: SSA Plans to Include More Beneficiary Categories and Make Other Selection Process Improvements to Better Identify the Nondisabled
paragraphs: Recognizing the need to improve the current process, SSA plans to expand and enhance its procedures for selecting beneficiaries for CDRs and conducting the reviews. Furthermore, SSA told us that these planned process improvements will limit the extent to which SSA can conduct the planned number of CDRs and reduce the CDR backlog.
SSA plans to include more beneficiary categories in its selection process by expanding the use of the statistical formulas for certain MINE-classified beneficiaries and children and enhancing the formulas. Beginning in fiscal year 1997, according to SSA, formulas will be used for those beneficiaries who are classified as MINEs because they are older rather than because of their impairment. SSA also plans to develop formulas to use for children receiving SSI beginning in about fiscal year 1998. According to SSA, postponing the development of formulas for SSI child beneficiaries will allow the agency to integrate this process improvement with the knowledge it will gain about impairments that afflict children as a result of the new requirement to conduct CDRs for children in the SSI program beginning in fiscal year 1997.
SSA also plans to pursue two approaches for the collection of medical treatment information about beneficiaries. First, SSA plans to obtain Medicare and Medicaid data and integrate the data into the statistical formulas to increase the validity of the estimated likelihood of benefit termination. SSA expects that the additional information will allow it to better determine the appropriateness of either mailer or full medical CDR for beneficiaries with estimates of benefit termination in the middle range. Second, SSA plans to develop a new type of CDR that would be conducted by mail to obtain current information about a beneficiary’s disability and treatment. Unlike the current mailer CDR, the new type of CDR would collect information directly from beneficiaries’ physicians and other medical treating sources. This information will be combined with computerized beneficiary data to help identify the beneficiaries in the middle range who are most likely to be no longer disabled and therefore warrant full medical CDRs.
section_title: Incorporating Additional Required CDRs Into Its Plan and Implementing Process Improvements Are Among the Challenges SSA Must Address
paragraphs: In the past year, new legislation has increased authorized funding for CDRs to about $3 billion by 2002, but has also required CDRs for some SSI beneficiaries for whom the reviews were previously elective. Because SSA has not finished incorporating the new CDR requirements into its plans, it is too early to determine whether the authorized funding will be adequate for all required CDRs. However, exclusions from the estimates SSA used regarding the size of the backlog in fiscal year 1996, SSA’s need to complete process improvements in order to conduct a greater number of CDRs, and other challenges all contribute to the uncertainty that SSA will be able to be current with required CDRs within 7 years.
subsections: section_title: CDR Funding Authorized in Two Laws and Earmarked in SSA Budget
paragraphs: Funding for CDRs from all sources could exceed $4 billion by 2002. The bulk of the funding for CDRs is authorized by the Contract With America Advancement Act of 1996, which authorized about $2.7 billion between 1996 and 2002. While the funding is primarily for DI CDRs, a portion can be used for SSI CDRs. Most recently, the 1996 amendments to the Social Security Act authorized a total of about $250 million for SSI CDRs and medical eligibility redeterminations in fiscal years 1997 and 1998. For the first time in 1996, SSA designated $200 million of its administrative budget to be used solely to conduct CDRs. By comparison, SSA spent almost $69 million to conduct CDRs in fiscal year 1995. SSA expects to continue to earmark moneys in future budgets at the same level as fiscal year 1996. (See table III.2 for SSA’s CDR spending in past years.)
section_title: SSA’s Plan in Progress, Contains Weaknesses
paragraphs: SSA’s plan to conduct CDRs on 8,182,300 beneficiaries between 1996 and 2002 is ambitious. The plan, as of August 1, 1996, called for SSA to conduct nearly twice as many CDRs as it has conducted over the past 20 years combined. If the plan is fully implemented, SSA will conduct the CDRs for DI worker beneficiaries under age 59, the beneficiary category the plan defines as constituting the DI backlog. In addition, it will conduct about 350,000 SSI CDRs required under the Social Security Independence and Program Improvements Act of 1994 and about 2 million additional elective SSI CDRs. (See table III.6 for the number of full medical and mailer CDRs SSA plans to conduct.) SSA’s plan reflects increased authorizations from the Contract With America Advancement Act but does not yet account for the increased authorizations or increased CDRs and related work required by the 1996 amendments to the Social Security Act.
SSA’s estimate of the size of the DI CDR backlog in fiscal year 1996 excludes about 848,000 beneficiaries, composed of disabled widows and widowers, disabled adult children, and workers aged 59 and older. SSA officials acknowledge that CDRs are required for these beneficiaries, but SSA has excluded them from the plan because it focuses on those categories SSA considers more cost-effective to review. In addition, an SSA official said that a large number of beneficiaries in the excluded categories are expected to leave the program because either they will die or convert to retirement benefits before SSA can conduct their CDRs. However, SSA has not estimated the proportion of excluded categories who may leave the program, nor does it include in its plan beneficiaries in these categories who will come due for CDRs in fiscal years 1997 through 2002.
Process improvements are critical to SSA’s ability to implement the portion of the plan that relies on the mailer CDR, a component whose use is planned to triple in fiscal year 1998. SSA’s success with the mailer CDR will rely on yet-to-be-tried improvements. Although plans to expand the formulas to more beneficiary categories and collect medical treatment information appear promising, some improvements are in the earliest stages of development with only about 1 year available for completion. Thus, SSA will need to develop these initiatives more quickly than it did previous improvements. The integration of Medicare and Medicaid data into the formulas used to estimate the likelihood of benefit termination, and the development of a new type of CDR that collects information from physicians and other medical treating sources, are expected to allow SSA to begin conducting CDRs on beneficiaries with an estimated benefit termination in the middle range. SSA said that it currently is unable to determine whether the beneficiaries with estimates in the middle range should have a full medical CDR or a mailer CDR. Without that ability, SSA cannot determine the most cost-effective type of CDR to use, and its planned expansion of the use of the mailer CDR will be in jeopardy.
SSA faces a variety of other challenges to the implementation of its plan and the elimination of the backlog of required CDRs:
First, SSA must incorporate into its workload SSI CDRs and disability eligibility redeterminations required by the 1996 amendments to the Social Security Act. These requirements include performing CDRs once every 3 years for children under 18 years old who are likely to medically improve and for all low-birth-weight babies by their first birthday. This law also requires SSA to conduct disability eligibility redeterminations on all child beneficiaries who turn 18 years old, within 1 year of their birthday, and for between 300,000 and 400,000 children who qualified for SSI under individualized functional assessments (IFA). These reviews of children would take precedence over required CDRs and may shift resources away from other CDRs. The law also changes SSI eligibility for legal aliens who have not resided in this country for 5 years before receiving benefits, necessitating CDRs of the beneficiaries to determine continuing eligibility.
Second, other recent legislation poses a competing priority. The law eliminates drug and alcohol abuse as a basis for receiving disability benefits; as a result, benefits will terminate for many of an estimated 196,000 DI and SSI beneficiaries whose primary impairments are drug abuse and/or alcoholism. SSA expects many of those terminated to reapply on the basis of other impairments, thus increasing SSA’s workload of initial claims for benefits. Previous increases in initial claims adversely affected the number of CDRs conducted as resources were shifted away from that activity to process initial applications.
Third, SSA’s plan includes doing CDRs for many of the estimated 3.7 million SSI beneficiaries whose CDRs may be conducted at SSA’s discretion. While conducting these discretionary SSI reviews may be warranted largely because relatively few SSI CDRs have been conducted in the past, it shifts resources away from conducting required DI reviews.
Fourth, the daunting effort to gear up for the unprecedented CDR workload will include negotiations between SSA and 50 state DDS agencies to increase CDR workloads and DDS efforts to hire, train, and supervise additional staff.
section_title: Alternate Approaches Focus on CDRs’ Cost-Effectiveness and Their Use in Helping Beneficiaries Move Off Disability
paragraphs: In the Contract With America Advancement Act, the Congress emphasized maximizing the combined savings from CDRs under the DI and SSI programs. SSA has been working to improve its ability to identify beneficiaries for whom conducting CDRs would be most cost-effective. Other alternatives exist, however, that would likely make CDRs more cost-effective and improve program integrity.
subsections: section_title: Revising Requirements Could Improve CDRs’ Cost-Effectiveness
paragraphs: The current system of periodic CDRs for all beneficiaries, including those with virtually no potential for medical improvement, is a costly approach for identifying the approximately 5 percent of beneficiaries who medically improve to the point of being found ineligible for benefits. Furthermore, the frequency of CDRs is currently based on medical improvement classifications that do not clearly differentiate between those most and least likely to have their benefits terminated as a result of a CDR. Our analysis found that the estimated likelihood of benefit termination, as determined by SSA’s formulas, was very similar for beneficiaries classified as MIEs and MIPs. Although millions of dollars are spent annually to conduct periodic CDRs, some beneficiaries, especially those in the DI program, have received benefits for years without having any contact with SSA regarding their disability or their ability to return to work despite continuing disability. An alternate approach could build on SSA’s efforts to identify those beneficiaries whose CDRs are likely to be cost-effective and also increase contact with beneficiaries who remain in the program. Such an approach involves requiring (1) CDRs of beneficiaries with the greatest potential for medical improvement, (2) CDRs of a random sample from all other beneficiaries, and (3) regular contact with the remainder of the beneficiaries to increase program integrity.
Less rigid requirements regarding the frequency of CDRs are necessary if reviews are to be conducted primarily on those beneficiaries whose cases are cost-effective to review—that is, those beneficiaries with the greatest potential for medical improvement—and for SSA to still be in compliance with laws governing CDRs. According to SSA, one of the best indicators of whether beneficiaries will remain on disability rolls is whether they have previously undergone a CDR. If an initial CDR finds that the beneficiary continues to be medically eligible for disability benefits, subsequent CDRs may not be cost-effective or appropriate. Because few CDRs actually result in benefit terminations, periodic reviews, even at the maximum 3- and 7-year intervals currently used, may not be appropriate for certain beneficiaries if further reviews are not warranted after the initial CDR and at least several years on the disability rolls.
Conducting CDRs on a random sample of beneficiaries from among those whose cases are believed by SSA to be less cost-effective to review is consistent with a more cost-effective and flexible approach to scheduling CDRs. It also addresses a weakness in SSA’s current process by ensuring overall program integrity. SSA’s current process excludes some categories of beneficiaries from portions of the selection process. As a result, about one-half of all beneficiaries due for a CDR will go without oversight unless SSA changes its selection process. If periodic CDRs are not conducted for all beneficiaries, it is increasingly important to develop a strategy to ensure overall program integrity.
Contact with beneficiaries, in addition to the contact that occurs in the CDR process, can improve program integrity by reminding beneficiaries that their medical conditions are being monitored and serving as a deterrent to abuse by those no longer medically eligible for benefits. It could also support SSA’s process improvement efforts, particularly within the next year. We believe that a new type of brief mailed contact would, at a minimum, in the year it is implemented, allow SSA to contact a majority of beneficiaries with overdue CDRs to remind them of their responsibility to report medical improvements and to inquire about their interest in returning to work. By collecting CDR-related information as part of this new contact, it could also speed the development of SSA’s planned improvements to the CDR process. For example, SSA could gather information on physicians and other treating sources seen by beneficiaries since their last CDR. Such information is needed to implement SSA’s new medical treating source CDR.
SSA has not evaluated this three-pronged proposal for improving the CDR process, but in our discussions with agency officials, some provided comments on one aspect of it. In discussing additional, more frequent contact with beneficiaries in addition to that which occurs during a CDR, several officials raised the issue of the cost of such an initiative. Although some administrative funds would be used for this contact, it should result in significant savings because a considerable number of beneficiaries, on the basis of SSA’s experience, can be expected to refuse repeatedly to provide requested information and, as a result, will have their benefits terminated after a prescribed due-process procedure is followed.According to SSA, those who fail to cooperate generally do so because they believe that they are no longer eligible for benefits. On the basis of SSA’s experience with CDRs and financial eligibility redeterminations, we assumed that .71 percent of the DI beneficiaries and 1 percent of the SSI beneficiaries who were contacted would have their benefits terminated for noncooperation after all due-process procedures were followed. These termination rates represent an estimated one-time net federal savings of over $1.4 billion from contacting beneficiaries in the CDR backlog, with DI savings accounting for about $1.2 billion and SSI savings accounting for about $230 million. If extended to all beneficiaries not receiving CDRs or financial eligibility redeterminations, the costs and subsequent savings from such a contact would likely be higher. See appendix I for a further discussion of our estimated savings.
section_title: Establishing Data-Based Criteria for Time-Limited Benefits May Be Difficult
paragraphs: Time-limiting disability benefits has been proposed as a way to reduce beneficiaries’ dependence on cash benefits by removing them from the rolls after set periods of time. Time limits are intended to encourage beneficiaries to obtain treatment and pursue rehabilitation to overcome their disabling conditions and obtain productive employment. Proposals for time-limited benefits generally establish criteria for deciding which categories of beneficiaries would be subject to time limits and no longer subject to required CDRs. Some believe that such broad application of time limits could significantly reduce the number of people who would continue on the rolls indefinitely and eliminate the CDR backlog. However, others believe that it could create a large backlog of disability claims when those who are terminated because of the time limit reapply for benefits. Time limits are also thought to increase the number of people on the rolls because SSA and DDS staff may, in certain cases, be more likely to award benefits because of the limited payment period. Instead of subjecting all beneficiaries with nonpermanent impairments to time limits, some believe that time limits should be applied to certain subsets or categories of beneficiaries—those with impairments that are likely to improve with treatment or surgery. Such impairments include affective disorders, tuberculosis, certain fractures, and orthopedic impairments for which surgery can restore or improve function.
However, our analysis of the characteristics of those in the CDR backlog suggests that implementing time-limited benefits on the basis of either medical improvement classifications or specific impairments is not currently feasible. As explained earlier, on the basis of our analysis of available CDR population characteristics, there is little correlation between the MIE and MIP classifications and the estimated likelihood of benefit termination. Moreover, our analysis did not associate any specific impairment or other characteristic with a greater likelihood of benefit termination. Furthermore, SSA and the NASI disability policy panel concluded that the MIE, MIP, and MINE classifications do not accurately reflect the likelihood of medical improvement and subsequent benefit termination.
section_title: SSA Could Better Utilize the CDR Process to Encourage Return to Work
paragraphs: The CDR process has the potential to be used to further SSA’s return-to-work initiatives, strengthening that effort and offering greater opportunity for beneficiaries to become self-sufficient despite their continuing disabilities. While the Social Security Act states that as many individuals as possible applying for benefits under the DI program should be rehabilitated into productive activity, only about 8 percent of DI and SSI beneficiaries are referred for vocational rehabilitation (VR) services. SSA generally does little during the CDR process to determine beneficiaries’ VR needs and provide assistance to help beneficiaries become self-sufficient. Although in conducting full medical CDRs SSA obtains information from the beneficiary on VR services received since the initial application or last CDR, SSA and DDS staff are neither required nor instructed to assess beneficiaries’ work potential, make beneficiaries aware of rehabilitation opportunities, or encourage them to seek VR services. When conducting mailer CDRs, SSA provides beneficiaries the opportunity to indicate an interest in VR services.
In our April 1996 report, we noted that medical advances and new technologies are creating more opportunities than ever for disabled people to work, and some beneficiaries who do not medically improve may nonetheless be able to engage in substantial gainful activity. Yet, weaknesses in the design and implementation of DI and SSI program components have limited SSA’s capacity to identify and assist in expanding beneficiaries’ productive capacities. Beneficiaries receive little encouragement to use rehabilitation services. We recommended in that report that the Commissioner of Social Security take immediate action to place greater priority on return to work, including designing a more effective means to identify and expand beneficiaries’ work capacities and better implementing existing return-to-work mechanisms.
section_title: Conclusions
paragraphs: Our analysis of the characteristics of beneficiaries awaiting DI and SSI CDRs supports SSA’s conclusion that there is little likelihood a large proportion of beneficiaries will show sufficient medical improvement to no longer be disabled. Therefore, if SSA is to decrease long-term reliance on these programs as the primary source of income for the severely impaired, it will need to shift its emphasis. It must rely less on assessing medical improvement and more on return-to-work programs to better gauge the potential for self-sufficiency despite the lack of medical improvement.
SSA’s plan to conduct repeated CDRs at regularly scheduled intervals may not be warranted for some beneficiaries, given the large number of beneficiaries with little likelihood of benefit termination and the emphasis on cost-effectiveness in the Contract With America Advancement Act. A more cost-effective approach might incorporate (1) a focus on conducting CDRs for beneficiaries with the greatest likelihood of benefit termination due to medical improvement, (2) conducting CDRs on a random sample of all other beneficiaries to correct a weakness in SSA’s process, and (3) contact with beneficiaries not selected for a CDR or a financial eligibility redetermination to strengthen program integrity.
However, for this cost-effective approach to work, SSA needs to be able to accurately estimate the likelihood of benefit termination for all beneficiaries. Currently, our analysis shows that about one-half of all beneficiaries due or overdue for a CDR have been excluded from SSA’s process that utilizes formulas to estimate the likelihood of benefit termination. Furthermore, for many beneficiaries, the formulas result in less accurate estimates. If SSA is to be current with CDRs by 2002, it will need to meet many challenges, including expanding the use of its mailer CDR. Because such an expansion is dependent upon SSA’s ability to implement at least two of its planned process improvements, this raises further questions about SSA’s ability to implement its plan.
section_title: Recommendations to the Commissioner of Social Security
paragraphs: We recommend that, to the extent SSA is authorized to act, the Commissioner of SSA replace the routine scheduling for CDRs of all who receive DI and SSI program benefits with a more cost-effective process that would (1) select for review beneficiaries with the greatest potential for medical improvement and subsequent benefit termination, (2) correct a weakness in SSA’s CDR process by conducting CDRs on a random sample from all other beneficiaries, and (3) help ensure program integrity by instituting contact with beneficiaries not selected for CDRs. As part of this effort, the Commissioner should develop a legislative package to obtain the authority the agency needs to enact the new process for those portions of the DI and SSI populations that are subject to required CDRs.
To enable as many disabled individuals as possible to become self-sufficient, SSA should test the use of CDR contacts with beneficiaries to determine individuals’ rehabilitation service needs and help them obtain the services and employment assistance they need to enter or reenter the workforce.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, SSA agreed to test the use of CDR contacts with beneficiaries to determine individuals’ rehabilitation service needs and help them obtain the services and employment assistance they need to enter or reenter the workforce. SSA also agreed to begin to consider changing the current statutory requirements for CDRs as part of its effort to continually seek ways to maintain stewardship of the disability program in the most cost-effective manner. However, it disagreed with our recommendation on specific changes it should make to the CDR process. In particular, it disagreed with conducting CDRs on random samples of beneficiaries who are less cost-effective to review and with making more frequent contact with all beneficiaries. We continue to believe that ensuring program integrity requires that all beneficiaries have an opportunity to be selected for a CDR. In addition, we believe that efforts to monitor disability status will serve as a deterrent to abuse by those no longer medically eligible for benefits, and that maintaining periodic contacts with all beneficiaries is a sound management practice. SSA also made technical comments on our report, which we incorporated as appropriate. The full text of SSA’s comments and our responses are contained in appendix V.
As arranged with your office, unless you announce its contents earlier, we plan no further distribution of the report until 7 days after the date of this letter. At that time, we will send copies to the Commissioner of Social Security. We will make copies available to others on request.
Please contact me at (202) 512-7215 if you or your staff have any questions about this report. Other GAO contacts and staff acknowledgments are listed in appendix VI.
section_title: Scope and Methodology
paragraphs: This appendix provides additional details concerning our methodology. Information is included about databases used in estimating for the DI and SSI programs the number of beneficiaries due or overdue for a CDR in fiscal year 1996 and analyzing their characteristics. We also include information on our calculations of the potential one-time savings from our proposed mailed contact to collect CDR-related information from beneficiaries. We analyzed the electronic databases as provided to us by SSA officials but did not evaluate the validity of the databases or the SSA formulas used to estimate the likelihood of benefit termination. We did our review from September 1995 to August 1996 in accordance with generally accepted government auditing standards.
subsections: section_title: Number of Beneficiaries Due or Overdue for a CDR in Fiscal Year 1996
paragraphs: To determine the number of DI worker beneficiaries currently due or overdue for a CDR, we used SSA’s Office of Disability’s (OD) CDR database and the Master Beneficiary Record (MBR). OD’s database contains information on all beneficiaries SSA has determined were due or overdue for a CDR in fiscal year 1996. We eliminated records for DI beneficiaries who were included in OD’s database but whose MBR could not be found or who did not meet the definition of being due or overdue for a CDR in fiscal year 1996. The eliminated records primarily involved cases that were not due for a CDR until the next century and were incorrectly included in the backlog population. Table I.1 contains initial and final population sizes after adjustments.
OD provided the number of disabled widows and widowers and disabled adult children in the backlog but did not supply other information about them.
To determine the number of SSI beneficiaries currently due or overdue for a CDR, we used OD’s database that contains information on all SSI beneficiaries SSA has determined were due or overdue for a CDR in fiscal year 1996. We drew a random sample of 15 percent of these beneficiaries stratified by whether the (1) beneficiary was an adult or a child and (2) state disability determination services (DDS) had classified the likelihood of medical improvement as expected (MIE), possible (MIP), or not expected (MINE). We eliminated from our sample beneficiaries whose CDR due dates were after fiscal year 1996 or who were over 65. On the basis of our sample data, we estimated the size of the population with these exclusions. Table I.2 contains initial population and sample sizes and final sizes after adjustments.
For the population of DI workers, we obtained information on characteristics from the MBR and OD’s CDR database. From the MBR, we obtained information on age, gender, race, impairment, time receiving benefits, and time overdue for a CDR. Because information obtained from OD did not differentiate between MIE and MIP beneficiaries, we used MBR data to classify beneficiaries in the two categories. From OD’s CDR database, we obtained information on (1) records for all those classified as MINE and (2) estimates of the likelihood of benefit termination for MIE and MIP beneficiaries, the only categories for which likelihood data were available. We did not analyze the characteristics of DI beneficiaries who are disabled widows and widowers and disabled adult children because we did not have sufficient information to identify them in the MBR.
For the sample of SSI beneficiaries, we obtained information on characteristics from SSA’s Supplemental Security Income Record Description (SSIRD) and OD’s CDR database. From the SSIRD, we obtained information on age, gender, race, impairment, time receiving benefits, and time overdue for a CDR. We also used SSIRD data to classify adults into MIE and MIP categories. From OD’s CDR database, we obtained information on (1) medical improvement classifications for all children and MINE adults; (2) records for all adults classified as MINE; and (3) estimates of the likelihood of benefit termination for adult MIE and MIP beneficiaries, the only categories for whom likelihood data were available.
Because we used a sample to estimate characteristics of the universe of SSI beneficiaries due or overdue for CDRs in fiscal year 1996, the reported estimates in tables IV.7 through IV.12 have sampling errors associated with them. Sampling error is variation that occurs by chance because a sample was used rather than the entire population. The size of the sampling error reflects the precision of the estimate—the smaller the sampling error, the more precise the estimate. The tables in appendix IV contain sampling errors for reported estimates calculated at the 95-percent confidence level. This means that the chances are about 95 out of 100 that the range defined by the estimate, plus or minus the sample error, contains the true percentage. With few exceptions, the sampling errors were less than 1 percentage point. This means that for most percentages, there is a 95-percent chance that the actual percentage falls within plus or minus 1 percentage point of the estimated percentage.
section_title: Savings Estimate for Proposed Contact With Beneficiaries in the CDR Backlog
paragraphs: Our estimate of a one-time savings associated with our recommendation to begin a process for more frequent contact with beneficiaries who are not selected for either a CDR or a financial eligibility redetermination during the year is based on the following SSA costs and savings estimates and assumptions. The number of DI beneficiaries who would be contacted by this initiative was estimated by subtracting the number of DI CDRs planned for fiscal year 1996 from the DI population due or overdue for CDRs as of fiscal year 1996. For the SSI program, the number of beneficiaries who would be contacted by this initiative was estimated by subtracting the estimated number of SSI beneficiaries who would receive either a financial eligibility redetermination or a CDR from the SSI population currently due or overdue for CDRs as of fiscal year 1996. We assumed that the percentage of beneficiaries who would fail to cooperate with this initiative would be the same as the most recent SSA estimates for DI CDRs and SSI financial eligibility redeterminations. We used savings estimates resulting from DI benefit terminations as provided by the Office of the Actuary. To estimate federal savings from SSI benefit terminations, we used estimates provided by SSA’s Office of the Actuary and the Department of Health and Human Services’ Health Care Financing Administration for adult beneficiaries, and offsetting cost estimates to account for the resultant increase in food stamps. Because these SSI beneficiaries would be contacted for financial eligibility redeterminations within the next 5 years, the SSI estimates we used reflect only 5 years of savings and offsetting food stamps. Because many DI beneficiaries who have been receiving benefits for years may never have been contacted for CDRs, the DI estimates we used reflect a lifetime of savings. As a proxy for the cost of the mailer, we used an SSA estimate of the cost of the current nonscannable mailer. Because this figure overestimates the cost of a scannable mail contact, it provides a conservative estimate, including some administrative and developmental costs.
Calculation of number of beneficiaries expected to be dropped from the programs Beneficiaries due or overdue for CDRs in fiscal year 1996 Less: planned financial eligibility redeterminations for those who are not receiving a CDR Beneficiaries not contacted during the year Multiplied by: percentage of beneficiaries who fail to cooperate Total beneficiaries expected to be dropped from the program Per-beneficiary savings and offsetting costs Gross savings to DI trust fund/SSI program Gross savings to Medicare/federal portion of Medicaid Less: offsetting costs of additional food stamps Net savings per beneficiary dropped from the program Total estimated savings to the federal government Net program savings (number of beneficiaries dropped multiplied by net savings per beneficiary)
Less: cost of sending scannable mailer (number of beneficiaries contacted at $25)
Total estimated net savings from proposed initiative (combined total = $1,477,236,040)
section_title: How SSA Conducts Continuing Disability Reviews
paragraphs: This appendix provides details on SSA’s procedures for conducting CDRs. More specifically, we (1) outline the process for conducting full medical CDRs and (2) discuss SSA’s use of mailer CDRs.
subsections: section_title: Full Medical Reviews
paragraphs: Generally, a full medical CDR is used to determine with certainty whether a beneficiary has medically improved to the point that the person is no longer disabled and should be removed from the disability rolls. The full medical CDR process is labor-intensive and generally involves (1) one of 1,300 SSA field offices to determine whether the beneficiary is engaged in any substantial gainful activity (SGA), and (2) one of 54 state DDS agencies to determine whether the beneficiary continues to be disabled, a step that frequently involves examination of the beneficiary by at least one medical doctor. A full medical CDR generally follows an eight-step evaluation process (see fig. II.1).
Figure II.1: Eight-Step Evaluation Process for a Full Medical CDR Step 1 Is beneficiary engaged in  substantial gainful activity?
Step 2 Does impairment meet or equal severity as defined in medical listing?
Step 3 Has medical improvement (MI) occurred?
Step 5  Does an exception to MI apply?
Step 4 Is MI related to ability to work?
Step 6 Is impairment severe?
Step 7 Is beneficiary able to  perform work done in past?
Step 8 Based on SSA guidelines, is beneficiary  able to  perform other work?
Determination Beneficiary remains disabled  and benefits continue.
Determination Beneficiary is no longer disabled  and benefits terminate.
If an exception to MI applies in which the initial determination was fraudulently obtained or the beneficiary does not cooperate with SSA, benefits are terminated.
At step one, the SSA field office determines whether the beneficiary is engaged in SGA. Field office staff contact the beneficiary, often through a face-to-face meeting, and obtain information on the person’s condition, medical treating sources, and the effect of the impairment on the beneficiary’s ability to perform SGA. This information describes any changes that have occurred since the initial application or most recent CDR and includes types of treatment received, medicines received, specialized tests or examinations, vocational rehabilitation services received, and any schools or training classes attended since the last medical determination. The SSA field office also obtains information on any work activities since the person became disabled, whether the condition continues to interfere with the ability to work, and whether the beneficiary has been released for work by the treating physician. Benefits are terminated for beneficiaries engaged in SGA, regardless of medical condition. A beneficiary found to be not working or working but earning less than SGA has his or her case forwarded to the state DDS office.
At step two, the DDS compares the beneficiary’s condition with the Listing of Impairments developed by SSA. The listings contain over 150 categories of medical conditions that, according to SSA, are severe enough ordinarily to prevent a person from engaging in SGA. The DDS obtains medical evidence from the sources who treated the beneficiary during the 12 months prior to the CDR. If the medical evidence provided is insufficient for a disability decision, the DDS will arrange for a consultative examination by an independent doctor. A beneficiary whose impairment is cited in the listings or whose impairment is at least as severe as those impairments in the listings, and who is not engaged in SGA, is found to be still disabled.
At step three, a beneficiary whose impairment is not cited in the listings or whose impairment is less severe than those cited in the listings is evaluated further to determine whether there has been medical improvement (MI). MI is defined as any decrease in medical severity of the impairment(s) present at the time of the most recent medical determination. In deciding whether MI has occurred, the DDS considers changes in symptoms, signs, and/or laboratory findings and determines whether these changes reflect decreased medical severity of the impairment(s). If MI has not occurred, the DDS skips step four and proceeds to step five to consider whether any exceptions to MI apply.
At step four, for beneficiaries for whom MI has occurred, the DDS determines whether MI is related to the ability to work. MI relates to the ability to work when there is an increase in a person’s residual functional capacity (RFC) to do basic work activities compared with the person’s RFC at the last medical determination. When MI does not relate to the ability to work, the DDS proceeds to step five. If MI relates to the ability to work, the DDS goes to step six.
At step five, the DDS determines whether exceptions to MI apply. Exceptions provide a way for SSA to find a beneficiary no longer disabled in certain limited situations even though there is no decrease in the severity of the impairment. There are two exceptions to MI. The first exception applies to certain situations in which the person can engage in SGA—for example,when substantial evidence shows that advances in medical or vocational therapy or technology have favorably affected the severity of a beneficiary’s impairment or RFC to do basic work activities. The second exception can apply without regard to the person’s ability to engage in SGA—for example, in situations in which the prior determination was fraudulently obtained or in which the beneficiary fails to cooperate with SSA in providing information or in having an examination. At any point in the eight-step evaluation process, if the second exception applies, benefits are terminated. If no exceptions apply, disability benefits are continued.
At step six, when either the first exception applies or MI is determined to be related to the ability to work, the DDS determines whether the beneficiary’s current impairment is severe. According to SSA standards, a severe impairment is one that significantly limits a person’s ability to do basic work activities, such as standing, walking, speaking, understanding and carrying out simple instructions, using judgment, responding appropriately to supervision, and dealing with change. If the DDS determines that the impairment is not severe, benefits are terminated.
At step seven, for beneficiaries with severe impairments, the DDS determines whether the beneficiary can still perform work he or she has done in the past. This determination is based on an assessment of the beneficiary’s current RFC. If the person is found to be able to do past work, benefits are terminated.
At step eight, for beneficiaries found unable to perform work done in the past, the DDS determines whether the beneficiary can do other work that exists in the national economy. Using SSA guidelines, the DDS considers the person’s age, education, vocational skills, and RFC to determine what other work, if any, the beneficiary can perform. Unless the DDS concludes that the person can perform work that exists in the national economy, benefits are continued.
section_title: Mailer CDRs
paragraphs: Mailer CDRs enable SSA to conduct more CDRs without performing labor-intensive full medical reviews. The mailer CDR is a questionnaire through which a beneficiary provides information about health, medical care, work history, and training (see fig. II.2 for the questionnaire currently used). Currently, SSA sends mailer CDRs to a portion of beneficiaries with the lowest estimated likelihood of benefit termination.
In conjunction with data on the beneficiaries’ impairment, age, and other characteristics, SSA uses responses to mailer CDRs to help identify those beneficiaries most likely to have medically improved who thus should receive full medical reviews. For example, if the beneficiary indicates that his or her health is better, SSA will generally conduct a full medical CDR. In mental impairment cases, SSA may decide that a full medical CDR is unwarranted even if the beneficiary reports MI. If, however, the beneficiary indicates that his or her health is the same or worse, SSA then reviews the beneficiary’s response to the next question on whether, within the last 2 years, a doctor has indicated that the person can return to work. On the basis of the beneficiary’s responses to the CDR mailer and characteristics, SSA assesses the potential effects of any hospitalizations or surgeries on the beneficiary’s health status and the importance of ongoing medical treatment or its absence to the beneficiary’s health condition. If necessary, SSA will contact the beneficiary for additional information or clarification. If SSA’s analysis indicates possible MI, the beneficiary is referred for a full medical CDR. Otherwise, the beneficiary is rescheduled for a future CDR.
Not available.
subsections: section_title: Table III.4: Distribution of DI and SSI Beneficiaries Due for CDRs Included in and Excluded From SSA’s Selection Process for Estimating the Likelihood of Benefit Termination
section_title: Tables on CDR Population Characteristics
paragraphs: Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders Estimated likelihood of benefit termination 14,212 (continued)
Average likelihood (mean)
Average likelihood (median)
Number of years receiving benefits Average years (mean)
Average years (median)
Matured over 10 years ago Average years (mean)
Average years (median)
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders Estimated likelihood of benefit termination 2 (continued)
Average likelihood (mean)
Average likelihood (median)
Number of years receiving benefits Average years (mean)
Average years (median)
Matured over 10 years ago Average years (mean)
Average years (median)
Workers 60 years and older (continued)
Workers 60 years and older (continued)
Workers 60 years and older SSA does not estimate the likelihood of benefit termination for MIE and MIP workers aged 60 and over or for MINE workers. Therefore, the total number with an estimated likelihood of benefit termination is less than the total for the column.
subsections: section_title: Table IV.4: Characteristics of DI Workers Awaiting CDRs in FY 1996, by Program, Age, and Medical Improvement Classification, in Percentages
paragraphs: Workers 60 years and older (continued)
Workers 60 years and older (continued)
Workers 60 years and older SSA does not estimate the likelihood of benefit termination for MIE and MIP workers aged 60 and over or for MINE workers. Therefore, the total number with an estimated likelihood of benefit termination is less than the total for the column.
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders 201,148 5-24% 25-49% 50-74% 5-24% 25-49% 50-74% (continued)
Number of years receiving benefits Average years (mean)
Average years (median)
Matured over 10 years ago Average years (mean)
Average years (median)
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders 0 5-24% 25-49% 50-74% 5-24% 25-49% 50-74% (continued)
Number of years receiving benefits Average years (mean)
Average years (median)
Matured over 10 years ago Average years (mean)
Average years (median)
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders 3,820 (continued)
Estimated likelihood of benefit termination Average likelihood (mean)
Average likelihood (median)
Number of years receiving benefits Average years (mean)
Average years (median)
Due over 10 years ago Average years (mean)
Average years (median)
Largest sampling error in column at the 95-percent confidence level Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders 0 (continued)
Estimated likelihood of benefit termination Average likelihood (mean)
Average likelihood (median)
Number of years receiving benefits Average years (mean)
Average years (median)
Due over 10 years ago Average years (mean)
Average years (median)
SSA does not estimate the likelihood of benefit termination for MIEs and MIPs aged 60 and over. Therefore, the total with an estimated likelihood of benefit termination is less than the total number for the column. Furthermore, SSA does not estimate the likelihood of benefit termination for children or MINEs.
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation (continued)
Skin and subcutaneous tissue disorders Estimated likelihood of benefit termination Average likelihood (mean)
Average likelihood (median)
Number of years receiving benefits Average years (mean)
Average years (median) (continued)
Due over 10 years ago Average years (mean)
Average years (median)
Largest sampling error in column at the 95-percent confidence level (continued)
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders Estimated likelihood of benefit termination Average likelihood (mean)
Average likelihood (median) (continued)
Number of years receiving benefits Average years (mean)
Average years (median)
Due over 10 years ago Average years (mean)
Average years (median)
Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation Skin and subcutaneous tissue disorders (continued)
Number of years receiving benefits Average years (mean)
Average years (median)
Due over 10 years ago Average years (mean)
Average years (median) (Table notes on next page)
Largest sampling error in column at the 95-percent confidence level Average age (mean)
Average age (median)
Endocrine, nutritional, and metabolic diseases Disorders of blood and blood-forming organs Mental disorders, excluding mental retardation (continued)
Skin and subcutaneous tissue disorders Number of years receiving benefits Average years (mean)
Average years (median)
Due over 10 years ago (continued)
Average years (mean)
Average years (median)
section_title: Comments From the Social Security Administration
paragraphs: The following are GAO’s comments on the Social Security Administration’s letter dated September 23, 1996.
subsections: section_title: GAO Comments
paragraphs: 1. When SSA considers legislative changes that would make the CDR process more cost-effective, we believe that it must reassess the requirements of the existing schedule for conducting CDRs. According to SSA officials, if an initial CDR finds that a beneficiary is still disabled, subsequent CDRs are likely to result in the same conclusion. We question whether additional CDRs for that beneficiary are appropriate or cost-effective. Similarly, predictive formulas for DI worker beneficiaries allow SSA to determine those workers most likely to medically improve. Other groups not now included in the selection process may yield additional groups that are cost-effective to review. 2. While we recognize that the use of the formulas established the cases that fall into the “middle group,” SSA officials told us that SSA does not know which type of CDR—full medical or mailer—is more appropriate for those beneficiaries. SSA has at least two efforts under way to improve its ability to determine which type of CDR would be the more cost-effective. 3. We agree that SSA is currently testing the feasibility of expanding the use of formulas to the MINEs, and the report states that such an effort is under way. 4. While cost-effectiveness is an important aspect of the CDR process, we also believe that to ensure program integrity, all beneficiaries should have some likelihood of selection for a CDR. Such a program weakness is particularly troubling given that SSA has been unable to conduct all required CDRs for almost a decade and it estimates that the backlog will not be eliminated for another 7 years. 5. Our recommendation provides a comprehensive approach to program management that focuses on cost-effectiveness, program integrity, and increased contact with beneficiaries. Increased beneficiary contact is valuable to remind beneficiaries that their disability status is being monitored and that they are responsible for reporting medical improvement. We believe that such a contact also offers an additional opportunity for SSA to further its program improvement efforts. For example, it could be used to identify medical treating sources that should receive the medical treating source mailer currently under development. 6. We believe that ongoing periodic contact with beneficiaries is essential to a well managed program and should be done even if such an activity is considered a program operating cost. However, in estimating the costs of increased contact with beneficiaries, we considered a number of factors, including administrative and other costs. Because SSA could not provide us with estimates for these costs, we used the cost of the CDR mailer process to approximate the costs. The cost of the mailer reflects a more expensive manual process; thus we believe that it overstates the true cost of a scannable mail contact. In addition, because of the significant cost savings likely to result from the termination of benefits for individuals who do not respond—a net federal savings of over $1.4 billion—we believe that there is sufficient latitude to cover the cost of such an initiative. 7. Given the challenges that SSA faces, we continue to believe that its ability to eliminate the backlog of all required CDRs is uncertain. It may be possible for SSA to conduct the number of CDRs in its plan. However, the plan excludes about 848,000 required CDRs that are currently due or overdue. In addition, it does not include new CDRs and disability eligibility redeterminations required by the 1996 amendments to the Social Security Act, which take precedence over other required CDRs. Additional challenges are cited in our report. 8. We are pleased that SSA agrees with our recommendation to integrate return-to-work initiatives and the CDR process and that SSA has efforts under way to elicit the assistance of federal and private sector partners in the development of a return-to-work strategy. In our report, we acknowledge that field office employees play a limited role in providing information on VR opportunities to beneficiaries when they apply, but we also note that these staff take VR-related actions during a full medical CDR, and that state VR agencies have a role in limiting candidates for rehabilitation.
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, the following persons made important contributions to this report: Susan E. Arnold, Senior Evaluator; Christopher C. Crissman, Assistant Director; Julian M. Fogle, Senior Evaluator; Elizabeth A. Olivarez, Evaluator; Susan K. Riggio, Evaluator; Vanessa R. Taylor, Senior Evaluator (Computer Science); and Ann T. Walker, Evaluator (Database Manager).
section_title: Related GAO Products
paragraphs: Supplemental Security Income: Some Recipients Transfer Valuable Resources to Qualify for Benefits (GAO/HEHS-96-79, Apr. 30, 1996).
SSA Disability: Program Redesign Necessary to Encourage Return to Work (GAO/HEHS-96-62, Apr. 24, 1996).
PASS Program: SSA Work Incentives for Disabled Beneficiaries Poorly Managed (GAO/HEHS-96-51, Feb. 28, 1996).
SSA’s Rehabilitation Programs (GAO/HEHS-95-253R, Sept. 7, 1995).
Supplemental Security Income: Disability Program Vulnerable to Applicant Fraud When Middlemen Are Used (GAO/HEHS-95-116, Aug. 31, 1995).
Social Security Disability: Management Action and Program Redesign Needed to Address Long-Standing Problems (GAO/T-HEHS-95-233, Aug. 3, 1995).
Supplemental Security Income: Growth and Changes in Recipient Population Call for Reexamining Program (GAO/HEHS-95-137, July 7, 1995).
Disability Insurance: Broader Management Focus Needed to Better Control Caseload (GAO/T-HEHS-95-164, May 23, 1995).
Supplemental Security Income: Recipient Population Has Changed as Caseloads Have Burgeoned (GAO/T-HEHS-95-120, Mar. 27, 1995).
Social Security: Federal Disability Programs Face Major Issues (GAO/T-HEHS-95-97, Mar. 2, 1995).
Supplemental Security Income: Recent Growth in the Rolls Raises Fundamental Program Concerns (GAO/T-HEHS-95-67, Jan. 27, 1995).
Social Security: Rapid Rise in Children on SSI Disability Rolls Follows New Regulations (GAO/HEHS-94-225, Sept. 9, 1994).
Social Security: New Continuing Disability Review Process Could Be Enhanced (GAO/HEHS-94-118, June 27, 1994).
Disability Benefits for Addicts (GAO/HEHS-94-178R, June 8, 1994).
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