Social Security Administration: Continuing Leadership Focus Needed to Modernize How SSA Does Business
Released: 2018-03-07T00:00:00

Letter

Background

SSA Programs and Functions

The scope of SSA’s operations and responsibilities is vast. One of SSA’s key responsibilities is to provide financial benefits to eligible individuals through three benefit programs:

Old-Age and Survivors Insurance (OASI)—provides retirement benefits to older individuals and their families and to survivors of deceased workers.

Disability Insurance (DI)—provides benefits to eligible individuals who have qualifying disabilities, and their eligible family members.

Supplemental Security Income (SSI)—provides income for aged, blind, or disabled individuals with limited income and resources.

In support of its mission, SSA maintains workers’ earnings information and in fiscal year 2017 posted over 279 million earnings items to workers’ records. SSA also determines if claimants are eligible for benefits, completing 10 million claims and more than 680,000 hearings decisions in fiscal year 2017. SSA also maintains birth and death records and issues Social Security Numbers. In fiscal year 2017, SSA issued almost 17 million new and replacement Social Security cards.

Beyond administering its programs and core missions, SSA provides key administrative support to the Medicare program, partners with the Department of Homeland Security in verifying employment eligibility for new hires, and assists with the administration of other programs, such as the Supplemental Nutrition Assistance Program and programs administered by the Railroad Retirement Board.

SSA’s workforce is large, as is its physical footprint. About 62,000 federal employees and 15,000 state employees administer SSA programs in about 1,500 facilities nationwide. These facilities include regional offices, more than 1,200 field offices, teleservice centers, processing centers, hearings offices, the Appeals Council offices, and SSA’s headquarters in Baltimore, Maryland.

Customers can access SSA services in-person at an SSA field office; by phone with field office staff or through a National 800 number; or online. In 2018, SSA reported that, each day, about 170,000 people visit and 250,000 call one of its field offices for various reasons, such as to file claims, ask questions, or update their information. SSA also reported that its national 800 number handles over 30 million calls each year.

Challenges to Managing SSA’s Disability Workloads and Ensuring Program Integrity

Complex eligibility rules and multiple handoffs and potential layers of review make SSA’s disability programs complicated and costly to administer. Program complexity arguably has made it challenging for SSA to make significant advances in efficiently managing high disability workloads, ensuring timely and consistent disability decisions, preventing benefit overpayments, and mitigating fraud risks.

Our recent work highlighted some of the challenges SSA faces in making disability decisions that are timely, consistent and based on current concepts of disability, while also preventing and deterring fraud and ensuring that only beneficiaries who are entitled to benefits receive them. These findings underscore the need for SSA leadership to approach these challenges strategically and follow through with rigorous plans in order to achieve significant improvements in its disability programs.

Making Timely Disability Decisions

In recent years, SSA made noteworthy strides in reducing its backlog of initial disability claims, but delays in deciding disability appeals continue to worsen. SSA has reduced the number of pending claims each fiscal year since 2010—from about 842,000 in fiscal year 2010 to about 523,000 in fiscal year 2017. However, the number of appealed claims pending at the end of 2017 was approximately 1.1 million compared to about 700,000 in fiscal year 2010, and the average time needed to complete appeals increased from 426 days to 605 days during that same time.

In our 2017 High Risk Update, we reported that SSA had taken some steps to address its growing appeals backlog, such as hiring additional administrative law judges (ALJ). SSA also published a plan in 2016 to improve appeals timeliness that called for further hiring, improving business processes, sharing workloads across offices, and making better use of IT resources, such as increasing the number of video hearings. However, SSA’s Office of Inspector General (OIG) found that many of the initiatives in SSA’s plan duplicated past efforts that had met with limited success. SSA also noted that some efforts, such as additional hiring, will depend on resource availability. We also reported that SSA is still developing plans to implement its broad vision for service delivery, Vision 2025, which addresses SSA’s capacity to provide timely initial claims and appeals decisions. To address its appeals backlog and position itself to effectively provide timely disability decisions at all levels, SSA leadership will need to continue to operationalize Vision 2025, plan and implement systems support for initial claims, and implement and monitor the success of its appeals initiatives.

Modernizing Disability Criteria

While SSA has made significant progress in updating the outdated occupational and medical criteria it uses to make disability eligibility decisions, some of these efforts are multi-year and will require the continued focus of top leadership. Most significantly, SSA has made strides updating a decades old Dictionary of Occupational Titles with a new Occupational Information System (OIS), which contains occupational data to make disability determinations. SSA expects to have OIS in place by 2020, and currently plans to update OIS information every 5 years thereafter. Regarding the medical criteria used to make disability decisions, we reported in our 2017 high risk update that SSA had published final rules for nearly all of the 14 body systems for adults and was on track to update criteria for all body systems every 3 to 5 years. While SSA has addressed all our recommendations in this area, other opportunities exist for updating aspects of SSA’s disability decision process. For example, SSA officials have acknowledged that the vocational rules it uses to determine eligibility may no longer accurately reflect the nature and scope of work available in the national economy and stated that the agency is conducting a review to determine if changes to vocational factors are necessary. Agency leadership will play a key role in ensuring SSA pursues these opportunities to further modernize its criteria and devotes appropriate resources to continuously updating its occupational and medical criteria on a timely basis.

Enhancing the Accuracy and Consistency of Disability Decisions

Our recent work analyzed variation in the rate that different ALJs grant disability benefits when claimants appeal an earlier denial, and found that SSA’s efforts to monitor the consistency of appeal hearing decisions are incomplete. In 2017 after analyzing data on hearings decisions, we estimated that the allowance (approval) rate could vary by as much as 46 percentage points between different judges with respect to a typical claim. SSA conducts various reviews to monitor the accuracy and consistency of ALJ decisions, but SSA has not systematically evaluated whether its reviews are effective. SSA has also struggled to sustain all of its quality review efforts, in part, because SSA reassigned staff to help expedite claims decisions. We also reported on shortcomings in SSA’s Compassionate Allowance initiative (CAL)—which fast tracks disability claims for severe medical conditions that are most likely to be approved— that could prevent claims from being consistently and accurately identified for expedited processing. These shortcomings include lacking a systematic approach and clear criteria for designating medical conditions for inclusion in CAL.

With about one in three beneficiaries being granted benefits at SSA’s appeals hearing level, it remains crucial that SSA leadership commit to ensuring appeal applications receive fair and consistent treatment, including assessing persistent and unexplained variations in ALJ allowance rates. Ensuring oversight and scrutiny of SSA’s CAL initiative is also essential to avoid potential equity issues with regards to SSA’s most vulnerable claimants.

Preventing and Collecting Overpayments

Benefit overpayments represent avoidable losses to the DI trust fund and, for the individual who may have incurred an overpayment despite conscientiously reporting wages, a financial hardship when required to repay and a disincentive to pursue work. In fiscal year 2015, the most recent year for which we have data, SSA identified $1.2 billion in new overpayments in its DI program, and had $6.3 billion in total overpayment debt outstanding. In 2015, we reported that the SSA process for beneficiaries to report earnings (and consequently inform whether they remain eligible for DI benefits) had a number of weaknesses, including staff not following established procedures, limited oversight, and a lack of automated reporting options for beneficiaries, such as an automated telephone system or smart phone app. SSA has made progress expanding electronic work reporting, but these efforts will not eliminate vulnerabilities caused by SSA’s multi-faceted processes for receiving and handling work reports, and will require additional management focus to shore up internal controls and avoid unnecessary overpayments.

Once overpayments do occur, SSA will endeavor to recover those overpayments. However, we recently found that the collection of overpayment debts warrants more attention than SSA has demonstrated to date. In 2016, we reported that SSA’s largest source of debt recovery is withholding a portion of beneficiaries’ monthly benefits payments. However, we found that amounts withheld may not consistently reflect individuals’ ability to pay, and that many repayment plans could take decades to complete. We recommended SSA improve oversight and pursue additional debt recovery options—recommendations that SSA has yet to implement. Absent clear policies and oversight procedures for establishing and reviewing withholding plans—SSA’s main tool for recovering overpayments—SSA cannot be sure that beneficiaries are repaying debts in appropriate amounts within appropriate time frames.

Further, by not implementing additional debt collection tools that would speed up repayment, which can extend past the beneficiaries’ lifetimes and is diminished in value by inflation, SSA is missing opportunities to restore debts owed to the DI trust fund.

Strategic Approach to Managing Fraud Risks

Although the extent of fraud in SSA’s benefit programs is unknown, high- profile cases—such as one case reported by SSA’s OIG involving 70 individuals and $14 million in fraudulent benefits—underscore the importance of continued vigilance on the part of SSA leadership in managing fraud risks to prevent fraud. We reported in 2017 that SSA established a new office responsible for coordinating antifraud programs across the agency, and had taken steps to gather information on some fraud risks. However, we also found that SSA had not fully assessed its fraud risks, had not developed an overall antifraud strategy to align its efforts with those risks, and did not have a complete set of metrics to determine whether its antifraud efforts are effective. SSA has already taken action on one of our recommendations by producing a fraud risk assessment, which we will evaluate, and has stated its intent to take action on our other recommendations. Nevertheless, leadership will be essential for developing and implementing an antifraud strategy aligned with the risk assessment and ensuring that SSA’s efforts to prevent and detect fraud are effective, thereby helping to safeguard the integrity of its programs and its delivery of benefits to only eligible individuals.

Challenges to Modernizing SSA’s Physical Footprint and Service Delivery

With one of the largest physical footprints of any federal agency, and in light of rising facility costs, SSA may be able to achieve efficiencies by reducing the size of its footprint and pursuing additional, cost effective service delivery options. However, as we reported in 2013, rightsizing SSA’s physical infrastructure can be complex, politically charged, and costly; expanding service delivery options is also challenging due to the complexity of SSA’s disability programs and the varying needs of SSA’s customers. Our recent review of SSA’s plans to reconfigure its physical footprint and expand how it delivers services confirmed a number of challenges SSA must navigate. It also highlighted the importance of approaching these challenges strategically and systematically, through strong leadership that guides robust planning, data collection, and assessment efforts.

Reconfiguring SSA’s Physical Footprint

In our 2017 work, we identified several challenges that could hinder SSA’s ability to readily reconfigure its footprint, align it with evolving needs and potentially achieve desirable cost savings. For example, we found that despite progress reducing its square footage and the number of occupied buildings, SSA’s inflation-adjusted rental costs have remained steady. SSA’s ability to further reduce or enlarge its physical space is constrained by rental markets, and by union and community concerns. According to SSA officials, high rents, limited building stock and complicated federal leasing processes present difficulties and community needs and union concerns may further complicate relocating offices. We also found that, even though SSA is expanding its remote delivery of services—online and through new technologies—overall demand for field office services has not decreased, although demand varied greatly across SSA’s offices.

Expansion of online service—such as the SSI application, which became available online in 2017—present opportunities for SSA to further reduce or reconfigure its physical footprint. However SSA may miss those opportunities because we found that SSA had not fully integrated its strategic planning and facility planning, despite leading practices that indicate facility plans should align with an agency’s strategic goals and objectives. We recommended that SSA develop a long-term facility plan that explicitly links to its strategic goals for service delivery, and includes a strategy for consolidating or downsizing field offices in light of increasing use of and geographic variation in remote service delivery.

SSA agreed with our recommendation, and has since formed a Space Acquisition Review Board to consider space reductions in light of operational changes. SSA executive leadership will remain an important factor in ensuring a concerted effort to align the agency’s physical footprint with its vision for future service delivery.

Expanding Remote Service Delivery

Our recent work also found that while the complexity of SSA’s programs can make it challenging for customers to use online services, the agency lacked data to identify and address challenges with online applications. The online disability applications in particular can be confusing and challenging for customers to complete, according to many SSA managers and staff we interviewed. Applications that are submitted online often require follow-up contacts with applicants to obtain missing information, according to SSA front-line staff. However, while SSA has taken steps to make its online services more user-friendly, such as adding a click-to-chat function for customers who run into problems, the agency does not routinely collect data on the reasons for staff follow-ups with online applicants. Such data are critical to SSA’s efforts to further improve its online applications and ultimately allow SSA to shift more of its business online and further reconfigure its physical footprint.

SSA would also benefit from establishing performance goals to help it determine whether new service delivery options are succeeding. To help address access challenges such as limited broadband internet in some rural areas, SSA has rolled out self-service personal computers in field offices, icons to link to SSA services on computers in public libraries and video services accessed from senior centers. SSA also recently completed a trial of customer service kiosks in seven SSA offices and third-party locations. SSA staff in field offices reported some positive impacts from these initiatives in terms of extending remote access to certain populations, but also cited challenges, such as with customers’ varying ability to use self-service computers. While SSA collects some data on usage, it has not developed performance targets or goals that could help it assess these initiatives’ success or identify problems.

We recommended that SSA develop a cost-effective approach to identifying the most common issues with online benefit claims, and develop performance goals and collect performance data for alternate service delivery approaches. SSA agreed with our recommendations, and has since reported taking steps to implement them. As SSA continues to expand its service delivery options, the agency’s leadership will need to encourage data driven approaches to ensure high quality and effective alternative service delivery.

Challenges to Modernizing Information Technology

In 2016, we reported that SSA faces challenges with IT planning and management, based on over a decade of prior work that identified weaknesses in system development practices, IT governance, requirements management, strategic planning, and other aspects of IT. For example, in 2012, a GAO review reported that SSA did not have an updated IT strategic plan to guide its efforts and its enterprise architecture lacked important content that would have allowed the agency to more effectively plan its IT investments. In addition, SSA and others have reported substantial difficulty in the agency’s ability to implement its Disability Case Processing System—intended to replace 54 disparate systems used by state Disability Determination Services—citing software quality and poor system performance as issues. Consequently, in June 2016, the initiative was placed on the Office of Management and Budget’s (OMB) government-wide list of 10 high-priority programs requiring attention. In February 2018, the SSA OIG completed an assessment of an independent contractor’s analysis of options for the system. The SSA OIG concluded that several factors that limited the analysis supporting the contractor’s recommendation for SSA to continue investing in a new, custom-build version of the Disability Case Processing System.

Because OMB is no longer identifying high-priority programs, in November 2017, we recommended OMB resume identifying these programs. We also recommended OMB ensure that the Federal Chief Information Officer is directly involved in overseeing these high-priority programs as past experience has shown that this oversight could improve accountability and achieve positive results. OMB neither agreed nor disagreed with our recommendations, and has not indicated whether it will take action on these recommendations.

Beyond the challenges identified in these previous reports, GAO’s May 2016 report on federal agencies’ IT legacy systems highlighted the increasing costs that agencies, including SSA, may face as they continue to operate and maintain at-risk legacy systems. We identified SSA’s investment in IT infrastructure operations and maintenance as being among the 10 largest expenditures of federal agencies in fiscal year 2015. Further, we pointed out that legacy systems may become increasingly expensive as agencies have to deal with issues such as obsolete parts and unsupported hardware and software, and potentially have to pay a premium to hire staff or engage contractors with the knowledge to maintain outdated systems. For example, SSA reported re- hiring retired employees to maintain its systems that include many programs written in Common Business Oriented Language (COBOL). We highlighted a group of systems for determining retirement benefits eligibility and amounts which were over 30 years old, with some written in COBOL. We also noted that the agency had ongoing efforts to modernize the systems but was experiencing cost and schedule challenges due to the complexity of the legacy systems. We recommended that the agency identify and plan to modernize or replace legacy systems, in accordance with forthcoming OMB guidance. SSA agreed, and reported that it is finalizing its Information Technology Modernization Plan.

To its credit, SSA has made progress in consolidating and optimizing its data centers. Specifically, in August 2017, we reported that, as of February 2017, SSA was one of only two agencies that had met three of the five data optimization targets established by OMB pursuant to provisions referred to as the Federal Information Technology Acquisition Reform Act. Meeting these targets increases SSA’s ability to improve its operational efficiency and achieve cost savings.

In conclusion, many of the challenges facing SSA today are neither new nor fleeting because they are inherent in the complexity and massive size of SSA’s programs and the scope of broad demographic and societal changes over time. Our past work has pointed to the need for rigorous solutions to these complex problems, such as strategic planning, evaluation efforts, measuring for impact, and leveraging data—solutions that invariably require leadership attention and sustained focus.

Chairman Johnson, Ranking Member Larson, and Members of the Subcommittee, this concludes my prepared statement. I would be pleased to respond to any questions that you or other members of the Subcommittee may have.

GAO Contact and Acknowledgements

If you or your staff have any questions about this testimony, please contact Elizabeth Curda, Director, Education Workforce and Income Security Issues, at (202) 512-7215 or curdae@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony statement. GAO staff who made key contributions to this statement are Michele Grgich (Assistant Director), Daniel Concepcion (Analyst-in-Charge), Susan Aschoff, Alex Galuten, Jean McSween, Sheila McCoy, Lorin Obler, Sabine Paul, Almeta Spencer, and Erin McLaughlin Villas.

Appendix I: GAO Letter to SSA on Priority Recommendations to Implement

Appendix I: GAO Letter to SSA on Priority Recommendations to Implement This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.