To be considered eligible for benefits for either SSI or DI as an adult, a person must be unable to perform any substantial gainful activity by reason of a medically determinable physical or mental impairment that is expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months. Work activity is generally considered to be substantial and gainful if the person's earnings exceed a particular level established by statute and regulations. The process of determining eligibility for SSA disability benefits is complex, fragmented, and expensive. The current decision-making process involves an initial decision and up to three levels of administrative appeals if the claimant is dissatisfied with the decision. The claimant starts the process by filing an application either online, by phone or mail, or in person at any of SSA's 1,300 field offices. If the claimant meets the non- medical eligibility criteria, the field office staff forwards the claim to one of the 54 federally-funded, but primarily state-run Disability Determination Service (DDS) offices. DDS staff--generally a team composed of disability examiners and medical consultants--obtains and reviews medical and other evidence as needed to assess whether the claimant satisfies program requirements, and makes the initial disability determination. If the claimant is not satisfied with the decision, the claimant may ask the DDS to reconsider its finding. If the claimant is dissatisfied with the reconsideration, the claimant may request a hearing before one of SSA's federal administrative law judges in an SSA hearing office. If the claimant is still dissatisfied with the decision, the claimant may request a review by SSA's Appeals Council. The complex and demanding nature of this process is reflected in the relatively high cost of administering the DI and SSI programs. Although SSI and DI program benefits account for less than 20 percent of the total benefit payments made by SSA, they consume nearly 55 percent of the annual administrative resources. SSA has experienced difficulty managing its complex disability determination process, and consequently faces problems in ensuring the timeliness, accuracy, and consistency of its disability decisions. Although SSA has made some gains in the short term in improving the timeliness of its decisions, the Commissioner has noted that it still has "a long way to go." Over the past 5 years, SSA has slightly reduced the average time it takes to obtain a decision on an initial claim from 105 days in fiscal year 1999 to 97 days in fiscal year 2003, and significantly reduced the average time it takes the Appeals Council to consider an appeal of a hearing decision from 458 to 294 days over the same period. However, the average time it takes to receive a decision at the hearings level has increased by almost a month over the same period, from 316 days to 344 days. According to SSA's strategic plan, these delays place a significant burden on applicants and their families and an enormous drain on agency resources. Lengthy processing times have contributed to a large number of pending claims at both the initial and hearings levels. While the number of initial disability claims pending has risen more than 25 percent over the last 5 years, from about 458,000 in fiscal year 1999 to about 582,000 in fiscal year 2003, the number of pending hearings has increased almost 90 percent over the same time period, from about 312,000 to over 591,000. Some cases that are in the queue for a decision have been pending for a long time. For example, of the 499,000 cases pending in June 2002 at the hearings level, about 346,000 (69 percent) were over 120 days old, 167,000 (33 percent) were over 270 days old, and 88,500 (18 percent) were over 365 days old. In addition to the timely processing of claims, SSA has also had difficulty ensuring that decisions regarding a claimant's eligibility for disability benefits are accurate and consistent across all levels of the decision- making process. For example, the Social Security Advisory Board has reported wide variances in rates of allowances and denials among DDSs, which may indicate that DDSs may be applying SSA standards and guidelines differently. In fiscal year 2000, the percentage of DI applicants whose claims were allowed by a DDS ranged from a high of 65 percent in New Hampshire to a low of 31 percent in Texas, with a national average of 45 percent. In addition, the high percentage of claimants awarded benefits upon appeal may indicate that adjudicators at the hearings level may be arriving at different decisions on similar cases compared to the DDSs. In fiscal year 2000, about 40 percent of the applicants whose cases were denied at the initial level appealed, and about two-thirds of those who appealed were awarded benefits. Awards granted on appeal happen in part because decision-makers at the initial level use a different approach to evaluate claims and make decisions than those at the appellate level. In addition, the decision-makers at the appeals level may reach a different decision because the evidence in the case differs from that reviewed by the DDS. We are currently reviewing SSA's efforts to assess consistency of decision-making between the initial and the hearings levels. Moreover, in 2003, we reported on possible racial disparities in SSA's disability decision-making at the hearings level from 1997 to 2000 between white and African-American claimants not represented by attorneys. Specifically, among claimants without attorneys, African-American claimants were significantly less likely to be awarded benefits than white claimants. We also found that other factors--including the claimant's sex and income and the presence of a translator at a hearing--had a statistically significant influence on the likelihood of benefits being allowed. In addition to difficulties with the timeliness, accuracy, and consistency of its decision-making process, SSA's disability programs face the more fundamental challenge of being mired in concepts from the past. SSA's disability programs remain grounded in an approach that equates impairment with an inability to work despite medical advances and economic and social changes that have redefined the relationship between impairment and the ability to work. Unlike some private sector disability insurers and social insurance systems in other countries, SSA does not incorporate into its initial or continuing eligibility assessment process an evaluation of what is needed for an individual to return to work. In addition, employment assistance that could allow claimants to stay in the workforce or return to work--and thus potentially to remain off the disability rolls--is not offered through DI or SSI until after a claimant has gone through a lengthy determination process and has proven his or her inability to work. Because applicants are either unemployed or only marginally connected to the labor force when they apply for benefits, and remain so during the eligibility determination process, their skills, work habits, and motivation to work are likely to deteriorate during this long wait. In SSA's most recent attempt to improve its determination process, the Commissioner, in September 2003, set forth a strategy to improve the timeliness and accuracy of disability decisions and foster return to work at all stages of the decision-making process. SSA's Commissioner has acknowledged that the time it now takes to process disability claims is unacceptable. The Commissioner has also recognized that going through such a lengthy process to receive benefits would discourage individuals from attempting to work. To speed decisions for some claimants, the Commissioner plans to initiate an expedited decision for claimants with more easily identifiable disabilities, such as aggressive cancers. Under this new approach, expedited claims would be handled by special units located primarily in SSA's regional offices. Disability examiners employed by the DDSs to help decide eligibility for disability benefits would be responsible for evaluating the more complex claims. To increase decisional accuracy, among other approaches, the strategy will require DDS examiners to develop more complete documentation of their disability determinations, including explaining the basis for their decisions. The strategy also envisions replacing the current SSA quality control system with a quality review that is intended to provide greater opportunity for identifying problem areas and implementing corrective actions and related training. The Commissioner has predicated the success of her claims process improvement strategy on enhanced automation. In 2000, SSA issued a plan to develop an electronic disability folder and automated case processing systems. According to SSA, the technological investments will result in more complete case files and the associated reduction of many hours in processing claims. SSA also projects that the new electronic process will result in significantly reduced costs related to locating, mailing, and storing paper files. SSA is accelerating the transition to its automated claims process, known as AeDib, which will link together the DDSs, SSA's field offices, and its Office of Hearings and Appeals. According to the Commissioner, the successful implementation of the automated system is essential for improving the disability process. Beyond steps to improve the accuracy and timeliness of disability determinations, the Commissioner's strategy is also consistent with our 1996 recommendations to develop a comprehensive plan that fosters return to work at all stages of the disability process and integrates as appropriate: 1) earlier intervention in returning workers with disabilities to the workplace, 2) identifying and providing return-to-work services tailored to individual circumstances, and 3) structuring cash and medical benefits to encourage return to work. The Commissioner has proposed a series of demonstrations that would provide assistance to applicants to enhance their productive capacities, thus potentially reducing the need for long-term benefits for some. The demonstrations include early interventions to provide benefits and employment supports to some DI applicants, and temporary allowances to provide immediate, but short- term, cash and medical benefits to applicants who are highly likely to benefit from aggressive medical care. In addition, demonstrations will provide health insurance coverage to certain applicants throughout the disability determination process. While the Commissioner's proposed approaches for improving the disability determination process appear promising, challenges, including automation, human capital, and workload growth, have the potential to hinder its success. Automation. We have expressed concerns about AeDib, which could affect successful implementation of the Commissioner's strategy. Our recent work noted that SSA had begun its national rollout of this system based on limited pilot testing and without ensuring that all critical problems identified in its pilot testing had been resolved. Further, SSA did not plan to conduct end-to-end testing to evaluate the performance of the system's interrelated components. SSA has maintained that its pilot tests will be sufficient for evaluating the system; however, without ensuring that critical problems have been resolved and conducting end-to- end testing, SSA lacks assurance that the interrelated electronic disability system components will work together successfully. Additionally, while SSA has established processes and procedures to guide its software development, the agency could not provide evidence that it was consistently applying these procedures to the AeDib initiative. Further, while SSA had identified AeDib system and security risks, it had not finalized mitigation strategies. As a result, the agency may not be positioned to effectively prevent circumstances that could impede AeDib's success. To help improve the potential for AeDib's success, we have made a number of recommendations to SSA, including that the agency resolve all critical problems identified, conduct end-to-end testing, ensure user concurrence on software validation and systems certifications, and finalize AeDib risk mitigation strategies. Key human capital challenges. We have also expressed concerns about a number of issues surrounding human capital at the DDSs that could adversely affect the Commissioner's strategy. The more than 6,500 disability examiners in the DDSs who help make initial decisions about eligibility for disability benefits are key to the accuracy and timeliness of its disability determinations. The critical role played by the DDS examiners will likely be even more challenging in the future if the DDSs are responsible for adjudicating only the more complex claims, as envisioned by the Commissioner. Yet, we recently found that the DDSs face challenges in retaining examiners and enhancing their expertise. High examiner turnover. According to the results of our survey of 52 DDSs, over half of all DDS directors said that examiner turnover was too high. We also found that examiner turnover was about twice that of federal employees performing similar work. Nearly two-thirds of all directors reported that turnover had decreased overall staff skill levels and increased examiner caseloads, and over one-half of all directors said that turnover had increased DDS claims-processing times and backlogs. Two-thirds of all DDS directors cited stressful workloads and noncompetitive salaries as major factors that contributed to turnover. Difficulties recruiting staff. More than three-quarters of all DDS directors reported difficulties in recruiting and hiring enough people who could become successful examiners. Of these directors, more than three-quarters reported that such difficulties contributed to decreased accuracy in disability decisions or to increases in job stress, claims- processing times, examiner caseload levels, backlogs, and turnover. More than half of all directors reported that state-imposed compensation limits contributed to these hiring difficulties, and more than a third of all directors attributed hiring difficulties to other state restrictions, such as hiring freezes. Gaps in key knowledge and skill areas. Nearly one-half of all DDS directors said that at least a quarter of their examiners need additional training in areas critical to disability decision-making, such as assessing symptoms and credibility of medical information, weighing medical opinions, and analyzing a person's ability to function. Over half of all directors cited factors related to high workload levels as obstacles to examiners receiving additional training. Lack of uniform staff standards. SSA has not used its authority to establish uniform human capital standards, such as minimum qualifications for examiners. Currently, requirements for new examiner hires vary substantially among the states. Over one-third of all DDSs can hire new examiners with either a high school diploma or less. Despite the workforce challenges facing them, a majority of DDSs do not conduct long-term, comprehensive workforce planning. Moreover, SSA's workforce efforts have not sufficiently addressed current and future DDS human capital challenges. SSA does not link its strategic objectives to a workforce plan that covers the very people who are essential to accomplishing those objectives. While acknowledging the difficulties SSA faces as a federal agency in addressing human capital issues in DDSs that report to 50 state governments, we have recommended that SSA take several steps to address DDS workforce challenges to help ensure that SSA has the workforce with the skills necessary for the Commissioner's strategy to be successful. These include developing a nationwide strategic workforce plan addressing issues such as turnover in the DDS workforce, gaps between current and required examiner skills, and qualifications for examiners. Future workload growth. According to SSA's strategic plan, the most significant external factor affecting SSA's ability to improve service to disability applicants is the expected dramatic growth in the number of applications needing to be processed. Between 2002 and 2012, SSA expects the DI rolls to grow by 35 percent, with applications rising as baby boomers enter their disability-prone years. Over the same period, more modest growth is expected in the SSI rolls. SSA estimates that, between 2002 and 2012, the number of SSI recipients with disabilities will rise by about 16 percent. The challenges SSA faces in keeping up with its workload have already forced agency officials to reduce efforts in some areas. For example, the Commissioner explained that in order to avoid increasing the time disability applicants have to wait for a decision, she chose to focus on processing new claims rather than keeping current with reviewing beneficiaries' cases to ensure they are still eligible for disability benefits, called Continuing Disability Reviews (CDRs). In fiscal year 2003, SSA did not keep current with the projected CDR caseload. The Commissioner says that this situation will continue in fiscal year 2004, despite the potential savings of $10 for every $1 invested in conducting CDRs. However, in reducing the focus on CDRs, not only is SSA forgoing cost savings, but the agency is also compromising the integrity of its disability programs by potentially paying benefits to disability beneficiaries who are no longer eligible to receive them. In closing, as stated earlier, SSA is at a crossroads and faces a number of challenges in its efforts to improve and reorient its disability determination process. Mr. Chairman, this concludes my statement. I would be pleased to answer any questions that you or other members of the subcommittee may have at this time. For further information regarding this testimony, please contact Robert E. Robertson, Director, Education, Workforce, and Income Security at (202) 512-7215, or Shelia Drake, Assistant Director, at (202) 512-7172. Michael Alexander, Barbara Bordelon, Kay Brown, Beverly Crawford, Marissa Jones, Valerie Melvin, Angela Miles, and Carol Dawn Petersen made key contributions to prior work covered by this testimony. Electronic Disability Claims Processing: SSA Needs to Address Risks Associated With Its Accelerated Systems Development Strategy. GAO-04- 466. Washington, D.C.: March 2004. Social Security Administration: Strategic Workforce Planning Needed to Address Human Capital Challenges Facing the Disability Determination Services. GAO-04-121. Washington, D.C.: January 27, 2004. SSA Disability Decision Making: Additional Steps Needed to Ensure Accuracy and Fairness of Decisions at the Hearings Level. GAO-04-14. Washington, D.C.: November 12, 2003. High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 1, 2003. Major Management Challenges and Program Risks: Social Security Administration. GAO-03-117. Washington, D.C.: January 2003. Social Security Disability: Disappointing Results From SSA's Efforts to Improve the Disability Claims Process Warrant Immediate Attention. GAO-02-322. Washington, D.C.: February 2002. Social Security Disability: Efforts to Improve Claims Process Have Fallen Short and Further Action is Needed. GAO-02-826T. Washington, D.C.: June 11, 2002. SSA Disability: Other Programs May Provide Lessons for Improving Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001. SSA Disability Redesign: Actions Needed to Enhance Future Progress. GAO/HEHS-99-25. Washington, D.C.: March 12, 1999. Social Security Disability: SSA Must Hold Itself Accountable for Continued Improvement in Decision-making. GAO/HEHS-97-102, Washington, D.C.: August 12, 1997. SSA Disability: Return-to-Work Strategies from Other Systems May Improve Federal Programs. GAO/HEHS-96-133. Washington, D.C.: July 11, 1996. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. 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Summary:
Delivering high-quality service to the public in the form of fair, timely, and consistent eligibility decisions for disability benefits is one of SSA's most pressing challenges. This testimony discusses (1) the difficulties SSA faces managing disability claims processing; (2) the outmoded concepts of SSA's disability program; and (3) the Commissioner's strategy for improving the disability process and the challenges it faces. SSA is at a crossroads in its efforts to improve and reorient its disability determination process. Although SSA has made some gains in the short term in improving the timeliness of its decisions, we found that SSA's disability decisions continue to take a long time to process. Despite some recent progress in improving the timeliness of disability decision-making, individuals who initially are denied disability benefits and who appeal still have to wait almost an additional year before a final hearing decision is made. In addition, evidence suggests that inconsistencies continue to exist between decisions made at the initial level and those made at the hearings level. Also, SSA's disability programs are grounded in an outdated concept of disability that has not kept up with medical advances and economic and social changes that have redefined the relationship between impairment and the ability to work. Furthermore, employment assistance that could allow claimants to stay in the workforce or return to work--and thus to potentially remain off the disability rolls--is not offered through DI or SSI until after a claimant has gone through a lengthy determination process and has proven his or her inability to work. Further, the Commissioner has developed a strategy to improve the disability determination process, including the timeliness and consistency of decisions. While this strategy appears promising, we believe that several key challenges have the potential to hinder its progress, including risks to successfully implementing a new electronic disability folder and automated case processing systems; human capital problems, such as high turnover, recruiting difficulties, and gaps in key knowledge and skills among disability examiners; and an expected dramatic growth in workload.