The Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs are the nation’s two largest federal programs providing cash payments to people with severe long-term disabilities. Between 1985 and 1995, the number of DI recipients increased almost 50 percent to about 5.7 million, and the number of disabled SSI recipients increased from 2.5 million to 4.9 million. In fiscal year 1995, the Social Security Administration (SSA) distributed over $61 billion in disability benefits for its DI and SSI programs. Over the past decade, SSA’s Office of Hearings and Appeals (OHA) has experienced unprecedented growth in both its backlog of DI and SSI hearings requests and the time it takes to process a disability appeal. While the agency has undertaken several efforts over the years to address the backlog issue, workload increases and long-standing problems associated with the program have impeded their success. The rapid growth in OHA’s pending case backlog and longer case-processing times have caused hardship for those disability claimants who are unable to work or to afford needed medical treatment while awaiting a final decision. On average, it takes more than a year to receive a final OHA decision from the time a claimant first files an application of disability. This extended waiting period has raised congressional concerns about SSA’s disability decision-making process. The DI program, enacted in 1956 under title II of the Social Security Act, provides monthly cash insurance benefits to insured severely disabled workers. The SSI program, enacted in 1972 under title XVI, provides monthly cash payments to aged, blind, or disabled people whose income and resources fall below a certain threshold. The Social Security Act defines disability under both programs as an inability to engage in substantial gainful activity by reason of a severe physical or mental impairment. The impairment must be medically determinable and expected to last at least a year or result in death. Claimants file an application for disability benefits—both DI and SSI—with one of SSA’s over 1,300 field offices. Applications, along with supporting medical evidence, are then forwarded to the appropriate state disability determination service (DDS). SSA arranges with state DDSs to make the initial medical determination of eligibility in accordance with SSA’s policies and procedures. Claimants who are dissatisfied with the initial DDS determination may request a “reconsideration” of the claim within 60 days of their notice of decision. During the reconsideration review, all evidence is reevaluated by DDS personnel who were not involved in the original decision, and a new, independent decision is made on the merits of the case. Claimants who disagree with the reconsideration decision have the right to a hearing before an administrative law judge (ALJ) in SSA’s OHA. A request for hearing may be filed by mail or telephone, or in person at either an SSA field office or an OHA hearing office. Upon receipt of a hearing request, hearing office support staff review and prepare the case file for hearing. If necessary, staff may recommend to the ALJ that additional medical evidence be developed before holding a hearing. The hearing is generally the first time in the disability determination process that a claimant has the opportunity for a face-to-face meeting with a decisionmaker. At the hearing, the claimant and witnesses—who may include medical or vocational experts—provide testimony. The ALJ inquires into the issues, receives relevant documents into evidence, and allows the claimant or the claimant’s representative to present arguments and examine witnesses. If necessary, the ALJ may further update the evidence after the hearing. When this process is completed, the ALJ issues a decision based on his or her assessment of the evidence in the case. Claimants who disagree with an ALJ denial are given another 60 days to request that the case be reviewed by SSA’s Appeals Council. A request for review must be filed through either a field office or a hearing office or directly with the Appeals Council. The Appeals Council may dismiss the request, affirm an ALJ’s decision, remand the case to an ALJ for further action, or issue a new decision. To determine the appropriate action, Council members, assisted by a large staff of analysts, decide whether the decision was supported by the evidence. The Appeals Council’s decision—or the decision of the ALJ, if the Appeals Council dismisses the request—becomes SSA’s final decision. After all SSA administrative remedies are exhausted, a claimant has further appeal rights within the federal court system, up to and including the U.S. Supreme Court. (See fig. 1.1.) The Administrative Procedure Act (APA), enacted by the Congress in 1946, protects the decisional independence of ALJs. To ensure ALJ independence, APA grants ALJs certain specific exemptions from normal management controls. For example, federal agencies may not apply performance appraisal requirements to ALJs and may remove ALJs only for “good cause,” as determined by the Merit Systems Protection Board. These safeguards were put in place to ensure that ALJ judgments were independent and that ALJs would not be paid, promoted, or discharged arbitrarily or for political reasons by the agency. However, ALJ independence is not unlimited. Because they are SSA employees, ALJs are subject to agency rules and regulations, and they must apply even those with which they disagree. Further, ALJ independence does not negate SSA’s authority to implement procedures for supervising and reviewing the ALJ decision-making process to ensure that agency policies and procedures are followed. The role of ALJs at SSA differs from that of other ALJs in the federal government in that SSA ALJs are responsible for both developing the hearings evidence and deciding the case. In other executive branch agencies, the responsibility for developing evidence is left to the claimants and their representatives. SSA hearings also differ from those of other executive branch agencies in that they are informal, nonadversarial proceedings; that is, SSA does not present a case challenging a claimant’s disability claim. Most other executive branch ALJs hold hearings that are formal, adversarial, and similar to a trial. During such hearings, attorneys on both sides present witnesses and documentary evidence and cross-examine witnesses in order to present the facts in a light favorable to their case. OHA headquarters is located in Falls Church, Virginia, apart from SSA headquarters in Baltimore. OHA operates 10 regional offices, 132 hearing offices, 3 class action management centers, and 5 word processing centers. Of OHA’s 7,100 employees, about 1,000 are located in Falls Church. OHA is headed by the Associate Commissioner for Hearings and Appeals, who is responsible for administering the hearings and appeals process and reports directly to SSA’s Deputy Commissioner for Programs and Policy. (See app. I for an SSA organization chart and app. II for an OHA organization chart). OHA’s Chief ALJ reports directly to the Associate Commissioner for Hearings and Appeals and is responsible for managing about 5,000 hearing office employees located in 10 regions. Each OHA region is headed by a regional chief ALJ (RCALJ), who is responsible for the operations of hearing offices in his or her respective region. In every hearing office, a hearing office chief ALJ (HOCALJ) oversees day-to-day office operations and provides guidance to ALJs, professional staff, and support personnel. Due to the rapid growth in OHA backlogs and case-processing times and their impact on public service, in July 1994 the former Chairman, and now Ranking Minority Member, of the House Committee on Ways and Means asked us to examine SSA’s efforts to address the problem. More specifically, the objectives of our assignment were to determine (1) those factors contributing to the growth in the backlog of appealed cases, (2) what steps SSA has taken in the past to address this backlog problem, (3) what SSA is currently doing to reduce the appellate backlog, and (4) what needs to be done in the long term to make the disability appeals process more timely and efficient. In conducting our review, we analyzed data on OHA workloads, backlogs, and processing times; reviewed over 50 government and nongovernment studies conducted over the past 20 years on the disability determination and appeals process (see app. IV); examined SSA’s previous initiatives to address OHA backlogs and improve the hearings and appeals process; and reviewed SSA’s Short-Term Disability Plan (STDP) and the agency’s longer-term Plan for a New Disability Claim Process (redesign plan). To supplement information obtained from the various reports and initiatives outlined above, we interviewed key SSA and OHA headquarters and regional management officials, as well as managers responsible for the development and implementation of SSA’s STDP and redesign plan; obtained the views of hearing office officials—chief ALJs, supervisory staff-attorneys, and hearing office managers—regarding SSA’s previous and current efforts to improve program efficiency and address OHA’s pending case backlog; and interviewed officials at state disability determination services in Florida, Georgia, Massachusetts, New York, and Texas to obtain their views on the status and expected impacts of the STDP initiatives. Our review was performed at SSA and OHA headquarters; four SSA regions—Atlanta, Boston, Dallas, and New York; and five OHA regions—Atlanta, Boston, Dallas, New York, and Philadelphia. By examining workload and performance indicators, we judgmentally selected regions and OHA hearing offices that would provide us with varied workload levels as well as varied experiences in managing their workloads. The selected offices also provided us with some geographical dispersion. We conducted our review between July 1994 and February 1996 in accordance with generally accepted government auditing standards. Over the last decade, OHA’s backlog of pending cases and case-processing times have grown rapidly, and claimants are waiting longer for disability decisions. SSA has acknowledged that current workload levels have placed the disability program under increasing public and congressional pressure, and that aggressive measures are necessary to address this “crisis” situation. The growth in OHA’s backlog of cases has been caused, in part, by the rapid surge in disability program applications and ever-increasing appeals to OHA. But backlog growth has also resulted because SSA has not adequately addressed several long-standing problems associated with its disability programs. These problems have been identified in numerous internal and external studies conducted over the last 2 decades. We reviewed these studies and found that SSA’s key long-standing problems can be classified into four basic categories: multiple levels of claims development and decision-making, fragmented program accountability, decisional disparities between DDS and OHA adjudicators, and SSA’s failure to consistently define and communicate its management authority over the ALJs. The number of disabled beneficiaries has steadily increased over the last decade. In 1985, there were 3.9 million DI recipients. In 1995, almost 5.7 million disabled workers and their dependents received more than $40 billion in DI benefits. Most of this growth occurred in the last 3 years, when 1.1 million beneficiaries were added to the rolls. The SSI program grew even more over the last decade, when the number of SSI recipients increased from 2.5 million to 4.9 million. Many factors have contributed to the number of people seeking disability benefits and the subsequent growth in the OHA workload, including the expansion of DI eligibility criteria, program outreach efforts, and poor economic conditions. Between 1985 and 1995, initial DI and SSI applications increased by 57 percent, from 1.6 million to 2.5 million. DDS denial rates for initial applications also increased during the same period, further enlarging the pool of applicants who could request an appeal. The number of requests for OHA hearings increased by 140 percent, from 245,000 in 1985 to 589,000 in 1995. As we have reported previously, the rising rates at which applications for disability benefits and accompanying appeals are being filed have caused tremendous workload pressures and processing delays for OHA. Between 1985 and 1995, OHA’s pending case backlog grew from 107,000 to about 548,000 cases. In addition, the average processing time for cases appealed to OHA—measured from the time a request for hearing is filed by the claimant—increased 110 percent, from 167 days to 350 days. Moreover, aged cases (those pending 270 days or more) increased from 5 percent of pending cases to 39 percent during the same period. Some applicants who have been awarded benefits on appeal to OHA after twice being denied by DDSs have waited more than a year after first applying. Table 2.1 shows the rapid growth in OHA’s workload, pending case backlog, and the time it takes to process an appealed case. In addition to the dramatic increases in workload discussed above, long-standing problems associated with the disability determination and appeals process have contributed to the backlog growth and increased case-processing time at OHA. In 1992, as part of its efforts to develop a number of strategic priority goals, SSA reviewed numerous internal and external studies of the disability determination and appeals process, several of which were completed more than 20 years ago. The agency acknowledged that, despite rapid workload increases and enormous changes in available technology, demographics, and the types of disabilities qualifying for benefits, disability processes had remained basically the same since the DI program was established in the 1950s. We also reviewed the above studies, and several other government and nongovernment reviews conducted over the last several decades, and categorized the key long-standing problems affecting SSA’s disability programs as (1) multiple levels of claims development and decision-making, (2) fragmented accountability for claims processing, (3) decisional disparities between DDS and OHA adjudicators, and (4) SSA’s failure to consistently define and communicate its management authority over the ALJs. The relationship of these problems to OHA’s pending case backlog and increased case-processing time is discussed below. SSA’s internal planning documents show that multiple levels of claims development and decision-making throughout the disability program have negatively affected OHA’s ability to provide timely and efficient service to all claimants who appeal. Within SSA, a denied disability claim may pass through as many as four decision-making levels (initial, reconsideration, ALJ hearing, and Appeals Council) before a final decision is rendered. As a claim moves from one level to the next it is readjudicated, and multistep procedures for review, evidence collection, and decision-making are employed. In addition to delays associated with multiple layers of review and decision-making, delays also occur as a claim moves from one employee or facility to another and waits at each employee’s desk to be processed. As workloads have grown, the amount of time a claim waits at each processing point has increased. Since 1985, average case-processing time at OHA has grown from 167 days to about 350 days. Following a 1992 review of OHA operations, SSA found that claimants can wait as long as 550 days to receive a hearing decision notice. The same report noted that, in the case of one claim, only 4 days of the 550 involved actual work on the claim. Some of the delay is necessary, however, because of scheduling and due process notice requirements. Other delays are often claimant initiated and may lead to hearing postponements or the need to further develop the evidentiary record. SSA has acknowledged that no single organizational component is accountable for the overall efficiency of disability claims processing, and that fragmentation issues have negatively affected the efficiency of the process. Currently, several organizational components are involved in disability claims processing—field offices, DDSs, hearing offices, and the Appeals Council—and each is accountable and responsible for reaching its own goals without responsibility for the overall disability claims process. SSA’s own internal reviews have found that poor coordination among components has reinforced a lack of understanding among OHA staff of the roles and responsibilities of other components and created the perception that no one is in charge of the disability programs. Fragmentation in the disability process is further evidenced by OHA’s organizational and operational separation from the rest of SSA. OHA’s headquarters is located in Falls Church, Virginia, while SSA’s headquarters is located in Baltimore. OHA regional staff are also separated from SSA regional staff. SSA’s own reviews have found that organizational fragmentation has led to a lack of interaction between OHA and the rest of SSA and fostered a “stepchild” mentality among many OHA employees. For example, SSA found that OHA staff had little sense of belonging to the wider SSA and were unfamiliar with its organizational structure, philosophy, and goals. This mentality has affected SSA’s ability to implement operational plans for the disability programs. Finally, SSA lacks a common automated database for managing claims as they move through the various components involved in the disability determination process. Consequently, as a claim moves from one organizational level to another, some data must be manually reentered into the computer by the various components, and the status of disability claims is not adequately recorded for reference by others. Outdated manual processes and fragmented automated systems have made improving the disability determination and appeals process difficult. In 1994, ALJs allowed benefits in about 75 percent of the cases they decided. By awarding a relatively high percentage of cases that DDSs have previously denied, ALJs may encourage more appeals to OHA. While all of the reasons for decisional disparities are not conclusively known, many have hypothesized that possible causes include the de novo hearings process, which allows claimants to submit additional evidence upon appeal; face-to-face interviews between ALJs and claimants; decisional errors by both DDSs and ALJs; and different applications of disability decisional policies at the DDS and ALJ levels. Some decisional disparities may be attributable to OHA’s de novo hearings process. Under this process, the ALJ does not review the DDS’ decision or rule on its adequacy. Instead, the ALJ conducts what is called a de novo hearing in which evidence is considered and weighed again, and the ALJ issues a decision based on his or her own findings. With the de novo hearing, claimants may submit new evidence to the ALJ that may not have been available at the time of the DDS review and decision. SSA’s reviews have found that more than a quarter of ALJ awards are based on such new evidence, which may include claimant testimony that their condition has worsened since the original DDS review. Thus, by design, some differences in decisional results are built into the system. Also, face-to-face interviews between ALJs and claimants may lead to disparate decisions. The ALJ hearing is generally the first time that claimants have the opportunity for a meeting with a decisionmaker. Unlike DDSs, which perform a paper review of the file to determine disability, ALJs personally interview claimants concerning their disability claim. A 1982 SSA study reported that a personal appearance by claimants during the hearing increased the likelihood of an ALJ allowance. In 1989, we reported that hearings provide ALJs with the opportunity to extensively question claimants and that, as a result, ALJs often reverse DDS decisions because they determine that claimants are more limited in their activities than DDSs had perceived. Errors made by both DDS staff and ALJs may also contribute to disparities. In a 1994 SSA study, a group of medical consultants and disability examiners found a 29-percent DDS error rate for cases appealed to OHA. In the same study, a group of ALJs found a 19-percent error rate in ALJ allowances. These relatively high rates of error suggest that obtaining consistency across the two levels may be difficult. Finally, some disparities may be attributable to SSA’s differing mechanisms for providing decisional guidance to DDSs and ALJs. To determine disability, SSA has a single standard composed of various statutes, regulations, Social Security Rulings, and court rulings governing eligibility. DDS decisionmakers are required to use SSA’s Program Operations Manual System (POMS), which is SSA’s detailed interpretation of the standard. ALJs, on the other hand, are not required to use POMS, which provides little decisional latitude. Instead, they base their decisions on their own interpretation of the statutes, regulations, Social Security Rulings, and court rulings. To an undetermined extent, different interpretations of the same disability standard may cause DDSs and ALJs to reach disparate decisions on the same claim. APA protects ALJ decisional independence. Although ALJs are SSA employees, APA prohibits SSA management from taking actions that might interfere with an ALJ’s ability to conduct full and impartial hearings. However, SSA has not consistently defined and communicated to regional and hearing office management the types of management actions that are legally permissible for managing ALJs without hindering judicial independence. SSA’s 1992 Office of Workforce Analysis report found that many ALJs are operating under the belief that they are exempted by APA from nearly all management control. As a result, SSA has experienced numerous legal and operational challenges to its efforts to better manage the appeals process. SSA management has also been reluctant to exercise its management authority over ALJs for fear it will violate APA. The APA issue continues to be important today, because the success of the redesign plan may be affected by the degree of ALJ cooperation and the extent to which SSA can mandate ALJ compliance with the plan’s initiatives. In 1989, we reported that, since the 1970s, ALJs had successfully opposed management initiatives to increase their productivity on the grounds that such SSA actions interfered with their decisional independence. Many ALJs believe they need to closely protect their judicial independence because of what they perceive as past excesses of agency authority. For example, in 1977 several ALJs sued SSA when it attempted to impose case production quotas on them. The ALJs alleged that SSA’s actions violated their decisional independence under APA and the Fifth Amendment of the Constitution. SSA ultimately settled the lawsuit, rescinded its policy of establishing quotas for ALJ dispositions, and revised transfer and training policies to remove any mention of production figures. In the early 1980s, SSA began targeting the decisions of ALJs with high award rates for special review. According to SSA, these reviews were conducted in response to congressional concerns that ALJs with high allowance rates could be more prone to errors. As a result of these reviews, some ALJs were to be subject to retraining and possible disciplinary actions. The initiative prompted a lawsuit by the Association of Administrative Law Judges, which claimed that the practice of targeting selected ALJs violated their decisional independence. Before the court’s ruling, SSA entered into a settlement agreement with the ALJs and rescinded its practice of targeting individual decisionmakers. Although APA is an important safeguard of due process, SSA’s own studies confirm that, in many instances, the act has been interpreted in a way that has impeded SSA’s ability to effectively manage day-to-day hearing office work and to implement uniform policies and procedures. For example, SSA’s 1992 Office of Workforce Analysis report noted that an “extreme” interpretation of APA by many ALJs had led to a lack of clear lines of management authority within hearing offices and impeded effective service delivery. SSA also found that hearing offices lacked procedural consistency and effective mechanisms to share “best practices,” because many ALJs believed judicial independence entitled them to establish their own “unique” work flow procedures. The report also noted that inconsistent procedures resulted in significant variations in the content and organization of hearing office files and created obvious problems when case files were transferred among offices to balance OHA’s workloads. SSA also reported a wide variety of organizational configurations among hearing offices, despite an agency effort to actively encourage “pooling” hearing office resources to increase efficiency and distribute work more evenly. Many ALJs opposed the pooling initiative, preferring instead a “unit” system in which each ALJ had his or her own personal staff. SSA reported that several ALJs had rejected the pooling configuration despite the agency’s findings that the “unit” system unnecessarily increased case-processing time. However, the report did not include any directives or recommendations for mandating ALJ compliance with SSA’s pooling efforts. In an early 1990s plan to improve the disability appeals process, SSA noted that significant ambiguities existed regarding the limits APA imposed on SSA management practices and that APA issues underlie many of the problems affecting the disability program’s variations in hearing office procedures, work flow, and workload management. In April 1995, SSA once again acknowledged the constraints APA imposed on its ability to manage and called for better clarifying APA principles. Our most recent field work confirmed that SSA still has not consistently defined and communicated the types of management actions that are legally permissible under APA. During our review, a number of SSA and OHA managers and staff told us that despite SSA’s recognition of the problems associated with ensuring ALJ compliance with agency initiatives, it has not resolved the issue. Staff commonly complained that ALJs often used APA protections to oppose initiatives they did not agree with and conceded that managers were reluctant to mandate ALJ compliance for fear of violating the act. They also told us that ALJ opposition to prior agency initiatives to improve the appeals process has contributed to the growth in OHA’s backlog of cases and that reducing the backlog will be difficult unless SSA addresses the APA issue. Officials in SSA’s Office of General Counsel also noted that while SSA is aware of the management tools available to it, there have been inconsistencies in the way this information has been communicated agencywide. In their opinion, SSA needs to develop a consistent APA message and thoroughly communicate it to both SSA and OHA field personnel. During the past decade, OHA’s backlog of pending cases continued to grow, even though SSA hired more professional and support personnel and increased its reliance on overtime to service the appeals workload. In 1994, SSA initiated both short- and long-term plans in response to the continued rapid growth in OHA’s pending case backlog and increasing criticism of SSA’s ability to effectively manage the DI and SSI caseloads. STDP represents SSA’s near-term effort to reduce OHA’s backlog of pending cases and improve case-processing times. The plan does not directly address the long-standing problems affecting SSA’s disability appeals process but instead relies on temporary “emergency” measures to alleviate workload pressures at OHA until SSA’s longer-term strategy is under way. Although STDP’s initiatives are now under way, implementation delays and the limited impact of key initiatives may impede SSA’s short-term efforts to achieve its backlog reduction goals. SSA’s second initiative—its Plan for a New Disability Claim Process, or redesign plan—when fully implemented, is intended to result in significant long-term improvements in the quality, accuracy, speed, and efficiency of disability claims processes. The plan is scheduled to be implemented in phases that will be completed sometime in fiscal year 2000. The redesign effort, which provides a framework for radically reengineering the entire disability process, is aimed at addressing three of the four long-standing problems we identified: multiple levels of claims development and decision-making, fragmented program accountability, and inconsistent decisions between DDS and OHA adjudicators. While SSA believes the redesign plan will eventually address many systemic program problems, the plan was still in the early implementation and testing stages at the time of our review. More importantly, the redesign plan does not include an initiative to clearly and consistently define and communicate SSA’s management authority over the ALJs. APA constraints have been a source of considerable management difficulties for many years, and if SSA does not act to address this issue, it may be hindered in its current efforts to reduce OHA’s pending case backlog and improve case-processing times. Over the last decade, SSA attempted to address the growth in OHA’s backlog of pending cases. Between 1985 and 1995, SSA increased field office ALJ staffing levels by 49 percent and support staff by about 45 percent (see table 3.1). From 1990 to 1995, the agency also increased its use of overtime more than 850 percent, from about 74,000 hours to 713,000 hours. Although the number of cases OHA processed annually increased from 246,000 in 1985 to about 527,000 in 1995, the growth in OHA’s workload during that time outpaced its case-processing capacity. In addition to devoting more staff resources and overtime to the backlog crisis, SSA initiated at least three major studies between 1990 and 1992 to identify issues affecting the performance of its disability programs. These reviews resulted in recommendations for improving program efficiency through such actions as standardizing some hearing office procedures, sharing agency “best practices” among offices, and improving access to training and automation for OHA personnel. During our field work, a number of SSA and OHA officials told us that prior agency initiatives were limited in their effectiveness because SSA focused primarily on minor process changes and applying additional resources to the disability program rather than addressing long-standing, systemic problems central to the backlog of cases awaiting processing. Several officials also noted that previous initiatives for improving the appeals process were limited in their effectiveness because SSA was reluctant to mandate ALJ compliance with them. SSA issued its STDP in 1994 in order to make some immediate progress toward reducing OHA’s backlog of pending cases. STDP includes 19 initiatives to expedite the disability determination process and reduce OHA’s pending case workload from its October 1994 level of 488,000 to 375,000 cases by December 1996. The plan’s goals are based primarily on two key initiatives that expand OHA prehearing conferencing proceedings and SSA regional screening unit activities. These initiatives target certain appealed cases for review and possible allowance by OHA attorneys or SSA regional staff before the ALJ hearing stage is reached. STDP relies heavily on the temporary reallocation of program resources to help OHA prepare cases and draft disability decisions. Under the plan, 150 OHA and SSA staff have been detailed to help prepare cases for hearings. Case preparation includes assembling and reorganizing claimant files, date stamping exhibits, and preparing evidence lists. Reallocating resources is intended to ensure that case files are organized in a way that facilitates the processing of disability cases. An additional 150 nonhearing office personnel have also been detailed to help draft hearing decisions. To further improve decision-writing capacity, 800 additional computers have been provided for use by OHA personnel. This influx of computers is intended to reduce OHA’s current dependence on manual processes and support personnel during the preparation of hearing decisions and to limit the movement of documents back and forth between staff for proofreading and editing. The initiative expected to have the greatest impact on reducing OHA’s backlog of cases involves the expansion of OHA prehearing conferencing. However, implementation delays associated with prehearing conferencing have affected SSA’s ability to achieve STDP’s goals. Before STDP, prehearing conferencing involved the review of certain appealed cases by OHA staff attorneys and paralegal specialists in the various OHA regions. These individuals conferred with claimant representatives after reviewing cases, conducted limited case development, and drafted decisions to be reviewed and approved by ALJs. With expanded prehearing conferencing under STDP, OHA attorneys have been given quasi-judicial powers, such as the authority to issue allowance decisions for certain appealed cases without ALJ involvement or approval. Under the initiative, OHA attorneys now engage in extensive development of the case record, conduct conferences with claimant representatives and sources of medical and vocational evidence, and are empowered to issue allowance decisions. If they cannot allow the claim on the basis of their review of the evidence, it is scheduled for hearing before an ALJ. OHA guidelines for prehearing conferencing give 595 senior attorneys the authority to issue allowance decisions. To fully implement the initiative, SSA had to pursue a regulatory change giving OHA staff attorneys the authority to decide certain appealed cases that were formerly limited to ALJ jurisdiction. But the process of defining the specific duties and responsibilities these attorneys would have under STDP was lengthy, and implementation did not begin until July 1995, or almost 6 months after the projected start date. Delays also occurred with other initiatives designed to support prehearing conferencing. For example, backlog reduction goals for prehearing conferencing are partly dependent upon STDP initiatives to provide more computers and staff to assist OHA with case preparation and decision-writing. But due to protracted collective bargaining negotiations with SSA’s union and other difficulties, full implementation of these initiatives was delayed for several months. Through expanded prehearing conferencing, SSA had originally expected to process 98,000 additional cases by December 1995 and 126,000 more by December 1996. However, 1995 goals were not achieved, and senior staff attorneys issued only 22,271 additional allowance decisions nationwide through February 1996. A second major initiative under STDP is intended to further reduce the flow of cases from DDSs to OHA hearing offices by increasing the effectiveness of SSA regional screening units. However, these units have not performed as expected. Before STDP, SSA established screening units in each region to review DDS reconsideration denials. Before an ALJ hearing occurred, screening unit examiners reviewed these cases to determine if an allowance could be made on the basis of evidence in the case file. Although screening unit allowances required ALJ approval, they expedited the decision-making process and prevented many cases from going into OHA’s hearings backlog. Under STDP, OHA staff attorneys have been assigned to all SSA regional screening units to dispose of more appealed claims before they reach an ALJ hearing. The decision to add OHA attorneys was based upon the experiences of SSA’s Boston and New York regional offices, which had tested the use of OHA attorneys in screening units and were obtaining higher allowance rates. According to SSA, the opportunity for screening unit examiners to discuss issues with an attorney gives examiners helpful insight into the intent of the POMS requirements and enables them to reverse incorrect DDS reconsideration denials earlier in the process. Most cases reviewed by the screening units are selected on the basis of computer-generated profiles that identify disability claims likely to be incorrectly denied by DDSs. SSA officials contend that “profiling” minimizes the risk of making incorrect allowances. However, to increase screening unit outputs, the case selection criteria were expanded in January 1995 to include all hearing requests accompanied by any additional evidence, even if the case did not meet the profile. Consequently, screening units are now reviewing some cases that are not necessarily error prone. Screening units, like prehearing conferencing, are not achieving STDP’s allowance goals. Before STDP, existing screening units were expected to allow about 20,000 cases per year. With the introduction of OHA senior attorneys, SSA expected to allow 38,000 cases annually, or about 3,167 cases per month. However, screening units had allowed a total of only 28,376 cases through February 1996. Only two of SSA’s screening units—Boston and New York—are allowing cases at a level that may facilitate reaching STDP’s 1996 goals. SSA officials overseeing the initiative told us that regional differences in allowances were primarily due to the reluctance of some hearing offices to provide sufficient staff and senior attorney support to the regional screening units. Despite slippage in the implementation of STDP’s major initiatives, SSA management has not revised its original backlog reduction goals or the timeframes for accomplishing them. As a result, a number of SSA and OHA personnel involved in the design and implementation of STDP are concerned that the plan may have unintended negative impacts. When STDP was announced in November 1994, it called for reducing OHA’s backlog from 488,000 to 375,000 (113,000 cases) by December 1996. However, by the end of September 1995, OHA’s backlog had increased to 548,000 cases. To achieve the plan’s original goal of reducing pending cases to 375,000, SSA would have to increase its backlog reduction target from the original 113,000 cases to about 173,000 during the remaining timeframe. Many SSA and OHA officials have expressed concern that the growth in OHA’s pending case backlog over the last several months, combined with STDP’s aggressive goals, may create pressure to inappropriately allow cases. As a means of determining STDP’s impact on OHA decision-making, SSA management is closely monitoring and tracking OHA allowance rates. Finally, the prehearing conferencing initiative under STDP has diverted almost 600 attorneys from their regular decision-writing duties. SSA intends to offset this loss in decision-writing resources with 150 temporary detailees from various components and increased overtime for support and professional staff. However, many SSA and OHA officials are concerned that the number of detailees is insufficient to offset the loss of experienced decision-writers. Unlike STDP, the redesign plan includes initiatives that SSA believes will address some of the program’s long-standing problems: multiple levels of claims development and decision-making, fragmented program accountability, and decisional disparities between DDS and OHA adjudicators. In announcing the plan in September 1994, SSA acknowledged that a longer-term strategy was needed to address the systemic problems placing the DI and SSI programs under increasing stress. The agency also noted that, to substantially improve the level of service to claimants, incremental improvements to the process were no longer feasible. At the time of our review, SSA was in the early implementation planning and testing stages of the redesign effort, and none of the initiatives had been fully implemented. To address the problem of multiple levels of claims development and decision-making, the redesign plan includes initiatives to eliminate both DDS reconsideration and Appeals Council reviews. In place of the reconsideration review, SSA plans to establish an Adjudication Officer (AO) position as the focal point for prehearing activities. The AO’s duties will include (1) identifying the specific issues in dispute, (2) determining if additional evidence development is needed to support a claim, (3) reaching agreement with claimants or their representatives on the issues not in dispute, and (4) deciding appealed claims on the basis of the evidence developed. By focusing prehearing responsibilities on a single adjudicator, SSA expects that the time needed to ensure the completeness of the record will be substantially reduced and that more appealed cases will be resolved without ALJ involvement. The redesign plan also includes initiatives that SSA believes will address the problem of fragmented program accountability. To improve overall accountability for claims processing, SSA plans to revise its management information processes to better assess the agency’s service to claimants. Information regarding staff actions at each step of the process is to be made available to all components, and a single measure of time from the claimant’s first point of contact with SSA until final notification of a decision will be developed. SSA has proposed developing or revisiting other measures related to cost, productivity, pending workload, and accuracy to better assess the performance of each participant, and the agency as a whole. The plan also calls for installing a common database for claims control and management purposes, rather than relying on the currently fragmented automated systems. To address organizational fragmentation issues, SSA plans to emphasize accountability and teamwork throughout the disability claim process. At the initial DDS level, a Disability Claims Manager position will be established as the focal point for moving the claim through the earliest stages. For OHA’s prehearing activities, the AO position will be the responsible agent. At the hearing level, the ALJ will be the responsible official. SSA plans to hold these individuals accountable for their part of the disability determination and appeals process and require them to work with other components to ensure timely case processing. The disability redesign plan also includes several initiatives to reduce decisional disparities between DDS and OHA decisionmakers by (1) providing an opportunity for the initial decisionmaker to meet claimants face-to-face, (2) improving SSA’s quality assurance processes, and (3) unifying policy guidance at both the DDS and ALJ levels. Under the redesigned process, claimants will be provided the opportunity to meet with a DDS decisionmaker before the claim is initially decided. This meeting is intended to ensure that all available evidence has been presented and that claimants understand what evidence will be considered in reaching the decision. SSA also plans to improve its quality assurance processes by extending such reviews to all levels of the adjudicatory process and using the results to identify areas for improving agency policies and training. To further ensure consistent standards for decision-making, the redesign plan includes an initiative to develop a single presentation of all substantive policies used in the determination of disability. Both DDS and ALJ adjudicators will be required to follow these same policies. SSA plans to provide policy clarifications and nationwide training to both DDS and ALJ decisionmakers to facilitate the use of the new policies. However, SSA has not proposed any changes to the de novo hearings process and the ability of claimants to submit new medical evidence upon appeal. According to SSA, revising these processes would require a legislative change, which was not within the scope of the plan at its initial stage. SSA’s disability redesign plan includes initiatives that SSA believes will address several of the long-standing problems affecting program performance, but the plan does not specifically address how SSA will consistently define and communicate its management authority over the ALJs. Although APA is an important safeguard of due process, SSA has not consistently defined and communicated to its field staff the actions that can be legally employed by managers to increase program efficiency without hindering judicial independence. For years, SSA has acknowledged the management difficulties associated with the APA issue, and the need to develop specific guidelines of allowed and prohibited practices that are fully understood by everyone involved. More recently, the Director of SSA’s redesign effort again acknowledged that APA procedures and mandates should be better clarified and refined to fit SSA’s mass adjudication approach to its disability programs. SSA’s disability programs have been the subject of numerous internal and external studies over the last 2 decades. Despite these studies and continuing agency efforts to improve the disability determination and appeals process, OHA’s case backlog has reached crisis levels. In an environment of unprecedented disability program growth, SSA has both a short- and a long-term approach to better service its DI and SSI workloads. In the near term, STDP is designed to expedite the disability appeals process and reduce OHA’s pending case backlog to a manageable level. In developing its long-term Plan for a New Disability Claim Process, SSA has also acknowledged the need for the agency to move ahead with more dramatic program changes. Considering the current backlog crisis at OHA, STDP’s approach for temporarily reducing OHA backlogs is reasonable in that it establishes specific goals and timeframes for reducing OHA backlogs. It also represents an SSA-wide commitment involving the reallocation of resources from both within and outside OHA, and coordination and cooperation among all organizational components involved in the adjudication process. Disposing of cases earlier in the decisional process may also be less costly and time consuming than allowing them to reach the ALJ hearing stage. Although backlog reduction efforts are receiving greater agencywide emphasis under STDP, implementation delays associated with prehearing conferencing and the limited impact of regional screening have adversely affected SSA’s ability to achieve the plan’s backlog reduction goals. Many OHA and SSA staff are also concerned that the continued growth in OHA’s pending case backlog and SSA’s reluctance to adjust the plan’s goals may affect the quality of decisions and lead to increased pressure to inappropriately award cases. To ensure decisional accuracy, SSA intends to monitor the quality of STDP decisions and the overall allowance rate for its disability programs. The agency’s reliance on computer-generated profiles to select certain error-prone cases for review under STDP is also intended to reduce the risk of inappropriate decisions. However, the screening unit case selection criteria have been expanded to include some nonprofiled cases, and prehearing conferencing regulations do not preclude OHA senior attorneys from reviewing nonprofiled cases in the future. Although the redesign plan includes initiatives that SSA believes will address several long-standing program problems, it does not specifically address the need to consistently define and communicate the types of management actions SSA can legally employ to better manage ALJ activities. For years, SSA has recognized that ALJ management issues underlie many of the problems affecting its disability programs, and that it should better define and thoroughly communicate a consistent APA message to field staff. We believe that addressing the APA issue will be a challenge for SSA. However, it is a challenge that must be overcome if SSA is to resolve the current disability backlog crisis and achieve its long-term service delivery goals. In providing comments on this report, SSA identified a number of actions that it has taken since 1992 to streamline and expedite the processing of hearing workloads. These actions include developing a plan to standardize disability claim file preparation, creating a Practices and Procedures Exchange Workgroup within OHA, suspending the preparation of medical summaries, standardizing decision-writing instructions, and encouraging ALJs to write some of their own decisions. However, the agency did not provide data regarding the impact of these initiatives on reducing OHA’s backlog of pending cases. Our data show that, despite SSA’s efforts, OHA’s backlog has continued to grow since 1992. In regard to STDP, SSA acknowledged that, because of increases in hearing receipt projections and the pace of STDP implementation, the plan’s backlog reduction goals would not be met by December 1996. However, SSA officials stated that a shortfall in screening unit allowances would have only a limited impact on meeting STDP’s overall goals. We disagree with SSA’s assessment, since SSA originally intended that the screening units would be second only to prehearing conferencing in terms of impact and would result in 38,000 additional allowances through December 1996. Not meeting screening unit allowance targets will, in our opinion, hinder OHA’s backlog reduction efforts. SSA did not provide us with revised backlog reduction goals for STDP or any documentation indicating that they would be changed in the near future. Regarding our concerns that pressure to meet STDP’s goals may have unintended effects, SSA has advised its adjudicators that STDP should not be interpreted to inappropriately allow cases. SSA also noted that through the deployment of resources not previously devoted to hearing office workloads, the decision-writing pending workload has been reduced from over 43,000 to about 28,000 cases. Finally, SSA agreed that clarifying the scope of its authority over ALJs under APA would be appropriate and stated it is developing such a document. However, the agency questioned the statement in our report that many ALJs believe they are exempt from nearly all management control. This was not our conclusion, but one that was reported by SSA’s Office of Workforce Analysis following its 1992 review of OHA operations. SSA also disagreed with our statement that ALJs have successfully opposed agency productivity initiatives. However, ALJ opposition to agency initiatives to improve productivity has been documented in prior SSA and GAO reviews and through field work conducted during this assignment. The full text of SSA’s comments and our response are included in appendix III.

Summary: Pursuant to a congressional request, GAO examined the growth in the backlog of pending cases at the Social Security Administration's (SSA) Office of Hearings and Appeals (OHA), focusing on SSA initiatives to: (1) reduce backlogged cases; and (2) make the disability appeals process more timely and efficient. GAO found that: (1) the growth in OHA backlogs is a direct result of increased applications and appeals to OHA, as well as SSA inattention to long-standing problems; (2) these problems include multiple levels of claims development and decisionmaking, fragmented program accountability, decisional disparities between disability determination services and OHA adjudicators, and SSA failure to communicate its management authority over administrative law judges (ALJ); (3) SSA initiated short-and long-term efforts to manage its disability determination and appeals process in 1994; (4) the SSA Short-Term Disability Plan (STDP) should reduce OHA backlogs to a manageable level by December 1996; (5) STDP relies on the temporary reallocation of SSA resources and process changes to stem the flow of cases requiring ALJ hearings; (6) start-up delays and limited timeframes have affected SSA ability to reduce the number of backlogged cases; (7) SSA tracks and monitors STDP allowances to ensure decisional accuracy; (8) the SSA redesign plan is aimed at addressing systemic problems within the SSA disability program and reducing claims processing; (9) the redesign plan is still in its early stages, and does not address the types of management actions that are legally permissible for ALJ hearings; and (10) many ALJ believe that they are legally exempt from management control, and SSA is frustrated in its efforts to manage the appeals process and reduce the number of pending cases.