SSA’s Disability Insurance and Supplemental Security Income programs are the nation’s largest providers of federal income assistance to disabled individuals, with the agency making payments of approximately $113 billion to more than 14 million beneficiaries and their families in 2004. Yet, over the years, it has become more challenging for the agency to ensure an acceptable level of service—in terms of both the quality and the timeliness of its support to these individuals. In January 2003, we designated disability benefits programs across the federal government as high risk—in need of urgent attention and transformation. The process through which SSA approves or denies disability benefits is complex and involves multiple partners at both the federal and state levels in determining a claimant’s eligibility. SSA’s 1,300 field offices are the initial points of contact for individuals applying for benefits. SSA also depends on 54 state DDS offices to provide crucial support to the claims process through their role in determining an individual’s medical eligibility for disability benefits. DDSs make initial determinations regarding disability claims in accordance with federal regulations and policies; the federal government reimburses 100 percent of all costs incurred by states to make disability determinations. Physicians and other members of the medical community provide the DDSs with medical evidence to help them evaluate disability claims. When disability claims have been denied by the DDSs, claimants can appeal to SSA’s OHA. The process begins when individuals apply for disability benefits at an SSA field office, where determinations are made about whether they meet nonmedical criteria for eligibility. If the claimant is eligible, the field office forwards the application to the appropriate state DDS, where a disability examiner collects the necessary medical evidence to make the initial determination of whether the claimant’s condition meets the definition of disability. Once the claimant’s medical eligibility is determined, the DDS returns the claim folder to SSA for final processing. A claimant who is initially denied benefits can ask the DDS to reconsider its determination. If the DDS denies the claim again, the claimant can request a hearing before a federal administrative law judge at an SSA hearings office and, if still dissatisfied, can request a review of the claim by SSA’s Appeals Council. Upon exhausting these administrative remedies, the claimant may file a complaint in federal district court. Each level of appeal involves multistep procedures for collecting evidence, reviewing information, and making the decision. Many individuals who appeal the initial determination on their claims will wait a year or longer—perhaps up to 3 years—for a final decision. To address concerns regarding the program’s efficiency, in 1992, SSA initiated its Modernized Disability System project, intending to redesign the disability claims process emphasizing the use of automation to achieve an electronic (paperless) processing capability. This project, which in 1994 was renamed the Reengineered Disability System, was to automate the entire disability claims process—from the initial claims intake in the field office to the gathering and evaluation of medical evidence by the state DDSs, to payment by the field office or processing center. The system also was intended to automate the handling of appeals by SSA’s hearings offices. However, as our prior work noted, SSA encountered performance and other problems during its initial pilot testing of the system and, after spending more than $71 million, suspended this project in 1999. In August 2000, SSA renewed its commitment to developing an electronic disability system by the end of 2005. The agency worked on this initiative through the spring of 2002, at which time the Commissioner of Social Security announced an accelerated electronic disability initiative— AeDib—to more quickly move to an automated process. Under the accelerated strategy, the agency planned to begin implementing its electronic disability system by January 2004. SSA anticipated that the electronic disability system would enable the disability offices to achieve processing efficiencies, improve data completeness, reduce keying errors, and save time and money. With technologically enhanced claims processing offices, the agency projected that it could realize benefits of more than $1 billion—at an estimated cost of approximately $900 million—over the 10- year life of the initiative. SSA reported actual AeDib costs of approximately $215 million through fiscal year 2004 for planning, hardware and software acquisition, maintenance, and personnel. The AeDib strategy focuses on developing the capability to electronically process claimant information and large volumes of medical images, files, and other documents that are currently maintained in paper folders. Stored in electronic folders, this information could then be accessed, viewed, and shared among the disability claims processing offices. The initiative to achieve this electronic capability involves five key projects: an Electronic Disability Collect System that would provide the capability for SSA field offices to capture electronically, in fixed data fields, information about a claimant’s disability that previously had been contained on paper disability forms (structured data) and to store it in databases for later use by the SSA and DDS offices responsible for processing disability claims; a Document Management Architecture to provide a data repository and scanning and imaging capabilities that would allow unstructured claimant and medical data, such as images or information not found in fixed data fields (e.g., a hospital report, doctors’ notes, or an x-ray report), to be stored, indexed, and shared among the disability processing offices; Internet applications to enable the public to submit disability claims and medical information to SSA via the Internet (all data keyed into the Internet applications would be transmitted directly into the Electronic Disability Collect System); a systems migration and electronic folder software interface to position DDS offices to operate on a common IBM-series hardware platform and enhance their existing claims systems to process the electronic claims information and to enable the DDS systems to access information in the electronic folder; and a Case Processing Management System that would interface with the electronic folder and enable OHA’s staff to track, manage, and complete case-related tasks electronically. According to SSA, the Electronic Disability Collect System and the Document Management Architecture are the two fundamental components needed to create the electronic disability folder. Via their claims processing systems, SSA and DDS users would be able to access and pull the structured and unstructured claimant data into appropriate computer screens, organized as electronic folders of information. The agency’s electronic disability claims processing system is depicted in figure 1. By mid-January 2004, SSA had implemented all planned releases of the Electronic Disability Collect System and had completed and placed into production Internet applications to aid claimants in filing online for disability benefits and services. It also had enhanced the DDSs’ claims processing systems by migrating and upgrading hardware to allow these offices to operate on a common IBM-series platform and by upgrading the claims processing software in all but 3 state DDS offices that used the standard disability claims processing systems. In addition, SSA had begun pilot testing OHA’s Case Processing Management System in a standalone environment at five sites. Further, the agency was pilot testing the Document Management Architecture in three state DDS locations—North Carolina, Illinois, and California. However, it had not yet implemented the Document Management Architecture repository and scanning and imaging capabilities and related DDS software enhancements or the software to enable DDS and OHA systems to interface with the electronic folders. SSA began its national rollout of these remaining system components at the Mississippi DDS on January 26, 2004. When we last reported on the initiative in late March 2004, SSA was proceeding with its implementation of its electronic disability system. However, our work had noted that the agency’s strategy for developing the system components involved risks that threatened the success of the project. For example, we determined that the agency (1) had begun the national rollout without conducting testing that was adequate to evaluate the performance of all system components collectively, (2) could not provide evidence that it was consistently applying established procedures to guide the AeDib software development or had developed risk mitigation strategies, (3) had not validated its analysis to ensure the reasonableness of estimated AeDib costs and benefits, and (4) had not articulated a comprehensive plan for ensuring that state DDSs’ concerns about the initiative were addressed. In view of the risks and the technological complexity, scope, and size of the initiative, we had recommended that the Commissioner of Social Security, before continuing with the national rollout of AeDib, ensure that all critical problems identified in pilot testing of the electronic disability system were resolved and that end-to-end testing of the interrelated systems was performed, ensure that the software that had been developed was approved and that the systems had been certified for production, establish a revised time frame for and expedite actions toward finalizing AeDib risk mitigation strategies, validate all AeDib cost and benefit estimates, and implement a communications plan to clearly and comprehensively convey SSA’s approach for effectively addressing disability stakeholders’ and users’ concerns and ensuring their full involvement in the AeDib initiative. SSA is proceeding with a national rollout of its electronic disability system and has generally met its schedule for implementing the remaining key components—the Document Management Architecture and the electronic folder interface software—that are required to process an entire disability case electronically. Nonetheless, the agency has considerable work to accomplish before it will be effectively positioned to fully process all disability claims in an electronic environment. Among the critical tasks that remain are certifying all state DDS offices and OHA sites to electronically process claims and addressing operational and other concerns that threaten to undermine the reliability and use of the system. Until SSA has effectively addressed these matters, it remains uncertain when and to what degree the agency will realize the full benefits of its electronic processing capability. The AeDib implementation schedule had called for all state DDSs and OHA sites to be equipped with the electronic disability claims processing capability by June 27, 2005, and October 3, 2005, respectively.