DI and SSI provide cash benefits to people with long-term disabilities. While the definition of disability and the process for determining disability are the same for both programs, the programs were initially designed to serve different populations. The DI program, enacted in 1954, provides monthly cash benefits to disabled workers—and their dependents or survivors—whose employment history qualifies them for disability insurance. These benefits are financed through payroll taxes paid by workers and their employers and by the self-employed. In fiscal year 2001, more than 6 million individuals received more than $59 billion in DI benefits. SSI, on the other hand, was enacted in 1972 as an income assistance program for aged, blind, or disabled individuals whose income and resources fall below a certain threshold. SSI payments are financed from general tax revenues, and SSI beneficiaries are usually poorer than DI beneficiaries. In 2001, more than 6 million individuals received almost $28 billion in SSI benefits. The process to obtain SSA disability benefits is complex and fragmented; multiple organizations are involved in determining whether a claimant is eligible for benefits. The current process consists of an initial decision and up to three levels of administrative appeals if the claimant is dissatisfied with SSA’s decision. Each level of appeal involves multistep procedures for evidence collection, review, and decision-making. Figure 1 shows the process, parts of which are required by law. The disability claims process begins when a claimant applies for disability benefits, generally at one of SSA’s 1,300 field offices across the country, where a claims representative determines whether the claimant meets financial and other program eligibility criteria; they also obtain information about the claimant’s impairments, including sources of medical and vocational information. If the claimant meets the financial and other program eligibility criteria, the claims representative forwards the claim to the federally funded but state-administered DDS in the state where the claimant lives. DDS staff obtain evidence about the claimant’s impairment, and a team consisting of a specially trained disability examiner and an agency medical consultant reviews the medical and vocational evidence and determines whether the claimant is disabled. The claimant is notified of the medical decision, and the claim is returned to the field office for payment processing or file retention. This completes the initial claims process. Claimants who are initially denied benefits can ask to have the DDS reconsider its initial denial. If the decision at this reconsideration level remains unfavorable, the claimant can request a hearing before a federal ALJ at an SSA hearings office, and, if still dissatisfied, the claimant can request a review by SSA’s Appeals Council. Upon exhausting these administrative remedies, the individual may file a complaint in federal district court. Given its complexity, the disability claims process can be confusing, frustrating, and lengthy for claimants. Many individuals who appeal SSA’s initial decision will wait a year or longer for a final decision on their benefit claims. The claims process can also result in inconsistent assessments of whether claimants are disabled; specifically, the DDS may deny a claim that is later allowed upon appeal. Over the years, as many as three-fourths of all claimants denied at the DDS reconsideration level filed an appeal and, of these, about two-thirds or more received favorable decisions at the hearings level. Program rules—such as claimants’ ability to submit additional evidence and to allege new impairments upon appeal—and the worsening of some claimants’ condition over time can explain some but not all of the overturned cases. In some cases, the inconsistency may be due to inaccurate decisions. SSA believes that DDSs generally make more errors on denials than on awards, while ALJs generally make more errors on awards than on denials. To address these concerns, SSA in 1994 set forth an ambitious plan to redesign the disability claims process. The overall purpose of the redesign was to ensure that decisions are made quickly, ensure that the disability claims process is efficient, award legitimate claims as early in the process as possible, ensure that the process is user friendly for claimants and those who provide employees with a satisfying work environment. The 1994 plan represented SSA’s first effort to significantly revise its procedures for deciding disability claims since the DI program began in the 1950’s. In April 1994, we testified that the redesign proposal was SSA’s first valid attempt to address major fundamental changes needed to realistically cope with the disability claims workload. We cautioned SSA, however, that many difficult implementation problems would need to be addressed. These included new staffing and training demands, development and installation of technology enhancements, and confrontation with entrenched cultural barriers to change. Since 1994, SSA has made several adjustments to its redesign plan, some of them in response to concerns we expressed over the years about SSA’s lack of progress. In 1996, we reported that SSA’s original 6-year plan was overly ambitious. At that time, SSA had made little progress toward meeting its goals, lacked demonstrable results, and faced difficulties obtaining and keeping the support of some stakeholders, including federal employees and state DDS managers and employees. SSA then issued a scaled-back redesign plan in 1997 focusing on testing and implementing eight key initiatives—each representing a major change to the system— within 9 years instead of the original 6 years. In 1999, we again reported that SSA had made little progress; despite being scaled back, the effort proved too large to keep on track. We recommended that the agency further focus its efforts on the most promising initiatives, including those that would improve the quality and consistency of its disability decisions and test promising concepts at only a few sites before moving to large- scale testing or implementation. SSA again revised its plans in 1999 and 2001. These plans reflect the agency’s commitment to (1) further test ways to streamline the claims process, (2) take additional steps to enhance the quality and consistency of decisions, and (3) introduce new initiatives that focus on the appeals process. This report focuses on five initiatives found in SSA’s latest revisions. During this same period, the Social Security Advisory Board also raised concerns about some of SSA’s proposed process changes and about the amount of time and resources the agency had invested in changes that resulted in minimal gains. More importantly, the Board raised concerns about certain systemic problems that can undermine the overall effectiveness of SSA’s claims process, which by extension can also undermine the effectiveness of SSA’s redesign efforts. The Board found that SSA’s fragmented disability administrative structure, created nearly 50 years ago, is ill-equipped to handle today’s workload. The Board focused on a number of areas, including the lack of clarity in SSA’s relationship with the states and the resulting variation among states in areas such as salary, hiring requirements, and the quality of decisions, and an outdated hearing process fraught with tension and poor communication between SSA and the ALJs. The Board recommended, among other things, that SSA (1) work to strengthen the current federal-state relationship in the near-term and revisit its overall relationship with the states, (2) assert its authority to require states to follow specific federal guidelines, (3) take steps to improve SSA’s relationship with its ALJs while also clarifying SSA’s authority to take steps to improve the timelines and consistency of ALJ disability decisions, (4) consider whether the agency should be represented at disability hearings (it currently is not), (5) consider closing the case record after the ALJ hearing, and (6) revisit the need for changes in the current provisions for judicial review by federal courts. Most of these changes are linked to significant structural reforms or the need to clarify management’s authority, and some may require legislative changes. The Board’s recommendations are different from the largely procedural or process changes that often typify SSA’s redesign efforts. SSA tested the Disability Claim Manager position in 36 locations in 15 states from November 1999 through November 2000. In June 2001, SSA ended the initiative. SSA concluded that the test results were not compelling enough to support implementing the disability claim manager position. While the test resulted in several benefits, such as improved customer and employee satisfaction and quicker claims processing, the increased costs of the initiative and other concerns convinced SSA not to proceed with the initiative. The Disability Claim Manager initiative was designed to make the claims process more user friendly and efficient by eliminating steps resulting from numerous employees handling discrete parts of the claim. It did so by having one person—the disability claim manager—serve as the primary point of contact for claimants until initial decisions were made on their claims. The managers were responsible for explaining the disability process and program requirements to the claimants and for processing both the medical and nonmedical aspects of their claims, responsibilities normally divided between SSA’s field office claims representatives and state DDS disability examiners. Both SSA and DDS employees served as disability claim managers during the test, and each manager performed both claims representative and disability examiner functions. In October 2001, SSA issued its final report evaluating the initiative. SSA found the results of the initiative to be mixed. On the positive side, SSA concluded that those SSA and DDS employees who participated in the test could master the expanded responsibilities required of the disability claim manager position, and the initiative appears to have met its goal of making the claims process more user friendly and efficient without compromising the accuracy of decisions. Specifically, SSA found that the initiative resulted in the following benefits: Greater customer satisfaction. Claimants served by disability claim managers reported greater satisfaction than claimants served under the traditional process. While customer satisfaction was comparable among awarded claimants—94 percent served by disability claim managers reported they were satisfied with SSA’s service, compared with 91 percent of those served under the traditional process—the difference in customer satisfaction was greater for denied claimants.