House Committee on Ways and Means, Subcommittees on Social Security and Human Resources Joint Hearing on Social Security's DI and SSI Program Caseloads
Commissioner Apfel Testified, Accompanied by Susan Daniels, SSA's Deputy Commissioner for Disability and Income Security Programs,
October 21, 1999
Chairman Shaw, Chairman Johnson, Mr. Matsui, Mr. Cardin and Members of the Subcommittees:
I am pleased to be here today to discuss the progress that SSA is making to improve its administration of the disability programs. This opportunity to report on SSA's disability programs is especially relevant since October has been designated by the Congress and the President as "National Disability Employment Awareness Month."
Overall, I am happy to report that SSA has made substantial progress towards improving the service it provides to individuals with disabilities. SSA is pleased with its progress in this direction, but recognizes that more needs to be done to ensure that these vitally important programs offer the protection that they were intended to provide to the American people.
While much of the public debate about Social Security focuses on retirement, this is also a particularly appropriate time to emphasize that about one third of Social Security beneficiaries are severely disabled workers, their children, or the surviving family members of workers who have died. Because about 25 to 30 percent of today's 20 year olds are estimated to become disabled before retirement, the protection provided by the Social Security Disability Insurance (SSDI) program is extremely important, especially for young families. For a young, married, average income worker with two children, Social Security is the equivalent of a $233,000 disability income insurance policy. In the event of severe disability, the SSDI program stands between these families and poverty. Additionally, the Supplemental Security Income Program (SSI) serves the most economically vulnerable population with disabilities, most of whom are living in poverty.
In December 1990, 5.7 million individuals with disabilities were receiving either Social Security or SSI disability benefits. As of December 1998, 9.0 million were receiving Social Security or SSI disability benefits. As you are no doubt aware, managing such an enormous complex program presents many challenges. One way to put our disability programs in perspective is to compare them with the recent experience in other developed countries.
Comparisons aren't always simple. SSA's programs have always awarded benefits on the basis of a single strict standard of disability defined by statute. Other nations have sometimes used broader standards to make it easier for persons nearing retirement or experiencing long-term unemployment to collect disability benefits. In addition, benefits are often provided to working-age adults without any disability requirement. In tandem with these broader standards, several countries have made quite strenuous efforts to encourage hiring the disabled and enabling them to go to work.
In spite of the considerable program growth of the early 1990's, SSA's disability rolls are not high in most comparisons to other western countries. For example, in the United States, at the end of 1998, 3.5% of the population insured under Social Security were receiving disability benefits from the SSDI program. This is slightly lower than rates in Germany, the United Kingdom, and Austria, and much lower than in the Netherlands, Sweden, or Norway. Actuarial forecasts indicate that the number of people on SSA's disability rolls will continue to grow. The rate of disability prevalence is projected to increase from 3.5 % to almost 5% over the next 10 years. Although still a very small percent of the population, this represents an increase of almost 40 percent. This increase will occur largely due to the aging of the population and within the context of our very strict definition of disability.
The current growth in the disability programs has resulted in organizational stress as SSA's dedicated and capable employees have worked to maintain their traditional high level of customer service. Additionally, the resultant workload has made it even more critical that we seek ways to ensure that eligible individuals are identified as early in the process as possible.
In 1994, SSA announced an ambitious plan to streamline the disability process by eliminating unnecessary handoffs and most importantly to ensure that eligible individuals are identified as early in the process as possible. In the years following, SSA carefully tested many aspects of this plan. This testing was critical in order to make certain that our most vulnerable customers were not adversely affected by any changes.
In August 1998, the Social Security Advisory Board issued its report, "How SSA's Disability Programs Can Be Improved." In this report, the Advisory Board made a number of recommendations relating to SSA's disability programs. These recommendations included making the disability determination process more consistent and equitable, strengthening the public's trust in the integrity of the programs, and helping disabled individuals continue or return to work. As a result of SSA's prior initiative to strengthen the disability programs, SSA was already well on the way to addressing these concerns.
Disability Management Plan
SSA is now working on several initiatives designed to improve the disability adjudication process at all levels of adjudication, safeguard the integrity of the program, and enhance beneficiaries' opportunities to work. Many of these initiatives are based on SSA's Disability Redesign Plan. After a lengthy study of the issues involved, I determined that no single initiative would be the answer. SSA needed to take concerted action in several areas. SSA needed to address longstanding issues to improve administrative efficiency and achieve greater consistency in our decisionmaking process.
In March of this year, SSA published the report, Social Security and Supplemental Security Income Disability Programs: Managing for Today, Planning for Tomorrow, and in August of this year, SSA published the report, The Hearings Process Improvement Initiative: Delivering Better Service for the 21st Century. These reports set out our comprehensive strategy and firm commitment to administer the disability programs fairly, effectively, and efficiently, so that SSA can continue to protect the millions of individuals who depend on it. To achieve this, SSA is making improvements to both the initial disability determination process and the hearing process. The improvements are premised on SSA's strong belief that, through investments in the quality of our decisionmaking at the initial level of the administrative process, such as making the claim development process more comprehensive, SSA can expect to provide better service by ensuring that eligible individuals with disabilities are identified as early in the process as possible. Denied claimants who appeal will experience a more efficient appeals process that will take less time to produce decisions. SSA recognizes that many of the benefits expected from these improvements will not materialize immediately. While SSA expects some short term decreases in productivity during implementation, the long term improvements to the system will outweigh these costs.
Before I get into specifics, a brief overview of the current disability process might help put this statement in context. The Social Security Act broadly defines disability as the inability to engage in any substantial gainful activity due to a physical or mental impairment expected to last at least one year or result in death. The Act requires the Commissioner of Social Security to prescribe rules for obtaining and evaluating evidence and making disability decisions. The law further requires that initial disability determinations be made by State Disability Determination Services (DDSs) following Federal rules and guidelines and financed by Federal funds.
State DDS Process
In the State DDS, a team composed of a disability examiner and a physician (or sometimes a psychologist) makes the disability determination based on an evidentiary record. The State DDS requests medical evidence from the treating physician(s) and other sources identified by the claimant. If that evidence is incomplete or conflicting, the disability examiner may request a consultative examination from the claimant's treating physician or a physician under contract to the DDS to perform these examinations. If necessary, the examiner will also obtain evidence from the claimant's family, friends, or other third parties that will help explain how the individual's impairment(s) affects his or her ability to work. The team then considers all medical and other evidence to make the disability determination.
A person who is dissatisfied with an initial determination, may pursue an appeal through three administrative levels and the Federal courts. The Act requires the Commissioner to provide a claimant the opportunity for a hearing, and allows for filing of a civil action in Federal court after the Commissioner's final decision. SSA's regulations also provide a reconsideration review prior to the hearing before the administrative law judge (ALJ) and an opportunity for final review by SSA's Appeals Council.
Reconsideration is the first administrative review for claimants and involves a de novo, or fresh, review of the claim (including any new evidence) by individuals who did not participate in the original determination. The reviewers consider all of the evidence and issue a reconsideration determination.
The second level of administrative appeal is a de novo hearing before an ALJ who can call on medical or vocational experts, if needed, to help evaluate the evidence. Usually the claimant obtains legal representation at this point. Frequently, new evidence is introduced by the claimant and his or her representative, often at the hearing itself. Claimants are allowed to appear before the ALJ and to call witnesses.
The final administrative appeal level is the Appeals Council which may grant, deny, or dismiss a request for review of the ALJ decision. It will grant review if the ALJ decision contains an error of law, is not supported by substantial evidence, involves a broad policy issue, or if there appears to be an abuse of discretion by the ALJ. After an Appeals Council action, if the claimant is still dissatisfied, the next step is filing a civil action in Federal court.
Improving the Disability Adjudication Process
- Results from redesign testing showed that certain process changes resulted in:
- A higher percentage of individuals being allowed at the initial level;
- Enhanced quality of initial decisions;
- Earlier access to the hearing process for those who appeal their initial decision; and
- High claimant satisfaction.
In addition to the information already gathered, SSA remains committed to testing the Disability Claims Manager concept as an alternative approach to claims taking. The results of this testing will allow SSA to determine if the process can provide a more user-friendly, efficient and faster way to serve claimants filing for disability benefits.
On October 1st SSA implemented prototypes in 10 states, which combine these features of redesign with other initiatives to improve the adjudicative process at all levels. These prototypes consist of the following:
- Enhanced documentation and explanations of decisions at the initial claims level;
- Revised roles of the disability examiner and medical consultant in State DDS determinations;
- An opportunity for a conference between the claimant and the State DDS decisionmaker; and
- Elimination of the reconsideration step of the administrative appeals process.
In our recent travels, Dr. Daniels and I saw first hand the commitment that SSA and DDS employees have to making the new process work. One SSA Office of Hearings and Appeals (OHA) employee succinctly pointed out that better documented and rationalized DDS determinations would make OHA's job harder because the planned initiatives ensure that only the most complex cases will get to OHA. Additionally, the new mantra for the New York DDS units participating in the prototype testing is "No easy cases to OHA."
Claims at the Initial Level
SSA is committed to enhancing the quality of decisions by ensuring that SSA policies are applied in a consistent manner by all adjudicators and by improving the development and explanations of disability determinations.
SSA's redesign experience showed that by focusing more attention at the initial determination level, SSA could expect to improve quality and identify eligible individuals earlier in the process.
Revising the Roles of the Disability Examiner and Medical Consultant
The process being tested in the prototype states enhances the existing roles of the disability examiner/medical consultant team and is derived from previous redesign tests. It permits the DDS disability examiner to make the initial determination of disability without requiring the certification of a medical consultant on the disability forms. The medical consultants will act as true consultants and generally will only be asked to review the more complex cases in which expert medical guidance is needed. Medical consultant review will, as required by law, continue to be required for all SSI childhood claims and in denials in which the evidence indicates the existence of a mental impairment.
Providing a Claimant Conference
The purpose of the claimant conference is to provide the claimant with an increased opportunity to interact with the disability decisionmaker earlier in the process and to submit further information when evidence in the initial claim is insufficient to make a fully favorable determination. Before issuing a less than fully favorable determination at the initial level, the DDS decisionmaker will contact the claimant to discuss the case. This ensures that claimants can fully present their case and allows them to have a better understanding of how their cases were decided. This initiative serves SSA's goals of improving customer service by making the process more personal and allowing appropriate claims earlier in the process.
Thorough case development and explanation practices at the initial claims level are crucial to achieving accurate decisionmaking. SSA recognizes that assuring more complete development and improved explanations of how the determination was made will require more time to be initially spent on each individual case. However, enhanced claims documentation is essential to furthering the overarching goals of improving the quality of decisions and making the correct decision early in the process. This will ultimately save time for many beneficiaries who will, as a result of these enhancements, be awarded benefits earlier in the process.
Eliminating the reconsideration step from the current four-level adjudicative process addresses SSA's goal for a streamlined, more efficient process. The improvements to the initial determination process will afford the same benefits without an additional administrative step.
Improving the ALJ Hearing Process
During the past few years, SSA undertook a number of initiatives to address large hearing workloads that have produced real results. Initiatives such as the establishment of case screening units and specialized decision writing units, helped decrease average processing time at the hearing level from 386 days in 1997 to, under a preliminary analysis, 316 days at the close of FY 1999. Despite these improvements, SSA knew that it had to do better.
Therefore, SSA convened a high-level interdisciplinary team under the direction and guidance of the Regional Chief Administrative Law Judges. The team also worked with an outside contractor (Booz-Allen & Hamilton, Inc.). The team was charged with making recommendations that would build on the recent improvements in OHA quality and timeliness and further reduce processing times, increase productivity, and enhance the quality of service to the claimant. In August of this year, SSA published the team's recommendations in The Hearings Process Improvement Initiative: Delivering Better Service for the 21st Century. As stated in the report, it is our intent that, when fully implemented, the Hearings Process Improvement initiative (HPI) will reduce processing times. Average processing times for all hearing cases are projected to fall from an estimated 316 days in FY 1999 to 257 days by the end of FY 2000, and 193 days in FY 2002.
The improvements envisioned by HPI differ from the more traditional response of committing additional resources to the existing hearing process that SSA has taken over the last few years. Instead, the plan relies on process changes, including new administrative processes for local hearing offices to achieve dramatic improvements. On this point, I want to make clear that there are no plans to alter the organizational structure of the Office of the Chief ALJ.
Specific HPI initiatives include implementation of a "National Workflow Model" that combines pre-hearing activities, a standardized pre-hearing conference, and processing-time benchmarks for various tasks. These activities will increase the "front-end" efficiency of our hearing process and get the cases to our administrative law judges sooner for decisionmaking.
With the plan set out in the report, the Social Security Administration continues its commitment to a customer-focused hearings process that is more timely and efficient while maintaining the claimant's right to a fair and impartial hearing. We will begin implementing this plan in January 2000 and expect to have the project fully implemented by March 2001.
Improving the Appeals Council Process
Having reached decisions on making improvements to the initial and hearing levels, SSA is now carefully looking into what can be done to eliminate the long wait before receiving a decision from SSA's Appeals Council. Later this year, SSA will release its plan to improve service in this area. Elements of this plan will include using attorneys from SSA's Office of the General Counsel to assist with case reviews, permitting claimants with cases pending at the Appeals Council to pursue new claims for periods of time subsequent to the ALJ decisions, and promoting stability and excellence on the Appeals Council by continuing SSA's efforts to obtain legislation that would provide pay parity for SSA's Appeals Council Administrative Appeals Judges with non-supervisory ALJs. Quite simply, forcing individuals to wait more than a year for an Appeals Council decision is unacceptable.
Safeguarding the Integrity of the Program
As I stated at the outset SSA is committed to ensuring that only those who are truly disabled continue to receive benefits. Thanks to additional funding from Congress, and particularly this committee, SSA is doing more continuing disability reviews (CDRs) than ever. In fiscal year 1998, SSA processed almost 1.4 million periodic CDRs, more than twice the number of CDRs processed in 1996. Based on the CDRs done in FY 1998, SSA estimates that 70,300 beneficiaries will have their benefits terminated after all appeals, resulting in savings of approximately $4.4 billion when you consider the savings to the OASDI, SSI, Medicare, and Medicaid programs for the ten-year period running from 1998 to 2007. And while the numbers for FY 1999 are still preliminary, our initial data indicates that we will exceed the number of CDRs that we processed in FY 1998 by at least 10 percent.
Importantly, SSA is meeting the goals set in our 7-plan that SSA has shared with you. As you may recall, this plan calls for approximately 9.3 million CDRs to be conducted during the 7-year period, FY 1996 through FY 2002. SSA is on schedule to meet our goal of being up-to-date on all Title II CDRs by 2000, and all Title XVI CDRs by 2002. With your continued support, SSA will stay on top of this important workload.
Enhancing Beneficiaries Opportunities To Work
Before I close, I applaud this committee's work on the return to work legislation and want to reiterate the Administration's longstanding commitment to encouraging individuals with disabilities to return to work. This year, SSA promulgated regulations to increase the level of earnings at which SSA presumes that a non-blind individual is performing substantial gainful activity from $500 to $700. This is just one in a number of initiatives that will be taken to help individuals with disabilities enter the workforce.
SSA's emphasis on returning individuals with disabilities to work is starting to pay off. Since FY 1996, the number of beneficiaries for which SSA reimbursed state vocational rehabilitation agencies for successfully returning beneficiaries to work has almost doubled from 6,024 in 1996 to 11,124 in FY 1999. Also, our latest data show that there were approximately 16,650 working SSDI beneficiaries at the start of FY 1998 and 23,300 working SSI recipients as of June 1999. SSA will continue to do all that it can to help individuals with disabilities return to work. In addition to the initiatives that SSA can undertake using its current statutory authority, the Administration looks forward to working with Congress to enact the Work Incentives Improvement Act. I understand that there are financing and health- and education-related policy issues that remain to be addressed.
This important legislation improves access to health care for the disabled, establishes a program that allows consumers their choice of private or public employment service providers, creates work incentive outreach programs, and reauthorizes SSA's demonstration authority to test new and innovative ways to return people to work.
Thank you for the opportunity to be here today. SSA is committed to making the Social Security disability programs both more responsive to its claimants and beneficiaries and more accountable to the nation's taxpayers. We will tirelessly continue in our efforts to make Social Security's disability programs the best that they can be. I would be happy to answer any questions.