Social Security Disability: Disappointing Results from SSA's
Efforts to Improve the Disability Claims Process Warrant
Immediate Attention (27-FEB-02, GAO-02-322).
The number of people applying for benefits from the Social
Security Administration's (SSA) two disability programs grew
dramatically during the 1990s. As a result, the Disability
Insurance and Supplemental Security Programs began to experience
huge backlogs of undecided claims. SSA has spent $39 million
during the past seven years on various initiatives to help it
better manage its caseloads and ensure high-quality service. SSA
spent another $71 million to develop an automated disability
claims process. This report reviews the status and outcomes of
five initiatives intended to improve SSA's disability claims
process. GAO found that the results of the initiatives have been
disappointing.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-322
ACCNO: A02695
TITLE: Social Security Disability: Disappointing Results from
SSA's Efforts to Improve the Disability Claims Process Warrant
Immediate Attention
DATE: 02/27/2002
SUBJECT: Agency missions
Claims processing
Disability benefits
Disability insurance
Performance measures
Social security benefits
Strategic planning
Social Security Disability Insurance
Program
SSA Appeals Council Process Improvement
Initiative
SSA Disability Claim Manager Initiative
SSA Disability Determination Program
SSA Hearings Process Improvement
Initiative
SSA Prototype Initiative
SSA Quality Assurance Initiative
SSA Quality Assurance Program
SSA Senior Attorney Program
Supplemental Security Income Program
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GAO-02-322
United States General Accounting Office
GAO
Report to the Chairman, Subcommittee on Social Security, Committee on Ways
and Means, House of Representatives
February 2002
SOCIAL SECURITY DISABILITY
Disappointing Results From SSA's Efforts to Improve the Disability Claims
Process Warrant Immediate Attention
GAO-02-322
Contents
Letter
Results in Brief
Background
Disability Claim Manager Test Results Do Not Support
Implementation Prototype Results Are Promising, But Impact on Public Service
and Costs is a Major Concern Hearings Process Improvement Initiative
Implemented Nationwide; Desired Benefits Were Not Achieved Appeals Council
Process Improvement Initiative Moving in the Right Direction, But Has Not
Met Goals SSA Has Not Developed a Comprehensive Quality Assurance
System Conclusions Recommendations Agency Comments
1
2 4
10
14
19
24
25 27 28 29
Appendix I Comments from the Social Security Administration
Table
Table 1: DDS Processing Time for Initial Claims Under the Prototype vs. the
Traditional Process
Figure
Figure 1: SSA's Disability Claims Process
Abbreviations
ALJ administrative law judge
DDS disability determination service
DI Disability Insurance
OHA Office of Hearings and Appeals
OQA Office of Quality Assurance and Performance Assessment
SSA Social Security Administration
SSI Supplemental Security Income
United States General Accounting Office Washington, DC 20548
February 27, 2002
The Honorable E. Clay Shaw, Jr.
Chairman, Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
Dear Mr. Chairman:
During the 1990's, the Social Security Administration (SSA) experienced a
dramatic growth in the number of people applying for benefits from its
two disability programs, Disability Insurance (DI) and Supplemental
Security Income (SSI), which resulted in huge backlogs of undecided
claims. Managing its caseloads and delivering high-quality service to the
public in the form of fair, consistent, and timely eligibility decisions in
the
face of resource constraints became one of SSA's most challenging
problems. To address this problem, SSA in the mid-1990's developed a
long-term strategy to redesign its disability claims process. In the last 7
years, SSA has spent more than $39 million1 revising its strategy and
testing and implementing initiatives designed to improve the timeliness,
accuracy, and consistency of its disability decisions and to make the
process more efficient and easier for claimants to understand. It spent an
additional $71 million during these years to develop an automated
disability claims process intended to provide support for efforts to
redesign the disability claims process.
Because of your concern about the long-standing problems in SSA's
disability claims process, you asked us to review and report on the status
of and results achieved to date from five initiatives to improve SSA's
disability claims process. Two of SSA's initiatives-the Disability Claim
Manager and the Prototype-attempt to improve the initial claims process.
SSA's current disability claims process begins when an individual contacts
one of SSA's field offices to apply for benefits. After the application is
complete, a field office claims representative forwards it to a state agency
1The $39 million includes expenditures for contractor support, travel,
transportation, equipment, supplies, services, and rent. It excludes
personnel costs, most of which would have been incurred processing workloads
regardless of redesign projects. It also excludes the costs incurred for all
but one initiative tested or implemented after March 1999, when the
Commissioner ended disability process redesign as a separate agency project.
known as the disability determination service (DDS). At the DDS, disability
examiners and medical consultants review the available medical evidence and
determine whether the claimant is disabled. If the DDS denies the claim, the
claimant can appeal to have the DDS reconsider its initial denial. The
Disability Claim Manager initiative attempts to make the initial part of the
claims process more user friendly for claimants by creating a new position
to explain the disability process and program requirements and to serve as
claimants' primary point of contact on their claims. The manager performs
the duties of both SSA field office claims representatives and state DDS
disability examiners. The second initiative, the Prototype, attempts to
ensure that all legitimate claims are approved as early in the process as
possible by making substantial changes to the way the DDS processes initial
claims. The Prototype requires disability examiners to more thoroughly
document and explain the basis for their decisions and it gives them greater
decisional authority for certain claims. The Prototype also eliminates the
DDS reconsideration step.
Two more initiatives-the Hearings Process Improvement and the Appeals
Council Process Improvement initiatives-change the processes for handling
appeals of claims denied by the DDS. Under the current process, if the DDS
denies a claim, the claimant can request a hearing before an administrative
law judge (ALJ) at an SSA hearings office. If the claim is denied at this
hearing, the claimant may appeal to the next and final administrative review
level in SSA, the Appeals Council. Both initiatives are designed to speed
the decisions made by each of these units by introducing more efficient ways
to handle appeals and to thereby reduce their backlogs of appealed claims.
The fifth initiative, Quality Assurance, seeks to develop an approach to
improve the method SSA uses to ensure the accuracy of its disability
decisions. Quality Assurance affects the entire disability process.
To examine these initiatives, we interviewed individuals from SSA and state
DDSs responsible for planning and implementing these initiatives and
reviewed documents they provided. We also interviewed SSA employees and
union representatives affected by these changes. We did our work in
accordance with generally accepted government auditing standards between May
and December 2001.
Results in Brief SSA has implemented four of the five disability claims
process initiatives either nationwide or within selected geographic
locations. As summarized below, the improvements realized through their
implementation have, in general, been disappointing.
* The Disability Claim Manager Initiative. This initiative was completed in
June 2001. Results of the pilot test, which was done at 36 locations in 15
states beginning in November 1999, were mixed; claims were processed faster
and customer and employee satisfaction improved, but administrative costs
were substantially higher. An SSA evaluation of the test concluded that the
overall results were not compelling enough to warrant additional testing or
implementation of the Disability Claim Manager at this time.
* The Prototype. This initiative was implemented in 10 states in October
1999 and continues to operate only in these states. Preliminary results
indicate that the Prototype is moving in the direction of meeting its
objective of ensuring that legitimate claims are awarded as early in the
process as possible. Compared with their non-Prototype counterparts, the
DDSs operating under the Prototype are awarding a higher percentage of
claims at the initial decision level, while the overall accuracy of their
decisions is comparable with the accuracy of decisions made under the
traditional process. In addition, when DDSs operating under the Prototype
deny claims, appeals reach a hearing office about 70 days faster than under
the traditional process because the Prototype eliminates the reconsideration
step in the appeals process. However, according to SSA, more denied
claimants would appeal to ALJs under the Prototype than under the
traditional process. More appeals would result in additional claimants
waiting significantly longer for final agency decisions on their claims, and
would increase workload pressures on SSA hearings offices, which are already
experiencing considerable case backlogs. It would also result in higher
administrative costs under the Prototype than under the traditional process.
More appeals would also result in more awards from ALJs and overall and
higher benefit costs under the Prototype than under the traditional process.
Because of this, SSA acknowledged in December 2001 that it would not extend
the Prototype to additional states in its current form. During the next
several months, SSA plans to reexamine the Prototype to determine what
revisions are necessary to decrease overall processing time and to reduce
its impact on costs before proceeding further.
* The Hearings Process Improvement Initiative. This initiative was
implemented nationwide in 2000. The initiative has not improved the
timeliness of decisions on appeals; rather, it has slowed processing in
hearings offices from 318 days to 336 days. As a result, the backlog of
cases waiting to be processed has increased substantially and is rapidly
approaching crisis levels. The initiative has suffered from problems
associated with implementing large-scale changes too quickly without
resolving known problems. SSA is currently studying the situation in hearing
offices to determine what changes are needed.
* The Appeals Council Process Improvement Initiative. This initiative was
implemented in fiscal year 2000 and has resulted in some improvements. While
it fell short of achieving its goals, the time required to process a case in
the Appeals Council has been reduced by 11 days to 447 days and the backlog
of cases pending review has been reduced from 144,500 (fiscal year 1999) to
95,400 (fiscal year 2001). Larger improvements in processing times were
limited by, among other things, automation problems and policy changes.
* The Quality Assurance Initiative. SSA's original (1994) plan to redesign
the disability claims process called for SSA to undertake a parallel effort
to revamp its existing quality assurance system. However, because of
considerable disagreement among internal and external stakeholders on how to
accomplish this difficult objective, progress has been limited to a
contractor's assessment of SSA's existing quality assurance practices. In
March 2001, the contractor recommended that SSA adopt a broader vision of
quality management, which would entail a significant overhaul of SSA's
existing system. SSA established a work group to respond to the contractor
report, but no specific proposals have yet been submitted to the
Commissioner for approval.
We make recommendations in this report that SSA take immediate steps to
reduce the backlog of appealed cases in the Office of Hearings and Appeals
(OHA). SSA should also develop a long-range strategy for a more permanent
solution to the backlog and efficiency problems at OHA, as well as develop
an action plan for implementing a more comprehensive and sophisticated
Quality Assurance Program. SSA agreed with our observations and
recommendations. The agency stated that our recommendations support
programmatic changes under discussion and provide SSA with the necessary
latitude to implement them.
Background 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.2 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.
2The Social Security Act defines disability for adults as an inability to
engage in any substantial gainful activity because of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
Figure 1: SSA's Disability Claims Process
Source: SSA documents.
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
assist them, and
* 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.3 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.4 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.5 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
3U.S. General Accounting Office, Social Security Administration: Major
Changes in SSA's Business Processes Are Imperative, GAO/T-AIMD-94-106,
(Washington, D.C.: Apr. 14, 1994).
4U.S. General Accounting Office, SSA Disability Redesign: Focus Needed on
Initiatives Most Crucial to Reducing Costs and Time, GAO/HEHS-97-20,
(Washington, D.C.: Dec. 20, 1996).
5U.S. General Accounting Office, SSA Disability Redesign: Actions Needed to
Enhance Future Progress, GAO/HEHS-99-25, (Washington, D.C.: Mar. 12, 1999).
2001.6 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.7 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.8 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
6See Social Security Administration, Office of the Commissioner, Social
Security and Supplemental Security Income Disability Programs: Managing for
Today, Planning for Tomorrow (Baltimore, Md.: SSA, Mar. 11, 1999), and
Social Security Administration, Office of the Commissioner, Managing Social
Security Disability Programs: Meeting the Challenge (Baltimore, Md.: SSA,
Jan. 10, 2001). Beginning in March 1999, SSA's plan to improve the
disability claims process was incorporated into the agency's broader plans
to better manage its disability programs. Disability redesign was no longer
a separate agency project.
7The Board is an independent, bipartisan Board created by the Congress and
approved by the President and the Congress. Its purpose is to advise the
President, the Congress, and the Commissioner of Social Security on matters
related to SSA's programs.
8See Social Security Advisory Board, How SSA's Disability Programs Can Be
Improved (Washington, D.C.: SSAB, Aug. 1998); Social Security Advisory
Board, Selected Aspects of Disability Decision Making (Washington, D.C.:
SSAB, Sept. 2001); and Social Security Advisory Board, Charting the Future
of Social Security's Disability Programs: The Need for Fundamental Change
(Washington, D.C.: SSAB, Jan. 2001).
Disability Claim Manager Test Results Do Not Support Implementation
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 2000.9 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
9This formal testing phase was preceded by an earlier phase that began in
November 1997 and ended in June 1999, and was focused on training disability
claim managers and enabling them to master the new position's
responsibilities. Both phases excluded claims for SSI children's benefits.
disability claim managers during the test, and each manager performed both
claims representative and disability examiner functions.10
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 process11-the
difference in customer satisfaction was greater for denied claimants.
More than two-thirds (68 percent) of denied claimants served by
disability claim managers reported overall satisfaction with SSA's
service, compared with just over half (55 percent) of denied claimants
served under the traditional process.
* Faster claims processing. Disability claim managers processed DI claims an
average of 10 days faster and SSI claims an average of 6 days faster than
similar claims processed under the traditional process.12
10Because the disability claim manager position combines federal and state
responsibilities, it was necessary to obtain agreements among SSA, DDS, and
American Federation of Government Employees union officials to conduct the
test. These agreements expired with the end of the test.
11The difference in customer satisfaction among awarded claimants in the two
groups was not statistically significant.
12Figures reflect the median processing time. Processing time was measured
from the application date (or protective filing date) to either the date of
the denial notice or the date the system completes processing an award. The
protective filing date refers to the date an intent to file benefits is made
known to SSA, provided an application is subsequently received. Disability
claim manager test sites' ability to control their volume of claims was one
of a number of factors that may have affected the processing time test
results. However, SSA could not determine this factor's effect on processing
time.
* Comparable accuracy. The test showed that the accuracy of decisions made
by disability claim managers was comparable to the accuracy of decisions
made by others on similar claims.13
* Improved employee satisfaction. Serving as a disability claim manager
improved the job satisfaction of more than 80 percent of employees serving
in that role. Employees cited several factors for their job satisfaction,
namely, their increased control over the claim, their greater interaction
with the claimant, their enhanced job knowledge, and their ability to
provide better customer service. Federal employees also cited their
increased pay as a factor in their increased job satisfaction.14
The Disability Claim Manager initiative provided additional benefits as
well, such as improving understanding between SSA and DDS employees,
according to SSA's evaluation of the initiative. Training each
organization's staff in the others' functions not only helped to identify
training needs, but it also improved communication between the two
organizations and increased their awareness of, and appreciation for, the
other.
SSA also assessed the initiative's impact on the percentage of claimants
awarded benefits, productivity, and costs. While the test results on award
rates and productivity were inconclusive, the test results on costs showed
that the Disability Claim Manager initiative substantially raised costs.
Specifically, SSA found the initiative had the following results:
* Higher claims processing costs. SSA estimated that claims processing costs
were 7 percent to 21 percent higher under the Disability Claim Manager
initiative than under the traditional process.15 The costs for
salaries and for obtaining medical evidence, including consultative
examinations performed by DDS-paid physicians or psychologists,
13The accuracy rate of medical decisions made by disability claim managers
on denied cases-90.1 percent-fell below the regulatory threshold of 90.6
percent. It was, however, statistically comparable to the accuracy rate of
decisions made on the control group of claims-93.3 percent.
14SSA staff selected for the disability claim manager position received
temporary promotions; only some DDS employees selected as disability claim
managers received temporary promotions.
15Costs-per-claim estimates include Disability Claim Manager-related staff
time, salary, support provided by other SSA and DDS components, costs of
obtaining claimants' medical records and consultative examinations, and
productivity levels.
were higher under the Disability Claim Manager initiative than under the
traditional process. Because of these higher costs, SSA concluded that
claims processing costs would continue to be higher under the initiative
even if productivity-the amount of claims processed per staff
year-improved.16
* Substantial start-up and maintenance costs. In addition to the higher
claims processing costs, SSA experienced substantial start up costs to train
SSA and DDS employees to function as disability claim managers and to
develop an infrastructure to support the new claims process. SSA also
determined that it would cost more to maintain the staff skills and the
infrastructure required by the Disability Claim Manager initiative. SSA did
not quantify the initiative's start-up and extra maintenance costs.
SSA's evaluation concluded that the benefits of implementing the Disability
Claim Manager initiative were not compelling enough to warrant its
implementation. The primary consideration in reaching this conclusion was
that the initiative would require major resource investments in higher
operational costs, training, and infrastructure. But other factors also
played a part. For example, SSA officials were concerned about the
initiative's effect on the long-standing relationship between SSA and the
DDSs. Implementing the Disability Claim Manager initiative beyond the test
would require legislation and regulatory changes to permit federal employees
to determine medical eligibility and to permit state employees to determine
nonmedical eligibility. The significant pay disparities between the federal
and state employees performing the same functions as Disability Claim
Managers also would need to be addressed. Because SSA employees who served
as Disability Claim Managers received temporary promotions, they were
generally paid at a higher rate than their DDS counterparts, only some of
whom received promotions during the test. SSA officials were also concerned
about the agency's lack of progress in developing an automated disability
claims process, which was expected to support the Disability Claim Manager
initiative. According to SSA, such a system is still years away.
16SSA's methodology for estimating claims processing costs and productivity
is extremely complex. For a complete explanation of SSA's methodology, see
Social Security Administration, Office of the Commissioner, Disability Claim
Manager Final Evaluation Report (Baltimore, Md.: SSA, Oct. 2001).
Prototype Results Are Promising, But Impact on Public Service and Costs is a
Major Concern
The Prototype was implemented in October 1999 in DDSs in 10 states and will
continue to operate in these states in its current form no later than June
2002. The participating DDSs process 25 percent of all initial disability
claims. Preliminary results, which are based on DDS decisions, indicate that
claimants receive benefits earlier from DDSs operating under the Prototype;
DDSs operating under the Prototype award as many claimants at the initial
level as other DDSs operating under the traditional process award at the
initial and reconsideration levels combined, without compromising the
overall accuracy of their decisions. In addition, because the Prototype
eliminates the reconsideration step of the appeals process, appeals of
claims denied under the Prototype reach hearing offices quicker than claims
denied under the traditional process. However, according to SSA, many more
denied claimants would appeal to ALJs under the Prototype than under the
traditional process. More appeals would result in additional claimants
waiting significantly longer for final agency decisions on their claims and
would increase workload pressures on SSA hearings offices, which are already
experiencing considerable case backlogs. It would also result in higher
administrative costs under the Prototype than under the traditional process.
More appeals would also result in more awards from ALJs and overall and
higher benefit costs under the Prototype than under the traditional process.
Because of this, SSA acknowledged in December 2001 that it would not extend
the Prototype to additional states in its current form. During the next
several months, SSA plans to re-examine the Prototype to determine what
revisions are necessary to decrease overall processing time and reduce its
impact on costs before proceeding further.
The Prototype's objective is to improve the disability claims process by
ensuring that legitimate claims are awarded as early in the decision process
as possible, thereby improving the fairness, consistency, and timeliness of
SSA's disability claims process. Toward that end, the Prototype initiative
changes the way DDSs process disability claims, with the expectation that
the changes would reduce the number of awards made at the ALJ level. The
Prototype makes the following changes in the way DDSs determine disability.
The Prototype:
* Grants greater decision-making authority to disability examiners. The
disability examiner has the authority to decide when and how to use medical
consultants' expertise in some cases. The disability examiner
is allowed to independently decide claimants' eligibility for benefits
without the medical consultant certifying the decision unless the law
mandates otherwise.17 This change contrasts with the traditional
process, in which the medical consultant signs off on all decisions. The new
process is intended to maximize agency resources by focusing the attention
of medical consultants on those claims for which their professional training
and expertise is most needed.
* Requires enhanced documentation and explanation of decisions in the
on claims more thoroughly and to better explain how the disability decision
was made. This improvement is intended to enhance the quality of DDS
decisions. This improvement also is intended to enhance the consistency
between DDS and ALJ decisions by making the DDS explanation more useful to
ALJs when claimants appeal DDS decisions to deny benefits.
* Adds a claimant conference. If the existing evidence in the claimant's
file would not support a fully favorable decision, the disability
decision-maker is required to offer the claimant an opportunity to submit
additional evidence and to have a personal interview with the decision-
18
maker before a decision is made.
* Eliminates DDS reconsideration. The reconsideration step in the
administrative appeal process is eliminated. This streamlines the disability
claims process by allowing dissatisfied claimants the opportunity to appeal
directly to an ALJ.
To assess the Prototype initiative, SSA is tracking its effect on claims
through the ALJ appeal level by comparing a sample of claims processed under
the Prototype with a sample of claims processed under the traditional
process by a comparison group of similar DDSs. The sample of Prototype
claims was selected from applications filed from January
17Medical consultants are required by statute to certify all SSI childhood
disability claims and all less than fully favorable decisions on DI and SSI
claims involving an indication of a mental impairment.
18Claimant conferences are not offered in cases where the claimant has moved
and cannot be located, refuses to cooperate, or other similar situations.
through March 2000; the sample of comparison group claims was selected from
applications filed from December 1999 through February 2000.19
In July 2001, SSA issued an interim report describing preliminary results as
of May 18, 2001. As of that date, initial DDS decisions had been completed
on virtually all Prototype and comparison group claims; reconsideration
decisions had been completed on 95 percent of comparison group claims for
which reconsideration had been requested so far; and ALJ hearing decisions
had been completed for less than half of the Prototype and comparison group
claims appealed so far. More requests for reconsideration were still
expected, as were more requests for hearings, especially for the comparison
group. SSA cautions that the claims that have completed processing do not
have the same characteristics as those that take longer to be processed;
therefore, final results cannot be fairly projected. Also, because these
results are preliminary, SSA has not yet completed its analysis to determine
whether the differences between the Prototype DDSs and comparison group DDSs
are statistically significant.20 Thus, it is too early to reach final
conclusions about the impact of the Prototype. However, as shown in the
following section, preliminary results are somewhat promising.
* Claims awarded earlier in the process. Under the Prototype, DDSs are
awarding more claims earlier than under the traditional process. DDSs
operating under the Prototype awarded benefits to 40.4 percent of initial
claimants, while DDSs operating under the traditional process awarded
benefits to 35.8 percent of initial claimants and to 39.8 percent of
claimants at the initial and reconsideration levels combined.21 Thus,
the Prototype awarded benefits to slightly more claimants in one step
than the traditional process awarded in two. SSA estimates that under
the Prototype, claimants received awards about 135 days sooner than
claimants awarded benefits at reconsideration under the traditional
process.
19The comparison group claims were chosen from applications filed 1 month
earlier than the Prototype group claims because appealed comparison group
claims go through the reconsideration step of the appeals process and the
Prototype claims do not. The earlier month helps to reduce the delay in
getting data from the comparison group, due to the extra time the
reconsideration step adds for denied claimants who appeal.
20Because the Prototype DDSs and the comparison group DDSs are not
identical, further analysis must be done to account for known differences in
the two groups in order to assess the true differences between the two
processes.
21Data on reconsiderations are incomplete for the comparison group;
therefore, the combined initial and reconsideration award rate for this
group is not final.
* Comparable accuracy. The accuracy of decisions made on initial claims by
DDSs operating under the Prototype was comparable to the accuracy of
decisions made by the comparison DDSs operating under the traditional
process, despite the fact that only DDSs operating under the Prototype had
to learn new procedures.22 While the accuracy rate
on awarded claims was slightly lower in DDSs operating under the Prototype
than in the comparison group of DDSs operating under the traditional process
(96.6 percent vs. 97.1 percent), the accuracy rate on denied claims-on which
DDSs have historically made more errors than on awards-was slightly higher
under the Prototype (92.4 percent vs. 91.9 percent). The overall accuracy
rate (awards and denials combined) was also slightly higher under the
Prototype (94.1 percent vs. 93.8 percent).
* Initial claim decisions take longer; some final decisions may be quicker.
As shown in table 1, overall it takes an average of 14 days longer for DDSs
to process an initial claim decision under the Prototype (100 days vs. 86
days) than under the traditional process. Most of this increase appears due
to the addition of the claimant conference under the Prototype, which is not
part of the traditional process. This is evidenced by the fact that
processing time for initial claims was about the same for awards under the
traditional process and under the Prototype when no claimant conference was
held (79 days vs. 80 days). Adding the claimant conference to the initial
DDS decision process affords claimants who would otherwise be denied
benefits an opportunity to present additional evidence and to have a
personal interview with the decision-maker before a decision is made on
their initial claims. The information presented during the conference can
convince the DDS to award benefits or to reaffirm the denial. Moreover, the
conference can help to improve the quality and quantity of evidence
contained in the file, which can be useful if the case is appealed to an
ALJ.
22To measure accuracy, SSA's Office of Quality Assurance and Performance
Assessment (OQA) reviewed a sample of claims decided by both Prototype and
comparison DDSs. During these reviews, claims were returned to DDSs when the
evidence in the case file convinced OQA that the DDS made the incorrect
decision as to whether the claimant was disabled or when the case file did
not contain enough documentation to support the decision and the missing
evidence if obtained might reverse the decision. SSA considers these
"performance accuracy errors." SSA's interim report provided information on
the percentage of claims returned to DDSs. We calculated the accuracy rates
cited by subtracting the percentage of claims returned to DDSs from 100
percent.
Table 1 compares the number of days it takes DDSs to process initial claims
under the Prototype vs. the traditional process.
Table 1: DDS Processing Time for Initial Claims Under the Prototype vs. the
Traditional Process
Type of Claim
Prototype Process (days)
Traditional Process (days)
Awards
Without claimant conference 80
With claimant conference 134 Not applicable
Denials 110
All claims 100
Source: SSA Disability Prototype Interim Report
While initial claim decisions take longer under the Prototype, final
decisions on appealed claims may take less time. Specifically, when the
claimant conference results in a decision to deny benefits, eliminating
reconsideration should enable claimants who appeal their denials under the
Prototype to receive quicker decisions on their appeals than those claimants
who appeal their denials under the traditional process. Even though it takes
about 20 days longer to process initial decisions on denied claims under the
Prototype (110 days vs. 90 days), eliminating the DDS reconsideration step
of the appeals process results in appeals reaching ALJs about 70 days
quicker than they would under the traditional process, according to SSA.
When the claimant conference results in a decision to award benefits,
claimants receive benefits sooner than they would have under the traditional
process. As table 1 shows, when a claimant conference is held, DDSs
operating under the Prototype take 55 days longer than comparison DDSs
operating under the traditional process to make initial award decisions (134
days minus 79 days). However, under the traditional process-with no claimant
conference-these claimants would have been denied benefits; the earliest
they could receive an award decision under the traditional process would be
after reconsideration. Because the reconsideration decision would take about
135 days, according to SSA, the claimant receives an award decision and his
or her benefits about 80 days quicker under the Prototype (the 135 days
saved by forgoing reconsideration minus the 55 days added for processing
claims when a claimant conference is held). Under the Prototype, about 3 out
of 100 claimant conferences result in awards, according to SSA.
Despite these promising results, the Prototype's impact on customer service
and costs has become a major concern to SSA. Since the interim report was
issued, more claims have been processed through the ALJ level, and these
results have convinced SSA that both administrative and benefit costs would
be substantially higher under the Prototype if the initiative were expanded
to other states in its current form. Although the rate of awards at the ALJ
level is lower under the Prototype than under the traditional process, SSA
estimates that about 100,000 more denied claimants would appeal to the ALJ
level under the Prototype. Because of this, additional claimants would wait
significantly longer for final agency decisions on their claims. This would
further increase workload pressures on SSA hearings offices, which are
already experiencing considerable case backlogs. The additional appeals are
also expected to result in more awards from ALJs and overall under the
Prototype than under the traditional process. SSA told us in December 2001
that the agency would not expand the Prototype to additional states in its
current form. Instead, it published a notice in the Federal Register on
December 28, 2001, extending the Prototype in the existing 10 states for no
longer than 6 months. During the upcoming months, SSA will determine what
revisions it can make to the Prototype to decrease overall processing time
and to reduce its impact on costs before proceeding further.
The Hearings Process Improvement initiative has been implemented and is
currently operating in all 138 hearing offices. The initiative was
implemented in hearing offices in phases, without a test, and was
operational nationwide by November 2000. The initiative has not reduced the
time required to process a claim; rather, processing has slowed
considerably. In addition, the backlog of cases waiting to be processed has
increased and is rapidly approaching crisis levels.
The Hearings Process Improvement initiative was intended to improve customer
service by reducing the time it takes to get a decision on an appealed
claim. To reach this end, the initiative introduced changes designed to
ensure efficient case processing. This was to be accomplished by increasing
the level of analysis and screening done on a case before it is scheduled
for a hearing with an ALJ. In addition, the initiative reorganized hearing
office staff into small groups, called "processing groups," to ensure better
accountability and control in the handling of each claim. Finally, SSA was
to launch automated functions that would facilitate the monitoring of cases
through the hearings process. These changes were expected to reduce the time
it takes to process cases. In addition, the changes were expected to improve
employee job satisfaction and foster a cooperative work environment.
Hearings Process Improvement Initiative Implemented Nationwide; Desired
Benefits Were Not Achieved
SSA intended to split its 138 hearing offices into three groups to implement
the initiative in one group at a time so that the required changes did not
occur in all hearing offices simultaneously. Phase one included over
one-quarter of all hearing offices; these offices fully implemented the
initiative between January and April 2000. Phases two and three, comprising
the remaining hearing offices, were scheduled to begin in October 2000 and
January 2001, respectively. However, phase three was implemented early, in
anticipation of expected workload increases, at the same time as phase two
in October 2000. As a result, all hearing offices had implemented the
initiative by November 2000.
The results of the Hearings Process Improvement initiative have been
disappointing for SSA. The initiative has not reduced the time it takes to
approve or deny an appealed case. Rather, the initiative has added 18 days
to the time required for a decision in an appealed claim. In September 2001,
after the initiative was implemented, processing time in hearings offices
was 336 days, up from 318 days in September 1999. As a result of this
increase, the initiative failed to achieve its fiscal year 2001 processing
time goal of 208 days. Processing time in phase one hearing offices is not
better than phase two and three hearing offices.23
In addition, the number of appealed cases processed has decreased since the
initiative's implementation. In fiscal year 1999, 597,000 cases were
decided; in fiscal year 2001, this number had decreased 22.1 percent to
465,228 cases. Fewer cases being decided has led to a growth in the backlog
of cases pending a decision. Before the initiative was implemented, 311,958
cases were pending a decision in September 1999. Two years later, in
September 2001, the number of appealed cases pending a decision had
increased 39.7 percent to 435,904. During this time, the number of cases
received by hearing offices had increased by only 5.7 percent. Therefore,
increased workload could be, at most, only a small part of the explanation
for the growth in backlog.
The failure of the Hearings Process Improvement initiative is, in part, the
result of attempts to implement large-scale changes too quickly without
resolving known problems. Problems-process delays, poorly timed and
insufficient staff training, and the absence of important automated
23Phase one hearing offices' processing time per appealed claim increased
from 314 (Sept. 1999) to 339 days (Sept. 2001). Phases two and three hearing
offices' processing time per appealed claim increased from 319 (Sept. 1999)
to 335 days (Sept. 2001).
functions-that surfaced during phase one of implementation were not resolved
before additional phases were implemented. Instead, the pace of
implementation was accelerated when phases two and three were implemented
simultaneously.24
The Hearing Process Improvement initiative experienced the first problem,
process delays, during phase one of implementation. The organization of case
evidence (referred to as "case pulling") slowed and as a result reduced the
number of case files ready for ALJ review. A decrease in the number of case
files for ALJs to review consequently reduced the number of cases that could
be scheduled for a hearing and decided upon. This case-pulling backlog was
due to changes in staff responsibilities and promotions that were a result
of the initiative. These changes created a void of experienced staff to
organize and prepare case files for ALJ review. Managers in hearing offices
that implemented the initiative during phase one recommended to phase two
and three hearing offices that they prepare extra cases for ALJs prior to
implementing the initiative. Despite this feedback, SSA management did not
ensure that extra cases were prepared for ALJs. Consequently, ALJs in phases
two and three hearing offices also had too few cases prepared for their
review when the initiative was implemented.
A second problem, poorly timed and insufficient staff training, contributed
to process delays. While over 2,000 individuals were trained for new
responsibilities given to them as a result of the Hearings Process
Improvement initiative, much of this training was poorly timed and was
provided too early or too late. For example, some employees waited up to 5
months after the initiative was implemented to receive training. In
addition, many employees indicated that the training was ineffective and did
not prepare them for their new responsibilities, according to SSA's Office
of Workforce Analysis.25 These training-related problems were not resolved
before implementation continued.
24As noted earlier, we recommended that SSA 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.
25See Social Security Administration, Office of the Deputy Commissioner for
Disability and Income Security Programs, Implementing a New Hearing Process
in OHA: Hearings Process Improvement Phase 1 Implementation Report,
(Baltimore, Md.: SSA, Oct. 2000).
Finally, problems encountered during the initiative's implementation were
exacerbated by the fact that the automated functions necessary to support
initiative changes never materialized. Enhanced automated functions could
have facilitated the tracking and monitoring of cases and the transfer of
case-related data. However, these functions that would have facilitated
faster processing of cases were not available as designed, although they had
been included in the initiative's plan. Again, SSA management failed to
resolve this problem before continuing to implement the initiative.
Hearing offices' performance may also have been affected by a poor
relationship between SSA and the ALJs. In January 2001, the Social Security
Advisory Board recommended that SSA improve its relationship with the ALJs
by changing its relationship from one of confrontation to cooperation.26 A
poor relationship between SSA and the ALJs may have contributed to a lack of
stakeholder support for the Hearings Process Improvement initiative. Among
ALJs there was mixed support for the initiative. Many ALJs indicated that
the ALJ union was organized in 1999 in response to the perception that SSA
excluded them in the formation of the Hearings Process Improvement
initiative. However, SSA officials disagreed with this assertion and said
that ALJs were included during the formation of the initiative.
Finally, the difficulties SSA is experiencing under the Hearings Process
Improvement initiative may also have been made worse by a freeze on ALJ
hiring.27 Since April 1999, this hiring freeze has prevented SSA from hiring
new ALJs to replace those who have retired. However, the hiring freeze was
temporarily lifted, thereby allowing SSA to hire 126 ALJs in September 2001.
The freeze is still in effect and may impact hearing offices' future
performance.
In an attempt to address its problems in implementing the Hearings Process
Improvement initiative, SSA management in March 2001 allowed hearing offices
to modify elements of the initiative in hopes of facilitating
26See Social Security Advisory Board, Charting the Future of Social
Security's Disability Programs: The Need for Fundamental Change (Washington,
D.C.: SSAB, Jan. 2001).
27Litigation brought before the Merit Systems Protection Board in the case
of Azdell v. OPM questions the method that the Office of Personnel
Management used to compute the veterans' preference in the ranking of ALJ
candidates. As a result, OPM has been unable to provide a list of qualified
ALJs that SSA uses to hire ALJs. As a result, SSA has experienced a hiring
freeze.
and speeding case processing. For example, instead of cases being handled
exclusively within the smaller processing group, SSA allowed them to be
handled by individuals outside of the group. This undercut the rationale
behind the processing groups, which was to heighten accountability. In
addition, with the intention of allowing more cases to reach ALJs, hearing
offices were allowed to reduce the level of screening and analysis
prescribed by the initiative before cases go to the ALJs. These
modifications contradict some of the original objectives of the initiative.
In addition, these modifications make it difficult to tell if the concepts
in the initiative as designed can ever be effective because it has not been
implemented as intended. SSA is currently evaluating the Hearing Process
Improvement initiative to determine what lessons can be learned and what
changes need to be made.
Despite these modifications, case processing has slowed and contributed to
the backlog. SSA's current backlog is reminiscent of a crisis-level backlog
in the mid 1990's, which led to the introduction of 19 temporary initiatives
designed to reduce OHA's backlog of appealed cases. These temporary
initiatives introduced new procedures and reallocated staff. Among the most
long-standing of these initiatives was the Senior Attorney Program. Under
this program, selected attorneys reviewed claims to identify those cases in
which the evidence already in the case file supported a fully favorable
decision. Senior Attorneys had the authority to approve these claims without
ALJ involvement. The Senior Attorney Program took effect in fiscal year 1995
and was phased out in 2000. During its existence, the program succeeded in
reducing the backlog of pending disability cases at the hearing level by
issuing some 200,000 hearing-level decisions. However, findings on the
accuracy of Senior Attorney decisions are mixed. One study concluded that
the quality of decisions made by Senior Attorneys generally increased over
the period of the initiative, though falling short of the quality of
decisions made by the ALJs.28 A second study indicates that the quality of
decisions made by Senior Attorneys is comparable to those made by the
ALJs.29 SSA management
28OQA reviewed about 1,800 Senior Attorney decisions issued from fiscal
years 1995 through 2000. OQA's assessment is based on analysis conducted by
ALJs who were temporarily detailed to the Disability Hearings Quality Review
Process.
29This study was done by the Appeals Council, which routinely reviews
unappealed decisions as a part of the Pre-Effectuation Review. The
Pre-Effectuation Review consists of cases OQA has identified as potentially
requiring corrective action. In July 1999, the Appeals Council reported data
it had collected from its review of 1,055 unappealed Senior Attorney
decisions and 833 favorable on-the-record ALJ decisions issued between
August 8, 1995 and July 14, 1999.
has expressed concern that the Senior Attorney Program is a poor allocation
of resources as it diverts attorneys from processing more difficult cases in
order to process the easier cases.
Finally, SSA faces several challenges that may exacerbate the current
backlog problem. First, recent legislative changes may increase workloads,
according to SSA officials.30 Certain Medicare coverage revisions may
increase hearing office workloads by introducing a new type of case for ALJs
to review. This new type of case requires ALJs to review determinations of
whether or not a particular item or service will be covered by Medicare.31
SSA officials said that this new workload presents many challenges for OHA
because ALJs will be reviewing policy instead of individual cases and
conducting adversarial hearings. Originally expected to take effect in
October 2001, review of this new type of case has been delayed until
regulations are issued. SSA officials hope to isolate the impact of this new
caseload to a separate hearing office unit. Second, future revisions to the
Medicare appeals process may also increase hearing offices' workload by
broadening the circumstances under which Medicare cases can be appealed, as
well as decreasing the amount of time OHA has to make a decision, according
to SSA officials. These revisions to the Medicare appeals process will take
effect October 2002. Finally, and perhaps most significantly, SSA is facing
a workload increase as the baby boom generation reaches its disability prone
years, making it all the more vital to resolve this backlog of appealed
cases awaiting a decision.
The Appeals Council Process Improvement initiative was implemented in fiscal
year 2000. The initiative introduced new strategies for processing cases at
the Appeals Council with the intent of improving customer service by
reducing processing times and pending caseloads. SSA developed six new
strategies by which to accomplish this, only two of which are permanent. The
four temporary strategies included efforts to add staff resources from other
units. However, the focus of the initiative is currently on the two
permanent strategies. These two new strategies require staff members to
screen for cases eligible for quick action and encourage staff members to
discuss difficult cases with adjudicators before preparing more
time-consuming written analyses.
30P.L. 106-554, Medicare, Medicaid and SCHIP Benefits Improvement and
Protection Act of 2000. Section 521 revises the Medicare appeals process.
Section 522 revises the Medicare coverage process.
31This new type of case is referred to as a local coverage determination.
Appeals Council Process Improvement Initiative Moving in the Right
Direction, But Has Not Met Goals
The Appeals Council Process Improvement initiative has reduced both the time
required to process a case and the backlog of cases awaiting review.
However, the results on both fall short of goals. Processing time in the
Appeals Council was reduced from 458 days (fiscal year 1999) to 447 days
(fiscal year 2001), still falling short of the fiscal year 2001 goal of 285
days. The backlog of cases awaiting review was reduced from 144,500 (fiscal
year 1999) to 95,400 (fiscal year 2001) but falls short of the fiscal year
2001 goal of 51,100 cases.
According to SSA officials, the impact of the initiative was limited by a
number of factors. First, the initiative originally included the temporary
addition of outside staff to help process cases. This additional support,
however, did not fulfill expectations and has been discontinued. In
addition, SSA officials indicated that the initiative's impact was limited
by automation problems and policy changes. For example, data storage and
retrieval problems, as well as an inefficient and error-prone case tracking
system, caused process delays. Also, recent policy changes modified how
appealed cases are processed when the claimant has filed a subsequent
application. According to SSA officials, these policy changes raise
complicated adjudicative issues that require more time to resolve.32
However, SSA management has taken action to resolve these problems, which
SSA officials believe should enhance future progress.
SSA's original plan to redesign the disability claims process issued in 1994
called for SSA to undertake a parallel effort to revamp its existing quality
assurance system. Progress to date, however, has been limited to a
contractor's assessment of SSA's existing quality assurance practices. This
assessment was completed in March 2001. SSA subsequently established an
executive work group to consider what action to take in response to the
contractor report.
Accurate disability decisions are an essential element of good public
service, and SSA has in place several quality review systems to measure the
accuracy of disability decisions made by DDSs and ALJs. At the same time,
SSA has long recognized the limitations of its existing quality
32Under SSA's new policy (effective Dec. 1999), subsequent applications are
kept separate from the original application, resulting in two cases pending
at different levels of the process. According to SSA officials, having two
files for the same claimant raises complicated adjudicative issues requiring
more time to resolve.
SSA Has Not Developed a Comprehensive Quality Assurance System
assurance processes and expressed the desire to improve these processes. In
its several revisions to the 1994 redesign plan, SSA continued to voice the
need to develop a more comprehensive quality assurance system focused on
building in quality as disability decisions are made and improving quality
reviews after decisions are made. In its latest disability management plan,
issued in January 2001, SSA stated that its quality assurance system needed
to more effectively promote uniform and consistent disability decisions
across all geographic and adjudicative levels. We have also recognized that
these systems are limited and need to be improved.33
Yet, SSA has made very little progress in developing such a system, at least
in part due to considerable disagreement among internal and external
stakeholders on how to accomplish this difficult objective. As a first step,
SSA contracted with an independent consulting firm with expertise in
designing and developing effective quality assurance systems to assess SSA's
quality assurance practices used in the disability claims process.34 In
March 2001, the consulting firm issued its final report.
The consulting firm's report concluded that SSA could only achieve its
quality objectives for the disability program by adopting a broad, modern
view of quality management. While SSA's existing quality assurance practices
focus on identifying errors, the broader concept of quality management
encompasses all of the efforts of an organization to produce quality
products. The consulting firm outlined seven requirements of a
"best-practice" quality management system and concluded that SSA's existing
system is "substantially deficient" in the extent to which it satisfies each
of the requirements. A best practice quality management system for SSA's
disability claims process would
* develop a clear operational definition of quality with multiple
dimensions, such as accuracy, timeliness, efficiency, customer service, and
due process;
* develop and support performance measures that are closely tied to the
definition of quality;
33U.S. General Accounting Office, Social Security Disability: SSA Must Hold
Itself Accountable for Continued Improvement in Decision-making ,
GAO/HEHS-97-102, (Washington, D.C.: Apr. 12, 1997) and GAO/HEHS-99-25.
34The Lewin Group and Pugh Ettinger McCarthy Associates, LLC.
Conclusions
* support a quality focused culture-that is, employees and management rather
than just the designated quality department must be responsible for quality.
Managers in every component must champion the common quality objective;
provide information that can be used to improve the disability
decision-making process and disability policy;
* provide employees with the resources to produce quality outcomes and
service and value employees for their contribution to success;
* ensure that the disability programs are national programs. This should
include a measurement system that can identify variation and a systematic
effort to address variation when it is identified;
* support statutory and regulatory requirements. This goes beyond measuring
performance as required by statute to providing information that can address
congressional concerns, assist in the analysis of proposed legislation, and
support the monitoring and evaluation of its implementation.
SSA agreed that it is appropriate and necessary for the agency to go forward
toward transforming the existing quality assurance program into a broader
quality management model. The agency established an executive work group to
decide a future course of action.
Since 1994, SSA has introduced a wide range of initiatives in an effort to
redesign its disability claims process. In spite of the significant
resources SSA has dedicated to improving the disability claims process, the
overall results-including the results from the five initiatives that are the
subject of this report-have been disappointing. We recognize that
implementing sweeping changes such as those envisioned by these initiatives
can be difficult to accomplish successfully, given the challenge of
overcoming an organization's natural resistance to change. But the factors
that led SSA to attempt the redesign-increasing disability workloads in the
face of resource constraints-continue to exist today and will likely worsen
when SSA experiences a surge in applications as more baby boomers reach
their disability-prone years.
Today, SSA management faces crucial decisions on how to proceed on a number
of these initiatives. We agree that SSA should not implement the Disability
Claim Manager at this time, given its high costs and the other practical
barriers to implementation at this time. We also agree that the Appeals
Council Process Improvement initiative should continue, but with increased
management focus and commitment to achieve the initiative's performance
goals. Deciding the future course of action on each of the remaining three
initiatives presents a challenge to SSA. For example, in the next several
months, SSA will face a decision on how to proceed with
the Prototype initiative. Preliminary results indicate that this initiative
has the potential to achieve its objective of significantly reducing the
time it takes for claimants to receive final decisions from SSA on their
claims- first, by awarding more legitimate claims at the initial DDS level
and second, by moving denied claims to the ALJ quicker. However, if the
Prototype is expanded nationwide in its current form, both benefit and
administrative costs will increase. SSA faces the challenge of finding a way
to retain the Prototype's most positive elements while also reducing its
impact on costs.
We are most concerned about the failure of the Hearings Process Improvement
initiative to achieve its goals. Hearing office backlogs are fast
approaching the crisis levels of the mid-1990's. At that time, SSA took a
series of actions that, at least in the short term, reduced the backlog.
However, SSA has yet to take actions to successfully address the current
problem on either a short-term or long-term basis. As a result, the problem
will likely worsen. We also are concerned about SSA's lack of progress in
developing a comprehensive quality assurance system. SSA's progress has been
slow, despite the agency's long-term recognition that such a system is
needed. Without such a system, it is difficult for SSA to ensure the
integrity of SSA's disability claims process.
Finally, given the limited overall success that SSA has experienced in
implementing initiatives to improve its disability claims process over the
last 7 years, it may be time for the agency to step back and reassess the
scope of its basic approach. SSA's past and current focus on changing the
steps and procedures of the process and adjusting the duties of its
decision-makers has not been effective to date. A new analysis of the
fundamental issues impeding progress may help SSA identify areas for future
action. Such an analysis might include careful consideration of the areas
previously identified by the Social Security Advisory Board, such as the
fragmentation and structural problems in SSA's overall disability service
delivery system.
Recommendations To best ensure that SSA's disability decision-making process
initiatives improve customer service by providing more timely and accurate
processing of claims, we recommend that SSA take the following actions:
* Implement short-term strategies to immediately reduce the backlog of
appealed cases in the Office of Hearings and Appeals. These strategies could
be based on those that were successfully employed to address similar
problems in the mid-1990's.
* Develop a long-range strategy for a more permanent solution to the backlog
and efficiency problems at the Office of Hearings and Appeals. This strategy
should include lessons learned from the Hearings Process Improvement
initiative, the use of limited pilot tests before implementing additional
changes nationwide, and consideration of some of the fundamental, structural
problems as identified by the Social Security Advisory Board.
* Develop an action plan for implementing a more comprehensive and
sophisticated Quality Assurance Program. This plan should include among
other things implementation milestones and estimated resource needs.
Agency Comments
SSA agreed with our report's observations and recommendations. The agency
commented that our recommendations support programmatic changes under
discussion and provide SSA with the necessary latitude to implement them.
With regard to specific recommendations, SSA agreed that it is critical for
SSA to reduce the backlogs at OHA and stated that it plans to examine its
past experiences with prior initiatives and activities to help develop both
short-term and long-term strategies to address the problem. A major focus of
its long-term strategy will be to redirect significant resources, within
budget limitations, to developing and enhancing technology to support the
disability case process at OHA and the Appeals Council. While we agree with
SSA's efforts to improve its technological support of the disability case
process, we believe that technology improvements alone will not sufficiently
address the problems at OHA. The agency will also need to focus on
addressing the more fundamental management issues and structural problems
that contributed to the backlog of appeals at OHA and the Appeals Council.
SSA also agreed with our recommendation that it should develop an action
plan for implementing a more comprehensive and sophisticated Quality
Assurance Program. The Commissioner charged the executive workgroup with
defining the components of quality performance and developing specific
pilots that would test several of the Quality Assurance redesign options
being considered. SSA stated that action plans, implementation milestones,
and resource needs for these pilots are currently being drafted.
In addition to its comments on our recommendations, SSA also made technical
comments on our draft report, which we have incorporated when appropriate.
One particular technical comment made by SSA that we did not incorporate
warrants explanation. We compare the results on the accuracy of decisions
made under the Prototype with those made by the comparison group operating
under the traditional process. SSA suggested that we also compare
performance over time--that is, before and after implementation. While
adding this comparison would slightly alter the relative difference between
the Prototype and comparison groups of DDSs, the end result as described in
our report remains the same. Prototype DDSs performed better overall and on
denied claims but less well on awards.
We are sending copies of this report to the Commissioner of the Social
Security Administration and other interested parties. We will also make
copies available to others on request. If you or your staff have any
questions about this report, please contact me on (202) 512-7215 or Kay
Brown at (202) 512-3674. Key contributors to this report were Ellen
Habenicht, Angela Miles, and Corinna Nicolaou.
Sincerely yours,
Robert E. Robertson, Director Education, Workforce, and Income Security
Issues
Page 31 GAO-02-322 Improving SSA's Disability Process
Page 32 GAO-02-322 Improving SSA's Disability Process
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