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entitled 'Social Security Disability: Disappointing Results From SSA's 
Efforts to Improve the Disability Claims Process Warrant Immediate 
Attention' which was released on February 27, 2002. 

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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: 

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: 

[End of section] 

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 million[Footnote 1] 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 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.[Footnote 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. 

Figure 1: SSA's Disability Claims Process: 

[Refer to PDF for image: illustration] 

Claimant Contacts SSA Field Office: 
Application Process Begins: 
SSA Field Office personnel: 
* Obtain information; 
* Determine eligibility for nonmedical factors. 
If nonmedical eligibility factors are met, application is forwarded to 
DDS. 

Initial Determination: 
State DDS personnel: 
* Gather, develop, and review medical evidence; 
* Decide on eligibility on basis of medical and work-related factors. 
If determination is not favorable, claimant has 60 days to request a 
reconsideration. 

Reconsideration: 
State DDS personnel: 
* Reexamine prior and any new evidence; 
* Render a new eligibility decision. 
If reconsideration is not favorable, claimant has 60 days to request a 
hearing before an ALJ. 

Administrative Law Judge (ALJ) Hearing: 
SSA Hearings Office personnel: 
* Review for additional medical evidence; 
* Conduct a hearing and render a new decision. 
If All decision is not favorable, claimant has 60 days to request an 
appeals council review 

Appeals Council: 
SSA Appeals Council: 
* Decides whether to review the case; 
* If case is reviewed, decides whether to reverse decision or return 
case to ALJ. 
If appeals council decision is not favorable, claimant can appeal to 
federal court. 

Federal Court: 
* Renders a new decision. 

Source: SSA documents. 

[End of figure] 

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.[Footnote 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.[Footnote 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.[Footnote 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  in 1999 and 2001.[Footnote 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.[Footnote 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.[Footnote 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 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. 

Disability Claim Manager Test Results Do Not Support Implementation: 

SSA tested the Disability Claim Manager position in 36 locations in 15 
states from November 1999 through November 2000.[Footnote 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 disability claim managers during the 
test, and each manager performed both claims representative and 
disability examiner functions.[Footnote 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 process[Footnote 11]-—
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.[Footnote 12] 

* 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.[Footnote 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.[Footnote 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.[Footnote 15] 
The costs for salaries and for obtaining medical evidence, including 
consultative examinations performed by DDS-paid physicians or 
psychologists, 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.[Footnote 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. 

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!' 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 
claims file. The disability examiner is required to develop evidence 
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-maker before a decision is made.[Footnote 
18] 

* 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 through March 2000; the sample of comparison group claims was 
selected from applications filed from December 1999 through February 
2000.[Footnote 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.[Footnote 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.[Footnote 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. 

* 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.[Footnote 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. 

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: Awards: Without claimant conference; 
Prototype Process (days): 80; 
Traditional Process (days): 79. 

Type of Claim: Awards: With claimant conference; 
Prototype Process (days): 134; 
Traditional Process (days): Not applicable. 

Type of Claim: Denials; 
Prototype Process (days): 110; 
Traditional Process (days): 90. 

Type of Claim: All claims; 
Prototype Process (days): 100; 
Traditional Process (days): 86. 

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. 

Hearings Process Improvement Initiative Implemented Nationwide; 
Desired Benefits Were Not Achieved: 

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. 

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.[Footnote 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 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.[Footnote 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. 
[Footnote 25] These training-related problems were not resolved before 
implementation continued. 

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.[Footnote 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.[Footnote 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 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.[Footnote 28] A second study indicates that the quality of 
decisions made by Senior Attorneys is comparable to those made by the 
ALJs.[Footnote 29] SSA management 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.[Footnote 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.[Footnote 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. 

Appeals Council Process Improvement Initiative Moving in the Right 
Direction, But Has Not Met Goals: 

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.	
	
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.[Footnote 32] 
However, SSA management has taken action to resolve these problems, 
which SSA officials believe should enhance future progress. 

SSA Has Not Developed a Comprehensive Quality Assurance System: 

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	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.[Footnote 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.[Footnote 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; 

* 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. 

Conclusions: 

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, 

Signed by: 

Robert E. Robertson, Director: 
Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Comments from the Social Security Administration: 

Social Security Administration: 
Office of the Commissioner: 
Washington, DC 20254: 

February 8, 2002: 

Mr. Robert E. Robertson: 
Director, Education, Workforce, and Income Security Issues: 
U.S. General Accounting Office: 
Washington, D.C. 20548: 

Dear Mr. Robertson: 

Thank you for the opportunity to review and comment on the draft 
report, "Social Security Disability: Disappointing Results from SSA's 
Efforts to Improve the Disability Claims Process Warrant Immediate 
Actions" (GAO-02-322). The General Accounting Office fairly describes 
in the report the results of disability claims process initiatives 
undertaken by the Agency. We believe your recommendations support 
programmatic changes under discussion and provide the Agency with the 
necessary latitude to address implementation. 

Our specific comments on the report recommendations are enclosed. We 
also offer some technical comments that are intended to improve the 
accuracy of the report. If you have any questions, please have your 
staff contact Trudy Williams at (410) 965-0380. 

Sincerely, 

Signed by: 

Jo Anne B. Barnhart: 
Commissioner: 

Enclosure: 

[End of letter] 

Comments Of The Social Security Administration (SSA) On The General 
Accounting Office (GAO) Draft Report, "Social Security Disability: 
Disappointing Results From Ssa's Efforts To Improve The Disability 
Claims Process Warrant Immediate Actions" (GAO-02-322): 

Recommendation 1: 

SSA should implement short-term strategies to immediately reduce the 
backlog of appealed cases in the Office of Hearings and Appeals (OHA). 
These strategies could be based on those that were successfully 
employed to address similar problems in the mid-1990s. 

Comment: 

We agree that it is critical to reduce the backlogs at OHA and will be 
looking at the Agency's experiences with prior initiatives and 
activities to help develop both short-term and long-term strategies to 
address these issues. 

Recommendation 2: 

SSA should develop a long-range strategy for a more permanent solution 
to the backlog and efficiency problems at the OHA. 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. 

Comment: 

We concur regarding the need to develop a long-range strategy for more 
permanent solutions to backlogs in the appeals process. A major focus 
will he to redirect significant resources within budget limitations to 
technology developments and enhancements at the appeals end of the 
disability case process (OHA and Appeals Council reviews). 

Recommendation 3: 

SSA should 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. 

Comment: 

We concur. Following the contractor's report in March 2001, the Agency 
established an executive workgroup to review and assess the 
contractor's findings and recommendations and prepare a set of options 
for proceeding with quality assurance (QA) redesign. The workgroup has 
met with and briefed the Commissioner on its deliberations. As a 
result of this briefing, the Commissioner charged the workgroup with 
further defining the components of quality performance and developing 
specific pilots that would test several of the QA redesign options 
being considered. Action plans, implementation milestones and resource 
needs for these pilots are currently being drafted. 

[End of section] 

Footnotes: 

[1] The $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. 

[2] The 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. 

[3] U.S. General Accounting Office, Social Security Administration: 
Major Changes in SSA's Business Processes Are Imperative, [hyperlink, 
http://www.gao.gov/products/GAO/T-AINID-94-106], (Washington, D.C.: 
Apr. 14, 1994). 

[4] U.S. General Accounting Office, SSA Disability Redesign: Focus 
Needed on Initiatives Most Crucial to Reducing Costs and Time, 
[hyperlink, http://www.gao.gov/products/GAO/HEHS-97-20], (Washington, 
D.C.: Dec. 20, 1996). 

[5] U.S. General Accounting Office, SSA Disability Redesign: Actions 
Needed to Enhance Future Progress, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-25], (Washington, D.C.: Mar. 
12, 1999). 

[6] See 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. 

[7] The 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. 

[8] See 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). 

[9] This 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. 

[10] Because 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. 

[11] The difference in customer satisfaction among awarded claimants 
in the two groups was not statistically significant. 

[12] Figures 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. 

[13] The 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. 

[14] SSA staff selected for the disability claim manager position 
received temporary promotions; only some DDS employees selected as 
disability claim managers received temporary promotions. 

[15] Costs-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. 

[16] SSA'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). 

[17] Medical 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. 

[18] Claimant conferences are not offered in cases where the claimant 
has moved and cannot be located, refuses to cooperate, or other 
similar situations. 

[19] The 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. 

[20] Because 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. 

[21] Data on reconsiderations are incomplete for the comparison group; 
therefore, the combined initial and reconsideration award rate for 
this group is not final. 

[22] To 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. 

[23] Phase 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). 

[24] As 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. 

[25] See 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). 

[26] See Social Security Advisory Board, Charting the Future of Social 
Security's Disability Programs: The Need for Fundamental Change 
(Washington, D.C.: SSAB, Jan. 2001). 

[27] Litigation 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. 

[28] OQA 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. 

[29] This 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. 

[30] P.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. 

[31] This new type of case is referred to as a local coverage 
determination. 

[32] Under 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. 

[33] U.S. General Accounting Office, Social Security Disability: SSA 
Must Hold Itself Accountable for Continued Improvement in Decision-
making, [hyperlink, http://www.gao.gov/products/GAO/HEHS-97-102], 
(Washington, D.C.: Apr. 12, 1997) and [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-99-25]. 

[34] The Lewin Group and Pugh Ettinger McCarthy Associates, LLC. 

[End of section] 

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